B-170938, OCT 30, 1972

B-170938, OCT 30, 1972

APPROPRIATED FUNDS - USE FOR ENTERTAINMENT - APPROPRIATED EXPENSES - GIFTS TO AGENCY CONCERNING THE ESTABLISHMENT OF AN ACCOUNT FOR CONFERENCES REPRESENTING THE NATIONAL CREDIT UNION ADMINISTRATION FOR THOSE EXPENSES LEGALLY INCURRED WHEN ACTING AS HOST TO MEMBERS OF THE NATIONAL CREDIT UNION BOARD, REPRESENTATIVES OF THE CREDIT UNION INDUSTRY AND OFFICIALS OF VARIOUS STATE GOVERNMENTS. THE LONGSTANDING RULE THAT FUNDS APPROPRIATED FOR GOVERNMENT DEPARTMENTS AND AGENCIES MAY NOT BE USED FOR ENTERTAINING INDIVIDUALS EXCEPT WHEN SPECIFICALLY AUTHORIZED BY STATUTE COVERS FEES COLLECTED FROM THE FEDERAL CREDIT UNION WHICH ARE CONSIDERED "APPROPRIATED FUNDS," SEE 5 COMP. GEN. 455 (1926), THUS MAKING SUCH FEES SUBJECT TO THE VARIOUS RESTRICTIONS AND LIMITATIONS ON THE USES OF APPROPRIATED MONEYS. THEREFORE, THE COMP. GEN. RECOMMENDS THAT CONGRESSIONAL APPROVAL BE SOUGHT PRIOR TO THE EXPENDITURE OF APPROPRIATED FUNDS FOR ENTERTAINMENT PURPOSES. HOWEVER, 12 U.S.C. 1772(A) AUTHORIZES THE ADMINISTRATOR TO ACCEPT AND USE GIFTS OF MONEY FOR THE PURPOSE OF CARRYING OUT THE FEDERAL CREDIT UNION ACT, AND FUNDS COLLECTED UNDER THIS PROVISION MAY BE USED FOR ENTERTAINMENT EXPENSES PROVIDED SUCH USE IS NOT INCONSISTENT WITH THE PURPOSE OF THE GIFT.

TO MR. HERMAN NICKERSON, JR.:

YOUR LETTER OF SEPTEMBER 27, 1972 (YOUR REFERENCE OA/LA:VC), ASKS WHETHER OUR OFFICE WOULD OBJECT TO YOUR ESTABLISHING AN ACCOUNT FOR CONFERENCES REPRESENTING THE NATIONAL CREDIT UNION ADMINISTRATION (ADMINISTRATION) FOR THOSE EXPENSES LEGALLY INCURRED BY YOU WHEN ACTING AS HOST TO MEMBERS OF THE NATIONAL CREDIT UNION BOARD, REPRESENTATIVES OF THE CREDIT UNION INDUSTRY AND OFFICIALS OF VARIOUS STATE GOVERNMENTS.

YOU STATE THAT WITH THE CREATION OF THE ADMINISTRATION AS AN INDEPENDENT AGENCY BY PUBLIC LAW 91-206, PROTOCOL HAS REQUIRED YOU TO HOST MEMBERS OF THE NATIONAL CREDIT UNION BOARD, REPRESENTATIVES OF THE CREDIT UNION INDUSTRY AND OFFICIALS OF VARIOUS STATE GOVERNMENTS. YOU STATE THAT THE PURPOSE OF THE OFFICIAL HOSTING RESPONSIBILITIES IS TO ENHANCE THE IMAGE OF THE ADMINISTRATION AND TO MAINTAIN THE DESIRED LEVEL OF RAPPORT WITH THE CREDIT UNION INDUSTRY. YOU FURTHER STATE THAT THE FREQUENCY AND NATURE OF THESE CONFERENCES "REQUIRE THE EXPENDITURE OF FUNDS THROUGHOUT THE YEAR FOR SERVICES OBTAINED IN ENTERTAINING FOR OFFICIAL PURPOSES THESE DISTINGUISHED GUESTS." YOU ALSO STATE THAT YOU WOULD PURSUE THE NORMAL BUDGETARY PROCESS FOR SETTING ASIDE AND OBLIGATING FUNDS.

IT IS A GENERAL RULE OF LONGSTANDING THAT FUNDS APPROPRIATED FOR GOVERNMENT DEPARTMENTS AND AGENCIES MAY NOT BE USED FOR ENTERTAINING INDIVIDUALS BY GIVING LUNCHEONS, ETC., EXCEPT WHEN SPECIFICALLY AUTHORIZED BY STATUTE AND ALSO AUTHORIZED OR APPROVED BY PROPER ADMINISTRATIVE OFFICERS. SEE, FOR EXAMPLE, 5 COMP. GEN. 455 (1926), 43 ID. 305 (1963) AND B-157312, DATED MAY 23, 1966.

