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November 21, 2003:

The Honorable Christopher S. Bond:

Chairman:

The Honorable Barbara A. Mikulski:

Ranking Minority Member:

Subcommittee on Veteran Affairs, HUD and Independent Agencies:

Committee on Appropriations:

United States Senate:

Subject: Financial Management: Information on the Mandated Transfer of 
HUD's Appropriation Law Function to the Chief Financial Officer:

The Departments of Veterans Affairs and Housing and Urban Development 
(HUD), and Independent Agencies Appropriations Act, 2003 (the 
Appropriation Act)[Footnote 1] gave HUD's Chief Financial Officer 
(CFO), in consultation with the HUD Budget Officer, the "sole 
authority" to investigate potential or actual violations under the 
Anti-Deficiency Act[Footnote 2] and all other statutes and regulations 
related to the obligation and expenditure of funds made available in 
any act. Further, the Appropriations Act provided that the CFO shall 
determine whether violations occurred and submit the final reports 
required by law. Finally, the Appropriation Act required the Secretary 
of HUD to transfer no fewer than four appropriation law attorneys from 
its Office of General Counsel (OGC) to its Office of Chief Financial 
Officer (OCFO).

These provisions and HUD's actions to implement the Appropriation Act's 
requirements raised a number of potential implementation issues and led 
to your request that we review and provide information on the impact 
that these provisions have had at HUD. Specifically, you asked for 
information pertaining to the following five questions, which we have 
provided in a question and answer format in this report. As discussed 
with your staff, the responses to these questions are primarily based 
on information obtained from interviews with various HUD and HUD Office 
of Inspector General (OIG) officials who were affected by the 
Appropriation Act.

1. What functions were transferred to OCFO and how has HUD implemented 
the administration of these functions within OCFO?

2. Is there any conflict between the CFO's traditional duties and 
responsibilities and (a) the sole authority to investigate and report 
on potential or actual violations of statutes and regulations related 
to the obligation and expenditure of funds or (b) the added 
responsibility of sole authority to opine on all appropriations law 
issues?

3. What steps has HUD taken to ensure that any conflict of interest has 
been identified and eliminated?

4. Are there any issues associated with removing the HUD General 
Counsel from being able to review any appropriations law actions of the 
CFO or the HUD Budget Officer and render timely, needed advice to the 
HUD Secretary on any aspect of appropriations law?

5. Does the "sole authority" to investigate and report provided to the 
CFO by the Appropriation Act conflict with or undermine the authority 
provided to the Inspector General by the Inspector General Act?

To address your request, we obtained and reviewed the relevant 
provisions of the Appropriation Act and related conference and 
committee reports. We interviewed several senior level HUD officials 
affected by the Appropriation Act's provisions, including the General 
Counsel and several other attorneys from HUD's OGC; HUD's Deputy Chief 
Financial Officer[Footnote 3] and staff from his office, including the 
head appropriations law attorney and HUD's budget officer; and senior 
officials from HUD's program offices who receive legal services from 
HUD's attorneys. We also interviewed officials from HUD's OIG and 
reviewed the OIG's March 2002 report on the Office of Multifamily 
Housing Assistance Restructuring (OMHAR) Anti-Deficiency Act 
case.[Footnote 4] We also reviewed the Anti-Deficiency Act, the Chief 
Financial Officers Act of 1990, and the Inspector General Act of 1978, 
as amended (IG Act). Finally, we reviewed the department's revised 
funds control handbook dated December 18, 2002, which was updated and 
issued just prior to the enactment of the Appropriation Act and which 
lays out HUD's process for handling future Anti-Deficiency Act 
issues.[Footnote 5] We requested comments on a draft of this report 
from the Secretary of Housing and Urban Development and HUD's Inspector 
General or their designees. We conducted our work from August 2003 
through November 2003 in accordance with U.S. generally accepted 
government auditing standards.

Summary:

There was general agreement among the HUD officials we spoke with that 
the OMHAR Anti-Deficiency Act investigation was contentious and 
highlighted the need for changes to strengthen the department's funds 
control system and to improve the department's process for responding 
to Anti-Deficiency Act issues. Some HUD officials also told us that 
tension over the handling of Anti-Deficiency Act issues led to changes 
in OGC's provision of legal assistance to OCFO, which hindered timely, 
informal communications between OCFO and OGC's appropriation law 
attorneys. However, there were differing views on how to address these 
matters and on various implementation issues raised about provisions 
included in the Appropriation Act.

