TITLE: B-306975, National Archives and Records Administration Records Center Revolving Fund--Advance Payments, February 27, 2006
BNUMBER: B-306975
DATE: February 27, 2006
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B-306975, National Archives and Records Administration Records Center Revolving Fund--Advance Payments, February 27, 2006

   Decision

   Matter of: National Archives and Records Administration Records Center
   Revolving Fund--Advance Payments

   File: B-306975

   Date:  February 27, 2006

   DIGEST

   1. The Treasury and General Government Appropriations Act, 2000, Pub. L.
   No. 106-58, Title IV, National Archives and Records Administration (NARA),
   Revolving Fund, 113 Stat. 430, 460--61 (Sept. 29, 1999), authorizes
   agencies to make advance payments to the NARA Records Center Revolving
   Fund for the monthly charges for storage and related services for
   temporary and pre-archival records.

   2. NARA proposes to bill its customers at the beginning of each month
   based on its estimate of services it will provide that month and to adjust
   the next month's bill to reflect actual costs of services rendered. GAO
   has no objection to this billing method, except to note that if a customer
   advances fiscal year funds for September's estimated costs, NARA may not
   credit excess amounts in adjusting October's bill. NARA must return the
   excess to the customers. These funds would not be available for obligation
   of the next fiscal year commencing October 1. Likewise, if a customer
   agency owes more than the amount advanced in September, the customer must
   cover the underpayment from the previous fiscal year's funds.

   DECISION

   The National Archives and Records Administration (NARA) has requested a
   decision on whether its customer agencies' appropriations are available to
   pay, in advance, monthly charges for storage services for temporary and
   pre-archival records. NARA also asks that if we find that advance payments
   are authorized, whether NARA may base the charges on monthly projections
   and then adjust agencies' bills the following month to reflect the actual
   amount of services provided. Letter from Michael Whitacre, Director,
   Revolving Fund Finance Staff, NARA, to Anthony H. Gamboa, General Counsel,
   GAO, faxed to GAO on November 22, 2005. (Whitacre Letter). As we explain
   below, the Treasury and General Government Appropriations Act, 2000, Pub.
   L. No. 106-58, Title IV, National Archives and Records Administration,
   Revolving Fund, 113 Stat. 430, 460--61 (Sept. 29, 1999), provides
   authority for agencies to use appropriated funds for advance payments to
   NARA for providing the storage services in question. We have no objection
   to the method NARA proposes for assessing the charges.

   BACKGROUND

   NARA stores temporary and pre-archival records that belong to it and other
   federal agencies in its Records Center Program Facilities. Other federal
   agencies may enter into agreements with NARA to transfer and store records
   at NARA records centers. See 44 U.S.C. sect. 3103; 36 C.F.R.
   sections1220.38(a), 1228.156(a). See generally

   44 U.S.C. sections 2901--2909 (Records Management).

   The Treasury and General Appropriations Act, 2000, established the
   "Records Center Revolving Fund" (revolving fund) to pay for expenses and
   equipment necessary to provide storage and related services for temporary
   and pre-archival records of federal agencies. Pub. L. No. 106--58, Title
   IV, National Archives and Records Administration, Revolving Fund, 113
   Stat. 430, 460-61 (Sept. 29, 1999).

   Congress established the revolving fund to make NARA's record center
   storage operations completely self-sufficient, without the necessity for
   additional appropriations. S. Rep. No. 106-87, at 68 (1999). As prescribed
   in the revolving fund's authorizing legislation, NARA charges other
   agencies user fees "as payment for providing personnel, storage,
   materials, supplies, equipment, and services . . . ." Pub. L. No. 106-58,
   113 Stat. 461. NARA is required to charge for services at rates that "will
   return in full the expenses of operation, including reserves for accrued
   annual leave, worker's compensation, depreciation of capitalized equipment
   and shelving, and amortization of information technology software and
   systems." Id.

   In past years, NARA's practice has been to bill its revolving fund
   customers after the end of the month in which it provides the services.
   Whitacre Letter. NARA did this because the revolving fund's billing system
   is unable to generate the actual amount due for services until after the
   close of the month in which they are delivered. Id. However, to avoid
   potential cash flow problems, NARA intends to change its practice to
   require revolving fund customers to pay in advance for fund services. Id.

