GAO-17-797SP, PRINCIPLES OF FEDERAL APPROPRIATIONS LAW

PRINCIPLES OF

FEDERAL

APPROPRIATIONS

LAW

Chapter 3

Availability of

Appropriations:

Purpose

Fourth Edition

2017 Revision

This document supersedes chapter 4 of GAO, Principles of Federal Appropriations Law, 3rd ed.,

GAO-04-261SP (Washington, D.C.: Jan. 2004). Chapters 5 through 15 of the third edition of

Principles of Federal Appropriations Law, in conjunction with GAO, Principles of Federal

Appropriations Law: Annual Update to the Third Edition, GAO-15-303SP (Washington, D.C.:

Mar. 2015), remain the most currently available material on the topics discussed therein. Both

Principles and the Annual Update to the Third Edition are available at www.gao.gov/legal/red-

book/overview.

Office of the General Counsel

GAO-17-797SP

United States Government Accountability Office

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A. The purpose statute: 31 U.S.C. § 1301(a) 9

B. The necessary expense rule and the three-step analysis 14

C. Step 1: logical relationship between the expenditure and the

appropriation 17

1. Overview of Step 1 17

a. Expenditure must contribute to accomplishing the

purposes of the corresponding appropriation 17

(1) Determining authorized purposes: examine the

language of the appropriation 19

(2) Determining authorized purposes: examining other

statutes 20

b. Agency determinations play a role 23

2. New or additional duties 28

3. Termination of program 30

a. Termination desired by the agency 30

b. Reauthorization pending 31

4. Personal expenses must primarily benefit

the government 33

a. Introduction 33

b. Apparel 34

(1) 5 U.S.C. § 7903 38

(2) Federal Employees Uniform Act 40

(3) The Occupational Safety and Health Act

of 1970 41

c. Child care; elder care 43

d. Commuting and parking 46

(1) Transit benefits 49

(2) Parking 50

e. Entertainment of government personnel 51

f. Greeting cards and seasonal decorations 53

(1) Greeting cards 53

(2) Seasonal decorations 54

g. Personal qualification expenses 55

(1) Personal qualification is a personal expense 55

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(2) Statutory authority: 5 U.S.C. § 5757 58

h. Recreation and welfare 59

i. Telework 62

j. Miscellaneous employee expenses 65

5. Food 67

a. Employees in travel status 69

b. Employees working at official duty station under

unusual conditions 69

c. Training 72

d. Employees’ food while attending non-federal

meetings 74

(1) Food must be incidental to the meeting 75

(2) Additional rules where the cost of meals is

charged separately 78

(3) Reimbursement for alternate meals

not permitted 79

e. Employees’ food at meetings organized by a

federal entity 79

(1) General rule: no use of appropriations for food

at meetings organized by a federal entity 79

(2) Exceptions: where food at federally organized

meetings may be permissible 81

f. Agency hosting a formal conference 83

g. Awards ceremonies 88

h. Cultural awareness programs 89

i. Cafeterias and kitchen appliances 89

j. Bottled water 91

k. Focus groups 91

l. Accomplishment of a statutory responsibility 92

m. Food for persons other than government

personnel 94

n. Official reception and representation funds 96

6. Considerations for various categories of expenditures 102

a. Advertising and dissemination of information on

agency activities 102

(1) Advertising and promotion 103

(2) Dissemination of information 105

b. Attorney’s fees 107

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(1) Hiring of attorneys by government agencies 109

(2) Suits against government officers

and employees 112

(3) Suits unrelated to federal employees 126

(4) Claims by federal employees 127

(a) Discrimination proceedings 127

(b) Other employee claims 130

(5) The Criminal Justice Act 135

(6) Types of actions covered 136

(7) Miscellaneous cases 137

(8) The Equal Access to Justice Act 138

(9) Contract matters 145

(a) Bid protests 145

(b) Contract disputes 147

(10) Public participation in administrative proceedings:

funding of intervenors 148

c. Awards 156

(1) Government Employees’ Incentive Awards Act 156

(a) Only federal employees may receive

awards under the Act 158

(b) Cash and non-cash awards are permissible 158

miscellaneous expenses if they are related

to an award 159

(d) Awards for money-saving employee

suggestions must be for suggestions that

save government money 163

(e) Awards are at an agency’s discretion 164

(2) Other awards statutes 164

(3) Decisions that predate the Government

Employees’ Incentive Awards Act 165

d. Books and periodicals 166

e. Business cards 168

f. Contests 169

(1) Entry fees 169

(2) Government-sponsored contests 170

g. Cultural awareness programs 175

h. Entertainment for persons other than government

personnel 177

(1) Entertainment authorized by law 177

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(2) Entertainment not specifically authorized

by law 179

i. Fines and penalties owed by federal employees 180

j. Gift giving 185

k. Health care and health-related items 192

(1) The Rehabilitation Act of 1973 193

(2) Employee programs related to health: 5 U.S.C.

§ 7901 196

(a) Treatment of on-the-job illness and dental

conditions 197

(b) Pre-employment and other examinations 197

and dentists 200

(d) Preventive programs relating to health 201

(3) Federal Employees Health Benefits Act

of 1959 203

(4) The government’s provision of a safe, sanitary

workplace 203

(5) Some other health-related decisions 206

l. Miscellaneous items incident to the federal

workplace 208

m. Office furnishings (decorative items) 211

n. Photographs 214

o. Postage 215

p. Rewards 216

(1) Contractual basis 216

(2) Rewards to informers 218

(a) Payments to informers: Internal Revenue

Service 221

(b) Payments to informers: Customs Service 223

(3) Lost or missing government property 225

(4) Rewards to government employees 227

(5) Military deserters 228

q. Traditional ceremonies 229

r. Training 230

s. Travel 232

D. Step 2: expenditure must not be prohibited 233

1. Agency communications with Congress and the public 236

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a. Lobbying 237

(1) Grassroots lobbying 238

(a) The Anti-Lobbying Act: 18 U.S.C. § 1913 238

(b) Appropriations act provisions: publicity or

propaganda designed to influence pending

legislation 247

act provisions barring grassroots lobbying 252

(d) Cases with no violation of appropriations

act provisions barring grassroots lobbying 258

(2) Provision of assistance to private

lobbying groups 264

(3) Promotion of legislative proposals: Interior

appropriations act restriction 266

(4) Lobbying with grant funds: the Byrd

Amendment 269

b. Publicity or propaganda 278

(1) Self-aggrandizement 283

(2) Covert propaganda 287

(3) Purely partisan materials 293

c. Employee communications with Congress 298

d. Advertising in government publications 300

e. Publicity experts 301

2. Compensation restrictions 305

a. Dual compensation 306

b. Employment of aliens 307

c. Forfeiture of annuities and retired pay 309

(1) The Alger Hiss case 310

(2) Types of offenses covered 311

(3) Related statutory provisions 313

3. Guard services: Anti-Pinkerton Act 313

a. Evolution of the law prior to 1978 313

b. The present state of the law 317

4. Insurance 319

a. The self-insurance rule 319

b. Exceptions to the rule 323

(1) Departments and agencies generally 323

(2) Government corporations 327

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c. Specific areas of concern 328

(1) Property owned by government contractors 328

(2) Use of motor vehicles 329

(3) Losses in shipment 331

(4) Bonding of government personnel 332

5. Meetings and conventions 334

a. Historical background 334

b. Attendance at meetings: individuals other than

federal employees 337

c. Use of grant funds 342

d. Attendance at meetings: federal employees 343

e. Attendance at meetings: military personnel 348

f. Invitational travel 349

g. Rental of meeting space in District of Columbia 353

6. Membership fees: 5 U.S.C. § 5946 354

7. Sovereign immunity 361

a. Is the charge a tax or a fee? 363

(1) Firefighting services 365

(2) Other decisions and opinions considering

whether a charge is a tax or a fee 369

b. Is the tax imposed upon the United States? 374

(1) State gasoline taxes 376

(2) Taxes upon government contractors 377

(a) Federal government contractors are subject

to state and local taxation 377

(b) Federal government may reimburse its

contractors for taxes they pay 379

(3) Public utilities 381

(4) Other decisions and opinions concerning

incidence of taxes 382

c. Federal immunuity from state and local fines and

penalties 387

d. Impermissible infringement upon federal activity 388

e. Recovery of taxes improperly paid 390

f. Quantum meruit 391

8. Telephone services 393

a. Telephone service to private residences 393

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(1) The statutory prohibition and its major

exception 393

(2) Funds to which the statute applies 395

(3) What is a “private residence”? 396

(4) Application of the general rule 397

(5) Exceptions 399

b. Long-distance calls 404

c. Mobile or cellular telephones 405

E. Step 3: expenditure must not be provided for in another

appropriation 407

1. Specific appropriation prevails over the general one 407

2. Multiple appropriations available for the

same purpose 410

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Availability of Appropriations: Purpose

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This chapter introduces the concept of the “availability” of

appropriations. The decisions are often stated in terms of whether

appropriated funds are or are not “legally available” for a given

obligation or expenditure. This is simply another way of saying that

a given item is or is not a legal expenditure. Whether appropriated

funds are legally available for something depends on three things:

• The purpose of the obligation or expenditure must be

authorized;

• The obligation must occur within the time limits applicable to the

appropriation; and

• The obligation and expenditure must be within the amounts

Congress has established.

Thus, there are three elements to the concept of availability:

purpose, time, and amount. All three must be observed for the

obligation or expenditure to be legal. Availability as to time and

amount are covered in subsequent chapters. This chapter

discusses availability as to purpose.

A. The purpose statute: 31 U.S.C.

§ 1301(a)

One of the fundamental statutes dealing with the use of

appropriated funds is 31 U.S.C. § 1301(a), also known as the

purpose statute:

“Appropriations shall be applied only to

the objects for which the appropriations

were made except as otherwise

provided by law.”

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Simple, concise, and direct, Congress originally enacted this statute

in 1809

and it is one of the cornerstones of congressional control

over the federal purse. Simply stated, the purpose statute says that

public funds may be used only for the purpose or purposes for

which they were appropriated.

Because the Constitution forbids

payment of money from the Treasury except as provided by an

appropriation,

and because an appropriation must be derived from

an act of Congress, it is for Congress to determine the purposes for

which an appropriation may be used. The purpose statute prohibits

charging authorized items to the wrong appropriation, and

unauthorized items to any appropriation. Anything less would

render congressional control largely meaningless. An earlier

Treasury Comptroller was of the opinion that the statute did not

make any new law, but merely codified what was already required

under the Appropriations Clause of the Constitution. 4 Lawrence,

First Comp. Dec. 137, 142 (1883).

Administrative applications of the purpose statute can be traced

back almost to the time the statute was enacted. In an 1898

decision captioned “Misapplication of Appropriations,” the

Comptroller of the Treasury talked about the purpose statute in

these terms:

“It is difficult to see how a legislative

prohibition could be expressed in

stronger terms. The law is plain, and

any disbursing officer disregards it at his

peril.”

Ch. 28, § 1, 2 Stat. 535 (Mar. 3, 1809).

Because revolving funds constitute an appropriation, albeit a permanent appropriation

that is indefinite as to amount, a necessary conclusion is that the purpose statute also

applies to revolving funds. See B-247348, June 22, 1992; B-240914, Aug. 14, 1991. See

also 63 Comp. Gen. 110, 112 (1983), and decisions cited therein. For further discussion of

the principle that revolving funds are appropriations, see Chapter 2, “The Legal

Framework”.

U.S. Const. art. I, § 9, cl. 7

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4 Comp. Dec. 569, 570 (1898). See also 36 Comp. Gen. 621, 622

(1957) (quoting an 1821 decision).

The starting point in applying the purpose statute is that, absent a

clear indication to the contrary, the common meaning of the words

in the appropriation act and the program legislation it funds governs

the purposes to which the appropriation may be applied. To

illustrate, an appropriation available for the “replacement” of state

roads damaged by nearby federal dam construction could be used

only to restore those roads to their former condition, not for

improvements such as widening. 41 Comp. Gen. 255 (1961).

Similarly, funds provided for the modification of existing dams for

safety purposes could not be used to construct a new dam, even as

part of an overall safety strategy. B-215782, Apr. 7, 1986.

If a proposed use of funds is inconsistent with the statutory

language, the expenditure is improper, even if it would result in

substantial savings or other benefits to the government. Thus, while

the Federal Aviation Administration (FAA) could construct its own

roads needed for access to FAA facilities, it could not contribute a

share for the improvement of county-owned roads, even though the

latter undertaking would have been much less expensive.

B-143536, Aug. 15, 1960. Similarly, the Merit Systems Protection

Board (MSPB) was required by law to adjudicate federal

employees’ appeals from agency personnel actions. MSPB would

conduct the hearings at one of its field offices, which required many

individuals from the agency that employed the appellant to travel to

the hearing. It would have cost considerably less for the employing

agency to reimburse MSPB so its hearing officer could travel to the

employing agency’s location rather than for the employing agency

to pay the costs for several of its staff to travel to a hearing at

MSPB’s field office. However, because there was no statutory

authority for the employing agency to provide such a

reimbursement or for MSPB to accept it, we concluded that such a

reimbursement would be impermissible despite the considerable

cost savings. 61 Comp. Gen. 419 (1982). See also 39 Comp.

Gen. 388 (1959).

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As we discussed in Chapter 2, “The Legal Framework,” transfer

between appropriations is prohibited without specific statutory

authority, even where reimbursement is contemplated. It follows

that deliberately charging the wrong appropriation for purposes of

expediency or administrative convenience, with the expectation of

rectifying the situation by a subsequent transfer from the right

appropriation, violates the purpose statute. 36 Comp. Gen. 386

(1956); 26 Comp. Gen. 902, 906 (1947); 19 Comp. Gen. 395

(1939); 14 Comp. Gen. 103 (1934); B-248284.2, Sept. 1, 1992. The

fact that the expenditure would be authorized under some other

appropriation is irrelevant. Charging the “wrong” appropriation,

unless authorized by some statute such as 31 U.S.C. § 1534

(which authorizes adjustments between appropriations), violates

the purpose statute. For several examples, see GAO, Improper

Accounting for Costs of Architect of the Capitol Projects, PLRD-81-

4 (Washington, D.C.: Apr. 13, 1981).

The transfer rule illustrates the close relationship between

31 U.S.C. § 1301(a) and statutes relating to amount such as the

Antideficiency Act, 31 U.S.C. § 1341. An unauthorized transfer

violates 31 U.S.C. § 1301(a) because the transferred funds would

be used for a purpose other than that for which they were

appropriated. B-279886, Apr. 28, 1998; B-278121, Nov. 7, 1997;

B-248284.2, Sept. 1, 1992. If the balance of the receiving

appropriation, after deducting the unauthorized transfer, is

exceeded, the Antideficiency Act is also violated. Further, informal

congressional approval of an unauthorized transfer of funds

between appropriation accounts does not have the force and effect

of law. B-278121; B-248284.2.

Although every violation of 31 U.S.C. § 1301(a) is not automatically

a violation of the Antideficiency Act, and every violation of the

Antideficiency Act is not automatically a violation of 31 U.S.C.

§ 1301(a), cases frequently involve elements of both. Thus, an

expenditure in excess of an available appropriation violates both

statutes. The reason the purpose statute is violated is that, unless

the disbursing officer used personal funds, he or she must

necessarily have used money appropriated for other purposes.

4 Comp. Dec. 314, 317 (1897). The relationship between purpose

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violations and the Antideficiency Act is explored further in

Chapter 6.

Brief mention should also be made of the axiom that an agency

cannot do indirectly what it is not permitted to do directly. Thus, an

agency cannot use the device of a contract, grant, or agreement to

accomplish a purpose it could not do by direct expenditure. See

18 Comp. Gen. 285 (1938) (contract stipulation to pay wages in

excess of Davis-Bacon Act rates held unauthorized). See also

B-259499, Aug. 22, 1995 (an agency cannot use an Economy Act

agreement to provide personal services where the ordering agency

is not authorized to contract for personal services).

Similarly, a grant of funds for unspecified purposes would be

improper. 55 Comp. Gen. 1059, 1062 (1976). Settlements cannot

include benefits that the agency does not have authority to provide.

See B-247348, June 22, 1992 (broad authority to provide remedies

for claims arising under Title VII of the Civil Rights Act does not

permit an agency to provide unauthorized benefits). See also

B-239592, Aug. 23, 1991.

Under the principles of statutory construction (discussed in

Chapter 2, The Legal Framework), the purpose statute applies to all

uses of appropriations across the federal government, unless

Congress enacts a more specific statute. This gives the purpose

statute broad applicability across federal agencies and programs.

For example, some federal employees are represented by unions

and those unions negotiate collective bargaining agreements that

include various benefits. Any benefits provided under such an

agreement must be permitted by applicable law, such as the

Federal Service Labor-Management Relations Statute, which sets

forth the framework for collective bargaining of many federal

employees. Applicable legal requirements also include the purpose

statute and any restrictions Congress may enact that pertain to a

particular appropriation.

Accordingly, GAO concluded that the Department of Commerce

could not use its appropriations to purchase disposable cups,

plates, and cutlery for employee use because these items

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constituted personal expenses of employees. B-326021, Dec. 23,

2014. A union representing Department of Commerce employees

asked GAO to reconsider its decision. B-327146, Aug. 6, 2015. The

union asserted that the Federal Service Labor Management Statute

prohibited GAO from rendering a decision on the availability of

appropriations for the personal expenses of federal employees if an

arbitrator has opined on the matter. Id.

The union failed to take into account that GAO’s authority to render

advance decisions derives not from the Federal Service Labor

Management Relations Statute but, rather, from 31 U.S.C. § 3529.

The conclusion that appropriations were unavailable for the

personal expense at issue was well rooted in statute and

precedent. As the Court of Appeals for the District of Columbia

Circuit had previously held:

“Federal collective bargaining is not exempt

from the rule that funds from the Treasury may

not be expended except pursuant to

congressional appropriations. Indeed, the

statute governing federal labor relations

explicitly relieves agencies of the duty to

bargain over any matter that would be

inconsistent with Federal law or any

Government-wide rule or regulation. 5 U.S.C.

§ 7117(a)(1). Therefore, under Section 7117, a

collective bargaining proposal is contrary to

law, and hence not subject to bargaining, if it

requires expenditure of appropriated funds for

a purpose not authorized by law.”

Navy v. Federal Labor Relations Authority, 665 F.3d at 1347.

B. The necessary expense rule and

the three-step analysis

In applying 31 U.S.C. § 1301(a) in a purpose analysis, it is not

expected, nor would it be reasonably possible, that every item of

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expenditure be specified in the appropriation act. Thus, while the

statute sets out a strict principle of appropriations law, defining the

objects for which any particular appropriation was made recognizes

an element of discretion seasoned by a statutory construction

analysis and reference to the common meaning of the words in the

appropriations act and agency program legislation. This concept,

known as the “necessary expense doctrine,” has been around

almost as long as the statute itself. Following is an early yet vital

statement of the rule:

“It is a well-settled rule of statutory

construction that where an appropriation

is made for a particular object, by

implication it confers authority to incur

expenses which are necessary or

proper or incident to the proper

execution of the object, unless there is

another appropriation which makes

more specific provision for such

expenditures, or unless they are

prohibited by law, or unless it is

manifestly evident from various

precedent appropriation acts that

Congress has specifically legislated for

certain expenses of the Government

creating the implication that such

expenditures should not be incurred

except by its express authority.”

6 Comp. Gen. 619, 621 (1927). The Comptroller General has never

established a precise formula for determining the application of the

necessary expense rule. In view of the vast differences among

agencies, any such formula would almost certainly be unworkable.

Rather, the determination must be made essentially on a case-by-

case basis.

In addition to recognizing the differences among agencies when

applying the necessary expense rule, we act to maintain a vigorous

body of case law responsive to the changing needs of government.

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In this regard, our decisions indicate a willingness to consider

changes in societal expectations regarding what constitutes a

necessary expense. This flexibility is evident, for example, in our

analysis of whether an expenditure constitutes a personal or an

official expense. As will be discussed more fully later in the chapter,

use of appropriations for such an expenditure is determined by

continually weighing the benefit to the agency, such as the

recruitment and retention of a dynamic workforce and other

considerations enabling efficient, effective, and responsible

government. We recognize, however, that these factors can change

over time, and are willing to consider empirical evidence on a case-

by-case basis establishing society’s changed expectations of the

American workplace. See, e.g., B-302993, June 25, 2004

(modifying earlier decisions to reflect determination that purchase

of kitchen appliances for use by agency employees in an agency

facility is reasonably related to the efficient performance of agency

activities, provides other benefits such as assurance of a safe

workplace, and primarily benefits the agency, even though

employees enjoy a collateral benefit); B-286026, June 12, 2001

(overruling GAO’s earlier decisions based on reassessment of the

training opportunities afforded by examination review courses);

B-280759, Nov. 5, 1998 (overruling GAO’s earlier decisions on the

purchase of business cards). See also 71 Comp. Gen 527 (1992)

(eldercare is not a typical employee benefit provided to the

nonfederal workforce and not one that the federal workforce should

expect).

The necessary expense rule embodies a three-step analysis:

• The expenditure must bear a logical relationship to the

appropriation sought to be charged. In other words, it must

make a direct contribution to carrying out either a specific

appropriation or an authorized agency function for which more

general appropriations are available.

• The expenditure must not be prohibited by law.

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• The expenditure must not be otherwise provided for, that is, it

must not be an item that falls within the scope of some other

appropriation or statutory funding scheme.

E.g., B-303170, Apr. 22, 2005; 63 Comp. Gen 422, 427–28 (1984);

B-240365.2, Mar. 14, 1996; B-230304, Mar. 18, 1988.

C. Step 1: logical relationship

between the expenditure and the

appropriation

1. Overview of Step 1

a. Expenditure must contribute to

accomplishing the purposes of the

corresponding appropriation

The most important element of this first step is the extent to which

the expenditure will contribute to accomplishing the purposes of the

appropriation the agency wishes to charge. For example:

• Operating appropriations of the Equal Employment Opportunity

Commission (EEOC) are not available to pay the IRS the taxes

due on judgment proceeds recovered by the EEOC in an

enforcement action. While the payment would further a purpose

of the IRS, it would not contribute to fulfilling the purposes of the

EEOC appropriation. 65 Comp. Gen. 800 (1986).

• The procurement of evidence is a necessary expense for an

agency with law enforcement responsibilities. For example,

Forest Service appropriations could be used to pay towing and

storage charges for a truck seized as evidence of criminal

activities in a national forest. B-186365, Mar. 8, 1977. See also

27 Comp. Gen. 516 (1948); 26 Comp. Dec. 780, 783 (1920);

B-56866, Apr. 22, 1946.

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The necessary expense rule does not require that the expenditure

be “necessary” in the sense that the agency cannot achieve the

object of the appropriation without it. However, the expenditure

must be more than merely desirable or even important. E.g.,

34 Comp. Gen. 599 (1955); B-42439, July 8, 1944. Indeed, an

expenditure cannot be justified merely because some agency

official thinks it is a good idea, nor because it would provide general

value to the government or to some social purpose in the abstract

sense, nor simply because it is a practice engaged in by private

business. See United States Dep’t of the Navy v. Fed. Labor Rels.

Auth., 665 F.3d 1339, 1349 (D.C. Cir. 2012); B-288266, Jan. 27,

2003.

If the basic test is the relationship of the expenditure to the

appropriation sought to be charged, it should be apparent that the

“necessary expense” concept is a relative one. As stated in

65 Comp. Gen. 738, 740 (1986):

“We have dealt with the concept of

‘necessary expenses’ in a vast number

of decisions over the decades. If one

lesson emerges, it is that the concept is

a relative one: it is measured not by

reference to an expenditure in a

vacuum, but by assessing the

relationship of the expenditure to the

specific appropriation to be charged or,

in the case of several programs funded

by a lump-sum appropriation, to the

specific program to be served. It should

thus be apparent that an item that can

be justified under one program or

appropriation might be entirely

inappropriate under another, depending

on the circumstances and statutory

authorities involved.”

Application of the necessary expense rule frequently

requires an agency to determine whether a particular

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expenditure constitutes an official expense of the

government or a personal expense of its employees.

When it comes to personal expenses, the public’s

money is not available for that purpose unless

Congress, as a matter of public policy, has enacted

specific, statutory authority or on balance, the

expenditure primarily benefits the agency,

notwithstanding any collateral or incidental benefit to

the employee.

(1) Determining authorized purposes: examine

the language of the appropriation

To find the authorized purposes of an appropriation, first examine

the appropriation act itself. The actual language of the appropriation

act is always of paramount importance in determining the purpose

of an appropriation. For example, an appropriation for topographical

surveys in the United States was not available for topographical

surveys in Puerto Rico. 5 Comp. Dec. 493 (1899). Similarly, an

appropriation to install an electrical generating plant in the

customhouse building in Baltimore could not be used to install the

plant in a nearby post office building, even though the plant would

serve both buildings and thereby reduce operating expenses.

11 Comp. Dec. 724 (1905). An appropriation for the extension and

remodeling of the State Department building was not available to

construct a pneumatic tube delivery system between the State

Department and the White House. 42 Comp. Gen. 226 (1962). An

appropriation to the Department of Labor for payment to the New

York Workers’ Compensation Board for the processing of claims

related to the September 11, 2001, terrorist attack on the World

Trade Center was not available to make payments to other New

York State entities. B-303927, June 7, 2005. And, as noted

previously, an appropriation for the “replacement” of state roads

could not be used to make improvements to them. 41 Comp.

Gen. 255 (1961).

As the cases in the previous paragraph illustrate, the necessary

expense rule does not permit an agency to obligate funds in a

manner that contravenes the plain language of the appropriation.

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The rule does, however, permit an agency to obligate an

appropriation made for a specific object for expenses necessarily

incident to accomplishing that object, unless the expense is

prohibited by law or provided for by another appropriation. For

example, an appropriation to erect a monument at the birthplace of

George Washington could be used to construct an iron fence

around the monument where administratively deemed necessary to

protect the monument. 2 Comp. Dec. 492 (1896). Likewise, an

appropriation to purchase bison for consumption covers the

slaughtering and processing of the bison as well as the actual

purchase. B-288658, Nov. 30, 2001.

Every appropriation has one or more purposes in the sense that

Congress does not provide money for an agency to do with as it

pleases, although purposes are stated with varying degrees of

specificity. Some appropriations, for example, are quite specific:

“[T]he Secretary of the Treasury . . . is

hereby, authorized and directed to pay

to George H. Lott, a citizen of

Mississippi, the sum of one hundred

forty-eight dollars . . . .”

Act of March 23, 1896, ch. 71, 29 Stat. 711.

There is no need to look beyond the language of the appropriation;

it was available to pay $148 to George H. Lott, and for absolutely

nothing else. Language this specific leaves no room for

administrative discretion. For example, language of this type

authorizes only payments to the named individual; it does not

authorize reimbursement to an agency that used its own

appropriation to make the appropriate payment to the same

individual. B-151114, Aug. 26, 1964.

(2) Determining authorized purposes:

examining other statutes

Other appropriations are more general. In an example typical of

smaller agencies, the Consumer Product Safety Commission

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receives but a single appropriation “for necessary expenses of the

Consumer Product Safety Commission.”

As used in this context,

the term “necessary expenses” refers to “current or running

expenses of a miscellaneous character arising out of and directly

related to the agency’s work.” 38 Comp. Gen. 758, 762 (1959);

4 Comp. Gen. 1063, 1065 (1925). One must use the necessary

expense rule to determine whether funds appropriated for a broad

purpose, such as an agency’s “necessary expenses,” “salaries and

expenses,” or “operations and maintenance,” are indeed available

for an given expenditure. The legislation authorizing the

appropriation (if any) as well as the underlying program or organic

legislation will both inform the analysis. For example, the Denali

Commission received an annual appropriation that was broadly

available for “expenses of the Denali Commission.” In light of

Denali’s statutory mission as stated in its authorizing legislation, its

lump sum appropriation was available for grants for bulk fuel

storage tanks for rural Alaskan communities. B-323365, Aug. 6,

2014.

Yet another common form of appropriation funds a single program.

For example, the Interior Department receives a separate

appropriation to carry out the Payments in Lieu of Taxes Act (PILT),

31 U.S.C. §§ 6901–6904.

While the appropriation is specific in the

sense that it is limited to PILT payments and associated

administrative expenses, the appropriation does not define the

scope of the PILT program. Therefore, it is necessary to look

beyond the appropriation language and examine the PILT statute to

determine authorized expenditures.

E.g., Financial Services and General Government Appropriations Act, 2016, Pub. L.

No. 114-113, div. E, 129 Stat. 2242, 2448 (Dec. 18, 2015).

E.g., Department of the Interior, Environment, and Related Agencies Appropriations Act,

2016, Pub. L. No. 114-113, div. G, title I, 129 Stat. 2242, 2541 (Dec. 18, 2015)

(“$452,000,000 shall be available . . . for payments in lieu of taxes under chapter 69 of

title 31, United States Code.”).

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In addition to the appropriations and authorizing legislation that may

apply to a specific agency, other statutes of general applicability

may authorize expenditures of a particular nature. For example,

legislation enacted in 1982 amended 12 U.S.C. § 1770 to authorize

federal agencies to provide various services, including telephone

service, to employee credit unions. Pub. L. No. 97-320, § 515,

96 Stat. 1469, 1530 (Oct. 15, 1982). Prior to this legislation, an

agency would have violated 31 U.S.C. § 1301(a) by providing

telephone service to a credit union, even on a reimbursable basis,

because this was not an authorized purpose under any agency

appropriation. 60 Comp. Gen. 653 (1981). The 1982 amendment

made the provision of special services to credit unions an

authorized agency function, and hence an authorized purpose,

which it could fund from unrestricted general operating

appropriations. 66 Comp. Gen. 356 (1987). Similarly, by statute

agencies have discretion to use appropriated funds to pay the

expenses their employees incur for obtaining professional

credentials. 5 U.S.C. § 5757(a); B-289219, Oct. 29, 2002;

discussed at section C.4.g below. Prior to this legislation, agencies

could not use appropriated funds to pay fees incurred by their

employees in obtaining professional credentials. See, e.g.,

47 Comp. Gen 116 (1967). Other examples are interest payments

under the Prompt Payment Act (31 U.S.C. §§ 3901–3907) and

administrative settlements less than $2,500 under the Federal Tort

Claims Act (28 U.S.C. §§ 2671–2680).

Thus, the analysis under Step 1 of the necessary expense rule

depends heavily upon the relevant statutory authorities, as reflected

both in the pertinent appropriation and in the agency’s authorizing

legislation. “It should thus be apparent that an item that can be

justified under one program or appropriation might be entirely

inappropriate under another, depending on the circumstances and

statutory authorities involved.” 65 Comp. Gen. 738, 740 (1986). For

example, as we will discuss later in this chapter, agencies generally

may not purchase insurance. However, the Federal Bureau of

Investigation could buy insurance on an undercover business, not

so much to insure the property, but to enhance the credibility of the

operation. B-204486, Jan. 19, 1982. Compare B-285066, May 19,

2000 (finding that the Department of Housing and Urban

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Development (HUD) lacked the requisite authorization to use its

appropriations for a gun buyback initiative) with B-285066.2, Aug.

9, 2000 (concluding that HUD’s Office of the Inspector General had

authority to carry out a program to combat violent crime in public

and assisted housing and thus could use an appropriation set aside

for the Inspector General for a gun buyback program).

b. Agency determinations play a role

Analysis of a proposed expenditure under Step 1 of the necessary

expense rule does not require that the object of the appropriation

could not possibly be fulfilled without making a particular

expenditure. Put differently, the expenditure does not have to be

the only way to accomplish a given object, nor does it have to

reflect GAO’s perception of the best way to do it. When considering

an agency’s proposed use of its appropriation, or the propriety of an

obligation or expenditure already incurred, the evaluative standard

GAO uses is summarized in the following passage:

“When we review an expenditure with

reference to its availability for the

purpose at issue, the question is not

whether we would have exercised that

discretion in the same manner. Rather,

the question is whether the expenditure

falls within the agency’s legitimate range

of discretion, or whether its relationship

to an authorized purpose or function is

so attenuated as to take it beyond that

range.”

B-223608, Dec. 19, 1988.

In this opinion, we also voiced a concern about the involvement of the Inspector General

in a program that could impair the Inspector General’s audit and investigative

independence.

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For example, in August 2004, in response to an elevated national

security threat level in Washington, D.C., the Capitol Police

established the Security Traffic Checkpoint Program (STCP), which

consisted of 14 security traffic checkpoints intended to secure all

streets to the two main avenues leading to the Capitol building.

Under this program, Capitol Police officers were required to staff

the 14 checkpoints on a 24-hour, 7-days-a-week basis, with each

officer working 12-hour shifts. During the STCP’s operation, the

Capitol Police incurred approximately $1.5 million in overtime

expenses every pay period. The Capitol Police financed the

overtime expenses related to the program with money transferred

to it from the Emergency Response Fund (ERF), established by

Congress to, among other things, fund counterterrorism measures

and support national security. GAO was asked whether the use of

the ERF for the STCP overtime payments was a proper use of the

ERF appropriation. In concluding that the Capitol Police had

articulated a reasonable nexus between the overtime expenditure

and ERF appropriation charged, GAO stated:

“Law enforcement agencies are entitled

to discretion in deciding how best to

protect our national institutions, such as

the United States Congress, its

Members, staff, and facilities. Here, the

Capitol Police implemented the STCP in

reaction to the heightened terror alert in

August 2004 due to intelligence

information suggesting the strong

possibility of a terrorist attack at the

Capitol Complex . . . The STCP

checkpoints, clearly, were a

counterterrorism measure, and certainly

fall within the very broad scope of

‘supporting national security.’ . . . So

long as the agency’s use of the

appropriation serves one of the . . .

purposes for which the appropriation

was enacted, the agency cannot be said

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to have used the appropriation

improperly.”

B-303964, Feb. 3, 2005, at 5.

A decision on a question of necessary expense therefore involves

(1) analyzing the agency’s appropriations and other statutory

authority to determine whether the purpose is authorized, and

(2) evaluating the adequacy of the administrative justification.

B-205342, Dec. 8, 1981. The agency’s interpretation must be

reasonable and must be based on a permissible construction of the

statute.

See 18 Comp. Gen. 285 (1938) (highlighting that an

agency’s justification “may not transcend the statutes, nor be

exercised in conflict with law, nor for the accomplishment of

purposes unauthorized by the appropriation”).

Cases involving fairs and expositions are illustrative. Occasionally,

Congress enacts specific statutory authority permitting federal

participation in a fair or exposition. For example, Congress

authorized federal participation in HemisFair 1968 in San Antonio.

B-160493, Jan. 16, 1967. As another example, Congress

authorized federal participation in the 1927 International Exposition

in Seville, Spain. 10 Comp. Gen. 563, 564 (1931).

However, an agency need not have specific statutory authority to

participate in a fair or exposition. If participation is in furtherance of

the purposes for which a particular appropriation has been made,

and an appropriate administrative determination is made to that

effect, the appropriation is available for the expenditure. For

example, because the Federal Power Commission had authority to

collect data on the electric industry and to disseminate information,

it could show exhibits at a conference showing information about

A government corporation with the authority to determine the character and necessity of

its expenditures has, by virtue of its legal status, a broader measure of discretion than a

“regular” agency. But even this discretion is not unlimited and is bound at least by

considerations of sound public policy. See 14 Comp. Gen. 755 (1935), aff’d upon

reconsideration, A-60467, June 24, 1936.

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the industry. 16 Comp. Gen. 53 (1936). In another case, the Bureau

of Public Roads could participate in fairs and exhibitions because

its parent agency, the Department of Agriculture, had statutory

authority to “diffuse among the people of the United States useful

information on” the subjects of its lawful work. 7 Comp. Gen. 357

(1927). See also 10 Comp. Gen. 282 (1930); 4 Comp. Gen. 457

(1924).

Authority to disseminate information will generally provide

adequate justification for an agency to participate in a fair or

exposition related to its authorities. E.g., 7 Comp. Gen. 357;

4 Comp. Gen. 457.

In the absence of either statutory authority to participate in a fair or

exposition or an adequate justification under the necessary

expense doctrine, the expenditure, like any other expenditure, is

illegal. Thus, the Department of Housing and Urban Development

(HUD) had no authority to finance participation at a trade exhibition

in the Soviet Union where HUD’s primary purpose was to enhance

business opportunities for American companies. 68 Comp.

Gen. 226 (1989); B-229732, Dec. 22, 1988. Regardless of whether

it may or may not have been a good idea, commercial trade

promotion of American companies is not one of the purposes for

which Congress appropriated money to HUD.

Other examples:

• In 1951, the Interior Department asked whether funds

appropriated to the Bonneville Power Administration (BPA)

could be used to enter into a contract to determine the

feasibility of “artificial nucleation and cloud modification” (also

known as artificial rainmaking) for a portion of the Columbia

River drainage basin. If the amount of rainfall during the dry

season could be significantly increased by this method, the

amount of marketable power for the region would be enhanced.

Naturally, BPA did not have an appropriation specifically

A few early cases purporting to require specific authority, such as 2 Comp. Gen. 581

(1923), must be regarded as implicitly modified by the later cases.

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available for rainmaking. However, in view of BPA’s statutory

role in the sale and disposition of electric power in the region,

GAO concluded that the expenditure was authorized.

B-104463, July 23, 1951.

• “Marauding woodpeckers” were causing considerable damage

to government-owned transmission lines managed by the

Southwestern Power Administration (Southwestern).

Southwestern could use its construction appropriation to buy

guns and ammunition with which to shoot the woodpeckers,

provided that Southwestern made an appropriate administrative

determination that such an expense was necessary to protect

the transmission lines. (The views of the woodpeckers were not

solicited.) B-105977, Dec. 3, 1951. Several years earlier, the

Department of the Interior used its “maintenance of range

improvements” appropriation for the control of coyotes, rodents,

and other “predatory animals.” A-82570, Dec. 30, 1936. See

also A-82570, B-120739, Aug. 21, 1957.

• Demolition of old air traffic control tower which would obstruct

the view from the new one is directly connected with and in

furtherance of the construction of a new tower such that the

Everyone loves a good animal case. Unfortunately, the animals in most GAO decisions

are dead or, as in the cases cited in the text, soon to become dead. Readers interested

more in amusement than precedent might also check out 7 Comp. Gen. 304 (1927)

(removal of a horse “found dead lying on its back in a hole”); 18 Comp. Gen. 109 (1938)

(another dead horse); B-86211, July 26, 1949 (death of hogs allegedly caused by being

fed garbage purchased from Navy installation; it was pointed out that other hogs had

eaten the same government-furnished garbage and managed to survive); B-47255,

Feb. 6, 1945 (burial of three dead bulls); B-37205, Oct. 19, 1943 (mule fell off cable swing

bridge); A-92649, Apr. 22, 1938 (still another dead horse); B-115434-O.M., June 19, 1953

(agency borrowed a bull from another agency for breeding purposes, then had it

slaughtered when it became vicious); 70 Comp. Gen. 720 (1991) (rate of fish migration

measured by fisherman returning government fish tags—from fish presumed dead or to

have at least had a very bad day); but see B-318386, Aug. 12, 2009 (agency devised

plans to help save endangered ducks being targeted by hunters due to a deadly case of

mistaken identity). Insects do not escape either. See 34 Comp. Gen. 236 (1954)

(grasshopper control in national forests).

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demolition expenses are covered by Federal Aviation

Administration’s appropriation act for tower construction.

B-286457, Jan. 29, 2001.

The availability of appropriations to settle claims and to pay money

judgments is discussed in Chapter 14, “Claims against and by the

Government.”

2. New or additional duties

Occasionally, Congress may enact a statute that imposes new

duties on an agency but that does not provide any additional

appropriations. In such instances, existing agency appropriations

that generally cover the type of expenditures involved are available

to defray the expenses of the new or additional duties. The test for

availability is whether the duties imposed by the new law bear a

sufficient relationship to the purposes for which the previously

enacted appropriation was made, so as to justify the use of that

appropriation for the new duties. This test simply applies Step 1 of

the necessary expense rule to this specific category of cases.

For example, in the earliest published decision cited for the rule, the

Securities and Exchange Commission could use its general

operating appropriation for fiscal year 1936 to perform additional

duties imposed upon it by a statute enacted subsequent to the

enactment of the appropriation. 15 Comp. Gen. 167 (1935).

Similarly, the Interior Department could use its 1979 “Departmental

Management” appropriation to begin performing duties imposed by

two subsequently enacted statutes. B-195007, July 15, 1980. In

another case, a statute directing the Department of Health and

Human Services (HHS) to make payments to qualified health plans

did not, by its terms, enact an appropriation to make those

payments. However, because HHS was responsible for making the

payments, amounts appropriated to an HHS component agency for

authorized programs were available to make the payments.

B-325630, Sept. 30, 2014. See also B-290011, Mar. 25, 2002;

30 Comp. Gen. 205 (1950); B-211306, June 6, 1983; 54 Comp.

Gen. 1093 (1975); B-153694, Oct. 23, 1964. The rule also applies

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to additional duties imposed by executive order. 32 Comp.

Gen. 347 (1953); 30 Comp. Gen. 258 (1951).

A related question is the extent to which an agency may use

current appropriations for preliminary administrative expenses in

preparation for implementing a new law, prior to the receipt of

substantive appropriations for the new program. Again, the

appropriation is available provided it is sufficiently broad to

embrace expenditures of the type contemplated. Thus, the National

Science Foundation could use its fiscal year 1967 appropriations

for preliminary expenses of implementing the National Sea Grant

College and Program Act of 1966,

enacted after the appropriation,

since the purposes of the new act were similar to the purposes of

the appropriation. 46 Comp. Gen. 604 (1967). The preliminary

tasks in that case included such things as development of policies

and plans, issuance of internal instructions, and the establishment

of organizational units to administer the new program. Similarly, the

Bureau of Land Management could use current appropriations to

determine fair market value and to initiate negotiations with owners

in connection with the acquisition of mineral interests under the

Cranberry Wilderness Act,

even though actual acquisitions could

not be made until funding was provided in appropriation acts.

B-211306, June 6, 1983. See also B-153694, Oct. 23, 1964;

B-153694, Sept. 2, 1964.

Of course, an appropriation is not available for the preparatory

costs of new programs if Congress has prohibited the agency from

using it. For example, a statute specifically barred the Department

of Energy from using funds made available under an Energy and

Water Development Appropriations Act to implement or finance any

authorized loan guarantee program unless specific provision had

been made for that program in an appropriations act. Since no

provision was made, Energy could not use the Energy and Water

Pub. L. No. 89-688, 80 Stat. 998 (Oct. 15, 1966).

Pub. L. No. 97-466, 96 Stat. 2538 (Jan. 13, 1983).

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appropriation to begin implementing the loan guarantee program.

B-308715, Apr. 20, 2007.

As discussed in Chapter 2, The Legal Framework, agencies may

transfer funds from one appropriation to another only if authorized

by specific statutory authority. 31 U.S.C. § 1532. The prohibition on

transfers bars an agency from using one appropriation to reimburse

another unless there is specific statutory authority to do so. In

accordance with the principles described above, an agency might

use an existing appropriation to carry out new or additional duties.

Should Congress later make a new appropriation specifically

available to carry out the new or additional duties, the prohibition

against transfers bars the agency from using the new appropriation

to reimburse the one initially used to carry out the duties. 30 Comp.

Gen. 258 (1951); B-290011, supra.

3. Termination of program

Step 1 of the necessary expense rule has a critical role when

determining whether an appropriation is available to terminate a

program.

a. Termination desired by the agency

When Congress appropriates money to implement a program, and

implementation of the program is mandatory, the agency may not

use the appropriated amounts to terminate the program.

For

example, in 1973 the administration attempted to terminate certain

programs funded by the Office of Economic Opportunity (OEO),

relying in part on the fact that it had not requested any funds for

OEO for the following fiscal year. The programs in question were

funded under a multiple-year authorization that directed that the

programs be carried out during the fiscal years covered by the

authorization. The U.S. District Court for the District of Columbia

Program termination expenses may include such expenses as contract termination

costs and personnel reduction-in-force expenses.

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held that funds appropriated to carry out the programs could not be

used to terminate them. Local 2677, American Federation of

Government Employees v. Phillips, 358 F. Supp. 60 (D.D.C. 1973).

The court cited 31 U.S.C. § 1301(a) as one basis for its holding. Id.

at 76 n.17. See also 63 Comp. Gen. 75, 78 (1983).

Where the program is non-mandatory, the agency must apply

Step 1 of the necessary expense rule: termination is permissible if

the termination is reasonably necessary to accomplish an

authorized purpose. For example, the Air Force could terminate B-1

bomber production, as it had been funded under a lump-sum

appropriation and was not mandated by any statute. B-115398,

Aug. 1, 1977. Later cases have stated the rule that an agency may

use funds appropriated for a program to terminate that program

where (1) the program is non-mandatory, and (2) the termination

would not result in curtailment of the overall program to such an

extent that it would no longer be consistent with the scheme of

applicable program legislation. 61 Comp. Gen. 482 (1982)

(Department of Energy could use funds appropriated for fossil

energy research and development to terminate certain fossil energy

programs); B-203074, Aug. 6, 1981. Several years earlier, GAO

had held that the closing of all Public Health Service hospitals

would exceed the Surgeon General’s discretionary authority

because a major portion of the Public Health Service Act would

effectively be inoperable without the Public Health Service hospital

system. B-156510, Feb. 23, 1971; B-156510, June 7, 1965.

b. Reauthorization pending

Another variation on the use of appropriated funds for program

termination occurs when an entity’s enabling legislation is set to

expire and Congress shows the intention of extending or

reauthorizing the entity, but has not yet provided funds or authority

to continue. For example, the U.S. Advisory Commission on

Intergovernmental Relations (ACIR) was statutorily authorized to

give continuing attention to intergovernmental problems. In 1995,

ACIR was statutorily terminated effective September 30, 1996.

About 2 months before ACIR was to terminate, Congress enacted

legislation giving ACIR a new responsibility, to provide research

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and a report under a contract with the National Gambling Impact

Study Commission. Although Congress continued ACIR’s existence

beyond fiscal year 1996 for the limited purpose of providing

research for the Gambling Commission, Congress appropriated no

funds for fiscal year 1997. ACIR had separate statutory authority,

42 U.S.C. § 4279, to receive and expend unrestricted contributions

made to ACIR from state governments. GAO concluded that this

statute constituted an appropriation (a permanent, indefinite

appropriation

) separate from ACIR’s annually enacted fiscal year

appropriation, and that from October 1, 1996, until such time as

ACIR was awarded the research contract, ACIR could use its

unconditional state government contributions. B-274855, Jan. 23,

1997.

Occasionally, an entity’s authorizing legislation is set to terminate

and Congress provides an appropriation, but does not reauthorize

the entity until months later. For example, the U.S. Commission on

Civil Rights was set to terminate by operation of law on

September 30, 1991. 71 Comp. Gen. 378 (1992). The Commission

was not reauthorized until November 26, 1991. However, during the

interim and prior to the expiration date, Congress provided the

Commission with appropriations for fiscal year 1992. In general,

once a termination or sunset provision for an entity becomes

effective, the agency ceases to exist and no new obligations may

be incurred after the termination date.

In this case, however, the

enactment of an appropriation subsequent to the statutory

termination date made clear that Congress intended for the

Commission to continue to operate after September 30, 1991. The

specific appropriation provided to the Commission served to

suspend its termination until the Commission was reauthorized.

See Chapter 2 for a discussion of permanent, indefinite appropriations.

71 Comp. Gen. at 380 n.7, citing inter alia B-182081, Jan. 26, 1977, aff’d upon

reconsideration, B-182081, Feb. 14, 1979.

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4. Personal expenses must primarily

benefit the government

a. Introduction

The general rule is that appropriated funds are not available for

personal expenses. In exchange for their labors, the federal

government pays its employees a salary. In the absence of contrary

statutory authority, employees are expected to use this salary,

rather than appropriations, to satisfy their personal needs. For

example, employees are expected to feed themselves using their

own funds, not the public’s money. Employees must bear the costs

of commuting to and from their official duty stations each day, and

must also bear the costs necessary to present themselves to the

government with the professional licenses that are necessary to

perform their work. These expenses that government employees

are expected to bear from their own salaries are known as

“personal expenses.”

As we will discuss in this section, occasionally appropriations are

available for personal expenses because Congress has enacted

specific statutory authority. Examples include some child care

costs, some commuting expenses, and some apparel; we will

discuss these statutes in this section. In the absence of such

authority, the expense may be permissible under the necessary

expense rule. Application of the necessary expense rule in these

cases involves a refinement particular to personal expenses: in the

absence of express statutory authority, an agency’s appropriation is

available for personal expenses only upon a documented legal

determination that the expense is an essential, constituent part of

the effective accomplishment of a statutory responsibility,

notwithstanding the collateral benefit to the individual. B-325023,

July 11, 2014. As one would expect of any agency legal

determination, a finding that appropriations are available for a

personal expense must be rooted in a sound interpretation of

applicable statutes as well as in the sound application of relevant

legal precedents. For personal expenses, these legal precedents

include the decisions of the Comptroller General, as they are

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issued pursuant to and are informed by his statutory authority to

settle the accounts of the United States government. 31 U.S.C.

§ 3526. As the decisions have consistently shown, this test

imposes a high bar and renders appropriations unavailable for most

personal expenses. In the absence of specific statutory

authorization, appropriations are available for personal expenses

only rarely.

Whether appropriations are available to purchase food is such a

common question that is the focus of so much case law that it has

earned its own section; see section C.5 below.

b. Apparel

The starting point is the principle that “every employee of the

Government is required to present himself for duty properly attired

according to the requirements of his position.” 63 Comp. Gen. 245,

246 (1984), quoting from B-123223, June 22, 1955. In other words,

the government will not clothe the naked, at least where the naked

are receiving government salaries.

Nevertheless, there are certain out-of-the-ordinary items, required

by the nature of the job, which the government should furnish. The

test was described in 3 Comp. Gen. 433 (1924), and that

discussion is still relevant today:

“In the absence of specific statutory

authority for the purchase of personal

equipment, particularly wearing apparel

or parts thereof, the first question for

consideration in connection with a

proposed purchase of such equipment

is whether the object for which the

appropriation involved was made can be

accomplished as expeditiously and

satisfactorily from the Government’s

standpoint, without such equipment. If it

be determined that use of the equipment

is necessary in the accomplishment of

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the purposes of the appropriation, the

next question to be considered is

whether the equipment is such as the

employee reasonably could be required

to furnish as part of the personal

equipment necessary to enable him to

perform the regular duties of the position

to which he was appointed or for which

his services were engaged. Unless the

answer to both of these questions is in

the negative, public funds can not be

used for the purchase. In determining

the first of these questions there is for

consideration whether the Government

or the employee receives the principal

benefit resulting from use of the

equipment and whether an employee

reasonably could be required to perform

the service without the equipment. In

connection with the second question the

points ordinarily involved are whether

the equipment is to be used by the

employee in connection with his regular

duties or only in emergencies or at

infrequent intervals and whether such

equipment is assigned to an employee

for individual use or is intended for and

actually to be used by different

employees.”

Id. at 433–34. Under the rule set forth in 3 Comp. Gen. 433, most

items of apparel were held to be the personal responsibility of the

employee. E.g., 5 Comp. Gen. 318 (1925) (rubber boots and coats

for custodial employees in a flood-prone area); 2 Comp. Gen. 258

(1922) (coats and gloves for government drivers). But there were

limited exceptions. Thus, caps and gowns for staff workers at Saint

Elizabeth’s Hospital in Washington were viewed as for the

protection of the patients rather than the employees and could

therefore be provided from appropriated funds as part of the

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hospital equipment. 2 Comp. Gen. 652 (1923). See also 5 Comp.

Gen. 517 (1926) (shoes and suits for hospital interns). Similarly,

aprons for general laboratory use were held permissible in 2 Comp.

Gen. 382 (1922). Another exception was wading trousers for

Geological Survey engineers as long as the trousers remained the

property of the government and were not for the regular use of any

particular employee. 4 Comp. Gen. 103 (1924). One category of

apparel not permissible under the early decision was uniforms.

Uniforms were viewed as personal furnishings to be procured at the

expense of the wearer. 24 Comp. Dec. 44 (1917).

Business attire is a personal expense of government employees.

For example, appropriations were not available to buy business

suits worn by Agency for International Development chauffeurs.

Such suits are not uniforms under section 636(a)(12) of the Foreign

Service Act of 1961 (22 U.S.C. § 2396(a)(12)) since they are worn

as a part of customary business attire and provide no distinctive

identification of the employees as a group. As such, the suits are a

personal expense of the employees. B-251189, Apr. 8, 1993.

Similarly, formal wear for official events is also a personal expense

of employees. In one case, an employee on travel status in

England rented a dinner jacket to attend a dinner related to the

purposes of the trip. Based on the rule of 3 Comp. Gen. 433, the

Comptroller General denied reimbursement for the cost of renting

the jacket. 35 Comp. Gen. 361 (1955). “The claimant’s failure to

take with him necessary clothing to meet reasonably anticipated

personal necessities is not considered sufficient to shift the burden

of the cost of procuring such clothing from personal to official

business.” Id. at 362. This decision was followed in a similar

situation involving the rental of a tuxedo in 45 Comp. Gen. 272

(1965), and again in 64 Comp. Gen. 6 (1984). See also 67 Comp.

Gen. 592 (1988) (advising agency to resolve certain conflicting

information and pay or deny a claim for a rental tuxedo

accordingly).

Our office has recognized two exceptions to the formal attire rule.

First, we have allowed payment “when the use of formal attire was

necessary for the proper performance of the employee’s duties

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beyond merely being attired in a socially acceptable manner.” Thus,

appropriated funds could be used to pay for rental of formal wear

for Secret Service agents when needed for security purposes, i.e.,

to be less readily identified as a security agent. 48 Comp. Gen. 48

(1968). Second, if formal wear is not a usual part of an employee’s

wardrobe and is only rarely required to perform official duties, then

appropriated funds may be used. 67 Comp. Gen. at 593. For

example, the Justice Department could rent morning coats for

attorneys assigned to argue before the Supreme Court. The

wearing of formal attire was necessary for the proper performance

of an attorney’s assigned duties. Since individual attorneys were

required only occasionally to appear before the Court it would be

unreasonable to expect them to purchase such formal attire.

B-164811, July 28, 1969.

For those reasons, we concluded that the White House

Communications Agency may use appropriated funds to purchase

or rent formal attire for WHCA military personnel attending formal

events. The personnel are required to blend in with other attendees

for security and communication purposes. Also, WHCA personnel

only attend one or two formal events in a calendar year. B-247683,

July 6, 1992. Similarly, the Department of State could use its

representation appropriation funds to reimburse rental costs for

formal morning attire required by Ambassador and Deputy Chief of

Mission in representing the United States on occasions of State in

Great Britain. B-256936, June 22, 1995.

Finally, the rules we have been discussing for wearing apparel

apply to government employees. Questions may arise with respect

to nongovernment employees, in which event the answer is a pure

application of the necessary expense doctrine, in light of whatever

statutory authority may exist. For example, the State Department

was administering a training program for citizens of the Philippines

to assist in post-war rehabilitation. The government could provide

“special purpose” clothing required for the training, such as

uniforms, overalls, or work aprons. However, this could not include

the furnishing of complete wardrobes adaptable to the cooler

climate of the United States; this was a personal expense.

B-62281, Dec. 27, 1946. See also 29 Comp. Gen. 507 (1950)

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(clothing for indigent narcotic patients upon release from Public

Health Service Hospitals, as therapeutic measure to aid

rehabilitation).

Though the general rule is that government employees must clothe

themselves in appropriate attire, Congress has enacted three

general

statutory exceptions to this rule: (1) 5 U.S.C. § 7903,

which allows agencies to purchase “special clothing and equipment

for the protection of personnel”; (2) the Federal Employees Uniform

Act; and (3) the Occupational Safety and Health Act of 1970. We

discuss these three statutes below. Two decisions summarizing all

three statutes are 63 Comp. Gen. 245 (1984) and B-289683,

Oct. 7, 2002.

(1) 5 U.S.C. § 7903

Congress enacted 5 U.S.C. § 7903 as part of the Administrative

Expenses Act of 1946. It provides:

“Appropriations available for the

procurement of supplies and material or

equipment are available for the

purchase and maintenance of special

clothing and equipment for the

protection of personnel in the

performance of their assigned tasks. For

the purpose of this section,

‘appropriations’ includes funds made

available by statute [to wholly owned

government corporations].”

Id. (explanatory information provided). In order for an item to be

authorized by 5 U.S.C. § 7903, three tests must be met: (1) the

item must be “special” and not part of the ordinary and usual

Some agencies also have specific authority to provide uniforms or clothing allowances

to their employees. See, e.g., 10 U.S.C. §§ 775, 1593; 22 U.S.C. §§ 1474(14),

2396(a)(12), 2669(e); 37 U.S.C. §§ 415–419.

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furnishings an employee may reasonably be expected to provide

for himself; (2) the item must be for the benefit of the government;

that is, essential to the safe and successful accomplishment of the

work, and not solely for the protection of the employee, and (3) the

employee must be engaged in hazardous duty. See 32 Comp.

Gen. 229 (1952); B-193104, Jan. 9, 1979. Thus, this provision is

but a slight liberalization of the rule in 3 Comp. Gen. 433.

Applying 5 U.S.C. § 7903, the Comptroller General has held that

raincoats and umbrellas for employees who must frequently go out

in the rain are not special equipment but are personal items that the

employee must furnish. B-193104, Jan. 9, 1979; B-122484,

Feb. 15, 1955. Similarly unauthorized are coveralls for mechanics

(B-123223, June 22, 1955) and running shoes for Department of

Energy nuclear materials couriers (B-234091, July 7, 1989). Nor

does 5 U.S.C. § 7903 authorize reimbursement for ordinary clothing

and toiletry items purchased by narcotics agents on a “moving”

surveillance. B-179057, May 14, 1974.

An illustration of the type of apparel authorized by 5 U.S.C. § 7903

is found in 51 Comp. Gen. 446 (1972). There, the Comptroller

General advised the Department of Agriculture that snowmobile

suits, mittens, boots, and crash helmets for personnel required to

operate snowmobiles over rough and remote forest terrain were

clearly authorized by the statute. Similarly authorized are down-

filled parkas for Office of Surface Mining employees temporarily

assigned to Alaska or the high country of the western states.

63 Comp. Gen. 245 (1984). Conversely, the purchase of insulated

coveralls by the U.S. Army Corps of Engineers for the use of

employees working outdoors in near-freezing temperatures would

be an improper use of appropriated funds, absent the agency’s

determination that such cold weather clothing is necessary to

satisfy Occupational Safety and Health Act standards, discussed in

The distinction between this case and the “foul weather” cases cited in the preceding

paragraph is that an employee is expected to provide his or her own clothing suitable for

the climate in which the employee normally works or resides. See B-230820, Apr. 25,

1988 (nondecision letter).

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more detail below. B-289683, Oct. 7, 2002; B-288828, Oct. 3, 2002.

The decision notes that “the weather encountered on the job is no

different from that encountered by millions in the midwest during

their day-to-day activities” and that the Corps was providing

sheltered or heated enclosures for employees. Id. Thus, cold

weather clothing is generally a personal expense of the employee.

Items other than wearing apparel may be furnished under 5 U.S.C.

§ 7903 if the tests set forth above have been met. For example, an

agency may purchase prescription ground safety glasses for

employees engaged in hazardous duties. The glasses become and

remain property of the government. The government can also pay

the cost of related eye refraction examinations in limited

circumstances. 51 Comp. Gen. 775 (1972). See also, e.g.,

28 Comp. Gen. 236 (1948) (mosquito repellent for certain Forest

Service employees).

(2) Federal Employees Uniform Act

The second statutory provision that authorizes the purchase of

apparel is 5 U.S.C. § 5901, the so-called Federal Employees

Uniform Act.

This provision authorizes annual appropriations to

each agency, on a showing of necessity or desirability, to provide a

uniform allowance of up to $400 a year (or more if authorized under

Office of Personnel Management regulations) to each employee

who wears a uniform in the performance of official duties. The

agency may pay a cash allowance or may furnish the uniform.

The Federal Employees Uniform Act was enacted in 1954 and has been amended

many times. Pub. L. No. 764, title IV, §§ 401-404, 68 Stat. 1105, 1114–15 (Sept. 1, 1954),

codified at 5 U.S.C. § 5901. The Comptroller General previously held that 5 U.S.C. § 7903

does not constitute general authority for the purchase of uniforms. 32 Comp. Gen. 229

(1952).

While the uniform allowance under 5 U.S.C. § 5901 may be in cash or in kind, there is

no similar option for “special clothing or equipment” under 5 U.S.C. § 7903. The latter

statute authorizes the furnishing of covered items in kind only. 46 Comp. Gen. 170 (1966).

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Note that 5 U.S.C. § 5901 is merely an authorization of

appropriations. An appropriation is still required in order for

payments to be made or obligations incurred. 35 Comp. Gen. 306

(1955). While the decision stated that specific appropriation

language is preferable, it recognized that the inclusion of an item

for uniforms in an agency’s budget request that is then incorporated

into a lump-sum appropriation is legally sufficient.

An example of an item that could properly be required under

5 U.S.C. § 5901 is frocks for Department of Agriculture meat grader

employees. 57 Comp. Gen. 379, 383 (1978). Another example is

robes for administrative law judges of the Occupational Safety and

Health Review Commission. B-199492, Sept. 18, 1980. (The

decision concluded merely that the expenditure would be legal, not

that it was an especially good idea, pointing out that federal judges

pay for their own robes.)

The annual cash limitation in 5 U.S.C. § 5901 applies to the

particular position. For example, a National Park Service employee

was given a uniform allowance but, in less than a year, was

promoted to a higher position that required substantially different

uniforms. The Comptroller General held that the employee could

receive the uniform allowance of his new position even though the

sum of the two allowances would exceed the statutory annual

ceiling. The employee should be regarded as having commenced a

new one-year period on the date he was promoted. To hold

otherwise would have been inconsistent with the statutory purpose.

48 Comp. Gen. 678 (1969).

(3) The Occupational Safety and Health Act of

1970

The third piece of legislation which may permit the purchase of

items of apparel from appropriated funds is the Occupational Safety

and Health Act of 1970 (OSHA). Section 19 of OSHA, 29 U.S.C.

§ 668, requires each federal agency to establish an occupational

safety and health program and to acquire necessary safety and

protective equipment. Thus, protective clothing may be furnished by

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the government if the agency head determines that it is necessary

under OSHA and its implementing regulations.

Under the OSHA authority, the following items have been held

permissible:

• Snowmobile suits, mittens, boots, and crash helmets for

Department of Agriculture employees required to operate

snowmobiles over rough and remote terrain. 51 Comp.

Gen. 446 (1972). (This decision has already been noted in the

discussion of 5 U.S.C. § 7903 at section C.4.b(1) above. The

decision held that the items were justifiable on either basis.)

• Down-filled parkas for Interior Department employees

temporarily assigned to Alaska or the high country of the

Western states during the winter months. 63 Comp. Gen. 245

(1984). (This decision is also noted under the discussion of

5 U.S.C. § 7903 at section C.4.b(1) above. As with 51 Comp.

Gen. 446, the items could be justified under either statute.)

• Protective footwear for Drug Enforcement Administration agents

assigned to temporary duty in jungle environments. The

footwear remains the property of the United States and must be

disposed of in accordance with the Federal Property

Management Regulations. B-187507, Dec. 23, 1976.

• Cooler coats and gloves for Department of Agriculture meat

grader employees. 57 Comp. Gen. 379 (1978).

• Ski boots for Forest Service snow rangers, where determined to

be necessary protective equipment in a job-hazard analysis.

B-191594, Dec. 20, 1978.

• Steel-toe safety shoes for an Internal Revenue Service supply

clerk whose work includes moving heavy objects. 67 Comp.

Gen. 104 (1987). This item also could have been justified under

5 U.S.C. § 7903. Id.

If an item is authorized under OSHA, it is unnecessary to determine

whether it meets the tests under 5 U.S.C. § 7903. E.g., B-187507,

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Dec. 23, 1976. As noted in the above listing, however, several of

the decisions have discussed both statutes. If an item does not

qualify under OSHA, it is still necessary to examine the other

possibilities. E.g., B-234091, July 7, 1989 (running shoes

unauthorized under either statute).

c. Child care; elder care

Child care expenses incurred by federal employees in the course of

official travel or relocation are not reimbursable since neither the

governing statutes nor the Federal Travel Regulations authorize

such an entitlement. B-246829, May 18, 1992.

In contrast, Congress has enacted statutes pertaining to the

provision of child care in federal workplaces. Prior to the enactment

of more general legislation in 1985, some agencies had authority to

provide day care facilities under agency-specific legislation. For

example, legislation authorized the then Department of Health,

Education, and Welfare to donate space for day care centers.

The

statute’s use of the term “donate” gave the Department discretion to

provide the space without charge, or to lease space in other

buildings for that purpose if suitable space was not available in

buildings the agency already occupied. 57 Comp. Gen. 357 (1978).

In 1985, Congress enacted former 40 U.S.C. § 490b,

now codified

at 40 U.S.C. § 590, which authorizes, but does not require, federal

agencies to provide space and services for child care centers. The

term “services” is defined as including “lighting, heating, cooling,

electricity, office furniture, office machines and equipment,

classroom furnishings and equipment, kitchen appliances,

playground equipment, telephone service (including installation of

Education Amendments of 1976, Pub. L. No. 94-482, § 524, 90 Stat. 2081, 2240

(Oct. 12, 1976), codified at 20 U.S.C. § 2564.

Pub. L. No. 99-190, § 139, 99 Stat. 1185, 1323 (1985).

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lines and equipment . . .), and security systems . . . .”

Id.

§ 590(c)(1). The space and services may be provided with or

without charge. See 67 Comp. Gen. 443 (applying provisions of

former 40 U.S.C. § 490b).

Former 40 U.S.C. § 490b did not preclude the General Services

Administration from leasing space or constructing buildings for child

care facilities if there is insufficient space available in existing

federal buildings. 70 Comp. Gen. 210 (1991). The authority in

section 490b to use existing space was not exclusive. (The 1988

decision to the Air Force, 67 Comp. Gen. 443, had expressed a

contrary view and was overruled to that extent.) In another case,

the Forest Service could use its appropriations to pay a consultant

for services rendered to a Forest Service-supported child care

center on Forest Service premises. 73 Comp. Gen. 336 (1994).

Under former section 490b and a recurring appropriation act

provision that permitted payment of expenses (predecessor to

40 U.S.C. § 590(d)(2), discussed below), Forest Service funds were

available to pay “start-up/support costs” for the day care facility,

including consultant services.

In 1998, Congress made permanent a recurring appropriation act

provision authorizing reimbursement of “travel, transportation, and

subsistence expenses incurred for training classes, conferences, or

other meetings” in connection with the provision of child care

services. Pub. L. No. 105-277, div. A, § 101(h), title VI, § 603,

112 Stat. 2681-480, 2681-513 (Oct. 21, 1998). This statute is now

codified at 40 U.S.C. § 590(d)(2).

Similarly, in 2001, Congress made permanent another recurring

provision that made appropriated funds available “to improve the

affordability of child care for lower income Federal employees.”

Pub. L. No. 107-67, § 630, 115 Stat. 514, 552–53 (Nov. 12, 2001).

This statute is now codified at 40 U.S.C. § 590(g). Pursuant to

The definition was patterned generally after the statute authorizing agencies to provide

space to federal credit unions, classified at 12 U.S.C. § 1770, discussed in 66 Comp.

Gen. 356 (1987).

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statutory authority granted in 40 U.S.C. § 590(g)(2), the Office of

Personnel Management promulgated implementing regulations.

5 C.F.R. pt. 792, subpt. B.

Congress enacted new child care legislation for the armed forces,

including the authority to use fees collected from parents, in late

1989. Military Child Care Act of 1989, Pub. L. No. 101-189, div. A,

title XV, 103 Stat. 1352, 1589 (Nov. 29, 1989). This provision was

revised and recodified by Pub. L. No. 104-106, § 568, 110 Stat.

186, 329–336 (Feb. 10, 1996), which added new legislation

governing Department of Defense child care programs.

10 U.S.C.

§ 1791-1800.

In the absence of specific statutory authority, appropriated funds

are not available to provide “eldercare” facilities for adult relatives of

federal employees. 71 Comp. Gen. 527 (1992). The costs of caring

for one’s elder relatives normally are considered a personal

expense. An agency may not use appropriated funds to pay for

items of personal expense unless there is specific statutory

authority to do so, and Congress had provided no such authority for

elder care. Because Congress had provided specific authority for

the provision of similar benefits to federal employees (such as child

care) and because elder care was not a “typical benefit offered the

American work force,” it was apparent that it was “for the Congress

to decide whether agency appropriations can be used to support

eldercare centers.” Id. Accordingly, without statutory authorization,

IRS could not use its appropriation to pay start-up and operating

costs for an eldercare center. IRS’s appropriated funds were

available, however, “to implement a resource and referral service

on eldercare issues” under the authority of 5 U.S.C. § 7901, which

authorizes “preventive programs related to health.” Id. at 530.

Implementation of the DOD program is discussed in GAO, Military Child Care: DOD is

Taking Actions to Address Awareness and Availability Barriers, GAO-12-21 (Washington,

D.C.: Feb. 3, 2012).

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As of 2016, more than 100 independently-operated child care

centers are located in GSA-managed facilities.

For instance, in

the National Capital Region, there are “Children’s House” (HUD),

“Diplotots” (State Department), and “Just Us Kids” (Department of

Justice).

GAO manages a child care center in its headquarters

building as well; it’s called “Tiny Findings.” (Get it?)

d. Commuting and parking

One personal expense everyone is familiar with is commuting to

and from work (more precisely, between permanent residence and

permanent duty location). The employee is expected to be at work;

how the employee chooses to get there is entirely his or her own

business. 27 Comp. Gen. 1 (1947); 16 Comp. Gen. 64 (1936).

As a general rule, then, employees must bear the costs of

transportation between their residences and official duty locations.

Congress has authorized agencies to use appropriations for “the

maintenance, operation, or repair of any passenger carrier,” but

“only to the extent that such carrier is used to provide transportation

for official purposes.” 31 U.S.C. § 1344(a)(1). It has specified that

“transporting any individual . . . between such individual’s residence

and such individual’s place of employment is not transportation for

an official purpose.” Id.

For example, the United States Capitol Police (USCP) could not

use appropriated funds for a shuttle bus service from its parking lot

to a new USCP facility or any other USCP building, where the only

purpose of the shuttle service is to facilitate the commutes of USCP

employees. The employee’s arrival at the parking lot is an

GSA, Child Care Services, available at www.gsa.gov/portal/category/108059 (last

visited Feb. 17, 2017).

GSA, National Capital Region (11) Child Care Centers, available at

www.gsa.gov/portal/content/101942

(last visited Feb. 17, 2017).

This is the case even when unusual conditions, such as a transit strike, may increase

commuting costs. 60 Comp. Gen 633, 635 (1981).

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intermediate stop—like a subway or bus stop—within the totality of

the commute from home to office. Therefore, the trip from the

parking lot to the new USCP facility is part of the employee’s

commute and a personal expense. GAO noted that there would be

no objection to the use of appropriated funds for a shuttle bus from

USCP headquarters to the new facility and other USCP buildings,

so long as USCP established a legitimate operational need to

shuttle persons among those buildings and its purpose is not to aid

employees’ commutes. If USCP established a legitimate

operational need for shuttle service among USCP buildings, there

would also be no objection to any incidental use of the service by

USCP employees to complete their home-to-work commutes,

provided, of course, that there is no additional expenditure of time

or money by the government in order to accommodate these riders.

B-305864, Jan. 5, 2006. See also B-320116, Sept. 15, 2010

(appropriations are not available to pay for vehicle battery

recharging stations for the privately owned hybrid or electric

vehicles of employees or Members of Congress without legislative

authority; recharging stations would facilitate commuting between

home and work, which is a personal expense); B-318229, Dec. 22,

2009 (agency appropriations were not available to pay for local

lodging as a reasonable accommodation under the Rehabilitation

Act since the local travel was more akin to a commute, which is not

covered by the act).

