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United States Government Accountability Office:
GAO:
Office of the General Counsel:
March 2009:
Principles Of Federal Appropriations Law:
Annual Update of the Third Edition:
GAO-09-340SP:
Preface:
We are pleased to present the annual update of the third edition of
Principles of Federal Appropriations Law. Our objective in this
publication is to present a cumulative supplement to the published
third edition text that includes all relevant decisions from January 1
to December 31, 2008. Now that Volume DI has been published, the third
edition of Principles is complete and all three volumes will be
updated annually.
The annual update is posted electronically on GAO's Web site
(www.gao.gov). These annual updates are not issued in hard copy and
should be used as electronic supplements. Users should retain hard
copies of the third edition volumes and refer to the cumulative
updates for newer material. The page numbers identified in the annual
update as containing new material are the page numbers in the hard
copy of the third edition and the new, updated information appears as
bolded text.
[End of preface]
Contents:
Volume 1:
Forward:
Chapter 1: Introduction:
Chapter 2: The Legal Framework:
Chapter 3: Agency Regulations and Administrative Discretion:
Chapter 4: Availability of Appropriations: Purpose:
Chapter 5: Availability of Appropriations: Time:
Volume 2:
Chapter 6: Availability of Appropriations: Amount:
Chapter 7: Obligation of Appropriations:
Chapter 8: Continuing Resolutions:
Chapter 9: Liability and Relief of Accountable Officers:
Chapter 10: Federal Assistance: Grants and Cooperative Agreements:
Chapter 11: Federal Assistance: Guaranteed and Insured Loans (no
updates this year):
Volume 3:
Chapter 12: Acquisition of Goods and Services:
Chapter 13: Real Property (no updates this year):
Chapter 14: Claims against and by the Government (no updates this
year):
Chapter 15: Miscellaneous Topics:
Forward:
Page i - Insert the following as footnote number 1 at the end of the
first paragraph (after "GAO Legal Products."1):
[1] Section 8 of the GAO Human Capital Reform Act of 2004, Pub. L. No.
108-271, 118 Stat. 811, 814 (July 7, 2004), 31 U.S.C. § 702 note,
changed GAO's name to the "Government Accountability Office." This
change was made to better reflect GAO's current mission. See S. Rep.
No. 108-216, at 8 (2003); H.R. Rep. No. 108-380, at 12 (2003).
Therefore, any reference in this volume to the "General Accounting
Office" should be read to mean "Government Accountability Office." The
acronym "GAO" as used in the text now refers to the Government
Accountability Office.
[End of section]
Chapter 1: Introduction:
B. The Congressional "Power of the Purse:"
Page 1-4 - Replace footnote 6 with the following:
[6] Numerous similar statements exist. See, e.g., Knote v. United
States, 95 U.S. 149, 154 (1877); Marathon Oil Co. v. United States,
374 F.3d 1123, 1133-34 (Fed. Cir. 2004), cert. denied, 544 U.S. 1031
(2005); Gowland v. Aetna, 143 F.3d 951, 955 (5th Cir. 1998); Hart's
Case, 16 Ct. CL 459, 484 (1880), aff'd, Hart v. United States, 118
U.S. 62 (1886); Jamal v. Travelers Lloyds of Texas Insurance Co., 131
E Supp. 2d 910, 919 (S.D. Tex. 2001); Doe v. Mathews, 420 E Supp. 865,
870-71 (D. N.J. 1976).
Page 1-5 - Insert the following after the second paragraph:
For example, in Rumsfeld v. Forum for Academic and Institutional
Rights, Inc., 547 U.S. 47 (2006), the Supreme Court reversed a lower
court decision, 390 F.3d 219 (3rd Cir. 2004), and upheld the
constitutionality of the so-called "Solomon Amendment." Originally
enacted as an appropriation rider and now codified as amended at 10
U.S.C. § 983, the Solomon Amendment generally prohibits the receipt of
certain federal funds by institutions of higher education that deny
military recruiters the same access they provide to other recruiters
on their campuses. The Forum for Academic and Institutional Rights
(FAIR), an association of law schools and faculty members, maintained
that the Solomon Amendment attached an unconstitutional condition to
their receipt of federal funds and, thus, exceeded congressional
constitutional authority under the so-called "Spending Clause" in
article I, section 8. Specifically, FAIR alleged that the statute
violated their First Amendment rights to oppose federal policies
regarding homosexuals in the military. In an 8-0 opinion by Chief
Justice Roberts, the Supreme Court rejected these arguments. Quoting
from Grove City College v. Bell, 465 U.S. 555, 575-76 (1984), the
Court noted that under the Spending Clause, "Congress is free to
attach reasonable and unambiguous conditions to federal financial
assistance that educational institutions are not obliged to accept."
547 U.S. at 59. In essence, the Court reasoned that funding conditions
such as the Solomon Amendment cannot violate the Spending Clause if
Congress could constitutionally impose the same requirements through
direct legislation. The Court went on to hold that Congress could
enact legislation that directly mandated the Solomon Amendment's
requirements without running afoul of the First Amendment. Id. at 59-
60. The Court observed that Congress could use its authority under
article I, section 8, clauses 1 and 1213 of the Constitution to
provide for the common defense and to raise and support armies, etc.,
as a basis for directly legislating the Solomon Amendment's
requirements for equal access by military recruiters so long as the
legislation was otherwise constitutional. It then held that the
Solomon Amendment's requirements did not implicate First Amendment
rights, dismissing each of FAIR'S arguments to the contrary. The
opinion stated by way of summary:
"The Solomon Amendment neither limits what law schools may say nor
requires them to say anything.... As a general matter, the Solomon
Amendment regulates conduct, not speech. It affects what law schools
must do—afford equal access to military recruiters—not what they may
or not say."
Id. at 60 (emphasis in original).
Page 1-7 - Insert the following after the last paragraph:
In a 2007 decision, GAO declined to interpret the voluntary services
prohibition of the Antideficiency Act to prohibit the President from
exercising his constitutional power to make a recess appointment to an
individual who was barred by statute from receiving compensation. B-
309301, June 8, 2007. GAO noted that "serious constitutional issues
would arise if [the statutory bar on compensation], in conjunction
with the voluntary services prohibition, were read to directly
restrict the President from making a recess appointment." Id. at 6.
Page 1-9 - Replace the first paragraph with the following:
In Kansas v. United States, 214 F.3d 1196, 1201-02, n.6 (10th Cir.),
cert. denied, 531 U.S. 1035 (2000), the court noted that there were
few decisions striking down federal statutory spending conditions.9
However, there are two recent interesting examples of situations in
which courts invalidated a spending condition on First Amendment
grounds. In Legal Services Corp. v. Velasquez, 531 U.S. 533 (2001), a
conditional provision (contained in the annual appropriations for the
Legal Service Corporation (LSC) since 1996) was struck down as
inconsistent with the First Amendment. This provision prohibited LSC
grantees from representing clients in efforts to amend or otherwise
challenge existing welfare law. The Supreme Court found this provision
interfered with the free speech rights of clients represented by LSC-
funded attorneys.° In American Civil Liberties Union (ACLU) v. Mineta,
319 F. Supp. 2d 69 (D.D.C. 2004), the court declared unconstitutional
an appropriation provision forbidding the use of federal mass transit
grant funds for any activity that promoted the legalization or medical
use of marijuana, for example, posting an advertisement on a bus.
Relying on Legal Services Corp., the court held that the provision
constituted "viewpoint discrimination" in violation of the First
Amendment. ACLU, 319 F. Supp. 2d at 83-87.
Page 1-10 - Insert the following after the first partial paragraph:
There have been some recent court cases upholding congressional
actions attaching conditions to the use of federal funds that require
states to waive their sovereign immunity from lawsuits under the
Eleventh Amendment. In these cases, courts found the condition a
legitimate exercise of Congress's spending power. For example, the
court in Barbour v. Washington Metropolitan Transit Authority, 374
F.3d 1161 (D.C. Cir. 2004), cert. denied, 544 U.S. 904 (2005), upheld
a statutory provision known as the "Civil Rights Remedies Equalization
Act," 42 U.S.C. § 2000d-7, which clearly conditioned a state's
acceptance of federal funds on its waiver of its Eleventh Amendment
immunity to suits under various federal antidiscrimination laws. Among
other things, the court rejected an argument based on Dole that the
condition was not sufficiently related to federal spending. The
opinion observed that the Supreme Court has never overturned Spending
Clause legislation on "relatedness grounds." Barbour, 374 F.3d at 1168.
Similarly, two courts rejected challenges to section 3 of the
Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA),
42 U.S.C. § 2000cc-1, which limits restrictions on the exercise of
religion by persons institutionalized in a program or activity that
receives federal financial assistance. Charles v. Verhagen, 348 F.3d
601 (7th Cir. 2003); Williams v. Bitner, 285 F. Supp. 2d 593 (M.D. Pa.
2003), aff'd in part, remanded in part 455 F.3d 186 (3rd Cir. 2006).
In Charles, the court held that RLUIPA "falls squarely within
Congress' pursuit of the general welfare under its Spending Clause
authority." Charles, 348 F.3d at 607. The court also rejected the
argument that the statute's restrictions could not be related to a
federal spending interest because the state corrections program at
issue received less than 2 percent of its budget from federal funding:
"Nothing within Spending Clause jurisprudence, or RLUIPA for that
matter, suggests that States are bound by the conditional grant of
federal money only if the State receives or derives a certain
percentage ... of its budget from federal funds." Id. at 609.
Page 1-10 - Replace the second paragraph with the following:
For some additional recent cases upholding statutory funding
conditions, see Biodiversity Associates v. Cables, 357 F.3d 1152 (10th
Cir.), cert. denied, 543 U.S. 817 (2004) (upholding an appropriations
rider that explicitly superseded a settlement agreement the plaintiffs
had reached with the Forest Service in environmental litigation);
Kansas v. United States, 214 F.3d 1196 (10th Cir.), cert. denied, 531
U.S. 1035 (2000) (upholding the statutory requirement conditioning
receipt of federal block grants used to provide cash assistance and
other supportive services to low income families on a state's
participation in and compliance with a federal child support
enforcement program); Litman, 186 F.3d 544 (state university's receipt
of federal funds was validly conditioned upon waiver of the state's
Eleventh Amendment immunity from federal antidiscrimination lawsuits);
California v. United States, 104 F.3d 1086, 1092 (9th Cir. 1997)
(acknowledging that although it originally agreed to the condition for
receipt of federal Medicaid funds on state provision of emergency
medical services to illegal aliens, California now viewed that
condition as coerced because substantial increases in illegal
immigration left California with no choice but to remain in the
program to prevent collapse of its medical system; the complaint was
dismissed for failure to state a claim upon which relief could be
granted); and Armstrong v. Vance, 328 F. Supp. 2d 50 (D.D.C. 2004) and
Whatley v. District of Columbia, 328 F. Supp. 2d 15 (D.D.C. 2004),
aff'd, 447 F.3d 814 (D.C. Cir. 2006) (two related decisions upholding
appropriations provisions that imposed a cap on the District of
Columbia's payment of attorney fees awarded in litigation under the
Individuals with Disabilities Education Act, 20 U.S.C. §§ 14001490).
See also Richard W. Garnett, The New Federalism, the Spending Power,
and Federal Criminal Law, 89 Cornell L. Rev. 1 (Nov. 2003), an article
that provides more background on this general subject.
Page 1-12 - Replace the second bullet in the first paragraph with the
following:
* Agencies may not spend, or commit themselves to spend, in advance of
or in excess of appropriations. 31 U.S.C. § 1341 (Antideficiency Act).
GAO has said that because the Antideficiency Act is central to
Congress's core constitutional power of the purse, GAO will not
interpret general language in another statute, such as the
"notwithstanding any other provision of law" clause, to imply a waiver
of the Act without some affirmative expression of congressional intent
to give the agency the authority to obligate in advance or in excess
of an appropriation. B-303961, Dec. 6, 2004.
D. "Life Cycle" of an 3. Budget Execution and Control Appropriation:
Page 1-34 - Insert the following after the first partial paragraph:
In 2006, GAO reported to Congress that in 13 instances executive
agencies had impounded funds that the President had proposed for
cancellation. B-308011, Aug. 4, 2006; B-307122.2, Mar. 2, 2006. When
the President proposed cancellation of these funds, the Administration
had not submitted reports of impoundments under the Impoundment
Control Act because, officials explained, the Administration was not
withholding funds from obligation. In all 13 instances, the agencies
released impounded funds as a result of GAO's inquiries. Id.
E. The Role of the Accounting Officers: Legal Decisions:
2. Decisions of the Comptroller General:
Page 1-40 - Replace the last partial paragraph with the following:
There is no specific procedure for requesting a decision from the
Comptroller General. A simple letter is usually sufficient. The
request should, however, include all pertinent information or
supporting material and should present any arguments the requestor
wishes to have considered. See GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at www.gao.govilegal/resources.html.
Page 1-42 - Replace the third full paragraph with the following:
For example, as we discussed earlier in this chapter, effective June
30, 1996, Congress transferred claims settlement authority under 31
U.S.C. § 3302 to the Director of the Office of Management and Budget
(OMB). Congress gave the director of OMB the authority to delegate
this function to such agency or agencies as he deemed appropriate.
See, e.g., B-302996, May 21, 2004 (GAO no longer has authority to
settle a claim for severance pay); B-278805, July 21, 1999 (the
International Trade Commission was the appropriate agency to resolve
the subject claims request).
Page 1-42 - Replace the fourth, full paragraph with the following:
Other areas where the Comptroller General will decline to render
decisions include questions concerning which the determination of
another agency is by law "final and conclusive." Examples are
determinations on the merits of a claim against another agency under
the Federal Tort Claims Act (28 U.S.C. § 2672) or the Military
Personnel and Civilian Employees' Claims Act of 1964 (31 U.S.C. §
3721). See, e.g., B-300829, Apr. 4, 2004 (regarding the Military
Personnel and Civilian Employees' Claims Act). Another example is a
decision by the Secretary of Veterans Affairs on a claim for veterans'
benefits (38 U.S.C. § 511). See B-266193, Feb. 23, 1996; 56 Comp. Gen.
587, 591 (1977); B-226599.2, Nov. 3, 1988 (nondecision letter).
3. Other Relevant Authorities:
Page 1-48 - Replace paragraph number 7 with the following:
7. A Glossary of Terms Used in the Federal Budget Process, GA0-05-
734SP (Washington, D.C.: Sept. 2005)—This publication contains
standard definitions of fiscal and budgetary terms. It is published by
GAO as required by 31 U.S.C. § 1112(c), and is updated periodically.
[End of section]
Chapter 2: The Legal Framework:
B. Some Basic Concepts:
1. What Constitutes an Appropriation:
Page 2-20 - Insert the following after the second full paragraph:
Subsequent to the Core Concepts and AINS decisions, the Third Circuit
Court of Appeals had occasion to weigh in on the issue of revolving
funds in a non-Tucker Act situation in American Federation of
Government Employees (AFGE) v. Federal Labor Relations Authority
(FLRA), 388 F.3d 405 (3rd Cir. 2004). In that case, AFGE, representing
Army depot employees, had proposed an amendment to the employees'
collective bargaining agreement that would have required the Army to
pay reimbursements of personal expenses incurred by the depot
employees as a result of cancelled annual leave from a defense working
capital fund. When the Army objected that it had no authority to use
the working capital fund for personal expenses, AFGE appealed to FLRA.
FLRA agreed with the Army and ruled that the provision was
"nonnegotiable." Citing FLRA decisions, Comptroller General decisions,
and federal court cases, FLRA concluded that the working capital fund,
a revolving fund, is treated as a continuing appropriation and, as
such, the fund was not available for reimbursement of personal
expenses.
The court agreed with FLRA that the defense working capital fund
consists of appropriated funds and is thus not available to pay the
personal expenses of Army employees. The court, however, rejected what
it called "FLRA's blanket generalization that revolving funds are
always appropriations." AFGE, 388 F.3d at 411. Instead, the court
applied a standard used by the Federal Circuit and the Court of
Federal Claims when addressing the threshold issue of Tucker Act
jurisdiction, a "clear expression" standard; that is, funds should be
regarded as "appropriated" absent a "clear expression by Congress that
the agency was to be separated from the general federal revenues." Id.
at 410. The court observed in this regard:
"While that 'clear expression' standard arises in the context of
Tucker Act jurisprudence, we think it accurately reflects the broader
principle that one should not lightly presume that Congress meant to
surrender its control over public expenditures by authorizing an
entity to be entirely self-sufficient and outside the appropriations
process.... For this reason, the courts have sensibly treated agency
money as appropriated even when the agency is fully financed by
outside revenues, so long as Congress has not clearly stated that it
wishes to relinquish the control normally afforded through the
appropriations process.
"We think the correct rule is that the characterization of a
government fund as appropriated or not depends entirely on Congress'
expression, whatever the actual source of the money and whether or not
the fund operates on a revolving rather than annualized basis."
Id. at 410-11. In applying this standard to the particular funding
arrangement at issue, the court determined that the defense working
capital fund was not a nonappropriated fund instrumentality and upheld
the FLRA decision. "What matters is how Congress wishes to treat
government revenues, not the source of the revenues." Id. at 413.
3. Transfer and Reprogramming:
Page 2-24 - Replace footnote 40 with the following:
[40] 7 Comp. Gen. 524 (1928); 4 Comp. Gen. 848 (1925); 17 Comp. Dec. 174
(1910). Cases in which adequate statutory authority was found to exist
are B-302760, May 17, 2004 (the transfer of funds from the Library of
Congress to the Architect of the Capitol for construction of a loading
dock at the Library is authorized) and B-217093, Jan. 9, 1985 (the
transfer from the Japan-United States Friendship Commission to the
Department of Education to partially fund a study of Japanese
education is authorized).
Page 2-25 - Insert the following after the first full paragraph:
In 2007, GAO found that the Department of Homeland Security's (DHS)
Preparedness Directorate had authority pursuant to 31 U.S.C. § 1534,
the "account adjustment statute," to fund shared services that
benefited the directorate as a whole by initially obligating the
services against one appropriation within the directorate and then
allocating the costs to the benefiting appropriations. However, the
Directorate did not appear to properly allocate the costs. To the
extent it did not properly record its obligations prior to the end of
the fiscal year against each benefiting appropriation for the
estimated value of the services each appropriation received, as
required by the account adjustment statute, the Directorate improperly
augmented its appropriations. B-308762, Sept. 17, 2007.
Page 2-28 - Insert the following, including the reference to new
footnote number 44a, after the first full paragraph:
In another case, GAO found that the Department of Defense (DOD)
improperly "parked" DOD funds when it transferred the funds to a
Department of the Interior franchise fund, GovWorks.[Footnote 44a] B-
308944, July 17, 2007. "Parking" is a term used to describe a transfer
of appropriations to a revolving fund to extend the availability of
the appropriations. GovWorks is a revolving fund established to
provide common administrative services to Interior and other agencies
by procuring goods and services from vendors on behalf of federal
agencies on a competitive basis. DOD used Military Interdepartmental
Purchase Requests (MIPRs) to transfer funds to GovWorks but did not
identify the specific items or services that DOD wanted GovWorks to
acquire on its behalf until after the funds had expired. DOD
subsequently improperly directed GovWorks to use expired DOD funds for
contracts in violation of the bona fide needs rule.
Page 2-28 - Insert the following as new footnote number 44a:
[44a] GovWorks is officially known as the Acquisition Services
Directorate. See www.govworks.gov (last visited Feb. 4, 2009).
Page 2-31 - Replace the first full paragraph, with the following and
insert new footnote number 48a as follows:
Thus, as a matter of law, an agency is free to reprogram unobligated
funds as long as the expenditures are within the general purpose of
the appropriation and are not in violation of any other specific
limitation or otherwise prohibited. E.g., B-279338, Jan. 4, 1999; B-
123469, May 9, 1955. This is true even though the agency may already
have administratively allotted the funds to a particular object. 20
Comp. Gen. 631 (1941). In some situations, an agency may be required
to reprogram funds to satisfy other obligations. E.g., Cherokee Nation
of Oklahoma v. Leavitt, 543 U.S. 631, 641-43 (2005) (government must
reprogram unrestricted funds to cover contractual obligations);48a
Blackhawk Heating & Plumbing, 622 F.2d at 552 n.9 (satisfaction of
obligations under a settlement agreement).
Page 2-31 - Insert the following for new footnote number 48a:
[48a] In this case, the government had argued that its contracts with
Indian tribes were not "ordinary procurement contracts," so it was not
legally bound to pay certain contract costs unless Congress
appropriated sufficient funds for that purpose. The Court found the
tribal contracts to be binding in the same way as ordinary contractual
promises and that the government would have to reprogram
appropriations to fulfill its contractual obligations to the tribes,
notwithstanding that the government may have planned to use those
appropriations for other purposes that the government felt were
critically important.
4. General Provisions: When Construed as Permanent Legislation:
Page 2-36 - Replace the third full paragraph with the following:
The words "this or any other act" may be used in conjunction with
other language that makes the result, one way or the other,
indisputable. The provision is clearly not permanent if the phrase
"during the current fiscal year" is added. Norcross v. United States,
142 Ct. Cl. 763 (1958). Addition of the phrase "with respect to any
fiscal year" would indicate, all other potential considerations aside,
that Congress intended the provision to be permanent. B-230110, Apr.
11, 1988. For example, in the 2006 Department of Justice
Appropriations Act, as part of the language of ATF's Salaries and
Expenses appropriation, Congress included a proviso stating that "no
funds appropriated under this or any other Act with respect to any
fiscal year may be used to disclose part or all of the contents of the
Firearms Trace System database" to anyone other than a law enforcement
agency or a prosecutor in connection with a criminal investigation or
prosecution. Pub. L. No. 109-108, title I, 119 Stat. 2290, 2295 (Nov.
22, 2005). In B-309704, Aug. 28, 2007, GAO determined that the proviso
constituted permanent legislation because the forward-looking effect
of the phrase "this or any other Act" coupled with the phrase "with
respect to any fiscal year" indicates Congress's intention that the
provision be permanent. See also B-316510, July 15, 2008 (a similar
proviso in ATF's 2008 appropriation, using the phrase "beginning in
fiscal year 2008 and thereafter," is also permanent law).
C. Relationship of Appropriations to Other Types of Legislation:
2. Specific Problem Areas and the Resolution of Conflicts:
Page 2-43 - Replace the third full paragraph with the following:
Second, Congress is free to amend or repeal prior legislation as long
as it does so directly and explicitly and does not violate the
Constitution. It is also possible for one statute to implicitly amend
or repeal a prior statute, but it is firmly established that "repeal
by implication" is disfavored, and statutes will be construed to avoid
this result whenever reasonably possible. E.g., Tennessee Valley
Authority v. Hill, 437 U.S. 153, 189-90 (1978); Morton v. Mancari, 417
U.S. 535, 549 (1974); Posadas v. National City Bank of New York, 296
U.S. 497, 503 (1936); B-307720, Sept. 27, 2007; B-290011, Mar. 25,
2002; B-261589, Mar. 6, 1996; 72 Comp. Gen. 295, 297 (1993); 68 Comp.
Gen. 19, 22-23 (1988); 64 Comp. Gen. 143, 145 (1984); 58 Comp. Gen.
687, 691-92 (1979); B-258163, Sept. 29, 1994; B-236057, May 9, 1990.
Repeals by implication are particularly disfavored in the
appropriations context. Robertson v. Seattle Audubon Society, 503 U.S.
429, 440 (1992).
Page 2-44 - Replace the first full paragraph with the following:
A corollary to the "cardinal rule" against repeal by implication, or
perhaps another way of saying the same thing, is the rule of
construction that statutes should be construed harmoniously so as to
give maximum effect to both wherever possible. E.g., Posadas, 296 U.S.
at 503; Strawser v. Atkins, 290 F.3d 720 (4th Cir.), cert. denied, 537
U.S. 1045 (2002); B-290011, Mar. 25, 2002; 53 Comp. Gen. 853, 856
(1974); B-208593.6, Dec. 22, 1988. See B-307720, Sept. 27, 2007, and B-
258000, Aug. 31, 1994, for examples of harmonizing ambiguous
appropriation and authorization provisions in order to effectuate
congressional intent.
Page 2-44 - Replace the second full paragraph with the following:
Third, if two statutes are in irreconcilable conflict, the more recent
statute, as the latest expression of Congress, governs. As one court
concluded in a statement illustrating the eloquence of simplicity,
"[t]he statutes are thus in conflict, the earlier permitting and the
later prohibiting," so the later statute supersedes the earlier.
Eisenberg v. Corning, 179 F.2d 275, 277 (D.C. Cir. 1949). In a sense,
the "last in time" rule is yet another way of expressing the repeal by
implication principle. We state it separately to highlight its
narrowness: it applies only when the two statutes cannot be reconciled
in any reasonable manner, and then only to the extent of the conflict.
E.g., B-308715, Apr. 20, 2007 ("It is well established that a later
enacted, specific statute will typically supersede a conflicting
previously enacted, general statute to the extent of the
inconsistency."). See also Posadas, 296 U.S. at 503; B-255979, Oct.
30, 1995; B-226389, Nov. 14, 1988; B-214172, July 10, 1984, aff'd upon
reconsideration, 64 Comp. Gen. 282 (1985).
Page 2-69 - Insert the following new paragraphs, including the
reference to new footnote number 60a, after the first full paragraph:
Recently, two courts have interpreted appropriation restrictions to
avoid repeal by implication: City of Chicago v. Department of the
Treasury, 384 F.3d 429 (7th Cir. 2004), and City of New York v.
Beretta U.S.A. Corp., 222 F.R.D. 51 (E.D. N.Y. 2004). In the first
case, the City of Chicago had sued the former Bureau of Alcohol,
Tobacco, and Firearms under the Freedom of Information Act (FOIA), 5
U.S.C. § 552, to obtain access to certain information from the
agency's firearms databases. The Court of Appeals for the Seventh
Circuit held that the information was not exempt from disclosure under
FOIA. City of Chicago v. Department of the Treasury, 287 F.3d 628 (7th
Cir. 2002). The agency then appealed to the Supreme Court. While the
appeal was pending, Congress enacted appropriations language for
fiscal years 2003 and 2004 providing that no funds shall be available
or used to take any action under FOIA or otherwise that would publicly
disclose the information. Pub. L. No. 108-7, div. J, title VI, § 644,
117 Stat. 11, 473 (Feb. 20, 2003); Pub. L. No. 108-199, div. B, title
I, 118 Stat. 3, 53 (Jan. 23, 2004). The Supreme Court remanded the
case to the Seventh Circuit to consider the impact, if any, of the
appropriations language. Department of Justice v. City of Chicago, 537
U.S. 1229 (2003). In City of Chicago v. Department of the Treasury,
384 F.3d 429 (7th Cir. 2004), the court decided that the
appropriations language had essentially no impact on the case. Citing
a number of cases on the rule disfavoring implied repeals
(particularly by appropriations act), the court held that the
appropriations rider did not repeal FOIA or otherwise affect the
agency's legal obligation to release the information in question. The
court concluded that "FOIA deals only peripherally with the allocation
of funds—its main focus is to ensure agency information is made
available to the public." Id. at 435. In this regard, the court
repeatedly emphasized the minimal costs entailed in complying with the
access request and concluded that "there is no 'irreconcilable
conflict' between prohibiting the use of federal funds to process the
request and granting the City access to the databases." Id. After the
2004 decision, the agency filed a request for rehearing. Before the
rehearing, Congress passed the Consolidated Appropriations Act of 2005
specifying that no funds be used to provide the data sought by the
City, and further provided that the data be "immune from judicial
process." Pub. L. No. 108-447, div. B, title I, 118 Stat. 2809, 2859
(Dec. 8, 2004). The court determined that this statutory language
showed that Congress's "obvious intention ... was to cut off all
access to the databases for any reason." City of Chicago v. Department
of the Treasury, 423 F.3d 777, 780 (7th Cir. 2005).
The second case, City of New York v. Beretta U.S.A. Corp., 222 F.R.D.
51 (E.D. N.Y. 2004), concerned access to firearms information that was
subject to the same appropriations language for fiscal year 2004 in
Public Law 108-199.6" In this case, the demand for access took the
form of subpoenas seeking discovery of the records in a tort suit by
the City of New York and others against firearms manufacturers and
distributors. The court in City of New York denied the agency's motion
to quash the subpoenas, which was based largely on the appropriations
language. The court held that the appropriations language, which
prohibited public disclosure, was inapplicable by its terms since
discovery could be accomplished under a protective order that would
keep the records confidential. City of New York, 222 F.R.D. at 56-65.
Page 2-69 - Insert the following as new footnote 60a:
[60a] The litigation did not address whether the provisions were to be
read as temporary or permanent. B-309704, Aug. 28, 2007, at 2 n.1. See
also B-316510, July 15, 2008.
D. Statutory Interpretation: Determining Congressional Intent:
1. The Goal of Statutory Construction:
Page 2-74 - Insert the following after the first full paragraph:
Of course, there are those rare occasions when two statutory
provisions are just irreconcilable. Even then there is a statutory
construction principle called the "last-in-time" rule. For example, in
B-303268, Jan. 3, 2005, at issue was what Congress intended in
enacting a "notwithstanding" clause in the State Department's fiscal
year 2004 appropriations. Congress had appropriated a lump sum of $35
million to the Economic Support Fund for assistance to Lebanon,
available "notwithstanding any other provision of law." Pub. L. No.
108-7, div. E, title V, § 534(a), 117 Stat. 11, 193 (Feb. 20, 2003).
