B-218800, AUG 2, 1985, 64 COMP.GEN. 728

B-218800: Aug 2, 1985

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GAO CONCLUDES THAT WHILE THE FURLOUGH APPEARS TO HAVE HAD A DELETERIOUS EFFECT ON THE WORK OF THE ICC. IT WAS LEGAL AND FULLY WITHIN THE ADMINISTRATIVE DISCRETION OF THE COMMISSION. WHILE MORE TIMELY ACTION COULD POSSIBLY HAVE LESSENED THE SEVERITY OF THE FURLOUGH. WE ARE CONCERNED THAT ONLY A SMALL NUMBER OF MEETINGS HAVE BEEN HELD TO CONSIDER CASES THAT THE ICC IDENTIFIES AS "SIGNIFICANT.". LEAVES OF ABSENCE - INVOLUNTARY LEAVE - CURTAILMENT OF AGENCY OPERATIONS AGENCIES HAVE BROAD AUTHORITY TO FURLOUGH ANY OR ALL OF THEIR EMPLOYEES IF THERE ARE LEGITIMATE MANAGEMENT REASONS FOR DOING SO. 5 U.S.C. 7513 (1952) STATES THAT FURLOUGHS CAN BE REQUIRED "ONLY FOR SUCH CAUSE AS WILL PROMOTE THE EFFICIENCY OF THE AGENCY.".

B-218800, AUG 2, 1985, 64 COMP.GEN. 728

LEAVES OF ABSENCE - INVOLUNTARY LEAVE - CURTAILMENT OF AGENCY OPERATIONS IN RESPONSE TO CONGRESSIONAL REQUEST ON LEGALITY AND PROPRIETY OF ICC DECISION TO FURLOUGH ITS EMPLOYEES FOR 1 DAY PER WEEK FROM APRIL 15 THROUGH JUNE 15 TO MEET UNEXPECTED CUT BY CONTINUING RESOLUTION OF $6.55 MILLION FROM AMOUNT REPORTED BY HOUSE APPROPRIATIONS COMMITTEE IN 1985 YEAR APPROPRIATION, GAO CONCLUDES THAT WHILE THE FURLOUGH APPEARS TO HAVE HAD A DELETERIOUS EFFECT ON THE WORK OF THE ICC, IT WAS LEGAL AND FULLY WITHIN THE ADMINISTRATIVE DISCRETION OF THE COMMISSION. WHILE MORE TIMELY ACTION COULD POSSIBLY HAVE LESSENED THE SEVERITY OF THE FURLOUGH, THE USE OF THAT METHOD TO MEET BUDGETARY RESTRICTIONS APPEARS PREFERABLE TO OTHER ALTERNATIVES AVAILABLE. SUNSHINE ACT - APPLICABILITY - PUBLIC NOTICE PROVISIONS WE ALSO FEEL THAT WHILE THE NEW COMMISSION RULES COMPLY WITH GOVERNMENT IN THE SUNSHINE ACT AND REPRESENT CONSIDERABLE IMPROVEMENT OVER PRIOR PRACTICE, MORE COULD PROBABLY BEEN DONE TO COMPLY FULLY WITH THE ACT. WHILE THE GOVERNMENT IN THE SUNSHINE ACT DOES NOT BAR USE OF NOTATION VOTING AND MEETINGS SHOULD NOT BE REQUIRED FOR ROUTINE OR TRIVIAL AGENCY ACTIONS, WE ARE CONCERNED THAT ONLY A SMALL NUMBER OF MEETINGS HAVE BEEN HELD TO CONSIDER CASES THAT THE ICC IDENTIFIES AS "SIGNIFICANT." LEAVES OF ABSENCE - INVOLUNTARY LEAVE - CURTAILMENT OF AGENCY OPERATIONS AGENCIES HAVE BROAD AUTHORITY TO FURLOUGH ANY OR ALL OF THEIR EMPLOYEES IF THERE ARE LEGITIMATE MANAGEMENT REASONS FOR DOING SO. THE STATUTE CONTROLLING SUCH ACTIONS, 5 U.S.C. 7513 (1952) STATES THAT FURLOUGHS CAN BE REQUIRED "ONLY FOR SUCH CAUSE AS WILL PROMOTE THE EFFICIENCY OF THE AGENCY." THE ICC FURLOUGH APPEARS TO HAVE MET THE LEGAL REQUIREMENTS IN EVERY REGARD. A SITUATION IN WHICH A DEFICIENCY IN AN APPROPRIATION IS EXPECTED IS RECOGNIZED BY THE STATUTORY DEFINITION OF A FURLOUGH TO BE OF SUFFICIENT CAUSE. APPROPRIATIONS - DEFICIENCIES - ANTI-DEFICIENCY ACT - VIOLATIONS - POSSIBILITY - UNDERESTIMATING OBLIGATIONS ALTHOUGH NOT EXPRESSLY STATED IN THE STATUTORY LANGUAGE, WE HAVE HELD THAT THE ANTIDEFICIENCY ACT REQUIRES HEADS OF FEDERAL AGENCIES TO EXPEND FISCAL YEAR APPROPRIATIONS SO AS TO PREVENT THE NECESSITY FOR A SUPPLEMENTAL OR DEFICIENCY APPROPRIATION AND TO AVOID EXHAUSTING THE FUNDS BEFORE THE END OF THE PERIOD FOR WHICH THEY ARE APPROPRIATED. ICC MET THIS REQUIREMENT BY ADOPTING AN OPERATING PLAN FOR FISCAL YEAR 1985 THAT WHILE INCLUDING A REQUEST FOR A SUPPLEMENTAL APPROPRIATION ALSO INCLUDED AN EMERGENCY PLAN WHICH WOULD ENABLE THE ICC TO OPERATE FOR THE ENTIRE FISCAL YEAR EVEN WITHOUT A SUPPLEMENTAL. APPROPRIATIONS - DEFICIENCIES - ANTI-DEFICIENCY ACT - VIOLATIONS - POSSIBILITY - UNDERESTIMATING OBLIGATIONS THE APPORTIONMENT PROVISIONS OF THE ANTIDEFICIENCY ACT ARE VIOLATED IF ONLY A DRASTIC CURTAILMENT OF ACTIVITY WILL ALLOW AN AGENCY TO GET THROUGH THE YEAR WITHOUT EXHAUSTING ITS APPROPRIATIONS. THEREFORE, SHOULD THERE BE NO SUPPLEMENTAL, THE ICC WILL BE FORCED TO TAKE MORE DRASTIC ACTION THAN ITS ORIGINAL FURLOUGH PLAN TO AVOID VIOLATING THE ANTIDEFICIENCY ACT. IF THE COMMISSION DOES NOT ACT SOON, IT MAY BE UNABLE TO AVOID VIOLATING THE ACT. CF. 36 COMP.GEN. 699 (1957). APPROPRIATIONS - DEFICIENCIES - ANTI-DEFICIENCY ACT - VIOLATIONS - NOT ESTABLISHED ICC ACTIONS DID NOT VIOLATE THE ANTIDEFICIENCY ACT, 31 U.S.C. 1341 (1982) BECAUSE IT NEVER EXPENDED FUNDS OR INCURRED OBLIGATIONS IN EXCESS OR ADVANCE OF AVAILABLE APPROPRIATIONS AS APPORTIONED BY OMB. ACTIONS TAKEN BY THE ICC DEMONSTRATE THAT FROM THE POINT AT WHICH THE CONGRESS AND THE PRESIDENT APPROVED LEGISLATION THAT WOULD CAUSE THEIR SPENDING LEVEL TO EXCEED BUDGETARY LIMITS, EVERY DECISION RELATED TO EXPENDITURES, FURLOUGHS AND RIFS WERE MADE TO AVOID VIOLATION OF THE OBJECTIVES OF BOTH MAINTAINING ESSENTIAL SERVICES AND STAYING WITHIN BUDGETARY LIMITS.

TO: HONORABLE JOHN D. DINGELL, HOUSE OF REPRESENTATIVES, AUGUST 2, 1985:

IN YOUR LETTER OF APRIL 22, 1985, YOU ASKED US TO EXAMINE THE LEGALITY AND PROPRIETY OF THE DECISION BY THE INTERSTATE COMMERCE COMMISSION (ICC) TO FURLOUGH ITS EMPLOYEES FOR 1 DAY PER WEEK TO DEAL WITH A LOWER THAN EXPECTED APPROPRIATION. SPECIFICALLY YOU ASKED US: (1) TO ASCERTAIN WHEN THE ICC KNEW THAT ITS APPROPRIATION WOULD BE INSUFFICIENT TO SUPPORT EXISTING STAFF LEVELS; (2) TO DETERMINE WHETHER THE ICC ACTED PROPERLY AND LAWFULLY IN SPENDING AT KNOWN HIGH LEVELS IN ANTICIPATION THAT CONGRESS WOULD APPROPRIATE ADDITIONAL FUNDS; (3) TO IDENTIFY ALTERNATIVES AVAILABLE TO THE ICC OTHER THAN FURLOUGHS; AND (4) TO DISCUSS THE FAIRNESS AND IMPACT OF THE AGENCY'S FURLOUGH. ON AN UNRELATED MATTER, YOU ALSO ASKED THAT WE DETERMINE THE LEGALITY OF ICC'S AMENDED RULES ON OPEN MEETINGS.

AS YOU KNOW, THE BUDGETARY PROBLEMS THAT LED TO ICC'S DECISION TO FURLOUGH ITS EMPLOYEES FOR 1 DAY PER WEEK FROM APRIL 15, THROUGH JUNE 15, AROSE ON OCTOBER 12, 1984, WHEN THE CONGRESS APPROPRIATED $48 MILLION FOR THE ICC IN FISCAL YEAR 1985, A CUT OF NEARLY $6 MILLION FROM THE AMOUNT REQUESTED IN THE BUDGET AND OF $6.55 MILLION FROM THE AMOUNT REPORTED BY THE HOUSE APPROPRIATIONS COMMITTEE. THE AMOUNT REQUESTED IN THE BUDGET WAS CONSIDERED NECESSARY TO SUPPORT 987 STAFF YEARS, A REDUCTION OF AT LEAST 13 FROM THE NUMBER OF STAFF YEARS MAINTAINED IN FISCAL YEAR 1984. SEE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATION ACT, 1985, ENACTED AS PART OF THE FISCAL YEAR 1985 CONTINUING RESOLUTION, PUB.L. NO. 98-473, 98 STAT. 1837, 1959. THE NUMBER OF EMPLOYEES EXPECTED TO BE FUNDED BY THE APPROPRIATION WAS ALSO REDUCED SIGNIFICANTLY. THE FOLLOWING CHART SHOWS THE DIFFERENCES IN FUNDING AND THE RESULTING STAFF YEARS EXPECTED TO BE FUNDED FOR THE APPROPRIATIONS BILLS REPORTED, BUT NOT ENACTED BY BOTH HOUSES OF CONGRESS, AND FOR THE CONTINUING RESOLUTION:

COMPARISON CHART (OMITTED).

IN ORDER TO RESPOND TO YOUR INQUIRY, WE HAVE INTERVIEWED AN ASSISTANT TO THE CHAIRMAN AND OTHER OFFICIALS OF THE ICC, AND HAVE EXAMINED RELEVANT INTERNAL MEMORANDA AND THE CHAIRMAN'S RESPONSE TO QUESTIONS FORMALLY SUBMITTED IN APRIL BY YOUR OFFICE AND BY THIS OFFICE IN MAY. ON THE BASIS OF OUR INTERVIEWS, AND EXAMINATION OF RELEVANT LAWS, REGULATIONS, CASES AND LEGISLATIVE HISTORY, WE CONCLUDE THAT, WHILE THE FURLOUGH APPEARS TO HAVE HAD A DELETERIOUS EFFECT ON THE WORK OF THE ICC, IT WAS LEGAL AND WITHIN THE ADMINISTRATIVE DISCRETION OF THE COMMISSION. WHILE MORE TIMELY ACTION COULD POSSIBLY HAVE LESSENED THE SEVERITY OF THE FURLOUGH, THE USE OF THAT METHOD TO MEET BUDGETARY RESTRICTIONS APPEARS PREFERABLE TO OTHER ALTERNATIVES AVAILABLE TO THE ICC AT THE TIME THE CONTINUING RESOLUTION WAS ENACTED. WE ALSO CONCLUDE THAT THE NEW COMMISSION RULES COMPLY WITH THE GOVERNMENT IN THE SUNSHINE ACT.

