B-317022, United States Postal Service Office of Inspector General--Implementation of Postal Accountability and Enhancement Act Section 603, Part 1, September 25, 2008
Decision
Matter of: United States Postal Service Office of Inspector General--Implementation of Postal Accountability and Enhancement Act Section 603, Part 1
DIGEST
The United States Postal Service (USPS) is exempt from “Federal law[s] dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds,” unless otherwise provided. 39 U.S.C. sect. 410. As a component of USPS, the Office of Inspector General (OIG) is covered by the same exemption.
Since the statutory language authorizing direct appropriations to OIG is ambiguous, OIG should work with Congress to obtain a provision in the continuing resolution to ensure continued funding of OIG operations.
USPS may not supplement OIG’s appropriations with additional funds, because doing so would constitute an augmentation. Agencies may not augment their appropriations because it would interfere with the congressional prerogative to control agency activity.
DECISION
The Office of Inspector
General (OIG) of the United States Postal Service (USPS) requests a decision
regarding the implementation of section 603 of the Postal Accountability and
Enhancement Act, Pub. L. No. 109-435, 120 Stat. 3198, 3240--41 (
Our practice when rendering decisions is to obtain the
views of the relevant agency to establish a factual record and the agency’s
legal position on the subject matter. GAO,
Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP
(
BACKGROUND
USPS is an independent establishment within the executive branch. 39 U.S.C. sect. 201. Congress charges USPS to “plan, develop, promote, and provide adequate and efficient postal services at fair and reasonable rates and fees.” [1] 39 U.S.C. sect. 403. USPS is managed by an eleven-member Board of Governors. 39 U.S.C. sect. 202. Nine members of the board are appointed by the President, by and with the advice and consent of the Senate. 39 U.S.C. sect. 202(a). The Postmaster General and Deputy Postmaster General, selected by the nine appointed members, are the remaining two board members. 39 U.S.C. sections 202(c), (d).
USPS OIG employs more than 1,100 auditors, investigators, and professional support personnel stationed in more than 90 offices. Office of Inspector General, United States Postal Service, Publication 291, Discover the Office of Inspector General, available at www.uspsoig.gov/Pub291_FY08.pdf (last visited Sept. 22, 2008) (Publication 291). To carry out the duties of the Inspector General Act, the USPS Inspector General “may initiate, conduct and supervise such audits and investigations in the United States Postal Service as the Inspector General considers appropriate. . . .” 5 U.S.C. App. 3 sect. 8G(f)(3)(B)(i). OIG performs such audits, reviews, and investigations to “prevent and detect fraud, theft, and misconduct[;] promote economy, efficiency, and effectiveness[;] promote program integrity[; and] keep the Governors, Congress, and Postal Service management informed of problems, deficiencies, and corresponding corrective actions.” Office of Inspector General, United States Postal Service, Office of Inspector General Semiannual Report to Congress: October 1, 2007--March 31, 2008, available at www.uspsoig.gov/sarcs/Spring08.pdf (last visited Sept. 23, 2008) (Semiannual Report), at 2. Ultimately, OIG’s mission is to “help[] maintain confidence in the postal system and improve the Postal System’s bottom line.” Publication 291. In the first half of fiscal year 2008, OIG issued 233 audit reports with a financial impact of almost $831 million, and completed 3,754 investigations. Semiannual Report at 3, 4, 64.
OIG expenses are paid from the Postal Service Fund, a
revolving fund established within the United States Treasury. Request Letter. See
39 U.S.C. sect. 2003(a). Amounts contained
in the fund are considered “no-year funds,” available without fiscal year
limitation. 39 U.S.C. sect. 2003(a). See
B-221498,
The Postal Accountability and Enhancement Act became law
on
OIG states that “[a]ppropriations acts are anticipated to
specifically provide for payment of the expenses of the Office of Inspector
General out of the Postal Service Fund. . . .”
