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United States Government Accountability Office: 

Office of the General Counsel: 

March 2008: 

Principles Of Federal Appropriations Law: 

Annual Update of the Third Edition: 



We are pleased to present the annual update of the third edition of
Volumes I and II of Principles of Federal Appropriations Law. Our 
objective in this publication is to present a cumulative supplement to 
the published third edition text that includes all relevant decisions 
from January 1 to December 31, 2007. After Volume III is published, the 
third edition of Principles will be complete and all three volumes will 
be updated annually. 

The annual update is posted electronically on GAO’s Web site 
[hyperlink,]. These annual updates are not issued in 
hard copy and should be used as electronic supplements. Users should 
retain hard copies of the third edition volumes and refer to the 
cumulative updates for newer material. The page numbers identified in 
the annual update as containing new material are the page numbers in 
the hard copy of the third edition and the new, updated information 
appears as bolded text. 

[End of section] 

Volume 1: 


Chapter 1 – Introduction: 

Chapter 2 – The Legal Framework: 

Chapter 3 – Agency Regulations and Administrative Discretion: 

Chapter 4 – Availability of Appropriations: Purpose: 

Chapter 5 – Availability of Appropriations: Time: 

Volume 2: 

Chapter 6 – Availability of Appropriations: Amount: 

Chapter 7 – Obligation of Appropriations: 

Chapter 8 – Continuing Resolutions: 

Chapter 9 – Liability and Relief of Accountable Officers: 

Chapter 10 – Federal Assistance: Grants and Cooperative Agreements: 

Chapter 11 – Federal Assistance: Guaranteed and Insured Loans (no 
updates this year): 

[End of section] 


Page i – Insert the following as footnote number 1 at the end of the 
first paragraph (after “GAO Legal Products.”1): 

[1] Section 8 of the GAO Human Capital Reform Act of 2004, Pub. L. 
No. 108-271, 118 Stat. 811, 814 (July 7, 2004), 31 U.S.C. § 702 note, 
changed GAO’s name to the “Government Accountability Office.” This 
change was made to better reflect GAO’s current mission. See S. Rep. 
No. 108-216, at 8 (2003); H.R. Rep. No.380, at 12 (2003). Therefore, 
any reference in this volume to the “General Accounting Office” should 
be read to mean “Government Accountability Office.” The acronym “GAO” 
as used in the text now refers to the Government Accountability Office. 

[End of section] 

Chapter 1: Introduction: 

Chapter1B. The Congressional “Power of the Purse” 

Page 1-4 – Replace footnote 6 with the following: 

[6] Numerous similar statements exist. See, e.g., Knote v. United 
States, 95 U.S. 149, 154 (1877); Marathon Oil Co. v. United States, 374 
F.3d 1123, 1133–34 (Fed. Cir. 2004), cert. denied, 544 U.S. 1031 
(2005); Gowland v. Aetna, 143 F.3d 951, 955 (5th Cir. 1998); Hart’s 
Case, 16 Ct. Cl. 459, 484 (1880), aff’d, Hart v. United States, 118 
U.S. 62 (1886); Jamal v. Travelers Lloyds of Texas Insurance Co., 
131 F. Supp. 2d 910, 919 (S.D. Tex. 2001); Doe v. Mathews, 420 F. Supp. 
865, 870–71 (D. N.J. 1976). 

Page 1-5 – Insert the following after the second paragraph: 

For example, in Rumsfeld v. Forum for Academic and Institutional 
Rights, Inc., 547 U.S. 47 (2006), the Supreme Court reversed a lower 
court decision, 390 F.3d 219 (3rd Cir. 2004), and upheld the 
constitutionality of the so-called “Solomon Amendment.” Originally 
enacted as an appropriation rider and now codified as amended at 10 
U.S.C. § 983, the Solomon Amendment generally prohibits the receipt of 
certain federal funds by institutions of higher education that deny 
military recruiters the same access they provide to other recruiters on 
their campuses. The Forum for Academic and Institutional Rights (FAIR), 
an association of law schools and faculty members, maintained that the 
Solomon Amendment attached an unconstitutional condition to their 
receipt of federal funds and, thus, exceeded congressional 
constitutional authority under the so-called “Spending Clause” in 
article I, section 8. Specifically, FAIR alleged that the statute 
violated their First Amendment rights to oppose federal policies 
regarding homosexuals in the military. In an 8–0 opinion by Chief 
Justice Roberts, the Supreme Court rejected these arguments. Quoting 
from Grove City College v. Bell, 465 U.S. 555, 575–76 (1984), the Court 
noted that under the Spending Clause, “Congress is free to attach 
reasonable and unambiguous conditions to federal financial assistance 
that educational institutions are not obliged to accept.” 547 U.S. at 
59. In essence, the Court reasoned that funding conditions such as the 
Solomon Amendment cannot violate the Spending Clause if Congress could 
constitutionally impose the same requirements through direct 
legislation. The Court went on to hold that Congress could enact 
legislation that directly mandated the Solomon Amendment’s requirements 
without running afoul of the First Amendment. Id. at 59–60. The Court 
observed that Congress could use its authority under article I, section 
8, clauses 1 and 12–13 of the Constitution to provide for the common 
defense and to raise and support armies, etc., as a basis for directly 
legislating the Solomon Amendment’s requirements for equal access by 
military recruiters so long as the legislation was otherwise 
constitutional. It then held that the Solomon Amendment’s requirements 
did not implicate First Amendment rights, dismissing each of FAIR’s 
arguments to the contrary. The opinion stated by way of summary: 

“The Solomon Amendment neither limits what law schools may say nor 
requires them to say anything....As a general matter, the Solomon 
Amendment regulates conduct, not speech. It affects what law schools 
must do—afford equal access to military recruiters—not what they may or 
not say.” 

Id. at 60 (emphasis in original). 

Page 1-7 – Insert the following after the last paragraph: 

In a 2007 decision, GAO declined to interpret the voluntary services 
prohibition of the Antideficiency Act to prohibit the President from 
exercising his constitutional power to make a recess appointment to an 
individual who was barred by statute from receiving compensation. B-
309301, June 8, 2007. GAO noted that “serious constitutional issues 
would arise if [the statutory bar on compensation], in conjunction with 
the voluntary services prohibition, were read to directly restrict the 
President from making a recess appointment.” Id. at 6. 

Page 1-9 – Replace the first paragraph with the following: 

In Kansas v. United States, 214 F.3d 1196, 1201–02, n.6 (10th Cir.), 
cert. denied, 531 U.S. 1035 (2000), the court noted that there were few 
decisions striking down federal statutory spending conditions.9 
However, there are two recent interesting examples of situations in 
which courts invalidated a spending condition on First Amendment 
grounds. In Legal Services Corp. v. Velasquez, 531 U.S. 533 (2001), a 
conditional provision (contained in the annual appropriations for the 
Legal Service Corporation (LSC) since 1996) was struck down as 
inconsistent with the First Amendment. This provision prohibited LSC 
grantees from representing clients in efforts to amend or otherwise 
challenge existing welfare law. The Supreme Court found this provision 
interfered with the free speech rights of clients represented by LSC-
funded attorneys.10 In American Civil Liberties Union (ACLU) v. Mineta, 
319 F. Supp. 2d 69 (D.D.C. 2004), the court declared unconstitutional 
an appropriation provision forbidding the use of federal mass transit 
grant funds for any activity that promoted the legalization or medical 
use of marijuana, for example, posting an advertisement on a bus. 
Relying on Legal Services Corp., the court held that the provision 
constituted “viewpoint discrimination” in violation of the First 
Amendment. ACLU, 319 F. Supp. 2d at 83–87. 

Page 1-10 – Insert the following after the first partial paragraph: 

There have been some recent court cases upholding congressional actions 
attaching conditions to the use of federal funds that require states to 
waive their sovereign immunity from lawsuits under the Eleventh 
Amendment. In these cases, courts found the condition a legitimate 
exercise of Congress’s spending power. For example, the court in 
Barbour v. Washington Metropolitan Transit Authority, 374 F.3d 1161 
(D.C. Cir. 2004), cert. denied, 544 U.S. 904 (2005), upheld a statutory 
provision known as the “Civil Rights Remedies Equalization Act,” 42 
U.S.C. § 2000d-7, which clearly conditioned a state’s acceptance of 
federal funds on its waiver of its Eleventh Amendment immunity to suits 
under various federal antidiscrimination laws. Among other things, the 
court rejected an argument based on Dole that the condition was not 
sufficiently related to federal spending. The opinion observed that the 
Supreme Court has never overturned Spending Clause legislation on 
“relatedness grounds.” Barbour, 374 F.3d at 1168. 

Similarly, two courts rejected challenges to section 3 of the Religious 
Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 U.S.C. 
§ 2000cc-1, which limits restrictions on the exercise of religion by 
persons institutionalized in a program or activity that receives 
federal financial assistance. Charles v. Verhagen, 348 F.3d 601 (7th 
Cir. 2003); Williams v. Bitner, 285 F. Supp. 2d 593 (M.D. Pa. 2003), 
aff’d in part, remanded in part 455 F.3d 186 (3rd Cir. 2006). In 
Charles, the court held that RLUIPA “falls squarely within Congress’ 
pursuit of the general welfare under its Spending Clause authority.” 
Charles, 348 F.3d at 607. The court also rejected the argument that the 
statute’s restrictions could not be related to a federal spending 
interest because the state corrections program at issue received less 
than 2 percent of its budget from federal funding: “Nothing within 
Spending Clause jurisprudence, or RLUIPA for that matter, suggests that 
States are bound by the conditional grant of federal money only if the 
State receives or derives a certain percentage...of its budget from 
federal funds.” Id. at 609. 

Page 1-10 – Replace the second paragraph with the following: 

For some additional recent cases upholding statutory funding 
conditions, see Biodiversity Associates v. Cables, 357 F.3d 1152 (10th 
Cir.), cert. denied, 543 U.S. 817 (2004) (upholding an appropriations 
rider that explicitly superseded a settlement agreement the plaintiffs 
had reached with the Forest Service in environmental litigation); 
Kansas v. United States, 214 F.3d 1196 (10th Cir.), cert. denied, 531 
U.S. 1035 (2000) (upholding the statutory requirement conditioning 
receipt of federal block grants used to provide cash assistance and 
other supportive services to low income families on a state’s 
participation in and compliance with a federal child support 
enforcement program); Litman, 186 F.3d 544 (state university’s receipt 
of federal funds was validly conditioned upon waiver of the state’s 
Eleventh Amendment immunity from federal antidiscrimination lawsuits); 
California v. United States, 104 F.3d 1086, 1092 (9th Cir. 1997) 
(acknowledging that although it originally agreed to the condition for 
receipt of federal Medicaid funds on state provision of emergency 
medical services to illegal aliens, California now viewed that 
condition as coerced because substantial increases in illegal 
immigration left California with no choice but to remain in the program 
to prevent collapse of its medical system; the complaint was dismissed 
for failure to state a claim upon which relief could be granted); and 
Armstrong v. Vance, 328 F. Supp.  2d 50 (D.D.C. 2004) and Whatley v. 
District of Columbia, 328 F.2d 15 (D.D.C. 2004), aff’d, 447 F.3d 814 
(D.C. Cir. 2006) (two related decisions upholding appropriations 
provisions that imposed a cap on the District of Columbia’s payment of 
attorney fees awarded in litigation under the Individuals with 
Disabilities Education Act, 20 U.S.C. §§ 1400–1490). See also Richard 
W. Garnett, The New Federalism, the Spending Power, and Federal 
Criminal Law, 89 Cornell L. Rev. 1 (Nov. 2003), an article that 
provides more background on this general subject. 

Page 1-12 – Replace the second bullet in the first paragraph with the 

* Agencies may not spend, or commit themselves to spend, in advance of 
or in excess of appropriations. 31 U.S.C. § 1341 (Antideficiency Act). 
GAO has said that because the Antideficiency Act is central to 
Congress’s core constitutional power of the purse, GAO will not 
interpret general language in another statute, such as the 
“notwithstanding any other provision of law” clause, to imply a waiver 
of the Act without some affirmative expression of congressional intent 
to give the agency the authority to obligate in advance or in excess of 
an appropriation. B-303961, Dec. 6, 2004. 

D. “Life Cycle” of an Appropriation: 

3.Budget Execution and Control: 

Page 1-34 – Insert the following after the first partial paragraph: 

In 2006, GAO reported to Congress that in 13 instances executive 
agencies had impounded funds that the President had proposed for 
cancellation. B-308011, Aug. 4, 2006; B-307122.2, Mar. 2, 2006. When 
the President proposed cancellation of these funds, the Administration 
had not submitted reports of impoundments under the Impoundment Control 
Act because, officials explained, the Administration was not 
withholding funds from obligation. In all 13 instances, the agencies 
released impounded funds as a result of GAO’s inquiries. Id. 

E.The Role of the Accounting Officers: Legal Decisions: 

2. Decisions of the Comptroller General: 

Page 1-40 – Replace the last partial paragraph with the following: 

There is no specific procedure for requesting a decision from the 
Comptroller General. A simple letter is usually sufficient. The request 
should, however, include all pertinent information or supporting 
material and should present any arguments the requestor wishes to have 
considered. See GAO, Procedures and Practices for Legal Decisions and 
Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006), available at 

Page 1-42 – Replace the third full paragraph with the following: 

For example, as we discussed earlier in this chapter, effective June 
30, 1996, Congress transferred claims settlement authority under 31 
U.S.C. § 3302 to the Director of the Office of Management and Budget 
(OMB). Congress gave the director of OMB the authority to delegate this 
function to such agency or agencies as he deemed appropriate. See, 
e.g., B-302996, May 21, 2004 (GAO no longer has authority to settle a 
claim for severance pay); B-278805, July 21, 1999 (the International 
Trade Commission was the appropriate agency to resolve the subject 
claims request). 

Page 1-42 – Replace the fourth full paragraph with the following: 

Other areas where the Comptroller General will decline to render 
decisions include questions concerning which the determination of 
another agency is by law “final and conclusive.” Examples are 
determinations on the merits of a claim against another agency under 
the Federal Tort Claims Act (28 U.S.C. § 2672) or the Military 
Personnel and Civilian Employees’ Claims Act of 1964 (31 U.S.C. § 
3721). See, e.g., B-300829, Apr. 4, 2004 (regarding the Military 
Personnel and Civilian Employees’ Claims Act). Another example is a 
decision by the Secretary of Veterans Affairs on a claim for veterans’ 
benefits (38 U.S.C. § 511). See B-266193, Feb. 23, 1996; 56 Comp. Gen. 
587, 591 (1977); B-226599.2, Nov. 3, 1988 (nondecision letter). 

3. Other Relevant Authorities: 

Page 1-48 – Replace paragraph number 7 with the following: 

7. A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP 
(Washington, D.C.: Sept. 2005)—This publication contains standard 
definitions of fiscal and budgetary terms. It is published by GAO as 
required by 31 U.S.C. § 1112(c), and is updated periodically. 

[End of Chapter 1] 

Chapter 2: The Legal Framework: 

B. Some Basic Concepts: 

1. What Constitutes an Appropriation: 

Page 2-20 – Insert the following after the second full paragraph: 

Subsequent to the Core Concepts and AINS decisions, the Third Circuit 
Court of Appeals had occasion to weigh in on the issue of revolving 
funds in a non-Tucker Act situation in American Federation of 
Government Employees (AFGE) v. Federal Labor Relations Authority 
(FLRA), 388 F.3d 405 (3rd Cir. 2004). In that case, AFGE, representing 
Army depot employees, had proposed an amendment to the employees’ 
collective bargaining agreement that would have required the Army to 
pay reimbursements of personal expenses incurred by the depot employees 
as a result of cancelled annual leave from a defense working capital 
fund. When the Army objected that it had no authority to use the 
working capital fund for personal expenses, AFGE appealed to FLRA. FLRA 
agreed with the Army and ruled that the provision was “nonnegotiable.” 
Citing FLRA decisions, Comptroller General decisions, and federal court 
cases, FLRA concluded that the working capital fund, a revolving fund, 
is treated as a continuing appropriation and, as such, the fund was not 
available for reimbursement of personal expenses. 

The court agreed with FLRA that the defense working capital fund 
consists of appropriated funds and is thus not available to pay the 
personal expenses of Army employees. The court, however, rejected what 
it called “FLRA’s blanket generalization that revolving funds are 
always appropriations.” AFGE, 388 F.3d at 411. Instead, the court 
applied a standard used by the Federal Circuit and the Court of Federal 
Claims when addressing the threshold issue of Tucker Act jurisdiction, 
a “clear expression” standard; that is, funds should be regarded as 
“appropriated” absent a “clear expression by Congress that the agency 
was to be separated from the general federal revenues.” Id. at 410. The 
court observed in this regard: 

“While that ‘clear expression’ standard arises in the context of Tucker 
Act jurisprudence, we think it accurately reflects the broader 
principle that one should not lightly presume that Congress meant to
surrender its control over public expenditures by authorizing an entity 
to be entirely self-sufficient and outside the appropriations 
process....For this reason, the courts have sensibly treated agency 
money as appropriated even when the agency is fully financed by outside 
revenues, so long as Congress has not clearly stated that it wishes to 
relinquish the control normally afforded through the appropriations

“...We think the correct rule is that the characterization of a 
government fund as appropriated or not depends entirely on Congress’
expression, whatever the actual source of the money and whether or not 
the fund operates on a revolving rather than annualized basis.” 

Id. at 410–11. In applying this standard to the particular funding 
arrangement at issue, the court determined that the defense working 
capital fund was not a nonappropriated fund instrumentality and upheld 
the FLRA decision. “What matters is how Congress wishes to treat 
government revenues, not the source of the revenues.” Id. at 413. 

3. Transfer and Reprogramming: 

Page 2-24 – Replace footnote 40 with the following: 

[40] 7 Comp. Gen. 524 (1928); 4 Comp. Gen. 848 (1925); 17 Comp. Dec. 
174 (1910). Cases in which adequate statutory authority was found to 
exist are B-302760, May 17, 2004 (the transfer of funds from the 
Library of Congress to the Architect of the Capitol for construction of 
a loading dock at the Library is authorized) and B-217093, Jan. 9, 1985 
(the transfer from the Japan-United States Friendship Commission to the 
Department of Education to partially fund a study of Japanese education 
is authorized). 

Page 2-25 – Insert the following after the first full paragraph: 

In 2007, GAO found that the Department of Homeland Security’s (DHS) 
Preparedness Directorate had authority pursuant to 31 U.S.C. § 1534, 
the “account adjustment statute,” to fund shared services that 
benefited the directorate as a whole by initially obligating the 
services against one appropriation within the directorate and then 
allocating the costs to the benefiting appropriations. However, the 
Directorate did not appear to properly allocate the costs. To the 
extent it did not properly record its obligations prior to the end of 
the fiscal year against each benefiting appropriation for the estimated 
value of the services each appropriation received, as required by the 
account adjustment statute, the Directorate improperly augmented its 
appropriations. B-308762, Sept. 17, 2007. 

Page 2-28 – Insert the following, including the reference to new 
footnote number 44a, after the first full paragraph: 

In another case, GAO found that the Department of Defense (DOD) 
improperly “parked” DOD funds when it transferred the funds to a 
Department of the Interior franchise fund, GovWorks.[Footnote 44a] B-
308944, July 17, 2007. “Parking” is a term used to describe a transfer 
of appropriations to a revolving fund to extend the availability of the 
appropriations. GovWorks is a revolving fund established to provide 
common administrative services to Interior and other agencies by 
procuring goods and services from vendors on behalf of federal agencies 
on a competitive basis. DOD used Military Interdepartmental Purchase 
Requests (MIPRs) to transfer funds to GovWorks but did not identify the 
specific items or services that DOD wanted GovWorks to acquire on its 
behalf until after the funds had expired. DOD subsequently improperly 
directed GovWorks to use expired DOD funds for contracts in violation 
of the bona fide needs rule. 

Page 2-28 – Insert the following as new footnote number 44a: 

[44a] GovWorks is officially known as the Acquisition Services 
Directorate. See [hyperlink,] (last visited 
Feb. 8, 2008). 

Page 2-31 – Replace the first full paragraph with the following and 
insert new footnote number 48a as follows: 

Thus, as a matter of law, an agency is free to reprogram unobligated 
funds as long as the expenditures are within the general purpose of the 
appropriation and are not in violation of any other specific limitation 
or otherwise prohibited. E.g., B-279338, Jan. 4, 1999; B-123469, May 9, 
1955. This is true even though the agency may already have 
administratively allotted the funds to a particular object. 20 Comp. 
Gen. 631 (1941). In some situations, an agency may be required to 
reprogram funds to satisfy other obligations. E.g., Cherokee Nation of 
Oklahoma v. Leavitt, 543 U.S. 631, 641–43 (2005) (government must 
reprogram unrestricted funds to cover contractual obligations);48a 
Blackhawk Heating & Plumbing, 622 F.2d at 552 n.9 (satisfaction of 
obligations under a settlement agreement). 

Page 2-31 – Insert the following for new footnote number 48a: 

[48a] In this case, the government had argued that its contracts with 
Indian tribes were not “ordinary procurement contracts,” so it was not 
legally bound to pay certain contract costs unless Congress 
appropriated sufficient funds for that purpose. The Court found the 
tribal contracts to be binding in the same way as ordinary contractual 
promises and that the government would have to reprogram appropriations 
to fulfill its contractual obligations to the tribes, notwithstanding 
that the government may have planned to use those appropriations for 
other purposes that the government felt were critically important. 

4. General Provisions: When Construed as Permanent Legislation: 

Page 2-36 – Replace the third full paragraph with the following: 

The words “this or any other act” may be used in conjunction with other 
language that makes the result, one way or the other, indisputable. The 
provision is clearly not permanent if the phrase “during the current 
fiscal year” is added. Norcross v. United States, 142 Ct. Cl. 763 
(1958). Addition of the phrase “with respect to any fiscal year” would 
indicate, all other potential considerations aside, that Congress 
intended the provision to be permanent. B-230110, supra. For example, 
in the 2006 Department of Justice Appropriations Act, as part of the 
language of ATF’s Salaries and Expenses appropriation, Congress 
included a proviso stating that “no funds appropriated under this or 
any other Act with respect to any fiscal year may be used to disclose 
part or all of the contents of the Firearms Trace System database” to 
anyone other than a law enforcement agency or a prosecutor in 
connection with a criminal investigation or prosecution. Pub. L.
No. 109-108, title I, 119 Stat. 2290, 2295 (Nov. 22, 2005). In B-
309704, Aug. 28, 2007, GAO determined that the proviso constituted 
permanent legislation because the forward-looking effect of the phrase 
“this or any other Act” coupled with the phrase “with respect to any 
fiscal year” indicates Congress’s intention that the provision be 

C. Relationship of Appropriations to Other Types of Legislation: 

2. Specific Problem Areas and the Resolution of Conflicts: 

Page 2-43 – Replace the third full paragraph with the following: 

Second, Congress is free to amend or repeal prior legislation as long 
as it does so directly and explicitly and does not violate the 
Constitution. It is also possible for one statute to implicitly amend 
or repeal a prior statute, but it is firmly established that “repeal by 
implication” is disfavored, and statutes will be construed to avoid 
this result whenever reasonably possible. E.g., Tennessee Valley 
Authority v. Hill, 437 U.S. 153, 189–90 (1978); Morton v. Mancari, 
417 U.S. 535, 549 (1974); Posadas v. National City Bank of New York, 
296 U.S. 497, 503 (1936); B-307720, Sept. 27, 2007; B-290011, Mar. 25, 
2002; B-261589, Mar. 6, 1996; 72 Comp. Gen. 295, 297 (1993); 68 Comp. 
Gen. 19, 22–23 (1988); 64 Comp. Gen. 143, 145 (1984); 58 Comp. 
Gen. 687, 691–92 (1979); B-258163, Sept. 29, 1994; B-236057, May 9, 
1990. Repeals by implication are particularly disfavored in the 
appropriations context. Robertson v. Seattle Audubon Society, 503 U.S. 
429, 440 (1992). 

Page 2-44 – Replace the first full paragraph with the following: 

A corollary to the “cardinal rule” against repeal by implication, or 
perhaps another way of saying the same thing, is the rule of 
construction that statutes should be construed harmoniously so as to 
give maximum effect to both wherever possible. E.g., Posadas, 296 U.S. 
at 503; Strawser v. Atkins, 290 F.3d 720 (4th Cir.), cert. denied, 
537 U.S. 1045 (2002); B-290011, Mar. 25, 2002; 53 Comp. Gen. 853, 856 
(1974); B-208593.6, Dec. 22, 1988. See B-307720, Sept. 27, 2007, and B-
258000, Aug. 31, 1994, for examples of harmonizing ambiguous 
appropriation and authorization provisions in order to effectuate 
congressional intent. 

Page 2-44 – Replace the second full paragraph with the following: 

Third, if two statutes are in irreconcilable conflict, the more recent 
statute, as the latest expression of Congress, governs. As one court 
concluded in a statement illustrating the eloquence of simplicity, 
“[t]he statutes are thus in conflict, the earlier permitting and the 
later prohibiting,” so the later statute supersedes the earlier. 
Eisenberg v. Corning, 179 F.2d 275, 277 (D.C. Cir. 1949). In a sense, 
the “last in time” rule is yet another way of expressing the repeal by 
implication principle. We state it separately to highlight its 
narrowness: it applies only when the two statutes cannot be reconciled 
in any reasonable manner, and then only to the extent of the conflict. 
E.g., B-308715, Apr. 20, 2007 (“It is well established that a later 
enacted, specific statute will typically supersede a conflicting 
previously enacted, general statute to the extent of the 
inconsistency.”). See also Posadas, 296 U.S. at 503; B-255979, Oct. 30, 
1995; B-226389, Nov. 14, 1988; B-214172, July 10, 1984, aff’d upon 
reconsideration, 64 Comp. Gen. 282 (1985). 

