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Department of Veterans Affairs
Office of General Counsel
Washington, DC 20420
O.G.C. Advisory 8/15/91
August 15, 1991
VA District Counsel (301/02)
Aronov Building
474 S. Court Street
Montgomery, Alabama 36104
SUBJ: RMEC Nonprofit Corporations
1. We have reviewed your inquiries regarding the VA Southeastern
Region Medical Education Center's request to establish a nonprofit
corporation. This corporation would be similar to those at other VA
medical centers. As discussed below, we find no authority for the VA
Southeastern Region Medical Education Center to establish a
corporation as proposed.
2. You have furnished us with a document on Cooperative Health
Manpower Education Programs (CHEPS) which the Southeastern Region
Medical Education Center gave you. The document appears to be a draft
of a memorandum prepared by the office of Academic Affairs to
"Selected VA Medical Centers." The document states: "A CHEP should be
a non-profit corporation..." We find no evidence, however, that this
document was ever officially issued by VA. For your information,
current VA policy on CHEPs does not recommend forming a nonprofit
corporation: "CHEPs work through consortium arrangements with
community educational and health care institutions under their own
administrative structures. It is recommended that the administrative
authority be vested by member institutions in an executive committee
and delegated to a full-time coordinator." (VHA Manual M-8, Part IV,
Chapter 3, Paragraph 3.04c)
3. You have also furnished legal documents relating to nonprofit
corporations established at other VA medical centers. One set of
documents includes the bylaws and certificate of incorporation (dated
1972) for the Tuskegee Area Health Education Center, and a one-page
paper entitled "TAHEC CORPORATE GOALS." These documents indicate that
this Center is a nonprofit corporation composed of health-involved
institutions, agencies, or groups in the Tuskegee area including
Tuskegee VAMC. The corporation's goals are:
- to promote sharing of scarce health care resources;
- to promote cooperation among area facilities and agencies to
establish more effective health care delivery systems;
- to encourage coordination of education programs for health
care personnel;
- to develop and maintain inventories of health care resources
and needs; and
- to promote health education programs for area residents.
In the corporation's certificate of incorporation (dated October
1972), the VAMC Director is listed as one of the incorporates. In
addition, the VAMC is listed as the corporation's initial registered
agent.
4. Another document shows that VAMC Dublin participated in forming
the Georgia Cooperative Health Manpower Education Program, Inc. in
1986. This corporation's purpose is to serve as a coordinating
mechanism to improve the competencies and performance of practicing
health care personnel in geographic areas that are under served by
the health care system. To achieve this purpose, the bylaws establish
the following purposes for the corporation:
- support education and training programs for students in the
medical and health professions;
- support continuing education for health care personnel in the
area;
- facilitate consumer and patient health education and promotion
activities, and
- facilitate the integration of VA educational programs and
resources with community educational programs and resources.
The bylaws state that the corporation's offices shall be at the
Dublin VAMC. The VAMC director is listed as an ex-officio member of
the corporation.
5 . A nonprofit corporation was also recently established at VAMC
Perry Point. The District Counsel in Baltimore has requested our
advice regarding that corporation and has furnished us with further
details on VA's involvement in it. We will examine that corporation
in a separate memorandum to the District Counsel in Baltimore.
6. "An administrative agency is a creature of statute, having only
those powers expressly granted to it by Congress or included by
necessary implication from the Congressional grant." Soriano v.
United States, 494 F.2d 681, 683 (9th Cir. 1974). As an
administrative agency, VA, therefore, has authority to take only such
actions as are permitted by statute. Our review of VA's statutory
authority, however, does not reveal any statute that would permit the
VA Southeastern Region Medical Education Center or any other VA
facility or entity to establish a corporation as proposed.
7. In fact, government agencies are specifically prohibited from
establishing or acquiring a corporation to carry out government
business without specific statutory authorization. 31 U.S.C. 9102.
(The VA research corporation authority is an example to this general
rule. 38 U.S.C. 7361-7368 [formerly sections 4161-4168]. It does not
appear that the corporation proposed by the VA Southeastern Region
Medical Education Center meets the requirements for a research
corporation.)
8. We also examined VA's authority to participate in cooperative
health-care personnel education programs: "[VA] is authorized to
enter into agreements with public and nonprofit private institutions,
organizations, corporations, and other entities in order to
participate in cooperative health-care personnel education programs
within the geographical area of any [VA] health-care facility located
in an area remote from major academic health centers." 38 U.S.C.
8154(c) (formerly section 5054(c)). As you note, this authority only
permits VA to enter into agreements with nonprofit corporations. It
does not authorize VA to form such corporations.
9. Although VA may not establish or acquire a corporation, VA may,
under section 8154(c), enter into agreements with existing
corporations to participate in those corporate activities which are
considered to be of substantial benefit to VA in accomplishing its
mission. VA employees may participate in such activities as part of
their official duties. VA Manual MP-5, Part 1, Chapter 630, Paragraph
21.a,(1); see O.G.C. Advisory 47-89 (VA staff may participate in
McPherson Square Business Association on VA's behalf). In addition,
VA facilities (in their institutional names only) may join and pay
membership fees in organizations (not corporations) if the Director
determines the organizations have resources which can be used to the
substantial benefit of the facility as a whole as opposed to the
benefit of individual VA staff members. VHA Manual M-1, Part I,
Chapter 1, Paragraph 1.50; see 61 Comp. Gen. 542 (1982) (appropriated
funds may be used to pay an agency's membership fees in a private
organization).
Robert E. Coy
Acting General Counsel
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