cT~ar- -f \ . 624

tb Qa~tac11w' essni. NOV 2 2 197

Charles D. HylanderDzwtr,* IBD

Racp"t for 1U1a

Wtto Atom4 fmZWat tht0as fn Zatat Dmtpt(, at )propiet of-a $30 zWln taatt rMcwded An Amjm-t 1972 AA =IB' pelrtos7.4 nrst-vr pos4.tiMA w-uiatari nwmte

W weA to realn catlu s g. q* bhoweeWroe wd- picee ttk te WrxtTemtn a ( " 5'.

kmt "SI m, 1" WoS uior pa 4r _stf- tts Iw r a t& a a"nt yn fah =Mt ts mma reqtn-

mint fa'ad bl gatuawd Stir M olWttnAS (2) on AI leal

- A C*OU54 ti- min*S Co ' qMptr4ft tnM. FM4W tar CSqijwt

UAW t*h prowi ta oa tlt aX at the " F ,-w mods. Me sesprvqwemoa Uof flsqap SWN ~rdati~ to 191 t 1 fde folaw.

50o 292, A-tQ44tfl-t the Cwt4s Pro$45 to GarrMmt as piWvlIcIA of pet I of tWs Mot to he VWea.)

ad t ib fisca yew 197

pvv>siam of $ Aaa 1 cdtfr Sb pnpost sqbe used am a leaow gi buda." (WwAafcsw t zgwMiA&)

he qaSta af USiaC atbs PaVPposwatt Us. IteM mmh 4#DWSZAF" I-uis, tabmicl Aa=tao smA Ml'ctti Anit.oetoL bte Popflto . W" oasjs ted to so muocs146mutnting W. undetotd that it the"=* AwansWaft hot Usedfo p~opuUt xpcses th d14 nAot)c WafbS tarw s t

For ftw4 ye 1972 th Cccpwa for the fr ti" mAo *epnifNpcplatiola s itm qptiaticsi4 in the ebsao of boc eaal"

ap=ML 0 the fm~lp awmow Oad*o"KMile0 tw flo rw 197Y a M.t~ine WMMpml I

DWIUgtX 4 s ot 1X* tw& IM AID17Ci1&t. a .SU* jwonst with f~gt~ b m~1ejo

lm~~~~~~w "i satsA

1964 )

Ovm V* -4 74m, O Ag L.A~.o

fuids :w U t 7W I AID a Ave"4 10, L92Wodw t) ,&1LaPddr-VWt aVWorUtU uiLtWa fWA frm tba

Madid-sca projuti ad3 SIAUMsOGN rwluaw gi* rw tbo suitjvo~t.~yrueoift t .b"Cat±cm at sw mmm at And cpe2MtAJO NW#e TheMU tati4 oa tog' trs maetilan ;U~

ml1~a OW .In taol la Attmbmt A, Wm as

p.8k t. Reada~~i~t~t luag A& AXWVra

ottiot Ims

AemuoJ ta oh4lg4 be mtsw *m s b dwt ri as ^

Anm Am" . &

vain fl97 IW3 MrA tbb pqmlauua

TO at UN r otbw cC lb dwujf^ POP-1.

SW,. ye 1971 md $awu fUD =W bo Wool&6 ~da~a4

-.- A fw - %. O-... - ..

4pklNF$p gww6W# be wailaIe W- w;

or fm ow P"a sw% am Or ?- easM-vlpmtlg rZ ms 'tug

_0 2-la

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F40 Am-

b~~~~~~~~~~~s -X : e %XI X4

'tabiptabumms *# at J4S 0j YIp 1 ofl~ t~if Mn%.CbnuSt. at isM6o a i h CWtt at Q.Pnw~a "Ovid" l2t

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mat Jaststten wo tie Cwptzdtw

Wa sd pZ±Oh £4- th CatZAa~tetf cC U of i

h p ist. "w Xth

ADX Sblnts th4 Wo afthWlt Is ailabie to itk inlu tb*Cswzimda Jtolttc tr 197), bi* JAist citr4t o

-pu MU f W', ,197)

Y ltvcit the opaOai A as AOtesvt 1a atc" X IntAA At aak ft be SW e!