Five months earlier, in the 2003 Foreign Relations Authorization Act,
Congress had included a provision, "notwithstanding any other
provision of law," restricting from obligation $10 million "made
available in fiscal year 2003 or any subsequent fiscal year" to the
Economic Support Fund for assistance to Lebanon until the President
submitted certain findings to Congress. Pub. L. No. 107-228, § 1224,
116 Stat. 1350, 1432 (Sept. 30, 2002). The two "notwithstanding"
clauses presented an irreconcilable conflict that GAO resolved by
applying the "last-in-time" rule of construction—that is, we presume
that the later-enacted statute represents Congress's current
expression of the law (i.e., Congress's "last word"). Consequently,
the "notwithstanding" clause of the appropriation act superseded the
authorization act's "notwithstanding" clause. However, in this case
the appropriation act's "notwithstanding" clause had effect only for
fiscal year 2004. The authorization act's clause was permanent law.
Thus the appropriation act's clause superseded the authorization act's
clause only for fiscal year 2004, unless similar appropriation act
provisions were enacted for subsequent fiscal years.
The last-in-time rule was also applied in B-316510, July 15, 2008.
That case involved two provisos, contained in the fiscal years 2006
and 2008 appropriations acts, regarding the disclosure of certain
information maintained by the Bureau of Alcohol, Tobacco, Firearms,
and Explosives (ATF), both of which contained the necessary words of
futurity to make them permanent law. The 2008 proviso specifically
authorized disclosure in some circumstances that would not be
permitted under the 2006 proviso. Because it was passed later in time,
GAO concluded that the 2008 proviso superseded the 2006 proviso with
respect to those particular disclosures.
Page 2-74 - Replace the second full paragraph, with the following:
By far the most important rule of statutory construction is this: You
start with the language of the statute. Countless judicial decisions
reiterate this rule. E.g., BedRoc Limited, LLC v. United States, 541
U.S. 176 (2004); Lamle v. United States Trustee, 540 U.S. 526 (2004);
Hartford Underwriters Insurance Co. v. Union Planters Bank, N.A.,
530 U.S. 1 (2000); Robinson v. Shell Oil Co., 519 U.S. 337 (1997);
Connecticut National Bank v. Germain, 503 U.S. 249 (1992); Mallard v.
United States District Court for the Southern District of Iowa, 490
U.S. 296, 300 (1989). The primary vehicle for Congress to express its
intent is the words it enacts into law. As stated in an early Supreme
Court decision: "The law as it passed is the will of the majority of
both houses, and the only mode in which that will is spoken is in the
act itself; and we must gather their intention from the language there
used." Aldridge v. Williams, 44 U.S. (3 How.) 9, 24 (1845). A somewhat
better known statement is from United States v. American Trucking
Ass'ns, 310 U.S. 534, 543 (1940): "There is, of course, no more
persuasive evidence of the purpose of a statute than the words by
which the legislature undertook to give expression to its wishes."
Page 2-76 - Replace the last paragraph inserting new footnote number
68a as follows:
The extent to which sources outside the statute itself, particularly
legislative history, should be consulted to help shed light on the
statutory scheme has been the subject of much controversy in recent
decades."[Footnote 68a] One school of thought, most closely identified
with Supreme Court Justice Antonin Scalia, holds that resort to
legislative history is never appropriate. This approach is sometimes
viewed as a variant of the plain meaning rule.' A more widely
expressed statement of the plain meaning rule is that legislative
history can be consulted but only if it has first been determined that
the statutory language is "ambiguous"—that is, that there is no plain
meaning.
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[68a] This discussion does not include outside sources that the
statute specifically incorporates by reference, which are generally
viewed as part of the statutory scheme. See, e.g., B-316010, Feb. 25,
2008 (various provisions of an appropriation act incorporated by
reference specified passages of an explanatory statement of the House
Committee on Appropriations that was printed in the Congressional
Record and contained specific allocations, which the agencies were
required to follow). For more on incorporation by reference, see
section D.6.a of this chapter.
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Whether the language of the statute is sufficiently ambiguous that a
court should look beyond it to legislative history can be difficult to
discern. In Zuni Public School District No. 89 v. Department of
Education, 550 U.S. 81 (2007), the Court was faced with interpreting
statutory language setting out a formula to be used by the Department
of Education in connection with state funding of school districts. In
a 5-4 decision, a majority of the court found the language in the
statute to be sufficiently ambiguous to permit it to consider other
indicators of congressional intent. The majority acknowledged that if
the intent of Congress was clearly and unambiguously expressed by the
statutory language, that would be the end of the Court's analysis.
3. The Limits of Literalism: Errors in Statutes and "Absurd
Consequences:"
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The Supreme Court's decision in Lamie v. United States Trustee, 540
U.S. 526 (2004), contained an interesting discussion of drafting
errors and what to do about them. For reasons that are described at
length in the opinion but need not be repeated here, the Court found
an "apparent legislative drafting error" in a 1994 statute. Lamie, 540
U.S. at 530. Nevertheless, the Court held that the amended language
must be applied according to its plain terms. While the Court in Lamie
acknowledged that the amended statute was awkward and ungrammatical,
and that a literal reading rendered some words superfluous and could
produce harsh results, none of these defects made the language
ambiguous. Id. at 534-36. The Court determined that these flaws did
not "lead to absurd results requiring us to treat the text as if it
were ambiguous." Id. at 536. The Court also drew a distinction between
construing a statute in a way that, in effect, added missing words as
opposed to ignoring words that might have been included by mistake. Id.
at 538.
Page 2-82 - Insert the following after the third paragraph:
Recent Supreme Court decisions likewise reinforce the need for caution
when it comes to departing from statutory language on the basis of its
apparent "absurd consequences." See Lamie v. United States Trustee,
540 U.S. 526, 537-38 (2004) ("harsh" consequences are not the
equivalent of absurd consequences); Barnhart v. Thomas, 540 U.S. 20,
28-29 (2003) ("undesirable" consequences are not the equivalent of
absurd consequences).
4. Statutory Aids to Construction:
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Occasionally, the courts use the Dictionary Act to assist in resolving
questions of interpretation. E.g., Gonzalez v. Secretary for the
Department of Corrections, 366 F.3d 1253, 1263-64 (11th Cir. 2004)
(applying the Dictionary Act's general rule that "words importing the
singular include and apply to several persons, parties, or things," 1
U.S.C. § 1); United States v. Reid, 206 F. Supp. 2d 132 (D. Mass.
2002) (an aircraft is not a "vehicle" for purposes of the USA PATRIOT
Act); United States v. Belgarde, 148 F. Supp. 2d 1104 (D. Mont.),
aff'd, 300 F.3d 1177 (9th Cir. 2002) (a government agency, which the
defendant was charged with burglarizing, is not a "person" for
purposes of the Major Crimes Act). Courts also hold on occasion that
the Dictionary Act does not apply. See Rowland v. California Men's
Colony, 506 U.S. 194 (1993) (context refutes application of the title
1, United States Code, definition of "person"); United States v.
Ekanem, 383 F.3d 40 (2nd Cir. 2004) ("victim" as used in the Mandatory
Victims Restitution Act (MVRA) is not limited by the default
definition of "person" in the Dictionary Act since that definition
does not apply where context of MVRA indicates otherwise).
Page 2-84 - Replace the last paragraph with the following:
Congress regularly passes laws that "codify," or enact into positive
law, the contents of various titles of the United States Code. The
effect of such codifications is to make that United States Code title
the official evidence of the statutory language it contains.'
Codification acts typically delete obsolete provisions and make other
technical and clarifying changes to the statutes they codify.
Codification acts usually include language stating that they should
not be construed as making substantive changes in the laws they
replace. See, e.g., Pub. L. No. 97-258, § 4(a), 96 Stat. 877, 1067
(1982) (codifying title 31 of the United States Code). See also
Scheidler v. National Organization for Women, 547 U.S. 9 (2006); 69
Comp. Gen. 691 (1990).[Footnote 75]
Page 2-86 - Replace the first full paragraph with the following:
Like all other courts, the Supreme Court follows this venerable canon.
E.g., United States v. Cleveland Indians Baseball Co., 532 U.S. 200,
217 (2001) ("it is, of course, true that statutory construction 'is a
holistic endeavor' and that the meaning of a provision is 'clarified
by the remainder of the statutory scheme'"); FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120 (2000); Gustafson v. Alloyd Co., Inc., 513
U.S. 561, 569 (1995) ("the Act is to be interpreted as a symmetrical
and coherent regulatory scheme, one in which the operative words have
a consistent meaning throughout"); Brown v. Gardner, 513 U.S. 115, 118
(1994) ("ambiguity is a creature not of definitional possibilities but
of statutory context"). See also Hibbs v. Winn, 542 U.S. 88, 101
(2004) (courts should construe a statute so that "effect is given to
all its provisions, so that no part will be inoperative or
superfluous, void or insignificant"); General Dynamics Land Systems,
Inc. v. Cline, 540 U.S. 581, 598 (2004) (courts should not ignore "the
cardinal rule that statutory language must be read in context since a
phrase gathers meaning from the words around it").
Page 2-87 - Add the following bullet to the first full paragraph and
revise the second bullet as follows:
* B-302335, Jan. 15, 2004: When read as a whole, the Emergency Steel
Loan Guarantee Act of 1999, 15 U.S.C. § 1841 note, clearly
appropriated loan guarantee programs funds to the Loan Guarantee Board
and not the Department of Commerce.
* B-316533, July 31, 2008: Reading the Homeland Security Act, Pub. L.
No. 107-296, 116 Stat. 2135 (Nov. 25, 2002), as a whole, GAO construed
the reorganization and congressional notification provisions in
section 872 as a limitation on any general or inherent authority of
the Secretary to reorganize the Department of Homeland Security that
may otherwise be inferred from sections 102(a)(2) and (a)(3).
* B-303961, Dec. 6, 2004: Despite use of the phrase "notwithstanding
any other provision of law" in a provision of an appropriation act,
nothing in the statute read as a whole or its legislative history
suggested an intended waiver of the Antideficiency Act. See also B-
290125.2, B-290125.3, Dec. 18, 2002 (redacted) (viewed in isolation,
the phrase "notwithstanding any other provision of law" might be read
as exempting a procurement from GAO's bid protest jurisdiction under
the Competition in Contracting Act; however, when the statute is read
as a whole, as it must be, it does not exempt the procurement from the
Act).
Page 2-88 - Add the following bullets to the first paragraph:
* Hibbs v. Winn, 542 U.S. 88, 101 (2004): "The rule against
superfluities complements the principle that courts are to interpret
the words of a statute in context."
* Alaska Department of Environmental Conservation v. EPA,
540 U.S. 461, 489 n.13 (2004): A statute should be construed so that,
"if it can be prevented, no clause, sentence, or word shall be
superfluous, void, or insignificant."
Page 2-88 - Replace the last paragraph as follows:
Although frequently invoked, the no surplusage canon is less absolute
than the "whole statute" canon. One important caveat, previously
discussed, is that words in a statute will be treated as surplus and
disregarded if they were included in error. E.g., Chickasaw Nation v.
United States, 534 U.S. 84, 94 (2001) (emphasis in original): "The
canon requiring a court to give effect to each word 'if possible' is
sometimes offset by the canon that permits a court to reject words 'as
surplusage' if 'inadvertently inserted or if repugnant to the rest of
the statute.'" Citing Chickasaw Nation, the Court also recently
observed that the canon of avoiding surplusage will not be invoked to
create ambiguity in a statute that has a plain meaning if the language
in question is disregarded. Lamie v. United States Trustee, 540 U.S.
526, 536 (2004).
Page 2-89 - Replace the first and second paragraphs with the following:
When words used in a statute are not specifically defined, they are
generally given their "plain" or ordinary meaning rather than some
obscure usage. E.g., Engine Manufacturers Ass'n v. South Coast Air
Quality Management District, 541 U.S. 246 (2004); BedRoc Limited, LLC
v. United States, 541 U.S. 176 (2004); Asgrow Seed Co. v. Winterboer,
513 U.S. 179, 187 (1995); Federal Deposit Insurance Corp. v. Meyer,
510 U.S. 471, 476 (1994); Mallard v. United States, 490 U.S. 296, 301
(1989); B-261193, Aug. 25, 1995; 70 Comp. Gen. 705 (1991); 38 Comp.
Gen. 812 (1959).
One commonsense way to determine the plain meaning of a word is to
consult a dictionary. E.g., Mallard, 490 U.S. at 301; American Mining
Congress v. EPA, 824 F.2d 1177, 1183-84 & n. 7 (D.C. Cir. 1987). Thus,
the Comptroller General relied on the dictionary in B-251189, Apr. 8,
1993, to hold that business suits did not constitute "uniforms," which
would have permitted the use of appropriated funds for their purchase.
See also B-302973, Oct. 6, 2004; B-261522, Sept. 29, 1995.
Page 2-90 - Replace the second full paragraph with the following:
Several different canons of construction revolve around these
seemingly straightforward notions. Before discussing some of them, it
is important to note once more that these canons, like most others,
may or may not make sense to apply in particular settings. Indeed, the
basic canon that the same words have the same meaning in a statute is
itself subject to exceptions. In Cleveland Indians Baseball Club, the
Court cautioned: "Although we generally presume that identical words
used in different parts of the same act are intended to have the same
meaning, ... the presumption is not rigid, and the meaning [of the
same words] well may vary with the purposes of the law." Cleveland
Indians Baseball Club, 532 U.S. at 213 (citations and quotation marks
omitted). To drive the point home, the Court quoted the following
admonition from a law review article:
"The tendency to assume that a word which appears in two or more legal
rules, and so in connection with more than one purpose, has and should
have precisely the same scope in all of them ... has all the tenacity
of original sin and must constantly be guarded against."
Id. See also General Dynamics Land Systems, Inc. v. Cline,
540 U.S. 581, 594-96 and fn. 8 (2004) (quoting the same law review
passage, which it notes "has become a staple of our opinions"). Of
course, all bets are off if the statute clearly uses the same word
differently in different places. See Robinson v. Shell Oil Co., 519
U.S. 337, 343 (1997) ("once it is established that the term
'employees' includes former employees in some sections, but not in
others, the term standing alone is necessarily ambiguous").
Page 2-90 - Insert the following before the last partial paragraph:
In 2007, the Court applied the exception described in the Cleveland
Indians Baseball Club case in Environmental Defense v. Duke Energy
Corp., 549 U.S. 561 (2007) (upholding differing regulatory definitions
of the same statutory term contained in two sections of the Clean Air
Act). Rejecting the lower court's holding that there is an
"effectively irrebuttable" presumption that the same defined term in
different provisions of the same statute must be "interpreted
identically," the Court pointed out simply that "context counts."
Environmental Defense, 549 U.S. at 575-76.
Page 2-93 - Replace the first full paragraph with the following:
Likewise, a statute's grammatical structure is useful but not
conclusive. Lamie v. United States Trustee, 540 U.S. 526, 534-35
(2004) (the mere fact that a statute is awkwardly worded or even
ungrammatical does not make it ambiguous). Nevertheless, the Court
sometimes gives significant weight to the grammatical structure of a
statute. For example, in Barnhart v. Thomas, 540 U.S. 20, 26 (2003),
the Court rejected the lower court's construction of a statute in part
because it violated the grammatical "rule of the last antecedent."
Also, in Arcadia, Ohio v. Ohio Power Co., 498 U.S. 73 (1991), the
Court devoted considerable attention to the placement of the word "or"
in a series of clauses. It questioned the interpretation proffered by
one of the parties that would have given the language an awkward
effect, noting: "In casual conversation, perhaps, such absentminded
duplication and omission are possible, but Congress is not presumed to
draft its laws that way." Arcadia, 498 U.S. at 79. By contrast, in
Nobelman v. American Savings Bank, 508 U.S. 324, 330 (1993), the Court
rejected an interpretation, noting: "We acknowledge that this reading
of the clause is quite sensible as a matter of grammar. But it is not
compelled."
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The same considerations apply to a statute's popular name and to the
headings, or titles, of particular sections of the statute. See Intel
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 242 (2004) ("A
statute's caption ... cannot undo or limit its text's plain meaning").
See also Immigration & Naturalization Service v. St. Cyr, 533 U.S.
289, 308-09 (2001); Pennsylvania Department of Corrections v. Yeskey,
524 U.S. 206, 212 (1998). In St. Cyr, the Supreme Court concluded that
a section entitled "Elimination of Custody Review by Habeas Corpus"
did not, in fact, eliminate habeas corpus jurisdiction. It found that
the substantive terms of the section were less definitive than the
title. See also McConnell v. Federal Election Commission, 540 U.S. 93,
180 (2003).
Page 2-94 - Replace the second full paragraph with the following:
Preambles. Federal statutes often include an introductory "preamble"
or "purpose" section before the substantive provisions in which
Congress sets forth findings, purposes, or policies that prompted it
to adopt the legislation. Such preambles have no legally binding
effect. However, they may provide indications of congressional intent
underlying the law. Sutherland states with respect to preambles:
"The settled principle of law is that the preamble cannot control the
enacting part of the statute in cases where the enacting part is
expressed in clear, unambiguous terms. In case any doubt arises in the
enacted part, the preamble may be resorted to to help discover the
intention of the law maker."
2A Sutherland, § 47:04 at 221-22.80 For a recent example in which the
Court used statutory findings to inform its interpretation of
congressional intent, see General Dynamics Land Systems, Inc. v Cline,
540 U.S. 581, 589-91 (2004).
6. Legislative History:
Page 2-96 - Replace footnote number 81 with the following:
81 The majority opinion in Association of American Physicians &
Surgeons placed heavy reliance on Public Citizen, noting that "[t]he
Court adopted, we think it is fair to say, an extremely strained
construction of the word 'utilized' in order to avoid the
constitutional question." Association of American Physicians &
Surgeons, 997 F.2d at 906. Both Public Citizen and Association of
American Physicians & Surgeons drew strongly worded concurring
opinions along the same lines. The concurring opinions maintained that
FACA clearly applied by its plain terms to the respective groups, but
that its application was unconstitutional as so applied. The District
of Columbia Circuit Court of Appeals clarified its holding in American
Physicians & Surgeons in 2005. In re Cheney, 406 F.3d 723 (D.C. Cir.
2005). There, in order to avoid "severe separation-of-powers problems"
in applying FACA on the basis that private parties were involved with
a committee in the Executive Office of the President, the court held
that for purposes of FACA "a committee is composed wholly of federal
officials if the President has given no one other than a federal
official a vote in or, if the committee acts by consensus, a veto over
the committee's decisions." Id. at 728.
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The use becomes improper when the line is crossed from using
legislative history to resolve things that are not clear in the
statutory language to using it to rewrite the statute. E.g., Shannon
v. United States, 512 U.S. 573, 583 (1994) (declining to give effect
to "a single passage of legislative history that is no way anchored in
the text of the statute"); Ratzlaf v. United States, 510 U.S. 135, 147-
48 (1994) (declining to "resort to legislative history to cloud a
statutory text that is clear"); Brill v. Countrywide Home Loans, Inc.,
427 F.3d 446, 448 (7th Cir. 2005) (noting that "when the legislative
history stands by itself, as a naked expression of 'intent'
unconnected to any enacted text, it has no more force than an opinion
poll of legislators—less, really, as it speaks for fewer"). The
Comptroller General put it this way:
Page 2-98 - Insert the following after the first full paragraph
(including the quoted language):
Legislative history versus incorporation by reference:
At this point in the discussion a distinction should be made between
legislative sources being consulted in the manner described previously
and an outside source to which a statutory provision expressly refers.
Incorporation by reference is the use of legislative language to make
extra-statutory material part of the legislation by indicating that
the extra-statutory material should be treated as if it were written
out in full in the legislation. See generally Black's Law Dictionary
781 (8th ed. 2004). For example, in a 2001 decision, the United States
District Court for the District of Columbia upheld the incorporation
by reference of an unenacted bill into an appropriations law. Hershey
Foods Corp. v. United States Department of Agriculture, 158 F. Supp.
2d 37 (D.D.C. 2001), aid, 293 F.3d 520 (D.C. Cir. 2002). In that case,
the Consolidated Appropriations Act for fiscal year 2000 provided that
"H.R. 3428 of the 106th Congress, as introduced on November 17, 1999"
is "hereby enacted into law." Id. at 38. The unenacted bill that was
incorporated into the appropriations law had been published in the
Congressional Record. The court said that "Congress may incorporate by
cross-reference in its bills if it chooses to legislate in that
manner." Id. at 41.
Incorporation by reference is a well-accepted legislative tool. Id.
("Laws containing cross-references do not appear to be uncommon.").
Indeed, there are numerous instances in which the Supreme Court, for
more than 100 years, has accepted incorporation by reference without
objection. See, e.g., Tennessee v. Lane, 541 U.S. 509, 517 (2004);
United States v. Sharpnack, 355 U.S. 286, 293 (1958); In re Heath, 144
U.S. 92, 94 (1892). In all of these cases, the language of the
statutes evidenced clear congressional intent to incorporate by
reference, and the referenced material was specifically ascertainable
from the legislative language so all would know with certainty the
duties, terms, conditions, and constraints enacted into law.
In a 2008 decision, GAO considered the legal effect of seven
appropriations provisions in the Consolidated Appropriations Act,
2008, Pub. L. No. 110-161, 121 Stat. 1844 (Dec. 26, 2007), which
incorporated by reference specified passages of an explanatory
statement of the House Committee on Appropriations that was printed in
the Congressional Record on December 17, 2007. B-316010, Feb. 25,
2008. This explanatory statement contained more specific allocations
for the agencies affected. After reviewing the language of the seven
provisions, GAO determined that:
"Because the language of the seven provisions clearly and
unambiguously expresses an intent to appropriate amounts as allocated
in the explanatory statement and because reference to the explanatory
statement permits the agencies and others to ascertain with certainty
the amounts and purposes for which these appropriations are available,
these provisions establish the referenced allocations contained in the
explanatory statement as legally binding restrictions on the agencies'
appropriations."
Id. at 8. GAO thus concluded that the affected agencies were required
to obligate and expend amounts appropriated in the seven provisions in
accordance with the referenced allocations in the explanatory
statement.
Page 2-99 - Replace the second full paragraph with the following:
However, material in committee reports, even a conference report, will
ordinarily not be used to controvert clear statutory language.
Squillacote, 739 F.2d at 1218; Hart v. United States, 585 F.2d 1025
(Ct. Cl. 1978); B-278121, Nov. 7, 1997; B-33911, B-62187, July 15,
1948. Also, it will not be used to add requirements that Congress did
not include in the statute itself. For example, where Congress
appropriates lump sum amounts without statutorily restricting the use
of those funds, "a clear inference arises that it does not intend to
impose legally binding restrictions, and indicia in committee reports
and other legislative history as to how the funds should or are
expected to be spent do not establish any legal requirements" on the
agency. 55 Comp. Gen. 307, 319 (1975); see also Hein v. Freedom From
Religion Foundation, Inc., 549 U.S., 127 S. Ct. 2553, 2568 n.7
(2007); Lincoln v. Vigil, 508 U.S. 182, 192 (1993). Also, such
material is not entitled to any weight as legislative history if the
statement in the report is unrelated to any language in the act
itself. Abrego Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir.
2006); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir.
2005).
An interesting example of the weight accorded report language which
alters the plain meaning and effect of the statutory language is in
Arlington Central School District Board of Education v. Murphy, 548
U.S. 291 (2006). In this case the issue was whether a provision of the
Individuals with Disabilities Education Act (IDEA) authorizing the
award of attorney fees and costs to parents who prevailed in lawsuits
under the act extended to costs incurred for experts. The Court
approached the issue by noting that the conditions Congress attaches
to the receipt of federal funds by states are contractual in nature
and must therefore be expressed "unambiguously" in order to give
states adequate notice of what they are accepting. Arlington Central,
548 U.S. at 296. It went on to hold that the IDEA statute did not
clearly indicate that expert fees were covered by its fee-shifting
provision. On the contrary, the Court concluded that the language of
the fee-shifting provision and other IDEA provisions strongly
suggested that expert fees were not covered. The Court was influenced
by the judicial rule that the term "costs" in fee-shifting provisions
is a term of art that generally does not include expert fees. Id. The
most striking aspect of the Court's opinion was its rejection of
legislative history from the conference report that explicitly stated
the intent to include expert costs in IDEA's fee-shifting provision.
The conference report, quoted in the opinion, could not have been
clearer: "The conferees intend that the term 'attorneys' fees as part
of the 'costs' include reasonable expenses and fees of expert
witnesses and the reasonable costs of any test or evaluation which is
found to be necessary for the preparation of the ... case." Id. at
304. Nevertheless, the Court concluded:
"Whatever weight this legislative history would merit in another
context, it is not sufficient here. Putting the legislative history
aside, we see virtually no support for respondents' position. Under
these circumstances, where everything other than the legislative
history overwhelmingly suggests that expert fees may not be recovered,
the legislative history is simply not enough."
Id. Thus, the conference report statement could not make up for the
absence of any statutory language making expert fees reimbursable. Cf.
B-307767, Nov. 13, 2006 (floor statement is not entitled to weight as
legislative history when the statute is clear on its face since the
statement provides an individual member's views and does not
necessarily represent the meaning and purpose of the lawmaking body
collectively).
Page 2-102 - Replace the first full paragraph with the following:
Statements by the sponsor of a bill are also entitled to somewhat more
weight. E.g., Schwegmann Brothers v. Calvert Distillers Corp., 341
U.S. 384, 394-95 (1951); Ex Parte Kawato, 317 U.S. 69, 77 (1942).
However, they are not controlling. General Dynamics Land Systems, Inc.
v. Cline, 540 U.S. 581, 597-99 (2004); Chrysler Corp. v. Brown, 441
U.S. 281, 311 (1979).
Page 2-104 - Replace the last paragraph with the following:
GAO naturally follows the principle that post-enactment statements do
not constitute legislative history. E.g., 72 Comp. Gen. 317 (1993); 54
Comp. Gen. 819, 822 (1975). Likewise, the Office of Legal Counsel has
virtually conceded that presidential signing statements fall within
the realm of post-enactment statements that carry no weight as
legislative history. See 17 Op. Off. Legal Counsel 131 (1993).85 In
2007, GAO examined how the federal courts have treated signing
statements in their published decisions. A search of all federal case
law since 1945 found fewer than 140 cases that cited presidential
signing statements, most commonly to supplement legislative history
such as committee reports. Courts also have cited signing statements
to establish the date of signing, provide a short summary of the
statute, explain the purpose of the statute, or describe the
underlying policy behind the statute. GAO concluded that, overall,
federal courts infrequently cite or refer to signing statements in
their published opinions. B-308603, June 18, 2007, Enclosure IV. See
also B-309928, Dec. 20, 2007, for additional discussion on signing
statements.
Page 2-105 - Replace footnote 85 with the following:
85 While this opinion stopped short of attempting "finally to decide"
the matter, it presented several powerful arguments against the
validity of signing statements as legislative history but no arguments
in favor of their use for this purpose. On June 27, 2006, the Senate
Judiciary Committee held a hearing on the subject of presidential
signing statements. Background on the hearing, including witness
statements, can be found at
http://judiciary.senate.gov/hearings/hearing.cfm?id=1969 (last visited
Feb. 4, 2009).
Page 2-105 -Add the following to the third full paragraph:
* Doe v. Chao, 540 U.S. 614, 621-23 (2004): Congress deleted from the
bill language that would have provided for the type of damage award
sought by the petitioner.
See also F. Hoffman-La Roche Ltd v. Empagran S.A., 542 U.S. 155
(2004); Resolution Trust Corp. v. Gallagher, 10 F.3d 416 423 (7th Cir.
1993); Davis v. United States, 46 Fed. Cl. 421 (2000).
7. Presumptions and "Clear Statement" Rules:
Page 2-113 - Replace the first full paragraph with the following:
There is a strong presumption against waiver of the federal
government's immunity from suit. The courts have repeatedly held that
waivers of sovereign immunity must be "unequivocally expressed." E.g.,
United States v. Nordic Village, Inc., 503 U.S. 30 (1992); Marathon
Oil Co. v. United States, 374 F.3d 1123, 1127 (Fed. Cir. 2004), cert.
denied, 544 U.S. 1031 (2005); Shoshone Indian Tribe of the Wind River
Reservation, Wyoming v. United States, 51 Fed. Cl. 60 (2001), aff'd,
364 F.3d 1339 (Fed. Cir. 2004), cert. denied, 544 U.S. 973 (2005).
Legislative history does not help for this purpose. The relevant
statutory language in Nordic Village was ambiguous and could have been
read, evidently with the support of the legislative history, to impose
monetary liability on the United States. The Court rejected such a
reading, applying instead the same approach as described above in its
federalism jurisprudence:
"Legislative history has no bearing on the ambiguity point. As in the
Eleventh Amendment context, see Hoffman, supra, ... the 'unequivocal
expression' of elimination of sovereign immunity that we insist upon
is an expression in statutory text. If clarity does not exist there,
it cannot be supplied by a committee report."
Nordic Village, 503 U.S. at 37.
[End of section]
Chapter 3: Agency Regulations and Administrative Discretion:
A. Agency Regulations:
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As a conceptual starting point, agency regulations fall into three
broad categories. First, every agency head has the authority, largely
inherent but also authorized generally by 5 U.S.C. § 301,[Footnote 1]
to issue regulations to govern the internal affairs of the agency.
Regulations in this category may include such subjects as conflicts of
interest, employee travel, and delegations to organizational
components. This statute is nothing more than a grant of authority for
what are called "housekeeping" regulations. Chrysler Corp. v. Brown,
441 U.S. 281, 309 (1979); Smith v. Cromer, 159 F.3d 875, 878 (4th Cir.
1998), cert. denied, 528 U.S. 826 (1999); NLRB v. Capitol Fish Co.,
294 F.2d 868, 875 (5th Cir. 1961). It confers "administrative power
only." United States v. George, 228 U.S. 14, 20 (1913); B-302582,
Sept. 30, 2004; 54 Comp. Gen. 624, 626 (1975). Thus, the statute
merely grants agencies authority to issue regulations that govern
their own internal affairs; it does not authorize rulemaking that
creates substantive legal rights. Schism v. United States, 316 F.3d
1259, 1278-84 (Fed. Cir. 2002), cert. denied, 539 U.S. 910 (2003).