Although generally agencies may not pay commuting costs,

agencies may exercise administrative discretion and provide

transportation on a temporary basis when there is a clear and

present danger to government employees or an emergency

threatens the performance of vital government functions. 62 Comp.

Gen 438, 445 (1983). Under 31 U.S.C. § 1344(b)(9), an agency

may provide for home-to-work transportation for an employee if the

agency head determines that “highly unusual circumstances

present a clear and present danger, that an emergency exists, or

that other compelling operational considerations make such

transportation essential to the conduct of official business.”

Section 1344(b)(9) also stipulates, however, that exceptions

granted under it must be “in accordance with” 31 U.S.C. § 1344(d),

which limits emergency exceptions to periods of up to 15 calendar

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days, subject to periodic renewal for up to a total of 180 additional

calendar days, under specified detailed procedures.

GAO considered the provisions in 31 U.S.C. § 1344 in B-307918,

Dec. 20, 2006. The National Logistic Support Center (NLSC) was

created by the National Oceanic and Atmospheric Administration to

maintain a stockpile warehouse and ship replacement parts and

equipment crucial to ensuring the proper functioning of equipment

in the weather forecasting stations across the country. Since NLSC

receives between 200 and 400 requests each year for emergency

service outside of normal office hours, NLSC schedules employees

to attend to these emergency, after-hours service requests on an

“on-call” basis. When NLSC receives a request for after-hours

emergency service, it notifies the on-call employees who return

from their homes to their NLSC offices to respond to the requests,

prepare the required parts for shipment to the affected weather

station, deliver them to the shipping vendor, and return home. GAO

determined that the prohibition in 31 U.S.C. § 1344(a)(1) precluded

NLSC from using appropriated funds to reimburse its employees for

the mileage between their residences and their NLSC offices since

the statute precludes the payment of commuting expenses

regardless of whether it is incident to a regular work schedule or the

on-call work schedule described here. The emergency exception

recognized in 31 U.S.C. §§ 1344(b)(9) and (d) did not apply

because it is limited to brief, specific periods and NLSC’s proposal

contemplated reimbursing the on-call employees for commuting

costs on a continual basis—without limit or end date.

The detailed procedures require agencies to make written determinations that name

the specific employees, explain the reasons for their exemption, and specify the duration

of their exemptions; they preclude agency heads from delegating this authority to another;

and they require congressional notification of the above information for each exemption

granted. 31 U.S.C. § 1344(d). Other subsections require the General Services

Administration to promulgate government-wide regulations and require agencies to

maintain logs detailing all home-to-work transportation provided by the agency. 31 U.S.C.

§§ 1344(e), 1344(f).

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(1) Transit benefits

A government-wide provision in the fiscal year 1991 Treasury,

Postal Service, and General Government Appropriation Act

authorized federal agencies to participate in state or local

government programs designed to encourage employees to use

public transportation. Pub. L. No. 101-509, § 629, 104 Stat. 1389,

1478 (Nov. 5, 1990). Thus, an agency could use its general

operating appropriations to subsidize the use of discounted transit

passes by its employees.

The legislation had a sunset date of

December 31, 1993. Shortly before that provision was set to expire,

Congress enacted the Federal Employees Clean Air Incentives Act.

Pub. L. No. 103-172, § 2(a), 107 Stat. 1995, 1995-96 (Dec. 2,

1993), codified at 5 U.S.C. § 7905. This authorized each agency

head to establish a program to encourage employees to use means

other than single occupancy motor vehicles to commute to and

from work. The purposes of this authority are to improve air quality

and reduce traffic congestion. 5 U.S.C. § 7905 note.

On April 21, 2000, the President ordered federal agencies to

implement a transportation fringe benefit program under

section 7905 no later than October 1, 2000. Exec. Order No.

13150, Federal Workforce Transportation, 65 Fed. Reg. 24613

(Apr. 21, 2000). The executive order states that agencies shall

provide transit passes “in amounts approximately equal to

employee commuting costs, not to exceed the maximum level

allowed by law (26 U.S.C. [§] 132(f)(2)).”

Id., § 2. Five years later,

Congress required federal agencies in the National Capital Region

to implement a transit benefit program as described in Executive

Order No. 13150. Safe, Accountable, Flexible, Efficient

Transportation Equity Act: A Legacy for Users (SAFETEA-LU),

The “subsidy” is not additional pay for purposes of the prohibition in 5 U.S.C. § 5536.

Id. See also B-243677, B-243674, May 13, 1991.

The maximum amount of transit benefits is set out in 26 U.S.C. § 132(f)(2)(A). IRS

increases the amount every year for inflation per 26 U.S.C. § 132(f)(6). For example, for

calendar year 2016, IRS adjusted the amount from $175/month to $255/month. IRS,

Publication 15-B, Employer’s Tax Guide to Fringe Benefits (Dec. 23, 2015), at 19.

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Pub. L. No. 109-59, title III, § 3049, 119 Stat. 1144, 1711–12

(Aug. 10, 2005).

Programs established under section 7905 may include such options

as: transit passes or cash reimbursements for transit passes;

furnishing space, facilities, or services to bicyclists; and

nonmonetary incentives. 5 U.S.C. § 7905(b)(2). Agencies may

reimburse for the costs of taking a commuter train (B-316381,

July 18, 2008) or provide a cash reimbursement to employees who

commute by bicycle (B-318325, Aug. 12, 2009), for example.

transit benefit program could not include parking benefits for

disabled employees, however, since payment would encourage

employees to commute in privately owned vehicles.

B-291208,

Apr. 9, 2003.

(2) Parking

Along with commuting goes parking. It is equally clear that parking

incident to ordinary commuting is also a personal expense.

63 Comp. Gen. 270 (1984); 43 Comp. Gen. 131 (1963); B-162021,

July 6, 1977. These cases stand for the proposition that the

government may not be required to provide parking facilities for its

employees. However, GAO has concluded, in some instances, that

an agency may provide employee parking facilities if the agency

establishes that the lack of parking facilities will significantly impair

But see B-320116, Sept. 15, 2010 (5 U.S.C. § 7905 does not permit the Architect of the

Capitol to install and operate recharging stations for employees’ privately owned hybrid

vehicles).

Congress later passed several laws authorizing the installation and operation of

battery recharging stations in parking areas under the jurisdiction of the Senate, the

House of Representatives, and the Library of Congress. Pub. L. No. 112-167,

§ 1,126 Stat. 1296, 1296–98 (Aug. 10, 2012) (Senate), classified at 2 U.S.C. § 2170; Pub.

L. No. 112-170, § 1, 126 Stat. 1303, 1303–05 (House), classified at 2 U.S.C. § 2171;

Pub. L. No. 114-113, div. I, title II, § 209, 129 Stat. 2242, 2673 (Dec. 18, 2015), classified

at 2 U.S.C. § 2171a.

Appropriated funds were also not available to pay for parking as a reasonable

accommodation under the Rehabilitation Act. B-291208, Apr. 9, 2003. However, GAO

noted that, if the Commission employees with disabilities pay substantially more to park

closer to the building than employees without disabilities, the differential portion may be

paid under our holding in 63 Comp. Gen. 270 (1984).

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the operating efficiency of the agency and will be detrimental to the

hiring and retention of personnel. 72 Comp. Gen. 139 (1993);

49 Comp. Gen. 476 (1970); B-168946, Feb. 26, 1970;

B-155372-O.M., Nov. 6, 1964.

When making a “significant impairment” determination, an agency

should consider important factors relevant to current workplace and

government policies. B-322337, Aug. 3, 2012 (U.S. International

Trade Commission (ITC) may not use appropriations to acquire

parking permits from commercial parking garage for resale at

discounted rates to ITC employees). For instance, an agency

should consider the effect of single-occupancy vehicles on air

quality and traffic congestion, its authority to establish a telework

program and to offer flexible work schedules, the impact on

recruitment and retention, and the extent to which parking is

subsidized in similar circumstances in the nonfederal workplace. Id.

An agency in a major metropolitan area should affirmatively explain

the impact on agency operations were it not to subsidize parking

permits for employees. Id.

Agencies must generally obtain parking accommodations through

the General Services Administration under the Federal Property

and Administrative Services Act of 1949, as amended, unless they

have independent statutory authority or a delegation from GSA.

See B-327242, Feb. 4, 2016. GSA regards a delegation of authority

to lease parking facilities as a delegation of authority to enter into a

service contract, which can be approved at the regional level, rather

than a delegation of leasing authority. 41 C.F.R. § 102-73.240. If an

agency has independent statutory or delegated authority to procure

space and facilities and has made the requisite determinations, it

may provide for employee parking in a collective bargaining

agreement. See 55 Comp. Gen. 1197 (1976).

e. Entertainment of government personnel

There have been relatively few cases in this area, probably

because there are few situations in which entertainment could

conceivably be authorized. In the absence of specific statutory

authority otherwise, agencies must go through the typical “personal

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expense” analysis to determine whether appropriations are

available for entertainment costs.

An early decision held that 10 U.S.C. § 4302, which authorizes

training for Army enlisted personnel “to increase their military

efficiency and to enable them to return to civilian life better

equipped for industrial, commercial, and business occupations,” did

not include sending faculty members and students of the Army

Music School to grand opera and symphony concerts. 4 Comp.

Gen. 169 (1924). Another decision found it improper to hire a boat

and crew to send federal employees stationed in the Middle East

on a recreational trip to the Red Sea. B-126374, Feb. 14, 1956.

A 1970 decision deserves brief mention although its application will

be extremely limited. Legislation in 1966 established the Wolf Trap

Farm Park in Fairfax County, Virginia, as a park for the performing

arts and directed the Interior Department to operate and maintain it.

A certifying officer of the National Park Service asked whether he

could certify a voucher for symphony, ballet, and theater tickets for

Wolf Trap’s Artistic Director. The Comptroller General held that

such payments could be made if an appropriate Park Service

official determined that attendance was necessary for the

performance of the Artistic Director’s official duties. The Artistic

Director attended these functions not as personal entertainment,

but so that he could review the performances to determine which

cultural and theatrical events were appropriate for booking at Wolf

Trap. B-168149, Feb. 3, 1970. As noted, this case would seem to

have little precedential value, except for perhaps the Artistic

Director at Wolf Trap.

Food and entertainment frequently go hand-in-hand; we discuss

food further in section C.5 below. We discuss entertainment of

persons who are not federal employees in section C.6.h below.

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f. Greeting cards and seasonal decorations

(1) Greeting cards

The cost of seasonal greeting cards is a personal expense to be

borne by the officer who ordered and sent them, and may not be

charged to public funds.

For example, an agency with overseas posts wanted to send

Christmas cards to “important individuals” in the countries where

the posts were located. The agency tried to justify the expense as a

means of disseminating information and thereby to promote mutual

understanding. However, GAO concluded that the expense was a

personal one and could not be paid from the agency’s

appropriations. 37 Comp. Gen. 360 (1957). As to the purported

justification, the Comptroller General said “it seems to us that very

little, if any, information in that regard is contained on the ordinary

Christmas greeting card.” Id. at 361. See also 7 Comp. Gen. 481

(1928); B-247563.4, Dec. 11, 1996; B-115132, June 17, 1953.

It is immaterial that the card is “nonpersonal,” that is, sent by the

agency and not containing the names of any individuals. The

expenditure is still improper. 47 Comp. Gen. 314 (1967); B-156724,

July 7, 1965. It was also immaterial that the expenditure had been

charged to a trust fund in which donations, which the agency was

statutorily authorized to accept, had been deposited. 47 Comp.

Gen. 314.

Transmitting the greetings in the form of a letter rather than a card

does not legitimize the expenditure. For example, an agency head

sent out a letter stating that the entire staff of the agency “joins me

in wishing you a joyous holiday. We look forward to working with

you and your staff throughout the coming year.” A Member of

Congress questioned the propriety of sending these letters in

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penalty mail envelopes.

GAO noted that the letter “transacts no

official business” and “is the essence of a Christmas card.”

64 Comp. Gen. 382, 384 (1985). Therefore, the costs should not

have been charged to appropriated funds.

While all of the above cases deal with Christmas greetings, the rule

would presumably apply equally to other holiday or seasonal cards.

It would also apply to “greetings” not tied in to any particular

holiday. B-149151, July 20, 1962 (“thank you for hospitality” cards).

The point is that while sending greetings may be a nice gesture, it

is not the sort of thing that should be charged to the taxpayers.

(2) Seasonal decorations

Prior to 1987, based in part on the reasoning that seasonal

decorations are significantly different from ordinary office

furnishings designed for permanent use, it had been GAO’s

position that Christmas decorations (trees, lights, ornaments, etc.)

were not a proper charge to appropriated funds. 52 Comp.

Gen. 504 (1973); B-163764, Feb. 25, 1977 (nondecision letter).

In 1987, GAO overruled 52 Comp. Gen. 504, concluding that the

rules for office decorations should be the same whether the

decorations are seasonal or permanent. 67 Comp. Gen. 87 (1987).

Thus, seasonal decorations are now permissible “where the

purchase is consistent with work-related objectives [such as

enhancement of morale], agency or other applicable regulations,

and the agency mission, and is not primarily for the personal

convenience or satisfaction of a government employee.” Id. at 88.

In implementing this decision, agencies should be appropriately

sensitive (whatever that means) with respect to the display of

Penalty mail is “official mail, sent by U.S. government agencies, relating solely to the

business of the U.S. government, that is authorized by law to be carried in the mail without

prepayment of postage. For this standard, agencies are departments, agencies,

corporations, establishments, commissions, committees, and all officers and authorities of

the U.S. government authorized to use penalty mail.” U.S. Postal Service, Domestic Mail

Manual, § 703, ¶ 7.0, available at pe.usps.com/text/dmm300/703.htm

(last visited Oct. 24,

2016).

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religious symbols. Id. at 89. Cf. B-226781, Jan. 11, 1988 (the

National Park Service could purchase items to decorate a historic

ranch house to show how the ranch celebrated Christmas during

the frontier era).

The rationale of 67 Comp. Gen. 87 does not apply to Christmas

cards, which remain “basically individual good will gestures and are

not part of a general effort to improve the work environment.” Id.

see also B-140912, Nov. 24, 1959.

“Internal” generally means internal to the government, rather than

internal to a particular agency. That is, both intra- and inter-agency

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meetings generally fall outside the scope of the Training Act.

B-249351, May 11, 1993 (Training Act did not permit agency to pay

for food at a meeting of a Federal Executive Board, which is an

interagency coordinating group to improve federal management

practices in a particular metropolitan area); 68 Comp. Gen. 604

(1989) (denying payment for meal expenses by employees

attending a Customs Service sponsored meeting of an interagency

task force). Attendance at agency-sponsored meetings, whether

intra- or inter-agency, will generally be subject to the prohibition on

furnishing free food to employees at their official duty stations.

Thus, agencies generally may not use their appropriations to pay

for their employees to eat at meetings that are hosted by other

federal agencies.

Food does not become a permissible expense merely because

non-federal individuals attend a meeting. For example, in one case

a Forest Service official asked whether appropriations were

available to pay for a meal at a meeting attended by Forest Service

employees and by representatives from various private timber

associations. The meeting participants conducted business only

during the meal itself and for a brief time afterward; no substantial

activities occurred outside of the meal period. GAO concluded that

the food was not an allowable purchase because the food was not

incidental to the meeting. The presence of non-federal individuals

did not affect the conclusion. 65 Comp. Gen. 508 (1986). In

addition, a subsequent opinion commented that the use of

appropriations for food in 65 Comp. Gen. 508 also was

impermissible because, despite the inclusion of non-federal

attendees, the occasion ultimately was a routine business meeting

primarily involving day-to-day agency operations and concerns.

68 Comp. Gen. 606 (1989).

As we discuss in section C.6.r below, appropriations are available

to pay for food at training under limited circumstances; however, a

routine meeting does not qualify as “training.” B-230939, Aug. 14,

1989.

Thus appropriated funds could not be used in the following cases:

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• For meals and refreshments served to government employees

attending Federal Communication Commission radio spectrum

auctions. B-260692, Jan. 2, 1996. See also 47 Comp. Gen. 657

(1968); B-45702, Nov. 22, 1944.

• For refreshments at new employee orientations or for

refreshments for employees randomly selected for breakfasts

with senior agency managers. B-247563.4, Dec. 11, 1996.

• For food at an internal training session. B-270199, Aug. 6,

1996. (The food also was not a proper training expense under 5

U.S.C. § 4109 because provision of the food was not necessary

for employees to obtain the full benefit of the training.)

• For meals at quarterly managers meetings of the U.S. Army

Corps of Engineers. 72 Comp. Gen. 178 (1993).

• For meals at monthly luncheon meetings for officials of law

enforcement agencies. B-198882, Mar. 25, 1981.

• For the cost of meals at an agency-sponsored meeting for

employees who were not in travel status, even though they ate

alongside other employees who dined at government expense

because they were in travel status. B-180806, Aug. 21, 1974.

• For coffee breaks at a management seminar. B-159633,

May 20, 1974.

• For meals served during “working sessions” at Department of

Labor business meetings. B-168774, Jan. 23, 1970.

(2) Exceptions: where food at federally

organized meetings may be permissible

In one case, the Nuclear Regulatory Commission (NRC) could pay

an all-inclusive facility rental fee for a meeting to discuss internal

matters, even though the fee resulted in food being served to NRC

employees at their official duty stations. B-281063, Dec. 1, 1999.

The facility that NRC selected best met the agency’s needs,

notwithstanding the included food. There was no indication that that

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the included food influenced NRC’s determination to select the

facility. Because the fee would have remained the same to NRC

whether or not it accepted the food and its employees ate the food,

the harm that the general rule aims to prevent (i.e., expenditure of

federal funds on personal items) was not present.

Under some circumstances, appropriations are available for food

incident to an agency-hosted formal conference. We discuss this in

the next subsection.

Finally, though 5 U.S.C. § 4110 generally applies only to meetings

sponsored by nongovernmental organizations, “we have extended

section 4110 to government-sponsored meetings as long as the

meeting satisfies the same conditions as required for

nongovernment-sponsored meetings and the government

sponsored meeting is not an internal day-to-day business meeting.”

B-288266, Jan. 27, 2003. However, we are aware of only a single

decision that used 5 U.S.C. § 4110 as a basis to permit the use of

appropriations for food at a government-sponsored meeting.

B-198471, May 1, 1980. In that case, GAO acknowledged that it

would be permissible to pay for meals for two GAO employees who

were attending an annual meeting of the President’s Committee on

Employment of the Handicapped, provided that GAO determined

that 1) meals were incidental to the meeting; 2) attendance at the

meals was necessary for full participation; and 3) that employees

were not free to take meals elsewhere without missing essential

formal discussions, lectures, or speeches concerning the purpose

of the meeting.

Years of experience have demonstrated that agencies sometimes

view B-198471 as the loophole through which the lunch wagon may

be driven. We caution, however, that the holding of this decision is

not nearly as broad as it might at first appear. Though the three-

factor test set forth in the decision is critically important, the

decision made no reference to the rule that food is available only at

meetings that are not internal government business meetings. Long

before B-198471 was issued in 1980, the decisions recognized that

food is not a permissible expense for internal business meetings.

See, e.g., B-140912, Nov. 24, 1959. Decisions subsequent to

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B-198471 make it clear that application of the three-part test is in

order only where the agency first determines that the occasion in

question is not an internal government business meeting. E.g. 68

Comp. Gen. 604 (1989); 68 Comp. Gen. 606 (1989).

Furthermore, preceding application of the three-part test of

B-198471 is a determination that the food is incident to the meeting.

“In order to meet the three part test, a meal must be part of a formal

meeting or conference that includes not only functions such as

speeches or business carried out during a seating at a meal but

also includes substantial functions that take place separate from

the meal.” 64 Comp. Gen. 406, 408 (1985). In other words, the

three-part test, and hence the authority to reimburse, relates only to

a meal that is incident to a meeting, not to a meeting that is incident

to a meal. See also 65 Comp. Gen. 508, 510 (1986); 64 Comp.

Gen. 406, 408 (1985); B-249249, Dec. 17, 1992. For example,

appropriations were not available to reimburse employees for the

cost of a meal at a meeting where the meeting “lasts no longer than

the meal during which it is conducted.” 64 Comp. Gen. at 408.

Thus, before an agency may use appropriations to pay for food at a

federally-sponsored meeting under 5 U.S.C. § 4110, the agency

must, at a minimum, ensure the meeting is not an internal

government business meeting and that the meal is merely an

incidental part of the meeting. The agency must not structure the

meeting around the purpose of including food. Only after a meeting

satisfies these conditions may the agency apply the three-part test

given in B-198471. The decision in B-198471 offers little reasoning

to the reader attempting to ascertain whether 5 U.S.C. § 4110

permits payment for food at a particular federally-sponsored event.

Given the lack of other decisions pertaining to this specific

application of 5 U.S.C. § 4110, the reader is urged to proceed with

caution and is reminded that GAO will issue decisions upon

request.

f. Agency hosting a formal conference

When an agency is hosting a formal conference that meets

particular criteria, it may provide food to its own personnel, to

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employees of other agencies, and to nonfederal personnel. An

agency was found to have the requisite statutory authority to

provide meals and refreshments to nonfederal personnel in

B-300826, Mar. 3, 2005. In that case, GAO considered whether the

National Institutes of Health (NIH) could use appropriated funds to

provide meals and light refreshments to both federal and

nonfederal attendees and presenters at a formal conference NIH

was hosting on the latest scientific advances in treating Parkinson’s

disease. After reviewing NIH’s statutory authority to conduct and

support research to further the treatment of diseases, GAO

concluded that NIH had the requisite authority to host the formal

conference to which NIH had invited experts from the private sector

as well as from other federal agencies, in addition to researchers

from its own research institutes.

To determine whether the costs of meals and refreshments at such

an agency-hosted formal conference are necessary to achieve the

conference objectives, GAO established the following criteria:

(1) the meals and refreshments are incidental to the formal

conference, (2) attendance at the meals and when refreshments

are served is important for the host agency to ensure attendees’ full

participation in essential discussion, lectures, or speeches

concerning the purpose of the formal conference, and (3) the meals

and refreshments are part of a formal conference that includes

substantial functions occurring separately from when the food is

served. Since the NIH proposal met these criteria, NIH could

provide meals and refreshments at the Parkinson’s disease

conference. In so finding, GAO noted that the listed criteria must be

applied on a case-by-case basis and advised federal agencies to

develop procedures to ensure that the provision of meals and

refreshments meet the criteria.

Another aspect of hosting a formal conference addressed in

B-300826 concerned whether NIH could charge an attendance fee

The decision also concluded that 31 U.S.C. § 1345 did not bar the provision of food at

this formal conference. We discuss this further in section D. 5.

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at the formal conference and retain the proceeds, or permit its

contractor to do so. GAO held that without specific statutory

authority an agency hosting a formal conference may not charge

and retain an attendance fee, and the agency may not cure that

lack of authority by engaging a contractor to do what it may not do.

A contractor in this situation is “receiving money for the

Government,” and the miscellaneous receipts statute, 31 U.S.C.

§ 3302(b), requires that such funds must be deposited in the

Treasury.

This decision in B-300826 was affirmed in B-306663,

Jan. 4, 2006. For more on the miscellaneous receipts statute, see

Chapter 6, section E.2.

Earlier we noted that agencies sometimes view GAO’s decision in

B-198471, May 1, 1980, as the loophole through which the lunch

wagon may be driven. The lunch wagon is still rolling, and with the

decision in the NIH conference case, it is now loaded with food not

only for federal employees but also for nonfederal attendees. Years

of informal contact with agencies have shown that officials often

place undue weight on the three-factor test specified in B-300826,

just as they did with the three-factor test specified in B-198471.

However, just like the three-part test in B-198471, the three-part

test of B-300826 applies only after a particular occasion satisfies

particular prerequisites. Specifically, an agency may use

appropriations for food under B-300826 only for a formal

conference.

The decision in B-300826 does not offer a strict rule for what

constitutes a “formal conference”; instead, the “level of formality

required is the same as what one would expect of a conference

sponsored by a nongovernmental entity.” B-300826, at 6. Certainly

the formal conference “must involve topical matters of interest to,

and the participation of, multiple agencies and/or nongovernmental

participants.” Id. However the formal conference must also include,

In 2006, Congress provided the Department of Defense (DOD) with specific authority to

accept and retain fees from any individual or commercial participant in conferences,

seminars, exhibitions, symposiums, or similar meetings conducted by DOD. Pub. L.

No. 109-364, 120 Stat. 2083, 2395–96 (Oct. 17, 2006), codified at 10 U.S.C. § 2262.

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“among other things, registration, a published substantive agenda,

and scheduled speakers or discussion panels.” Id. (emphasis

added). The phrase “among other things” indicates that this list of

criteria for a formal conference is by no means exhaustive. Finally,

the decision cautions that “[m]eetings discussing business matters

internal to an agency or other topics that have little relevance

outside of the agency do not constitute formal conferences.” Id.

It is wise to remember what we pointed out in the beginning of the

Food section: food must be a means to an end, never an end in

itself. One agency official might think: “we are trying to organize this

conference, and it turns out that food is necessary for us to

accomplish our objective. Is it possible for us to use appropriations

to purchase food?” In that case, application of the principles set

forth in B-300826 might permit food under limited circumstances.

Another official might think “we are trying to organize this

conference, and it would be great to have food. Is it possible to craft

our objectives so that food is permitted?” We hope that the latter

official would reflect upon the trust that Congress and the American

people have vested in federal officials and realize why such

thinking would be subjected to rightful scorn. Upon such proper

reflection, typically the latter official realizes that the food is not

necessary to accomplish the agency’s objectives and that the

interests of the agency and of the taxpayers are better served by

using appropriations only for official expenses, leaving employees

and other individuals to use their personal funds to satisfy their own

needs in the manner they see fit.

GAO once sounded a cautionary note consistent with this spirit:

“Accordingly, we will continue to

scrutinize closely situations that reflect

an attempt to manipulate the content of

meetings to fit one of our established

exceptions rather than furthering a

legitimate training function. We note that

the purpose of our exceptions to the

general rule prohibiting the use of

appropriated funds for meals is to allow

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for better and more efficiently trained

and informed government employees by

covering the cost of meals received as

an incident to training sessions or to

conferences or meetings. The purpose

of our exceptions is not to feed

government employees using a ‘training’

or ‘meeting’ rubric as a convenient

vehicle to achieve that result.”

B-249795, May 12, 1993.

Finally, remember that B-300826 describes an agency’s

discretionary authority to pay for food at specified formal

conferences. Agencies need not exercise this authority. Ironically,

we find an excellent example of the discretionary nature of this

authority in the very agency that was the subject of B-300826: the

National Institutes of Health (NIH). Current policy of the Department

of Health and Human Services (HHS) (of which NIH is a

component) bars the use of appropriated funds to purchase food

“whether for conferences or meetings; for meals, light

refreshments, or beverages; or for Federal or non-Federal

participants” unless the food is a necessary expense and the

occasion fits into one of the following four exceptions: training

events; award ceremonies; use of official reception and

representation funds; or emergencies involving imminent danger to

human life or the destruction of federal property. HHS Policy on the

Use of Appropriated Funds for Food, available at

www.hhs.gov/grants/contracts/contract-policies-

regulations/spending-on-food/index.html (last visited Aug. 24,

2017). All these exceptions are discussed in this publication.

In particular, the HHS policy permitting use of appropriations for

food at training events authorizes payment for employee

attendance “at a non-HHS government or non-government

conference (that constitutes an authorized training program) that

includes food, if the registration fee includes the cost of food and

the cost of food cannot be separated from the registration fee.”

Notably, however, HHS bars use of appropriations to “purchase

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food and refreshments for HHS funded training events, such as

conferences, workshops, symposia, and meeting, authorized under

the Government Employee Training Act.”

NIH also has a policy concerning use of appropriations for

conferences and meeting space. NIH Policy on Promoting Efficient

Spending: Use of Appropriated Funds for Conferences and Meeting

Space, Food, Promotional Items, and Printing and Publications,

Nov. 1, 2015, available at oamp.od.nih.gov/news/NIH-efficient-

spending-policy (last visited June 27, 2017). The policy makes no

mention of the decision in B-300826. Instead, the NIH policy is in

full accord with that of HHS and states that food is not a permissible

expense unless one of the exceptions listed in the HHS policy

applies. “There is no exception for providing beverages at meetings

and conferences hosted or sponsored by NIH.” NIH Policy, at 20

(emphasis in original). Further, “[t]he food prohibition absent

approval under one of the exceptions, applies regardless of

whether the event is a conference or meeting or regardless of

whether the event is held in federal or non-federal facilities.” NIH

Policy, at 20-21.

Agencies considering whether to use appropriations to purchase

food for formal conferences would be wise to consider the restraint

shown in written policies such as those of HHS and NIH before

using the broader authority outlined in B-300826. Though food

expenses at a particular formal conference may well be permissible

under B-300826, years of experience have shown us that some

agency officials confront enormous pressure to fashion this

decision into a lunch wagon hauling food that is not truly necessary

to carry out a formal conference.

g. Awards ceremonies

Agencies may use appropriations to provide light refreshments at

awards ceremonies under the Government Employees’ Incentive

Awards Act. We discuss this in section C.6.c below.

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h. Cultural awareness programs

Under particular circumstances, appropriations are available to

purchase food for cultural awareness programs that are part of an

agency’s efforts to ensure equal employment opportunity. We

discuss this issue in detail in section C.6.g below.

i. Cafeterias and kitchen appliances

The government has no general responsibility to provide luncheon

facilities for its employees. 10 Comp. Gen. 140 (1930). However,

plans for the construction of a new government building may

include provision for a lunch room or cafeteria, in which event the

appropriation for construction of the building will be available for the

lunch facility. 9 Comp. Gen. 217 (1929).

An agency may subsidize the operation of an employees’ cafeteria

if the expenditure is administratively determined to be necessary to

the efficiency of operations and a significant factor in the hiring and

retaining of employees and in promoting employee morale.

B-216943, Mar. 21, 1985; B-169141, Nov. 17, 1970; B-169141,

Mar. 23, 1970. See also B-204214, Jan. 8, 1982 (temporarily

providing paper napkins in new government cafeteria found to

contribute to efficiency of agency operations where employees

were using paper towels from lavatories due to a lack of napkins in

the cafeteria); GAO, Benefits GSA Provides by Operating

Cafeterias in Washington, D.C., Federal Buildings, LCD-78-316

(Washington, D.C.: May 5, 1978).

GAO approved an agency’s purchase of kitchen appliances,

ordinarily considered to be personal in nature, for common use by

employees in an agency facility.

B-302993, June 25, 2004. The

appliances included refrigerators, microwaves, and commercial

This decision represented a departure from earlier cases, which permitted such

purchases only where the agency could identify a specific need. See, e.g., B-180272, July

23, 1974; B-210433, Apr. 15, 1983; B-276601, June 26, 1997; B-173149, Aug. 10. 1971.

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coffee makers. The agency demonstrated that equipping the

workplace with these appliances was reasonably related to the

efficient performance of agency activities and provided other

benefits to the agency, including the assurance of a safe

workplace.

GAO advised the agency that it should establish policies for uniform

procurement and use of such equipment. In developing a policy,

the agency should address the ongoing need for specific equipment

throughout the building, the amount of the agency’s appropriation

budgeted for this purpose, price limitations placed on the

equipment purchases, and whether the equipment should be

purchased centrally or by individual units within headquarters. It is

important that the policy ensure that appropriations are not used to

provide any equipment for the sole use of an individual, and that

the agency locate refrigerators, microwaves, and coffee makers

acquired with appropriated funds only in common areas where they

are available for use by all personnel.

It should also be clear that appropriated funds will not be used to

furnish goods, such as food or eating utensils, to be used in the

kitchen area. These remain costs each employee is expected to

bear. For example, appropriations were not available to purchase

disposable cups, plates, and cutlery for employee use where the

agency did not demonstrate that provision of the items directly

advanced its statutory mission or that the benefit accruing to the

government through the provision of such items outweighed the

personal nature of the expense. B-326021, Dec. 23, 2014.

“Appropriations are not available for the personal expenses of an

agency’s employees unless the agency articulates a reasonable

and compelling justification, establishing a clear benefit to the

agency, contributing to the fulfillment of express statutory duties,

requirements, or functions.” Id.

For example, “having centralized appliances and therefore fewer extension cords or

overloaded circuits will permit [the agency] to better manage the safety of the building.”

B-302993, at 5.

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j. Bottled water

We discuss the issue of whether agencies may purchase bottled

water in section C.6.k(4) below.

k. Focus groups

At times, food may be a necessary expense where an agency

determines that it will increase participation in and effectiveness of

focus groups. The Veterans Benefits Administration (VBA) of the

Department of Veterans Affairs (VA) inquired whether it may use

appropriated funds to pay for refreshments or light meals at its

focus groups. Under 38 U.S.C. § 527(a), the VA is required to

“measure and evaluate” its programs, and the VBA has been

tasked with collecting this information. While VBA obtains

information from a variety of sources, including mail or internet

surveys and telephone interviews, VBA has determined that the

use of focus groups is the best method of gathering this feedback.

VBA also found that the provision of refreshments to the

participants is very helpful both in attracting these participants and

getting useful information from the focus groups.

In this case, the focus group participants were not VBA employees

but rather veterans and family members of veterans served by

VBA. GAO concluded that where VBA showed that it needs to offer

refreshments and light meals as an incentive to maximize

participation by nonemployee veterans and their families in focus

groups to fulfill its statutory requirement, VBA could use its

appropriated funds to do so. However, GAO cautioned that VBA

should provide such incentives pursuant to an appropriate,

enforceable policy with procedures for approval to ensure that

incentives are only provided when necessary and are used strictly

for nonemployee focus groups. B-304718, Nov. 9, 2005. Compare

B-318499, Nov. 19, 2009 (a Navy command which did not identify a

specific statutory objective may not use appropriated funds to pay

for lunch for nonfederal participants of a focus group on readiness

and quality of life issues).

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Another critical consideration is 31 U.S.C. § 1345, which bars the

use of appropriations for individuals other than federal employees

to attend some meetings. We discuss 31 U.S.C. § 1345 further in

section D.5 below.

l. Accomplishment of a statutory

responsibility

GAO has, on occasion, permitted agencies to use appropriations

for food in certain instances where the agency presents a

compelling legal determination that the food was an essential

constituent part of the effective accomplishment of a statutory

responsibility, notwithstanding any collateral benefit to the

individual. For example, under a statutory accident prevention

program, the Marine Corps could permissibly establish rest stations

on highways leading to a Marine base to serve coffee and

doughnuts to Marines returning from certain holiday weekends.

B-201186, Mar. 4, 1982. In another case, the National Science

Foundation could use appropriated funds for the dinner of a

nonfederal award recipient and her spouse at an agency awards

ceremony because of the statutory nature of the award.

B-235163.11, Feb. 13, 1996.

Similarly, the U.S. Army Garrison Ansbach (Ansbach) asked

whether its appropriated funds could be used to purchase food for

nonfederal participants at annual antiterrorism training exercises

conducted by Ansbach. These exercises are conducted pursuant to

Department of Defense and Department of the Army requirements

and are intended to help identify and reduce antiterrorism

vulnerabilities and test antiterrorism response plans and

procedures. The role of the nonfederal participants, which could

include contract installation guards and host nation police, fire

department, local Red Cross, and city officials, is to provide a real

The decision also concluded that “unless the Marine Corps determines that making the

highway rest stations provisions available to non-Marines contributes to Marine safety,

any refreshments for non-Marines should be provided on a reimbursable basis only.”

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world response to the simulated terrorist incident. GAO had no

objection to the Ansbach commander’s determination to use

appropriations to provide food to the federal participants in the

training because an actual antiterrorism response could very well

require nonstop participation. GAO, recognizing the importance of

local cooperation in responding to emergency situations, concluded

that Ansbach could provide food to nonfederal personnel so long as

the Ansbach commander determined that their participation in the

training is essential to accomplishing the required training of

Department of Defense and Army employees and to simulating

realistic antiterrorism scenarios. B-317423, Mar. 9, 2009. GAO

suggested that, in order to enhance the simulated nature of the

exercise and to test the delivery apparatus, Ansbach would want

the food to resemble those types of meals and snacks that one

would expect to be provided during an actual antiterrorism

response. Id.

In contrast, appropriations for the Forest Service were not available

to provide light refreshments for attendees of an educational event.

B-310023, Apr. 17, 2008. A Forest Service district participated in

National Trails Day, which was an annual event sponsored by a

private nonprofit organization dedicated to preserving and

promoting hiking. Agency personnel led visitors on hikes and

served as guides on walks and instructors for educational activities.

The Forest Service district wished to provide snacks for attendees

who were, for example, participating in hikes. However,

appropriations were not available for this purpose, as the Forest

Service did not demonstrate how the provision of refreshments was

an essential, constituent part of accomplishing an authorized

agency function. It was clear that the Forest Service could

effectively carry out the activities it planned for National Trails Day

without providing light refreshments.

Another critical consideration is 31 U.S.C. § 1345, which bars the

use of appropriations for individuals other than federal employees

to attend some meetings. We discuss 31 U.S.C. § 1345 further in

D.5 below.

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m. Food for persons other than government

personnel

Most cases concerning food arose in the context of providing food

to government personnel. Occasionally, GAO has issued decisions

and opinions concerning the purchase of food for non-government

personnel. One of these decisions concerned the purchase of food

at formal conferences, which we discuss in section C.5.f above.

This subsection discusses several other cases. Many of the

remaining decisions discuss whether appropriations are available

for what is often dubbed “entertainment” of non-government

personnel. Usually, the purchase of food for persons other than

government personnel is permissible only pursuant to specific

statutory authority. For example, funds were not available to furnish

food or refreshments at “recognition ceremonies” for volunteers at

Veterans Administration field stations. The ceremonies had been

designed as an inducement to the volunteers to continue rendering

service. 43 Comp. Gen. 305 (1963). However, expenditures of the

same nature were permissible when authorized by specific

statutory authority. B-152331, Nov. 19, 1975.

Other decisions and opinions on this subject include:

• Chairman of Philippine War Damage Commission could not be

reimbursed for expenses incurred for entertaining distinguished

guests in the Philippines, as such expenses were not

specifically authorized by law. 26 Comp. Gen. 281 (1946).

• Costs for refreshments for college students at recruiting

functions are not reimbursable, unless the costs were included

in a lump sum bill with other room facility charges. B-236763,

Jan. 10, 1990.

• Free in-flight meals during weather research flight unauthorized

for nongovernment personnel. 65 Comp. Gen. 16 (1985).

• Cost of a breakfast meeting with Canadian officials called at the

initiative of the Chairman of the Securities and Exchange

Commission was not reimbursable. B-138081, Jan. 13, 1959.

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• Appropriations available to the judiciary for jury expenses could

not be used to buy coffee and refreshments for jurors during

recesses in trial proceedings. The situation was analogous to

the cases prohibiting the purchase of food from appropriated

funds for employees working under unusual conditions.

Although statutory authority existed to pay actual subsistence

expenses for jurors under sequestration, that authority was not

an issue in the case at hand. 57 Comp. Gen. 806 (1978). The

relevant appropriation language was subsequently amended to

provide for refreshments, and the authority was made

permanent in 1989.

• Equal Employment Opportunity Commission appropriations not

available to host a reception for Hispanic leaders in conjunction

with a planning conference. B-193661, Jan. 19, 1979.

• Providing light refreshments to attendees of National Trails Day

events does not contribute materially to the accomplishment of

an authorized U.S. Forest Service function and thus

appropriations were not allowed for the expense. B-310023,

Apr. 17, 2008.

Though Congress sometimes authorizes the purchase of food for

persons other than government employees, agencies must be

careful not to exceed the bounds of the authority. For example,

GAO considered the propriety of using appropriated funds to

furnish luncheons to public school officials in conjunction with

Marine Corps recruiting programs. B-162642, Aug. 9, 1976. A

statute authorized reimbursement of necessary expenses incurred

by recruiters. (This statute currently is 37 U.S.C. § 488.) The

legislative history of the statute made clear that the provision was

intended to allow reimbursement for snacks and occasional meals

for recruits, candidates, and their families. GAO noted that it did not

consider a planned luncheon involving a formal presentation with a

guest speaker as within the intended scope of the statute.

Pub. L. No. 101-162, 103 Stat. 988, 1012 (Nov. 21, 1989).

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However, since the statute and implementing regulations were

broadly worded, payment in that case was authorized. The decision

cautioned against incurring similar expenses in the future unless

the regulations were first revised to provide adequate guidelines

and limitations.

Another critical consideration is 31 U.S.C. § 1345, which bars the

use of appropriations for individuals other than federal employees

to attend some meetings. We discuss 31 U.S.C. § 1345 further in

section D.5 below.

n. Official reception and representation

funds

Expenditures that would otherwise be improper may be authorized

under specific statutory authority. Though this section of our

publication focuses on food specifically, here we consider

appropriations that Congress has specifically made available not

only for food but also for entertainment more generally.

Congress has long recognized that many agencies have a

legitimate need for items that otherwise would be prohibited as

entertainment, and has responded by making limited amounts

available for official entertainment to those agencies which can

justify the need. Entertainment appropriations originated from the

need to permit officials of agencies whose activities involve

substantial contact with foreign officials to reciprocate for courtesies

extended to them by foreign officials. For example, the State

Department would find it difficult to accomplish its mission if it could

not spend any money entertaining foreign officials. In fact, some of

the early entertainment appropriations were limited to entertaining

non-U.S. citizens, and some could only be spent overseas. E.g.

B-46169, Dec. 21, 1944. Restrictions of this nature have become

increasingly uncommon.

Entertainment appropriations may take various forms. Some

agencies have their own well-established structures which may

include permanent legislation. For example, the State Department

has permanent authorization to pay for official entertainment.

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22 U.S.C. § 4085. See also 22 U.S.C. § 2671 (authorizes

expenditures for “unforeseen emergencies” which may include

official entertainment in certain contexts). The authority of

22 U.S.C. § 4085 is implemented by means of annual

appropriations under a specific heading, such as “Representation

Allowances” or “Representation Expenses”.

State Department

representation allowances have been found available for rental of

formal evening wear by embassy officials accompanying the

Ambassador to the United Kingdom in presenting his credentials to

the Queen, 68 Comp. Gen. 638 (1989); hiring extra waiters and

busboys to serve at official functions at foreign posts, 64 Comp.

Gen. 138 (1984); meals for certain embassy officials at Rotary Club

meetings in Tanzania, if approved by the local Chief of Mission,

B-232165, June 14, 1989; and reimbursement of Ambassador and

Deputy Chief of Mission for cost of renting formal morning dress

required by protocol for official occasions, B-256936, June 22,

1995.

The Defense Department also has its own structure. Under

10 U.S.C. § 127, the Secretary of Defense, or of a military

department, within the limitations of appropriations made for that

purpose, may use funds to “provide for any emergency or

extraordinary expense which cannot be anticipated or classified.”

See Official Representation Funds, DOD Instruction 7250.13 (June

30, 2009). When so provided in an appropriation, the official may

spend the funds “for any purpose he determines to be proper.”

10 U.S.C. § 127(a). See 72 Comp. Gen. 279 (1993) (certifying

officer processing voucher under 10 U.S.C. § 127 is responsible

only for errors made in his own processing of the voucher, and not

for the Defense Attaché’s prior certification as to the propriety of the

payment). Annual Operation and Maintenance appropriations

E.g., Pub. L. No. 114-113, div. K, title I, 129 Stat. 2242, 2705, 2708 (Dec. 18, 2015)

(fiscal year 2016).

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include amounts for “emergencies and extraordinary expenses.”

Although the title is not particularly revealing, it has long been

understood that official representation expenses are charged to this

account. See GAO, Internal Controls: Defense’s Use of Emergency

and Extraordinary Funds, GAO/AFMD-86-44 (Washington, D.C.:

June 4, 1986); DOD Use of Official Representation Funds to

Entertain Foreign Dignitaries, GAO/ID-83-7 (Washington, D.C.:

Dec. 29, 1982); 69 Comp. Gen. 242 (1990) (reception for newly

assigned commander at U.S. Army School of the Americas).

With these two major exceptions, most agencies follow a similar

pattern and receive their entertainment funds, if they receive them

at all, simply as part of their annual appropriations. The

appropriation may specify that it will be available for

“entertainment.” See, e.g., B-20085, Sept. 10, 1941. Far more

commonly, however, the term used in the appropriation is “official

reception and representation (R&R).” This has come to be the

technical “appropriations language” for entertainment.

While we cannot guarantee that one does not exist somewhere, we

have not found a congressional definition of the term “official R&R.”

The term seems to have originated—or at least became more

widespread—in the early 1960s. We identified the first appearance

of the term for a number of agencies, and selected two, the

Departments of Agriculture and Interior, as illustrative. Both

agencies first received “official R&R” funds in their appropriations

for fiscal year 1963.

The Department of Agriculture explained that the Secretary

frequently finds it necessary to provide a luncheon or similar

E.g., Department of Defense Appropriations Act, 2016, Pub. L. No. 114-113, div. C,

129 Stat. 2242, 2333, 2335 (Army), 2336 (Navy, Air Force, Defense-Wide), 2349

(Inspector General) (Dec. 18, 2015).

Department of Agriculture and Related Agencies Appropriation Act, 1963, Pub. L.

No. 87-879, 76 Stat. 1203, 1212 (Oct. 24, 1962); Department of the Interior and Related

Agencies Appropriation Act, 1963, Pub. L. No. 87-578, 76 Stat. 335, 345 (Aug. 9, 1962).

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courtesy to various individuals and small groups in the conduct of

official business, to promote effective working relationships with

farm, trade, industry, and other groups that are directly related to

accomplishing the department’s work. Such official courtesies

benefit the government, and the Secretary and Under Secretary of

Agriculture should not be required to bear these expenses from

their own personal funds as was then the case. In conclusion, the

justification observed that “[i]t is unseemly that the hospitality

should always be left to the visitor.”

Similarly, the Department of

the Interior explained that its request for “not to exceed $2,000 for

official reception and representation expenses” was intended to

provide authority to use appropriated funds for expenses incurred

by the Secretary “in fulfilling the courtesy and social responsibilities

directly associated with his official duties,” in situations much like

those the Agriculture Department had noted. Such official

expenses, the justification asserted, “rightly should be borne by the

Government rather than be financed from personal funds.”

One point that is clear from these excerpts is that an R&R

appropriation, whatever its origins may have been, is not limited to

the entertainment of foreign nationals, unless of course the

appropriation language so provides. The experience of the former

Department of Health, Education, and Welfare (HEW) provides

further evidence that, absent some indication to the contrary,

Congress does not intend that an “official R&R” appropriation be

limited to entertaining foreign nationals. The Secretary of HEW first

received an entertainment appropriation in HEW’s fiscal year 1960

appropriation act, but it was limited to certain foreign visitors.

The

language was changed to “official reception and representation” in

Department of Agriculture Appropriations for 1963: Hearings before the Subcomm. on

Department of Agriculture and Related Agencies Appropriations of the House Comm. on

Appropriations, 87th Cong., 2d Sess. pt. 4, at 2090–91 (1962).

Interior Department and Related Agencies Appropriations for 1963: Hearings on

H.R. 10802 before a Subcomm. of the Senate Comm. on Appropriations, 87th Cong.,

2d Sess. 550 (1962).

Pub. L. No. 86-158, § 209, 73 Stat. 339, 355 (Aug. 14, 1959).

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HEW’s fiscal year 1964 appropriation.

The conference report on

the 1964 appropriation explained that the change was intended to

expand the scope of the appropriation to include U.S. citizens as

well as foreign visitors.

It is clear that R&R appropriations have traditionally been sought,

justified, and granted in the context of an agency’s need to interact

with various nongovernment individuals or organizations. Precisely

who these individuals or organizations might be will vary with the

agency. Of course, the fact that the thrust of the appropriation is the

entertainment of nongovernment persons does not mean that

government persons are precluded. For example, it has long been

recognized that persons from other agencies (and by necessary

implication members of the host agency as well) may be included

incident to an authorized entertainment function for nongovernment

persons. E.g., B-84184, Mar. 17, 1949.

An agency has wide discretion in the use of its R&R appropriation.

61 Comp. Gen. 260, 266 (1982); B-212634, Oct. 12, 1983. As a

general proposition, “official agency events, typically characterized

by a mixed ceremonial, social and/or business purpose, and hosted

in a formal sense by high level agency officials” and relating to a

function of the agency will not be questioned. B-223678, June 5,

1989. Accordingly, R&R funds were available for the following:

• Holiday party for government officials and their spouses or

guests, held by Secretary of the Interior at the Custis-Lee

Mansion. 61 Comp. Gen. 260 (1982), aff’d upon

reconsideration, B-206173(2), Aug. 3, 1982.

• Party for various government officials and their families or

guests held on July 4 by Secretary of Interior to celebrate

Independence Day. B-212634, Oct. 12, 1983.

Pub. L. No. 88-136, § 905, 77 Stat. 224, 246 (Oct. 11, 1963).

H.R. Conf. Rep. No. 88-774, at 11 (1963).

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• Luncheon incident to “graduation ceremony” for Latin American

students being trained by the Bureau of Labor Statistics.

B-84184, Mar. 17, 1949.

• Entertainment of British war workers visiting various American

cities as guests of the British Ministry of Information. B-46169,

Aug. 18, 1945.

• Cost of food and entertainment provided by General Services

Administration at grand opening of a government cafeteria “to

the extent that the grand opening otherwise qualifies as an

‘official reception.’” B-250450, May 3, 1993.

• Cost of meals at “representational” interagency briefings for

executive branch employees personally hosted by Director of

the Trade and Development Program of the United States

Agency for International Development. 72 Comp. Gen. 310

(1993).

• Printed invitation cards and envelopes in connection with an

official function at a State Department overseas mission.

B-122515, Feb. 23, 1955.

The Veterans Administration could not use its general

appropriations to provide refreshments at an awards ceremony for

volunteers, but it could use its R&R appropriation. 43 Comp.

Gen. 305 (1963). An agency may use either its R&R funds or its

general appropriations for refreshments at award ceremonies under

the Government Employees’ Incentive Awards Act, 5 U.S.C.

§§ 4501–4506. 65 Comp. Gen. 738, 741 n.5 (1986).

Notwithstanding the discretion it confers, an R&R appropriation is

not intended to permit government officials to feed themselves and

one another incident to the normal day-to-day performance of their

The decision modified the result of an earlier decision, B-46169, Dec. 21, 1944, based

on a change in the relevant appropriation language. The 1944 decision contains a fuller

statement of the facts.

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jobs. Thus, GAO has held that R&R funds may not be used to

provide food or refreshments at intra-government work sessions or

routine business meetings, even if held outside of normal working

hours. B-223678, June 5, 1989. See also B-250884, Mar. 18, 1993

(the cost of meals provided to government employees during

interagency working meetings improperly charged to R&R funds).

A final but significant limitation on the use of representation funds

stems from the appropriation language itself—R&R appropriations

are made for the expenses of official reception and representation

activities. There must be some connection with official agency

business. Thus, it would be improper to use representation funds

for a social function hosted and attended by private parties, such as

a breakfast for Cabinet wives. 61 Comp. Gen. 260 (1982), aff’d

upon reconsideration, B-206173(2), Aug. 3, 1982. Similarly, R&R

funds may not be used for entertainment incident to an activity

which is itself unauthorized. 68 Comp. Gen. 226 (1989)

(entertainment incident to trade show in Soviet Union which agency

had no authority to sponsor). The impropriety of the underlying

activity necessarily “taints” the entertainment expenditures.

6. Considerations for various categories

of expenditures

a. Advertising and dissemination of

information on agency activities

When determining whether it has authority to conduct advertising or

to disseminate information regarding its activities, an agency must

determine that the proposed expenditure is a necessary expense,

which is Step 1 of the purpose analysis. Congress has enacted

many statutory prohibitions concerning agency communications,

which we discuss in section D.1 below. Here we focus on the Step

1 analysis and whether agencies may use appropriations for (1)

advertising and promotion; and (2) other information dissemination

activities.

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(1) Advertising and promotion

Even the casual viewer of commercial television will note that the

government is heavily “into” advertising. From the ever-present

“Smokey Bear” reminding us that only we can prevent wildfires

Vince and Larry, the Crash Test Dummies,

and messages from

Medicare featuring the late actor Andy Griffith,

the government

has sponsored a variety of campaigns. Some may be designed to

either encourage or discourage various behaviors, while others

present information on government programs and activities.

Whether an agency’s appropriations are available for advertising,

like any other expenditure, depends on the agency’s statutory

authority.

Whether to advertise and, if so, how far to go with it

are

determined by the precise terms of the agency’s program authority

in conjunction with the necessary expense doctrine and general

restrictions on the use of public funds such as the various anti-

lobbying statutes. See B-251887, July 22, 1993 (Forest Service

may pay for newspaper advertisements informing the public of

activities in the national forests because these activities are within

the Service’s statutory authority and the advertisements are

reasonable ways of disseminating information related to the

Smokey Bear and his famous warning, “Only You Can Prevent Forest Fires,” was

introduced to Americans in 1944. In response to an outbreak of wildfires in 2000, the

campaign was changed to “Only You Can Prevent Wildfires.” Whatever his slogan,

Smokey is recognized and protected by act of Congress. See 16 U.S.C. § 580p. Mess

with Smokey and you can go to jail. 18 U.S.C. § 711.

So enduring are Vince and Larry’s contributions to American culture that they are now

in the Smithsonian. Smithsonian National Museum of American History, “Vince and Larry

dummies ‘crash’ into the Smithsonian,” available at

americanhistory.si.edu/blog/2010/07/vince-and-larry-dummies-crash-into-the-

smithsonian.html (last visited July 5, 2017).

B-320482, Oct. 19, 2010.

Even with specific authority to advertise, agencies still need to be careful. See Federal

Express Corp. v. United States Postal Service, 151 F.3d 536 (6

Cir. 1998) and Federal

Express Corp. v. United States Postal Service, 40 F. Supp. 2d 943 (W.D. Tenn. 1999)

(involving claims that the U.S. Postal Service engaged in false advertising).

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purposes of the Service’s appropriation); B-229732, Dec. 22, 1988

(Department of Housing and Urban Development had no authority

to incur promotional expenses at a trade show in the Soviet Union

when the purpose of the show was to enhance the potential for sale

of American products and services in the Soviet Union, a purpose

unrelated to HUD’s mission).

Some agencies have express promotional authority. For example,

the Department of Energy may promote energy conservation. See

B-139965, Apr. 16, 1979. Similarly, the United States Postal

Service has statutory authority to advertise its philatelic services to

encourage stamp collecting. B-114874.30, Mar. 3, 1976. Where

promotional authority exists, agencies have reasonable discretion,

subject to “necessary expense” considerations, in selecting

appropriate means. Thus, the Navy could exercise its statutory

authorization to promote safety and accident prevention by

procuring book matches with safety slogans printed on the covers

and distributing them without charge at naval installations.

B-104443, Aug. 31, 1951. Another example is the Department of

Commerce, which has statutory authority to “foster, promote, and

develop the foreign and domestic commerce” of the United States.

15 U.S.C. § 1512. Accordingly, Commerce could contract for an

advertising campaign aimed at promoting public understanding of

the American economic system, as it “would be reasonable for

Commerce to conclude that increased public understanding of how

the American economy works would have the effect of fostering,

promoting, or developing domestic commerce.” B-184648, Dec. 3,

1975.

Activities of the United States Mint furnish additional illustrations. In

B-206273, Sept. 2, 1983, GAO considered the Mint’s promotional

authority under legislation authorizing coins to commemorate the

1984 Los Angeles Summer Olympics. GAO concluded that the Mint

could stage media events and receptions, and could give away

occasional sample coins at these events, if (1) the expenditures

were deemed necessary to further the statutory objectives, (2) a

reasonable relationship were found to exist between a given

expenditure and a marketing benefit for the program, and (3)

promotional expenses were recouped from sales proceeds. In

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68 Comp. Gen. 583 (1989), GAO applied the same standards to

the commemorative coin program generally.

Subsequent Mint

legislation expressly authorizes marketing, promotion, and

advertising. See, e.g., 31 U.S.C. § 5136.

(2) Dissemination of information

A government agency has a legitimate interest in informing the

public about its programs and activities. Just how far it can go

depends on the nature of its statutory authority. Certainly there is

no need for statutory authority for an agency to issue a press

release describing a recent speech by the agency head, or for the

agency head or some other official to participate in a radio,

television, or magazine interview. However, an agency must ensure

that its activities are consistent with statutory prohibitions

concerning agency communications, which we discuss in section

D.1 below.

A 1983 decision illustrates another form of information

dissemination that is permissible without the need for specific

statutory support. Military chaplains are required to hold religious

services for the commands to which they are assigned. 10 U.S.C.

§ 3547. Publicizing such information as the schedule of services

and the names and telephone numbers of installation chaplains is

an appropriate extension of this duty. Thus, GAO advised the Army

that it could procure and distribute calendars on which this

information was printed. 62 Comp. Gen. 566 (1983). Applying a

similar rationale, the decision also held that information on the

Community Services program, which provides various social

services for military personnel and their families, could be included.

See also B-301367, Oct. 23, 2003 (affixing decals of the major units

assigned to an Air Force base onto a nearby utility company water

This case also held that the scope of legitimate promotional activities could not include

the printing of business cards for sales representatives. Business cards are now approved

expenditures where they are a necessary expense of agency operations. B-280759,

Nov. 5, 1998. There is a lengthy discussion of business cards in this chapter,

section C. 6. e.

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tower to inform the public of military activity in the area is a

permissible use of appropriated funds); B-290900, Mar. 18, 2003

(approving the Bureau of Land Management’s use of appropriated

funds to pay its share of the costs of disseminating information

under a cooperative agreement); B-280440, Feb. 26, 1999

(allowing the Border Patrol’s use of appropriated funds to purchase

uniform medals that, in part, served to advance “knowledge and

appreciation for the agency’s history and mission”).

Some agencies have specific authority to disseminate information.

Such authority will permit a broader range of activities and gives the

agency discretion to choose the appropriate means, the selection

being governed by the necessary expense doctrine.

The agency may use common devices such as buttons or magnets

(e.g., 72 Comp. Gen. 73 (1992)), newsletters (e.g., B-128938,

July 12, 1976), or conferences or seminars (e.g., B-166506,

July 15, 1975). In one case, the Comptroller General approved a

much less conventional means. Shortly after World War II, the

Labor Department wanted to publicize its employment services for

veterans. It did this by discharging balloons from a float in a parade.

Attached to the balloons were mimeographed messages asking

employers to list their available jobs. Since the Department was

charged by statute with publishing information on the program, the

cost of the balloons was permissible. B-62501, Jan. 7, 1947. Other

pertinent cases are 32 Comp. Gen. 487 (1953) (publication of

Public Health Service research reports in scientific journals);

32 Comp. Gen. 360 (1953) (the recording of Office of Price

Stabilization forum discussions to be used at similar meeting in

other regions); B-89294, Aug. 6, 1963 (use of motion picture by

United States Information Agency); B-15278, May 15, 1942

(photographs); A-82749, Jan. 7, 1937 (radio broadcasts).

Conversely, in 18 Comp. Gen. 978 (1939), radio broadcasts by the

then Veterans Administration (VA) were held to violate 31 U.S.C.

§ 1301(a) because the agency did not have statutory authority to

disseminate information about its activities. However, in 1958,

Congress gave VA the authority to “provide for the preparation,

shipment, installation, and display of exhibits, photographic

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displays, moving pictures, and other visual educational information

and descriptive material.”

The Comptroller General found that this

authority, now codified in 38 U.S.C. § 703(d), permitted VA to use

its medical care appropriation for the rental of booth space at the

Oklahoma State Fair and for the purchase of imprinted book

matches and imprinted jar grip openers to be distributed at the fair

to provide veterans with a number to call to obtain information.

B-247563.2, May 12, 1993. GAO found that the Bureau of

Engraving and Printing also needed statutory authority to publish a

100-year history to commemorate its centennial because the

Bureau is essentially an “industrial and service” establishment and

lacked authority to disseminate information. 43 Comp. Gen. 564

(1964).

The line between promotion and information dissemination is

occasionally thin, but the concepts are nevertheless different. Thus,

an agency may be authorized to disseminate information but not to

promote. If so, its “advertising” must be tailored accordingly. For

example, the Federal Housing Administration could disseminate

information on available benefits or related procedures under a loan

insurance program, but could not use its funds for an advertising

campaign to create demand. 14 Comp. Gen. 638 (1935). Similarly,

when the United States Metric Board was first created, it could

provide information, assistance, and coordination for voluntary

conversion to metrics but could not advocate metric conversion.

See GAO, Getting a Better Understanding of the Metric System—

Implications If Adopted by the United States, CED-78-128

(Washington, D.C.: Oct. 20, 1978); B-140339, June 19, 1979.

b. Attorney’s fees

While attorney’s fees awarded by courts are discussed in

Chapter 14, section C. 3. b (2), this section deals with

administrative payments.

Pub. L. No. 85-857, § 233, 72 Stat. 1105, 1116 (Sept. 2, 1958).

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Traditionally, the United States has followed what has come to be

known as the “American Rule,” that is, each party in litigation or

administrative proceedings is personally responsible for its own

attorney’s fees. In other words, in the absence of statutory authority

to the contrary, the losing party may not be forced to pay the

winner’s attorney. E.g., Baker Botts L.L.P. v. ASARCO LLC, 135 S.

Ct. 2158 (2015); Buckhannon Board & Care Home, Inc. v. West

Virginia Department Of Health & Human Resources, 532 U.S. 598,

602 (2001); Alyeska Pipeline Co. v. Wilderness Society, 421 U.S.

240 (1975).

One common application of the American Rule is that a claimant

who prosecutes an administrative claim against the United States is

not entitled to reimbursement of legal fees, unless authorized by

statute. E.g., 57 Comp. Gen. 554 (1978); 49 Comp. Gen. 44 (1969);

37 Comp. Gen. 485, 487 (1958); B-189045, Jan. 26, 1979. To

illustrate, a vendor who successfully filed a claim for the payment of

goods sold and delivered to a Navy vessel was not entitled to

reimbursement of attorney’s fees. B-187877, Apr. 14, 1977.

Similarly, agencies may not reimburse attorney’s fees to a claimant

against the United States, unless otherwise allowed by law.

B-188607, July 19, 1977. “Fairness” and “decency,” however

appealing, do not compensate for the lack of statutory authority.

57 Comp. Gen. 856, 861 (1978); 67 Comp. Gen. 574, 576 (1988).

Payments to attorneys also arise in a number of situations that are,

strictly speaking, not applications of the American Rule, that is, they

do not involve payment of fees to a “prevailing party.” The approach

in these cases is to look first for statutory authority, and if express

statutory authority does not exist, apply the various principles

discussed throughout this publication, such as the necessary

expense doctrine.

For example, a private attorney sought reimbursement for out-of-

pocket expenses he incurred incident to a “special proceeding”

initiated by the Nuclear Regulatory Commission (NRC) to

investigate charges of misconduct raised by the attorney against

NRC staff members, and by the staff members against the attorney.

There was no statutory authority to reimburse the attorney, nor

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could the payment be justified as a necessary expense since it was

not reasonably necessary to carrying out NRC functions. Therefore,

payment was unauthorized. B-192784, Jan. 10, 1979. In another

case, the Small Business Administration (SBA) could not reimburse

a bank for legal fees the bank incurred in protecting its interest in

an SBA-guaranteed loan since SBA neither contracted with the

attorney nor did it benefit from his services. B-187950, Apr. 26,

1977.

On the other hand, the Justice Department has held that legal fees

incurred by a Cabinet nominee in connection with Senate

confirmation hearings, for services rendered before the nominating

administration took office, could be paid either from Presidential

Transition Act appropriations or from private sources. 5 Op. Off.

Legal Counsel 126 (1981).

(1) Hiring of attorneys by government agencies

During the first century of the Republic, government agencies who

needed lawyers, either as counselors or litigators, simply hired

them. Not only was this system expensive (payments from the

public treasury are not conducive to reduced fees), it resulted in

inconsistencies in the government’s legal position. Congress

remedied the situation in 1870 by creating the Department of

Justice, headed by the Attorney General. Act of June 22, 1870,

ch. 150, 16 Stat. 162.

To assure that the objectives of the 1870 legislation would be

achieved, Congress included section 17, which: (a) prohibited

executive agencies from employing attorneys at the expense of the

United States, and (b) prohibited payments to attorneys, except

those employed by the Justice Department, unless the Attorney

General certified that the services could not be performed by the

Justice Department. The two parts of section 17 subsequently

became Revised Statutes §§ 189 and 365.

As the federal government grew in size and complexity, it became

apparent that the need for centralization of legal services within the

Justice Department related primarily to the specialty of litigation.

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Thus, with congressional approval, federal agencies regularly

employed attorneys to serve as legal advisers. (The term “Attorney-

Adviser” is still commonly used to designate staff attorneys in many

government agencies.) When title 5 of the United States Code was

recodified in 1966, the successors of Revised Statutes §§ 189 and

365 were combined into the new 5 U.S.C. § 3106. This statute,

reflecting the evolved state of the law, prohibits agencies, unless

otherwise authorized, from employing attorneys “for the conduct of

litigation in which the United States, an agency, or employee

thereof is a party, or is interested . . .” Agencies are required to

refer such matters to the Justice Department.

Thus, agencies

routinely employ attorneys to provide legal services other than

litigation, but may not employ attorneys as litigators, unless they

have statutory authority to conduct their own litigation, or unless

that authority has been delegated to them by the Attorney General.

Given the existence of the Justice Department and an agency’s

own staff attorneys, the need for a federal agency to retain private

counsel should rarely occur. Indeed, GAO has found that an

agency that retained private counsel to provide legal opinions on

matters within the Justice Department’s jurisdiction was

unauthorized, under statutes such as 28 U.S.C. §§ 511–514. See

16 Comp. Gen. 1089 (1937); 17 Comp. Gen. 58 (1937).

For example, in B-289701, Feb. 27, 2002, a presidential appointee

to the Civil Rights Commission had been prevented from taking his

seat when the appointee, whose position he was to assume,

refused to give up her seat, arguing that her term had not expired.

While the Justice Department filed suit on behalf of the new

appointee, the Commission retained private legal counsel to defend

the previous appointee. The Department of Justice, citing 28 U.S.C.

Many early decisions will be found dealing with Revised Statutes §§ 189 and 365. E.g.,

6 Comp. Gen. 517 (1927); 5 Comp. Gen. 382 (1925). For the most part, these decisions

may be disregarded as applying statutory provisions that have since been significantly

amended or repealed. However, decisions under Revised Statutes §§ 189 and 365 remain

valid to the extent they concern the elements of those statutes which survived with

5 U.S.C. § 3106. E.g., 32 Comp. Gen. 118 (1952).

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§ 516,

challenged the Commission’s right to intervene in the

litigation. The Justice Department objected that neither the

Commission, nor its officers in their official capacity, have a right to

appear in litigation without the permission of the Attorney General,

which in this case, had not been granted. GAO found that the

Commission had no authority to use appropriated funds to retain

counsel in order to intervene in the court case in opposition to

Justice.

However, in limited situations, the Comptroller General has held

that the retention of private attorneys as experts or consultants,

under 5 U.S.C. § 3109, is authorized. For example, in B-192406,

Oct. 12, 1978, GAO concluded that the then Civil Service

Commission could hire a private law firm, under 5 U.S.C. § 3109, to

serve as “special counsel” to the Chairman to investigate alleged

merit system abuses, since the matter was not under the

jurisdiction of the Justice Department. Similarly, the Navajo and

Hopi Indian Relocation Commission could retain a private attorney,

under 5 U.S.C. § 3109, as an independent contractor, to handle

matters beyond the Justice Department’s jurisdiction, where the

workload was insufficient to justify hiring a full-time attorney.

B-114868.18, Feb. 10, 1978. For similar holdings, see 61 Comp.

Gen. 69 (1981) (United States Advisory Commission on Public

Diplomacy could hire law firm to provide legal analysis of its

authority and independence); B-210518, Jan. 18, 1984

(Environmental Protection Agency could retain private counsel to

provide independent analysis of issues relating to congressional

“Except as otherwise authorized by law, the conduct of litigation in which the United

States, an agency, or officer thereof is a party . . . is reserved to the officers of the

Department of Justice, under the direction of the Attorney General.” 28 U.S.C. § 516.

While the district court ruled in favor of the previous appointee (and the Commission),

the appellate court overturned the district court’s order and held in favor of the new

appointee. United States v. Wilson, 290 F.3d 347 (D.C. Cir. 2002). However, the circuit

court did not address whether the Commission had authority to intervene. Id. at 352. The

court explained: “As the United States has not raised this issue on appeal, . . . we do not

decide whether this intervention was permissible.” Id. The effect of this was to let stand

the district court’s order granting Commission intervention.

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contempt citation of Administrator). See also B-133381, July 22,

1977; B-141529, July 15, 1963.

Agencies may have specific authority to retain special counsel in

addition to the lawyers on the regular payroll. For example,

appropriations for the Federal Communications Commission have

traditionally included “special counsel fees.” The Comptroller

General has construed this authority as permitting contractual

arrangements with former employees (as retired annuitants) to

perform functions for which they were uniquely qualified. Since the

appropriation provision constitutes independent authority, the

contracts are not subject to the limitations of 5 U.S.C. § 3109.

53 Comp. Gen. 702 (1974); B-180708, Jan. 30, 1976. Yet, GAO

has found that this authority is limited to services of the legal

profession, and does not embrace “counsel” in a broader sense.

B-180708, July 22, 1975.

However, an agency may not hire private counsel when Congress

has appropriated funds specifically for the legal work at issue. In

B-290005, July 1, 2002, GAO reported that the Interior

Department’s Fish and Wildlife Service (FWS) had contracted with

outside lawyers to obtain legal services in connection with various

issues of personnel, labor law, and discrimination allegations. By

law, the Solicitor of the Department of Interior is solely responsible

for the legal work of the Department, including the FWS. 43 U.S.C.

§ 1455. Moreover, the Solicitor receives a separate annual

appropriation to fund that work. GAO concluded that FWS’s

appropriation was not available to obtain outside counsel.

(2) Suits against government officers and

employees

At one time, government employees were considered largely

immune from being sued for actions they took while performing

their official duties. This is no longer true. For a variety of reasons,

it is no longer uncommon for a government employee to be sued in

his individual capacity for something he did (or failed to do) while

performing his job. For example, the Supreme Court held in 1978

that an executive official has only a “qualified immunity” for so-

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called “constitutional torts” (alleged violations of constitutional

rights). Butz v. Economou, 438 U.S. 478 (1978). In any event,

regardless of whether the employee ultimately wins or loses, he

has to defend the suit and therefore will need professional legal

representation.

As a general proposition, GAO considers the hiring of and paying

for an attorney to be a matter between the attorney and the client,

and this is no less true when the client is a government officer or

employee. E.g., 55 Comp. Gen. 1418, 1419 (1976); B-242891,

Sept. 13, 1991; B-246294, Feb. 26, 1992. However, GAO’s

decisions have long recognized another principle as well: where an

officer of the United States is sued because of some official act

done in the discharge of an official duty, the expense of defending

the suit should be borne by the United States. E.g., 6 Comp.

Gen. 214 (1926). This section will discuss when appropriated funds

may be used for attorney’s fees to defend a government officer or

employee.

Generally, when a present or former employee is sued for actions

performed as part of his official duties, his defense is provided by

the Justice Department. In order for a given case to be eligible for

Justice Department representation, the Justice Department must

determine that the employee’s action, which gave rise to the suit,

was performed within the scope of federal employment, and that

providing representation is in the interest of the United States. E.g.,

70 Comp. Gen. 647, 649 (1991).

The role of the Justice Department derives from a number of

statutory provisions: 28 U.S.C. §§ 515–519, 543, and 547. See also

Exec. Order No. 6166, § 5 (1933). These provisions establish the

Justice Department as the government’s litigator,

which usually

means representation by Justice Department attorneys.

