oversight

Budgeting for Emergencies: State Practices and Federal Implications

Published by the Government Accountability Office on 1999-09-30.

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

                  United States General Accounting Office

GAO               Report to the Honorable Frank R.
                  Lautenberg, Ranking Minority Member,
                  Committee on the Budget, U.S. Senate


September 1999
                  BUDGETING FOR
                  EMERGENCIES

                  State Practices and
                  Federal Implications




GAO/AIMD-99-250
Contents



Letter                                                                                    2


Appendixes   Appendix I:   State Budget Reserves in Five Site Visit States               32
             Appendix II: Emergency Budget Authority, Fiscal Years 1991
               Through 1999                                                              36
             Appendix III: Nonmilitary Programs That Received Emergency
               Supplemental Appropriations in at Least Five of the Last Eight
               Years                                                                     58


Tables       Table 1: Fiscal Year 1998 General Fund Reserves for Five Study States
               (Dollars in Millions)                                                     11
             Table 2: Emergency Budget Authority as Percentage of Discretionary
               Budget Authority Fiscal Years 1991 Through 1999 (Dollars in Billions)     18
             Table 3: Emergency Budget Authority by Category, Fiscal Years 1991
               Through 1999 (Dollars in Billions)                                        19
             Table 4: Governmentwide Reserves for General Purposes                       32
             Table 5: Governmentwide Reserves for Specific Purposes                      34
             Table 6: Agency-Specific Reserves for Specific Purposes                     35




             Abbreviations

             BEA        Budget Enforcement Act of 1990
             CBO        Congressional Budget Office
             FEMA       Federal Emergency Management Agency
             LIHEAP     Low-Income Home Energy Assistance Program
             NASBO      National Association of State Budget Officers
             OMB        Office of Management and Budget
             PAYGO      pay-as-you-go
             SBA        Small Business Administration
             USDA       Department of Agriculture




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United States General Accounting Office                                                    Accounting and Information
Washington, D.C. 20548                                                                          Management Division



                                    B-279978                                                                                 Leter




                                    September 30, 1999

                                    The Honorable Frank R. Lautenberg
                                    Ranking Minority Member
                                    Committee on the Budget
                                    United States Senate

                                    Dear Senator Lautenberg:

                                    In recent years, the Congress has shown an interest in changing the way
                                    that emergencies are funded. Last year, a bipartisan House of
                                    Representatives task force reviewed emergency funding issues as part of a
                                    larger review of federal budget processes, and bipartisan task forces in
                                    both the Senate and the House reviewed similar issues in 1994.1 In these
                                    congressional reviews, concerns were raised about several issues,
                                    including the relationship between funding emergencies and complying
                                    with the requirements of various budget control acts, including the Budget
                                    Enforcement Act of 1990 (BEA).

                                    Federal emergency appropriations totaled more than $114 billion from
                                    fiscal year 1991 through fiscal year 1998 and ranged in amounts from a high
                                    of about $45 billion in 1991 to a low of nearly $6 billion in 1996. Fiscal year
                                    1999 emergency appropriations represent the highest level to date since the
                                    Gulf War in 1991. The 1999 Omnibus Consolidated and Emergency
                                    Supplemental Appropriations Act included over $21 billion in emergency
                                    appropriations, and an additional $14.7 billion of midyear emergency
                                    supplemental appropriations was recently enacted in the 1999 Emergency
                                    Supplemental Appropriations Act. Both the 1999 Omnibus Act and the
                                    recent debates on emergency supplemental bills have increased visibility of
                                    emergency spending issues among members of Congress, including the
                                    view that the emergency designation can be applied too broadly.

                                    In your request you observe that a common action taken by many states
                                    currently experiencing budgetary surpluses has been to set aside money in
                                    reserve or contingency funds to help prepare for periods of economic


                                    1
                                     Federal Disaster Assistance, Bipartisan Task Force on Funding Disaster Relief, United
                                    States Senate, Document 104-4, March 1995 and Report of the Bipartisan Task Force on
                                    Disasters, U.S. House of Representatives, December 1994.




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                   downturn or other unforeseen events. States are not usually exposed to
                   demands for large funding increases as a result of natural or man-made
                   disasters since the federal government usually covers most of the costs for
                   these situations. However, states face other kinds of budget uncertainty
                   and the prospect of unexpected demands on state funds. Most states have
                   experienced robust economic conditions for several years, and many have
                   used this opportunity to build up their reserves in preparation for
                   unexpected budget pressures.

                   Specifically, you asked us to look at state practices and experience with
                   reserve funds to see if they might inform the federal debate on the
                   emergency funding process. This report responds to your request for
                   information on state experiences with reserve funds for emergencies or
                   other unpredictable funding needs and state practices that could be
                   instructive in the emergency spending debate, particularly regarding how
                   the federal government might budget for emergencies with surplus funds.



Results in Brief   Most states prepare for future budget uncertainty by establishing reserves.
                   These reserves include budget stabilization funds, emergency funds, and/or
                   contingency accounts, many of which have specific criteria for their use.
                   Our analysis of federal emergency funding from 1991 to the present showed
                   that many different types of programs were funded through emergency
                   supplemental appropriations—a more “after-the-fact” approach. When the
                   federal government provides funding in advance for programs that play a
                   role in emergency activities, such as for the Federal Emergency
                   Management Agency's (FEMA) Disaster Relief Fund, it is usually only a
                   portion of the total eventually appropriated in a given year. As the federal
                   government considers proposals to change the emergency funding process,
                   state practices may offer some insights for establishing criteria for
                   emergencies and setting aside budgetary resources for potential
                   emergencies.

                   State experience indicates that criteria for using emergency reserve funds
                   may be useful in helping to control emergency spending. These criteria
                   include both conditions and events for spending to qualify as emergencies.
                   For example, in one state, emergency spending must meet the conditions of
                   being “necessary” and “unforeseen” and is further restricted to the costs
                   associated with responding to and recovering from natural disasters.
                   Enforceable criteria established for federal emergency spending, either for
                   the current process for funding emergencies or when creating new
                   emergency reserves, might constrain use of the emergency designation.



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State reserves are designed to provide a cushion for budget uncertainty. In
addition to carrying over any end-of-year general fund balances to the next
fiscal year, we found that the five states in our study (California, Delaware,
Florida, Missouri, and Oklahoma) also established three different types of
more formal reserves to deal with budget uncertainty. The first are general
purpose statewide reserves, such as budget stabilization (“rainy day”)
funds and/or non-appropriated revenue designed to provide a cushion for
the general fund in times of fiscal stress. The second group consists of
statewide reserves for specific purposes such as natural disasters. Finally,
states may use agency-specific reserves to provide a cushion in case
increased caseloads or other uncontrollable costs drive spending for a
particular program over regular appropriation levels. If a state does not
have reserves available or chooses not to use its reserves to respond to a
change in funding requirements, it may use other strategies, including
lowering spending, raising revenues, transferring money between funds,
passing supplemental appropriations, and borrowing.

Although state practices concerning reserve funds reflect the difference
between state and federal budgeting, they may provide a conceptual model
when considering whether to create emergency reserves at the federal
level. Experience shows that the federal government will need to respond
to some level of emergency need. The question is not whether there will be
emergency spending, but rather at what point in the budget process these
costs will be recognized. By creating an emergency reserve, the Congress
could consider these costs as part of the annual resource allocation
process, ensuring that emergency needs are recognized earlier in the
process.

Should the Congress decide to move to a reserve-funding model for
emergencies, state practices provide some insight on issues to consider in
designing such a process. Federal funds could be governmentwide or
agency specific. Federal governmentwide emergency reserves could set
aside budget authority in advance for expected yet unpredictable events as
part of the annual resource allocation process. This is essentially the
approach taken by states that establish “rainy day” funds or appropriate
less than their estimated revenues each year. Instead or in addition, federal
emergency reserves might also be established specifically for those
agencies that regularly respond to federal emergencies. Criteria for use of
these reserves might be more narrowly defined and linked to specific
circumstances related to an agency's mission. We were told in one state
that the creation of dedicated reserves for those agencies most likely to




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             need emergency or supplemental funding each year has reduced the need
             for midyear supplemental appropriations.

             The creation of these two types of reserves would require answering a
             number of other key design questions including: What criteria should be
             used to access the reserve? Who may approve the use of these funds? How
             large should the reserve be? Do unused funds lapse at the end of each fiscal
             year? Should the reserve be included under the spending caps? This report
             presents an analysis of alternative approaches to address these issues.



Background   Over the years, various attempts have been made to control federal
             spending. Amendments to the Balanced Budget and Emergency Deficit
             Control Act of 1985 sought to limit supplemental appropriations proposed
             by either the President or the Congress to cases of “dire emergency.”2 The
             Congress and the President further changed the budget process with the
             passage of BEA. That law established limits on discretionary spending,
             imposed deficit-neutral pay-as-you-go (PAYGO) rules for mandatory
             spending, and created an exemption for spending designated as an
             emergency.3 The idea was to allow for an emergency safety valve under the
             spending caps imposed by the new law. Under this law, any appropriations
             designated as emergency spending by the President and the Congress are
             exempt from the discretionary limits or the PAYGO requirements, and so
             add to the deficit or reduce the surplus.4 The President and the Congress
             may also agree to offset some or all emergency spending in a given year
             through rescissions elsewhere in the budget.5




             2
              For a discussion of emergency spending see also the Congressional Budget Office
             memorandum entitled “Emergency Spending Under the Budget Enforcement Act”
             (December 1998).
             3
              The budget rules contained in the Budget Enforcement Act of 1990 have been reaffirmed in
             two subsequent laws: the Omnibus Budget Reconciliation Act of 1993, which extended
             BEA's caps through 1998, and the Balanced Budget Act of 1997, which extends the caps
             through 2002.
             4
              Although commonly referred to as an “exemption” from the caps, the caps are actually
             adjusted upward to account for the amount of emergency spending.
             5
              Although rescissions may offset some spending, the caps are raised by the full amount of
             the spending designated as “emergency.” Thus, the rescissions, in effect, free up funds under
             the caps.




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There are three ways that emergency appropriations can be provided to
federal agencies. First, agencies may receive emergency appropriations as
part of their regular annual appropriation. These funds can be used by
agencies for emergencies without any additional action by the President or
the Congress. Second, agencies may receive contingent emergency
appropriations, that is, funds which are designated by the Congress as
emergency funds but whose use is contingent on a Presidential designation
of an emergency. The third way to provide emergency funding is through
enactment of emergency supplemental appropriations. Prior to the 1999
Omnibus Appropriations Act, most emergency funding was provided
through these supplemental appropriations. These funds generally
appeared in stand-alone bills but occasionally appeared in larger
supplemental bills that included funding for agency activities other than
emergency response. In such larger bills, only the portion designated as an
emergency is exempt from the spending caps.

Reserves for emergencies are used to a much greater extent by the states
than by the federal government. Emergencies, however, are only part of
what states prepare for when they establish reserves to address budget
uncertainty. According to the National Association of State Budget Officers
(NASBO), 44 states have established budget stabilization funds−commonly
referred to as “rainy day” funds−to address budget uncertainty, most often
related to unanticipated revenue shortfalls. In addition, NASBO reported
that 47 states have established separate funds specifically designed to
provide funding for state emergencies or other contingencies. The purpose
of these accounts is to set aside money for emergencies or other difficult to
estimate expenditures that may occur during the fiscal year.6

There are significant differences in the fiscal and budgetary environments
of the states and the federal government that must be considered when
attempting to apply lessons from state practices to the federal government.
First, state budgets are generally more constrained than the federal budget
as a result of balanced budget requirements and borrowing restrictions.
Most states have constitutional or statutory provisions requiring that they
balance their operating budgets, commonly referred to as their “general
fund.”7 Coupled with budget disciplines imposed by the bond rating

6
 For a discussion on how states plan for emergencies, see Congressional Budget Office
testimony entitled How States Budget and Plan for Emergencies (June 23, 1998).
7
 In addition to the general (operating) fund, states may also have other funds such as capital
funds, special revenue funds, and trust funds.




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              agencies, balanced budget requirements encourage states to budget
              conservatively. Failing to acknowledge likely contingencies in the budget
              can result in budget shortfalls that may require painful and/or unpopular
              spending cuts or tax increases to restore balance. Second, governors tend
              to have greater control over budget execution, especially in states with
              part-time legislatures where decision-making authority is delegated to the
              executive branch to ensure that the government is responsive during
              emergencies.

              In contrast, the open-ended nature of federal mandatory spending, the
              exemption from the discretionary spending caps for emergencies under the
              BEA, and the general ease with which the federal government can borrow
              combine to give the federal government more budgetary flexibility. Recent
              proposals to set aside the Social Security surplus, however, would impose
              additional constraints on federal budget flexibility. If the Congress chose to
              adopt such a requirement, emergency funds would have to be funded
              through the “on-budget” surplus or by cutting spending elsewhere to avoid
              using the “off-budget” Social Security surplus.8 Some would argue that less
              federal budget flexibility could create the incentive to establish federal
              emergency reserves similar to those used by the states both to set aside
              budgetary resources in advance and to ensure that the off-budget surplus is
              not used in the event of an emergency.



Scope and     To address our objectives, we collected and analyzed information on state
              reserve funds including budget stabilization funds, contingency funds, and
Methodology   emergency funds. Based on this information, we selected five states for
              detailed review: California, Delaware, Florida, Missouri, and Oklahoma. We
              selected these states for the diversity they provided in terms of size and
              types of reserves, geographic location, exposure to different types of
              budget uncertainty, such as fiscal crises and/or natural disasters, and the
              balance between executive and legislative branch control.