Page 2-69 – Insert the following new paragraphs, including the 
reference to new footnote number 60a, after the first full paragraph: 

Recently, two courts have interpreted appropriation restrictions to 
avoid repeal by implication: City of Chicago v. Department of the 
Treasury, 384 F.3d 429 (7th Cir. 2004), and City of New York v. Beretta 
U.S.A. Corp., 222 F.R.D. 51 (E.D. N.Y. 2004). In the first case, the 
City of Chicago had sued the former Bureau of Alcohol, Tobacco, and 
Firearms under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, 
to obtain access to certain information from the agency’s firearms 
databases. The Court of Appeals for the Seventh Circuit held that the 
information was not exempt from disclosure under FOIA. City of Chicago 
v. Department of the Treasury, 287 F.3d 628 (7th Cir. 2002). The agency 
then appealed to the Supreme Court. While the appeal was pending, 
Congress enacted appropriations language for fiscal years 2003 and 2004 
providing that no funds shall be available or used to take any action 
under FOIA or otherwise that would publicly disclose the information. 
Pub. L. No. 108-7, div. J, title VI, § 644, 117 Stat. 11, 473 (Feb. 20, 
2003); Pub. L. No. 108-199, div. B, title I, 118 Stat. 3, 53 (Jan. 23, 
2004). The Supreme Court remanded the case to the Seventh Circuit to 
consider the impact, if any, of the appropriations language. Department 
of Justice v. City of Chicago, 537 U.S.
1229 (2003). In City of Chicago v. Department of the Treasury,
384 F.3d 429 (7th Cir. 2004), the court decided that the appropriations 
language had essentially no impact on the case. Citing a number of 
cases on the rule disfavoring implied repeals (particularly by 
appropriations act), the court held that the appropriations rider did 
not repeal FOIA or otherwise affect the agency’s legal obligation to 
release the information in question. The court concluded that “FOIA 
deals only peripherally with the allocation of funds—its main focus is 
to ensure agency information is made available to the public.” Id. at 
435. In this regard, the court repeatedly emphasized the minimal costs 
entailed in complying with the access request and concluded that “there 
is no ‘irreconcilable conflict’ between prohibiting the use of federal 
funds to process the request and granting the City access to the 
databases.” Id. After the 2004 decision, the agency filed a request for 
rehearing. Before the rehearing, Congress passed the Consolidated 
Appropriations Act of 2005 specifying that no funds be used to provide 
the data sought by the City, and further provided that the data be 
“immune from judicial process.” Pub. L. No. 108-447, div. B, title I, 
118 Stat. 2809, 2859 (Dec. 8, 2004). The court determined that this 
statutory language showed that Congress’s “obvious intention...was to 
cut off all access to the databases for any reason.” City of Chicago v. 
Department of the Treasury, 423 F.3d 777, 780 (7th Cir. 2005). 

The second case, City of New York v. Beretta U.S.A. Corp., 222 F.R.D. 
51 (E.D. N.Y. 2004), concerned access to firearms information that was 
subject to the same appropriations language for fiscal year 2004 in 
Public Law 108-199.[Footnote 60a] In this case, the demand for access 
took the form of subpoenas seeking discovery of the records in a tort 
suit by the City of New York and others against firearms manufacturers 
and distributors. The court in City of New York denied the agency’s 
motion to quash the subpoenas, which was based largely on the 
appropriations language. The court held that the appropriations 
language, which prohibited public disclosure, was inapplicable by its 
terms since discovery could be accomplished under a protective order 
that would keep the records confidential. City of New York, 222 F.R.D. 
at 56–65. 

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[60a] The litigation did not address whether the provisions were to be 
read as temporary or permanent. B-309704, Aug. 28, 2007, at 2 n.1. 

D. Statutory Interpretation: Determining Congressional Intent: 

1. The Goal of Statutory Construction: 

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Of course, there are those rare occasions when two statutory provisions 
are just irreconcilable. Even then there is a statutory construction 
principle called the “last-in-time” rule. For example, in B-303268, 
Jan. 3, 2005, at issue was what Congress intended in enacting a 
“notwithstanding” clause in the State Department’s fiscal year 2004 
appropriations. Congress had appropriated a lump sum of $35 million to 
the Economic Support Fund for assistance to Lebanon, available 
“notwithstanding any other provision of law.” Pub. L. No. 108-7, div. 
E, title V, § 534(a), 117 Stat. 11, 193 (Feb. 20, 2003). Five months 
earlier, in the 2003 Foreign Relations Authorization Act, Congress had 
included a provision, “notwithstanding any other provision of law,” 
restricting from obligation $10 million “made available in fiscal year 
2003 or any subsequent fiscal year” to the Economic Support Fund for 
assistance to Lebanon until the President submitted certain findings to 
Congress. Pub. L. No. 107-228, § 1224, 116 Stat. 1350, 1432 (Sept. 30, 
2002). The two “notwithstanding” clauses presented an irreconcilable 
conflict that GAO resolved by applying the “last-in-time” rule of 
construction—that is, we presume that the later-enacted statute 
represents Congress’s current expression of the law (i.e., Congress’s 
“last word”). Consequently, the “notwithstanding” clause of the 
appropriation act superseded the authorization act’s “notwithstanding” 
clause. However, in this case the appropriation act’s “notwithstanding” 
clause had effect only for fiscal year 2004. The authorization act’s 
clause was permanent law. Thus the appropriation act’s clause 
superseded the authorization act’s clause only for fiscal year 2004, 
unless similar appropriation act provisions were enacted for subsequent 
fiscal years. 

2. The “Plain Meaning” Rule: 

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By far the most important rule of statutory construction is this: You 
start with the language of the statute. Countless judicial decisions 
reiterate this rule. E.g., BedRoc Limited, LLC v. United States, 541 
U.S. 176 (2004); Lamie v. United States Trustee, 540 U.S. 526 (2004); 
Hartford Underwriters Insurance Co. v. Union Planters Bank, N.A.,
530 U.S. 1 (2000); Robinson v. Shell Oil Co., 519 U.S. 337 (1997); 
Connecticut National Bank v. Germain, 503 U.S. 249 (1992); Mallard v. 
United States District Court for the Southern District of Iowa, 490 
U.S. 296, 300 (1989). The primary vehicle for Congress to express its 
intent is the words it enacts into law. As stated in an early Supreme 
Court decision: “The law as it passed is the will of the majority of 
both houses, and the only mode in which that will is spoken is in the 
act itself; and we must gather their intention from the language there 
used.” Aldridge v. Williams, 44 U.S. (3 How.) 9, 24 (1845). A somewhat 
better known statement is from United States v. American Trucking 
Ass’ns, 310 U.S. 534, 543 (1940): “There is, of course, no more 
persuasive evidence of the purpose of a statute than the words by which 
the legislature undertook to give expression to its wishes.” 

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Whether the language of the statute is sufficiently ambiguous that a 
court should look beyond it to legislative history can be difficult to 
discern. In Zuni Public School District No. 89 v. Department of 
Education, ___ U.S.____, 127 S. Ct. 1534 (2007), the Court was faced 
with interpreting statutory language setting out a formula to be used 
by the Department of Education in connection with state funding of 
school districts. In a 5–4 decision, a majority of the court found the 
language in the statute to be sufficiently ambiguous to permit it to 
consider other indicators of congressional intent. The majority 
acknowledged that if the intent of Congress was clearly and 
unambiguously expressed by the statutory language, that would be the 
end of the Court’s analysis. 

3. The Limits of Literalism: Errors in Statutes and “Absurd 

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The Supreme Court’s recent decision in Lamie v. United States Trustee, 
540 U.S. 526 (2004), contained an interesting discussion of drafting 
errors and what to do about them. For reasons that are described at 
length in the opinion but need not be repeated here, the Court found an 
“apparent legislative drafting error” in a 1994 statute. Lamie, 540 
U.S. at 530. Nevertheless, the Court held that the amended language 
must be applied according to its plain terms. While the Court in Lamie 
acknowledged that the amended statute was awkward and ungrammatical, 
and that a literal reading rendered some words superfluous and could 
produce harsh results, none of these defects made the language 
ambiguous. Id. at 534–36. The Court determined that these flaws did not 
“lead to absurd results requiring us to treat the text as if it were 
ambiguous.” Id. at 536. The Court also drew a distinction between 
construing a statute in a way that, in effect, added missing words as 
opposed to ignoring words that might have been included by mistake. Id. 
at 538. 

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Recent Supreme Court decisions likewise reinforce the need for caution 
when it comes to departing from statutory language on the basis of its 
apparent “absurd consequences.” See Lamie v. United States Trustee, 540 
U.S. 526, 537–38 (2004) (“harsh” consequences are not the equivalent of 
absurd consequences); Barnhart v. Thomas, 540 U.S. 20, 28–29 (2003) 
(“undesirable” consequences are not the equivalent of absurd 

4. Statutory Aids to Construction: 

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Occasionally, the courts use the Dictionary Act to assist in resolving 
questions of interpretation. E.g., Gonzalez v. Secretary for the 
Department of Corrections, 366 F.3d 1253, 1263–64 (11th Cir. 2004) 
(applying the Dictionary Act’s general rule that “words importing the 
singular include and apply to several persons, parties, or things,” 1 
U.S.C. § 1); United States v. Reid, 206 F. Supp. 2d 132 (D. Mass. 2002) 
(an aircraft is not a “vehicle” for purposes of the USA PATRIOT Act); 
United States v. Belgarde, 148 F. Supp. 2d 1104 (D. Mont.), aff’d, 300 
F.3d 1177 (9th Cir. 2002) (a government agency, which the defendant was 
charged with burglarizing, is not a “person” for purposes of the Major 
Crimes Act). Courts also hold on occasion that the Dictionary Act does 
not apply. See Rowland v. California Men’s Colony, 506 U.S. 194 (1993) 
(context refutes application of the title 1, United States Code, 
definition of “person”); United States v. Ekanem, 383 F.3d 40
(2nd Cir. 2004) (“victim” as used in the Mandatory Victims Restitution 
Act (MVRA) is not limited by the default definition of “person” in the 
Dictionary Act since that definition does not apply where context of 
MVRA indicates otherwise). 

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Congress regularly passes laws that “codify,” or enact into positive 
law, the contents of various titles of the United States Code. The 
effect of such codifications is to make that United States Code title 
the official evidence of the statutory language it contains.74 
Codification acts typically delete obsolete provisions and make other 
technical and clarifying changes to the statutes they codify. 
Codification acts usually include language stating that they should not 
be construed as making substantive changes in the laws they replace. 
See, e.g., Pub. L. No. 97-258, § 4(a), 96 Stat. 877, 1067 (1982) 
(codifying title 31 of the United States Code). See also Scheidler v. 
National Organization for Women, 547 U.S. 9 (2006); 69 Comp. Gen. 691 
(1990).[Footnote 75] 

5. Canons of Statutory Construction: 

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Like all other courts, the Supreme Court follows this venerable canon. 
E.g., United States v. Cleveland Indians Baseball Co., 532 U.S. 200, 
217 (2001) (“it is, of course, true that statutory construction ‘is a 
holistic endeavor’ and that the meaning of a provision is ‘clarified by 
the remainder of the statutory scheme’”); FDA v. Brown & Williamson 
Tobacco Corp., 529 U.S. 120 (2000); Gustafson v. Alloyd Co., Inc., 513 
U.S. 561, 569 (1995) (“the Act is to be interpreted as a symmetrical 
and coherent regulatory scheme, one in which the operative words have a 
consistent meaning throughout”); Brown v. Gardner, 513 U.S. 115, 118 
(1994) (“ambiguity is a creature not of definitional possibilities but 
of statutory context”). See also Hibbs v. Winn, 542 U.S. 88, 101 (2004) 
(courts should construe a statute so that “effect is given to all its 
provisions, so that no part will be inoperative or superfluous, void or 
insignificant”); General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 
581, 598 (2004) (courts should not ignore “the cardinal rule that 
statutory language must be read in context since a phrase gathers 
meaning from the words around it”). 

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revise the second bullet as follows: 

* B-302335, Jan. 15, 2004: When read as a whole, the Emergency Steel 
Loan Guarantee Act of 1999, 15 U.S.C. § 1841 note, clearly appropriated 
loan guarantee programs funds to the Loan Guarantee Board and not the 
Department of Commerce. 

* B-303961, Dec. 6, 2004: Despite use of the phrase “notwithstanding 
any other provision of law” in a provision of an appropriation act, 
nothing in the statute read as a whole or its legislative history 
suggested an intended waiver of the Antideficiency Act. See also B-
290125.2, B-290125.3, Dec. 18, 2002 (redacted) (viewed in isolation, 
the phrase “notwithstanding any other provision of law” might be read 
as exempting a procurement from GAO’s bid protest jurisdiction under 
the Competition in Contracting Act; however, when the statute is read 
as a whole, as it must be, it does not exempt the procurement from the 

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* Hibbs v. Winn, 542 U.S. 88, 101 (2004): “The rule against 
superfluities complements the principle that courts are to interpret 
the words of a statute in context.” 

* Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461, 
489 n.13 (2004): A statute should be construed so that, “if it can be 
prevented, no clause, sentence, or word shall be superfluous, void, or 

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Although frequently invoked, the no surplusage canon is less absolute 
than the “whole statute” canon. One important caveat, previously 
discussed, is that words in a statute will be treated as surplus and 
disregarded if they were included in error. E.g., Chickasaw Nation v. 
United States, 534 U.S. 84, 94 (2001) (emphasis in original): “The 
canon requiring a court to give effect to each word ‘if possible’ is 
sometimes offset by the canon that permits a court to reject words ‘as 
surplusage’ if ‘inadvertently inserted or if repugnant to the rest of 
the statute.’” Citing Chickasaw Nation, the Court also recently 
observed that the canon of avoiding surplusage will not be invoked to 
create ambiguity in a statute that has a plain meaning if the language 
in question is disregarded. Lamie v. United States Trustee, 540 U.S. 
526, 536 (2004). 

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When words used in a statute are not specifically defined, they are 
generally given their “plain” or ordinary meaning rather than some 
obscure usage. E.g., Engine Manufacturers Ass’n v. South Coast Air 
Quality Management District, 541 U.S. 246 (2004); BedRoc Limited, LLC 
v. United States, 541 U.S. 176 (2004); Asgrow Seed Co. v. Winterboer, 
513 U.S. 179, 187 (1995); Federal Deposit Insurance Corp. v. Meyer, 
510 U.S. 471, 476 (1994); Mallard v. United States, 490 U.S. 296, 301 
(1989); B-261193, Aug. 25, 1995; 70 Comp. Gen. 705 (1991); 38 Comp. 
Gen. 812 (1959). 

One commonsense way to determine the plain meaning of a word is to 
consult a dictionary. E.g., Mallard, 490 U.S. at 301; American Mining 
Congress v. EPA, 824 F.2d 1177, 1183–84 & n. 7 (D.C. Cir. 1987). Thus, 
the Comptroller General relied on the dictionary in B-251189, Apr. 8, 
1993, to hold that business suits did not constitute “uniforms,” which 
would have permitted the use of appropriated funds for their purchase. 
See also B-302973, Oct. 6, 2004; B-261522, Sept. 29, 1995. 

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Several different canons of construction revolve around these seemingly 
straightforward notions. Before discussing some of them, it is 
important to note once more that these canons, like most others, may or 
may not make sense to apply in particular settings. Indeed, the basic 
canon that the same words have the same meaning in a statute is itself 
subject to exceptions. In Cleveland Indians Baseball Club, the Court 
cautioned: “Although we generally presume that identical words used in 
different parts of the same act are intended to have the same meaning, 
… the presumption is not rigid, and the meaning [of the same words] 
well may vary with the purposes of the law.” Cleveland Indians Baseball 
Club, 532 U.S. at 213 (citations and quotation marks omitted). To drive 
the point home, the Court quoted the following admonition from a law 
review article: 

“The tendency to assume that a word which appears in two or more legal 
rules, and so in connection with more than one purpose, has and should 
have precisely the same scope in all of them … has all the tenacity of 
original sin and must constantly be guarded against.” 

Id. See also General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 
581, 594–96 and fn. 8 (2004) (quoting the same law review passage, 
which it notes “has become a staple of our opinions”). Of course, all 
bets are off if the statute clearly uses the same word differently in 
different places. See Robinson v. Shell Oil Co., 519 U.S. 337, 343 
(1997) (“once it is established that the term ‘employees’ includes 
former employees in some sections, but not in others, the term standing 
alone is necessarily ambiguous”). 

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In 2007, the Court applied the exception described in the Cleveland 
Indians Baseball Club case in Environmental Defense v. Duke Energy 
Corp., ___ U.S. ___, 127 S. Ct. 1423 (2007) (upholding differing 
regulatory definitions of the same statutory term contained in two 
sections of the Clean Air Act). Rejecting the lower court’s holding 
that there is an “effectively irrebuttable” presumption that the same 
defined term in different provisions of the same statute must be 
“interpreted identically,” the Court pointed out simply that “context 
counts.” Id. at 1433. 

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Likewise, a statute’s grammatical structure is useful but not 
conclusive. Lamie v. United States Trustee, 540 U.S. 526, 534–35 (2004) 
(the mere fact that a statute is awkwardly worded or even ungrammatical 
does not make it ambiguous). Nevertheless, the Court sometimes gives 
significant weight to the grammatical structure of a statute. For 
example, in Barnhart v. Thomas, 540 U.S. 20, 26 (2003), the Court 
rejected the lower court’s construction of a statute in part because it 
violated the grammatical “rule of the last antecedent.” Also, in 
Arcadia, Ohio v. Ohio Power Co., 498 U.S. 73 (1991), the Court devoted 
considerable attention to the placement of the word “or” in a series of 
clauses. It questioned the interpretation proffered by one of the 
parties that would have given the language an awkward effect, noting: 
“In casual conversation, perhaps, such absentminded duplication and 
omission are possible, but Congress is not presumed to draft its laws 
that way.” Arcadia, 498 U.S. at 79. By contrast, in Nobelman v. 
American Savings Bank, 508 U.S. 324, 330 (1993), the Court rejected an 
interpretation, noting: “We acknowledge that this reading of the clause 
is quite sensible as a matter of grammar. But it is not compelled.” 

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The same considerations apply to a statute’s popular name and to the 
headings, or titles, of particular sections of the statute. See Intel 
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 242 (2004) (“A 
statute’s caption...cannot undo or limit its text’s plain meaning”). 
See also Immigration & Naturalization Service v. St. Cyr, 533 U.S. 289, 
308–09 (2001); Pennsylvania Department of Corrections v. Yeskey,
524 U.S. 206, 212 (1998). In St. Cyr, the Supreme Court concluded that 
a section entitled “Elimination of Custody Review by Habeas Corpus” did 
not, in fact, eliminate habeas corpus jurisdiction. It found that the 
substantive terms of the section were less definitive than the title. 
See also McConnell v. Federal Election Commission, 540 U.S. 93, 180 

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Preambles. Federal statutes often include an introductory “preamble” or 
“purpose” section before the substantive provisions in which Congress 
sets forth findings, purposes, or policies that prompted it to adopt 
the legislation. Such preambles have no legally binding effect. 
However, they may provide indications of congressional intent 
underlying the law. Sutherland states with respect to preambles: 

“The settled principle of law is that the preamble cannot control the 
enacting part of the statute in cases where the enacting part is 
expressed in clear, unambiguous terms. In case any doubt arises in the 
enacted part, the preamble may be resorted to to help discover the 
intention of the law maker.” 

2A Sutherland, § 47:04 at 221–22.[Footnote 80] For a recent example in 
which the Court used statutory findings to inform its interpretation of 
congressional intent, see General Dynamics Land Systems, Inc. v Cline, 
540 U.S. 581, 589–91 (2004). 

6. Legislative History: 

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[81] The majority opinion in Association of American Physicians & 
Surgeons placed heavy reliance on Public Citizen, noting that “the 
Court adopted, we think it is fair to say, an extremely strained 
construction of the word ‘utilized’ in order to avoid the 
constitutional question.” Association of American Physicians & 
Surgeons, 997 F.2d at 906. Both Public Citizen and Association of 
American Physicians & Surgeons drew strongly worded concurring opinions 
along the same lines. The concurring opinions maintained that FACA 
clearly applied by its plain terms to the respective groups, but that 
its application was unconstitutional as so applied. The District of 
Columbia Circuit Court of Appeals clarified its holding in American 
Physicians & Surgeons in 2005. In re Cheney, 406 F.3d 723 (D.C. Cir. 
2005). There, in order to avoid “severe separation-of-powers problems” 
in applying FACA on the basis that private parties were involved with a 
committee in the Executive Office of the President, the court held that 
for purposes of FACA “a committee is composed wholly of federal 
officials if the President has given no one other than a federal 
official a vote in or, if the committee acts by consensus, a veto over 
the committee’s decisions.” Id. at 728. 

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The use becomes improper when the line is crossed from using 
legislative history to resolve things that are not clear in the 
statutory language to using it to rewrite the statute. E.g., Shannon v. 
United States, 512 U.S. 573, 583 (1994) (declining to give effect to “a 
single passage of legislative history that is no way anchored in the 
text of the statute”); Ratzlaf v. United States, 510 U.S. 135, 147–48 
(1994) (declining to “resort to legislative history to cloud a 
statutory text that is clear”); Brill v. Countrywide Home Loans, Inc., 
427 F.3d 446, 448 (7th Cir. 2005) (noting that “when the legislative 
history stands by itself, as a naked expression of ‘intent’ unconnected 
to any enacted text, it has no more force than an opinion poll of 
legislators—less, really, as it speaks for fewer”). The Comptroller 
General put it this way: 

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However, material in committee reports, even a conference report, will 
ordinarily not be used to controvert clear statutory language. 
Squillacote, 739 F.2d at 1218; Hart v. United States, 585 F.2d 1025 
(Ct. Cl. 1978); B-278121, Nov. 7, 1997; B-33911, B-62187, July 15, 
1948. Also, it will not be used to add requirements that Congress did 
not include in the statute itself. For example, where Congress 
appropriates lump sum amounts without statutorily restricting the use 
of those funds, “a clear inference arises that it does not intend to 
impose legally binding restrictions, and indicia in committee reports 
and other legislative history as to how the funds should or are 
expected to be spent do not establish any legal requirements” on the 
agency. 55 Comp. Gen. 307, 319 (1975); see also Hein v. Freedom From 
Religion Foundation, Inc., ___ U.S. ___, 127 S. Ct. 2553, 2568 n.7 
(2007); Lincoln v. Vigil, 508 U.S. 182, 192 (1993). Also, such material 
is not entitled to any weight as legislative history if the statement 
in the report is unrelated to any language in the act itself. Abrego 
Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir. 2006); Brill v. 
Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005). 

An interesting example of the weight accorded report language which 
alters the plain meaning and effect of the statutory language is in 
Arlington Central School District Board of Education v. Murphy, 548 
U.S. ___, 126 S. Ct. 2455 (2006). In this case the issue was whether a 
provision of the Individuals with Disabilities Education Act (IDEA) 
authorizing the award of attorney fees and costs to parents who 
prevailed in lawsuits under the act extended to costs incurred for 
experts. The Court approached the issue by noting that the conditions 
Congress attaches to the receipt of federal funds by states are 
contractual in nature and must therefore be expressed “unambiguously” 
in order to give states adequate notice of what they are accepting. 
Arlington Central, 126 S. Ct. at 2459. It went on to hold that the IDEA 
statute did not clearly indicate that expert fees were covered by its 
fee-shifting provision. On the contrary, the Court concluded that the 
language of the fee-shifting provision and other IDEA provisions 
strongly suggested that expert fees were not covered. The Court was 
influenced by the judicial rule that the term “costs” in fee-shifting 
provisions is a term of art that generally does not include expert 
fees. Id. The most striking aspect of the Court’s opinion was its 
rejection of legislative history from the conference report that 
explicitly stated the intent to include expert costs in IDEA’s fee-
shifting provision. The conference report, quoted in the opinion at 126 
S. Ct. 2463, could not have been clearer: “The conferees intend that 
the term ‘attorneys’ fees as part of the costs’ include reasonable 
expenses and fees of expert witnesses and the reasonable costs of any 
test or evaluation which is found to be necessary for the preparation 
of” Nevertheless, the Court concluded: 

“Whatever weight this legislative history would merit in another 
context, it is not sufficient here. Putting the legislative history 
aside, we see virtually no support for respondents’ position. Under 
these circumstances, where everything other than the legislative 
history overwhelmingly suggests that expert fees may not be recovered, 
the legislative history is simply not enough.” 

Id. Thus, the conference report statement could not make up for the 
absence of any statutory language making expert fees reimbursable. Cf. 
B-307767, Nov. 13, 2006 (floor statement is not entitled to weight as 
legislative history when the statute is clear on its face since the 
statement provides an individual member’s views and does not 
necessarily represent the meaning and purpose of the lawmaking body 

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Statements by the sponsor of a bill are also entitled to somewhat more 
weight. E.g., Schwegmann Brothers v. Calvert Distillers Corp., 341 U.S. 
384, 394–95 (1951); Ex Parte Kawato, 317 U.S. 69, 77 (1942). However, 
they are not controlling. General Dynamics Land Systems, Inc. v. Cline, 
540 U.S. 581, 597–99 (2004); Chrysler Corp. v. Brown, 441 U.S. 281, 311 

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GAO naturally follows the principle that post-enactment statements do 
not constitute legislative history. E.g., 72 Comp. Gen. 317 (1993); 54 
Comp. Gen. 819, 822 (1975). Likewise, the Office of Legal Counsel has 
virtually conceded that presidential signing statements fall within the 
realm of post-enactment statements that carry no weight as legislative 
history. See 17 Op. Off. Legal Counsel 131 (1993).85 In 2007, GAO 
examined how the federal courts have treated signing statements in 
their published decisions. A search of all federal case law since 1945 
found fewer than 140 cases that cited presidential signing statements, 
most commonly to supplement legislative history such as committee 
reports. Courts also have cited signing statements to establish the 
date of signing, provide a short summary of the statute, explain the 
purpose of the statute, or describe the underlying policy behind the 
statute. GAO concluded that, overall, federal courts infrequently cite 
or refer to signing statements in their published opinions. B-308603, 
June 18, 2007, Enclosure IV. See also B-309928, Dec. 20, 2007, for 
additional discussion on signing statements. 

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[85] While this opinion stopped short of attempting “finally to decide” 
the matter, it presented several powerful arguments against the 
validity of signing statements as legislative history but no arguments 
in favor of their use for this purpose. On June 27, 2006, the Senate 
Judiciary Committee held a hearing on the subject of presidential 
signing statements. Background on the hearing, including witness 
statements, can be found at [hyperlink,] (last visited
Feb. 8, 2008). 

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* Doe v. Chao, 540 U.S. 614, 621–23 (2004): Congress deleted from the 
bill language that would have provided for the type of damage award 
sought by the petitioner. 

See also F. Hoffman-La Roche Ltd v. Empagran S.A., 542 U.S. 155 (2004); 
Resolution Trust Corp. v. Gallagher, 10 F.3d 416 423 (7th Cir. 1993); 
Davis v. United States, 46 Fed. Cl. 421 (2000). 

