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B-199491.OM, JAN 9, 1981

B-199491.OM Jan 09, 1981
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WE ARE NOW IN THE FINAL PHASE OF OUR REVIEW AND NEED A LEGAL OPINION TO ASSIST US IN FINALIZING OUR WORK IN THIS AREA. THE ISSUES WE WOULD LIKE TO HAVE ADDRESSED CONCERN THE ADMINISTRATION ON AGING (AOA) WHICH WAS CREATED BY THE OLDER AMERICANS ACT OF 1965. AOA IS A PRINCIPAL OPERATING COMPONENT IN THE OFFICE OF HUMAN DEVELOPMENT SERVICES. ALL FINANCIAL RESPONSIBILITIES IN EACH HDS REGION IS CONSOLIDATED IN A NEW OFFICE OF FISCAL OPERATIONS UNDER THE REGIONAL ADMINISTRATOR. PROGRAM ADMINISTRATIONS ARE TO RETAIN POLICY CONTROL AND ALLOCATION AUTHORITY OVER THEIR FORMULA GRANT ACTIVITIES. THE NEW OFFICE WILL PLAN AND DIRECT FISCAL MONITORING OF THE GRANTEES. THE GENERAL COUNSEL CONCLUDED THAT THE CONSOLIDATION AS DESCRIBED WOULD NOT VIOLATE THE PROHIBITION AND POINTED OUT THAT THE LEGISLATIVE HISTORY INDICATES THAT SECTION 201(A) WAS INTENDED TO PREVENT FRAGMENTATION OF POLICY AND DECISIONMAKING AUTHORITY IN THE ADMINISTRATION OF PROGRAMS UNDER THE ACT (SEE ATTACHMENT II).

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B-199491.OM, JAN 9, 1981

SUBJECT: REQUEST FOR A LEGAL OPINION RELATIVE TO OUR REVIEW OF THE ORGANIZATIONAL STRUCTURE OF THE OFFICE OF HUMAN DEVELOPMENT SERVICES (HDS) (CODE 961123)

GENERAL COUNSEL:

IN JULY 1980, WE REQUESTED A LEGAL OPINION RELATIVE TO THE SUBJECT ASSIGNMENT TO AID US IN DIRECTING OUR WORK (SEE ATTACHMENT I). WE ARE NOW IN THE FINAL PHASE OF OUR REVIEW AND NEED A LEGAL OPINION TO ASSIST US IN FINALIZING OUR WORK IN THIS AREA. THE ISSUES WE WOULD LIKE TO HAVE ADDRESSED CONCERN THE ADMINISTRATION ON AGING (AOA) WHICH WAS CREATED BY THE OLDER AMERICANS ACT OF 1965. AOA IS A PRINCIPAL OPERATING COMPONENT IN THE OFFICE OF HUMAN DEVELOPMENT SERVICES, (HDS) IN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, (HHS) FORMERLY THE DEPARTMENT OF HEALTH, EDUCATION AND WELFARE.

AS A RESULT OF A 1980 REORGANIZATION, ALL FINANCIAL RESPONSIBILITIES IN EACH HDS REGION IS CONSOLIDATED IN A NEW OFFICE OF FISCAL OPERATIONS UNDER THE REGIONAL ADMINISTRATOR. PROGRAM ADMINISTRATIONS ARE TO RETAIN POLICY CONTROL AND ALLOCATION AUTHORITY OVER THEIR FORMULA GRANT ACTIVITIES, THE NEW OFFICE WILL PLAN AND DIRECT FISCAL MONITORING OF THE GRANTEES. ACCORDING TO THE ASSISTANT SECRETARY, HDS, THE REGIONAL OFFICE OF FISCAL OPERATIONS ROLE WOULD BE ONLY ADVISORY, AND ALL DECISIONMAKING AUTHORITY WITH RESPECT TO OLDER AMERICANS ACT GRANTS WOULD REMAIN VESTED IN THE COMMISSIONER OR THOSE DIRECTLY RESPONSIBLE TO HIM.

IN PROPOSING THE ABOVE, THE ASSISTANT SECRETARY, HDS, REQUESTED THE HHS' OFFICE OF THE GENERAL COUNSEL VIEWS ON WHETHER THIS CONSOLIDATION OF THE FINANCIAL MANAGEMENT RESPONSIBILITY WOULD VIOLATE THE PROHIBITION CONTAINED IN SECTION 201(A) OF THE OLDER AMERICANS ACT. THE GENERAL COUNSEL CONCLUDED THAT THE CONSOLIDATION AS DESCRIBED WOULD NOT VIOLATE THE PROHIBITION AND POINTED OUT THAT THE LEGISLATIVE HISTORY INDICATES THAT SECTION 201(A) WAS INTENDED TO PREVENT FRAGMENTATION OF POLICY AND DECISIONMAKING AUTHORITY IN THE ADMINISTRATION OF PROGRAMS UNDER THE ACT (SEE ATTACHMENT II).

A CONFLICTING LEGAL OPINION BY THE AMERICAN LAW DIVISION, CONGRESSIONAL RESEARCH SERVICE, STATES THAT THE STATUTORY PROVISION IN SECTION 201(A) APPEARS TO BE A CLEAR AND UNAMBIGUOUS PROHIBITION AGAINST THE SECRETARY'S APPROVING THE DELEGATION OF ANY FUNCTIONS, POLICYMAKING OR NONPOLICY MAKING, FROM THE COMMISSIONER TO ANY OTHER OFFICER NOT DIRECTLY RESPONSIBLE TO THE COMMISSIONER.