IN THIS LETTER WE WILL DISCUSS THE LEGAL ISSUES AS THEY RELATE TO THE ICC'S FURLOUGH ACTIONS AND WHETHER ICC'S RULES ON OPEN MEETINGS COMPLY WITH THE GOVERNMENT IN THE SUNSHINE ACT. FOR DETAILED INFORMATION ON THE PROPRIETY OR TIMELINESS OF ICC'S ACTIONS REGARDING THE BUDGET CUT, SEE APPENDIX I. APPENDIX II SUMMARIZES ACTIONS TAKEN BY ICC AFTER THE PASSAGE OF THE CONTINUING RESOLUTION. IN APPENDIX III, WE PROVIDE INFORMATION ON ICC'S ALTERNATIVES TO THE FURLOUGH AND IN APPENDIX IV, WE PRESENT INFORMATION ON THE IMPACT AND FAIRNESS OF THE ICC FURLOUGH.

BACKGROUND

IMMEDIATELY AFTER THE ENACTMENT OF THE CONTINUING RESOLUTION, THE CHAIRMAN OF THE ICC INSTRUCTED THE MANAGING DIRECTOR TO PREPARE AN ANALYSIS OF FUNDING ALTERNATIVES FOR THE ICC TO CONSIDER. THE DIRECTOR'S MEMORANDUM, DATED OCTOBER 19, 1984, DISCUSSED MORE FULLY IN APPENDIX II, CONCLUDED THAT SUBSTANTIAL PERSONNEL AND NONPERSONNEL CUTS WOULD HAVE TO BE TAKEN IMMEDIATELY FOR THE ICC TO STAY WITHIN THE $48 MILLION APPROPRIATION. IF IT WERE TO FREEZE ITS OPERATIONS AT THE THEN CURRENT LEVELS, GIVEN USUAL ATTRITION RATES, IT WOULD USE A MINIMUM OF 1,000 STAFF YEARS OR $53.2 MILLION ON PERSONNEL-RELATED COSTS ALONE. AN IMMEDIATE PLAN TO SAVE $1.1 MILLION IN NONPERSONNEL EXPENSES WAS PROPOSED, WHICH THE ICC LATER ESTIMATED WOULD SAVE $2.7 MILLION THROUGH THE END OF THE FISCAL YEAR.

WHILE THE MEMORANDUM PROVIDED AS ONE OF FIVE PROPOSED ALTERNATIVES THE MEANS BY WHICH THE ICC COULD CONTINUE TO OPERATE FOR THE ENTIRE FISCAL YEAR WITHOUT REQUESTING SUPPLEMENTAL FUNDING FROM THE CONGRESS, AT AN OPEN MEETING HELD ON OCTOBER 25, THE COMMISSION VOTED TO SEEK A SUPPLEMENTAL APPROPRIATION TO PROVIDE FUNDING FOR 984 TOTAL STAFF YEARS, THE AMOUNT THOUGHT NECESSARY TO MEET ITS WORK LOAD REQUIREMENTS. AT THE SAME TIME THE COMMISSION REQUESTED ITS MANAGING DIRECTOR TO PREPARE AN EMERGENCY PLAN TO ENABLE IT TO GET THROUGH THE YEAR WITH ONLY THE $48 MILLION APPROPRIATION, INSTITUTED A REDUCTION-IN FORCE (RIF) TO REDUCE PERSONNEL TO THE LEVEL REQUESTED IN THE SUPPLEMENTAL AND VOTED TO FREEZE EXPENDITURES FOR VARIOUS NONPERSONNEL COSTS.

ON JANUARY 18, 1985, THE MANAGING DIRECTOR OF THE ICC ISSUED A MEMORANDUM RECOMMENDING THE FURLOUGHING OF EVERY EMPLOYEE FOR 2 DAYS EACH PAY PERIOD BETWEEN APRIL AND SEPTEMBER AS THE BEST MEANS OF OPERATING WITHIN THE $48 MILLION APPROPRIATION. HE NOTED THAT WHILE TOTAL EMPLOYMENT OF 1,070 AT THE START OF THE FISCAL YEAR HAD DECLINED TO 1,007 AND THAT RIFS THEN OCCURRING WOULD REDUCE THIS LEVEL TO 980, THIS WOULD STILL BE 300 EMPLOYEES ABOVE THE LEVEL THAT COULD BE SUPPORTED FOR THE REMAINDER OF THE YEAR BY THE $48 MILLION APPROPRIATION, WHEN RIF COSTS AND AMOUNTS ALREADY COMMITTED TO NONPERSONNEL COSTS WERE TAKEN INTO ACCOUNT. AN EXPECTED ATTRITION RATE OF 1 PERCENT PER MONTH WAS SEEN AS REDUCING STAFF TO 900 BY THE END OF THIS FISCAL YEAR, 23 POSITIONS UNDER STAFF-YEAR CEILINGS PROPOSED IN THE 1986 BUDGET REQUEST. WITHOUT A FURLOUGH, A SUPPLEMENTAL APPROPRIATION, OR ADDITIONAL RIFS OF 300 EMPLOYEES (WHICH WOULD COST MORE THAN $2 MILLION IN SEPARATION COSTS, OR THE EQUIVALENT OF ANOTHER 100 STAFF YEARS), THE MEMORANDUM WARNED THAT THE COMMISSION WOULD BE TOTALLY WITHOUT FUNDS FOR THE LAST 6 WEEKS OF THE FISCAL YEAR. THE FOLLOWING WAS THE BASIS GIVEN FOR THE FURLOUGH RECOMMENDATION:

THE FURLOUGH PLAN OFFERS TWO SIGNIFICANT ADVANTAGES OVER THOSE ALTERNATIVES REQUIRING MAJOR RIFS. FIRST, AND PERHAPS MOST IMPORTANT, IS THE CONTINUITY OF CURRENT FUNCTIONS. WHILE THE PROGRAM AND ORGANIZATIONAL CHANGE ALTERNATIVES DISCONTINUE SOME FUNCTIONS AND ORGANIZATIONS, THOSE CHANGES ARE NOT NECESSARILY DESIRABLE. THEY ARE ACTIONS DESIGNED LARGELY TO REDUCE COSTS. HOWEVER, IN MY VIEW, THESE ORGANIZATIONS AND FUNCTIONS ARE NECESSARY AND SHOULD BE CONTINUED. THE FURLOUGH ALTERNATIVE PERMITS THESE ESSENTIAL FUNCTIONS TO BE CONTINUED INTO FY 1986. IF, ON THE OTHER HAND, THE COMMISSION DISCONTINUES CERTAIN FUNCTIONS OR OFFICES FOR FY 1985, IT SEEMS CERTAIN THAT THE CONGRESS WILL CUT FUNDING FOR THEM FROM OUR FY 1986 BUDGET REQUEST, AND ANY FUNCTIONAL OR ORGANIZATIONAL CHANGES MADE DUE TO THIS FUNDING CRISIS WILL MOST LIKELY BECOME PERMANENT. ***

IN ADDITION, THE FURLOUGH PLAN IS THE ONLY OPTION THAT OFFERS SOME FLEXIBILITY. IT CAN BE IMPLEMENTED DURING MARCH OR APRIL AND CONTINUED IN THE ABSENCE OF A CLEAR INDICATION THAT THE SUPPLEMENTAL WILL BE PASSED. IF SUPPLEMENTAL FUNDING SUBSEQUENTLY BECOMES AVAILABLE, FURLOUGHS CAN BE IMMEDIATELY TERMINATED. MEMORANDUM TO THE COMMISSION, FROM MARTIN E. FOLEY, EMERGENCY PLAN, PP. 10-11.

THE COMMISSION APPROVED THE DECISION TO ADOPT AND IMPLEMENT FURLOUGHS ON JANUARY 24, 1985, AND ON MARCH 1 ALL EMPLOYEES WERE FORMALLY NOTIFIED THAT THE FURLOUGH WAS TO BEGIN ON APRIL 1 FOR THE REMAINDER OF THE FISCAL YEAR. A SUBSEQUENT NOTICE INFORMED EMPLOYEES THAT THE FURLOUGH WOULD BE DELAYED UNTIL THE WEEK OF APRIL 15 AND THAT UNTIL FURTHER NOTICE, ALL EMPLOYEES WOULD BE FURLOUGHED FOR 2 DAYS EACH PAY PERIOD. THE FURLOUGHS WERE SUSPENDED ON JUNE 17, WHEN THE COMMISSION CONCLUDED THAT CONGRESS WOULD APPROVE A SUPPLEMENTAL APPROPRIATION.

BECAUSE THE FURLOUGH HAD BEEN IN EFFECT FOR ONLY ABOUT A MONTH AT THE TIME OF OUR REVIEW, WE WERE UNABLE TO MAKE AN INDEPENDENT ASSESSMENT OF THE IMPACT OF THE FURLOUGH ON ICC PROGRAMS AND PERSONNEL. BASED ON INFORMATION SUPPLIED TO US BY THE ICC, WHICH IS FULLY DISCUSSED IN APPENDIX IV, AND GIVEN THE ALTERNATIVES AVAILABLE TO THE ICC, THE FURLOUGH, WHILE CAUSING FINANCIAL HARDSHIP TO ALL EMPLOYEES AND CREATING SERIOUS BACKLOGS, MISSED DEADLINES AND REDUCED EFFICIENCY, DID ENABLE THE ICC TO RETAIN THE PRESENT ORGANIZATIONAL STRUCTURE TO CONTINUE ESSENTIAL SERVICES EVEN IF AT A REDUCED LEVEL.

DISCUSSION

I. LEGALITY OF FURLOUGH PLAN

A FURLOUGH, AS DEFINED IN 5 U.S.C. SEC. 7511(A)(5), IS: *** THE PLACING OF AN EMPLOYEE IN A TEMPORARY STATUS WITHOUT DUTIES AND PAY BECAUSE OF LACK OF WORK OR FUNDS OR OTHER NONDISCIPLINARY REASONS.

ICC ELECTED TO USE RIF PROCEDURES FOR THE FURLOUGH SET FORTH IN 5 C.F.R PT. 351 RATHER THAN THE "ADVERSE ACTION" PROCEDURES BECAUSE THE FURLOUGH WAS EXPECTED TO EXTEND BEYOND 30 CALENDAR DAYS. SEE FEDERAL PERSONNEL MANUAL (FPM) CH. 752-9.

AGENCIES HAVE BROAD AUTHORITY TO FURLOUGH ANY OR ALL OF THEIR EMPLOYEES IF THERE ARE LEGITIMATE MANAGEMENT REASONS FOR DOING SO. ALTHOUGH 5 U.S.C. SEC. 7513 (1982) IS SPECIFICALLY DIRECTED TO FURLOUGHS OF LESS THAN 30 DAYS IN LENGTH, AS THE ONLY STATUTE DEFINING SUCH ACTIONS, IT SETS THE STANDARDS FOR ALL FURLOUGHS IN STATING THEY CAN BE REQUIRED "ONLY FOR SUCH CAUSE AS WILL PROMOTE THE EFFICIENCY OF THE SERVICES."

THE ICC FURLOUGH APPEARS TO HAVE MET THE LEGAL REQUIREMENTS. A SITUATION IN WHICH A DEFICIENCY IN AN APPROPRIATION IS EXPECTED IS RECOGNIZED BY THE STATUTORY DEFINITION OF A FURLOUGH TO BE A SUFFICIENT CAUSE TO SUPPORT A FURLOUGH.

OPM HAS SUPPORTED THE USE OF FURLOUGHS IN SITUATIONS IN WHICH THE AGENCY DOES NOT EXPECT TO LATER SEPARATE THE EMPLOYEES THROUGH A RIF WHEN IT FINDS ITSELF LACKING FUNDS, BECAUSE OPM HAS FOUND THAT THIS COURSE IS LIKELY TO "HAVE LESS ADVERSE IMPACT ON EMPLOYEES THAN REDUCTIONS IN FORCE." SEE FPM BULLETIN NO. 351-32 (1981).

