Propriety of DOE Use of FY 1981 Appropriations To Make Severance Payments Extending Into FY 1982

In response to a congressional request, GAO gave its opinion on the validity of a recent Department of Energy (DOE) contention that DOE, with the concurrence of the Office of Management and Budget, could use fiscal year (FY) 1981 appropriations to make severance payments extending into FY 1982 to employees who would be involved in a reduction in force (RIF) expected to be implemented in FY 1981. Appropriations to agencies are for necessary expenses incurred in carrying out the activities of the given agency. Any costs associated with a RIF would also be a necessary expense of the agency to be funded from the agency's appropriations. Therefore, severance pay for periods during 1981 would be obligated from FY 1981 appropriations as each payment is made. Payments extending into FY 1982 would obviously have to be obligated from the agency's FY 1982 appropriations as these expenses would be properly incurred during that year. Accordingly, GAO believed that DOE could not use FY 1981 appropriations to make severance payments extending into FY 1982 without the express authority of Congress.