BNUMBER:  B-247563.4
DATE:  December 11, 1996
TITLE:  Expenditures by the Department of Veterans Affairs
Medical Center, Oklahoma City, Oklahoma (II)

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Matter of:Expenditures by the Department of Veterans Affairs Medical 
Center, Oklahoma City, Oklahoma (II)                                                         
File:     B-247563.4

Date:     December 11, 1996
______________________________________________________________________
_____
DIGEST

1.  The Department of Veterans Affairs was not authorized to use its 
medical care  appropriation for an employee breakfast since the event 
was not an awards ceremony under the Government Employees Incentive 
Awards Act, 
5 U.S.C.  sec.  4501 et seq.

2.  The Department of Veterans Affairs was not authorized to use its 
medical care  appropriation to pay for refreshments at employee 
meetings.  Agencies generally may not furnish meals or refreshments to 
employees within their official duty stations and the record contains 
no evidence that the expenses at issue fell within the exceptions 
contained in 5 U.S.C.  sec.  4109 and 4110.

3.  The Department of Veterans Affairs was not authorized to use its 
appropriation for medical care to purchase Christmas cards and stamps 
since the cost of holiday greeting cards is a personal expense of the 
officer who authorizes their use.

4.  The Department of Veterans Affairs was not authorized to use its 
medical care appropriation to pay traveling employees per diem in 
excess of the amount authorized by governing regulations since the 
record contains no evidence that the accommodations for which the 
excess payments were made were necessary for the accomplishment of the 
agency's mission.

5.  The Department of Veterans Affairs was authorized to use its 
medical care appropriation to purchase items for a Combined Federal 
Campaign (CFC) reception.  The CFC is a government sanctioned charity 
for which a limited amount of appropriated funds may be used and 
regulations governing the CFC specifically contemplate the type of 
event for which the purchases at issue were made.
______________________________________________________________________
_____
DECISION

In the aftermath of an investigation by its Office of Inspector 
General (IG), the Department of Veterans Affairs requested an opinion 
on the legality of 72 expenditures made between March 1990 and 
September 1991 by the VA Medical Center in Oklahoma City, Oklahoma 
from VA's medical care appropriation.  VA also requested relief from 
liability for seven Medical Center officials believed to be liable for 
the payments.  Finally, VA requested guidance on the liability of 
various procurement and financial management officials for improper 
payments. 

To facilitate our analysis and discussion, we divided the 72 
expenditures at issue into four broad categories:  recruitment, 
contests, refreshments, and miscellaneous.[1]  In B-247563.3, April 5, 
1996, we addressed the Medical Center's use of appropriated funds for 
15 recruitment- and contest-related expenditures and associated 
requests for relief.  We also provided VA with guidance on financial 
liability generally.  This decision addresses the remaining 57 
expenditures and associated relief requests.

In its request, VA identified 11 expenditures for refreshments for 
"awards ceremonies," as well as one for a floral centerpiece, 
totalling $2,004.90.  VA identified 41 additional expenditures for 
refreshments in connection with various employee meetings totalling 
$2,105.54.  As discussed below, we conclude that one of the 
expenditures for refreshments in connection with "awards ceremonies," 
totalling $287.75, was not authorized.  We also conclude that none of 
the expenditures for employee meetings were authorized.  With respect 
to the four "miscellaneous" expenditures, we conclude that VA was not 
authorized to purchase Christmas cards and stamps or to pay excess per 
diem to employees on travel.  However, VA was authorized to purchase 
the items used in connection with a Combined Federal Campaign (CFC) 
reception.

BACKGROUND

During the period covered by the IG's investigation, the Medical 
Center purchased refreshments for a variety of events during which 
employees were recognized for their contributions to the Medical 
Center's operations.  In addition, the Medical Center purchased 
refreshments for a variety of employee meetings, including new 
employee orientations and conferences with other medical 
professionals.

The IG's report identified several other questionable expenditures.  
The Medical Center purchased Christmas cards (and stamps) for service 
organizations, state veterans' centers, and nearby VA medical centers.  
The Medical Center also paid an amount in excess of per diem to three 
VA employees on travel.  Finally, the Medical Center purchased several 
items for a reception in connection with the annual CFC.