There was agreement on what functions and roles OCFO assumed pursuant 
to the Appropriation Act. HUD transferred four appropriations law 
attorneys from OGC to OCFO as required. Also, in addition to OCFO's 
typical responsibilities of accounting, financial reporting, 
budgeting, and establishing and maintaining the department's funds 
control system, the HUD officials concurred that OCFO is now 
responsible for all appropriation law matters, including providing 
legal interpretations on appropriation law to HUD's Secretary and 
program offices and leading all Anti-Deficiency Act investigations that 
may arise within the department. There also was general consensus that 
having OCFO as a designated focal point within HUD for addressing Anti-
Deficiency Act matters was a positive development.

Regarding the remaining questions you raised, there was much less 
consensus concerning potential conflicts of interest and the respective 
roles of OCFO, OGC, and the IG. Responses to the remaining questions 
revealed different perspectives, most notably over the implication of 
the Appropriation Act providing OCFO with "sole authority" to 
investigate and determine violations of appropriation law and 
transferring attorneys from OGC to OCFO.

Certain HUD officials and the OIG officials we spoke with believe there 
is a conflict of interest, or at least the appearance of a conflict, by 
having OCFO solely responsible for investigating, determining, and 
reporting on potential or actual Anti-Deficiency Act violations in 
situations involving breakdowns in HUD's funds control system. The OIG 
officials cited the OMHAR Anti-Deficiency Act case as a prime example 
of the existence of a conflict as two of the four individuals deemed 
responsible for that violation worked within OCFO. Others, particularly 
within HUD's OCFO, while acknowledging these concerns, did not 
necessarily feel that the Appropriation Act's provisions created a 
conflict. Instead they said it was their management responsibility, 
even without the legislation, to be involved with and lead 
investigations of potential or actual Anti-Deficiency Act violations. 
Nevertheless, OCFO has taken certain steps that it believes will help 
minimize the potential for, or the appearance of, a conflict of 
interest by establishing and documenting the process that will be 
followed if and when future Anti-Deficiency Act violations arise. 
Additionally, OCFO is also now finalizing the establishment of a new 
division within OCFO that will be headed by an individual with no 
budgetary or funds control responsibilities to oversee and report on 
future Anti-Deficiency Act investigations.

The HUD program officials and most of the attorneys, including the head 
appropriations law attorney in OCFO, we spoke with who work with the 
program offices every day did say that despite HUD's best efforts to 
implement the new mandated structure and ensure collaboration among the 
two groups of attorneys, the transfer of the appropriations law 
attorneys from OGC to OCFO caused initial and lingering confusion over 
which group of attorneys should be consulted for legal assistance. 
According to the General Counsel, this confusion delays legal advice, 
provides the opportunity for program officials to "shop" for legal 
interpretations, and hampers his ability to provide timely, needed 
legal advice not only to the Secretary but also to the HUD program 
offices. Further, numerous officials said they were not sure how 
differing legal views would be resolved. Historically, the General 
Counsel has made the final interpretation. On the other hand, officials 
from OCFO said the transfer of the appropriation attorneys was 
necessary because at some point during the OMHAR Anti-Deficiency Act 
investigation the General Counsel began restricting access to the 
appropriation law attorneys by requiring formal written requests for 
all appropriation law services. As a result, an official in HUD's OCFO 
said that his office and the program offices could not obtain needed 
assistance on appropriation law issues in a timely manner.

Finally, OIG officials told us that they see two conflicts, or at least 
possible conflicts, between the literal language of the Appropriations 
Act and the language of the IG Act. First, they said that by providing 
OCFO with "sole authority" to investigate potential or actual Anti-
Deficiency Act violations, the Appropriations Act conflicts with the 
language of the IG Act that generally authorizes the OIG to investigate 
HUD matters. In response to this conflict, the OIG is referring all 
potential Anti-Deficiency Act issues to HUD's OCFO. Second, the OIG 
officials said they believe there is a possible conflict between OCFO's 
sole authority to report on Anti-Deficiency Act violations under the 
Appropriation Act and the OIG's authority to report criminal violations 
to the Attorney General under the IG Act. On the other hand, officials 
from HUD's OCFO said that the OIG should not routinely be involved in 
an Anti-Deficiency Act violation until an official determination has 
been made by the department. At that time, the OCFO official said it 
would be appropriate for the OIG to review the work that went into the 
investigation, and more importantly and pursuant to their authority, to 
investigate and determine whether criminal acts may have been 
committed.

