Union Calendar No. 391

104th Congress, 2nd Session – – – – – – – – – – House Report 104–745

LAWS RELATED TO FEDERAL FINANCIAL

MANAGEMENT

As Amended Through December 31, 1995

NINTH REPORT

BY THE

COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT

AUGUST 2, 1996.—Committed to the Committee of the Whole House on

the State of the Union and ordered to be printed
LAWS RELATED TO FEDERAL FINANCIAL MANAGEMENT

As Amended Through December 31, 1995
U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

25–575 CC 1996

Union Calendar No. 391

104th Congress, 2nd Session – – – – – – – – – – House Report 104–745

LAWS RELATED TO FEDERAL FINANCIAL

MANAGEMENT

As Amended Through December 31, 1995

NINTH REPORT

BY THE

COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT

AUGUST 2, 1996.—Committed to the Committee of the Whole House on

the State of the Union and ordered to be printed
(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

WILLIAM F. CLINGER, JR., Pennsylvania, Chairman

BENJAMIN A. GILMAN, New York

DAN BURTON, Indiana

J. DENNIS HASTERT, Illinois

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

STEVEN SCHIFF, New Mexico

ILEANA ROS-LEHTINEN, Florida

WILLIAM H. ZELIFF, JR., New Hampshire

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

PETER BLUTE, Massachusetts

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

JON D. FOX, Pennsylvania

RANDY TATE, Washington

DICK CHRYSLER, Michigan

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

WILLIAM J. MARTINI, New Jersey

JOE SCARBOROUGH, Florida

JOHN B. SHADEGG, Arizona

MICHAEL PATRICK FLANAGAN, Illinois

CHARLES F. BASS, New Hampshire

STEVE C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

ROBERT L. EHRLICH, JR., Maryland

CARDISS COLLINS, Illinois

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

JOHN M. SPRATT, JR., South Carolina

LOUISE MCINTOSH SLAUGHTER, New

York

PAUL E. KANJORSKI, Pennsylvania

GARY A. CONDIT, California

COLLIN C. PETERSON, Minnesota

KAREN L. THURMAN, Florida

CAROLYN B. MALONEY, New York

THOMAS M. BARRETT, Wisconsin

BARBARA-ROSE COLLINS, Michigan

ELEANOR HOLMES NORTON, District of

Columbia

JAMES P. MORAN, Virginia

GENE GREEN, Texas

CARRIE P. MEEK, Florida

CHAKA FATTAH, Pennsylvania

BILL K. BREWSTER, Oklahoma

TIM HOLDEN, Pennsylvania

ELIJAH CUMMINGS, Maryland

———

BERNARD SANDERS, Vermont

(Independent)

JAMES L. CLARKE, Staff Director

KEVIN SABO, General Counsel

JUDITH MCCOY, Chief Clerk

BUD MYERS, Minority Staff Director
(iii)

LETTER OF TRANSMITTAL

HOUSE OF REPRESENTATIVES,

Washington, DC, August 2, 1996.

Hon. NEWT GINGRICH,

Speaker of the House of Representatives,

Washington, DC.

DEAR MR. SPEAKER: By direction of the Committee on Government Reform and Oversight, I submit herewith the committee’s

ninth report to the 104th Congress.

WILLIAM F. CLINGER, Jr.,

Chairman.

(V)

PREFACE

The Committee on Government Reform and Oversight has long

believed that effective financial management is critically important

to making the best decisions on the use of public resources in the

support of the security and well-being of the American people.

To assist it in fulfilling oversight responsibilities, the committee

has prepared this compilation of laws on financial management,

with references to related requirements and guidelines issued by

Federal agencies. This compilation is being released as an investigative report to serve as a reference guide in assisting the committee members and staff in their work. However, it should also

prove useful to our congressional colleagues and staff, Government

entities, and others interested in good stewardship of Federal resources.

The committee appreciates the assistance of Jeffrey C. Steinhoff

and Bruce K. Michelson, of the General Accounting Office, and

Kevin Sabo, the committee’s General Counsel, for their efforts in

preparing this investigative report.

(VII)

SUMMARY OF CONTENTS

Page

Preface ...................................................................................................................... v

Introduction .............................................................................................................. 3

Title 31, United States Code—Money and Finance (selected provisions) ........... 5

Title 1, United States Code—General Provisions (selected provisions) .............. 213

Title 2, United States Code—The Congress (selected provisions) ....................... 217

Title 5, United States Code—Government Organization and Employees (selected provisions) .................................................................................................. 325

Title 15, United States Code—Commerce and Trade (selected provisions) ........ 373

Title 39, United States Code—Postal Service (selected provisions) .................... 389

Title 40, United States Code—Public Buildings, Property, and Works (selected

provisions) ............................................................................................................. 397

Title 41, United States Code—Public Contracts (selected provisions) ................ 403

Title 44, United States Code—Public Printing and Documents (selected provisions) ..................................................................................................................... 417

Debt Collection Improvement Act of 1996 ............................................................. 425

Single Audit Act Amendments of 1996 .................................................................. 450

Major Laws on Financial Management (Original Laws) ...................................... 461

Appendices relating to the United States Code and Code of Federal Regulations ....................................................................................................................... 563

Appendices relating to issuances of the General Accounting Office, the Office

of Management and Budget, the Department of the Treasury, the Joint

Financial Management Improvement Program, the Federal Accounting

Standards Advisory Board, and the Cost Accounting Standards Board ......... 573

Appendices cross indexing federal financial management laws to sections

of the United States Code ................................................................................... 603

(IX)

OVERALL CONTENTS

Page

Preface ...................................................................................................................... v

Summary of Contents .............................................................................................. vii

Overall Contents ...................................................................................................... ix

Abbreviations and Symbols ..................................................................................... xiii

Introduction .............................................................................................................. 3

Selected provisions of title 31, United States Code—Money and Finance .......... 5

Table of sections ............................................................................................... 7

Chapter:

1. Definitions (§§ 101–103) ...................................................................... 15

3. Department of Treasury (§§ 301–310, 321–331) ............................... 16

5. Office of Management and Budget (§§ 501–506, 521–522) .............. 26

7. General Accounting Office (§§ 701–703, 711–720) ............................ 39

9. Agency Chief Financial Officers (§§ 901–903) ................................... 50

11. The Budget and Fiscal, Budget, and Program Information

(§§ 1101–1119) .................................................................................... 54

13. Appropriations (§§ 1301–1310, 1321–1324, 1351–1353) ................... 71

15. Appropriation Accounting (§§ 1501–1503, 1511–1519, 1531–1537,

1551–1558) .......................................................................................... 93

31. Public Debt (§§ 3101–3113, 3121–3130) ............................................ 108

33. Depositing, Keeping, and Paying Money (§§ 3301–3305, 3321–

3335, 3341–3343) ................................................................................ 122

35. Accounting and Collection (§§ 3501, 3511–3515, 3521–3532, 3541–

3545) .................................................................................................... 135

37. Claims (§§ 3701–3702, 3711–3720A, 3721–3733) ............................. 152

39. Prompt Payment (§§ 3901–3907) ........................................................ 189

75. Requirements for Single Audits (§§ 7501–7507) ............................... 200

91. Government Corporations (§ 9101) .................................................... 208

97. Miscellaneous (§§ 9701–9704) ............................................................. 209

Selected provisions of title 1, United States Code—General Provisions ............. 213

Table of sections ............................................................................................... 215

Chapter:

2. Acts and Resolutions; Formalities of Enactment; Repeals, Sealing

of Instruments (§ 105) ........................................................................ 216

Selected provisions of title 2, United States Code—the Congress ....................... 217

Table of sections ............................................................................................... 219

Chapter:

6. Congressional and Committee Procedure; Investigations (§ 190d) . 221

17. Congressional Budget Office (§§ 601–603, 605–606) ........................ 222

17A. Congressional Budget and Fiscal Operations (§§ 621–623, 631–

644, 651–656, 661, 661a–661f, 665, 665a–665e) .............................. 229

17B. Impoundment Control (§§ 681–688) ................................................ 273

20. Emergency Powers to Eliminate Budget Deficits (§§ 900–902,

904–907, 907a–907d, 908) ................................................................. 281

Selected provisions of title 5, United States Code—Government Organization

and Employees ..................................................................................................... 325

Table of sections ............................................................................................... 327

Chapter:

1. Organization (§§ 101–103) .................................................................... 328

3. Powers (§ 306) ........................................................................................ 329

5. Administrative Procedure (§§ 551, 552a) ............................................. 331

Appendix 3. Inspector General Act of 1978 (§§ 1–12) ............................. 350

Selected provisions of title 15, United States Code—Commerce and Trade ....... 373

Table of sections ............................................................................................... 375

Chapter:

14A. Aid to Small Business (§ 644) .......................................................... 376
Page

X

Selected provisions of title 15, United States Code—Commerce and Trade—

Continued

Chapter—Continued

21. National Policy on Employment and Productivity (§ 1022) ............. 386

Selected provisions of title 39, United States Code—Postal Service ................... 389

Table of sections ............................................................................................... 391

Chapter:

28. Strategic Planning and Performance Management (§§ 2801–2805) 392

Selected provisions of title 40, United States Code—Public Buildings, Property, and Works .................................................................................................... 397

Table of sections ............................................................................................... 399

Chapter:

10. Management and Disposal of Goverment Property (§ 472) ............. 400

Selected provisions of title 41, United States Code—Public Contracts ............... 403

Table of sections ............................................................................................... 405

Chapter:

1. General Provisions (§§ 5a,11) ............................................................... 406

7. Office of Federal Procurement Policy (§ 422) ...................................... 407

9. Contract Disputes (§§ 601, 605, 611) ................................................... 412

Selected provisions of title 44, United States Code—Public Printing and Documents ..................................................................................................................... 417

Table of sections ............................................................................................... 419

Chapter:

35. Coordination of Federal Information Policy (§ 3502) ........................ 420

Debt Collection Improvement Act of 1996 ............................................................. 425

Single Audit Act Amendments of 1996 .................................................................. 450

Major Laws on Financial Management (Original Acts) ....................................... 461

Budget and Accounting Act of 1921 ................................................................ 462

Budget and Accounting Procedures Act of 1950 ............................................ 471

Legislative Reorganization Act of 1970 .......................................................... 487

Impoundment Control Act of 1974 .................................................................. 493

Federal Managers’ Financial Integrity Act of 1982 ....................................... 502

Debt Collection Act of 1982 ............................................................................. 504

Single Audit Act of 1984 .................................................................................. 514

Chief Financial Officers Act of 1990 ............................................................... 523

Cash Management Improvement Act of 1992 ................................................ 541

Government Performance and Results Act of 1993 ....................................... 544

Government Management Reform Act of 1994 .............................................. 556

Appendices relating to the United States Code and Code of Federal Regulations ....................................................................................................................... 563

Appendix:

I A Brief Explanation of the United States Code .................................. 563

II A Brief Explanation of the Code of Federal Regulations .................. 569

Appendices relating to issuances of the General Accounting Office, the Office

of Management and Budget, the Department of the Treasury, the Joint

Financial Management Improvement Program, the Federal Accounting

Standards Advisory Board, and the Cost Accounting Standards Board ......... 573

Appendix:

III Financial Management Issuances of the General Accounting Office ....................................................................................................... 573

IV Financial Management Issuances of the Office of Management

and Budget ......................................................................................... 579

V Financial Management Issuances of the Department of the Treasury ....................................................................................................... 585

VI The Joint Financial Management Improvement Program ............... 591

VII The Federal Accounting Standards Advisory Board ....................... 595

VIII The Cost Accounting Standards Board ........................................... 599

Appendixes cross indexing federal financial management laws to sections

of the United States Code ................................................................................... 603

Appendix:

IX Popular Names of Selected Major Laws Cross-Indexed to Sections

of the United States Code and Statute or Public Law .................... 603

X Selected Laws Relating to Federal Financial Management by Statue or Public Law Number Indexed to Popular Name ..................... 607
xi

Notes Contained in Sections of the Code:

31 U.S.C. 501 .................................................................................................... 30

31 U.S.C. 1343 .................................................................................................. 80

31 U.S.C. 1535 .................................................................................................. 100

31 U.S.C. 1115 .................................................................................................. 67

31 U.S.C. 3701 .................................................................................................. 153

2 U.S.C. 621 ...................................................................................................... 229

2 U.S.C. 632 ...................................................................................................... 238

2 U.S.C. 665 ...................................................................................................... 268

5 U.S.C. App. 3 & 5 .......................................................................................... 356

(XIII)

ABBREVIATIONS AND SYMBOLS

CASB—Cost Accounting Standards Board

CBO—Congressional Budget Office

C.F.R.—Code of Federal Regulations

Code—United States Code

FASAB—Federal Accounting Standards Advisory Board

GAO—General Accounting Office

JFMIP—Joint Financial Management Improvement Program

OMB—Office of Management and Budget

PL—Public Law

Pub. L.—Public Law

sec.—section of the United States Code

stat.—statute

TFM—Treasury Financial Manual

U.S.C.—United States Code

U.S.C.A.—United States Code Annotated

§—section of the United States Code

§§—more than one section of the United States Code
1

INTRODUCTION

3

1The information in this report comes from the United States Code Annotated (U.S.C.A.).

INTRODUCTION

This report contains the laws related to financial management in

the federal government as of December 31, 1995, and also includes

two financial management related laws passed during 1996, as explained below. The Print is intended as a guide for easy access to

the codified laws and references to the related requirements and

guidelines.

LAWS RELATED TO FINANCIAL MANAGEMENT

The selected provisions of the Code,1 as of December 31, 1995,

contained in this report are mostly from Title 31, ‘‘Money and Finance.’’ Title 31 is the primary title containing financial management matters. Also included, however, are selected sections containing financial management mandates from eight other titles.

(See appendix I for a further explanation of the provisions of the

Code included in this report.) Most sections of the Code contain

supplemental notes providing further requirements or explanations. In several sections of the Code contained in this Print,

notes are provided where necessary to assist in interpreting the

meaning of the section. They are in italic print to differentiate

them from the text of the Code.

In addition, the full text of the recently enacted Debt Collection

Improvement Act of 1996, and the Single Audit Act Amendments

of 1996 are not included in the Code as of December 31, 1995, but

are in this Print. Further, 11 major laws on financial management,

though appearing in various parts of the Code in this Print, are

also included separately as originally enacted.

REQUIREMENTS AND GUIDELINES ISSUED BY AGENCIES OR ENTITIES

The laws contained in this report are supplemented by references

to selected requirements and guidelines issued by federal agencies.

Where applicable, at the end of each chapter of the Code, the related selected references are cited. The citations are in italic print to

differentiate them from the text of the Code.

The references cited are from seven sources. The first source is

the requirements contained in the ‘‘Code of Federal Regulations’’

(C.F.R.). The C.F.R. contains the rules issued by agencies and is

further explained in appendix II. The next five sources are the financial management issuances other than those contained in the

C.F.R. of the ‘‘oversight’’ agencies or entities. They are the:

General Accounting Office (GAO) (see appendix III);

Office of Management and Budget (OMB) (see appendix IV);

Department of the Treasury (see appendix V);

Joint Financial Management Improvement Program (JFMIP)

(see appendix VI); and
INTRODUCTION 4

2The Code citation contains all amendments to the law as of December 31, 1995, related to

the sections of Code included in this Print.

Federal Accounting Standards Advisory Board (FASAB) (see appendix VII).

Each of these five appendices contains a short description of the

role of the agency or entity and lists the applicable selected requirements and guidelines and, the related parts of the Code. Appendices III, IV, and V also contain a cross-index listing the section

of the Code in sequential order followed by the applicable requirement or guideline. In addition, each of these five appendices include the address and telephone numbers of the agency or entity

for use in obtaining information or acquiring copies of the applicable requirements and guidelines.

The seventh source of financial management issuances is the

Cost Accounting Standards Board (CASB). Appendix VIII provides

a brief description of the CASB, its applicability to federal financial

management, the related section of the Code pertaining to it, and

portions of the C.F.R. containing the standards it issued. The address and telephone number of the CASB is provided if additional

information is needed.

OTHER APPENDICES

Appendices IX and X provide cross-indexes of important financial

management laws by popular name and statute citation or public

law (PL) number.

Appendix IX lists the major laws by popular name with a corresponding reference to the U.S.C. citation and statute citation or

PL number.2 Thus, by knowing only the popular name, such as the

Chief Financial Officers Act of 1990, the user can identify the

U.S.C. citations and the related statute or PL number. For example, the Chief Financial Officers Act of 1990 will cross-index to several U.S.C. citations contained in this Print and PL 101–576.

Appendix X lists the statute citation (if the law was enacted before 1957) or PL number in sequential order cross-indexed to the

popular name of the law. For example, PL 95–510 will contain a

cross-index to: ‘‘Legislative Reorganization Act of 1970.’’

TABLE OF CONTENTS

In addition to the summary contents and the overall contents

preceding this introduction, the selected provisions of each the nine

Titles of the Code contained in this report will be preceded by a

table listing the sections included from that title.
5

SELECTED PROVISIONS OF TITLE 31,

UNITED STATES CODE—

MONEY AND FINANCE

7

3This table of sections is not part of Title 31 but is included for the convenience of the reader.

Table of Sections of Selected Provisions of

Title 31 3

TITLE 31, UNITED STATES CODE

MONEY AND FINANCE

* * * * * * *

SUBTITLE I—GENERAL

CHAPTER 1—DEFINITIONS

Sec.

101. Agency.

102. Executive Agency.

103. United States.

CHAPTER 3—DEPARTMENT OF THE TREASURY

SUBCHAPTER I—ORGANIZATION

Sec.

301. Department of the Treasury.

302. Treasury of the United States.

303. Bureau of Engraving and Printing.

304. United States Mint.

305. Federal Financing Bank.

306. Fiscal Service.

307. Office of the Comptroller of the Currency.

308. United States Customs Service.

309. Office of Thrift Supervision.

310. Continuing in office.

321. General authority of the Secretary.

322. Working capital fund.

323. Investment of operating cash.

324. Disposing and extending the maturity of obligations.

325. International affairs authorization.

326. Availability of appropriations for certain expenses.

327. Advancements and reimbursements for services.

328. Accounts and payments of former disbursing officials.

329. Limitations on outside activities.

330. Practice before the Department.

331. Reports.

CHAPTER 5—OFFICE OF MANAGEMENT AND BUDGET

SUBCHAPTER I—ORGANIZATION

Sec.

501. Office of Management and Budget.

502. Officers.

503. Functions of Deputy Director for Management.

504. Office of Federal Financial Management.
SELECTED PROVISIONS OF TITLE 31 8

505. Office of Information and Regulatory Affairs.

506. Office of Federal Procurement Policy.

521. Employees.

522. Necessary expenditures.

CHAPTER 7—GENERAL ACCOUNTING OFFICE

SUBCHAPTER I—DEFINITIONS AND GENERAL ORGANIZATION

Sec.

701. Definitions.

702. General Accounting Office.

703. Comptroller General and Deputy Comptroller General.

SUBCHAPTER II—GENERAL DUTIES AND POWERS

Sec.

711. General authority.

712. Investigating the use of public money.

713. Audit of Internal Revenue Service and Bureau of Alcohol, Tobacco, and Firearms.

714. Audit of Financial Institutions Examination Council, Federal Reserve Board,

Federal Reserve Banks, Federal Deposit Insurance Corporation, and Office of Comptroller of the Currency.

715. Audit of accounts and operations of the District of Columbia government.

716. Availability of information and inspection of records.

717. Evaluating programs and activities of the United States Government.

718. Availability of draft reports.

719. Comptroller General reports.

720. Agency reports.

CHAPTER 9—AGENCY CHIEF FINANCIAL OFFICERS

Sec.

901. Establishment of agency Chief Financial Officers.

902. Authority and functions of agency Chief Financial Officers.

903. Establishment of agency Deputy Chief Financial Officers.

* * * * * * *

SUBTITLE II—-THE BUDGET PROCESS

CHAPTER 11—THE BUDGET AND FISCAL, BUDGET, AND PROGRAM

INFORMATION

Sec.

1101. Definitions.

1102. Fiscal year.

1103. Budget ceiling.

1104. Budget and appropriations authority of the President.

1105. Budget contents and submission to Congress.

1106. Supplemental budget estimates and changes.

1107. Deficiency and supplemental appropriations.

1108. Preparation and submission of appropriations requests to the President.

1109. Current programs and activities estimates.

1110. Year-ahead requests for authorizing legislation.

1111. Improving economy and efficiency.

1112. Fiscal, budget, and program information.

1113. Congressional information.

1114. [Repealed.].

1115. Performance plans.

1116. Program performance reports.

1117. Exemption.

1118. Pilot projects for performance goals.

1119. Pilot projects for performance budgeting.
9 SELECTED PROVISIONS OF TITLE 31

CHAPTER 13—APPROPRIATIONS

SUBCHAPTER I—GENERAL

Sec.

1301. Application.

1302. Determining amounts appropriated.

1303. Effect of changes in titles of appropriations.

1304. Judgments, awards, and compromise settlements.

1305. Miscellaneous permanent appropriations.

1306. Use of foreign credits.

1307. Public building construction.

1308. Telephone and metered services.

1309. Social security tax.

1310. Appropriations for private organizations.

SUBCHAPTER II—TRUST FUNDS AND REFUNDS

Sec.

1321. Trust funds.

1322. Payments of unclaimed trust fund amounts and refund of amounts erroneously deposited.

1323. Trust funds for certain fees, donations, quasi-public amounts, and unearned

amounts.

1324. Refund of internal revenue collections.

SUBCHAPTER III—LIMITATIONS, EXCEPTIONS, AND PENALTIES

Sec.