              We interviewed state officials in the executive branch budget office,
              legislative fiscal office, and emergency management agencies. We reviewed



              8
               Under current law, the Social Security trust funds and the Postal Service are “off-budget.”
              Since Social Security currently collects more through payroll taxes than it pays out in
              benefits, it runs a cash surplus. Requiring that this surplus be “saved” would limit additional
              spending and tax cuts to the amount of the “on-budget” surplus.




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                      state budget and financial documents, relevant state constitutional and
                      statutory citations, and state association publications.

                      To understand the federal issues, we reviewed recent federal legislation,
                      relevant reports and studies, and congressional testimony and we
                      interviewed federal officials from the Congressional Budget Office (CBO),
                      Office of Management and Budget (OMB), and FEMA. We also reviewed
                      federal appropriation laws from 1991 through May 1999 to identify federal
                      programs that were funded through emergency appropriations, to
                      categorize the appropriations by type of spending, and to determine the
                      amount and frequency of emergency appropriations for individual federal
                      programs. We asked officials at CBO and OMB to conduct a technical
                      review of our draft report, and their comments have been incorporated as
                      appropriate. We conducted our work from August 1998 through June 1999
                      in accordance with generally accepted government auditing standards.



States Set Aside      States in our study have taken what they see as a fiscally prudent approach
                      to addressing budget uncertainty by setting aside funds in various reserve
Reserves to Address   funds and accounts. From a budgeting standpoint, states are most
Budget Uncertainty    concerned about situations that would have a severe fiscal impact, such as
                      a large decrease in revenues or dramatic increases in program
                      expenditures. While natural disasters and similar emergency situations
                      have an impact on state finances, states are less concerned about these
                      situations because they rely on the federal government to provide most of
                      the funding for recovery efforts. For example, although California has
                      experienced many catastrophic natural disasters in the last 10 years, it does
                      not provide any advance funding for disaster costs. Instead, the state
                      includes in its budget for an upcoming fiscal year only the estimated state
                      share of funds needed for prior years' disasters.9




                      9
                       For example, California officials told us that the state increased the sales tax by 1/4 percent
                      for about a year to generate the funds it needed to pay the state's share of disaster recovery
                      costs related to the 1989 Loma Prieta earthquake.




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Most states have significant fiscal constraints—either legal, such as
balanced budget requirements and borrowing restrictions, or imposed by
bond markets, which encourage them to provide funding in advance for
particular budgetary uncertainties. Balanced budget rules vary among the
states, but typically they require the governor to propose, the legislature to
enact, and the governor to sign a balanced operating budget—commonly
referred to as the general fund budget.10 According to the National
Association of State Budget Officers (NASBO), only California, of our five
study states, does not require the legislature to enact and the governor to
sign into law a balanced budget. If states with balanced budget
requirements fail to acknowledge contingencies in their budgets and
provide a reasonable amount of funding in advance, budget shortfalls may
require midyear budget adjustments, such as spending cuts or tax
increases, to prevent or eliminate a budget deficit.

In addition to balanced budget requirements, borrowing restrictions also
encourage states to budget for uncertainty. Short-term borrowing to
finance state operating costs may be prohibited by state constitution or
statute. Two of our study states, Florida and Missouri, cannot borrow on a
short-term basis for their operating budgets. Without adequate reserves
available to mitigate a fiscal crisis, states without short-term borrowing
capabilities would have little choice but to reduce spending, increase
revenue, or make other short-term budget adjustments. Even if a state is
permitted to borrow short term to fund unanticipated needs, the practice
may be viewed unfavorably by bond rating agencies that establish credit
ratings for states and so play a role in determining a state's borrowing
costs.11




10
 See Balanced Budget Requirements: State Experiences and Implications for the Federal
Government (GAO/AFMD-93-58BR, March 26, 1993).
11
 General obligation debt is debt backed by the full faith and credit of the state government
and most often represents borrowing by the state to fund capital projects such as highways,
public schools, and correctional facilities.




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                             Other fiscal constraints, such as a limit on the amount of general fund
                             revenue that can be collected and retained or a limit on general fund
                             expenditures, may result in greater state reserves.12 For example, Florida
                             has a revenue limit that may require it to deposit excess revenue in its
                             budget stabilization fund for future needs. Florida's revenue growth rate is
                             limited to the growth rate of personal income in the state. Any revenue
                             collected beyond this amount must be deposited into the state's rainy day
                             fund; once that fund reaches its statutory maximum level, excess revenues
                             must be returned to taxpayers. Another state in our study—Oklahoma—
                             has a spending limit that may require rainy day fund deposits. In Oklahoma,
                             only 95 percent of the forecasted revenue for the current fiscal year is
                             available for appropriations; the other 5 percent is carried over to the next
                             year. If the state's actual revenue collections came in at 102 percent of the
                             forecast, 5 percent would be made available for appropriations in the
                             subsequent fiscal year and the unexpected 2 percent would be deposited
                             into the state's rainy day fund.


States Establish Various     States completed fiscal year 1998 in strong fiscal condition with sizeable
Types of Reserves to         general fund balances. NASBO reported that the states ended the year with
                             combined general fund surpluses of approximately $38 billion.13 These
Address Budget Uncertainty
                             surpluses comprise both general fund end-of-year balances and budget
                             stabilization funds. The amount states accumulate as general fund
                             surpluses are the direct result of past budgetary decisions, the health of the
                             economy, and other factors. When states are projecting an end-of-year
                             surplus, they typically include this estimated amount as the “beginning
                             balance” in the subsequent year's general fund budget.14 As discussed
                             below, states may also choose to deposit some or all of any surplus into
                             more formal reserves rather than carrying the surplus over as an end of


                             12
                               Revenue or tax limits specify the amount of taxes that can be collected and retained by the
                             state in a fiscal year, and are usually tied to measures of economic activity such as personal
                             income growth. In most cases, amounts in excess of the limit must be refunded to taxpayers
                             in a subsequent fiscal year. Spending limits usually constrain the amount the state can
                             appropriate for general fund programs and may also be tied to economic activity or other
                             factors such as inflation rates or population growth.
                             13
                              However, some have argued that states are not adequately funding their reserves given the
                             healthy economy. See the report from the Center on Budget and Policy Priorities entitled
                             When It Rains It Pours, March 1999.
                             14
                              Conversely, states may forecast a budget deficit to begin the fiscal year, in which case
                             actions to close the fiscal gap would be necessary.




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year balance. In contrast, federal unified budget surpluses represent annual
revenues in excess of expenditures and are not cumulative from one year
to the next.15 Table 1 shows the combined general fund carryover balance
and rainy day fund balances as a percent of general fund expenditures for
the five states in our study for fiscal year 1998.



Table 1: Fiscal Year 1998 General Fund Reserves for Five Study States (Dollars in
Millions)

                                                                           Reserves as a percent
                      Total general fund           Total general fund            of general fund
State                      expenditures                     reserves               expenditures
California                        $53,344                        $3,075                          5.8%
Delaware                            $1,900                         $539                          28.4%
Florida                           $17,078                        $1,443                          8.4%
Missouri                            $6,617                         $398                          6.0%
Oklahoma                            $4,200                         $471                          11.2%


Source: National Association of State Budget Officers, Fiscal Survey of the States, June 1999.


Formal reserves established by states can be grouped into three main
categories, as shown in appendix I.16 We have labeled the first category
“statewide reserves for general purposes.” These funds are generally
available for any program or activity normally funded out of the state
general fund. The most common type of general purpose, statewide reserve
is the budget stabilization fund. These “rainy day” funds are designed
primarily to reduce the fiscal impact of revenue shortfalls or dramatic cost
increases, but in some cases they may also be used to respond to
emergencies, such as a natural disaster. Rainy day fund balances usually
represent actual cash held by the state.17 For example, Florida established a
budget stabilization fund in 1994 to reduce the fiscal impact of any future
revenue shortfalls. This fund had a cash balance of about $786 million at
the end of fiscal year 1998, representing about 4.5 percent of fiscal year


15
 Any surplus at the end of the federal fiscal year is generally used to reduce debt levels. See
Federal Debt: Answers to Frequently Asked Questions—An Update (GAO/OCG-99-27, May
28, 1999) for additional information.
16
 See Emergency Criteria: How Five States Budget for Uncertainty (GAO/AIMD-99-156R,
April 20, 1999) for a discussion of reserves and criteria for our five study states.




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1998 general fund appropriations. Typically, rainy day funds are not
appropriated until they are actually needed and therefore are released by
the legislature through special appropriations upon a request by the
governor. States may also establish other cash reserves designed to provide
funding for short-term cash flow imbalances. For example, Oklahoma uses
its Cash Flow Reserve Fund to make payments in the first part of the fiscal
year because it has not yet allocated current year revenues to agencies.
This fund is also used at other times during the year to cover the cash flow
needs of the state.

Three of the states we studied have established statewide, general-purpose
reserves by appropriating less than 100 percent of anticipated general fund
resources for the upcoming fiscal year.18 Delaware withholds 2 percent of
its revenue estimate from the total general fund revenue available for
appropriations in the current fiscal year. As noted above, Oklahoma
withholds 5 percent of its expected general fund revenue. Delaware's
revenue set-aside is available for emergency needs in the current year, but
Oklahoma's is not available until the subsequent year. Missouri has a
supplemental reserve consisting of non-appropriated revenue received in
the prior fiscal year; it is made available during the current fiscal year, as
needed, via the supplemental appropriations process.

There is a second category of reserves we have labeled “statewide funds or
accounts designated for specific purposes.” In most cases, these reserves
are established by appropriating a portion of the general fund into a
separate account available to state agencies for specifically defined
purposes. This category includes funds or accounts designed to (1) help
agencies respond to emergencies such as natural disasters, (2) provide
additional funds to state agencies when costs are higher than expected, or
(3) cover costs related to legal judgments against the state. For example,
Oklahoma uses its State Emergency Fund to cover state costs related to
natural disaster response and recovery; Delaware uses its Legal Fees Fund



17
  States budget on a fund basis and use general purpose, statewide reserves to provide cash
resources when the state experiences fiscal stress. Under the federal government's unified
budget approach, it would set aside budget authority rather than cash; this avoids a situation
in which the federal government would hold excess cash while simultaneously issuing
additional debt and increasing its interest costs.
18
  California may not appropriate its entire revenue estimate in a given year, but its reserve is
less formal and can be used at any time after the budget is enacted.




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                          as the primary source of funding to pay the costs of legal settlements or
                          judgments.

                          Finally, we identified a third category of reserves which we labeled
                          “agency-specific reserves for defined purposes.” Agency-specific reserves
                          are also created by appropriating funds from the general fund but are
                          intended to provide a cushion in the event that regular agency
                          appropriations for a particular program or activity are insufficient.
                          Allowable uses of these reserves are narrowly defined to ensure that funds
                          are only used for unanticipated costs of the targeted program or activity.
                          For example, Missouri's Corrections Growth Pool account is designed to
                          provide additional funding to the state correctional agency for costs
                          associated with unexpected growth in the prisoner population. Funds
                          appropriated to this account cannot be used for new initiatives, unrelated
                          activities, or transferred to other state agencies.


States May Establish      When establishing reserves, states usually define criteria under which they
Criteria to Define When   can be used. An analysis of the reserves established by our five study states
                          indicates that in some cases reserves may be tapped only under specific
Reserves Can Be Used
                          conditions, such as for an emergency situation that was unforeseen, and/or
                          for specific events, such as flooding. For other reserves, such as budget
                          stabilization funds or non-appropriated revenue, there are only general
                          criteria or no criteria for when reserves can be used. The specificity of
                          these criteria varies from state to state, as well as from one type of reserve
                          to another.

                          State reserves for specific purposes, such as natural disasters, tend to have
                          more definitive criteria governing their use. Budget officials we spoke to
                          said these criteria were useful to them in evaluating emergency spending
                          requests. Some of the states in our study have specific criteria that identify
                          conditions under which funds can be used and/or identify specific events
                          that qualify as emergencies. For example, legislation establishing
                          Missouri's Governmental Emergency Fund includes statutory language
                          covering conditions that must be met including “emergency and
                          unanticipated requirements necessary to insure the proper functioning of
                          state government and to render essential states services . . . which were not
                          foreseeable or predictable at the time of the preparation and adoption of
                          the budget.” Likewise, expenditures from Oklahoma's State Emergency
                          Fund must meet the conditions of being “necessary” and “unforeseen.” This
                          fund is further restricted to cover costs associated with (1) destruction or
                          damage to public property caused by disasters such as fires, tornadoes, and



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                          floods, (2) operation of the National Guard when activated during an
                          emergency, and (3) expenditures necessary to provide matching funds for
                          any federal disaster relief program. In Florida, the Working Capital Fund is
                          used for governor-declared emergencies, and spending is limited to
                          “conditions that were unforeseen at the time the General Appropriations
                          Act was adopted . . . and that constitute an imminent threat to public
                          health, safety, or welfare.”

                          In contrast, the emergency component of Oklahoma's Constitutional
                          Reserve Fund (as distinguished from the State Emergency Fund described
                          above) lacks specific criteria for its use and has been used for purposes
                          other than emergencies. Oklahoma may use one-half of its Constitutional
                          Reserve Fund for emergency spending needs each year, with the only
                          criteria for such designation being that the governor and the legislature
                          agree to define the need as an emergency. According to state officials, the
                          emergency portion of this fund has routinely been used for items that were
                          for non-emergencies, such as highway construction, water projects, and
                          education funding.19


State Processes for       In addition to criteria guiding the use of emergency reserves, our work in
Releasing Reserve Funds   five states indicates that factors such as executive branch control over
                          budget execution and/or legislative review of emergency spending requests
                          can help to ensure that criteria for emergency spending are met.20 In many
                          states, the governor has a great deal of authority and control over budget
                          execution, in part because the state legislatures are only in session for a
                          few months during the year. For example, governors may have additional
                          powers related to budget execution, including the ability to reduce agency
                          spending midyear in response to lower revenue collections, to borrow
                          internally across agencies or funds, to issue short-term debt in the capital
                          markets, or to reprogram budgeted funds from one agency to another. In
                          many cases, the legislature is not involved in these decisions. In some
                          cases, the legislature and executive branch have joint bodies that are
                          convened to review spending after legislative adjournment.




