TITLE: B-306475, Help America Vote Act of 2002: Audits and Recovery of Funds, January 30, 2006
BNUMBER: B-306475
DATE: January 30, 2006
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B-306475, Help America Vote Act of 2002: Audits and Recovery of Funds, January 30, 2006
B-306475
January 30, 2006
Mr. Roger La Rouche
Acting Inspector General
Election Assistance Commission
Subject: Help America Vote Act of 2002: Audits and Recovery of Funds
Dear Mr. La Rouche:
You requested information on how the Government Accountability Office
(GAO) will implement section 902(c) of the Help America Vote Act of 2002
(HAVA). Pub. L. No. 107-252, sect. 902(c), 116 Stat. 1666, 1728 (Oct. 29,
2002) (codified at 42 U.S.C. sect. 5542(c)). Section 902(c) provides that
recipients of funds provided pursuant to HAVA shall repay certain amounts
if the Comptroller General makes a determination as a result of certain
audits that the recipient did not comply with program requirements or
received an excess payment. In an audit of California's use of HAVA funds,
conducted on behalf of the U.S. Election Assistance Commission (the
Commission) by the Department of the Interior, Office of Inspector General
(DOI-OIG), auditors questioned some of California's costs because they
were either unallowable or unsupported. You would like to know if the
Comptroller General must make a determination under section 902(c) for an
agency to recover funds, and if so, what procedure he will apply in doing
so. For the reasons set forth below, the Comptroller General need not make
a determination under section 902(c) before an agency making payments may
take corrective action on questioned costs.
HAVA authorizes various federal agencies to make grants or provide
payments of federal funds to the states and various other entities for
purposes related to election reform. See, e.g., Pub. L. No. 107-252, sect.
101, 116 Stat. 1666, 1668-69 (Oct. 29, 2002) (codified at 42 U.S.C. sect.
15301). The U.S. General Services Administration (GSA) disbursed
$27,340,830 of HAVA funds[1] in fiscal year 2003 to California to improve
the administration of elections. In an audit of California's use of these
funds conducted by the DOI-OIG on behalf of the Commission, auditors took
exception to some costs and found others to be unsupported. As found in
the DOI-OIG audit report, the auditors questioned these costs because
California did not comply with applicable regulations and requirements.[2]
Section 902 of HAVA has a number of subsections relevant to this
discussion. Subsection 902(b)(1) authorizes each agency making a grant or
payment to audit any recipient of the funds. Pub. L. No. 107-252, sect.
902(b)(1), 116 Stat. 1666, 1727 (Oct. 29, 2002) (codified at 42 U.S.C.
sect. 15542). Subsection 902(b)(3) provides that "all funds provided under
this Act shall be subject to mandatory audit by the Comptroller General
once during the lifetime of the program involved." Id. at sect. 902(b)(3).
Finally, subsection 902(b)(6) authorizes the Commission to conduct "a
special audit or special examination" of a recipient upon a vote of the
Commission. Id. at sect. 902(b)(6).
In addition to the provisions of section 902(b) for federal audits of HAVA
funds discussed above, section 902(c) provides:
"If the Comptroller General determines as a result of an audit conducted
under section 902(b) that--
"(1) a recipient of funds under this Act is not in compliance with each
of the requirements of the program under which the funds are
provided; or
"(2) an excess payment has been made to the recipient under the
program,
"the recipient shall pay to the office which made the grant or payment
involved a portion of the funds provided which reflects the proportion of
the requirements with which the recipient is not in compliance, or the
extent to which the payment is in excess, under the program involved."
Pub. L. No. 107-252, sect. 902(c), 116 Stat. 1666, 1728 (codified at 42
U.S.C. sect. 15542(c)).
Because this provision refers to audits specified in section 902(b), you
have inferred that the authority of agencies making HAVA payments to take
corrective action is limited by section 902(c) to when the Comptroller
General makes determinations. However, we cannot draw such an inference.
