B-255338.4 January 27, 1994

B-255338.4 January 27, 1994

GAO report concludes that 37 rescissions proposed by the President in his second special impoundment message for fiscal year 1994 are in accordance with the Impoundment Control Act. GAO report, however, provides specific comments on 26 of the rescissions.

COMMENTS ON THE SECOND SPECIAL MESSAGE

DEPARTMENT OF AGRICULTURE

R94-4 Agricultural Research Service Amount Proposed for Rescission: $16,233,000 1241400

According to the latest apportionment schedule for the account, dated November 4, 1993, total budgetary resources are $710,901,000 and not $694,969,000 as reported in the message.

R94-5 Agricultural Research Service Buildings and Facilities Amount Proposed for Rescission: $8,460,000 12X1401

According to the latest apportionment schedule for this account, dated November 4, 1993, total budgetary resources are $107,413,561 and not $32,743,000 as reported in the message.

R94-6 Cooperative State Research Service Amount Proposed for Rescission: $30,002,000 1241500 12X1500

According to the latest apportionment for this account, dated November 4, 1993, total budgetary resources are $472,586,000 and not $453,736,000 as reported in the message.

R94-7 Cooperative State Research Service Buildings and Facilities Amount Proposed for Rescission: $34,000,000 12x1501

According to the latest apportionment schedules for these accounts, dated November 4, 1993, total budgetary resources are $65,425,481 and not $56,874,000 as reported in the message.

R94-9 Soil Conservation Service Conservation Operations Amount Proposed for Rescission: $12,167,000 12x1000

According to the latest apportionment statement for this account, dated November 4, 1993, total budgetary resources are $659,644,854 and not 651,049,000 as reported in the message.

R94-10 Farmers Home Administration Salaries & Expenses Amount Proposed for Rescission: $12,167,000 1242001

According to the latest apportionment statement for this account, dated November 4, 1993, total budgetary resources are $731,869,000 and not $36,152,000 as reported in the message. This is due to additional reimbursements and income anticipated for the rest of fiscal year 1994.

DEPARTMENT OF THE ARMY - Civil

4-23 Army Corps of Engineers General Investigations Amount Proposed for Rescission: $24,970,000 96X3121

According to the latest apportionment schedule for this account, dated November 17, 1993, total budgetary resource are $266,937,786 and not $257,540,000 as reported in the message.

R94-24 Army Corps of Engineers Construction Amount Proposed for Rescission: $97,319,000 96X3 122

According to the latest apportionment schedule for this account, dated November 17, 1993, total budgetary resources are $2,777,994,042 and not $2,675,875,000 as reported in the message.

DEPARTMENT OF COMMERCE

R94-13 National Oceanic and Atmospheric Administration Research and Facilities Amount Proposed for Rescission: $6,000,000 13X1450

According to the latest apportionment statement for this account, dated November 30, 1993, total budgetary resources are $2,280,472,408 and not $2,283,782,408 as reported in the message.

DEPARTMENT OF DEFENSE

R94-16 Military Construction Army Amount Proposed for Rescission: $116,134,000 214/82050

According to the latest apportionment statement for this account, dated November 10, 1993, total budgetary resources are $906,676,000 and not $1,378,806,000 as reported in the message. The reason for this discrepancy is that the message reported as other budgetary resources the amount of estimated prior year unobligated balances available to complete prior year budget plans. These prior year unobligated amounts are unrelated to the account against which the proposed rescission will be charged. (i.e., the fiscal year 1994/1998 account for military construction, Army). Furthermore, according to OMB and agency officials, the amount of other budgetary resources should have been $483,030,000 and not $472,130,000. This amount should be further reduced to $469,130,000 because the Military Construction Appropriations Act for Fiscal Year 1994 rescinded $13,900,000 in budget authority from prior year Military Construction, Army, appropriation. Pub. L. No. 103-110, 107 Stat. 1037 (1993).

