GAO-16-464SP, Principles of Federal Appropriations Law: Fourth Edition, Chapter 2

This document, in conjunction with GAO, Principles of Federal Appropriations

Law, 4

ed., 2016 rev., ch. 1, GAO-16-463SP (Washington, D.C.: Mar. 2016),

supersedes chapters 1, 2, and 3 of GAO, Principles of Federal Appropriations

Law, 3

ed., GAO-04-261SP (Washington, D.C.: Jan. 2004). Chapters 4 through

15 of the third edition of Principles of Federal Appropriations Law, in conjunction

with GAO, Principles of Federal Appropriations Law: Annual Update to the Third

Edition, GAO-15-303SP (Washington, D.C.: Mar. 2015), remain the most

currently available material on the topics discussed therein. Both Principles and

the Annual Update to the Third Edition are available at

www.gao.gov/legal/redbook/redbook.html.

PRINCIPLES OF

FEDERAL

APPROPRIATIONS

LAW

Chapter 2

The Legal Framework

Fourth Edition

2016 Revision

Office of the General Counsel

GAO-16-464SP

United States Government Accountability Office

Page i GAO-16-464SP

Chapter 2 The Legal Framework 2-1

A. Appropriations and Related Terminology 2-1

1. Budget Authority: Authority to Obligate 2-1

2. Appropriations: Authority to Draw Money from the Treasury 2-3

3. Contract Authority: Obligations in Advance of Appropriations 2-4

4. Offsetting Collections: Authority to Obligate Funds Collected 2-5

5. Borrowing Authority: Incurring Obligations Against Borrowed

Amounts 2-6

6. Loan and Loan Guarantee Authority 2-8

7. Reappropriation 2-9

8. Classifications of Budget Authority 2-9

a. Classification Based on Duration 2-9

b. Classification Based on Presence or Absence of Monetary

Limit 2-10

c. Classification Based on Permanency 2-10

d. Classification Based on Availability for New Obligations 2-10

B. The Budget and Appropriations Process 2-11

1. Historical Perspective 2-11

2. Executive Budgeting: the Budget and Accounting Act, 1921 2-15

3. Congressional Budgeting: the Congressional Budget

Act of 1974 2-16

4. Appropriations: the Enactment of Budget Authority 2-17

a. The Legislative Process 2-17

b. Points of Order 2-19

c. Incorporation by Reference 2-21

d. What Constitutes an Appropriation 2-22

5. Budget Execution: the Obligation and Expenditure of Budget

Authority 2-27

a. Making Amounts Available for Obligation: Apportionment and

Allotment 2-27

b. Audits and Financial Management 2-28

c. Account Closing 2-29

6. Administrative Discretion 2-30

a. Failure or Refusal to Exercise Discretion 2-32

b. Regulations May Limit Discretion 2-34

c. Insufficient Funds 2-36

7. Transfer and Reprogramming 2-38

a. Transfer 2-38

b. Reprogramming 2-43

8. Impoundment: Precluding the Obligation or Expenditure of Budget

Authority 2-47

Contents

Page ii GAO-16-464SP

9. Deficit Reduction: the Balanced Budget and Emergency Deficit

Control Act 2-51

C. Authorizations versus Appropriations 2-54

1. Distinction between Authorization and Appropriation 2-54

2. Specific Problem Areas and the Resolution of Conflicts 2-56

a. Introduction 2-57

b. Variations in Amount 2-61

c. Variations in Purpose 2-65

d. Period of Availability 2-66

e. Authorization Enacted After Appropriation 2-69

f. Two Statutes Enacted on Same Day 2-71

g. Ratification by Appropriation 2-72

h. Repeal by Implication 2-76

i. Lack of Authorization 2-79

D. Constitutional Limitations upon the Power of the Purse 2-82

E. General Provisions: When Construed as Permanent

Legislation 2-85

1. Words of Futurity 2-86

2. Other Indicia of Permanence 2-89

This is a work of the U.S. government and is not subject to copyright protection in the

United States. The published product may be reproduced and distributed in its entirety

without further permission from GAO. However, because this work may contain

copyrighted images or other material, permission from the copyright holder may be

necessary if you wish to reproduce this material separately.

Chapter 2: The Legal Framework

Page 2-1 GAO-16-464SP

This section discusses basic appropriations law terms that appear

throughout this publication. Some of our discussion draws upon statutory

definitions that apply in various budgetary contexts. We draw other

definitions from administrative and judicial decisions, as well as from

custom and usage in the budget and appropriations process.

The Comptroller General, in cooperation with the Treasury Department,

Office of Management and Budget, and Congressional Budget Office,

must maintain and publish standard terms and classifications for “fiscal,

budget, and program information,” giving particular consideration to the

needs of the congressional budget, appropriations, and revenue

committees. 31 U.S.C. § 1112(c). Federal agencies must use this

standard terminology when they provide information to Congress.

31 U.S.C. § 1112(d).

GAO publishes the terminology developed pursuant to this authority in A

Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP

(Washington, D.C.: Sept. 2005) [hereinafter Glossary]. Unless otherwise

noted, the terminology used throughout this publication is based on the

Glossary. The following sections present some of the more important

terminology in the budget and appropriations process. Many other terms

will be defined in the chapters that deal specifically with them.

Congress finances federal programs and activities by providing “budget

authority,” which grants agencies authority to enter into financial

obligations that will result in immediate or future outlays of government

funds. As defined by the Congressional Budget Act, “budget authority”

includes:

“(i) provisions of law that make funds available for obligation and

expenditure (other than borrowing authority), including the authority to

obligate and expend the proceeds of offsetting receipts and collections;

“(ii) borrowing authority, which means authority granted to a Federal

entity to borrow and obligate and expend the borrowed funds, including

through the issuance of promissory notes or other monetary credits;

“(iii) contract authority, which means the making of funds available for

obligation but not for expenditure; and

Chapter 2: The Legal Framework

A. Appropriations and

Related Terminology

1. Budget Authority:

Authority to Obligate

Chapter 2: The Legal Framework

Page 2-2 GAO-16-464SP

“(iv) offsetting receipts and collections as negative budget authority, and

the reduction thereof as positive budget authority.”

Only Congress may grant budget authority. Therefore, agency

regulations cannot confer budget authority. A regulation may create a

liability on the part of the government only if Congress has enacted the

necessary budget authority and if the obligation is consistent with all

applicable statutes. Without the necessary statutory authority, a

regulation purporting to create a liability on the part of the government is

invalid and not binding on the government.

For example, a claimant

asserted that the War Department had a practice of paying for the

transportation of officers’ privately-owned horses. Atchison, Topeka &

Santa Fe Railroad Co. v. United States, 55 Ct. Cl. 339 (1920). However,

because Congress had not enacted any statute permitting the War

Department to pay these personal expenses, the War Department could

not pay them, despite any contrary practice or regulation.

Id.

Further illustrations may be found in the following decisions of the

Comptroller General:

• Where the program statute provided that federal grants “shall be” a

specified percentage of project construction costs, the grantor agency

Section 3(2) of the Congressional Budget and Impoundment Control Act of 1974,

2 U.S.C. § 622(2) and note, as amended by the Omnibus Budget Reconciliation Act of

1990, Pub. L. No. 101-508, §§ 13201(b) and 13211(a), 104 Stat. 1388, 1388-614 and

1388-620 (Nov. 5, 1990). Prior to the Congressional Budget Act, the term “obligational

authority” was frequently used instead of budget authority.

This tenet is rooted in the fundamental proposition that agency regulations are bound by

the limits of the agency’s statutory and organic authority. Manhattan General Equipment

Co. v. Commissioner of Internal Revenue, 297 U.S. 129, 134 (1936); Health Insurance

Ass’n of America, Inc. v. Shalala, 23 F.3d 412, 416 (D.C. Cir. 1994); Killip v. Office of

Personnel Management, 991 F.2d 1564, 1569 (Fed. Cir. 1993).

See also Harris v. Lynn, 555 F.2d 1357 (8th Cir. 1977), cert. denied, 434 U.S. 927

(1977) (agency cannot extend benefits by regulation to a class of persons not included

within the authorizing statute); Tullock v. State Highway Commission of Missouri, 507 F.2d

712 (8th Cir. 1974) (agency cannot restrict class of “displaced persons” entitled to benefits

by regulation that conflicts with the statutory definition); Holland-America Line v. United

States, 53 Ct. Cl. 522 (1918) (agency cannot impose a liability by regulation that is not

imposed by the statute itself), rev’d on other grounds, 254 U.S. 148 (1920); Illinois Central

Railroad Co. v. United States, 52 Ct. Cl. 53 (Ct. Cl. 1917) (agency cannot bind

government by regulation alone to pay for transportation of private property); B-201054,

Apr. 27, 1981 (agency cannot forgive claims against the government or accept

government liability by regulation without a clear statutory basis).

Chapter 2: The Legal Framework

Page 2-3 GAO-16-464SP

could not issue regulations providing a mechanism for reducing the

grants below the specified percentage. 53 Comp. Gen. 547 (1974).

• Where a statute provided that administrative costs could not exceed a

specified percentage of funds distributed to states under an allotment

formula, the administering agency could not amend its regulations to

relieve states of liability for over expenditures or to raise the ceiling.

B-178564, July 19, 1977, aff’d 57 Comp. Gen. 163 (1977).

• Absent a clear statutory basis, an agency may not issue regulations

establishing procedures to accept government liability or to forgive

indebtedness based on what it deems to be fair or equitable.

B-201054, Apr. 27, 1981. See also B-118653, July 15, 1969.

• Agencies should not incur obligations for food and light refreshments

in reliance on a General Services Administration (GSA) travel

regulation for which GSA has no authority. B-288266, Jan. 27, 2003.

See also 62 Comp. Gen. 116 (1983); 56 Comp. Gen. 943 (1977);

B-201706, Mar. 17, 1981.

As we have seen in Chapter 1 in our discussion of the congressional

“power of the purse,” the Constitution permits the withdrawal of money

from the Treasury only where Congress enacts an appropriation

authorizing the payment. Therefore, an appropriation is a law authorizing

the payment of funds from the Treasury. In addition, most appropriations

also authorize agencies to incur obligations and to ultimately draw money

from the Treasury to satisfy those obligations. Stated differently, most

appropriations provide both budget authority and the authority to make

payments from the Treasury. Such appropriations do not represent cash

actually set aside in the Treasury. They represent legal authority granted

by Congress to incur obligations and to make disbursements for the

purposes, during the time periods, and up to the amount limitations

specified in the appropriation acts. See United States ex rel. Becker v.

Westinghouse Savannah River Co., 305 F.3d 284 (4th Cir. 2002).

While other forms of budget authority may authorize agencies to incur

obligations, the authority to incur obligations by itself is not sufficient to

authorize payments from the Treasury. See, e.g., National Ass’n of

Regional Councils v. Costle, 564 F.2d 583, 586 (D.C. Cir. 1977);

New York Airways, Inc. v. United States, 369 F.2d 743 (Ct. Cl. 1966).

Thus, at some point if obligations are paid, they are paid by and from an

appropriation. Later in this chapter we discuss in more detail precisely

what types of statutes constitute appropriations.

2. Appropriations: Authority

to Draw Money from the

Treasury

Chapter 2: The Legal Framework

Page 2-4 GAO-16-464SP

Congress may make an appropriation that grants authority to draw money

from the Treasury but does not grant budget authority. Such an

appropriation is known by a more specific term. For example, a

“liquidating appropriation” provides authority to draw money from the

Treasury to satisfy obligations incurred pursuant to contract authority

(discussed in the next sub-section). A “deficiency appropriation” provides

authority to satisfy obligations that exceeded an agency’s available

budget authority. The word “appropriation” appearing alone nearly

always refers to a provision of law that grants both budget authority and

authority to make payments from the Treasury.

Appropriations are identified on financial documents by means of

“account symbols,” which are assigned by the Treasury Department,

based on the number and types of appropriations an agency receives and

other types of funds it may control. An appropriation account symbol is a

group of numbers, or a combination of numbers and letters, which

identifies the agency responsible for the account, the period of availability

of the appropriation, and the specific fund classification. Detailed

information on reading and identifying account symbols is contained in

the Treasury Financial Manual (I TFM 2-1500). Specific accounts for

each agency are listed in a publication entitled Federal Account Symbols

and Titles, issued quarterly as a supplement to the TFM.

Contract authority is a form of budget authority that permits agencies to

incur obligations in advance of appropriations. Glossary at 22. It is to be

distinguished from every government agency’s inherent authority to use

budget authority to enter into contracts necessary to carry out its statutory

functions.

Contract authority itself is not an appropriation; it grants authority to enter

into binding contracts but not the funds to make payments under them.

Congress must provide funds to satisfy the contractual obligations, either

by making a subsequent appropriation called a “liquidating appropriation”

or by granting authority to use receipts or offsetting collections for this

purpose. See PCL Construction Service, Inc. v. United States, 41 Fed.

Cl. 242 (1998); National Ass’n of Regional Councils v. Costle, 564 F.2d

583, 586 (D.C. Cir. 1977); B-300167, Nov. 15, 2002; B-228732, Feb. 18,

1988. Contract authority constitutes budget authority. The subsequent

liquidating appropriation does not grant authority to incur obligations and,

therefore, is not budget authority. B-171630, Aug. 14, 1975.

3. Contract Authority:

Obligations in Advance

of Appropriations

Chapter 2: The Legal Framework

Page 2-5 GAO-16-464SP

Congress may provide contract authority in appropriation acts (for

example, B-174839, Mar. 20, 1984) or, more commonly, in other types of

legislation (for example, B-228732, Feb. 18, 1988). Either way, the

authority must be specific. 31 U.S.C. § 1301(d).

Contract authority has a “period of availability” analogous to that for an

appropriation. Unless otherwise specified, if it appears in an

appropriation act in connection with a particular appropriation, its period

of availability will be the same as that for the appropriation. If it appears

in an appropriation act without reference to a particular appropriation, its

period of availability, again unless otherwise specified, will be the fiscal

year covered by the appropriation act. 32 Comp. Gen. 29, 31 (1952);

B-76061, May 14, 1948. See Cray Research, Inc. v. United States, 44

Fed. Cl. 327, 331 n.4 (1999); Costle, 564 F.2d at 587–88. This period of

availability refers to the time period during which the contracts must be

entered into.

Since the contracts entered into pursuant to contract authority constitute

obligations binding on the United States, Congress has little practical

choice but to make the necessary liquidating appropriations. B-228732,

Feb. 18, 1988; B-226887, Sept. 17, 1987. As the Supreme Court has put

it:

“The expectation is that appropriations will be automatically forthcoming to meet

these contractual commitments. This mechanism considerably reduces

whatever discretion Congress might have exercised in the course of making

annual appropriations.”

Train v. City of New York, 420 U.S. 35, 39 n.2 (1975). A failure or refusal

by Congress to make the necessary appropriation would not defeat the

obligation, and the party entitled to payment would most likely be able to

recover in a lawsuit. E.g., B-211190, Apr. 5, 1983.

The federal government receives money from numerous sources and in

numerous contexts. Our interest from an appropriations law perspective

is whether funds received by an agency are available for obligation

without further congressional action.

For our purposes, we discuss two types of collections that may be

received by the government: offsetting collections and offsetting receipts.

Offsetting collections are collections authorized by law to be credited to

appropriation or fund expenditure accounts. Generally, offsetting

collections are collections resulting from business-type or market-oriented

activities, such as the sale of goods or services to the public, and

4. Offsetting Collections:

Authority to Obligate

Funds Collected

Chapter 2: The Legal Framework

Page 2-6 GAO-16-464SP

intragovernmental transactions. For example, the Secretary of the

Interior is authorized to collect recreation fees from visitors to national

parks. These fees are available for expenditure without further

appropriation by Congress. 16 U.S.C. § 6806.

Laws authorizing offsetting collections make them available for obligation

to meet the account’s purpose without further congressional action.

Accordingly, because the receiving agency has the authority to obligate

and expend offsetting collections, offsetting collections constitute budget

authority.

Furthermore, as discussed earlier in this chapter, an

appropriation is authority to incur obligations and to make payments from

the Treasury for specified purposes. Thus, offsetting collections are an

appropriation and are subject to the fiscal laws governing appropriated

funds. B-230110, Apr. 11, 1988; 63 Comp. Gen. 285 (1984).

In contrast, offsetting receipts are collections that cannot be obligated and

expended without further congressional action. Offsetting receipts are not

available to an agency unless Congress appropriates them.

Offsetting

receipts are not available to the receiving agency for obligation;

accordingly, offsetting receipts do not constitute budget authority. An

example of offsetting receipts is the motor vehicle and engine compliance

program fee collected by EPA. These fees are deposited into the

Environmental Services Special Fund but are not available to EPA

without further appropriation. 42 U.S.C. § 7552.

“Borrowing authority” is authority that permits agencies to incur

obligations and make payments to liquidate the obligations out of

borrowed moneys. Borrowing authority may consist of (a) authority to

borrow from the Treasury; (b) authority to sell agency debt securities and,

therefore, to borrow directly from the public; (c) authority to borrow from

the Federal Financing Bank, or (d) some combination of the above.

Borrowing from the Treasury is the most common form and is also known

as “public debt financing.” Generally, GAO has expressed a preference

for financing through direct appropriations rather than through borrowing

The Congressional Budget Act defines budget authority as the authority provided by

Federal law to incur financial obligations. See Congressional Budget Act § 3(2)(A)(i), 2

U.S.C. § 622(2)(A)(i). Budget authority includes provisions of law that make funds

available for obligation and expenditure, see Id. § 3(2)(A)(i), § 622(2)(A)(i).

Often, these may be deposited into what is known as a “receipt account.”

5. Borrowing Authority:

Incurring Obligations

Against Borrowed

Amounts

Chapter 2: The Legal Framework

Page 2-7 GAO-16-464SP

authority on the grounds that the appropriations process provides

enhanced congressional control. E.g., B-301397, Sept. 4, 2003;

B-141869, July 26, 1961. The Congressional Budget Act met this

concern to an extent by requiring generally that new borrowing authority,

as with new contract authority, be limited to the extent or amounts

provided in appropriation acts. 2 U.S.C. § 651(a). GAO has

recommended that borrowing authority be provided only to those

accounts that can generate enough revenue in the form of collections

from nonfederal sources to repay their debt. GAO, Budget Issues:

Budgeting for Federal Capital, GAO/AIMD-97-5 (Washington, D.C.: Nov.

12, 1996); Budget Issues: Agency Authority to Borrow Should Be Granted

More Selectively, GAO/AFMD-89-4 (Washington, D.C.: Sept. 15, 1989).

On occasion, however, GAO has recommended borrowing authority when

supplemental appropriations might otherwise be necessary. See GAO,

Aviation Insurance: Federal Insurance Program Needs Improvements to

Ensure Success, GAO/RCED-94-151 (Washington, D.C.: July 15, 1994).

A type of borrowing authority specified in the expanded definition of

budget authority contained in the Omnibus Budget Reconciliation Act of

1990 is monetary credits. The monetary credit is a relatively uncommon

concept in government transactions. At the present time, it exists mostly

in a handful of statutes authorizing the government to use monetary

credits to acquire property such as land or mineral rights. Examples are

the Rattlesnake National Recreation Area and Wilderness Act of 1980,

discussed in 62 Comp. Gen. 102 (1982), and the Cranberry Wilderness

Act, discussed in B-211306, Apr. 9, 1984.

Under the monetary credit procedure, the government does not issue a

check in payment for the acquired property. Instead, it gives the seller

“credits” in dollar amounts reflecting the purchase price. The holder may

then use these credits to offset or reduce amounts it owes the

government in other transactions that may, depending on the terms of the

governing legislation, be related or unrelated to the original transaction.

The statute may use the term “monetary credit” (as in the Cranberry

legislation) or some other designation such as “bidding rights” (as in the

Rattlesnake Act). Where this procedure is authorized, the acquiring

agency does not need to have appropriations or other funds available to

If an agency cannot repay with external collections, it must either extend its debt with

new borrowings, seek appropriations to repay the debt, or seek to have the debt forgiven

by statute. Repayment from external collections is the only alternative that reimburses the

Treasury in any meaningful sense. See GAO/AFMD-89-4 at 17, 20.

Chapter 2: The Legal Framework

Page 2-8 GAO-16-464SP

cover the purchase price because no cash disbursement is made. An

analogous device authorized for use by the Commodity Credit

Corporation is “commodity certificates.”

A loan guarantee is any guarantee, insurance, or other pledge with

respect to the payment of all or a part of the principal or interest on any

debt obligation of a nonfederal borrower to a nonfederal lender. The

government does not know whether or to what extent it may be required

to honor the guarantee until there has been a default.

In the past, loan guarantees were expressly excluded from the definition

of budget authority. Budget authority was created only when an

appropriation to liquidate loan guarantee authority was made. This

changed with the enactment of the Federal Credit Reform Act of 1990,

effective starting with fiscal year 1992. Under this legislation, the “cost” of

both loan and loan guarantee programs is budget authority. Cost means

the estimated long-term cost to the government of a loan or loan

guarantee (defaults, delinquencies, interest subsidies, etc.), calculated on

a net present value basis, excluding administrative costs. Except for

entitlement programs (the statute notes the guaranteed student loan

program and the veterans’ home loan guaranty program as examples)

and certain Commodity Credit Corporation programs, new loan guarantee

commitments may be made only to the extent budget authority to cover

their costs is provided in advance or other treatment is specified in

appropriation acts. Appropriations of budget authority are to be made to

“credit program accounts,” and the programs administered from revolving

nonbudgetary “financing accounts.”

The Federal Credit Reform Act reflects the thrust of proposals by GAO,

the Office of Management and Budget, the Congressional Budget Office,

and the Senate Budget Committee. See GAO, Credit Reform: U.S.

Needs Better Method for Estimating Cost of Foreign Loans and

Guarantees, GAO/NSIAD/GGD-95-31 (Washington, D.C.: Dec. 19, 1994);

Credit Reform: Case-by-Case Assessment Advisable in Evaluating

Coverage and Compliance, GAO/AIMD-94-57 (Washington, D.C.: July

28, 1994). See also GAO, Budget Issues: Budgetary Treatment of

Federal Credit Programs, GAO/AFMD-89-42 (Washington, D.C.: Apr. 10,

See GAO, Farm Payments: Cost and Other Information on USDA’s Commodity

Certificates, GAO/RCED-87-117BR (Mar. 26, 1987).

6. Loan and Loan

Guarantee Authority

Chapter 2: The Legal Framework

Page 2-9 GAO-16-464SP

1989) (discussion of the “net present value” approach to calculating

costs).

The term “reappropriation” means congressional action to continue the

availability, whether for the same or different purposes, of all or part of the

unobligated portion of budget authority that has expired or would

otherwise expire. Reappropriations are counted as budget authority in

the first year for which the availability is extended.

Appropriations are classified in different ways for different purposes.

Some are discussed elsewhere in this publication. The following

classifications, although phrased in terms of appropriations, apply equally

to the broader concept of budget authority.

(1) One-year appropriation: An appropriation that is available for

obligation only during a specific fiscal year. This is the most common

type of appropriation. It is also known as a “fiscal year” or “annual”

appropriation.

(2) Multiple year appropriation: An appropriation that is available for

obligation for a definite period of time in excess of one fiscal year.

(3) No-year appropriation: An appropriation that is available for obligation

for an indefinite period. A no-year appropriation is usually identified

by appropriation language such as “to remain available until

expended.”

Glossary at 23. See also 31 U.S.C. § 1301(b) (reappropriation for a different purpose is

to be accounted for as a new appropriation).

7. Reappropriation

8. Classifications of Budget

Authority

a. Classification Based on

Duration

Chapter 2: The Legal Framework

Page 2-10 GAO-16-464SP

(1) Definite appropriation: An appropriation of a specific amount of money.

(2) Indefinite appropriation: An appropriation of an unspecified amount of

money. An indefinite appropriation may appropriate all or part of the

receipts from certain sources, the specific amount of which is

determinable only at some future date, or it may appropriate “such

sums as may be necessary” for a given purpose.

(1) Current appropriation: An appropriation made by Congress in, or

immediately prior to, the fiscal year or years during which it is

available for obligation.

(2) Permanent appropriation: A “standing” appropriation which, once

made, is always available for specified purposes and does not

require repeated action by Congress to authorize its use.

Legislation authorizing an agency to retain and use receipts tends to

be permanent; if so, it is a form of permanent appropriation.

(1) Current or unexpired appropriation: An appropriation that is available

for incurring new obligations.

(2) Expired appropriation: An appropriation that is no longer available to

incur new obligations, although it may still be available for the

recording and/or payment (liquidation) of obligations properly

incurred before the period of availability expired.

(3) Canceled appropriation: An appropriation whose account is closed,

and is no longer available for obligation or expenditure for any

purpose.

An appropriation may combine characteristics from more than one of the

above groupings. For example, a “permanent indefinite” appropriation is

open ended as to both period of availability and amount. Examples are

This is similar to a no-year appropriation except that a no-year appropriation will be

closed if there are no disbursements from the appropriation for two consecutive fiscal

years, and if the head of the agency or the President determines that the purposes for

which the appropriation was made have been carried out. 31 U.S.C. § 1555. In actual

usage, the term “permanent appropriation” tends to be used more in reference to

appropriations contained in permanent legislation, such as legislation establishing a

revolving fund, while “no-year appropriation” is used more to describe appropriations

found in appropriation acts.

b. Classification Based on

Presence or Absence of

Monetary Limit

c. Classification Based on

Permanency

d. Classification Based on

Availability for New

Obligations

Chapter 2: The Legal Framework

Page 2-11 GAO-16-464SP

31 U.S.C. § 1304 (payment of certain judgments against the United

States) and 31 U.S.C. § 1322(b)(2) (refunding amounts erroneously

collected and deposited in the Treasury).

An appropriate subtitle for this section might be “Life Cycle of an

Appropriation.” An appropriation has a conception, birth, death, and even

an afterlife. The various phases in an appropriation’s “life cycle” may be

identified as follows:

• executive budget formulation and transmittal,

• congressional action,

• budget execution and control,

• audit and review, and

• account closing.

The first general appropriation act, passed by Congress on

September 29, 1789, appropriated a total of $639,000 and illustrates what

was once a relatively uncomplicated process:

“Be it enacted by the Senate and House of Representatives of the United States

of America in Congress assembled, That there be appropriated for the service of

the present year, to be paid out of the monies which arise, either from the

requisitions heretofore made upon the several states, or from the duties on

impost and tonnage, the following sums, viz. A sum not exceeding two hundred

and sixteen thousand dollars for defraying the expenses of the civil list, under the

late and present government; a sum not exceeding one hundred and thirty-seven

thousand dollars for defraying the expenses of the department of war; a sum not

exceeding one hundred and ninety thousand dollars for discharging the warrants

issued by the late board of treasury, and remaining unsatisfied; and a sum not

exceeding ninety-six thousand dollars for paying the pensions to invalids.”

