Case Information
*1 Authority to Use Funds from Fiscal Year 1990 Appropriation to
Cover Shortfall from Prior Award Year’s Pell Grant Program T h e P e ll G r a n t P r o g r a m ’s lum p su m a p p ro p ria tio n f o r fiscal y e a r 1990 m a y b e u s e d to p a y th e d e f ic ie n c ie s in th e p ro g ra m ’s fu n d in g fo r th e 1 9 8 9 -9 0 a w a rd year.
March 29, 1990 M e m o r a n d u m O p i n i o n f o r t h e G e n e r a l C o u n s e l
D e p a r t m e n t o f E d u c a t i o n
This memorandum responds to your request for advice concerning a dis pute between the Department o f Education (“the Department”) and the Office of M anagement and Budget (“OMB”) over the funding of the Pell grant program, 20 U.S.C. §§ 1070-1070f.‘ The question presented is whether Pell grant funds appropriated in the Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Act, 1990 (“FY 1990 Appropriations Act”), Pub. L. No. 101-166, 103 Stat. 1159 (1989), may be used to cover Pell grant program expenses for both the 1989-90 and 1990-91 “award years,” and in particular whether the program’s projected shortfall for the 1989-90 award year can be met by using appropriated funds in excess of the $131,000,000 that the FY 1990 Appropriations Act states “shall be available only for unfinanced costs in the 1989-90 award year Pell Grant program.” Pub. L. No. 101-166, 103 Stat. at 1181. We conclude that the lump sum appropriation in the FY 1990 Appropriations Act may be used to pay the deficiencies in the program’s funding for the 1989-90 award year.
I. Background
Title IV o f the Higher Education Act of 1965, as amended, authorizes the Pell grant program and declares that its purpose is “to assist in making available the benefits of postsecondary education to eligible students.” 20 U.S.C. § 1070a. The basic grants provided under the program are intended, 'S e e L e tte r fo r W illiam P. B arr, A ssistant A ttorney G eneral, O ffice o f Legal C o u n sel, from E dw ard C. S trin g e r, G e n e ra l C o u n se l, D epartm ent o f E du catio n (Jan. 12, 1990) (“ S tring er L e tte r” ), and a cco m p a n y in g M e m o ran d u m o f L aw (Nov. 13, 19 89 ) (“ E ducation M em o ran d u m ”). within statutory limits, to meet up to sixty percent of an eligible student’s cost of attendance. Id. § 1070a(b)(l), (3). The statute also sets forth criteria of eligibility, expected family contributions, and the amount of each grant. Id. §§ 1070a to 1070a-4.
Congress has funded the Pell grant program with appropriations that are available for obligation over a period of two fiscal years. The federal government’s fiscal year begins on October 1 and ends on the following September 30. See 31 U.S.C. § 1102. An “award year” is defined at 20 U.S.C. § 1070a-6(3) as “the period of time between July 1 of the first year and June 30 of the following year.” Thus, a Pell grant award year begins three months before the start of a fiscal year and runs through the first nine months of that fiscal year. Generally, Pell grant appropriations have been justified in budget submissions to Congress for the next award year, i.e., the award year that will begin nine months after the start of the first fiscal year covered by the appropriation. See Stringer Letter at 1; Letter for Lynda Guild Simpson, Deputy Assistant Attorney General, Office of Legal Coun sel, from Rosalyn J. Rettman, Associate General Counsel for Budget, Office of Management and Budget at 9 (Feb. 6, 1990)(“Rettman Letter”).
