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A federal judge last week refused to dismiss a lawsuit filed against the state of Mississippi by the U.S. Department of Justice, which is attempting to recover nearly $1 million in federal Title I funds that the federal government alleges were misspent by the state.

The funds, which are intended to provide assistance to disadvantaged and low-income children, were distributed to 10 Mississippi school districts by the then-U.S. Office of Education in 1971 and 1972.

They were spent on the construction of vocational-education schools, cafeterias, dishwashers, and air-conditioners. All expenditures were approved by the state board of education, according to the government's suit.

The federal government maintains that this use of the funds was contrary to the regulations governing Title I money. Mississippi contends that it was not improper, since the funds were spent on facilities that benefited the state's children.

The suit was filed in December 1981 after two years of negotiations between the two parties. In several other instances where states have been charged with the misuse of Title I funds, negotiated settlements have led to the repayment of part of the money.

Mississippi, in seeking dismissal of the suit, argued that the federal government had no legal right to recover the money. However, U.S. District Judge Daniel Russell said that under federal law, as well as precedent established by the U.S. Supreme Court, the federal government may recover misspent funds.

No date has been set for the trial.

The U.S. Supreme Court appears likely to postpone until at least next fall oral arguments on the granting of federal tax exemptions to private schools that practice racial discrimination.

The Court omitted the tax-exemption case, which involves Bob Jones University of Greenville, S.C., and the Goldsboro (N.C.) Christian Schools, from a list of oral arguments scheduled for the remainder of its current term, which ends in July.

The omission of the case from the schedule does not definitely mean that the case will not be heard this term, however. Although the practice would be unusual, the Court could schedule special arguments during May or June, when pending cases are not ordinarily debated.

The schools are challenging an Internal Revenue Service policy, instituted during the Nixon Administration, that denies tax exemptions to schools that practice racial discrimination. Both schools contend that their policies of racial bias are based on religious grounds.

In a related development, the U.S. Court of Appeals for the District of Columbia Circuit last week indefinitely extended an injunction barring the irs from granting the tax exemptions. The extension was granted at the request of the Lawyers' Committee for Civil Rights Under Law, representing black parents and children in Mississippi.

The Reagan Administration touched off a controversy in January when it attempted to reverse the irs policy on the grounds that such a policy reached beyond the intent of the Congress when it passed the irs Code. The Administration at that time asked the Court to declare the case moot.

Since then, the Administration has urged the Court to hear the case, and the President has asked the Congress to enact a bill that would deny the tax exemptions to the schools. The measure, which is opposed by both liberals and conservatives, is stalled in committee.

The Senate voted last week to extend the fiscal 1982 continuing resolution, which sets spending for the Education Department at $13 billion, through the end of the fiscal year on Sept. 30.

The bill, HJ 409, which had already passed the House, was approved by the Senate on March 31--the day it was due to expire. The resolution has provided funds for several government agencies in the absence of regular appropriations bills, which the Congress has had trouble passing this year because of conflicts with the Reagan Administration.

The measure was in danger of not being approved, which might have prompted a shutdown of government agencies similar to one that occurred last fall when President Reagan vetoed a continuing resolution because it did not contain the budget cuts he sought. The President did sign the new resolution shortly after it was passed last week.

Senator William Armstrong, Republican of Colorado, had proposed an amendment that would have repealed a tax cut for members of Congress that had passed, by voice vote, in December.

A vote on the amendment could have presented a problem for Senators, who would have been forced to record their votes, in an election year, for or against a personal tax break.

Senate Majority Leader Howard H. Baker, Republican of Tennessee, succeeded in having the Armstrong amendment declared "out of order" by a 51-48 vote, clearing the way for passage of the resolution.

The U.S. armed services need recruits with strong backgrounds in engineering, members of the Association of Military Colleges and Schools were told last month at their annual meeting in Charleston, S.C.

Representatives of the Navy said they hoped to fill 80 percent of their openings for new officers with candidates who have engineering backgrounds. And the Air Force is seeking engineers for 85 percent of its officer openings.

The association, which held its 66th meeting on the campus of The Citadel, represents 42 schools.

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