B-223608, Dec 19, 1988

B-223608, Dec 19, 1988

APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriation Availaibility - Purpose availability - Necessary expenses rule - Publicity/propaganda - Safety programs DIGEST: 1. Corps of Engineers district has proposed using appropriated funds to purchase plastic ice scrapers imprinted with safety slogan, costing less than $1 each, to be distributed to employees as promotional material. Although Corps is required by law to establish and maintain safety promotional programs, the Corps has failed on the record of this case to connect the promotional material imprinted on the ice scraper with the purposes of the Occupational Safety and Health Act. APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriation Availability - Purpose availability - Necessary expenses rule - Awards/honoraria 2. GAO is aware of no authority to distribute merchandise items such as clock radios and tricycles as awards for safe job performance, as they are authorized neither by Army safety program regulations nor by Government Employees Incentive Awards Act. Office of Personnel Management, which has statutory authority to implement Incentive Awards Act, prohibits use of merchandise prizes. MISCELLANEOUS TOPICS - Federal - Administrative/Legislative Matters Administrative agencies - Advisory opinions - GAO procedures - Evidence 3. The original voucher need no longer be submitted along with a request for an advance decision. A photocopy of the voucher will be sufficient, with the original to be retained by the appropriate finance office.

Implementation of Army Safety Program:

We have been asked by the disbursing officers of two U.S. Army Corps of Engineers districts to review the propriety of certain proposed expenditures in support of the Army's safety program. The cases have been consolidated in this decision at the Army's request. As explained below, we conclude that neither the proposed promotional expenditures nor the awards expenditures are authorized under applicable statutes and regulations.

FACTS

In one case, the Huntsville (Alabama) division of the Corps of Engineers purchased 500 plastic ice scrapers, costing less than $1 each, which were distributed to Huntsville employees. Each scraper was imprinted with the inscription "U.S. Army Corps of Engineers - Huntsville Division - Please don't drink and drive." The Huntsville Safety Office views the scrapers as "promotional material" in support of the division's safety program. The intent is "for the employee to take mental note of the promotional statement" when using the scraper.

The second case involves the Walla Walla (Washington) Safety Awards Program. According to the summary provided to us by the Portland District Disbursing Officer, the program is designed to recognize individuals for safe job performance. Employees selected for award are permitted to select merchandise items, the value of which is predetermined by local policy, from an awards catalogue. The items are then purchased and distributed at an annual awards ceremony.

Items selected by employees have included "clock radios, knives, ice cream freezers, cookware, a bug killer, a shotgun case and a tricycle." With few exceptions, the items on the vouchers submitted to us cost less than $30 each. In one instance, according to the Disbursing Officer, "awards" of this nature were given to more than 80 percent of the total work force at a particular project.

The Walla Walla District's justification is similar to Huntsville's. "Each time the award is used," according to a district policy statement, "it is connected to the District Accident Prevention program." We are told that employee morale in the Walla Walla District is at an all-time high, and that the merchandise awards have greatly increased employee interest in the safety program.

DISCUSSION

1. Safety Program: Statutory and Regulatory Basis

Federal departments and agencies are required by several provisions of law to establish and maintain safety programs. Section 19(a) of the Occupation Safety and Health Act of 1970, 29 U.S.C. Sec. 668(a) provides: "It shall be the responsibility of the head of each Federal agency to establish and maintain an effective and comprehensive occupational safety and health program. ..."

In addition, 5 U.S.C. Sec. 7902(d) provides:

"The head of each agency shall develop and support organized safety promotion to reduce accidents and injuries among employees of his agency, encourage safe practices, and eliminate work hazards and health risks."

Within the Department of Defense and more specifically the Department of the Army and the Corps of Engineers, the safety program is implemented by a variety of regulations and directives. For example, Army Regulation (AR) 385-10, February 1, 1979, entitled "The Army Safety Program," provides in paragraph 5-7:

"Department of the Army policy is to recognize outstanding effort and achievement in preventing accidents. All commanders will recognize their subordinate commands, installations, activities, and individuals when significant contributions are made to individuals efficiency, economy, or improvement of Army operations through accident prevention. Awards will be made to individuals and units based on their total safety record."

AR 672-74 (Army Accident Prevention Awards Program), May 15, 1982, provides further guidance. While it clearly contemplates awards primarily of an honorary nature, such as certificates, its also provides that commanders "may use in-house awards in lieu of, or in addition to" the honorary award (para. 8), and that "other safety awards may be planned and designed in-house or procured locally" (para. 7c).

