B-129401, NOVEMBER 9, 1956, 36 COMP. GEN. 386

B-129401, NOVEMBER 9, 1956, 36 COMP. GEN. 386

APPROPRIATIONS - AVAILABILITY - USE OF SPECIFIC APPROPRIATIONS FOR OBJECTS OTHER THAN SPECIFIED THE USE OF A SPECIFIC APPROPRIATION FOR ONE PROGRAM TO PAY OBLIGATIONS UNDER ANOTHER PROGRAM DURING A TEMPORARY EXHAUSTION OF FUNDS IS IN CONTRAVENTION OF 31 U.S.C. 628, WHICH REQUIRES APPROPRIATIONS TO BE USED ONLY FOR THE OBJECTS FOR WHICH MADE, EVEN THOUGH REPAYMENT OF THE APPROPRIATION IS CONTEMPLATED AFTER SUPPLEMENTAL APPROPRIATIONS ARE MADE. THE PROVISO IN A 1923 RURAL ROAD CONSTRUCTION APPROPRIATION, 23 U.S.C. 45, WHICH AUTHORIZES THE USE OF APPROPRIATIONS TO LIQUIDATE PRIOR OBLIGATIONS BY THE APPROVAL OF A PROJECT, WHEN CONSIDERED WITH THE SPECIFIC AUTHORIZATIONS AND APPROPRIATIONS WHICH ARE MADE FOR FOREST HIGHWAYS, PUBLIC LANDS HIGHWAYS, AND FEDERAL-AID HIGHWAYS MAY NOT BE REGARDED AS AUTHORITY FOR THE TEMPORARY USE OF FEDERAL-AID HIGHWAY APPROPRIATIONS TO LIQUIDATE OBLIGATIONS UNDER THE FOREST HIGHWAY AND THE PUBLIC LANDS HIGHWAY PROGRAMS PENDING THE PASSAGE OF SUPPLEMENTAL APPROPRIATIONS FOR SUCH PROGRAMS.

TO THE SECRETARY OF COMMERCE, NOVEMBER 9, 1956:

BY LETTER OF DECEMBER 22, 1955, B-118653, THE CIVIL ACCOUNTING AND AUDITING DIVISION OF OUR OFFICE TRANSMITTED TO THE COMMISSIONER, BUREAU OF PUBLIC ROADS, A REPORT ENTITLED " REPORT ON REVIEW OF ACTIVITIES OF DIVISION 8--- PORTLAND, OREGON, BUREAU OF PUBLIC ROADS, DEPARTMENT OF COMMERCE, 1955.' AT PAGES 21 AND 22 OF THE REPORT ATTENTION WAS DIRECTED TO THE IMPROPER FINANCIAL PRACTICE OF THE BUREAU'S USE DURING FISCAL YEAR 1955 OF THE FEDERAL-AID HIGHWAY APPROPRIATION TO LIQUIDATE OBLIGATIONS AMOUNTING TO $2,603,386 INCURRED UNDER FOREST HIGHWAY AND PUBLIC LANDS HIGHWAY AUTHORIZATIONS. AS REPORTED THEREIN, THIS FINANCING ARRANGEMENT WAS USED BY THE BUREAU PENDING PASSAGE OF THE SECOND SUPPLEMENTAL APPROPRIATION ACT, 1955, 69 STAT. 28, WHICH MADE ADDITIONAL FUNDS AVAILABLE FOR ALL THREE OF THESE HIGHWAY PROGRAMS. REPAYMENTS WERE MADE TO THE FEDERAL-AID HIGHWAY FUND SUBSEQUENT TO ENACTMENT OF THE CITED APPROPRIATION ACT. IT WAS POINTED OUT THAT SUCH PRACTICE APPEARED TO BE IN CONTRAVENTION OF SECTION 3678 OF THE REVISED STATUTES, 31 U.S.C. 628, WHICH PROVIDES THAT APPROPRIATIONS ARE AVAILABLE ONLY FOR THE OBJECTS FOR WHICH MADE AND NO OTHERS. IT WAS, THEREFORE, RECOMMENDED IN THE REPORT THAT THE BUREAU DISCONTINUE THE IMPROPER PRACTICE OF USING APPROPRIATED FUNDS ON HAND TO LIQUIDATE OBLIGATIONS OF OTHER PROGRAMS FOR WHICH THERE IS A TEMPORARY SHORTAGE OF FUNDS.

THE COMMISSIONER OF PUBLIC ROADS, BY LETTER DATED AUGUST 14, 1956, TRANSMITTED THE COMMENTS OF THE BUREAU REGARDING THE SUBJECT AUDIT REPORT, AND WITH REFERENCE TO THE MATTER HERE INVOLVED, IT WAS STATED, IN PART, AS FOLLOWS:

THE REPORT TAKES EXCEPTION TO THE USE OF REGULAR FEDERAL AID APPROPRIATIONS TO LIQUIDATE OBLIGATIONS CREATED UNDER THE FOREST HIGHWAY AND PUBLIC LANDS HIGHWAY PROGRAMS. THE CONDITION RECITED OCCURRED DURING A TEMPORARY SHORTAGE OF FOREST HIGHWAY AND PUBLIC LANDS FUNDS. IT IS REPORTED THAT THIS METHOD OF FINANCING APPEARS IN CONTRAVENTION TO SECTION 3678 OF THE REVISED STATUTES (31 U.S.C.628) WHICH PROVIDES THAT APPROPRIATIONS ARE AVAILABLE ONLY FOR THE OBJECTS FOR WHICH MADE AND NO OTHERS.

