Withholding of Funds From West Virginia Railroad Maintenance Authority

The Federal Railroad Administration (FRA) put a freeze on its local rail service assistance program. GAO was asked whether the withholding of funds from the West Virginia Railroad Maintenance Authority as a result of the freeze violated the Congressional Budget and Impoundment Control Act. The freeze was issued because FRA plans to transfer funds appropriated for this program to other FRA activities in order to reduce the fiscal year 1981 supplemental appropriation. The President transmitted his sixth special message to Congress to defer budget authority for this specific project. A section of the act provides that the act does not supersede any provision of law which requires the obligation of budget authority. Consequently, the act cannot be used to defer funds in a manner which would defeat the ability of the states to receive the funds to which they are entitled. This is not the situation in this case. Deferral was proposed for only a part of the year. This was done to preserve the funds until Congress has an opportunity to respond to the President's legislative proposal to transfer these funds for other purposes. This part-of-year deferral action will not itself defeat the implementation of the program, and the past practice has been for most of the grants to be awarded in the fourth quarter. Consequently, GAO does not believe that FRA actions violate the act thus far.