[East-West Center Grant Costs]

An International Communication Agency (ICA) official asked for a decision and recommendation on three unresolved issues concerning a particular ICA-funded organization. The issues were whether: (1) the organization may keep interest on ICA funds advanced to it for a purpose other than that for which they were received; (2) the organization is entitled to keep overhead moneys received from other Federal programs if it used ICA funds to pay for those overhead costs; and (3) the Office of Management and Budget (OMB) cost principles for educational institutions apply to the organization in its accounting for ICA funds as well as those from other Federal programs. GAO held that: (1) grantees cannot take grant money prior to need for any use other than that contemplated by ICA, nor does ICA have the authority to permit such retention; (2) charging the ICA grant with any other grant's overhead costs results in double charging, and ICA should disallow and recover such amount; and (3) it is the responsibility of ICA to determine whether the organization is bound by OMB accounting principles. Further, by accepting the ICA grant, the organization is committed to accounting for ICA funds under the principles as adopted.