                          19
                           The other half of Oklahoma's Constitutional Reserve Fund can only be used if the
                          upcoming year's revenue forecast is lower than the current year's revenue.
                          20
                            See appendix I for detailed information on controls over reserves that we identified in our
                          five states.




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We found significant differences in how funds are released depending on
whether reserves were for general purposes (the “rainy day” funds) or for
specific purposes (the emergency funds). General-purpose reserves are
usually controlled by the legislature, which appropriates needed amounts
to the general fund based upon a request made by the governor. In the case
of specific-purpose reserves, the legislature has already appropriated a
portion of general fund revenues and the administration evaluates and
decides on emergency funding requests. As a result, the governor or the
budget director has substantial control over access to the reserves.

For those reserves for which the legislature must take action to release
funds, there may be additional controls over the use of reserves. Two states
in our study require the legislature to approve the use of certain reserves by
a super-majority vote. Delaware requires a three-fifths vote of the general
assembly to use either its rainy day fund or its non-appropriated revenue
reserve, while in Oklahoma the emergency component of the rainy day
fund requires a two-thirds vote of the legislature for emergencies declared
by the governor and a three-fourths vote of the legislature for emergencies
declared by the legislative leadership. However, because Delaware has not
used its reserves in many years and Oklahoma's super-majority
requirements do not appear to have presented a significant hurdle to using
some of its reserves, it is difficult to determine the effectiveness of this type
of control on the basis of our state work.

Some states have established review procedures for emergency funding
requests to ensure that they meet the criteria before spending approval is
granted. For example, agencies in Oklahoma that request funds from the
emergency fund must submit written findings to the governor if the
emergency situation is specifically identified in statute (for example,
floods) or to the fund's contingency review board if the statute does not
specifically list the item requested by the agency. In California, the director
of the Department of Finance is required to review agency requests for
emergency funds, and if a request is approved, must send a report to the
Joint Legislative Budget Committee and the appropriating committee
chairs stating that the expenditures satisfy the criteria for emergency
funding. Spending from Missouri's Governmental Emergency Fund must be
approved by a majority vote of the fund's controlling committee, which
includes the governor, commissioner of administration, and the chairman
and ranking minority member of the state senate and house appropriations
committees.




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States Also Have Other    While reserves are a useful tool for states in dealing with budget
Budget Mechanisms to      uncertainty, we also found that states may use other mechanisms as well to
                          meet unexpected needs. In contrast to advance funding using reserves,
Respond to Unplanned
                          these other mechanisms are used after an adverse situation has been
Expenditures              identified. For example, since most states budget on a fund basis, they may
                          have borrowed internally, via interfund transfers, to cope with fiscal stress.
                          Florida transferred money from state trust funds to the general fund to help
                          address a fiscal crisis in the early 1990s. Some states also reduce spending
                          and/or increase taxes to respond to fiscal problems. In the early 1990s,
                          Delaware faced a budget shortfall and responded by reducing general fund
                          spending by 7 percent and increasing certain taxes to generate an
                          additional $130 million over 2 years even though the state had reserves
                          available. California may use external short-term borrowing to fund
                          unexpected needs.

                          States may also use supplemental appropriations to meet unexpected
                          needs, either as a vehicle to release reserves, such as budget stabilization
                          fund transfers made by the legislature, or as a direct infusion to state
                          agencies in need of additional resources to cover unexpected costs.21 For
                          example, California's legislature enacts supplemental appropriations
                          amounting to several hundred million dollars each year to augment the
                          regular appropriations of various agencies and departments that incur
                          costs that were not anticipated during budget enactment.



Federal Government        Our analysis of federal emergency funding from 1991 to the present showed
                          that many different types of programs were funded through emergency
Often Uses a More
After-the-Fact Strategy
to Address Budget
Emergencies



                          21
                            States have a variety of ways to fund supplemental appropriations within the constraints of
                          balanced budget rules including existing reserves, unallocated general fund resources,
                          interfund transfers, and reprogramming funds from one agency to another. Supplemental
                          appropriations are not typically used to respond to emergencies such as natural disasters.




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supplemental appropriations—a more “after-the-fact” strategy.22 When the
federal government provides funding in advance for programs that play a
role in emergency activities, such as for FEMA's Disaster Relief Fund, it is
usually only a portion of the total eventually appropriated in a given year.
As mentioned previously, state balanced budget requirements—which
generally apply to the states' operating budgets—and bond market
pressures provide a strong incentive for states to set aside funds in advance
to guard against violating these requirements or risk a lower bond rating
when faced with budget surprises. The current federal strategy, on the
other hand, is consistent with the federal budget environment that allows
for more budgetary flexibility. Unlike the states, which budget on a fund
basis, the federal government uses a unified budget approach. The unified
budget approach allows policymakers to consider and set priorities across
all federal activities and allows for greater flexibility. Also, the federal
government is neither subject to balanced budget requirements nor
constrained by bond market pressures to the same degree as states.
Furthermore, some cite the federal budget's role in stabilizing the economy
during recession and the need to provide for national defense as important
reasons for maintaining this budget flexibility.23

In our review of federal emergency appropriations, the majority of which
were contained in supplemental appropriations bills, we found that the
emergency designation has been applied to a wide variety of federal
program and budget accounts. Table 2 shows annual emergency budget
authority as a percentage of total discretionary budget authority since
passage of BEA from 1991 through May 1999. From 1991 through May 1998,
emergency appropriations averaged approximately $14.3 billion annually,
roughly 2.7 percent of total discretionary spending. However, since the
beginning of fiscal year 1999 (through May 1999) emergency appropriations
have totaled nearly $36 billion, 6.1 percent of total discretionary budget
authority for fiscal year 1999.24




22
 This report primarily addresses emergency spending in discretionary accounts since
discretionary accounts are the focus of significant federal debate. Direct spending accounts
such as Medicare, Social Security, and debt service, which comprise approximately two-
thirds of the federal budget, are open-ended and allow federal agencies to automatically
spend funds as needed.
23
  When the economy weakens federal revenues generally decrease while, at the same time,
federal spending may increase slightly for social programs sensitive to the economy (for
example, unemployment insurance).




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Table 2: Emergency Budget Authority as Percentage of Discretionary Budget
Authority Fiscal Years 1991 Through 1999 (Dollars in Billions)

                           Total discretionary         Emergency budget
Fiscal year                  budget authority                  authority        Percentage
1991                                      $545.8                   $45.0               8.2%
1992                                      $531.8                   $21.2               4.0%
1993                                      $524.2                    $5.9               1.1%
1994                                      $514.8                   $11.4               2.2%
1995                                      $501.9                    $9.3               1.9%
1996                                      $502.2                    $5.7               1.1%
1997                                      $512.5                   $10.2               2.0%
1998                                      $534.2                    $5.9               1.1%
1999                                      $583.8                   $35.8               6.1%
Total                                   $4,751.2                  $150.4               3.2%


Note: Fiscal year 1999 figures are through May 1999.
Source: GAO analysis.


Appendix II shows the use of the emergency designation by arraying
emergency appropriations into seven categories covering more than 250
different program and budget accounts since enactment of the Budget
Enforcement Act of 1990. Table 3 below shows the percentage of budget
authority by category for emergency appropriations from 1991 through May
1999. These categories range from natural disasters to the year 2000 (Y2K)
computer problem, while specific accounts receiving emergency funding
include such varied items as construction of a new capitol visitor center
and ballistic missile defense.




24
 Emergency designations are currently being discussed in the fiscal year 2000
appropriations cycle for such items as the year 2000 census and farm assistance.




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Table 3: Emergency Budget Authority by Category, Fiscal Years 1991 Through 1999
(Dollars in Billions)

Category                                                Total                  Percentage
Disaster and/or Economic
Emergencies (Domestic)                                 $56.9                             38%
Defense-related
Emergencies                                            $81.0                             54%
Antiterrorism and Security
Emergencies                                             $3.9                              3%
Information System
Emergencies (Y2K)                                       $3.4                              2%
International Humanitarian
Emergencies                                             $3.7                              2%
Drug Interdiction
Emergencies                                             $1.0                              1%
Other Emergencies                                         $.5                             0%
Totals                                                $150.4                             100%


Source: GAO analysis.


Many federal programs that carry out emergency responsibilities are
routinely provided with significant budget authority through emergency
supplemental appropriations. Appendix III provides data on selected
programs that received emergency supplemental appropriations in at least
5 of the last 8 years. The most notable example is FEMA's Disaster Relief
program where a large portion of the program's budget authority comes
from emergency supplemental appropriations.25 Public Law 102-229,
enacted in 1992, limits FEMA's regular Disaster Relief Fund appropriations
for Stafford Act26 disaster assistance to $320 million or the President's




25
 According to testimony delivered by the Director of FEMA in June 1998, FEMA had
received about $2.9 billion in regular (non-emergency) appropriations for disaster relief
over the previous 10 years, whereas approximately $22 billion had been provided through
emergency supplemental appropriations.
26
 The Robert T. Stafford Disaster Relief and Emergency Assistance Act authorizes the
President to issue major disaster or emergency declarations and specifies the types of
assistance the Executive Branch may authorize.




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budget request, whichever is lower.27 According to the law, any Disaster
Relief Fund appropriations over this amount must be considered
“emergency requirements” and are exempt from the discretionary spending
caps. In the 1999 Omnibus Appropriations Act (P.L. 105-277), FEMA's
Disaster Relief fund received $906 million in contingent emergency funds in
addition to the nearly $308 million it received in regular appropriations for
that year (P.L. 105-276). In addition, FEMA received $1.1 billion in
emergency appropriations in the 1999 Emergency Supplemental
Appropriations Act (P.L. 106-31). Several other programs, such as the Small
Business Administration Disaster Loan Program and the United States
Department of Agriculture Emergency Conservation Program, also
received much of their budget authority through emergency supplemental
appropriations.

In at least one case, the Low-Income Home Energy Assistance Program
(LIHEAP), the Congress routinely provides contingency funds in advance
for emergencies. The Administration for Children and Families, part of the
Department of Health and Human Services, administers LIHEAP and
typically receives $300 million annually in contingency funding for extreme
weather conditions that necessitate additional home energy grant
payments to the states.28 LIHEAP funds can only be released upon a request
from the President and must meet specific criteria including extreme
temperatures, flooding, earthquakes, tornadoes, hurricanes, or ice storms.
The criteria define emergency to include a significant increase in public
benefit program caseloads (for example, Food Stamps) or unemployment
claims. The criteria also specify that the Secretary of HHS must take into
account whether a member of Congress has requested that the state
receive LIHEAP funds and require the Secretary to notify the Congress
upon determining that the contingency fund will be used.

The Congress has taken a different approach to providing emergency
funding for federal fire fighting activities. Fire fighting costs incurred by the
Department of the Interior and the National Forest Service are considered
emergency spending only to the extent that they exceed the average annual
level of such costs over the preceding 10 years. This provision, instituted in
1993, acknowledges that certain unpredictable events, such as forest fires,

27
 FEMA's Disaster Relief Fund functions as an emergency reserve since no-year budget
authority allows the agency to accumulate reserves to address natural disaster emergencies.
28
 States then provide assistance payments, either directly to households or to home energy
suppliers through designated state agencies.




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                         will likely occur and that these costs should not be ignored in the regular
                         budget.



Informing the Federal    Dissatisfaction with the federal process for funding emergency needs has
                         most often focused on two issues—the overly broad application of the
Emergency Funding        emergency designation leading to uncontrolled emergency spending and
Debate                   the need to recognize emergency costs earlier in budget deliberations.
                         Many have questioned whether all emergency spending is for “true
                         emergencies” and ask why the budget cannot more effectively recognize
                         likely but unpredictable emergency needs.

                         In this section we discuss options for changing the federal emergency
                         funding process that have surfaced either in the congressional debate or in
                         our study of state approaches to budgeting for uncertainty. State practices
                         can offer some insight into how the federal government might consider the
                         following options, either separately or in combination:

                         • establishing criteria for the emergency designation; and
                         • creating either a governmentwide and/or agency-specific emergency
                           reserve(s).


Criteria for Emergency   As the congressional debate indicates, there is inherent tension between
Spending                 having criteria strict enough to prevent misuse of the emergency
                         designation and providing enough flexibility to respond to unpredictable
                         situations. The broader and more flexible the criteria, the more likely it is
                         that the emergency designation might be used for non-emergency items. A
                         broad definition of an emergency may include situations such as “actual or
                         potential loss of life,” “destruction of property,” or a “threat to national
                         security” while a narrower definition might be limited to specific events
                         such as hurricanes or earthquakes. Criteria may also be defined by
                         limitations such as requiring that a situation be “unforeseen” or
                         “temporary.” Ideally, the criteria must usefully define legitimate emergency
                         spending without being so restrictive as to exclude spending for
                         unexpected needs perceived to be legitimate emergencies by the Congress
                         and the President.

                         At the state level, the existence of criteria for the use of emergency reserve
                         funds has been useful in helping to control emergency spending, according
                         to state officials we interviewed. Officials in some of our study states said
                         criteria associated with emergency reserves were effective in limiting their


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use to appropriate needs. For example, Oklahoma officials told us that in
contrast to its Constitutional Reserve Fund, the State Emergency Fund
requires specific criteria for its use and has been used only for spending
allowed by the established criteria. Criteria for these reserves define
conditions under which the reserves can be used and may also identify
certain types of events that would qualify for emergency funds. In addition,
these reserves may have additional conditions that must be met before
funds can be released. Florida and Missouri expect state agencies to
exhaust funds from already appropriated emergency-related accounts
before asking for additional emergency funds. In Oklahoma, the State
Emergency Fund cannot be used for spending items considered, but not
approved, by the legislature. In California and Florida, the statutes state
that emergency funds should not be used to fund new programs or
initiatives.

