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B-194904 1 (1979-11-28)

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          GAO
          United States General Accounting Offke                        Office of
          Washington, DC 20548                                          General Counsel
                                                                        In Reply
                                                                        Refer to: 5-194904
                                                            November 28' 1979


           The Honorable Joseph R. Biden, Jr.
           United 'States Senate                                               _.: -
                                        %1:.4L ,j1'J 1 i  1i L at '-i.
           Dear Senator Biden:

                 T1his is in response to your request for our Office to review the
          I Ejegal,ity of certain actionstaken by the Rehabilitation Services  C!3
          Administrationj(RSA), Department of Health, Education, ard Welfare
          ,(HEW), with rTspeot to the funding of so-called minimum States under
          section 110(a) of the Rehabilitation Act of 1973, 29 U.S.,. § 730(a),
*           as amended by section 101(c) of the Rehabilitation, Comprehensive
            Services and Developmental Disabilities Amendrments of 1978, approved
            November 6, 1978, Pub. L. No. 95-602, 92 Stat, 2955.

                 Section l10(a)(3) of the Rehabilitation Act of 1973, at amended,
            reads as follows:

                      (3) The sum .if the payment to any State (other than
                 Guam, American Samca, the Virgin Islands,,, the Northern
                 Mariana Islands, and the Trust Territory of the Pacific
                 Islands) under this subsection for any fis'al year which
                 is less than one-third of 1 percent of the ,amountappro-
                 priated under sectil l100(b) (1), or $3,000,000, which-
                 ever is greater, shall be increased to that amount, the
                 total of the increase; thereby required being derived by
                 proportionately reducing the allotment to each of the
                 remaining such States under this subsection, but with            J
                 such adjustments as may be necessary to prevent the sum
                 of the allotments made under this subsection to any such
                 remaining State from be'ng thereby reduced to less than
                 that amount.
                     I
                 Although RSA took the poition initially that it would honor the
            $3,000,000 minimum provilion, and apparently allocated funds to ELinimum
            States, including Delaware, on' that basis in the first two quarters of
            the 1979 fiscal year, RSA subsequently advised State Rehabilitation
            Agencieu that it would not be able to fund the minimum States at the
            $3,000,000 level in fiscal 1979. Instead, RSA claimed that because the
            program was operating under a Continuing Resolution, approved October 18
            1979, Pub. L. No. 95-482, which limited funding for. this program in




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