UNDER DATE OF OCTOBER 7, 1943, YOUR OFFICE REQUESTED A REFERENCE TO THE STATUTORY AUTHORITY FOR ACTION OF A SIMILAR NATURE TAKEN BY THIS BUREAU. OUR REPLY OF OCTOBER 29, 1943, FURNISHED THE REFERENCE AND A COPY OF THE CORRESPONDENCE, EXHIBIT A, IS ATTACHED FOR YOUR CONVENIENCE.

THE CURRENT REPORT IS THE FIRST INDICATION THAT WE HAVE HAD THAT THE GENERAL ACCOUNTING OFFICE CONSIDERS THIS FINANCIAL PRACTICE "IMPROPER.'

WHILE THE REFERENCE CORRESPONDENCE CONCERNS A SIMILAR ACTION IN WHICH AN INQUIRY WAS RAISED BY OUR FORMER ACCOUNTING AND BOOKKEEPING DIVISION, IT DOES NOT FOLLOW THAT THE FINANCIAL PRACTICE, WHICH HAS AGAIN COME TO OUR ATTENTION, IS PROPER.

IT HAS BEEN THE LEGISLATIVE PRACTICE FOR A NUMBER OF YEARS TO AUTHORIZE, IN FEDERAL-AID HIGHWAY LEGISLATION, APPROPRIATIONS IN STATED AMOUNTS FOR FUTURE DESIGNATED FISCAL YEARS TO CARRY OUT THE RESPECTIVE HIGHWAY PROGRAMS. THE APPROPRIATIONS, WHEN MADE, ARE RELATED TO THE AUTHORIZATIONS AND TO THE PARTICULAR PROGRAM. SECTION 6 OF THE FEDERAL AID HIGHWAY ACT OF 1954, 68 STAT. 73, 16 U.S.C. 460C NOTE, PROVIDED CONTRACT AUTHORITY FOR FISCAL YEAR 1955 FOREST HIGHWAYS AND PUBLIC LANDS HIGHWAYS AUTHORIZATIONS. THE SHORTAGE OF FUNDS IN THESE PROGRAMS, AND FOR WHICH THE FEDERAL-AID HIGHWAY APPROPRIATION WAS APPARENTLY USED TO TEMPORARILY SUPPLEMENT, APPEARS TO HAVE BEEN A DIRECT RESULT OF THIS CONTRACT AUTHORIZATION AS INDICATED IN THE JUSTIFICATION FOR FUNDS SUPPLIED BY THE SECOND SUPPLEMENTAL APPROPRIATION ACT, 1955.

THE STATUTORY REFERENCE ADMINISTRATIVELY RELIED UPON AS AUTHORITY FOR THE FINANCIAL PRACTICE AS DISCLOSED IN OUR AUDIT IS THE SECOND PROVISO OF THE APPROPRIATION LANGUAGE APPEARING UNDER THE HEADING " COOPERATIVE CONSTRUCTION OF RURAL POST ROADS" IN THE SECOND DEFICIENCY ACT, FISCAL YEAR 1923, 42 STAT. 1157, 23 U.S.C. 45, WHICH PROVIDES " THAT THE APPROPRIATIONS HERETOFORE AND HEREAFTER MADE FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF SUCH ACT OF JULY 11, 1916, AND THE ACTS AMENDATORY THEREOF AND SUPPLEMENTAL THERETO SHALL BE CONSIDERED AVAILABLE FOR THE PURPOSE OF DISCHARGING THE OBLIGATIONS CREATED BY THE APPROVAL OF PROJECTS.' WHILE UNDER THIS PROVISO, AN APPROPRIATION WHEN MADE WOULD APPEAR TO BE AVAILABLE TO LIQUIDATE OBLIGATIONS INCURRED PRIOR THERETO BY THE APPROVAL OF A PROJECT, SUCH PROVISO, WHEN CONSIDERED IN THE LIGHT OF SEPARATE AUTHORIZATIONS AND APPROPRIATIONS BEING PROVIDED FOR EACH PROGRAM, IS NOT VIEWED HERE AS AUTHORITY FOR THE TEMPORARY USE OF ONE PROGRAM'S APPROPRIATION FOR LIQUIDATING OBLIGATIONS INCURRED UNDER AN AUTHORIZATION PROVIDED FOR ANOTHER PROGRAM.

PROCEDURES SUCH AS DISCLOSED IN OUR AUDIT REPORT HAVE CONSISTENTLY BEEN REGARDED AS CONTRAVENING THE ACCOUNTING PRINCIPLE THAT, IN CONSEQUENCE OF SECTION 3678, REVISED STATUTES, PUBLIC EXPENDITURES ARE REQUIRED TO BE CHARGED DIRECTLY TO THE FUNDS WHICH ARE PROVIDED FOR THEM AND NOT TO SOME OTHER FUNDS WITH THE HOPE OR EXPECTANCY OF A SUBSEQUENT ADJUSTMENT. COMP. GEN. 103, 19 ID. 395. ACCORDINGLY, AND SINCE THE STATUTORY REFERENCE ADMINISTRATIVELY CITED AS AUTHORITY IS NOT DEEMED APPLICABLE TO SITUATIONS SUCH AS HERE INVOLVED, THE BUREAU'S PRACTICE OF CHARGING THE WRONG APPROPRIATION WITH THE INTENTION TO THEREAFTER EFFECT AN ADJUSTMENT OF APPROPRIATIONS SHOULD BE DISCONTINUED.