TITLE: B-301721, Fish & Wildlife Service -- Reimbursement for Individual Financial, January 16, 2004
BNUMBER: B-301721
DATE: January 16, 2004
*********************************************************************************************
B-301721, Fish & Wildlife Service -- Reimbursement for Individual Financial, January 16, 2004

   Decision

   Matter of: Fish & Wildlife Service -- Reimbursement for Individual
   Financial Planning for Retirement

   File: B-301721

   Date:  January 16, 2004

   DIGEST

   We have no objection to the U.S. Fish and Wildlife Service's (Service)
   proposal to use appropriated funds to reimburse its employees for the
   costs of individual financial planning as part of the agency's retirement
   education program. Employee retirement education and retirement counseling
   are legitimate functions of administering an agency's personnel benefits
   system, and therefore legitimate agency expenses. As the Service
   implements the proposed program, it should develop internal controls to
   ensure that the service for which reimbursement is sought meets the
   agency's definition of "advice and consultation services on investments,
   retirement issues and benefit programs from a financial planner."

   DECISION

   The Director of the U.S. Fish and Wildlife Service has requested an
   advance decision under 31 U.S.C. sect. 3529 on the propriety of using
   appropriated funds to reimburse employees for costs associated with
   individual financial planning for retirement as part of the agency's
   retirement education program. For the reasons set forth below, we have no
   objection to the Service's proposal to reimburse its employees for the
   costs of individual financial planning for retirement as part of its
   legitimate function of administering its personnel benefits system.
   Employee retirement education and retirement counseling are legitimate
   agency expenses. We note that the Service's proposed reimbursement program
   does not designate acceptable sources of financial planning, and we
   encourage the Service to develop internal controls to assess each employee
   request to ensure that the service for which reimbursement is sought meets
   the agency's definition of "advice and consultation services on
   investments, retirement issues and benefit programs from a financial
   planner."

   BACKGROUND

   The U.S. Fish and Wildlife Service (Service) is considering implementation
   of a program designed to educate its employees in planning for financial
   security in retirement and in making the best use of the federal benefit
   programs available to them. Letter from Marshall P. Jones, Jr., Director,
   FWS, to David M. Walker, Comptroller General, GAO, Aug. 12, 2003 (Jones
   letter). The director states that "[w]ith the increasing complexity of the
   Federal benefits program including long-term care insurance, additional
   options in the Thrift Savings Plan, and Flexible Spending Accounts,
   employees have a growing need for financial planning services related to
   the total compensation package." Id. As explained in a draft of the
   proposal enclosed with the Jones letter, the Service, instead of providing
   retirement counseling to employees, would permit employees to choose their
   own financial planner outside the agency and the Service will not endorse
   or recommend a financial service provider. Draft Director's Order sect. 6.
   The Service would reimburse 50 percent of the cost of permanent employees'
   financial planning expenses for the previous year, or up to $200,
   whichever is less. Draft Director's Order sections 4, 8. Employees could
   receive the benefit once every 3 years, and within 12 months of retirement
   or other voluntary separation, regardless of the 3-year limit. Draft
   Director's Order sections 4, 11. Financial planning expenses are defined
   as advice and consultation services on investments, retirement issues, and
   benefit programs sought by an employee from a financial planner. Draft
   Director's Order sect. 5.

   The Service does not employ retirement counselors or financial planners
   and by offering the reimbursement program for financial planning for
   retirement it would avoid the staff costs of providing such services
   in-house. 2004 U.S. Fish & Wildlife Service Budget Request, Justification
   of Proposed Changes to the 2003 Program (enclosed with Jones letter). The
   proposed program would be funded from annual appropriations for "Resource
   Management," which currently fund the Service's general operations,
   including personnel compensation and benefits. See Consolidated
   Appropriations Resolution, 2003, Pub. L. No. 108-7, 117 Stat. 11, 220-221
   (2003); see also Budget of the United States Government, Fiscal Year 2004
   Appendix at 558 (United States Fish and Wildlife Service, Federal Funds,
   Resource Management). The Service has included the proposed reimbursement
   program for retirement financial planning in its fiscal year 2004 budget
   request as part of its "Responsible Employer Initiative," estimating that
   the program will cost $200,000 per year to service its 8,000 employees.
   2004 U.S. Fish & Wildlife Service Budget Request.