For a discussion of the historical evolution and current legal basis of the Attorney

General’s role as “chief litigator,” see 6 Op. Off. Legal Counsel 47 (1982).

In addition, an executive agency may call upon the Justice Department for help in

performing the legal investigation of any claim pending in that agency. 28 U.S.C. § 514.

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reinforce these provisions, 5 U.S.C. § 3106, previously noted,

prohibits executive or military agencies from employing attorneys

for the conduct of litigation in which the United States or one of its

agencies or employees is a party or is interested. Instead, agencies

must refer such matters to the Justice Department. The Justice

Department has also issued implementing regulations, found at

28 C.F.R. §§ 50.15 and 50.16.

This statutory and regulatory

scheme is designed to encourage employees to vigorously carry

out their duties by assuring them of an adequate defense, at no

cost, should they be sued in the course of executing their

responsibilities. Cf. Bontkowski v. Smith, 305 F.3d 757, 760 (7

Cir.

2002) (“It would be absurd to require law enforcement officers to

defend at their own expense against likely groundless spite suits by

the people whom they have arrested or investigated.”).

However, the Attorney General’s decision to provide (or not

provide) counsel to an individual employee sued for official actions

is discretionary and not subject to judicial review. E.g., Falkowski v.

Equal Employment Opportunity Commission, 783 F.2d 252

(D.C. Cir. 1986), cert. denied, 478 U.S. 1014 (1986); Thomas v.

Wilkins, 61 F. Supp. 3d 13, 15 n.4 (D.D.C. 2014). The Attorney

General may take into consideration “how blameworthy or litigation-

prone the employee seeking representation may be.” Falkowski,

783 F.2d at 254.

The Comptroller General has recognized that the statutes cited

above authorize the Justice Department to retain private counsel,

payable from Justice Department appropriations, if it is determined

necessary and in the interest of the United States. E.g., 56 Comp.

Gen. 615, 623 (1977); B-22494, Jan. 10, 1942. For example, the

Justice Department generally will not provide representation if the

For situations where the Federal Tort Claims Act is the exclusive remedy, see

28 C.F.R. pt. 15.

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employee is the target of a criminal investigation,

but may

authorize private counsel at Justice Department expense if a

decision to seek an indictment has not yet been made. The Justice

Department may also authorize private counsel if it perceives a

conflict of interest between the legal or factual positions of different

government defendants in the same case. 28 C.F.R. §§ 50.15,

50.16. See 56 Comp. Gen. 615, 621–24 (1977);

B-150136,

B-130441, May 19, 1978; B-130441, May 8, 1978; B-130441,

Apr. 12, 1978; 2 Op. Off. Legal Counsel 66 (1978).

Thus, an employee who learns that he is being sued should first

explore the possibility of obtaining representation through the

Justice Department. Procedures for requesting representation are

found in 28 C.F.R. § 50.15(a). If the employee fails to immediately

seek Justice Department representation, he may find, as discussed

below, that he is stuck footing the bill for his attorney’s fees, even in

cases where the expense might otherwise have been paid by the

government.

If Justice Department representation is unavailable, there are

limited situations in which appropriations of the employing agency

may be available to retain private counsel. Generally, before an

agency can consider using its own funds, Justice Department

E.g., B-251141, May 3, 1993 (Food and Drug Administration’s request to use its

appropriations to reimburse private attorney fees incurred by several employees incident

to a federal criminal investigation of possible insider trader activities was deemed

impermissible and FDA should refer matter to Justice for consideration); B-242891,

Sept. 13, 1991 (Army may not use appropriated funds to reimburse private legal fees

incurred by civilian officers of the U.S. Army Chemical Research, Development and

Engineering Center convicted of multiple criminal environmental protection violations

committed in the course of pursuing their otherwise official duties relating to the

development of chemical warfare systems); United States v. Dee, 912 F.2d 741, 744

Cir. 1990), quoting United States v. Isaacs, 493 F.2d 1124, 1142–44 (7

Cir. 1974)

(“Criminal conduct is not part of the necessary functions performed by public officials.”).

The decision in 56 Comp. Gen. 615 dealt with civil actions against employees under a

prior version of section 7217 of the Internal Revenue Code (26 U.S.C. § 7217) for

improper disclosure of tax returns. The prior version has since been repealed (and

another statute has been inserted in its place). The remedy is now a suit for damages

against the United States under 26 U.S.C. § 7421.

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representation must first be appropriate but unavailable, and

representation must be in the interest of the United States. E.g.,

B-251141, May 3, 1993. The employee’s personal interest in the

outcome does not automatically preempt a legitimate government

interest; the two may exist side-by-side.

One case, 53 Comp. Gen. 301 (1973), dealt with suits against

federal judges and other judicial officers.

The suits arise in a

variety of contexts, often involving collateral attacks on the judges’

rulings in original actions. While many of the suits are frivolous,

some sort of defense, even if only a pro forma submission, is

almost always necessary. In many cases, such as actions where no

personal relief is sought against the judicial officer, or in potential

conflict of interest situations, the Justice Department has

determined that it cannot or will not provide representation. The

Comptroller General held that judiciary appropriations are available

to pay the costs of litigation, including “minimal fees” to private

attorneys, if determined to be in the best interest of the United

States and necessary to carry out the purposes of the

appropriation. However, the Comptroller General added that:

(1) the Justice Department must have declined representation,

although individual requests are not required for cases falling within

the Attorney General’s stated policy; (2) the determination of

necessity cannot be made by the individual defendant but must be

made by the Administrative Office of the U.S. Courts; and (3) the

Administrative Office should make full disclosure to the appropriate

congressional committees. Under similar circumstances,

appropriations for the public defender service are available to

defend federal public defenders appointed under the Criminal

Justice Act who are sued for actions taken within the scope of their

duties. Id. at 306.

Subject to the same kinds of exceptions applied to legal representation of other federal

employees, the Justice Department is statutorily required to defend federal judges. E.g.,

Bryan v. Murphy, 243 F. Supp. 2d 1375, 1381 (N.D. Ga. 2003) (citing 28 U.S.C. § 516).

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Nine years after GAO’s ruling in 53 Comp. Gen. 301, a statute was

added to title 28 of the United States Code authorizing the

Administrative Office of the United States Courts to pay the costs

(including attorney fees) of defending a Chief Justice, justice, judge,

officer, or employee of any United States court who is “sued in his

official capacity, or is otherwise required to defend acts taken or

omissions made in his official capacity, and the services of an

attorney for the Government are not reasonably available pursuant

to chapter 31 of this title.” Pub. L. No. 97-164, title I, § 116(a),

96 Stat. 25, 32 (Apr. 2, 1982), codified at 28 U.S.C. § 463. This

statute was intended to address those situations where the Justice

Department declines to provide representation to a judicial officer or

employee on grounds of conflict of interest or other ethical reasons.

McBryde v. United States, 299 F.3d 1357, 1362–63, 1366 (Fed. Cir.

2002), quoting S. Rep. No. 97-275, at 16 (1981). Generally

speaking, this provision does not authorize reimbursement where

the judicial officer or employee was engaged in “offensive” rather

than “defensive” litigation. Id. at 1365–67.

In 55 Comp. Gen. 408 (1975), the United States Attorney had

agreed to defend a former Small Business Administration (SBA)

employee who was sued for acts performed within the scope of his

employment. The U.S. Attorney later withdrew from the case, even

though the government’s interest in defending the former employee

continued. In order to protect his own interests, the employee

retained the services of a private attorney. Since the Justice

Department had determined that it was in the interest of the United

States to defend the employee and had undertaken to provide him

with legal representation, the Comptroller General held that SBA

could reimburse the employee for legal fees incurred as a result of

his obtaining private counsel when representation by the United

States subsequently became unavailable. See also B-251141,

May 3, 1993 (“In limited circumstances, where Justice determines

that representation of a federal employee is appropriate but is

unable to provide representation, agency appropriations may be

used to pay for legal work that Justice determines to be in the

government’s interest.”).

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While 53 Comp. Gen. 301 and 55 Comp. Gen. 408 are widely

viewed as establishing the concept that, in appropriate

circumstances, agency appropriations may be available to pay

private attorney’s fees to defend an employee, several later cases

established some limitations on the concept.

If the employee fails to request Justice Department representation

in a timely fashion, the employee may be forced to bear the

expense of any private legal fees incurred. In B-195314, June 23,

1980, for example, an employee of the Internal Revenue Service

(IRS) was sued for improper disclosure of confidential information.

The employee requested Justice Department representation, but

not until after she had hired a private attorney to file an answer in

order to avoid a default judgment. The Justice Department agreed

to provide representation, but declined to pay the private legal fees,

since the case was not within either of the situations permitted

under the Justice Department regulations. Since the facts could not

support a finding that Justice Department representation was

appropriate but unavailable, IRS appropriations could not be used

either. The need to take prompt action to avoid a default judgment

makes no difference since the regulations expressly provide for

provisional representation on the basis of telephone contact.

If the actions giving rise to the suit are not within the scope of the

employee’s official duties, even though related, there is no

entitlement to government representation and hence, no legal basis

to reimburse attorney’s fees. For example, in 57 Comp. Gen. 444

(1978), a Department of Agriculture employee was sued for libel by

his supervisor because of allegations contained in letters the

employee had written to various public officials. At the employee’s

insistence, Agriculture wrote to the Justice Department to request

representation. However, Agriculture concluded that, while some of

the employee’s actions had been within the scope of his official

duties, others—such as writing letters to the President and to a

Senator—were not. Before Justice reached its decision, the

employee retained private counsel and was successful in having

the suit dismissed. Subsequently, Justice determined that the

employee would not have been eligible for representation since

Agriculture had been unwilling to say that all of the employee’s

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actions were within the scope of his official duties. On this basis,

GAO found no entitlement to government representation and

disallowed the employee’s claim for reimbursement of his legal

fees.

Similarly, GAO denied a claim for legal fees where an Army

Reserve member on inactive duty was arrested by the Federal

Bureau of Investigation (FBI), charged with larceny of government

property, and the charge was later dismissed. The government

property involved consisted of service weapons and ammunition.

The member had been authorized to retain weapons and

ammunition in his personal possession. In any event, the member’s

actions did not result from the performance of required official

duties, but were, at best, permissible under existing regulations.

Therefore, there was no entitlement to either government-furnished

or government-financed representation. B-185612, Aug. 12, 1976.

In 70 Comp. Gen. 647, the Smithsonian Institution used federal

funds to provide legal services to an Interior employee (on detail at

the Smithsonian) who became the subject of federal civil and

criminal investigations. After a big-game hunt in China, some

hunters and the Interior employee (whom the hunters had paid to

serve as their game advisor) were charged with violating the

Endangered Species Act. The Interior employee was also charged

with conflicts of interest in his financial arrangements. GAO held

that the Smithsonian lacked authority to use appropriated funds to

pay the employee’s attorney. 70 Comp. Gen. at 652. GAO

explained:

“Our cases do not support and were not

intended to allow agencies to pursue

their own litigative policies. Instead, they

recognize the availability of agency

appropriations, where otherwise proper

and necessary, for uses consistent with

the litigative policies established for the

United States by the Attorney

General. . . . To allow the use of

appropriated funds [to defend a

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government employee against a federal

criminal investigation and prosecution]

would seriously undermine the litigative

posture of the Attorney General [and

contradict] the clearly expressed intent

of the Congress to centralize control of

government litigation under the Attorney

General, and to restrict the availability of

appropriations in order to reinforce that

policy.”

Id. at 650–51 (citation omitted).

A related situation occurs where an employee incurs legal fees

defending against a fine. In section C. 6. i. of this chapter on Fines

and Penalties, a distinction is drawn between an action that is a

necessary part of an employee’s official duties and an action which,

although taken in the course of performing official duties, is not a

necessary part of them. By logical application of this reasoning,

where the fine itself is not reimbursable, related legal fees are

similarly non-reimbursable. Thus, in 57 Comp. Gen. 270 (1978), the

Comptroller General held that the employing agency could not pay

legal fees incurred by one of its employees defending against a

reckless driving charge, where the Justice Department had

declined to provide representation or to authorize retention of

private counsel. See also B-192880, Feb. 27, 1979 (nondecision

letter); 15 Op. Off. Legal Counsel 57, 63 (1991).

Sometimes, agencies chafe under the maxim (noted above) that

agency appropriations are available, where otherwise proper and

necessary, for uses consistent with the litigative policies

established for the United States by the Attorney General. The

decision in 73 Comp. Gen. 90 (1994) offers a case in point. The

United States Information Agency (USIA) was sued in a sex

discrimination class action. The Justice Department was defending

the lawsuit, and required USIA to support its effort by providing a

secure suite of offices, office supplies and equipment, and four to

six attorneys, the same number of paralegal/document specialists,

along with other support staff, all on a full time basis. Normally,

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USIA’s General Counsel staff included only eight attorneys. For its

part, the Justice Department dedicated two full-time attorneys and

one full-time paralegal to the task force. Justice refused to allow

USIA to contract-out for the additional staff, insisting instead that

USIA hire them under temporary appointments. 73 Comp. Gen. at

90–91. USIA asked GAO to require the Justice Department to

reimburse USIA for its expenses, which USIA estimated at

$4.6 million over fiscal years 1992, 1993, and 1994. Since the

Justice Department gets annual appropriations to cover litigative

expenses, USIA argued, Justice’s annual appropriations had been

improperly augmented. Id. at 91–92.

GAO replied, “[T]here is no legal or equitable requirement that

litigation support costs be shared equally, or even ‘proportionately,’

between Justice and its client agencies.” Id. at 94. The expenses at

issue represented “no more than the cost to USIA of gathering and

presenting to Justice the facts and agency perspectives necessary

to allow Justice to represent USIA in court, a typical example of

agency support for Justice litigators.” Id. GAO explained:

“The limitations on the use of agency

appropriations to provide litigative

services originated as part of the

provisions that created the Justice

Department and invested it with general

responsibility to act as the government’s

litigator. . . These provisions were

intended to reinforce Justice’s control of

the conduct of litigation involving the

United States, not to bar agencies from

using their appropriations to assist in the

defense of litigation. Our cases

‘recognize the availability of agency

appropriations, where otherwise proper

and necessary, for uses consistent with

the litigative policies established for the

United States by the Attorney General.’”

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Id. at 93–94, quoting 70 Comp. Gen. at 650–51 (citing 39 Comp.

Gen. 643 at 646–47 (1960)).

Of course, every rule has its exceptions. In B-289288, July 3, 2002,

a Department of Defense Dependents Schools (DODDS)

employee, who worked at a DODDS school in Japan, had been

arrested, charged, and eventually convicted of criminal violations of

Japanese law involving the importation and possession of

marijuana. Under 10 U.S.C. § 1037, local counsel was retained to

defend the employee in the Japanese courts. Read together, the

plain terms of section 1037 and the regulations implementing it

required DOD to provide legal services to persons “employed by or

accompanying [U.S.] armed forces in an area outside the United

States,” even when the matter is unrelated to and wholly beyond

the scope of the employee’s official duties. 10 U.S.C. § 1037(a).

Funding is to come from “[a]ppropriations available to the military

department concerned . . . for the pay of persons under its

jurisdiction.” 10 U.S.C. § 1037(c). The statute leaves no role for the

Justice Department in these matters.

Questions over reimbursement of legal fees also arise in a number

of non-judicial contexts. In B-193712, May 24, 1979, GAO

concluded that the Central Intelligence Agency (CIA) could

reimburse a staff psychiatrist, who had been directed to prepare a

psychological profile of Daniel Ellsberg as part of his official duties,

for the cost of legal representation before congressional

investigating committees and professional organizations. While the

Justice Department regulations authorize representation at

congressional proceedings on the same basis as in lawsuits

(28 C.F.R. § 50.15(a)), this is not an area within Justice’s exclusive

representation authority. Therefore, while it may be desirable to first

request Justice Department representation, failure to do so in this

case did not preclude the use of CIA appropriations, based on an

administrative determination that the psychiatrist’s activities were

necessary to carry out authorized CIA functions. As in the judicial

context, payment is generally unauthorized where it is not in

furtherance of an official agency interest. See GAO, Postal Service:

Board of Governors’ Contract for Legal Services, GAO/GGD-87-12

(Washington, D.C.: Feb. 10, 1987) (questioning propriety of

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payment of legal fees of Board member incident to congressional

investigation of pre-nomination activities).

The Justice Department will not provide representation in

administrative disciplinary proceedings because of the potential

conflict in the event the employee later sues the government. In

one case, GAO concluded that the Nuclear Regulatory Commission

(NRC) could retain private counsel to represent two NRC staff

members at a disciplinary proceeding where the agency

determined that the employees had been acting within the scope of

their authority. B-127945, Apr. 5, 1979. See also B-192784,

Jan. 10, 1979.

In another case, however, 58 Comp. Gen. 613 (1979), the

Securities and Exchange Commission (SEC) could not reimburse

the legal fees of an SEC employee at a disciplinary hearing even

though the proceeding was ultimately resolved in the employee’s

favor. The distinction is that in the NRC case, the misconduct

charge had been raised and pursued by a third party, whereas in

the SEC case, while the charge was initially raised by an outside

party, it was pursued based on the SEC’s independent

determination to investigate the allegation. The point of this

distinction is that, once the agency determines to investigate the

employee, its interests and those of the employee are no longer

“aligned.” E.g., B-245648.2, July 24, 1992 (even though the

administrative investigation was precipitated by a congressional

subcommittee, since the IRS conducted it, IRS’s interests were no

longer aligned with those of its employee, and the attorney fees

incurred by the employee as a result of the investigation could not

be reimbursed); B-245712.3, May 20, 1992 (Department of

Agriculture employee, subject to an Inspector General investigation

instigated by a third party, may not be reimbursed for the attorney

fees he incurred since the agency, having decided to investigate

the employee, no longer had a common interest with him). In other

words, the interests of the agency and employee have diverged

and it is no longer possible to justify providing representation to the

employee as a necessary and appropriate expense of the agency.

Also, the determination to provide legal representation must be

made at the outset of the proceedings and not at the end based on

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the outcome. GAO reached the same result in 70 Comp. Gen. 628

(1991) (Forest Service investigative report leading to criminal trial

ending in acquittal on all charges), and in B-212487, Apr. 17, 1984

(Inspector General misconduct investigation).

An agency may use its appropriated funds to provide legal

representation for an employee brought before the Merit Systems

Protection Board (MSPB) on a complaint by the MSPB Special

Counsel, if the agency determines that the employee’s conduct was

in furtherance of or incident to carrying out his or her official duties,

and that providing representation would be in the government’s

interest. 67 Comp. Gen. 37 (1987); 61 Comp. Gen. 515 (1982). Of

course, this principle is not limited to cases pending before the

MSPB. See, e.g., B-251141, May 3, 1993 (federal criminal

investigation). If the agency makes the required determinations, the

expenditure is viewed as a “necessary expense” of the agency or

function. While the necessary expense theory is the legal basis, the

underlying policy is expressed in the following excerpt:

“Surely federal employees must be

answerable for illegal conduct. Yet it can

be in the interest of neither the

government as a whole nor the

taxpayers we serve to have employees

afraid to function out of fear of being

bankrupted by a lawsuit arising out of

the good faith performance of their

jobs.”

67 Comp. Gen. at 37–38; see also 15 Op. Off. Legal Counsel at

62–63.

Government-financed legal counsel was also held improper at a

grievance hearing where the legal liability of the employee was not

an issue and the purpose of the hearing was solely to develop

facts. 55 Comp. Gen. 1418.

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Appropriated funds may not be used to pay legal fees incurred by

an “alleged discriminating official” in a discrimination complaint.

61 Comp. Gen. 411 (1982); B-201183, Feb. 1, 1985.

Where reimbursement of legal fees under the above principles is

authorized, it is a discretionary payment and not a legal entitlement

of the employee. The agency’s responsibilities and discretion are

summarized in the following paragraph from 67 Comp. Gen. 37, 38

(1987):

“[I]t should be understood that payment

in this type of case is not a legal liability

on the part of the agency, but is

essentially a discretionary payment. As

such, an agency is not required to pay

the entire amount of the fees actually

charged in any given case. The

controlling concept under fee-shifting

statutes is a ‘reasonable’ attorney’s fee,

and there is a vast body of judicial

precedent applying this concept under

statutes such as the Back Pay Act and

Title VII of the Civil Rights Act. This

body of precedent is available to provide

guidance to agencies in evaluating the

reasonableness of claims. Also, since

payment is discretionary, an agency is

free to formulate administrative policies

with respect to treatment of claims of

this type. Of course, any such policies

should be applied fairly and

consistently.”

The preceding cases have all involved legal fees incurred for

representation of the employee. A different situation occurred in

59 Comp. Gen. 489 (1980). In 1969, local police raided a Chicago

apartment housing members of the Black Panther Party. The raid

erupted into violence and two of the occupants were killed.

Subsequently, the surviving occupants and the estates of the

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deceased sued state law enforcement officials and several agents

of the Federal Bureau of Investigation (FBI), alleging violations of

civil rights and the Illinois wrongful death statute. The Justice

Department represented the federal defendants, who were being

sued in their individual capacities.

As the litigation progressed, a possibility emerged that the court

might grant the plaintiffs an award of attorney’s fees, in part against

the FBI agents. The Justice Department asked whether FBI

appropriations would be available to reimburse such an award. In

the past, the Comptroller General has at times declined to render

decisions on questions which are premature and essentially

hypothetical. Here, however, in view of the legal strategy proposed

by the Justice Department (the case also involved issues raising

the potential liability of the United States), it was important to know

if the fees could be reimbursed because if they could not, it might

be necessary for the defendants to retain private counsel to

represent their interests. The Comptroller General resolved the

question by applying the necessary expense doctrine. If the FBI

made an administrative determination, supported by substantial

evidence, that the actions giving rise to the award constituted

officially authorized conduct and were taken as a necessary part of

the defendants’ official duties, it could reimburse the award from its

Salaries and Expenses appropriation.

(3) Suits unrelated to federal employees

Finally, the concept of using agency appropriations for legal fees

when Justice Department representation is unavailable has arisen

in a couple of contexts that are unrelated to suits against

government employees. Under 25 U.S.C. § 175, the U.S. Attorneys

will generally represent Indian tribes, and under 25 U.S.C. § 13, the

Bureau of Indian Affairs may spend money appropriated for the

benefit of Indians for general and incidental expenses relating to

the administration of Indian affairs. Construing these provisions, the

Comptroller General has held that the Bureau of Indian Affairs

could use appropriated funds to pay legal fees incurred by Indian

tribes in judicial litigation, including intervention actions and cases

where the tribe is the plaintiff, when conflict of interest makes

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Justice Department representation unavailable. However, the

Bureau must first give the Justice Department the option of

providing or declining to provide representation. The Bureau may

also use appropriated funds for legal fees of Indian tribes in

administrative proceedings in which the Justice Department does

not participate. 56 Comp. Gen. 123 (1976).

The courts have recognized that this authority carries with it

substantial discretion. For example, in Hopi Tribe v. United States,

55 Fed. Cl. 81 (2002), suit was brought to recover legal fees and

expenses incurred in litigation pursuant to the Navajo-Hopi

Settlement Act of 1974. The court held that, under 25 U.S.C. §§ 13,

175, the Justice Department and the Bureau of Indian Affairs both

have broad discretion in determining whether to provide legal

services or reimbursement for the costs of obtaining them

elsewhere. Among other things, the court explained that because

Congress appropriates lump sums to Justice and the Bureau for

these purposes, the question of how best to use those sums is

committed to agency discretion.

Hopi Tribe, 55 Fed. Cl. at 97–98,

citing Lincoln v. Vigil, 508 U.S. 182, 192–95 (1993), quoting both

55 Comp. Gen. 307, 319 (1975), and Principles of Federal

Appropriations Law, at 6-159 (2

Ed. 1992).

(4) Claims by federal employees

(a) Discrimination proceedings

Title VII of the Civil Rights Act of 1964, made applicable to the

federal government by the Equal Employment Opportunity

The Office of Legal Counsel (OLC) has wrestled with a related issue: whether the

Justice Department may defend tribes or tribal employees against suits for constitutional

torts. OLC concluded that the 1990 amendments to the Indian Self-Determination and

Education Assistance Act of 1975 cover only those torts for which the Federal Tort Claims

Act waives the sovereign immunity of the United States and do not authorize or otherwise

address representation of tribes or tribal employees who are sued in their individual

capacities for constitutional torts. Opinion of the Office of Legal Counsel, for the Assistant

Attorney General Civil Division, Coverage Issues Under The Indian Self-Determination

Act, Apr. 22, 1998.

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Amendments of 1972, broadly prohibits employment discrimination

based on race, color, religion, sex, or national origin. Two statutory

provisions are relevant to the awarding of attorney’s fees. Judicial

awards are governed by 42 U.S.C. § 2000e-5(k), which authorizes

courts to award reasonable attorney’s fees to nonfederal prevailing

parties. In addition, 42 U.S.C. § 2000e-16(b) directs the former Civil

Service Commission to enforce Title VII in the federal government

“through appropriate remedies . . . as will effectuate the policies of

this section.” The enforcement function was transferred to the

Equal Employment Opportunity Commission (EEOC) in 1978.

The concept of administrative fee awards developed largely as the

result of a series of court decisions. First, the courts held that a

court can award attorney’s fees to include compensation for

services performed in related administrative proceedings as well as

the lawsuit itself. Parker v. Califano, 561 F.2d 320 (D.C. Cir. 1977);

Johnson v. United States, 554 F.2d 632 (4

Cir. 1977). Then, the

District Court for the District of Columbia held that Title VII

authorized the administrative awarding of attorney’s fees. Patton v.

Andrus, 459 F. Supp. 1189 (D.D.C. 1978); Smith v. Califano,

446 F. Supp. 530 (D.D.C. 1978). However, this view was not

unanimous. The court in Noble v. Claytor, 448 F. Supp. 1242

(D.D.C. 1978), held that there was no authority for administrative

awards and that only the court could award fees.

GAO was initially inclined toward the view expressed in the Noble

decision. See B-167015, Apr. 7, 1978. However, GAO reconsidered

its position and subsequently announced that it would not object to

the issuance of regulations by the EEOC to include the awarding of

attorney’s fees at the administrative level. B-193144, Nov. 3, 1978;

B-167015, Sept. 12, 1978; B-167015, May 16, 1978.

EEOC issued interim regulations on April 9, 1980 (45 Fed.

Reg. 24130), and subsequently finalized them. The regulations,

found at 29 C.F.R. § 1614.501, provide for awards of reasonable

attorney’s fees both by EEOC and by the agencies themselves.

With the issuance of these regulations, federal agencies now have

the requisite authority. B-199291, June 19, 1981; B-195544, May 7,

1980.

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Attorney’s fees awarded under the EEOC regulations are payable

from the employing agency’s operating appropriations and not from

the permanent judgment appropriation established by 31 U.S.C.

§ 1304.

64 Comp. Gen. 349, 354 (1985); B-199291, June 19,

1981. Cf. B-257334, June 30, 1995 (except as specifically provided

by law, the permanent judgment appropriation is not available to

pay administrative awards, including administrative settlements for

compensatory damages under Title VII).

GAO will not review awards of, nor consider claims for, attorney’s

fees under Title VII. 69 Comp. Gen. 134 (1989); 61 Comp.

Gen. 326 (1982); B-259632, June 12, 1995.

Title VII is not the only statute prohibiting discrimination in federal

employment. Discrimination on the basis of age or handicap is

prohibited, respectively, by the Age Discrimination in Employment

Act, 29 U.S.C. §§ 621–634, and the Rehabilitation Act of 1973,

As noted above, this chapter does not address the payment of litigative awards, which

is covered in Chapter 14. Accordingly, the text here is speaking only about the payment of

administrative awards.

We note in passing, however, that 2002 legislation has changed the payment process for

litigative attorney fees and other litigative awards rendered against certain federal

agencies (including “executive agencies” as defined in 5 U.S.C. § 105) arising from claims

of discrimination or whistle-blowing retaliation against federal employees, former federal

employees, or applicants for federal employment. Under this law, known as the

“Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002” (or

“NoFEAR,” for short), these litigative awards will now be paid initially from the permanent,

indefinite Judgment Fund appropriation. Within a reasonable time thereafter, the federal

agency involved must reimburse the Judgment Fund from its operating appropriations.

See Pub. L. No. 107-174, § 1(a), 116 Stat. 566 (May 15, 2002), codified at 5 U.S.C.

§ 2301 note. As a result of this law, all awards against federal agencies for discrimination

or whistle-blowing retaliation against federal employees, former federal employees, or

applicants for federal employment (including associated attorney fee awards)—whether

litigative or administrative—will ultimately be paid from agency operating appropriations,

which is one of the main goals Congress intended the new law to accomplish. S. Rep.

No. 107-143, at 1–3, 7–8 (2002).

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29 U.S.C. §§ 701–718. The EEOC has enforcement responsibility

for federal employment under these statutes as well as Title VII.

Initially, GAO had held that the EEOC could provide by regulation

for the awarding of attorney’s fees at the administrative level under

the Age Discrimination in Employment Act and the Rehabilitation

Act, just as in the Title VII situation. 59 Comp. Gen. 728 (1980).

Subsequently, the courts held that the Age Discrimination in

Employment Act did not authorize fees at the administrative level,

and GAO partially overruled 59 Comp. Gen. 728 in 64 Comp. Gen.

349 (1985). However, that portion of 59 Comp. Gen. 728 dealing

with the Rehabilitation Act remains valid. See also B-204156,

Sept. 13, 1982. This treatment is consistent with the EEOC

regulations, which authorize administrative fee awards under Title

VII and the Rehabilitation Act, but not the Age Discrimination in

Employment Act. See 29 C.F.R. § 1614.501(e).

The situation may become more complicated where an employee

alleges discrimination on more than one ground. In 69 Comp.

Gen. 469 (1990), an agency settled a complaint in which the

employee had alleged both age and sex discrimination. Based on

the agency’s assertion that the result would have been the same if

the employee had pursued only the sex discrimination charge, GAO

concluded that the agency was not required to “apportion” the

attorney’s fee claim between the two charges and that the entire

fee claim could be paid.

(b) Other employee claims

Prior to October 1978, there was no authority to award attorney’s

fees to federal employees in connection with claims, grievances, or

administrative proceedings involving back pay, adverse personnel

actions, or other personnel matters. During this time period, GAO

EEOC is not responsible for the entire Rehabilitation Act. The Architectural and

Transportation Barriers Compliance Board is responsible for insuring compliance with the

standards prescribed in the Architectural Barriers Act of 1968. 29 U.S.C. § 792.

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consistently denied claims for attorney’s fees based on the general

rule barring the payment of legal fees in the absence of statutory

authority. E.g., 52 Comp. Gen. 859 (1973) (administrative

grievance proceeding); B-167461, Aug. 9, 1978 (unfair labor

practice proceeding); B-184200, Apr. 13, 1976 (reduction in grade);

B-183038, May 9, 1975 (improper removal for disciplinary reasons).

In October 1978, the Civil Service Reform Act added two attorney’s

fee provisions as part of its general overhaul of the system.

First, it authorized the Merit Systems Protection Board to require

the employing agency to pay reasonable attorney’s fees if the

employee is the prevailing party and the Board determines that the

fee award is “warranted in the interest of justice.” 5 U.S.C.

§ 7701(g). Fees awarded under this provision are payable directly

to the attorney, not the party.

Jensen v. Department of

Transportation, 858 F.2d 721 (Fed. Cir. 1988).

Second, it added an attorney’s fee provision to the Back Pay Act,

5 U.S.C. § 5596. Now, if an employee, on the basis of a timely

appeal or an administrative determination, including grievance or

unfair labor practice proceedings, is found by “appropriate

authority”

to have suffered a loss or reduction of pay as a result of

an “unjustified or unwarranted personnel action,” the employee is

entitled to recover reasonable attorney’s fees in addition to back

pay. Id. § 5596(b). See generally B-258290, June 26, 1995;

B-231813, Aug. 22, 1989.

Of course, different statutes often dictate different results with respect to who should

receive payment. Cf., e.g., Heston v. Secretary of Health & Human Services, 41 Fed.

Cl. 41, 45–46 (1998) (distinguishing the result in Jensen, supra.)

The term “appropriate authority” includes the head of the employing agency, a court,

the Office of Personnel Management, the Merit Systems Protection Board (but not the

MSPB Special Counsel, see 59 Comp. Gen. 107 (1979)), the Comptroller General (see,

e.g., 63 Comp. Gen. 170 (1984) and 62 Comp. Gen. 464 (1983)), the Equal Employment

Opportunity Commission, the Federal Labor Relations Authority, plus a few others.

5 C.F.R. § 550.803.

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Regulations to implement the Back Pay Act are issued by the Office

of Personnel Management and are found at 5 C.F.R. part 550,

subpart H. Under the regulations, fees may be awarded only if the

“appropriate authority” determines that payment is in the interest of

justice, applying standards established by the Merit Systems

Protection Board under 5 U.S.C. § 7701. 5 C.F.R. § 550.807(c)(1).

The standards are set forth in Allen v. United States Postal Service,

2 M.S.P.R. 420 (1980), and discussed in Sterner v. Department of

the Army, 711 F.2d 1563 (Fed. Cir. 1983), and in 62 Comp.

Gen. 464. For “[a] review of the case law,” see Abramson v. United

States, 45 Fed. Cl. 149, 151–52 (1999)

GAO will not review decisions awarding or declining to award, nor

consider claims for, fees under 5 U.S.C. § 7701. B-257593,

Aug. 15, 1994 (GAO has no authority to review any MSPB decision,

citing, among others, 61 Comp. Gen. 578 (1982)—disavowing

authority to review fee awards under section 7701). See also

63 Comp. Gen. at 174; 61 Comp. Gen. 290 (1982). The Back Pay

Act regulations provide for review of fee determinations only “if

provided for by statute or regulation.” 5 C.F.R. § 550.807(g). Thus,

absent some statute or regulation to the contrary, GAO will similarly

decline to review fee determinations under 5 U.S.C. § 5596 where

the “appropriate authority” is someone other than the Comptroller

General. 61 Comp. Gen. 290.

While GAO will not “review” such matters, it may provide its opinion

on them, when requested by the agency or the accountable officer.

For example, in B-253507, Jan. 11, 1994, the National Archives

and Records Administration (NARA) asked GAO if it could pay

attorney fees as part of an administrative settlement, even though

NARA had not determined that an unjustified or unwarranted

personnel action had occurred. NARA argued that because the

employee could have appealed to the Merit Systems Protection

Board and possibly obtained attorney fees (as discussed in the

following paragraph), NARA had implied authority to award attorney

fees as part of its settlement. GAO disagreed. NARA had no

statutory authority to pay attorney fees under the facts and laws

applicable to the case. The fact that the employee could have

appealed and might have won did not authorize NARA and the

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employee to behave as if the employee actually had appealed and

won. Id. See also B-258290, June 26, 1995 (advance decision,

pursuant to 31 U.S.C. § 3529, disapproved payment of attorney

fees and other amounts arising from a grievance hearing wherein

the agency declined to find an unjustified or unwarranted personnel

action); B-257893, June 1, 1995 (certifying officer granted relief

from liability, pursuant to 31 U.S.C. § 3528(b)(1)(B), for the

erroneous payment which was the subject of B-253507).

Under a provision added in 1989, if an employee, former employee,

or applicant for employment is the prevailing party before the Merit

Systems Protection Board (MSPB), and MSPB’s decision is based

on a finding of a “prohibited personnel practice” (defined in 5 U.S.C.

§ 2302), “the agency involved shall be liable” to the complainant for

reasonable attorney’s fees. The same liability applies with respect

to appeals from the Board, regardless of the basis of the decision.

5 U.S.C. § 1221(g), added by the Whistleblower Protection Act of

1989, Pub. L. No. 101-12, 103 Stat. 16, 30 (Apr. 10, 1989).

Employee claims outside the scope of the Back Pay Act or the

MSPB authority remain subject to the general rule prohibiting fee

awards except under specific statutory authority. Thus,

administrative claims for attorney’s fees were denied in the

following situations:

• Applicant for employment with Nuclear Regulatory Commission

successfully challenged adverse information in security

investigation file. B-194507, Aug. 20, 1979.

• Nuclear Regulatory Commission employee detailed in violation

of the Whistleblower Protection Act (WPA) as retaliation for the

disclosure of government illegality, waste, and corruption.

Although WPA does provide for attorney fees in certain

circumstances, employee used agency grievance procedures

not subject to WPA. 72 Comp. Gen. 289 (1993).

• Employee obtained continuance in divorce proceedings.

Continuance was necessitated by temporary duty assignment.

B-197950, Sept. 30, 1980. Cf. 70 Comp. Gen. 329 (1991) (legal

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fees incurred to search title, prepare abstracts, conveyances,

and other documents required in the chain of conveying

property interest from seller to buyer that are normally

reimbursable under Federal Travel Regulations (FTR), ¶ 2-6.2c,

but may not be reimbursed here as original court order was part

of a divorce settlement; modification of divorce order constituted

continuation of a litigated matter; litigation costs may not be

reimbursed under the FTR); B-242154, Mar. 28, 1991 (FTR

does not allow reimbursement of litigation costs, even though

employee “sustained a loss that he would not have sustained

had he not transferred in the interest of the government”).

• A military member’s legal fees incident to custody proceedings,

and medical insurance expenses for his adopted children are

not “qualifying adoption expenses” under section 638 of the

National Defense Authorization Act for Fiscal Years 1988 and

1989, Pub. L. No. 100-180, § 638, 101 Stat. 1019, 1106–08

(Dec. 4, 1987), as amended, and may not be reimbursed (but

legal fees incident to the actual petition and order of adoption,

as well as the amendment of birth certificates for the member’s

adopted children are reimbursable from agency funds under the

Act). B-235606, Feb. 7, 1991.

• Former employee successfully prosecuted administrative patent

interference action against National Aeronautics and Space

Administration. B-193272, Aug. 21, 1981.

• Fees incurred incident to prosecution of claim for relocation

expenses. 68 Comp. Gen. 456 (1989); B-186763, Mar. 28,

1977.

• Employee, selling residence incident to transfer of duty station,

incurred legal fees in excess of customary range of charges for

services rendered. B-200207, Sept. 29, 1981 (legal fees within

customary range of charges are reimbursable; see cases cited).

Similarly, see B-252531, Aug. 13, 1993 (attorney fees claimed

were duplicative of attorney fees already paid as part of the

services provided by the relocation service company).

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• Administrative grievance proceeding involving neither an appeal

to the Merit Systems Protection Board nor a reduction or denial

of pay or allowances. 68 Comp. Gen. 366 (1989); 61 Comp.

Gen. 411 (1982); B-253507, Jan. 11, 1994, at n.5.

The same rule applies to expert witness expenses incurred by an

employee—they are reimbursable only under specific statutory

authority. In 67 Comp. Gen. 574 (1988), a Department of Energy

employee had requested an administrative hearing incident to a

security clearance. The agency, due to the sudden unavailability of

its witness, was forced to reschedule the hearing. The employee’s

witness, a clinical psychologist, was unable to reschedule his

patients to fill the now freed-up time slot, and charged the

employee for the 3 hours he had set aside to testify. GAO found no

authority to reimburse the employee.

(5) The Criminal Justice Act

The Criminal Justice Act (CJA), 18 U.S.C. § 3006A, was originally

enacted in 1964 and substantially amended on several subsequent

occasions. Reflecting a series of Supreme Court decisions on the

right of a criminal defendant to counsel, the CJA establishes a

system of government-financed counsel for indigent defendants in

federal criminal cases. In general, any person charged with a felony

or misdemeanor, including juvenile delinquency, and who is

“financially unable to obtain adequate representation” is eligible for

counsel under the CJA. Counsel is to be provided at every stage of

the proceeding, from the first appearance before a magistrate

through appeal, including appropriate ancillary matters. As the

Supreme Court has expanded the right to counsel to encompass

every meaningful stage at which significant rights may be affected

(see, e.g., Miranda v. Arizona, 384 U.S. 436 (1966)), the right to

counsel under the CJA has similarly expanded.

The lawyers, who are court-appointed, may be private attorneys

appointed on an individual basis or members of a Federal Public

Defender Organization or Community Defender Organization

established and funded under the Act. The attorneys are paid at

rates of compensation specified in the statute. Appropriations are

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made to the Judiciary to carry out the CJA and payments are

supervised by the Administrative Office of the United States Courts.

(6) Types of actions covered

Originally, GAO had held that the Criminal Justice Act (CJA) did not

apply to probation revocation proceedings. 45 Comp. Gen. 780

(1966). Subsequently, following the Supreme Court’s holding in

Mempa v. Rhay, 389 U.S. 128 (1967), GAO modified the 1966

decision to recognize the applicability of the Act to probation

proceedings coupled with deferred sentencing. However, GAO

continued to hold the Act inapplicable to a “simple” probation

revocation proceeding (one not involving deferred sentencing).

50 Comp. Gen. 128 (1970). Two months after the issuance of

50 Comp. Gen. 128, Congress passed Public Law 91-447,

substantially amending the CJA. Pub. L. No. 91-447, 84 Stat. 916

(Oct. 14, 1970). One of the changes made by these amendments

was to expressly cover probation proceedings. The legislative

history of Public Law 91-447 indicates that it was intended to

recognize Mempa. H.R. Rep. No. 91-1546, at 7 (1970). GAO has

not had occasion to issue any further decisions on probation

proceedings.

Another change made by the 1970 amendments was to add parole

revocation proceedings, with counsel to be provided at the

discretion of the court or magistrate. Subsequent legislation made

appointment of counsel mandatory, and the Comptroller General

held that appropriations under the CJA are available to provide

counsel for indigents at parole revocation and parole termination

proceedings under the Parole Commission and Reorganization Act.

B-156932, June 16, 1977.

Representation may be provided, at the discretion of the court or

magistrate, to an indigent prosecuting a writ of habeas corpus

(28 U.S.C. §§ 2241, 2254, 2255). 18 U.S.C. § 3006A(a)(2). This

authority does not extend to civil rights actions brought by indigent

prisoners under 42 U.S.C. § 1983. 53 Comp. Gen. 638 (1974);

B-139703, June 19, 1975.

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In 51 Comp. Gen. 769 (1972), GAO held that the CJA applied to

prosecutions brought in the name of the United States in the District

of Columbia Superior Court and Court of Appeals. In 1974,

Congress passed the District of Columbia Criminal Justice Act

(Pub. L. No. 93-412, 88 Stat. 1089 (Sept. 3, 1974)), which

established a parallel criminal justice system for the District of

Columbia patterned after 18 U.S.C. § 3006A. With the enactment of

this legislation, the CJA was amended to remove the District of

Columbia courts from its coverage. GAO considered the D.C.

statute in 61 Comp. Gen. 507 (1982) and construed it to include

sentencing. The result should apply equally to the federal statute

inasmuch as the language being construed is virtually identical in

both laws.

(7) Miscellaneous cases

When a court appoints an attorney under the Criminal Justice Act

(CJA), the government’s contractual obligation, and hence the

obligation of appropriations, occurs at the time of the appointment,

not when the court reviews the voucher for payment, even though

the exact amount of the obligation is not determinable until the

voucher is approved. Where fiscal year appropriations are involved,

the Administrative Office of the U.S. Courts must record the

obligation based on an estimate, and the payment is chargeable to

the fiscal year in which the appointment was made. 50 Comp. Gen.

589 (1971).

In B-283599, Sept. 15, 1999, the Executive Officer of the DC

Courts told GAO that he anticipated fiscal year 1999 appropriations

for CJA claims would be exhausted on September 10, 1999. How,

he asked, should the courts respond to CJA claims received during

the remainder of fiscal year 1999—should the courts suspend

approving CJA vouchers in order to avoid violating the

Antideficiency Act? GAO answered in the negative, as CJA

representation is a mandatory expense. An overobligation entirely

attributable to a mandatory spending program, like CJA, would be

an overobligation authorized by law and, therefore, not a violation

of the Antideficiency Act. See 31 U.S.C. §§ 1341(a)(1)(A) and (B).

However, this did not mean that the vouchers could be paid

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immediately on approval. A legally available funding source would

still be required before any authorized overobligations could be

liquidated. Fortunately, GAO noted, a bill then pending in Congress

would provide funds for this purpose. B-283599. See also GAO,

D.C. Courts: Planning and Budgeting Difficulties During Fiscal Year

1998, GAO/AIMD/OGC-99-226 (Washington, D.C.: Sept. 16, 1999),

at 11–13. (For a full discussion of the law governing federal

obligations, see Chapter 7.)

An attorney appointed and paid under the CJA does not enter into

an employer-employee relationship with the United States for

purposes of the dual compensation laws. 44 Comp. Gen. 605

(1965). (This decision predated the 1970 amendments to the CJA,

which created the Federal Public Defender Organizations, and

would presumably not apply to full-time salaried attorneys

employed by such organizations.)

An attorney regularly employed by the federal government who is

appointed by a court to represent an indigent defendant, in either

federal or state cases, may not be excused from official duty

without loss of pay or charge to annual leave. 61 Comp. Gen. 652

(1982); 44 Comp. Gen. 643 (1965).

An attorney appointed under the CJA is expected to use his or her

usual secretarial resources. As a general proposition, secretarial

and other overhead expenses are reflected in the statutory fee and

are not separately reimbursable. However, there may be

exceptional situations, and if the attorney can demonstrate to the

court that extraordinary stenographic or other secretarial-type

expenses are necessary, they may be reimbursed from Criminal

Justice Act appropriations. 53 Comp. Gen. 638 (1974).

(8) The Equal Access to Justice Act

A significant diminution of the American Rule occurred in 1980 with

the enactment of the Equal Access to Justice Act (EAJA), which

authorizes the awarding of attorney’s fees and expenses in a

number of administrative and judicial situations where fee-shifting

had not been previously authorized. See generally 28 U.S.C.

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§ 2412. This section describes the authority for administrative

awards.

The administrative portion of the EAJA is found in 5 U.S.C. § 504.

There are four key elements to the statute:

• The administrative proceeding generating the fee request must

be an “adversary adjudication,” defined as an adjudication

under the Administrative Procedure Act in which the position of

the United States is represented by counsel or otherwise.

5 U.S.C. §§ 504(a)(1), (b)(1)(C). The definition excludes

adjudications to fix or establish a rate or to grant or renew a

license, but proceedings involving the suspension, annulment,

withdrawal, limitation, amendment, modification, or conditioning

of a license are covered if they otherwise qualify.

(Application

in the context of government procurement is discussed

separately later.)

• The party seeking fees must be a “prevailing party other than

the United States.” 5 U.S.C. § 504(a)(1). The meaning of

“prevailing party” is to be determined by reference to case law

under other fee-shifting statutes.

Of course before you can be

a “prevailing party” you must first be a “party,” and the law

prescribes financial and other eligibility criteria. 5 U.S.C.

§ 504(b)(1)(B).

• The law is not self-executing. The party must, within 30 days

after final disposition of the adversary adjudication, submit an

application to the agency showing that it is a prevailing party

and meets the eligibility criteria, documenting the amount

sought, and alleging that the position of the United States was

not “substantially justified.” 5 U.S.C. § 504(a)(2). If the United

S. Rep. No. 96-253, at 17 (1979) (report of the Senate Judiciary Committee).

S. Rep. No. 96-253, at 7; H.R. Rep. No. 96-1418, at 11 (1980) (report of House

Judiciary Committee).

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States appeals the underlying merits, action on the application

must be deferred until final resolution of the appeal. Id.

• If the above criteria are met, the fee award is mandatory unless

the agency adjudicative officer finds that “the position of the

agency was substantially justified or that special circumstances

make an award unjust.” 5 U.S.C. §§ 504(a)(1), (a)(4).

Substantial justification or lack thereof is to be determined “on

the basis of the administrative record as a whole, which is made

in the adversary adjudication.” Id. The “position of the agency”

includes the agency’s action or failure to act which generated

the adjudication as well as the agency’s position in the

adjudication itself. 5 U.S.C. § 504(b)(1)(E). A party who “unduly

and unreasonably protracted” the proceedings risks reduction of

the award. 5 U.S.C. § 504(a)(3).

The award includes “fees and other expenses.” “Fees” means a

reasonable attorney’s fee, generally capped at $125 per hour

unless the agency determines by regulation that cost-of-living

increases or other special factors justify a higher rate.

5 U.S.C.

§ 504(b)(1)(A). The Supreme Court held that “fees” includes any

paralegal fees that the prevailing party incurred either through its

litigating attorney or independently, so the prevailing party is

entitled to recover fees for the paralegal services at the market rate

for such services. Richlin Security Service Co. v. Chertoff, 553 U.S.

571 (2008). “Other expenses” include such items as expert witness

expenses and the necessary cost of studies, analyses, engineering

A position is “substantially justified” if it is “justified to a degree that could satisfy a

reasonable person.” Pierce v. Underwood, 487 U.S. 552, 565 (1988). See also

Immigration & Naturalization Service v. Jean, 496 U.S. 154, 157 n.6 (1990); Dantran,

Inc. v. Department of Labor, 246 F.3d 36, 40–41 (1

Cir. 2001).

Pierce v. Underwood, supra, identified a number of factors that may not be used as

“special factors” to justify exceeding the cap: novelty and difficulty of issues; undesirability

of the case; work and ability of counsel (except for counsel with “distinctive knowledge or

specialized skill” relevant to the case); results obtained; customary fees and awards in

other cases; contingent nature of the fee. Pierce, 487 U.S. at 571–74. See also, e.g.,

Hyatt v. Barnhart, 315 F.3d 239, 249 (4

Cir. 2002).

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reports, etc. 5 U.S.C. § 504(b)(1)(A). See also Astrue v. Ratliff,

560 U.S. 586 (2010).

The statute requires agencies to establish, by regulation, uniform

procedures for administering the statute, in consultation with the

Administrative Conference of the United States (ACUS). 5 U.S.C.

§ 504(c)(1). In 1986, ACUS published a set of nonbinding model

rules, found at 51 Fed. Reg. 16659 (May 6, 1986). Among other

things, the supplementary information statement for those rules,

advised agencies that the statutory requirement to consult with

ACUS will be met by simply notifying ACUS of the publication of

proposed regulations, or by sending ACUS a pre-publication draft

for review and comment.

Payment of administrative EAJA awards is addressed in

5 U.S.C. § 504(d):

“Fees and other expenses awarded

under this subsection shall be paid by

any agency over which the party

prevails from any funds made available

to the agency by appropriation or

otherwise.”

We have not located any update to these model rules. A 2013 report from the ACUS

Chairman stated that “[a] quarter century later, even though the Model Rules have not

been updated to reflect more recent amendments to the Act, the 1986 Revision [to the

Model Rules] still contains useful guidance, as noted most recently by the Bureau of

Consumer Financial Protection when it issued an interim final rule to implement the Equal

Access to Justice Act (77 FR 39117, June 29, 2012).” Administrative Conference of the

United States, Report of the Chairman on Agency and Court Awards in FY 2010 Under

the Equal Access to Justice Act, Jan. 9, 2013, available at www.acus.gov/report/equal-

access-justice-act-awards-fy-2010-report-chairman (last visited July 5, 2017).

This provision was added in 1985. The payment provision in the original EAJA was

complex and confusing. The amendment was designed to preclude payment under

31 U.S.C. § 1304, the permanent judgment appropriation.

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As with judicial awards under 28 U.S.C. § 2412(d), 5 U.S.C. § 504

awards are payable from agency operating appropriations with no

need for specific, line-item, or “earmarked” appropriations.

The obligation of the agency’s appropriations occurs when the

agency issues its decision on the fee application. 62 Comp.

Gen. 692, 699 (1983). This determines the fiscal year to be

charged. Sometimes, the logic of this rule eludes an agency which

is otherwise striving to be prudent and responsible in the

management of its legal responsibilities and fiscal obligations. In

B-255772, Aug. 22, 1995, the Justice Department and the National

Endowment for the Arts (NEA) sought GAO’s guidance regarding

whether the NEA could pay an EAJA attorney fee settlement using

unobligated NEA appropriations from previous fiscal years. For

several years, NEA had realized that a then pending case would

eventually require NEA to pay EAJA attorney fees from its

appropriations pursuant to 28 U.S.C. § 2412(d)(4). In anticipation of

this, NEA began setting aside a portion of its annual appropriations

across several fiscal years so that, when the time to pay finally

arrived, NEA would have funds adequate to meet its obligations

without adversely affecting other NEA operations. However, when

the settlement was finally completed, questions arose about

whether the funds NEA set aside could legally be used for this

purpose. Of course, they could not. As a general principle, “[a] court

or administrative award ‘creates a new right’ in the successful

claimant, giving rise to new government liability.” B-255772, quoting

63 Comp. Gen. 308, 310 (1984). NEA had no obligation to pay the

claims until the settlement agreement was final. In the absence of

appropriate statutory authority, the funds NEA had set aside in

previous fiscal years had expired, and were not legally available to

liquidate the obligation of a later fiscal year—the year in which the

settlement agreement became final. Id. See also B-257061,

July 19, 1995 (except as otherwise provided by law, (a) FAA must

use appropriations available at time of award to pay attorney fees

Authorities for this proposition are cited in Chapter 14 in our discussion of the judicial

portion of EAJA, which has an identical payment provision.

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from a Title VII discrimination complaint, and (b) had FAA set aside

appropriations in a prior fiscal year, when the complaint was filed,

they would not have been available for this purpose).

Section 504 permits fee awards to intervenors who otherwise meet

the statutory criteria. 62 Comp. Gen. at 693. As noted in that

decision, the Administrative Conference expressed the same

position in the preamble to an earlier version of the model rules,

although commenting further that intervenors would rarely be in a

position to actually receive awards. Id. at 693–94. A specific

appropriation act restriction on compensating intervenors will

override the more general authority of 5 U.S.C. § 504. Electrical

District No. 1 v. Federal Energy Regulatory Commission, 813 F.2d

1246 (D.C. Cir. 1987); 62 Comp. Gen. 692. See also Business &

Professional People for the Public Interest v. Nuclear Regulatory

Commission, 793 F.2d 1366 (D.C. Cir. 1986) (court agreed with

result in 62 Comp. Gen. 692, implicitly accepting premise that EAJA

itself could apply to intervenors).

We previously reviewed statutory authorities for awarding attorney’s

fees in a variety of matters involving federal employees. There are

conflicting court rulings concerning whether the Merit Systems

Protection Board (MSPB) may award attorney’s fees in cases

involving employee tenure. The Third Circuit concluded that

employees may recover attorney’s fees in such cases. Miller v.

United States, 753 F.2d 270 (3

Cir. 1985). Subsequently, the

Federal Circuit noted that EAJA authorizes the award of attorney

fees in an “adversary adjudication” in administrative proceedings.

Gavette v. Office of Personnel Management, 808 F.2d 1456, 1461

(Fed. Cir. 1986). In turn, “adversary adjudication” is defined in

5 U.S.C. § 554(a) and excludes cases involving the “tenure of an

employee.” Id. Accordingly, the Federal Circuit concluded that

MSPB may not award attorney’s fees in cases involving the tenure

of an employee. Id. at 1462. The Federal Circuit noted its

disagreement with the Third Circuit’s earlier ruling in Miller. Id. at

1462–1463. See also Olsen v. Department of Commerce, Census

Bureau, 735 F.2d 558 (Fed. Cir. 1984); Hoska v. Department of the

Army, 694 F.2d 270 (D.C. Cir. 1982).

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Prior to Gavette, the MSPB had taken the position that the

existence of other fee-shifting statutes made EAJA inapplicable.

Social Security Administration v. Goodman, 28 M.S.P.R. 120, 126

(1985). However, in view of the implication of Gavette that EAJA

might apply in cases not involving employee selection or tenure, the

MSPB reopened the Goodman appeal, found that fees could be

awarded in that case under 5 U.S.C. § 7701, and declined to

comment further on the applicability of EAJA. Social Security

Administration v. Goodman, 33 M.S.P.R. 325, 326–27 n.1 (1987).

See also, e.g., NLRB v. Boyce, 51 M.S.P.R. 295, 300 n.4 (1991).

GAO held in 68 Comp. Gen. 366 (1989) that EAJA did not

authorize a fee award to an employee who prevailed in an agency

grievance proceeding that did not meet the standard of an

“adversary adjudication.” See also 72 Comp. Gen. 289 (1993)

(attorney fee provision of the Whistleblower Protection Act does not

apply where employee uses informal agency grievance procedure).

(This being the case, it was irrelevant whether or not the grievance

involved selection or tenure.)

Where an MSPB decision is appealed to the courts, including a

decision involving selection or tenure, the majority view is that

EAJA permits the court to award fees for the judicial proceedings,

the relevant standard now being a “civil action” under 28 U.S.C.

§ 2412(d) rather than an “adversary adjudication” under 5 U.S.C.

§ 504. See Maritime Management, Inc. v. United States, 242 F.3d

1326, 1336 (11

Cir. 2001) (fees disallowed for bid protest

proceedings before GAO, but allowed in associated civil action).

See also Brewer v. American Battle Monuments Commission,

814 F.2d 1564 (Fed. Cir. 1987); Gavette, 808 F.2d at 1462–65;

Miller, 753 F.2d at 274–75; Olsen, 735 F.2d at 561. Here, however,

the Hoska case is in disagreement.

To the extent EAJA is inapplicable either to the MSPB or to a court

reviewing an MSPB action, all is not necessarily lost to the fee

applicant because EAJA is not exclusive in these situations. The

MSPB and the courts both may award fees under the Back Pay Act

in appropriate cases, and the MSPB additionally has 5 U.S.C.

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§ 7701. Thus, for example, Hoska, while finding EAJA inapplicable,

awarded fees under the Back Pay Act.

(9) Contract matters

(a) Bid protests

Prior to 1984, attorney’s fees incurred by a bidder for a government

contract in pursuing a bid protest with GAO were not compensable.

57 Comp. Gen. 125, 127 (1977); B-197174, Aug. 25, 1980;

B-192910, Apr. 11, 1979. The question arose upon enactment of

the Equal Access to Justice Act (EAJA) in 1980. However, since a

bid protest at GAO is not an adversary adjudication governed by

the Administrative Procedure Act, EAJA was unavailing. Maritime

Management, Inc. v. United States, 242 F.3d 1326, 1336 (11

Cir.

2001) (fees disallowed for bid protest proceedings before GAO).

See also 63 Comp. Gen. 541 (1984); 62 Comp. Gen. 86 (1982);

B-251668, May 13, 1993; B-211105.2, Jan. 19, 1984.

Under the Competition in Contracting Act of 1984, as amended,

GAO may recommend that a protester be reimbursed the costs of

filing and pursuing a protest, including reasonable attorney’s fees,

where it finds that a solicitation or the award of a contract does not

comply with statute or regulation. 31 U.S.C. § 3554(c)(1). This is to

relieve parties with valid claims of the burden of vindicating the

public interests that Congress seeks to promote. 68 Comp.

Gen. 506, 508 (1989). The costs and fees are payable from the

contracting agency’s procurement appropriations. 31 U.S.C.

§ 3554(c)(3)(A) (contracting agency “shall . . . pay the costs

promptly”).

GAO’s approach under 31 U.S.C. § 3554(c)(1) is to recommend

that the contracting agency pay the protest costs and allow the

protester and agency to negotiate the appropriate amount. If the

parties cannot agree, GAO will determine the amount. 4 C.F.R.

§§ 21.8(d), (e), and (f). A protester seeking to recover the costs of

pursuing its protest must submit sufficient evidence to support its

monetary claim; the amount claimed may be recovered to the

extent that the claim is adequately documented and is shown to be

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reasonable. B-240327.3, Dec. 30, 1994. See, e.g., B-291657,

Feb. 11, 2003.

GAO’s bid protest authority is not exclusive. A protester may also

seek resolution with the contracting agency, file a bid protest at the

Court of Federal Claims after having its protest denied at GAO, or

go directly to the Court of Federal Claims in lieu of filing a protest at

GAO. 31 U.S.C. § 3556. Once a case is in court, 31 U.S.C.

§ 3554(c) is inapplicable, and the court may consider a fee

application under the judicial portion of EAJA. E.g., Essex Electro

Engineers, Inc. v. United States, 757 F.2d 247 (Fed. Cir. 1985);

Laboratory Supply Corp. of America v. United States, 5 Cl. Ct. 28

(1984). See generally, The Equal Access to Justice Act: Practical

Applications to Government Contract Litigation, 2012 Army Law. 4

(Apr. 2012).

Bid protest disputes often give rise to operational delays.

Occasionally, an agency may pay money to protestors to withdraw

protests simply so that the agency may proceed with its

procurement operations. This practice is known as “Fedmail.” GAO,

ADP Bid Protests: Better Disclosure and Accountability of

Settlements Needed, GAO/GGD-90-13 (Washington, D.C.: Mar. 30,

1990), at 8, 30; Maj. Nathanael Causey and others, 1994 Contract

Law Developments—The Year in Review, 1995 Army Lawyer 3

(1995), n. 50. Typically, the payment is for bid protest preparation

expenses, including legal fees. GAO/GGD-90-13, at 31. Public

policy favors the settlement of disputes, and agencies may settle

protests and pay damages in the form of bid protest costs.

71 Comp. Gen. 340 (1992). GAO does not oppose monetary

settlements that reimburse a protestor’s bid preparation costs if an

agency determines that it likely will be held responsible for such

costs and is unable to correct the procurement. GAO/GGD-90-13,

at 31. However, GAO stated in GAO/GGD-90-13 that there is no

basis for any settlement that an agency may offer solely to avoid

operational delays resulting from a protest. Accordingly, GAO in a

subsequent decision concluded that a particular Fedmail payment

lacked legal authority and could not be made:

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“We do not believe that in making

appropriations available to an agency

for the procurement of goods and

services, Congress intended those

funds to be available to allow the

agency to obtain the withdrawal of a

meritorious protest without taking

appropriate corrective action. In

addition, . . . [w]e are not aware of any

statute that would permit the Army to

pay attorney fees in the circumstances

of this case.”

71 Comp. Gen. at 342.

(b) Contract disputes

Under the original (1980) version of the Equal Access to Justice Act

(EAJA), the Court of Appeals for the Federal Circuit held that: (1) a

court, reviewing a decision of an agency board of contract appeals,

could, under the judicial portion of EAJA, make a fee award

covering services before both the board and the court, but that

(2) boards of contract appeals were not authorized to independently

make EAJA fee awards. Fidelity Construction Co. v. United States,

700 F.2d 1379 (Fed. Cir. 1983), cert. denied, 464 U.S. 826 (1983).

The 1985 EAJA amendments legislatively overturned Fidelity to the

extent it held 5 U.S.C. § 504 inapplicable to boards of contract

appeals. E.g., Richlin Sec. Serv. Co. v. Chertoff, 553 U.S. 571

(2008), Ardestani v. Immigration & Naturalization Service, 502 U.S.

129, 138 (1991); Dantran, Inc. v. Department of Labor, 246 F.3d

36, 45 (1

Cir. 2001); Texas Instruments, Inc. v. United States,

991 F.2d 760, 767 (Fed. Cir. 1993). Specifically, the law amended

the definition of “adversary adjudication” to expressly include

appeals to boards of contract appeals under the Contract Disputes

Act. The 1985 amendments also added language to 28 U.S.C.

§ 2412(d) to make it clear that fee awards are authorized when a

contractor appeals a contracting officer’s decision directly to a court

instead of to a board of contract appeals, as authorized by the

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Contract Disputes Act. (As noted in the preceding paragraph,

appeals to court from board decisions were already covered.) The

fees recovered under this authority are limited to services provided

after the contracting officer’s decision and do not include services

provided in order to argue the matter before the contracting officer.

See Levernier Construction, Inc. v. United States, 947 F.2d 497,

500–03 (Fed. Cir. 1991).

(10) Public participation in administrative

proceedings: funding of intervenors

A number of regulatory agencies conduct administrative

proceedings and take actions that have a direct public impact, a

prime example being licensing. An important concern has been that

the agency may not receive a balanced presentation of viewpoints.

The reason is that the industries being regulated usually have

adequate resources to ensure representation of their interests,

while lack of resources may preclude participation by various non-

industry “public interest” representatives.

The Comptroller General has considered questions of intervenor

funding. An “intervenor” in this context means someone who is not

a direct party to the proceedings. Stated briefly, the rule is that an

agency may use its appropriations to fund intervenor participation,

including attorney’s fees, if:

• Intervenor participation is authorized, either expressly by statute

or by necessary implication derived from a regulatory or

licensing function;

• The agency determines that the participation is reasonably

necessary to a full and fair determination of the issues before it;

and

• The intervenor could not otherwise afford to participate.

This is essentially an application of the “necessary expense”

doctrine discussed previously in this chapter. Thus, intervenor

funding does not require express statutory authority, but it must

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relate to accomplishing the objectives of the appropriation sought to

be charged, and of course must not be otherwise prohibited. The

agency must have authority to encourage or accept intervenor

participation in connection with an authorized function for which its

appropriations are available. In this sense, it may be said that

intervenor funding must have a statutory foundation.

Historically the concept of intervenor funding emerged in the early

1970s. In 1970, the Federal Trade Commission (FTC) held that an

indigent respondent in an FTC hearing was entitled to government-

furnished counsel. American Chinchilla Corp., 1970 Trade Reg.

Rep. ¶ 19059. Following the Chinchilla case, the FTC asked

whether it could pay certain related expenses for the indigent

respondent, such as transcript costs and attorney’s expenses. It

also asked whether it could pay the same expenses when incurred

by an indigent intervenor rather than the respondent.

In the first of the intervenor cases, B-139703, July 24, 1972, GAO

answered “yes” to both questions. Noting that FTC had statutory

authority to grant intervention “upon good cause shown,” the

Comptroller General responded to the intervenor question as

follows:

“Thus, if the Commission determines it

necessary to allow a person to intervene

in order to properly dispose of a matter

before it, the Commission has the

authority to do so. As in the case of an

indigent respondent, and for the same

reasons, appropriated funds of the

Commission would be available to

assure proper case preparation.”

A few years later, the Nuclear Regulatory Commission asked

whether it was authorized to provide financial assistance to

participants in its adjudicatory and rulemaking proceedings. Finding

that NRC had statutory authority to admit intervenors, the

Comptroller General applied the “necessary expense” rationale of

B-139703, and answered “yes.” B-92288, Feb. 19, 1976.

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In this decision, GAO explained why the “American rule” as set

forth in Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240

(1975),

does not apply to bar the payment of attorney’s fees. The

distinction is that the American rule limits the power of a court or an

agency to require an unwilling defendant to pay the attorney’s fees

of a prevailing plaintiff or intervenor. In cases like B-139703 and

B-92288, an administrative body, exercising its rulemaking function,

is attempting to encourage public participation in its proceedings. It

does this by willingly assuming representation costs for intervenors

who would otherwise be financially unable to participate, in order to

obtain their input for a balanced rulemaking effort. Only by

obtaining a balanced view can the agency perform its function of

protecting the public interest.

Next, in a letter to the Chairman of the Oversight and Investigations

Subcommittee of the House Committee on Interstate and Foreign

Commerce, GAO advised that the rationale of B-92288 applied

equally to nine agencies under the Subcommittee’s jurisdiction. The

nine were: Federal Communications Commission, Federal Trade

Commission, Federal Power Commission, Interstate Commerce

Commission, Consumer Product Safety Commission, Securities

and Exchange Commission, Food and Drug Administration,

Environmental Protection Agency, and National Highway Traffic

Safety Administration. B-180224, May 10, 1976.

GAO pointed out in the same letter that there were several possible

ways of providing assistance to qualifying participants:

• Provision of funds directly to participants.

• Modification of agency procedural rules so as to ease the

financial burdens of public participation.

The Supreme Court reiterated the “American Rule” recently in Baker Botts L.L.P. v.

ASARCO LLC, 135 S. Ct. 2158 (2015) and Buckhannon Board & Care Home, Inc. v. West

Virginia Department of Health & Human Resources, 532 U.S. 598, 602 (2001).

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• Provision of technical assistance by agency staff. (However,

this cannot include assigning staff members to participants to

help them with their advocacy positions.)

• Provision of legal assistance by agency staff, but again not as

advocates.

• Creation of an independent public counsel. (However, the

public counsel cannot be beyond the agency’s jurisdiction and

control.)

• Creation of a consumer assistance office, as long as it remains

under the agency’s jurisdiction and control and does not act as

an advocate.

In subsequent decisions and opinions, GAO examined aspects of

the programs of several specific agencies. In each case, GAO

consistently applied the rationale of the earlier decisions. The cases

are:

• Environmental Protection Agency: 59 Comp. Gen. 424 (1980);

B-180224, Apr. 5, 1977;

• Federal Communications Commission: B-139703, Sept. 22,

1976;

• Food and Drug Administration: 56 Comp. Gen. 111 (1976);

• Nuclear Regulatory Commission: 59 Comp. Gen. 228 (1980);

and

• Economic Regulatory Administration (a component of the

Department of Energy): B-192213-O.M., Aug. 29, 1978; GAO,

Department of Energy’s Procedures in Funding Intervenors in

Proceedings before the Economic Regulatory Administration,

EMD-78-111 (Washington, D.C.: Oct. 2, 1978).

While the decisions have consistently upheld the legality of

intervenor funding under the necessary expense theory, GAO has

nevertheless emphasized the desirability of an agency’s seeking

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specific statutory authority to embark on a public participation

program. E.g., B-180224, May 10, 1976; B-92288, Feb. 19, 1976.

Congress has acted in several instances, authorizing intervenor

funding in some cases and prohibiting it in others.

For example, the Environmental Protection Agency has intervenor

funding authority under the Toxic Substances Control Act,

15 U.S.C. § 2605(c), and the Consumer Product Safety

Commission has such authority under the Consumer Product

Safety Act, 15 U.S.C. § 2056(c). Similarly, from 1975 until recently,

the Federal Trade Commission was given specific authority to fund

intervenor participation by the Magnuson-Moss Warranty–Federal

Trade Commission Improvement Act, formerly 15 U.S.C. § 57a(h).

Under this legislation, payments for legal services could not exceed

the costs actually incurred, even though the participant used “house

counsel” whose rate of pay was lower than prevailing rates.

57 Comp. Gen. 610 (1978).

Restrictions in appropriation acts have prohibited intervenor funding

programs for several agencies. For example, a provision in the

Nuclear Regulatory Commission’s (NRC) 1981 appropriation

prohibited the use of funds for the expenses of intervenors. The

Comptroller General construed this restriction as prohibiting the

NRC from adopting a “cost reduction program” of providing

transcripts and other documents free to intervenors. B-200585,

Dec. 3, 1980. However, NRC could reduce the number of copies of

documents required to be filed. Id. Also, NRC could decide to

provide free transcripts to all parties, intervenors included, without

violating the restriction. B-200585, May 11, 1981. Other cases

construing the NRC restriction, or successor versions, are

Business & Professional People for the Public Interest v. Nuclear

Regulatory Commission, 793 F.2d 1366 (D.C. Cir. 1986); 67 Comp.

Gen. 553 (1988); and 62 Comp. Gen. 692 (1983).

This authority was repealed in 1994. See Pub. L. No. 103-312, § 3, 108 Stat. 1691

(Aug. 26, 1994).

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Appropriation act restrictions have also prohibited intervenor

funding by the Economic Regulatory Administration and the Federal

Energy Regulatory Commission (FERC). A case involving the

FERC prohibition is Electrical District No. 1 v. Federal Energy

Regulatory Commission, 813 F.2d 1246 (D.C. Cir. 1987). In

addition, the conference committee on the 1980 appropriation for

the National Highway Traffic Safety Administration and the former

Civil Aeronautics Board directed that no funds be allocated by

these agencies for intervenor funding programs.

A restriction contained solely in legislative history and not carried

into the statutory language itself is not legally binding on the

agency. The history of the NRC prohibition will illustrate this. For

fiscal year 1980, the prohibition was expressed in committee

reports but not in the appropriation act itself. Accordingly, GAO told

NRC that, while it would be well advised to postpone its program,

the restriction was not legally binding. 59 Comp. Gen. 228 (1980).

For fiscal year 1981, the prohibition was written into NRC’s

appropriation act. Similarly, the restriction noted above for the

transportation agencies later “graduated” to a general provision in

the statute.

