B-132861, OCTOBER 4, 1957, 37 COMP. GEN. 220

B-132861: Oct 4, 1957

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APPROPRIATIONS - SUBDIVISION OF BUDGET APPORTIONMENTS INTO ALLOTMENTS AND SMALLER SEGMENTS - ANTIDEFICIENCY ACT CONFORMANCE AN ADMINISTRATIVE APPROPRIATION CONTROL REGULATION WHICH PROVIDES FOR THE DISTRIBUTION OF BUDGET APPORTIONMENTS INTO A SMALL NUMBER OF ALLOTMENTS TO HIGH LEVEL OFFICIALS AND THEN PERMITS THEM TO FURTHER SUBDIVIDE THE ALLOTMENTS INTO SMALLER SEGMENTS CALLED ALLOWANCES FOR PURPOSES OF OPERATING NEEDS AS DISTINGUISHED FROM APPORTIONMENT CONTROL BUT REQUIRES RESPONSIBILITY FOR THE ALLOWANCES TO BE CONTINUED IN THE *ALLOTMENT OFFICIALS IS IN CONFORMANCE WITH SUBSECTION (G) OF THE ANTIDEFICIENCY ACT. THE PURPOSE OF THE REGULATION IS TO RESTRICT OBLIGATIONS OR EXPENDITURES AGAINST APPROPRIATIONS TO THE AMOUNTS AVAILABLE THEREFOR AND WITHIN THE LIMIT OF APPORTIONMENTS MADE BY THE BUREAU OF THE BUDGET.

B-132861, OCTOBER 4, 1957, 37 COMP. GEN. 220

APPROPRIATIONS - SUBDIVISION OF BUDGET APPORTIONMENTS INTO ALLOTMENTS AND SMALLER SEGMENTS - ANTIDEFICIENCY ACT CONFORMANCE AN ADMINISTRATIVE APPROPRIATION CONTROL REGULATION WHICH PROVIDES FOR THE DISTRIBUTION OF BUDGET APPORTIONMENTS INTO A SMALL NUMBER OF ALLOTMENTS TO HIGH LEVEL OFFICIALS AND THEN PERMITS THEM TO FURTHER SUBDIVIDE THE ALLOTMENTS INTO SMALLER SEGMENTS CALLED ALLOWANCES FOR PURPOSES OF OPERATING NEEDS AS DISTINGUISHED FROM APPORTIONMENT CONTROL BUT REQUIRES RESPONSIBILITY FOR THE ALLOWANCES TO BE CONTINUED IN THE *ALLOTMENT OFFICIALS IS IN CONFORMANCE WITH SUBSECTION (G) OF THE ANTIDEFICIENCY ACT, 31 U.S.C. 665; AND UNDER SUCH A REGULATION THE CREATION OF AN OBLIGATION IN EXCESS OF THE DOLLAR AMOUNT OF AN ALLOWANCE WOULD NOT BE IN VIOLATION OF THE PENALTY AND REPORTING REQUIREMENTS OF THE ANTIDEFICIENCY ACT.

TO THE ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY, OCTOBER 4, 1957:

YOUR LETTER OF AUGUST 7, 1957, TRANSMITTED A PROPOSED REGULATION BY THE PUBLIC HOUSING ADMINISTRATION ESTABLISHING A SYSTEM OF ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS AVAILABLE TO THE ADMINISTRATION AS REQUIRED BY SUBSECTION (G) OF SECTION 3679, REVISED* STATUTES, AS AMENDED, 31 U.S.C. 665, COMMONLY KNOWN AS THE ANTID*EFICIENCY ACT.

THE PURPOSE OF THE REGULATION IS TO RESTRICT OBLIGATIONS OR EXPENDITURES AGAINST APPROPRIATIONS TO THE AMOUNTS AVAILABLE THEREFOR AND WITHIN THE LIMIT OF APPORTIONMENTS MADE BY THE BUREAU OF THE BUDGET; AND TO FIX RESPONSIBILITY FOR ANY VIOLATTION OF THE SAID ACT TO HIGH LEVEL OFFICIALS WHO WOULD BEAR THE RESPONSIBILITY FOR APPORTIONMENT CONTROL.