   In support of the proposed reimbursement program, the Director cites a GAO
   Report which surveyed retirement education programs that the Office of
   Personnel Management (OPM) and selected agencies provide to federal
   civilian employees covered by the Civil Service Retirement System or the
   Federal Employees' Retirement System. Federal Retirement: Key Elements Are
   Included in Agencies' Education Programs (GAO/GGD-99-27 March 29, 1999).
   Our report found, among other things, that agency retirement education
   programs play an important role in helping federal employees make
   well-informed retirement planning decisions; that agencies believed that
   retirement education is a shared responsibility between agencies and
   employees; and that though the agencies surveyed generally contracted out
   for retirement education seminars, they relied on their own staff
   "benefits officers" to provide one-on-one counseling to employees.
   GAO/GGD-99-27 at 2-4. OPM and retirement experts also recommended that
   agencies design and implement their retirement education programs so as to
   provide employees with information on certain key topics using multiple
   presentation formats early and throughout their careers.[1] GAO/GGD-99-27
   at 4. The Service now seeks to implement these recommendations by
   establishing a retirement education program that partially reimburses
   employees for individualized financial planning for retirement from an
   independent financial planner of their own choosing.

   ANALYSIS

   An agency may use appropriated funds only for the purposes for which
   appropriated. 31 U.S.C. sect. 1301(a). Even if a particular expenditure is
   not specifically provided for in the appropriation, under the "necessary
   expense doctrine" the expenditure is permissible if it is reasonably
   necessary to carry out an authorized function or will contribute
   materially to the effective accomplishment of the function, and if it is
   not otherwise prohibited by law. B-286457, Jan. 29, 2001. The necessary
   expense doctrine does not require that a given expenditure be "necessary"
   in the strict sense that the expenditure would be the only way to
   accomplish a given goal, rather that the expenditure will contribute to
   accomplishing the purposes of the appropriation charged. 50 Comp. Gen. 534
   (1971). In this regard an agency should consider the benefit to the agency
   expected from an expenditure of appropriated funds for a necessary
   expense. 68 Comp. Gen. 127 (1988). The agency should also evaluate the
   anticipated benefits in light of the cost to assure itself that the amount
   expended for the necessary expense is reasonable. Id. We have held that
   whether or not a particular expense is necessary in fulfilling an
   authorized purpose is, in the first instance, a matter of agency
   discretion. B-223608, Dec. 19, 1988.

   In a situation analogous to that at issue here, we held that employee
   outplacement assistance may be viewed as a necessary expense of
   administering the National Aeronautics and Space Administration's (NASA)
   personnel system. B-272040, Oct. 29, 1997. So long as NASA determined that
   the expenditure inured primarily to the agency's benefit and that the cost
   was reasonable in light of the anticipated benefits, we did not object to
   the agency's use of appropriations to fund outplacement assistance. In
   analyzing the anticipated benefits of an outplacement program in relation
   to its cost, we held that NASA may appropriately consider factors such as
   the need for and the size of a downsizing, the difficulty of locating
   other employment in a market where other agencies also are downsizing, and
   the monetary costs and negative effects on morale of a reduction in force
   that could be avoided by use of the proposed program. See also 72 Comp.
   Gen. 229 (1993) (outplacement assistance as necessary expense); see
   further B-286137 Feb. 21, 2001 (annual eye exams for employees performing
   tasks requiring visual acuity a necessary expense and authorized under 5
   U.S.C. sect. 7901).

