GAB Decision 001
March 7, 1974 University of Texas Medical School at San Antonio; Docket
No. 4; Grant No. 09-P-56107/6-02 under Section 1110, Social Security Act
Dukes, David; VanOrman, William Malone, Thomas
This is an appeal pursuant to 45 CFR Part 16 from the action of the
Social and Rehabilitation Service on June 29, 1973, in reducing the
second year funding of a grant to Appellant for a Social Welfare
Regional Research Institute by an amount equal to the carry-over from
the first year funding of that grant. This decision is made on the
basis of the documents submitted to the Board. The undersigned members
of the Grant Appeals Board have been designated as a panel of three for
the disposition of the instant case.
BACKGROUND
The initial grant to the University of Texas Medical School at San
Antonio was funded by Region VI in Dallas on June 1, 1972, in the amount
of $247,340 for the Regional Research Institute (RRI) to be operated in
conjunction with the School of Social Work, University of Texas at
Austin, and for a study of the impact of Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) Services for eligible children under
Title XIX of the Social Security Act. (Exhibit #3, Grantee's
Application for Appeal)
Later during the first-year funding period, it became apparent that
there would be a fairly substantial carry-over from the first year of
operation in relation to the budget for the RRI. (Exhibit #3) The
Regioal Office denied, however, certain requests for changes in the
project budget because more adequate use of the funds could be made if
they were carried over into the next budget year. (Exhibit #1,
Memorandum from the Acting Regional Commissioner, SRS, to the Associate
Administrator for Management, SRS, dated October 15, 1973) At the
request of the SRS Regional Office, Appellant made an application for a
continuation grant for the RRI for $100,000, the recommended level
originally contemplated for the support of the RRI for the second year.
(Exhibit #3, Attachment #3) In that applicatioon, the University of
Texas proposed to share in the costs to the minimum extent of 5 percent
of the total cost.
FACTS
In reply to a clarification of the funding status (Exhibit #1),
particularly in regard to the 1972 carry-over funds, Appellant submitted
a revised application for a project continuation grant for the year
ending May 31, 1974, in the amount of $155,229, which included $55,229
in carry-over funds. (Exhibit #3, Attachement #5) On or about June 10,
1973, Appellant received from the Regional Commissioner a Notice of
Grant Awarded dated June 6, for the budget period beginning June 9 in
the amount of $155,229, including the unobligated balance from the prior
budget period. (Exhibit #3, Attachment #6) The Appellant had been
previously notified by a letter dated October 16, 1972, from William C.
Pembleton, Chief, Research and Demonstration Project Grants Branch,
Division of Project Grants Administration, SRS, that authority over
grants for the RRI had been delegated to the SRS Regional Commissioner.
(Exhibit #5) This authority had been delegated by memorandum of July 17,
1972, signed by James F. Garrett, Assistant Administrator, ORD.
(Exhibit #6) Subsequently, a revised Notice of Grant Awarded dated June
29 was issued for the same period and with a total budget of $100,000,
showing a decrease of new funds to $44,771 from the originally projected
project budget of $100,000, the remainder being made up by application
of the prior unobligated balance. (Exhibit #3, Attachment #8) This
constituted a reduction of $55,229 from the earlier Notice of Grant
Awarded. That action is the subject of this appeal. The document
stated: "Total budget is decreased to $100,000 to comply with FY 1973
budgetary restrictions." Still later the original project grant for the
period June 1, 1972 to May 31, 1973, was reduced by $147,340 to $100,000
to separate the EPSDT Evaluation of Impact Study award from the Social
Welfare Regional Research Institute award. At the same time, a separate
award (Grant No. 18-P-57603/6-01) in that amount of $147,340 was made
for the EPSDT Program Evaluation and Impact Study, and the end of the
original budget period extended from May 31, 1973 to June 30, 1973.
ARGUMENTS
The Appellant contends that the decision reducing the RRI's second
year request by $55,229 constituted a "partial voidance" of that grant
and requests a reversal of that action on the basis that (1) the loss of
the $55,229 will require it to void personnel commitments made on the
basis of the earlier award (Exhibit #3, Attachment #10), (2) such a loss
will cause a substantial reduction in the momentum gained by the
Institute during its first year, and (3) the reduction of funds places
an equal strain upon that part of the Institute work conducted at the
School of Social Work at Austin, particularly since the reversal was
made retroactive after costs were incurred and operating plans were
implemented. (Exhibit #3)
The Division of Project Grants Administration, SRS, contends that the
original action taken constituted a basic mistake resulting from a
misunderstanding as to the allowed use of unexpended carry-over funds in
the light of the restraints placed on SRS's overall R&D budget.
(Exhibit #2, Memorandum of October 17, 1973, from the Director, Division
of Project Grants Administration, to the Executive Secretary, Grant
Appeals Board) Moreover $21,981 was later restored to the EPSDT program
so that the total for the two grants in 1973 is only $14,101 less than
the combined funding level in 1972. The Grant Appeals Panel notes,
however, that while $21,981 was restored, the grant was extended by an
additional month.
DISCUSSION
The reduction in the RRI funding was not based on any failure of the
Appellant to comply with the terms and conditions of the grant. Rather,
it was based upon SRS considerations. Appellant and the University of
Texas at Austin were entitled to rely upon the original continuation
grant, which was made by the Office having the authority to make such a
grant. Moreover, that action was consistent with prior action by SRS in
denying requests for budget changes during the initial budget year
because more adequate use of the funds could be made if they were
carried over into the next budget year. Also, the commitments made by
Appellant involved commitments of its own funds made in reliance upon
the original continuation award. (Exhibit 3, Attachment #10, letter of
July 11, 1973 to Dr. Henry Martin from Charles W. Laughton) Finally, the
original continuation grant was by its term made subject SRS Policies
applicable to Research Grants. Section IV-C of those Policies specify
that a grant may be terminated for failure of the grantee to "comply
with the terms and conditions of the grant; when sufficient funding for
continued support is unavailable due to budget or other fiscal
considerations; or when continued funding would be inappropriate
because of restructured program objectives or realigned program
priorities." (Exhibit #9, DHEW Publication (SRS) 72-04001 dated July
1972) The decrease in the award merely cited FY 1973 budgetary
restrictions relating to the use of carry-over funds without alleging
any unavailability of funds; no reference was made therein to
restructured program objectives or realigned program priorities.
The fact that the grant award for the EPSDT was later increased by
$21,981 does not alter the fact that Appellant made commitments under
its RRI budget on the basis of a grant of $155,229.
DECISION
The appeal is allowed in full, and $55,229 shall be restored to grant
09-P-56107/6-02.
OCTOBER 04, 1983