1 Stat. 95. As the size and scope of the federal government have grown,

so has the complexity of the appropriations and of the appropriations

process.

For a detailed discussion of the history of the budget and appropriations process, see

Louis Fisher, The Authorization-Appropriation Process in Congress: Formal Rules and

Informal Practices, 29 Cath. U. L. Rev. 51, 53–59 (1979). For a more current overview of

the process, see Allen Schick, The Federal Budget: Politics, Policy, Process, 3rd Ed. (The

Brookings Institution Press, 2007).

B. The Budget and

Appropriations

Process

1. Historical Perspective

Chapter 2: The Legal Framework

Page 2-12 GAO-16-464SP

In 1789, the House established the Ways and Means Committee to report

on revenues and spending, only to disband it that same year following the

creation of the Treasury Department. The House Ways and Means

Committee was re-established to function permanently in 1795 and was

recognized as a standing committee in 1802.

On the Senate side, the Finance Committee was established as a

standing committee in 1816. Up until that time, the Senate had referred

appropriation measures to temporary select committees. By 1834,

jurisdiction over all Senate appropriation bills was consolidated in the

Senate Finance Committee.

In the mid-nineteenth century, a move was begun to restrict appropriation

acts to only those expenditures that had been previously authorized by

law. The purpose was to avoid the delays caused when legislative items

or “riders” were attached to appropriation bills. Rules were eventually

passed by both houses of Congress to require, in general, prior legislative

authorizations for the enactment of appropriations.

Fiscal years allow financial transactions to be classified into particular

time periods. The need for such temporal classification has been termed

an “absolute necessity.” Sweet v. United States, 34 Ct. Cl. 377, 386

(1899). See also Bachelor v. United States, 8 Ct. Cl. 235, 238 (1872)

(reasons for classifying transactions into fiscal years are “so obvious . . .

that no one can fail to see their importance”). Prior to 1842, the

government did not distinguish between fiscal year and calendar year.

The practical needs of government led Congress to establish a fiscal year

that does not run concurrently with the calendar year: one case explained

that a different fiscal year arose for the sake of the “convenience of the

public service in the administration of the expense, accounts, and

estimates of the Government.”

Sweet v. United States, 34 Ct. Cl. at

386-87.

Under the financial strains caused by the Civil War, appropriations

committees first appeared in both the House and the Senate, diminishing

the jurisdiction of the Ways and Means and Finance Committees,

respectively. Years later, the need for major reforms was again

accentuated by the burdens of another war. Following World War I,

From 1842 to 1976, the government’s fiscal year ran from July 1 to the following June

30. In 1974, Congress changed the fiscal year to run, starting with fiscal year 1977, from

October 1 to September 30. 31 U.S.C. § 1102.

Chapter 2: The Legal Framework

Page 2-13 GAO-16-464SP

Congress passed the Budget and Accounting Act, 1921, Pub. L. No. 67-

13, 42 Stat. 20 (June 10, 1921).

Before 1921, departments and agencies generally made individual

requests for appropriations. These submissions were compiled for

congressional review in an uncoordinated “Book of Estimates.” The

Budget and Accounting Act enhanced budgetary efficiency and aided in

the performance of constitutional checks and balances through the

budget process.

It required the President to submit a national budget

each year and restricted the authority of the agencies to present their own

proposals. See 31 U.S.C. §§ 1104, 1105. With this centralization of

authority for the formulation of the executive branch budget in the

President and the newly established Bureau of the Budget (now Office of

Management and Budget), Congress also took steps to strengthen its

oversight capability over fiscal matters by establishing what was then

called the General Accounting Office.

The decades immediately following World War II saw growth in both the

size and the complexity of the federal budget. It became apparent that

the congressional role in the “budget and appropriations” process

centered heavily on the appropriations phase and placed too little

emphasis on the budgetary phase. In other words, Congress responded

to the President’s spending and revenue proposals only through the

cumulative result of individual pieces of legislation reached through an

agglomeration of separate actions. Congress did not look at the budget

as a whole, nor did it examine or vote on overall spending or revenues.

There was no process by which Congress could establish its own

spending priorities. Thus, the impetus for a congressional budget

process began in the early 1970s. It was not created in a single step;

rather, it was created in stages—and for the most part new pieces did not

replace but were added to existing processes. As William G. Dauster,

former Chief Counsel on the Committee on the Budget, put it: “[t]he law

governing the budget process resembles nothing so much as sediment.

It has accumulated in several statutes, each layered upon the prior

one . . . [t]his incremental growth has created something of a legal

A summary of the changes brought about by the Budget and Accounting Act may be

found in National Federation of Federal Employees v. Cheney, 883 F.2d 1038, 1043–46

(D.C. Cir. 1989).

Congress has redesignated the General Accounting Office as the Government

Accountability Office. 31 U.S.C. § 702 note.

Chapter 2: The Legal Framework

Page 2-14 GAO-16-464SP

nettle.” Budget Process Law Annotated, S. Print No. 103-49, at xxxv

(1993).

Among the several statutes on the budget process is the Congressional

Budget Act and Impoundment Control Act of 1974. It established a

process for Congress to systematically consider the total federal budget

and determine priorities for allocating budget resources. The design of

programs and the allocation of spending within each mission area is left

to the authorizing and appropriations committees. The focus is on overall

fiscal policy and an allocation across priorities.

The statute made several major changes to the existing budget and

appropriations process. For example:

• It established a detailed calendar governing the various stages of the

congressional budget and appropriations process. 2 U.S.C. § 631.

• It provided for congressional review of the President’s budget, the

establishment of target ceilings for federal expenditures through one

or more concurrent resolutions, and the evaluation of spending bills

against these targets. 2 U.S.C. §§ 632–642. Prior to this time,

Congress had considered the President’s budget only in the context

of individual appropriation bills. To implement the new process, the

law created Budget Committees in both the Senate and the House,

and a Congressional Budget Office (CBO). 2 U.S.C. § 601. The law

requires the CBO to prepare estimates of new budget authority,

outlays, or revenue provided by bills or resolutions reported from

committees of either house, or estimates of the costs that the

government would incur in carrying out the provisions of the proposed

legislation. 2 U.S.C. § 602.

The second and more immediate motive for passage of the Congressional Budget and

Impoundment Control Act was the dispute in the early 1970s related to the impoundment

by President Nixon of billions of dollars of funds appropriated by Congress. See

Committee on the Budget, United States Senate, The Congressional Budget Process, An

Explanation, S. Print No. 105-67, at 8 (1998); H.R. Rep. No. 93-1101, at 3 (1974); H.R.

Rep. No. 93-658, at 19 (1974).

Chapter 2: The Legal Framework

Page 2-15 GAO-16-464SP

• Prompted by the growth of “backdoor spending,”

it enhanced the

role of the Appropriations Committees in reviewing proposals for

contract authority, borrowing authority, and mandatory entitlements.

2 U.S.C. § 651.

The 1974 legislation also imposed limitations on the impounding of

appropriated funds by the executive branch. 2 U.S.C. §§ 681–688.

With this as an historical backdrop, the first step in the life cycle of an

appropriation is the long and exhaustive administrative process of budget

preparation and review, a process that may well take place several years

before the budget for a particular fiscal year is ready to be submitted to

Congress. The primary participants in the process at this stage are the

agencies and individual organizational units, which review current

operations, program objectives, and future plans, and the Office of

Management and Budget (OMB),

which coordinates and formulates a

consolidated budget submission.

Throughout this preparation period, there is a continuous exchange of

information among the various federal agencies, OMB, and the President,

including revenue estimates and economic outlook projections from the

Treasury Department, the Council of Economic Advisers, the

Congressional Budget Office, and the Departments of Commerce and

Labor.

The President must submit his budget request to Congress on or before

the first Monday in February of each year, for use during the following

The term “backdoor spending” is a collective designation for authority provided in

legislation other than appropriation acts to obligate the government to make payments.

The most common forms of backdoor spending are borrowing authority, contract authority,

and entitlement authority. See GAO, A Glossary of Terms Used in the Federal Budget

Process, GAO-05-734SP (Washington, D.C.: Jan. 2005). From the perspective of the

appropriations committees, funding provided by these forms of authority causes their

funding control to “sneak out” legislative “back doors.”

Part 1 of Reorganization Plan No. 2 of 1970 (84 Stat. 2085), designated the former

Bureau of the Budget as OMB and transferred all the authority vested in the Bureau and

its director to the President. By Executive Order No. 11541, July 1, 1970, the President in

turn delegated that authority to the Director of OMB. OMB’s primary functions include

assistance to the President in the preparation of the budget and the formulation of the

fiscal program of the government, supervision and control of the administration of the

budget, centralized direction in executive branch financial management, and review of the

organization and management of the executive branch.

2. Executive Budgeting: the

Budget and Accounting

Act, 1921

Chapter 2: The Legal Framework

Page 2-16 GAO-16-464SP

fiscal year. 2 U.S.C. § 631.

Numerous statutory provisions, the most

important of which are 31 U.S.C. §§ 1104–1109, prescribe the content

and nature of the materials and justifications that must be submitted with

the President’s budget request. Specific instructions and policy guidance

are contained in OMB Circular No. A-11.

The next phase in the life cycle of an appropriation is sometimes referred

to as “congressional budgeting.” Under the Congressional Budget Act,

Congress must agree on governmentwide budget totals. A timetable for

congressional budget action is set forth in 2 U.S.C. § 631, with further

detail in sections 632–656. Key steps in that timetable are summarized

below.

February 15. The Congressional Budget Office submits to the House and

Senate Budget Committees its annual report required by 2 U.S.C. §

602(e). The report contains the Congressional Budget Office’s analysis

of fiscal policy and budget priorities.

Within 6 weeks after President submits a budget request, or at such time

as may be requested by the Committee on the Budget. Each

congressional committee with legislative jurisdiction submits to the

appropriate Budget Committee its views and estimates on spending and

revenue levels for the following fiscal year on matters within its

jurisdiction. 2 U.S.C. § 632(d). The House and Senate Budget

Committees then hold hearings and prepare their respective versions of a

concurrent resolution, which is intended to be the overall budget plan

against which individual appropriation bills are to be evaluated.

April 15. Congress completes action on the concurrent resolution, which

includes a breakdown of estimated new budget authority and outlays for

Section 1105(a) of title 31 of the United States Code states the requirement for a

presidential budget submission slightly differently than 2 U.S.C. § 631: “On or after the first

Monday in January but not later than the first Monday in February of each year, the

President shall submit a budget of the United States Government for the following fiscal

year.”

Some useful references discussing the congressional budget process are: GAO, A

Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP (Washington,

D.C.: Sept. 2005), at Appendix I (Overview of the Development and Execution of the

Federal Budget), Appendix II (Federal Budget Formulation and Appropriations Processes);

GAO, Budget Process: Evolution and Challenges, GAO/T-AIMD-96-129 (July 11, 1996);

and Committee on the Budget, United States Senate, The Congressional Budget Process,

An Explanation, S. Print No. 105-67 (revised Dec. 1998).

3. Congressional

Budgeting: the

Congressional Budget

Act of 1974

Chapter 2: The Legal Framework

Page 2-17 GAO-16-464SP

each major budget function. 2 U.S.C. § 632(a). The conference report

on the concurrent resolution allocates the totals among individual

committees. 2 U.S.C. § 633(a). The resolution may also include

“reconciliation directives”—directives to individual committees to

recommend legislative changes in revenues or spending to meet the

goals of the budget plan. 2 U.S.C. § 641(a).

After completing work on its budget totals, Congress begins considering

annual appropriations bills. In exercising the broad discretion granted by

the Constitution, Congress can approve funding levels contained in the

President’s budget request, increase or decrease those levels, eliminate

proposals, or add programs not requested by the administration.

In simpler times, Congress often made appropriations in the form of a

single, consolidated appropriation act. The most recent regular

consolidated appropriation act was the General Appropriation Act of

1951, Pub. L. No. 759, 64 Stat. 595 (Sept. 6, 1950). Since that time,

Congress has generally made appropriations in a series of regular

appropriation acts plus one or more supplemental appropriation acts.

Most regular appropriation acts are organized based on one or more

major departments and a number of smaller agencies (corresponding to

the jurisdiction of appropriations subcommittees), although a few are

based solely on function. An agency may receive funds under more than

one appropriation act. The individual structures are of course subject to

change over time. At the present time, there are 12 regular appropriation

acts, as follows:

• Agriculture, Rural Development, Food and Drug Administration, and

related agencies

• Commerce, Justice, Science, and related agencies

• Department of Defense

• Energy and Water Development and related agencies

• Financial Services and General Government

• Department of Homeland Security

• Department of the Interior, Environment, and related agencies

4. Appropriations: the

Enactment of Budget

Authority

a. The Legislative Process

Chapter 2: The Legal Framework

Page 2-18 GAO-16-464SP

• Departments of Labor, Health and Human Services, and Education,

and related agencies

• Legislative Branch

• Military Construction and Veteran Affairs, and related agencies

• Department of State, Foreign Operations, and related programs

• Departments of Transportation, Housing and Urban Development,

and related agencies;

House consideration of the individual appropriation bills begins as each

subcommittee of the House Appropriations Committee studies

appropriation requests and evaluates the performance of the agencies

within its jurisdiction. Typically, each subcommittee will conduct hearings

at which federal officials give testimony concerning both the costs and

achievements of the various programs administered by their agencies

and provide detailed justifications for their funding requests. Eventually,

each subcommittee reports a single appropriation bill for consideration by

the entire committee. In turn, the House Appropriations Committee

reports annual appropriations bills to the whole House. Under the

Congressional Budget Act, the House Appropriations Committee should

report the last annual appropriation bill by June 10, and the House should

complete all action on appropriation bills by June 30. 2 U.S.C. § 631.

As the House passes individual appropriation bills, it sends them to the

Senate. As in the House, the Senate considers each appropriation

measure first in subcommittee, which then reports the bill the full

Appropriations Committee, which then reports it to the full Senate. In the

event of variations in the Senate and House versions of a particular

appropriation bill, a conference committee, including representatives of

both houses of Congress, is formed. The conference committee’s role is

to resolve all differences, but the full House and Senate must also vote to

approve the conference report.

Following either the Senate’s passage of the House version of an

appropriation measure, or the approval of a conference report by both

bodies, the enrolled bill is then sent to the President for signature or veto.

Chapter 2: The Legal Framework

Page 2-19 GAO-16-464SP

The Congressional Budget Act envisions completion of the process by

October 1, the beginning of the new fiscal year.

The rules of the Senate and House of Representatives contain a number

of requirements relevant to an understanding of appropriations law and

the legislative process. For example, House Rule XXI(2) prohibits

appropriations for objects not previously authorized by law.

Senate

Rule XVI contains a similar but more limited prohibition.

Other

examples are the prohibition against including general legislation in

appropriation acts (Senate Rule XVI, House Rule XXI), and the

prohibition against consideration by a conference committee of matters

not committed to it by either House (Senate Rule XXVIII, House Rule

XXII). The applicability of Senate and House rules is exclusively within

the province of the particular House.

In addition, rather than expressly prohibiting a given item, legislation may

provide that it shall not be in order for the Senate or House to consider a

bill or resolution containing that item. An important example is from the

Congressional Budget Act of 1974, which defines “spending authority” as

authority provided in laws other than appropriation acts to obligate the

United States to make payments.

2 U.S.C. § 651(c)(2). It is not in order

for either house to consider any bill, resolution, or amendment containing

certain types of new spending authority, such as contract authority,

unless that bill, resolution, or amendment also provides that the new

authority is to be effective for any fiscal year only to the extent provided in

appropriation acts. 2 U.S.C. § 651(a). There are similar provisions

Occasionally Congress does not complete the entire process by October 1, which

typically results in the enactment of a stop-gap appropriations measure known as a

continuing resolution. We discuss continuing resolutions further in Chapter 8.

Citations to the Rules of the House are from the Rules of the House of

Representatives, 114th Congress, Jan. 6, 2015.

Citations to the Senate rules are from the Standing Rules of the Senate, S. Doc. No.

113-18, Nov. 4, 2013 (revised to Jan. 24, 2013).

The Comptroller General will not render an opinion on these matters. E.g., B-173832,

Aug. 1, 1975.

For further information on spending authority, see GAO, Updated 1987 Inventory of

Accounts with Spending Authority and Permanent Appropriations, GAO/OGC-98-23

(Washington, D.C.: Jan. 19, 1998); Budget Issues: Inventory of Accounts With Spending

Authority and Permanent Appropriations, 1996, GAO/AIMD-96-79 (Washington, D.C.: May

31, 1996).

b. Points of Order

Chapter 2: The Legal Framework

Page 2-20 GAO-16-464SP

pertaining to entitlement authority, which is statutory authority, whether

temporary or permanent—

“to make payments (including loans and grants), the budget authority for which is

not provided for in advance by appropriation Acts, to any person or government

if, under the provisions of the law containing that authority, the United States is

obligated to make such payments to persons or governments who meet the

requirements established by that law.”

Entitlement authority is treated as spending authority during

congressional consideration of the budget. In order to make entitlements

subject to the reconciliation process, the Congressional Budget Act

provides that proposed legislation providing new entitlement authority to

become effective prior to the start of the next fiscal year will be subject to

a point of order. 2 U.S.C. § 651(b)(1). Entitlement legislation, which

would require new budget authority in excess of the allocation made

pursuant to the most recent budget resolution, must be referred to the

appropriations committees. Id. § 651(b)(2).

In addition, the Balanced Budget and Emergency Deficit Control Act of

1985 added a definition of “credit authority” to the Congressional Budget

Act, specifically, “authority to incur direct loan obligations or to incur

primary loan guarantee commitments.” 2 U.S.C. § 622(10). Any bill,

resolution, or conference report providing new credit authority will be

subject to a point of order unless the new authority is limited to the extent

or amounts provided in advance in appropriation acts.

2 U.S.C.

§ 651(a).

The effect of these rules and of statutes like 2 U.S.C. § 651(a) is to

subject the noncomplying bill to a “point of order.” A point of order is a

procedural objection raised on the House or Senate floor or in committees

by a Member alleging a departure from a rule or statute governing the

conduct of business. See GAO, A Glossary of Terms Used in the Federal

Budget Process , GAO-05-734SP (Washington, D.C.: Sept. 2005). It

differs from an absolute prohibition in that (a) it is always possible that no

one will raise a point of order and (b) if raised, it may or may not be

This is the same control device we have previously noted for contract authority.

Although loan guarantee authority was not viewed as budget authority in 1985, the

apparent rationale was that the control, if it is to be employed, must apply at the

authorization stage because the opportunity for control no longer exists by the time

liquidating budget authority becomes necessary. An example of a statute including this

language is discussed in B-230951, Mar. 10, 1989.

Chapter 2: The Legal Framework

Page 2-21 GAO-16-464SP

sustained. Also, some laws, like the Congressional Budget Act, authorize

points of order to be raised, and some measures may be considered

under special resolutions waiving points of order.

If a point of order is

raised and sustained, the offending provision is effectively killed and may

be revived only if it is amended to cure the noncompliance.

The potential effect of a rule or statute subjecting a provision to a point of

order is limited to the pre-enactment stage. If a point of order is not

raised, or is raised and not sustained, the provision, if enacted, is no less

valid. To restate, a rule or statute subjecting a given provision to a point

of order has no effect or application once the legislation or appropriation

has been enacted. 65 Comp. Gen. 524, 527 (1986); 57 Comp. Gen. 34

(1977); 34 Comp. Gen. 278 (1954); B-173832, Aug. 1, 1975; B-123469,

Apr. 14, 1955; B-87612, July 26, 1949.

Sometimes a statutory provision expressly refers to an outside source.

This is known as incorporation by reference, and is the use of legislative

language to make extra-statutory material part of the legislation by

indicating that the extra-statutory material should be treated as if it were

written out in full in the legislation. See generally Black’s Law Dictionary

834 (9th ed. 2010). Incorporation by reference differs from the use of

legislative history to construe statutes: a key characteristic of

incorporation by reference is the express statutory reference to an outside

source. No such express statutory reference exists when GAO or the

courts make other uses of legislative history.

Incorporation by reference is a well-accepted legislative tool. Indeed,

there are numerous instances in which the Supreme Court, for more than

100 years, has accepted incorporation by reference without objection.

See, e.g., Tennessee v. Lane, 541 U.S. 509, 517 (2004); United States v.

Sharpnack, 355 U.S. 286, 293 (1958); In re Heath, 144 U.S. 92, 94

(1892); see also Hershey Foods Corp. v. Department of Agriculture, 158

F. Supp. 2d 37 (D.D.C. 2001), aff’d, 293 F.3d 520 (D.C. Cir. 2002). In

these cases, the language of the statute evidenced a clear congressional

intent to incorporate by reference, and the referenced material was

specifically ascertainable from the face of the legislative language, so all

Usually, a point of order may be waived by a simple majority vote. However, in the

Senate, waiver of some points of order requires a three-fifths vote. For example, waiver of

the prohibition against consideration of nongermane amendments to budget resolutions

requires a three-fifths vote of all members of the Senate. Pub. L. No. 93-344, § 305(b)(2).

c. Incorporation by Reference

Chapter 2: The Legal Framework

Page 2-22 GAO-16-464SP

would know with certainty the duties, terms, conditions, and constraints

enacted into law.

In a 2008 decision, GAO considered the legal effect of seven

appropriations provisions in the Consolidated Appropriations Act, 2008,

that incorporated by reference specified passages of an explanatory

statement of the House Committee on Appropriations that was printed in

the Congressional Record on December 17, 2007. B-316010, Feb. 25,

2008. This explanatory statement contained more specific allocations for

the agencies affected. After reviewing the language of the seven

provisions, GAO determined that:

“Because the language of the seven provisions clearly and unambiguously

expresses an intent to appropriate amounts as allocated in the explanatory

statement and because reference to the explanatory statement permits the

agencies and others to ascertain with certainty the amounts and purposes for

which these appropriations are available, these provisions establish the

referenced allocations contained in the explanatory statement as legally binding

restrictions on the agencies’ appropriations.”

Id. at 8. GAO thus concluded that the affected agencies were required to

obligate and expend amounts appropriated in the seven provisions in

accordance with the referenced allocations in the explanatory statement.

See also B-319009, Apr. 27, 2010 (incorporation by reference for

purposes of reprogramming requirement).

As we discussed in chapter 1, “any time the Congress specifies the

manner in which a Federal entity shall be funded and makes such funds

available for obligation and expenditure, that constitutes an appropriation,

whether the language is found in an appropriation act or in other

legislation.”

B-193573, Dec. 19, 1979. Some agency activities, such as

those arising from permanent provisions permitting the obligation and

expenditure of amounts collected from user fees, are not financed by

annual appropriations because Congress need not enact annual

legislation authorizing the obligations and expenditures. Nonetheless,

such activities are financed by appropriations and, absent any statute

stating otherwise, such activities are subject to the limitations imposed by

law upon the use of all appropriated amounts.

Occasionally, however, questions arise regarding whether a particular

statute does indeed make amounts available for obligation and

Later in this subsection we will discuss some rare exceptions to this rule.

d. What Constitutes an

Appropriation

Chapter 2: The Legal Framework

Page 2-23 GAO-16-464SP

expenditure—that is, whether the statute makes an appropriation. The

starting point for any analysis to answer such a question is 31 U.S.C.

§ 1301(d), which provides:

“A law may be construed to make an appropriation out of the Treasury or to

authorize making a contract for the payment of money in excess of an

appropriation only if the law specifically states that an appropriation is made or

that such a contract may be made.”

Thus, the rule is that the making of an appropriation must be expressly

stated. An appropriation cannot be inferred or made by implication. E.g.,

50 Comp. Gen. 863 (1971).

Regular annual and supplemental appropriation acts present no problems

in this respect as they will be apparent on their face. They, as required by

1 U.S.C. § 105, bear the title “An Act making appropriations . . . .” Other

statutes that are not regular annual or supplemental appropriations acts

may also explicitly state that they make an appropriation. See, e.g.,

31 U.S.C. § 1304(a) (“necessary amounts are appropriated to pay final

judgments, awards, compromise settlements”); 31 U.S.C. § 1324

(“necessary amounts are appropriated to the Secretary of Treasury for

refunding internal revenue collections”); B-321823, Dec. 6, 2011.

Though the making of an appropriation must be expressly stated, a

statute need not use the word “appropriation.” If the statute contains a

specific direction to pay and a designation of the funds to be used, such

as a direction to make a specified payment or class of payments “out of

any money in the Treasury not otherwise appropriated,” then this

amounts to an appropriation. 63 Comp. Gen. 331 (1984); 13 Comp. Gen.

77 (1933). See also 34 Comp. Gen. 590 (1955).

For example, a private relief act that directs the Secretary of the Treasury

to pay, out of any money in the Treasury not otherwise appropriated, a

specified sum of money to a named individual constitutes an

appropriation. 23 Comp. Dec. 167, 170 (1916). Another example

involved a statute that authorized the Secretary of the Treasury to

reimburse local fire departments or districts for costs incurred in fighting

fires on federal property. B-160998, Apr. 13, 1978. Since the statute

directed the Secretary to make payments “from any moneys in the

Treasury not otherwise appropriated” (i.e., it contained both the specific

direction to pay and a designation of the funds to be used), the

Comptroller General concluded that section 11 constituted a permanent

indefinite appropriation.

Chapter 2: The Legal Framework

Page 2-24 GAO-16-464SP

Both elements of the test—that is, a specific direction to pay and a

designation of funds to be used—must be present. Thus, a direction to

pay without a designation of the source of funds is not an appropriation.

For example, a private relief act that contains merely an authorization and

direction to pay but no designation of the funds to be used does not make

an appropriation. 21 Comp. Dec. 867 (1915); B-26414, Jan. 7, 1944.

Similarly, public legislation enacted in 1978 authorized the U.S. Treasury

to make an annual prepayment to Guam and the Virgin Islands of the

amount estimated to be collected over the course of the year for certain

taxes, duties, and fees. While it was apparent that the prepayment at

least for the first year would have to come from the general fund of the

Treasury, the legislation was silent as to the source of the funds for the

prepayments, both for the first year and for subsequent years. While the

statute may have established a permanent authorization, it was not

sufficient under 31 U.S.C. § 1301(d) to constitute an actual appropriation.

