Use of Oil Spill Liability Trust Fund for Administrative Costs of Processing Oil Pollution Act Claims

The Oil Pollution Act established a no-year appropriation for payment from the Trust Fund of uncompensated claims for damages and removal costs arising from oil spills. It also authorized annual appropriations, not to exceed $25 million per year, to be derived from the Trust Fund, for payment of the Coast Guard's "operating expenses" under the Act. Congress appropriates funds annually out of the Trust Fund for use as part of the Coast Guard operating expenses appropriation. Nevertheless, since 1998, the Coast Guard has used the Act's no-year appropriation to pay not only the uncompensated claims, but also its costs of processing those claims, including the salaries of adjudicators and the other administrative expenses associated with payment of the claims. GAO found that the no-year appropriation is not available to pay the salaries of adjudicators and the other administrative expenses associated with payment of uncompensated claims for damages and removal costs arising from oil spills. Accordingly, the Coast Guard must adjust its records to charge the expenses at issue to the correct accounts.