United States General Accounting Office

GAO Report to the Chairman, Committee on

the Budget, House of Representatives

December 1997 FEDERAL USER FEES

Budgetary Treatment,

Status, and Emerging

Management Issues

GAO/AIMD-98-11

GAO United States

General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-275109 

December 19, 1997

The Honorable John R. Kasich

Chairman

Committee on the Budget

House of Representatives

Dear Mr. Chairman:

Federal user fees1

—such as agricultural commodity grading fees,

trademark registration fees, and park entrance fees—provided the United

States government with $196.4 billion in revenues in fiscal year 1996.2

 This

total amounted to 12 percent of all federal revenues collected in fiscal year

1996 and was more than twice the amount collected from excise taxes,

estate and gift taxes, and customs duties combined. User fee collections

have grown steadily since the early 1980s and have played several roles in

the federal budget. They have financed new spending by replacing or

supplementing agency appropriations capped by deficit reduction

agreements. They also have fostered more business-like practices in the

government by making some agencies3

 wholly reliant on fees to finance

their operations. In other cases, user fees have provided revenues for

deficit reduction.

If user fee collections continue to grow, how the Congress oversees and

federal agencies manage these fees will continue to increase in

1

The Office of Management and Budget (OMB) defines user fees as “a general term referring to fees

charged to users directly availing themselves of, or subject to, a government service, program, or

activity, in order to cover the government’s costs.” OMB’s October revisions to OMB Circular A-11 for

the fiscal year 1999 budget expanded and clarified the term user fee. The revised definition excludes

fees deposited in the general fund of the Treasury. OMB’s revised definition is comparable to how fees

are defined in this report, except for voluntary payments to social insurance programs, which OMB

classified as user fees and we did not. The Federal Accounting Standards Advisory Board (FASAB)

uses the term “exchange revenue” which it defines as “inflows of resources to a Government entity

that the entity has earned. They arise from exchange transactions, which occur when each party to the

transaction sacrifices value and receives value in return.” Both OMB and FASAB include regulatory

fees in their definitions. Exchange revenue is reported on an accrual basis. All amounts included in

this report are shown on a budgetary or cash basis. See footnote 2 for a fuller explanation of OMB’s

definition of offseting collections from the public.

2

Total federal user fees is the amount shown in the Budget of the United States Government, Fiscal

Year 1998—Analytical Perspectives for offsetting collections from the public. OMB included the

following in this total: medicare premiums, Outer Continental Shelf payments, naval petroleum reserve

lease receipts, spectrum auction proceeds, sale of property and services, interest income, deposit

insurance funds, loan guaranty and other insurance premiums, loan repayments, both distributed and

undistributed offsetting receipts, and all offsetting collections to appropriation or fund accounts.

3

As used in this report, the term agency refers to the grouping of activities shown as bureaus or listed

as other independent agencies in the President’s budget request to the Congress. See appendix I, Scope

and Methodology, for more discussion on the use of this term.

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importance. You asked us to identify agencies that rely on fees for a

significant portion of their budget. We identified 27 agencies where fees

from the public represented 20 percent or more of their funding averaged

over fiscal years 1991 through 1996. For these agencies, you asked us to

(1) identify changes in agency reliance on user fees since passage of the

Budget Enforcement Act4

 (BEA) of 1990 and (2) describe the ways user fees

are structured in the budget, including what budgetary controls govern the

availability and use of these fees and how they are treated under BEA.

Based on these findings, you also asked us to identify issues for

consideration in the future design and management of user fees.

Results in Brief Since the 1990 enactment of BEA, the 27 agencies in our review have

increased or maintained their reliance on user fees as a source of funding.

Several of the regulatory agencies we surveyed were given authority to

substantially increase user fee collections and to use these fees for

program purposes. For example, in fiscal year 1991, the Federal

Communications Commission (FCC) received less than 1 percent of its new

funding from user fees. However, by fiscal year 1996 user fees made up

73 percent of the agency’s operating budget. For those agencies that relied

at least in part on general fund appropriations in fiscal year 1991, new or

existing fee authority was used to maintain rather than supplement agency

funding. Only the Immigration and Naturalization Service (INS) received

increases in general fund appropriations and in fee collections, some of

which was the result of new authority.

Although federal agencies often collect user fees for similar purposes, not

all user fees are treated alike in the federal budget. Some user charges

must be deposited in the general fund of the U.S. Treasury, while others

are required by law to provide funding for specific purposes. Yet, even

when fees are dedicated to the agency or activities that generated the fee,

there are differences in when and how the fees are made available to the

agency and in how much flexibility agencies have in using the fee revenue.

The attempt to distinguish between fees collected for the government’s

business-type activities from those derived from the government’s power

to tax was always problematic. How fees are categorized has become

4

BEA divides federal spending into (1) discretionary spending controlled through annual appropriation

acts, which is further subdivided and capped for fiscal years 1998 through 2000 and (2) direct, or

mandatory, spending controlled by permanent law. BEA constrains discretionary spending through

fixed dollar amounts, called spending limits or caps, on total budget authority and outlays for each

fiscal year through 2002. Mandatory spending and receipts are constrained through a pay-as-you-go

(PAYGO) requirement that the cumulative effects of legislation in this area must not increase the

deficit. See the glossary for more information on BEA. Receipts are normally scored as PAYGO under

BEA requirements unless the law directs that they be used to offset discretionary spending.

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increasingly important by the fact that under BEA scoring rules, some fees

are netted against their accounts’ budget authority and outlay spending. If

offset, growth in new and existing fees does not add to the amount of

spending that is scored under BEA discretionary spending limits, but frees

up discretionary resources for other purposes. Most new user fees enacted

between fiscal years 1991 and 1996 were authorized to offset discretionary

spending.

The disparate treatment of fees—particularly those associated with

discretionary spending—raises issues for congressional control, agency

management, and competition for limited federal resources. In shifting to a

more fee-reliant government, inconsistencies in budgetary treatment of

fees with similar characteristics are likely to increase. Unlike agencies that

rely primarily on appropriated funds from general revenues, both the

Congress and fee-reliant agencies face additional policy and management

issues such as how to (1) meet the needs for accountability to both the

Congress and fee payers, including agreement on priorities and the

appropriate assessment of fees and (2) define the relationship between

fee-financed and appropriated activities, particularly if resource disparities

between the two groups increase.

Background Given the scope and variety of federal activities, the federal budget is

inevitably complex. This is particularly seen in the federal budgetary

treatment of receipts. The 1967 President’s Commission on Budget

Concepts recommended a dual system of accounting for federal receipts.

The Commission recommended that receipts from activities which were

essentially governmental in nature, including regulation and general

taxation, be reported as receipts, and that receipts from business-type

activities “offset to the expenditures to which they relate.” The

Commission recommended this system so that budget totals could present

a clear picture of the extent of governmental activity.

In practice, however, the distinction was never sharp as evidenced by the

fact that revenue from business-type transactions, termed “offsetting

collections,” are not made available to agencies in the same way.

• Collections credited to appropriation or fund accounts go directly to

expenditure accounts. Here, legislation requires that collections be

credited to an appropriation or fund account and offset spending in the

account without further legislative action. Collections are typically

credited to revolving funds when they are the main source of financing

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and are permanently appropriated to fund business-like activities, such as

the Postal Service. However, offsetting collections to appropriation or

fund accounts are not limited to business-like or self-supporting activities.5

• Offsetting receipts are required by law to be deposited into receipt

accounts. Additional congressional action is necessary to move these into,

most often, special or trust fund expenditure accounts. Offsetting receipts

offset budget authority and outlays, but at a level other than at the

expenditure account. The U.S. Fish and Wildlife Service’s (USFWS)

migratory bird conservation activities are funded through appropriated

offsetting receipts.

Whatever the budget accounting, the Congress grants agencies authority to

spend offsetting collections either through permanent or current

appropriations. For example, the Congress permits some agencies to

obligate fees credited directly to appropriation or fund accounts without

further congressional action. In this report, we refer to this type of

permanent authority as spending authority. In other cases, the Congress

requires some agencies to obtain budget authority through current

appropriations before spending offsetting receipts. In this report, we refer

to this budget authority as an appropriation.

Scope and

Methodology

To better understand differences in how offsetting collections for

business-type activities are treated in the budget process and how they

have fared recently, we created a universe of 27 agencies to review that

rely on fees as a source of funds. We defined fee-reliant agencies using the

following criteria (1) fees from the public must be used to support the

agency that generated the fee, (2) services, goods, or benefits must be

provided in exchange for fees and the exchange should be closely linked

in time, and (3) new fees from the public must represent 20 percent or

more of the agency’s gross outlays less offsetting collections from federal

sources averaged over fiscal years 1991 through 1996.

To identify changes in agency reliance on user fees since the passage of

BEA, we used OMB actual year data to construct a series of analyses that

described trends in budget authority and collections for fee-reliant

agencies. Data used in this report cover fiscal years 1991 through 1996.

5

There are six types of federal budget accounts—general fund, special fund, nonrevolving trust fund,

public enterprise revolving fund, revolving trust fund, and intragovernmental fund—and all can receive

user fees from the public. All budget accounts are classified as either expenditure or receipt accounts.

Receipt accounts record income and are credited with either governmental or offsetting receipts.

Expenditure accounts may receive appropriations, can be credited directly with collections, and

record outlays. See the glossary for a further description of these accounts.

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OMB codes also allowed us to track changes in discretionary versus

mandatory classifications of agency funding and shifts from current to

permanent budget or spending authority.

To review the classification and treatment of fees in budget accounts, we

used OMB codes created for the Administration’s annual budget request.

These codes allowed us to identify (1) fees from the public and their

classification as an offsetting receipt or an offsetting collection credited to

an appropriation or fund account, (2) the type of expenditure account the

fee is credited to, and (3) the fee’s availability for obligation in a given

fiscal year.

To identify issues for consideration in the future design and management

of such fees, we conducted interviews with budget officials at CBO, OMB

and 6 of the 27 agencies we identified as fee-reliant.

This report discusses user fees in a budget context and not from a

financial management perspective. Issues related to reporting of fees in

financial statements or compliance with standards, such as OMB Circular

A-25, User Charges and the Statements of Federal Financial Accounting

Concepts and Standards No. 4, Managerial Cost Accounting Standards, are

not addressed in this report.

Details of our scope and methodology are contained in appendix I and

related GAO products are listed at the end of the report.

