M e m o r a n d u m

U n i t e d S t a t e s G o v e r n m e n t FORM Q-115I (1-92)

R a i l r o a d R e t i r e m e n t b o a r d

January 5, 2001

L -2 0 0 1 -0 1

TO Kenneth P. Boehne 

Chief Financial Officer

FROM Steven A. Barth 

General Counsi

SUBJECT : Appropriation; Training; Anti-Deficiency Act

This is in reply to your memorandum of December 21,2000, regarding two obligations 

incurred for training for personnel in the Bureau of Information Services. T hese 

obligations were examined in a Briefing Paper dated D ecem ber 19, 2000, by the Office 

of Inspector General.

The Briefing P aper refers to agreem ents ("bulk training”) for:

* * *254 training units priced at $260 each for a total of $66,040. The agreem ent 

w as executed using form[s] SF-182. * * * The agreem ent did not specify the 

classes to be provided, when classes would take place or who would attend.

The forms SF-182 were executed February 11,2000, and paym ent w as 

processed based on the vendor’s invoice that sam e month. * * * Training valued 

at approximately $10,000 w as still unused at Septem ber 30,2 0 0 0 .

The Briefing P aper also refers to an agreem ent (“group training;” also “PC SAS 

training") for:

* * * training services, valued at $22,000, at RRB headquarters. In addition, the 

agency agreed to pay up to $6,000 in related travel ex p en ses incurred by the 

instructor for a total cost of $28,000.

Form SF-182 was executed August 16, 2000, and paym ent w as processed 

based on the vendor’s invoice in September. * * * no funds related to the travel 

expenses were obligated or disbursed during FY 2000.
The training agreem ent w as executed without specifying a date. The class for 

which the agency had contracted and paid could not take place during FY 2000 

because the RRB personnel who were scheduled to receive the training w ere not 

available. The class w as later scheduled to take place in March 2001.

The Briefing Paper concludes that part or all of these obligations should be charged to 

fiscal year 2001 appropriations, in which case there may be a violation of the AntiDeficiency Act. You inquire as to which fiscal year appropriation the costs for training 

should be charged and, if any of the costs must be charged to fiscal year 2001, w hether 

a reportable violation of the Anti-Deficiency Act may have occurred.

The Briefing P aper states that services generally are chargeable to the appropriation 

current at the time the services are rendered. The Briefing P ap er notes that the 

Comptroller General has held that the question of whether to charge the appropriation 

current when the obligation is incurred or the one current when the services are 

rendered depends on whether the services are “severable” or “entire,” and that a single 

training course is a non-severable service. The*Briefing P aper also states that, 

“individual, severable training classes that begin and end in a single fiscal year should 

be charged to the appropriation in effect when the training services are rendered.”

The Briefing P aper goes on to state that:

The RRB’s bulk training agreem ent was designed to provide individual training 

classes. Course selection and attendance [were] not specified at the time the 

SF-182 w as issued. This is not an instance in which a single, non-severable 

course extends across fiscal years. The classes provided under the agreem ent 

were scheduled separately for any number of different individuals at a variety of 

dates and times. At the end of FY 2000, all of the training had not been 

scheduled.

The group training services to be provided on-site at RRB headquarters are not 

severable. However, severability is not an issue since there w as no perform ance 

under the contract during FY 2000. The RRB did not confirm the availability of 

its personnel and facilities before entering into the agreem ent. As a result, the 

agency w as unable to detail the designated staff to training before the end of the 

fiscal year and the class could not be held during FY 2000.

The two agreem ents neither restricted contractor perform ance to FY 2000 nor 

provide[d] an escape clause for the RRB in the event that all services w ere not 

provided during FY 2000.
The Briefing P aper concludes that the cost of the group training agreem ent and som e 

of the cost of the bulk training agreem ent should be charged to the RRB’s FY 2001 

appropriation because they are agreem ents for severable services and perform ance 

actually occurs in FY 2001.

-IIThe time limits on the availability of appropriations are of course one of the chief 

m ethods by which Congress controls expenditure. An expenditure m ade in advance of 

an appropriation would violate the Anti-Deficiency Act. "One of the fundam ental 

principles of appropriations law is the so-called bona fide n eeds rule: A fiscal year 

appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, 

or in som e cases arising prior to but continuing to exist in, the fiscal year for which the 

appropriation w as m ade.”1 If the obligations entered into by the RRB w ere for training 

needed in fiscal year 2000, and if the services were entire and not severable, the costs 

should be charged to fiscal year 2000.

