Administrative Cost Limitation: Pittman-Robertson and Dingell-Johnson Acts

The Department of the Interior requested an interpretation of two federal laws prescribing a limitation on indirect administrative costs assessed for state central services to grantee agencies under the Fish and Wildlife Service Federal Aid Program. Colorado has combined several agencies including the Division of Wildlife, into a Department of Natural Resources; the Division appears to be the state agency having primary jurisdiction over the wildlife resources of the state, as defined by federal statute. Certain costs are assessed against the Division by its parent Department, which the Division contends are, therefore, outside the control of the agency of primary jurisdiction, since the Department is at a higher level. The Division concludes that these costs, the 3-percent administrative expense limitation, required to qualify for federal aid, must apply solely to the parent Department. Interior's Office of Audit and Investigation believes that, while the expenses are for services provided outside of the agency having primary jurisdiction over wildlife resources, they do not meet the second legislative criterion of being provided by state central activities. In the consolidation of the Department, certain administrative expenses previously charged to the predecessor wildlife agency devolved upon the new Department, along with the functions which it supported. The purpose of the federal administrative expense limitation for recipient state agencies was to discourage the draining of grant monies from land acquisition and fieldwork. GAO acknowledged that the appropriate Colorado statutes provide reasonable grounds for the Wildlife Division to meet the primary jurisdiction test and that the Division functions as the state fish and game department, as the federal law requires. The proportion of Department costs imposed on the Division of Wildlife reflecting administrative expenses are not directly attributable to Division activities, but to the operation of the parent Department. It was clearly not these costs sustained by nonoperational agencies which Congress intended to discourage. Therefore, the Division of Wildlife is not bound by the federal expense limitation.