The state of Maryland has offered nearly $2 million in excess federal energy assistance funds to needy families who will be able to spend the money -- originally meant to pay household fuel bills -- on anything they want.
State officials say federal regulations required them to offer the money to 16,000 Maryland residents, and they maintain the situation is the latest "bureaucratic bungle" for the problem-plagued energy assistance program.
"If we're going to administer a program for energy, we ought to make sure the money is expended on energy," said Stephen Minnich, director of Maryland's Energy Assistance office.
The state earlier this year placed $25 million in energy assistance funds in accounts with utility companies and heating oil suppliers for families to draw on. Most of the money was spent last winter and Minnich had hoped to leave the remainder there for use during the coming cold weather. Now he and local officials are concerned the money may not be used for its intended purpose.
However, a spokesman for the Social Security Administration, which administers the fuel assistance program, sees no problem with giving the funds to program participants who didn't use up their grants for fuel last winter. In fact, she said, the regulations require it.
"As long as the households have qualified for the program , we know that they have energy expenses," said Ceil Frank, the spokesman. "It doesn't matter whether they pay the expenses directly or the government pays for them."
According to Frank, money placed in a family's account during the fiscal year that ended Sept. 30, must be used during that fiscal year. "That's the crux of this. It is a one-year program," said Frank. "They Maryland officials may disagree, but the federal regulation is here for all to see. It is based on the law passed by Congress."
The only way the state could leave the money in the accounts was with the written permission of the program participants themselves, she said. "It is their money."
The new controversy is just the latest this year for the energy assistance program, which has been plagued by problems since its start. During a cold wave last January, more than 50,000 needy families who had applied for funds in the District, Maryland and Virginia were still waiting for their fuel grants because of government red tape. Local officials blamed state computer foul-ups, state officials blamed new federal regulations and the federal administrators blamed late appropriation of the funds by Congress.
In the end, about $1.6 billion in energy assistance funds were distributed nationwide. Maryland got $25 million and gave out grants to 65,000 families, some ranging as high as $507.
In 1982, states will be able to use their energy assistance grants more flexibly. If money is left over at the end of one fiscal year, states will be able to roll over to the next fiscal year up to 25 percent of their allocations, according to Frank.
But in 1981 that was not the case, and last month, under the federal regulations, Maryland was forced to send letters to 16,000 program participants telling them they could come and get any funds remaining in accounts with their fuel suppliers. The cash payouts would range from $2 to more than $300, according to Minnich. The letters also said that participants could leave the money with their fuel suppliers, but made no mention that written permission was required.
R. Hal Silvers, head of the agency that administers the program in Prince George's County, says he fears that all the participants will come in to claim their funds. "Poverty-ridden people . . . live from crisis to crisis. They are desperate. They want the money . . . and they'll use it now."
But Silvers' prediction so far has not been borne out. According to a survey of Baltimore oil suppliers by Minnich's office, only about 10 percent of those notified in the letters are taking their money.
"I think a lot of people didn't understand the letter," Minnich said this week. "It was not meant to facilitate people getting their money back. To be honest, we were hoping they would leave it on account."