7. Presumptions and “Clear Statement” Rules: 

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There is a strong presumption against waiver of the federal 
government’s immunity from suit. The courts have repeatedly held that 
waivers of sovereign immunity must be “unequivocally expressed.” E.g., 
United States v. Nordic Village, Inc., 503 U.S. 30 (1992); Marathon Oil 
Co. v. United States, 374 F.3d 1123, 1127 (Fed. Cir. 2004), cert. 
denied, 544 U.S. 1031 (2005); Shoshone Indian Tribe of the Wind River 
Reservation, Wyoming v. United States, 51 Fed. Cl. 60 (2001), aff’d,
364 F.3d 1339 (Fed. Cir. 2004), cert. denied, 544 U.S. 973 (2005). 
Legislative history does not help for this purpose. The relevant 
statutory language in Nordic Village was ambiguous and could have been 
read, evidently with the support of the legislative history, to impose 
monetary liability on the United States. The Court rejected such a 
reading, applying instead the same approach as described above in its 
federalism jurisprudence: 

“Legislative history has no bearing on the ambiguity point. As in the 
Eleventh Amendment context, see Hoffman, supra, … the ‘unequivocal 
expression’ of elimination of sovereign immunity that we insist upon is 
an expression in statutory text. If clarity does not exist there, it 
cannot be supplied by a committee report.” 

Nordic Village, 503 U.S. at 37. 

[End of chapter 2] 

Chapter 3: Agency Regulations and Administrative Discretion: 

A. Agency Regulations: 

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As a conceptual starting point, agency regulations fall into three 
broad categories. First, every agency head has the authority, largely 
inherent but also authorized generally by 5 U.S.C. § 301,1 to issue 
regulations to govern the internal affairs of the agency. Regulations 
in this category may include such subjects as conflicts of interest, 
employee travel, and delegations to organizational components. This 
statute is nothing more than a grant of authority for what are called 
“housekeeping” regulations. Chrysler Corp. v. Brown, 441 U.S. 281, 309 
(1979); Smith v. Cromer, 159 F.3d 875, 878 (4th Cir. 1998), cert. 
denied, 528 U.S. 826 (1999); NLRB v. Capitol Fish Co., 294 F.2d 868, 
875 (5th Cir. 1961). It confers “administrative power only.” United 
States v. George, 228 U.S. 14, 20 (1913); B-302582, Sept. 30, 2004; 
54 Comp. Gen. 624, 626 (1975). Thus, the statute merely grants agencies 
authority to issue regulations that govern their own internal affairs; 
it does not authorize rulemaking that creates substantive legal rights. 
Schism v. United States, 316 F.3d 1259, 1278–84 (Fed. Cir. 2002), cert. 
denied, 539 U.S. 910 (2003). 

1. The Administrative Procedure Act: 

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page 3-5 with the following paragraph: 

Richard J. Pierce, Jr., Administrative Law Treatise, § 7.4 at 442 (4th 
ed. 2000) (citations omitted). Two decisions make clear that the courts 
will insist upon at least some ascertainable and coherent rationale: 
Northeast Maryland Waste Disposal Authority v. EPA, 358 F.3d 936, 948 
(D.C. Cir. 2004) (the court remanded a rule to the agency because it 
was “frankly, stunned to find” that the agency had provided “not one 
word in the proposed or final rule” (emphasis in original) to explain a 
key aspect of its rule), and International Union, United Mine Workers 
of America v. Department of Labor, 358 F.3d 40, 45 (D.C. Cir. 2004) 
(finding that the agency’s stated rationale to withdraw a proposed rule 
was disjointed and conclusory, the court returned the matter to the 
agency “so that it may either proceed with the...rulemaking or give a 
reasoned account of its decision not to do so”). 

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As a starting point, anything that falls within the definition of a 
“rule” in 5 U.S.C. § 551(4) and for which formal rulemaking is not 
required, is subject to the informal rulemaking procedures of 5 U.S.C. 
§ 553 unless exempt. This statement is not as encompassing as it may 
seem, since section 553 itself provides several very significant 
exemptions. These exemptions, according to a line of decisions by the 
U.S. Court of Appeals for the District of Columbia Circuit, will be 
“narrowly construed and only reluctantly countenanced.” Jifry v. 
Federal Aviation Administration, 370 F.3d 1174, 1179 (D.C. Cir. 2004), 
cert. denied, 543 U.S. 1146 (2005); Utility Solid Waste Activities 
Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001); Asiana Airlines v. 
Federal Aviation Administration, 134 F.3d 393, 396–97 (D.C. Cir. 1998); 
Tennessee Gas Pipeline Co. v. Federal Energy Regulatory Commission, 969 
F.2d 1141, 1144 (D.C. Cir. 1992); New Jersey Department of 
Environmental Protection v. EPA, 626 F.2d 1038, 1045 (D.C. Cir. 1980). 
[Footnote 8] Be that as it may, they appear in the statute and cannot 
be disregarded. For example, section 553 does not apply to matters 
“relating to agency management or personnel or to public property, 
loans, grants, benefits, or contracts.” 5 U.S.C. § 553(a)(2). 

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[8] In Utility Solid Waste Activities Group, 236 F.3d at 754–55, the 
court held that the “good cause” exemption in section 553(b) does not 
allow an agency to forego notice and comment when correcting a 
technical error in a regulation. Likewise, the court held that agencies 
have no “inherent power” to correct such technical errors outside of 
the APA procedures. Id. at 752–54. The decision in Jifry provides an 
example of a case upholding an agency’s use of the good cause exemption 
based on emergency conditions involving potential security threats. 
Jifry, 370 F.3d at 1179. 

4. Waiver of Regulations: 

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Sometimes legislative regulations or the statutes they implement do 
explicitly authorize “waivers” in certain circumstances. Here, of 
course, the waiver authority is an integral part of the underlying 
statutory or regulatory scheme. Accordingly, courts give effect to such 
waiver provisions and, indeed, they may even hold that an agency’s 
failure to consider or permit waiver is an abuse of discretion. 
However, the courts usually accord considerable deference to agency 
decisions on whether or not to grant discretionary waivers. For 
illustrative cases, see BDPCS, Inc. v. FCC, 351 F.3d 1177 (D.C. Cir. 
2003); People of the State of New York & Public Service Commission of 
the State of New York v. FCC, 267 F.3d 91 (2nd Cir. 2001); BellSouth 
Corporation v. FCC, 162 F.3d 1215 (D.C. Cir. 1999); Rauenhorst v. 
United States Department of Transportation, 95 F.3d 715 (8th Cir. 

B. Agency Administrative Interpretations: 

1. Interpretation of Statutes: 

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In what is now recognized as one of the key cases in determining how 
much “deference” is due an agency interpretation, Chevron, Inc. v. 
Natural Resources Defense Council, 467 U.S. 837 (1984), the Court 
formulated its approach to deference in terms of two questions. The 
first question is “whether Congress has directly spoken to the precise 
question at issue.” Id. at 842. If it has, the agency must of course 
comply with clear congressional intent, and regulations to the contrary 
will be invalidated. Thus, before you ever get to questions of 
deference, it must first be determined that the regulation is not 
contrary to the statute, a question of delegated authority rather than 
deference. “If a court, employing traditional tools of statutory 
construction, ascertains that Congress had an intention on the precise 
question at issue, that intention is the law and must be given effect.” 
Id. at 843 n.9. An example is General Dynamics Land Systems, Inc.Cline, 
540 U.S. 581 (2004), in which the Court declined to give Chevron 
deference, or any lesser degree of deference, to an agency 
interpretation that it found to be “clearly wrong” as a matter of 
statutory construction, since the agency interpretation was contrary to 
the act’s text, structure, purpose, history, and relationship to other 
federal statutes. 

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insert new footnote number 30a as follows: 

When the agency’s interpretation is in the form of a regulation with 
the force and effect of law, the deference, as we have seen, is at its 
highest.[Footnote 30] The agency’s position is entitled to Chevron 
deference and should be upheld unless it is arbitrary or capricious. 
There should be no question of substitution of judgment.30a If the 
agency position can be said to be reasonable or to have a rational 
basis within the statutory grant of authority, it should stand, even 
though the reviewing body finds some other position preferable. See, 
e.g., Household Credit Services, Inc. v. Pfennig, 541 U.S. 232 (2004); 
Barnhart v. Thomas, 540 U.S. 20 (2003); Yellow Transportation, Inc. v. 
Michigan, 537 U.S. 36 (2002); Shalala v. Illinois Council on Long Term 
Care, Inc., 529 U.S. 1, 20–21 (2000); American Telephone & Telegraph 
Corp. v. Iowa Utility Board, 525 U.S. 366 (1999). Chevron deference is 
also given to authoritative agency positions in formal adjudication. 
See Immigration & Naturalization Service v. Aguirre-Aguirre, 526 U.S. 
415 (1999) (holding that a Bureau of Indian Affairs statutory 
interpretation developed in case-by-case formal adjudication should be 
accorded Chevron deference). For an extensive list of Supreme Court 
cases giving Chevron deference to agency statutory interpretations 
found in rulemaking or formal adjudication, see United States v. Mead 
Corp., 533 U.S. 218, 231 at n.12 (2001). 

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[30a] This is true even if the statute in question has been construed 
previously by a court, unless the court interpreted the statute 
according to “the unambiguous terms of the statute[, leaving] no room 
for agency discretion.” National Cable & Telecommunications Ass’n v. 
Brand X Internet Services, 545 U.S. 967 (2005). This result stems from 
the policy underlying Chevron deference, that is, the presumption that 
Congress, when it leaves ambiguity in a statute, means for the agency 
to resolve the ambiguity, exercising whatever degree of discretion the 
ambiguity allows. “It is for agencies, not courts, to fill statutory 
gaps.” Id. 

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* Evidence (or lack thereof) of congressional awareness of, and 
acquiescence in, the administrative position. United States v. American 
Trucking Ass’n, 310 U.S. 534, 549–50 (1940); Helvering v. Winmill, 305 
U.S. 79, 82–83 (1938); Norwegian Nitrogen Products Co. v. United 
States, 288 U.S. 294, 313–15 (1933); Collins v. United States, 946 F.2d 
864 (Fed. Cir. 1991); Davis v. Director, Office of Workers’ 
Compensation Programs, Department of Labor, 936 F.2d 1111, 1115–16 
(10th Cir. 1991); 41 Op. Att’y Gen. 57 (1950); B-114829-O.M., July 17, 
1974. Interestingly, in Coke v. Long Island Care At Home, Ltd., 376 
F.3d 118 (2nd Cir. 2004), the court acknowledged the potential 
relevance of congressional acquiescence to a 30-year-old regulation, 
noting that Congress had amended the applicable statute seven times 
over the life of the regulation without expressing any disapproval of 
it. However, the court ultimately rejected the congressional 
acquiescence argument—according to the court, “affectionately known as 
the ‘dog didn’t bark canon’”—and held the regulation invalid. Id. at 
130 and n.5. 

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More recent decisions further indicate that Chevron deference may 
extend beyond legislative rules and formal adjudications. Most notably, 
the Supreme Court observed in dicta in Barnhart v. Walton, 535 U.S. at 
222, that Mead Corp. “denied [any] suggestion” in Christensen that 
Chevron deference was limited to interpretations adopted through formal 
rulemaking. The Barnhart opinion went on to say that: 

“In this case, the interstitial nature of the legal question, the 
related expertise of the Agency, the importance of the question to the 
administration of the statute, the complexity of that administration, 
and the careful consideration the Agency has given the question over a 
long period of time all indicate that Chevron provides the appropriate 
legal lens through which to view the legality of the Agency 
interpretation here at issue.” 

Id. at 222.[Footnote 33] See also General Dynamics Land Systems, Inc. 
v. Cline, 540 U.S. 581 (2004); Edelman v. Lynchburg College, 535 U.S.
106, 114 (2002). Two additional decisions are instructive in terms of 
the limits of Chevron. In both cases the Court found that the issuances 
containing agency statutory interpretations were entitled to some 
weight, but not Chevron deference. Raymond B. Yates, M.D., P.C., Profit 
Sharing Plan v. Hendon, 541 U.S. 1 (agency advisory opinion); Alaska 
Department of Environmental Conservation v. EPA, 540 U.S. 461 (2004) 
(internal agency guidance memoranda). 

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Circuit court decisions have added to the confusion. See Coke v. Long 
Island Care at Home, Ltd., 376 F.3d 118 (2nd Cir. 2004) (the court 
found that a regulation was not entitled to Chevron deference, despite 
congressional acquiescence and even though the statute was ambiguous 
and the regulation was issued through notice and comment rulemaking, 
because evidence showed the agency intended the regulation to be only 
an “interpretive” as opposed to a “legislative” rule); Doe v. United 
States, 372 F.3d 1347, 1357–59 (Fed. Cir. 2004), cert. denied, 544 U.S. 
904 (2005) (court applied Chevron deference to an Office of Personnel 
Management regulation issued under general rulemaking authority); James 
v. Von Zemenszky, 301 F.3d 1364 (Fed. Cir. 2002) (ignoring Barnhart 
factors because the agency statutory interpretation contained in a 
directive and handbook “fell within the class of informal agency 
interpretations that do not ordinarily merit Chevron deference”); 
Federal Election Commission v. National Rifle Ass’n, 254 F.3d 173 (D.C. 
Cir. 2001) (holding that Federal Election Committee (FEC) advisory 
opinions are entitled to Chevron deference); Matz v. Household 
International Tax Reduction Investment Plan, 265 F.3d 572 (7th Cir. 
2001) (holding that an Internal Revenue Service (IRS) statutory 
interpretation in an amicus brief, supported by an IRS Revenue Ruling 
and agency manual, was not entitled to Chevron deference); Klinedinst 
v. Swift Investments, Inc., 260 F.3d 1251 (11th Cir. 2001) (holding 
that a Department of Labor handbook was not due Chevron deference); 
TeamBank v. McClure, 279 F.3d 614 (8th Cir. 2002) (holding that Office 
of the Controller of the Currency informal adjudications are due 
Chevron deference); In re Sealed Case, 223 F.3d 775 (D.C. Cir. 2000) 
(holding that FEC’s probable cause determinations are entitled to 
Chevron deference). As Professor Pierce notes: 

“After Mead, it is possible to know only that legislative rules and 
formal adjudications are always entitled to Chevron deference, while 
less formal pronouncements like interpretative rules and informal 
adjudications may or may not be entitled to Chevron deference. The 
deference due a less formal pronouncement seems to depend on the results
of judicial application of an apparently open-ended list of factors 
that arguably qualify as ‘other indication[s] of a comparable 
congressional intent’ to give a particular type of agency pronouncement 
the force of law.”[Footnote 34] 

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The deference principle does not apply to an agency’s interpretation of 
a statute that is not part of its program or enabling legislation or is 
a statute of general applicability. See Adams v. SEC, 287 F.3d 183 
(D.C. Cir. 2002); Contractor’s Sand & Gravel v. Federal Mine Safety & 
Health Commission, 199 F.3d 1335 (D.C. Cir. 2000); Association of 
Civilian Technicians v. Federal Labor Relations Authority, 200 F.3d 590
(9th Cir. 2000). In “split-jurisdiction” situations, where multiple 
agencies share specific statutory responsibility, courts have 
determined that Chevron deference is due to the primary executive 
branch enforcer and the agency accountable for overall administration 
of the statutory scheme. See Martin v. Occupational Safety and Health 
Review Commission, 499 U.S. 144 (1991); Collins v. National 
Transportation Safety Board, 351 F.3d 1246 (D.C. Cir. 2003). 

2.Interpretation of Agency’s Own Regulations: 

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top of the page: 

Recent cases according Seminole Rock deference to agency 
interpretations of their regulations include: Entergy Services, Inc. v. 
Federal Energy Regulatory Commission, 375 F.3d 1204, 1209 (D.C. Cir. 
2004); Castlewood Products, L.L.C. v. Norton, 365 F.3d 1076, 1079 (D.C. 
Cir. 2004); In re Sullivan, 362 F.3d 1324, 1328 (Fed. Cir. 2004). In 
WHX Corp. v. SEC, 362 F.3d 854, 860 (D.C. Cir. 2004), the court did not 
defer to an agency interpretation because the interpretation rested 
entirely on staff advice and there was no formal agency precedent or 
official interpretative guideline on point. 

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Recently the Court held than an agency’s interpretation of its own 
regulation is entitled to Auer deference only when the regulation 
interpreted is itself a product of the agency’s expertise and authority 
in a given area. In Gonzales v. Oregon, 546 U.S. 243 (2006), the Court 
examined an interpretive rule issued by the Attorney General, which 
stated that assisting suicide was not a “legitimate medical purpose” 
for which doctors could prescribe drugs, and doctors doing so would 
violate the Controlled Substance Act (CSA). Id. at 254. The Attorney 
General argued that the rule was entitled to Auer deference because it 
interpreted the term “legitimate medical purpose” as that term was used 
in a 1971 regulation issued by the Attorney General under the CSA. 

However, the Court found Auer deference unwarranted, because rather 
than reflecting the Attorney General’s deliberation and imprimatur, the 
1971 regulation merely mimicked the language of the CSA. The Court 

“In Auer, the underlying regulations gave specificity to a statutory 
scheme...and reflected the considerable experience and expertise the
Department of Labor had acquired over time with respect to the 
complexities of the [statutory scheme]. Here, on the other hand, the 
underlying regulation does little more than restate the terms of the 
statute itself. The language the Interpretive Rule addresses comes from 
Congress, not the Attorney General, and the near-equivalence of the 
statute and regulation belies the Government’s argument for Auer 

Gonzales, 546 U.S. at 256–57. 

In contrast to some of the more muddled deference cases discussed 
previously, Gonzales draws a bright line when it comes to an agency’s 
interpretation of its own regulation. “An agency does not acquire 
special authority to interpret its own words when, instead of using its 
expertise and experience to formulate a regulation, it has elected 
merely to paraphrase the statutory language.” Id. at 257. 

C. Administrative Discretion: 

1. Introduction" 

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Under the Administrative Procedure Act (APA), action that is “committed 
to agency discretion by law” is not subject to judicial review. 5 
U.S.C. § 701(a)(2). As the Supreme Court has pointed out, this is a 
“very narrow exception” applicable in “rare instances” where, quoting 
from the APA’s legislative history, “statutes are drawn in such broad 
terms that in a given case there is no law to apply.” Citizens to 
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971). As 
noted, the “no law to apply” exception is uncommon, and most exercises 
of discretion will be found reviewable at least to some extent.37 See 
Raymond Proffitt Foundation v. Corps of Engineers, 343 F.3d 199, 207 
(3rd Cir. 2003); City of Los Angeles v. Department of Commerce, 307 
F.3d 859 (9th Cir. 2002); Drake v. Federal Aviation Administration, 291 
F.3d 59 (D.C. Cir. 2002), cert. denied, 537 U.S. 1193 (2003); Fox 
Television Stations, Inc. v. FCC, 280 F.3d 1027 (D.C. Cir. 2002); 
Diebold v. United States, 947 F.2d 787 (6th Cir. 1991). 

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[37] However, agency inaction in declining to initiate enforcement or 
other regulatory action is subject to “a presumption of 
unreviewability,” although that presumption is rebuttable. Heckler v. 
Chaney, 470 U.S. 821 (1985). Another obvious exception is if a statute 
explicitly precludes judicial review. See Jordan Hospital, Inc. v. 
Shalala, 276 F.3d 72 (1st Cir.), cert. denied, 537 U.S. 812 (2002); 
National Coalition to Save Our Mall v. Norton, 269 F.3d 1092 (D.C. Cir. 
2001), cert. denied, 537 U.S. 813 (2002) (construction of World War II 
memorial); Ismailov v. Reno, 263 F.3d 851 (8th Cir. 2001) (refusal to 
extend deadline for asylum application). See also Ohio Public Interest 
Research Group, Inc. v. Whitman, 386 F.3d 792 (6th Cir. 2004); Godwin 
v. Secretary of Housing and Urban Development, 356 F.3d 310 (D.C. Cir. 

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Even where the APA does not flatly preclude judicial review, the courts 
will entertain a lawsuit under the Act only if it involves an “agency 
action” that is subject to redress under the Act. In Norton v. Southern 
Utah Wilderness Alliance, 542 U.S. 55 (2004), the Court rejected a suit 
under the APA to compel the Interior Department to regulate the use of 
off-road vehicles on certain federal wilderness lands. The Court 
concluded that there was no legal mandate requiring the agency to take 
such action. The Court described the jurisdictional parameters of the 
APA as follows: 

“The APA authorizes suit by ‘a person suffering legal wrong because of 
agency action, or adversely affected or aggrieved by agency action 
within the meaning of a relevant statute.’ 5 U.S.C. § 702. Where no 
other statute provides a private right of action, the ‘agency action’ 
complained of must be ‘final agency action.’ § 704 (emphasis added). 
‘Agency action’ is defined in § 551(13) to include ‘the whole or a part 
of an agency rule, order, license, sanction, relief, or the equivalent
or denial thereof, or failure to act.’(Emphasis added.) The APA 
provides relief for a failure to act in §706(1): ‘The reviewing court 
shall...compel agency action unlawfully withheld or unreasonably 

“Sections 702, 704, and 706(1) all insist upon an ‘agency action,’ 
either as the action complained of (in §§ 702 and 704) or as the action 
to be compelled (in § 706(1)).” 

Norton, 542 U.S. at 61–62. Thus, the Court held that in order to be 
viable, an APA claim seeking to compel an agency to act must point to 
“a discrete agency action that it is required to take.” Id. at 64 
(emphasis in original). This standard precludes “broad programmatic 
attack[s].” Id. The Court added: 

“The principal purpose of the APA limitations we have discussed—and of 
the traditional limitations upon mandamus from which they were 
derived—is to protect agencies from undue judicial interference with 
their lawful discretion, and to avoid judicial entanglement in abstract 
policy disagreements which courts lack both expertise and information to


2. Discretion Is Not Unlimited: 

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In Lincoln v. Vigil, 508 U.S. 182 (1993), the Supreme Court concluded 
that, absent statutory elaboration, decisions about how to allocate 
funds within a lump-sum appropriation are committed to agency 
discretion by law. The Court noted that “the very point of a lump-sum 
appropriation is to give an agency the capacity to adapt to changing 
circumstances and meet its statutory responsibilities in what it sees 
as the most effective or desirable way.” Id. at 191. Therefore, the 
Court held that judicial review of the agency’s decision to discontinue 
a program that had been previously funded through a lump-sum 
appropriation was precluded. (See Chapter 6 for a more detailed 
discussion of the availability of appropriations.) See also Hein v. 
Freedom From Religion Foundation, Inc., ___ U.S. ___, 127 S. Ct. 2553 
(2007); 55 Comp. Gen. 307 (1975); B-278121, Nov. 7, 1997. 

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Discretion must be exercised before the obligation is incurred. 
Approval after the fact is merely a condoning of what has already been 
done and does not constitute the exercise of discretion. 22 Comp. Gen. 
1083 (1943); 14 Comp. Gen. 698 (1935); A-57964, Jan. 30, 1935. (This 
point should not be confused with an agency’s occasional ability to 
ratify an otherwise unauthorized act. See, e.g., B-306353, Oct. 26, 

[End of chapter 3] 

Chapter 4: Availability of Appropriations: Purpose: 

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11. Lobbying, Publicity or Propaganda, and Related Matters: 
a. Introduction: 
b. Penal Statutes: 
c. Appropriation Act Restrictions: 
(1) Origin and general considerations: 
(2) Self-aggrandizement: 
(3) Covert propaganda: 
(4) Purely partisan materials: 
(5) Pending legislation: Overview: 
(6) Cases involving “grassroots” lobbying violations: 
(7) Pending legislation: Cases in which no violation was found: 
(8) Pending legislation: Providing assistance to private lobbying 
(9) Promotion of legislative proposals: Prohibited activity short of 
grass roots lobbying: 
(10) Federal employees’ communications with Congress: 

A. General Principles: 

1. Introduction: 31 U.S.C. § 1301(a): 

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Simple, concise, and direct, this statute was originally enacted in 
1809 (ch. 28, § 1, 2 Stat. 535, (Mar. 3, 1809)) and is one of the 
cornerstones of congressional control over the federal purse. Because 
money cannot be paid from the Treasury except under an appropriation 
(U.S. Const. art. I, § 9, cl. 7), and because an appropriation must be 
derived from an act of Congress, it is for Congress to determine the 
purposes for which an appropriation may be used. Simply stated, 31 
U.S.C. § 1301(a) says that public funds may be used only for the 
purpose or purposes for which they were appropriated. It prohibits 
charging authorized items to the wrong appropriation, and unauthorized 
items to any appropriation. See, e.g., B-302973, Oct. 6, 2004 (agency 
could not charge authorized activities such as cost comparison studies 
to an appropriation that specifically prohibits its use for such 
studies). Anything less would render congressional control largely 
meaningless. An earlier Treasury Comptroller was of the opinion that 
the statute did not make any new law, but merely codified what was 
already required under the Appropriations Clause of the Constitution. 4 
Lawrence, First Comp. Dec. 137, 142 (1883). 

2. Determining Authorized Purposes: 

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Once the purposes have been determined by examining the various pieces 
of legislation, 31 U.S.C. § 1301(a) comes into play to restrict the use 
of the appropriation to these purposes only, together with one final 
generic category of payments—payments authorized under general 
legislation applicable to all or a defined group of agencies and not 
requiring specific appropriations. For example, legislation enacted in 
1982 amended 12 U.S.C. § 1770 to authorize federal agencies to provide 
various services, including telephone service, to employee credit 
unions. Pub. L. No. 97-320, § 515, 96 Stat. 1469, 1530 (Oct. 15, 1982). 
Prior to this legislation, an agency would have violated 31 U.S.C. § 
1301(a) by providing telephone service to a credit union, even on a 
reimbursable basis, because this was not an authorized purpose under 
any agency appropriation. 60 Comp. Gen. 653 (1981). The 1982 amendment 
made the providing of special services to credit unions an authorized 
agency function, and hence an authorized purpose, which it could fund 
from unrestricted general operating appropriations. 66 Comp. Gen. 356 
(1987). Similarly, a recently enacted statute gives agencies the 
discretion to use appropriated funds to pay the expenses their 
employees incur for obtaining professional credentials. 5 U.S.C. § 
5757(a); B-289219, Oct. 29, 2002. See also B-302548, Aug. 20, 2004 
(section 5757(a) does not authorize the agency to pay for an employee’s 
membership in a professional association unless membership is a 
prerequisite to obtaining the professional license or certification). 
Prior to this legislation, agencies could not use appropriated funds to 
pay fees incurred by their employees in obtaining professional 
credentials. See, e.g., 47 Comp. Gen. 116 (1967). Other examples are 
interest payments under the Prompt Payment Act (31 U.S.C. §§ 3901–3907) 
and administrative settlements less than $2,500 under the Federal Tort 
Claims Act (28 U.S.C. §§ 2671–2680). 

