Budget Issues: Inventory of Accounts With Spending Authority and
Permanent Appropriations, 1996 (Letter Report, 05/31/96, GAO/AIMD-96-79).
This report updates GAO's 1987 inventory of accounts with spending
authority and permanent appropriations, commonly known as "backdoor
authority." GAO provides information on such accounts and analyzes the
changes in the number and dollar amounts of accounts with backdoor
authority. It also provides information on each reported account's
status under the Balanced Budget and Emergency Deficit Control Act--that
is, whether it is subject to or exempt from sequestration or subject to
any special rules or limitations.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-96-79
TITLE: Budget Issues: Inventory of Accounts With Spending
Authority and Permanent Appropriations, 1996
DATE: 05/31/96
SUBJECT: Backdoor authority
Appropriation accounts
Deficit reduction
Trust funds
Public enterprise revolving fund accounts
Budget functions
Offsetting collections
Permanent budget authority
Budget obligations
IDENTIFIER: Highway Trust Fund
Foreign Military Sales Trust Fund
Airport and Airway Trust Fund
Defense Business Operations Fund
CCC Fund
Postal Service Fund
TVA Fund
Bonneville Power Administration Fund
Federal Buildings Fund
DOT Ocean Freight Differential Account
Treasury Other Interest on the Public Debt Account
Old Age and Survivors Insurance Trust Fund
Hospital Insurance Trust Fund
Supplementary Medical Insurance Trust Fund
Social Security Disability Insurance Trust Fund
Civil Service Retirement and Disability Fund
RTC Revolving Fund
Bank Insurance Fund
BIF
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Cover
================================================================ COVER
Report to the Committee on the Budget, U.S. Senate
May 1996
BUDGET ISSUES - INVENTORY OF
ACCOUNTS WITH SPENDING AUTHORITY
AND PERMANENT APPROPRIATIONS, 1996
GAO/AIMD-96-79
Spending Authority
(935147)
Abbreviations
=============================================================== ABBREV
BEA - Budget Enforcement Act
DOD - Department of Defense
GAO - General Accounting Office
GRH - Gramm-Rudman-Hollings
OMB - Office of Management and Budget
PAYGO - Pay-As-You-Go
Letter
=============================================================== LETTER
B-260063
May 31, 1996
The Honorable Pete V. Domenici
Chairman
The Honorable J. James Exon
Ranking Member
Committee on the Budget
United States Senate
In response to your request that we update our 1987 inventory of
accounts with spending authority and permanent appropriations\1
(commonly referred to as "backdoor authority"), this report provides
specific information on such accounts and analyzes the changes in the
number and dollar amounts of accounts with backdoor authority. It
also provides the information you requested on each reported
account's status under the Balanced Budget and Emergency Deficit
Control Act of 1985 (Public
Law 99-177), as amended\2 --that is, whether it is subject to or
exempt from sequestration or subject to any special rules or
limitations. This report also satisfies our legislative mandate to
study the provisions of law which provide the federal government with
backdoor authority.
The Congressional Budget Act of 1974, as amended, defines spending
authority as authority provided in laws other than appropriation acts
to obligate the U. S. government to make payments. More
specifically, it includes contract authority, authority to borrow,
authority to forgo the collection of proprietary offsetting receipts
(the use of monetary credits or bartering),\3 and authority to make
any other payments for which the budget authority is not provided in
advance by appropriation acts. The latter includes, but is not
limited to, authority to make payments from offsetting collections
from nonfederal sources credited to appropriation or fund accounts.
A permanent appropriation is an appropriation that is available as
the result of previously enacted legislation, remains so until
repealed, and does not require current appropriations action by the
Congress.
--------------------
\1 Budget Issues: Inventory of Accounts With Spending Authority and
Permanent Appropriations, 1987 (GAO/AFMD-87-44A, July 17, 1987).
\2 This act is also referred to as Gramm-Rudman-Hollings (GRH). It
was amended by the Budget Enforcement Act of 1990 and the Omnibus
Budget Reconciliation Act of 1993.
\3 Monetary credits or bartering are used by agencies having the
authority to make purchases by giving the seller credits or something
other than money instead of issuing a check. The holder of the
credits may apply them later to reduce an amount owed the government
in other, sometimes unrelated, transactions. An agency's acceptance
of credits or something other than money as payment results in the
agency's forgoing the collection of offsetting receipts or
collections in an amount equal to the credit.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
The use of backdoor authority continues to be widespread and both it
and the number of accounts have increased since 1987.\4 Of the 173
departments and agencies in the President's fiscal year 1996 budget,
82 used or had authority to use spending authority or permanent
appropriations to finance all or part of their programs and
activities. This number increased from 65 departments and agencies
in 1987. The number of accounts with backdoor authority increased by
35 percent since 1987. The amounts of backdoor authority used
increased nearly 10 percent (adjusted for inflation), from $1,060
billion in fiscal year 1985 to $1,165 billion in fiscal year 1994.
This represented a small increase in the share of the federal
budget--from 58.2 percent to 59.5 percent over the 9-year period. In
fiscal year 1994, $983 billion in permanent appropriations, $42
billion in contract authority, and $16 billion in authority to borrow
were used to finance programs and activities. In addition, $124
billion of offsetting collections from the public was credited to
appropriation or fund accounts. The use of backdoor authority was
concentrated in certain departments and agencies, budget functions,
and types of fund accounts.
Five hundred and fifty-eight accounts in the President's fiscal year
1996 budget used or have been provided with backdoor authority.\5
This represents an increase of 35 percent from the 413 accounts in
1987. This increase is primarily a function of an 85-percent
increase (from 143 to 265) in accounts having authority to use
permanent appropriations. Sixty-one percent of spending through
permanent appropriations is by nonrevolving trust funds.
Of the 558 budget accounts with backdoor authority, 113 accounts use
or have authority to use more than one type of backdoor authority.
For example, 43 have both contract authority and the authority to use
offsetting collections from nonfederal sources as a means of
financing. Twenty-nine others used permanent appropriations and may
also use offsetting collections from nonfederal sources as a means of
financing.