The Briefing P aper concedes that the group training service to be provided on-site at 

RRB headquarters are not severable. The issue remaining regarding th ese services, 

then, is w hether there was a bona fide need for them in fiscal year 2000. W hether 

there w as such a need is a factual determination. The Bureau of Information Services 

advises that the plan for PC SAS training was to have the training scheduled in fiscal 

year 2000. “However, there was difficulty in getting the targeted audience together for 

various reasons [including that] the PC lab was in use, several of the people in the 

potential audience (both in programs and BIS) were involved in the implementation of 

the pending legislation (H.R. 4844), and the cost of living (COL) adjustm ent w as coming

Although the Briefing Paper bases its conclusion on the fact that none of the group 

training actually was provided in fiscal year 2000, that fact is only relevant as evidence 

of the existence of a bona fide need in fiscal year 2000. For example, if the training did 

not take place in fiscal year 2000 because the RRB em ployees to be trained w ere not 

to be hired until fiscal year 2001, the training could not have been used in fiscal year 

2000 and accordingly there would be no bona fide need for the training in that fiscal 

year. However, the information provided by BIS and quoted above indicates that there 

was a bona fide need for the training at the time the obligation w as incurred, and that it 

was intended that the training would be provided in fiscal year 2000. Accordingly, it is 

my opinion that the appropriation for fiscal year 2000 is the correct appropriation to be 

charged for the cost of the group training.

1 GAO/OGC-91-5 Appropriations Law-Vol. I

2 E-mail dated November 14, 2000, from Reginald W. Wiedman to Robert T. Rose.
In regard to the bulk training, som e of which was performed in fiscal year 2000, the 

Briefing Paper concludes that that training is a severable service so that the cost of that 

training which occurs in fiscal year 2001 should be charged to fiscal year 2001. 

Apparently there is no question but that there was a bona fide need for this training in 

fiscal year 2000, when the obligation for it was incurred.

A contract which is viewed as “entire” is chargeable to the fiscal year in which it

w as made, notwithstanding that performance may have extended into the

following fiscal year. The determining factor for whether services are severable

or entire appears to be whether they represent a single undertaking.

* * *

* * * where the services are continuing and recurring in nature, the contract is 

severable and the services must be charged to the fiscal year(s) in which they 

are rendered. **

Severable services are those services, such as day-to-day office cleaning, which are 

ongoing and which cannot be used all at once.

The Briefing Paper concludes that the bulk training services w ere severable b ecause 

the classes “w ere not an instance in which a single, non-severable course extends 

across fiscal years. The classes provided under the agreem ent w ere scheduled 

separately for any number of different individuals at a variety of dates and times. At the 

end of FY 2000, all of the training had not been scheduled.”4

GAO’s Principles of Federal Appropriations Law5 states that:

Training tends to be nonseverable. Thus, where a training obligation is incurred 

in one fiscal year, the entire cost is chargeable to that year, regardless of the fact 

that performance may extend into the following year. [Citations omitted.] In 70

Comp. G e n . (B-238940, February 25,1991), training which began on the first

day of FY 1990 was held chargeable to 1989 appropriations w here the training 

w as beyond the agency’s control, and the time between procurem ent and 

performance was not excessive. If some particular training w ere severable (it is

3 GAO/OGC-91-5 Appropriations Law-Vol. I

4 What appears to be meant by this last sentence is that by the end of fiscal year 2000 some of the training had not

been scheduled (since some of the training had already occurred), not that none of it had been scheduled. Actually

almost all of it had either been performed or was scheduled (see e-mail of November 14, 2000, from Reginald W.

Wiedman to Robert T. Rose).

5 GAO/OGC-91-91-5 Appropriations Law-Vol. I
not entirely clear when this might be the case), the contract could not cross fiscal 

year lines and payment would have to be apportioned betw een the fiscal years in 

which the training is actually conducted. [Citation omitted.]

It appears to m e that the type of training that might be considered severable would be 

something like a collection of college courses leading to a college degree for an 

individual, since those courses (to som e extent) must be taken in sequence over a 

substantial period time.6 Training which is severable might also be routine ongoing 

training. It does not appear that the bulk training contracted for falls into th ese 

categories. The obligation w as incurred in February 2000 “to satisfy the bureau’s 

training needs for fiscal year 2000”7 and it was intended that the training be used in 

fiscal year 2000. BIS w as then prevented from using all of the training by the end of 

fiscal year 2000 for a num ber of unforeseeable reasons. It is not the case, as 

suggested in the Briefing Paper, that only a “single non-severable course" could extend 

across fiscal years. W hat w as contracted for was not sequential training or a random 

store of training to be used when needed, but rather the training needs as a whole for 

the year in which the obligation occurred. This service is an entire product to be 

obtained by the RRB and, accordingly, it is not determinative that som e of the training 

occurred in fiscal year 2001.

It is my conclusion, therefore, that all of the costs for the training at issue in the Briefing 

Paper should be chargeable to the fiscal year 2000 appropriation and that, 

consequently, there is no violation of the Anti-Deficiency Act.

MCLitt:cmw

H :\CONTF^CT\antideficiency. mcl .doc

6 See the footnote on page 12 of the Briefing Paper which quotes a hypothetical description of severable training.

7 E-mail of November 14, 2000, from Reginald W. Wiedman to Robert T. Rose.