Budget estimates of the cost of the Pell grant program for a future award year depend on several variables, including the number of eligible students and the extent of family contributions, that are difficult to predict. There is also a substantial time lag between the submission of a budget request to Congress based on estimates of funds that will be needed, and the com ple tion of the award year for which appropriations have been made, when the actual costs of the program can finally be known. Education Memoran dum at 3, 4. Thus, the amounts appropriated for the program in a given fiscal period and the program’s actual cost in the corresponding award year almost inevitably fail to match. The authorizing statute provides methods for handling these mismatches. Section 1070a(h) of title 20, U.S. Code provides for the disposition of excess funds, and section 1070a(g) provides for the Department to make program cuts by applying a “linear reduction” formula to certain grants if appropriations for any fiscal year do not suffice to satisfy fully all entitlements.2
The Pell grant program has suffered from recurring funding deficiencies that began in the late 1970s. Congress usually addressed these deficiencies
! 20 U .S .C . § 1070a(g) provides as follows: (1 ) If, for any fiscal year, the funds appropriated for paym ents u n d e r this su b p art are insufficient to satisfy fully all entitlem ents, as calculated under su b section (b) o f this section, the a m ount paid w ith respect to each entitlem ent shall be— (A) the full am ount fo r any student w hose expected fam ily co ntrib u tio n is $ 2 0 0 or less, or (B) a percentage o f that entitlem ent, as determ ined in accordance w ith a sch ed u le o f reductions established by the Secretary for this purpose, for any stud ent w h ose e x pected fam ily contribution is m ore than $200. (2) Any schedule e stablished by the S ecretary for the purpose o f paragraph (1 )(B ) of this subsection shall contain a single lin e a r reduction form ula in w hich the p ercentage reduction increases uniform ly as the entitlem ent decreases and sh all pro vid e th at if an en titlem ent is reduced to less than $100, no paym ent shall be m ade.
by providing, in annual appropriations acts between 1979 and 1987, that the lump sum appropriation would first be available to meet any deficiency from the award year that was in progress when the fiscal year began. For ex ample, the FY 1979 Appropriations Act, Pub. L. No. 95-480, 92 Stat. 1567, 1579 (1978), provided that “amounts appropriated for basic opportunity grants shall first be available to meet any insufficiencies in entitlements resulting from the payment schedule . . . published by the Commissioner of Education during the prior fiscal year.” This language was slightly altered beginning with a FY 1983 Appropriations Act, Pub. L. No. 97-377, 96 Stat. 1897 (1982), which stated that “amounts appropriated for Pell Grants shall be available first to meet any insufficiencies in entitlements resulting from the payment schedule for Pell Grants published by the Secretary of Education for the 1981-1982 academic [i.e., award] year.”3 During this period, the “Budget Justifications submitted by the Executive Branch reflect a fairly, consistent view that the provisions were added to perm it use o f the appropriations for *3 the prior award year.” Education Memorandum at 8.
In 1987, Congress changed this practice by enacting a $287,000,000 supple mental appropriation. See Pub. L. No. 100-71, 101 Stat. 391, 421 (1987) (“Supplemental Appropriation Act, 1987”). This supplemental appropriation forestalled any need to state in the FY 1988 Appropriations Act that FY 1988 funds were to be first available to retire the shortfall from the award year then in progress. Moreover, no such language was contained in the FY 1989 Appropriations Act.4
Before the beginning of FY 1990, the Administration forecast a shortfall for the award year 1989-90 o f some $331,000,000. OMB informed Con gress that the Administration would impose the linear reductions mandated by 20 U.S.C. § 1070a(g) unless Congress appropriated sufficient funds to cover the projected deficiency. Congress, however, relied on the cost esti mates calculated by the Congressional Budget Office, which suggested a funding shortfall of not more than $131,000,000. See H.R. Conf. Rep. No. 274, 101st Cong., 1st Sess. 40-41 (1989); see also Pub. Papers of George Bush 1373 (Oct. 21, 1989) (President’s veto message on H.R. 2990, noting that legislation underfunded Pell grant program). In light of that lower estimate, Congress provided in the FY 1990 Appropriations Act that the Secretary would have an “additional” $131,000,000 to be “available only” for the anticipated shortfall. In relevant part, the statutory language reads:
For carrying out subparts 1, 2, and 3 of part A and parts C, D, and E o f title IV of the Higher Education Act, as amended, 3See S trin g e r L e tte r at 3; Education M em o ran d u m at 2 ,7 and A ttach m en t B (quo tin g relevant language fro m a p p ro p ria tio n s acts); R ettm an L e tte r at 2-3. O n e e x c e p tio n to this p attern should b e noted. L anguage sim ilar to that q u oted from the FY 1979 a p p ro p ria tio n a p p ea re d in the proposed b ill, H .R . 7998, 9 6 th C ong., 2 d Sess. (1980), fo r the FY 1981 a p p ro p ria tio n , b u t not in the final e nactm ent. E ducation M em orandum , A ttachm ent B at 2. 4See P u b . L . N o. 100-202, 101 Stat. 1329-1 (19 8 7 ) (“F Y 1988 A p p ro p riatio n A c t); R ettm an L e tte r at 3-4.