Request Letter. For fiscal year
2009, the Financial Services and General Government Appropriations Act, 2009
bill would appropriate for OIG operations “$239,356,000, to be derived by
transfer from the Postal Service Fund and expended as authorized by section
603(b)(3) of [Public Law 109-435].” S.
3260, 110th Cong. (2008). In
its request, OIG observes that “clear understanding of the laws governing the
obligation, expenditure, and accounting of the Postal Service Fund funds specifically
appropriated for the Postal Service OIG is vital to the OIG’s successful
implementation of section 603.” Request
Letter.
DISCUSSION
- Do laws “dealing with public or Federal
contracts, property, works, officers, employees, budgets, or funds” in title
31, United States Code, such as the miscellaneous receipts provision of 31
U.S.C. sect. 3302(b) and the Antideficiency Act, remain inapplicable to the USPS
OIG pursuant to 39 U.S.C. sect. 410(a) after the provisions of section 603 of Public
Law 109-435 become effective?
By statute, USPS is exempt from the application of certain fiscal statutes that otherwise apply generally to executive branch agencies. 39 U.S.C. sect. 410(a). With the exception of certain situations listed in the statute but not relevant here, section 410 of title 39 of the United States Code exempts the “exercise of the powers of [USPS]” from all “Federal law[s] dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds.” The miscellaneous receipts statute requires agencies receiving funds for the government to deposit those funds into the general fund of the Treasury absent statutory authority permitting the agencies to retain those funds. 31 U.S.C. sect. 3302(b). The Antideficiency Act, among other things, prohibits agencies from obligating or spending appropriated funds before receiving, or in excess of, an appropriation, 31 U.S.C. sect. 1341(a), and requires agencies to establish a funds control system to ensure compliance with the act, 31 U.S.C. sect. 1514(a).
The Antideficiency Act and miscellaneous receipts statute are both federal laws dealing with “funds.” We have specifically noted that the Antideficiency Act is “inapplicable to the Postal Service.” B-221498, May 2, 1986 (because the Antideficiency Act is not listed as an exception in section 410(b), nor is the Act applied to USPS under any other statute, the Antideficiency Act does not apply to USPS in the context of franked mail); B-164786, Oct. 8, 1970 (Budget and Accounting Act, as well as Antideficiency Act, are “not applicable” to USPS).[2]
We have not opined on the applicability of the miscellaneous receipts statute to USPS. However, we note that USPS is directed to deposit all its revenues, its appropriations, its interest on investments, and any transfers from the Forfeiture Fund in a revolving fund established in the U.S. Treasury called the Postal Service Fund, 39 U.S.C. sect. 2003, which is available to USPS without fiscal year limitation to carry out the functions and powers of USPS. This is, of course, an explicit statutory exception to the miscellaneous receipts statute and supersedes it.
OIG is clearly a component of USPS. The Inspector General Act of 1978, as amended, requires the USPS Board of Governors to “establish[] and maintain[] in [USPS] an Office of Inspector General.” 5 U.S.C. App. 3 sect. 8G(b) (emphasis added). Congress bestows upon the Board the authority to appoint, and if necessary, remove, the Inspector General. 39 U.S.C. sect. 202(e)(1). Furthermore, the Inspector General Act specifically states that the USPS Inspector General “shall be under the authority, direction, and control of the [Board of] Governors with respect to audits or investigations, or the issuance of subpoenas, which require access to sensitive information. . . .” 5 U.S.C. App. 3 sect. 8G(f)(3)(A)(i). Under such authority, the Board may, in certain situations “prohibit the Inspector General from carrying out or completing any audit or investigation, or from issuing any subpoena. . . .” 5 U.S.C. App. 3 sect. 8G(f)(3)(A)(ii). In sum, OIG is a component, albeit one with significant independence, of USPS.
Section 603 of the Postal Accountability and Enhancement
Act does not interfere with the statutory exemption afforded USPS, and to OIG as
a component of USPS, from federal fiscal statutes. The fact that section 603 authorizes funds to
be appropriated from the Postal Service Fund does not implicitly repeal 39
U.S.C. sect. 410. Repeals by implication are
strongly disfavored.
