TITLE:  Transfer of Fiscal Year 2003 Funds from the Library of Congress to the Office of the Architect of the Capitol, B-302760, May 17, 2004
BNUMBER:  B-302760
DATE:  May 17, 2004
**********************************************************************
Transfer of Fiscal Year 2003 Funds from the Library of Congress to the Office of
the Architect of the Capitol, B-302760, May 17, 2004

   B-302760
    
May 17, 2004
    
The Honorable Jack Kingston
Chairman, Subcommittee on Legislative Branch
Committee on Appropriations
House of Representatives

   Subject: Transfer of Fiscal Year 2003 Funds from the Library of Congress
to the Office of the Architect of the Capitol
    
Dear Mr. Chairman:
    
This responds to your request for our legal opinion regarding a transfer
of fiscal year 2003 funds from the Library of Congress (Library) to the
Office of the Architect of the Capitol (Architect). Specifically, you ask
for our opinion on the propriety of a September 30, 2003, transfer of
$500,000 from the Library*s *Salaries and Expenses* appropriation to the
Architect*s *Library Buildings and Grounds* appropriation for the purpose
of redesigning and renovating a loading dock at the Library*s Madison
Building. The Library*s appropriation is a 1-year appropriation; the
Architect*s appropriation includes 1-year, 3-year and no-year funds. You
ask whether this transfer has resulted in extending the obligational
availability of the Library*s 1-year appropriation, and whether the funds
were properly obligated for a bona fide need of the fiscal year for which
they were appropriated.
    
As we explain below, the transfer of funds from the Library to the
Architect did not extend the obligational availability of the Library*s
appropriation.  Under the Library*s transfer authority, 2 U.S.C. S:
141(c), transferred Library funds were only available for the bona fide
needs of fiscal year 2003.  The Library had a bona fide need to renovate
the Madison Building loading dock in September 2003 when it entered into
an interagency agreement with the Architect.  In signing the interagency
agreement, the Library incurred an obligation for $500,000.  Accordingly,
that amount is available to liquidate the obligation in future fiscal
years to cover costs incurred by the Architect in accordance with the
terms of the interagency agreement.
    
Consistent with our customary practice when rendering opinions, upon
receipt of your request, we sent letters to the General Counsels of both
the Library and the Architect to establish a record on the matter you put
before us.  Letters from
Thomas H. Armstrong, Assistant General Counsel, General Accounting Office,
to Charles Tyler, General Counsel, Office of the Architect of the Capitol,
and to Elizabeth Pugh, General Counsel, Library of Congress, April 8,
2004.  We requested certain documentary evidence from both the Library and
the Architect, and asked a series of questions designed to permit us to
assess the Library*s and the Architect*s rationale for the transfer in
question.  We received responses from the Library and the Architect on
April 27, including detailed documentary evidence of the design work for
the loading dock and the funds transfer.
    
BACKGROUND
    
The Consolidated Appropriations Resolution, 2003, appropriated funds to
the Library of Congress for *Salaries and Expenses* for fiscal year 2003
which were available, inter alia, for *necessary expenses of the Library
of Congress not otherwise provided for, including . . . custody and
custodial care of the Library buildings.*  Pub. L. No. 108-7, Div. H, Tit.
I, 117 Stat. 11, 376 (2003) (Legislative Branch Appropriations).[1]  The
Architect also received appropriations in this same Act, under the heading
*Library Buildings and Grounds,* *[f]or all necessary expenses for the
mechanical and structural maintenance, care and operation of the Library
buildings and grounds.*  Part of the Architect*s appropriation is only
available for fiscal year 2003, part remains available until September 30,
2007, and part remains available until expended.  Id. at 372.
    