ALSO, AOA HAS RAISED OTHER CONCERNS IN REGARD TO SECTION 201(A) AND THESE ARE INCLUDED AS ATTACHMENTS IV AND V. WE WOULD LIKE TO HAVE YOUR OPINION ON THE FOLLOWING:

1. IS THE CONSOLIDATION OF AOA'S FINANCIAL RESPONSIBILITY FOR ITS FORMULA GRANTS WITH ALL OTHER HDS FINANCIAL RESPONSIBILITY, IN VIOLATION OF SECTION 201(A) OF THE OLDER AMERICANS ACT?

2. DO YOU AGREE WITH HHS' OPINION THAT AOA'S ROUTINE ADMINISTRATIVE FUNCTIONS CAN BE CENTRALIZED IN HDS AND WOULD NOT VIOLATE SECTION 201(A)?

3. ATTACHMENT IV IS A MEMORANDUM FROM HHS' GENERAL COUNSEL TO THE ASSISTANT SECRETARY HDS ON DELEGATIONS OF AUTHORITY TO RESOLVE AUDIT FINDINGS. WHAT IS YOUR VIEWPOINT AS TO THE LEGAL INTERPRETATION PRESENTED IN THIS DOCUMENT?

4. ATTACHMENT V IS A MEMORANDUM DATED JULY 28, 1980, FROM THE COMMISSIONER ON AGING TO THE ASSISTANT SECRETARY, HDS ON DISCRETIONARY GRANT AND CONTRACT AUTHORITIES. IN THIS MEMORANDUM THE COMMISSIONER DISAGREES WITH A POSITION BY THE ASSISTANT SECRETARY CONCERNING GRANTS POLICY. NO FORMAL REPLY WAS MADE TO THE COMMISSIONER'S MEMORANDUM AND IT APPEARS THAT THE MEMORANDUM WAS WITHDRAWN BASED ON AN INFORMAL AGREEMENT THAT A REPLY WAS NOT NECESSARY. WHAT IS YOUR OPINION ON THE ASSERTIONS MADE IN THE COMMISSIONER'S MEMORANDUM?

WE ANTICIPATE COMPLETION OF AUDIT WORK ABOUT DECEMBER 5, 1980. ACCORDINGLY, WE WOULD LIKE TO HAVE THE LEGAL OPINION BY THIS SAME DATE. FOR FURTHER INFORMATION, PLEASE CONTACT VINCENT DICARLO, TEAM DIRECTOR, OR JANE TRAHAN, TEAM LEADER, ON 275-5907.

INDORSEMENT

DIRECTOR, FPCD

RETURNED. THIS RESPONDS TO YOUR REQUEST FOR A LEGAL OPINION ON THE ORGANIZATIONAL RELATIONSHIP OF THE ADMINISTRATION ON AGING (AOA) AND THE OFFICE OF HUMAN DEVELOPMENT SERVICES (OHDS) WITHIN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS). IN OUR AUGUST 14, 1980, MEMORANDUM, B-199491-O.M., WE ANSWERED CERTAIN GENERAL QUESTIONS CONCERNING THIS ISSUE. YOU HAVE NOW POSED SOME MORE DETAILED QUESTIONS WHICH WE HAVE ANSWERED BELOW:

QUESTION #1: DOES THE CONSOLIDATION OF AOA'S FINANCIAL RESPONSIBILITY FOR ITS FORMULA GRANTS WITH ALL OTHER HDS FINANCIAL RESPONSIBILITY VIOLATE THE NON-DELEGATION PROVISIONS OF 42 U.S.C. SEC. 3011(A) (SECTION 201(A) OF THE OLDER AMERICANS ACT)?

ANSWER: YES. THE CONSOLIDATION OF FINANCIAL MANAGEMENT RESPONSIBILITIES WAS DESCRIBED IN AN APRIL 25, 1980, MEMORANDUM FROM THE ASSISTANT SECRETARY FOR HUMAN DEVELOPMENT SERVICES TO THE SECRETARY OF THE DEPARTMENT AS FOLLOWS:

"ALL FINANCIAL MANAGEMENT RESPONSIBILITIES IN EACH REGION WOULD BE CONSOLIDATED IN A NEW OFFICE OF FISCAL OPERATIONS (OFO) UNDER THE REGIONAL ADMINISTRATOR (RA). PROGRAM ADMINISTRATIONS WOULD RETAIN POLICY CONTROL AND ALLOCATION AUTHORITY OVER THEIR FORMULA GRANT ACTIVITIES, BUT THE OFO WOULD PLAN AND DIRECT FISCAL MONITORING OF THE GRANTEES. THIS IS THE WAY DISCRETIONARY GRANTS AND CONTRACTS ARE HANDLED NOW. CURRENT FINANCIAL MANAGEMENT STAFFS OF APS AND AOA WOULD BE TRANSFERRED WITH THEIR FUNCTIONS TO THE OFO, AND NO NEW FINANCIAL MANAGEMENT POSITIONS WOULD BE APPROVED FOR ANY OF THE CATEGORICAL PROGRAM UNITS IN THE FIELD."

THE RESTRICTION ON THE DELEGATION OF THE COMMISSIONER'S FUNCTIONS IS CONTAINED IN 42 U.S.C. SEC. 3011(A) AS FOLLOWS:

"THE SECRETARY SHALL NOT APPROVE ANY DELEGATION OF THE FUNCTIONS OF THE COMMISSIONER TO ANY OTHER OFFICER NOT DIRECTLY RESPONSIBLE TO THE COMMISSIONER."