Use of specific types of backdoor authority was concentrated in some
departments. The Social Security Administration used the largest
amount of permanent appropriations, with 33 percent of the total
permanent appropriations used in fiscal year 1994. The Department of
the Treasury followed closely with 32 percent of total permanent
appropriations. The Department of Transportation used 65 percent of
total contract authority in that year. The Department of Agriculture
used 73 percent of total authority to borrow in fiscal year 1994.
The group of Other Independent Agencies collected 70 percent of total
offsetting collections from the public in fiscal year 1994. Of these
collections from the public, the Postal Service alone accounted for
56 percent of the total.
Use of specific types of backdoor authority was also concentrated in
certain budget functions. Budget function 650 (Social Security) used
$326.8 billion (33 percent) of the total permanent appropriations in
fiscal year 1994. The Transportation budget function (400) used $27
billion (65 percent) of the total contract authority in that year.
The Agriculture budget function (350) used $11.8 billion (73 percent)
of the total authority to borrow. The Commerce and Housing Credit
budget function (370) collected $81.6 billion (66 percent) of the
total offsetting collections from the public in that year.\6
In addition, use of backdoor authority is largely concentrated in
specific types of accounts. As mentioned, nonrevolving trust fund
accounts used 61 percent of total permanent appropriations in fiscal
year 1994. Nonrevolving trust fund accounts also used 96 percent of
the total contract authority in that year. Public enterprise fund
accounts used 99 percent of the total authority to borrow and also
collected 83 percent of the total offsetting collections from the
public in that year.
While there is potential for future increased spending by the newly
identified accounts, recent increases in backdoor spending occurred
in accounts that existed at the time of our last report. For
example, although 79 of the 145 additional accounts with backdoor
authority have permanent appropriations that were enacted since our
last report, that is not where the increase in spending occurred.
The overall increase in backdoor authority used is the result of
permanent appropriations enacted more than 30 years ago.
--------------------
\4 In this report, "use" refers to the amount of contract and
borrowing authority obligated, the amount of budget authority
utilized under a permanent appropriation, or the amount of offsetting
collections from nonfederal sources credited to an appropriation or
fund account. For monetary credits or bartering, no amounts are
reported since such authority is not recorded in the budget.
\5 As noted in our report, Budget Account Structure: A Descriptive
Overview (GAO/AIMD-95-179, September 18, 1995), there are
approximately 1,300 accounts in the President's Budget for fiscal
year 1996. This number does not include a certain number of accounts
that have no current activity. For this study, we compared accounts
contained in the President's fiscal year 1987 budget that reports
fiscal year 1985 actual dollar amounts and accounts in the
President's fiscal year 1996 budget that reports fiscal year 1994
actual dollar amounts.
\6 For a view on the distribution of total spending by agency and
budget function, see Budget Function Classification: Agency Spending
and Personnel Levels for Fiscal Years 1994 and 1995
(GAO/AIMD-95-115FS, April 11, 1995) and Budget Function
Classification: Relating Agency Spending and Personnel Levels to
Budget Functions (GAO/AIMD/GGD-95-69FS, January 30, 1995).
BACKGROUND
------------------------------------------------------------ Letter :2
The Balanced Budget and Emergency Deficit Control Act of 1985 amended
the Congressional Budget Act of 1974 (titles I through IX of Public
Law 93-344) to require us to study the provisions of law which
provide the federal government with spending authority and permanent
appropriations for which the budget authority is not provided in
advance by an appropriation act.\7 To fulfill this requirement, we
issued two reports in July 1987, Budget Issues: Inventory of
Accounts With Spending Authority and Permanent Appropriations, 1987
and a companion report, Budget Issues: The Use of Spending Authority
and Permanent Appropriations Is Widespread (GAO/AFMD-87-44, July 17,
1987).\8
The inventory report provided selected information such as account
description, the legal citation providing the spending authority or
permanent appropriation, the amounts of authority used, and reasons
given by agency officials for having the authority. The companion
report summarized and provided general observations on the data in
the inventory report.
In 1987, we reported that 65 federal agencies or establishments used
backdoor authority as a means of financing some of their programs or
activities. We identified 413 accounts as having one or more types
of spending authority or permanent appropriations. Specifically, 59
accounts had contract authority, 37 accounts had authority to borrow,
27 accounts had authority to use monetary credits or bartering, 263
accounts were authorized to make payments from offsetting collections
from nonfederal sources, and 143 accounts had permanent
appropriations, including entitlements not annually appropriated.
Backdoor authority is authority to obligate federal funds that is not
controlled through the appropriations process. Basically, it
represents mandatory spending that is provided and controlled
indirectly through other forms of legislation. The Congressional
Budget Act of 1974 attempted to limit the creation of new
nonappropriated contract authority or authority to borrow. Although
the act continues to limit the creation of these types of spending
authority, it has not stopped the expansion. In 1987, we reported
that since 1976 (the year the act became effective), at least four
provisions of law interpreted by agencies as providing
nonappropriated contract authority and six provisions of law
interpreted by agencies as providing authority to borrow had been
enacted.
In 1990, the Congress further attempted to limit backdoor authority
by establishing controls over changes in direct spending\9 --spending
that is generally the same as backdoor authority. The Budget
Enforcement Act of 1990 (BEA) amended both the Congressional Budget
Act of 1974 and the Balanced Budget and Emergency Deficit Control Act
of 1985. In addition to establishing dollar limits for total annual
appropriations, BEA contains a "pay-as-you-go" (PAYGO) provision
requiring that legislation enacted be either deficit neutral or
deficit reducing. In other words, any legislation reducing taxes or
expanding direct spending programs must be offset by direct spending
cuts or revenue increases. If PAYGO requirements are violated,
nonexempt direct spending programs are sequestered at the end of the
congressional session.
--------------------
\7 The act also requires us to update our study from time to time.
