B-156666, NOV. 24, 1965

B-156666: Nov 24, 1965

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STATE OF GEORGIA: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14. REQUEST WAS MADE ON THE INSTITUTE TO REFUND THE INTEREST RECEIVED. THIS ACTION WAS IN ACCORDANCE WITH THE RULE FOLLOWED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO THE EFFECT THAT INTEREST EARNED ON GRANTS OF FUNDS MADE BY THE UNITED STATES. COPY OF WHICH IS ENCLOSED FOR CONVENIENCE. THE SAID CHECK WAS DEPOSITED IN THE TREASURY OF THE UNITED STATES IN ACCORDANCE WITH THE TERMS OF THE CITED 31 U.S.C. 484. AS FOLLOWS: "NONE OF THE FUNDS CONTAINED IN THIS ACT SHALL BE USED FOR ANY ACTIVITY THE PURPOSE OF WHICH IS TO REQUIRE ANY RECIPIENT OF ANY PROJECT GRANT FOR RESEARCH. THE EFFECT OF THE TERMS OF SECTION 205 WAS DETERMINED BY OUR OFFICE TO RELIEVE COLLEGES AND UNIVERSITIES OF ANY LIABILITY TO PAY TO THE UNITED STATES ANY INTEREST OR OTHER INCOME THEY RECEIVED IN CONNECTION WITH CERTAIN GRANTS MADE TO THEM BY DEPARTMENTS AND AGENCIES OF THE GOVERNMENT BEFORE JULY 1.

B-156666, NOV. 24, 1965

TO THE HONORABLE ARTHUR K. BOLTON, ATTORNEY GENERAL, STATE OF GEORGIA:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14, 1965, REQUESTING RECONSIDERATION OF GENERAL ACCOUNTING OFFICE, CLAIMS DIVISION, SETTLEMENT DATED AUGUST 19, 1965, WHICH DISALLOWED THE CLAIM NO. Z-58 (60) OF THE GEORGIA INSTITUTE OF TECHNOLOGY FOR REFUND OF $42,949.50, REPRESENTING INTEREST INCOME EARNED BY THE INSTITUTE ON A PAYMENT OF GRANT FUNDS MADE TO IT BY THE NATIONAL SCIENCE FOUNDATION.

THE RECORDS SHOW THAT IN FEBRUARY 1959 THE NATIONAL SCIENCE FOUNDATION MADE A GRANT (NSF G-7410) OF $750,000 TO THE GEORGIA INSTITUTE OF TECHNOLOGY FOR THE SUPPORT OF RESEARCH ENTITLED ,SUPPORT OF A NUCLEAR RESEARCH REACTOR FACILITY.' THE INSTITUTE DEPOSITED THE FUNDS IN A LOCAL DEPOSITARY AND RECEIVED INTEREST THEREON IN THE SUM OF $42,949.50 FOR THE PERIOD MARCH 1, 1959, THROUGH DECEMBER 31, 1962.

THE MATTER HAVING COME TO THE ATTENTION OF THE NATIONAL SCIENCE FOUNDATION, REQUEST WAS MADE ON THE INSTITUTE TO REFUND THE INTEREST RECEIVED. THIS ACTION WAS IN ACCORDANCE WITH THE RULE FOLLOWED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO THE EFFECT THAT INTEREST EARNED ON GRANTS OF FUNDS MADE BY THE UNITED STATES, AS A RESULT OF DEPOSIT IN BANKS AND DELAY IN USING THE FUNDS FOR THE PURPOSES FOR WHICH GRANTED, INURES TO THE BENEFIT OF THE UNITED STATES RATHER THAN TO THE GRANTEE, AND, UNDER THE TERMS OF SECTION 3617, REVISED STATUTES, 31 UNITED STATES CODE 484, SHOULD BE ACCOUNTED FOR AND DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS. SEE OUR DECISION REPORTED AT 42 COMP. GEN. 289, 292, COPY OF WHICH IS ENCLOSED FOR CONVENIENCE.

BY LETTER DATED MARCH 8, 1963, THE GEORGIA INSTITUTE OF TECHNOLOGY TRANSMITTED ITS CHECK FOR $42,949.50 TO THE NATIONAL SCIENCE FOUNDATION. THE SAID CHECK WAS DEPOSITED IN THE TREASURY OF THE UNITED STATES IN ACCORDANCE WITH THE TERMS OF THE CITED 31 U.S.C. 484.

UNDER DATE OF DECEMBER 2, 1964, THE INSTITUTE MADE CLAIM AGAINST THE NATIONAL SCIENCE FOUNDATION FOR REFUND OF THE SUBJECT PAYMENT CITING IN JUSTIFICATION THEREOF OUR LETTER OF SEPTEMBER 30, 1964, B-152505, TO DR. LOGAN WILSON, PRESIDENT OF THE AMERICAN COUNCIL ON EDUCATION. THE FOUNDATION TRANSMITTED THE CLAIM TO OUR OFFICE FOR SETTLEMENT IN ACCORDANCE WITH THE TERMS OF 31 U.S.C. 71, AND OUR REGULATIONS ISSUED IN CONNECTION THEREWITH.