In addition, a statement of how proposed funding met the criteria can be
required. According to one official we interviewed, state agencies may be
subject to added scrutiny when emergency funding requests are reviewed
against established criteria. First, agencies are expected to closely review
their budgets before requesting emergency funds. Second, agency requests
for additional funding can be evaluated based on the emergency criteria,
thus making it easier to defer additional spending requests for existing
programs or new initiatives until consideration of the next fiscal year's
budget. Finally, agencies that request emergency funds are exposed to
additional scrutiny and visibility by the legislature and the executive
branch, which can affect future budget decisions.

Some have proposed that criteria be added to the current federal process
for funding emergencies.29 Emergency conditions proposed in 1991 by
OMB are often referred to and have been included in proposed legislation.
Under the OMB proposal, any emergency spending would have to meet all
of the following five conditions to qualify for the emergency designation:
(1) the expenditure was “necessary,” (2) the situation requiring the
emergency appropriations was “sudden,” (3) the situation was
“unforeseen,” (4) the need for emergency appropriations was “urgent,” and
(5) the situation requiring the emergency appropriations was “not


29
 Those who propose incorporating criteria into the current process would retain the system
under which spending designated as an emergency is exempt from the discretionary
spending caps, but they would require that such spending meet a predefined set of
conditions or be limited to only certain types of events.




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                     permanent.”30 The fiscal year 2000 Budget Resolution contained similar
                     criteria for designating a proposed provision of legislation as an emergency
                     requirement. During the debate on the 1999 Emergency Supplemental Act,
                     a point of order was raised against some of the items in the emergency bill.
                     However, a vote was taken to waive the point of order against the
                     emergency designation, which passed by a vote of 70 to 30.31

                     As mentioned above, the broader and more flexible the criteria, the easier it
                     is to expand the emergency designation. If the Congress wished to create
                     agency-specific reserves with appropriations that could be used without
                     further congressional action, it might wish to establish more specific
                     criteria for the release and use of such funds. For example, the LIHEAP
                     contingent emergency criteria establishes specific conditions for fund
                     release. Some would argue that the more specific and measurable the
                     criteria, the less likely there would be disagreement over when the funds
                     can be used. Even if criteria are written into the law, however, emergency
                     definitions are not self-enforcing. Whether or not the criteria serve to limit
                     fund use depends on both their specificity and on the commitment of the
                     various actors to enforce them.


Emergency Reserves   Reserve funds at the federal level have been proposed as a way to require
                     up-front recognition of the likelihood that there will be a call on federal
                     resources for some unforeseen event or situation—thus providing greater
                     transparency in the budget process. As such, these costs could be
                     considered as part of the annual resource allocation process and could
                     ensure that emergency needs are considered along with other competing
                     needs in the budget. Some have also suggested that emergency reserves
                     may reduce the need for supplemental appropriations. Depending on how
                     the reserve is designed, agencies may have easier access to funding to
                     respond to emergencies more quickly. However, potential pitfalls exist as
                     well—there may be pressure to use the reserve even if a triggering
                     emergency does not occur.




                     30
                      See Report on Costs of Domestic and International Emergencies and on the Threats Posed
                     by the Kuwaiti Oil Fires (OMB, June 1991).
                     31
                      Section 206 (d) of the House Concurrent Resolution 68 provides that the emergency point
                     of order it establishes may be waived or suspended in the Senate only by an affirmative vote
                     of three-fifths of the members.




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                               Proposals for reserve funds have fallen into two broad categories:
                               governmentwide reserves and agency-specific reserves. While both types
                               of reserves raise similar design questions, the answers may be different for
                               each type. In addition to the question of what criteria should be used for
                               each type of fund, important design questions for either type of reserve
                               would include

                               • scope: should the emergency reserve be governmentwide or agency-
                                 specific (or should both be used)?
                               • delegation: who may approve the use of these funds?
                               • size: how large should the reserve be?
                               • duration: do unused funds lapse at the end of each fiscal year?
                               • relationship to budget caps: should the reserve be included under the
                                 spending caps?

Scope: Should the Emergency    One approach taken by states is to set aside some portion of the budget as
Reserve Be Governmentwide or   unallocated budget authority in a statewide reserve for emergencies by
Agency-Specific?               appropriating less than their estimated revenues each year or retaining
                               funds in a “rainy day” fund. A similar approach at the federal level would be
                               to set aside budget authority in a governmentwide reserve. Such a set-aside
                               might limit emergency spending to the amount set aside. On the other hand,
                               the creation of an emergency reserve could produce an expectation that
                               the entire fund should be spent and as the year progresses claims on the
                               fund might increase. Combining a governmentwide reserve with specific
                               criteria for its use might alleviate this pressure, if the criteria are adhered
                               to.

                               Another approach would be to establish agency-specific reserve funds for
                               those agencies that regularly respond to federal emergencies. Such
                               reserves could be established along with governmentwide reserves. Some
                               have argued that the current emergency exemption has led to a situation in
                               which these agencies are routinely and knowingly under-funded under the
                               budget caps—with the expectation that necessary funds will be provided
                               later using the emergency provision, which results in an increase to the
                               caps. Under a system of agency-specific reserves, funds would be
                               appropriated to these agencies on a contingent basis, meaning that certain
                               agency-specific criteria would have to be met before the funds could be
                               used. In one state we visited, we were told that the creation of dedicated
                               reserves for agencies that are likely to need emergency or supplemental
                               funding each year has reduced the need for midyear supplemental
                               appropriations. As shown in appendix III, several federal programs that
                               routinely carry out emergency activities have relied on funds provided



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                                  through emergency supplemental appropriations. If these federal agencies
                                  received more funds in advance for emergencies, the need for emergency
                                  supplemental appropriations would likely be reduced. As noted earlier,
                                  FEMA typically receives approximately $300 million annually for its
                                  Disaster Relief Fund while FEMA's past 10-year obligation level averaged
                                  $2.4 billion annually.32

Delegation: Who May Release the   The creation of reserves requires a process to decide how and when they
Funds and Approve Their Use?      should be released so that the Congress can assure itself that the funds will
                                  be spent on intended purposes. As discussed above, we found that how
                                  state emergency funds are released depended on whether they were
                                  statewide, general-purpose reserves, or agency-specific reserves. In the
                                  states we studied, the governor or a designee usually controls the release of
                                  smaller emergency reserves while large statewide reserves require
                                  legislative approval before use. Similarly, the procedure to release federal
                                  reserve funds could depend upon whether they were for governmentwide
                                  or agency-specific emergency reserves.

                                  Because of constitutional constraints, not all of the release mechanisms
                                  available to the states may be used by the Congress to control the use of
                                  governmentwide emergency funds.33 However, there are a variety of
                                  mechanisms available to the Congress that would not pose constitutional
                                  concerns.

                                  The Congress could set aside funds for a governmentwide emergency
                                  reserve as part of the congressional budget resolution. Appropriations
                                  would be made out of this congressional emergency fund on an as needed
                                  basis. The Congress may also wish to adopt a super majority vote—as used
                                  by two states in our study, Delaware and Oklahoma—to appropriate
                                  emergency funding from this allocation or to waive the criteria established
                                  for using the emergency reserve.




                                  32
                                   For fiscal year 2000, the President's Budget requested about $2.5 billion in contingent
                                  emergency funds for disaster relief.
                                  33
                                   Under the separation of powers doctrine, the Congress may disapprove a policy decision
                                  delegated to the Executive only through enactment of legislation. INS v. Chadha, 462 U.S.
                                  919 (1983).




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                             Another approach would be for the Congress to appropriate emergency
                             funding to the President and require that the President notify the Congress
                             of the proposed emergency need a certain number of days prior to
                             releasing the funds. This would afford the Congress time to enact
                             legislation prohibiting the proposed use of emergency funds. One example
                             of this type of approach is the emergency funding set aside in the account
                             for “Year 2000 Information Technology Systems and Related Expenses.”
                             Most of these funds are available to be transferred by the Director of OMB
                             to affected federal departments and agencies. However, none of the funds
                             may be transferred until 15 days after the Director of OMB has submitted a
                             proposed allocation and plan for the federal entity to several legislative
                             committees.34

                             In addition to the above, the Congress could require certification for
                             contingent emergency appropriations in agency-specific reserves—
                             appropriations available for obligation after the Executive Branch certifies
                             that the relevant emergency criteria have been met. As mentioned earlier,
                             the LIHEAP program includes a contingency reserve that enables the
                             President to release funds when certain criteria are met. Some states in our
                             study established review procedures to ensure that certain criteria are met
                             prior to release of reserve funds. Furthermore, in some cases where the
                             release of funds has been delegated to the governor's office, a process has
                             been established where legislative committees, legislative fiscal agencies,
                             or special review boards play a role in the review process.

Size: How Large Should the   Lawmakers would need to strike a balance between setting aside sufficient
Reserve(s) Be?               funds for emergencies and maintaining their ability to adequately fund
                             other important priorities. One approach to determining the size of an
                             emergency reserve would be to simply set aside some fixed percentage of
                             revenue or spending. Some states set the level of their governmentwide
                             reserve funds in this way. As mentioned in appendix I, Missouri's Budget
                             Stabilization Fund contains about 2.5 percent of prior year general fund
                             receipts and it may not exceed 5 percent. Others have suggested that the
                             size of an emergency reserve could be based on a historical average of
                             emergency spending. If a historical average were used in a
                             governmentwide reserve, however, the Congress might wish to link it to the
                             criteria established for emergency spending. For example, an emergency


                             34
                              These committees include House and Senate Committees on Appropriations, the Senate
                             Special Committee on the Year 2000 Technology Problem, the House Committee on Science,
                             and the House Committee on Government Reform and Oversight.




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                                 reserve with criteria limited to natural disasters could be based on
                                 historical spending averages for natural disasters. However, determining
                                 the appropriate size of a reserve based either on a fixed percentage or
                                 historical average could be challenging given the year-to-year variation in
                                 emergency spending over the past decade.

Duration: Would Unused Funds     When creating emergency reserves, a decision would need to be made on
Lapse at the End of the Year?    whether the balances will be allowed to build up over time or whether they
                                 should lapse at the end of each fiscal year. States generally allow build-up
                                 in their budget stabilization funds up to a predetermined fixed percentage
                                 of state general fund expenditures and then seek to replenish the fund after
                                 its use. State accounts designated for emergencies usually lapse at fiscal
                                 year-end and are re-authorized each year. Of our study states, Florida,
                                 Missouri, and Oklahoma annually appropriate an amount for emergency
                                 use that lapses at the end of the fiscal year.

                                 Federal emergency reserves that lapse at fiscal year-end could tighten
                                 control of the funds. However, lapsing emergency funds might also
                                 encourage a rush of year-end spending of remaining funds if criteria for
                                 their use proved to be too weak. Conversely, the federal government could
                                 establish an emergency reserve that does not lapse at the end of the year.
                                 Creating a reserve that does not lapse might promote the notion that
                                 responding to emergencies needs to be a permanent feature of the budget.
                                 However, the pressure to spend the available funds could increase if the
                                 balance in the emergency reserve fund becomes large.

Relationship to Budget Caps:     Proponents of placing emergency reserves under the budget caps argue
Should the Reserve Be Included   that it is a way to ensure that emergency needs are considered along with
Under the Caps?                  other competing needs in the budget, making it a more responsible way to
                                 budget for expected but unpredictable costs. Doing this would reduce
                                 funds available elsewhere in the budget and would be somewhat analogous
                                 to the states in our study, none of which treated emergency costs
                                 differently than other state expenditures under their budget rules.

                                 Others argue that it would not be advisable to include an emergency
                                 reserve within the budget caps since emergencies are by nature
                                 unpredictable and prefunding these events would be at the expense of
                                 more certain programmatic needs, especially as the discretionary caps
                                 become tighter. Furthermore, the Congress has the option to offset
                                 emergency spending items that are exempt from the caps and, in fact, has
                                 done so to some extent in recent years.




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                           Another approach would be to establish emergency reserves over and
                           above the existing caps or by raising the caps. Like the current system, this
                           would have the effect of using some of the unified budget surplus for
                           emergencies. Unlike the current system, however, the amount would be
                           identified in advance. This approach might increase transparency,
                           recognize the near inevitability of unpredictable events, and possibly
                           provide a limit on the amount of emergency spending.


Compatibility With Other   Any changes in the current treatment of funding for emergencies, whether
Budget Process Changes     imposing emergency criteria on the emergency designation and/or
                           establishing an emergency reserve, will need to be considered in the
                           context of other proposed changes to the budget rules and processes. For
                           example, determining whether a reserve should be under the caps raises
                           the question of whether a permanent change in the discretionary caps is
                           also to be made. Similarly, decisions about whether to establish and how
                           much to set aside in a governmentwide reserve should be linked to
                           decisions about whether to create additional agency-specific reserves or to
                           increase regular funding for programs that normally carry out emergency
                           response activities. For example, the amount of funds in a governmentwide
                           reserve might depend on whether a separate emergency fund was created
                           for agencies, such as Agriculture's Emergency Conservation Program, or
                           whether FEMA received a larger annual appropriation. Furthermore, if the
                           Congress were to move to biennial budgeting, an emergency reserve could
                           become important to provide additional budgetary flexibility in the second
                           year. Also, if criteria were established that limited emergencies to specific
                           events, such as natural disasters or national security, the Congress may
                           wish to reconsider how it will fund other activities, such as drug
                           interdiction, that were funded through emergency supplementals before
                           the criteria were established.