1. The Administrative Procedure Act:
Page 3-6 - Replace the cite after the quoted language carried over
from page 3-5 with the following paragraph:
Richard J. Pierce, Jr., Administrative Law Treatise, § 7.4 at 442 (4th
ed. 2000) (citations omitted). Two decisions make clear that the
courts will insist upon at least some ascertainable and coherent
rationale: Northeast Maryland Waste Disposal Authority v. EPA, 358
F.3d 936, 948 (D.C. Cir. 2004) (the court remanded a rule to the
agency because it was "frankly, stunned to find" that the agency had
provided "not one word in the proposed or final rule" (emphasis in
original) to explain a key aspect of its rule), and International
Union, United Mine Workers of America v. Department of Labor, 358 F.3d
40, 45 (D.C. Cir. 2004) (finding that the agency's stated rationale to
withdraw a proposed rule was disjointed and conclusory, the court
returned the matter to the agency "so that it may either proceed with
the ... rulemaking or give a reasoned account of its decision not to
do so").
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As a starting point, anything that falls within the definition of a
"rule" in 5 U.S.C. § 551(4) and for which formal rulemaking is not
required, is subject to the informal rulemaking procedures of 5 U.S.C.
§ 553 unless exempt. This statement is not as encompassing as it may
seem, since section 553 itself provides several very significant
exemptions. These exemptions, according to a line of decisions by the
U.S. Court of Appeals for the District of Columbia Circuit, will be
"narrowly construed and only reluctantly countenanced." Jib fry v.
Federal Aviation Administration, 370 F.3d 1174, 1179 (D.C. Cir. 2004),
cert. denied, 543 U.S. 1146 (2005); Utility Solid Waste Activities
Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001); Asiana Airlines v.
Federal Aviation Administration, 134 F.3d 393, 396-97 (D.C. Cir.
1998); Tennessee Gas Pipeline Co. v. Federal Energy Regulatory
Commission, 969 F.2d 1141, 1144 (D.C. Cir. 1992); New Jersey
Department of Environmental Protection v. EPA, 626 F.2d 1038, 1045
(D.C. Cir. 1980).8 Be that as it may, they appear in the statute and
cannot be disregarded. For example, section 553 does not apply to
matters "relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts." 5 U.S.C. § 553(a)(2).
Page 3-9 - Replace footnote 8 with the following:
[8] In Utility Solid Waste Activities Group, 236 F.3d at 754-55, the
court held that the "good cause" exemption in section 553(b) does not
allow an agency to forego notice and comment when correcting a
technical error in a regulation. Likewise, the court held that
agencies have no "inherent power" to correct such technical errors
outside of the APA procedures. Id. at 752-54. The decision in Jib fry
provides an example of a case upholding an agency's use of the good
cause exemption based on emergency conditions involving potential
security threats. Jifry, 370 F.3d at 1179.
4. Waiver of Regulations:
Page 3-21 -Replace the first full paragraph with the following:
Sometimes legislative regulations or the statutes they implement do
explicitly authorize "waivers" in certain circumstances. Here, of
course, the waiver authority is an integral part of the underlying
statutory or regulatory scheme. Accordingly, courts give effect to
such waiver provisions and, indeed, they may even hold that an
agency's failure to consider or permit waiver is an abuse of
discretion. However, the courts usually accord considerable deference
to agency decisions on whether or not to grant discretionary waivers.
For illustrative cases, see BDPCS, Inc. v. FCC, 351 F.3d 1177 (D.C.
Cir. 2003); People of the State of New York & Public Service
Commission of the State of New York v. FCC, 267 F.3d 91 (2nd Cir.
2001); BellSouth Corporation v. FCC, 162 F.3d 1215 (D.C. Cir. 1999);
Rauenhorst v. United States Department of Transportation, 95 F.3d 715
(8th Cir. 1996).
B. Agency Administrative Interpretations:
1. Interpretation of Statutes:
Page 3-29 - Replace the second full paragraph with the following:
In what is now recognized as one of the key cases in determining how
much "deference" is due an agency interpretation, Chevron, Inc. v.
Natural Resources Defense Council, 467 U.S. 837 (1984), the Court
formulated its approach to deference in terms of two questions. The
first question is "whether Congress has directly spoken to the precise
question at issue." Id. at 842. If it has, the agency must of course
comply with clear congressional intent, and regulations to the
contrary will be invalidated. Thus, before you ever get to questions
of deference, it must first be determined that the regulation is not
contrary to the statute, a question of delegated authority rather than
deference. "If a court, employing traditional tools of statutory
construction, ascertains that Congress had an intention on the precise
question at issue, that intention is the law and must be given
effect." Id. at 843 n.9. An example is General Dynamics Land Systems,
Inc. v. Cline, 540 U.S. 581 (2004), in which the Court declined to
give Chevron deference, or any lesser degree of deference, to an
agency interpretation that it found to be "clearly wrong" as a matter
of statutory construction, since the agency interpretation was
contrary to the act's text, structure, purpose, history, and
relationship to other federal statutes.
Page 3-29 - Replace footnote number 29 with the following:
29 GAO's desire for agency comments applies to audit reports as well
as legal decisions. However, in view of the fundamental differences
between the two products, the process differs. For GAO's policy for
audit reports, see GAO's Agency Protocols, GAO-03-232SP (Washington,
D.C.: Dec. 2, 2002). For a legal decision, GAO's typical practice is
to solicit the agency's position on the legal issue(s) involved before
a draft is ever written. A "development letter" is used to document
facts, refine legal issues, and obtain the agency's perspective on the
law and its implementation. Accordingly, draft legal decisions are not
submitted for comment. See GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at www.gao.govilegal/resources.html.
Page 3-30 - Replace the second full paragraph, with the following and
insert new footnote number 30a as follows:
When the agency's interpretation is in the form of a regulation with
the force and effect of law, the deference, as we have seen, is at its
highest.[Footnote 30] The agency's position is entitled to Chevron
deference and should be upheld unless it is arbitrary or capricious.
There should be no question of substitution of judgment.[Footnote 30a]
If the agency position can be said to be reasonable or to have a
rational basis within the statutory grant of authority, it should
stand, even though the reviewing body finds some other position
preferable. See, e.g., Household Credit Services, Inc. v. Pfennig, 541
U.S. 232 (2004); Barnhart v. Thomas, 540 U.S. 20 (2003); Yellow
Transportation, Inc. v. Michigan, 537 U.S. 36 (2002); Shalala v.
Illinois Council on Long Term Care, Inc., 529 U.S. 1, 20-21 (2000);
American Telephone & Telegraph Corp. v. Iowa Utility Board,
525 U.S. 366 (1999). Chevron deference is also given to authoritative
agency positions in formal adjudication. See Immigration &
Naturalization Service v. Aguirre-Aguirre, 526 U.S. 415 (1999)
(holding that a Bureau of Indian Affairs statutory interpretation
developed in case-by-case formal adjudication should be accorded
Chevron deference). For an extensive list of Supreme Court cases
giving Chevron deference to agency statutory interpretations found in
rulemaking or formal adjudication, see United States v. Mead Corp.,
533 U.S. 218, 231 at n.12 (2001).
Page 3-30 - Insert the following for new footnote number 30a:
[30a] This is true even if the statute in question has been construed
previously by a court, unless the court interpreted the statute
according to "the unambiguous terms of the statute[, leaving] no room
for agency discretion." National Cable & Telecommunications Ass'n v.
Brand X Internet Services, 545 U.S. 967 (2005). This result stems from
the policy underlying Chevron deference, that is, the presumption that
Congress, when it leaves ambiguity in a statute, means for the agency
to resolve the ambiguity, exercising whatever degree of discretion the
ambiguity allows. "It is for agencies, not courts, to fill statutory
gaps." Id.
Page 3-32 - Replace the third bulleted paragraph with the following:
* Evidence (or lack thereof) of congressional awareness of, and
acquiescence in, the administrative position. United States v.
American Trucking Ass'n, 310 U.S. 534, 549-50 (1940); Helvering v.
Winmill, 305 U.S. 79, 82-83 (1938); Norwegian Nitrogen Products Co. v.
United States, 288 U.S. 294, 313-15 (1933); Collins v. United States,
946 F.2d 864 (Fed. Cir. 1991); Davis v. Director, Office of Workers'
Compensation Programs, Department of Labor, 936 F.2d 1111, 1115-16
(10th Cir. 1991); 41 Op. Att'y Gen. 57 (1950); B-114829-
0.M., July 17, 1974. Interestingly, in Coke v. Long Island Care At
Home, Ltd., 376 F.3d 118 (2nd Cir. 2004), the court acknowledged the
potential relevance of congressional acquiescence to a 30year-old
regulation, noting that Congress had amended the applicable statute
seven times over the life of the regulation without expressing any
disapproval of it. However, the court ultimately rejected the
congressional acquiescence argument—according to the court,
"affectionately known as the 'dog didn't bark canon"'—and held the
regulation invalid. Id. at 130 and n.5.
Page 3-33 - Replace the first full paragraph with the following:
More recent decisions further indicate that Chevron deference may
extend beyond legislative rules and formal adjudications. Most
notably, the Supreme Court observed in dicta in Barnhart v. Walton,
535 U.S. at 222, that Mead Corp. "denied [any] suggestion" in
Christensen that Chevron deference was limited to interpretations
adopted through formal rulemaking. The Barnhart opinion went on to say
that:
"In this case, the interstitial nature of the legal question, the
related expertise of the Agency, the importance of the question to the
administration of the statute, the complexity of that administration,
and the careful consideration the Agency has given the question over a
long period of time all indicate that Chevron provides the appropriate
legal lens through which to view the legality of the Agency
interpretation here at issue."
Id. at 222.[Footnote 33] See also General Dynamics Land Systems, Inc.
v. Cline, 540 U.S. 581 (2004); Edelman v. Lynchburg College, 535 U.S.
106, 114 (2002). Two additional decisions are instructive in terms of
the limits of Chevron. In both cases the Court found that the
issuances containing agency statutory interpretations were entitled to
some weight, but not Chevron deference. Raymond B. Yates, M.D., P.C.,
Profit Sharing Plan v. Hendon, 541 U.S. 1 (agency advisory opinion);
Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461
(2004) (internal agency guidance memoranda).
Page 3-33 - Replace the third full paragraph with the following:
Circuit court decisions have added to the confusion. See Coke v. Long
Island Care at Home, Ltd., 376 F.3d 118 (2nd Cir. 2004) (the court
found that a regulation was not entitled to Chevron deference, despite
congressional acquiescence and even though the statute was ambiguous
and the regulation was issued through notice and comment rulemaking,
because evidence showed the agency intended the regulation to be only
an "interpretive" as opposed to a "legislative" rule); Doe v. United
States, 372 F.3d 1347, 1357-59 (Fed. Cir. 2004), cert. denied, 544
U.S. 904 (2005) (court applied Chevron deference to an Office of
Personnel Management regulation issued under general rulemaking
authority); James v. Von Zemenszky, 301 F.3d 1364 (Fed. Cir. 2002)
(ignoring Barnhart factors because the agency statutory interpretation
contained in a directive and handbook "fell within the class of
informal agency interpretations that do not ordinarily merit Chevron
deference"); Federal Election Commission v. National Rifle Ass'n, 254
F.3d 173 (D.C. Cir. 2001) (holding that Federal Election Committee
(FEC) advisory opinions are entitled to Chevron deference); Matz v.
Household International Tax Reduction Investment Plan, 265 F.3d 572
(7th Cir. 2001), cert. denied, 535 U.S. 954 (2002) (holding that an
Internal Revenue Service (IRS) statutory interpretation in an amicus
brief, supported by an IRS Revenue Ruling and agency manual, was not
entitled to Chevron deference); Klinedinst v. Swift Investments, Inc.,
260 F.3d 1251 (11th Cir. 2001) (holding that a Department of Labor
handbook was not due Chevron deference); TeamBank v. McClure,
279 F.3d 614 (8th Cir. 2002) (holding that Office of the Controller of
the Currency informal adjudications are due Chevron deference); In re
Sealed Case, 223 F.3d 775 (D.C. Cir. 2000) (holding that FEC's
probable cause determinations are entitled to Chevron deference). As
Professor Pierce notes:
"After Mead, it is possible to know only that legislative rules and
formal adjudications are always entitled to Chevron deference, while
less formal pronouncements like interpretative rules and informal
adjudications may or may not be entitled to Chevron deference. The
deference due a less formal pronouncement seems to depend on the
results of judicial application of an apparently open-ended list of
factors that arguably qualify as 'other indication[s] of a comparable
congressional intent' to give a particular type of agency
pronouncement the force of law."[Footnote 34]
Page 3-35 - Replace the last paragraph with the following:
The deference principle does not apply to an agency's interpretation
of a statute that is not part of its program or enabling legislation
or is a statute of general applicability. See Adams v. SEC, 287 F.3d
183 (D.C. Cir. 2002); Association of Civilian Technicians v. Federal
Labor Relations Authority, 200 F.3d 590 (9th Cir. 2000); Contractor's
Sand & Gravel v. Federal Mine Safety & Health Commission, 199 F.3d
1335 (D.C. Cir. 2000). In "split-jurisdiction" situations, where
multiple agencies share specific statutory responsibility, courts have
determined that Chevron deference is due to the primary executive
branch enforcer and the agency accountable for overall administration
of the statutory scheme. See Martin v. Occupational Safety and Health
Review Commission, 499 U.S. 144 (1991); Collins v. National
Transportation Safety Board, 351 F.3d 1246 (D.C. Cir. 2003).
2.Interpretation of Agency’s Own Regulations:
Page 3-38 - Insert the following new paragraph after the quote at the
top of the page:
Recent cases according Seminole Rock deference to agency
interpretations of their regulations include: Entergy Services, Inc.
v. Federal Energy Regulatory Commission, 375 F.3d 1204, 1209 (D.C.
Cir. 2004); Castlewood Products, L.L.C. v. Norton, 365 F.3d 1076, 1079
(D.C. Cir. 2004); In re Sullivan, 362 F.3d 1324, 1328 (Fed. Cir.
2004). In WHX Corp. v. SEC, 362 F.3d 854, 860 (D.C. Cir. 2004), the
court did not defer to an agency interpretation because the
interpretation rested entirely on staff advice and there was no formal
agency precedent or official interpretative guideline on point.
Page 3-39 - Insert the following after the last full paragraph:
Recently the Court held than an agency's interpretation of its own
regulation is entitled to Auer deference only when the regulation
interpreted is itself a product of the agency's expertise and
authority in a given area. In Gonzales v. Oregon, 546 U.S. 243 (2006),
the Court examined an interpretive rule issued by the Attorney
General, which stated that assisting suicide was not a "legitimate
medical purpose" for which doctors could prescribe drugs, and doctors
doing so would violate the Controlled Substance Act (CSA). Id. at 254.
The Attorney General argued that the rule was entitled to Auer
deference because it interpreted the term "legitimate medical purpose"
as that term was used in a 1971 regulation issued by the Attorney
General under the CSA.
However, the Court found Auer deference unwarranted, because rather
than reflecting the Attorney General's deliberation and imprimatur,
the 1971 regulation merely mimicked the language of the CSA. The Court
stated:
"In Auer, the underlying regulations gave specificity to a statutory
scheme ... and reflected the considerable experience and expertise the
Department of Labor had acquired over time with respect to the
complexities of the [statutory scheme]. Here, on the other hand, the
underlying regulation does little more than restate the terms of the
statute itself. The language the Interpretive Rule addresses comes
from Congress, not the Attorney General, and the near-equivalence of
the statute and regulation belies the Government's argument for Auer
deference."
Gonzales, 546 U.S. at 256-57.
In contrast to some of the more muddled deference cases discussed
previously, Gonzales draws a bright line when it comes to an agency's
interpretation of its own regulation. "An agency does not acquire
special authority to interpret its own words when, instead of using
its expertise and experience to formulate a regulation, it has elected
merely to paraphrase the statutory language." Id. at 257.
C.Administrative Discretion:
1.Introduction:
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Under the Administrative Procedure Act (APA), action that is
"committed to agency discretion by law" is not subject to judicial
review. 5 U.S.C. § 701(a)(2). As the Supreme Court has pointed out,
this is a "very narrow exception" applicable in "rare instances"
where, quoting from the APA's legislative history, "statutes are drawn
in such broad terms that in a given case there is no law to apply."
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410
(1971). As noted, the "no law to apply" exception is uncommon, and
most exercises of discretion will be found reviewable at least to some
extent.37 See Raymond Proffitt Foundation v. Corps of Engineers, 343
F.3d 199, 207 (3rd Cir. 2003); City of Los Angeles v. Department of
Commerce, 307 F.3d 859 (9th Cir. 2002); Drake v. Federal Aviation
Administration, 291 F.3d 59 (D.C. Cir. 2002), cert. denied,
537 U.S. 1193 (2003); Fox Television Stations, Inc. v. FCC, 280 F.3d
1027 (D.C. Cir. 2002); Diebold v. United States, 947 F.2d 787 (6th
Cir. 1991).
Page 3-41 -Replace footnote number 37 with the following:
[37] However, agency inaction in declining to initiate enforcement or
other regulatory action is subject to "a presumption of
unreviewability," although that presumption is rebuttable. Heckler v.
Chaney, 470 U.S. 821 (1985). Another obvious exception is if a statute
explicitly precludes judicial review. See Jordan Hospital, Inc. v.
Shalala, 276 F.3d 72 (1st Cir.), cert. denied, 537 U.S. 812 (2002);
National Coalition to Save Our Mall v. Norton, 269 F.3d 1092 (D.C.
Cir. 2001), cert. denied, 537 U.S. 813 (2002) (construction of World
War II memorial); Ismailov v. Reno, 263 F.3d 851 (8th Cir. 2001)
(refusal to extend deadline for asylum application). See also Ohio
Public Interest Research Group, Inc. v. Whitman, 386 F.3d 792 (6th
Cir. 2004); Godwin v. Secretary of Housing and Urban Development, 356
F.3d 310 (D.C. Cir. 2004).
Page 3-42 - Insert the following new paragraphs after the last
bulleted paragraph:
Even where the APA does not flatly preclude judicial review, the
courts will entertain a lawsuit under the Act only if it involves an
"agency action" that is subject to redress under the Act. In Norton v.
Southern Utah Wilderness Alliance, 542 U.S. 55 (2004), the Court
rejected a suit under the APA to compel the Interior Department to
regulate the use of off-road vehicles on certain federal wilderness
lands. The Court concluded that there was no legal mandate requiring
the agency to take such action. The Court described the jurisdictional
parameters of the APA as follows:
"The APA authorizes suit by `a person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action
within the meaning of a relevant statute.' 5 U.S.C. § 702. Where no
other statute provides a private right of action, the 'agency action'
complained of must be final agency action.' § 704 (emphasis added).
'Agency action' is defined in § 551(13) to include 'the whole or a
part of an agency rule, order, license, sanction, relief, or the
equivalent or denial thereof, or failure to act.' (Emphasis added.)
The APA provides relief for a failure to act in § 706(1): 'The
reviewing court shall ... compel agency action unlawfully withheld or
unreasonably delayed.'
"Sections 702, 704, and 706(1) all insist upon an 'agency action,'
either as the action complained of (in §§ 702 and 704) or as the
action to be compelled (in § 706(1))."
Norton, 542 U.S. at 61-62. Thus, the Court held that in order to be
viable, an APA claim seeking to compel an agency to act must point to
"a discrete agency action that it is required to take." Id. at 64
(emphasis in original). This standard precludes "broad programmatic
attack[s]." Id. The Court added:
"The principal purpose of the APA limitations we have discussed—and of
the traditional limitations upon mandamus from which they were derived—
is to protect agencies from undue judicial interference with their
lawful discretion, and to avoid judicial entanglement in abstract
policy disagreements which courts lack both expertise and information
to resolve."
Id.
2. Discretion Is Not Unlimited:
Page 3-43 - Replace the first full paragraph with the following:
In Lincoln v. Vigil, 508 U.S. 182 (1993), the Supreme Court concluded
that, absent statutory elaboration, decisions about how to allocate
funds within a lump-sum appropriation are committed to agency
discretion by law. The Court noted that "the very point of a lump-sum
appropriation is to give an agency the capacity to adapt to changing
circumstances and meet its statutory responsibilities in what it sees
as the most effective or desirable way." Id. at 191. Therefore, the
Court held that judicial review of the agency's decision to
discontinue a program that had been previously funded through a lump-
sum appropriation was precluded. (See Chapter 6 for a more detailed
discussion of the availability of appropriations.) See also Hein v.
Freedom From Religion Foundation, Inc., 549 U.S. , 127 S. Ct. 2553
(2007); 55 Comp. Gen. 307 (1975); B-278121, Nov. 7, 1997.
Page 3-43 - Replace the second full paragraph with the following:
Discretion must be exercised before the obligation is incurred.
Approval after the fact is merely a condoning of what has already been
done and does not constitute the exercise of discretion. 22 Comp. Gen.
1083 (1943); 14 Comp. Gen. 698 (1935); A-57964, Jan. 30, 1935. (This
point should not be confused with an agency's occasional ability to
ratify an otherwise unauthorized act. See, e.g., B-306353, Oct. 26,
2005.)
4. Regulations May Limit Discretion:
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For additional authority on the proposition that an agency can, by
regulation, restrict otherwise discretionary action, see United States
v. Nixon, 418 U.S. 683 (1974); Vitarelli v. Seaton, 359 U.S. 535
(1959); Service v. Dulles, 354 U.S. 363 (1957); United States v.
Morgan, 193 F.3d 252 (4th Cir. 1999); Clarry v. United States, 85 F.3d
1041 (2nd Cir. 1996); Waldron v. Immigration & Naturalization Service,
17 F.3d 511, 519 (2nd Cir. 1994); Montilla v. Immigration &
Naturalization Service, 926 F.2d 162 (2nd Cir. 1991). See also B-
316381, July 18, 2008; 67 Comp. Gen. 471 (1988).
[End of section]
Chapter 4: Availability of Appropriations: Purpose:
Page 4-3 - Replace part of the index for section 11 as follows:
11. Lobbying, Publicity or Propaganda, and Related Matters:
a. Introduction;
b. Penal Statutes;
c. Appropriation Act Restrictions:
(1) Origin and general considerations;
(2) Self-aggrandizement;
(3) Covert propaganda;
(4) Purely partisan materials;
(5) Pending legislation: Overview;
(6) Cases involving "grassroots" lobbying violations;
(7) Pending legislation: Cases in which no violation was found;
(8) Pending legislation: Providing assistance to private lobbying
groups;
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying;
(10)Federal employees' communications with Congress.
A. General Principles:
1. Introduction: 31 U.S.C. § 1301(a):
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Simple, concise, and direct, this statute was originally enacted in
1809 (ch. 28, § 1, 2 Stat. 535, (Mar. 3, 1809)) and is one of the
cornerstones of congressional control over the federal purse. Because
money cannot be paid from the Treasury except under an appropriation
(U.S. Const. art. I, § 9, cl. 7), and because an appropriation must be
derived from an act of Congress, it is for Congress to determine the
purposes for which an appropriation may be used. Simply stated, 31
U.S.C. § 1301(a) says that public funds may be used only for the
purpose or purposes for which they were appropriated. It prohibits
charging authorized items to the wrong appropriation, and unauthorized
items to any appropriation. See, e.g., B-302973, Oct. 6, 2004 (agency
could not charge authorized activities such as cost comparison studies
to an appropriation that specifically prohibits its use for such
studies). Anything less would render congressional control largely
meaningless. An earlier Treasury Comptroller was of the opinion that
the statute did not make any new law, but merely codified what was
already required under the Appropriations Clause of the Constitution.
4 Lawrence, First Comp. Dec. 137, 142 (1883).
2. Determining Authorized Purposes:
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Once the purposes have been determined by examining the various pieces
of legislation, 31 U.S.C. § 1301(a) comes into play to restrict the
use of the appropriation to these purposes only, together with one
final generic category of payments—payments authorized under general
legislation applicable to all or a defined group of agencies and not
requiring specific appropriations. For example, legislation enacted in
1982 amended 12 U.S.C. § 1770 to authorize federal agencies to provide
various services, including telephone service, to employee credit
unions. Pub. L. No. 97-320, § 515, 96 Stat. 1469, 1530 (Oct. 15,
1982). Prior to this legislation, an agency would have violated 31
U.S.C. § 1301(a) by providing telephone service to a credit union,
even on a reimbursable basis, because this was not an authorized
purpose under any agency appropriation. 60 Comp. Gen. 653 (1981). The
1982 amendment made the providing of special services to credit unions
an authorized agency function, and hence an authorized purpose, which
it could fund from unrestricted general operating appropriations. 66
Comp. Gen. 356 (1987). Similarly, a recently enacted statute gives
agencies the discretion to use appropriated funds to pay the expenses
their employees incur for obtaining professional credentials.
5 U.S.C. § 5757(a); B-289219, Oct. 29, 2002. See also B-302548, Aug.
20, 2004 (section 5757(a) does not authorize the agency to pay for an
employee's membership in a professional association unless membership
is a prerequisite to obtaining the professional license or
certification). Prior to this legislation, agencies could not use
appropriated funds to pay fees incurred by their employees in
obtaining professional credentials. See, e.g., 47 Comp. Gen. 116
(1967). Other examples are interest payments under the Prompt Payment
Act (31 U.S.C. §§ 3901-3907) and administrative settlements less than
$2,500 under the Federal Tort Claims Act (28 U.S.C. §§ 2671-2680).
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Where an appropriation specifies the purpose for which the funds are
to be used, 31 U.S.C. § 1301(a) applies in its purest form to restrict
the use of the funds to the specified purpose. For example, an
appropriation for topographical surveys in the United States was not
available for topographical surveys in Puerto Rico. 5 Comp. Dec. 493
(1899). Similarly, an appropriation to install an electrical
generating plant in the customhouse building in Baltimore could not be
used to install the plant in a nearby post office building, even
though the plant would serve both buildings and thereby reduce
operating expenses. 11 Comp. Dec. 724 (1905). An appropriation for the
extension and remodeling of the State Department building was not
available to construct a pneumatic tube delivery system between the
State Department and the White House. 42 Comp. Gen. 226 (1962). In
another example involving a line-item appropriation for a grant
project, because the funds were made available for a specific grantee
in a specific amount to accomplish a specific purpose, the agency
could not grant less than Congress has directed by using some of the
appropriation to pay its administrative costs. 72 Comp. Gen. 317
(1993); 69 Comp. Gen. 660, 662 (1990). An appropriation to the
Department of Labor for payment to the New York Workers' Compensation
Board for the processing of claims related to the September 11, 2001,
terrorist attack on the World Trade Center was not available to make
payments to other New York State entities. B-303927, June 7, 2005.
And, as noted previously, an appropriation for the "replacement" of
state roads could not be used to make improvements on them. 41 Comp.
Gen. 255 (1961).
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It is well settled, but warrants repeating, that even an expenditure
that may be reasonably related to a general appropriation may not be
paid out of that appropriation where the expenditure falls
specifically within the scope of another appropriation. 63 Comp. Gen.
422 (1984); B-300325, Dec. 13, 2002; B-290005, July 1, 2002. It is
also well settled that when two appropriations are available for the
same purpose, the agency must select which to use, and that once it
has made an election, the agency must continue to use the same
appropriation for that purpose unless the agency, at the beginning of
the fiscal year, informs Congress of its intent to change for the next
fiscal year. B-307382, Sept. 5, 2006; B-272191, Nov. 4, 1997. See also
68 Comp. Gen. 337 (1989); 59 Comp. Gen. 518 (1980). An exception to
this requirement is when Congress specifically authorizes the use of
two appropriation accounts. B-272191, Nov. 4, 1997 (statutory language
makes clear that Congress intended that the "funds appropriated to the
Secretary [of the Army] for operation and maintenance" in the fiscal
year 1993 Defense Appropriations Act are "in addition to ... the funds
specifically appropriated for real property maintenance under the
heading [RPM,D]" in that appropriation act).
3. New or Additional Duties:
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Similarly, the Bureau of Land Management could use current
appropriations to determine fair market value and to initiate
negotiations with owners in connection with the acquisition of mineral
interests under the Cranberry Wilderness Act,9 even though actual
acquisitions could not be made until funding was provided in
appropriation acts. B-211306, June 6, 1983. See also B-290011, Mar.
25, 2002; B-211306, June 6, 1983; B-153694, Oct. 23, 1964. Of course,
an appropriation is not available if Congress has prohibited the
agency from using it. In B-308715, Apr. 20, 2007, the Department of
Energy is specifically barred under 42 U.S.C. § 7278 from using funds
made available under an Energy and Water Development Appropriations
Act to implement or finance any authorized loan guarantee program
unless specific provision has been made for that program in an
appropriations act. Since no provision was made, Energy could not use
the Energy and Water appropriation to begin implementing the loan
guarantee program.
B. The "Necessary Expense" Doctrine:
1. The Theory:
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In addition to recognizing the differences among agencies when
applying the necessary expense rule, we act to maintain a vigorous
body of case law responsive to the changing needs of government. In
this regard, our decisions indicate a willingness to consider changes
in societal expectations regarding what constitutes a necessary
expense. This flexibility is evident, for example, in our analysis of
whether an expenditure constitutes a personal or an official expense.
As will be discussed more fully later in the chapter, use of
appropriations for such an expenditure is determined by continually
weighing the benefit to the agency, such as the productivity, safety,
recruitment, and retention of a dynamic workforce and other
considerations enabling efficient, effective, and responsible
government. We recognize, however, that these factors can change over
time. B-302993, June 25, 2004 (modifying earlier decisions to reflect
determination that purchase of kitchen appliances for use by agency
employees in an agency facility is reasonably related to the efficient
performance of agency activities, provides other benefits such as
assurance of a safe workplace, and primarily benefits the agency, even
though employees enjoy a collateral benefit); B-286026, June 12,
2001(overruling GAO's earlier decisions based on reassessment of the
training opportunities afforded by examination review courses); B-
280759, Nov. 5, 1998 (overruling GAO's earlier decisions on the
purchase of business cards). See also 71 Comp. Gen. 527 (1992)
(eldercare is not a typical employee benefit provided to the
nonfederal workforce and not one that the federal workforce should
expect); B-288266, Jan. 27, 2003 (GAO explained it remained "willing
to reexamine our case law" regarding light refreshments if it is shown
to frustrate efficient, effective, and responsible government).
