B-140648, OCTOBER 27, 1959, 39 COMP. GEN. 317

B-140648: Oct 27, 1959

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ARE REQUIRED TO BE DEOBLIGATED AT THE END OF THE FISCAL YEAR TO THE EXTENT THAT THE PERFORMING AGENCY HAS NOT INCURRED VALID OBLIGATIONS UNDER THE AGREEMENT. SECTION 1210 DOES NOT LIMIT THE OBLIGATION AVAILABILITY OF APPROPRIATIONS WHICH ARE MADE BY CONGRESS TO REMAIN AVAILABLE UNTIL EXPENDED. INTERAGENCY AGREEMENTS WHICH ARE MADE BY THE NATIONAL SCIENCE FOUNDATION UNDER THE AUTHORITY IN SECTION 601 OF THE ECONOMY ACT OF 1932. SUCH OBLIGATIONS ARE NOT REQUIRED BY SECTION 1210 OF THE ACT OF SEPTEMBER 6. 1959: REFERENCE IS MADE TO LETTER OF AUGUST 31. IT IS EXPLAINED IN THE LETTER THAT THE MAJOR PORTION OF FUNDS APPROPRIATED TO THE NATIONAL SCIENCE FOUNDATION IS OBLIGATED AND EXPENDED IN THE FORM OF GRANTS TO EDUCATIONAL INSTITUTIONS FOR THE PURPOSE OF CONDUCTING BASIC SCIENTIFIC RESEARCH ACTIVITIES.

B-140648, OCTOBER 27, 1959, 39 COMP. GEN. 317

APPROPRIATIONS - OBLIGATION - NO-YEAR APPROPRIATIONS - INTERAGENCY SERVICES - DEOBLIGATION REQUIREMENT ALTHOUGH UNDER SECTION 1210 OF THE ACT OF SEPTEMBER 6, 1959, 31 U.S.C. 686-1, APPROPRIATIONS TRANSFERRED FROM ONE DEPARTMENT TO ANOTHER FOR THE PERFORMANCE OF SERVICES UNDER INTERAGENCY AGREEMENTS MADE PURSUANT TO SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 31 U.S.C. 686, ARE REQUIRED TO BE DEOBLIGATED AT THE END OF THE FISCAL YEAR TO THE EXTENT THAT THE PERFORMING AGENCY HAS NOT INCURRED VALID OBLIGATIONS UNDER THE AGREEMENT, SECTION 1210 DOES NOT LIMIT THE OBLIGATION AVAILABILITY OF APPROPRIATIONS WHICH ARE MADE BY CONGRESS TO REMAIN AVAILABLE UNTIL EXPENDED, NAMELY, NO-YEAR APPROPRIATIONS. INTERAGENCY AGREEMENTS WHICH ARE MADE BY THE NATIONAL SCIENCE FOUNDATION UNDER THE AUTHORITY IN SECTION 601 OF THE ECONOMY ACT OF 1932, 31 U.S.C. 686, AND CHARGEABLE TO NO-YEAR APPROPRIATIONS MADE TO THE FOUNDATION MAY BE RECORDED AS VALID OBLIGATIONS UNDER SECTION 1311 (A) (1) OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 31 U.S.C. 200 (A) (1), IN VIEW OF THE FACT THAT THE AGREEMENTS COMMIT THE FOUNDATION TO PAY DEFINITE SUMS OF MONEY TO CERTAIN GOVERNMENT AGENCIES FOR PERFORMANCE OF ACTIVITIES AUTHORIZED BY LAW, AND THAT THE NO-YEAR APPROPRIATIONS BECOME AVAILABLE FOR THE FULL AMOUNT ON THE DATE OF THE AGREEMENT, AND SUCH OBLIGATIONS ARE NOT REQUIRED BY SECTION 1210 OF THE ACT OF SEPTEMBER 6, 1951, 31 U.S.C. 686-1, TO BE DEOBLIGATED BY THE FOUNDATION AT THE END OF ANY PARTICULAR FISCAL YEAR, REGARDLESS OF THE OBLIGATION AVAILABILITY STATUS OF THE FUNDS UNDER CONTROL OF THE PERFORMING AGENCY, SECTION 1210 NOT BEING APPLICABLE TO NO-YEAR APPROPRIATIONS.