AS WE STATED IN OUR EARLIER MEMORANDUM, DELEGATION OF FUNCTIONS OF THE COMMISSIONER TO OHDS OFFICIALS NOT DIRECTLY RESPONSIBLE TO THE COMMISSIONER WOULD VIOLATE THIS RESTRICTION.

THE HHS LEGAL STAFF HAS A CONTRARY OPINION AND HAS CONSTRUED THE RESTRICTION IN 42 U.S.C. SEC. 3011(A) AS PROHIBITING ONLY THE DELEGATION OF POLICYMAKING FUNCTIONS. UNDER THE HHS INTERPRETATION THE SECRETARY HAS AUTHORITY TO APPROVE THE DELEGATION OF ANY NONPOLICY MAKING FUNCTION OF THE COMMISSIONER TO OFFICERS WHO ARE NOT RESPONSIBLE TO THE COMMISSIONER.

THE LEGAL STAFF BASES ITS INTERPRETATION ON THE LEGISLATIVE HISTORY OF A COMPARABLE PROHIBITION IN 29 U.S.C. SEC. 702(A) AGAINST THE DELEGATION OF FUNCTIONS FROM THE COMMISSIONER OF REHABILITATION SERVICES. THE REHABILITATION ACT AMENDMENTS OF 1974 (PUBLIC LAW NO. 93 516, DEC. 7, 1974, 88 STAT. 1617) CONTAINED THE RESTRICTION, WHICH STATED: "*** THE FUNCTIONS OF THE COMMISSIONER OF REHABILITATION SERVICES SHALL NOT BE DELEGATED TO ANY OFFICER NOT DIRECTLY RESPONSIBLE, BOTH WITH RESPECT TO PROGRAM OPERATION AND ADMINISTRATION, TO THE COMMISSIONER." THE LEGISLATIVE HISTORY OF THIS PROVISION (IN S. REP. NO. 93-1297, 93RD CONG., 2D SESS. 32) INDICATES THAT THE PROHIBITION IS NOT INTENDED TO PREVENT "*** THE CENTRALIZED ADMINISTRATION OF CERTAIN ROUTINE ADMINISTRATIVE SERVICES BY THE DEPARTMENT *** IN SUPPORT OF RSA FUNCTIONS AND PROGRAMS IN THE CATEGORIES OF BUDGET FORMULATION, GRANT ADMINISTRATION, FINANCIAL ADMINISTRATION AND PERSONNEL ADMINISTRATION."

THE DEPARTMENT HAS APPLIED THIS LEGISLATIVE HISTORY TO SUPPORT ITS INTERPRETATION OF THE RESTRICTION AGAINST DELEGATION OF THE FUNCTIONS OF THE COMMISSIONER ON AGING CONTAINED IN 42 U.S.C. SEC. 3011(A), A STATUTE THAT IS UNRELATED TO THAT LEGISLATIVE HISTORY. THE BEST EVIDENCE OF CONGRESSIONAL INTENT REGARDING 42 U.S.C. 3011(A) CAN BE FOUND IN THE LANGUAGE OF THAT STATUTE AND ITS LEGISLATIVE HISTORY AND NOT IN THE LEGISLATIVE HISTORY OF UNRELATED STATUTES.

THE STARTING POINT IN EVERY CASE INVOLVING CONSTRUCTION OF A STATUTE IS THE LANGUAGE OF THE STATUTE ITSELF. GREYHOUND CORP. V. MT. HOOD STAGES, INC., 437 U. S. 322 (1978). WHERE A STATUTE PLAINLY EXPRESSES THE WILL OF CONGRESS IN LANGUAGE THAT MAY NOT BE EXTENDED OR DISTORTED BEYOND THEIR PLAIN POPULAR MEANING. ADAMS V. MORTON, 581 F.2D 1314 (1978). SECTION 3011(A) CLEARLY STATES THAT THE RESTRICTION IS AGAINST ANY DELEGATION OF THE FUNCTIONS OF THE COMMISSIONER ON AGING. THIS IS SIGNIFICANT INASMUCH AS THE RESTRICTION IN 29 U.S.C. SEC. 702(A) STATES INSTEAD THAT "THE FUNCTIONS OF THE COMMISSIONER OF REHABILITATION SERVICES SHALL NOT BE DELEGATED *** BOTH WITH RESPECT TO PROGRAM OPERATION AND ADMINISTRATION ***." UNLIKE SECTION 3011(A), WHICH EXPLICITLY PROHIBITS ANY DELEGATION OF FUNCTIONS, SECTION 702(A) SAYS THAT NOT ALL DELEGATIONS OF FUNCTIONS ARE PROHIBITED. ACCORDINGLY, THE WORD "ANY" IN SECTION 3011(A) SHOULD BE READ AS PROHIBITING ALL DELEGATIONS OF FUNCTIONS.

