A-92758, FEBRUARY 28, 1938, 17 COMP. GEN. 695

A-92758: Feb 28, 1938

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IS AS FOLLOWS: A PROBLEM HAS ARISEN IN CONNECTION WITH THE ADMINISTRATION OF THE MATERNAL AND CHILD HEALTH PROGRAM UNDER PART 1. IN SECTION 504 (B) THE FOLLOWING METHOD OF COMPUTING AND PAYING SUCH AMOUNTS IS PROVIDED: "/1) THE SECRETARY OF LABOR SHALL. IF SUCH AMOUNT IS LESS THAN ONE-HALF OF THE TOTAL SUM OF SUCH ESTIMATED EXPENDITURES. THE SOURCE OR SOURCES FROM WHICH THE DIFFERENCE IS EXPECTED TO BE DERIVED * * *" IN ACCORDANCE WITH THE ABOVE QUOTED PROVISIONS. WHICH IS THE AGENCY IN ALASKA DESIGNATED TO COOPERATE WITH THE CHILDREN'S BUREAU IN THE MATERNAL AND CHILD HEALTH PROGRAM UNDER THE SOCIAL SECURITY ACT. SUBMITTED A BUDGET IN WHICH THERE WAS INCLUDED A SUM OF MONEY WHICH HAD BEEN MADE AVAILABLE BY THE ALASKA RURAL REHABILITATION CORPORATION.

A-92758, FEBRUARY 28, 1938, 17 COMP. GEN. 695

SOCIAL SECURITY - FEDERAL AID - MATCHING OF FUNDS MADE AVAILABLE TO ALASKA BY ALASKA RURAL REHABILITATION CORPORATION FEDERAL GRANTS UNDER TITLE 5 OF THE SOCIAL SECURITY ACT, 49 STAT. 629, TO THE ALASKA TERRITORY FOR CARRYING ON MATERNAL AND CHILD HEALTH SERVICES, MAY BE IN SUFFICIENT AMOUNTS TO MATCH FUNDS PROVIDED BY THE TERRITORY INCLUSIVE OF FUNDS MADE AVAILABLE TO IT BY THE ALASKA RURAL REHABILITATION CORPORATION, THE FUNDS IN THE POSSESSION OF THE CORPORATION NO LONGER BEING FOR CLASSIFICATION AS FEDERAL FUNDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF LABOR, FEBRUARY 28, 1938:

YOUR LETTER OF FEBRUARY 17, 1938, IS AS FOLLOWS:

A PROBLEM HAS ARISEN IN CONNECTION WITH THE ADMINISTRATION OF THE MATERNAL AND CHILD HEALTH PROGRAM UNDER PART 1, TITLE V OF THE SOCIAL SECURITY ACT (ACT OF AUGUST 14, 1935, PUB., NO. 271, 74TH CONG.), WHICH I DEEM ADVISABLE TO BRING TO YOUR ATTENTION.

SECTION 502 (A) OF PART 1 OF TITLE V OF THE SOCIAL SECURITY ACT PROVIDES THAT THE SECRETARY OF LABOR SHALL ALLOT CERTAIN SUMS OF MONEY TO EACH STATE FOR CARRYING ON MATERNAL AND CHILD HEALTH SERVICES. SECTION 504 (A) PROVIDES "FROM THE SUMS APPROPRIATED THEREFOR AND ALLOTMENTS AVAILABLE UNDER SECTION 502 (A), THE SECRETARY OF THE TREASURY SHALL PAY TO EACH STATE WHICH HAS AN APPROVED PLAN FOR MATERNAL AND CHILD HEALTH SERVICES * * *, AN AMOUNT, WHICH SHALL BE USED EXCLUSIVELY FOR CARRYING OUT THE STATE PLAN, EQUAL TO ONE-HALF OF THE TOTAL SUM EXPENDED DURING SUCH QUARTER FOR CARRYING OUT SUCH PLAN.' IN SECTION 504 (B) THE FOLLOWING METHOD OF COMPUTING AND PAYING SUCH AMOUNTS IS PROVIDED: "/1) THE SECRETARY OF LABOR SHALL, PRIOR TO THE BEGINNING OF EACH QUARTER, ESTIMATE THE AMOUNT TO BE PAID TO THE STATE FOR SUCH QUARTER UNDER THE PROVISIONS OF SUBSECTION (A), SUCH ESTIMATE TO BE BASED ON (A) A REPORT FILED BY THE STATE CONTAINING ITS ESTIMATE OF THE TOTAL SUM TO BE EXPENDED IN SUCH QUARTER IN ACCORDANCE WITH THE PROVISIONS OF SAID SUBSECTION AND STATING THE AMOUNT APPROPRIATED OR MADE AVAILABLE BY THE STATE AND ITS POLITICAL SUBDIVISIONS FOR SUCH EXPENDITURES IN SUCH QUARTER, AND IF SUCH AMOUNT IS LESS THAN ONE-HALF OF THE TOTAL SUM OF SUCH ESTIMATED EXPENDITURES, THE SOURCE OR SOURCES FROM WHICH THE DIFFERENCE IS EXPECTED TO BE DERIVED * * *"

