B-110479, JULY 16, 1952, 32 COMP. GEN. 29

B-110479: Jul 16, 1952

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1952: REFERENCE IS MADE TO YOUR LETTER OF JUNE 24. YOUR QUESTION IS PREMISED UPON THE PROVISO TO THE APPROPRIATION FOR THE FEDERAL-AID AIRPORT PROGRAM CONTAINED IN THE DEPARTMENT OF COMMERCE APPROPRIATION ACT. THAT THE APPROPRIATION UNDER THIS HEAD FOR THE NEXT PRECEDING FISCAL YEAR IS HEREBY MERGED WITH THIS APPROPRIATION AND THE CONTRACT AUTHORIZATION HERETOFORE GRANTED FOR THE FOREGOING PURPOSES MAY HEREAFTER BE ACCOUNTED FOR UNDER THIS HEAD. IT IS STATED FURTHER IN YOUR LETTER THAT EACH OF THE ACTS APPROPRIATING FUNDS TO THE CIVIL AERONAUTICS ADMINISTRATION FOR THE FEDERAL-AID AIRPORT PROGRAM. THE LETTER STATES THAT THE MERGING OF ALL FUNDS MADE AVAILABLE FOR FEDERAL-AID AIRPORT PROGRAM PURPOSES INTO ONE HEAD IS IN COMPLETE ACCORD WITH THE INTENT OF THE ENABLING LEGISLATION AND SERVES TO OBVIATE CUMBERSOME ACCOUNTING PRACTICES INCIDENT TO RELATING APPROPRIATIONS TO A PARTICULAR FISCAL YEAR.

B-110479, JULY 16, 1952, 32 COMP. GEN. 29

ACCOUNTS - FEDERAL-AID AIRPORT PROGRAM - CONSOLIDATION OF APPROPRIATIONS AND CONTRACT AUTHORIZATIONS IN VIEW OF THE CONTINUING NATURE OF THE FEDERAL-AID AIRPORT PROGRAM AND THE PROVISO IN THE DEPARTMENT OF COMMERCE APPROPRIATION ACT OF 1952 WHICH MERGED PRIOR YEAR FUNDS AND CONTRACT AUTHORIZATIONS, THE CIVIL AERONAUTICS ADMINISTRATION MAY MERGE FUNDS APPROPRIATED FOR OBLIGATION AND EXPENDITURE WITH AMOUNTS OF CONTRACT AUTHORIZATIONS FOR THE SAME PURPOSES.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF COMMERCE, JULY 16, 1952:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 24, 1952, CONCERNING THE ACCOUNTING PRACTICES FOLLOWED BY THE CIVIL AERONAUTICS ADMINISTRATION IN ADMINISTERING THE FEDERAL-AID AIRPORT PROGRAM UNDER THE FEDERAL AIRPORT ACT OF MAY 13, 1946, 60 STAT. 174, AS AMENDED, 49 U.S.C. 1101 ET SEQ., AND PRESENTING THE QUESTION AS TO WHETHER FUNDS APPROPRIATED FOR OBLIGATION AND EXPENDITURE FOR SUCH PURPOSES MAY BE MERGED WITH CONTRACT AUTHORIZATIONS PROVIDED FOR THE SAME PURPOSES. YOUR QUESTION IS PREMISED UPON THE PROVISO TO THE APPROPRIATION FOR THE FEDERAL-AID AIRPORT PROGRAM CONTAINED IN THE DEPARTMENT OF COMMERCE APPROPRIATION ACT, 1952, APPROVED OCTOBER 22, 1951, 65 STAT. 589, AS FOLLOWS:

PROVIDED, THAT THE APPROPRIATION UNDER THIS HEAD FOR THE NEXT PRECEDING FISCAL YEAR IS HEREBY MERGED WITH THIS APPROPRIATION AND THE CONTRACT AUTHORIZATION HERETOFORE GRANTED FOR THE FOREGOING PURPOSES MAY HEREAFTER BE ACCOUNTED FOR UNDER THIS HEAD.