Background:

In its report[Footnote 6] on the fiscal year 2003 Departments of 
Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Bill, the House Appropriations Committee noted 
that in prior years it and others, including GAO and the Office of 
Management and Budget (OMB), had raised concerns about HUD's system of 
funds control and compliance with the Anti-Deficiency Act. Congress 
enacted the Anti-Deficiency Act and has amended it over many years to 
prohibit agencies from making obligations and expenditures in excess of 
the appropriations provided to them. Among other things, the Anti-
Deficiency Act prohibits officers or employees of the United States 
government, unless otherwise authorized by law, from (1) making or 
authorizing an obligation or expenditure in excess of an available 
appropriation or fund, (2) involving the government in any contract or 
obligation in advance of appropriations, or (3) making obligations or 
expenditures in excess of an apportionment or the amount permitted by 
agency regulations. To help protect against violating the Anti-
Deficiency Act's prohibitions, Congress amended the Anti-Deficiency Act 
on several occasions to establish requirements for agency systems of 
funds control. When violations do occur, the Anti-Deficiency Act 
requires that agency heads report to the President and Congress and 
subjects the officers and employees responsible for the violation to 
possible adverse personnel actions and criminal penalties.[Footnote 7]

The House Appropriations Committee report also noted that these 
concerns and three recent Anti-Deficiency Act violations[Footnote 8] 
that were brought to the Committee's attention prompted an 
investigation by the Committee's Survey and Investigations staff into 
HUD's procedures to investigate and enforce the Anti-Deficiency Act. 
According to the House Appropriations Committee report, the House 
investigators determined that HUD lacked adequate funds control 
policies and procedures with respect to oversight, checks and balances, 
automated systems, audits, and training.

On the basis of these findings, the House Appropriations Committee 
included bill language and additional funding to assist HUD's efforts 
to improve funds control and its financial management systems. 
Additional bill language vested the sole authority to investigate, 
determine, and report compliance with the Anti-Deficiency Act and all 
other appropriations law with HUD's OCFO. The bill language also 
required the transfer of no fewer than four appropriation law attorneys 
from OGC.

The Senate's version of the fiscal year 2003 appropriations bill for 
HUD did not contain any similar provisions. The Departments of Veterans 
Affairs and Housing and Urban Development, Independent Agencies 
Appropriations Act, 2003, was ultimately enacted on February 20, 2003, 
as part of the Consolidated Appropriations Resolution, 2003.[Footnote 
9] The appropriations for HUD "Management and Administration, salaries 
and expenses" essentially adopted the language from the House bill that 
involved OCFO's responsibilities for Anti-Deficiency Act and other 
appropriation law matters and the transfer of four appropriation law 
attorneys.[Footnote 10] In the conference report[Footnote 11] on the 
Consolidated Appropriations Resolution, 2003, the conferees reiterated 
the concerns expressed in the House report about the severe chronic 
funds control problems at HUD, including the department's failure to 
make timely, formal determinations of the violations of the Anti-
Deficiency Act and other appropriations statutes. As of March 2003, HUD 
had completed the mandated transfer of the four appropriation law 
attorneys from OGC to OCFO.

Questions and Answers:

1. What functions were transferred to OCFO and how has HUD implemented 
the administration of these functions within OCFO?

Provisions in the Appropriations Act, gave OCFO, in consultation with 
the Budget Officer, the "sole authority" to investigate potential or 
actual violations of the Anti-Deficiency Act and all other statutes and 
regulations related to the obligation and expenditure of funds. In 
addition, OCFO is to determine whether violations exist and is to 
submit the final reports on violations to the Secretary, the President, 
OMB, and Congress.

As required by the Appropriations Act, HUD transferred four attorneys 
from the Legislation Division, Office of Legislation and Regulations, 
Office of General Counsel to OCFO. Two of these attorneys had what HUD 
described as "significant" appropriations law experience, while the 
other two had lesser amounts of appropriations law experience. OCFO's 
appropriations law function is now responsible for providing legal 
assistance on all appropriations law matters to HUD's program offices 
as well as the HUD Secretary. The appropriation law attorneys are 
supervised by a GM-15 attorney and are currently reporting to HUD's 
Deputy CFO, who is not an attorney.

2. Is there any conflict between the CFO's traditional duties and 
responsibilities and (1) the sole authority to investigate and report 
on potential or actual violations of statutes and regulations related 
to the obligation and expenditure of funds or (2) the added 
responsibility of sole authority to opine on all appropriations law 
issues?