$6,044,097,000 together with an additional $131,000,000 which shall be available only fo r unfinanced costs in the 1989-90 award y e a r Pell Grant program . . . .
Pub. L. No. 101-166, 103 Stat. at 1181 (emphasis added).
The Department currently expects a 1989-90 award year shortfall of $265,000,000 over and above the $131,000,000 earmarked by the FY 1990 Appropriations Act. You have advised us that unless the Department can draw on additional funds from the FY 1990 appropriations to meet this shortfall, its only practicable recourse will be “to discontinue all further awards or payments to schools (and, indirectly, to students) or to announce a reduced payment schedule.” Stringer Letter at 3.
II. Analysis As a general proposition, “the absence in the terms of an appropriations act of a prohibition against certain expenditures under that appropriation implies that Congress did not intend to impose restraints upon an agency’s flexibility in shifting funds among activities or functions within a particular lump sum account.” 4B Op. O.L.C. 701, 702 (1980); see also General Accounting Office, Principles o f Federal Appropriations Law at 5-95 (1982) (restrictions on a lump sum appropriation contained in an agency’s budget request or in legislative history are not binding unless they are specified in the appropriations act itself). Thus, lump sum appropriations available to an *4 agency in a given fiscal year can generally be used to meet any program ex penses that are incurred within the same fiscal year. Presumptively, then, expenses incurred in the operation of the Pell grant program within FY 1990 — including program expenses incurred in the nine months of the 1989-90 award year that occur in FY 1990 — can be paid out of the Department’s FY 1990 appropria tion, unless Congress has determined otherwise.5 The central question therefore is whether Congress has restricted the Department’s presumptive authority to draw on the FY 1990 lump sum appropriation to meet the shortfall for the 1989- 90 award year. We conclude that Congress has imposed no such restriction. ’ T h is view acco rd s w ith p rio r C ongressional understanding o f the Pell g ran t app ro p riatio n . T h u s, the a p p ropriation fo r the p ro g ram in FY 1978 was found on la te r e stim ates to exceed the ex p en se s re q u ire d fo r the 1978-79 aw ard year. T his left som e $ 56 1,000,000 still a vailab le at the end o f the 1978-79 aw ard y e ar in June, 1979. T h e legislative history to Pub. L. N o. 96-123, 93 Stat. 925 (1979), reflects that C o n g ress u n derstood that that m oney rem ained available fo r o b ligatio n until S ep tem b er 30 , 1979, i.e., the end o f FY 1978. A ccordingly, C ongress understood th at that a m oun t could be spent before S e p te m b e r 30, 1979, to pay g rant aw ards for the 1979-80 aw ard year. A s the S enate R eport on H .R . 4 3 8 9 , a p re d e ce sso r o f Pub. L. N o. 96-123, stated, see S. R ep N o. 247, 9 6th C ong., 1st Sess. (1 9 7 9 ), “ (i]n o th e r w ords, all funds w ill be oblig ated during the fiscal years fo r w hich they w ere app ro p riated . T h e o nly d ifferen ce is that they w ill be used by students in different school [i.e., aw ard] years than w as o rig in ally planned. Both H E W and the O ffice o f M anagem ent and B udget agree th at this can be d o n e .” Id. at 116.
A. The FY 1990 Appropriations Act
Our starting point is, of course, the language of the FY 1990 Appropria tions Act itself. See supra pp. 70-71 (quoting statute). That language does not in terms limit the Department’s authority to use the lump sum funds only for program expenses for the upcoming 1990-91 award year. The language makes an appropriation of $6,044,097,000 for Pell grant program expenses without limiting the use of those funds to program costs arising in any single award year. The language then provides “an additional $131,000,000 to the specific purpose of paying off the 1989-90 award year deficiency; it does not, however, limit the use of the lump sum appropriation, nor does it state that the $131,000,000 which shall be available only for unfinanced costs in the 1989-90 award year Pell Grant program.” In effect, this proviso limits the use of the $131,000,000 to the specific purpose of paying off the 1989-90 award year deficiency; it does not, however, limit the use of the lump sum appropriation, nor does it state that the $131,000,000 is the only amount that may be used for retiring the deficiency. Thus, we see nothing in the express language of the FY 1990 Appropriations Act that prohibits the Department from using the lump sum appropriation to cover a prior award year’s deficiency if the $131,000,000 earmarked for that purpose proves insufficient.