Our work was performed in Washington, D.C. between September 1996

and September 1997 in accordance with generally accepted government

auditing standards. We requested comments on a draft of this report from

the Director of the Office of Management and Budget or his designee. On

December 12, 1997, the Deputy Associate Director for Budget Analysis and

Systems in the Budget Review Division provided us with comments, which

are discussed in the “Agency Comments and Our Evaluation” section.

Agencies Increasingly

Rely on User Fees

The agencies we reviewed increased the overall amount of fees they

collected and these fees constituted a larger proportion of their budgets in

fiscal year 1996 than in fiscal year 1991. Fee collections among the 27

agencies we surveyed totaled $74.9 billion in fiscal year 1996. As noted

earlier, federal user fees provided the United States government with

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$196.4 billion in revenues in fiscal year 1996.6 Of this total, Congress has

earmarked $154.3 billion to the agencies that generated the fees, while

$42.1 billion was not earmarked to specific agencies but was credited to

the general fund of the Treasury. Fees collected by the 27 agencies in our

review represented 49 percent of the $154.3 billion in earmarked user fees

from the public in fiscal year 1996.

In fiscal year 1991, these 27 agencies collected $58 billion from the public

in user fees to support their activities. By fiscal year 1996, this amount had

grown to $74.9 billion. Although these figures are dominated by the Postal

Service, which accounted for $13 billion of the $17 billion increase,

collections increased 27 percent in real terms between these years.7

Between 1991 and 1996, all agencies we studied either increased or

roughly maintained the percent of their budgets funded though user fees.

During this time period, the Congress substantially increased the

fee-reliance of some regulatory agencies, such as the Federal Trade

Commission, the Federal Communications Commission, and the Securities

and Exchange Commission.

Additional user fee collections appear to have replaced appropriated funds

or to have reduced the size of decreases in appropriated funds.

Replacement of general fund appropriations can also be seen in that most

increases in user fees enacted between fiscal years 1991 and 1996 were

designated as discretionary spending for BEA purposes. The classification

of these fees and increased use of fee collections to offset discretionary

spending has lessened the impact of BEA spending limits on agencies that

collect fees.

Congress Has Increased

Several Federal Agencies’

Reliance on User Fees

As shown in table 1, 8 out of 27 agencies in our survey showed increased

reliance on user fees from fiscal year 1991 to fiscal year 1996. Of the 27

agencies in our review, 15 were fully funded, or nearly so, by fees from the

public in fiscal year 1991 and remained so through fiscal year 1996

according to budgetary data. Of the remaining 12 agencies, 6 substantially

increased their reliance on fees from fiscal years 1991 to 1996. Congress

increased fee reliance of two additional agencies, though not to the extent

of the agencies noted above. Four agencies saw the percentage of their

budgets funded through user fees remain stable between fiscal year 1991

and 1996.

6

See footnote 2 for revenue sources included in OMB’s definition of offsetting collections from the

public.

7

Adjusted based on 1996 dollars.

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Table 1: Change in Fee Reliance

Among Fee-Reliant Agencies, Fiscal

Years 1991 to 1996 Agencies Nearly or Fully Funded By Fees (15)

— Comptroller of the Currency

— Other Department of Defense Trust Funds

— Farm Credit Administration

— Federal Housing Finance Board

— Federal Retirement Thrift Investment

Board

— National Credit Union Administration

— National Technical Information Service

— Nuclear Regulatory Commission

— Office of Thrift Supervision

— Panama Canal Commission

— Patent and Trademark Office

— Postal Service

— Power Marketing Administrations

— Tennessee Valley Authoritya

— U.S. Enrichment Corporation

Agencies That Increased Fee Reliance Substantially (6)

— Animal and Plant Health Inspection

Service

— Bureau of Reclamation

— Federal Communications Commission

— Federal Trade Commission Service

— Securities and Exchange Commission

— U.S. Customs Service

Agencies That Increased Fee Reliance Slightly (2)

— Immigration and Naturalization — U.S. Mint Service

Agencies Where Fee Reliance Remained Stable (4)

— Agricultural Marketing Service

— Grain Inspection, Packers and

Stockyards Administration

— Minerals Management Service

— U.S. Fish and Wildlife Service

Note: Agencies we categorized as nearly or fully funded by fees received, on average, over

95 percent of their funding from fees from fiscal years 1991 through 1996. Agencies that

increased fee reliance substantially increased fee reliance between 21 percent and 70 percent

between these fiscal years. Agencies that increased fee reliance slightly increased fee reliance

between 8 percent and 10 percent. Agencies we categorized as where fee reliance remained

stable either increased fee reliance by less than 3 percent or decreased fee reliance by less than

3 percent.

aWe classified the Tennessee Valley Authority (TVA) as nearly or fully funded by fees because it

was funded mainly through revenues from current power operations and borrowing against future

power revenues.

Many of the 15 agencies were fully funded, or nearly so, by fees from the

public from fiscal years 1991 to 1996. The Congress authorized substantial

fee increases for two of these agencies, the Patent and Trademark Office

(PTO) and the Nuclear Regulatory Commission (NRC), in the Omnibus

Budget and Reconciliation Act of 1990 (OBRA 90). While many of these 15

agencies are primarily regulatory in nature, they also include service

agencies, such as the Department of Commerce’s National Technical

Information Service (NTIS) and the Postal Service. Several of these 15

agencies are involved in banking or credit regulation, such as the Office of

Thrift Supervision and the National Credit Union Administration, among

others. These banking and credit regulatory agencies are usually

supported through examination or assessment fees on their members.

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Six agencies in our survey substantially increased their reliance on fees

from fiscal years 1991 to 1996. Again, these agencies are primarily

regulatory. The increased reliance on user charges among these agencies

resulted mainly from legislative changes requiring increased collections

for activities such as licenses, filings, and applications.

• In fiscal year 1991, FCC received less than 1 percent of its new budget

authority from user fees. However, the Omnibus Budget and

Reconciliation Act of 1993 (OBRA 93) increased the fees that FCC charges to

cover the cost of the application and licensing of radio stations,

telecommunications equipment, and radio operators, so that by fiscal year

1996 user fees made up 71 percent of the agency’s new budget authority.8

• The fiscal year 1993 Commerce, Justice, State and the Judiciary

Appropriation Act increased filing fees charged jointly by the Department

of Justice and the Federal Trade Commission (FTC) to review proposed

mergers. These fees had originally gone into effect in fiscal year 1990 and

covered all costs associated with reviewing proposed mergers that might

reduce competition. In fiscal year 1991, FTC received 18 percent of its new

budget authority from user charges. With the 1993 fee increases, this grew

to 69 percent by fiscal year 1996.

• In fiscal year 1991, the Securities and Exchange Commission (SEC)

received 19 percent of its new budget authority from user charges.

Beginning that year, user fees became an increasingly important

component of SEC appropriations so that by fiscal year 1996 these fees

made up 70 percent of the agency’s new budget authority.

• The U.S. Customs Service doubled its reliance on fees, as new budget

authority from fees grew from 41 percent in fiscal year 1991 to 71 percent

in fiscal year 1996. This increase was largely a function of the North

American Free Trade Agreement Implementation Act of 1993, which

extended the collection of Customs Service user fees through

September 2003, increased air and sea passenger collections, and lifted air

and sea passenger country exemptions through September 1997.

• In fiscal year 1991, the Animal and Plant Health Inspection Service (APHIS)

received less than 9 percent of its new budgetary authority from user fees.

APHIS’ revenues increased primarily because four programs previously

funded with appropriations were converted to user fee funding between

fiscal years 1991 and 1993. As a result, by fiscal year 1996 APHIS received

31 percent of new budget authority from user fees.

• In addition, the Bureau of Reclamation increased its reliance on user fees

between fiscal years 1991 and 1996 due to, among other activities,

8

OBRA 93 also gave FCC authority to auction licenses to use parts of the radio spectrum. We have not

included proceeds from the spectrum auctions in our analysis since it is unlikely that the revenue from

these asset sales will become available to FCC.

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increased offsetting receipts appropriated to carry out provisions of the

Central Valley Project Improvement Act.

The Congress increased the reliance of the U.S. Mint and INS on user fees,

though not to the extent of the agencies noted above. Although the U.S.

Mint’s collections increased, the most significant change was structural. In

fiscal year 1996, the U.S. Mint was restructured to operate with a single

revolving fund. Although INS fee collections from the public more than

doubled between fiscal years 1991 and 1996, from $411 million to

$922 million, fees as a portion of INS’s new budget authority increased only

slightly due to large increases in general fund appropriations.

With four agencies—the U.S. Fish and Wildlife Service, Minerals

Management Service, Agricultural Marketing Service (AMS), the Grain

Inspection, Packers and Stockyards Administration (GIPSA)—the

percentage of their budgets funded through user fees remained stable

between fiscal years 1991 and 1996.

User Fees Increasingly

Offset Discretionary

Spending

Most new user fees enacted between fiscal years 1991 and 1996 were

designated as offsets to discretionary spending for BEA purposes. In fiscal

year 1991, 6 of the 27 agencies, the Postal Service, APHIS, SEC, NRC, INS and

FCC, had 90 percent or more of their total spending classified as

discretionary spending. By fiscal year 1996, four additional agencies, PTO,

NTIS, FTC, and the Panama Canal Commission, had more than 90 percent of

their total spending classified as discretionary spending. Spending for two

of these additional agencies, NTIS and the Panama Canal Commission, went

from 100 percent mandatory spending in fiscal year 1991 to 100 percent

discretionary spending by fiscal year 1996. For NTIS, this occurred when its

operations were converted from a trust fund to a self-supporting revolving

fund. For the Panama Canal Commission this change is attributable to the

decision made by OMB in fiscal year 1993 not to include fees that offset

spending in discretionary accounts in the PAYGO baseline.9

The Bureau of Reclamation also had a significant increase in the percent

of total spending classified as discretionary. In fiscal year 1991, 60 percent

of Reclamation’s total spending was classified as discretionary spending,

but by fiscal year 1996 this percentage had increased to 86 percent. Of the

27 agencies in our survey, 14 saw an increase in the percent of agency

spending classified as discretionary between fiscal years 1991 and 1996, 5

agencies saw a decrease, while 8 agencies showed no change. See table

9

See appendix III for a discussion of this OMB decision.

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III.1 in appendix III for detailed information on the BEA classifications for

each agency in our survey.

Increased User Fee

Collections Replaced

General Fund

Appropriations

Table 2 compares growth from current appropriations10 versus growth

from all sources, including fees from the public, from fiscal years 1991

through 1996.11 See table IV.1 in appendix IV for detailed information on

current and permanent appropriations for the 27 agencies in our survey.