WE HELD IN 35 COMP. GEN. 615 (1956), THAT FEES COLLECTED FROM FEDERAL CREDIT UNIONS REPRESENT MONEYS RECEIVED FOR THE USE OF THE UNITED STATES AND THAT THE STATUTORY AUTHORIZATION THAT THE FEES BE CREDITED TO A SPECIAL FUND AND THE MAKING OF SUCH FUND AVAILABLE FOR EXPENDITURE, AS FAR AS PRACTICABLE, FOR THE ADMINISTRATIVE AND SUPERVISORY COSTS INCIDENT TO CARRYING OUT THE FEDERAL CREDIT UNION ACT, 12 U.S.C. 1751, CONSTITUTES A CONTINUING APPROPRIATION OF SUCH FEES FROM THE TREASURY WITHOUT FURTHER ACTION BY THE CONGRESS. WE FURTHER DECIDED THAT SUCH FUNDS REPRESENT APPROPRIATED FUNDS AND IN THE ABSENCE OF AN EXPRESS STATUTORY PROVISION TO THE CONTRARY, THEY ARE SUBJECT TO THE VARIOUS RESTRICTIONS AND LIMITATIONS ON THE USES OF APPROPRIATED MONEYS.

ACCORDINGLY, SINCE THE FUNDS AVAILABLE TO YOU FOR THE PURPOSE OF FULFILLING THE REQUIREMENTS OF THE FEDERAL CREDIT UNION ACT CONSTITUTE APPROPRIATED FUNDS AND SINCE, IN THE ABSENCE OF A STATUTE EXPRESSLY AUTHORIZING SUCH EXPENDITURES, APPROPRIATED FUNDS ARE NOT AVAILABLE FOR THE ENTERTAINMENT OF PERSONS CONDUCTING BUSINESS WITH THE AGENCY INVOLVED, WE MUST CONCLUDE THAT THE FUNDS COLLECTED PURSUANT TO 12 U.S.C. 1755 AND 1756 OR APPROPRIATED PURSUANT TO 12 U.S.C. 1766(F)(2)(C) - WHICH FUNDS ARE AVAILABLE FOR THE PERFORMANCE OF SUCH ACTS AS THE ADMINISTRATOR MAY DEEM NECESSARY OR APPROPRIATE TO CARRY OUT THE PROVISIONS OF THE NATIONAL CREDIT UNION ACT - ARE NOT AVAILABLE FOR ENTERTAINMENT EXPENSES IN THE ABSENCE OF EXPRESS STATUTORY AUTHORITY. THEREFORE, IT IS OUR VIEW THAT BEFORE YOUR FUNDS ARE USED FOR THIS PURPOSE, THE MATTER SHOULD BE FULLY DISCLOSED TO THE CONGRESS AND THESE FUNDS, OR A SPECIFIC PORTION THEREOF, BE SPECIFICALLY MADE AVAILABLE BY CONGRESS FOR OFFICIAL RECEPTION AND REPRESENTATION EXPENSES.

ON THE OTHER HAND, WE NOTE THAT UNDER THE PROVISIONS OF 12 U.S.C. 1772(A) THE ADMINISTRATOR IS AUTHORIZED TO ACCEPT AND USE GIFTS OF MONEY FOR THE PURPOSES OF CARRYING OUT THE FEDERAL CREDIT UNION ACT. THIS OFFICE HELD IN OUR DECISION OF FEBRUARY 8, 1961, B-142538 - REFERRED TO AND QUOTED IN 46 COMP. GEN. 379 (1966) AT P. 382 - THAT THE AUTHORITY GIVEN TO THE NATIONAL SCIENCE FOUNDATION TO ACCEPT AND USE DONATIONS IS BROAD ENOUGH TO EMPOWER THE FOUNDATION TO SPEND DONATED FUNDS FOR ENTERTAINMENT WHEN IT DETERMINES THAT SUCH EXPENSES ARE NECESSARY TO CARRY OUT EFFECTIVELY ITS AUTHORIZED FUNCTIONS. ACCORDINGLY, IT IS OUR VIEW THAT FUNDS DONATED TO THE ADMINISTRATION PURSUANT TO THE PROVISIONS OF 12 U.S.C. 1772(A) ARE AVAILABLE TO PAY THE ENTERTAINMENT EXPENSES HERE INVOLVED WHERE THE USE OF SUCH FUNDS FOR THAT PURPOSE IS NOT INCONSISTENT WITH THE PROVISIONS OF THE GIFT AGREEMENTS AND WHERE THE ADMINISTRATION DETERMINES SUCH EXPENSES TO BE NECESSARY TO CARRY OUT EFFECTIVELY ITS AUTHORIZED FUNCTIONS.