B-157179, FEB 28, 1973, 52 COMP GEN 558

B-157179, FEB 28, 1973, 52 COMP GEN 558

STATES - FEDERAL AID, GRANTS, ETC. - MATCHING FUND ACTIVITIES - "HARD MATCH" REQUIREMENT - FUNDS FROM PRIVATE, ETC., SOURCES THE PURPOSE OF THE "HARD-MATCH" REQUIREMENT IN THE OMNIBUS CRIME CONTROL AND SAFE STREETS ACT OF 1968, AS AMENDED, WHICH AUTHORIZES THE LAW ENFORCEMENT ASSISTANCE ADMINISTRATION (LEAA) TO GRANT FUNDS FOR STRENGTHENING AND IMPROVING LAW ENFORCEMENT, BEING TO ASSURE STATE AND LOCAL GOVERNMENTS SHARE IN LEAA PROGRAMS WITH MONIES THEY APPROPRIATED, AND NOT TO EXCLUDE PRIVATE ORGANIZATIONS, THE "HARD-MATCH" REQUIREMENT DOES NOT PREVENT THE USE IN LEAA-SPONSORED NATIONAL SCOPE PROJECTS OF MATCHING FUNDS FROM PRIVATE SOURCES, OR THE USE OF MODEL CITY FUNDS ALLOTTED BY GRANTEES TO LEAA PROJECTS, AS SUCH FUNDS ARE CONSIDERED "MONEY APPROPRIATED" FOR THE PURPOSES OF THE "HARD-MATCH" REQUIREMENT. THE "HARD -MATCH REQUIREMENT" IN CONNECTION WITH SUBGRANTS TO NON GOVERNMENTAL UNITS ALSO MAY BE INTERPRETED TO PERMIT THE USE OF PRIVATE SOURCES, AND AS THE FUNDS FOR THE ADMINISTRATION OF AMERICAN SAMOA LOSE THEIR FEDERAL IDENTITY, THEY MEET THE REQUIREMENT.

TO THE ADMINISTRATOR, LAW ENFORCEMENT ASSISTANCE ADMINISTRATION, FEBRUARY 28, 1973:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 16, 1972, PRESENTING FOR DECISION FOUR QUESTIONS CONCERNING THE LEGALITY OF CERTAIN GRANTS PROPOSED TO BE MADE BY THE LAW ENFORCEMENT ASSISTANCE ADMINISTRATION (HEREINAFTER REFERRED TO AS LEAA OR AS THE ADMINISTRATION). THE GRANTS IN QUESTION WOULD BE MADE PURSUANT TO TITLE I OF THE OMNIBUS CRIME CONTROL AND SAFE STREETS ACT OF 1968, APPROVED JUNE 19, 1968, PUBLIC LAW 90-351, 82 STAT. 197, AS AMENDED BY THE OMNIBUS CRIME CONTROL AND SAFE STREETS ACT OF 1970, APPROVED JANUARY 2, 1971, PUBLIC LAW 91-644, 84 STAT. 1880, 42 U.S.C. 3701 ET SEQ. THE FOUR QUESTIONS PRESENTED ALL INVOLVE THE APPLICATION OF THE SO -CALLED "HARD-MATCH" REQUIREMENT OF THE 1968 ACT, AS AMENDED.

LEAA WAS ESTABLISHED BY THE ABOVE-CITED 1968 ACT, AND WAS GIVEN AUTHORITY TO GRANT FEDERAL FUNDS FOR THE PURPOSES OF STRENGTHENING AND IMPROVING LAW ENFORCEMENT. A MATCHING REQUIREMENT WAS ESTABLISHED AS A CONDITION FOR GRANTS OF FUNDS BY LEAA AND EACH GRANT WAS TO BE LIMITED IN AMOUNT TO A CERTAIN SPECIFIED PERCENTAGE OF THE TOTAL COST OF THE LAW ENFORCEMENT PROGRAM BEING ASSISTED. SEE SECTION 301(C). ALTHOUGH THE REMAINDER OF THE COST OF THE PROGRAM HAD TO COME FROM SOURCES OTHER THAN LEAA, THE 1968 ACT SPECIFIED NEITHER THE SOURCE NOR THE CHARACTER OF THE REQUIRED "MATCH." IN ADDITION TO CHANGING THE PERCENTAGES OF MATCHING FUNDS REQUIRED, THE 1970 ACT ADDED THE "HARD-MATCH" REQUIREMENT. SPECIFICALLY, EFFECTIVE JULY 1, 1972:

*** AT LEAST 40 PER CENTUM OF THE NON-FEDERAL FUNDINGS OF THE COST OF ANY PROGRAM OR PROJECT TO BE FUNDED BY (A BLOCK GRANT UNDER SECTION 301 OR A DISCRETIONARY GRANT UNDER SECTION 306 OF THE ACT OF 1968 AS AMENDED) *** SHALL BE OF MONEY APPROPRIATED IN THE AGGREGATE, BY STATE OR INDIVIDUAL UNIT OF GOVERNMENT, FOR THE PURPOSE OF THE SHARED FUNDING OF SUCH PROGRAMS OR PROJECTS. SEE 42 U.S.C. 3731(C), 3736.

YOUR FIRST QUESTION IS WHETHER SO-CALLED NATIONAL SCOPE PROJECTS FUNDED UNDER SECTION 306 OF THE 1968 ACT, AS AMENDED, 42 U.S.C. 3736, REQUIRE GOVERNMENTALLY APPROPRIATED FUNDS FOR "HARD-MATCH" OR WHETHER FUNDS FROM PRIVATE SOURCES CAN BE USED AS "HARD-MATCH" FOR THESE PROJECTS.

YOUR LETTER EXPLAINS THE NATIONAL SCOPE PROJECTS AS FOLLOWS:

THE ADMINISTRATION IN SOME INSTANCES USES DISCRETIONARY FUNDS ALLOCATED UNDER SECTION 306 TO ASSIST NATIONAL PROGRAMS OF ASSISTANCE TO ALL STATE AND LOCAL LAW ENFORCEMENT. THESE PROJECTS GENERALLY IMPACT ON PARTICULARIZED AGENCIES WITHIN THE LAW ENFORCEMENT AREA, SUCH AS PROSECUTOR OFFICES, ALL STATE COURTS, OR JUVENILE COURTS. THEY ARE CALLED "NATIONAL SCOPE" PROJECTS BECAUSE THEY AFFECT THE NATION AS A WHOLE AS OPPOSED TO INDIVIDUAL STATES, CITIES, OR REGIONS. THE DISCRETIONARY GRANT IS MADE TO A STATE PLANNING AGENCY (SPA), WITH THE FUNDS GENERALLY SUBGRANTED TO A NON-GOVERNMENTAL AGENCY. THE SPA IS ALSO HANDLING THE ADMINISTRATION OF THE GRANT.