HUD's OCFO typically has been responsible for the department's 
accounting, financial reporting, and budgeting functions, as well as 
for creating and maintaining HUD's system of funds control to ensure 
appropriated funds are used lawfully and as intended. Given these 
responsibilities, several of the HUD officials and the OIG officials we 
interviewed told us that they do believe the new responsibilities 
provided in the Appropriation Act have led to or increased the 
potential for a conflict of interest or at least the appearance of a 
conflict of interest. A chief concern is that OCFO is now solely 
responsible for investigating potential Anti-Deficiency Act violations 
that involve breakdowns in the funds control system, which it is 
responsible for administering. Also, OCFO attorneys are now in the 
position of having to render legal interpretations that may directly 
implicate the performance of the CFO for whom they now work. 
Additionally, there were some concerns raised about the supervision and 
rating of the OCFO attorneys. The OIG officials cited the OMHAR Anti-
Deficiency Act case as prime example of why the Appropriation Act 
created a conflict of interest. In the Secretary's OMHAR Anti-
Deficiency Act report, two of the four persons or positions deemed 
responsible for the violation worked within OCFO.

Others at HUD, principally in OCFO, told us they do not believe there 
is a clear conflict. Their belief is that since OCFO has been delegated 
responsibility for funds control within the department, management of 
that responsibility dictates that OCFO should also be responsible for 
and involved with assessing where that system failed, and if an Anti-
Deficiency Act violation occurred. Further, HUD's budget officer 
believes the Anti-Deficiency Act and OMB circulars make it clear that 
the funds control responsibilities rest within OCFO.

The Deputy CFO and some others said the Appropriation Act was useful in 
that it clearly establishes who within HUD has responsibility for 
leading and making future Anti-Deficiency Act violation determinations. 
During the OMHAR Anti-Deficiency Act investigation, these 
responsibilities were not clearly defined and this hampered the 
investigation. HUD's updated funds control handbook now specifies 
individuals' responsibilities with respect to future Anti-Deficiency 
Act issues. Further, the Deputy CFO stated that the appropriation law 
attorneys now assigned to his office can focus on reviewing newly 
required funds control plans, which he and others believe are a key 
component in strengthening HUD's system of funds control to prevent 
future Anti-Deficiency Act violations.

The Deputy CFO said that OCFO did recognize that others have concerns 
about the potential for an appearance of a conflict of interest and 
therefore, as discussed in the response to question 3, has taken or 
plans certain actions to help mitigate these concerns.

3. What steps has HUD taken to ensure that any conflict of interest has 
been identified and eliminated?

Given the responsibilities of HUD's OCFO, it would be difficult to 
completely eliminate the potential for a conflict of interest or the 
appearance of a conflict of interest. However, HUD has taken or is 
planning to take certain steps to try to mitigate this risk. 
Specifically, we were told that OCFO is in the process of establishing 
a new division within OCFO that is to be headed by an individual with 
no funds control or budget responsibilities to lead future Anti-
Deficiency Act inquiries. The investigative team is also to be 
comprised of staff not associated with the activity where the Anti-
Deficiency Act violation is alleged. We were told that OCFO 
appropriations law attorneys would provide legal assistance to this 
group and the new division would submit its report - a report that we 
were told will serve as the department's report as required by the 
Anti-Deficiency Act and OMB Circular A-11--to the CFO and HUD Secretary 
for acceptance. A HUD official told us that this division is staffed 
and ready to begin work pending notification to Congress.

Additionally, prior to the enactment of the Appropriations Act, HUD's 
OCFO made substantial revisions to its funds control handbook. Included 
in this revised handbook is a chapter that lays out the department's 
process for responding to future Anti-Deficiency Act issues. The 
process spells out who to notify when an Anti-Deficiency Act violation 
is suspected, delineates responsibilities for conducting the 
investigation, and prescribes the documentation that is to be 
maintained. HUD is now in the final stages of updating the funds 
control handbook again to reflect the organizational changes mandated 
by the Appropriations Act and the establishment of the new division 
within OCFO that will lead future Anti-Deficiency Act investigations.

4. Are there any issues associated with removing the HUD General 
Counsel from being able to review any appropriations law actions of the 
CFO or the HUD Budget Officer and render timely, needed advice to the 
HUD Secretary on any aspect of appropriations law?

