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Groups Square Off Over Plan To Screen E.D. Grant Applicants

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Washington--On the one side are several ideologically conservative government officials who claim they are trying to ensure that federal education funds are spent solely for educational purposes.

On the other are representatives of numerous nonprofit organizations, some of them avowedly liberal, who accuse the Reagan Administration of attempting to divert grant money away from those who disagree with the President's philosophies.

The two groups, which have already clashed several times during the past year and a half, are again

preparing to face off--this time over an Administration proposal to require any organization seeking federal funds to provide the government with detailed information about its finances, management practices, employees, and lobbying activities. Excepted from the requirements would be schools and colleges.

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The proposal, which would take the form of amendments to the Education Department General Administrative Regulations, known as edgar, is contained in a "confidential" memorandum written by the Education Department's deputy general counsel, Hugh J. Beard Jr.

The document, which has been widely circulated for comment, would require applications from certain types of organizations to be approved by the department's office of management; current regulations require approval only by program officials. Should such an organization pass scrutiny and be awarded a grant, the amount and type of grant would be reported to the governor of the state in which the organization was located and the education committees of the Congress. The same information would be published in the Federal Register.

"The special approval procedures are being suggested," Mr. Beard wrote, "as a means to ensure that certain organizations, for which there is a high risk that the organization will not properly fulfill its responsibility to the department, are given special scrutiny. ... [The procedures also] attempt to assure that federal grant funds will not be used for noneducational purposes and in violation of the First Amendment."

'Continuing Resolution'

Justification for the new regulations was sought in the "continuing resolution" for the fiscal year 1982, an appropriation bill that set the Education Department's spending level for the current school year.

"No part" of the department's funds can be used for "any activity designed to influence legislation or appropriations pending before the Congress," the law said. The same provision has applied to federal education funds, and to those administered by the Labor and Health and Human Services Departments, since 1979.

A Congressional hearing on the proposal, known as "the Beard memorandum," has been scheduled by the House Subcommittee on Civil and Constitutional Rights for Sept. 15. The hearing was requested by representatives of several Washington-based organizations, who have labeled Mr. Beard's suggestions the latest move in an attempt to penalize groups with whom the Reagan Administration is at odds ideologically--a concept known as "defunding the left."

Those representatives cite as other recent examples: the Administration's unsuccessful attempt to abolish a federal program to promote equity for women in education, a program that is said to further feminist causes; the cancellation of four "school improvement" grants on the grounds that the programs promoted leftist ideology; and the revision of the Education Department's grant-proposal review process to exclude many Washington-based experts from serving as advisers.

"The Beard proposal is one of the most frightening documents produced by a high-ranking official in this Administration," said Ralph G. Neas, executive director of the Leadership Conference on Civil Rights, a coalition of groups. "It is reminiscent of the Nixon enemies list. The proposal would allow the Education Department to use grant money to reward those who have performed political favors and to discriminate against grant applicants whose political views are different from this Administration's."

Bonnie Milstein of the Center for Law and Social Policy, a public-interest law firm that formerly received grants under the women's program, said that even if the Beard memorandum is not translated into formal regulations, groups such as hers could be discouraged from applying for federal grants in the future.

"If you have 10 groups applying for grants, and five are identified as radical feminist or liberal-left because they have published a statement dissenting from what Reagan wants to do, those five will not get the money. It will be a secondary consideration as to who is best qualified to do the job."

Other observers have pointed out that the Beard proposal would place regulatory burdens on those who would seek education grants, in violation of the Administration's often-stated goal of reducing the amount and types of federal regulations.

"The Administration's view that the private sector shouldn't be overburdened with regulations doesn't apply the same to groups that voluntarily apply for discretionary grants," said a high-ranking department official who was asked to reply to the observation.

"It's true that we want to reduce regulations, but an additional priority is proper financial management," said the official, who asked not to be identified.

Anthony D. Blankley, a department spokesman, said the Beard memorandum "does not reflect our policy or our definite approach to the problem [of who should receive federal grants]. The memo was part of a ongoing study of existing laws and regulations."

'Project on Hold'

Mr. Blankley added that department officials were uncertain about whether an Administration representative would attend the Congressional hearing to defend the Beard proposal.

The department official said the memorandum was generally considered to be "too complex and difficult to administer, and has little chance of success. The project is already on hold."

The official added that the Beard proposal may be replaced with "some kind of greater diligence on the part of project monitors and grant program officers. The inspector general's office can audit grants that go to advocacy organizations, and each program office can be asked to take a fresh look at funding criteria.

"With over $1 billion being spent on discretionary funds and the fact that this has never been investigated thoroughly, it's a good idea to look at this and to build controls into the process," the official said.

Neither the official nor Mr. Blankley was able to cite specific examples of Education Department grantees using federal money improperly. ''There was a concern raised last year in the Congress over funds for the Legal Services Corpo-ration being used for unintended purposes, such as for bringing suit against the government. We want to make sure that doesn't happen in this department," said Mr. Blankley.

(The Legal Services Corporation funds state and local organizations that provide legal help to the poor at no charge.)

At least one instance of a recipient of federal funds using that money for lobbying was investigated recently by the General Accounting Office (gao), however.

At the urging of Representative Bobbi Fiedler, Republican of California, the gao audited California State University at Northridge, where officials in the financial-aid office had provided students with stationery and postage to use in protesting the Administration's proposed reductions in college financial aid. Approximately $300 worth of federal funds were used, the accounting office found.

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