Transfer of funds originally allocated for the United Nations Population Fund, B-290659, October 31, 2002

B-290659: Oct 31, 2002

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The Honorable Barbara Boxer United States Senate Dear Senator Boxer: This further responds to your request for information concerning the funds that the Department of State was authorized to make available for the United Nations Population Fund (UNFPA) in the Foreign Operations Appropriations Act. We concluded that since the State Department delayed obligating the funds because of uncertainty as to whether statutory conditions were met. The purpose of this letter is to report what we have learned in following up on this issue. We have no objection to the methodology the State Department used to meet the 10% limitation in the transfer statute or the State Department's view that the fiscal year IO&P funds became no-year money upon transfer to the Child Survival and Health Programs Fund.

Transfer of funds originally allocated for the United Nations Population Fund, B-290659, October 31, 2002

The Honorable Barbara Boxer United States Senate

Dear Senator Boxer:

This further responds to your request for information concerning the funds that the Department of State was authorized to make available for the United Nations Population Fund (UNFPA) in the Foreign Operations Appropriations Act, Fiscal Year 2002, Pub. L. No. 107-115, Sec. 576, 115 Stat. 2138 (January 10, 2002) (FY2002 Foreign Operations Appropriations Act). In a statement issued July 22, 2002, the State Department reported that it had decided not to fund UNFPA for program-related reasons. In our last letter to you on July 24, 2002, we concluded that since the State Department delayed obligating the funds because of uncertainty as to whether statutory conditions were met, the delay did not constitute an impoundment. We noted, however, that State Department must release the funds with sufficient time remaining in the fiscal year to obligate them and stated that we would continue to monitor the use of these funds.

In this regard, we learned that the State Department formally notified Congress via correspondence dated August 28, 2002, that the President intended to exercise his authority pursuant to section 610 of the Foreign Assistance of 1961, Pub. L. No. 87-195, 75 Stat. 424 (September 4, 1961), to transfer the $34,000,000 in fiscal year 2002 International Organizations and Programs (IO&P) funds, originally available for the UNFPA, to the Child Survival and Health Programs Fund. The purpose of this letter is to report what we have learned in following up on this issue.

The congressional notification offered little explanation of the applicability of section 610 to the transfer of the IO&P funds. After reviewing the letter and attachments, we sent a letter to the State Department requesting more information about the reported transfer. Letter to William H. Taft, IV, Esq., Legal Adviser, State Department, from Anthony Gamboa, General Counsel, General Accounting Office, September 20, 2002.

In particular, we noted the requirement in the transfer authority that the transferred funds not exceed 10% of the amount available for the transferring appropriation and inquired about the possibility of the fiscal year 2002 funds expiring before the end of the fiscal year. The State Department responded on September 25, 2002, and provided a more detailed analysis of the transfer authority invoked in this circumstance. Letter to Anthony Gamboa, General Counsel, GAO, from William H. Taft, IV, Esq., Legal Adviser, State Department, September 25, 2002. After reviewing State Department's response, we have no objection to the methodology the State Department used to meet the 10% limitation in the transfer statute or the State Department's view that the fiscal year IO&P funds became no-year money upon transfer to the Child Survival and Health Programs Fund.

Transfer authority calculation

Section 610 of the Foreign Assistance Act of 1961, contained in 22 U.S.C. Sec. 2360(a), provides in relevant part as follows:

"Whenever the President determines it to be necessary for the purposes of this [Foreign Assistance] Act, not to exceed 10 per centum of the funds made available for any provision of this Act . . . may be transferred to, and consolidated with, the funds made available for any provision of this Act . . . and may be used for any of the purposes for which such funds may be used except that the total in the provision for the benefit of which the transfer is made shall not be increased by more than 20 per centum of the amount of funds made available for such provision."

In its September 25 letter, the State Department explained that the calculation of the maximum amount that may be transferred is determined by aggregating the funds that are made available for a particular provision of the Foreign Assistance Act, and not necessarily on an appropriation account basis. In this case that provision would be section 301 of the Foreign Assistance Act, which is supported by two appropriation accounts: the IO&P account and a portion of the Nonproliferation, Anti-terrorism, Demining and Related Programs (NADR) account. When the amounts allocated for fiscal year 2002 from the NADR account to carry out the purposes of section 301 are aggregated with the lump sum IO&P appropriation, the base against which the 10% limit is measured totals $369,000,000, 10% of which is $36,900,000. Therefore, the $34,000,000 to be transferred is within the statutory limit. We have no legal objection to this analysis.

Expiration of the transferred funds

With regard to the fact that the $34,000,000 being transferred is one-year money, the State Department notes that under the transfer authority in section 610 the funds are both "transferred to and consolidated with" the recipient account funds. The State Department provided a copy of an internal Agency for International Development General Counsel memorandum dated June 30, 1969, which indicates that the longstanding interpretation of this authority is that, since the funds are consolidated, the transferred funds may be used for the purposes and for the same time period as the fund or appropriation to which transferred. The plain meaning of the word "consolidate," "to join together into one whole; unite; merge," /1/ supports the view that the transferred funds are meant to be used in the same manner as the funds into which they are being merged. According to the State Department, this has been the case over the years whenever the transfer authority has been invoked and so reported to Congress. As a result, the State Department contends that upon transfer the IO&P funds become subject to the authorization and appropriations provisions applicable to the Child Survival and Health Programs Fund, and so the one-year money takes on the characteristics of that Fund, which remain available until expended. Accordingly, the $34,000,000 did not need to be obligated by the end of fiscal year 2002. We have no legal objection to this interpretation of the transfer authority in section 610.

If you have any questions, please contact Susan Poling, Managing Associate General Counsel, or Thomas Armstrong, Assistant General Counsel, at 202-512-5644. We are sending copies of this letter to the Secretary of State and interested congressional committees. The letter will also be available on GAO's home page at http://www.gao.gov.

Sincerely yours,

/signed/

Anthony H. Gamboa
General Counsel

cc: The Honorable Colin Powell, Secretary of State

DIGEST

The State Department announced the President's intention to exercise his authority pursuant to section 610 of the Foreign Assistance Act of 1961 to transfer $34,000,000 in fiscal year 2002 International Organizations and Programs funds originally available for the United Nations Population Fund to the Child Survival and Health Programs Fund, a no-year account. At our request, State provided a more detailed analysis of the applicability of section 610 to this transfer. After reviewing State's response, we have no objection to the methodology State used to meet the 10% limitation in the transfer statute or the State Department's view that the fiscal year IO&P funds became no-year money upon transfer to the Child Survival and Health Programs Fund.

1. Merriam-Webster's Collegiate Dictionary 247 (10th ed. 1997).

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