10Current appropriations are provided by annual appropriation acts and are scored against BEA

discretionary spending limit totals. Current appropriations include general, special, and trust fund

appropriations.

11Nine agencies—the Federal Retirement Thrift Investment Board, Other DOD Trust Funds, Farm

Credit Administration, Comptroller of the Currency, Office of Thrift Supervision, Federal Housing

Finance Board, National Credit Union Administration, Panama Canal Commission, and U.S.

Enrichment Corporation—were excluded from this table because they did not receive current

appropriations from fiscal years 1991 to 1996. The National Technical Information Service was also

excluded because it received only small current appropriations in fiscal years 1993 and 1995.

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Table 2: Fee-Reliant Agency Growth in

Current Appropriations Versus All

Sources From Fiscal Years 1991

Through 1996

Compound growth

ratea

Fiscal Years

1991-1996

Agency

Current

appropriations

(percent)

All sourcesb

(percent)

Agricultural Marketing Service –1.37 1.32

Animal and Plant Health Inspection Service 1.86 1.69

Grain Inspection, Packers and Stockyards

Administration

2.44 1.51

Federal Communications Commission –12.77 11.29

Federal Trade Commission –13.18 5.56

Immigration and Naturalization Service 14.13 15.42

Patent and Trademark Office –2.06 12.64

Securities and Exchange Commission –8.33 12.00

Nuclear Regulatory Commission 0.30 0.40

Power Marketing Administrations –0.45 0.21

Tennessee Valley Authority –4.19 1.05

Bureau of Reclamation –3.61 –1.47

Minerals Management Service –0.83 –0.50

U.S. Fish and Wildlife Service –1.12 2.98

U.S. Customs Service 2.46 4.19

U.S. Mint –100.0 26.13

Postal Service –24.90 4.55

Note: When amounts are shown in constant dollars, which excludes inflation, all of the fee-reliant

agencies show negative growth in current appropriations except for INS.

aCompound growth rate means the average annual growth rate from fiscal years 1991 through

1996.

bIncludes federal and nonfederal offsetting collections and funding from permanent and current

budget authority.

Twelve fee-reliant agencies that received current appropriations, either

from general revenue or special fund appropriations, showed negative

growth in appropriated funds. However, once user fees and other

permanent budget authority were included, 15 of the 17 agencies shown in

table 2 either increased their budgets or had decreases less than the

decrease in current appropriations. For example, current appropriations

for SEC declined by 8.3 percent between fiscal years 1991 and 1996.

However, after fees were included in SEC’s budget totals, the agency’s

budget grew 12 percent over this period. Current appropriations for the

Bureau of Reclamation declined by 3.6 percent between fiscal years 1991

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and 1996. However, user fee revenues helped reduce the effect of this

decline on the Bureau’s budget so that it experienced only about a

1.5 percent reduction during this period.

Budgetary Treatment

Among Agencies That

Collect User Fees Is

Inconsistent

The 27 fee-reliant agencies in our review varied in how their user fees

were classified, what kind of account they were deposited into, the

legislative controls on the amount or use of these fees, and how they were

treated under BEA. As a result, user fees for similar programs were often

treated quite differently in the federal budget process. For example, some

agricultural inspection fees were netted against their accounts’ budget

authority and outlays, which reduced spending counted against BEA

discretionary spending limits. Other agricultural fees were appropriated as

new budget authority and were counted as discretionary spending. While

these fees offset spending, they do so at the department and subfunction

levels. In this case, the offset can be used to provide room under the

spending caps elsewhere and not necessarily for the program generating

the fee.

Table 3 lists these 27 agencies and identifies whether, in fiscal year 1996,

they received user fees from the public primarily as collections credited to

an appropriation or fund accounts or as offsetting receipts.

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Table 3: Twenty-Seven Fee-Reliant

Agencies and Their Fee Classifications

Agencies That Primarily Had Collections Credited to Appropriation or

Fund Accounts (18)

— Comptroller of the Currency

— Other Department of Defense Trust Funds

— Farm Credit Administration

— Federal Communications Commission

— Federal Housing Finance Board

— Federal Trade Commission

— Grain Inspection, Packers and

Stockyards Administration

— National Credit Union Administration

— National Technical Information

Service

— Office of Thrift Supervision

— Panama Canal Commission

— Patent and Trademark Office

— Postal Service

— Power Marketing Administrations

— Securities and Exchange Commission

— Tennessee Valley Authority

— U.S. Enrichment Corporation

— U.S. Mint

Agencies That Primarily Received Offsetting Receipts (8)

— Animal and Plant Health Inspection

Service

— Bureau of Reclamation

— Federal Retirement Thrift Investment

Board

— Immigration and Naturalization Service

— Minerals Management Service

— Nuclear Regulatory Commission

— U.S. Customs Service

— U.S. Fish and Wildlife Service

Agencies That Received a Mix of Offsetting Collections (1)

— Agricultural Marketing Service

Note: Agencies that we categorized as primarily having collections credited to appropriation or

fund accounts received at least 75 percent of their fees from the public in this manner in fiscal

year 1996. Agencies we categorized as primarily receiving offsetting receipts received at least

75 percent of their fees in this manner in fiscal year 1996. The one agency we categorized as

receiving a mix of offsetting collections received less than 75 percent of its offsetting collections

in the form of collections credited to appropriation or fund accounts or as offsetting receipts in

fiscal year 1996.

As shown in table 3, 18 of the 27 agencies we identified as fee-reliant

received fees from the public primarily as collections credited to

appropriation or fund accounts. Eight other agencies received fees mainly

as offsetting receipts, with two of those being authorized to use fees

received during the year to reduce their appropriations. In practice, this

treatment is similar to those agencies that have collections credited to

their appropriation or fund accounts. One agency collected fees that were

not predominantly one type or the other.

The following sections provide more detail on the different budgetary

treatment of these user fees. See appendix II for a detailed listing of

budgetary characteristics for each of the 27 agencies in our review.

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Budgetary Treatment of

Collections Credited to

Appropriation or Fund

Accounts

As shown in table 3, we identified 18 fee-reliant agencies that received

user fees as collections credited to appropriation or fund accounts. This

treatment was typical for agencies that conduct business-type operations

and are largely self-supporting through the exchange of fees for goods or

services. Most of these agencies are authorized to use these collections

without further congressional action. In some cases, this reflects the belief

that an agency—such as the Postal Service—might not be able to respond

quickly to its customers if it were required to go through the

appropriations process. In other cases, the amount collected is too

insignificant or unpredictable to be separately appropriated and, instead,

is included in a general operating account. Of these 18 agencies, 12 were

funded entirely, or mostly so, through public enterprise funds. Fees for

two agencies, the Comptroller of the Currency and commissary sales in

the DOD Trust Funds, were deposited in trust revolving funds.

Collections for four agencies—FCC, the Federal Trade Commission (FTC),

PTO, and SEC—were deposited in general fund expenditure accounts.

Collections credited to a general fund expenditure account may be

broad-based and cover the agency’s operations as well as specific fee

activities. Where the definition of costs charged to users was broadened to

include indirect costs, this can mean that the agency is entirely supported

by fees. For instance, PTO is fully funded through fees. Of PTO’s $631 million

in new budget authority for fiscal year 1996, $82 million was appropriated

from a special fund and $549 million from spending authority from

offsetting collections. In other cases, fees may supplement an agency’s

general fund appropriation. In fiscal year 1996, the Southwestern Power

Administration’s operations and maintenance account was funded

primarily through $30 million in current appropriations from general

revenues, but received an additional $3 million in collections.

Although there are exceptions, figure 1 outlines the ways collections are

generally credited to appropriation or fund accounts in the budget

process, differences in BEA spending categories among these collections,

and subsequent BEA scoring treatment. As shown in figure 1, collections

credited to appropriation or fund accounts may either (1) offset

discretionary spending at the account level or (2) be treated as negative

direct spending, which has no effect on discretionary spending limits. As

noted above, collections credited to discretionary appropriation or fund

accounts are netted against account budget authority and outlays. For

example, of the $100 million in new budget authority available to FTC in

fiscal year 1996, only $35 million in its Salaries and Expenses account

Page 14 GAO/AIMD-98-11 Federal User Fees
B-275109 

counted towards BEA budget authority limits. The remaining $65 million

from offsetting collections was not scored.

Figure 1: Collections Credited to Appropriation or Fund Accounts in the Budget Process

 Offsetting

 collection

Timing of

legislative 

action

BEA spending 

category

BEA scoring

treatment

Collections

credited to 

appropriation or fund

accounts

Permanent

Discretionary

Mandatory

Offsets

account level

 spending

Treated as 

negative direct

spending

Timing of Legislative Action

and Other Controls

In a number of instances, the Congress has authorized agencies to obligate

collections for program purposes without further congressional action, a

form of permanent budget authority. Although fees credited directly to

revolving funds are by definition available for the agency’s use, this does

not make program size solely a function of fee collections. The Congress

can limit the amount available to an agency, typically through provisions

in appropriation acts. Nearly a third of the agencies in our study with one

or more revolving funds had a limitation on obligations between fiscal

years 1991 and 1996. An agency’s use of revolving funds may also be

Page 15 GAO/AIMD-98-11 Federal User Fees
B-275109 

limited through the apportionment process, which limits the amount of

obligations an agency or program can incur within a particular time

period, program, activity, or project.

Budgetary Treatment of

Offsetting Receipts

As shown in table 3, eight of the agencies we identified as fee-reliant

received most of their fees from the public through offsetting receipts.

Based on the agencies in our review, most that receive all or most of their

funding from offsetting receipts are not entirely fee-reliant. Offsetting

receipts are generally appropriated to a special, nonrevolving trust or

general fund account to support the agency or activity that generated the

fee. Agencies derive these fees from many of the same types of

transactions as those credited as collections to appropriation or fund

accounts.

Although there are exceptions, figure 2 outlines the ways offsetting

receipts are generally treated in the budget process, differences in BEA

spending categories among these receipts, and BEA scoring treatments. As

is the case for collections credited to appropriation or fund accounts,

offsetting receipts also may be classified as either discretionary or

mandatory spending under BEA. If offsetting receipts are classified as

discretionary, they may (1) offset discretionary spending at the agency

(executive department or independent agency) and subfunction level or

(2) be used, in the case of some regulatory agencies, to reimburse general

or special fund appropriations similar to collections credited to

appropriation or fund accounts. If offsetting receipts are classified as

mandatory spending, they are treated as negative direct spending and used

to meet PAYGO requirements on the mandatory side of the budget.