Conclusions                Experience at both the federal and state levels shows that governments are
                           pressed to respond to emergencies at various points during the fiscal year.
                           However, constrained by balanced budget requirements and concerns over
                           bond ratings, the states have generally chosen to fund a portion of their
                           emergency costs up front as part of their regular budget process. For many
                           years, significant federal emergency costs have been incurred annually but
                           have not been subject to the discipline of the regular budget process.
                           Although the federal government often funds emergencies on an “after-the-
                           fact” basis, some have suggested that the Congress could consider moving




                           Page 28                                GAO/AIMD-99-250 Budgeting for Emergencies
                  B-279978




                  to a reserve-funding model. State practices offer some insights in designing
                  such a process.

                  Some argue that shifting the budget timing to an up-front recognition of
                  emergency costs through reserves may promote a more comprehensive
                  and transparent debate over federal budgetary priorities during the regular
                  budget process. While a primary rationale for establishing reserves at the
                  state level is the real constraints imposed by balanced budget requirements
                  and the credit markets, the state model may become of more interest as the
                  federal budget becomes more constrained—either by current budget rules
                  such as discretionary spending caps or by any potential future reforms
                  such as “saving” the Social Security surplus.

                  Even though there will always be a subjective element to defining
                  emergencies, establishing emergency criteria may improve federal
                  decision-making by providing a useful framework for sorting out
                  emergency claims. States in our study reported that establishing
                  emergency criteria has been useful in controlling emergency spending.
                  Sound emergency criteria at the federal level might be important to
                  controlling the use of the emergency designation and/or accessing
                  emergency reserves.



Agency Comments   We provided a draft copy of this report to OMB and CBO for technical
                  review and comment. OMB and CBO generally concurred with our report,
                  and we incorporated their comments as appropriate.

                  We are sending copies of this report to the Honorable Pete V. Domenici,
                  Chairman, Senate Budget Committee; the Honorable John R. Kasich,
                  Chairman, and the Honorable John M. Spratt, Jr., Ranking Minority
                  Member, House Budget Committee; and other interested parties. We will
                  also make copies available to others upon request.




                  Page 29                               GAO/AIMD-99-250 Budgeting for Emergencies
B-279978




Please contact me at (202) 512-9573 if you or your staff have any questions
concerning this letter. Key contributors to this assignment were Thomas
James, Raymond Hendren, Robert Yetvin, Inez Azcona, and George Senn.

Sincerely yours,




Paul L. Posner
Director, Budget Issues




Page 30                               GAO/AIMD-99-250 Budgeting for Emergencies
B-279978




Page 31    GAO/AIMD-99-250 Budgeting for Emergencies
Appendix I

State Budget Reserves in Five Site Visit States                                                                                           AA
                                                                                                                                           ppp
                                                                                                                                             ep
                                                                                                                                              ned
                                                                                                                                                nx
                                                                                                                                                 idx
                                                                                                                                                   eIis




Table 4: Governmentwide Reserves for General Purposes

Reserve type                             Purpose/criteria                                  Access/control
Cash on hand set aside for any agency    Meets unanticipated revenue shortfalls            Funds generally appropriated by the
into general operating fund.             or cash flow needs.                               legislature with governor's consent.
                                         In some cases, may also be used for
                                         emergencies.
Budget Stabilization Fund (Missouri)     Meets unanticipated revenue shortfalls.      Legislature appropriates fund but only with
                                         Fund contains about 2.5 percent of prior     authorization from the governor.
                                         year receipts in the general fund but not to
                                         exceed 5 percent. Fund can only be used to
                                         replenish existing appropriations.
Cash Operating Reserve Fund (Missouri)   Meets annual cash-flow needs by allowing          Commissioner of Administration controls its
                                         the state to make timely payments. Fund is        use and ensures that its balance remains at
                                         maintained at 5 percent of general fund           5 percent of general fund revenues.
                                         revenues.
Budget Reserve Account (Delaware)        Meets unanticipated revenue shortfalls or if      Legislature authorizes spending. Release of
                                         revenue is reduced by legislation. May not        funds requires a three-fifths majority vote.
                                         exceed 5 percent of general revenues
                                         received in the preceding fiscal year (not
                                         including interest).
Constitutional Reserve Fund (Oklahoma)   Half of fund meets unanticipated revenue          If the governor declares an emergency,
                                         shortfalls. Half of the fund may be used if the   funds can be appropriated through a two-
                                         governor declares an emergency—although           thirds approval from both houses of the
                                         specific emergency criteria have not been         legislature. The legislature may declare an
                                         established.                                      emergency and access the fund if it obtains
                                                                                           a three-fourths majority vote.
Special Cash Fund (Oklahoma)             Sets aside unspent funds from the previous        Legislature authorizes spending through
                                         fiscal year that are reappropriated for           regular or supplemental appropriations.
                                         general purposes.
                                         Meets annual cash-flow needs by helping to Executive branch controls this fund. The
Cash Flow Reserve Fund (Oklahoma)        reduce borrowing and allowing the state to legislature may appropriate unneeded
                                         make timely payments.                       portions of the fund.
                                         If the balance of this fund exceeds cash
                                         needs, then the legislature may appropriate
                                         all or a portion of this fund.
Working Capital Fund (Florida)           Sets aside monies in the general revenue          Legislature authorizes spending through
                                         fund in excess of the amount needed to            regular appropriations. The governor can
                                         meet general revenue fund appropriations.         access these funds by evoking emergency
                                                                                           powers through an executive order.
Budget Stabilization Fund (Florida)      Meets unanticipated revenue shortfalls.      The legislature provides direction in the
                                         Also available for funding an emergency with appropriations act for use of these funds.
                                         criteria provided in Florida law.
                                         The fund must be replenished after use.
                                                                                                                              Continued




                                          Page 32                                          GAO/AIMD-99-250 Budgeting for Emergencies
                                           Appendix I
                                           State Budget Reserves in Five Site Visit
                                           States




Reserve type                              Purpose/criteria                                    Access/control
Nonappropriated revenue set aside for     Meets unanticipated spending needs or               Funds generally appropriated by the
general operating fund.                   revenue shortfalls.                                 legislature with governor's consent.
Supplemental Reserve (Missouri)           Nonappropriated general revenues set aside Legislature authorizes spending after
                                          for general purposes.                      governor's supplemental recommendation.
                                                                                     Legislature cannot add new items to
                                                                                     governor's recommendations but can
                                                                                     increase dollar amounts.
Nonappropriated revenues (Delaware)       Two percent of the revenue estimate is set      Legislature authorizes spending and
                                          aside in this reserve. Fund's use is limited to governor must sign.
                                          emergencies.                                    Release of these funds requires a three-
                                                                                          fifths majority.
Special Fund for Economic Uncertainties   Sets aside unreserved and undesignated        CA Department of Finance oversees use of
(California)                              revenues for general purposes. Normally       this fund.
                                          used to (1) augment general fund cash flows
                                          (2) cover general fund deficits, and (3) fund
                                          emergency-related expenses.
Nonappropriated revenue (Oklahoma)        Five percent of revenue forecast is set aside Legislature authorizes spending.
                                          for general purposes.
                                          This reserve is not available during the
                                          current fiscal year but is available for general
                                          fund use in the next fiscal year.
                                          If more than 100 percent of revenue is
                                          collected during the year, the remainder is
                                          deposited in the “Constitutional Reserve
                                          Fund.”
                                                                                                            Continued from Previous Page
                                           Source: Information provided by state budget officials.




                                           Page 33                                             GAO/AIMD-99-250 Budgeting for Emergencies
                                            Appendix I
                                            State Budget Reserves in Five Site Visit
                                            States




Table 5: Governmentwide Reserves for Specific Purposes

Reserve type                               Purpose/criteria                                    Access/control
General or special fund appropriation      Addresses specific events or situations             Usually controlled by executive branch
available to any agency but limited to     meeting established criteria.                       or controlling board.
defined purposes.
Governmental Emergency Fund (Missouri)     An appropriation to provide emergency         Must be approved by a majority vote of the
                                           funds for state services when the legislature full membership of the governmental
                                           is not in session.                            emergency fund committee.
Augmentation for Emergencies and           An appropriation used to cover                      Controlled by the CA Department of
Contingencies (California)                 unanticipated but necessary obligations not         Finance.
                                           covered in regular budget act. Not to be
                                           used for capital outlays.
Emergency Appropriation (Florida)          An appropriation whose funds can be                 The Administration Commission can
                                           released if they meet certain “emergency”           approve release of these funds after
                                           criteria contained in Florida law.                  requested in writing by a state agency. The
                                                                                               governor's office then determines whether
                                                                                               the request meets the emergency
                                                                                               requirements specified in Florida law.
Deficiency Appropriation (Florida)         An appropriation for state agency operations The Administration Commission authorizes
                                           when regular appropriations are inadequate these funds under specified circumstances.
                                           because the workload or cost of the
                                           operation exceeds that anticipated by the
                                           legislature.
Agricultural Emergency Eradication Trust   Primarily designed to eradicate the citrus   Commissioner of Agriculture can use funds
Fund (Florida)                             canker emergencies.                          with notice to the legislature.
                                           Financed by a fuel sales tax and the general
                                           fund.
Legal Fees Fund (Delaware)                 Appropriation to finance the anticipated cost State budget office and Controller General
                                           of judgments or settlements against the       may release these funds for approved
                                           state during the fiscal year.                 purposes.
Self-Insurance Fund (Delaware)             Appropriation to finance emergency repairs/ State budget office and Controller General
                                           replacement of state buildings, schools, etc., may release these funds when criterion is
                                           which are damaged due to natural or other met.
                                           disasters (i.e., arson and bombings). State
                                           purchases an insurance policy for damage
                                           costs exceeding $10 million.
State Emergency Fund (Oklahoma)            Appropriation for destruction of property due       Governor can approve expenditures from
                                           to natural disasters or other disasters, or         the fund that meet the criteria. State
                                           matching federal disaster relief program            agencies must submit written findings to the
                                           funds or for situations not foreseen or             governor that emergency request was not
                                           reasonably foreseeable by the legislature.          foreseen or reasonably foreseeable by the
                                                                                               legislature.


                                            Source: Information provided by state budget officials.




                                            Page 34                                             GAO/AIMD-99-250 Budgeting for Emergencies
                                            Appendix I
                                            State Budget Reserves in Five Site Visit
                                            States




Table 6: Agency-Specific Reserves for Specific Purposes

Reserve type                               Purpose/criteria                                    Access/control
Contingency appropriations designated      Provides a cushion if agency                        Governor controls release of funds.
to a specific agency.                      appropriations are insufficient.
Missouri Disaster Fund (Missouri)          Appropriation for the MO State Emergency            Governor can release funds to the State
                                           Management Agency for emergency                     Emergency Management Agency when the
                                           expenditures caused by disasters and to             legislature is not in session.
                                           provide required state match for federal
                                           grants.
Missouri Corrections Growth Pool (Missouri) Appropriation for the MO Department of             Governor can release funds when regular
                                            Corrections for costs associated with              appropriation fails to cover costs.
                                            increased inmate populations.
Missouri Youth Services Growth Pool        Appropriation for the MO Department of              Governor can release funds when regular
(Missouri)                                 Social Services for costs associated with           appropriation fails to cover costs.
                                           increased caseloads.
Missouri Medicaid Supplemental Pool        Appropriation for the MO Division of Medical Governor can release funds when regular
(Missouri)                                 Services to cover additional costs beyond    appropriation fails to cover costs.
                                           those covered by its regular Medicaid
                                           appropriation.
Missouri Work First Pool (Missouri)        Appropriation for the MO Department of        Governor can release funds when regular
                                           Social Services for costs associated with the appropriation fails to cover costs.
                                           Temporary Assistance for Needy Families,
                                           child care, Work First Initiatives, and other
                                           purposes related to welfare reform.


                                            Source: Information provided by state budget officials.




                                            Page 35                                             GAO/AIMD-99-250 Budgeting for Emergencies
Appendix II

Emergency Budget Authority, Fiscal Years
1991 Through 1999                                                                             Appendx
                                                                                                    iI




               The categories in the Emergency Appropriations table are defined as
               follows:

               Disasters and/or Economic Emergencies (Domestic) − Emergencies
               related to natural disasters such as earthquakes, floods, hurricanes or other
               disasters such as airplane crashes or riots in the United States or its
               territories. In addition, emergencies related to both disasters such as
               floods, hurricanes or earthquakes and the resultant loss of business activity
               or product such as crop loss or livestock loss or economic factors such as
               unemployment insurance in the case of a recession.

               Defense Related Emergencies − Emergencies related to military
               conflicts such as the Kosovo war.

               Antiterrorism and Security Emergencies − Emergencies related to
               protecting persons from terrorist attack or organizations from the loss of
               sensitive information.

               Information Systems Emergencies (Y2K) − Emergencies related to a
               crisis in information systems such as year 2000 computer conversion.

               International Humanitarian Assistance − Emergencies requiring aid to
               foreign countries related to events such as natural disasters (earthquakes)
               or wars (refugee assistance).

               Drug Interdiction Emergencies − Emergencies related to national drug
               control.

               Other Emergencies − Emergencies for items that do not fall into the
               above categories.




               Page 36                                GAO/AIMD-99-250 Budgeting for Emergencies
Appendix II
Emergency Budget Authority, Fiscal Years
1991 Through 1999




(This page intentionally blank.)