AS STATED IN YOUR LETTER SECTIONS 5 (B) AND (C) OF THE FEDERAL AIRPORT ACT, SUPRA, AUTHORIZE ANNUAL APPROPRIATIONS IN THE RESPECTIVE AGGREGATE AMOUNTS OF $500,000,000 AND $20,000,000 OVER A PERIOD OF SEVEN FISCAL YEARS TO REMAIN AVAILABLE UNTIL JUNE 30, 1953, UNLESS SOONER EXPENDED (EXTENDED TO TWELVE FISCAL YEARS, JUNE 30, 1958, BY THE ACT OF SEPTEMBER 27, 1950, 64 STAT. 1071), FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THE ACT WITH RESPECT TO PROJECTS IN THE SEVERAL STATES AND TERRITORIES. IT IS STATED FURTHER IN YOUR LETTER THAT EACH OF THE ACTS APPROPRIATING FUNDS TO THE CIVIL AERONAUTICS ADMINISTRATION FOR THE FEDERAL-AID AIRPORT PROGRAM, FROM ITS INCEPTION THROUGH THE FISCAL YEAR 1952, WITH MINOR VARIATIONS, PROVIDED FUNDS FOR DIRECT OBLIGATION AND EXPENDITURE, AUTHORITY TO ENTER INTO CONTRACTS, AND FUNDS TO LIQUIDATE CONTRACT AUTHORIZATIONS PREVIOUSLY GRANTED; THAT EXCEPT FOR THE INITIAL APPROPRIATION MADE BY THE DEPARTMENT OF COMMERCE APPROPRIATION ACT, 1947, 60 STAT. 468, EACH SUBSEQUENT APPROPRIATION CONTAINED A PROVISION WHICH MERGED THE FUNDS OF THE PRECEDING YEAR WITH THE NEW APPROPRIATIONS; AND THAT THE PROVISO TO THE FISCAL YEAR 1952 APPROPRIATION MERGED THE PRECEDING APPROPRIATIONS AND CONTRACT AUTHORIZATIONS, AND CONTINUED THE AVAILABILITY OF ALL FUNDS PREVIOUSLY APPROPRIATED UNTIL JUNE 30, 1954.

IN CONNECTION THEREWITH, THE LETTER STATES THAT THE MERGING OF ALL FUNDS MADE AVAILABLE FOR FEDERAL-AID AIRPORT PROGRAM PURPOSES INTO ONE HEAD IS IN COMPLETE ACCORD WITH THE INTENT OF THE ENABLING LEGISLATION AND SERVES TO OBVIATE CUMBERSOME ACCOUNTING PRACTICES INCIDENT TO RELATING APPROPRIATIONS TO A PARTICULAR FISCAL YEAR. YOUR LETTER THEN CALLS ATTENTION TO OFFICE DECISION OF APRIL 29, 1952, B-106875, 31 COMP. GEN. 543, TO YOU, IN WHICH IT WAS STATED THAT THE USE OF THE APPROPRIATION MERGER PROVISO EACH YEAR APPEARS TO HAVE BEEN SOLELY FOR THE SIMPLIFICATION OF ACCOUNTING RECORDS, AND QUOTES FROM GENERAL ACCOUNTING OFFICE, ACCOUNTS AND PROCEDURES LETTER NO. 15119, OF APRIL 12, 1950, WHICH DISCONTINUED LIMITATION ACCOUNTING FOR FUNDS APPROPRIATED FOR THE LIQUIDATION OF OBLIGATIONS INCURRED UNDER CONTRACT AUTHORIZATIONS, IN VIEW OF THE INABILITY TO IDENTIFY SUCH APPROPRIATIONS WITH SPECIFIC CONTRACT AUTHORIZATIONS, AND IN CONSIDERATION OF THE CONTINUING NATURE OF THE AIRPORT PROGRAM.

YOU SUGGEST THAT THE MERGING OF FUNDS MADE AVAILABLE IN THE SEVERAL FEDERAL-AID AIRPORT PROGRAM APPROPRIATIONS FOR DIRECT OBLIGATION AND EXPENDITURE EMBODIES A SIMPLE PROCEDURE, AND THAT WHILE THE MERGER OF SUCH FUNDS WITH CONTRACT AUTHORIZATIONS EMBRACES AN IDENTICAL PROCEDURE, THE LATTER MERGER IS MORE DIFFICULT TO COMPREHEND IN VIEW OF THE INTANGIBLE NATURE OF A CONTRACT AUTHORIZATION. HOWEVER, YOU EXPRESS THE OPINION THAT THE PROCEDURES FOLLOWED BY THE CIVIL AERONAUTICS ADMINISTRATION IN THE MATTER, SINCE THE ISSUANCE OF THE REFERRED-TO-1ACCOUNTS AND PROCEDURES LETTER, IS IN ACCORD WITH THE ABOVE QUOTED FISCAL YEAR 1952 MERGER PROVISO, AND YOU REQUEST THE VIEWS OF THIS OFFICE WITH RESPECT TO THE PROPRIETY THEREOF.