1341. Limitation on expending and obligating amounts.

1342. Limitations on voluntary services.

1343. Buying and leasing passenger motor vehicles and aircraft.

1344. Passenger carrier use.

1345. Expenses of meetings.

1346. Commissions, councils, boards, and interagency and similar groups.

1347. Appropriations or authorizations required for agencies in existence for more

than one year.

1348. Telephone installation and charges.

1349. Adverse personnel actions.

1350. Criminal penalty.

1351. Reports on violations.

1352. Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions.

1353. Acceptance of travel and related expenses from non-Federal sources.

CHAPTER 15—APPROPRIATION ACCOUNTING

SUBCHAPTER I—GENERAL

Sec.

1501. Documentary evidence requirement for Government obligations.

1502. Balances available.

1503. Comptroller General reports of amounts for which no accounting is made.

SUBCHAPTER II—APPORTIONMENT

Sec.

1511. Definition and application.

1512. Apportionment and reserves.

1513. Officials controlling apportionments.

1514. Administrative division of apportionments.

1515. Authorized apportionments necessitating deficiency or supplemental appropriations.

1516. Exemptions.

1517. Prohibited obligations and expenditures.

1518. Adverse personnel actions.

1519. Criminal penalty.
SELECTED PROVISIONS OF TITLE 31 10

SUBCHAPTER III—TRANSFERS AND REIMBURSEMENTS

Sec.

1531. Transfers of functions and activities.

1532. Withdrawal and credit.

1533. Transfers of appropriations for salaries and expenses to carry out national

defense responsibilities.

1534. Adjustments between appropriations.

1535. Agency agreements.

1536. Crediting payments from purchases between executive agencies.

1537. Services between the United States Government and the District of Columbia government.

SUBCHAPTER IV—CLOSING ACCOUNTS

Sec.

1551. Definitions; applicability of subchapter.

1552. Procedure for appropriation accounts available for definite periods.

1553. Availability of appropriation accounts to pay obligations.

1554. Audit, control, and reporting.

1555. Closing of appropriation accounts available for indefinite periods.

1556. Comptroller General: reports on appropriation accounts.

1557. Authority for exemptions in appropriation laws.

1558. Availability of funds following resolution of a protest.

* * * * * * *

SUBTITLE III—FINANCIAL MANAGEMENT

CHAPTER 31—PUBLIC DEBT

SUBCHAPTER I—BORROWING AUTHORITY

Sec.

3101. Public debt limit.

3102. Bonds.

3103. Notes.

3104. Certificates of indebtedness and Treasury bills.

3105. Savings bonds and savings certificates.

3106. Retirement and savings bonds.

3107. Increasing interest rates and investment yields on retirement bonds.

3108. Prohibition against circulation privilege.

3109. Tax and loss bonds.

3110. Sale of obligations of governments of foreign countries.

3111. New issue used to buy, redeem, or refund outstanding obligations.

3112. Sinking fund for retiring and cancelling bonds and notes.

3113. Accepting gifts.

SUBCHAPTER II—ADMINISTRATIVE

Sec.

3121. Procedure.

3122. Banks and trust companies as depositaries.

3123. Payment of obligations and interest on the public debt.

3124. Exemption from taxation.

3125. Relief for lost, stolen, destroyed, mutilated, or defaced obligations.

3126. Losses and relief from liability related to redeeming savings bonds and

notes.

3127. Credit to officers, employees, and agents for stolen Treasury notes.

3128. Proof of death to support payment.

3129. Appropriation to pay expenses.

3130. Annual public debt report.

CHAPTER 33—DEPOSITING, KEEPING, AND PAYING MONEY

SUBCHAPTER I—DEPOSITS AND DEPOSITORIES

Sec.

3301. General duties of the Secretary of the Treasury.
11 SELECTED PROVISIONS OF TITLE 31

3302. Custodians of money.

3303. Designation of depositaries.

3304. Transfers of public money from depositaries.

3305. Audits of depositaries.

SUBCHAPTER II—PAYMENTS

Sec.

3321. Disbursing authority in the executive branch.

3322. Disbursing officials.

3323. Warrants.

3324. Advances.

3325. Vouchers.

3326. Waiver of requirements for warrants and advances.

3327. General authority to issue checks and other drafts.

3328. Paying checks and drafts.

3329. Withholding checks to be sent to foreign countries.

3330. Payment of Department of Veterans Affairs checks for the benefit of individuals in foreign countries.

3331. Substitute checks.

3332. Required direct deposit.

3333. Relief for payments made without negligence.

3334. Cancellation and proceeds distribution of Treasury checks.

3335. Timely disbursement of Federal funds.

SUBCHAPTER III—MISCELLANEOUS

Sec.

3341. Sale of Government warrants, checks, drafts, and obligations.

3342. Check cashing and exchange transactions.

3343. Check forgery insurance fund.

CHAPTER 35—ACCOUNTING AND COLLECTION

SUBCHAPTER I—GENERAL

Sec.

3501. Definition

SUBCHAPTER II—ACCOUNTING REQUIREMENTS, SYSTEMS, AND INFORMATION

Sec.

3511. Prescribing accounting requirements and developing accounting systems.

3512. Executive agency accounting and other financial management reports and

plans.

3513. Financial reporting and accounting system.

3514. Discontinuing certain accounts maintained by the Comptroller General.

3515. Financial statements of agencies.

SUBCHAPTER III—AUDITING AND SETTLING ACCOUNTS

Sec.

3521. Audits by agencies.

3522. Making and submitting accounts.

3523. General audit authority of the Comptroller General.

3524. Auditing expenditures approved without vouchers.

3525. Auditing nonappropriated fund activities.

3526. Settlement of accounts.

3527. General authority to relieve accountable officials and agents from liability.

3528. Responsibilities and relief from liability of certifying officials.

3529. Request for decisions of the Comptroller General.

3530. Adjusting accounts.

3531. Property returns.

3532. Notification of account deficiencies.

SUBCHAPTER IV—COLLECTION

Sec.

3541. Distress warrants.

3542. Carrying out distress warrants.
SELECTED PROVISIONS OF TITLE 31 12

4Sections from Subtitle IV of Title 31 were not selected for inclusion in this report because

the subject matter was not directly related to financial management.

3543. Postponing a distress warrant proceeding.

3544. Rights and remedies of the United States Government reserved.

3545. Civil action to recover money.

CHAPTER 37—CLAIMS

SUBCHAPTER I—GENERAL

Sec.

3701. Definitions and application.

3702. Authority of the Comptroller General to settle claims.

SUBCHAPTER II—CLAIMS OF THE UNITED STATES GOVERNMENT

Sec.

3711. Collection and compromise.

3712. Time limitations for presenting certain claims of the Government.

3713. Priority of Government claims.

3714. Keeping money due States in default.

3715. Buying real property of a debtor.

3716. Administrative offset.

3717. Interest and penalty on claims.

3718. Contracts for collection services.

3719. Reports on debt collection activities.

3720. Collection of payments.

3720A. Reduction of tax refund by amount of debt.

SUBCHAPTER III—CLAIMS AGAINST THE UNITED STATES GOVERNMENT

Sec.

3721. Claims of personnel of agencies and the District of Columbia government for

personal property damage or loss.

3722. Claims of officers and employees of Government penal and correctional institutions.

3723. Small claims for privately owned property damage or loss.

3724. Claims for damages caused by investigative or law enforcement officers of

the Department of Justice.

3725. Claims of non-nationals for personal injury or death in a foreign country.

3726. Payment for transportation.

3727. Assignments of claims.

3728. Setoff against judgment.

3729. False claims.

3730. Civil actions for false actions.

3731. False claims procedure.

3732. False claims jurisdiction.

3733. Civil investigative demands.

CHAPTER 39—PROMPT PAYMENT

Sec.

3901. Definitions and applications.

3902. Interest penalties.

3903. Regulations.

3904. Limitations on discount payments.

3905. Payment provisions relating to construction contracts.

3906. Reports.

3907. Relationship to other laws.

* * * * * * *

SUBTITLE V 4—GENERAL ASSISTANCE ADMINISTRATION

CHAPTER 75—-REQUIREMENTS FOR SINGLE AUDITS

Sec.

7501. Definitions.
13 SELECTED PROVISIONS OF TITLE 31

7502. Audit requirements; exemptions.

7503. Relation to other audit requirements.

7504. Cognizant agency responsibilities.

7505. Regulations.

7506. Monitoring responsibilities of the Comptroller General.

7507. Effective date; report.

* * * * * * *

SUBTITLE VI—MISCELLANEOUS

CHAPTER 91—-GOVERNMENT CORPORATIONS.

Sec.

9101. Definitions.

CHAPTER 97—MISCELLANEOUS

Sec.

9701. Fees and charges for Government Services and Things of Value.

9702. Investment of Trust Funds.

9703. Managerial Accountability and Flexibility.

704. Pilot Projects for Managerial Accountability and Flexibility.

15

TITLE 31—MONEY AND FINANCE

Subtitle I—General

* * * * * * *

CHAPTER 1—DEFINITIONS

SEC. 101. AGENCY.

In this title, ‘‘agency’’ means a department, agency, or instrumentality of the United States Government.

SEC. 102. EXECUTIVE AGENCY.

In this title, ‘‘executive agency’’ means a department, agency, or

instrumentality in the executive branch of the United States Government.

SEC. 103. UNITED STATES.

In this title, ‘‘United States’’, when used in a geographic sense,

means the States of the United States and the District of Columbia.
16

TITLE 31—MONEY AND FINANCE

Subtitle I—General

* * * * * * *

CHAPTER 3—DEPARTMENT OF THE TREASURY

Subchapter I—Organization

SEC. 301. DEPARTMENT OF THE TREASURY.

(a) The Department of the Treasury is an executive department

of the United States Government at the seat of the Government.

(b) The head of the Department is the Secretary of the Treasury.

The Secretary is appointed by the President, by and with the advice and consent of the Senate.

(c) The Department has a Deputy Secretary of the Treasury appointed by the President, by and with the advice and consent of the

Senate. The Deputy Secretary shall carry out—

(1) duties and powers prescribed by the Secretary; and

(2) the duties and powers of the Secretary when the Secretary is absent or unable to serve or when the office of Secretary is vacant.

(d) The Department has 2 Under Secretaries, an Under Secretary

for Enforcement, 2 Deputy Under Secretaries, and a Treasurer of

the United States, appointed by the President, by and with the advice and consent of the Senate. The Department also has a Fiscal

Assistant Secretary appointed by the Secretary. They shall carry

out duties and powers prescribed by the Secretary. The President

may designate one Under Secretary as Counselor. When appointing

each Deputy Under Secretary, the President may designate the

Deputy Under Secretary as an Assistant Secretary.

(e) The Department has 7 Assistant Secretaries appointed by the

President, by and with the advice and consent of the Senate. The

Assistant Secretaries shall carry out duties and powers prescribed

by the Secretary. The Assistant Secretaries appointed under this

subsection are in addition to the Assistant Secretaries appointed

under subsection (d) of this section.

(f)(1) The Department has a General Counsel appointed by the

President, by and with the advice and consent of the Senate. The

General Counsel is the chief law officer of the Department. Without

regard to those provisions of title 5 governing appointment in the

competitive service, the Secretary may appoint not more than 5 Assistant General Counsels. The Secretary may designate one of the

Assistant General Counsels to act as the General Counsel when the

General Counsel is absent or unable to serve or when the office of

General Counsel is vacant. The General Counsel and Assistant
17 Sec. 306 CH. 3—DEPARTMENT OF THE TREASURY

General Counsels shall carry out duties and powers prescribed by

the Secretary.

(2) The President may appoint, by and with the advice and consent of the Senate, an Assistant General Counsel who shall be the

Chief Counsel for the Internal Revenue Service. The Chief Counsel

is the chief law officer for the Service and shall carry out duties

and powers prescribed by the Secretary.

(g) The Department shall have a seal.

SEC. 302. TREASURY OF THE UNITED STATES.

The United States Government has a Treasury of the United

States. The Treasury is in the Department of the Treasury.

SEC. 303. BUREAU OF ENGRAVING AND PRINTING.

(a) The Bureau of Engraving and Printing is a bureau in the Department of the Treasury.

(b) The head of the Bureau is the Director of the Bureau of Engraving and Printing appointed by the Secretary of the Treasury.

The Director—

(1) shall carry out duties and powers prescribed by the Secretary; and

(2) reports directly to the Secretary.

SEC. 304. UNITED STATES MINT.

(a) The United States Mint is a bureau in the Department of the

Treasury.

(b)(1) The head of the Mint is the Director of the Mint. The Director is appointed by the President, by and with the advice and

consent of the Senate. The term of the Director is 5 years. The

President may remove the Director from office. On removal, the

President shall send a message to the Senate giving the reasons for

removal.

(2) The Director shall carry out duties and powers prescribed by

the Secretary of the Treasury.

SEC. 305. FEDERAL FINANCING BANK.

The Federal Financing Bank, established under section 4 of the

Federal Financing Bank Act of 1973 (12 U.S.C. 2283), is subject to

the direction and supervision of the Secretary of the Treasury.

SEC. 306. FISCAL SERVICE.

(a) The Fiscal Service is a service in the Department of the

Treasury.

(b) The head of the Fiscal Service is the Fiscal Assistant Secretary appointed under section 301(d) of this title.

(c) The Fiscal Service has a—

(1) Bureau of Government Financial Operations, having as

its head a Commissioner of Government Financial Operations;

and

(2) Bureau of the Public Debt, having as its head a Commissioner of the Public Debt.

(d) The Secretary of the Treasury may designate another officer

of the Department to act as the Fiscal Assistant Secretary when

the Fiscal Assistant Secretary is absent or unable to serve or when

the office of Fiscal Assistant Secretary is vacant.
Sec. 307 CH. 3—DEPARTMENT OF THE TREASURY 18

SEC. 307. OFFICE OF THE COMPTROLLER OF THE CURRENCY.

The Office of the Comptroller of the Currency, established under

section 324 of the Revised Statutes (12 U.S.C. 1), is an office in the

Department of the Treasury.

SEC. 308. UNITED STATES CUSTOMS SERVICE.

The United States Customs Service, established under section 1

of the Act of March 3, 1927 (19 U.S.C. 2071), is a service in the

Department of the Treasury.

SEC. 309. OFFICE OF THRIFT SUPERVISION.

The Office of Thrift Supervision established under section 3(a) of

the Home Owners’ Loan Act shall be an office in the Department

of the Treasury.

SEC. 310. CONTINUING IN OFFICE.

When the term of office of an officer of the Department of the

Treasury ends, the officer may continue to serve until a successor

is appointed and qualified.

SEC. 321. GENERAL AUTHORITY OF THE SECRETARY.

(a) The Secretary of the Treasury shall—

(1) prepare plans for improving and managing receipts of the

United States Government and managing the public debt;

(2) carry out services related to finances that the Secretary

is required to perform;

(3) issue warrants for money drawn on the Treasury consistent with appropriations;

(4) mint coins, engrave and print currency and security documents, and refine and assay bullion, and may strike medals;

(5) prescribe regulations that the Secretary considers best

calculated to promote the public convenience and security, and

to protect the Government and individuals from fraud and loss,

that apply to anyone who may—

(A) receive for the Government, Treasury notes, United

States notes, or other Government securities; or

(B) be engaged or employed in preparing and issuing

those notes or securities;

(6) collect receipts;

(7) with a view to prosecuting persons, take steps to discover

fraud and attempted fraud involving receipts and decide on

ways to prevent and detect fraud; and

(8) maintain separate accounts of taxes received in each

State, territory, and possession of the United States, and collection district, with each account listing—

(A) each kind of tax;

(B) the amount of each tax; and

(C) the money paid as pay and allowances to officers and

employees of the Department collecting taxes in that

State, territory, possession, or district.

(b) The Secretary may—

(1) prescribe regulations to carry out the duties and powers

of the Secretary;

(2) delegate duties and powers of the Secretary to another officer or employee of the Department of the Treasury;
19 Sec. 321 CH. 3—DEPARTMENT OF THE TREASURY

(3) transfer within the Department the records, property, officers, employees, and unexpended balances of appropriations,

allocations, and amounts of the Department that the Secretary

considers necessary to carry out a delegation made under

clause (2) of this subsection;

(4) detail, in addition to details authorized under another

law, not more than 6 officers and employees of the Department

at any one time to enforce the laws related to the Department,

except that of those 6 officers and employees not more than 4

officers and employees—

(A) paid from the appropriations for the collection of customs may be so detailed;

(B) paid from the appropriations for internal revenue

may be so detailed; and

(C) paid from the appropriations for suppressing counterfeiting and other crimes may be so detailed;

(5) authorize, at rates and under conditions prescribed by the

Secretary, the private use of telephone lines controlled by the

Department when the use does not interfere with Department

business; and

(6) buy arms and ammunition required by officers and employees of the Department in carrying out their duties and

powers.

(c) Duties and powers of officers and employees of the Department are vested in the Secretary except duties and powers—

(1) vested by subchapter II of chapter 5 of title 5 in administrative law judges employed by the Secretary;

(2) of the Comptroller of the Currency; and

(3) of the Director of the Office of Thrift Supervision;

(d)(1) The Secretary of the Treasury may accept, hold, administer, and use gifts and bequests of property, both real and personal, for the purpose of aiding or facilitating the work of the Department of the Treasury. Gifts and bequests of money and the

proceeds from sales of other property received as gifts or bequests

shall be deposited in the Treasury in a separate fund and shall be

disbursed on order of the Secretary of the Treasury. Property accepted under this paragraph, and the proceeds thereof, shall be

used as nearly as possible in accordance with the terms of the gift

or bequest.

(2) For purposes of the Federal income, estate, and gift taxes,

property accepted under paragraph (1) shall be considered as a gift

or bequest to or for the use of the United States.

(3) The Secretary of the Treasury may invest and reinvest the

fund in public debt securities with maturities suitable for the needs

of the fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the

United States of comparable maturities. Income accruing from the

securities, and from any other property accepted under paragraph

(1), shall be deposited to the credit of the fund, and shall be disbursed on order of the Secretary of the Treasury for purposes as

nearly as possible in accordance with the terms of the gifts or bequests.
Sec. 322 CH. 3—DEPARTMENT OF THE TREASURY 20

(4) The Secretary of the Treasury shall, not less frequently than

annually, make a public disclosure of the amount (and sources) of

the gifts and bequests received under this subsection, and the purposes for which amounts in the separate fund established under

this subsection are expended.

(e) CERTAIN REORGANIZATION PROHIBITED.—The Secretary of the

Treasury may not merge or consolidate the Office of Thrift Supervision, or any of the functions or responsibilities of the Office or the

Director of such office, with the Office of the Comptroller of the

Currency or the Comptroller of the Currency.

SEC. 322. WORKING CAPITAL FUND.

(a) The Department of the Treasury has a working capital fund.

Amounts in the fund are available for expenses of operating and

maintaining common administrative services of the Department

that the Secretary of the Treasury, with the approval of the Director of the Office of Management and Budget, decides may be carried out more advantageously and more economically as central

services.

(b) Amounts in the fund remain available until expended.

Amounts may be appropriated to the fund.

(c) The fund consists of—

(1) amounts appropriated to the fund;

(2) to the extent transferred to the fund by the Secretary, the

reasonable value of supply inventories, equipment, and other

assets and inventories on order for providing services out of

amounts in the fund, less related liabilities and unpaid obligations;

(3) amounts received from the sale or exchange of property;

and

(4) payments received for loss or damage to property of the

fund.

(d) The fund shall be reimbursed, or credited with advance payments, from amounts available to the Department or from other

sources, for supplies and services at rates that will equal the expenses of operation, including accrual of annual leave and the depreciation of plant and equipment. Amounts the Secretary decides

are in excess of the needs of the fund shall be deposited at the end

of each fiscal year in the Treasury as miscellaneous receipts.

SEC. 323. INVESTMENT OF OPERATING CASH.

(a) To manage United States cash, the Secretary of the Treasury

may invest any part of the operating cash of the Treasury for not

more than 90 days. Investments may be made in obligations of—

(1) depositaries maintaining Treasury tax and loan accounts

secured by pledged collateral acceptable to the Secretary; and

(2) the United States Government.

(b) Subsection (a) of this section does not—

(1) require the Secretary to invest a cash balance held in a

particular account; or

(2) permit the Secretary to require the sale of obligations by

a particular person, dealer, or financial institution.

(c) The Secretary shall consider the prevailing market in prescribing rates of interest for investments under subsection (a)(1) of

this section.
21 Sec. 325 CH. 3—DEPARTMENT OF THE TREASURY

SEC. 324. DISPOSING AND EXTENDING THE MATURITY OF OBLIGATIONS.

(a) The Secretary of the Treasury may—

(1) dispose of obligations—

(A) acquired by the Secretary for the United States Government; or

(B) delivered by an executive agency; and

(2) make arrangements to extend the maturity of those obligations.

(b) The Secretary may dispose or extend the maturity of obligations under subsection (a) of this section in the way, in amounts,

at prices (for cash, obligations, property, or a combination of cash,

obligations, or property), and on conditions the Secretary considers

advisable and in the public interest.

(c) The authority under this section is in addition to authority

under another law.

SEC. 325. INTERNATIONAL AFFAIRS AUTHORIZATION.

(a) Under regulations prescribed by the Secretary of the Treasury, the Secretary may provide officers and employees of the Department of the Treasury carrying out international affairs duties

and powers of the Department with allowances and benefits comparable to those provided under chapter 9 of title I of the Foreign

Service Act of 1980 (22 U.S.C. 4081 et seq.).

