D.C. Courts: Planning and Budgeting Difficulties During Fiscal Year 1998
(Letter Report, 09/16/1999, GAO/AIMD/OGC-99-226).

GAO testified before Congress recently on the District of Columbia
Courts' financial operations in fiscal year 1998--its first year of
operations with direct federal funding. (See GAO/T-AIMD/OGC-99-176, May
1999.) GAO reported that D.C. Courts had had difficulty in planning and
budgeting during this transition year. GAO found that D.C. Courts had
potentially overobligated its resources, which could violate the
Anti-Deficiency Act. This report (1) supplements GAO's testimony,
providing additional details on its finding, and (2) provides
recommendations to Congress and the D.C. Courts. GAO answers the
following questions: What were D.C. Courts obligations for fiscal years
1996, 1997, and 1998? Did D.C. courts have a spending plan for fiscal
year 1998 and obligate money in accordance with available resources? Why
did D.C. Courts defer payments to court-appointed attorneys from late
July 1998, and were those payments made in fiscal year 1998 processed in
accordance with policies and procedures?

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD/OGC-99-226
     TITLE:  D.C. Courts: Planning and Budgeting Difficulties During
	     Fiscal Year 1998
      DATE:  09/16/1999
   SUBJECT:  Courts (law)
	     Budget administration
	     Noncompliance
	     Appropriated funds
	     Legal fees
	     Budget obligations
	     Budget deficit
	     Public defenders
IDENTIFIER:  District of Columbia Criminal Justice Act Program
	     District of Columbia Counsel for Child Abuse and Neglect
	     Program
	     District of Columbia Guardianship Program
	     District of Columbia Crime Victims Compensation Program
	     Crime Victims Fund

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GAO/AIMD/OGC-99-226

Report to Congressional Requesters
September 1999 D. C. COURTS Planning and Budgeting Difficulties During Fiscal Year 1998
Accounting and Information Management Division
B- 283119 Letter September 16, 1999 The Honorable Ernest J. Istook Chairman The Honorable James P. Moran Ranking Minority Member Subcommittee on the District of Columbia Committee on Appropriations House of Representatives
The Honorable Thomas M. Davis, III Chairman Subcommittee on the District of Columbia Committee on Government Reform House of Representatives
On May 18, 1999, we testified before the Subcommittee on the District of Columbia, House Committee on Appropriations, regarding the District of Columbia Courts' (DC Courts) financial operations in fiscal year 1998, its first year of operations with direct federal funding. 1 In our testimony, we reported that DC Courts had experienced difficulties in planning and budgeting during this transition year. Our review of DC Courts records showed that it had potentially overobligated its resources, which could violate the Anti- Deficiency Act. Following our testimony, we provided to the Subcommittee on the District of Columbia, House Committee on Appropriations, a chronology of pertinent events related to the DC Courts appropriation and obligations for fiscal year 1998. 2 We also reviewed proposed deobligations submitted by DC Courts. This report (1) supplements our testimony, providing additional detail on our findings, and (2) transmits our recommendations to the Congress and DC Courts. Our objectives were to address the following questions, which were also
discussed at the testimony: 1. What were DC Courts obligations for fiscal years 1996, 1997, and 1998?
1 District of Columbia Courts: Financial Related Issues for Fiscal Year 1998 (GAO/ T- AIMD/ OGC- 99- 176). 2 District of Columbia Courts: Chronology of Events Related to DC Courts' Appropriation and Obligations for Fiscal Year 1998 (
2. Did DC Courts have a spending plan for fiscal year 1998 and obligate funds in accordance with available resources? 3. Why did DC Courts defer payments to court- appointed attorneys from late July 1998 through September 1998, and were those payments made in fiscal year 1998 processed in accordance with policies and procedures?
During the course of our review, we also identified an issue regarding DC Courts' authority to spend money from the Crime Victims Fund for the Crime Victims Compensation Program.
Results in Brief DC Courts incurred obligations of $115.4 million, $119 million, and $125.6 million in fiscal years 1996, 1997, and 1998, respectively. Fiscal year 1998
obligations reflect a different scope of activities than prior year obligations, primarily because of changes necessitated by the Revitalization Act of 1997. These changes included the transfer of a DC Courts function to another entity and increased costs of employee benefits during fiscal year 1998. DC Courts also gave its nonjudicial employees a 7- percent pay raise and assumed responsibility for judges' pension costs as part of its fiscal year 1998 appropriation for court operations.
DC Courts did not prepare and execute a budget based on amounts appropriated for fiscal year 1998. Records showed that throughout the year, DC Courts was aware that its spending was on pace to exceed available resources. However, rather than managing within its available
funds, DC Courts incurred obligations in anticipation of receiving additional resources from the Congress and others to cover the difference. Faced with an impending shortfall in operating funds, DC Courts officials deferred payments totaling $5.8 million owed to court- appointed attorneys and expert service providers during the last 3 months of fiscal year 1998. The Congress transferred $1.7 million in fiscal year 1998 funds to DC Courts that was used for deferred court- appointed attorney payments and authorized DC Courts to use the fiscal year 1999 appropriation to fund the remaining deferred amount of $4.1 million.
As of May 25, 1999, we found that DC Courts fiscal year 1998 obligations exceeded available resources by $4.6 million, in violation of the Anti- Deficiency Act. This funding shortfall reflected the $4.1 million in deferred payments to court- appointed attorneys that should have been recorded as fiscal year 1998 obligations and our assessment of
deobligations for fiscal year 1998 submitted by DC Courts. In addition, DC Courts treated $773,000 in interest earned primarily on the bank balances from quarterly apportionments of its fiscal year 1998 appropriation as an available budgetary resource for court operations without having legislative authority to do so. According to our overall evaluation, obligations and available funding for fiscal year 1998 were $125.6 million and $121 million, respectively.
In general, DC Courts processed vouchers for court- appointed attorneys and expert- service providers in accordance with established policies and procedures. However, its policies did not (1) include time frames for processing the vouchers and making payments or (2) require that judges
document decisions to reduce claimed voucher amounts. Further, DC Courts did not have procedures for retaining data on vouchers reported as lost or missing. These deficiencies are of particular concern given that DC Courts became subject to the federal Prompt Payment Act in fiscal year
1999. Under this act, DC Courts could be required to pay interest on any voucher payment made more than 30 days after submission of a proper invoice. In addition, DC Courts did not have the requisite authority to spend funds in the Crime Victims Fund account. DC Courts' records indicated that it spent about $1.8 million during fiscal year 1998.
This report includes recommendations to the Congress and DC Courts. In response to a draft of this report, DC Courts disagreed with our conclusions and the need for implementing three of our recommendations. They agreed to seek clarifying legislation to address two of our other recommendations. They did not directly address the other recommendations. Subsequent to DC Courts' response, the Conference Committee on the District of Columbia Appropriations Act, 2000 adopted provisions that, if enacted, would address four of the recommendations.
Background The District of Columbia Court Reform and Criminal Procedure Act of 1970 (Court Reform Act) transferred jurisdiction over all local judicial matters to a unified court system for the District. This entity, known as DC Courts, includes  the Superior Court, which is the trial court with general jurisdiction over
virtually all local legal matters, including criminal, civil, juvenile, domestic relations, probate, and small claims cases, and
 the Court of Appeals, the highest court of the District of Columbia, which reviews all appeals from the Superior Court, as well as decisions and orders of D. C. government administrative agencies. The Court Reform Act provided for the creation of a policy- making body for DC Courts, the Joint Committee on Judicial Administration. The Joint Committee, comprised of the two chief judges and three associate judges elected annually by the judges of the Superior Court and Court of Appeals, submits DC Courts' annual budget requests and is responsible for DC Courts' general personnel policies, accounting and auditing, procurement and disbursement, development and coordination of statistical and management information systems and reports, and other related administrative matters. The Joint Committee appoints the executive
officer, who manages the day- to- day administrative and financial management of the Court System on the Committee's behalf. The fiscal officer, subject to the supervision of the executive officer, is responsible for maintaining accounting records and processing payments from the general appropriation. Impact of the 1997
The Revitalization Act 3 changed DC Courts' funding process, nonjudicial Revitalization Act on DC employee compensation, and functional responsibilities. Under the Courts
Revitalization Act, the federal government took over certain financial responsibilities and roles previously held by DC Courts under the Court Reform Act. Some activities became federal government responsibilities, while others remained local government activities funded with federal
dollars. The Revitalization Act provides for direct federal funding of DC Courts. The Joint Committee submits the Courts' budget request to the Congress through the Director of the Office of Management and Budget (OMB). The
District's fiscal years 1998 and 1999 appropriation acts contain a federal payment to the Joint Committee for operating DC Courts. The appropriation acts also require OMB to approve the apportionment of the federal payment to the Joint Committee on a quarterly basis for expenditures necessary to efficiently execute the functions vested in the courts.
3 National Capital Revitalization and Self- Government Improvement Act of 1997, Public Law No. 105- 33, Title XI, 111 Stat. 712 (1997).
Judges and nonjudicial employees of DC Courts are treated as federal employees solely for the purposes of eligibility in the federal health and life insurance and workers' compensation plans. For nonjudicial employees, this eligibility extends to federal retirement plans as well. In fiscal year
1998, the federal government also assumed responsibility for administering the judges' retirement funds, and the DC Courts assumed responsibility for the judges' pension costs as part of its fiscal year 1998 appropriation. The Revitalization Act also transferred the adult probation function from
DC Courts to a new entity, the District of Columbia Court Services and Offender Supervision Agency (COSA), 4 with a requirement that COSA be certified as a federal agency by August 5, 2000. In the short term, the COSA Trustee, an independent officer of the D. C. government, manages all funds and personnel associated with the entity. Court- Appointed Attorneys DC Courts appoints and compensates attorneys to represent persons who are financially unable to obtain such representation on their own under three programs: (1) the Criminal Justice Act program (CJA), 5 (2) the Counsel for Child Abuse and Neglect (CCAN) program, 6 and (3) the Guardianship program. 7 Indigent persons who are charged with criminal offenses can obtain the assistance of court- appointed attorneys through CJA. In family proceedings where child neglect is alleged or where the
termination of the parent and child relationship is under consideration and the parent, guardian, or custodian of the child is indigent, the child and/ or parent, guardian, or custodian of the child can obtain the assistance of a court- appointed attorney through CCAN. The Guardianship program pays for the representation and protection of mentally incapacitated individuals and minors whose parents are deceased. In addition to legal representation, these programs offer indigent persons access to experts to provide services such as transcription of court proceedings, expert witness 4 The Revitalization Act named the new federal agency the Offender Supervision, Defender and Court Services Agency, but it was renamed by the District of Columbia Courts and Justice Technical Corrections Act of 1998, Public Law No. 105- 274, Section 7( c), 112 Stat. 2419, 2426, October 21, 1998.
5 D. C. Criminal Justice Act of 1974, as amended, D. C. Code Ann. Secs. 11- 2601 through 11- 2608 (1981) (1995 Replacement Volume, 1999 Supp.). 6 Neglect Representation Equity Act of 1984, as amended, D. C. Code Ann. Secs. 16- 2304, 16- 2326. 1 (1981) (1997 Replacement Volume). 7 D. C. Guardianship Protective Proceedings, and Durable Power of Attorney Act of 1986, as amended, D. C. Code Ann. Secs. 21- 2001 through 21- 2085 (1981) (1997 Replacement Volume).
testimony, foreign and sign language interpretation, and investigations and genetic testing. Attorneys and expert- service providers who work on CJA, CCAN and Guardianship cases submit vouchers to DC Courts detailing time and expenses involved in working on a case. Following an administrative review and approval by the presiding judge or hearing commissioner, the voucher is forwarded to DC Courts, which prepares a list of payments to be made. The list is electronically submitted to the General Services Administration (GSA), which prepares and issues checks 8 paid from DC Courts' annual appropriation. During fiscal year 1998, DC Courts paid court- appointed attorneys at a rate of $50 per hour and reimbursed them for authorized expenses. Crime Victims
A District law established the Crime Victims Compensation Program under Compensation Program
DC Courts' jurisdiction before the Congress passed the Revitalization Act. The District law (1) identifies fines, fees, and other moneys for DC Courts to deposit into a Crime Victims Fund and (2) provides that compensation totaling up to $25,000 can be made from the fund to crime victims for economic loss. Payments can also be made for shelter, burial costs, or medical expenses. Objectives, Scope, and Our objectives were to (1) compare DC Courts' obligations for fiscal years Methodology
1996, 1997, and 1998, (2) determine whether DC Courts had a spending plan and obligated funds consistent with available resources in fiscal year 1998, and (3) determine why DC Courts deferred payments to court- appointed attorneys in fiscal year 1998 and whether payments that were made were processed in accordance with policies and procedures. To accomplish our objectives, we  obtained and reviewed DC Courts' general ledger account balances and other financial information for fiscal years 1996, 1997, and 1998;  obtained and analyzed DC Courts' budget requests, spending plans, and
details supporting budget documentation for fiscal year 1998;  obtained and reviewed financial information and correspondence
between DC Courts, OMB, the Department of Justice, and the Congress; 8 Prior to March 1998, this processing was done through the District's Financial Management System (FMS).
 obtained and compared court- appointed attorney payment information under CJA and CCAN for fiscal year 1998 and prior fiscal years; 9  reviewed policies and procedures for voucher payment and analyzed
about 30,000 records in DC Courts' tracking and payment databases that represent fiscal year 1998 payments through July; and  interviewed the Joint Committee on Judicial Administration; DC Courts' Executive Officer, Fiscal Officer, and Legal Counsel; CJA and CCAN program officials; officials in the Financial Operations Division who process voucher payments; officials from the Department of Justice, OMB, GSA and the COSA Trustee; officials from the District of Columbia's Department of Administrative Services; and court- appointed attorneys. In order to compare budgeted and obligated amounts, we gathered
financial information and analyzed obligations and funding resources reported by DC Courts. We used DC Courts' unaudited financial information, 10 which was compiled from various manual records and accounting and financial management systems, and held discussions with DC Courts officials to obtain additional clarification. We did our work in accordance with generally accepted government auditing standards between October 1998 and May 1999. We requested comments on a draft of this report from the Joint Committee on Judicial Administration in the District of Columbia. The Joint Committee provided us with written comments that are discussed in the DC Courts Comments and Our Evaluation section and are reprinted in appendix I.
