oversight

National Oceanic and Atmospheric Administration: Unobligated Carryover Balances for Fiscal Year 1997

Published by the Government Accountability Office on 1997-04-30.

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

7        United States
1   A0   G&eral Accounting
         Washington,
                               Office
                       D.C. 20548

         Resources, Community,     and
         Economic Development      Division


         B-276727

         April 30, 1997

         The Honorable Judd Gregg
         Chairman
         The Honorable Ernest F. Holhngs
         Ranking Minority Member
         Subcommittee on Commerce,
           Justice, State, and the Judiciary
         Committee on Appropriations
         United States Senate

         The Honorable Harold Rogers
         Chairman
         The Honorable Alan B. Mollohan
         Ranking Minority Member
         Subcommittee on Commerce,
           Justice, State, the Judiciary, and
           Related Agencies
         Committee on Appropriations
         House of Representatives

         Subject:     National Oceanic and Atmosnheric Administration:            Unobligated
                      Carrvover Balances for Fiscal Year 1997

         As agreed with your offices, we are providing you with information on the
         National Oceanic and Atmospheric Administration’s (NOAA) unobligated funds
         that were carried over from fiscal year 1996 into fiscal year 1997 to support the
         agency’s program activities.’ Our objective was to identify the unobligated
         carryover balances that were available at the beginning of fiscal year 1997 that
         could possibly be used to reduce NOAA’s fiscal year 1998 budget request. We
         analyzed the information that NOAA provided to us to determine program areas
         with large carryover balances and obtained and analyzed NOAA’s reasons for
         these balances. We did not obtain information on unexpended obligations,
         which represent the portion of NOAA’s authority that has been obligated for
         goods and services but for which the agency has not yet incurred costs. In


         Unobligated carryover balances represent the portion of prior years’ budget
         authority that has not been obligated.
                                              GAOIRCED-97-143R NOAA Unobligated    Carryover   Balances
B-276727
addition, we did not veri@ the financial data that NOAA provided to us from its
financial information system.

SUMMARY

As discussed in enclosure 1, NOAA had an unobligated carryover balance of
about $257.2 million at the end of fiscal year 1996 that it carried into fiscal year
1997. The balance consisted of $162.3 million in NOAA’s Operations, Research,
and Facilities account and $94.9 million in its other special accounts. We
focused our review on the carryover balances in the Operations, Research, and
Facilities account. The largest carryover balances were in the fisheries
programs ($35.8 million) and the satellite programs ($105 million).

According to NOAA, most of the fisheries programs’ carryover balance was
attributable to emergency supplemental funds, which were released in fiscal
year 1995 for disaster relief for depleted fisheries. NOAA expects to obligate
the balance of these funds in fiscal year 1997. However, we noted that as a
result of efforts to reduce the unobligated carryover balance for fisheries
programs, in fiscal year 1996 NOAA obligated more than it was allotted in five
of nine budget line items by “prefunding” some 1997 contracts and grants.
Although NOAA said that it would restore all of the funds used for prefunding
to the affected accounts in fiscal year 1997 (using funds appropriated in 1997),
this practice reduced the eheries programs’ fiscal year 1996 carryover balance
to an amount that was about $9.7 million less than it othkwise would have
been.

The satellite programs’ carryover balance resulted from contractor delays and a
review by the Department of Commerce’s Inspector General, which
recommended that NOAA not transfer additional funding authority to the
National Aeronautics and Space Administration (NASA), which procures and
launches NOAA’s weather satellites, until needed for contracts. When NOAA
transfers funding authority to NASA, it considers the money obligated, even
though NASA may not have committed the funds to a specific contract. The
satellite programs’ carryover balance was reduced from $105 million to $84.5
million at the beginning of fiscal year 1997, primarily as a result of a $20 million
congressional rescission. However, we found that this amount did not include
about $75.6 million in unobligated authority that resided with NASA at the
beginning of fiscal year 1997. These funds had been transferred to NASA but
 not committed to contracts. Thus, the satellite programs had a total of $160.1
 million in unobligated funds at the beginning of fiscal year 1997.

