Grant Funds to Eisenhower College

Published by the Government Accountability Office on 1977-03-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          DOCUBENT BESUSE
00143 - [A1051839] (Restricted)
[Grant Funds to BEisenhower College]. GGD-77-47; B-114877. Barch
30, 1977. 3 pp.
Report to RBep. Henry S. Reuss, Chairman, Bouse Committee on
Banking, Finance and Urban Affairs; by Elmer 3. Staats,
comptrcller General.
Issue Area: Bducation, Training, a&4 BEployment Programs (1100).
contact: General Government Div.
Budget Function: General Government: Cther Graneral Governaent
organization Concerned: Department of the reasuory; Eisenhower
    College, Seneca Falls, IT.
Congressional Relevance: House Committee on Banking,   ,nance and
    Urban Affairs.
Authority: Bank Holding Act Aw adnents of 1S70 (f.L. 93-041).
    Suoplemental Appropriations act of 1975. Treasury, Postal
    Service, and Genbcal Government Appropriation Act.
           Bisenowver College was origfinally financed by the lover
of either of $10 millio; .rom the U.S. Treasury or one tenth of
all aoneys from the salt of '1 Eisenhower proof c.ins. A 1975
supplamental Appropriatiors Act appropriated $9 vi'lion, and a
 1976 Act appropriated $i million. As of June 30, 19MC: the
col'dge received $8. rmillion, which the college was free to use
as it deemed appropriate.    Findings/Conclusions: In a 1975
dA'iision, the GAO determined that the approfriations to
Tisenhower College based on percentages from the sale of SI
proof coins must be construed as having a meaningful effect. The
college was expecting an additional $600,000 based on the
difference between its share of the appropriation and the amount
received. It was reported that the $600,000 would not be
available because of insufficient Eisenhower dollar sales, but
Treasury decided that sales of about 2.3 million bicentennial
proof sets were sofficient to fully fund the grant. As with
buliness ventures, the ability of the college to be
self-sr porting will depend on the demand for its product. The
college recognizes the need for a larger enrollment and is
recruiting new students. Applicationj for the 1977-78 school
year are up about 75S from the previous year. (RAS)
                   CMPTROLLR @49rNA   lOp Twe u~fl'D E1TAI

                            0tIMlCTEO - -- t to be released outside the Oeeral
       ~~L-14877              L~A£ceoutmt, Office except on the basi of specall pproval
                            by the Office of Ceonresaleal IelatheW%
The Honorable Henry S. Reuss                                   MAf   30 7J77
Chairman, Committee on Banking,
  Finance and Urban Affairs
House of Representatives
Dear Mr.   Chairm.n:
     As requested in your November 9, 1976, letter, we have
looked into the questions'raised by Congresswoman Sullivan
concerning Federal grants to Eisenhower College.
     As the Congresswoman indicated, many of her comments
were based on data we supplied at her request in our Octo-
ber 29, 1976, report.  Congresswoman Sullivan's concerns
can be grouped into four broad categories:   (1) how the
college spent the funds and if they were spent according to
congressional intent, (2) why funds were given to the college
based on sales of bicentennial proof sets when the authoriz-
ing law specified that the basis would be sales of single
Eisenhower proof dollars, (3) will thi $600,000 in unexpended
but authorized grant funds be given to the college, and (4)
can the college continue without additional funding from the
       As- you know, Public Law 93-441 (Oct. 11, 1974) amended
the Bank Holding Act Amendments of 1970 and authorized the
Secretary of the Treasury to transfer to the college the
 clower of either $10 million or one-tenth of all moneys from
zhe sale of $1 Eisenhower proof coins. The act provided for
the college to transfer 10 percent of funds received to the
Samuel-Rayburn Library. The Supplemental Appropriations Act
of 1975 appropriated $9 million, and the Treasury, Postal Serv-
ice, and General Government Appropriations Act of 1976 appro-
priated $1 million.
     As we stated in our report to Congresswoman Sullivan,
the college, as of June 30, 1976. received $8.4 million of
the $9 million author i:: i by Public Law 93-441. In request-
ing the grant the college presented a plan indicating that
the funds would be used mostly for capital improvements;
however, the law did not specify or establish guidelines
concerning how the funds were to be spent. Therefore, the
college was free to use the funds as it deemed appropriate.


     we reported that the college used the 58.4 million as
follows: $3.5 million for investments, S2.3 million for
operating expenses, and $2.6 million for capital projects.
The $2.3 million for operating expenses and $600,000 used
for capital projects were intermingled with other funds.
Therefore, identity of the funds has been lost and a break-
down of how thoy were spent in more detail than we reported
is not available.
     Congresswoman Sullivan questioned the propriety of
the grants being based on sales of the bicentennial prr of
sets when the law specified that the grants were to be based
on sales of the single Eisenhower proof dollar. The bicenten-
nial set consisted of three coins including an Eisenhower
proof dollar. This dollar has a bicentennial theme Cesign
on the reverse in place of the original Apollo 11 design.
     Because of the change in designof the Eisenhower proof
dollar for 1975 and because the dollar would only be sold in
the bicentennial set, the Treasury Department requested the
Comptroller General to determine whether the bicentennial set
qualified under the law as a bas.s for giving funds to the
     In a November 11, 1975, decision (B-114877), we said
that the 1976 appropriation to Eisenhower College based on
percentages of proceeds from the sale of $1 proof coins bear-
ing the Eisenhower likeness must be construed as having mean-
ingful effect. Since the only proceeds during the availability
period of this appropriation were from sales of the $1 proof
coins taaring the bicentennial design on the reverse side rather
than the Apollo 11 design originally provided for in Public
Law 93-441, such proceeds may be used for payments to the
     As of June 30, 1976, the college had received $8.4 mil-
lion--$7.5 million in fiscal year 1975 and $900,000 in fiscal
year 1976. The first amount was based on the sales of the
single Eisenhower proof dollar: the latter on sales of the
bicentennial set. The college was expecting an additional
$600,000 based on the difference between its share ($8.1 ;'1-
lion) of the 1975 appropriation and the amount received
($7.5 million).

     We reported to Congresswoman Sulliven that the remaining
$600,000 would not be given to the college because the Treasury
reported insufficient Eisenhower dollar sales in fiscal year
1975, and although sales since then provided adequate funds
to cover the difference between the amount appropriated and
the amount paid, the 1975 appropriation authority had expired.
We also told this to the college. The college requested Trea-
sury to review its records to verify that the funds could not
be paid.
     Treasury reviewed its records and found that the Bureau
of the Mint, as of June 30, 197)5, had accepted payments for
about 2.3 million bicentennial proof sets, but because the
sets were not delivered until fiscal 1976, the proceeds f:om
the sales were not recorded as available for funding the
Eisenhower College grant. Treasury decided that these sales
belonged in fiscal- year 1975 and were sufficient to fully
fund the grant. As a result, Treasury paid the college the
$600,00 remaining in the 1975 appropriation.
     We reviewed Treasury's records and found that it ade-
quately supported tnis decision.
     Another concern expressed by Congresswoman Sullivan waes
whether the college will survive without the Government pro-
vidlng further large grants .-.
                              her than those normally avail-..
able to colleges. As with business ventures, the ability of
the college to be self-supporting will depend on the demand
for its product. There seems little doubt that the college
must boost enrollment. The college recognizes this and is
recruiting new students. It reports that applications for
the 1977-78 schcol year are up about 75 percent from t1e
previous year.
           *        *            *      *           0

     In accordance with your instructions, we have not ob-
tained Treasury's comments on this report.
                             Sin     ly yours

                             Comptroller General
                             of the United States