The audit and recovery provisions in section 902 are not the exclusive
authority for audits of HAVA funds and corrective actions resulting from
such audits. While section 902(b) provides GAO, the Commission, and
agencies making HAVA payments with the authority to audit the recipients
of those funds, other audit authorities also exist on which an agency may
rely to audit recipients' use of HAVA funds. For example, the Commission
is a "designated federal entity" under the Inspectors General Act of 1978;
therefore the Commission has an inspector general with the authority to
conduct audits of HAVA funds paid by the Commission. See 5 U.S.C. App.
sections 8G(a)(2), (g), 4(a); 13 Op. Off. Legal Counsel 54, 66 (1989). In
addition, there is no indication either in the language or the structure
of section 902 that Congress intended that HAVA supersede the audit
authority of other inspectors general of federal agencies making HAVA
payments, such as the Department of Health and Human Services,[3] under
the Inspector General Act. See 5 U.S.C. App. sect. 11(2). Further, in
cases where a state expends in excess of $500,000 of federal awards, the
state must undergo a single audit or a program specific audit to comply
with the Single Audit Act, as amended (Single Audit Act). 31 U.S.C. sect.
7502(a)(1)(A); OMB Cir. No. A-133, 68 Fed. Reg. 38,401, sect. ___ .200
(June 27, 2003).
Likewise, the head of an executive agency has independent authority to
collect a claim of the U.S. government for money or property arising out
of the activities of the agency. 31 U.S.C. sect. 3711(a)(1); see also Old
Republic Insurance Co. v. Federal Crop Insurance Corp., 947 F.2d 269, 275
(7th Cir. 1991); B-303927, June 7, 2005. Under this provision, a "claim"
includes any amount of funds determined by an agency official to be owed
to the government, including payments disallowed by audits performed by
the inspector general of the agency administering the program and
overpayments. 31 U.S.C. sect. 3701(b); 31 C.F.R. sect. 900.2(a) (2005). In
cases where an agency has entered into an agreement with a state, the
agency may determine and enforce its rights under the agreement. See,
e.g., 41 C.F.R. sect. 105-71.143 (2005); see also Alabama v. Shalala, 124
F. Supp. 2d 1250, 1261 (M.D. Ala. 2000). In addition, when a single audit
or program-specific audit under the Single Audit Act results in audit
findings, the awarding agency must issue a management decision stating
whether the findings are sustained, the reason for the decision, and the
expected corrective action of the recipient, which includes repaying
disallowed costs. OMB Cir. No. A-133, 68 Fed. Reg. 38,401, sections ___
.400(c)(5), ___.405 (June 27, 2003); see also B-303927, June 7, 2005
(granting agency has the responsibility to recover grant funds misused by
the grantee).
The recovery provision of section 902(c) does not supersede these
preexisting authorities of agencies awarding federal funds to take
corrective action, as section 902 can be construed consistently with these
authorities and there is no evidence in the statute or the legislative
history of HAVA that Congress intended for HAVA to supersede these
authorities. It is a general principle of statutory construction that
specific and general statutes covering the same subject should be
construed consistently to give each statute maximum effect when possible.
Helvering v. Credit Alliance Corp., 316 U.S. 107, 112 (1942); United
States v. Borden Co., 308 U.S. 188, 198-99 (1939); B-163375, Sept. 2,
1971. Section 902(c) of HAVA and the preexisting recovery authorities can
be construed to coexist with respect to HAVA payments because section
902(c) does not state expressly that the Comptroller General's
determination is the exclusive procedure by which funds may be recovered.
We read section 902(c) to apply only to Comptroller General audits
conducted under 902(b), not to other audits conducted under section 902(b)
or other authorities.
Section 902(c) provides notice to recipients that they must repay funds to
the granting agency "if" the Comptroller makes a determination based on an
audit under section 902(b). The word "if" connotes only a condition
precedent to a recipient's requirement to repay HAVA funds if the
Comptroller General conducts an audit and makes a determination that a
recipient of HAVA funds is not in compliance with program requirements or
the recipient received an excess payment. It is not an instruction to the
Comptroller General to review each audit under section 902(b), but rather,
prescribes the results of audits the Comptroller General conducts. The
framework Congress established for audits under section 902(b) suggests
only that Congress sought to ensure opportunities for the Comptroller
General to make findings under the criteria set out in section 902(c).
