B-154135, AUGUST 18, 1964, 44 COMP. GEN. 87

B-154135: Aug 18, 1964

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THE GRANT AGREEMENT CONTAINING NO PROHIBITION THERE IS NO LEGAL OBJECTION TO THE MAINTENANCE OF A REVOLVING FUND BY THE EAST-WEST CENTER PRESS. 1964: THIS IS IN FURTHER REFERENCE TO LETTER OF MAY 5. THE EAST-WEST CENTER WAS ESTABLISHED AS AN EDUCATIONAL INSTITUTION LOCATED ON THE CAMPUS OF THE UNIVERSITY OF HAWAII. IT IS STATED IN THE LETTER OF MAY 5 THAT A NORMAL APPURTENANCE OF AN EDUCATIONAL INSTITUTION. IS A PRESS OPERATION. ESTABLISHED BY THE CENTER IS SERVING A MOST USEFUL FUNCTION IN PROMOTING CULTURAL INTERCHANGE BETWEEN EAST AND WEST. CONCERN IS EXPRESSED. THE CENTER MAKES THE POINT THAT IF IT IS TO CONTINUE TO EMPLOY THE MEDIUM OF THE PRESS TO PUBLISH THE WORKS OF ITS SCHOLARS AT THE CENTER AND THE SCHOLARS ELSEWHERE IN ASIA AND AMERICA.

B-154135, AUGUST 18, 1964, 44 COMP. GEN. 87

FUNDS - REVOLVING - ESTABLISHMENT - GRANT-IN-AID FUNDS THE EAST-WEST CENTER ESTABLISHED AS AN EDUCATIONAL INSTITUTION ON THE CAMPUS OF THE UNIVERSITY OF HAWAII UNDER THE AUTHORITY OF THE CENTER FOR CULTURAL AND TECHNICAL INTERCHANGE BETWEEN EAST AND WEST ACT OF 1960 (22 U.S.C. 2054 NOTE), AND MAINTAINED THROUGH GRANT FUNDS FROM THE UNIVERSITY, MAY MAKE USE OF A REVOLVING FUND PROCEDURE FOR PRESS OPERATIONS--- EAST- WEST CENTER PRESS--- FREE FROM THE STATUTORY RESTRICTION OF SECTION 3617 OF THE REVISED STATUTES, 31 U.S.C. 484, IMPOSED ON THE EXPENDITURE OF APPROPRIATED MONEYS BY THE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT, THE CENTER FINANCED THROUGH UNIVERSITY OF HAWAII GRANT AUTHORIZED IN APPROPRIATIONS ACTS FOR THE STATE OF HAWAII, DOES NOT REQUIRE SPECIFIC AUTHORITY TO OPERATE A REVOLVING FUND, AND THE GRANT AGREEMENT CONTAINING NO PROHIBITION THERE IS NO LEGAL OBJECTION TO THE MAINTENANCE OF A REVOLVING FUND BY THE EAST-WEST CENTER PRESS.

TO THE SECRETARY OF STATE, AUGUST 18, 1964:

THIS IS IN FURTHER REFERENCE TO LETTER OF MAY 5, 1964, FROM THE ASSISTANT SECRETARY OF STATE FOR ADMINISTRATION, REQUESTING AN OPINION WITH RESPECT TO THE PROPRIETY OF MAINTAINING A REVOLVING FUND BY THE EAST-WEST CENTER PRESS.

PURSUANT TO THE AUTHORITY OF THE CENTER FOR CULTURAL AND TECHNICAL INTERCHANGE BETWEEN EAST AND WEST ACT OF 1960, PUBLIC LAW 86-472, APPROVED MAY 14, 1960, 74 STAT. 141, 22 U.S.C. 2054 NOTE, THE EAST-WEST CENTER WAS ESTABLISHED AS AN EDUCATIONAL INSTITUTION LOCATED ON THE CAMPUS OF THE UNIVERSITY OF HAWAII, AND BY MEANS OF A GRANT OF FUNDS TO THE UNIVERSITY OF HAWAII.

