B-158402, MAR. 11, 1966

B-158402: Mar 11, 1966

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THE LETTER STATES THAT THE ISSUANCES WERE MADE BY THE ILLINOIS STATE OFFICE OF THE SUPERINTENDENT OF PUBLIC INSTRUCTION UNDER AN AGREEMENT WITH YOUR DEPARTMENT FOR ISSUANCE OF FOODS TO SCHOOLS AND INSTITUTIONS WITHIN THE STATE OF ILLINOIS. THIS PROGRAM IS GOVERNED BY REGULATIONS CODIFIED UNDER PART 503 OF TITLE 6. CODE OF FEDERAL REGULATIONS (6 CFR 503) AND THESE REGULATIONS ARE EXPRESSLY MADE A PART OF THE AGREEMENT. IT IS FURTHER INDICATED THAT THE HOUSE OF CORRECTION ALSO RECEIVED FOOD DONATIONS UNDER SECTION 6 OF THE NATIONAL SCHOOL LUNCH ACT. THE LETTER STATES THAT THE VALUE OF SECTION 6 FOODS DONATED IS APPROXIMATELY $700 AND THAT. WHILE THE VALUE OF THE SECTIONS 32 AND 416 FOODS IS NOT READILY AVAILABLE.

B-158402, MAR. 11, 1966

TO SECRETARY OF AGRICULTURE:

BY LETTER OF JANUARY 21, 1966, THE HONORABLE GEORGE L. MEHREN, ASSISTANT SECRETARY OF AGRICULTURE, REQUESTED OUR CONCURRENCE IN A PROPOSAL TO CLOSE WITHOUT FURTHER ACTION A CASE INVOLVING THE ISSUANCE OF GOVERNMENT-DONATED FOODS TO THE HOUSE OF CORRECTION IN CHICAGO AND THE PSYCHIATRIC HOSPITAL OF THE STATE PENITENTIARY.

THE LETTER STATES THAT THE ISSUANCES WERE MADE BY THE ILLINOIS STATE OFFICE OF THE SUPERINTENDENT OF PUBLIC INSTRUCTION UNDER AN AGREEMENT WITH YOUR DEPARTMENT FOR ISSUANCE OF FOODS TO SCHOOLS AND INSTITUTIONS WITHIN THE STATE OF ILLINOIS. THIS PROGRAM IS GOVERNED BY REGULATIONS CODIFIED UNDER PART 503 OF TITLE 6, CODE OF FEDERAL REGULATIONS (6 CFR 503) AND THESE REGULATIONS ARE EXPRESSLY MADE A PART OF THE AGREEMENT. AN AUDIT CONDUCTED BY YOUR DEPARTMENT DISCLOSED THAT FOODS DONATED UNDER SECTION 32 OF PUBLIC LAW 320, 74TH CONGRESS (THE ACT OF AUGUST 24, 1935, CH. 641, 49 STAT. 774), AS AMENDED, 7 U.S.C. 612C, AND SECTION 416 OF THE AGRICULTURAL ACT OF 1949, APPROVED OCTOBER 31, 1949, CH. 792, 63 STAT. 1058, AS AMENDED, 7 U.S.C. 1431, HAD BEEN ISSUED TO THE PSYCHIATRIC HOSPITAL OF THE ILLINOIS STATE PENITENTIARY AND TO THE HOUSE OF CORRECTION OPERATED BY THE CITY OF CHICAGO. IT IS FURTHER INDICATED THAT THE HOUSE OF CORRECTION ALSO RECEIVED FOOD DONATIONS UNDER SECTION 6 OF THE NATIONAL SCHOOL LUNCH ACT, APPROVED JUNE 4, 1946, CH. 281, 60 STAT. 231, AS AMENDED, 42 U.S.C. 1755. THE LETTER STATES THAT THE VALUE OF SECTION 6 FOODS DONATED IS APPROXIMATELY $700 AND THAT, WHILE THE VALUE OF THE SECTIONS 32 AND 416 FOODS IS NOT READILY AVAILABLE, IT DOUBTLESS WOULD BE WELL IN EXCESS OF $700.

SECTION 503.3/G) OF TITLE 6, CODE OF FEDERAL REGULATIONS, DEFINES "INSTITUTIONS" AS FOLLOWS:

"/G) "INSTITUTIONS" MEANS (1) NONPENAL, NONEDUCATIONAL, PUBLIC (FEDERAL, STATE OR LOCAL) INSTITUTIONS, (2) NONPROFIT, TAX-EXEMPT, PRIVATE HOSPITALS, OR (3) OTHER NONPROFIT, NONEDUCATIONAL, TAX-EXEMPT, PRIVATE INSTITUTIONS ORGANIZED FOR CHARITABLE OR PUBLIC WELFARE PURPOSES, INCLUDING BUT NOT LIMITED TO, HOMES FOR THE AGED, ORPHANAGES (SIC), REFUGEE CAMPS, AND CHILD-CARE CENTERS. FOR PURPOSES OF THIS PARAGRAPH, TAX-EXEMPT SHALL MEAN EXEMPT FROM INCOME TAX UNDER THE INTERNAL REVENUE CODE, AS AMENDED, AND AN INSTITUTION SHALL BE CONSIDERED ,NONEDUCATIONAL" EVEN THOUGH EDUCATIONAL COURSES ARE GIVEN, WHERE SUCH COURSES ARE AN INCIDENT TO THE PRIMARY PURPOSE OF THE INSTITUTION.'