2. The Huntsville Purchase

As noted above, the Army is required by law to have and promote a safety program. Promotion is an essential element of the program if it is to achieve maximum effectiveness. The Huntsville Safety Office believes that distribution of the ice scrapers, the cost of which is nominal, will enhance safety awareness.

From an appropriations perspective, the question is one of availability of the Army's appropriated funds for this purpose. Appropriated funds may be used only for their intended purposes. 31 U.S.C. Sec. 1301(a). Where a given expenditure is neither specifically provided for nor prohibited, the question is whether it bears a reasonable relationship to fulfilling an authorized purpose or function of the agency. E.g., 66 Comp.Gen. **** (B-226065, March 23, 1987). This, in the first instance, is a matter of agency discretion. When we review an expenditure with reference to its availability for the purpose at issue, the question is not whether we would have exercised that discretion in the same manner. Rather, the question is whether the expenditure falls within the agency's legitimate range of discretion, or whether its relationship to an authorized purpose or function is so attenuated as to take it beyond that range. As we have recognized in the past, whether appropriated funds are available for a particular purpose must be evaluated in light of the specific circumstances and statutory authorities involved. 65 Comp.Gen. 738, 740 (1986). In this case, the Army has failed to establish a connection between the ice scrapers and the purposes of the Act such that the scrapers can be considered essential to the carrying out of these purposes. See B-193769, January 24, 1979. The record we have supplies no information other than the bare fact that the scrapers with the message written on them were distributed. The record does not indicate how, if at all, the imprinted ice scraper addresses an occupational health and safety hazard not shared by the public as a whole. Therefore, the Huntsville promotional program is unjustified as presented to us.

However, noting that the supplier of the ice scrapers performed in good faith, that it is now impossible to return the scrapers and that the amount at issue is nominal, we would not object to payment of the voucher in this particular case.

3. The Walla Walla Purchases

Again, the starting point is the statutory duty to establish and maintain a safety program. The Army has determined that an awards program is a legitimate and significant element of its safety program (AR 385-10 and 672-74, cited earlier), and we have no reason to disagree. However, nothing in the regulations we reviewed authorizes the distribution of merchandise. As noted above, the regulations clearly seem to contemplate honorary types of awards, such as plaques or framed certificates. The reference in the Army regulation to local procurement is, we think, to be construed in this context.

The only other possible source of authority we are aware of is the Government Employees Incentive Awards Act, 5 U.S.C. Secs. 4501-4514 (1982), mentioned in some of the documents submitted to us. The Act gives the Office of Personnel Management (OPM) authority to issue implementing regulations. 5 U.S.C. Sec. 4506 (1982). While the Act authorizes cash awards and certain types of non-cash honorary awards, it does not authorize merchandise awards. OPM's guidance, while recognizing the use of merchandise catalogues for limited purposes such as demonstrating the potential value of a cash award, explicitly states that "merchandise prizes can not be granted in lieu of cash." Federal Personnel Manual, chapter 451, para. 7-5 (Inst. 265 August 14, 1981). See also 5 C.F.R. Sec. 451.103 which defines "non-monetary award" to mean "a medal, certificate, plaque, citation, badge, or other similar item that has an award or honor connotation." Since we have neither reason nor basis to question OPM's position, we must conclude that the Walla Walla program is unauthorized.

Having said this, however, we also note that the supplier of the merchandise performed in good faith, and that the items have been distributed, are presumably being used by the recipients, and thus cannot be returned. Under these circumstances, we would not object to payment of the vouchers in this particular case.

As a final note, the Disbursing Officer notes that there is no mechanism for reporting the value of these awards to the Internal Revenue Service (IRS). Any questions as to the tax treatment of these or any other awards should be directed to the IRS.

SUBMISSION OF ORIGINAL VOUCHERS

In the early decades of GAO's existence, we required a request for an advance decision to be accompanied by the original voucher in question, and in some cases even refused to consider the question if that requirement was not met. E.g., 21 Comp.Gen. 1128 (1942). Although we have long since stopped insisting on the submission of original vouchers (or related invoices), the decisions are still on the books, and we recognize the efforts to comply, as was done in both of the instant cases. (The vouchers and invoices are being returned to the respective finance offices with copies of this decision.)

Consistent with our current practice, submission of the original voucher need not accompany the request for an advance decision. Accordingly, in the future, the original voucher should be retained in the appropriate finance office. A photocopy accompanying the request for decision will be sufficient. Language to the contrary in prior decisions may be disregarded.