After the Congress enacts legislation authorizing aid, it must enact separate legislation appropriating funds. Not until the appropriation has been made can the Office get the administrative wheels rolling. The Office must then get legal interpretation of the intent of the Congress in certain words or phrases, issue regulations under which it will administer the law, employ or reassign staff members to handle the work, prepare and publish application forms, and in the meantime answer endless queries.

In addition the Office must get together the data required by the formula or formulas the law prescribes for allocating the funds. (The laws direct the Office to get these data from the Census Bureau, U.S. Department of Commerce.) A formula may be based on total population, a particular segment of the population, or it may be based on both population and income per capita or on some other measure of need.

By writing such formulas into legislation the Congress makes sure that Federal aid goes where it is most needed. Take two examples. Under Public Laws 874 and 815 which provide assistance to areas affected by Federal programs, the formula is based on the number of children who live on or who live with a parent employed on Federal property. Under Public Law 874 the rate of payment is based on expenditure from local revenue for current operating expenses by a comparable community in the same State. Under the Vocational Education Act of 1963 the formula is based on population and per capita income, which means that a State with a large population between the ages of 15 and 65 and low per capita income gets proportionately more funds than a State with a smaller population and a higher per capita income.

Legislation requires the beneficiaries of Federal aid as well as the Office to comply with the terms of the act under which the grants are made; this means that the beneficiaries too must take action before they receive a Federal grant or loan. A State education agency, for example, may have to obtain authority from its legislature to accept Federal funds. If the legislature is not in session, the agency must wait on authority. If the law requires the State to match Federal funds, the agency may have to wait for the State to appropriate them.

Some laws, the Smith-Hughes, Library Service Act, and Vocational Education Act of 1963, for example, require the State to submit a "State plan"-a description of the program to be supported with details on how the funds are to be used-to the Commissioner of Education for his approval. Such a plan is, in effect, a contract between the State agency and the Office of Education.

When such details have been cleared away and the Office has computed the amount to be allocated to each recipient, funds can go out. Assume for the moment that funds are to be distributed under the National Defense Education Act of 1958-an act that authorizes programs involving State education agencies, local school districts, colleges and universities, college students, individual contractors for research (title VII). Assume too that the recipients have complied with all requirements. The Commissioner of Education certifies to the Secretary of the Treasury the amount to be paid to each. In turn the Treasury makes the payments to the State agencies for

their own use and for local schools; to colleges and universities for fellowships, institutes, research, and student loans; and to a few individuals under contract.

A new letter of credit system makes it possible for the recipient to draw on the U.S. Treasury Department on a monthly basis for his actual cash requirements for Federal activities. This procedure eliminates large cash balances in States or universities which accrued under the old procedure of making advance payments.

The distribution of funds does not, however, end here.

Some of the laws, particularly those enacted since World War II, provide for some flexibility in administration. Three different types of provisions apply to grants: they authorize the Commisioner of Education (1) to reallot funds that States do not claim or cannot use in the year for which they were appropriated; (2) to divide funds equitably among qualified applicants if the appropriation is insufficient to satisfy all justifiable claims; or (3) to rank applicants on an objective basis before dividing insufficient funds.

Federal funds are not intended to supply all the funds required for a specific job. To make sure that Federal grants do not cause States or local districts to slacken their efforts, the Congress sometimes writes a maintenance of effort clause into the law requiring a State or local community to spend as much for a given purpose as it spent the preceding year, or the States to match funds or to pay a specified proportion of the cost of a project.

By all counts, Federal grants in past years have stimulated the States to make greater efforts for education. Year after year they have overmatched Federal funds.

(The following charts have been brought up to date by Mr. Richard Johnson, of the Office of Education, to enable inclusion of authorities enacted subsequent to the publication of the original article :)

State library administrative agencies. Division of Library Services and

Contribution to loan $179, 300, 000 Provide for low-interest loans to college

How disbursed

Loans..