B-223833, Nov 5, 1987
B-223833: Nov 5, 1987
Survey was performed in-house by Agriculture personnel in October 1984. Cost was charged to Labor's FY 1984 appropriations. Since work was performed in FY 1985. Labor should have deobligated FY 1984 funds and charged cost to FY 1985 appropriations. Your letter expressed concern that DOL/ETA may have "diverted" Job Training Partnership Act (JTPA) /1/ funds to pay for the wage survey. We understand that the wage survey was conducted in-house by USDA personnel during the month of October 1984. Our response considers first whether the expenditure was proper under DOL/ETA's 1984 Appropriation Act. Whether the transfer of funds pursuant to the interagency agreement was in compliance with the Economy Act.
B-223833, Nov 5, 1987
APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriation Availability - Purpose Availability - Necessary Expenses Rule DIGEST: 1. Funding of wage survey may be properly considered a necessary expense in achieving the objectives authorized under FY 1984 Program Administration appropriation for Labor Department's Employment and Training Administration. APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriation Availability - Time Availability - Time Restrictions - Fiscal-year Appropriation 2. Labor Department entered into Economy Act agreement with Agriculture Department in September 1984 for latter to perform farm wage survey. Survey was performed in-house by Agriculture personnel in October 1984. Cost was charged to Labor's FY 1984 appropriations. Under 31 U.S.C. Sec. 1535(d), since work was performed in FY 1985, Labor should have deobligated FY 1984 funds and charged cost to FY 1985 appropriations.
This responds to your letter of May 30, 1986, co-signed by The Honorable William D. Ford, asking our Office to review an expenditure of $300,000 by the Employment and Training Administration (ETA), Department of Labor (DOL), for a quarterly farm wage survey conducted by the U.S. Department of Agriculture (USDA) in October 1984. Your letter expressed concern that DOL/ETA may have "diverted" Job Training Partnership Act (JTPA) /1/ funds to pay for the wage survey.
DOL/ETA and USDA entered into interagency agreement No. 58-319T-4 00277, approved by the Deputy Assistant Secretary of Labor on September 25, 1984. Under this agreement, DOL/ETA transferred $300,000 from its fiscal year 1984 "Program Administration" account to USDA in return for USDA's performance of a farm wage survey. We understand that the wage survey was conducted in-house by USDA personnel during the month of October 1984.
Our response considers first whether the expenditure was proper under DOL/ETA's 1984 Appropriation Act, Pub. L. No. 98-139, 97 Stat. 871 (1983), and second, whether the transfer of funds pursuant to the interagency agreement was in compliance with the Economy Act, 31 U.S.C. Sec. 1535. conclude that the funds used by DOL/ETA were available for the purpose of funding an interagency agreement to conduct the wage survey; however, it appears that certain provisions of the Economy Act were violated.
Availability of Funds to Conduct Wage Survey
Prior to 1981, USDA conducted quarterly farm wage surveys under the authority of 7 U.S.C. Sec. 1622. DOL used this data for various purposes, for example, to make wage rate determinations required by section 212(a)(14) of the Immigration and Nationality Act, as amended, 8 U.S.C. Sec. 1182(a)(14). In 1981, USDA discontinued the surveys, apparently for budgetary reasons. DOL then turned to other sources for the data it needed. Finding these other sources unsatisfactory, DOL agreed to share the funding for a survey to be conducted by USDA in the fall of 1984. 1985, USDA resumed its performance and funding of the wage surveys.
In DOL/ETA's Appropriation Act for fiscal year 1984 under the heading "Program Administration," Congress provided:
"For expenses of administering employment and training programs, $82,739,000, together with not to exceed $35,828,000 which may be expended from the Employment Security Administration account in the Unemployment Trust Fund."
It has long been settled that an appropriation is available for items not expressly provided for, if those items are reasonably related to carrying out the purpose of the appropriation and are not otherwise prohibited. See, e.g., 63 Comp.Gen. 422, 427-28 (1984). It is, in our opinion, within the legitimate range of DOL's discretion to determine that a wage survey would materially contribute to fulfilling the objectives of an appropriation for "administering employment and training programs." Accordingly, we believe DOL's expenditure of Program Administration funds for that purpose was permissible.