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Where an appropriation specifies the purpose for which the funds are to 
be used, 31 U.S.C. § 1301(a) applies in its purest form to restrict the 
use of the funds to the specified purpose. For example, an 
appropriation for topographical surveys in the United States was not 
available for topographical surveys in Puerto Rico. 5 Comp. Dec. 493 
(1899). Similarly, an appropriation to install an electrical generating 
plant in the customhouse building in Baltimore could not be used to 
install the plant in a nearby post office building, even though the 
plant would serve both buildings and thereby reduce operating expenses. 
11 Comp. Dec. 724 (1905). An appropriation for the extension and 
remodeling of the State Department building was not available to 
construct a pneumatic tube delivery system between the State Department 
and the White House. 42 Comp. Gen. 226 (1962). In another example 
involving a line-item appropriation for a grant project, because the 
funds were made available for a specific grantee in a specific amount 
to accomplish a specific purpose, the agency could not grant less than 
Congress has directed by using some of the appropriation to pay its 
administrative costs. 72 Comp. Gen. 317 (1993); 69 Comp. Gen. 660, 662 
(1990). An appropriation to the Department of Labor for payment to the 
New York Workers’ Compensation Board for the processing of claims 
related to the September 11, 2001, terrorist attack on the World Trade 
Center was not available to make payments to other New York State 
entities. B-303927, June 7, 2005. And, as noted previously, an 
appropriation for the “replacement” of state roads could not be used to 
make improvements on them. 41 Comp. Gen. 255 (1961). 

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It is well settled, but warrants repeating, that even an expenditure 
that may be reasonably related to a general appropriation may not be 
paid out of that appropriation where the expenditure falls specifically 
within the scope of another appropriation. 63 Comp. Gen. 422 (1984); B-
300325, Dec. 13, 2002; B-290005, July 1, 2002. It is also well settled 
that when two appropriations are available for the same purpose, the 
agency must select which to use, and that once it has made an election, 
the agency must continue to use the same appropriation for that purpose 
unless the agency, at the beginning of the fiscal year, informs 
Congress of its intent to change for the next fiscal year. B-307382, 
Sept. 5, 2006; B-272191, Nov. 4, 1997. See also 68 Comp. Gen. 337 
(1989); 59 Comp. Gen. 518 (1980). An exception to this requirement is 
when Congress specifically authorizes the use of two appropriation 
accounts. B-272191, Nov. 4, 1997 (statutory language makes clear that 
Congress intended that the “funds appropriated to the Secretary [of the 
Army] for operation and maintenance” in the fiscal year 1993 Defense 
Appropriations Act are “in addition to...the funds specifically 
appropriated for real property maintenance under the heading [RPM,D]” 
in that appropriation act). 

3. New or Additional Duties: 

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Similarly, the Bureau of Land Management could use current 
appropriations to determine fair market value and to initiate 
negotiations with owners in connection with the acquisition of mineral 
interests under the Cranberry Wilderness Act,9 even though actual 
acquisitions could not be made until funding was provided in 
appropriation acts. B-211306, June 6, 1983. See also B-290011, Mar. 25, 
2002; B-211306, June 6, 1983; B-153694, Oct. 23, 1964. Of course, an 
appropriation is not available if Congress has prohibited the agency 
from using it. In B-308715, Apr. 20, 2007, the Department of Energy is 
specifically barred under 42 U.S.C. § 7278 from using funds made 
available under an Energy and Water Development Appropriations Act to 
implement or finance any authorized loan guarantee program unless 
specific provision has been made for that program in an appropriations 
act. Since no provision was made, Energy could not use the Energy and 
Water appropriation to begin implementing the loan guarantee program. 

B. The “Necessary Expense” Doctrine: 

1. The Theory: 

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In addition to recognizing the differences among agencies when applying 
the necessary expense rule, we act to maintain a vigorous body of case 
law responsive to the changing needs of government. In this regard, our 
decisions indicate a willingness to consider changes in societal 
expectations regarding what constitutes a necessary expense. This 
flexibility is evident, for example, in our analysis of whether an 
expenditure constitutes a personal or an official expense. As will be 
discussed more fully later in the chapter, use of appropriations for 
such an expenditure is determined by continually weighing the benefit 
to the agency, such as the productivity, safety, recruitment, and 
retention of a dynamic workforce and other considerations enabling 
efficient, effective, and responsible government. We recognize, 
however, that these factors can change over time. B-302993, June 25, 
2004 (modifying earlier decisions to reflect determination that 
purchase of kitchen appliances for use by agency employees in an agency 
facility is reasonably related to the efficient performance of agency 
activities, provides other benefits such as assurance of a safe 
workplace, and primarily benefits the agency, even though employees 
enjoy a collateral benefit); B-286026, June 12, 2001(overruling GAO’s 
earlier decisions based on reassessment of the training opportunities 
afforded by examination review courses); B-280759, Nov. 5, 1998 
(overruling GAO’s earlier decisions on the purchase of business cards). 
See also 71 Comp. Gen. 527 (1992) (eldercare is not a typical employee 
benefit provided to the nonfederal workforce and not one that the 
federal workforce should expect); B-288266, Jan. 27, 2003 (GAO 
explained it remained “willing to reexamine our case law” regarding 
light refreshments if it is shown to frustrate efficient, effective, 
and responsible government). 

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the following: 

E.g., B-303170, Apr. 22, 2005; 63 Comp. Gen. 422, 427–28 (1984); B-
240365.2, Mar. 14, 1996; B-230304, Mar. 18, 1988. 

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For example, in August 2004, in response to an elevated national 
security threat level with respect to Washington, D.C., the Capitol 
Police established the Security Traffic Checkpoint Program (STCP), 
which consisted of 14 security traffic checkpoints intended to secure 
all streets to the two main avenues leading to the Capitol building. 
Under this program, Capitol Police officers were required to staff the 
14 checkpoints on a 24-hour, 7-days-a-week basis, with each officer 
working 12-hour shifts. During the STCP’s operation from August 2, 
2004, until November 23, 2004, the Capitol Police incurred 
approximately $1.3 to $1.5 million in overtime expenses every pay 
period. The Capitol Police financed the overtime expenses related to 
the program with money transferred to it from the Emergency Response 
Fund (ERF) established by Congress to, among other things, fund 
counterterrorism measures and support national security. Pub. L. 
No. 107-38, 115 Stat. 220 (Sept. 18, 2001). GAO was asked whether the 
use of the ERF for the STCP overtime payments was a proper use of the 
ERF appropriation. In finding that there was a reasonable nexus between 
the overtime expenditure and ERF appropriation charged, GAO stated: 

“Law enforcement agencies are entitled to discretion in deciding how 
best to protect our national institutions, such as the United States 
Congress, its Members, staff, and facilities. Here, the Capitol Police 
implemented the STCP in reaction to the heightened terror alert in 
August 2004 due to intelligence information suggesting the strong 
possibility of a terrorist attack at the Capitol Complex...The STCP 
checkpoints, clearly, were a counterterrorism measure, and certainly 
fall within the very broad scope of ‘supporting national security.’... 
So long as the agency’s use of the appropriation serves one of the... 
purposes for which the appropriation was enacted, the agency cannot be 
said to have used the appropriation improperly.” 

B-303964, Feb. 3, 2005, at 5. 

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Conference-related expenses may also be authorized as necessary 
expenses where the agency is authorized to host the conference. B-
300826, Mar. 3, 2005. Cf. B-306424, Mar. 24, 2006 (Congress authorized 
the Presidio Trust to lease Presidio property as a venue for public and 
private events; thus the Trust’s appropriations were available to cover 
expenses, such as the costs of providing audio equipment and related 
services, incurred during the National Academy of Public 
Administration’s use of the Presidio’s facilities for its 2005 annual 
Board of Directors meeting.) 

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However, specific statutory authority is not essential. If 
participation is directly connected with and is in furtherance of the 
purposes for which a particular appropriation has been made, and an 
appropriate administrative determination is made to that effect, the 
appropriation is available for the expenditure. B-290900, Mar. 18, 2003 
(Bureau of Land Management (BLM) may use its appropriated funds to pay 
its share of the cost to produce a brochure that educates the public 
regarding lighthouse preservation because the brochure supports BLM in 
meeting its responsibility under its lighthouse preservation program); 
B-286457, Jan. 29, 2001 (demolition of old air traffic control tower 
that would obstruct the view from the new one is directly connected 
with and in furtherance of the construction of a new tower such that 
the demolition expenses are covered by Federal Aviation 
Administration’s appropriation act for tower construction); B-280440, 
Feb. 26, 1999 (Immigration and Naturalization Service’s (INS) Salaries 
and Expenses appropriation is available to purchase medals to be worn 
by uniformed employees of the Border Patrol division of INS to 
commemorate the division’s 75th anniversary). See also 16 Comp. Gen. 53 
(1936); 10 Comp. Gen. 282 (1930); 7 Comp. Gen. 357 (1927); 4 Comp. Gen. 
457 (1924).15 Authority to disseminate information will generally 
provide adequate justification. E.g., 7 Comp. Gen. 357; 4 Comp. Gen. 
457. In addition, an agency may use appropriated funds to provide 
prizes or incentives to individuals to further the collection of 
information necessary to accomplish the agency’s statutory mandate.16 
See, e.g., B-304718, Nov. 9, 2005; 70 Comp. Gen. 720 (1991); B-286536, 
Nov. 17, 2000; B-230062, Dec. 22, 1988. 

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Also, the Army could not use its Other Procurement, Army appropriation 
to pay contractors for logistical planning and plan implementation 
services related to the medical equipment items acquired using that 
appropriation because such services are not procurement activities and 
the Army’s Operation and Maintenance appropriation was available and 
should be charged for such services. B-303170, Apr. 22, 2005. 

2. General Operating Expenses: 

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The Salaries and Expenses appropriation of the Internal Revenue Service 
(IRS) could be used to procure credit bureau reports if 
administratively determined to be necessary in connection with 
investigating applicants for employment with the IRS. B-117975, 
Dec. 29, 1953. However, the Customs and Border Protection’s (CBP) 
Salaries and Expenses appropriation was not available to pay for credit 
monitoring services for its employees in the New Orleans area who, as a 
result of Hurricane Katrina, were victims of identity theft. Neither 
government action nor inaction compromised the employees’ identities, 
and in this case the CBP employees individually, not the government, 
would be the primary beneficiaries of the proposed credit monitoring, 
which was considered part of the employees’ overall management of their 
personal finances. B-309604, Oct. 10, 2007. 

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Outplacement assistance to employees may be regarded as a legitimate 
matter of agency personnel administration if the expenditures are found 
to benefit the agency and are reasonable in amount. 68 Comp. Gen. 127 
(1988); B-272040, Oct. 29, 1997. The Government Employees Training Act 
authorizes training in preparation for placement in another federal 
agency under conditions specified in the statute. 5 U.S.C. § 4103(b). 
Similarly, employee retirement education and retirement counseling, 
including individual financial planning for retirement, fall within the 
legitimate range of an agency’s discretion to administer its personnel 
system and therefore are legitimate agency expenses. B-301721, Jan. 16, 

C. Specific Purpose Authorities and Limitations: 

5. Entertainment – Recreation – Morale and Welfare: 

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While feeding employees may not be regarded as a “necessary expense” as 
a general proposition, it may qualify when the agency is carrying out 
some particular statutory function where the necessity relationship can 
be established. Thus, in B-300826, Mar. 3, 2005, the National 
Institutes of Health (NIH) could use appropriated funds to provide 
meals and light refreshments to federal government (as well as 
nonfederal) attendees and presenters at an NIH-sponsored conference to 
coordinate and discuss Parkinson’s disease research efforts within the 
scientific community. The conference was held in furtherance of NIH’s 
statutory mission in 42 U.S.C. § 281 to “conduct and support” research 
with respect to particular diseases, and it was therefore within NIH’s 
authority to pay for all legitimate, reasonable costs of hosting the 
formal conference. GAO determined that providing meals and refreshments 
was an allowable conference cost so long as the meals and refreshments 
were incidental to the conference, attendance at the meals was 
important to ensure full participation in the conference, and the meals 
and refreshments were part of a formal conference that included 
substantial functions occurring separately from when the food is 

Other examples include B-201196, Mar. 4, 1982, in which GAO concluded 
that it was a permissible implementation of a statutory accident 
prevention program for the Marine Corps to set up rest stations on 
highways leading to a Marine base to serve coffee and doughnuts to 
Marines returning from certain holiday weekends. See also 65 Comp.
Gen. 738 (1986) (refreshments at awards ceremonies), discussed later in 
this section. A related example is B-235163.11, Feb. 13, 1996, in which 
GAO determined that appropriated funds could be used to pay for the 
dinner of a nonfederal award recipient and her spouse at a National 
Science Foundation awards ceremony because of the statutory nature of 
the award. Exceptions of this type illustrate the relativity of the 
necessary expense doctrine pointed out earlier in our general 

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The purchase of equipment for use in other than an established 
cafeteria may also be authorized when the agency determines that the 
primary benefit of its use accrues to the agency by serving a valid 
operational purpose, such as providing for an efficient working 
environment or meeting health needs of employees, notwithstanding a 
collateral benefit to the employees. In B-302993, June 25, 2004, GAO 
approved the purchase of kitchen appliances, ordinarily considered to 
be personal in nature, for common use by employees in an agency 
facility. The appliances included refrigerators, microwaves, and 
commercial coffee makers. The agency demonstrated that equipping the 
workplace with these appliances was reasonably related to the efficient 
performance of agency activities and provided other benefits to the 
agency, including the assurance of a safe workplace. GAO also advised 
the agency that it should establish policies for uniform procurement 
and use of such equipment. In developing a policy, the agency should 
address the ongoing need for specific equipment throughout the 
building, the amount of the agency’s appropriation budgeted for this 
purpose, price limitations placed on the equipment purchases, and 
whether the equipment should be purchased centrally or by individual 
units within headquarters. It is important that the policy ensure that 
appropriations are not used to provide any equipment for the sole use 
of an individual, and that the agency locate refrigerators, microwaves, 
and coffee makers acquired with appropriated funds only in common areas 
where they are available for use by all personnel. It should also be 
clear that appropriated funds will not be used to furnish goods, such 
as the coffee itself or microwaveable frozen foods, to be used in the 
kitchen area. These remain costs each employee is expected to bear. 

The decision in B-302993, June 25, 2004, represented a departure from 
earlier cases which permitted such purchases under more restrictive 
circumstances where the agency could identify a specific need: 

* B-173149, Aug. 10, 1971: purchase of a set of stainless steel cooking 
utensils for use by air traffic controllers to prepare food at a flight 
service station where there were no other readily accessible eating 
facilities and the employees were required to remain at their post of 
duty for a full 8-hour shift. 

* B-180272, July 23, 1974: purchase of a sink and refrigerator to 
provide lunch facilities for the Occupational Safety and Health Review 
Commission where there was no government cafeteria on the premises. 

* B-210433, Apr. 15, 1983: purchase of microwave oven by Navy facility 
to replace nonworking stove. Facility was in operation 7 days a week, 
some employees had to remain at their duty stations for 24-hour shifts, 
and there were no readily accessible eating facilities in the area 
during nights and weekends. 

* B-276601, June 26, 1997: purchase of a refrigerator for personal food 
items of Central Intelligence Agency (CIA) employees. CIA headquarters 
facility was relatively distant from private eating establishments, the 
CIA did not permit delivery service to enter the facility due to 
security concerns, and the cafeteria served only breakfast and lunch. 

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The decision at 60 Comp. Gen. 303 was expanded in B-199387, Mar. 23, 
1982, to include small “samples” of ethnic foods prepared and served 
during a formal ethnic awareness program as part of the agency’s equal 
employment opportunity program. In the particular program being 
considered, the attendees were to pay for their own lunches, with the 
ethnic food samples of minimal proportion provided as a separate event. 
Thus, the samples could be distinguished from meals or refreshments, 
which remain unauthorized. (The decision did not specify how many 
“samples” an individual might consume in order to develop a fuller 
appreciation.) Compare that situation to the facts in B-301184, 
Jan. 15, 2004, where GAO found that the U.S. Army Corps of Engineers’ 
appropriation was not available to pay for the costs of food offered at 
the Corps’ North Atlantic Division’s February 2003 Black History Month 
program. The evidence in the record, including the time of the program, 
the food items served, and the amounts available, indicated that a 
meal, not a sampling of food, was offered. 

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Similarly, GAO advised that serving refreshments purchased with 
appropriated funds to local children as part of the Forest Service’s 
“Kid’s Fishing Day” did not promote cultural awareness. While it may 
have been important that children learn to fish and appreciate the 
outdoors, such a goal did not advance federal EEO objectives. B-302745, 
July 19, 2004. 

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footnote number 72a, after the first paragraph: 

An agency was found to have the requisite statutory authority to 
provide meals and refreshments to nonfederal personnel in B-300826, 
Mar. 3, 2005. In that case, GAO considered whether the National 
Institutes of Health (NIH) could use appropriated funds to provide 
meals and light refreshments to both federal and nonfederal attendees 
and presenters at a conference NIH was hosting on the latest scientific 
advances in treating Parkinson’s disease. After reviewing NIH’s 
statutory authority to conduct and support research to further the 
treatment of diseases, GAO concluded that NIH had the requisite 
authority to host the conference to which NIH had invited experts from 
the private sector as well as from other federal agencies, in addition 
to researchers from its own research institutes. NIH was not barred by 
the prohibition of 31 U.S.C. § 1345 from providing food to nonfederal 
personnel. As GAO explained, section 1345 has limited application, 
addressing only those conventions and other forms of assemblages or 
gatherings that private organizations seek to hold at government 
expense. B-300826, at 4 n.5. The decision cited 72 Comp. Gen. 229 
(1993), which effectively overruled prior GAO decisions that applied 
section 1345 to meetings and conferences other than assemblages and 
gatherings that private organizations sought to hold at government 
expense. 72a 72 Comp. Gen. at 231. 

To determine whether the costs of meals and refreshments at such an 
agency-hosted conference are necessary to achieve the conference 
objectives, GAO established the following criteria: (1) the meals and 
refreshments are incidental to the formal conference, (2) attendance at 
the meals and when refreshments are served is important for the host 
agency to ensure attendees’ full participation in essential discussion, 
lectures, or speeches concerning the purpose of the formal conference, 
and (3) the meals and refreshments are part of a formal conference that 
includes substantial functions occurring separately from when the food 
is served. Since the NIH proposal met these criteria, NIH could provide 
meals and refreshments at the Parkinson’s disease conference. In so 
finding, GAO noted that the listed criteria must be applied on a case-
by-case basis and advised federal agencies to develop procedures to 
ensure that the provision of meals and refreshments meet the criteria. 

Another aspect of hosting a conference addressed in B-300826 concerned 
whether NIH could charge an attendance fee at the conference and retain 
the proceeds, or permit its contractor to do so. GAO held that without 
specific statutory authority an agency hosting a conference may not 
charge and retain an attendance fee, and the agency may not cure that 
lack of authority by engaging a contractor to do what it may not do. A 
contractor in this situation is “receiving money for the Government,” 
and the miscellaneous receipts statute, 31 U.S.C. § 3302(b), requires 
that such funds must be deposited in the Treasury. This decision in B-
300826 was affirmed in B-306663, Jan. 4, 2006. For more on the 
miscellaneous receipts statute, see Chapter 6, section E.2. 

In 2006, Congress provided the Department of Defense (DOD) with 
specific authority to accept and retain fees from any individual or 
commercial participant in conferences, seminars, exhibitions, 
symposiums, or similar meetings conducted by DOD. Pub. L. No. 109-364, 
120 Stat. 2083, 2395–96 (Oct. 17, 2006), codified at 10 U.S.C. § 2262. 
DOD may arrange for the collection of such fees either directly or 
through a contractor, and the fees may be collected in advance of the 
conference. 10 U.S.C. § 2262(a)(2). Amounts collected under this 
provision are credited to the appropriation or account from which the 
costs of the conference are paid, but any amount exceeding those costs 
must be deposited into the Treasury as miscellaneous receipts. 10 
U.S.C. §§ 2262(b), (c). DOD is required to report annually on the 
number of conferences for which fees were collected, the amount of fees 
collected, and the actual costs of the conferences, including costs 
associated with any conference coordinators. 10 U.S.C. § 2262(d). 

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[72a] The Department of Justice Office of Legal Counsel (OLC) has 
stated that it disagrees with our decision in B-300826, Mar. 3, 2005, 
insofar as it permits agencies to provide meals and light refreshments 
to nonfederal personnel. Memorandum Opinion for the General Counsel, 
Environmental Protection Agency, Use of Appropriated Funds to Provide 
Light Refreshments to Non-Federal Participants at EPA Conferences, OLC 
Opinion, Apr. 5, 2007. 

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The Veterans Benefits Administration (VBA) of the Department of 
Veterans Affairs (VA) inquired whether it may use appropriated funds to 
pay for incentives in the form of refreshments or light meals to 
increase participation in and the effectiveness of focus groups. Under 
38 U.S.C. § 527(a), the VA is required to “measure and evaluate” its 
programs, and the VBA has been tasked with collecting this information. 
While VBA obtains information from a variety of sources, including mail 
or internet surveys and telephone interviews, VBA has determined that 
the use of focus groups is the best method of gathering this feedback 
and that the provision of refreshments to the participants is very 
helpful both in attracting these participants and getting useful 
information from the focus groups. Focus group participants are not VBA 
employees but are veterans and family members of veterans served by 
VBA. GAO concluded that, to the extent VBA determines that it needs to 
offer refreshments and light meals as an incentive to maximize 
participation by nonemployee veterans and their families in focus 
groups to fulfill its statutory requirement, VBA could use its 
appropriated funds to do so. However, GAO cautioned that VBA should 
provide such incentives pursuant to an appropriate, enforceable policy 
with procedures for approval to ensure that incentives are only 
provided when necessary and are used strictly for nonemployee focus 
groups. B-304718, Nov. 9, 2005. 

7. Firefighting and Other Municipal Services: 

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In B-302230, Dec. 30, 2003, GAO found the District of Columbia’s 9-1-1 
emergency telephone system surcharge as originally enacted to be an 
impermissible tax on the federal government because the legal incidence 
of the tax fell on the federal government. Subsequently, the District 
of Columbia amended its law such that the legal incidence of the tax 
falls on the providers of telephone service, not the users of telephone 
service. Thus, federal agencies could pay bills that itemize the 
surcharge that the vendors must pay. Id. 

8. Gifts and Awards: 

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An agency frequently wants to use gifts to attract attention to the 
agency or to specific programs. For example, gifts can be used as 
recruiting and retention tools, to commemorate an event, or to inform 
the public or agency employees about the agency. Appropriated funds may 
not be used for personal gifts, unless, of course, there is specific 
statutory authority. B-307892, Oct. 11, 2006 (under 10 U.S.C. § 2261, 
Navy may use appropriated funds to purchase gifts for sailors to 
commemorate their reenlistment subject to regulations issued by the 
Secretary of Defense). See also 68 Comp. Gen. 226 (1989). To state the 
rule in this manner is to make it appear rather obvious. If, for 
example, a General Counsel decided it would be a nice gesture and 
improve employee morale to give each lawyer in the agency a 
Thanksgiving turkey, few would argue that the expense should be borne 
by the agency’s appropriations. Appropriated funds could not be used 
because the appropriation was not made for this purpose (assuming, of 
course, that the agency has not received an appropriation for 
Thanksgiving turkeys) and because giving turkeys to lawyers is not 
reasonably necessary to carry out the mission at least of any agency 
that now exists. Most cases, however, are not quite this obvious or 

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The Incentive Awards Act applies to civilian agencies, civilian 
employees of the various armed services and specified legislative 
branch agencies. 5 U.S.C. § 4501. Within the judicial branch, it 
applies to the United States Sentencing Commission. Id.[Footnote 103] 
While it does not apply to members of the armed forces, the Defense 
Department has very similar authority for military personnel in 10 
U.S.C. § 1124. 

Page 4-166 – Replace footnote number 103 with the following: 

[103] The Sentencing Commission had not been covered prior to a 1988 
amendment to the statute. See 66 Comp. Gen. 650 (1987). The 
Administrative Office of the United States Courts is no longer covered 
by the statute. Pub. L. No. 101-474, § 5(f), 104 Stat. 1100 (Oct. 30, 
1990). The District of Columbia also is no longer covered. When the 
District of Columbia Home Rule Act was enacted into law, Pub. L. No. 93-
198, 87 Stat. 777 (Dec. 24, 1973), the Act provided for the 
continuation of federal laws applicable to the District of Columbia 
government and its employees (that for the most part were in title 5 of 
the United States Code) until such time as the District enacted its own 
laws covering such matters. The District has adopted a number of laws 
exempting its employees from various provisions of title 5, and 
sections 4501 through 4506 are specifically superseded. See D.C. 
Official Code, 2001 ed. §1-632.02. 

10. Insurance: 

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Another type of insurance which may not be paid for from appropriated 
funds is flight or accident insurance for employees on official travel. 
If a federal employee traveling by air on official business wishes to 
buy flight insurance, it is considered a personal expense and not 
reimbursable. B-309715, Sept. 25, 2007; 47 Comp. Gen. 319 (1967); 40 
Comp. Gen. 11 (1960). Similarly nonreimbursable is trip cancellation 
insurance. 58 Comp. Gen. 710 (1979). 

11. Lobbying and Related Matters: 

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11. Lobbying, Publicity or Propaganda, and Related Matters: 

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In addition to restrictions on lobbying, this section will explore 
restrictions on publicity or propaganda. Since 1951, appropriation acts 
have included provisions precluding the use of the appropriations for 
“publicity or propaganda.” While Congress has never defined the meaning 
of publicity or propaganda, GAO has recognized three types of 
activities that violate the publicity or propaganda prohibitions: self-
aggrandizement, covert propaganda, and materials that are purely 
partisan in nature. 

Page 4-196 – Insert the following as the first paragraph under 
“(1) Origin and general considerations”: 

In addition to penal statutes imposing restrictions on lobbying, 
lobbying restrictions are found in appropriations acts. Restrictions on 
publicity or propaganda are found only in appropriations acts. 