IN ACCORDANCE WITH THE ABOVE QUOTED PROVISIONS, THE TERRITORIAL HEALTH DEPARTMENT FOR ALASKA, WHICH IS THE AGENCY IN ALASKA DESIGNATED TO COOPERATE WITH THE CHILDREN'S BUREAU IN THE MATERNAL AND CHILD HEALTH PROGRAM UNDER THE SOCIAL SECURITY ACT, SUBMITTED A BUDGET IN WHICH THERE WAS INCLUDED A SUM OF MONEY WHICH HAD BEEN MADE AVAILABLE BY THE ALASKA RURAL REHABILITATION CORPORATION, WHICH SUM THE TERRITORIAL DEPARTMENT OF HEALTH INTENDED TO USE TO MATCH THE FEDERAL MONEY ALLOTTED UNDER SECTION 502 (A).

THE QUESTION AROSE AS TO WHETHER OR NOT THE MONEY WHICH WAS MADE AVAILABLE TO THE TERRITORY BY THE ALASKA RURAL REHABILITATION CORPORATION COULD BE MATCHED WITH MONEY ALLOTTED TO THE TERRITORY UNDER SECTION 502 (A) OF THE SOCIAL SECURITY ACT, SINCE THE ALASKA RURAL REHABILITATION CORPORATION WAS ORIGINALLY FINANCED WITH FEDERAL FUNDS.

IN CONSIDERING THIS PROBLEM THE DEPARTMENT OF LABOR HAS TAKEN THE POSITION THAT IF THE FUNDS IN QUESTION ARE FEDERAL FUNDS, THEN THEY MAY NOT BE MATCHED WITH MONEY ALLOTTED TO THE STATE UNDER SECTION 502 (A). OTHER WORDS, THIS DEPARTMENT WOULD NOT MATCH FUNDS IN A STATE OR TERRITORY WHICH HAD BEEN GRANTED TO THAT STATE OR TERRITORY BY THE FEDERAL GOVERNMENT. THIS POSITION IS BASED ON THE FACT THAT IT WOULD NOT APPEAR REASONABLE FOR THE FEDERAL GOVERNMENT TO FURNISH MONEY TO A STATE OR TERRITORY FOR MATCHING PURPOSES AND THEN FURNISH THE STATE OR TERRITORY WITH MONEY TO MATCH IT. IF YOU FIND THAT THE POSITION TAKEN BY THIS DEPARTMENT IN THIS MATTER IS UNFOUNDED AND THAT UNDER SECTION 502 (A) OF THE SOCIAL SECURITY ACT MONEY IN A STATE OR TERRITORY WHICH HAS BEEN FURNISHED BY THE FEDERAL GOVERNMENT MAY BE MATCHED, THE QUESTION INVOLVED IN THE INSTANT CASE NEED NOT BE CONSIDERED.

