B-115597, JUNE 19, 1953, 32 COMP. GEN. 561

B-115597: Jun 19, 1953

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DISTRICT OF COLUMBIA - PRIVATE HOSPITAL CONSTRUCTION AND IMPROVEMENT - FEDERAL CONTRIBUTIONS UNDER THE HOSPITAL CENTER ACT WHICH AUTHORIZES FEDERAL GRANTS FOR PRIVATE HOSPITAL CONSTRUCTION AND IMPROVEMENT IN THE DISTRICT OF COLUMBIA PROVIDED SUCH GRANTS ARE MATCHED BY PRIVATE FUNDS. NEITHER ANY PART OF THE FUNDS GRANTED A HOSPITAL NOR ANY PART OF THE PRIVATE FUNDS PUT UP TO MATCH SUCH GRANT MAY BE USED TO MATCH FUNDS TO BE GRANTED FOR HOSPITAL IMPROVEMENT UNDER ANY OTHER LAWS EVEN THOUGH THE DISTRICT OF COLUMBIA IS REQUIRED UNDER THE ACT TO REPAY THE FEDERAL GOVERNMENT ONE HALF OF THE GRANT. 1953: REFERENCE IS MADE TO YOUR LETTER OF JUNE 2. THE QUESTION PRESENTED IS WHETHER THAT PORTION OF THE FUNDS GRANTED UNDER THE HOSPITAL CENTER ACT.

B-115597, JUNE 19, 1953, 32 COMP. GEN. 561

DISTRICT OF COLUMBIA - PRIVATE HOSPITAL CONSTRUCTION AND IMPROVEMENT - FEDERAL CONTRIBUTIONS UNDER THE HOSPITAL CENTER ACT WHICH AUTHORIZES FEDERAL GRANTS FOR PRIVATE HOSPITAL CONSTRUCTION AND IMPROVEMENT IN THE DISTRICT OF COLUMBIA PROVIDED SUCH GRANTS ARE MATCHED BY PRIVATE FUNDS, NEITHER ANY PART OF THE FUNDS GRANTED A HOSPITAL NOR ANY PART OF THE PRIVATE FUNDS PUT UP TO MATCH SUCH GRANT MAY BE USED TO MATCH FUNDS TO BE GRANTED FOR HOSPITAL IMPROVEMENT UNDER ANY OTHER LAWS EVEN THOUGH THE DISTRICT OF COLUMBIA IS REQUIRED UNDER THE ACT TO REPAY THE FEDERAL GOVERNMENT ONE HALF OF THE GRANT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, JUNE 19, 1953:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 2, 1953, REQUESTING A DECISION ON A QUESTION ARISING OUT OF A GRANT OF FUNDS MADE TO THE CHILDREN'S HOSPITAL, WASHINGTON, D.C., UNDER THE PROVISIONS OF THE ACT OF AUGUST 7, 1946, PUBLIC LAW 648, 60 STAT. 896, AS AMENDED BY PUBLIC LAW 221, APPROVED OCTOBER 25, 1951, 65 STAT. 657 (HEREINAFTER REFERRED TO AS THE HOSPITAL CENTER ACT).

THE QUESTION PRESENTED IS WHETHER THAT PORTION OF THE FUNDS GRANTED UNDER THE HOSPITAL CENTER ACT, WHICH THE DISTRICT OF COLUMBIA IS OBLIGATED TO REPAY THE FEDERAL GOVERNMENT AND THE MONEY USED BY THE CHILDREN'S HOSPITAL TO MATCH SUCH AMOUNT, MAY BE USED TO MATCH ADDITIONAL FUNDS TO BE GRANTED UNDER THE HOSPITAL SURVEY AND CONSTRUCTION ACT, PUBLIC LAW 725, APPROVED AUGUST 13, 1946, 60 STAT. 1040, AS AMENDED (HEREINAFTER REFERRED TO AS THE HILL-BURTON ACT).

THE PERTINENT PROVISIONS OF THE HOSPITAL CENTER ACT ARE AS FOLLOWS:

SEC. 1. * * *

(C) TO MAKE GRANTS TO PRIVATE AGENCIES IN CASH, * * * PROVIDED FURTHER, * * * NO SUCH GRANT SHALL BE MADE TO ANY PRIVATE AGENCY UNLESS SUCH PRIVATE AGENCY SHALL OBLIGATE ITSELF TO PAY AT LEAST 50 PERCENTUM OF THE COST OF ANY PROJECT FOR WHICH SUCH GRANT IS MADE. * * *

SEC. 5. FIFTY PERCENTUM OF THE NET AMOUNT EXPENDED BY THE FEDERAL WORKS ADMINISTRATOR UNDER THIS ACT SHALL BE CHARGED AGAINST THE DISTRICT OF COLUMBIA AND SHALL BE REPAID TO THE GOVERNMENT BY THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA AT THE ANNUAL RATE, WITHOUT INTEREST OF 3 PERCENTUM OF SUCH 50 PERCENTUM. * * *