\8 The 1985 act also required us to recommend the appropriate form of
financing for activities or programs financed by such provisions of
law. To fulfill this requirement, we issued a report in September
1989, Budget Issues: Agency Authority to Borrow Should Be Granted
More Selectively (GAO/AFMD-89-4, September 15, 1989).
\9 Direct spending, as defined by the Budget Enforcement Act, is
spending for entitlement authority, the Food Stamp Program, and
budget authority provided by law other than appropriation acts.
Direct spending authority is under the control of congressional
authorizing committees, as contrasted with discretionary spending,
which is under the control of appropriations committees.
OBJECTIVES, SCOPE, AND
METHODOLOGY
------------------------------------------------------------ Letter :3
Our objectives were to (1) update the data reported in our 1987
inventory, (2) identify accounts provided with backdoor authority
between 1987 and 1996 and add them to the inventory, (3) identify
accounts reported in 1987 that no longer had such authority in fiscal
year 1996 and delete them from the inventory, (4) give the legal
citations providing backdoor authority, (5) determine whether the
accounts are subject to or exempt from sequestration or subject to
any special rules or limitations, and (6) determine the change in
accounts with backdoor authority in terms of number of accounts and
dollar amounts used or collected.
We identified new accounts with backdoor authority by using Office of
Management and Budget (OMB) data in the GAO Budget Database\10 and by
requesting agencies to identify new accounts they thought met the
definition of backdoor authority we provided to them.
We asked each agency to (1) update the data reported in our 1987
inventory, (2) identify accounts that no longer have backdoor
authority, and (3) identify and provide similar data on new accounts
that we or the agencies identified as having backdoor authority. For
certain legislative branch accounts, we researched the needed data.
Budget data for fiscal years 1985 and 1994 were obtained from the GAO
Budget Database. We used data contained in the 1996 President's
Budget because, at the time of our analysis, the 1997 budget had not
been released.
When necessary, we had numerous discussions with many agency
officials in attempting to obtain accurate and complete data. If an
agency did not provide the data as requested, we have indicated this.
We asked each agency to give us the legal citation of the agency's
spending authority or permanent appropriations for each account
identified. We reviewed each citation to ensure its accuracy. When
necessary, we sought clarification from agency officials. In certain
instances, the citation could not be verified and, in appendix III,
we marked the citation with an asterisk. In some cases, the agency's
citation did not provide the spending authority or permanent
appropriations that the agency claimed. In other cases, the citation
supported a different type of authority (for example, permanent
appropriations instead of contract authority). For those citations
which could not be verified, we will continue to work with the
appropriate agency and its office of general counsel to resolve the
discrepancy. Generally, the date of enactment is reported as
provided by the agency unless a different date was readily apparent
in our legal review. We used OMB data from the GAO Budget Database
to report the account's GRH status.
We then compared and analyzed the new inventory data and the old
inventory in terms of the number of accounts and dollar amounts.
Our work was conducted from July 1994 through March 1996 in
accordance with generally accepted government auditing standards.
This work entailed contacting over 80 departments and agencies (some
of which did not ultimately have backdoor authority) and was highly
dependent on agency response time and verification of their
responses. Our scope and methodology are described in greater detail
in appendix IV.
--------------------
\10 The GAO Budget Database is a compilation of automated data we
obtained from the OMB budget tapes used in preparing the annual
budgets. For this study, we compared accounts contained in the
President's fiscal year 1987 budget (which reports fiscal year 1985
actual dollar amounts) and accounts in the President's fiscal year
1996 budget (which reports fiscal year 1994 actual dollar amounts).
USE OF BACKDOOR AUTHORITY
CONTINUES TO BE WIDESPREAD
------------------------------------------------------------ Letter :4
Many federal budget accounts use backdoor authority to finance their
programs and activities. As shown in table 1, the number of accounts
having spending authority and permanent appropriations has generally
increased since 1987, with the largest increase being in accounts
with permanent appropriations. While an increase is also shown in
the number of accounts having authority to use offsetting collections
from the public, the number of accounts having contract authority,
authority to borrow, and authority to use monetary credits has not
changed significantly.
As table 1 shows, the number of accounts having backdoor authority
has increased. However, it is important to note that the number of
accounts does not necessarily indicate how widespread the existence
of backdoor authority is. This is because one provision of law
providing backdoor authority may be used by any number of accounts
and, alternatively, any number of provisions of law may have provided
backdoor authority to one account. For example, one provision of
law, 41 U.S.C. section 11a, provides contract authority to 31
Department of Defense--Military accounts. By contrast, one
account--Operation and Maintenance, Army--in addition to appropriated
funds, uses offsetting collections authority provided by 22 separate
provisions of law.
Table 1
Accounts Having Backdoor Authority,
Fiscal Years 1987 and 1996
Number of Number of
accounts in accounts in
Type of authority 1987 1996\a
------------------------------------------ ------------ ------------
Contract authority 59 57
Authority to borrow 37 38
Monetary credits/bartering 27 26
Permanent appropriations 143 265
Offsetting collections 263 304
----------------------------------------------------------------------
Note: The number of accounts with each type of backdoor authority in
this table differs from the numbers reported in Budget Account
Structure: A Descriptive Overview (GAO/AIMD-95-179, September 18,
1995) for several reasons. First, unlike that report, this table
includes accounts identified by agencies as having backdoor
authority, even if the authority was not used. The table also
separates accounts with permanent contract authority and authority to
borrow from accounts with other permanent authority. Further, it
includes only accounts with offsetting collections from the public,
while the 1995 report includes accounts with offsetting collections
from federal sources as well.
\a This includes some accounts that had backdoor authority in 1987
but were not included in our 1987 report because agencies did not
report them to us.
The real barometer of the use of backdoor authority is reflected in
the change in dollar amounts. The use of backdoor authority to
finance programs and activities continues to be significant in dollar
terms and also has increased since 1985. In real terms (constant
dollars), overall spending through backdoor authority has increased
nearly 10 percent. The use of permanent appropriations as a means of
financing has increased 20.6 percent, while spending through the use
of all other types of backdoor authority has decreased. Although the
number of accounts using offsetting collections from nonfederal
sources has increased, in real terms the use of this method of
financing has decreased 4.7 percent. Table 2 compares spending
through the use of backdoor authority in fiscal years 1985 and 1994.