Reported Obligations DC Courts' records indicated that total obligations in fiscal years 1996, for Fiscal Years 1996 1997, and 1998 were $115.4 million, $119 million, and $125. 6 million, respectively. Fiscal year 1998 obligations reflect our adjustments, as Through 1998
discussed later, and a different scope of activity than the prior years' obligations. This is primarily due to changes resulting from the Revitalization Act of 1997. 9 Our work on court- appointed attorneys focused on those appointed under the CJA and CCAN programs. The total payments of approximately $300,000 under the Guardianship program were not included since the amount was about 1 percent of the total payments to court- appointed attorneys and not deemed material to our review.
10 On May 19, 1999, DC Courts awarded a contract to KPMG Peat Marwick, LLP, to perform the first financial statement audit of its operations. The audit was for the year ended September 30, 1998, as required under the Revitalization Act.
For example, the adult probation function was transferred from DC Courts to the District of Columbia Court Services and Offender Supervision Agency (COSA) in fiscal year 1998. While DC Courts no longer had operational responsibility for the adult probation function, it continued for several months to pay salaries and related costs on behalf of the COSA Trustee. In March 1998, the Trustee took over the payments for adult probation and subsequently reimbursed DC Courts $7.8 million for the costs DC Courts paid on the Trustee's behalf. These costs and the related reimbursements were included in DC Courts' fiscal year 1998 obligations and available funds.
Also as a result of the Revitalization Act, nonjudicial employees received federal benefits that increased DC Courts obligations for fiscal year 1998. DC Courts also assumed responsibility for the judges' pension costs as part of its fiscal year 1998 appropriation for court operations and gave its
nonjudicial employees a 7- percent pay raise. DC Courts' Spending Prior to the decision to transfer the adult probation function to a new Plan and Obligation of entity, DC Courts had requested $123.5 million to fund its fiscal year 1998
operations. When DC Courts received $108 million in its fiscal year 1998 Funds
appropriation, it was responsible for developing a spending plan to ensure that its obligations did not exceed available resources. However, DC Courts did not develop such a plan. It obligated funds throughout the year based on its expectation of receiving additional funds. While DC Courts
received an additional $1.7 million in appropriated funds for the fiscal year, it did not receive all of the funding it anticipated. It also received $12.1 million in grants, interest, and reimbursements, including the $7.8 million reimbursement from the COSA Trustee, during the fiscal year. Letters between DC Courts and OMB during fiscal year 1998 reflect DC Courts officials' expectations of receiving additional resources and OMB's concern that if DC Courts did not lower its rate of spending, its obligations would exceed available funds. For example, in an April 1998 letter, OMB advised DC Courts that it was incurring obligations at a rate that would necessitate a deficiency or supplemental appropriation. For their part, DC Courts officials continued to seek additional funds during their discussions with the COSA Trustee, the Department of Justice, and OMB.
By the end of the fiscal year, DC Courts' records showed that obligations exceeded available resources by about $350,000 for fiscal year 1998. Specifically, its records showed obligations of almost $122.2 million and
funds received of about $121.8 million. However, we found that adjustments needed to be made to those amounts:  DC Courts deferred more than $4. 1 million of court- appointed attorney
payments that were eventually made with fiscal year 1999 funds but did not record these amounts as fiscal year 1998 obligations. Accordingly, we added this amount to DC Courts' reported fiscal year 1998 obligations.  DC Courts treated interest earned primarily from quarterly
apportionments of its appropriation as available budgetary resources for court operations. However, DC Courts did not have authority to spend this interest. For this reason, we reduced the amount that DC Courts reported as available resources for fiscal year 1998 by $773,000.
At our May 18 testimony, we reported that DC Courts' recorded obligations and available funding for fiscal year 1998 as adjusted were about $126.3 and $121 million, respectively, resulting in a potential overobligation of more than $5.2 million, in violation of the Anti- Deficiency Act. Recently, DC Courts officials advised us that some obligations in their fiscal year 1998 records needed to be deobligated. DC Courts officials stated that these included amounts that the District should not have recorded as obligations, as well as amounts for services that were no longer anticipated. In May 1999, we evaluated more than $500,000 of the proposed $1 million in deobligations and determined that almost $200,000 represented obligations for fiscal year 1998 that were still valid. For example, in three cases, these amounts represented contracted services that had been rendered during fiscal year 1998 for which the contractor had not yet billed DC Courts. In addition, we identified almost $200,000 of unrecorded fiscal year 1998 obligations. These changes reduced DC Courts' overobligation for fiscal year 1998 by approximately $600,000, to about $4.6 million.
Adjustments to Fiscal Year We found that DC Courts needed to increase its reported fiscal year 1998 1998 Obligations and obligations by more than $4.1 million to account for court- appointed Resources
attorney payments that had been deferred during fiscal year 1998 and not recorded as fiscal year 1998 obligations. DC Courts eventually made these payments with fiscal year 1999 funds as authorized by the District of Columbia Appropriations Act of 1999. However, this did not convert the deferred payments from fiscal year 1998 obligations to fiscal year 1999 obligations.
We also found that DC Courts needed to decrease its fiscal year 1998 budgetary resources because it had treated $773,000 of fiscal year 1998 interest income as an available budgetary resource for court operations without having explicit legislative authority to do so. DC Courts earned the interest primarily as a result of depositing quarterly apportionments of its
appropriation for court operations in interest bearing accounts. 11 The District of Columbia Home Rule Act provides that no amount may be obligated or expended by a District government officer or employee unless the amount has been approved by an act of Congress and then only according to that act. Also, the Revitalization Act amended the Home Rule Act to expressly provide that moneys 12 received by DC Courts be deposited in the U. S. Treasury or the Crime Victims Fund. 13 These statutory provisions support the general proposition that when the Congress appropriates funds for DC Courts, it establishes an authorized program
level beyond which DC Courts may not operate. Accordingly, DC Courts may not augment its appropriation without specific statutory authority to do so. The Home Rule Act provisions are clear and comprehensive. The provisions apply to all amounts and moneys received by DC Courts, and they are overcome only by the Congress granting the specific authority
needed. We are unaware of any statute that authorizes DC Courts to retain and spend interest earned on appropriations for court operations. Further, it undermines the Home Rule Act provisions and the general proposition they support to infer that when Congress required the Treasury to quarterly
pay apportioned amounts to DC Courts, the Congress also authorized DC Courts to retain and spend the interest it earns. Accordingly, DC Courts was not authorized to retain or use this interest income and should have remitted it to the U. S. Treasury. Anti- Deficiency Act By combining the adjustments described above with DC Courts' reported obligation balances, we determined that DC Courts had overobligated its
budgetary resources by $4.6 million. The Anti- Deficiency Act prohibits District government officers and federal officials from making 11 For fiscal years 1998 and 1999, the District of Columbia Appropriations Acts required the Treasury of the United States to pay appropriations quarterly to the DC Courts based on quarterly apportionments approved by OMB. 12 These generally refer to funds received from nonfederal sources, such as fines and fees. 13 Section 450 of the Home Rule Act, as amended.
(1) obligations or expenditures in excess of amounts available in an appropriation or fund unless they are otherwise authorized to do so by law and (2) an obligation or expenditure in excess of an apportionment. Apportionments at increments throughout a fiscal year are intended to prevent obligations and expenditures at a rate indicating a necessity for a
deficiency or supplemental appropriation. To the extent DC Courts overobligated its budgetary resources for fiscal year 1998, the overobligations violated the Anti- Deficiency Act.
Anti- Deficiency Act provisions constitute some of the fundamental financial management requirements for federal and District government activities subject to the congressional budget process. 14 The act's purpose is to ensure that agencies or activities funded by annual appropriations
manage their affairs so as not to exhaust their appropriations before the end of the fiscal year and require additional funding for their annual operations. OMB and we have stated that officers or employees of the federal government subject to the Anti- Deficiency Act may not incur obligations against anticipated receipts, including supplemental appropriations requested but not yet enacted, 15 because such receipts may not be realized. For example, the Congress may not enact a supplemental appropriation in the amount requested by an agency. 16 The official having administrative control of the appropriation is required to establish regulations to ensure compliance with the Anti- Deficiency Act and to identify the reasons for any obligation or expenditure exceeding an apportionment.
The Anti- Deficiency Act requires the head of an agency to report immediately to the President and the Congress any violation of the act including all relevant facts and a statement of actions taken. OMB Circular A- 34, Instructions on Budget Execution, provides additional guidance on information that the agency is to include in its report to the President. OMB instructs agencies to include the primary reason or cause for the
overobligation, any extenuating circumstances, the adequacy of the system 14 31 U. S. C. secs. 1341, 1342, 1349- 1351, 1511- 1519 (1994). 15 B- 230117- O. M., February 8, 1989, and OMB Circular No. A- 34, sec. 21.4 (Rev., Nov. 7, 1997). 16 OMB has made it clear that even in situations where OMB approves an apportionment request that would indicate the necessity for a supplemental or deficiency appropriation, it does not authorize the agency to exceed available resources. While an agency is required to submit a fully justified request for supplemental funding accompanying the deficiency apportionment request, OMB's approval of such an apportionment request does not commit OMB to recommend that amount to the President or transmit that amount to Congress. OMB Cir. No. A- 34, sec. 33. 2 (Rev., Nov. 7, 1997).
providing administrative control of funds, any changes necessary to ensure compliance with the Anti- Deficiency Act, and steps taken to prevent a recurrence of the same type of violation.
Violations of the Anti- Deficiency Act are generally the result of agencies incurring obligations of a discretionary nature in excess of available funding. An overobligation does not violate the Anti- Deficiency Act if it is, in the language of the act, otherwise authorized by law. However, no law explicitly authorized DC Courts to incur fiscal year 1998 obligations in excess of available resources. The argument that obligations for attorneys' fees in excess of available resources are otherwise authorized by law finds support on the grounds that these obligations are mandatory in nature. When a law establishes an appropriation or fund for the sole purpose of paying obligations of a mandatory nature, obligations in excess of available funding are not generally viewed as being in violation of the
requirements of the Anti- Deficiency Act. 17 While the obligations for court- appointed attorneys might reasonably be viewed to be of a mandatory nature, the critical issue for applying the Anti- Deficiency Act in this case is whether the overobligations were entirely attributable to the mandatory obligations for court- appointed attorneys and consequently authorized by law. This task is complicated by the fact that court- appointed attorney programs are financed as part of the
general appropriation for court operations. Under these circumstances, DC Courts should have considered the impact that the mandatory aspect of the program would have on the appropriation and managed the residual amounts prudently so that total obligations did not exceed the total amount appropriated. In other words, having funds for mandatory activities included in a lump sum appropriation available for discretionary activities did not relieve DC Courts of its responsibility to manage discretionary spending to avoid exceeding available resources and violating the Anti- Deficiency Act. 18
While DC Courts' overobligation of an appropriation that funds both mandatory and discretionary programs may not necessarily constitute an 17 See 65 Comp. Gen. 4 (1985).
18 District officials must supervise and manage the District's financial transactions to insure that appropriations are not exceeded and the requirements of the Anti- Deficiency Act are met. B- 262069, August 1, 1995 (the District would violate the Anti- Deficiency Act if its discretionary decisions on the Medicaid and Aid to Families with Dependent Children programs led to overobligating its lump sum appropriation for Human Support Services).
Anti- Deficiency Act violation, it at least creates a presumption of such a violation. To avoid violating the Anti- Deficiency Act, DC Courts would have to show that it took all reasonable steps to manage the account within the amounts appropriated and that any obligations in excess of available resources resulted from constitutional or statutory requirements. 19 To support this argument, the burden is on DC Courts to provide evidence of unanticipated mandatory spending and efforts undertaken to cut discretionary spending.