THE PROPOSED REGULATION PROVIDES FOR THE ADMINISTRATIVE DISTRIBUTION OF BUDGET APPORTIONMENTS INTO "ALLOTMENTS" AND PERMITS SUBDIVISION THEREOF INTO SEGMENTS CALLED ALLOWANCES (EXPENDITURE TARGETS)," IF AN ALLOTTEE DETERMINES THAT THEY ARE NEEDED FOR PURPOSES OF SUBSIDIARY CONTROL. OVEROBLIGATION IS DEFINED IN THE REGULATION AS AN OBLIGATION INCURRED IN EXCESS OF AN APPORTIONMENT OR ALLOTMENT--- EXCLUSIVE OF ALLOWANCES--- WITH RESPONSIBILITY THEREFOR FIXED UPON THE ALLOTTEE. A VIOLATION OF THE STATUTE AND THE REGULATION TAKES PLACE WHENEVER THE AMOUNT OF ACTUAL OBLIGATIONS EXCEEDS T1HE AMOUNT OF THE APPLICABLE APPORTIONMENT OR ALLOTMENT. THE QUESTION ON WHICH OUR ADVICE IS ASKED IS WHETHER THE CREATION OF AN OBLIGATION IN EXCESS OF AN ALLOWANCE WOULD ALSO CONSTITUTE A VIOLATION WHERE DOLLAR AMOUNTS ARE USED THEREIN.

THE NATURE AND PURPOSE OF ALLOTMENTS AND ALLOWANCE*S ARE SET FORTH IN THE PROPOSED REGULATION, WHICH ARE QUOTED AND EXPLAINED IN YOUR LETTER AS FOLLOWS:

"4D. ALLOTMENT. AN AUTHORIZATION BY THE DIRECTOR OF THE BUDGET BRANCH TO AUTHORIZED EMPLOYEES OF THE PHA TO INCUR OBLIGATIONS WITHIN SPECIFIED AMOUNTS PURSUANT TO AN APPROPRIATION OR OTHER STATUTORY PROVISION.

"4E. ALLOWANCE ( EXPENDITURE TARGET). A SUBDIVISION OR CLASSIFICATION BELOW THE APPORTIONMENT CONTROL (ALLOTMENT) LEVEL, ISSUED BY THE DIRECTOR OF THE BUDGET BRANCH, TO AUTHORIZED EMPLOYEES SHOWING THE EXPENDITURE PATTERN, OR OPERATING BUDGET, THEY WILL BE EXPECTED TO FOLLOW IN THE LIGHT OF THE PROGRAMS AND ACTIVITIES CONTEMPLATED BY THE OVER-ALL PHA BUDGET OR PLAN OF EXPENDITURE. THE TERM ALSO INCLUDES PERSONNEL CEILING AUTHORIZATIONS.

"6. ALLOTMENTS. WHEN APPORTIONMENTS HAVE BEEN MADE, IT SHALL BE THE RESPONSIBILITY OF THE DIRECTOR OF THE BUDGET BRANCH TO MAKE ALLOTMENTS OF APPORTIONED AMOUNTS, IN WRITING, TO PHA OFFICIALS. THE SUM OF SUCH ALLOTMENTS SHALL NOT BE IN EXCESS OF THE AMOUNT INDICATED IN THE APPORTIONMENT DOCUMENT.