B-114808, Aug. 7, 1979. (Congress subsequently made the necessary

appropriation in Pub. L. No. 96-126, 93 Stat. 954, 966 (Nov. 27, 1979).)

The designation of a source of funds without a specific direction to pay is

also not an appropriation. 67 Comp. Gen. 332 (1988).

Thus far, we have been talking about the authority to incur obligations

and make payments that are not associated with any fee collections. In

addition, a statute makes an appropriation if it (1) authorizes the collection

of fees, and (2) makes the fees available for expenditure for a specified

purpose. Such statutes constitute continuing or permanent

appropriations; that is, the money is available for obligation or expenditure

without further action by Congress. For example, Congress authorized

the Commission on the Bicentennial to charge fees for the licensing of its

logo, with the statute specifying that “[a]mounts charged . . . shall be

available to the Commission.” B-228777, Aug. 26, 1988. GAO concluded

that the Commission “is authorized by its statute to retain and expend

proceeds from the commercial licensing of its logo for authorized

A few early cases will be found that appear inconsistent with the proposition stated in

the text. E.g., 6 Comp. Dec. 514, 516 (1899); 4 Comp. Dec. 325, 327 (1897). These cases

predate the enactment on July 1, 1902 (32 Stat. 552, 560) of what is now 31 U.S.C.

§ 1301(d) and should be disregarded.

Chapter 2: The Legal Framework

Page 2-25 GAO-16-464SP

Commission purposes, subject to the same restrictions and limitations

applicable to the use of all appropriated funds.”

Id.

Similarly, Congress may create a “revolving fund”—that is, a fund that

finances a cycle of business-like activities through amounts the fund

receives. Legislation creating a revolving fund establishes a continuing

appropriation which, unless restricted by the terms of the legislation, is

available for obligation without further legislative action to carry out the

fund’s authorized purposes. B-204078.2, May 6, 1988. Often, a statute

will specify a fund in the Treasury to which the collections are to be

deposited. This is not essential, however. A statute that clearly makes

receipts available for obligation or expenditure without further

congressional action will be construed as authorizing the establishment of

such a fund as a necessary implementation procedure. 59 Comp. Gen.

215 (1980) (42 U.S.C. § 5419); B-226520, Apr. 3, 1987 (nondecision

letter) (26 U.S.C. § 7475). See also 13 Comp. Dec. 700 (1907).

Even if a statute does indeed grant an agency authority to obligate and

expend funds, sometimes a related question arises, which is whether

such obligations and expenditures are subject to restrictions that

generally govern the availability of appropriated funds. First, “any time

the Congress specifies the manner in which a Federal entity shall be

funded and makes such funds available for obligation and expenditure,

that constitutes an appropriation.” B-193573, Dec. 19, 1979. However,

as is the case with nearly any general principle, Congress may make an

exception and provide in particular circumstances that an agency does

not operate with appropriated funds even though it is an arm of the United

States government. Such entities operate without the restrictions that

apply to the use of appropriated funds, though these entities must operate

consistently with their authorizing legislation. Some of these entities are

known as “non-appropriated fund instrumentalities”; we discuss these in

Chapter 15, Miscellaneous Topics.

In addition, some government

Other examples include 59 Comp. Gen. 215 (1980) (mobile home inspection fees

collected by the Secretary of Housing and Urban Development); B-197118, Jan. 14, 1980

(National Defense Stockpile Transaction Fund); and B-90476, June 14, 1950. See also 1

Comp. Gen. 704 (1922) (revolving fund created in appropriation act remains available

beyond end of fiscal year where not specified otherwise).

Other entities that are not known as “non-appropriated fund instrumentalities” also have

funds that, by law, are not considered appropriated. For example, the Office of the

Comptroller of the Currency imposes and collects particular fees from some financial

institutions. By law these amounts are not considered appropriated funds. B-324857, Aug.

6, 2015.

Chapter 2: The Legal Framework

Page 2-26 GAO-16-464SP

corporations control funds that are not considered to be appropriated;

these are also discussed in Chapter 15, Miscellaneous Topics. Finally,

many federal agencies make grants to non-federal entities. These funds

generally lose their character as “appropriated” when they pass to the

grantee. We discuss this in Chapter 10, Federal Assistance: Grants and

Cooperative Agreements.

However, non-appropriated fund instrumentalities and government

corporations are rare exceptions to a vast general rule, which is that

funds obligated and expended by federal entities are appropriated funds

that are subject to the legal provisions that govern the availability of

appropriated funds. For example, because a revolving fund is a

continuing appropriation, funds obligated and expended from revolving

funds are, as a general matter, subject to the legal provisions that govern

the availability of appropriated funds.

This is true even if the revolving

fund is not financed by annual appropriations. One case applying this

rule involved the Tobacco User Fee Fund, which contained amounts

collected from tobacco companies and was used to pay the salaries of

tobacco inspectors in the Department of Agriculture. 63 Comp. Gen. 285

(1984). GAO concluded that amounts in the fund were appropriated and,

therefore, that amounts in the fund were subject to restrictions on the

payment of employee health benefits. Id.

Another case concerning whether particular funds are appropriated

involved donated funds. The American Battle Monuments Commission

had statutory authority to receive donations to fund construction of a

memorial. B-275669.2, July 30, 1997. Some other entities, such as the

Holocaust Memorial Council, had funds that by law were not considered

appropriated; thus, they could obligate funds without regard for

procurement requirements in the Federal Property and Administrative

Services Act. Though the American Battle Monuments Commission

argued that it should also be free of such requirements, GAO noted that

We discuss issues related specifically to revolving funds and their status as

appropriations in Chapter 12, Acquisition and Provision of Goods and Services. The

Court of Appeals for the Federal Circuit once held that revolving funds did not constitute

“appropriations” for the purpose of determining whether it and the Court of Federal Claims

had jurisdiction over claims against the United States under the Tucker Act (28 U.S.C.

§ 1491). Core Concepts of Florida, Inc. v. United States, 327 F.3d 1331 (Fed. Cir. 2003),

cert. denied, 540 U.S. 1046 (2003). The Federal Circuit subsequently overruled this

holding and held that “the jurisdictional criterion is not how the government entity is funded

or its obligations met, but whether the government entity was acting on behalf of the

government.” Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en banc).

Chapter 2: The Legal Framework

Page 2-27 GAO-16-464SP

Congress had not provided that the Commission’s funds were not to be

considered appropriated. Thus, GAO concluded that the donations were

considered appropriated funds and, therefore, that the Commission was

required to comply with the Federal Property and Administrative Services

Act. Many other cases through the years have applied the principle that,

unless Congress provides otherwise, funds obligated and expended by

federal agencies are considered appropriated and are subject to the

statutes governing the proper use of federal funds.

The body of enacted appropriation acts for a fiscal year, as amplified by

legislative history and the relevant budget submissions, becomes the

government’s financial plan for that fiscal year. The “execution and

control” phase refers generally to the period of time during which the

budget authority made available by the appropriation acts remains

available for obligation. An agency’s task during this phase is to spend

the money Congress has given it to carry out the objectives of its program

legislation.

The Office of Management and Budget apportions or distributes budgeted

amounts to the executive branch agencies, thereby making funds in

appropriation accounts (administered by the Treasury Department)

available for obligation. 31 U.S.C. §§ 1511–1516. The apportionment

system through which budget authority is distributed by time periods

(usually quarterly) or by activities is intended to achieve an effective and

orderly use of available budget authority, and to reduce the need for

supplemental or deficiency appropriations. Each agency then makes

See, e.g., American Federation of Government Employees v. Federal Labor Relations

Authority, 388 F.3d 405 (3rd Cir. 2004) (a particular working capital fund was appropriated

and, therefore, not available for the reimbursement of personal expenses); United Biscuit

Co. v. Wirtz, 359 F.2d 206, 212 (D.C. Cir. 1965), cert. denied, 384 U.S. 971 (1966)

(military commissary purchases); 35 Comp. Gen. 615 (1986) (restrictions on

reimbursement for certain telephone calls made from private residences); 65 Comp. Gen.

215 (1985) (funds received by National Park Service for visitor reservation services);

64 Comp. Gen. 756 (1985) (Tennessee Valley Authority power program funds); 63 Comp.

Gen. 31 (1983), aff’d upon reconsideration, B-210657, May 25, 1984 (fees collected from

federal credit unions); 60 Comp. Gen. 323 (1981) (Prison Industries Fund); 57 Comp.

Gen. 311 (1978) (commissary surcharges); 50 Comp. Gen. 323 (1970); 35 Comp.

Gen. 436 (1956); B-241488, Mar. 13, 1991 (Customs Service duty collections); B-193573,

Jan. 8, 1979, modified and aff’d, B-193573, Dec. 19, 1979, and B-217578, Oct. 16, 1986

(Saint Lawrence Seaway Development Corporation); B-191761, Sept. 22, 1978; B-67175,

July 16, 1947; and B-217281-O.M., Mar. 27, 1985 (federal procurement regulations

applicable to Pension Benefit Guaranty Corporation revolving funds).

5. Budget Execution: the

Obligation and

Expenditure of Budget

Authority

a. Making Amounts Available

for Obligation:

Apportionment and

Allotment

Chapter 2: The Legal Framework

Page 2-28 GAO-16-464SP

allotments pursuant to the OMB apportionments or other statutory

authority. 31 U.S.C. §§ 1513(d), 1514. An allotment is a delegation of

authority to agency officials that allows them to incur obligations within the

scope and terms of the delegation.

These concepts will be discussed

further in Chapter 5. Further detail on the budget execution phase may

also be found in GAO, A Glossary of Terms Used in the Federal Budget

Process, GAO-05-734SP (Washington, D.C.: Sept. 2005), and OMB

Circular No. A-11, Preparation, Submission and Execution of the Budget,

pt. 4, Instructions on Budget Execution (July 25, 2014).

Every federal department or agency has the fundamental responsibility to

ensure that its application of public funds adheres to the terms of the

pertinent authorization and appropriation acts, as well as any other

relevant statutory provisions. Ensuring the legality of proposed payments

is one of the basic responsibilities of agency certifying officers. Executive

agency management has the responsibility of establishing and

maintaining appropriate accounting and internal controls. 31 U.S.C.

§ 3512(b). The Federal Managers’ Financial Integrity Act of 1982

increased government-wide emphasis on internal accounting and

administrative controls. Agencies must establish internal accounting and

administrative control systems to provide reasonable assurance that

obligations and costs apply with applicable law, that assets are

safeguarded against waste, loss, unauthorized use, or misappropriation,

and that revenues and expenditures are accounted for properly. These

systems must be in accordance with standards prescribed by the

Comptroller General (see GAO, Standards for Internal Control in the

Federal Government, GAO-14-704G (Washington, D.C.: Sept.2014)), and

agencies must conduct annual reviews of their systems in accordance

with Office of Management and Budget (OMB) guidelines and report the

results of these reviews to the President and to Congress. OMB Circular

No. A-123, Management Accountability and Control (Dec. 21, 2004).

The Chief Financial Officers Act of 1990 established a Chief Financial

Officer (CFO) in the cabinet departments and several other executive

branch agencies (commonly known as the “CFO Act agencies”), and

created the Office of Federal Financial Management within OMB to

Note the distinction in terminology: Congress appropriates, OMB apportions, and the

receiving agency allots (or allocates) within the apportionment.

Pub. L. No. 97-255, 96 Stat. 814 (Sept. 8, 1982), codified at 31 U.S.C. §§ 3512(c) and

(d).

b. Audits and Financial

Management

Chapter 2: The Legal Framework

Page 2-29 GAO-16-464SP

oversee federal financial management policy. Pub. L. No. 101-576,

104 Stat. 2838 (Nov. 15, 1990). CFOs must work with OMB to develop

and oversee financial management plans, programs, and activities within

the agency. 31 U.S.C. §§ 901–903. The CFO Act, as amended, also

provides for the preparation and audit of annual agency financial

statements for executive branch agencies.

35 U.S.C. § 3535. In

addition, the Secretary of the Treasury, in coordination with the Director of

the Office of Management and Budget, is required to annually prepare

and submit to the President and the Congress a financial statement for

the executive branch of the government that has been audited by GAO.

31 U.S.C. § 331(e). GAO also regularly audits federal programs under

the various authorities that we summarize in chapter 1.

Many agencies also have an internal audit function performed by an

Office of the Inspector General established under the Inspector General

Act of 1978,

or other law. Inspectors General are charged with

conducting and supervising audits and investigations, promoting

economy, efficiency, and effectiveness, preventing and detecting fraud

and abuse, and providing a means of keeping the head of the agency and

Congress informed about problems and deficiencies relating to the

agency’s programs.

In the final phase of our “life cycle” analogy, an appropriation “dies” in a

sense at the end of its period of obligational availability. There is,

however, an afterlife to the extent of any unexpended balances.

Unexpended balances, both obligated and unobligated, retain a limited

availability for five fiscal years following expiration of the period for which

the source appropriation was made. At midnight on the last day of an

appropriation’s period of availability, the appropriation account expires

and is no longer available for incurring new obligations. The expired

appropriation remains available for 5 years for the purpose of paying

obligations incurred prior to the account’s expiration and adjusting

obligations that were previously unrecorded or under recorded. 31 U.S.C.

§ 1553(a). After 5 years, the expired account is closed and the balances

Requirements for audited agency financial statements were extended to virtually the

entire executive branch by the Government Management Reform Act of 1994 (GMRA),

Pub. L. No. 103-356 (Oct. 13, 1994), and the Accountability of Tax Dollars Act of 2002

(ATDA), Pub. L. No. 107-289 (Nov. 7, 2002).

Pub. L. No. 95-452, 92 Stat. 1101 (Oct. 12, 1978), codified as amended at 5 U.S.C.

app.

c. Account Closing

Chapter 2: The Legal Framework

Page 2-30 GAO-16-464SP

remaining are canceled. 31 U.S.C. § 1552(a). These concepts are

discussed in Chapter 5.

“[S]ome play must be allowed to the joints if the machine is to work.”

Tyson & Brother v. Banton, 273 U.S. 418, 446 (1927) (Justice Holmes,

dissenting).

Throughout this publication, the reader will encounter frequent references

to administrative discretion. The concept of discretion implies choice or

freedom of judgment, and appears in a variety of contexts. There are

many things an agency does every day that involve making choices and

exercising discretion. There is often more than one way to do something,

and reasonable minds may differ as to which way is the best. If a given

choice is within the actor’s legitimate range of discretion, then it is not

illegal.

One type of discretion commonly occurs in the context of purpose

availability. A decision may conclude that an appropriation is legally

available for a particular expenditure if the agency, in its discretion,

determines that the expenditure is a suitable means of accomplishing an

authorized end. For example, as we will see in Chapter 4, an agency has

discretionary authority to provide refreshments at award ceremonies

under the Government Employees Incentive Awards Act, 31 U.S.C.

§§ 4501–4507. Agency A may choose to do so while agency B chooses

not to. As a matter of law, both agencies are correct, even though they

chose differently.

Under the Administrative Procedure Act (APA), action that is “committed

to agency discretion by law” is not subject to judicial review. 5 U.S.C.

§ 701(a)(2). One particularly important example is an agency’s decision

to allocate funds within a lump-sum appropriation. Such decisions are

committed to agency discretion by law and, therefore, are not subject to

judicial review. Lincoln v. Vigil, 508 U.S. 182 (1993). The Court noted

that “the very point of a lump-sum appropriation is to give an agency the

capacity to adapt to changing circumstances and meet its statutory

responsibilities in what it sees as the most effective or desirable way.” Id.

at 191. See also Hein v. Freedom From Religion Foundation, Inc.,

6. Administrative Discretion

Chapter 2: The Legal Framework

Page 2-31 GAO-16-464SP

551 U.S. 587 (2007); 55 Comp. Gen. 307 (1975); B-278121, Nov. 7,

1997.

To say that an agency has freedom of choice in a given matter does not

mean that there are no limits to that freedom. Discretion is not unbridled

license. The decisions have frequently pointed out that discretion means

legal discretion, not unlimited discretion. The point was stated as follows

in 18 Comp. Gen. 285, 292 (1938):

“Generally, the Congress in making appropriations leaves largely to

administrative discretion the choice of ways and means to accomplish the objects

of the appropriation, but, of course, administrative discretion may not transcend

the statutes, nor be exercised in conflict with law, nor for the accomplishment of

purposes unauthorized by the appropriation . . . .”

See also 72 Comp. Gen. 310, 311 (1993); 35 Comp. Gen. 615, 618

(1956); 4 Comp. Gen. 19, 20 (1924); 7 Comp. Dec. 31 (1900); 5 Comp.

Dec. 151 (1898); B-253338, Nov. 23, 1993; B-130288, Feb. 27, 1957;

B-49169, May 5, 1945; A-24916, Nov. 5, 1928.

One way to illustrate the concept of “legal discretion” is to visualize a

person standing in the center of a circle. The circumference of the circle

represents the limits of discretion, imposed either by law or by the difficult

to define but nonetheless real concept of “public policy.”

The person is

free to move in any direction, to stay near the center or to venture close to

the perimeter, even to brush against it, but must stay within the circle. If

On the other hand, the Court also stated in Lincoln v. Vigil that “Congress may always

circumscribe agency discretion to allocate resources by putting restrictions in the

operative statutes.” 508 U.S. at 193. The court explained that “an agency is not free

simply to disregard statutory responsibilities.” Id. In In re Aiken County, the D.C. Circuit

addressed a Nuclear Waste Policy Act requirement, which provided that the Nuclear

Regulatory Commission must consider the Department of Energy’s license application to

store nuclear waste at Yucca Mountain, Nevada, and issue a final decision within three

years of its submission. 725 F.3d 255 (D.C. Cir. 2013). The Commission failed to meet the

statutory deadline and did not take action to review the license application after an

extension was granted. In granting a petition for a writ of mandamus against the

Commission, the D.C. Circuit rebuked the Commission, noting that “the President and

federal agencies may not ignore statutory mandates or prohibitions merely because of

policy disagreement with Congress.” Id. at 260. The court plainly stated: “Congress sets

the policy, not the Commission.” Id.

See, e.g., L’Orange v. Medical Protective Co., 394 F.2d 57 (6th Cir. 1968) (court may

invalidate an act as “contrary to public policy” in the sense of being “injurious to the

public,” even where the act may not be expressly prohibited by statute).

Chapter 2: The Legal Framework

Page 2-32 GAO-16-464SP

our actor crosses the line of the circumference, he has exceeded or, to

use the legal term, “abused” his discretion.

When GAO is performing its audit function, it may criticize a particular

exercise of discretion as ill-conceived, inefficient, or perhaps wasteful.

From the legal standpoint, however, there is no illegal expenditure as long

as the actor remains within the circle. For example, a Coast Guard

employee used his government purchase card to purchase beer brewing

equipment and ingredients. GAO, Purchase Cards: Control Weaknesses

Leave DHS Highly Vulnerable to Fraudulent, Improper, and Abusive

Activity, GAO-06-957T (Washington, D.C.: July 2006), at 30. While on

duty he brewed alcohol for consumption at social functions for the Coast

Guard Academy.

Coast Guard personnel stated that the ingredients

were purchased using funds from a private foundation, and GAO did not

reach any conclusions about the legality of the purchases. Nonetheless,

GAO pointed out that the brewing activities fell “short of prudent use of

taxpayer dollars” and that the private funds “could have been spent for

other purposes, for example educational grants, had they not been used

to brew beer.”

In addition, the size of the circle may vary. For example, as we will see in

Chapter 15, section B, government corporations frequently have a

broader range of discretion than noncorporate agencies.

Where a particular action or decision is committed to agency discretion by

law, the agency is under a legal duty to actually exercise that discretion.

The failure or refusal to exercise discretion committed by law to the

agency can be an abuse of discretion. As the following cases

demonstrate, the fact of exercising discretion and the particular results of

that exercise are two very different things.

We start with a Supreme Court decision, Work v. United States ex rel.

Rives, 267 U.S. 175 (1925). That case involved section 5 of the Dent Act,

ch. 94, 40 Stat. 1272, 1274 (Mar. 2, 1919), under which Congress

authorized the Secretary of the Interior to compensate a class of people

The Coast Guard Academy spent $800 on beer brewing ingredients to brew 532 bottles,

or 12 batches, of beer. The Coast Guard estimated that it took two hours to brew, bottle,

and label each batch of Coast Guard beer. Given a conservative approximate hourly labor

rate of $15, it would cost over $13 for a six-pack of Coast Guard beer—considering the

variable costs alone (ingredients and labor). The Coast Guard provided GAO with a

detailed 5-year analysis showing a cost savings but the analysis failed to account for any

labor costs.

a. Failure or Refusal to

Exercise Discretion

Chapter 2: The Legal Framework

Page 2-33 GAO-16-464SP

who incurred losses in furnishing supplies or services to the government

during World War I. The Secretary’s determinations on particular claims

were to be final and conclusive. The statute “was a gratuity based on

equitable and moral considerations” (id. at 181), vesting the Secretary

with the ultimate power to determine which losses should be

compensated.

The plaintiff in Rives had sought mandamus to compel the Secretary to

consider and allow a claim for a specific loss incurred as a result of the

plaintiff’s obtaining a release from a contract to buy land. The Secretary

had previously denied the claim because he had interpreted the statute

as not embracing money spent on real estate. In holding that the

Secretary had done all that was required by law, the Court cited and

distinguished a line of cases—

“in which a relator in mandamus has successfully sought to compel action by an

officer who has discretion concededly conferred on him by law. The relator

[plaintiff] in such cases does not ask for a decision any particular way but only

that it be made one way or the other.”

Id. at 184.

The Secretary had made a decision on the claim, had articulated reasons

for it, and had not exceeded the bounds of his statutory authority. That

was enough. A court could compel the Secretary to actually exercise his

discretion, that is, to act on a claim one way or the other, but could not

compel him to exercise that discretion to achieve a particular result.

In Simpkins v. Davidson, 302 F. Supp. 456 (S.D. N.Y. 1969), the plaintiff

sued to compel the Small Business Administration (SBA) to make a loan

to him. The court found that the plaintiff was entitled to submit an

application, and to have the SBA consider that application and reach a

decision on whether or not to grant the loan. However, he had no right to

the loan itself, and the court could not compel the SBA to exercise its

discretion to achieve a specific result. A very similar case on this point is

Dubrow v. Small Business Administration, 345 F. Supp. 4 (C.D. Cal.

1972). See also B-226121-O.M., Feb. 9, 1988, citing and applying these

cases.

Another case involved a provision of the Farm and Rural Development

Act that authorized the Secretary of Agriculture to forgo foreclosure on

certain delinquent loans. The plaintiffs were a group of farmers who

alleged that the Secretary had refused to consider their requests. The

Court of Appeals for the Tenth Circuit held that the Secretary was

required to consider the requests:

Chapter 2: The Legal Framework

Page 2-34 GAO-16-464SP

“The word ‘may,’ the Secretary ‘may’ permit deferral, is, in our view, a reference

to the discretion of the Secretary to grant the deferral upon a showing by a

borrower. It does not mean as the Secretary argues that he has the discretion

whether or not to implement the Act at all and not to consider any ‘requests’

under the statutory standards.”

Matzke v. Block, 732 F.2d 799, 801 (10

Cir. 1984).

The Comptroller General applied these principles in a case concerning a

statute that gave agencies discretionary authority to consider and settle

certain employee personal property claims. 62 Comp. Gen. 641 (1983).

GAO concluded that an agency could not adopt a policy of refusing all

claims. While GAO would not purport to tell another agency which claims

it should or should not consider—that part was discretionary—the

decision noted that “a blanket refusal to consider all claims is, in our

opinion, not the exercise of discretion” (id. at 643), and held “that an

agency has the duty to actually exercise its discretion and that this duty is

not satisfied by a policy of refusing to consider all claims” (id. at 645).

Thus, for example, an agency would be within its discretion to make and

announce a policy decision not to consider claims of certain types, such

as claims for stolen cash, or to impose monetary ceilings on certain types

of property, or to establish a minimum amount for the filing of claims.

What it cannot do is disregard the statute in its entirety.

By issuing regulations, an agency may voluntarily (and perhaps even

inadvertently) limit its own discretion. A number of cases have held that

an agency must comply with its own regulations, even if the action is

discretionary by statute.

The leading case is United States ex rel. Accardi v. Shaughnessy,

347 U.S. 260 (1954). The Attorney General had been given statutory

discretion to suspend the deportation of aliens under certain

circumstances, and had, by regulation, given this discretion to the Board

of Immigration Appeals. The Supreme Court held that, regardless of what

the situation would have been if the regulations did not exist, the Board

was required under the regulations to exercise its own judgment, and it

was improper for the Attorney General to attempt to influence that

judgment, in this case, by issuing a list of “unsavory characters” he

wanted to have deported. “In short, as long as the regulations remain

operative, the Attorney General denies himself the right to sidestep the

Board or dictate its decision in any manner.” Id. at 267. Of course, the

Attorney General could always amend his regulations, but an amendment

could operate prospectively only.

b. Regulations May Limit

Discretion

Chapter 2: The Legal Framework

Page 2-35 GAO-16-464SP

Awards under the Government Employees Incentive Awards Act,

5 U.S.C. §§ 4501–4507, as we will discuss in Chapter 4, are wholly

discretionary. GAO reviewed Army regulations that provided that “awards

will be granted” if certain specified criteria were met, and noted that the

Army had circumscribed its own discretion by committing itself to make an

award if those conditions were met. B-202039, May 7, 1982. Reviewing

Air Force regulations under similar legislation applicable to military

personnel, the Court of Claims noted in Griffin v. United States, 215 Ct.

Cl. 710, 714 (1978):

“Thus, we think that the Secretary may have originally had uncontrolled and

unreviewable discretion . . . but as he published procedures and guidelines, as

he received responsive suggestions, as he implemented them and through his

subordinates passed upon compensation claims, we think by his choices he

surrendered some of his discretion, and the legal possibility of abuse of

discretion came into the picture.”

For additional authority on the proposition that an agency can, by

regulation, restrict otherwise discretionary action, see United States v.