The actions of DC Courts during fiscal year 1998 do not demonstrate that the overobligation of the fiscal year 1998 account resulted from obligations that were beyond its control. For example, the $4.1 million in payments for court- appointed attorneys clearly was not deferred because it was unexpected the fiscal year 1998 obligations for court- appointed attorneys were similar to those in fiscal year 1997 and the estimates for fiscal year 1998. Also, DC Courts granted a discretionary pay raise 20 that took effect after the fiscal year 1998 appropriation was enacted into law even though the appropriation was more than $15 million less than the amount DC
Courts initially requested. Finally, DC Courts did not base its spending during most of fiscal year 1998 on the appropriation it received. DC Courts officials have stated that they did not violate the Anti- Deficiency Act because a provision in the fiscal year 1999 appropriation act authorized DC Courts to make court- appointed attorney payments that had been deferred from fiscal year 1998. The DC Courts' view is that this provision authorized the deferral of these payments in fiscal year 1998 and allowed DC Courts to use fiscal year 1999 funds to liquidate these obligations, all
without violating the Anti- Deficiency Act as long as DC Courts paid all fiscal year 1998 overobligations in accordance with the fiscal year 1999 appropriation act. We disagree with this view. The provision in the fiscal year 1999 appropriation act merely authorizes DC Courts to use fiscal year 1999 funds to pay obligations incurred in fiscal year 1998 and prior years
for court- appointed attorneys. The fiscal year 1999 appropriation act had not been enacted when DC Courts deferred payments to court- appointed 19 B- 262069, August 1, 1995. 20 On November 13, 1997, the Joint Committee on Judicial Administration approved comparability of the DC Courts compensation schedule with the federal court's schedule for nonjudicial employees, to be achieved over a 2 fiscal- year period, provided adequate funding was appropriated. The first salary adjustment of 7 percent became effective December 7, 1997, at a reported cost of almost $2.8 million for fiscal year 1998.
attorneys and, according to its records, overobligated fiscal year 1998 appropriations.
The Congress has long recognized that the timing of payments for court- appointed attorneys is not predictable and that claims attributable to a fiscal year may be submitted or approved after the end of the fiscal year when funds are no longer available. The provision in the fiscal year 1999 appropriation act addresses this problem by making fiscal year 1999 funds available for such payments without regard to when the obligations were incurred. It does not, as DC Courts suggested to us, authorize DC Courts to defer paying obligations already identified and ready for payment.
Further, if such a position were to prevail, it would undermine congressional control of DC Courts' appropriation. DC Courts has identified no limitations as a matter of law to its position that the provision
is available whenever DC Courts' costs exceed resources, as long as only costs for court- appointed attorneys are deferred. This position, if accepted, would allow DC Courts to respond to dissatisfaction with its appropriation by deferring court- appointed attorney payments at any time or in any amount throughout a fiscal year. This could lead to spending for court operations in excess of what the Congress intended and shift significant costs for court- appointed attorneys to the next fiscal year, all without violating the Anti- Deficiency Act. The language and purpose of the provision in the fiscal year 1999 appropriation act and the Anti- Deficiency Act support no such interpretation. To ensure that in the future appropriated funds intended for court- appointed attorneys are not used for other purposes, the Congress could make a separate appropriation to DC Courts for payments to court- appointed attorneys. This appropriation could be similar to that provided to federal courts each year to fund payments to court- appointed
attorneys, in which funds remain available until expended. Payments to Throughout fiscal year 1998, it was clear that unless DC Courts modified its Court- Appointed spending or received additional funds, it was facing a shortfall. By the third quarter, when DC Courts had not received the additional funds it Attorneys
anticipated, there were limited options available for addressing the projected shortfall. DC Courts officials considered furloughing employees and closing the courts for a period of time during the summer, as well as deferring court- appointed attorney and expert service provider payments. In May 1998, OMB officials advised DC Courts to reduce nonpersonnel
costs instead of furloughing employees or closing the courts to avoid an Anti- Deficiency Act violation. On July 24, 1998, DC Courts began deferring payments for court- appointed attorneys for the remainder of the fiscal year, and it eventually used fiscal year 1999 appropriations to pay most of those amounts. As part of its budget request, DC Courts had estimated $31.6
million for payments to court- appointed attorneys in fiscal year 1998, an amount that was similar to that in the previous year. As of July 1998, DC Courts had expended $25.8 million on court- appointed attorney payments. Voucher Processing We found that DC Courts processed voucher payments for court- appointed Procedures
attorneys in accordance with its policies and procedures. However, these procedures did not address certain matters that were important to proper disposition of voucher claims, including
 time frames for making such payments,  procedures for maintaining data on vouchers reported as missing, and  procedures for notifying attorneys and expert- service providers when voucher amounts claimed were reduced. Time Frames for Voucher For fiscal year 1998, DC Courts was not subject to the federal Prompt Payments
Payment Act or the District Quick Payment Act. However, the District's fiscal year 1999 appropriation 21 subjected DC Courts to the requirements of the federal Prompt Payment Act. Under the act, an entity that fails to pay promptly for goods and services accepted as satisfactory may be required to pay interest on amounts owed. For fiscal year 1998, we analyzed payment timing from two different perspectives. First, we looked at the number of days from the vouchers first being submitted by the attorney or expert provider to the payment
being made. Second, we looked at the number of days from the presiding judge or hearing commissioner approving the voucher for payment to the payment being made. Our analysis of DC Superior Courts' fiscal year 1998
21 Public Law No. 105- 277, sec. 162, 112 Stat. 2681- 148 (Oct. 21, 1998).
paid voucher data 22 through July 1998 showed that 48 percent of these vouchers were paid within 30 days of being submitted. Ninety- four percent of the vouchers for court- appointed attorneys and expert service providers were paid within 30 days of the presiding judge's or hearing commissioner's approval.
We also reviewed DC Courts' implementation of the Prompt Payment Act in fiscal year 1999 as it applies to paying court- appointed attorneys. The purpose of the act is to encourage agencies to pay bills in a timely manner. If an agency fails to pay a bill by the required payment date, interest begins to accrue. Except for situations not relevant here, the required payment date under the act is 30 days after receipt of a proper invoice. 23 The Prompt Payment Act defines a proper invoice as one that contains or is accompanied by substantiating documentation required by regulation or contract that is necessary to permit the agency to approve the bill. 24
On December 10, 1998, the Chief Judge of the Superior Court issued a memorandum to all judges and hearing commissioners stating that with regard to vouchers for CJA and CCAN payments, it had been determined that the date DC Courts receives a proper invoice is the date the
authorizing judge or hearing commissioner approves the voucher. The Superior Court Trial Lawyers Association has raised concerns over this determination. We share their concern because if a proper invoice is received only when it is approved, DC Courts could avoid incurring interest on vouchers simply because the judge or hearing commissioner has not reviewed them. We understand that this matter is currently under discussion between DC Courts and the Superior Court Trial Lawyers Association. As of June 1999, DC Courts did not have a mechanism for tracking vouchers from acceptance to due date to ensure that they were processed and paid in time and to avoid interest penalties. Further, the absence of
policies or procedures for retaining data on the number of vouchers 22 To perform our analysis on the timeliness of voucher processing, we used data DC Courts merged from databases in its voucher tracking and voucher payment systems. Court of Appeal cases and vouchers for court transcribers are not tracked in the voucher tracking system. Therefore, they are not a part of this analysis. We excluded some records because of missing or erroneous data in data fields. DC Courts was unable to explain completely the reasons for the missing or erroneous data.
23 31 U. S. C. 3902 (b), 3903 (a) (1) (B) (1994). 24 31 U. S. C. 3901 (a) (3) (1994).
reported as missing or the disposition of such vouchers created additional concern that a significant number of vouchers would not be paid until after the due date.
Lost or Missing Vouchers Prior to and during our review, court- appointed attorneys claimed that filed vouchers were sometimes lost and had to be refiled. The DC Courts accounting manager responsible for voucher processing and payment estimated that out of over 4,000 vouchers processed each month, about 50 vouchers were reported as missing. However, the accounting manager did not have any specific information. The underlying causes of this problem could not be explained. We noted that procedures in effect presented opportunities for vouchers to be misplaced or lost at two different stages during voucher processing. DC Courts date- stamps each voucher when it is received but does not maintain a log of these submissions. Further, DC Courts does not input voucher data
into its tracking system until the voucher is audited for accuracy, a process that, according to the accounting manager, takes about 8 working days. Without logging in all vouchers upon receipt or immediately entering
voucher data into the tracking system, DC Courts cannot ensure complete accountability for all vouchers. This increases the risk that vouchers lost or misplaced at this stage will not be recovered.
After a voucher is audited for accuracy, it is forwarded to the presiding judge or hearing commissioner for approval. Although DC Courts' voucher tracking system identifies the date of specific events, vouchers are hand- delivered to and from the judges' chambers, presenting additional opportunities for vouchers to be misplaced or lost.
Reduction of Voucher During the final review of vouchers, the judge or hearing commissioner has Amounts
the authority to reduce the amount of the voucher if he or she determines that some of the attorney's or provider's hours or expenses should be disallowed. DC Courts did not have procedures covering how judges or hearing commissioners were to document such decisions to the attorney or provider. However, DC Courts officials stated that this information was available to attorneys who requested it.
Our analysis of fiscal year 1998 paid voucher data showed that judges or hearing commissioners reduced voucher amounts in 9 percent of the cases, more than half of which involved reductions of $100 or less.
Crime Victims During our review, we identified a matter that, while not affecting DC Compensation Courts' use of its fiscal year 1998 appropriation for court operations, needs
to be addressed to provide DC Courts the requisite authority to make Program payments out of its Crime Victims Fund. A District law established the Crime Victims Compensation Program under DC Courts jurisdiction prior to the enactment of the Revitalization Act. 25 The District law provides that the fund may be credited with (1) appropriations made to it, (2) fines assessed on persons convicted of serious traffic or misdemeanor offenses, or persons convicted or pleading guilty or no contest to felony offenses,
(3) amounts recovered by the District from offenders or third parties by subrogation to the victim's rights as a result of payments of claims to victims, (4) repayments of overpayments or false claims payments from claimants, and (5) amounts received from any source, including grants from the federal government, for the purpose of the fund. The District law provides that compensation totaling up to $25,000 from the fund can be made to crime victims for economic loss. Payments can also be made for shelter, burial costs, or medical expenses. DC Courts' records indicated that about $1.5 million in such payments plus almost $300,000 of administrative cost payments were made during fiscal year 1998 and that the balance of the fund at September 30, 1998, was about $6.8 million. While the Revitalization Act amendment to the Home Rule Act supports the authority of DC Courts to deposit the fines, fees, and other money identified in the District law to the Crime Victims Fund, the Revitalization Act makes no mention of spending amounts deposited to the fund. Further, nothing in the language of the District's fiscal years 1998 or 1999
appropriation acts appropriates amounts from the Crime Victims Fund. Finally, we have not identified any other federal law authorizing payments from the fund. The District of Columbia Home Rule Act 26 states that no officer or employee of the District of Columbia government may obligate or spend an amount unless it is approved by an act of the Congress and then
only according to that act. Accordingly, we conclude that DC Courts did not have the requisite legislative authority to make payments from the fund.
25 The Victims of Violent Crime Compensation Act of 1996, D. C. Law 11- 243, 44 DCR 1142, 2601 (April 9, 1997), D. C. Code Ann. Secs. 3- 421 through 3- 438 (1998 Supp.). 26 Section 446 of the Home Rule Act, as amended.
Conclusions DC Courts experienced difficulties in planning and budgeting in fiscal year 1998, its first year of operations with direct federal funding. In a transition year in which DC Courts underwent changes to its functions and responsibilities, DC Courts' management did not properly execute its responsibility to operate within available resources. Appropriate recognition of obligations incurred and resources available and compliance with federal laws and guidelines addressing its financial management are crucial to improving DC Courts' performance in this area. In addition, DC Courts did not have complete information in its voucher tracking system to ensure that all submitted vouchers were promptly tracked, processed, and paid. Revised procedures in this area and improvements to its voucher
tracking system could improve DC Courts' timeliness in making voucher payments and reduce the incidence of missing vouchers. Improvement in these areas has become critical in fiscal year 1999, now that DC Courts is subject to the federal Prompt Payment Act and may be required to pay interest on payments made more than 30 days after receipt of a proper invoice.
Recommendations to If the Congress continues to require the U. S.Treasury to pay quarterly the Congress
apportionments to DC Courts, we recommend that the Congress consider authorizing DC Courts to retain the interest earned and requiring DC Courts to include estimated interest in its annual budget request. This
would alleviate the need for DC Courts and U. S.Treasury to process interest repayments to U. S. Treasury. If the Congress wishes to ensure that appropriated funds intended for payment of court- appointed attorneys are not used for other purposes, we recommend that the Congress consider making a separate appropriation to DC Courts for payments to court- appointed attorneys.
Recommendations to We recommend that the Joint Committee on Judicial Administration DC Courts
 perform all necessary investigation and reporting under the Anti- Deficiency Act related to DC Courts' overobligation of its fiscal year 1998 appropriation,  transfer to the U. S. Treasury all interest earned on appropriated funds or seek legislative relief from repaying the interest that was improperly retained,
 issue guidance providing that interest is to be paid when vouchers containing or accompanied by all required substantiating documentation are not paid by the required payment date,  establish procedures that require all vouchers to be logged and tracked immediately upon receipt, and  seek legislation authorizing DC Courts to use the Crime Victims Fund to pay eligible claims under the Crime Victims Compensation Program.
