B-224713, APR 29, 1987

APPROPRIATIONS/FINANCIAL MANAGEMENT - BUDGET PROCESS - FUNDING - LEGAL SERVICES DIGEST: THE LEGAL SERVICES CORPORATION'S FISCAL YEAR 1984 APPROPRIATION ACT (P.L. 98-166) REQUIRED THAT ALL LSC FUNDS MADE AVAILABLE TO BASIC FIELD PROGRAMS (GRANTEES) FOR THE GENERAL PROVISIONS OF LEGAL SERVICES TO THE POOR WOULD BE COMPUTED ON A CENSUS-BASED FORMULA, WHILE FUNDS AWARDED TO NON-FIELD PROGRAMS WOULD BE SUBJECT TO A MORE GENEROUS STRAIGHT PERCENTAGE INCREASE. SOLANO COUNTY LEGAL ASSISTANCE ARGUED UNSUCCESSFULLY THAT A LITIGATION COORDINATOR POSITION SHOULD BE FUNDED AS A NON-FIELD POSITION.

THE HONORABLE BARBARA BOXER, HOUSE OF REPRESENTATIVES:

THIS RESPONDS TO A JOINT LETTER FROM YOU AND REPRESENTATIVE VIC FAZIO DATED SEPTEMBER 12, 1986, REQUESTING A LEGAL OPINION ON WHETHER THE LEGAL SERVICES CORPORATION (LSC) HAS USED THE CORRECT FORMULA FOR THE PAST FEW YEARS TO FUND THE SOLANO COUNTY LEGAL ASSISTANCE (SCLA) OFFICE. ADDITION TO PROVIDING LEGAL SERVICES TO ELIGIBLE PERSONS IN SOLANO COUNTY, SCLA ADMINISTERS A PROGRAM THAT PROVIDES A LITIGATION COORDINATOR FOR SOLANO AND TWO NEIGHBORING COUNTIES SERVED BY TWO OTHER GRANTEES. ISSUE IS WHETHER THE LITIGATION COORDINATOR POSITION SHOULD BE FUNDED AS A SEPARATE GRANT OR INCLUDED AS A PART OF THE BASIC GRANT FOR SCLA. EXPLAINED BELOW, WE HAVE CONCLUDED THAT THE FORMULA APPLIED BY THE CORPORATION IN FUNDING THE LITIGATION COORDINATOR POSITION AS PART OF THE SCLA BASIC FIELD PROGRAM GRANT WAS PROPER.

BACKGROUND

THERE ARE LSC GRANTEES IN EACH OF THE CALIFORNIA COUNTIES OF NAPA, MARIN AND SOLANO. IN 1979, THE LSC REGIONAL OFFICE DECIDED THAT A LITIGATION COORDINATOR WAS NEEDED TO COORDINATE LITIGATION AMONG THE THREE GRANTEES AND AWARDED A ONE-TIME SPECIAL NEEDS GRANT TO THE MARIN COUNTY GRANTEE. IN 1980, THE REGIONAL OFFICE ANNUALIZED THE GRANT AND BY AGREEMENT AMONG THE PROGRAMS, SCLA WAS DESIGNATED TO ADMINISTER THE GRANT. HOWEVER, THE THREE PROGRAMS AGREED THAT THE LITIGATION COORDINATOR WAS TO BE "EMPLOYED JOINTLY." THE SEPARATE LITIGATION COORDINATOR FUNDING CONTINUED UNTIL FISCAL YEAR 1984, WHEN IT WAS DISCONTINUED AS A SEPARATE FUNDING ENTITY AND THE FUNDING FOR ALL BASIC FIELD PROGRAMS WAS COMPUTED ON A CENSUS- BASED FUNDING FORMULA MANDATED BY CONGRESS IN LSC'S 1984 FISCAL YEAR APPROPRIATION ACT. SCLA CONTENDS THAT THE LITIGATION COORDINATOR POSITION IS NOT A CENSUS-BASED POSITION, BECAUSE ITS FUNDING IS NOT BASED ON THE NUMBER OF ELIGIBLE CLIENTS IN THE GRANTEE'S GEOGRAPHICAL AREA. THEREFORE, SCLA ARGUES THAT THE POSITION'S FUNDING SHOULD BE SEPARATED OUT FROM THE FUNDING PROVIDED FOR THE CENSUS-BASED GRANT TO SCLA. ON THE OTHER HAND, LSC MAINTAINS THAT THE FISCAL YEAR 1984 AND SUBSEQUENT LSC APPROPRIATION ACTS REQUIRED IT TO FUND BASIC FIELD PROGRAMS SUCH AS SCLA ON A CENSUS BASED FORMULA AND DID NOT PERMIT IT TO CONTINUE THE LITIGATION COORDINATOR GRANT AS A SEPARATE FUNDING ENTITY.