Nixon, 418 U.S. 683 (1974); Vitarelli v. Seaton, 359 U.S. 535 (1959);

Service v. Dulles, 354 U.S. 363 (1957); United States v. Morgan,

193 F.3d 252 (4

Cir. 1999); Clarry v. United States, 85 F.3d 1041

Cir. 1996); Waldron v. Immigration & Naturalization Service, 17 F.3d

511, 519 (2

Cir. 1994); Montilla v. Immigration & Naturalization Service,

926 F.2d 162 (2

Cir. 1991). See also B-316381, July 18, 2008;

67 Comp. Gen. 471 (1988).

Recent case law has recognized a number of limits, caveats, and

nuances to the Accardi doctrine. While there are occasional exceptions,

the doctrine generally will not be applied to bind an agency by its informal

rules, policies, or other issuances that the court concludes are intended to

provide internal guidance rather than to confer rights or benefits on the

public. See Farrell v. Department of the Interior, 314 F.3d 584, 591

(Fed. Cir. 2002) (holding that agency statement that was not formally

promulgated is not binding on the agency unless the agency intended to

be bound by it). Even if a court concludes that a rule, or policy document,

is binding on the agency under Accardi, the court may not invalidate the

agency action if it concludes that the departure from the rule was

nonprejudicial or “harmless error.” See Wilkinson v. Legal Services

Corp., 27 F. Supp. 2d 32 (D.D.C. 1998). In addition, the courts are very

reluctant to apply Accardi to criminal proceedings or exercises of

prosecutorial-type discretion, such as an agency decision not to initiate an

enforcement action. See Carranza v. Immigration & Naturalization

Service, 277 F.3d 65, 68 (1

Cir. 2002); United States v. Lee, 274 F.3d

485 (8

Cir. 2001); United States v. Shakir, 113 F. Supp. 2d 1182

Chapter 2: The Legal Framework

Page 2-36 GAO-16-464SP

(M.D. Tenn. 2000); United States v. Briscoe, 69 F. Supp. 2d 738, 747

(D.V.I. 1999), aff’d, 234 F.3d 1266 (3

Cir. 2000); Nichols v. Reno,

931 F. Supp. 748 (D. Colo. 1996); Walker v. Reno, 925 F. Supp. 124

(N.D. N.Y. 1995).

Sometimes the actual funding Congress appropriates for a program may

fall short of original expectations. What is an agency to do when it finds

that it does not have enough money to accommodate an entire class of

beneficiaries? Obviously, it can ask Congress for more. However, as

any program administrator knows, asking and getting are two different

things. If the agency cannot get additional funding and the program

legislation fails to provide guidance, the agency may, within its discretion,

establish reasonable classifications, priorities, and/or eligibility

requirements, as long as it does so on a rational and consistent basis.

As the Supreme Court explained in a case involving an assistance

program administered by the Bureau of Indian Affairs (BIA):

“[I]t does not necessarily follow that the Secretary is without power to create

reasonable classifications and eligibility requirements in order to allocate the

limited funds available to him for this purpose. [Citations omitted.] Thus, if there

were only enough funds appropriated to provide meaningfully for 10,000 needy

Indian beneficiaries and the entire class of eligible beneficiaries numbered

20,000, it would be incumbent upon the BIA to develop an eligibility standard to

deal with this problem, and the standard, if rational and proper, might leave some

of the class otherwise encompassed by the appropriation without benefits. But in

such a case the agency must, at a minimum, let the standard be generally known

so as to assure that it is being applied consistently and so as to avoid both the

reality and the appearance of arbitrary denial of benefits to potential

beneficiaries.”

Morton v. Ruiz, 415 U.S. 199, 230–31 (1974).

In one case, the plaintiff sued for construction differential subsidy

payments under the Merchant Marine Act, administered by the Maritime

Administration (MarAd). Suwannee River Finance, Inc. v. United States,

Even under an entitlement program, an agency could presumably meet a funding

shortfall by such measures as making prorated payments, but such actions would be only

temporary pending receipt of sufficient funds to honor the underlying obligation. The

recipient would remain legally entitled to the balance.

Issues similar to those involved with entitlement programs sometimes arise when payment

recipients have a contractual relationship with the government. We discuss this issue

further in Chapter 6, Availability of Appropriations: Amount.

c. Insufficient Funds

Chapter 2: The Legal Framework

Page 2-37 GAO-16-464SP

7 Cl. Ct. 556 (1985). In response to a sudden and severe budget

reduction, MarAd had cut off all subsidies for nonessential changes after

a specified date, and had notified the plaintiff to that effect. Noting that

“[a]fter this budget cut, MarAd obviously could no longer be as generous

in paying subsidies as it had been before,” the court held MarAd’s

approach to be “a logical, effective and time-honored method for

allocating the burdens of shrinking resources” and well within its

administrative discretion. Id. at 561.

In another example, due to a severe drought in the summer of 1980, the

Small Business Administration (SBA) found that its appropriation was not

sufficient to meet demand under its disaster loan program. B-202568,

Sept. 11, 1981. Rather than treating applicants on a “first come, first

served” basis, SBA amended its regulations to impose several new

restrictions, including a ceiling of 60 percent of actual physical loss. GAO

reviewed SBA’s actions and found them completely within the agency’s

administrative discretion.

A conceptually related situation is a funding shortfall in an appropriation

used to fund a number of programs. Again, the agency must allocate its

available funds in some reasonable fashion. Mandatory programs take

precedence over discretionary ones.

Within the group of mandatory

programs, more specific requirements should be funded first, such as

those with specific time schedules, with remaining funds then applied to

the more general requirements. B-159993, Sept. 1, 1977; B-177806,

Feb. 24, 1978 (nondecision letter). These principles apply equally, of

course, to the allocation of funds between mandatory and nonmandatory

expenditures within a single-program appropriation. E.g., 61 Comp.

Gen. 661, 664 (1982).

Other cases recognizing an agency’s discretion in coping with funding

shortfalls are City of Los Angeles v. Adams, 556 F.2d 40, 49–50

(D.C. Cir. 1977), and McCarey v. McNamara, 390 F.2d 601 (3

Cir.

1968).

A “mandatory program,” as we use the term here, should not be confused with the

entitlement programs previously noted. A mandatory program is simply one that

Congress directs (rather than merely authorizes) the agency to conduct, but within the

limits of available funding. Entitlement programs would take precedence over these

mandatory programs.

Chapter 2: The Legal Framework

Page 2-38 GAO-16-464SP

For a variety of reasons, agencies have a legitimate need for a certain

amount of flexibility to deviate from their budget estimates. Two ways to

shift money are transfer and reprogramming. While the two concepts are

related in this broad sense, they are nevertheless different.

Transfer is the shifting of funds between appropriations.

For example, if

an agency receives one appropriation for Operations and Maintenance

and another for Capital Expenditures, a shifting of funds from either one

to the other is a transfer.

(1) Transfers are Prohibited without Statutory Authority

Agencies may transfer funds only when expressly authorized by law:

“An amount available under law may be withdrawn from one appropriation

account and credited to another or to a working fund only when authorized by

law.”

31 U.S.C. § 1532. In addition to this express prohibition, an unauthorized

transfer would violate 31 U.S.C. § 1301(a) (which prohibits the use of

appropriations for other than their intended purpose), would constitute an

unauthorized augmentation of the receiving appropriation, and could, if

the transfer led to overobligating the receiving appropriation, result in an

Antideficiency Act (31 U.S.C. § 1341) violation as well. E.g., B-286929,

Apr. 25, 2001; B-248284.2, Sept. 1, 1992; B-222009-O.M., Mar. 3, 1986;

15 Op. Off. Legal Counsel 74 (1991).

Transfers without statutory authority are equally forbidden whether they

are (1) transfers from one agency to another,

(2) transfers from one

account to another within the same agency,

or (3) transfers to an

GAO, A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP

(Washington, D.C.: Sept. 2005), at 95.

7 Comp. Gen. 524 (1928); 4 Comp. Gen. 848 (1925); 17 Comp. Dec. 174 (1910).

Cases in which adequate statutory authority was found to exist are B-302760, May 17,

2004 (the transfer of funds from the Library of Congress to the Architect of the Capitol for

construction of a loading dock at the Library is authorized), and B-217093, Jan. 9, 1985

(the transfer from Japan-United States Friendship Commission to Department of

Education to partially fund study of Japanese education is authorized).

70 Comp. Gen. 592 (1991); 65 Comp. Gen. 881 (1986); 33 Comp. Gen. 216 (1953);

33 Comp. Gen. 214 (1953); 17 Comp. Dec. 7 (1910); B-286661, Jan. 19, 2001; B-206668,

Mar. 15, 1982; B-178205.80, Apr. 13, 1976; B-164912-O.M., Dec. 21, 1977.

7. Transfer and

Reprogramming

a. Transfer

Chapter 2: The Legal Framework

Page 2-39 GAO-16-464SP

interagency or intra-agency working fund.

In each instance, statutory

authority is required. An agency’s erroneous characterization of a

proposed transfer as a “reprogramming” is irrelevant. See B-202362,

Mar. 24, 1981. Moreover, informal congressional approval of an

unauthorized transfer of funds between appropriation accounts does not

have the force and effect of law. B-248284.2, Sept. 1, 1992.

The prohibition applies even if the transfer is intended as a temporary

expedient (for example, to alleviate a temporary exhaustion of funds) and

the agency contemplates reimbursement. Thus, without statutory

authority, an agency cannot “borrow” from another account or another

agency. 36 Comp. Gen. 386 (1956); 13 Comp. Gen. 344 (1934);

B-290011, Mar. 25, 2002.

The prohibition against transfer would not apply to “transfers” of an

agency’s administrative allocations within a lump-sum appropriation since

the allocations are not legally binding.

This is a reprogramming, which

we discuss below. Thus, where the then Department of Health,

Education, and Welfare received a lump-sum appropriation covering

several grant programs, it could set aside a portion of each program’s

allocation for a single fund to be used for “cross-cutting” grants intended

to serve more than one target population, as long as the grants were for

projects within the scope or purpose of the lump-sum appropriation.

B-157356, Aug. 17, 1978.

(2) Transfers Authorized By Law

Statutory transfer authority does not require any particular “magic words.”

Of course the word “transfer” will help, but it is not necessary as long as

the words that are used make it clear that transfer is being authorized.

B-213345, Sept. 26, 1986; B-217093, Jan. 9, 1985; B-182398, Mar. 29,

1976 (letter to Senator Laxalt), modified on other grounds by 64 Comp.

Gen. 370 (1985).

Some agencies have limited transfer authority either in permanent

legislation or in appropriation act provisions. Such authority will

26 Comp. Gen. 545, 548 (1947); 19 Comp. Gen. 774 (1940); 6 Comp. Gen. 748 (1927);

4 Comp. Gen. 703 (1925).

The agency must ensure that a transfer of administrative allocations does not, under its

own fund control regulations, produce a violation of 31 U.S.C. § 1517(a), discussed further

in Chapter 6.

Chapter 2: The Legal Framework

Page 2-40 GAO-16-464SP

commonly set a percentage limit on the amount that may be transferred

from a given appropriation and/or the amount by which the receiving

appropriation may be augmented. B-290659, Oct. 31, 2002; B-167637,

Oct. 11, 1973. For example, the Department of Agriculture may make

transfers between its appropriations. 7 U.S.C. § 2257. The amount of

such transfers may not exceed seven percent of the “donor” appropriation

and the receiving appropriation may not be augmented by more than

seven percent except in extraordinary emergencies.

See also

B-279886, Apr. 28, 1998 (noting five percent limit on transfer in

Department of Justice appropriation).

If an agency has transfer authority of this type, its exercise is not

precluded by the fact that the amount of the receiving appropriation had

been reduced from the agency’s budget request. B-151157, June 27,

1963. Also, the transfer statute is an independent grant of authority and,

unless expressly provided otherwise, the percentage limitations do not

apply to transfers under any separate transfer authority the agency may

have. B-239031, June 22, 1990.

As mentioned above, Congress may also authorize one agency to

transfer funds to another agency. For example, the Federal Transit

Administration (FTA) must make a designated amount of funds

appropriated to its capital investment grant program available to the

Denali Commission. 49 U.S.C. § 5309(m)(6). Because FTA has specific

direction to transfer the funds, it should make the transfers using the

Department of Treasury’s nonexpenditure transfer procedures, not the

Economy Act or other interagency agreements. B-319189, Nov. 12,

2010.

The prohibition against transfer applies not only to interagency funds, but

to the consolidation of all or parts of different appropriations of the same

agency into a single fund as well. In a few instances, an agency may

“pool” portions of agency unit appropriations to implement a particular

statute. For example, an agency could transfer portions of unit

appropriations to an agencywide pool to fund the Merit Pay System

established by the Civil Service Reform Act of 1978. B-195775, Sept. 10,

1979. The transfers, while not explicitly authorized in the statute, were

necessary to implement the law and carry out the legislative purpose.

Similarly, the Treasury Department could pool portions of appropriations

Cases construing this provision include 33 Comp. Gen. 214; B-218812, Jan. 23, 1987;

B-123498, Apr. 11, 1955; and B-218812-O.M., July 30, 1985.

Chapter 2: The Legal Framework

Page 2-41 GAO-16-464SP

made to several separate bureaus to fund an Executive Development

Program also authorized by the Civil Service Reform Act. 60 Comp.

Gen. 686 (1981). However, pooling that would alter the purposes for

which funds were appropriated is an impermissible transfer unless

authorized by statute. E.g., B-209790-O.M., Mar. 12, 1985. It is also

impermissible to transfer more than the cost of the goods or services

provided to an ordering agency. 70 Comp. Gen. 592, 595 (1991).

Congress may reappropriate an unexpended balance for a different

purpose. Such funds cease to be available for the purposes of the

original appropriation. 18 Comp. Gen. 564 (1938); A-79180, July 30,

1936. Cf. 31 U.S.C. § 1301(b) (reappropriation for different purpose to be

accounted for as a new appropriation). If the reappropriation is of an

amount “not to exceed” a specified sum, and the full amount is not

needed for the new purpose, the balance not needed reverts to the

source appropriation. 18 Comp. Gen. at 565.

(3) Transfer Authority of General Applicability, Including the Account

Adjustment Statute

Under the account adjustment statute, an agency may temporarily charge

one appropriation for an expenditure benefiting another appropriation of

the same agency, as long as amounts are available in both appropriations

and the accounts are adjusted to reimburse the appropriation initially

charged during or as of the close of the same fiscal year. 31 U.S.C.

§ 1534. This statute facilitates “common service” activities. See

generally S. Rep. No. 89-1284 (1966). For example, an agency procuring

equipment to be used jointly by several bureaus or offices within the

agency funded under separate appropriations may initially charge the

entire cost to a single appropriation and later apportion the cost among

the appropriations of the benefiting components.

Under the account adjustment statute, the Department of Homeland

Security’s Preparedness Directorate had authority to fund shared services

that benefited the directorate as a whole by initially obligating the services

against one appropriation within the directorate and then allocating the

costs to the benefiting appropriations. B-308762, Sept. 17, 2007.

However, the Directorate did not appear to properly allocate the costs.

To the extent it did not properly record its obligations prior to the end of

the fiscal year against each benefiting appropriation for the estimated

value of the services each appropriation received, as required by the

account adjustment statute, the Directorate improperly augmented its

appropriations.

Chapter 2: The Legal Framework

Page 2-42 GAO-16-464SP

Another type of transfer authority is illustrated by 31 U.S.C. § 1531, which

authorizes the transfer of unexpended balances incident to executive

branch reorganizations, but only for purposes for which the appropriation

was originally available. Cases discussing this authority include

31 Comp. Gen. 342 (1952) and B-92288 et al., Aug. 13, 1971.

(4) Restrictions Applicable to Transferred Amounts

The precise parameters of transfer authority will, of course, depend on

the terms of the statute which grants it. As an initial matter, an amount

transferred from one appropriation to another is available “for the same

purpose and subject to the same limitations provided by the law

appropriating the amount.” 31 U.S.C. § 1532.

For example, funds withdrawn from other agencies’ appropriations and

credited to the Library of Congress FEDLINK revolving fund retained their

time character and did not assume the time character of the FEDLINK

revolving fund. B-288142, Sept. 6, 2001. The Library of Congress

proposed retaining in the fund amounts of fiscal year money advanced by

other agencies in earlier fiscal years when orders were placed and, to the

extent the advances were not needed to cover the costs of the orders,

applying the excess amounts to new orders placed in subsequent fiscal

years. The Library pointed out that the law establishing the revolving fund

made amounts in the fund available without fiscal year limitation. The

Comptroller General concluded that “amounts withdrawn from a fiscal

year appropriation and credited to a no year revolving fund, such as the

FEDLINK revolving fund, are available for obligation only during the fiscal

year of availability of the appropriation from which the amount was

withdrawn.” Id. Section 1532 is a significant control feature protecting

Congress’s constitutional prerogatives of the purse. Placing time limits on

the availability of appropriations is a fundamental means of congressional

control because it permits Congress to periodically review a given

agency’s programs and activities. Given the significance of time

restrictions in preserving congressional powers of the purse, GAO looks

for clear legislative expressions of congressional intent before interpreting

legislation to override time limitations that Congress, through the

appropriations process, has imposed on an agency’s use of funds. The

Comptroller General rejected the Library’s view that the language in the

FEDLINK statute overrode the time limitation imposed on funds

transferred into FEDLINK because, until the Library had earned those

Chapter 2: The Legal Framework

Page 2-43 GAO-16-464SP

amounts by performing the services ordered from the Library, these

transferred amounts were not a part of the corpus of FEDLINK.

Id.

Restrictions applicable to the receiving account but not to the donor

account may or may not apply. Where transfers are intended to

accomplish a purpose of the source appropriation (Economy Act

transactions, for example), transferred funds have been held not subject

to such restrictions.

E.g., 21 Comp. Gen. 254 (1941); 18 Comp. Gen.

489 (1938); B-35677, July 27, 1943; B-131580-O.M., June 4, 1957.

However, for transfers intended to permit a limited augmentation of the

receiving account (7 U.S.C. § 2257, for example), this principle is

arguably inapplicable in view of the fundamentally different purpose of the

transfer.

Some transfer statutes have included requirements for approval by one or

more congressional committees. In light of the Supreme Court’s decision

in Immigration & Naturalization Service v. Chadha, 462 U.S. 919 (1983),

such “legislative veto” provisions are no longer valid. Whether the

transfer authority to which the veto provision is attached remains valid

depends on whether it can be regarded as severable from the approval

requirement. This in turn depends on an evaluation, in light of legislative

history and other surrounding circumstances, of whether Congress would

have enacted the substantive authority without the veto provision. See,

e.g., 15 Op. Off. Legal Counsel 49 (1991) (the Justice Department’s

Office of Legal Counsel (OLC) concluded that an unconstitutional

legislative veto provision of the Selective Service Act was severable from

the statute’s grant of authority to the President to obtain expedited

delivery of military contracts); 6 Op. Off. Legal Counsel 520 (1982) (OLC

concluded that a Treasury Department transfer provision was severable

and therefore survived a legislative veto provision).

In 1985, the Deputy Secretary of Defense made the following statement:

“The defense budget does not exist in a vacuum. There are forces at work to

play havoc with even the best of budget estimates. The economy may vary in

See also B-317878, Mar. 3, 2009; 23 Comp. Gen. 668 (1944); 31 Comp. Gen. 109,

114–15 (1951); 28 Comp. Gen. 365 (1948); 26 Comp. Gen. at 548; 18 Comp. Gen. 489

(1938); 17 Comp. Gen. 900 (1938); 17 Comp. Gen. 73 (1937); 16 Comp. Gen. 545 (1936);

B-167034-O.M., Jan. 20, 1970.

We discuss the Economy Act in detail in Chapter 12, Acquisition and Provision of

Goods and Services.

b. Reprogramming

Chapter 2: The Legal Framework

Page 2-44 GAO-16-464SP

terms of inflation; political realities may bring external forces to bear; fact-of-life or

programmatic changes may occur. The very nature of the lengthy and

overlapping cycles of the budget process poses continual threats to the integrity

of budget estimates. Reprogramming procedures permit us to respond to these

unforeseen changes and still meet our defense requirements.”

The thrust of this statement, while made from the perspective of the

Defense Department, applies at least to some extent to all agencies.

Reprogramming is the shifting of funds within an appropriation to

purposes other than those contemplated at the time of appropriation.

GAO, A Glossary of Terms Used in the Federal Budget Process,

GAO-05-734SP (Washington, D.C.: Sept. 2005), at 85. More specifically,

it is the application of appropriations within a particular account to

purposes, or in amounts, other than those justified in the budget

submissions or otherwise considered or indicated by congressional

committees in connection with the enactment of appropriation

legislation.

B-323792, Jan. 23, 2012; B-164912-O.M., Dec. 21, 1977.

The term “reprogramming” appears to have come into use in the

mid-1950s although the practice, under different names, predates that

time.

Reprogramming is best understood in comparison to the transfer. A

transfer shifts budget authority from one appropriation to another. In

contrast, a reprogramming shifts funds within a single appropriation.

Agencies generally may transfer funds only with explicit statutory

authority. 31 U.S.C. § 1532; 70 Comp. Gen. 592 (1991). In contrast,

agencies generally are free to reprogram, even if doing so is inconsistent

with the budget estimates presented to the Congress, as long as the

resulting obligations and expenditures are consistent with the purpose

restrictions applicable to the appropriation. See Lincoln v. Vigil, 508 U.S.

182, 192 (1993) (“After all, the very point of a lump-sum appropriation is

to give an agency the capacity to adapt to changing circumstances and

meet its statutory responsibilities in what it sees as the most effective or

Reprogramming Action Within the Department of Defense: Hearing Before the House

Armed Services Committee (Sept. 30, 1985) (remarks prepared for delivery by The

Honorable William H. Taft IV, Deputy Secretary of Defense, unprinted).

The term “reprogramming” appears to have come into use in the mid-1950s although

the practice, under different names, predates that time. Louis Fisher, Presidential

Spending Power, 76–77 (1975). Fisher also briefly traces the evolution of the concept.

Id. Fisher also briefly traces the evolution of the concept.

Chapter 2: The Legal Framework

Page 2-45 GAO-16-464SP

desirable way”); B-323792, Jan. 23, 2013; B-279338, Jan. 4, 1999;

B-215002, Aug. 3, 1987; B-196854.3, Mar. 19, 1984 (Congress is

“implicitly conferring the authority to reprogram” by enacting lump-sum

appropriations); 55 Comp. Gen. 307 (1975); B-123469, May 9, 1955;

4B Op. Off. Legal Counsel 701 (1980) (discussing the Attorney General’s

authority to reprogram to avoid deficiencies). This is true even though the

agency may already have administratively allotted the funds to a

particular object. 20 Comp. Gen. 631 (1941). In some situations, an

agency may be required to reprogram funds to satisfy other obligations.

E.g., Cherokee Nation of Oklahoma v. Leavitt, 543 U.S. 631, 641–43

(2005) (government must reprogram unrestricted funds to cover

contractual obligations); Blackhawk Heating & Plumbing Co. v. United

States, 622 F.2d 539, 552 n.9 (satisfaction of obligations under a

settlement agreement).

For example, the United States Information Agency (USIA) received two

appropriations: one for salaries and expenses and another for radio

construction. B-248284.2, Sept. 1, 1992. USIA wished to obligate

$4.6 million for an exhibition. Though its salaries and expenses

appropriation was available for this purpose, the agency had insufficient

funds remaining in that appropriation. Instead, USIA used its radio

construction appropriation for the exhibition. Though the agency

characterized its use of funds from the radio construction appropriation as

a “reprogramming,” the characterization was improper because the radio

construction appropriation was not available for the purpose of funding an

exhibition. Id. If USIA had the requisite statutory authority, it could have

transferred the amount from its radio construction appropriation to its

salaries and expenses appropriation. However, USIA lacked such

transfer authority.

Though agencies generally have authority to reprogram funds, Congress

may limit this authority. For example, Congress required the Commodity

Futures Trading Commission to notify the Senate and House Committees

on Appropriations prior to obligating or expending funds through a

reprogramming to undertake certain enumerated activities.

B-323792,

Jan. 23, 2013. In the face of such restrictions, a key question is whether

a particular shifting of funds is, in fact, a reprogramming. A comparison to

transfers is useful. Agencies may transfer amounts only if they have

For further examples of statutory reprogramming controls, see B-319009, Apr. 27,

2010; B-283599.2, Sept. 29, 1999; B-279886, Apr. 28, 1998; B-164912-O.M., Dec. 21,

1977.

Chapter 2: The Legal Framework

Page 2-46 GAO-16-464SP

statutory authority. It is comparatively easy to assess a transfer: each

appropriation is well-defined and delineated with specific language in an

appropriations act. The shifting of funds from one of these appropriations

to another is a transfer. In contrast, a reprogramming is a shifting of

funds from one purpose to another within a single appropriation. The

appropriations act does not set forth the subdivisions that are relevant to

determine whether an agency has reprogrammed funds. Therefore,

reference to the language of the relevant appropriations act sheds little

light on whether a particular shifting of funds is indeed a reprogramming.

Nevertheless, it is imperative to define the necessary subdivisions to give

meaning and force to statutory provisions that restrict an agency’s

authority to reprogram. Typically, the itemizations and categorizations in

the agency’s budget documents as well as statements in committee

reports and the President’s budget submission, contain the subdivisions

within an agency’s appropriation that are relevant to determine whether

an agency has reprogrammed funds. B 323792, Jan. 23, 2013. For

instance, for FY 2012, the Commodity Futures Trading Commission

(CFTC) received a single lump-sum appropriation. Id. CFTC’s FY 2012

budget request included an item within that lump sum to fund an Office of

Proceedings. A reprogramming would occur if CFTC shifted amounts

that it had previously designated to carry out the functions of the Office of

Proceedings to carry out different functions.

Some statutory reprogramming restrictions also provide for committee

approval. As in the case of transfer, under the Supreme Court’s decision

in Immigration & Naturalization Service v. Chadha, 462 U.S. 919 (1983),

statutory committee approval or veto provisions are no longer

permissible. However, an agency may continue to observe committee

approval procedures as part of its informal arrangements, although they

would not be legally binding. B-196854.3, Mar. 19, 1984.

In addition to various statutory reprogramming restrictions, many non-

statutory reprogramming arrangements exist between various agencies

and their congressional oversight committees. These arrangements often

include procedures for notification. These non-statutory arrangements do

not have the force and effect of law. Lincoln v. Vigil, 508 U.S. 182, 192

(1993); TVA v. Hill, 437 U.S. 153, 191 (1978); 55 Comp. Gen. 307, 319

(1975). However, “we hardly need to note that an agency’s decision to

ignore congressional expectations may expose it to grave political

consequences.” Lincoln, 508 U.S. at 193. There are, at present, no

Chapter 2: The Legal Framework

Page 2-47 GAO-16-464SP

reprogramming guidelines applicable to all agencies. As one might

expect, reprogramming policies, procedures, and practices vary

considerably among agencies.

For example, in view of the nature of its

activities and appropriation structure, the Defense Department has

detailed and sophisticated procedures.

