B-206668 L/M, MAR 15, 1982

B-206668 L/M, MAR 15, 1982

PRECIS-UNAVAILABLE

LOWELL P. WEICKER, JR.,

UNITED STATES SENATE:

THIS IS IN REPLY TO YOUR INQUIRY OF FEBRUARY 26, 1982, CONCERNING THE LEGALITY OF ACTIONS BY THE DEPARTMENT OF COMMERCE IN OBLIGATING FUNDS UNDER ITS FISCAL YEAR (FY) 1982 GENERAL ADMINISTRATION APPROPRIATION AT A LEVEL APPARENTLY HIGHER THAN THAT APPROVED BY THE CONGRESS.

IN PREPARING OUR RESPONSE WE HAVE EXAMINED THE STATUTE AND BILL WHICH ESTABLISH FY 1982 FUNDING LEVELS FOR COMMERCE, THE RELATED LEGISLATIVE HISTORIES, AND THE MATERIALS PROVIDED WITH YOUR LETTER. WE WERE UNABLE TO OBTAIN FORMAL COMMENTS FROM COMMERCE BECAUSE OF THE LIMITED TIME AVAILABLE FOR OUR RESPONSE. WE DID, HOWEVER, RECEIVE INFORMALLY FROM COMMERCE SOME EXPLANATORY MATERIALS AND A COPY OF A NOVEMBER 25, 1981, MEMORANDUM PREPARED BY ITS DEPUTY GENERAL COUNSEL, ENTITLED "REPROGRAMMING OF APPROPRIATED FUNDS."

ON THE BASIS OF OUR ANALYSIS OF THESE MATERIALS WE CONCLUDE THAT THE BUDGETARY ACTIONS TAKEN BY COMMERCE CONSTITUTE ILLEGAL TRANSFERS OF FUNDS FROM APPROPRIATIONS FOR ITS BUREAUS AND OFFICES TO ITS GENERAL ADMINISTRATION APPROPRIATION. THESE ACTIONS ALSO CONSTITUTE IMPROPER AUGMENTATIONS OF THE GENERAL ADMINISTRATION APPROPRIATION. THESE CONCLUSIONS ARE DISCUSSED IN DETAIL BELOW.

BACKGROUND

APPROPRIATIONS FOR COMMERCE FOR FY 1982 ARE CURRENTLY CONTAINED IN SECTION 101(H) OF PUB.L. NO. 97-92, 95 STAT. 1183, DECEMBER 15, 1981, THE JOINT RESOLUTION MAKING FURTHER CONTINUING APPROPRIATIONS FOR FY 1982. SECTION 101(H) MAKES AVAILABLE TO COMMERCE:

"*** SUCH AMOUNTS AS MAY BE NECESSARY FOR PROJECTS OR ACTIVITIES PROVIDED FOR IN THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY AND RELATED AGENCIES APPROPRIATION ACT, 1982, AT THE RATE PROVIDED IN H.R. 4169 AS PASSED THE HOUSE OF REPRESENTATIVES ON SEPTEMBER 9, 1982, AND UNDER THE AUTHORITY AND CONDITIONS PROVIDED IN THE APPLICABLE APPROPRIATION ACT FOR FISCAL YEAR 1981, ***"

TITLE I OF H.R. 4169, AS IT PASSED THE HOUSE, PROVIDES COMMERCE WITH $28,407,000 FOR GENERAL ADMINISTRATION. (ALTHOUGH IT HAS NOT PASSED THE SENATE, H.R. 4169 AS REPORTED BY THE SENATE APPROPRIATIONS COMMITTEE PROVIDES THE SAME LEVEL OF GENERAL ADMINISTRATION FUNDING.) THE PROVISION IS A LUMP SUM FOR "EXPENSES NECESSARY FOR THE GENERAL ADMINISTRATION OF THE DEPARTMENT OF COMMERCE, INCLUDING NOT TO EXCEED $2,000 FOR OFFICIAL ENTERTAINMENT."