Payments for all of the items were made from VA's appropriations for 
"Veterans Health Service and Research Administration, Medical Care" 
for fiscal years 1990 and 1991.  The appropriations were available, 
among other things, for necessary expenses for the maintenance and 
operation of hospital nursing homes, and domiciliary facilities and 
for furnishing inpatient and outpatient care and treatment to VA 
beneficiaries.  Title I of the Department of Veterans Affairs, Housing 
and Urban Development, and Independent Agencies Appropriations Act, 
1991, 
Pub. L. No. 101-507, 104 Stat. 1351, 1352-1353 (1990); Title I of the 
Department of Veterans Affairs, Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1990, Pub. L. No. 101-144, 
103 Stat. 839, 840-841 (1989).

DISCUSSION  

Under 31 U.S.C.  sec.  1301(a) (1994), appropriated funds are available 
only for authorized purposes.  During the period covered by the IG's 
investigation, VA did not have express authority to make the types of 
expenditures at issue here.  Since the expenditures were not expressly 
authorized, they were permissible only if reasonably necessary or 
incident to the proper execution of an authorized purpose or function 
of the agency.  71 Comp. Gen. 527 (1992).  The application of the 
"necessary expense rule" is, in the first instance, a matter of agency 
discretion.  However, agencies do not have unfettered discretion.  
Therefore, when we review an expenditure to determine whether it falls 
within an authorized purpose or function, we consider whether, under 
the circumstances, the relationship between the authorized function 
and the expenditure is so attenuated as to take it beyond the agency's 
legitimate range of discretion.  B-257488, Nov. 6, 1995.

Refreshments

As a general rule, agencies may not furnish meals or refreshments to 
employees within their official duty stations.  68 Comp. Gen. 604 
(1989).  However, provisions of title 5, United States Code, set forth 
exceptions to the general rule in the case of awards ceremonies and 
meetings incident to approved training or conferences that satisfy 
specified conditions.  
     
Awards ceremonies

The Government Employees Incentive Awards Act (act), 5 U.S.C.  sec.  4501 
et seq., authorizes agencies to make monetary and honorary awards and 
grants agencies broad discretion to determine when such awards are 
appropriate.  See 66 Comp. Gen. 536 (1987).  In addition, the act 
specifically authorizes agencies to "incur necessary expense[s] for 
the honorary recognition" of employees who meet the statutory 
criteria.  5 U.S.C.  sec.  4503.  In light of this authority, agencies may 
conduct awards ceremonies and provide "light refreshments" at 
receptions incident to such ceremonies.  65 Comp. Gen. 738 (1986).  
While we have not specifically defined the phrase "awards ceremony," 
we have emphasized that the purpose of such events is to allow 
agencies to publicly recognize employees' meritorious performance and 
allow other employees to honor and congratulate their colleagues.  Id. 
at 740.  Thus,  the act authorizes expenditures of appropriated funds 
for "light refreshments" to complement agency functions whose 
principal purpose is to recognize employees.  This is not to say that 
the act authorizes such expenditures in connection with an event or 
function designed to achieve other objectives simply because the 
agency distributes awards as part of the event or function.

The submission includes vouchers for 11 functions.  In our view, one 
of the 11  functions cannot be characterized as an awards ceremony.  
During the period covered by the IG's investigation, the Medical 
Center provided a buffet breakfast to a number of Medical Center 
employees.  The submission indicates only that the employees were 
recognized with a special contribution award for their efforts during 
a Medical Center fire.  However, the submission contains no indication 
that employees other than the 45 specifically recognized and the 
Medical Center Director participated in the event.  Nor does the 
record contain any other evidence to suggest that the awards 
recognizing the employees' contributions were otherwise publicized 
within the Medical Center community.  As discussed above, appropriated 
funds may be used to purchase food for receptions incident to award 
ceremonies to facilitate public recognition of award recipients.  
However, this purpose is not served where, as here, the award 
recipients and the donor are the only participants at the event.  
Given these facts, we find that the Medical Center's use of 
appropriated funds for the breakfast refreshments was improper.[2]

The Medical Center also used its appropriation to purchase supplies 
and light refreshments for a picnic and Valentine's Day Dance.  The 
submission indicates that the picnic and dance were both annual 
events.  The submission also indicates that the Medical Center 
recognized employees' accomplishments at both events.  