DC Courts' Comments In commenting on a draft of the report, DC Courts disagreed with our and Our Evaluation findings concerning
 its violation of the Anti- Deficiency Act in fiscal year 1998 and  its use of interest earned on its appropriation as a resource to fund court operations.
In addition, DC Courts disagreed with our conclusions and the need for implementing three of our recommendations. They agreed to seek clarifying legislation to address two of our other recommendations. DC Courts did provide technical comments which we have incorporated as appropriate but have not reproduced in our report. In several meetings with us and in a written statement submitted to us in May 1999, DC Courts stated that it disagreed with the legal basis for our conclusion that DC Courts violated the Anti- Deficiency Act by overobligating its budgetary resources by approximately $4.6 million in fiscal year 1998. 27 We considered DC Courts' position in preparing the draft
of this report. In summarizing its position in its comments on our draft, DC Courts stated two principal reasons why its actions were in conformity with the Anti- Deficiency Act. First, DC Courts asserted that because it has the authority to defer attorney payments under its appropriation act, its actions constitute an exception to the Anti- Deficiency Act. As discussed in detail in this report, we disagreed with DC Courts' position. We stated that the appropriation act provides
authority to use current funds to pay prior year obligations and not the 27 In our testimony on May 18, 1999, we reported that the amount of the potential overobligation was $5. 2 million. Subsequent to our testimony, DC Courts provided us with proposed deobligations for fiscal year 1998. We reviewed the proposed deobligations in May 1999 and, as a result, revised the amount of DC Courts' overobligation for fiscal year 1998 to about $4.6 million.
authority to decide to defer paying obligations already identified and ready for payment. The Congress' granting of this authority in the fiscal year 1999 appropriation act (and prior years' acts) addressed the difficulty of attorney claims being submitted and approved in one fiscal year for services rendered in prior fiscal years and, therefore, being obligations chargeable to the prior fiscal years. This authority in the appropriation act
is significant because without it, the fiscal year 1999 funds would not have been available to pay prior year obligations. DC Courts' comments do not address this basic tenet of appropriations law but rather commingle the
separate issues of whether DC Courts may (1) overobligate its fiscal year 1998 appropriation to the extent of its attorney payments and (2) use its fiscal year 1999 appropriation to pay claims attributable to prior years.
Furthermore, we observed that DC Courts' position establishes no limits as a matter of law and would undermine congressional control. DC Courts characterizes the appropriation as providing authority to defer attorney payments from one year to the next only when confronted with extraordinary circumstances. However, it offers no statutory basis for limiting the asserted authority only to extraordinary circumstances. As discussed in our report, DC Courts is authorized to obligate funds for court- appointed attorneys in excess of available resources without violating the Anti- Deficiency Act if overobligations are solely attributable
to mandatory spending as evidenced by (1) unanticipated spending for attorneys and (2) reductions in discretionary spending designed to keep total obligations within total resources. This authority is very different than the authority to defer attorney payments from one year to the next and spend the saved attorney payments on court operations that DC Courts attempts to read into the appropriation act.
Second, DC Courts asserts that the Anti- Deficiency Act allows for a deficiency or supplemental request for appropriations where (1) the enactment of new laws after budget requests are submitted to the Congress results in increased costs or (2) the government's continuation of essential functions for the safety of human life or the protection of property is required. DC Courts refers to 31 U. S. C. 1515 (b)( 1)( A) and (B), a provision of the Anti- Deficiency Act. However, DC Courts' reliance on this provision is misplaced. Section 1515 is not an exception to the Anti- Deficiency Act's basic prohibition of obligating or spending in excess of or in advance of an appropriation. Rather, section 1515 is a statutory exception only to the general apportionment rule in 31 U. S. C. 1512, which prohibits apportioning funds at a rate indicating a deficiency or a need for a supplemental
appropriation. This distinction is discussed in II GAO, Principles of Federal
Appropriations Law (GAO/ OGC 92- 13, December 1992, pp. 6- 80 through 6- 83). Further, OMB Circular A- 34, sec. 33.2 (Rev. Nov. 7, 1997) makes clear that an apportionment indicating a deficiency or a need for supplemental appropriation does not guarantee the agency that OMB, the President, or the Congress will support the agency's request for supplemental funding.
Even if DC Courts had met the conditions in section 1515( b) and received an apportionment indicating a need for supplemental funding, section 1515 provides no legal basis for DC Courts to obligate funds in excess of the amount appropriated. 28
One of the themes running through DC Courts' comments is that DC Courts received inadequate funding and had limited options available for spending reductions. DC Courts asserts that our report needs more information on this matter because such information would make the report more complete and accurate and lead to different legal conclusions. In general, DC Courts' comments about the Revitalization Act, as well as its dealings with the Congress, OMB, and other executive branch entities over the funding it believes it should have received for fiscal year 1998, may be among the factors DC Courts could offer as extenuating circumstances that resulted in its violation of the Anti- Deficiency Act. However, none of the additional information DC Courts has offered affects our legal analysis of DC Courts' Anti- Deficiency Act violation. In this regard, DC Courts
commented that our report overstates the very limited relevance of a modest pay increase. However, we found that the discretionary pay raise was almost $3 million, or about 65 percent of DC Courts' $4. 6 million overobligation of its resources in violation of the Anti- Deficiency Act. 29
DC Courts also disagreed with our conclusion that it lacked the authority to retain and spend interest earned on the federal funds appropriated for 28 DC Courts' reference to 31 U. S. C. 1515 is also misplaced for factual reasons. After passage of the Revitalization Act and before enactment of the District's fiscal year 1998 appropriation act, the President submitted a revised budget request to the Congress that reflected the Revitalization Act's changes. Accordingly, a request for supplemental funding under section 1515( b)( 1)( A) could not be based on the Congress having passed a law affecting DC Courts after having received a budget request for DC Courts. Further, while DC Courts may have had funding difficulties in fiscal year 1998, those difficulties did not result, as section 1515( b)( 1)( B) requires, from an emergency. Finally, when OMB's last apportionment for the year to DC Courts was made in April 1998, OMB warned DC Courts that it needed to reduce its rate of spending to avoid violating the Anti- Deficiency Act.
29 Our central point regarding the pay raise is that it represents discretionary spending that could have been postponed or eliminated. This is supported by the effective date of the pay raise, which was subject to sufficient funds being available, and which was awarded after DC Courts knew that the Congress had authorized an appropriation for fiscal year 1998 that was over $15 million less than the amount requested.
court operations. As discussed in the report, our conclusion is based on the language of the Home Rule Act and the Revitalization Act consistent with basic principles of federal appropriations law. In contrast, DC Courts asserts that it may infer the authority to retain and spend the interest because the Congress remained silent on the matter of interest even though the Congress required the Department of the Treasury to make
quarterly payments to DC Courts, and it was inevitable that DC Courts would deposit the payments in an interest- bearing account. DC Courts' view is contrary to the fundamental principle of appropriation law that prohibits an agency from augmenting its appropriation from other sources unless specifically authorized by law. Because nothing in the language of any act, or even legislative history, indicates that the Congress wanted DC Courts to retain and spend interest earned on fiscal year 1998
appropriations, we find no basis to impute to the Congress a grant of authority that overrides limitations found in law and grounded in principles of appropriations law. Accordingly, as discussed in this report, the interest should have been deposited to Treasury, as required by section 450 of the Home Rule Act as amended by the Revitalization Act. During our review, we requested documentation from DC Courts regarding its preparation and execution of a spending plan tied to its fiscal year 1998 appropriation. We found that when DC Courts received an appropriation that was over $15 million less than it requested, it did not take immediate steps to cut planned spending to reflect the actual level of funding but rather proceeded with a discretionary pay raise and continued to spend at a rate that would necessitate a deficiency or a supplemental appropriation. Other than not filling vacant positions (which, according to DC Courts, cut
almost $3 million in operational costs), DC Courts did not propose the necessary spending cuts until the third quarter of the fiscal year and only after requests for supplemental funding did not materialize. At that point, as DC Courts officials pointed out, their options to make spending cuts were limited. DC Courts took exception to our discussion of the Prompt Payment Act in relation to its processing of payment vouchers because, as we noted in our report, DC Courts was not subject to the Prompt Payment Act until fiscal year 1999. We found it useful to refer to the Prompt Payment Act because in the absence of any legal requirements to make timely payments, it provided a recognized standard and DC Courts payments were made
subject to the Prompt Payment Act beginning in fiscal year 1999.
DC Courts also stated that our report did not accurately characterize the nature of communications between DC Courts and both OMB and Members of Congress. However, this report and our previously issued testimony and chronology of events 30 fairly reflect all the relevant and critical documentation DC Courts provided to us. DC Courts did not include new or additional information in its comments that affects our legal positions and conclusions.
Subsequent Following the receipt of comments from DC Courts on a draft of this report Congressional Actions and discussion of our recommendations with the House and Senate staff of the oversight and appropriations committees, the Conference Committee
reported H. R. 2587, the District of Columbia appropriations bill for fiscal year 2000, on August 5, 1999. 31 If enacted as reported by the Conference Committee, H. R. 2587 would address four of our recommendations as follows:
 It addresses the recommendation that the Congress consider authorizing DC Courts to retain interest earnings and reflect estimated interest in its budget requests if the Congress continues to require the U. S. Treasury to pay quarterly apportionments to DC Courts. The proposed language eliminates the requirement that the U. S. Treasury
pay the apportionments quarterly to DC Courts and requires all amounts to be quarterly apportioned by OMB, obligated, and expended in the same manner as funds appropriated to other federal agencies. 32 Thus, federal funds will remain with the Treasury until needed for authorized DC Courts activities, and disbursements for these authorized activities will be made directly from the Treasury. This change would eliminate the need for an interest- bearing bank account to handle the federal payment to DC Courts.  It addresses the recommendation that the Congress consider making a separate appropriation to DC Courts for payments to court- appointed
attorneys. The proposed language establishes a separate federal payment for Defender Services in the District of Columbia Courts, specifically for making payments to court- appointed attorneys under the
30 District of Columbia Courts: Chronology of Events Associated with DC Courts' Financial- Related Issues for Fiscal Year 1998 (GAO/ AIMD- 99- 204R, June 7, 1999). 31 H. R. Rep. 106- 299. 32 H. R. Rep. 106- 299, at 3.
CJA, CCAN, and Guardianship programs, and requires that payroll and financial services be provided by GSA, which must submit monthly reports to the President and specific committees. 33  It addresses the recommendation that DC Courts pay the Treasury the interest already earned on prior federal payments. H. R. 2587 would
authorize DC Courts to use up to $1.2 million of interest earned on the fiscal year 1999 federal payment to make certain payments to court- appointed attorneys for indigents. 34 Our recommendation that DC Courts pay the Treasury interest earned on the fiscal year 1998 federal
payment remains unaffected.  It addresses the recommendation that DC Courts request legislative
authority to spend money in the Crime Victims Fund. Section 160( b)( 1) of H. R. 2587 would authorize DC Courts to spend moneys properly deposited in the Crime Victims Fund for purposes authorized by the Crime Victims Act, as amended. In addition, section 160( e) of H. R. 2587
would ratify any payments made from the Crime Victims Fund on or after April 9, 1997, to the extent the amounts are authorized under the Crime Victims Compensation Act of 1996, as amended.
We are sending copies of this letter to Senator Kay Bailey Hutchinson, Chairwoman, Subcommittee on the District of Columbia, Senate Committee on Appropriations; Senator Richard Durbin, Ranking Minority Member, Subcommittee on the District of Columbia, Senate Committee on Appropriations, and Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia, Senate Committee on Governmental Affairs; Senator George Voinovich, Chairman, Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia, Senate Committee on Governmental Affairs; and Representative Eleanor Holmes Norton, Ranking Minority Member, Subcommittee on the District of Columbia, House Committee on Government Reform. We are also sending copies to
the Joint Committee on Judicial Administration, DC Courts, through the Honorable Annice Wagner, Chair; the Honorable Jacob J. Lew, Director, Office of Management and Budget; and Grace Mastelli, Deputy Assistant Attorney General, Department of Justice. Copies will be made available to others upon request. 33 H. R. Rep. 106- 299 at 3- 4. 34 H. R. Rep. 106- 299 at 3- 4.
If you have any questions, please contact me or Steven Haughton at (202) 512- 4476. Key contributors to this assignment were Marcia Washington, Lou Fernheimer, Jeffrey Jacobson, and Richard Cambosos. Gloria L. Jarmon Director, Health, Education, & Human Services Accounting and Financial Management Issues
Comments From the District of Columbia Appendi I x Courts
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a799226 A Report to Congressional Requesters September 1999 D. C.
