FILE: B-180578-O.M. DATE: SEP 26, 1978

FILE: B-180578-O.M. DATE: SEP 26, 1978

1. When repairs and improvements are carried out by the District of Columbia Department of General Services (DOS) under authority of D.C. Code Sec. 1-244(k)(1973), then mere advances of funds from another District agency to DGS do not constitute obligations of fiscal year funds. However, orders and agreements for repairs and improvements made upon DGS within the fiscal year covered by the appropriation sought to be charged to meet a bona fide need arising within that year may be recorded as obligations against fiscal year funds. Also performance must be by DC-S and cannot be contracted out. 2. When repairs and improvements are carried out under authority of D.C. Code Sec. 9-501 (1953) then mere advances to the District of Columbia Department of General Services (DOS) by other District agencies do not obligate fiscal year appropriations. However, agreements in writing made within the fiscal year covered by the appropriation sought to be charge to meet a bone fide need arising within the year may he recorded as obligations against fiscal year funds. there orders to DGS do not serve to obligate fiscal year funds but become obligations only when DGS performs the work or contracts to have it performed. Under this provision, performance may be by either DGS or a third party contractor with DGS.

TO: Director, FGMSD

FROM: General Counsel - Paul G. Dembling

SUBJECT: Obligating fiscal year funds for interagency repairs and improvements performed under authority of D.C. Code Sections 1-244(k) and 9-501 - B-180578-O.M.

This memorandum is in response to an inquiry from Assistant Director Jerald K. DeRyder of your staff raising certain questions concerning the obligating of appropriations under interagency agreements or orders for repairs and improvements to be performed by the District of Columbia Department of General Services (DGS).

Our responses are summarized below:

1. If the repairs and improvements are carried out under authority of D.C. Code Sec. 1-244(k) (1973), then:

a. Mere advances of funds from one agency to another do not constitute obligations of fiscal year funds.

b. Orders and agreements for repairs and improvements made within the fiscal year covered by the appropriation sought to be charged to meet a bone fide need arising within that year may be recorded as obligations against fiscal year funds.

c. Performance must be by the requisitioning agency and cannot be contracted out.

2. If the repairs and improvements are carried out under authority of D.C. Code Sec. 9-501 (1973), then:

a. Mere advances do not obligate fiscal year appropriations.

b. Agreements in writing made within the fiscal year covered by the appropriation sought to be charged to meet a bone fide need arising within the year may be recorded as obligations against fiscal year funds. Mere orders do not serve to obligate fiscal year funds, but become obligations only when DGS performs the work or contracts to have it performed.

c. Performance may be either by the requisitioned agency or by contract.

The reasons for our conclusions are set forth in considerable detail below, at the request of Mr. Skip Goldberg of the District's Office of Municipal Audit who indicated that he would appreciate such a discussion of the issues.

D. C. Code Sec. 1-244(k) is generally patterned after section 601 of the Economy Act of 1932, as amended, 31 U.S.C. Sec. 686 (1970). While the Economy Act is not applicable to the District of Columbia (B-107612. February 8, 1952), because of its similarity in language to D.C. Code Sec. 1-244(k), decisions interpreting the Economy Act are generally helpful in interpreting the District provision. However, there are differences in the two statutes.

1. Availability of advance payments for obligation.

There is no provision in D. C. Code Sec. 1-244(k) similar to a provision in 31 U. S. C, Sec. 686(c) regarding the availability of advances for obligational purposes. Furthermore, interagency agreements under 31 U.S.C. Sec. 686 which are chargeable to fiscal year appropriations are required by 31 U.S.C. Sec. 686-1 to be deobligated at the end of the fiscal year of appropriation obligation availability to the extent that the performing agency has not incurred valid obligations under the agreement. This requirement applies solely to 31 U.S.C. Sec. 686 transactions, and does not limit the obligational period of funds when there is separate independent statutory authority for the order or agreement. See 55 Comp. Gen. 1497 (1976) 39 Comp. Gen. 317 (1959); 31 Comp. Gen. 83 (1951). We are unaware of any provision similar to 31 U.S.C. Sec. 686-1 applicable to the District, and thus there is no deobligation requirement as is imposed on Economy Act transactions, for transactions taking place under authority of D.C. Code Sec. Sec.1-244(k) and 9-501.

