TITLE: B-310108, Forest Service--Apportionment Limitation for Aviation Resources, February 6, 2008
BNUMBER: B-310108
DATE: February 6, 2008
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B-310108, Forest Service--Apportionment Limitation for Aviation Resources, February 6, 2008

   Decision

   Matter of: Forest Service--Apportionment Limitation for Aviation Resources

   File: B-310108

   Date:  February 6, 2008

   DIGEST

   The Forest Service violated the Antideficiency Act, 31 U.S.C. sect. 1517,
   when it exceeded an apportionment limitation of $100 million for aviation
   resources to be used for forest fire suppression activities. The emergency
   exception to the Antideficiency Act is not applicable because the Forest
   Service had received an appropriation that was sufficient for these
   activities; the need for emergency funding was based on the apportionment
   limitation, which was well below the amount appropriated.

   DECISION

   The Forest Service has requested our decision regarding its obligation of
   fiscal year 2006 funds for wildland fire suppression activities. Letter
   from Hank Kashdan, Deputy Chief for Business Operations, Forest Service,
   U.S. Department of Agriculture, to David M. Walker, Comptroller General of
   the United States, Aug. 20, 2007 (Request Letter). This decision addresses
   whether the Forest Service violated the Antideficiency Act when it
   incurred obligations for the acquisition of aviation resources in excess
   of a $100 million limitation contained in an apportionment schedule
   footnote.

   Our practice when rendering decisions is to obtain a factual record from
   the relevant federal agency and, as appropriate, other interested parties,
   and to elicit the legal position, if any, of the agency and other
   interested parties on the subject matter of the request. GAO, Procedures
   and Practices for Legal Decisions and Opinions, GAO-06-1064SP (Washington,
   D.C.: Sept. 2006), available at www.gao.gov/legal/resources.html. In this
   instance, the request letter included, as an attachment, a May 2007
   memorandum containing the views of the Office of the General Counsel, U.S.
   Department of Agriculture (USDA). Memorandum from L. Benjamin Young, Jr.,
   Assistant General Counsel, General Law Division, to J. Lenise Lago, Acting
   Director, Program and Budget Analysis, Forest Service (USDA Legal
   Opinion). We obtained relevant documents from the Forest Service,
   including an August 25, 2006, request for a legal opinion from USDA OGC
   (Request for USDA Legal Opinion) and the apportionment and reapportionment
   schedules for the wildland fire management account for fiscal year 2006.
   In addition, we engaged in a telephone conversation with Forest Service
   officials regarding the apportionment footnote and the agency's
   obligations of funds for aviation resources. Telephone conversation
   between Lenise Lago, Director, Program and Budget Analysis, Forest
   Service; Ron Ketter, Director, Strategic Planning and Performance
   Accountability, Forest Service; and Richard Burkard, Senior Attorney, GAO,
   Sept. 13, 2007 (Telephone conversation of September 13). We also spoke
   with OMB staff about the request.

   As explained below, the Forest Service violated the Antideficiency Act
   when it exceeded the apportionment limitation. The Forest Service did not
   avail itself of the applicable expedited process for seeking "emergency"
   reapportionments. However, once the Forest Service was aware of the excess
   obligation, it acted quickly to correct the violation by promptly seeking
   and receiving an increased apportionment.

   BACKGROUND

   Under Title III of the Department of the Interior, Environment, and
   Related Agencies Appropriations Act, 2006, Pub. L. No. 109-54, 199 Stat.
   499 (Aug. 2, 2005), the Forest Service received an appropriation of
   $1,779,395,000, to remain available until expended, for wildland fire
   management. The appropriation provided funds for a number of activities
   including emergency fire suppression on or adjacent to National Forest
   System lands. The law did not specifically limit Forest Service spending
   on the acquisition of aviation resources for wildland fire suppression.
   USDA Legal Opinion, at 2.

   On September 30, 2005, the Office of Management and Budget (OMB)
   apportioned the wildland fire management funds among the four quarters of
   fiscal year 2006, ranging from $410 million to approximately $435 million
   per quarter, with an additional $500 million apportioned for the fourth
   quarter. SF 132 Apportionment and Reapportionment Schedule, Sept. 30,
   2005. The apportionment schedule contained a footnote, inserted next to
   each quarterly dollar amount, stating that "[n]ot more than $100,000,000
   of suppression funds is available for acquisition of aviation resources .
   . . ." Id.  The footnote also contained a minimum funding amount "for all
   quarters" for preparedness and a separate amount for regular suppression
   operations. While the schedule on its face is not entirely clear, the
   Forest Service understood the $100 million limitation as applying to the
   four quarters combined (that is, to the year), not each quarter.

