B-43931, SEPTEMBER 7, 1944, 24 COMP. GEN. 195

B-43931: Sep 7, 1944

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EXTENDING INTO THE NEXT FISCAL YEAR ARE BINDING UPON THE UNITED STATES ONLY TO THE END OF THE FISCAL YEAR IN WHICH ENTERED INTO AND. DO NOT OBLIGATE THE APPLICABLE APPROPRIATION BEYOND THE FISCAL YEAR FOR WHICH THAT APPROPRIATION WAS MADE. 9 COMP. IF IT WERE LEGAL. THE FOLLOWING QUESTION IS THEREFORE PRESENTED FOR YOUR OPINION: WHERE A LEASE OF REAL OR PERSONAL PROPERTY IS FOR A RELATIVELY SHORT PERIOD BUT EXTENDING ACROSS PART OF TWO FISCAL YEARS. SINCE IN NO INSTANCE DOES IT APPEAR THAT FUNDS FROM THE FIRST YEAR WERE SUFFICIENT OR OBLIGATED TO PAY THE RENT FOR THE SECOND YEAR. THE CASES AND DECISIONS APPEAR TO REST UPON THE FACT THAT AT THE TIME THE LEASE WAS ENTERED INTO. NO FUNDS FOR THE FIRST FISCAL YEAR WERE AVAILABLE.

B-43931, SEPTEMBER 7, 1944, 24 COMP. GEN. 195

APPROPRIATIONS - AVAILABILITY BEYOND FISCAL YEAR FOR WHICH MADE - SHORT TERM LEASES IN THE ABSENCE OF STATUTORY AUTHORITY OTHERWISE, LEASES OF REAL OR PERSONAL PROPERTY BY OR ON BEHALF OF THE UNITED STATES, EVEN THOUGH FOR ONLY A PERIOD OF A FEW MONTHS, EXTENDING INTO THE NEXT FISCAL YEAR ARE BINDING UPON THE UNITED STATES ONLY TO THE END OF THE FISCAL YEAR IN WHICH ENTERED INTO AND, THEREFORE, DO NOT OBLIGATE THE APPLICABLE APPROPRIATION BEYOND THE FISCAL YEAR FOR WHICH THAT APPROPRIATION WAS MADE. 9 COMP. GEN. 6 AND 16 ID. 644, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, SEPTEMBER 7, 1944:

THERE HAS BEEN CONSIDERED YOUR LETTER OF AUGUST 17, 1944, AS FOLLOWS:

THE BUREAU OF MINES OF THIS DEPARTMENT FREQUENTLY HAS OCCASION TO LEASE REAL OR PERSONAL PROPERTY FOR A PERIOD LASTING ONLY A FEW MONTHS BUT EXTENDING INTO THE NEXT FISCAL YEAR. IT WOULD BE ADMINISTRATIVELY DESIRABLE, IF IT WERE LEGAL, TO PAY THE RENT FOR THE ENTIRE PERIOD WITH UNEXPENDED ANNUAL APPROPRIATIONS FOR THE FIRST YEAR IN INSTALLMENTS PAYABLE THROUGHOUT THE ENTIRE PERIOD OF THE LEASE. THE FOLLOWING QUESTION IS THEREFORE PRESENTED FOR YOUR OPINION:

WHERE A LEASE OF REAL OR PERSONAL PROPERTY IS FOR A RELATIVELY SHORT PERIOD BUT EXTENDING ACROSS PART OF TWO FISCAL YEARS, MAY THE RENT FOR THE ENTIRE PERIOD BE PAID IN PERIODIC INSTALLMENTS FROM THE UNEXPENDED ANNUAL APPROPRIATIONS FOR THE FIRST FISCAL YEAR?

AN EXAMINATION OF THE CASES AND YOUR RECORDED DECISIONS INVOLVING ATTEMPTS BY GOVERNMENT AGENCIES TO ENTER INTO LEASES RUNNING FOR SEVERAL YEARS REVEALS NO PARALLEL SITUATION, SINCE IN NO INSTANCE DOES IT APPEAR THAT FUNDS FROM THE FIRST YEAR WERE SUFFICIENT OR OBLIGATED TO PAY THE RENT FOR THE SECOND YEAR. THE CASES AND DECISIONS APPEAR TO REST UPON THE FACT THAT AT THE TIME THE LEASE WAS ENTERED INTO, NO FUNDS FOR THE FIRST FISCAL YEAR WERE AVAILABLE, AND NONE FOR THE SECOND FISCAL YEAR WERE YET APPROPRIATED, AND THAT ACCORDINGLY SOME AFFIRMATIVE ACTION BY THE GOVERNMENT TO RENEW THE LEASE WAS NECESSARY AFTER THE APPROPRIATION WAS PASSED. IN THE CASE PRESENTED TO YOU, ON THE OTHER HAND, UNOBLIGATED FUNDS FROM THE FIRST FISCAL YEAR ARE ALREADY AVAILABLE, IF THEY MAY LEGALLY BE USED, FOR THE ENTIRE PERIOD OF THE LEASE.