COURTS Planning and Budgeting Difficulties During Fiscal Year 1998
Accounting and Information Management Division B-283119 Letter
September 16, 1999 The Honorable Ernest J. Istook Chairman The
Honorable James P. Moran Ranking Minority Member Subcommittee on
the District of Columbia Committee on Appropriations House of
Representatives The Honorable Thomas M. Davis, III Chairman
Subcommittee on the District of Columbia Committee on Government
Reform House of Representatives On May 18, 1999, we testified
before the Subcommittee on the District of Columbia, House
Committee on Appropriations, regarding the District of Columbia
Courts' (DC Courts) financial operations in fiscal year 1998, its
first year of operations with direct federal funding. 1 In our
testimony, we reported that DC Courts had experienced difficulties
in planning and budgeting during this transition year. Our review
of DC Courts records showed that it had potentially overobligated
its resources, which could violate the Anti- Deficiency Act.
Following our testimony, we provided to the Subcommittee on the
District of Columbia, House Committee on Appropriations, a
chronology of pertinent events related to the DC Courts
appropriation and obligations for fiscal year 1998. 2 We also
reviewed proposed deobligations submitted by DC Courts. This
report (1) supplements our testimony, providing additional detail
on our findings, and (2) transmits our recommendations to the
Congress and DC Courts. Our objectives were to address the
following questions, which were also discussed at the testimony:
1. What were DC Courts obligations for fiscal years 1996, 1997,
and 1998? 1 District of Columbia Courts: Financial Related Issues
for Fiscal Year 1998 (GAO/ T- AIMD/ OGC- 99- 176). 2 District of
Columbia Courts: Chronology of Events Related to DC Courts'
Appropriation and Obligations for Fiscal Year 1998 (  GAO/AIMD-99-
204R , June 7, 1999). 2. Did DC Courts have a spending plan for
fiscal year 1998 and obligate funds in accordance with available
resources? 3. Why did DC Courts defer payments to court- appointed
attorneys from late July 1998 through September 1998, and were
those payments made in fiscal year 1998 processed in accordance
with policies and procedures? During the course of our review, we
also identified an issue regarding DC Courts' authority to spend
money from the Crime Victims Fund for the Crime Victims
Compensation Program. Results in Brief DC Courts incurred
obligations of $115.4 million, $119 million, and $125.6 million in
fiscal years 1996, 1997, and 1998, respectively. Fiscal year 1998
obligations reflect a different scope of activities than prior
year obligations, primarily because of changes necessitated by the
Revitalization Act of 1997. These changes included the transfer of
a DC Courts function to another entity and increased costs of
employee benefits during fiscal year 1998. DC Courts also gave its
nonjudicial employees a 7- percent pay raise and assumed
responsibility for judges' pension costs as part of its fiscal
year 1998 appropriation for court operations. DC Courts did not
prepare and execute a budget based on amounts appropriated for
fiscal year 1998. Records showed that throughout the year, DC
Courts was aware that its spending was on pace to exceed available
resources. However, rather than managing within its available
funds, DC Courts incurred obligations in anticipation of receiving
additional resources from the Congress and others to cover the
difference. Faced with an impending shortfall in operating funds,
DC Courts officials deferred payments totaling $5.8 million owed
to court- appointed attorneys and expert service providers during
the last 3 months of fiscal year 1998. The Congress transferred
$1.7 million in fiscal year 1998 funds to DC Courts that was used
for deferred court- appointed attorney payments and authorized DC
Courts to use the fiscal year 1999 appropriation to fund the
remaining deferred amount of $4.1 million. As of May 25, 1999, we
found that DC Courts fiscal year 1998 obligations exceeded
available resources by $4.6 million, in violation of the Anti-
Deficiency Act. This funding shortfall reflected the $4.1 million
in deferred payments to court- appointed attorneys that should
have been recorded as fiscal year 1998 obligations and our
assessment of deobligations for fiscal year 1998 submitted by DC
Courts. In addition, DC Courts treated $773,000 in interest earned
primarily on the bank balances from quarterly apportionments of
its fiscal year 1998 appropriation as an available budgetary
resource for court operations without having legislative authority
to do so. According to our overall evaluation, obligations and
available funding for fiscal year 1998 were $125.6 million and
$121 million, respectively. In general, DC Courts processed
vouchers for court- appointed attorneys and expert- service
providers in accordance with established policies and procedures.
However, its policies did not (1) include time frames for
processing the vouchers and making payments or (2) require that
judges document decisions to reduce claimed voucher amounts.
Further, DC Courts did not have procedures for retaining data on
vouchers reported as lost or missing. These deficiencies are of
particular concern given that DC Courts became subject to the
federal Prompt Payment Act in fiscal year 1999. Under this act, DC
Courts could be required to pay interest on any voucher payment
made more than 30 days after submission of a proper invoice. In
addition, DC Courts did not have the requisite authority to spend
funds in the Crime Victims Fund account. DC Courts' records
indicated that it spent about $1.8 million during fiscal year
1998. This report includes recommendations to the Congress and DC
Courts. In response to a draft of this report, DC Courts disagreed
with our conclusions and the need for implementing three of our
recommendations. They agreed to seek clarifying legislation to
address two of our other recommendations. They did not directly
address the other recommendations. Subsequent to DC Courts'
response, the Conference Committee on the District of Columbia
Appropriations Act, 2000 adopted provisions that, if enacted,
would address four of the recommendations. Background The District
of Columbia Court Reform and Criminal Procedure Act of 1970 (Court
Reform Act) transferred jurisdiction over all local judicial
matters to a unified court system for the District. This entity,
known as DC Courts, includes  the Superior Court, which is the
trial court with general jurisdiction over virtually all local
legal matters, including criminal, civil, juvenile, domestic
relations, probate, and small claims cases, and  the Court of
Appeals, the highest court of the District of Columbia, which
reviews all appeals from the Superior Court, as well as decisions
and orders of D. C. government administrative agencies. The Court
Reform Act provided for the creation of a policy- making body for
DC Courts, the Joint Committee on Judicial Administration. The
Joint Committee, comprised of the two chief judges and three
associate judges elected annually by the judges of the Superior
Court and Court of Appeals, submits DC Courts' annual budget
requests and is responsible for DC Courts' general personnel
policies, accounting and auditing, procurement and disbursement,
development and coordination of statistical and management
information systems and reports, and other related administrative
matters. The Joint Committee appoints the executive officer, who
manages the day- to- day administrative and financial management
of the Court System on the Committee's behalf. The fiscal officer,
subject to the supervision of the executive officer, is
responsible for maintaining accounting records and processing
payments from the general appropriation. Impact of the 1997 The
Revitalization Act 3 changed DC Courts' funding process,
nonjudicial Revitalization Act on DC employee compensation, and
functional responsibilities. Under the Courts Revitalization Act,
the federal government took over certain financial
responsibilities and roles previously held by DC Courts under the
Court Reform Act. Some activities became federal government
responsibilities, while others remained local government
activities funded with federal dollars. The Revitalization Act
provides for direct federal funding of DC Courts. The Joint
Committee submits the Courts' budget request to the Congress
through the Director of the Office of Management and Budget (OMB).
The District's fiscal years 1998 and 1999 appropriation acts
contain a federal payment to the Joint Committee for operating DC
Courts. The appropriation acts also require OMB to approve the
apportionment of the federal payment to the Joint Committee on a
quarterly basis for expenditures necessary to efficiently execute
the functions vested in the courts. 3 National Capital
Revitalization and Self- Government Improvement Act of 1997,
Public Law No. 105- 33, Title XI, 111 Stat. 712 (1997). Judges and
nonjudicial employees of DC Courts are treated as federal
employees solely for the purposes of eligibility in the federal
health and life insurance and workers' compensation plans. For
nonjudicial employees, this eligibility extends to federal
retirement plans as well. In fiscal year 1998, the federal
government also assumed responsibility for administering the
judges' retirement funds, and the DC Courts assumed responsibility
for the judges' pension costs as part of its fiscal year 1998
appropriation. The Revitalization Act also transferred the adult
probation function from DC Courts to a new entity, the District of
Columbia Court Services and Offender Supervision Agency (COSA), 4
with a requirement that COSA be certified as a federal agency by
August 5, 2000. In the short term, the COSA Trustee, an
independent officer of the D. C. government, manages all funds and
personnel associated with the entity. Court- Appointed Attorneys
DC Courts appoints and compensates attorneys to represent persons
who are financially unable to obtain such representation on their
own under three programs: (1) the Criminal Justice Act program
(CJA), 5 (2) the Counsel for Child Abuse and Neglect (CCAN)
program, 6 and (3) the Guardianship program. 7 Indigent persons
who are charged with criminal offenses can obtain the assistance
of court- appointed attorneys through CJA. In family proceedings
where child neglect is alleged or where the termination of the
parent and child relationship is under consideration and the
parent, guardian, or custodian of the child is indigent, the child
and/ or parent, guardian, or custodian of the child can obtain the
assistance of a court- appointed attorney through CCAN. The
Guardianship program pays for the representation and protection of
mentally incapacitated individuals and minors whose parents are
deceased. In addition to legal representation, these programs
offer indigent persons access to experts to provide services such
as transcription of court proceedings, expert witness 4 The
Revitalization Act named the new federal agency the Offender
Supervision, Defender and Court Services Agency, but it was
renamed by the District of Columbia Courts and Justice Technical
Corrections Act of 1998, Public Law No. 105- 274, Section 7( c),
112 Stat. 2419, 2426, October 21, 1998. 5 D. C. Criminal Justice
Act of 1974, as amended, D. C. Code Ann. Secs. 11- 2601 through
11- 2608 (1981) (1995 Replacement Volume, 1999 Supp.). 6 Neglect
Representation Equity Act of 1984, as amended, D. C. Code Ann.
Secs. 16- 2304, 16- 2326. 1 (1981) (1997 Replacement Volume). 7 D.
C. Guardianship Protective Proceedings, and Durable Power of
Attorney Act of 1986, as amended, D. C. Code Ann. Secs. 21- 2001
through 21- 2085 (1981) (1997 Replacement Volume). testimony,
foreign and sign language interpretation, and investigations and
genetic testing. Attorneys and expert- service providers who work
on CJA, CCAN and Guardianship cases submit vouchers to DC Courts
detailing time and expenses involved in working on a case.
Following an administrative review and approval by the presiding
judge or hearing commissioner, the voucher is forwarded to DC
Courts, which prepares a list of payments to be made. The list is
electronically submitted to the General Services Administration
(GSA), which prepares and issues checks 8 paid from DC Courts'
annual appropriation. During fiscal year 1998, DC Courts paid
court- appointed attorneys at a rate of $50 per hour and
reimbursed them for authorized expenses. Crime Victims A District
law established the Crime Victims Compensation Program under
Compensation Program DC Courts' jurisdiction before the Congress
passed the Revitalization Act. The District law (1) identifies
fines, fees, and other moneys for DC Courts to deposit into a
Crime Victims Fund and (2) provides that compensation totaling up
to $25,000 can be made from the fund to crime victims for economic
loss. Payments can also be made for shelter, burial costs, or
medical expenses. Objectives, Scope, and Our objectives were to
(1) compare DC Courts' obligations for fiscal years Methodology
1996, 1997, and 1998, (2) determine whether DC Courts had a
spending plan and obligated funds consistent with available
resources in fiscal year 1998, and (3) determine why DC Courts
deferred payments to court- appointed attorneys in fiscal year
1998 and whether payments that were made were processed in
accordance with policies and procedures. To accomplish our
objectives, we  obtained and reviewed DC Courts' general ledger
account balances and other financial information for fiscal years
1996, 1997, and 1998;  obtained and analyzed DC Courts' budget
requests, spending plans, and details supporting budget
documentation for fiscal year 1998;  obtained and reviewed
financial information and correspondence between DC Courts, OMB,
the Department of Justice, and the Congress; 8 Prior to March
1998, this processing was done through the District's Financial
Management System (FMS).  obtained and compared court- appointed
attorney payment information under CJA and CCAN for fiscal year
1998 and prior fiscal years; 9  reviewed policies and procedures
for voucher payment and analyzed about 30,000 records in DC
Courts' tracking and payment databases that represent fiscal year
1998 payments through July; and  interviewed the Joint Committee
on Judicial Administration; DC Courts' Executive Officer, Fiscal
Officer, and Legal Counsel; CJA and CCAN program officials;
officials in the Financial Operations Division who process voucher
payments; officials from the Department of Justice, OMB, GSA and
the COSA Trustee; officials from the District of Columbia's
Department of Administrative Services; and court- appointed
attorneys. In order to compare budgeted and obligated amounts, we
gathered financial information and analyzed obligations and
funding resources reported by DC Courts. We used DC Courts'
unaudited financial information, 10 which was compiled from
various manual records and accounting and financial management
systems, and held discussions with DC Courts officials to obtain
additional clarification. We did our work in accordance with
generally accepted government auditing standards between October
1998 and May 1999. We requested comments on a draft of this report
from the Joint Committee on Judicial Administration in the
District of Columbia. The Joint Committee provided us with written
comments that are discussed in the DC Courts Comments and Our
Evaluation section and are reprinted in appendix I. Reported
Obligations DC Courts' records indicated that total obligations in
fiscal years 1996, for Fiscal Years 1996 1997, and 1998 were
$115.4 million, $119 million, and $125. 6 million, respectively.