   Forest Service officials considered $100 million to be insufficient to
   acquire the aviation resources necessary for the fiscal year 2006 fire
   season. Request Letter, at 2. Thus, in October 2005, the agency submitted
   a briefing paper and a request for reapportionment to OMB, stating among
   other things, that by limiting aviation expenditures to $100 million, OMB
   would reduce fire suppression capability by 50 to 75 percent. See USDA
   Legal Opinion, at 2. The Forest Service states that in fiscal year 2005,
   for example, it spent $180 million on such acquisitions. Id.  In December
   2005, OMB acted on the request by revising the quarterly apportionments,
   but retained the $100 million limitation for acquisition of aviation
   resources. SF 132 Apportionment and Reapportionment Schedule, Dec. 14,
   2005. After that, no changes to the apportionment schedule were requested
   or made until June 2006.

   Beginning in June 2006, there were a series of reapportionments of
   wildland fire management funds, but it does not appear that the two
   agencies directly addressed the funding for aviation resources until after
   the Forest Service had already overobligated the amounts that OMB had
   apportioned for that purpose.[1] On June 9, 2006, the Forest Service
   submitted a request for reapportionment seeking an increase in the third
   quarter overall funding level. See SF 132 Apportionment and
   Reapportionment Schedule, June 15, 2006. In the "Agency Request" column of
   the schedule submitted by the Forest Service, the Forest Service entered
   new dollar amounts for the third and fourth quarters. Next to the dollar
   amount for each quarter, the Forest Service request included a footnote,
   the text of which contained the $100 million limitation for aviation
   resources.[2] On June 15, the OMB approving official signed the new
   apportionment schedule, inserting a new, but different dollar amount for
   the third quarter in the "Action by OMB" column. Id. However, the "Action
   by OMB" column did not include a footnote containing the aviation
   resources limitation. Id. OMB offered no explanation for eliminating the
   footnote. Nevertheless, as of June 15, OMB, apparently on its own
   initiative, had removed any limitation on the amount of funds available
   for the acquisition of aviation resources. The Forest Service states that
   by the end of June, it had obligated $81 million on aviation resources for
   the fiscal year. Request for USDA Legal Opinion, at 1.

   On June 27, the Forest Service submitted another request for
   reapportionment seeking an increase in the overall funding level for the
   fourth quarter. See SF 132 Apportionment and Reapportionment Schedule,
   July 21, 2006. Consistent with the June 15 "Action by OMB" column of the
   schedule, the Forest Service request reflected that the footnote
   limitation had been removed and did not request reinstatement of the
   limitation. Id. Nevertheless, on July 21, OMB reinserted the limitation on
   the acquisition of aviation resources by adding a footnote in the "Action
   by OMB" column, next to the fourth quarter apportionment amount, providing
   that "Not more than $100,000,000 of suppression funds in all quarters is
   available for acquisition of aviation resources." Id. OMB offered no
   explanation for reinserting the footnote.

   The Forest Service states that July was a catastrophic month for wildland
   fire activity, and the Forest Service fire organization moved to a
   preparedness level 5 for the first time since 2003. Request for USDA Legal
   Opinion, at 1. Fire suppression expenditures, including those for aviation
   resources, increased significantly due to this increased fire activity,
   and by the end of July, the Forest Service had obligated approximately
   $118 million for aviation resources. Id. The Forest Service estimates that
   it exceeded the $100 million limitation set out on the July 21
   apportionment schedule sometime between July 25 and July 31. Telephone
   conversation of September 13.

   On August 3, having exceeded the $100 million limitation, the Forest
   Service submitted a request for reapportionment to the USDA Office of
   Budget and Program Analysis (OBPA), requesting an increase in the aviation
   resource limitation. Request for USDA Legal Opinion, at 1. On August 4,
   the Forest Service and OBPA participated in a conference call with OMB to
   request a reapportionment, acknowledging that the Forest Service had
   already exceeded the $100 million limitation for aviation resources. Id.
   On August 4, OMB increased the limitation to $175 million. SF 132
   Apportionment and Reapportionment Schedule, Aug. 4, 2006. OMB subsequently
   increased this limitation to $250 million and ultimately to $270 million
   through additional reapportionments. SF 132 Apportionment and
   Reapportionment Schedules, Aug. 24, 2006, Sept. 29, 2006.