UNDER THE PROVISIONS OF 306 AT LEAST 25 PERCENT OF THE PROJECT COST MUST BE FROM NON-FEDERAL SOURCES. THE GRANTEE WHO RECEIVES A GRANT FOR A "NATIONAL SCOPE" PROJECT IS NORMALLY ACTIVE IN THE LAW ENFORCEMENT AREA AND A PART OF THE PARTICULARIZED AGENCY GROUP AFFECTED.***

YOU STATE THAT THERE IS NO CLEAR INDICATION FROM THE LEGISLATION OR ITS HISTORY HOW THE "HARD-MATCH" REQUIREMENT IS TO AFFECT NATIONAL SCOPE PROJECTS. WHILE IT APPEARS CLEAR THAT CONGRESS INTENDED THE ADMINISTRATION TO CONTINUE TO FUND THE NATIONAL SCOPE PROJECTS WHICH AFFECT "COMBINATIONS" OF GOVERNMENTAL UNITS, YOU URGE THAT TO REQUIRE GOVERNMENTALLY APPROPRIATED FUNDS IN COMBINATION PROJECTS IS AN IMPOSSIBILITY. IN ILLUSTRATION, THE APPELLATE JUDGE CONFERENCE WITH PARTICIPANTS FROM MANY JURISDICTIONS IS DISCUSSED BY YOU TO THE POINT THAT REQUIRING THE USE OF APPROPRIATED FUNDS FOR MATCHING WOULD REQUIRE EACH UNIT OF GOVERNMENT PLANNING TO SEND AN APPELLATE JUDGE TO PLEDGE FROM LOCALLY APPROPRIATED FUNDS A CASH CONTRIBUTION TO THE NATIONAL COLLEGE OF STATE JUDICIARY BEFORE LEAA COULD CONSIDER FUNDING THE PROGRAM. SUCH A PROCEDURE, YOU STATE, WOULD BE UNWORKABLE.

IT WOULD SERVE GOOD PURPOSE TO PRESENT HERE A SUMMARY OF THE LEGISLATIVE HISTORY OF THE "HARD-MATCH" REQUIREMENT.

AS ALREADY NOTED, THE 1968 ACT PLACED NO LIMITATION ON THE MANNER IN WHICH THAT PORTION OF THE COST OF AN LEAA-ASSISTED PROGRAM NOT COVERED BY THE LEAA GRANT MIGHT BE FINANCED. THUS, THE "MATCH" MIGHT BE FROM STATE, LOCAL OR PRIVATE SOURCES, AND MIGHT BE IN CASH, OR IN THE FORM OF PROPERTY OR SERVICES. IN 1970, CONGRESS CONSIDERED VARIOUS PROPOSED AMENDMENTS TO THE 1968 ACT, ULTIMATELY RESULTING IN THE 1970 AMENDMENT WHICH INCORPORATE THE "HARD-MATCH" REQUIREMENT. AS RELATED IN YOUR LETTER:

*** THE HOUSE PASSED THE 1970 AMENDMENTS FIRST IN H.R. 17825. THIS AMENDED THE 1968 BILL TO ALLOW 90 PERCENT OF THE COST OF A PROJECT TO BE FEDERAL FUNDS RATHER THAN THE REQUIREMENT OF 60 PERCENT IN THE ACT. THE SENATE AMENDMENT WAS INCLUDED IN SENATE REPORT NO. 91-1253, WHICH FIRST ADDED THE HARD MATCH REQUIREMENT. THAT COMMITTEE REPORT HAD A REQUIREMENT THAT FEDERAL FUNDS COULD MAKE UP TO 70 PERCENT OF THE COST OF A PROJECT AND THE REQUIREMENT THAT AT LEAST 50 PERCENT OF THE NON FEDERAL PORTION BE IN MONEY APPROPRIATED FOR THE PURPOSES OF THE PROGRAM.

THE SENATE JUDICIARY COMMITTEE REPORT ACCOMPANYING THE 1970 AMENDMENTS, SENATE REPORT NO. 91-1253, CONTAINED THE FOLLOWING EXPLANATION OF THE CHANGE TO SECTION 306(PAGE 35):

THE COMMITTEE HAS MODIFIED SUBSTANTIALLY THE HOUSE AMENDMENT TO SECTION 306 OF THE ACT DEALING WITH DISCRETIONARY GRANTS. THE CHANGES ARE DESIGNED TO SPELL OUT EXPRESSLY THE AUTHORITY OF LEAA TO MAKE DISCRETIONARY GRANTS AND THE LIMITATIONS APPLICABLE TO THEM. IN GENERAL, THE SAME LIMITATIONS WOULD BE MADE APPLICABLE TO BLOCK GRANTS UNDER SECTION 301 THAT ARE MADE APPLICABLE TO DISCRETIONARY GRANTS. THUS, THE PERSONNEL COMPENSATION LIMITATIONS ARE MADE APPLICABLE, AND THE SHARE OF THE COST OF PROGRAMS AND PROJECTS THAT MAY BE PAID FROM FEDERAL FUNDS IS LIMITED TO 70 PERCENT, THE LIMITATION APPLICABLE TO MOST BLOCK GRANT PROGRAMS. THE ADMINISTRATION COULD MAKE 100 PERCENT GRANTS ONLY TO INDIAN TRIBES AND OTHER ABORIGINAL GROUPS, INCLUDING ESKIMOS, AS IS THE CASE WITH BLOCK GRANTS, NOTED ABOVE. AND AT LEAST ONE-HALF OF THE NON-FEDERAL FUNDING FOR ALL DISCRETIONARY PROGRAMS AND PROJECTS WOULD HAVE TO BE OF SPECIFICALLY APPROPRIATED MONEY, AS DISTINGUISHED FROM DONATED GOODS OR SERVICES. THE REQUIREMENT OF "APPROPRIATED," OF COURSE, HAS REFERENCE TO GOVERNMENTAL UNITS, NOT PRIVATE INDIVIDUALS OR ORGANIZATIONS.