Table 2
Backdoor Authority Used, Fiscal Years
1985 and 1994
(Dollars in billions)
FY FY
1985 1994
actua actua Percent
l FY 1985 actual l change from
amoun amount (1994 amoun 1985 (1994
Type of authority t dollars) t dollars)
-------------------------- ----- -------------- ----- ------------
Contract authority $34 $46 $42 -9.4
Authority to borrow 51 68 16 -76.4
Monetary credits/ \a \a \a \a
bartering
Permanent appropriations 608 815 983 20.6
Offsetting collections 97 130 124 -4.7
----------------------------------------------------------------------
\a Data not reported in the President's Budget.
Source: President's Budget, Fiscal Years 1987 and 1996.
ACCOUNTS USING LARGEST AMOUNTS
OF BACKDOOR AUTHORITY
------------------------------------------------------------ Letter :5
The following tables present the accounts using the largest amounts
of backdoor authority in fiscal year 1994. As shown in table 3, the
six accounts using the largest amounts of contract authority used
$41.6 billion in fiscal year 1994. This represented 99 percent of
total contract authority used.
Table 3
Accounts Using Largest Amounts of
Contract Authority, Fiscal Year 1994
(Dollars in billions)
Actu
al
amou
Accoun nt
t used
Account name number Agency Bureau \a
---------------------------- ------ ------------ ------------ ----
Federal-Aid Highways 69- Department Federal $20.
(Highway Trust Fund) 8083 of Highway 9
Transportati Administrati
on on
Foreign Military Sales Trust 11- Funds Military 13.0
Fund 8242 Appropriated Sales
to the Programs
President
Grants-in-Aid for Airports 69- Department Federal 3.0
(Airport and Airway Trust 8106 of Aviation
Fund) Transportati Administrati
on on
Defense Business Operations 97- Department Revolving 1.8
Fund 4930 of Defense- and
-Military Management
Funds
Discretionary Grants 69- Department Federal 1.8
8191 of Transit
Transportati Administrati
on on
Trust Fund Share of Expenses 69- Department Federal 1.2
8350 of Transit
Transportati Administrati
on on
======================================================================
Total $41.
6
----------------------------------------------------------------------
\a Total does not add due to rounding.
Source: President's Budget, Fiscal Year 1996.
Table 4 shows that the six accounts using the largest amounts of
authority to borrow used $16 billion in fiscal year 1994. This was
99.8 percent of total authority to borrow used.
Table 4
Accounts Using Largest Amounts of
Authority to Borrow, Fiscal Year 1994
(Dollars in billions)
Actu
al
amou
Accoun nt
t used
Account name number Agency Bureau \a
---------------------------- ------ ------------ ------------ ----
Commodity Credit Corporation 12- Department Farm Service $11.
Fund 4336 of Agency 8
Agriculture
Postal Service Fund 18- Other Postal 2.7
4020 Independent Service
Agencies
Tennessee Valley Authority 64- Other Tennessee 1.1
Fund 4110 Independent Valley
Agencies Authority
Bonneville Power 89- Department Power 0.3
Administration Fund 4045 of Energy Marketing
Administrati
on
Federal Buildings Fund 47- General Real \b
4542 Services Property
Administrati Activities
on
Ocean Freight Differential 69- Department Maritime \b
1751 of Administrati
Transportati on
on
======================================================================
Total $16.
0
----------------------------------------------------------------------
\a Total does not add due to rounding.
\b Less than $100 million.
Source: President's Budget, Fiscal Year 1996.
The six accounts using the largest amount of permanent appropriations
used $827.6 billion in fiscal year 1994. This represented 84 percent
of total permanent appropriations in that year.\11 Table 5 gives the
detail.
Table 5
Accounts Using Largest Amounts of
Permanent Appropriations, Fiscal Year
1994
(Dollars in billions)
Actu
al
budg
et
Accoun auth
t orit
Account name number Agency Bureau y
---------------------------- ------ ------------ ------------ ----
Other Interest on the Public 20- Department Interest on $296
Debt 0550 of the the Public .3
Treasury Debt
Federal Old-Age and 20- Social Social 282.
Survivors Insurance Trust 8006 Security Security 6
Fund Administrati Administrati
on on
Federal Hospital Insurance 20- Department Health Care 112.
Trust Fund 8005 of Health Financing 4
and Human Administrati
Services on
Federal Supplementary 20- Department Health Care 61.2
Medical Insurance Trust Fund 8004 of Health Financing
and Human Administrati
Services on
Federal Disability Insurance 20- Social Social 38.6
Trust Fund 8007 Security Security
Administrati Administrati
on on
Civil Service Retirement and 24- Office of Office of 36.5
Disability Fund 8135 Personnel Personnel
Management Management
======================================================================
Total $827
.6
----------------------------------------------------------------------
Source: President's Budget, Fiscal Year 1996.
The six accounts using the largest amount of offsetting collections
from nonfederal sources collected $94.5 billion in fiscal year 1994.
This represented 76 percent of total offsetting collections from
nonfederal sources collected in that year. Table 6 gives the detail.
Table 6
Accounts Using Largest Amounts of
Offsetting Collections, Fiscal Year 1994
(Dollars in billions)
Actu
al
amou
nt
Accoun coll
t ecte
Account name number Agency Bureau d
---------------------------- ------ ------------ ------------ ----
Postal Service Fund 18- Other Postal $48.
4020 Independent Service 4
Agencies
RTC Revolving Fund 22- Other Resolution 14.1
4055 Independent Trust
Agencies Corporation
Bank Insurance Fund 51- Other Federal 12.7
4064 Independent Deposit
Agencies Insurance
Corporation
Commodity Credit Corporation 12- Department Farm Service 7.3
Fund 4336 of Agency
Agriculture
Defense Business Operations 97- Department Revolving 6.2
Fund 4930 of Defense- and
-Military Management
Funds
Tennessee Valley Authority 64- Other Tennessee 5.8
Fund 4110 Independent Valley
Agencies Authority
======================================================================
Total $94.