2. Working funds repairs and improvements.

Decisions interpreting laws establishing or affecting working funds for the Federal Government are also helpful in interpreting D.C. Code Sec. 9- 501.

Generally, working funds are established or authorized to be established pursuant to some provision of law. However, unless otherwise provided by law, limitations on the use or availability of funds continue to apply to those funds even after they have been transferred to a working fund. 28 Comp. Gen. 365 (1948); 19 Comp. Gen. 774 (1940). See also 31 U.S.C. Sec. 628-1 (1970).

It can be argued that since neither D. C. Code Sec. 1-244(k) nor Sec. 9- 501 is mandatory, the Mayor has the discretion to utilize either or both as authority for interdepartmental performance of repairs and improvements, If both are used, then the requirements of both must be adhered to, and if a conflict exists, it can be resolved us-ing the general rules of statutory construction (e. A,, the more specific provision should prevail over the more general, the latter over the earlier, etc.).

The Repairs and Improvements Working Fund is authorized by D.C. Code Sec. 9-501 which provides that:

"On and after July 1, 1954, work performed for repairs and improvements may be by contract or otherwise, except for amounts exceeding $5,000 which shall be determined by the Commissioner of the District of Columbia; and the Commissioner is authorized to establish a working fund for such purposes without fiscal year limitation, said fund to be reimbursed for repairs and improvements performed under that fund from funds available for these purposes, and payments are authorized to be made to said fund iri advance if required by the Director of Buildings and Grounds subject to subsequent adjustments, from funds available for necessary expenses, including allowances for privately owned automobiles."

The establishment of a Repairs and Improvements Working Fund (R&IWF) was first authorized by section 6 of the District of Columbia Appropriation Act of 1951, approved July 18, 1950. ch. 467, 64 Stat. 347, 368, and was reauthorized on an annual basis until made a permanent provision of law by section 5 of the District of Columbia Appropriation Act, 1955, approved July 1, 1954, ch. 468, 68 Stat. 378, 393. While there is little relevant legislative history concerning the adoption of the provision in the 1950 Appropriation Act, the legislative history of the provision included in the 1955 Apropriation Act affords some insight into the intent of the Congress in adopting this provision.

Prior to adoption of the 1951 Appropriation Act, appropriations for "Repairs and maintenance of buildings and grouncds" provided as part of the "Operating Expenses" appropriation for publics schools were specifically made available "for makings repairs to older mununicipal buildings subject to reimbursement from other applicable appropriations for the cost of such work." See District of Columbia Appropriation Act of 1950, approved June 29, 1949, ch. 279, 63 Stat. 303, 306. In 1951, it was proposed that the above quoted authority be deleted from the "Repairs and maintenance of buildings and grounds" appropriation language and a new section 6 be added to the General Provisions. The proposed change was justified as follows:

"CHANGE IN LANGUAGE

"Delete: 'Provided, That this appropriation shall be available for making repairs to other municipal buildings, subject to reimbursement from other applicable appropriations for the cost of such work and a report of all such expenditures shall be submitted to Congress in the annual budget.'

"This change in language is requested because it will not be necessary hereafter to reimburse this appropriation for the cost of repairs to other municipal buildings, since the Commissioners are including language in section 6 which, if approved by the Congress, would authorize the establishment of a trust fund to which would be charged the cost of the repairs and improvements for all municipal buildings, including the public-school buildings. If this trust fund is authorized in 1951 and thereafter it is contemplated that the public-schools will make quarterly transfers from the public-school appropriation for 'Repairs and maintenance of buildings and grounds' to the trust fund to take care of the cost of all such repairs and improvements. "

Hearings on District of Columbia Appropriations for 1951 before a Subcommittee of the House Appropriations Committee, 81st Cong., 2d Sess., pt. 1 at 214 (1950). Further explanation is afforded in the Hearings on the District of Columbia Appropriations for 1951 before the Subcomittee of the Senate Appropriations Committee, 8lst Cong., 2nd Sess., l64-165 (1950), whre it states:

"CHANGE IN LANGUAGE

"Dr. CORNING. There is a change in language which we would like to call to your attention on page 150 of the justifications. This change in language is requested because it will not be necessary hereafter to reimburse this appropriation for the cost of repairs to other municipal buildings since the Commissioners are including language in section 6 which, if approved by the Congress, would authorize the establishment of a trust fund to which would be charged the cost of the repairs and improvements for all municipal buildings, including the public school buildings.

* * * * *

"Mr. HUTSON. At the present time the repair shop, with about 225 mechanics and laborers, operates to improve the buildings and the grounds. They are permitted by law to use that appropriation for other institutions with the understanding that reimbursements will be made for any work performed. That poses a problem at the end of the year when the reimbursement [sic) are made and they are usually not made in time for the repair shop to use the funds for school -work.

"In addition, many of these institutions which have work to be done in the latter part of the year cannot have the work performed because the funds lapse on June 30. This new language will provide for the elimination of the fiscal-year limitation which, I think, is the best feature of the language as proposed.

"Senator HILL. At 'this point we will put the language into the record so that the record will be clear regarding it.

"(The change in language referred to is as follows:)

"'Sec. 6. Work performed for repairs arid improvements under appropriations contained in this Act may be by contract or otherwise, as determined by the Commissioners; and the Commissioners are authorized to establish a working fund for such purposes without fiscal year limitation, said fund to be reimbursed for repairs and improvements performed under that fund from available appropriations contained in this Act, and transfers are authorized to be made to said fund in advance if required by the Director of Construction, subject to subsequent adjustment, from appropriations contained in this Act for repairs and improvements, and such working fund shall be available for necessary expenses including personal services, allowances for privately owned automobiles, and printing and binding.'"

We note that there is no mention of where the money was initially to come from to establish the R&IWF. However, in view of the fact that there was intended to be funds in the R&IWF which could finance work, the cost of which later was to be reimbursed to the R&IWF from appropriations available to the various District departments for repairs and improvements, it must be presumed that it was intended that an appropriation for this purpose be specifically requested. Once the appropriation was requested and made, the reimbursements paid to the fund when work was performed became available without fiscal year limitation foe financing for other repairs and improvements. However, while advances could be authorized from funds available, subject to subsequent adjustments, such advances could not constitute the basis of a general fund available for any purpose other than performance of the specific work requested on which the advance was based. Furthermore, advances to the working fund do not serve to obligate the funds or to extend the period of availability of the appropriations beyond the period provided by the Act appropriating the funds. Compare 23 Comp. Gen. 88 (1943); id. 668 (1944).

3. Obligations.

We note that 31 U.S.C. Sec. 200 (1970) provides in pertinent part

"(a) After Aug. 26, 1954 no amount shall be recorded as an obligation of the Government of the United States unless it is supported by documentary evidence of-

"(1) a binding agreement in writing between the parties thereto' including Government agencies, in a manner and form and for a purpose authorized by law, executed before the expiration of the period of availability for obligation of the appropriation or fund concerned for specific goods to be delivered, real property to be purchased or leased, or work or services to be performed; or

* * * * *

"(3) an order rewired lay land to be placed with a Government agency; * * *."

Whether or not this provision of law applies to the District of Columbia depends on the terms of the legislation and the intent of the Congress. See 25 Comp. Gen. 579 (1916). This provision expressly applies to obligations of the Government of the United States and would thus appear to be inapplicable to obligations of the Government of the District of Columbia, a separate and distinct entity from the Federal Government. See 36 Comp. Gen. 457 (1956); B-39254, February 10, 1944.