In those instances where offsetting receipts offset discretionary spending

at the agency or subfunction level, they provide room under the caps for

additional spending, but not necessarily for the account or agency that

generated the fees. For example, fees generated by the Animal and Plant

Health Inspection Service (APHIS), are treated as offsets to spending for the

Department of Agriculture as a whole.

Page 16 GAO/AIMD-98-11 Federal User Fees
B-275109 

Figure 2: Offsetting Receipts in the Budget Process

 Offsetting

 collection

Timing of

legislative 

action

BEA spending 

category

BEA scoring

treatment

Discretionary

Mandatory

Offsets agency

and subfunction

 level spending

Treated as 

negative direct

spending

Permanent

Current

Offsetting

receipts

Timing of Legislative Action

and Other Controls

The Congress may—as is true for funding from general revenues—make

offsetting receipts available in a permanent appropriation. Unlike current

authority in which the Congress annually sets the program level which can

not be exceeded without further congressional action, permanent

authority is available in the first year as well as in succeeding years.

The Congress can also decide to cap the amount of fee receipts available

in a given fiscal year by making the budget authority definite—that is, for a

fixed amount. If the amount of fees collected exceeds the amount

appropriated, then the excess fees are held in special or trust receipt

accounts to be made available in subsequent years or deposited in the

general fund of the Treasury.12 Typically, fees that are permanently

12Seven of the 11 agencies that received some offsetting receipts had appropriations for a fixed

amount.

Page 17 GAO/AIMD-98-11 Federal User Fees
B-275109 

appropriated are not for a fixed or definite amount; instead, the program

retains for obligation whatever fees it generates. In contrast, fees that are

currently appropriated are more likely to be for a specific amount.

Increasingly, fees generated by some regulatory agencies are used to

reimburse or reduce amounts appropriated to an agency. Agencies with

this authority fund their activities either through (1) general or special

fund appropriations, which their legal authority directs be reduced as fees

are collected or (2) fees appropriated to special fund expenditure

accounts that are then used to offset spending in another account, such as

the agency’s main operating account.13 Two agencies in our survey—NRC

and INS—are required by law to reimburse their appropriations with

receipts collected during the fiscal year. This budgetary treatment is

similar to the treatment of user fees collected by FTC and FCC, as both

agencies’ appropriations are reduced dollar for dollar as collections are

credited to their appropriation accounts.

Many of these regulatory receipts, including some of those for NRC, were

previously classified as governmental and deposited in the general fund of

the Treasury. However, in OBRA 90, the Congress authorized NRC to charge

fees to its licensees to cover all its appropriation except for that amount

appropriated from the Nuclear Waste Fund. As a result, nearly all of NRC’s

budget is financed by fees. For instance, in fiscal year 1996, NRC was

appropriated $472.6 million which was reduced during the fiscal year by

$461.6 million in offsetting collections. The result was a net fiscal year

1996 appropriation of $11 million. Although NRC had budget authority equal

to $472.6 million only the $11 million was subject to BEA discretionary

spending limits.

Budgetary Treatment of

Similar User Fees

Although fees are treated differently for similar activities, increasingly

authority is being provided to allow fees to offset discretionary spending

no matter what the source or purpose of the fee. To illustrate, table 4

shows five accounts that receive fees from the public for their inspection

services. Although there are no economic differences in these

transactions, there were significant differences in budgetary treatment.

13These fees usually offset spending in the generating agency at the account level up to a specified

amount. Any fees collected in excess of this amount may be made available either immediately, at a

specified time in the future, through the reprogramming process, if applicable, or in a subsequent

appropriation. From the agency’s perspective, this system has both advantages and disadvantages. The

advantage is the assurance of funding up to the appropriated amount whether or not fees are collected

for the full amount. The disadvantage is that the agency may not be permitted to spend fees collected

in excess of its general or special fund appropriation. In addition, the Congress may also direct that fee

balances be deposited in the general fund of the Treasury.

Page 18 GAO/AIMD-98-11 Federal User Fees
B-275109 

For purposes of BEA scoring, fees in all five accounts either reduce budget

authority and outlays subject to discretionary limitations or do not affect

discretionary spending because they are classified as mandatory.

Table 4: Budgetary Treatment and BEA

Scoring for Inspection Services

Agency/Fee type

Budgetary treatment of

fees BEA scoring

Agency: APHIS

Activity: Agricultural

quarantine inspection 

Fee Type: proprietary

receipt

Account Title: Salaries and

expenses 

Account Type: general

fund expenditure account

Type of Authority: current

budget authority

Account classified as

discretionary. Appropriated

receipts are treated as new

budget authority at the

account level and offset at

the agency (Department of

Agriculture) and

subfunction level. These

offsetting receipts are

scored as zero under BEA.

Agency: Nuclear Regulatory

Commission

Activity: Inspection, 

oversight and licensing of 

nuclear facilities

Fee Type: offsetting

governmental receipts

Account Title: Salaries and

expenses 

Account Type: general

fund expenditure account

Type of Authority: current

budget authority

Account and receipts are

classified as discretionary.

Offsetting governmental

receipts are required by law

to offset appropriation. Only

the net amount is included

in BEA scoring of

discretionary spending.

Agency: AMS 

Activity: Inspection of egg

handlers and hatcheries,

grading of tobacco and

cotton, and other 

marketing services

Fee Type: offsetting

collections to an

appropriation or fund 

account

Account Title: Marketing

services

Account Type: general

fund expenditure account

Type of Authority:

permanent spending

authority

Account and offsetting

collections are classified as

discretionary. Budget

authority and outlays are

offset by the amount of

collections. Only the net

amount is included in BEA

scoring of discretionary

spending.

(continued)

Page 19 GAO/AIMD-98-11 Federal User Fees
B-275109 

Agency/Fee type

Budgetary treatment of

fees BEA scoring

Agency: GIPSA

Activity: Grain inspection,

weighing and grading

services 

Fee Type: offsetting

collections to an

appropriation or fund 

account

Account Title: Inspection

and weighing services

Account Type: public

enterprise revolving fund 

Type of Authority:

permanent spending

authority.

Account and offsetting

collections were classified

as mandatory at the time of

our review. Recently this

account was reclassified

because of a concept

change. As a mandatory

account it had no effect on

discretionary spending. As

a discretionary account,

budget authority and

outlays are offset by the

amount of collections.

Agency: AMS

Activity: Inspection and

grading of agricultural

commodities

Fee Type: Proprietary 

receipts

Account Title:

Miscellaneous Trust Funds

Account Type: trust fund

Type of Authority:

permanent budget authority

Account and receipts are

mandatory. Included in the

direct spending baseline.

No effect on discretionary

spending.

APHIS’ fees for agricultural quarantine inspection are a dedicated source of

revenue that are earmarked for the purposes for which they were

collected. Since proprietary receipts are offsetting, any fees provided in

appropriations language to APHIS are offset against discretionary spending

limits. However, because APHIS is part of a larger agency, the benefits of

this offset accrue to the Department of Agriculture as a whole and for the

agricultural research and services subfunction.

NRC receipts are called offsetting governmental because they are

governmental receipts by nature but are required by law to offset

spending. Originally, some of NRC’s receipts were governmental and not

earmarked for NRC’s use. However, beginning with OBRA 90, NRC and several

other regulatory agencies were authorized to recover total agency costs or,

in some cases, amounts in excess of agency costs. The appropriations

language for these agencies directed that the collections be treated as

offsetting. OMB subsequently created the offsetting governmental receipt

classification to distinguish these receipts from other types of receipts.

AMS fees for inspection and cotton and tobacco grading, and GIPSA’s grain

inspection fees are both authorized to be credited directly to appropriation

or fund accounts. GIPSA was classified as a mandatory account at the time

of our review and therefore it and its collections were treated as direct or

Page 20 GAO/AIMD-98-11 Federal User Fees
B-275109 

mandatory spending subject to PAYGO requirements.14 Recently, this GIPSA

account was reclassified by OMB applying BEA scoring rules that, in most

cases, where the Congress has provided permanent authority but has

imposed an obligation limitation, the account will be treated as

discretionary.

The last example, AMS’s grading of agricultural commodities, is classified

as mandatory spending because the fees for these activities are authorized

as receipts to a trust fund. These fees and their activities are not subject to

discretionary spending limits.

Issues for

Consideration in the

Design and

Management of User

Fees

Increased reliance on fee collections as an agency’s primary source of

funding has implications for federal budgeting and management that may

call for a reexamination of the basic principles as well as the actual

practices underlying the treatment of fees. Offsetting can inhibit

congressional tradeoffs based on the relative merit of programs and can

obscure the amount of spending for fee-reliant agencies. The current trend

to net fees against spending at the account or agency level offers agencies

some stability, even potential growth, not available to most agencies

dependent on current appropriations. However, fee-reliant agencies are

faced with some unique challenges that make management of these

agencies more complex.

How user fees are structured reflects competing considerations and the

sometimes differing interests of the Congress, OMB, agencies, and the fee

payers. Some believe that agencies will have less motivation to collect and

users to pay if the fees are not credited to the activity that generated the

fee. Others have cautioned that earmarking fees reduces congressional

flexibility in making resource decisions and can complicate agency

oversight. Still others maintain that the merits of a program—not its ability

to generate fees—should influence funding decisions and program size,

particularly in the context of continuing reductions in overall discretionary

spending. In considering these trade-offs, it is important that budgetary

treatment of fees influence, but not drive, resource and management

decisions.

14The classification depends on whether the fees are authorized to be charged in appropriations acts or

authorizing statutes.

Page 21 GAO/AIMD-98-11 Federal User Fees
B-275109 

Inconsistencies Between

Budget Concepts and Fee

Classifications Are Likely

to Increase

As scoring differences become more important and distinctions in fee

classifications more ambiguous, fee structure is likely to be driven by

budget rules that make certain designs most advantageous. The 1967

Commission on Budget Concepts could not have anticipated how

discretionary caps would serve to erode the criteria it proposed to

distinguish the budgetary treatment of fees. The obvious advantage of

netting fees against program spending and the pressures to earmark fees

for certain uses make it more likely in today’s budget environment that

fees from the public will be treated as offsets to appropriations under BEA

caps, regardless of whether the underlying federal activity is business or

governmental in nature. An agency is likely to consider offsetting

collections that are credited directly to its appropriation or fund account

more advantageous than a receipt that offsets at the department and

subfunction level. Moreover, inconsistencies have emerged in the

budgetary treatment of fees with similar characteristics and purposes, and

these differences have important implications for budgetary decisions

among these programs.