MOREOVER, THE LEGISLATIVE HISTORY OF SECTION 3011(A) CONFIRMS THAT CONGRESS INTENDED THAT NONE OF THE FUNCTIONS OF THE COMMISSIONER ON AGING SHOULD BE DELEGATED TO OFFICERS OUTSIDE HIS CONTROL REGARDLESS OF WHETHER SUCH FUNCTIONS INVOLVED POLICYMAKING RESPONSIBILITIES. THIS VIEW IS SUPPORTED BY SENATE REPORT NO. 932, 93RD CONG., 2D SESS. 8, WHICH ACCOMPANIED H. R. 11105, A BILL WHICH WAS THE DERIVATIVE SOURCE OF PUBLIC LAW 93-351 (JULY 12, 1974, 88 STAT. 357) WHICH AMENDED THE OLDER AMERICANS ACT OF 1965.

PRIOR TO THIS AMENDMENT, SECTION 3011(A) HAD AUTHORIZED THE SECRETARY OF THE DEPARTMENT TO PERMIT THE DELEGATION OF THE COMMISSIONER'S FUNCTIONS TO OFFICIALS NOT DIRECTLY RESPONSIBLE TO THE COMMISSIONER SO LONG AS THE SECRETARY SUBMITTED A PLAN TO CONGRESS FOR SUCH DELEGATION AND CONSULTED WITH THE APPROPRIATE COMMITTEES. SECTION 2 OF PUBLIC LAW 93-351 AMENDED 42 U.S.C. SEC. 3011(A) BY DELETING THIS PROCEDURE FOR THE DELEGATION OF THE COMMISSIONER'S FUNCTIONS.

THE SENATE REPORT NOTED THAT THE SECRETARY HAD BEEN ATTEMPTING TO IMPLEMENT A PLAN FOR DELEGATING CERTAIN OF THE COMMISSIONER'S FUNCTIONS TO THE DEPARTMENT'S REGIONAL DIRECTORS IN 10 REGIONS THROUGHOUT THE COUNTRY. IN ORDER TO PRECLUDE SUCH DELEGATION, THE SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE PROPOSED THIS AMENDMENT OF SECTION 3011(A). THE REPORT STATED THAT IF THE SECRETARY'S PLANNED DELEGATION TO REGIONAL DIRECTORS "*** SHOULD BE IN EFFECT WHEN THIS BILL IS ENACTED, THE COMMITTEE AMENDMENT WOULD REQUIRE THE COMMISSIONER TO MODIFY THE DELEGATION SO THAT NONE OF HIS FUNCTIONS ARE DELEGATED EXCEPT TO OFFICERS DIRECTLY RESPONSIBLE TO HIM."

IN THIS CONNECTION THE REPORT READS AS FOLLOWS:

"BY AFFIRMING THE STATUS OF THE COMMISSIONER AS THE OFFICIAL RESPONSIBLE FOR CARRYING OUT PROGRAMS AUTHORIZED BY THE ACT, AND BY SEEKING TO ENHANCE THE STATUS OF THE ADMINISTRATION ON AGING WITH HEW, THE CONGRESS INTENDED TO REMEDY THE FRAGMENTATION AND LACK OF CENTRALIZED PURPOSE THAT WAS THE CASE PRIOR TO 1973. IT WAS EXPECTED THAT OUT OF THIS WOULD EMERGE A NATIONAL POLICY FOR COORDINATING THE DELIVERY OF SERVICES TO THE ELDERLY, WITH RESPONSIBILITY FOR IMPLEMENTATION OF THIS POLICY TO BE CLEARLY LODGED IN AN OFFICIAL ANSWERABLE TO CONGRESS.

"THE PROPOSED DELEGATION TO HEW REGIONAL DIRECTORS RUNS DIRECTLY DIRECTLY CONTRARY TO THESE GOALS OF THE 1976 LEGISLATION.

WOULD AGAIN FRAGMENT RESPONSIBILITY." THIS STATEMENT CLEARLY SHOWS THAT CONGRESS INTENDED TO ESTABLISH AN ABSOLUTE BAN ON THE DELEGATION OF THE COMMISSIONER'S FUNCTIONS TO OFFICIALS OUTSIDE HIS CONTROL.

THE FLOOR DEBATE ON THIS PROVISION IS ALSO INSTRUCTIVE. SENATOR BEALL, WHO WAS OPPOSED TO THE AMENDMENT, ARGUED AS FOLLOWS:

"*** WE ARE NOT TALKING ABOUT DELEGATING AUTHORITY FOR MAKING POLICY. THE POLICYMAKING DECISIONS AND AUTHORITY FOR ESTABLISHING REGULATIONS WILL ALWAYS REMAIN WITH THE COMMISSIONER HERE IN WASHINGTON. WHAT WE ARE TALKING ABOUT IS THE FLEXIBILITY THAT THE COMMISSIONER SHOULD HAVE IN DELEGATING THE ADMINISTRATIVE RESPONSIBILITY TO PEOPLE AT THE REGIONAL LEVEL WHO ARE CONSTANTLY IN CONTACT WITH THE GOVERNORS OF THE VARIOUS STATES AND THE MAYORS OF THE VARIOUS CITIES WHERE THESE PROGRAMS ARE PLACED." 120 CONG. REC. 20003 (1974).

SENATOR BEALL THUS INDICATES THAT IF THE THEN EXISTING DELEGATION AUTHORITY WERE TO BE REPEALED, THE DELEGATION OF NON-POLICYMAKING FUNCTIONS OF THE COMMISSIONER TO OFFICIALS OUTSIDE OF HIS CONTROL WOULD BE PROHIBITED. THIS IS ADDITIONAL EVIDENCE THAT, BY THE SUBSEQUENT REPEAL OF THAT AUTHORITY BY PUBLIC LAW 93-351, CONGRESS INTENDED TO PROHIBIT THE DELEGATION OF NON-POLICYMAKING FUNCTIONS AS WELL AS POLICYMAKING FUNCTIONS.

