B-164990, SEPT. 6, 1968

B-164990, SEPT. 6, 1968

TO MR. HARDING:

THIS IS IN REFERENCE TO GRANT NO. CG-1431, APPROVED JUNE 30, 1968, TO CONNECTICUT LAW REFORM, INC., IN THE AMOUNT OF $272,443. SECTIONS 222 (B), 230, 231, AND 232 OF TITLE II, AND SECTION 312 OF TITLE III OF THE ECONOMIC OPPORTUNITY ACT OF 1964, AS AMENDED BY PUB.L. 90-222, APPROVED DECEMBER 23, 1967, ARE CITED ON FORM CAP 14 AS THE GRANT AUTHORITY.

SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 68 STAT. 830, 31 U.S.C. 200, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"/A) AFTER THE DATE OF ENACTMENT HEREOF NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF --

"/5) A GRANT OR SUBSIDY PAYABLE (I) FROM APPROPRIATIONS MADE FOR PAYMENT OF OR CONTRIBUTIONS TOWARD, SUMS REQUIRED TO BE PAID IN SPECIFIC AMOUNTS FIXED BY LAW OR IN ACCORD WITH FORMULAE PRESCRIBED BY LAW, OR (II) PURSUANT TO AGREEMENT AUTHORIZED BY, OR PLANS APPROVED IN ACCORD WITH AND AUTHORIZED BY, LAW;

"/D) NO APPROPRIATION OR FUND WHICH IS LIMITED FOR OBLIGATION PURPOSES TO A DEFINITE PERIOD OF TIME SHALL BE AVAILABLE FOR EXPENDITURE AFTER THE EXPIRATION OF SUCH PERIOD EXCEPT FOR LIQUIDATION OF AMOUNTS OBLIGATED IN ACCORD WITH SUBSECTION (A) HEREOF; BUT NO SUCH APPROPRIATION OR FUND SHALL REMAIN AVAILABLE FOR EXPENDITURE FOR ANY PERIOD BEYOND THAT OTHERWISE AUTHORIZED BY LAW.'

INFORMATION DEVELOPED BY OUR OFFICE INDICATES THAT THE GRANTEE "CORPORATION" WAS NOT IN EXISTENCE EITHER DE FACTO OR DE JURE AT THE TIME OEO APPROVAL WAS GRANTED AND WHEN THE OBLIGATION WAS RECORDED AGAINST THE 1968 FISCAL YEAR APPROPRIATION.

SUBSECTION (D) OF SECTION 1311 PROVIDES THAT NO FISCAL YEAR APPROPRIATION SHALL BE AVAILABLE FOR EXPENDITURE AFTER THE EXPIRATION OF THE FISCAL YEAR FOR WHICH MADE EXCEPT FOR LIQUIDATION OF AMOUNTS OBLIGATED IN ACCORD WITH SUBSECTION (A). SUBSECTION (A) CONSTITUTES AN ABSOLUTE PROHIBITION AGAINST THE RECORDING OF ANY AMOUNT AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF TRANSACTIONS SET OUT IN ITEMS (1) THROUGH (8) THEREOF. ITEM 5, PERTAINING TO GRANTS REQUIRES, WITH RESPECT TO A TRANSACTION SUCH AS HERE INVOLVED "AN AGREEMENT AUTHORIZED BY, OR PLANS APPROVED IN ACCORD WITH AND AUTHORIZED BY, LAW.' ESSENTIAL ELEMENTS OF A GRANT AGREEMENT, AS IN A CONTRACT, ARE COMPETENT PARTIES AND A SUBJECT MATTER, A LEGAL CONSIDERATION, A MUTUALITY OF AGREEMENT AND OF OBLIGATION. THE REQUIREMENT OF AN AGREEMENT HAD NOT BEEN MET SINCE ONE OF THE PARTIES WAS NONEXISTENT. IN ADDITION IT DOES NOT APPEAR THAT PLANS HAD BEEN APPROVED IN ACCORD WITH LAW. SECTION 242 OF THE ECONOMIC OPPORTUNITY ACT, AS AMENDED, PROVIDES:

"-SEC. 242. IN CARRYING OUT THE PROVISIONS OF THIS TITLE, NO CONTRACT, AGREEMENT, GRANT, LOAN, OR OTHER ASSISTANCE SHALL BE MADE WITH, OR PROVIDED TO, ANY STATE OR LOCAL PUBLIC AGENCY OR ANY PRIVATE INSTITUTION OR ORGANIZATION FOR THE PURPOSE OF CARRYING OUT ANY PROGRAM, PROJECT, OR OTHER ACTIVITY WITHIN A STATE UNLESS A PLAN SETTING FORTH SUCH PROPOSED CONTRACT, AGREEMENT, GRANT, LOAN, OR OTHER ASSISTANCE HAS BEEN SUBMITTED TO THE GOVERNOR OF THE STATE, AND SUCH PLAN HAS NOT BEEN DISAPPROVED BY THE GOVERNOR WITHIN THIRTY DAYS OF SUCH SUBMISSION, OR, IF SO DISAPPROVED, HAS BEEN RECONSIDERED BY THE DIRECTOR AND FOUND BY HIM TO BE FULLY CONSISTENT WITH THE PROVISIONS AND IN FURTHERANCE OF THE PURPOSES OF THIS TITLE. THIS SECTION SHALL NOT, HOWEVER, APPLY TO CONTRACTS, AGREEMENTS, GRANTS, LOANS, OR OTHER ASSISTANCE TO ANY INSTITUTION OF HIGHER EDUCATION IN EXISTENCE ON THE DATE OF THE APPROVAL OF THIS ACT.-"

WE FOUND NO EVIDENCE THAT THE ABOVE REQUIREMENT HAD BEEN MET. HENCE, THE PROHIBITION OF SUBSECTION 1311 (A) OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, PRECLUDES RECORDING THE GRANT AS A VALID OBLIGATION AGAINST FISCAL YEAR 1968 FUNDS, AND ACTION SHOULD BE TAKEN BY YOUR OFFICE TO REMOVE THE OBLIGATION.