Any further examination of fees might include a broader range of user

charges not discussed in this report, including possibly excise taxes and

those fees collected under authority provided by the Independent Offices

Appropriation Act of 1952.15 Questions could be asked, such as the

following: What rules make sense for comparable types of activities? What

are the best ways of presenting user fees in a unified budget that will be

inclusive and consistent? Finally, recognizing that not all activities are

alike, What treatment will provide the most appropriate oversight and

control for a particular fee-reliant activity?

Fee-Reliant Agencies Face

Unique Management Issues

Fee-reliant agencies face management issues not faced by those that

depend primarily on general fund appropriations. Agencies’ reliance on

fees may raise expectations that these agencies will be self-supporting,

thereby prompting questions about the applicability of market or

business-like principles to their funding and operations. For example,

dependence on fees may cause these programs to become more vulnerable

to cyclical swings in demand and fee income. This in turn raises questions

about how to respond to such downturns in income, such as whether

general appropriations should be used to subsidize operations if fees

decline. If these agencies are expected to operate in a market

environment—especially without an appropriations “safety

net”—pressures to provide exemptions from government rules and

15See the glossary for a discussion of the Independent Offices Appropriation Act of 1952.

Page 22 GAO/AIMD-98-11 Federal User Fees
B-275109 

regulations on procurement and personnel may arise. Balancing these with

other issues, such as accountability to the Congress and the general

taxpayer, will be a continuing challenge.

Increasingly, agencies are being asked to provide greater accountability.

Where the Congress and fee payers agree on priorities, there may be no

conflict between oversight and accountability to the Congress and

accountability to fee payers. However, where congressional and fee payer

priorities differ, the agency may be under greater pressure to satisfy the

demands of fee payers, particularly if the exchange of fee for service is

voluntary.

Even where there may be agreement in principle that fees should be

charged for an activity, there is the possibility of increased conflict

between different payers about the allocation among them. Moreover, few

agencies provide purely business-type services. To the extent that

fee-reliant agencies also provide services to the general public and do not

receive general fund appropriations, fees may have to be set to subsidize

non-fee-related costs and activities, which can prompt further conflict

between the fee payers and those receiving these broader benefits.

In addition, agencies with some fee-funded activities will have to redefine

relationships between fee-funded and appropriated activities. Agencies

will be faced with the inequities, real or perceived, that different funding

sources may create. In addition to any perceived funding imbalances

between fee and appropriations supported programs, management

challenges can arise from differences in their funding status. For example,

during times of government shutdowns, programs with authority to

obligate fees without congressional action were among those able to

continue operating while programs and staff funded solely through current

appropriations were shutdown and furloughed.

Agency Comments

and Our Evaluation

OMB officials agreed that different budgetary treatments have occurred as

agencies have sought and the Congress has enacted laws that allow

agencies to use the fees they generate to offset spending. Several

comments by OMB officials suggested that offsetting correctly applied, that

is, offsetting that results from business-like activities, does not inhibit

tradeoffs between programs or limit congressional flexibility in

decision-making because this type of spending is self-controlling. These

comments assume that it is possible to make clear distinctions between

business-like and governmental activities. Although the 1967 President’s

Page 23 GAO/AIMD-98-11 Federal User Fees
B-275109 

Commission on Budget Concepts recommended a dual system of

accounting based on these distinctions, such distinctions have been

difficult to make in practice. A clear line between governmental and

business-type activities is even less likely to be applied in the future given

the overwhelming benefits of offsetting under BEA discretionary spending

limits.

OMB officials also provided a number of technical and clarifying comments,

which we incorporated in the report where appropriate.

We are sending copies of this report to other interested Members of the

Congress and the Director of the Office of Management and Budget. We

will make copies available to others on request. Please call me at

(202) 512-9142 if you or your staff have any questions. This report was

prepared under the direction of Barbara Bovbjerg. Major contributors

were Denise Fantone, Tim Minelli, Carlos Diz (Attorney-Advisor), John

Mingus, and Paul Yoon (Intern).

Sincerely yours,

Susan J. Irving

Associate Director, Budget Issues

Page 24 GAO/AIMD-98-11 Federal User Fees
Page 25 GAO/AIMD-98-11 Federal User Fees
Contents

Letter 1

Appendix I 

Scope and

Methodology

30

Appendix II 

Budgetary

Characteristics of

Fee-Reliant Agencies,

Fiscal Year 1996

34

Appendix III 

BEA Classification of

Fee-Reliant Agencies

37

Appendix IV 

Current Versus

Permanent

Appropriations

40

Appendix V 

Current

Appropriations for

Fee-Reliant Agencies

Versus Subcommittee

Agencies, Fiscal Years

1992 Through 1996

42

Glossary 44

Related GAO Products 50

Page 26 GAO/AIMD-98-11 Federal User Fees
Contents

Tables Table 1: Change in Fee Reliance Among Fee-Reliant Agencies,

Fiscal Years 1991 to 1996

7

Table 2: Fee-Reliant Agency Growth in Current Appropriations

Versus All Sources From Fiscal Years 1991 Through 1996

11

Table 3: Twenty-Seven Fee-Reliant Agencies and Their Fee

Classifications

13

Table 4: Budgetary Treatment and BEA Scoring for Inspection

Services

19

Table III.1: Mandatory Versus Discretionary Classification for

Fee-Reliant Agencies

37

Table IV.1: Permanent Versus Current Appropriations for

Fee-Reliant Agencies

41

Figures Figure 1: Collections Credited to Appropriation or Fund Accounts

in the Budget Process

15

Figure 2: Offsetting Receipts in the Budget Process 17

Page 27 GAO/AIMD-98-11 Federal User Fees
Contents

Abbreviations

AMS Agricultural Marketing Service

APHIS Animal and Plant Health Inspection Service

BEA Budget Enforcement Act

CBO Congressional Budget Office

COBRA 85 Consolidated Budget Reconciliation Act of 1985

DOD Department of Defense

FCA Farm Credit Administration

FCC Federal Communications Commission

FHFB Federal Housing Finance Board

FRTIB Federal Retirement Thrift Investment Board

FTC Federal Trade Commission

GPRA Government Performance and Results Act

GIPSA Grain Inspection, Packers and Stockyards Administration

GRH Gramm-Rudman-Hollings

INS Immigration and Naturalization Service

IOAA Independent Offices Appropriation Act of 1952

MMS Minerals Management Service

NRC Nuclear Regulatory Commission

NTIS National Technical Information Service

OBRA 90 Omnibus Reconciliation Act of 1990

OBRA 93 Omnibus Reconciliation Act of 1993

OMB Office of Management and Budget

OTS Office of Thrift Supervision

PAYGO pay-as-you-go

PCC Panama Canal Commission

PTO Patent and Trademark Office

PMAs Power Marketing Administrations

SEC Securities and Exchange Commission

TVA Tennessee Valley Authority

USEC United States Enrichment Corporation

USFWS United States Fish and Wildlife Service

Page 28 GAO/AIMD-98-11 Federal User Fees
Page 29 GAO/AIMD-98-11 Federal User Fees
Appendix I 

Scope and Methodology

To better understand the roles fees have had as a funding source since BEA

was enacted, we reviewed all agencies in which fees for business or

regulatory services to the public provided a significant and continuing

source of funding. Twenty-seven agencies met our criteria.

We defined our universe of fee-reliant agencies using the following

criteria: (1) fees from the public must be used to support the agency that

generated the fee, (2) services, goods, or benefits must be provided in

exchange for fees and the exchange should be closely linked in time, and

(3) budget authority from fees from the public must represent 20 percent

or more of the agency’s gross outlays from federal sources averaged over

fiscal years 1991 through 1996. This excludes offsetting collections and

associated outlays from federal sources.

To meet these criteria, we excluded (1) agencies that collected fees that

were deposited in the general fund of the Treasury instead of designated

for the agency’s use, (2) insurance and retirement programs because of the

delay between when a fee is paid and when there is a pay out, although

many of these programs, such as the Federal Deposit Insurance

Corporation are totally self-supporting, (3) credit programs because they

involve subsidies, (4) agencies that receive fees from the public that are

then transferred to another federal agency or a state, (5) agencies that

receive fees from the public intermittently, (6) Government-sponsored

enterprises, such as the Federal Reserve, which receive funding from the

public, but are classified as private and not included in the federal budget,

and (7) agencies that receive most of their fees from other federal

agencies, although many of the agencies included have some funding from

this source.

Certain accounts of the agencies we identified as fee-reliant were

excluded from subsequent analyses. Insurance and credit accounts were

excluded from Bureau of Reclamation and National Credit Union

Administration totals, except for the examination and regulatory fees that

are deposited in the Credit Union Share Insurance Fund and transferred to

the Operating Fund account. Other DOD Trust Funds includes only those

accounts that received offsetting collections from the public for

commissary sales. Accounts on gift funds and separation pay were

excluded from Other DOD Trust Funds totals. The Funds for Strengthening

Markets, Income, and Supply account was excluded from Agricultural

Marketing Service totals because most of its funding is transferred to other

programs, principally child nutrition. Also, the Universal Service Fund and

Page 30 GAO/AIMD-98-11 Federal User Fees
Appendix I 

Scope and Methodology

the Spectrum Auction Program account were excluded from Federal

Communication Commission totals.

The 27 agencies span 7 of the 13 appropriations subcommittees:

(1) Agriculture and Rural Development, (2) Commerce, Justice, State, and

the Judiciary, (3) Defense, (4) Energy and Water Development, (5) Interior

and Related Agencies, (6) Treasury, Postal, and General Government, and

(7) Veterans Administration, Housing and Urban Development, and

Independent Agencies.

As used in this report, the term “agency” refers to the grouping of activities

shown as “bureaus” or listed as “other independent agencies” in the

President’s budget request to the Congress. The bureau designation

generally corresponds to a subordinate organization in an executive

department. Although this structure will include both fee and non-fee

programs and activities, we selected this level of aggregation because it is

organizationally comprehensive and more readily understood than either

of the alternatives, appropriation account or program activity. For

example, the U.S. Fish and Wildlife Service is more recognizable an entity

than the various accounts, such as Resource Management, Migratory Bird

Conservation, and Sport Fish Restoration, that make up the agency. In two

cases the bureau designation does not correspond with a single entity.