Such a construction of the FY 1990 Appropriations Act accords with its legislative history. The Conference Report details the background to the FY 1990 appropriation, including the Administrations’s revised estimate of a $331,000,000 deficiency for award year 1989-90, OMB’s warning to Con gress that the Administration would seek to recover program funds from individual grantees if additional funds to meet the deficiency were not pro vided in FY 1990, and the Congressional Budget Office’s counter-estimate of a deficiency “o f not more than $131 million.” H.R. Conf. Rep. No. 274 at 40. The Report then states:
Based on this information, the conferees have provided an immediate appropriation of $131 million to cover the funding shortfall for the 1989/1990 academic year. Although the con ferees have provided explicit legislative authority for the use o f funds for the 1989 shortfall, the conferees do not necessar ily concur in OMB’s view that this language is necessary in *5 order for funds to be used for this purpose. The conferees note that OMB’s policy differs substantially from previous Administration practice in handling the financing of current year shortfalls. As a result of this 1989 appropriation and some 1989 savings achieved through the provisions cited be low [6], the conferees consider any attempt to impose a linear ‘ T h e “ 1989 sa v in g s " th a t the c o n fe re es ex p ec te d to a ch iev e w ere to com e fro m the b ill’s ch an g e s in P e ll g ra n t fu n d in g , s p e c ific a lly the fa c ts that it “ lim it[ed ] th e d iscretio n o f stu d en t a id a d m in istra to rs in
C o ntinued 72
reduction of Pell Grant awards in the current academic year to be both unacceptable and unnecessary.
H.R. Conf. Rep. No. 274 at 40-41.
Although this language is not free from ambiguity, we believe that it supports the Department’s position. The Report clearly states that the con ferees provided an “immediate” appropriation to be applied to the shortfall, but that they did not concur in the view that special language was necessary to achieve that purpose. Moreover, the Report notes that OMB’s view was contrary to prior practice, in which the Department had drawn on the lump sum to prevent linear reductions from taking effect without obtaining a spe cial appropriation earmarked for that purpose. These statements, in conjunction with the conclusion that the conferees would find linear reductions unaccept able, strongly suggest that the conferees believed the Department could, consistent with prior practice, also draw on the lump sum appropriation to prevent linear reductions if the $131,000,000 proved insufficient. The Report in no way demonstrates that Congress thought specific language, like that used in the past, was necessary for the lump sum to be used as the Depart ment intends. At most, the Report does not address that issue squarely. Under those circumstances, the Department’s presumptive ability to use the lump sum appropriation for any expenses incurred within the fiscal period applies.7
B. The FY 1979-1987 Appropriations Acts
OMB argues that the language Congress included in annual appropria tions acts from FY 1979 through FY 1987, providing that moneys appropriated for the Pell grant program “shall first be available” to meet deficiencies in funding for the award year in progress, was required in order for the Depart ment to have the authority to use the lump sum for that purpose. OMB argues that the absence of such language in the FY 1990 Appropriations Act prevents the Department from using the lump sum appropriation for FY 1990 to meet the 1989-90 award year deficiency. See Rettman Letter at 9; ‘ (....con tinued) a d ju stin g Pell G ra n t aw ards at the cam pus level,” that it “ im plem ent[ed] the A d m in istra tio n ’s p ro p o sa l fo r the im plem entation o f p ro -rata refund p olicies at postsecondary in stitu tio ns w ith loan defau lt ra te s in e x ce ss o f 30 p e rc en t," and that it “delay[ed] the eligibility o f students atten ding on a less than h a lf tim e b a sis fo r Pell G rant aw ards.” H .R . C onf. R ep. No. 274 at 41 1 S e n a to r H a rk in 's floor statem ent explaining the purpose o f the $ 131,000,000 ap p ro p riatio n also n o te s th at th is prior p ra c tic e w as to be preserved. S tringer L etter at 2 n.4. S en ato r H arkin stated th a t “ in re serv in g this a m o u n t for the sho rtfall, it was not intended that the S ecretary o f E d ucation be pre c lu d e d from using other available funds in the Pell g rant appropriation, as done in previous y e ars, to c o v er the u n fin an ced costs fo r the curren t academ ic year.” 135 C ong. Rec. S15, 804 (daily ed. N ov. 16, 1989). O f c o u rse, it is true that C o n g re ss’ primary intention in appropriatin g a lum p sum o f $ 6 ,0 4 4 ,0 9 7 ,0 0 0 for the Pell grant program for FY 1990 w as to fund the pro g ram ’s expenses fo r the 1990-91 aw ard year.