Fiscal year 1998 obligations reflect our adjustments, as Through
1998 discussed later, and a different scope of activity than the
prior years' obligations. This is primarily due to changes
resulting from the Revitalization Act of 1997. 9 Our work on
court- appointed attorneys focused on those appointed under the
CJA and CCAN programs. The total payments of approximately
$300,000 under the Guardianship program were not included since
the amount was about 1 percent of the total payments to court-
appointed attorneys and not deemed material to our review. 10 On
May 19, 1999, DC Courts awarded a contract to KPMG Peat Marwick,
LLP, to perform the first financial statement audit of its
operations. The audit was for the year ended September 30, 1998,
as required under the Revitalization Act. For example, the adult
probation function was transferred from DC Courts to the District
of Columbia Court Services and Offender Supervision Agency (COSA)
in fiscal year 1998. While DC Courts no longer had operational
responsibility for the adult probation function, it continued for
several months to pay salaries and related costs on behalf of the
COSA Trustee. In March 1998, the Trustee took over the payments
for adult probation and subsequently reimbursed DC Courts $7.8
million for the costs DC Courts paid on the Trustee's behalf.
These costs and the related reimbursements were included in DC
Courts' fiscal year 1998 obligations and available funds. Also as
a result of the Revitalization Act, nonjudicial employees received
federal benefits that increased DC Courts obligations for fiscal
year 1998. DC Courts also assumed responsibility for the judges'
pension costs as part of its fiscal year 1998 appropriation for
court operations and gave its nonjudicial employees a 7- percent
pay raise. DC Courts' Spending Prior to the decision to transfer
the adult probation function to a new Plan and Obligation of
entity, DC Courts had requested $123.5 million to fund its fiscal
year 1998 operations. When DC Courts received $108 million in its
fiscal year 1998 Funds appropriation, it was responsible for
developing a spending plan to ensure that its obligations did not
exceed available resources. However, DC Courts did not develop
such a plan. It obligated funds throughout the year based on its
expectation of receiving additional funds. While DC Courts
received an additional $1.7 million in appropriated funds for the
fiscal year, it did not receive all of the funding it anticipated.
It also received $12.1 million in grants, interest, and
reimbursements, including the $7.8 million reimbursement from the
COSA Trustee, during the fiscal year. Letters between DC Courts
and OMB during fiscal year 1998 reflect DC Courts officials'
expectations of receiving additional resources and OMB's concern
that if DC Courts did not lower its rate of spending, its
obligations would exceed available funds. For example, in an April
1998 letter, OMB advised DC Courts that it was incurring
obligations at a rate that would necessitate a deficiency or
supplemental appropriation. For their part, DC Courts officials
continued to seek additional funds during their discussions with
the COSA Trustee, the Department of Justice, and OMB. By the end
of the fiscal year, DC Courts' records showed that obligations
exceeded available resources by about $350,000 for fiscal year
1998. Specifically, its records showed obligations of almost
$122.2 million and funds received of about $121.8 million.
However, we found that adjustments needed to be made to those
amounts:  DC Courts deferred more than $4. 1 million of court-
appointed attorney payments that were eventually made with fiscal
year 1999 funds but did not record these amounts as fiscal year
1998 obligations. Accordingly, we added this amount to DC Courts'
reported fiscal year 1998 obligations.  DC Courts treated interest
earned primarily from quarterly apportionments of its
appropriation as available budgetary resources for court
operations. However, DC Courts did not have authority to spend
this interest. For this reason, we reduced the amount that DC
Courts reported as available resources for fiscal year 1998 by
$773,000. At our May 18 testimony, we reported that DC Courts'
recorded obligations and available funding for fiscal year 1998 as
adjusted were about $126.3 and $121 million, respectively,
resulting in a potential overobligation of more than $5.2 million,
in violation of the Anti- Deficiency Act. Recently, DC Courts
officials advised us that some obligations in their fiscal year
1998 records needed to be deobligated. DC Courts officials stated
that these included amounts that the District should not have
recorded as obligations, as well as amounts for services that were
no longer anticipated. In May 1999, we evaluated more than
$500,000 of the proposed $1 million in deobligations and
determined that almost $200,000 represented obligations for fiscal
year 1998 that were still valid. For example, in three cases,
these amounts represented contracted services that had been
rendered during fiscal year 1998 for which the contractor had not
yet billed DC Courts. In addition, we identified almost $200,000
of unrecorded fiscal year 1998 obligations. These changes reduced
DC Courts' overobligation for fiscal year 1998 by approximately
$600,000, to about $4.6 million. Adjustments to Fiscal Year We
found that DC Courts needed to increase its reported fiscal year
1998 1998 Obligations and obligations by more than $4.1 million to
account for court- appointed Resources attorney payments that had
been deferred during fiscal year 1998 and not recorded as fiscal
year 1998 obligations. DC Courts eventually made these payments
with fiscal year 1999 funds as authorized by the District of
Columbia Appropriations Act of 1999. However, this did not convert
the deferred payments from fiscal year 1998 obligations to fiscal
year 1999 obligations. We also found that DC Courts needed to
decrease its fiscal year 1998 budgetary resources because it had
treated $773,000 of fiscal year 1998 interest income as an
available budgetary resource for court operations without having
explicit legislative authority to do so. DC Courts earned the
interest primarily as a result of depositing quarterly
apportionments of its appropriation for court operations in
interest bearing accounts. 11 The District of Columbia Home Rule
Act provides that no amount may be obligated or expended by a
District government officer or employee unless the amount has been
approved by an act of Congress and then only according to that
act. Also, the Revitalization Act amended the Home Rule Act to
expressly provide that moneys 12 received by DC Courts be
deposited in the U. S. Treasury or the Crime Victims Fund. 13
These statutory provisions support the general proposition that
when the Congress appropriates funds for DC Courts, it establishes
an authorized program level beyond which DC Courts may not
operate. Accordingly, DC Courts may not augment its appropriation
without specific statutory authority to do so. The Home Rule Act
provisions are clear and comprehensive. The provisions apply to
all amounts and moneys received by DC Courts, and they are
overcome only by the Congress granting the specific authority
needed. We are unaware of any statute that authorizes DC Courts to
retain and spend interest earned on appropriations for court
operations. Further, it undermines the Home Rule Act provisions
and the general proposition they support to infer that when
Congress required the Treasury to quarterly pay apportioned
amounts to DC Courts, the Congress also authorized DC Courts to
retain and spend the interest it earns. Accordingly, DC Courts was
not authorized to retain or use this interest income and should
have remitted it to the U. S. Treasury. Anti- Deficiency Act By
combining the adjustments described above with DC Courts' reported
obligation balances, we determined that DC Courts had
overobligated its budgetary resources by $4.6 million. The Anti-
Deficiency Act prohibits District government officers and federal
officials from making 11 For fiscal years 1998 and 1999, the
District of Columbia Appropriations Acts required the Treasury of
the United States to pay appropriations quarterly to the DC Courts
based on quarterly apportionments approved by OMB. 12 These
generally refer to funds received from nonfederal sources, such as
fines and fees. 13 Section 450 of the Home Rule Act, as amended.
(1) obligations or expenditures in excess of amounts available in
an appropriation or fund unless they are otherwise authorized to
do so by law and (2) an obligation or expenditure in excess of an
apportionment. Apportionments at increments throughout a fiscal
year are intended to prevent obligations and expenditures at a
rate indicating a necessity for a deficiency or supplemental
appropriation. To the extent DC Courts overobligated its budgetary
resources for fiscal year 1998, the overobligations violated the
Anti- Deficiency Act. Anti- Deficiency Act provisions constitute
some of the fundamental financial management requirements for
federal and District government activities subject to the
congressional budget process. 14 The act's purpose is to ensure
that agencies or activities funded by annual appropriations manage
their affairs so as not to exhaust their appropriations before the
end of the fiscal year and require additional funding for their
annual operations. OMB and we have stated that officers or
employees of the federal government subject to the Anti-
Deficiency Act may not incur obligations against anticipated
receipts, including supplemental appropriations requested but not
yet enacted, 15 because such receipts may not be realized. For
example, the Congress may not enact a supplemental appropriation
in the amount requested by an agency. 16 The official having
administrative control of the appropriation is required to
establish regulations to ensure compliance with the Anti-
Deficiency Act and to identify the reasons for any obligation or
expenditure exceeding an apportionment. The Anti- Deficiency Act
requires the head of an agency to report immediately to the
President and the Congress any violation of the act including all
relevant facts and a statement of actions taken. OMB Circular A-
34, Instructions on Budget Execution, provides additional guidance
on information that the agency is to include in its report to the
President. OMB instructs agencies to include the primary reason or
cause for the overobligation, any extenuating circumstances, the
adequacy of the system 14 31 U. S. C. secs. 1341, 1342, 1349-
1351, 1511- 1519 (1994). 15 B-230117- O. M., February 8, 1989, and
OMB Circular No. A- 34, sec. 21.4 (Rev., Nov. 7, 1997). 16 OMB has
made it clear that even in situations where OMB approves an
apportionment request that would indicate the necessity for a
supplemental or deficiency appropriation, it does not authorize
the agency to exceed available resources. While an agency is
required to submit a fully justified request for supplemental
funding accompanying the deficiency apportionment request, OMB's
approval of such an apportionment request does not commit OMB to
recommend that amount to the President or transmit that amount to
Congress. OMB Cir. No. A- 34, sec. 33. 2 (Rev., Nov. 7, 1997).
providing administrative control of funds, any changes necessary
to ensure compliance with the Anti- Deficiency Act, and steps
taken to prevent a recurrence of the same type of violation.
Violations of the Anti- Deficiency Act are generally the result of
agencies incurring obligations of a discretionary nature in excess
of available funding. An overobligation does not violate the Anti-
Deficiency Act if it is, in the language of the act, otherwise
authorized by law. However, no law explicitly authorized DC Courts
to incur fiscal year 1998 obligations in excess of available
resources. The argument that obligations for attorneys' fees in
excess of available resources are otherwise authorized by law
finds support on the grounds that these obligations are mandatory
in nature. When a law establishes an appropriation or fund for the
sole purpose of paying obligations of a mandatory nature,
obligations in excess of available funding are not generally
viewed as being in violation of the requirements of the Anti-
Deficiency Act. 17 While the obligations for court- appointed
attorneys might reasonably be viewed to be of a mandatory nature,
the critical issue for applying the Anti- Deficiency Act in this
case is whether the overobligations were entirely attributable to
the mandatory obligations for court- appointed attorneys and
consequently authorized by law. This task is complicated by the
fact that court- appointed attorney programs are financed as part
of the general appropriation for court operations. Under these
circumstances, DC Courts should have considered the impact that
the mandatory aspect of the program would have on the
appropriation and managed the residual amounts prudently so that
total obligations did not exceed the total amount appropriated. In
other words, having funds for mandatory activities included in a
lump sum appropriation available for discretionary activities did
not relieve DC Courts of its responsibility to manage
discretionary spending to avoid exceeding available resources and
violating the Anti- Deficiency Act. 18 While DC Courts'
overobligation of an appropriation that funds both mandatory and
discretionary programs may not necessarily constitute an 17 See 65
Comp. Gen. 4 (1985). 18 District officials must supervise and
manage the District's financial transactions to insure that
appropriations are not exceeded and the requirements of the Anti-
Deficiency Act are met. B-262069, August 1, 1995 (the District
would violate the Anti- Deficiency Act if its discretionary
decisions on the Medicaid and Aid to Families with Dependent
Children programs led to overobligating its lump sum appropriation
for Human Support Services). Anti- Deficiency Act violation, it at
least creates a presumption of such a violation. To avoid
violating the Anti- Deficiency Act, DC Courts would have to show
that it took all reasonable steps to manage the account within the
amounts appropriated and that any obligations in excess of
available resources resulted from constitutional or statutory
requirements. 19 To support this argument, the burden is on DC
Courts to provide evidence of unanticipated mandatory spending and
efforts undertaken to cut discretionary spending. The actions of
DC Courts during fiscal year 1998 do not demonstrate that the
overobligation of the fiscal year 1998 account resulted from
obligations that were beyond its control. For example, the $4.1
million in payments for court- appointed attorneys clearly was not
deferred because it was unexpected the fiscal year 1998
obligations for court- appointed attorneys were similar to those
in fiscal year 1997 and the estimates for fiscal year 1998. Also,
DC Courts granted a discretionary pay raise 20 that took effect
after the fiscal year 1998 appropriation was enacted into law even
though the appropriation was more than $15 million less than the
amount DC Courts initially requested. Finally, DC Courts did not
base its spending during most of fiscal year 1998 on the
appropriation it received. DC Courts officials have stated that
they did not violate the Anti- Deficiency Act because a provision
in the fiscal year 1999 appropriation act authorized DC Courts to
make court- appointed attorney payments that had been deferred
from fiscal year 1998. The DC Courts' view is that this provision
authorized the deferral of these payments in fiscal year 1998 and
allowed DC Courts to use fiscal year 1999 funds to liquidate these
obligations, all without violating the Anti- Deficiency Act as
long as DC Courts paid all fiscal year 1998 overobligations in
accordance with the fiscal year 1999 appropriation act. We
disagree with this view. The provision in the fiscal year 1999
appropriation act merely authorizes DC Courts to use fiscal year
1999 funds to pay obligations incurred in fiscal year 1998 and
prior years for court- appointed attorneys. The fiscal year 1999
appropriation act had not been enacted when DC Courts deferred
payments to court- appointed 19 B-262069, August 1, 1995. 20 On
November 13, 1997, the Joint Committee on Judicial Administration
approved comparability of the DC Courts compensation schedule with
the federal court's schedule for nonjudicial employees, to be
achieved over a 2 fiscal- year period, provided adequate funding
was appropriated. The first salary adjustment of 7 percent became
effective December 7, 1997, at a reported cost of almost $2.8
million for fiscal year 1998. attorneys and, according to its
records, overobligated fiscal year 1998 appropriations. The
Congress has long recognized that the timing of payments for
court- appointed attorneys is not predictable and that claims
attributable to a fiscal year may be submitted or approved after
the end of the fiscal year when funds are no longer available. The
provision in the fiscal year 1999 appropriation act addresses this
problem by making fiscal year 1999 funds available for such
payments without regard to when the obligations were incurred. It
does not, as DC Courts suggested to us, authorize DC Courts to
defer paying obligations already identified and ready for payment.