ICC EMPLOYEES WERE SERVED WITH A GENERAL RIF NOTICE ON NOVEMBER 7, 1984, AND WERE GIVEN A FORMAL WRITTEN FURLOUGH NOTICE FROM THE DIRECTOR OF PERSONNEL ON MARCH 1, 1985, 6 WEEKS BEFORE THE FURLOUGH TOOK PLACE. THE NOTICE PROVIDED A DETAILED EXPLANATION OF THE BUDGETARY REASONS THAT SUCH ACTION WOULD BE NECESSARY AND OF THE DURATION AND COVERAGE OF THE ACTION. THEY WERE TOLD OF THE RIGHT TO APPEAL IN WRITING TO THE MERIT SYSTEMS PROTECTION BOARD NO LATER THAN 20 DAYS AFTER THE FIRST DAY OF THE FURLOUGH AND OF THE ADDRESS TO WHICH SUCH APPEAL SHOULD BE SENT AND THE MINIMUM CONTENTS OF SUCH APPEAL. THEY WERE ALSO NOTIFIED OF THE LOCATION OF APPLICABLE REGULATIONS. WE HAVE BEEN INFORMED BY THE ICC THAT ONLY THREE EMPLOYEES HAVE APPEALED THIS ACTION AND THAT THE AFFECTED UNIONS WERE NOTIFIED OF THE FURLOUGH DECISION 2 MONTHS BEFORE THE ACTION WAS TAKEN BUT TOOK NO APPEAL FROM IT.

II. ICC COMPLIANCE WITH ANTIDEFICIENCY ACT

YOU HAVE ASKED WHETHER IT WAS PROPER FOR ICC TO SPEND MONEY AT "KNOWN HIGH LEVELS" IN ANTICIPATION OF RECEIVING SUPPLEMENTAL FUNDING FROM THE CONGRESS. TO CONTROL AGENCY OBLIGATIONS FOR THE PURPOSE OF AVOIDING DEFICIENCY SPENDING THE CONGRESS ENACTED THE SO-CALLED ANTIDEFICIENCY ACT, CURRENTLY CODIFIED IN CHAPTER 13, SUBCHAPTER III AND CHAPTER 15, SUBCHAPTER II OF TITLE 31 OF THE UNITED STATES CODE. SECTION 1341 OF TITLE 31 PROHIBITS AN OFFICER OR EMPLOYEE OF THE UNITED STATES FROM MAKING OR AUTHORIZING "AN EXPENDITURE OR OBLIGATION EXCEEDING AN AMOUNT AVAILABLE IN AN APPROPRIATION OR FUND FOR THE EXPENDITURE OR OBLIGATION," OR FROM INCURRING AN "OBLIGATION FOR THE PAYMENT OF MONEY BEFORE AN APPROPRIATION IS MADE UNLESS AUTHORIZED BY LAW." BASED UPON OUR INVESTIGATION, WE ARE AWARE OF NO INSTANCE IN WHICH THE ICC OBLIGATED OR EXPENDED FUNDS IN EXCESS OF ITS $48 MILLION APPROPRIATION, OR OBLIGATED MONEYS IN AN ANTICIPATED SUPPLEMENTAL APPROPRIATION BEFORE THEY WERE APPROPRIATED.

THE ANTIDEFICIENCY ACT ALSO PROHIBITS A FEDERAL OFFICER OR EMPLOYEE FROM MAKING OR AUTHORIZING AN APPROPRIATION IN EXCESS OF AN APPORTIONMENT, OR THE ADMINISTRATIVE DIVISION OF AN APPORTIONMENT. 31 U.S.C. SEC. 1517(A). SECTION 1512 REQUIRES THAT APPROPRIATIONS AVAILABLE FOR A DEFINITE PERIOD OF TIME "BE APPORTIONED TO PREVENT OBLIGATION OR EXPENDITURE AT A RATE THAT WOULD INDICATE THE NECESSITY FOR A DEFICIENCY OR SUPPLEMENTAL APPROPRIATION FOR THE PERIOD." /1/ FOR AGENCIES IN THE EXECUTIVE BRANCH, INCLUDING THE ICC, THE APPORTIONMENT IS DONE BY THE PRESIDENT THROUGH THE OFFICE OF MANAGEMENT AND BUDGET (OMB). SEE 31 U.S.C. SEC. 1513(B)(1). FURTHER, EACH AGENCY IS REQUIRED TO ESTABLISH A SYSTEM OF ADMINISTRATION TO ASSURE THAT OBLIGATIONS OR EXPENDITURES DO NOT EXCEED APPORTIONMENTS, AND, IF THEY DO, THAT RESPONSIBILITY IS FIXED. 31 U.S.C. SEC. 1514(A).

WITHIN 2 WEEKS OF THE PRESIDENT'S APPROVAL OF THE CONTINUING RESOLUTION, THE ICC VOTED TO REQUEST A CATEGORY B APPORTIONMENT, UNDER WHICH THE $48 MILLION WOULD BE APPORTIONED FOR THE FULL FISCAL YEAR, RATHER THAN A CATEGORY A APPORTIONMENT WHICH WOULD HAVE DIVIDED IT BY CALENDAR QUARTER. SEE GENERALLY OMB CIRCULAR NO. A-34, SEC. 42.3 (1976). THE FULL APPROPRIATION WAS SOUGHT BECAUSE THE ICC ANTICIPATED HEAVIER EXPENSES AT THE BEGINNING OF THE YEAR TO REDUCE ITS STAFFING TO A LEVEL THAT WOULD BE SUPPORTABLE BY ITS APPROPRIATION. CHAIRMAN TAYLOR EXPLAINED HIS REQUEST IN THE FOLLOWING LANGUAGE: WE ARE REQUESTING A CATEGORY B APPORTIONMENT, BECAUSE OF THE DRASTIC REDUCTION IN OUR BUDGET AS PROVIDED IN THE CONTINUING RESOLUTION (P.L. 98-473). SINCE THE BUDGET AUTHORITY WAS REDUCED BY APPROXIMATELY 15% RELATIVE TO THE CURRENT RATE OF OBLIGATIONS, THE COMMISSION NEEDS THE FLEXIBILITY TO MAKE QUICK CHANGES IN ALLOCATING ITS RESOURCES. FOR EXAMPLE, A CATEGORY B APPORTIONMENT WOULD ALLOW THE COMMISSION THE FLEXIBILITY TO CONDUCT REDUCTIONS-IN-FORCE, INCURRING THE ATTENDANT EXPENSES EARLIER IN THE YEAR THAN A CATEGORY A APPORTIONMENT WOULD ALLOW. ALSO, TERMINATION OF CERTAIN CONTRACTS CAN BE CONSIDERED IF THE COMMISSION HAS THE FUNDS AVAILABLE EARLY IN THE YEAR TO PAY ANTICIPATED TERMINATION COSTS. LETTER TO DAVID A. STOCKMAN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, FROM REESE H. TAYLOR, JR., CHAIRMAN, ICC, NOVEMBER 2, 1984.

OMB APPROVED THE REQUEST WITHOUT CHANGE ON NOVEMBER 9.

WHILE APPORTIONMENT OF THE ICC APPROPRIATION FOR THE FULL FISCAL YEAR ELIMINATED AN IMPORTANT CONTROL TO PREVENT VIOLATIONS OF THE ANTIDEFICIENCY ACT, SUCH APPORTIONMENT IS PERMITTED UNDER 31 U.S.C. SEC. 1512(B)(1), WHICH PERMITS APPORTIONMENT BY TIME PERIODS OTHER THAN CALENDAR QUARTERS, AND APPEARS JUSTIFIED IN THIS CASE. THE ICC HAD IMPLEMENTED AN ACTION PLAN THAT WOULD BRING STAFFING DOWN TO THE SUPPLEMENTAL REQUEST LEVEL OF 984 STAFF YEARS BY JANUARY 31, THE LEVEL IT BELIEVED NECESSARY TO FULFILL THE AGENCY'S STATUTORY RESPONSIBILITIES, AND TO REDUCE NONPERSONNEL COSTS. TO ACCOMPLISH THIS RESULT, THE ICC NEEDED A DISPROPORTIONATE AMOUNT OF ITS APPROPRIATION AT THE BEGINNING OF THE YEAR TO PAY FOR THE ADDED COSTS OF RIFS AND CONTRACT TERMINATIONS.

ALTHOUGH NOT EXPRESSLY STATED IN THE STATUTORY LANGUAGE, WE HAVE HELD THAT THE ANTIDEFICIENCY ACT REQUIRES HEADS OF FEDERAL AGENCIES TO EXPEND FISCAL YEAR APPROPRIATIONS SO AS TO PREVENT THE NECESSITY FOR A SUPPLEMENTAL OR DEFICIENCY APPROPRIATION AND TO AVOID EXHAUSTING THE FUNDS BEFORE THE END OF THE PERIOD FOR WHICH THEY ARE APPROPRIATED. SEE B-167656, JUNE 18, 1971; 38 COMP.GEN. 501 (1959); B-131361, MAY 9, 1957. AS WE HAVE INDICATED, AT THE RECOMMENDATION OF ITS MANAGING DIRECTOR THE ICC ADOPTED AN OPERATING PLAN FOR FISCAL YEAR 1985 WHICH INCLUDED A REQUEST FOR A SUPPLEMENTAL APPROPRIATION. HOWEVER, PART OF THAT OPERATING PLAN WAS AN EMERGENCY PLAN WHICH WOULD ENABLE THE ICC TO OPERATE FOR THE ENTIRE FISCAL YEAR EVEN WITHOUT A SUPPLEMENTAL. UNDER THE PLAN, IF THE CONGRESS DID NOT ENACT A SUPPLEMENTAL APPROPRIATION BY THE END OF MARCH, THE COMMISSION WAS TO FURLOUGH ALL ITS EMPLOYEES FOR 1 DAY PER WEEK FOR THE REMAINDER OF THE YEAR. THIS WOULD ALLOW THE COMMISSION TO OPERATE THROUGH THE END OF THE FISCAL YEAR WITHIN THE $48 MILLION ALREADY APPROPRIATED. IN FACT A SUPPLEMENTAL WAS NOT PASSED BY THE END OF MARCH AND THE FURLOUGH WAS IMPLEMENTED.

WE HAVE DESCRIBED IN SOME DETAIL, HERE AND IN APPENDICES I AND II, THE ACTIONS TAKEN BY THE ICC, BECAUSE WE THINK THAT THESE ACTIONS DEMONSTRATE THAT FROM THE TIME AT WHICH THE CONGRESS AND THE PRESIDENT APPROVED LEGISLATION REDUCING ICC'S FUNDING BELOW THE REQUESTED LEVEL, EVERY DECISION RELATED TO EXPENDITURES WAS MADE TO AVOID VIOLATION OF THE ANTIDEFICIENCY ACT. DECISIONS RELATING TO FURLOUGHS, RIFS AND CUTS IN NONPERSONNEL EXPENDITURES WERE ALL MADE WITH THE OBJECTIVES OF MAINTAINING ESSENTIAL SERVICES AND STAYING WITHIN BUDGETARY LIMITS.

WHILE THE IMPACT OF THE RIFS AND FURLOUGHS ON EMPLOYEES MIGHT HAVE BEEN LESSENED IF THE ICC HAD ACTED EARLIER, WE CANNOT SAY THAT THE ICC ACTED UNREASONABLY IN EXPECTING THAT A COMPROMISE WOULD BE REACHED BETWEEN THE SENATE AND HOUSE APPROPRIATION FIGURES. AS SOON AS THE CONGRESS ACTED, WHICH WAS AFTER THE BEGINNING OF THE FISCAL YEAR, THE ICC ACTED DECISIVELY TO BRING SPENDING WITHIN THE BUDGETED LEVELS.