R94-17 Military Construction Air Force Amount Proposed for Rescission: $85,094,000 574/83300

For the same reasons cited in our comments on rescission R94-16 above (prior year unobligated balances were counted as budgetary resources of the FY 1994-1998 account) total budgetary resources were overstated in this account. The latest apportionment statement for the account, dated November 16, 1993, shows total budgetary resources of $1,022,890,000 and not $1,863,521,000 as reported in the message.

R94-18 Military Construction Army Reserve Amount Proposed for Rescission: $19,807,000 214/82086

For the same reasons cited in our comments on rescission R94-16 above (prior year unobligated balances were counted as budgetary resources of the FY 1994-1998 account) total budgetary resources were overstated in this account. The latest apportionment statement for the account, dated November 20, 1993, shows total budgetary resources of $102,040,000 and not $212,442,000 as reported in the message.

R94-20 Military Construction Air Force Reserve Amount Proposed for Rescission: $18,759,000 574/83730

For the same reasons cited in our comments on rescission R94-16 above (prior year unobligated balances were counted as budgetary resources of the FY 1994-1998 account) total budgetary resources were overstated in this account. The latest apportionment statement for the account, dated November 20, 1993, shows total budgetary resources of $74,486,000 and not $112,510,000 as reported in the message.

R94-21 Military Construction Army National Grand Amount Proposed for Rescission: $251,854,000 214/82085

For the same reasons cited in our comments on rescission R94-16 above (prior year unobligated balances were counted as budgetary resources of the FY 1994-1998 account) total budgetary resources were overstated in this account. The latest apportionment statement for the account, dated November 20, 1993, shows total budgetary resources of $302,719,000 and not $456,325,000 as reported in the message.

R94-22 Military Construction Air National Guard Amount Proposed for Rescissions: $105,138,000 574/83830

For the same reasons cited in our comments on rescission R94-16 above (prior year unobligated balances were counted as budgetary resources of the FY 1994-1998 account) total budgetary resources were overstated in this account. The latest apportionment statement for the account, dated November 20, 1993, shows total budgetary resources of $247,491,000 and not $393,937,000 as reported in the message.

DEPARTMENT OF ENERGY

R94-25 Energy Programs Energy Supply, Research and Development Activities, and Uranium Supply and Enrichment Activities Amount Proposed for Rescission: $139,300,000 89X0224 89X0226

According to the latest apportionment schedule for these accounts, dated November 15, 1993, total budgetary resources are $5,435,861,037 and not $3,879,572,000 as reported in the message.

FUNDS APPROPRIATED TO THE PRESIDENT

R94-1 International Security Assistance Foreign Military Financing Grants Amount Proposed for Rescission: $40,000,000 1141082

We note that the rescission proposal is internally inconsistent. Although the justification for this rescission report indicates that the funds available for rescission will be derived from prior year appropriations, the account identified as the source of the rescission in the message is made up of current funds which lapse at the end of fiscal year 1994. In addition, the President has reported a deferral in this account of $3,137,279,000. Third Special Impoundment Message, November 19, 1993, Deferral D94-9.

R94-2 International Security Assistance Economic Support Fund Amount Proposed for Rescission: $90,000,000 11X1037 113/41037 114/51037

According to OMB's Cumulative Report, submitted to the Congress December 9, 1993, these funds are not being withheld from obligation. We note, however that this rescission proposal also states that the funds available for rescission will be derived from unexpended balances of prior year appropriations. Unlike R94-1, with this proposal it is conceivable that the amount of the rescission ($90,000,000) could well be derived from other budgetary resources brought forward ($403,985,043) from prior multiple-year appropriations. However, the apportionment statements for these accounts, which are made up of annual, multiple-year and no year funds, do not identify which accounts will be supporting the rescission. Neither OMB nor agency officials could identify which prior year carryovers in the accounts would bear the burden of the rescission. Also, the President has reported a deferral in this account of $1,558,737,203 in his Third Special Message, Deferral D94-1A, November 19, 1993.