IT IS INDICATED IN YOUR LETTER THAT CHILDREN'S HOSPITAL HAS PREVIOUSLY RECEIVED GRANTS OF FUNDS IN THE AMOUNTS OF $815,000 AND $442,000 UNDER THE PROVISIONS OF THE HILL-BURTON ACT AND THE HOSPITAL CENTER ACT, RESPECTIVELY. THE HOSPITAL HAS NOW APPLIED FOR AN ADDITIONAL GRANT OF $181,000 UNDER THE HILL-BURTON ACT AND PROPOSES TO MEET THE MATCHING REQUIREMENTS OF THAT ACT BY USING THE FOLLOWING AMOUNTS AS SET OUT IN YOUR LETTER:

50 PERCENT OF A GRANT OF $442,000 APPROVED UNDER THE

HOSPITAL CENTER ACT ------------------------------ $221,000

AMOUNT OF FUNDS CONTRIBUTED BY THE HOSPITAL TO MATCH

THE FOREGOING AMOUNT OF " DISTRICT FUNDS" ------- 221,000

TOTAL AMOUNT AVAILABLE FOR MATCHING REQUESTED UNDER

THE HILL-BURTON ACT ------------------------ $442,000

IT IS STATED IN YOUR LETTER THAT THE HOSPITAL CONTENDS THAT, SINCE THE DISTRICT OF COLUMBIA IS REQUIRED TO REIMBURSE THE FEDERAL GOVERNMENT 50 PERCENTUM OF THE GRANT RECEIVED UNDER THE HOSPITAL CENTER ACT, THAT PORTION OF THE GRANT IS IN EFFECT DISTRICT FUNDS AND NOT FEDERAL FUNDS. YOUR LETTER FURTHER INDICATES THAT THE DIRECTOR OF PUBLIC HEALTH OF THE DISTRICT OF COLUMBIA CONSIDERS THESE FUNDS IN THE SAME CATEGORY AS THE LOCAL FUNDS APPROPRIATED FOR HOSPITAL CONSTRUCTION IN 14 OTHER STATES.

THE CONTENTIONS SO MADE APPEAR TO ARISE FROM THE MISCONCEPTION THAT 50 PERCENTUM OF THE GRANT MADE BY THE FEDERAL GOVERNMENT PURSUANT TO THE HOSPITAL CENTER ACT CONSTITUTES A LOAN TO THE DISTRICT OF COLUMBIA AND THAT, IN TURN, THE DISTRICT OF COLUMBIA CONTRIBUTES SUCH AMOUNT TO CHILDREN'S HOSPITAL. HOWEVER, THE FACT IS THAT THE ENTIRE AMOUNT INVOLVED, IN ITS INCEPTION, IS A GRANT OF FEDERAL FUNDS TO CHILDREN'S HOSPITAL UNDER SECTION 1 (C) OF THE ACT. THE FACT THAT, UNDER SECTION 5 OF THE ACT, THE DISTRICT OF COLUMBIA IS REQUIRED TO PAY 50 PERCENT THEREOF TO THE FEDERAL GOVERNMENT OVER A PERIOD OF 33 1/3 YEARS IN NOWISE AFFECTS THE STATUS OF THE FUNDS AT THE TIME OF THE GRANT TO CHILDREN'S HOSPITAL. HENCE, THIS OFFICE CANNOT SUBSCRIBE TO THE VIEW THAT, OF THE AMOUNT OF THE FEDERAL FUNDS OBTAINED UNDER THE HOSPITAL CENTER ACT, 50 PERCENTUM REPRESENTED A GRANT TO CHILDREN'S HOSPITAL AND 50 PERCENTUM WAS INTENDED AS A LOAN TO THE DISTRICT OF COLUMBIA SO AS TO CONSTITUTE FUNDS OF THE LATTER. ACCORDINGLY, THERE IS NO PROPER BASIS FOR USING SUCH FUNDS TO OBTAIN A FURTHER GRANT UNDER THE HILL BURTON ACT.

FURTHERMORE, THE MONEY USED BY THE HOSPITAL TO OBTAIN A GRANT UNDER THE HOSPITAL CENTER ACT MAY NOW NOW BE USED TO OBTAIN A GRANT ALSO UNDER THE HILL-BURTON ACT. SEE B-111620 DATED SEPTEMBER 25, 1952, 32 COMP. GEN. 141, REFERRED TO IN YOUR LETTER.

ACCORDINGLY, AND WHILE THE GENERAL ACCOUNTING OFFICE IS IN COMPLETE SYMPATHY WITH THE NEEDS OF CHILDREN'S HOSPITAL, IT MUST BE HELD THAT NO PORTION OF THE FUNDS GRANTED UNDER THE HOSPITAL CENTER ACT NOR OF THE FUNDS USED BY THE APPLICANT TO MATCH SUCH AMOUNT, MAY BE USED TO MATCH FUNDS TO BE GRANTED UNDER THE HILL-BURTON ACT.