UNDER SUCH DEFINITION, PENAL INSTITUTIONS ARE NOT ELIGIBLE TO RECEIVE DONATED COMMODITIES.

IT IS STATED IN THE LETTER THAT, ALTHOUGH A FORMER OFFICIAL OF THE STATE AGENCY INTENDED TO OBTAIN AN OPINION AS TO THE ELIGIBILITY OF THE PSYCHIATRIC HOSPITAL FROM THE STATE ATTORNEY GENERAL AND FROM FEDERAL AUTHORITIES, HE DID NOT DO SO BEFORE APPROVING ISSUANCES. IT FURTHER APPEARS THAT THE OFFICIAL APPROVED ISSUANCES TO THE HOUSE OF CORRECTION AFTER VISITING THAT INSTITUTION, AGAIN WITHOUT OBTAINING AN OPINION AS TO ELIGIBILITY. AFTER A CHANGE IN STATE ADMINISTRATIONS, A NEW OFFICIAL REQUESTED AN OPINION FROM THE STATE ATTORNEY GENERAL, WHO DETERMINED THAT THE TWO INSTITUTIONS WERE INELIGIBLE UNDER 6 CFR 503.0/G), AND ISSUANCES WERE IMMEDIATELY DISCONTINUED. THE LETTER STATES THAT YOUR DEPARTMENT GENERALLY RELIES UPON THE DETERMINATION OF THE STATE ATTORNEY GENERAL AS TO WHETHER AN INSTITUTION IN HIS STATE IS ELIGIBLE TO RECEIVE COMMODITIES OR IS AN INELIGIBLE PENAL INSTITUTION.

IT IS STATED THAT THE STATE OFFICIAL WHO ORIGINALLY AUTHORIZED DISTRIBUTION TO THESE INSTITUTIONS MAY HAVE BEEN MISLED BY THE NAME OF THE HOUSE OF CORRECTION AND BY ITS REHABILITATION PROGRAMS, AS WELL AS BY THE FACT THAT IT HAD BEEN APPROVED TO RECEIVE COMMODITIES UNDER THE NATIONAL SCHOOL LUNCH PROGRAM. ALSO, IT IS EXPLAINED THAT THE PSYCHIATRIC HOSPITAL RECEIVES ELDERLY PEOPLE WHO HAVE BEEN FOUND WALKING IN THE STREETS AND HAVE BEEN TAKEN IN BY THE POLICE FOR DISORDERLY CONDUCT. IT IS CONTENDED THAT UNDER THE FACTS AVAILABLE TO YOUR DEPARTMENT CONCERNING THESE INSTITUTIONS IT IS POSSIBLE TO ARGUE THAT THEY ARE NOT PENAL INSTITUTIONS AND ARE ELIGIBLE TO RECEIVE COMMODITIES. HOWEVER, IT IS RECOGNIZED THAT THE OPINION OF THE STATE ATTORNEY GENERAL CONTROLS IN THIS INSTANCE AND TERMINATION OF THEIR PARTICIPATION IN THE PROGRAM WAS PROPER. IT IS FURTHER STATED THAT THERE IS NO EVIDENCE THAT THE ORIGINAL DECISION TO INCLUDE THESE INSTITUTIONS WAS NOT MADE IN GOOD FAITH OR WITH ANY ATTEMPT TO CIRCUMVENT THE REGULATIONS.

MR. MEHREN ADVISES THAT, IN THE OPINION OF YOUR DEPARTMENT, BASED ON THE CIRCUMSTANCES IN THIS CASE, THE STATUS OF THESE TWO INSTITUTIONS IS SUCH THAT A CLAIM FOR THE COMMODITIES DISTRIBUTED PRIOR TO THE STATE ATTORNEY GENERAL'S OPINION IS NOT WARRANTED, AND REQUESTS OUR CONCURRENCE IN THE PROPOSAL TO CLOSE THE CASE WITHOUT FURTHER ACTION.

6 CFR 503.6, WHICH SETS FORTH THE OBLIGATIONS OF DISTRIBUTING AGENCIES, SUCH AS THE ILLINOIS STATE OFFICE OF THE SUPERINTENDENT OF PUBLIC INSTRUCTION, PROVIDES IN PERTINENT PART AS FOLLOWS:

"/A) DETERMINATION OF ELIGIBILITY. DISTRIBUTING AGENCIES SHALL DETERMINE THAT RECIPIENT AGENCIES OR RECIPIENTS TO WHOM THEY DISTRIBUTE COMMODITIES ARE ELIGIBLE UNDER THIS PART, * * *

"/G) DISTRIBUTION. COMMODITIES SHALL BE DISTRIBUTED ONLY TO RECIPIENT AGENCIES AND RECIPIENTS ELIGIBLE TO RECEIVE THEM UNDER THIS PART * * *.

