Recovery of Interest Earned on CSA Grant Funds

The Community Services Administration (CSA) requested a decision concerning whether it must recover interest earned by a hospital on certain CSA grant funds awarded the hospital to assist in the construction of a new hospital facility. GAO concluded that interest earned on grant funds prior to the application of those funds to grant purposes must be recovered since retention of interest prior to grant application is not authorized by law. However, interest earned after the funds were expended and applied to grant purposes could be retained in the grant program under the terms of the grant agreement.