In our discussions concerning this question, agency officials had 
different views. Most of the attorneys we interviewed from HUD's OGC, 
including the General Counsel, shared the opinion that the current 
organizational structure does not lend itself to ensuring the Secretary 
receives the best, most timely legal advice. In fact, there was broad 
consensus among those we spoke to that the current organizational 
structure is awkward. On the other hand, officials in OCFO said the 
transfer of attorneys was necessary because in the wake of the OMHAR 
Anti-Deficiency Act investigation, OGC restricted access to the 
appropriation law attorneys making it very cumbersome for OCFO staff 
and program office officials to obtain timely, needed advice on 
appropriation issues. We were told that collaboration occurred 
informally prior to the OMHAR Anti-Deficiency Act investigation. At 
some point during the OMHAR Anti-Deficiency Act investigation, OGC 
instituted a policy of requiring formal written requests for all 
appropriation law services.

The General Counsel expressed three key concerns about the change in 
organizational structure mandated by the Appropriations Act. First, he 
was concerned that under the current structure his office might not be 
informed of all legal issues that arise within the department, 
including those that should be elevated to the Secretary's attention. 
Second, he and others commented that now the Secretary and even the 
program assistant secretaries could be presented with two conflicting 
legal interpretations and that there is currently no mechanism for 
resolving these differences. In the past the General Counsel, after 
hearing the opposing views, would make the final interpretation of law. 
Third, he thought that under the current structure there was a greater 
risk for program office officials to "shop" for the legal 
interpretation that best met their goals. He said having all the 
attorneys placed within OGC reduces that risk because all legal issues 
ultimately were subject to review and resolution by the General 
Counsel.

Officials within OCFO told us that they believe the creation of a 
separate appropriations law function within OCFO has resulted in an 
increase in the level of legal staff effort and service devoted to 
appropriations law issues, and that this increased focus and effort 
should be sustained regardless of its organizational placement within 
HUD. An OGC official told us that prior to their transfer to OCFO, the 
four appropriation law attorneys assigned to her spent less than half 
their time on appropriation law issues.

Several HUD officials from both OGC and OCFO said that the OMHAR Anti-
Deficiency Act investigation highlighted the need for additional 
resources and expertise in its appropriation law function and that 
prior to the enactment of the Appropriation Act, OGC had hired an 
additional attorney with considerable appropriations law experience to 
bolster that function. However, this attorney was not one of those 
transferred to OCFO because, according to HUD's General Counsel, at the 
time of the transfer this individual was not assigned to the division 
that was specifically identified in the Appropriation Act as having to 
transfer staff.

While most of the HUD attorneys we spoke with, including the head OCFO 
appropriations law attorney, believed that HUD has done its best under 
the new structure to ensure that coordination between the program 
attorneys and the appropriation law attorneys continues, nearly all 
acknowledged that there was initial and even lingering confusion in 
some situations as to what group of attorneys has responsibility over a 
particular issue. The HUD program office officials raised the same 
issue.

Two attorneys stated that it is often difficult to seperate 
appropriation law issues from other legal issues, which highlights the 
need for good coordination and communication between all of HUD's 
attorneys. There was further concern raised that as the attorneys in 
OGC and OCFO change over time the level of coordination between the two 
groups could deteriorate under the current structure. Currently, OGC 
and OCFO attorneys have the benefit of long-standing working 
relationships with one another.

5. Does the "sole authority" to investigate and report provided to the 
CFO by the Appropriations Act conflict with or undermine the authority 
provided to the Inspector General by the Inspector General Act?

The IG Act provides that IGs shall have the duty and responsibility to 
"conduct, supervise, and coordinate  investigations relating to the 
programs and operations of the agency."[Footnote 12] The IG Act also 
provides that an IG "shall report expeditiously to the Attorney General 
whenever the Inspector General has reasonable grounds to believe there 
has been a violation of Federal criminal law."[Footnote 13] The OIG 
identified these provisions of the IG Act as being in conflict, or at 
least potentially in conflict, with the literal language of the 
Appropriations Act.

The HUD OIG officials we met with, including the counsel to the 
Inspector General, pointed to the language in the Appropriations Act 
that provides the OCFO with "sole authority to investigate potential or 
actual violations under the Anti-Deficiency Act" as conflicting with 
the language of the IG Act providing the IG with general authority to 
investigate HUD matters. They believe the literal language of the 
Appropriations Act precludes the OIG from investigating potential Anti-
Deficiency Act violations, including those that might be identified 
during routine or ongoing OIG jobs or those that are reported via the 
Inspector General's fraud hotline. As a result, the OIG officials said 
they are referring all potential Anti-Deficiency Act matters to OCFO.