WE ARE CONCERNED, HOWEVER, WITH THE ICC'S DECISION TO SUSPEND THE FURLOUGHS ON JUNE 17, EVEN THOUGH ITS SUPPLEMENTAL APPROPRIATION HAD NOT YET BEEN ENACTED. THE VERY PURPOSE OF THE FURLOUGHS WAS TO ENABLE THE COMMISSION TO OPERATE FOR THE REMAINDER OF THE FISCAL YEAR WITHOUT ADDITIONAL FUNDING. TO DATE, THE CONGRESS HAS NOT ENACTED A SUPPLEMENTAL APPROPRIATION FOR THE ICC, AND THERE IS NO CERTAINTY THAT IT WILL. SHOULD THERE BE NO SUPPLEMENTAL, THE ICC WILL BE FORCED TO TAKE MORE DRASTIC ACTION THAN ITS ORIGINAL FURLOUGH PLAN TO AVOID VIOLATING THE ANTIDEFICIENCY ACT. IF THE COMMISSION DOES NOT ACT SOON, IT MAY BE UNABLE TO AVOID VIOLATING THE ACT. CF. 36 COMP.GEN. 699 (1957). (THE APPORTIONMENT PROVISIONS OF THE ANTIDEFICIENCY ACT ARE VIOLATED IF ONLY A DRASTIC CURTAILMENT OF ACTIVITY WILL ALLOW AN AGENCY TO GET THROUGH THE YEAR WITHOUT EXHAUSTING ITS APPROPRIATIONS.)

III. ICC COMPLIANCE WITH GOVERNMENT IN THE SUNSHINE REQUIREMENTS

THE SENATE APPROPRIATIONS COMMITTEE, IN ITS REPORT ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS BILL, 1985, INDICATES THAT DURING HEARINGS THE COMMITTEE HAD EXPRESSED CONCERN THAT THE ICC HAD HELD NO PUBLIC MEETINGS SINCE OCTOBER 1982. THE REPORT INDICATES THAT ALMOST 3,000 VOTES HAD BEEN TAKEN DURING THE PERIOD, INCLUDING VOTES ON SUCH CONTROVERSIAL MATTERS AS BOXCAR DEREGULATION AND COAL PRICE GUIDELINES. AT THE HEARINGS, THE COMMITTEE HAD INSTRUCTED THE ICC TO CHANGE ITS PROCEDURES AND OPEN ITS MEETINGS. IN THE REPORT THE COMMITTEE REITERATED ITS DIRECTION THAT THE ICC COMPLY WITH THE SPIRIT AND INTENT OF THE GOVERNMENT IN THE SUNSHINE ACT. SEN. REPT. NO. 561, 98TH CONG., 2D SESS. 78-79 (1984).

THE GOVERNMENT IN THE SUNSHINE ACT, AS CODIFIED AT 5 U.S.C. SEC. 552B (1982), STATES THAT MEMBERS OF PRESIDENTIALLY-APPOINTED AND CONGRESSIONALLY-CONFIRMED COLLEGIAL BODIES, AND SUBDIVISIONS AUTHORIZED TO ACT ON THEIR BEHALF, "SHALL NOT JOINTLY CONDUCT OR DISPOSE OF AGENCY BUSINESS" EXCEPT AS PROVIDED BY THE ACT AND THAT "EVERY PORTION OF EVERY MEETING OF AN AGENCY SHALL BE OPEN TO PUBLIC OBSERVATION." 5 U.S.C. SEC. 552B(B) (1982). A MEETING CAN BE CLOSED TO THE PUBLIC ONLY IF THE SUBJECT OF THE MEETING FALLS WITHIN 1 OF 10 CATEGORIES PROVIDED BY 5 U.S.C. SEC. 552B(C) (SUCH AS MEETINGS RELATED ONLY TO "INTERNAL PERSONNEL RULES AND PRACTICES" OR INVOLVING INFORMATION THAT IF DISCLOSED WOULD HAVE "SIGNIFICANTLY FRUSTRATED IMPLEMENTATION OF A PROPOSED AGENCY ACTION"), AND THE CLOSING OF THE MEETING IS APPROVED BY A RECORDED MAJORITY OF AGENCY MEMBERS. 5 U.S.C. SEC. 552B(D). FOR EACH MEETING CLOSED TO THE PUBLIC, PUBLIC CERTIFICATION BY THE AGENCY GENERAL COUNSEL IS REQUIRED AS TO HIS AGREEMENT THAT THE MEETING MAY BE CLOSED AND CITING THE RELEVANT EXEMPTION PROVISION. 5 U.S.C. SEC. 552B(F)(1). PUBLIC ANNOUNCEMENT OF THE TIME, PLACE AND SUBJECT MATTER OF EACH MEETING IS GENERALLY REQUIRED AT LEAST 1 WEEK BEFORE THE MEETING IS TO BE HELD. 5 U.S.C. SEC. 552B(E)(1). THERE ARE REQUIREMENTS THAT TRANSCRIPTS, ELECTRONIC RECORDINGS OR COMPLETE MINUTES OF EACH MEETING BE TAKEN AND, EXCEPT WHERE DISCLOSURE IS BARRED, SUCH TRANSCRIPTS, RECORDINGS OR MINUTES SHALL BE "PROMPTLY AVAILABLE TO THE PUBLIC, IN A PLACE EASILY ACCESSIBLE TO THE PUBLIC." 5 U.S.C. SEC. 552B(F)(2) (1982).

THE CRITICISMS OF ICC PROCEDURES WERE BASED ON ITS EXTENSIVE USE OF NOTATION VOTING, A PROCEDURE IN WHICH MEMBERS VOTED SERIALLY AND IN WRITING ON AGENCY BUSINESS WITHOUT HOLDING MEETINGS. IT SHOULD BE NOTED THAT NOTATION VOTING WAS FOUND NOT TO BE PROHIBITED BY THE GOVERNMENT IN THE SUNSHINE ACT IN WHAT APPEARS TO BE THE ONLY CASE TO CONSIDER THE ISSUE, COMMUNICATION SYSTEMS V. FEDERAL COMMUNICATIONS COMMISSION, 595 F.2D 797 (D.C. CIR. 1978). WHILE THE COURT NOTED THAT THE PHRASE OF THE SUNSHINE ACT STATING "MEMBERS SHALL NOT JOINTLY CONDUCT OR DISPOSE OF BUSINESS" EXCEPT IN ACCORDANCE WITH THE ACT WAS AMBIGUOUS, ITS STUDY OF THE LEGISLATIVE HISTORY LED IT TO CONCLUDE THAT THE ACT ONLY APPLIED TO FACE-TO-FACE MEETINGS AND NOT TO:

*** CONDUCT THAT RESULTED FROM MORE REMOTE COMMUNICATIONS, SUCH AS BY CIRCULATING WRITTEN MEMORANDA OR VOTING SHEETS. 595 F.2D AT 799.

IN SUPPORTING NOTATION VOTING, THE COURT CONCLUDED:

*** NOTATION VOTING ENABLES GOVERNMENT AGENCIES TO EXPEDITE CONSIDERATION OF LESS CONTROVERSIAL CASES WITHOUT FORMAL MEETINGS AND FOLLOWING THE OTHER STRICTURES OF THE ACT. IF ALL AGENCY ACTIONS REQUIRED MEETINGS, THEN THE ENTIRE ADMINISTRATIVE PROCESS WOULD BE SLOWED-- PERHAPS TO A STANDSTILL. CERTAINLY REQUIRING AN AGENCY TO MEET AND DISCUSS EVERY TRIVIAL ITEM ON ITS AGENDA WOULD DELAY CONSIDERATION OF THE MORE SERIOUS ISSUES THAT REQUIRE JOINT FACE-TO FACE DELIBERATION. CLEARLY CONGRESS DID NOT INTEND SUCH A RESULT. *** 595 F.2D AT 800-01.

THERE ARE TWO REFERENCES IN THE LEGISLATIVE HISTORY OF THE GOVERNMENT IN THE SUNSHINE ACT THAT SUPPORT THE COURT'S CONCLUSION. THE CONFERENCE COMMITTEE, IN DISCUSSING ITS SUBSTITUTE, WHICH BECAME SECTION 552B(B), SUPRA, STATED:

THE CONFERENCE SUBSTITUTE PROVIDES THAT MEMBERS SHALL NOT JOINTLY CONDUCT OR DISPOSE OF AGENCY BUSINESS IN A MEETING OTHER THAN IN ACCORDANCE WITH NEW SECTION 552B. THIS PROHIBITION DOES NOT PREVENT AGENCY MEMBERS FROM CONSIDERING INDIVIDUALLY BUSINESS THAT IS CIRCULATED TO THEM SEQUENTIALLY IN WRITING. H. REPT. NO. 1441, 94TH CONG., 2D SESS. 11 (1976).

ALSO, DURING FLOOR DEBATE, REPRESENTATIVE FLOWERS EXPLAINED THE PHRASE "JOINT CONDUCT OR DISPOSITION" IN DEFINING A "MEETING," AS FOLLOWS:

*** THE AMENDED SUBSECTION WOULD NOT PRECLUDE AGENCIES FROM DISPOSING OF NONCONTROVERSIAL MATTERS BY WRITTEN CIRCULATIONS. 122 CONG. REC. 24184, JULY 28, 1976.

IN RESPONSE TO THE SENATE APPROPRIATIONS COMMITTEE'S CONCERNS VOICED AT THE APPROPRIATIONS HEARINGS, THE ICC INITIALLY ADOPTED ON MAY 10, 1984, AND FINALLY APPROVED ON JANUARY 14, 1985, NEW VOTING PROCEDURES PROVIDING FOR VOTING ON SIGNIFICANT ICC PROCEEDINGS, INVOLVING MAJOR TRANSPORTATION ISSUES, AT AGENCY CONFERENCES THAT WOULD BE OPEN TO THE PUBLIC, RATHER THAN THROUGH NOTATION VOTING. SEE 49 FED.REG. 20954, MAY 17, 1984, AND 50 FED.REG. 2985, JAN. 23, 1985, ANNOUNCING PROCEDURES CODIFIED AT 49 C.F.R. PT. 1011 (1985). UNDER 49 C.F.R. SEC. 1011.4(C), IN ADDITION TO REGULAR MEETINGS, THE ICC CHAIRMAN IS, REQUIRED TO CALL A COMMISSION CONFERENCE, THAT WOULD GENERALLY BE OPEN TO THE PUBLIC, AT THE REQUEST OF ANY MEMBER OF THE COMMISSION:

*** FOR THE PURPOSE OF DISCUSSING AND VOTING UPON SIGNIFICANT COMMISSION PROCEEDINGS INVOLVING MAJOR TRANSPORTATION ISSUES, AND SUCH CONFERENCE SHALL BE HELD WITHIN A REASONABLE TIME FOLLOWING THE CLOSE OF THE RECORD IN THE PROCEEDING INVOLVED.

SPECIAL MEETINGS FOR CONSIDERATION OF OTHER THAN MAJOR TRANSPORTATION ISSUES MUST BE CALLED BY THE CHAIRMAN AT THE REQUEST OF ANY MEMBER, UNLESS A MAJORITY OF THE COMMISSION VOTES AGAINST THE REQUEST OR TO DELAY CONFERENCE CONSIDERATION OF THAT MATTER, OR UNLESS THE CHAIRMAN FINDS THAT "SPECIAL CIRCUMSTANCES WARRANT A DELAY." THE ICC MAJORITY AND CHAIRMAN MAY NOT OVERRIDE A REQUEST FOR A CONFERENCE ON MAJOR TRANSPORTATION ISSUES.