"/1) IMPROPER DISTRIBUTION OR LOSS OF OR DAMAGE TO COMMODITIES. IFA DISTRIBUTING AGENCY IMPROPERLY DISTRIBUTES OR USES ANY COMMODITY, * * * THE DISTRIBUTING AGENCY SHALL, AT THE DEPARTMENT'S OPTION, (1) REPLACE THE COMMODITY IN ITS DISTRIBUTION PROGRAM IN KIND, OR, IN THE CASE OF SECTION 6 COMMODITIES, WHERE REPLACEMENT IN KIND MAY NOT BE PRACTICABLE, WITH OTHER SIMILAR FOODS, OR (2) PAY TO THE DEPARTMENT THE VALUE OF THE COMMODITY AS DETERMINED BY THE DEPARTMENT. * * *"

THUS, THE REGULATIONS PLACE UPON DISTRIBUTING AGENCIES RESPONSIBILITY FOR DETERMINING THAT COMMODITIES ARE DISTRIBUTED ONLY TO ELIGIBLE RECIPIENTS, AND REQUIRE THAT SUCH AGENCIES EITHER REPLACE OR PAY FOR COMMODITIES IMPROPERLY DISTRIBUTED BY THEM. THESE REGULATIONS WERE ISSUED PURSUANT TO STATUTORY AUTHORITY AND HENCE ARE STATUTORY REGULATIONS AND, AS SUCH, ARE NOT TO BE WAIVED IN PARTICULAR INSTANCES. THERE IS NOTHING IN THE REGULATIONS AUTHORIZING THE WAIVER OF A DISTRIBUTING AGENCY'S RESPONSIBILITY FOR DISTRIBUTING COMMODITIES TO AN INELIGIBLE RECIPIENT MERELY BECAUSE THE DISTRIBUTING AGENCY MAY HAVE BEEN MISLED AND MADE SUCH DISTRIBUTION IN GOOD FAITH. IT IS PROBABLE THAT MOST DISTRIBUTIONS TO INELIGIBLE RECIPIENTS ARE MADE IN GOOD FAITH. WAIVING RESPONSIBILITY ON SUCH GROUNDS ALONE WOULD, FOR ALL PRACTICAL PURPOSES, COMPLETELY NEGATE AND DEFEAT THE INTENT OF THE REGULATION.

WHILE WE HAVE IN SEVERAL INSTANCES CONCURRED IN CLOSING CASES AGAINST DISTRIBUTING AGENCIES FOR IMPROPER DISTRIBUTION, SUCH CASES INVOLVED OTHER EXTENUATING FACTORS IN ADDITION TO GOOD FAITH. IN B 154868, AUGUST 25, 1964, WE CONCURRED IN THE PROPOSAL TO CLOSE WITHOUT ACTION A CASE INVOLVING THE DISTRIBUTION OF CERTAIN SECTION 32 COMMODITIES BY THE GOVERNMENT OF AMERICAN SAMOA TO THE FIJI ISLANDS (INELIGIBLE TO RECEIVE SUCH COMMODITIES) FOR DISASTER RELIEF. IN THAT CASE, CONSIDERATION WAS GIVEN TO THE EMERGENCY NATURE OF THE SITUATION WHICH REQUIRED IMMEDIATE SHIPMENT BEFORE RECEIPT OF ADVICE AS TO WHAT COMMODITIES WERE ELIGIBLE, THE FACT THAT THE COMMODITIES WERE INADVERTENTLY GROUPED WITH COMMODITIES WHICH WERE ELIGIBLE FOR SUCH DISTRIBUTION, AND THE FACT THAT THE NUMBER OF GOVERNMENT AGENCIES INVOLVED MADE RESPONSIBILITY FOR THE ERRONEOUS DISTRIBUTION DIFFICULT TO DETERMINE. IN B-151726, JULY 30, 1963, WE CONCURRED IN CLOSING A CASE AGAINST THE ALASKA DEPARTMENT OF ADMINISTRATION INVOLVING DISTRIBUTION OF CERTAIN FROZEN FOODS TO THE JESSE LEE HOME, AN INELIGIBLE RECIPIENT. THERE, THE DISTRIBUTING AGENCY, BECAUSE OF TERMINATION OF PARTICIPATION IN THE SCHOOL LUNCH PROGRAM BY THE SEWARD PUBLIC SCHOOLS, WAS FACED WITH THE ALTERNATIVE OF DESTROYING THE COMMODITIES OR TRANSFERRING THEM TO THE INELIGIBLE RECIPIENT, WHERE THEY WOULD BE CONSUMED BY CHILDREN ATTENDING THE SEWARD PUBLIC SCHOOLS.

NO SUCH EXTENUATING CIRCUMSTANCES APPEAR IN THE PRESENT CASE. HENCE, WE CANNOT CONCUR IN THE PROPOSAL TO CLOSE THE CASE WITHOUT FURTHER ACTION.