THESE FUNDS ARE APPROPRIATED FOR THE OPERATION OF THE OFFICE OF THE SECRETARY AND FOR DEPARTMENT-WIDE FUNCTIONS. AS SET FORTH IN THE APPENDIX TO THE BUDGET OF THE UNITED STATES FOR FY 1982, THESE EXPENSES INCLUDE THE EXECUTIVE DIRECTION OF COMMERCE ("FORMULATION OF GOVERNMENT POLICY ON MATTERS AFFECTING PROGRAMS AND FUNCTIONS ASSIGNED TO THE DEPARTMENT, AND EXECUTIVE DIRECTION OF THE DEPARTMENT"); DEPARTMENTAL STAFF SERVICES (GENERAL MANAGEMENT AND ADMINISTRATION OF THE DEPARTMENT IN BUDGET AND PROGRAM EVALUATION, CIVIL RIGHTS, PERSONNEL, AND POLICY DEVELOPMENT, AMONG OTHERS); AND A REIMBURSABLE PROGRAM FOR CERTAIN CENTRALIZED SERVICES BILLED TO USERS (COMMUNICATIONS, RENT, PRINTING AND REPRODUCTION, ETC). THE SAME CATEGORIES OF EXPENSES ARE ENUMERATED IN THE FY 1983 BUDGET FOR GENERAL ADMINISTRATION, WHICH IS EVIDENCE THAT COMMERCE DID NOT INTEND A MAJOR REALIGNMENT OF ITS STAFF ALLOCATIONS IN EITHER FISCAL YEAR.

ANOTHER EXPRESSION OF THE INTENDED PURPOSE OF THE GENERAL ADMINISTRATION APPROPRIATION IS SEEN IN THE HOUSE REPORT ACCOMPANYING H.R. 4169, WHICH STATES:

"THE BILL INCLUDES $28,407,000 FOR 'SALARIES AND EXPENSES' TO PROVIDE FOR THE OFFICE OF THE SECRETARY AND ASSISTANT SECRETARIES AND THE STAFF OFFICES WHICH ASSIST IN THE FORMULATION OF POLICY, GENERAL MANAGEMENT, AND ADMINISTRATION OF THE DEPARTMENT OF COMMERCE." H.REPT. NO. 97-180, 97TH CONG., 1ST SESS. 8 (1981).

WE HAVE RULED THAT STATEMENTS IN THE BUDGET AND IN COMMITTEE REPORTS ARE NOT LEGALLY BINDING ON THE AUTHORITY OF AN AGENCY TO ALLOCATE LUMP SUM APPROPRIATIONS. 55 COMP.GEN. 307 (1975). HOWEVER, SUCH EXPRESSIONS ARE BINDING TO THE EXTENT THAT THEY INDICATE THE PURPOSES FOR WHICH A LUMP SUM APPROPRIATION IS AVAILABLE. OMMITTEE REPORT INDICATE PRECISELY WHAT CONGRESS MEANT BY "EXPENSES NECESSARY FOR THE GENERAL ADMINISTRATION OF THE DEPARTMENT OF COMMERCE."

IN ADDITION TO THE GENERAL ADMINISTRATION APPROPRIATION, THE CONGRESS ALSO MAKES OTHER APPROPRIATIONS FOR COMMERCE. EACH OF THE BUREAUS OR OFFICES IN THE DEPARTMENT RECEIVES AN APPROPRIATION EITHER FOR ITS SALARIES AND EXPENSES OR FOR THE NECESSARY EXPENSES OF ADMINISTERING ITS PROGRAMS. IN THE ABSENCE OF THE GENERAL ADMINISTRATION APPROPRIATION THESE INDIVIDUAL BUREAU OR OFFICE APPROPRIATIONS WOULD PROBABLY BE AVAILABLE FOR THE BUREAU OR OFFICE PRO RATA SHARE OF DEPARTMENT-WIDE EXPENSES. HOWEVER, AS WE HAVE INDICATED, THE GENERAL ADMINISTRATION APPROPRIATIONS IS SPECIFICALLY AVAILABLE FOR SUCH EXPENSES AS THE COSTS OF THE OFFICES OF THE ASSISTANT SECRETARIES, PERSONNEL POLICY AND SERVICES, AND THE OFFICE OF SECRETARY SHARE OF DEPARTMENT-WIDE REIMBURSABLES, AND HISTORICALLY HAS BEEN CHARGED WITH ALL OF THESE EXPENSES.