THE PROCEDURES SUBMITTED FOR CONSIDERATION ARE OUTLINED IN YOUR LETTER AS FOLLOWS:

ACTING IN ACCORDANCE WITH THE PROCEDURE INAUGURATED IN YOUR A AND P LETTERS, THE CIVIL AERONAUTICS ADMINISTRATION, FOR OBLIGATION PURPOSES, TREATS CONTRACT AUTHORIZATIONS IN THE SAME MANNER AS FUNDS DIRECTLY APPROPRIATED FOR OBLIGATION AND EXPENDITURE SINCE BOTH AMOUNTS REPRESENT FUNDS WHICH MUST BE EXPENDED FOR THE SAME PURPOSES. THE TWO AMOUNTS ARE MERGED FOR EXPENDITURE PURPOSES JUST AS THE CONTRACT AUTHORIZATIONS AND FUNDS DIRECTLY APPROPRIATED FOR OBLIGATION AND EXPENDITURE ARE MERGED FOR OBLIGATION PURPOSES. THE TWO RESULTANT ACTIONS, ONE OF OBLIGATION AND THE OTHER OF EXPENDITURE, ARE THUS PRECISELY THE SAME AS THE BASIC OBLIGATION AND EXPENDITURE PROCEDURE WHICH IS FOLLOWED BY ALL GOVERNMENT AGENCIES WHEN ACTING UNDER THE USUAL APPROPRIATION WHICH MERELY PROVIDES FUNDS FOR OBLIGATION AND EXPENDITURE AND DOES NOT INCORPORATE THE ADDITIONAL ELEMENT OF CONTRACT AUTHORIZATION.

OPERATING UNDER THIS PROCEDURE, THE CAA DETERMINES THE SPECIFIC AMOUNT AVAILABLE FOR OBLIGATION AT ANY ONE TIME BY ADDING DIRECT APPROPRIATIONS FOR PROJECTS AND CONTRACT AUTHORITY FOR PROJECTS. ALLOTMENTS TO FIELD OFFICES ARE MADE WITHOUT REGARD TO WHETHER AMOUNTS ARE DERIVED FROM DIRECT APPROPRIATIONS OR CONTRACT AUTHORITY. ON A CUMULATIVE BASIS, THEREFORE, TOTAL OBLIGATIONAL AUTHORITY IS EQUAL TO THE SUM OF DIRECT APPROPRIATIONS FOR PROJECTS AND CONTRACT AUTHORITY. TOTAL OBLIGATIONAL AUTHORITY CANNOT, OF COURSE, BE INCREASED IN ANY MANNER BY AMOUNTS APPROPRIATED FOR LIQUIDATION OF CONTRACT AUTHORITY. ON THE EXPENDITURE SIDE OF THE PICTURE, LIQUIDATIONS OF OUTSTANDING OBLIGATIONS ARE MADE FROM TOTAL UNEXPENDED BALANCES REMAINING AVAILABLE AT THE TIME PAYMENTS BECOME DUE. NO ATTEMPT IS MADE, AND IT WOULD IN FACT SERVE NO USEFUL PURPOSE, TO DETERMINE WHETHER PARTICULAR PAYMENTS ARE BEING MADE FROM DIRECT APPROPRIATIONS OR APPROPRIATIONS TO LIQUIDATE CONTRACT AUTHORITY.

SINCE THE INCEPTION OF THIS PROGRAM, FUNDS APPROPRIATED FOR NEW PROJECTS TOTAL $89,079,672; CONTRACT AUTHORITY GRANTED TOTAL $94,700,000, MAKING A TOTAL OBLIGATIONAL AUTHORITY OF $183,779,672. FOR LIQUIDATION OF THE $94,700,000 CONTRACT AUTHORIZATIONS A TOTAL OF $55,500,000, HAS BEEN APPROPRIATED LEAVING $39,200,000 OF CONTRACT AUTHORIZATIONS UNFINANCED.

BUDGET ESTIMATES FOR 1953 INCLUDE $14,675,000 FOR DIRECT APPROPRIATIONS FOR PROJECTS PLUS $9,000,000 FOR LIQUIDATIONS OF CONTRACT AUTHORIZATIONS. IN ACCORDANCE WITH PROCEDURE DESCRIBED IN THIS LETTER, THE AMOUNT REQUESTED FOR LUQUIDATION OF CONTRACT AUTHORIZATION WAS BASED ON ESTIMATED REQUIREMENTS FOR TOTAL CASH WITHDRAWALS FROM THE TREASURY WITHOUT REGARD TO THE FISCAL YEAR IN WHICH OBLIGATIONS TO BE LUQUIDATED WERE INCURRED. SPECIFICALLY, TOTAL CASH WITHDRAWALS ARE ESTIMATED AT $34,700,000 DURING FISCAL YEAR 1953. THIS REQUIREMENT WOULD BE MET BY (1) THE APPLICATION OF UNEXPENDED BALANCES FROM PRIOR YEAR APPROPRIATIONS OF $11,025,000, (2) $9,000,000 REQUESTED FOR APPROPRIATION IN 1953 FOR LIQUIDATION OF CONTRACT AUTHORIZATIONS, AND (3) $14,575,000 REQUESTED FOR DIRECT APPROPRIATION FOR NEW PROJECTS. THUS TOTAL CASH WITHDRAWALS WOULD EQUAL TOTAL APPROPRIATIONS AVAILABLE FOR EXPENDITURE, LEAVING A BALANCE OF APPROXIMATELY $30,000,000 IN UNLIQUIDATED OBLIGATIONS TO BE MET FROM APPROPRIATIONS MADE SUBSEQUENT TO FISCAL YEAR 1953.