QUESTION #2: DO YOU AGREE WITH THE HHS OPINION THAT AOA'S ROUTINE ADMINISTRATIVE FUNCTIONS CAN BE CENTRALIZED IN HDS WITHOUT VIOLATING 42 U.S.C. SEC. 3011(A)?

ANSWER: AS WE INDICATED IN OUR ANSWER TO QUESTION #1, 42 U.S.C. SEC. 3011(A) MUST BE CONSTRUED AS PROHIBITING THE SECRETARY FROM APPROVING ANY DELEGATION OF THE COMMISSIONER'S FUNCTIONS TO OFFICIALS OUTSIDE HIS CONTROL REGARDLESS OF WHETHER SUCH FUNCTIONS ARE POLICYMAKING OR NON- POLICYMAKING. IT IS POSSIBLE THAT A SYSTEM COULD BE DEVISED THAT WOULD PERMIT THE AOA TO USE THE FISCAL MONITORING CAPABILITIES OF THE OFFICE OF FISCAL OPERATIONS WITHOUT RELINQUISHING THE CONTROL REQUIRED BY 42 U.S.C. SEC. 3011(A). HOWEVER, A NEBULOUS POLICY - NON-POLICY DISTINCTION SUCH AS THAT DISCUSSED IN THE HHS LEGAL MEMORANDUM, WITH NO APPARENT CONTROL BY AOA OVER "NON-POLICY" MATTERS, DOES NOT IN OUR VIEW COMPLY WITH THE CLEAR MANDATE OF SEC. 3011(A). QUESTION #3: ATTACHMENT IV IS A MEMORANDUM FROM HHS' GENERAL COUNSEL TO THE ASSISTANT SECRETARY, HDS, ON DELEGATIONS OF AUTHORITY TO RESOLVE AUDIT FINDINGS. WHAT IS YOUR VIEWPOINT AS TO THE LEGAL INTERPRETATION PRESENTED IN THIS DOCUMENT? ANSWER: WE AGREE WITH THE HHS GENERAL COUNSEL'S ANALYSIS AND CONCLUSIONS THAT THE SECRETARY OF HHS, BY HER MAY 2, 1980 MEMORANDUM ON RESOLUTION OF AUDIT FINDINGS, DID NOT VIOLATE THE RESTRICTION IN 42 U.S.C. SEC. 3011(A) CONCERNING THE DELEGATION OF THE AOA COMMISSIONER'S FUNCTIONS.

THE SECRETARY'S MEMORANDUM DIRECTED THAT CERTAIN IMPROVEMENTS BE MADE IN HHS PROCEDURES FOR RESOLVING AUDIT FINDINGS. UNDER THE NEW DIRECTIVE, PROPOSED RESOLUTIONS OF AUDIT EXCEPTIONS THAT EXCEEDED $100,000 AND WERE LESS THAN 85 PER CENT OF THE AUDITOR'S RECOMMENDED DISALLOWANCE WERE REQUIRED TO BE APPROVED BY THE HEADS OF PRINCIPAL OPERATING COMPONENTS, SUCH AS THE ASSISTANT SECRETARY, HDS, OR THEIR FIRST LINE DEPUTIES FOR OPERATIONS. AUTHORITY TO APPROVE PROPOSED RESOLUTIONS OF AUDIT EXCEPTIONS OF LESSER AMOUNTS (OR OF AMOUNTS OVER $100,000 WHICH ARE 85 PER CENT OR MORE OF THE RECOMMENDED DISALLOWANCE) COULD BE DELEGATED TO PROGRAM MANAGERS.

THE COMMISSIONER, AOA, QUESTIONED WHETHER THE SECRETARY'S DIRECTIVE VIOLATED THE PROVISIONS OF THE OLDER AMERICANS ACT, 42 U.S.C. SEC. 3011 ET SEQ., THAT AUTHORIZE THE COMMISSIONER, AOA, TO ADMINISTER THE PROGRAM AND RESTRICT THE DELEGATION OF HIS AUTHORITY.

THE GENERAL COUNSEL, HHS, RESPONDED THAT THE SECRETARY'S MEMORANDUM NEITHER IMPINGED ON THE STATUTORY AUTHORITY OF THE COMMISSIONER NOR RELIEVED HIM OF ANY OF HIS ADMINISTRATIVE OR PROGRAM RESPONSIBILITIES. THE GENERAL COUNSEL JUSTIFIED THESE CONCLUSIONS AS FOLLOWS:

"WE HAVE CONCLUDED THAT THE SECRETARY'S INSTRUCTIONS DO NOT REQUIRE A DELEGATION OF ANY AUTHORITY OF THE COMMISSIONER AND, THEREFORE, ARE NOT AFFECTED BY SECTION 201(A) OF THE OLDER AMERICANS ACT. THOSE INSTRUCTIONS MERELY REQUIRE APPROVAL BY, IN THIS CASE, THE ASSISTANT SECRETARY FOR HUMAN DEVELOPMENT SERVICES OF A PROPOSED ACTION BY THE COMMISSIONER. THIS ARRANGEMENT IS CONSISTENT WITH THE INSTRUCTION IN SECTION 201(A) THAT 'IN THE PERFORMANCE OF HIS FUNCTION, THE COMMISSIONER SHALL BE DIRECTLY RESPONSIBLE TO THE OFFICE OF THE SECRETARY.' THE ASSISTANT SECRETARY FOR HUMAN DEVELOPMENT SERVICES IS IN THE OFFICE OF THE SECRETARY AND IS THE OFFICE THROUGH WHICH THE COMMISSIONER ON AGING REPORTS TO THE SECRETARY.