While an agency’s basic mission is to carry out its programs with the

funds Congress has appropriated, there is also the possibility that, for a

variety of reasons, the full amount appropriated by Congress will not be

expended or obligated by the administration. Under the Impoundment

Control Act of 1974, an impoundment is an action or inaction by an officer

or employee of the United States that delays or precludes the obligation

or expenditure of budget authority provided by Congress. 2 U.S.C.

§§ 682(1), 683.

The act applies to “Salaries and Expenses”

appropriations as well as program appropriations. See, e.g., B-320091,

July 23, 2010; 64 Comp. Gen. 370, 375–76 (1985).

There are two types of impoundment actions: deferrals and rescission

proposals. In a deferral, an agency temporarily withholds or delays funds

from obligation or expenditure. The President is required to submit a

special message to Congress reporting any deferral of budget authority.

Deferrals are authorized only to provide for contingencies, to achieve

savings made possible by changes in requirements or greater efficiency

GAO reports in this area include: GAO, Information on Reprogramming Authority and

Trust Funds, AIMD-96-102R (Washington, D.C.: June 7, 1996); Economic Assistance:

Ways to Reduce the Reprogramming Notification Burden and Improve Congressional

Oversight, GAO/NSIAD-89-202 (Washington, D.C.: Sept. 21, 1989) (foreign assistance

reprogramming); Budget Reprogramming: Opportunities to Improve DOD's

Reprogramming Process, GAO/NSIAD-89-138 (Washington, D.C.: July 24, 1989); Budget

Reprogramming: Department of Defense Process for Reprogramming Funds,

GAO/NSIAD-86-164BR (Washington, D.C.: July 16, 1986).

See Department of Defense Financial Management Regulation 7000.14-R, vol. 3 ch. 6,

Reprogramming of DoD Appropriated Funds (Sept. 2015).

For a detailed discussion of impoundment before the 1974 legislation, see B-135564,

July 26, 1973.

8. Impoundment:

Precluding the Obligation

or Expenditure of Budget

Authority

Chapter 2: The Legal Framework

Page 2-48 GAO-16-464SP

of operations, or as otherwise specifically provided by law.

A deferral

may not be proposed for a period beyond the end of the fiscal year in

which the special message reporting it is transmitted, although, for

multiple year funds, nothing prevents a new deferral message covering

the same funds in the following fiscal year. 2 U.S.C. §§ 682(1), 684.

A rescission involves the cancellation of budget authority previously

provided by Congress (before that authority would otherwise expire), and

can be accomplished only through legislation. See, e.g., B-322906,

July 19, 2012 (update of statistical data concerning rescissions proposed

and enacted since the passage of the Impoundment Control Act of 1974

through fiscal year 2011); GAO, Impoundment Control Act: Use and

Impact of Rescission Procedures, GAO-10-320T (Washington, D.C.:

Dec. 16, 2009) (testimony containing useful charts and reflections on the

use of rescissions as a budget tool). The President must advise

Congress of any proposed rescissions, again in a special message. The

President is authorized to withhold budget authority that is the subject of a

rescission proposal for a period of 45 days of continuous session

following receipt of the proposal. Unless Congress acts to approve the

These requirements are repeated in 31 U.S.C. § 1512(c), which prescribes conditions

for establishing reserves through the apportionment process. The President’s deferral

authority under the Impoundment Control Act thus mirrors his authority to establish

reserves under the Antideficiency Act. In other words, deferrals are authorized only in

those situations in which reserves are authorized under the Antideficiency Act. GAO,

Impoundment Control: President’s Third Special Impoundment Message for FY 1990,

GAO/OGC-90-4 (Washington, D.C.: Mar. 6, 1990). Deferrals for policy reasons are not

authorized. 2 U.S.C. § 684(b).

Under the original 1974 legislation, a deferral could be overturned by the passage of an

impoundment resolution by either the House or the Senate. This “legislative veto”

provision was found unconstitutional in City of New Haven v. United States, 809 F.2d 900

(D.C. Cir. 1987), and the statute was subsequently amended to remove it. See Pub. L.

No. 100-119, § 206, 101 Stat. 754 (Sept. 29, 1987), codified at 2 U.S.C. § 684(b).

Congress may, of course, enact legislation disapproving a deferral and requiring that the

deferred funds be made available for obligation.

Chapter 2: The Legal Framework

Page 2-49 GAO-16-464SP

proposed rescission within that time, the budget authority must be made

available for obligation. 2 U.S.C. §§ 682(3), 683, 688.

The Impoundment Control Act requires the Comptroller General to

monitor the performance of the executive branch in reporting proposed

impoundments to Congress. A copy of each special message reporting a

proposed deferral or rescission must be delivered to the Comptroller

General, who then must review each such message and present his

views to the Senate and House of Representatives. 2 U.S.C. § 685(b). If

the Comptroller General finds that the executive branch has established a

reserve or deferred budget authority and failed to transmit the required

special message to Congress, the Comptroller General so reports to

Congress. 2 U.S.C. § 686(a); GAO, Impoundment Control: Deferrals of

Budget Authority in GSA, GAO/OGC-94-17 (Washington, D.C.: Nov. 5,

1993) (unreported impoundment of General Service Administration

funds); Impoundment Control: Comments on Unreported Impoundment of

DOD Budget Authority, GAO/OGC-92-11 (Washington, D.C.: June 3,

1992) (unreported impoundment of V-22 Osprey funds). The Comptroller

General also reports to Congress on any special message transmitted by

the executive branch that has incorrectly classified a deferral or a

rescission. 2 U.S.C. § 686(b). GAO will construe a deferral as a de facto

rescission if the timing of the proposed deferral is such that “funds could

be expected with reasonable certainty to lapse before they could be

obligated, or would have to be obligated imprudently to avoid that

consequence.” 54 Comp. Gen. 453, 462 (1974). Upon request, GAO will

In 1996, the Congress enacted the Line Item Veto Act, Pub. L. No. 104-130, 110 Stat.

1200 (Apr. 9, 1996), which was codified at 2 U.S.C. §§ 691–692. The Line Item Veto Act

(Veto Act) gave the President the power to “cancel in whole” three types of provisions

already enacted into law: (1) any dollar amount of discretionary budget authority, (2) any

item of new direct spending, or (3) any limited tax benefit. The Veto Act imposed

procedures for the President to follow whenever he exercised this cancellation authority.

The Veto Act also provided for expedited congressional consideration of bills introduced to

disapprove the cancellations. The Supreme Court held that because the Veto Act

established cancellation procedures that authorized the President, by canceling already

enacted provisions of law, “to create a different law—one whose text was not voted on by

either House of Congress or presented to the President for signature,” it violated the

Presentment Clause (U.S. Const. art. I, § 7) and thus was unconstitutional. Clinton v. City

of New York, 524 U.S. 417, 448 (1998).

Chapter 2: The Legal Framework

Page 2-50 GAO-16-464SP

also assess whether executive branch agencies have withheld funds

proposed for cancellation in the President’s budget.

If, under the Impoundment Control Act, the executive branch is required

to make budget authority available for obligation (if, for example,

Congress does not pass a rescission bill) and fails to do so, the

Comptroller General is authorized to bring a civil action in the U.S. District

Court for the District of Columbia to require that the budget authority be

made available. 2 U.S.C. § 687.

The expiration of budget authority or delays in obligating it resulting from

ineffective or unwise program administration are not regarded as

impoundments unless accompanied by or derived from an intention to

withhold the budget authority. B-229326, Aug. 29, 1989. Similarly, an

improper obligation, although it may violate several other statutes, is

generally not an impoundment. 64 Comp. Gen. 359 (1985).

There is also a distinction between deferrals, which must be reported, and

“programmatic” delays, which are not impoundments and are not

reportable under the Impoundment Control Act. A programmatic delay is

one in which operational factors unavoidably impede the obligation of

budget authority, notwithstanding the agency’s reasonable and good faith

efforts to implement the program. B-290659, July 24, 2002; GAO,

Impoundment Control: Deferral of DOD Budget Authority Not Reported,

GAO/OGC-91-8 (Washington, D.C.: May 7, 1991); Impoundment Control:

Deferrals of Budget Authority for Military Construction Not Reported,

GAO/OGC-91-3 (Washington, D.C.: Feb. 5, 1991). Since intent is a

relevant factor, the determination requires a case-by-case evaluation of

the agency’s justification in light of all of the surrounding circumstances.

A programmatic delay may become a reportable deferral if the

programmatic basis ceases to exist.

Delays resulting from the following factors may be programmatic,

depending on the facts and circumstances involved:

In 2006, GAO reported to Congress that in 13 instances executive agencies had

impounded funds that the President had proposed for cancellation. B-308011, Aug. 4,

2006; B-307122.2, Mar. 2, 2006. When the President proposed cancellation of these

funds, the Administration had not submitted reports of impoundments under the

Impoundment Control Act because, officials explained, the Administration was not

withholding funds from obligation. In all 13 instances, the agencies released impounded

funds as a result of GAO’s inquiries. Id.

Chapter 2: The Legal Framework

Page 2-51 GAO-16-464SP

• conditions on availability for using funds not met (B-290659, July 24,

2002);

• contract delays due to shipbuilding design modification, verification,

or changes in scope (GAO/OGC-90-4);

• uncertainty as to the amount of budget authority that will ultimately be

available for the program (B-203057, Sept. 15, 1981; B-207374,

July 20, 1982, noting that the uncertainty is particularly relevant when

it “arises in the context of continuing resolution funding, where

Congress has not yet spoken definitively”);

• time required to set up the program or to comply with statutory

conditions on obligating the funds (B-96983, B-225110, Sept. 3,

1987);

• compliance with congressional committee directives (B-221412,

Feb. 12, 1986);

• delay in receiving a contract proposal requested from contemplated

sole source awardee (B-115398, Feb. 6, 1978);

• historically low loan application level (B-115398, Sept. 28, 1976);

• late receipt of complete loan applications (B-195437.3, Feb. 5, 1988);

• delay in awarding grants pending issuance of necessary regulations

(B-171630, May 10, 1976); and

• administrative determination of allowability and accuracy of claims for

grant payments (B-115398, Oct. 16, 1975).

GAO did find an impoundment, as opposed to a programmatic delay, in a

1991 case. The Department of Defense withheld military construction

funds to improve program efficiency, not because of an unavoidable

delay. Because the Department did not take the necessary steps to

implement the program while funds were temporarily unobligated, the

withholding constituted an impoundment. B-241514.2, Feb. 5, 1991.

The Balanced Budget and Emergency Deficit Control Act of 1985

(BBEDCA) established a process known as “sequestration” to enforce

certain deficit reduction goals.

It was enacted to deal with a growing

budget deficit (excess of total outlays over total receipts for a given fiscal

year). 2 U.S.C. § 622(6). BBEDCA established ‘‘maximum deficit

Pub. L. No. 99-177, title II, 99 Stat. 1037, 1038 (Dec. 12, 1985).

9. Deficit Reduction: the

Balanced Budget and

Emergency Deficit

Control Act

Chapter 2: The Legal Framework

Page 2-52 GAO-16-464SP

amounts’’ for fiscal years 1985 to 1990. Pub. L. No. 99-177, § 201(a)(1).

If the deficit exceeded these statutory limits, the President was required to

issue a sequestration order (a cancellation of budgetary resources) that

would reduce all nonexempt spending by a uniform percentage. Id.

§ 252. In the spring of 1990, it became clear that the deficit was going to

exceed BBEDCA maximum deficit limits by a considerable amount. To

respond to these large deficits, President George H.W. Bush and

congressional leadership convened negotiations on the budget in

May 1990. The result was the Omnibus Budget Reconciliation Act of

1990.

Pub. L. No. 101-508, 104 Stat. 1388 (Nov. 5, 1990).

The Omnibus Budget Reconciliation Act of 1990 included the Budget

Enforcement Act (1990 BEA), which provided a major overhaul of the

BBEDCA procedures. The 1990 BEA effectively replaced BBEDCA’s

system of deficit limits with two enforcement mechanisms: limits on

discretionary spending and a pay-as-you-go-requirement (PAYGO) for

direct spending and revenue legislation.

If discretionary appropriations

enacted exceeded the annual limits, then the law provided for a

sequestration of budget authority. If Congress failed to achieve budget

neutrality on direct spending, then there would be an offsetting

sequestration of nonexempt mandatory accounts. The 1990 BEA

required OMB and CBO to estimate new budget authority and outlays

provided by any new legislation through a process that came to be called

“scorekeeping.” CBO would transmit its estimates to OMB, which would

report any discrepancies to Congress. The 1990 BEA required that

OMB’s estimates be used to determine whether a sequestration was

necessary.

In 1993, the discretionary spending limits and the PAYGO rules were

extended through fiscal year 1998. Pub. L. No. 103-66, 107 Stat. 683

(Aug. 10, 1993). The 1997 Budget Enforcement Act (1997 BEA) again

extended the discretionary spending caps and the PAYGO rules through

fiscal year 2002. Pub. L. No. 105-33, title X, §§ 10203, 10205, 111 Stat.

251, 701–03 (Aug. 5, 1997). Although the overall discretionary spending

caps expired in 2002, additional caps on Highway and Mass Transit

spending established under the Transportation Equity Act for the

The measure is discussed in S. Print No. 105-67.

The term “direct spending” refers to “(A) budget authority provided by law other than

appropriations Acts; (B) entitlement authority; and (C) the Supplemental Nutrition

Assistance Program.” 2 U.S.C. § 900(c)(8).

Chapter 2: The Legal Framework

Page 2-53 GAO-16-464SP

Century (TEA-21)

continued through fiscal year 2003, and another

set of caps on conservation spending, established as part of the fiscal

year 2001 Interior Appropriations Act,

were set through fiscal year 2006.

In addition, the sequestration procedures were to apply through fiscal

year 2006 to the conservation category. However, Public Law 107-312

eliminated the PAYGO sequestration requirement. Pub. L. No. 107-312,

116 Stat. 2456 (Dec. 2, 2002).

In addition to the statutory spending caps, Congress in fiscal year 1994

began including overall limits on discretionary spending in the concurrent

budget resolution that have become known as congressional caps.

H.R. Con. Res. 64, 103

Cong. § 12(b) (1993). Congress established

these caps to manage its internal budget process, while the BEA statutory

caps continued to govern for sequestration purposes. The congressional

caps were enforceable in the Senate by a point of order that prohibited

the consideration of a budget resolution that exceeded the limits for that

fiscal year (the point of order could be waived or suspended by a three-

fifths vote). Although the statutory 1997 BEA limits expired at the end of

fiscal year 2002, Congress continues to use the concurrent resolution on

the budget to establish and enforce congressional budgetary limits.

H.R. Con. Res. 95, 108

Cong. § 504 (2003).

In February 2010, the Statutory Pay-As-You-Go Act of 2010 (Statutory

PAYGO) revived a version of the PAYGO requirement for direct spending

and revenue legislation. Pub. L. No. 113-139, title I, 124 Stat. 8 (Feb. 12,

2010). Statutory PAYGO provides that if the net effect of direct spending

and revenue legislation enacted in a year increases the deficit, then there

will be a sequestration of nonexempt direct spending to eliminate the

increase. 2 U.S.C. §§ 931–939.

In August 2011, the Budget Control Act of 2011 restored a sequestration

process to enforce newly-enacted discretionary spending limits for fiscal

years 2012 to 2021.

Pub. L. No. 112-25, 125 Stat. 240 (Aug. 2, 2011).

These discretionary spending limits reduced projected spending by about

$1 trillion. 2 U.S.C. § 901(c); B-324723, July 31, 2013. If new budget

authority exceeds the discretionary spending limits in those fiscal years,

Pub. L. No. 105-178, § 1102, 112 Stat. 107 (June 9, 1998).

Pub. L. No. 106-291, 114 Stat. 922 (Oct. 11, 2000).

The Budget Control Act was enacted largely as an amendment to BBEDCA.

Chapter 2: The Legal Framework

Page 2-54 GAO-16-464SP

then the law provides for a sequestration to eliminate the breach.

2 U.S.C. §§ 901, 901a.

The Budget Control Act also aimed to achieve additional deficit reduction

by fiscal year 2021. The Act created the Joint Select Committee on

Deficit Reduction, which was tasked with proposing legislation by

December 2, 2011, to reduce the deficit by at least $1.2 trillion through

fiscal year 2021. The Joint Committee failed to propose a bill by its

statutory deadline, and Congress and the President subsequently failed

to enact legislation. This failure triggered a new sequestration process,

the so-called “Joint Committee sequestration,” to otherwise achieve the

$1.2 trillion reduction. 2 U.S.C. § 901a. The law currently provides for

annual reductions of discretionary spending through fiscal year 2021 and

of direct spending through fiscal year 2025.

Appropriation acts must be distinguished from two other types of

legislation: “enabling” or “organic” legislation and “appropriation

authorization” legislation. Enabling or organic legislation is legislation that

creates an agency, establishes a program, or prescribes a function, such

as the Department of Education Organization Act or the Federal Water

Pollution Control Act. While the organic legislation may provide the

necessary authority to conduct the program or activity, it usually does not

provide budget authority. Nor does organic legislation typically provide

any form of an appropriation.

Appropriation authorization legislation, as the name implies, is legislation

that authorizes the appropriation of funds to implement the organic

legislation. It may be included as part of the organic legislation or it may

be separate. As with organic legislation, appropriation authorization

legislation typically does not provide budget authority or an appropriation:

“The mere authorization of an appropriation does not authorize expenditures on

the faith thereof or the making of contracts obligating the money authorized to be

appropriated.”

16 Comp. Gen. 1007, 1008 (1937). See also 27 Comp. Dec. 923 (1921)

(“The expression ‘authorized to be appropriated’ . . . clearly indicates that

no appropriation is made or intended to be made, but the bill when

C. Authorizations

versus

Appropriations

1. Distinction between

Authorization and

Appropriation

Chapter 2: The Legal Framework

Page 2-55 GAO-16-464SP

enacted becomes the authority of law for an expected appropriation in the

future”); 67 Comp. Gen. 332 (1988); 37 Comp. Gen. 732 (1958);

35 Comp. Gen. 306 (1955); 26 Comp. Gen. 452 (1947); 15 Comp.

Gen. 802 (1936); 4 Comp. Gen. 219 (1924); A 27765, July 8, 1929.

Agencies may incur obligations only after Congress grants budget

authority. As discussed in section B.4 of this chapter, Congress may

confer budget authority in any law. However, provisions conferring

budget authority and authority to make payments to liquidate obligations

nearly always appear in appropriations acts, not in organic legislation or

in appropriation authorization legislation.

Like organic legislation, authorization legislation is considered and

reported by the committees with legislative jurisdiction over the particular

subject matter, whereas appropriation bills are exclusively within the

jurisdiction of the appropriations committees.

There is no general requirement, either constitutional or statutory, that an

appropriation act be preceded by a specific authorization act. E.g.,

71 Comp. Gen. 378, 380 (1992). The existence of a statute (organic

legislation) imposing substantive functions upon an agency is itself

sufficient authorization for the necessary appropriations. B-173832,

July 16, 1976; B-173832, Aug. 1, 1975; B-111810, Mar. 8, 1974.

Moreover, expiration of an authorization of appropriations does not

prohibit an agency from using available appropriations to carry out a

program required or permitted by existing enabling legislation. B-323433,

Aug. 14, 2012 (Social Security Administration has adequate authority

under organic legislation to continue mandatory and discretionary grant

programs upon the expiration of an authorization of appropriations).

However, statutory requirements for authorizations do exist in a number

of specific situations: for example, one provision states that

“[a]ppropriations to carry out the provisions of this chapter shall be subject

to annual authorization.” Department of Energy Organization Act, § 660,

42 U.S.C. § 7270. Another provides that no funds may be appropriated

for military construction, military procurement, and certain related

research and development “unless funds therefor have been specifically

authorized by law.” 10 U.S.C. § 114(a). In addition, rules of the House of

Representatives generally prohibit the reporting of an appropriation in a

general appropriation bill for expenditures not previously authorized by

law. See Rule XXI(2)(a)(1), Rules of the House of Representatives. The

effect of this Rule is to subject the “offending” appropriation to a point of

order. A more limited provision exists in Rule XVI, Standing Rules of the

Senate.

Chapter 2: The Legal Framework

Page 2-56 GAO-16-464SP

An authorization act is basically a directive to Congress itself, which

Congress is free to follow or alter (up or down) in the subsequent

appropriation act. B-323433, Aug. 14, 2012. A statutory requirement for

prior authorization is also essentially a congressional mandate to itself.

Thus, for example, if Congress appropriates money to the Defense

Department in violation of 10 U.S.C. § 114, there are no practical

consequences. The appropriation is just as valid, and just as available for

obligation, as if section 114 had been satisfied or did not exist.

Authorizations take many different forms, depending in part on whether

they are contained in the organic legislation or are separate legislation.

Authorizations contained in organic legislation may be “definite” (setting

dollar limits either in the aggregate or for specific fiscal years) or

“indefinite” (authorizing “such sums as may be necessary to carry out the

provisions of this act”). An indefinite authorization serves little purpose

other than to comply with House Rule XXI. Appropriation authorizations

enacted as separate legislation resemble appropriation acts in structure,

for example, the annual Department of Defense Authorization Acts.

In sum, the typical sequence is: (1) organic legislation; (2) authorization

of appropriations, if not contained in the organic legislation; and (3) the

appropriation act. While this may be the “normal” sequence, there are

deviations and variations, and it is not always possible to neatly label a

given piece of legislation. Consider, for example, the following:

“The Secretary of the Treasury is authorized and directed to pay to the Secretary

of the Interior . . . for the benefit of the Coushatta Tribe of Louisiana . . . out of

any money in the Treasury not otherwise appropriated, the sum of $1,300,000.”

Pub. L. No. 100-411, § 1(a)(1), 102 Stat. 1097 (Aug. 22, 1988). This is

the first section of a law enacted to settle land claims by the Coushatta

Tribe against the United States and to prescribe the use and distribution

of the settlement funds. Applying the test described above in section B.4,

it is certainly an appropriation—it contains a specific direction to pay and

designates the funds to be used—but, in a technical sense, it is not an

appropriation act. Also, it contains its own authorization. Thus, we have

an authorization and an appropriation combined in a statute that is neither

an authorization act (in the sense described above) nor an appropriation

act.

2. Specific Problem Areas

and the Resolution of

Conflicts

Chapter 2: The Legal Framework

Page 2-57 GAO-16-464SP

Appropriation acts, as we have seen, do not exist in a vacuum. They are

enacted against the backdrop of program legislation and, in many cases,

specific authorization acts. This section deals with two broad but closely

related issues. First, what precisely can Congress do in an appropriation

act? Is it limited to essentially “rubber stamping” what has previously

been authorized? Second, what does an agency do when faced with

what it perceives to be an inconsistency between an appropriation act

and some other statute?

The remaining portions of this section raise these issues in a number of

specific contexts. In this introduction, we present four important

principles. The resolution of problems in the relationship of appropriation

acts to other statutes will almost invariably lie in the application of one or

more of these principles.

First, Congress intends to achieve a consistent body of law. Therefore,

multiple statutes should be construed harmoniously so as to give

maximum effect to all of them wherever possible. E.g., Posadas v.

National City Bank of New York, 296 U.S. at 503; Strawser v. Atkins,

290 F.3d 720 (4

Cir.), cert. denied, 537 U.S. 1045 (2002); B-290011,

Mar. 25, 2002; 53 Comp. Gen. 853, 856 (1974); B-208593.6, Dec. 22,

1988. One particularly important consequence of this principle is that

except as specified in the appropriation act, appropriations to carry out

enabling or authorizing laws must be expended in accordance with the

original authorization both as to the amount of funds to be expended and

the nature of the work authorized. B-307720, Sept 27, 2007; B-258000,

Aug. 31, 1994; B-220682, Feb. 21, 1986; B-204874, July 28, 1982;

B-151157, June 27, 1963; 36 Comp. Gen. 240, 242 (1956); B-151157,

June 27, 1963; B-125404, Aug. 31, 1956. While it is true that one

Congress cannot bind a future Congress, nor can it bind subsequent

action by the same Congress,

an authorization act is more than an

academic exercise and its requirements must be followed unless changed

by subsequent legislation.

United States v. Winstar Corp., 518 U.S. 839, 872 (1996) (“In his Commentaries,

Blackstone stated the centuries-old concept that one legislature may not bind the

legislative authority of its successors: ‘Acts of parliament derogatory from the power of

subsequent parliaments bind not. . . . Because the legislature, being in truth the sovereign

power, is always of equal, always of absolute authority: it acknowledges no superior upon

earth, which the prior legislature must have been, if it’s [sic] ordinances could bind the

present parliament.’ 1 W. Blackstone, Commentaries on the Laws of England 90 (1765).”)

a. Introduction

Chapter 2: The Legal Framework

Page 2-58 GAO-16-464SP

Congress is free to amend or repeal prior legislation.

This leads to an

important corollary to the principle that Congress intends to achieve a

consistent body of law, which is that “repeals by implication” are

disfavored, and statutes will be construed to avoid this result whenever

reasonably possible. That is, courts generally will find that a statute

repeals an earlier one only if the repeal is explicit. E.g., Tennessee

Valley Authority v. Hill, 437 U.S. 153, 189–90 (1978); Morton v. Mancari,

417 U.S. 535, 549 (1974); Posadas v. National City Bank of New York,

296 U.S. 497, 503 (1936); B-307720, Sept. 27, 2007; B-290011, Mar. 25,

2002; B-261589, Mar. 6, 1996; 72 Comp. Gen. 295, 297 (1993);

64 Comp. Gen. 142, 145 (1984); 58 Comp. Gen. 687, 691–92 (1979);

B-258163, Sept. 29, 1994; B-236057, May 9, 1990. Repeals by

implication are particularly disfavored in the appropriations context.

Robertson v. Seattle Audubon Society, 503 U.S. 429, 440 (1992).

A repeal by implication will be found only where “the intention of the

legislature to repeal [is] clear and manifest.” Posadas, 296 U.S. at 503.

See also B-236057, May 9, 1990. The principle that implied repeals are

disfavored applies with special weight when it is asserted that a general

statute repeals a more specific statute. 72 Comp. Gen. at 297.

Second, if two statutes are in irreconcilable conflict, the more recent

statute, as the latest expression of Congress, governs. As one court

concluded in a statement illustrating the eloquence of simplicity, “[t]he

statutes are thus in conflict, the earlier permitting and the later

prohibiting,” so the later statute supersedes the earlier. Eisenberg v.

Corning, 179 F.2d 275, 277 (D.C. Cir. 1949). In a sense, the “last in time”

rule is yet another way of expressing the repeal by implication principle.