"7. ALLOWANCE ( EXPENDITURE TARGET). ALLOW*ANCES, AS DISTINGUISHED FROM ALLOTMENTS, WILL BE ISSUED TO ADMINISTRATIVE OFFICIALS BY THE DIRECTOR OF THE BUDGET BRANCH WHEN THE ALLOTTEE DETERMINES THAT A NEED EXISTS FOR SUBDIVISIONS OR CLASSIFICATIONS BELOW THE ALLOTMENT LEVEL. SUCH ALLOWANCES WILL BE IN TERMS OF PERSONNEL CEILINGS OR OTHER* AUTHORIZATIONS, AND/OR OPERATING BUDGETS, FOR SPECIFIC PURPOSES. WHEN DOLLAR AMOUNTS ARE USED IN AN ALLOWANCE, THE RECIPIENT SHALL UNDERSTAND THAT THEY ARE GUIDELINES IN THE NATURE OF AN OPERATING BUDGET AND MAY BE EXCEEDED BY VERY NOMINAL AMOUNTS WITHOUT OBTAINING A REVISION. IN ALL CASES WHERE A MATERIAL DEVIATION IS CONTEMPLATED, EITHER BY WAY OF AN INCREASE OR DECREASE, THE RECIPIENT MUST PROMPTLY REPORT THE FACTS TO THE DIRECTOR OF THE BUDGET BRANCH, THROUGH THE ALLOTTEE, AND IF AN INCREASE IS INVOLVED NO ACTION SHALL BE TAKEN UNTIL A REVISION OF THE ALLOWANCE HAS BEEN APPROVED. ALLOWANCES STATED IN TERMS OF PERSONNEL CEILINGS MAY NOT BE EXCEEDED EVEN BY NOMINAL AMOUNTS; RECIPIENTS OF SUCH ALLOWANCES MUST CONDUCT THEIR OPERATIONS WITHIN THESE CEILINGS, OR OBTAIN A FORMAL REVISION THEREOF. IF, FOR ANY REASON, A REVISED PERSONNEL CEILING IS INDICATED (EITHER AN INCREASE OR A DECREASE) THE FACTS MUST BE PROMPTLY REPORTED TO THE DIRECTOR OF THE BUDGET BRANCH, THROUGH THE ALLOTTEE.'

PARAGRAPH 8 CONTAINS PROVISIONS THAT ALLOTMENTS WILL BE ISSUED AGAINST ALL APPORTIONMENTS, THAT THEY WILL BE REDUCED TO THE MINIMUM NUMBER CONSISTENT WITH POSITIVE CONTROL OVER INCURRENCE OF OBLIGATIONS, THAT ALLOTTEES MUST RESTRICT OBLIGATIONS TO THE AMOUNTS AVAILABLE, AND THAT THE COMPTROLLER WILL FURNISH TO THE DIRECTOR OF THE BUDGET BRANCH A REPORT OF OBLIGATIONS INCURRED AGAINST ALL ALLOTMENTS. HOLDERS OF ALLOWANCES ARE TO MAINTAIN A SIMPLE MEMORANDUM RECORD OF COMMITMENTS INCURRED AND ARE TO SUBMIT REPORTS THEREON THE BUDGET BRANCH, THROUGH THE ALLOTTEE.

AS INDICATED BY THESE PROVISIONS, THERE ARE SIGNIFICANT *DIFFERENCES BETWEEN ALLOTMENTS AND ALLOWANCES. THE ISSUANCE OF ALLOTMENTS IS REQUIRED BY THE REGULATION, WHEREAS THE ISSUANCE OF ALLOWANCES IS PERMISSIVE--- IN THE DISCRETION OF THE ALLOTTEES; ALLOTMENTS ARE DESIGNATED AS CONSTITUTING THE APPORTIONMENT CONTROL LEVEL, WHILE ALLOWANCES ARE DESIGNATED AS BEING BELOW THE CONTROL LEVEL; ALLOTMENTS ARE MONETARY LIMITS ON AMOUNTS OF OBLIGATIONS WHICH MAY BE CREATED, WHEREAS ALLOWANCES ARE MERELY GUIDELINES OR INDICATIONS OF THE EXPENDITURE PATTERN OR OPERATING BUDGET EXPECTED TO BE FOLLOWED; WHETHER ALLOWANCES ARE ISSUED OR NOT, ALLOTTEES ARE RESPONSIBLE FOR KEEPING OBLIGATIONS WITHIN THE AMOUNTS OF THEIR ALLOTMENTS, WHEREAS HOLDERS OF ALLOWANCES ARE MERELY ACCOUNTABLE TO THE ALLOTTEES WHO ISSUED THEIR ALLOWANCES, AND THROUGH THEM TO THE DIRECTOR OF THE BUDGET BRANCH. IN SUMMARY, THE ALLOWANCE IS MERELY A MANAGEMENT DEVICE WHICH AN ALLOTTEE MAY IN HIS DISCRETION UTILIZE TO AID HIM IN CARRYING OUT HIS RESPONSIBILITY AS AN ALLOTTEE. BUT THE RESPONSIBILITY REMAINS THAT OF THE ALLOTTEE; AND SHOULD THE TERMS OR CONDITIONS OF AN ALLOWANCE BE VIOLATED WITH A CONSEQUENT OVEROBLIGATION OF AN ALLOTMENT THE ALLOTTEE WOULD BE REGARDED AS THE RESPONSIBLE OFFICIAL WITHIN THE MEANING OF THE REGULATION AND THE APPLICABLE STATUTE.