Other DOD Trust Funds described above, and the Power Marketing

Administrations, which includes 5 separate organizational entities.

To review the classification and treatment of fees in budget accounts, we

used OMB codes created for the President’s annual budget request. These

codes allowed us to identify (1) fees from the public and their

classification as an offsetting receipt or a collection credited to an

appropriation or fund account, (2) the type of expenditure account the fee

is credited to, and (3) the fee’s availability for obligation in a given fiscal

year.

Using OMB actual year data we constructed a series of analyses that

described trends in budget authority and collections for these agencies.

Our trend data only includes new appropriations and spending authority

available to an agency and not funding from unobligated balances. We did

not include unobligated balances because the data coding did not

distinguish between unobligated balances from fees and those from other

sources.

Page 31 GAO/AIMD-98-11 Federal User Fees
Appendix I 

Scope and Methodology

Data in this report cover fiscal years 1991 through 1996. OMB’s codes also

allowed us to track changes in discretionary versus mandatory

classifications of agency funding and shifts from current to permanent

budget or spending authority. Our observations are based on 6 years of

OMB data for those agencies selected. This work describes overall trends in

27 fee-financed agencies, but is not generalizable to all agencies with fees.

We also conducted interviews in six agencies: Agricultural Marketing

Service, National Technical Information Service, Nuclear Regulatory

Commission, Patent and Trademark Office, Securities and Exchange

Commission, and U.S. Fish and Wildlife Service.

Page 32 GAO/AIMD-98-11 Federal User Fees
Page 33 GAO/AIMD-98-11 Federal User Fees
Appendix II 

Budgetary Characteristics of Fee-Reliant

Agencies, Fiscal Year 1996

Fees from the public

Agency

Offsetting

collections to

accounts

Offsetting

receipts

Fees from the

public (percent

of outlaysa)

Federal Retirement Thrift

Investment Board X 215.8

National Credit Union Administration X 129.2

United States Enrichment

Corporation X 122.2

Office of Thrift Supervision X 113.2

Patent and Trademark Office X X 108.6

Comptroller of the Currency X 105.8

Panama Canal Commission X 105.5

United States Mint X 105.1

Postal Service X 101.0

Federal Housing Finance Board X 100.0

National Technical Information

Service X 100.0

Power Marketing Administrations X X 98.7

Farm Credit Administration X 95.0

Other DOD Trust Funds X 94.3

Tennessee Valley Authority X 88.9

Nuclear Regulatory Commission X X 88.8

Securities and Exchange

Commission X 85.5

Bureau of Reclamation X 83.4

Agricultural Marketing Service X X 81.1

Federal Communications

Commission X 73.2

Minerals Management Service X X 72.8

United States Customs Service X X 70.0

Federal Trade Commission X 64.7

Grain Inspection, Packers and

Stockyards Administration X 54.4

Immigration and Naturalization

Service X X 37.7

United States Fish and Wildlife

Service X X 36.1

Animal and Plant Health Inspection

Service X X 30.2

Page 34 GAO/AIMD-98-11 Federal User Fees
Appendix II 

Budgetary Characteristics of Fee-Reliant

Agencies, Fiscal Year 1996

Expenditure account fund type

Timing of legislative action Amount available Fees from

federal sources

General

fund

Special or

trust fund

Revolving

fund Permanent Current Indefinite Definite

X X X

X X X

X X X

X X X

X X X X X

X X X X

X X X

X X X

X X X X

X X X

X X X X

X X X X X X X X

X X X

X X X X

X X X X

X X X X X X

X X X X

X X X X X X X X

X X X X X X

X X X b

X X X X X X

X X X X X X X

X X X c

X X X

X X X X X

X X X X X X X

X X X X X X

Page 35 GAO/AIMD-98-11 Federal User Fees
Appendix II 

Budgetary Characteristics of Fee-Reliant

Agencies, Fiscal Year 1996

Notes: (1) Categories are as shown in OMB budget documents and have not been independently

verified. For a fuller discussion of accounts with spending authority and permanent appropriations

see Budget Issues: Inventory of Accounts With Spending Authority and Permanent

Appropriations, 1996 (GAO/AIMD-96-79, May 31, 1996).

(2) This table includes only those agency accounts that have fees from the public. An agency

may have additional accounts that only get general fund appropriations or were excluded as

noted in appendix I. Revolving funds include public enterprise and trust revolving funds.

aGross outlays minus offsetting collections from federal sources.

bThe Federal Communications Commission’s Salaries and Expenses account had a limitation on

spending authority from offsetting collections for fiscal year 1996.

cThe Federal Trade Commission’s Salaries and Expenses account had a limitation on spending

authority from offsetting collections for fiscal year 1996.

Page 36 GAO/AIMD-98-11 Federal User Fees
Appendix III 

BEA Classification of Fee-Reliant Agencies

The Budget Enforcement Act of 1990, as amended, divided spending at the

budget account level into two broad categories: discretionary and

mandatory. BEA classification is assigned to expenditure accounts within

agencies. Some accounts may have both mandatory and discretionary

funds and they are identified separately for BEA scoring purposes.

Legislative changes to mandatory spending enacted in a given fiscal year

are required to be deficit neutral in the aggregate. Discretionary spending

is held to fixed annual limits.

Table III.1 shows the change in classification from fiscal year 1991 to fiscal

year 1996 for accounts in the 27 agencies we reviewed. During this time,

there was an increase in the percentage of spending classified as

discretionary spending for 14 of the 27 agencies. Four agencies showed

decreases in spending classified as discretionary, while spending

classifications for nine agencies in our survey did not change.

Table III.1: Mandatory Versus

Discretionary Classification for

Fee-Reliant Agencies

Mandatory

(percent of funding)

Discretionary

(percent of funding)

Agency FY91 FY96 FY91 FY96

25 percent or more change from mandatory to discretionary

National Technical Information Service 100 0 0 100

Panama Canal Commission 100 0 0 100

Patent and Trademark Office 74 0 26 100

Bureau of Reclamation 40 14 60 86

Less than 25 percent change from mandatory to discretionary

Agricultural Marketing Service 78 59 22 41

Federal Trade Commission 18 0 82 100

United States Customs Service 35 22 65 78

Animal and Plant Health Inspection

Service

10 1 90 99

Power Marketing Administrations 91 86 9 14

Grain Inspection, Packers and

Stockyards Administration

59 57 41 43

Minerals Management Service 71 69 29 31

Federal Communications Commission 1 0 99 100

Nuclear Regulatory Commission 1 0 99 100

Securities and Exchange Commissiona 0 0 100 100

No change: mandatory to discretionary

Comptroller of the Currency 100 100 0 0

Other DOD Trust Funds 100 100 0 0

Farm Credit Administration 100 100 0 0

(continued)

Page 37 GAO/AIMD-98-11 Federal User Fees
Appendix III 

BEA Classification of Fee-Reliant Agencies

Mandatory

(percent of funding)

Discretionary

(percent of funding)

Agency FY91 FY96 FY91 FY96

Federal Housing Finance Board 100 100 0 0

Federal Retirement Thrift Investment

Board

100 100 0 0

National Credit Union Administration 100 100 0 0

Office of Thrift Supervision 100 100 0 0

United States Enrichment Corporation 100 100 0 0

No change: discretionary to mandatory

Immigration and Naturalization Service 0 0 100 100

25 percent or more change from discretionary to mandatory

United States Mint 75 100 25 0

Less than 25 percent change from discretionary to mandatory

Tennessee Valley Authoritya 98 98 2 2

United States Fish and Wildlife Service 30 35 70 65

Postal Servicea 0 0 100 100

aThree agencies—SEC, the Postal Service, TVA—had less than a 1 percent change in the amount

of funding classified as discretionary or mandatory spending between fiscal years 1991 and

1996.

Most of the change in classification is attributable to a decision made by

OMB in fiscal year 1993 not to include fees that offset spending in

discretionary accounts in the PAYGO baseline. A technical revision by OMB

for the fiscal year 1995 budget (OMB Circular A-11, Preparation and

Submission of the Budget Estimates, Sec. 21.2, p. 62 (August 4, 1993))

clarified that collections credited to discretionary appropriation or fund

accounts would be classified as discretionary. According to OMB, prior to

this change double counting had occurred in preparing the federal budgets

after enactment of BEA. Collections credited to appropriation or fund

accounts were counted as mandatory receipts (because they had

permanent spending authority), and, at the same time, were netted against

discretionary spending according to budget concept rules. Although this

correction did not change the impact of collections credited to

appropriation or fund accounts on discretionary spending, it means that if

discretionary spending were ever to exceed the annual caps, all

discretionary resources, including these offsetting collections, would be

subject to sequestration. For example, if a sequestration had occurred in

fiscal year 1996, all of FCC’s budget authority in its Salaries and Expenses

account would have been subject to sequestration. For FCC this would

have been $202 million. However, without the need for sequestration, only

Page 38 GAO/AIMD-98-11 Federal User Fees
Appendix III 

BEA Classification of Fee-Reliant Agencies

$59 million, or the net budget authority, is counted as discretionary

spending.

Page 39 GAO/AIMD-98-11 Federal User Fees
Appendix IV 

Current Versus Permanent Appropriations

Current and permanent appropriations refer to the timing of legislative

action in making budget authority available to an agency. When budget

authority is enacted permanently, it is available until spent. Such authority

can be the result of substantive legislation or appropriations acts. When

budget authority is enacted as current authority, the appropriations

language specifies how long the funds will be available. In general, current

appropriations are classified as discretionary and are under the

jurisdiction of the appropriations committees and their subcommittees.

While there are exceptions, permanent appropriations are more likely to

be classified as direct, or mandatory, spending and be under the

jurisdiction of authorizing committees.

Table IV.1 shows that from fiscal years 1991 through 1996 spending

authorized as permanent increased for 13 of the 27 agencies in our survey.

Twelve other agencies did not see changes in the percent of the their

funding classified as either permanent or current. The remaining two

agencies, GIPSA and APHIS, had small declines in funding from what was

permanently appropriated.