(b) The following amounts may be appropriated to the Secretary

for the fiscal year ending September 30, 1982:

(1) not more than $22,896,000 to carry out the international

affairs duties and powers of the Department (including

amounts for official functions and reception and representation

expenses).

(2) not more than $1,000,000 for increases in—

(A) pay, under section 5382(c) and subchapter I of chapter 53 of title 5 (except section 5305, or corresponding prior

provision of such title), of officers and employees carrying

out the duties and powers referred to in clause (1) of this

subsection;

(B) departmental contributions attributable to those pay

increases; and

(C) allowances and benefits, because of cost of living increases, provided under subsection (a) of this section.

(c) Necessary amounts may be appropriated to the Secretary for

each fiscal year beginning after September 30, 1982—

(1) to carry out the international affairs duties and powers

of the Department (including amounts for official functions and

reception and representation expenses);

(2) for increases in—

(A) pay, under section 5382(c) and subchapter I of chapter 53 of title 5 (except section 5303), of officers and employees carrying out the duties and powers referred to in

clause (1) of this subsection;

(B) departmental contributions attributable to those pay

increases; and

(C) allowances and benefits, because of cost of living increases, provided under subsection (a) of this section.
Sec. 326 CH. 3—DEPARTMENT OF THE TREASURY 22

SEC. 326. AVAILABILITY OF APPROPRIATIONS FOR CERTAIN EXPENSES.

(a) Under regulations prescribed by the Secretary of the Treasury, an appropriation for the Department of the Treasury available

to pay travel expenses also is available to pay expenses to attend

meetings of organizations related to the function or activity for

which the appropriation is made.

(b) The Secretary may approve reimbursement to agents on protective missions for subsistence expenses authorized by law without

regard to rates and amounts established under section 5702 of title

5.

SEC. 327. ADVANCEMENTS AND REIMBURSEMENTS FOR SERVICES.

(a) In this section, ‘‘service’’ includes service provided in—

(1) disbursing and receiving amounts,

(2) servicing bonds,

(3) making accounts, and

(4) maintaining bank accounts.

(b) When the Secretary of the Treasury provides a service for an

agency (except the Department of the Treasury) for which amounts

have not been appropriated to the Department, the agency may advance for credit or reimburse the Department the amounts necessary to provide the service. Notwithstanding section 3302 of this

title, amounts advanced or reimbursed may be credited to the appropriation of the Department that is current when the service is

provided.

SEC. 328. ACCOUNTS AND PAYMENTS OF FORMER DISBURSING OFFICIALS.

(a) If a chief disbursing official or a director of a disbursing center of the Department of the Treasury dies, resigns, or leaves office,

the deputy chief disbursing official or the deputy director of the disbursing center designated by the Secretary of the Treasury may

continue the accounts and payments in the name of the former disbursing official or director through the last day of the 2d month

after the month in which the death, resignation, or separation occurs. The accounts and payments shall be allowed, audited, and

settled as provided by law. The Secretary shall honor checks signed

in the name of the former disbursing official or director in the same

way as if the former disbursing official or director had continued

in office.

(b) Only the deputy chief or deputy director designated under

subsection (a) of this section is liable for actions taken in the name

of the former disbursing official under subsection (a).

SEC. 329. LIMITATIONS ON OUTSIDE ACTIVITIES.

(a)(1) The Secretary of the Treasury and the Treasurer may

not—

(A) be involved in trade or commerce;

(B) own any part of a vessel (except a pleasure vessel);

(C) buy or hold as a beneficiary in trust public property;

(D) be involved in buying or disposing of obligations of a

State or the United States Government; and

(E) personally take or use a benefit gained from conducting

business of the Department of the Treasury except as authorized by law.
23 Sec. 331 CH. 3—DEPARTMENT OF THE TREASURY

(2) An officer violating this subsection shall be fined $3,000, removed from office, and thereafter may not hold an office of the Government.

(3) An individual (except prosecutors) giving information leading

to the prosecution and conviction of an individual violating this

subsection shall receive $1,500 of the fine when paid.

(b)(1) An officer or employee of the Department (except the Secretary or Treasurer) may not—

(A) carry on a trade or business in the funds, debts, or property of a State or the Government; and

(B) personally use a benefit gained from conducting business

of the Department.

(2) An officer or employee violating this subsection shall be fined

$500 and removed from office.

SEC. 330. PRACTICE BEFORE THE DEPARTMENT.

(a) Subject to section 500 of title 5, the Secretary of the Treasury

may—

(1) regulate the practice of representatives of persons before

the Department of the Treasury; and

(2) before admitting a representative to practice, require that

the representative demonstrate—

(A) good character;

(B) good reputation;

(C) necessary qualifications to enable the representative

to provide to persons valuable service; and

(D) competency to advise and assist persons in presenting their cases.

(b) After notice and opportunity for a proceeding, the Secretary

may suspend or disbar from practice before the Department a representative who—

(1) is incompetent;

(2) is disreputable;

(3) violates regulations prescribed under this section; or

(4) with intent to defraud, willfully and knowingly misleads

or threatens the person being represented or a prospective person to be represented.

(c) After notice and opportunity for a hearing to any appraiser

with respect to whom a penalty has been assessed under section

6701(a) of the Internal Revenue Code of 1954, the Secretary may—

(1) provide that appraisals by such appraiser shall not have

any probative effect in any administrative proceeding before

the Department of the Treasury or the Internal Revenue Service, and

(2) bar such appraiser from presenting evidence or testimony

in any such proceeding.

SEC. 331. REPORTS.

(a) The Secretary of the Treasury shall submit to Congress each

year an annual report. The report shall include—

(1) a statement of the public receipts and public expenditures

for the prior fiscal year;

(2) estimates of public receipts and public expenditures for

the current and next fiscal years;
Sec. 331 CH. 3—DEPARTMENT OF THE TREASURY 24

(3) plans for improving and increasing public receipts to provide Congress with information on ways to raise amounts necessary to meet public expenditures;

(4) a statement of all contracts for supplies or services made

by the Secretary during the prior fiscal year;

(5) a statement of appropriations expended to pay for miscellaneous claims not otherwise provided for;

(6) a statement on all payments made from the fund under

section 3126 of this title for the prior fiscal year; and

(7) estimates of amounts for payment under section 1322(b)

of this title.

(b)(1) On the first day of each regular session of Congress, the

Secretary shall submit to Congress a report for the prior fiscal year

on—

(A) the total and individual amounts of contingent liabilities

and unfunded liabilities of the United States Government;

(B) as far as practicable, trust fund liabilities, liabilities of

Government corporations, indirect liabilities not included as a

part of the public debt, and liabilities of insurance and annuity

programs (including their actuarial status);

(C) collateral pledged and assets available (or to be realized)

as security for the liabilities (separately noting Government obligations) and other assets specifically available to liquidate

the liabilities of the Government; and

(D) the total amount in each category under clauses (A)–(C)

of this paragraph for each agency.

(2) The report shall present the information required under paragraph (1) of this subsection in a concise way, with explanatory material (including an analysis of the significance of liabilities based

on past experience and probable risk) the Secretary considers desirable.

(c) On the first day of each regular session of Congress, the Secretary shall submit to Congress a report for the prior fiscal year

on the total amount of public receipts and public expenditures listing receipts, when practicable, by ports, districts, and States and

the expenditures by each appropriation.

(d) The Secretary shall report to either House of Congress in person or in writing, as required, on matters referred to the Secretary

by that House of Congress.

(e)(1) Not later than March 31 of 1998 and each year thereafter,

the Secretary of the Treasury, in coordination with the Director of

the Office of Management and Budget, shall annually prepare and

submit to the President and the Congress an audited financial

statement for the preceding fiscal year, covering all accounts and

associated activities of the executive branch of the United States

Government. The financial statement shall reflect the overall financial position, including assets and liabilities, and results of operations of the executive branch of the United States Government,

and shall be prepared in accordance with the form and content requirements set forth by the Director of the Office of Management

and Budget.
25 Sec. 331 CH. 3—DEPARTMENT OF THE TREASURY

(2) The Comptroller General of the United States shall audit the

financial statement required by this section.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

321 .............................................. 31 C.F.R. 1, 2, 10, 19, 21, 25, 26, 205, 206, 210, 337, 601

330 .............................................. TFM, Volume 1, Part 6, Chapter 8000, see appendix V 31 CFR 10

331 .............................................. TFM, Volume 1, Part 6, Chapter 4000, see appendix V
26

TITLE 31—MONEY AND FINANCE

Subtitle I—General

* * * * * * *

CHAPTER 5—OFFICE OF MANAGEMENT AND BUDGET

SUBCHAPTER I—ORGANIZATION

SEC. 501. OFFICE OF MANAGEMENT AND BUDGET.

The Office of Management and Budget is an office in the Executive Office of the President.

SHORT TITLE OF 1990 AMENDMENT

Pub.L. 101–576, Title I, Sec. 101, Nov. 15, 1990, 104 Stat. 2838,

provided that: ‘‘This Act [enacting sections 503, 504, 901–903, 3515

and 9106 of this title, amending sections 502, 1105, 3512, 3521,

5313, 5314, 5315 and 9105 of this title and section 3533 of Title

42, Public Health and Welfare, enacting provisions set out as notes

under this section and sections 901, 3511, 3515 and 3521 of this

title, and amending provisions set out as a note under section 201

of Title 38, Veterans’ Benefits] may be cited as the ‘Chief Financial

Officers Act of 1990’.’’

FRANCHISE FUND PILOT PROGRAMS

Pub.L. 103–356, Title IV, Sec. 403, Oct. 13, 1994, 108 Stat. 3413,

provided that:

‘‘(a) ESTABLISHMENT.—There is authorized to be established on a

pilot program basis in each of six executive agencies a franchise

fund. The Director of the Office of Management and Budget, after

consultation with the chairman and ranking members of the Committees on Appropriations and Governmental Affairs of the Senate,

and the Committees on Appropriations and Government Operations of the House of Representatives, shall designate the agencies.

‘‘(b) USES.—Each such fund may provide, consistent with guidelines established by the Director of the Office of Management and

Budget, such common administrative support services to the agency and to other agencies as the head of such agency, with the concurrence of the Director, determines can be provided more efficiently through such a fund than by other means. To provide such

services, each such fund is authorized to acquire the capital equipment, automated data processing systems, and financial management and management information systems needed. Services shall

be provided by such funds on a competitive basis.
27 Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

‘‘(c) FUNDING.—(1) There are authorized to be appropriated to the

franchise fund of each agency designated under subsection (a) such

funds as are necessary to carry out the purposes of the fund, to remain available until expended. To the extent that unexpended balances remain available in other accounts for the purposes to be carried out by the fund, the head of the agency may transfer such balances to the fund.

‘‘(2) Fees for services shall be established by the head of the

agency at a level to cover the total estimated costs of providing

such services. Such fees shall be deposited in the agency’s fund to

remain available until expended, and may be used to carry out the

purposes of the fund.

‘‘(3) Existing inventories, including inventories on order, equipment, and other assets or liabilities pertaining to the purposes of

the fund may be transferred to the fund.

‘‘(d) REPORT ON PILOT PROGRAMS.—Within 6 months after the

end of fiscal year 1997, the Director of the Office of Management

and Budget shall forward a report on the results of the pilot programs to the Committees on Appropriations of the Senate and of

the House of Representatives, and to the Committee on Governmental Affairs of the Senate and the Committee on Government

Operations of the House of Representatives. The report shall contain the financial and program performance results of the pilot programs, including recommendations for—

‘‘(1) the structure of the fund;

‘‘(2) the composition of the funding mechanism;

‘‘(3) the capacity of the fund to promote competition; and

‘‘(4) the desirability of extending the application and implementation of franchise funds to other Federal agencies.

‘‘(e) PROCUREMENT.—Nothing in this section shall be construed

as relieving any agency of any duty under applicable procurement

laws.

‘‘(f) TERMINATION.—The provisions of this section shall expire on

October 1, 1999.’’

[Any reference in any provision of law enacted before Jan. 4,

1995, to the Committee on Government Operations of the House of

Representatives treated as referring to the Committee on Government Reform and Oversight of the House of Representatives, except that any reference in any provision of law enacted before Jan.

4, 1995, to the Committee on Government Operations of the House

of Representatives treated as referring to the Committee on the

Budget of the House of Representatives in the case of a provision

of law relating to the establishment, extension, and enforcement of

special controls over the Federal budget, see section 1(a)(6) and

(c)(2) of Pub.L. 104–14, set out as a note preceding section 21 of

Title 2, The Congress.]

SIMPLIFICATION OF MANAGEMENT REPORTING PROCESS

Pub.L. 103–356, Title IV, Sec. 404, Oct. 13, 1994, 108 Stat. 3414,

provided that:

‘‘(a) IN GENERAL.—To improve the efficiency of executive branch

performance in implementing statutory requirements for financial

management reporting to the Congress and its committees, the Director of the Office of Management and Budget may adjust the fre-
Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 28

quency and due dates of or consolidate any statutorily required reports of agencies to the Office of Management and Budget or the

President and of agencies or the Office of Management and Budget

to the Congress under any laws for which the Office of Management and Budget has financial management responsibility, including—

‘‘(1) chapters 5, 9, 11, 33, 35, 37, 39, 75, and 91 of title 31,

United States Code [sections 501 et seq., 901 et seq., 1101 et

seq., 3301 et seq., 3501 et seq., 3701 et seq., 3901 et seq., 7501

et seq., and 9101 et seq. of this title, respectively

‘‘(2) the Federal Civil Penalties Inflation Adjustment Act of

1990 (28 U.S.C. 2461 note; Public Law 101–410; 104 Stat. 890).

‘‘(b) Application.—The authority provided in subsection (a) shall

apply only to reports of agencies to the Office of Management and

Budget or the President and of agencies or the Office of Management and Budget to the Congress required by statute to be submitted between January 1, 1995, and September 30, 1997.

‘‘(c) Adjustments in reporting.—The Director may consolidate or

adjust the frequency and due dates of any statutorily required reports under subsections (a) and (b) only after—

‘‘(1) consultation with the Chairman of the Senate Committee on Governmental Affairs and the Chairman of the House

of Representatives Committee on Government Operations; and

‘‘(2) written notification to the Congress, no later than February 8 of each fiscal year covered under subsection (b) for

those reports required to be submitted during that fiscal year.’’

[Any reference in any provision of law enacted before Jan. 4,

1995, to the Committee on Government Operations of the House of

Representatives treated as referring to the Committee on Government Reform and Oversight of the House of Representatives, except that any reference in any provision of law enacted before Jan.

4, 1995, to the Committee on Government Operations of the House

of Representatives treated as referring to the Committee on the

Budget of the House of Representatives in the case of a provision

of law relating to the establishment, extension, and enforcement of

special controls over the Federal budget, see section 1(a)(6) and

(c)(2) of Pub.L. 104–14, set out as a note preceding section 21 of

Title 2, The Congress.]

FINDINGS AND PURPOSES

Pub.L. 101–576, Title I, Sec. 102, Nov. 15, 1990, 104 Stat. 2838,

provided that:

‘‘(a) FINDINGS.—The Congress finds the following:

‘‘(1) General management functions of the Office of Management and Budget need to be significantly enhanced to improve

the efficiency and effectiveness of the Federal Government.

‘‘(2) Financial management functions of the Office of Management and Budget need to be significantly enhanced to provide overall direction and leadership in the development of a

modern Federal financial management structure and associated systems.

‘‘(3) Billions of dollars are lost each year through fraud,

waste, abuse, and mismanagement among the hundreds of programs in the Federal Government.
29 Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

‘‘(4) These losses could be significantly decreased by improved management, including improved central coordination

of internal controls and financial accounting.

‘‘(5) The Federal Government is in great need of fundamental

reform in financial management requirements and practices as

financial management systems are obsolete and inefficient, and

do not provide complete, consistent, reliable, and timely information.

‘‘(6) Current financial reporting practices of the Federal Government do not accurately disclose the current and probable

future cost of operating and investment decisions, including

the future need for cash or other resources, do not permit adequate comparison of actual costs among executive agencies,

and do not provide the timely information required for efficient

management of programs.

‘‘(b) PURPOSES.—The purposes of this Act [Pub.L. 101–576, Nov.

15, 1990, 104 Stat. 2838, see Short Title of 1990 Amendment note

under this section] are the following:

‘‘(1) Bring more effective general and financial management

practices to the Federal Government through statutory provisions which would establish in the Office of Management and

Budget a Deputy Director for Management, establish an Office

of Federal Financial Management headed by a Controller, and

designate a Chief Financial Officer in each executive department and in each major executive agency in the Federal Government.

‘‘(2) Provide for improvement, in each agency of the Federal

Government, of systems of accounting, financial management,

and internal controls to assure the issuance of reliable financial information and to deter fraud, waste, and abuse of Government resources.

‘‘(3) Provide for the production of complete, reliable, timely,

and consistent financial information for use by the executive

branch of the Government and the Congress in the financing,

management, and evaluation of Federal programs.’’

DUTIES AND FUNCTIONS OF THE DEPARTMENT OF THE TREASURY

Pub.L. 101–576, Title II, Sec. 204, Nov. 15, 1990, 104 Stat. 2842,

provided that: ‘‘Nothing in this Act [Pub.L. 101–576, Nov. 15, 1990,

104 Stat. 2838, see Short Title of 1990 Amendment note under this

section] shall be construed to interfere with the exercise of the

functions, duties, and responsibilities of the Department of the

Treasury, as in effect immediately before the enactment of this Act

[probably means the date of enactment of Pub.L. 101–576, which

was approved Nov. 15, 1990].’’
Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 30

NOTE

Executive Order 12816

Oct. 14, 1992, 57 F.R. 47562

Management Improvement in the Federal Government

By the authority vested in me as President by the Constitution

and the laws of the United States of America, and in order to coordinate and implement policies with respect to management improvement in the Federal Government, it is hereby ordered as follows:

SECTION 1. Establishment and Membership of the President’s

Council on Management Improvement.

(a) There is established as an interagency committee the President’s Council on Management Improvement (‘‘Council’’).

(b) The Council shall be composed of the Deputy Director for

Management of the Office of Management and Budget, who shall

serve as Chairman, and one senior official, who is a full-time officer

or employee of the Federal Government and who is responsible for

management or administration, from each of the following agencies

as selected by the heads of those agencies:

(1) Department of State;

(2) Department of the Treasury;

(3) Department of Defense;

(4) Department of Justice;

(5) Department of the Interior;

(6) Department of Agriculture;

(7) Department of Commerce;

(8) Department of Labor;

(9) Department of Health and Human Services;

(10) Department of Housing and Urban Development;

(11) Department of Transportation;

(12) Department of Energy;

(13) Department of Education;

(14) Department of Veterans Affairs;

(15) Agency for International Development;

(16) Environmental Protection Agency;

(17) Equal Employment Opportunity Commission;

(18) Federal Communications Commission;

(19) Federal Deposit Insurance Corporation;

(20) Federal Emergency Management Agency;

(21) Federal Energy Regulatory Commission;

(22) Federal Reserve Board;

(23) General Services Administration;

(24) Interstate Commerce Commission;

(25) National Aeronautics and Space Administration;

(26) National Archives and Records Administration;

(27) Nuclear Regulatory Commission;

(28) Office of Personnel Management;

(29) Resolution Trust Corporation;

(30) Securities and Exchange Commission;

(31) Small Business Administration;

(32) Tennessee Valley Authority; and
31 Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

(33) United States Information Agency.

(c) The Council membership also shall include the following officials:

(1) Deputy Director, Office of Personnel Management;

(2) Deputy Administrator, General Services Administration;

(3) Assistant to the President for Policy Development or a fulltime officer or employee of the Federal Government designated

by that official;

(4) Assistant to the President for Presidential Personnel or a

full-time officer or employee of the Federal Government designated by that official;

(5) Assistant Director for General Management, Office of

Management and Budget; and

(6) At-large members appointed by the Chairman pursuant to

section 3(e) of this order.

(d) The Council shall have a Vice Chairman selected by the

Chairman from among the Council membership.

SEC. 2. FUNCTIONS OF THE COUNCIL.—

(a) The Council shall serve as an interagency forum to discuss

problems and recommend improvements in Government management and operations and to provide advice to the Chairman on matters pertaining to the management of the Federal Government. The

Council shall:

(1) assist in the formulation of short- and long-range plans

to promote improvements in the management and administrative systems and operations of the Federal Government;

(2) identify specific department and agency management solutions that may have Governmentwide [sic] application and assist in the dissemination of this information and the implementation of these solutions;

(3) serve as a resource to assist in an advisory capacity in the

development, review, revision, and implementation of Governmentwide [sic] policies in support of the central management

agencies of the Federal Government, including the Office of

Management and Budget, the Office of Personnel Management,

and the General Services Administration; and

(4) serve as a forum to recommend solutions to interagency

management problems.

(b) In conducting these functions, the Council shall not interfere

with existing lines of authority and responsibility in the departments and agencies.

SEC. 3. RESPONSIBILITIES OF THE CHAIRMAN.—The Chairman

shall—

(a) establish, in consultation with the Council membership as he

deems appropriate, procedures and agenda topics for the Council;

(b) report, on behalf of the Council and as appropriate, to the

President, the Director of the Office of Management and Budget, the

agency heads, and the Cabinet on the goals and accomplishments

of the Council;

(c) establish such committees or working groups of the Council,

including an executive committee, as the Chairman may find necessary or appropriate for the efficient conduct of Council functions;
Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 32

(d) appoint a Vice Chairman from among the Council’s membership to assist the Chairman in representing the Council and to perform duties as determined by the Chairman;

(e) appoint other full-time officers or employees of the Federal

Government to the Council as at-large members for specific terms to

provide special expertise to the Council and to perform duties as determined by the Chairman; and

(f) be supported by the Assistant Director for General Management of the Office of Management and Budget, who shall advise

and assist the Chairman in the execution of the responsibilities set

forth above and act for the Chairman in his or her absence.