ANSWER TO YOUR QUESTION INVOLVES CONSIDERATION OF THE PROVISIONS OF SUBSECTIONS (G) AND (H) OF SECTION 3679, REVISED STATUTES, AS AMENDED, 31 U.S.C. 665 (G) AND (H), IN THE LIGHT OF THE RECENT AMENDMENT OF SUBSECTION (G) BY SECTION 3 OF PUBLIC LAW, 863, APPROVED AUGUST 1, 1956, 70 STAT. 783, 31 U.S.C. 665. THESE SUBSECTIONS READS AS FOLLOWS:

(G) ANY APPROPRIATION WHICH IS APPORTIONED OR REAPPORTIONED PURSUANT TO THIS SECTION MAY BE DIVIDED AND SUBDIVIDED ADMINISTRATIVELY WITHIN THE LIMITS OF SUCH APPORTIONMENTS OR REAPPORTIONMENTS. THE OFFICER HAVING ADMINISTRATIVE CONTROL OF ANY SUCH APPROPRIATION AVAILABLE TO THE LEGISLATIVE BRANCH, THE JUDICIARY, OR THE DISTRICT OF COLUMBIA, AND THE HEAD OF EACH AGENCY, SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE BUREAU OF THE BUDGET, SHALL PRESCRIBE, BY REGULATION, A SYSTEM OF ADMINISTRATIVE CONTROL (NOT INCONSISTENT WITH ANY ACCOUNTING PROCEDURES PRESCRIBED BY OR PURSUANT TO LAW) WHICH SHALL BE DESIGNED TO (A) RESTRICT OBLIGATIONS OR EXPENDITURES AGAINST EACH APPROPRIATION TO THE AMOUNT OF APPORTIONMENTS OR REAPPORTIONMENTS MADE FOR EACH SUCH APPROPRIATION, AND (B) ENABLE SUCH OFFICER OR AGENCY HEAD TO FIX RESPONSIBILITY FOR THE CREATION OF ANY OBLIGATION OR THE MAKING OF ANY EXPENDITURE IN EXCESS OF AN APPORTIONMENT OR REAPPORTIONMENT. IN ORDER TO HAVE A SIMPLIFIED SYSTEM FOR THE ADMINISTRATIVE SUBDIVISION OF APPROPRIATIONS OR FUNDS, EACH AGENCY SHALL WORK TOWARD THE OBJECTIVE OF FINANCING EACH OPERATING UNIT, AT THE HIGHEST PRACTICAL LEVEL, FROM NOT MORE THAN ONE ADMINISTRATIVE SUBDIVISION FOR EACH APPROPRIATION OR FUND AFFECTING SUCH UNIT.

(H) NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL AUTHORIZE OR CREATE ANY OBLIGATION OR MAKE ANY EXPENDITURES (A) IN EXCESS OF AN APPORTIONMENT OR REAPPORTIONMENT, OR (B) IN EXCESS OF THE AMOUNT PERMITTED BY REGULATIONS PRESCRIBED PURSUANT TO SUBSECTION (G) OF THIS SECTION.

SUBSECTION (G) REQUIRES THE HEAD OF EACH AGENCY, SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE BUREAU OF THE BUDGET, TO ESTABLISH A SYSTEM OF APPROPRIATION AUTHORIZATION CONTROL SO AS TO RESTRICT OBLIGATIONS OR EXPENDITURES WITHIN THE AMOUNT OF BUDGETARY APPORTIONMENTS OR REAPPORTIONMENTS AND TO FIX RESPONSIBILITY FOR INCURRING ANY OBLIGATION OR EXPENDITURE IN EXCESS THEREOF. SUBSECTION (H) PROHIBITS ANY OFFICER OR EMPLOYEE OF THE UNITED STATES FROM AUTHORIZING OR CREATING ANY OBLIGATION IN EXCESS OF AN APPORTIONMENT OR REAPPORTIONMENT, OR IN EXCESS OF AN AMOUNT PERMITTED IN AN ADMINISTRATIVE ALLOTMENT OR SUBALLOTMENT THEREOF.