THE SENATE JUDICIARY COMMITTEE REPORT ALSO CONTAINED THE FOLLOWING COMMENT ON THE MATCHING REQUIREMENT:

*** EXPERIENCE UNDER THE LEAA PROGRAM HAS INDICATED THAT THE LOCAL MATCHING REQUIREMENT WILL BECOME A SERIOUS PROBLEM FOR MOST STATES SHOULD IT REMAIN AT ITS PRESENT RATE OF 40 PERCENT FOR MOST PROGRAMS. LOWERING THE REQUIREMENT TO 30 PERCENT WILL AFFORD SUBSTANTIAL RELIEF AND WILL DIMINISH THE EXTENT TO WHICH THE STATES MUST RELY ON COUNTING THE VALUE OF DONATED GOODS AND SERVICES, RATHER THAN MONEY, TO MAKE UP THE NON-FEDERAL SHARE OF PROGRAM COSTS. IN THIS REGARD, THE COMMITTEE HAS INCLUDED A REQUIREMENT THAT AT LEAST ONE-HALF OF THE NON-FEDERAL SHARE OF THE COST OF ANY PROGRAM OR PROJECT SHALL BE MONEY APPROPRIATED EXPRESSLY FOR THE SHARED FUNDING OF SUCH PROGRAM OR PROJECT. THIS PROVISION SHOULD WORK TO GUARANTEE THAT THESE NEW FEDERAL FUNDS WILL, IN FACT, DRAW NEW STATE AND LOCAL FUNDS INTO THE CRIMINAL JUSTICE SYSTEM AND AVOID THE REAL DANGER THAT FEDERAL FUNDS WILL MERELY REPLACE STATE AND LOCAL FUNDS IN FINANCING THE PRESENT SYSTEM. S. REP. NO. 91 1253, 31(1970).

YOUR LETTER FURTHER RELATES THAT:

WHEN THE JUDICIARY COMMITTEE REPORT WAS BEING DEBATED, SENATOR MCCLELLAN, THE COMMITTEE CHAIRMAN, SUBMITTED A SECTIONAL ANALYSIS OF THE BILL, WHICH INCLUDED THE FOLLOWING ON SECTION 306(116 CONG. REC. 35692(1970)):

THE COMMITTEE BILL MODIFIES SUBSTANTIALLY THE HOUSE AMENDMENT TO SECTION 306 OF THE ACT DEALING WITH DISCRETIONARY GRANTS. THE CHANGES ARE DESIGNED TO SPELL OUT EXPRESSLY THE AUTHORITY OF LEAA TO MAKE DISCRETIONARY GRANTS AND THE LIMITATIONS APPLICABLE TO THEM. IN GENERAL, THE SAME LIMITATIONS APPLICABLE TO BLOCK GRANTS UNDER SECTION 301 ARE MADE APPLICABLE TO DISCRETIONARY GRANTS. THUS, THE PERSONNEL COMPENSATION LIMITATIONS ARE MADE APPLICABLE, AND THE SHARE OF THE COST OF PROGRAMS AND PROJECTS THAT MAY BE PAID FROM FEDERAL FUNDS IS LIMITED TO 70 PERCENT, THE LIMITATION APPLICABLE TO MOST BLOCK GRANT PROGRAMS. THE ADMINISTRATION COULD MAKE 100 PERCENT GRANTS ONLY TO INDIAN TRIBES OR OTHER ABORIGINAL GROUPS, AS IS THE CASE WITH BLOCK GRANTS, NOTED ABOVE. AND AT LEAST ONE- HALF OF THE NON-FEDERAL FUNDING FOR ALL DISCRETIONARY PROGRAMS AND PROJECTS WOULD HAVE TO BE OF MONEY, AS DISTINGUISHED FROM DONATED GOODS OR SERVICES.

SENATOR HRUSKA, THE RANKING MINORITY MEMBER OF THE JUDICIARY COMMITTEE, MADE THE FOLLOWING STATEMENT IN HIS EXPLANATION OF THE BILL (116 CONG. REC. 35695(1970)):

THE SENATE PROVISION IS MORE DESIRABLE THAN THE HOUSE AMENDMENT, I BELIEVE, BECAUSE IT RECOGNIZES THAT STATES AND UNITS OF LOCAL GOVERNMENT HAVE DIFFICULTY SUPPLYING THE NEEDED MATCHING FUNDS BUT AT THE SAME TIME RECOGNIZES THE NEED FOR THE STATES AND UNITS OF LOCAL GOVERNMENT TO MAKE A SUBSTANTIAL FINANCIAL COMMITMENT TO ACTION PROGRAMS.

THE SENATE THEN DEBATED THE TWO ISSUES MENTIONED EARLIER, AND AMENDED 306 ONLY TO THE EXTENT OF DELAYING THE HARD MATCH REQUIREMENT UNTIL JULY 1, 1972, AND ADDING THE PHASE OF ALLOWING THE HARD MATCH TO BE MET IN THE AGGREGATE.

THE HOUSE AND SENATE BILLS THEN WENT TO CONFERENCE AND THE CONFERENCE ADOPTED THE "HARD-MATCH" REQUIREMENT OF THE SENATE BILL WITHOUT SUBSTANTIVE COMMENT, EXCEPT TO INDICATE THAT THE CASH REQUIREMENT WAS REDUCED TO 40 PERCENT. SEE PAGES 16 AND 17, H.R. REPT. NO. 91 1768(1970). HOWEVER, DURING CONSIDERATION BY THE SENATE AND THE HOUSE OF THE CONFERENCE REPORT, THERE WAS DISCUSSION ON THE FLOORS OF BOTH CHAMBERS OF THE "HARD-MATCH" REQUIREMENT. IN THE SENATE, SENATOR HRUSKA, ONE OF THE MANAGERS OF THE BILL IN CONFERENCE, DESCRIBED THE PURPOSE OF THAT REQUIREMENT:

*** THE HARD MATCH WOULD INCLUDE ANY FUNDS APPROPRIATED BY A STATE OR UNIT OF LOCAL GOVERNMENT WHICH ARE SPECIFICALLY EARMARKED FOR MATCHING LEAA ACTION GRANTS.

LEAA EXPERIENCE IN THE PAST 2 YEARS HAS FOUND THAT THE STATE AND LOCAL SHARE OF ACTION PROGRAMS HAS FREQUENTLY IF NOT ALWAYS BEEN FIGURED IN DONATED PROPERTY OR SERVICES AND IT IS HOPED THAT THE PROVISION FOR HARD MATCH WILL STIMULATE THE EXPENDITURE OF NEW FUNDS FOR LAW ENFORCEMENT PURPOSES. 116 CONG. REC. 42149(1970).

