B-316915, Election Assistance Commission--Obligation of Requirements Payments, September 25, 2008
Decision
Matter of: Election Assistance Commission—Obligation of Requirements Payments
DIGEST
Generally, under 31 U.S.C. sect. 1501,
when entitlement to funds is established by statutory formula for a state, the obligation
arises by operation of law and the amount should be recorded. B-164031(3).150, Sept. 5, 1979. At issue here is whether statutory
preconditions, which must be met before the Election Assistance Commission
(EAC) may distribute funds to states, affect when an obligation is
incurred. Under the Help America Vote
Act of 2002 (HAVA), the EAC must pay states statutory formula payments if they
file a statement certifying they have met certain preconditions. We conclude that these HAVA funds are amounts
“required to be paid” within the meaning of 31 U.S.C. sect. 1501(a)(5)(A) and the
obligation arose by operation of law.
DECISION
The Election Assistance Commission (EAC) Inspector General (IG) has requested a decision regarding EAC’s obligation of certain payments made under the Help America Vote Act of 2002 (HAVA). Letter from Curtis W. Crider, IG, EAC, to Gary L. Kepplinger, General Counsel, GAO, July 23, 2008 (Crider Letter).[1] HAVA authorizes EAC to make payments to states, under a formula, for certain enumerated purposes, including meeting the requirements of Title III of HAVA. HAVA refers to these payments as “requirements payments” that a state may receive if it certifies that it has met certain preconditions under the statute including inter alia that it has filed a state plan, filed an administrative complaint procedure plan, and appropriated matching funds. At issue in this decision is whether HAVA’s preconditions on a state’s receipt of the requirements payments affect when EAC incurs an obligation of its requirements payments appropriation. We conclude that despite the preconditions, the requirements payments are “required to be paid” within the meaning of 31 U.S.C. sect. 1501(a)(5)(A) and are thus obligated by operation of law.
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 of the request.[2] The IG included in its request for a decision
in this matter EAC’s legal views and relevant factual material. Memorandum from Office of the General
Counsel, EAC, to Curtis Crider, IG, EAC,
BACKGROUND
The Help America Vote Act of 2002 established the EAC to
assist in the administration of federal elections and charged the EAC with
distributing payments to states under its authorized funding programs. Pub. L. No. 107-252, 116 Stat. 1666 (
HAVA contains an allocation formula based on the voting age population in a state to determine the amount of the requirements payment that each state is to receive. 42 U.S.C. sect. 15402. Before a state may receive its statutory allocation, it must file a certification that it has met certain requirements, including compliance with state plan requirements, an administrative complaint procedure plan, and have appropriated funds for carrying out the HAVA-prescribed activities equal to five percent of the amount to be spent for such activities (matching requirement).
42 U.S.C. sect. 15403.
The IG informed GAO that EAC recorded obligations for the
2008 requirements payment appropriation of $115 million pursuant to 31 U.S.C. sect.
1501(a)(5)(A). EAC Conversation.[4] EAC also advised us that it was unlikely the
requirements payments would be made before the end of the 2008 fiscal year and
that the obligation would preserve funds to make requirements payments when the
states satisfied the preconditions. Id. EAC acknowledged that if a state did not
satisfy the statutory preconditions through a certification, then the state
would not receive the requirements payment.
On
DISCUSSION
An agency is required to properly record its
obligations. 31 U.S.C. sect. 1501. The standards for the proper recording of
obligations are found in 31 U.S.C. sect. 1501(a).
B-300480.2,
The question here is whether the requirements payment is
an amount “required to be paid” under section 1501 despite the preconditions
set out in section 15403 of HAVA. In a
1979 decision, we addressed a somewhat similar situation. B-164031(3).150, Sept. 5, 1979. This decision involved Medicaid grants to
states to cover a share of the total amount expended by states for medical
assistance under an approved state plan.
The Secretary of Health, Education, and Welfare (HEW) (now Health and
Human Services) was required to make quarterly payments to states. The Secretary underestimated the Federal
matching fund amounts and recorded as an obligation an incorrectly low
figure. We distinguished between the government’s legal obligation and the
amount to be paid under the obligation.
We stated that the obligation arose by operation of law and the
Secretary’s failure to record the actual amounts owed did not alter the
government’s obligation to pay correct amounts.
Similarly, in this case we distinguish
between the legal obligation and the payment of the obligated amount. The preconditions do not render uncertain
the entitlement. Under HAVA, states are
eligible for an amount readily determinable by application of an allocation
formula. The uncertainty here, such as
it is, goes to whether EAC may disburse the obligated amount. In our view, the entitlement is set by law;
the disbursement is set by a state’s submission of the requisite
certification. EAC has no evaluative
role. States must simply file a
statement that the governor, or chief executive officer of the state, “hereby
certifies that it is in compliance with the requirements” under HAVA. 42 U.S.C. sect. 15403(a). Whether
a state will so certify is the only uncertainty and only affects EAC payment
and the state’s receipt of its formula amount.
An obligation
serves as the basis for the scheme of funds control that Congress envisioned in
the various fiscal laws, including the Antideficiency Act. See
B-300480,
In that regard, EAC’s recording of its obligation for the
requirements payments in fiscal year 2008 was appropriate. 42 Comp. Gen. 733, 734 (1963); see also McDonnell Douglas Corp. v.
CONCLUSION
HAVA’s preconditions of a state certifying compliance with various preconditions, including having a state plan, an administrative complaint procedure, and having met matching requirements, do not implicate EAC’s obligation of requirements payments. The preconditions do not affect the fact that the requirements payments are “required to be paid” within the meaning of 31 U.S.C. sect. 1501(a)(5)(A) and are thus obligated by operation of law.
Gary L. Kepplinger
General Counsel
[1] In July 2008, EAC initiated a telephone conference in which it inquired about the obligation of requirements payments. Telephone Conversation between Curtis Crider, IG, EAC; Roger Larouche, Deputy IG, EAC; Gavin Gilmour, Deputy General Counsel, EAC; Thomas H. Armstrong, Assistant General Counsel for Appropriations Law, GAO; and Monica Anatalio, Senior Staff Attorney, GAO, July 15, 2008 (EAC Conversation).
[2]
GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (
[3] In the EAC OGC Memorandum, EAC cites B-214937 for the proposition that GAO has specifically held 31 U.S.C. sect. 1501(a)(5)(A) applicable to formula grant programs that had elements like matching fund certifications and state plans. However, this decision did not directly address whether section 1501 was applicable when the state must meet statutory preconditions before receiving the funds.
[4] As has been its practice, the EAC did not enter into grant agreements with states in order to obligate or issue the requirements payments. EAC OGC Memorandum.
[5] In its two letters, EAC misstates some
facts. To clarify one misstatement, it
was OIG that questioned EAC’s obligation of requirements payments before
certification of statutory preconditions, not GAO. We explained to EAC and the IG that an
official GAO position on matters of appropriations law is available through
GAO's formal decision process. We are always
available to discuss issues by phone.