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B-130515-G.94 1 (1979-03-07)

handle is hein.gao/gaobadaif0001 and id is 1 raw text is: 




               COMPTROLLER GENERAL OF THE UNITED STATES
 .                 .    WASHINGTON. D.C. 20548




 B-130515 G. 94                         M



 The Honorable John J. Rhodes
House of Representatives

Dear Mr.  Rhodes:

   This responds to your request for our consideration of a problem
raised in a letter from Josephine V. Molina, of Guadalupe, Arizona,
one of your constituents. Her letter is being returned as you requested.

    VIs. Molina expressed concern about the proposed purchase of the
GO  Restaurant from the Guadalupe Organization, Inc., (GO) by the
Guadalupe Town  Council for $45, 000, utilizing Federal Revenue
Sharing funds. She alleges that approximately 4 to 7 years ago, an
old Army barracks was  remodeled as a low-priced restaurant for
senior citizens by a group of men who were paid under a GO training
program  that was federally funded. The GO Restaurant never
opened.  Ms. Molina asks:

    (1) Whether GO can sell the restaurant after using Federal
       funds to remodel it?

    (2) If Federal funds were used to remodel the barracks,
       whether the money GO  receives for the restaurant
       should be used to benefit the community?

    (3 Whether Federal Revenue  Sharing funds may be used
       to purchase the building and land without an appraisal?

    As you know, Guadalupe is a community located in a poverty area
near the cities of Tempe and Phoenix, Arizona. Guadalupe Organiza-
tion which is located in that community, was incorported in 1964. In
1965, it became the first community action agency grantee funded in
Arizona under Title II of the Economic Opportunity Act, 42 U. S. C.
§ 2782 (1970).

    While a substantial portion of GO's funding consisted of Office of
Economic  Opportunity (OEO) grant funds, GO had, in addition, ndn-
Federal sources of funding. A complete history of GO's grant rela-
tionship with the OEO through the 1971-72 program year is set forth in
a report to you entitled Certain Activities Of The Guadalupe Organiza-
tion, Inc., Guadalupe, Arizona (B-130515), dated September 21, 1972.
(For your- convenience, another copy is enclosed.) We noted that GO
used its own funds and borrowed money from outside sources in order


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