As discussed above, the act authorizes agencies to purchase 
refreshments for receptions incident to awards ceremonies where the 
agency determines that the refreshments will enhance the awards 
ceremonies and foster public recognition of employees' 
accomplishments.  Expenditures for receptions incident to awards 
ceremonies do not become impermissible merely because such receptions 
coincide with social or recreational events.  However, agencies may 
only use appropriated funds for expenditures that are properly 
allocable to such receptions.  For example, an agency could decide to 
distribute performance awards in connection with an annual agency 
sporting event on the grounds that the event has been well-attended by 
agency staff.  Under these circumstances, the agency would not be 
authorized to use appropriated funds for expenses, such as the rental 
of equipment, that are unrelated to the distribution of awards and 
public recognition of award recipients.  As we noted earlier, where 
the totality of facts and circumstances indicates that the awards are 
purely incidental to an unrelated social or recreational event and 
appear on close scrutiny to be no more than an artifice, there is no 
reception incident to an awards ceremony to which expenses for 
refreshments could be attributed.

The record indicates that the Medical Center used its appropriation to 
purchase light refreshments and supplies, presumably those supplies 
required for employees to enjoy the refreshments, for the picnic and 
Valentine's Day Dance.  The record also includes the Medical Center 
Director's assertion that the distribution of "performance award 
certificates" and "years of service awards" were the highlights of the 
organized activities at the annual picnic and that the Valentine's Day 
Dance was the highlight of the Medical Center's Employee of the 
Month/Year Program.  Based on these facts, we are not prepared to 
conclude that the Medical Center's expenditures in connection with the 
two events were unauthorized.  However, we point out that where, as 
here, an agency combines awards receptions with social events for 
which the use of appropriated funds would be unauthorized, the 
expenditures should be subject to greater scrutiny than expenditures 
made in connection with more traditional awards ceremonies.[3]

In its submission, VA characterized two of the 11 events as "employee 
retirement recognition ceremonies" and stated that "certificates of 
appreciation and 
years-of-service awards" were presented.  As discussed above, VA's 
medical care appropriation was not available to purchase refreshments 
for social functions, including retirement parties.  However, we have 
no reason to conclude that the "awards" presented to the retirees here 
failed to meet the criteria set forth in the Government Employees 
Incentive Awards Act and OPM's implementing regulations.  Although we 
remain skeptical of such multipurpose functions, based on the present 
record, we have no basis to object to VA's expenditures for 
refreshments incident to these "ceremonies."  We also note favorably 
that guidance on the Incentive Awards Program issued in response to 
the IG's report states that refreshments for retirement parties may 
not be purchased with appropriated funds.  MP-4, Part V, Change 206,  sec.  
3A.13.     

The submission also indicates that the Medical Center used 
appropriated funds to purchase a floral centerpiece for a Nursing 
Service awards ceremony.  Since the                          
appropriation at issue was available for awards ceremonies and 
accompanying refreshments, we do not object to VA's use of 
appropriated funds for a floral                             
centerpiece where it determined that such a centerpiece would enhance 
the ceremony.  See B-158831, June 8, 1966 (authorizing an agency to 
use appropriated funds for flowers at a building dedication).
     
Meetings
     
Section 4109 of title 5, United States Code, authorizes payments for 
meals or refreshments for those attending training programs at their 
duty stations where the agency determines that providing meals or 
refreshments is a necessary incident to providing the training and to 
the employees' achieving the objectives of the program.  B-221940, 
Oct. 7, 1987.  For example, in 48 Comp. Gen. 185 (1968), we approved 
an agency's payment of room and board for an employee at his 
headquarters where dinner meetings, and other meetings integral to the 
training, were conducted in the evenings.  Similarly, in B-193955, 
Sept. 14, 1979, we approved  an agency's payment of luncheon expenses 
where attendance at the luncheon was mandatory and the luncheon 
included a training speaker. 

Section 4109 applies only to those events that actually qualify as 
"training" under 
5 U.S.C.  sec.  4101;[4] mere references to meetings or other events as 
"training" are insufficient.  B-249795, May 12, 1993.  The submission 
from VA characterizes a number of the events for which it purchased 
refreshments as "training."  However, the submission does not provide 
us with a basis for concluding that any of the 41 events at issue meet 
the statutory definition.  