LEGAL ANALYSIS

BEGINNING IN FISCAL YEAR 1984, THE CORPORATION'S APPROPRIATION ACT CHANGED THE WAY THAT VARIOUS LEGAL SERVICES PROGRAMS WERE FUNDED. /1/ THE ACT SET FORTH TWO METHODS THAT LSC WAS TO EMPLOY IN COMPUTING ANNUAL FUNDING FOR GRANTEES. IN FISCAL YEAR 1984, LSC WAS INSTRUCTED TO INCREASE THE TOTAL ANNUAL FUNDING FOR PROGRAMS IN THE SAME PROPORTION BY WHICH ITS FISCAL YEAR 1984 APPROPRIATION WAS INCREASED OVER ITS FISCAL YEAR 1983 APPROPRIATION, WHICH TURNED OUT TO BE 14.1 PERCENT. HOWEVER, WITH RESPECT TO PROGRAMS THAT HAD RECEIVED FUNDING DURING FY 1983 BASED ON THE NUMBER OF POOR PEOPLE WITHIN THE GRANTEE'S GEOGRAPHICAL AREA, LSC WAS INSTRUCTED TO COMPUTE THE INCREASE IN FISCAL YEAR 1984 FUNDING FOR SUCH PROGRAMS ON A FORMULA THAT PROVIDED A LOWER INCREASE IN FUNDING. THE GRANTEES COVERED BY THIS PROVISION WERE TO RECEIVE AT LEAST A 5 PERCENT INCREASE OVER FISCAL YEAR 1983 FUNDING, PLUS OTHER ADJUSTMENTS THAT WOULD INCREASE THE GRANTEES' FUNDING TO HIGHER LEVELS UNDER CERTAIN CIRCUMSTANCES.

IN DESCRIBING THE TWO DIFFERENT FUNDING METHODS, THE LEGISLATIVE HISTORY MAKES IT CLEAR THAT THE FIRST METHOD IS DIRECTED AT "NON-FIELD PROGRAMS" AND THE SECOND METHOD IS DIRECTED AT "FIELD," I.E., CENSUS BASED, PROGRAMS. NON-FIELD PROGRAMS GRANTEES RECEIVED THE 14.1 PERCENT INCREASE IN FUNDING OVER FISCAL YEAR 1984 FUNDING. FIELD PROGRAM GRANTEES, WHOSE FUNDING IS BASED ON THE NUMBER OF POOR PEOPLE WITHIN THEIR AREAS, WERE GIVEN VARIOUS PERCENTAGE INCREASES BASED ON THE FORMULA SET FORTH IN THE APPROPRIATION ACT.

THE CONGRESSIONAL INTENT BEHIND THE FUNDING FORMULA SET FORTH IN LSC'S APPROPRIATION WAS EXPLAINED IN DETAIL IN THE SECTION-BY-SECTION ANALYSIS CONTAINED IN SENATE REPORT 98-206, 98TH CONG., 1ST SESS. 47 48, AUGUST 2, 1983, ACCOMPANYING THE SENATE APPROPRIATION BILL, WHICH READS AS FOLLOWS:

"HOWEVER, THE COMMITTEE ADDED A PROVISION TO THIS LIMITATION WHICH IS INTENDED TO DEAL SPECIFICALLY WITH THE BASIC FIELD PROGRAMS, THOSE GRANTEES AND CONTRACTORS WHOSE FUNDING IS BASED IN WHOLE OR IN PART UPON THE NUMBER OF POOR PEOPLE DETERMINED BY THE BUREAU OF THE CENSUS TO BE WITHIN THE GRANTEE'S OR CONTRACTOR'S GEOGRAPHICAL AREA. *** * * * * *

"*** THE COMMITTEE INTENDS THAT THIS FORMULA APPLY TO ALL FUNDS RECEIVED BY THE BASIC FIELD PROGRAMS FOR THE GENERAL PROVISION OF LEGAL SERVICES TO THE POOR. THE FORMULA DOES NOT APPLY TO FUNDS RECEIVED FOR OTHER PURPOSES, SUCH AS THE SPECIAL FUNDS FOR MIGRANTS, THE SPECIAL FUNDS FOR NATIVE AMERICANS, STATE SUPPORT GRANTS, OR TO FUNDS GOING TO OTHER THAN BASIC FIELD PROGRAMS, ALL OF WHICH ARE COVERED BY THE MANDATORY REFUNDING PROVISION BEING CONTINUED FROM FISCAL YEAR 1983. ***"

THE ABOVE-QUOTED REPORT SUPPORTS THE VIEW THAT THE CENSUS-BASED FORMULA WAS INTENDED TO APPLY TO ALL FUNDS RECEIVED BY BASIC FIELD PROGRAMS FOR THE GENERAL PROVISION OF LEGAL SERVICES TO THE POOR AND NOT JUST TO FUNDS RECEIVED FOR THE PROVISION OF LEGAL SERVICES TO THE POOR LOCATED IN THE GRANTEES'S GEOGRAPHICAL AREA.

SCLA ARGUES THAT, FOR FUNDING PURPOSES, THE COORDINATOR POSITION SHOULD BE CONSIDERED AS A NON-FIELD PROGRAM. SCLA MAINTAINS THAT THE COORDINATOR PROVIDES SUPPORT SERVICES FOR THE THREE BASIC FIELD PROGRAMS IN THE THREE- COUNTY AREA. IT COORDINATES AND ASSISTS IN THE LITIGATION AND TRAINING EFFORTS OF THE LEGAL AID SOCIETY OF MARIN COUNTY, NAPA COUNTY LEGAL ASSISTANCE AGENCY, AND SOLANO COUNTY LEGAL ASSISTANCE. THE COORDINATOR COORDINATES FEDERAL, APPELLATE AND OTHER SIGNIFICANT LITIGATION OF THE THREE PROGRAMS, WORKS WITH FIELD ATTORNEYS IN A TEAM APPROACH, AND INSURES THAT THE WORK PRODUCTS OF EACH PROGRAM ARE SHARED WITH THE OTHERS. THE GRANTEES APPEAR TO CONCEDE THAT THE LITIGATION COORDINATOR IS INVOLVED IN THE GENERAL PROVISION OF LEGAL SERVICES TO THE POOR, THROUGH THE COORDINATION OF LITIGATION ON THEIR BEHALF IN THE THREE-COUNTY AREA. BECAUSE THESE SERVICES ARE PERFORMED FOR RESIDENTS OF ALL THREE COUNTIES, SLCA ARGUES THAT GRANT FUNDS TO SUPPORT THEM SHOULD NOT BE BASED ON SOLANO COUNTY CENSUS DATA. HENCE, IT IS SCLA'A POSITION THAT THE POSITION OF LITIGATION COORDINATOR SHOULD BE CONSIDERED AS A NON-FIELD PROGRAM FOR FUNDING PURPOSES.