SEC. 4. ADMINISTRATIVE PROVISIONS.—

(a) The Director of the Office of Management and Budget shall

provide the Council with administrative support as may be necessary for the performance of its functions.

(b) To the extent permitted by law, the head of each agency represented on the Council shall provide its representative with such

administrative support as necessary to enable the agency representative to carry out his or her responsibilities and to support the Governmentwide [sic] activities of the Council.

SEC. 5. REVOCATION.—Executive Order No. 12479 [formerly set

out as a note under this section] is revoked.

GEORGE BUSH.

Memoranda of President

OCT. 1, 1993, 58 F.R. 52393

Implementing Management Reform in the Executive Branch

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND

AGENCIES

The National Performance Review has examined how well the

government serves its citizens, where it can improve, and where it

is necessary to make fundamental changes to make government

work better. It has presented its findings and recommendations—including the adoption of new management principles and structural

reforms—to improve government throughout the Executive branch.

In order to establish and implement more effective and efficient

leadership and management principles throughout the Executive

branch as identified in the National Performance Review, I hereby

direct the following:

1. Establish Chief Operating Officers

Each agency head shall designate a Chief Operating Officer, who

shall be the Deputy or another official with agency-wide authority.

The Chief Operating Officer shall report directly to the agency head

and shall be responsible for:

(a) implementing the President’s and agency head’s goals and the

agency’s mission;

(b) providing overall organization management to improve agency

performance;

(c) assisting the agency head in promoting ongoing quality improvement, developing strategic plans, and measuring results;
33 Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

(d) directing ongoing reengineering of the agency’s administrative

processes;

(e) overseeing agency-specific application of performance measures, procurement reforms, personnel reductions, financial management improvements, telecommunications and information technology policies, and other government-wide systems reforms adopted

as a result of the recommendations of the National Performance Review; and

(f) reforming the agency’s management practices by incorporating

the principles of the National Performance Review into day-to-day

management.

2. Implement Additional Agency Reforms

Each agency head shall identify and implement additional

changes within the agency that will promote the principles and

standards of the National Performance Review and the strategic

and quality management approaches described by the Federal Quality Institute’s ‘‘Presidential Award for Quality’’ or its successor

award(s).

3. Establishment of President’s Management Council

In order to advise and assist the President and the Vice President

in ensuring that the reforms adopted as a result of the National

Performance Review are implemented throughout the Executive

branch, I hereby establish the President’s Management Council

(‘‘The Council’’). The Council shall comprise the:

(a) The Deputy Director for Management, Office of Management

and Budget;

(b) The Chief Operating Officers from the following agencies:

(1) Department of State;

(2) Department of the Treasury;

(3) Department of Defense;

(4) Department of Justice;

(5) Department of the Interior;

(6) Department of Agriculture;

(7) Department of Commerce;

(8) Department of Labor;

(9) Department of Health and Human Services;

(10) Department of Housing and Urban Development;

(11) Department of Transportation;

(12) Department of Energy;

(13) Department of Education;

(14) Department of Veterans Affairs;

(15) Environmental Protection Agency;

(c) The following central management agency representatives:

(1) Director of the Office of Personnel Management;

(2) Administrator of General Services;

(d) Chief Operating Officers of three other Executive branch agencies designated by the Chairperson, in his or her discretion;

(e) Secretary of the Cabinet; and

(f) Such other officials of Executive departments and agencies as

I may, from time to time, designate.

The Deputy Director for Management of the Office of Management

and Budget shall serve as Chairperson of the Council. The Chair-
Sec. 501 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 34

person of the Council shall appoint a Vice-Chairperson from the

Council’s membership to assist the Chairperson in conducting the

affairs of the Council.

I also establish an Executive Committee of the Council. Members

of the Executive Committee shall be: the Chairperson; the Vice

Chairperson; the two central management agency representatives;

two Chief Operating Officers serving on the Council, whom I shall

designate, and any additional Council members whom I may, from

time to time, designate.

The Chairperson shall convene meetings of the Council, which

shall be held at least once a month.

The functions of the Council shall include, among others:

(a) improving overall Executive branch management, including

reform of government-wide management systems, such as management controls, financial management, personnel, budgeting, and

procurement;

(b) coordinating management-related efforts to improve government throughout the Executive branch and, as necessary, resolving

specific interagency management issues;

(c) ensuring the adoption of new management practices in agencies throughout the Executive branch; and

(d) identifying examples of, and providing mechanisms for, interagency exchange of information about best management practices.

The Council shall be provided with appropriate staff support and

other resources as may be necessary to carry out its duties. In addition, the Federal Quality Institute shall serve as a resource to the

Council.

The Council shall seek advice and information as appropriate

from nonmember Federal agencies, particularly smaller agencies.

The Council shall also consider the management reform experience

of corporations, nonprofit organizations, State and local governments, government employees, public sector unions, and customers

of government services.

Agencies shall cooperate with the Council and provide such assistance, information, and advice to the Council as the Council may request, to the extent permitted by law.

4. Independent Agencies

Independent agencies are requested to adhere to this directive.

5. Judicial Review

This directive is for the internal management of the Executive

branch and does not create any right or benefit, substantive or procedural, enforceable by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

6. Publication

The Director of the Office of Management and Budget is authorized and directed to publish this memorandum in the Federal Register.

WILLIAM J. CLINTON.
35 SEC. 502 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

SEC. 502. OFFICERS

(a) The head of the Office of Management and Budget is the Director of the Office of Management and Budget. The Director is appointed by the President, by and with the advice and consent of the

Senate. Under the direction of the President, the Director shall administer the Office.

(b) The Office has a Deputy Director of the Office of Management

and Budget, appointed by the President, by and with the advice

and consent of the Senate. The Deputy Director—

(1) shall carry out the duties and powers prescribed by the

Director; and

(2) acts as the Director when the Director is absent or unable

to serve or when the office of Director is vacant.

(c) The Office has a Deputy Director for Management appointed

by the President, by and with the advice and consent of the Senate.

The Deputy Director for Management shall be the chief official responsible for financial management in the United States Government.

(d) The Office has 3 Assistant Directors who shall carry out the

duties and powers prescribed by the Director.

(e) The Office may have not more than 6 additional officers, each

of whom is appointed in the competitive service by the Director,

with the approval of the President. Each additional officer shall

carry out the duties and powers prescribed by the Director. The Director shall specify the title of each additional officer.

(f) When the Director and Deputy Director are absent or unable

to serve or when the offices of Director and Deputy Director are vacant, the President may designate an officer of the Office to act as

Director.

SEC. 503. FUNCTIONS OF DEPUTY DIRECTOR FOR MANAGEMENT.

(a) Subject to the direction and approval of the Director, the Deputy Director for Management shall establish governmentwide financial management policies for executive agencies and shall perform the following financial management functions:

(1) Perform all functions of the Director, including all functions delegated by the President to the Director, relating to financial management.

(2) Provide overall direction and leadership to the executive

branch on financial management matters by establishing financial management policies and requirements, and by monitoring the establishment and operation of Federal Government

financial management systems.

(3) Review agency budget requests for financial management

systems and operations, and advise the Director on the resources required to develop and effectively operate and maintain Federal Government financial management systems and

to correct major deficiencies in such systems.

(4) Review and, where appropriate, recommend to the Director changes to the budget and legislative proposals of agencies

to ensure that they are in accordance with financial management plans of the Office of Management and Budget.

(5) Monitor the financial execution of the budget in relation

to actual expenditures, including timely performance reports.
SEC. 502 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 36

(6) Oversee, periodically review, and make recommendations

to heads of agencies on the administrative structure of agencies with respect to their financial management activities.

(7) Develop and maintain qualification standards for agency

Chief Financial Officers and for agency Deputy Chief Financial

Officers appointed under sections 901 and 903, respectively.

(8) Provide advice to agency heads with respect to the selection of agency Chief Financial Officers and Deputy Chief Financial Officers.

(9) Provide advice to agencies regarding the qualifications,

recruitment, performance, and retention of other financial

management personnel.

(10) Assess the overall adequacy of the professional qualifications and capabilities of financial management staffs throughout the Government and make recommendations on ways to

correct problems which impair the capacity of those staffs.

(11) Settle differences that arise among agencies regarding

the implementation of financial management policies.

(12) Chair the Chief Financial Officers Council established

by section 302 of the Chief Financial Officers Act of 1990.

(13) Communicate with the financial officers of State and

local governments, and foster the exchange with those officers

of information concerning financial management standards,

techniques, and processes.

(14) Issue such other policies and directives as may be necessary to carry out this section, and perform any other function

prescribed by the Director.

(b) Subject to the direction and approval of the Director, the Deputy Director for Management shall establish general management

policies for executive agencies and perform the following general

management functions:

(1) Coordinate and supervise the general management functions of the Office of Management and Budget.

(2) Perform all functions of the Director, including all functions delegated by the President to the Director, relating to—

(A) managerial systems, including the systematic measurement of performance;

(B) procurement policy;

(C) grant, cooperative agreement, and assistance management;

(D) information and statistical policy;

(E) property management;

(F) human resources management;

(G) regulatory affairs; and

(H) other management functions, including organizational studies, long-range planning, program evaluation,

productivity improvement, and experimentation and demonstration programs.

(3) Provide complete, reliable, and timely information to the

President, the Congress, and the public regarding the management activities of the executive branch.

(4) Facilitate actions by the Congress and the executive

branch to improve the management of Federal Government op-
37 SEC. 521 CH. 5—OFFICE OF MANAGEMENT AND BUDGET

erations and to remove impediments to effective administration.

(5) Provide leadership in management innovation, through—

(A) experimentation, testing, and demonstration programs; and

(B) the adoption of modern management concepts and

technologies.

(6) Work with State and local governments to improve and

strengthen intergovernmental relations, and provide assistance

to such governments with respect to intergovernmental programs and cooperative arrangements.

(7) Review and, where appropriate, recommend to the Director changes to the budget and legislative proposals of agencies

to ensure that they respond to program evaluations by, and are

in accordance with general management plans of, the Office of

Management and Budget.

(8) Provide advice to agencies on the qualification, recruitment, performance, and retention of managerial personnel.

(9) Perform any other functions prescribed by the Director.

SEC. 504. OFFICE OF FEDERAL FINANCIAL MANAGEMENT.

(a) There is established in the Office of Management and Budget

an office to be known as the ‘‘Office of Federal Financial Management’’. The Office of Federal Financial Management, under the direction and control of the Deputy Director for Management of the

Office of Management and Budget, shall carry out the financial

management functions listed in section 503(a) of this title.

(b) There shall be at the head of the Office of Federal Financial

Management a Controller, who shall be appointed by the President,

by and with the advice and consent of the Senate. The Controller

shall be appointed from among individuals who possess—

(1) demonstrated ability and practical experience in accounting, financial management, and financial systems; and

(2) extensive practical experience in financial management in

large governmental or business entities.

(c) The Controller of the Office of Federal Financial Management

shall be the deputy and principal advisor to the Deputy Director

for Management in the performance by the Deputy Director for

Management of functions described in section 503(a).

SEC. 505. OFFICE OF INFORMATION AND REGULATORY AFFAIRS.

The Office of Information and Regulatory Affairs, established

under section 3503 of title 44, is an office in the Office of Management and Budget.

SEC. 506. OFFICE OF FEDERAL PROCUREMENT POLICY

The Office of Federal Procurement Policy, established under section 5(a) of the Office of Federal Procurement Policy Act (41 U.S.C.

404(a)), is an office in the Office of Management and Budget.

Subchapter I—Organization

SEC. 521. EMPLOYEES.

The Director of the Office of Management and Budget shall appoint and fix the pay of employees of the Office under regulations

prescribed by the President.
SEC. 521 CH. 5—OFFICE OF MANAGEMENT AND BUDGET 38

SEC. 522. NECESSARY EXPENDITURES.

The Director of the Office of Management and Budget may make

necessary expenditures for the Office under regulations prescribed

by the President.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

503 .............................................. 22 C.F.R. 518

OMB: Circulars A–21, A–73, A–87, A–102, A–110
39

TITLE 31—MONEY AND FINANCE

Subtitle I—General

* * * * * * *

CHAPTER 7—GENERAL ACCOUNTING OFFICE

SUBCHAPTER I—DEFINITIONS AND GENERAL ORGANIZATION

SEC. 701. DEFINITIONS.

In this chapter—

(1) ‘‘agency’’ includes the District of Columbia government

but does not include the legislative branch or the Supreme

Court.

(2) ‘‘appropriations’’ means appropriated amounts and includes, in appropriate context—

(A) funds;

(B) authority to make obligations by contract before appropriations; and

(C) other authority making amounts available for obligation or expenditure.

SEC. 702. GENERAL ACCOUNTING OFFICE.

(a) The General Accounting Office is an instrumentality of the

United States Government independent of the executive departments.

(b) The head of the Office is the Comptroller General of the United States. The Office has a Deputy Comptroller General of the

United States.

(c) The Comptroller General may adopt a seal for the Office.

[(d) Redesignated (c)]

SEC. 703. COMPTROLLER GENERAL AND DEPUTY COMPTROLLER GENERAL.

(a)(1) The Comptroller General and Deputy Comptroller General

are appointed by the President, by and with the advice and consent

of the Senate.

(2) When a vacancy occurs in the office of Comptroller General

or Deputy Comptroller General, a commission is established to recommend individuals to the President for appointment to the vacant

office. The commission shall be composed of—

(A) the Speaker of the House of Representatives;

(B) the President pro tempore of the Senate;

(C) the majority and minority leaders of the House of Representatives and the Senate;

(D) the chairmen and ranking minority members of the Committee on Governmental Affairs of the Senate and the Committee on Government Operations of the House; and
Sec. 711 CH. 7—GENERAL ACCOUNTING OFFICE 40

(E) when the office of Deputy Comptroller General is vacant,

the Comptroller General.

(3) A commission established because of a vacancy in the office

of the Comptroller General shall recommend at least 3 individuals.

The President may ask the commission to recommend additional

individuals.

(b) Except as provided in subsection (e) of this section, the term

of the Comptroller General is 15 years. The Comptroller General

may not be reappointed. The term of the Deputy Comptroller General expires on the date an individual is appointed Comptroller

General. The Deputy Comptroller General may continue to serve

until a successor is appointed.

(c) The Deputy Comptroller General—

(1) carries out duties and powers prescribed by the Comptroller General; and

(2) acts for the Comptroller General when the Comptroller

General is absent or unable to serve or when the office of

Comptroller General is vacant.

(d) The Comptroller General shall designate an officer or employee of the General Accounting Office to act as Comptroller General when the Comptroller General and Deputy Comptroller General are absent or unable to serve or when the offices of Comptroller General and Deputy Comptroller General are vacant.

(e)(1) A Comptroller General or Deputy Comptroller General may

retire after becoming 70 years of age and completing 10 years of

service as Comptroller General or Deputy Comptroller General (as

the case may be). Either may be removed at any time by—

(A) impeachment; or

(B) joint resolution of Congress, after notice and an opportunity for a hearing, only for—

(i) permanent disability;

(ii) inefficiency;

(iii) neglect of duty;

(iv) malfeasance; or

(v) a felony or conduct involving moral turpitude.

(2) A Comptroller General or Deputy Comptroller General removed from office under paragraph (1) of this subsection may not

be reappointed to the office.

(f) The annual rate of basic pay of the—

(1) Comptroller General is equal to the rate for level II of the

Executive Schedule; and

(2) Deputy Comptroller General is equal to the rate for level

III of the Executive Schedule.

SUBCHAPTER II—GENERAL DUTIES AND POWERS

SEC. 711. GENERAL AUTHORITY.

The Comptroller General may—

(1) prescribe regulations to carry out the duties and powers

of the Comptroller General;

(2) delegate the duties and powers of the Comptroller General to officers and employees of the General Accounting Office

as the Comptroller General decides is necessary to carry out

those duties and powers;
41 Sec. 713 CH. 7—GENERAL ACCOUNTING OFFICE

(3) regulate the practice of representatives of persons before

the Office; and

(4) administer oaths to witnesses when auditing and settling

accounts.

SEC. 712. INVESTIGATING THE USE OF PUBLIC MONEY.

The Comptroller General shall—

(1) investigate all matters related to the receipt, disbursement, and use of public money;

(2) estimate the cost to the United States Government of

complying with each restriction on expenditures of a specific

appropriation in a general appropriation law and report each

estimate to Congress with recommendations the Comptroller

General considers desirable;

(3) analyze expenditures of each executive agency the Comptroller General believes will help Congress decide whether public money has been used and expended economically and efficiently;

(4) make an investigation and report ordered by either

House of Congress or a committee of Congress having jurisdiction over revenue, appropriations, or expenditures; and

(5) give a committee of Congress having jurisdiction over revenue, appropriations, or expenditures the help and information

the committee requests.

SEC. 713. AUDIT OF INTERNAL REVENUE SERVICE AND BUREAU OF

ALCOHOL, TOBACCO, AND FIREARMS.

(a) Under regulations of the Comptroller General, the Comptroller General shall audit the Internal Revenue Service and the Bureau of Alcohol, Tobacco, and Firearms, of the Department of the

Treasury. An audit under this section does not affect a final decision of the Secretary of the Treasury under section 6406 of the Internal Revenue Code of 1954 (26 U.S.C. 6406).

(b)(1) To carry out this section and to the extent provided by and

only subject to section 6103 of the Internal Revenue Code of 1954

(26 U.S.C. 6103)—

(A) returns and return information (as defined in section

6103(b) of the Internal Revenue Code of 1954 (26 U.S.C.

6103(b)) shall be made available to the Comptroller General;

and

(B) records and property of, or used by, the Service or the

Bureau, shall be made available to the Comptroller General.

(2) At least once every 6 months, the Comptroller General shall

designate each officer and employee of the General Accounting Office by name and title to whom returns, return information, or

records or property of the Service or the Bureau that can identify

a particular taxpayer may be made available. Each designation or

a certified copy of the designation shall be sent to the Committee

on Finance of the Senate, the Committee on Ways and Means of

the House of Representatives, the Committee on Governmental Affairs of the Senate, the Committee on Government Operations of

the House, the Joint Committee on Taxation, the Commissioner of

Internal Revenue, and the Director of the Bureau.

(3) Except as expressly provided by law, an officer or employee

of the Office may make known information derived from a record
Sec. 714 CH. 7—GENERAL ACCOUNTING OFFICE 42

or property of, or in use by, the Service or the Bureau that can

identify a particular taxpayer only to another officer or employee

of the Office whose duties or powers require that the record or

property be made known.

SEC. 714. AUDIT OF FINANCIAL INSTITUTIONS EXAMINATION COUNCIL, FEDERAL RESERVE BOARD, FEDERAL RESERVE

BANKS, FEDERAL DEPOSIT INSURANCE CORPORATION,

AND OFFICE OF COMPTROLLER OF THE CURRENCY.

(a) In this section, ‘‘agency’’ means the Financial Institutions Examination Council, the Federal Reserve Board, Federal reserve

banks, the Federal Deposit Insurance Corporation, the Office of the

Comptroller of the Currency, and the Office of Thrift Supervision.

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only

if the appropriate agency has consented in writing. Audits of the

Federal Reserve Board and Federal reserve banks may not include—

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

(2) deliberations, decisions, or actions on monetary policy

matters, including discount window operations, reserves of

member banks, securities credit, interest on deposits, and open

market operations;

(3) transactions made under the direction of the Federal

Open Market Committee; or

(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–

(3) of this subsection.

(c)(1) Except as provided in this subsection, an officer or employee of the General Accounting Office may not disclose information identifying an open bank, an open bank holding company, or

a customer of an open or closed bank or bank holding company.

The Comptroller General may disclose information related to the

affairs of a closed bank or closed bank holding company identifying

a customer of the closed bank or closed bank holding company only

if the Comptroller General believes the customer had a controlling

influence in the management of the closed bank or closed bank

holding company or was related to or affiliated with a person or

group having a controlling influence.

(2) An officer or employee of the Office may discuss a customer,

bank, or bank holding company with an official of an agency and

may report an apparent criminal violation to an appropriate law

enforcement authority of the United States Government or a State.

(3) This subsection does not authorize an officer or employee of

an agency to withhold information from a committee of Congress

authorized to have the information.

(d)(1) To carry out this section, all records and property of or

used by an agency, including samples of reports of examinations of

a bank or bank holding company the Comptroller General considers

statistically meaningful and workpapers and correspondence related to the reports shall be made available to the Comptroller Gen-
43 Sec. 715 CH. 7—GENERAL ACCOUNTING OFFICE

eral. The Comptroller General shall give an agency a current list

of officers and employees to whom, with proper identification,

records and property may be made available, and who may make

notes or copies necessary to carry out an audit. An agency shall

give the Comptroller General suitable and lockable offices and furniture, telephones, and access to copying facilities.

(2) Except for the temporary removal of workpapers of the Comptroller General that do not identify a customer of an open or closed

bank or bank holding company, an open bank, or an open bank

holding company, all workpapers of the Comptroller General and

records and property of or used by an agency that the Comptroller

General possesses during an audit, shall remain in the agency. The

Comptroller General shall prevent unauthorized access to records

or property.

SEC. 715. AUDIT OF ACCOUNTS AND OPERATIONS OF THE DISTRICT

OF COLUMBIA GOVERNMENT.