 After considering the satellite programs’ total estimated funding and projected
 obligations through fiscal year 1998, we estimate that NOAA will have about
 $111.1 million in unobligated funds at the end of fiscal year 1998. This estimate
 assumes that NOAA will receive its total 1998 budget request for the satellite
 programs. In the past, NOAA’s budget provided NASA with 3 months of
 forward-funding from its unobligated balance to pay for NASA’s expenses due in
2                                 GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
B-276727
the first quarter of the following fiscal year. At the end of our review, NOAA
said that as a result of our work, it would forward-fund only 1 month of new
budget authority, which we estimate will be about $37 million. Therefore, using
1 month of forward-funding, we estimate that NOAA will have about $74.1
million in unobligated funds that could be considered excess at the end of fiscal
year 1998. Thus, this amount could be used to reduce NOAA’s 1998 request for
the satellite programs.

In addition, about $4.4 million in unobligated carryover funds is available in two
special funds that were initially established to promote fisheries and to aid the
Gulf of Mexico shrimp industry after Hurricane Andrew. These funds could be
rescinded or used to reduce NOAA’s fiscal year 1998 budget request. Another
$2.6 million in unobligated carryover funds and $1.5 million in requested funds
would be available if the Congress decides not to approve the purchase of new
sonar equipment for the NOAA’s fleet.

AGENCY COMMENTS

We provided a draft of this report to the Department of Commerce for review
and comment. Commerce suggested some technical clarifications, which have
been incorporated in the enclosure. Commerce also commented on the
following two issues.

F’irst, Commerce said that NOAA has agreed to transfer Z-months of forward-
funding to NASA under the satellite programs. This is a change from NOAA’s
position at the end of our review when NOAA officials said that they would
forward-fund for 1 month. According to Commerce, 2 months of forward-
funding will prevent any program disruptions at the beginning of the fiscal year.
However, Commerce did not address how this change in policy wiJl affect the
estimated unobligated carryover balance at the end of fiscal year 1998. While 2
months of forward-funding is a move in the right direction, we continue to
believe that NOAA should work towards 1 month, which would result in an
estimated $74.1 million in unobligated funds at the end of fiscal year 1998.

Second, Commerce said that the unobligated carryover funds ($2.6 million) that
NOAA planned to use to buy new sonar equipment for use on NOAA vessels
should not be rescinded even if that equipment is not purchased. Although
NOAA planned to use these funds for new sonar equipment, NOAA said that it
does not plan to acquire the equipment unless the Congress agrees with the
acquisition. Commerce also pointed out that these funds were not appropriated
specifically for the purchase of sonar equipment. Therefore, Commerce said
that if the Congress determines that it does not want NOAA to use the funds to
acquire the sonar equipment, then the moneys should be left to support other
critical activities funded by that appropriation account. Commerce said that
since the funds were appropriated by the Congress for broader purposes and
the Congress did not specifically intend those funds to be used for the
equipment that NOAA is proposing to acquire, there is no basis for a rescission.
3                               GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
 B-276727

 While we do not disagree with Commerce’s argument against a rescission, we
 continue to believe that if these unobligated carryover funds are not used for
 the purpose identified in NOAA’s budget documents-the purchase of new sonar
 equipment-the Congress could consider reducing NOAA’s fiscal year 1998
 appropriation request by that amount. Although Commerce believes that NOAA
 can obligate these funds for other important activities, ultimately the
 Congress will decide how, or if, NOAA should use these funds.



  We performed our work     from October 1996 through March 1997 in accordance
  with generally accepted   government auditing standards. Please contact me on
  (202) 5123841 if you or   your staff have any questions. Major contributors to
  this report were Ronald   E. Stouffer; Marcus R. Clark, Jr.; and Gary Malavenda.

            r . fkL .
             I
   i or . Rezendes
1%Director, Energy, Resources,
    and Science Issues

  Enclosure




                                                                                             : *-.