One court has disagreed with the GAO decisions. Greene County

Planning Board v. Federal Power Commission (Greene County IV),

559 F.2d 1227 (2

Cir. 1976), cert. denied, 434 U.S. 1086 (1976).

There, after several years of litigation, the plaintiff Board had finally

prevailed in its attempt to compel relocation of a proposed high

kilovolt power line through a scenic portion of the county. The only

question remaining was the ability of the Federal Power

H.R. Rep. No. 96-610, at 9, 14 (1979) (on H.R. 4440, 1980 appropriations bill for

Department of Transportation and related agencies).

E.g., Department of Transportation and Related Agencies Appropriations Act, 1990,

Pub. L. No. 101-164, § 306, 103 Stat. 1069, 1092 (Nov. 21, 1989).

The Greene County litigation produced several published decisions: 455 F.2d 412

Cir. 1972), 490 F.2d 256 (2

Cir. 1973), 528 F.2d 38 (2

Cir. 1975), and the decision

cited in the text, known as “Greene County IV.”

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Commission (FPC) to reimburse the plaintiff’s attorney’s fees.

(Though not “indigent,” the counsel fees had drained a

disproportionate amount of the county’s resources.) The FPC had

denied reimbursement on the grounds that the Board was

protecting its own, not the public, interest and because it thought it

lacked authority to reimburse the fees. After first concluding that the

issue should be remanded to the FPC so that it could determine the

propriety of reimbursement in accordance with the Comptroller

General’s decisions, the Second Circuit Court of Appeals granted a

rehearing en banc. On rehearing, the majority opinion held that the

FPC lacked authority to reimburse the attorney’s fees. Greene

County IV, 559 F.2d at 1238.

Subsequently, both GAO and the Justice Department’s Office of

Legal Counsel took the position that Greene County IV applied only

to the former Federal Power Commission (FPC), and not to other

federal agencies or even to the agencies which succeeded to the

FPC’s responsibilities. 59 Comp. Gen. 228; 2 Op. Off. Legal

Counsel 60 (1978). In addition, the United States District Court for

the District of Columbia has likewise determined that Greene

County IV does not extend generally to all agencies. Chamber of

Commerce v. United States Department of Agriculture, 459 F.

Supp. 216 (D.D.C. 1978), upholding the authority of the Department

of Agriculture to fund a consumer study on the impact of certain

proposed rules.

Thus, to determine whether a given agency has intervenor funding

authority, it is necessary first to examine the legislation, including

appropriation acts, applicable to that agency, as well as pertinent

judicial decisions. In the absence of statutory direction one way or

the other, and if there are no judicial decisions on point, it is then

appropriate to apply the necessary expense rationale of the GAO

decisions.

The later decisions somewhat refined the standards expressed in

the earlier cases. For example, in order to constitute a “necessary

expense,” the participation does not have to be absolutely

indispensable in the sense that the issues could not be decided

without it. It is sufficient for the agency to determine that a particular

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expenditure for participation can reasonably be expected to

contribute substantially to a full and fair determination of the issues.

56 Comp. Gen. 111. This is consistent with the application of the

necessary expense doctrine in other contexts as discussed

throughout this chapter. Assuming the requisite statutory basis for

intervention exists, the determination of necessity must be made by

the administering agency itself, not by GAO. Id. See also B-92288,

Feb. 19, 1976.

The standard of the participant’s financial status was discussed in

59 Comp. Gen. 424 (1980). While the participant need not be

literally indigent, the authority to fund intervenor participation

extends only to individuals and organizations which could not afford

to participate without the assistance. In making this determination,

the agency should consider the income and expense statements,

as well as the net assets, of an applicant. An applicant does not

qualify for assistance merely because it cannot afford to participate

in all activities it desires. The applicant is expected to choose those

activities it considers most significant and to allocate its resources

accordingly.

Some of the earlier cases held that advance funding was prohibited

by 31 U.S.C. § 3324. 56 Comp. Gen. 111; B-139703, Sept. 22,

1976. However, in view of the Federal Grant and Cooperative

Agreement Act of 1977, an agency with statutory authority to

extend financial assistance in the form of grants may be able to

utilize advance funding in its public participation program. A 1980

decision, 59 Comp. Gen. 424, applied this concept to the program

of the Environmental Protection Agency.

The decisions have all dealt with participation in the agency’s own

proceedings. There would generally be no authority to fund

intervenor participation in someone else’s proceedings, for

example, participation by a state agency in a state utility ratemaking

proceeding. B-178278, Apr. 27, 1973 (nondecision letter).

Finally, the GAO decisions in no way imply that an agency is

compelled to fund intervenor participation. They hold merely that, if

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the various standards are met, an agency has the authority to do so

if it wishes. See B-92288, Feb. 19, 1976.

A summary and discussion of intervenor funding through early 1981

may be found in GAO, Review of Programs for Reimbursement for

Public Participation in Federal Rulemaking Proceedings,

PAD-81-30 (Washington, D.C.: Mar. 4, 1981). See also Rollee H.

Efros, “Payment of Intervenors’ Expenses in Agency Regulatory

Proceedings,” Cases in Accountability: The Work of the GAO

(Washington, D.C.:1979), at 171–81.

c. Awards

(1) Government Employees’ Incentive Awards

Act

Several statutes authorize the making of awards in various

contexts. Perhaps the most important is the Government

Employees’ Incentive Awards Act, enacted in 1954

and now

found at 5 U.S.C. §§ 4501–4506. The Act authorizes an agency to

pay a cash award to an employee who by his or her “suggestion,

invention, superior accomplishment, or other personal effort

contributes to the efficiency, economy, or other improvement of

Government operations or achieves a significant reduction in paper

work” or performs a special act or service in the public interest

related to his or her official employment. 5 U.S.C. § 4503. A

provision added in 1990, 5 U.S.C. § 4505a, authorizes cash awards

for employees with “fully successful” performance ratings.

Cash

awards may not exceed $10,000; however, if head of an agency

certifies that the meritorious effort is “highly exceptional and

68 Stat. 1112. This was an expansion of similar but more limited authority enacted in

1946 (60 Stat. 809).

Section 207 of the Federal Employees Pay Comparability Act of 1990 (FEPCA),

contained in section 529 of the fiscal year 1991 Treasury, Postal Service, and General

Government Appropriation Act, Pub. L. No. 101-509, 104 Stat. 1389, 1457 (Nov. 5, 1990),

provided this authority. The authority is effective only to the extent funds are provided in

appropriation acts. FEPCA § 301.

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unusually outstanding,” then the cash award may be higher, but not

in excess of $25,000.

5 U.S.C. § 4502. The agency may also

incur “necessary expenses” in connection with an incentive award.

Id. Awards and related expenses under the Act are paid from

appropriations available to the activity or activities benefited. The

Office of Personnel Management prescribes implementing

regulations. 5 U.S.C. § 4506. OPM’s regulations are found in

5 C.F.R. pt. 451.

The Incentive Awards Act applies to civilian agencies, civilian

employees of the various armed services, and specified legislative

branch agencies. 5 U.S.C. § 4501. Within the judicial branch, it

applies to the United States Sentencing Commission.

Id. While it

does not apply to members of the armed forces, the Defense

Department has very similar authority for military personnel in

10 U.S.C. § 1124. Because of the similarity between the two

statutes, GAO case law applies equally to award ceremonies

conducted under the authority of 10 U.S.C. § 1124.

GAO has issued a number of decisions, discussed in the following

pages, that interpret the Incentive Awards Act. Five overarching

principles are apparent from these decisions:

(1) only federal employees may receive awards under the

Act;

(2) both cash and non-cash awards are permissible;

The Secretary of Defense may grant a cash award up to $25,000 without making such

certifications. 5 U.S.C. § 4502(f).

The Sentencing Commission had not been covered prior to a 1988 amendment to the

statute. See 66 Comp. Gen. 650 (1987). The Administrative Office of the United States

Courts is no longer covered by the statute. Pub. L. No. 101-474, § 5(f), 104 Stat. 1100

(Oct. 30, 1990). The District of Columbia also is no longer covered. When the District of

Columbia Home Rule Act was enacted into law, Pub. L. No. 93-198, 87 Stat. 774

(Dec. 24, 1973), the Act provided for the continuation of federal laws applicable to the

District of Columbia government and its employees (that for the most part were in title 5 of

the United States Code) until such time as the District enacted its own laws covering such

matters. The District has adopted a number of laws exempting its employees from various

provisions of title 5, including section 4501. D.C. Code § 1-632.02(a)(4).

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(3) agencies may pay for travel, food, and miscellaneous

expenses if they are related to an award;

(4) awards for money-saving employee suggestions must

be for suggestions that save government money; and

(5) awards are at an agency’s discretion.

(a) Only federal employees may receive awards

under the Act

First, as a preliminary matter, awards are limited to government

employees.

Since no similar authority exists for persons other

than government employees, an award may not be made to a

nongovernment employee who submits a suggestion resulting in

savings to the government. B-160419, July 28, 1967. See also

B-224071-O.M., Aug. 3, 1987 (GAO appropriations not available for

cash awards to contract security guards); B-176600-O.M., Aug. 18,

1978 (appropriations of agencies funding the Joint Financial

Management Improvement Program not available to make cash

awards to individuals other than federal employees). An agency

may make an award to an employee on detail from another agency.

33 Comp. Gen. 577 (1954). An agency may also make an award to

one of its employees for service to a Federal Executive Board.

B-240316, Mar. 15, 1991. See also 70 Comp. Gen. 16 (1990).

(b) Cash and non-cash awards are permissible

Second, awards under the Act may take forms other than cash.

Thus, the Army Criminal Investigation Command could award

marble paperweights and walnut plaques to Command employees,

including those who had died in the line of duty, if the awards

conformed to the Act and applicable regulations. 55 Comp.

Gen. 346 (1975). In situations not covered by the statute (e.g.,

purchase of paperweights and walnut plaques to be given to

nongovernment persons to recognize cooperation and enhance

community relations), however, such awards would be personal

Those who are not government employees might receive a reward (rather than an

award) under certain circumstances. See section C. 6. p. .

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gifts and therefore improper. Id. Similarly authorized as non-

monetary awards are desk medallions (B-184306, Aug. 27, 1980);

telephones (67 Comp. Gen. 349 (1988)); jackets bearing agency

insignia (B-243025, May 2, 1991); coffee mugs and pens

(B-257488, Nov. 6, 1995); tickets to local sporting events or

amusement parks (B-256399, June 27, 1994); and meals or gift

certificates for meals (B-271511, Mar. 4, 1997). Administrative

leave can also be awarded if and to the extent authorized in Office

of Personnel Management’s (OPM) implementing regulations.

5 U.S.C. § 4502(e). See also B-208766, Dec. 7, 1982. Whether the

award is monetary or nonmonetary, the act or service prompting it

must be related to official employment. 70 Comp. Gen. 248 (1991)

(the Incentive Awards Act does not authorize giving T-shirts to

Combined Federal Campaign contributors). See also 71 Comp.

Gen. 145 (1992) (contractor in 70 Comp. Gen. 248 not entitled to

payment for shirts provided to government). Awards under the Act

are discretionary on the part of the agency and must be consistent

with any agency policy. Further, although cost or the appearance

thereof has no legal bearing upon the permissibility of an award

under the Incentive Awards Act, these issues are relevant,

necessary concerns for agencies.

The Act does not authorize cash awards based merely on length of

service or upon retirement. However, noncash awards are

permissible. For example, the Department of Agriculture wanted to

present to retiring members of its Office of Inspector General

engraved plastic holders containing their credentials. GAO found

this authorized by the Act. 46 Comp. Gen. 662 (1967). It is not

appropriate to make an incentive award because an employee was

sparing in his use of sick leave. 67 Comp. Gen. 349 (1988), cited in

National Association of Government Employees Local R1-109,

53 F.L.R.A. 271, Aug. 15, 1997.

miscellaneous expenses if they are related to

an award

The Incentive Awards Act authorizes agencies to “pay a cash

award to, and incur necessary expense for the honorary recognition

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of” employees. The concept of a necessary expense is, within

limits, a relative one based on the relationship of the expenditure to

the particular appropriation or program involved. Thus, while a

necessary relationship may not exist between expenses related to

an award and the day-to-day purposes for which an agency’s

appropriation is available, an agency may determine that a

particular expense materially enhances the effectiveness of a

ceremonial function under the Incentive Awards Act. 65 Comp.

Gen. 738 (1986). This is specifically true in the case of an awards

ceremony, which is a valid component of the agency’s statutorily

authorized awards program.

Id.; see also B-167835, Nov. 18,

1969 (Incentive Awards Act authorized the National Aeronautics

and Space Administration to fund part of the cost of a banquet at

which the President was to present the Medal of Freedom to the

Apollo 11 astronauts). As with awards themselves, these

miscellaneous expenses are discretionary on the part of the agency

and must be consistent with any agency policy. Further, although

cost or the appearance thereof has no legal bearing upon the

permissibility of an award under the Incentive Awards Act, these

issues are relevant, necessary concerns for agencies.

Accordingly, agencies may use appropriations for a variety of

expenses related to an award under the Incentive Awards Act,

including:

• Light refreshments. 65 Comp. Gen. 738 (1986) (the Social

Security Administration could use its operating appropriations,

apart from its limited entertainment appropriation, to provide

refreshments at its annual awards ceremony); B-270199,

Aug. 6, 1996 (cake at a Pension Benefit Guaranty Corporation

awards ceremony).

This decision partially modified an earlier case, where GAO concluded that the cost of

refreshments at an awards ceremony under the Incentive Awards Act were payable only

from specific entertainment appropriations. B-114827, Oct. 2, 1974. See also 43 Comp.

Gen. 305 (1963) (citing entertainment appropriations as the only funding source for the

cost of refreshments at an awards ceremony for nongovernment employees).

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• Complete meals. B-270327, Mar. 12, 1997 (payments for

luncheons spanning a range from take-out sandwiches to a

luncheon cruise); B-288536, Nov. 19, 2001 (Bureau of Indian

Affairs was permitted to pay for the cost of a buffet luncheon at

an incentive awards ceremony); 70 Comp. Gen. 16 (1990)

(agency could pay a fee, which included a luncheon, for

attendance at a Federal Executive Board regional award

ceremony by agency employees who had been selected for

awards and their supervisors); B-235163.11, Feb. 13, 1996

(National Science Foundation annual awards dinner).

• Decorations. B-247563.4, Dec. 11, 1996 (floral centerpiece for

use at awards ceremony).

• Travel for the award recipient. 70 Comp. Gen. 440 (1991).

• Travel for the award recipient’s spouse. 69 Comp. Gen. 38

(1989), overruling 54 Comp. Gen. 1054 (1975); B-235163.11,

Feb. 13, 1996. Travel and miscellaneous expenses may also be

paid to a surviving spouse to receive an award on behalf of a

deceased recipient. B-111642, May 31, 1957.

• Travel and miscellaneous expenses of an attendant, whether or

not a family member, where the recipient has a disability and

may not travel unattended. 55 Comp. Gen. 800 (1976).

The Act does not authorize “necessary expenses” incident to the

receipt of an award from a nonfederal organization. 40 Comp.

Gen. 706 (1961). See, e.g., B-258216, July 27, 1995 (agency’s

payment for airline tickets for mother and brother of a deceased

employee to attend nongovernmental awards ceremony honoring

deceased employee not authorized). However, in limited situations

where an award from a nonfederal organization is closely related to

the recipient’s official duties, it may be possible to pay certain

related expenses on other grounds. For example, appropriations

available to an agency for travel expenses are also available “for

expenses of attendance at meetings which are concerned with the

functions or activities for which the appropriation is made or which

will contribute to improved conduct, supervision, or management of

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the functions or activities.” 5 U.S.C. § 4110. Thus, appropriations

may be available if the employee is traveling to a meeting at which

she will happen to receive an award. See 55 Comp. Gen. 1332

(1976).

The purpose of awards ceremonies is to foster public recognition of

employees’ meritorious performance and allow other employees to

honor and congratulate their colleagues. 65 Comp. Gen. at 740.

This purpose would not be served where the awards recipients and

the donor were the only participants in the event. B-247563.4,

Dec. 11, 1996. Therefore, the Incentive Awards Act does not

authorize refreshments “in connection with an event or function

designed to achieve other objectives simply because the agency

distributes awards as part of the event or function.” Id. For instance,

the Department of Veterans Affairs Medical Center’s use of

appropriated funds for a breakfast at which the Medical Center

Director presented awards was improper because it lacked public

recognition of the award recipients. Id. The record indicated that (1)

only those employees specifically recognized and the Medical

Center Director participated in the event, and (2) the employees’

contributions were not otherwise publicized within the Medical

Center community. However, the Medical Center’s use of its

appropriation to purchase light refreshments for an annual picnic

and a Valentine’s Day Dance were authorized, as the agency

presented performance award certificates and years of service

awards at the events. GAO cautioned that where an agency

combines awards receptions with social events, “the expenditures

should be subject to greater scrutiny than expenditures made in

connection with more traditional awards ceremonies.” Id.

As one case illustrates, agencies have discretion when determining

what (if any) refreshments to serve at an awards ceremony. In

recognition of excellent agency performance, the Defense

Reutilization and Marketing Service (DRMS) designated a

worldwide “celebration day” on which it hosted luncheons for all

DRMS employees and provided each employee a specially

designed “Bucks Bunny” and “Reut Rabbit” T shirt, as well as

4 hours of administrative leave. B-270327, Mar. 12, 1997. DRMS

guidance authorized each DRMS location to spend up to $20 per

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person for accommodations and “incidental refreshments” in

connection with the awards ceremonies. GAO considered the

DRMS awards program in light of OPM’s regulations implementing

the Incentive Awards Act at 5 C.F.R. pt. 451, which, the decision

concluded, “purposely leave it up to the agencies to design their

award programs and make their own award decisions.” GAO

concluded that it was required to “respect and defer” to OPM’s

regulatory decisions and implicit delegation of authority to agencies

to make implementing decisions so long as such decisions were

consistent with essential requirements of the Act. The coverage of

the “celebration day” was “broader than we have typically

encountered in … prior decisions”; however, “unless arbitrary and

capricious, differences in degree do not invalidate the decisions

made.” The submitted vouchers were approved. See also

B-288536, Nov. 19, 2001.

(d) Awards for money-saving employee

suggestions must be for suggestions that save

government money

Fourth, where an award is based on a suggestion resulting in

monetary savings, the savings must be to government rather than

nongovernment funds. 36 Comp. Gen. 822 (1957). In one case, a

suggestion for changes in procedures that would decrease

administrative expenses of state employment security offices would

effect a savings to an appropriation for unemployment service

administration grants to the states. Therefore, the appropriation

was available to make an award to the employee who made the

suggestion. 38 Comp. Gen. 815 (1959).

In another example, an employee made a suggestion that resulted

in monetary savings to his own agency, but the savings would be

offset by increased costs to other agencies. The decision

concluded that, if the agency wanted to make an award on the

basis of tangible benefits, it must measure tangible benefits to the

government; that is, it must deduct the increased costs to other

agencies from its own savings. However, the agency could view the

suggestion as a contribution to efficiency or improved operations

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and make a monetary award based on intangible benefits.

B-192334, Sept. 28, 1978.

(e) Awards are at an agency’s discretion

Finally, the making of an award—and therefore the refusal to make

an award—under the Incentive Awards Act is discretionary.

Rosano v. United States, 9 Cl. Ct. 137, 144–45 (1985), aff’d,

800 F.2d 1126 (Fed. Cir. 1986), cert. denied, 480 U.S. 907 (1987).

As such, it is reviewable only for abuse of discretion. E.g., Shaller v.

United States, 202 Ct. Cl. 571, cert. denied, 414 U.S. 1092 (1973).

A labor relations arbitrator may order an agency to prepare and

submit an award recommendation, but cannot order the agency to

actually make the award. 56 Comp. Gen. 57 (1976). Also, even

where an agency commits itself to making an award if it adopts a

suggestion, the agency does not have to pay interest on the award

if it is delayed. B-202039, Apr. 3, 1981, aff’d upon reconsideration,

B-202039, May 7, 1982.

(2) Other awards statutes

In addition to the Incentive Awards Act, several other statutes

authorize various types of awards. Some examples are:

• 5 U.S.C. § 5384: authorizes lump-sum cash performance

awards to members of the Senior Executive Service. Some

representative decisions are 68 Comp. Gen. 337 (1989),

64 Comp. Gen. 114 (1984), and 62 Comp. Gen. 675 (1983).

• 10 U.S.C. § 1125 and 14 U.S.C. § 503: authorize the Defense

Department and the Coast Guard, respectively, to award

trophies and badges for certain accomplishments. See

71 Comp. Gen. 346 (1992) (Air Force purchase of belt buckles

as awards for participants in “Peacekeeper Challenge”

competition permissible under 10 U.S.C. § 1125). The Coast

Guard statute includes cash prizes. The statutes have been

narrowly construed as limited essentially to proficiency in arms

and related skills. 68 Comp. Gen. 343 (1989) (Coast Guard);

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27 Comp. Gen. 637 (1948) (discussing predecessor of

10 U.S.C. § 1125).

• 5 U.S.C. §§ 4511–4513: Inspector General of an agency may

make cash awards to employees whose disclosure of fraud,

waste, or mismanagement results in cost savings for the

agency. For an agency without an Inspector General, the

agency head is to designate an official to make the awards. The

President may make the awards where the cost savings accrue

to the government as a whole.

(3) Decisions that predate the Government

Employees’ Incentive Awards Act

A number of decisions predate the Government Employees’

Incentive Awards Act. That Act has since subsumed these

decisions in many situations; however, these decisions remain

relevant in situations outside the scope of the Incentive Awards Act.

A number of these older decisions established that, absent specific

statutory authority, appropriations generally could not be used to

purchase such items as medals, trophies, or insignia for the

purpose of making awards. The rationale follows that of the gift

cases.

Similar subsequent cases barred the purchase of medals

for winners of athletic events (5 Comp. Gen. 344 (1925)); annual

trophies for Naval Reserve bases for efficiency (15 Comp.

Gen. 278 (1935)); and a plaque to present to a state to recognize

50 years of achievement in forestry (45 Comp. Gen. 199 (1965)).

Funds were available, however, where the awarding of the medals

had been authorized in virtually concurrent legislation. 10 Comp.

Gen. 453 (1931).

As with the gift cases, an occasional exception was found based on

an adequate justification under the necessary expense doctrine. In

The prohibition does not apply to a government corporation with the authority to

determine the character and necessity of its expenditures. 64 Comp. Gen. 124 (1984).

(The expenditure in the case cited was to be made from donated funds.)

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one example, prompted perhaps by wartime considerations, it was

permissible to purchase medals or other inexpensive insignia (but

not cash payments) to be awarded to civil defense volunteers for

heroism or distinguished service. B-31094, Jan. 11, 1943. Similarly,

an appropriation whose purposes included “accident prevention”

was available to purchase medals and insignia (but not to make

monetary awards) to recognize mail truck drivers with safe driving

records. 17 Comp. Gen. 674 (1938). There was sufficient discretion

under the appropriation to determine the forms “accident

prevention” should take. However, the discretion in recognizing

safe job performance did not extend to distributing “awards” of

merchandise selected from a catalogue. B-223608, Dec. 19,

1988.

Though the Incentive Awards Act authorizes cash awards

and certain types of non-cash honorary awards, it does not

authorize merchandise awards. Id. Furthermore, OPM’s guidance

explicitly stated that “merchandise prizes cannot be granted in lieu

of cash.” Id. The same decision disapproved the distribution of ice

scrapers imprinted with a safety message, based on the lack of

adequate justification. In another case, trophies for Toastmasters

participants were disallowed as there had “been no justification

provided to support the view that [the] expense [was] necessary

and incident to the public speaking training.” B-223447, Oct. 10,

1986.

d. Books and periodicals

Expenditures for books and periodicals are evaluated under the

necessary expense rule. Through applying the necessary expense

rule, GAO found that agencies could purchase books and

periodicals in the following cases:

Merchandise in that case was distributed to more than 80 percent of the workforce at

one project. We note that the Government Employees’ Incentive Awards Act only

authorizes awards for an employee who by his or her “suggestion, invention, superior

accomplishment, or other personal effort contributes to the efficiency, economy, or other

improvement of Government operations or achieves a significant reduction in paper work”

or performs a special act or service in the public interest related to his or her official

employment. 5 U.S.C. § 4503.

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• The American Battle Monuments Commission could use its

Salaries and Expenses (S&E) appropriation to buy books on

military leaders to help it decide what people and events to

memorialize. 27 Comp. Gen. 746 (1948).

• The National Science Foundation could subscribe to a

publication called “Supervisory Management” to be used as

training material in a supervisory training program under the

Government Employees Training Act. If determined necessary

to the course, the subscription could be paid from the

Foundation’s S&E appropriation. 39 Comp. Gen. 320 (1959).

• The Interior Department was permitted to purchase newspapers

to send to a number of Inuit families in Alaska. Members of the

families had been transported to Washington state to help in

fighting a huge fire, and the newspapers were seen as

necessary to keep the families advised of the status of the

operation and also as a measure to encourage future

volunteerism. B-171856, Mar. 3, 1971.

• The Interior Department’s Mining Enforcement and Safety

Administration could subscribe to the “Federal Employees

News Digest” if determined to be necessary in carrying out the

agency’s statutory functions. 55 Comp. Gen. 1076 (1976).

Subsequently, when the Federal Employees News Digest came

under some criticism, it became necessary to explain that a

decision such as 55 Comp. Gen. 1076 is neither an

endorsement of a particular publication nor an exhortation for

agencies to buy it. It is merely a determination that the

purchase is legally authorized. B-185591, Feb. 7, 1985.

Decisions in this area prior to 1946 applying a stricter standard, such as 21 Comp.

Gen. 339 (1941) and 22 Comp. Dec. 317 (1916), should be disregarded as they reflected

prohibitory legislation enacted on March 15, 1898 (30 Stat. 316) and repealed in 1946.

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e. Business cards

We recognize that with the prevalence today of electronic

communications, the use of business cards has dropped over the

years, although they remain in some use particularly in face-to-face

meetings. Nevertheless, the history of the business card decisions

may be illustrative by analogy when analyzing other expenses

under the necessary expense rule.

For many years, GAO considered business cards to be inherently

personal in nature, and therefore, a personal expense that was not

payable from appropriated funds, absent specific statutory

authority. See B-246616, July 17, 1992. This rule had its origins in

decisions of the Comptroller of the Treasury, who concluded in

1913 that business cards were more for personal convenience than

necessity and, therefore, that appropriations were not available to

pay for them. 20 Comp. Dec. 248 (1913).

Consistent with this

precedent, GAO frequently concluded that business cards were not

a necessary expense. 68 Comp. Gen. 467 (1989); B-195036,

July 11, 1979; B-149151, July 20, 1962. In 1998, however, we

concluded that an agency, applying a necessary expense analysis,

may reasonably determine that its appropriations are available to

obtain business cards for employees who regularly deal with the

public or organizations outside their immediate office. B-280759,

Nov. 5, 1998.

In a case involving a variation on business cards, the Board for

International Broadcasting wanted to use what it termed “transmittal

slips” to accompany the distribution of its annual report. B-173239,

June 15, 1978. The “transmittal slip” resembled a business card

and contained the words “With the compliments of (name and title),

Board for International Broadcasting.” It was not necessary to

decide whether the “slips” were business cards or not, because

“[I]n official life it has been the practice for the official himself to furnish his own cards,

the salaries in most instances being adequate for such expenditures,” the Comptroller

chided. 20 Comp. Dec. at 250.

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44 U.S.C. § 1106 expressly provides that documents distributed by

an executive department or independent establishment may not

contain or include a notice that they are being sent with “the

compliments” of a government official. Use of the transmittal slips

was therefore unauthorized.

f. Contests

(1) Entry fees

An agency may pay an entry fee for a contest if the agency can

justify the expenditure under Step 1 of the necessary expense

analysis. There must be a reasonable, logical relationship between

the contest entry fee and the purpose for which the appropriation is

available. In addition, any benefit of the contest, such as prize

money, must flow to the government rather than to individual

employees.

For example, the National Oceanic and Atmospheric

Administration (NOAA) wished to pay a fee to enter agency

publications into a contest held by an association of editors.

NOAA’s director of public affairs noted that NOAA had broad

statutory authority to publish materials on weather, geodesy,

and

similar matters, and that the contest judges would evaluate NOAA’s

publications, thus helping the agency improve the quality of its

work. In addition, the agency, rather than individual employees,

would receive any prize money. Accordingly, NOAA’s

appropriations were available to pay the entry fee. B-172556,

Dec. 29, 1971.

In a similar case, a Natural Resources Conservation Service

(NRCS) employee sought reimbursement of fees he incurred when

An agency must consider the miscellaneous receipts statute when determining how to

handle receipt of the proceeds. Please see Chapter 6, Availability of Appropriations:

Amount.

Geodesy is the science of “accurately measuring and understanding the Earth’s

geometric shape, orientation in space, and gravity field.” NOAA, What is geodesy?,

available at https://oceanservice.noaa.gov/facts/geodesy.html (last visited Aug. 3, 2017).

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he entered NRCS publications in an awards contest that recognizes

professional skill and excellence in developing public outreach

materials, and employs communications professionals as judges to

provide critique and detailed feedback. The contest made awards in

the name of the agency for six of the nine NRCS entries. NRCS

has statutory authority to disseminate information, so participation

in the contest and the feedback provided could aid in NRCS’s

review of its outreach programs. B-317891, May 26, 2009.

Therefore, NRCS could reimburse the employee for the contest

fees if it made an administrative determination that participation in

the contest served the agency’s mission. Id. See also B-164467,

Aug. 9, 1971 (Bureau of Mines could use its appropriations to enter

an educational film it produced in an industrial film festival where

entry was made in the Bureau’s name, awards would be made to

the Bureau and not to any individuals, and there was adequate

justification that entry would further the Bureau’s function of

promoting mine safety).

In contrast, appropriations are not available to pay entry fees where

the prizes would be awarded to individual employees rather than an

agency. B-164467, June 14, 1968.

Payment of contest entry fees are permissible only where the

contest advances an objective for which the appropriation is

available. Contest fees that primarily meet the personal needs of

employees are not payable from appropriated funds. For example,

agencies may not pay fees for employees to participate in

competitive fitness activities or sporting events, as these expenses

are personal to the employees. We discuss this issue further in

section C.6.k below.

(2) Government-sponsored contests

As with contest entry fees, an agency may sponsor its own contest

if the agency can justify the expenditure under Step 1 of the

necessary expense rule. There must be a reasonable, logical

relationship between the contest and the purpose for which the

appropriation is available. Of course, establishing this relationship

is most straightforward where Congress has provided an agency

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with specific statutory authority to sponsor a contest. See, e.g.,

51 U.S.C. § 20144 (NASA), 10 U.S.C. § 2374a (Department of

Defense); 42 U.S.C. § 16396 (Department of Energy).

If an agency lacks such specific statutory authority, it must ensure

that any prize money it pays bears a reasonable, logical

relationship to the authorized purposes of the appropriation. For

example, prizes were awarded to enrollees at a Job Corps

Conservation Center in a contest to suggest a name for the Center

newspaper. The expenditure was permissible because the enabling

legislation authorized the providing of “recreational services” for the

enrollees and the contest was viewed as a permissible exercise of

administrative discretion in implementing the statutory objective.

B-158831, June 8, 1966.

In another case, the National Park Service sponsored a cross-

country ski race in a national park, and awarded trophies to the

winners. The cost of the trophies could not be charged to

appropriations for management, operation, and maintenance of the

national park system. However, the Park Service also received

appropriations for recreational programs in national parks, and the

trophies could properly have been charged to that account.

B-214833, Aug. 22, 1984. See also B-230062, Dec. 22, 1988.

An agency may not sponsor a contest if there is not a sufficient

nexus between the purpose of the appropriation and the agency-

sponsored contest. For example, the Navy wanted to use its

appropriation for naval aviation to sponsor a competition for the

design of amphibious landing gear for Navy aircraft. Cash prizes

would be awarded for the two most successful designs. The

Comptroller General noted the risk that “one or both of the two

designs . . . may thereafter prove to be of no use or value

whatever” because, for example, they might be unsuitable. Thus

there was a possibility that the prize money awarded would vastly

exceed the value of the work the government ultimately obtained. In

addition, the appropriation contemplated that the ultimate design

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and development work would be performed by Navy personnel.

Therefore, appropriations were not available to sponsor the

competition. 5 Comp. Gen. 640 (1926).

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see also 29 U.S.C. § 701(b)(2).

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Although the Americans with Disabilities Act of 1990

105

does not

apply to most federal employers,

106

the ADA’s standards are used

to determine whether agencies are in compliance with the

Rehabilitation Act’s requirements for employment of qualified

individuals with disabilities. 29 U.S.C. § 791(f).

107

Under Equal

Employment Opportunity regulations, federal agencies are required

to make “reasonable accommodations” for the known physical or

mental limitations of qualified employees with disabilities, unless

the accommodation(s) would impose an undue hardship on the

agency’s program. 29 C.F.R. §§ 1630.9(a), 1614.203(b). See

B-291208, Apr. 9, 2003; B-243300, Sept. 17, 1991.

While GAO has no jurisdiction over substantive claims brought

against federal agencies under the Rehabilitation Act, we have

responded to agency inquiries concerning the propriety of using

appropriated funds for expenditures or informal settlement awards

under the Act. Questions occasionally arise concerning whether an

agency’s provision of a proposed, or requested, accommodation

complies with federal appropriations principles (see, e.g.,

B-240271, Oct. 15, 1990); whether an expense claimed by an

employee is reimbursable or must be borne by the employee (see,

e.g., 68 Comp. Gen. 242 (1989)); or whether an item or service

may appropriately be provided under the Rehabilitation Act as a

reasonable accommodation, even though not initially viewed as

such (see, e.g., B-291208, Apr. 9, 2003). We discuss these three

decisions, and others, below.

In addressing these questions, we recognize that agencies may

expend appropriated funds to accomplish the purposes of the

105

Pub. L. No. 101-336, title I, § 101, 104 Stat. 330 (July 26, 1990), codified at 42 U.S.C.

§§ 12101 et seq.

106

42 U.S.C. § 12111(5)(B)(i); 29 C.F.R. § 1630.2(e)(2)(i). Some legislative branch

entities are covered under the ADA. 42 U.S.C. § 12209.

107

Congress enacted the Rehabilitation Act in 1973. It modeled the now more familiar

Americans With Disabilities Act on the Rehabilitation Act, adopting the same definition of

“disability” and its interpretation by courts. 42 U.S.C. § 12201(a). See Toyota Motor

Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184, 193–94 (2002).

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Rehabilitation Act when acting under the Act’s authority and the

regulatory standards that govern its application. B-240271, Oct. 15,

1990. An expenditure that might be viewed as personal in nature

but for the Rehabilitation Act is a proper use of an agency’s

appropriation when incurred in satisfaction of the Act’s

requirements.

Thus, in B-240271, GAO advised that the purchase of a motorized

wheelchair for a quadriplegic employee who spent half of his time

on official travel could be regarded as a “reasonable

accommodation” under 29 C.F.R. § 1630.9, on condition that the

wheelchair remain the property of the government.

The Rehabilitation Act has also been held applicable to parking

expenses, in certain circumstances. As a general matter, parking

incident to an employee’s commute between his residence and

permanent duty station is a personal expense (see section C.13.k).

However, if severely disabled employees must pay parking costs

higher than those paid by non-disabled employees working at the

same facility,

108

the agency can subsidize the difference. 63 Comp.

Gen. 270 (1984); see also B-291208, Apr. 9, 2003, discussed in

detail in this chapter, section C.13.j.

The costs of structural changes to an employee’s home were not

considered a reasonable accommodation under the Rehabilitation

Act. The employee had argued that the changes were required as a

result of his assignment to a new permanent duty station. Even

though the modifications were necessary to facilitate his mobility,

they were made to his privately owned property, and therefore, did

not constitute a “reasonable accommodation” under the statute or

regulations. B-266286, Oct. 11, 1996.

In another case, the cost of local lodging was not considered a

reasonable accommodation under the Rehabilitation Act.

B-318229, Dec. 22, 2009. An employee who suffered from chronic

108

For example, the disabled employee may have to park closer to the facility at higher

rates.

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lower back pain, a condition that made it very difficult for the

employee to sit for long periods of time, had to travel to local work

sites within the local travel area of the employee’s official duty

station. The employee asked for reimbursement for lodging near

the work sites to minimize the time driving back and forth from the

employee’s home, where the employee teleworked, to the work

sites. GAO pointed out that there is, however, a statutory limitation

on local lodging, and that this travel is more akin to a commute,

which is not covered by the Rehabilitation Act. GAO concluded that

the agency’s appropriations were not available to pay for local

lodging as a reasonable accommodation under the Rehabilitation

Act, and suggested that the agency consider other available

accommodations that would not require the employee to drive and

that would not require the agency to circumvent statutory lodging

limitations. Id.

Finally, one decision involved the Rehabilitation Act but, unlike the

other cases in this section, its particular concern was not federal

employees. B-324588, June 7, 2013. A federal court had ruled that

the Department of the Treasury violated section 504 of the Act,

which concerns discrimination under government programs or

activities that receive federal financial assistance. We discuss this

decision further in section C.6.j above.

(2) Employee programs related to health:

5 U.S.C. § 7901

By virtue of legislation enacted in 1946 and now found at 5 U.S.C.

§ 7901, each agency is authorized to establish a health service

program to promote and maintain the physical and mental fitness of

employees under its jurisdiction. The statute expressly limits

authorized health service programs to (1) treatment of on-the-job

illness and dental conditions requiring emergency attention; (2) pre-

employment and other examinations; (3) referral of employees to

private physicians and dentists; and (4) preventive programs

relating to health.

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(a) Treatment of on-the-job illness and dental

conditions

Many agencies now provide on-site health centers under the

authority of section 7901 for their employees. These centers offer a

variety of services, including immunizations, health screenings, and

emergency medical care. The Federal Occupational Health division

of the U.S. Department of Health and Human Services serves more

than 360 federal agencies

109

via Economy Act agreements, for

instance.

110

Medical treatment not within the scope of 5 U.S.C. § 7901 remains

a personal expense of the employee. Thus, the cost of an

ambulance called by an agency medical officer to take an

employee to a hospital could not be paid from appropriated funds.

B-160272, Nov. 14, 1966.

(b) Pre-employment and other examinations

Prior to the enactment of section 7901, a pre-employment physical

examination, the purpose of which was to determine an applicant’s

eligibility for a federal job, generally was the applicant’s

responsibility and could not be charged to appropriated funds.

22 Comp. Gen. 243 (1942). However, in certain situations, such

examinations passed muster under the necessary expense rule

and could be paid from appropriations. Thus, in 22 Comp. Gen. 32

(1942), GAO told the Army that it could use its appropriations to

provide periodic physical examinations to detect arsenic poisoning

in civilian workers in a chemical warfare laboratory. The decision

noted that instances of arsenic poisoning “might have a depressing

109

Federal Occupational Health, About FOH, available at foh.psc.gov/about.html (last

visited Jan. 10, 2017).

110

Under the Economy Act, Federal Occupational Health recovers the actual costs of

providing health services to customer agencies. Federal Occupational Health, Doing

Business with FOH and Interagency Agreements (IAAS), available at

foh.psc.gov/about/agreements.html (last visited Jan. 10, 2017); see 31 U.S.C. § 1535

(authorizing interagency transactions).

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effect on the morale of fellow workers”

111

and might make it more

difficult to find qualified people to do the work.

112

In another case, a

Department of Labor employee joined the Army during World

War II. He received a medical discharge, and thereafter applied for

reinstatement to his former Labor Department position. By law,

Congress authorized restoration of an employee upon return from

active military duty in his former position, contingent upon the

employee presented a satisfactory physical examination. GAO

advised that the agency could pay for a physical examination which

it required prior to reinstatement. 23 Comp. Gen. 746 (1944).

In 1946, Congress enacted 5 U.S.C. § 7901. Now, agencies have

specific authority to include medical examinations, including pre-

employment examinations, without charge to applicants, in the

health programs they are authorized to establish. 30 Comp.

Gen. 493 (1951). While the statute authorizes establishment of

government programs, it does not authorize the reimbursement of

privately incurred expenses. Thus, an applicant who declines to use

an available government doctor for a pre-employment examination

and instead chooses to have it performed by a private doctor may

not be reimbursed. 31 Comp. Gen. 465 (1952).

In situations not covered by the statute, the “primary benefit of the

government” test continues to apply. Thus, based on the earlier

precedents, the cost of medical examinations by private physicians

was approved in the following cases:

• 30 Comp. Gen. 387 (1951) (physical examinations of

Department of Agriculture employees engaged in testing

repellents and insecticides for use by the armed forces; no

government medical facilities available).

111

The morale of the poisoned workers would not be particularly enhanced either.

112

While this may sound heartless, the expenditure could be justified only if it was

determined to be necessary to carry out the objects of the appropriation, and the

appropriation in this instance was for chemical warfare service, not for employee health.

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• 41 Comp. Gen. 531 (1962) (annual physical examinations for

Saint Lawrence Seaway Development Corporation employees

engaged in strenuous physical work, often under severe

weather conditions; no public health facilities in area).

The examinations in both of the above cases could have been

included in an authorized health service program, discussed below.

As noted, however, facilities were not available in either case.

Thus, since the examinations were for the primary benefit of the

government, appropriated funds were available to have them

performed by private physicians. See also 73 Comp. Gen. 219

(1994) (National Transportation Safety Board could reimburse air

safety investigators for the costs of physical exams required to

obtain a Federal Aviation Administration (FAA) medical certificate if

the agency’s public health facility has no FAA-certified physician);

B-286137, Feb. 21, 2001 (U.S. Geological Survey could pay for eye

examinations for employees whose work requires visual acuity, but

may not pay for their prescription eyeglasses, which are personal

and useful to employees who need them inside, as well as outside,

the workplace).

In 65 Comp. Gen. 677 (1986), the Navy could pay for a medical

examination required for a private individual joining a government

research exercise under invitational travel orders. Although

government medical facilities were presumably available, there was

no need to note this fact in the decision. Since the individual was

neither a government employee nor an applicant for a government

job, she could not be required to use the government facility and,

since the Navy wanted her participation, it could not very well

expect her to bear the expense.

Conversely, in B-253159, Nov. 22, 1993, the costs of medical

examinations performed by private physicians for two Centers for

Disease Control and Prevention employees and their dependents

were not reimbursable because the examinations were neither

required by the agency nor for the benefit of the government. The

two employees and their dependents obtained the examinations in

preparation for their relocation to assignments outside the United

States. See also A. Carter, Jr., GSBCA No. 15435, 01-1 B.C.A.

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¶ 31,404 (Apr. 9, 2001) (Department of Defense should reimburse

its civilian employee for dependents’ immunizations and may

reimburse him for dependents’ physical examinations, which were

both required to obtain return visas to the United States, if the Navy

determines that the examinations were primarily for the benefit of

the government).

and dentists

Agencies may provide some counseling services to employees and

refer them to private treatment providers. For example, in 57 Comp.

Gen. 62 (1977), the Comptroller General held that the

Environmental Protection Agency was authorized by 5 U.S.C.

§ 7901 to procure diagnostic and preventive psychological

counseling services for its employees. The service could

encompass problem identification, referral for treatment or

rehabilitation to an appropriate service or resource, and follow-up to

help an employee readjust to the job during and after treatment, but

could not include the actual treatment and rehabilitation. Actual

treatment and rehabilitation remain the employee’s responsibility.

In B-198804, Dec. 31, 1980, GAO refused to expand the holding in

57 Comp. Gen. 62 to permit an agency to pay the expenses of

alcoholism treatment and rehabilitation for one of its employees.

Treatment and rehabilitation, as stressed in 57 Comp. Gen. 62, are

the employee’s responsibility. It made no difference that the

employee had been erroneously advised that the expenses would

be covered by her health insurance and had already incurred the

expenses, since the government cannot be bound by the

unauthorized acts or representations of its agents.

In certain circumstances, agencies may be able to provide referral

services to nongovernment employees as well. In those cases,

agencies would not be relying on 5 U.S.C. § 7901, which is

statutorily limited to federal employees. Instead, agencies would

need to determine that the services are a “necessary expense” of

the appropriation. For instance, in B-270446, Feb. 11, 1997, the

provision of psychological assessment and referral services for

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Customs Service employees’ family members was determined to

be for the primary benefit of the government. The Service’s

Employee Assistance Program may render these services for

family members adversely affected by work-related activities of, or

traumatic incidents involving death or serious injury to, an

employee in the line of duty carrying out the agency’s law

enforcement activities. Cf. 71 Comp. Gen. 527 (1992) (a federal

agency may not use appropriated funds to provide space for

eldercare facilities for the adult relatives of agency employees, but

may provide employee referral and counseling programs).

(d) Preventive programs relating to health

OPM issues guidance and regulations on health preventive

programs under 5 U.S.C. § 7901 in the federal workplace. OPM

states that “worksite health and wellness interventions include, but

are not limited to, health education, nutrition services, lactation

support, physical activity promotion, screenings, vaccinations,

traditional occupational health and safety, disease management,

and linkages to related employee services.” OPM, Health &

Wellness, available at www.opm.gov/policy-data-

oversight/worklife/health-wellness/#url=Overview (last visited

Nov. 9, 2016).

The Comptroller General has issued relevant decisions on health

preventive programs. For example, as discussed above, agencies

may provide counseling services for work-related problems or for

personal problems that affect employees’ work performance and

morale. 57 Comp. Gen. 62 (1977). The Comptroller General has

also advised that an agency could, upon determining that it will be

in the government’s interest to do so, provide immunization against

specific diseases, like the flu, without charge to employees.

47 Comp. Gen. 54 (1967).

Federal agencies are authorized under 5 U.S.C. § 7901 to establish

smoking cessation programs for their employees, and may use

their operating appropriations to pay the costs. 68 Comp. Gen. 222

(1989). In light of the body of evidence of the health hazards of

smoking, the decision reasoned, programs to help employees quit

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smoking are clearly “preventive programs relating to health” for

purposes of the statute.

113

Physical fitness programs may qualify as preventive health

programs under 5 U.S.C. § 7901. In addition, it may be possible to

justify some programs under the necessary expense concept

without the need to invoke the statute. For example, in 63 Comp.

Gen. 296 (1984), GAO applied the necessary expense doctrine to

conclude that Bureau of Reclamation funds were available for

physical exercise equipment to be used in a mandatory physical

fitness program for firefighters.

In 64 Comp. Gen. 835 (1985), GAO considered the scope of a

permissible fitness program under section 7901, concluding that a

program could include comprehensive physical fitness evaluations

and laboratory blood tests. Based on the statute alone, it could also

include physical exercise. However, regulations then in effect

precluded use of appropriated funds for physical exercise as part of

a health service program. The decision further noted, as 63 Comp.

Gen. 296 had held, that physical exercise costs incident to a

mandatory program necessitated by the demands of designated

positions could be paid as a necessary expense without the need to

rely on 5 U.S.C. § 7901. See also B-216852, Mar. 6, 1985

(discussing GAO’s own authority to establish a fitness program);

B-216852, Dec. 17, 1984.

Subsequent to 64 Comp. Gen. 835, the Office of Personnel

Management revised its regulations to include physical fitness

programs and facilities as permissible preventive health services.

Based on the revised regulations, an agency may now use

appropriated funds to provide access to a private fitness center’s

exercise facilities, although both GAO and OPM caution that

expenditures of this type should be carefully monitored and should

113

The 1989 decision modified 64 Comp. Gen. 789 (1985), which had found smoking

cessation programs unauthorized. The 1985 case had correctly held that such programs

were not a form of “medical care,” but had failed to properly evaluate them as preventive

programs.

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be undertaken only where all other resources have been

considered and rejected. 70 Comp. Gen. 190 (1991). However,

appropriated funds are not authorized for payment of: (1)

membership fees to a contracted private fitness center in advance

of employees’ use of facilities (B-288013, Dec. 11, 2001); or

(2) registration fees for employee members of an agency’s on-site

fitness center to participate in local competitive fitness or sports

activities. Participation in such events is generally a personal

activity, not an essential part of a government-sponsored

preventive health program. 73 Comp. Gen. 169 (1994).

(3) Federal Employees Health Benefits Act of

1959

The cost of employee health insurance is a personal expense and,

therefore, must be borne by the employee unless there is statutory

authority permitting the government to pay. In the Federal

Employees Health Benefits Act of 1959, Congress established a

health benefits program to provide health insurance for federal

employees and other beneficiaries. The government’s contribution

is paid from appropriations available to the employing agency.

5 U.S.C. § 8906(f). Appropriations are not available, however, to

reimburse an employee for the cost of purchasing health insurance

outside of the authorized health benefits program. B-323449,

Aug. 14, 2012.

(4) The government’s provision of a safe,

sanitary workplace

Appropriated funds are available to provide certain basic,

fundamental needs of the federal work environment and to maintain

the safety and health of federal premises. In 2003, GAO said:

“Without question, an agency may use

appropriated funds to satisfy basic

fundamental needs such as potable

water, clean air, and sufficient light. It

would be unreasonable to suggest that

appropriations are not available for

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maintaining certain facilities such as

restrooms. Similarly, we think that it

would be irresponsible to conclude that

appropriations are not available to

exercise the degree of supervisory care

to maintain safe premises that our

society expects of the owner/occupants

of those premises, particularly in the

face of exigent circumstances like those

we confront today. For that reason, we

would not object to an agency, either as

an owner of the work premises or as an

occupant and supervisor of the

premises, using its appropriations to

supply appropriate equipment and

services to maintain the safety and

healthiness of those premises in

response to legitimately anticipated

dangers and exigencies.”

B-301152, May 28, 2003. In this case, GAO concluded that its own

appropriation was available to purchase protective hoods for use in

a terrorist attack involving explosives or chemical or biological

weapons. GAO could purchase the hoods not only for employees

but also to protect anyone who may be in the building when the

hoods are needed:

“Consistent with societal expectations

rooted in common law, and as reflected

in our decisions, the cases and statutes

discussed as well as the federal

government’s response to recent and

Cold War threats, when viewed

together, evidence the government’s

willingness to provide not only for the

safety and health of government

employees and their work environment,

but also for maintaining the safety and

health of the premises. In considering

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the availability of an agency’s

appropriations for operational expenses,

it is important to factor into our

consideration notice of what our society

expects of its employers.”

Id.

One basic example is drinking water. Appropriations are available

to federal agencies so they may provide their employees with safe,

clean drinking water. 21 Comp. Dec. 739 (1915). Once the

government has met its responsibility to provide safe clean water,

any additional expense to satisfy employee taste or preference is

personal to the employee. In particular, appropriations generally are

not available to pay for bottled water where the public water supply

is safe for drinking purposes. 17 Comp. Gen. 698 (1938); 22 Comp.

Dec. 31 (1915). However, an agency may purchase bottled water

where a building’s water supply is unpotable. For example, a

problem with the water supply system in a building caused lead

content to exceed the Environmental Protection Agency’s

“maximum contaminant level” and justified the purchase of bottled

water for employees until the problems with the system could be

resolved. B-247871, Apr. 10, 1992. See also B-324781, Dec. 17,

2013 (an agency that had numerous problems with its potable

water supply as the result of water main breaks, a building

explosion, and repeated instances of contaminated water may use

it appropriations to purchase bottled water for use in responding to

these legitimately anticipated dangers and exigencies). In contrast,

GAO denied relief to a certifying officer who improperly approved

payments for bottled water for employees where there was no

evidence that drinking water in the building posed a health risk.

B-303920, Mar. 21, 2006. For remote work sites that have no

access to potable water, it is within the agency’s discretion to

decide how best to provide its employees with access to potable

water, whether by providing coolers or jugs for transporting water or

by providing bottled water. B-310502, Feb. 4, 2008. See also

B-318588, Sept. 29, 2009.

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As the bottled water case law demonstrates, compelling evidence

of a threat or danger to health, safety, or security of employees and

others present on government premises is determinative, not the

personal preferences of agency officials and employees. In another

case, an employee union argued that an agency should provide

disposable eating ware to employees, and an arbitrator asserted

that the provision of such items would help prevent employee

illness. B-326021, Dec. 23, 2014. However, no one presented any

compelling evidence that the disposable cutlery was an effective

means to prevent the spread of disease. To the contrary: a

document from the Department of Health and Human Services

advised that “[s]eparation of eating utensils for use by a patient with

influenza is not necessary, as long as they are washed with warm

water and soap.” Id. Furthermore, “employees could easily bring

their own disposable cups, plates, and cutlery when they bring their

own meals to work.” Id. Thus, the provision of such cutlery was an

impermissible personal expense that would primarily benefit

employees, rather than an expense incurred for employee safety

that the government is expected to bear. B-326021, Dec. 23, 2014.

(5) Some other health-related decisions

As we have noted in various discussions above, if a health-related

expense is not within the scope of any particular statute, we apply

the necessary expense rule, and the test is whether the use of

appropriations for a given expense primarily benefits the

government, notwithstanding the collateral benefit to the individual.

22 Comp. Gen. 32 (1942); see also 57 Comp. Gen. 62 (1977);

53 Comp. Gen. 230 (1973).

Cases applying the necessary expense rule to health-related

expenditures include:

• Appropriated funds could not be used to purchase regular

eyeglasses for employees who work at video display terminals.

63 Comp. Gen. 278 (1984). See also B-286137, Feb. 21, 2001

(U.S. Geological Survey may not purchase ordinary prescription

eyeglasses for operators of the National Aerial Photography

Program and the Optical Science Laboratory). In contrast, the

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U.S. Geological Survey could permissibly purchase special filter

spectacles for employees working with instruments used in map

making, as the spectacles would improve employee

productivity, were not useful outside of the workplace, and

employees could not reasonably be expected to furnish them.

45 Comp. Gen. 215 (1965).

• Agency may purchase drugs and their administration by private

doctor for employees exposed to spinal meningitis in line of

duty; otherwise, agency would have risked having to quarantine

the employees and close the facility. 23 Comp. Gen. 888

(1944).

• Weather Bureau may purchase X-rays for personnel being

assigned to Alaska, to ensure the personnel would not spread

tuberculosis to the local residents. B-108693, Apr. 8, 1952.

• Agency may rent an amplifying device to be attached to an

official telephone for use by an employee with a hearing

impairment. The device was seen as a means of obtaining the

best results from available personnel. 23 Comp. Gen. 831

(1944).

114

• Agency could purchase a motorized wheelchair for use by an

employee. Normally a wheelchair is the employee’s personal

expense. In this case, however, the employee had his own non-

powered wheelchair and needed a motorized wheelchair only

because the agency had not complied with the Architectural

Barriers Act of 1968. The wheelchair would, of course, become

the property of the government and was approved only as a

temporary expedient pending compliance with the statute.

56 Comp. Gen. 398 (1977).

114

This decision was issued prior to the enactment of the Rehabilitation Act of 1973 ,

which requires federal agencies to provide reasonable accommodations to an employee

with a disability, unless the agency can demonstrate that the accommodation would

impose an undue hardship. 29 U.S.C. § 791; 29 C.F.R. § 1630.9(a).

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In a different type of analysis, GAO concluded that an agency could

use appropriations to purchase a heavy-duty chair for an employee

who needed extra physical support due to his stature; the employee

had broken 15 regular chairs. While the particular type of chair in

question was necessitated by the employee’s physical condition, it

is nevertheless the case that an office chair is not “personal

equipment” but is an item the government is normally expected to

provide for its employees. The purchase was therefore authorized.

B-215640, Jan. 14, 1985.

l. Miscellaneous items incident to the

federal workplace

The following is a list of miscellaneous issues that GAO decisions

have discussed in relation to the federal workplace.

• Community support activities. GAO has viewed certain civic,

charitable, and similar community support activities involving

limited use of agency resources and employee time as

permissible expenses. This authority, however, is limited and

does not extend to certain activities. The following is a list of

cases discussing community support activities:

• Agencies may spend their appropriations, within reason, to

cooperate with government-sanctioned charitable fund-

raising campaigns, including such things as permitting

solicitation during working hours, preparing instructions, and

distributing materials. 67 Comp. Gen. 254 (1988) (Combined

Federal Campaign). See also B-155667, Jan. 21, 1965;

B-154456, Aug. 11, 1964; B-119740, July 29, 1954.

• Some use of employee time and agency equipment could

occur to assist with adopt-a-school programs. 71 Comp.

Gen. 469 (1992); B-277678, Jan. 4, 1999.

• Appropriations are not available to give T-shirts to Combined

Federal Campaign contributors. 70 Comp. Gen. 248 (1991).

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• An agency may not use its appropriations to pay for food at a

Combined Federal Campaign (CFC) event unless the

agency can present compelling empirical evidence

demonstrating that food would likely generate or increase

contributions to the CFC. B-325023, July 11, 2014.

• United States Savings Bond campaign. An agency may use

its general operating appropriations to fund limited promotional

material in support of the United States savings bond

campaign. B-225006, June 1, 1987.

• Support of federal credit unions. Support that agencies are

authorized by law to provide to federal credit unions may, if

administratively determined to be necessary, include automatic

teller machines. 66 Comp. Gen. 356 (1987). The justification

was adequate in that case because the facility in question

operated on three shifts, seven days a week and the credit

union could not remain open to accommodate workers on all

shifts.

• Credit bureau reports. The Salaries and Expenses

appropriation of the Internal Revenue Service (IRS) could be

used to procure credit bureau reports if the reports were

administratively determined to be necessary in connection with

investigating applicants for employment with the IRS.

B-117975, Dec. 29, 1953.

• Credit monitoring services. Customs and Border Protection’s

(CBP) Salaries and Expenses appropriation was not available

to pay for credit monitoring services for its employees in the

New Orleans area who, as a result of Hurricane Katrina, were

victims of identity theft. Neither government action nor inaction

compromised the employees’ identities, and in this case the

CBP employees individually, not the government, would be the

primary beneficiaries of the proposed credit monitoring, which

was considered part of the employees’ overall management of

their personal finances. B-309604, Oct. 10, 2007. In contrast, in

a later case, a data breach caused by government action or

inaction compromised employees’ or private citizens’ identities.

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The Nuclear Regulatory Commission (NRC) asked whether, in

the event of such a breach, payment for credit monitoring

services would be permissible as a cost-effective means of

addressing the adverse consequences resulting from the

government’s mistaken disclosure of an employee’s or private

citizen’s personal information. Recognizing that Congress has

required agencies to address breaches and mitigate risks when

government action or inaction mistakenly compromises

personal information, GAO concluded that the purchase of

credit monitoring services for affected individuals would

constitute a means of mitigating the risks as long as the agency

determined that it was necessary under the particular

circumstances. B-310865, Apr. 14, 2008.

• Employee counseling and referral programs related to

elder care. In 1992, the IRS was authorized to undertake

employee counseling and referral programs related to

eldercare. The expenditure was justified under 5 U.S.C. § 7901,

which authorized “preventive programs related to health.”

71 Comp. Gen. 527 (1992). Similar mental health referrals are

discussed at length in section C.6.k above. IRS was not

authorized to provide the actual elder care, as discussed in

section C.4.c above.

• Outplacement assistance. Outplacement assistance to

employees may be regarded as a legitimate matter of agency

personnel administration if the expenditures are found to benefit

the agency and are reasonable in amount. 68 Comp. Gen. 127

(1988); B-272040, Oct. 29, 1997. The Government Employees

Training Act authorizes training in preparation for placement in

another federal agency under conditions specified in the

statute. 5 U.S.C. § 4103(b). Similarly, employee retirement

education and retirement counseling, including individual

financial planning for retirement, fall within the legitimate range

of an agency’s discretion to administer its personnel system

and therefore are legitimate agency expenses. B-301721,

Jan. 16, 2004.

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• Protection of government officials under threat. Otherwise

unrestricted operating appropriations are available to protect a

government official who has been threatened or is otherwise in

danger, if the agency determines that the risk impairs the

official’s ability to carry out his or her duties and hence

adversely affects the efficient functioning of the agency. For

example, the U.S. Customs Service was authorized to use

appropriated funds to purchase home and automobile security

devices for agents where they were needed as a result of the

agent’s law enforcement activities. B-251710, July 7, 1993. See

also 71 Comp. Gen. 4 (1991). Also, certain officials, specified in

18 U.S.C. § 3056(a), are entitled to Secret Service protection.

54 Comp. Gen. 624 (1975), modified by 55 Comp. Gen. 578

(1975).

• Honorariums. Payment of an honorarium to an invited guest

speaker (other than a government employee) is permissible

under a necessary expense rationale. See A-69906, Mar. 16,

1936 (payment of an honorarium by an agency of the District of

Columbia government was found to be an allowable

administrative expense). See also B-20517, Sept. 24, 1941.

• Document notarization fees. Fees for the notarization of

documents are properly payable from appropriated funds where

no government notary is available. B-33846, Apr. 27, 1943.

• Reimbursement to the Civil Service Retirement Fund. An

agency’s appropriations are not available to reimburse the Civil

Service Retirement Fund for losses due to overpayments to a

retired employee resulting from the agency’s erroneous

processing of information. 54 Comp. Gen. 205 (1974).

m. Office furnishings (decorative items)

An agency’s appropriations are available without question to furnish

the space it occupies with such necessary items as desks, filing

cabinets, and other ordinary office equipment. Questions as to the

availability of an appropriation occasionally arise when the item to

be procured is decorative, rather than utilitarian.

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The availability of appropriations for certain decorative items has

long been recognized. The Comptroller of the Treasury advised the

Secretary of the Treasury that “paintings suitable for the decoration

of rooms” were within the meaning of the term “furniture.”

Therefore, an appropriation for the furnishing of public buildings

was available to purchase cases and glass coverings for paintings

of deceased judges. The paintings had been donated to the

government for display in a courtroom. 7 Comp. Dec. 1 (1900).

The Comptroller followed this decision and held that Treasury

appropriations were available to buy portraits as furniture for the

Ellis Island immigration station if administratively determined

“necessary for the public service.” 9 Comp. Dec. 807 (1903).

Citing both of these decisions, the Comptroller General concluded

that the appropriation for Salaries and Expenses of the Tax Court

was available for portraits of the Chief Judges of the Tax Court, to

be hung (the portraits, not the judges) in the main courtroom.

B-178225, Apr. 11, 1973. Similarly, the Tax Court could purchase

artwork and other decorative items for judges’ individual offices.

64 Comp. Gen. 796 (1985).

Other decisions approving the use of appropriated funds for

decorative items are B-143886, Sept. 14, 1960 (oil painting of

agency head for “historical purposes” and public display);

B-121909, Dec. 9, 1954 (“solid walnut desk mount attached to a

name plate”); B-114692, May 13, 1953 (framing of Presidential

Certificates of Appointment for display in the appointee’s office).

Music can perform a similar function: making a workspace more

pleasant and, therefore, more productive. In one case, an agency

noted that pre-programmed “incentive music” (known more

informally as “elevator music”) can increase employee productivity

by creating a pleasantly stimulating and efficient work atmosphere.

Ultimately, the increased productivity can lead to savings to the

government. Accordingly, GAO assented to the use of

appropriations to pay for such music. 51 Comp. Gen. 797 (1972).

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Purchase of decorative items for federal buildings is now covered in

the Federal Property Management Regulations, 41 C.F.R.

§ 101.26.103-2. The regulations authorize expenditures for

pictures, objects of art, plants, flowers (both artificial and real), and

other similar items. However, such items may not be purchased

solely for the personal convenience or to satisfy the personal desire

of an official or employee. In addition, in recent years Congress has

enacted temporary, but recurring, government-wide prohibitions on

the use of appropriated funds to pay for the painting of portraits of

specified federal officials. B-327671, Feb. 19, 2016.

The regulation was discussed and the rule restated in 60 Comp.

Gen. 580 (1981). Decorative items may be purchased if the

purchase is consistent with work-related objectives and the items to

be purchased are not “personal convenience” items.

115

The

determination of “necessity” is within the agency’s discretion,

subject to the regulations. The regulations apply equally to space

leased by an agency in a privately owned building. See also

64 Comp. Gen. 796 (1985); 63 Comp. Gen. 110, 113 (1983).

As noted, generally, one type of permissible decorative item is flora.

A restriction in a 1980 appropriation act prohibited the use of funds

for plant and flower maintenance contracts. The Comptroller

General construed this provision to apply only to the office space to

which particular federal employees were actually assigned, since

the provision’s legislative history suggested that it was not intended

to apply to outdoor plants or to plants in common areas that were

not the assigned work space of any particular employee or group of

employees. 59 Comp. Gen. 428 (1980).

115

The decision also noted that the items must be for permanent rather than “seasonal”

use. 60 Comp. Gen. at 582. The rule prohibiting use of appropriated funds for seasonal

(e.g., holiday) decorations has since been modified. See 67 Comp. Gen. 87 (1987),

discussed in section C. 4. f. (2) .

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n. Photographs

Early decisions stated an absolute rule forbidding the use of

appropriations for the cost of photographs of individual employees

in the absence of express statutory authority. The rule was

intended to prevent the use of public funds for the personal publicity

of a particular individual. For example, an agency occasionally

received requests from newspapers and other media outlets for

photographs of an agency official who delivered speeches. These

photographs were of a personal nature, so appropriations were not

available to pay for them. 31 Comp. Gen. 452 (1952). In another

case, an agency improperly disseminated to the press photographs

of a new agency official upon his appointment. B-111336, Sept. 16,

1952.

Later decisions did not state the rule in absolute terms but instead

stated that appropriations are not available for the photographs “in

the absence of a definite indication as to the necessity for the

expenditures in the accomplishment of some purpose for which the

appropriation of funds was made.” 47 Comp. Gen. 321 (1967). This

is, of course, simply a restatement of the necessary expense rule.

For example, the Equal Employment Opportunity Commission

(EEOC) noted that newspapers tended to situate stories more

prominently if accompanied by a photograph, and that greater

publicity about EEOC’s work helped it accomplish its statutory

mission. It was, therefore, permissible for EEOC to distribute to the

press photographs of an EEOC official when he delivered public

speeches.

116

47 Comp. Gen. 321; see also B-123613, June 1,

1955; B-114344, May 19, 1953; B-47547, Feb. 15, 1945. Similarly,

distribution of photographs of a department store display was a

proper means of carrying out a statutory function of encouraging

public cooperation toward economic stabilization. B-113464,

Jan. 29, 1953; see also B-175434, Apr. 11, 1972; B-113026,

Jan. 19, 1953; B-15278, May 15, 1942.

116

The decision further pointed out that the expense was chargeable to the fiscal year in

which the photographs were taken rather than the year in which they were actually used.

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Photographs for use on identification cards or badges are

permissible when administratively determined necessary to protect

government property or for security reasons. 23 Comp. Gen. 494

(1944); 20 Comp. Gen. 566 (1941); 20 Comp. Gen. 447 (1941);

2 Comp. Gen. 429 (1923). Also, while at one time, travel

regulations did not provide for the reimbursement of passport

photographs, 9 Comp. Gen. 311 (1930), the regulations were

subsequently amended and passport photographs for official travel

are now reimbursable under 41 C.F.R. § 301-12.1. See 52 Comp.

Gen. 177 (1972).

Of course, the rules pertaining to gifts applied and still apply to

photographs. For instance, a group photograph of interagency

participants in a training symposium, sent free to participants, was

impermissible. B-149493, Dec. 28, 1977. Similarly, the National

Park Service could not permissibly take photographs at the

dedication of the Klondike Gold Rush Visitor Center to be sent as

“mementos” to persons attending the ceremony, as this would

constitute an impermissible personal gift. B-195896, Oct. 22, 1979.

o. Postage

Agencies are required to reimburse the Postal Service for mail sent

by or to them as penalty mail.

117

Reimbursement is to be made “out

of any appropriations or funds available to them.” 39 U.S.C.

§ 3206(a). This statute amounts to an exception to the general

purpose statute, 31 U.S.C. § 1301(a), in that the expenditure may

be charged to any appropriation available to the agency. Penalty

mail costs do not have to be charged to the particular bureau or

activity that generated the cost. 33 Comp. Gen. 206 (1953). By

virtue of this statutory authority, the use of appropriations for one

component of an agency to pay penalty mail costs of another

component funded under a separate appropriation does not

constitute an unauthorized transfer of appropriations. 33 Comp.

117

Penalty mail means official mail, other than franked mail, which is authorized by law to

be transmitted in the mail without prepayment of postage. 39 U.S.C. § 3201(1).

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Gen. 216 (1953). The same principle applies to reimbursement for

registry fees. 36 Comp. Gen. 239 (1956).

p. Rewards

This section discusses when appropriated funds may be used to

offer and pay rewards. As a general proposition, an agency needs

statutory authority to use its appropriated funds for this purpose.

Exactly how explicit this statutory authority has to be depends

somewhat on the nature of the information or services for which the

reward is contemplated and its relationship to the authority of the

paying agency. In cases where an agency does not have specific

statutory authority, the agency must determine whether the reward

is justified under a necessary expense analysis.

(1) Contractual basis

Where a reward is based on the “necessary expense” theory rather

than on explicit statutory authority, generally there must be an offer

of reward, of which both parties have knowledge, and acceptance

of the offer (here, performance of the service). See, e.g., 26 Comp.

Gen. 605 (1947); 3 Comp. Gen. 734 (1924). See also 70 Comp.

Gen. 720 (1991). The rationale is that “no person by his voluntary

act can constitute himself a creditor of the Government.” 20 Comp.

Dec. 767, 769 (1914). The offer may be in the form of a “standing

offer” promulgated by regulation. See, e.g., B-131689, June 7, 1957

(Treasury Decision constituted the offer for an Internal Revenue

Service reward); 28 C.F.R. pt. 7 (a “standing offer” by the Attorney

General for rewards for the capture, or information leading to the

capture, of escaped federal prisoners).

Consistent with contract theory in general, it is also possible for an

offer to be implied from practice or course of conduct. For example,

a reward was payable to an informer under the prohibition laws

without a specific offer. 4 Comp. Gen. 255 (1924). The informer

was a member of a “gang of whiskey thieves” and “[u]nder such

conditions no specific agreement for compensation is generally

made, but with a man of such character there is, and practically

must be, to obtain the information, an understanding that there will

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be compensation.” Id. at 256. The course of conduct and standing

offer concepts were combined in a case involving a reward for

finding a lost Navy torpedo. A-23019, May 24, 1928. In view of the

prevailing understanding in the area and past practice, the Navy’s

regulations were viewed as “implicitly” making a standing offer.

Similarly, where a reward is based on express statutory authority

and the statute either is discretionary or authorizes the agency to

“offer and pay” a reward, there must be an offer before the agency

can make payment. 41 Comp. Gen. 410 (1961) (14 U.S.C. § 643);

20 Comp. Dec. 767 (1914) (apprehension of a deserter). On the

other hand, if a statute provides for a reward as a matter of

entitlement, the reasons for requiring an offer are less compelling;

the terms of the statute and any implementing regulations will

determine precisely how and when the “contract” comes into

existence. E.g., Merrick v. United States, 846 F.2d 725 (Fed. Cir.

1988), discussed in section C.6.p(2)(a) below in connection with the

Internal Revenue Service statute.

The decisions reach inconsistent conclusions concerning whether

the claimant must have knowledge of the offer where a reward is

based upon express statutory authority. Cases involving the

apprehension of deserters, a subject that we discuss in more detail

later in this section, have concluded that performance of the service

gives rise to an obligation on the part of the government to pay the

offered reward notwithstanding the claimant’s lack of knowledge of

the offer when he performed the service. 27 Comp. Dec. 47 (1920);

20 Comp. Dec. 767 (1914); B-41659, May 26, 1944. On the other

hand, cases involving the finding of lost property have held that

knowledge is required. Thus, a reward the Navy had offered for the

discovery of a lost airplane was denied where the person

discovering the airplane had no knowledge of the offer at the time

he performed the service. 26 Comp. Gen. 605 (1947). This ruling

was followed in a later case, in which the Coast Guard could not

pay a reward under 14 U.S.C. § 643 to one who had no knowledge

of the published offer. 41 Comp. Gen. 410 (1961). In that case,

GAO acknowledged that there was a line of cases indicating that

the rule of contract did not apply with respect to rewards offered

pursuant to statute but stated that “such cases appear to represent

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the minority view.” See also A-35247, Apr. 1, 1931 (escaped

prisoner). The latter group of decisions applying contract principles

purports to be based on the “great weight of authority.” 26 Comp.