Page 4-197 – Replace the first paragraph and quotation with the 

The publicity or propaganda prohibition made its first appearance in 
1951. Members of Congress expressed concern over a speaking campaign 
promoting a national healthcare plan undertaken in the early 1950s by 
Oscar R. Ewing, the Administrator of the Federal Security Agency, a 
predecessor to the Department of Health and Human Services and the 
Social Security Administration. In reaction to this activity, 
Representative Lawrence R. Smith introduced the following provision, 
which was enacted in the Labor-Federal Security appropriation for 1952, 
Pub. L. No. 134, ch. 373, § 702, 65 Stat. 209, 223 (Aug. 31, 1951): “No 
part of any appropriation contained in this Act shall be used for 
publicity or propaganda purposes not heretofore authorized by the 
Congress.” Later versions of this provision prohibit activity 
throughout the government: “No part of any appropriation contained in 
this or any other Act shall be used for publicity or propaganda 
purposes within the United States not heretofor authorized by the 
Congress.”[Footnote 117] 

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[117] See, e.g., the Transportation, Treasury, and related agencies’ 
appropriations for 2005, Pub. L. No. 108-447, div. H, title VI,
§ 624, 118 Stat. 2809, 3278 (Dec. 8, 2004) (emphasis added). 

Page 4-198 – Insert the following after the quotation and before the 
second full paragraph: 

Although the publicity and propaganda prohibition has appeared in some 
form in the annual appropriations acts since 1951, the prohibitions 
themselves provide little definitional guidance as to what specific 
activities are publicity or propaganda. GAO has identified three 
activities that are prohibited by the publicity or propaganda 
prohibition—self-aggrandizement, covert propaganda, and purely partisan 

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In evaluating whether a given action violates a publicity or propaganda 
provision, GAO will rely heavily on the agency’s administrative 
justification. In other words, the agency gets the benefit of any 
legitimate doubt. GAO will not accept the agency’s justification where 
it is clear that the action falls into one of these categories. Before 
discussing these categories, two threshold issues must be noted. 

Page 4-199 – Replace the first three paragraphs under “(2) Self-
aggrandizement” and move the heading as follows: 

As noted above, the broadest form of the publicity and propaganda 
restriction prohibits the use of appropriated funds “for publicity or 
propaganda purposes not authorized by Congress.” A fiscal year 2005 
governmentwide variation limits these restrictions to activities 
“within the United States.”[Footnote 121] 

(2) Self-aggrandizement: 

The Comptroller General first had occasion to construe this provision 
in 31 Comp. Gen. 311 (1952). The National Labor Relations Board asked 
whether the activities of its Division of Information amounted to a 
violation. Reviewing the statute’s scant legislative history, the 
Comptroller General concluded that it was intended “to prevent 
publicity of a nature tending to emphasize the importance of the agency 
or activity in question.” Id. at 313. Therefore, the prohibition would 
not apply to the “dissemination to the general public, or to particular 
inquirers, of information reasonably necessary to the proper 
administration of the laws” for which an agency is responsible. Id. at 
314. Based on this interpretation, GAO concluded that the activities of 
the Board’s Division of Information were not improper. The only thing 
GAO found that might be questionable, the decision noted, were certain 
press releases reporting speeches of members of the Board. 

Thus, 31 Comp. Gen. 311 established the important proposition that the 
statute does not prohibit an agency’s legitimate informational 
activities. See also B-302992, Sept. 10, 2004; B-302504, Mar. 10, 2004; 
B-284226.2, Aug. 17, 2000; B-223098.2, Oct. 10, 1986. It also 
established that the publicity or propaganda restriction prohibits 
“publicity of a nature tending to emphasize the importance of the 
agency or activity in question.” 31 Comp. Gen. at 313. See also B-
302504, Mar. 10, 2004; B-212069, Oct. 6, 1983. Such activity has become 
known as “self-aggrandizement.” 

Page 4-199 – Replace footnote number 121 with the following: 

[121] Pub. L. No. 108-447, div. H, title VI, § 624, 118 Stat. 2809, 
3278 (Dec. 8, 2004). 

Page 4-200 – Replace the first full paragraph with the following: 

In B-302504, Mar. 10, 2004, GAO considered a flyer and television and 
print advertisements that the Department of Health and Human Services 
(HHS) produced and distributed to inform Medicare beneficiaries of 
recently enacted changes to the Medicare program. While the materials 
had notable factual omissions and other weaknesses, GAO concluded that 
the materials were not self-aggrandizement because they did not 
attribute the enactment of new Medicare benefits to HHS or any of its 
agencies or officials. 

There was also no violation found in B-303495, Jan. 4, 2005. In this 
case, the Office of National Drug Control Policy used the term “Drug 
Czar” to describe its director in video news releases it issued under 
the Drug-Free Media Campaign Act of 1998. The term had common, 
widespread, and long-standing usage by the media and members of 
Congress, and was not being used by the agency to persuade the public 
of the importance of the director. Rather, it was used as “nothing more 
than a sobriquet.” Id. 

Page 4-200 – Replace the third full paragraph with the following: 

Other cases, in which GAO specifically found no self-aggrandizement, 
are B-284226.2, Aug. 17, 2000 (Department of Housing and Urban 
Development report and accompanying letter providing information to 
agency constituents about the impact of program reductions being 
proposed in Congress); B-212069, Oct. 6, 1983 (press release by 
Director of Office of Personnel Management excoriating certain Members 
of Congress who wanted to delay a civil service measure the 
administration supported); and B-161686, June 30, 1967 (State 
Department publications on Vietnam War). In none of these cases were 
the documents designed to glorify the issuing agency or official. 

Page 4-202 – Replace the first paragraph under the heading “(3) Covert 
propaganda” with the following: 

Another type of activity that GAO has construed as prohibited by the 
“publicity or propaganda not authorized by Congress” statute is “covert 
propaganda,” defined as “materials such as editorials or other articles 
prepared by an agency or its contractors at the behest of the agency 
and circulated as the ostensible position of parties outside the 
agency.” B-229257, June 10, 1988. A critical element of the violation 
is concealment from the target audience of the agency’s role in 
sponsoring the material. Id.; B-305368, Sept. 30, 2005; B-304228, Sept. 
30, 2005; B-303495, Jan. 4, 2005; B-302710, May 19, 2004; B-306349, 
Sept. 30, 2005 (nondecision letter). 

Page 4-202 – Insert the following after the second full paragraph: 

In B-302710, May 19, 2004, GAO found that the Department of Health and 
Human Services (HHS) violated the prohibition when it produced and 
distributed prepackaged video news stories that did not identify the 
agency as the source of the news stories. Prepackaged news stories, 
ordinarily contained in video news releases, or “VNRs,” have become a 
popular tool in the public relations industry. The prepackaged news 
stories may be accompanied by a suggested script, video clips known as 
“B-roll” film which news organizations can use either to augment their 
presentation of the prepackaged news story or to develop their own news 
reports in place of the prepackaged story, and various other 
promotional materials. These materials are produced in the same manner 
in which television news organizations produce materials for their own 
news segments, so they can be reproduced and presented as part of a 
newscast by the news organizations. The HHS news stories were part of a 
media campaign to inform Medicare recipients about new benefits 
available under the recently enacted Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003. HHS designed its 
prepackaged video news stories to be indistinguishable from video 
segments produced by private news broadcasters, allowing broadcasters 
to incorporate them into their broadcasts without alteration. The 
suggested anchor lead-in scripts included in the package facilitated 
the unaltered use of the prepackaged news stories, announcing the 
package as a news story by fictional news reporters. HHS, however, did 
not include any statement in the news stories to advise the television 
viewing audience, the target of the purported news stories, that the 
agency wrote and produced the prepackaged news stories, and the 
television viewing audiences did not know that the stories they watched 
on television news programs about the government were, in fact, 
prepared by the government. See also B-304228, Sept. 30, 2005 
(prepackaged news story produced by consultant hired by the Department 
of Education did not reveal to the target audience the Department’s 
role so it was covert propaganda in violation of the prohibition); B-
303495, Jan. 4, 2005 (prepackaged news stories produced by the Office 
of National Drug Control Policy were covert propaganda in violation of 
the prohibition). Cf. B-307917, July 6, 2006 (newspaper article). 

Page 4-202 – Replace the third full paragraph with the following: 

A similar holding is 66 Comp. Gen. 707 (1987), involving newspaper 
articles and editorials in support of Central American policy. The 
materials were prepared by paid consultants at government request, and 
published as the work of nongovernmental parties. The decision also 
found that media visits by Nicaraguan opposition leaders, arranged by 
government officials but with that fact concealed, constituted another 
form of “covert propaganda.” See also B-305368, Sept. 30, 2005 
(Department of Education contract with radio and television personality 
to comment regularly on the No Child Left Behind Act without assuring 
that the Department’s role was disclosed to the targeted audiences 
violated the publicity and propaganda prohibition); 

B-129874, Sept. 11, 1978 (“canned editorials” and sample letters to the 
editor in support of Consumer Protection Agency legislation, had they 
been prepared, would have violated the law); B-306349, Sept. 30, 2005 
(nondecision letter) (Department of Education urged to review newspaper 
article written by a Department of Education contractor which did not 
disclose the agency’s involvement in its writing for possible publicity 
or propaganda violations). Compare B-304716, Sept. 30, 2005 (services 
provided by expert consultant hired by the Department of Health and 
Human Services, Administration for Children and Families (ACF), did not 
violate the publicity or propaganda prohibition since the one published 
article prepared by the consultant under the contract was published 
under the signature of the assistant secretary of ACF and the contract 
did not call for the consultant to write articles under her own name). 

Page 4-202 – Insert the following after the last paragraph: 

In B-302992, Sept. 10, 2004, the Forest Service produced video and 
print materials to explain and defend its controversial land and 
resource management plan for the Sierra Nevada Forest. Because the 
video and print materials clearly identified the Forest Service and the 
Department of Agriculture as the source of the materials, GAO concluded 
that they did not constitute covert propaganda. See also B-301022, Mar. 
10, 2004 (the Office of National Drug Control Policy was clearly 
identified as the source of materials sent to members of the National 
District Attorneys Association concerning the debate over the 
legalization of marijuana). 

In reaction to the growing use of prepackaged news stories within the 
government, GAO issued a circular letter to the heads of departments, 
agencies, and others concerned entitled Prepackaged News Stories, B-
304272, Feb. 17, 2005. The letter fully explains the limitations 
imposed by the publicity or propaganda prohibition on the use of 
prepackaged news stories. It also explains when agencies are allowed to 
use prepackaged news stories, noting in particular that such use is 
valid so long as there is clear disclosure to the viewing audience that 
the material presented was prepared by or in cooperation with a 
government agency. 

In May 2005, Congress enacted section 6076 of the Emergency 
Supplemental Appropriations Act for Defense, the Global War on Terror, 
and Tsunami Relief, 2005, Pub. L. No. 109-13, 110 Stat. 231, 301 (May 
11, 2005). Section 6076 provided that no appropriations “may be used by 
an executive branch agency to produce any prepackaged news story 
intended for broadcast or distribution unless the story includes a 
clear notification within the text or audio of the prepackaged news 
story that the prepackaged news story was prepared or funded by that 
executive branch agency.” Id. In the conference report submitted to 
both houses of Congress the conferees specifically noted GAO’s analysis 
of covert propaganda and stated that section 6076 “confirms the opinion 
of the Government Accountability Office dated February 17, 2005 (B-
304272).” H.R. Conf. Rep. No. 109-72, at 158–59 (2005) (emphasis 
added). The opinion to which the report was referring was the 
Comptroller General’s circular letter which clearly stated that the 
critical element in determining whether prepackaged news stories 
constitute covert propaganda is whether the intended audience is 
informed of the source of the materials. B-304272, Feb. 17, 2005. 
Inasmuch as section 6076 “confirms” GAO’s opinion, the section did not 
create new law or impose a new requirement. “Congress enacted section 
6076 to emphasize that the publicity or propaganda prohibition always 
restricted the use of appropriations to disseminate information without 
proper source attribution.” B-307917, July 6, 2006, at 2 (concerning 
newspaper article without source attribution that agency contracted for 
before passage of section 6076). Therefore, transactions entered into 
before the date of enactment of section 6076 are held to the same 
requirement for source attribution. Id. 

(4) Purely partisan materials: 

A third category of materials identified in GAO case law as violating 
the publicity or propaganda prohibition is purely partisan materials. 
To be characterized as purely partisan in nature, the offending 
materials must be found to have been “designed to aid a political party 
or candidate.” B-147578, Nov. 8, 1962. It is axiomatic that funds 
appropriated to carry out a particular program would not be available 
for political purposes. See B-147578, Nov. 8, 1962. 

It is often difficult to determine whether materials are political or 
not because “the lines separating the nonpolitical from the political 
cannot be precisely drawn.” Id.; B-144323, Nov. 4, 1960. See also
B-130961, Oct. 16, 1972. An agency has a legitimate right to explain 
and defend its policies and respond to attacks on that policy. B-
302504, Mar. 10, 2004. A standard GAO applies is that the use of 
appropriated funds is improper only if the activity is “completely 
devoid of any connection with official functions.” B-147578,
Nov. 8, 1962. As stated in B-144323, Nov. 4, 1960: 

“[The question is] whether in any particular case a speech or a release 
by a cabinet officer can be said to be so completely devoid of any 
connection with official functions or so political in nature that it is 
not in furtherance of the purpose for which Government funds were 
appropriated, thereby making the use of such funds …unauthorized. This 
is extremely difficult to determine in most cases as the lines 
separating the nonpolitical from the political cannot be precisely 

“...As a practical matter, even if we were to conclude that the use of 
appropriated funds for any given speech or its release was 
unauthorized, the amount involved would be small, and difficult to 
ascertain; and the results of any corrective action might well be more 
technical than real.” 

While GAO has reviewed materials to determine whether they are partisan 
in nature, to date there are no opinions or decisions of the 
Comptroller General concluding that an agency’s informational materials 
were so purely partisan as to constitute impermissible publicity or 
propaganda. In 2000, GAO concluded that an information campaign by the 
Department of Housing and Urban Development (HUD) using a widely 
disseminated publication, entitled Losing Ground: The Impact of 
Proposed HUD Budget Cuts on America’s Communities, had not violated the 
prohibition. B-284226.2, Aug. 17, 2000. In the publication, HUD 
criticized what it called “deep cuts” in appropriations that were 
proposed by the House Appropriations Committee for particular HUD 
programs. The publications stated that, if enacted, the “cuts would 
have a devastating impact on families and communities nationwide.” GAO 
found that this publication was a legitimate exercise of HUD’s duty to 
inform the public of government policies, and that HUD had a right to 
justify its policies to the public and rebut attacks against those 

In B-302504, Mar. 10, 2004, GAO examined a flyer and print and 
television advertisements about changes to Medicare enacted by the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 
Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003). The flyer contained 
information about new prescription drug benefits and price discount 
cards. GAO noted that while the materials contained opinion and notable 
factual omissions, the materials did not constitute impermissible 
publicity or propaganda. GAO explained: 

“To restrict all materials that have some political content or express 
support of an Administration’s policies would significantly curtail the 
recognized and legitimate exercise of the Administration’s authority to 
inform the public of its policies, to justify its policies and to rebut 
attacks on its policies. It is important for the public to understand 
the philosophical underpinnings of the policies advanced by elected 
officials and their staff in order for the public to evaluate and form 
opinions on those policies.” 

Id. at 10. 

In B-302992, Sept. 10, 2004, GAO upheld the Forest Service’s right to 
produce and distribute a brochure and video materials regarding its 
controversial policy on managing wildfire in the Sierra Nevada Forest. 
Because the materials sought to explain hundreds of pages of scientific 
data, official opinions, and documents of the Forest Service, they were 
not comprehensive and did not explain all the positive and negative 
aspects of the thinning policies adopted in its regional forest plan. 
GAO concluded that the Forest Service had the authority to disseminate 
information about its programs and policies and to defend those 

Apart from considerations of whether any particular law has been 
violated, GAO has taken the position in two audit reports that the 
government should not disseminate misleading information. In 1976, the 
former Energy Research and Development Administration (ERDA) published 
a pamphlet entitled Shedding Light On Facts About Nuclear Energy. 
Ostensibly created as part of an employee motivational program, ERDA 
printed copies of the pamphlet far in excess of any legitimate program 
needs, and inundated the state of California with them in the months 
preceding a nuclear safeguards initiative vote in that state. While the 
pamphlet had a strong pro-nuclear bias and urged the reader to “Let 
your voice be heard,” the pamphlet did not violate any anti-lobbying 
statute because applicable restrictions did not extend to lobbying at 
the state level. B-130961-O.M., Sept. 10, 1976. However, GAO’s review 
of the pamphlet found it to be oversimplified and misleading. GAO 
characterized it as propaganda not suitable for distribution to anyone, 
employees or otherwise, and recommended that ERDA cease further 
distribution and recover and destroy any undistributed copies. See GAO, 
Evaluation Of the Publication and Distribution Of “Shedding Light On 
Facts About Nuclear Energy,” EMD-76-12 (Washington, D.C.: Sept. 30, 

In a later report, GAO reviewed a number of publications related to the 
Clinch River Breeder Reactor Project, a cooperative government/industry 
demonstration project, and found several of them to be oversimplified 
and distorted propaganda, and as such questionable for distribution to 
the public. However, the publications were produced by the private 
sector components of the Project and paid for with utility industry 
contributions and not with federal funds. GAO recommended that the 
Department of Energy work with the private sector components in an 
effort to eliminate this kind of material, or at the very least ensure 
that such publications include a prominently displayed disclaimer 
statement making it clear that the material was not government 
approved. GAO, Problems With Publications Related To The Clinch River 
Breeder Reactor Project, EMD-77-74 (Washington, D.C.:
Jan. 6, 1978). 

Page 4-203 – Renumber section (4) as follows: 

(5) Pending legislation: Overview: 

Page 4-207 – Renumber section (5) as follows: 

(6) Cases involving “grassroots” lobbying violations: 

Page 4-210 – Renumber section (6) as follows: 

(7) Pending legislation: Cases in which no violation was found 

Page 4-212 – Insert the following after the first paragraph: 

In another case, the Social Security Administration (SSA), in its 
annual mailing of employment benefit reports to American workers, 
included material concerning the Social Security system’s potential 
financial problems and legislative initiatives to reform the Social 
Security program. Since none of the material called on the public to 
contact Congress and urge it to support SSA’s position on this or any 
other matter, GAO determined that there was no violation of the 
grassroots lobbying prohibition. GAO rejected the suggestion that the 
standard ought to be an assessment of the agency’s intent and whether 
the agency’s message would be likely to influence the public to contact 
Congress. The standard requiring evidence of a clear appeal by the 
agency to the public to contact congressional members to urge them to 
support the agency’s position is based upon the language and 
legislative history of the grassroots lobbying provisions. Moreover, 
the standard is consistent with a proper respect for the right and 
responsibility of federal agencies to communicate with the public and 
Congress regarding policies and activities. GAO stated: 

“We have no reason to think that Congress meant to preclude government 
officials from saying anything that might possibly cause the public to 
think about or take positions on the issues of the day and, as a result,
contact their elected representatives. To the contrary, we see the free 
and open exchange of ideas and views as central to our political system 
and, accordingly, remain reluctant to construe these laws in such a way 
that would unnecessarily or excessively constrain agency communications 
with the public or Congress.” 

B-304715, Apr. 27, 2005. 

Page 4-213 – Renumber section (7) as follows: 

(8) Pending legislation: Providing assistance to private lobbying 

Page 4-215 – Renumber section (8) as follows: 

(9) Promotion of legislative proposals: Prohibited activity short of 
grass roots lobbying: 

Pages 4-218 to 4-219 – Delete the entire section (9) entitled 
“Dissemination of political or misleading information”; the information 
contained therein has been integrated into the new section “(4) Purely 
partisan materials,” above. 

Page 4-219 – Insert the following after the third paragraph as a new 
section 11.c.(10): 
(10) Federal employees’ communications with Congress: 

Since 1998, annual appropriations acts each year have contained a 
governmentwide prohibition on the use of appropriated funds to pay the 
salary of any federal official who prohibits or prevents another 
federal employee from communicating with Congress. See Pub. L. No. 105-
61, § 640, 111 Stat. 1272, 1318 (Oct. 10, 1997). Specifically, this 
provision states: 

“No part of any appropriation contained in this or any other Act shall 
be available for the payment of the salary of any officer or employee 
of the Federal Government, who...prohibits or prevents, or attempts or 
threatens to prohibit or prevent, any other officer or employee of the 
Federal Government from having any direct oral or written communication
or contact with any Member, committee, or subcommittee of the Congress 
in connection with any matter pertaining to the employment of such other
officer or employee or pertaining to the department or agency of such 
other officer or employee in any way, irrespective of whether such 
communication or contact is at the initiative of such other officer or
employee or in response to the request or inquiry of such Member, 
committee, or subcommittee.” 

Pub. L. No. 108-199, div. F, title VI, § 618, 188 Stat. 3, 354 (Jan. 
23, 2004); Pub. L. No. 108-7, div. J, title VI, § 620, 117 Stat. 11, 
468 (Feb. 20, 2003). This provision has its antecedents in several 
older pieces of legislation, including section 6 of the Lloyd-La 
Follette Act of 1912, Pub. L. No. 336, ch. 389, 66 Stat. 539, 540 (Aug. 
24, 1912), which stated: “The right of persons employed in the civil 
service of the United States, either individually or collectively, to 
petition Congress, or any Member thereof, or to furnish information to 
either House of Congress, or to any committee or member thereof, shall 
not be denied or interfered with.” 

Congress enacted section 6 in response to concern over executive orders 
by Presidents Theodore Roosevelt and Howard Taft that prohibited 
federal employees from contacting Congress except through the head of 
their agency. The legislative history of this provision indicates that 
Congress intended to advance two goals: to preserve the First Amendment 
rights of federal employees regarding their working conditions and to 
ensure that Congress had access to programmatic information from 
frontline federal employees. See H.R. Rep. No. 62-388, at 7 (1912); 48 
Cong. Rec. 5634, 10673 (1912). 

In B-302911, Sept. 7, 2004, GAO concluded that the Department of Health 
and Human Services violated this provision by paying the salary of the 
Director of the Centers for Medicare & Medicaid Services (CMS) who 
prohibited the CMS Chief Actuary from providing certain cost estimates 
of Medicare legislation to Congress. The Director specifically 
instructed the Chief Actuary not to respond to any requests for 
information and advised that there would be adverse consequences if he 
released any information to Congress. GAO recognized that certain 
applications of the provision could raise constitutional separation of 
powers concerns; however, there was no controlling judicial opinion 
declaring the provision unconstitutional. GAO found that the provision, 
as applied to the facts in this case, precluded the payment of the CMS 
Director’s salary because he specifically prevented another employee 
from communicating with Congress, particularly in light of the narrow, 
technical nature of the information requested by Congress and 
Congress’s need for the information in carrying out its constitutional 
legislative duties. 

Page 4-221 – Replace footnote 139 with the following: 

[139] Pub. L. No. 104-65, 109 Stat. 691 (Dec. 19, 1995). For a 
discussion of the constitutionality of the Byrd Amendment in the grant 
context after passage of Public Law 104-65, see United States v. 
National Training & Information Center, No. 06-C-7076 (N.D. Ill.
Aug. 23, 2007). 

Page 4-227 – Replace the third full paragraph with the following: 

A 1983 decision illustrates another form of information dissemination 
that is permissible without the need for specific statutory support. 
Military chaplains are required to hold religious services for the 
commands to which they are assigned. 10 U.S.C. § 3547. Publicizing such 
information as the schedule of services and the names and telephone 
numbers of installation chaplains is an appropriate extension of this 
duty. Thus, GAO advised the Army that it could procure and distribute 
calendars on which this information was printed. 62 Comp. Gen. 566 
(1983). Applying a similar rationale, the decision also held that 
information on the Community Services program, which provides various 
social services for military personnel and their families, could be 
included. See also B-301367, Oct. 23, 2003 (affixing decals of the 
major units assigned to an Air Force base onto a nearby utility company 
water tower to inform the public of military activity in the area is a 
permissible use of appropriated funds); B-290900, Mar. 18, 2003 
(approving the Bureau of Land Management’s use of appropriated funds to 
pay its share of the costs of disseminating information under a 
cooperative agreement); B-280440, Feb. 26, 1999 (allowing the Border 
Patrol’s use of appropriated funds to purchase uniform medals that, in 
part, served to advance “knowledge and appreciation for the agency’s 
history and mission”). 

Page 4-232 – Replace the first full paragraph with the following: 

A statute originally enacted in 1913, now found at 5 U.S.C. § 3107, 
provides: “Appropriated funds may not be used to pay a publicity expert 
unless specifically appropriated for that purpose.” This provision 
applies to all appropriated funds. GAO has consistently noted certain 
difficulties in enforcing the statute. In GAO’s first substantive 
discussion of 5 U.S.C. § 3107, the Comptroller General stated “[i]n its 
present form, the statute is ineffective.” A-61553, May 10, 1935. The 
early cases[Footnote 151] identified three problem areas, summarized in 
B-81254(2), Feb. 28, 1975. 

Page 4-233 – Insert the following after the second paragraph: 

The legislative history of section 3107 provides some illumination. 
While it is not clear what was meant by “publicity expert,” there are 
indications that the provision would prohibit the use of press agents 
“to extol or to advertise” the agency or individuals within the agency. 
See, e.g., 50 Cong. Rec. 4410 (1913) (comments of Representative 
Fitzgerald, chairman of the committee that reported the bill)). There 
are also indications that the provision should not interfere with 
legitimate information dissemination regarding agency work or services. 
When some members expressed concern that the provision may affect the 
hiring of experts to “make our farm bulletins more readable to the 
public and more practical in their make-up,” supporters indicated that 
such activities would not be restricted by passage of the provision. Id.
at 4410 (colloquy between Representatives Lever and Fitzgerald). 

Page 4-234 – Insert the following after the first partial paragraph: 

GAO revisited the statute in B-302992, Sept. 10, 2004. The Forest 
Service had hired a public relations firm to help produce and 
distribute materials regarding its controversial land and resource 
management plan in the Sierra Nevada Forest, a plan consisting of 
hundreds of pages of scientific data and opinions. The Forest Service 
had hired the public relations firm to help make the plan’s scientific 
content more understandable to the public and media. GAO concluded that 
the Forest Service had not violated section 3107. GAO said that section 
3107 was not intended to impede legitimate informational functions of 
agencies and does not prohibit agencies from paying press agents and 
public affairs officers to facilitate and manage dissemination of 
agency information. GAO stated: “Instead, what Congress intended to 
prohibit with section 3107 is paying an individual ‘to extol or to 
advertise’ the agency, an activity quite different from disseminating 
information to the citizenry about the agency, its policies, practices, 
and products.” B-302992, Sept. 10, 2004. 