IN THE HOUSE, MR. POFF, ALSO A CONFERENCE MANAGER, EXPLAINED THE ACTION OF THE CONFERENCE COMMITTEE WITH RESPECT TO "HARD-MATCH" AS FOLLOWS:

THE CONFERENCE ALSO ADOPTED A PROVISION WHICH REQUIRES THAT BEGINNING IN FISCAL YEAR 1973, AT LEAST 40 PERCENT OF THE FEDERAL SHARE OF THE FUNDING OF ANY PROGRAM OR PROJECT BE FROM MONEY EXPRESSLY APPROPRIATED BY THE STATE OR LOCAL GOVERNMENT IN THE AGGREGATE FOR SUCH PROGRAMS OR PROJECTS - AS OPPOSED TO DONATED SERVICES OR PROPERTY. THIS IS THE SO CALLED HARD- MATCH REQUIREMENT AND IT APPLIES EQUALLY TO BLOCK GRANTS AND DISCRETIONARY GRANTS. IF A STATE OR LOCAL GOVERNMENT APPROPRIATES MONEY TO PARTICIPATE DIRECTLY IN AN LEAA PROGRAM, THAT IS OBVIOUSLY A HARD MATCH. BUT WHAT IF THE STATE OR LOCAL GOVERNMENT TRANSFERS PERSONNEL TO PARTICIPATE IN LEAA PROGRAMS OR PROJECTS? THAT IS NOT A HARD MATCH. IT CAN ONLY BE CONSIDERED A HARD MATCH, IF THE STATE OR LOCAL GOVERNMENT WERE TO APPROPRIATE MONEY TO FILL THE VACANCIES CREATED BY THE TRANSFER. THE CONTROLLING PURPOSE OF THE HARD-MATCH PROVISION IS THE DESIRE TO STIMULATE NEW STATE AND LOCAL MONEY FOR IMAGINATIVE AND INNOVATIVE STATE AND LOCAL ANTICRIME PROGRAMS. THIS PURPOSE IS ALREADY ENSCONCED IN SECTION 303(10) OF THE LAW. THE HARD MATCH REQUIREMENT PUTS TEETH INTO THAT LEGISLATIVE PURPOSE.*** 116 CONG. REC. 42197(1970).

(SECTION 303(10), OF THE 1968 ACT, 42 U.S.C. 3733(10), REFERRED TO BY MR. POFF, PROVIDES THAT EACH STATE PLAN FOR PARTICIPATION IN THE LEAA ACTION GRANT PROGRAM SHALL:

*** SET FORTH POLICIES AND PROCEDURES TO ASSURE THAT FEDERAL FUNDS MADE AVAILABLE UNDER THIS TITLE WILL BE SO USED AS NOT TO SUPPLANT STATE OR LOCAL FUNDS, BUT TO INCREASE THE AMOUNT OF SUCH FUNDS THAT WOULD IN THE ABSENCE OF SUCH FEDERAL FUNDS BE MADE AVAILABLE FOR LAW ENFORCEMENT.)

THE PURPOSE OF THE "HARD-MATCH" REQUIREMENT IS ABUNDANTLY CLEAR FROM THE ABOVE-DESCRIBED LEGISLATIVE HISTORY; THAT BEING TO ASSURE THAT STATE AND LOCAL GOVERNMENTS NOT USE FEDERAL FUNDS AVAILABLE UNDER THE ACT IN ORDER TO SUPPLANT THEIR OWN FUNDS (SECTION 303(10)). IT HAD BEEN FOUND THAT STATE AND LOCAL GOVERNMENTS HAD BEEN IN SOME INSTANCES MATCHING LEAA FUNDS WITH PROPERTY OR SERVICES WHICH HAD NOT BEEN ACQUIRED FOR THE PURPOSE OF THE GRANT PROGRAM BUT RATHER HAD BEEN TRANSFERRED FROM OTHER ACTIVITIES OF THESE GOVERNMENTS. BY THIS MEANS, STATES OR LOCALITIES PARTICIPATING IN AN LEAA-ASSISTED LAW ENFORCEMENT PROJECT AVOIDED COMMITTING ANY NEW RESOURCES TO THE PROJECT. REQUIRING THESE GOVERNMENTAL UNITS TO MATCH AT LEAST A PORTION OF THEIR SHARES OF THE COST OF A PROJECT WITH MONEY APPROPRIATED FOR THAT PURPOSE WOULD THUS "WORK TO GUARANTEE THAT THESE NEW FEDERAL FUNDS WILL, IN FACT, DRAW NEW STATE AND LOCAL FUNDS INTO THE CRIMINAL JUSTICE SYSTEM AND AVOID THE REAL DANGER THAT FEDERAL FUNDS WILL MERELY REPLACE STATE AND LOCAL FUNDS." S. REPT. NO. 91-1253, 31(1970). IN ESSENCE THEN, THE CONGRESSIONAL PURPOSE FOR "HARD-MATCH" IS TO REGULATE THE CONDITIONS OF FINANCIAL PARTICIPATION BY STATE AND LOCAL GOVERNMENTS IN LEAA PROGRAMS; IT IS NOT, BY THE SAME TOKEN, TO LIMIT PARTICIPATION IN THOSE PROGRAMS BY PRIVATE ORGANIZATIONS. THERE IS SUPPORT IN THE LANGUAGE OF THE SENATE JUDICIARY COMMITTEE REPORT PREVIOUSLY CITED FOR THE CONCLUSION THAT THE "HARD-MATCH" REQUIREMENT WAS NOT INTENDED TO PREVENT THE USE IN LEAA-SPONSORED NATIONAL SCOPE PROJECTS OF MATCHING FUNDS SUPPLIED FROM PRIVATE SOURCES. THE SPECIFIC LANGUAGE IN THE REPORT READS:

*** AND AT LEAST ONE-HALF OF THE NON-FEDERAL FUNDING FOR ALL DISCRETIONARY PROGRAMS AND PROJECTS WOULD HAVE TO BE OF SPECIFICALLY APPROPRIATED MONEY, AS DISTINGUISHED FROM DONATED GOODS OR SERVICES. THE REQUIREMENT OF "APPROPRIATED," OF COURSE, HAS REFERENCE TO GOVERNMENTAL UNITS, NOT PRIVATE INDIVIDUALS OR ORGANIZATIONS. S. REPT. NO. 91-1253, 36.

TO READ THE "HARD-MATCH" REQUIREMENT SO AS TO PRECLUDE THE USE OF PRIVATE FUNDS FOR "HARD-MATCH" IN NATIONAL SCOPE PROJECTS WOULD THUS BE IN DEROGATION OF THE OVERALL PURPOSE OF THE ACT AND WOULD ALSO BE INCONSISTENT WITH THE SPECIFIC PURPOSE FOR WHICH THE "HARD-MATCH" REQUIREMENT WAS ADDED.

