State Reimbursement for Costs Incurred in Enforcement of Surface Mining Control and Reclamation Act of 1977

A certifying officer of the Office of Surface Mining (OSM) requested a GAO decision concerning payment of certain costs incurred by the Ohio Department of Natural Resources in carrying out provisions of the Surface Mining Control and Reclamation Act of 1977. According to the certifying officer, OSM issued the State an interim regulatory grant. After the grant period ended, an audit disclosed that the State had incurred $490,640 in grant costs. The auditors found that all of these costs were eligible for reimbursement under the program, but questioned costs in excess of the $120,098 award and costs of $62,404 where the grantee had exceeded its approved budget flexibility without prior OSM approval. The issue in this case is whether or not a State can be reimbursed for incurred interim program allowable costs which are in excess of the total funds specified in the grant agreement. GAO held that, under the Act, the Secretary of the Interior is authorized to reimburse States for interim enforcement program costs not covered in prior grant awards as long as payments are from currently available appropriations. A budget change to allow grant costs questioned soley because they exceed the condition on budget flexibility may be allowed under the existing obligation where a change does not affect the purpose or scope of the grant award. Payment may be made in accordance with the regulations established for this program.