Moreover, even if these events are aptly characterized as "training," 
the record provides us with no basis to find that the refreshments 
were a necessary incident of the training or important to the 
achievement of the training objectives.  With respect to several 
expenditures, the submission contains only the conclusory comment that 
the refreshments were necessary to achieve the objectives of the 
events.  Further, with respect to a Regional Medical Education 
Center[5] seminar on equal employment opportunities, an official 
observed that refreshments were served to enhance employees' interest.  
Doubtless, the availability of refreshments will enhance employees' 
interest and enthusiasm for official events.  However, given the types 
of light refreshments served and the absence of any more compelling 
justification, the sole purpose of the refreshments was apparently to 
make the events more pleasant for the attendees.  This is not 
sufficient to authorize the expenditures under 5 U.S.C.  sec.  4109.  See 
B-270199, Aug. 6, 1996 (holding that the Pension Benefit Guaranty 
Corporation was not authorized to provide refreshments to "break the 
ice" and "reward" participants during a training session).

Section 4110 of title 5, United States Code, authorizes payment for 
meals in conjunction with a conference or meeting when a determination 
is made (1) that the meals are incidental to the conference or 
meeting; (2) that attendance is necessary to full participation; (3) 
that the employees are not free to take meals elsewhere without 
missing essential formal discussions, lectures or speeches concerning 
the purpose of the meeting; and (4) that the meal is part of a formal 
conference or meeting that includes not only functions such as 
speeches or business carried on during a meal, but also includes 
substantial functions taking place separate from the meal.  Id. at 2.  
However, section 4110 does not authorize the payment of meal expenses 
in connection with internal business meetings sponsored by government 
agencies.  68 Comp. Gen. 606 (1989) (holding that section 4110 did not 
authorize the Army to pay for employees' meals at quarterly meetings 
of agency supervisors).  Rather, section 4110 applies to formal 
conferences or meetings, typically externally organized or sponsored, 
involving topical matters of general interest to governmental and 
nongovernmental participants.  Id. at 608.

The record suggests that most of the functions for which the Medical 
Center purchased refreshments were routine internal meetings involving 
the operations of the Medical Center and the activities of its 
personnel.[6]  Presumably, such functions were led by Medical Center 
staff and involved no nongovernmental participants.  Moreover, for 
many of these functions, Medical Center officials offered only general 
justifications that had, at most, a transparent resemblance to the 
criteria for purchases of refreshments.  The Director of the Medical 
Center asserted, for example, that refreshments were served during new 
employee orientations as part of the Medical Center's retention 
program.  The Medical Center Director also asserted that randomly 
selected employees were invited to Director's Breakfasts as a form of 
recognition.  Others asserted that the purchases were necessary to 
enhance employee morale.  In short, VA's submission does not provide 
us with a reasonable basis to find that any of these purchases 
satisfied the criteria of section 4110.
  
MISCELLANEOUS EXPENSES

Christmas greetings

During the period covered by the IG's review, the Medical Center used 
its appropriation to purchase Christmas cards and stamps.  According 
to the Medical Center Director, VA sent Christmas cards to service 
organizations, other VA medical centers, state medical facilities, and 
others for the purpose of enhancing the relationship between the 
Medical Center and these organizations.  We have long held that the 
cost of holiday greeting cards is a personal expense of the officer 
who authorizes their use, even where the agency's name rather than the 
officer's name appears on the card.  See, e.g., 64 Comp. Gen. 382 
(1985); 37 Comp. Gen. 360 (1957).  Both cases specifically rejected 
the argument that objectives such as engendering goodwill or ensuring 
the recipients' cooperation justified using appropriated funds for 
this purpose.  Therefore, the cost of Christmas cards and stamps was 
not properly charged to VA's medical care appropriation.

Excess per diem

According to the submission, VA contracted for the lodging of three 
employees who traveled to Oklahoma City for two nights each to 
interview for the chief of staff position at the Medical Center.  
Travel orders included in the submission indicate that the employees 
were to be reimbursed on a per diem basis.[7]  They also indicate that 
the cost of lodging was not to exceed $47 per day and that contract 
lodging would be provided.  At the time the travel at issue here 
occurred, governing regulations authorized reimbursement at a rate of 
$47 per day for lodging and $26 per day for meals and incidental 
expenses.  41 C.F.R. Chap. 301, App. A.  However, according to the 
IG's report and invoices included in the submission, charges for 
lodging paid by the Medical Center were $76.56 per night.     

