90-538-73-50

343 (101) Holdrege-Axtell: Surf. shlds.

530

(1) Lincoln Airport Rd.: Interchange

Primary total.

URBAN PROJECTS

Urban total.

2,702, 732

761, 612

1,712, 920

228, 200

568

(5) Hershey Spur: Bridge.

297,000

1007

(1) Dix North: Grading culverts bridge gravel surf.

59,000

LIST OF PROJECTS PLANNED AND THAT WILL BE READY FOR OBLIGATION THROUGH JUNE 30, 1973-Continued

TOPICS total.

829, 491

19,910

809, 581

OFFICE OF ECONOMIC OPPORTUNITY,
EXECUTIVE OFFICE OF THE PRESIDENT,
Washington, D.C., January 29, 1973.

Subject: Termination of Section 221 Funding.

To: Board Chairman and Executive Directors, Community Action Agencies and Other Grantees Funded Under Section 221 of the Economic Opportunity Act.

This memorandum is issued in order to give formal notice of funding changes under Section 221 of the Economic Opportunity Act. Supplemental guidance will be provided shortly regarding programs funded by Regional Offices and OEO Headquarters under other Sections of the Act.

A summary of the provisions made for OEO programs in the President's budget for Fiscal Year 1974 is attached for your information.

Section 221 funds are available to OEO, as described below, for awarding Community Action Section 221 grants during the remainder of Fiscal Year 1973 (ending June 30, 1973). Grantees which are scheduled for refunding between now and June 30, 1973, and otherwise qualified for funding, may receive phaseout grants of up to six months.

The Fiscal Year 1974 budget does not provide funds for any Section 221 grants during the Fiscal Year beginning July 1, 1973. Grantees whose current funding expires after June 30, 1973, will not receive additional phase-out grants, and should start promptly to adjust their affairs so as to close down all activities supported with Section 221 funds prior to expenditure of currently available funds.

Under either funding situation, difficult problems will be faced by grantees. We desire to be as cooperative as possible with grantees in planning and carrying out phase-down activities.

Termination of Section 221 Funding

Your attention should be directed to the interests of program personnel and program beneficiaries, to provide such advance notice as is reasonably possible. Timing and foresight are the keys. Planning should begin at once to provide a smooth phase-out.

The remaining period of any current grant and any phase-out grant must be conducted with full compliance with OEO Instructions and in a manner consistent with sound fiscal and property management. OEO will not tolerate any departure from responsible management nor will it permit grantee conduct which might jeopardize an efficient close-down of activities.

Close-down procedures include the requirement of a final audit. Arrangements should be made now to provide for this in accordance with OEO audit requirements. (See OEO Instruction 6801-1 and Changes 1 and 2). Funds should be reserved sufficient to pay the costs of such final audit.

Income taxes and social security withholding must be paid. Officers and directors have special responsibilities to assure full payment of taxes and payroll deductions. It is vital also that grantees assure that their unemployment insurance coverage is current.

Personnel should generally be progressively reduced in force. Appropriate reserves should be made for payment of all accrued leave if payable in cash and for appropriate terminal pay provided by approved personnel policies. No increases in pay, leave or terminal pay rights or other fringe benefits shall be made without written approval of persons authorized by the Director of OEO.

Provision should be made for transfer, wherever appropriate and permissible, of authorized group insurance or other authorized fringe benefits to individual policies or in other ways for the protection of the employees' interests in the best possible manner. Reasonable assistance in finding other employment should be provided to employees who are to be terminated.

Property must be inventoried and disposed of in accordance with OEO property regulations. (See OEO Instruction 7001-01). The grantee should prepare and submit to OEO for approval a plan for the disposition of all property. Where authorized loans are outstanding, reasonable efforts should be made to liquidate them. Unliquidated loans should be reported to OEO with recommendations concerning appropriate action. The grantee's interest as creditor shall be transferred, when OEO so instructs, to an officer or agency designated by OEO as trustee to collect (or, when appropriate, to waive collection) such remaining outstanding loans and to pay over net balances collected to OEO.

Residual grant funds, including non-Federal share, and funds resulting from program income may be applied to the phase-out activity. This does not include interest earned by CAA's on deposits of grant funds prior to their employment in the program. Such interest must be returned to OEO by check made payable to the Treasurer of the United States. (See OEO Instruction 6806–03).

Profits, if any, resulting from authorized conduct of profitmaking activities and any capital investments must be accounted for and may also be applied to the phase-out activity. Economic development projects funded under Section 21 will be reported through the Regional offices to the Assistant Director for Operations for advice as to appropriate disposition.

Balances remaining, upon conclusion of the funding periods as described above. should be returned to the Controller of OEO by check made payable to OEO accompanied by an explanatory itemized statement.

Arrangements should be made for preservation of grantee records as required by OEO grant conditions and instructions. Further guidance will be provided in the near future on this.

