Grants Legal Issues Grab Headlines

And grants professionals should read them.

If you’ve followed me and Shane via this blog and eClips, you’ve already read, “grants are policy tools,” in some form or the other. The Federal government uses grants to drive policy goals, objectives, and outcomes. Policies change with Administrations.

And Congresses.

I often am so focused on the activities of the Executive Branch, its activities, and its interactions with grantees that I block out an essential part of every single Federal financial assistance – Congressional authorization. Of course, when Congress originally authorizes a grant program, its original intent can be very different from the implementation of policies in the here and now.

The requirement for the Executive Branch is to follow the authorizing laws for grant programs.

There’s some flexibility.

However, in court, the Congressional intent (the stated purpose of the grant program) comes significantly into play.

Cue the Sanctuary Cities headlines.

No matter which side of the issue you’re on, if you’re working in or with Federal grants, I recommend following the President’s Executive Order (E.O.) and its path through the courts. Read news stories at the local and national levels.

If you’re brave, read the Order Granting the County Of Santa Clara’s and City and County of San Francisco’s Motions to Enjoin Section 9(A) of Executive Order 13768.

Below are some of the issues that the grants community will need to follow with regards to this case. They’re also issues that apply to many if not all Federal grant programs.

• The E.O. does not define “sanctuary jurisdiction.” The law refers to Federal, State, and local entities. As a lay-person, “sanctuary jurisdiction,” may seem like it should be obvious. As a Federal grants program manager, the lack of clarity makes determining eligibility challenging. As a pass-through entity, perhaps working in multi-city partnership, you need to know whom you can work with. This is why reading the Eligibility section of each Notice of Funding Opportunity (NOFO) is essential.
• Separation of Powers. The ruling to enjoin the E.O. cites one reason as the President “improperly seeks to wield congressional spending powers.” Or more simply put, the President is saying, “spend the Federal government’s money with different terms and conditions as authorized by Congress.” Since 1974, this has been against the law. This also means that even if a Federal agency has been marked for elimination or reduction in the FY 2018 President’s Budget, it must issue grants appropriated in FY 2017.
• Federalism. We’re a Nation based on a union of separate States. The Federal government cannot exercise too much power over the States, including coercing States or other local jurisdictions to do something against what they determine as a local community. Such as withholding funds for not complying with an E.O. or other Federal law that has nothing to do with the grant program. This should be of particular interest for issuers and recipients of Education grants – and the Administration’s intent to pull back programs that may be seen as “national.”
• Local Budgets and Due Process (5th Amendment). This was the most interesting part of the judicial ruling for me to read. The Counties of Santa Clara and San Francisco “are threatened with the loss of federal grants and face a present injury in the form of budgetary uncertainty.” This portion of the ruling demonstrates the significance that Federal grants play in our local economies and daily lives in addition to being a policy tool.
• The Words Matter. Not only did the court consider the legal documents cited throughout the case, it also factored in the words of Administration officials regarding the E.O. to determine the full intent of implementation.Federal grants personnel should be reminded that their words, no matter the form, can be construed as a determination. For example, it’s always better to say, “Let me check,” on whether a cost is allowable, rather than just saying, “Yes.” It could be the one time that something is prohibited by the program’s authorizing statute.

If nothing else, you’re now more aware that the laws that govern the authorization and appropriation of Federal funds are complex. And that it might be time to brush up on that knowledge from your high school government class.

(Thankfully, I’ve been reviewing our soon to be refreshed Federal Assistance Law course. My ability to read the Orrick ruling with some degree of understanding has been greatly enhanced.)