THE STATUTES CITED IN THE CASES AND RECORDED DECISIONS DO NOT APPEAR TO PROHIBIT THE USE OF ANNUAL APPROPRIATIONS IN THE MANNER DESIRED. FOR EXAMPLE, REV. STAT. SEC. 3732, AS AMENDED BY THE ACT OF JUNE 12, 1906 (34 STAT. 255, 41 U.S.C. SEC. 11), FORBIDDING ANY CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES NOT AUTHORIZED BY LAW OR UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT, WOULD SEEM TO BE SATISFIED BY THE FACT THAT APPROPRIATIONS FOR THE FIRST FISCAL YEAR ARE SUFFICIENT TO PAY THE RENTAL FOR THE ENTIRE LEASE.

NOR WOULD SUCH A LEASE APPEAR TO VIOLATE THE PROVISIONS OF REV. STAT. SEC. 3679, AS AMENDED BY THE ACT OF MARCH 3, 1905 (33 STAT. 1257) AND THE ACT OF FEBRUARY 27, 1906 (34 STAT. 48, 31 U.S.C. SEC. 665), PROHIBITING THE EXPENDITURE OF MONEY IN EXCESS OF APPROPRIATIONS FOR THE FISCAL YEAR AND THE INVOLVEMENT OF THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION FOR THE FUTURE PAYMENT OF MONEY IN EXCESS OF APPROPRIATIONS FOR THE FISCAL YEAR, SINCE THE EXPENDITURES WOULD BE WELL WITHIN THE LIMIT OF APPROPRIATIONS FOR THE FIRST FISCAL YEAR.

ALTHOUGH THE APPROPRIATIONS WOULD BE MADE SPECIFICALLY FOR THE SERVICE OF THE FIRST FISCAL YEAR, THEY WOULD BE APPLIED TO THE FULFILLMENT OF A CONTRACT PROPERLY MADE WITHIN THAT YEAR, AND SO WOULD NOT APPEAR TO CONTRAVENE THE PROVISIONS OF REV.STAT. SEC. 3690 (31 U.S.C. SEC. 712).

TWO DECISIONS OF THE COMPTROLLER GENERAL APPEAR TO LEND INFERENTIAL SUPPORT TO THE VALIDITY OF THE PROPOSED LEASES. A LEASE FOR A YEAR AFTER THE DATE OF OCCUPANCY ON FEBRUARY 1, 1937, SUBJECT TO THE AVAILABILITY OF APPROPRIATIONS AFTER JUNE 30, 1937, WAS APPROVED IN 16 COMP. GEN. 644. 9 COMP. GEN. 6, THE USE OF ANNUAL APPROPRIATIONS TO PURCHASE CONCRETE NECESSARY FOR THE CONSTRUCTION OF A DAM, TO BE DELIVERED OVER A PERIOD OF 3.5 CALENDAR YEARS, WAS APPROVED.

SECTION 3732, REVISED STATUTES, 41 U.S.C. 11, PROVIDES, IN MATERIAL PART, THAT:

NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT * * *.

SECTION 3679, REVISED STATUTES, AS AMENDED, 21 U.S.C. 665, PROVIDES, SO FAR AS HERE MATERIAL, AS FOLLOWS:

NO EXECUTIVE DEPARTMENT OR OTHER GOVERNMENT ESTABLISHMENT OF THE UNITED STATES SHALL EXPEND, IN ANY ONE FISCAL YEAR, ANY SUM IN EXCESS OF APPROPRIATIONS MADE BY CONGRESS FOR THAT FISCAL YEAR, OR INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION FOR THE FUTURE PAYMENT OF MONEY IN EXCESS OF SUCH APPROPRIATIONS UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW. * * *

SECTION 3690, REVISED STATUTES, 31 U.S.C. 712, PROVIDES, AS FOLLOWS:

ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR, AND REMAINING UNEXPENDED AT THE EXPIRATION OF SUCH FISCAL YEAR, SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR; AND BALANCES NOT NEEDED FOR SUCH PURPOSES SHALL BE CARRIED TO THE SURPLUS FUND. THIS SECTION, HOWEVER, SHALL NOT APPLY TO APPROPRIATIONS KNOWN AS PERMANENT OR INDEFINITE APPROPRIATIONS.