(a) In addition to the audit carried out under section 455 of the

District of Columbia Self-Government and Governmental Reorganization Act (Public Law 93–198, 87 Stat. 803; D.C.Code, Sec. 47–

117), the Comptroller General each year shall audit the accounts

and operations of the District of Columbia government. An audit

shall be carried out according to principles, under regulations, and

in a way the Comptroller General prescribes. When prescribing the

procedures to follow and the extent of the inspection of records, the

Comptroller General shall consider generally accepted principles of

auditing, including the effectiveness of accounting organizations

and systems, internal audit and control, and related administrative

practices.

(b) The Comptroller General shall submit each audit report to

Congress and the Mayor and Council of the District of Columbia.

The report shall include the scope of an audit, information the

Comptroller General considers necessary to keep Congress, the

Mayor, and the Council informed of operations audited, and recommendations the Comptroller General considers advisable.

(c)(1) By the 90th day after receiving an audit report from the

Comptroller General, the Mayor shall state in writing to the Council measures the District of Columbia government is taking to comply with the recommendations of the Comptroller General. A copy

of the statement shall be sent to Congress.

(2) After the Council receives the statement of the Mayor, the

Council may make available for public inspection the report of the

Comptroller General and other material the Council considers pertinent.

(d) To carry out this section, records and property of or used by

the District of Columbia government necessary to make an audit

easier shall be made available to the Comptroller General. The

Mayor shall provide facilities to carry out an audit.

(e) Not later than March 1 of each year, the Comptroller General

shall submit to the Committee on the District of Columbia of the

House of Representatives and the Subcommittee on General Services, Federalism, and the District of Columbia of the Committee on

Governmental Affairs of the Senate a review of the report of the

breakdown of the independently audited revenues of the District of

Columbia for the preceding fiscal year by revenues derived from
Sec. 716 CH. 7—GENERAL ACCOUNTING OFFICE 44

the Federal Government and revenues derived from sources other

than the Federal Government that is included in the independent

annual audit of the funds of the District of Columbia conducted for

such fiscal year.

SEC. 716. AVAILABILITY OF INFORMATION AND INSPECTION OF

RECORDS.

(a) Each agency shall give the Comptroller General information

the Comptroller General requires about the duties, powers, activities, organization, and financial transactions of the agency. The

Comptroller General may inspect an agency record to get the information. This subsection does not apply to expenditures made under

section 3524 or 3526(e) of this title.

(b)(1) When an agency record is not made available to the Comptroller General within a reasonable time, the Comptroller General

may make a written request to the head of the agency. The request

shall state the authority for inspecting the records and the reason

for the inspection. The head of the agency has 20 days after receiving the request to respond. The response shall describe the record

withheld and the reason the record is being withheld. If the Comptroller General is not given an opportunity to inspect the record

within the 20-day period, the Comptroller General may file a report

with the President, the Director of the Office of Management and

Budget, the Attorney General, the head of the agency, and Congress.

(2) Through an attorney the Comptroller General designates in

writing, the Comptroller General may bring a civil action in the

district court of the United States for the District of Columbia to

require the head of the agency to produce a record—

(A) after 20 days after a report is filed under paragraph (1)

of this subsection; and

(B) subject to subsection (d) of this section.

(3) The Attorney General may represent the head of the agency.

The court may punish a failure to obey an order of the court under

this subsection as a contempt of court.

(c)(1) Subject to subsection (d) of this section, the Comptroller

General may subpena a record of a person not in the United States

Government when the record is not made available to the Comptroller General to which the Comptroller General has access by law

or by agreement of that person from whom access is sought. A subpena shall identify the record and the authority for the inspection

and may be issued by the Comptroller General. The Comptroller

General may have an individual serve a subpena under this subsection by delivering a copy to the person named in the subpena

or by mailing a copy of the subpena by certified or registered mail,

return receipt requested, to the residence or principal place of business of the person. Proof of service is shown by a verified return

by the individual serving the subpena that states how the subpena

was served or by the return receipt signed by the person served.

(2) If a person residing, found, or doing business in a judicial district refuses to comply with a subpoena issued under paragraph (1)

of this subsection, the Comptroller General, through an attorney

the Comptroller General designates in writing, may bring a civil

action in that district court to require the person to produce the

record. The court has jurisdiction of the action and may punish a
45 Sec. 717 CH. 7—GENERAL ACCOUNTING OFFICE

failure to obey an order of the court under this subsection as a contempt of court.

(d)(1) The Comptroller General may not bring a civil action for

a record withheld under subsection (b) of this section or issue a

subpena under subsection (c) of this section if—

(A) the record related to activities the President designates

as foreign intelligence or counterintelligence activities;

(B) the record is specifically exempted from disclosure to the

Comptroller General by a statute that—

(i) without discretion requires that the record be withheld from the Comptroller General;

(ii) establishes particular criteria for withholding the

record from the Comptroller General; or

(iii) refers to particular types of records to be withheld

from the Comptroller General; or

(C) by the 20th day after a report is filed under subsection

(b)(1) of this section, the President or the Director certifies to

the Comptroller General and Congress that a record could be

withheld under section 552(b)(5) or (7) of title 5 and disclosure

reasonably could be expected to impair substantially the operations of the Government.

(2) The President or the Director may not delegate certification

under paragraph (1)(C) of this subsection. A certification shall include a complete explanation of the reasons for the certification.

(e)(1) The Comptroller General shall maintain the same level of

confidentiality for a record made available under this section as is

required of the head of the agency from which it is obtained. Officers and employees of the General Accounting Office are subject to

the same statutory penalties for unauthorized disclosure or use as

officers or employees of the agency.

(2) The Comptroller General shall keep information described in

section 552(b)(6) of title 5 that the Comptroller General obtains in

a way that prevents unwarranted invasions of personal privacy.

(3) This section does not authorize information to be withheld

from Congress.

SEC. 717. EVALUATING PROGRAMS AND ACTIVITIES OF THE UNITED

STATES GOVERNMENT.

(a) In this section, ‘‘agency’’ means a department, agency, or instrumentality of the United States Government (except a mixedownership Government corporation) or the District of Columbia

government.

(b) The Comptroller General shall evaluate the results of a program or activity the Government carries out under existing law—

(1) on the initiative of the Comptroller General;

(2) when either House of Congress orders an evaluation; or

(3) when a committee of Congress with jurisdiction over the

program or activity requests the evaluation.

(c) The Comptroller General shall develop and recommend to

Congress ways to evaluate a program or activity the Government

carries out under existing law.

(d)(1) On request of a committee of Congress, the Comptroller

General shall help the committee to—

(A) develop a statement of legislative goals and ways to assess and report program performance related to the goals, in-
Sec. 718 CH. 7—GENERAL ACCOUNTING OFFICE 46

cluding recommended ways to assess performance, information

to be reported, responsibility for reporting, frequency of reports, and feasibility of pilot testing; and

(B) assess program evaluations prepared by and for an agency.

(2) On request of a member of Congress, the Comptroller General

shall give the member a copy of the material the Comptroller General compiles in carrying out this subsection that has been released

by the committee for which the material was compiled.

SEC. 718. AVAILABILITY OF DRAFT REPORTS.

(a) A draft report of an audit under section 714 of this title shall

be submitted to the Financial Institutions Examination Council,

the Federal Reserve Board, the Federal Deposit Insurance Corporation, or the Office of the Comptroller of the Currency for comment

for 30 days.

(b)(1) The Comptroller General may submit a part of a draft report to an agency for comment for more than 30 days only if the

Comptroller General decides, after a showing by the agency, that

a longer period is necessary and likely to result in a more accurate

report. The report may not be delayed because the agency does not

comment within the comment period.

(2) When a draft report is submitted to an agency for comment,

the Comptroller General shall make the draft report available on

request to—

(A) either House of Congress, a committee of Congress, or a

member of Congress if the report was begun because of a request of the House, committee, or member; or

(B) the Committee on Governmental Affairs of the Senate

and the Committee on Government Operations of the House of

Representatives if the report was not begun because of a request of either House of Congress, a committee of Congress, or

a member of Congress.

(3) This subsection is subject to statutory and executive order

guidelines for handling and storing classified information and material.

(c) A final report of the Comptroller General shall include—

(1) a statement of significant changes of a finding, conclusion, or recommendation in an earlier draft report because of

comments on the draft by an agency;

(2) a statement of the reasons the changes were made; and

(3) for a draft report submitted under subsection (a) of this

section, written comments of the agency submitted during the

comment period.

SEC. 719. COMPTROLLER GENERAL REPORTS.

(a) At the beginning of each regular session of Congress, the

Comptroller General shall report to Congress (and to the President

when requested by the President) on the work of the Comptroller

General. A report shall include recommendations on—

(1) legislation the Comptroller General considers necessary

to make easier the prompt and accurate making and settlement of accounts; and
47 Sec. 719 CH. 7—GENERAL ACCOUNTING OFFICE

(2) other matters related to the receipt, disbursement, and

use of public money the Comptroller General considers advisable.

(b)(1) the Comptroller General shall include in the report to Congress under subsection (a) of this section—

(A) a review of activities under sections 717(b)–(d) and

731(e)(2) of this title, including recommendations under section

717(c) of this title;

(B) information on carrying out duties and powers of the

Comptroller General under clauses (A) and (C) of this paragraph, subsections (g) and (h) of this section, and sections 717,

731(e)(2), 734, 1112, and 1113 of this title; and

(C) the name of each officer and employee of the General Accounting Office assigned or detailed to a committee of Congress, the committee to which the officer or employee is assigned or detailed, the length of the period of assignment or detail, a statement on whether the assignment or detail is finished or continuing, and compensation paid out of appropriations available to the Comptroller General for the period of the

assignment or detail that has been completed.

(2) In a report under subsection (a) of this section or in a special

report to Congress when Congress is in session, the Comptroller

General shall include recommendations on greater economy and efficiency in public expenditures.

(c) The Comptroller General shall report to Congress—

(1) specially on expenditures and contracts an agency makes

in violation of law;

(2) on the adequacy and effectiveness of—

(A) administrative audits of accounts and claims in an

agency; and

(B) inspections by an agency of offices and accounts of

fiscal officials; and

(3) as frequently as practicable on audits carried out under

sections 713 and 714 of this title.

(d) The Comptroller General shall report each year to the Committees on Finance and Governmental Affairs of the Senate, the

Committees on Ways and Means and Government Operations of

the House of Representatives, and the Joint Committee on Taxation. Each report shall include—

(1) procedures and requirements the Comptroller General,

the Commissioner of Internal Revenue, and the Director of the

Bureau of Alcohol, Tobacco, and Firearms, prescribe to protect

the confidentiality of returns and return information made

available to the Comptroller General under section 713(b)(1) of

this title;

(2) the scope and subject matter of audits under section 713

of this title; and

(3) findings, conclusions, or recommendations the Comptroller General develops as a result of an audit under section 713

of this title, including significant evidence of inefficiency or

mismanagement.

(e) The Comptroller General shall report on analyses carried out

under section 712(3) of this title to the Committees on Governmental Affairs and Appropriations of the Senate, the Committees
Sec. 720 CH. 7—GENERAL ACCOUNTING OFFICE 48

on Government Operations and Appropriations of the House, and

the committees with jurisdiction over legislation related to the operation of each executive agency.

(f) The Comptroller General shall give the President information

on expenditures and accounting the President requests.

(g) When the Comptroller General submits a report to Congress,

the Comptroller General shall deliver copies of the report to—

(1) the Committees on Governmental Affairs and Appropriations of the Senate;

(2) the Committees on Government Operations and Appropriations of the House;

(3) a committee of Congress that requested information on

any part of a program or activity of a department, agency, or

instrumentality of the United States Government (except a

mixed-ownership Government corporation) or the District of

Columbia government that is the subject of any part of a report; and

(4) any other committee of Congress requesting a copy.

(h)(1) The Comptroller General shall prepare—

(A) each month a list of reports issued during the prior

month; and

(B) at least once each year a list of reports issued during the

prior 12 months.

(2) A copy of each list shall be sent to each committee of Congress and each member of Congress. On request, the Comptroller

General promptly shall provide a copy of a report to a committee

or member.

(i) On request of a committee of Congress, the Comptroller General shall explain to and discuss with the committee or committee

staff a report the Comptroller General makes that would help the

committee—

(1) evaluate a program or activity of an agency within the jurisdiction of the committee; or

(2) in its consideration of proposed legislation.

SEC. 720. AGENCY REPORTS.

(a) In this section, ‘‘agency’’ means a department, agency, or instrumentality of the United States Government (except a mixedownership Government corporation) or the District of Columbia

government.

(b) When the Comptroller General makes a report that includes

a recommendation to the head of an agency, the head of the agency

shall submit a written statement on action taken on the recommendation by the head of the agency. The statement shall be

submitted to—

(1) the Committee on Governmental Affairs of the Senate

and the Committee on Government Operations of the House of

Representatives before the 61st day after the date of the report; and

(2) the Committees on Appropriations of both Houses of Congress in the first request for appropriations submitted more

than 60 days after the date of the report.

* * * * * * *
49 Sec. 720 CH. 7—GENERAL ACCOUNTING OFFICE

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

711 .............................................. 4 C.F.R. 11, 30–36, 51–53, 75, 81–83, 91, 92; 43 C.F.R. 17

712

713–714 ...................................... 4 C.F.R. 82

713 .............................................. GAO: Government Auditing Standards: 1994 Revision, see appendix III

714 .............................................. GAO: Government Auditing Standards: 1994 Revision, see appendix III

715

716 .............................................. OMB: Circular A–34, see appendix IV

717

718 .............................................. 4 C.F.R. 82

719

720 .............................................. OMB: Circular A–50, see appendix IV
50

TITLE 31—MONEY AND FINANCE

Subtitle I—General

* * * * * * *

CHAPTER 9—AGENCY CHIEF FINANCIAL OFFICERS

SEC. 901. ESTABLISHMENT OF AGENCY CHIEF FINANCIAL OFFICERS.

(a) There shall be within each agency described in subsection (b)

an agency Chief Financial Officer. Each agency Chief Financial Officer shall—

(1) for those agencies described in subsection (b)(1)—

(A) be appointed by the President, by and with the advice and consent of the Senate; or

(B) be designated by the President, in consultation with

the head of the agency, from among officials of the agency

who are required by law to be so appointed;

(2) for those agencies described in subsection (b)(2)—

(A) be appointed by the head of the agency;

(B) be in the competitive service or the senior executive

service; and

(C) be career appointees; and

(3) be appointed or designated, as applicable, from among individuals who possess demonstrated ability in general management of, and knowledge of and extensive practical experience

in financial management practices in large governmental or

business entities.

(b)(1) The agencies referred to in subsection (a)(1) are the following:

(A) The Department of Agriculture.

(B) The Department of Commerce.

(C) The Department of Defense.

(D) The Department of Education.

(E) The Department of Energy.

(F) The Department of Health and Human Services.

(G) The Department of Housing and Urban Development.

(H) The Department of the Interior.

(I) The Department of Justice.

(J) The Department of Labor.

(K) The Department of State.

(L) The Department of Transportation.

(M) The Department of the Treasury.

(N) The Department of Veterans Affairs.

(O) The Environmental Protection Agency.

(P) The National Aeronautics and Space Administration.

(2) The agencies referred to in subsection (a)(2) are the following:

(A) The Agency for International Development.
51 Sec. 902 CH. 9—AGENCY CHIEF FINANCIAL OFFICERS

(B) The Federal Emergency Management Agency.

(C) The General Services Administration.

(D) The National Science Foundation.

(E) The Nuclear Regulatory Commission.

(F) The Office of Personnel Management.

(G) The Small Business Administration.

(H) The Social Security Administration.

SEC. 902. AUTHORITY AND FUNCTIONS OF AGENCY CHIEF FINANCIAL

OFFICERS.

(a) An agency Chief Financial Officer shall—

(1) report directly to the head of the agency regarding financial management matters;

(2) oversee all financial management activities relating to

the programs and operations of the agency;

(3) develop and maintain an integrated agency accounting

and financial management system, including financial reporting and internal controls, which—

(A) complies with applicable accounting principles,

standards, and requirements, and internal control standards;

(B) complies with such policies and requirements as may

be prescribed by the Director of the Office of Management

and Budget;

(C) complies with any other requirements applicable to

such systems; and

(D) provides for—

(i) complete, reliable, consistent, and timely information which is prepared on a uniform basis and which

is responsive to the financial information needs of

agency management;

(ii) the development and reporting of cost information;

(iii) the integration of accounting and budgeting information; and

(iv) the systematic measurement of performance;

(4) make recommendations to the head of the agency regarding the selection of the Deputy Chief Financial Officer of the

agency;

(5) direct, manage, and provide policy guidance and oversight

of agency financial management personnel, activities, and operations, including—

(A) the preparation and annual revision of an agency

plan to—

(i) implement the 5-year financial management plan

prepared by the Director of the Office of Management

and Budget under section 3512(a)(3) of this title; and

(ii) comply with the requirements established under

sections 3515 and subsections (e) and (f) of section

3521 of this title;

(B) the development of agency financial management

budgets;

(C) the recruitment, selection, and training of personnel

to carry out agency financial management functions;
Sec. 902 CH. 9—AGENCY CHIEF FINANCIAL OFFICERS 52

(D) the approval and management of agency financial

management systems design or enhancement projects;

(E) the implementation of agency asset management systems, including systems for cash management, credit management, debt collection, and property and inventory management and control

(6) prepare and transmit, by not later than 60 days after the

submission of the audit report required by section 3521(f) of

this title, an annual report to the agency head and the Director

of the Office of Management and Budget, which shall include—

(A) a description and analysis of the status of financial

management of the agency;

(B) the annual financial statements prepared under section 3515 of this title;

(C) the audit report transmitted to the head of the agency under section 3521(f) of this title;

(D) a summary of the reports on internal accounting and

administrative control systems submitted to the President

and the Congress under the amendments made by the

Federal Managers’ Financial Integrity Act of 1982 (Public

Law 97–255); and

(E) other information the head of the agency considers

appropriate to fully inform the President and the Congress

concerning the financial management of the agency;

(7) monitor the financial execution of the budget of the agency in relation to actual expenditures, and prepare and submit

to the head of the agency timely performance reports; and

(8) review, on a biennial basis, the fees, royalties, rents, and

other charges imposed by the agency for services and things of

value it provides, and make recommendations on revising

those charges to reflect costs incurred by it in providing those

services and things of value.

(b)(1) In addition to the authority otherwise provided by this section, each agency Chief Financial Officer—

(A) subject to paragraph (2), shall have access to all records,

reports, audits, reviews, documents, papers, recommendations,

or other material which are the property of the agency or

which are available to the agency, and which relate to programs and operations with respect to which that agency Chief

Financial Officer has responsibilities under this section;

(B) may request such information or assistance as may be

necessary for carrying out the duties and responsibilities provided by this section from any Federal, State, or local governmental entity; and

(C) to the extent and in such amounts as may be provided

in advance by appropriations Acts, may—

(i) enter into contracts and other arrangements with

public agencies and with private persons for the preparation of financial statements, studies, analyses, and other

services; and

(ii) make such payments as may be necessary to carry

out the provisions of this section.

(2) Except as provided in paragraph (1)(B), this subsection does

not provide to an agency Chief Financial Officer any access greater
53 Sec. 903 CH. 9—AGENCY CHIEF FINANCIAL OFFICERS

than permitted under any other law to records, reports, audits, reviews, documents, papers, recommendations, or other material of

any Office of Inspector General established under the Inspector

General Act of 1978 (5 U.S.C.App.).

SEC. 903. ESTABLISHMENT OF AGENCY DEPUTY CHIEF FINANCIAL OFFICERS.

(a) There shall be within each agency described in section 901(b)

an agency Deputy Chief Financial Officer, who shall report directly

to the agency Chief Financial Officer on financial management

matters. The position of agency Deputy Chief Financial Officer

shall be a career reserved position in the Senior Executive Service.

(b) Consistent with qualification standards developed by, and in

consultation with, the agency Chief Financial Officer and the Director of the Office of Management and Budget, the head of each

agency shall appoint as Deputy Chief Financial Officer an individual with demonstrated ability and experience in accounting, budget

execution, financial and management analysis, and systems development, and not less than 6 years practical experience in financial

management at large governmental entities.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

902 .............................................. 10 C.F.R. 170

902(a) .......................................... OMB: Circular A–129, see appendix IV
54

TITLE 31—MONEY AND FINANCE

Subtitle II—The Budget Process

* * * * * * *

CHAPTER 11—THE BUDGET AND FISCAL, BUDGET, AND

PROGRAM INFORMATION

SEC. 1101. DEFINITIONS.

In this chapter—

(1) ‘‘agency’’ includes the District of Columbia government

but does not include the legislative branch or the Supreme

Court.

(2) ‘‘appropriations’’ means appropriated amounts and includes, in appropriate context—

(A) funds;

(B) authority to make obligations by contract before appropriations; and

(C) other authority making amounts available for obligation or expenditure.

SEC. 1102. FISCAL YEAR.

The fiscal year of the Treasury begins on October 1 of each year

and ends on September 30 of the following year. Accounts of receipts and expenditures required under law to be published each

year shall be published for the fiscal year.

SEC. 1103. BUDGET CEILING.

Congress reaffirms its commitment that budget outlays of the

United States Government for a fiscal year may be not more than

the receipts of the Government for that year.

SEC. 1104. BUDGET AND APPROPRIATIONS AUTHORITY OF THE PRESIDENT.

(a) The President shall prepare budgets of the United States

Government under section 1105 of this title and proposed deficiency and supplemental appropriations under section 1107 of this

title. To the extent practicable, the President shall use uniform

terms in stating the purposes and conditions of appropriations.