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the following:
E.g., B-303170, Apr. 22, 2005; 63 Comp. Gen. 422, 427-28 (1984); B-
240365.2, Mar. 14, 1996; B-230304, Mar. 18, 1988.
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For example, in August 2004, in response to an elevated national
security threat level with respect to Washington, D.C., the Capitol
Police established the Security Traffic Checkpoint Program (STCP),
which consisted of 14 security traffic checkpoints intended to secure
all streets to the two main avenues leading to the Capitol building.
Under this program, Capitol Police officers were required to staff the
14 checkpoints on a 24-hour, 7-days-a-week basis, with each officer
working 12-hour shifts. During the STCP's operation from August 2,
2004, until November 23, 2004, the Capitol Police incurred
approximately $1.3 to $1.5 million in overtime expenses every pay
period. The Capitol Police financed the overtime expenses related to
the program with money transferred to it from the Emergency Response
Fund (ERF) established by Congress to, among other things, fund
counterterrorism measures and support national security. Pub. L. No.
107-38, 115 Stat. 220 (Sept. 18, 2001). GAO was asked whether the use
of the ERF for the STCP overtime payments was a proper use of the ERF
appropriation. In finding that there was a reasonable nexus between
the overtime expenditure and ERF appropriation charged, GAO stated:
"Law enforcement agencies are entitled to discretion in deciding how
best to protect our national institutions, such as the United States
Congress, its Members, staff, and facilities. Here, the Capitol Police
implemented the STCP in reaction to the heightened terror alert in
August 2004 due to intelligence information suggesting the strong
possibility of a terrorist attack at the Capitol Complex ... The STCP
checkpoints, clearly, were a counterterrorism measure, and certainly
fall within the very broad scope of 'supporting national security.'
... So long as the agency's use of the appropriation serves one of the
... purposes for which the appropriation was enacted, the agency
cannot be said to have used the appropriation improperly."
B-303964, Feb. 3, 2005, at 5.
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Conference-related expenses may also be authorized as necessary
expenses where the agency is authorized to host the conference. B-
300826, Mar. 3, 2005. Cf. B-306424, Mar. 24, 2006 (Congress authorized
the Presidio Trust to lease Presidio property as a venue for public
and private events; thus the Trust's appropriations were available to
cover expenses, such as the costs of providing audio equipment and
related services, incurred during the National Academy of Public
Administration's use of the Presidio's facilities for its 2005 annual
Board of Directors meeting.)
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However, specific statutory authority is not essential. If
participation is directly connected with and is in furtherance of the
purposes for which a particular appropriation has been made, and an
appropriate administrative determination is made to that effect, the
appropriation is available for the expenditure. B-290900, Mar. 18,
2003 (Bureau of Land Management (BLM) may use its appropriated funds
to pay its share of the cost to produce a brochure that educates the
public regarding lighthouse preservation because the brochure supports
BLM in meeting its responsibility under its lighthouse preservation
program); B-286457, Jan. 29, 2001 (demolition of old air traffic
control tower that would obstruct the view from the new one is
directly connected with and in furtherance of the construction of a
new tower such that the demolition expenses are covered by Federal
Aviation Administration's appropriation act for tower construction); B-
280440, Feb. 26, 1999 (Immigration and Naturalization Service's (INS)
Salaries and Expenses appropriation is available to purchase medals to
be worn by uniformed employees of the Border Patrol division of INS to
commemorate the division's 75th anniversary). See also 16 Comp. Gen.
53 (1936); 10 Comp. Gen. 282 (1930); 7 Comp. Gen. 357 (1927); 4 Comp.
Gen. 457 (1924).[Footnote 15] Authority to disseminate information
will generally provide adequate justification. E.g., 7 Comp. Gen. 357;
4 Comp. Gen. 457. In addition, an agency may use appropriated funds to
provide prizes or incentives to individuals to further the collection
of information necessary to accomplish the agency's statutory
mandate.[Footnote 16] See, e.g., B-310981, Jan. 25, 2008; B-304718,
Nov. 9, 2005; 70 Comp. Gen. 720 (1991); B-286536, Nov. 17, 2000; B-
230062, Dec. 22, 1988.
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Also, the Army could not use its Other Procurement, Army appropriation
to pay contractors for logistical planning and plan implementation
services related to the medical equipment items acquired using that
appropriation because such services are not procurement activities and
the Army's Operation and Maintenance appropriation was available and
should be charged for such services. B-303170, Apr. 22, 2005.
2.General Operating Expenses:
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The Salaries and Expenses appropriation of the Internal Revenue
Service (IRS) could be used to procure credit bureau reports if
administratively determined to be necessary in connection with
investigating applicants for employment with the IRS. B-117975, Dec.
29, 1953. However, the Customs and Border Protection's (CBP) Salaries
and Expenses appropriation was not available to pay for credit
monitoring services for its employees in the New Orleans area who, as
a result of Hurricane Katrina, were victims of identity theft. Neither
government action nor inaction compromised the employees' identities,
and in this case the CBP employees individually, not the government,
would be the primary beneficiaries of the proposed credit monitoring,
which was considered part of the employees' overall management of
their personal finances. B-309604, Oct. 10, 2007.
GAO considered different circumstances in B-310865, Apr. 14, 2008,
where the proposed purchase of credit monitoring services related to a
data breach caused by government action or inaction that compromised
employees' or private citizens' identities. The Nuclear Regulatory
Commission (NRC) asked whether, in the event of such a breach, payment
for credit monitoring services would be permissible as a cost-
effective means of addressing the adverse consequences resulting from
the government's mistaken disclosure of an employee's or private
citizen's personal information. Recognizing that Congress has required
agencies to address breaches and mitigate risks when government action
or inaction mistakenly compromises personal information, GAO concluded
that the purchase of credit monitoring services for affected
individuals would constitute a means of mitigating the risks as long
as the agency determined that it was necessary under the particular
circumstances.
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Outplacement assistance to employees may be regarded as a legitimate
matter of agency personnel administration if the expenditures are
found to benefit the agency and are reasonable in amount. 68 Comp.
Gen. 127 (1988); B-272040, Oct. 29, 1997. The Government Employees
Training Act authorizes training in preparation for placement in
another federal agency under conditions specified in the statute. 5
U.S.C. § 4103(b). Similarly, employee retirement education and
retirement counseling, including individual financial planning for
retirement, fall within the legitimate range of an agency's discretion
to administer its personnel system and therefore are legitimate agency
expenses. B-301721, Jan. 16, 2004.
C. Specific Purpose Authorities and Limitations:
3. Attorney's Fees:
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The award includes "fees and other expenses." "Fees" means a
reasonable attorney's fee, generally capped at $125 per hour unless
the agency determines by regulation that cost-of-living increases or
other special factors justify a higher rate.[Footnote 39] 5 U.S.C. §
504(b)(1)(A). The Supreme Court held that "fees" includes any
paralegal fees that the prevailing party incurred either through its
litigating attorney or independently, so the prevailing party is
entitled to recover fees for the paralegal services at the market rate
for such services. Richlin Security Service Co. v. Chertoff, U.S., 128
S. Ct. 2007 (2008). "Other expenses" include such items as expert
witness expenses and the necessary cost of studies, analyses,
engineering reports, etc. 5 U.S.C. § 504(b)(1)(A).
5. Entertainment -Recreation - Morale and Welfare:
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While feeding employees may not be regarded as a "necessary expense"
as a general proposition, it may qualify when the agency is carrying
out some particular statutory function where the necessity
relationship can be established. Thus, in B-300826, Mar. 3, 2005, the
National Institutes of Health (NIII) could use appropriated funds to
provide meals and light refreshments to federal government (as well as
nonfederal) attendees and presenters at an NIH-sponsored conference to
coordinate and discuss Parkinson's disease research efforts within the
scientific community. The conference was held in furtherance of NIH's
statutory mission in 42 U.S.C. § 281 to "conduct and support" research
with respect to particular diseases, and it was therefore within NIH's
authority to pay for all legitimate, reasonable costs of hosting the
formal conference. GAO determined that providing meals and
refreshments was an allowable conference cost so long as the meals and
refreshments were incidental to the conference, attendance at the
meals was important to ensure full participation in the conference,
and the meals and refreshments were part of a formal conference that
included substantial functions occurring separately from when the food
is served.
Other examples include B-201196, Mar. 4, 1982, in which GAO concluded
that it was a permissible implementation of a statutory accident
prevention program for the Marine Corps to set up rest stations on
highways leading to a Marine base to serve coffee and doughnuts to
Marines returning from certain holiday weekends. See also 65 Comp.
Gen. 738 (1986) (refreshments at awards ceremonies), discussed later
in this section. A related example is B-235163.11, Feb. 13, 1996, in
which GAO determined that appropriated funds could be used to pay for
the dinner of a nonfederal award recipient and her spouse at a
National Science Foundation awards ceremony because of the statutory
nature of the award. Exceptions of this type illustrate the relativity
of the necessary expense doctrine pointed out earlier in our general
discussion.
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The purchase of equipment for use in other than an established
cafeteria may also be authorized when the agency determines that the
primary benefit of its use accrues to the agency by serving a valid
operational purpose, such as providing for an efficient working
environment or meeting health needs of employees, notwithstanding a
collateral benefit to the employees. In B-302993, June 25, 2004, GAO
approved the purchase of kitchen appliances, ordinarily considered to
be personal in nature, for common use by employees in an agency
facility. The appliances included refrigerators, microwaves, and
commercial coffee makers. The agency demonstrated that equipping the
workplace with these appliances was reasonably related to the
efficient performance of agency activities and provided other benefits
to the agency, including the assurance of a safe workplace. GAO also
advised the agency that it should establish policies for uniform
procurement and use of such equipment. In developing a policy, the
agency should address the ongoing need for specific equipment
throughout the building, the amount of the agency's appropriation
budgeted for this purpose, price limitations placed on the equipment
purchases, and whether the equipment should be purchased centrally or
by individual units within headquarters. It is important that the
policy ensure that appropriations are not used to provide any
equipment for the sole use of an individual, and that the agency
locate refrigerators, microwaves, and coffee makers acquired with
appropriated funds only in common areas where they are available for
use by all personnel. It should also be clear that appropriated funds
will not be used to furnish goods, such as the coffee itself or
microwaveable frozen foods, to be used in the kitchen area. These
remain costs each employee is expected to bear.
The decision in B-302993, June 25, 2004, represented a departure from
earlier cases which permitted such purchases under more restrictive
circumstances where the agency could identify a specific need:
* B-173149, Aug. 10, 1971: purchase of a set of stainless steel
cooking utensils for use by air traffic controllers to prepare food at
a flight service station where there were no other readily accessible
eating facilities and the employees were required to remain at their
post of duty for a full 8-hour shift.
* B-180272, July 23, 1974: purchase of a sink and refrigerator to
provide lunch facilities for the Occupational Safety and Health Review
Commission where there was no government cafeteria on the premises.
* B-210433, Apr. 15, 1983: purchase of microwave oven by Navy facility
to replace nonworking stove. Facility was in operation 7 days a week,
some employees had to remain at their duty stations for 24-hour
shifts, and there were no readily accessible eating facilities in the
area during nights and weekends.
* B-276601, June 26, 1997: purchase of a refrigerator for personal
food items of Central Intelligence Agency (CIA) employees. CIA
headquarters facility was relatively distant from private eating
establishments, the CIA did not permit delivery service to enter the
facility due to security concerns, and the cafeteria served only
breakfast and lunch.
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The decision at 60 Comp. Gen. 303 was expanded in B-199387, Mar. 23,
1982, to include small "samples" of ethnic foods prepared and served
during a formal ethnic awareness program as part of the agency's equal
employment opportunity program. In the particular program being
considered, the attendees were to pay for their own lunches, with the
ethnic food samples of minimal proportion provided as a separate
event. Thus, the samples could be distinguished from meals or
refreshments, which remain unauthorized. (The decision did not specify
how many "samples" an individual might consume in order to develop a
fuller appreciation.) Compare that situation to the facts in B-301184,
Jan. 15, 2004, where GAO found that the U.S. Army Corps of Engineers'
appropriation was not available to pay for the costs of food offered
at the Corps' North Atlantic Division's February 2003 Black History
Month program. The evidence in the record, including the time of the
program, the food items served, and the amounts available, indicated
that a meal, not a sampling of food, was offered.
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Similarly, GAO advised that serving refreshments purchased with
appropriated funds to local children as part of the Forest Service's
"Kid's Fishing Day" did not promote cultural awareness. While it may
have been important that children learn to fish and appreciate the
outdoors, such a goal did not advance federal EEO objectives. B-
302745, July 19, 2004.
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In a 1979 decision, appropriations of the Equal Employment Opportunity
Commission were found not available to host a reception for Hispanic
leaders in conjunction with a planning conference. B-193661, Jan. 19,
1979. The case fell squarely within the general rule. So did B-205292,
June 2, 1982, involving a Fourth of July fireworks display by a Navy
station, justified as a community relations measure. While good
community relations may be desirable for all government agencies,
fireworks are not necessary to the operation and maintenance of the
Navy. See also B-310023, Apr. 17, 2008 (providing light refreshments
to attendees of National Trails Day events does not contribute
materially to the accomplishment of an authorized U.S. Forest Service
function).
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footnote number 72a, after the first paragraph:
An agency was found to have the requisite statutory authority to
provide meals and refreshments to nonfederal personnel in B-300826,
Mar. 3, 2005. In that case, GAO considered whether the National
Institutes of Health (NIH) could use appropriated funds to provide
meals and light refreshments to both federal and nonfederal attendees
and presenters at a conference NIH was hosting on the latest
scientific advances in treating Parkinson's disease. After reviewing
NHI's statutory authority to conduct and support research to further
the treatment of diseases, GAO concluded that NIH had the requisite
authority to host the conference to which NIH had invited experts from
the private sector as well as from other federal agencies, in addition
to researchers from its own research institutes. NIH was not barred by
the prohibition of 31 U.S.C. § 1345 from providing food to nonfederal
personnel. As GAO explained, section 1345 has limited application,
addressing only those conventions and other forms of assemblages or
gatherings that private organizations seek to hold at government
expense. B-300826, at 4 n.5. The decision cited 72 Comp. Gen. 229
(1993), which effectively overruled prior GAO decisions that applied
section 1345 to meetings and conferences other than assemblages and
gatherings that private organizations sought to hold at government
expense. 72a 72 Comp. Gen. at 231.
To determine whether the costs of meals and refreshments at such an
agency-hosted conference are necessary to achieve the conference
objectives, GAO established the following criteria: (1) the meals and
refreshments are incidental to the formal conference, (2) attendance
at the meals and when refreshments are served is important for the
host agency to ensure attendees' full participation in essential
discussion, lectures, or speeches concerning the purpose of the formal
conference, and (3) the meals and refreshments are part of a formal
conference that includes substantial functions occurring separately
from when the food is served. Since the NIH proposal met these
criteria, NIH could provide meals and refreshments at the Parkinson's
disease conference. In so finding, GAO noted that the listed criteria
must be applied on a case-by-case basis and advised federal agencies
to develop procedures to ensure that the provision of meals and
refreshments meet the criteria.
Another aspect of hosting a conference addressed in B-300826 concerned
whether NIH could charge an attendance fee at the conference and
retain the proceeds, or permit its contractor to do so. GAO held that
without specific statutory authority an agency hosting a conference
may not charge and retain an attendance fee, and the agency may not
cure that lack of authority by engaging a contractor to do what it may
not do. A contractor in this situation is "receiving money for the
Government," and the miscellaneous receipts statute, 31 U.S.C. §
3302(b), requires that such funds must be deposited in the Treasury.
This decision in B-300826 was affirmed in B-306663, Jan. 4, 2006. For
more on the miscellaneous receipts statute, see Chapter 6, section E.2.
In 2006, Congress provided the Department of Defense (DOD) with
specific authority to accept and retain fees from any individual or
commercial participant in conferences, seminars, exhibitions,
symposiums, or similar meetings conducted by DOD. Pub. L.
No. 109-364, 120 Stat. 2083, 2395-96 (Oct. 17, 2006), codified at 10
U.S.C. § 2262. DOD may arrange for the collection of such fees either
directly or through a contractor, and the fees may be collected in
advance of the conference. 10 U.S.C. § 2262(a)(2). Amounts collected
under this provision are credited to the appropriation or account from
which the costs of the conference are paid, but any amount exceeding
those costs must be deposited into the Treasury as miscellaneous
receipts. 10 U.S.C. §§ 2262(b), (c). DOD is required to report
annually on the number of conferences for which fees were collected,
the amount of fees collected, and the actual costs of the conferences,
including costs associated with any conference coordinators. 10 U.S.C.
§ 2262(d).
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[72a] The Department of Justice Office of Legal Counsel (OLC) has
stated that it disagrees with our decision in B-300826, Mar. 3, 2005,
insofar as it permits agencies to provide meals and light refreshments
to nonfederal personnel. Memorandum Opinion for the General Counsel,
Environmental Protection Agency, Use of Appropriated Funds to Provide
Light Refreshments to Non-Federal Participants at EPA Conferences, OLC
Opinion, Apr. 5, 2007.
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The Veterans Benefits Administration (VBA) of the Department of
Veterans Affairs (VA) inquired whether it may use appropriated funds
to pay for incentives in the form of refreshments or light meals to
increase participation in and the effectiveness of focus groups. Under
38 U.S.C. § 527(a), the VA is required to "measure and evaluate" its
programs, and the VBA has been tasked with collecting this
information. While VBA obtains information from a variety of sources,
including mail or internet surveys and telephone interviews, VBA has
determined that the use of focus groups is the best method of
gathering this feedback and that the provision of refreshments to the
participants is very helpful both in attracting these participants and
getting useful information from the focus groups. Focus group
participants are not VBA employees but are veterans and family members
of veterans served by VBA. GAO concluded that, to the extent VBA
determines that it needs to offer refreshments and light meals as an
incentive to maximize participation by nonemployee veterans and their
families in focus groups to fulfill its statutory requirement, VBA
could use its appropriated funds to do so. However, GAO cautioned that
VBA should provide such incentives pursuant to an appropriate,
enforceable policy with procedures for approval to ensure that
incentives are only provided when necessary and are used strictly for
nonemployee focus groups. B-304718, Nov. 9, 2005.
7. Firefighting and Other Municipal Services:
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In B-302230, Dec. 30, 2003, GAO found the District of Columbia's 9-1-1
emergency telephone system surcharge as originally enacted to be an
impermissible tax on the federal government because the legal
incidence of the tax fell on the federal government. Subsequently, the
District of Columbia amended its law such that the legal incidence of
the tax falls on the providers of telephone service, not the users of
telephone service. Thus, federal agencies could pay bills that itemize
the surcharge that the vendors must pay. Id.
8. Gifts and Awards:
Page 4-155 - Replace the second full paragraph with the following:
An agency frequently wants to use gifts to attract attention to the
agency or to specific programs. For example, gifts can be used as
recruiting and retention tools, to commemorate an event, or to inform
the public or agency employees about the agency. Appropriated funds
may not be used for personal gifts, unless, of course, there is
specific statutory authority. B-307892, Oct. 11, 2006 (under 10 U.S.C.
§ 2261, Navy may use appropriated funds to purchase gifts for sailors
to commemorate their reenlistment subject to regulations issued by the
Secretary of Defense). See also 68 Comp. Gen. 226 (1989). To state the
rule in this manner is to make it appear rather obvious. If, for
example, a General Counsel decided it would be a nice gesture and
improve employee morale to give each lawyer in the agency a
Thanksgiving turkey, few would argue that the expense should be borne
by the agency's appropriations. Appropriated funds could not be used
because the appropriation was not made for this purpose (assuming, of
course, that the agency has not received an appropriation for
Thanksgiving turkeys) and because giving turkeys to lawyers is not
reasonably necessary to carry out the mission at least of any agency
that now exists. Most cases, however, are not quite this obvious or
simple.
Page 4-159 - Insert the following after the fifth full paragraph:
In B-310981, Jan. 25, 2008, GAO determined that the National
Telecommunications and Information Administration (NTIA) may use
appropriated funds to purchase $25 gift cards as an incentive to
encourage 220 individuals participating in a pilot test to complete
and return a survey. The survey was designed to gather information
about NTIA's statutorily required converter box coupon program. NTIA
deemed this information essential to the success of the $1.5 billion
program. GAO agreed that there was a direct connection between the use
of the gift cards and the production of information important to
carrying out NTIA's statutory duties, and the amount involved was
modest, so the primary beneficiary of the expenditure was the
government.
Page 4-166 - Replace the first full paragraph with the following:
The Incentive Awards Act applies to civilian agencies, civilian
employees of the various armed services and specified legislative
branch agencies. 5 U.S.C. § 4501. Within the judicial branch, it
applies to the United States Sentencing Commission. /d.1°3 While it
does not apply to members of the armed forces, the Defense Department
has very similar authority for military personnel in 10 U.S.C. § 1124.
Page 4-166 - Replace footnote number 103 with the following:
[103] The Sentencing Commission had not been covered prior to a 1988
amendment to the statute. See 66 Comp. Gen. 650 (1987). The
Administrative Office of the United States Courts is no longer covered
by the statute. Pub. L. No. 101-474, § 5(f), 104 Stat. 1100 (Oct. 30,
1990). The District of Columbia also is no longer covered. When the
District of Columbia Home Rule Act was enacted into law, Pub. L. No.
93-198, 87 Stat. 777 (Dec. 24, 1973), the Act provided for the
continuation of federal laws applicable to the District of Columbia
government and its employees (that for the most part were in title 5
of the United States Code) until such time as the District enacted its
own laws covering such matters. The District has adopted a number of
laws exempting its employees from various provisions of title 5, and
sections 4501 through 4506 are specifically superseded. See D.C.
Official Code, 2001 ed. §1-632.02.
10. Insurance:
Page 4-179 - Replace the first full paragraph with the following:
Another type of insurance which may not be paid for from appropriated
funds is flight or accident insurance for employees on official
travel. If a federal employee traveling by air on official business
wishes to buy flight insurance, it is considered a personal expense
and not reimbursable. B-309715, Sept. 25, 2007; 47 Comp. Gen. 319
(1967); 40 Comp. Gen. 11 (1960). Similarly nonreimbursable is trip
cancellation insurance. 58 Comp. Gen. 710 (1979).
11. Lobbying and Related Matters:
Page 4-188 - Replace the title of section 11 with the following:
11. Lobbying, Publicity or Propaganda, and Related Matters.
Page 4-189 - Insert the following after the first full paragraph:
In addition to restrictions on lobbying, this section will explore
restrictions on publicity or propaganda. Since 1951, appropriation
acts have included provisions precluding the use of the appropriations
for "publicity or propaganda." While Congress has never defined the
meaning of publicity or propaganda, GAO has recognized three types of
activities that violate the publicity or propaganda prohibitions: self-
aggrandizement, covert propaganda, and materials that are purely
partisan in nature.
Page 4-196 - Insert the following as the first paragraph under "(1)
Origin and general considerations:"
In addition to penal statutes imposing restrictions on lobbying,
lobbying restrictions are found in appropriations acts. Restrictions
on publicity or propaganda are found only in appropriations acts.
Page 4-197 - Replace the first paragraph and quotation with the
following:
The publicity or propaganda prohibition made its first appearance in
1951. Members of Congress expressed concern over a speaking campaign
promoting a national healthcare plan undertaken in the early 1950s by
Oscar R. Ewing, the Administrator of the Federal Security Agency, a
predecessor to the Department of Health and Human Services and the
Social Security Administration. In reaction to this activity,
Representative Lawrence R. Smith introduced the following provision,
which was enacted in the Labor-Federal Security appropriation for
1952, Pub. L. No. 134, ch. 373, § 702, 65 Stat. 209, 223 (Aug. 31,
1951): "No part of any appropriation contained in this Act shall be
used for publicity or propaganda purposes not heretofore authorized by
the Congress." Later versions of this provision prohibit activity
throughout the government: "No part of any appropriation contained in
this or any other Act shall be used for publicity or propaganda
purposes within the United States not heretofor authorized by the
Congress."[Footnote 117]
Page 4-197 - Replace footnote number 117 with the following:
[117] See, e.g., the Transportation, Treasury, and related agencies'
appropriations for 2005, Pub. L. No. 108-447, div. H, title VI, § 624,
118 Stat. 2809, 3278 (Dec. 8, 2004) (emphasis added).
Page 4-198 - Insert the following after the quotation and before the
second full paragraph:
Although the publicity and propaganda prohibition has appeared in some
form in the annual appropriations acts since 1951, the prohibitions
themselves provide little definitional guidance as to what specific
activities are publicity or propaganda. GAO has identified three
activities that are prohibited by the publicity or propaganda
prohibition—self-aggrandizement, covert propaganda, and purely
partisan materials.
Page 4-198 - Replace the second full paragraph with the following:
In evaluating whether a given action violates a publicity or
propaganda provision, GAO will rely heavily on the agency's
administrative justification. In other words, the agency gets the
benefit of any legitimate doubt. GAO will not accept the agency's
justification where it is clear that the action falls into one of
these categories. Before discussing these categories, two threshold
issues must be noted.
Page 4-199 - Replace the first three paragraphs under "(2) Self-
aggrandizement" and move the heading as follows:
As noted above, the broadest form of the publicity and propaganda
restriction prohibits the use of appropriated funds "for publicity or
propaganda purposes not authorized by Congress." A fiscal year 2005
governmentwide variation limits these restrictions to activities
"within the United States."[Footnote 121]
(2) Self-aggrandizement:
The Comptroller General first had occasion to construe this provision
in 31 Comp. Gen. 311 (1952). The National Labor Relations Board asked
whether the activities of its Division of Information amounted to a
violation. Reviewing the statute's scant legislative history, the
Comptroller General concluded that it was intended "to prevent
publicity of a nature tending to emphasize the importance of the
agency or activity in question." Id. at 313. Therefore, the
prohibition would not apply to the "dissemination to the general
public, or to particular inquirers, of information reasonably
necessary to the proper administration of the laws" for which an
agency is responsible. Id. at 314. Based on this interpretation, GAO
concluded that the activities of the Board's Division of Information
were not improper. The only thing GAO found that might be
questionable, the decision noted, were certain press releases
reporting speeches of members of the Board.
Thus, 31 Comp. Gen. 311 established the important proposition that the
statute does not prohibit an agency's legitimate informational
activities. See also B-302992, Sept. 10, 2004; B-302504, Mar. 10,
2004; B-284226.2, Aug. 17, 2000; B-223098.2, Oct. 10, 1986. It also
established that the publicity or propaganda restriction prohibits
"publicity of a nature tending to emphasize the importance of the
agency or activity in question." 31 Comp. Gen. at 313. See also B-
302504, Mar. 10, 2004; B-212069, Oct. 6, 1983. Such activity has
become known as "self-aggrandizement."
Page 4-199 - Replace footnote number 121 with the following:
[121] Pub. L. No. 108-447, div. H, title VI, § 624, 118 Stat. 2809,
3278 (Dec. 8, 2004).
Page 4-200 - Replace the first full paragraph with the following:
In B-302504, Mar. 10, 2004, GAO considered a flyer and television and
print advertisements that the Department of Health and Human Services
(HHS) produced and distributed to inform Medicare beneficiaries of
recently enacted changes to the Medicare program. While the materials
had notable factual omissions and other weaknesses, GAO concluded that
the materials were not self-aggrandizement because they did not
attribute the enactment of new Medicare benefits to HHS or any of its
agencies or officials.
There was also no violation found in B-303495, Jan. 4, 2005. In this
case, the Office of National Drug Control Policy used the term "Drug
Czar" to describe its director in video news releases it issued under
the Drug-Free Media Campaign Act of 1998. The term had common,
widespread, and long-standing usage by the media and members of
Congress, and was not being used by the agency to persuade the public
of the importance of the director. Rather, it was used as "nothing
more than a sobriquet." Id.
Page 4-200 - Replace the third full paragraph with the following:
Other cases, in which GAO specifically found no self-aggrandizement,
are B-284226.2, Aug. 17, 2000 (Department of Housing and Urban
Development report and accompanying letter providing information to
agency constituents about the impact of program reductions being
proposed in Congress); B-212069, Oct. 6, 1983 (press release by
Director of Office of Personnel Management excoriating certain Members
of Congress who wanted to delay a civil service measure the
administration supported); and B-161686, June 30, 1967 (State
Department publications on Vietnam War). In none of these cases were
the documents designed to glorify the issuing agency or official.
Page 4-202 -Replace the first paragraph under the heading "(3) Covert
propaganda" with the following:
Another type of activity that GAO has construed as prohibited by the
"publicity or propaganda not authorized by Congress" statute is
"covert propaganda," defined as "materials such as editorials or other
articles prepared by an agency or its contractors at the behest of the
agency and circulated as the ostensible position of parties outside
the agency." B-229257, June 10, 1988. A critical element of the
violation is concealment from the target audience of the agency's role
in sponsoring the material. Id.; B-305368, Sept. 30, 2005; B-304228,
Sept. 30, 2005; B-303495, Jan. 4, 2005; B-302710, May 19, 2004; B-
306349, Sept. 30, 2005 (nondecision letter).