- For
fiscal year 2009, may USPS continue to fund OIG activities out of the Postal
Service Fund until an appropriations act is enacted absent a continuing
resolution provision appropriating funds for the OIG as an anomaly? If not, what language should be included in a
continuing resolution to permit the USPS OIG to continue to operate until an
appropriations act is enacted?
Implementation of section 603 of Public Law 109-435 presents
a conundrum for OIG. Generally, when
Congress does not enact appropriations laws before the beginning of a fiscal
year, it passes temporary funding measures called continuing resolutions to
continue government operations.[3] See
B-300673,
However, section 603 amends the statute establishing the
Postal Service Fund to make the revolving fund “available for the payment of .
. . all expenses of the Office of Inspector General, subject to the
availability of amounts appropriated under [section 603(b)] . . . .” Pub. L. No. 109-435, sect. 603(c)(2). Furthermore, the section provides that
amendments made therein “shall apply
with respect to fiscal years beginning on or after
For the sake of clarity and to ensure continued funding of OIG operations, as we discussed with your staff, OIG should urge Congress to include a provision in any continuing resolution to guarantee that no matter how one interprets section 603, OIG will continue operations. Should OIG require assistance to craft appropriate language for a continuing resolution, we can provide it informally.
- If USPS desires to increase amounts available
from the Postal Service Fund for the expenses of the OIG above amounts
appropriated for the OIG, how may it lawfully do so?
Agencies may not augment their appropriations. An augmentation results when an agency
obtains and retains money from outside sources without statutory
authority. B-307137,
However, section 603 amends the statute establishing the
Postal Service Fund to make that fund “available for the payment of . . . all expenses of the Office of Inspector
General, subject to the availability of
amounts appropriated under section 8G(f) of the Inspector General Act of
1978.” Pub. L. No. 109-435, sect. 603(c)(2)
(emphasis added). As written, section
603 imposes a limitation on the amount of expenses OIG may incur.[4] An agency may not receive additional funds to
extend its appropriation if Congress limits that agency’s operations to a
particular dollar amount. Absent
statutory authority, an agency may not operate beyond the level that can be
financed by its appropriation. B-308476,
CONCLUSION
USPS exemptions from federal fiscal laws, unless otherwise
excepted by 39 U.S.C. sect. 410(b), apply to OIG notwithstanding the enactment
of section 603 of the Postal Accountability and Enhancement Act. Because Congress may not enact a regular
appropriation for OIG operations before
Gary L. Kepplinger
General Counsel
[1] In 1877, the Supreme Court observed:
“The power vested in Congress [in Article 1 of the Constitution] ‘to establish post-offices and post-roads’ has been practically construed, since the foundation of the government, to authorize not merely the designation of the routes over which the mail shall be carried, and the offices where letters and other documents shall be received to be distributed or forwarded, but the carriage of the mail, and all measures necessary to secure its safe and speedy transit, and the prompt delivery of its contents. . . . The power possessed by Congress embraces the regulation of the entire Postal System of the country.”
Ex parte Jackson,
96
[2] See also B-291771,
[3] “Continuing resolution” is defined as:
“An appropriation act that provides budget authority for federal agencies, specific activities, or both to continue in operation when Congress and the President have not completed action on the regular appropriation acts by the beginning of the fiscal year.”
GAO, A Glossary
of Terms Used in the Federal Budget Process, GAO-05-734SP, (
[4] The Financial Services and General Government Appropriations Act, 2009 bill reinforces that limitation by appropriating approximately $239.4 million to OIG for fiscal year 2009. S. 3260, 110th Cong. (2008).
[5]
For example, transfers between appropriations without statutory authority
constitute an augmentation. An
unauthorized transfer is an improper augmentation of the receiving
appropriation. See, e.g., 23 Comp. Gen.
694 (1944); B-206668,