IN THE LETTER OF SEPTEMBER 30, 1964, WE HAD FOR CONSIDERATION THE TERMS OF SECTION 205 OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE APPROPRIATION ACT, 1965, APPROVED SEPTEMBER 19, 1964, PUB.L. 88-605, 78 STAT. 963, WHICH READS, AS FOLLOWS:

"NONE OF THE FUNDS CONTAINED IN THIS ACT SHALL BE USED FOR ANY ACTIVITY THE PURPOSE OF WHICH IS TO REQUIRE ANY RECIPIENT OF ANY PROJECT GRANT FOR RESEARCH, TRAINING, OR DEMONSTRATION MADE BY ANY OFFICER OR EMPLOYEE OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE TO PAY TO THE UNITED STATES ANY PORTION OF ANY INTEREST OR OTHER INCOME EARNED ON PAYMENTS OF SUCH GRANT MADE BEFORE JULY 1, 1964.'

WE INTERPRETED THIS STATUTE, IN THE LIGHT OF ITS LEGISLATIVE HISTORY, TO BE THE INTENT OF THE CONGRESS THAT COLLEGES AND UNIVERSITIES WOULD NOT BE REQUIRED TO REFUND TO THE UNITED STATES THE INTEREST OR OTHER INCOME EARNED ON FEDERAL GRANTS MADE TO THEM FOR RESEARCH, TRAINING, OR DEMONSTRATION PRIOR TO JULY 1, 1964. AND, WE CONCLUDED THAT EVEN THOUGH THE STATUTE APPLIED ONLY TO FUNDS CONTAINED IN THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE APPROPRIATION ACT, 1965, IT WOULD BE CONSISTENT WITH THE CONGRESSIONAL PURPOSE NOT TO TAKE ANY FURTHER ACTION TO COLLECT INTEREST OR OTHER INCOME FROM COLLEGES OR UNIVERSITIES, WITH REFERENCE TO FEDERAL GRANTS MADE BEFORE JULY 1, 1964, BY FEDERAL AGENCIES OTHER THAN THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE.

THUS, THE EFFECT OF THE TERMS OF SECTION 205 WAS DETERMINED BY OUR OFFICE TO RELIEVE COLLEGES AND UNIVERSITIES OF ANY LIABILITY TO PAY TO THE UNITED STATES ANY INTEREST OR OTHER INCOME THEY RECEIVED IN CONNECTION WITH CERTAIN GRANTS MADE TO THEM BY DEPARTMENTS AND AGENCIES OF THE GOVERNMENT BEFORE JULY 1, 1964. IN VIEW THEREOF AND SINCE THERE IS NOTHING IN THE SAID SECTION 205 EXPRESSLY OR BY IMPLICATION TO AUTHORIZE OR REQUIRE DEPARTMENTS AND AGENCIES TO MAKE REFUNDS TO COLLEGES AND UNIVERSITIES, ON ACCOUNT OF PAYMENTS OF INTEREST MADE BY THEM TO THE UNITED STATES IN DISCHARGE OF A VALID CLAIM THEREFOR, THE CLAIM OF THE GEORGIA INSTITUTE OF TECHNOLOGY ACCORDINGLY WAS DISALLOWED BY OUR OFFICE ON AUGUST 19, 1965.

IN YOUR LETTER OF SEPTEMBER 14, YOU REQUEST THAT WE RECONSIDER OUR SETTLEMENT ACTION AND REFUND THE SUM OF $42,949.50 TO THE GEORGIA INSTITUTE OF TECHNOLOGY. IN SUPPORT OF THE REQUEST YOU STATE THAT "IF IT WAS THE INTENT AND PURPOSE OF CONGRESS TO INSURE THAT COLLEGES AND UNIVERSITIES WOULD NOT BE REQUIRED TO REIMBURSE THE UNITED STATES FOR SUCH FUNDS, IT WOULD SEEM THAT IT WOULD ALSO BE THE INTENT OF CONGRESS TO REIMBURSE THOSE COLLEGES WHO IN GOOD FAITH REPAID WHAT THEY BELIEVED TO BE AN OBLIGATION.' YOU STATE FURTHER THAT THE REFUSAL OF THE SUBJECT CLAIM, IN EFFECT, PENALIZES A DILIGENT INSTITUTION WHILE GRANTING A BENEFIT TO THOSE WHO HAVE REFUSED TO PAY THEIR DEBTS.

THE CONTEXT OF SECTION 205, QUOTED ABOVE, INDICATES CLEARLY THAT ITS PROVISIONS PROHIBIT COLLECTION ACTIVITIES BY DEPARTMENTS AND AGENCIES OF THE GOVERNMENT WHICH WILL RECOVER ANY INTEREST OR OTHER INCOME RECEIVED BY COLLEGES AND UNIVERSITIES IN CONNECTION WITH FEDERAL GRANTS FOR RESEARCH, TRAINING, OR DEMONSTRATION MADE PRIOR TO JULY 1, 1964. THAT IS TO SAY, SUCH GRANTEES ARE RELIEVED OF THE LIABILITY TO PAY TO THE UNITED STATES ANY INTEREST OR OTHER INCOME EARNED ON GRANTS AWARDED BEFORE JULY 1, 1964.