(b) Except as provided in this chapter, the President shall prescribe the contents and order of statements in the budget on expenditures and estimated expenditures and statements on proposed

appropriations and information submitted with the budget and proposed appropriations. The President shall include with the budget

and proposed appropriations information on personnel and other

objects of expenditure in the way that information was included in

the budget for fiscal year 1950. However, the requirement that information be included in the budget in that way may be waived or

changed by joint action of the Committees on Appropriations of
55 Sec. 1105 CH. 11—BUDGET INFORMATION

both Houses of Congress. This subsection does not limit the authority of a committee of Congress to request information in a form it

prescribes.

(c) When the President makes a basic change in the form of the

budget, the President shall submit with the budget information

showing where items in the budget for the prior fiscal year are contained in the present budget. However, the President may change

the functional categories in the budget only in consultation with

the Committees on Appropriations and on the Budget of both

Houses of Congress. Committees of the House of Representatives

and Senate shall receive prompt notification of all such changes.

(d) The President shall develop programs and prescribe regulations to improve the compilation, analysis, publication, and dissemination of statistical information by executive agencies. The

President shall carry out this subsection through the Administrator

for the Office of Information and Regulatory Affairs in the Office

of Management and Budget.

(e) Under regulations prescribed by the President, each agency

shall provide information required by the President in carrying out

this chapter. The President has access to, and may inspect, records

of an agency to obtain information.

SEC. 1105. BUDGET CONTENTS AND SUBMISSION TO CONGRESS.

(a) On or after the first Monday in January but not later than

the first Monday in February of each year, the President shall submit a budget of the United States Government for the following fiscal year. Each budget shall include a budget message and summary and supporting information. The President shall include in

each budget the following:

(1) Information on activities and functions of the Government.

(2) When practicable, information on costs and achievements

of Government programs.

(3) Other desirable classifications of information.

(4) A reconciliation of the summary information on expenditures with proposed appropriations.

(5) Except as provided in subsection (b) of this section, estimated expenditures and proposed appropriations the President

decides are necessary to support the Government in the fiscal

year for which the budget is submitted and the 4 fiscal years

after that year.

(6) Estimated receipts of the Government in the fiscal year

for which the budget is submitted and the 4 fiscal years after

that year under—

(A) laws in effect when the budget is submitted; and

(B) proposals in the budget to increase revenues.

(7) Appropriations, expenditures, and receipts of the Government in the prior fiscal year.

(8) Estimated expenditures and receipts, and appropriations

and proposed appropriations, of the Government for the current fiscal year.

(9) Balanced statements of the—

(A) condition of the Treasury at the end of the prior fiscal year;
Sec. 1105 CH. 11—BUDGET INFORMATION 56

(B) estimated condition of the Treasury at the end of the

current fiscal year; and

(C) estimated condition of the Treasury at the end of the

fiscal year for which the budget is submitted if financial

proposals in the budget are adopted.

(10) Essential information about the debt of the Government.

(11) Other financial information the President decides is desirable to explain in practicable detail the financial condition

of the Government.

(12) For each proposal in the budget for legislation that

would establish or expand a Government activity or function,

a table showing—

(A) the amount proposed in the budget for appropriation

and for expenditure because of the proposal in the fiscal

year for which the budget is submitted; and

(B) the estimated appropriation required because of the

proposal for each of the 4 fiscal years after that year that

the proposal will be in effect.

(13) An allowance for additional estimated expenditures and

proposed appropriations for the fiscal year for which the budget is submitted.

(14) An allowance for unanticipated uncontrollable expenditures for that year.

(15) A separate statement on each of the items referred to

in section 301(a)(1)–(5) of the Congressional Budget Act of

1974 (2 U.S.C. 632(a)(1)–(5)).

(16) The level of tax expenditures under existing law in the

tax expenditures budget (as defined in section 3(a)(3) of the

Congressional Budget Act of 1974 (2 U.S.C. 622(a)(3)) for the

fiscal year for which the budget is submitted, considering projected economic factors and changes in the existing levels

based on proposals in the budget.

(17) Information on estimates of appropriations for the fiscal

year following the fiscal year for which the budget is submitted

for grants, contracts, and other payments under each program

for which there is an authorization of appropriations for that

following fiscal year when the appropriations are authorized to

be included in an appropriation law for the fiscal year before

the fiscal year in which the appropriation is to be available for

obligation.

(18) A comparison of the total amount of budget outlays for

the prior fiscal year, estimated in the budget submitted for

that year, for each major program having relatively uncontrollable outlays with the total amount of outlays for that program

in that year.

(19) A comparison of the total amount of receipts for the

prior fiscal year, estimated in the budget submitted for that

year, with receipts received in that year, and for each major

source of receipts, a comparison of the amount of receipts estimated in that budget with the amount of receipts from that

source in that year.

(20) An analysis and explanation of the differences between

each amount compared under clauses (18) and (19) of this subsection.
57 Sec. 1105 CH. 11—BUDGET INFORMATION

(21) A horizontal budget showing—

(A) the programs for meteorology and of the National

Climate Program established under section 5 of the National Climate Program Act (15 U.S.C. 2904);

(B) specific aspects of the program of, and appropriations

for, each agency; and

(C) estimated goals and financial requirements.

(22) A statement of budget authority, proposed budget authority, budget outlays, and proposed budget outlays, and descriptive information in terms of—

(A) a detailed structure of national needs that refers to

the missions and programs of agencies (as defined in section 101 of this title); and

(B) the missions and basic programs.

(23) Separate appropriation accounts for appropriations

under the Occupational Safety and Health Act of 1970 (29

U.S.C. 651 et seq.) and the Federal Mine Safety and Health

Act of 1977 (30 U.S.C. 801 et seq.).

(24) Recommendations on the return of Government capital

to the Treasury by a mixed-ownership corporation (as defined

in section 9101(2) of this title) that the President decides are

desirable.

(25) A separate appropriation account for appropriations for

each Office of Inspector General of an establishment defined

under section 11(2) of the Inspector General Act of 1978.

(26) [Terminated]

(27) A separate statement of the amount of appropriations

requested for the Office of National Drug Control Policy and

each program of the National Drug Control Program.

(28) A separate statement of the amount of appropriations

requested for the Office of Federal Financial Management.

(29) Beginning with fiscal year 1999, a Federal Government

performance plan for the overall budget as provided for under

section 1115.

(30) Information about the Violent Crime Reduction Trust

Fund, including a separate statement of amounts in that Trust

Fund.

(31) An analysis displaying, by agency, proposed reductions

in full-time equivalent positions compared to the current year’s

level in order to comply with section 5 of the Federal

Workforce Restructuring Act of 1994.

(b) Estimated expenditures and proposed appropriations for the

legislative branch and the judicial branch to be included in each

budget under subsection (a)(5) of this section shall be submitted to

the President before October 16 of each year and included in the

budget by the President without change.

(c) The President shall recommend in the budget appropriate action to meet an estimated deficiency when the estimated receipts

for the fiscal year for which the budget is submitted (under laws

in effect when the budget is submitted) and the estimated amounts

in the Treasury at the end of the current fiscal year available for

expenditure in the fiscal year for which the budget is submitted,

are less than the estimated expenditures for that year. The President shall make recommendations required by the public interest
Sec. 1105 CH. 11—BUDGET INFORMATION 58

when the estimated receipts and estimated amounts in the Treasury are more than the estimated expenditures.

(d) When the President submits a budget or supporting information about a budget, the President shall include a statement on all

changes about the current fiscal year that were made before the

budget or information was submitted.

(e)(1) The President shall submit with materials related to each

budget transmitted under subsection (a) on or after January 1,

1985, an analysis for the ensuing fiscal year that shall identify requested appropriations or new obligational authority and outlays

for each major program that may be classified as a public civilian

capital investment program and for each major program that may

be classified as a military capital investment program, and shall

contain summaries of the total amount of such appropriations or

new obligational authority and outlays for public civilian capital investment programs and summaries of the total amount of such appropriations or new obligational authority and outlays for military

capital investment programs. In addition, the analysis under this

paragraph shall contain—

(A) an estimate of the current service levels of public civilian

capital investment and of military capital investment and alternative high and low levels of such investments over a period

of ten years in current dollars and over a period of five years

in constant dollars;

(B) the most recent assessment analysis and summary, in a

standard format, of public civilian capital investment needs in

each major program area over a period of ten years;

(C) an identification and analysis of the principal policy issues that affect estimated public civilian capital investment

needs for each major program; and

(D) an identification and analysis of factors that affect estimated public civilian capital investment needs for each major

program, including but not limited to the following factors:

(i) economic assumptions;

(ii) engineering standards;

(iii) estimates of spending for operation and maintenance;

(iv) estimates of expenditures for similar investments by

State and local governments; and

(v) estimates of demand for public services derived from

such capital investments and estimates of the service capacity of such investments.

To the extent that any analysis required by this paragraph relates to any program for which Federal financial assistance is distributed under a formula prescribed by law, such analysis shall be

organized by State and within each State by major metropolitan

area if data are available.

(2) For purposes of this subsection, any appropriation, new

obligational authority, or outlay shall be classified as a public civilian capital investment to the extent that such appropriation, authority, or outlay will be used for the construction, acquisition, or

rehabilitation of any physical asset that is capable of being used to

produce services or other benefits for a number of years and is not
59 Sec. 1105 CH. 11—BUDGET INFORMATION

classified as a military capital investment under paragraph (3).

Such assets shall include (but not be limited to)—

(A) roadways or bridges,

(B) airports or airway facilities,

(C) mass transportation systems,

(D) wastewater treatment or related facilities,

(E) water resources projects,

(F) hospitals,

(G) resource recovery facilities,

(H) public buildings,

(I) space or communications facilities,

(J) railroads, and

(K) federally assisted housing.

(3) For purposes of this subsection, any appropriation, new

obligational authority, or outlay shall be classified as a military

capital investment to the extent that such appropriation, authority,

or outlay will be used for the construction, acquisition, or rehabilitation of any physical asset that is capable of being used to produce

services or other benefits for purposes of national defense and security for a number of years. Such assets shall include military bases,

posts, installations, and facilities.

(4) Criteria and guidelines for use in the identification of public

civilian and military capital investments, for distinguishing between public civilian and military capital investments, and for distinguishing between major and nonmajor capital investment programs shall be issued by the Director of the Office of Management

and Budget after consultation with the Comptroller General and

the Congressional Budget Office. The analysis submitted under this

subsection shall be accompanied by an explanation of such criteria

and guidelines.

(5) For purposes of this subsection—

(A) the term ‘‘construction’’ includes the design, planning,

and erection of new structures and facilities, the expansion of

existing structures and facilities, the reconstruction of a project

at an existing site or adjacent to an existing site, and the installation of initial and replacement equipment for such structures and facilities;

(B) the term ‘‘acquisition’’ includes the addition of land, sites,

equipment, structures, facilities, or rolling stock by purchase,

lease-purchase, trade, or donation; and

(C) the term ‘‘rehabilitation’’ includes the alteration of or correction of deficiencies in an existing structure or facility so as

to extend the useful life or improve the effectiveness of the

structure or facility, the modernization or replacement of

equipment at an existing structure or facility, and the modernization of, or replacement of parts for, rolling stock.

(f) The budget transmitted pursuant to subsection (a) for a fiscal

year shall be prepared in a manner consistent with the requirements of the Balanced Budget and Emergency Deficit Control Act

of 1985 that apply to that and subsequent fiscal years.

(g)(1) The Director of the Office of Management and Budget shall

establish the funding for advisory and assistance services for each

department and agency as a separate object class in each budget

annually submitted to the Congress under this section.
Sec. 1106 CH. 11—BUDGET INFORMATION 60

(2)(A) In paragraph (1), except as provided in subparagraph (B),

the term ‘‘advisory and assistance services’’ means the following

services when provided by nongovernmental sources:

(i) Management and professional support services.

(ii) Studies, analyses, and evaluations.

(iii) Engineering and technical services.

(B) In paragraph (1), the term ‘‘advisory and assistance services’’

does not include the following services:

(i) Routine automated data processing and telecommunications services unless such services are an integral part of a

contract for the procurement of advisory and assistance services.

(ii) Architectural and engineering services, as defined in section 901 of the Brooks Architect-Engineers Act (40 U.S.C. 541).

(iii) Research on basic mathematics or medical, biological,

physical, social, psychological, or other phenomena.

SEC. 1106. SUPPLEMENTAL BUDGET ESTIMATES AND CHANGES.

(a) Before July 16 of each year, the President shall submit to

Congress a supplemental summary of the budget for the fiscal year

for which the budget is submitted under section 1105(a) of this

title. The summary shall include—

(1) for that fiscal year—

(A) substantial changes in or reappraisals of estimates of

expenditures and receipts;

(B) substantial obligations imposed on the budget after

its submission;

(C) current information on matters referred to in section

1105(a)(8) and (9)(B) and (C) of this title; and

(D) additional information the President decides is advisable to provide Congress with complete and current information about the budget and current estimates of the

functions, obligations, requirements, and financial condition of the United States Government.

(2) for the 4 fiscal years following the fiscal year for which

the budget is submitted, information on estimated expenditures for programs authorized to continue in future years, or

that are considered mandatory, under law; and

(3) for future fiscal years, information on estimated expenditures of balances carried over from the fiscal year for which the

budget is submitted.

(b) Before July 16 of each year, the President shall submit to

Congress a statement of changes in budget authority requested, estimated budget outlays, and estimated receipts for the fiscal year

for which the budget is submitted (including prior changes proposed for the executive branch of the Government) that the President decides are necessary and appropriate based on current information. The statement shall include the effect of those changes on

the information submitted under section 1105(a)(1)–(14) and (b) of

this title and shall include supporting information as practicable.

The statement submitted before July 16 may be included in the information submitted under subsection (a)(1) of this section.

(c) Subsection (f) of section 1105 shall apply to revisions and supplemental summaries submitted under this section to the same ex-
61 Sec. 1108 CH. 11—BUDGET INFORMATION

tent that such subsection applies to the budget submitted under

section 1105(a) to which such revisions and summaries relate.

SEC. 1107. DEFICIENCY AND SUPPLEMENTAL APPROPRIATIONS.

The President may submit to Congress proposed deficiency and

supplemental appropriations the President decides are necessary

because of laws enacted after the submission of the budget or that

are in the public interest. The President shall include the reasons

for the submission of the proposed appropriations and the reasons

the proposed appropriations were not included in the budget. When

the total proposed appropriations would have required the President to make a recommendation under section 1105(c) of this title

if they had been included in the budget, the President shall make

a recommendation under that section.

SEC. 1108. PREPARATION AND SUBMISSION OF APPROPRIATIONS REQUESTS TO THE PRESIDENT.

(a) In this section (except subsections (b)(1) and (e)), ‘‘agency’’

means a department, agency, or instrumentality of the United

States Government.

(b)(1) The head of each each agency shall prepare and submit to

the President each appropriation request for the agency. The request shall be prepared and submitted in the form prescribed by

the President under this chapter and by the date established by

the President. When the head of an agency does not submit a request by that date, the President shall prepare the request for the

agency to be included in the budget or changes in the budget or as

deficiency and supplemental appropriations. The President may

change agency appropriation requests. Agency appropriation requests shall be developed from cost-based budgets in the way and

at times prescribed by the President. The head of the agency shall

use the cost-based budget to administer the agency and to divide

appropriations or amounts.

(2) An officer or employee of an agency in the executive branch

may submit to the President or Congress a request for legislation

authorizing deficiency or supplemental appropriations for the agency only with the approval of the head of the agency.

(c) The head of an agency shall include with an appropriation request submitted to the President a report that the statement of obligations submitted with the request contains obligations consistent

with section 1501 of this title. The head of the agency shall support

the report with a certification of the consistency and shall support

the certification with records showing that the amounts have been

obligated. The head of the agency shall designate officials to make

the certifications, and those officials may not delegate the duty to

make the certifications. The certifications and records shall be kept

in the agency—

(1) in a form that makes audits and reconciliations easy; and

(2) for a period necessary to carry out audits and reconciliations.

(d) To the extent practicable, the head of an agency shall—

(1) provide information supporting the agency’s budget request for its missions by function and subfunction (including

the mission of each organizational unit of the agency); and

(2) relate the agency’s programs to its missions.
Sec. 1109 CH. 11—BUDGET INFORMATION 62

(e) Except as provided in subsection (f) of this section, an officer

or employee of an agency (as defined in section 1101 of this title)

may submit to Congress or a committee of Congress an appropriations estimate or request, a request for an increase in that estimate

or request, or a recommendation on meeting the financial needs of

the Government only when requested by either House of Congress.

(f) The Interstate Commerce Commission shall submit to Congress copies of budget estimates, requests, and information (including personnel needs), legislative recommendations, prepared testimony for congressional hearings, and comments on legislation at

the same time they are sent to the President or the Office of Management and Budget. An officer of an agency may not impose conditions on or impair communication by the Commission with Congress, or a committee or member of Congress, about the information.

(g) Amounts available under law are available for field examinations of appropriation estimates. The use of the amounts is subject

only to regulations prescribed by the appropriate standing committees of Congress.

SEC. 1109. CURRENT PROGRAMS AND ACTIVITIES ESTIMATES.

(a) On or before the first Monday after January 3 of each year

(on or before February 5 in 1986), the President shall submit to

both Houses of Congress the estimated budget outlays and proposed budget authority that would be included in the budget for

the following fiscal year if programs and activities of the United

States Government were carried on during that year at the same

level as the current fiscal year without a change in policy. The

President shall state the estimated budget outlays and proposed

budget authority by function and subfunction under the classifications in the budget summary table under the heading ‘‘Budget Authority and Outlays by Function and Agency’’, by major programs

in each function, and by agency. The President shall also include

a statement of the economic and program assumptions on which

those budget outlays and budget authority are based, including inflation, real economic growth, and unemployment rates, program

caseloads, and pay increases.

(b) The Joint Economic Committee shall review the estimated

budget outlays and proposed budget authority and submit an economic evaluation of the budget outlays and budget authority to the

Committees on the Budget of both Houses before March 1 of each

year.

SEC. 1110. YEAR-AHEAD REQUESTS FOR AUTHORIZING LEGISLATION.

A request to enact legislation authorizing new budget authority

to continue a program or activity for a fiscal year shall be submitted to Congress before May 16 of the year before the year in which

the fiscal year begins. If a new program or activity will continue

for more than one year, the request must be submitted for at least

the first and 2d fiscal years.

SEC. 1111. IMPROVING ECONOMY AND EFFICIENCY.

To improve economy and efficiency in the United States Government, the President shall—
63 Sec. 1112 CH. 11—BUDGET INFORMATION

(1) make a study of each agency to decide, and may send

Congress recommendations, on changes that should be made

in—

(A) the organization, activities, and business methods of

agencies;

(B) agency appropriations;

(C) the assignment of particular activities to particular

services; and

(D) regrouping of services; and

(2) evaluate and develop improved plans for the organization,

coordination, and management of the executive branch of the

Government.

SEC. 1112. FISCAL, BUDGET, AND PROGRAM INFORMATION.

(a) In this section, ‘‘agency’’ means a department, agency, or instrumentality of the United States Government except a mixedownership Government corporation.

(b) In cooperation with the Comptroller General, the Secretary of

the Treasury and the Director of the Office of Management and

Budget shall establish and maintain standard data processing and

information systems for fiscal, budget, and program information for

use by agencies to meet the needs of the Government, and to the

extent practicable, of State and local governments.

(c) The Comptroller General—

(1) in cooperation with the Secretary, the Director of the Office of Management and Budget, and the Director of the Congressional Budget Office, shall establish, maintain, and publish

standard terms and classifications for fiscal, budget, and program information of the Government, including information on

fiscal policy, receipts, expenditures, programs, projects, activities, and functions;

(2) when advisable, shall report to Congress on those terms

and classifications, and recommend legislation necessary to

promote the establishment, maintenance, and use of standard

terms and classifications by the executive branch of the Government; and

(3) in carrying out this subsection, shall give particular consideration to the needs of the Committees on Appropriations

and on the Budget of both Houses of Congress, the Committee

on Ways and Means of the House, the Committee on Finance

of the Senate, and the Congressional Budget Office.

(d) Agencies shall use the standard terms and classifications published under subsection (c)(1) of this section in providing fiscal,

budget, and program information to Congress.

(e) In consultation with the President, the head of each executive

agency shall take actions necessary to achieve to the extent possible—

(1) consistency in budget and accounting classifications;

(2) synchronization between those classifications and organizational structure; and

(3) information by organizational unit on performance and

program costs to support budget justifications.

(f) In cooperation with the Director of the Congressional Budget

Office, the Comptroller General, and appropriate representatives of
Sec. 1113 CH. 11—BUDGET INFORMATION 64

State and local governments, the Director of the Office of Management and Budget (to the extent practicable) shall provide State and

local governments with fiscal, budget, and program information

necessary for accurate and timely determination by those governments of the impact on their budgets of assistance of the United

States Government.

SEC. 1113. CONGRESSIONAL INFORMATION.

(a)(1) When requested by a committee of Congress having jurisdiction over receipts or appropriations, the President shall provide

the committee with assistance and information.

(2) When requested by a committee of Congress, additional information related to the amount of an appropriation originally requested by an Office of Inspector General shall be submitted to the

committee.

(b) When requested by a committee of Congress, by the Comptroller General, or by the Director of the Congressional Budget Office, the Secretary of the Treasury, the Director of the Office of

Management and Budget, and the head of each executive agency

shall—

(1) provide information on the location and kind of available

fiscal, budget, and program information;

(2) to the extent practicable, prepare summary tables of that

fiscal, budget, and program information and related information the committee, the Comptroller General, or the Director of

the Congressional Budget Office considers necessary; and

(3) provide a program evaluation carried out or commissioned by an executive agency.