C ontinued *6 Education Memorandum at 8. We reject that negative implication for two main reasons.
We believe the language o f the prior appropriations acts did not provide “additional authority not otherwise available to the agency head.” Rettman Letter at 9. Rather, the requirement that appropriated funds “shall first be available” to meet an outstanding deficiency establishes a priority use for funds that the Department otherwise would have had authority to allocate to any expenses incurred within the fiscal year for which the appropriation was made, regardless of the award year. See Education Memorandum at 8. The form of words chosen by Congress — requiring that the Pell grant appro priation first be available for paying a program deficiency from a pending award year — says that Congress wanted to ensure that the Department applied the appropriation to the deficiency before it expended funds for other purposes. In our view, the plain language of these provisions consti tutes a limitation on existing authority, rather than an affirmative grant of new authority. Congress’ underlying intent was apparently to prevent the Department from pursuing alternatives to a draw-down on the lump sum appropriation, such as imposing linear reductions.
The pattern of Congress’ decisions from FY 1979 through FY 1987 is thus entirely consistent with its decision in FY 1990. In each of these appropriations, Congress appears to have wanted to prevent the hardship that would have been caused by imposing linear reductions. To that end, Con gress consistently provided alternatives to the linear reduction procedure. In the early years, Congress m andated the first use of the lump sum appropria tion to cover a shortfall, thus limiting the Department’s discretion to spend the money for other purposes and impose linear reductions instead. In FY 1990, Congress achieved the same end by appropriating what it believed to be an ample sum for the specific purpose of retiring the shortfall.8 Never theless, the conferees made clear that they did not approve of a deviation from the past practice of resorting to the lump sum rather than permitting linear reductions to take effect. Against this background, it is implausible to ’ (....c o n tin u e d ) See B -2 3 6 6 6 7 , O p in io n o f th e C om ptroller G eneral, 1990 W L 277766, at *2 (Jan. 26, 1990) (“E ach tw o- y e a r a p p ro p ria tio n p ro v id e s funding in te n d e d prim arily fo r the aw ard y e ar begin ning nine m onths a fte r its e n a c tm e n t.” ). H ow ever, the fact th a t C ongress believed that the b ulk o f the lum p sum a p p ropriation w o u ld be a p p lie d to aw ard year 1990-91 expenses does no t preclude its a vailability to m eet the aw ard y e a r 1 9 8 9 -9 0 d eficiency. 'O M B n otes th a t at the tim e of the F Y 1986 a p propriation, Senators W eicker and Proxm ire disavow ed C o n g re s s ' p rio r p ra c tic e o f requiring m an d ato ry draw s ag ain st approp riatio ns to c o v er cu rren t aw ard y e a r e x p e n se s. See R ettm an Letter at 3; 131 C ong. R ec. 34,997 (1 9 8 5 ) (rem arks o f Sen. W eicker); id. (re m a rk s o f S e n a to r P roxm ire). Senator W eicker stated th a t “ the co n ferees direct that the S ecretary take w h a te v e r step s are a v ailab le to him u n d e r current statutory authority to ensure th a t 1986 program costs are re d u c e d to a level con sistent w ith th e appro p riatio n ," th u s im p lying that the m an d ato ry draw -dow n w o u ld n o t be re p e ated in the FY 1987 a p propriation, and th a t linear reduction s should, if necessary, be im p o se d on the 1986-87 aw ard year P ell grants. Id. S e n a to r Proxm ire agreed and stated th at “ [i]f th ere is an y u n a n tic ip a te d sh o rtfa ll in 1986 p ro g ram costs, in s p ite o f the $3.5 billion inclu d ed in the c o n fe r e n c e re p o rt, then the S ecretary of E ducation can m ake the necessary reduction s c o n siste n t w ith existin g law .” Id. D e sp ite th e se w arnings, h o w e v er, the FY 1987 a p p ropriation again in clu d ed m an d ato ry d ra w -d o w n la n g u a g e sim ila r to that o f p rio r years. Pub. L. No. 99-591, 100 Stat. 3341 -28 7 (1986).