The Consolidated Appropriations Resolution, 2003, also updated the Act of
June 29, 1922, Ch. 251, S: 1, 42 Stat. 715, as amended, which assigns
responsibilities between the Architect and the Library over the Library*s
buildings and grounds.  Pub. L. No. 108-7, S: 1208, 117 Stat. at 375-76,
codified at  2 U.S.C. S: 141.  As amended, section 141(a) allocates to the
Architect responsibility for structural integrity, mechanical, electrical,
plumbing and elevator systems, architectural features and compliance with
relevant buildings codes.  2 U.S.C. S: 141(a).  Section 141(b) allocates
to the Library all other work not assigned to the Architect.  2 U.S.C. S:
141(b).  According to the Library, the principal division of labor between
the Library and the Architect remains largely the same * historically, the
Architect has been responsible for architectural, structural, and
mechanical work at the Library buildings and grounds, and the Library has
been responsible for furnishing, equipping and maintaining the interior of
the buildings.[2]  Letter from Elizabeth Pugh, General Counsel, Library of
Congress, to Thomas H. Armstrong, Assistant General Counsel, General
Accounting Office, April 27, 2004 (Pugh Letter).
    
The Senate Appropriations Committee report states that the purpose of the
amendment to section 141 was to address the division of labor between the
Architect of the Capitol and the Librarian of Congress with respect to
Library buildings and grounds.  S. Rep. No. 107-209 at 48 (2002).   The
amendment also was to provide for flexibility in accomplishing necessary
work, authorizing the Architect and the Library to reallocate facilities
projects between themselves and to transfer project funding
accordingly.[3]  Id.
    
In this regard, the Act authorizes the Architect and the Library to enter
into agreements with each other to perform work and allows each agency to
transfer funds to the other for that purpose:
    
*The Architect of the Capitol and the Librarian of Congress may enter into
agreements with each other to perform work under this section, and,
subject to the approval of the Committees on Appropriations of the House
of Representatives and the Senate and the Joint Committee on the Library,
may transfer between themselves appropriations or other available funds to
pay the costs therefor.*  2 U.S.C. S: 141(c) (emphasis added).
    
The Senate Committee on Appropriations directed the Library and the
Architect to enter into a Memorandum of Understanding to set forth *their
mutual understanding of the scope of work that may be transferred between
them, the conditions under which work and funds will be transferred, and
the process for managing such projects* under section 141.  S. Rep. No.
107-209 at 48.  Accordingly, the Library and the Architect finalized a
Memorandum of Understanding in August 2003 *to provide a basis for the
orderly planning, management, and funding of construction projects at the
Library of Congress.*  Memorandum of Understanding between the Architect
of the Capitol and the Library of Congress, S: 1, Aug. 9, 2003 (MOU).
    
According to both the Library and the Architect, the work at issue here,
the redesign and renovation of the Madison Building*s loading dock, falls
within the Architect*s responsibility.  2 U.S.C. S: 141(a).  Pugh Letter;
Letter from Charles K. Tyler, General Counsel, Office of the Architect of
the Capitol, to Thomas H. Armstrong, Assistant General Counsel, General
Accounting Office, April 27, 2004 (Tyler Letter).  The MOU states that
*the decision whether the [Library] will undertake a project that would
otherwise be handled by the [Architect] pursuant to the terms of the Act
[Pub. L. No. 108-7, 2 U.S.C. S: 141] will be mutual, and will be reflected
in a bilaterally executed Interagency Agreement.* MOU, S: 1.c.  The MOU
does not authorize the Library to perform any specific project; subsequent
interagency agreements will contain such authorization.  MOU, S: 1.d.
    
On July 30, 2003, the Librarian of Congress requested approval from the
chairmen of the respective committees, in accordance with 2 U.S.C. S:
141(c), to transfer $500,000 from the Library to the Architect to renovate
the loading dock at the Library*s Madison Building.[4]  The Librarian
cited the October 2001 anthrax incident on Capitol Hill as requiring new
policies, procedures and operations to increase security for mail delivery
and to reconfigure space based on the new mail operations.  Letters to
Chairmen.  The Librarian also cited *the need to obligate project funds by
September 30.*