(c) In cooperation with the Director of the Congressional Budget

Office, the Secretary, and the Director of the Office of Management

and Budget, and Comptroller General shall—

(1) establish and maintain a current directory of sources of,

and information systems for, fiscal, budget, and program information and a brief description of the contents of each source

and system;

(2) when requested, provide assistance to committees of Congress and members of Congress in obtaining information from

the sources in the directory; and

(3) when requested, provide assistance to committees and, to

the extent practicable, to members of Congress in evaluating

the information obtained from the sources in the directory.

(d) To the extent they consider necessary, the Comptroller General and the Director of the Congressional Budget Office individually or jointly shall establish and maintain a file of information

to meet recurring needs of Congress for fiscal, budget, and program

information to carry out this section and sections 717 and 1112 of

this title. The file shall include information on budget requests,

congressional authorizations to obligate and expend, apportionment

and reserve actions, and obligations and expenditures. The Comptroller General and the Director shall maintain the file and an

index to the file so that it is easier for the committees and agencies

of Congress to use the file and index through data processing and

communications techniques.

(e)(1) The Comptroller General shall—
65 Sec. 1115 CH. 11—BUDGET INFORMATION

(A) carry out a continuing program to identify the needs of

committees and members of Congress for fiscal, budget, and

program information to carry out this section and section 1112

of this title;

(B) assist committees of Congress in developing their information needs;

(C) monitor recurring reporting requirements of Congress

and committees; and

(D) make recommendations to Congress and committees for

changes and improvements in those reporting requirements to

meet information needs identified by the Comptroller General,

to improve their usefulness to congressional users, and to

eliminate unnecessary reporting.

(2) Before September 2 of each year, the Comptroller General

shall report to Congress on—

(A) the needs identified under paragraph (1)(A) of this subsection;

(B) the relationship of those needs to existing reporting requirements;

(C) the extent to which reporting by the executive branch of

the United States Government currently meets the identified

needs;

(D) the changes to standard classifications necessary to meet

congressional needs;

(E) activities, progress, and results of the program of the

Comptroller General under paragraph (1)(B)–(D) of this subsection; and

(F) progress of the executive branch in the prior year.

(3) Before March 2 of each year, the Director of the Office of

Management and Budget and the Secretary shall report to Congress on plans for meeting the needs identified under paragraph

(1)(A) of this subsection, including—

(A) plans for carrying out changes to classifications to meet

information needs of Congress;

(B) the status of information systems in the prior year; and

(C) the use of standard classifications.

øSEC. 1114. REPEALED. PUB.L. 103–355, TITLE II, SEC. 2454(c)(2), OCT. 13,

1994, 108 STAT. 3326¿

SEC. 1115. PERFORMANCE PLANS.

(a) In carrying out the provisions of section 1105(a)(29), the Director of the Office of Management and Budget shall require each

agency to prepare an annual performance plan covering each program activity set forth in the budget of such agency. Such plan

shall—

(1) establish performance goals to define the level of performance to be achieved by a program activity;

(2) express such goals in an objective, quantifiable, and

measurable form unless authorized to be in an alternative form

under subsection (b);

(3) briefly describe the operational processes, skills, and

technology, and the human, capital, information, or other resources required to meet the performance goals;
Sec. 1115 CH. 11—BUDGET INFORMATION 66

(4) establish performance indicators to be used in measuring

or assessing the relevant outputs, service levels, and outcomes

of each program activity;

(5) provide a basis for comparing actual program results with

the established performance goals; and

(6) describe the means to be used to verify and validate

measured values.

(b) If an agency, in consultation with the Director of the Office

of Management and Budget, determines that it is not feasible to

express the performance goals for a particular program activity in

an objective, quantifiable, and measurable form, the Director of the

Office of Management and Budget may authorize an alternative

form. Such alternative form shall—

(1) include separate descriptive statements of—

(A)(i) a minimally effective program, and

(ii) a successful program, or

(B) such alternative as authorized by the Director of the

Office of Management and Budget, with sufficient precision and in such terms that would allow for an accurate,

independent determination of whether the program activity’s performance meets the criteria of the description; or

(2) state why it is infeasible or impractical to express a performance goal in any form for the program activity.

(c) For the purpose of complying with this section, an agency may

aggregate, disaggregate, or consolidate program activities, except

that any aggregation or consolidation may not omit or minimize the

significance of any program activity constituting a major function

or operation for the agency.

(d) An agency may submit with its annual performance plan an

appendix covering any portion of the plan that—

(1) is specifically authorized under criteria established by an

Executive order to be kept secret in the interest of national defense or foreign policy; and

(2) is properly classified pursuant to such Executive order.

(e) The functions and activities of this section shall be considered

to be inherently Governmental functions. The drafting of performance plans under this section shall be performed only by Federal

employees.

(f) For purposes of this section and sections 1116 through 1119,

and sections 9703 and 9704 the term—

(1) ‘‘agency’’ has the same meaning as such term is defined

under section 306(f) of title 5;

(2) ‘‘outcome measure’’ means an assessment of the results of

a program activity compared to its intended purpose;

(3) ‘‘output measure’’ means the tabulation, calculation, or

recording of activity or effort and can be expressed in a quantitative or qualitative manner;

(4) ‘‘performance goal’’ means a target level of performance

expressed as a tangible, measurable objective, against which

actual achievement can be compared, including a goal expressed as a quantitative standard, value, or rate;

(5) ‘‘performance indicator’’ means a particular value or characteristic used to measure output or outcome;
67 Sec. 1116 CH. 11—BUDGET INFORMATION

(6) ‘‘program activity’’ means a specific activity or project as

listed in the program and financing schedules of the annual

budget of the United States Government; and

(7) ‘‘program evaluation’’ means an assessment, through objective measurement and systematic analysis, of the manner

and extent to which Federal programs achieve intended objectives.

HISTORICAL AND STATUTORY NOTES

Congressional Findings and Statement of Purposes

Section 2 of Pub.L. 103–62 provided that:

‘‘(a) FINDINGS.—The Congress finds that—

‘‘(1) waste and inefficiency in Federal programs undermines

the confidence of the American people in the Government and

reduces the Federal Government’s ability to address adequately

vital public needs;

‘‘(2) Federal managers are seriously disadvantaged in their

efforts to improve program efficiency and effectiveness, because

of insufficient articulation of program goals and inadequate information on program performance; and

‘‘(3) congressional policymaking, spending decisions and program oversight are seriously handicapped by insufficient attention to program performance and results.

‘‘(b) PURPOSES.—The purposes of this Act [see Short Title of 1993

Amendments note set out under section 1101 of this title] are to—

‘‘(1) improve the confidence of the American people in the capability of the Federal Government, by systematically holding

Federal agencies accountable for achieving program results;

‘‘(2) initiate program performance reform with a series of pilot

projects in setting program goals, measuring program performance against those goals, and reporting publicly on their

progress;

‘‘(3) improve Federal program effectiveness and public accountability by promoting a new focus on results, service quality, and customer satisfaction;

‘‘(4) help Federal managers improve service delivery, by requiring that they plan for meeting program objectives and by

providing them with information about program results and

service quality;

‘‘(5) improve congressional decisionmaking by providing more

objective information on achieving statutory objectives, and on

the relative effectiveness and efficiency of Federal programs and

spending; and

‘‘(6) improve internal management of the Federal Government.’’

SEC. 1116. PROGRAM PERFORMANCE REPORTS.

(a) No later than March 31, 2000, and no later than March 31

of each year thereafter, the head of each agency shall prepare and

submit to the President and the Congress, a report on program performance for the previous fiscal year.

(b)(1) Each program performance report shall set forth the performance indicators established in the agency performance plan

under section 1115, along with the actual program performance
Sec. 1117 CH. 11—BUDGET INFORMATION 68

achieved compared with the performance goals expressed in the

plan for that fiscal year.

(2) If performance goals are specified in an alternative form

under section 1115(b), the results of such program shall be described in relation to such specifications, including whether the

performance failed to meet the criteria of a minimally effective or

successful program.

(c) The report for fiscal year 2000 shall include actual results for

the preceding fiscal year, the report for fiscal year 2001 shall include actual results for the two preceding fiscal years, and the report for fiscal year 2002 and all subsequent reports shall include

actual results for the three preceding fiscal years.

(d) Each report shall—

(1) review the success of achieving the performance goals of

the fiscal year;

(2) evaluate the performance plan for the current fiscal year

relative to the performance achieved toward the performance

goals in the fiscal year covered by the report;

(3) explain and describe, where a performance goal has not

been met (including when a program activity’s performance is

determined not to have met the criteria of a successful program activity under section 1115(b)(1)(A)(ii) or a corresponding

level of achievement if another alternative form is used)—

(A) why the goal was not met;

(B) those plans and schedules for achieving the established performance goal; and

(C) if the performance goal is impractical or infeasible,

why that is the case and what action is recommended;

(4) describe the use and assess the effectiveness in achieving

performance goals of any waiver under section 9703 of this

title; and

(5) include the summary findings of those program evaluations completed during the fiscal year covered by the report.

(e) An agency head may include all program performance information required annually under this section in an annual financial

statement required under section 3515 if any such statement is

submitted to the Congress no later than March 31 of the applicable

fiscal year.

(f) The functions and activities of this section shall be considered

to be inherently Governmental functions. The drafting of program

performance reports under this section shall be performed only by

Federal employees.

SEC. 1117. EXEMPTION.

The Director of the Office of Management and Budget may exempt from the requirements of sections 1115 and 1116 of this title

and section 306 of title 5, any agency with annual outlays of

$20,000,000 or less.

SEC. 1118. PILOT PROJECTS FOR PERFORMANCE GOALS.

(a) The Director of the Office of Management and Budget, after

consultation with the head of each agency, shall designate not less

than ten agencies as pilot projects in performance measurement for

fiscal years 1994, 1995, and 1996. The selected agencies shall re-
69 Sec. 1119 CH. 11—BUDGET INFORMATION

flect a representative range of Government functions and capabilities in measuring and reporting program performance.

(b) Pilot projects in the designated agencies shall undertake the

preparation of performance plans under section 1115, and program

performance reports under section 1116, other than section 1116(c),

for one or more of the major functions and operations of the agency.

A strategic plan shall be used when preparing agency performance

plans during one or more years of the pilot period.

(c) No later than May 1, 1997, the Director of the Office of Management and Budget shall submit a report to the President and to

the Congress which shall—

(1) assess the benefits, costs, and usefulness of the plans and

reports prepared by the pilot agencies in meeting the purposes

of the Government Performance and Results Act of 1993;

(2) identify any significant difficulties experienced by the

pilot agencies in preparing plans and reports; and

(3) set forth any recommended changes in the requirements

of the provisions of Government Performance and Results Act

of 1993, section 306 of title 5, sections 1105, 1115, 1116, 1117,

1119 and 9703 of this title, and this section.

SEC. 1119. PILOT PROJECTS FOR PERFORMANCE BUDGETING.

(a) The Director of the Office of Management and Budget, after

consultation with the head of each agency shall designate not less

than five agencies as pilot projects in performance budgeting for

fiscal years 1998 and 1999. At least three of the agencies shall be

selected from those designated as pilot projects under section 1118,

and shall also reflect a representative range of Government functions and capabilities in measuring and reporting program performance.

(b) Pilot projects in the designated agencies shall cover the preparation of performance budgets. Such budgets shall present, for one

or more of the major functions and operations of the agency, the

varying levels of performance, including outcome-related performance, that would result from different budgeted amounts.

(c) The Director of the Office of Management and Budget shall

include, as an alternative budget presentation in the budget submitted under section 1105 for fiscal year 1999, the performance

budgets of the designated agencies for this fiscal year.

(d) No later than March 31, 2001, the Director of the Office of

Management and Budget shall transmit a report to the President

and to the Congress on the performance budgeting pilot projects

which shall—

(1) assess the feasibility and advisability of including a performance budget as part of the annual budget submitted under

section 1105;

(2) describe any difficulties encountered by the pilot agencies

in preparing a performance budget;

(3) recommend whether legislation requiring performance

budgets should be proposed and the general provisions of any

legislation; and

(4) set forth any recommended changes in the other requirements of the Government Performance and Results Act of
Sec. 1119 CH. 11—BUDGET INFORMATION 70

1993, section 306 of title 5, sections 1105, 1115, 1116, 1117,

and 9703 of this title, and this section.

(e) After receipt of the report required under subsection (d), the

Congress may specify that a performance budget be submitted as

part of the annual budget submitted under section 1105.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements and Guidelines

1104 ....................................... OMB: Bulletin 93–18, see appendix IV, Circular A–133

1105 ....................................... OMB: Circular A–11, see appendix IV, Circular A–127

1105(a) ................................... OMB: Circular A–129, see appendix IV

1105(a) ................................... OMB: Bulletin 93–18, see appendix IV

1108 ....................................... OMB: Circular A–129, see appendix IV

1111 ....................................... 5 C.F.R. 1320; 22 C.F.R. 518

OMB: Circulars A–25, A–73, A–94, A–110, A–122, A–133, see appendix IV, Bulletin 94–09

1112 ....................................... Circular A–127

1113 ....................................... Circular A–127

1115 ....................................... OMB: Circular A–11, see appendix IV

1116 ....................................... OMB: Circular A–11, see appendix IV

1117 ....................................... OMB: Circular A–11, see appendix IV

1118 ....................................... OMB: Circular A–11, see appendix IV

1119 ....................................... OMB: Circular A–11, see appendix IV
71

TITLE 31—MONEY AND FINANCE

Subtitle II—the Budget Process

* * * * * * *

CHAPTER 13—APPROPRIATIONS

SUBCHAPTER I—GENERAL

SEC. 1301. APPLICATION.

(a) Appropriations shall be applied only to the objects for which

the appropriations were made except as otherwise provided by law.

(b) The reappropriation and diversion of the unexpended balance

of an appropriation for a purpose other than that for which the appropriation originally was made shall be construed and accounted

for as a new appropriation. The unexpended balance shall be reduced by the amount to be diverted.

(c) An appropriation in a regular, annual appropriation law may

be construed to be permanent or available continuously only if the

appropriation—

(1) is for rivers and harbors, lighthouses, public buildings, or

the pay of the Navy and Marine Corps; or

(2) expressly provides that it is available after the fiscal year

covered by the law in which it appears.

(d) A law may be construed to make an appropriation out of the

Treasury or to authorize making a contract for the payment of

money in excess of an appropriation only if the law specifically

states that an appropriation is made or that such a contract may

be made.

SEC. 1302. DETERMINING AMOUNTS APPROPRIATED.

Except as specifically provided by law, the total amount appropriated in an appropriation law is determined by adding up the

specific amounts or rates appropriated in each paragraph of the

law.

SEC. 1303. EFFECT OF CHANGES IN TITLES OF APPROPRIATIONS.

Expenditures for a particular object or purpose authorized by a

law (and referred to in that law by the specific title previously used

for the appropriation item in the appropriation law concerned) may

be made from a corresponding appropriation item when the specific

title is changed or eliminated from a later appropriation law.

SEC. 1304. JUDGMENTS, AWARDS, AND COMPROMISE SETTLEMENTS.

(a) Necessary amounts are appropriated to pay final judgments,

awards, compromise settlements, and interest and costs specified in

the judgments or otherwise authorized by law when—

(1) payment is not otherwise provided for;

(2) payment is certified by the Comptroller General; and
Sec. 1305 CH. 13—APPROPRIATIONS 72

(3) the judgment, award, or settlement is payable—

(A) under section 2414, 2517, 2672, or 2677 of title 28;

(B) under section 3723 of this title;

(C) under a decision of a board of contract appeals; or

(D) in excess of an amount payable from the appropriations of an agency for a meritorious claim under section

2733 or 2734 of title 10, section 715 of title 32, or section

203 of the National Aeronautics and Space Act of 1958 (42

U.S.C. 2473).

(b)(1) Interest may be paid from the appropriation made by this

section—

(A) on a judgment of a district court, only when the judgment becomes final after review on appeal or petition by the

United States Government, and then only from the date of filing of the transcript of the judgment with the Comptroller

General through the day before the date of the mandate of affirmance; or

(B) on a judgment of the Court of Appeals for the Federal

Circuit or the United States Claims Court under section

2516(b) of title 28, only from the date of filing of the transcript

of the judgment with the Comptroller General through the day

before the date of the mandate of affirmance.

(2) Interest payable under this subsection in a proceeding reviewed by the Supreme Court is not allowed after the end of the

term in which the judgment is affirmed.

(c)(1) A judgment or compromise settlement against the Government shall be paid under this section and sections 2414, 2517, and

2518 of title 28 when the judgment or settlement arises out of an

express or implied contract made by—

(A) the Army and Air Force Exchange Service;

(B) the Navy Exchanges;

(C) the Marine Corps Exchanges;

(D) the Coast Guard Exchanges; or

(E) the Exchange Councils of the National Aeronautics and

Space Administration.

(2) The Exchange making the contract shall reimburse the Government for the amount paid by the Government.

SEC. 1305. MISCELLANEOUS PERMANENT APPROPRIATIONS.

Necessary amounts are appropriated for the following:

(1) to pay the proceeds of the personal estate of a United

States citizen dying abroad to the legal representative of the

deceased on proper demand and proof.

(2) to pay interest on the public debt under laws authorizing

payment.

(3) to pay proceeds from derelict and salvage cases adjudged

by the courts of the United States to salvors.

(4) to make payments required under contracts made under

section 108 of the Housing and Community Development Act

of 1974 (42 U.S.C. 5308) for the payment of interest on obligations guaranteed by the Secretary of Housing and Urban Development under section 108.

(5) to make payments required under contracts made under

section 103(b) of the Housing Act of 1949 (42 U.S.C. 1453(b))
73 Sec. 1310 CH. 13—APPROPRIATIONS

for projects or programs for which amounts had been committed before January 1, 1975, and for which amounts have not

been appropriated.

(6) to pay the interest on the fund derived from the bequest

of James Smithson, for the construction of buildings and expenses of the Smithsonian Institution, at the rates determined

under section 5590 of the Revised Statutes (20 U.S.C. 54).

(7) ANNUAL CONTRIBUTIONS FOR ASSISTED HOUSING.—To

make payments required under contracts made under section

5 of the United States Housing Act of 1937, as amended (42

U.S.C. 1437c).

(8) COLLEGE HOUSING GRANTS.—To make payments required

under contracts made under title IV of the Housing Act of

1950, as amended (12 U.S.C. 1749 et seq.).

(9) RENT SUPPLEMENT PROGRAM.—To make payments required under contracts under section 101 of the Housing and

Urban Development Act of 1965, as amended (12 U.S.C.

1701s).

(10) HOMEOWNERSHIP AND RENTAL HOUSING ASSISTANCE.—To

make payments required under contracts under sections 235

and 236, respectively, of the National Housing Act, as amended

(12 U.S.C. 1715z, 1715z–1).

SEC. 1306. USE OF FOREIGN CREDITS.

Foreign credits owed to or owned by the Treasury are not available for expenditure by agencies except as provided annually in

general appropriation laws.

SEC. 1307. PUBLIC BUILDING CONSTRUCTION.

Amounts appropriated to construct public buildings remain available until completion of the work. When a building is completed

and outstanding liabilities for the construction are paid, balances

remaining shall revert immediately to the Treasury.

SEC. 1308. TELEPHONE AND METERED SERVICES.

Charges for telephone and metered services (such as gas, electricity, water, and steam) for a time period beginning in one fiscal

year or allotment period and ending in another fiscal year or allotment period may be charged against the appropriation or allotment

current at the end of the time period covered by the service.

SEC. 1309. SOCIAL SECURITY TAX.

Amounts made available for the compensation of officers and employees of the United States Government may be used to pay taxes

imposed on an agency as an employer under chapter 21 of the Internal Revenue Code of 1954 (26 U.S.C. 3101 et seq.).

SEC. 1310. APPROPRIATIONS FOR PRIVATE ORGANIZATIONS.

(a) The Secretary of the Treasury shall credit an appropriation

for a private organization to the appropriate fiscal official of the organization. The credit shall be carried on the accounts of—

(1) the Treasury; or

(2) a designated depositary of the United States Government

(except a national bank).

(b) The fiscal official may pay an amount out of the appropriation

only on a check of the fiscal official—
Sec. 1321 CH. 13—APPROPRIATIONS 74

(1) payable to the order of the person to whom payment is

to be made; and

(2) that states the specific purpose for which the amount is

to be applied.

(c)(1) The fiscal official may pay an amount of less than $20 out

of the appropriation on a check—

(A) payable to the order of the fiscal official; and

(B) that states the amount is to be applied to small claims.

(2) The fiscal official shall provide the Secretary or the designated depositary on which the check is drawn with a certified list

of the claims. The list shall state the kind and amount of each

claim and the name of each claimant.

SUBCHAPTER II—TRUST FUNDS AND REFUNDS

SEC. 1321. TRUST FUNDS

(a) The following are classified as trust funds:

(1) Philippine special fund (customs duties).

(2) Philippine special fund (internal revenue).

(3) Unclaimed condemnation awards, Department of the

Treasury.

(4) Naval reservation, Olangapo civil fund.

(5) Armed Forces Retirement Home Trust Fund.

(6) Return to deported aliens of passage money collected

from steamship companies.

(7) Vocational rehabilitation, special fund.

(8) Library of Congress gift fund.

(9) Library of Congress trust fund, investment account.

(10) Library of Congress trust fund, income from investment

account.

(11) Library of Congress trust fund, permanent loan.

(12) Relief and rehabilitation, Longshoremen’s and Harbor

Workers’ Compensation Act.

(13) Cooperative work, Forest Service.

(14) Wages and effects of American seamen, Department of

Commerce.

(15) Pension money, Saint Elizabeths Hospital.