5
----------------------------------------------------------------------
Source: President's Budget, Fiscal Year 1996.
As the statistics in the six preceding tables show, the use of
backdoor authority to finance federal programs and activities
continues to be widespread. Although spending in three categories of
backdoor authority has decreased when adjusted for inflation, the
overall use of backdoor authority has grown in real terms over the
past 9 years. Many new federal departments and agencies have been
provided with spending authority and permanent appropriations in
advance of appropriation acts. The appendixes to this report present
detailed tables on the numbers of accounts and amounts of backdoor
authority used.
Appendix I provides the amounts of spending authority and permanent
appropriations used in fiscal year 1994 by agency, budget function,
and type of fund account. Tables I.1 through I.3 show that specific
types of backdoor authority are concentrated in certain agencies,
budget functions, and fund accounts.
Appendix II shows the spending authority and permanent appropriations
that are available for use for each account in the inventory. It
provides a comprehensive view of the types of backdoor authority
available to each account. This appendix is arranged by agency and
provides each account's 11-digit identification code.
Appendix III provides detailed information on accounts using or
having authority to use spending authority or permanent
appropriations. The figures in this appendix (III.1 through III.5)
contain legal references, amounts of backdoor authority used in
fiscal years 1985 and 1994, and other information for each account in
the inventory.
Appendix IV provides a detailed description of our scope and
methodology. It describes the process we used to identify accounts,
the funding practices that are not included in the inventory, and how
we obtained our data. A glossary of terms is included at the end of
this report.
We are sending copies of this report to all Members of the Congress
and copies will be made available to others upon request.
If you or your staffs have any questions, please contact me at (202)
512-9573. Major contributors to this report are listed in appendix
V.
Paul L. Posner
Director, Budget Issues
--------------------
\11 Excluding Other Interest on the Public Debt, the remaining 5
accounts are part of the 11 programs comprising 90 percent of total
mandatory spending in fiscal year 1993. For further discussion, see
Budget Policy: Issues in Capping Mandatory Spending
(GAO/AIMD-94-155, July 18, 1994).
SPENDING AUTHORITY AND PERMANENT
APPROPRIATIONS BY AGENCY, BUDGET
FUNCTION, AND FUND TYPE
=========================================================== Appendix I
Table I.1
Spending Authority and Permanent
Appropriations Used by Agency, Fiscal
Year 1994
(Dollars in thousands)
Offsetting
Monetary collection
credits/ Permanent s,
Contract Authority barterin appropriatio nonfederal
Agency authority to borrow g\a ns sources
------------------ ------------ ---------- -------- ------------ ----------
Legislative Branch $ 0 $ 15,673 $ 328,172 $ 96,070
The Judiciary 0 0 219,102 29,247
Executive Office 0 0 0 1,029
of the President
Funds Appropriated 12,969,580 0 5,259 49,429
to the President
Department of 0 11,814,311 X 6,880,940 8,184,188
Agriculture
Department of 0 0 -1,510 58,690
Commerce
Department of 0 0 X 39,077,182 12,899
Defense--Civil
Department of 1,814,470 0 X 163,985 9,293,164
Defense--
Military
Department of 0 0 62,940 62,967
Education
Department of 0 340,383 X 24,067 3,781,337
Energy
Department of 0 0 175,390,994 260,577
Health and Human
Services
Department of 0 25,000 11,115 163,639
Housing and
Urban Development
Department of the 30,000 0 X 1,958,794 302,571
Interior
Department of 0 0 1,191,439 232,830
Justice
Department of 0 0 30,520,264 1,391,131
Labor
Department of 0 0 X 594,263 54,170
State
Department of 27,030,787 50,317 76,976 58,829
Transportation
Department of the 0 -376 314,715,704 2,668,694
Treasury
Department of 0 0 2,223,622 1,340,681
Veterans Affairs
Environmental 0 0 0 41,681
Protection Agency
General Services 0 52,619 15,467 286,836
Administration
National 0 0 1,574 0
Aeronautics and
Space
Administration
Office of 0 0 49,018,072 5,136,957
Personnel
Management
Small Business 0 0 0 14,101
Administration
Social Security 0 0 326,798,659 3,222,598
Administration
Other Independent 0 3,783,281 X 33,349,702 87,066,617
Agencies
================================================================================
$41,844,837 $16,081,20 Not $982,626,782 $124,339,1
Total 8 applicab 49
le
--------------------------------------------------------------------------------
\a An "X" in this column indicates that this agency has at least one
account with monetary credits or bartering authority.
Table I.2
Spending Authority and Permanent
Appropriations Used by Budget Function,
Fiscal Year 1994
(Dollars in thousands)
Offsetting
Monetary collection
credits/ Permanent s,
Contract Authority barterin appropriatio nonfederal
Budget function authority to borrow g\a ns sources
------------------ ------------ ---------- -------- ------------ ----------
National Defense $1,814,470 $ 0 X $12,075,506 $9,577,625
International 12,969,580 0 X 158,512 1,465,083
Affairs
General Science, 0 0 171 0
Space and
Technology
Energy 0 340,383 X 21,552 3,479,344
Natural Resources 30,000 0 X 1,340,247 435,296
and Environment
Agriculture 0 11,814,311 X 717,257 8,178,910
Commerce and 0 2,732,379 18,543,209 81,571,849
Housing Credit
Transportation 27,030,787 50,317 15,535 616,418
Community and 0 -2,162 95,257 164,063
Regional
Development
Education, 0 0 192,777 75,289
Training,
Employment, and
Social Services
Health 0 0 1,156,773 4,401,357
Medicare 0 0 175,293,181 0
Income Security 0 25,000 94,714,093 5,757,108
Social Security 0 0 326,798,659 3,150
Veterans Benefits 0 0 2,432,681 1,340,681
and Services
Administration of 0 0 1,814,222 336,799
Justice
General Government 0 67,916 14,035,866 1,103,920
Net Interest 0 0 301,779,036 0
Multifunction 0 1,053,064 X 31,442,248 5,832,257
================================================================================
$41,844,837 $16,081,20 Not $982,626,782 $124,339,1
Total 8 applicab 49
le
--------------------------------------------------------------------------------
\a An "X" in this column indicates that this budget function has at
least one account with monetary credits or bartering authority.