    
After receiving approval from the respective committee chairmen as
required by section 141(c), the Architect and the Librarian entered into
an interagency agreement on September 26, 2003, as called for by the MOU.
[5]  Interagency Agreement between the Architect of the Capitol and the
Library of Congress, Sept. 26, 2003. The interagency agreement
incorporates the MOU by reference and contains a *Statement of Work*
detailing the services to be performed and includes design and
construction drawings.  Interagency Agreement, S: 1, Attach. B, Attach.
C.  The interagency agreement further states that *[The Library] will
advance an amount totaling $500,000 in FY [fiscal year] 2003 funds to [the
Architect] for the purpose of the design/build of the project specified in
the Statement of Work,* and that *[t]here is a bona fide need for this
project in fiscal year 2003.*  Interagency Agreement, S: 4.  Funds were
subsequently transferred electronically on September 29, 2003.  On
September 30, 2003, pursuant to a Library of Congress *Notice of
Miscellaneous Obligation* identifying the Architect of the Capitol as the
vendor, an *authorized certifying officer* recorded an obligation of
$500,000 against the Library*s fiscal year 2003 funds.  Library of
Congress Financial Services Directorate, Doc. No. 03BUDBB0001, Sept. 30,
2003.  Both the Library and the Architect estimate that the project will
start in May 2004; the Architect estimates the actual construction time to
be 9 months.[6]  Pugh Letter; Tyler Letter.
    
ANALYSIS
    
The matter before us concerns the Architect of the Capitol*s (Architect)
use in fiscal years 2004 and 2005 of funds appropriated to the Library of
Congress (Library) for fiscal year 2003.  A fiscal year appropriation,
like the Library*s appropriation, is available only for the agency*s bona
fide needs of that fiscal year.  31 U.S.C. S: 1502(a).  See also B-282601,
Sept. 27, 1999.  For that reason, questions fairly arise whenever an
agency transfers funds from a fiscal-year appropriation to an
appropriation that is available for more than 1 year, as the Library did
when it transferred funds from its appropriation to the Architect*s
appropriation.  The questions presented here are (1) whether the September
30, 2003, transfer of $500,000 from the Library*s *Salaries and Expenses*
appropriation to the Architect*s *Library Buildings and Grounds*
appropriation extended the availability of the Library*s 1-year
appropriation; and (2) whether those funds were properly obligated for a
bona fide need of fiscal year 2003.  Because the Library*s Salaries and
Expenses appropriation is available for expenses of *custody and custodial
care of the Library buildings,* Pub. L. No. 108-7, Div. H, Tit. I, 117
Stat. 11, 376 (2003), we have no objection to the Library transferring
amounts for this purpose.
    
A transfer of funds from one appropriation to another is permitted only
when authorized by law.  31 U.S.C. S: 1532.  Even when a transfer is
permitted, the amounts transferred are subject to the same purpose and
time limitations as imposed by the law that appropriated those amounts. 
Id.
    
The $500,000 transfer occurred in the context of an interagency
transaction.  Authority to engage in interagency transactions, like
section 141(c), permits the transfer of funds between the two agencies who
are parties to the transaction in order to cover the costs of the goods or
services that are the subject of the transaction.  See, e.g., B-289380,
July 31, 2002.  Section 141(c) specifically authorizes the Architect and
the Library to *enter into agreements with each other to perform work
under this section,* and to *transfer between themselves appropriations .
. . to pay the costs therefor.*  2 U.S.C. S: 141(c).  Section 141(c) does
two things:  it establishes transfer authority (*transfer between
themselves*), and it defines the purpose for which transferred amounts are
available (*to perform work under this section*).  The redesign and
renovation of the Library*s loading dock is certainly *work under this
section,* because section 141(a) allocates this responsibility to the
Architect.  Therefore, section 141(c) permits the Library to enter into an
agreement with the Architect for the redesign and renovation of the
loading dock, and to transfer Library appropriations to the Architect to
pay the costs incurred by the Architect in performing that work. [7]
    
Section 141(c), however, does not waive, or otherwise modify, any time
constraints imposed in appropriations laws on amounts transferred.  While
permitting transfers and defining the purposes for which transferred
amounts are available, section 141(c) does not address the time
availability of transferred amounts.  Accordingly, the fiscal year 2003
amounts transferred from the Library to the Architect are available for
obligation only for the bona fide needs of fiscal year 2003.  31 U.S.C. S:
1532.  However, the fact that the $500,000 transferred were fiscal year
2003 funds does not necessarily mean that they may not be applied to cover
costs incurred in fiscal year 2004 and 2005.  Whether the $500,000 can be
used to cover costs incurred by the Architect in fiscal years 2004 and
2005 depends on (1) whether the Library incurred an obligation for that
amount in fiscal year 2003, the period of the funds legal availability,
and (2) whether the obligation was for a bona fide need of the Library in
fiscal year 2003.
    