"THERE IS NOTHING IN SECTION 201(A) OF THE OLDER AMERICANS ACT THAT PROHIBITS ACTIONS OF THE COMMISSIONER FROM BEING MADE SUBJECT TO APPROVAL WITHIN THE OFFICE OF THE SECRETARY. THE CONGRESSIONAL CONCERN IN ENACTING SECTION 201(A) WAS THE CONTRARY, NAMELY, THAT THE FUNCTIONS OF THE COMMISSIONER ON AGING WERE BEING INAPPROPRIATELY DELEGATED TO LOWER LEVEL OFFICES IN THE DEPARTMENT.

"*** THE SECRETARY'S MAY 2 MEMORANDUM DOES NOT REQUIRE THE DELEGATION OF FUNCTIONS OF THE COMMISSIONER TO AN OFFICER NOT RESPONSIBLE TO HIM. IT SIMPLY REQUIRES DECISIONS OF THE COMMISSIONER WITH RESPECT TO CERTAIN AUDIT MATTERS TO BE APPROVED AT A HIGHER LEVEL WITHIN THE OFFICE OF THE SECRETARY. THIS ARRANGEMENT IS COMPLETELY CONSISTENT WITH THE RESTRICTIONS IN SECTION 201(A).

"THE FACT THAT PROGRAM RESPONSIBILITY FOR THE AGING PROGRAM IS LODGED BY STATUTE IN THE COMMISSIONER, AND THAT DELEGATIONS TO OFFICIALS NOT RESPONSIBLE TO HIM ARE PROHIBITED, DOES NOT LEAD TO THE CONCLUSION THAT THE COMMISSIONER IS AN INDEPENDENT AGENCY RESPONSIBLE TO NO HIGHER AUTHORITY. UNDER SECTION 201(A), THE ADMINISTRATION ON AGING AND ITS COMMISSIONER ARE ORGANIZATIONALLY PLACED WITHIN THE OFFICE OF THE SECRETARY IN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES. AS SUCH, LIKE OTHER COMPONENTS OF THE DEPARTMENT, THEY ARE SUBJECT TO THE OVERALL SUPERVISION AND DIRECTION OF THE SECRETARY, AS PROVIDED IN SECTION 1 OF REORGANIZATION PLAN NO. 1 OF 1953."

WE FIND THAT THE HHS GENERAL COUNSEL'S EXPLANATION IS CORRECT AND THE SECRETARY'S DIRECTIVE DID NOT VIOLATE THE PROVISIONS OF THE OLDER AMERICANS ACT AS CONTAINED IN 42 U.S.C. SEC. 3001 ET. SEQ. THE SECRETARY HAS INDEPENDENT AUTHORITY TO PERFORM AUDITS OF PROGRAMS WITHIN HIS DEPARTMENT. IT IS HE AND NOT THE COMMISSIONER WHO DELEGATES THIS AUTHORITY TO THE AUDITORS. ALSO, UNDER 42 U.S.C. SEC. 3017, THE SECRETARY AND NOT THE COMMISSIONER HAS BEEN CHARGED WITH THE RESPONSIBILITY OF EVALUATING THE EFFECTIVENESS OF OLDER AMERICANS ACT PROGRAMS.

QUESTION #4:ATTACHMENT V IS A MEMORANDUM DATED JULY 28, 1980, FROM THE COMMISSIONER ON AGING TO THE ASSISTANT SECRETARY, HDS, ON DISCRETIONARY GRANT AND CONTRACT AUTHORITIES. IN THIS MEMORANDUM THE COMMISSIONER DISAGREES WITH A POSITION BY THE ASSISTANT SECRETARY CONCERNING GRANTS POLICY. NO FORMAL REPLY WAS MADE TO THE COMMISSIONER'S MEMORANDUM AND IT APPEARS THAT THE MEMORANDUM WAS WITHDRAWN BASED ON AN INFORMAL AGREEMENT THAT A REPLY WAS NOT NECESSARY. WHAT IS YOUR OPINION ON THE ASSERTIONS MADE IN THE COMMISSIONER'S MEMORANDUM?

ANSWER: THE ASSISTANT SECRETARY HAD INDICATED THAT "OHDS IS THE GRANTING AGENCY." THE COMMISSIONER DISPUTES THIS AND POINTS OUT THAT UNDER THE OLDER AMERICANS ACT, 42 U.S.C. CHAPTER 35, THE AUTHORITY TO MAKE GRANTS AND CONTRACTS INCIDENT TO THAT PROGRAM IS VESTED IN HIM AND DELEGATION OF SUCH AUTHORITY TO OFFICERS OUTSIDE HIS CONTROL IS PROHIBITED. RECOGNIZES THAT ACTUALLY THE GRANT AND CONTRACT OFFICERS WHO AUTHENTICATE HIS GRANTS AND CONTRACTS ARE NOT UNDER HIS CONTROL. HOWEVER, HE SEEMS TO BE POINTING OUT THAT THEIR ACTS ARE MINISTERIAL IN NATURE AND THAT THE ACTUAL ADMINISTRATION OF PROGRAM GRANTS AND CONTRACTS IS WITHIN HIS AUTHORITY. HE CONCLUDES WITH A WARNING THAT ANY OHDS USURPATION OF HIS AUTHORITY IN THIS AREA COULD LEAD TO UNDESIRED CONSEQUENCES:

"I THINK THAT DISREGARD OF THESE LEGAL FACTS WILL LEAD TO A LEGAL DETERMINATION THAT THE GRANTS OFFICER AND THE CONTRACTS OFFICER ON AOA CONTRACTS MUST BE A DIRECT SUBORDINATE OF THE COMMISSIONER IF THEIR SIGNATURE IS TO BE BINDING."