LSC, ON THE OTHER HAND, HAS CONCLUDED THAT THE APPROPRIATION ACT AND ITS LEGISLATIVE HISTORY DO NOT PERMIT THE POSITION TO BE FUNDED AS A NON-FIELD PROGRAM. THE SENATE REPORT MAKES IT CLEAR THAT IF A FIELD PROGRAM SUCH AS THAT CONDUCTED BY SCLA RECEIVES ANY PART OF ITS GRANT BASED ON THE NUMBER OF POOR PEOPLE IN ITS GEOGRAPHICAL AREA, IT BECOMES A FIELD PROGRAM. ACCORDINGLY, ANY ACTIVITY THAT DIRECTLY SUPPORTS THAT PROGRAM, INCLUDING THE FUNDING FOR THE LITIGATION COORDINATOR POSITION, SHOULD BE COMPUTED ON THE CENSUS-BASED FORMULA. ALTHOUGH THE LITIGATION COORDINATOR MAY NOT ACTUALLY REPRESENT POOR PEOPLE IN COURT, HE DOES PROVIDE SUPPORT AND ASSISTANCE TO FIELD ATTORNEYS WHO DO REPRESENT POOR PEOPLE MUCH THE SAME AS THE CLERICAL STAFF AND MANAGEMENT OF THE THREE FIELD PROGRAMS PROVIDE SUPPORT FOR ATTORNEYS WHO REPRESENT ELIGIBLE CLIENTS. ACCORDINGLY, LSC HAS ADOPTED THE POSITION THAT THE CENSUS-BASED FORMULA MUST BE APPLIED TO ALL FUNDS RECEIVED BY SCLA FOR THE GENERAL PROVISION OF LEGAL SERVICES TO THE POOR, INCLUDING THE FUNDS FOR THE COORDINATOR POSITION.

A REVIEWING AUTHORITY WILL AFFORD GREAT WEIGHT TO ADMINISTRATIVE DECISIONS PROPERLY RENDERED BY AGENCIES VESTED WITH AUTHORITY TO ACT ON SUCH MATTERS, SUCH AS LSC IN THIS CASE, AND WILL NOT SET ASIDE THE DECISION UNLESS IT IS ARBITRARY, CAPRICIOUS, AND ABUSE OF DISCRETION OR OTHERWISE NOT IN ACCORDANCE WITH LAW. GLASS V. UNITED STATES, 506 F.2D 379 (1974). LSC HAS CONSTRUED ITS 1984 APPROPRIATION ACT AND CONCLUDED THAT THE LITIGAITON COORDINATOR POSITION SHOULD BE FUNDED AS A PART OF SCLA'S BASIC GRANT AND THEREFORE SUBJECT TO THE FORMULA PROVIDING THE LESSOR INCREASE. WHILE WE UNDERSTAND SCLA'S ARGUMENT THAT THE POSITION SERVES THE THREE-COUNTY AREA, WE CANNOT SAY THAT LSC'S DETERMINATION REGARDING THE FUNDING OF THE POSITION IS UNREASONABLE.

UNDER THE CENSUS-BASED FORMULA FOR FISCAL YEAR 1984, LSC DETERMINED THAT SCLA WAS ENTITLED TO RECEIVE MINIMUM FUNDING OF $144,854. HOWEVER, LSC AWARDED SCLA $171,829 EXCEEDING THE MINIMUM REQUIREMENT FOR THE FORMULA BY $26,975. WE ARE NOT AWARE IF THIS EXTRA AMOUNT WAS MADE AVAILABLE BECAUSE OF THE LITIGATION COORDINATOR POSITION, BUT THESE FUNDS CERTAINLY ARE AVAILABLE FOR THIS PURPOSE. OVERALL, LSC INCREASED SCLA'S FISCAL YEAR 1984 BASIC PROGRAM GRANT BY 8.2 PERCENT. LSC'S APPROPRIATION ACT FOR FISCAL YEAR 1985 INCORPORATED THE FORMULA SET FORTH IN THE FISCAL YEAR 1984 APPROPRIATION ACT. SEE PUB.L. NO. 84 411, AUGUST 30, 1984, 98 STAT. 1545. LSC WAS GUIDED BY THIS FORMULA IN FUNDING GRANTEES IN FISCAL YEAR 1986. THEREFORE, SCLA'S FUNDING FOR THOSE YEARS WAS HANDLED IN THE SAME MANNER AS EXPLAINED ABOVE.