Page 40 GAO/AIMD-98-11 Federal User Fees
Appendix IV 

Current Versus Permanent Appropriations

Table IV.1: Permanent Versus Current

Appropriations for Fee-Reliant

Agencies

Permanent (percent

of funding)

Current (percent of

funding)

Agency FY91 FY96 FY91 FY96

25 percent or more change from current to permanent appropriations

Federal Communications Commission 1 71 99 29

Securities and Exchange Commission 19 70 81 30

Federal Trade Commission 18 69 82 31

United States Mint 74 100 26 0

Less than 25 percent change from current to permanent appropriations

Patent and Trademark Office 74 87 26 13

United States Fish and Wildlife Service 40 51 60 49

Bureau of Reclamation 37 44 6 56

United States Customs Service 34 39 66 61

Immigration and Naturalization Service 29 33 71 67

Agricultural Marketing Service 79 81 21 19

Minerals Management Service 71 72 29 28

United States Enrichment Corporation 98 100 2 0

Postal Service 99 100 1 0

No change: permanent to current

Comptroller of the Currency 100 100 0 0

Other DOD Trust Funds 100 100 0 0

Farm Credit Administration 100 100 0 0

Federal Housing Finance Board 100 100 0 0

Federal Retirement Thrift Investment

Board

100 100 0 0

National Credit Union Administration 100 100 0 0

National Technical Information Service 100 100 0 0

Office of Thrift Supervision 100 100 0 0

Panama Canal Commission 100 100 0 0

Tennessee Valley Authority 98 98 2 2

Power Marketing Administrations 91 91 9 9

No change: current to permanent

Nuclear Regulatory Commission 1 1 99 99

Less than 25 percent change from permanent to current appropriations

Grain Inspection, Packers and

Stockyards Administration

59 57 41 43

Animal and Plant Health Inspection

Service

10 9 90 91

Page 41 GAO/AIMD-98-11 Federal User Fees
Appendix V 

Current Appropriations for Fee-Reliant

Agencies Versus Subcommittee Agencies,

Fiscal Years 1992 Through 1996

Change in current budget authority (percent)

Compound

rate of growth

(percent)

Appropriation subcommittee and agency FY92-93 FY93-94 FY94-95 FY95-96 FY92-96

Agriculture and Rural Development

Agricultural Marketing Service –4.01 1.46 –5.19 –12.96 –5.32

Animal and Plant Health Inspection Service –1.98 3.12 –1.93 0.00 –0.22

Farm Credit Administration 0.00 0.00 0.00 0.00 0.00

Grain Inspection, Packers and Stockyards

Administration

–0.06 –1.90 0.23 0.00 –0.44

Agriculture, Rural Development

Appropriations

11.58 6.08 -1.57 -7.26 1.84

Subtotal: Fee-Reliant Agencies –2.12 2.72 –2.18 –1.31 –0.74

Subtotal: All Other Subcommittee Agencies 12.21 6.22 –1.54 –7.49 2.07

Commerce/Justice/State/Judiciary

Federal Communications Commission 10.84 –27.43 –32.09 –14.49 –17.33

Federal Trade Commission 0.65 –2.48 –19.02 –43.64 –18.19

Immigration and Naturalization Service 3.05 8.68 35.21 20.81 16.30

National Technical Information Servicea 0.00 0.00 0.00 0.00 0.00

Patent and Trademark Office –2.00 1.91 –7.17 0.00 –1.87

Securities and Exchange Commission –19.21 –54.53 86.67 –4.63 –10.07

Commerce/Justice/State/Judiciary

Appropriation

6.90 1.64 5.21 7.86 5.37

Subtotal: Fee-Reliant Agencies 1.35 –2.18 27.60 14.33 9.66

Subtotal: All Other Subcommittee Agencies 7.29 1.89 3.77 7.35 5.05

Defense

Other DOD Trust Funds 0.00 0.00 0.00 0.00 0.00

Defense Appropriation –6.18 –4.88 1.07 –0.09 –2.57

Subtotal: Fee-Reliant Agencies 0.00 0.00 0.00 0.00 0.00

Subtotal: All Other Subcommittee Agencies –6.18 –4.88 1.07 –0.09 –2.57

Energy and Water Development

Nuclear Regulatory Commission 5.37 –0.93 –2.06 –9.92 –2.04

Power Marketing Administrations 6.24 –9.62 –34.08 35.62 –3.75

Tennessee Valley Authority 0.00 4.05 –1.76 –21.01 –5.21

Energy and Water Development

Appropriations

0.92 –0.03 –7.04 –5.75 –3.04

Subtotal: Fee-Reliant Agencies 4.97 –3.49 –13.02 0.22 –3.06

(continued)

Page 42 GAO/AIMD-98-11 Federal User Fees
Appendix V 

Current Appropriations for Fee-Reliant

Agencies Versus Subcommittee Agencies,

Fiscal Years 1992 Through 1996

Change in current budget authority (percent)

Compound

rate of growth

(percent)

Appropriation subcommittee and agency FY92-93 FY93-94 FY94-95 FY95-96 FY92-96

Subtotal: All Other Subcommittee Agencies 0.72 0.14 –6.75 –6.02 –3.04

Interior and Related Agencies

Bureau of Reclamation –9.53 0.21 0.03 –1.49 –2.78

Minerals Management Service –1.85 –0.82 –2.53 –3.09 –2.08

United States Fish and Wildlife Service –2.03 –5.70 –7.14 –0.30 –3.83

Interior and Related Agencies

Appropriations

–4.71 9.91 –0.24 –11.51 –1.94

Subtotal: Fee-Reliant Agencies –5.60 –2.43 –3.23 –1.21 –3.13

Subtotal: All Other Subcommittee Agencies –4.56 11.93 0.19 –12.93 –1.75

Treasury/Postal/General Government

Comptroller of the Currency 0.00 0.00 0.00 0.00 0.00

Office of Thrift Supervision 0.00 0.00 0.00 0.00 0.00

United States Customs Service –2.06 –0.67 1.60 –1.68 –0.71

United States Mint 1.62 5.10 0.41 –100.00 –100.00

Postal Service –19.21 –54.53 86.67 –4.63 –10.07

Treasury/Postal/General Government

Appropriations

 4.90 0.79 1.75 –5.44 0.43

Subtotal: Fee-Reliant Agencies –3.53 –4.62 4.68 –5.21 –2.25

Subtotal: All Other Subcommittee Agencies 6.46 1.69 1.29 –5.48 0.90

VA/HUD/Independent Agencies

Federal Housing Finance Board 0.00 0.00 0.00 0.00 0.00

Federal Retirement Thrift Investment Board 0.00 0.00 0.00 0.00 0.00

National Credit Union Administration 0.00 0.00 0.00 0.00 0.00

Panama Canal Commission 0.00 0.00 0.00 0.00 0.00

United States Enrichment Corporation 0.00 0.00 0.00 0.00 0.00

VA/HUD/Independent Agencies

Appropriations

3.10 3.48 3.18 –11.92 –0.77

Subtotal: Fee-Reliant Agencies 0.00 0.00 0.00 0.00 0.00

Subtotal: All Other Subcommittee Agencies 3.10 3.48 3.18 –11.92 –0.77

aNTIS received small appropriations in fiscal years 1993 and 1995.

Page 43 GAO/AIMD-98-11 Federal User Fees
Glossary

Agency Under the broadest definition of the term, a department, agency, or

instrumentality of the U.S. government (31 U.S.C. 101). However, statutes

and regulations often include specific definitions of the term “agency” (or

related terms like “executive agency” or “federal agency”).

Budget Accounts Accounts used by the federal government to record outlays (expenditure

accounts) and income (receipt accounts) primarily for budgeting or

management information purposes but also for accounting purposes.

There are six types of federal budget accounts and all can receive user

fees from the public.

General Fund Accounts: These accounts are composed of all federal

funds not allocated to any other account and are generally credited with

collections not earmarked by law for a specific purpose. Some general

fund accounts receive earmarked offsetting collections that are credited

directly to the appropriation or fund account and are available for use,

often without further legislative action. One such account, the Bureau of

Reclamation’s Water and Related Resources, is credited with offsetting

collections from federal and nonfederal sources.

Special Fund Accounts: These accounts record receipts collected from a

specific source and earmarked by law for a specific purpose. They are

essentially trust funds except not so designated by law. The Fish and

Wildlife Service’s Land and Water Conservation Fund is an example of a

special fund.

Nonrevolving Trust Fund Accounts: These accounts record revenues

collected for a specific purpose or for a program designated in law as trust

funds. Nonrevolving trust fund accounts finance programs such as Social

Security, Medicare, and Superfund.

Public Enterprise Revolving Fund Accounts: These accounts receive

funding generated in a continuing cycle of business-type operations

primarily from nonfederal sources. Examples include the Postal Service

and the United States Enrichment Corporation.

Revolving Trust Fund Accounts: These accounts receive revenues

generated in business-type operations and are designated as trust funds by

statute. A revolving trust fund finances the bank regulatory activities of the

Comptroller of the Currency.

Page 44 GAO/AIMD-98-11 Federal User Fees
Glossary

Intragovernmental Fund Accounts: These accounts receive primarily

federal funding either from organizations within a department or other

federal agencies, such as working capital.

The general fund, special fund, and nonrevolving trust fund accounts have

both a receipt account, which are credited with collections, and an

expenditure account, to which appropriations are made and outlays

recorded. The three revolving accounts—public enterprise, trust revolving,

and intragovernmental fund—are appropriation or fund accounts that are

credited directly with collections and do not require a separate receipt

account.

Budget Authority Authority provided by law to enter into financial obligations that will

result in immediate or future outlays involving federal government funds.

The basic forms of budget authority include the following:

Appropriations: An act of the Congress that permits federal agencies to

incur obligations and to make payments out of the Treasury for specified

purposes. An appropriations act is the most common means of providing

budget authority.

Borrowing Authority: Statutory authority that permits a federal agency

to incur obligations and to make payments for specified purposes out of

money borrowed from the Treasury or the public.

Contract Authority: Statutory authority that permits a federal agency to

enter into contracts in advance of appropriations.

Offsetting Collections and Receipts: Authority to obligate and expend

the proceeds of offsetting receipts and collections.

Budget authority provided in laws other than appropriation acts is termed

spending authority. Spending authority includes contract authority,

authority to borrow, and entitlement authority for which the borrowing

authority is not provided in advance by appropriation acts.

Budget authority may be classified by its duration (1-year, multiple-year,

or no-year), by the timing of the legislation providing the authority

(current or permanent), by the manner of determining the amount

available (definite or indefinite), or by its availability for new obligations.

