B-128943, SEP. 27, 1956

B-128943, SEP. 27, 1956

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED JULY 19, 1956, AND ATTACHMENTS, FROM THE DEPUTY ADMINISTRATOR OF VETERANS AFFAIRS, REPORTING IN COMPLIANCE WITH GENERAL REGULATIONS NO. 84, SECOND REVISION, SUPPLEMENT NO. 3, 31 COMP. GEN. 739, THE CONTROLS TO BE USED IN ACCOUNTING FOR FUNDS APPROPRIATED FOR THE VETERANS ADMINISTRATION BY THE INDEPENDENT OFFICES APPROPRIATION ACT, 1957, PUBLIC LAW 623, APPROVED JUNE 27, 1956. THE INTERPRETATIONS OF YOUR ADMINISTRATION OF THE LANGUAGE OF THE APPROPRIATION ACT AS IT PERTAINS TO THE LOAN GUARANTY AND THE MEDICAL RESEARCH PROGRAMS ARE STATED IN THE ATTACHMENTS.

IT IS NOTED THAT THE ACCOUNTING TREATMENT OF LEGISLATIVE LIMITATIONS WHICH ARE TYPIFIED BY THE LANGUAGE "NOT TO EXCEED," DIFFERS FROM THE TREATMENT GIVEN SIMILAR LIMITATIONS IN PRIOR YEARS IN THAT THE DESCRIPTIVE LANGUAGE "NOT TO EXCEED" IS NOT INCLUDED IN THE LIMITATION ACCOUNTS DESCRIBED IN THE LETTER. ALTHOUGH THIS CHANGE IN DESCRIPTIVE LANGUAGE WILL NOT PREVENT A STRICT OBSERVANCE OF THE LEGISLATIVE CEILINGS INVOLVED, AN ACCOUNTING DISTINCTION MUST BE MADE BETWEEN THE "NOT TO EXCEED" TYPES OF LIMITATION ACCOUNTS AND OTHER TYPES. SINCE THE APPARENT RESULT OF THE NEW MANNER OF STATING THESE LIMITATION ACCOUNTS IS TO TEND TO OBSCURE A DISTINCTION WHICH THE AUDITORS AND ACCOUNTANTS MUST OBSERVE, IT IS SUGGESTED THAT THE DESCRIPTIVE LANGUAGE BE INCLUDED IN THE LIMITATION ACCOUNTS.

ATTACHMENT "A" RELATES TO THE AMOUNT APPROPRIATED UNDER THE HEADING "GENERAL OPERATING XPENSES" FOR THE LOAN GUARANTY PROGRAM BY THE LANGUAGE "* * * $163,027,130, OF WHICH $17,640,042 SHALL BE AVAILABLE FOR SUCH EXPENSES AS ARE NECESSARY FOR THE LOAN GUARANTY PROGRAM.' IT IS STATED IN THE ATTACHMENT THAT AGAIN THIS YEAR, IT IS THE INTENT OF THE AGENCY TO CONSIDER THE AMOUNT APPROPRIATED FOR LOAN GUARANTY ACTIVITIES AS A MINIMUM AND NOT A MAXIMUM. REFERENCE IS MADE IN THE ATTACHMENT TO THE VETERANS ADMINISTRATION CONTROLLER'S LETTER OF APRIL 26, 1956, TO THE ASSISTANT DIRECTOR, CIVILIAN ACCOUNTING AND AUDITING DIVISION OF OUR OFFICE, IN WHICH VARIOUS DATA WAS SUBMITTED TO SUPPORT YOUR ADMINISTRATION'S VIEW WITH RESPECT TO AMOUNTS SPECIFIED FOR LOAN GUARANTY ACTIVITIES IN PREVIOUS INDEPENDENT OFFICES APPROPRIATION ACTS, AND IT IS STATED THAT YOUR ADMINISTRATION IS FIRMLY CONVINCED THAT THE AMOUNT, $17,640,042, SPECIFIED IN PUBLIC LAW 623, WAS A CONTINUATION OF CONGRESSIONAL CONCERN THAT SUFFICIENT FUNDS BE MADE AVAILABLE TO ASSURE EFFECTIVE MANAGEMENT OF THE LOAN GUARANTY PROGRAM. IT IS FURTHER STATED THAT THE COMPLEXITIES OF THE PROGRAM REQUIRE THAT A REASONABLE FINANCIAL FLEXIBILITY BE MADE AVAILABLE TO THOSE CHARGED WITH THE RESPONSIBILITY FOR ITS ADMINISTRATION, AND THAT TO CONSIDER THE AMOUNT APPROPRIATED AS A LIMITATION WOULD HINDER ATTAINMENT OF WHAT YOUR OFFICE BELIEVES TO BE CONGRESSIONAL OBJECTIVES.