The Program Administration appropriation consists of two elements: an appropriation of general revenue funds and an appropriation of funds from the Unemployment Trust Fund. The legislative history explains the appropriation as follows:
"This activity provides for the Federal administration of employment and training programs. The appropriation contains both general revenue and trust funds. General revenue funds are used to pay basic Federal staff costs associated with the direction and operation of programs authorized under the Job Training Partnership Act (JTPA). The unemployment trust fund provides for Federal staff costs related to administration of employment service and unemployment insurance service activities." Rep. No. 98-247, page 7 (1983).
"General funds provide for the Federal staff to administer employment and training programs under the Job Training Partnership Act, and to carry out promotional activities under the National Apprenticeship Act. Trust funds provide for Federal administration of employment security functions under the Social Security and Wagner Peyser Acts." H.R. Rep. No. 98-357, pages 7-8 (1983).
DOL has informally advised us that the survey in question was charged to the general fund portion of the appropriation. The questioned "diversion" of JTPA funds, as suggested in your letter, appears based on the assumption that the cost of the wage survey was more properly chargeable to the trust fund portion of the appropriation rather than to the general revenue portion.
In our view, the appropriation act itself permits expenditure of the general revenue portion of the account for any and all expenses permissible under the appropriation. The statute appropriated, "for expenses of administering employment and training programs," a specified amount of general revenue funds, "together with" an additional amount to be derived from the trust fund. It has been recognized both by this Office and by the courts that restrictions on the availability of an appropriation contained in the legislative history are not legally binding unless specified in the appropriation act itself. E.g., International Union, United Automobile Workers v. Donovan, 746 F.2d 855 (D.C. Cir. 1984); 55 Comp.Gen. 307 (1975). Thus, since the wage survey was a permissible object under the Program Administration appropriation, and since nothing in the language of that appropriation restricted the general fund portion to JTPA activities (even if we were to assume that the wage survey would not be a valid administrative expense under the JTPA), charging the survey to the general fund portion was not an illegal diversion of funds.
Economy Act Restrictions
Notwithstanding our conclusion above, we believe that DOL/ETA violated certain provisions of the Economy Act, 31 U.S.C. Sec. 1535 (1982). This law provides that the head of an agency may place an order with another agency for goods or services if the conditions established in section 1535(a) are met. We were advised that the required conditions were met in this instance, and therefore, the agreement itself appears to have been appropriate. However, the Economy Act also places a restriction on an agency's authority to carry funds over from one fiscal year to the next. Specifically, 31 U.S.C. Sec. 1535(d) states:
"An order placed or agreement made under this section obligates an appropriation of the ordering agency or unit. The amount obligated is deobligated to the extent that the agency or unit filling the order has not incurred obligations, before the end of the period of availability of the appropriation, in--
"(1) providing goods or services; or
"(2) making an authorized contract with another person to provide the requested goods or services." /2/
As noted earlier, it appears that USDA personnel performed the word of conducting the wage survey in October 1984, that is, after the beginning of fiscal year 1985. Further, since the agreement was not approved by both agencies until September 25, 1984, DOL/ETA could not have reasonably expected the work to be performed before the end of the fiscal year. Nonetheless, DOL/ETA transferred the $300,000 of fiscal year 1984 funds pursuant to the interagency agreement.
Under the provisions of 31 U.S.C. Sec. 1535(d), we believe the funds should have been deobligated at the end of fiscal year 1984 to the extent that USDA had neither provided the services called for by the agreement nor contracted with a third party to provide those services. Since the work was performed entirely in fiscal year 1985, the payment should have been charged to FY 1985 appropriations. 31 Comp.Gen. 83 (1951). Since DOL/ETA paid the funds over to USDA rather than deobligating them as required, we conclude the provisions of the Economy Act were violated.
To summarize, we believe the DOL/ETA funds were available for the purpose of conducting the wage survey, and that there was no illegal diversion of JTPA funds. Further, it appears that the agreement itself was permissible under the Economy Act. Nonetheless, under the provisions of that Act, the funds should have been deobligated rather than transferred at the end of FY 1984, to the extent that USDA had not incurred valid obligations against them, and the expense charged to FY 1985 funds.
We trust this responds to your request.
/1/ Pub. L. No. 97-300 96 Stat. 1324 et seq. (1982), 29 U.S.C. Secs. 1501 et seq.
/2/ The deobligation requirement of 31 U.S.C. Sec. 1535(d) applies only to transactions conducted under the authority of the Economy Act. regard the agreement in this case as an Economy Act transaction since our discussions with DOL failed to disclose any other statutory basis.