THE ICC CHAIRMAN, IN HIS LETTER TO GAO, STATED HIS BELIEF THAT THE ICC IS IN COMPLIANCE WITH THE GOVERNMENT IN THE SUNSHINE ACT AND STATED THAT THE AGENCY IS "CONTINUING TO SEEK WAYS TO BECOME EVEN MORE RESPONSIVE TO THE SPIRIT OF THAT ACT." LETTER FROM REESE H. TAYLOR, JR., CHAIRMAN, ICC TO GAO, JUNE 13, 1985, P. 10 (ICC-GAO LETTER). THE CHAIRMAN JUSTIFIED THE ICC'S HEAVY USE OF NOTATION VOTING AND THE RELATIVELY SMALL NUMBER OF MEETINGS HELD BY THE COMMISSION AS MADE NECESSARY BY THE HEAVY DELIBERATIVE WORK LOAD OF THE ICC WHICH, ACCORDING TO THE CHAIRMAN, INVOLVES A LOW PERCENTAGE OF MATTERS REQUIRING ACTIONS BY THE ENTIRE COMMISSION. FOR EXAMPLE, HE STATES THAT OF 34,774 ACTIONS CONSIDERED BY THE ICC IN 1984, 24,613 WERE INVOLVED WITH THE ISSUANCE OF LICENSES, 9,384 ACTIONS WERE TAKEN BELOW FULL COMMISSION LEVEL AND ONLY 777 REQUIRED ENTIRE COMMISSION ACTION. MANY OF THESE LATTER ACTIONS WERE PROCEDURAL, MINISTERIAL OR LIMITED IN SCOPE (SUCH AS DISCOVERY MOTIONS OR REQUESTS FOR EXTENSIONS OF STATUTORY DEADLINES). HE CITED AN INFORMAL STAFF SURVEY AS INDICATING THAT ONLY 42 PERCENT OF THE MATTERS CIRCULATED FOR ENTIRE COMMISSION CONSIDERATION WARRANTED SUCH ATTENTION AND NOT ALL OF THOSE WERE CONCERNED WITH THE ULTIMATE MERITS OF THE CASE.

WHILE WE AGREE THAT THE GOVERNMENT IN THE SUNSHINE ACT IS NOT INTENDED TO INTERFERE WITH THE EFFICIENT AND ORDERLY OPERATIONS OF THE AGENCY, AND THAT MEETINGS SHOULD NOT BE REQUIRED FOR ROUTINE AGENCY ACTIONS, WE ARE CONCERNED THAT ONLY A SMALL NUMBER OF MEETINGS HAVE BEEN HELD TO CONSIDER CASES THAT THE ICC IDENTIFIES AS "SIGNIFICANT." FROM JUNE 1, 1984, TO JUNE 1, 1985, 21 CASES ON THE ICC'S "SIGNIFICANT CASE LIST" WERE DECIDED ON THE MERITS. OPEN CONFERENCES WERE HELD TO DISCUSS AND VOTE ON ONLY NINE OF THESE CASES AND ORAL ARGUMENTS WERE HELD IN SIX. THE CHAIRMAN EXPLAINED THAT THESE CASES WERE THE ONLY ONES IDENTIFIED BY THE COMMISSION AS INVOLVING MAJOR TRANSPORTATION ISSUES. ICC-GAO LETTER AT 11.

THE ICC HAS COMPLIED WITH THE GOVERNMENT IN THE SUNSHINE ACT BY OPENING ITS 10 MEETINGS IN 1984 AND 2 MEETINGS IN 1985 TO THE PUBLIC AND BY PROVIDING ADEQUATE ADVANCE NOTICE OF THESE MEETINGS. ITS RULES APPEAR TO COMPLY WITH THE ACT BY ASSURING THAT ALL MAJOR TRANSPORTATION ISSUES ARE DECIDED BY CONFERENCE AND AFFORDING MEMBERS THE OPPORTUNITY TO REQUEST MEETINGS ON ANY MATTER. HOWEVER, THE COMMUNICATIONS SYSTEMS CASE SUGGESTS THAT CONGRESS PROBABLY EXPECTED AGENCIES TO HOLD MEETINGS ON MORE THAN JUST MAJOR POLICY ISSUES AND DID NOT EXPECT EXCESSIVE RELIANCE ON NOTATION VOTING. THE COURT NOTED IN A FOOTNOTE THAT: SOME COMMENTATORS WHILE ACKNOWLEDGING THAT "THE CONFERENCE REPORT MAKES CLEAR THAT THE PROHIBITION DOES NOT PREVENT AGENCY MEMBERS FROM DISPOSING OF BUSINESS BY CIRCULATION OF PAPERS INSTEAD OF MEETINGS, I.E., BY NOTATION PROCEDURE," HAVE SUGGESTED THAT "TO COMPLY WITH THE SPIRIT OF THE SUNSHINE ACT *** AGENCIES SHOULD REFRAIN FROM EXCESSIVE RELIANCE ON NOTATION PROCEDURE." R. BERG & S. KLITZMAN, AN INTERPRETATIVE GUIDE TO THE GOVERNMENT IN THE SUNSHINE ACT 13 (1978). ***" 595 F.2D AT 801. IN HIS LETTER, THE CHAIRMAN INDICATES THAT THE ICC IS MOVING IN THE DIRECTION OF CONDUCTING MORE OF ITS SIGNIFICANT BUSINESS IN OPEN MEETINGS:

THE COMMISSION HAS MADE A GENUINE EFFORT TO RESPOND TO CONGRESSIONAL CONCERNS REGARDING COMPLIANCE WITH THE SUNSHINE ACT. HOWEVER, OUR EFFORTS TO DATE REPRESENT JUST A BEGINNING, AS WE ARE COMMITTED TO INCREASING THE NUMBER OF OPEN CONFERENCES.

*** IN ADDITION (TO OPEN CONFERENCES HELD THIS YEAR), THERE ARE MANY MORE PROCEEDINGS, THAT SHOULD BE READY FOR A DECISION THIS YEAR, WHICH WILL BE SCHEDULED LATER ON FOR DISPOSITION AT AN OPEN CONFERENCE.

ALSO, THE AGENCY IS CURRENTLY CONSIDERING A MAJOR REORGANIZATIONAL PLAN WHICH, IF ADOPTED, WOULD SUBSTANTIALLY REDUCE THE NUMBER OF ENTIRE COMMISSION ACTIONS. UNDER THE PLAN, THE DISPOSITION OF ROUTINE, PROCEDURAL, AND LESS IMPORTANT MATTERS WOULD BE DELEGATED TO EMPLOYEE BOARDS, THEREBY ALLOWING THE COMMISSION TO DISPOSE OF MORE SIGNIFICANT CASES AT OPEN CONFERENCES. IN FACT, ONE OF THE OBJECTIVES OF THE PLAN IS TO REVISE OUR INSTITUTIONALIZED DECISION-MAKING PROCESS IN ORDER TO ALLOW FOR THE DISPOSITION OF MORE MATTERS AT OPEN CONFERENCES.

IN SUMMARY, THE COMMISSION IS COMPLYING WITH THE SUNSHINE ACT AND IS COMMITTED TO INTENSIFYING ITS EFFORTS TO BECOME EVEN MORE RESPONSIVE TO THE SPIRIT OF THE ACT. ICC-GAO LETTER AT 11-12.

IN ACCORDANCE WITH YOUR REQUEST, WE HAVE NOT PROVIDED COPIES OF THIS LETTER TO THE ICC FOR AGENCY COMMENTS. OUR STAFF WILL BE IN CONTACT WITH YOUR OFFICE CONCERNING THE REMAINING PORTIONS OF YOUR REQUEST LETTER WHICH YOU INDICATED WERE OF LESS URGENCY. UNLESS WE HEAR OTHERWISE FROM YOUR OFFICE, THIS LETTER WILL BE AVAILABLE TO THE PUBLIC 30 DAYS FROM TODAY.

APPENDIX 1. TIMELINESS OF ICC'S RESPONSE TO FUNDING CRISIS

ALTHOUGH THE ICC HAD SOME INDICATION THAT ITS BUDGET WAS IN TROUBLE AT LEAST AS EARLY AS JULY 17, 1984, THE DATE OF THE SENATE APPROPRIATIONS COMMITTEE'S REPORT ON S. 2852, IT TOOK NO ACTION TO REDUCE STAFF SIZE OR START NOTICE PROCEDURES NECESSARY BEFORE ANY REDUCTION IN FORCE (RIF) ACTION COULD BE TAKEN. IN FACT, PRIOR TO PASSAGE OF THE CONTINUING RESOLUTION, ICC TOOK NO ACTION TO PLAN FOR OR IMPLEMENT RIFS OR FURLOUGHS OF THE MAGNITUDE THAT WOULD EVENTUALLY BE NEEDED TO COMPENSATE FOR THE $6 MILLION APPROPRIATION CUT THE AGENCY INCURRED FOR FISCAL YEAR 1985.

ACCORDING TO OFFICE OF PERSONNEL MANAGEMENT (OPM) OFFICIALS, ICC COULD HAVE TAKEN ACTION EARLIER ON A PLAN FOR A RIF OR FURLOUGH IF THE AGENCY HAD A REASONABLE EXPECTATION THAT SUCH ACTION WOULD BE NECESSARY. ICC OFFICIALS HAVE STATED, HOWEVER, THAT AT THE TIME THEY DID NOT HAVE REASON TO EXPECT THAT THE EVENTUAL APPROPRIATION WOULD FORCE THE AGENCY TO INSTITUTE MAJOR RIFS OR FURLOUGHS. BECAUSE NO DOCUMENTATION EXISTS ON WHAT DISCUSSIONS WERE HELD WITH VARIOUS CONGRESSIONAL SOURCES OR OF WHAT ICC WAS TOLD BY THESE SOURCES PRIOR TO THE PASSAGE OF THE CONTINUING RESOLUTION, WE WERE UNABLE TO FULLY ASSESS THE APPROPRIATENESS OF ICC'S INACTION.

THE SENATE-REPORTED TRANSPORTATION APPROPRIATION BILL, S. 2852, AUTHORIZED $48 MILLION FOR THE ICC FOR FISCAL YEAR 1985. THE COMMITTEE REPORT PROVIDED STAFFING LEVELS OF 904. SEN. REPT. NO. 561, 98TH CONG., 2D SESS. 77 (1984). PUB.L. NO. 98-473, THE CONTINUING RESOLUTION, APPROVED ON OCTOBER 12, 1984, CONTAINED THE $48 MILLION SENATE FIGURE, BUT THE CONFERENCE REPORT PROVIDED STAFFING LEVELS OF 914. SEE H.R. REPT. NO. 1159, 98TH CONG., 2D SESS. 400-01 (1984).

ICC OFFICIALS TOLD US THAT THE AGENCY WAS IMMEDIATELY AWARE THAT $48 MILLION WOULD NOT FUND THE 904 STAFF-YEAR LEVEL CONTEMPLATED BY S. 2852, IN THAT THE FUNDING WAS CUT BY A GREATER PERCENTAGE THAN THE STAFF-YEAR AUTHORIZATION. THEY ALSO TOLD US THAT APPROPRIATIONS COMMITTEE STAFF WERE INFORMED OF THESE PROBLEMS. EVEN IF CUTS IN STAFFING AND FUNDING PERCENTAGES WERE EQUAL, ICC OFFICIALS STATED THAT ICC WOULD STILL HAVE FUNDING PROBLEMS BECAUSE NONPERSONNEL COSTS ARE FIXED AND CANNOT BE REDUCED AS QUICKLY AS COSTS ASSOCIATED WITH PERSONNEL. ALSO, AS AN ICC OFFICIAL POINTED OUT, WHEN AN AGENCY IS REQUIRED TO RIF PERSONNEL, ONE TYPE OF PERSONNEL COST-SEVERANCE PAY-- WILL GO UP IN THE SHORT RUN.

TO FURTHER COMPLICATE THE ICC APPROPRIATION SITUATION, THE AGENCY FOUND THAT ITS ESTIMATES OF AVERAGE SALARY COSTS USED IN THE DEVELOPMENT OF ITS FISCAL YEAR 1985 BUDGET WERE TOO LOW AND RESULTED IN A SHORTAGE OF $1.5 MILLION IN ITS PROJECTED PERSONNEL COSTS. ALTHOUGH AN ICC OFFICIAL STATED THAT THE AGENCY WAS AWARE OF THIS ERROR PRIOR TO THE PASSAGE OF THE CONTINUING RESOLUTION, IT IS NOT CLEAR WHETHER SUCH INFORMATION WAS PROVIDED TO THE CONGRESS.

