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BP Business Economic Loss Claim Appeal 2017-1016:School’s Tuition and Non-Tuition Revenue Allocated On Straight-Line Basis

The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms

The Claims Administrator denied the BEL claim of this Catholic school in Harvey, Louisiana (Zone D). When subjected to Policy 495 matching analysis, four criteria were triggered. The program accountant then utilized the Education Methodology to restate the financials. As restated, the P&Ls were unable to satisfy any of the causation tests in Exhibit 4B. Claimant appeals.
In its opening memorandum, Claimant lobs a barrage of asserted errors at the Settlement Program but only two, merit discussion. Claimant argues that the vendor accountants improperly adjusted tuition revenue by restating actual expenses in the Tuition Assistance Expense account as revenue. Claimant also argues that the accountant erroneously restated non-tuition revenue over the course of the fiscal year, lumping it with a similar reallocation of tuition revenue. Claimant therefore
argues that the accountant improperly utilized the Education Methodology to reallocate non-tuition revenue rather than allowing it to remain in the months recorded.
In response, BP argues that the vendor accountant classified the Tuition Assistance Expense account as contra-revenue, thereby properly offsetting tuition refunds against the corresponding revenue. BP also argues that the reallocation of non-tuition revenue, under the facts of this claim, was an appropriate exercise of the program accountant’s professional judgment.
De novo review does not support the Claimant’s assertions of error. First, the reallocation of tuition revenue was proper under Policy 495 as it was allocated on a straight-line basis over the periods of instruction. As to the non-tuition revenue, the program accountant noted that this consisted primarily of grants and contributions that represented efforts to raise funds for the school’s yearly operations. On this basis, this revenue was allocated evenly over the fiscal year. This panelist is convinced that these were proper exercises of the vendor accountant’s professional judgment.
No basis for disturbing the application of the Education Methodology has been demonstrated. Accordingly, Claimant’s appeal is denied.

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