Appropriated funds are not available to pay per diem or actual 
subsistence expenses in excess of those allowed by statute or 
regulation.  60 Comp. Gen. 181 (1981).  In addition, while agencies 
may generally contract for lodging and meals, limitations on per diem 
or actual expense rates apply to such contracts as they do to 
reimbursements.  Id.  Consistent with this decision, applicable 
regulations provided that when lodging was to be furnished at no cost 
to the employee through use of an agency purchase order, the agency 
was not to authorize or approve a per diem allowance for other 
subsistence expenses that would, when combined with the cost of 
lodging furnished, exceed the applicable maximum per diem rate.  41 
C.F.R.  sec.  301-7.7(a).  Since the allowance paid here exceeded the 
applicable rate, we find that the payment was not authorized.

We have previously recognized that where failure to provide a 
particular accommodation would frustrate an agency's ability to carry 
out its statutory mandate, the agency, applying appropriate 
safeguards, may pay an allowance in excess of the authorized amount.  
B-209375, Dec. 7, 1982.  In B-209375, we found that the United States 
Information Agency was authorized to pay excess per diem to agency 
employees assigned to cover the President since it was essential to 
the successful accomplishment of the Agency's mission that such 
employees stay with the White House Press Corps.  However, we have 
construed this exception  narrowly; conclusory statements that 
particular accommodations are necessary for an agency to carry out its 
mandate do not provide a sufficient basis to invoke the exception to 
the general rule.  See 64 Comp. Gen. 447 (1985).

Here, VA has not asserted that the particular accommodations provided 
were necessary for the employees to participate in interviews for the 
chief of staff position and there is no evidence in the record that 
would provide us with a basis for reaching this conclusion.[8]  In 
addition, the record contains no suggestion that 
the Medical Center intended to compensate the traveling employees for 
actual subsistence expenses in the amounts specified due to special or 
unusual circumstances as authorized by 41 C.F.R.  sec.  301-8.2.  
Accordingly, payment of per diem in excess of the authorized amount 
was impermissible.
     
The IG's report states that the invoice for lodging also reflects the 
expenses of meals for Medical Center staff participating in the 
interviews.  As discussed above, payment for meals for employees 
within their official duty stations is generally not authorized.  In 
addition, we have specifically denied employees' claims for 
subsistence expenses at their duty stations, even where, as here, the 
employees were escorting or participating in meetings with visiting 
officials.  Id.  Finally, it is not clear from the record whether 
these meals were also provided to the employees on official travel.  
If so, the cost of the meals should have been deducted from any 
otherwise authorized per diem.  See 41 C.F.R.  sec.  301-7.4(d), 
301-7.7(b).
     
CFC-related items

The Medical Center held a ceremony to recognize associates and key 
workers for a successful effort in the annual CFC.  Refreshments were 
provided by service chiefs, but the Medical Center used appropriated 
funds to purchase forks, cups, and napkins.  We have long held that 
agencies may cooperate in charity fund-raising campaigns for health 
and welfare activities, even though these activities are not 
specifically provided for by statute.  See, e.g., B-155667, Jan. 21, 
1965.  Further, we have held that agencies may spend reasonable 
amounts of appropriated funds specifically to promote the CFC.  67 
Comp. Gen. 254 (1988).  The question remains whether a reception in 
the aftermath of the annual CFC is the type of event for which an 
agency may use appropriated funds.  CFC regulations promulgated by OPM 
state that events not specifically provided for, such as raffles, 
lotteries, and carnivals, are strictly prohibited.  5 C.F.R.  sec.  
950.602.  However, they also provide that "kick-offs, victory events, 
awards, and other non-fund raising events to build support for the 
CFC" are not prohibited.  Id.  Since the Medical Center's reception 
was an inclusive, "victory" event, we do not object to its use of a 
limited amount of appropriated funds to purchase necessary items.

Liability of VA Officials 

We now address VA's request that we relieve designated officials from 
liability for the improper payments discussed above.  VA has 
identified an imprest funds clerk as the official who made 34 of the 
41 purchases of refreshments for various employee meetings.  The same 
imprest funds clerk purchased the stamps for the Medical Center's 
Christmas cards.  As an imprest funds clerk, this individual issued 
third party drafts for each of the improper purchases.[9]  VA's 
submission indicates that a program analyst made an additional 
purchase of refreshments, also with a third party draft.  However, in 
the absence of a statute or agency regulation to the contrary, agency 
officials other than those designated as accountable officers are not 
financially liable for improper payments of government funds.  
B-247563.3, 
April 5, 1996 (and cases cited therein).  Further, unless otherwise 
designated, issuers of third party drafts are not financially liable 
for improper purchases made with such drafts since government funds 
are not disbursed when third party drafts are issued.  Id. at 9.  
Therefore, we need not consider VA's requests for relief for these 
individuals.