IN SUMMARY, LSC WAS REQUIRED BY THE PROVISIONS OF ITS FISCAL YEAR 1984 APPROPRIATION ACT TO DECIDE IF THE LITIGATION COORDINATOR POSITION WAS TO BE FUNDED AS AN INTEGRAL PART OF SCLA'S BASIC FIELD PROGRAM FUNDING. THE TERMS AND CONDITIONS OF THE APPROPRIATION ACT AS EXPLAINED BY THE LEGISLATIVE HISTORY EXPRESSLY PROHIBIT LSC FROM CONSIDERING THE POSITION'S FUNDING AS IF IT WERE A NON-FIELD PROGRAM IF IT WAS PART OF THE BASIC FIELD PROGRAM, AS SCLA URGES IT TO DO. WE ARE COMPELLED TO DEFER TO LSC'S DETERMINATION THAT THE COORDINATOR'S POSITION IS PART OF THE BASIC FIELD PROGRAM. THIS IS A REASONABLE CONCLUSION DESPITE THE CONSIDERABLE MERIT OF THE SCLA ARGUMENT. ACCORDINGLY, WE BELIEVE LSC HAS COMPLIED WITH THE APPROPRIATION ACT PROVISIONS IN FUNDING THE SCLA WITH REGARD TO THE POSITION. WHILE UNDER LSC'S DETERMINATION THAT THE LITIGATION COORDINATION POSITION FUNDING MUST COME OUT OF SCLA'S BASIC GRANT, WE RECOGNIZE THAT THE LITIGATION COORDINATOR'S SERVICES ALSO BENEFIT PERSONS OUTSIDE SOLANO COUNTY. WE WOULD, ACCORDINGLY, HAVE NO OBJECTION TO LSC INCREASING THE BASIC GRANT, ON A RETROACTIVE BASIS IF NECESSARY, TO PROVIDE ADDITIONAL FUNDS FOR THE POSITION. AS AN ALTERNATIVE, LSC MIGHT CONSIDER AWARDING A SUPPLEMENTARY GRANT TO NAPA AND MARIN COUNTIES BASED ON THE APPROPRIATE CENSUS FIGURES FOR EACH COUNTY TO ENABLE THEM TO CONTRIBUTE THEIR RESPECTIVE SHARES TO THE COSTS OF THE LITIGATION COORDINATOR POSITION, SINCE THE COORDINATOR SERVES ALL THREE COUNTIES.

UNLESS YOU PUBLICLY ANNOUNCE ITS CONTENTS EARLIER, WE PLAN NO FURTHER DISTRIBUTION OF THIS OPINION UNTIL 30 DAYS FROM THE DATE OF ISSUANCE. THAT TIME, WE WILL SEND COPIES TO INTERESTED PARTIES AND MAKE COPIES AVAILABLE TO OTHERS ON REQUEST.

/1/ A SPECIFIC FUNDING FORMULA WAS SET FORTH IN THE FISCAL YEAR 1984 APPROPRIATIONS ACT, PUB.L. NO. 98-166, NOVEMBER 28, 1983, 97 STAT. 1088, AND ALSO INCLUDED IN THE FISCAL YEAR 1985 APPROPRIATIONS ACT, PUB.L. NO. 98-411, AUGUST 30, 1984, 98 STAT. 1563. ALTHOUGH THE FUNDING FORMULA WAS NOT INCLUDED IN THE FISCAL YEAR 1986 APPROPRIATION ACT, PUB.L. NO. 99-180, DECEMBER 13, 1985, 99 STAT. 1162, LSC CONTINUED TO BE GUIDED BY THE FORMULA IN THE FUNDING OF ITS PROGRAMS. HOWEVER, THE ISSUE WE HAVE BEEN REQUESTED TO DECIDE IS WHETHER LSC PROPERLY IMPLEMENTED THE FISCAL YEAR 1984 APPROPRIATIONS ACT FORMULA WITH REGARD TO FUNDING THE LITIGATION COORDINATOR POSITION.