maintain, as does OMB, that the FY 1990 appropriation compels the imposi tion of linear reductions and forbids the draw-down of lump sum funds. C. Section 411(g) o f the Higher Education Act
Section 411(g) of the Higher Education Act, codified as section 1070a(g) of title 20, provides for the Department to apply “linear reduction[s]” to specified classes of grants if, “for any fiscal year, the funds appropriated for payments under this subpart are insufficient to satisfy fully all entitlements, as calculated under subsection (b) of this section [providing means of calcu lating grants for the award year].” See supra note 2 (quoting statute).9 OMB construes section 411(g) to require the imposition of linear reductions when ever a deficiency arises near the end of an award year (here, the 1989-90 award year), thus preserving the current appropriation (the FY 1990 appro priation) for use in the next award year (the 1990-91 award year). It maintains that this “linear reduction” authority is “that which makes Pell grants a discretionary program, since it provides a statutory tool permitting the pro gram to operate at any given appropriation level.” Rettman Letter at 2. The Department argues that neither the FY 1990 Appropriations Act nor section 4 1 1(g) in terms requires that lump sum appropriations be restricted to use in a single award year. Hence, the Department concludes, it has the discretion to allocate such funds between two award years within the same fiscal year period of availability. Education Memorandum at 5. We agree with the Department’s view.
The literal language of section 411(g) does not require the imposition of linear reductions on previously awarded Pell grants whenever a deficiency arises within an award year, even in cases where funds are available within an applicable fiscal year period to meet such a deficiency. The section states only that linear reductions shall be made “ [i]f, for any fiscal year, the funds appropriated for payments under this subpart are insufficient to satisfy fully all entitlements.” 20 U.S.C. § 1070a(g). The statutory reference to “entitlements” does not, by its terms, refer only to grants for the follow ing award year. Nothing in the linear reductions provisions, in fact, indicates which award year’s entitlements are to be reduced. It states only that en titlements must be reduced whenever funds appropriated for any fisca l year — not award year — are insufficient. As matters now stand, the funds available for expenditure in FY 1990 for program costs are not “insufficient to satisfy fully all entitlements” that now must be covered for the remainder of the 1989-90 award year. To be sure, a draw-down of $265,000,000 from the FY 1990 lump sum appropriation to cover the 1989-90 award year defi ciency may eventually cause the lump sum appropriation to be “insufficient to satisfy fully all entitlements” pertaining to the 1990-91 award year. But at the moment, the funds available to be expended for current Pell grant
’ T h e FY 1990 A p p ro p riatio n s A ct d oes not re stric t o r repeal sec tio n 411(g).
entitlements are more than sufficient, and the Department need not impose linear reductions to cover the 1989-90 award year shortfall.
OMB reads section 411(g) to mean that if an appropriation for an award year is insufficient to meet all entitlements within the same award year, linear reductions are mandatory. This construction assumes that the sole purpose o f any Pell grant appropriation, unless otherwise stated, is to fund program expenses for a single award year. But the language of the FY 1990 Appropriations Act is not so limited. Moreover, as noted above, OM B’s view implicitly substitutes “award year” for “fiscal year" in the text of the *8 linear reduction provisions, with no basis for doing so. Letter for Lynda Guild Simpson, Deputy Assistant Attorney General, Office of Legal Coun sel, from Steven Y. Winnick, Deputy General Counsel for Program Service, Department o f Education at 2 (Feb. 15, 1990). Even accepting OMB’s point that the Higher Education Act contains other language showing that the Pell grant program is structured on an award year basis, see Rettman Letter at 8, the linear reduction provision is not so limited, and it does not follow that an appropriation for a given fiscal year period must not be used to pay off the current award year’s arrearages that occur within that fiscal period.
We therefore conclude that the Higher Education Act does not prohibit the Department from using the FY 1990 lump sum appropriation to pay off the deficiency from the 1989-90 award year.