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ltwvxe a~st ttt fLa tl.Dal yea 1973 to thva a

tws Pwazv2. 197, 4 the rat of 4. MlM,

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627

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toazw 3swa-vs a_- B~tolfld. -21tift <Xof the Assitam A~._q?1961, Wa <

im" to tbdk t r0i th r _0796 NbLlc 'ow 9DA37, sphm4 NsW*Oz 11. 1567, 81 3tat. MI8. fla=. 3spot me., 9.0-5%1 ac0u1 L\3 thi bull '*lah *sh'-"INeUS7 Va" .skcte orte~iaA~t~oAt 1967 wvpllmodim pap 30 aMi 31. the awrsis o etift 292 of !Ttl Xs an

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Ga bia at IWgiSlOM htoI aM th easu i of

th tooppaU prbln (UdSf-tsectlau 29t,9 ve tuhz* it oleAw' that eoate eutbcived to eair7 out

!it3A X pupoms mW ct be expended for saw *otr VWrPo~s.

ff deb-nOb aithOritya out an p 3 of yaw ag iU.@ ait" that fuids become dsobMla mbed ony tim origtm3.

tMM r Cease to aist. at te f hen be ovs utu toflSao. 3bI.a olnts ente'. Into for the saw gsomara 'posesAs us wiwutstmm the lstenttaacis thm bas Usn inoemm*a-tics of GSpomutX a uew d±c th# ftf 'WM .r1W1aUl obdatA40.h~ther wayI the sowo.t of fuedizf thoss, kwitca a been cbe~dIna othar vordsp fiscia yew 1.973 fuds a ewre bee ift used to fund

obl s aw d In pJnt yes. Ibis clsaw2r is improper intat fiscal yew tands st available only to 00 oblipjIar'ed d rIg the f-sem yew for l4ch ap~caristed.

WhIle In roW atom tim fandig oSf tbo population o baitic. y be shifted b e.a f*s qXp'lated for the va---

_d Scooic the authority enif''thew ie applicable Nnot be used ae 0 60ce to maM. th_at of sectio. 29 that t tw aft sed themi fkor p*op-

pwposis. AMD)'s Oema'ml Cwmal. gives, no cmasidertica to Whs pro-Visi of secs 292 In is apiaom of Jw° Us I912-

In view of the 1f'eg.ag and la spocific ansWe to y~w queationS,It Is oa vim tiat A'Ds =smtit4Um of curreut yew fuds Is not_u~rIs, end tim urn of firm suthwused Aw popgation ar,;ses

*Wrin the fiml yvars 1,968 thr#t 1 Ml ot r .thm oawpoess am pmpope 1Jr AID, Ukwise is Mt aucrizad.

aul 6. @bPi4g

General CM8401a.~~~~~~~~*~

ATTACHMENT A 629

INTERIM SUNi4ARY OF $10 MILION TRANSACTIONIN AID'S POPULATION ACCOUNTS

This interim summary highlights a $10 million transaction inAID's prior-year and current-year population accounts. The trans-action is designed to augment the Agency's Security SupportingAssistance capability in fiscal year 1973. It appears to beinconsistent with the spirit, if not the letter, of the law regardingthe obligation and deobligation of funds, and the directives of theCongress specifying the use of certain funds for population assistanceonly.

During fiscal years 1968 through 1971, no separate appropriationswere made for AID's population programs, but such programs were autho-rized to be funded from any appropriation category. During those years,many population projects were funded from the Security SupportingAssistance appropriations. In fact, over the years, a large pipelineof these earmarked funds built up and remained unspent (unliquidated)for specific population projects in early fiscal year 1973.

AID apparently believes that its population program is overfunded,and that its Security Supporting Assistance capability is and willremain underfunded. The $10 million transaction demonstrates that AID*is acting to realign these priorities, as AID sees them, by takingfunds away from the population program and attempting to augment the.Security Supporting Assistance capability in fiscal year 1973.

an June 12, 1972, the Bureau for Program and Policy Coordination V(FPO) obtained an AID legal ruling that fiscal year 1971 and earlierSecurity Supporting Assistance funds could be deobligated for populationpurposes, and reobligated for Security Supporting Assistance purposes.