Page 4-202 - Insert the following after the second full paragraph:
In B-302710, May 19, 2004, GAO found that the Department of Health and
Human Services (HHS) violated the prohibition when it produced and
distributed prepackaged video news stories that did not identify the
agency as the source of the news stories. Prepackaged news stories,
ordinarily contained in video news releases, or "VNRs," have become a
popular tool in the public relations industry. The prepackaged news
stories may be accompanied by a suggested script, video clips known as
"B-roll" film which news organizations can use either to augment their
presentation of the prepackaged news story or to develop their own
news reports in place of the prepackaged story, and various other
promotional materials. These materials are produced in the same manner
in which television news organizations produce materials for their own
news segments, so they can be reproduced and presented as part of a
newscast by the news organizations. The HHS news stories were part of
a media campaign to inform Medicare recipients about new benefits
available under the recently enacted Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. HHS designed its
prepackaged video news stories to be indistinguishable from video
segments produced by private news broadcasters, allowing broadcasters
to incorporate them into their broadcasts without alteration. The
suggested anchor lead-in scripts included in the package facilitated
the unaltered use of the prepackaged news stories, announcing the
package as a news story by fictional news reporters. HHS, however, did
not include any statement in the news stories to advise the television
viewing audience, the target of the purported news stories, that the
agency wrote and produced the prepackaged news stories, and the
television viewing audiences did not know that the stories they
watched on television news programs about the government were, in
fact, prepared by the government. See also B-304228, Sept. 30, 2005
(prepackaged news story produced by consultant hired by the Department
of Education did not reveal to the target audience the Department's
role so it was covert propaganda in violation of the prohibition); B-
303495, Jan. 4, 2005 (prepackaged news stories produced by the Office
of National Drug Control Policy were covert propaganda in violation of
the prohibition). Cf. B-307917, July 6, 2006 (newspaper article).
Page 4-202 - Replace the third full paragraph with the following:
A similar holding is 66 Comp. Gen. 707 (1987), involving newspaper
articles and editorials in support of Central American policy. The
materials were prepared by paid consultants at government request, and
published as the work of nongovernmental parties. The decision also
found that media visits by Nicaraguan opposition leaders, arranged by
government officials but with that fact concealed, constituted another
form of "covert propaganda." See also B-305368, Sept. 30, 2005
(Department of Education contract with radio and television
personality to comment regularly on the No Child Left Behind Act
without assuring that the Department's role was disclosed to the
targeted audiences violated the publicity and propaganda prohibition);
B-129874, Sept. 11, 1978 ("canned editorials" and sample letters to
the editor in support of Consumer Protection Agency legislation, had
they been prepared, would have violated the law); B-306349, Sept. 30,
2005 (nondecision letter) (Department of Education urged to review
newspaper article written by a Department of Education contractor
which did not disclose the agency's involvement in its writing for
possible publicity or propaganda violations). Compare B-304716, Sept.
30, 2005 (services provided by expert consultant hired by the
Department of Health and Human Services, Administration for Children
and Families (ACF), did not violate the publicity or propaganda
prohibition since the one published article prepared by the consultant
under the contract was published under the signature of the assistant
secretary of ACF and the contract did not call for the consultant to
write articles under her own name).
Page 4-202 - Insert the following after the last paragraph:
In B-302992, Sept. 10, 2004, the Forest Service produced video and
print materials to explain and defend its controversial land and
resource management plan for the Sierra Nevada Forest. Because the
video and print materials clearly identified the Forest Service and
the Department of Agriculture as the source of the materials, GAO
concluded that they did not constitute covert propaganda. See also B-
301022, Mar. 10, 2004 (the Office of National Drug Control Policy was
clearly identified as the source of materials sent to members of the
National District Attorneys Association concerning the debate over the
legalization of marijuana).
In reaction to the growing use of prepackaged news stories within the
government, GAO issued a circular letter to the heads of departments,
agencies, and others concerned entitled Prepackaged News Stories, B-
304272, Feb. 17, 2005. The letter fully explains the limitations
imposed by the publicity or propaganda prohibition on the use of
prepackaged news stories. It also explains when agencies are allowed
to use prepackaged news stories, noting in particular that such use is
valid so long as there is clear disclosure to the viewing audience
that the material presented was prepared by or in cooperation with a
government agency.
In May 2005, Congress enacted section 6076 of the Emergency
Supplemental Appropriations Act for Defense, the Global War on Terror,
and Tsunami Relief, 2005, Pub. L. No. 109-13, 110 Stat. 231, 301 (May
11, 2005). Section 6076 provided that no appropriations "may be used
by an executive branch agency to produce any prepackaged news story
intended for broadcast or distribution unless the story includes a
clear notification within the text or audio of the prepackaged news
story that the prepackaged news story was prepared or funded by that
executive branch agency." Id. In the conference report submitted to
both houses of Congress the conferees specifically noted GAO's
analysis of covert propaganda and stated that section 6076 "confirms
the opinion of the Government Accountability Office dated February 17,
2005 (B-304272)." H.R. Conf. Rep. No. 109-72, at 158-59 (2005)
(emphasis added). The opinion to which the report was referring was
the Comptroller General's circular letter which clearly stated that
the critical element in determining whether prepackaged news stories
constitute covert propaganda is whether the intended audience is
informed of the source of the materials. B-304272, Feb. 17, 2005.
Inasmuch as section 6076 "confirms" GAO's opinion, the section did not
create new law or impose a new requirement. "Congress enacted section
6076 to emphasize that the publicity or propaganda prohibition always
restricted the use of appropriations to disseminate information
without proper source attribution." B-307917, July 6, 2006, at 2
(concerning newspaper article without source attribution that agency
contracted for before passage of section 6076). Therefore,
transactions entered into before the date of enactment of section 6076
are held to the same requirement for source attribution. Id.
(4) Purely partisan materials:
A third category of materials identified in GAO case law as violating
the publicity or propaganda prohibition is purely partisan materials.
To be characterized as purely partisan in nature, the offending
materials must be found to have been "designed to aid a political
party or candidate." B-147578, Nov. 8, 1962. It is axiomatic that
funds appropriated to carry out a particular program would not be
available for political purposes. See B-147578, Nov. 8, 1962.
It is often difficult to determine whether materials are political or
not because "the lines separating the nonpolitical from the political
cannot be precisely drawn." Id.; B-144323, Nov. 4, 1960. See also B-
130961, Oct. 16, 1972. An agency has a legitimate right to explain and
defend its policies and respond to attacks on that policy. B-302504,
Mar. 10, 2004. A standard GAO applies is that the use of appropriated
funds is improper only if the activity is "completely devoid of any
connection with official functions." B-147578, Nov. 8, 1962. As stated
in B-144323, Nov. 4, 1960:
"[The question is] whether in any particular case a speech or a
release by a cabinet officer can be said to be so completely devoid of
any connection with official functions or so political in nature that
it is not in furtherance of the purpose for which Government funds
were appropriated, thereby making the use of such funds ...
unauthorized. This is extremely difficult to determine in most cases
as the lines separating the nonpolitical from the political cannot be
precisely drawn.
"... As a practical matter, even if we were to conclude that the use
of appropriated funds for any given speech or its release was
unauthorized, the amount involved would be small, and difficult to
ascertain; and the results of any corrective action might well be more
technical than real."
While GAO has reviewed materials to determine whether they are
partisan in nature, to date there are no opinions or decisions of the
Comptroller General concluding that an agency's informational
materials were so purely partisan as to constitute impermissible
publicity or propaganda. In 2000, GAO concluded that an information
campaign by the Department of Housing and Urban Development (HUD)
using a widely disseminated publication, entitled Losing Ground: The
Impact of Proposed HUD Budget Cuts on America's Communities, had not
violated the prohibition. B-284226.2, Aug. 17, 2000. In the
publication, HUD criticized what it called "deep cuts" in
appropriations that were proposed by the House Appropriations
Committee for particular HUD programs. The publications stated that,
if enacted, the "cuts would have a devastating impact on families and
communities nationwide." GAO found that this publication was a
legitimate exercise of HUD's duty to inform the public of government
policies, and that HUD had a right to justify its policies to the
public and rebut attacks against those policies.
In B-302504, Mar. 10, 2004, GAO examined a flyer and print and
television advertisements about changes to Medicare enacted by the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003, Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003). The flyer
contained information about new prescription drug benefits and price
discount cards. GAO noted that while the materials contained opinion
and notable factual omissions, the materials did not constitute
impermissible publicity or propaganda. GAO explained:
"To restrict all materials that have some political content or express
support of an Administration's policies would significantly curtail
the recognized and legitimate exercise of the Administration's
authority to inform the public of its policies, to justify its
policies and to rebut attacks on its policies. It is important for the
public to understand the philosophical underpinnings of the policies
advanced by elected officials and their staff in order for the public
to evaluate and form opinions on those policies."
Id. at 10.
In B-302992, Sept. 10, 2004, GAO upheld the Forest Service's right to
produce and distribute a brochure and video materials regarding its
controversial policy on managing wildfire in the Sierra Nevada Forest.
Because the materials sought to explain hundreds of pages of
scientific data, official opinions, and documents of the Forest
Service, they were not comprehensive and did not explain all the
positive and negative aspects of the thinning policies adopted in its
regional forest plan. GAO concluded that the Forest Service had the
authority to disseminate information about its programs and policies
and to defend those policies.
Apart from considerations of whether any particular law has been
violated, GAO has taken the position in two audit reports that the
government should not disseminate misleading information. In 1976, the
former Energy Research and Development Administration (ERDA) published
a pamphlet entitled Shedding Light On Facts About Nuclear Energy.
Ostensibly created as part of an employee motivational program, ERDA
printed copies of the pamphlet far in excess of any legitimate program
needs, and inundated the state of California with them in the months
preceding a nuclear safeguards initiative vote in that state. While
the pamphlet had a strong pro-nuclear bias and urged the reader to
"Let your voice be heard," the pamphlet did not violate any anti-
lobbying statute because applicable restrictions did not extend to
lobbying at the state level. B-130961-0.M., Sept. 10, 1976. However,
GAO's review of the pamphlet found it to be oversimplified and
misleading. GAO characterized it as propaganda not suitable for
distribution to anyone, employees or otherwise, and recommended that
ERDA cease further distribution and recover and destroy any
undistributed copies. See GAO, Evaluation Of the Publication and
Distribution Of "Shedding Light On Facts About Nuclear Energy," EMD-76-
12 (Washington, D.C.: Sept. 30, 1976).
In a later report, GAO reviewed a number of publications related to
the Clinch River Breeder Reactor Project, a cooperative
government/industry demonstration project, and found several of them
to be oversimplified and distorted propaganda, and as such
questionable for distribution to the public. However, the publications
were produced by the private sector components of the Project and paid
for with utility industry contributions and not with federal funds.
GAO recommended that the Department of Energy work with the private
sector components in an effort to eliminate this kind of material, or
at the very least ensure that such publications include a prominently
displayed disclaimer statement making it clear that the material was
not government approved. GAO, Problems With Publications Related To
The Clinch River Breeder Reactor Project, EMD-77-74 (Washington, D.C.:
Jan. 6, 1978).
Page 4-203 - Renumber section (4) as follows:
(5) Pending legislation: Overview:
Page 4-207 - Renumber section (5) as follows:
(6) Cases involving "grassroots" lobbying violations:
Page 4-210 - Renumber section (6) as follows:
(7) Pending legislation: Cases in which no violation was found:
Page 4-212 - Insert the following after the first paragraph:
In another case, the Social Security Administration (SSA), in its
annual mailing of employment benefit reports to American workers,
included material concerning the Social Security system's potential
financial problems and legislative initiatives to reform the Social
Security program. Since none of the material called on the public to
contact Congress and urge it to support SSA's position on this or any
other matter, GAO determined that there was no violation of the
grassroots lobbying prohibition. GAO rejected the suggestion that the
standard ought to be an assessment of the agency's intent and whether
the agency's message would be likely to influence the public to
contact Congress. The standard requiring evidence of a clear appeal by
the agency to the public to contact congressional members to urge them
to support the agency's position is based upon the language and
legislative history of the grassroots lobbying provisions. Moreover,
the standard is consistent with a proper respect for the right and
responsibility of federal agencies to communicate with the public and
Congress regarding policies and activities. GAO stated:
"We have no reason to think that Congress meant to preclude government
officials from saying anything that might possibly cause the public to
think about or take positions on the issues of the day and, as a
result, contact their elected representatives. To the contrary, we see
the free and open exchange of ideas and views as central to our
political system and, accordingly, remain reluctant to construe these
laws in such a way that would unnecessarily or excessively constrain
agency communications with the public or Congress."
B-304715, Apr. 27, 2005.
Page 4-213 - Renumber section (7) as follows:
(8) Pending legislation: Providing assistance to private lobbying
groups:
Page 4-215 - Renumber section (8) as follows:
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying:
Pages 4-218 to 4-219 - Delete the entire section (9) entitled
"Dissemination of political or misleading information"; the
information contained therein has been integrated into the new section
"(4) Purely partisan materials," above.
Page 4-219 - Insert the following after the third paragraph as a new
section 11.c. (10):
(10) Federal employees' communications with Congress:
Since 1998, annual appropriations acts each year have contained a
governmentwide prohibition on the use of appropriated funds to pay the
salary of any federal official who prohibits or prevents another
federal employee from communicating with Congress. See Pub. L. No. 105-
61, § 640, 111 Stat. 1272, 1318 (Oct. 10, 1997). Specifically, this
provision states:
"No part of any appropriation contained in this or any other Act shall
be available for the payment of the salary of any officer or employee
of the Federal Government, who ... prohibits or prevents, or attempts
or threatens to prohibit or prevent, any other officer or employee of
the Federal Government from having any direct oral or written
communication or contact with any Member, committee, or
subcommittee of the Congress in connection with any matter pertaining
to the employment of such other officer or employee or pertaining to
the department or agency of such other officer or employee in any way,
irrespective of whether such communication or contact is at the
initiative of such other officer or employee or in response to the
request or inquiry of such Member, committee, or subcommittee."
Pub. L. No. 108-199, div. F, title VI, § 618, 188 Stat. 3, 354 (Jan.
23, 2004); Pub. L. No. 108-7, div. J, title VI, § 620, 117 Stat. 11,
468 (Feb. 20, 2003). This provision has its antecedents in several
older pieces of legislation, including section 6 of the Lloyd-La
Follette Act of 1912, Pub. L. No. 336, ch. 389, 66 Stat. 539, 540
(Aug. 24, 1912), which stated: "The right of persons employed in the
civil service of the United States, either individually or
collectively, to petition Congress, or any Member thereof, or to
furnish information to either House of Congress, or to any committee
or member thereof, shall not be denied or interfered with."
Congress enacted section 6 in response to concern over executive
orders by Presidents Theodore Roosevelt and Howard Taft that
prohibited federal employees from contacting Congress except through
the head of their agency. The legislative history of this provision
indicates that Congress intended to advance two goals: to preserve the
First Amendment rights of federal employees regarding their working
conditions and to ensure that Congress had access to programmatic
information from frontline federal employees. See H.R. Rep. No. 62-
388, at 7 (1912); 48 Cong. Rec. 5634, 10673 (1912).
In B-302911, Sept. 7, 2004, GAO concluded that the Department of
Health and Human Services violated this provision by paying the salary
of the Director of the Centers for Medicare & Medicaid Services (CMS)
who prohibited the CMS Chief Actuary from providing certain cost
estimates of Medicare legislation to Congress. The Director
specifically instructed the Chief Actuary not to respond to any
requests for information and advised that there would be adverse
consequences if he released any information to Congress. GAO
recognized that certain applications of the provision could raise
constitutional separation of powers concerns; however, there was no
controlling judicial opinion declaring the provision unconstitutional.
GAO found that the provision, as applied to the facts in this case,
precluded the payment of the CMS Director's salary because he
specifically prevented another employee from communicating with
Congress, particularly in light of the narrow, technical nature of the
information requested by Congress and Congress's need for the
information in carrying out its constitutional legislative duties.
Page 4-221 - Replace footnote 139 with the following:
139 Pub. L. No. 104-65, 109 Stat. 691 (Dec. 19, 1995). For a
discussion of the constitutionality of the Byrd Amendment in the grant
context after passage of Public Law 104-65, see United States v.
National Training & Information Center, 532 F. Supp. 2d 946 (N.D. M.
Aug. 23, 2007).
Page 4-227 - Replace the third full paragraph with the following:
A 1983 decision illustrates another form of information dissemination
that is permissible without the need for specific statutory support.
Military chaplains are required to hold religious services for the
commands to which they are assigned. 10 U.S.C. § 3547. Publicizing
such information as the schedule of services and the names and
telephone numbers of installation chaplains is an appropriate
extension of this duty. Thus, GAO advised the Army that it could
procure and distribute calendars on which this information was
printed. 62 Comp. Gen. 566 (1983). Applying a similar rationale, the
decision also held that information on the Community Services program,
which provides various social services for military personnel and
their families, could be included. See also B-301367, Oct. 23, 2003
(affixing decals of the major units assigned to an Air Force base onto
a nearby utility company water tower to inform the public of military
activity in the area is a permissible use of appropriated funds); B-
290900, Mar. 18, 2003 (approving the Bureau of Land Management's use
of appropriated funds to pay its share of the costs of disseminating
information under a cooperative agreement); B-280440, Feb. 26, 1999
(allowing the Border Patrol's use of appropriated funds to purchase
uniform medals that, in part, served to advance "knowledge and
appreciation for the agency's history and mission").
Page 4-232 - Replace the first full paragraph, with the following:
A statute originally enacted in 1913, now found at 5 U.S.C. § 3107,
provides: "Appropriated funds may not be used to pay a publicity
expert unless specifically appropriated for that purpose." This
provision applies to all appropriated funds. GAO has consistently
noted certain difficulties in enforcing the statute. In GAO's first
substantive discussion of 5 U.S.C. § 3107, the Comptroller General
stated "in its present form, the statute is ineffective." A-61553, May
10, 1935. The early cases' identified three problem areas, summarized
in B-181254(2), Feb. 28, 1975.
Page 4-233 - Insert the following after the second paragraph:
The legislative history of section 3107 provides some illumination.
While it is not clear what was meant by "publicity expert," there are
indications that the provision would prohibit the use of press agents
"to extol or to advertise" the agency or individuals within the
agency. See, e.g., 50 Cong. Rec. 4410 (1913) (comments of
Representative Fitzgerald, chairman of the committee that reported the
bill)). There are also indications that the provision should not
interfere with legitimate information dissemination regarding agency
work or services. When some members expressed concern that the
provision may affect the hiring of experts to "make our farm bulletins
more readable to the public and more practical in their make-up,"
supporters indicated that such activities would not be restricted by
passage of the provision. Id. at 4410 (colloquy between
Representatives Lever and Fitzgerald).
Page 4-234 - Insert the following after the first partial paragraph:
GAO revisited the statute in B-302992, Sept. 10, 2004. The Forest
Service had hired a public relations firm to help produce and
distribute materials regarding its controversial land and resource
management plan in the Sierra Nevada Forest, a plan consisting of
hundreds of pages of scientific data and opinions. The Forest Service
had hired the public relations firm to help make the plan's scientific
content more understandable to the public and media. GAO concluded
that the Forest Service had not violated
section 3107. GAO said that section 3107 was not intended to impede
legitimate informational functions of agencies and does not prohibit
agencies from paying press agents and public affairs officers to
facilitate and manage dissemination of agency information. GAO stated:
"Instead, what Congress intended to prohibit with section 3107 is
paying an individual 'to extol or to advertise' the agency, an
activity quite different from disseminating information to the
citizenry about the agency, its policies, practices, and products." B-
302992, Sept. 10, 2004.
In 2005, GAO considered whether the Social Security Administration's
(SSA) use of the Gallup Organization to poll the public on Social
Security program issues violated 5 U.S.C. § 3107. Citing to the
discussion of the legislative history of section 3107 in B-302992,
Sept. 10, 2004, GAO determined that SSA did not hire Gallup to—nor did
Gallup in fact—extol or advertise SSA or individuals within SSA.
Rather, SSA hired Gallup to engage in the legitimate agency activity
of collecting information that the agency needed in order to carry out
its Social Security program. SSA's authority to survey the general
public on its knowledge of the Social Security program and programs
financing is inherent in the agency's authority to administer that
program, 42 U.S.C. § 901(b). Since Gallup was assisting SSA in this
endeavor, Gallup was not a "publicity expert" within the meaning of
section 3107. B-305349, Dec. 20, 2005.
12. Membership Fees:
Page 4-234 - Replace the first full paragraph, with the following and
insert new footnote number 152a as follows:
Appropriated funds may not be used to pay membership fees of an
employee of the United States in a society or association. 5 U.S.C. §
5946. The prohibition does not apply if an appropriation is expressly
available for that purpose, or if the fee is authorized under the
Government Employees Training Act. Under the Training Act, membership
fees may be paid if the fee is a necessary cost directly related to
the training or a condition precedent to undergoing the training. 5
U.S.C. § 4109(b).[Footnote 152a]
Page 4-234 - Insert the following for new footnote number 152a:
[152a] The District of Columbia has specifically exempted its
employees from the provisions of 5 U.S.C. § 5946 as well as the
Government Employees Training Act, 5 U.S.C. ch. 41. See D.C.
Official Code, 2001 ed. § 1-632.02.
Page 4-236 - Replace the first full paragraph, with the following:
As noted, an agency may purchase membership in its own name in a
society or association since 5 U.S.C. § 5946 prohibits only
memberships for individual employees. The distinction, however, is not
a distinction in name only. An expenditure for an agency membership
must be justified on a "necessary expense" theory. To do this, the
membership must provide benefits to the agency itself. For example, in
31 Comp. Gen. 398 (1952), the Economic Stabilization Agency was
permitted to become a member of a credit association because members
could purchase credit reports at reduced cost and the procurement of
credit reports was determined to be necessary to the enforcement of
the Defense Production Act. In 33 Comp. Gen. 126 (1953), the Office of
Technical Services, Commerce Department, was permitted to purchase
membership in the American Management Association. The appropriation
involved was an appropriation under the Mutual Security Act to conduct
programs including technical assistance to Europe, and the membership
benefit to the agency was the procurement of Association publications
for foreign trainees and foreign productivity centers. See also B-
305095, Dec. 8, 2005 (the United States Chemical Safety and Hazard
Investigation Board appropriation is available to pay the membership
fee for the Board to become a corporate associate member of the Risk
Management and Decision Processes Center of the Wharton School,
University of Pennsylvania, since the Board has determined that such
membership will assist the Board in carrying out its duties under 42
U.S.C. § 7412(r)(6)); 70 Comp. Gen. 190 (1991) (prohibition in 5
U.S.C. § 5946 does not prohibit an agency from using appropriated
funds to purchase access for its employees to a private fitness
center's exercise facilities as part of the agency's health service
program as authorized by 5 U.S.C. § 7901); B-241706, June 19, 1991
(Public Health Service may reimburse physicians for annual medical
staff dues since hospital privileges are essential to the performance
of the agency's business); B-236763, Jan. 10, 1990 (GAO may pay fees
for agency membership in certain professional organizations and
designate appropriate GAO employees to attend functions for
recruitment purposes).
Page 4-239 - Replace the second paragraph with the following:
Compare that case with the decision in B-286026, June 12, 2001, in
which the Pension Benefit Guaranty Corporation (PBGC) asked whether it
could use appropriated funds to pay, as training costs, fees for
actuary accreditation. PBGC employs a number of actuaries to calculate
pension benefits. Although actuaries do not need a professional
license for employment, as part of a collective bargaining agreement
PBGC proposed to use training funds to send actuaries to the
examination review courses, provide on-the-job study time, and pay for
the accreditation examinations. PBGC determined that this course of
study and testing would enhance the ability of the PBGC actuaries to
carry out their assignments. PBGC has the discretion under the
Government Employees Training Act to determine that the review courses
constitute appropriate training for its actuaries. Accordingly, GAO
agreed that PBGC has authority, under 5 U.S.C. § 4109(a), to use
appropriated funds for review courses and on-the-job study time.
However, there was no authority to pay the cost of the accreditation
examination itself, since a licensing accreditation examination does
not fall within the Government Employees Training Act's definition of
training. In the absence of statutory authority, an agency may not pay
the costs of its employees taking licensing examinations since
professional accreditation is personal to the employee and should be
paid with personal funds. Here, the actuarial accreditation belongs to
the employee personally and would remain so irrespective of whether
the employee remains with the federal government.
The PBGC decision, B-286026, June 12, 2001, predated enactment of 5
U.S.C. § 5757, which gave agencies the discretionary authority to
reimburse employees for expenses incurred in obtaining professional
credentials, including the costs of examinations. In B-302548, Aug.
20, 2004, GAO determined that under 5 U.S.C. § 5757, an agency may pay
only the expenses required to obtain the license or official
certification needed to practice a particular profession. In that
case, an employee who was a certified public accountant (CPA) asked
her agency to pay for her membership in the California Society of
Certified Public Accountants, which is voluntary and not a
prerequisite for obtaining a CPA license in California. GAO held that
payment for voluntary memberships in organizations of already
credentialed professionals is prohibited under 5 U.S.C. § 5946, and
section 5757 does not provide any authority to pay such fees where the
membership in the organization is not a prerequisite to obtaining the
professional credential. Section 5757 is discussed in more detail in
this chapter in the next section on attorneys' expenses related to
admission to the bar, and in section C.13.e on professional
qualification expenses.
Page 4-242 - Replace the first paragraph with the following:
In 2001, section 1112 of the National Defense Authorization Act for
Fiscal Year 2002, Pub. L. No. 107-107, 115 Stat. 1238 (Dec. 28, 2001)
amended title 5, United States Code, by adding a new section 5757.
Under 5 U.S.C. § 5757(a), agencies may, at their discretion, use
appropriated funds to pay expenses incurred by employees to obtain
professional credentials, state-imposed and professional licenses,
professional accreditations, and professional certifications,
including the costs of examinations to obtain such credentials. This
authority is not available to pay such fees for employees in or
seeking to be hired into positions excepted from the competitive
service because of the confidential, policy-determining, policymaking,
or policy-advocating character of the position. 5 U.S.C.
§ 5757(b). Nothing in the statute or its legislative history defines
or limits the terms "professional credentials," "professional
accreditation," or "professional certification." Agencies have the
discretion to determine whether resources permit payment of
credentials, and what types of professional expenses will be paid
under the statute. Thus, if an agency determines that the fees its
attorneys must pay for admission to practice before federal courts are
in the nature of professional credentials or certifications, the
agency may exercise its discretion under 5 U.S.C. § 5757 and pay those
fees out of appropriated funds. B-289219, Oct. 29, 2002. Also, GAO has
stated that under 5 U.S.C. § 5757 an agency may pay the expenses of
employees' memberships in state bar associations when membership is
required to maintain their licenses to practice law. See B-302548,
Aug. 20, 2004 (note that this decision concerned membership in a
certified public accountants' (CPA) professional organization that was
not required as a condition of the CPA license).
13. Personal Expenses and Furnishings:
Page 4-253 - Replace the third paragraph with the following:
Another related line of decisions addresses the purchase of bottled
drinking water for use in federal work facilities where the safety of
municipal or locally provided water is at issue. Generally,
appropriated funds are not available to pay for bottled water for the
personal use of employees. GAO has made an exception where a
building's water supply is unhealthy or unpotable. See, for example, B-
247871, Apr. 10, 1992, where a problem with the water supply system in
a building caused lead content to exceed the maximum contaminant level
and justified the purchase of bottled water for employees until the
problems with the system could be resolved. Compare B-303920, Mar. 21,
2006 (relief denied to certifying officer who improperly approved
payments for bottled water for employees where there was no evidence
that drinking water in the building was unhealthy). For remote work
sites that have no access to potable water, GAO has also determined
that it is within the agency's discretion to decide how best to
provide its employees with access to potable water, whether by
providing coolers or jugs for transporting water or by providing
bottled water. B-310502, Feb. 4, 2008.
Page 4-259 - Insert the following before the last paragraph:
A different type of situation arose in B-307316, Sept. 7, 2006. An
Army captain held dual citizenship with the United States and with
Turkey. In order to obtain a security clearance required for his
assignment to the United States Army Center for Health Promotion and
Preventive Medicine (Army Center), he had to renounce his Turkish
citizenship. GAO determined that the expenses incurred for the
renunciation of Turkish citizenship in order to obtain the security
clearance were primarily for the benefit of the government since the
required security clearance provided assurance to the government that
sensitive information will be safe and the renunciation facilitated
the granting of the clearance. Any personal benefit the captain would
receive from the renunciation was incidental to the performance of his
duties. Therefore, the Army Center could reimburse the captain for the
renunciation expenses.
Page 4-260 - Replace the first paragraph with the following:
Neither the statute nor its legislative history defines the terms
"professional credentials," "professional accreditation," and
"professional certification." The statute and the 1994 decision
together appear to cover many, if not most, qualification expenses
that GAO previously found to be personal to the employee, including
actuarial accreditation (B-286026, June 12, 2001), licenses to
practice medicine (B-277033, June 27, 1997), a Certified Government
Financial Manager designation (B-260771, Oct. 11, 1995), and
professional engineering certificates (B-248955, July 24, 1992). See
also B-302548, Aug. 20, 2004 (certified public accountant fees) and
section C.12.b of this chapter for a discussion of attorneys' bar
membership fees.
Page 4-264 - Replace the last partial paragraph with the following:
In 56 Comp. Gen. 81 (1976), the rationale of these cases was extended
to Armed Forces change of command ceremonies. The decision held that
the cost of printing invitations to a change of command ceremony for a
Coast Guard vessel could be paid from the Coast Guard's appropriations
for operating expenses. In view of the traditional role of change of
command ceremonies in the military, the Comptroller General concluded
that the invitations were not inherently personal. (The case was
therefore distinguishable from the decisions previously discussed
prohibiting the use of public funds for greeting cards.) In another
case, the expenditure of official reception and representation (OR&R)
funds for costs of a change of command reception were determined to be
payable from OR&R funds because the reception met the prerequisites
for an "official reception for an incoming commander." 69 Comp. Gen.
242 (1990). (See section C.5 of this chapter for a more general
discussion of related subject matter.)
Page 4-272 - Insert the following, including the reference to new
footnote number 166a, after the first partial paragraph:
As a general rule, then, employees must bear the costs of
transportation between their residences and official duty locations,
even when unusual conditions may increase commuting costs.