Page 37                                    GAO/AIMD-99-250 Budgeting for Emergencies
                                             Appendix II
                                             Emergency Budget Authority, Fiscal Years
                                             1991 Through 1999




Dollars in millions
                                                                                                                         1999 Budget
Category/Bureau                                              Description                                                    Authority
Disasters and/or Economic Emergencies (Domestic)
Agric.                                                       Food for Progress                                                   25.0
Agric.                                                       Crop Loss Assistance - for multi-year losses                     2,375.0
Agric.                                                       Emergency Assistance - Losses under section 312(a)
                                                             of PL 94-265                                                        50.0
Agric.                                                       Market Loss Assistance - payments to farmers                     3,057.0
Agric.                                                       Indemnity Payments for Cotton Producers - Georgia                    5.0
Agric.                                                       Public Law 480 Program and Grant Accounts                          149.2
Agric. - Agricultural Marketing Service                      Funds for Strengthening Markets, Income, and Supply                145.0
Agric. - Commodity Credit Corporation                        Emergency Livestock Feed Assistance                                200.0
Agric. - Commodity Credit Corporation                        Livestock Disaster Assistance Program                               70.0
Agric. - Commodity Credit Corporation                        Livestock Indemnity Program                                          3.0
Agric. - Commodity Credit Corporation                        Commodity Credit Corporation Fund                                   66.0
Agric. - Extension Service                                   Extension Service activities                                           -
Agric. - Food and Nutrition Service                          Child Nutrition Programs                                               -
Agric. - Farm Service Agency                                 Salaries and Expenses                                                  -
Agric. - Farm Service Agency                                 Emergency Conservation Program                                      28.0
Agric. - Farm Service Agency                                 Tree Assistance Program - tree damage                                  -
Agric. - Farm Service Agency                                 Agriculture Credit Insurance Fund Program                          571.9
Agric. - Farm Service Agency                                 Salaries and Expenses                                               82.8
Agric. - Forest Service                                      National Forest System                                                 -
Agric. - Forest Service                                      Reconstruction and Construction                                      5.6
Agric. - Forest Service                                      State and Private Forestry                                             -
Agric. - Forest Service                                      Wildland Fire Management (previously emergency
                                                             firefighting fund)                                                     -
Agric. - Forest Service                                      Pest Suppression Fund                                                  -
Agric. - Natural Resources Conservation Service              Watershed and Flood Prevention Operations                           95.0
Agric. - National Resources Conservation Service             Forestry Incentives Program                                         10.0
Agric. - Office of the Secretary                             Emergency Grants to Assist Low-Income Migrant and
                                                             Seasonal Farmworkers                                                20.0
Agric. - Research Service                                    Restoration of Research Facilities destroyed by natural
                                                             disasters                                                              -
Agric. - Rural Development                                   Emergency Community Water Assistance Grants                            -
Agric. - Rural Economic and Community Devel. Programs        Rural Community Advancement Program                                 30.0
Agric. - Rural Housing Service                               Salaries and Expenses                                                  -




                                             Page 38                                        GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -               -              -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
         4.0              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
         6.8           50.0              -           1,000.0          100.0           1,350.0        2,232.0               -
           -              -              -                 -               -              3.5              -               -
           -              -              -                 -               -                -            5.0               -
           -              -              -                 -               -             12.0              -               -
        34.0           95.0           30.0                 -            25.0             30.0           27.0               -
        14.0            9.0              -                 -               -                -           48.0               -
        21.0           23.0           32.2                 -             7.7             21.8           43.3               -
           -              -              -                 -               -                -              -               -
        10.5           43.1           26.6                 -               -                -              -               -
           -           32.9           60.8                 -               -                -              -               -
        48.0              -              -                 -               -                -            4.1               -

         2.0         550.0               -            450.0                -           188.0               -               -
           -              -              -              17.0            15.0             26.0              -               -
        80.0          229.0           80.5                 -          340.5              60.0           62.0               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -           15.0               -
           -              -              -                 -            10.0             50.0           15.4               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -            3.2               -




                                      Page 39                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                               Appendix II
                                               Emergency Budget Authority, Fiscal Years
                                               1991 Through 1999




Dollars in millions
                                                                                                                          1999 Budget
Category/Bureau                                                Description                                                   Authority
Disasters and/or Economic Emergencies (Domestic) (contintued)
Agric. - Rural Housing Service                                 Rural Housing Insurance Program                                     1.5
Agric. - Rural Housing Service                                 Very Low-Income Housing Repair Grants                               1.0
Agric. - Rural Housing Service                                 Rural Housing for Domestic Farm Labor                                 -
Agric. - Rural Housing Service                                 Rural Water and Waste Disposal Grants                                 -
Agric. - Rural Housing Service                                 Rural Development Insurance Fund - industrial
                                                               development loans                                                     -
Agric. - Rural Housing Service                                 Rural Development Loan Fund                                           -
Agric. - Rural Utilities Service                               Loans in Rural Utilities Assistance Program                           -
Commerce - Minority Business Development Agency                Minority Business Development                                         -
Commerce - National Oceanic and Atmospheric                    Construction                                                          -
Commerce - National Oceanic and Atmospheric                    Operations, Research, and Facilities                                5.0
Commerce - Economic Development Administration                 Economic Development Assistance Programs                              -
Commerce - U.S. Travel and Tourism Administraton               Salaries and expenses                                                 -
Defense - Military                                             Military Construction - related to natural disasters              171.5
Defense - Military                                             Military Personnel - related to natural disasters                   0.7
Defense - Military                                             Operation and Maintenance - related to natural
                                                               disasters                                                         255.0
Defense - Military                                             Family Housing (Defense) - related to natural disasters            38.0
Defense - Military                                             Defense Health Program                                              2.1
Defense - Military                                             Base Realignment & Closure Account - related to
                                                               natural disasters                                                     -
Defense - Military                                             Navy Working Capital Fund                                           2.1
Defense - Military                                             New Horizons Exercise Transfer Fund                                46.0
Defense - Civil - Corps of Engineers                           Flood Control, Missisippi River and Tributaries                     2.5
Defense - Civil - Corps of Engineers                           Flood Control and Coastal Emergencies                                 -
Defense - Civil - Corps of Engineers                           Operation and Maintenance, General                                 99.7
Defense - Civil - Corps of Engineers                           Construction                                                          -
Department of State - Administration of Foreign Affairs        Salaries and Expenses                                                 -
Education - Office of Postsecondary Education                  Student Financial Assistance                                          -
Education - Office of Elementary and Secondary Education       Impact Aid - disaster assistance related activities                   -
Environmental Protection Agency                                Abatement, Control and Compliance - related to floods                 -
Environmental Protection Agency                                Program and Research Operations                                       -
Environmental Protection Agency                                Leaking Underground Storage Tank Trust Fund                           -




                                               Page 40                                       GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -            6.5                 -               -              6.0           19.8               -
           -              -            1.1                 -            15.0             15.0           10.0               -
           -              -              -                 -               -                -           10.5               -
           -              -              -                 -               -                -           25.6               -

           -              -              -                 -               -              5.4           24.2               -
           -              -              -                 -               -                -            8.1               -
           -            4.0           11.0                 -               -                -              -               -
           -              -              -                 -               -                -            2.0               -
           -           10.8            7.5                 -               -                -           18.7               -
           -            9.0              -                 -               -             66.0              -               -
           -           77.2           18.0              55.0               -           200.0            75.0               -
           -              -              -                 -               -                -            5.0               -
         3.7              -              -                 -               -                -          165.1               -
           -              -              -                 -               -                -           79.6               -

      126.9               -              -                 -               -                -          423.7               -
        20.5              -              -                 -               -                -          124.4               -
           -              -              -                 -               -                -               -              -

         1.0              -              -                 -               -                -          231.7               -
           -              -              -                 -               -                -               -              -
           -              -              -                 -               -                -              -               -
           -           20.0              -                 -               -                -            3.0               -
           -         415.0          135.0                  -           70.0            180.0            40.0               -
      105.2          169.0           30.0                  -               -            55.0             3.1               -
         5.0              -              -                 -               -                -              -               -
           -              -              -                 -               -                -            5.9               -
           -              -              -                 -            80.0             30.0           40.0               -
           -              -              -                 -          165.0              70.0           42.5               -
           -              -              -                 -               -             24.3              -               -
           -              -              -                 -               -              1.0              -               -
           -              -              -                 -               -              8.0              -               -




                                      Page 41                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                              Appendix II
                                              Emergency Budget Authority, Fiscal Years
                                              1991 Through 1999




Dollars in millions
                                                                                                                         1999 Budget
Category/Bureau                                               Description                                                   Authority
Disasters and/or Economic Emergencies (Domestic) (continued)
Environmental Protection Agency                               Oil Spill Response                                                    -
Funds Appropriated to the President (for all executive        Unanticipated Needs - from various disasters
agencies)                                                                                                                           -
Federal Emergency Management Agency                           Disaster Relief                                                 2,036.0
Federal Emergency Management Agency                           Disaster Assistance Direct Loan Program Account                       -
Federal Emergency Management Agency                           Emergency Management Planning and Assistance                          -
Federal Emergency Management Agency                           Salaries and Expenses                                                 -
General Services Administration                               Property and Supply Costs - related to disasters                      -
General Services Administration                               Federal Buildings Fund                                                -
HHS - Administration for Children and Families                Low Income Home Energy Assistance Program                             -
HHS - Indian Health Services                                  Indian Health Services                                                -
HHS - Indian Health Services                                  Indian Health Facilities                                              -
HHS                                                           Public Health and Social Services Emergency Fund                      -
HUD - Community Planning and Development                      Community Development Block Grants                                250.0
HUD - Housing Programs                                        Annual Contributions for Assisted Housing                             -
HUD - Housing Programs                                        Flexible Subsidy Fund                                                 -
HUD - Housing Programs                                        Housing Counseling Assistance                                         -
HUD - HOME                                                    HOME Investment Partnerships Program (Title II)                       -
HUD - Federal Housing Administration                          General and Special Risk Program Account                              -
HUD                                                           Salaries and Expenses                                                 -
Interior - U.S. Fish and Wildlife Service                     Resource Management                                                   -
Interior - U.S. Fish and Wildlife Service                     Construction - repairs related to natural disasters                37.6
Interior - U.S. Fish and Wildlife Service                     Land Acquisition                                                      -
Interior - U.S. Geological Survey                             Surveys, Investigations, and Research - repairs related
                                                              to natural disasters                                                1.0
Interior - Bureau of Reclamation                              Operation and Maintenance                                             -
Interior - Bureau of Reclamation                              Construction Program                                                  -
Interior - Bureau of Reclamation                              Water and Related Resources                                           -
Interior - National Park Service                              Operation of the National Park System                                 -
Interior - National Park Service                              Historic Preservation Fund                                            -
Interior - National Park Service                              Construction                                                       10.0
Interior - Bureau of Land Management                          Construction                                                          -
Interior - Bureau of Land Management                          Wildland Fire Management                                              -
Interior - Bureau of Land Management                          Management of Lands and Resources                                     -
Interior - Bureau of Land Management                          Oregon and California Land Grants                                     -




                                              Page 42                                       GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -              -                 -               -              0.7               -              -

           -              -              -                 -          550.0                 -               -              -
     1,600.0        3,300.0        3,379.0           3,275.0        4,709.0           2,000.0        4,136.0               -
           -              -              -              12.5               -                -           30.0               -
           -              -              -                 -            15.0                -               -              -
           -              -              -                 -               -                -           15.0               -
           -              -              -                 -               -                -            0.7               -
           -              -              -                 -               -                -            2.5               -
      300.0           300.0              -             600.0          600.0            600.0           300.0               -
           -            1.0              -                 -               -                -               -              -
           -            2.0              -                 -               -                -               -              -
           -              -              -              35.0               -             75.0          105.6               -
      130.0          500.0            50.0            405.0           500.0            200.0                -              -
           -              -              -                 -          225.0                 -          283.0               -
           -              -              -                 -          100.0                 -               -              -
           -              -              -                 -               -                -            0.5               -
           -              -              -                 -               -             50.0           60.0               -
           -              -              -                 -               -                -           30.4               -
           -              -              -                 -               -                -            4.0               -
           -            5.9            1.6                 -               -                -           27.0               -
       32.8          103.9           37.3                  -               -            30.0            12 .8              -
           -           10.0              -                 -               -                -               -              -

         1.2            5.8            2.0                 -               -              1.4            3.4               -
           -            7.4              -                 -               -                -               -              -
           -              -            9.0                 -               -                -           30.0               -
         4.5              -              -                 -               -                -               -              -
           -            2.3              -                 -               -                -           23.0               -
           -              -              -                 -               -              5.0            0.3               -
         9.5         190.3            47.0                 -               -              0.9           29.0               -
         1.8            4.8            5.0                 -               -                -               -              -
           -         100.0               -            121.2           116.7              51.2               -              -
           -            3.5              -                 -               -                -               -              -
           -            5.2           35.0                 -               -                -               -              -




                                      Page 43                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                                 Appendix II
                                                 Emergency Budget Authority, Fiscal Years
                                                 1991 Through 1999