Table I.3
Spending Authority and Permanent
Appropriations Used by Fund Type, Fiscal
Year 1994
(Dollars in thousands)
Offsetting
Monetary collection
credits/ Permanent s,
Contract Authority barterin appropriatio nonfederal
Fund type authority to borrow g\a ns sources
------------------ ------------ ---------- -------- ------------ ----------
General $3,300 $50,317 X $356,021,893 $7,794,433
Special 30,000 0 X 4,292,109 60,518
Public enterprise 0 15,962,975 X 18,492,388 102,802,98
3
Intragovernmental 1,811,170 67,916 0 7,074,699
revolving
Nonrevolving trust 40,000,367 0 603,820,392 509,350
Revolving trust 0 0 0 6,097,166
================================================================================
$41,844,837 $16,081,20 Not $982,626,782 $124,339,1
Total 8 applicab 49
le
--------------------------------------------------------------------------------
\a An "X" in this column indicates that this fund type has at least
one account with monetary credits or bartering authority.
SPENDING AUTHORITY AND PERMANENT
APPROPRIATIONS AVAILABLE, BY
AGENCY
========================================================== Appendix II
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DETAILED INFORMATION ON ACCOUNTS
WITH SPENDING AUTHORITY AND
PERMANENT APPROPRIATIONS
========================================================= Appendix III
This appendix provides specific information on budget accounts using
or having authority to use spending authority or permanent
appropriations. It contains legal references, fiscal year 1985 and
1994 actual amounts used, and other information for each account. No
dollar amounts are reported for monetary credits/bartering because
data for this authority is not recorded in the President's Budget.
This appendix and table 2 in the letter show different total amounts
used for fiscal year 1985. Table 2 shows the amounts used for the
accounts that had backdoor authority in the 1987 President's Budget.
This appendix shows the amounts used for accounts that still had
backdoor authority and were listed in the 1996 President's Budget.
We used data contained in the 1996 President's Budget because, at the
time of our analysis, the 1997 budget had not been released.
The five figures in this appendix are organized by type of backdoor
authority in the following order: contract authority; authority to
borrow; monetary credits or bartering; permanent appropriations; and
offsetting collections from nonfederal sources credited to
appropriation or fund accounts. The figures present each type of
backdoor authority by agency and bureau, generally in the order in
which they appear in the Budget of the United States Government,
Fiscal Year 1996--Appendix.
EXPLANATION OF ITEMS INCLUDED IN
FIGURES
TYPE OF AUTHORITY
----------------------------------------------------- Appendix III:0.1
Identifies the type of spending authority or permanent appropriation
which the account may use.
AGENCY
----------------------------------------------------- Appendix III:0.2
Refers to federal departments and establishments, including
establishments in the legislative and judicial branches, based on
categories in the Budget of the United States Government, Fiscal Year
1996--Appendix. Most of the smaller executive branch agencies are
grouped under "Other Independent Agencies" and "Funds Appropriated to
the President."
BUREAU
----------------------------------------------------- Appendix III:0.3
Designates principal subordinate organizational units or smaller
executive branch agencies based on categories in the Budget of the
United States Government, Fiscal Year 1996--Appendix.
ACCOUNT NAME
----------------------------------------------------- Appendix III:0.4
Identifies the name of an account that is shown with a program and
financing schedule in the Budget of the United States Government,
Fiscal Year 1996--Appendix.
ACCOUNT NUMBER
----------------------------------------------------- Appendix III:0.5
Identifies the identification code of an account that is shown with a
program and financing schedule in the Budget of the United States
Government, Fiscal Year 1996--Appendix.
LEGAL REFERENCE
----------------------------------------------------- Appendix III:0.6
Gives the legal citation(s) providing the spending authority or
permanent appropriation. Where we could not verify the legal
citation submitted by the agency, we have placed an asterisk next to
the quoted citation. For a complete discussion of our review of the
legal citations, see appendix IV, Scope and Methodology.
YEAR OF ENACTMENT
----------------------------------------------------- Appendix III:0.7
Refers to the calendar year in which the spending authority or
permanent appropriation was provided. In cases where there are
multiple citations, it represents the earliest identifiable
provision.
GRH STATUS
----------------------------------------------------- Appendix III:0.8
Provides the account's status under the Balanced Budget and Emergency
Deficit Control Act of 1985 (also known as Gramm-Rudman-Hollings), as
amended by the Budget Enforcement Act of 1990 and 1993--that is,
whether the account is subject to or exempt from sequestration.
SEQUESTRABLE (SEQ.)
--------------------------------------------------- Appendix III:0.8.1
Refers to those accounts whose budgetary resources are subject to
cancellation under budget enforcement sequestration procedures.
SEQUESTRABLE, BUT SUBJECT
TO 906 (SEQ/906)
--------------------------------------------------- Appendix III:0.8.2
Refers to those accounts whose budgetary resources are subject to
cancellation under budget enforcement sequestration procedures, but
the amount of the sequestration is limited by the provisions of 2
U.S.C. section 906.
EXEMPT
--------------------------------------------------- Appendix III:0.8.3
Refers to those accounts which are exempt from reduction under budget
enforcement sequestration procedures. This category includes
accounts with activities that are specifically exempt from reduction,
activities resulting from private donations, bequests, or voluntary
contributions to the government, and activities which involve
intragovernmental funds.