We are not sure the AID legal ruling will support the subsequent$10 million transaction for several reasons. First, the "reob" authorityof the annual appropriation act discussed in the ruling expired onJune 30, 1972. As of early October, it was uncertain whether "reob"authority wrill be available for fiscal year 1973.

W vaSecond, the ruling nullifies the fact that the funds, earmarked by

the Congress for population assistance only. The ruling that the fundsmay be deobligated and used for other purposes would seem to be incon-sistent with the specific-legislative mandate that they be used forpopulation assistance only. '

* ~ ~ ~~~~~~~~~~~~~/ ,w

630

/

Finally we question whether there should be a deobligation offunds without a corresponding reduction or termination of the projector activity which gave rise to the original obligation.

The legal ruling is the only indicated authority awe have foundfor the transaction. After obtaining the legal ruling, but extendinginto fiscal year 1973, PPC arranged for the AID Controller's Officeto deobligate $10 million of prior-year Security Supporting Assistancefunds from continuing population projects, and to replace the fundsto the same projects by obligating fiscal year 1973 new obligationauthority (NOA) from the population appropriation.

By early August 1972, the AID Controller' s Office had identifiedmore than 20 ongoing population projects -rith unspent prior-yearSecurity Supporting Assistance funds totaling about $10 million. Anofficial in the Controller's Office told us they insisted on gettingsomething in writing from PPC-before completing the transaction.

We obtained a copy of a memorandum dated August 9, 1972, fromPPC to the AID Controller. It is quoted-below. -

'"Subject: SA deobligations"

"Because of immediate high priority need for SA fundsplease deobligate $10,000,000 of prior-year SA funds frompopulation projects managed by AID/W offices. This willnot affect program implementation in the short run as theseprojects have adequate pipelines. As needed, funds shouldbe restored to these projects by using FY 1973 NOA from thepopulation account."

The PPC memorandum arrived at the AID Controller's Office onAugust 10, 1972. On the same day, the Controller's Office recordedthe transaction deobligating the prior-year funds from the populationprojects and simultaneously obligating fiscal year 1973 populationfunds for the same projects under Continuing Resolution authority.

We tried unsuccessfully to identify and confirm the "immediatehigh priority need for SA funds" which prompted PPC to initiate thistransaction to augment Security Supporting Assistance capability infiscal year 1973. Based.on discussions with several AID officials,however, it seems that AID's concern is for Security SupportingAssistance this fiscal year to a Middle Eastern country.

-2-

< -

The $10 million transaction described above appears to be questionable.

There was no valid reason provided for the deobligation, and the basis

for a reduction of this year's population assistance capability is not

evidenced. 'Moreover, theAgency's indicated intention to use the funds

congressionally earmarked for only population assistance as an augmen- 4.,

tation of this year' s Security &upporting Assistance capability would

render meaningless that earmarking requirement.

We shall appreciate being advised of AID's views on the transaction

as described in this summary. We would also appreciate being advised of -

any other pertinent facts or data relative to the transaction, or any

other information deemed appropriate for a fuller understanding of the

transaction.

-W .. .r e

W~~~~~~~~~~~~~~~~~~~~~~~

' : A - _

-. ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ', .,__

632

DEPARTMENT OE STATEAGENCY FOR INTERNATIONAL DEVELOPMENT

WASHINGTON. D. C. 20523

ASSISTANT,DmIKISTRATOR

November 1, 1972

MEMORANDUM FOR: Mr. Clarence A. SieglerSupervisory AuditorGeneral Accounting Office

SUBJECT: Interim Summary of Population Transaction

At the conclusion of our discussion yesterday morning, you asked meto comment on the subject summary. iwould-iaake three basic points.

1. It is my understanding that the funds--dobligated in Augusthave in point of fact not been reobligated but will be shortly aspart of the next tranche of supporting assistance for Jordan.

2. You argue that the reobligation authority of the annual Appro-priations Act expired on June 30, 1972. My understanding fromthe office of AID's General Counsel is that the Joint Resolutionof July 1 continued the Agency's authority to deobligate andreobligate. In view of the fact that-there has not been anyrecbligation in this instance, it seems to me that the matter ismoot.