   DISCUSSION

   The Forest Service asks whether it violated the Antideficiency Act when it
   obligated funds in excess of the $100 million that OMB had apportioned on
   July 21 for aviation resources as set forth in the apportionment schedule
   footnote. The agency states that the footnotes in its apportionment
   schedules cover so many activities that at some point the "logistics of
   requesting additional apportionment or revision of the footnotes, combined
   with the highly fluid and volatile nature of conducting emergency
   operations dictates that non-compliance is highly likely to occur."
   Request Letter, at 6. The Forest Service argues that its actions should
   not be considered a violation because they were necessary to support
   emergency activities. It questions whether noncompliance with the
   footnote's $100 million limitation in such circumstances constitutes a
   violation of the Act.

   Under the Antideficiency Act, the President is required to apportion funds
   to executive branch agencies. 31 U.S.C. sections 1512, 1513. The President
   delegated this authority to the Bureau of the Budget, now OMB. Exec. Order
   No. 6166, sect. 16 (June 10, 1933), at 5 U.S.C. sect. 901 note. An agency
   may not obligate or expend funds exceeding an apportionment or any other
   subdivision of funds as specified in an agency's regulations. 31 U.S.C.
   sect. 1517(a); B-305484, June 2, 2006; OMB Cir. No. A-11, at sect. 145.
   Generally, apportionments control the rate of spending during the year by
   limiting the amount of funds that can be obligated--typically by time
   periods, activities, projects, objects, or a combination thereof. OMB Cir.
   No. A-11, at sect. 120.8. An appropriation for an indefinite period must
   be apportioned to achieve the most effective and economical use. 31 U.S.C.
   sect. 1512(a).

   Here, the Forest Service acknowledges that OMB had limited the
   apportionment for aviation resources to $100 million,[3] and that by the
   end of July, it had exceeded that limitation. Request Letter, at 2. In
   October 2005, the Forest Service had advised OMB that $100 million could
   be insufficient. Id. The record submitted to us by the Forest Service does
   not indicate why OMB, in light of the Forest Service's assertion, chose to
   retain this limitation. While the Forest Service complains about the
   difficulty of adhering to restrictions contained in numerous and
   prescriptive footnotes to the apportionment schedule, the agency was aware
   that the limitation was in effect on July 21. The agency did not request a
   reapportionment in July prior to obligating funds in excess of the
   apportionment; rather, it waited until August 4, after it knew that it had
   exceeded the limitation. OMB approved the reapportionment on that same
   day. However, at that point, the violation had already occurred, and the
   fact that funds were subsequently reapportioned to cover the obligations
   does not alter this conclusion. See B-253164, Aug. 23, 1993 (obligation of
   funds exceeding an apportionment limitation violated the Antideficiency
   Act even though the agency had submitted a reapportionment request where
   the obligation occurred before OMB signed the reapportionment request).

   The Forest Service argues that its failure to adhere to the apportionment
   limitation should not be considered a violation of the Antideficiency Act
   because of the emergency nature of the wildfire suppression activities.
   The Forest Service, in support of its argument, points to the "emergency"
   provisions of the Antideficiency Act, 31 U.S.C. sections 1342, 1515.
   Section 1342 addresses circumstances where an emergency necessitates the
   acceptance of services resulting in an obligation of funds in excess of
   the amount authorized by law. The second provision, 31 U.S.C. sect. 1515,
   applies where OMB apportions an amount that would indicate the necessity
   for a deficiency or supplemental appropriation.

   Neither section 1342 nor section 1515 excuses the violation here.
   Importantly, the violation was based on the statutory prohibition against
   obligating funds in excess of an apportionment, an amount set by OMB
   through an administrative process set forth in Circular No. A-11. OMB Cir.
   No. A-11, at sect. 120. Had Congress not appropriated sufficient funds to
   allow the agency to respond to the emergency, sections 1342 and 1515 would
   be quite relevant, but that is not the case here. Instead, the aviation
   resource limitation, not the overall appropriation level, was at issue and
   was well below the amount appropriated. Accordingly, the exception in the
   Antideficiency Act for incurring obligations in excess of appropriated
   amounts to address emergencies does not address the circumstances here.
   [4] Rather, the Forest Service had an administrative solution available to
   it through OMB: "When emergencies, such as those involving the safety of
   human life or the protection of property, require immediate action, you
   may request, and OMB may approve, a reapportionment by telephone. As soon
   thereafter as it is practical, submit apportionment schedules reflecting
   such action." [5] OMB Cir. No. A-11, at sect. 120.37.