PARTIAL EXEMPTIONS
(PARTIAL)
--------------------------------------------------- Appendix III:0.8.4
Refers to those accounts for which certain budgetary resources
specified by law within the account are not subject to cancellation
under budget enforcement sequestration procedures. For example, the
Tennessee Valley Authority Fund is exempt from reduction, except for
nonpower programs and activities. The prior legal obligations of 39
budget accounts are exempt from reduction.
OPTIONAL EXEMPTION (OPT.)
--------------------------------------------------- Appendix III:0.8.5
Refers to the President's authority under the Budget Enforcement Act
to exempt any military personnel account from sequestration or
provide for a lower uniform percentage reduction than would otherwise
apply under budget enforcement sequester procedures.
SOURCE OF COLLECTIONS
----------------------------------------------------- Appendix III:0.9
Refers to the services, activities, and/or goods for which the major
portion of offsetting collections from nonfederal sources credited to
the account are received.
AMOUNT USED
---------------------------------------------------- Appendix III:0.10
Represents the dollar amount used for contract authority and
authority to borrow.
VALUE
---------------------------------------------------- Appendix III:0.11
Represents the dollar amount of monetary credits or bartering used.
BUDGET AUTHORITY
---------------------------------------------------- Appendix III:0.12
Represents the amount of obligations which may be incurred under a
permanent appropriation.
COLLECTED
---------------------------------------------------- Appendix III:0.13
Represents the dollar amount of offsetting collections from
nonfederal sources credited to the appropriation or fund account.
Figure III.1: Contract
Authority by Agency, Bureau,
and Account
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edition.)
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edition.)
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edition.)
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edition.)
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edition.)
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edition.)
Figure III.2: Authority to
Borrow by Agency, Bureau, and
Account
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edition.)
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edition.)
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edition.)
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edition.)
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edition.)
Figure III.3: Monetary
Credits/Bartering by Agency,
Bureau, and Account
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edition.)
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edition.)
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edition.)
Figure III.4: Permanent
Appropriations by Agency,
Bureau, and Account
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edition.)
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Figure III.5: Offsetting
Collections by Agency, Bureau,
and Account
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SCOPE AND METHODOLOGY
========================================================== Appendix IV
Accounts with backdoor authority have authority provided in laws
other than appropriation acts to obligate the United States to make
payments. The inventory includes accounts with contract authority,
authority to borrow, and authority to use monetary credits or
bartering if budget authority has not been provided in advance in
appropriation acts. It also includes appropriation or fund accounts
credited with offsetting collections from nonfederal sources and
accounts with permanent appropriations.
There are other financing practices which might be considered similar
to backdoor authority because they are generally not directly
controllable in the current year's appropriations process. Such
items include annually appropriated entitlements and accounts with
advance appropriations. These are not in the inventory because, at
some time, such funding is considered in the appropriations process.
Offsetting collections from federal sources and trust funds credited
to appropriation or fund accounts are not included in the inventory
because their source is either annually appropriated or is itself in
the inventory. As agreed with Senate Budget Committee staff, the
nonbudgetary credit financing accounts are excluded from the
inventory. The credit liquidating accounts are also excluded because
their permanent appropriations exist solely because of credit reform.
Similarly, credit program accounts with permanent appropriations for
credit re-estimates also are not included. Tax expenditures and tax
credits are not in the inventory because they are considered on the
revenue side of the federal budget rather than the spending side.
We requested data on specific accounts from 81 federal agencies or
establishments. To update accounts reported in 1987, we sent
agencies photocopies of pages from our 1987 inventory report. We
sent questionnaires on new accounts we identified to some of the same
agencies and additional questionnaires to other agencies or
establishments. For certain legislative branch accounts, we
researched and compiled the needed data. We identified new accounts
using OMB data in GAO's Budget Database\1 and by requesting agencies
to identify accounts with authority to use monetary credits or
bartering or any other account they thought met the definition of
backdoor authority we provided to them. We used the program and
financing schedule\2 line code descriptions in OMB Circular A-11 to
select codes relating to spending authority and permanent
appropriations. Using line codes 60.00 to 69.90, we searched GAO's
Budget Database for fiscal years 1987 through 1995 and selected
accounts that used one or more types of backdoor authority in any of
those years. We then prepared questionnaires on the selected
accounts identifying the agency, bureau, and account number.
Financial data for fiscal years 1985 and 1994 were obtained from the
GAO Budget Database. Fiscal year 1985 dollar amounts are reported
only for accounts that existed at that time. No dollar amounts are
reported for monetary credits/bartering because data for this
authority is not recorded in the President's Budget. We used data
contained in the 1996 President's Budget because, at the time of our
analysis, the 1997 budget had not been released.
We had numerous discussions with many agency officials in attempting
to obtain accurate and complete data. If an agency did not provide
the data as requested, we have indicated this by stating "not
provided."
We asked each agency to provide us with the legal citation of the
agency's spending authority or permanent appropriations for each
account identified. We reviewed each citation to ensure its
accuracy. When necessary, we sought clarification from agency
officials. In certain instances, the citation could not be verified
and, in appendix III, we marked the citation with an asterisk. In
some cases, the agency's citation did not provide the spending
authority or permanent appropriations that the agency claimed. In
other cases, the citation provided supported a different type of
authority (for example, permanent appropriations instead of contract
authority). For those citations which could not be verified, we will
continue to work with the appropriate agency and its office of
general counsel to resolve the discrepancy. Generally, the date of
enactment is reported as provided by the agency unless a different
date was readily apparent in our legal review. Also, some accounts
have multiple legal citations that provide backdoor authority and
some existing citations have been amended or expanded over time. We
reported only the earliest identifiable year of enactment for the
legislation we believe authorized the backdoor authority. To obtain
an account's GRH status including any special rules or limitations,
we used OMB data contained in the GAO Budget Database.
We then compared and analyzed the new inventory data and the old
inventory in terms of the number of accounts and dollar amounts.
--------------------
\1 The GAO Budget Database is a compilation of automated data we
obtained from OMB budget tapes used in preparing the annual budgets.
\2 Each account's program and financing schedule in the Budget of the
United States Government--Appendix shows the type and amount of
budgetary resources available to finance obligations.