VA also requested relief for three voucher auditors.  One of the 
voucher auditors reviewed the Medical Center's purchase of 
refreshments for a stress management workshop.  Another carried out 
the same function with respect to the purchase of Christmas cards, and 
the third with respect to the payment of per diem in excess of the 
authorized amount.  In each of the three cases, the voucher auditors 
"certified," i.e., reviewed and approved, invoices for payment through 
VA's automated finance center in Austin.  In this regard, their 
activities supported the certification ultimately made by an 
authorized certifying officer at the Austin finance center.  Further, 
several documents included in VA's submission refer to their 
"certifications" or their role as "certifying officers."  However, VA 
advised that these officials had not been designated as certifying 
officers.[10]  We therefore conclude that neither is liable for the 
Medical Center's improper expenditures of appropriated funds.

VA requested relief from liability for seven Medical Center officials 
in connection with 52 of the Medical Center's 72 questionable 
expenditures.[11]  In this decision, we have addressed VA's request 
with respect to 36 of the 41 expenditures for refreshments in 
connection with employee meetings, Christmas cards and stamps, and 
excess per diem.  However, these payments, as well as those for the 
buffet breakfast and refreshments for five of the 41 employee 
meetings, were also approved by an authorized certifying officer.  
Since the circumstances under which the authorized certifying 
officer(s) approved the unauthorized payments discussed in this 
decision were identical to those present in B-247563.3, we grant 
relief under the principles articulated in that decision.

CONCLUSION

The VA Medical Center in Oklahoma City charged a variety of 
unauthorized purchases to VA's medical care appropriation during the 
period covered by the IG's report.  Specifically, an expenditure of 
$287.75 for a buffet breakfast was not authorized.  In addition, 41 
expenditures for refreshments in connection with various employee 
meetings, totalling $2,105.54, were unauthorized.  Further, VA was not 
authorized to use a total of $438.32 to purchase Christmas cards and 
stamps or to pay amounts in excess of per diem to employees on travel.  
However, since none of the officials specifically identified by VA in 
connection with the expenditures were accountable officers, they are 
not liable for these payments.  For the reasons stated in our earlier 
decision involving the Oklahoma City Medical Center, 
B-247563.3, April 5, 1996, relief is granted to the authorized 
certifying officer(s) who approved the payments.

/s/Robert P. Murphy
for Comptroller General 
of the United States

ATTACHMENT                                ATTACHMENT

Refreshments

Awards Ceremonies - 12 expenditures

PO#          Amount      Description

IF0237        287.75     Breakfast for Employee Recognition
IF0306         50.80     Nursing Staff Reception 
IF0330         86.21     Nursing Staff Reception
IF0336        224.00     Nursing Staff Reception
IF0396        500.00     Annual All-Employees Picnic
IF1008         73.98     Employee Retirement Recognition Ceremony
IF1020         16.99     Employee Retirement Recognition Ceremony
I15378         52.65     Nursing Service Award Program 
IF1160        125.00     Employee Recognition
IF1162        500.00     Annual Valentine's Day Dance
IF1199         45.52     Awards Ceremony for Chief of Staff
IF1192         42.00     Awards Ceremony Centerpiece

Total      $2,004.90

Employee Meetings - 41 expenditures

PO#          Amount      Description

IF12244       207.00     
              125.00     Public Service Recognition
               52.00     Employee Breakfast
               30.00     Director's Breakfast
IF1286         88.22     Service Officers' Conference
IF1259         40.00     Employee Breakfast
IF1274         81.47     RMEC Seminar for EEO
IF0263         34.10     Doughnuts for Employee Breakfast
IF1048         19.10     New Employee Orientation
IF0327        110.14     RMEC Workshop
IF0259         14.33     Refreshments
IF0369         20.12     New Employee Orientation
IF1119         22.68     New Employee Orientation
IF1078         16.28     New Employee Orientation
IF1131         13.32     New Employee Orientation
IF1032         50.00     Service Officers' Meeting
IF0221         39.29     Cake for National Laboratory Week