60 Comp. Gen. 633, 635 (1981). Congress has authorized agencies to use
appropriations for "the maintenance, operation, or repair of any
passenger carrier," but "only to the extent that such carrier is used
to provide transportation for official purposes." 31 U.S.C. §
1344(a)(1). It has specified that "transporting any individual...
between such individual's residence and such individual's place of
employment is not transportation for an official purpose." Id.
For example, in B-305864, Jan. 5, 2006, GAO held that the United
States Capitol Police (USCP) could not use appropriated funds for a
shuttle bus service from its parking lot to a new USCP facility or any
other USCP building, where the only purpose of the shuttle service is
to facilitate the commutes of USCP employees. The employee's arrival
at the parking lot is viewed as an intermediate stop—like a subway or
bus stop—within the totality of the commute from home to office.
Therefore, the trip from the parking lot to the new USCP facility is
part of the employee's commute and a personal expense. GAO noted that
there would be no objection to the use of appropriated funds for a
shuttle bus from USCP headquarters to the new facility and other USCP
buildings, so long as USCP established a legitimate operational need
to shuttle persons among those buildings and its purpose is not to aid
employees' commutes. If USCP established a legitimate operational need
for shuttle service among USCP buildings, there would also be no
objection to any incidental use of the service by USCP employees to
complete their home-to-work commutes, provided, of course, that there
is no additional expenditure of time or money by the government in
order to accommodate these riders. Id.
Although generally agencies may not pay commuting costs, agencies may
exercise administrative discretion and provide transportation on a
temporary basis when there is a clear and present danger to government
employees or an emergency threatens the performance of vital
government functions. 62 Comp. Gen. 438, 445 (1983). Under 31 U.S.C. §
1344(b)(9), an agency may provide for home-to-work transportation for
an employee if the agency head determines that "highly unusual
circumstances present a clear and present danger, that an emergency
exists, or that other compelling operational considerations make such
transportation essential to the conduct of official business." Section
1344(b)(9) also stipulates, however, that exceptions granted under it
must be "in accordance with" 31 U.S.C. § 1344(d), which limits
emergency exceptions to periods of up to 15 calendar days, subject to
periodic renewal for up to a total of 180 additional calendar days,
under specified detailed procedures.[Footnote 166a]
GAO had occasion to consider the provisions in 31 U.S.C. § 1344 in B-
307918, Dec. 20, 2006. The National Logistic Support Center (NLSC) was
created by the National Oceanic and Atmospheric Administration to
maintain a stockpile warehouse and ship replacement parts and
equipment crucial to ensuring the proper functioning of equipment in
the weather forecasting stations across the country. Since NLSC
receives between 200 and 400 requests each year for emergency service
outside of normal office hours, NLSC schedules employees to attend to
these emergency, after-hours service requests on an "on-call" basis.
When NLSC receives a request for after-hours emergency service, it
notifies the on-call employees who return from their homes to their
NLSC offices to respond to the requests, prepare the required parts
for shipment to the affected weather station, deliver them to the
shipping vendor, and return home. GAO determined that the prohibition
in 31 U.S.C. § 1344(a)(1) precluded NLSC from using appropriated funds
to reimburse its employees for the mileage between their residences
and their NLSC offices since the statute precludes the payment of
commuting expenses regardless of whether it is incident to a regular
work schedule or the on-call work schedule described here. The
emergency exception recognized in 31 U.S.C. §§ 1344(b)(9) and (d) did
not apply because it is limited to brief, specific periods and NLSC's
proposal contemplated reimbursing the on-call employees for commuting
costs on a continual basis—without limit or end date.
Page 4-272 - Insert the following text for new footnote number 166a:
[166a] The detailed procedures require agencies to make written
determinations that name the specific employees, explain the reasons
for their exemption, and specify the duration of their exemptions;
they preclude agency heads from delegating this authority to another;
and they require congressional notification of the above information
for each exemption granted. 31 U.S.C. § 1344(d). Other subsections
require the General Services Administration to promulgate
governmentwide regulations and require agencies to maintain logs
detailing all home-to-work transportation provided by the agency. 31
U.S.C. §§ 1344(e), 1344(f).
Page 4-273 - Replace the first full paragraph with the following:
The purposes of this authority are to improve air quality and reduce
traffic congestion. 5 U.S.C. § 7905 note. Programs established under
section 7905 may include such options as: transit passes or cash
reimbursements for transit passes; furnishing space, facilities, or
services to bicyclists; and nonmonetary incentives. 5 U.S.C. §
7905(b)(2). On April 21, 2000, the President issued Executive Order
No. 13150, set out at 5 U.S.C. § 7905 note, requiring federal agencies
to implement a transportation fringe benefit program under the
authority of section 7905 no later than October 1, 2000. For a
discussion of one such program, see B-316381, July 18, 2008.
Page 4-274 - Insert the following after the first partial paragraph:
In 2007, GAO considered whether an agency may use its appropriated
funds to reimburse employees for home high-speed internet access under
its telecommuting program. Public Law 10452 requires that the agency
ensure that adequate safeguards against private misuse exist and that
the service is necessary for direct support of the agency's mission.
Pub. L. No. 104-52, § 620. As part of its program, the Patent and
Trademark Office (PTO) would require telecommuting employees to
maintain high speed internet access that meets certain minimum
technical requirements at their residence or other designated
alternative work site, and it proposed to reimburse participating
employees for the costs incurred in their use of the internet access
related to PTO work. Employees would be eligible for 50 or 100 percent
reimbursement (up to a maximum of $100 per month) depending on the
amount of monthly business use of the internet service. To obtain
reimbursement, employees each month would be required to submit copies
of invoices from the internet service provider and to attest to the
appropriate percentage of internet service used for work-related
purposes. GAO determined that PTO could use its appropriated funds to
reimburse telecommuting employees for the costs of the high-speed
internet access service since such service, "an essential tool in
today's workplace," is related or "necessary equipment" authorized by
Public Law 104-52. B-308044, Jan. 10, 2007. In doing so, GAO
recommended that PTO periodically review the reimbursements to ensure
that it has adequate safeguards against private misuse and it is
reimbursing employees for home internet service used for official
purposes. Id.
Page 4-275 - Insert the following after the second full paragraph:
The Department of Homeland Security, Customs and Border Protection
(Customs), asked whether it could use its Salaries and Expenses
appropriations to pay for relocation expenses its employees who
currently reside in Canada or Mexico would incur in order to comply
with a new agency directive that their primary residence be in the
United States. The employees work at border stations within the United
States. In response to heightened security concerns, Customs issued a
directive requiring employees assigned to duty stations in the United
States to maintain their primary residence in the United States. The
Federal Travel Regulation, 41 C.F.R. chs. 300-304, does not address
the question of benefits for employees' relocations that do not
involve a change in duty station. Recognizing Customs' determination
that U.S. residency enables its border workforce to better carry out
is mission, GAO determined that Customs' Salaries and Expenses
appropriations were available to pay the relocation expenses if the
agency chose to do so. B-306748, July 6, 2006.
15. State and Local Taxes:
Page 4-286 - Insert the following after the third paragraph:
The complexity can be seen in a 2006 decision in which GAO considered
whether a county "surface water management (SWM)" fee was a
permissible fee for a service provided or an impermissible tax against
the federal government. B-306666, June 5, 2006. A county assessed SWM
fees to implement management programs for controlling runoff pollution
under the federal Clean Water Act. 33 U.S.C. § 1329. The Clean Water
Act also requires federal agencies to comply with state and local
water pollution requirements, "including the payment of reasonable
service charges." 33 U.S.C. § 1323(a). We concluded that the SWM fee
was not a service charge but actually a tax because the county's storm
water management was more like a core government service providing
undifferentiated benefits to the entire public than a narrowly
circumscribed benefit incident to a voluntary act or a service or
convenience provided. B-306666, June 5, 2006. Although the Clean Water
Act waives sovereign immunity from certain state and local
environmental regulations and fees, it does not waive immunity from
taxation. Such a waiver must clearly and expressly confer the
privilege of taxing the federal government. Id. at 11.
Page 4-289 - Replace the second paragraph with the following:
The rule that the government is constitutionally immune from a "vendee
tax" but may pay a valid "vendor tax"—even if the government
ultimately bears its economic burden—has been recognized and applied
in numerous Comptroller General decisions. E.g., B-302230, Dec. 30,
2003; B-288161, Apr. 8, 2002; 46 Comp. Gen. 363 (1966); 24 Comp. Gen.
150 (1944); 23 Comp. Gen. 957 (1944); 21 Comp. Gen. 1119 (1942); 21
Comp. Gen. 733 (1942). The same rule applies to state tax levies on
rental fees. See 49 Comp. Gen. 204 (1969); B-168593, Jan. 13, 1971; B-
170899, Nov. 16, 1970.
Page 4-298 - Replace the first full paragraph with the following:
Naturally, the determination of whether a particular assessment can be
paid does not depend on the taxing authority's characterization of the
assessment. Thus, payment has been denied where the assessment was
termed a "service charge" (B-306666, June 5, 2006), a "benefit
assessment" (B-168287, Nov. 9, 1970), a "systems development charge"
(B-183094, May 27, 1975), or an "invoice for services" (49 Comp. Gen.
72 (1969)).
[End of section]
Chapter 5: Availability of Appropriations: Time:
Page 5-1 - Replace part of the index for section B.1 as follows:
B. The Bona Fide Needs Rule:
1. Background:
a. Introduction;
b. The Concept;
c. "Parking" or "Banking" Funds;
B. The Bona Fide Needs Rule:
1. Background:
Page 5-13 - Replace the first full paragraph with the following:
While the rule itself is universally applicable, determination of what
constitutes a bona fide need of a particular fiscal year depends
largely on the facts and circumstances of the particular case. B-
308010, Apr. 20, 2007; 70 Comp. Gen. 469, 470 (1991); 44 Comp. Gen.
399, 401 (1965); 37 Comp. Gen. at 159.
Page 5-15 - Insert the following new section c., including the
references to new footnote numbers 8a, 8b, 8c, and 8d, after the first
full paragraph:
(c) "Parking" or "Banking" Funds:
"Parking" or "banking" funds are terms used to describe a transfer of
funds to a revolving fund through an interagency agreement in an
attempt to keep funds available for new work after the period of
availability for those funds expires." Parking usually occurs when an
agency transfers fixed-year funds to a revolving or franchise fund in
the mistaken belief that, by doing so, the funds lose their fixed-year
character and remain available indefinitely. However, an agency may
not extend the availability of its appropriations by transferring them
to another agency. B-288142, Sept. 6, 2001. Use of these expired
parked funds violates the bona fide needs rule. An interagency
agreement must be based upon a legitimate, specific, and adequately
documented requirement representing a bona fide need of the year in
which the order is made.
GAO has reported on the parking of funds through interagency
agreements, and, over a period of several years, Department of Defense
(DOD) officials, including the Comptroller, warned against the misuse
of interagency agreements to park or bank funds.[Footnote 8b] In
addition, the Inspectors General for DOD and the Department of the
Interior (Interior) have faulted their agencies for misusing
interagency transactions in this fashion.[Footnote 8c] In October
2006, the Treasury issued a bulletin instructing ordering agencies to
monitor the activity and age of an interagency order and where there
has been no activity for more than 180 days, the ordering agency
"shall determine the reasons for the lack of activity on the order." I
TFM Bulletin No. 2007-03, Attachment I, ¶ III.B.2 (Oct. 1, 2006).
In a 2007 decision, GAO found that DOD improperly parked funds when it
transferred fiscal year appropriations to an Interior franchise fund,
GovWorks.[Footnote 8d] B-308944, July 17, 2007. GovWorks was
established to provide common administrative services to Interior and
other agencies by procuring goods and services from vendors on behalf
of federal agencies on a competitive basis. DOD used Military
Interdepartmental Purchase Requests (MIPRs) to transfer funds to
GovWorks but did not identify the specific items or services that DOD
wanted GovWorks to acquire on its behalf until after the funds had
expired. GAO concluded that DOD had improperly parked funds with
GovWorks by transferring funds from one fiscal year for use by
GovWorks for goods and services after the period of availability for
those funds had expired. GAO pointed out that, by doing so, "officials
of both agencies acted in disregard of ... the bona fide needs rule."
Id. at 13.
Page 5-15 - Insert the following as new footnote number 8a:
[8a] DOD, Undersecretary of Defense, Comptroller, Memorandum for the
Assistant Secretary of the Army (Financial Management and
Comptroller), et al., Proper Use of Interagency Agreements for Non-
Department of Defense Contracts Under Authorities Other than the
Economy Act, Mar. 24, 2005 (2005 DOD Memorandum).
Page 5-15 - Insert the following as new footnote number 8b:
[8b] See GAO, Interagency Contracting: Improved Guidance, Planning,
and Oversight Would Enable the Department of Homeland Security to
Address Risks, GAO-06-996 (Washington, D.C.: Sept. 27, 2006); Improper
Use of Industrial Funds By Defense Extended the Life of Appropriations
Which Otherwise Would Have Expired, GAO/AFMD-84-34 (Washington, D.C.:
June 5, 1984); 2005 DOD Memorandum; DOD, Undersecretary of Defense,
Memorandum for the Chairman of the Joint Chiefs of Staff, et al., Fiscal
Principles and Interagency Agreements, Sept. 25, 2003.
Page 5-15 - Insert the following as new footnote number 8c:
[8c] DOD, Office of Inspector General, FY2005 DOD Purchases Made
Through the Department of the Interior, No. D-2007-044 (Jan. 16,
2007); Interior, Office of the Inspector General, FY2005 Department of
the Interior Expenses Made on Behalf of the Department of Defense, No.
X-IN-MOA-0018-2005 (Jan. 9, 2007).
Page 5-15 - Insert the following as new footnote number 8d:
[8d] GovWorks is officially known as the Acquisition Services
Directorate. See www.govworks.gov (last visited Feb. 4, 2009).
Page 5-17 - Insert the following after the first partial paragraph:
An interesting situation involving a contract with renewable options
arose in B-308026, Sept. 14, 2006. The National Labor Relations Board
(NLRB) entered into a contract with Electronic Data Systems for the
acquisition of ongoing operational and technical support for its
automated Case Activity Tracking System. The contract's initial
performance period was October 1, 2001, through September 30, 2002,
with options through September 30, 2015. On September 30, 2005, NLRB
exercised option four, specifying a performance period of October 1,
2005, through September 30, 2006, and charged the obligation to its
fiscal year 2005 appropriation. In a June 2006 report, the NLRB
Inspector General concluded that NLRB had improperly obligated its
fiscal year 2005 appropriation because obligating the fiscal year 2005
appropriation for the performance of severable services that would
occur entirely in fiscal year 2006 was a violation of the bona fide
needs rule. The Inspector General said that NLRB should charge the
obligation against its fiscal year 2006 appropriation. NLRB proposed
to remedy its improper obligation by modifying the contract to have
the performance period of the contract run from September 30, 2005,
through September 29, 2006, instead of October 1, 2005, through
September 30, 2006. NLRB explained that it had intended a performance
period commencing September 30, 2005, but due to an inadvertent
ministerial error this was not reflected in the contract. GAO agreed
with the Inspector General. GAO said that, given the terms of the
contract, NLRB had incurred an obligation against its fiscal year 2006
appropriation and that NLRB should adjust its accounts accordingly.
NLRB could not remedy its improper obligation by adjusting its
contract's performance period instead of its accounts.
"It is one thing for an agency to take full advantage of available
appropriations, maximizing the effectiveness of federal funds
entrusted to its use; it is quite another thing, however, for an
agency to alter executed contracts in order to reach expired funds—
funds that Congress appropriated for agency programs and activities of
the previous fiscal year. That is what NLRB proposes to do. Were NLRB
to adjust the fourth option's performance period, its sole reason for
doing so would be to reach fiscal year 2005 appropriations because, in
September 2005, that is what NLRB had intended to do. However, NLRB's
fiscal year 2005 appropriation has expired.
... Instead of adjusting its obligations to reflect what actually
occurred, NLRB would revise what actually occurred so that it can
finance option four with fiscal year 2005 funds.... The account
adjustment authority of [31 U.S.C. § 1553(a)] is not a palliative for
errors of this sort."
B-308026, Sept. 14, 2006, at 5-6 (footnote omitted).
Page 5-17 - Insert the following after the first full paragraph:
In 2007, GAO considered how this related to seven end-of-the-fiscal
year subscription renewals. The National Labor Relations Board (NLRB)
purchased seven Web site database subscriptions to support the work of
its attorneys and other professionals. B-309530, Sept. 17, 2007. In
September 2006, NLRB placed orders to renew each of these
subscriptions with the respective vendors, stating that it needed to
have the orders placed for the renewal before the existing
subscriptions expired in order to ensure uninterrupted delivery. Each
order placed was for a period of 1 year beginning on the day following
the expiration of the existing subscription and, for each, the agency
obligated its fiscal year 2006 annual appropriation. For five
subscriptions, the performance period was from October 1, 2006, to
September 30, 2007; for two subscriptions, the performance period was
from November 1, 2006, to October 31, 2007. Id. GAO determined that
NLRB did not violate the bonafide needs rule for the five Web site
database subscription renewals that it needed to have in place on
October 1, 2006, the first day of fiscal year 2007. Even though
delivery of the renewed subscriptions would occur entirely in fiscal
year 2007, NLRB reasonably determined that the renewal orders needed
to be placed in fiscal year 2006 to ensure continued receipt of the
subscriptions past the expiration of the existing subscriptions on
September 30, 2006. Id. However, NLRB violated the bona fide needs
rule when it obligated fiscal year 2006 funds to renew the two Web
site database subscriptions that were not due to expire until October
31, 2006. These subscription renewals were a bona fide need of fiscal
year 2007 for which fiscal year 2007 appropriations should have been
used. Id.
5. Services Rendered beyond the Fiscal Year:
Page 5-24 - Replace the second paragraph after the quote with the
following:
The rationale of 23 Comp. Gen. 370 was applied in 59 Comp. Gen. 386
(1980) (requisition for printing accompanied by manuscript sufficient
for Government Printing Office to proceed with job). See, e.g., 65
Comp. Gen. 741 (1986) (contract for study and final report on
psychological problems among Vietnam veterans); B-257977, Nov. 15,
1995 (contract for 2-year intern training program since interns are
required to complete entire training program to be eligible for
noncompetitive Presidential Management Intern appointment). See also B-
305484, June 2, 2006 (appointment of an arbitrator to hear a case is
in the nature of a nonseverable service and the National Mediation
Board should record an obligation of the current appropriation based
on the estimated cost of paying the arbitrator to submit an award);
73 Comp. Gen. 77 (1994) (subsequent modifications to Fish and
Wildlife Service research work orders should be charged to the fiscal
year current when the work orders were issued since the purpose of the
research is to provide a final research report and the services under
the contract are nonseverable). The last two decisions are noteworthy
because they pointed out that limitation of funds clauses or subject
to availability clauses do not affect the application of the bona fide
needs rule and the severable test. B-305484; 73 Comp. Gen. at 80.
8. Multiyear Contracts:
Page 5-41 - Replace the first full paragraph with the following:
If an agency is contracting with fiscal year appropriations and does
not have multiyear contracting authority, one course of action, apart
from a series of separate fiscal year contracts, is a fiscal year
contract with renewal options, with each renewal option (1) contingent
on the availability of future appropriations and (2) to be exercised
only by affirmative action on the part of the government (as opposed
to automatic renewal unless the government refuses). Leiter v. United
States, 271 U.S. 204 (1926); 66 Comp. Gen. 556 (1987); 36 Comp. Gen.
683 (1957); 33 Comp. Gen. 90 (1953); 29 Comp. Gen. 91 (1949); 28 Comp.
Gen. 553 (1949); B-88974, Nov. 10, 1949. The inclusion of a renewal
option is key; with a renewal option, the government incurs a
financial obligation only for the fiscal year, and incurs no financial
obligation for subsequent years unless and until it exercises its
right to renew. The government records the amount of its obligation
for the first fiscal year against the appropriation current at the
time it awards the contract. The government also records amounts of
obligations for future fiscal years against appropriations current at
the time it exercises its renewal options. The mere inclusion of a
contract provision conditioning the government's obligation on future
appropriations without also subjecting the multiyear contract to the
government's renewal option each year would be insufficient. Cray
Research, Inc. v. United States, 44 Fed. Cl. 327, 332 (1999). Thus, in
42 Comp. Gen. 272 (1962), the Comptroller General, while advising the
Air Force that under the circumstances it could complete that
particular contract, also advised that the proper course of action
would be either to use an annual contract with renewal options or to
obtain specific multiyear authority from Congress. Id. at 278.
Page 5-43 - Insert the following after the quoted language in the
first partial paragraph:
Another course of action for an agency with fiscal year money to cover
possible needs beyond that fiscal year is an indefinite-
delivery/indefinite-quantity (IDIQ) contract. An IDIQ contract is a
form of an indefinite-quantity contract, which provides for an
indefinite quantity of supplies or services, within stated limits,
during a fixed period. 48 C.F.R. § 16.504(a). Under an IDIQ contract,
actual quantities and delivery dates remain undefined until the agency
places a task or delivery order under the contract. When an agency
executes an indefinite-quantity contract such as an IDIQ contract, the
agency must record an obligation in the amount of the required minimum
purchase. At the time of award, the government commits itself to
purchase only a minimum amount of supplies or services and has a fixed
liability for the amount to which it committed itself. See 48 C.F.R.
§§ 16.501-2(b)(3) and 16.504(a)(1). The agency has no liability beyond
its minimum commitment unless and until it places additional orders.
An agency is required to record an obligation at the time it incurs a
legal liability. 65 Comp. Gen. 4, 6 (1985); B-242974.6, Nov. 26, 1991.
Therefore, for an IDIQ contract, an agency must record an obligation
for the minimum amount at the time of contract execution. In B-302358,
Dec. 27, 2004, GAO determined that the Bureau of Customs and Border
Protection's (Customs) Automated Commercial Environment contract was
an IDIQ contract. As such, Customs incurred a legal liability of $25
million for its minimum contractual commitment at the time of contract
award. However, Customs failed to record its $25 million obligation
until 5 months after contract award. GAO determined that to be
consistent with the recording statute, 31 U.S.C. § 1501(a)(1), Customs
should have recorded an obligation for the contract minimum of $25
million against a currently available appropriation for the authorized
purpose at the time the IDIQ contract was awarded.
9. Specific Statutes Providing for Multiyear and Other Contracting
Authorities:
Page 5-46 - Replace the third full paragraph with the following:
The Federal Acquisition Streamlining Act of 1994 (FASA) and related
statutes extended multiyear contracting authority with annual funds to
nonmilitary departments.3° FASA authorizes an executive agency to
enter into a multiyear contract for the acquisition of property or
services for more than 1, but not more than 5 years, if the agency
makes certain administrative determinations. 41 U.S.C. § 254c. Related
laws extend this authority to various legislative branch
agencies.[Footnote 31] Through FASA and the related laws, Congress has
relaxed the constraints of the bona fide needs rule by giving agencies
the flexibility to structure contracts to fund the obligations up
front, incrementally, or by using the standard bona fide needs rule
approach. B-277165, Jan. 10, 2000. To the extent an agency elects to
obligate a 5-year contract incrementally, it must also obligate
termination costs. Cf. B-302358, Dec. 27, 2004 (since the contract at
issue was an indefinite-delivery/indefinite-quantity contract, it was
not subject to the requirements of 41 U.S.C. § 254c and the agency did
not need to obligate estimated termination costs at the time of
contract award).
C. Advance Payments:
1. The Statutory Prohibition:
Page 5-53 - Insert the following before the first full paragraph:
Another example of a statutory exception was considered in B-306975,
Feb. 27, 2006. The National Archives and Records Administration (NARA)
stores temporary and pre-archival records that belong to it and other
federal agencies in its Records Center Programs Facilities. Other
federal agencies may enter into agreements with NARA to transfer and
store records at the NARA records centers. The Treasury and General
Appropriations Act, 2000, established the Records Center Revolving
Fund to pay for expenses and equipment necessary to provide the
storage and authorized agencies to make advance payments to the
Revolving Fund. Pub. L. No. 106-58, title IV, 113 Stat. 430, 460-61
(Sept. 29, 1999). GAO had no objection, therefore, to NARA's proposal
to bill its customers at the beginning of each month based on its
estimate of services it will provide that month and to adjust the next
month's bill to reflect actual costs of services rendered. However, if
a customer advances fiscal year funds for September's estimated costs,
NARA may not credit excess amounts in adjusting October's bill but
rather must return the excess to the customers. These funds would not
be available for obligation of the next fiscal year commencing October
1. Likewise, if a customer agency owes more than the amount advanced
in September, the customer must cover the underpayment from the
previous fiscal year's funds. B-306975, Feb. 27, 2006.
D. Disposition of Appropriation Balances:
3. Expired Appropriations Accounts:
Page 5-72 - Replace the second full paragraph, with the following:
During the 5-year period, the expired account balance may be used to
liquidate obligations properly chargeable to the account prior to its
expiration.[Footnote 50] The expired account balance also remains
available to make legitimate obligation adjustments, that is, to
record previously unrecorded obligations and to make upward
adjustments in previously under recorded obligations. For example,
Congress appropriated funds to provide education benefits to veterans
under the so-called "GI bill," codified at 38 U.S.C. § 1662. Prior to
the expiration of the appropriation, the Veterans Administration (VA)
denied the benefits to certain Vietnam era veterans. The denial was
appealed to the courts. The court determined that certain veterans may
have been improperly denied benefits and ordered VA to entertain new
applications and reconsider the eligibility of veterans to benefits.
VA appealed the court order. Prior to a final resolution of the issue,
the appropriation expired. GAO determined that, consistent with
31 U.S.C. § 1502(b),[Footnote 51] the unobligated balance of VA's
expired appropriation was available to pay benefits to veterans who
filed applications prior to the expiration of the appropriation or who
VA determined were improperly denied education benefits. 70 Comp. Gen.
225 (1991). For a further discussion of the availability of funds
between expiration and closing of an account, see B-301561, June 14,
2004 and B-265901, Oct. 14, 1997.
Page 5-72 - Replace the last partial paragraph with the following:
Unobligated balances in the expired account cannot be used to satisfy
an obligation properly chargeable to current appropriations (B-308944,
July 17, 2007; 50 Comp. Gen. 863 (1971)), or to any other expired
account.' See Chapter 5, section B.1.c. The authority of 31 U.S.C.
§ 1553(a) is intended to permit agencies to adjust their accounts to
more accurately reflect obligations and liabilities actually incurred
during the period of availability. 63 Comp. Gen. 525, 528 (1984).
However, arbitrary deobligation in reliance upon the authority to make
subsequent adjustments is not consistent with the statutory purpose. B-
179708, July 10, 1975.
4. Closed Appropriation Accounts:
Page 5-73 - Replace the third full paragraph with the following:
Once an account has been closed:
"Obligations and adjustments to obligations that would have been
properly chargeable to that account, both as to purpose and in amount,
before closing and that are not otherwise chargeable to any current
appropriation account of the agency may be charged to any current
appropriation account of the agency available for the same purpose."
31 U.S.C. § 1553(b)(1). See also B-301561, June 14, 2004.
5. Exemptions from the Account Closing Procedures:
Page 5-76 - Replace the second full paragraph with the following:
To the extent of its applicability, the statutory scheme found at 31
U.S.C. §§ 1551-1558 provides the exclusive method for the payment of
obligations chargeable to expired appropriations. B-101860, Dec. 5,
1963. Thus, there is generally no authority to transfer appropriations
to some form of trust fund or working fund for the purpose of
preserving their availability. Id.; B-308944, July 17, 2007 (the
Department of Defense transferred fiscal year funds to a franchise
fund in an attempt to impermissibly extend the funds' availability).
See Chapter 5, section B.1.c. See also 31 U.S.C. § 1532, which
prohibits the transfer of appropriations to a working fund without
statutory authority. In B-288142, Sept. 6, 2001, customer agencies
made advances from their fixed period appropriations to the Library of
Congress for deposit to the credit of the no-year FEDLINK revolving
fund. The advances were used by the Library of Congress to pay the
cost of service provided to the agencies by Library of Congress
contractors. Once the service was provided and the cost determined,
the Library discovered that some agencies had advanced amounts in
excess of the cost of the service ordered. We determined that the
Library of Congress lacked authority to apply the excess amount to pay
for orders for service placed after the expiration of the fixed period
appropriation charged with the advance.
[End of section]
[End of Volume 1]
Volume 2:
Chapter 6: Availability of Appropriations: Amount:
Chapter 7: Obligation of Appropriations:
Chapter 8: Continuing Resolutions:
Chapter 9: Liability and Relief of Accountable Officers:
Chapter 10: Federal Assistance: Grants and Cooperative Agreements:
Chapter 11: Federal Assistance: Guaranteed and Insured Loans (no
updates this year):
Chapter 6: Availability of Appropriations: Amount:
B. Types of Appropriation Language:
1. Lump-Sum Appropriations:
Page 6-6 - Replace the last partial paragraph with the following:
The answer to these questions is one of the most important principles of
appropriations law. The rule, simply stated, is this: Restrictions on
a lump-sum appropriation contained in the agency's budget request or
in legislative history are not legally binding on the department or
agency unless they are carried into (specified in) the appropriation
act itself, or unless some other statute restricts the agency's
spending flexibility. See Hein v. Freedom From Religion Foundation,
Inc., 549 U.S., 127 S. Ct. 2553, 2568 n.7 (2007) and cases cited. This
is an application of the fundamental principle of statutory
construction that legislative is not law and carries no legal
significance unless "anchored in the text of the statute." Shannon v.
United States, 512 U.S. 573, 583 (1994).[Footnote 5] Of course, the
agency cannot exceed the total amount of the lump-sum appropriation,
and its spending must not violate other applicable statutory
restrictions.[Footnote 6] The rule applies equally whether the
legislative history is mere acquiescence in the agency's budget
request or an affirmative expression of intent.