However, the legislative history of 31 U.S.C. Sec 200 indicates that the purpose of this provision was to clarify what constituted obligations against outstanding appropriations in order to assist the appropriations committees in determining future requirements and thereby provide a sound basis for their operations. See H. R. Rep. No. 2266, 83d Cong., 2a Sess., 49-50 (1954). Since this need is the same from the congressional standpoint regardless of whether the District of Columbia Government or the Federal Government is involved in requesting appropriations, the criteria set forth in 31 U.S.C. Sec. 200 should be followed both by the Federal Government and the District Government in order to achieve the statute's intended purpose.

Furthermore, uniform criteria would facilitate the application of the Antideficiency Act, 31 U.S.C. Sec. 660 (1970 and Supp. V, 1975), to the District. Additionally, in o2 Comp. Gen. 436 (1953) we prescribed standards for obligating appropriations by orders in stock fund transactions. In explaining the reasons for doing so we stated:

"In order to determine the status of appropriations both from the viewpoint of management and the Congress, it is essential that obligations be recorded in the accounting records on a factual and consistent basis throughout the Government. Only by the following of sound practices in this regard can data on existing obligations serve to indicate program accomplishments and be related to the amount of additional appropriations recruited." 32 Comp. Gen. at 437.

The same justification would seem to apply with equal force to recording obligations of District appropriations. Thus even though 31 U.S.C. Sec 200 does not expressly apply to the District of Columbia, in view of the policy set forth in 32 Coup. Gen. 436, supra, the same criteria should be followed in determing what may be recorded as an obligation against District appropriations. In fact, 31 U.S.C. Sec. 200 for the most part merely restates the policy previously followed by this Office in determining what properly constituted obligations against appropriated funds.

Finally, we have held that an adequate accounting system for the District of Columbia conforming to our prescribed principles, standards, and related requirements for accounting is required, and should be submitted to us for approval in accordance with the procedures established for approving accounting systems. 39 Comp. Gen. 400 (1959). See gererally chapter 3 of title 2 of the GAO Policy and Procedures Manual for Guidance of Federal Agencies. Particularly, 2 GAO 27.1 requires each agency to devise an accounting system which conforms in all respects with prescribed principlcs, standards and related rcquirements. 2 GAO 29.1 sets forth the basic criteria for review of accounting principles and standards and system designs, providing in pertinent part as follows:

"The basic criteria for review and evaluation of agencies' accounting systems by the General Accounting Office, in connection with approval of the systems by Comptroller General, are the prescribed principles, Standards, and related requirements contained in chapter 2 of this title. [2 GAO Sec.(s) 7-18]

"The following titles of this Manual also contain requirements to be followed in tbc establishment and maintenance of accounting systems. Conformance with these requirements is also considered in the approval of accounting systems.

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"Title 7: Fiscal Procedures" (Emphasis supplied.)

We note that 2 GAO 10.4 acts forth the criteria of 31 U.S.C. Sec. 200 for recording obligations under accounting systems and thus makes them a requirement for systems approval. See also 7 GAO 16 and 17. We also note that the authority for this Office to approve the District's accounting system was not expressely repealed by the District of Columbia Self Government and Governmental Reorganization Act.

Further section 2(e)(4) of Public Law No. 94-309, D.C. Code Sec. 47 101nt (Supp. IV, 1977), requires the Comptroller General to approve, disapprove, or modify plans prepared by contractors for the improvement of yhe financial management systems of the District of Columbia Government. T his law requires the Comptroller General to submit each plan and design to the Congress within 60 days after he receives it, and after consultation with the Commission on Fincial Oversight of the District of Columbia. The law further provides that plans and designs approved by the Comptroller General will become a part of the District Government's financial planning, reporting, accounting, control, and operating procedures. Although feasible, it is unlikely that this Office would approve a contractor's financial management plan that did not comply with the accounting principals set forth in the General Accounting Office Policy and Procedures Manual for Guidance of Federal Agencies.