  4                                 GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
ENCLOSTJRE I                                                ENCLOSURE I




GAO Resources, Community, and Economic
    Development Division



         Review of National Oceanic and
         Atmospheric Administration’s -
         Unobligated Carryover Balances for
         Fiscal Year 1997




5                      GAOLRCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                      ENCLOSURE I




MY       0 bject ives

     l   Within the National Oceanic and Atmospheric
         Administration’s (NOAA) budget, identify
         unobligated funds carried over from fiscal years
         1996  to 1997 by line item.
     l   Select program areas with large carryovers.
     l   Obtain the agency’s justification for the carryover
         balances and make judgments based on
         reasonableness.




                              GAO/RCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                      ENCLOSURE I




GQII Background--NOAA’s                     Mission


      l   NOAA’s mission is to monitor, describe, and
          predict changes in the Earth’s environment and
          conserve and manage the nation’s coastal and
          marine resources to ensure sustainable economic
          opportunities.




                            GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
         .
ENCLOSURE I                                                     ENCLOSURE I




MO       Background--NOAA               Program Activities

     l   National Marine Fisheries Service (NMFS)
     l   National Weather Service (NWS)
     l   National Environmental Satellite, Data, and
         Information Service (NESDIS)           -
     l   National Ocean Service (NOS)
     l   Oceanic and Atmospheric       Research (OAR)




                             GAO/RCED-97-143R NOAA Unobligated Carryover Balances
          ..
ENCLOSURE I                                                      ENCLOSURE I




GAo Background--NOAA                    Appropriation
    Accounts
      l   NOAA’s budget is organized under five major
          program activities (NMFS, NWS, NESDIS, NOS,
          and OAR)--and a sixth activity, Program Support.
      l   NOAA receives most of its funds under a single
          Operations, Research, and Facilities (ORF)
          appropriation--but several “special” accounts
          receive money from separate appropriations or
          other sources.




9                           GAO/RCED-97-143R NOAA Unobligated Carryover Balances
         .
ENCLOSURE I                                                   ENCLOSURE I




w        Summary of NOAA Budget
         (Dollars in millions)

         Program                                     FY 1998
         activity    FY 1996        FY 1997          request
         NMFS           $281.6        $323.4                 $338.3
         NWS             606.0           638.0                642.5
         NESDIS          471.5           447.6                470.1
         NOS             175.3           204.2                224.8
         OAR              225.9          253.2                248.1
         Program          132.5           71.7                 77.2
         support
             Total     $1,892.8 1$1,938.1 (               $2,001 .o




    10                     GAO/RCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                       ENCLOSURE I




G&D NOAA Budget--Continued

     l   The budget totals do not reflect reimbursables or
         appropriations made to the other NOAA special
         accounts. NOAA’s FY 1998 request totals $2.051
         billion when considering these accounts.
     l   NOAA’s FY 1998 request separates out money for
         the procurement of major systems and the
         construction of facilities in a new capital asset
         account.




11                           GAO/RCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                    ENCLOSURE I        ’




QW       NOAA Unobligated Carryover
         Balances (Dollars in millions)


Appropriation   FY 1993    FY 1994          FY 1995          FY 1996


ORF                $52.9        $92.3           $91.6            $162.3
Others             144.4        158.6             111.2              94.9
 Total            $197.3      $250.9          $202.8             $257.2




 12                        GAO/RCED-97.143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                      ENCLOSURE I




w      Unobligated Carryover Within the
       NOAA ORF Account ($ millions)
                                  FY 1996 ending
                                  unobligated
      Program   activity          carryover

      NMFS                                                     $35.8
      NWS                                                        8.1
      NESDIS                                                   105.0
      NOS                                                       10.3
      OAR                                                         1.3
      Program support                                             1.8
       Total                                              $162.3




13                         GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
ENCLOSURE I                                                     ENCLOSURE I




MY        ORF Program Activities--NMFS

      l   Unobligated carryover of $35.8 million (22 percent
          of ORF carryover).
      l   According to NOAA, most of the carryover is
          attributable to emergency supplemental funds for
          disaster relief for depleted fisheries, wehich were
          released in FY 1995. NMFS expects to obligate the
          remaining amount in 1997.