Page 6-20 - Replace the first full paragraph with the following:
The Court noted that while the agency had repeatedly informed Congress
about the program in question, "as we have explained, these
representations do not translate through the medium of legislative
history into legally binding obligations." Id. at 194. Subsequent
judicial decisions have, of course, followed this approach. E.g., Hein
v. Freedom From Religion Foundation, Inc., 549 U.S., 127 S. Ct. 2553,
2568 n.7 (2007); State of California v. United States, 104 F.3d 1086,
1093-94 (9th Cir.), cert. denied, 522 U.S. 806 (1997); State of New
Jersey v. United States, 91 F.3d 463, 470-71 (3rd Cir. 1996); Vizenor
v. Babbitt, 927 F. Supp. 1193 (D. Minn. 1996); Allred v. United
States, 33 Fed. Cl. 349 (1995). But see Ramah, Navajo School Board,
Inc. v. Babbitt, 87 F.3d 1338 (D.C. Cir. 1996).[Footnote 19]
C. The Antideficiency Act:
2. Obligation/Expenditure in Excess or Advance of Appropriations:
Page 6-39 - Replace the first full paragraph with the following:
Some government corporations are also classified as agencies of the
United States government, and their officials are therefore "officers
and employees of the United States." To the extent they operate with
funds which are regarded as appropriated funds, they too are subject
to 31 U.S.C. § 1341(a)(1). E.g., B-223857, Feb. 27, 1987 (Commodity
Credit Corporation); B-135075-0.M., Feb. 14, 1975 (Inter-American
Foundation). It follows that section 1341(a)(1) does not apply to a
corporation that, although established by federal statute, is not an
agency of the United States government. E.g., B-308037, Sept. 14, 2006
(Legal Services Corporation); B-175155-0.M., July 26, 1976 (Amtrak).
These principles are, of course, subject to variation if and to the
extent provided in the relevant organic legislation.
Page 6-40 - Insert the following after the first full paragraph:
In B-308715, Apr. 20, 2007, the Department of Energy (DOE) violated
the Antideficiency Act when it obligated and spent appropriated funds
in advance and in excess of available appropriations. DOE is
statutorily barred from using any funds provided by Energy and Water
Development appropriation acts "to implement or finance authorized . .
. loan guarantee programs unless specific provision is made for such
programs in an appropriation Act." 42 U.S.C. § 7278. DOE used 2006 and
2007 appropriations for a loan guarantee program even though Congress
had not enacted the appropriations for that purpose. Consequently, DOE
violated the Antideficiency Act, as well as the purpose statute, 31
U.S.C. § 1301(a) (appropriation "shall be applied only to the objects
for which the appropriations were made"), discussed in Chapter 4.
Page 6-48 - Replace the first paragraph with the following:
To illustrate, an agency's acceptance of an offer to install automatic
telephone equipment for $40,000 when the unobligated balance in the
relevant appropriation was only $20,000 violated the Antideficiency
Act. 35 Comp. Gen. 356 (1955). In addition, when other legislation
limits the availability of an appropriation, the agency may not exceed
the limitation. In B-307720, Sept. 27, 2007, the Department of
Agriculture made payments to participants of the Conservation Security
Program in excess of annual limits on such payments imposed by the
program's authorizing legislation, 16 U.S.C. § 3838-3838c.
Notwithstanding that the amount of the department's appropriation was
adequate otherwise to cover the amount of the payments, the department
could not ignore the statutory limitation on such payments. Id.
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Importantly, FASA does not apply to all contracts that are intended to
meet the needs of more than one fiscal year. Obviously, if multiple
year or no-year appropriations are legally available for the full
contract period, an agency need not rely on FASA. Also, certain
contract forms do not constitute multiyear contracts within the scope
of FASA. For example, in B-302358, Dec. 27, 2004, GAO determined that
a Bureau of Customs and Border Protection procurement constituted an
"indefinite-delivery, indefinite-quantity" (IDIQ) contract that was
not subject to FASA. The decision explained that, unlike a contract
covered by FASA, an IDIQ contract does not obligate the government
beyond its initial year. Rather, it obligates the government only to
order a minimum amount of supplies or services. The cost of that
minimum amount is recorded as an obligation against the appropriation
current when the contract is entered into.' See also B-308969, May 31,
2007 (agency failed to obligate the entire minimum amount of an IDIQ
contract against the appropriated funds for the fiscal year in which
the contract was awarded).
Page 6-70 - Replace the first full paragraph with the following:
The Federal Circuit reversed in E.I. DuPont De Nemours & Company,
Inc., 365 F.3d 1367. The court did not question the general rule
against open-ended indemnity provisions; nor did it dispute the lower
court's conclusion that the indemnity clause in the DuPont contract
was originally invalid under that rule. However, the court concluded
that the government in effect ratified the clause through actions
taken under a subsequent statute—the Contract Settlement Act of 1944,
at 41 U.S.C. §§ 101, 120(a)—that did permit such indemnity provisions.
Thus, the court reasoned, the indemnity clause in this case satisfied
the "otherwise authorized by law" exception in the Antideficiency Act,
31 U.S.C. § 1341(a)(1)(B). E.I. DuPont De Nemours & Company, Inc., 365
F.3d at 1375-80. See also Shell Oil Co. v. United States, 80 Fed. Cl.
411, 418-20 (2008) (similar indemnity clause in World War II contracts
for the supply of aviation gasoline was authorized by the First War
Powers Act of 1941 and the National Defense Act of 1916, so the
government was liable to reimburse the contractors for cleanup costs
under CERCLA).
Page 6-70 - Insert the following after the first full paragraph:
The Court of Federal Claims applied the rule against open-ended
indemnity agreements in a 2007 case involving a mushroom grower
seeking indemnification from the government for losses it had incurred
as a result of operating a defective waste facility that had been
designed by the Department of Agriculture's National Resource
Conservation Service (NRCS). Rick's Mushroom Service, Inc. v. United
States, 76 Fed. Cl. 250 (2007), aid, 521 F.3d 1338 (Fed. Cir. 2008).
Pursuant to a cooperative agreement with NRCS, the facility had been
constructed in accordance with detailed plans and specifications
drafted by NRCS. The plaintiff argued that the cooperative agreement
was a contract that created an implied warranty under the rule known
as the Spearin doctrine. The government asserted that the
Antideficiency Act precludes any employee of the NRCS from possessing
the authority to bind the government to "an open-ended indemnity
contract in the absence of specific authorization for the
undertaking." Id. at 260. The government cited to the statement in
Hercules, 516 U.S. at 427-28, that "the contracting officer's presumed
knowledge of [the Antideficiency Act's] prohibition [is] strong
evidence that the officer would not have provided, in fact, the
contractual indemnification claimed." The Federal Claims court in
Rick's Mushroom agreed, noting that the Supreme Court in Hercules
relied upon the fact that the Comptroller General has repeatedly ruled
that government procurement agencies may not enter into the type of
open-ended indemnity for third-part liability that petitioner claims
to have implicitly received. Rick's Mushroom, 76 Fed. Cl.
at 260. On appeal, the Federal Circuit affirmed the lower court's
findings and added that "such an implied indemnification term would
indeed be 'open-ended' since the amount of the government's obligation
to third parties would not have been known at the time the parties
entered into the cost-share agreement." Rick's Mushroom, 521 F.3d at
1346.
Page 6-83 - Replace the first full paragraph with the following:
More recent GAO decisions likewise consistently apply the principle
that the use of appropriated funds for unauthorized or prohibited
purposes violates the Antideficiency Act (absent an alternative
funding source) since zero funds are available for that purpose. B-
302710, May 19, 2004 (use of funds in violation of statutory
prohibition against publicity or propaganda); B-300325, Dec. 13, 2002
(appropriations used for unauthorized technical assistance purposes);
B-300192, Nov. 13, 2002 (violation of appropriation rider prohibiting
use of funds to implement an Office of Management and Budget
memorandum); B-290005, July 1, 2002 (appropriation used to procure
unauthorized legal services); 71 Comp. Gen. 402, 406 (1992)
(unauthorized use of Training and Employment Services appropriation);
B-246304, July 31, 1992 (potential violation of appropriation act "Buy
American" provision); B-248284, Sept. 1, 1992 (nondecision letter)
(reprogramming of funds to an unauthorized purpose). Cf. B-309181,
Aug. 17, 2007 (although the Department of Defense, without a
delegation of lease authority from the General Services
Administration, improperly entered into a lease, it did not incur an
Antideficiency Act violation because it had an appropriation available
to make lease payments).
3.Voluntary Services Prohibition:
Page 6-102 - Insert the following after the first paragraph:
An interesting 2007 case explored the applicability of the voluntary
services prohibition in the context of a recess appointment. B-309301,
June 8, 2007. Exercising his constitutional power to make a recess
appointment, the President appointed an individual as ambassador to
Belgium whose nomination to that same position he had previously
withdrawn from Senate consideration. The individual was denied a
salary by the State Department under 5 U.S.C. § 5503, which prohibits
payment for services:
"to an individual appointed during a recess of the Senate to fill a
vacancy in an existing office, if the vacancy existed while the Senate
was in session and was by law required to be filled by and with the
advice and consent of the Senate, until the appointee has been
confirmed by the Senate."
Nonetheless, the individual was willing to serve as ambassador, which
raised the question of whether the State Department could accept the
uncompensated services he was willing to provide. GAO noted that the
voluntary services prohibition was enacted to prevent coercive
deficiencies and future equitable claims against the government. Since
there was a statutory prohibition barring the State Department from
paying his salary, this was not a situation in which a coercive
deficiency might occur. Similar to the situation in which an
individual gratuitously waives his salary in advance, the recess
appointee accepted the position knowing that he would not receive
compensation for his services. Id. Even if he were to file a claim
against the government for compensation, there is a statutory
prohibition to payment of his salary. 5 U.S.C. § 5503. Therefore, the
voluntary services prohibition did not apply in this situation, and
the Department of State could allow him to serve as ambassador to
Belgium without compensation. GAO stated: "We are also led to this
interpretation by the fact that serious constitutional issues would
arise if section 5503, in conjunction with the voluntary services
prohibition, were read to directly restrict the President from making
a recess appointment." B-309301, at 6.
Page 6-110 - Insert the following after the first partial paragraph
(between "Id. at 7" and "d. Exceptions"):
In a similar case, GAO was asked to review a model no-cost contract
offered by National Conference Services, Inc. (NCSI) for conference,
event, and trade show planning services. The proposed NCSI contract
provided:
"The Contractor [NCSI] may choose to provide for all services as
required by the task order at no cost to the Government. The
Contractor is entitled to all of the registration, exhibition,
sponsorship and/or other fees collected as payment for performance
under the task order if there is no cost to the Government. In this
case, the Contractor is liable for all costs related to the
performance of the task order as defined in the task order and the
government's liability for payment of services under this task order
is 'zero.'"
B-308968, Nov. 27, 2007, at 2. GAO found that an agency agreeing to
these terms would have no financial liability to NCSI, nor would NCSI
have any expectation of payment from the government. Applying the same
analysis as in the GSA case, GAO determined that an agency entering
into the NCSI contract would neither augment its appropriation nor run
afoul of the voluntary services prohibition. GAO advised that there
are other considerations beyond compliance with fiscal laws that an
agency should take into account before agreeing to a no-cost contract
such as the one proffered by NCSI, including weighing the value of the
services received from the contractor with that of the concession
given to the contractor. For example, an agency should consider the
ultimate cost to the government as a whole when most attendees are
expected to be government employees. Agency officials also should
consider possible conflicts of interest before signing a no-cost
contract, keeping in mind that control of the agenda, selection of
speakers, and other matters concerning content should serve the
government's, not the contractor's, purpose. In addition, agencies
should ensure an open, transparent selection process before entering
into no-cost contracts. GAO said, "Ultimately, an agency must not lose
sight of its objectives for a particular event and should ensure that
in avoiding costs to the agency, it does not take actions that
compromise the effectiveness of its conference, undermine the
achievement of agency goals, or violate ethics rules." Id. at 5-6.
Page 6-113 - Replace the first full paragraph after the quoted
language with the following:
Recent GAO decisions have considered the emergency exception to
31 U.S.C. § 1342 (including its 1990 amendment) in a context other
than a funding gap. See, e.g., B-310108, Feb. 6, 2008. For example,
the question in B-262069, Aug. 1, 1995, was whether the District of
Columbia could exceed its appropriation for certain programs,
including Aid to Families with Dependent Children and Medicaid,
without violating the Antideficiency Act. The main issue in that
decision was whether the "unless authorized by law exception" to the
Antideficiency Act in 31 U.S.C. § 1341(a)(1)(A) applied. GAO held that
it did not. The decision also noted the existence of the emergencies
exception to 31 U.S.C. § 1342, but held that it was likewise
inapplicable:
"An 'emergency' under section 1342 'does not include ongoing, regular
functions of government the suspension of which would not imminently
threaten the safety of human life or the protection of property.' We
are not presently aware of any facts or circumstances that would make
this limited exception available to the District. See, 5 Op. O.L.C. 1,
7-11 (1981)."
B-262069 at 3, fn. 1.
4. Apportionment of Appropriations:
Page 6-132 - Replace the second full paragraph with the following:
The "emergency" exceptions in section 1515(b)(1)(B) have been
considered in only one GAO decision, although a 1989 internal
memorandum suggested that the exception may apply to Forest Service
appropriations for fighting forest fires. B-230117-0.M., Feb. 8, 1989.
A 2008 decision addressing section 1515 also suggested that fighting
forest fires would be the type of activity that could constitute an
emergency; however, because a deficiency or supplemental appropriation
was not required, the section was not applicable. B-310108, Feb. 6,
2008. GAO stated that it is incumbent on Forest Service officials with
funds control responsibilities, who should be aware of the
apportionment limitation and how close the agency is to exceeding that
limitation, to utilize OMB's procedures for time-critical
reapportionments by telephoning OMB to request an emergency
reapportionment before the agency exceeds the limitation. Id. See OMB
Cir. No. A-11, at § 120.37.
The emergency exceptions for safety of human life and protection of
property in 31 U.S.C. § 1515(b) appear to be patterned after identical
exceptions in 31 U.S.C. § 1342, so the case law under that section,
some of which is discussed in section C.3.d of this chapter, would
likely be relevant for construing the scope of the exceptions under
section 1515(b). See 5 Op. Off. Legal Counsel 1, 9-10 (1981) ("as
provisions containing the same language, enacted at the same time, and
aimed at related purposes, the emergency provisions of" sections 1342
and 1515(b)(1)(B) "should be deemed in pari materia and given a like
construction"); Memorandum for the General Counsel, United States
Marshals Service, Continuation of Federal Prisoner Detention Efforts
in the Face of a USMS Appropriation Deficiency, OLC Opinion, Apr. 5,
2000 ("we think it clear that, if an agency's functions fall within §
1342's exception for emergency situations, the standard for the
'emergency' exception under § [1515(b)(1)(B)] also will be met"). See
also Memorandum for the Director, Office of Management and Budget,
Government Operations in the Event of a Lapse in Appropriations, OLC
Opinion, Aug. 16, 1995, at 7, fn. 6.
Page 6-140 - Insert the following after the last paragraph:
In 2008, GAO addressed whether the Forest Service had violated the
Antideficiency Act when it exceeded an apportionment limitation of
$100 million for aviation resources to be used for forest fire
suppression activities. B-310108, Feb. 6, 2008. For fiscal year 2006,
the Forest Service received an appropriation of $1,779,395,000, to
remain available until expended, for wildland fire management. Pub. L.
No. 109-54, title III, 199 Stat. 499, 533 (Aug. 2, 2005). When the
Office of Management and Budget (OMB) apportioned these funds, the
relevant apportionment schedules contained a footnote limiting the
availability of suppression funds for the acquisition of aviation
resources to "not more than $100,000,000." B-310108, at 4. However,
July turned out to be a catastrophic month for wildland fire activity,
and fire suppression expenditures, including those for aviation
resources, increased significantly. By the end of July, the Forest
Service had obligated approximately $118 million for aviation
resources, thus exceeding the apportionment limitation. GAO concluded
that, despite the emergency nature of the actions, the Forest Service
violated the Antideficiency Act when it incurred obligations for the
acquisition of aviation resources in excess of the $100 million
apportionment limitation. Id. at 6-7.
Page 6-141 - Replace the first paragraph with the following:
Since the Antideficiency Act requires an apportionment before an
agency can obligate the appropriation, 31 U.S.C. § 1512(a), an
obligation in advance of an apportionment violates the Act. See B-
255529, Jan. 10, 1994. In other words, if zero has been apportioned,
zero is available for obligation or expenditure.136 When an agency
anticipates a need to obligate appropriations upon their enactment, it
may request (but not receive) an apportionment before a regular
appropriation or continuing resolution has been enacted. Typically,
for regular appropriation acts, agencies submit their apportionment
requests to OMB by August 21 or within 10 calendar days after
enactment of the appropriation, whichever is later. See OMB Circular
No. A-11, Preparation, Submission, and Execution of the Budget, §
120.30 (June 26, 2008). OMB permits agencies to submit requests on the
day Congress completes action on the appropriation bill. Id. § 120.35.
OMB encourages agencies to begin their preparation of apportionment
requests as soon as the House and Senate have reached agreement on
funding levels (id. § 120.30) and to discuss the proposed request with
OMB representatives (id. § 120.35). OMB will entertain expedited
requests and, for emergency funding needs, may approve the
apportionment request by telephone. Id. § 120.37. See, e.g., B-310108,
Feb. 6, 2008, at 7. For continuing resolutions, OMB typically
expedites the process by making "automatic" apportionments under
continuing resolutions. See B-255529, Jan. 10, 1994; OMB Circ. No. A-
11, § 123.5.
5. Penalties and Reporting Requirements:
Page 6-146 - Replace the first full paragraph, and insert new footnote
number 138a as follows:
What if GAO uncovers a violation but the agency thinks GAO is wrong?
The agency must still make the required reports, and must include an
explanation of its disagreement. OMB Cir. No. A-11, § 145. See also
GAO, Anti-Deficiency Act: Agriculture's Food and Nutrition Service
Violates the Anti-Deficiency Act, GAO/AFMD-87-20 (Washington, D.C.:
Mar. 17, 1987). Should an agency fail to make the required report
within a reasonable period of time, GAO will advise Congress that the
agency violated the Antideficiency Act but has not yet reported the
violation. See B-308715, Nov. 13, 2007.[Footnote 138a]
Page 6-146 - Insert the following as new footnote number 138a:
[138a] GAO advised Congress that the Department of Energy (DOE) had
violated the Antideficiency Act in fiscal years 2006 and 2007 but had
not reported the violations to Congress more than 6 months after GAO
found the violations. Subsequently, 2 months after GAO notified
Congress, the department made the required reports and provided copies
to GAO. Letter from Samuel W. Bodman, Secretary, DOE, to David M.
Walker, Comptroller General of the United States, Jan. 14, 2008.
E. Augmentation of Appropriations:
2. Disposition of Moneys Received: Repayments and Miscellaneous
Receipts:
Page 6-170 - Replace footnote number 157 with the following:
[157] In addition to instances described elsewhere in the text, the
following are examples of statutory exceptions to section 3302(b): 42
U.S.C. § 8287 (measured savings from energy savings performance
contracts), discussed in B-287488, June 19, 2001; 42 U.S.C. § 8256 and
note (rebates received by federal agencies from utility companies on
account of energy-saving measures), discussed in B-265734, Feb. 13,
1996; 39 U.S.C. § 410(a) (revenue of the United States Postal Service
and its components in the general exercise of its powers), discussed
in B-317022, Sept. 25, 2008; and 38 U.S.C. § 1729A (compensatory
settlement amounts under the Federal Medical Care Recovery Act
stemming from care provided at Department of Veterans Affairs
facilities), discussed in Memorandum Opinion for the Assistant
Attorney General, Civil Division, Miscellaneous Receipts Act Exception
for Veterans' Health Care Recoveries, OLC Opinion, Dec. 3, 1998.
Page 6-172 - Insert the following after the first full paragraph:
In B-305402, Jan. 3, 2006, GAO refused to classify as a refund an
amount that did not represent the return of an overpayment to the
agency. That case concerned the proper treatment of demutualization
compensation that the National Aeronautics and Space Administration
(NASA) received from its contractor, California Institute of
Technology (Caltech). Caltech had received the demutualization
compensation in the form of stock as a policyholder of Prudential Life
Insurance Company policies that Caltech held for some employees
operating the Jet Propulsion Laboratory for NASA. Caltech notified
NASA of the compensation, and NASA instructed Caltech to liquidate the
stock and place the proceeds in an interest-bearing account. GAO found
that these proceeds do not constitute a refund that NASA could credit
to its appropriation because they do not represent a repayment of
funds that were "in excess of what was actually due"; that is, the
proceeds do not reflect a repayment from Caltech of an amount that
NASA had previously overpaid Caltech. At the time NASA paid allocable
costs of the defined benefit retirement plan, the amounts were
correct, and the fact that the moneys NASA received as a result of the
demutualization are related to the terminated retirement plans does
not make the proceeds a refund. Since the demutualization compensation
cannot be properly characterized as a refund, the proceeds from the
sale of the demutualization compensation must be deposited in the
general fund of the Treasury as miscellaneous receipts. Id.
Page 6-173 - Replace the first full paragraph, (after the quoted
language) with the following:
In this regard, the decision rejected the department's suggestion that
the interest payment could be regarded as merely restoring the
appropriation to an amount adjusted for inflation. The decision noted
that Congress does not appropriate on a net present value basis.
Likewise, GAO has held that agencies may retain and credit to their
appropriations refunds in the form of recoveries under the False
Claims Act (31 U.S.C. § 3729) to the extent that they represent
compensatory damages to reimburse erroneous payments, but not
"exemplary" damages in the nature of penalties. B-281064, Feb. 14,
2000; 69 Comp. Gen. 260 (1990). See also B-310725, May 20, 2008 (the
Inspector General (IG) of the National Science Foundation may not
credit to its appropriation amounts recovered by the Justice
Department under the False Claims Act to reimburse investigative costs
incurred by the IG's office that are specifically provided for in its
appropriation).
Page 6-176 - Replace the fourth full paragraph with the following:
The deposit timing requirements of 31 U.S.C. § 3302(c) and the
implementing Treasury regulations apply as well when public moneys are
held by nonfederal custodians. Thus, GAO found that these requirements
were violated where the Department of Veterans Affairs (VA) allowed
contractors to hold payments it collected on VA loans in an interest-
bearing account for 30 days or more before transferring the payments
to the Treasury. See GAO, Internal Controls: VA Lacked Accountability
Over Its Direct Loan and Loan Sale Activities, GAO/AIMD-99-24
(Washington, D.C.: Mar. 24, 1999), at 16-18. See also B-305402, Jan.
3, 2006 (the National Aeronautics and Space Administration should have
deposited amounts received from its contractor in the Treasury the day
following the receipt of those amounts).
Page 6-177 - Replace the partial paragraph after the quoted language
with the following:
B-303413, Nov. 8, 2004. See also B-300826, Mar. 3, 2005, at 6, noting
that an agency cannot avoid section 3302(b) by authorizing a
contractor to charge fees to outside parties and keep the payments in
order to offset costs that would otherwise be borne by agency
appropriations. The decision in B-300826 was affirmed in B-306663,
Jan. 4, 2006. See also B-307137, July 12, 2006 (the Department of
Energy (DOE) violated 31 U.S.C. § 3302(b) and augmented its
appropriations when it authorized the United States Enrichment
Corporation to hold, invest, and use the proceeds from public sales of
government-owned uranium on behalf of DOE prior to the enactment of
specific statutory authority exempting the proceeds of those uranium
sales from section 3302(b)).
Page 6-183 - Insert the following after the first full paragraph:
A recent situation involved fees collected by a government
corporation. Congress established the State Justice Institute as a
private, nonprofit corporation to further "the development and
adoption of improved judicial administration in State courts in the
United States." 42 U.S.C. § 10702(a). Although the Institute receives
an annual appropriation from Congress, the Institute is not a
government agency or instrumentality except for limited purposes
specified in its authorizing statute, and its employees are not to be
considered employees of the United States. 42 U.S.C.
§ 10704. The Executive Director of the Institute asked whether the
Institute could retain fees the Institute obtains for the use of
advertising space in its semiannual newsletter, or whether the fees
must be treated as miscellaneous receipts under 31 U.S.C.
§ 3302(b) and deposited in the Treasury. The Institute is not a
government agency, and GAO stated that "although Congress imposed on
the Institute certain requirements typically applicable to a federal
agency, it did so selectively, against the general backdrop of a
private corporate entity. 42 U.S.C. § 10702(a)." B-307317, Sept. 13,
2006, at 3. GAO found nothing explicitly or implicitly in the
Institute's authorizing statute that would suggest or require
application of the miscellaneous receipts statute to the Institute.
Therefore, GAO concluded that in accepting the advertising fees the
Institute was not "receiving money for the Government," and so the
Institute could retain the fees without violating the miscellaneous
receipts statute. Id. (GAO cautioned, however, that in retaining such
fees the Institute should be cognizant of the legal constraints and
policy considerations regarding advertising it chooses to carry).
Page 6-197 - Replace the last partial paragraph, with the following:
The decision in B-302962 held that the exception to the
interdepartmental waiver doctrine applied in the case of damage to
facilities of the National Archives and Records Administration (NARA)
whose operations were financed by a revolving fund. Thus, NARA should
collect from other federal agencies, their contractors, or NARA's own
contractors, as the case may be, amounts sufficient to repair damages
they caused to NARA's facilities and deposit those amounts into the
revolving fund.
In other circumstances, however, GAO concluded that NARA's funds were
available to cover the damage. In B-308822, May 2, 2007, a building
failure caused water damage to records NARA stored for its federal
agency customers in a federal building owned and maintained by the
General Services Administration (GSA). Here, the Federal Property
Administrative Services Act of 1949, as amended, governs the
relationship between GSA and its federal agency customers who occupy
GSA-owned and operated buildings. Both GSA's management of federal
buildings and NARA records centers operate out of revolving funds.
Requiring GSA to reimburse another agency for damages it incurred or
reduce the rental charges to cover the damages would reduce amounts
available to finance new construction, undermining one of the purposes
of the Act. Accordingly, GAO concluded that GSA was not required to
reimburse NARA for property damage.
Page 6-199 - Replace the second paragraph with the following:
Federal agencies must have statutory authority both (1) to charge fees
for their programs and activities in the first instance and (2), even
if they have fee-charging authority, to retain in their appropriations
and use the amounts collected. See, e.g., B-306663, Jan. 4, 2006; B-
300826, Mar. 3, 2005; B-300248, Jan. 15, 2004. Thus, fees and
commissions paid either to the government itself or to a government
employee for activities relating to official duties must be deposited
in the Treasury as miscellaneous receipts, absent statutory authority
to the contrary.
Page 6-199 - Replace the last paragraph with the following:
Of course, if and to the extent expressly authorized by statute an
agency may retain fees and use them to offset operating costs. See,
e.g., 2 U.S.C. § 68-7(b) (fees and other charges collected for
services provided by the Senate Office of Public Records); 7 U.S.C. §
7333(k)(3) (fees for certain services collected by the Commodity
Credit Corporation); 10 U.S.C. § 2262 (fees collected from
participants to defray Department of Defense costs of hosting
conferences); 28 U.S.C. § 1921(e) (fees collected by the United States
Marshals Service for service of civil process and judicial execution
seizures and sales, to the extent provided in advance in appropriation
acts); 28 U.S.C. § 1931 (specified portions of filing fees paid to the
clerk of court). The relevant legislation will determine precisely
what may be retained. E.g., 34 Comp. Gen. 58 (1954). For example,
amounts collected under 10 U.S.C. § 2262 with respect to a Department
of Defense-hosted conference can be credited to the appropriation from
which the costs of the conference are paid to reimburse the Department
for the costs incurred, but if the amount collected ends up being
greater than the actual costs of the conference, the excess amount is
to be deposited into the Treasury as miscellaneous receipts. 10 U.S.C.
§§ 2262(b), (c).
Page 6-212 - Insert the following after the first paragraph:
In B-306860, Feb. 28, 2006, GAO concluded that the terms of a
settlement agreement entered into between the Office of Federal
Housing Enterprise Oversight (OFHEO) and the Federal Home Loan
Mortgage Corporation (Freddie Mac) would not augment OFHEO's
appropriation. In this case, the settlement agreement was intended to
resolve an administrative proceeding, including production of
documents, brought by OFHEO against Freddie Mac pursuant to OFHEO's
regulatory oversight authority. As part of the settlement, Freddie Mac
agreed to provide the documents and to pay a vendor up to $1 million
to electronically format and code certain documents for OFHEO's use.
The settlement agreement satisfied a prosecutorial objective, that is,
the production of documents, and there was no contractual relationship
between OFHEO and the vendor. Instead, the contract was between
Freddie Mac and the vendor, and it was Freddie Mac, not OFHEO, who was
contractually obligated to pay the vendor. Thus, the costs of
formatting the documents were Freddie Mac's costs and not OFHEO's, and
Freddie Mac's payment of the formatting costs did not constitute a de
facto augmentation of OFHEO's appropriation.
The OFHEO decision was explained in B-308476, Dec. 20, 2006, in which
GAO determined that the Federal Motor Carrier Safety Administration
(FMCSA) did not have authority to retain an award of criminal
restitution that a federal district court ordered to be paid to FMCSA.
In carrying out its mission to improve the safety of commercial
vehicle operations, FMCSA issues and enforces motor carrier safety
regulations concerning specified commercial trucking and bus
operations. See 49 U.S.C. § 113. A trucking company's officers pleaded
guilty to violating both the agency regulations and a criminal statute
concerning conspiracy to commit false statement offenses. In accepting
the plea, the court ordered, among other penalties, the defendants to
pay restitution to FMCSA in the amount of $20,000 to compensate FMCSA
for the costs of the investigation and prosecution of the case. Unlike
the situation in the OFHEO case, if FMCSA retained the $20,000 in
restitution, the agency would improperly augment its appropriation.
