BNUMBER:  B-257488
DATE:  November 6, 1995
TITLE:  Food and Drug
Administration - Use of Appropriations for "No Red Tape"
Buttons and Mementoes

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Matter of:Food and Drug Administration - Use of Appropriations for "No 
          Red Tape" Buttons and Mementoes

File:     B-257488

Date:     November 6, 1995
______________________________________________________________________
____
DIGEST  

l.  Food and Drug Administration may use its appropriations to 
purchase "No Red Tape" buttons to promote the effectiveness and 
efficiency of employees, thereby furthering an authorized agency 
purpose.

2.  Under the Government Employees' Incentive Awards Act, 5 U.S.C.  
4501-4506, Food and Drug Administration appropriations are available 
for the purchase of coffee mugs and pens for federal employees if 
these items are intended to be presented as honorary or informal 
recognition awards.
______________________________________________________________________
_____
DECISION

The Director, Division of Accounting, Food and Drug Administration 
(FDA), Department of Health and Human Services, asks whether FDA 
appropriations may be used to purchase "No Red Tape" buttons to remind 
employees to carry out their functions efficiently, and for awards, 
such as coffee mugs and pens, which would be presented to speakers and 
federal employees at FDA District Conferences.  For reasons discussed 
below, FDA appropriations are available for these purchases.

BACKGROUND

The Office of Management Systems (OMS), Center for Food Safety and 
Applied Nutrition, FDA, would like to purchase buttons inscribed with 
the logo, "No Red Tape."  As part of an office campaign to promote 
team building, efficiency, and effectiveness, OMS would distribute 
these buttons to its staff of 130 to voluntarily wear while at work.  
OMS intends the buttons to serve as visible reminders to staff and 
customers that OMS' mission is not to say "no" but to find ways to 
work together to satisfy its customers' needs.  FDA states that these 
buttons are not personal gifts but, rather, are a management tool that 
would provide a cost-effective way of displaying the OMS mission 
statement.  The buttons would cost less than $150.

In addition, FDA would like to purchase items, such as coffee mugs, 
pens or other inexpensive mementoes, to award to participants and to 
present to guest speakers at District Conferences.  The mementoes, 
emblazoned with the theme adopted for the conference, would serve as a 
remembrance of a particular task, occasion, or a job well done.  FDA 
believes that these tokens, while inexpensive ($2 to $3 each), are 
very important in encouraging a sense of teamwork and identity with 
the organization, and in building employee morale.

FDA would charge the expenses in question to its Salaries and Expenses 
appropriation, which is provided for the necessary expenses of the 
agency.  Pub. L. No. 104-31 (Sept. 30, 1995).  The Senate report on 
the fiscal year 1995 FDA appropriation stated that FDA's mission is to 
ensure that (1) food is safe, pure, and wholesome; (2) cosmetics are 
safe; (3) human and animal drugs, biological products, and therapeutic 
devices are safe and effective; and (4) radiological products and use 
procedures do not result in unnecessary exposure to radiation.  S. 
Rep. No. 290, 103d Cong., 2d. Sess. 132 (1994).

DISCUSSION 
 
"No Red Tape" Buttons

We have been frequently asked about the purchase of relatively 
inexpensive items for distribution to agency employees as incentives 
to boost morale or increase support for a particular program.  The 
question, of course, is whether the agency is authorized to use its 
appropriation for the particular expenditure.  31 U.S.C           
1301(a).  If the item in question is not specifically authorized by 
any appropriation act or other statute, the standard for measuring the 
propriety of the expenditure is the "necessary expense" rule.  66 
Comp. Gen. 356, 359 (1987).  Under this rule, an expenditure is 
permissible if it is reasonably necessary to carry out an authorized 
function or will contribute materially to the effective accomplishment 
of that function, and is not otherwise prohibited by law.  Id.