 14                          GAO/RCED-97-143R NOAA Unobligated Carryover Balances
          .
ENCLOSURE I                                                      ENCLOSURE I




GKJ NMFS-Continued

     l   As a result of an “all out” effort to reduce its FY
         1996 unobligated carryover, NMFS obligated more
         than allotted in 5 of 9 line items, In doing so,
         NMFS reduced its carryover by about $9.7 million
         by prefunding some 1997 contracts and grants.
     l   NMFS paid for these activities with funds that
         would not have been obligated on other programs,
         including the Disaster Relief Fund, until FY 1997.
         NMFS said that it will restore all funds used for
         prefunding to the affected programs in FY 1997.




15                           GAO/RCED-97-143R NOAA Unobligated Carryover Balances
           .
ENCLOSURE I                                                      ENCLOSURE I




GM        ORF-NWS

      l   Very small carryover ($8.1 million) compared to
          appropriation--over $600 million or one-third of
          NOAA’s budget.
      l   Carryover due to (1) NWS money owed to
          Commerce (but not yet paid) for Working Capital
          Fund and an employee compensation fund ($3.3
          million) and (2) delayed procurement contracts and
          construction work in the weather modernization
          program ($4.8 million).




 16                           GAO/RCED-97-143R NOAA Unobligated Carryover Balances
          .
ENCLOSURE I                                                     ENCLOSURE I




MCI ORF-NESDIS


      l   The four NESDIS satellite programs--the
          Geostationary Operational Environmental Satellite
          (GOES), the Polar-Orbiting Operational
          Environmental Satellite (POES), Environmental
          Observing Services (EOS), and Data and
          Information Services-- collectively had a large
          carryover ($105 million) due to (1) delays in the
          satellite programs and (2) a Commerce Inspector
          General review, which recommended that
          obligational authority not be turned over to NASA
          until needed for contracts.




17                          GAO/RCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                     ENCLOSURE I




GKI    NESDIS--Continued

       l   NOAA considers money transferred to NASA,
           which procures and launches satellites, as
           obligated. The IG says NESDIS “hid” unneeded
           money at NASA to avoid carryover. NOAA has
           transferred over $700 million since 1994.
       l   Steps have been taken to reduce the carryover
           balance. NOAA reprogrammed $23.6 million to
           other programs (effective in FY 1996), and the
           Congress rescinded $20 million at the beginning of
           1997, reducing the carryover to $84.5 million ($105
           million less the $20 million rescission and about
           $0.5 million allocated to NOAA’s management
           fund).




 18                          GAOIRCED-97-143R NOAA Unobligated Carryover Balances
           .
ENCLOSURE I                                                          ENCLOSURE I




WI     NESDIS-Opportunities to Reduce the
       FY 1998 Budget Request
       l       NOAA’s reported carryover         did not include
               unobligated funds residing       with NASA at the end
               of FY 1996 ($75.6 million).      Thus, the total
               NESDIS 1996 unobligated          carryover was
               $160.1 million.
       l       This carryover, along with program slowdowns,
               and a change in NASA’s forward-funding policy,
               will lead to a $74.1 million unobligated carryover
               at the end of FY 1998 for the satellite programs
               if NESDIS receives its total FY 1998 request.
               See the following table.




19                               GAOIRCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                                    ENCLOSURE I




GD         Estimated NOAA Satellite Unobligated
           Carryover at the End of FY 98 ($M)




carryover
NASA 1 month forward funding for 1st qtr.          10.3       26.7      N/A      N/A      37.0
FY99
Estimated beginning FY 99 NOAA                    $20.5     $53.6       N/A      N/A     $74.1
carryover less forward funding

Note: Totals may not add due to rounding.




 20                                         GAOIRCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                       ENCLOSURE I




MO        NESDIS-NASA            Forward-Funding

     l   NOAA’s budget contains forward-funding for NASA
         to pay for expenses due in the first quarter of the
         next fiscal year.
     l   Until now, NOAA provided NASA with 3 months of
         unobligated reserves for forward-funding.
     l   At the end of our review, NOAA said that it would
         begin forward-funding only 1 month of new budget
         authority as a result of our work.
     l   However, in commenting on a draft of this report,
         NOAA said it would begin using 2 months of
         forward-funding.




