Status of Funds as "Appropriated"

B-193573: Dec 19, 1979

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The General Counsel of the Saint Lawrence Seaway Development Corporation sought a reconsideration of a GAO decision in which it was held that the Corporation's funds were appropriated funds despite the fact that the source of these funds was user fees. The General Counsel contended that the GAO holding conflicted with the principles of the Corporation's enabling legislation. He contended that: (1) because the Corporation was authorized to issue revenue bonds payable from Corporation revenues to finance its activities, appropriated funds were not involved; (2) Congress had used language in the Corporation's enabling legislation which indicated that it was merely authorizing the use of funds collected from user fees, not appropriating funds to the Corporation; (3) Congress would have had to create a specific fund for the user fees to be considered appropriated funds; and (4) although the Corporation deposited its funds into a Treasury account, it was similar to a commercial account which did not require an appropriation for withdrawing those funds. It has been consistently held that the authority to collect and credit funds to a particular fund and make them available for specific expenditures constitutes a continuing appropriation. It was held that the funds available from bond sales or user fees were still appropriations because they were made available by action of Congress. Whether the language of the legislation constituted an authorization or an appropriation was held to be immaterial. Anytime Congress specifies the manner in which a Federal entity should be funded and makes funds available, that constitutes an appropriation. It was held that it was not essential for Congress to expressly create a fund in the authorizing statute to constitute an appropriation. The fund was held to be created when Congress authorized the expenditure of user fees for operating expenses. Finally, GAO held that the nature of the appropriation was not affected by where the funds were kept. Thus GAO concluded that the funds were appropriated funds. However, the enabling legislation provided for broad discretion in the obligation and expenditure of the Corporation's funds, exempting it from many of the statutory restrictions on the use of appropriated funds. The decision was affirmed as modified.