The application of the "necessary expense" rule is, in the first 
instance, a matter of agency discretion.  However that discretion is 
not unfettered.  For example, we rejected the use of appropriated 
funds to pay for plastic ice scrapers imprinted with the inscription 
"U.S. Army Corps of Engineers - Huntsville Division - Please don't 
drink and drive" for Huntsville employees.  B-223608, Dec. 19, 1988.  
The Corps argued that the ice scrapers served a valuable promotional 
purpose in support of the Huntsville division's safety program.  
However, because the Corps did not demonstrate how, if at all, the ice 
scrapers addressed an occupational health and safety hazard not shared 
by the public as a whole, we did not view the expense as necessary to 
the Corps' discharge of its functions.  Id.  Similarly, we did not 
accept an IRS argument that the distribution of T-shirts stamped with 
the Combined Federal Campaign (CFC) logo to IRS Memphis Service Center 
employees contributing five or more dollars per pay period to CFC was 
a necessary expense to motivate its employees to contribute to CFC.  
70 Comp. Gen. 248 (1991).  In each of these cases, we balanced our 
respect for agency discretion against the clear potential for abuse of 
taxpayers dollars if we were to accept the agency's rationale.  See 1 
GAO Principles of Federal Appropriations Law p. 4-128 (2d. ed. 1991).  
Therefore, in determining the propriety of a proposed expenditure, we 
will consider whether the relationship between an authorized function 
and a proposed expenditure is so attenuated as to take it beyond the 
agency's legitimate range of discretion.  B-247563.2, May 12, 1993; 
B-223608, Dec. 19, 1988.

Under a "necessary expense" analysis, where the item, such as the 
buttons at issue here, has no intrinsic value to its recipient, and is 
designed solely to assist in achieving internal agency management 
objectives, the agency must show that the item will contribute to the 
agency's mission.  We think FDA has demonstrated the requisite nexus 
between its appropriation's purpose and the "no red tape" buttons.  
The message is clearly informational and directed at the promotion of 
an internal agency management objective.  The button serves much the 
same purpose as other internal agency informational media such as 
posters, memos, etc., reminding agency employees of institutional 
objectives and goals.  In these circumstances, the purchase of the 
buttons can be considered a necessary expense that is incidental to 
the purpose of the FDA appropriation.  We, therefore, do not object to 
the use of appropriations for this proposed purchase.

FDA District Conference Mementoes       

FDA proposes to purchase inexpensive mementoes to award to federal 
employees and to present to guest speakers at its District 
Conferences.   The Government Employees' Incentive Awards Act (Act), 5 
U.S.C.  4501-4506, authorizes agency heads to "pay a cash award to, 
and incur necessary expenses for the honorary recognition" of, federal 
employees.  5 U.S.C.  4503.  For example, the purchase of telephones 
(nominal value of $27) to be presented as honorary awards is an 
allowable use of  appropriated funds under this Act.  67 Comp. Gen. 
349, 350 (1988).  See also B-184306, Aug. 27, 1980 (desk medallions 
for use as paperweights).
The Act authorizes the Office of Personnel Management (OPM) to 
prescribe regulations and instructions under which agency awards 
programs will be carried out.  5 U.S.C.  4506.  In August 1995, OPM 
issued regulations defining an "award" as "something bestowed or an 
action taken to recognize and reward individual or team achievement 
that contributes to meeting organizational goals or improving the 
efficiency, effectiveness, and economy of the government or is 
otherwise in the public interest."  60 Fed. Reg. 43936 (to be codified 
at 5 C.F.R.  451.102).  Under these regulations, mugs and pens are 
acceptable as awards so long as they are "bestowed . . .  to recognize 
and reward . . . achievement . . . ."  Accordingly, if FDA proposes to 
present the mugs and pens at issue here to employees in honorary 
recognition of an achievement that otherwise meets the criteria set 
forth in OPM regulations,[1] the proposed purchase may be deemed a 
necessary expense that is chargeable to FDA appropriations.  However, 
FDA's appropriations are not available to purchase such items for 
distribution to all conference attendees as a remembrance of the 
event.  The items, in such case, could not be characterized as 
"honorary" in nature.  See e.g., 53 Comp. Gen. 770 (1974), where 
decorative ashtrays, which were distributed to conference attendees, 
were deemed personal gifts and hence, not a necessary expense of the 
agency's appropriations.

We do not object to presenting such mementoes to District Conference 
guest speakers if the purpose of the speech is to further an 
authorized agency purpose.  See, e.g., B-208729, May 24, 1983, where 
an honorarium paid to a guest speaker was deemed a necessary expense 
of a program that advanced an agency objective.  

/s/Robert Murphy
for Comptroller General
of the United States    
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1. 60 Fed. Reg. 43946 (to be codified at 5 C.F.R.   451.104(a)).