Did the Library incur an obligation in fiscal year 2003?
    
An interagency transaction, like that authorized by section 141(c), is, in
some ways, not unlike a contractual transaction.  See, e.g., B-286929,
Apr. 25, 2001.  Similar to a contractual transaction, at the time the
agencies involved in the transaction enter into an interagency agreement,
the ordering agency incurs an obligation for the costs of the work to be
performed, and the amount obligated remains available to pay these costs
once the work is completed.  See, e.g., 59 Comp. Gen. 386 (1980) (a
Printing and Binding Requisition submitted by a federal agency to the
Government Printing Office (GPO), when accompanied by copy or sufficient
specifications for GPO to proceed with the job, creates a valid obligation
if the need for printing existed at the time the requisition was
submitted).  See also B-286929, Apr. 25, 2001 (interagency obligations
pursuant to Brooks Act treated like other agency obligations, rather than
like Economy Act obligations, and the existence of a defined requirement
at the time the agreement is executed forms the basis for incurring and
recording a financial obligation); 23 Comp. Gen. 82 (1943).[8]  The fiscal
year appropriation current at the time of the order should be charged for
the full costs of the order, notwithstanding that the work may not be
completed during that fiscal year.  59 Comp. Gen. 386 (1980).  Here, the
Library entered into an interagency agreement with the Architect in fiscal
year 2003.  It was that agreement that obligated the Library*s fiscal year
2003 appropriation; the amount obligated for the agreement remains
available to cover the Architect*s costs of performing the work ordered in
the interagency agreement.[9] 
    
The fact that the Library transferred funds to the Architect in advance of
the Architect*s completion of the work did not result in the Library
extending the availability of the amount transferred.  The Library can
make payment to the Architect, as section 141(c) requires it to do, either
by transferring funds after the Architect completes the work ordered, or
by advancing the funds for the Architect to use as it incurs costs in
performing the work.[10]  Regardless of the payment method chosen, the
obligation of the appropriation in September 2003, at the time of the
interagency agreement, makes those funds available in fiscal years 2004
and 2005 * so long as the funds are used solely to cover the costs of the
work ordered in the agreement.[11]
It is important to distinguish the interagency transaction authority of
section 141(c) from the general interagency transaction authority of the
Economy Act, 31 U.S.C. S: 1535.  Although the Economy Act provides general
authority for interagency transactions, it does not govern transactions
carried out under other specific authorities such as section 141(c).  This
is important because the Economy Act imposes conditions on Economy Act
transactions that do not apply to transactions under other, independent
authorities.  B-289380, July 31, 2002. 
    
For our purposes here, while the Economy Act, like other interagency
transaction authorities, requires the ordering agency to obligate its
appropriation when it enters into an agreement with another federal
agency, if the appropriation charged is a fiscal-year appropriation, the
Economy Act requires the ordering agency to deobligate the appropriation
at the end of the fiscal year to the extent that the performing agency has
not performed.  31 U.S.C. S: 1535(d).  See, e.g., 39 Comp. Gen. 317
(1959); 34 Comp. Gen. 418, 421-22 (1955).  That requirement is specific to
Economy Act transactions and does not apply to transactions governed by
statutory authority other than the Economy Act, like section 141(c). 
B-289380, July 31, 2002; see also B-282601, Sept. 27, 1999 (section
1535(d) only applies to interagency agreements under the Economy Act);
B-167790, Sept. 22, 1977 (the agreement was authorized by statutory
provisions other than the Economy Act, so therefore was not subject to the
unique obligation treatment applicable to Economy Act transactions). 
Here, the interagency agreement between the Library and the Architect is
based on specific statutory authority, 2 U.S.C. S: 141(c), not the Economy
Act.
    
Was the Library*s obligation for a bona fide need of fiscal year 2003?
    