Further, if such a position were to prevail, it would undermine
congressional control of DC Courts' appropriation. DC Courts has
identified no limitations as a matter of law to its position that
the provision is available whenever DC Courts' costs exceed
resources, as long as only costs for court- appointed attorneys
are deferred. This position, if accepted, would allow DC Courts to
respond to dissatisfaction with its appropriation by deferring
court- appointed attorney payments at any time or in any amount
throughout a fiscal year. This could lead to spending for court
operations in excess of what the Congress intended and shift
significant costs for court- appointed attorneys to the next
fiscal year, all without violating the Anti- Deficiency Act. The
language and purpose of the provision in the fiscal year 1999
appropriation act and the Anti- Deficiency Act support no such
interpretation. To ensure that in the future appropriated funds
intended for court- appointed attorneys are not used for other
purposes, the Congress could make a separate appropriation to DC
Courts for payments to court- appointed attorneys. This
appropriation could be similar to that provided to federal courts
each year to fund payments to court- appointed attorneys, in which
funds remain available until expended. Payments to Throughout
fiscal year 1998, it was clear that unless DC Courts modified its
Court- Appointed spending or received additional funds, it was
facing a shortfall. By the third quarter, when DC Courts had not
received the additional funds it Attorneys anticipated, there were
limited options available for addressing the projected shortfall.
DC Courts officials considered furloughing employees and closing
the courts for a period of time during the summer, as well as
deferring court- appointed attorney and expert service provider
payments. In May 1998, OMB officials advised DC Courts to reduce
nonpersonnel costs instead of furloughing employees or closing the
courts to avoid an Anti- Deficiency Act violation. On July 24,
1998, DC Courts began deferring payments for court- appointed
attorneys for the remainder of the fiscal year, and it eventually
used fiscal year 1999 appropriations to pay most of those amounts.
As part of its budget request, DC Courts had estimated $31.6
million for payments to court- appointed attorneys in fiscal year
1998, an amount that was similar to that in the previous year. As
of July 1998, DC Courts had expended $25.8 million on court-
appointed attorney payments. Voucher Processing We found that DC
Courts processed voucher payments for court- appointed Procedures
attorneys in accordance with its policies and procedures. However,
these procedures did not address certain matters that were
important to proper disposition of voucher claims, including  time
frames for making such payments,  procedures for maintaining data
on vouchers reported as missing, and  procedures for notifying
attorneys and expert- service providers when voucher amounts
claimed were reduced. Time Frames for Voucher For fiscal year
1998, DC Courts was not subject to the federal Prompt Payments
Payment Act or the District Quick Payment Act. However, the
District's fiscal year 1999 appropriation 21 subjected DC Courts
to the requirements of the federal Prompt Payment Act. Under the
act, an entity that fails to pay promptly for goods and services
accepted as satisfactory may be required to pay interest on
amounts owed. For fiscal year 1998, we analyzed payment timing
from two different perspectives. First, we looked at the number of
days from the vouchers first being submitted by the attorney or
expert provider to the payment being made. Second, we looked at
the number of days from the presiding judge or hearing
commissioner approving the voucher for payment to the payment
being made. Our analysis of DC Superior Courts' fiscal year 1998
21 Public Law No. 105- 277, sec. 162, 112 Stat. 2681- 148 (Oct.
21, 1998). paid voucher data 22 through July 1998 showed that 48
percent of these vouchers were paid within 30 days of being
submitted. Ninety- four percent of the vouchers for court-
appointed attorneys and expert service providers were paid within
30 days of the presiding judge's or hearing commissioner's
approval. We also reviewed DC Courts' implementation of the Prompt
Payment Act in fiscal year 1999 as it applies to paying court-
appointed attorneys. The purpose of the act is to encourage
agencies to pay bills in a timely manner. If an agency fails to
pay a bill by the required payment date, interest begins to
accrue. Except for situations not relevant here, the required
payment date under the act is 30 days after receipt of a proper
invoice. 23 The Prompt Payment Act defines a proper invoice as one
that contains or is accompanied by substantiating documentation
required by regulation or contract that is necessary to permit the
agency to approve the bill. 24 On December 10, 1998, the Chief
Judge of the Superior Court issued a memorandum to all judges and
hearing commissioners stating that with regard to vouchers for CJA
and CCAN payments, it had been determined that the date DC Courts
receives a proper invoice is the date the authorizing judge or
hearing commissioner approves the voucher. The Superior Court
Trial Lawyers Association has raised concerns over this
determination. We share their concern because if a proper invoice
is received only when it is approved, DC Courts could avoid
incurring interest on vouchers simply because the judge or hearing
commissioner has not reviewed them. We understand that this matter
is currently under discussion between DC Courts and the Superior
Court Trial Lawyers Association. As of June 1999, DC Courts did
not have a mechanism for tracking vouchers from acceptance to due
date to ensure that they were processed and paid in time and to
avoid interest penalties. Further, the absence of policies or
procedures for retaining data on the number of vouchers 22 To
perform our analysis on the timeliness of voucher processing, we
used data DC Courts merged from databases in its voucher tracking
and voucher payment systems. Court of Appeal cases and vouchers
for court transcribers are not tracked in the voucher tracking
system. Therefore, they are not a part of this analysis. We
excluded some records because of missing or erroneous data in data
fields. DC Courts was unable to explain completely the reasons for
the missing or erroneous data. 23 31 U. S. C. 3902 (b), 3903 (a)
(1) (B) (1994). 24 31 U. S. C. 3901 (a) (3) (1994). reported as
missing or the disposition of such vouchers created additional
concern that a significant number of vouchers would not be paid
until after the due date. Lost or Missing Vouchers Prior to and
during our review, court- appointed attorneys claimed that filed
vouchers were sometimes lost and had to be refiled. The DC Courts
accounting manager responsible for voucher processing and payment
estimated that out of over 4,000 vouchers processed each month,
about 50 vouchers were reported as missing. However, the
accounting manager did not have any specific information. The
underlying causes of this problem could not be explained. We noted
that procedures in effect presented opportunities for vouchers to
be misplaced or lost at two different stages during voucher
processing. DC Courts date- stamps each voucher when it is
received but does not maintain a log of these submissions.
Further, DC Courts does not input voucher data into its tracking
system until the voucher is audited for accuracy, a process that,
according to the accounting manager, takes about 8 working days.
Without logging in all vouchers upon receipt or immediately
entering voucher data into the tracking system, DC Courts cannot
ensure complete accountability for all vouchers. This increases
the risk that vouchers lost or misplaced at this stage will not be
recovered. After a voucher is audited for accuracy, it is
forwarded to the presiding judge or hearing commissioner for
approval. Although DC Courts' voucher tracking system identifies
the date of specific events, vouchers are hand- delivered to and
from the judges' chambers, presenting additional opportunities for
vouchers to be misplaced or lost. Reduction of Voucher During the
final review of vouchers, the judge or hearing commissioner has
Amounts the authority to reduce the amount of the voucher if he or
she determines that some of the attorney's or provider's hours or
expenses should be disallowed. DC Courts did not have procedures
covering how judges or hearing commissioners were to document such
decisions to the attorney or provider. However, DC Courts
officials stated that this information was available to attorneys
who requested it. Our analysis of fiscal year 1998 paid voucher
data showed that judges or hearing commissioners reduced voucher
amounts in 9 percent of the cases, more than half of which
involved reductions of $100 or less. Crime Victims During our
review, we identified a matter that, while not affecting DC
Compensation Courts' use of its fiscal year 1998 appropriation for
court operations, needs to be addressed to provide DC Courts the
requisite authority to make Program payments out of its Crime
Victims Fund. A District law established the Crime Victims
Compensation Program under DC Courts jurisdiction prior to the
enactment of the Revitalization Act. 25 The District law provides
that the fund may be credited with (1) appropriations made to it,
(2) fines assessed on persons convicted of serious traffic or
misdemeanor offenses, or persons convicted or pleading guilty or
no contest to felony offenses, (3) amounts recovered by the
District from offenders or third parties by subrogation to the
victim's rights as a result of payments of claims to victims, (4)
repayments of overpayments or false claims payments from
claimants, and (5) amounts received from any source, including
grants from the federal government, for the purpose of the fund.
The District law provides that compensation totaling up to $25,000
from the fund can be made to crime victims for economic loss.
Payments can also be made for shelter, burial costs, or medical
expenses. DC Courts' records indicated that about $1.5 million in
such payments plus almost $300,000 of administrative cost payments
were made during fiscal year 1998 and that the balance of the fund
at September 30, 1998, was about $6.8 million. While the
Revitalization Act amendment to the Home Rule Act supports the
authority of DC Courts to deposit the fines, fees, and other money
identified in the District law to the Crime Victims Fund, the
Revitalization Act makes no mention of spending amounts deposited
to the fund. Further, nothing in the language of the District's
fiscal years 1998 or 1999 appropriation acts appropriates amounts
from the Crime Victims Fund. Finally, we have not identified any
other federal law authorizing payments from the fund. The District
of Columbia Home Rule Act 26 states that no officer or employee of
the District of Columbia government may obligate or spend an
amount unless it is approved by an act of the Congress and then
only according to that act. Accordingly, we conclude that DC
Courts did not have the requisite legislative authority to make
payments from the fund. 25 The Victims of Violent Crime
Compensation Act of 1996, D. C. Law 11- 243, 44 DCR 1142, 2601
(April 9, 1997), D. C. Code Ann. Secs. 3- 421 through 3- 438 (1998
Supp.). 26 Section 446 of the Home Rule Act, as amended.
Conclusions DC Courts experienced difficulties in planning and
budgeting in fiscal year 1998, its first year of operations with
direct federal funding. In a transition year in which DC Courts
underwent changes to its functions and responsibilities, DC
Courts' management did not properly execute its responsibility to
operate within available resources. Appropriate recognition of
obligations incurred and resources available and compliance with
federal laws and guidelines addressing its financial management
are crucial to improving DC Courts' performance in this area. In
addition, DC Courts did not have complete information in its
voucher tracking system to ensure that all submitted vouchers were
promptly tracked, processed, and paid. Revised procedures in this
area and improvements to its voucher tracking system could improve
DC Courts' timeliness in making voucher payments and reduce the
incidence of missing vouchers. Improvement in these areas has
become critical in fiscal year 1999, now that DC Courts is subject
to the federal Prompt Payment Act and may be required to pay
interest on payments made more than 30 days after receipt of a
proper invoice. Recommendations to If the Congress continues to
require the U. S.Treasury to pay quarterly the Congress
apportionments to DC Courts, we recommend that the Congress
consider authorizing DC Courts to retain the interest earned and
requiring DC Courts to include estimated interest in its annual
budget request. This would alleviate the need for DC Courts and U.