Dollars in millions
                                                                                                                            1999 Budget
Category/Bureau                                                  Description                                                   Authority
Disasters and/or Economic Emergencies (Domestic) (continued)
Interior - Bureau of Indian Affairs                              Operation of Indian Programs                                          -
Interior - Bureau of Indian Affairs                              Construction - repairs related to natural disasters                   -
Interior - Minerals Management Service                           Leasing and Royalty Management                                        -
Interior - Insular Affairs                                       Assistance to Territories
Judiciary - Courts of Appeals, District Courts and Other         Salaries and expenses                                                 -
Justice - Legal Activities                                       Salaries and Expenses, United States Marshals
                                                                 Service                                                               -
Justice - Legal Activities                                       Support of U.S. prisoners - due to natural disasters                  -
Justice - Federal Bureau of Investigation                        Salaries and Expenses                                                 -
Justice - Drug Enforcement Administration                        Salaries and Expenses - related to disasters                          -
Justice - Immigration and Naturalization Service                 Salaries and Expenses - related to disasters                          -
Justice - Federal Prison System                                  Salaries and Expenses - related to disasters                          -
Justice - Federal Prison System                                  Buildings and Facilities                                              -
Justice - Office of Justice Programs                             Justice Assistance                                                    -
Labor - Commission on National and Community Service             Programs and Activities                                               -
Labor - Employment and Training Administration                   Training and Employment Services                                    7.0
Labor - Employment and Training Administration                   State Unemployment Insurance and Employment
                                                                 Service Operations                                                    -
Legal Services Corporation                                       Payment to the Legal Services Corportation                            -
Small Business Administration                                    Disaster Loans Program Account                                    101.0
Small Business Administration                                    Business Loans Programs account                                       -
Travel and Tourism Administration                                Salaries and Expenses                                                 -
Transp. - Federal Aviation Administration                        Facilities and Equipment - related to natural disasters               -
Transp. - Federal Aviation Administration                        Grants-in-aid for Airports                                            -
Transp. - Federal Highway Administration                         Federal-Aid Highways - emergency relief program                       -
Transp. - Federal Highway Administration                         Metropolitan Planning                                                 -
Transp. - Federal Highway Administration                         Feasibility, Design, Environmental, Engineering                       -
Transp. - Federal Railroad Administration                        Railroad Repair                                                       -
Transp.- Research and Special Programs Administration            Research and Special Programs                                         -
Transp. - Coast Guard                                            Operating Expenses                                                    -
Transp. - Coast Guard                                            Acquisition, Construction, and Improvements                        12.6
Transp. - Federal Transit Administration                         Discretionary Grants - Highway Trust Fund                             -
Transp. - National Transportation Safety Board                   Salaries and Expenses - plane crashes                                 -
Transp. - National Transportation Safety Board                   Emergency Fund - plane crashes                                        -
Treasury - Bureau of Alcohol, Tobacco and Firearms               Salaries and Expenses                                                 -




                                                 Page 44                                       GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -          20.9             0.5                 -               -              3.9            1.5               -
         1.1          12.2           16.5                  -               -                -            3.8               -
           -              -              -                 -               -                -            1.2               -
                                      13.0                                                                 -               -
           -              -              -                 -               -                -            0.3               -

           -              -              -                 -               -                -           10.7               -
           -              -              -                 -               -                -           16.0               -
           -              -              -                 -               -                -            1.1               -
           -              -              -                 -               -                -            0.5               -
           -              -              -                 -               -                -            1.0               -
           -              -              -                 -               -                -           16.6               -
           -              -              -                 -               -                -           10.0               -
           -            5.0              -                 -               -                -            1.0               -
           -              -              -                 -               -              4.0              -               -
           -              -              -                 -               -             54.6          530.0               -

           -              -              -                 -               -                -              -           150.0
           -              -              -                 -               -              0.3               -              -
           -         113.0           100.0                 -          919.8            165.0           733.5               -
           -              -              -                 -               -                -           81.3               -
           -              -              -                 -               -                -            5.0               -
           -              -              -                 -               -                -           40.0               -
           -              -              -                 -               -                -           20.0               -
      259.0          732.0           300.0                 -        1,265.0            175.0            30.0               -
           -              -              -                 -               -                -            3.0               -
           -              -              -                 -               -                -            0.8               -
         9.8           18.9              -                 -               -             21.0              -               -
           -              -              -                 -               -                -            0.4               -
           -              -              -                 -               -             10.0           20.0               -
           -              -              -                 -               -                -           21.5               -
           -              -              -                 -               -                -           10.0               -
           -           35.9              -                 -               -                -              -               -
           -            1.0              -                 -               -                -              -               -
           -              -              -                 -               -                -            0.6               -




                                      Page 45                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                                 Appendix II
                                                 Emergency Budget Authority, Fiscal Years
                                                 1991 Through 1999




Dollars in millions
                                                                                                                             1999 Budget
Category/Bureau                                                  Description                                                    Authority
Disasters and/or Economic Emergencies (Domestic) (continued)
Treasury - U.S. Customs Service                                  Salaries and Expenses                                                  -
Treasury - U.S. Customs Service                                  Operation and Maintanance, Air and Marine
                                                                 Interdiction programs                                                  -
Treasury - U.S. Customs Service                                  Customs Air Interdiction Facilities, Construction,
                                                                 Improvements                                                           -
Treasury - Internal Revenue Service                              Tax Law Enforcement                                                    -
Veterans Affairs - Departmental Administration                   General Operating Expenses                                             -
Veterans Affairs - Veterans Health Administration                Medical Care                                                           -
Veterans Affairs - Veterans Health Administration                Construction, Major Projects                                           -
Defense Related Emergencies
Agency for International Development                             Operating Expenses                                                     -
Defense - Military                                               Overseas Contingency Operations Transfer Fund                    6,865.9
Defense - Military                                               Transfer to Coast Guard operating expenses                             -
Defense - Military                                               Morale, Welfare and Recreation and Personnel
                                                                 Support                                                             50.0
Defense - Military                                               Military Personnel (including Reserves)                             78.5
Defense - Military                                               Operation and Maintenance                                        2,783.9
Defense - Military                                               Defense Cooperation Account                                            -
Defense - Military                                               To support military forces - Turkey and Iraq                           -
Defense - Military                                               Defense-wide Working Capital Fund                                      -
Defense - Military                                               Navy Working Capital Fund                                              -
Defense - Military                                               Defense Business Operations Fund                                       -
Defense - Military                                               Research, Development, Test, Evaluation                          1,000.0
Defense - Military                                               Defense Health Program                                             202.0
Defense - Military                                               Reserve Mobilization Income Insurance Fund                             -
Defense - Military                                               Construction                                                       475.0
Defense - Military                                               Procurement                                                        684.3
Defense - Military                                               Revolving Management Funds                                             -
Defense - Military                                               Operational Rapid Response Transfer Fund                           300.0
Defense - Military                                               Spare and Repair Parts and Associated Logistical
                                                                 Support                                                          1,124.9
Defense - Military                                               Depot Level Maintanence and Repair                                 742.5
Defense - Military                                               Military Training, Equipment Maintenance, and
                                                                 Associated Support                                                 200.2
Defense - Military                                               Military Retirement Fund (for FY 2000)                           1,838.4




                                                 Page 46                                        GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -              -                 -               -                -            4.7               -

           -              -              -                 -               -                -           10.5               -

           -              -              -                 -               -                -           19.3               -
           -              -              -                 -               -                -            1.2               -
           -              -              -                 -               -                -            0.2               -
           -              -              -                 -            21.0                -           16.8               -
           -              -              -                 -            45.6                -              -               -


           -              -              -                 -               -                -              -             6.0
     1,814.1        1,430.1              -                 -               -                -              -               -
           -              -              -              28.3               -                -              -               -

           -              -              -                 -               -                -              -               -
      226.4          344.1           298.8            712.3             44.4                -          951.0         7,922.7
      205.4               -          495.2           2,307.9        1,106.6                 -        5,997.1        29,021.3
           -              -              -                 -               -                -              -         1,000.0
           -              -              -                 -               -                -          100.0               -
         1.0              -              -                 -               -                -               -              -
        23.0              -              -                 -               -                -               -              -
           -              -              -                 -               -                -        1,140.0               -
      179.0               -              -                 -               -                -          106.3            69.1
         1.9              -              -              13.2               -                -               -              -
        47.0           72.0              -                 -               -                -              -               -
           -              -              -                 -               -                -              -            35.0
      272.5               -           26.0               8.3            47.3                -        2,028.6         5,287.9
           -              -              -                 -               -                -              -           271.0
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -




                                      Page 47                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                                 Appendix II
                                                 Emergency Budget Authority, Fiscal Years
                                                 1991 Through 1999




Dollars in millions
                                                                                                                            1999 Budget
Category/Bureau                                                  Description                                                   Authority
Defense Related Emergencies (continued)
Department of State - Administration of Foreign Affairs          Salaries and Expenses - Desert Shield                                 -
Department of State - Administration of Foreign Affairs          Emergencies in the Diplomatic and Consular service                    -
District of Columbia                                             Federal Payment to the District of Columbia                           -
Energy                                                           Atomic Energy Defense Activities - uranium purchase/
                                                                 platonium disposition                                             525.0
Justice - Federal Bureau of Investigation                        Salaries and Expenses - Desert Shield                                 -
Justice - Immigration and Naturalization Service                 Salaries and Expenses - Desert Shield                                 -
Legislative Branch - Capitol Police                              Salaries - Desert Shield                                              -
Legislative Branch - Capitol Police                              General Expenses - Desert Shield                                      -
Legislative Branch - Library of Congress                         Salaries and Expenses - Desert Shield                                 -
Transportation - Coast Guard                                     Operating Expenses                                                200.0
Treasury - Bureau of Alcohol, Tobacco, and Firearms              Salaries and Expenses - Desert Shield                                 -
Treasury - U.S. Customs Service                                  Salaries and Expenses - Desert Shield                                 -
Treasury - U.S. Secret Service                                   Salaries and Expenses - Desert Shield                                 -
U.S. Information Agency                                          International Broadcasting Operations -Radio Free Iraq                -
Veterans Affairs - Departmental Administration                   General Operating Expenses                                            -
Veterans Affairs - Veterans Health Administration                Medical Care - costs related to Desert Shield                         -
Antiterrorism/Security Emergencies
Architect of the Capitol                                         Capitol Visitor Center                                            100.0
Capitol Police Board                                             Security Enhancements                                             106.8
Commerce - Export Administration                                 Operations and Administration                                         -
Defense - Military                                               Military Personnel                                                 16.5
Defense - Military                                               Operation and Maintenance - terrorism/security
                                                                 enhancements                                                      528.9
Defense - Military                                               Procurement                                                           -
Defense - Military                                               Research, Development, Test and Evaluation                            -
Defense - Military                                               NATO Security Investment Program                                      -
Department of State - Administration of Foreign Affairs          Diplomatic and Consular Programs                                  790.8
Department of State - Administration of Foreign Affairs          Salaries and Expenses                                              12.0
Department of State - Administration of Foreign Affairs          Office of Inspector General                                         1.0
Department of State - Administration of Foreign Affairs          Security and Maintenance of U.S. missions                         677.5
Department of State - Administration of Foreign Affairs          Emergencies in the Diplomatic and Consular Service                 12.9
FEMA                                                             Salaries and Expenses                                                 -
FEMA                                                             Emergency Management Planning and Assistance                          -




                                                 Page 48                                       GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -              -                 -               -                -              -            39.7
           -              -              -                 -               -                -              -             9.3
           -              -              -                 -               -                -              -             3.6

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -             4.6
           -              -              -                 -               -                -              -             3.1
           -              -              -                 -               -                -              -             6.2
           -              -              -                 -               -                -              -             1.1
           -              -              -                 -               -                -              -             0.1
           -              -              -                 -               -                -           17.9            18.9
           -              -              -                 -               -                -              -             2.0
           -              -              -                 -               -                -              -             1.8
           -              -              -                 -               -                -              -             4.9
         5.0              -              -                 -               -                -              -             4.4
           -              -              -                 -               -                -           14.1            12.0
           -              -              -                 -               -                -           10.0            25.0


           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -            3.9              -                 -               -                -              -               -
           -              -            8.8                 -               -                -              -               -

           -           80.6           88.6                 -               -                -              -               -
           -         142.1            25.2                 -               -                -              -               -
           -            8.0              -                 -               -                -              -               -
           -              -           37.5                 -               -                -              -               -
           -           23.7              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -           24.8              -                 -               -                -              -               -
           -              -              -                 -               -                -               -              -
           -              -              -               3.5               -                -              -               -
           -              -              -               3.5               -                -              -               -




                                      Page 49                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                               Appendix II
                                               Emergency Budget Authority, Fiscal Years
                                               1991 Through 1999




Dollars in millions
                                                                                                                         1999 Budget
Category/Bureau                                                Description                                                  Authority
Antiterrorism/Security Emergencies (continued)
Funds Appropriated to the President                            Nonproliferation, Anti-terrorism, Demining and Related
                                                               Programs                                                          20.0
Funds Appropriated to the President                            Unanticipated Needs for Defense of Israel Against
                                                               Terrorism                                                            -
General Services Administration                                Real Property activities - Federal Buildings Fund                    -
HUD                                                            Salaries and Expenses                                                -
HUD                                                            Community Development Grants                                         -
Interior - National Park Service                               Operation of the National Park System                              2.3
John F. Kennedy Center                                         Operations and Maintenance                                           -
John F. Kennedy Center                                         Construction                                                         -
Interior - National Park Service                               Construction                                                       3.7
Interior - U.S. Fish and Wildlife Service                      Resource Management                                                  -
Judiciary - Court of Appeals, District Courts, and Other       Salaries and Expenses                                                -
Justice - General Administration                               Salaries and Expenses - Office of Intelligence Policy
                                                               and Review                                                           -
Justice - General Administration                               Administrative Review and Appeals                                    -
Justice - General Administration                               Violent Crime Reduction Programs                                     -
Justice - Drug Enforcement Administration                      Salaries and Expenses                                                -
Justice                                                        Counterterrorism Fund                                                -
Justice - Federal Bureau of Investigation                      Salaries and Expenses                                             21.7
Justice - Immigration and Naturalization Service               Salaries and Expenses                                             80.0
Justice - Office of Justice Programs                           Justice Assistance                                                   -
Justice                                                        Salaries and Expenses, U.S. Attorneys                                -
National Gallery of Art                                        Salaries and Expenses                                                -
Office of Personnel Management                                 Salaries and Expenses                                                -
Smithsonian                                                    Salaries and Expenses                                                -
Transportation - Federal Aviation Administration               Operations                                                       100.0
Transportation - Federal Aviation Administration               Facilities and Equipment                                             -
Transportation - Federal Aviation Administration               Research, Engineering, and Development                               -
Transportation                                                 Research & Special Programs                                          -
Treasury - Departmental Offices                                Salaries and Expenses                                                -
Treasury - Financial Management Service                        Salaries and Expenses                                                -
Treasury                                                       Counterterrorism Fund                                                -
Treasury - Office of the Inspector General                     Salaries and Expenses                                                -
Treasury - Federal Law Enforcement Training Center             Salaries and Expenses                                              3.5