   Like the outplacement assistance considered in B-272040, we view the Fish
   and Wildlife Service's proposed reimbursement program for financial
   planning for retirement as falling within its legitimate range of
   discretion to administer its personnel system. The proposal defines
   financial planning expenses as advice and consultation services on
   investments, retirement issues, and benefit programs sought by an employee
   from a financial planner. Employee education of retirement and benefits
   programs is a legitimate function of administering an agency's personnel
   benefits system, and therefore a legitimate agency expense.[2] Although
   the Service's appropriation for resource management does not explicitly
   provide funds for employee financial planning for retirement, the
   reimbursement program may be properly regarded as an expense reasonably
   necessary for administering the Service's personnel benefits system.
   Further, the expense is necessary in carrying out the legitimate function
   of administering the agency's retirement program.

   The Service's proposed reimbursement program for financial planning for
   retirement is consistent with the purposes of the Federal Employees'
   Retirement System Act of 1986 (FERSA), Pub. L. No. 99-335, 100 Stat. 514
   (codified throughout chapters 83 and 84 of title 5 of the U.S. Code) and
   is not otherwise prohibited by law. FERSA confirms that providing federal
   employees with retirement counseling is a legitimate agency function. [3]
   The purposes of FERSA are, inter alia, "to provide options for Federal
   employees with respect to retirement planning" and "to encourage Federal
   employees to increase personal savings for retirement." 100 Stat. 514, 516
   sections 100A(4), -( 6).[4]

   As a legitimate agency function, therefore, the form or type of benefit
   and retirement counseling is not dispositive of whether appropriated funds
   may be used. See, e.g. B-272040, Oct. 29, 1997. The Service has discretion
   to determine whether it will provide such counseling in-house through its
   own staff or through a reimbursement program for outside financial
   counseling. We note that the Service's proposed reimbursement program does
   not designate acceptable sources of financial planning, and we encourage
   the Service to develop internal controls to assess each employee request
   to ensure that the service for which reimbursement is sought meets the
   agency's definition of "advice and consultation services on investments,
   retirement issues and benefit programs from a financial planner."

   We express no opinion on the policy merits of reimbursing employees for
   outside retirement financial planning rather than providing the retirement
   counseling internally through agency employees. Nor do we judge the
   sufficiency of financial planning as a sole source of retirement
   counseling for federal employees considering the purposes FERSA. We
   address here the narrow legal question of whether appropriated funds are
   available for the proposed reimbursement program, and we find that they
   are available for that purpose.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] GAO itself made no recommendations in the report. GAO/GGD-99-27 at 5.

   [2] The analysis provided here would also be valid in addressing a
   reimbursement program for more general employee education of federal
   benefits.

   [3] As a legitimate agency function, we need not analyze whether the
   proposed expenditure is personal or official. See, e.g. B-286137 Feb. 21,
   2001 (discussion of personal versus official expenditure).

   [4] We note that Section 8350 of Title 5 of the U.S. Code directs the
   Office of Personnel Management (OPM) to establish a training program for
   all retirement counselors of the federal government and further directs
   those retirement counselors to complete the OPM training annually. Section
   8350(a) defines "retirement counselor" for the purposes of the OPM
   training as an "employee of an agency" who furnishes information and
   counseling services on benefits to other employees of the agency. The
   statute does not provide that agencies must have employees that provide
   retirement counseling or that retirement counseling be provided solely
   within the agency to the exclusion of the Service's proposed reimbursement
   program. Rather, the provision was intended to ensure that agency
   personnel giving retirement information or advice were aware of annual
   changes in federal retirement law. See 131 Cong. Rec. 31,083 (1985)
   (statement of Sen. Trible introducing amendment number 985 to H.R. 2672,
   enacted as Sec. 205, Pub. L. No. 99-335, 100 Stat. 514, 592-3). See
   further 131 Cong. Rec. 14,359 (1985) (statement of Sen. Trible). The
   Service advises that while they do not employ retirement counselors, their
   human resources specialist does attend the OPM retirement counseling
   training annually.