B-197019 L/M, APR 11, 1980

B-197019 L/M, APR 11, 1980

SUBJECT: REQUEST FOR INQUIRY INTO MATTERS RELATED TO EXPENDITURES OF SOCIAL SECURITY TRUST FUNDS (FILE B-197019)

ASSISTANT REGIONAL MANAGER, HRD - DOMINIC F. RUGGIERO, LOS ANGELES REGIONAL OFFICE

THIS MEMORANDUM ADDRESSES THE QUESTIONS RAISED IN YOUR SUBMISSION DATED NOVEMBER 7, 1979, PERTAINING TO THE PROPRIETY OF CERTAIN CHARGES MADE AGAINST THE SOCIAL SECURITY TRUST FUNDS.

BRIEF ANSWERS TO YOUR QUESTIONS FOLLOW. A MORE DETAILED ANALYSIS IS ATTACHED.

QUESTION 1: WHAT ARE THE STATUTORY RESPONSIBILITIES AND POWERS OF THE BOARD OF TRUSTEES OF THE TRUST FUNDS (TRUSTEES) AND TO WHAT EXTENT ARE THEY COMPARABLE TO THOSE OF A PRIVATE SECTOR TRUSTEE?

ANSWER: THE TRUSTEES' AUTHORITY, DERIVED EXCLUSIVELY FROM THE SOCIAL SECURITY ACT, 42 U.S.C. SEC. 301 ET SEQ. (1976), ENTAILS LITTLE DISCRETION AND PRINCIPALLY INVOLVES OVERSIGHT OF THE FUNDS. SINCE THIS AUTHORITY IS NEITHER DERIVED FROM NOR SIMILAR TO THAT OF A PRIVATE SECTOR TRUSTEE, A COMPARISON OF THE TWO WOULD NOT, WE THINK, BE PRODUCTIVE IN THE PRESENT CONTEXT.

IN CONNECTION WITH THIS QUESTION, YOU ALSO ASKED WHETHER GOVERNMENT AGENCIES SUCH AS GSA, OPM, AND HEW HEADQUARTERS COMPONENTS ARE LEGALLY PERMITTED TO TAKE ACTIONS WHICH REQUIRE EXPENDITURES OF SOCIAL SECURITY TRUST FUNDS IN A MANNER CONSIDERED WASTEFUL AND UNECONOMICAL BY THE SOCIAL SECURITY ADMINISTRATION COMMISSIONER. THE AUTHORITY PROVIDED BY 42 U.S.C. SEC. 401(G)(1)(A) TO THE MANAGING TRUSTEE OF THE TRUST FUNDS AND THE SECRETARY OF HEALTH, EDUCATION AND WELFARE (HEW) TO ESTIMATE ADMINISTRATIVE EXPENSES TO BE BORNE BY THE TRUST FUNDS WOULD APPEAR TO PROVIDE THE VEHICLE FOR CONTROLLING UNECONOMICAL EXPENDITURES.

QUESTION 2: IS IT PERMISSIBLE AND WITHIN THE INTENT OF THE TRUST FUND LEGISLATION TO CHARGE THE FUNDS FOR CONSTRUCTION OF A DISTRICT/BRANCH OFFICE, A SUBSTANTIAL PORTION OF WHICH WILL BE DEVOTED TO SUPPLEMENTAL SECURITY INCOME (SSI) ACTIVITIES? MUST THE TRUSTS BE REIMBURSED IF THIS IS PERMITTED?

ANSWER: THE TRUST FUNDS MAY BE USED IN THIS MANNER BUT ONLY IF SUBSEQUENTLY RECREDITED ON A PRO RATA BASIS FROM SSI APPROPRIATIONS. THE SOCIAL SECURITY ACT AUTHORIZES CHARGES AGAINST THE FUNDS FOR THE COSTS OF ADMINISTERING TRUST PROGRAMS, AS WELL AS THE SSI PROGRAM (WHICH IS FUNDED FROM GENERAL REVENUES) AND THE COSTS OF CONSTRUCTING OFFICES QUALIFY AS SUCH CHARGES. SINCE SSI IS NOT A TRUST PROGRAM, HOWEVER, IT MUST REPAY THE TRUSTS THE VALUE OF THE OFFICE SPACE IT OCCUPIES, PURSUANT TO 42 U.S.C. SEC. 401(G)(1)(B). ANNUAL GENERAL REVENUE APPROPRIATIONS FOR SSI SPECIFY AMOUNTS FOR REIMBURSEMENT OF THE TRUST FUNDS FOR ADMINISTRATIVE EXPENSES INITIALLY BORNE BY THE FUNDS.

QUESTION 3: IS IT PROPER TO USE TRUST FUNDS TO SUBSIDIZE THE PROGRAMS AND POLICIES OF OTHER AGENCIES, SUCH AS THE CENTRAL BUSINESS DISTRICT (CBD) POLICY OF THE GENERAL SERVICES ADMINISTRATION (GSA)?

ANSWER: WHILE WE ARE NOT PREPARED TO STATE A GENERAL PRINCIPLE APPLICABLE TO ALL FEDERAL PROGRAMS, WE THINK THAT SOCIAL SECURITY TRUST MONIES MAY PROPERLY BE EXPENDED TO SATISFY THE REQUIREMENTS OF THE CBD POLICY. SINCE THE SSA IS SUBJECT, GENERALLY, TO THE GSA'S PROPERTY MANAGEMENT AUTHORITY AND HAS NOT BEEN SPECIFICALLY EXEMPTED FROM THE CBD POLICY, WE BELIEVE THAT THE SSA MUST COMPLY THEREWITH, NOTWITHSTANDING THAT THIS MAY RESULT IN EXPENDITURES FROM THE TRUSTS WHICH MAY BE GREATER THAN WOULD BE INCURRED OTHERWISE. HOWEVER, GSA'S REGULATIONS ALLOW SOME FLEXIBILITY IN APPLYING THIS POLICY SO THAT SSA COULD ATTEMPT TO DEMONSTRATE TO GSA THAT THE POLICY SHOULD NOT BE APPLIED TO SSA IN ALL INSTANCES.

QUESTION 4: IS IT LEGAL TO CHARGE THE TRUSTS FOR THE COST OF SSA EMPLOYEES PERFORMING WORK FOR ANOTHER AGENCY?

ANSWER: YES. THIS OFFICE HAS PREVIOUSLY PERMITTED UNREIMBURSED, INTERDEPARTMENTAL DETAILS OF SSA PERSONNEL WHOSE SERVICES CAN BE SPARED, SINCE THESE EMPLOYEES ARE NOT REQUIRED BY LAW TO ENGAGE EXCLUSIVELY IN THE PARTICULAR ACTIVITIES FOR WHICH THEIR SALARIES ARE APPROPRIATED.

FURTHERMORE, IN THE FACT SITUATION POSED, IT APPEARS THAT THE SSA EMPLOYEES DETAILED TO GSA WERE PERFORMING FUNCTIONS RELATED TO SSA'S MISSION SINCE THEY WERE ASSISTING GSA IN REDUCING ITS BACKLOG OF SSA SPACE REQUESTS.