TO THE DIRECTOR, NATIONAL SCIENCE FOUNDATION, OCTOBER 27, 1959:

REFERENCE IS MADE TO LETTER OF AUGUST 31, 1959, WITH ENCLOSURES, FROM THE ACTING DIRECTOR, NATIONAL SCIENCE FOUNDATION, CONCERNING THE EFFECT OF SECTION 1210 OF THE ACT OF SEPTEMBER 6, 1950, 64 STAT. 765, 31 U.S.C. 686- 1, AND SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 68 STAT. 830, 31 U.S.C. 200, WITH REFERENCE TO FUNDS OF THE FOUNDATION TRANSFERRED TO OTHER FEDERAL AGENCIES FOR PERFORMING BASIC SCIENTIFIC RESEARCH ACTIVITIES.

IT IS EXPLAINED IN THE LETTER THAT THE MAJOR PORTION OF FUNDS APPROPRIATED TO THE NATIONAL SCIENCE FOUNDATION IS OBLIGATED AND EXPENDED IN THE FORM OF GRANTS TO EDUCATIONAL INSTITUTIONS FOR THE PURPOSE OF CONDUCTING BASIC SCIENTIFIC RESEARCH ACTIVITIES. IT IS STATED--- AND CORRECTLY SO--- THAT SUCH GRANTS ARE ADMINISTRATIVELY RECORDED AS OBLIGATIONS AT THE TIME THE FUNDS ARE FORMALLY GRANTED TO THE GRANTEE BY LETTER, AND THAT THERE IS NO DEOBLIGATION OF ANY UNEXPENDED PORTION OF THE GRANTS AS OF JUNE 30. SEE 31 COMP. GEN. 608.

IT IS FURTHER STATED THAT IN SOME INSTANCES GOVERNMENT AGENCIES ARE BETTER EQUIPPED TO PERFORM THE DESIRED RESEARCH, IN WHICH CASE GRANTS ARE MADE AVAILABLE TO THEM UNDER AGREEMENTS WHICH PROVIDE FOR PAYMENT OF SUCH SERVICES ON A REIMBURSABLE OR ADVANCE PAYMENT BASIS. TO ILLUSTRATE SUCH TRANSACTIONS, THERE WAS TRANSMITTED WITH THE LETTER OF AUGUST 31 SEVERAL COPIES OF TYPICAL GRANT LETTERS ON INTRAGOVERNMENT AGREEMENTS. AS OF JUNE 30, 1959, THE FOUNDATION HAD 118 SUCH AGREEMENTS OUTSTANDING AMOUNTING TO $4,099,971.

ALSO, IT IS STATED THAT IN PRIOR YEARS, INCLUDING THE FISCAL YEAR 1959, THE FOUNDATION DEOBLIGATED THE ENTIRE AMOUNT OF UNLIQUIDATED INTRAGOVERNMENT AGREEMENTS REMAINING ON ITS BOOKS AS OF JUNE 30, AND REOBLIGATED THE AMOUNT THEREOF ON JULY 1 OF THE NEXT FISCAL YEAR. SUCH ACTION IS UNDERSTOOD TO HAVE BEEN TAKEN UNDER THAT PART OF THE PROVISIONS OF SECTION 1210 OF THE ACT OF SEPTEMBER 6, 1950, WHICH LIMITS THE AVAILABILITY OF FUNDS TRANSFERRED UNDER SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, AS AMENDED, 31 U.S.C. 686, TO THE SAME PERIOD OF AVAILABILITY AS THAT OF THE APPROPRIATION FROM WHICH THE TRANSFERS ARE MADE.

THE ACTING DIRECTOR POINTS OUT THAT THE FUNDS OF THE NATIONAL SCIENCE FOUNDATION ARE NO-YEAR APPROPRIATIONS AND THAT THEIR AVAILABILITY FOR OBLIGATION DOES NOT EXPIRE ON JUNE 30. THE VIEW IS EXPRESSED THAT SINCE SECTION 1210 DOES NOT LIMIT THE OBLIGATION AVAILABILITY OF NO-YEAR FUNDS THE INTRAGOVERNMENT AGREEMENTS CHARGEABLE THERETO WOULD REMAIN AS VALID OBLIGATIONS. THE PRECISE QUESTION PRESENTED FOR CONSIDERATION IS WHETHER THE INTRAGOVERNMENT AGREEMENTS REPRESENTS VALID OBLIGATIONS UNDER THE TERMS OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, OR WHETHER THE AMOUNTS THEREOF ARE REQUIRED TO BE DEOBLIGATED ON JUNE 30.

SECTION 1210 OF THE ACT OF SEPTEMBER 6, 1950, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

PROVIDED FURTHER, THAT NO FUNDS WITHDRAWN AND CREDITED PURSUANT TO SECTION 601 OF THE ACT OF JUNE 30, 1932, AS AMENDED (47 STAT. 417; 31 U.S.C. 686), SHALL BE AVAILABLE FOR ANY PERIOD BEYOND THAT PROVIDED BY THE ACT APPROPRIATING SUCH FUNDS.