We state it separately to highlight its narrowness: it applies only when the

two statutes cannot be reconciled in any reasonable manner, and then

only to the extent of the conflict. E.g., B-323157, May 21, 2012 (“[W]hen

two, equally specific provisions are in irreconcilable conflict, the Supreme

Court views the later act as an implied repeal of the earlier one to the

extent of the conflict . . . . This is because the more recent enactment is

the latest expression of Congress.”); B-308715, Apr. 20, 2007 (“It is well

established that a later enacted, specific statute will typically supersede a

conflicting previously enacted, general statute to the extent of the

inconsistency.”). See also Posadas, 296 U.S. at 503; B-255979, Oct. 30,

1995; B-203900, Feb. 2, 1989; B-226389, Nov. 14, 1988; B-214172,

Such amendments or repeals may not, however, violate the Constitution. We discuss

this issue later in this subsection.

Chapter 2: The Legal Framework

Page 2-59 GAO-16-464SP

July 10, 1984, aff’d upon reconsideration, 64 Comp. Gen. 282 (1985).

We will see later in this section that while the last in time rule can be

stated with eloquent simplicity, its application is not always so simple.

Third, despite the occasional comment to the contrary in judicial decisions

(a few of which we will note later), Congress can and does “legislate” in

appropriation acts. E.g., Strawser v. Atkins, 290 F.3d 720, 734 (4

Cir.

2002) ("Where Congress chooses to amend substantive law in an

appropriations rider, we are bound to follow Congress's last word on the

matter even in an appropriations law."); Preterm, Inc. v. Dukakis,

591 F.2d 121 (1

Cir.), cert. denied, 441 U.S. 952 (1979); Friends of the

Earth v. Armstrong, 485 F.2d 1 (10

Cir. 1973), cert. denied, 414 U.S.

1171 (1974); Eisenberg, 179 F.2d 275; Tayloe v. Kjaer, 171 F.2d 343

(D.C. Cir. 1948).

It may well be that the device is “unusual and frowned

upon.” Preterm, 591 F.2d at 131. See also Building & Construction

Trades Department, AFL-CIO v. Martin, 961 F.2d 269, 273 (D.C. Cir.

1992), cert. denied, 506 U.S. 915 (1992) (“While appropriations are ‘Acts

of Congress’ which can substantively change existing law, there is a very

strong presumption that they do not . . . and that when they do, the

change is only intended for one fiscal year.”). It also may well be that the

appropriation act will be narrowly construed when it is in apparent conflict

with authorizing legislation. Calloway v. District of Columbia, 216 F.3d 1,

9 (D.C. Cir. 2000); Donovan v. Carolina Stalite Co., 734 F.2d 1547, 1558

(D.C. Cir. 1984). Nevertheless, appropriation acts are, like any other

statute, passed by both Houses of Congress and either signed by the

President or enacted over a presidential veto. As such, and subject of

course to constitutional strictures, they are “just as effective a way to

legislate as are ordinary bills relating to a particular subject.” Friends of

the Earth, 485 F.2d at 9; Envirocare of Utah Inc. v. United States, 44 Fed.

Cl. 474, 482 (1999).

Fourth, legislative history is not legislation. As useful and important as

legislative history may be in resolving ambiguities and determining

congressional intent, it is the language of the appropriation act, and not

the language of its legislative history, that is enacted into law. E.g.,

Shannon v. United States, 512 U.S. 573, 583 (1994) (declining to give

effect to “legislative history that is in no way anchored in the text of the

statute.”). As the Supreme Court stated in a case previously cited, which

we will discuss in more detail later:

“Expressions of committees dealing with requests for appropriations cannot be

equated with statutes enacted by Congress . . . .”

Chapter 2: The Legal Framework

Page 2-60 GAO-16-464SP

Tennessee Valley Authority v. Hill, 437 U.S. at 191; see also Lincoln v.

Vigil, 508 U.S. 182, 192 (1993); Thompson v. Cherokee Nation of

Oklahoma, 334 F.3d 1075 (Fed. Cir. 2003).

These, then, are the “guiding principles” that will be applied in various

combinations and configurations to analyze and resolve the problem

areas identified in the remainder of this section. Many situations will

require the application of multiple principles. For example, the Small

Business Administration (SBA) believed there was a conflict between the

spending levels established for certain programs in its authorizing

legislation and the levels provided for the same programs in SBA's

FY 1984 appropriations act, as fleshed out by an accompanying

conference report. 64 Comp. Gen. 282 (1985). GAO concluded that the

two statutes were not in conflict, that the appropriation did not implicitly

repeal or amend the authorizations, and that the spending levels in the

authorization were controlling. GAO explained that “an existing statutory

limitation [here, the levels in the authorization act] cannot be superseded

or repealed by statements, explanations, recommendations, or tables

contained only in committee reports or in other legislative history.” This

case applied both the principle that Congress intends to achieve a

consistent body of law and the principle that legislative history is not

legislation.

A useful supplemental reference on many of the topics we discuss is

Louis Fisher, The Authorization-Appropriation Process in Congress:

Formal Rules and Informal Practices, 29 Cath. U.L. Rev. 51 (1979).

Chapter 2: The Legal Framework

Page 2-61 GAO-16-464SP

(1) Appropriation exceeds authorization

Generally speaking, Congress is free to appropriate more money for a

given object than the amount previously authorized:

“While legislation providing for an appropriation of funds in excess of the amount

contained in a related authorization act apparently would be subject to a point of

order under rule 21 of the Rules of the House of Representatives, there would be

no basis on which we could question otherwise proper expenditures of funds

actually appropriated.”

B-123469, Apr. 14, 1955.

The governing principle was stated as follows:

“It is fundamental . . . that one Congress cannot bind a future Congress and that

the Congress has full power to make an appropriation in excess of a cost

limitation contained in the original authorization act. This authority is exercised

as an incident to the power of the Congress to appropriate and regulate

expenditures of the public money.”

36 Comp. Gen. 240, 242 (1956). For example, the National Park Service

could obligate its lump-sum construction appropriation for projects in

various parks, even though such obligations would exceed the amounts

authorized to be appropriated by an earlier law. B-148736, Sept. 15,

1977.

(2) Appropriation less than authorization

Congress is free to appropriate less than an amount authorized either in

an authorization act or in program legislation, again, as in the case of

exceeding an authorization, at least where it does so directly. E.g.,

53 Comp. Gen. 695 (1974). This includes the failure to fund a program at

all, that is, not to appropriate any funds. United States v. Dickerson,

310 U.S. 554 (1940).

A case in point is City of Los Angeles v. Adams, 556 F.2d 40 (D.C. Cir.

1977). The Airport and Airway Development Act of 1970 authorized

airport development grants “in aggregate amounts not less than” specified

dollar amounts for specified fiscal years, and provided an apportionment

formula. Pub. L. No. 91-258, title I, 84 Stat. 219 (May 21, 1970).

Subsequent appropriation acts included specific limitations on the

aggregate amounts to be available for the grants, less than the amounts

authorized. The court concluded that both laws could be given effect by

b. Variations in Amount

Chapter 2: The Legal Framework

Page 2-62 GAO-16-464SP

limiting the amounts available to those specified in the appropriation acts,

but requiring that they be distributed in accordance with the formula of the

authorizing legislation. In holding the appropriation limits controlling, the

court said:

“According to its own rules, Congress is not supposed to use appropriations

measures as vehicles for the amendment of general laws, including revision of

expenditure authorization. . . . Where Congress chooses to do so, however, we

are bound to follow Congress’s last word on the matter even in an appropriations

law.”

Id. at 48–49.

Another relevant case is Highland Falls-Fort Montgomery Central School

District v. United States, 48 F.3d 1166 (1995). The Impact Aid Act

entitles school districts financially impacted as the result of a substantial

federal presence in the school district to financial assistance to mitigate

the impact. The Act entitled school districts to amounts as determined by

the Department of Education that are attributable to each of three

separate categories of impact: (1) federal ownership of property within a

school district, (2) increases in school enrollments attributable to children

of persons who reside or work on federal property, and (3) sudden and

substantial increases in attendance by school children. The Act provides

an allocation formula to be used by the Secretary if annual appropriations

are inadequate to fully fund each of the three aid categories.

The annual appropriations acts for 1989 through 1993 did not provide

enough money to fully fund each of the three categories of impact aid.

However, in those years, Congress earmarked specific amounts for each

category of impact aid in the appropriation act. The Department of

Education followed the funding directives contained in the appropriations

acts rather than the allocation formula contained in the Impact Aid Act for

those fiscal years. One school district sued arguing that the Department

should have applied the allocation formula and fully funded the first

category (which would have resulted in the school district receiving more

aid overall). The court found in favor of the Department of Education,

which was relying on the most recent expression of congressional intent

(here, the appropriations acts) to resolve the irreconcilable conflict

between the impact aid formula and the appropriation earmarks.

Occasionally Congress enacts permanent legislation stating that

particular payments will be made in the future. Congress may enact a

subsequent appropriation that makes a smaller payment than was

contemplated in the permanent legislation. Such a reduction is

permissible and binding as long as the intent to reduce the amount of the

Chapter 2: The Legal Framework

Page 2-63 GAO-16-464SP

payment is clear. For example, permanent legislation set the salaries of

certain territorial judges. United States v. Fisher, 109 U.S. 143 (1883).

Congress subsequently appropriated a lesser amount, “in full

compensation” for that particular year. The Court held that Congress had

the power to reduce the salaries, and had effectively done so.

“It is

impossible that both acts should stand. No ingenuity can reconcile them.

The later act must therefore prevail . . . .” Id. at 146. See also United

States v. Mitchell, 109 U.S. 146 (1883). In another case, the Court found

a mandatory authorization effectively suspended by a provision in an

appropriation act prohibiting the use of funds for the payment in question

“notwithstanding the applicable portions of” the authorizing legislation.

United States v. Dickerson, 310 U.S. 554 (1940).

In these cases, the “reduction by appropriation” was effective because the

intent of the congressional action was unmistakable. The mere failure to

appropriate sufficient funds is not enough. For example, the Court

refused to find a repeal by implication in “subsequent enactments which

merely appropriated a less amount . . . and which contained no words

that expressly, or by clear implication, modified or repealed the previous

law.” United States v. Langston, 118 U.S. 389, 394 (1886); see also In re

Aiken County, 725 F.3d 255, 260 (D.C. Cir. 2013); United States v. Vulte,

233 U.S. 509 (1914). A failure to appropriate in this type of situation will

prevent administrative agencies from making payment, but, as in

Langston and Vulte, is unlikely to prevent recovery by way of a lawsuit.

See also Wetsel-Oviatt Lumber Co., Inc. v. United States, 38 Fed. Cl.

563, 570–571 (1997); New York Airways, Inc. v. United States, 369 F.2d

743 (Ct. Cl. 1966); Gibney v. United States, 114 Ct. Cl. 38 (1949).

Constitutional questions may arise if Congress attempts to repeal an

entitlement that has already vested. The Supreme Court made the

distinction between vested and non-vested entitlements clear:

“No one disputes that Congress may prospectively reduce the pay of members of

the Armed Forces, even if that reduction deprived members of benefits they had

Because the judges at issue were territorial judges, their authority did not derive from

Article III of the Constitution. Therefore, Congress had authority to reduce their pay even

after they had been appointed. Clinton v. Englebrecht, 80 U.S. 434, 447 (1871). In

contrast, the pay of judges of courts established under Article III of the Constitution “shall

not be diminished during their continuance in Office.” U.S. Const., art. III, § 1; see also

Beer v. United States, 696 F.3d 1174 (Fed. Cir. 2012) (Congress violated Article III,

section I of the Constitution when it did not provide judicial salary increases that were

contemplated by a previously enacted statute).

Chapter 2: The Legal Framework

Page 2-64 GAO-16-464SP

expected to be able to earn. . . . It is quite a different matter, however, for

Congress to deprive a service member of pay due for services already

performed, but still owing. In that case, the congressional action would appear in

a different constitutional light.”

United States v. Larionoff, 431 U.S. 864, 879 (1977).

(3) Earmarks in authorization act

In Chapter 5, section B, we set forth the various types of language

Congress uses in appropriation acts when it wants to “earmark” a portion

of a lump-sum appropriation as either a maximum or a minimum to be

spent on some particular object. These same types of earmarking

language can be used in authorization acts.

A number of cases have considered the question of whether there is a

conflict when an authorization establishes a minimum earmark (“not less

than,” “shall be available only”), and the related appropriation is a lump-

sum appropriation which does not expressly mention the earmark. Is the

agency in this situation required to observe the earmark? Applying the

principle that an appropriation must be expended in accordance with the

related authorization unless the appropriation act provides otherwise,

GAO has concluded that the agency must observe the earmark.

64 Comp. Gen. 388 (1985); B-220682, Feb. 21, 1986 (“an earmark in an

authorization act must be followed where a lump sum is appropriated

pursuant to the authorization”); B-207343, Aug. 18, 1982; B-193282,

Dec. 21, 1978 (concluding that INS was required to make $2 million of its

lump-sum appropriation available to investigate and prosecute alleged

Nazi war criminals based on a $2 million earmark in its related

authorization act). See also B-131935, Mar. 17, 1986. This result applies

even though following the earmark will drastically reduce the amount of

funds available for non-earmarked programs funded under the same

appropriation. 64 Comp. Gen. at 391. (These cases can also be viewed

as another application of the rule against repeal by implication.)

If Congress expressly appropriates an amount at variance with a

previously enacted authorization earmark, the appropriation will control

under the last in time rule. For example, an authorization act had

expressly earmarked $18 million for the United Nations International

Children’s Emergency Fund (UNICEF) for specific fiscal years. 53 Comp.

Gen. 695 (1974). A subsequent appropriation act provided a lump sum,

out of which only $15 million was earmarked for UNICEF. The

Comptroller General concluded that the $15 million specified in the

appropriation act was controlling and represented the maximum available

for UNICEF for that fiscal year.

Chapter 2: The Legal Framework

Page 2-65 GAO-16-464SP

As noted previously, it is only the appropriation, not the authorization by

itself, that permits the incurring of obligations and the making of

expenditures. It follows that an authorization does not, as a general

proposition, expand the scope of availability of appropriations beyond

what is permissible under the terms of the appropriation act. The

authorized purpose must be implemented either by a specific

appropriation or by inclusion in a broader lump-sum appropriation. Thus,

an appropriation made for specific purposes is not available for related

but more extended purposes contained in the authorization act but not

included in the appropriation. 19 Comp. Gen. 961 (1940). See also

37 Comp. Gen. 732 (1958); 35 Comp. Gen. 306 (1955); 26 Comp.

Gen. 452 (1947).

In addition to simply electing not to appropriate funds for an authorized

purpose, Congress can expressly restrict the use of an appropriation for a

purpose or purposes included in the authorization. E.g., B-24341, Apr. 1,

1942 (“[W]hatever may have been the intention of the original enabling

act it must give way to the express provisions of the later act which

appropriated funds but limited their use”).

Similarly, by express provision in an appropriation act, Congress can

expand authorized purposes. For example, an appropriation expressly

included two mandatory earmarks for projects beyond the scope of the

related authorization. 67 Comp. Gen. 401 (1988). Noting that “the

appropriation language provides its own expanded authorization for these

programs,” GAO concluded that the agency was required to reserve

funds for the two mandatory earmarks before committing the balance of

the appropriation for discretionary expenditures.

Except to the extent Congress expressly expands or limits authorized

purposes in the appropriation act, the appropriation must be used in

accordance with the authorization act in terms of purpose. Thus, GAO

concluded that an appropriation to construct a bridge across the Potomac

River pursuant to a statute authorizing construction of the bridge and

prescribing its location was not available to construct the bridge at a

slightly different location even though the planners favored the alternate

location. B-125404, Aug. 31, 1956. Similarly, the Flood Control Act of

1970 authorized construction of a dam and reservoir for the Ellicott Creek

project in New York. Subsequently, legislation was proposed to authorize

channel construction instead of the dam and reservoir, but was not

enacted. A continuing resolution made a lump-sum appropriation for

flood control projects “authorized by law.” The Comptroller General

concluded that the appropriation did not repeal the prior authorization,

c. Variations in Purpose

Chapter 2: The Legal Framework

Page 2-66 GAO-16-464SP

and that therefore, the funds could not properly be used for the alternative

channel construction. B-193307, Feb. 6, 1979.

An authorization of appropriations, like an appropriation itself, may

authorize appropriations to be made on a multiple year or no-year, as well

as fiscal year, basis. The question we address here is the extent to which

the period of availability specified in an authorization or enabling act is

controlling. Congress can, in an appropriation act, enact a different

period of availability than that specified in the authorization. Generally,

the period of availability in the appropriations act controls. For instance,

an appropriation of funds “to remain available until expended” (no-year)

was found controlling over a provision in the authorizing legislation that

authorized appropriations on a 2-year basis. B-182101, Oct. 16, 1974.

See also B-149372, B-158195, Apr. 29, 1969 (two-year appropriation of

presidential transition funds held controlling notwithstanding provision in

Presidential Transition Act of 1963, which authorized services and

facilities to former President and Vice President only for 6 months after

expiration of term of office).

Until 1971, GAO considered whether appropriation language specifically

referred to the authorization. If it did, then GAO considered the provisions

of the authorization act—including any multiple year or no-year

authorizations—to be incorporated by reference into the provisions of the

appropriation act. This was regarded as sufficient to overcome 31 U.S.C.

§ 1301(c), which presumes that an appropriation is for one fiscal year

unless the appropriation states otherwise, and to overcome the

presumption of fiscal year availability derived from the enacting clause of

the appropriation act. If the appropriation language did not specifically

refer to the authorization act, the appropriation was held to be available

only for the fiscal year covered by the appropriation act. 45 Comp.

Gen. 508 (1966); 45 Comp. Gen. 236 (1965); B-147196, Apr. 5, 1965;

B-127518, May 10, 1956; B-37398, Oct. 26, 1943. The reference had to

be specific; the phrase “as authorized by law” was not enough.

B-127518, May 10, 1956.

By 1971, however, Congress was enacting (and continues to enact) a

general provision in all appropriation acts: “[n]o part of any appropriation

contained in this Act shall remain available for obligation beyond the

current fiscal year unless expressly so provided herein.” Now, if an

appropriation act contains the provision quoted in the preceding

paragraph, it will not be sufficient for an appropriation contained in that

act to merely incorporate a multiple year or no-year authorization by

reference. The effect of this general provision is to require the

appropriation language to expressly provide for availability beyond one

d. Period of Availability

Chapter 2: The Legal Framework

Page 2-67 GAO-16-464SP

year in order to overcome the enacting clause. B-319734, July 26, 2010;

50 Comp. Gen. 857 (1971).

The general provision resulted from the efforts of the House Committee

on Appropriations in connection with the 1964 foreign aid appropriations

bill. In its report on that bill, the Committee first described then-existing

practice:

“The custom and practice of the Committee on Appropriations has been to

recommend appropriations on an annual basis unless there is some valid reason

to make the item available for longer than a one-year period. The most common

technique in the latter instances is to add the words ‘to remain available until

expended’ to the appropriation paragraph.

“In numerous instances, . . . the Congress has in the underlying enabling

legislation authorized appropriations therefor to be made on an ‘available until

expended’ basis. When he submits the budget, the President generally includes

the phrase ‘to remain available until expended’ in the proposed appropriation

language if that is what the Executive wishes to propose. The Committee either

concurs or drops the phrase from the appropriation language.”

H.R. Rep. No. 88-1040, at 55 (1963). The Committee then noted a

situation in the 1963 appropriation that had apparently generated some

disagreement. The President had requested certain refugee assistance

funds to remain available until expended. The report goes on to state:

“The Committee thought the funds should be on a 1-year basis, thus the phrase

‘to remain available until expended’ was not in the bill as reported. The final law

also failed to include the phrase or any other express language of similar import.

Thus Congress took affirmative action to limit the availability to the fiscal year

1963 only.”

Id. at 56. The Committee then quoted what is now 31 U.S.C. § 1301(c),

and stated:

“The above quoted 31 U.S.C. [§ 1301(c)] seems clearly to govern and, in

respect to the instant class of appropriation, to require the act making the

appropriation to expressly provide for availability longer than 1 year if the

enacting clause limiting the appropriations in the law to a given fiscal year is to

be overcome as to any specific appropriation therein made. And it accords with

the rule of reason and ancient practice to retain control of such an elementary

matter wholly within the terms of the law making the appropriation. The two hang

together. But in view of the question in the present case and the possibility of

similar questions in a number of others, consideration may have to be given to

revising the provisions of 31 U.S.C. [§ 1301(c)] to make its scope and meaning

crystal clear and perhaps update it as may otherwise appear desirable.”

Id. (emphasis in original).

Chapter 2: The Legal Framework

Page 2-68 GAO-16-464SP

Section 1301(c) was not amended, but soon after the above discussion

appeared, appropriation acts started including the general provision

stating that “[n]o part of any appropriation contained in this Act shall

remain available for obligation beyond the current fiscal year unless

expressly so provided herein.” This added another ingredient to the

recipe that had not been present in the earlier decisions, although it took

several years before the new general provision began appearing in

almost all appropriation acts.

When the issue arose again in a 1971 case, GAO considered the new

appropriation act provision and the 1963 comments of the House

Appropriations Committee. In that decision, GAO noted that “it seems

evident that the purpose [of the new general provision] is to overcome the

effect of our decisions . . . regarding the requirements of 31 U.S.C.

[§ 1301(c)],” and further noted the apparent link between the discussion in

House Report 1040 and the appearance of the new provision. 50 Comp.

Gen. at 859. See also 58 Comp. Gen. 321 (1979); B-207792, Aug. 24,

1982. Thus, the appropriation act will have to expressly repeat the

multiple year or no-year language of the authorization, or at least

expressly refer to the specific section of the authorizing statute in which it

appears.

Changes in the law from year to year may produce additional

complications. For example, an authorization act provided that funds

appropriated and apportioned to states would remain available for

obligation for three fiscal years, after which time any unobligated

balances would be reapportioned. This amounted to a no-year

authorization. For several years, appropriations to fund the program were

made on a no-year basis, thus permitting implementation of the

authorization provision. Starting with fiscal year 1978, however, the

appropriation act was changed and the funds were made available for two

fiscal years. This raised the question of whether the appropriation act

had the effect of overriding the apparently conflicting authorizing

language, or if it meant merely that reapportionment could occur after two

fiscal years instead of three, thus effectively remaining a no-year

appropriation.

GAO concluded that the literal language and plain meaning of the

appropriation act must govern. In addition to the explicit appropriation

language, the appropriation acts contained the general provision

restricting availability to the current fiscal year unless expressly provided

otherwise therein. Therefore, any funds not obligated by the end of the

2-year period would expire and could not be reapportioned. B-151087,

Feb. 17, 1982; B-151087, Sept. 15, 1981.

Chapter 2: The Legal Framework

Page 2-69 GAO-16-464SP

Our discussion thus far has, for the most part, been in the context of the

typical sequence—that is, the authorization act is passed before the

appropriation act. Sometimes, however, consideration of the

authorization act is delayed and is enacted after the appropriation act.

Determining the relationship between the two acts involves application of

the same general principles we have been applying when the acts are

enacted in the normal sequence.

The first step in the analysis is to attempt to construe the statutes

together in some reasonable fashion. To the extent this can be done,

there is no real conflict, and the reversed sequence of enactment will, in

many cases, make no difference. Earlier, for example, we discussed the

rule that a specific earmark in an authorization act must be followed when

the related appropriation is an unspecified lump sum. In two of the cases

cited for that proposition—B-220682, Feb. 21, 1986 and B-193282,

Dec. 21, 1978—the appropriation act had been enacted prior to the

authorization, a factor that did not affect the outcome.

For example, the 1979 Justice Department authorization act authorized a

lump-sum appropriation to the Immigration and Naturalization Service

(INS) and provided that $2 million “shall be available” for the investigation

and prosecution of certain cases involving alleged Nazi war criminals.

The 1979 appropriation act made a lump-sum appropriation to the INS

but contained no specific mention of the Nazi war criminal item. The

appropriation act was enacted on October 10, 1978, but the authorization

act was not enacted until November. In response to a question as to the

effect of the authorization provision on the appropriation, the Comptroller

General advised that the two statutes could be construed harmoniously,

and that the $2 million earmarked in the authorization act could be spent

only for the purpose specified. It was further noted that the $2 million

represented a minimum, but not a maximum. B-193282, Dec. 21, 1978,

amplified by B-193282, Jan. 25, 1979. This is the same result that would

have been reached if the normal sequence of enactment had been

followed.

Similarly, a provision in the 1987 Defense Appropriation Act prohibited the

Navy from including certain provisions in ship maintenance contracts.

The 1987 authorization act, enacted after the appropriation, amended a

provision in title 10 of the United States Code to require the prohibited

provisions. Application of the last in time rule would have negated the

appropriation act provision. However, it was possible to give effect to

both provisions by construing the appropriation restriction as a temporary

exemption from the permanent legislation in the authorization act.

e. Authorization Enacted After

Appropriation

Chapter 2: The Legal Framework

Page 2-70 GAO-16-464SP

B-226389, Nov. 14, 1988. Again, this is the same result that would have

been reached if the authorization act were enacted first.

If the authorization and appropriation cannot be reasonably reconciled,

the last-in-time rule will apply as it would under the typical sequence,

except here, the result will differ because the authorization is the later

enacted of the two. For example, the 1989 Treasury Department

appropriation act contained a provision prohibiting placing certain

components of the Department under the oversight of the Treasury

Inspector General. A month later, Congress enacted legislation placing

those components under the Inspector General’s jurisdiction and

transferring their internal audit staffs to the Inspector General

“notwithstanding any other provision of law.” But for the “notwithstanding”

clause, it might have been possible to use the same approach as in

B-226389 and find the appropriation restriction a temporary exemption

from the new permanent legislation. In view of the “notwithstanding”

clause, however, GAO found that the two provisions could not be

reconciled, and concluded that the Inspector General legislation, as the

later enactment, superseded the appropriation act provision. B-203900,

Feb. 2, 1989.

Two other examples invoking the last in time rule can be found in dueling

Defense Department authorization and appropriation act provisions. In

one case, the Defense appropriations act for 1992 directed the Defense

Department to extend a contract relating to the Civilian Heath and

Medical Program for Uniformed Services (CHAMPUS) program for

another year. However, the defense authorization act for 1992

countermanded that mandate and permitted the Defense Department to

award a new contract. The Comptroller General had little difficulty

concluding that the two provisions were irreconcilably in conflict.

B-247119, Mar. 2, 1992. Indeed, the legislative history demonstrated that

the drafters of the appropriation and authorization acts sought to trump

each other on this point as their two bills proceeded through Congress.