                                               Page 50                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority



           -              -              -                 -               -                -              -               -

           -              -           50.0                 -               -                -              -               -
           -              -              -              66.8               -                -              -               -
           -              -              -               3.2               -                -               -              -
           -              -              -              39.0               -                -              -               -
           -            2.3              -                 -               -                -              -               -
           -            1.6              -                 -               -                -              -               -
           -            3.4              -                 -               -                -              -               -
           -            6.3              -                 -               -                -              -               -
           -            1.5              -                 -               -                -              -               -
           -           10.0              -              16.6               -                -              -               -

           -            3.6              -                 -               -                -              -               -
           -            1.0              -                 -               -                -              -               -
           -            1.7              -                 -               -                -               -              -
           -            5.0              -                 -               -                -              -               -
           -           20.0              -              34.2               -                -              -               -
           -         115.6               -              77.1               -                -              -               -
           -           15.0              -                 -               -                -              -               -
           -           12.0              -                 -               -                -              -               -
           -           10.9              -               2.0               -                -              -               -
           -            0.4              -                 -               -                -              -               -
           -            0.2              -                 -               -                -              -               -
           -            0.9              -                 -               -                -              -               -
           -           57.9              -                 -               -                -              -               -
           -         147.7               -                 -               -                -              -               -
           -           21.0              -                 -               -                -              -               -
           -            3.0              -                 -               -                -              -               -
           -            0.3              -                 -               -                -              -               -
           -            0.4              -                 -               -                -              -               -
           -           15.0              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -            1.4              -               1.1               -                -              -               -




                                      Page 51                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                              Appendix II
                                              Emergency Budget Authority, Fiscal Years
                                              1991 Through 1999




Dollars in millions
                                                                                                                        1999 Budget
Category/Bureau                                               Description                                                  Authority
Antiterrorism/Security Emergencies (continued)
Treasury - Federal Law Enforcement Training Center            Acquisition, Construction, Improvements, and Related
                                                              Expenses                                                             -
Treasury - Bureau of Alcohol, Tobacco & Firearms              Salaries and Expenses - anti-terrorism                               -
Treasury - U.S. Customs Service                               Salaries and Expenses - anti-terrorism                               -
Treasury - Internal Revenue Service                           Processing, Assistance & Management                                  -
Treasury - U.S. Secret Service                                Salaries and Expenses                                             80.8
U.S. Holocaust Memorial Council                               Holocaust Memorial Council                                         2.0
U.S. Information Agency                                       Salaries and Expenses                                                -
Information System Emergencies (Y2K)
Funds Appropriated to the President                           Information Technology Systems and Related
                                                              Expenses                                                       2,250.0
Department of Defense - Military                              Operation and Maintenance - Information systems                1,100.0
International Humanitarian Assistance
Agency for International Development                          Child Survival and Disease Programs Fund                          50.0
Agency for International Development                          Assistance for the New Independent States of the
                                                              former Soviet Union                                               46.0
Agency for International Development                          Assistance for Eastern Europe and the Baltic States              120.0
Agency for International Development                          International Disaster Assistance                                188.0
Agency for International Development                          Central America and the Caribbean Emergency -
                                                              Disaster Fund                                                    621.0
Agency for International Development                          Unanticipated Needs - grant to the American Red
                                                              Cross                                                             30.0
Agency for International Development                          Economic Support Fund                                            161.5
Defense - Military                                            Emergency Response Fund (Rwanda, Cuba)                               -
Defense - Military                                            Middle East Humanitarian Relief                                      -
Defense - Military                                            Overseas Humanitarian, Disaster,and Civic Aid                     37.5
Defense - Military                                            Transportation of Humanitarian Aid to Former U.S.S.R.                -
Defense - Military                                            Defense Cooperation Account                                          -
Defense - Military                                            International Trust Fund of the Republic of Slovenia                 -
Department of State                                           Migration and Refugee Assistance                                 266.0
Department of State                                           U. S. Emergency Refugee and Migration Assistance
                                                              Fund                                                             165.0
Department of State - International Organizations and Confer. Contributions for international peacekeeping                         -
Department of the Treasury                                    Debt Restructuring                                                41.0
Funds Appropriated to the President                           Foreign Military Financing Program                                50.0
Panama Canal Commission                                       Panama Canal Revolving Fund                                          -




                                              Page 52                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority



           -            2.7              -                 -               -                -              -               -
           -          66.4               -             34.8                -                -              -               -
           -          62.3               -               1.0               -                -              -               -
           -          10.5               -                 -               -                -              -               -
           -            3.0              -               6.7               -                -              -               -
           -            1.0              -                 -               -                -              -               -
           -            1.4              -                 -               -                -              -               -



           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -


           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -          198.0                 -               -                -              -               -
           -              -              -                 -            20.0                -              -               -

           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -           850.0
           -              -              -                 -          299.3                 -              -               -
           -              -              -                 -               -                -           30.0               -
        36.5              -              -                 -               -                -              -               -
           -              -              -                 -               -                -          100.0               -
           -              -              -                 -               -                -              -           235.5
        28.0              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -            30.0                -              -               -
           -              -              -                 -               -                -           80.0               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -            60.0




                                      Page 53                                      GAO/AIMD-99-250 Budgeting for Emergencies
                                                 Appendix II
                                                 Emergency Budget Authority, Fiscal Years
                                                 1991 Through 1999




Dollars in millions
                                                                                                                          1999 Budget
Category/Bureau                                                   Description                                                Authority
Drug/Interdiction Emergencies
Agric. - Agriculture Research Service                            Counterdrug Research and Development Activities                  23.0
Defense                                                          Drug Interdiction and Counter-Drug Activities, Defense           42.0
Department of State                                              International Narcotics Control and Law Enforcement             255.6
Funds Appropriated to the President - Federal Drug Control       Special Forfeiture Fund
Programs                                                                                                                           2.0
Judiciary                                                        Defender Services                                                   -
Justice - Drug Enforcement Administration                        Salaries and Expenses                                            10.2
Justice - Immigration and Naturalization Service                 Salaries and Expenses - enforcement and border
                                                                 affairs                                                          10.0
Executive Office of President - Office of National Drug Control Salaries and Expenses
Policy                                                                                                                             1.2
Transportation - Coast Guard                                     Acquisition, Construction, and Improvements                     117.4
Transportation - Coast Guard                                     Reserve Training                                                  5.0
Transportation - Coast Guard                                     Research, Development, Test, and Evaluation                       5.0
Transportation - Coast Guard                                     Operating Expenses                                              116.3
Treasury - Departmental Offices                                  Salaries and Expenses                                             1.5
Treasury - United States Custom Service                          Salaries and Expenses                                           106.3
Treasury - United States Custom Service                          Operation, Maintenance, and Procurement                         162.7
Treasury - United States Custom Service                          Customs Facilities, Construction, Improvements and
                                                                 Related Expenses                                                  7.0
Other Emergencies
Education                                                        Education Excellence Program                                        -
Energy - Strategic Petroleum Reserve                             Strategic Petroleum Reserve - lost revenue from
                                                                 Petroleum on sale                                                   -
Equal Employment Opportunity Commission                          Salaries and Expenses                                               -
HHS - Office of the Secretary                                    General Department Management                                       -
HHS - Administration for Children and Families                   Refugee and Entrant Assistance                                  100.0
HHS - Centers for Disease Control and Prevention                 Disease Control, Research, and Training                             -
Interior                                                         Departmental Management                                          26.0
Justice                                                          Salaries and Expenses - general administration                      -
Justice - Federal Bureau of Investigation                        Telecommunications Carrier Compliance Fund                          -
Total Emergency Appropriations                                                                                                35,817.0




                                                 Page 54                                     GAO/AIMD-99-250 Budgeting for Emergencies
                                      Appendix II
                                      Emergency Budget Authority, Fiscal Years
                                      1991 Through 1999




1998 Budget    1997 Budget    1996 Budget       1995 Budget    1994 Budget       1993 Budget    1992 Budget     1991 Budget
   Authority      Authority      Authority         Authority      Authority         Authority      Authority       Authority


           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -

           -         112.9               -                 -               -                -              -               -
           -              -              -                 -               -                -           31.3               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -

           -              -              -                 -               -                -              -               -


           -              -              -                 -               -                -           40.0               -

      207.5               -              -                 -               -                -              -               -
           -              -              -                 -               -                -            1.0               -
           -            5.8              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -           23.0              -                 -               -                -              -               -
           -              -              -                 -               -                -              -               -
           -              -              -                 -               -                -            0.5               -
           -           60.0              -                 -               -                -              -               -
     5,879.6       10,154.5        5,663.2           9,330.3       11,442.8           5,850.0       21,166.1        45,045.1




                                      Page 55                                      GAO/AIMD-99-250 Budgeting for Emergencies
Appendix II
Emergency Budget Authority, Fiscal Years
1991 Through 1999




Notes:
1. The chart represents budget authority for each budget account included in appropriation bills within
the fiscal year, however, budget authority may be available in more than one fiscal year. For example,
fiscal year 1999 amounts may include appropriations also available for fiscal year 2000.
2. The chart represents budget authority enacted at the time the bill was passed but other actions may
have occurred such as rescissions or transfers after the bill was passed and these actions have not
been reflected in the chart.
3. Budget authority was included for the agency receiving the original appropriation and not for the
agency or program account receiving transfer of budget authority. Budget Authority may be new or
previously made available from prior appropriation if transferred and newly designated as an
emergency requirement.
4. Public Laws contain some items where dollar amounts were not specified at the time of bill
enactment and so amounts are not included in the chart.
5. Fiscal Year 1999 budget authority through May 1999.
6. Funds for the Department of Interior and the Forest Service to fight forest fires are counted as an
emergency only when the amounts for emergency rehabilitation and wildfire suppression activities are
in excess of the average of such costs for the previous 10 years.




Page 56                                             GAO/AIMD-99-250 Budgeting for Emergencies
Appendix II
Emergency Budget Authority, Fiscal Years
1991 Through 1999




(This page intentionally blank.)




Page 57                                    GAO/AIMD-99-250 Budgeting for Emergencies
Appendix III

Nonmilitary Programs That Received
Emergency Supplemental Appropriations in at
Least Five of the Last Eight Years                                                                                                          Appendx
                                                                                                                                                  iI




Dollars in millions
                                                                                     1999 Budget             1998 Budget        1997 Budget
                                                                                       Authoritya               Authority          Authority
Agriculture, Farm Service Agency; Emergency Conservation Program                                  28.0               34.0               95.0
Agriculture, Farm Service Agency; Agricultural Credit Insurance Fund
Program                                                                                       571.9                  21.0               23.0
Agriculture, Natural Resources Conservation Service; Watershed and
Flood Prevention Operations                                                                       95.0               80.0              229.0
Agriculture, Commodity Credit Corporation; Commodity Credit
Corporation Fund                                                                                  66.0                6.8               50.0
Agriculture, Rural Housing Service, Very Low-Income Housing Repair
Grants                                                                                             1.0                  -                   -
Commerce, Economic Development Administration, Economic
Development Assistance Programs                                                                      -                  -               77.2
Defense, Civil, Army Corps of Engineers; Flood Control and Coastal
Emergencies                                                                                          -                  -              415.0
Defense, Civil, Army Corps of Engineers; Operation & Maintenance                                  99.7              105.2              169.0
FEMA; Disaster Relief                                                                       2,036.0                1600.0             3,300.0
HUD, Community Planning and Development; Community Development
Grants                                                                                        250.0                 130.0              500.0
Interior, U.S. Fish and Wildlife Service; Construction                                            37.6               32.8              103.9
Interior, U.S. Geological Survey, Surveys, Investigations, and Research                            1.0                1.2                 5.8
Interior, National Park Service, Construction                                                     10.0                9.5              190.3
Small Business Administration; Disaster Loans Program                                         101.0                     -              113.0
Transportation, Federal Highway Administration Federal-Aid Highways                                  -              259.0              732.0


                                                a
                                                 Fiscal year 1999 figures are through May 1999.




                                                Page 58                                             GAO/AIMD-99-250 Budgeting for Emergencies
                                                 Appendix III
                                                 Nonmilitary Programs That Received
                                                 Emergency Supplemental Appropriations in
                                                 at Least Five of the Last Eight Years




t          1996 Budget            1995 Budget              1994 Budget        1993 Budget            1992 Budget          1991 Budget
y             Authority              Authority                Authority          Authority              Authority            Authority
                  30.0                       -                    25.0                30.0                    27.0                    -

                   32.2                      -                      7.7                21.8                   43.3                    -

                  80.5                       -                   340.5                60.0                    62.0                    -

                      -                1,000.0                   100.0              1,350.0                2,232.0                    -

-                   1.1                      -                     15.0                15.0                   10.0                    -

                   18.0                   55.0                        -              200.0                    75.0                    -

                 135.0                       -                     70.0              180.0                    40.0                    -
                  30.0                       -                        -               55.0                     3.1                    -
                3,379.0                3,275.0                  4,709.0             2,000.0                4,136.0                    -

0                  50.0                 405.0                    500.0               200.0                       -                    -
9                  37.3                      -                        -                30.0                   12.8                    -
8                   2.0                      -                        -                 1.4                    3.4                    -
3                  47.0                      -                        -                 0.9                   29.0                    -
0                100.0                       -                    919.8              165.0                   733.5                    -
0                300.0                       -                  1,265.0              175.0                    30.0                    -




(935267)                  Leter                  Page 59                                      GAO/AIMD-99-250 Budgeting for Emergencies
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