IT IS THE GENERAL RULE THAT WHERE THERE IS A SPECIFIC APPROPRIATION FOR A PARTICULAR PURPOSE, A GENERAL APPROPRIATION WHICH OTHERWISE MIGHT BE CHARGED IS NOT AVAILABLE THEREFOR IN WHOLE OR IN PART. UNDER THIS RULE THE AMOUNT OF $17,640,042 WOULD BE REGARDED AS A MAXIMUM AMOUNT TO BE EXPENDED FOR THE LOAN GUARANTY PROGRAM. HOWEVER, THE GENERAL RULE IS NOT REQUIRED TO BE APPLIED WHERE A DIFFERENT INTENT OF CONGRESS IS ASCERTAINABLE. THE PROVISION IN QUESTION DID NOT APPEAR IN THE PROPOSED APPROPRIATION LANGUAGE AS SET FORTH IN THE BUDGET FOR THE FISCAL YEAR 1957. HOWEVER, THE INDEPENDENT OFFICES APPROPRIATION BILL, 1957, H.R. 9739, AS REPORTED OUT BY THE HOUSE COMMITTEE ON APPROPRIATIONS CONTAINED THE LANGUAGE "OF WHICH NOT LESS THAN $17,640,042 SHALL BE AVAILABLE FOR SUCH EXPENSES AS ARE NECESSARY FOR THE LOAN GUARANTY PROGRAM.' THIS LANGUAGE WAS DELETED IN ITS ENTIRETY FROM H.R. 9739 AS REPORTED BY THE SENATE COMMITTEE ON APPROPRIATIONS. SUCH ACTION WAS APPARENTLY TAKEN IN VIEW OF TESTIMONY BEFORE THE COMMITTEE BY REPRESENTATIVES OF THE VETERANS ADMINISTRATION (PAGES 444 AND 445, SENATE HEARINGS ON THE BILL) OBJECTING TO THE PROVISION FOR THE REASONS THAT INASMUCH AS THE APPROPRIATION WAS AVAILABLE FOR SUCH PURPOSE, SPECIFIC LANGUAGE WAS UNNECESSARY AND WOULD PREVENT THE USE OF THE $17,640,042 FOR OBJECTS OTHER THAN THE LOAN GUARANTY PROGRAM. THE PROVISION WAS RESTORED BY THE CONFEREES WITH AN AMENDMENT DELETING THE WORDS "NOT LESS THAN," AND AS EXPLAINED IN THE STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE, ACCOMPANYING THE CONFERENCE REPORT, HOUSE REPORT NO. 2396, THE LANGUAGE WAS INSERTED TO EARMARK FUNDS FOR THE LOAN GUARANTY PROGRAM. IT MAY REASONABLY BE CONCLUDED FROM THE FOREGOING THAT IT WAS NOT INTENDED TO LIMIT FUNDS FOR THE LOAN GUARANTY PROGRAM BUT TO ASSURE THAT AT LEAST THAT AMOUNT WOULD BE AVAILABLE FOR THAT PROGRAM AND WOULD NOT BE USED FOR OTHER AUTHORIZED OPERATING EXPENSES. ACCORDINGLY, THE INTERPRETATION OF YOUR ADMINISTRATION APPEARS PROPER AND THE GENERAL RULE, HEREINBEFORE STATED, IS NOT FOR APPLICATION IN THIS INSTANCE.