THESE TWO SUBSECTIONS WHEN CONSIDERED IN CONJUNCTION WITH EACH OTHER, PRIOR TO THE CITED 1956 AMENDMENT, CLEARLY WERE PHRASED AND DESIGNED TO INSURE THAT THE OFFICERS AND EMPLOYEES WHO ACTUALLY DISTRIBUTE APPROPRIATIONS INTO ALLOTMENTS AND SUBALLOTMENTS WILL BE RESPONSIBLE FOR KEEPING THEM WITHIN THE APPORTIONMENTS, AND THAT THE OFFICERS AND EMPLOYEES WHO ACTUALLY CREATE OBLIGATIONS AGAINST APPROPRIATIONS WILL BE RESPONSIBLE FOR OBSERVING THE ALLOTMENTS AND SUBALLOTMENTS PROVIDED TO THEM.

THUS, THE SYSTEM OF ADMINISTRATIVE APPROPRIATION CONTROL REQUIRED TO BE ESTABLISHED BY DEPARTMENTS AND AGENCIES PROVIDED FOR COEXISTENT AND INDEPENDENT RESPONSIBILITIES FOR APPROPRIATION APPORTIONMENT ALLOTMENTS AND SUBDIVISIONS THEREOF REGARDLESS OF THE EXTENT OF THE LATTER. VIOLATION OF EITHER ONE OF THE RESPONSIBILITIES NECESSARILY CONSTITUTES A VIOLATION OF THE STATUTE, SUBJECT TO THE PENALTIES AND REPORTING REQUIREMENTS PROVIDED IN SUBSECTION 3679 (I) (1) AND (2), 31 U.S.C. 665, (I) (1) AND (2). SEE 35 COMP. GEN. 356. IT FOLLOWS THEREFROM THAT IF LEGAL AUTHORITY EXISTS TO CENTRALIZE RESPONSIBILITY FOR APPROPRIATION APPORTIONMENT CONTROL TO HIGH LEVEL OFFICIALS, THAT IS, ALLOTTEES, AND THE FURTHER SUBDIVISION OF FUNDS THROUGH THE USE OF ALLOWANCES, WITHOUT ACCOMPANYING RESPONSIBILITY, IT MUST BE FOUNDED UPON THE REFERRED-TO AMENDMENT OF SUBSECTION (G).

SECTION 3 OF THE ACT APPROVED AUGUST 1, 1956, AMENDED SUBSECTION (G) QUOTED ABOVE BY THE ADDITION OF THE LAST SENTENCE. THE EFFECT OF THE SENTENCE IS TO REQUIRE AGENCIES TO SIMPLIFY PRESENT ALLOTMENT SYSTEMS FOR FINANCIAL CONTROL OF APPROPRIATIONS OR FUNDS WITH THE "OBJECTIVE OF FINANCING EACH OPERATING UNIT, AT THE HIGHEST PRACTICAL LEVEL, FROM NOT MORE THAN ONE ADMINISTRATIVE SUBDIVISION FOR EACH APPROPRIATION OR FUND AFFECTING SUCH UNIT.' THE AMENDMENT WAS ENACTED TO CARRY OUT RECOMMENDATION NO. 13 OF THE COMMISSION ON ORGANIZATION OF THE EXECUTIVE BRANCH OF THE GOVERNMENT, SET FORTH ON PAGE 36 OF ITS REPORT TO THE CONGRESS DATED JUNE 20, 1955, HOUSE DOCUMENT NO. 192, 84TH CONGRESS, ENTITLED " BUDGET AND ACCOUNTING.' AT PAGE 35 OF THE REPORT THERE IS SET FORTH A STATEMENT FROM OUR LETTER DATED JULY 9, 1954, TO THE CHAIRMAN OF THE HOUSE COMMITTEE ON APPROPRIATIONS, AS FOLLOWS:

IT SHOULD BE MENTIONED * * * THAT IT BECOMES INCREASINGLY MORE OBVIOUS THAT THE EXCESSIVE USE OF DETAILED ADMINISTRATIVE ALLOTMENTS AS THE BASIS FOR ADMINISTERING PROGRAMS UNDER APPROPRIATED FUNDS IS A SIGNIFICANT FACTOR IN THE CONFUSED AND UNSATISFACTORY SITUATION WITH RESPECT TO FINANCIAL CONTROL IN THE DEPARTMENT OF DEFENSE. THE EXTENT OF THE PROBLEM WHICH THE DEPARTMENT GENERATES FOR ITSELF IS ILLUSTRATED BY THE FACT THAT ON A RECENT FIELD INSPECTION OF ONE INSTALLATION IT WAS NOTED THAT OVER 10,000 INDIVIDUAL ALLOTMENTS OR ADMINISTRATIVE SUBDIVISIONS THEREOF HAD BEEN ESTABLISHED. EACH INDIVIDUAL ALLOTMENT OR ADMINISTRATIVE SUBDIVISION ACQUIRES LEGAL STATUS INSOFAR AS VIOLATION OF SECTION 3679 OF THE REVISED STATUTES (THE ANTI-DEFICIENCY ACT) IS CONCERNED.

IN REPORTING OUT THE BILL WHICH BECAME THE ACT OF AUGUST 1, 1956, THE SENATE COMMITTEE ON GOVERNMENT OPERATIONS STATED (PAGE 9, SENATE REPORT NO. 2265, 84TH CONG.), REGARDING THE AMENDMENT THAT "THE MAKING OF NUMEROUS ALLOTMENTS WHICH ARE FURTHER DIVIDED AND SUBALLOTTED TO LOWER LEVELS LEADS TO MUCH CONFUSION AND INFLEXIBILITY IN THE FINANCIAL CONTROL OF APPROPRIATIONS OR FUNDS AS WELL AS NUMEROUS MINOR VIOLATIONS OF SECTION 3679, REVISED STATUTES, AS AMENDED (THE ANTI-DEFICIENCY ACT).' IDENTICAL STATEMENT WAS MADE BY THE HOUSE COMMITTEE ON GOVERNMENT OPERATIONS (PAGE 7, HOUSE REPORT NO. 2734, 84TH CONG.) ON THE AMENDMENT IN REPORTING ON A RELATED BILL.

THUS, IN ACCORDANCE WITH THE PROVISIONS OF THE 1956 AMENDMENT, DEPARTMENTS AND AGENCIES ARE DIRECTED TO DISCONTINUE THE TYPE OF APPROPRIATION CONTROL ASSOCIATED WITH SUBDIVISION OF ALLOTMENTS INTO A MULTITUDE OF POCKETS OF OBLIGATIONAL AUTHORITY WHICH CANNOT BE EXCEEDED, AS A MEANS OF GOVERNING THE RATE OF OBLIGATION, AND TO ADOPT OTHER MEANS AS A BASIS OF OPERATING CONTROL.

THE SYSTEM OF APPROPRIATION CONTROL IN THE PROPOSED REGULATION, WHEREBY A SMALL NUMBER OF ALLOTMENTS WOULD BE DISTRIBUTED TO HIGH LEVEL OFFICIALS OF THE ADMINISTRATION WHO WOULD BEAR RESPONSIBILITY THEREFOR, IS IN CONFORMITY WITH THE PROVISIONS OF THE 1956 AMENDMENT TO SECTION 3679, REVISED STATUTES, AS AMENDED. SECTION 13 OF BUREAU OF THE BUDGET CIRCULAR A-34, MAKES PROVISION FOR AGENCIES TO DISTINGUISH CLASSIFICATIONS OR SUBDIVISIONS BELOW APPORTIONMENT CONTROL LEVELS FROM THE ALLOTMENTS AND SUBALLOTMENTS ESTABLISHED FOR THE PURPOSE OF CONTROLLING APPORTIONMENTS PURSUANT TO THE PROVISIONS OF THE SAID STATUTE. THE PROPOSAL TO AUTHORIZE ALLOTTEES TO SUBDIVIDE ALLOTMENTS INTO ALLOWANCES AS A MEANS OF MEETING THEIR OPERATING NEEDS RATHER THAN TO SERVE AS AN APPORTIONMENT CONTROL ALSO CONFORMS TO THE PROVISIONS OF THE STATUTE. ACCORDINGLY, AND IN ANSWER TO YOUR SPECIFIC QUESTION, YOU ARE ADVISED THAT THE CREATION OF AN OBLIGATION IN EXCESS OF AN ALLOWANCE UNDER THE CIRCUMSTANCES OUTLINED HEREIN NEED NOT BE REGARDED HERE AS A VIOLATION OF SECTION 3679, REVISED STATUTES, AS AMENDED.