ACCORDING TO ICC OFFICIALS, THE REASON THE AGENCY TOOK NO EARLY ACTION TO PLAN FOR A RIF TO MEET THE $48 MILLION LEVEL PROPOSED IN S. 2852 WAS THAT ICC EXPECTED TO EVENTUALLY RECEIVE A HIGHER LEVEL OF FUNDING BECAUSE OF PAST EXPERIENCE AND CONGRESSIONAL ASSURANCES.

IN HIS LETTER RESPONDING TO A GAO INQUIRY, CHAIRMAN TAYLOR WROTE:

NEEDLESS TO SAY, THE COMMISSION WAS WELL AWARE LAST SUMMER OF THE SUBSTANTIAL DIFFERENCE BETWEEN THE $48 MILLION RECOMMENDED BY THE SENATE APPROPRIATIONS COMMITTEE AND THE $54,550,000 APPROVED BY THE HOUSE APPROPRIATIONS COMMITTEE. HOWEVER, BASED UPON OUR LIAISON WITH CONGRESSIONAL STAFFERS DURING THE SUMMER AND EARLY FALL OF 1984, WE HAD EVERY REASON TO BELIEVE THAT THE DIFFERENCE BETWEEN THE TWO AMOUNTS WOULD BE RESOLVED THROUGH A COMPROMISE DURING THE HOUSE/SENATE CONFERENCE, AS HAS BEEN OUR EXPERIENCE IN RECENT YEARS. UNFORTUNATELY, HOWEVER, NO COMPROMISE WAS FORTHCOMING. THIS LEFT THE COMMISSION IN THE UNTENABLE PREDICAMENT OF HAVING TO DISCHARGE ITS RESPONSIBILITIES FOR THE BALANCE OF FY 1985 WITH ONLY $48 MILLION TO FUND THE EFFORT. LETTER FROM REESE H. TAYLOR, JR., CHAIRMAN, ICC TO GAO, JUNE 13, 1985, P.3.

FURTHER, ICC OFFICIALS TOLD US THAT THEY WERE IMMEDIATELY AWARE THAT THE $48 MILLION SENATE COMMITTEE BILL WOULD NOT FUND THE 904 STAFF YEARS ALLOTTED. ICC'S BUDGET AND FISCAL OFFICER PROVIDED US WITH UNDATED DOCUMENTS WHICH SHE INDICATED WERE DEVELOPED DURING JULY OR AUGUST SHOWING THAT ICC NEEDED AN ADDITIONAL $3.075 MILLION TO FUND THE 904 STAFF YEARS. ICC OFFICIALS STATED THAT BOTH SENATE AND HOUSE COMMITTEE STAFF MEMBERS WERE INFORMED ABOUT THE POTENTIAL FUNDING PROBLEM AND EXPECTED THE FUNDING LEVEL TO BE INCREASED TO THE 904 STAFF YEAR LEVEL. ICC OFFICIALS WERE UNABLE TO PROVIDE ANY DOCUMENTATION ON THESE STAFF CONTRACTS, AND THE PERSON WHO IS SAID TO HAVE MADE THE CONTRACTS FOR THE ICC IS NO LONGER WITH THE AGENCY.

IN ADDITION, THE $48 MILLION FUNDING LEVEL OF S. 2852 WAS BASED ON THE ASSUMPTION THAT LEGISLATION WOULD BE APPROVED REDUCING THE SIZE OF THE ICC BY TWO COMMISSIONERS. THE ICC BUDGET OFFICER INDICATED THAT THIS WOULD HAVE HAD THE EFFECT OF REDUCING THE AGENCY'S COSTS IN FISCAL YEAR 1985 BY $541,000 FOR THE TWO COMMISSIONERS AND THEIR STAFFS. SINCE THIS LEGISLATION WAS NOT CONSIDERED BY THE CONGRESS, THE ICC EXPECTED THAT THE ADDITIONAL FUNDS TO PROVIDE FOR THE ACTUAL NUMBER OF COMMISSIONERS AND THEIR STAFFS WOULD HAVE BEEN ADDED BACK TO THE ICC'S APPROPRIATION.

HAD THE ICC ANTICIPATED THAT A COMPROMISE BETWEEN THE DIFFERING AMOUNTS OF HOUSE AND SENATE APPROPRIATIONS WOULD NOT BE FORTHCOMING, THEY COULD HAVE PLANNED FOR THE RIF IN ADVANCE, ACCORDING TO TWO OPM OFFICIALS THAT OUR STAFF INTERVIEWED. THE OPM OFFICIALS STATED THAT IF THERE IS A REASONABLE EXPECTATION THAT A RIF IS NEEDED, AN AGENCY CAN PLAN FOR IT. BUT THERE IS NO LAW OR REGULATION THAT MANDATES THE AGENCY TO PLAN FOR A RIF IN THE SITUATION THAT THE ICC FOUND ITSELF AND THERE IS NO DEFINITION OF REASONABLE EXPECTATION. BECAUSE OFFICIALS AT ICC DID NOT THINK THERE WAS A REASONABLE EXPECTATION THAT THEIR APPROPRIATION WOULD ACTUALLY BE CUT TO THE $48 MILLION, THEY DID NOT PLAN FOR SUCH A CUT.

ACTION WAS TAKEN IMMEDIATELY AFTER THE CONTINUING RESOLUTION WAS PASSED. HOWEVER, BECAUSE OF THE 75- TO 90-DAY MINIMUM LEAD TIME NEEDED TO DEVELOP AND IMPLEMENT A RIF, THE EARLIEST ICC COULD BEGIN TO RIF WAS JANUARY 1985. IN ORDER TO BRING SPENDING DOWN TO THE $48 MILLION LEVEL FOR THE YEAR, AT THE BEGINNING OF THE FISCAL YEAR, ICC OFFICIALS TOLD US THEY WOULD HAVE HAD TO RIF 390 PEOPLE. ONE HUNDRED OF THESE 390 PEOPLE WOULD HAVE BEEN RIFED JUST TO COMPENSATE FOR THE COST OF SEPARATION COMPENSATION AND BENEFITS. ICC OFFICIALS BELIEVED THAT CUTTING THE AGENCY TO THIS LEVEL WOULD NOT ALLOW THE AGENCY TO CARRY OUT ITS RESPONSIBILITIES OR PROVIDE AN ACCEPTABLE LEVEL OF SERVICE.

APPENDIX II. ICC'S ACTIONS IN RESPONSE TO BUDGET CUT

UPON LEARNING THAT THE CONTINUING RESOLUTION HAD BEEN APPROVED, CHAIRMAN TAYLOR INSTRUCTED THE MANAGING DIRECTOR TO PREPARE AN ANALYSIS OF ICC'S FUNDING SITUATION AND FUNDING ALTERNATIVES FOR THE COMMISSION TO CONSIDER. THE MANAGING DIRECTOR'S MEMORANDUM OF OCTOBER 19, 1984, REPORTED THAT THE $48 MILLION APPROPRIATED WOULD FUND ONLY 860 STAFF YEARS AND NOT THE 914 FULL TIME PERMANENT (FTP) TOTAL STAFF YEARS AUTHORIZED BY THE CONFERENCE COMMITTEE REPORT.

THE MEMORANDUM STATED THAT SINCE THE ICC HAD BEGUN THE YEAR WITH A STAFF OF 1,070, IF IT WERE ONLY TO FREEZE ITS OPERATIONS AT THE THEN CURRENT LEVELS, GIVEN THE USUAL ATTRITION RATE, A MINIMUM OF 1,000 STAFF YEARS OR $53.2 MILLION, WOULD BE USED ON PERSONNEL-RELATED COSTS ALONE, NOT INCLUDING THE COMPARABILITY PAY RAISE DUE IN JANUARY 1985. THE MEMORANDUM ALSO STATED THAT NONPERSONNEL COSTS (SUCH AS SUPPLIES, RENT AND TRAVEL) COULD BE CUT FROM $13.1 MILLION TO $12 MILLION.

THE MEMORANDUM EXAMINED FIVE ALTERNATIVE FUNDING LEVELS AND HOW THEY COULD BE ACHIEVED. ALL BUT ONE OF THE ALTERNATIVES REQUIRED A SUPPLEMENTAL APPROPRIATION. THREE OF THE ALTERNATIVES WERE VIEWED BY THE MANAGING DIRECTOR AS UNACCEPTABLE AND TWO ALTERNATIVES WERE SEEN AS VIABLE. A SUMMARY OF THE FIVE ALTERNATIVES FOLLOWS:

ALTERNATIVE 1 WOULD HAVE REQUIRED A TOTAL APPROPRIATION OF $53.97 MILLION TO SUPPORT 1,022 TOTAL STAFF YEARS. THIS WAS THE PRESIDENT'S ORIGINAL REQUEST. THE MEMORANDUM REJECTED THIS ALTERNATIVE BECAUSE IT HAD ALREADY BEEN REJECTED BY HOUSE AND SENATE CONFEREES.

ALTERNATIVE 2 WOULD HAVE REQUIRED TO TOTAL APPROPRIATION OF $52.2 MILLION TO SUPPORT 975 TOTAL STAFF YEARS (940 FTP), 26 ABOVE THE 914 STAFF YEARS AUTHORIZED BUT NOT FULLY FUNDED IN THE CONFERENCE REPORT. THE ICC MANAGING DIRECTOR THOUGHT THAT THIS WAS A VIABLE OPTION.

ALTERNATIVE 3 WOULD HAVE REQUIRED $51.4 MILLION TO SUPPORT THE 949 TOTAL STAFF YEARS (914 FTP) ALLOWED BY THE CONFERENCE REPORT. THIS WAS ALSO CONSIDERED A VIABLE OPTION.

ALTERNATIVE 4 WOULD HAVE IMPLEMENTED THE COMMISSION'S FISCAL YEAR 1986 BUDGET LEVELS OF $50.88 MILLION AND 923 TOTAL STAFF YEARS IMMEDIATELY. THE OPTION WAS REJECTED BECAUSE IT WAS SEEN AS PROVIDING INSUFFICIENT RESOURCES TO MEET STATUTORY RESPONSIBILITIES, WOULD REQUIRE HASTY IMPLEMENTATION, AND WOULD CAUSE UNDUE DISRUPTION INVOLVING REDUCTIONS-IN- FORCE.

ALTERNATIVE 5 WOULD HAVE IMPLEMENTED THE FISCAL YEAR 1985 CONFERENCE COMMITTEE REPORT FUNDING LEVEL OF $48 MILLION AND REDUCED STAFFING TO 860 STAFF YEARS. THIS ALTERNATIVE WAS REJECTED BECAUSE STAFFING LEVELS WERE BELOW THOSE THE APPROPRIATIONS COMMITTEE SAID IT INTENDED AND BECAUSE IT WOULD NOT HAVE PERMITTED THE ICC TO ACCOMPLISH SERVICE AND WORK-LOAD LEVELS INTENDED BY CONGRESS, WOULD REQUIRE EXTENSIVE RIFS AND HIGH SEVERANCE PAY, UNEMPLOYMENT COMPENSATION AND TERMINAL LEAVE COSTS.

OF THE TWO ALTERNATIVES WHICH WERE SEEN AS VIABLE, ALTERNATIVE 3 WAS NOT RECOMMENDED BECAUSE IT WAS SEEN AS NOT PROVIDING SUFFICIENT RESOURCES TO ACCOMPLISH THE COMMISSION'S WORK LOAD. THE MANAGING DIRECTOR ALSO COMMENTED:

*** WHILE WE MIGHT BE ABLE TO LIVE WITH THE STAFF AND FUNDING LEVELS REFLECTED IN ALTERNATIVE 3, ENDORSING THAT OPTION MEANS CONCEDING THAT THE CONGRESS KNOWS BETTER THAN WE DO WHAT WORKLOAD WE SHOULD PROJECT AND WHAT RESOURCE NEEDS ARE. *** MEMORANDUM, OFFICE OF MANAGING DIRECTOR, OCT. 19, 1984, AT 7.

THE PREFERRED OPTION, ALTERNATIVE 2, WAS SEEN AS PROVIDING MINIMALLY ADEQUATE STAFFING TO MEET ICC WORK-LOAD REQUIREMENTS WITH A LOWER RIF RATE REQUIRED THAN WITH ALL ALTERNATIVES, EXCEPT ALTERNATIVE 1.