Agencies have independent authority to take corrective action related to
funds paid under HAVA when the agency determines that a recipient has
received an excess payment or has improperly used funds.
Interpreting section 902 as compatible with, rather than superseding,
preexisting authority for administratively adjudicating allowable grant
costs avoids potential constitutional problems. See Bowsher v. Synar, 478
U.S. 714 (1986). If we were to read section 902(c) to require a
Comptroller General determination before an agency could take corrective
action, such an interpretation would raise significant constitutional
concerns. Congress was aware when enacting section 902(c) that GAO is an
auditing and investigating organization within the legislative branch. 31
U.S.C. sections 712-717. Indeed, as noted above, we have found no evidence
that Congress intended the Comptroller General to effectively assume the
programmatic responsibility of implementing HAVA that would be inherent in
assigning final decision-making authority to him. Accordingly, and
consistent with longstanding practice of construing statutes to avoid
constitutional infirmities, see United States v. Morrison, 529 U.S. 598,
607 (2000) (analysis of a congressional enactment begins with the
presumption of constitutionality), we construe section 902(c) as
applicable only to audits that GAO conducts.
If GAO were to determine as part of any GAO audit that a recipient of HAVA
funds is not in compliance with program requirements or that the recipient
received an excess payment, then GAO would make appropriate
recommendations to the paying agency. Each paying agency must determine
the liability of the recipient with respect to the HAVA funds and take any
necessary corrective action available to the agency under law.
Sincerely yours,
/signed/
Anthony H. Gamboa
General Counsel
cc: Jeanette M. Franzel, Director
Financial Management and Assurance
DIGEST
The Help America Vote Act of 2002 provides that if the Comptroller General
determines as a result of an audit that a fund recipient is not compliant
with program requirements, or that an excess payment has been made, the
recipient must return a certain portion of the payment. However, the
Comptroller General need not make such a determination before a paying
agency may audit and take corrective action on questioned costs. This
provision of the Act does not supersede the independent statutory
authority of agencies to audit and take corrective action on the use of
federal funds. If the Comptroller General were to make a determination
under the Act as a result of any audit he conducts, he will make an
appropriate recommendation for the agency to determine liability and to
take corrective action.
------------------------
[1] GSA paid the funds to California pursuant to section 101 of HAVA,
codified at 42 U.S.C. sect. 15301. Congress appropriated the funds to
GSA for such payments on February 20, 2003. Miscellaneous Appropriations
Act, 2003, Pub. L. No. 108-7, div. N, 117 Stat. 537 (Feb. 20, 2003). Such
payments are to be deposited into an election fund established and
maintained by California. 42 U.S.C. sect. 15304(d). These funds remain
available indefinitely, except for appropriated funds that remain
unobligated as of September 1, 2003. Id. at sect. 15304(c)(2)(B). The
Commission is deemed to be the office making the grant or payments for
purposes of section 902 of HAVA. 42 U.S.C. sect. 15542(b)(4).
[2] GSA informed California that these include the Cash Management
Improvement Act, 41 C.F.R. subtitle C (2005) (GSA's "common rule" for
uniform administrative requirements for grants and cooperative agreements
with states and local governments), OMB Circular Nos. A-87, A-102, and
A-133, and California procurement regulations. U.S. Election Assistance
Commission, Office of Inspector General, Final Report: Audit of
Expenditures of Help America Vote Act Funds by the California Office of
the Secretary of State, Rep. No. E-HP-CA-01-06 (Washington, D.C.: December
2005).
[3] Under HAVA, the Secretary of Health and Human Services (HHS) is
required to make payments to each eligible state and local government unit
to ensure voting access for persons with disabilities. Pub. L. No.
107-252, sect. 261, 116 Stat. 1666, 1698 (Oct. 29, 2002) (codified at 42
U.S.C. sect. 15421).