Obligational Practices of the Corporation for National and Community, B-300480, April 9, 2003

B-300480 Apr 09, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Your staff explained to us that your question arises in the context of your efforts to ensure that the Corporation is properly recording obligations of the Corporation for National and Community Service National Service Trust (Trust). Will require the Corporation to pay education benefits to qualified participants from the National Service Trust. We will provide a subsequent response addressing this request. BACKGROUND The Corporation for National and Community Service was created to help community needs in education. One of the three national service programs the Corporation oversees is AmeriCorps. Participants who earn the award have up to 7 years in which to use it. 42 U.S.C. The Corporation also is authorized to make grants for the purpose of assisting grant recipients in carrying out national service programs. 42 U.S.C. View Decision Obligational Practices of the Corporation for National and Community, B-300480, April 9, 2003 The Honorable Christopher Bond Chairman The Honorable Barbara Mikulski Ranking Minority Member Subcommittee on VA, HUD, and Independent Agencies Committee on Appropriations United States Senate This responds to your letter dated February 25, 2003. You requested that we determine whether the Corporation for National and Community Service (Corporation) incurs a legal liability for the award of national service educational benefits of AmeriCorps participants at the time it enters into a grant agreement authorizing a grantee to enroll a certain number of AmeriCorps participants, or at the time a participant enrolls in the AmeriCorps program. Subsequent to your letter, your staff explained to us that your question arises in the context of your efforts to ensure that the Corporation is properly recording obligations of the Corporation for National and Community Service National Service Trust (Trust). As we explain in further detail below, the Corporation incurs an obligation for education benefits when it enters into a grant agreement. At the time of grant award, the Corporation approves the grantee's enrollment of a specified number of new participants in the AmeriCorps program. By this action, the Corporation incurs a legal duty that once fully matured, by action of the grantee and participants outside the Corporation's control, will require the Corporation to pay education benefits to qualified participants from the National Service Trust. As the Corporation incurs an obligation for the education benefits, it must record the obligation against the budget authority available in the Trust. You also requested that we review the Corporation's request for a deficiency appropriation for the Trust. We will provide a subsequent response addressing this request. BACKGROUND The Corporation for National and Community Service was created to help community needs in education, the environment, and public safety, to expand educational opportunity by rewarding individuals who participate in national service, and to encourage citizens to engage in national service. National and Community Service Trust Act of 1993, Pub. L. No. 103-82, 107 Stat. 785, 42 U.S.C. Sec. 12501. One of the three national service programs the Corporation oversees is AmeriCorps. Participants in the AmeriCorps program who successfully complete a required term of service earn a national service educational award of up to $4,725 that can be used to pay for college, graduate school, an approved school-to-work program, or qualified student loans. 42 U.S.C. Sec. 12604(a); 45 C.F.R. Sec. 2527.10. Participants who earn the award have up to 7 years in which to use it. 42 U.S.C. Sec. 12602(d)(1). While the Corporation pays the education benefits directly from the Trust, 42 U.S.C. Sec. 12601(c), the Corporation also is authorized to make grants for the purpose of assisting grant recipients in carrying out national service programs. 42 U.S.C. Sec. 12571(a). The Corporation provides grant funds for program costs, including a stipend, and health and child care coverage. In its grants, the Corporation also approves enrollment of a specified number of new participants. See, e.g., AmeriCorps Grant Award to City Year, Inc., Aug. 3, 2000. /1/ Most of the grant funding from the Corporation for AmeriCorps programs goes to governor-appointed state service commissions, which award subgrants to nonprofit groups, who then enroll the AmeriCorps participants. Corporation for National and Community Service website, http://www.national service.org. The AmeriCorps program is funded through the Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act (VA-HUD Appropriations Act). Congress appropriates amounts in the VA-HUD Appropriations Act on a no-year basis to the National Service Trust. See, e.g., VA-HUD Appropriations Act, 2001, Pub. L. No. 106-377, 114 Stat.