EPA officials cut from $506,000 to about $15,000 the amount they sought from Kansas University for mismanagement of a conference.
If only the government could reduce the federal deficit this way.
The Environmental Protection Agency has decided Kansas University won't have to repay the government $506,000 for allegedly mishandling coordination of a 1989 EPA conference in Kansas City, Mo.
Instead, EPA grants administrator Gary Katz said in a settlement proposal that KU owes only about $15,000.
However, Kim Moreland, KU's director of research support and grants administration, said Wednesday that the university shouldn't have to pay the EPA anything.
"I maintain that KU acted in good faith in organizing this conference, followed EPA instructions and obtained EPA approvals and should not be responsible for its costs," she said.
Marian Cody of the EPA's grants administration office in Washington, D.C., declined to comment about the case.
The conflict centers on the National Environmental Information Conference at Hyatt Regency Crown Center Hotel. More than 700 people -- including EPA Administrator William Reilly -- attended the meeting.
An anonymous tip in 1992 sparked an investigation by the EPA inspector general's office. After a 14-month review, inspectors reported EPA and KU officials approved excessive expenditures in their effort to make the conference an unforgettable experience.
"They didn't want for anything," said Nikki Tinsley of the EPA inspector general's office.
For example, $2,400 was spent to rent plush chairs to replace modest Hyatt seating. The bill also included $1,233 for alcoholic beverages, $2,058 for a robot to entertain participants, $3,480 for a photographer to take pictures and $1,232 for a highway billboard with the message "EPA Welcomes You to KC."
The price tag on the conference was $760,000 -- nearly 50 percent more than the original estimate.
EPA auditors concluded KU permitted unallowable expenditure of federal funds. To compensate for the miscue, inspectors concluded KU should refund the government $506,000.
During subsequent negotiations, the disputed amount dropped $300,000. The latest solution offered by EPA lowered the damage to about $15,000.
Moreland said a final agreement is not expected "for some time."
"Several questions that could affect the final outcome remain to be resolved between federal departments about travel expenses associated with this conference," she said.
The audit criticized EPA and KU for not entering into a contract for the conference. Instead, EPA had a "cooperative agreement" with KU's division of continuing education, which manages about 120 conferences a year.
The EPA and KU avoided the contract to sidestep prohibitions against paying conference travel expenses of 171 nonfederal employees, auditors said.