Where the grantee does not remain in existence to carry out other activities, local law should be consulted as to the necessity or advisability of formal dissolution proceedings.

You will be informed of OEO personnel who will be assigned to carry out applicable OEO close-out procedures and to assist and guide you in complying with close-out requirements. Assistance on legal questions may be obtained from your own attorney. Regional Counsel and OEO Headquarters General Counsel will be available to furnish appropriate assistance. Regional and Headquarters Audit staffs and Controller's Office will be available to assist on fiscal matters. Regional Office and appropriate Headquarters personnel will be available to assist on real and personal property questions, on personnel questions and other phases of the close-out activities.

The actions described in this letter are being taken as a result of general policy decisions and are not based on circumstances related to particular grants or noncompliance with OEO directives. Procedures provided for refusal to refund on such ground (45 C.F.R. 1067.2) are not applicable. These actions do not terminate or curtail assistance prior to the time that such assistance is concluded by the terms and conditions of the grant. Procedures provided for suspension and termination (45 C.F.R. 1067.1) are also not applicable.

In the event of failure by a grantee to comply with grant requirements, however, or failure to use Federal funds affectively and properly, OEO may take take appropriate action in the case of the individual grantee in accordance with any applicable procedures for refusal to refund, suspension or termination, as the case may be.

Cessation of Section 221 funding rescinds your designation as a community action agency under the authority of Title II of the Economic Opportunity Act of 1964, as amended. Accordingly, you should promptly commence discussions with other Federal agencies from which you receive funding (other than Section 221 funding) under the Economic Opportunity Act in order to clarify your status as grantee.

Section 42 U.S.C. 2703 provides criminal sanctions for certain misconduct. The section reads:

"(a) Whoever, being an officer, director, agent, or employee of, or connected in any capacity with, any agency receiving financial assistance under the Economic Opportunity Act of 1964 embezzles, willfully misapplies, steals, or obtains by fraud any of the moneys, funds, assets, or property which are the subject of a grant or contract or assistance pursuant to the Economic Opportunity Act of 1964, shall be fined not more than $10,000 or imprisoned for not more than two years, or both; but if the amount so embezzled, misapplied, stolen, or obtained by fraud does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.

"(b) Whover, by threat of procuring dismissal of any person from employment or of refusal to employ or refusal to renew a contract of employment in connection with a grant or contract of assistance under the Economic Opportunity Act of 1964 induces any person to give up any money or thing of any value to any person (including such grantee agency), shall be fined not more than $1.000 or imprisoned not more than one year, or both."

OEO Regional Office staff and appropriate Headquarters personnel will be available for discussions with grantees to assist in achieving orderly close-out. OEO is currently preparing a check-list which can help grantees assure that ail essential matters are addressed. This will be supplied to you in the near future

along with a requirement that individual close-out plans be submitted for OEO review. REGIONAL DIRECTOR.

Enclosure.

OFFICE OF ECONOMIC OPPORTUNITY PROGRAMS

In view of the overall budgetary situation facing the President in fiscal 1974, a careful review of all Federal efforts has been undertaken. It is the desire of the Administration to return decision-making and the resources requisite to effective programing to elected officials at the local level. Enactment of an historic General Revenue Sharing bill has already resulted in $2.6 billion being distributed to State and local governments and $10.2 will be distributed in the remainder of FY 1973 and FY 1974. In addition, the Administration is developing for resubmission to Congress a number of broad Special Revenue Sharing proposals designed to replace cumbersome existing categorical programs. Pursuant to the President's desire to make government more accountable to elected officials and in accordance with the President's "New Federalism” proposals returning both responsibility and resources to States and localities, no funds will be provided to continue the Office of Economic Opportunity after June 30, 1973. Funding under Section 221 of the Economic Opportunity Act for the core Community Action activities will become a local option beginning in fiscal 1974, as will support for the Senior Opportunities and Services program and the State Economic Opportunity Offices. Senior Opportunities and Services program objectives will continue to be pursued Federally through the Administration on the Aging. Training and technical assistance previously afforded these programs will be discontinued. Other programs will be continued in fiscal 1974 under other auspices, as will certain research and demonstration efforts. New legislation to establish a Legal Services corporation independent of OEO will be transmitted to the Congress. Personnel slots associated with OEO programs which will be eligible for continuation by other agencies in fiscal 1974 will be shifted to those agencies along with appropriate support personnel currently located in other OEO offices. The following table lists the actual and current year funding for OEO programs and their disposition within the fiscal year 1974 Federal budget:

Following is a program-by-program discussion of the fiscal year 1974 program requests for former OEO programs, along with program plans for the remainder of fiscal year 1973. In some cases, fiscal year 1973 programing will be adjusted effective immediately in anticipation of the fiscal year 1974 program decisions. The concluding section of this presentation addresses overall employment ceilings for OEO for fiscal year 1973 and lists employment allocations of other Federal agencies in fiscal year 1974 for activities formerly associated with OEO.