D94-3 Agency for International Development Development Assistance Fund Amount Proposed for Rescission: $160,000,000 11X1021 114/51021

According to OMB's Cumulative Report, submitted to the Congress December 9, 1993, these funds are not being withheld from obligation. We note that just as with rescissions R94-l and R94-2, this rescission proposal also states that the funds available for rescission will be derived from unexpended balances of prior year appropriations. This proposal is inconsistent, however, because apportionment statements for these accounts show that the estimated unobligated balances and anticipated recoveries of prior year obligations equal only $120,000,000. Since the rescission proposal is for $160,000,000, the remaining $40,000,000 must be derived from current multi-year funds or additional anticipated recoveries but this is not reflected in the report.

GENERAL SERVICES ADMINISTRATION

R94-33 Public Building Service Federal Buildings Fund Amount Proposed for Rescission: $126,022,000 47X4542

Section 1012 of the Impoundment Control Act requires the President to report proposed rescissions to the Congress in a special message that provides detailed information concerning the basis and effect of the rescission, including: "any account, department, or establishment of the Government to which such budget authority is available for obligation, and the specific Project or governmental functions involved. . ." The justification in the President's report does not provide sufficient information to identify the programs or projects or governmental functions affected by this rescission proposal. The justification for this rescission states that the Administrator of the General Services Administration will "reduce new obligational authority by program, project, and activity to be consistent with the President's policies . . .." Further, the legislative language attached to the proposed rescission states that of the "funds made available from earmarked funds . . . $126,022,000 are rescinded". All governmental functions covered by the Public Building Fund appropriation limitation can be considered "earmarked funds". (Among the items earmarked in the appropriation are construction of additional projects, repairs and alterations installment acquisition payments, rental of space, real property operations, program direction and centralized services, design and construction services. Pub. L. No. 103123, 107 Stat. 1239 (1993).) Furthermore, our Office reported the actions associated with this account as an authorized unreported deferral of budget authority in a letter to the Congress. GAO/OGC-94-17, B-255338.2, Nov. 5, 1993. The President subsequently reported a deferral of $2,835,860,000 in this account in his Third Special Impoundment message for fiscal year 1994, dated November 19, 1993.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

R94-26 Housing Programs, Annual Contributions for Assisted Housing Amount Proposed for Rescission: $180,000,000 86X0164

According to the latest apportionment statement for this account, dated November 29, 1993, total budgetary resources are $10,097,117,428 and not $11,312,900,000 as reported in the message. The apportionment statement shows that other budgetary resources, are lower than anticipated by the message. We note that GAO recently issued a report related to the lead based paint hazard reduction program for which a rescission of $50 million is proposed in this account. GAO/RCED-93-138, Sept. 1993.

INDEPENDENT AGENCIES

R94-35 State Justice Institute Salaries and Expenses Amount Proposed for Rescission: $6,775,000 4840052

The Institute is an independent agency which does not submit apportionment statements through OMB. However, the Institute's Executive Director and Chief of Finance confirmed, in writing, the accuracy of the President's message. According to OMB's cumulative report, submitted to the Congress on December 9, 1993, these funds are not being withheld from obligation.

R94-36 United States Information Agency Salaries and Expenses Amount Proposed for Rescission: $3,000,000. 6740201

The latest apportionment statement for this account, dated November 15, 1993, shows total budgetary resources of $757,793,400 and not $735,890,400 as reported in the message.

SMALL BUSINESS ADMINISTRATION

R94-34 Salaries and Expenses Amount Proposed for Rescission: $13,100,000 7340100

According to the latest apportionment schedule for this account dated November 29, 1993, total budgetary resources are $474,073,175 and not $258,900,000 as reported in the message.

DEPARTMENT OF STATE

R94-28 Administration of Foreign Affairs Salaries and Expenses and Diplomatic and Consular Programs Amount Proposed for Rescission: $600,000 1940113

According to the latest appointment statement for this account, dated December 1, 1993, total budgetary resources are $2,169,032,000 and not $2,128,089,000 as reported in the message.

DEPARTMENT OF TRANSPORTATION

R94-32 Federal Highway Administration Highway Demonstration Projects Amount Proposed for Rescission: $187,827,288 69X9972 69X9911

According to the latest apportionment statements for these account, dated November 4, 1993, total budgetary resources are $1,081,656,704 and not $1,072,740,100 as reported in the message.