An appropriation limited in time may be obligated only to meet a
legitimate need of the time period for which Congress provided the
appropriation.  31 U.S.C. S: 1502(a).  See also B-282601, Sept. 27, 1999;
B-257977, Nov. 15, 1995; 73 Comp. Gen. 77 (1994); 70 Comp. Gen. 296
(1991).  The question arises, then, whether the $500,000 transfer was
properly obligated for a bona fide need of the Library during the period
that these funds were available for obligation, that is, fiscal year 2003.
    
The Library first identified a need to renovate the loading dock and mail
handling facilities as early as 1996, and commissioned a contractor to
study the loading dock and mail handling operation.  Pugh letter. 
According to the Library*s General Counsel, the October 2001 anthrax
incident on Capitol Hill accelerated the Library*s
reengineering of its security, entrance and exit and mail handling
operations.  Id. See also Legislative Branch Appropriations Hearing for
Fiscal Year 2003, House hearing  at 137 (Statement by the Librarian of
Congress Dr. James Billington) (*New protocols for mail delivery have had
a profound impact on many business processes in the Library.  Anthrax
concerns severely delayed processing copyright registrations, acquiring
materials for the collections, and communicating with many domestic and
foreign partners.*).  In February 2002 the Library hired a firm to design
the Madison Building loading dock area.  Pugh letter.  *Discussions with
the Architect ensued, and on April 20, 2003 the Library received a
memorandum from the Architect commenting on issues with the design
proposal and providing a budget estimate for the project.*  Id.  In July
2003, the Library formally requested approval for the transfer of funds to
renovate the loading dock.  See Letters to Chairmen, footnote 4, infra.
    
We necessarily defer to the Library*s determination of whether its loading
dock and mail handling facilities are, in fact, capable of accommodating
the heightened security considerations resulting from the October 2001
anthrax incident.  From a bona fide need perspective, so long as the
agency has identified a prior legitimate need that continues to exist, the
appropriation current at the time the agency acts upon that need is
available for the agency to use to satisfy that need.  See, e.g., 73 Comp.
Gen. 259 (1994) (an agency's compliance with the bona fide need rule is
measured at the time the agency incurs an obligation, and depends on the
purpose of the transaction and the nature of the obligation being entered
into).  See also 61 Comp. Gen. 184, 186 (1981) (bona fide need
determination depends upon the facts and circumstances of the particular
case).  Here, the Library appears to have identified a need as early as
1996, but at least in 2001, that continued into subsequent fiscal years. 
With its September 2003 interagency agreement, the Library acted to
satisfy its need.  Because the Library had established its need to
renovate the loading dock at least in 2001, and not having satisfied that
need at that time, the Library*s fiscal year 2003 appropriation was
available for that purpose.  The fact that the Library will not benefit
from the renovation until after fiscal year 2003 does not mean that the
renovation is not a bona fide need of fiscal year 2003.
    
CONCLUSION
    
The transfer of funds from the Library of Congress* *Salaries and
Expenses* appropriation to the Architect of the Capitol*s *Library
Buildings and Grounds* appropriation for the purpose of redesigning and
renovating a loading dock at the Library*s Madison Building did not extend
the availability of the Library*s appropriation for obligation.  Under the
Library*s transfer authority, 2 U.S.C. S: 141(c), transferred Library
funds were only available for the bona fide needs of fiscal year 2003. 
The Library had a bona fide need to renovate the loading dock in September
2003 when it entered into an interagency agreement with the Architect.  In
signing the
interagency agreement, the Library incurred an obligation for $500,000. 
That amount should be used to liquidate the obligation in fiscal years
2004 and 2005 to cover costs incurred by the Architect in accordance with
the terms of the interagency agreement.
    
