Repository: UIHistories Project: Board of Trustees Minutes - 1950 [PAGE 953]

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944

BOARD OF TRUSTEES

[November 29

mining the rate of compensation payable by the Veterans' Administration to them for the training of veterans? The Land-Grant Institutions claim that these funds should be included. The Veterans' Administration claims that these funds should be excluded. Following is a summary of the principal arguments in support of the position of the Land-Grant Institutions. 1. It is conceded by the Veterans' Administration that income derived from private endowment funds and used for the payment of salaries of the instructional staff properly may be included by such institutions in determining the rate of compensation payable by the Veterans' Administration to such institutions for the training of veterans. The origin and history of congressional legislation from 1862 onward with respect to Federal Funds in aid of Land-Grant Institutions stamps these funds essentially as endowment funds such that their treatment should be the same as that accorded to private endowment funds. 2. Land-Grant Funds received by the several states under acts of Congress lose their character and identity as Federal Funds upon appropriation thereof by the states to the several beneficiary institutions, thus making it improper for the Veterans' Administration to take into account the origin thereof. 3. Where the statute provides, as it does in the case under consideration, that if the administrator "finds that the customary tuition charges are insufficient (he) may provide for the payment of such fair and reasonable compensation as will not exceed the estimated costs of teaching personnel and supplies for instruction," the term "cost" as here used should mean "cost" without regard to the source of the funds from which these "costs" are paid. 4. The fact that in calculating the "fair and reasonable compensation" for teaching veterans, costs of physical plant operation, depreciation, libraries, general and administrative expenses and other indirect costs are excluded, is a circumstance which lends strong support to the position that reasonable compensation should, at least, include all teaching costs. 5. The fact that this University and other Land-Grant Institutions have prepared their teaching cost data and budgets on their bona fide construction of the statute and the regulations creates a situation which, in and of itself, makes it unjust to apply a contrary interpretation retroactively. 6. The fact that the Land-Grant Acts do not direct that such funds be spent exclusively for the payment of teaching salaries but permit their use for any maintenance or operating costs directly or indirectly related to the teaching function, confers upon the beneficiary institutions the discretion to use such funds for either or both purposes. If these Federal Funds had been used to meet such maintenance and operational costs, it is our understanding that the administrator would not insist that they be deducted in determining the rate of compensation. The Veterans' Administration, in my opinion, can not legally take advantage of the fortuitous election of a particular institution to use such Federal Funds in the payment of teaching salaries instead of other maintenance and operational costs for to do so would confer upon the Veterans' Administration the power to force an election which the statute confers solely upon the institution concerned. 7. If the Veterans' Administration properly may force an institution to exclude such Federal Funds in its determination of a reasonable compensation, such action could afford a precedent for a similar claim by other Federal agencies that their respective commitments to pay reasonable compensation for various services to be received from universities would be reduced by the amounts received from these Federal Land-Grant Funds. Sincerely yours,

W I L L I A M E. BKITTON

This report was received for record.

Legal Counsel

PLAN FOR ADMINISTERING MEDICAL SOCIAL SERVICE AND SOCIAL CASE WORK (6) In accordance with the instructions of the Board of Trustees at its meeting on October 25, 1949, I submit, herewith, a report 1 including a plan for administering the Medical Social Service and Social Case W o r k at the University, as a

1

A copy of the report was filed with the Secretary of the Board for record.