THE ISSUE IS WHETHER GRANT AND CONTRACT OFFICERS WHO SIGN AOA GRANTS AND CONTRACTS SHOULD BE DIRECTLY RESPONSIBLE TO THE COMMISSIONER SO THAT ALL ASPECTS OF AOA GRANTS AND CONTRACT ADMINISTRATION WILL BE WITHIN HIS CONTROL. BASED ON OUR REVIEW OF APPLICABLE LAW AND REGULATIONS, WE BELIEVE THAT SUCH OFFICIALS ARE REQUIRED TO BE DIRECTLY RESPONSIBLE TO THE COMMISSIONER.

UNDER THE PROVISIONS OF 42 U.S.C. SEC. 3012, THE AOA HAS BEEN CHARGED WITH THE DUTY AND FUNCTION TO "ADMINISTER THE GRANTS PROVIDED BY THIS CHAPTER." NUMEROUS STATUTORY PROVISIONS OF 42 U.S.C. CHAPTER 35 EXPLICITLY EMPOWER THE COMMISSIONER TO MAKE GRANTS OR CONTRACTS FOR VARIOUS PURPOSES. BY THE SAME TOKEN, THE SECRETARY, HHS, APPEARS TO HAVE BEEN EMPOWERED TO MAKE ONLY ONE TYPE OF GRANT IN THE CHAPTER, UNDER 42 U.S.C. SEC. 3035F, FOR UTILITY AND HOME HEATING COST DEMONSTRATION PROJECTS. ACCORDINGLY, CONGRESS APPEARS TO HAVE CLEARLY DISTINGUISHED BETWEEN FUNCTIONS GRANTED TO THE COMMISSIONER AND FUNCTIONS GRANTED TO THE SECRETARY UNDER THE ACT, WITH THE INTENTION THAT FUNCTIONS VESTED IN THE COMMISSIONER WOULD IN FACT BE PERFORMED BY HIM OR BY OFFICIALS UNDER HIS DIRECT SUPERVISION.

AS EXPLAINED IN THE PRECEDING ANSWERS, THE PROVISIONS OF 42 U.S.C. SEC. 3011(A) PRECLUDE THE DELEGATION OF THE COMMISSIONER'S FUNCTIONS TO OFFICIALS NOT DIRECTLY RESPONSIBLE TO HIM. INASMUCH AS CONGRESS IN VARIOUS STATUTORY PROVISIONS HAS SPECIFICALLY TASKED THE COMMISSIONER WITH MAKING GRANTS AND CONTRACTS IN THE FURTHERANCE OF THE OLDER AMERICANS ACT PROGRAM OBJECTIVES, THE SECRETARY IS PROHIBITED FROM AUTHORIZING THE COMMISSIONER TO DELEGATE THE FUNCTIONS OF AUTHENTICATING AND ADMINISTERING GRANTS AND CONTRACTS TO OFFICIALS WITHIN OHDS WHO ARE NOT DIRECTLY RESPONSIBLE TO THE COMMISSIONER.

NOTWITHSTANDING THE STATUTORY RESTRICTIONS DETAILED ABOVE, CERTAIN GRANT AND CONTRACT ADMINISTRATION FUNCTIONS ARE BEING PERFORMED BY OFFICIALS NOT RESPONSIBLE TO THE COMMISSIONER. A REVIEW OF THE OHD GRANTS ADMINISTRATION STAFF MANUAL, PROMULGATED IN 1978, INDICATES THAT THE PROCEDURE SET FORTH THEREIN IS APPLICABLE TO ALL PROGRAM OFFICES WITHIN OHDG, PRESUMABLY INCLUDING AOA. THE MANUAL DEFINES GRANTS OFFICER AS FOLLOWS:

"AS USED IN THIS MANUAL, THIS TERM MEANS EITHER THE OHD GRANTS OFFICER OR THE REGIONAL OFFICE STAFF MEMBER WHO HAS BEEN APPOINTED GRANTS OFFICER BY THE ASSISTANT REGIONAL DIRECTOR FOR HUMAN DEVELOPMENT."

THE ABOVE QUOTED DEFINITION CERTAINLY INDICATES THAT AOA AS A PROGRAM OFFICE WITHIN OHD MUST RELY ON A GRANT OFFICER WITHIN OHD TO PERFORM GRANT OFFICER FUNCTIONS FOR OLDER AMERICANS ACT PROGRAMS. THE MANUAL STATES ON PAGE 4-1 THAT: "THE GRANTS OFFICER IS DESIGNATED AS THE 'RECEIVING OFFICIAL' FOR ALL OHD DISCRETIONARY GRANT PROGRAMS." ON PAGES 11-1, 11-2 AND 11-6, IT FURTHER STATES THAT:

"THE GRANTS OFFICER AND THE COGNIZANT OHD PROGRAM OFFICES HAVE THE JOINT RESPONSIBILITY OF ADMINISTERING THE GRANTEE'S PROJECT PERFORMANCE TO ASSURE THAT ADEQUATE PROGRESS IS BEING MADE TOWARD ACHIEVING THE GOALS OF THE PROJECT.