THE EFFECT OF THIS PROVISION IS TO LIMIT THE AVAILABILITY FOR OBLIGATION OF TRANSFERRED FUNDS TO THE SAME PERIOD OF AVAILABILITY AS THAT OF THE APPROPRIATION FROM WHICH THE TRANSFERS ARE MADE. THUS, INTERAGENCY AGREEMENTS ISSUED PURSUANT TO SECTION 601 OF THE ACT OF JUNE 30, 1932, AS AMENDED, AND CHARGEABLE TO ANNUAL APPROPRIATIONS MAY BE RECORDED AS VALID OBLIGATIONS, IF OTHERWISE PROPER, UNDER SECTION 1311 (A) (1) OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 31 U.S.C. 200 (A) (1). BUT SUCH OBLIGATIONS ARE REQUIRED BY SECTION 1210 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. SEE 31 COMP. GEN. 83; 34 ID. 418, CITED IN THE LETTER.

ON THE OTHER HAND, THERE IS NOTHING CONTAINED IN SECTION 1210 OR IN OTHER LAW TO LIMIT THE OBLIGATION AVAILABILITY OF APPROPRIATIONS MADE BY THE CONGRESS "TO REMAIN AVAILABLE UNTIL PENDED," VIZ., NO-YEAR APPROPRIATIONS. SINCE THE APPROPRIATIONS MADE TO THE NATIONAL SCIENCE FOUNDATION ARE AVAILABLE UNTIL EXPENDED, THEY ARE AVAILABLE FOR OBLIGATION BY THE FOUNDATION OR AGENCIES TO WHICH TRANSFERS ARE MADE INDEFINITELY. HENCE, INTERAGENCY AGREEMENTS ENTERED INTO BY THE FOUNDATION UNDER AUTHORITY OF SECTION 601 OF THE ACT OF JUNE 30, 1932, AS AMENDED, AND CHARGEABLE TO SUCH FUNDS MAY BE RECORDED AS VALID OBLIGATIONS, IF THE AGREEMENTS MEET THE REQUIREMENTS OF SECTION 1311 (A) (1), AND SUCH OBLIGATIONS ARE NOT REQUIRED BY SECTION 1210 TO BE DEOBLIGATED BY THE FOUNDATION AT THE END OF ANY PARTICULAR FISCAL YEAR REGARDLESS OF THE OBLIGATION AVAILABILITY STATUS OF THE FUNDS IN THE HANDS OF THE PERFORMING AGENCY.

IN DETERMINING WHETHER THE INTRAGOVERNMENT AGREEMENTS UNDER CONSIDERATION MAY BE RECORDED AS VALID OBLIGATIONS, SECTION 1311 (A) (1) OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, PROVIDES:

AFTER THE DATE OF ENACTMENT HEREOF 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

EXAMINATION OF THE INTRAGOVERNMENT AGREEMENTS RECEIVED WITH THE LETTER OF AUGUST 31 CLEARLY INDICATES THAT THE FOUNDATION COMMITTED ITSELF FOR THE PAYMENT OF DEFINITE SUMS OF MONEY TO CERTAIN GOVERNMENT AGENCIES FOR THE PERFORMANCE OF BASIC SCIENTIFIC RESEARCH ACTIVITIES AUTHORIZED BY LAW. THE NO-YEAR APPROPRIATIONS MADE AVAILABLE FOR SUCH PURPOSES BECAME LEGALLY OBLIGATED FOR THE FULL AMOUNTS STIPULATED IN THE AGREEMENTS ON THE DATE OF EXECUTION THEREOF. ACCORDINGLY, AND IN ANSWER TO THE SPECIFIC QUESTION PRESENTED, WE CONCLUDE THAT THESE AND SIMILAR INTRAGOVERNMENT AGREEMENTS AUTHORIZED BY LAW ARE VALID APPROPRIATION OBLIGATIONS UNDER THE TERMS OF SECTION 1311 (A) (1), QUOTED ABOVE, AND ARE FOR RECORDING AND REPORTING AS SUCH.

IT IS SUGGESTED, AS A MATTER OF CLARIFICATION AND TO AVOID CONFUSION, THAT FUTURE INTERAGENCY AGREEMENTS BE PREPARED TO INDICATE THE SPECIFIC STATUTORY AUTHORITY RELIED UPON AS THE AUTHORITY THEREFOR, AND THAT USE OF THE TERM "GRANT" IN SUCH AGREEMENTS BE DISCONTINUED.