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A-51604 1 (1981-08-25)

handle is hein.gao/gaobadjrc0001 and id is 1 raw text is: 0 7 THE COMPTROLLER GENERAL DECISION . OF THE UNITED STATES WASHINGTON. 0. C. 2054B FILE: A-51604 DATE: August 25, 1981 MATTER OF: Peimbursement to States of Food Stamp Program Administrative Costs DIGEST: 1974 Amendment to Food Stamp Act increased percentage of Federal reimbursement to States for administrative costs of program. Secretary of Agriculture issued regulations stating increased rate would become ef- fective for all costs incurred after October 1, 1974. Secretary may reimburse all States, whether account- ing for costs on cash or accrual basis, at rate effec- tive when obligations arose. The Commissioner of Human Resources, State of Texas, (joined by the Deputy Director, California Department of Social Services), has asked that we reconsider our decision, Reimbursement to States of Food Stamp Program Administrative Costs, A-51604, February 19, 1980. That case addressed the question of whether the Department of Agri- culture in reimbursing States for part of their administrative costs in carrying out the Food Stamp Program, should reimburse States using a cash basis method of accounting at the rate effective when the pay- ments were actually made by the State, or at the rate effective when the administrative costs were incurred, i.e., when a legal obligation to pay arose. Because the States did not have an opportunity to present their position when we first considered this matter, we agreed to reconsider. In our previous decision, A-51604, February 19, 1980, we concluded that Agriculture's decision to reimburse all States, regardless of whether they used a cash basis or accrual basis of accounting, at the rate in effect when the costs were incurred, is not inconsistent with either the statute or regulations. Thus, citing the well established legal principle that great deference be given to the interpretation of a statute by the agency charged with its administration and that the agency's position will only be overturned if it is found to be arbitrary and capricious, we saw no basis to challenge Agriculture's interpretation. The States argue, however, that a proper reading of the regulations suggests that States using a cash basis method of accounting should be reimbursed at the rate in effect on the date the administrative costs are actually paid. In reaching this conclusion, the States contend that section 271.2 (a) of the regulations, which provides for reimbursement at the rate in effect when the costs are incurred, must be read in conjunc- tion with several other sections of the regulations to determine just when costs are considered to be incurred for a cash basis State. e 0re e,

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