FMCSA receives an appropriation each year to pay for costs of
investigations such as the one conducted in the trucking company's
case—such costs are necessary expenses of enforcing the agency's
safety regulations and are obligations of FMCSA. As such, crediting
the restitution award to FMCSA's appropriation would improperly
contribute financial resources that supplement those already provided
for the agency by Congress. Therefore, FMCSA was required to remit the
awarded funds to the Treasury as miscellaneous receipts. See also B-
310725, May 20, 2008 (amounts recovered pursuant to the False Claims
Act to reimburse investigative costs incurred by the Inspector General
(IG) of the National Science Foundation should be deposited into the
Treasury as miscellaneous receipts because Congress appropriates a
specific amount to the IG to cover these investigative costs).
Page 6-214 - Insert the following after the first full bullet at the
top of the page:
* Proceeds from the sale of government-owned uranium used to
compensate the United States Enrichment Corporation (USEC) for
expenses it incurred on behalf of the Department of Energy (DOE).
Here, DOE arranged for an independent revenue stream not appropriated
to it by Congress; had no authority to retain the proceeds of that
revenue stream if received directly; and arranged for its agent, USEC,
to receive the proceeds of the unauthorized revenue stream and use
those amounts to pay for expenses incurred on behalf of DOE. As DOE's
agent, USEC received "money for the government" but failed to deposit
the money in the Treasury. Therefore, DOE violated the miscellaneous
receipts statute and augmented its appropriations. B-307137, July 12,
2006.
Page 6-218 - Replace the second paragraph with the following:
Examples of cases in which use of the "Moneys Erroneously Received and
Covered" appropriation was found authorized are Reynolds v. Alabama
Department of Transportation, Civ. A. No. 2:85cv665-MHT (M.D. Ala.
Jan. 2, 2008) (contempt fines collected incident to a consent decree
erroneously deposited to the U.S. Treasury miscellaneous receipts
account by the Clerk of Court; funds returned to the court's
registry); 71 Comp. Gen. 464 (1992) (refund to investment company of
late filing fee upon issuance of order by Securities and Exchange
Commission exempting company from filing deadline for fiscal year in
question); 63 Comp. Gen. 189 (1984) (Department of Energy deposited
overcharge recoveries from oil companies into general fund instead of
first attempting to use them to make restitution refunds); B-217595,
Apr. 2, 1986 (interest collections subsequently determined to have
been erroneous).
4. Other Augmentation Principles and Cases:
Page 6-239 - Insert the following after the third bullet:
* The Office of Compliance may not accept reimbursements of its
costs of investigating and prosecuting alleged violations of section 5
of the Occupational Safety and Health Act (29 U.S.C. § 654), and its
costs of monitoring planned abatement actions, from legislative branch
agencies since the Office of Compliance receives an annual
appropriation to fund these activities. B-308774, Mar. 15, 2007.
* The Pension Benefit Guaranty Corporation may not retain a
reimbursement for financial analysis services associated with a
request for waiver from claims arising under title IV of the Employee
Retirement Income Security Act. B-307849, Mar. 1, 2007. The
miscellaneous receipts statute, 31 U.S.C. § 3302(b), requires
government corporations to deposit amounts received into the general
fund of the Treasury, absent statutory authority to the contrary. Id.
[End of section]
Chapter 7: Obligation of Appropriations:
B. Criteria for Recording Obligations (31 U.S.C. § 1501):
1. Section 1501(a)(1): Contracts:
Page 7-21 - Replace first full paragraph with the following:
What does all this signify from the perspective of obligating
appropriations? As we noted at the outset, the obligational impact of
a variable quantity contract depends on exactly what the government
has bound itself to do. A fairly simple generalization can be deduced
from the decisions: In a variable quantity contract (requirements or
indefinite-quantity), any required minimum purchase must be obligated
when the contract is executed; subsequent obligations occur as work
orders or delivery orders are placed, and are chargeable to the fiscal
year in which the order is placed. B-308969, May 31, 2007 (agency
should have obligated the $1 million required minimum purchase under
an IDIQ contract against the appropriation for the fiscal year in
which the contract was executed). See also B-302358, Dec. 27, 2004. Of
course, the bona fide needs rule applies both at the time the agency
enters into the contract and when the agency subsequently places task
or work orders.
5. Section 1501(a)(5): Grants and Subsidies:
Page 7-41 - Replace the first full paragraph with the following:
Applying the above principles, the Comptroller General found that a
document entitled "Approval and Award of Grant" used by the Economic
Development Administration was sufficient for recording grant
obligations under the local public works program because it "reflects
the Administration's acceptance of a grant application; specifies the
project approved and the amount of funding; and imposes a deadline for
affirmation by the grantee." B-126652, Aug. 30, 1977. See also B-
316372, Oct. 21, 2008 (similar language in a financial assistance
award had the same key terms that established an obligation). Once the
appropriation has been properly obligated, performance by the grantee
and the actual disbursement of funds may extend beyond the period of
obligational availability. B-300480, Apr. 9, 2003, aff'd, B-300480.2,
June 6, 2003; B-289801, Dec. 30, 2002; 31Comp. Gen. 608, 610 (1952);
20 Comp. Gen. 370 (1941); B-37609, Nov. 15, 1943; B-24827, Apr. 3,
1942; B-124374- 0.M., Jan. 26, 1956.
Page 7-41 - Replace the last partial paragraph with the following:
In other situations, the obligating action for purposes of 31 U.S.C.
§ 1501(a)(5)(A) may take place by operation of law under a statutory
formula grant or by virtue of actions authorized by law to be taken by
others that are beyond the control of the agency (even when the
precise amount of the obligation is not determined until a later
time). When this occurs, the documentary evidence used to support the
accounting charge against the appropriation is a reflection of, not
the creation of, the obligation under the particular law and usually
is generated subsequent to the time that the actual obligation arose.
63 Comp. Gen. 525 (1984); B-164031(3).150, Sept. 5, 1979. Thus where
an agency is required to allocate funds to states on the basis of a
statutory formula, the formula establishes the obligation to each
recipient rather than the agency's allocation since, if the allocation
is erroneous, the agency must adjust the amounts paid each recipient.
41 Comp. Gen. 16 (1961); B-164031(3).150, Sept. 5, 1979. See also B-
316915, Sept. 25, 2008 (under a statutory program to provide funds to
states to assist in the administration of federal elections, a
precondition that a state certify to the agency compliance with
various requirements does not affect the fact that the payments are
"required to be paid" within the meaning of 31 U.S.C. § 1501(a)(5)(a)
and are thus obligated by operation of law, since the state may
fulfill the precondition and be entitled to receipt of the funds
through no actions on the part of the agency).
7. Section 1501(a)(7): Employment and Travel:
Page 7-46 - Replace the third paragraph with the following:
For persons compensated on an actual expense basis, it may be necessary
to record the obligation as an estimate, to be adjusted when the
services are actually performed. Documentation requirements to support
the obligation or subsequent claims are up to the agency. For example,
the National Mediation Board (NMB) incurs an obligation when it
appoints a neutral arbitrator to a grievance adjustment board to hear
a specific case or a specified group of related cases. Because NMB
does not control the number of days an arbitrator will work before
submitting an award, NMB should record an obligation based on its best
estimate of the costs of paying the arbitrator and adjust the
obligation up or down as more information becomes available. B-305484,
June 2, 2006. NMB should liquidate the obligation from the
appropriation current at the time NMB incurs the obligation,
notwithstanding that the arbitrator's performance may extend into the
next fiscal year. Id. To the extent GAO indicated in two prior
decisions, B-217475, Dec. 24, 1986, and B-217475, May 5, 1986, that
NMB may record obligations month-to-month based on the anticipated
expenditures it approves in monthly compensation requests, those
decisions were overruled by B-305484.
C.Contingent Liabilities:
Page 7-56 - Replace the second full paragraph with the following:
Contingent liabilities are not recordable as obligations under section
1501 of title 31.34 Rather, a contingent liability ripens into a
recordable obligation for purposes of section 1501 only if and when
the contingency materializes. E.g., B-305484, June 2, 2006; 62 Comp.
Gen. 143, 145-46 (1983); 37 Comp. Gen. 691-92 (1958); GAO, Policy and
Procedures Manual for Guidance of Federal Agencies, title 7, § 3.5.0
(Washington, D.C.: May 18, 1993) (hereafter GAO-PPM).
[End of section]
Chapter 8: Continuing Resolutions:
B. Rate for Operations:
1. Current Rate:
Page 8-11 - Insert after the first partial paragraph:
GAO considered the distinction between transferred and reprogrammed
funds when calculating the current rate for operations under a
continuing resolution at the request of the United States Capitol
Police (USCP). Specifically, the USCP asked whether $10 million of
unobligated no-year and multiyear balances that it had made available
through reprogrammings and transfers to its fiscal year 2006 "General
Expenses" appropriation should be included in calculating the current
rate under the continuing resolution for its 2007 General Expenses
appropriation. USCP had made that amount available for fiscal year
2006 operational needs via a combination of reprogrammings within its
General Expenses appropriation and a transfer from its Salaries
appropriation to its General Expenses appropriation. GAO stated that
in determining the current rate the amount reprogrammed must be
distinguished from the amount transferred because reprogrammings and
transfers are fundamentally different transactions. A reprogramming is
the movement of funds already in an appropriation from one use to
another. Unless otherwise restricted by statute, agencies may
reprogram funds as they wish to adapt to changing circumstances.
Because Congress had already made available the reprogrammed portion
of the $10 billion, USCP should consider that amount as part of its
current rate under the continuing resolution. In contrast, a transfer
is the movement of funds between appropriations, which an agency may
do only when Congress grants it the statutory authority to do so. USCP
had discretionary authority to transfer funds and used that authority
in fiscal year 2006 to transfer the funds from its Salaries
appropriation to its General Expenses appropriation. GAO concluded
that transfers made at an agency's discretion pursuant to its general
transfer authority, and not directed by law, should not be included in
the calculation. Therefore, the portion of the $10 million comprised
of the transferred funds could not be included in the calculation of
the current rate under the continuing resolution. B-308773, Jan. 11,
2007.
Page 8-27 - Replace the cite after the quoted language carried over
from page 8-26 with the following:
Id. See also B-316533, July 31, 2008 (a prohibition against using the
authority provided under section 872 of the Homeland Security Act to
reorganize the Department of Homeland Security was applicable to
amounts appropriated by a fiscal year 2008 continuing resolution
because the prohibition, enacted in 2007, was carried forward under
the terms of the projects or activities limitation in the 2008
continuing resolution).
[End of section]
Chapter 9: Liability and Relief of Accountable Officers:
B. General Principles:
2. Who Is an Accountable Officer?:
Page 9-12 - Replace the last paragraph with the following:
In B-280764, GAO did not question the merits of extending
accountability and potential pecuniary liability to more Department of
Defense (DOD) employees, only the means of accomplishing that
objective. In 2002, Congress added new section 2773a to title 10,
United States Code, which supplied the department with the requisite
statutory authority to designate additional accountable officials.'
See B-305919, Mar. 27, 2006 (DOD may employ foreign local nationals as
departmental accountable officials under section 2773a).
3. Funds to Which Accountability Attaches:
Page 9-27 - Replace the second full paragraph with the following:
A common example is the Department of Veterans Affairs (VA) "Personal
Funds of Patients" (PFOP) account. Patients, upon admission to a VA
hospital, may deposit personal funds in this account for safekeeping
and use as needed. Upon release, the balance is returned to the
patient. Patient funds in the PFOP account have been consistently
treated as accountable funds. B-309267, Jan. 15, 2008; 68 Comp. Gen.
600 (1989); 68 Comp. Gen. 371 (1989); B-226911, Oct. 19, 1987; B-
221447, Apr. 2, 1986; B-215477, Nov. 5, 1984; B-208888, Sept. 28, 1984.
C. Physical Loss or Deficiency:
2. Who Can Grant Relief?:
Page 9-40 -Replace footnote 27 with the following:
[27] As noted earlier in section B.2 of this chapter, the Department
of Defense (DOD) has been given the authority to hold other
"departmental accountable officers," besides certifying and disbursing
officers, liable financially for illegal or erroneous payments
resulting from their negligence. 10 U.S.C. § 2773a. Cf. B-305919, Mar.
27, 2006 (foreign local nationals may serve as DOD accountable
officials under 10 U.S.C. § 2773a, even though they may not be subject
to pecuniary liability under United States law, because of U.S.
agreements with foreign governments). This would include employees
whose duty it was to provide information, data, or services that are
directly relied upon by a certifying official in the certification of
vouchers for payment.
Page 9-41 - Replace the first full paragraph with the following:
The $3,000 limitation applies to "single incidents or the total of
similar incidents which occur about the same time and involve the same
accountable officer." 7 GAO-PPM § 8.9.C. Thus, two losses arising from
the same theft, one under the limit and one over, should be combined
for purposes of relief. B-189795, Sept. 23, 1977. In B-193380, Sept.
25, 1979, an imprest fund cashier discovered a $300 shortage while
reconciling her cash and subvouchers. A few days later, her
supervisor, upon returning from vacation, found an additional $500
missing. Since the losses occurred under very similar circumstances,
GAO agreed with the agency that they should be treated together for
purposes of seeking relief. Another case, B-187139, Oct. 25, 1978,
involved losses of $1,500, $60, and $50. Since there was no indication
that the losses were related, the agency was advised to separately
resolve the $60 and $50 losses administratively. (The ceiling was $500
at the time of B-193380 and B-187139.) Likewise, in B-260862, June 6,
1995, GAO granted relief to an imprest fund cashier from liability for
the loss of $3,939 missing from a safe, apparently due to theft, but
did not grant relief for an $820 shortage allegedly due to a
bookkeeping error discovered the day prior to the theft. The $820
shortage was referred back to the agency for resolution since it was
under the $3,000 limit. See also B-309267, Jan. 15, 2008 (GAO denied
relief to a cashier for a total loss of $3,280 that occurred in 2001,
and referred a second loss of $123 that occurred in 2003 back to the
agency for resolution).
Page 9-43 - Replace the first paragraph with the following:
As noted above and in sections B.2 and C.1.b of this chapter, the
statutory scheme for military accountable officers was changed by
section 913 of Public Law No. 104-106, div. A, title IX, subtitle B,
110 Stat. 186, 410-12 (Feb. 10, 1996). Section 913 amended a number of
provisions in titles 10, 31, and 37 of the United States Code to
authorize the designation and appointment of certifying and disbursing
officials within the Department of Defense (DOD) (including military
departments, defense agencies, and field activities) to clearly
delineate a separation of duties and accountabilities between
personnel who authorize payments (certifying officers) and personnel
who make payments (disbursing officers). In doing so, section 913 also
amended 31 U.S.C. § 3527(b) to apply to all accountable officials of
the armed forces, not just disbursing officers,[Footnote 31] and
included a new section 3527(b)(1)(B) to provide relief for erroneous
payments made by military accountable officials. As in the case of a
physical loss or deficiency, the finding of the Secretary involved
regarding whether the circumstances warrant relief is conclusive on
the Comptroller General. In B-307693, Apr. 12, 2007, GAO addressed
whether the limitation in 31 U.S.C. § 3527 applies to requests from
certifying officers of DOD components other than the armed services
for relief of erroneous payments under the revised section 3527(b).
GAO determined that, because the term "armed forces" as used in
section 3527(b) applies only to the Army, Navy, Air Force, or Marine
Corps, GAO may entertain relief requests from certifying officers of
other DOD components in the same manner as it does requests from
certifying officers in other agencies. Thus, GAO considered the
request of a certifying officer of the Defense Logistics Agency, an
agency of DOD but not one of the armed forces, in B-307693.
3. Standards for Granting Relief:
Page 9-46 - Replace the last partial paragraph with the following:
GAO follows the same rule, stating it in literally dozens of relief
cases. E.g., B-309267, Jan. 15, 2008; B-288014, May 17, 2002; B-
271896, Mar. 4, 1997; 72 Comp. Gen. 49, 53 (1992); 67 Comp. Gen. 6
(1987); 65 Comp. Gen. 876 (1986); 54 Comp. Gen. 112 (1974); 48 Comp.
Gen. 566 (1969).[Footnote 33]
Page 9-55 - Replace the last partial paragraph inserting new footnote
number 35a as follows:
The rationale is fairly simple. Money does not just get up and walk
away. If it is missing, there is an excellent chance that someone took
it. If the accountable officer exercised the requisite degree of care
and properly safeguarded the funds, it is unlikely that anyone else
could have taken the money without leaving some evidence of forced
entry. Therefore, where there is no evidence to explain a loss, the
leading probabilities are that the accountable officer either took the
money or was negligent in some way that facilitated theft by someone
else.'" Be that as it may, denial of relief in an unexplained loss
case is not intended to imply dishonesty by the particular accountable
officer; it means merely that there was insufficient evidence to rebut
the applicable legal presumption. See B-122688, Sept. 25, 1956. See
also B-258357, Jan. 3, 1996 (loss of receipts creates "unexplained
loss" from imprest fund for which cashier is liable).
Page 9-55 - Insert new footnote number 35a as follows:
[35a] For an example of an unexplained loss case where the cashier was
found to be negligent in the handling of the funds involved, see B-
309267, Jan. 15, 2008.
Page 9-73 - Replace the first full paragraph with the following:
The result in these cases should not be taken too far. Poor agency
security does not guarantee relief; it is merely another factor to
consider in the proximate cause equation. Another relevant factor is
the nature and extent of the accountable officer's efforts to improve
the situation. See, e.g., B-309267, Jan. 15, 2008 (while GAO has not
required accountable officers to report concerns about the security of
funds to agency management officials, GAO has treated such actions as
evidence of laxity on the part of agency management that could
mitigate against the presumption of negligence; here, relief was
denied since there was evidence that the cashier was negligent in
handling the funds).
D. Illegal or Improper Payment:
2. Certifying Officers:
Page 9-91 - Replace the last paragraph with the following:
Whatever else the certifying officer's verification burden may or may
not involve, it certainly involves questioning items on the face of
vouchers or supporting documents, which simply do not look right. A
critical tool that certifying officers have to carry out their
responsibility is the power to question, and refuse certification of,
payments that may be improper. See, e.g., B-303177, Oct. 20, 2004. For
example, GAO considered the propriety of imposing liability on a
certifying officer who certified payment of a purchase card billing
statement that included improper purchase card transactions. B-307693,
Apr. 12, 2007. GAO found that, to execute his statutory responsibility
properly and to avoid possible pecuniary liability, the certifying
officer should have scrutinized the billing statement and disputed the
questionable transactions made by the cardholder before certifying the
billing statement for payment to the bank servicing the purchase card.
Since he knew or should have known that he was certifying an improper
payment when he certified the purchase card payment, the certifying
officer was denied relief. Id.
Also, a certifying officer who certifies a voucher for payment in the
full amount claimed, disregarding the fact that the accompanying
records indicate an outstanding indebtedness to the government against
which the sum claimed is available for offset, is accountable for any
resulting overpayment. 28 Comp. Gen. 425 (1949). See also B-303920,
Mar. 21, 2006 (facts and circumstances should have alerted certifying
officer to the fact that he was improperly certifying payments to
purchase bottled water for employees, an unauthorized expenditure).
Similarly, certifying a voucher in the full amount within a prompt
payment discount period without taking the discount will result in
liability for the amount of the lost discount. However, a certifying
officer is not liable for failing, even if negligently, to certify a
voucher within the time discount period. 45 Comp. Gen. 447 (1966).
E. Other Relief Statutes:
1. Statutes Requiring Affirmative Action:
Page 9-129 - Replace the last paragraph with the following:
Since 31 U.S.C. § 3728, the primary certifying officer relief statute,
does not apply to the legislative or judicial branches, Congress has
enacted specific statutes for several legislative branch agencies and
for the judicial branch authorizing or requiring the designation of
certifying officers, establishing their accountability, and, in some
cases, authorizing the Comptroller General to grant relief. Patterned
after 31 U.S.C. § 3728, they are: 2 U.S.C. § 142b (Library of
Congress), 2 U.S.C. § 142e (Congressional Budget Office), 2 U.S.C. §
142/ (Office of Compliance), 2 U.S.C. § 1904 (Capitol Police), and 44
U.S.C. § 308 (Government Printing Office). The Secretary of the Senate
and the Speaker of the House of Representatives have the authority to
waive the collection of erroneous payments of salary or allowances for
employees of the Senate and the House, respectively. 2 U.S.C. §§ 130c,
130d. The relevant provision for the judicial branch is 28 U.S.C. §
613. See B-303920, Mar. 21, 2006.
[End of section]
Chapter 10: Federal Assistance: Grants and Cooperative Agreements:
A. Introduction:
Page 10-5 - Replace footnote number 6 with the following:
6 The Catalog of Federal Domestic Assistance is published by the
General Services Administration and the Office of Management and
Budget (OMB) pursuant to 31 U.S.C. § 6104 and OMB Circular No. A-89,
Federal Domestic Assistance Program Information (Aug. 17, 1984). The
Catalog is a governmentwide list of financial and nonfinancial federal
assistance programs, projects, services, and activities administered
by federal agencies that provide assistance or benefits to the
American public. 31 C.F.R. § 205.2. The most recently updated print
edition and the frequently updated online version can both be accessed
through the Catalog's Web site at www.cfda.gov (last visited Feb. 4,
2009). In addition, OMB, on December 13, 2007, rolled out a new
publicly accessible Web site that provides information on all major
federal grants, loans, and contracts. See www.USASpending.gov (last
visited Feb. 4, 2009). This Web site is in response to 2006
legislation to improve the accessibility of federal spending data,
Federal Funding Accountability and Transparency Act of 2006, Pub. L.
No. 109-282, 120 Stat. 1186 (Sept. 26, 2006), 31 U.S.C. § 6101 note.
B. Grants versus Procurement Contracts:
2. The Federal Grant and Cooperative Agreement Act:
Page 10-16 - Insert the following after the first full paragraph:
An example of a statutory scheme for oversight of a grant program can
be found in the Help America Vote Act of 2002 (HAVA), which authorizes
various federal agencies to make grants or provide payments of federal
funds to the states and various other entities for purposes related to
election reform. Pub. L. No. 107-252, 116 Stat. 1666 (Oct. 29, 2002).
Section 902 of HAVA authorizes each agency making a grant or payment
to audit any recipient of the funds, and also provides that if the
Comptroller General makes a determination as a result of an audit that
a fund recipient did not comply with program requirements or received
an excess payment, the recipient must return a certain portion of the
payment. In B-306475, Jan. 30, 2006, GAO concluded that the provision
regarding GAO audits does not supersede the independent statutory
authority of agencies to audit and take corrective action on the use
of federal funds, so GAO need not make its section 902 determination
before a paying agency may audit and take corrective action on
questioned costs. If the Comptroller General were to make a
determination under HAVA as a result of any audit he conducts, he will
make an appropriate recommendation for the agency to determine
liability and take corrective action. Id.
C. Some Basic Concepts:
2. Availability of Appropriations:
Page 10-39 - Replace the second full paragraph with the following:
Funds must be obligated by the grantor agency within their period of
availability.[Footnote 31] The period of availability of appropriated
funds is the period of time provided by law in which the administering
agency has to obligate the funds. B-271607, June 3, 1996. The
statutory requirement for recording obligations extends to all actions
necessary to constitute a valid obligation, and includes, of course,
grant obligations (31 U.S.C. § 1501(a)(5)).32 Proper recording of
grant obligations facilitates compliance with the "time of obligation"
requirement by ensuring that agencies have adequate budget authority
to cover their obligations. See B-316372, Oct. 21, 2008; B-300480,
Apr. 9, 2003, aff'd in B-300480.2, June 6, 2003.
Page 10-43 - Replace the first full paragraph with the following:
Appropriations for grant programs are generally subject to the same
time availability rules as other appropriations. Adherence to the
existing framework for grantmaking, as laid out in the statute and
implementing regulations, provides structure and consistency, which in
turn promotes the goals of proper administration and accounting, as
well as fairness to all grant applicants. For example, in one case,
despite apparent statutory and regulatory limitations on grants to
certain colleges and graduate institutions, the Education Department
had granted 4-year "extensions" to the original 5-year grants awarded
to those institutions. GAO concluded that Education should strictly
adhere to the statutory and regulatory duration restrictions for grant
periods and terminate grants improperly extended. If, at that time,
Education determined that additional assistance was warranted, the
department could award a new grant to that institution or, in the
alternative, seek legislative changes that would allow for extensions
to 5-year grants. B-303845, Jan. 3, 2006.
Also, when Congress expressly provides that a grant appropriation
"shall remain available until expended" (no-year appropriation), the
funds remain available until they are obligated and expended by the
grantor agency subject to the account closing statute, 31 U.S.C. §
1555. It should be emphasized that the time availability of grant
appropriations governs the grantor agency's obligation and expenditure
of the funds; it does not limit the time in which the grantee must use
the funds once it has received them. B-289801, Dec. 30, 2002. Of
course, the grant statute or the grantor agency may impose time limits
on a grantee's use of funds. See City of New York v. Shalala, 34 F.3d
1161 (2nd Cir. 1994); Mayor and City Council of Baltimore v. Browner,
866 E Supp. 249 (D. Md. 1994).
F. Obligation of Appropriations for Grants:
1. Requirement for Obligation:
Page 10-107 - Replace the first paragraph, after the quoted language
with the following:
Briefly stated, the "obligational event" for a grant generally occurs
at the time of grant award. Therefore, this is when the grantor agency
must record an obligation under 31 U.S.C. § 1501(a)(5), not when the
grantee draws down the funds or when the grantee incurs its own
obligations. See B-316372, Oct. 21, 2008; B-300480, Apr. 9, 2003,
aff'd, B-300480.2, June 6, 2003.
[End of section]
[End of Volume 2]
Volume 3:
Chapter 12: Acquisition of Goods and Services:
Chapter 13: Real Property (no updates this year):
Chapter 14: Claims against and by the Government (no updates this
year):
Chapter 15: Miscellaneous Topics:
Chapter 12: Acquisition of Goods and Services:
D. User Charges:
3. The Independent Offices Appropriation Act:
Page 12-152 - Replace the first full paragraph, with the following:
Some courts have held that in order to assess fees under the
Independent Offices Appropriation Act (IOAA), an agency must first
issue regulations. See, e.g., Sohio Transportation Co. v. United
States, 766 F.2d 499, 502 (Fed. Cir. 1985); Alyeska Pipeline Service
Co. v. United States, 624 F.2d 1005, 1009 (Ct. Cl. 1980); Alaskan
Arctic Gas Pipeline Co. v. United States, 9 Cl. Ct. 723, 732-33
(1986), aff'd, 831 F.2d 1043 (Fed. Cir. 1987) (issuance of regulations
a "condition precedent"). See also B-316796, Sept. 30, 2008, at 14-15
(since FAA's implementation of a proposed auction of airport arrival
and departure slots would amount to a new user fee under IOAA,
"implementation of the auction would require a new regulation"). A
simple policy statement to the effect that fees will be charged for
special services has been held too vague to support fee assessment.
Diapulse Corp. of America v. FDA, 500 F.2d 75, 79 (2nd Cir. 1974).
Rather, since rulemaking under the Administrative Procedure Act
generally must provide the opportunity for public comment, 5 U.S.C. §
553, the agency's notice must include, or make available on request, a
reasonable explanation of the basis for the proposed fee. This, one
court has held, must be one that "the concerned public could
understand." Engine Manufacturers Association v. EPA, 20 F.3d 1177,
1181 (D.C. Cir. 1994). In that case, the court rejected as inadequate
an agency cost analysis which, according to the court, "contains page
after page of impressive looking but utterly useless tables" and some
"complete gibberish." Id.
It is probably impossible to predict what would be acceptable to any
given court at any given time, but cases like this demonstrate the
need for the agency to observe at least some minimal level of clarity
and provide its explanation "in intelligible if not plain English."
Id. at 1183. The Court of Appeals for the District of Columbia Circuit
has also stressed the need for the agency to make a clear public
statement of the basis for its fees so that a reviewing court can
measure the agency's action against the Supreme Court's standards.
National Cable Television Association v. FCC, 554 F.2d 1094, 1100,
1104-05 (D.C. Cir. 1976).
4. Other Authorities:
Page 12-170 - Insert the following before the last partial paragraph:
Similarly, since fiscal year 1998 Congress has included an
appropriations act restriction expressly prohibiting the Federal
Aviation Administration (FAA) from imposing any "new aviation user
fees" without specific statutory authority. The 2008 fiscal year
prohibition stated: "[N]one of the funds in this [Appropriations] Act
shall be available for the Federal Aviation Administration to finalize
or implement any regulation that would promulgate new aviation user
fees not specifically authorized by law after the date of the
enactment of this Act." Pub. L. No. 110-161, 121 Stat. 1844, 2379
(2007). While this provision does not explicitly reference the IOAA,
GAO has concluded that the provision would preclude FAA's use of IOAA
as authority to auction airport arrival and departure slots because
such auctions would amount to a "new aviation user fee" not
specifically authorized by law. B-316796, Sept. 30, 2008.
[End of section]
Chapter 15: Miscellaneous Topics:
A. Boards, Committees, and Commissions:
4. The Federal Advisory Committee Act:
Page 15-32 - Insert the following before the first full paragraph:
Similarly, the United States Postal Service (USPS) has considered
itself exempt from FACA even though USPS was not expressly exempted in
either FACA or its own authorizing legislation. The Postal
Reorganization Act, 39 U.S.C. § 410, does grant USPS a broad exemption
from many similar procedural laws, and Congress has never specifically
made FACA applicable to USPS despite enacting multiple amendments to
section 410 over the years to explicitly subject USPS to other
procedural acts. The District of Columbia District Court agreed with
USPS and determined that FACA does not apply to the USPS Mailer's
Technical Advisory Committee. American Postal Workers Union v. United
States Postal Service, 541 F. Supp. 2d 95 (D.D.C. 2008).
[End of section]
[End of Volume 3]