S.Treasury to process interest repayments to U. S. Treasury. If
the Congress wishes to ensure that appropriated funds intended for
payment of court- appointed attorneys are not used for other
purposes, we recommend that the Congress consider making a
separate appropriation to DC Courts for payments to court-
appointed attorneys. Recommendations to We recommend that the
Joint Committee on Judicial Administration DC Courts  perform all
necessary investigation and reporting under the Anti- Deficiency
Act related to DC Courts' overobligation of its fiscal year 1998
appropriation,  transfer to the U. S. Treasury all interest earned
on appropriated funds or seek legislative relief from repaying the
interest that was improperly retained,  issue guidance providing
that interest is to be paid when vouchers containing or
accompanied by all required substantiating documentation are not
paid by the required payment date,  establish procedures that
require all vouchers to be logged and tracked immediately upon
receipt, and  seek legislation authorizing DC Courts to use the
Crime Victims Fund to pay eligible claims under the Crime Victims
Compensation Program. DC Courts' Comments In commenting on a draft
of the report, DC Courts disagreed with our and Our Evaluation
findings concerning  its violation of the Anti- Deficiency Act in
fiscal year 1998 and  its use of interest earned on its
appropriation as a resource to fund court operations. In addition,
DC Courts disagreed with our conclusions and the need for
implementing three of our recommendations. They agreed to seek
clarifying legislation to address two of our other
recommendations. DC Courts did provide technical comments which we
have incorporated as appropriate but have not reproduced in our
report. In several meetings with us and in a written statement
submitted to us in May 1999, DC Courts stated that it disagreed
with the legal basis for our conclusion that DC Courts violated
the Anti- Deficiency Act by overobligating its budgetary resources
by approximately $4.6 million in fiscal year 1998. 27 We
considered DC Courts' position in preparing the draft of this
report. In summarizing its position in its comments on our draft,
DC Courts stated two principal reasons why its actions were in
conformity with the Anti- Deficiency Act. First, DC Courts
asserted that because it has the authority to defer attorney
payments under its appropriation act, its actions constitute an
exception to the Anti- Deficiency Act. As discussed in detail in
this report, we disagreed with DC Courts' position. We stated that
the appropriation act provides authority to use current funds to
pay prior year obligations and not the 27 In our testimony on May
18, 1999, we reported that the amount of the potential
overobligation was $5. 2 million. Subsequent to our testimony, DC
Courts provided us with proposed deobligations for fiscal year
1998. We reviewed the proposed deobligations in May 1999 and, as a
result, revised the amount of DC Courts' overobligation for fiscal
year 1998 to about $4.6 million. authority to decide to defer
paying obligations already identified and ready for payment. The
Congress' granting of this authority in the fiscal year 1999
appropriation act (and prior years' acts) addressed the difficulty
of attorney claims being submitted and approved in one fiscal year
for services rendered in prior fiscal years and, therefore, being
obligations chargeable to the prior fiscal years. This authority
in the appropriation act is significant because without it, the
fiscal year 1999 funds would not have been available to pay prior
year obligations. DC Courts' comments do not address this basic
tenet of appropriations law but rather commingle the separate
issues of whether DC Courts may (1) overobligate its fiscal year
1998 appropriation to the extent of its attorney payments and (2)
use its fiscal year 1999 appropriation to pay claims attributable
to prior years. Furthermore, we observed that DC Courts' position
establishes no limits as a matter of law and would undermine
congressional control. DC Courts characterizes the appropriation
as providing authority to defer attorney payments from one year to
the next only when confronted with extraordinary circumstances.
However, it offers no statutory basis for limiting the asserted
authority only to extraordinary circumstances. As discussed in our
report, DC Courts is authorized to obligate funds for court-
appointed attorneys in excess of available resources without
violating the Anti- Deficiency Act if overobligations are solely
attributable to mandatory spending as evidenced by (1)
unanticipated spending for attorneys and (2) reductions in
discretionary spending designed to keep total obligations within
total resources. This authority is very different than the
authority to defer attorney payments from one year to the next and
spend the saved attorney payments on court operations that DC
Courts attempts to read into the appropriation act. Second, DC
Courts asserts that the Anti- Deficiency Act allows for a
deficiency or supplemental request for appropriations where (1)
the enactment of new laws after budget requests are submitted to
the Congress results in increased costs or (2) the government's
continuation of essential functions for the safety of human life
or the protection of property is required. DC Courts refers to 31
U. S. C. 1515 (b)( 1)( A) and (B), a provision of the Anti-
Deficiency Act. However, DC Courts' reliance on this provision is
misplaced. Section 1515 is not an exception to the Anti-
Deficiency Act's basic prohibition of obligating or spending in
excess of or in advance of an appropriation. Rather, section 1515
is a statutory exception only to the general apportionment rule in
31 U. S. C. 1512, which prohibits apportioning funds at a rate
indicating a deficiency or a need for a supplemental
appropriation. This distinction is discussed in II GAO, Principles
of Federal Appropriations Law (GAO/ OGC 92- 13, December 1992, pp.
6- 80 through 6- 83). Further, OMB Circular A- 34, sec. 33.2 (Rev.
Nov. 7, 1997) makes clear that an apportionment indicating a
deficiency or a need for supplemental appropriation does not
guarantee the agency that OMB, the President, or the Congress will
support the agency's request for supplemental funding. Even if DC
Courts had met the conditions in section 1515( b) and received an
apportionment indicating a need for supplemental funding, section
1515 provides no legal basis for DC Courts to obligate funds in
excess of the amount appropriated. 28 One of the themes running
through DC Courts' comments is that DC Courts received inadequate
funding and had limited options available for spending reductions.
DC Courts asserts that our report needs more information on this
matter because such information would make the report more
complete and accurate and lead to different legal conclusions. In
general, DC Courts' comments about the Revitalization Act, as well
as its dealings with the Congress, OMB, and other executive branch
entities over the funding it believes it should have received for
fiscal year 1998, may be among the factors DC Courts could offer
as extenuating circumstances that resulted in its violation of the
Anti- Deficiency Act. However, none of the additional information
DC Courts has offered affects our legal analysis of DC Courts'
Anti- Deficiency Act violation. In this regard, DC Courts
commented that our report overstates the very limited relevance of
a modest pay increase. However, we found that the discretionary
pay raise was almost $3 million, or about 65 percent of DC Courts'
$4. 6 million overobligation of its resources in violation of the
Anti- Deficiency Act. 29 DC Courts also disagreed with our
conclusion that it lacked the authority to retain and spend
interest earned on the federal funds appropriated for 28 DC
Courts' reference to 31 U. S. C. 1515 is also misplaced for
factual reasons. After passage of the Revitalization Act and
before enactment of the District's fiscal year 1998 appropriation
act, the President submitted a revised budget request to the
Congress that reflected the Revitalization Act's changes.
Accordingly, a request for supplemental funding under section
1515( b)( 1)( A) could not be based on the Congress having passed
a law affecting DC Courts after having received a budget request
for DC Courts. Further, while DC Courts may have had funding
difficulties in fiscal year 1998, those difficulties did not
result, as section 1515( b)( 1)( B) requires, from an emergency.
Finally, when OMB's last apportionment for the year to DC Courts
was made in April 1998, OMB warned DC Courts that it needed to
reduce its rate of spending to avoid violating the Anti-
Deficiency Act. 29 Our central point regarding the pay raise is
that it represents discretionary spending that could have been
postponed or eliminated. This is supported by the effective date
of the pay raise, which was subject to sufficient funds being
available, and which was awarded after DC Courts knew that the
Congress had authorized an appropriation for fiscal year 1998 that
was over $15 million less than the amount requested. court
operations. As discussed in the report, our conclusion is based on
the language of the Home Rule Act and the Revitalization Act
consistent with basic principles of federal appropriations law. In
contrast, DC Courts asserts that it may infer the authority to
retain and spend the interest because the Congress remained silent
on the matter of interest even though the Congress required the
Department of the Treasury to make quarterly payments to DC
Courts, and it was inevitable that DC Courts would deposit the
payments in an interest- bearing account. DC Courts' view is
contrary to the fundamental principle of appropriation law that
prohibits an agency from augmenting its appropriation from other
sources unless specifically authorized by law. Because nothing in
the language of any act, or even legislative history, indicates
that the Congress wanted DC Courts to retain and spend interest
earned on fiscal year 1998 appropriations, we find no basis to
impute to the Congress a grant of authority that overrides
limitations found in law and grounded in principles of
appropriations law. Accordingly, as discussed in this report, the
interest should have been deposited to Treasury, as required by
section 450 of the Home Rule Act as amended by the Revitalization
Act. During our review, we requested documentation from DC Courts
regarding its preparation and execution of a spending plan tied to
its fiscal year 1998 appropriation. We found that when DC Courts
received an appropriation that was over $15 million less than it
requested, it did not take immediate steps to cut planned spending
to reflect the actual level of funding but rather proceeded with a
discretionary pay raise and continued to spend at a rate that
would necessitate a deficiency or a supplemental appropriation.
Other than not filling vacant positions (which, according to DC
Courts, cut almost $3 million in operational costs), DC Courts did
not propose the necessary spending cuts until the third quarter of
the fiscal year and only after requests for supplemental funding
did not materialize. At that point, as DC Courts officials pointed
out, their options to make spending cuts were limited. DC Courts
took exception to our discussion of the Prompt Payment Act in
relation to its processing of payment vouchers because, as we
noted in our report, DC Courts was not subject to the Prompt
Payment Act until fiscal year 1999. We found it useful to refer to
the Prompt Payment Act because in the absence of any legal
requirements to make timely payments, it provided a recognized
standard and DC Courts payments were made subject to the Prompt
Payment Act beginning in fiscal year 1999. DC Courts also stated
that our report did not accurately characterize the nature of
communications between DC Courts and both OMB and Members of
Congress. However, this report and our previously issued testimony
and chronology of events 30 fairly reflect all the relevant and
critical documentation DC Courts provided to us. DC Courts did not
include new or additional information in its comments that affects
our legal positions and conclusions. Subsequent Following the
receipt of comments from DC Courts on a draft of this report
Congressional Actions and discussion of our recommendations with
the House and Senate staff of the oversight and appropriations
committees, the Conference Committee reported H. R. 2587, the
District of Columbia appropriations bill for fiscal year 2000, on
August 5, 1999. 31 If enacted as reported by the Conference
Committee, H. R. 2587 would address four of our recommendations as
follows:  It addresses the recommendation that the Congress
consider authorizing DC Courts to retain interest earnings and
reflect estimated interest in its budget requests if the Congress
continues to require the U. S. Treasury to pay quarterly
apportionments to DC Courts. The proposed language eliminates the
requirement that the U. S. Treasury pay the apportionments
quarterly to DC Courts and requires all amounts to be quarterly
apportioned by OMB, obligated, and expended in the same manner as
funds appropriated to other federal agencies. 32 Thus, federal
funds will remain with the Treasury until needed for authorized DC
Courts activities, and disbursements for these authorized
activities will be made directly from the Treasury. This change
would eliminate the need for an interest- bearing bank account to
handle the federal payment to DC Courts.  It addresses the
recommendation that the Congress consider making a separate
appropriation to DC Courts for payments to court- appointed
attorneys. The proposed language establishes a separate federal
payment for Defender Services in the District of Columbia Courts,
specifically for making payments to court- appointed attorneys
under the 30 District of Columbia Courts: Chronology of Events
Associated with DC Courts' Financial- Related Issues for Fiscal
Year 1998 (GAO/AIMD-99-204R, June 7, 1999). 31 H. R. Rep. 106-
299. 32 H. R. Rep. 106- 299, at 3. CJA, CCAN, and Guardianship
programs, and requires that payroll and financial services be
provided by GSA, which must submit monthly reports to the
President and specific committees. 33  It addresses the
recommendation that DC Courts pay the Treasury the interest
already earned on prior federal payments. H. R. 2587 would
authorize DC Courts to use up to $1.2 million of interest earned
on the fiscal year 1999 federal payment to make certain payments
to court- appointed attorneys for indigents. 34 Our recommendation
that DC Courts pay the Treasury interest earned on the fiscal year
1998 federal payment remains unaffected.  It addresses the
recommendation that DC Courts request legislative authority to
spend money in the Crime Victims Fund. Section 160( b)( 1) of H.
R. 2587 would authorize DC Courts to spend moneys properly
deposited in the Crime Victims Fund for purposes authorized by the
Crime Victims Act, as amended. In addition, section 160( e) of H.
R. 2587 would ratify any payments made from the Crime Victims Fund
on or after April 9, 1997, to the extent the amounts are
authorized under the Crime Victims Compensation Act of 1996, as
amended. We are sending copies of this letter to Senator Kay
Bailey Hutchinson, Chairwoman, Subcommittee on the District of
Columbia, Senate Committee on Appropriations; Senator Richard
Durbin, Ranking Minority Member, Subcommittee on the District of
Columbia, Senate Committee on Appropriations, and Subcommittee on
Oversight of Government Management, Restructuring and the District
of Columbia, Senate Committee on Governmental Affairs; Senator
George Voinovich, Chairman, Subcommittee on Oversight of
Government Management, Restructuring and the District of Columbia,
Senate Committee on Governmental Affairs; and Representative
Eleanor Holmes Norton, Ranking Minority Member, Subcommittee on
the District of Columbia, House Committee on Government Reform. We
are also sending copies to the Joint Committee on Judicial
Administration, DC Courts, through the Honorable Annice Wagner,
Chair; the Honorable Jacob J. Lew, Director, Office of Management
and Budget; and Grace Mastelli, Deputy Assistant Attorney General,
Department of Justice. Copies will be made available to others
upon request. 33 H. R. Rep. 106- 299 at 3- 4. 34 H. R. Rep. 106-
299 at 3- 4. If you have any questions, please contact me or
Steven Haughton at (202) 512- 4476. Key contributors to this
assignment were Marcia Washington, Lou Fernheimer, Jeffrey
Jacobson, and Richard Cambosos. Gloria L. Jarmon Director, Health,
Education, & Human Services Accounting and Financial Management
Issues Comments From the District of Columbia Appendi I x Courts
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