THE FUNDS APPROPRIATED FOR GENERAL ADMINISTRATION FOR FY 1982 REPRESENT A SUBSTANTIAL REDUCTION OF APPROXIMATELY $5.6 MILLION FROM FUNDS AVAILABLE FOR OBLIGATION FOR FY 1981. SUCH A SIZEABLE REDUCTION IN APPROPRIATIONS WOULD APPEAR TO REQUIRE A PARALLEL REDUCTION IN EMPLOYEES AND SERVICES FROM THEIR FY 1981 LEVELS. IN FACT, IN MATERIALS PROVIDED BY YOUR STAFF, COMMERCE HAS STATED THAT SOME DRASTIC PERSONNEL CUTS WOULD BE NECESSITATED BY THE FUNDING REDUCTION, INCLUDING "AT LEAST HALF OF THE MANAGEMENT STAFF" AND "AT LEAST 38 PERCENT OF THE INSPECTOR GENERAL" STAFF.

DESPITE THESE REPRESENTATIONS, THESE DRACONIAN MEASURES HAVE NOT BEEN UNDERTAKEN, AND COMMERCE HAS INSTEAD IMPLEMENTED A PLAN UNDER WHICH IT CONTINUES TO OPERATE THE ACTIVITIES OF THE OFFICE OF THE SECRETARY AT THE LEVEL REQUESTED BY THE ADMINISTRATION RATHER THAN AT THE LEVEL APPROVED BY CONGRESS IN PUB.L. NO. 97-92 (I.E., WITHOUT ABSORBING THE $5.6 MILLION REDUCTION). FROM MATERIALS PROVIDED BY COMMERCE, IT IS CLEAR THAT THIS HAS BEEN ACCOMPLISHED BY TRANSFERRING THE COSTS OF CERTAIN GENERAL ADMINISTRATION FUNCTIONS TO THE APPROPRIATIONS OF INDIVIDUAL BUREAUS WITHIN COMMERCE.

AS DESCRIBED BY COMMERCE, THE FOLLOWING STEPS HAVE BEEN TAKEN:

"PENDING COMPLETION OF THE 1982 BUDGET PROCESS AND AFTER CONSULTATION WITH OUR GENERAL COUNSEL, THE BUREAUS WERE REQUESTED TO PAY FOR SERVICES WHICH HERETOFORE WERE FUNDED BY THE OFFICE OF THE SECRETARY. THESE SERVICES AND THE BASIS FOR THEIR ALLOCATION WERE:

"A. THE COSTS OF ASSISTANT SECRETARIES AND THEIR IMMEDIATE STAFFS $1,200,000

THE BUREAUS ARE BEING CHARGED ON THE BASIS OF ACTUAL 1982 COSTS.

"B. THE OFFICE OF PERSONNEL POLICY $1,300,000 THIS OFFICE PROVIDES DEPARTMENT-WIDE INTERPRETATION AND AND POLICIES ON SUCH MATTERS AS POSITION CLASSIFICATION AND STANDARDS, AND IMPLEMENTATION OF CIVIL SERVICE REFORM.

THE CHARGES WERE ALLOCATED ON THE BASIS OF FULL TIME EQUIVALENCY OF EACH ORGANIZATION SERVED.

"C. SPECIAL PROJECTS $ 700,000

THERE ARE A NUMBER OF PROJECTS WHICH BENEFIT THE COMPONENT ORGANIZATIONS. THE BILLINGS ARE BASED UPON OUR BEST ESTIMATE OF THE BENEFITS TO BE DERIVED BY EACH OF THE DEPARTMENT'S ORGANIZATIONS. NORMALLY, THE OFFICE OF THE SECRETARY CONTRIBUTES TO THE COST OF THESE PROJECTS. BECAUSE OF THE REDUCTIONS IN THE APPROPRIATION AND BECAUSE THESE PROJECTS ARE CONSIDERED IMPORTANT ENOUGH TO CONTINUE, THE BUREAUS' SHARE OF THE COSTS WERE INCREASED.

"REIMBURSABLE AGREEMENTS HAVE BEEN PREPARED WITH EACH BUREAU ON ALL OF THE ABOVE ACTIVITIES. *** THE BUREAUS WILL BE BILLED ONLY FOR THE ACTUAL COSTS OF THE SERVICES RECEIVED.

UPON ENACTMENT OF THE SUPPLEMENTALS, THE BUREAUS WILL BE PAID BACK FOR MOST OF THE COSTS THEY HAVE INCURRED."