The more difficult issue was how to apply the last in time rule to the case.

The complication was that, while Congress had completed action on the

authorization bill first (one day before the appropriation bill), the President

acted in the opposite order—signing the appropriation bill into law nine

days before he signed the authorization bill. Noting that the date on

which the President signs a bill is clearly the date it becomes law, the

Comptroller General held that the authorization act was the later in time,

and thus, its provisions controlled.

Just as with any other application of the last in time rule, the later

enactment prevails only to the extent of the irreconcilable conflict.

Chapter 2: The Legal Framework

Page 2-71 GAO-16-464SP

B-61178, Oct. 21, 1946 (specific limitations in appropriation act not

superseded by after-enacted authorization absent indication that

authorization was intended to alter provisions of prior appropriation).

The Supreme Court has said that the doctrine against repeal by

implication is even more forceful “where the one act follows close upon

the other, at the same session of the Legislature.” Morf v. Bingaman,

298 U.S. 407, 414 (1936); see also Auburn Housing Authority v. Martinez,

277 F.3d 138, 145 (2

Cir. 2002); B-277905, Mar. 17, 1998. Accordingly,

the doctrine against repeal by implication reaches perhaps its strongest

point (and the “last in time” rule is correspondingly at its weakest) when

both statutes are enacted on the same day. Except in the very rare case

in which the intent of one statute to affect the other is particularly

manifest, it makes little sense to apply a last in time concept where the

time involved is a matter of hours, or as in one case (B-79243, Sept. 28,

1948), 7 minutes. Thus, the starting point is the presumption—applicable

in all cases but even stronger in this situation—that Congress intended

both statutes to stand together. 67 Comp. Gen. 332, 335 (1988);

B-204078.2, May 6, 1988.

When there is an apparent conflict between an appropriation act and

another statute enacted on the same day, the approach is to make every

effort to reconcile the statutes so as to give maximum effect to both. In

some cases, it will be found that there is no real conflict. For example,

one statute authorized certain Commodity Credit Corporation

appropriations to be made in the form of current, indefinite appropriations,

while the appropriation act, enacted on the same day, made line-item

appropriations. There was no conflict because the authorization provision

was a directive to Congress itself that Congress was free to disregard,

subject to a possible point of order, when making the actual appropriation.

67 Comp. Gen. 332 (1988). Similarly, there was no inconsistency

between an appropriation act provision, which required that Panama

Canal Commission appropriations be spent only in conformance with the

Panama Canal Treaty of 1977 and its implementing legislation, and an

authorization act provision, enacted on the same day, requiring prior

specific authorizations. B-204078.2, May 6, 1988.

In other cases, applying traditional rules of statutory construction will

produce reconciliation. For example, if one statute can be said to be

more specific than the other, they can be reconciled by applying the more

specific provision first, with the broader statute then applying to any

residual issues. See B-231662, Sept. 1, 1988; B-79243, Sept. 28, 1948.

f. Two Statutes Enacted on

Same Day

Chapter 2: The Legal Framework

Page 2-72 GAO-16-464SP

Legislative history may also help. For example, authorizing legislation

extended the life of the Solar Energy and Energy Conservation Bank to

March 15, 1988. The 1988 appropriation, enacted on the same day,

made a two-year appropriation for the Bank. Not only were there no

indications of any intent for the appropriation to have the effect of

extending the Bank’s life, there were specific indications to the contrary.

Thus, GAO regarded the appropriation as available, in theory for the full

two-year period, except that the authority for anyone to obligate the

appropriation would cease when the Bank went out of existence.

B-207186, Feb. 10, 1989.

The most extreme situation, and one in which the last in time rule by

definition cannot possibly apply, is two conflicting provisions in the same

statute. Even here, the approaches outlined above will usually prove

successful. See, e.g., B-211306, June 6, 1983. We have found only one

case in which two provisions in the same act were found irreconcilable.

One provision in an appropriation act appropriated funds to the Army for

the purchase of land; another provision a few pages later in the same act

expressly prohibited the use of Army appropriations for the purchase of

land. The Comptroller of the Treasury concluded, in a very brief decision,

that the prohibition nullified the appropriation. 26 Comp. Dec. 534 (1920).

The advantage of this result, although not stated this way in the decision,

is that Congress would ultimately have to resolve the conflict and it is

easier to make expenditures that have been deferred than to recoup

money after it has been spent.

In one case, the fact that two allegedly conflicting provisions were

contained in the same statute influenced the court to reconcile them.

Auburn Housing Authority v. Martinez, 277 F.3d 138 (2

Cir. 2002). The

funding restriction provision used the word “hereafter,” which, as the court

acknowledged, ordinarily connotes permanence. However, the court

nonetheless held that this provision applied only for the duration of the

fiscal year and did not constitute an implied repeal of the other provision.

The opinion observed in this regard:

“Given the unique circumstances of this case, the court is not convinced that the

mere presence of the word ‘hereafter’ in section 226 clearly demonstrates

Congress’s intent to repeal section 519(n). This could be a different case if

sections 226 and 519(n) appeared in separate statutes, but that is not the

question we consider in the instant appeal.”

Auburn Housing Authority, 277 F.3d at 146.

“Ratification by appropriation” is the doctrine by which Congress can, by

the appropriation of funds, confer legitimacy on an agency action that was

g. Ratification by Appropriation

Chapter 2: The Legal Framework

Page 2-73 GAO-16-464SP

questionable when it was taken. Clearly Congress may ratify that which it

could have authorized. Swayne & Hoyt, Ltd. v. United States, 300 U.S.

297, 301–02 (1937). It is also settled that Congress may manifest its

ratification by the appropriation of funds. Ex Parte Endo, 323 U.S. 283,

303 n.24 (1944); Brooks v. Dewar, 313 U.S. 354, 360–61 (1941).

We must also emphasize that “ratification by appropriation is not favored

and will not be accepted where prior knowledge of the specific disputed

action cannot be demonstrated clearly.” District of Columbia Federation

of Civic Ass’ns v. Airis, 391 F.2d 478, 482 (D.C. Cir. 1968); Associated

Electric Cooperative, Inc. v. Morton, 507 F.2d 1167, 1174 (D.C. Cir.

1974), cert. denied, 423 U.S. 830 (1975).

Thus, a simple lump-sum appropriation, without more, will generally not

afford sufficient basis to find a ratification by appropriation. Endo,

323 U.S. at 303 n.24; Airis, 391 F.2d at 481–82; Wade v. Lewis,

561 F. Supp. 913, 944 (N.D. Ill. 1983); B-213771, July 10, 1984. The

appropriation “must plainly show a purpose to bestow the precise

authority which is claimed.” Endo, 323 U.S. at 303 n.24. Accord: Schism

v. United States, 316 F.3d 1259, 1289–1290 (Fed. Cir. 2002), cert.

denied, 539 U.S. 910 (2003), 123 S. Ct. 2246 (2003) (“ratification

ordinarily cannot occur in the appropriations context unless the

appropriations bill itself expressly allocates funds for a specific agency or

activity”); A-1 Cigarette Vending, Inc. v. United States, 49 Fed. Cl. 345,

354 (2001), aff’d sub nom. 304 F.3d 1349 (Fed. Cir. 2002), cert. denied

sub nom. 538 U.S. 921 (2003) (“[S]imply because the lack of an

appropriation demonstrates a lack of authority does not mean that an

appropriation by itself will create such authority. . . . [A] general

appropriation of funds for an overall program is not sufficient to bestow

authority upon a particular aspect of an agency’s program.”).

Some courts have used language which, when taken out of context,

implies that appropriations cannot serve to ratify prior agency action.

E.g., University of the District of Columbia Faculty Ass’n v. Board of

Trustees of the University of the District of Columbia, 994 F. Supp. 1, 10

(D.D.C. 1998), aff’d, 163 F.3d 616 (D.C. Cir. 1998). Nevertheless, while

the doctrine may not be favored, it does exist. The courts demonstrate

their reluctance to apply this doctrine by giving extra scrutiny to alleged

ratifications by appropriation. Their reluctance to find such ratifications

probably stems from a more general judicial aversion to interpreting

appropriation acts as changing substantive law. Thus, one court

observed:

Chapter 2: The Legal Framework

Page 2-74 GAO-16-464SP

“ [I]t is well recognized that Congress does not normally perform legislative

functions—such as ratification—through appropriations bills. . . . This does not

mean that Congress cannot effect a ratification through an appropriations bill, but

it does mean that Congress must be especially clear about its intention to do so.”

Thomas v. Network Solutions, Inc., 2 F. Supp. 2d 22, 32 at n.12 (D.D.C.

1998), aff’d, 176 F.3d 500 (D.C. Cir. 1999), cert. denied, 528 U.S. 1115

(2000) (citations omitted).

We turn now to some specific situations in which the doctrine of

ratification by appropriation has been accepted or rejected.

Presidential reorganizations have generated a large number of cases.

Generally, when the President has created a new agency or has

transferred a function from one agency to another, and Congress

subsequently appropriates funds to the new agency or to the old agency

for the new function, the courts have found that the appropriation ratified

the presidential action. Fleming v. Mohawk Wrecking & Lumber Co.,

331 U.S. 111, 116 (1947); Isbrandtsen-Moller Co. v. United States,

300 U.S. 139, 147 (1937).

The transfer to the Equal Employment Opportunity Commission (EEOC)

in 1978 of enforcement responsibility for the Age Discrimination in

Employment Act and the Equal Pay Act produced a minor flood of

litigation. Although the courts were not uniform, a clear majority found

that the subsequent appropriation of funds to the EEOC ratified the

transfer. EEOC v. Dayton Power & Light Co., 605 F. Supp. 13 (S.D. Ohio

1984); EEOC v. Delaware Dept. of Health & Social Services, 595 F.

Supp. 568 (D. Del. 1984); EEOC v. New York, 590 F. Supp. 37 (N.D. N.Y.

1984); EEOC v. Radio Montgomery, Inc., 588 F. Supp. 567 (W.D. Va.

1984); EEOC v. City of Memphis, 581 F. Supp. 179 (W.D. Tenn. 1983);

Muller Optical Co. v. EEOC, 574 F. Supp. 946 (W.D. Tenn. 1983), aff’d on

other grounds, 743 F.2d 380 (6

Cir. 1984). Contra EEOC v. Martin

Industries, 581 F. Supp. 1029 (N.D. Ala.), appeal dismissed, 469 U.S.

806 (1984); EEOC v. Allstate Ins. Co., 570 F. Supp. 1224 (S.D. Miss.

1983), appeal dismissed, 467 U.S. 1232 (1984). Congress resolved any

doubt by enacting legislation in 1984 to expressly ratify all prior

reorganization plans implemented pursuant to any reorganization

statute.

Pub. L. No. 98-532, 98 Stat. 2705 (Oct. 19, 1984), codified at 5 U.S.C. § 906 note.

Chapter 2: The Legal Framework

Page 2-75 GAO-16-464SP

On the other hand, a class of cases where ratification by appropriation

was not found concern proposed construction projects funded under

lump-sum appropriations where the effect would be either to expand the

scope of a prior congressional authorization or to supply an authorization

required by statute but not obtained. Libby Rod & Gun Club v. Poteat,

594 F.2d 742 (9

Cir. 1979); National Wildlife Federation v. Andrus,

440 F. Supp. 1245 (D.D.C. 1977); Atchison, Topeka & Santa Fe Railway

Co. v. Callaway, 382 F. Supp. 610 (D.D.C. 1974); B-223725, June 9,

1987.

A few additional cases in which ratification by appropriation was found are

summarized below:

• The Tennessee Valley Authority (TVA) had asserted the authority to

construct power plants. TVA’s position was based on an

interpretation of its enabling legislation that the court found consistent

with the purpose of the legislation although the legislation itself was

ambiguous. The appropriation of funds to TVA for power plant

construction ratified TVA’s position. Young v. Tennessee Valley

Authority, 606 F.2d 143 (6

Cir. 1979), cert. denied, 445 U.S. 942

(1980).

• The authority of the Postmaster General to conduct a mail

transportation experiment was ratified by the appropriation of funds to

the former Post Office Department under circumstances showing that

Congress was fully aware of the experiment. The court noted that

existing statutory authority was broad enough to encompass the

experiment and that nothing prohibited it. Atchison, Topeka & Santa

Fe Railway Co. v. Summerfield, 229 F.2d 777 (D.C. Cir. 1955), cert.

denied, 351 U.S. 926 (1956).

• The authority of the Department of Justice to retain private counsel to

defend federal officials in limited circumstances, while not explicitly

provided by statute, is regarded as ratified by the specific

appropriation of funds for that purpose. 2 Op. Off. Legal Counsel 66

(1978).

• Another Office of Legal Counsel opinion described instances in which

Congress has ratified by appropriation the use of United States

combat forces. The opinion concludes on this point:

“In sum, basic principles of constitutional law—and, in particular, the fact that

Congress may express approval through the appropriations process—and

historical practice in the war powers area, as well as the bulk of the case law and

a substantial body of scholarly opinion, support the conclusion that Congress can

authorize hostilities through its use of the appropriations power. Although it

might be the case that general funding statutes do not necessarily constitute

Chapter 2: The Legal Framework

Page 2-76 GAO-16-464SP

congressional approval for conducting hostilities, this objection loses its force

when the appropriations measure is directly and conspicuously focused on

specific military action.”

Note that in all of the cases in which ratification by appropriation was

approved, the agency had at least an arguable legal basis for its action.

See Airis, 391 F.2d at 481 n.20; B-232482, June 4, 1990. The doctrine

has not been used to excuse violations of law. Also, when an agency

action is constitutionally suspect, the courts will require that congressional

action be particularly explicit. Greene v. McElroy, 360 U.S. at 506–07;

Martin Industries, 581 F. Supp. at 1033–37; Muller Optical Co.,

574 F. Supp. at 954.

The Comptroller General condensed the foregoing principles into this test

for ratification by appropriation:

“To conclude that Congress through the appropriations process has ratified

agency action, three factors generally must be present. First, the agency takes

the action pursuant to at least arguable authority; second, the Congress has

specific knowledge of the facts; and third, the appropriation of funds clearly

bestows the claimed authority.”

B-285725, Sept. 29, 2000. In this case GAO rejected the District of

Columbia government’s assertion that Congress had ratified certain

funding practices that otherwise violated the Antideficiency Act,

31 U.S.C. § 1341. Specifically, GAO concluded that information

contained in the District’s budget justifications did not constitute notice to

Congress because it (1) lacked clarity and precision, (2) did not create

any awareness that could be imputed to Congress as a whole, and

(3) was not reflected in any legislative language that could reasonably be

viewed as authorizing the practices in question.

We have on several occasions referred to the rule against repeal by

implication. The leading case in the appropriations context is Tennessee

Valley Authority v. Hill, 437 U.S. 153 (1978) (hereafter TVA v. Hill). In

that case, Congress had authorized construction of the Tellico Dam and

Reservoir Project on the Little Tennessee River, and had appropriated

initial funds for that purpose. Subsequently, Congress passed the

Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq. Under the

Authorization for Continuing Hostilities in Kosovo, available at

www.justice.gov/sites/default/files/olc/opinions/2000/12/31/op-olc-v024-p0327_0.pdf,

Dec. 19, 2000 (last visited Feb. 29, 2016).

h. Repeal by Implication

Chapter 2: The Legal Framework

Page 2-77 GAO-16-464SP

provisions of that Act, the Secretary of the Interior declared the “snail

darter,” a 3-inch fish, to be an endangered species. It was eventually

determined that the Little Tennessee River was the snail darter’s critical

habitat and that completion of the dam would result in extinction of the

species. Consequently, environmental groups and others brought an

action to halt further construction of the Tellico Project. In its decision, the

Supreme Court held in favor of the plaintiffs, notwithstanding the fact that

construction was well under way and that, even after the Secretary of the

Interior’s actions regarding the snail darter, Congress had continued to

make yearly appropriations for the completion of the dam project.

The appropriation involved was a lump-sum appropriation that included

funds for the Tellico Dam but made no specific reference to it. However,

passages in the reports of the appropriations committees indicated that

those committees intended the funds to be available notwithstanding the

Endangered Species Act. The Court held that this was not enough. The

doctrine against repeal by implication, the Court said, applies with even

greater force when the claimed repeal rests solely on an appropriation

act:

“When voting on appropriations measures, legislators are entitled to operate

under the assumption that the funds will be devoted to purposes which are lawful

and not for any purpose forbidden.”

Id. at 190. Noting that “[e]xpressions of committees dealing with requests

for appropriations cannot be equated with statutes enacted by Congress”

(id. at 191), the Court held that the unspecified inclusion of the Tellico

Dam funds in a lump-sum appropriation was not sufficient to constitute a

repeal by implication of the Endangered Species Act insofar as it related

to that project.

In other words, the doctrine of ratification by

appropriation we discussed in the preceding section does not apply, at

least when the appropriation is an otherwise unspecified lump sum,

where the effect would be to change an existing statutory requirement.

Some subsequent cases applying the concept of TVA v. Hill (although not

all citing that case) include Miccosukee Tribe of Indians of Florida v. U.S.

Army Corps of Engineers, 619 F.3d 1289 (11th Cir. 2010); Donovan v.

Carolina Stalite Co., 734 F.2d 1547 (D.C. Cir. 1984); 64 Comp. Gen. 282

Less than 4 months after the Court’s decision, Congress enacted legislation exempting

the Tellico project from the Endangered Species Act. Endangered Species Act

Amendments of 1978, Pub. L. No. 95-632, § 5, 92 Stat. 3751, 3761 (Nov. 10, 1978).

Chapter 2: The Legal Framework

Page 2-78 GAO-16-464SP

(1985); B-208593.6, Dec. 22, 1988; B-213771, July 10, 1984; B-204874,

July 28, 1982; and B-193307, Feb. 6, 1979. For example, the otherwise

unrestricted appropriation of coal trespass receipts to the Bureau of Land

Management did not implicitly amend or repeal the provisions of the

Federal Land Policy and Management Act prescribing the use of such

funds. B-204874, July 28, 1982.

Thus, if Congress wants to use an appropriation act as the vehicle for

suspending, modifying, or repealing a provision of existing law, it must do

so advisedly, speaking directly and explicitly to the issue. The Last Best

Beef, LLC v. Dudas, 506 F.3d 333 (4th Cir. 2007); Miccosukee Tribe of

Indians of Florida v. U.S., 650 F. Supp. 2d 1235 (S.D. Fla., 2009).

The Supreme Court conveyed this message succinctly:

“[A]lthough repeals by implication are especially disfavored in the appropriations

context, Congress nonetheless may amend substantive law in an appropriations

statute, as long as it does so clearly.”

Robertson v. Seattle Audubon Society, 503 U.S. 429, 440 (1992)

(citations omitted). In this case, the Court found an implied repeal by

appropriation act to be clear and explicit.

Determining whether an appropriation implicitly repeals another statute

requires an analysis of the particular statutory language involved. For

example, in one case the court held that an annual appropriation

restriction enacted for many years stating that “[n]one of the funds

appropriated herein shall be available to investigate or act upon

applications for relief from Federal firearms disabilities under 18 U.S.C.

§ 925(c)” clearly superseded the provision in title 18 of the United States

Code. This case cited many other decisions that reached the same

conclusion with respect to this particular appropriation language.

Pontarelli v. United States Department of the Treasury, 285 F.3d 216

Cir. 2002). Another case finding a clear implied repeal by

appropriation is Bald Eagle Ridge Protection Ass’n, Inc. v. Mallory,

119 F. Supp. 2d 473 (M.D. Pa. 2000), aff’d, 275 F.3d 33 (3rd Cir. 2001).

Examples of cases that reconciled the appropriation and other statutory

provisions, and thus found no implied repeal include: Strawser v. Atkins,

290 F.3d 720 (4

Cir.), cert. denied, 537 U.S. 1045 (2002); Auburn

Housing Authority v. Martinez, 277 F.3d 138 (2

Cir. 2002); Firebaugh

Canal Co. v. United States, 203 F.3d 568 (9

Cir. 2000); Ramey v.

Stevedoring Services of America, 134 F.3d 954 (9

Cir. 1998);

Environmental Defense Center v. Babbitt, 73 F.3d 867 (9

Cir. 1995).

Chapter 2: The Legal Framework

Page 2-79 GAO-16-464SP

Still other cases hold that appropriation restrictions alleged to be

permanent in superseding other laws were effective only for a fiscal year.

E.g., Auburn Housing Authority, 277 F.3d 138; Building & Construction

Trades Department, AFL-CIO v. Martin, 961 F.2d 269, 273 (D.C. Cir.),

cert. denied, 506 U.S. 915 (1992). In a related context, the court in

Williams v. United States, 240 F.3d 1019 (Fed. Cir. 2001), cert. denied,

535 U.S. 911 (2002), disagreed with a series of Comptroller General

decisions and held that appropriation language enacted in 1982 that

required specific congressional authorization for pay raises for judges

was not permanent legislation but expired at the end of fiscal year 1982.

In 2004, the Seventh Circuit interpreted appropriation restrictions to avoid

repeal by implication. City of Chicago v. Department of the Treasury,

384 F.3d 429 (7

Cir. 2004). The City of Chicago had sued the former

Bureau of Alcohol, Tobacco, and Firearms under the Freedom of

Information Act (FOIA) to obtain access to certain information from the

agency’s firearms databases. The Court of Appeals for the Seventh

Circuit held that the information was not exempt from disclosure under

FOIA, and the agency appealed to the Supreme Court. While the appeal

was pending, Congress enacted appropriations language for fiscal years

2003 and 2004 providing that no funds shall be available or used to take

any action under FOIA or otherwise that would publicly disclose the

information. On remand from the Supreme Court, the Seventh Circuit

decided that the appropriations language had essentially no impact on the

case. Citing a number of cases on the rule disfavoring implied repeals

(particularly by appropriations act), the court held that the appropriations

rider did not repeal FOIA or otherwise affect the agency’s legal obligation

to release the information in question. The court concluded that “FOIA

deals only peripherally with the allocation of funds—its main focus is to

ensure agency information is made available to the public.” City of

Chicago, 384 F.3d at 435. After the 2004 decision, the agency filed a

request for rehearing. Before the rehearing, Congress passed the

Consolidated Appropriations Act of 2005 specifying that no funds be used

to provide the data sought by the City, and further provided that the data

be “immune from judicial process.” The court determined that this

statutory language showed that Congress’s “obvious intention . . . was to

cut off all access to the databases for any reason.” City of Chicago v.

Department of the Treasury, 423 F.3d 777, 780 (7

Cir. 2005).

As we have previously noted, there is no general statutory requirement

that appropriations be preceded by specific authorizations, although they

may be required in some instances. Where authorizations are not

required by law, Congress may, subject to a possible point of order,

appropriate funds for a program or object that has not been previously

i. Lack of Authorization

Chapter 2: The Legal Framework

Page 2-80 GAO-16-464SP

authorized or which exceeds the scope of a prior authorization. If so, the

enacted appropriation, in effect, carries its own authorization and is

available to the agency for obligation and expenditure. E.g., 67 Comp.

Gen. 401 (1988); B-219727, July 30, 1985; B-173832, Aug. 1, 1975.

It has also been held that, as a general proposition, the appropriation of

funds for a program whose funding authorization has expired, or is due to

expire during the period of availability of the appropriation, provides

sufficient legal basis to continue the program during that period of

availability, absent indication of contrary congressional intent. 65 Comp.

Gen. 524 (1986); 65 Comp. Gen. 318, 320–21 (1986); 55 Comp.

Gen. 289 (1975); B-131935, Mar. 17, 1986; B-137063, Mar. 21, 1966.

For example, the Social Security Administration (SSA) should continue

mandatory and discretionary grant programs, even when faced with

expired authorizations of appropriations, where the relevant enabling

legislation had not expired and the agency had an appropriation available

to cover the costs of the programs. B-323433, Aug. 14, 2012. Following

the enactment of legislation establishing the Work Incentives Planning

and Assistance Program and the Protection and Advocacy for

Beneficiaries of Social Security Program, Congress passed authorizations

of appropriations to carry out the functions. SSA asserted that it could not

continue the programs upon the expiration of the authorization of

appropriations. Reminding SSA that there is no general requirement that

an authorization of appropriations precede an appropriation, GAO held

that enabling legislation provided the requisite authority to obligate

agency appropriations in those situations where authorizations expire.

The result in these cases follows in part from the fact that the total

absence of appropriations authorization legislation would not have

precluded the making of valid appropriations for the programs. E.g.,

B-202992, May 15, 1981. In addition, as noted, the result is premised on

the conclusion, derived either from legislative history or at least the

absence of legislative history to the contrary, that Congress did not intend

for the programs to terminate.

Congressional practice also firmly supports this conclusion since Congress appropriates

huge sums each year to fund programs with expired authorizations. According to the

Congressional Budget Office (CBO), appropriations for which specific authorizations had

expired have ranged between about $90 billion and about $120 billion in recent fiscal

years. Unauthorized Appropriations and Senate Resolution 173: Hearing Before the

Senate Committee on Rules and Administration, 108

Cong. 3 (July 9, 2003) (statement

by CBO Director Douglas Holtz-Eakin).

Chapter 2: The Legal Framework

Page 2-81 GAO-16-464SP

There are limits on how far this principle can be taken, depending on the

particular circumstances. For example, a 1988 continuing resolution

provided funds for the Solar Bank, to remain available until September

30, 1989. Legislation enacted on the same day provided for the Bank to

terminate on March 15, 1988. Based in part on legislative history

indicating the intent to terminate the Bank on the specified sunset date,

GAO distinguished prior decisions in which appropriations were found to

authorize program continuation and concluded that the appropriation did

not authorize continuation of the Solar Bank beyond March 15, 1988.

B-207186, Feb. 10, 1989.

In another example, section 8 of the Civil Rights Commission’s

authorizing act stated that “the provisions of this Act shall terminate on

September 30, 1991.” While Congress was actively working on

reauthorization legislation for the Commission toward the end of fiscal

year 1991, this legislation was not enacted until after September 30,

1991. Nevertheless, Congress had enacted a continuing resolution for

the early part of fiscal year 1992 that specifically included funding for the

Commission. The Comptroller General first observed that the line of

cases discussed above permitting programs to continue after expiration of

their authorization did not apply. Unlike the mere authorization lapse in

those cases, the statute here provided that the Commission would

“terminate” on September 30 of that fiscal year. The Comptroller General

also distinguished the Solar Bank case, discussed above, since the

provision for termination of the Commission was enacted long before the

continuing resolution that provided for the Commission’s funding after

September 30. Ultimately, the funding provision for the Commission was

irreconcilable with the section 8 termination provision and effectively

suspended the operation of section 8. 71 Comp. Gen. 378 (1992). The

decision noted the clear intent of Congress that the Commission continue

to operate without interruption after September 30, 1991.