THE PAYMENT OF $42,949.50 BY THE INSTITUTE TO THE NATIONAL SCIENCE FOUNDATION WAS MADE APPROXIMATELY ONE YEAR BEFORE THE LEGISLATION THAT CONTAINED SECTION 205 WAS CONSIDERED AND ENACTED INTO THE CITED PUB.L. 88- 605. SINCE THE INSTITUTE, AT THE TIME OF THIS PAYMENT, WAS OBLIGATED TO PAY THE UNITED STATES ANY INTEREST INCOME RECEIVED IN CONNECTION WITH GRANT FUNDS, THE PROPOSAL IN YOUR LETTER TO REFUND THE $42,949.50 TO THE INSTITUTE WOULD HAVE THE EFFECT OF WAIVING OR GIVING AWAY THE VESTED RIGHTS CREATED IN THE UNITED STATES UNDER A VALID GRANT AGREEMENT. THE ADOPTION OF SUCH ACTION APPEARS TO BE UNAUTHORIZED UNDER THE TERMS OF SECTION 205.

MOREOVER, THE FACT THAT THE SAID SECTION 205 RELIEVED GRANTEES OF THE LIABILITY TO PAY THE UNITED STATES ANY INTEREST OR OTHER INCOME EARNED ON GRANTS AWARDED BEFORE JULY 1, 1964, AFFORDS NO BASIS FOR THE VIEW SUGGESTED BY YOU THAT THE CONGRESS INTENDED ALSO, UNDER THAT SECTION, TO REIMBURSE THOSE COLLEGES WHO IN GOOD FAITH PAID WHAT THEY WERE OBLIGATED TO PAY. IF THE CONGRESS HAD SO DESIRED, IT EASILY COULD HAVE PROVIDED THE NECESSARY AUTHORITY THEREFOR.

ALSO BEARING ON THIS MATTER IS SECTION 3617, REVISED STATUTES, 31U.S.C. 484, WHICH PROVIDES THAT THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES SHALL BE PAID INTO THE TREASURY WITHOUT ABATEMENT OR DEDUCTION. THE COLLECTION AND DEPOSIT OF $42,949.50 INTO THE TREASURY MUST BE REGARDED AS HAVING BEEN MADE PROPERLY AND AS REQUIRED BY LAW. CONSEQUENTLY, AND IN VIEW OF THE PROVISIONS OF ARTICLE 1, SECTION 9, CLAUSE 7, CONSTITUTION OF THE UNITED STATES THAT "NO MONEY SHALL BE DRAWN FROM THE TREASURY, BUT IN CONSEQUENCE OF APPROPRIATIONS MADE BY LAW * * *" OF THE PROPOSED REFUND MAY NOT BE MADE IN THE ABSENCE OF SPECIFIC APPROPRIATION BY THE CONGRESS.

ACCORDINGLY, AFTER THOROUGH CONSIDERATION OF THE MATTER AND FOR THE REASONS STATED HEREIN, YOU ARE ADVISED THAT THERE IS NO BASIS UPON WHICH TO REVISE THE PREVIOUS ACTION TAKEN BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE WHICH DECLINED TO AUTHORIZE REFUND OF THE AMOUNT OF $42,949.50 TO THE GEORGIA INSTITUTE OF TECHNOLOGY, AND SUCH ACTION IS AFFIRMED.

WHILE, AS POINTED OUT IN YOUR LETTER, DENIAL OF THE REFUND IN QUESTION MAY GIVE RISE TO A SEEMING INEQUITY IN THAT THE INSTITUTION, AS A RESULT OF PAYMENT TO THE UNITED STATES OF THE INTEREST INCOME RECEIVED BY IT FROM FEDERAL GRANT FUNDS, IS IN A WORSE POSITION THAN THOSE GRANTEES WHO DELAYED IN REFUNDING INTEREST AND WHOSE DEBTS WERE RELIEVED BY SECTION 205, ANY ELEMENTS OF EQUITY THAT MAY BE PRESENT IN THIS CLAIM ARE MATTERS PRIMARILY FOR CONSIDERATION OF THE CONGRESS RATHER THAN BY OUR OFFICE.

WITH REFERENCE TO YOUR INQUIRY AS TO THE PROCEDURE AVAILABLE TO YOU IN APPEALING FROM OUR DECISION, YOU ARE ADVISED THAT THERE IS NO PROCEDURE PRESCRIBED BY LAW FOR APPEALING OUR DECISIONS. HOWEVER, WE INVITE YOUR ATTENTION TO THE PROVISIONS OF SECTION 1491 OF TITLE 28 OF THE U.S.C. CONCERNING THE JURISDICTION OF THE COURT OF CLAIMS WHERE ACTIONS MAY BE CONSIDERED DE NOVO.