IT IS CLEAR FROM THIS DOCUMENT THAT COSTS FORMERLY PAID BY THE OFFICE OF THE SECRETARY HAVE BEEN BILLED TO THE BUREAUS, AND THAT THEY IN TURN ARE COMMITTED TO PROVIDING REIMBURSEMENT TO THE OFFICE OF THE SECRETARY.

DISCUSSION OF THE APPLICABLE LAW

IN HIS NOVEMBER 25, 1981, MEMORANDUM, THE DEPUTY GENERAL COUNSEL OF COMMERCE CORRECTLY CITED THE TWO STATUTORY PROVISIONS THAT COMPEL THE CONCLUSION WE HAVE REACHED IN THIS MATTER. WE AGREE THAT, "A BASIC TENET OF THE LAW GOVERNING APPROPRIATIONS IS THE REQUIREMENT THAT APPROPRIATIONS MUST BE EXPENDED FOR THE PURPOSES AND OBJECTS FOR WHICH THEY WERE APPROPRIATED." SEE 31 U.S.C. SEC. 628. WE ALSO AGREE THAT "FUNDS MAY NOT BE TRANSFERRED BETWEEN THESE LUMP SUM APPROPRIATIONS, EXCEPT BY SPECIFIC LEGISLATION." SEE 31 U.S.C. SEC. 628-1. OUR VIEWS DIVERGE HOWEVER, ON THE CORRECT APPLICATION OF THESE PRINCIPLES TO THE FACTS OF THIS CASE.

THE DEPUTY GENERAL COUNSEL, IN HIS ANALYSIS, APPEARS TO CONSIDER THE COST REALLOCATIONS DESCRIBED ABOVE AS MERE TECHNICAL BILLING ADJUSTMENTS OF NO LEGAL SIGNIFICANCE, WHICH DO NOT INVOLVE A TRANSFER OF FUNDS BETWEEN THE GENERAL ADMINISTRATION APPROPRIATION AND THE BUREAU APPROPRIATIONS. DOES CORRECTLY OBSERVE THAT NO REPROGRAMMING HAS OCCURRED, SINCE THAT TERM APPLIES ONLY TO TRANSFERS OF FUNDS BETWEEN AUTHORIZED ACTIVITIES WITHIN A LUMP SUM APPROPRIATION, WHICH IS NOT THE CASE HERE. HOWEVER, HE APPARENTLY FAILS TO APPRECIATE THAT THESE COST ADJUSTMENTS WILL RESULT IN A TRANSFER OF FUNDS BETWEEN TWO DISTINCT LUMP SUM APPROPRIATIONS.

IN ESSENCE, BY USING FORMAL REIMBURSEMENT AGREEMENTS TO CHARGE A BUREAU ACCOUNT FOR SALARIES AND EXPENSES FORMERLY CHARGED TO THE GENERAL ADMINISTRATION ACCOUNT, COMMERCE HAS EFFECTED A TRANSFER OF FUNDS FROM THE BUREAU APPROPRIATION TO THE GENERAL ADMINISTRATION ACCOUNT. UNDER 31 U.S.C. SEC. 628-1, SUCH A TRANSFER IS PERMISSIBLE ONLY WHEN AUTHORIZED BY STATUTE.

WE REALIZE THAT THE SO-CALLED ECONOMY ACT, 31 U.S.C. SEC. 686, AUTHORIZES TRANSFERS OF FUNDS BETWEEN APPROPRIATIONS AS REIMBURSEMENT FOR SERVICES PERFORMED BY ONE AGENCY, OR ORGANIZATIONAL ELEMENT OF AN AGENCY, FOR ANOTHER. HOWEVER, THE ECONOMY ACT IS APPLICABLE ONLY WHEN THERE IS NO OTHER STATUTE WHICH SPECIFICALLY APPROPRIATES MONEY FOR THE PROVIDER AGENCY TO RENDER THE SERVICE IN QUESTION TO THE REQUESTING AGENCY. SEE 59 COMP.GEN. 415, 416 (1980). IN THIS CASE, AS WE HAVE INDICATED, GENERAL ADMINISTRATION FUNDS ARE SPECIFICALLY AVAILABLE FOR THE PROVISIONS OF ALL THOSE SERVICES IT HISTORICALLY HAS PROVIDED, AND STILL IS PROVIDING, TO THE BUREAUS. THUS, THE ECONOMY ACT MAY NOT BE USED AS AUTHORITY FOR THE TRANSFERS COMMERCE IS IMPLEMENTING. FURTHER, BECAUSE WE ARE UNAWARE OF ANY OTHER STATUTORY THAT COMMERCE HAS TO EFFECTUATE TRANSFERS BETWEEN APPROPRIATIONS, WE MUST CONCLUDE THAT THE COMMERCE ACTIONS VIOLATE 31 U.S.C. SEC. 628-1 AND ARE THUS UNLAWFUL.