Gen. at 606.

Since reward payments for information furnished to the government

are in the nature of compensation for services rendered rather than

personal gratuities, the right to file a claim for the reward vests at

the time the compensation is earned (i.e., the services performed).

Consequently, that right is not defeated where the informant dies

prior to filing a claim or receiving the reward. For example, GAO

approved the payment of a reward to the legal representative of an

informant’s estate for information furnished under the predecessor

of 19 U.S.C. § 1619, even though the informant had not filed a

claim prior to his death. 5 Comp. Gen. 665 (1926); see also

2 Comp. Dec. 514 (1896) (customs); B-131689, June 7, 1957

(internal revenue); B-129886, Dec. 28, 1956 (internal revenue).

(2) Rewards to informers

The majority of our case law regarding rewards discusses

payments to informers. If information is “essential or necessary” to

the effective administration and enforcement of the laws, a reward

may be offered if it can be tied in to a particular appropriation under

the “necessary expense” theory.

118

In that situation, the statutory

authority does not have to expressly provide for the payment of

rewards. If, however, the information is merely “helpful or

desirable,” then more explicit statutory authority is needed. Since

the distinction is difficult to administer as a practical matter,

118

Some of the “contest” cases, discussed above in section C. 6. f. , do not concern

payment of “rewards” to “informers,” yet nonetheless use a “necessary information”

analysis. See, e.g., 70 Comp. Gen. 720 (1991) (National Oceanic and Atmospheric

Administration could pay cash prizes to certain fortunate fisherman returning “fish tags” to

the government); B-286536, Nov. 17, 2000 (Public Buildings Service could use

appropriated funds to pay for prizes in a drawing held in connection with customer

satisfaction surveys, in order to develop customer satisfaction information).

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statutory authority has been granted in many situations to pay

rewards for specific categories of information, as discussed above.

The Comptroller General addressed the issue in 8 Comp.

Gen. 613, 614 (1929), stating:

“An appropriation general in terms is

available to do the things essential to

the accomplishment of the work

authorized by the appropriation to be

done. As to whether such an

appropriation may properly be held

available to pay a reward for the

furnishing of information, not essential

but probably helpful to the

accomplishment of the authorized work,

the decisions of the accounting officers

have not been uniform. The doubt arises

generally because such rewards are not

necessarily in keeping with the value of

the information furnished and possess

elements of a gratuity or gift made in

appreciation of helpful assistance

rendered.”

While the reward in that particular case was permitted, the decision

announced that specific legislative authority would be required in

the future. See also 9 Comp. Gen. 309 (1930); A-26777, May 22,

1929.

Whether a reward to an informer is necessary or merely helpful

depends largely on the nature of the agency’s organic authority and

its appropriations language. For example, the Forest Service is

responsible for protecting the national forests “against destruction

by fire and depredations.” 16 U.S.C. § 551. A 1971 case addressed

the question of rewards in light of this organic authority and

appropriations language making funds available for expenses

necessary for “forest protection and utilization.” Under this

authority, information relating to violations (such as deliberately set

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forest fires, theft of timber, unauthorized occupancy, and

vandalism) could be considered necessary rather than just helpful,

and the Forest Service could therefore offer rewards to informers

without more specific statutory authority. B-172259, Apr. 29, 1971;

see also 5 Comp. Dec. 118 (1898). The ruling was extended to

cover “endorsements” (the “endorsement” by an informant of an

undercover agent to help him gain acceptance with the suspects).

B-172259, Aug. 2, 1972.

Similarly, the Commerce Department could pay rewards to

informers as a necessary expense under a provision of the Export

Control Act of 1949, ch. 11, § 6, 63 Stat. 7 (Feb. 26, 1949), which

authorized the obtaining of confidential information incident to

enforcement of the act. B-117628, Jan. 21, 1954.

The rule was also applied in a 1951 case, in which GAO advised

the Treasury Department that rewards to informers for information

or evidence on violations of the revenue, customs, or narcotics laws

could be offered under an appropriation for the necessary

expenses of law enforcement. B-106230, Nov. 30, 1951. As long as

the information was necessary and not just helpful, more specific

appropriations language was not needed. The result would be

different if the agency did not have specific law enforcement

authority. A.D. 6669, May 15, 1922.

Congress has provided agencies with explicit statutory authority to

pay rewards to informers in a variety of situations.

119

Two notable

119

In addition to the statutes discussed in the text, other examples are: 16 U.S.C. § 668

(capturing, buying or selling of bald eagles); 16 U.S.C. § 1540(d) (violations of

Endangered Species Act); 16 U.S.C. § 2409 (violations of Antarctic Conservation Act

of 1978); 18 U.S.C. § 1751(g) (information concerning presidential assassinations or

attempted assassinations); 18 U.S.C. § 3056 (violations or potential violations of laws

enforced by the Secret Service); 21 U.S.C. § 886 (violations of Drug Abuse Act);

39 U.S.C. § 404(a)(7) (violations of postal laws); 50 U.S.C. § 47a (illegal introduction,

manufacture, acquisition, or export of special nuclear material or atomic weapons or

conspiracies relating thereto).

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grants of statutory authority involve the Internal Revenue Service

and the Customs Service.

(a) Payments to informers: Internal Revenue

Service

One reward to informers most people are familiar with is the reward

offered by the Internal Revenue Service (IRS) for the detection of

tax cheats. While the pertinent Internal Revenue Code provision

does not use the term “reward,” the provision and its predecessors

authorize the payment of sums deemed necessary “for detecting

and bringing to trial and punishment persons guilty of violating the

internal revenue laws.” 26 U.S.C. § 7623. The statute sets forth

circumstances in which the IRS shall or may pay the informer a

reward based on a percentage of the amount recovered. In certain

cases, the IRS may award the informer such sums as it considers

appropriate, taking into account the significance of the informer’s

information and the role of the informer in contributing to the action.

The statute caps this amount at 10 percent of the collected

proceeds resulting from the action. See also 3 Comp. Gen. 499

(1924) (considering an earlier version of this statutory scheme).

The determinations of whether to pay a reward under these

circumstances and, if so, its amount are discretionary and, short of

a showing of no rational basis, are not reviewable by the courts or

by GAO. Saracena v. United States, 508 F.2d 1333 (Ct. Cl. 1975)

(addressing earlier version of statute providing that the IRS is

“authorized to pay such sums, not exceeding in the aggregate the

sum appropriated therefor, as [it] may deem necessary for

detecting and bringing to trial and punishment persons guilty of

violating the internal revenue laws, or conniving at the same, in

cases where such expenses are not otherwise provided for by law”

and IRS regulation capping reward at ten percent of the proceeds

recovered); Krug v. United States, 168 F.3d 1307 (Fed. Cir. 1999),

aff’g 41 Fed. Cl. 96 (1998); Informant v. United States, 46 Fed.

Cl. 1 (2000); B-131689, June 7, 1957; B-10761, June 29, 1940;

B-5768, Sept. 18, 1939; A-96942, Aug. 23, 1938. See also Perri v.

United States, 340 F.3d 1337, 1343 (Fed. Cir. 2003) (determination

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of whether to pay an award from the Asset Forfeiture Fund and its

amount is within the discretion of the Attorney General).

The discretionary language of the IRS statute has been held to

constitute an “indefinite reward offer.” The informant responds by

his conduct, and an “enforceable contract” arises when the parties

fix the amount of the reward. Merrick v. United States, 846 F.2d

725 (Fed. Cir. 1988); Cambridge v. United States, 558 F.3d 1331

(Fed. Cir. 2009); see also Lewis v. United States, 70 F.3d 597, 601

(Fed. Cir. 1995) (applying a “similar statute” that authorized

Customs Service informer awards).

In general, the government cannot contract with another party

through an agent. This rule helps prevent fraud upon the

government in the procurement process. However, it was

permissible for the IRS to contract with an attorney who served as

the agent for an unnamed informant, because the reward to the

unnamed informant did not implicate the reasons for the rule

barring contracts through an agent. B-137762.32, July 11, 1977;

see also B-117628, Jan. 21, 1954. However, Treasury regulations

required that the informant’s identity be disclosed before any claim

could actually be paid. Therefore, disclosure would be necessary if

and when a reward became payable but not before then.

An additional issue in that case was when an agency has to record

an obligation under 31 U.S.C. § 1501(a). B-137762.32, July 11,

1977. No contractual liability to make payment exists until IRS has

evaluated the worth of the information and has assessed and

collected any underpaid taxes and penalties. This is when the

appropriate IRS official determines that a reward should be paid

and its amount, and it is at this point that a recordable obligation

arises.

IRS may also make “support and maintenance” payments to

informers under its general investigation and enforcement authority.

The Comptroller General held that IRS could not make payments to

an informer who was simultaneously being paid by the Justice

Department under its Witness Protection Program, because the

existence of a specific appropriation for an object precludes the use

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of a more general appropriation that would otherwise be available.

B-183922, Aug. 5, 1975. However, IRS could make the payments if

administratively determined to be necessary after the informer had

been disenrolled from the Justice Department’s program.

(b) Payments to informers: Customs Service

The Customs Service also has statutory authority to pay rewards. A

person (other than a government employee) who detects and

seizes any vessel, vehicle, aircraft, merchandise, or baggage

subject to seizure and forfeiture under the customs or navigation

laws, or who furnishes original information, leading to a monetary

recovery, may be paid a reward not to exceed 25 percent of the

amount recovered, provided that the reward shall not exceed

$250,000 in any case. 19 U.S.C. § 1619. Rewards are payable

from “appropriations available for the collection of the customs

revenue.” Id. § 1619(d).

This reward is in the nature of compensation for services rendered

rather than a personal gratuity. 5 Comp. Gen. 665 (1926). The

statute has been deemed mandatory in the sense that an informant

who complies with its terms has a legal and judicially enforceable

claim for the reward. Doe v. United States, 100 F.3d 1576, 1582

(Fed. Cir. 1996); Wilson v. United States, 135 F.2d 1005 (3

Cir.

1943); B-217636, Mar. 4, 1985.

The information furnished must be “original” information, that is, the

first information the Customs Service has concerning the particular

fraud or violation. Lacy v. United States, 607 F.2d 951, 953 (Ct. Cl.

1979); Cornman v. United States, 409 F.2d 230, 234 (Ct. Cl. 1969),

cert. denied, 396 U.S. 960 (1969); Tyson v. United States,

32 F. Supp. 135, 136 (Ct. Cl. 1940).

In cases where the furnishing of information leads to recoveries

from multiple parties, the monetary ceiling on the reward “for any

case” generally applies to the information furnished, not to the

number of recoveries it produces. White & Case LLP v. United

States, 89 Fed. Cl. 12 (Fed. Cl. 2009); see also Cornman, 409 F.2d

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at 234 (discussing older version of statutory ceiling “in any case”),

citing and following 24 Comp. Dec. 17 (1917).

Liquidated damages assessed under customs bonds are

“recoveries” for purposes of 19 U.S.C. § 1619. 34 Comp. Gen. 70

(1954). So are recoveries under bail bonds. 19 U.S.C. § 1619(e).

Moneys received by customs officers as bribes, however, are not

recoveries for purposes of the reward. 11 Comp. Gen. 486 (1932).

The statute applies to recoveries under the “customs laws or the

navigation laws.” See 16 Comp. Gen. 1051 (1937). Recoveries

under other laws generally do not qualify. Thus, a reward could not

be paid where recovery was made under several laws and the

amount attributable to the customs laws or navigation laws could

not be ascertained. 32 Comp. Gen. 405 (1953). Similarly, a

violation of the Anti-Dumping Act is not a violation of the customs

laws for purposes of 19 U.S.C. § 1619. Fraters Valve & Fitting

Co. v. United States, 347 F.2d 990 (Ct. Cl. 1965). Nor is a violation

of the internal revenue laws. Wilson, 135 F.2d 1005. But see Doe v.

United States, 47 Fed. Cl. 367 (2000) (finding that awards under 19

U.S.C. § 1619 and certain drug laws could be made for the same

information).

The reward is authorized, based on appraised value, if the item

forfeited is destroyed or “delivered to any governmental agency for

official use” rather than sold. Under this provision, seized

merchandise donated to state governmental agencies under

General Services Administration (GSA) regulations qualifies for the

reward since the statutory language is not limited to federal

agencies. B-146223, Nov. 27, 1961. Similarly, where forfeited

distilled spirits, wines, or beer, which are required by statute to be

delivered to GSA for disposal, are subsequently given to

“eleemosynary institutions” for medicinal purposes, the reward is

payable because the initial delivery to GSA counts as delivery to a

“governmental agency for official use” under 19 U.S.C. § 1619.

B-146223, Feb. 2, 1962.

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(3) Lost or missing government property

It has long been established that no payment may be made to one

who finds lost government property unless a reward has been

offered prior to the return of the property. 11 Comp. Dec. 741

(1905); 5 Comp. Dec. 37 (1898); A-23019, May 24, 1928;

B-117297-O.M., Feb. 12, 1954. To offer a reward for the recovery

of lost or missing property, an agency needs some statutory basis.

Some cases permit agencies to use a so-called “contingent

expense” appropriation to pay rewards for the recovery of

property.

120

The Army could offer a reward from its contingent

expense appropriation for the recovery of stolen platinum. 6 Comp.

Gen. 774 (1927). The Navy wanted to use a general appropriation

to offer rewards for locating lost aircraft. B-33518, Apr. 23, 1943.

The general appropriation could not be used since the reward was

not essential to carrying out its purposes, but, relying on 6 Comp.

Gen. 774, the Navy could use its contingent expense appropriation.

One case stated that the Coast Guard had no general authority

beyond 14 U.S.C. § 643 to make reasonable payments to persons

who found lost property. 41 Comp. Gen. 410 (1961). This case, in

conjunction with the earlier cases involving the Navy and Army,

seems to suggest that a general operating appropriation is not

available to offer or pay rewards for the recovery of lost property.

The Civil Aeronautics Administration received an appropriation for

the temporary relief of distressed persons. B-79173, Oct. 18, 1948.

The question presented was whether the appropriation was

available to pay a reward to someone who had found a lost airplane

four months after it disappeared. The Comptroller General

concluded that the appropriation was not available to pay a reward

120

The modern successor to the “contingent expense” appropriation is the appropriation

each military department receives for “emergencies and extraordinary expenses”. See,

e.g., Department of Defense Appropriations Act, 2016, Pub. L. No. 114-113, 129 Stat.

2242, 2333, 2335 (Dec. 18, 2015) (appropriation for “emergencies and extraordinary

expenses, to be expended on the approval or authority of the Secretary of the Army”.)

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to someone who had found a lost airplane four months after it had

disappeared because the passengers could all be presumed dead

after four months. The opinion expressly declined, however, to

decide whether the appropriation would have been available if the

airplane had been found “with such promptness as to afford

reasonable hope that survivors might be found and given relief.”

The reasoning is similar to that in the cases regarding rewards to

informants: the reward might have been considered necessary to

carrying out the relief appropriation if there was a reasonable

chance of survivors, but after the passage of several months it

would be at best helpful. As with the necessary expense rule in

general, “necessary” relates not to the importance of the object

itself but to carrying out the purposes of the particular appropriation.

Stolen property was also involved in a case in which the Air Force

asked if it could pay a reward, pursuant to local custom, to two Thai

police officers whose services had been instrumental in recovering

a stolen road grader. 53 Comp. Gen. 707 (1974). Based on

6 Comp. Gen. 774, the Comptroller General held that the Air Force

could pay the reward from its appropriation for emergencies and

extraordinary expenses, successor to the old “contingent expense”

appropriation.

121

However, apart from that particular appropriation,

there was no authority for the reward. This part of the decision was

based on 8 Comp. Gen. 613 (1929), once again implying that the

rules in the rewards to informants cases would apply to missing

property as well.

Some of the cases discussed above were issued prior to the

enactment of statutes that provided some agencies with specific

statutory authority to pay rewards for the recovery of property.

Examples include the Department of Defense and the military

departments (10 U.S.C. § 2252) and the Coast Guard (14 U.S.C.

§ 643).

121

See, e.g., Department of Defense Appropriations Act, 2016, Pub. L. No. 114-113,

129 Stat. 2242, 2333, 2335 (Dec. 18, 2015) (appropriation for “emergencies and

extraordinary expenses, to be expended on the approval or authority of the Secretary of

the Army”).

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(4) Rewards to government employees

A reward may not be paid to a government employee for services

rendered within the scope of his or her official duties.

122

For

example, a Deputy United States Marshal claimed a reward for

apprehending a military deserter. 4 Comp. Gen. 687 (1925). The

reward could not be paid since the Marshal had been acting in his

official capacity (i.e., doing his job) rather than his personal

capacity. See also 7 Comp. Gen. 307 (1927); A-35247, Apr. 1,

1931; A-17808, Mar. 30, 1927. Under the Defense Department’s

statutory authority to pay expenses plus a small reward, a federal

employee may be reimbursed actual expenses incurred, but may

not be paid the reward. 32 Comp. Gen. 219 (1952). In addition,

some statutes, such as 19 U.S.C. § 1619, expressly exclude

government employees from eligibility.

However, if an employee performs services beyond the scope of

his official duties for which a reward has been offered, the reward

may be paid since the employee was acting in his capacity as a

private citizen. Thus, a reward was payable to a patrol inspector for

the Immigration Service who had apprehended a military deserter

since the action was outside the scope of his official duties.

5 Comp. Gen. 447 (1925); see also A-17066, Mar. 2, 1927.

The prohibition against employees receiving rewards for services

performed in the course of their official duties applies as well to

rewards offered by nongovernment sources. The principle is

illustrated in a 1970 case in which an Air Force major, flying a low-

level training mission in the Republic of Colombia, spotted a cargo

plane unloading in a suspicious location. 49 Comp. Gen. 819

(1970). He notified the Colombian authorities, who seized what

turned out to be a load of contraband. Under Colombian law, the

informant was entitled to a reward of 25 percent of the total value of

the contraband. However, any earnings of an employee in excess

122

There is a distinction between rewards and awards; we discuss awards for

government employees in section C. 6. c.

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of his regular compensation, earned in the course of performing his

official duties, belong to the government. Therefore, the major could

not keep the reward but had to turn it in for deposit in the Treasury.

Another reason the major could not keep the reward is the

prohibition in the United States Constitution (art. I, § 9, cl. 8) against

the acceptance by a government officer or employee of gifts or

emoluments from a foreign government without the consent of

Congress. Payments from nongovernment sources may also raise

questions under 18 U.S.C. § 209, particularly where the employee

rendered the same or similar services to both the government and

a private person. See, e.g., United States v. Project on Gov’t

Oversight, 454 F.3d 306 (D.C. Cir. 2006). For a fuller discussion of

this issue, see the discussion in section E.3.b. in Chapter 6,

Availability of Appropriations: Amount.

(5) Military deserters

For many years, a provision in the annual Defense Department

appropriation acts authorized payment of expenses of the

apprehension and delivery of deserters, including a small reward. In

1984, the provision was made permanent and is now found at

10 U.S.C. § 956(1). The Coast Guard also has permanent authority

to offer rewards for the apprehension of deserters. 14 U.S.C. § 644.

Some decisions interpret the statutory language and implementing

regulations. For example, the term “apprehension” was construed

to permit payment of the reward where an Army deserter voluntarily

surrendered to a local law enforcement officer. 6 Comp. Gen. 479

(1927).

The statute and implementing regulations limit the amount payable

as expenses, but this limitation applies only to the period before the

deserter is returned to military control. Expenses incurred after

return to military control, such as continued civil detention at the

request of military authorities, are not subject to the limitation and

may be paid. B-179920, July 18, 1974; B-147496-O.M., Jan. 4,

1962. Three early decisions permitted payment of expenses

incurred in apprehending a deserter in excess of the statutory limit

where the deserter was also wanted for other criminal offenses

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(such as forgery or embezzlement). 16 Comp. Dec. 132 (1909);

11 Comp. Dec. 124 (1904); B-3591, May 27, 1939.

123

q. Traditional ceremonies

Expenditures that might otherwise be prohibited as personal may

be permissible when they are incurred incident to certain traditional

ceremonies. Groundbreaking ceremonies and dedication

ceremonies for the laying of cornerstones in public buildings are the

most common examples of such traditional ceremonies.

For example, the cost of flowers used as centerpieces at a

dedication ceremony was held to be a proper expenditure.

B-158831, June 8, 1966. Similarly, the cost of engraving and

chrome-plating a ceremonial shovel used in a groundbreaking

ceremony was viewed as a necessary expense of the ceremony.

53 Comp. Gen. 119 (1973). Expenses necessarily incident to a

groundbreaking or cornerstone ceremony are chargeable to the

appropriation for the construction of the building. B-158831, June 8,

1966; B-11884, Aug. 26, 1940 (cost of printing programs and

invitations to cornerstone ceremony); A-88307, Aug. 21, 1937

(recording of presidential speech and group photograph at

cornerstone ceremony); B-107165-O.M., Apr. 3, 1952 (cost of

dedication ceremony).

Some expenses incident to Armed Forces change of command

ceremonies are also permissible. For example, the Coast Guard

could use its operating expenses appropriation for the cost of

printing invitations to a change of command ceremony for one of its

123

The excess payment in each of these cases was authorized from the Army’s

appropriation for “contingent expenses.” While the “contingent expense” language is no

longer used, the military departments receive similar appropriations for “emergencies and

extraordinary expenses.” See 53 Comp. Gen. 707 (1974). For an example of such an

appropriation, see Department of Defense Appropriations Act, 2016, Pub. L. No. 114-113,

129 Stat 2242, 2333, 2335 (Dec. 18, 2015) (appropriation for “emergencies and

extraordinary expenses, to be expended on the approval or authority of the Secretary of

the Army”.)

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vessels. 56 Comp. Gen 81 (1976). In view of the traditional role of

change of command ceremonies in the military, the invitations were

not inherently personal. (The case was therefore distinguishable

from the decisions previously discussed prohibiting the use of

public funds for greeting cards.) In another case, the costs of a

change of command reception were payable from official reception

and representation funds because the reception met the

prerequisites for an “official reception for an incoming commander.”

69 Comp. Gen 242 (1990). (See section C.5.n above for a

discussion of official reception and representation funds.)

The “traditional ceremony” concept has also been applied to a

vessel “christening” ceremony at a Navy yard (A-74436, May 19,

1936), a Uniformed Services University of the Health Sciences

annual graduation ceremony (B-211700, Mar. 16, 1984), and a

Federal Law Enforcement Training Center’s graduation ceremony

(B-240365.2, Mar. 14, 1996). But see B-250450, May 3, 1993

(grand opening of a new cafeteria located inside an existing federal

building does not constitute a “traditional ceremony.” Costs of food

and entertainment provided for this event are not payable from

appropriations for operating expenses, but may be chargeable to

reception and representation funds then available).

r. Training

Training of government employees is governed by the Government

Employees Training Act, 5 U.S.C. chapter 41, aspects of which are

discussed in several places in this chapter. The authority of the

Government Employees Training Act is broad. See, e.g., B-272280,

May 29, 1997 (examination expenses that substitute for a college

course are covered where the skipped course is part of an

approved training program for which the agency would otherwise

pay). An agency may pay, or reimburse an employee for,

necessary expenses incident to an authorized training program.

5 U.S.C. § 4109. This applies whether the training is held through a

nongovernment facility or by the federal government itself. 5 U.S.C.

§ 4105; B-258442, Apr. 19, 1995; B-244473, Jan. 13, 1992. The

Act governs training implemented by both agencies and non-

government entities, both of which are defined in the statute.

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5 U.S.C. § 4101. The event, however, must comply with the Act’s

definition of “training” in 5 U.S.C. § 4101(4). 72 Comp. Gen. 178

(1993).

Training can also encompass preparation for professional

examinations. For example, the Pension Benefit Guaranty

Corporation (PBGC) asked whether it could use appropriated funds

to pay, as training costs, fees for actuary accreditation. B-286026,

June 12, 2001. PBGC employs a number of actuaries to calculate

pension benefits. Although actuaries, at that time, did not need a

professional license for employment, PBGC proposed to use

training funds to send actuaries to the examination review courses

and to provide on-the-job study time. PBGC determined that this

course of study and testing would enhance the ability of the PBGC

actuaries to carry out their assignments. PBGC has the discretion

under the Government Employees Training Act to determine that

the review courses constitute appropriate training for its actuaries.

Accordingly, PBGC has authority, under 5 U.S.C. § 4109(a), to use

appropriated funds for review courses and on-the-job study time.

124

Although the Government Employees Training Act provides broad

authority, it is not unlimited. For example, tryouts for the U.S.

Olympic Shooting Team do not constitute training under the Act.

68 Comp. Gen. 721 (1989). Nor do routine meetings, however

formally structured. 68 Comp. Gen. 606 (1989); 68 Comp. Gen. 604

(1989).

Training of nonfederal personnel, where necessary to the

implementation of a federal program, is a straightforward

“necessary expense” question under the relevant program

appropriation. E.g., 18 Comp. Gen. 842 (1939); see also B-148826,

July 23, 1962 (Defense Department could pay $1 each to students

participating in a civil defense training course as consideration for a

124

The decision also concluded that PBGC had no authority to pay the cost for the

accreditation examination itself. However, this decision preceded the enactment of

5 U.S.C. § 5757, which grants agencies authority to pay for professional accreditation. We

discuss 5 U.S.C. § 5757 further in section C. 4. g.

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release from liability; the students presumably were not federal

employees).

A government entity that is not an “agency” as that word is defined

for the purposes of the Training Act receive no authority under the

Training Act. 5 U.S.C. § 4101 (defining “agency” for the purposes of

the Training Act). For an entity not covered by the definition of

“agency” in the Act, the authority to conduct training is limited. The

particular training program must be (1) necessary to carry out the

purpose for which the appropriation is made, (2) for a period of brief

duration, and (3) special in nature. 36 Comp. Gen. 621 (1957)

(including extensive citations to earlier decisions); see also

68 Comp. Gen. 127 (1988).

s. Travel

Reimbursement for travel expenses incurred on official travel is

now authorized by statute. 5 U.S.C. § 5702. However, even before

the legislation was enacted, expenses incurred on authorized,

official travel were reimbursable as a necessary expense. 4 Comp.

Dec. 475 (1898).

Of course, there are limits to the amount reimbursable. Expenses

are reimbursable only to the extent authorized by statute and

implementing regulations, such as those allowing for the

reimbursement of necessary travel expenses. Thus, in an early

case, expenses of a groom and valet incurred by an Army officer in

Belgium could not be regarded as necessary travel expenses and

therefore could not be reimbursed from Army appropriations.

21 Comp. Dec. 627 (1915).

Another limit to reimbursable travel expenses concerns the nature

of the travel. Senior-level officials frequently travel for political

purposes. As the Justice Department has pointed out, it is often

impossible to neatly categorize travel as either purely business or

purely political. To the extent it is possible to distinguish, however,

appropriated funds should not be used for political travel. 6 Op. Off.

Legal Counsel 214 (1982). GAO has conducted occasional reviews

in this area, and has commented on the lack of legally binding

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guidelines against which to evaluate particular expenditures. E.g.,

GAO, Review of White House and Executive Agency Expenditures

for Selected Travel, Entertainment, and Personnel Costs, AFMD-

81-36 (Washington, D.C.: Mar. 6, 1981); Review of the Propriety of

White House and Executive Agency Expenditures for Selected

Travel, Entertainment, and Personnel Costs, FGMSD-81-13

(Washington, D.C.: Oct. 20, 1980).

Finally, there are situations in which expenses of congressional

travel may be chargeable to the appropriations of other agencies.

For example, under 31 U.S.C. § 1108(g) “[a]mounts available under

law are available for field examinations of appropriation estimates.

The use of the amounts is subject only to regulations prescribed by

the appropriate standing committees of Congress.”

Thus, travel expenses of congressional committee members and

staff incident to “field examinations” of appropriation requests may

be charged to the agency whose programs and budget are being

examined. B-214611, Apr. 17, 1984; B-129650, Jan. 2, 1957.

Before the above provision was enacted as permanent legislation,

similar provisions had appeared for many years in various

appropriation acts. See 6 Comp. Gen. 836 (1927); 23 Comp.

Dec. 493 (1917). Travel expenses of congressional spouses

(Members and staff), however, may not be paid from appropriated

funds. B-204877, Nov. 27, 1981.

Federal employees may retain promotional travel benefits, including

frequent flyer miles or upgrades, when the benefits are earned as a

result of official travel and if the promotional item is obtained under

the same terms as those offered the general public and at no

additional cost to the government. Pub. L. No. 107-107, div. A,

title XI, § 1116, 115 Stat. 1012, 1241 (Dec. 28, 2001).

D. Step 2: expenditure must not be

prohibited

Determining that an expenditure is reasonably and logically related

to the purpose of an appropriation does not end the inquiry. The

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second test under the purpose analysis is that the expenditure must

not be prohibited by law. As a general proposition, neither a

necessary expense rationale nor the “necessary expense”

language in an appropriation act can be used to overcome a

statutory prohibition. E.g., B-277905, Mar. 17, 1998 (expenditure for

installation and maintenance of water pipelines to support a military

base golf course not permissible because such expenditure is

specifically prohibited by 10 U.S.C. § 2246, which prohibits the use

of appropriated funds to “equip, operate, or maintain” a golf

course); B-247348, June 22, 1992 (detail of Government Printing

Office employee to Library of Congress not permissible because

44 U.S.C. § 316 prohibits details for “duties not pertaining to the

work of public printing and binding”). In 38 Comp. Gen. 758 (1959)

and 4 Comp. Gen. 1063 (1925), the Comptroller General held that

the necessary expense language did not overcome the prohibition

in 41 U.S.C. § 12 against contracting for public buildings or public

improvements in excess of appropriations for the specific purpose.

In large measure, this is little more than an application of the rule

against repeal by implication discussed in Chapter 2, section D.8.a.

There are exceptions where applying the rule would make it

impossible to carry out a specific appropriation. A very small group

of cases stands for the proposition that, where a specific

appropriation is made for a specific purpose, an expenditure which

is “absolutely essential” to accomplishing the specific object may be

incurred even though the expenditure would otherwise be

prohibited. In order for this exception to apply, the expenditure must

literally be absolutely essential in the sense that the object of the

appropriation could not be accomplished without it. Also, the rule

would not apply to the use of a more general appropriation.

For example, in 2 Comp. Gen. 133 (1922), modifying 2 Comp.

Gen. 14 (1922), an appropriation to provide airmail service between

New York, Chicago, and San Francisco was held available to

construct hangars and related facilities at a landing field in Chicago

notwithstanding the requirement for a specific appropriation in

41 U.S.C. § 12. The reason was that it would have been impossible

to provide the service, and hence, to accomplish the purpose of the

appropriation, without erecting the facilities. See also 17 Comp.

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Gen. 636 (1938) and 22 Comp. Dec. 317 (1916). (The 1938

decision cites the rule but the decision itself is an ordinary

necessary expense case.)

An 1899 case, 6 Comp. Dec. 75, provides another good illustration

of the concept. The building housing the Department of Justice

(Justice) had become unsafe and overcrowded. Congress enacted

legislation to authorize and fund the construction of a new building.

The statute specifically provided that the new building be

constructed on the site of the old building, but did not address the

question of how Justice would function during the construction

period. The obvious solution was to rent another building until the

new one was ready, but 40 U.S.C. § 34 prohibited the rental of

space in the District of Columbia except under an appropriation

specifically available for that purpose, and Justice had no such

appropriation. On the grounds that any other result would be

absurd, the Comptroller of the Treasury held that Justice could rent

interim space notwithstanding the statutory prohibition. While the

decision was not couched in terms of the expenditure being

“absolutely essential,” it said basically the same thing. Since Justice

could not cease to function during the construction period, the

appropriation for construction of the new building could not be

fulfilled without the expenditure for interim space.

As the above examples show, many prohibitions (such as on the

use of appropriations for golf courses or on details of Government

Publishing Office employees) have narrow applicability, sometimes

applying to particular activities or to a single agency. Some

prohibitions appear in annual appropriations acts and apply only to

a single agency for a single year. See, e.g., B-328325, Sept. 12,

2016 (Congress barred the National Telecommunications and

Information Administration from taking certain actions during fiscal

year 2016). Therefore, it is important that agencies maintain

awareness not only of permanent statutory prohibitions but also of

temporary prohibitions that Congress may enact in annual

appropriations acts.

Of course, agencies must heed all prohibitions, whether broad or

narrow, permanent or temporary. However, this section will discuss

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prohibitions that apply to many agencies across the government.

These prohibitions generally have longstanding applicability, either

because Congress has enacted them into permanent law or

because they are temporary measures that Congress typically re-

enacts annually. Most of expenditures we discuss here, such as for

lobbying or for attorneys, are prohibited by statute. Another

principle that bars many expenditures, sovereign immunity, is

rooted in the constitutional supremacy of the federal government.

We will also discuss the prohibition of the purchase of insurance,

which is rooted in longstanding policy as well as in a series of

Comptroller General decisions.

1. Agency communications with Congress

and the public

Congress has enacted a number of statutory provisions concerning

agency communications with it and with the public. Some of these

provisions, such as one barring agencies from engaging in

particular lobbying activities, are permanent. Other provisions, such

as those barring agencies from engaging in publicity or

propaganda, are not in permanent law but instead appear in annual

appropriations statutes.

Provisions on agency communications fall into five categories, all of

which we will discuss in this section:

1. Provisions that bar the use of appropriations to make appeals to

members of the public suggesting that they, in turn, contact their

elected representatives to indicate support of or opposition to

pending legislation. Such activity is known as “grassroots

lobbying.”

2. Prohibitions on the use of appropriations for publicity or

propaganda. As we will discuss, the prohibition against publicity

or propaganda bars three categories of communications:

(1) self-aggrandizement, or communications tending to

emphasize the importance of the agency, its officials, or the

activity in question; (2) covert propaganda, which refers to

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communications that fail to disclose the agency’s role as the

source of the information; and (3) purely partisan materials,

which are those designed to aid a political party or candidate.

3. Prohibitions on the use of appropriated funds to pay the salary

of any federal official who prohibits or prevents another federal

employee from communicating with Congress.

4. A longstanding policy against the appearance of commercial

advertising in government publications.

5. A statute barring the use of appropriations to pay publicity

experts.

In this section we discuss expenditures that are prohibited by law or

policy. We further discuss advertising specifically in section C.6.a

above: agencies may use their appropriations to purchase

advertising both if it is a necessary expense (Step 1 of the three-

step purpose analysis) and if the expenditure is not prohibited

(Step 2 of the purpose analysis).

a. Lobbying

Generally speaking, there are two types of lobbying. “Direct

lobbying,” as the term implies, means direct contact with the

legislators, either in person or by various means of written or oral

communication. “Indirect” or “grassroots” lobbying is different.

There, the lobbyist contacts third parties, either members of special

interest groups or the general public, and urges them to contact

their legislators to support or oppose something. Of course, the

term “lobbying” can also refer to attempts to influence decision

makers other than legislators.

There is nothing inherently evil about lobbying. A House select

committee investigating lobbying in 1950 put it this way:

“Every democratic society worthy of the

name must have some lawful means by

which individuals and groups can lay

their needs before government. One of

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the central purposes of government is

that people should be able to reach it;

the central purpose of what we call

‘lobbying’ is that they should be able to

reach it with maximum impact and

possibility of success. This is,

fundamentally, what lobbying is

about.”

125

Nevertheless, because of the obvious potential for abuse, there are

legal restrictions on lobbying. This section will explore some of

them. Because the focus of this publication is on the use of

appropriated funds, coverage is limited for the most part to lobbying

by government officials and does not include lobbying by private

organizations. Restrictions on lobbying by government officials

derive from two sources: penal statutes and provisions in

appropriation acts.

(1) Grassroots lobbying

(a) The Anti-Lobbying Act: 18 U.S.C. § 1913

Originally enacted in 1919, 18 U.S.C. § 1913 provided for criminal

sanctions. In late 2002, however, the statute was amended to omit

the criminal sanctions and significantly expand the scope of the

lobbying restriction.

126

The statute, commonly referred to as the

Anti-Lobbying Act, now provides:

“No part of the money appropriated by

any enactment of Congress shall, in the

absence of express authorization by

Congress, be used directly or indirectly

to pay for any personal service,

125

General Interim Report of the House Select Committee on Lobbying Activities, H.R.

Rep. No. 81-3138, at 1 (1950).

126

Century Department of Justice Appropriations Authorization Act, Pub. L.

No. 107-273, div. A, title II, § 205(b), 116 Stat. 1758, 1778 (Nov. 2, 2002).

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advertisement, telegram, telephone,

letter, printed or written matter, or other

device, intended or designed to

influence in any manner a Member of

Congress, a jurisdiction, or an official of

any government, to favor, adopt, or

oppose, by vote or otherwise, any

legislation, law, ratification, policy, or

appropriation, whether before or after

the introduction of any bill, measure, or

resolution proposing such legislation,

law, ratification, policy, or appropriation;

but this shall not prevent officers or

employees of the United States or of its

departments or agencies from

communicating to any such Member or

official, at his request, or to Congress or

such official, through the proper official

channels, requests for any legislation,

law, ratification, policy, or appropriations

which they deem necessary for the

efficient conduct of the public business,

or from making any communication

whose prohibition by this section might,

in the opinion of the Attorney General,

violate the Constitution or interfere with

the conduct of foreign policy, counter-

intelligence, intelligence, or national

security activities. Violations of this

section shall constitute violations of

section 1352(a) of title 31.”

Thus, section 1913 incorporates the penalties contained in another

lobbying statute, 31 U.S.C. § 1352. That statute provides that any

person who makes an improper expenditure shall be subject to a

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civil penalty ranging from $10,000 to $100,000 for each improper

expenditure.

127

Prior to the 2002 amendment, 18 U.S.C. § 1913 only prohibited the

use of appropriated funds for lobbying aimed at the most basic

legislative activities of Congress. The amended statute expands the

prohibition to a broader scope of legislative activities conducted at

all levels of government, not just the federal level.

To date no case law has provided further insight on the expanded

and decriminalized 18 U.S.C. § 1913. The following discussion of

the statute, while based upon section 1913 before it was amended

in 2002, nevertheless provides a solid foundation for interpreting

the statute as the basic framework of the lobbying restriction was

not altered.

The context in which the original section 1913 was enacted is

reflected in the following passage from the floor debate on the 1919

legislation:

“The bill also contains a provision

which . . . will prohibit a practice that has

been indulged in so often, without

regard to what administration is in

power[—]the practice of a bureau chief

or the head of a department writing

letters throughout the country, sending

telegrams throughout the country, for

this organization, for this man, for that

company to write his Congressman, to

wire his Congressman, in behalf of this

or that legislation. (Applause.) The

gentleman from Kentucky . . . during the

closing days of the last Congress was

greatly worried because he had on his

127

A thorough discussion of 31 U.S.C. § 1352, also known as the Byrd Amendment, is in

section D. 1. a. (4).

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desk thousands upon thousands of

telegrams that had been started right

here in Washington by some official

wiring out for people to wire

Congressman Sherley . . . Now, it was

never the intention of Congress to

appropriate money for this purpose, and

[§ 1913] will absolutely put a stop to that

sort of thing. (Applause.)”

128

Since 18 U.S.C. § 1913 was a criminal statute, its enforcement was

the responsibility of the Department of Justice and the courts.

Although the statute no longer contains criminal sanctions, the

Department of Justice continues to have enforcement

responsibilities. The enforcement mechanism for 18 U.S.C. § 1913

is derived from 31 U.S.C. § 1352(c), which provides that violations

are to be handled in accordance with the administrative process for

adjudicating civil liability for false claims. Under this process,

provided for under the Program Fraud Civil Remedies Act of 1986,

Pub. L. No. 99-509, title VI, subtitle B, §§ 6101-04, 100 Stat. 1874,

1934-1948 (Oct. 21, 1986), codified at 31 U.S.C. §§ 3801–3812, no

alleged violation is subject to adjudication unless approved by the

Department of Justice. 31 U.S.C. § 3803(b). The Department of

Justice is also responsible for the judicial enforcement of any civil

penalty imposed. 31 U.S.C. § 3806.

Where GAO has determined that appropriated funds were used,

GAO would refer those matters to the Department of Justice in

appropriate cases. E.g., B-192658, Sept. 1, 1978; B-164497(5),

Mar. 10, 1977. Generally, GAO would refer matters to the

Department of Justice if asked to do so by a Member of Congress

or where available information provided reasonable cause to

suspect that a violation may have occurred. B-145883, Apr. 27,

1962.

128

58 Cong. Rec. 403 (1919) (remarks of Representative Good), quoted in National

Treasury Employees’ Union v. Campbell, 654 F.2d 784, 791 (D.C. Cir. 1981).

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The Department of Justice has construed section 1913 as applying

to large-scale “grassroots” lobbying campaigns of telegrams,

letters, and other forms of communication designed to generate

citizen contacts with Congress on behalf of an Administration

position with respect to pending legislation, but not to direct

communications between executive branch officials and Congress.

The Department of Justice later emphasized that section 1913 does

not apply to (1) public speeches, appearances, or writings, so that

officials are free to publicly advance Administration positions, even

to the point of calling on the public to encourage Members of

Congress to support such positions, or (2) the lobbying activities of

the President, his aides and assistants within the Executive Office

of the President, the Vice President, cabinet members, and other

Senate-confirmed officials appointed by the President. See OLC,

Guidelines on 18 U.S.C. § 1913 (Apr. 14, 1995); 13 Op. Off. Legal

Counsel 300 (1989).

129

In evaluating particular fact situations to determine possible

violations of section 1913, GAO has applied the Department of

Justice’s interpretation of that statute. Thus, GAO found that

referral to Justice was not warranted in the following situations:

• Unsolicited letter to Members of Congress from agency head

urging support for continuation of agency programs. B-145883,

Oct. 10, 1967.

129

However, when applying grassroots lobbying prohibitions enacted within

appropriations measures, GAO has not recognized a similar blanket exemption for the

lobbying activities of presidentially-appointed and Senate-confirmed officials. See

B-325248, Sept. 9, 2014 (e-mail message sent by the Deputy Secretary of the Department

of Housing and Urban Development violated section 716 of the Financial Services and

General Government Appropriations Act, 2012, Pub. L. No. 112-74, div. C., title VII, § 716,

125 Stat. 786, 933 (Dec. 23, 2011), as carried forward by Pub. L. No. 113-6, div. F, title I,

§§ 1101(a)(2), 1105, 127 Stat. 198, 412-413 (Mar. 26, 2013)). Further, although the

Department of Justice exempts the activities of certain officials from application of

section 1913, it cautioned against these officials engaging in the sort of grassroots

lobbying campaigns the provision was intended to prevent. 13 Op. Off. Legal Counsel

at 303 n.5.

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• Various judicial branch activities including direct contacts with

legislators by federal judges, legislative liaison activities by the

Judicial Conference of the United States, and some grassroots

lobbying which did not involve the use of federal funds.

63 Comp. Gen. 624 (1984).

• Providing to a private lobbying group a copy of congressional

testimony by the Secretary of State supporting the

Administration’s Central American policies. 66 Comp. Gen. 707

(1987). The answer may have been different if the State

Department had used appropriated funds to develop material

for the lobbying group rather than simply providing existing and

readily available material. Id; see also B-229069.2, Aug. 1,

1988.

• Contacts with congressional staff members and a briefing for

the House Foreign Affairs Committee by State Department

officials designed to generate opposition for a legislative

measure perceived as inconsistent with administration nuclear

nonproliferation policy. B-217896, July 25, 1985.

• Speeches and written materials by the Chairman of the Federal

Trade Commission expressing opposition to the Postal

Service’s “monopoly” status for letter class mail. None of the

materials exhorted members of the public to contact their

legislators. B-229257, June 10, 1988.

130

• Written materials prepared and disseminated by the Small

Business Administration (SBA), none of which included

grassroots lobbying, designed to support an administration

proposal to transfer the SBA to the Commerce Department.

B-223098, B-223098.2, Oct. 10, 1986.

130

Although not noted in the decision, under the Department of Justice’s interpretation of

section 1913 noted above, the lobbying activities of the Chairman would not have been

restricted in any case. See, e.g., B-270875, July 5, 1996.

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• Transmission of information by the Consumer Product Safety

Commission to a private company advising of scheduled

congressional hearings on legislation relevant to a problem the

company was facing. B-229275-O.M., Nov. 17, 1987. The

memorandum stated:

“We believe it is within the statutory

authority of a regulatory agency to

advise a regulated company that a

remedy it seeks can only be obtained

through legislation and that such

legislative remedy may be initiated by a

particular Congressional Committee.”

• Congressional briefings by Department of Energy officials

designed to influence views on nuclear weapons testing

legislation. A planned media campaign to further that objective

would have been more questionable, but it was not carried out.

GAO, Nuclear Test Lobbying: DOE Regulations for Contractors

Need Reevaluation, GAO/RCED-88-25BR (Washington, D.C.:

Oct. 9, 1987).

• Letter sent by Deputy Secretary of Energy to thousands of

individuals and organizations addressing the administration’s

energy policies and legislative proposals was not grassroots

lobbying as recipients were encouraged to contact the Deputy

Secretary, not their elected representatives. B-270875, July 5,

1996.

• Environmental Protection Agency distribution of fact sheets to

various organizations setting forth the adverse effects of

pending legislation on the environment was not grassroots

lobbying as none of the material contained direct appeals for

people to contact Members of Congress. B-270875, July 5,

1996.

• Consumer Product Safety Commission e-mail to swimming pool

industry representative encouraging the recipient to contact

Members of Congress that supported a rule change involving

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the interpretation of the phrase “unblockable drain” was not

grassroots lobbying because the e-mail did not address

pending legislation. B-322882, Nov. 8. 2012.

Numerous additional examples may be found in section D.1.b

below.

GAO found the following situations sufficiently questionable to

warrant referral to Justice:

131

• An article written by a Commerce Department official and

published in Business America, a Commerce Department

publication, explicitly urging readers to contact their elected

representatives in Congress to support certain amendments to

the Export Administration Act.

132

B-212235(1), Nov. 17, 1983.

• Campaign by Air Force and Defense Department to use

contractors’ lobbyists and subcontractor network to lobby

Congress in support of C-5B aircraft procurement. GAO,

Improper Lobbying Activities by the Department of Defense on

the Proposed Procurement of the C-5B Aircraft,

GAO/AFMD-82-123 (Washington, D.C.: Sept. 29, 1982).

As of early 1995, the Department of Justice reported that there had

been no prosecutions under section 1913.

133

See OLC, Guidelines

on 18 U.S.C. § 1913 (Apr. 14, 1995). To our knowledge, Justice

131

A few early cases will be found in which GAO held expenditures illegal under

18 U.S.C. § 1913. E.g., B-139134-O.M., June 17, 1959 (Air Force paid registration fee for

members to enter state rifle association shooting match; portion of fee set aside for fund to

fight adverse gun legislation held to be an improper payment); B-76695, June 8, 1948.

132

Under later Department of Justice interpretations of section 1913, a similar case may

not warrant referral since Justice interprets section 1913 as permitting agency officials to

publicly advance Administration positions in public speeches, appearances, and writings,

including urging the public to contact elected officials.

133

A conclusion by the Department of Justice that section 1913 was violated would not

have automatically resulted in a prosecution. The Attorney General has what is known as

“prosecutorial discretion;” a great many factors influence the decision whether to

prosecute.

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initiated no prosecutions between 1995 and 2002 when section

1913 was amended.

As noted earlier, no judicial activity under the amended version of

18 U.S.C. § 1913 has provided new insight into the provision. See,

e.g., AFGE, Local 3721 v. District of Columbia, 2005 U.S. Dist.

LEXIS 8326, *33-34 (D.D.C. May 2, 2005) (reaffirming that section

1913 only applies to federal departments or agencies and their

employees despite broad prohibitory language). Judicial activity

addressing the pre-amendment version largely regarded the issue

of whether the statute created a private right of action. The answer

was no. Grassley v. Legal Services Corp., 535 F. Supp. 818

(S.D. Iowa 1982); National Treasury Employees’ Union v.

Campbell, 482 F. Supp. 1122 (D.D.C. 1980), aff’d, 654 F.2d 784

(D.C. Cir. 1981), overruling National Association for Community

Development v. Hodgson, 356 F. Supp. 1399 (D.D.C. 1973);

American Trucking Ass’ns, Inc. v. Department of Transportation,

492 F. Supp. 566 (D.D.C. 1980).

One other statute with penal sanctions deserves brief mention—the

Lobbying Disclosure Act of 1995, Pub. L. No. 104-65, 109 Stat. 691

(Dec. 19, 1995), as amended, classified largely at 2 U.S.C.

§§ 1601–1612. This statute does not apply to the legislative

activities of government agencies, but rather to organizations that

lobby certain federal officials in the legislative and executive

branches. These organizations are required to register with the

Secretary of the Senate and the Clerk of the House of

Representatives and to semiannually report expenditures and

certain other information related to their lobbying efforts.

134

2 U.S.C.

§§ 1603(a), 1604. This statute repealed the Federal Regulation of

Lobbying Act of 1946, which GAO criticized for resulting in

comparatively few lobbyists registering with Congress. See GAO,

Federal Lobbying: Comments on the Adequacy of Federal

134

See GAO, Federal Lobbying: Differences in Lobbying Definitions and Their Impact,

GAO/GGD-99-38 (Washington, D.C.: Apr. 15, 1999).

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Lobbying Laws, GAO/T-GGD-93-49 (Washington, D.C.: Sept. 30,

1993).

(b) Appropriations act provisions: publicity or

propaganda designed to influence pending

legislation

The version of the appropriations act restriction that the Comptroller

General has had the most frequent occasion to apply is the version

prohibiting publicity or propaganda designed to influence pending

legislation.

135

For over 30 years, from the early 1950s to fiscal year 1984, the

following provision was enacted every year:

“No part of any appropriation contained

in this or any other Act . . . shall be used

for publicity or propaganda purposes

designed to support or defeat legislation

pending before Congress.”

136

As long as this version was in effect, it applied, by virtue of the “this

or any other act” language, to all government agencies regardless

of which appropriation act provided their funds. For fiscal year

1984, the “this or any other act” provision fell victim to a point of

order and was dropped. See 64 Comp. Gen. 281 (1985). For some

time after that, no government-wide provision existed. However,

135

The lobbying restriction on activities designed to influence pending legislation differs,

of course, from the prohibition on the use of appropriated funds for publicity or

propaganda—self-aggrandizement, covert propaganda, and purely partisan materials—

which will be discussed in depth in section D. 1. b.

136

E.g., Treasury, Postal Service, and General Government Appropriations Act, 1980,

Pub. L. No. 96-74, § 607(a), 93 Stat. 559, 575 (Sept. 29, 1979).

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another change in course occurred and since fiscal year 1997,

137

the following government-wide “pending legislation” provision has

been in place:

“No part of any funds appropriated in

this or any other Act shall be used by an

agency of the executive branch, other

than for normal and recognized

executive-legislative relationships, for

publicity or propaganda purposes, and

for the preparation, distribution or use of

any kit, pamphlet, booklet, publication,

radio, television or film presentation

designed to support or defeat legislation

pending before the Congress, except in

presentation to the Congress itself.”

138

Although the government-wide provision currently in place is more

detailed than the prior government-wide restriction, we have

concluded that the language currently used has the same legal

effect. See B-270875, July 5, 1996.

During the time when there was no government-wide restriction,

restrictions aimed at curtailing the influencing of pending legislation

appeared in individual appropriation acts in various forms. Many of

these continue to appear in individual appropriation acts along with

137

In fiscal year 1996, GAO investigated whether or not the activities of five agencies

violated any anti-lobbying provisions and concluded that there were no violations, in part,

because only one of the five agencies was covered by a restriction on influencing pending

legislation. B-270875, July 5, 1996. A government-wide restriction reappeared the next

fiscal year.

138

E.g. Treasury, Postal Service, and General Government Appropriations Act, 1997,

Pub. L. No. 104-208, title VI, § 631, 110 Stat. 3009-314, 3009-362 (Sept. 30, 1996).

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the government-wide restriction.

139

A sampling of fiscal year 2016

appropriation acts provisions provided below reveals a variety of

versions, many of which do not include the terms publicity or

propaganda:

• “None of the funds made available by this Act shall be used in

any way, directly or indirectly, to influence congressional action

on any legislation or appropriation matters pending before the

Congress.”

140

• “None of the Federal funds provided in this Act shall be used for

publicity or propaganda purposes or implementation of any

policy including boycott designed to support or defeat legislation

pending before Congress or any State legislature.”

141

• “None of the funds appropriated by this Act may be used in any

way, directly or indirectly, to influence congressional action on

any legislation or appropriation matters pending before

Congress, other than to communicate to Members of Congress

as described in 18 U.S.C. [§] 1913.”

142

• “No part of any appropriation contained in this Act . . . shall be

used, other than for normal and recognized executive-

legislative relationships, for publicity or propaganda purposes,

for the preparation, distribution, or use of any kit, pamphlet,

139

While it is understandable that individual agency situations may require unique

language, in some instances the restrictions included in the individual appropriation acts

are mere repetition. For example, in 2003 a restriction identical to the government-wide

restriction was also contained in the Veterans Affairs appropriations act. See Veterans

Affairs and Housing and Urban Development, and Independent Agencies Appropriations,

2003, Pub. L. No. 108-7, div. K, title IV, § 414, 117 Stat. 11, 524-25 (Feb. 20, 2003).

140

Department of Defense Appropriations Act, 2016, Pub. L. No. 114-113, div. C,

title VIII, § 8013, 129 Stat. 2242, 2353 (Dec. 18, 2015).

141

Financial Services and General Government Appropriations Act, 2016, Pub. L.

No. 114-113, div. E, title VIII, § 802, 129 Stat. 2242, 2487 (Dec. 18, 2015).

142

Energy and Water Development and Related Agencies Appropriations Act, 2016, Pub.

L. No. 114-113, div. D, title V, § 501, 129 Stat. 2242, 2422 (Dec. 18, 2015).

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booklet, publication, electronic communication, radio, television,

or video presentation designed to support or defeat the

enactment of legislation before the Congress or any State or

local legislature or legislative body, except in presentation to the

Congress or any State or local legislature itself, or designed to

support or defeat any proposed or pending regulation,

administrative action, or order issued by the executive branch of

any State or local government, except in presentation to the

executive branch of any State or local government itself.”

143

The Comptroller General has construed the “pending legislation”

provisions as applying primarily to indirect or “grassroots” lobbying

and not to direct contact with Members of Congress.

144

In other

words, the statute prohibits appeals to members of the public

suggesting that they in turn contact their elected representatives to

indicate support of or opposition to pending legislation, thereby

expressly or implicitly urging the legislators to vote in a particular

manner. GAO and the Department of Justice have interpreted the

traditional prohibition (“publicity or propaganda purposes designed

to support or defeat pending legislation”) to require an overt appeal

to the public.

145

B-270875, July 5, 1996.

If a given policy or activity is affected by pending or proposed

legislation, any discussion of that policy or activity by officials will

143

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

Agencies Appropriations Act, 2016, Pub. L. No. 114-113, div. H, title V, § 503(a),

129 Stat. 2242, 2648 (Dec. 18, 2015).

144

Therefore, where an e-mail encouraging the recipient to contact Members of

Congress regarding an interpretive rule change of the Consumer Product Safety

Commission did not concern pending legislation, the subject e-mail did not constitute

grassroots lobbying as prohibited by an appropriations restriction. B-322882, Nov. 8,

2012.

145

Some early interpretations of “pending legislation” provisions were couched in terms

of whether the expenditure was extraordinary in nature or presented circumstances

leaving no doubt as to the prohibited nature of the expenditure. See, e.g., B-147578,

Nov. 8, 1962 (White House Regional Conferences); B-150038, Nov. 2, 1962 (Department

of Agriculture press release); B-148206, Mar. 20, 1962 (radio and television

announcements by Commerce Department supporting foreign trade legislation).

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necessarily refer to such legislation, either explicitly or by

implication, and will presumably be either in support of or in

opposition to it. Thus, an interpretation of a “pending legislation”

statute that strictly prohibited expenditures of public funds for

dissemination of views on pending legislation would preclude

virtually any comment by officials on agency or administration

policy or activities. Absent a compelling indication of congressional

intent, GAO has been unwilling to adopt this approach. See, e.g.,

B-270875, July 5, 1996.

GAO concluded in a 1984 study that further statutory restraints on

executive branch lobbying did not appear necessary. GAO did

recommend, however, that the restriction on “grassroots” lobbying

be enacted into permanent law. GAO, No Strong Indication That

Restrictions on Executive Branch Lobbying Should Be Expanded,

GAO/GGD-84-46 (Washington, D.C.: Mar. 20, 1984). See also

B-206391, B-217896, Oct. 30, 1985; B-206391, July 2, 1982; GAO,

H.R. 3078, The Federal Agency Anti-Lobbying Act,

GAO/T-OGC-96-18 (Washington, D.C.: May 15, 1996). (Each of

these documents comments on proposed legislation that was not

enacted.)

Before proceeding to the specific cases, certain threshold concerns

should be noted. The discussion that follows interprets the “pending

legislation” provisions in existence at that time. The particular

agencies involved may or may not still be subject to the same

restriction. Or a different version of the restriction may apply that

could produce different results. As we have noted, government-

wide restrictions have gone in and out of congressional favor.

Therefore it is critical to check the current appropriations acts to

determine what restrictions are applicable.

The appropriation act restrictions, unless specified to the contrary,

require pending legislation. Of course, this would include

appropriation bills and the President’s budget submission.

B-178648, Sept. 21, 1973.

Finally, unless a particular provision specifically includes lobbying

at the state level, the legislation must be pending before the U.S.

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Congress, not a state legislature. E.g., B-193545, Mar. 13, 1979;

B-193545, Jan. 25, 1979.

provisions barring grassroots lobbying

As discussed, a violation of the grassroots lobbying or “pending

legislation” appropriations provisions requires a clear appeal by an

agency to the public to contact Congress in support of, or in

opposition to, pending legislation.

A bill was introduced in the 86

Congress to prohibit the Post Office

Department from transporting first class mail by aircraft on a space-

available basis. The Post Office Department opposed the bill and

embarked on a campaign to defeat it. Among the tactics used were

letters to postal patrons and “canned” editorials asking the public to

contact Members of Congress to urge opposition to the bill. GAO

found that this activity violated the anti-lobbying statute. B-116331,

May 29, 1961.

Another violation resulted from the use of a kit entitled “Battle of the

Budget 1973.” The White House at the time was opposed to 15 bills

then pending in Congress that it felt would exceed the

Administration’s 1974 budget. White House staff writers assembled

a package of materials that were distributed to executive branch

officials in an effort to defeat the bills. The kit included statements

that people should be urged to write their representatives in

Congress to support the administration’s opposition to the 15 bills.

This, the Comptroller General held, violated the grassroots lobbying

provision. B-178448, Apr. 30, 1973.

Administration budget battles with Congress produced another

violation in B-178648, Sept. 21, 1973. This case involved

prerecorded news releases provided to radio stations by executive

branch agencies. GAO reviewed over 1,000 of these releases and

while most were proper, GAO found several that violated the law.

Examples of the violations are as follows:

• “If the President’s position of resisting higher taxes resulting

from big spending is to be upheld, the people need to be heard.

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The voice of America can reach Capitol Hill and can be a

positive persuader.”

• “If we are going to have economic stability and fiscal

responsibility, we must all support the President’s budget

program—and let Congress know we support it.”

The next two examples illustrate important points:

“If we don’t slow down Federal

spending . . . we face a 15-percent

increase in income taxes and more

inflation. I don’t think any American

wants this. But, in the final analysis the

responsibility rests with the voters and

the taxpayers. They must let the

Congress know how they feel on this

critical issue.”

Here, the listener is urged merely to make his or her “views” known

to Congress. This is nevertheless a violation if the context makes it

clear, as in the example, what those “views” are supposed to be:

“All those unneeded new bills headed

for the President’s desk from

Congress—all the unworthy Federal

programs and projects—are guns

pointed at the heads of American

taxpayers. . . . Right now, Congress is

getting all kinds of letters from special

interest groups. Those groups are

pleading their own selfish causes. I think

Congress should hear from all

Americans on what the President is

trying to do whatever their views may

be. And I say that regardless of whether

those who contact their Congressmen

happen to be in agreement with me.”

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The purported disclaimer in the last sentence does not cure the

obvious violation.

But see B-239856, Apr. 29, 1991, discussed further below,

involving a National Endowment for the Arts regional

representative’s presentation at a conference. During a question-

and-answer segment, where attendees asked how they may

support the NEA, the representative responded that they may

contact their elected officials. However, the speaker provided a

disclaimer statement that factored into our finding that the

statements made did not constitute prohibited lobbying. Despite the

fact that the official’s statement on its face was an exhortation for

her audience to contact Members of Congress, we concluded that

her comment was a good faith response to the audience member’s

question and was more of a “civics lesson.” Furthermore, audience

members recalled that the official made explicit “disclaimers” to the

effect that she could not advise audience members to take

particular actions in support of her agency.

Another violation occurred in B-128938, July 12, 1976. The

Environmental Protection Agency, as part of an authorized public

information program, contracted with a nonprofit organization to

publish a newsletter in California entitled “Water Quality

Awareness.” One of the articles discussed a pending bill that

environmentalists opposed. The article went on to name the

California representatives on the House committee that was

considering the bill and exhorted readers to “[c]ontact your

representatives and make sure they are aware of your feelings

concerning this important legislation.” As with some of the violations

involving prerecorded news releases provided to radio stations by

federal agencies in B-178648, the context of the article left no doubt

what those “feelings” were supposed to be. The fact that EPA did

not publish the article directly did not matter since EPA contracted

for its publication and an agency has a duty to ensure that its

appropriations are not used to violate a statutory prohibition. See

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also B-202975(1), Nov. 3, 1981;

146

GAO, Alleged Lobbying

Activities: Office for Substance Abuse Prevention, GAO/HRD-93-

100 (Washington, D.C.: May 4, 1993) (grantee violated statutory

restriction concerning the use of appropriations for the salary or

expenses of grant recipients by using grant funds to encourage

grassroots lobbying).

147

As technology develops and agencies adjust their communication

strategies, the opportunity to violate the grassroots lobbying

restriction also increases. This increased opportunity adds a new

layer of significance to an agency’s responsibility to ensure its

appropriations are only used for authorized purposes. In B-326944,

Dec. 14, 2015, the Environmental Protection Agency (EPA)’s

inclusion of hyperlinks to the websites of environmental action

groups within an agency blog post constituted a clear appeal to the

public to contact Congress in opposition to pending legislation, in

violation of the grassroots lobbying restriction. EPA’s blog post,

entitled “Tell Us Why #CleanWaterRules,” initiated a social media

campaign designed to support finalization of EPA’s rule defining

“Waters of the United States” under the Clean Water Act. In the

blog post, EPA’s Communications Director included hyperlinks to a

Surfrider Foundation blog post and a Natural Resources Defense

Council webpage. Each page led to action prompts that appealed

to readers to contact Congress in support of the rule and in

opposition to measures that would undermine the rule, while

146

In this opinion, discussed further in section D. 1. a. (4) , we found that the Urban Mass

Transportation Administration violated the government-wide appropriations act restriction

against grassroots lobbying when a grant fund recipient published a newsletter urging

readers to contact Congress in support of continued funding for a project. We emphasized

that agencies are responsible for ensuring that federal funds made available to grantees

are not used in violation of the grassroots lobbying prohibition, and also cited certain grant

regulations in effect at the time for the proposition that grantee expenditures prohibited by

federal laws are not allowable program costs. Since this opinion was issued, the Office of

Management and Budget has developed the “common rule” system for grant regulations,

and Congress has enacted the Byrd Amendment, which applies specifically to lobbying by

recipients of federal grant funds. Given these developments, it is not certain that we would

apply the reasoning employed in B-202975(1) to a similar situation today.

147

For a detailed discussion of the prohibition against the use of grant funds for lobbying

activities, see section D. 1. a. (4) .

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several bills that would explicitly prevent its implementation were

pending.

The fact that the content of the linked webpages did not belong to

EPA did not excuse the agency from responsibility for its own

message, which included the message conveyed by the expressive

act of facilitating access to these webpages using an agency blog

post. EPA’s message was entirely within EPA’s control. EPA chose

to link to external websites belonging to environmental action

groups to support statements made in its blog post, and in doing

so, associated itself with the content reached by clicking those

hyperlinks.

148

As with B-128938 and B-178648, context was

important in assessing EPA’s actions. Every hyperlink by an

agency, of course, does not constitute an endorsement of the

linked webpage. However, here, the timing and purpose of the blog

post paired with the content of the external websites precluded a

good faith characterization of the hyperlinks as mere citations.

Developments such as the E-Government Act of 2002, Pub. L. No.

107-347, 116 Stat. 2899 (Dec. 17, 2002), and the 2009 Open

Government Initiative emphasize the utility and necessity of

leveraging technology to serve and engage the public. But, as

always, agencies must balance efforts to enhance public

participation with the bright line rule against grassroots lobbying,

when such a restriction is in effect, rather than throw caution to the

wind. In a November 2016 memorandum, the Office of

Management and Budget (OMB) directed executive agencies to

ensure that links on their websites to external information “provide a

suitable level of information quality as implied by the agency linking

to or referencing it in their official website.” (Emphasis added.) The

memo stated that websites must “clearly state that the content of

148

The concept that including a hyperlink forms an expressive act and conveys a

message that may be informed by the linked content finds support in a line of federal court

cases under the government speech doctrine. See Pleasant Grove City, Utah v.

Summum, 555 U.S. 460, 473, 476 (2009); Sutliffe v. Epping School Dist., 584 F. 3d 314,

331-33 (1st Cir. 2009); Page v. Lexington County School Dist. One, 531 F.3d 275, 278

(4th Cir. 2008).

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external links to non-Federal agency websites is not endorsed by

the Federal government.”

149

OMB Memorandum, Policies for

Federal Agency Public Websites and Digital Services, M-17-06

(Nov. 18, 2016).

In B-285298, May 22, 2000, the White House engaged in extensive

outreach efforts to business, labor, environmental, and other

groups in order to achieve enactment of legislation establishing

permanent normal trade relations for China. After reviewing

hundreds of documents, we identified one e-mail communication

that constituted grassroots lobbying. The e-mail, sent by an

Agriculture employee serving on the interagency working group

established by the White House, went to two major farmers’

organizations. The e-mail forwarded an attached message from a

Commerce employee (also serving on the working group) reporting

that a certain Member of the House of Representatives had not

heard from any of the farmers in his district on the issue of trade

with China. The forwarding e-mail stated: “We need to work on this

ASAP. [The Member] needs to hear from the farmers in his district.”

The fact that the House Member was already planning on

supporting the legislation did not impact our conclusion that the

149

In OMB’s “Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and

Integrity of Information Disseminated by Federal Agencies,” the term “information” is

defined to specifically exclude “hyperlinks to information that others disseminate” and

“opinions, where the agency’s presentation makes it clear that what is being offered is

someone’s opinion rather than fact or the agency’s views.” 67 Fed. Reg. 36, 8460

(Feb. 22, 2002). Noting this exclusion, OMB stated in its memorandum, Policies for

Federal Agency Websites, M-04-05 (Dec. 17, 2004), that it “does not remove agency

responsibility to exercise due diligence when determining whether to link externally,” and

further, that “Agency links to commercial organizations or interest groups present special

challenges with respect to agency objectivity and thus must be used judiciously.” OMB

rescinded and replaced M-05-04 on November 8, 2016, with M-17-06.

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e-mail on its face directly appealed to large farm organizations to

contact a Member of Congress to support the legislation.

150

Two other cases in which violations were found are B-212235,

Nov. 17, 1983, and GAO, Improper Lobbying Activities by the

Department of Defense on the Proposed Procurement of the C-5B

Aircraft, GAO/AFMD-82-123 (Washington, D.C.: Sept. 29, 1982),

both of which are summarized in our previous discussion of

18 U.S.C. § 1913.

It is not necessary for a statement to explicitly refer to the particular

piece of pending legislation. See B-326944 (while specific

legislation was not mentioned in EPA’s blog post or the hyperlinked

webpages, several measures that would explicitly prevent

implementation of the rule were pending, and a Member of

Congress contacted via the action forms reached through the

hyperlinked webpages could fairly perceive the contact as

encouragement to vote against such pending legislation). In

another decision, a lobbying campaign using appropriated funds

urged the public to write to Members of Congress to support a

strong merchant marine at a time when cargo preference legislation

was pending violated the law. B-192746-O.M., Mar. 7, 1979. The

fact that an article did not refer to specific pending legislation was,

however, a factor in our determination that the agency did not

engage in prohibited grass roots lobbying in GAO/HRD-93-100.

(d) Cases with no violation of appropriations act

provisions barring grassroots lobbying

As indicated above, GAO has consistently taken the position that

the “pending legislation” statute does not prohibit direct

communication, solicited or unsolicited, between agency officials

150

See also B-325248, Sept. 9, 2014 (e-mail encouraging over 1000 recipients to contact

17 named senators to urge them to take specific actions in support of the then-pending,

Senate version of the Transportation, Housing, and related agencies appropriations bill

constituted a direct appeal to the public in clear violation of the grassroots lobbying

prohibition).

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and Members of Congress. This is true even where the contact is

an obvious attempt to influence legislation. Thus, GAO concluded

that the “pending legislation” statute was not violated in the

following cases:

• Contacts with Members of Congress by federal judges and

legislative liaison activities by the Judicial Conference of the

United States. 63 Comp. Gen. 624 (1984).

• Visits to Members of Congress by National War College

students as part of a seminar on the legislative process.

B-209584, Jan. 11, 1983.

• Director of the Office of Management and Budget’s letter to all

Members of the House of Representatives urging opposition to

a disapproval resolution on a plan concerning reorganization of

the Civil Service. B-192658, Sept. 1, 1978.

See also B-200250, Nov. 18, 1980 (agency sent position paper to

Members of Congress opposing particular piece of pending

legislation); B-164497(5), Mar. 10, 1977 (entertainment in form of

dinners for Members of Congress); B-114823, Dec. 23, 1974

(personal visits to Capitol Hill by agency officials during floor debate

on authorizing legislation, at request of congressional proponents of

the legislation); B-164786, Nov. 4, 1969 (cruises with Members of

Congress on presidential yacht, paid for from entertainment

appropriation); B-93353, Sept. 28, 1962 (telegram sent by agency

head to all Members of the House of Representatives).

A government contractor lobbying with its own corporate (i.e.,

nonfederal) funds would generally not violate the appropriation act

restriction. However, applicable contract cost principles may restrict

or prohibit reimbursement. See, e.g., Federal Acquisition

Regulation, 48 C.F.R. § 31.205-22; B-218952, Aug. 21, 1985; GAO,

Nuclear Test Lobbying: DOE Regulations for Contractors Need

Reevaluation, GAO/RCED-88-25BR (Washington, D.C.: Oct. 9,

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1987). In addition, there may be legislation applicable to contractor

lobbying.

151

Also as indicated above, an agency will not violate the pending

legislation statute by disseminating material to the public that is

essentially expository in nature. Even if the material is promotional,

there is no violation, at least of the pending legislation statute, as

long as it is not a clear appeal to members of the public to contact

their elected representatives.

152

Again, several cases will illustrate.

For example, the Department of Transportation (Transportation) set

up displays on U.S. Capitol grounds of passenger cars equipped

with passive restraint systems (airbags). Transportation employees

at the displays distributed brochures, explained the devices, and

answered questions from Members of Congress and the public. All

this was done while legislation was pending to prohibit

implementation and enforcement of the airbag standards. While,

considering the timing and location of the displays, one would have

to be pretty naive not to see this as an obvious lobbying ploy, that

did not make it illegal since there was no evidence that

Transportation urged members of the public to contact their elected

representatives. Thus, since it was not illegal for Transportation to

advocate the use of airbags or to communicate with Congress

directly, there was no violation. B-139052, Apr. 29, 1980. The

151

One of the previously cited “pending legislation” statutes—the Labor-Health & Human

Services provision (n. 143)—has an additional subsection, not included in our quotation,

barring the use of appropriated funds to pay the salary or expenses of any grant or

contract recipient, or agent of such recipient, related to any activity designed to influence

pending legislation. In addition, 31 U.S.C. § 1352, enacted in October 1989 and

summarized later in our discussion of lobbying with grant funds, includes government-

wide restrictions on certain lobbying activities by contractors.