WE CONCLUDE THEREFORE THAT THE "HARD-MATCH" REQUIREMENT IS SATISFIED WHEN 40 PERCENT OF THE NON-FEDERAL FUNDING OF AN LEAA-SPONSORED PROJECT IS IN THE FORM OF MONEY RATHER THAN GOODS OR SERVICES, AND THAT THE SOURCE OF THE CASH MAY BE EITHER PRIVATE OR GOVERNMENTAL. AS WE INTERPRET THE "HARD -MATCH" REQUIREMENT, THE IMPORT OF SECTION 306(A) OF THE ACT, 42 U.S.C. 3736(A), IS ESSENTIALLY THAT 40 PERCENT OF NON FEDERAL FUNDING OF A PROGRAM OR PROJECT SHALL BE MONEY RATHER THAN PROPERTY OR SERVICES. THE FURTHER REQUIREMENT IN THE STATUTORY LANGUAGE THAT THE MONEY BE APPROPRIATED FOR THE PURPOSE OF THE SHARED FUNDING OF THE PROGRAM OR PROJECT, BY ITS TERMS, APPLIES ONLY WHEN THE NON-FEDERAL MONEY COMES FROM A STATE OR INDIVIDUAL UNIT OF GOVERNMENT. WHEN, ON THE OTHER HAND, "HARD- MATCH" IS TO BE PROVIDED IN THE FORM OF DONATED MONEY FROM A PRIVATE SOURCE, THE REQUIREMENT OF THE "HARD MATCH" PROVISION THAT NON-FEDERAL FUNDINGS BE APPROPRIATED BY GOVERNMENTAL UNITS FOR THE PURPOSE OF THE SHARED FUNDING OF THE PROGRAM IS INAPPLICABLE, SINCE THE GOAL OF THAT REQUIREMENT - TO INSURE THE COMMITMENT OF NEW FUNDS BY STATE AND LOCAL GOVERNMENTS - IS NOT RELEVANT WHEN PRIVATE FUNDS ARE THE SOURCE OF THE "HARD-MATCH." MATCHING FUNDS, WHETHER GOVERNMENTAL OR DONATED, MUST STILL OF COURSE SATISFY THE STATUTORY REQUIREMENT THAT AT LEAST 40 PERCENT THEREOF BE MONEY. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

YOUR SECOND QUESTION IS WHETHER FUNDS RECEIVED BY CITIES FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT UNDER TITLE I OF THE DEMONSTRATION CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966, APPROVED NOVEMBER 3, 1966, PUBLIC LAW 89-754, 80 STAT. 1255, 42 U.S.C. 3301 NOTE, MAY BE USED AS "HARD-MATCH" FOR LEAA PROJECTS.

YOU EXPLAIN THAT:

TO AID IN THE SOLUTION OF URBAN PROBLEMS, CONGRESS ESTABLISHED THE MODEL CITIES PROGRAM BY PASSING THE DEMONSTRATION CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966. THE PURPOSE OF THE ACT IS TO (SECTION 101) "PROVIDE ADDITIONAL FINANCIAL AND TECHNICAL ASSISTANCE TO ENABLE CITIES OF ALL SIZES ... TO PLAN, DEVELOP AND CARRY OUT LOCALLY PREPARED AND SCHEDULED COMPREHENSIVE CITY DEMONSTRATION PROJECTS CONTAINING NEW AND IMAGINATIVE PROPOSALS TO REBUILD OR REVITALIZE LARGE SLUM AND BLIGHTED AREAS ... TO REDUCE THE INCIDENCE OF CRIME AND DELINQUENCY ... AND TO ACCOMPLISH THESE OBJECTIVES THROUGH THE MOST EFFECTIVE AND ECONOMICAL CONCENTRATION AND COORDINATION OF FEDERAL, STATE, AND LOCAL PUBLIC AND PRIVATE EFFORTS TO IMPROVE THE QUALITY OF URBAN LIFE." IN ITS IMPLEMENTATION OF THIS ACT, CONGRESS PROVIDED A NOVEL FEATURE IN THE AUTHORITY OF LOCAL GOVERNMENT TO USE THESE FUNDS IN SECTION 105(D). STATES THAT THOSE FUNDS "MAY BE USED AND CREDITED AS PART OR ALL OF THE REQUIRED NON-FEDERAL CONTRIBUTION TO PROJECTS OR ACTIVITIES, ASSISTED UNDER A FEDERAL GRANT-IN-AID PROGRAM ... "

IN ITS SECTIONAL ANALYSIS OF THIS SECTION, THE HOUSE REPORT EXPLAINS THAT (1966 U.S. CODE, CONG. & ADMIN. NEWS, P. 4045) " ... SUCH FUNDS SHALL BE CREDITED TOWARD THE REQUIRED NON-FEDERAL CONTRIBUTION TO SUCH PROJECTS OR ACTIVITIES" AND TO PARTICIPATE IN THIS PROGRAM, THE CITY MUST SUBMIT A "COMPREHENSIVE CITY DEMONSTRATION PROGRAM" WHICH MUST MEET VARIOUS CRITERIA.***

PRIOR TO JULY 1, 1972, THE LAW ENFORCEMENT ASSISTANCE ADMINISTRATION FUNDS WERE MATCHED BY "MODEL CITIES" FUNDS IN PROGRAMS WHERE CO EXISTING RESPONSIBILITY OCCURRED. THE 1970 AMENDMENTS INCLUDED THE HARD MATCH REQUIREMENT IN SECTION 301(C). THIS SENTENCE IS EXACTLY THE SAME AS THAT IN 306 MENTIONED EARLIER, AND REQUIRES THAT "... AT LEAST 40 PER CENTUM OF THE NON-FEDERAL SHARE ... SHALL BE OF MONEY APPROPRIATED IN THE AGGREGATE, BY STATE OR INDIVIDUAL UNIT OF GOVERNMENT ... "***

YOUR ADMINISTRATION HAS "MADE AN INTERIM DECISION PENDING CLARIFICATION, THAT MODEL CITIES FUNDS MAY NOT BE USED AS LEAA HARD MATCH." THE SPECIFIC QUESTION PRESENTED IS THEREFORE WHETHER LEAA MAY, SUBSEQUENT TO JULY 1, 1972, CONTINUE TO FUND PROJECTS IN CONJUNCTION WITH CITIES UNDER SECTION 301 OF THE 1968 ACT, AS AMENDED, 42 U.S.C. 3725, WHEN SOME OR ALL OF THE LOCAL MATCHING FUNDS REQUIRED OF THESE CITIES BY SECTION 301(C) WOULD CONSIST OF MONEYS GRANTED TO THEM UNDER THE DEMONSTRATION CITIES ACT.