IT IS STATED IN THE LETTER OF MAY 5 THAT A NORMAL APPURTENANCE OF AN EDUCATIONAL INSTITUTION, SUCH AS THE EAST-WEST CENTER, IS A PRESS OPERATION, AND THAT THE PRESS, ESTABLISHED BY THE CENTER IS SERVING A MOST USEFUL FUNCTION IN PROMOTING CULTURAL INTERCHANGE BETWEEN EAST AND WEST. CONCERN IS EXPRESSED, HOWEVER, AS TO THE PROPRIETY OF THE USE OF A REVOLVING FUND IN THE OPERATIONS OF THE PRESS. THE CENTER MAKES THE POINT THAT IF IT IS TO CONTINUE TO EMPLOY THE MEDIUM OF THE PRESS TO PUBLISH THE WORKS OF ITS SCHOLARS AT THE CENTER AND THE SCHOLARS ELSEWHERE IN ASIA AND AMERICA, AND GIVE SUCH PUBLISHED WORKS WIDE DISSEMINATION WITH ECONOMY, IT MUST OPERATE A REVOLVING FUND. IN A STATEMENT PREPARED BY THE CENTER AND ENCLOSED WITH THE ASSISTANT SECRETARY'S LETTER, THE OPERATIONAL NEED FOR A REVOLVING FUND UNDER WHICH RECEIPTS FROM THE SALE OF PUBLICATIONS COULD BE USED FOR SUPPLEMENTING THE FINANCING OF THE PRESS IS FULLY SET FORTH.

AS TO THE PLAN OF THE CENTER TO USE INCOME FROM THE PRESS OPERATION TO OFFSET ITS COSTS, IT IS POINTED OUT IN THE LETTER OF MAY 5 THAT THIS IS A MATTER OF RECORD IN THE BUDGET JUSTIFICATIONS AS PRESENTED TO THE HOUSE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS FOR THE FISCAL YEARS 1964 AND 1965, AND IN THE BUDGET JUSTIFICATION FOR 1964 AS PRESENTED TO THE SENATE SUBCOMMITTEE ON APPROPRIATIONS. IT IS ALSO STATED IN THE LETTER OF MAY 5 THAT IT IS THE INTENT IN BUDGET PRESENTATIONS TO THE CONGRESS TO MAKE FULL DISCLOSURE OF RECEIPTS OBTAINED THROUGH THE OPERATION OF THE FUND.

WHERE FEDERAL EXPENDITURES ARE INVOLVED, SPECIFIC AUTHORITY FOR THE USE OF REVOLVING FUND PROCEDURES ARE NECESSARY IN VIEW OF THE REQUIREMENT IN SECTION 3617 OF THE REVISED STATUTES, 31 U.S.C. 484, THAT THE GROSS AMOUNT OF ALL MONEYS RECEIVED FOR THE USE OF THE UNITED STATES FROM ANY SOURCE WHATEVER SHALL BE COVERED INTO THE TREASURY. THE CENTER IS FINANCED THROUGH GRANTS MADE TO THE UNIVERSITY OF HAWAII. THESE GRANTS ARE MADE AS AUTHORIZED BY THE APPROPRIATION ACTS FOR THE FISCAL YEARS 1961, 1962, 1963, AND 1964, ALL OF WHICH PROVIDE FOR FUNDS TO BE MADE AVAILABLE "BY GRANT TO AN APPROPRIATE AGENCY OF THE STATE OF HAWAII.' THE BENEFITS RESULTING FROM THE USE OF THE GRANT TECHNIQUE EXTEND TO MAKING THE FUNDS, WHILE UNDER THE CONTROL OF THE GRANTEE, FREE FROM THE STATUTORY RESTRICTIONS GENERALLY APPLICABLE TO THE EXPENDITURE OF APPROPRIATED MONEYS BY THE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT. SEE 42 COMP. GEN. 289, 294, AND DECISIONS CITED THEREIN. THEREFORE, AND SINCE THERE IS NO PROHIBITION IN THE GRANT AGREEMENT AGAINST THE USE OF A REVOLVING FUND, WE PERCEIVE OF NO LEGAL OBJECTION TO THE OPERATION OF A REVOLVING FUND BY THE EAST-WEST CENTER PRESS.