In 2005, GAO considered whether the Social Security Administration’s 
(SSA) use of the Gallup Organization to poll the public on Social 
Security program issues violated 5 U.S.C. § 3107. Citing to the 
discussion of the legislative history of section 3107 in B-302992, 
Sept. 10, 2004, GAO determined that SSA did not hire Gallup to—nor did 
Gallup in fact—extol or advertise SSA or individuals within SSA. 
Rather, SSA hired Gallup to engage in the legitimate agency activity of 
collecting information that the agency needed in order to carry out its 
Social Security program. SSA’s authority to survey the general public 
on its knowledge of the Social Security program and programs financing 
is inherent in the agency’s authority to administer that program, 42 
U.S.C. § 901(b). Since Gallup was assisting SSA in this endeavor, 
Gallup was not a “publicity expert” within the meaning of section 3107. 
B-305349, Dec. 20, 2005. 

12. Membership Fees: 

Page 4-234 – Replace the first full paragraph with the following and 
insert new footnote number 152a as follows: 

Appropriated funds may not be used to pay membership fees of an 
employee of the United States in a society or association. 5 U.S.C. § 
5946. The prohibition does not apply if an appropriation is expressly 
available for that purpose, or if the fee is authorized under the 
Government Employees Training Act. Under the Training Act, membership 
fees may be paid if the fee is a necessary cost directly related to the 
training or a condition precedent to undergoing the training. 5 U.S.C. 
§ 4109(b).[Footnote 152a] 

Page 4-234 – Insert the following for new footnote number 152a: 

[152a] The District of Columbia has specifically exempted its employees 
from the provisions of 5 U.S.C. § 5946 as well as the Government 
Employees Training Act, 5 U.S.C. ch. 41. See D.C. Official Code, 2001 
ed. § 1-632.02. 

Page 4-236 – Replace the first full paragraph with the following: 

As noted, an agency may purchase membership in its own name in a 
society or association since 5 U.S.C. § 5946 prohibits only memberships 
for individual employees. The distinction, however, is not a 
distinction in name only. An expenditure for an agency membership must 
be justified on a “necessary expense” theory. To do this, the 
membership must provide benefits to the agency itself. For example, in 
31 Comp. Gen. 398 (1952), the Economic Stabilization Agency was 
permitted to become a member of a credit association because members 
could purchase credit reports at reduced cost and the procurement of 
credit reports was determined to be necessary to the enforcement of the 
Defense Production Act. In 33 Comp. Gen. 126 (1953), the Office of 
Technical Services, Commerce Department, was permitted to purchase 
membership in the American Management Association. The appropriation 
involved was an appropriation under the Mutual Security Act to conduct 
programs including technical assistance to Europe, and the membership 
benefit to the agency was the procurement of Association publications 
for foreign trainees and foreign productivity centers. See also B-
305095, Dec. 8, 2005 (the United States Chemical Safety and Hazard 
Investigation Board appropriation is available to pay the membership 
fee for the Board to become a corporate associate member of the Risk 
Management and Decision Processes Center of the Wharton School, 
University of Pennsylvania, since the Board has determined that such 
membership will assist the Board in carrying out its duties under 42 
U.S.C. § 7412(r)(6)); 70 Comp. Gen. 190 (1991) (prohibition in 5 U.S.C. 
§ 5946 does not prohibit an agency from using appropriated funds to 
purchase access for its employees to a private fitness center’s 
exercise facilities as part of the agency’s health service program as 
authorized by 5 U.S.C. § 7901); B-241706, June 19, 1991 (Public Health 
Service may reimburse physicians for annual medical staff dues since 
hospital privileges are essential to the performance of the agency’s 
business); B-236763, Jan. 10, 1990 (GAO may pay fees for agency 
membership in certain professional organizations and designate 
appropriate GAO employees to attend functions for recruitment 

Page 4-239 – Replace the second paragraph with the following: 

Compare that case with the decision in B-286026, June 12, 2001, in 
which the Pension Benefit Guaranty Corporation (PBGC) asked whether it 
could use appropriated funds to pay, as training costs, fees for 
actuary accreditation. PBGC employs a number of actuaries to calculate 
pension benefits. Although actuaries do not need a professional license 
for employment, as part of a collective bargaining agreement PBGC 
proposed to use training funds to send actuaries to the examination 
review courses, provide on-the-job study time, and pay for the 
accreditation examinations. PBGC determined that this course of study 
and testing would enhance the ability of the PBGC actuaries to carry 
out their assignments. PBGC has the discretion under the Government 
Employees Training Act to determine that the review courses constitute 
appropriate training for its actuaries. Accordingly, GAO agreed that 
PBGC has authority, under 5 U.S.C. § 4109(a), to use appropriated funds 
for review courses and on-the-job study time. However, there was no 
authority to pay the cost of the accreditation examination itself, 
since a licensing accreditation examination does not fall within the 
Government Employees Training Act’s definition of training. In the 
absence of statutory authority, an agency may not pay the costs of its 
employees taking licensing examinations since professional 
accreditation is personal to the employee and should be paid with 
personal funds. Here, the actuarial accreditation belongs to the 
employee personally and would remain so irrespective of whether the 
employee remains with the federal government. 

The PBGC decision, B-286026, June 12, 2001, predated enactment of 
5 U.S.C. § 5757, which gave agencies the discretionary authority to 
reimburse employees for expenses incurred in obtaining professional 
credentials, including the costs of examinations. In B-302548,
Aug. 20, 2004, GAO determined that under 5 U.S.C. § 5757, an agency may 
pay only the expenses required to obtain the license or official 
certification needed to practice a particular profession. In that case, 
an employee who was a certified public accountant (CPA) asked her 
agency to pay for her membership in the California Society of Certified 
Public Accountants, which is voluntary and not a prerequisite for 
obtaining a CPA license in California. GAO held that payment for 
voluntary memberships in organizations of already credentialed 
professionals is prohibited under 5 U.S.C. § 5946, and section 5757 
does not provide any authority to pay such fees where the membership in 
the organization is not a prerequisite to obtaining the professional 
credential. Section 5757 is discussed in more detail in this chapter in 
the next section on attorneys’ expenses related to admission to the 
bar, and in section C.13.e on professional qualification expenses. 

Page 4-242 – Replace the first paragraph with the following: 

In 2001, section 1112 of the National Defense Authorization Act for 
Fiscal Year 2002, Pub. L. No. 107-107, 115 Stat. 1238 (Dec. 28, 2001) 
amended title 5, United States Code, by adding a new section 5757. 
Under 5 U.S.C. § 5757(a), agencies may, at their discretion, use 
appropriated funds to pay expenses incurred by employees to obtain 
professional credentials, state-imposed and professional licenses, 
professional accreditations, and professional certifications, including 
the costs of examinations to obtain such credentials. This authority is 
not available to pay such fees for employees in or seeking to be hired 
into positions excepted from the competitive service because of the 
confidential, policy-determining, policymaking, or policy-advocating 
character of the position. 5 U.S.C. §b). Nothing in the statute or its 
legislative history defines or limits the terms “professional 
credentials,” “professional accreditation,” or “professional 
certification.” Agencies have the discretion to determine whether 
resources permit payment of credentials, and what types of professional 
expenses will be paid under the statute. Thus, if an agency determines 
that the fees its attorneys must pay for admission to practice before 
federal courts are in the nature of professional credentials or 
certifications, the agency may exercise its discretion under 5 U.S.C. § 
5757 and pay those fees out of appropriated funds. B-289219, Oct. 29, 
2002. Also, GAO has stated that under 5 U.S.C. § 5757 an agency may pay 
the expenses of employees’ memberships in state bar associations when 
membership is required to maintain their licenses to practice law. See 
B-302548, Aug. 20, 2004 (note that this decision concerned membership 
in a certified public accountants’ (CPA) professional organization that 
was not required as a condition of the CPA license). 

13. Personal Expenses and Furnishings: 

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Another related line of decisions addresses the purchase of bottled 
drinking water for use in federal work facilities where the safety of 
municipal or locally provided water is at issue. Generally, 
appropriated funds are not available to pay for bottled water for the 
personal use of employees. GAO has made an exception where a building’s 
water supply is unhealthy or unpotable. See, for example, B-247871, 
Apr. 10, 1992, where a problem with the water supply system in a 
building caused lead content to exceed the maximum contaminant level 
and justified the purchase of bottled water for employees until the 
problems with the system could be resolved. Compare B-303920, Mar. 21, 
2006 (relief denied to certifying officer who improperly approved 
payments for bottled water for employees where there was no evidence 
that drinking water in the building was unhealthy). 

Page 4-259 – Insert the following before the last paragraph: 

A different type of situation arose in B-307316, Sept. 7, 2006. An Army 
captain held dual citizenship with the United States and with Turkey. 
In order to obtain a security clearance required for his assignment to 
the United States Army Center for Health Promotion and Preventive 
Medicine (Army Center), he had to renounce his Turkish citizenship. GAO 
determined that the expenses incurred for the renunciation of Turkish 
citizenship in order to obtain the security clearance were primarily 
for the benefit of the government since the required security clearance 
provided assurance to the government that sensitive information will be 
safe and the renunciation facilitated the granting of the clearance. 
Any personal benefit the captain would receive from the renunciation 
was incidental to the performance of his duties. Therefore, the Army 
Center could reimburse the captain for the renunciation expenses. 

Page 4-260 – Replace the first paragraph with the following: 

Neither the statute nor its legislative history defines the terms 
“professional credentials,” “professional accreditation,” and 
“professional certification.” The statute and the 1994 decision 
together appear to cover many, if not most, qualification expenses that 
GAO previously found to be personal to the employee, including 
actuarial accreditation (B-286026, June 12, 2001), licenses to practice 
medicine (B-277033, June 27, 1997), a Certified Government Financial 
Manager designation (B-260771, Oct. 11, 1995), and professional 
engineering certificates (B-248955, July 24, 1992). See also
B-302548, Aug. 20, 2004 (certified public accountant fees) and section 
C.12.b of this chapter for a discussion of attorneys’ bar membership 

Page 4-264 – Replace the last partial paragraph with the following: 

In 56 Comp. Gen. 81 (1976), the rationale of these cases was extended 
to Armed Forces change of command ceremonies. The decision held that 
the cost of printing invitations to a change of command ceremony for a 
Coast Guard vessel could be paid from the Coast Guard’s appropriations 
for operating expenses. In view of the traditional role of change of 
command ceremonies in the military, the Comptroller General concluded 
that the invitations were not inherently personal. (The case was 
therefore distinguishable from the decisions previously discussed 
prohibiting the use of public funds for greeting cards.) In another 
case, the expenditure of official reception and representation (OR&R) 
funds for costs of a change of command reception were determined to be 
payable from OR&R funds because the reception met the prerequisites for 
an “official reception for an incoming commander.” 69 Comp. Gen. 242 
(1990). (See section C.5 of this chapter for a more general discussion 
of related subject matter.) 

Page 4-272 – Insert the following, including the reference to new 
footnote number 166a, after the first partial paragraph: 

As a general rule, then, employees must bear the costs of 
transportation between their residences and official duty locations, 
even when unusual conditions may increase commuting costs. 60 Comp. 
Gen. 633, 635 (1981). Congress has authorized agencies to use 
appropriations for “the maintenance, operation, or repair of any 
passenger carrier,” but “only to the extent that such carrier is used 
to provide transportation for official purposes.” 31 U.S.C. 
§ 1344(a)(1). It has specified that “transporting any individual... 
between such individual’s residence and such individual’s place of 
employment is not transportation for an official purpose.” Id. 

For example, in B-305864, Jan. 5, 2006, GAO held that the United States 
Capitol Police (USCP) could not use appropriated funds for a shuttle 
bus service from its parking lot to a new USCP facility or any other 
USCP building, where the only purpose of the shuttle service is to 
facilitate the commutes of USCP employees. The employee’s arrival at 
the parking lot is viewed as an intermediate stop—like a subway or bus 
stop—within the totality of the commute from home to office. Therefore, 
the trip from the parking lot to the new USCP facility is part of the 
employee’s commute and a personal expense. GAO noted that there would 
be no objection to the use of appropriated funds for a shuttle bus from 
USCP headquarters to the new facility and other USCP buildings, so long 
as USCP established a legitimate operational need to shuttle persons 
among those buildings and its purpose is not to aid employees’ 
commutes. If USCP established a legitimate operational need for shuttle 
service among USCP buildings, there would also be no objection to any 
incidental use of the service by USCP employees to complete their home-
to-work commutes, provided, of course, that there is no additional 
expenditure of time or money by the government in order to accommodate 
these riders. Id. 

Although generally agencies may not pay commuting costs, agencies may 
exercise administrative discretion and provide transportation on a 
temporary basis when there is a clear and present danger to government 
employees or an emergency threatens the performance of vital government 
functions. 62 Comp. Gen. 438, 445 (1983). Under 31 U.S.C. §b)(9), an 
agency may provide for home-to-work transportation for an employee if 
the agency head determines that “highly unusual circumstances present a 
clear and present danger, that an emergency exists, or that other 
compelling operational considerations make such transportation 
essential to the conduct of official business.” Section 1344(b)(9) also 
stipulates, however, that exceptions granted under it must be “in 
accordance with” 31 U.S.C. § 1344(d), which limits emergency exceptions 
to periods of up to 15 calendar days, subject to periodic renewal for 
up to a total of 180 additional calendar days, under specified detailed 
procedures.[Footnote 166a] 

GAO had occasion to consider the provisions in 31 U.S.C. § 1344 in B-
307918, Dec. 20, 2006. The National Logistic Support Center (NLSC) was 
created by the National Oceanic and Atmospheric Administration to 
maintain a stockpile warehouse and ship replacement parts and equipment 
crucial to ensuring the proper functioning of equipment in the weather 
forecasting stations across the country. Since NLSC receives between 
200 and 400 requests each year for emergency service outside of normal 
office hours, NLSC schedules employees to attend to these emergency, 
after-hours service requests on an “on-call” basis. When NLSC receives 
a request for after-hours emergency service, it notifies the on-call 
employees who return from their homes to their NLSC offices to respond 
to the requests, prepare the required parts for shipment to the 
affected weather station, deliver them to the shipping vendor, and 
return home. GAO determined that the prohibition in 31 U.S.C. § 
1344(a)(1) precluded NLSC from using appropriated funds to reimburse 
its employees for the mileage between their residences and their NLSC 
offices since the statute precludes the payment of commuting expenses 
regardless of whether it is incident to a regular work schedule or the 
on-call work schedule described here. The emergency exception 
recognized in 31 U.S.C. §§ 1344(b)(9) and (d) did not apply because it 
is limited to brief, specific periods and NLSC’s proposal contemplated 
reimbursing the on-call employees for commuting costs on a continual 
basis—without limit or end date. 

Page 4-272 – Insert the following text for new footnote number 166a: 

[166a] The detailed procedures require agencies to make written 
determinations that name the specific employees, explain the reasons 
for their exemption, and specify the duration of their exemptions; they 
preclude agency heads from delegating this authority to another; and 
they require congressional notification of the above information for 
each exemption granted. 31 U.S.C. § 1344(d). Other subsections require 
the General Services Administration to promulgate governmentwide 
regulations and require agencies to maintain logs detailing all home-to-
work transportation provided by the agency. 31 U.S.C. §§ 1344(e), 

Page 4-274 – Insert the following after the first partial paragraph: 

In 2007, GAO considered whether an agency may use its appropriated 
funds to reimburse employees for home high-speed internet access under 
its telecommuting program. Public Law 104-52 requires that the agency 
ensure that adequate safeguards against private misuse exist and that 
the service is necessary for direct support of the agency’s mission. 
Pub. L. No. 104-52, § 620. As part of its program, the Patent and 
Trademark Office (PTO) would require telecommuting employees to 
maintain high speed internet access that meets certain minimum 
technical requirements at their residence or other designated 
alternative work site, and it proposed to reimburse participating 
employees for the costs incurred in their use of the internet access 
related to PTO work. Employees would be eligible for 50 or 100 percent 
reimbursement (up to a maximum of $100 per month) depending on the 
amount of monthly business use of the internet service. To obtain 
reimbursement, employees each month would be required to submit copies 
of invoices from the internet service provider and to attest to the 
appropriate percentage of internet service used for work-related 
purposes. GAO determined that PTO could use its appropriated funds to 
reimburse telecommuting employees for the costs of the high-speed 
internet access service since such service, “an essential tool in 
today’s workplace,” is related or “necessary equipment” authorized by 
Public Law 104-52. B-308044, Jan. 10, 2007. In doing so, GAO 
recommended that PTO periodically review the reimbursements to ensure 
that it has adequate safeguards against private misuse and it is 
reimbursing employees for home internet service used for official 
purposes. Id. 

Page 4-275 – Insert the following after the second full paragraph: 

The Department of Homeland Security, Customs and Border Protection 
(Customs), asked whether it could use its Salaries and Expenses 
appropriations to pay for relocation expenses its employees who 
currently reside in Canada or Mexico would incur in order to comply 
with a new agency directive that their primary residence be in the 
United States. The employees work at border stations within the United 
States. In response to heightened security concerns, Customs issued a 
directive requiring employees assigned to duty stations in the United 
States to maintain their primary residence in the United States. The 
Federal Travel Regulation, 41 C.F.R. chs. 300–304, does not address the 
question of benefits for employees’ relocations that do not involve a 
change in duty station. Recognizing Customs’ determination that U.S. 
residency enables its border workforce to better carry out is mission, 
GAO determined that Customs’ Salaries and Expenses appropriations were 
available to pay the relocation expenses if the agency chose to do so. 
B-306748, July 6, 2006. 

15. State and Local Taxes: 

Page 4-286 – Insert the following after the third paragraph: 

The complexity can be seen in a 2006 decision in which GAO considered 
whether a county “surface water management (SWM)” fee was a permissible 
fee for a service provided or an impermissible tax against the federal 
government. B-306666, June 5, 2006. A county assessed SWM fees to 
implement management programs for controlling runoff pollution under 
the federal Clean Water Act. 33 U.S.C. § 1329. The Clean Water Act also 
requires federal agencies to comply with state and local water 
pollution requirements, “including the payment of reasonable service 
charges.” 33 U.S.C. § 1323(a). We concluded that the SWM fee was not a 
service charge but actually a tax because the county’s storm water 
management was more like a core government service providing 
undifferentiated benefits to the entire public than a narrowly 
circumscribed benefit incident to a voluntary act or a service or 
convenience provided. B-306666, June 5, 2006. Although the Clean Water 
Act waives sovereign immunity from certain state and local 
environmental regulations and fees, it does not waive immunity from 
taxation. Such a waiver must clearly and expressly confer the privilege 
of taxing the federal government. Id. at 11. 

Page 4-289 – Replace the second paragraph with the following: 

The rule that the government is constitutionally immune from a “vendee 
tax” but may pay a valid “vendor tax”—even if the government ultimately 
bears its economic burden—has been recognized and applied in numerous 
Comptroller General decisions. E.g., B-302230, Dec. 30, 2003; B-288161, 
Apr. 8, 2002; 46 Comp. Gen. 363 (1966); 24 Comp. Gen. 150 (1944); 23 
Comp. Gen. 957 (1944); 21 Comp. Gen. 1119 (1942); 21 Comp. Gen. 733 
(1942). The same rule applies to state tax levies on rental fees. See 
49 Comp. Gen. 204 (1969); B-168593, Jan. 13, 1971; B-170899, Nov. 16, 

Page 4-298 – Replace the first full paragraph with the following: 

Naturally, the determination of whether a particular assessment can be 
paid does not depend on the taxing authority’s characterization of the 
assessment. Thus, payment has been denied where the assessment was 
termed a “service charge” (B-306666, June 5, 2006), a “benefit 
assessment” (B-168287, Nov. 9, 1970), a “systems development charge” (B-
183094, May 27, 1975), or an “invoice for services” (49 Comp. Gen. 72 

[End of chapter 4] 

Chapter 5: Availability of Appropriations: Time: 

Page 5-1 – Replace part of the index for section B.1 as follows: 

B. The Bona Fide Needs Rule
a. Introduction: 
b. The Concept: 
c. “Parking” or “Banking” Funds: 

B. The Bona Fide Needs Rule: 

1. Background: 

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While the rule itself is universally applicable, determination of what 
constitutes a bona fide need of a particular fiscal year depends 
largely on the facts and circumstances of the particular case. B-308010,
Apr. 20, 2007; 70 Comp. Gen. 469, 470 (1991); 44 Comp. Gen. 399, 401 
(1965); 37 Comp. Gen. at 159. 

Page 5-15 – Insert the following new section c., including the 
references to new footnote numbers 8a, 8b, 8c, and 8d, after the first 
full paragraph: 

c.“Parking” or “Banking” Funds“: 

Parking” or “banking” funds are terms used to describe a transfer of 
funds to a revolving fund through an interagency agreement in an 
attempt to keep funds available for new work after the period of 
availability for those funds expires.8a Parking usually occurs when an 
agency transfers fixed-year funds to a revolving or franchise fund in 
the mistaken belief that, by doing so, the funds lose their fixed-year 
character and remain available indefinitely. However, an agency may not 
extend the availability of its appropriations by transferring them to 
another agency. B-288142, Sept. 6, 2001. Use of these expired parked 
funds violates the bona fide needs rule. An interagency agreement must 
be based upon a legitimate, specific, and adequately documented 
requirement representing a bona fide need of the year in which the 
order is made. 

GAO has reported on the parking of funds through interagency 
agreements, and, over a period of several years, Department of Defense 
(DOD) officials, including the Comptroller, warned against the misuse 
of interagency agreements to park or bank funds.[Footnote 8b] In 
addition, the Inspectors General for DOD and the Department of the 
Interior (Interior) have faulted their agencies for misusing 
interagency transactions in this fashion.8c In October 2006, the 
Treasury issued a bulletin instructing ordering agencies to monitor the 
activity and age of an interagency order and where there has been no 
activity for more than 180 days, the ordering agency “shall determine 
the reasons for the lack of activity on the order.” I TFM Bulletin No. 
2007-03, Attachment I, ¶ III.B.2 (Oct. 1, 2006). 

In a 2007 decision, GAO found that DOD improperly parked funds when it 
transferred fiscal year appropriations to an Interior franchise fund, 
GovWorks.[Footnote 8d] B-308944, July 17, 2007. GovWorks was 
established to provide common administrative services to Interior and 
other agencies by procuring goods and services from vendors on behalf 
of federal agencies on a competitive basis. DOD used Military 
Interdepartmental Purchase Requests (MIPRs) to transfer funds to 
GovWorks but did not identify the specific items or services that DOD 
wanted GovWorks to acquire on its behalf until after the funds had 
expired. GAO concluded that DOD had improperly parked funds with 
GovWorks by transferring funds from one fiscal year for use by GovWorks 
for goods and services after the period of availability for those funds 
had expired. GAO pointed out that, by doing so, “officials of both 
agencies acted in disregard of...the bona fide needs rule.” Id. at 13. 

Page 5-15 – Insert the following as new footnote number 8a: 

[8a] DOD, Undersecretary of Defense, Comptroller, Memorandum for the 
Assistant Secretary of the Army (Financial Management and Comptroller), 
et al., Proper Use of Interagency Agreements for Non-Department of 
Defense Contracts Under Authorities Other than the Economy Act, Mar. 
24, 2005 (2005 DOD Memorandum). 

Page 5-15 – Insert the following as new footnote number 8b: 

[8b] See GAO, Interagency Contracting: Improved Guidance, Planning, and 
Oversight Would Enable the Department of Homeland Security to Address 
Risks, GAO-06-996 (Washington, D.C.: Sept. 27, 2006); Improper Use of 
Industrial Funds By Defense Extended the Life of Appropriations Which 
Otherwise Would Have Expired, GAO/AFMD-84-34 (Washington, D.C.: June 5, 
1984); 2005 DOD Memorandum; DOD, Undersecretary of Defense, Memorandum 
for the Chairman of the Joint Chiefs of Staff, et al., Fiscal 
Principles and Interagency Agreements, Sept. 25, 2003. 

Page 5-15 – Insert the following as new footnote number 8c: 

[8c] DOD, Office of Inspector General, FY 2005 DOD Purchases Made 
Through the Department of the Interior, No. D-2007-044
(Jan. 16, 2007); Interior, Office of the Inspector General, FY 2005 
Department of the Interior Expenses Made on Behalf of the Department of 
Defense, No. X-IN-MOA-0018-2005 (Jan. 9, 2007). 

Page 5-15 – Insert the following as new footnote number 8d: 

[8d] GovWorks is officially known as the Acquisition Services 
Directorate. See [hyperlink,] (last visited 
Feb. 8, 2008). 

2. Future Years’ Needs: 

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An interesting situation involving a contract with renewable options 
arose in B-308026, Sept. 14, 2006. The National Labor Relations Board 
(NLRB) entered into a contract with Electronic Data Systems for the 
acquisition of ongoing operational and technical support for its 
automated Case Activity Tracking System. The contract’s initial 
performance period was October 1, 2001, through September 30, 2002, 
with options through September 30, 2015. On September 30, 2005, NLRB 
exercised option four, specifying a performance period of October 1, 
2005, through September 30, 2006, and charged the obligation to its 
fiscal year 2005 appropriation. In a June 2006 report, the NLRB 
Inspector General concluded that NLRB had improperly obligated its 
fiscal year 2005 appropriation because obligating the fiscal year 2005 
appropriation for the performance of severable services that would 
occur entirely in fiscal year 2006 was a violation of the bona fide 
needs rule. The Inspector General said that NLRB should charge the 
obligation against its fiscal year 2006 appropriation. NLRB proposed to 
remedy its improper obligation by modifying the contract to have the 
performance period of the contract run from September 30, 2005, through 
September 29, 2006, instead of October 1, 2005, through September 30, 
2006. NLRB explained that it had intended a performance period 
commencing September 30, 2005, but due to an inadvertent ministerial 
error this was not reflected in the contract. GAO agreed with the 
Inspector General. GAO said that, given the terms of the contract, NLRB 
had incurred an obligation against its fiscal year 2006 appropriation 
and that NLRB should adjust its accounts accordingly. NLRB could not 
remedy its improper obligation by adjusting its contract’s performance 
period instead of its accounts. 