"THE GRANTS OFFICER SHALL SERVE AS THE MANDATORY CONTROL AND RECEIPT POINT FOR ALL OFFICIAL WRITTEN COMMUNICATIONS WITH THE GRANTEE WHICH COMMIT OR MAY RESULT IN COMMITTING OHD TO A CHANGE IN THE AMOUNT OF THE GRANT, THE GRANT BUDGET, OR ANY TERMS AND CONDITIONS OF THE GRANT.

"GRANTS OFFICER SHALL SIGN WITH THE CONCURRENCE OF THE PROGRAM OFFICE HEAD, ALL CORRESPONDENCE RELATING TO THE BUSINESS ASPECTS OF THE GRANT. (THE PROGRAM OFFICE HEAD MAY RELINQUISH TO THE GRANTS OFFICER HIS PREROGATIVE OF CONCURRENCE ON SUCH CORRESPONDENCE IF SO DESIRED).

"BOTH THE GRANTS OFFICER AND COGNIZANT PROGRAM OFFICE ARE JOINTLY RESPONSIBLE FOR THE CONTINUING MONITORING AND SURVEILLANCE OF PROJECT OPERATIONS TO ASSURE THAT THE GOVERNMENT'S INTEREST IS PROTECTED AND THAT THE GRANTEE IS ADHERING TO THE TERMS AND CONDITIONS OF THE GRANT AWARD."

FROM THE ABOVE QUOTED MATERIAL, IT IS CLEAR THAT THE OHD GRANT OFFICER PERFORMS MANY GRANT ADMINISTRATION FUNCTIONS REGARDING AOA GRANTS. HOWEVER, THE FUNCTION OF ADMINISTERING SUCH GRANTS HAS BEEN VESTED BY STATUTE IN THE COMMISSIONER. INASMUCH AS THE SECRETARY IS PROHIBITED BY 42 U.S.C. SEC. 3011(A) FROM AUTHORIZING THE COMMISSIONER TO DELEGATE THESE FUNCTIONS TO OFFICIALS OUTSIDE HIS CONTROL, WE ARE OF THE OPINION THAT THE DE FACTO DELEGATION OF THESE FUNCTIONS TO THE OHD GRANT OFFICER VIOLATES THAT STATUTORY RESTRICTION. APPARENTLY A SIMILAR SITUATION EXISTS REGARDING AOA PROGRAM CONTRACTS WHEREIN THERE HAS BEEN A DE FACTO DELEGATION OF AOA CONTRACT ADMINISTRATION FUNCTIONS TO THE OHD CONTRACT OFFICER, WHICH VIOLATES THE SAME STATUTORY RESTRICTION.

AS SUGGESTED IN OUR ANSWER TO QUESTION 2, THE USE OF OHD ADMINISTRATIVE SUPPORT SERVICES BY AOA IS NOT NECESSARILY PRECLUDED BY SEC. 3011(A) SO LONG AS AOA CONTROL IS MAINTAINED OVER SUCH SUPPORT SERVICES. PRESENTLY DRAFTED, HOWEVER, THE MANUAL PROVISIONS DISCUSSED ABOVE REFLECT THE APPARENT LACK OF AOA CONTROL IN THE ADMINISTRATION OF AOA PROGRAMS.

DIGEST

1. FPCD QUESTIONS THE LEGALITY OF THE HEALTH AND HUMAN SERVICES (HHS) POSITION THAT NON-POLICYMAKING FUNCTIONS OF THE COMMISSIONER, ADMINISTRATION ON AGING (AOA), CAN BE DELEGATED TO OFFICIALS OUTSIDE HIS CONTROL, NOTWITHSTANDING THE RESTRICTION CONTAINED IN 42 U.S.C. SEC. 3011(A) PROHIBITING DELEGATION OF THE COMMISSIONER'S FUNCTIONS. HHS ERRED IN RELYING ON THE LEGISLATIVE HISTORY OF A COMPARABLE STATUTE. BOTH THE PLAIN MEANING AND LEGISLATIVE HISTORY OF 42 U.S.C. SEC. 3011(A) CLEARLY INDICATE THAT NONE OF THE COMMISSIONER'S FUNCTIONS CAN BE DELEGATED TO OFFICIALS OUTSIDE HIS CONTROL.

2. FPCD QUESTIONS WHETHER THE SECRETARY OF HEALTH AND HUMAN SERVICES (HHS) CAN LEGALLY LIMIT THE AUTHORITY OF THE COMMISSIONER, ADMINISTRATION ON AGING (AOA) TO APPROVE RESOLUTIONS OF CERTAIN AUDIT EXCEPTIONS TO AOA GRANTS AND CONTRACTS IN VIEW OF RESTRICTION IN 42 U.S.C. SEC. 3011(A) ON DELEGATION OF COMMISSIONER'S FUNCTIONS. THE SECRETARY HAS INDEPENDENT AUTHORITY TO CONDUCT AUDITS OF HHS PROGRAMS AND HENCE MAY LEGALLY LIMIT THE COMMISSIONER'S AUTHORITY TO APPROVE RESOLUTIONS OF AUDIT EXCEPTIONS.

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