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B-196794 1 (1981-02-24)

handle is hein.gao/gaobadjdk0001 and id is 1 raw text is: .- 4 e- 'N DECISION FILE: B-196794 A/0O/IS7 THE COMPTROLLER ENERAL OF THE UNITED STATES WASHINGTON, 0.C. 20548 DATE: February 24, 1981 MATTER OF: Interest earned by State Subgrantees lInterpretation of § Intergovernmental Cooperation Act of 1968, 42 U.S.C. § 4213 (1976) that subgrantees of grants to States need not account for interest earned on sub- grant advance reconsidered at request of Director of OMB. Interpretation contained in 59 Comp. Gen. 218 (1980) and B-171019, October 16, 1973, reaffirmed. Ruling the other way would require the States to account for the interest earned by its grantees, a result which appears to be contrary to this provision. This is in response to the request of the Director of the Office of Management and Budget (0.B) that we reconsider our interpretation of the Intergovernmental Cooperation Act of 1968 contained in our decisions, 59 CT.p. Gen. 218 (1980) and B-171019, October 16, 1973. In these cases we interpreted § 203 of the Intergovernmental Cooperation Act of 1968, 42 U.S.C. § 4213 (1976) (§ 203) as permitting subgrantees of Federal grants to States to keep interest earned on State advances to the subgrantee. We have reviewed both of these decisions and, as explained below, we find no basis for revising our interpretation of § 203. Given the language of § 203 which says that States will not be held accountable for interest earned on advances of grant-in-aid funds, it is difficult to see how this Office could rule other than we have in the two questioned decisions. As more fully explained in these dci.sions, in order to obtain the interest earned by subcrantees it would be necessary to require the State, rather than the secondary recipients of the grant funds, to account for the interest. This would be contrary to the statute, since in such grants it is the States with which the Government has a relationship and to which it must look for relief. Accordingly, despite the fact that § 203 and its legislative history do not address the question of interest as it pertains to subgrantees, the conclusion that interest earned by subgrantees of States need DIGEST: I I q q 7.

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