“It is one thing for an agency to take full advantage of available 
appropriations, maximizing the effectiveness of federal funds entrusted 
to its use; it is quite another thing, however, for an agency to alter 
executed contracts in order to reach expired funds—funds that Congress 
appropriated for agency programs and activities of the previous fiscal 
year. That is what NLRB proposes to do. Were NLRB to adjust the fourth 
option’s performance period, its sole reason for doing so would be to 
reach fiscal year 2005 appropriations because, in September 2005, that 
is what NLRB had intended to do. However, NLRB’s fiscal year 2005 
appropriation has expired. 

“...Instead of adjusting its obligations to reflect what actually 
occurred, NLRB would revise what actually occurred so that it can 
finance option four with fiscal year 2005 funds....The account
adjustment authority of [31 U.S.C. § 1553(a)] is not a palliative for 
errors of this sort.” 

B-308026, Sept. 14, 2006, at 5–6 (footnote omitted). 

Page 5-17 – Insert the following after the first full paragraph: 

In 2007, GAO considered how this related to seven end-of-the-fiscal 
year subscription renewals. The National Labor Relations Board (NLRB) 
purchased seven Web site database subscriptions to support the work of 
its attorneys and other professionals. B-309530, Sept. 17, 2007. In 
September 2006, NLRB placed orders to renew each of these subscriptions 
with the respective vendors, stating that it needed to have the orders 
placed for the renewal before the existing subscriptions expired in 
order to ensure uninterrupted delivery. Each order placed was for a 
period of 1 year beginning on the day following the expiration of the 
existing subscription and, for each, the agency obligated its fiscal 
year 2006 annual appropriation. For five subscriptions, the performance 
period was from October 1, 2006, to September 30, 2007; for two 
subscriptions, the performance period was from November 1, 2006, to 
October 31, 2007. Id. GAO determined that NLRB did not violate the bona 
fide needs rule for the five Web site database subscription renewals 
that it needed to have in place on October 1, 2006, the first day of 
fiscal year 2007. Even though delivery of the renewed subscriptions 
would occur entirely in fiscal year 2007, NLRB reasonably determined 
that the renewal orders needed to be placed in fiscal year 2006 to 
ensure continued receipt of the subscriptions past the expiration of 
the existing subscriptions on September 30, 2006. Id. However, NLRB 
violated the bona fide needs rule when it obligated fiscal year 2006 
funds to renew the two Web site database subscriptions that were not 
due to expire until October 31, 2006. These subscription renewals were 
a bona fide need of fiscal year 2007 for which fiscal year 2007 
appropriations should have been used. Id. 

5. Services Rendered beyond the Fiscal Year: 

Page 5-24 – Replace the second paragraph after the quote with the 

The rationale of 23 Comp. Gen. 370 was applied in 59 Comp. Gen. 386 
(1980) (requisition for printing accompanied by manuscript sufficient 
for Government Printing Office to proceed with job). See, e.g., 65 
Comp. Gen. 741 (1986) (contract for study and final report on 
psychological problems among Vietnam veterans); B-257977, Nov. 15, 1995 
(contract for 2-year intern training program since interns are required 
to complete entire training program to be eligible for noncompetitive 
Presidential Management Intern appointment). See also B-305484, June 2, 
2006 (appointment of an arbitrator to hear a case is in the nature of a 
nonseverable service and the National Mediation Board should record an 
obligation of the current appropriation based on the estimated cost of 
paying the arbitrator to submit an award); 73 Comp. Gen. 77 (1994) 
(subsequent modifications to Fish and Wildlife Service research work 
orders should be charged to the fiscal year current when the work 
orders were issued since the purpose of the research is to provide a 
final research report and the services under the contract are 
nonseverable). The last two decisions are noteworthy because they 
pointed out that limitation of funds clauses or subject to availability 
clauses do not affect the application of the bona fide needs rule and 
the severable test. B-305484; 73 Comp. Gen. at 80. 

8. Multiyear Contracts: 

Page 5-41 – Replace the first full paragraph with the following: 

If an agency is contracting with fiscal year appropriations and does 
not have multiyear contracting authority, one course of action, apart 
from a series of separate fiscal year contracts, is a fiscal year 
contract with renewal options, with each renewal option (1) contingent 
on the availability of future appropriations and (2) to be exercised 
only by affirmative action on the part of the government (as opposed to 
automatic renewal unless the government refuses). Leiter v. United 
States, 271 U.S. 204 (1926); 66 Comp. Gen. 556 (1987); 36 Comp. Gen. 
683 (1957); 33 Comp. Gen. 90 (1953); 29 Comp. Gen. 91 (1949); 28 Comp. 
Gen. 553 (1949); B-88974, Nov. 10, 1949. The inclusion of a renewal 
option is key; with a renewal option, the government incurs a financial 
obligation only for the fiscal year, and incurs no financial obligation 
for subsequent years unless and until it exercises its right to renew. 
The government records the amount of its obligation for the first 
fiscal year against the appropriation current at the time it awards the 
contract. The government also records amounts of obligations for future 
fiscal years against appropriations current at the time it exercises 
its renewal options. The mere inclusion of a contract provision 
conditioning the government’s obligation on future appropriations 
without also subjecting the multiyear contract to the government’s 
renewal option each year would be insufficient. Cray Research, Inc. v. 
United States, 44 Fed. Cl. 327, 332 (1999). Thus, in 42 Comp. Gen. 272 
(1962), the Comptroller General, while advising the Air Force that 
under the circumstances it could complete that particular contract, 
also advised that the proper course of action would be either to use an 
annual contract with renewal options or to obtain specific multiyear 
authority from Congress. Id. at 278. 

Page 5-43 – Insert the following after the quoted language in the first 
partial paragraph: 

Another course of action for an agency with fiscal year money to cover 
possible needs beyond that fiscal year is an indefinite-delivery/ 
indefinite-quantity (IDIQ) contract. An IDIQ contract is a form of an 
indefinite-quantity contract, which provides for an indefinite quantity 
of supplies or services, within stated limits, during a fixed period. 
48 C.F.R. § 16.504(a). Under an IDIQ contract, actual quantities and 
delivery dates remain undefined until the agency places a task or 
delivery order under the contract. When an agency executes an 
indefinite-quantity contract such as an IDIQ contract, the agency must 
record an obligation in the amount of the required minimum purchase. At 
the time of award, the government commits itself to purchase only a 
minimum amount of supplies or services and has a fixed liability for 
the amount to which it committed itself. See 48 C.F.R. §§ 16.501-
2(b)(3) and 16.504(a)(1). The agency has no liability beyond its 
minimum commitment unless and until it places additional orders. An 
agency is required to record an obligation at the time it incurs a 
legal liability. 65 Comp. Gen. 4, 6 (1985); B-242974.6, Nov. 26, 1991. 
Therefore, for an IDIQ contract, an agency must record an obligation 
for the minimum amount at the time of contract execution. In B-302358, 
Dec. 27, 2004, GAO determined that the Bureau of Customs and Border 
Protection’s (Customs) Automated Commercial Environment contract was an 
IDIQ contract. As such, Customs incurred a legal liability of 
$25 million for its minimum contractual commitment at the time of 
contract award. However, Customs failed to record its $25 million 
obligation until 5 months after contract award. GAO determined that to 
be consistent with the recording statute, 31 U.S.C. § 1501(a)(1), 
Customs should have recorded an obligation for the contract minimum of 
$25 million against a currently available appropriation for the 
authorized purpose at the time the IDIQ contract was awarded. 

9. Specific Statutes Providing for Multiyear and Other Contracting 

Page 5-46 – Replace the third full paragraph with the following: 

The Federal Acquisition Streamlining Act of 1994 (FASA) and related 
statutes extended multiyear contracting authority with annual funds to 
nonmilitary departments.[Footnote 30] FASA authorizes an executive 
agency to enter into a multiyear contract for the acquisition of 
property or services for more than 1, but not more than 5 years, if the 
agency makes certain administrative determinations. 41 U.S.C. § 254c. 
Related laws extend this authority to various legislative branch 
agencies.31 Through FASA and the related laws, Congress has relaxed the 
constraints of the bona fide needs rule by giving agencies the 
flexibility to structure contracts to fund the obligations up front, 
incrementally, or by using the standard bona fide needs rule approach. 
B-277165, Jan. 10, 2000. To the extent an agency elects to obligate a 5-
year contract incrementally, it must also obligate termination costs. 
Cf. B-302358, Dec. 27, 2004 (since the contract at issue was an 
indefinite-delivery/indefinite-quantity contract, it was not subject to 
the requirements of 41 U.S.C. § 254c and the agency did not need to 
obligate estimated termination costs at the time of contract award). 

C. Advance Payments: 

1. The Statutory Prohibition: 

Page 5-53 – Insert the following before the first full paragraph: 

Another example of a statutory exception was considered in B-306975, 
Feb. 27, 2006. The National Archives and Records Administration (NARA) 
stores temporary and pre-archival records that belong to it and other 
federal agencies in its Records Center Programs Facilities. Other 
federal agencies may enter into agreements with NARA to transfer and 
store records at the NARA records centers. The Treasury and General 
Appropriations Act, 2000, established the Records Center Revolving Fund 
to pay for expenses and equipment necessary to provide the storage and 
authorized agencies to make advance payments to the Revolving Fund. 
Pub. L. No. 106-58, title IV, 113 Stat. 430, 460–61 (Sept. 29, 1999). 
GAO had no objection, therefore, to NARA’s proposal to bill its 
customers at the beginning of each month based on its estimate of 
services it will provide that month and to adjust the next month’s bill 
to reflect actual costs of services rendered. However, if a customer 
advances fiscal year funds for September’s estimated costs, NARA may 
not credit excess amounts in adjusting October’s bill but rather must 
return the excess to the customers. These funds would not be available 
for obligation of the next fiscal year commencing October 1. Likewise, 
if a customer agency owes more than the amount advanced in September, 
the customer must cover the underpayment from the previous fiscal 
year’s funds. B-306975, Feb. 27, 2006. 

D. Disposition of Appropriation Balances: 

3. Expired Appropriations Accounts: 

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During the 5-year period, the expired account balance may be used to 
liquidate obligations properly chargeable to the account prior to its 
expiration.50 The expired account balance also remains available to 
make legitimate obligation adjustments, that is, to record previously 
unrecorded obligations and to make upward adjustments in previously 
under recorded obligations. For example, Congress appropriated funds to 
provide education benefits to veterans under the so-called “GI bill,” 
codified at 38 U.S.C. § 1662. Prior to the expiration of the 
appropriation, the Veterans Administration (VA) denied the benefits to 
certain Vietnam era veterans. The denial was appealed to the courts. 
The court determined that certain veterans may have been improperly 
denied benefits and ordered VA to entertain new applications and 
reconsider the eligibility of veterans to benefits. VA appealed the 
court order. Prior to a final resolution of the issue, the 
appropriation expired. GAO determined that, consistent with 31 U.S.C. § 
1502(b),[Footnote 51] the unobligated balance of VA’s expired 
appropriation was available to pay benefits to veterans who filed 
applications prior to the expiration of the appropriation or who VA 
determined were improperly denied education benefits. 70 Comp. Gen. 225 
(1991). For a further discussion of the availability of funds between 
expiration and closing of an account, see B-301561, June 14, 2004 and B-
265901, Oct. 14, 1997. 

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Unobligated balances in the expired account cannot be used to satisfy 
an obligation properly chargeable to current appropriations (B-308944,
July 17, 2007; 50 Comp. Gen. 863 (1971)), or to any other expired 
account.52 See Chapter 5, section B.1.c. The authority of 31 U.S.C. 
§ 1553(a) is intended to permit agencies to adjust their accounts to 
more accurately reflect obligations and liabilities actually incurred 
during the period of availability. 63 Comp. Gen. 525, 528 (1984). 
However, arbitrary deobligation in reliance upon the authority to make 
subsequent adjustments is not consistent with the statutory purpose. B-
179708, July 10, 1975. 

4. Closed Appropriation Accounts: 

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Once an account has been closed: 

“Obligations and adjustments to obligations that would have been 
properly chargeable to that account, both as to purpose and in amount, 
before closing and that are not otherwise chargeable to any current 
appropriation account of the agency may be charged to any current 
appropriation account of the agency available for the same purpose.” 

31 U.S.C. § 1553(b)(1). See also B-301561, June 14, 2004. 

5. Exemptions from the Account Closing Procedures: 

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To the extent of its applicability, the statutory scheme found at 31 
U.S.C. §§ 1551–1558 provides the exclusive method for the payment of 
obligations chargeable to expired appropriations. B-101860, Dec. 5, 
1963. Thus, there is generally no authority to transfer appropriations 
to some form of trust fund or working fund for the purpose of 
preserving their availability. Id.; B-308944, July 17, 2007 (the 
Department of Defense transferred fiscal year funds to a franchise fund 
in an attempt to impermissibly extend the funds’ availability). See 
Chapter 5, section B.1.c. See also 31 U.S.C. § 1532, which prohibits 
the transfer of appropriations to a working fund without statutory 
authority. In B-288142, Sept. 6, 2001, customer agencies made advances 
from their fixed period appropriations to the Library of Congress for 
deposit to the credit of the no-year FEDLINK revolving fund. The 
advances were used by the Library of Congress to pay the cost of 
service provided to the agencies by Library of Congress contractors. 
Once the service was provided and the cost determined, the Library 
discovered that some agencies had advanced amounts in excess of the 
cost of the service ordered. We determined that the Library of Congress 
lacked authority to apply the excess amount to pay for orders for 
service placed after the expiration of the fixed period appropriation 
charged with the advance. 

[End of chapter 5] 

[End of Volume 1] 

Volume 2: 
Chapter 6 – Availability of Appropriations: Amount: 

Chapter 7 – Obligation of Appropriations: 

Chapter 8 – Continuing Resolutions: 

Chapter 9 – Liability and Relief of Accountable Officers: 

Chapter 10 – Federal Assistance: Grants and Cooperative Agreements: 

Chapter 11– Federal Assistance: Guaranteed and Insured Loans (no 
updates this year): 

Chapter 6: Availability of Appropriations: Amount: 

B. Types of Appropriation Language: 

1. Lump-Sum Appropriations: 

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The answer to these questions is one of the most important principles 
of appropriations law. The rule, simply stated, is this: Restrictions 
on a lump-sum appropriation contained in the agency’s budget request or 
in legislative history are not legally binding on the department or 
agency unless they are carried into (specified in) the appropriation 
act itself, or unless some other statute restricts the agency’s 
spending flexibility. See Hein v. Freedom From Religion Foundation, 
Inc., ___ U.S. ___, 127 S. Ct. 2553, 2568 n.7 (2007) and cases cited. 
This is an application of the fundamental principle of statutory 
construction that legislative is not law and carries no legal 
significance unless “anchored in the text of the statute.” Shannon v. 
United States, 512 U.S. 573, 583 (1994).5 Of course, the agency cannot 
exceed the total amount of the lump-sum appropriation, and its spending 
must not violate other applicable statutory restrictions.[Footnote 6] 
The rule applies equally whether the legislative history is mere 
acquiescence in the agency’s budget request or an affirmative 
expression of intent. 

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The Court noted that while the agency had repeatedly informed Congress 
about the program in question, “as we have explained, these 
representations do not translate through the medium of legislative 
history into legally binding obligations.” Id. at 194. Subsequent 
judicial decisions have, of course, followed this approach. E.g., Hein 
v. Freedom From Religion Foundation, Inc., ___ U.S. ___, 127 S. Ct. 
2553, 2568 n.7 (2007); State of California v. United States, 104 F.3d 
1086, 1093–94 (9th Cir.), cert. denied, 522 U.S. 806 (1997); State of 
New Jersey v. United States, 91 F.3d 463, 470–71 (3rd Cir. 1996); 
Vizenor v. Babbitt, 927 F. Supp. 1193 (D. Minn. 1996); Allred v. United 
States, 33 Fed. Cl. 349 (1995). But see Ramah Navajo School Board, Inc. 
v. Babbitt, 87 F.3d 1338 (D.C. Cir. 1996).[Footnote 19] 

C. The Antideficiency Act: 

2. Obligation/Expenditure in Excess or Advance of Appropriations: 

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Some government corporations are also classified as agencies of the 
United States government, and their officials are therefore “officers 
and employees of the United States.” To the extent they operate with 
funds which are regarded as appropriated funds, they too are subject to 
31 U.S.C. § 1341(a)(1). E.g., B-223857, Feb. 27, 1987 (Commodity Credit 
Corporation); B-135075-O.M., Feb. 14, 1975 (Inter-American Foundation). 
It follows that section 1341(a)(1) does not apply to a corporation 
that, although established by federal statute, is not an agency of the 
United States government. E.g., B-308037, Sept. 14, 2006 (Legal 
Services Corporation); B-175155-O.M., July 26, 1976 (Amtrak). These 
principles are, of course, subject to variation if and to the extent 
provided in the relevant organic legislation. 

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In B-308715, Apr. 20, 2007, the Department of Energy (DOE) violated the 
Antideficiency Act when it obligated and spent appropriated funds in 
advance and in excess of available appropriations. DOE is statutorily 
barred from using any funds provided by Energy and Water Development 
appropriation acts “to implement or finance authorized . . . loan 
guarantee programs unless specific provision is made for such programs 
in an appropriation Act.” 42 U.S.C. § 7278. DOE used 2006 and 2007 
appropriations for a loan guarantee program even though Congress had 
not enacted the appropriations for that purpose. Consequently, DOE 
violated the Antideficiency Act, as well as the purpose statute, 31 
U.S.C. § 1301(a) (appropriation “shall be applied only to the objects 
for which the appropriations were made”), discussed in Chapter 4. 

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To illustrate, an agency’s acceptance of an offer to install automatic 
telephone equipment for $40,000 when the unobligated balance in the 
relevant appropriation was only $20,000 violated the Antideficiency 
Act. 35 Comp. Gen. 356 (1955). In addition, when other legislation 
limits the availability of an appropriation, the agency may not exceed 
the limitation. In B-307720, Sept. 27, 2007, the Department of 
Agriculture made payments to participants of the Conservation Security 
Program in excess of annual limits on such payments imposed by the 
program’s authorizing legislation, 16 U.S.C. § 3838–3838c. 
Notwithstanding that the amount of the department’s appropriation was 
adequate otherwise to cover the amount of the payments, the department 
could not ignore the statutory limitation on such payments. Id. 

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Importantly, FASA does not apply to all contracts that are intended to 
meet the needs of more than one fiscal year. Obviously, if multiple 
year or no-year appropriations are legally available for the full 
contract period, an agency need not rely on FASA. Also, certain 
contract forms do not constitute multiyear contracts within the scope 
of FASA. For example, in B-302358, Dec. 27, 2004, GAO determined that a 
Bureau of Customs and Border Protection procurement constituted an 
“indefinite-delivery, indefinite-quantity” (IDIQ) contract that was not 
subject to FASA. The decision explained that, unlike a contract covered 
by FASA, an IDIQ contract does not obligate the government beyond its 
initial year. Rather, it obligates the government only to order a 
minimum amount of supplies or services. The cost of that minimum amount 
is recorded as an obligation against the appropriation current when the 
contract is entered into.[Footnote 54] See also B-308969, May 31, 2007 
(agency failed to obligate the entire minimum amount of an IDIQ 
contract against the appropriated funds for the fiscal year in which 
the contract was awarded). 

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The Court of Federal Claims applied the rule against open-ended 
indemnity agreements in a 2007 case involving a mushroom grower seeking 
indemnification from the government for losses it had incurred as a 
result of operating a defective waste facility that had been designed 
by the Department of Agriculture’s National Resource Conservation 
Service (NRCS). Rick’s Mushroom Service, Inc. v. United States, 76 Fed. 
Cl. 250 (2007). Pursuant to a cooperative agreement with NRCS, the 
facility had been constructed in accordance with detailed plans and 
specifications drafted by NRCS. The plaintiff argued that the 
cooperative agreement was a contract that created an implied warranty 
under the rule known as the Spearin doctrine. The government asserted 
that the Antideficiency Act precludes any employee of the NRCS from 
possessing the authority to bind the government to “an open-ended 
indemnity contract in the absence of specific authorization for the 
undertaking.” Id. at 260. The government cited to the statement in 
Hercules, 516 U.S. at 427–28, that “the contracting officer’s presumed 
knowledge of [the Antideficiency Act’s] prohibition [is] strong 
evidence that the officer would not have provided, in fact, the 
contractual indemnification claimed.” The Federal Claims court in 
Rick’s Mushroom agreed, noting that the Supreme Court in Hercules 
relied upon the fact that the Comptroller General has repeatedly ruled 
that government procurement agencies may not enter into the type of 
open-ended indemnity for third-part liability that petitioner claims to 
have implicitly received. Rick’s Mushroom, 76 Fed. Cl. at 260. 

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More recent GAO decisions likewise consistently apply the principle 
that the use of appropriated funds for unauthorized or prohibited 
purposes violates the Antideficiency Act (absent an alternative funding 
source) since zero funds are available for that purpose. B-302710, May 
19, 2004 (use of funds in violation of statutory prohibition against 
publicity or propaganda); B-300325, Dec. 13, 2002 (appropriations used 
for unauthorized technical assistance purposes); B-300192, Nov. 13, 
2002 (violation of appropriation rider prohibiting use of funds to 
implement an Office of Management and Budget memorandum); B-290005, 
July 1, 2002 (appropriation used to procure unauthorized legal 
services); 71 Comp. Gen. 402, 406 (1992) (unauthorized use of Training 
and Employment Services appropriation); B-246304, July 31, 1992 
(potential violation of appropriation act “Buy American” provision); B-
248284, Sept. 1, 1992 (nondecision letter) (reprogramming of funds to 
an unauthorized purpose). Cf. B-309181, Aug. 17, 2007 (although the 
Department of Defense, without a delegation of lease authority from the 
General Services Administration, improperly entered into a lease, it 
did not incur an Antideficiency Act violation because it had an 
appropriation available to make lease payments). 

3. Voluntary Services Prohibition: 

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An interesting 2007 case explored the applicability of the voluntary 
services prohibition in the context of a recess appointment. B-309301, 
June 8, 2007. Exercising his constitutional power to make a recess 
appointment, the President appointed an individual as ambassador to 
Belgium whose nomination to that same position he had previously 
withdrawn from Senate consideration. The individual was denied a salary 
by the State Department under 5 U.S.C. § 5503, which prohibits payment 
for services— 

“to an individual appointed during a recess of the Senate to fill a 
vacancy in an existing office, if the vacancy existed while the Senate 
was in session and was by law required to be filled by and with the 
advice and consent of the Senate, until the appointee has been 
confirmed by the Senate.” 

Nonetheless, the individual was willing to serve as ambassador, which 
raised the question of whether the State Department could accept the 
uncompensated services he was willing to provide. GAO noted that the 
voluntary services prohibition was enacted to prevent coercive 
deficiencies and future equitable claims against the government. Since 
there was a statutory prohibition barring the State Department from 
paying his salary, this was not a situation in which a coercive 
deficiency might occur. Similar to the situation in which an individual 
gratuitously waives his salary in advance, the recess appointee 
accepted the position knowing that he would not receive compensation 
for his services. Id. Even if he were to file a claim against the 
government for compensation, there is a statutory prohibition to 
payment of his salary. 5 U.S.C. § 5503. Therefore, the voluntary 
services prohibition did not apply in this situation, and the 
Department of State could allow him to serve as ambassador to Belgium 
without compensation. GAO stated: “We are also led to this 
interpretation by the fact that serious constitutional issues would 
arise if section 5503, in conjunction with the voluntary services 
prohibition, were read to directly restrict the President from making a 
recess appointment.” B-309301, at 6. 

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(between “Id. at 7” and “d. Exceptions”): 

In a similar case, GAO was asked to review a model no-cost contract 
offered by National Conference Services, Inc. (NCSI) for conference, 
event, and trade show planning services. The proposed NCSI contract 

“The Contractor [NCSI] may choose to provide for all services as 
required by the task order at no cost to the Government. The Contractor 
is entitled to all of the registration, exhibition, sponsorship and/or 
other fees collected as payment for performance under the task order if 
there is no cost to the Government. In this case, the Contractor is 
liable for all costs related to the performance of the task order as 
defined in the task order and the government’s liability for payment
of services under this task order is ‘zero.’” 

B-308968, Nov. 27, 2007, at 2. GAO found that an agency agreeing to 
these terms would have no financial liability to NCSI, nor would NCSI 
have any expectation of payment from the government. Applying the same 
analysis as in the GSA case, GAO determined that an agency entering 
into the NCSI contract would neither augment its appropriation nor run 
afoul of the voluntary services prohibition. GAO advised that there are 
other considerations beyond compliance with fiscal laws that an agency 
should take into account before agreeing to a no-cost contract such as 
the one proffered by NCSI, including weighing the value of the services 
received from the contractor with that of the concession given to the 
contractor. For example, an agency should consider the ultimate cost to 
the government as a whole when most attendees are expected to be 
government employees. Agency officials also should consider possible 
conflicts of interest before signing a no-cost contract, keeping in 
mind that control of the agenda, selection of speakers, and other 
matters concerning content should serve the government’s, not the 
contractor’s, purpose. In addition, agencies should ensure an open, 
transparent selection process before entering into no-cost contracts. 
GAO said, “Ultimately, an agency must not lose sight of its objectives 
for a particular event and should ensure that in avoiding costs to the 
agency, it does not take actions that compromise the effectiveness of 
its conference, undermine the achievement of agency goals, or violate 
ethics rules.” Id. at 5–6. 

5. Penalties and Reporting Requirements: 

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number 138a as follows: 

What if GAO uncovers a violation but the agency thinks GAO is wrong? 
The agency must still make the required reports, and must include an 
explanation of its disagreement. OMB Cir. No. A-11, § 145. See also 
GAO, Anti-Deficiency Act: Agriculture’s Food and Nutrition Service 
Violates the Anti-Deficiency Act, GAO/AFMD-87-20 (Washington, D.C.: 
Mar. 17, 1987). Should an agency fail to make the required report 
within a reasonable period of time, GAO will advise Congress that the 
agency violated the Antideficiency Act but has not yet reported the 
violation. See B-308715, Nov. 13, 2007.[Footnote 138a] 

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[138a] GAO advised Congress that the Department of Energy (DOE) had 
violated the Antideficiency Act in fiscal years 2006 and 2007 but had 
not reported the violations to Congress more than 6 months after GAO 
found the violations. Subsequently, 2 months after GAO notified 
Congress, the department made the required reports and provided copies 
to GAO. Letter from Samuel W. Bodman, Secretary, DOE, to David M. 
Walker, Comptroller General of the United States, Jan. 14, 2008. 