AS NOTED ABOVE, SECTION 105(D) OF THE DEMONSTRATION CITIES ACT, 42 U.S.C. 3305(D), EXPLICITLY ALLOWS FUNDS GRANTED THEREUNDER TO THE CITIES TO BE "USED AND CREDITED AS PART OR ALL OF THE REQUIRED NON FEDERAL CONTRIBUTION TO PROJECTS OR ACTIVITIES, ASSISTED UNDER A FEDERAL GRANT-IN-AID PROGRAM," SUBJECT TO CERTAIN QUALIFICATIONS WHICH APPARENTLY ARE NOT HERE RELEVANT. LEAA PROGRAMS UNDER SECTION 301(C), AS AMENDED, ARE FEDERAL GRANT-IN-AID PROGRAMS, AS THAT TERM IS DEFINED BY SECTION 112 OF THE DEMONSTRATION CITIES ACT 42 U.S.C. 3312. PRIOR TO JULY 1, 1972, THE EFFECTIVE DATE OF THE "HARD-MATCH" PROVISION, THERE WAS NO QUESTION BUT THAT MODEL CITIES FUNDS MIGHT BE USED BY CITIES TO MATCH LEAA GRANTS. SINCE JULY 1, 1972, HOWEVER, AT LEAST 40 PERCENT OF THE NON-FEDERAL SHARE OF THE FUNDING MUST BE "MONEY APPROPRIATED" FOR THE PURPOSE OF MATCHING THE GRANT. SINCE THAT DATE, WHETHER MODEL CITIES FUNDS CAN BE USED BY CITIES TO MATCH LEAA GRANTS DEPENDS ON A DETERMINATION WHETHER THE ALLOCATION OF MODEL CITIES FUNDS BY THE RECIPIENT CITIES AS MATCHING FUNDS FOR LEAA-ASSISTED PROJECTS CONSTITUTES AN "APPROPRIATION" OF SUCH FUNDS, WITHIN THE MEANING OF SECTION 301(C), AS AMENDED.

ENCLOSED WITH THE REQUEST FOR OUR DECISION ON THIS QUESTION WAS A LETTER OF OCTOBER 10, 1972, TO LEAA FROM THE ASSISTANT SECRETARY FOR COMMUNITY DEVELOPMENT OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) EXPLAINING THE NATURE OF THE MODEL CITIES PROGRAM AND THE BASIC FEATURES OF THE FUNDING PROCESS USED THEREIN. THAT LETTER READS, IN PERTINENT PART, AS FOLLOWS:

THE PRIMARY INTENT OF TITLE I OF THE DEMONSTRATION CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966(MODEL CITIES PROGRAM) IS TO BRING ABOUT A CONCENTRATION AND COORDINATION OF FEDERAL, STATE AND LOCAL PUBLIC AND PRIVATE EFFORTS AND RESOURCES IN A BROAD, COMPREHENSIVE ATTACK ON SOCIAL, ECONOMIC AND PHYSICAL PROBLEMS IN SELECTED SLUM AND BLIGHTED AREAS. THE IDEA IS TO DEMONSTRATE IN THESE RELATIVELY FEW (147) YET BROADLY REPRESENTATIVE CITIES HOW BLIGHTED NEIGHBORHOODS CAN BE RENEWED BOTH PHYSICALLY AND IN TERMS OF THE QUALITY OF LIFE, THROUGH A CONCENTRATION AND COORDINATION OF FEDERAL, STATE AND LOCAL EFFORTS AND RESOURCES.

THE STATUTE PROVIDES FOR FINANCIAL AND TECHNICAL ASSISTANCE TO BE PROVIDED BY HUD TO THE SELECTED CITIES TO ENABLE THOSE CITIES TO PLAN, DEVELOP AND CARRY OUT COMPREHENSIVE LOCAL PROGRAMS TO IMPROVE LOCALLY IDENTIFIED SOCIAL, ECONOMIC AND PHYSICAL DEFECTS IN THE COMMUNITY. SUCH PROGRAM COULD BE TRULY COMPREHENSIVE UNLESS IT ADDRESSED PROBLEMS RELATING TO CRIMINAL JUSTICE AND EACH OF THE MODEL CITIES COMPREHENSIVE CITY DEMONSTRATION PROGRAMS CONTAINS A COMPONENT DEALING WITH CRIMINAL JUSTICE.

THE FUNDING PHILOSOPHY OF THE STATUTE IS, BASICALLY, QUITE SIMPLE, YET IT IS AT THE SAME TIME UNIQUE. THE STATUTE DOES NOT INTEND FOR THE MODEL CITIES PROGRAM TO BE OR TO BECOME ANOTHER FEDERAL CATEGORICAL GRANT-IN-AID PROGRAM. THE IDEA IS, INSTEAD, TO USE IT AS A VEHICLE TO ENCOURAGE AND ASSIST THE SELECTED CITIES TO MAKE USE OF OTHER EXISTING FEDERAL, STATE AND LOCAL RESOURCES, BUT IN A MORE EFFICIENT AND EFFECTIVE MANNER.

THE PRINCIPAL SOURCE OF FEDERAL FUNDING CONTEMPLATED BY THE STATUTE IS NOT MODEL CITIES SUPPLEMENTAL FUNDS, BUT FEDERAL GRANT-IN-AID FUNDS FROM PROGRAMS OTHER THAN MODEL CITIES PROGRAM - SUCH AS LEAA. IT WAS RECOGNIZED THAT ONE REASON WHY LOCAL UNITS OF GOVERNMENT FAIL TO SEEK AND RECEIVE THE FULL BENEFITS OF SOME FEDERAL GRANT PROGRAMS IS THAT THEY CANNOT AFFORD TO PUT UP THE REQUIRED "MATCH" FOR THESE PROGRAMS IN EVERY INSTANCE.

CONGRESS RECOGNIZED THAT A MAJOR PURPOSE OF THE MODEL CITIES EXPERIMENT (I.E., MORE EFFECTIVE USE OF FEDERAL GRANT PROGRAMS BY CITIES) WAS LIKELY TO BE DEFEATED UNLESS THE PARTICIPATING CITIES WERE ABLE TO OBTAIN GRANTS FROM OTHER PROGRAMS SUCH AS LEAA. ACCORDINGLY, BOTH TO ENCOURAGE AND ASSIST THE CITIES IN THIS RESPECT, SECTION 105(D) OF THE STATUTE EXPRESSLY PROVIDES THAT MODEL CITIES SUPPLEMENTAL FUNDS CAN BE USED TO SUPPLY THE REQUIRED "MATCH" FOR OTHER FEDERAL GRANT-IN AID PROGRAMS.