3. It is our intention to insure that the Congressional earmarkingfor fiscal 1970, as concerns population funding, shall remainintact. W~hat funds will be used to replace the $10 million of SA

: is, for the moment, uncertain.

Lloyd esDeputy Assis nt Administrator

for Prog m and Policy

.633DEPARTMENT OF STATE

;, AGENCY FOR INTERNATIONAL DEVELOPMENT

October 5., 1972

GAO, Mr. Francis K. Buige -

You inquired about the legal adviceon the deobligation of certain SA

I funds. I.told you that I thoughtthere had not been a written view. .I was wrong, and here is the-opinionwe received from the General Counsel'soffice last June.

Ll Aonnes

Attachment: Memo Hoskins to S. Brownof June 12, 1972 -

"Application of Deob/ReobAuthority to PopulationGrants"

- ~~~~~~~~~~-i

et *A r up, (at crov).|lol-mo. . -

UNITED STATES GOVERNMENT

MemorandumTO ' XPC/RS, Mr. Sidney Brown . DATE: June 12, 1972

RaOM GC6/LPC, John A. Hosk,

SUNJgcT:Application of Deob/Reob Authority to Population Grants :.7

You have inquired. whether population grants utilizing funds appropriated priorto this fiscal year may be deobligated and reobliCated for the purpose forwhich initially appropriated instead of for population programs. We have ...

concluded that population grants using FY 1971 and earlier funds may be4coblieated and would, thereafter, be available for reobligation for eitherPopulation purposes or for the purpose for which the funds were originallytPrompriated. Prior to this year section 292 read as folloWs:

%ec. 292. Authdrization. Of the funds provided tocarry out the provisions of part I of this Act for thefiocal year 1970, $75,000,000, and for the fiscal year1-7 4a$1,ooo,000, shall be available only to carry out rthe.purposes of this title and, notwithstanding any other3rovision of this Act, funds used for such purposes

* May be used on a loan or grant basis." . . -

htior to PY 1972 no specific appropriation was made for population programs,but #uch programs were authorized to be funded from any appropriation0t4orY. TRie authority to reobligate such population grant funds, once

ted for a population purpose, is governed by the "deob-reob" authority s* the Gnrnual appropriation act. The current authority reads, in part,

fa ollows:

i DioUnts certified pursuan't to section 1311. .. as having been* Obligated against appropriations heretofore inade. .. for the same-e

general purpose as any of the subparagraphs under "economic9Beiotance" and "security supporting assistance" are herebyContinued available for the same period as the respectivePPropriations in such pubparagraphs for the same general

Aft ing this language to prior year populaLion grants, such grants are* blitiona certified pursuant to section 1311 and are therefore continued ..

' "41ble for the same period and for the some general purpose as the! 'I)1 IL'tions against wlhich the obligretion was originalloy mnde. This

s for example, that funds origin,31y appropriated under developmentoor sUpnorting assistance line items and subsequently ooligated for

.A ' .. . . .

RIVN . . , . ' ' ' , . ,,',: -, . .X b:., ', .-_

9~i I

. , I . .. ; - it 6351

-2-.

;xJileatin purpoa co Purt uant to FAA section 292 may now be deobligated 4m," rcobligatcd for the development loan or soupporting poplat stimtnopurpose Ifor which they were 6iriginally appropriated. At the s~6tmhwvr

cct~iSn 292 authorizn PoPuslation grants to be obligated from any of thefundah provided to carry out part I of the FAA. The "funds provided"1ncludes the annual availability of bridge itezms, one of which is estimnated dcoblig.ation~rduring the current fiscal' year. For this reason population '.rants. may be dcobligatdd -and reobligated also for population purposes.rue above analJysis does not apply, however, to 1'Y 1972 funds, since the.Y 1972 appropriation act inlcluden a population line item appropriation.:t follows that such fuxnds appropriated and obligated for popul~ation purpones.'rao, upon deobligation' be used only for population purposes.

C: A.Z. Gardiner, Go.Ad.W. Henahaw, (IC/PH - . .

/ .........-...--...