A FOLLOW-UP MEMORANDUM, DATED OCTOBER 23, 1985, PROPOSED AN ACTION PLAN THAT OUTLINED RIFS NECESSARY UNDER EACH OF THE ALTERNATIVES AND PROPOSED A SERIES OF NONPERSONNEL CUTS TO BE IMPLEMENTED IMMEDIATELY FOR THE ENTIRE FISCAL YEAR, INCLUDING RESTRICTIONS ON TRAVEL (FOR AN ESTIMATED SAVING OF $300,000 ANNUALLY), FREEZES ON OUTSIDE TRAINING ($130,000 SAVING) AND HIRING AND INCENTIVE AWARDS ($70,000 SAVING), REDUCTION OF LONG-DISTANCE AND OTHER TELEPHONE CHARGES ($150,000 SAVING), LIMITING USE OF OVERTIME TO EMERGENCY SITUATIONS ($70,000 SAVING), DEFERRAL OF DISCRETIONARY CONTRACT SERVICES ($280,000 SAVING), ELIMINATION OF ALL BUT ESSENTIAL DISCRETIONARY EXPENSES ($30,000 SAVING) AND REDUCTION OF SPACE NEEDS. THE ICC CHAIRMAN INFORMED US IN HIS LETTER THAT IF THESE NONPERSONNEL CUTS WERE CONTINUED FOR THE ENTIRE FISCAL YEAR, THEY WOULD REDUCE COSTS BY $2.7 MILLION. ALTHOUGH INITIALLY RECOMMENDING AGAINST IMMEDIATE FURLOUGHS SINCE THEY COULD BE USED "MOST EFFECTIVELY IN SITUATIONS WHERE THERE IS AN EMERGENCY LAPSE IN FUNDS OR A SHORTFALL OF VERY LIMITED DURATION," THE MANAGING DIRECTOR LATER CONCLUDED THAT TO STAY WITHIN THE $48 MILLION BUDGET, FURLOUGHS WOULD BE NECESSARY FOR APPROXIMATELY 30 DAYS BETWEEN MAY AND SEPTEMBER.

AT ITS OPEN MEETING ON OCTOBER 25, THE ICC COMMISSIONERS UNANIMOUSLY APPROVED ALTERNATIVE 2 AS ITS PLAN OF ACTION AS RECOMMENDED BY THE MANAGING DIRECTOR BUT ADJUSTED ITS FIGURES TO COVER AN ADDITIONAL NINE EMPLOYEES. THE COMMISSIONERS AGREED TO REQUEST A SUPPLEMENTAL APPROPRIATION OF $4.46 MILLION TO PROVIDE FOR 984 TOTAL STAFF YEARS (949 FTP), FOR A TOTAL APPROPRIATION OF $52.46 MILLION.

THROUGHOUT THE PROCEEDINGS, CONCERN WAS EXPRESSED FOR THE EFFECT THAT RIFS AND FURLOUGHS WOULD HAVE ON EMPLOYEES AND OF THE NEED TO COMPLY WITH THE ANTIDEFICIENCY ACT. MANAGING DIRECTOR FOLEY STATED THAT:

*** IT IS CRUCIAL THAT WE STAY WITHIN THE APPROPRIATION SO THAT NO VIOLATION OF THE ANTIDEFICIENCY ACT IS EXPERIENCED ANY PLACE IN THE SYSTEM. TRANSCRIPT OF ICC MEETING, OCTOBER 25, 1984, P. 11 (TRANSCRIPT).

COMMISSIONER GRADISON EMPHASIZED THE DANGERS INVOLVED IN RELYING ON THE RECEIPT OF A SUPPLEMENTAL APPROPRIATION:

IN SEEKING A SUPPLEMENTAL APPROPRIATION, WE ARE PLAYING DOUBLE OR NOTHING WITH CONGRESS. IT IS UNLIKELY THAT WE ARE GOING TO KNOW HOW CONGRESS IS GOING TO TREAT OUR REQUEST UNTIL THE FISCAL YEAR IS HALF OVER AND, IF WE DON'T RECEIVE ALL OR EVEN PART OF OUR REQUEST, THEN THE RIF ACTIONS THAT WILL BE REQUIRED NEXT SPRING WILL BE DOUBLE THOSE THAT WOULD HAVE BEEN REQUIRED *** TODAY. TRANSCRIPT AT 23.

THE CHAIRMAN SUBMITTED A FORMAL SUPPLEMENTAL REQUEST TO CONGRESS ON NOVEMBER 2, 1984, TO PROVIDE FOR STAFF AUTHORIZED IN THE CONFERENCE COMMITTEE REPORT WITH AN ADDITIONAL AMOUNT OF APPROXIMATELY $1 MILLION TO PERFORM "CRITICAL FUNCTIONS," FOR A TOTAL SUPPLEMENTAL APPROPRIATION OF $4.46 MILLION IN ACCORDANCE WITH THE OPTION APPROVED BY THE COMMISSION. HE REPORTED THAT AS MANY AS 75 EMPLOYEES WOULD HAVE TO BE INVOLUNTARILY SEPARATED BY MARCH 1985 TO BRING STAFFING DOWN FROM 1,009 TO THE 940 FULL TIME STAFF YEARS CONTEMPLATED IN THE SUPPLEMENTAL REQUEST.

AN APPORTIONMENT REQUEST WAS SUBMITTED BY THE CHAIRMAN ON THE SAME DATE TO THE DIRECTOR OF OMB, IN ACCORDANCE WITH OMB BULLETIN 85-2, REQUESTING A CATEGORY B APPORTIONMENT PROVIDING FOR THE FULL APPORTIONMENT IN THE FIRST QUARTER SO THAT EXTRA EXPENSES INVOLVED IN PREPARING FOR THE CUT IN THE ICC APPROPRIATION COULD BE MET. THE CATEGORY B APPORTIONMENT WAS REQUESTED BY CHAIRMAN TAYLOR BECAUSE:

*** THE COMMISSION NEEDS THE FLEXIBILITY TO MAKE QUICK CHANGES IN ALLOCATING ITS RESOURCES. FOR EXAMPLE, A CATEGORY B APPORTIONMENT WOULD ALLOW THE COMMISSION THE FLEXIBILITY TO CONDUCT REDUCTIONS-IN FORCE INCURRING THE ATTENDANT EXPENSES EARLIER IN THE YEAR THAN A CATEGORY A APPORTIONMENT WOULD ALLOW. ALSO, TERMINATION OF CERTAIN CONTRACTS CAN BE CONSIDERED IF THE COMMISSION HAS THE FUNDS AVAILABLE EARLY IN THE YEAR TO PAY ANTICIPATED TERMINATION COSTS. LETTER TO DAVID A. STOCKMAN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, FROM REESE H. TAYLOR, JR., CHAIRMAN, ICC, NOVEMBER 2, 1984.

THE CATEGORY B APPORTIONMENT WAS APPROVED WITHOUT CHANGE BY OMB ON NOVEMBER 9.

ACTIONS WERE CONCURRENTLY TAKEN TO REDUCE STAFFING AND NONPERSONNEL EXPENSES IN AN ACTION PLAN MEMORANDUM PREPARED BY THE MANAGING DIRECTOR IN NOVEMBER 1984, WHICH FOLLOWED THE PLAN ADOPTED BY THE COMMISSION IN ITS OCTOBER 25, 1984, CONFERENCE. ICC BEGAN SENDING OUT RIF NOTICES IN ORDER TO ACHIEVE THE STAFF-YEAR CEILING LEVELS ASSOCIATED WITH THE SUPPLEMENTAL REQUEST. THE FIRST GENERAL RIF NOTICE WAS SENT TO ALL EMPLOYEES ON NOVEMBER 7 AND SPECIFIC RIF NOTICES WERE SENT TO AFFECTED EMPLOYEES ON NOVEMBER 26 AND 29, DECEMBER 12 AND 20 AND JANUARY 15, 1985. DURING JANUARY AND FEBRUARY 1985, 38 EMPLOYEES WERE SEPARATED FROM THE ICC THROUGH RIF PROCEDURES AND 75 EMPLOYEES RESIGNED.

APPENDIX III. ICC ALTERNATIVES TO FURLOUGHS

IN ORDER FOR THE ICC COMMISSIONERS TO BE ABLE TO CONSIDER ALTERNATIVES, THE MANAGING DIRECTOR ISSUED MEMORANDUM ON JANUARY 18, 1985, DETAILING FOUR OPTIONS. ONE OPTION WAS AN ACROSS-THE-BOARD RIF OF MORE THAN 300 EMPLOYEES. TWO OTHER ALTERNATIVES, PROGRAM AND ORGANIZATIONAL CHANGES, WOULD HAVE ENTAILED RIFS, AND NEITHER ALTERNATIVE WOULD HAVE SAVED THE ICC ENOUGH MONEY TO OPERATE WITHIN ITS BUDGET. THE FOURTH ALTERNATIVE WAS FURLOUGHING ALL EMPLOYEES FOR 2 DAYS EACH PAY PERIOD.

THE PROGRAM CHANGE ALTERNATIVE SUGGESTED THAT ICC COULD STOP ALL PUBLIC ASSISTANCE AND OUTREACH PROGRAMS. UNDER THIS OPTION BOTH THE SMALL BUSINESS ASSISTANCE OFFICE AS WELL AS THE OFFICE OF THE SPECIAL COUNSEL WOULD HAVE BEEN ABOLISHED. ACTIVITIES THAT WOULD HAVE BEEN ELIMINATED INCLUDE: HANDLING COMPLAINTS, INQUIRIES, OR INTERPRETATIONS, MAKING SPEECHES, AND ASSISTING CARRIERS WITH APPLICATIONS OR DEALING WITH OTHER PROBLEMS. THE MEMORANDUM STATED THAT IF THIS OPTION WERE ADOPTED, IT WOULD SAVE APPROXIMATELY $2.5 MILLION AND 65 STAFF YEARS. THE MEMORANDUM WARNED, HOWEVER, THAT THE CONGRESS MIGHT REACT NEGATIVELY TO THESE CHANGES BECAUSE THE OFFICE OF SPECIAL COUNSEL WAS CLEARLY SUPPORTED IN THE CONTINUING RESOLUTION. IN ADDITION, THE MANAGING DIRECTOR DID NOT THINK THAT THE PUBLIC ASSISTANCE PROGRAM WAS EXPENDABLE.

ORGANIZATIONAL CHANGES THAT WERE CONSIDERED INCLUDED CLOSING ALL FIELD OFFICES EXCEPT THE SIX CURRENT REGIONAL OFFICES AND THREE SUBREGIONAL OFFICES; ABOLISHING THE OFFICE OF TRANSPORTATION ANALYSIS AND TRANSFERRING ITS STATUTORY FUNCTIONS TO THE OFFICE OF PROCEEDINGS; MERGING THE OFFICE OF THE SECRETARY WITH THE OFFICE OF THE MANAGING DIRECTOR; ABOLISHING THE BUREAU OF ACCOUNTS; AND NOT COLLECTING FINANCIAL DATA FROM CARRIERS. TERMS OF SAVINGS, THE ORGANIZATIONAL CHANGES WOULD HAVE SAVED THE AGENCY ABOUT $2.9 MILLION AND 66 STAFF YEARS. A REASON GIVEN FOR NOT ADOPTING THIS ALTERNATIVE IS THAT THE ORGANIZATIONAL CHANGES WOULD NOT BE THE RESULT OF STUDY, ANALYSIS, AND PLANNING WITH A VIEW TOWARD CREATING RATIONAL, RESPONSIVE, AND EFFICIENT WORK UNITS. INSTEAD, THE CHANGE WOULD COME ABOUT AS A RESULT OF A CRISIS ENVIRONMENT AND AS A RESULT, TIMELINESS, QUALITY, AND PRODUCTIVITY WOULD SUFFER.