IN ADDITION, THIS OFFICE HAS LONG HELD THAT AN APPROPRIATION FOR A SPECIFIC PURPOSE IS AVAILABLE FOR THAT PURPOSE TO THE EXCLUSION OF ANY APPROPRIATION WHICH MIGHT OTHERWISE BE AVAILABLE FOR THE SAME OR A COMPATIBLE PURPOSE. E.G., 36 COMP.GEN. 526, 528 (1957); 19 COMP.GEN. 324, 326 (1939); 10 COMP.GEN. 440, 442 (1931). THUS, ONCE THE SPECIFIC APPROPRIATION FOR A PURPOSE IS EXHAUSTED, NO OTHER APPROPRIATION MAY BE USED FOR THAT PURPOSE. 36 COMP.GEN., SUPRA; 10 COMP.GEN., SUPRA. IN OUR OPINION, THE EXISTENCE OF THE GENERAL ADMINISTRATION APPROPRIATION, SPECIFICALLY AVAILABLE FOR DEPARTMENT WIDE ADMINISTRATIVE FUNCTIONS, PRECLUDES THE REALLOCATION OF THESE EXPENSES TO THE APPROPRIATIONS OF THE BUREAUS WHICH MIGHT OTHERWISE BE AVAILABLE FOR THESE PURPOSES. IF FY 1982 FUNDS FOR GENERAL ADMINISTRATION ARE, IN FACT, INSUFFICIENT, COMMERCE MAY NOT DIP INTO BUREAU APPROPRIATIONS TO MAKE UP THE DIFFERENCE. BY DOING SO, COMMERCE IS IMPROPERLY AUGMENTING THE APPROPRIATIONS PROVIDED BY CONGRESS FOR GENERAL ADMINISTRATION FUNCTIONS OF THE DEPARTMENT.

IN YOUR INQUIRY YOU ALSO ASKED US TO DETERMINE WHETHER THESE RECENT BUDGET ACTIONS BY COMMERCE ARE IN VIOLATION OF THE ANTIDEFICIENCY ACT, 31 U.S.C. SEC. 665. THAT ACT PROHIBITS ANY FEDERAL OFFICER OR EMPLOYEE FROM AUTHORIZING THE OBLIGATION OR EXPENDITURE OF FUNDS IN EXCESS OF THE AMOUNT OF APPROPRIATIONS AVAILABLE.

WE DO NOT HAVE SUFFICIENT INFORMATION ABOUT THE FUNDS CURRENTLY AVAILABLE TO COMMERCE TO DETERMINE WHETHER SUCH VIOLATIONS MAY HAVE OCCURRED, AND, THEREFORE, WE DO NOT WISH TO SPECULATE ON A MATTER OF THIS SERIOUSNESS. HOWEVER, IF BY THE END OF THE FISCAL YEAR COMMERCE HAS NOT REDUCED ITS GENERAL ADMINISTRATION EXPENSES, AND IF NO SUPPLEMENTAL APPROPRIATIONS HAVE BEEN ENACTED, IT SEEMS CERTAIN THAT AN ANTIDEFICIENCY ACT VIOLATION WILL HAVE OCCURRED. WE ARE AWARE THAT BY THE TRANSFER ACTIONS DISCUSSED ABOVE COMMERCE HOPED TO AVOID OR MINIMIZE THE NEED TO IMPOSE REDUCTIONS IN FORCE OR FURLOUGHS ON THE EMPLOYEES COMPENSATED UNDER THE GENERAL ADMINISTRATION APPROPRIATION. HOWEVER, BY FORCING THE BUREAUS AND OFFICES TO TAKE ON SUBSTANTIAL EXPENSES FOR WHICH THEY HAD NOT BUDGETED, THE COMMERCE ACTION MAY REQUIRE THE BUREAUS TO REDUCE THEIR OWN EXPENDITURES THROUGH EXTENSIVE STAFF REDUCTIONS.

WE TRUST THAT THIS INFORMATION WILL BE HELPFUL TO YOU.