E. Augmentation of Appropriations: 

2. Disposition of Moneys Received: Repayments and Miscellaneous 

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In B-305402, Jan. 3, 2006, GAO refused to classify as a refund an 
amount that did not represent the return of an overpayment to the 
agency. That case concerned the proper treatment of demutualization 
compensation that the National Aeronautics and Space Administration 
(NASA) received from its contractor, California Institute of Technology 
(Caltech). Caltech had received the demutualization compensation in the 
form of stock as a policyholder of Prudential Life Insurance Company 
policies that Caltech held for some employees operating the Jet 
Propulsion Laboratory for NASA. Caltech notified NASA of the 
compensation, and NASA instructed Caltech to liquidate the stock and 
place the proceeds in an interest-bearing account. GAO found that these 
proceeds do not constitute a refund that NASA could credit to its 
appropriation because they do not represent a repayment of funds that 
were “in excess of what was actually due”; that is, the proceeds do not 
reflect a repayment from Caltech of an amount that NASA had previously 
overpaid Caltech. At the time NASA paid allocable costs of the defined 
benefit retirement plan, the amounts were correct, and the fact that 
the moneys NASA received as a result of the demutualization are related 
to the terminated retirement plans does not make the proceeds a refund. 
Since the demutualization compensation cannot be properly characterized 
as a refund, the proceeds from the sale of the demutualization 
compensation must be deposited in the general fund of the Treasury as 
miscellaneous receipts. Id. 

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The deposit timing requirements of 31 U.S.C. § 3302(c) and the 
implementing Treasury regulations apply as well when public moneys are 
held by nonfederal custodians. Thus, GAO found that these requirements 
were violated where the Department of Veterans Affairs (VA) allowed 
contractors to hold payments it collected on VA loans in an interest-
bearing account for 30 days or more before transferring the payments to 
the Treasury. See GAO, Internal Controls: VA Lacked Accountability Over 
Its Direct Loan and Loan Sale Activities, GAO/AIMD-99-24 (Washington, 
D.C.: Mar. 24, 1999), at 16–18. See also B-305402, Jan. 3, 2006 (the 
National Aeronautics and Space Administration should have deposited 
amounts received from its contractor in the Treasury the day following 
the receipt of those amounts). 

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with the following: 

B-303413, Nov. 8, 2004. See also B-300826, Mar. 3, 2005, at 6, noting 
that an agency cannot avoid section 3302(b) by authorizing a contractor 
to charge fees to outside parties and keep the payments in order to 
offset costs that would otherwise be borne by agency appropriations. 
The decision in B-300826 was affirmed in B-306663, Jan. 4, 2006. See 
also B-307137, July 12, 2006 (the Department of Energy (DOE) violated 
31 U.S.C. § 3302(b) and augmented its appropriations when it authorized 
the United States Enrichment Corporation to hold, invest, and use the 
proceeds from public sales of government-owned uranium on behalf of DOE 
prior to the enactment of specific statutory authority exempting the 
proceeds of those uranium sales from section 3302(b)). 

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A recent situation involved fees collected by a government corporation. 
Congress established the State Justice Institute as a private, 
nonprofit corporation to further “the development and adoption of 
improved judicial administration in State courts in the United States.” 
42 U.S.C. § 10702(a). Although the Institute receives an annual 
appropriation from Congress, the Institute is not a government agency 
or instrumentality except for limited purposes specified in its 
authorizing statute, and its employees are not to be considered 
employees of the United States. 42 U.S.C. § 10704. The Executive 
Director of the Institute asked whether the Institute could retain fees 
the Institute obtains for the use of advertising space in its 
semiannual newsletter, or whether the fees must be treated as 
miscellaneous receipts under 31 U.S.C. § 3302(b) and deposited in the 
Treasury. The Institute is not a government agency, and GAO stated that 
“although Congress imposed on the Institute certain requirements 
typically applicable to a federal agency, it did so selectively, 
against the general backdrop of a private corporate entity. 42 U.S.C. 
§a).” B-307317, Sept. 13, 2006, at 3. GAO found nothing explicitly or 
implicitly in the Institute’s authorizing statute that would suggest or 
require application of the miscellaneous receipts statute to the 
Institute. Therefore, GAO concluded that in accepting the advertising 
fees the Institute was not “receiving money for the Government,” and so 
the Institute could retain the fees without violating the miscellaneous 
receipts statute. Id. (GAO cautioned, however, that in retaining such 
fees the Institute should be cognizant of the legal constraints and 
policy considerations regarding advertising it chooses to carry). 

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The decision in B-302962 held that the exception to the 
interdepartmental waiver doctrine applied in the case of damage to 
facilities of the National Archives and Records Administration (NARA) 
whose operations were financed by a revolving fund. Thus, NARA should 
collect from other federal agencies, their contractors, or NARA’s own 
contractors, as the case may be, amounts sufficient to repair damages 
they caused to NARA’s facilities and deposit those amounts into the 
revolving fund. 

In other circumstances, however, GAO concluded that NARA’s funds were 
available to cover the damage. In B-308822, May 2, 2007, a building 
failure caused water damage to records NARA stored for its federal 
agency customers in a federal building owned and maintained by the 
General Services Administration (GSA). Here, the Federal Property 
Administrative Services Act of 1949, as amended, governs the 
relationship between GSA and its federal agency customers who occupy 
GSA-owned and operated buildings. Both GSA’s management of federal 
buildings and NARA records centers operate out of revolving funds. 
Requiring GSA to reimburse another agency for damages it incurred or 
reduce the rental charges to cover the damages would reduce amounts 
available to finance new construction, undermining one of the purposes 
of the Act. Accordingly, GAO concluded that GSA was not required to 
reimburse NARA for property damage. 

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Federal agencies must have statutory authority both (1) to charge fees 
for their programs and activities in the first instance and (2), even 
if they have fee-charging authority, to retain in their appropriations 
and use the amounts collected. See, e.g., B-306663, Jan. 4, 2006; B-
300826, Mar. 3, 2005; B-300248, Jan. 15, 2004. Thus, fees and 
commissions paid either to the government itself or to a government 
employee for activities relating to official duties must be deposited 
in the Treasury as miscellaneous receipts, absent statutory authority 
to the contrary. 

Page 6-199 – Replace the last paragraph with the following: 

Of course, if and to the extent expressly authorized by statute an 
agency may retain fees and use them to offset operating costs. See, 
e.g., 2 U.S.C. § 68-7(b) (fees and other charges collected for services 
provided by the Senate Office of Public Records); 7 U.S.C. § 7333(k)(3) 
(fees for certain services collected by the Commodity Credit 
Corporation); 10 U.S.C. § 2262 (fees collected from participants to 
defray Department of Defense costs of hosting conferences); 28 U.S.C. 
§ 1921(e) (fees collected by the United States Marshals Service for 
service of civil process and judicial execution seizures and sales, to 
the extent provided in advance in appropriation acts); 28 U.S.C. § 1931 
(specified portions of filing fees paid to the clerk of court). The 
relevant legislation will determine precisely what may be retained. 
E.g., 34 Comp. Gen. 58 (1954). For example, amounts collected under 10 
U.S.C. §with respect to a Department of Defense-hosted conference can 
be credited to the appropriation from which the costs of the conference 
are paid to reimburse the Department for the costs incurred, but if the 
amount collected ends up being greater than the actual costs of the 
conference, the excess amount is to be deposited into the Treasury as 
miscellaneous receipts. 10 U.S.C. §§ 2262(b), (c). 

Page 6-212 – Insert the following after the first paragraph: 

In B-306860, Feb. 28, 2006, GAO concluded that the terms of a 
settlement agreement entered into between the Office of Federal Housing 
Enterprise Oversight (OFHEO) and the Federal Home Loan Mortgage 
Corporation (Freddie Mac) would not augment OFHEO’s appropriation. In 
this case, the settlement agreement was intended to resolve an 
administrative proceeding, including production of documents, brought 
by OFHEO against Freddie Mac pursuant to OFHEO’s regulatory oversight 
authority. As part of the settlement, Freddie Mac agreed to provide the 
documents and to pay a vendor up to $1 million to electronically format 
and code certain documents for OFHEO’s use. The settlement agreement 
satisfied a prosecutorial objective, that is, the production of 
documents, and there was no contractual relationship between OFHEO and 
the vendor. Instead, the contract was between Freddie Mac and the 
vendor, and it was Freddie Mac, not OFHEO, who was contractually 
obligated to pay the vendor. Thus, the costs of formatting the 
documents were Freddie Mac’s costs and not OFHEO’s, and Freddie Mac’s 
payment of the formatting costs did not constitute a de facto 
augmentation of OFHEO’s appropriation. 

The OFHEO decision was explained in B-308476, Dec. 20, 2006, in which 
GAO determined that the Federal Motor Carrier Safety Administration 
(FMCSA) did not have authority to retain an award of criminal 
restitution that a federal district court ordered to be paid to FMCSA. 
In carrying out its mission to improve the safety of commercial vehicle 
operations, FMCSA issues and enforces motor carrier safety regulations 
concerning specified commercial trucking and bus operations. See 49 
U.S.C. § 113. A trucking company’s officers pleaded guilty to violating 
both the agency regulations and a criminal statute concerning 
conspiracy to commit false statement offenses. In accepting the plea, 
the court ordered, among other penalties, the defendants to pay 
restitution to FMCSA in the amount of $20,000 to compensate FMCSA for 
the costs of the investigation and prosecution of the case. Unlike the 
situation in the OFHEO case, if FMCSA retained the $20,000 in 
restitution, the agency would improperly augment its appropriation. 
FMCSA receives an appropriation each year to pay for costs of 
investigations such as the one conducted in the trucking company’s 
case—such costs are necessary expenses of enforcing the agency’s safety 
regulations and are obligations of FMCSA. As such, crediting the 
restitution award to FMCSA’s appropriation would improperly contribute 
financial resources that supplement those already provided for the 
agency by Congress. Therefore, FMCSA was required to remit the awarded 
funds to the Treasury as miscellaneous receipts. 

Page 6-214 – Insert the following after the first full bullet at the 
top of the page: 

* Proceeds from the sale of government-owned uranium used to compensate 
the United States Enrichment Corporation (USEC) for expenses it 
incurred on behalf of the Department of Energy (DOE). Here, DOE 
arranged for an independent revenue stream not appropriated to it by 
Congress; had no authority to retain the proceeds of that revenue 
stream if received directly; and arranged for its agent, USEC, to 
receive the proceeds of the unauthorized revenue stream and use those 
amounts to pay for expenses incurred on behalf of DOE. As DOE’s agent, 
USEC received “money for the government” but failed to deposit the 
money in the Treasury. Therefore, DOE violated the miscellaneous 
receipts statute and augmented its appropriations. B-307137, July 12, 

4. Other Augmentation Principles and Cases: 

Page 6-239 – Insert the following after the third bullet: 

* The Office of Compliance may not accept reimbursements of its costs 
of investigating and prosecuting alleged violations of section 5 of the 
Occupational Safety and Health Act (29 U.S.C. § 654), and its costs of 
monitoring planned abatement actions, from legislative branch agencies 
since the Office of Compliance receives an annual appropriation to fund 
these activities. B-308774, Mar. 15, 2007. 

* The Pension Benefit Guaranty Corporation may not retain a 
reimbursement for financial analysis services associated with a request 
for waiver from claims arising under title IV of the Employee 
Retirement Income Security Act. B-307849, Mar. 1, 2007. The 
miscellaneous receipts statute, 31 U.S.C. § 3302(b), requires 
government corporations to deposit amounts received into the general 
fund of the Treasury, absent statutory authority to the contrary. Id. 

[End of chapter 6] 

Chapter 7: Obligation of Appropriations: 

B. Criteria for Recording Obligations (31 U.S.C. § 1501): 

1. Section 1501(a)(1): Contracts: 

Page 7-21 – Replace first full paragraph with the following: 

What does all this signify from the perspective of obligating 
appropriations? As we noted at the outset, the obligational impact of a 
variable quantity contract depends on exactly what the government has 
bound itself to do. A fairly simple generalization can be deduced from 
the decisions: In a variable quantity contract (requirements or 
indefinite-quantity), any required minimum purchase must be obligated 
when the contract is executed; subsequent obligations occur as work 
orders or delivery orders are placed, and are chargeable to the fiscal 
year in which the order is placed. B-308969, May 31, 2007 (agency 
should have obligated the $1 million required minimum purchase under an 
IDIQ contract against the appropriation for the fiscal year in which 
the contract was executed). See also B-302358, Dec. 27, 2004. Of 
course, the bona fide needs rule applies both at the time the agency 
enters into the contract and when the agency subsequently places task 
or work orders. 

7. Section 1501(a)(7): Employment and Travel: 

Page 7-46 – Replace the third paragraph with the following: 

For persons compensated on an actual expense basis, it may be necessary 
to record the obligation as an estimate, to be adjusted when the 
services are actually performed. Documentation requirements to support 
the obligation or subsequent claims are up to the agency. For example, 
the National Mediation Board (NMB) incurs an obligation when it 
appoints a neutral arbitrator to a grievance adjustment board to hear a 
specific case or a specified group of related cases. Because NMB does 
not control the number of days an arbitrator will work before 
submitting an award, NMB should record an obligation based on its best 
estimate of the costs of paying the arbitrator and adjust the 
obligation up or down as more information becomes available. B-305484, 
June 2, 2006. NMB should liquidate the obligation from the 
appropriation current at the time NMB incurs the obligation, 
notwithstanding that the arbitrator’s performance may extend into the 
next fiscal year. Id. To the extent GAO indicated in two prior 
decisions, B-217475, Dec. 24, 1986, and B-217475, May 5, 1986, that NMB 
may record obligations month-to-month based on the anticipated 
expenditures it approves in monthly compensation requests, those 
decisions were overruled by B-305484. 

C. Contingent Liabilities: 

Page 7-56 – Replace the second full paragraph with the following: 

Contingent liabilities are not recordable as obligations under 
section 1501 of title 31.34 Rather, a contingent liability ripens into 
a recordable obligation for purposes of section 1501 only if and when 
the contingency materializes. E.g., B-305484, June 2, 2006; 62 Comp. 
Gen. 143, 145–46 (1983); 37 Comp. Gen. 691–92 (1958); GAO, Policy and 
Procedures Manual for Guidance of Federal Agencies, title 7, § 3.5.C 
(Washington, D.C.: May 18, 1993) (hereafter GAO-PPM). 

[End of chapter 7] 

Chapter 8: Continuing Resolutions: 

B. Rate for Operations: 

1. Current Rate: 

Page 8-11 – Insert after the first partial paragraph: 

GAO considered the distinction between transferred and reprogrammed 
funds when calculating the current rate for operations under a 
continuing resolution at the request of the United States Capitol 
Police (USCP). Specifically, the USCP asked whether $10 million of 
unobligated no-year and multiyear balances that it had made available 
through reprogrammings and transfers to its fiscal year 2006 “General 
Expenses” appropriation should be included in calculating the current 
rate under the continuing resolution for its 2007 General Expenses 
appropriation. USCP had made that amount available for fiscal year 2006 
operational needs via a combination of reprogrammings within its 
General Expenses appropriation and a transfer from its Salaries 
appropriation to its General Expenses appropriation. GAO stated that in 
determining the current rate the amount reprogrammed must be 
distinguished from the amount transferred because reprogrammings and 
transfers are fundamentally different transactions. A reprogramming is 
the movement of funds already in an appropriation from one use to 
another. Unless otherwise restricted by statute, agencies may reprogram 
funds as they wish to adapt to changing circumstances. Because Congress 
had already made available the reprogrammed portion of the $10 billion, 
USCP should consider that amount as part of its current rate under the 
continuing resolution. In contrast, a transfer is the movement of funds 
between appropriations, which an agency may do only when Congress 
grants it the statutory authority to do so. USCP had discretionary 
authority to transfer funds and used that authority in fiscal year 2006 
to transfer the funds from its Salaries appropriation to its General 
Expenses appropriation. GAO concluded that transfers made at an 
agency’s discretion pursuant to its general transfer authority, and not 
directed by law, should not be included in the calculation. Therefore, 
the portion of the $10 million comprised of the transferred funds could 
not be included in the calculation of the current rate under the 
continuing resolution. B-308773, Jan. 11, 2007. 

[End of chapter 8] 

Chapter 9: Liability and Relief of Accountable Officers: 

B. General Principles: 

2. Who Is an Accountable Officer? 

Page 9-12 – Replace the last paragraph with the following: 

In B-280764, GAO did not question the merits of extending 
accountability and potential pecuniary liability to more Department of 
Defense (DOD) employees, only the means of accomplishing that 
objective. In 2002, Congress added new section 2773a to title 10, 
United States Code, which supplied the department with the requisite 
statutory authority to designate additional accountable officials.12 
See B-305919, Mar. 27, 2006 (DOD may employ foreign local nationals as 
departmental accountable officials under section 2773a). 

C. Physical Loss or Deficiency: 

2. Who Can Grant Relief? 

Page 9-40 –Replace footnote 27 with the following: 

[27] As noted earlier in section B.2 of this chapter, the Department of 
Defense (DOD) has been given the authority to hold other “departmental 
accountable officers,” besides certifying and disbursing officers, 
liable financially for illegal or erroneous payments resulting from 
their negligence. 10 U.S.C. § 2773a. Cf. B-305919, Mar. 27, 2006 
(foreign local nationals may serve as DOD accountable officials under 
10 U.S.C. § 2773a, even though they may not be subject to pecuniary 
liability under United States law, because of U.S. agreements with 
foreign governments). This would include employees whose duty it was to 
provide information, data, or services that are directly relied upon by 
a certifying official in the certification of vouchers for payment. 

Page 9-43 – Replace the first paragraph with the following: 

As noted above and in sections B.2 and C.1.b of this chapter, the 
statutory scheme for military accountable officers was changed by 
section 913 of Public Law No. 104-106, div. A, title IX, subtitle B, 
110 Stat. 186, 410–12 (Feb. 10, 1996). Section 913 amended a number of 
provisions in titles 10, 31, and 37 of the United States Code to 
authorize the designation and appointment of certifying and disbursing 
officials within the Department of Defense (DOD) (including military 
departments, defense agencies, and field activities) to clearly 
delineate a separation of duties and accountabilities between personnel 
who authorize payments (certifying officers) and personnel who make 
payments (disbursing officers). In doing so, section 913 also amended 
31 U.S.C. § 3527(b) to apply to all accountable officials of the armed 
forces, not just disbursing officers,31 and included a new section 
3527(b)(1)(B) to provide relief for erroneous payments made by military 
accountable officials. As in the case of a physical loss or deficiency, 
the finding of the Secretary involved regarding whether the 
circumstances warrant relief is conclusive on the Comptroller General. 
In B-307693, Apr. 12, 2007, GAO addressed whether the limitation in 31 
U.S.C. § 3527 applies to requests from certifying officers of DOD 
components other than the armed services for relief of erroneous 
payments under the revised section 3527(b). GAO determined that, 
because the term “armed forces” as used in section 3527(b) applies only 
to the Army, Navy, Air Force, or Marine Corps, GAO may entertain relief 
requests from certifying officers of other DOD components in the same 
manner as it does requests from certifying officers in other agencies. 
Thus, GAO considered the request of a certifying officer of the Defense 
Logistics Agency, an agency of DOD but not one of the armed forces, in 

D. Illegal or Improper Payment: 

2. Certifying Officers: 

Page 9-91 – Replace the last paragraph with the following: 

Whatever else the certifying officer’s verification burden may or may 
not involve, it certainly involves questioning items on the face of 
vouchers or supporting documents, which simply do not look right. A 
critical tool that certifying officers have to carry out their 
responsibility is the power to question, and refuse certification of, 
payments that may be improper. See, e.g., B-303177, Oct. 20, 2004. For 
example, GAO considered the propriety of imposing liability on a 
certifying officer who certified payment of a purchase card billing 
statement that included improper purchase card transactions. B-307693,
Apr. 12, 2007. GAO found that, to execute his statutory responsibility 
properly and to avoid possible pecuniary liability, the certifying 
officer should have scrutinized the billing statement and disputed the 
questionable transactions made by the cardholder before certifying the 
billing statement for payment to the bank servicing the purchase card. 
Since he knew or should have known that he was certifying an improper 
payment when he certified the purchase card payment, the certifying 
officer was denied relief. Id. 

Also, a certifying officer who certifies a voucher for payment in the 
full amount claimed, disregarding the fact that the accompanying 
records indicate an outstanding indebtedness to the government against 
which the sum claimed is available for offset, is accountable for any 
resulting overpayment. 28 Comp. Gen. 425 (1949). See also B-303920,
Mar. 21, 2006 (facts and circumstances should have alerted certifying 
officer to the fact that he was improperly certifying payments to 
purchase bottled water for employees, an unauthorized expenditure). 
Similarly, certifying a voucher in the full amount within a prompt 
payment discount period without taking the discount will result in 
liability for the amount of the lost discount. However, a certifying 
officer is not liable for failing, even if negligently, to certify a 
voucher within the time discount period. 45 Comp. Gen. 447 (1966). 

E. Other Relief Statutes: 

1. Statutes Requiring Affirmative Action: 

Page 9-129 – Replace the last paragraph with the following: 

Since 31 U.S.C. § 3728, the primary certifying officer relief statute, 
does not apply to the legislative or judicial branches, Congress has 
enacted specific statutes for several legislative branch agencies and 
for the judicial branch authorizing or requiring the designation of 
certifying officers, establishing their accountability, and, in some 
cases, authorizing the Comptroller General to grant relief. Patterned 
after 31 U.S.C. § 3728, they are: 2 U.S.C. § 142b (Library of 
Congress), 2 U.S.C. § 142e (Congressional Budget Office), 2 U.S.C. § 
142l (Office of Compliance), 2 U.S.C. § 1904 (Capitol Police), and 44 
U.S.C. § 308 (Government Printing Office). The Secretary of the Senate 
and the Speaker of the House of Representatives have the authority to 
waive the collection of erroneous payments of salary or allowances for 
employees of the Senate and the House, respectively. 2 U.S.C. §§ 130c, 
130d. The relevant provision for the judicial branch is 28 U.S.C. § 
613. See B-303920, Mar. 21, 2006. 

[End of chapter 9] 

Chapter 10: Federal Assistance: Grants and Cooperative Agreements: 

A. Introduction: 

Page 10-5 – Replace footnote number 6 with the following: 

[6] The Catalog of Federal Domestic Assistance is published by the 
General Services Administration and the Office of Management and Budget 
(OMB) pursuant to 31 U.S.C. § 6104 and OMB Circular No. A-89, Federal 
Domestic Assistance Program Information (Aug. 17, 1984). The Catalog is 
a governmentwide list of financial and nonfinancial federal assistance 
programs, projects, services, and activities administered by federal 
agencies that provide assistance or benefits to the American public. 
31 C.F.R. § 205.2. The most recently updated print edition and the 
frequently updated online version can both be accessed through the 
Catalog’s Web site at [hyperlink,] (last visited 
Feb. 8, 2008). In addition, OMB, on December 13, 2007, rolled out a new 
publicly accessible Web site that provides information on all major 
federal grants, loans, and contracts. See [hyperlink,] (last visited Feb. 8, 2008). This Web site 
is in response to 2006 legislation to improve the accessibility of 
federal spending data, Federal Funding Accountability and Transparency 
Act of 2006, Pub. L. No. 109-282, 120 Stat. 1186 (Sept. 26, 2006), 
31 U.S.C. § 6101 note. 

B. Grants versus Procurement Contracts: 

2. The Federal Grant and Cooperative Agreement Act: 

Page 10-16 – Insert the following after the first full paragraph: 

An example of a statutory scheme for oversight of a grant program can 
be found in the Help America Vote Act of 2002 (HAVA), which authorizes 
various federal agencies to make grants or provide payments of federal 
funds to the states and various other entities for purposes related to 
election reform. Pub. L. No. 107-252, 116 Stat. 1666 (Oct. 29, 2002). 
Section 902 of HAVA authorizes each agency making a grant or payment to 
audit any recipient of the funds, and also provides that if the 
Comptroller General makes a determination as a result of an audit that 
a fund recipient did not comply with program requirements or received 
an excess payment, the recipient must return a certain portion of the 
payment. In B-306475, Jan. 30, 2006, GAO concluded that the provision 
regarding GAO audits does not supersede the independent statutory 
authority of agencies to audit and take corrective action on the use of 
federal funds, so GAO need not make its section 902 determination 
before a paying agency may audit and take corrective action on 
questioned costs. If the Comptroller General were to make a 
determination under HAVA as a result of any audit he conducts, he will 
make an appropriate recommendation for the agency to determine 
liability and take corrective action. Id. 

C. Some Basic Concepts: 

2. Availability of Appropriations: 

Page 10-43 – Replace the first full paragraph with the following: 

Appropriations for grant programs are generally subject to the same 
time availability rules as other appropriations. Adherence to the 
existing framework for grantmaking, as laid out in the statute and 
implementing regulations, provides structure and consistency, which in 
turn promotes the goals of proper administration and accounting, as 
well as fairness to all grant applicants. For example, in one case, 
despite apparent statutory and regulatory limitations on grants to 
certain colleges and graduate institutions, the Education Department 
had granted 4-year “extensions” to the original 5-year grants awarded 
to those institutions. GAO concluded that Education should strictly 
adhere to the statutory and regulatory duration restrictions for grant 
periods and terminate grants improperly extended. If, at that time, 
Education determined that additional assistance was warranted, the 
department could award a new grant to that institution or, in the 
alternative, seek legislative changes that would allow for extensions 
to 5-year grants. B-303845, Jan. 3, 2006. 

Also, when Congress expressly provides that a grant appropriation 
“shall remain available until expended” (no-year appropriation), the 
funds remain available until they are obligated and expended by the 
grantor agency subject to the account closing statute, 31 U.S.C. 
§ 1555. It should be emphasized that the time availability of grant 
appropriations governs the grantor agency’s obligation and expenditure 
of the funds; it does not limit the time in which the grantee must use 
the funds once it has received them. B-289801, Dec. 30, 2002. Of 
course, the grant statute or the grantor agency may impose time limits 
on a grantee’s use of funds. See City of New York v. Shalala, 34 F.3d 
1161 (2nd Cir. 1994); Mayor and City Council of Baltimore v. Browner, 
866 F. Supp. 249 (D. Md. 1994). 

[End of Volume 2]