Page 45 GAO/AIMD-98-11 Federal User Fees
Glossary

Budget Enforcement Act of

1990 (BEA), as Amended

BEA divides spending into two types—discretionary spending and direct or

mandatory spending. Discretionary spending is controlled through annual

appropriations acts. Direct or mandatory spending is controlled by

permanent laws. BEA constrains discretionary spending differently from

mandatory spending and receipts. During the period of our review,

discretionary spending was constrained by dollar limits (“caps”) on total

budget authority and outlays for this category for each fiscal year through

1998. In fiscal year 1997 BEA was extended through 2002. Discretionary

spending was subdivided further into spending limits for defense,

non-defense and violent crime reduction in fiscal years 1998 and 1999, and

discretionary and violent crime reduction in fiscal year 2000. If the amount

of budget authority provided in appropriations acts for the year exceeds

the discretionary cap on budget authority, or the amount of outlays

estimated to result from this budget authority is estimated to exceed the

discretionary caps on outlays, BEA specifies a procedure, called

sequestration, for reducing discretionary spending. Under a sequester,

spending for most discretionary programs is reduced by a uniform

percentage. Special rules apply in reducing some programs and some

programs are exempt from sequester by law.

BEA constrains mandatory spending and receipts differently. Laws that

would increase mandatory spending or decrease receipts are constrained

through “pay-as-you-go” (PAYGO) rules. Under these rules, the cumulative

effects of legislation affecting mandatory spending or receipts must not

increase the deficit. For a complete description of the Budget

Enforcement Act, see chapter 24 of the Analytical Perspectives volume of

the Budget of the United States Government Fiscal Year 1998.

Discretionary Spending

Limits/Spending Caps

Under the Budget Enforcement Act, discretionary spending limits, or

spending caps, are maximum amounts of new budget authority and

outlays for specific categories of discretionary appropriations.

Discretionary appropriations are budgetary resources provided in

appropriation acts.

Fiscal Year A fiscal year is a 12-month accounting period. The fiscal year for the

federal government begins October 1 and ends September 30. The fiscal

year is designated by the calendar year in which it ends; for example fiscal

year 1998 is the year beginning October 1, 1997, and ending September 30,

1998.

Page 46 GAO/AIMD-98-11 Federal User Fees
Glossary

Independent Offices

Appropriation Act of 1952

The purpose of the IOAA, also called the “User Charge Statute,” was to

distribute the costs of government services to those who received benefits

beyond those provided to the general public. The statute gave agencies for

the first time broad statutory authority to set fees through administrative

regulation. Any fees collected under this authority are deposited in the

general fund of the Treasury and not credited to the agency or activity

generating the fees.

Offsetting Collections All collections by government accounts from other government accounts

and any collections from the public that are of a business-type or

market-oriented nature. They are classified into two major categories:

(1) offsetting receipts, which are amounts deposited in receipt accounts

and (2) collections credited to appropriation or fund accounts.

Offsetting Receipts: Offsetting receipts are amounts deposited in receipt

accounts. Offsetting receipts cannot be used without being appropriated.

However, a significant portion of such collections, for example, most trust

fund offsetting receipts are permanently appropriated and, therefore, can

be used without subsequent appropriation legislation. The Congressional

Budget Act of 1974, as amended by the Budget Enforcement Act of 1990,

defines offsetting receipts and collections as negative budget authority and

the reductions thereof as positive budget authority. Offsetting receipts are

subdivided into three categories:

Intragovernmental Transactions are payments into receipt accounts from

governmental appropriations or fund accounts. They are treated as offsets

to budget authority and outlays rather than as governmental receipts.

Offsetting Governmental Receipts are governmental in nature but are

required by law to be treated as offsetting.

Proprietary Receipts From the Public are collections from outside the

government which are deposited in receipt accounts that arise as a result

of the government’s business-type or market-oriented activities. Among

these are interest received, proceeds from the sale of property and

products, charges for nonregulatory services, and rents and royalties. Such

collections may be credited to general fund, special fund, or trust fund

receipt accounts and are offset against budget authority and outlays. In

most cases, such offsets are by agency and by subfunction but some

proprietary receipts are deducted from total budget authority and outlays

for the government as a whole.

Page 47 GAO/AIMD-98-11 Federal User Fees
Glossary

Collections Credited to Appropriation or Fund Accounts: These

collections include all revolving funds and some appropriation accounts.

Laws authorize collections to be credited directly to appropriation or fund

accounts and may make them available for obligation to meet the

account’s purpose without further legislative action. However, it is not

uncommon for annual appropriations acts to include limitations on the

obligations to be financed by these collections.

Outlay The issuance of checks, disbursement of cash, or electronic transfer of

funds made to liquidate a federal obligation. Outlays also occur when

interest on the Treasury debt held by the public accrues and when the

government issues bonds, notes, debentures, monetary credits, or other

cash-equivalent instruments in order to liquidate obligations. Also, under

credit reform, the credit subsidy cost is recorded as an outlay when a

direct or guaranteed loan is disbursed. Outlays during a fiscal year may be

for payment of obligations incurred in prior years (prior-year obligations)

or in the same year. Outlays, therefore, flow in part from unexpended

balances of prior-year budgetary resources and in part from budgetary

resources provided for the year in which the money is spent.

Pay-As-You-Go (PAYGO) Under the Budget Enforcement Act, the principle that all direct spending

and tax legislation enacted after BEA for a fiscal year must be

deficit-neutral in the aggregate. If the Congress enacts direct spending or

receipts legislation that causes a net increase in the deficit, it must offset

that increase by either increasing revenues or decreasing another direct

spending program in the same fiscal year. This requirement is enforced by

sequestration.

Page 48 GAO/AIMD-98-11 Federal User Fees
Page 49 GAO/AIMD-98-11 Federal User Fees
Related GAO Products

Federal Electricity Activities: The Federal Government’s Net Cost and

Potential for Future Losses, Volumes I and II (GAO/AIMD-97-110 and

GAO/AIMD-97-110A, September 19, 1997).

Intellectual Property: Fees Are Not Always Commensurate With the Costs

of Services (GAO/RCED-97-113, May 9, 1997).

Food-Related Services: Opportunities Exist to Recover Costs by Charging

Beneficiaries (GAO/RCED-97-57, March 20, 1997).

Airport and Airway Trust Fund: Issues Related to Determining How Best

to Finance FAA (GAO/T-RCED-97-59, February 5, 1997).

U.S. Forest Service: Fees for Recreation Special-Use Permits Do Not

Reflect Fair Market Value (GAO/RCED-97-16, December 20, 1996).

Airport and Airway Trust Fund: Issues Raised by Proposal to Replace the

Airline Ticket Tax (GAO/RCED-97-23, December 9, 1996).

Power Marketing Administrations: Cost Recovery, Financing, and

Comparison to Nonfederal Utilities (GAO/AIMD-96-145, September 19, 1996).

Analysis of USDA’s Budgets, Fiscal Years 1996-97 (GAO/RCED-96-182R, June 7,

1996).

U.S. Forest Service: Fee System for Right-of-Way Program Needs Revision

(GAO/RCED-96-84, April 22, 1996).

Federal Research: Information on Fees for Selected Federally Funded

Research and Development Centers (GAO/RCED-96-31FS, December 8, 1995).

Budget Issues: Earmarking in the Federal Government (GAO/AIMD-95-216FS,

August 1, 1995).

Federal Lands: Views on Reform of Recreation Concessioners

(GAO/T-RCED-95-250, July 25, 1995).

USDA User Fees (GAO/RCED-95-229R, June 23, 1995).

Customs Service: Passenger User Fee Needs to Be Reevaluated

(GAO/GGD-95-138, May 22, 1995).

Page 50 GAO/AIMD-98-11 Federal User Fees
Related GAO Products

USDA License Fees: Analysis of the Solvency and Users of the Perishable

Agriculture Commodities Act Program (GAO/T-RCED-95-135, March 16, 1995).

ATFI User Fees (GAO/AIMD-95-93R, March 10, 1995).

IRS User Fees (GAO/GGD-95-58R, December 15, 1994).

FDA User Fees: Current Measures Not Sufficient for Evaluating Effect on

Public Health (GAO/PEMD-94-26, July 22, 1994).

Federal Lands: Fees for Communications Sites Are Below Fair Market

Value (GAO/RCED-94-248, July 12, 1994).

Customs Service: Information on User Fees (GAO/GGD-94-165FS, June 17,

1994).

Highway User Fees: Updated Data Needed to Determine Whether All

Users Pay Their Fair Share (GAO/RCED-94-181, June 7, 1994).

INS User Fees: INS Working to Improve Management of User Fee Accounts

(GAO/GGD-94-101, April 12, 1994).

User Fees for Firearms Licenses (GAO/GGD-94-111R, March 14, 1994).

Futures Markets: A Futures Transaction Fee Is Administratively Feasible

(GAO/GGD-94-40, October 28, 1993).

FDA’s FOIA Fees (GAO/GGD-93-47R, June 10, 1993).

Forest Service: Little Assurance That Fair Market Value Fees Are

Collected From Ski Areas (GAO/RCED-93-107, April 16, 1993).

USDA Revenues: A Descriptive Compendium (GAO/RCED-93-19FS,

November 27, 1992).

Nuclear Waste: Status of Actions to Improve DOE User-Fee Assessments

(GAO/RCED-92-165, June 10, 1992).

Child Support Enforcement: Opportunity to Defray Burgeoning Federal

and State Non-AFDC Costs (GAO/HRD-92-91, June 5, 1992).

Page 51 GAO/AIMD-98-11 Federal User Fees
Related GAO Products

U.S. Customs Service: Limitations in Collecting Harbor Maintenance Fees

(GAO/GGD-92-25, December 23, 1991).

U.S. Courts: Estimated User Fees to Pay for New Facilities (GAO/GGD-92-8BR,

December 10, 1991).

Patent and Trademark Office: Impact of Higher Patent Fees on

Small-Entity and Federal Agency Users (GAO/RCED-92-19BR, October 11,

1991).

Rangeland Management: Current Formula Keeps Grazing Fees Low

(GAO/RCED-91-185BR, June 11, 1991).

Nuclear Waste: Changes Needed in DOE User-Fee Assessments

(GAO/T-RCED-91-52, May 8, 1991).

Nuclear Waste: Changes Needed in DOE User-Fee Assessments to Avoid

Funding Shortfall (GAO/RCED-90-65, June 7, 1990).

User Fees: Limited Survey of User Fees at the Departments of Commerce

and the Interior (GAO/AFMD-90-53BR, March 23, 1990).

Standards and Technology: Update of Information About Fee Increases for

Measurement Services (GAO/RCED-90-63BR, January 12, 1990).

(935209) Page 52 GAO/AIMD-98-11 Federal User Fees
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