Sincerely yours,
    
    
/signed/
    
Anthony H. Gamboa
General Counsel
    

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

   [1] Section 202 of the general provisions, applicable to Library
appropriations, confirms the availability of those funds for fiscal year
2003 obligations.  Pub. L. No. 108-7, Div. H, Tit. II, 117 Stat. at 382.
[2] Compare 2 U.S.C. S: 141(2002) with 2 U.S.C. S:S: 141(a)(1)(C), (D)
(2004).  (The superceded section 141 did not specify responsibility for
compliance with building and fire codes and for architectural features of
the buildings.)
[3] See also Legislative Branch Appropriations for Fiscal Year 2003:
Hearing before a Subcommittee of the Senate Committee on Appropriations,
107th Cong. 9
(Mar. 13, 2002) (Statement by the Librarian of Congress Dr. James
Billington) (*The Library also requested, but the Architect did not
approve, funding requests for construction of book-storage module[s]. .
.*); Legislative Branch Appropriations for Fiscal Year 2003: Hearing
before a Subcommittee of the House Committee on Appropriations, 107th
Cong. 227 (Apr. 24, 2002) (Response of Deputy Librarian of Congress Donald
L. Scott to Rep. Moran) (*We are clearly frustrated [with the Architect]
by the lack of progress which many of our [the Library*s] projects
experience . . .*).
[4] Letters from James H. Billington, Librarian of Congress, to the
Honorable Jack Kingston, Chairman, Subcommittee on the Legislative Branch,
Committee on Appropriations, U.S. House of Representatives; to the
Honorable Ben Nighthorse Campbell, Chairman, Subcommittee on the
Legislative Branch, Committee on Appropriations, U.S. Senate; and to the
Honorable Ted Stevens, Chairman, Joint Committee on the Library, July 30,
2003 (Letters to Chairmen).
[5] The respective chairmen approved the transfer by returning the letters
to the Librarian indicating their approval by their respective
signatures.  Copies of the returned letters are included as Attachment A
of the interagency agreement.   Chairman Kingston signed his letter on
September 24, 2003.  Interagency Agreement, Attach. A. The letter to the
Chairman of the Joint Committee on the Library, though signed by both the
Chairman and Vice-chairman, was not dated.  Id.  The letter to the
Chairman of the Senate Subcommittee on the Legislative Branch was signed
by both the Chairman and Ranking Member, though only the Ranking Member
dated his signature (September 3, 2003).  Id.
[6] We note that the interagency agreement is silent as to the duration of
the construction period, and could have been drafted with greater
specificity in this regard.  See Interagency Agreement, S: 5 (Term and
Termination).
[7] Without the section 141(c) authorization, this transfer of funds would
constitute an impermissible augmentation of the Architect*s appropriations
for Library buildings and Grounds.  See, e.g., B-206668, Mar. 15, 1982.
[8] Cf. B-300480, Apr. 9, 2003 (defining obligation in the context of a
legal liability to include interagency agreements).
[9] An agency may obligate a fiscal year appropriation for the provision
of services that extend beyond the end of the fiscal year in which the
appropriation is made when those services constitute a single,
nonseverable undertaking.  See B-257977, Nov. 15, 1995; 73 Comp. Gen. 77
(1994); 70 Comp. Gen. 296 (1991).  Once expired, appropriated funds remain
available to liquidate obligations properly chargeable to that account for
five fiscal years after the period of availability.  5 U.S.C. S:S:
1552(a), 1553(a).  Because the Library would receive no benefit if the
Architect were not to complete construction of the Madison building
loading dock, the interagency agreement between the Architect and the
Library for that work represents a single, nonseverable undertaking.  See,
e.g., B-257977, Nov. 15, 1995.
[10] While interagency transactions are like contractual transactions in
some ways they differ from contractual transactions in other ways.  The
option to advance funds to the performing agency in an interagency
transaction is not available in a contractual transaction.  31 U.S.C. S:
3324(a) (advance payment prohibition.)  The advance payment prohibition,
by its terms, applies to contracts; it does not apply to interagency
transactions.  See, e.g., B-207215, Mar. 1, 1983; see also 25 Comp.       
Gen. 834 (1946).
[11] If the amount the Library advances is based on an estimate of costs,
the Architect, at completion of the work, must return to the Library any
of the advance remaining after all costs are paid.  B-288142, Sept. 6,
2001.  The amounts transferred do not take on the 3-year or no-year
character of the Architect*s appropriation.  Conversely, if there are cost
overruns and the $500,000 transfer was insufficient to cover project
costs, then the Library may only use fiscal year 2003 funds to pay for
such overruns.