oversight

Executive Impounding of Funds

Published by the Government Accountability Office on 1971-03-25.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                      ITED STATES GENERAL ACCOUNT1                             FFICE                  .--
                                           WASHINGTON, D. C. 20548


                                                                                     FOR RELEASE ON DELIVERY
                                                                                     Expected at 2:30 p.m., EST
                                                                                     Thursday, March 25, 1971


                                 STATEMENT OF
        ROBERT F. KELLER, ASSISTANT COMPTROLLERGENERAL OF THE UNITED STATES
                                  BEFORE THE
                       SUBCOMMITTEE ON SEPARATION OF POWERS
                            COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE



        Mr. Chairman                and Members of the Subcommittee:

        We are pleased                to appear before              you today         to discuss            the functions

of the General           Accounting              Office      insofar        as they        relate     to the withhold-

ing of funds          by the Executive                Branch        after       congressional              action    making

funds     available           for     expenditure.

        Executive            impounding          of funds has a number of facets                            both    factually

and legally.            It     may occur          at various           levels     within       the Executive            Branch

of Government           and involve              problems         of statutory         and constitutional                   con-

struction       and policy             considerations.                 It   is a problem            that     has become

quite     significant           within         the past       thirty        years.      This        topic        has been

the subject         of extensive               writings.           One recent         example        is by Senator

Church,      in the Stanford               Law Review,             entitled:         "Impounding            of

Appropriated          Funds:          The Decline           of Congressional               Control         Over Execu-

tive    Discretion,"                22 Stan.      L. Rev. 1240-1253               (1970).

        Previous        witnesses          before          your    Committee         have no doubt mentioned

the complex         issues           involved,       such as:
         --      Are appropriations                made by the             Congress        to be

                 considered         as a mandate            to spend the            full      amount

                 or are they           a ceiling          on amounts         to be expended?

         -‘-’    Is a deferral           of expenditure              for     a project            or

                 activity        a frustration            by the Executive                 Branch

                 of the       action     of Congress           if   the project              or

                 activity        is prosecuted             at a later         point        in time?

         --      The authority              in the “Anti-deficiency                   Act”        for

                 the President,              acting       through     the Office             of

                 Management         and Budget,            in making         apportionments                to

                  establish        reserves        to provide          for    contigencies                and

                  for   savings        when made possible                  by changes         in require-

                 ments,        greater       efficiency        of operations,                or other

                  developments           subsequent         to the         date    appropriations

                  are made available.

         I-       The responsibility               of the President                to see that             all

                  laws are       faithfully           executed       which        requires         that

                  spending       authorities           be balanced           against         expenditure

                  limitations          which     may be enacted              by the Congress                as

                 well       as against        public       debt     limitations.

         These are difficult                   problems       and can only            be judged            by the         con-

siderations,            both      factual       and legal,          in the        individual            case.

         The General            Accounting         Office      is not        in a position                to resolve         these
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issues          and any opinion             which might        have in an individual                       case would
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    for     all     practical           purposes            be advisory          only.        Our enforcement                power is

    that      of disallowance                   of expenditures.                 We have no power to direct                           an

    expenditure             except        in the limited                 area      of settlement           of claims.

             The General              Accounting              Office      was established             by the Budget                and

    Accounting             Act,     1921,         to examine the manner in which                           Government

    agencies          discharge          their            financial       responsibilities                with      regard      to

    public         funds      appropriated                 or otherwise          made available             to them by the

    Congress,             and to make recommendations                           looking       to greater            economy and

    efficiency             in public            expenditures.

             Our present              audit         authority          with     respect       to the Government                 as a

    whole         is derived          from two sources.                       Section     321 of the Budget                  and

    Accounting             Act,     1921, provides                 in part         “***The       Comptroller          General          shall

    investigate,              at the seat                 of Government          or elsewhere,             all      matters

    relating          to the receipt,                     disbursement,          and application                 of public

    funds."           Section         Ill(d)             of the Accounting              and Auditing             Act of 1950

    provides,             "***The       auditing            for    the Government,               conducted          by the

    Comptroller             General         of the United                States,        an agent      of the Congress,

    be directed             at determining                  the extent          to which         accounting          and related

    financial             reporting            fulfill        the purposes           specified,           financial          trans-

    actions         have been consummated                         in accordance           with     laws,         regulations,              or

    other         legal      requirements                , and adequate            internal       financial          control         over

    operations             is exercised                  and afford       an effective            basis       for    the settlement

    of accounts             of accountable                  officers."



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.




           In carrying          out our work with                  respect      to an agency             activity,          or

    program,    the      following        matters             are examined:

           --   Whether         the agency             is     carrying      out only         those

                activities            or programs              authorized       by the         Congress

                and is        conducting           them in the manner contemplated,

                and to an increasing                         degree,     whether       they     are

                accomplishing             the objectives                  intended.

           --   Whether         the programs                and activities            are conducted

                and expenditures                  are made in an efficient                      and

                econom.ical            manner and in compliance                       with     the    require-

                ments of applicable                     laws and regulations.

           --   Whether         the     resources             of the agency,           including           funds,

                property,             and personnel,              are adequately              controlled            and

                   utilized      in an effective,                  efficient          and economical

                manner.

           --   Whether         all     revenues             and receipts       arising          from the

                   operations          are collected              and properly           accounted          for.

           --   Whether         reports      by the agency to the                      Congress          and the

                   central      control      agencies             disclose      properly          the      infor-

                mation        required           for        the purposes       of the         reports.

           In summary,          the thrust             of our audits           and reviews            relates         to the

    legality       of activities           and programs;                 the efficiency           and effectiveness

    with   which      they    are      carried         out;      and whether          the     funds      utilized         have



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been properly                accounted          for.       We have issued             numerous            reports         to the

Congress           on these          matters,          but we have not              geared      our       audits         and reviews

to emphasize            whether          agencies          should        have expended            fully          the     funds    that

were made available                     for     their      use,     nor have we challenged                        actions        by

the Executive                Branch with           respect         to impounding           or withholding                  of

app ropri at ions.              It     may be that            in particular             cases we have reported

that     a program            or activity              was not       completely         carried          out as a result

of     fund     reservation.

         Senator           Church      in his           law review        article       suggested               as one pos-

sible       solution          to the problem               of executive             impounding           of appropriated

funds       that     “The duties              of the       General        Accounting           Office,           an arm of

the     legislative            branch,          might      be augmented             to include           supervision             of

expenditures               in order       to identify             when impounding               has occurred.”

We have some question,                        however,        as to whether             this     would          be the most

productive           use of our           staff          resources       when direct            reporting              to the

Congress           by the Office              of Management              and Budget whenever                     funds     are

reserved,           also      suggested          by Senator           Church,        would      seem to be a more

effective           means for          Congress           to obtain          the    information            it     requires.

However,           should      the     Congress           decide      that     our Office          can assist              in the

solution           we will      be glad           to cooperate            fully.

         This       concludes          my statement,               Mr.    Chairman.




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