IN OFFICE LETTER OF MAY 14, 1948, B-76061, TO THE DIRECTOR, BUREAU OF THE BUDGET, IT WAS STATED ,* * * THAT AS A GENERAL PROPOSITION CONTRACT AUTHORIZATIONS APPEARING IN APPROPRIATION ACTS ARE CO EXTENSIVE WITH THE APPROPRIATIONS IN CONNECTION WITH WHICH THEY APPEAR. THAT IS TO SAY, THE PERIOD DURING WHICH THE APPROPRIATION REMAINS AVAILABLE FOR OBLIGATION CONSTITUTES THE PERIOD DURING WHICH THE AUTHORITY TO CONTRACT MAY BE EXERCISED.' IT WOULD SEEM TO FOLLOW THAT THE AUTHORITY CONTAINED IN THE SEVERAL FEDERAL-AID AIRPORT PROGRAM APPROPRIATIONS, WITH RESPECT TO MERGING THE FUNDS PREVIOUSLY APPROPRIATED WITH THE NEW FUNDS APPROPRIATED, APPLIED WITH EQUAL FORCE TO THE MERGER OF CONTRACT AUTHORIZATIONS PROVIDED FOR THEREIN. BUT, HOWEVER THAT MAY BE, IT SEEMS CLEAR THAT THE MERGER PROVISO IN THE DEPARTMENT OF COMMERCE APPROPRIATION ACT, 1952, SUPRA, SPECIFICALLY AUTHORIZES THE CIVIL AERONAUTICS ADMINISTRATION TO MERGE AND ACCOUNT FOR ALL CONTRACT AUTHORIZATIONS PREVIOUSLY GRANTED UNDER THE APPROPRIATION HEAD TO WHICH IT IS ATTACHED.

AS HEREINABOVE STATED, THE USE OF THE MERGER PROVISO EACH YEAR UNDER THE FEDERAL-AID AIRPORT PROGRAM APPROPRIATIONS, WAS PRIMARILY FOR THE PURPOSE OF SIMPLIFYING THE ACCOUNTING RECORDS BY CONSOLIDATING INTO A SINGLE ACCOUNT THE OBLIGATION AND EXPENDITURE AUTHORITY PROVIDED THE CIVIL AERONAUTICS ADMINISTRATION IN CARRYING OUT THE SAID PROGRAM. SINCE IT WAS DETERMINED NOT TO BE NECESSARY OR PRACTICABLE FROM AN ACCOUNTING STANDPOINT, TO ADMINISTRATIVELY ACCOUNT THROUGH SEPARATE LIMITATIONS FOR EXPENDITURES INCIDENT TO LIQUIDATION OF OBLIGATIONS UNDER CONTRACT AUTHORIZATIONS--- AS DISTINGUISHED FROM EXPENDITURES FOR APPROPRIATION CONTRACTUAL OBLIGATIONS--- IT REASONABLY FOLLOWS THAT, IN SUCH CIRCUMSTANCES, NO REAL PURPOSE WOULD BE SERVED IN SEPARATELY ACCOUNTING FOR OBLIGATIONS INCURRED UNDER FEDERAL-AID AIRPORT PROGRAM APPROPRIATIONS AND CONTRACT AUTHORIZATIONS.

IN VIEW OF THE ABOVE AND OF THE REPRESENTATIONS CONTAINED IN YOUR LETTER, I HAVE TO ADVISE THAT THIS OFFICE CONCURS IN YOUR OPINION THAT THE FOREGOING PROCEDURES FOLLOWED BY THE CIVIL AERONAUTICS ADMINISTRATION IN ADMINISTERING THE FEDERAL-AID AIRPORT PROGRAM ARE IN ACCORD WITH THE FISCAL YEAR 1952 MERGER PROVISO, AND APPEAR UNOBJECTIONABLE. ACCORDINGLY, THE QUESTION PRESENTED IN YOUR LETTER IS ANSWERED IN THE AFFIRMATIVE.