152

The fact patterns of some of the examples that follow may have yielded violations of

another restriction on legislative lobbying, had the provision applied. The next section will

discuss this restriction, typically included in the Department of Interior appropriations act,

which prohibits activity that falls short of an overt appeal to the public to contact Members

of Congress.

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apparent intent alone is not enough; it must be translated into

action.

The Office for Substance Abuse Prevention (OSAP) published

“Prevention Pipeline” as part of its statutory duties to act as a

clearinghouse for drug and alcohol abuse material and to educate

the public. OSAP included in the publication items submitted to it

with the following disclaimer: “Publication of information and

products does not imply endorsement by OSAP or the Federal

Government.” One item that was submitted to and published by

OSAP informed readers of an “activist’s guide” for communities

developed by an organization that lobbied for legislation requiring

warning labels on alcoholic beverages. While the item went on to

describe the guide as helping people with writing to U.S. Senators

to urge support of legislation, it did not make any reference to the

specific legislation that was pending before Congress at the time,

nor did it expressly endorse the idea of writing to Members of

Congress in support of legislation. GAO, Alleged Lobbying

Activities: Office for Substance Abuse Prevention,

GAO/HRD-93-100 (Washington, D.C.: May 4, 1993).

In another case, the Social Security Administration (SSA), in its

annual mailing of employment benefit reports to American workers,

included material concerning the Social Security system’s potential

financial problems and legislative initiatives to reform the Social

Security program. Since none of the material called on the public to

contact Congress and urge it to support SSA’s position on this or

any other matter, GAO determined that there was no violation of

the grassroots lobbying prohibition. GAO rejected the suggestion

that the standard ought to be an assessment of the agency’s intent

and whether the agency’s message would be likely to influence the

public to contact Congress. The standard requiring evidence of a

clear appeal by the agency to the public to contact congressional

members to urge them to support the agency’s position is based

upon the language and legislative history of the grassroots lobbying

provisions. Moreover, the standard is consistent with a proper

respect for the right and responsibility of federal agencies to

communicate with the public and Congress regarding policies and

activities. GAO stated:

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“We have no reason to think that

Congress meant to preclude

government officials from saying

anything that might possibly cause the

public to think about or take positions on

the issues of the day and, as a result,

contact their elected representatives. To

the contrary, we see the free and open

exchange of ideas and views as central

to our political system and, accordingly,

remain reluctant to construe these laws

in such a way that would unnecessarily

or excessively constrain agency

communications with the public or

Congress.”

B-304715, Apr. 27, 2005. See also B-319075, Apr. 23, 2010

(GAO’s review of the Department of Health and Human Service’s

HealthReform.gov Web site, State Your Support Web page, and

materials regarding subsequent contacts with Web users found no

explicit or direct appeal to the public to contact Members of

Congress in support of pending legislation). Compare B-326944,

Dec. 14, 2015 (EPA hyperlinks constitute clear appeal).

Similarly, the statute was not violated by the following actions:

• Speech by the Secretary of the Air Force urging defense

contractors to direct their advertising towards convincing the

public of the need for a strong defense rather than promoting

particular weapon systems manufactured by their companies.

Speech did not refer to legislation nor urge anyone to contact

Congress. B-216239, Jan. 22, 1985.

• Bumper stickers purchased by Department of Transportation

and affixed to government vehicles urging compliance with

55 mph speed limit. B-212252, July 15, 1983.

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• Various trips by the District of Columbia Police Chief during

which he made speeches supporting the administration’s law

enforcement policy. B-118638, Aug. 2, 1974.

• Statements by cabinet members, distributed to news media,

which discussed pending legislation but were limited to an

exposition of the administration’s views. B-178648, Dec. 27,

1973.

• Mailings by the National Credit Union Administration to federally

chartered credit unions consisting of reprints from the

Congressional Record giving only one side of a controversial

legislative issue. B-139458, Jan. 26, 1972.

• Statements by Deputy Assistant Secretary for the Mining Safety

and Health Administration (MSHA) before mining industry

executives concerning agency’s opposition to legislative

proposal to merge MSHA with OSHA did not include urging

anyone to contact Members of Congress. GAO, MSHA

Lobbying, GAO/HEHS-96-9R (Washington, D.C.: Oct. 19,

1995).

• Remarks made by Secretary of Education in meetings with

members of education organizations and presidents of

education associations included factual presentation of budget

proposals relating to education but not requests for lobbying

assistance. GAO, Department Of Education: Compliance With

the Federal Advisory Committee Act and Lobbying Restrictions,

GAO/GGD/OGC-00-18 (Washington, D.C.: Dec. 30, 1999).

• Housing and Urban Development report and the letter

transmitting report to agency constituencies criticized proposed

budget cuts as having “devastating impact on families and

communities nationwide” but did not contain any express

appeals that members of the public contact their congressional

representatives. B-284226.2, Aug. 17, 2000.

See also B-270875, July 5, 1996 (Labor Department publications

entitled “America’s Job Fax,” supporting President’s employment

legislation);

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(2) Provision of assistance to private lobbying

groups

Another type of “lobbying” activity GAO has found improper is the

use of appropriated funds to provide assistance to private lobbying

groups. This is largely an outgrowth of the concept that an agency

should not be able to do indirectly that which it cannot do directly.

In 1977, the Office of the Special Assistant to the President for

Consumer Affairs and the Office of Consumer Affairs within the

then Department of Health, Education and Welfare (HEW) mounted

an active campaign to obtain passage of legislation to establish a

Consumer Protection Agency. As part of the campaign, the Special

Assistant had instructed the Office of Consumer Affairs to informally

clear its efforts with certain “public interest lobby members.” In

addition, two of the consumer lobby groups asked HEW to provide

material illustrating situations where a Consumer Protection Agency

could have had an impact had it been in existence. Before

implementing the campaign, however, the Office of Consumer

Affairs sought advice from the HEW General Counsel, who advised

against certain elements of the plan, including the two items

mentioned.

Pursuant to the HEW General Counsel’s advice, the more

egregious elements of the plan were not carried out, and the

Comptroller General concluded that the activities ultimately carried

out violated no laws. However, the Comptroller General pointed out

that the grassroots lobbying statute would prohibit the use of

appropriated funds to develop propaganda material to be given to

private lobbying organizations to be used in their efforts to lobby

Congress. An important distinction must be made. There would be

nothing wrong with servicing requests for information from outside

groups, lobbyists included, by providing such items as stock

education materials or position papers from agency files, since this

material would presumably be available in any event under the

Freedom of Information Act. The improper use of appropriated

funds arises when an agency assigns personnel or otherwise

provides administrative support to prepare material not otherwise in

existence to be given to a private lobbying organization. B-129874,

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Sept. 11, 1978. See also 66 Comp. Gen. 707 (1987), drawing the

same distinction in the context of 18 U.S.C. § 1913.

In another example, the Maritime Administration (“MarAd”) had

become intimately involved with the National Maritime Council, a

trade association of ship operators and builders. MarAd staff

performed the administrative functions of the Council at MarAd

headquarters and regional offices. In 1977, at a time when cargo

preference legislation was pending in Congress, the Council, with

MarAd’s active assistance, undertook an extensive advertising

campaign in national magazines and on television advocating a

strong U.S. merchant marine. Some of the advertisements

encouraged members of the public to contact their elected

representatives to urge them to support a strong merchant fleet.

Reviewing the situation, GAO concluded that MarAd had violated

the grassroots lobbying statute by expending appropriated funds to

provide administrative support to the Council in the form of staff

time, supplies, and facilities, when it knew the Council was

attempting to influence legislation pending before Congress. See

B-192746-O.M., Mar. 7, 1979; GAO, The Maritime Administration

And The National Maritime Council—Was Their Relationship

Appropriate? CED-79-91 (Washington, D.C.: May 18, 1979).

In B-133332, Mar. 28, 1977, the Smithsonian Institution had

prepared an exhibit entitled “The Tallgrass Prairie: An American

Landscape” and displayed it at a premiere showing for the benefit

of the Tallgrass Prairie Foundation, a nonprofit organization. While

appropriated funds were used to prepare the exhibit, none were

used for the premiere showing itself since, under the Smithsonian’s

traveling exhibit program, administrative costs are paid by the host

organization. The problem arose because the Tallgrass Prairie

Foundation shared a large part of its membership with a lobbying

organization known as “Save the Tallgrass Prairie, Inc.” In addition,

a leading member of both organizations had actually created the

exhibit under contract with the Smithsonian. However, the exhibit

itself was noncontroversial and the Foundation had an independent

legal existence. Thus, since no lobbying took place at the premiere

showing, and since any lobbying by “Save the Tallgrass” or by the

exhibit’s creator could not be imputed to the Foundation or to the

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Smithsonian, GAO concluded that the Smithsonian had not used its

appropriations for any improper indirect lobbying.

153

(3) Promotion of legislative proposals: Interior

appropriations act restriction

Since 1977, the following restriction has been included in every

Interior Department appropriations act:

“No part of any appropriation contained

in this Act shall be available for any

activity or the publication or distribution

of literature that in any way tends to

promote public support or opposition to

any legislative proposal on which

Congressional action is not complete

other than to communicate to Members

of Congress as described in 18 U.S.C.

1913.”

154

This prohibition applies only to appropriations funded under the

Interior, Environment, and Related Agencies appropriations act,

which includes appropriations for various agencies including the

Department of the Interior and the Environmental Protection

Agency. The committee report accompanying what ultimately

became the Interior restriction explained the Committee’s concern

over “certain public information activities being promoted by [some

agencies] that tend to promote pending legislative proposals to set

aside certain areas in Alaska for national parks, wildlife refuges,

153

See also GAO, Department Of Education: Compliance With the Federal Advisory

Committee Act and Lobbying Restrictions, GAO/GGD/OGC-00-18 (Washington, D.C.:

Dec. 30, 1999), for a discussion of another instance in which GAO found no evidence that

an agency was involved in providing improper assistance to lobbying groups.

154

Consolidated Appropriations Act, 2017, Pub. L. No. 115-31, div. G, title IV, § 401,

___ Stat. ___ (May 5, 2017). In various iterations of the appropriations language where

reference to section 1913 was eliminated, GAO concluded that its deletion had no effect

on the interpretation of the restriction. B-262234, Dec. 21, 1995.

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national forest and other withdrawals.” The Committee referred to

the colorful brochures printed and actively distributed by these

agencies, extolling the benefits of such proposals, which as a result

tended to promote certain legislative goals of these agencies. The

Committee considered these activities to be, at a minimum,

violations of the intent of 18 U.S.C. § 1913. At the same time the

Committee cautioned that the language “should not be construed

as an impediment on the agencies’ ability to respond to public

information inquiries.”

155

The Interior restriction has been interpreted to prohibit both

grassroots lobbying activity, proscribed by both 18 U.S.C. § 1913

and the pending legislation restriction, and activity that falls short of

such activity. In describing the prohibited activity as that which “in

any way tends to promote public support or opposition” (emphasis

added) to legislation, the restriction is designed to cover particularly

egregious examples of lobbying even though the material or activity

stops short of explicitly soliciting a member of the public to contact

his or her member of Congress in support or opposition of pending

legislation. See 59 Comp. Gen. 115 (1979); B-284226.2, Aug. 17,

2000.

We have found a number of instances where agencies covered by

the Interior provision avoided grassroots lobbying but went beyond

appropriate information dissemination and violated the Interior

restriction:

• A mass mailing by the National Endowment for the Arts (NEA)

of an information package supporting the Livable Cities

Program implicitly advocated support of the appropriation for

that NEA program. Although the literature did not directly exhort

readers to lobby Congress, its tenor was clearly designed to

promote public support for the program and the mailing was

timed to reach the public just before House reconsideration of a

prior refusal to fund the program. 59 Comp. Gen. 115 (1979).

155

S. Rep. No. 95-276, at 4–5 (1977).

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• Remarks made by a Fish and Wildlife Service employee at a

press conference called to generate opposition to a pending

amendment to the Clean Water Act and timed to coincide with

the congressional committee’s active consideration, tended to

promote public opposition to the legislative proposal. While the

official did not urge members of the public to contact their

Members of Congress, he stated, “we cannot afford to roll back

protection” for wetlands, which he believed the legislation would

do. B-262234, Dec. 21, 1995.

• Forest Service officials waged an aggressive campaign to

promote public support for a budget proposal seeking to change

the way certain Forest Service payments to states are

calculated. Briefing packages, used by officials in talking to

local public officials likely to be concerned about funding, were

highly supportive of the proposal, emphasizing the benefits of

re-forming Forest Service payments to states. Based on the

response of some local officials, who indicated they would

contact their congressional representatives, the briefing efforts

were clearly successful at promoting support for the payment

proposal. B-281637, May 14, 1999.

156

In analyzing whether a violation has occurred, a variety of factors

must be considered, including the timing, setting, audience,

content, and the reasonably anticipated effect of the questioned

activity. See GAO, H.R. 3078, The Federal Agency Anti-Lobbying

Act, GAO/T-OGC-96-18 (May 15, 1996).

157

In this restriction, unlike others, intent can also be an important

factor to consider when presented with a particularly close case. As

we have noted, “there is a very thin line between the provision of

legitimate information in response to public inquiries and the

156

See also GAO, Alleged Unauthorized Use of Appropriated Moneys by Interior

Employees, CED-80-128 (Washington, D.C.: Aug. 13, 1980).

157

This testimony concerned proposed government-wide legislation modeled on the

Interior restriction. The proposed legislation did not pass.

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provision of information in response to the same requests which

‘tends to promote public support or opposition’ to pending

legislative proposals.” 59 Comp. Gen. 115 (1979). Navigating this

thin line may be difficult for agencies, which cannot always prevent

or even anticipate public response.

In B-239856, Apr. 29, 1991, GAO relied on the demonstrated intent

of the National Endowment for the Arts (NEA) officials engaging in

the questioned activities, in concluding that the agency had not

violated the Interior restriction. One aspect of this decision involved

an NEA official’s remarks at an arts conference. In response to a

question from the audience concerning what the audience could do

to support NEA, the official responded that they could contact their

congressional representatives. GAO’s investigation concluded that

there was no intent to promote. The official’s response was

incidental to her presentation and not part of any plan to generate

action on the part of her audience. The official’s answer was viewed

as more of a civics lesson, informational in nature, rather than an

exhortation to contact Congress.

(4) Lobbying with grant funds: the Byrd

Amendment

The use of grant funds by a federal grantee for lobbying presents

somewhat more complicated issues. On the one hand, there is the

principle, noted in various contexts throughout this publication, that

an agency should not be able to do indirectly what it cannot do

directly. Thus, if an agency cannot make a direct expenditure of

appropriated funds for certain types of lobbying, it should not be

able to circumvent this restriction by the simple device of passing

the funds through to a grantee. Yet on the other hand, there is the

seemingly countervailing rule that where a grant is made for an

authorized grant purpose, grant funds in the hands of the grantee

largely lose their identity as federal funds and are no longer subject

to many of the restrictions on the direct expenditure of

appropriations. See B-289801, Dec. 30, 2002 (holding that when

the Department of Education makes grant awards during the period

of availability of the funds to be used, Education’s grant awards are

in compliance with the bona fide needs rule even when

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appropriations available for only one fiscal year are used to fund

multiyear grants).

In some instances, Congress has dealt with the problem by

legislation. For example, legislation, commonly known as the Byrd

Amendment and codified at 31 U.S.C. § 1352, imposes limited

government-wide restrictions. Section 1352(a)(1) provides:

“None of the funds appropriated by any

Act may be expended by the recipient of

a Federal contract, grant, loan, or

cooperative agreement to pay any

person for influencing or attempting to

influence an officer or employee of any

agency, a Member of Congress, an

officer or employee of Congress, or an

employee of a Member of Congress in

connection with any Federal action

described in paragraph (2) of this

subsection.”

The actions identified in paragraph (2) are the awarding of any

federal contract; the making of any federal grant or loan; the

entering into of any cooperative agreement; and the extension,

continuation, renewal, amendment, or modification of any federal

contract, grant, loan, or cooperative agreement. The law includes

detailed disclosure requirements and civil penalties. Section

1352(d)(1)(c) stresses that section 1352 should not be construed

as permitting any expenditure prohibited by any other provision of

law. Thus, section 1352 supplements other anti-lobbying statutes; it

does not supersede them.

Section 1352(b)(6) directs the Office of Management and Budget

(OMB) to issue guidance for agency implementation. OMB

published interim and final guidance entitled “Governmentwide

Guidance for New Restrictions on Lobbying” on December 20,

1989 (54 Fed. Reg. 52306), supplemented on June 15, 1990

(55 Fed. Reg. 24540), and amended on January 15, 1992 (57 Fed.

Reg. 1772) and January 19, 1996 (61 Fed. Reg. 1412). OMB

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maintains a list of agency implementing regulations. OMB, Federal

Agency Rule on Lobbying, available at

www.whitehouse.gov/omb/grants_chart (last visited Aug. 11, 2017).

For contracts, see subpart 3.8 of the Federal Acquisition

Regulations.

GAO has most often addressed the application of the Byrd

Amendment to federal contractors in the context of bid protests.

See 71 Comp. Gen. 281 (1992) (communication between bidder’s

“regularly employed” employee and government engineer was not

an attempt to influence procuring agency in connection with a

federal contract and therefore did not violate the Byrd Amendment);

71 Comp. Gen. 81 (1991) (Byrd Amendment does not require

disclosure of the expenditure of other than appropriated funds to

pay reasonable compensation to regularly employed employees);

69 Comp. Gen. 604 (1990) (contractor lobbying activity was not

directed at award of current contract and therefore was not required

to be disclosed under the Byrd Amendment); B-246304.8,

B-246304.9, May 4, 1993 (bidder’s lobbying to have legislation

changed, regardless of how funded, did not violate the Byrd

Amendment).

GAO has had one occasion to consider the Byrd Amendment’s

application to federal grant recipients in a case involving the Denali

Commission. B-317821, June 30, 2009. Some Denali

Commissioners are also officials of organizations who receive

federal grants from the agency or whose members receive federal

grants. GAO determined that the Byrd Amendment prohibits

Commissioners and their personal staff, when acting in their role as

grantees, from using grant funds to lobby Members of Congress

and their staff in connection with the making of a grant.

158

Id.

158

The decision in B-317821 notes, however, that the Byrd Amendment does not apply

when Commissioners are acting in their role as commissioners. In that instance,

anti-lobbying restrictions may apply. For discussion of the anti-lobbying restrictions, see

section D. 1. a. (1) (a).

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More recently, the Lobbying Disclosure Act of 1995,

159

as amended,

2 U.S.C. §§ 1601–1614, provides that organizations described in

section 501(c)(4) of the Internal Revenue Code

160

which engage in

lobbying activities are not eligible to receive federal grants. 2 U.S.C.

§ 1611. The Act, at 2 U.S.C. § 1602(7), defines “lobbying activities”

to mean:

“[L]obbying contacts and efforts in

support of such contacts, including

preparation and planning activities,

research and other background work

that is intended, at the time it is

performed, for use in contacts, and

coordination with the lobbying activities

of others.”

The Act, at 2 U.S.C. § 1602(8), further defines “lobbying contact” to

mean certain communications with covered federal officials. As

such, the Act does not prevent “grassroots” lobbying activities by

federal grants recipients as that term is discussed in section

D.1.a(1) above.

161

Another example is the legislation governing the Legal Services

Corporation. Under the Legal Services Corporation Act, recipients

of funds, both contractors and grantees, may not use the funds

directly or indirectly to attempt to influence the passage or defeat of

legislation. The prohibition covers legislation at the state and local

level as well as federal legislation. The statute permits three

159

Pub. L. No. 104-65, 109 Stat. 691 (Dec. 19, 1995). For a discussion of the

constitutionality of the Byrd Amendment in the grant context after passage of Public

Law 104-65, see United States v. National Training & Information Center, 532 F. Supp. 2d

946 (N.D. Ill. 2007).

160

This includes certain civic leagues, social welfare organizations, and local

associations of employees. 26 U.S.C. § 501(c)(4).

161

See also GAO, Federal Lobbying: Differences in Lobbying Definitions and Their

Impact, GAO/GGD-99-38 (Washington, D.C.: Apr. 15, 1999) for further discussion of the

Act.

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exceptions: (1) recipients may testify before and otherwise

communicate with legislative bodies upon request, (2) they may

initiate contact with legislative bodies to express the views of the

Corporation on legislation directly affecting the Corporation, and (3)

they may engage in certain otherwise prohibited lobbying activities

when necessary to the proper representation of an eligible client.

42 U.S.C. § 2996f(a)(5).

162

For a general discussion of these

provisions, see B-129874-O.M., Oct. 30, 1978. See also Regional

Management Corp. v. Legal Services Corp., 186 F.3d 457 (4

Cir.

1999) (generally discussing 42 U.S.C. § 2996f(a)(5) as part of

finding that there is no private right of action to challenge the Legal

Services Corporation’s decision that its grantee did not violate anti-

lobbying provision); B-202569, Apr. 27, 1981.

Three 1981 cases illustrate the application of the Legal Services

Corporation statute. In one case, the Board of Aldermen for the City

of Nashua, New Hampshire, was considering a resolution to

authorize a “food stamp workfare” demonstration project. An

attorney employed by the New Hampshire Legal Assistance group,

a Legal Services Corporation grantee, wrote to members of the

Board urging them to reject the resolution. Since the letter was not

related to the representation of any specific client or group of clients

but rather had been self-initiated by the attorney, the use of federal

funds to prepare and distribute the letter was illegal. B-201928,

Mar. 5, 1981.

In the second case, 60 Comp. Gen. 423 (1981), the Corporation

and its grantees conducted a lobbying campaign to drum up

support for the Corporation’s reauthorization and appropriation

legislation. The Corporation argued that the actions were

permissible under the exception authorizing contact with legislative

bodies on legislation directly affecting the Corporation. While

recognizing that the statute permitted direct self-initiated contact in

162

Similar provisions, found in 42 U.S.C. § 2996e(c), apply to the Corporation itself. An

illustrative case is B-231210, June 7, 1988, aff’d upon reconsideration, B-231210, June 4,

1990, holding that the Corporation is not authorized to retain a private law firm to lobby

Congress on its behalf.

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these circumstances, GAO reviewed the legislative history and

concluded that the exception did not permit grassroots lobbying

either by the Corporation itself or by its grantees.

In the third case, the Managing Attorney of a Legal Services

Corporation (LSC) grantee made a mass mailing of a form letter to

local attorneys. The letter solicited their support for continuation of

the LSC program and urged them to contact a local Congressman

opposed to reauthorization of the LSC to try to persuade him to

change his vote. This too constituted impermissible grassroots

lobbying. B-202787, Dec. 29, 1981.

GAO also found the statute was violated when a grantee used LSC

grant funds to oppose the confirmation of Judge Robert Bork to the

United States Supreme Court. The finding was based largely on

LSC regulations that broadly define “legislation” to include action on

appointments. B-230743, June 29, 1990.

Another provision in the LSC enabling legislation prohibits both the

Corporation and its grantees from contributing or making available

“corporate funds or program personnel or equipment for use in

advocating or opposing any ballot measures, initiatives, or

referendums.” 42 U.S.C. § 2996e(d)(4). The Corporation and one of

its grantees violated this one by providing funds and personnel for a

campaign to defeat a ballot measure in California. 62 Comp. Gen.

654 (1983).

In addition to the LSC’s enabling legislation, appropriation acts

providing funds for the Corporation also include restrictions.

Beginning in 1978, the Corporation’s appropriations contained a

restriction that prohibited the use of Corporation funds for publicity

or propaganda designed to support or defeat legislation pending

before Congress or any state legislature. While serving largely to

reemphasize the prohibitions contained in the Corporation’s

enabling legislation, the restriction made it clear that the exception

for the proper representation of eligible clients did not extend to

grass roots lobbying. See 60 Comp. Gen. 423 (1981); B-163762,

Nov. 24, 1980.

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Since 1996 the LSC’s appropriations have gone beyond restricting

grantee use of federal funds for lobbying activities to a broader

prohibition of the Corporation’s providing funds to any grantee “that

attempts to influence the passage or defeat of any legislation,

constitutional amendment, referendum, initiative, or any similar

procedure of the Congress or a State or local legislative body.”

163

In 2001, the Supreme Court struck down a restriction contained in

the Corporation’s 1996 appropriation on the use of the

Corporation’s funds for lobbying purposes. Legal Services Corp. v.

Velazquez, 531 U.S. 533 (2001). The Court found that provisions,

which sought to restrict efforts toward welfare reform, were

unconstitutional. See also Legal Aid Society of Hawaii v. Legal

Services Corp., 145 F.3d 1017 (9

Cir.), cert. denied, 525 U.S.

1015 (1998) for additional background on appropriation act

restrictions.

Still another example of legislation expressly applicable to grantees

is discussed in B-202787(1), May 1, 1981. The appropriation act

providing funds for the Community Services Administration (CSA)

contained a provision which prohibited the use of funds “to pay the

salary or expenses of any grant or contract recipient . . . to engage

in any activity designed to influence legislation or appropriations

pending before the Congress.” GAO found this provision violated

when a local community action agency used grant funds for a mass

mailing of a letter to members of the public urging them to write to

their Congressmen to oppose abolition of the agency. In addition,

CSA had issued a regulation purporting to exempt CSA grantees

from the appropriation act restriction. Finding that CSA had

163

Ascertaining applicable lobbying restrictions often requires a certain level of patience.

The Corporation’s 2016 appropriation refers back to the restriction contained in its 1996

appropriation by prohibiting the use of funds “for any purpose prohibited or limited by, or

contrary to any of the provisions of, sections 501, 502, 503, 504, 505, and 506 of Public

Law 105-119 . . .” Pub. L. No. 114-113, 129 Stat. 2242, 2322 (Dec. 18, 2015); Pub. L.

No. 105-119, 111 Stat. 2440, 2510 (Nov. 26, 1997). Public Law 105-119 contains the

Corporation’s 1998 appropriation, which itself refers back to the Corporation’s 1996

appropriation, contained in the Omnibus Consolidated Rescissions and Appropriations Act

of 1996, Pub. L. No. 104-134, § 504(a)(4), 110 Stat. 1321, 1321-53 (Apr. 26, 1996).

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exceeded its authority, the Comptroller General recommended that

CSA rescind its ruling. The Department of Justice also found the

CSA regulations invalid, construing the statute as constituting “an

unqualified prohibition against lobbying by federal grantees” and

not merely a restriction on grassroots lobbying. 5 Op. Off. Legal

Counsel 180 (1981).

The provision discussed in the preceding paragraph was also

violated when a university, using grant funds received from the

Department of Education, encouraged students to write to

Members of Congress to urge their opposition to proposed cuts in

student financial aid programs. GAO, Improper Use of Federal

Student Aid Funds for Lobbying Activities, GAO/HRD-82-108

(Washington, D.C.: Aug. 13, 1982).

An almost identical, subsequent provision was violated when a

grantee of the Office of Substance Abuse Prevention used grant

funds to host a conference used as a forum for grassroots lobbying.

Another grantee did not violate the provision, however, because its

lobbying efforts related to a state legislature matter. GAO, Alleged

Lobbying Activities: Office for Substance Abuse Prevention,

GAO/HRD-93-100 (Washington, D.C.: May 4, 1993). The fiscal

year 2016 Labor, Health and Human Services, and Education, and

Related Agencies appropriation act contains a version of this

restriction, which has been expanded to prohibit such lobbying

activities at the state level. Pub. L. No. 114-113, div. H, title V,

§ 503(b), 129 Stat. 2242, 2648 (Dec. 18, 2015).

The question of lobbying with grant funds becomes more difficult

when the situation is not covered by statute and applicable

appropriation act restrictions do not expressly cover grantees. Until

late in 1981, the question of whether appropriation act restrictions,

silent as to grantees, applied to grantee expenditures had not been

definitively addressed in a decision of the Comptroller General. An

early case held that telegrams to Members of Congress by state

agencies funded by Labor Department grants constituted an

improper use of federal funds where they were clearly designed to

influence pending legislation. B-76695, June 8, 1948. This case

pre-dated appropriation act restrictions and was decided under

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18 U.S.C. § 1913.

164

The concept of applying the prohibition to

grantee expenditures would arguably be the same under the

appropriation act restrictions. In a 1977 letter, GAO noted the

principle that funds in the hands of a grantee largely lose their

identity as federal funds and said that the applicability of the

publicity or propaganda statute was therefore “questionable.”

B-158371, Nov. 11, 1977 (nondecision letter). A 1978 letter to a

Member of the Senate said that the issue should be addressed on

a case-by-case basis. B-129874, Aug. 15, 1978.

In B-128938, July 12, 1976, GAO said that an agency has a

responsibility to ensure that its appropriations are not used to

violate the anti-lobbying statute. While the case involved

expenditures by a contractor, the principle would seemingly apply

as well to a grantee.

Finally, in B-202975(1), Nov. 3, 1981, the Comptroller General

seemingly resolved the uncertainty, applied the concept of

B-128938, and concluded that: “Federal agencies and departments

are responsible for insuring that Federal funds made available to

grantees are not used contrary to [the publicity or propaganda]

restriction.” The case involved the Los Angeles Downtown People

Mover Authority, a grantee of the Urban Mass Transportation

Administration (UMTA), Department of Transportation. Fearing that

its funding was in jeopardy, the Authority prepared and distributed a

newsletter urging readers to write to their elected representatives in

Congress to support continued funding for the People Mover

project. The Comptroller General found that this newsletter, to the

extent it involved UMTA grant funds, violated the anti-lobbying

statute. Nevertheless, this decision predates the Byrd Amendment

and the establishment of the common rule system of grant

164

While 18 U.S.C. § 1913 has been regarded as applicable only to officers and

employees of the federal government and not to contractors or grant recipients, this

interpretation has not been challenged since the statute was amended in 2002 by Pub. L.

No. 107-273, § 205(b), 116 Stat. 1758, 1778 (Nov. 2, 2002). See B-214455, Oct. 24, 1984

(citing a May 24, 1983, letter to GAO from the Justice Department’s Criminal Division).

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regulations. It is possible that our reasoning would differ if we were

to evaluate a similar situation today.

In 1996, GAO determined that the state of Nevada improperly used

grant funds in violation of a broad provision found in the annual

Energy and Water Development appropriations acts prohibiting the

use of federal funds to influence legislation and other lobbying

activities.

165

See GAO, Nuclear Waste: Nevada’s Use of Nuclear

Waste Grant Funds, GAO/RCED-96-72 (Washington, D.C.:

Mar. 20, 1996.) Emphasizing the prohibition of the “indirect use” of

federal funds to influence pending legislation, GAO concluded that

the production of a videotape advancing the state’s opposition to a

nuclear waste repository at Yucca Mountain constituted such an

attempt to influence a matter pending before Congress.

166

In our preceding discussion of lobbying by government agencies,

we noted that appropriation act restrictions may be limited to

lobbying the United States Congress or may also apply to lobbying

at the state and local level where expressly provided. The same

principle applies with respect to lobbying with grant funds.

B-214455, Oct. 24, 1984; B-206466, Sept. 13, 1982.

b. Publicity or propaganda

While lobbying restrictions are found in penal statutes and

appropriations acts, restrictions on publicity or propaganda are

found only in appropriations acts. In 1949, a House Resolution

created a Select Committee on Lobbying Activities to review the

operation of the Federal Regulation of Lobbying Act and to

165

“[N]one of the funds herein appropriated may be used directly or indirectly to influence

legislative action on any matter pending before Congress or a State legislature or for any

lobbying activity as provided in section 1913 of title 18, United States Code.” Energy and

Water Development Appropriations Act, 1995, Pub. L. No. 103-316, 108 Stat. 1707, 1716

(Aug. 26, 1994).

166

Note the language of the prohibition differed from the typical grassroots lobbying

restriction, which prohibits the use of appropriations for “publicity or propaganda purposes”

designed to support or defeat pending legislation.

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investigate all lobbying activities both by the private sector and by

federal agencies. The Committee held extensive hearings and

issued several reports. In its final report, the Committee had this to

say about lobbying by government agencies:

“The existing law in this field, unlike the

law governing lobbying by private

interests, is not directed toward

obtaining information of such activities,

but is prohibitory in concept and

character. It forbids the use of

appropriated funds for certain types of

lobbying activities and is specifically a

part of the Criminal Code. Enacted in

1919, it is not a recent or in any sense a

novel piece of legislation. Its validity has

never been challenged and we consider

it sound law. . . .

“It is our conclusion that the long-

established criminal statute referred to

above should be retained intact and that

Congress, through the proper exercise

of its powers to appropriate funds and to

investigate conditions and practices of

the executive branch, as well as through

its financial watch dog, the General

Accounting Office, can and should

remain vigilant against any improper use

of appropriated funds and any invasion

of the legislative prerogatives and

responsibilities of the Congress.”

167

House Select Committee on Lobbying Activities, Report and Recommendations on

Federal Lobbying Act, H.R. Rep. No. 81-3239, at 36 (1951).

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When the Select Committee referred to the “proper exercise” of the

congressional power to appropriate funds, it of course had in mind

the use of that power to restrict the use of funds for activities

considered undesirable. While the use of appropriation act

restrictions to control lobbying had some earlier precedent, the

practice began in earnest shortly after the issuance of the Select

Committee’s final report with some fiscal year 1952 appropriations,

and has continued ever since.

The publicity or propaganda prohibition made its first appearance in

1951. Members of Congress expressed concern over a speaking

campaign promoting a national healthcare plan undertaken in the

early 1950s by Oscar R. Ewing, the Administrator of the Federal

Security Agency, a predecessor to the Department of Health and

Human Services and the Social Security Administration. In reaction

to this activity, Representative Lawrence R. Smith introduced the

following provision, which was enacted in the Labor-Federal

Security appropriation for 1952, Pub. L. No. 134, ch. 373, § 702,

65 Stat. 209, 223 (Aug. 31, 1951): “No part of any appropriation

contained in this Act shall be used for publicity or propaganda

purposes not heretofore authorized by the Congress.” It prohibited

expenditures for all unauthorized publicity or propaganda. Later

versions of this provision prohibited activity throughout the

government:

“No part of any appropriation contained

in this or any other Act shall be used

directly or indirectly, including by private

contractor, for publicity or propaganda

purposes within the United States not

heretofore authorized by the

Congress.”

168

See, e.g., Financial Services and General Government Appropriations Act, 2016,

Pub. L. No. 114-113, div. E, title VII, § 718, 129 Stat. 2242, 2477 (Dec. 18, 2015)

(emphasis added).

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Unfortunately, as with most of the publicity or propaganda statutes

over the years, there is no definition of either term. Thus, the

statutes have been applied through administrative interpretation.

In construing and applying a publicity or propaganda provision, it is

necessary to achieve a delicate balance between competing

interests. On the one hand, every agency has a legitimate interest

in communicating with the public and with the Congress regarding

its functions, policies, and activities. The Select Committee

recognized this, quoting in its Interim Report from the report of the

Hoover Commission:

“Apart from his responsibility as

spokesman, the department head has

another obligation in a democracy: to

keep the public informed about the

activities of his agency. How far to go

and what media to use in this effort

present touchy issues of personal and

administrative integrity. But of the basic

obligation there can be little doubt.”

169

In addition, the courts have indicated that it is not illegal for

government agencies to spend money to advocate their positions,

even on controversial issues. See Joyner v. Whiting, 477 F.2d 456,

461 (4

Cir. 1973); Donaggio v. Arlington County, Virginia,

880 F. Supp. 446, 454–56 (E.D. Va 1995); Arrington v. Taylor,

380 F. Supp. 1348, 1364 (M.D. N.C. 1974).

170

Yet on the other hand, the statute has to mean something. As the

court said in National Association for Community Development v.

Hodgson, 356 F. Supp. 1399 (D.D.C. 1973) in reference to

169

H.R. Rep. No. 81-3138, at 53 (1950).

170

Further useful discussion may be found in cases dealing with different but

conceptually related issues such as Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S.

457 (1997), citing United States v. Frame, 885 F.2d 1119 (3

Cir. 1989).

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18 U.S.C. § 1913, “[o]bviously, Congress intended to remedy some

problem or further some cause, otherwise they would not have

bothered enacting the statute.” Id. at 1403. As long as the law

exists, there has to be a point beyond which government action

violates it. Testifying before the Select Committee on March 30,

1950, former Assistant Comptroller General Frank Weitzel made

the following remarks:

“[I]f you set up an organization in the

executive branch for the benefit of the

three blind mice they would come up

here with a budget program and

prospectus which would convince any

Member of Congress that that was one

of the most important organizations in

the executive branch. . . .

“And no doubt by that time there would

also be some private organizations with

branches which would parallel your

Federal agency, which would be

devoted to the propagation and

dissemination of information about the

three blind mice . . . .”

171

As noted, although the publicity or propaganda prohibition has

appeared in some form in the annual appropriations acts since

1951, the prohibitions themselves provide little definitional guidance

as to what specific activities are publicity or propaganda. Thus, and

in light of the delicate balance described, GAO has identified three

activities that are prohibited by the publicity or propaganda

prohibition—self-aggrandizement, covert propaganda, and purely

partisan materials.

171

The Role of Lobbying in Representative Self-Government: Hearings before the House

Select Committee on Lobbying Activities, 81st Cong., pt. 1, at 158 (1950).

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In evaluating whether a given action violates a publicity or

propaganda provision, GAO will ask for the agency’s administrative

justification. GAO will not accept the agency’s justification where it

is clear that the action falls into one of these categories. Before

discussing these categories, two threshold issues must be noted.

First, it must be determined whether the agency in question is

subject to a publicity or propaganda restriction. The existence and

precise terms of the restriction can change over time. Therefore, it

is always necessary to check the relevant appropriation acts for the

year in which the questioned obligation or expenditure was made in

order to determine what, if any, agency-specific or government-

wide restrictions exist.

Second, a violation must be predicated on the use of public funds

(either direct appropriations or funds which, although not direct

appropriations, are treated as appropriated funds). If appropriated

funds are not involved, there is no violation no matter how blatant

the conduct may be. 56 Comp. Gen. 889 (1977) (involving a

newsletter concerning the Clinch River Breeder Reactor Project

containing material which would have been illegal had it been

financed in any way with appropriated funds).

As noted above, the broadest form of the publicity or propaganda

restriction prohibits the use of appropriated funds “for publicity or

propaganda purposes not authorized by the Congress.” Recent

government-wide provisions have limited the restriction to activities

“within the United States.”

172

(1) Self-aggrandizement

The Comptroller General first had occasion to construe this

provision in 31 Comp. Gen. 311 (1952). The National Labor

172

See, e.g., Pub. L. No. 114-113, div. E, title VII, § 718, 129 Stat. 2242, 2477 (Dec. 18,

2015); Pub. L. 113-235, div. E, title VII, § 718, 128 Stat. 2130, 2383 (Dec. 16, 2014); Pub.

L. No. 113-76, div. E, title VII, § 718, 128 Stat. 5, 234 (Jan. 17, 2014).

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Relations Board asked whether the activities of its Division of

Information amounted to a violation. Reviewing the statute’s scant

legislative history, the Comptroller General concluded that it was

intended “to prevent publicity of a nature tending to emphasize the

importance of the agency or activity in question.” Id. at 313.

Therefore, the prohibition would not apply to the “dissemination to

the general public, or to particular inquirers, of information

reasonably necessary to the proper administration of the laws” for

which an agency is responsible. Id. at 314. Based on this

interpretation, GAO concluded that the activities of the Board’s

Division of Information were not improper. The only thing GAO

found that might be questionable, the decision noted, were certain

press releases reporting speeches of members of the Board.

Thus, 31 Comp. Gen. 311 established the important proposition

that the statute does not prohibit an agency’s legitimate

informational activities. See also B-319075, Apr. 23, 2010;

B-302992, Sept. 10, 2004; B-302504, Mar. 10, 2004; B-284226.2,

Aug. 17, 2000; B-223098.2, Oct. 10, 1986. It also established that

the publicity or propaganda restriction prohibits “publicity of a

nature tending to emphasize the importance of the agency or

activity in question.” 31 Comp. Gen at 313. See also B-302504,

Mar. 10, 2004; B-212069, Oct. 6, 1983. Such activity has become

known as “self-aggrandizement.”

In B-302504, Mar. 10, 2004, GAO considered a flyer and television

and print advertisements that the Department of Health and Human

Services (HHS) produced and distributed to inform Medicare

beneficiaries of recently enacted changes to the Medicare program.

While the materials had notable factual omissions and other

weaknesses, GAO concluded that the materials were not self-

aggrandizement because they did not attribute the enactment of

new Medicare benefits to HHS or any of its agencies or officials.

There was also no violation found in B-303495, Jan. 4, 2005, which

was affirmed in B-303495.2, Feb. 15, 2005. In this case, the Office

of National Drug Control Policy used the term “Drug Czar” to

describe its director in video news releases it issued under the

Drug-Free Media Campaign Act of 1998. The term had common,

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widespread, and long-standing usage by the media and Members

of Congress, and was not being used by the agency to persuade

the public of the importance of the director. Rather, it was used as

“nothing more than a sobriquet.” B-303495, at 15.

In B-326944, Dec. 14, 2015, we considered whether the

Environmental Protection Agency (EPA) engaged in self-

aggrandizement by posting various messages on its social media

accounts emphasizing the importance of the agency’s new clean

water rule, using the hashtag #CleanWaterRules. The posts

described perceived benefits that would be attributed to the new

rule. While the social media posts certainly touted the significance

of the rule, engendering praise for the agency was not the goal;

therefore, we did not find EPA’s posts to be self-aggrandizing.

In a 1973 case, the Republican National Committee financed a

mass mailing of copies of editorials from British newspapers in

praise of the President. The editorials were transmitted with a letter

prepared by a member of the White House staff, on State

Department letterhead stationery, and signed by the Ambassador

to Great Britain. B-178528, July 27, 1973. GAO again noted the

extreme difficulty in distinguishing between disseminating

information to explain or defend administration policies, which is

permissible, and similar activities designed for purely political or

partisan purposes. See also B-194776, June 4, 1979. In addition, a

legitimate function of a foreign legation is to communicate

information on press reaction in the host country to policies of the

United States. Thus, GAO was unable to conclude that there was

any violation of the publicity or propaganda law.

Other cases, in which GAO specifically found no self-

aggrandizement, are B-320482, Oct. 19, 2010 (Department of

Health and Human Services’ (HHS) contracts for technical

assistance and production and airing of a television advertisement);

B-319834, Sept. 9, 2010 (HHS’s preparation and distribution of a

brochure informing Medicare recipients about changes in

Medicare); B-319075, Apr. 23, 2010 (HHS’s creation and operation

of its HealthReform.gov Web site and the State Your Support Web

page); B-284226.2, Aug. 17, 2000 (Department of Housing and

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Urban Development report and accompanying letter providing

information to agency constituents about the impact of program

reductions being proposed in Congress); B-212069, Oct. 6, 1983

(press release by Director of Office of Personnel Management

excoriating certain Members of Congress who wanted to delay a

civil service measure the administration supported); and B-161686,

June 30, 1967 (State Department publications on Vietnam War). In

none of these cases were the materials designed to glorify the

issuing agency or official.

Similarly, GAO concluded that the Census Bureau did not violate

this restriction when its employees participated in a symposium.

The symposium was to attract thousands of African-Americans, a

population the Bureau characterized as “hard-to-count” and

therefore targeted in its outreach activities. The Bureau’s

participation in the symposium was limited to responding to

questions about the census and giving away promotional items and

was therefore legitimate informational activity, not puffery or self-

aggrandizement. See GAO, Census Bureau Participation in Los

Angeles Symposium, August 2000, GAO-01-124R (Washington,

D.C.: Oct. 24, 2000).

Some agencies have authority to disseminate material that is

promotional rather than purely informational. For example, the

Commerce Department is charged with promoting commerce. In so

doing, it entered into a contract with the Advertising Council to

undertake a national multimedia campaign to enhance public

understanding of the American economic system. Finding that this

was a reasonable means of implementing its function and that the

campaign did not “aggrandize” the Commerce Department, GAO

found nothing illegal. B-184648, Dec. 3, 1975.

If an agency does not have promotional authority, the scope of its

permissible activities is correspondingly more restricted. For

example, GAO found the publicity or propaganda law violated when

a presidential advisory committee, whose sole function was to

advise the President and which had no promotional role, set up and

implemented a public affairs program which included the hiring of a

“publicity expert.” B-222758, June 25, 1986. See section D.1.e

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below for further discussion of agency promotional authorities and

the employment of publicity experts.

(2) Covert propaganda

Another type of activity that GAO has construed as prohibited by

the publicity or propaganda statute is “covert propaganda.” Covert

propaganda refers to communications that fail to disclose the

agency’s role as the source of information, or that are misleading

as to their origin. B-326944, Dec. 14, 2015; B-304716, Sept. 30,

2005. See also B-229257, June 10, 1988 (describing covert

propaganda as “materials such as editorials or other articles

prepared by an agency or its contractors at the behest of the

agency and circulated as the ostensible position of parties outside

the agency”). A critical element of the violation is concealment of, or

failure to disclose to the target audience, the agency’s role in

sponsoring the material. B-326944; B-305368, Sept. 30, 2005;

B-304228, Sept. 30, 2005; B-303495, Jan. 4, 2005; B-302710,

May 19, 2004; B-306349, Sept. 30, 2005 (nondecision letter);

B-229257.

In a 1986 case, the Small Business Administration (SBA) prepared

“suggested editorials” and distributed them to newspapers. The

editorials urged support of an administration proposal to merge the

SBA with the Department of Commerce. Clearly, SBA had prepared

and disseminated the “suggested editorials” to promote a particular

viewpoint; in this sense, one may have considered them to be

“propaganda” in the common sense of the word.

173

This, however,

was not enough to violate the law. The problem was that the

editorials were misleading as to their origin. The plan presumably

was for a newspaper to print the editorial as its own without

identifying it as an SBA document. This, the Comptroller General

concluded, went beyond the range of acceptable public information

173

See American Heritage Dictionary of the English Language 1404 (4

Ed. 2009)

(propaganda is “[m]aterial disseminated by the advocates or opponents of a doctrine or

cause”).

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activities and therefore violated the publicity or propaganda law.

B-223098, B-223098.2, Oct. 10, 1986. See also B-129874, Sept.

11, 1978 (“canned editorials” and sample letters to the editor in

support of Consumer Protection Agency legislation, had they been

prepared, would have violated the law).

174

Prepackaged news stories, ordinarily contained in video news

releases, or “VNRs,” have become a popular tool in the public

relations industry, and for a period of time agencies’ use of this tool

was a focal point of GAO case law regarding covert propaganda.

The prepackaged news stories may be accompanied by a

suggested script, video clips known as “B-roll” film which news

organizations can use either to augment their presentation of the

prepackaged news story or to develop their own news reports in

place of the prepackaged story, and various other promotional

materials. These materials are produced in the same manner in

which television news organizations produce materials for their own

news segments, so they can be reproduced and presented as part

of a newscast by the news organizations.

In B-302710, May 19, 2004, GAO found that the Department of

Health and Human Services (HHS) violated the publicity or

propaganda prohibition when it produced and distributed

prepackaged video news stories that did not identify the agency as

the source of the news stories. The HHS news stories were part of

a media campaign to inform Medicare recipients about new benefits

available under the recently enacted Medicare Prescription Drug,

Improvement, and Modernization Act of 2003. HHS designed its

prepackaged video news stories to be indistinguishable from video

segments produced by private news broadcasters, allowing

broadcasters to incorporate them into their broadcasts without

alteration. The suggested anchor lead-in scripts included in the

package facilitated the unaltered use of the prepackaged news

stories, announcing the package as a news story by fictional news

174

Note this opinion applied the appropriations provision prohibiting grassroots lobbying,

rather than the publicity or propaganda prohibition.

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reporters. HHS, however, did not include any statement in the news

stories to advise the television viewing audience, the target of the

purported news stories, that the agency wrote and produced the

prepackaged news stories, and the television viewing audiences

did not know that the stories they watched on television news

programs about the government were, in fact, prepared by the

government. See also B-304228, Sept. 30, 2005 (prepackaged

news story produced by consultant hired by the Department of

Education did not reveal to the target audience the Department’s

role so it was covert propaganda in violation of the prohibition);

B-303495, Jan. 4, 2005 (prepackaged news stories produced by

the Office of National Drug Control Policy were covert propaganda

in violation of the prohibition).

In reaction to the growing use of prepackaged news stories within

the government, GAO issued a circular letter to the heads of

departments, agencies, and others concerned entitled

Prepackaged News Stories, B-304272, Feb. 17, 2005. The letter

fully explains the limitations imposed by the publicity or propaganda

prohibition on the use of prepackaged news stories. It also explains

when agencies are allowed to use prepackaged news stories,

noting in particular that such use is valid so long as there is clear

disclosure to the viewing audience that the material presented was

prepared by or in cooperation with a government agency.

In May 2005, Congress enacted section 6076 of the Emergency

Supplemental Appropriations Act for Defense, the Global War on

Terror, and Tsunami Relief, 2005, Pub. L. No. 109-13, 110 Stat.

231, 301 (May 11, 2005). Section 6076 provided that no

appropriations “may be used by an executive branch agency to

produce any prepackaged news story intended for broadcast or

distribution unless the story includes a clear notification within the

text or audio of the prepackaged news story that the prepackaged

news story was prepared or funded by that executive branch

agency.” Id. In the conference report submitted to both houses of

Congress the conferees specifically adopted GAO’s analysis of

covert propaganda and stated that section 6076 “confirms the

opinion of the Government Accountability Office dated February 17,

2005 (B-304272).” H.R. Conf. Rep. No. 109-72, at 158–59 (2005)

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(emphasis added). The opinion to which the report was referring

was the Comptroller General’s circular letter which clearly stated

that the critical element in determining whether prepackaged news

stories constitute covert propaganda is whether the intended

audience is informed of the source of the materials. B-304272, Feb.

17, 2005. Section 6076 did not create new law or impose a new

requirement: “Congress enacted section 6076 to emphasize that

the publicity or propaganda prohibition always restricted the use of

appropriations to disseminate information without proper source

attribution.” B-307917, July 6, 2006, at 2 (concerning newspaper

article without source attribution that agency contracted for before

passage of section 6076). Therefore, transactions entered into

before the date of enactment of section 6076 are held to the same

requirement for source attribution. Id.

In 66 Comp. Gen 707 (1987), involving newspaper articles and

editorials in support of Central American policy, we found an

analogous violation. Here, materials were prepared by paid

consultants at government request, and published as the work of

nongovernmental parties. The decision also found that media visits

by Nicaraguan opposition leaders, arranged by government officials

but with that fact concealed, constituted another form of “covert

propaganda.” See also B-305368, Sept. 30, 2005 (Department of

Education contract with radio and television personality to comment

regularly on the No Child Left Behind Act without assuring that the

Department’s role was disclosed to the targeted audiences violated

the publicity or propaganda prohibition); B-306349, Sept. 30, 2005

(Department of Education urged to review newspaper article written

by a Department of Education contractor which did not disclose the

agency’s involvement in its writing for possible publicity or

propaganda violations).

However, where an economist, on contract with HHS for technical

assistance, acted on his own behalf in writing opinion pieces,

testifying, or otherwise speaking on health reform, HHS did not

violate the publicity or propaganda provision. B-320482, Oct. 19,

2010. Unlike the situations described above, HHS did not contract

for, or have any involvement with, these activities. Similarly, in

B-316443, July 21, 2009, Department of Defense (DOD) outreach

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to retired military officers (RMOs) who served as media analysts did

not violate the prohibition. DOD sought to influence public opinion

of its war policies by providing the RMOs with talking points and

information and by organizing meetings and travel, but DOD did not

engage the RMOs, by contract or otherwise, to have them deliver to

the public, analysis created by DOD, or particular commentary. See

also B-304716, Sept. 30, 2005 (articles praising the President’s

Healthy Marriage Initiative, prepared by expert consultant hired by

the Department of Health and Human Services, Administration for

Children and Families (ACF), did not violate the publicity or

propaganda prohibition, as ACF did not contract with the consultant

for the publication of favorable articles, but rather she performed

those activities on her own).

The publicity or propaganda provision applies to actions carried out

by or at the behest of a government entity, using appropriated

funds. Again, a violation of the provision based on covert

propaganda will stem from the agency’s failure to disclose its role to

the target audience of its communication. B-326944, Dec. 14, 2015.

As demonstrated in the opinions and decisions discussed above,

an agency’s transparency to the distributors of its messages—for

example, the person delivering positive commentary pursuant to a

contract with the agency, or the television station airing a

prepacked news story with knowledge of the source from which it

received the material, or the newspaper entreated to publish a

canned editorial, with awareness of its government author—are not

the communications at issue, as these distributors are not the

target audiences of the messages they will deliver. See, e.g.,

B-305368, Sept. 30, 2005; B-302710, May 19, 2004; B-223098,

B-223098.2, Oct. 10, 1986. Nor are the actions of non-government

actors taken on their own behalf, independent of solicitation by a

government entity or official, the communications to which the

covert propaganda restriction applies. See, e.g., B-320482, Oct. 19,

2010, B-304716, Sept. 30, 2005. These precepts persist regardless

of the medium through which the government message is being

disseminated.

In B-326944, Dec. 14, 2015, we considered whether the

Environmental Protection Agency (EPA) engaged in covert

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propaganda through its use of two social media platforms:

Thunderclap and Twitter. We found a violation of the publicity or

propaganda provision as to the agency’s use of Thunderclap,

because the Thunderclap message that EPA created did not

identify EPA as the author to the intended viewers.

Thunderclap describes itself a “crowdspeaking platform” that allows

a single message to be shared across multiple Facebook, Twitter,

and Tumblr accounts at the same time. To this end, the website

allows “campaign organizers” to create campaign pages describing

the organizer’s cause or issue, including a short message that will

be shared if enough people sign up to support the organizer’s

Thunderclap campaign. Thunderclap shares this short message on

the date and at the time chosen by the campaign organizer, using

the social media accounts of the supporters. EPA created a

Thunderclap campaign, called “I Choose Clean Water,” during the

public comment period of its proposed rule to define the term

“Waters of the United States” under the Clean Water Act. While the

campaign page clearly identified EPA as the creator, the

Thunderclap message to be shared using supporter social media

accounts did not. Instead, EPA’s Thunderclap message was written

in the first person, as though coming from the individual supporter,

declared support of EPA’s efforts, and provided a link to the

agency’s website on the proposed rule. As with the prepacked

news stories and canned editorials discussed above, EPA’s

message was able to be shared without alteration, and that

message, as created by EPA, did not provide indication of EPA’s

role to the intended audience of the communication.

As highlighted in the opinion, there are arguably two target

audiences of a Thunderclap campaign—the campaign requires

supporters to share its message, and those supporters are one

audience. But, as the chief purpose of a Thunderclap campaign is

to gain enough support so as to maximize the reach of your

particular message, the target audience of the short statement

created to be shared extends beyond this supporter group to the

friends and followers of the supporters’ social media accounts. The

adoption or belief in the message held by supporters who signed up

to allow Thunderclap to share EPA’s message via their accounts

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did not alter the fact that EPA constructed a message to be shared

by others to reach a broader group, and in that message did not

identify its role. See B-326944.

Separately, EPA engaged in a Twitter effort, titled #DitchtheMyth, to

dispel certain “myths” being circulated about its proposed rule. As

part of this effort, EPA created a webpage displaying various

“myths” followed by the corresponding “truth.” Readers could share

the truth by clicking a hyperlink labeled “Tweet the truth,” which

would generate a prewritten tweet. The prewritten tweets included

EPA’s twitter handle, @EPAWater, at the end, which EPA

described as its byline. Here, we agreed that EPA created a

message identifying the agency’s involvement to the intended

audience. We did not find EPA’s #DitchtheMyth campaign to violate

the publicity or propaganda provision. B-326944.

In B-302992, Sept. 10, 2004, the Forest Service produced video

and print materials to explain and defend its controversial land and

resource management plan for the Sierra Nevada Forest. Because

the video and print materials clearly identified the Forest Service

and the Department of Agriculture as the source of the materials,

GAO concluded that they did not constitute covert propaganda. See

also B-301022, Mar. 10, 2004 (the Office of National Drug Control

Policy was clearly identified as the source of materials sent to

members of the National District Attorneys Association concerning

the debate over the legalization of marijuana); B-229257, June 10,

1988 (Federal Trade Commission’s (FTC) preparation of a variety

of materials critical of the Postal Service’s “monopoly” on letter

class mail, for distribution at a National Press Club breakfast that

the Postmaster General was to attend, while unquestionably

propaganda, did not violate the law because materials identified

FTC as the source).

(3) Purely partisan materials

A third category of materials identified in GAO case law as violating

the publicity or propaganda prohibition is purely partisan materials.

To be characterized as purely partisan in nature, the offending

materials must be found to have been “designed to aid a political

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party or candidate.” B-147578, Nov. 8, 1962. It is axiomatic that

funds appropriated to carry out a particular program would not be

available for political purposes. See B-147578, Nov. 8, 1962.

It is often difficult to determine whether materials are political or not

because “the lines separating the nonpolitical from the political

cannot be precisely drawn.” Id.; B-144323, Nov. 4, 1960. See also

B-130961, Oct. 26, 1972. An agency has a legitimate right to

explain and defend its policies and respond to attacks on that

policy. B-319834, Sept. 9, 2010; B-319075, Apr. 23, 2010;

B-302504, Mar. 10, 2004. A standard GAO applies is that the use

of appropriated funds is improper only if the activity is “completely

devoid of any connection with official functions.” B-322882, Nov. 8,

2012. B-147578, Nov. 8, 1962. As stated in B-144323, Nov. 4,

1960:

“[The question is] whether in any

particular case a speech or a release by

a cabinet officer can be said to be so

completely devoid of any connection

with official functions or so political in

nature that it is not in furtherance of the

purpose for which Government funds

were appropriated, thereby making the

use of such funds . . . unauthorized.

This is extremely difficult to determine in

most cases as the lines separating the

nonpolitical from the political cannot be

precisely drawn.

“. . . As a practical matter, even if we

were to conclude that the use of

appropriated funds for any given speech

or its release was unauthorized, the

amount involved would be small, and

difficult to ascertain; and the results of

any corrective action might well be more

technical than real.”

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While GAO has reviewed materials to determine whether they are

partisan in nature, to date there are no opinions or decisions of the

Comptroller General concluding that an agency’s informational

materials constituted impermissible publicity or propaganda by

virtue of any purely partisan material contained therein. For

example, in B-304228, Sept. 30, 2005, GAO determined that

appropriations were not available for the Department of Education

to conduct a media analysis to gather information regarding public

perception of the Republican Party’s commitment to education, as

such use was purely partisan. Ultimately, GAO concluded that there

was no publicity or propaganda violation, given that other content of

the analysis was acceptable, and thus there was minimal additional

expense incurred by including the improper element. However,

GAO cautioned the Department to be more diligent in its efforts to

keep any future analyses free from explicit partisan content.

In 2000, GAO concluded that an information campaign by the

Department of Housing and Urban Development (HUD) using a

widely disseminated publication, entitled Losing Ground: The

Impact of Proposed HUD Budget Cuts on America’s Communities,

had not violated the prohibition. B-284226.2, Aug. 17, 2000. In the

publication, HUD criticized what it called “deep cuts” in

appropriations that were proposed by the House Appropriations

Committee for particular HUD programs. The publications stated

that, if enacted, the “cuts would have a devastating impact on

families and communities nationwide.” GAO found that this

publication was a legitimate exercise of HUD’s duty to inform the

public of government policies and that HUD had a right to justify its

policies to the public and rebut attacks against those policies.

In B-302504, Mar. 10, 2004, GAO examined a flyer and print and

television advertisements about changes to Medicare enacted by

the Medicare Prescription Drug, Improvement, and Modernization

Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003).

The flyer contained information about new prescription drug

benefits and price discount cards. GAO noted that while the

materials contained opinion and notable factual omissions, the

materials did not constitute impermissible publicity or propaganda.

GAO explained:

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“To restrict all materials that have some

political content or express support of an

Administration’s policies would

significantly curtail the recognized and

legitimate exercise of the

Administration’s authority to inform the

public of its policies, to justify its policies

and to rebut attacks on its policies. It is

important for the public to understand

the philosophical underpinnings of the

policies advanced by elected officials

and their staff in order for the public to

evaluate and form opinions on those

policies.”

B-302504, at 10. See also B-320482, Oct. 19, 2010 (Department of

Health and Human Services’ (HHS) television advertisement

describing changes to Medicare are not purely partisan despite

some overstatement of the benefits); B-319834, Sept. 9, 2010

(although an HHS brochure contained instances in which HHS

presented abbreviated information and a positive view of recent

changes to Medicare that are not universally shared, nothing in the

brochure constituted communication that is purely partisan);

B-319075, Apr. 23, 2010 (while HHS’s HealthReform.gov Web site

and State Your Support Web page contained statements that may

be characterized as having political content, GAO found no

statements that are purely partisan).

In B-302992, Sept. 10, 2004, GAO upheld the Forest Service’s right

to produce and distribute a brochure and video materials regarding

its controversial policy on managing wildfire in the Sierra Nevada

Forest. Because the materials sought to explain hundreds of pages

of scientific data, official opinions, and documents of the Forest

Service, they were not comprehensive and did not explain all the

positive and negative aspects of the thinning policies adopted in its

regional forest plan. GAO concluded that the Forest Service had

the authority to disseminate information about its programs and

policies and to defend those policies.

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In B-322882, Nov. 8, 2012, GAO reviewed an e-mail written by a

Consumer Product Safety Commission staff member to a

swimming pool industry representative. The e-mail encouraged the

recipient to contact nine Members of Congress belonging to the

same political party who supported a change in a Commission

interpretive rule. The staffer explained that hearing from the

industry representative may provide the Members of Congress

“some insight into the safety of the current [before the revised rule]

system.” GAO acknowledged that encouraging a person to contact

Members of Congress of a single political party “may imbue the [e-

mail] with a subtle political tone.” However, the publicity or

propaganda prohibition “does not bar materials that may have

some political content or express support for a particular view.”

Moreover, an e-mail is not purely partisan solely because it fails to

present a balanced view of the consequences of agency action.

Because the e-mail purported to facilitate an exchange of

information regarding pool safety, the staff member’s e-mail was

not completely devoid of official functions and therefore did not

violate the prohibition.

Apart from considerations of whether any particular law has been

violated, GAO has taken the position in two audit reports that the

government should not disseminate misleading information. In

1976, the former Energy Research and Development

Administration (ERDA) published a pamphlet entitled Shedding

Light On Facts About Nuclear Energy. Ostensibly created as part of

an employee motivational program, ERDA printed copies of the

pamphlet far in excess of any legitimate program needs, and

inundated the state of California with them in the months preceding

a nuclear safeguards initiative vote in that state. While the pamphlet

had a strong pro-nuclear bias and urged the reader to “Let your

voice be heard,” the pamphlet did not violate any anti-lobbying

statute because applicable restrictions did not extend to lobbying at

the state level. B-130961-O.M., Sept. 10, 1976. However, GAO’s

review of the pamphlet found it to be oversimplified and misleading.

GAO characterized it as propaganda not suitable for distribution to

anyone, employees or otherwise, and recommended that ERDA

cease further distribution and recover and destroy any undistributed

copies. See GAO, Evaluation Of the Publication and Distribution Of

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“Shedding Light On Facts About Nuclear Energy,” EMD-76-12

(Washington, D.C.: Sept. 30, 1976).

In a later report, GAO reviewed a number of publications related to

the Clinch River Breeder Reactor Project, a cooperative

government/industry demonstration project, and found several of

them to be oversimplified and distorted propaganda, and as such

questionable for distribution to the public. However, the publications

were produced by the private sector components of the Project and

paid for with utility industry contributions and not with federal funds.

GAO recommended that the Department of Energy work with the

private sector components in an effort to eliminate this kind of

material, or at the very least ensure that such publications include a

prominently displayed disclaimer statement making it clear that the

material was not government approved. GAO, Problems With

Publications Related To The Clinch River Breeder Reactor Project,

EMD-77-74 (Washington, D.C.: Jan. 6, 1978).

c. Employee communications with

Congress

Since 1998, annual appropriations acts each year have contained a

government-wide prohibition on the use of appropriated funds to

pay the salary of any federal official who prohibits or prevents

another federal employee from communicating with Congress. See

Pub. L. No. 105-61, § 640, 111 Stat. 1272, 1318 (Oct. 10, 1997).

Specifically, this provision states:

“No part of any appropriation contained

in this or any other Act shall be available

for the payment of the salary of any

officer or employee of the Federal

Government, who . . . prohibits or

prevents, or attempts or threatens to

prohibit or prevent, any other officer or

employee of the Federal Government

from having any direct oral or written

communication or contact with any

Member, committee, or subcommittee of

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the Congress in connection with any

matter pertaining to the employment of

such other officer or employee or

pertaining to the department or agency

of such other officer or employee in any

way, irrespective of whether such

communication or contact is at the

initiative of such other officer or

employee or in response to the request

or inquiry of such Member, committee,

or subcommittee . . . .”

Pub. L. No. 114-113, div. E, title VII, § 713, 129 Stat. 2242,

2475-2476 (Dec. 18, 2015); see also Pub. L. No. 113-235, div. E,

title VII, § 713, 128 Stat. 2130, 2382 (Dec. 16, 2014). This provision

has its antecedents in several older pieces of legislation, including

section 6 of the Lloyd-La Follette Act of 1912, Pub. L. No. 336, ch.

389, 66 Stat. 539, 540 (Aug. 24, 1912), which stated: “The right of

persons employed in the civil service of the United States, either

individually or collectively, to petition Congress, or any Member

thereof, or to furnish information to either House of Congress, or to

any committee or member thereof, shall not be denied or interfered

with.”

Congress enacted section 6 in response to concern over executive

orders by Presidents Theodore Roosevelt and Howard Taft that

prohibited federal employees from contacting Congress except

through the head of their agency. The legislative history of this

provision indicates that Congress intended to advance two goals: to

preserve the First Amendment rights of federal employees

regarding their working conditions and to ensure that Congress had

access to programmatic information from frontline federal

employees. See H.R. Rep. No. 62-388, at 7 (1912); 48 Cong.

Rec. 5634, 10673 (1912).

In B-302911, Sept. 7, 2004, GAO concluded that the Department of

Health and Human Services violated this provision by paying the

salary of the Director of the Centers for Medicare & Medicaid

Services (CMS) who prohibited the CMS Chief Actuary from

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providing certain cost estimates of Medicare legislation to

Congress. The Director specifically instructed the Chief Actuary not

to respond to any requests for information and advised that there

would be adverse consequences if he released any information to

Congress. GAO recognized that certain applications of the

provision could raise constitutional separation of powers concerns;

however, there was no controlling judicial opinion declaring the

provision unconstitutional. GAO found that the provision, as applied

to the facts in this case, precluded the payment of the CMS

Director’s salary because he specifically prevented another

employee from communicating with Congress, particularly in light of

the narrow, technical nature of the information requested by

Congress and Congress’s need for the information in carrying out

its constitutional legislative duties. See also B-325124.2, Apr. 5,

2016 (the Department of Housing and Urban Development’s (HUD)

General Deputy Assistant Secretary for Congressional and

Intergovernmental Relations and its Associate General Counsel

prevented HUD’s Regional Director from appearing before a

congressional committee for a transcribed interview, in violation of

the provision).

d. Advertising in government publications

Suppose you opened this publication and found on the inside front

cover a full-page advertisement for somebody’s soap or underwear

or aluminum siding or the local pool parlor. We assume most

readers would find this offensive. There is, in fact, a long-standing

policy against involving the government in commercial advertising.

In the case of government publications, the policy is codified in

section 13 of the Government Printing and Binding Regulations

issued by the Joint Committee on Printing (1990 reprint):

“No Government publication or other

Government printed matter, prepared or

produced with either appropriated or

nonappropriated funds or identified with

an activity of the Government, shall

contain any advertisement inserted by

or for any private individual, firm, or

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corporation; or contain material which

implies in any manner that the

Government endorses or favors any

specific commercial product,

commodity, or service.”

S. Pub. No. 101-9, at 13 (1990). The provision does not restrict the

use of appropriated funds, but rather is a prohibition on agency

activity. An explanatory paragraph included in the regulations

summarizes many of the reasons for this prohibition. Advertising

would be unfair to competitors in that it would, regardless of intent,

unavoidably create the impression of government endorsement. It

would also be unfair to nongovernment publications that compete

for advertising dollars and need those dollars to stay in business.

Acceptance of advertising could also pose ethical, if not legal,

problems. (Imagine, for example, lobbyists scrambling to purchase

advertising space in the Congressional Record.)

A different situation was presented in 67 Comp. Gen. 90 (1987).

The United States Information Agency (USIA) was authorized to

accept donations of radio programs from private syndicators for

broadcast over the Voice of America. Some donations were

conditioned on the inclusion of commercial advertising. GAO noted

that, in the case of public broadcasting stations (which are

supported by the Corporation for Public Broadcasting), commercial

advertising is expressly prohibited by 47 U.S.C. § 399b(b).

However, there was no comparable statute applicable to USIA.

Therefore, the conditional donations were not subject to any legal

prohibition. In view of the traditional policy against commercial

advertising, GAO suggested that USIA first consult the appropriate

congressional committees.

e. Publicity experts

A statute originally enacted in 1913, now found at 5 U.S.C. § 3107,

provides: “Appropriated funds may not be used to pay a publicity

expert unless specifically appropriated for that purpose.” This

provision applies to all appropriated funds. GAO has consistently

noted certain difficulties in enforcing the statute. In GAO’s first

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substantive discussion of 5 U.S.C. § 3107, the Comptroller General

states “[i]n its present form, the statute is ineffective.” A-61553, May

10, 1935. The early cases

175

identified three problem areas,

summarized in B-181254(2), Feb. 28, 1975.

First, the prohibition is against compensating any “publicity expert,”

but the statute does not define the term “publicity expert” nor does it

provide criteria for determining who is one. Traditionally, persons

employed for or engaged in so-called publicity work have not been

appointed as “publicity experts” but under some other designation,

and often have other duties as well. Everyone who prepares a

press release is not a publicity expert. Testifying before the House

Select Committee on Lobbying Activities in 1950, Assistant

Comptroller General Weitzel said:

“I might mention one of the great

difficulties in enforcing that language is it

is very, very rare, if ever, the case that a

man is on the pay roll as publicity

experts [sic]. He can be called almost

anything else, and usually and

frequently will have other duties, so that

that in itself, is a very difficult statute to

enforce.”

176

Second, employees engaged in so-called publicity work are

normally assigned to their duties by their supervisors. It would be

harsh, in the absence of much more definitive legislative or judicial

guidance, to withhold the compensation of an employee who is

merely doing his or her assigned job. Some thought was given in

the 1930s and early 1940s to amending the statute to cure this

175

There is no mention of the 1913 statute before the 1930s. A small group of cases then

arose. In addition to A-61553, cited in the text, see A-57297, Sept. 11, 1934; A-82332,

Dec. 15, 1936; A-93988, Apr. 19, 1938; and B-26689, May 4, 1943. Another stretch of

silence followed and the statute did not rise again until B-181254(2), Feb. 28, 1975.

176

The Role of Lobbying in Representative Self-Government, Hearings before the House

Select Committee on Lobbying Activities, 81

Cong., pt. 1, at 156 (1950).

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problem, but the legislation was not enacted. See B-181254(2),

Feb. 28, 1975; B-26689, May 4, 1943; A-82332, Dec. 15, 1936.

Third, the effective implementation of the duties of some agencies

requires the acquisition and dissemination of information, although

agencies normally do not receive specific appropriations for the

required personnel.

The legislative history of section 3107 provides some illumination.