ATTACHMENT "B" RELATES TO THE APPROPRIATION UNDER THE HEADING "MEDICAL ADMINISTRATION AND MISCELLANEOUS OPERATING EXPENSES" AND CONCERNS THE APPLICABILITY OF THE LIMITATION ON TRAVELING EXPENSES TO FUNDS PROVIDED FOR MEDICAL RESEARCH. LANGUAGE PERTINENT TO THE MATTER HERE UNDER CONSIDERATION IS AS FOLLOWS:

"FOR EXPENSES NECESSARY FOR ADMINISTRATION OF THE MEDICAL, HOSPITAL, DOMICILIARY, SPECIAL SERVICE, CONSTRUCTION AND SUPPLY, RESEARCH, AND EMPLOYEE EDUCATION AND TRAINING ACTIVITIES; EXPENSES NECESSARY FOR CARRYING OUT PROGRAMS OF MEDICAL RESEARCH AND OF EDUCATION AND TRAINING OF EMPLOYEES, AS AUTHORIZED BY LAW; NOT TO EXCEED $992,200 FOR EXPENSES OF TRAVEL OF EMPLOYEES PAID FROM THIS APPROPRIATION * * * $20,773,800, OF WHICH $10,000,000 SHALL BE AVAILABLE FOR MEDICAL RESEARCH.'

THE LIMITATION CONTROL FOR TRAVEL EXPENSES IS DESCRIBED IN THE DEPUTY ADMINISTRATOR'S LETTER AS ".007 TRAVEL EXPENSES OF EMPLOYEES $1,045,400" WITH A REFERENCE TO ATTACHMENT "B" IN WHICH IT IS EXPLAINED THAT SINCE THE ORIGINAL BUDGET REQUEST FOR MEDICAL RESEARCH WAS INCREASED BY SEVENTY-SIX PERCENT BY PUBLIC LAW 623, THE INCREASE OF ALL OBJECTS OF EXPENSE INCLUDED IN THE BUDGET DOCUMENT (INCLUDING TRAVEL EXPENSE) HAS BEEN DISTRIBUTED ON A PARALLEL BASIS. IT IS STATED IN THE ATTACHMENT THAT YOUR ADMINISTRATION FEELS JUSTIFIED IN ASSUMING THAT CONGRESS INTENDED THAT THE ADDITIONAL FUNDS BE DISTRIBUTED ON AN OBJECTIVE BASIS SIMILAR TO THAT EXHIBITED IN THE BUDGET DOCUMENT. IT IS URGED THAT IT IS DIFFICULT TO BELIEVE THAT THE INTENT WAS TO EXCLUDE TRAVEL EXPENSE FROM SUCH A MATERIAL INCREASE SINCE IT IS VITALLY NECESSARY THAT THIS OBJECT OF EXPENDITURE BE APPROPRIATELY CONSIDERED IN THE ADMINISTRATION OF THE EXPANDED ACTIVITY.

IN VIEW OF THE FOREGOING, THE QUESTION HAS BEEN RAISED BY YOUR ADMINISTRATION WHETHER IN THE ABSENCE OF A SPECIFIC PROVISION FOR INCREASING THE MEDICAL RESEARCH TRAVEL FUNDS, ANY LIMITATION ON TRAVEL EXPENSE WITHIN THE AMOUNT EARMARKED BY CONGRESS WAS INTENDED. IT IS STATED THAT SHOULD THE ANSWER BE AFFIRMATIVE, YOUR ADMINISTRATION WILL ARBITRARILY REDUCE THE TRAVEL LIMITATION FOR THE APPROPRIATION BY THE AMOUNT BUDGETED FOR THE MEDICAL RESEARCH PROGRAM ($70,000) AND LIMIT THE AMOUNT AVAILABLE FOR THIS OBJECT OF EXPENDITURE TO $922,200 FOR THE REMAINING ACTIVITIES OF THE APPROPRIATION.