THE FACT THAT A CONTRACT COVERS A PART OF TWO FISCAL YEARS DOES NOT NECESSARILY MEAN THAT PAYMENTS THEREUNDER ARE FOR SPLITTING BETWEEN THE TWO FISCAL YEARS INVOLVED UPON THE BASIS OF SERVICES ACTUALLY PERFORMED DURING EACH FISCAL YEAR. IN FACT, THE GENERAL RULE IS THAT THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME THE CONTRACT IS MADE IS CHARGEABLE WITH PAYMENTS UNDER THE CONTRACT, ALTHOUGH PERFORMANCE THEREUNDER MAY EXTEND INTO THE ENSUING FISCAL YEAR. 23 COMP. GEN. 370, AND DECISIONS THEREIN CITED. HOWEVER, THAT RULE CAN APPLY ONLY WHERE AN APPROPRIATION CURRENT AT THE TIME MAY BE CONSIDERED AS OBLIGATED FOR THE PERFORMANCE OF THE ENTIRE CONTRACT. THEREFORE, UNDER THE ABOVE QUOTED STATUTORY PROVISIONS, IT IS CLEAR THAT UNLESS THE LEASES TO WHICH YOU REFER CAN BE REGARDED AS IMPOSING UPON THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME OF MAKING OF THE LEASE A LEGAL OBLIGATION FOR THE PAYMENT OF THE RENT ACCRUING IN THE SECOND FISCAL YEAR THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME OF MAKING THE LEASE CANNOT BE CONSIDERED AS AVAILABLE FOR PAYMENT OF RENTAL FOR ANY PART OF THE SECOND FISCAL YEAR.

IT REPEATEDLY HAS BEEN HELD BY BOTH THIS OFFICE AND THE COURTS THAT A LEASE EXECUTED BY OR ON BEHALF OF THE UNITED STATES FOR A TERM OF YEARS, IN THE ABSENCE OF SPECIFIC AUTHORITY THEREFOR, IS BINDING UPON THE UNITED STATES ONLY TO THE END OF THE FISCAL YEAR FOR WHICH THE APPROPRIATION INVOLVED WAS AVAILABLE AT THE BEGINNING OF THE TERM WITH THE OPTION IN THE GOVERNMENT OF RENEWAL FROM YEAR TO YEAR UNTIL THE END OF THE TERM. SEE LEITER V. UNITED STATES, 271 U.S. 204; GOODYEAR TIRE AND RUBBER COMPANY V. UNITED STATES, 276 U.S. 287; 19 COMP. GEN. 758, AND AUTHORITIES THERE CITED. UNDER THAT PRINCIPLE, LEASES SUCH AS REFERRED TO BY YOU, MAY, IN THE ABSENCE OF SPECIFIC AUTHORITY OTHERWISE, BE REGARDED AS BINDING UPON THE UNITED STATES ONLY TO THE END OF THE FIRST FISCAL YEAR AND, THEREFORE, MAY NOT BE REGARDED AS OBLIGATING THE APPROPRIATION UNDER WHICH THEY ARE MADE BEYOND THE FISCAL YEAR FOR WHICH THE APPROPRIATION IS MADE. DIFFERENCE IS PERCEIVED IN THAT RESPECT BETWEEN THE RENTAL OF REAL ESTATE AND THE RENTAL OF PERSONAL PROPERTY.

THE TWO DECISIONS OF THIS OFFICE TO WHICH YOU REFER ARE NOT IN POINT HERE AND DO NOT IN ANY WISE SUPPORT OR TEND TO SUPPORT A CONTRARY VIEW. WHILE IN 16 COMP. GEN. 644, IT APPEARS THAT THE ADMINISTRATIVE OFFICE WAS CONTEMPLATING A LEASE FOR ONE YEAR, WHICH COMPRISED PART OF THE TWO FISCAL YEARS 1937 AND 1938, IT APPEARS THAT FOR THE PERIOD SUBSEQUENT TO JUNE 30, 1937, THE PROPOSED LEASE WAS TO BE SUBJECT TO FUNDS BEING MADE AVAILABLE. THUS, THERE WAS NOT INVOLVED THE QUESTION WHETHER THE APPROPRIATION AVAILABLE FOR THE FIRST FISCAL YEAR WAS AVAILABLE FOR THE PAYMENT OF RENT FOR ANY PART OF THE SECOND FISCAL YEAR. THE DECISION IN 9 COMP. GEN. 6 LIKEWISE DID NOT INVOLVE A QUESTION RELATING TO THE PAYMENT OF RENT FROM AN APPROPRIATION FOR A GIVEN FISCAL YEAR FOR A PERIOD EXTENDING BEYOND THAT FISCAL YEAR.

ACCORDINGLY, THE QUESTION PRESENTED MUST BE, AND IS, ANSWERED IN THE NEGATIVE.