EACH OF THE 147 MODEL CITIES RECEIVES AN ANNUAL BLOCK GRANT FROM HUD. THIS MONEY IS NOT EARMARKED BY HUD FOR ANY PARTICULAR PROJECTS OR PROGRAM AREAS. IT IS GRANTED TO THE CITIES TO ASSIST THEM IN CARRYING OUT THEIR OWN LOCALLY DEVISED COMPREHENSIVE CITY DEMONSTRATION PROGRAMS. THESE PROGRAMS CONSIST OF NUMEROUS PROJECTS IN ANY NUMBER OF PROGRAM AREAS, INCLUDING CRIMINAL JUSTICE.

*** OUT OF ITS BLOCK GRANT FROM HUD, EACH CITY DETERMINES FOR ITSELF HOW THE FUNDS SHALL BE ALLOCATED. THE GOVERNING BODY OF THE CITY (I.E., CITY COUNCIL) MUST TAKE FORMAL ACTION TO APPROVE THE CITY'S COMPREHENSIVE PROGRAM AND, WHERE APPROPRIATE, ANY APPLICATIONS FOR ASSISTANCE UNDER THE PROGRAM. THUS, IN THE CASE WHERE THE COMPREHENSIVE PROGRAM INCLUDES CRIMINAL JUSTICE PROJECTS TO BE FUNDED WITH LEAA FUNDS AND THE "MATCH" IS TO CONSIST IN WHOLE OR IN PART OF MODEL CITIES FUNDS, THESE MODEL CITIES FUNDS ARE APPROPRIATED BY THE CITY COUNCIL FOR THAT PURPOSE. THIS ACTION BY THE LOCAL GOVERNING BODY IS A REQUIREMENT OF SECTION 103(A)(4) OF OUR STATUTE.

UNDER THE FOREGOING CIRCUMSTANCES THE EXPRESS LANGUAGE OF SECTION 105(D) OF THE MODEL CITIES ACT, THAT MODEL CITIES FUNDS "MAY BE USED AND CREDITED AS PART OR ALL OF THE REQUIRED NON-FEDERAL CONTRIBUTION TO PROJECTS OR ACTIVITIES, ASSISTED UNDER A FEDERAL GRANT-IN-AID PROGRAM," IS, WE CONCLUDE, DISPOSITIVE OF YOUR QUESTION. ACCORDINGLY, MODEL CITIES FUNDS ALLOTTED BY THE GRANTEES THEREOF TO LEAA GRANT PROJECTS MAY BE CONSIDERED "MONEY APPROPRIATED" FOR THE PURPOSES OF THE "HARD MATCH" REQUIREMENT OF SECTION 301(C), AS AMENDED.

YOUR THIRD QUESTION IS WHETHER, WHEN STATE AND LOCAL UNITS OF GOVERNMENT RECEIVE LEAA FUNDS, AND IN TURN SUBGRANT THEM TO NON GOVERNMENTAL UNITS FOR LAW ENFORCEMENT PROJECTS, CASH CONTRIBUTED BY THE NON-GOVERNMENTAL UNITS MAY BE COUNTED AS "HARD-MATCH" FOR THESE PROJECTS.

YOU EXPLAIN THAT ACTION GRANTS TO THE STATES UNDER PART C OF TITLE I OF THE 1968 ACT, AS AMENDED:

*** MUST BE SPENT FOR PROGRAMS LISTED IN SECTION 301(B). GENERALLY, MOST OF THE FUNDS SPENT IN THIS MANNER GO TO LOCAL GOVERNMENTAL UNITS. (SECTION 303(2).) OF THE PORTION WHICH NEED NOT BE GRANTED TO LOCAL UNITS, AN OPTION EXISTS FOR THE STATE TO MAKE GRANTS TO PRIVATE ORGANIZATIONS. FOR PROGRAMS RELATED TO SECTION 301(B)(9), AND TO SOME EXTENT (3), THERE ARE NON-PROFIT NON-GOVERNMENTAL UNITS PROVIDING IMPORTANT PUBLIC SERVICES TO THE COMMUNITY (I.E., YMCA'S, CHURCH GROUPS, CHARITABLE FOUNDATIONS, AND OTHERS). SECTION 301(B)(9) READS AS FOLLOWS:

(9) THE DEVELOPMENT AND OPERATION OF COMMUNITY BASED DELINQUENT PREVENTION AND CORRECTIONAL PROGRAMS, EMPHASIZING HALFWAY HOUSES AND OTHER COMMUNITY BASED REHABILITATION CENTERS FOR INITIAL PRECONVICTION OR POST- CONVICTION REFERRAL OF OFFENDERS; EXPANDED PROBATIONARY PROGRAMS, INCLUDING PARAPROFESSIONAL AND VOLUNTEER PARTICIPATION; AND COMMUNITY SERVICE CENTERS FOR THE GUIDANCE AND SUPERVISION OF POTENTIAL REPEAT YOUTHFUL OFFENDERS.

