U.S. Department of Education's Use of Fiscal Year Appropriations to Award Multiple Year Grants

B-289801: Dec 30, 2002

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The Ranking Minority Members of the House Committee on Education and the Workforce and the House Committee on Appropriations asked for our opinion regarding the Department of Education's (Education) use of appropriations available for only one fiscal year to fund to grant awards for multiple years for the Gaining Early Awareness and Readiness for Undergraduate Program (GEAR UP) and the Early Childhood Educator Professional Development Program. This question raises the issue of whether the bona fide need rule prohibits award of multiyear grants with fiscal year money.

B-289801, U.S. Department of Education's Use of Fiscal Year Appropriations to Award Multiple Year Grants, December 30, 2002



B-289801





December 30, 2002

The Honorable George Miller
Ranking Minority Member
Committee on Education and the Workforce
House of Representatives

The Honorable David Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives

Subject: U.S. Department of Education's Use of Fiscal Year Appropriations to Award Multiple Year Grants

You asked for our opinion regarding the Department of Education's (Education) use of appropriations available for only one fiscal year to fund grant awards for multiple years for the Gaining Early Awareness and Readiness for Undergraduate Program (GEAR UP) and the Early Childhood Educator Professional Development Program. As you are aware, this question raises the issue of whether the bona fide need rule prohibits award of multiyear grants with fiscal year money.

For the reasons explained below, we conclude that (1) for grants, the principle of severability is irrelevant to a bona fide need determination, (2) a bona fide need analysis in the grant context focuses on whether the grants are made during the period of availability of the appropriation charged and further the authorized purposes of program legislation, (3) beginning in fiscal year 2002, Education's award of Early Childhood Educator program grants up to 4 years in duration is explicitly permitted by program authority and fulfills a bona fide need of the period for which the funds used are available, and (4) Education's award of 5-year GEAR UP grants during fiscal year 2001 and 2002 and 2-year Early Childhood Educator grants during fiscal year 2001 is in accordance with the program legislation and fulfills a bona fide need of the period for which the funds used are available.

BACKGROUND

Education establishes policy for, administers, and coordinates most federal assistance to education in the United States. One of the ways Education accomplishes its mission is by making discretionary and formula-based grants. Concerns about Education's use of fiscal year funds to award grants that could cover more than one year arose initially in the context of the Gaining Early Awareness and Readiness for Undergraduate Program (hereinafter GEAR UP). After conversations with your staff about this issue, your staff asked that we address the issue not only in the context of GEAR UP but also for other grant programs. This opinion addresses GEAR UP and the Early Childhood Educator Program.

GEAR UP is a discretionary grant program[1] authorized by Title IV of the Higher Education Act of 1965 (HEA), as amended, 20 U.S.C. 1070a –21 et seq. It seeks to increase the number of disadvantaged students that continue on to postsecondary education by providing early support services and assurances of financial assistance that enable students to prepare for and pursue a college education. The Early Childhood Educator Program, also a discretionary grant program, is authorized by Title II of the Elementary and Secondary Education Act of 1965 (ESEA), as amended, 20 U.S.C. 6651(e). Its goal is to enhance the school readiness of young children, particularly disadvantaged children, through grants of financial assistance to improve the knowledge and skills of early childhood educators who work in communities with high concentrations of children who live in poverty.[2]

Congress has financed both programs with fiscal year appropriations. The GEAR UP program is funded from Education's lump sum –Higher Education— appropriation. Pub. L. No. 107-116, 115 Stat. 2206 (2002); Pub. L. No. 106-554, Appendix A, 114 Stat. 2763A-38 (2000).[3] The Early Childhood Educator Program is funded from Education's
lump sum –School Improvement Programs— appropriation. Pub. L. 107-116, 115 Stat. 2202-03 (2002); Pub. L. No. 106-554, Appendix A, 114 Stat. 2763A-33-34 (2000).[4]

In the past, for GEAR UP, Education's practice was to award grants for one fiscal year at a time; that is, Education would impose a one-year term on the grantee's use of grant funds. Education, at its discretion, would award continuation grants for additional years, one year at a time for up to five years, out of appropriations of the fiscal year in which it made the continuation grant. In fiscal year 2001, Education changed its practice and began to award five-year GEAR UP grants, charging the full amount of the grant to its fiscal year 2001 appropriation. According to Appropriations Committee reports, this practice has resulted in funding GEAR UP grants in a manner different than Education had indicated in its budget justification for that fiscal year, and using up budget authority for GEAR UP grants more rapidly and for fewer grantees. See S. Rep. No. 107-84 at 329 (2001) and H. Rep. No. 107-229 at 164 (2001). For the Early Childhood Educator Program, Education reports that it awarded two-year grants in fiscal year 2001, the first year of grant competition under this program, with the full amount of the grant charged to that year's appropriation.

Pursuant to our standard practice, we asked Education for its views on its authority to make multiyear grants with fiscal year funding. Letter from Susan A. Poling, Associate General Counsel, GAO, to Brian W. Jones, General Counsel, U.S. Department of Education, February 28, 2002. Education responded that it had authority to issue multiyear grants with fiscal year funds because these two programs represent single nonseverable undertakings and are a bona fide need of the fiscal year appropriation. Letter from Brian W. Jones, General Counsel, U.S. Department of Education, to Susan A. Poling, Associate General Counsel, GAO, March 18, 2002.
ANALYSIS

The issue presented is whether Education can use appropriations available for only one fiscal year to fund multiyear grant awards for GEAR UP and the Early Childhood Education Program. To answer this question, we examine the bona fide need rule, the principle of severability in the grant context, the program legislation and applicable statutory language found in fiscal year 2001 and 2002 appropriations acts. We start our discussion with the bona fide need rule.

Bona Fide Need Rule



bona fide bona fide [5] [6] bona fide bona fide [7] See also


The Bona Fide Need Rule and the Principle of Severability

bona fide See e.g. bona fide

bona fide bona fide Id bona fide Id

bona fide
[8] Id

bona fide e.g Id Id bona fide bona fide

bona fide bona fide See also
See e.g. bona fide But see bona fide

Early Childhood Educator Program for Fiscal Year 2002



bona fide [9]



bona fide bona fide [10]

GEAR UP and Early Childhood Educator Program for Fiscal Year 2001

et seq



bona fide






[11] [12] bona fide

bona fide [13]



bona fide bona fide

http://www.gao.gov








[1]
[2]


[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12] for academic year 2001-2002.
[13]

Apr 16, 2014

Apr 15, 2014

Apr 14, 2014

Apr 10, 2014

Apr 9, 2014

Looking for more? Browse all our products here