A device Congress has used on occasion to avoid this type of problem is

an “automatic extension” provision under which funding authorization is

automatically extended for a specified time period if Congress has not

enacted new authorizing legislation before it expires. An example is

discussed in B-214456, May 14, 1984.

Questions concerning the effect of appropriations on expired or about-to-

expire authorizations have tended to arise more frequently in the context

of continuing resolutions. The topic is discussed further, including several

of the cases cited above, in Chapter 8.

Chapter 2: The Legal Framework

Page 2-82 GAO-16-464SP

Where specific authorization is statutorily required, the case may become

more difficult. In Libby Rod & Gun Club v. Poteat, 594 F.2d 742 (9

Cir.

1979), the court held that a lump-sum appropriation available for dam

construction was not, by itself, sufficient to authorize a construction

project for which specific authorization had not been obtained as required

by 33 U.S.C. § 401. The court suggested that TVA v. Hill and similar

cases do not “mandate the conclusion that courts can never construe

appropriations as congressional authorization,” although it was not

necessary to further address that issue in view of the specific requirement

in that case. Poteat, 594 F.2d at 745–46. The result would presumably

have been different if Congress had made a specific appropriation

“notwithstanding the provisions of 33 U.S.C. § 401.” It should be

apparent that the doctrines of repeal by implication and ratification by

appropriation are relevant in analyzing issues of this type.

The Supreme Court recognized the breadth of the power of the purse, but

also its limitations, in South Dakota v. Dole, 483 U.S. 203 (1987) (noting

that“[Congress’s] spending power is of course not unlimited.”). In Dole,

the Supreme Court listed what it referred to as four “general restrictions”

on the spending power: (1) the exercise of the spending power must be

in pursuit of the general welfare; (2) conditions imposed on the use of

federal funds must be reasonably related to the articulated goals; (3) the

intent of Congress to impose conditions must be authoritative and

unambiguous; and (4) the action in question must not be prohibited by an

independent constitutional bar. Id. at 207–08. See also, e.g., Nevada v.

Skinner, 884 F.2d 445, 447–48 (9th Cir. 1989).

With respect to the fourth restriction, the courts have struck down several

funding conditions as unconstitutional. For example:

• An appropriation act provision that prohibited the payment of salary to

certain named individuals was an unconstitutional bill of attainder.

United States v. Lovett, 328 U.S. 303 (1946).

• A court invalidated a provision in the 1989 District of Columbia

appropriation act prohibiting the use of funds unless the District

adopted legislation spelled out in the rider. The provision was struck

down on First Amendment grounds. Clarke v. United States,

705 F. Supp. 605 (D.D.C. 1988), aff’d, 886 F.2d 404 (D.C. Cir. 1989),

vacated en banc as moot, 915 F.2d 699 (D.C. Cir. 1990).

• The Supreme Court struck down a provision that prohibited grantees

from representing clients in efforts to amend or otherwise challenge

existing welfare law. Legal Services Corp. v. Velazquez, 531 U.S.

D. Constitutional

Limitations upon the

Power of the Purse

Chapter 2: The Legal Framework

Page 2-83 GAO-16-464SP

533 (2001). The provision interfered with the First Amendment rights

of clients represented by LSC-funded attorneys.

• A court declared unconstitutional an appropriation provision

forbidding the use of federal mass transit grant funds for any activity

that promoted the legalization or medical use of marijuana, for

example, posting an advertisement on a bus. American Civil

Liberties Union (ACLU) v. Mineta, 319 F. Supp. 2d 69 (D.D.C. 2004).

Relying on Legal Services Corp., the court held that the provision

constituted “viewpoint discrimination” in violation of the First

Amendment. ACLU, 319 F. Supp. 2d at 83–87.

• The Supreme Court overturned a funding condition in the United

States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act

of 2003. AID v. Alliance for Open Society International, Inc., ___ U.S.

___, 133 S. Ct. 2321 (2013). The condition required, among other

things, that funding recipients agree that they oppose prostitution and

sex trafficking in their award documents. This requirement violated

the First Amendment. The Court said that the requirement “goes

beyond preventing recipients from using funds in a way that would

undermine the federal program. It requires them to pledge allegiance

to the Government’s policy of eradicating prostitution.” 133 S. Ct. at

2332.

The Dole Court added that funding conditions would also exceed the

Spending Clause if “the financial inducement offered by Congress might

be so coercive as to pass the point at which ‘pressure turns into

compulsion.’” 483 U.S. at 211. Courts have been reluctant to find

funding conditions as unduly coercive, though, with an important recent

exception by the Supreme Court, discussed below. Examples of courts’

reluctance include:

• In Dole itself, the Supreme Court found that a law conditioning states’

receipt of federal highway funds on the adoption of a minimum

drinking age of 21 was a valid use of Congress’s spending power.

483 U.S. 203.

• The Supreme Court upheld the so-called Solomon Amendment,

which denied federal grants to institutions of higher education that

prohibit or prevent military recruitment on campus. Rumsfeld v.

Forum for Academic and Institutional Rights, Inc., 547 U.S. 47,

(2006). An association of law schools and faculty members

challenged the constitutionality of the Solomon Amendment, arguing

that it violated their First Amendment rights to oppose federal policies

that prohibited homosexuals from serving openly in the military. The

Supreme Court rejected these arguments, nothing that under the

Chapter 2: The Legal Framework

Page 2-84 GAO-16-464SP

Spending Clause, “Congress is free to attach reasonable and

unambiguous conditions to federal financial assistance that

educational institutions are not obliged to accept.” 547 U.S. at 59.

• A court upheld a statutory provision known as the “Civil Rights

Remedies Equalization Act,” 42 U.S.C. § 2000d 7, which clearly

conditioned a state’s acceptance of federal funds on its waiver of its

Eleventh Amendment immunity to suits under various federal

antidiscrimination laws. Barbour v. Washington Metropolitan Transit

Authority, 374 F.3d 1161 (D.C. Cir. 2004), cert. denied, 544 U.S. 904

(2005).

• The Supreme Court upheld a condition in the Children’s Internet

Protection Act (CIPA) as a legitimate exercise of congressional

spending power. United States v. American Library Ass’n, Inc.,

539 U.S. 194 (2003). CIPA barred public libraries from receiving

federal assistance to provide computer access to the Internet unless

they installed software to block obscenity and child pornography and

prevent minors from obtaining access to material harmful to them.

Pub. L. No. 106-554, § 1711. The Court rejected the claim that CIPA

constituted an impermissible coercion, explaining that CIPA did not

penalize libraries that chose not to install the software. Rather, it

simply precluded the use of taxpayer funds to subsidize those

libraries that chose not to install such software. Id. at 2307–08.

• Several courts have rejected challenges to section 3 of the Religious

Land Use and Institutionalized Persons Act of 2000 (RLUIPA),

42 U.S.C. § 2000cc-1, which limits restrictions on the exercise of

religion by persons institutionalized in a program or activity that

receives federal financial assistance. Cutter v. Wilkinson, 544 U.S.

709 (2005); Charles v. Verhagen, 348 F.3d 601 (7th Cir. 2003);

Williams v. Bitner, 285 F. Supp. 2d 593 (M.D. Pa. 2003), aff’d in part,

remanded in part 455 F.3d 186 (3rd Cir. 2006).

The Supreme Court recently found that one federal funding condition

went too far. The Court considered the constitutionality of a number of

provisions in the Patient Protection and Affordable Care Act (PPACA).

National Federation of Independent Business v. Sebelius, 567 U.S. ___,

132 S. Ct. 2566 (2012). One PPACA provision withheld all Medicaid

funding from states that declined to participate in a Medicaid extension

program. The Supreme Court held that this provision was not a valid

exercise of Congress’s spending power, as it coerced states to either

accept the Medicaid expansion or risk losing all Medicaid funding. The

Court explained that this would have an excessive impact on a state’s

budget. Accordingly, the Court severed this unconstitutional provision

from the rest of the act.

Chapter 2: The Legal Framework

Page 2-85 GAO-16-464SP

Appropriation acts, in addition to making appropriations, frequently

contain a variety of provisions either restricting the availability of the

appropriations or making them available for some particular use. Such

provisions come in two forms: (a) “provisos” attached directly to the

appropriating language and (b) general provisions. A general provision

may apply solely to the act in which it is contained (“No part of any

appropriation contained in this Act shall be used . . .”), or it may have

general applicability (“No part of any appropriation contained in this or any

other Act shall be used . . .”).

General provisions may be phrased in the

form of restrictions or positive authority.

Provisions of this type are no less effective merely because they are

contained in appropriation acts. Congress may repeal, amend, or

suspend a statute by means of an appropriation bill, so long as its

intention to do so is clear. Robertson v. Seattle Audubon Society,

503 U.S. 429, 440 (1992); McHugh v. Rubin, 220 F.3d 53, 57 (2d Cir.

2000); see also United States v. Dickerson, 310 U.S. 554 (1940); Cella v.

United States, 208 F.2d 783, 790 (7th Cir. 1953), cert. denied, 347 U.S.

1016 (1954); NLRB v. Thompson Products, Inc., 141 F.2d 794, 797 (9th

Cir. 1944); B-300009, July 1, 2003; 41 Op. Att’y Gen. 274, 276 (1956).

Congress likewise can enact general or permanent legislation in

appropriation acts, but again its intent to do so must be clear:

“While appropriations are ‘Acts of Congress’ which can substantively change

existing law, there is a very strong presumption that they do not . . . and that

when they do, the change is only intended for one fiscal year.”

Building & Construction Trades Department, AFL-CIO v. Martin, 961 F.2d

269, 273 (D.C. Cir.), cert. denied, 506 U.S. 915 (1992). As another court

put it:

“Congress may create permanent, substantive law through an appropriations bill

only if it is clear about its intentions. Put another way, Congress cannot rebut the

presumption against permanence by sounding an uncertain trumpet.”

In recent decades, general provisions of governmentwide applicability—the “this or any

other act” provisions—have often been consolidated in the annual Treasury and General

Government appropriation acts. E.g., Pub. L. No. 108-7, div. J, title I, § 104, 117 Stat. 11,

437 (Feb. 20, 2003) (fiscal year 2003). In recent years, these provisions appear in the

Financial Services and General Government Appropriations Act. See, e.g., Financial

Services and General Government Appropriations Act, 2015, Pub. L. No. 113-235, div. E,

title VII, 128 Stat. 2130, 2332, 2379 (Dec. 16, 2014).

E. General Provisions:

When Construed as

Permanent

Legislation

Chapter 2: The Legal Framework

Page 2-86 GAO-16-464SP

Atlantic Fish Spotters Ass’n v. Evans, 321 F.3d 220, 224 (1st Cir. 2003).

As discussed earlier in this chapter, rules of both the Senate and the

House of Representatives prohibit the inclusion of general legislation in

appropriation acts. Senate Rule XVI; House Rule XXI. However, this

merely subjects the provision to a point of order and does not affect the

validity of the legislation if the point of order is not raised, or is raised and

not sustained. Thus, once a given provision has been enacted into law,

the question of whether it is “general legislation” or merely a restriction on

the use of an appropriation, that is, whether it might have been subject to

a point of order, is academic.

This section deals with the question of when provisos or general

provisions appearing in appropriation acts can be construed as

permanent legislation.

Since an appropriation act is made for a particular fiscal year, the starting

presumption is that everything contained in the act is effective only for the

fiscal year covered. Thus, the rule is: A provision contained in an annual

appropriation act is not to be construed to be permanent legislation

unless the language used therein or the nature of the provision makes it

clear that Congress intended it to be permanent. The presumption can

be overcome if the provision uses language indicating futurity or if the

provision is of a general character bearing no relation to the object of the

appropriation. B-319414, June 9, 2010; 65 Comp. Gen. 588 (1986);

62 Comp. Gen. 54 (1982); 36 Comp. Gen. 434 (1956); 32 Comp. Gen. 11

(1952); 24 Comp. Gen. 436 (1944); 10 Comp. Gen. 120 (1930); 5 Comp.

Gen. 810 (1926); 7 Comp. Dec. 838 (1901).

In analyzing a particular provision, the starting point in ascertaining

Congress’s intent is, as it must be, the language of the statute. The

question to ask is whether the provision uses “words of futurity.” The

most common word of futurity is “hereafter” and provisions using this term

have often been construed as permanent. For specific examples, see

Cella v. United States, 208 F.2d at 790; 70 Comp. Gen. 351 (1991);

26 Comp. Gen. 354, 357 (1946); 2 Comp. Gen. 535 (1923); 11 Comp.

Dec. 800 (1905); B-108245, Mar. 19, 1952; B-100983, Feb. 8, 1951;

B-76782, June 10, 1948. However, use of the word “hereafter” may not

guarantee that an appropriation act provision will be found to constitute

permanent law. Thus, in Auburn Housing Authority v. Martinez, 277 F.3d

138 (2nd Cir. 2002), the court declined to give permanent effect to a

provision that included the word “hereafter”. The court acknowledged that

1. Words of Futurity

Chapter 2: The Legal Framework

Page 2-87 GAO-16-464SP

“hereafter” generally denoted futurity, but held that this was not sufficient

to establish permanence in the circumstances of that case. To read

“hereafter” as giving permanence to one provision would have resulted in

repealing another provision enacted in the same act.

The court

concluded that this result was not what Congress had intended.

As Auburn Housing Authority indicates, mere use of the word “hereafter”

may not be adequate as an indication of future effect to establish

permanence. Other facts such as the precise location of the word

“hereafter” and the sense in which it is used are also important.

Moreover, the use of the word “hereafter” may not be sufficient, for

example, if it appears only in an exception clause and not in the operative

portion of the provision, B-228838, Sept. 16, 1987, or if it is used in a way

that does not necessarily connote futurity beyond the end of the fiscal

year. Williams v. United States, 240 F.3d 1019, 1063 (Fed. Cir. 2001).

Words of futurity other than “hereafter” have also been deemed sufficient.

Thus, there is no significant difference in meaning between “hereafter”

and “after the date of approval of this act.” 65 Comp. Gen. at 589;

36 Comp. Gen. at 436; B-209583, Jan. 18, 1983. Similarly, an

appropriations provision requiring an agency action “not later than one

year” after enactment of the appropriations act, which would occur after

the end of the fiscal year, is permanent because that prospective

language indicates an intention that the provision survive past the end of

the fiscal year. B-319414, June 9, 2010. Using a specific date rather

than a general reference to the date of enactment produces the same

result. B-287488, June 19, 2001; B-57539, May 3, 1946. “Henceforth”

may also do the job. B-209583. So may specific references to future

fiscal years. B-208354, Aug. 10, 1982. On the other hand, the word

“hereinafter” was not considered synonymous with hereafter by the First

Circuit Court of Appeals and was not deemed to establish a permanent

provision. Atlantic Fish Spotters Ass’n, 321 F.3d 220. Rather, the court

held that hereinafter is universally understood to refer only to what follows

in the same writing (i.e., statute). Id. at 225–26.

The appropriation provision in Auburn Housing Authority was aimed at countering

another provision in the very same act. Thus, the court reasoned that the presumption

against repeal by implication was particularly strong in this case. Id. at 146. The court

also contrasted the hereafter provision with another provision in the same act that was

more explicit as to permanence. The latter provision read in part: “[T]his subsection shall

apply to fiscal year 1999 and each fiscal year thereafter.” Id. at 146–47.

Chapter 2: The Legal Framework

Page 2-88 GAO-16-464SP

One decision concluded that the words “at any time” were words of

futurity in a provision which authorized reduced transportation rates to

military personnel who were “given furloughs at any time.” 24 Comp.

Gen. 436, Dec. 7, 1944. In that decision, however, the conclusion of

permanence was further supported by the fact that Congress

appropriated funds to carry out the provision in the following year as well

and did not repeat the provision but merely referred to it.

The words “or any other act” in a provision addressing funds appropriated

in or made available by “this or any other act” are not words of futurity.

They merely refer to any other appropriation act for the same fiscal year.

Williams v. United States, 240 F.3d at 1063; 65 Comp. Gen. 588;

B-230110, Apr. 11, 1988; B-228838, Sept. 16, 1987; B-145492, Sept. 21,

1976.

See also A-88073, Aug. 19, 1937 (“this or any other

appropriation”). Similarly, the words “notwithstanding any other provision

of law” are not words of futurity and, standing alone, offer no indication as

to the duration of the provision. B-271412, June 13, 1996; B-208705,

Sept. 14, 1982.

The words “this or any other act” may be used in conjunction with other

language that makes the result, one way or the other, indisputable. The

provision is clearly not permanent if the phrase “during the current fiscal

year” is added. Norcross v. United States, 142 Ct. Cl. 763 (1958).

Addition of the phrase “with respect to any fiscal year” would indicate, all

other potential considerations aside, that Congress intended the provision

to be permanent. B-230110, Apr. 11, 1988. For example, in the 2006

Department of Justice Appropriations Act, as part of the language of

ATF’s Salaries and Expenses appropriation, Congress included a proviso

stating that “no funds appropriated under this or any other Act with

respect to any fiscal year may be used to disclose part or all of the

contents of the Firearms Trace System database” to anyone other than a

law enforcement agency or a prosecutor in connection with a criminal

investigation or prosecution. GAO determined that the proviso

constituted permanent legislation because the forward-looking effect of

the phrase “this or any other Act” coupled with the phrase “with respect to

any fiscal year” indicates Congress’s intention that the provision be

permanent. B-309704, Aug. 28, 2007; see also B-316510, July 15, 2008

One early case found the words “or any other act” sufficient words of futurity. 26 Comp.

Dec. 1066 (1920). A later decision, B-37032, Oct. 5, 1943, regarded their effect as

inconclusive. Both of these cases must be regarded as implicitly modified by the

consistent position expressed in the more recent decisions.

Chapter 2: The Legal Framework

Page 2-89 GAO-16-464SP

(a similar proviso in ATF’s 2008 appropriation, using the phrase

“beginning in fiscal year 2008 and thereafter,” is also permanent law).

If words of futurity indicate permanence, it follows that a proviso or

general provision that does not contain words of futurity will generally not

be construed as permanent. 65 Comp. Gen. 588; 32 Comp. Gen. 11;

20 Comp. Gen. 322 (1940); 10 Comp. Gen. 120; 5 Comp. Gen. 810; 3

Comp. Gen. 319 (1923); B-209583, Jan. 18, 1983; B-208705, Sept. 14,

1982; B-66513, May 26, 1947; A-18614, May 25, 1927. The courts have

applied the same analysis. See United States v. Vulte, 233 U.S. 509, 514

(1914); Minis v. United States, 40 U.S. (15 Pet.) 423 (1841); Bristol-Myers

Squibb Company v. Royce Laboratories, Inc., 69 F.3d 1130, 1136 (Fed.

Cir. 1995); United States v. International Business Machines Corp.,

892 F.2d 1006, 1009 (Fed. Cir. 1989); National Labor Relations Board v.

Thompson Products, Inc., 141 F.2d 794 (9

Cir. 1944); City of Hialeah v.

United States Housing Authority, 340 F. Supp. 885 (S.D. Fla. 1971).

In particular, the absence of the word “hereafter” is viewed as telling

evidence that Congress did not intend a provision to be permanent. E.g.,

Building & Construction Trades Department, 961 F.2d at 273;

International Business Machines Corp., 892 F.2d at 1009; Department of

Justice, Office of Legal Counsel, Memorandum for James S. Gilliland,

General Counsel, Department of Agriculture, Severability and Duration of

Appropriations Rider Concerning Frozen Poultry Regulations, June 4,

1996. For example, the court in Building & Construction Trades

Department concluded that the absence of the word hereafter in an

appropriation provision was more significant than the inclusion of other

language that might have indicated permanence.

As the preceding paragraphs indicate, the language of the statute is the

crucial determinant of whether a provision is permanent. However, other

factors may also be taken into consideration. Thus, the repeated

inclusion of a provision in annual appropriation acts indicates that it is not

considered or intended by Congress to be permanent. 32 Comp.

Gen. 11; 10 Comp. Gen. 120; B-270723, Apr. 15, 1996; A-89279, Oct. 26,

1937; 41 Op. Att’y Gen. at 279–80. However, where adequate words of

futurity exist, the repetition of a provision in the following year’s

appropriation act has been viewed simply as an “excess of caution.”

36 Comp. Gen. at 436. This factor is of limited usefulness, since the

failure to repeat in subsequent appropriation acts a provision that does

not contain words of futurity can also be viewed as an indication that

Congress did not consider it to be permanent and simply did not want it to

continue. See 18 Comp. Gen. 37 (1938); A-88073, Aug. 19, 1937. Thus,

2. Other Indicia of

Permanence

Chapter 2: The Legal Framework

Page 2-90 GAO-16-464SP

if the provision does not contain words of futurity, then repetition or non-

repetition lead to the same result—that the provision is not permanent. If

the provision does contain words of futurity, then non-repetition indicates

permanence but repetition, although it suggests non-permanence, is

inconclusive.

The inclusion of a provision in the United States Code is relevant as an

indication of permanence but is not controlling. B-319414, June 9, 2010;

36 Comp. Gen. 434; 24 Comp. Gen. 436. Failure to include a provision in

the Code would appear to be of no significance. A reference by the

codifiers to the failure to reenact a provision suggests non-permanence.

41 Op. Att’y Gen. at 280–81.

Legislative history is also relevant, but has been used for the most part to

support a conclusion based on the presence or absence of words of

futurity. See Cella v. United States, 208 F.2d at 790 n.1; NLRB v.

Thompson Products, 141 F.2d at 798; 65 Comp. Gen. 588; B-277719,

Aug. 20, 1997; B-209583, Jan. 18, 1983; B-208705, Sept. 14, 1982;

B- 108245, Mar. 19, 1952; B-57539, May 3, 1946. In one case, a general

provision requiring the submission of a report “annually to the Congress”

was held not permanent in view of conflicting expressions of

congressional intent. B-192973, Oct. 11, 1978. Legislative history by

itself has not been used to find futurity where it is missing in the statutory

language. See Building & Construction Trades Department, 961 F.2d

at 274.

The degree of relationship between a given provision and the object of

the appropriation act in which it appears or the appropriating language to

which it is appended is a factor to be considered. If the provision bears

no direct relationship to the appropriation act in which it appears, this is

an indication of permanence. For example, a provision prohibiting the

retroactive application of an energy tax credit provision in the Internal

Revenue Code was found sufficiently unrelated to the rest of the act in

which it appeared, a supplemental appropriations act, to support a

conclusion of permanence. B-214058, Feb. 1, 1984. See also B-319414,

June 9, 2010; 62 Comp. Gen. at 56; 32 Comp. Gen. 11; 26 Comp. Gen.

at 357; B-37032, Oct. 5, 1943; A-88073, Aug. 19, 1937. The closer the

relationship, the less likely it is that the provision will be viewed as

permanent. A determination under rules of the Senate that a proviso is

germane to the subject matter of the appropriation bill will negate an

argument that the proviso is sufficiently unrelated as to suggest

permanence. B-208705, Sept. 14, 1982.

Chapter 2: The Legal Framework

Page 2-91 GAO-16-464SP

The phrasing of a provision as positive authorization rather than a

restriction on the use of an appropriation is an indication of permanence,

but usually has been considered in conjunction with a finding of adequate

words of futurity. B-319414, June 9, 2010; 36 Comp. Gen. 434;

24 Comp. Gen. 436.

Finally, a provision may be construed as permanent if construing it as

temporary would render the provision meaningless or produce an absurd

result. 65 Comp. Gen. 352 (1986); 62 Comp. Gen. 54; B-200923, Oct. 1,

1982. These decisions dealt with a general provision designed to prohibit

cost-of-living pay increases for federal judges “except as may be

specifically authorized by Act of Congress hereafter enacted.” Pub. L.

No. 97-92, § 140, 95 Stat. 1183, 1200 (Dec. 15, 1981). The provision

appeared in a fiscal year 1982 continuing resolution, which expired on

September 30, 1982. The next applicable pay increase would have been

effective October 1, 1982. Thus, if the provision were not construed as

permanent, it would have been meaningless “since it would have been

enacted to prevent increases during a period when no increases were

authorized to be made.” 62 Comp. Gen. at 56–57.

Similarly, GAO

concluded that a provision with no words of futurity was permanent,

because it was to become effective on the last day of the fiscal year.

9 Comp. Gen. 248 (1929). An alternative construction would have

rendered the provision effective for only 1 day, which was clearly

inconsistent with legislative intent. See also B-319414, June 9, 2010;

B-270723, Apr. 15, 1996; 65 Comp. Gen. at 590; B-214058, Feb. 1, 1984.

In sum, the six additional factors mentioned above are all relevant indicia

of whether a given provision should be construed as permanent.

An early decision held a proviso to be permanent based solely on the fact that it was

not phrased as a restriction on the use of the appropriation to which it was attached.

17 Comp. Dec. 146 (1910). This decision seems inconsistent with the weight of authority

and certainly with the Supreme Court’s decision in Minis v. United States, cited above.

In Williams v. United States, 240 F.3d at 1026, the Court of Appeals for the Federal

Circuit held that the provision addressed in these decisions was not permanent, referring

to the “unmistakable language of Public Law 97-92 . . . terminating the effect of

Section 140 in 1982.” The court did not address the consequence, if any, of Congress’s

use of the word hereafter. The court did concede, however, that “even if Section 140 did

not expire as of September 30, 1982, the 1989 Act falls well within the specific exception

in that statute for an ‘Act of Congress hereafter enacted.’” Id. at 1027. The 1989 Act the

court referred to is the Ethics Reform Act, Pub. L. No. 101-194, 103 Stat. 1716 (Nov. 30,

1989), which entitled federal judges to cost-of-living pay increases whenever federal

employees received a cost-of-living increase. The 1989 Act was enacted after the series

of GAO decisions was issued that addressed the fiscal year 1982 law.

Chapter 2: The Legal Framework

Page 2-92 GAO-16-464SP

However, the presence or absence of words of futurity remains the crucial

factor, and the additional factors have been used for the most part to

support a conclusion based primarily on this presence or absence. Four

of the factors—occurrence or nonoccurrence in subsequent appropriation

acts, inclusion in United States Code, legislative history, and phrasing as

positive authorization—have never been used as the sole basis for finding

permanence in a provision without words of futurity. The two remaining

factors—relationship to rest of statute and meaningless or absurd result—

can be used to find permanence in the absence of words of futurity, but

the conclusion is almost invariably supported by at least one of the other

factors, such as legislative history.