While it is not clear what was meant by “publicity expert,” there are

indications that the provision would prohibit the use of press agents

“to extol or to advertise” the agency or individuals within the

agency. See, e.g., 50 Cong. Rec. 4410 (1913) (comments of

Representative Fitzgerald, chairman of the committee that reported

the bill). There are also indications that the provision should not

interfere with legitimate information dissemination regarding agency

work or services. When some members expressed concern that the

provision may affect the hiring of experts to “mak[e] our farm

bulletins more readable to the public and more practical in their

make-up,” supporters indicated that such activities would not be

restricted by passage of the provision. Id. at 4410 (colloquy

between Representatives Lever and Fitzgerald).

Based on these considerations, GAO does not view 5 U.S.C.

§ 3107 as prohibiting an agency’s legitimate informational functions

or legitimate promotional functions where authorized by law. The

apparent intent of the statute is to prohibit publicity activity “for the

purpose of reflecting credit upon an activity, or upon the officials

charged with its administration, rather than for the purpose of

furthering the work which the law has imposed upon it.” A-82332,

Dec. 15, 1936. See also B-181254(2), Feb. 28, 1975. In this sense,

5 U.S.C. § 3107 is closely related to the prohibition on self-

aggrandizement previously discussed, although the focus is

different in that, to violate 5 U.S.C. § 3107, the activity must be

performed by a “publicity expert.”

GAO considered a mass media campaign by the Federal Energy

Administration (FEA), now part of the Department of Energy, to

educate the American public on the need for and means of energy

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conservation. Based on the considerations discussed above and on

the FEA’s statutory authority to disseminate information and to

promote energy conservation, GAO found no basis on which to

assess a violation of 5 U.S.C. § 3107. B-181254(2), Feb. 28, 1975;

B-139965, Apr. 16, 1979. In both cases, GAO stressed its view that

the statute is not intended to interfere with the dissemination of

information that an agency is required or authorized by statute to

disseminate, or with promotional activities authorized by law.

In B-222758, June 25, 1986, the Chemical Warfare Review

Commission, a presidential advisory committee, hired a public

affairs consultant. The Commission’s functions were solely

advisory; it had no authority to engage in promotional activities or to

maintain a public affairs program. In view of the consultant’s duties,

job title, and reputation, GAO found that he was a “publicity expert.”

As such, and given the nature of the Commission’s functions and

its lack of statutory authority, the hiring was held to violate 5 U.S.C.

§ 3107.

GAO revisited the statute in B-302992, Sept. 10, 2004. The Forest

Service had hired a public relations firm to help produce and

distribute materials regarding its controversial land and resource

management plan in the Sierra Nevada Forest, a plan consisting of

hundreds of pages of scientific data and opinions. The Forest

Service had hired the public relations firm to help make the plan’s

scientific content more understandable to the public and media.

GAO concluded that the Forest Service had not violated

section 3107. GAO said that section 3107 was not intended to

impede legitimate informational functions of agencies and does not

prohibit agencies from paying press agents and public affairs

officers to facilitate and manage dissemination of agency

information. GAO stated: “Instead, what Congress intended to

prohibit with section 3107 is paying an individual ‘to extol or to

advertise’ the agency, an activity quite different from disseminating

information to the citizenry about the agency, its policies, practices,

and products.” B-302992, Sept. 10, 2004.

In 2005, GAO considered whether the Social Security

Administration’s (SSA) use of the Gallup Organization to poll the

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public on Social Security program issues violated 5 U.S.C. § 3107.

Citing to the discussion of the legislative history of section 3107 in

B-302992, Sept. 10, 2004, GAO determined that SSA did not hire

Gallup to—nor did Gallup in fact—extol or advertise SSA or

individuals within SSA. Rather, SSA hired Gallup to engage in the

legitimate agency activity of collecting information that the agency

needed in order to carry out its Social Security program. SSA’s

authority to survey the general public on its knowledge of the Social

Security program and programs financing is inherent in the

agency’s authority to administer that program, 42 U.S.C. § 901(b).

Since Gallup was assisting SSA in this endeavor, Gallup was not a

“publicity expert” within the meaning of section 3107. B-305349,

Dec. 20, 2005.

2. Compensation restrictions

“If an officer is not satisfied with what

the law gives him for his services, he

may resign.”

Embry v. United States, 100 U.S. 680, 685 (1879).

As a general proposition, restrictions on the compensation of

federal employees are regarded as matters of personnel law that

are now under the jurisdiction of the Office of Personnel

Management.

177

However, compensation restrictions may also be

viewed as limits on the “purpose availability” of appropriations. We

specifically treat three compensation-related topics in this chapter—

177

The 104

Congress enacted two laws, the Legislative Branch Appropriations Act of

1996, Pub. L. No. 104-53, § 211, 109 Stat. 514, 535 (Nov. 19, 1995), and the General

Accounting Office Act of 1996, Pub. L. No. 104-316, 110 Stat. 3826 (Oct. 19, 1996), that

transferred GAO’s authority over the settlement of claims and related decisions, waivers,

and other functions (including judgment fund payments and transportation carriers

appeals) to the Executive Branch. Federal employees’ claims for compensation and leave,

and settlement of deceased employees’ accounts were assigned to Office of Personnel

Management, (OPM) Office of General Counsel, Claims Adjudication Unit. In April 2000,

this function was transferred to OPM’s Office of Merit Systems Oversight and

Effectiveness.

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the restrictions on dual compensation, the restrictions on employing

aliens, and the statutes concerning forfeiture of retirement annuities

and retired pay—as illustrations of the different ways in which

Congress may exercise its constitutional role of controlling the

public purse by prescribing the purposes for which appropriated

funds may be used. The provision on aliens is a restriction

appearing in annual appropriation acts. The dual compensation and

forfeiture statutes are permanent provisions found in the United

States Code; while not phrased in terms of appropriation

restrictions, the effect is the same.

a. Dual compensation

Section 5536 of title 5 of the United States Code prohibits a civilian

employee or member of the uniformed services whose pay is fixed

by statute or regulation from receiving additional pay from public

money for any other service or duty, unless authorized by law.

178

This is a purpose restriction on how an agency may spend its

appropriation. For instance, GAO found that paying the actual cost

of personal cell phone use for government business is permitted,

but not at a flat rate because an established fee per day is

equivalent to an allowance in addition to salary, and, therefore, is

prohibited by 5 U.S.C. § 5536. B-287524, Oct. 22, 2001. GAO has

also held in several cases that the provision of free food while on

duty violates the prohibition against dual compensation. See, e.g.,

United States Dep’t of the Navy v. Fed. Labor Relations. Authority.,

665 F.3d 1339, 1351 (D.C. Cir. 2012); 42 Comp. Gen. 149, 151

(1962); B-272985, Dec. 30, 1996.

178

We note in passing that there are other laws limiting the salaries paid to federal

employees. E.g., 18 U.S.C. § 209 (salary of government employees payable only by

United States). However, this discussion is limited to laws that constitute purpose

restrictions on an agency’s use of appropriations to pay salaries.

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b. Employment of aliens

For many years, with variations from year to year, appropriation

acts have included provisions restricting the compensation of

aliens, in certain circumstances. The typical prohibition, with

exceptions to be noted below, bars the use of appropriated funds to

pay compensation to any officer or employee of the United States

whose post of duty is in the continental United States, unless that

person is a United States citizen. In more recent years, the

recurring prohibition has appeared as a general provision in the

Financial Services and General Government appropriation acts,

applicable to funds contained “in this or any other act.”

179

For a

more general restriction concerning the employment of aliens, see

8 U.S.C. § 1324a.

The recurring prohibition generally applies to all appropriated funds,

unless expressly provided otherwise.

180

For example, a recurring

general provision in the Defense Department appropriation act

exempts Defense Department personnel from the alien

restriction.

181

Given the prohibition’s broad applicability, versions of

this prohibition have been found to apply to the special deposit

accounts established by statute for the Senate and House

restaurants, since these accounts amount to permanent indefinite

appropriations. 50 Comp. Gen. 323 (1970). Similarly, this recurring

179

For example, the 2017 provision is found in Pub. L. 115-31, div. E, title VII, §§ 704,

__ Stat. __ (May 5, 2017).

180

Since appropriation act restrictions and exceptions vary from year to year, it is

important to scrutinize the relevant appropriation act for any given year. For an illustration

of the complexities that may arise when the provisions vary from year to year, see

57 Comp. Gen. 172 (1977).

181

Pub. L. 115–31, div. C, title VIII, § 8002, __ Stat. __ (May 5, 2017) (codified at

10 U.S.C. § 1584) (“During the current fiscal year, provisions of law prohibiting the

payment of compensation to, or employment of, any person not a citizen of the United

States shall not apply to personnel of the Department of Defense.”).

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restriction has been found to apply to working capital funds.

B-161976, Aug. 10, 1967.

182

In addition to any agency-specific exemptions, the recurring

restriction concerning alien compensation, itself, contains a number

of categorical exclusions.

183

For example, the current prohibition

does not apply to persons lawfully admitted for permanent

residence and seeking citizenship, or persons admitted as a

refugee or granted asylum who have filed a declaration of intention

to become a lawful permanent resident (and then a citizen when

eligible).

184

The employee must have filed the declaration prior to

the date of enactment and a subsequent filing will not cure the

disqualification. 17 Comp. Gen. 1104 (1938). A declaration timely

filed but which had become void by operation of law due to lapse of

time has also been held insufficient. B-138854, Apr. 1, 1959.

The current version of the prohibition does not apply to a person

who “owes allegiance to the United States.” This has been

interpreted to mean an “absolute and permanent allegiance” as

distinguished from “qualified and temporary allegiance.” 17 Comp.

Gen. 1047 (1938); B-119760, Apr. 27, 1954. The exemption was

apparently prompted by a concern for non-citizen inhabitants of

U.S. territorial possessions, for example, “Filipinos in the service of

182

The cited decision refers to the Naval Industrial Fund established under 10 U.S.C.

§ 2208. The decision makes no mention of the statutory exemption for the Defense

Department, which was in effect in 1967. For purposes of this discussion, whether

B-161976 could have been disposed of more simply based on the Department’s

exemption is irrelevant. The decision is cited here merely for the proposition noted in the

text.

183

Though no longer included in the current version, the restriction has historically

included specific country exceptions. See B-194929, June 20, 1979 (examining the

relationship of dual citizenship with this exception). Similarly, the allied-country exception,

which provided that the prohibition does not apply to nationals of “countries allied with the

United States in the current defense effort,” is no longer included. See generally 73 Comp.

Gen. 319 (1994); B-188852, July 19, 1977; B-151064, Mar. 25, 1963; B-146142, June 22,

1961; B-139667, June 22, 1959; B-133877, Oct. 16, 1957; 35 Comp. Gen. 216 (1955);

B-113780, Mar. 4, 1953; B-107288, Feb. 14, 1952; B-107579, Feb. 14, 1952.

184

Pub. L. 115-31, div. E, title VII, §§ 704, __ Stat. __ (May 5, 2017).

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the United States.” 17 Comp. Gen. at 1048. Accordingly, this clause

applies only to non-citizen inhabitants of U.S. territorial

possessions, not to resident aliens. For example, a permanent

resident alien who was not an inhabitant of a U.S. territorial

possession was ineligible for federal employment. Yuen v. Internal

Revenue Service, 497 F. Supp. 1023 (S.D.N.Y. 1980), aff’d,

649 F.2d 163 (2

Cir. 1981) (including, in the lower court opinion,

an exhaustive review of the relevant legislative history). Under the

provision, a signed affidavit will be regarded as prima facie

evidence of allegiance.

The prohibition also does not apply to “temporary employment in

the field service . . . as a result of emergencies.” The term

“emergency” in this context means “flood, fire, or other

catastrophe.” B-146142, June 22, 1961. See also 73 Comp.

Gen. 319 (1994). An alien appointed in contravention of the

statutory prohibition may not retain compensation already paid.

35 Comp. Gen. 216 (1955); 18 Comp. Gen. 815 (1939). (The

statute expressly gives the United States the right to recover.)

As a final note, the Supreme Court in 1976 invalidated a Civil

Service Commission regulation requiring citizenship as a

prerequisite to federal employment. Hampton v. Mow Sun Wong,

426 U.S. 88 (1976). The Court did not, however, invalidate the

appropriation act restrictions. See B-188507, Dec. 16, 1977. The

Yuen litigation cited earlier specifically upheld the restriction against

a charge of violation of the Equal Protection clause.

c. Forfeiture of annuities and retired pay

Under 5 U.S.C. § 8312 (the so-called “Hiss Act”), a civilian

employee of the United States or a member of the uniformed

services who is convicted of certain criminal offenses relating to the

national security will forfeit his or her retirement annuity or retired

pay. Further, the annuity or retired pay may not be paid to the

convicted employee’s survivors or beneficiaries. The offenses

which will result in forfeiture are specified in the statute. Examples

include: gathering or delivering defense information to aid a foreign

government; gathering, transmitting, or losing defense information;

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disclosure of classified information; espionage; sabotage; treason;

rebellion or insurrection; seditious conspiracy; advocating the

overthrow of the government; enlistment to serve in an armed force

against the United States; and certain violations of the Atomic

Energy Act. In addition, perjury by falsely denying the commission

of one of the specified offenses is itself an offense for purposes of

forfeiture.

An employee, for purposes of 5 U.S.C. § 8312, includes a Member

of Congress and an individual employed by the government of the

District of Columbia. 5 U.S.C. § 8311(1). The specific types of

retirement annuities and retired pay subject to forfeiture are

enumerated in 5 U.S.C. §§ 8311(2) and (3).

Since 5 U.S.C. § 8312 imposes a forfeiture, it is penal in nature.

Therefore, it must be strictly construed. GAO will not construe the

statute as applicable to situations that are not expressly covered by

its terms. 35 Comp. Gen. 302 (1955).

In the absence of an authoritative judicial decision to the contrary,

the effective date of a conviction for stoppage of retired pay should

be determined in a manner which will result in the least expenditure

of public funds. Thus, the date a guilty verdict is returned should be

considered the date of conviction rather than a later date when the

judgment is ordered executed, and retired pay should be stopped

the following day. 39 Comp. Gen. 741 (1960). Using the cited

decision to illustrate: the jury returned a guilty verdict on December

2, 1959; judgment was entered on January 29, 1960; the date of

conviction is December 2, 1959, and retired pay should be stopped

effective December 3.

In the absence of an authoritative judicial decision to the contrary, a

plea of “nolo contendere” should be regarded as a conviction for

purposes of 5 U.S.C. § 8312. 41 Comp. Gen. 62 (1961).

(1) The Alger Hiss case

The event that, more than any other single incident, gave rise to the

original enactment of 5 U.S.C. § 8312, was the case of Alger Hiss.

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A former State Department employee, Hiss was convicted in 1950

of perjury stemming from testimony before a grand jury

investigating alleged espionage violations. United States v. Hiss,

185 F.2d 822 (2d Cir. 1950), cert. denied, 340 U.S. 948 (1951).

When Hiss was released from prison after serving his sentence,

considerable public and congressional attention was directed at the

fact that he was still entitled to receive his government pension.

Given the political climate of the times, the result was the

enactment of 5 U.S.C. § 8312 in 1954 (Pub. L. No. 769, ch. 1214,

68 Stat. 1142 (Sept. 1, 1954)).

Hiss applied for his pension in 1967 and the then Civil Service

Commission denied the application based on 5 U.S.C. § 8312. He

subsequently sued for restoration of his forfeited pension. In Hiss v.

Hampton, 338 F. Supp. 1141 (D.D.C. 1972), the court, finding that

the statute had been aimed more at punishing Alger Hiss than

regulating the federal service, held 5 U.S.C. § 8312 to be an ex

post facto law and therefore unconstitutional as it had been applied

to Hiss for conduct which occurred prior to the date of its

enactment. Therefore, the court ordered the Civil Service

Commission to pay Hiss his annuity retroactively with interest.

The Hiss case gave rise to two GAO decisions—52 Comp. Gen.

175 (1972), aff’d, B-115505, Dec. 21, 1972—holding that the

interest payable to Hiss, as with the annuity itself, must be paid

from the Civil Service Retirement Fund rather than the permanent

judgment appropriation, 31 U.S.C. § 1304. The court case and

decisions are summarized in B-115505, May 15, 1973.

(2) Types of offenses covered

Under the original version of 5 U.S.C. § 8312, forfeiture was not

strictly limited to national security offenses. An employee could lose

his or her retirement annuity or retired pay simply by committing a

felony “in the exercise of his authority, influence, power, or

privileges as an officer or employee of the Government.” There

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were numerous examples of forfeitures for such infractions as

falsifying a travel voucher or using a government-owned vehicle for

personal purposes.

185

Recognizing that in many cases the punishment was too severe for

the offense, especially in cases where the offense occurred after

many years of government service, Congress amended the statute

in 1961 (Pub. L. No. 87-299, 75 Stat. 640 (Sept. 26, 1961)) to limit it

to offenses relating to national security and to “retroactively remove

therefrom those provisions of the statute which prohibited payment

of annuities and retired pay to persons who commit offenses, acts

or omissions which do not involve the security of the United States.”

41 Comp. Gen. 399, 400 (1961). Thus, numerous offenses which

would have caused forfeiture before 1961 no longer do. See, e.g.,

B-155823, Sept. 15, 1965 (conspiracy to embezzle government

funds); B-155558, Nov. 25, 1964 (false statement). Of course, to

the extent that the pre-1961 decisions establish principles apart

from the specific offenses involved, such as the general principles

noted above, they remain valid.

The original 1954 enactment of 5 U.S.C. § 8312 did not expressly

cover offenses under the Uniform Code of Military Justice (UCMJ),

and this omission generated many GAO decisions prior to the

1961 amendment. E.g., 40 Comp. Gen. 601 (1961); 38 Comp. Gen.

310 (1958); 35 Comp. Gen. 302 (1955). The UCMJ decisions came

to an abrupt halt with the enactment of the 1961 amendment. The

current version of 5 U.S.C. § 8312 expressly covers UCMJ

offenses, again limited to national security violations. Now, a

conviction under the UCMJ will produce a forfeiture if the offense

involves certain UCMJ articles specified in the statute, or if it

involves any other article of the UCMJ where the charges and

specifications describe a violation of certain of the United States

Code offenses, and if the “executed sentence” includes death,

dishonorable discharge, or dismissal from the service.

185

See, e.g., 41 Comp. Gen. 114 (1961); 40 Comp. Gen. 364 (1960); 40 Comp. Gen. 176

(1960).

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(3) Related statutory provisions

When a forfeiture is invoked under 5 U.S.C. § 8312, the individual

is entitled to a refund of his contribution toward the annuity less any

amounts already paid out or refunded. 5 U.S.C. § 8316.

Forfeiture may not be invoked where an individual is convicted of

an offense “as a result of proper compliance with orders issued, in

a confidential relationship, by an agency or other authority” of the

United States government or the District of Columbia government.

5 U.S.C. § 8320.

If a payment of annuity or retired pay is made in violation of

5 U.S.C. § 8312 “in due course and without fraud, collusion, or

gross negligence,” the relevant accountable officer will not be held

responsible. 5 U.S.C. § 8321.

In addition to 5 U.S.C. § 8312, retirement annuities or retired pay

may be forfeited for willful absence from the United States to avoid

prosecution for a section 8312 offense (5 U.S.C. § 8313); refusal to

testify in national security matters (5 U.S.C. § 8314);

186

or knowingly

falsifying certain national security-related aspects of a federal or

District of Columbia employment application (5 U.S.C. § 8315).

3. Guard services: Anti-Pinkerton Act

a. Evolution of the law prior to 1978

On July 6, 1892, in Homestead, Pennsylvania, a riot occurred

between striking employees of the Carnegie, Phipps & Company

steel mill and approximately 200 Pinkerton guards. The company

had brought in the Pinkerton force ostensibly to protect company

property. As the Pinkertons were being transported down the

186

Construed by the Justice Department as applicable to proceedings involving the

individual’s own loyalty or knowledge of activities or plans that pose a serious threat to

national security. 1 Op. Off. Legal Counsel 252 (1977).

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Monongahela River, the strikers sighted them and began firing on

them. The strikers were heavily armed, and even had a cannon on

the riverbank. The violence escalated to the point where the strikers

spread oil on the water and ignited it. Several of the Pinkerton men

were killed and several of the strikers were indicted for murder. The

riot received national attention.

The then-common practice of employing armed Pinkerton guards

as strikebreakers in labor disputes became an emotionally charged

issue. The Homestead riot, together with other similar although less

dramatic incidents made it clear that the use of these guards

provoked violence. Although Congress was reluctant to legislate

against their use in the private sector, some congressional action

became inevitable. The result was the law that came to be known

as the Anti-Pinkerton Act. Originally enacted as part of the Sundry

Civil Appropriation Act of August 5, 1892, 27 Stat. 368, it was made

permanent the following year by the Act of March 3, 1893, ch. 208,

27 Stat. 591. Now found at 5 U.S.C. § 3108, the Act provides:

“An individual employed by the

Pinkerton Detective Agency, or similar

organization, may not be employed by

the Government of the United States or

the Government of the District of

Columbia.”

As we will see, the statute has little impact today. Nevertheless, it

remains on the books and could become relevant, albeit only in

unusual circumstances. Therefore, it may be useful to briefly

recount the administrative interpretations of the law.

Although the Anti-Pinkerton Act was never the subject of any

judicial decisions until the late 1970s, it was the subject of

numerous decisions of the Comptroller General and the

Comptroller of the Treasury. Several principles evolved through the

decisions.

• The Act applies to contracts with “detective agencies” as firms

or corporations as well as to contracts with or appointments of

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individual employees of such agencies. 8 Comp. Gen. 89

(1928); A-12194, Feb. 23, 1926.

• The Act prohibits the employment of a detective agency or its

employees, regardless of the character of the services to be

performed. The fact that such services are not to be of a

“detective” nature is immaterial. Thus, detectives or detective

agencies within the scope of the Act may not be employed in

any capacity. 51 Comp. Gen. 494 (1972); 26 Comp. Gen. 303

(1946).

• The statutory prohibition applies only to direct employment. It

does not extend to subcontracts entered into with independent

contractors of the United States. 26 Comp. Gen. 303. The

legislative history of the original 1892 statute made it clear that

Congress did not intend to reach subcontracts. However, the

Act does apply to a contract under the Small Business

Administration (SBA) set-aside program since the contract is a

prime contract vis-à-vis SBA even though it may be a

subcontract vis-à-vis the actual employing agency. 55 Comp.

Gen. 1472 (1976).

• Although the Comptroller General never defined “detective

agency” for purposes of the Anti-Pinkerton Act, the decisions

drew a distinction between detective agencies and protective

agencies and held that the Act did not forbid contracts with the

latter. 38 Comp. Gen. 881 (1959); 26 Comp. Gen. 303 (1946);

B-32894, Mar. 29, 1943. Thus, the government could employ a

protective agency, but could not employ a detective agency to

do protective work. An important test became whether the

organization was empowered to do general investigative work.

• In determining whether a given firm is within the statutory

prohibition, GAO considers the nature of the functions it may

perform as well as the functions it in fact performs. Two factors

are relevant here: the firm’s authority under its corporate charter

and its powers under licensing arrangements in the states in

which it does business. If a firm is chartered as a detective

agency and licensed as a detective agency, then the fact that it

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does not actually engage in detective work will not permit it to

escape the statutory prohibition. Since virtually every

corporation inserts in its charter an “omnibus” clause (“engage

in any lawful act or activity for which corporations may be

organized in this state” or similar language), an omnibus clause

alone will not make a company a detective agency. Rather,

specific charter authorization is needed. 41 Comp. Gen. 819

(1962); B-146293, July 14, 1961.

• The government may employ a wholly owned subsidiary of a

detective agency if the subsidiary itself is not a detective

agency, even if the subsidiary was organized primarily or solely

to avoid the Anti-Pinkerton Act. As long as there is prima facie

separation of corporate affairs, the Act does not compel the

government to “pierce the corporate veil.” 44 Comp. Gen. 564

(1965); 41 Comp. Gen. 819 (1962); B-167723, Sept. 12, 1969.

• A telephone listing alone is not sufficient evidence that a given

firm is a “detective agency” for purposes of 5 U.S.C. § 3108,

although the fact of such a listing should prompt further inquiry

by the procuring agency. 55 Comp. Gen. 1472 (1976);

B-181684, Mar. 17, 1975; B-176307(1), Mar. 21, 1973;

B-177137, Feb. 12, 1973.

• Corrections to charters and licenses may be made prior to

contract award to avoid Anti-Pinkerton Act violations. Post-

award corrections, while perhaps relevant to future

procurements, do not, absent compelling circumstances,

retroactively expunge ineligibility existing at the time of the

award. 56 Comp. Gen. 225 (1977); B-172587, June 21, 1971;

B-161770, Nov. 21, 1967; B-160538, Nov. 15, 1967; B-156424,

July 22, 1965.

These principles were discussed and applied in many decisions

over the years. For example, a contract for guard services was

found to violate the Act where the contractor was expressly

chartered and licensed as a detective agency. 55 Comp.

Gen. 1472, aff’d upon reconsideration, 56 Comp. Gen. 225.

Similarly, a contract with a sole proprietorship was invalid where the

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owner was also the president of a corporation chartered and

licensed as a detective agency. B-186347, B-185495, Oct. 14,

1976, aff’d upon reconsideration, B-186347, B-185495, Mar. 7,

1977.

By the 1970s, the Anti-Pinkerton Act had become a hindrance to

the government’s guard service contracting activities. The federal

government is a major consumer of guard services, and it was the

rare solicitation that did not generate a squabble over who was or

was not subject to the Act. Many companies, including Pinkerton

itself, were forced to form subsidiaries in order to compete for

government business.

b. The present state of the law

The first reported judicial decision dealing with the Anti-Pinkerton

Act was United States ex rel. Weinberger v. Equifax, 557 F.2d 456

Cir. 1977), cert. denied, 434 U.S. 1035 (1978). The issue in that

case was whether the Act applied to a credit reporting company.

The Comptroller General, in B-139965, Jan. 10, 1975, had already

held that it did not. The court reached the same result, although on

different reasoning. Relying heavily on the Act’s legislative history,

the court held:

“In light of the purpose of the Act and its

legislative history, we conclude that an

organization is not ‘similar’ to the

(quondam) Pinkerton Detective Agency

unless it offers quasi-military armed

forces for hire.”

Equifax, 557 F.2d at 463.

In a June 1978 circular letter to department and agency heads,

published at 57 Comp. Gen. 524 (1978), the Comptroller General

announced that GAO would follow the Equifax interpretation in the

future. Therefore, the statutory prohibition will now be applied only if

an organization can be said to offer quasi-military armed forces for

hire. The Comptroller General declined, as did the Fifth Circuit, to

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attempt a definition of a quasi-military armed force but noted that,

whatever it might mean, “it seems clear that a company which

provides guard or protective services does not thereby become a

‘quasi-military armed force,’ even if the individual guards are

armed.” 57 Comp. Gen. at 525. It follows that whether that

company also provides investigative or detective services is no

longer relevant. The first decision applying this new standard was

57 Comp. Gen. 480 (1978).

Prior to the Equifax decision, GAO had gone on record as favoring

repeal of the Anti-Pinkerton Act. See, e.g., 56 Comp. Gen. 225, 230

(1977). In light of the Equifax case and 57 Comp. Gen. 524, the

case for repeal is considerably lessened. The statute is no longer a

major impediment to legitimate guard service contracting, and

certainly most would agree that the government should not deal

with an organization that offers quasi-military armed forces for hire.

With the issuance of 57 Comp. Gen. 524 and 57 Comp. Gen. 480,

GAO reviewed the prior decisions under the Anti-Pinkerton Act and

designated them as either overruled or modified. If the result in the

earlier case would have remained the same under the new

standard, the decision was only “modified.” If the new standard

would have produced a different result, the earlier decision was

“overruled.” This is important because 57 Comp. Gen. 524 did not

simply throw out all of the old rules. What it did is eliminate the

“protective versus investigative” distinction and adopt the Equifax

standard as the definition of a proscribed entity. Thus, an

organization will no longer violate the Act by providing general

investigative services; it will violate the Act only if it “offers quasi-

military armed forces for hire.” 57 Comp. Gen. at 525. If a given

organization were found to offer quasi-military armed forces for

hire—an event which is viewed as unlikely although not

impossible—the rules in the earlier decisions would still be

applicable even though the decisions themselves have been

technically overruled or modified. Thus, the pre-1978 principles set

forth previously in this discussion remain applicable, but the focal

point is now whether the organization in question offers quasi-

military armed forces for hire, not merely whether it provides

general detective or investigative services. For purposes of guard

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service contracting, the burden of proof rests with the party alleging

the violation. E.g., B-216534, Jan. 22, 1985.

4. Insurance

a. The self-insurance rule

One frequently hears that the government is a self-insurer. This is

not completely true; there are many situations in which the

government buys or pays for insurance. Among the more well-

known examples are the Federal Employees’ Health Benefits

Program and Federal Employees’ Group Life Insurance. As another

example, the federal government is required by statute to pay half

of the costs incurred by “qualified employees” for professional

liability insurance. See Pub. L. No. 106-58, title VI, § 642(a), 113

Stat. 430, 477 (Sept. 29, 1999; B-300866, May 30, 2003. Also, the

government frequently pays for insurance indirectly through

contracts, grants, and leases. E.g., B-72120, Jan. 14, 1948

(lease).

187

However, the government is essentially a self-insurer in certain

important areas, primarily with respect to loss or damage to

government property, and the liability of government employees,

insofar as the government is legally responsible or would ultimately

bear the loss. The rule to be discussed in this section may be

stated thusly: In the absence of express statutory authority to the

contrary, appropriated funds are not available for the purchase of

insurance to cover loss or damage to government property or the

liability of government employees.

The rationale for the rule is aptly summarized in the following two

passages from two early Comptroller decisions:

187

See GAO, Extending the Government’s Policy of Self-Insurance in Certain Instances

Could Result in Great Savings, PSAD-75-105 (Washington, D.C.: Aug. 26, 1975); GAO,

Survey of the Application of the Government’s Policy on Self-Insurance, B-168106

(Washington, D.C.: June 14, 1972).

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“The basic principle of fire, tornado, or

other similar insurance is the lessening

of the burden of individual losses by

wider distribution thereof, and it is

difficult to conceive of a person,

corporation, or legal entity better

prepared to carry insurance or sustain a

loss than the United States

Government.”

19 Comp. Gen. 798, 800 (1940).

“The magnitude of [the government’s]

resources obviously makes it more

advantageous for the Government to

carry its own risks than to shift them to

private insurers at rates sufficient to

cover all losses, to pay their operating

expenses, including agency or broker’s

commissions, and to leave such

insurers a profit.”

19 Comp. Gen. 211, 214 (1939). The rule and its evolution are also

summarized in B-158766, Feb. 3, 1977.

The “self-insurance rule” dates back to the nineteenth century and

has been stated and applied in numerous decisions of the

Comptroller General and the Comptroller of the Treasury. In one

early decision, 13 Comp. Dec. 779 (1907), the question was

whether an appropriation for the education of natives in Alaska

could be used to buy insurance to cover desks en route to Alaska,

which had been purchased from that appropriation. The

Comptroller of the Treasury held that the insurance could not be

considered a necessary expense incident to accomplishing the

purpose of the appropriation unless it somehow operated either to

preserve and maintain the property for use, or to preserve the

appropriation that was used to buy it. It did not do the first because

insurance does not provide any added means to actually protect

the property (life insurance does not keep you alive), but merely

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transfers the risk of loss. Neither could it “preserve the

appropriation” because any recoveries would have to be deposited

into the general fund (miscellaneous receipts) of the Treasury.

Therefore the appropriation was not available to purchase the

insurance.

The following year, the Comptroller held that appropriations for the

construction and maintenance of target ranges for the National

Guard (then called “organized militias”) could not be used to insure

buildings acquired for use in target practice. 14 Comp. Dec. 836

(1908). The decision closely followed the reasoning of 13 Comp.

Dec. 779 in that the insurance would not actually protect the

property from loss, nor would it preserve the appropriation because

any proceeds could not be retained by the agency but would have

to be paid into the Treasury. Thus, the object of the appropriation

“can be as readily accomplished without insurance as with it.”

14 Comp. Dec. at 840.

Citing these and several other decisions, the Comptroller held

similarly in 23 Comp. Dec. 269 (1916) that an appropriation for the

construction and operation of a railroad in Alaska was not available

to pay premiums for insurance on buildings constructed as part of

the project.

A slightly different situation was presented in 24 Comp. Dec. 569

(1918). The Lincoln Farm Association had donated to the United

States a memorial hall enclosing the log cabin in which Abraham

Lincoln was born, together with a $50,000 endowment fund to

preserve and maintain the property. The question was whether the

fund could be used to buy fire insurance on the property. The

Comptroller noted that the funds were not appropriated funds in the

strict sense, but were nevertheless “government funds” in that legal

title was in the United States. Therefore, the self-insurance rule

applied. Recalling the reasoning of the earlier decisions, the

Comptroller apparently could not resist commenting “[i]t should be

remembered that fire insurance does not tend to protect or

preserve a building from fire.” Id. at 570.

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The Comptroller General continued to apply the rule. In a

1927 case, a contracting officer attempted to agree to indemnify a

contractor against loss or damage by casualty on buildings under

construction. Since the appropriation would not have been available

to insure the buildings directly, the contracting officer could not

agree to do so by contract. The stipulation to indemnify was held to

exceed the contracting officer’s authority and therefore imposed no

legal liability against the appropriation. 7 Comp. Gen. 105 (1927).

Boiler inspection insurance was found improper in 11 Comp.

Gen. 59 (1931).

A more recent decision applying the self-insurance rule is 55 Comp.

Gen. 1196 (1976). There, the National Aeronautics and Space

Administration (NASA) loaned certain property associated with the

Apollo Moon Mission to the Air Force for exhibition. As a condition

of the loan, NASA required the Air Force to purchase commercial

insurance against loss or damage to its property. The Comptroller

General found that the self-insurance rule applied to the loan of

property from one federal agency to another, and that commercial

coverage should not have been procured. Since the insurance had

already been purchased and had apparently been procured and

issued in good faith, the voucher could be paid. However, the

decision cautioned against similar purchases in the future. See also

B-237654, Feb. 21, 1991.

As noted at the outset, the self-insurance rule applies to tort liability

as well as property damage. This was established in a 1940

decision to the Federal Housing Administration, 19 Comp.

Gen. 798. In holding that insurance could not be procured against

possible tort liability, the Comptroller General noted that the self-

insurance rule “relates to the risk and not to the nature of the risk.”

Id. at 800. Since the 1946 enactment of the Federal Tort Claims

Act, now codified at 28 U.S.C. §§ 2671 et seq., the issue has

become largely moot. However, questions still arise concerning the

operation of motor vehicles, and these are discussed later in this

section. Conceptually related is 65 Comp. Gen. 790 (1986), holding

that an agency may not use its appropriations to insure against loss

or damage to employee-owned hand tools. If the agency wishes to

afford a measure of protection to employees who use their own

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tools, it may consider loss or damage claims under the Military

Personnel and Civilian Employees’ Claims Act of 1964, 31 U.S.C.

§ 3721. (This provision was amended in 1994 to permit agencies to

pay for losses sustained by government personnel forced to

evacuate a foreign country. Pub. L. No. 103-236, § 172, 108 Stat.

382 (Apr. 30, 1994).)

Another type of insurance which may not be paid for from

appropriated funds is flight insurance. If a federal employee

traveling by air on official business wishes to buy flight insurance, it

is considered a personal expense and not reimbursable. B-309715,

Sept. 25, 2007; 47 Comp. Gen. 319 (1967); 40 Comp. Gen. 11

(1960). Similarly nonreimbursable is trip cancellation insurance.

58 Comp. Gen. 710 (1979).

Insurance on household goods placed in storage incident to a

permanent change of duty station may not be reimbursed to the

employee unless the insurance is required by the storage company

as a condition of accepting the goods for storage or is otherwise

required by law. 28 Comp. Gen. 679 (1949).

Many of the decisions in this area include a statement to the effect

that the government’s practice of self-insurance “is one of policy

and not of positive law.” E.g., 21 Comp. Gen. 928, 931 (1942).

While the statement is true, as it has been carried from decision to

decision the word “positive” has occasionally been omitted and this

has caused some confusion. All the statement means is that the

rule is not mandated by statute, but has evolved administratively

from the policy considerations summarized above. See also

71 Comp. Gen. 4 (1991) (policy against using appropriated funds to

make permanent improvements to private property).

b. Exceptions to the rule

(1) Departments and agencies generally

Exceptions to the self-insurance rule may, of course, be authorized

by statute. The absence of an express prohibition on insurance is

not enough to authorize it; rather, specific statutory authority is

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required. 19 Comp. Gen. 798, 800 (1940); 14 Comp. Dec. 836, 839

(1908). Although legislation in this area has been minimal,

Congress has occasionally authorized the procurement of

insurance in some instances and prohibited it in others. By this

pattern, congressional recognition of the rule may be inferred.

Also, the existence of statutory authority to buy insurance does not

necessarily mean it has to be exercised. In one case, the

Comptroller General recommended against the purchase of

insurance although recognizing that it was statutorily authorized in

that instance. 19 Comp. Gen. 211 (1939).

Moreover, because the rule is not mandated by statute but rather

has evolved administratively from policy considerations, there are

nonstatutory exceptions in the limited number of cases where the

underlying policy considerations do not apply. The standards for

exception were summarized in B-151876, Apr. 24, 1964, as follows:

• where the economy sought by self-insurance would be

defeated;

• where sound business practice indicates that a savings can be

effected; or

• where services or benefits not otherwise available can be

obtained by purchasing insurance.

See also B-290162, Oct. 22, 2002; B-244473.2, May 13, 1993.

Two World War II-era cases provide early illustrations of this

approach. In B-35379, July 17, 1943, the procurement of airplane

hull insurance by the Civil Aeronautics Administration was

approved. It was determined that the Administration did not have in

its employ, and was unable at the time to recruit, the number of

qualified personnel that would be required to appraise damage and

arrange for and supervise immediate repairs in connection with the

War Training Service and that commercial insurance coverage

could provide such services. Also, in B-59941, Oct. 8, 1946, the

purchase of pressure vessel insurance including essential

inspection services from commercial sources was permissible

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because of the necessity and economy brought on by wartime

conditions.

In 37 Comp. Gen. 511 (1958), GAO considered a provision in a

shipbuilding contract which required the contractor to procure

builder’s risk insurance, including war risk insurance that was

obtainable mainly from the government. Under the contract, title

vested in the United States to the extent work was completed, but

the risk of loss remained in the shipbuilder until the completed

vessel was delivered to and accepted by the government. The

government would end up paying part of the premiums because

their cost was included in the bid price. GAO approved the

arrangement, finding that it did not improperly transfer the

contractor’s risk to the government.

A more recent example is provided in B-290162, Oct. 22, 2002. The

Architect of the Capitol asked whether appropriated funds could be

used for the purchase of “wrap-up” insurance for the construction of

the Capitol Visitor Center. Wrap-up insurance would cover both the

government’s risk and the risks of contractors, designers, and

consultants in constructing the Visitor Center. GAO held that wrap-

up insurance could be purchased if it were shown that purchasing

wrap-up insurance (1) is reasonably necessary or incident to the

construction of the Visitor Center, and (2) would otherwise satisfy

the standards for exception (discussed above), that is, the use of

wrap-up insurance would result in a savings or that a benefit, not

otherwise obtainable, would be gained through the use of wrap-up

insurance.

Exceptions may be based on the funding arrangement of a

particular agency or program. For example, the rule prohibiting the

purchase of insurance did not apply to the Panama Canal

Commission because the Commission operated on a self-

sustaining basis, deriving its operating funds from outside sources.

The vast resources available to the government, upon which the

self-insurance rule is founded, were not intended to be available to

the Commission. B-217769, July 6, 1987 (holding that the

Commission could purchase “full scope” catastrophic insurance

coverage if administratively determined to be necessary). Similarly,

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GAO held in B-287209, June 3, 2002, that the rule prohibiting the

purchase of insurance to cover loss of property or tort claims does

not apply to the District of Columbia, since the United States’

resources are not available to cover such loss sustained by the

District. The fact that an agency’s initial appropriation was placed in

an interest-earning trust fund was found not sufficient to warrant an

exception where the government’s resources were nevertheless

available to it. B-236022, Jan. 29, 1991 (John C. Stennis Center for

Public Service Training and Development).

The Comptroller General has held that the self-insurance rule does

not apply to privately owned property temporarily entrusted to the

government. 17 Comp. Gen. 55 (1937) (historical items loaned to

the government for exhibition purposes); 8 Comp. Gen. 19 (1928)

(corporate books and records produced by subpoena for a federal

grand jury); B-126535-O.M., Feb. 1, 1956 (airplane models loaned

by manufacturer). Compare 25 Comp. Dec. 358 (1918), disallowing

a claim for insurance premiums by West Publishing Company for

law books loaned to a federal employee, where correspondence

from the claimant made it clear that it was loaning the books to the

employee personally and not to the government.

However, insurance may be purchased on loaned private property

only where the owner requires insurance coverage as part of the

transaction. If the owner does not require insurance, private

insurance is not a necessary expense and the government should

self-insure. 63 Comp. Gen. 110 (1983) (works of art temporarily

loaned by the Corcoran Gallery to the President’s Commission on

Executive Exchange); 42 Comp. Gen. 392 (1963) (school

classrooms used for civil service examinations).

Foreign art treasures are frequently loaned to the United States for

exhibition purposes. While insurance may be purchased by virtue of

17 Comp. Gen. 55, its extremely high cost has been a disincentive.

To remedy this situation, Congress in 1975 passed the Arts and

Artifacts Indemnity Act, 20 U.S.C. §§ 971–977. This statute

authorizes the Federal Council on the Arts and Humanities to enter

into agreements to indemnify against loss or damage to works of

art and other materials while on exhibition under specified

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circumstances and within specified limits. Claims under the Act

require specific appropriations for payment, but the agreements are

backed by the full faith and credit of the United States. The Act

constitutes authority to incur obligations in advance of

appropriations and the agreements would therefore not violate the

Antideficiency Act. See B-115398.01, Apr. 19, 1977.

Since nonappropriated fund activities are, by definition, not

financed from public funds, they are not governed by the self-

insurance rule. Whether the rule should or should not be followed

would generally be within the discretion of the activity or its parent

agency. Thus, it is within the discretion of the Department of

Defense to establish the rule by regulation for its nonappropriated

fund activities. B-137896, Dec. 4, 1958.

Finally, it is important to keep in mind that the self-insurance rule is

aimed at insurance whose purpose is to protect the United States

from risk of financial loss. Applying the rule from this perspective,

GAO found that it would not preclude the Federal Bureau of

Investigation (FBI) from purchasing insurance in connection with

certain of its undercover operations. The objective in these

instances was not to protect the government against risk of loss,

but to maintain the security of the operation itself, for example, by

creating the appearance of normality for FBI-run undercover

proprietary corporations. Thus, the FBI could treat the expenditure

purely as a “necessary expense” question. B-204486, Jan. 19,

1982. For additional exceptions, see 59 Comp. Gen. 369 (1980)

and B-197583, Jan. 19, 1981.

(2) Government corporations

In an early case, the Comptroller of the Treasury indicated that the

self-insurance rule would not apply to a wholly-owned government

corporation, and suggested that it would generally take an act of

Congress to apply the prohibition to a corporation’s funds.

23 Comp. Dec. 297 (1916).

The Comptroller General followed this approach in 21 Comp.

Gen. 928 (1942), noting that the rule “has not been observed

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strictly in cases involving insurance of property of government

corporations.” Id. at 931. The decision held that, while the funds of

the Virgin Islands Company were subject to various statutory

restrictions on the use of public funds, they could be used to insure

the Company’s property.

The Federal Housing Administration is treated as a corporation for

many purposes, although it is not chartered as one. See 53 Comp.

Gen. 337 (1973). In 16 Comp. Gen. 453 (1936), the Comptroller

General held that the Administration could purchase hazard

insurance on acquired property based on a determination of

necessity, but in 19 Comp. Gen. 798 (1940), declined to extend that

ruling to cover insurance against possible tort liability. See also

55 Comp. Gen. 1321 (1976) (former Federal Home Loan Bank

Board, although technically not a corporation, could nevertheless

insure its new office building since Board’s authority to cover losses

by assessments against member banks made rationale of self-

insurance rule inapplicable).

c. Specific areas of concern

(1) Property owned by government contractors

The cases previously discussed in which insurance was prohibited

involved property to which the government held legal title.

Questions also arise concerning property to which the government

holds less than legal title, and property owned by government

contractors.

A contractor will normally procure a variety of insurance as a matter

of sound business practice. This may include hazard insurance on

its property, liability insurance, and workers’ compensation

insurance. The premiums are part of the contractor’s overhead and

will be reflected in its bid price. When this is done, the government

is paying at least a part of the insurance cost indirectly. Since the

risks covered are not the risks of the government, there is no

objection to this “indirect payment” nor, if administratively

determined to be necessary, to the inclusion of an insurance

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stipulation in the contract. 39 Comp. Gen. 793 (1960); 18 Comp.

Gen. 285, 298 (1938).

Similarly differentiating between the government’s risk and the

contractor’s risk, the Comptroller General has applied the self-

insurance rule where the government holds “equitable title” under a

lease-purchase agreement. 35 Comp. Gen. 393 (1956); 35 Comp.

Gen. 391 (1956). In both decisions, the Comptroller General held

that, although the government could reimburse the lessor for the

cost of insuring against its own (the lessor’s) risk, it could not

require the lessor to carry insurance for the benefit of the

government.

(2) Use of motor vehicles

As noted previously, the self-insurance rule applies to tort liability

as well as property damage. 19 Comp. Gen. 798 (1940). At

present, the Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq.,

provides the exclusive remedy for claims against the United States

resulting from the negligent operation of motor vehicles by

government employees within the scope of their employment. Thus,

insurance questions have become largely moot. Nevertheless, the

self-insurance rule has been involved in several situations involving

the operation of motor vehicles.

A 1966 decision, 45 Comp. Gen. 542, involved Internal Revenue

Service (IRS) employees classified as “high mileage drivers.” They

were assigned government-owned cars for official use and, when

warranted, could drive the cars home at the close of the workday so

that they could proceed directly to an assignment from home the

next morning. The Treasury Department asked whether IRS

appropriations were available to reimburse the employees for

having their commercial liability insurance extended to cover the

government vehicles. Applying the self-insurance rule, and noting

further that the travel would most likely be considered within the

scope of employment for purposes of the Federal Tort Claims Act,

the Comptroller General concluded that the funds could not be so

used. GAO similarly denied the claims of six Navy members for

reimbursement of extra collision insurance they purchased on

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rented trucks. They were authorized to rent trucks to perform their

official duties and were even directed to obtain extra collision

insurance. Nonetheless, GAO denied reimbursement because the

insurance had been purchased in violation of the then in force Joint

Federal Travel Regulation, vol. I, ¶ U3415-C2a, which prohibited

the purchase of optional extra collision insurance. B-256669,

Aug. 31, 1994. See also B-261141, Nov. 9, 1995.

In B-127343, Dec. 15, 1976, the Comptroller General concluded

that the Federal Tort Claims Act applied to Senate employees

operating Senate-owned vehicles within the scope of their

employment. Therefore, the purchase of commercial insurance

would be neither necessary nor desirable.

In 1972, the Veterans Administration (VA) asked whether it could

use its appropriations to provide liability insurance coverage for

disabled veteran patients being given VA-conducted driver training.

Since the trainees were not government employees, they would not

be covered by the Federal Tort Claims Act. Since the risk was not

that of the government, the self-insurance rule was not applicable.

Therefore, VA could procure the liability insurance upon

administrative determinations that (1) the driver training was a

necessary part of a given patient’s medical rehabilitation, and

(2) that the insurance coverage was necessary to its success.

B-175086, May 16, 1972.

The Federal Tort Claims Act does not apply to claims arising in

foreign countries and the rules are a bit different for driving

overseas. Originally, notwithstanding the non-availability of the

Federal Tort Claims Act, the Comptroller General had prohibited

the purchase of insurance for government-owned vehicles operated

in foreign countries. 39 Comp. Gen. 145 (1959). Instances of

specific statutory authority for the State Department and the

Foreign Agricultural Service were viewed as precluding insurance

in other situations without similar legislative sanction.

However, GAO reviewed and revised its position in 1976. In

55 Comp. Gen. 1343 (1976), the Comptroller General held that the

General Services Administration (GSA) could provide by regulation

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for the purchase of liability insurance on government-owned

vehicles operated regularly or intermittently in foreign countries,

where required by local law or necessitated by legal procedures

which could pose extreme difficulties in case of an accident (such

as arrest of the driver and/or impoundment of the vehicle). The

decision also concluded that GSA could amend its regulations to

permit reimbursement of federal employees for the cost of “trip

insurance” on both government-owned and privately owned

vehicles in foreign countries where liability insurance is a legal or

practical necessity. The decision was extended in 55 Comp.

Gen. 1397 (1976) to cover the cost of required insurance on

vehicles leased commercially in foreign countries on a long-term

basis.

Some confusion may result from the statement in 55 Comp.

Gen. 1343, 1347, that “39 Comp. Gen. 145 (1959), 19 Comp.

Gen. 798 (1940), and similar decisions” are overruled “to the extent

that they are inconsistent with this decision.” Since 39 Comp.

Gen. 145 prohibited insurance on government-owned vehicles in

foreign countries, it is properly viewed as overruled by 55 Comp.

Gen. 1343. However, 19 Comp. Gen. 798 and “similar decisions”

remain valid insofar as they assert the general applicability of the

self-insurance rule to tort liability and to motor vehicle usage in the

United States. They should be viewed as modified to the extent that

they no longer preclude purchase of insurance in the foreign

country situations dealt with in 55 Comp. Gen. 1343 and 55 Comp.

Gen. 1397.

(3) Losses in shipment

Early decisions had applied the self-insurance rule to the risk of

damage or loss of valuable government property while in shipment.

Thus, marine insurance could not be purchased for shipment of a

box of silverware. 4 Comp. Gen. 690 (1925). Nor could it be

purchased to cover shipment of $5,000 in silver dollars from San

Francisco to Samoa. 22 Comp. Dec. 674 (1916), aff’d upon

reconsideration, 23 Comp. Dec. 297 (1916).

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In 1937, Congress enacted the Government Losses in Shipment

Act, 40 U.S.C. §§ 721–729. The Act provides a fund for the

payment of claims resulting from the loss or damage in shipment of

government owned “valuables” as defined in the Act. The Act also

prohibits the purchase of insurance except as specifically

authorized by the Secretary of the Treasury. The Secretary may

give such an authorization when he finds the risk of loss in

shipment cannot adequately be guarded against by the facilities of

the United States or adequate replacement cannot be provided for.

See S. Rep. No. 75-738, at 5 (1937). If a given risk is beyond the

scope of the Act, for example, if the items in question are not within

the definition of “valuables” or if the particular movement does not

qualify as “shipment,” then the self-insurance rule and its

exceptions would still apply. See, e.g., 17 Comp. Gen. 419 (1937);

B-244473.2, May 13, 1993.

(4) Bonding of government personnel

Prior to 1972, the federal government frequently required the surety

bonding of officers and employees who handled money or other

valuables. In 1972, Congress enacted legislation, now found at

31 U.S.C. § 9302, to expressly prohibit the government from

requiring or obtaining surety bonds for its civilian employees or

military personnel in connection with the performance of their

official duties. The reasons for this legislation parallel the policy

considerations behind the self-insurance rule. Indeed, the objective

of the legislation was to substitute the principle of self-insurance for

the practice of obtaining surety bonds on federal employees where

the risk insured against is a loss of government funds or property.

188

56 Comp. Gen. 788, 790 (1977). Although 31 U.S.C. § 9302 does

not define “officer” or “employee,” the definitions in title 5 of the

United States Code are available for guidance. B-236022, Jan. 29,

1991.

188

GAO had recommended the legislation. See GAO, Review of Bonding Program for

Employees of the Federal Government, B-8201 (Washington, D.C.: Mar. 29, 1962);

B-8201, B-59149, Jan. 18, 1972 (bill comments).

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Under the former system, the surety bonds were for the protection

of the government, not the bonded employee. If a loss occurred

and the government collected on the bond, the surety could attempt

to recover against the individual employee. Thus, the elimination of

bonding in no way affects the personal liability of federal employees

and 31 U.S.C. § 9302 specifies this.

189

This principle has been

noted several times in connection with the liability of accountable

officers and the cases are cited in Chapter 9.

In 56 Comp. Gen. 788 (1977), the Comptroller General held that, by

virtue of 31 U.S.C. § 9302, the United States became a self-insurer

of restitution, reparation, and support moneys collected by

probation officers under court order. The decision noted that the

same result applied to litigation funds paid into the registry of the

court (funds paid into the registry by a litigant pending distribution

by the court to the successful party).

However, if an agency requires an employee to serve as a notary

public and state law requires bonding of notaries, the employee’s

expense in obtaining the surety bond may be reimbursed

notwithstanding 31 U.S.C. § 9302. The bond in such a situation is

neither required by nor obtained by the federal government. It is

required by the state and obtained by the employee. Also, the risk

involved is not one in which the United States is the insured.

B-185909, June 16, 1976.

Similarly, if a federal court designates a state court employee to

perform certain functions in connection with the arrest and

detention of federal offenders, 31 U.S.C. § 9302 does not preclude

the Administrative Office of the United States Courts from requiring

that the state employee be bonded since the statute applies only to

federal employees. 52 Comp. Gen. 549 (1973).

189

As discussed earlier in this chapter, a federal employee may purchase professional

liability insurance. The federal government is required to pay half the costs incurred by

“qualified employees” for such insurance. Pub. L. No. 106-58, title VI, § 642(a), 113 Stat.

430, 477 (Sept. 29, 1999).

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5. Meetings and conventions

It seems there are meetings on just about everything. Quite often

they can be very useful. They can also, at times, be expensive.

Various questions arise when considering whether appropriations

are available to pay for meeting-related expenses. First, an agency

must use Step 1 of the necessary expense analysis to determine

whether the meeting bears a logical relationship to the purpose of

the appropriation. Next, the agency must use Step 2, ensuring that

the expenditure it not prohibited by another law. This section will

discuss the relevant statutory provisions concerning the use of

appropriations for meetings. Some of these statutes permit the use

of appropriations for some meetings, while others prohibit the use

of appropriations for meetings under some circumstances. For

purposes of this discussion, the term “meeting” includes other

designations, such as conference, congress, convention, seminar,

symposium, and workshop; what the particular gathering is called is

irrelevant for fiscal purposes.

a. Historical background

To understand the law in this area, it is necessary to understand

several statutes, whose interrelationship is best seen by outlining

their statutory evolution. Listed in the order of their enactment, they

are:

• 5 U.S.C. § 5946, which generally prohibits the use of

appropriated funds for fees for an individual employee

membership in a society or association, and employee

expenses to attend meetings of a society or association;

• 31 U.S.C. § 1345, which bars the use of appropriated funds for

employee travel, transportation, and subsistence expenses for

a meeting, when the employee is not carrying out an official

duty;

• 5 U.S.C. § 4109, which permits agencies to use appropriated

funds for training and related expenses; and

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• 5 U.S.C. § 4110, which provides that an appropriation available

to pay for travel is also available for expenses of attendance at

meetings that concern the purpose for which the appropriation

was made.

Congress enacted the first piece of legislation under our

consideration in 1912. As relevant here, section 8 of the Act of

June 26, 1912, (Pub. L. No. 201, ch. 182, 37 Stat. 139, 184),

prohibited the payment, without specific statutory authority, of the

expenses of attendance of an individual at meetings or conventions

of members of a society or association. With exceptions to be noted

below, this statute is now found at 5 U.S.C. § 5946, and has

generally been viewed as applying to attendance by federal

employees at non-federally sponsored meetings. See, e.g.,

B-140912, Nov. 24, 1959.

GAO reviewed many early cases under the 1912 statute. For

example, since the prohibition is directed at meetings of a “society

or association,” other types of meetings were not covered. Thus,

the Federal Power Commission could, if determined to be in the

furtherance of authorized activities, send a representative to the

World Power Conference (in Basle, Switzerland) since it was not a

meeting of a “society or association.” 5 Comp. Gen. 834 (1926).

Similarly, the statute did not prohibit travel by U.S. Attorneys “to

attend a conference of attorneys not banded together into a society

or association, but called together for one meeting only for

conference in a matter bearing directly on their official duties.”

1 Comp. Gen. 546 (1922).

However, if a gathering was viewed as a meeting or convention of a

society or association, the expenses were consistently disallowed.

E.g., 16 Comp. Gen. 252 (1936); 5 Comp. Gen. 599 (1926), aff’d,

5 Comp. Gen. 746 (1926); 3 Comp. Gen. 883 (1924). GAO

provided that if they thought attendance would be in the interest of

the government, they should present the matter to Congress. E.g.,

5 Comp. Gen. at 747. In fact, Congress granted specific authority to

a number of agencies (for an example, see B-136324, Aug. 1,

1958), and later, as will be seen below, enacted general legislation

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that renders 5 U.S.C. § 5946, as it relates to attendance at

meetings, of very limited applicability.

The next congressional venture in this field was aimed primarily at

restricting the use of appropriated funds to pay expenses of

nongovernment persons at conventions. Public Resolution No. 2,

Congress, ch. 4, 49 Stat. 19 (Feb. 2, 1935). This statute, now

codified at 31 U.S.C. § 1345, provides in relevant part:

“Except as specifically provided by law,

an appropriation may not be used for

travel, transportation, and subsistence

expenses for a meeting. This section

does not prohibit—

“(1) an agency from paying the

expenses of an officer or employee of

the United States Government carrying

out an official duty; . . .”

Significantly, 31 U.S.C. § 1345 does not apply to government

employees in the discharge of official duties. Thus, as of 1935,

attendance by private parties at government expense was

prohibited by 31 U.S.C. § 1345 and attendance by government

employees was prohibited by the 1912 statute for meetings of a

society or association (regardless of the relationship to official

duties) and by 31 U.S.C. § 1345 (for other types of meetings unless

attendance was in the discharge of official duties).

The next relevant legislative action came in 1958, with two

provisions of the Government Employees Training Act, Pub. L.

No. 85-507, 72 Stat. 327 (July 7, 1958). Section 10 of the Act, now

at 5 U.S.C. § 4109, authorizes payment of certain expenses in

connection with authorized training. Section 19(b) of the Act, now at

5 U.S.C. § 4110, makes travel appropriations available for

expenses of attendance at meetings “which are concerned with the

functions or activities for which the appropriation is made or which

will contribute to improved conduct, supervision, or management of

the functions or activities.” When title 5 of the United States Code

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was recodified in 1966, qualifying language was added to 5 U.S.C.

§ 5946 to make it clear that the requirement for specific statutory

authority no longer applied to the extent payment was authorized

by 5 U.S.C. § 4109 or § 4110. See 38 Comp. Gen. 800 (1959)

(concluding that in most circumstances the Training Act repealed

5 U.S.C. § 5946 by implication).

b. Attendance at meetings: individuals other

than federal employees

The statute that is now 31 U.S.C. § 1345 was first enacted in 1935.

Pub. Res. no. 2, Feb. 2, 1935, 49 Stat. 19. The 1935 enactment

read as follows:

“Whereas numerous applications are

being received from various

organizations requesting lodging, food,

and transportation for the purpose of

holding conventions or meetings at

Washington and elsewhere; and

“Whereas the expenditure of

Government funds for such purposes is

against the policy of Congress:

Therefore . . . unless specifically

provided by law, no moneys from funds

appropriated for any purpose shall be

used for the purpose of lodging, feeding,

conveying, or furnishing transportation

to, any conventions or other form of

assemblage or gathering to be held in

the District of Columbia or elsewhere.

This section shall not be construed to

prohibit the payment of expenses of any

officer or employee of the Government

in the discharge of his official duties.”

Except for a June 1935 enactment that provided a limited exception

for the Secretary of Agriculture, Congress has never made a

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substantive amendment to the original 1935 enactment.

190

Congress did, however, enact this provision into positive law in

1982. See generally Office of the Law Revision Counsel, Positive

Law Codification, available at

uscode.house.gov/codification/legislation.shtml (last visited July 18,

2017). Positive law codification results in a restated law that is

intended to conform to the policy, intent, and purpose of Congress

in the original enactment. Id. The codified provision restates

existing law and may not be construed as making a substantive

change in the law replaced. Pub. L. No. 97-258, § 4(b),

96 Stat. 877, 1067 (Sept. 13, 1982). The restated provision,

31 U.S.C. § 1345, made a few changes; one change we will

discuss later is of the phrase “conventions or other form of

assemblage or gathering” to the single word “meeting”.

GAO first issued a decision on this provision shortly after its

enactment. In 1935, the Federal Housing Administration (FHA)

asked whether the provision that is now 31 U.S.C. § 1345 barred it

from paying to transport citizens from various local communities to

FHA meetings. The citizens served without pay as chairmen of

committees that promoted a campaign to repair and modernize real

estate under the National Housing Act. FHA stated that “[i]n view of

the fact that these men are serving without pay and purely in the

public interest, it is thought that they should not be asked to defray

their traveling and hotel expenses while attending these meetings.”

14 Comp. Gen. 638, 639 (1935).

190

Congress may enact specific statutory authority exempting agencies from the

prohibition of 31 U.S.C. § 1345. An example of such authority is language in an

appropriation act making the sums available for “expenses of attendance at meetings,” or

similar language. 72 Comp. Gen. 146 (1993); 34 Comp. Gen. 321 (1955); 24 Comp.

Gen. 86 (1944); 17 Comp. Gen. 838 (1938); 16 Comp. Gen. 839 (1937); B-117137,

Sept. 25, 1953. (This is the same language used before enactment of the Government

Employees Training Act to grant exceptions from 5 U.S.C. § 5946.) Some agencies have

permanent authority. See 31 U.S.C. § 326(a) (Treasury Department, construed in

37 Comp. Gen. 708 (1958)); 31 U.S.C. § 1345(2) (concerning meetings of 4-H Clubs,

noted in B-166506, July 15, 1975).

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FHA noted that the member of Congress who offered the provision

was concerned primarily with “organizations of all character all over

the United States [who seek] to come [to Washington, D.C.] at the

expense of the Government.” 79 Cong. Rec. 710 (Jan. 21, 1935).

Indeed, the preamble to the measure states that the legislation was

intended to prevent providing funding to “various organizations

requesting lodging, food, and transportation for the purpose of

holding conventions or meetings at Washington and elsewhere.”

49 Stat. 19. Thus, FHA intimated that perhaps the provision should

not apply to its proposed meetings, as they did not feature private

groups who were seeking to hold a meeting at government

expense. Rather, FHA’s meetings were organized entirely by the

agency and for its benefit.

GAO concluded, however, that 31 U.S.C. § 1345 restrained FHA’s

use of its appropriation for the meetings. 14 Comp. Gen. 638

(1935). In decisions spanning the next few decades, GAO

continued to conclude that appropriations were not available to

transport, feed, or lodge attendees at any convention or other

assemblage or gathering, unless the person at issue was a federal

officer or employee carrying out official business. See, e.g.,

14 Comp. Gen. 851 (1935); B-166506, July 15, 1975, aff’d,

55 Comp. Gen. 750 (1976); B-193644, July 2, 1979; B-168627,

May 26, 1970; B-176806-O.M., Sept. 18, 1972; 62 Comp. Gen. 531

(1983).

The original statutory prohibition barred the use of appropriations

for expenses related to “any conventions or other form of

assemblage or gathering.” 49 Stat. 19 (Feb. 2, 1935). However,

when Congress enacted title 31 into positive law, it substituted the

word “meeting” for the previously quoted phrase. GAO noted this

change of phrasing in 1993 when it considered whether a job fair

and job interviews fell within the scope of the prohibition of

31 U.S.C. § 1345. The Department of Defense (DoD) was scaling

down its overseas forces and would need to subject many of its

teachers at the DoD Dependent Schools to reductions in force or

early retirement. DoD sought to pay for the travel and lodging costs

of public school recruiters who would attend a job fair to recruit DoD

teachers. DoD estimated that the job fair would pay for itself if a

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single teacher who was otherwise eligible for a $25,000 early

retirement incentive instead accepted another job offered by a

recruiter. 72 Comp. Gen. 229, 230 (1993).

GAO noted that the original language of the prohibition barred

“conventions or other form of assemblage or gathering” and that,

out of context, the word “meeting” might be interpreted more

broadly than the former phrase. The decision concluded that the job

fairs and interviews at issue were not “the type of ‘meeting’ the

statute was intended to reach.” 72 Comp. Gen. at 230 (1993). In

another, similar case, GAO concluded that Job Corps could pay to

transport guests who were to provide “social and recreational

services” to Job Corps enrollees. The encounters at issue were not

the sort of “convention[] or other form of assemblage or gathering”

that fell within the ambit of the prohibition. 45 Comp. Gen. 166

(1966).

In 2005, a certifying officer at the National Institutes of Health (NIH)

asked whether the agency could use appropriations to provide

meals and light refreshments to federal and nonfederal attendees

and presenters at an NIH conference.

191

B-300826, Mar. 3, 2005.

In a nod to FHA’s reasoning in 1935 in 14 Comp. Gen. 638, the NIH

decision states that 31 U.S.C. § 1345 “has limited application,

addressing only those conventions and other forms of assemblages

or gatherings that private organizations seek to hold at government

expense.” B-300826, at 7 n. 5. Therefore, 31 U.S.C. § 1345 did not

bar NIH from serving food to non-federal attendees at an NIH

formal conference. The decision emphasized that “[b]ecause

hosting this conference is reasonably related to NIH’s statutory

responsibilities and serves to advance its statutory mission, NIH is

not barred by the prohibition of 31 U.S.C. § 1345 from providing

food.” B-300826, at 7 n.5.

Three years after the NIH decision, GAO again addressed the

applicability of the prohibition of 31 U.S.C. § 1345. B-310023,

191

We discuss most of the reasoning in this decision in section C. 5. f..

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Apr. 17, 2008. A district of the U.S. Forest Service asked whether

its appropriations were available to pay for light refreshments for

nongovernmental attendees of an annual event aimed at

introducing people to the benefits of trails. The district wished to

provide snacks that would be appropriate as event attendees went

hiking. GAO concluded that appropriations were not available for

the food; we discuss this reasoning further in section C.5.l above.

Regarding 31 U.S.C. § 1345 specifically, GAO emphasized that

“The use of the words ‘travel,

transportation, and subsistence’ in

section 1345 indicates Congress’s

desire to curb those costs incident to

someone in government travel. Where,

as here, no one is in travel status, we

need not even reach the question of

whether [the event] is a ‘meeting’ within

the meaning of section 1345.”

B-310023, at 5. Therefore, a threshold question is whether

government travel is involved.

The Office of Legal Counsel (OLC) in the Department of Justice

has opined on the scope of 31 U.S.C. § 1345. In OLC’s view, “the

statute is not limited to meetings for which outside organizations

request funds.” Use of Appropriations to Pay Travel Expenses of

International Trade Administration Fellows, 28 Op. Off. Legal

Counsel 269, 275. (2004). About three years later, OLC noted that

under its interpretation, 31 U.S.C. § 1345 applies in more instances

than it does under GAO’s interpretation. 31 Op. Off. Legal

Counsel 54, 55-56 (2007). In the decision concerning the Forest

Service, which was issued about a year after the second of the two

OLC opinions, GAO mentioned OLC’s views and stated that “we

read section 1345 more narrowly, consistent with Congress’ original

intent.” B-310023, at 4 n. 2.

In summary, 31 U.S.C. §1345 may bar use of appropriations for a

particular meeting if all of the following three tests are true:

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1. There is a “meeting” as that word is used in 31 U.S.C. § 1345.

Not every occasion involving an encounter between two or more

people is a “meeting”; recall that the original version of the

statue applied to “conventions or other form of assemblage or

gathering.” Consider the analysis in 72 Comp. Gen. 229 (1993)

and 45 Comp. Gen. 476 (1966).

2. The meeting is one a private organization seeks to hold at

government expense. B-300826, Mar. 3, 2005.

3. The costs at issue are incident to someone in government

travel. B-310023, Apr. 17, 2008.

However, 31 U.S.C. § 1345 does not prohibit a particular expense if

either of the following is true:

4. Congress has made a specific exception by law. 72 Comp.

Gen. 146 (1993).

5. The expenses are those of an officer or employee of the United

States Government carrying out an official duty. 31 U.S.C.

§ 1345(1).

c. Use of grant funds

One of the principles of the laws governing federal grants is that,

where a grant is made for an authorized grant purpose, the grant

funds in the hands of the grantee are not subject, generally, to

many of the restrictions applicable to the direct expenditure of

appropriations, unless there is a special condition of the grant to the

contrary. B-153417, Feb. 17, 1964. One of those restrictions which

does not apply to grant funds in the hands of a grantee is 31 U.S.C.

§ 1345.

For example, the American Law Institute could use funds provided

by the Environmental Protection Agency in the form of a statutorily

authorized training grant to defray transportation and subsistence

expenses of law students and practicing environmental lawyers at

an environmental law seminar. 55 Comp. Gen. 750 (1976). For this

result to apply, the grant must be made for an authorized grant

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purpose and there must be no provision to the contrary in the grant

agreement. Once these conditions are met, the grantee’s use of the

funds is not impaired by 31 U.S.C. § 1345. However, an agency

may not use the grant mechanism for the sole purpose of

circumventing 31 U.S.C. § 1345, that is, to do indirectly that which it

could not do directly. In other words, if an agency makes a grant for

an authorized purpose, and the grantee sponsors a meeting or

conference as a means of implementing that purpose, the grantee’s

use of the funds will not be restrained by 31 U.S.C. § 1345.

However, unless otherwise authorized, the agency could not make

the grant for the purpose of sponsoring the conference and thereby

permitting payments it could not make by direct expenditure.

Depending on the precise statutory authority involved, there may be

situations in which sponsoring or helping to sponsor a conference

is, itself, an authorized grant purpose. One example is B-83261,

Feb. 10, 1949 (grant to American Cancer Society under Public

Health Service Act).

The treatment of grant funds described above does not apply to

procurement contracts. 62 Comp. Gen. 531 (1983). See also

B-262110, Mar. 19, 1997.

d. Attendance at meetings: federal

employees

Appropriations are available to pay the cost of an employee’s

attendance at a meeting only if the officer or employee is carrying

out an official duty. Furthermore, the meeting must (1) be part of an

authorized training function; (2) be concerned with the functions or

activities for which the appropriation is made; or (3) contribute to

improved conduct, supervision, or management of the functions or

activities. An interlocking labyrinth of statutes leads to this simple

rule. We will explain the derivation of each segment of this rule.

The first segment of this rule, which is that the officer or employee

must be carrying out an official duty, derives from 31 U.S.C.

§ 1345, under which “[e]xcept as specifically provided by law, an

appropriation may not be used for travel, transportation, and

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subsistence expenses for a meeting.” However, 31 U.S.C. § 1345

does not bar expenses for attendance at a meeting by “an officer or

employee of the United States Government carrying out an official

duty.” E.g., 27 Comp. Gen. 627 (1948); 26 Comp. Gen. 53 (1946);

22 Comp. Gen. 315 (1942); B-117137, Sept. 25, 1953; B-87691,

Aug. 2, 1949; B-80621, Oct. 8, 1948; B-77404, June 29, 1948;

B-77613, June 23, 1948; B-13888, Dec. 10, 1940.

192

The next segment of this rule is a three-part test; for meeting

expenses to be an acceptable use of appropriations, the meeting

must meet at least one of these three elements. The meeting must

either be part of an authorized training function, or it must be

concerned with the functions or activities for which the

appropriation is made, or it must contribute to the improved

conduct, supervision, or management of the functions or activities.

5 U.S.C. § 4109 authorizes use of appropriations for training, while

5 U.S.C. § 4110 authorizes payment for expenses of the latter two

categories.

For practical purposes, 5 U.S.C. § 5946 has no impact on whether

appropriations are available for attendance of agency employees at

meetings. This statute, first enacted in 1912, barred the use of

appropriations for “expenses of attendance of an individual at

meetings or conventions of members of a society or association.”