AN EXAMINATION OF THE LEGISLATIVE HISTORY OF THE APPROPRIATION ACT SHOWS THAT THE LIMITATION AMOUNT OF $992,200 INCLUDED $70,000 BUDGETED UNDER MEDICAL RESEARCH FOR EMPLOYEE TRAVEL. (PAGES 342 AND 336 HOUSE HEARINGS). IT IS NOTED THAT THE APPROPRIATION LANGUAGE AS PROPOSED IN THE BUDGET FOR THE FISCAL YEAR 1957 DID NOT EARMARK AN AMOUNT FOR MEDICAL RESEARCH, AND THAT THE AMOUNT OF $5,679,200 ESTIMATED FOR SUCH PURPOSE WAS INCREASED TO $10,000,000 AND EARMARKED BY AN AMENDMENT SUBMITTED ON THE FLOOR OF THE SENATE WHEN THAT BODY WAS CONSIDERING THE APPROPRIATION BILL AS PASSED BY THE HOUSE OF REPRESENTATIVES AND AS REPORTED OUT BY THE SENATE COMMITTEE ON APPROPRIATIONS. THE LEGISLATIVE HISTORY OF THE AMENDMENT IS SILENT WITH RESPECT TO ANY INCREASE IN TRAVEL EXPENSES. IS RECOGNIZED THAT AN ADDITIONAL AUTHORIZATION FOR EXPENSES OF TRAVEL IN ORDER TO ADMINISTER THE EXPANDED ACTIVITY MIGHT WELL HAVE BEEN MADE IN CONNECTION WITH SUCH A SUBSTANTIAL INCREASE IN FUNDS FOR MEDICAL RESEARCH. HOWEVER, NO SUCH ADDITIONAL AUTHORIZATION WAS MADE AND WE WOULD NOT BE WARRANTED, IN VIEW OF THE SPECIFIC LIMITATION OF $992,200 ON ALL EXPENSES OF TRAVEL OF EMPLOYEES UNDER THE APPROPRIATION "MEDICAL ADMINISTRATION AND MISCELLANEOUS OPERATING EXPENSES," IN DISREGARDING SUCH LIMITATION AS FAR AS THE MEDICAL RESEARCH PROGRAM, ONE OF THE OBJECTS THEREUNDER, IS CONCERNED. NEITHER THE INCREASE IN RESEARCH FUNDS NOR THE EARMARKING OF SUCH FUNDS WOULD CONSTITUTE A BASIS UPON WHICH TO IMPUTE AN INTENT OF CONGRESS THAT MEDICAL RESEARCH FUNDS WERE NOT TO BE SUBJECT TO A LIMITATION APPLICABLE TO THE ENTIRE APPROPRIATION. YOUR QUESTION IS ANSWERED ACCORDINGLY AND THE LIMITATION CONTROL SHOULD THEREFORE BE REVISED TO CONFORM TO THE MAXIMUM AMOUNT AUTHORIZED IN THE APPROPRIATION FOR TRAVEL EXPENSES OF EMPLOYEES. IF YOU BELIEVE THAT THE LIMITATION ON EXPENSES OF EMPLOYEES' TRAVEL WILL HANDICAP THE EXPANDED MEDICAL RESEARCH ACTIVITY, THE MATTER APPEARS PROPERLY ONE FOR PRESENTATION TO CONGRESS LOOKING TOWARD A LEGISLATIVE INCREASE IN THE TRAVEL EXPENSE LIMITATION.