Supplemental Appropriations:

Opportunities Exist to Increase Transparency and Provide Additional Controls

GAO-08-314: Published: Jan 31, 2008. Publicly Released: Mar 3, 2008.

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Supplemental appropriations laws (supplementals) are a tool for policymakers to address needs that arise after the fiscal year has begun. Supplementals provide important and necessary flexibility but some have questioned whether supplementals are used just to meet the needs of unforeseen events or whether they also include funding for activities that could be covered in regular appropriations acts. GAO was asked to evaluate (1) trends in supplemental appropriations enacted from fiscal years 1997-2006 and (2) steps that could be taken to increase transparency and establish additional controls over emergency supplemental appropriations. Also, GAO consulted with budget experts to discuss options for reform.

The use of supplementals has increased over the last several years, largely as a result of an increase in Department of Defense (DOD) funding and the use of supplementals to provide that funding for activities such as the Global War on Terrorism (GWOT). Over the 10-year period from fiscal year 1997 through fiscal year 2006, supplemental appropriations provided about $612 billion ($557 billion net of rescissions) in new gross budget authority, a five-fold increase over the previous 10-year period. Ninety-five percent of the total supplemental funds were appropriated to 11 departments, with DOD receiving nearly 60 percent of the total. Further, an analysis of the type of emergency prompting the need for the supplemental shows that defense-related emergencies received over 50 percent of the emergency-designated funds. In comparison, 28 percent was to respond to natural or economic disasters and 16 percent went to antiterror, security, and post-9/11 activities. International humanitarian assistance, pandemic influenza, and other activities comprised 3 percent of the total emergency-designated supplemental funds provided over the 10-year period. The majority of the supplemental funds appropriated over this 10-year period were designated as emergency. Emergency-designated funds do not have to compete for scarce resources that are constrained by budget controls. Although Congress has specified criteria for the emergency designation in Budget Resolutions, these criteria are not self-executing and there are limited screening and enforcement processes. The increased use of supplementals raises questions about the current incentives and controls surrounding their use. GAO reviewed emergency-designated supplementals and found provisions that were not clearly consistent with emergency designation criteria or did not contain sufficient information for us to make a determination. Also, GAO identified provisions that raise questions about whether supplemental appropriations bills can become vehicles for funding some activities that could be covered in the regular budget and appropriations process. For example, we found $710 million in emergency-designated provisions that appeared to be unrelated to the event/issue(s) that may have prompted the supplemental. In addition, we found that 35 accounts received supplemental appropriations in at least 6 of the 10 years studied, totaling over $375 billion. Twenty-one of these accounts were in DOD and the gross budget authority granted to these 21 accounts ($258 billion) comprised over 40 percent of the total gross budget authority in the supplemental appropriations enacted over the studied period. Finally, over one-third of the supplemental appropriations enacted were available until expended ("no-year" funds). Such no-year funds provide agencies with important flexibility but do not prompt the annual or periodic Congressional oversight typical of funds that are available for a fixed amount of time. If the use of supplemental appropriations is to be limited to addressing unforeseen needs that arise suddenly after the start of a fiscal year, additional controls and increased transparency are needed. Budget experts GAO consulted generally agreed reform was needed but differed on how best to achieve this.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matters for Congressional Consideration

    Matter: Congress may wish to consider establishing procedures and mechanisms to ensure that supplementals are not used where the regular budget and appropriations process should suffice by including a greater share of funding in the regular appropriations bills.

    Status: Closed - Implemented

    Comments: Since FY 2010, each year the President's Budget has included adjustments for disaster costs that represent placeholders for major disasters requiring Federal assistance for relief and reconstruction. In FY 2013, the average annual amount is $8 million. This is a reduction from an annual average of about $9 million in the FY 2012 budget. According to the FY 2010 Budget, previous budgets assumed that there would not be any natural disasters that would necessitate Federal help.

    Matter: Congress may wish to consider establishing procedures and mechanisms to ensure that emergency supplementals do not become the vehicle for items that do not require the rapid enactment demanded to respond to an emergency event. Among the approaches to be considered might be separate tracks for emergency and nonemergency provisions and/or excluding funding for emergencies that occurred in previous years.

    Status: Closed - Not Implemented

    Comments: In 2011, no concurrent budget resolution for 2012 was approved. No other legislation was passed on this topic.

    Matter: Congress may wish to consider establishing procedures and mechanisms to ensure that emergency-designated provisions meet established criteria by establishing new mechanisms for enforcement of those criteria, possibly including codification of the criteria and/or creation of review procedures.

    Status: Closed - Implemented

    Comments: The Budget Control Act, enacted on August 2, 2011, amended Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 to include the emergency criteria definition. Specifically, it defines the term emergency as a situation that requires new budget authority and outlays (or new budget authority and the outlays flowing from the BA) for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and is unanticipated. The term unanticipated is defined to state that the situation is sudden, which means quickly coming into being or not building up over time; urgent, which means a pressing and compelling need requiring immediate action; unforeseen, which means not predicted or anticipated as an emerging need; and temporary, which means not of a permanent duration.

    Matter: If the use of supplemental appropriations is to be limited, additional controls and increased transparency are needed. To better target the resources provided through supplemental appropriations, Congress may wish to consider adopting procedures and rules to increase controls over and transparency of the use of supplementals.

    Status: Closed - Implemented

    Comments: The Budget Control Act, enacted on August 2, 2011, amended Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 to include the emergency criteria definition. Specifically, it defines the term emergency as a situation that requires new budget authority and outlays (or new budget authority and the outlays flowing from the BA) for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and is unanticipated. The term unanticipated is defined to state that the situation is sudden, which means quickly coming into being or not building up over time, urgent, which means a pressing and compelling need requiring immediate action, unforeseen, which means not predicted or anticipated as an emerging need; and temporary, which means not of a permanent duration.

    Matter: Congress may wish to consider establishing procedures and mechanisms to ensure that a balance exists between flexibility and oversight with regard to the time availability of funds by using single or multiyear funds in lieu of no-year funds to the maximum extent possible in supplemental appropriations.

    Status: Closed - Not Implemented

    Comments: In 2011, no concurrent budget resolution for 2012 was approved. No other legislation was passed on this topic.

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