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B-230735 1 (1988-07-20)

handle is hein.gao/gaobabizu0001 and id is 1 raw text is: of the Lnited Stts270 ' Ohinon.'DC. 20348 B-230735 DO NOT MAKE AVAILABLE TO PUBLIC READING . ' FOR 30 DAYS July 20, 1988 The Honorable Neal Smith House of Representatives Dear Mr. Smith: This is in response to your letter of March 4, 1988, requesting our opinion on whether Drake University may use income earned on an endowment trust, funded with appro- priated funds, as non-federal matching funds for federal grant applications as well as other legitimate purposes. In our view, the income from the endowment trust fund should be classified as non-federal funds and may be used for any ,,,,purpose consistent with the grant agreement and the purposes .for which the endowment trust was established. ESTABLISHMENT OF THE TRUST An act making supplemental appropriations for fiscal year ending September 30, 1985, a d for other purposes, Pub. L. No. 99-88, August 15, 1985, 9 Stat. 293, 305, contains an appropriation entitled: Payment to the Legal Services Corporation. This provision appropriated $4,000,000 for • the Legal Services Corporation (LSC) to make a grant to the Drake University School of Law in Des Moines, Iowa, to establish a clinical program supplementing Legal Services grantees in that area. Upon receipt of the grant, the governing body of Drake University was instructed to create an endowment fund trust, into which $3,000,000 of the grant was to be conveyed. The income from the $3,000,000 trust corpus was to be used exclusively to support the clinical program on a continuing basis. The trust is subject to an audit by this Office for the sole purpose of determining that all funds are properly accounted for and properly expended. The appropriation further provides that if the University elects to discontinue the clinical program, the corpus of the endowment trust shall revert to the Treasury of the United States and that such reversion shall be provided for in the acceptance document. The remaining $1,000,000 of the grant, not included in the trust, was to be used by the University for facilities, equipment, and other costs actually incurred in establishing the clinical program. t7 0 t*'

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