D. The Anti-Deficiency Act
OMB also argues that the Anti-Deficiency Act supports its view. It con tends that the Department’s analysis
would allow the possibility of increasing debts rolling for ward each year into the next fiscal year, resulting in a possible violation o f the Anti-Deficiency Act: if the Department is permitted an indefinite draw on one year’s appropriation to pay for shortfalls in the prior award years, then the funds available for the current award year will be that much more insufficient, increasing the underfunding of the current year — with no fiscal accountability and with Congress coerced into appropriating that deficiency at some point in the future.
Rettman Letter at 4-5.
The Anti-Deficiency Act, 31 U.S.C. § 1341,10 is intended in part “to keep l0T h e p e rtin e n t p ro v isio n s o f that A ct, 31 U .S.C. § 1341(a)(1), read as follow s: A n o ffic e r o r em p lo y e e of the U n ite d States G o v e rn m e n t. . . m ay not— (A ) m ake o r authorize an expenditure or obligation exceeding an am ount available in an a p p ro p ria tio n o r fu n d fo r the ex p en d itu re or o b lig a tio n ; or (B ) in v o lv e [the] governm ent in a contract o r oblig ation fo r the pay m en t o f m oney b e fo re an ap p ro p ria tio n is made u n le ss au tho rized b y law.
all the departments of the Government, in the matter of incurring obligations for expenditures, within the limits and purposes of appropriations annually provided for conducting their lawful functions, and to prohibit any officer or employee of the Government from involving the Government in any contract or other obligation for the payment of money for any purpose, in advance of appropriations made for such purpose.” 55 Comp. Gen. 812, 823 (1976) (quoting 42 Comp. Gen. 272, 275 (1962)).“
We do not believe that by drawing on the FY 1990 lump sum appropria tion to pay off the remainder of the 1989-90 award year deficiency, the Department would violate terms of the Anti-Deficiency Act.12 The use o f the FY 1990 appropriation to pay off the deficiency would not be “an expendi ture or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation,” 31 U.S.C. § 1341(a)(1)(A), because, as explained above, the Department may expend the lump sum appropriation for any program costs incurred within the fiscal year period of availability. Nor would such action by the Department “involve [the] government in a contract or obligation for the payment of money before an appropriation is made.” 31 U.S.C. § 1341(a)(1)(B). Even assuming that a draw of $265,000,000 from the FY 1990 appropriation would leave that appropriation insufficient to cover program expenses connected with the 1990-91 award year, that result would *9 not in itself create an obligation to fund grant awards for that award year at the levels currently contemplated, or compel Congress to enact a supplemen tal appropriation to cover a deficiency for that award year. Congress may, at any time, decline to appropriate more funds. Under those circumstances, appropriated funds in a fiscal year would be insufficient to satisfy entitle ments, and linear reductions would take effect.
Accordingly, we conclude that the Department would not violate the Anti- Deficiency Act if it paid the current award year shortfall out of the FY 1990 lump sum appropriation. " See also Hooe v. United States, 43 Ct. Cl. 245, 260 (1908), a f f ’d, 218 U .S. 322 (19 1 0 ) (C o n g re ss'
sp ecific appropriations m ust not be ex ceeded for any fiscal year); 39 Com p. G en. 422, 425 (19 5 9 ) (“T h e ob ject o f the statute w as to prevent ex ecutiv e o fficers from involving the G o vernm ent in e x p en d itu re o r liabilities beyond those c ontem p lated and authorized by the C ongress."); 55 C om p. G en. 768, 773-74 (19 76) (current fiscal y e a r funds c an n o t be applied eith er directly o r through rep ro g ram m in g to liq u i d ate co ntract oblig atio n s incurred in p rio r fiscal years). 12 In d e e d , w e d o no t u n d e rstan d O M B to argue th a t a p er se vio latio n w o u ld ex ist, s in c e it m e re ly c la im s that “ a possible v io la tio n ” w ould occur, see R ettm an L e tte r at 4-5 (e m p h a sis a d d ed ), if d e fic ie n c ie s co n tin u e d to roll fo rw ard from on e fiscal y e a r to the next indefin itely
C onclusion
We conclude that neither the FY 1990 Appropriations Act, the Higher Education Act, nor the Anti-Deficiency Act prevents the Department from using the lump sum appropriation in the FY 1990 Appropriations Act for paying deficiencies in excess of $131,000,000 in the Pell grant programs funding for the 1989-90 award year.
WILLIAM P. BARR Assistant Attorney General Office o f Legal Counsel