21                           GAO/RCED-97-143R NOAA Unobligated   Carryover Balances
ENCLOSURE I                                                    ENCLOSURE I




MO       NESDIS Funds Awaiting Close-out
         Audits
     l   About $0.4 million of NESDIS funds in NASA
         GOES and POES subcontracts awaiting close-out
         at the time of our review.
     l   NOAA relies on NASA to identify and reobligate
         these funds. However, NOAA considers these
         funding adjustments when it prepares its budget
         execution plans and budget requests for the
         subsequent year.




22                          GAOIRCED-97-143R NOAA Unobligated Carryover Balances
          .
ENCLOSURE I                                                      ENCLOSURE I




GM       ORF-NOS

     l   Small unobligated carryover--$10.3            million (about 6
         percent of ORF carryover total).
     l   Proposed new sonar equipment to be financed in
         part by ORF and Fleet Modernization Fund on hold
         (total $2.64 million, including about $0.4 million in
         NOS) pending a decision on the future of the
         NOAA fleet. If decision made to not fund, this
         amount could be rescinded.




23                           GAO/RCED-97-143R NOAA Unobligated Carryover Balances
ENCLOSURE I                                                       ENCLOSURE I




MO        NOAA’s Special Accounts

      l   14 different accounts. Many do not receive
          appropriated funds. NOAA wants to consolidate
          some in ORE
      l   Fisheries Promotional Fund--about $1 million
          could be rescinded. NOAA expects to propose
          transferring these funds to ORF to use as needed.
          This will require new legislation, according to
          NOAA.
      l   Fleet Modernization Fund--carried over $2.25
          million for sonar equipment and is requesting
          another $1.5 million for FY 1998. Obligation is
          awaiting final decision on the future of the fleet.
          NOAA wants to move this Fund into ORE




 24                            GAO/RCED-97-143R NOAA Unobligated Carryover Balances
          .
ENCLOSURE I                                                        ENCLOSURE I




MO       NOAA’s Special Accounts-
         Construction
l    Construction--about $22 million carryover expected at
     end of FY 1997, primarily associated with projects
     earmarked by the Congress. NOAA expects to build
     these facilities but could not provide us with specific
     funding plans for many of the projects.
l    NOAA considers construction needs during its annual
     budget process but does not have a long-range
     construction plan that prioritizes needed new
     construction, the possible consolidation of facilities, and
     preventative maintenance. NOAA’s newly created
     Facilities Council expects to develop a long-range
     facilities construction plan.




25                            GAO/RCED-97-1&R   NOAA Unobligated Carryover Balances
          .
ENCLOSURE I                                                      ENCLOSURE I




GLQB Other Issues--Hurricane                      Andrew Aid

      l   Hurricane Andrew carryover ($3.4 million) for aid to
          the Gulf shrimp industry under FL. 102-368 (Sept.
          23, 1992). These funds have not been apportioned
          to NOAA to obligate--but are considered part of
          NOAA’s carryover. The funds could be rescinded.




 26                           GAO/RCED-97-143R NO&4 Unobligated Carryover Balances
ENCLOSURE I                                                      ENCLOSURE I




GkO Summary

     l   NOAA program offices were very attentive to
         reducing unobligated carryover balances in 1996.
         NMFS reduced its carryover by about $9.7 million
         by prefunding some 1997 contracts and grants.
     l    NOAA’s satellite office will have about$74 million
         in unobligated funds at the end of FY 1998 under
         current funding and obligation projections. This
         amount could be used to reduce NOAA’s 1998
         request.




                             GAO/RCED-97-143R NOAA Unobligated Carryover Balances
             .
ENCLOSURE I                                                       ENCLOSURE I




WI          Summary Continued

            About $4.4 million available in the Hurricane
            Andrew and the Fisheries Promotional funds that
            could be used to reduce NOAA’s FY 1998 budget
            request. NOAA’s 1998 budget request could be
            reduced by another $4.1 million ($2.6 million in
            unobligated carryover plus $1.5 million in new
            money requested) if the Congress decides not to
            approve the obligation of funds for new sonar
            equipment for the NOAA fleet.




 (307749)
 28                            GAO/RCED-97-143R NOAA Unobligated Carryover Balances
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