ACCORDING TO THE MEMORANDUM, THE FURLOUGH PLAN HAD TWO SIGNIFICANT ADVANTAGES OVER THOSE ALTERNATIVES REQUIRING MAJOR RIFS. IT OFFERED CONTINUITY OF CURRENT FUNCTIONS. IT ALSO WAS THE ONLY OPTION OFFERING FLEXIBILITY, I.E., IF FUNDING BECAME AVAILABLE, THE FURLOUGH COULD BE DISCONTINUED. THE MEMORANDUM EXPLAINED THAT EMPLOYEES COULD NOT BE FURLOUGHED FOR AN EXTENDED PERIOD OF WORKDAYS BECAUSE IT WOULD BE DISRUPTIVE TO WORK AND THE AGENCY COULD NOT AFFORD TO PAY UNEMPLOYMENT BENEFITS FOR FURLOUGHED EMPLOYEES. THEREFORE, THE MEMORANDUM SUGGESTED THAT FURLOUGHING ALL EMPLOYEES 1 DAY EACH WEEK AND CLOSING THE OFFICE ON THAT DAY WOULD BE THE PREFERABLE ALTERNATIVE.

IN HIS RESPONSE TO OUR QUESTIONS REGARDING THE FURLOUGH, CHAIRMAN TAYLOR STATED:

WITH REGARD TO THE COMMISSION'S AVAILABLE ALTERNATIVES, WE WERE REALLY CONFRONTED WITH A HOBSON'S CHOICE OF RIFFING NEARLY 400 FULL TIME PERMANENT EMPLOYEES IN JANUARY OF 1985, WHICH WOULD HAVE PERMANENTLY CRIPPLED THE AGENCY, OR REQUESTING SUPPLEMENTAL FUNDING, SUBJECT TO THE NECESSITY OF IMPLEMENTING A FURLOUGH PLAN IF SUFFICIENT RELIEF WAS EITHER DENIED OR NOT TIMELY APPROVED BY CONGRESS. OBVIOUSLY, THE COMMISSION OPTED FOR THE SECOND ALTERNATIVE, SINCE IT REPRESENTED THE ONLY RATIONAL WAY TO AVOID SURE AND IMMEDIATE DISASTER FOR THE AGENCY. ICC-GAO LETTER 7.

THE ONLY ALTERNATIVE TYPE OF FURLOUGH DISCUSSED IN THE JANUARY 24 MEMORANDUM WAS CLOSING THE AGENCY FOR AN EXTENDED PERIOD OF WORKDAYS. THIS APPROACH WAS DEEMED UNACCEPTABLE FOR TWO REASONS: FIRST, EXTENDED, SIMULTANEOUS ABSENCES OF A SIGNIFICANT NUMBER OF EMPLOYEES WOULD BE DISRUPTIVE TO THE WORK OF INDIVIDUAL OFFICES. SECOND, THE AGENCY COULD NOT AFFORD TO PAY UNEMPLOYMENT BENEFITS FOR THE EMPLOYEES. IN OUR DISCUSSIONS WITH AGENCY OFFICIALS, THEY INDICATED THAT OTHER TYPES OF FURLOUGHING WERE CONSIDERED, BUT THESE DELIBERATIONS WERE NOT DOCUMENTED.

OTHER ALTERNATIVES TO FURLOUGHING INCLUDE EARLY RETIREMENT, VOLUNTARY PART-TIME, VOLUNTARY LEAVE WITHOUT PAY, AND SEPARATION OF TEMPORARY EMPLOYEES, INCLUDING CONSULTANTS. IN A DISCUSSION WITH THE MANAGING DIRECTOR, HE TOLD US THAT HE DID NOT LOOK INTO A VOLUNTARY FURLOUGH BECAUSE HE DID NOT BELIEVE THE AGENCY WOULD BE ABLE TO SAVE ENOUGH MONEY AND THERE WAS NOT ENOUGH TIME TO LOOK INTO THE IDEA. IN ADDITION, THE AGENCY DID NOT LOOK INTO CONVERTING PERSONNEL TO PART TIME BECAUSE NOT ENOUGH MONEY WOULD HAVE BEEN SAVED. ACCORDING TO THE CHAIRMAN IN HIS RESPONSE TO US, ONE ICC EMPLOYEE RETIRED BY VIRTUE OF OPM EARLY RETIREMENT AUTHORIZATION. AN OPM OFFICIAL TOLD US THAT OPM ENCOURAGES AGENCIES TO LOOK AT AVAILABLE ALTERNATIVES BEFORE INSTITUTING A RIF OR FURLOUGH. ADDITION, THE OPM OFFICIAL STATED THAT FURLOUGHS ARE MORE HUMANE THAN RIFS.

APPENDIX IV. THE IMPACT AND FAIRNESS OF THE ICC FURLOUGH

BECAUSE THE FURLOUGH HAD BEEN IN EFFECT ONLY ABOUT A MONTH AT THE TIME OF OUR REVIEW, AND BECAUSE OF OUR ATTEMPT TO MEET YOUR DEADLINE, WE WERE UNABLE TO MAKE AN INDEPENDENT ASSESSMENT OF THE IMPACT OF THE FURLOUGH ON ICC PROGRAMS AND PERSONNEL. ICC INITIALLY ISSUED A MEMORANDUM IN FEBRUARY 1985 ON THE EXPECTED IMPACT ON EACH OFFICE AND BUREAU OF THE COMMISSION. BASED ON OUR REQUEST TO ICC ON MAY 14, 1985, FOR ADDITIONAL INFORMATION ON THE IMPACT, BUREAU AND OFFICE DIRECTORS WERE ASKED FOR AN UPDATE ON THE EFFECT OF THE FURLOUGH ON THEIR RESPECTIVE OPERATIONS.

IN HIS LETTER TO GAO, CHAIRMAN TAYLOR DESCRIBED THE ACTUAL IMPACT OF THE FURLOUGH ON ICC PROGRAMS THROUGH EARLY MAY. PRODUCTIVITY SUFFERED FROM THE ABSENCE OF ALL EMPLOYEES FOR 1 DAY PER WEEK AND THE LOSS BY RESIGNATION OF MANY EXPERIENCED EMPLOYEES. THE CHAIRMAN REPORTED THAT BETWEEN APRIL 15, THE START OF THE FURLOUGH, AND JUNE 13, 33 FULL TIME PERMANENT EMPLOYEES RESIGNED. EACH OFFICE DIRECTOR REPORTED EMPLOYEE MORALE WAS AT AN "ALL-TIME LOW" AND EVERY BUREAU AND OFFICE HEAD REPORTED INCREASING BACKLOGS AND INABILITY TO MEET DEADLINES.

CITED AS EXAMPLES OF THE PROBLEMS CREATED BY THE FURLOUGH WAS THE FAILURE OF THE OFFICE OF GENERAL COUNSEL TO INTERPOSE A TIMELY OBJECTION TO A PRELIMINARY INJUNCTION ON MAY 6 AND THE MISSING OF A STATUTORY DEADLINE IN A MAJOR RAIL CASE ON MAY 13. THE CHAIRMAN STATED THAT "OUR GENERAL COUNSEL'S OFFICE IS NO LONGER ABLE TO PROVIDE PROMPT LEGAL ADVICE TO THE COMMISSION." ICC-GAO LETTER AT 10. ALSO, THE OFFICE OF PROCEEDINGS WAS REPORTED TO HAVE MISSED THE STATUTORY DEADLINE IN AT LEAST 12 RAIL ABANDONMENT CASES. SEE ALSO MEMORANDUM OF MARTIN E. FOLEY, MANAGING DIRECTOR TO VICE CHAIRMAN GRADISON, "IMPACT OF FURLOUGH ON WORK PROGRAMS," FEBRUARY 11, 1985, FOR AN OFFICE-BY OFFICE SUMMARY OF THE BACKLOGS AND OTHER PROBLEMS ANTICIPATED FROM A 20 PERCENT CUT IN EMPLOYEE WORKING HOURS.

IT IS DIFFICULT TO EVALUATE THE "FAIRNESS" OF THE FURLOUGH ON ALL EMPLOYEES. CONCERNS WERE EXPRESSED DURING THE OCTOBER 25 CONFERENCE OF THE COMMISSIONERS ON THE FISCAL YEAR 1985 BUDGET AND THE IMPACT THAT IT WOULD HAVE ON MINORITIES. COMMISSIONER SIMMONS REPORTED THAT 300 OF 1,055 EMPLOYEES THEN IN THE ICC WERE BLACK WITH A VERY SMALL NUMBER OF INDIANS, ASIANS AND HISPANICS AND THAT 90 PERCENT OF THE BLACKS WERE AT OR BELOW GS -12 LEVEL WITH 70 PERCENT OF CAUCASIANS AT OR ABOVE THE GS 12 LEVEL. SEE CONFERENCE TRANSCRIPT AT 45. SINCE MANY OF THE LOWER GRADE EMPLOYEES LACK THE NECESSARY SENIORITY TO WITHSTAND AN EXTENSIVE RIF, THEY WOULD BE AMONG THE FIRST TO BE SEPARATED FROM THE COMMISSION. BECAUSE PERSONS AT LOWER GRADE LEVELS MAY NOT BE ABLE TO MAINTAIN THE SAVINGS AND INVESTMENT LEVELS OF HIGHER GRADE EMPLOYEES, THEY COULD ALSO BE MORE SEVERELY AFFECTED BY FURLOUGHS. COMMISSIONER STRENIO OBSERVED THAT THERE WOULD BE AN "UNFAIRLY HEAVY IMPACT ON MINORITIES OF WHATEVER ACTIONS WE TAKE." TRANSCRIPT AT 46 -47. IT IS ARGUABLE THAT THE FURLOUGHS OF ALL EMPLOYEES WERE THE FAIREST ALTERNATIVE BECAUSE THEY REDUCED THE NUMBER OF RIFS AND ENABLED ALL EMPLOYEES TO SHARE THE BURDEN AND MOST TO RETAIN THEIR JOBS. CHAIRMAN TAYLOR OBSERVED:

AS TO THE MATTER OF FAIRNESS, I THINK IT IS EXTREMELY UNFAIR THAT OUR EMPLOYEES HAVE BEEN OBLIGED TO TAKE A TWENTY PERCENT PAY CUT SIMPLY BECAUSE CONGRESS HAS BEEN UNABLE TO TIMELY ACT UPON OUR SUPPLEMENTAL REQUEST-- A CIRCUMSTANCE OVER WHICH NEITHER OUR EMPLOYEES NOR THE COMMISSION HAS HAD ANY CONTROL. HOWEVER, I CONTINUE TO BELIEVE THAT IT IS FAIRER FOR ALL OF OUR EMPLOYEES TO HAVE SHARED EQUALLY IN THIS BURDEN THAN FOR NEARLY 40 PERCENT OF THEM TO HAVE BEEN RIF'D RIGHT AFTER THE CHRISTMAS SEASON BECAUSE OF A WOEFULLY INADEQUATE CONGRESSIONAL APPROPRIATION. ICC- GAO LETTER AT 9.

IN CONCLUSION, GIVEN THE ALTERNATIVES THAT APPEAR TO HAVE BEEN AVAILABLE TO THE ICC, THE FURLOUGH, WHILE CAUSING FINANCIAL HARDSHIP TO ALL EMPLOYEES AND CREATING SERIOUS BACKLOGS, MISSED DEADLINES AND REDUCED EFFICIENCY, DID PRESERVE MORE JOBS THAN MIGHT HAVE BEEN OTHERWISE POSSIBLE AND DID ENABLE THE ICC TO RETAIN THE PRESENT ORGANIZATIONAL STRUCTURE SO THAT SERVICES COULD BE CONTINUED EVEN IF AT A REDUCED LEVEL.

/1/ THE ACT PERMITS AN AGENCY TO REQUEST, AND THE APPORTIONING OFFICIAL TO GRANT, AN APPORTIONMENT, INDICATING THE NEED FOR A SUPPLEMENTAL APPROPRIATION ONLY WHEN LEGISLATION IS ENACTED AFTER THE SUBMISSION OF A REQUEST FOR APPROPRIATIONS WHICH REQUIRES AN EXPENDITURE BEYOND THE AGENCIES' CONTROL, OR IN CERTAIN EMERGENCIES. 31 U.S.C. SEC. 1515(B). NEITHER OF THESE EXCEPTIONS APPLIES TO THE ICC'S SITUATION IN THE CURRENT FISCAL YEAR.

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