IF1203         50.88     Refreshments for Audiology Service
IF1122         40.00     Director's Breakfast
IF0386        172.70     Supervisors Training
IF1061         20.04     New Employee Orientation
IF0297         29.15     New Employee Orientation
IF1104        148.00     RMEC Training
IF0370         19.22     New Employee Orientation
IF0371         31.40     New Employee Orientation
IF0325         24.41     New Employee Orientation
IF0262         60.00     In-service Meeting
IF1120         40.00     Hospital Residents Meeting
IF1159         40.00     Employee Recognition
IF0269         13.40     EEO Membership Drive
IF1012         20.12     New Employee Orientation
IF0387         18.77     New Employee Orientation
IF1182         44.00     New Employee Orientation
IF0326         25.31     New Employee Orientation

1. We have placed the Medical Center's expenditures for the following 
items in the "miscellaneous" category:  Christmas cards, stamps, 
excess per diem, and items for a Combined Federal Campaign reception.

2. Although VA did not assert that the food itself was an award, we 
note that under then-governing regulations of the Office of Personnel 
Management (OPM), agencies were not authorized to award food under the 
Government Employees Incentive Awards Act.  See 5 C.F.R.  sec.  451.103 
(1993) (defining the term "non-monetary award" as "a medal, 
certificate, plaque, citation, badge or other similar item that has an 
award or honor connotation" (emphasis added).  See also Federal 
Personnel Manual, ch. 451,  sec.  7-3 (Inst. 265, Aug. 14, 1981).

3. According to the IG's report, an OPM official advised that picnics 
and dances are "traditionally not considered [awards ceremonies]."  We 
note that the then-governing guidance from OPM merely stated that it 
would be appropriate for agencies to provide light refreshments at 
nominal cost at awards receptions.  See Federal Personnel Manual at 
451-5.  There is currently no guidance for the agencies in this area.

4. Under section 4101, "training" means the process of providing for 
and making available to an employee, and placing or enrolling the 
employee in, a planned, prepared, and coordinated program, course, 
curriculum, subject, system, or routine of instruction or education, 
in scientific, professional, technical, mechanical, trade, clerical, 
fiscal, administrative, or other fields which will improve individual 
and organizational performance and assist in achieving the agency's 
mission and performance goals.

5. Sections 7471-7474 of title 38, United States Code, require VA to 
establish Regional Medical Education Centers at selected medical 
facilities to train health personnel.

6. For example, 15 of the 41 expenditures were for refreshments for 
"new employee orientation."  

7. Under 5 U.S.C.  sec.  5702 and the Federal Travel Regulation, 41 C.F.R. 
Parts 301-7 and 8, maximum subsistence expense reimbursements are 
established for federal employee travel.  Typically, employees 
traveling on official business are to be reimbursed on a per diem 
basis consistent with administratively prescribed maximum per diem 
rates.  See 41 C.F.R.  sec.  301-8.2(a) (1990).  However, travel on an 
actual subsistence basis may be authorized for travel assignments when 
the maximum per diem rate is insufficient due to special or unusual 
circumstances.  Id.   

8. According to the IG's Report, Medical Center officials cited 
B-219147, Feb. 11, 1986, as justification for their decision not to 
seek repayment from the employees to whom the Medical Center made 
excess payments.  B-219147 provides no such justification.  B-219147 
merely clarified the narrow scope of B-209375 and authorized the Army 
to treat lodging costs in excess of authorized amounts as an 
administrative expense due to its reliance on GSA and Joint Travel 
Regulations that had misinterpreted our decision.  More importantly, 
B-219147 clearly held that an agency's contract for accommodations for 
employees traveling on official business must be included in the 
employee's per diem or actual expense allowance.

9. In B-247563.3, April 5, 1996, we described the Medical Center's 
extensive use of third party drafts.  In short, the Medical Center 
obtained third party drafts from a contractor and used them for the 
same types of purchases that they could make with imprest funds.  The 
contractors processed the drafts as they were presented for payment by 
vendors of goods or services and subsequently provided VA with a list 
of the cleared instruments, i.e., those paid by the contractor's 
financial institution.  VA then reimbursed the contractor for the 
payments made.  

10. Designation as a certifying officer requires a written 
authorization from the head of the agency.  See 31 U.S.C.  sec.  3325; 
Treas. Financial Manual, vol. I,  sec.  2040.30d (T.L. No. 496).  

11. VA's submission came in two parts.  The first contained VA's 
requests for our views on 52 expenditures and relief for seven 
officials associated with those expenditures.  The second contained 
VA's request for our views on 20 additional expenditures, but did not 
include any requests for relief.