IN THE EVENT YOU DECIDE THAT MONEY ALLOTTED TO A STATE OR TERRITORY UNDER SECTION 502 (A) OF THE SOCIAL SECURITY ACT MAY NOT BE MATCHED WITH MONEY GRANTED TO THE STATE OR TERRITORY BY THE FEDERAL GOVERNMENT ON SOME OTHER BASIS, THEN IT WILL BE NECESSARY TO CONSIDER THE PARTICULAR QUESTION INVOLVED IN THIS CASE. THE FUNDAMENTAL ISSUE INVOLVED IN THIS CASE APPEARS TO BE WHETHER THE PARTICULAR FUNDS FURNISHED BY THE ALASKA RURAL REHABILITATION CORPORATION ARE SUCH A NATURE AS TO MAKE IT IMPROPER FOR THE SECRETARY OF LABOR TO CERTIFY MONEY TO THE TERRITORY TO MATCH THESE FUNDS.

AS YOU KNOW, THE ALASKA RURAL REHABILITATION CORPORATION IS A PUBLIC CORPORATION ORGANIZED UNDER THE LAWS OF THE TERRITORY OF ALASKA, FINANCED ORIGINALLY BY GRANTS FROM THE FEDERAL EMERGENCY RELIEF ADMINISTRATION AND SET UP FOR THE PURPOSE OF CARRYING ON REHABILITATION IN THE MATANUSKA VALLEY. THIS CORPORATION IS, IN FACT, THE GOVERNING BODY FOR THE MATANUSKA VALLEY PROJECT AND PRESENTLY IS CARRYING ON ITS FUNCTIONS WITHOUT ANY GRANTS FROM THE FEDERAL GOVERNMENT AND WITH A MINIMUM AMOUNT OF SUPERVISION. THIS CORPORATION ACTS IN A MANNER SIMILAR TO A TOWN COUNCIL IN AN INCORPORATED TOWN, AND, IN THIS INSTANCE, IS MAKING AVAILABLE TO THE TERRITORY OF ALASKA CERTAIN SUMS OF MONEY FROM ITS TREASURY TO ASSIST IN THE MATERNAL AND CHILD HEALTH PROGRAM.

IN AN OPINION DATED MARCH 7, 1937, ADDRESSED TO THE POSTMASTER GENERAL (A -83629, 16 COMP. GEN. 887), WITH REGARD TO THE PAYMENT OF RENT BY THE POST OFFICE DEPARTMENT TO THE ALASKA RURAL REHABILITATION CORPORATION, THE COMPTROLLER GENERAL TOOK THE POSITION THAT SINCE "THE ALASKA RURAL REHABILITATION CORPORATION WAS ORGANIZED UNDER THE TERRITORIAL LAWS OF ALASKA, IS ONLY PARTIALLY UNDER THE SUPERVISION AND CONTROL OF FEDERAL OFFICIALS AND HAS THE STATUS OF A SEPARATE CORPORATE ENTITY, AT LEAST, WITH RESPECT TO THE OWNERSHIP AND MANAGEMENT OF PROPERTY UNDER ITS CONTROL, I HAVE TO ADVISE THAT THE STATUS OF THE CORPORATION IS NOT SUCH AS TO PRECLUDE PAYMENT TO IT BY THE POST OFFICE DEPARTMENT OF REASONABLE RENTAL, OTHERWISE PROPER, FOR THE OCCUPANCY OF ITS PROPERTY FOR POST OFFICE PURPOSES.'

ACCORDING TO THIS DECISION IT APPEARS THAT THE PROPERTY AND FUNDS HELD BY THE CORPORATION HAVE LOST THEIR FEDERAL IDENTITY AND MAY IN EVERY SENSE OF THE WORD BE CONSIDERED PROPERTY OF THE CORPORATION. IF THE MONEY HELD BY THE CORPORATION HAS LOST ITS FEDERAL IDENTITY AND IS CONSIDERED MONEY OF THE CORPORATION, THEN THERE APPEARS TO BE NO REASON WHY THIS MONEY MAY NOT BE USED BY THE TERRITORY OF ALASKA FOR MATCHING MONEY GRANTED TO IT UNDER SECTION 502 (A) OF THE SOCIAL SECURITY ACT. THE ONLY POSSIBLE LIMITATION WOULD APPEAR TO BE IN THE POWER OF THE CORPORATION TO MAKE THE MONEY AVAILABLE FOR THIS PARTICULAR PURPOSE. AN EXAMINATION OF THE ARTICLES OF INCORPORATION REVEALS IN ARTICLE 3 THAT AMONG THE POWERS OF THE CORPORATION ARE THE FOLLOWING:

"H. TO ENTER INTO, MAKE, AND PERFORM CONTRACTS OF EVERY KIND AND DESCRIPTION AND TO COOPERATE WITH ANY PERSON, PARTNERSHIP, ASSOCIATION, CORPORATION, MUNICIPALITY, COUNTY, STATE, BODY POLITIC, GOVERNMENT, COLONY, OR DEPENDENCY THEREOF; I. TO ENGAGE AND ASSIST IN ANY KIND OF EDUCATIONAL, CHARITABLE, HEALTH, AND RELIEF ACTIVITIES WHATSOEVER.'

UNDER THESE PROVISIONS OF THE ARTICLES OF INCORPORATION IT WOULD APPEAR THAT THE CORPORATION HAS AMPLE AUTHORITY TO USE PART OF ITS MONEY FOR THE PURPOSES CONTEMPLATED UNDER THE MATERNAL AND CHILD HEALTH PROGRAM.

FROM THE FOREGOING, IT WOULD APPEAR THAT THE SECRETARY OF LABOR MIGHT APPROPRIATELY CERTIFY MONEY TO THE TERRITORY OF ALASKA UNDER THE MATERNAL AND CHILD HEALTH SECTION OF THE SOCIAL SECURITY ACT TO MATCH MONEY MADE AVAILABLE TO THE TERRITORY BY THIS CORPORATION.

SINCE THIS QUESTION INVOLVES THE PROPER CERTIFICATION OF FEDERAL FUNDS, YOUR OPINION IS RESPECTFULLY REQUESTED.

IN ADDITION TO THE DECISION IN 16 COMP. GEN. 887, REFERRED TO IN YOUR SUBMISSION, THIS OFFICE BY DECISION OF APRIL 28, 1937, A-80541,TO THE PRESIDENT, ALASKA RURAL REHABILITATION CORPORATION, STATED:

UNDER THE CIRCUMSTANCES IT MAY BE CONCLUDED THAT THE STATUS OF THE ALASKA RURAL REHABILITATION CORPORATION IS SUCH THAT THIS OFFICE WILL NOT BE REQUIRED TO INSIST UPON THE SUBMISSION OF ACCOUNTS TO THIS OFFICE.

IT APPEARS THAT SUBSEQUENT TO FEBRUARY 15, 1936, THE FUNDS OF THIS CORPORATION RECEIVED FROM FEDERAL SOURCES HAVE BEEN GRANTED DIRECTLY TO THE CORPORATION UNDER AUTHORITY IN THE RELIEF ACT OF 1933, AS AMENDED BY THE ACT OF FEBRUARY 15, 1934, TO MAKE GRANTS FOR RELIEF WITHIN A STATE DIRECTLY TO SUCH PUBLIC AGENCY AS THE FEDERAL EMERGENCY RELIEF ADMINISTRATION MAY DESIGNATE.

UNDER THE CIRCUMSTANCES FUNDS NOW IN POSSESSION OF THE ALASKA RURAL REHABILITATION CORPORATION MAY NOT PROPERLY BE CLASSIFIED AS FEDERAL FUNDS AND CONSEQUENTLY IT WOULD APPEAR THAT IF SO ADMINISTRATIVELY DETERMINED GRANTS UNDER TITLE 5 OF THE SOCIAL SECURITY ACT TO THE ALASKA TERRITORY MAY BE IN SUFFICIENT AMOUNTS TO MATCH FUNDS PROVIDED BY THE TERRITORY, PLUS FUNDS MADE AVAILABLE TO IT BY THE ALASKA RURAL REHABILITATION CORPORATION.