The OIG also brought up that, in addition to providing OCFO with the 
sole authority to investigate potential or actual Anti-Deficiency Act 
violations, the language in the Appropriations Act provides that OCFO 
shall determine whether violations exist and submit final reports on 
violations.[Footnote 14] The OIG said that there is a possible conflict 
between this language and the language in section 4(c) of the IG Act, 
which directs the IG to report to the Attorney General if the IG 
reasonably believes there has been a violation of criminal 
law.[Footnote 15] The OIG is unclear how to reconcile this provision 
with OCFO's current authority. OIG officials told us that they have not 
yet been faced with a situation that required resolution of this issue.

An OCFO official expressed a somewhat different view of the 
Appropriation Act's potential effect on the IG. The officials stated 
that the OIG should not routinely be involved in an Anti-Deficiency Act 
violation until the department has determined whether an actual 
violation has occurred. At that time, the OCFO official said it would 
be appropriate for the OIG to review the work that went into the 
investigation, and more importantly and pursuant to their authority to 
investigate, determine whether criminal acts may have been committed.

Agency Comments and Our Evaluation:

On November 19, 2003, HUD's Assistant Inspector General for Audits 
provided us with oral comments expressing the Office of Inspector 
General's agreement with the information presented that pertained to or 
was attributable to the OIG. HUD did not take an official position on 
the issues discussed in this report but instead provided separate 
letters containing technical comments from its Deputy Chief Financial 
Officer and the Deputy General Counsel. We considered these comments 
and as we deemed appropriate made revisions to the report.

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 14 days 
from its date. At that time, we will send copies to the Secretary of 
Housing and Urban Development, the Inspector General, and interested 
congressional committees. We will also provide copies to others on 
request. The report will also be available at no charge on the GAO Web 
site at http://www.gao.gov.

If you have any questions about this report, please contact me at (202) 
512-9508, or Phillip McIntyre, Assistant Director, at (202) 512-4373. 
You may also reach us by E-mail at calboml@gao.gov or 
mcintyrep@gao.gov. Other key contributors to this report were Jeffrey 
Jacobson and Jack Hufnagle.

Linda M. Calbom:

Director, Financial Management and Assurance:

Signed by Linda M. Calbom:

(190107):

FOOTNOTES

[1] Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003).

[2] 31 U.S.C.  1341, 1342, 1350, 1517, 1519 (2000). 

[3] HUD's Chief Financial Officer position is currently vacant. 

[4] HUD Office of Inspector General Audit Memorandum Report 2002-DE-
0801 (March 22, 2002), "Alleged Violations of the Anti-Deficiency Act 
and the HUD Reform Act by the Office of Multifamily Housing Assistance 
Restructuring (OMHAR)." There was consensus among HUD officials that 
HUD's handling of this Anti-Deficiency Act case played a significant 
role in the events leading to enactment of the Appropriation Act's 
provisions that are the subject of this request.

[5] HUD is currently revising its funds control handbook (Handbook No. 
1830.2 Rev-4) to incorporate the organizational changes mandated by the 
fiscal year 2003 Appropriation Act.

[6] H.R. Rep. No. 107-740, at 78-79 (2002).

[7] OMB Circular A-11 provides requirements for funds control and 
instructions for required agency head reports if the agency head 
determines that an Anti-Deficiency Act violation occurred. For an 
extensive discussion of the Anti-Deficiency Act, see chapter 6 of GAO's 
Principles of Federal Appropriations Law.

[8] The most significant Anti-Deficiency Act violation involved HUD's 
Office of Multifamily Housing and Assistance Restructuring's (OMHAR) 
use of technical assistance grant funds. HUD's investigation into this 
matter was lengthy and resulted in mixed opinions about whether an 
Anti-Deficiency Act violation actually occurred. Both HUD's General 
Counsel and the Office of Inspector General concluded that with respect 
to the OMHAR case no Anti-Deficiency Act violation occurred. However, 
HUD's Secretary ultimately concluded there was an Anti-Deficiency Act 
violation and reported it.

[9] Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003).

[10] 117 Stat. at 499-500.

[11] H.R. Conf. Rep. No. 108-10, at 1427 (2003).

[12] 5 U.S.C. Appendix  4(a)(1)(2000). Other provisions of the IG Act 
also support the IG's authority to investigate.

[13] 5 U.S.C. Appendix  4(c).

[14] The Anti-Deficiency Act provides for heads of agencies to report 
violations to the President and Congress. 31 U.S.C.  1351, 1517(b).

[15] An Anti-Deficiency Act violation may be subject to criminal 
penalty. 31 U.S.C.  1350, 1519 (2000).