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Christine E. Bonham, Assistant Director
Trina V. Lewis, Evaluator-in-Charge
Deborah A. Colantonio, Senior Evaluator
Robert M. Sexton, Senior Evaluator
Warren C. Underwood, Senior Evaluator
Joseph G. Heisler, Evaluator
Carol M. Henn, Evaluator
Elizabeth A. McClarin, Evaluator
John W. Mingus, Evaluator
James F. Loschiavo, Social Science Analyst
OFFICE OF THE GENERAL COUNSEL
Carlos E. Diz, Attorney
GLOSSARY
=========================================================== Appendix 0
ADVANCE APPROPRIATION
------------------------------------------------------- Appendix 0:0.1
Budget authority provided in an appropriation act that is first
available in a fiscal year beyond the fiscal year for which the
appropriation act is enacted.
ACCOUNT
------------------------------------------------------- Appendix 0:0.2
A budgeting unit that records budgetary resources for obligation and
outlay and is shown in the Budget of the United States Government,
Fiscal Year 1996--Appendix.
APPROPRIATION ACT
------------------------------------------------------- Appendix 0:0.3
A statute, under the jurisdiction of the House and Senate Committees
on Appropriations, that authorizes federal agencies to incur
obligations and to make payments out of the Treasury for specified
purposes.
AUTHORITY TO BORROW
------------------------------------------------------- Appendix 0:0.4
The statutory authority that permits a federal agency to incur
obligations and make payments out of borrowed monies. This does not
include the Treasury's authority to borrow from the public or other
sources under chapter 31 of title 31 U.S. Code.
BUDGET AUTHORITY
------------------------------------------------------- Appendix 0:0.5
Authority provided by law to enter into obligations that will result
in immediate or future outlays involving federal government funds.
Budget authority, however, does not include authority to insure or
guarantee the repayment of indebtedness incurred by another person or
government. The basic forms of budget authority are appropriations,
authority to borrow, contract authority, and authority to expend
offsetting collections.
CONSTANT DOLLAR
------------------------------------------------------- Appendix 0:0.6
A dollar value adjusted for changes in prices.
CONTRACT AUTHORITY
------------------------------------------------------- Appendix 0:0.7
The statutory authority that permits obligations to be incurred in
advance of appropriations or in anticipation of receipts to be
credited to a revolving fund or other account.
CURRENT BUDGET AUTHORITY
------------------------------------------------------- Appendix 0:0.8
Budget authority enacted by the Congress in or immediately preceding
the fiscal year in which it becomes available.
CURRENT DOLLAR
------------------------------------------------------- Appendix 0:0.9
The dollar amount at the time the authority was provided or used.
FUND TYPE
------------------------------------------------------ Appendix 0:0.10
The extent of restriction or earmarking within accounts. The six
fund types discussed in this report follow.
GENERAL FUNDS
---------------------------------------------------- Appendix 0:0.10.1
Accounts containing resources to be expended for the general support
of the federal government. They include spending from both annual
and permanent appropriations.
INTRAGOVERNMENTAL FUNDS
---------------------------------------------------- Appendix 0:0.10.2
Expenditure accounts authorized by law to facilitate financing
transactions primarily within and between federal agencies on a
revolving fund basis.
PUBLIC ENTERPRISE FUNDS
---------------------------------------------------- Appendix 0:0.10.3
Accounts authorized by law to be credited with offsetting
collections, primarily from the public, that are generated by and
earmarked to finance a continuing cycle of business-type operations.
SPECIAL FUNDS
---------------------------------------------------- Appendix 0:0.10.4
Accounts whose resources are earmarked by law for specific purposes.
TRUST FUNDS
---------------------------------------------------- Appendix 0:0.10.5
Accounts designated by law as "trust funds" and earmarked for
specific purposes and programs according to the terms of the trust
agreement or statute.
TRUST REVOLVING FUNDS
---------------------------------------------------- Appendix 0:0.10.6
Trust fund expenditure accounts that are appropriation accounts
authorized to be credited with collections and used to carry out a
cycle of business-type operations in accordance with statute.
MONETARY CREDITS OR
BARTERING
------------------------------------------------------ Appendix 0:0.11
The authority to make purchases by giving the seller credits or
something other than money instead of issuing a check. The holder of
the credits may apply them later to reduce an amount owed the
government in other, sometimes unrelated, transactions. An agency's
acceptance of credits or something other than money as payment
results in the agency forgoing the collection of offsetting receipts
or collections in an amount equal to the credit.
OFFSETTING COLLECTIONS FROM
NONFEDERAL SOURCES
------------------------------------------------------ Appendix 0:0.12
Collections from sources outside the federal government that are
credited to appropriation or fund accounts. They include such things
as user fees, loan repayments, and proceeds from sales.
PERMANENT APPROPRIATION
------------------------------------------------------ Appendix 0:0.13
An appropriation that becomes available as a result of previously
enacted legislation and does not require current action by the
Congress.
PROPRIETARY OFFSETTING
RECEIPTS
------------------------------------------------------ Appendix 0:0.14
Collections from the public credited to general fund, special fund,
or trust fund receipt accounts, as a result of the government's
business-type or market-oriented activities. Among these are loan
repayments, interest, sale of property and products, charges for
nonregulatory services, and rents and royalties. Such collections
are not counted as budget receipts and are offset against total
budget authority and outlays by agency and function.
SPENDING AUTHORITY
------------------------------------------------------ Appendix 0:0.15
As defined by the Congressional Budget Act of 1974, as amended, a
collective designation for authority provided in laws other than
appropriation acts to obligate the government to make payments. It
includes contract authority, authority to borrow, and entitlement
authority for which the budget authority is not provided in advance
by appropriation acts. It also includes authority to forgo the
collection of proprietary offsetting receipts (the use of monetary
credits) and to make any other payments for which the budget
authority is not provided in advance by appropriation acts. The
latter includes, but is not limited to, authority to make payments
from offsetting collections credited to appropriation or fund
accounts.
*** End of document. ***