The Government Employees Training Act, which contained the

provisions now codified at 5 U.S.C. §§ 4109 and 4110, was

enacted decades later, in 1958. A year after enactment, GAO

concluded that in most circumstances the Training Act repealed

5 U.S.C. § 5946(2) by implication:

192

All of these cases also involve the pre-Government Employees Training Act version of

5 U.S.C. § 5946 and may no longer be valid to that extent. The editors have made no

attempt to examine each of the cases from this perspective. Thus, while the pre-1958

cases remain valid to the limited extent that they involve 31 U.S.C. § 1345, the results in

those cases may no longer apply in view of the subsequent enactment of 5 U.S.C.

§§ 4109 and 4110.

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“Although the training act does not

repeal or modify [5 U.S.C. § 5946(2)] in

specific terms, it is manifest that the

intention of the Congress was to remove

the restrictive provisions relating to

attendance at meetings of that section

with regard to the agencies and

personnel covered by the training act.

Continued application of those

provisions to agencies and personnel

covered by the act would ignore

recognition by the Congress that

general authority for attendance at

meetings was necessary to the

attainment of the objectives for which

the training legislation was enacted.

Therefore . . . the restriction against

attendance at meetings contained in

[5 U.S.C. § 5946(2)] is inapplicable so

far as agencies and personnel covered

by the Government Employees Training

Act are concerned and . . . for those

agencies and personnel, [5 U.S.C.

§ 4110] dispenses with the necessity for

specific appropriation provisions

authorizing attendance at meetings.”

38 Comp. Gen. 800 (1959). Indeed, when Title 5 of the United

States Code was enacted into positive law in 1966, qualifying

language was added to 5 U.S.C. § 5946 to explicitly indicate that its

provisions applied “[e]xcept as authorized . . . by sections 4109 and

4110 of this title.” See also B-202028, May 14, 1981 (although

5 U.S.C. § 5946 bars use of appropriations for membership dues in

a society or association, it does not apply for expenses of employee

attendance at a meeting of a society or association pursuant to the

employee’s official functions).

Cases applying these statutes include:

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• The Labor Department could use its Salaries and Expenses

appropriation to pay the attendance fees of its Director of

Personnel at a conference of the American Society of Training

Directors, since the meeting qualified under the broad authority

of 5 U.S.C. § 4110. 38 Comp. Gen. 26 (1958).

• Appropriations not available to reimburse employee for cost of

attendance at a meeting of an association where attendance

was not essential to the work of the agency and the meeting

was concerned solely with the administrative and management

affairs of the association. B-166560, May 27, 1969.

• The expenses of attendance may not be paid if the employing

agency refuses to authorize attendance, even if authorization

would have been permissible under the statute.

193

B-164372,

June 12, 1968.

• Where attendance is authorized, the fact that the sponsor is a

profit-making organization is immaterial. B-161777, July 11,

1967.

Federally sponsored meetings for employees (intra-agency or

interagency), such as management or planning seminars, are not

prohibited by 5 U.S.C. § 5946, since they are not meetings of a

“society or association,” nor are they prohibited by 31 U.S.C.

§ 1345 because they concern the discharge of official duties. The

authority for this type of meeting is essentially a “necessary

expense” question.

Occasionally, agencies have conducted “retreat” or “offsite”

meetings. In this situation, an authorized agency official determines

that the participants should get away from their normal work

environment and its associated interruptions. Sometimes it seems

193

This was an odd case. An employee wanted to attend a conference in Tokyo, Japan.

The agency refused authorization because the employee had announced his intention to

resign after the conference. The employee went anyway, and filed a claim for his

expenses. GAO said no.

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that the retreat location is just far enough away to justify the

payment of per diem allowances. While this type of meeting may be

criticized as extravagant, it is within the agency’s administrative

discretion under the necessary expense rule, and therefore not

impermissible. See B-193137, July 23, 1979. Of course, such a

meeting must also comport with other laws generally and

appropriations law principles specifically.

194

For example, an

agency may not pay for food at an “offsite” or “retreat” meeting

unless one of the limited exceptions that we discuss in section C.5

above applies. For an example of an offsite meeting that was both

extravagant and that apparently violated many laws, see Office of

Inspector General, U.S. General Services Administration,

Management Deficiency Report: General Services Administration,

Public Buildings Service, 2010 Western Regions Conference,

Apr. 2, 2012, available at www.gsaig.gov/news/western-regions-

conference-management-deficiency-report (last visited Aug. 7,

2017).

Agency meetings at or near the participant’s normal duty station

may present special problems with respect to reimbursement for

meals. In many cases, meals or snacks will be unauthorized, even

though there is nothing improper about conducting the meeting

itself. This area is discussed in detail in section C.5.e above.

Finally, a strict reading of these statutes might suggest that if

neither 5 U.S.C. § 4109 nor 5 U.S.C. § 4110 authorizes attendance

at a meeting, then 5 U.S.C. § 5946 would apply and would still bar

the use of appropriations for expenses of attendance at a meeting

or convention of members of a society or association. However, if

neither § 4109 nor § 4110 authorizes payment for the expenses of

attendance, then it is already clear that the meeting not only is not

authorized training but, in addition, has no relationship to agency

functions or management. Under the necessary expense rule,

194

OMB and GSA issue guidance from time to time on the propriety of engaging in, and

the process to execute, such meetings. The astute executive branch employee will review

currently applicable guidance.

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appropriations are not available for expenses that bear no

relationship to the purpose of an appropriation. Therefore, if neither

5 U.S.C. § 4109 nor § 4110 authorizes attendance at a meeting,

then appropriations are not available to pay for expenses of

attendance, regardless of whether the meeting is one of a society

or association under 5 U.S.C. § 5946.

e. Attendance at meetings: military

personnel

Attendance at meetings by military personnel is governed by

37 U.S.C. § 455:

“Appropriations of the Department of

Defense that are available for travel may

not, without the approval of the

Secretary concerned or his designee, be

used for expenses incident to

attendance of a member of an armed

force under that department at a

meeting of a technical, scientific,

professional, or similar organization.”

195

This statute, designed to provide a broad exception for the Defense

Department from 5 U.S.C. § 5946, originated as an appropriation

act rider in the mid-1940s and was enacted as permanent

legislation by section 605 of the Department of Defense

Appropriation Act for 1954, Pub. L. 83-179, 67 Stat. 349 (Aug. 1,

1953).

The Government Employees Training Act, enacted in 1958 and

discussed above, applies to civilian employees of the military

departments, but not to members of the uniformed services.

38 Comp. Gen. 312 (1958). Accordingly, the administrative

approval specified in 37 U.S.C. § 455 was no longer required for

195

This provision was previously designated as 37 U.S.C. § 412.

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civilian employees covered by the Government Employees Training

Act. However, the requirement of 37 U.S.C. § 455 remains

applicable to members of the uniformed services. 38 Comp.

Gen. 800 (1959). See also 55 Comp. Gen. 1332, 1335 (1976). The

recodification of title 37 of the United States Code in 1962

recognized this distinction and reworded the statute to its present

form so as to apply only to members of the armed forces.

The administrative approval required by the statute is a prerequisite

to the availability of the appropriation, and has the effect of

removing the appropriation from the prohibition of 5 U.S.C. § 5946

to the extent of such approval. 34 Comp. Gen. 573, 575 (1955).

Oral approval, if satisfactorily established by the record, is sufficient

to meet the requirement of the statute. B-140082, Aug. 19, 1959.

However, where implementing departmental regulations establish

more stringent requirements, such as advance approval in writing,

the regulations will control. B-139173, June 2, 1959.

The administrative approval requirement of 37 U.S.C. § 455 does

not apply to meetings sponsored by a federal department or

agency. 50 Comp. Gen. 527 (1971).

f. Invitational travel

Another statute worth noting is 5 U.S.C. § 5703, which provides:

“An employee serving intermittently in

the Government service as an expert or

consultant . . . or serving without pay or

at $1 a year, may be allowed travel or

transportation expenses, under this

subchapter, while away from his home

or regular place of business and at the

place of employment or service.”

This statute originated as an appropriation act rider in 1945 and

was enacted as permanent legislation the following year as

section 5 of the Administrative Expenses Act of 1946, Pub. L.

No. 600, ch. 744, 60 Stat. 806, 808 (Aug. 2, 1946). To the extent it

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authorizes payment in the so-called “invitational travel” situation—a

private party called upon by the government to confer or advise on

government business—it represents a limited exception to

31 U.S.C. § 1345.

Before 31 U.S.C. § 1345 and 5 U.S.C. § 5703 were enacted, GAO

had recognized that a private individual “invited” by the government

to confer on official business was entitled to reimbursement of

travel expenses if specified in the request and justified as a

necessary expense. 8 Comp. Gen. 465 (1929); 4 Comp. Gen. 281

(1924); A-41751, Apr. 15, 1932.

The enactment of 31 U.S.C. § 1345 in 1935 did not change this.

Thus, the Comptroller General recognized that while the statute

might prohibit the payment of expenses of private individuals called

together as a group, it would not apply to “individuals called to

Washington or elsewhere for consultation as individuals.” 15 Comp.

Gen. 91, 92 (1935). See also A-81080, Oct. 27, 1936. Viewed in

this light, the 1946 enactment of 5 U.S.C. § 5703 in large measure

merely gave express congressional sanction to a rule that had

already developed in the decisions.

GAO did not directly address the relationship between 5 U.S.C.

§ 5703 and 31 U.S.C. § 1345 until 1976. 55 Comp. Gen. 750

(1976) (discussed below). However, the relevant principles were

established in several earlier cases. In one of GAO’s earliest

decisions under 5 U.S.C. § 5703, the Comptroller General held that

persons who are not government officers or employees may, “when

requested by a proper officer to travel for the purpose of conferring

upon official Government matters,” be regarded as persons serving

without pay and therefore entitled to travel expenses under

5 U.S.C. § 5703. 27 Comp. Gen. 183, 184 (1947). See also

39 Comp. Gen. 55 (1959). Thus, the rule of 8 Comp. Gen. 465 now

had a statutory basis. A critical prerequisite is this: in order to

qualify under 5 U.S.C. § 5703, the individual must be performing a

direct service for the government. 37 Comp. Gen. 349 (1957).

Once the proposition of 27 Comp. Gen. 183 is accepted, it is but a

short step to recognizing that a private individual called upon to

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advise on government business may be called upon to do so in the

form of making a presentation at a meeting or conference. See, for

example, B-111310, Sept. 4, 1952, and 33 Comp. Gen. 39 (1953),

in which payment under 5 U.S.C. § 5703 was authorized. The

statute could not reasonably be limited to “one-on-one”

consultations:

“It is not unusual for the Government to

invite an individual with a particular

expertise to attend a meeting and to

share the benefit of his views without

compensation other than by way of

reimbursement for his travel and

transportation expenses.”

B-196088, Nov. 1, 1979. Thus, travel expenses of private

individuals “invited” to participate in meetings sponsored by the

National Center for Productivity and Quality of Working Life were

properly paid under 5 U.S.C. § 5703. B-192734, Nov. 24, 1978.

Similarly, the Internal Revenue Service could invoke 5 U.S.C.

§ 5703 to buy lunches for guest speakers invited to participate in a

ceremony observing National Black History Month since the

ceremony was an authorized part of the agency’s formal program to

advance equal opportunity objectives. 60 Comp. Gen. 303 (1981).

There is a limit to this rationale and a point at which 5 U.S.C.

§ 5703 collides with 31 U.S.C. § 1345. This point was discussed in

55 Comp. Gen. 750, supra, and reiterated in B-193644, July 2,

1979. In 1976, 55 Comp. Gen. 750 affirmed B-166506, July 15,

1975, and held that 31 U.S.C. § 1345 prohibited the Environmental

Protection Agency from paying travel and lodging expenses of state

officials at a solid waste management convention; B-193644

reached the same result for safety and training seminars for miners

and mine operators. In both cases, the Comptroller General

rejected the suggestion that the expenses could somehow be

authorized under the “invitational travel” statute. In neither case

were the attendees providing a direct service for the government,

even though in both cases the government may have derived some

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incidental benefit in terms of enhancement of program objectives.

The following passage illustrates the “collision point:”

“We thus do not believe that [5 U.S.C.

§ 5703] was ever intended to establish

the proposition that anyone may be

deemed a person serving without

compensation merely because he or

she is attending a meeting or

convention, the subject matter of which

is related to the official business of

some Federal department or

agency. . . . We believe that being called

upon to confer with agency staff on

official business is different from

attending a meeting or convention in

which a department or agency is also

interested.”

55 Comp. Gen. at 752–53. Thus, 5 U.S.C. § 5703 permits an

agency to invite a private individual (or individuals) to a meeting or

conference at government expense, if that individual is legitimately

performing a direct service for the government such as making a

presentation or advising in an area of expertise. Invitational travel

also encompasses private individuals whose travel is a necessary

incident to the service which provides a direct benefit to the

government. B-259620, Feb. 29, 1996 (cross-cultural training for

spouses of Federal Aviation Administration employees living

abroad directly benefits the agency). See also 71 Comp. Gen. 9

(1991); 71 Comp. Gen. 6 (1991).

However, 5 U.S.C. § 5703 is not a device for circumventing

31 U.S.C. § 1345. The “direct service” test is not met merely

because the agency is interested in the subject matter of the

conference or because the conference will enhance the agency’s

program objectives. See B-251921, Apr. 14, 1993 (the

Environmental Protection Agency (EPA) cannot pay for participants

who are not federal employees to attend a United Nations-

sponsored conference on women’s contributions to solving

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environmental problems because EPA does not benefit directly

from their attendance). In a somewhat unique set of circumstances,

however, GAO held that the invitational travel statute permits a

private individual, appointed by the government, to travel to

participate in a state conference at government expense if the

information imparted by the conference provides a direct service to

the government. See B-260896, Oct. 17, 1996 (DOD may pay for

nongovernment school board members appointed by DOD

pursuant to 20 U.S.C. § 241(h) (authorizing assistance for local

education agencies in areas affected by federal agencies, since

repealed) to travel to participate in state school board conferences

and workshops because the knowledge and information derived

from participation provides a direct service for the government).

g. Rental of meeting space in District of

Columbia

Originally enacted in 1877 (Act of March 3, 1877, ch. 106, 19 Stat.

363, 370), 40 U.S.C. § 8141 now provides:

“A contract shall not be made for the

rent of a building, or part of a building, to

be used for the purposes of the Federal

Government in the District of Columbia

until Congress enacts an appropriation

for the rent. This section is deemed to

be notice to all contractors or lessors of

the building or a part of a building.”

In 1949, the Federal Property and Administrative Services Act

granted broad leasing authority to the General Services

Administration (GSA). 40 U.S.C. § 585. GAO has found that

40 U.S.C. § 8141 is satisfied where GSA arranges for the rental

space or delegates authority to the renting agency. B-159633,

May 20, 1974.

The statute does not prohibit the procurement of short-term

conference facilities, if otherwise proper. 54 Comp. Gen. 1055

(1975) (construing the procurement of short-term conference

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facilities as a service contract rather than a rental contract).

However, the statute does prohibit the procurement of lodging

accommodations in the District of Columbia in connection with a

meeting or conference, without specific statutory authority.

56 Comp. Gen. 572 (1977), modified and aff’d, B-159633, Sept. 10,

1974; 49 Comp. Gen. 305 (1969).

196

See Chapter 13, Real

Property, for additional information and case law.

6. Membership fees: 5 U.S.C. § 5946

Appropriated funds may not be used to pay membership fees of an

employee of the United States or the District of Columbia in a

society or association. 5 U.S.C. § 5946. The prohibition does not

apply if an appropriation is expressly available for that purpose, or if

the fee is authorized under the Government Employees Training

Act. Under the Training Act, membership fees may be paid if the

fee is a necessary cost directly related to the training or a condition

precedent to undergoing the training. 5 U.S.C. § 4109(b).

197

The rule that has evolved under 5 U.S.C. § 5946 is that

membership fees for individuals may not be paid, regardless of the

resulting benefit to the agency. An agency may, however, purchase

a membership in its own name upon an administrative

determination that the expenditure would further the authorized

196

One of the decisions listed here, 49 Comp. Gen. 305, was identified in 54 Comp.

Gen. 1055 as overruled. However, the overruling action was later recognized to be

erroneous and 49 Comp. Gen. 305 was reinstated in 56 Comp. Gen. 572.

197

The District of Columbia has specifically exempted its employees from the provisions

of 5 U.S.C. § 5946 as well as the Government Employees Training Act, 5 U.S.C. ch. 41.

See D.C. Official Code, 2016 ed. § 1-632.02.

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activities of the agency, and this determination is not affected by

any incidental benefits that may accrue to individual employees.

198

In 24 Comp. Gen. 814 (1945), the Veterans Administration (VA)

asked whether it could pay membership fees for VA facilities in the

American Hospital Association. Facility membership would enable

individual employees to apply for personal membership at reduced

rates. The Comptroller General responded that the facility

memberships were permissible if administratively determined

necessary to accomplish the objectives of the appropriation to be

charged. The indirect benefit to individual officials would not

operate to invalidate the agency membership. However, the

expenditure would be improper if its purpose was merely to enable

the officials to obtain the reduced rates for personal memberships.

VA could not, of course, pay for the individual memberships.

Similarly, GAO advised the Environmental Protection Agency (EPA)

that it could not pay the membership fees for its employees in

professional organizations (such as the National Environment

Research Center and the National Solid Waste Management

Association), notwithstanding the allegation that the benefits of

membership would accrue more to the agency than to the

individuals. EPA could, however, purchase a membership in its own

name if it justified the expenditure as being of direct benefit to the

agency and sufficiently related to carrying out the purposes of its

appropriation.

199

53 Comp. Gen. 429 (1973).

In another 1973 decision, the Comptroller General held that the

Justice Department could not reimburse an electronics engineer

198

A few very early decisions will be found to the effect that 5 U.S.C. § 5946 prohibits

agency memberships as well as individual memberships. E.g., 19 Comp. Gen. 838 (1940);

24 Comp. Dec. 473 (1918). While these decisions do not appear to have been explicitly

overruled or modified, they must be regarded as implicitly repudiated by the subsequent

body of case law to the extent they purport to prohibit adequately justified agency

memberships.

199

The last sentence of the decision uses the term “essential.” This word is too strong.

The necessary expense doctrine does not require that an expenditure be “essential.”

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employed by the Bureau of Narcotics and Dangerous Drugs for

membership in the Institute of Electrical and Electronic Engineers.

The Justice Department had argued that the government benefited

from the membership by virtue of reduced subscription rates to

Institute publications and because the membership contributed to

employee development. These factors were not sufficient to

overcome the prohibition of 5 U.S.C. § 5946. Once again, GAO

pointed out that the Bureau could become a member of the Institute

in its own name if membership was administratively determined to

be necessary. 52 Comp. Gen. 495 (1973). To the same effect is

B-205768, Mar. 2, 1982 (Federal Mediation and Conciliation

Service can purchase agency membership in Association of Labor

Related Agencies upon making appropriate administrative

determinations).

In another case, the Comptroller General held that the National

Oceanic and Atmospheric Administration could not pay the

membership fee of one of its employees in Federally Employed

Women, Inc., notwithstanding the employee’s designation as the

agency’s regional representative. The mere fact that membership

may be job-related does not overcome the statutory prohibition.

B-198720, June 23, 1980. See also 19 Comp. Dec. 650 (1913)

(Army could not pay for Adjutant General’s membership in

International Association of Chiefs of Police). Similarly, the fact that

membership may result in savings to the government, such as

reduced travel rates for members, does not overcome the

prohibition against individual memberships. 3 Comp. Gen. 963

(1924).

As noted, an agency may purchase membership in its own name in

a society or association, since 5 U.S.C. § 5946 prohibits only

memberships for individual employees. The distinction, however, is

not a distinction in name only. An expenditure for an agency

membership must be justified on a “necessary expense” theory. To

do this, the membership must provide benefits to the agency itself.

For example, in 31 Comp. Gen. 398 (1952), the Economic

Stabilization Agency was permitted to become a member of a credit

association because members could purchase credit reports at

reduced cost and the procurement of credit reports was determined

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to be necessary to the enforcement of the Defense Production Act.

In 33 Comp. Gen. 126 (1953), the Office of Technical Services,

Commerce Department, was permitted to purchase membership in

the American Management Association. The appropriation involved

was an appropriation under the Mutual Security Act to conduct

programs including technical assistance to Europe, and the

membership benefit to the agency was the procurement of

Association publications for foreign trainees and foreign productivity

centers. See also B-305095, Dec. 8, 2005 (the United States

Chemical Safety and Hazard Investigation Board appropriation is

available to pay the membership fee for the Board to become a

corporate associate member of the Risk Management and Decision

Processes Center of the Wharton School, University of

Pennsylvania, since the Board has determined that such

membership will assist the Board in carrying out its duties under

42 U.S.C. § 7412(r)(6)); 70 Comp. Gen. 190 (1991) (prohibition in

5 U.S.C. § 5946 does not prohibit an agency from using

appropriated funds to purchase access for its employees to a

private fitness center’s exercise facilities as part of the agency’s

health service program as authorized by 5 U.S.C. § 7901);

B-241706, June 19, 1991 (Public Health Service may reimburse

physicians for annual medical staff dues since hospital privileges

are essential to the performance of the agency’s business);

B-236763, Jan. 10, 1990 (GAO may pay fees for agency

membership in certain professional organizations and designate

appropriate GAO employees to attend functions for recruitment

purposes).

GAO has also approved membership by the Federal Law

Enforcement Center in the local Chamber of Commerce, B-213535,

July 26, 1984, and by a naval installation in the local Rotary Club,

61 Comp. Gen. 542 (1982). In the latter decision, however, GAO

cautioned that the result was based on the specific justification

presented, and that the decision should not be taken to mean that

“every military installation or regional Government office can use

appropriated funds to join the Rotary, Kiwanis, Lions, and similar

organizations.” Id. at 544.

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The acquisition of publications significant to executing an agency’s

statutory responsibilities, and that can be acquired through no other

means, may be sufficient to justify purchase of an agency

membership. 20 Comp. Gen. 497 (1941) (membership of Naval

Academy in American Council on Education); A-30185, Feb. 5,

1930 (membership of Phoenix Indian School in National Education

Association). See also 33 Comp. Gen. 126 (1953). Compare

52 Comp. Gen. 495 (1973), holding that acquisition of publications

is not sufficient to justify an individual, as opposed to agency,

membership.

A variation occurred in 19 Comp. Gen. 937 (1940). The Cleveland

office of the Securities and Exchange Commission (SEC) desired

access to a law library maintained by the Cleveland Law Library

Association. Access was available only to persons who were

stockholders in the Association. The alternative to the SEC would

have been the purchase of its own library at a much greater cost.

Under the circumstances, GAO advised that 5 U.S.C. § 5946 did

not prohibit the stock purchases or the payment of stockholders

assessments. GAO further noted, however, that a preferable

alternative would be a contract with the Association for a flat-rate

service charge.

Where there is no demonstrable benefit to the agency, the

membership expense is improper. Thus, in 32 Comp. Gen. 15

(1952), the cost of membership fees for the New York Ordnance

District of the Army in the Society for Advancement of Management

was disallowed. The membership was in actuality four separate

memberships for four individuals and the primary purpose was to

enhance the knowledge of those individuals.

Since the benefit to the agency must be in terms of furthering the

purposes for which its appropriation was made, a benefit to the

United States as a whole rather than the individual agency may not

be sufficient. In 5 Comp. Gen. 645 (1926), the former Veterans

Bureau owned herds of livestock and wanted to have them

registered. Reduced registration costs could be obtained by joining

certain livestock associations. The benefit of registration would be a

higher price if the agency sold the livestock. However, sales

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proceeds would have to be deposited in the Treasury as

miscellaneous receipts and would thus not benefit the agency’s

appropriations. Membership was therefore improper. (The agency’s

appropriation language was subsequently changed and the

membership was approved in A-38236, Mar. 30, 1932.)

Several of the decisions have pointed out that an agency may

accept a gratuitous membership without violating the Antideficiency

Act. 31 Comp. Gen. 398, 399 (1952); A-38236, Mar. 30, 1932,

quoted in 24 Comp. Gen. 814, 815 (1945).

In addition, payment of a membership fee at the beginning of the

period of membership does not violate the prohibition on advance

payments found in 31 U.S.C. § 3324. For example, in B-221569,

June 2, 1986, the Coast Guard could properly use its funds to pay

the membership fees in certain unspecified private organizations

(not physical fitness facilities) at the beginning of the membership

period. The advance payment prohibition was not applicable since

the agency got the benefit of what it purchased upon payment.

What was being purchased was a “membership,” and the

membership was received upon payment. Compare B-288013,

Dec. 11, 2001 (holding that agency payments of membership fees

to a private fitness center at the beginning of each option year,

under a contract for providing fitness facilities and services for

government employees, before it is known how many and when

agency employees use the contractor’s facilities and services,

would violate the advance payment provision in 31 U.S.C. § 3324).

There is a fuller discussion of the advance payment provision in

Chapter 5.

The evolution of the statutory law on membership fees produced a

somewhat anomalous result in some of the early cases. Section

5946 of title 5 of the United States Code originally prohibited—and

still prohibits—not only membership fees, but also the expenses of

attending meetings. In the early decades of the statute, some

agencies received specific authority to pay the expenses of

attendance at meetings, but many did not. Thus, as the individual

versus agency membership distinction developed, some of the

decisions were forced to conclude that an agency could purchase a

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membership in an association but that nobody could attend the

meetings since attending meetings could not be done by “the

agency” but only through an individual. See, e.g., 24 Comp.

Gen. 814, 815 (1945); A-30185, Feb. 5, 1930. Two provisions of

the Government Employees Training Act, 5 U.S.C. §§ 4109 and

4110, now permit attendance at meetings and conferences in

certain situations. Thus, as a general proposition, if an organization

is closely enough related to an agency’s official functions to justify

agency membership, it is presumably closely enough related to

justify sending a representative to its meetings. See also section

D.5 above.

As noted above, the prohibition in 5 U.S.C. § 5946 against

individual memberships does not apply if the fee is authorized by

the Government Employees Training Act. An illustration is

61 Comp. Gen. 162 (1981), holding that the Defense Department

could pay the licensing fees of Methods Time Measurement

instructors for the Army Management Engineering Training Agency.

The instructors had to be trained and certified—hence the fee—

before they could train others. Further, the fee was not a matter of

“personal qualification” since the certifications would be restricted to

the training of Defense Department personnel and would be of no

personal use to the instructors apart from their Defense Department

jobs. For more on the issue of personal qualification expenses, see

section C.4.g above.

Another example of the inapplicability of 5 U.S.C. § 5946 when the

membership fee is authorized under the Government Employees

Training Act is B-223447, Oct. 10, 1986, approving certain

individual memberships for employees of the U.S. Army Corps of

Engineers in the Toastmasters International organization as a

source of public speaking training. The organization required

membership in order to obtain the training. Because the

Government Employees Training Act does not apply to active duty

members of the uniformed services (68 Comp. Gen. 127 (1988)),

the Act’s exception to 5 U.S.C. § 5946, and cases applying the Act

or the exception, apply to civilian employees of the military

departments but not to uniformed personnel.

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7. Sovereign immunity

Under the doctrine of sovereign immunity and the Supremacy

Clause of the Constitution (U.S. Const. art. VI, cl. 2), a state or local

government may not tax the federal government or its activities.

See McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819). In

McCulloch, the Supreme Court formulated this doctrine to preserve

the federal system, which the Court indicated in its famous dictum

that “the power to tax involves the power to destroy.” 17 U.S.

at 431. See also Clallam County v. United States, 263 U.S. 341,

343-44 (1923); Van Brocklin v. Tennessee, 117 U.S. 151, 180

(1886). In addition, the federal government and its activities are free

from state regulation unless Congress enacts a law unambiguously

consenting to such regulation.

200

Hancock v. Train, 426 U.S. 167,

178–81 (1976); 70 Comp. Gen. 153, 155–56 (1990). Therefore,

appropriations are not available to pay taxes or fines to state or

local governments or to pay for federal compliance with state or

local laws, unless Congress has enacted specific statutory authority

otherwise.

201

Congress may always authorize the payment of a particular tax,

fee, fine, or penalty, even if the federal government is

constitutionally immune. For example, after GAO concluded that

the federal government is constitutionally immune from paying

200

One example of a law in which the federal government consented to state regulation

of federal activity is section 313(a) of the Clean Water Act. It requires federal agencies to

comply with all state and local requirements respecting the control and abatement of water

pollution, including the payment of reasonable service charges. 33 U.S.C. § 1323(a).

201

The United States’ exemption from property-related taxes has an obvious effect on

some state and local jurisdictions. Congress may choose to compensate local taxing

authorities for the loss of income attributable to federal holdings of real property within a

particular jurisdiction by payments in lieu of taxes. See B-149803, May 15, 1972. The

most important statute in this area is the Payments in Lieu of Taxes Act (PILT), 31 U.S.C.

§§ 6901–6907, which authorizes the Secretary of the Interior to make payments, pursuant

to statutory criteria, to units of local governments in which “entitlement land” is located.

GAO has issued a number of decisions and opinions construing the PILT statute. See,

e.g., 65 Comp. Gen. 849 (1986); 58 Comp. Gen. 19 (1978); B-212145, Oct. 2, 1984;

B-214267, Aug. 28, 1984.

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particular charges included in its water bill, Congress amended the

Clean Water Act to require agencies to pay such charges.

B-321686, Mar. 14, 2011, discussed further in section D.7.a below.

From a bureaucratic standpoint, there are various means through

which the government may assert its tax-exempt status. In some

cases, use of a government credit card or purchase order will

identify the purchaser as an agent, agency, or instrumentality of the

United States that is exempt from a state or local tax.

202

Other

methods, such as use of a state or local tax exempt number or the

use of a standard “U.S. Tax Exemption Form,” are listed in the

Federal Acquisition Regulation (FAR), 48 C.F.R. § 29.305.

203

A two-step analysis determines whether appropriations are

available to pay a particular charge levied against the federal

government by a state or local government. First, consider whether

the charge is a tax or a fee for a service. Appropriations are

available to pay fees, but not taxes. Second, if the payment in

question is a tax, consider whether the state or local government

imposed the tax on the federal government or one of its

instrumentalities. Issues of sovereign immunity arise only when a

tax is imposed on the government itself, not upon another entity

such as a contractor.

202

The use of a government travel or purchase card does not necessarily demonstrate

that the purchase was for the federal government, however. See, e.g., GAO,

Governmentwide Purchase Cards: Actions Needed to Strengthen Internal Controls to

Reduce Fraudulent, Improper, and Abusive Purchases, GAO-08-333 (Washington, D.C.:

Mar. 14, 2008) (reporting government travel card use for improper meals, alcohol,

consumer electronics, and other inappropriate transactions).

203

The government may elect to pay tax from which it is exempt if the amount of the tax

is so small as to not justify the administrative burden of asserting the exemption. See

52 Comp. Gen. 83 (1972) (“the administration costs of the use of the [tax exemption]

certificate are prohibitive when dealing with such small amounts and, therefore, state and

local taxes of one dollar or less may be paid in spite of the government’s immunity to such

taxation”). This is one of the few examples of a de minimis exception in appropriations

law. See also B-206804-O.M., Feb. 7, 1983 (endorsing the use of a tax exempt number

rather than tax exempt certificates where the former reduces administrative burden and

expense relative to the latter).

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a. Is the charge a tax or a fee?

A state or local government may denote its charge as a “tax,” a

“fee,” or something else. The nomenclature the state or local

government uses is irrelevant when determining whether a charge

is, in fact, a tax or fee. Instead, the agency must examine the

substance of the particular charge at issue facts and circumstances

to make a determination. Though the federal government is

constitutionally immune from paying taxes to state and local

governments, the federal government may permissibly pay fees.

Generally, a charge made by a state or a political subdivision of a

state for a service rendered or convenience provided is a fee, not a

tax. See Packed Co. v. Keokuk, 95 U.S. 80, 85-86 (1877) (wharf

fee levied only on those using the wharf is not a tax). Fees typically

have three traits: (1) they are charged in exchange for a particular

governmental service or privilege that benefits the party paying the

fee in a manner not shared by other members of society; (2) they

are paid voluntarily, in that the party paying the fee has the option

of not utilizing the governmental service or applying for the

privilege; (3) they are not collected to raise revenues but to

compensate the governmental entity for the service provided or to

defray the government’s costs of regulating. See National Cable

Television Ass’n v. United States, 415 U.S. 336, 340-41 (1974);

B-320795, Sept. 29, 2010, at 10.

Taxes, on the other hand, are “enforced contribution[s] to provide

for the support of government.” United States v. La Franca,

282 U.S. 568, 572 (1931). A typical tax has three characteristics: it

(1) is imposed by a legislature upon many, or all citizens (2) to raise

revenue that (3) is spent for the benefit of the entire community.

San Juan Cellular Telephone Co. v. Public Service Comm’n of

Puerto Rico, 967 F.2d 683 (1

Cir. 1992).

Distinguishing a tax from a fee requires careful analysis because

the line between a tax and fee can be a blurry one. Collins Holding

Corp. v. Jasper County, South Carolina, 123 F.3d 797, 800 (4

Cir.

1997). To determine the real nature of the assessment at issue, it is

critical is to apply the considerations discussed above in light of all

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the facts and circumstances of the particular charge at issue.

B-320795, at 11. For example, the District of Columbia government

collected a “stormwater user fee” from each real property owner in

the District. The amount of the fee was based upon the impervious

service area of the property. Under District law, fees collected were

available primarily to defray the District government’s cost to

implement programs to reduce the amount of pollutants discharged

into area waterways as a result of stormwater runoff. GAO

determined that the “stormwater user fee” was a tax, not a fee. The

District government imposed the fee upon property owners

generally, rather than upon the District government’s provision of a

service or the granting of a privilege. In addition, the government

activities that the charges supported did not provide any

particularized benefit to those who paid the charge. Rather, the

charge funded activities, such as enhanced street cleaning and tree

planting, that benefited the public generally rather than the property

owners particularly. As a result, the “stormwater user fee” was a tax

rather than a fee. Although the Clean Water Act required federal

agencies to pay specified “reasonable service charges,” GAO

concluded that this tax was not a “service charge” for services

rendered. Accordingly, GAO’s appropriation was not available to

pay the tax. B-320795, Sept. 29, 2010. (Congress has since

amended the Clean Water Act to provide the requisite waiver of

sovereign immunity to require agencies to pay charges such as this

one. 33 U.S.C. § 1323(c).) See also B-306666, June 5, 2006

(surface water management fees assessed by a county was a tax).

In contrast, GAO concluded that another water-related charge was

a user fee that GAO could pay from its appropriations. The District

of Columbia Water and Sewer Authority (D.C. Water) collected an

“Impervious Surface Area charge” from its customers. D.C. Water

computed the fee based on the amount of impervious surface

located on each property. It used the funds to recover costs of

necessary capital improvements to D.C. Water’s sewer system and

treatment facilities. GAO concluded that this charge was a

component of the utility rate a customer must pay to obtain water

and sewer services. D.C. Water’s method for calculating the charge

represented a reasonable approximation of each user’s fair share

of the capital cost and a fair approximation of the cost of sewer

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services. Accordingly, the “Impervious Surface Area charge” was a

user fee, and GAO’s appropriations were available to pay the fee.

In contrast, the purpose of the “stormwater user fee” (discussed

above) was not to cover the costs of providing a service to

customers, or to cover the costs of a regulatory program.

B-319556, Sept. 29, 2010; see also 42 Comp. Gen. 653 (1963)

(where a local government finances major improvements, such as

sewers, by means of issuing revenue bonds, and then levies a

surcharge on its service charge to liquidate the bonded

indebtedness, a federal user of the sewer service who is under a

contractual obligation to pay the service charge may also pay the

surcharge); but see B-180221-O.M., Mar. 19, 1974 (GAO has

questioned the payment of bond interest where that interest was

attributable to the municipality’s share of initial construction costs).

(1) Firefighting services

Many cases concerning whether a particular charge is a tax or a

fee concern firefighting services.

Where local law requires a firefighting organization (city or county

fire department, fire protection district, etc.) to cover a particular

territorial area and to respond to fires without direct charge to the

property owners, this duty extends to federal as well as nonfederal

property within that territorial area. Since the firefighting

organization is required to provide services, payment of the fee

does not confer a benefit. Accordingly, payment of a charge for

firefighting in such a case is not a permissible fee but, rather, is a

tax. See B-243004, Sept. 5, 1991. It follows that the government

may not contract for firefighting services that it would be legally

entitled to receive in any event, nor may it reimburse a political

subdivision for the additional costs incurred in fighting a fire. See 53

Comp. Gen. 410 (1973) and cases cited therein; B-168024, Dec.

13, 1973; B-47142, Apr. 3, 1970; B-160936, Mar. 13, 1967.

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Where no legal duty to receive services exists, the federal

government may use appropriated funds to reimburse state or local

government entities for firefighting services.

204

Thus,

reimbursement was allowed in 3 Comp. Gen. 979 (1924) where a

fire unit had no legal duty to respond to an emergency call outside

its district. See also B-123294, May 2, 1955 (holding that a flat-fee

service charge levied by a utility district for extinguishing a fire in a

postal vehicle was held permissible where the utility district was

under no legal obligation to provide the service).

In situations where the federal government has no entitlement to

service, an agency may obligate funds under a contractual

agreement for fire protection with the nearest fire district. 35 Comp.

Gen. 311 (1955). Under the same theory, the Comptroller General

held that the Bureau of Indian Affairs could make a financial

contribution to the “Community Fire Truck,” a volunteer firefighting

organization which otherwise would have been under no obligation

to respond to fires at an Indian school outside the limits of the city

served by the organization. 34 Comp. Gen. 195 (1954). See also

B-163089, Feb. 8, 1968; B-123294, May 2, 1955. However, there is

no authority to pay for fire services rendered without a preexisting

legal obligation if such services were necessary to protect adjoining

204

In some rural areas, firefighting services may be unavailable or very limited. In such

areas, the government may have to provide its own fire protection. The Comptroller

General had stated, in 32 Comp. Gen. 91 (1952), that an agency could not enter into

“mutual aid agreements” to extend that service to the general community beyond the

boundaries of government property, even where the local inhabitants were predominantly

government employees and where the additional protection could be accomplished

without additional expense. Later, Congress enacted legislation specifically authorizing

reciprocal agreements for mutual aid. 42 U.S.C. §§ 1856–1856d. This statutory authority

is limited to mutual aid agreements and does not authorize an agency to enter into an

agreement to reimburse a political subdivision for services unilaterally provided to the

government. 35 Comp. Gen. 311, 313 (1955); B-243004, Sept. 5, 1991; B-126228, Jan. 6,

1956; B-40387-O.M., June 24, 1966. An agency participating in a mutual aid agreement

under this authority may contribute, on a basis comparable to other participants, to a

common fund to be used for training and equipment incident to responding to fires and

related emergencies such as hazardous waste accidents. B-222821, Apr. 6, 1987.

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state or privately owned property as to which such a legal duty

existed. 30 Comp. Gen. 376 (1951).

205

In the analysis of legal duty to provide protection, it is irrelevant that

the government may have engaged in an activity causing the fire.

32 Comp. Gen. 401 (1953); B-167709, Sept. 9, 1969; B-147731,

Dec. 28, 1961; B-6400, Aug. 28, 1940.

206

Similarly, there is no

estoppel created by the fact that the United States operated its own

fire protection at a given installation for a period of time. If the legal

duty to provide protection exists, the United States is entitled to

claim protection at any time its own service becomes obsolete,

undesirable, or uneconomical. B-129013, Sept. 20, 1956;

B-126228, Jan. 6, 1956.

An exception to the general rule may exist in the case of a “federal

enclave.” This term usually describes large tracts of land held under

exclusive federal jurisdiction. In 45 Comp. Gen. 1 (1965), the

Comptroller General held that, despite locally available protection, a

federal enclave could provide its own fire protection on a contract

basis. Further, adjacent land under federal control but not part of

the federal enclave could be protected under the same contractual

arrangement. However, an additional factor in 45 Comp. Gen. 1

was that legitimate doubt existed as to whether the fire district was

under a legal obligation under state law to provide services to the

federal property involved, and the district had petitioned the state

government to redraw its boundaries to exclude the federal

205

A variation occurred in B-116333-O.M., Oct. 15, 1953, in which it was held permissible

to reimburse a private firefighting enterprise for repair and maintenance service to

hydrants and fire alarm boxes on a government-owned and -operated housing facility,

irrespective of the duty of the municipality.

206

A claim for expenses (as opposed to damages) incurred by a state in suppressing a

fire starting on federal property and allegedly caused by the negligence of a federal

employee is not a claim for injury or loss of property under the Federal Tort Claims Act,

28 U.S.C. §§ 2671-2680, and is therefore not cognizable under that Act. Oregon v. United

States, 308 F.2d 568 (9

Cir. 1962), cert. denied, 372 U.S. 941 (1963); California v.

United States, 307 F.2d 941 (9

Cir. 1962), cert. denied, 372 U.S. 941 (1963); B-163089,

Oct. 19, 1970.

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property. The effect of this factor is unclear, and since that time, no

case has been decided in which a federal enclave was involved.

Note that the threatened exclusion of the federal property was

based on a legitimate doubt as to whether protection was required

by state law. If protection is required, exclusion would be improper.

See B-129013, Sept. 20, 1956. Cf. B-192641, May 2, 1979

(nondecision letter) (questioning a redistricting to exclude federal

property which was not a federal enclave).

A 1981 decision addressed the authority of the Bureau of Land

Management to contract with rural fire districts in Oregon and

Washington for fire protection and firefighting services for federally

owned timberlands in those states. The Comptroller General

reviewed the principles and precedents established over the years

and concluded that, since the fire districts were legally required to

protect the federal tracts, the Bureau could not enter into the

desired contracts without specific statutory authority. However,

Bureau installations with a federally maintained firefighting capacity

could enter into mutual aid agreements under 42 U.S.C. § 1856.

207

60 Comp. Gen. 637 (1981).

As a result of the huge losses suffered by local fire districts after a

1973 fire at a federal records center in St. Louis, Congress enacted

section 11 of the Federal Fire Prevention and Control Act of 1974,

Pub. L. No. 93-498, 88 Stat. 1535, 1543 (Oct. 29, 1974), classified

at 15 U.S.C. § 2210. This provision allows a fire service fighting a

fire on federal property to file a claim for the direct expenses and

direct losses incurred. The claim is filed with the United States Fire

Administration, Federal Emergency Management Agency (FEMA).

The amount allowable is the amount by which the additional

firefighting costs, over and above the claimant’s normal operating

costs, exceed the total of any payments made by the United States

to the claimant or its parent jurisdiction for the support of fire

services on the property in question, including taxes and payments

in lieu of taxes. FEMA, upon determining the amount allowable,

207

See note 204.

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must forward it to the Treasury Department for payment. The

Comptroller General has determined that section 11 constitutes a

permanent, indefinite appropriation for the payment of these claims.

B-160998, Apr. 13, 1978. Disputes under section 11 may be

adjudicated in the United States Claims Court. FEMA has issued

implementing regulations at 44 C.F.R. pt. 151.

208

Notwithstanding this authority, the decisions discussed previously

in this section remain significant for several reasons. First, they

define the extent to which an agency may use its own

appropriations apart from section 11. Second, they define the

extent to which an agency may contract for fire protection services.

Finally, section 11 provides that payment shall be subject to

reimbursement by the federal agency under whose jurisdiction the

fire occurred, “from any appropriations which may be available or

which may be made available for the purpose.”

(2) Other decisions and opinions considering

whether a charge is a tax or a fee

• Electronic waste. The State of California assessed an

“electronic waste recycling fee” against the Administrative

Office of the United States Courts. The California legislature

levied this “electronic waste recycling fee” against purchasers of

particular electronic devices, while using the resulting proceeds

to fund a program to provide consumers and the general public

with cost-free and convenient opportunities to recycle electronic

devices. Those who paid the fee were not guaranteed to

receive waste recycling services; nor were they entitled to a

refund if they did not avail themselves of recycling services in

California. Thus, the benefit of the “electronic waste recycling

fee” was not narrowly circumscribed to the consumers paying

the “fee” but, rather, was conferred on the general public.

Accordingly, GAO concluded that the “electronic waste

208

Section 2465 of title 10 of the United States Code prohibits DOD contracts for

firefighting or security guard functions.

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recycling fee” was a tax and that appropriations were not

available to pay it. B-320998, May 4, 2011.

• Water and Sewer. A charge for water and/or sewer services is a

permissible service charge rather than a tax if it is based on the

quantity of direct services actually furnished. A federal agency

may generally pay service charges such as those for municipal

sewer service, so long as the charges represent the fair and

reasonable value received by the United States for the services.

73 Comp. Gen. 1 (1993) (holding that a sewerage charge may

be paid only to the extent that the city makes and documents a

nondiscriminatory assessment for the reasonable value of

sewer services rendered; 29 Comp. Gen. 120 (1949) (sewer

service charge held payable on quantum meruit basis); see also

70 Comp. Gen. 687 (1991) (holding that the federal government

may pay county landfill user fees because the fees were for a

service, were based on the levels of service provided, and were

nondiscriminatory). Where the state or local government,

however, assesses the fee based on a citywide basis or as a

flat charge, it is charging the fee in its governmental capacity

and therefore essentially taxing the federal government. The

federal government may not use its appropriations to pay that

type of fee. See 31 Comp. Gen. 405 (1952) (assessment for

water/sewer services levied on citywide basis rather than

quantity of service rendered held a tax); 20 Comp. Gen. 206

(1940) (water charge held to be a tax where it was levied as a

flat charge rather than on the basis of actual water

consumption); B-226503, Sept. 24, 1987 (holding that an

assessment levied against a federal facility for sewer charges

unrelated to actual sewer usage could not be paid).

209

• Tolls. A toll is not a tax, but rather, it is a fee for the use of a

road, bridge, or tunnel. Sands v. Manistee River Improvement

209

A sewer service charge which is otherwise proper may be paid in advance if required

by local law, notwithstanding 31 U.S.C. § 3324. 73 Comp. Gen. 1 (1993). The

government’s liability would also include late payment penalties to the extent required by

local law. 39 Comp. Gen. 285 (1959).

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Co., 123 U.S. 288, 294 (1887). Because tolls do not raise

questions of federal tax immunity, they are properly payable

where necessarily incurred in the performance of official

business. 9 Comp. Gen. 41, 42 (1929); 4 Comp. Gen. 366

(1924); 24 Comp. Dec. 45 (1917).

210

• Police. Cases involving police protection indicate that the

federal government may not use appropriations to reimburse a

state or local government when it has a legal duty to provide the

service. The Comptroller General has held that a municipality

may not levy direct charges against the United States for

ordinary police protective services provided within its area of

jurisdiction. 49 Comp. Gen. 284, 286–87 (1969); B-187733,

Oct. 27, 1977. The theory is similar to that of the firefighting

cases: payment for services that a state or local government

must provide by law is not a permissible fee, because the

payment will provide no particularized benefit to the federal

government. Conversely, the federal government may pay on a

quantum meruit basis for police services that the state or local

government entity has no duty to provide. For example, the

federal government may use appropriated funds for extra police

for special events such has football games at the United States

Coast Guard Academy (49 Comp. Gen. at 287) and special

police details at Bicentennial ceremonies (B-187733, Oct. 27,

1977).

Of course, Congress may make a specific appropriation for the

reimbursement of law enforcement expenses. See, e.g.,

210

Statutory authority now exists for the reimbursement of tolls incurred by government

employees on official travel. 5 U.S.C. § 5704(d); 35 Comp. Gen. 91 (1955). GAO has also

held that appropriated funds may be used to purchase annual toll road permits when

justified by anticipated usage. 36 Comp. Gen. 829 (1957). (These purchases do not

violate the statutory prohibition on advance payments because, GAO reasoned, the

government did not make an advance payment but rather purchased a present right to

use the thoroughfare in the future. Id.) Similarly, if an employee who frequently uses a toll

road on official business purchases an annual permit for his or her own automobile, the

agency may reimburse the toll charges that would otherwise have been incurred, on a per

trip basis, not to exceed the cost of the annual permit. 34 Comp. Gen. 556 (1955).

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Commerce, Justice, Science, and Related Agencies

Appropriations Act, 2017, Pub. L. No. 115-31, div. B, ___ Stat.

___, ___, ___ (May 5, 2017) (appropriating $20 million for

reimbursement of “extraordinary law enforcement and related

costs directly associated with protection” of President-elect

Trump); Department of Homeland Security Appropriations Act,

2017, Pub. L. No. 115-31, div. F, title V, § 544, ___ Stat. ___,

___, ___ (May 5, 2017) (appropriating $41 million for

reimbursement of “extraordinary law enforcement personnel

costs” for protection of particular presidential residences).

• Traffic Signals. Under certain circumstances, a federal agency

may use appropriated funds to pay for installation of a traffic

signal. First, the federal facility must be the primary beneficiary

and any benefit for the general public must be incidental.

Second, the state or local government must have no legal duty

to provide the service and the charge may not discriminate

against the United States—that is, any other resident would be

subject to a similar charge. If those conditions are met, then a

federal agency may use appropriated funds to pay for the

installation of a traffic signal. See, e.g., 61 Comp. Gen. 501

(1982); 55 Comp. Gen. 1437 (1976).

• Parking. Generally, parking meter charges established by local

ordinance are primarily for the purpose of regulating traffic,

rather than for the purpose of raising revenue. Therefore, such

fees generally are fees, not taxes. Therefore, a federal agency

may use appropriated funds to pay parking fees for a

government vehicle because these are service charges unless

a court has held that the fee is a tax or a revenue raising

measure (as opposed to a traffic regulation device).

211

46 Comp. Gen. 624 (1967). However, a tax on parking in a

211

The government may also reimburse employees for parking meter charges they pay

to park their private vehicles while on official business, albeit for a different reason, which

is that the charge (regardless of whether it is a tax or fee) is imposed upon the employee,

not the government. This is discussed later in this section.

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parking lot or garage is a tax from which the federal government

is immune. 51 Comp. Gen. 367 (1971).

• Special Assessments. These charges are generally considered

to be taxes as opposed to fees because an assessment for

local improvements is an involuntary exaction in the nature of a

tax. Hagar v. Reclamation District No. 108, 111 U.S. 701, 707

(1884); City of Cincinnati v. United States, 39 Fed. Cl. 271, 275

(1997), aff’d, 153 F.3d 1375 (Fed. Cir. 1998). These charges

are typically made to raise general revenue for paving or

repairing streets or sidewalks, installing sewers, and similar

local governmental services. Consequently, the decisions hold

that the federal government is immune from paying special

assessments. E.g., United States v. City of Huntington,

999 F.2d 71 (4

Cir. 1993), cert. denied, 510 U.S. 1109 (1994);

National Railroad Passenger Corp. v. Pennsylvania Public

Utility Commission, 665 F. Supp. 402 (E.D. Pa. 1987), aff’d,

848 F.2d 436 (3

Cir.), cert. denied, 488 U.S. 893 (1988);

212

United States v. Harford County, 572 F. Supp. 239 (D. Md.

1983); 27 Comp. Gen. 20 (1947); 18 Comp. Gen. 562 (1938);

B-243004, Sept. 5, 1991; B-226503, Sept. 24, 1987; B-184146,

Aug. 20, 1975; B-160936, Mar. 13, 1967; B-155274, Oct. 7,

1964.

• Private Assessments. These assessments are private fees and

the federal government’s liability is determined by application of

traditional concepts of contract and property law, subject to any

applicable federal statutory provisions. See, e.g., B-210361,

Aug. 30, 1983 (holding that the Forest Service was liable for

assessments levied by a private homeowners’ association on a

parcel the Forest Service had acquired by donation).

• Taxes on personal property. State and local governments may

not impose taxes upon the federal government’s personal

212

Amtrak’s status as an instrumentality of the United States for this purpose was

irrelevant because Amtrak’s enabling legislation specifically provides for tax immunity.

E.g., Pennsylvania Public Utility Commission, 665 F. Supp. at 411; 49 U.S.C. § 24301.

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property. E.g., 27 Comp. Gen. 273 (1947) (no legal basis to pay

state registration fee on government-owned outboard motors).

Several earlier decisions applied the federal government’s

immunity against state motor vehicle license plate and title

registration fees. 21 Comp. Gen. 769 (1942); 4 Comp. Gen. 412

(1924); 1 Comp. Gen. 150 (1921); 15 Comp. Dec. 231 (1908).

(Most federal government-owned vehicles today would have

federal government plates.)

b. Is the tax imposed upon the United

States?

As the Supreme Court has held, the key question in determining

whether the federal government may pay a sales or other tax

imposed on its purchase of goods or services within a state

depends upon where the legal incidence of the tax falls. Alabama v.

King & Boozer, 314 U.S. 1 (1941). In that case, a construction

contractor building a federal project objected to the state’s

imposition of sales tax on its purchase of building materials used in

construction. It argued that such purchases should be exempt from

state taxation, as the costs would ultimately be borne by the federal

government and thereby violate federal immunity from state

taxation. The Supreme Court disagreed, drawing a distinction

between the economic burden imposed on the United States when

it must pay more for goods and services because of sales taxes

levied against the seller of goods, and the constitutionally

impermissible burden occurring when the government, as a

purchaser of goods, is directly liable to the state for taxes imposed

on a transaction. In other words, if the “legal incidence” of a tax falls

on the vendor-seller and the seller alone is obligated to pay, the

government may reimburse the seller for the total cost, including

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any tax.

213

But if the vendee-buyer is in any way legally responsible

for the payment of the tax, the federal government as a buyer

cannot be required to pay. Id. at 12–14. See James v. Dravo

Contracting Co., 302 U.S. 134 (1937) (state gross receipts tax

imposed on a government contractor).

214

The rule that the government is constitutionally immune from a

“vendee tax” but may pay a valid “vendor tax”—even if the

government ultimately bears its economic burden—has been

recognized and applied in numerous Comptroller General

decisions. E.g., B-320998, May 4, 2011; B-302230, Dec. 30, 2003;

B-288161, Apr. 8, 2002; 46 Comp. Gen. 363 (1966); 24 Comp.

Gen. 150 (1944); 23 Comp. Gen. 957 (1944); 21 Comp. Gen. 1119

(1942); 21 Comp. Gen. 733 (1942). The same rule applies to state

tax levies on rental fees. See 49 Comp. Gen. 204 (1969);

B-168593, Jan. 13, 1971; B-170899, Nov. 16, 1970.

Determining whether the legal incidence of a particular tax is on the

vendor or the vendee is a question of federal law, e.g., United

States v. Nevada Tax Commission, 439 F.2d 435, 439 (9

Cir.

1971), and GAO will follow federal judicial precedent where

available. If there are no federal judicial decisions on point, GAO

will follow the determination of the state’s highest court. 21 Comp.

Gen. 843 (1942); B-211093, May 10, 1983.

213

Of course, “no matter on whom the tax nominally falls, the market price (including the

tax) and the quantity sold will be the same. Accordingly, the economic incidence will be

shared in the same way: if the tax is nominally on the buyer, part of it will be passed back

to the seller in the form of reduced quantity demanded.” United States v. Delaware,

958 F.2d 555, 561 n.11 (3

Cir. 1992). That the imposition of a particular fee may

ultimately burden the Unites States financially is an insufficient ground to invalidate a tax.

United States Postal Service v. Town of Greenwich, 901 F. Supp. 500, 507 (D. Conn.

1995).

214

In the context of sales taxes, the hallmark of a vendor tax is that the law establishing

the tax requires the seller to pay it notwithstanding any inability or unwillingness on the

part of the seller to collect it from the purchaser. E.g., B-239608, Dec. 14, 1990

(nondecision letter); B-225123, May 1, 1987 (nondecision letter).

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(1) State gasoline taxes

Nowhere is the vendor/vendee concept more clearly illustrated than

in the many cases considered by GAO on the payment of state

gasoline taxes. In 57 Comp. Gen. 59 (1977), the Comptroller

General held that the Vermont tax on gasoline distributors, which

was required by law to be passed along to dealers and in turn to

consumers, was a legal obligation on consumers to pay the tax.

Since this tax collection mechanism constituted a vendee tax, the

federal government was constitutionally immune from its payment

as a purchaser. In 1979, Vermont amended its tax law to delete the

requirement for pass-through to dealers and consumers. With this

amendment, the tax became a vendor tax and the federal

government’s immunity no longer applied. 63 Comp. Gen. 49

(1983). It remains immaterial that, as a practical matter, the tax will

be reflected in the retail price of the fuel. While the economic

incidence still fell on the federal government as purchaser, the legal

incidence no longer did.

Another example of a vendee tax for which the United States was

immune was the California state gasoline tax, which the dealer was

required to collect from a consumer “insofar as it can be done.”

55 Comp. Gen. 1358 (1976). GAO’s finding that this was a vendee

tax drew support from Diamond National Corp. v. State Board of

Equalization, 425 U.S. 268 (1976), where the Court concluded that

an identically worded sales tax requirement was imposed on the

vendee.

215

In 55 Comp. Gen. 1358, GAO also considered gasoline taxes in

Pennsylvania, Hawaii, and New Mexico. Pennsylvania’s tax was an

excise tax on dealer-users (meaning retail service station

215

In the 1960s, California law provided for a refund of the tax paid on gasoline for

vehicles operated entirely off state highways. The state courts had found that the term

“highway” did not encompass roads running in and through national parks. Therefore,

relying on the state’s interpretation of its own statute, GAO concluded that no tax was

payable on gasoline used in vehicles driven only on the grounds of a national monument.

42 Comp. Gen. 593 (1963).

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operators). The statute did not provide any mechanism for the

dealer-user to seek reimbursement from the consumer and

therefore it was assumed that the tax levied against the dealer-user

would become a part of that retailer’s operating expenses.

Accordingly, the federal government could pay, as a part of the

purchase price, the amount of tax on the retailer who was statutorily

required to assume that tax as a cost of doing business. In Hawaii

the tax was in the form of a license fee paid by retail distributors of

gasoline. This license fee was imposed directly on the distributors

with no direct recourse against the consumers of gasoline, although

the amount of the license fee was undoubtedly considered in

setting the basic cost of fuel sold by those retailers. For this reason

the federal government was authorized to pay the full retail price

including any amount attributable to the tax.

216

The New Mexico

gasoline tax, however, was a tax on the users of state highways,

collected by the retail dealer of gasoline. The tax was added at the

pump to the per-gallon cost of gasoline. Since the incidence of this

tax was on the vendee, when the United States purchased fuel in

New Mexico, it was exempt from the tax.

(2) Taxes upon government contractors

(a) Federal government contractors are subject to

state and local taxation

The imposition of state taxes—sales, use, gross receipts, etc.—on

federal government contractors has produced more than its share

of litigation. A threshold question is whether the state may tax a

contractor at all when the contractor is performing work for the

federal government. The Supreme Court has concluded that, for

the most part, states may indeed levy taxes upon government

contractors: “[T]ax immunity is appropriate in only one

216

In 28 Comp. Gen. 706 (1949), a Washington State tax on gasoline distributors was

similarly found to be a vendor tax and the United States was therefore required to pay the

amount added to the purchase price of gasoline to represent the tax. See also B-154266,

June 25, 1964, considering the same tax as applied to government rented commercial

vehicles.

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circumstance: when the levy falls on the United States itself, or on

an agency or instrumentality so closely connected to the

Government that the two cannot realistically be viewed as separate

entities, at least insofar as the activity being taxed is concerned.”

United States v. New Mexico, 455 U.S. 720, 735 (1982).

Government contractors will generally be unable to meet this test

except in very limited circumstances. Thus, a contractor can claim

constitutional immunity from tax where there is an agency

relationship between the United States and a contractor such that

the contractor is acting solely as the government’s purchasing

agent and title to goods purchased never vests in the contractor.

Kern-Limerick v. Scurlock, 347 U.S. 110, 120–23 (1954); United

States v. Lohman, 74 F.3d 863, 867 (8

Cir.), cert. denied,

518 U.S. 1018 (1996); B-177215, Nov. 30, 1972. See also United

States v. Kabeiseman, 970 F.2d 739 (10

Cir. 1992) (United States

and not contractor was the real purchaser of diesel fuel, so state

tax levied on the diesel fuel purchasers could not be enforced

against the United States).

However, the “contractor as agent” has

limited application. For example, in United States v. New Mexico,

455 U.S. 720, 742 (1982), the Court sustained use and gross

receipts taxes imposed on government contractors which, in that

case, operated under an “advance funding” system whereby the

contractors met their obligations by using Treasury funds which had

been placed in a special bank account. Id. at 725–26.

217

In imposing taxes on government contractors, a state may not

discriminate against the federal government (South Carolina v.

Baker, 485 U.S. 505, 523 (1988); see, e.g., B-156561, June 22,

1965), or substantially interfere with its activities. New Mexico,

455 U.S. at 735 n.11; Phillips Chemical Co. v. Dumas Independent

217

Some additional Supreme Court cases sustaining the imposition of state taxes on

government contractors in various contexts include Washington v. United States, 460 U.S.

536 (1983); United States v. Boyd, 378 U.S. 39 (1964); City of Detroit v. Murray Corp.,

355 U.S. 489 (1958); Alabama v. King & Boozer, 314 U.S. 1 (1941); James v. Dravo

Contracting Co., 302 U.S. 134 (1937). Dravo is regarded as starting the current trend.

New Mexico, 455 U.S. at 731–32.

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School District, 361 U.S. 376, 387 (1960); City of Detroit v. Murray

Corp., 355 U.S. 489, 495 (1958); United States v. City of

Manassas, 830 F.2d 530, 533 (4

Cir. 1987), aff’d mem., 485 U.S.

1017 (1988). This does not prevent states from taxing private

parties who use federal property, even when the private parties are

providing goods to the United States. United States v. Nye County,

178 F.3d 1080, 1084 (9

Cir. 1999).

(b) Federal government may reimburse its

contractors for taxes they pay

The United States can be required to pay a state tax obligation

imposed on its contractor when the federal government assumes

responsibility for the tax by contract. United States v. Department of

Revenue of State of Illinois, 202 F. Supp. 757, 760 (N.D. Ill.), aff’d

per curiam, 371 U.S. 21 (1962). The typical language in

government contracts for the purchase of goods or services recites

that the offered price includes all applicable state and local taxes.

(See the Federal Acquisition Regulation (FAR) provisions on state

and local taxes at 48 C.F.R. subpt. 29.3, and its prescribed contract

clauses at 48 C.F.R. § 52.229.) Shifting the burden of determining

which taxes apply to the contractor is premised on the belief that

contractors are in a better position to know what taxes are

applicable. B-251628, Apr. 2, 1993; B-242303, Mar. 21, 1991;

B-209430, Jan. 25, 1983. Unless otherwise specified in the

contract, the government cannot be required to pay any additional

amount for taxes (B-162667, Dec. 19, 1967; B-134347, Mar. 1,

1966), even when the taxes were first imposed during contract

performance. B-160129, Dec. 7, 1966. In such circumstances it is

irrelevant that the tax involved is a valid vendor tax from which the

United States is not immune; there can be no liability unless the

contract so provides. 45 Comp. Gen. 192 (1965); 23 Comp.

Gen. 957 (1944). Note however, that a contract can include a

contingency clause for after-imposed state and local taxes. The

failure to include such a clause is regarded as the contractor’s

business decision so that the government will not be liable for any

additional taxes. Cannon Structures, Inc., ICBA No. 3968-98,

99-1 B.C.A. ¶ 30,236 (1999); Midcon of New Mexico, Inc., ASBCA

No. 37249, 90-1 B.C.A. ¶ 22,621 (1990).

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Other contract language, of course, may dictate different results. A

contract that provides for the payment of “the actual direct costs”

includes reimbursement of state taxes paid by a contractor.

72 Comp. Gen. 107 (1993). Similarly, a contract for the “actual

costs” justifies reimbursement to a contractor of back taxes and

interest assessed against him when a court found that the

contractor was not exempt from taxation. B-147316-O.M., Jan. 9,

1962. The same result would apply in the case of a contract for a

cost plus fixed fee, such as the contract in Alabama v. King &

Boozer, supra. 35 Comp. Gen. 378 (1955). Likewise, a contract to

pay 50 percent of any new tax imposed by a state would include

the obligation to pay half of the business privilege tax assessed

against a corporate contractor. B-152325, Dec. 12, 1963.

A contractor may be entitled to equitable relief in certain limited

circumstances where both the contractor and the government are

mistaken as to the applicability of a state tax to a particular contract

and where the contractor reasonably relies on an innocent

representation of a government agent that no tax applies. In such

cases, the contract may be reformed and the price increased to

include the applicable state tax. Cases reaching this result in

various fact situations include 64 Comp. Gen. 718 (1985);

B-186949, Oct. 20, 1976; B-180071, Feb. 25, 1974; B-169959,

Aug. 3, 1970; B-159064, May 11, 1966; and B-153472, Dec. 2,

1965. The underlying legal principle is to avoid unjust enrichment

so that a party making a misrepresentation, however innocently,

should not benefit at the expense of a party who reasonably relies

on that misrepresentation. Mutual mistake is an essential element

of recovery in these cases. If the contractor cannot establish mutual

mistake, the contract is payable as written and the contractor must

absorb the additional expense. E.g., Hugh S. Ferguson Co.,

PSBCA No. 2178, 89-1 B.C.A. ¶ 21,294 (1988) (distinguishing 64

Comp. Gen. 718); see Foley Co. v. United States, 36 Fed. Cl. 788,

792 (1996) (agency employee’s misrepresentation about tax-

exempt status is not a mutual mistake of fact requiring contract

reformation); see also Cannon Structures, Inc., supra at 99-1

B.C.A. ¶ 30,236 (FAR prohibits post-contractual relief for after-

imposed state taxes).

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If a contractor entitled under the contract to be reimbursed for state

taxes pays a state tax which is later judicially determined to be

invalid, the contractor is nevertheless entitled to reimbursement

(43 Comp. Gen. 721 (1964)), unless the contractor paid the tax

without being required to do so (38 Comp. Gen. 624 (1959)).

(3) Public utilities

State sales taxes that qualify as vendor taxes and that have been

factored into the utility rates through the applicable rate-setting

process are payable by the government. B-300538, Mar. 24, 2003;

45 Comp. Gen. 192 (1965); B-134602, Dec. 26, 1957; B-123206,

June 30, 1955. The same result applies with respect to a vendor

sales tax on the utility billed separately to the agency. B-211093,

May 10, 1983.

Business privilege or gross receipts taxes are frequently imposed

on public utilities by law. The utility companies are permitted to treat

these taxes as operating expenses and to incorporate them into

their basic billing rates, thereby creating a constitutionally

permissible vendor tax. B-300538, Mar. 24, 2003; B-144504,

June 9, 1967; B-148667, May 15, 1962. This is true even where a

state utility regulatory authority requires the pass-through, if the tax

itself is a vendor tax. See 61 Comp. Gen. 257 (1982) (Veterans

Administration medical centers were liable for that portion of their

electric bills which were attributable to a rate increase reflecting the

state’s public utility license tax).

218

Where the business privilege tax is a valid vendor tax, it can be

paid even if it is attributed as a tax and stated on the utility bill as a

separate item. B-300538, Mar. 24, 2003; B-260063, June 30, 1995;

32 Comp. Gen. 577 (1953); B-171756, Feb. 22, 1971; B-144504,

218

The Department of Justice considered the same situation with the same result. 6 Op.

Off. Legal Counsel 273 (1982).

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June 30, 1970; B-225123, May 1, 1987 (nondecision letter).

219

The

theory is that the “tax,” even though separately stated, is, in effect,

an authorized rate increase designed to recover the revenue

necessary to permit the utility to maintain the allowed rate of return

on its investment. See B-167999, Dec. 31, 1969. See also

B-288161, Apr. 8, 2002 (vendees do not bear the legal incidence of

a utility tax even when a utility increases its rates to pass the tax on

to the vendee). However, payment may not be approved where the

tax is collected only from the federal government or where the

collection of the tax would have a discriminatory effect on federal

activities. B-159685, Apr. 7, 1967.

Another charge occasionally encountered is a “lifeline” surcharge.

This is a surcharge designed to subsidize the providing of reduced

cost utility service to low-income or elderly customers. GAO

regards a lifeline surcharge not as a tax, but merely part of the

authorized rate properly payable by federal users. 67 Comp.

Gen. 220 (1988); B-189149, Sept. 7, 1977.

(4) Other decisions and opinions concerning

incidence of taxes

• 9-1-1 charges. In a series of cases, GAO examined charges for

9-1-1 emergency services in several states and concluded that

they amounted to a tax that could not be imposed upon the

United States or its agencies. 66 Comp. Gen. 385 (1987)

(Florida); 65 Comp. Gen. 879 (1986) (Maryland); 64 Comp.

Gen. 655 (1985) (Texas); B-300737, June 27, 2003 (Alabama);

B-230691, May 12, 1988 (Tennessee); B-239608, Dec. 14,

1990 (Rhode Island). In these cases, the 9-1-1 charge was

imposed directly upon the telephone customer, not upon the

telephone company, making the charge a vendee tax that the

federal government could not pay. In contrast, Arizona levied a

219

Another type of “tax” appearing on utility bills is a charge for 9-1-1 emergency service.

See B-300737, June 27, 2003; B-253695, July 28, 1993; and the discussion in

section D. 7. b. (4).

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tax for the purpose of financing 9-1-1 services. Several factors

showed that the tax was imposed upon telephone companies

rather than their customers: for example, the amount of the tax

was based upon the telephone company’s gross receipts, and

the tax statute was classified in the Arizona tax code with other

excise taxes upon vendors. Therefore, as the incidence of the

Arizona tax was upon the vendor, the federal government could

pay the 9-1-1 service charges that appeared on its telephone

bills. B-238410, Sept. 7, 1990.

• Land Taxes. Although federal land is exempt from state

property taxes, the federal government’s immunity does not

extend to taxes imposed upon contractors. Thus, the Supreme

Court has sustained a state property tax on federally owned

land leased to a private party for the conduct of for-profit

activities (United States v. City of Detroit, 355 U.S. 466, 469

(1958)), and on the “possessory interest” of Forest Service

employees living in government-owned housing (United

States v. County of Fresno, 429 U.S. 452 (1977)).

220

Similarly,

the Court of Federal Claims in Wright Runstad Properties Ltd.

Partnership v. United States, 40 Fed. Cl. 820, 824 (1998), ruled

that a landlord to the federal government had to pay a special

assessment levied against the property, observing that the

government’s tax immunity was not implicated because the

government was not being taxed.

• State Motor Vehicle Fees. Although most federal government-

owned vehicles have federal government plates, earlier cases

220

A tax lien that attaches to property before title passes to the government is not a tax

on government property. The lien is a valid encumbrance against the property, although it

is unenforceable as long as the government holds the property. United States v. Alabama,

313 U.S. 274 (1941). See United States v. Lewis County, 175 F.3d 671, 678 (9

Cir.),

cert. denied, 528 U.S. 1018 (1999) (foreclosure against federally owned property

impossible without consent of the United States). In a series of early decisions, however,

GAO advised that the acquiring agency could use its appropriations to extinguish the lien

if administratively determined to be in the best interests of the government, for example, to

clear title prior to disposition of the property. B-40548, Jan. 26, 1945; B-41677, May 8,

1944; B-28443, Dec. 9, 1943; B-21817, Feb. 12, 1942.

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indicated that the federal government’s immunity applied to

state motor vehicle license plate and title registration fees.

21 Comp. Gen. 769 (1942); 4 Comp. Gen. 412 (1924); 1 Comp.

Gen. 150 (1921); 15 Comp. Dec. 231 (1908).

• Travel-Related Taxes. When the federal government rents

rooms by entering into a direct contractual relationship with a

hotel or motel, then the government is entitled to assert its

immunity from local taxes. 55 Comp. Gen. 1278 (1976). The

Department of Justice reached the same result in 5 Op. Off.

Legal Counsel 348 (1981), opining that the Office of the Vice

President was not required to pay local hotel taxes when

reserving a block of rooms for an official trip.

221