   NARA proposes to bill its revolving fund customers for services at the
   beginning of each month. NARA would base the amounts billed on estimates
   of the amount of services provided. NARA proposes to base its estimates on
   the average of the previous 11 months' services except in specific
   circumstances that would dictate that a different amount be used. Whitacre
   Letter. Then, in the following month, NARA would adjust the customer's
   bill, crediting the customer with the amount of  the difference between
   the amount advanced for the previous month and the actual amount of
   services received that month, or adding an amount if the actual cost of
   services exceeded the amount advanced. Id.

   A NARA customer has expressed concerns over whether agency appropriations
   are available to pay for record storage and related services in advance,
   before the actual amount due the revolving fund is known. Id. Also, NARA
   is itself a revolving fund customer; the Records Center provides storage
   services to NARA programs that are funded by appropriations that are
   separate from the revolving fund. NARA has requested this decision so that
   it may properly address customer concerns and so it may know whether it
   may pay in advance into the revolving fund from its own appropriations for
   records storage services.

   ANALYSIS

   As a general rule, agencies are prohibited from making advance payments
   for goods and services unless authorized by a specific appropriation or
   other law. 31 U.S.C. sect. 3324. The statute establishing the revolving
   fund, Public Law 106-58, specifically authorizes agencies to make advance
   payments to the revolving fund for services related to the storage of
   temporary and pre-archival records. Referring to agency payments to the
   revolving fund for services, it states, "Such payments may be made in
   advance or by way of reimbursement." Pub. L. No. 106-58, 113 Stat. 461.
   Under the so-called "plain meaning" rule of statutory interpretation,
   where the language of a statute is unambiguous, its plain meaning
   controls. Connecticut National Bank v. Germain, 503 U.S. 249, 253-254
   (1992). The language of the revolving fund's authorizing legislation is
   very clear that "payments may be made in advance . . . ." Id. Given this
   clear statutory statement of authority, we conclude that NARA's customers
   may use their appropriated funds to make advance payments into the Records
   Center Revolving Fund for temporary and pre-archival storage and related
   services.

   We generally have no objection to NARA's proposed method for accounting
   for its advance billing--charging monthly usage averages and then
   adjusting accounts when the actual amounts are determined. See generally
   72 Comp. Gen. 120, 121--122 (1993) (under Economy Act transaction,
   ordering agency may advance funds to performing agency for services; the
   performing agency must return excess advanced funds to the ordering agency
   once actual costs of services are determined).

   Of course, customer funds derived from fiscal (or fixed) year
   appropriations advanced for September services that exceed that month's
   actual costs may not be used to reduce the agency's October estimated
   payment. When an agency withdraws funds from its appropriation and makes
   them available for credit to another appropriation, that amount is
   available for obligation only for needs of the agency arising in the same
   time period as the appropriation from which the funds were withdrawn. 31
   U.S.C. sect. 1532.

   Our decision in B-288142, Sept. 6, 2001, applying the provisions of 31
   U.S.C. sect. 1532, supports this result. In that case, customer agencies
   made estimated advance payments out of fiscal year appropriations for
   library information support services. The agencies made the payments into
   the Federal Library and Information Network (FEDLINK) revolving fund,
   which the Library of Congress administers. The Library requested our
   decision on whether it could retain in the revolving fund, unexpended
   balances of customer funds advanced to FEDLINK to cover the cost of
   customer orders in fiscal years after the fiscal year of the customer's
   appropriation. We held that the Library could not retain such funds
   because to do so "would violate section 1532 as well as the time
   constraints legislatively imposed on the appropriation from which the
   advance was made." Id.

   Thus, unless there is some other authority to the contrary, and we are
   aware of no such authority, fiscal year funds advanced to the revolving
   fund in September are available only for storage and related service
   expenses incurred by the end of the fiscal year ending in September.
   Therefore, advanced funds are not available for expenses attributable in
   October to the following fiscal year, and they must be returned to the
   customer agency. Likewise, if a customer owes more, the customer must
   cover the underpayment from the previous fiscal year's funds.

   CONCLUSION

   Under the express provisions of the Treasury and General Government
   Appropriations Act, 2000, agency appropriations are available to make
   advance payments for monthly charges for storage and related services for
   temporary and pre-archival records. We have no objection to the method
   NARA proposes for assessing charges except to note that if a customer
   advances fiscal year funds for September, NARA may not credit excess
   amounts in adjusting October's bill; NARA must return the excess to the
   customer agency. These funds would not be available for obligations of the
   next fiscal year commencing October 1. In a like manner, if the funds
   advanced do not cover all the costs for September, the customer must cover
   the underpayment from the previous fiscal year's funds.

   /signed/

   Anthony H. Gamboa

   General Counsel