   The Forest Service did not invoke this emergency provision and obligated
   funds in excess of the limitation. It then requested a reapportionment.
   The Forest Service does not explain why it failed to take advantage of
   OMB's expedited emergency procedure when, in July, the Forest Service
   moved to preparedness level 5 for the first time since 2003. Fighting
   fires of course requires prompt action, and protecting life and property
   is of paramount importance. As the Forest Service points out, wildfire
   suppression activities are fought on an interagency basis and teams
   consist of employees of the Forest Service, Department of Interior, and
   state forestry agencies. Decisions on the use of aviation resources and
   which fires should be suppressed are made by an interagency team, and the
   Forest Service states that it does not have exclusive control over these
   spending decisions. Nevertheless, it is incumbent on the Forest Service
   officials with fund control responsibilities, who should be aware of the
   limitation and how close the agency is to exceeding that limitation, to
   attempt to utilize OMB's procedures by contacting OMB by phone before the
   agency exceeds the limitation rather than afterwards.

   While we believe that had the Forest Service availed itself of OMB's
   expedited emergency procedure it may well have avoided its Antideficiency
   Act violation, the record here suggests that there may have been some
   confusion in June and part of July about the status of the limitation. The
   apportionment schedules indicate that in June, for reasons unexplained,
   OMB unilaterally removed the limitation that had been a point of
   contention from the beginning of the fiscal year, only to reinstate it on
   July 21 for the last quarter of the year, just days before the Forest
   Service ultimately exceeded it. Nevertheless, the Forest Service is
   presumed to have knowledge of both the apportionment limitation and its
   remaining unobligated balance, and it was expected to take action as
   necessary to avoid noncompliance.[6]

   CONCLUSION

   The Forest Service violated the Antideficiency Act, 31 U.S.C. sect. 1517,
   when it exceeded the apportionment limitation by obligating in excess of
   $100 million for aviation resources for fiscal year 2006 forest fire
   suppression activities. The Antideficiency Act requires that if an officer
   or employee of an executive agency violates the Act, the agency head
   "shall report immediately to the President and Congress all relevant facts
   and a statement of actions taken." 31 U.S.C. sect. 1351. We recognize that
   the agency immediately took action to address the issue by seeking and
   obtaining a reapportionment to cover its obligations and that the
   necessary adjustments were made in the same fiscal year. Nevertheless, the
   Forest Service violated the Act and should formally report the violation
   to the President and to Congress.

   Gary L. Kepplinger
   General Counsel

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

   [1] Apportionment and reapportionment requests are submitted by agencies
   to OMB using the SF 132 Apportionment and Reapportionment Schedule. This
   schedule contains an "Agency Request" column and an "Action by OMB"
   column. Agencies complete the "Agency Request" column by entering the
   dollar amount they are requesting based on their financial plan, along
   with supporting data. OMB Circular No. A-11, Preparation, Submission, and
   Execution of the Budget, pt. 4, sections 120.22, 120.23, 120.25, and
   120.27 (July 2, 2007). OMB then enters in the "Action by OMB" column the
   amount requested if it is approving the request or a different amount if
   it is not. OMB indicates its approval of apportioned amounts in the
   "Action by OMB" column of an apportionment by signing the "Apportioned"
   line at the bottom of the schedule. OMB Cir. No. A-11, at sect.120.36.

   [2] The text of the footnote was modified, presumably by the Forest
   Service, to remove a reporting requirement, not at issue here, which OMB
   had imposed as a condition for the release of funds for aviation
   resources.

   [3] While the Forest Service questions the use of a footnote to impose the
   limitation, we see no basis to object to the use of a footnote to impose
   an amount restriction on an activity. Although not in effect at the time
   of the activities at issue here, the 2007 revision to the circular
   specifically clarified that authorizing or incurring an obligation
   exceeding an incorporated apportionment footnote is a violation of the
   Antideficiency Act. OMB Cir. No. A-11, at sect. 145.2.

   [4] Section 1515 is not applicable for the same reason. It authorizes OMB
   to increase an apportionment to a level that would indicate the need for a
   deficiency or supplemental appropriation under limited circumstances,
   including emergencies. For example, an agency may seek an increase in its
   first quarter apportionment that, if maintained for each quarter, would
   result in an overobligation; however, this result would be avoided if the
   increase were offset by apportionment reductions in future quarters or
   through subsequent appropriations. It does not authorize agencies to incur
   obligations in excess of appropriations or apportionments. B-167034, Sept.
   1, 1976.

   [5] OMB staff confirmed that use of the expedited procedures is
   appropriate for handling a request for reapportionment of funds to respond
   to fire emergencies.

   [6] OMB Circular A-11 provides that agencies should review their fund
   control regulations periodically to determine whether improvements should
   be made and, at a minimum, whenever staff from the agency has violated the
   Antideficiency Act. OMB Cir. No. A-11, at sect. 150.7.