B-102622, NOV. 5, 1965

B-102622, NOV. 5, 1965

TO MR. RALPH W. PYLES:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14, 1965, IN WHICH YOU ADVISE THAT YOU RECEIVED A COPY OF OUR LETTER OF OCTOBER 7, 1965, B 102622, TO CONGRESSMAN LENNON REGARDING A DECISION BY OUR OFFICE PROHIBITING THE USE OF FEDERAL FUNDS LOANED UNDER TITLE IV OF THE HOUSING ACT OF 1950 FOR THE PURCHASE OF FURNITURE UNLESS IT IS ACTUALLY PART OF THE CONSTRUCTION OF THE FACILITY. YOU BELIEVE THAT BUILT-IN FURNITURE IS GOING TO BE MORE EXPENSIVE THAN FACTORY BUILT FURNITURE, AND TRUST THAT IN THE LIGHT OF INFORMATION OBTAINED FROM FURTHER INVESTIGATION OF THE MATTER WE WILL RECONSIDER OUR DECISION.

REGARDING THE MATTER OF THE COST OF BUILT-IN FURNITURE AS COMPARED TO THE COST OF FACTORY BUILT FURNITURE, WE WILL TAKE PARTICULAR NOTE OF THIS MATTER IN OUR FUTURE AUDITS OF THE COLLEGE HOUSING PROGRAM. HOWEVER, AS YOU WILL NOTE FROM THE ATTACHED COPY OF OUR DECISION OF MAY 11, 1951, THE CONCLUSION THEREIN WAS BASED UPON THE WORDING OF TITLE IV OF THE HOUSING ACT OF 1950, WHICH AUTHORIZED LOANS ONLY FOR "CONSTRUCTION," AND THE DEFINITIONS OF "CONSTRUCTION," "HOUSING," AND ,DEVELOPMENT COSTS" CONTAINED THEREIN. THEREFORE, AS WE ADVISED CONGRESSMAN LENNON, IN THE ABSENCE OF A CHANGE IN THE LAW, THERE IS NO VALID BASIS FOR CHANGING OUR DECISION.