Applying the criteria established by 31 U.S.C. Sec. 200 to the District, then work orders required by either statute or statutory regulation to be placed with the R&IWF and performed in whole or in part by agency personnel may be recorded as obligations when the order is placed. 31 U.S.C. Sec. 200(a)(3); 35 Comp. Gen 3 (1955); 34 Comp. Gen. 705 (1955). Voluntary orders placed by other agencies for work or serviccs to be performed by Department of General Services personnel or by contract when authorized, see infra) may be recorded as obligations when the work in performed by DGS or the contract executed. 34 Comp. Gen. 705 (1955). Of course if voluntary orders could qualify as agreements under 31 U.S,C. Sec. 200(a)(1) they could be recorded as obligations under the authority of that provision. See 30 Comp. Gen. 829 (1960).

4. Contracting out.

Under D.C. Code Sec. 1-244(k) if the District's Department of General Services is otherwise in a position to furnish services to another department or agency of the District Government (including repairs improvements), then an order placed with DGS would obligate the ordering agency's appropriation in the same manner as order or contract placed with private contractors. However, if this provision alone is relied on as authority to perform interagency repairs and improvements, then the performing agency (Department of Gencral Services) must already be in a position to perform the work or services ordered or requisitioned, and they could not be performed by private parties under contract with DGS. This is because the statute only empowers the Mayor to --

"authorize any department, office, or agency of the Ditrict of Columbia government * * * to place orders with any other department, office, or agency of the District for materials, supplies, equipment, work, or services of any kind that such requisitioned department, office, or agency may be in a posiiton to supply or equipped to render. (Emphasis added.)

Compare 19 Comp. Gen. 544 (1939); id. 702 (1940), holding that similar language in 31 U.S.C. Sec. 686 does not authorize the transfer of funds from one Federal agency to another for the purpose of having the second agency procure the perfornance by contract with private parties. However, since 31 U.S.C. Sec. 686-1 does not apply to the District, interagency orders placed under D.C. Code Sec. 1-244(k) are considered obligations in the same manner as contracts or orders placed with private parties. The general rule relative to obligating fiscal year money by order or contract is that (1) the order or contract must be made within the fiscal year covered by the appropriation sought to be charged, and (2) the subject matter must concern a need arising within that fiscal year. See 56 Comp. Gen. 351, 352 (1977); 55 Comp. Gen. 1497 (1976); and 2 Comp. Gen. 825 (1923). For obligation appropriations by contract for repairs and improvements, see 1 Comp. Gen. 708 (1922). Once obligated, they may be expended even though the period of availability for obligating has otherwise expired.

There is no similar requirement under D.C. Code Sec. 9-501. Furthermore, this provision specfifcally authorizes the performance each work by contract or otherwise. Originally, the Commissioner's--now--Mayor's-- approval was required before work in excess of $5,000 could be performed by contract or hired labor. See also D.C. Code section 1-245 regarding appointment of contracting officers. However, in view of sections 422(6), 717 and 761 of the District a{ Columbia Self-Government and Governmental Reorganization Act, Pub. L. No. 93-198, 87 Stat. 790, 820 and 836, D.C. Code sections 1-162(6), 1-128 (b) and 1-128(a), which authorize the Mayor to delegate any of his functions with certain exceptions, and provide that provisions of that Act shall prevail over inconsistent provisions of other laws, it would appear that such monetary limitations of the Mayor's authority to delegate are now inapplicable. Therefore, Mayor's Order 75- 261, December 19, 1975, as amended by Mayor's Order 76-155, August 12, 1976, and Mayor's Order 76-232, November 10, 1976, appointing contacting officers and authorizing certain of these contracting officers, i.e., the Director of the Department of General Services, the Director of the Department of Transportation, the Director of the Department of Enviromental Services, the Director of the Director of the Department of Housing and Community Development, to determine whether repairs and improvements shall be performed by contract of by government personnel appears to be within the Mayor's discretion and authority. Thus these agencies are nor required to have Department of General Services perform (either in house or by contract or hired labor) repairs and improvements to their facilities. Agencies which lack the authority to contract and do not have the personnel capability to perform their own repairs, as a practical matter, have no alternative but to have repairs and improvements performed by the Department of General Services. However, to our knowledge, there is no statute or regulation issued pursuant to statute specifically requiring that such agencies have DGS perform repairs and improvements to their facilities. Consequently, use of the R&IWF in all cases appears to be voluntary.