IN THIS AREA, LEAA FUNDS ARE SUBGRANTED, BY THE STATE, TO THE NON GOVERNMENTAL UNITS, FOR IMPROVING AND EXPANDING THE SERVICES THAT THEY OFFER. THESE NON-PROFIT GROUPS HAVE SOME CASH AVAILABLE FOR THE PROJECTS THAT THEY ARE INVOLVED IN. THE CONGRESSIONAL REPORTS EXPLAINED 301(B)(9) AS FOLLOWS, SENATE REPORT 91-1253, PAGE 30: "THE COMMITTEE HAS ADDED A NEW SUBPARAGRAPH (9) TO SECTION 301(B) AUTHORIZING THE USE OF PART C FUNDS FOR THE DEVELOPMENT OF COMMUNITY BASED DELINQUENCY PREVENTION AND CORRECTIONAL PROGRAMS AS AN ALTERNATIVE TO INSTITUTIONAL CONFINEMENT. THE FUNDING OF SUCH PROGRAMS UNDER THE PRESENT LAW IS PERMISSIBLE, BUT IT IS HOPED THAT EXPRESS AUTHORITY WILL PROVIDE AN INCENTIVE FOR THE STATES AND CITIES TO DEVELOP AND FUND SUCH PROGRAMS." NOTHING MORE WAS SAID OF THE PROVISION. GRANTS UNDER SECTION 301(B)(9) OF THE 1968 ACT, AS AMENDED, 42 U.S.C. 3731(B)(9), ARE GOVERNED BY THE "HARD-MATCH" REQUIREMENT INCORPORATED IN SECTION 301(C), 42 U.S.C. 3731(C). AS INDICATED ABOVE, THAT REQUIREMENT WAS ENACTED CONCURRENTLY WITH, IN WORDS IDENTICAL TO, AND FOR THE SAME PURPOSES AS, THE "HARD-MATCH" REQUIREMENT OF SECTION 306 OF THE ACT, 42 U.S.C. 3736, AND IS THEREFORE TO BE INTERPRETED IN THE SAME WAY AS SECTION 306. OUR EXPLANATION ABOVE OF THE MEANING OF THE "HARD-MATCH" REQUIREMENT OF SECTION 306 WITH RESPECT TO DISCRETIONARY GRANTS IS CONSEQUENTLY DISPOSITIVE OF THE QUESTION NOW RAISED CONCERNING THE MEANING OF THE "HARD -MATCH" REQUIREMENT OF SECTION 301(C) WITH RESPECT TO BLOCK GRANTS. THAT IS TO SAY, THE "HARD-MATCH" REQUIREMENT OF SECTION 301 IS MET WHEN AT LEAST 40 PERCENT OF THE COST OF THE NON-FEDERAL SHARE THEREOF IS IN MONEY, WHETHER FROM PRIVATE OR PUBLIC SOURCES.

IN REACHING THIS CONCLUSION, WE FIND IT PARTICULARLY PERSUASIVE THAT, AS YOU POINT OUT, IF THE "HARD-MATCH" REQUIREMENT WERE INTERPRETED SO NARROWLY THAT ONLY GOVERNMENTALLY APPROPRIATED FUNDS COULD SATISFY IT, THE REQUIREMENT COULD BE MET BY PRIVATE DONORS DONATING FUNDS TO A GOVERNMENTAL UNIT WHICH COULD THEN APPROPRIATE THOSE SAME FUNDS FOR THE PROJECT. WE DO NOT BELIEVE THAT CONGRESS INTENDED THAT THE "HARD MATCH" REQUIREMENT BE MET BY SUCH A CUMBERSOME PROCEDURE AND OUR HOLDING HEREIN AVOIDS THE NEED TO RESORT TO SUCH PROCEDURE.

FINALLY, YOU ASK WHETHER FUNDS APPROPRIATED BY THE CONGRESS FOR EXPENSES NECESSARY FOR THE ADMINISTRATION OF THE TERRITORY OF AMERICAN SAMOA CAN BE USED BY THAT TERRITORY TO MEET THE "HARD-MATCH" REQUIREMENTS OF THE 1970 ACT.

YOU EXPLAIN THAT:

THE ADMINISTRATION IS AUTHORIZED TO FUND LAW ENFORCEMENT PROJECTS IN TERRITORIES BY THE DEFINITION OF STATES IN SECTION 601(C). WE ARE CURRENTLY FUNDING PROJECTS IN PUERTO RICO, GUAM, VIRGIN ISLANDS AND AMERICAN SAMOA. BECAUSE OF THE UNIQUE CHARACTER OF FUNDING STRUCTURES THE PROBLEM OF USING FEDERAL TERRITORIAL FUNDS AS HARD MATCH HAS PRESENTED A PROBLEM ONLY IN AMERICAN SAMOA.

THE STATUTORY AUTHORITY GOVERNING AMERICAN SAMOA IS 48 U.S.C. 1661. SUBJECT TO THIS AUTHORITY, THE SECRETARY OF INTERIOR IS RESPONSIBLE FOR THE ADMINISTRATION OF THE TERRITORY. THE CURRENT APPROPRIATION FOR THE TERRITORY IS FOUND IN P.L. 92-369, 1972 U.S. CODE, CONG. AND ADMIN. NEWS, P. 3303. THIS LAW APPROPRIATES FUNDS "FOR EXPENSES NECESSARY FOR THE ADMINISTRATION OF TERRITORIES ... INCLUDING EXPENSES OF THE OFFICE OF THE GOVERNOR OF AMERICAN SAMOA ... COMPENSATION AND EXPENSES OF THE JUDICIARY IN AMERICAN SAMOA AS AUTHORIZED BY LAW (48 U.S.C. 1661(C)); AND GRANTS TO AMERICAN SAMOA, IN ADDITION TO LOCAL REVENUES FOR SUPPORT OF LOCAL GOVERNMENTAL FUNCTIONS ... " THE SECRETARY OF INTERIOR PROMULGATED REGULATIONS WHICH DESCRIBE THE OPERATION OF THE TERRITORY. THESE REGULATIONS ARE FOUND IN DEPARTMENT OF INTERIOR MANUAL 575 DM 1 3, DATED OCTOBER 8, 1971. THIS MANUAL DESCRIBES THE TERRITORIAL PROCEDURE AS FOLLOWS, 575 DM 1-3.3A: "THE LEGISLATURE HAS APPROPRIATION AUTHORITY WITH RESPECT TO LOCAL REVENUES AND AUTHORITY TO REVIEW AND MAKE RECOMMENDATIONS WITH RESPECT TO THE BUDGET SUBMITTED TO THE UNITED STATES CONGRESS FOR GRANT FUNDS." AS INDICATED ABOVE, FUNDS APPROPRIATED TO THE DEPARTMENT OF THE INTERIOR TO BE GRANTED BY THAT DEPARTMENT TO AMERICAN SAMOA ARE TO BE USED BY THE GOVERNMENT OF AMERICAN SAMOA FOR SUPPORT OF LOCAL GOVERNMENTAL FUNCTIONS AS A SUPPLEMENT TO LOCAL REVENUES. UNDER THE CIRCUMSTANCES THESE GRANTS MAY BE CONSIDERED UNCONDITIONAL GRANTS AND WHEN PAID OVER TO AMERICAN SAMOA AND COMMINGLED WITH LOCAL REVENUES LOSE THEIR CHARACTER AS FEDERAL FUNDS. SEE B-131569, JUNE 11, 1957, AND B-173589, SEPTEMBER 30, 1971. SUCH FUNDS MAY THEREFORE BE USED BY THE TERRITORIAL GOVERNMENT TO PROVIDE "HARD-MATCH" FOR LEAA GRANTS, SINCE IMPROVEMENT OF LAW ENFORCEMENT IS UNQUESTIONABLY A "LOCAL GOVERNMENT FUNCTION."