(16) Personal funds of patients, Saint Elizabeths Hospital.

(17) National Park Service, donations.

(18) Purchase of lands, national parks, donations.

(19) Extension of winter-feed facilities of game animals of

Yellowstone National Park, donations.

(20) Indian moneys, proceeds of labor, agencies, schools, and

so forth.

(21) Funds of Federal prisoners.

(22) Commissary funds, Federal prisons.

(23) Pay of the Navy, deposit funds.

(24) Pay of Marine Corps, deposit funds.

(25) Pay of the Army, deposit fund.

(26) Preservation birthplace of Abraham Lincoln.

(27) Funds contributed for flood control, Mississippi River,

its outlets and tributaries.

(28) Funds contributed for flood control, Sacramento River,

California.
75 Sec. 1321 CH. 13—APPROPRIATIONS

(29) Effects of deceased employees, Department of the Treasury.

(30) Money and effects of deceased patients, Public Health

Service.

(31) Effects of deceased employees, Department of Commerce.

(32) Topographic survey of the United States, contributions.

(33) National Institutes of Health, gift fund.

(34) National Institutes of Health, conditional gift fund.

(35) Patients’ deposits, United States Marine Hospital,

Carville, Louisiana.

(36) Estates of deceased personnel, Department of the Army.

(37) Effects of deceased employees, Department of the Interior.

(38) Fredericksburg and Spotsylvania County Battlefields

memorial fund.

(39) Petersburg National Military Park fund.

(40) Gorgas Memorial Laboratory quotas.

(41) Contributions to International Boundary Commission,

United States and Mexico.

(42) Salvage proceeds, American vessels.

(43) Wages due American seamen.

(44) Federal Industrial Institution for Women, contributions

for chapel.

(45) General post fund, National Homes, Department of Veterans Affairs.

(46) Repatriation of American seamen.

(47) Expenses, public survey work, general.

(48) Expenses, public survey work, Alaska.

(49) Funds contributed for improvement of roads, bridges,

and trails, Alaska.

(50) Protective works and measures, Lake of the Woods and

Rainy River, Minnesota.

(51) Washington redemption fund.

(52) Permit fund, District of Columbia.

(53) Unclaimed condemnation awards, National Capital Park

and Planning Commission, District of Columbia.

(54) Unclaimed condemnation awards, Rock Creek and Potomac Parkway Commission, District of Columbia.

(55) Miscellaneous trust fund deposits, District of Columbia.

(56) Surplus fund, District of Columbia.

(57) Relief and rehabilitation, District of Columbia Workmen’s Compensation Act.

(58) Inmates’ fund, workhouse and reformatory, District of

Columbia.

[(59) Repealed. Pub.L. 101–510, Div. A, Title XV, Sec.

1533(c)(1), Nov. 5, 1990, 104 Stat. 1735]

(60) Chamber Music Auditorium, Library of Congress.

(61) Bequest of Gertrude Hubbard.

(62) Puerto Rico special fund (Internal Revenue).

(63) Miscellaneous trust funds, Department of State.

(64) Funds contributed for improvement of (name of river or

harbor).
Sec. 1322 CH. 13—APPROPRIATIONS 76

(65) Funds advanced for improvement of (name of river or

harbor).

(66) Funds contributed for Indian projects.

(67) Miscellaneous trust funds of Indian tribes.

(68) Ship’s stores profits, Navy.

(69) Completing Surveys within Railroad Land Grants.

(70) Memorial to Women of World Wars, contributions.

(71) Funds contributed for Memorial to John Ericsson.

(72) American National Red Cross Building, contributions.

(73) Estate of decedents, Department of State, Trust Fund.

(74) Funds due Incompetent Beneficiaries, Department of

Veterans Affairs.

(75) To promote the Education of the Blind (principal).

(76) Paving Government Road across Fort Sill Military Reservation, Okla.

(77) Bequest of William F. Edgar, Museum and Library, office of Surgeon General of the Army.

(78) Funds Contributed for Flood Control (name of river, harbor, or project).

(79) Matured obligations of the District of Columbia.

(80) To promote the education of the blind (interest).

[(81) Repealed. Pub.L. 101–510, Div. A. Title XV, Sec.

1533(c)(1), Nov. 5, 1990, 104 Stat. 1735]

(82) Post-Vietnam Era Veterans Education Account, Department of Veterans Affairs.

(83) United States Government life insurance fund, Department of Veterans Affairs.

(84) Estates of deceased soldiers, United States Army.

(85) Teachers Retirement Fund Deductions, District of Columbia.

(86) Teachers Retirement Fund, Government Reserves, District of Columbia.

(87) Expenses of Smithsonian Institution Trust Fund (principal).

(88) Civil Service Retirement and Disability Fund.

(89) Canal Zone Retirement and Disability Fund.

(90) Foreign Service Retirement and Disability Fund.

(91) Violent Crime Reduction Trust Fund.

(b) Amounts (except amounts received by the Comptroller of the

Currency and the Federal Deposit Insurance Corporation) that are

analogous to the funds named in subsection (a) of this section and

are received by the United States Government as trustee shall be

deposited in an appropriate trust fund account in the Treasury.

Amounts accruing to these funds (except to the trust fund ‘‘Armed

Forces Retirement Home Trust Fund’’) are appropriated to be disbursed in compliance with the terms of the trust. Expenditures

from the trust fund ‘‘Armed Forces Retirement Home Trust Fund’’

shall be made only under annual appropriations and only if the appropriations are specifically authorized by law.

SEC. 1322. PAYMENTS OF UNCLAIMED TRUST FUND AMOUNTS AND REFUND OF AMOUNTS ERRONEOUSLY DEPOSITED.

(a) On September 30 of each year, the Secretary of the Treasury

shall transfer to the Treasury trust fund receipt account ‘‘Unclaimed Moneys of Individuals Whose Whereabouts are Unknown’’
77 Sec. 1323 CH. 13—APPROPRIATIONS

that part of the balance of a trust fund account named in section

1321(a)(1)–(82) of this title or an analogous trust fund established

under section 1321(b) of this title that has been in the fund for

more than one year and represents money belonging to individuals

whose whereabouts are unknown. Subsequent claims to the transferred funds shall be paid from the account ‘‘Unclaimed Moneys of

Individuals Whose Whereabouts are Unknown.’’

(b) Except as provided in subsection (c) of this section, necessary

amounts are appropriated to the Secretary of the Treasury to make

payments from—

(1) the Treasury trust fund receipt account ‘‘Unclaimed Moneys of Individuals Whose Whereabouts are Unknown’’; and

(2) the United States Government account ‘‘Refund of Moneys Erroneously Received and Covered’’ and other collections

erroneously deposited that are not properly chargeable to another appropriation.

(c)(1) The Secretary of the Treasury shall hold in the Treasury

trust fund receipt account ‘‘Unclaimed Moneys of Individuals

Whose Whereabouts Are Unknown’’ the balance remaining after

the final distribution of unclaimed Postal Savings System deposits

under subsection (a) of the first section of the Act of August 13,

1971 (Public Law 92–117; 85 Stat. 337). The Secretary shall use

the balance to pay claims for Postal Savings System deposits without regard to the State law or the law of other jurisdictions of deposit concerning the disposition of unclaimed or abandoned property.

(2) Necessary amounts may be appropriated without fiscal year

limitation to the trust fund receipt account to pay claims for deposits when the balance in the account is not sufficient to pay the

claims made within the time limitation set forth in paragraph (3)

of this subsection.

(3) No claim for any Postal Savings System deposit may be

brought more than one year from the date of the enactment of the

Postal Savings System Statute of Limitations Act.

(4) The United States Postal Service shall assist the Secretary of

the Treasury in providing public notice of the time limitation set

forth in paragraph (3) of this subsection by posting notices thereof

in all post offices as soon as practicable after the date of the enactment of the Postal Savings System Statute of Limitations Act.

SEC. 1323. TRUST FUNDS FOR CERTAIN FEES, DONATIONS, QUASI-PUBLIC AMOUNTS, AND UNEARNED AMOUNTS.

(a) Amounts from the following sources held in checking accounts

of disbursing officials shall be deposited in the Treasury to the appropriate trust fund receipt accounts:

(1) unearned money, lands (Department of the Interior).

(2) reentry permit fees (Department of Justice).

(3) naturalization fees (Department of Justice).

(4) registry fees (Department of Justice).

(b) Amounts deposited under subsection (a) of this section are appropriated for refunds. Earned parts of those amounts shall be

transferred and credited to the appropriate receipt fund accounts.

(c) Donations, quasi-public amounts, and unearned amounts shall

be deposited in the Treasury as trust funds and are appropriated
Sec. 1324 CH. 13—APPROPRIATIONS 78

for disbursement under the terms of the trusts when the donation

or amount is—

(1) administered by officers and employees of the United

States Government; and

(2) carried in checking accounts of disbursing officials or others required to account to the Comptroller General (except

clerks and marshals of the United States district courts).

SEC. 1324. REFUND OF INTERNAL REVENUE COLLECTIONS.

(a) Necessary amounts are appropriated to the Secretary of the

Treasury for refunding internal revenue collections as provided by

law, including payment of—

(1) claims for prior fiscal years; and

(2) accounts arising under—

(A) ‘‘Allowance or drawback (Internal Revenue)’’;

(B) ‘‘Redemption of stamps (Internal Revenue)’’;

(C) ‘‘Refunding legacy taxes, Act of March 30, 1928’’;

(D) ‘‘Repayment of taxes on distilled spirits destroyed by

casualty’’; and

(E) ‘‘Refunds and payments of processing and related

taxes’’.

(b) Disbursements may be made from the appropriation made by

this section only for—

(1) refunds to the limit of liability of an individual tax account; and

(2) refunds due from credit provisions of the Internal Revenue Code of 1954 (26 U.S.C. 1 et seq.) enacted before January

1, 1978.

SUBCHAPTER III—LIMITATIONS, EXCEPTIONS, AND PENALTIES

SEC. 1341. LIMITATIONS ON EXPENDING AND OBLIGATING AMOUNTS.

(a)(1) An officer or employee of the United States Government or

of the District of Columbia government may not—

(A) make or authorize an expenditure or obligation exceeding

an amount available in an appropriation or fund for the expenditure or obligation;

(B) involve either government in a contract or obligation for

the payment of money before an appropriation is made unless

authorized by law;

(C) make or authorize an expenditure or obligation of funds

required to be sequestered under section 252 of the Balanced

Budget and Emergency Deficit Control Act of 1985; or

(D) involve either government in a contract or obligation for

the payment of money required to be sequestered under section

252 of the Balanced Budget and Emergency Deficit Control Act

of 1985.

(2) This subsection does not apply to a corporation getting

amounts to make loans (except paid in capital amounts) without

legal liability of the United States Government.

(b) An article to be used by an executive department in the District of Columbia that could be bought out of an appropriation

made to a regular contingent fund of the department may not be

bought out of another amount available for obligation.
79 Sec. 1343 CH. 13—APPROPRIATIONS

SEC. 1342. LIMITATION ON VOLUNTARY SERVICES.

An officer or employee of the United States Government or of the

District of Columbia government may not accept voluntary services

for either government or employ personal services exceeding that

authorized by law except for emergencies involving the safety of

human life or the protection of property. This section does not

apply to a corporation getting amounts to make loans (except paid

in capital amounts) without legal liability of the United States Government. As used in this section, the term ‘‘emergencies involving

the safety of human life or the protection of property’’ does not include ongoing, regular functions of government the suspension of

which would not imminently threaten the safety of human life or

the protection of property.

1990 AMENDMENT.

Pub.L. 101–508, Sec. 13213(b), added sentence: ‘‘As used in this

section, the term ‘emergencies involving the safety of human life or

the protection of property’ does not include ongoing, regular functions of government the suspension of which would not imminently

threaten the safety of human life or the protection of property.’’

SEC. 1343. BUYING AND LEASING PASSENGER MOTOR VEHICLES AND

AIRCRAFT.

(a) In this section, buying a passenger motor vehicle or aircraft

includes a transfer of the vehicle or aircraft between agencies.

(b) An appropriation may be expended to buy or lease passenger

motor vehicles only—

(1) for the use of—

(A) the President;

(B) the secretaries to the President; or

(C) the heads of executive departments listed in section

101 of title 5; or

(2) as specifically provided by law.

(c)(1) Except as specifically provided by law, an agency may use

an appropriation to buy a passenger motor vehicle (except a bus or

ambulance) only at a total cost (except costs required only for

transportation) that—

(A) includes the price of systems and equipment the Administrator of General Services decides is incorporated customarily

in standard passenger motor vehicles completely equipped for

ordinary operation;

(B) includes the value of a vehicle used in exchange;

(C) is not more than the maximum price established by the

agency having authority under law to establish a maximum

price; and

(D) is not more than the amount specified in a law.

(2) Additional systems and equipment may be bought for a passenger motor vehicle if the Administrator decides the purchase is

appropriate. The price of additional systems or equipment is not included in deciding whether the cost of the vehicle is within a maximum price specified in a law.

(d) An appropriation (except an appropriation for the armed

forces) is available to buy, maintain, or operate an aircraft only if

the appropriation specifically authorizes the purchase, maintenance, or operation.
Sec. 1343 CH. 13—APPROPRIATIONS 80

(e) This section does not apply to—

(1) buying, maintaining, and repairing passenger motor vehicles by the United States Capitol Police;

(2) buying, maintaining, and repairing vehicles necessary to

carry out projects to improve, preserve, and protect rivers and

harbors; or

(3) leasing, maintaining, repairing, or operating motor passenger vehicles necessary in the field work of the Department

of Agriculture.

NOTE

Maximum Purchase Price of Motor Vehicles; Intelligence

Activities Exception

Pub.L. 103–139, Title VIII, Sec. 8105, Nov. 11, 1993, 107 Stat.

1464, provided that: ‘‘During the current fiscal year and thereafter,

monetary limitations on the purchase price of a passenger motor vehicle shall not apply to vehicles purchased for intelligence activities

conducted pursuant to Executive Order 12333 [set out as a note

under section 401 of Title 50, National Defense] or successor orders.’’

Maximum Purchase Price of Motor Vehicles; Exception

Pub.L. 104–52, Title VI, § 604, Nov. 19, 1995, 109 Stat. 497, provided that: ‘‘Unless otherwise specifically provided, the maximum

amount allowable during the current fiscal year in accordance with

section 16 of the Act of August 2, 1946 (60 Stat. 810) [this section],

for the purchase of any passenger motor vehicle (exclusive of buses,

ambulances, law enforcement, and undercover surveillance vehicles),

is hereby fixed at $8,100 except station wagons for which the maximum shall be $9,100: Provided, That these limits may be exceeded

by not to exceed $3,700 for police-type vehicles, and by not to exceed

$4,000 for special heavy-duty vehicles: Provided further, That the

limits set forth in this section may not be exceeded by more than five

percent for electric or hybrid vehicles purchased for demonstration

under the provisions of the Electric and Hybrid Vehicle Research,

Development, and Demonstration Act of 1976 [15 U.S.C.A. Sec.

2501 et seq.]: Provided further, That the limits set forth in this section may be exceeded by the incremental cost of clean alternative

fuels vehicles acquired pursuant to Public Law 101–549 [known as

the Clean Air Act Amendments of 1990; for distribution of this Act

to the Code, see Tables; for provisions relating to clean alternative

fuel vehicles, see section 229(a) of such Act, which is classified to 42

U.S.C.A. § 7581 et seq.] over the cost of comparable conventionally

fueled vehicles.’’

SEC. 1344. PASSENGER CARRIER USE.

(a)(1) Funds available to a Federal agency, by appropriation or

otherwise, may be expended by the Federal agency for the maintenance, operation, or repair of any passenger carrier only to the extent that such carrier is used to provide transportation for official

purposes. Notwithstanding any other provision of law, transporting

any individual other than the individuals listed in subsections (b)

and (c) of this section between such individual’s residence and such
81 Sec. 1344 CH. 13—APPROPRIATIONS

individual’s place of employment is not transportation for an official purpose.

(2) For purposes of paragraph (1), transportation between the

residence of an officer or employee and various locations that is—

(A) required for the performance of field work, in accordance

with regulations prescribed pursuant to subsection (e) of this

section, or

(B) essential for the safe and efficient performance of intelligence, counterintelligence, protective services, or criminal law

enforcement duties, is transportation for an official purpose,

when approved in writing by the head of the Federal agency.

(b) A passenger carrier may be used to transport between residence and place of employment the following officers and employees of Federal agencies:

(1)(A) the President and the Vice President;

(B) no more than 6 officers or employees in the Executive Office of the President, as designated by the President; and

(C) no more than 10 additional officers or employees of Federal agencies, as designated by the President;

(2) the Chief Justice and the Associate Justices of the Supreme Court;

(3)(A) officers compensated at Level I of the Executive Schedule pursuant to section 5312 of title 5; and

(B) a single principal deputy to an officer described in subclause (A) of this clause, when a determination is made by

such officer that such transportation is appropriate;

(4) principal diplomatic and consular officials abroad, and

the United States Ambassador to the United Nations;

(5) the Deputy Secretary of Defense and Under Secretaries

of Defense, the Secretary of the Air Force, the Secretary of the

Army, the Secretary of the Navy, the members and Vice Chairman of the Joint Chiefs of Staff, and the Commandant of the

Coast Guard;

(6) the Director of the Central Intelligence Agency and the

Director of the Federal Bureau of Investigation;

(7) the Chairman of the Board of Governors of the Federal

Reserve System;

(8) the Comptroller General of the United States and the

Postmaster General of the United States; and

(9) an officer or employee with regard to whom the head of

a Federal agency makes a determination, in accordance with

subsection (d) of this section and with regulations prescribed

pursuant to paragraph (1) of subsection (e), that highly unusual circumstances present a clear and present danger, that

an emergency exists, or that other compelling operational considerations make such transportation essential to the conduct

of official business.

Except as provided in paragraph (2) of subsection (d), any authorization made pursuant to clause (9) of this subsection to permit the

use of a passenger carrier to transport an officer or employee between residence and place of employment shall be effective for not

more than 15 calendar days.

(c) A passenger carrier may be used to transport between residence and place of employment any person for whom protection is
Sec. 1344 CH. 13—APPROPRIATIONS 82

specifically authorized pursuant to section 3056(a) of title 18 or for

whom transportation is authorized pursuant to section 28 of the

State Department Basic Authorities Act of 1956, section 2637 of

title 10, or section 8(a)(1) of the Central Intelligence Agency Act of

1949.

(d)(1) Any determination made under subsection (b)(9) of this

section shall be in writing and shall include the name and title of

the officer or employee affected, the reason for such determination,

and the duration of the authorization for such officer or employee

to use a passenger carrier for transportation between residence and

place of employment.

(2) If a clear and present danger, an emergency, or a compelling operational consideration described in subsection (b)(9) of this

section extends or may extend for a period in excess of 15 calendar

days, the head of the Federal agency shall determine whether an

authorization under such paragraph shall be extended in excess of

15 calendar days for a period of not more than 90 additional calendar days. Determinations made under this paragraph may be reviewed by the head of such agency at the end of each such period,

and, where appropriate, a subsequent determination may be made

whether such danger, emergency, or consideration continues to

exist and whether an additional extension, not to exceed 90 calendar days, may be authorized. Determinations made under this

paragraph shall be in accordance with regulations prescribed pursuant to paragraph (1) of subsection (e).

(3) The authority to make designations under subsection (b)(1)

of this section and to make determinations pursuant to subsections

(a)(2) and (b)(3)(B) and (9) of this section and pursuant to paragraph (2) of this subsection may not be delegated, except that, with

respect to the Executive Office of the President, the President may

delegate the authority of the President under subsection (b)(9) of

this section to an officer in the Executive Office of the President.

No designation or determination under this section may be made

solely or principally for the comfort or convenience of the officer or

employee.

(4) Notification of each designation or determination made under

subsection (b)(1), (3)(B), and (9) of this section and under paragraph (2) of this subsection, including the name and title of the officer or employee affected, the reason for any determination under

subsection (b)(9), and the expected duration of any authorization

under subsection (b)(9), shall be transmitted promptly to the Committee on Government Operations of the House of Representatives

and the Committee on Governmental Affairs of the Senate.

(e)(1) Not later than March 15, 1987, the Administrator of General Services, after consultation with the Comptroller General, the

Director of the Office of Management and Budget, and the Director

of the Administrative Office of the United States Courts, shall promulgate regulations governing the heads of all Federal agencies in

making the determinations authorized by subsections (a)(2)(A),

(b)(9), and (d)(2) of this section. Such regulations shall specify that

the comfort and convenience of an officer or employee is not sufficient justification for authorizations of transportation under this

section.
83 Sec. 1345 CH. 13—APPROPRIATIONS

(2) In promulgating regulations under paragraph (1) of this subsection, the Administrator of General Services shall provide criteria

defining the term ‘‘field work’’ for purposes of subsection (a)(2)(A)

of this section. Such criteria shall ensure that transportation between an employee’s residence and the location of the field work

will be authorized only to the extent that such transportation will

substantially increase the efficiency and economy of the Government.

(f) Each Federal agency shall maintain logs or other records necessary to establish the official purpose for Government transportation provided between an individual’s residence and such individual’s place of employment pursuant to this section.

(g) As used in this section—

(1) the term ‘‘passenger carrier’’ means a passenger motor

vehicle, aircraft, boat, ship, or other similar means of transportation that is owned or leased by the United States Government; and

(2) the term ‘‘Federal agency’’ means—

(A) a department (as such term is defined in section 18

of the Act of August 2, 1946 (41 U.S.C. 5a));

(B) an Executive department (as such term is defined in

section 101 of title 5);

(C) a military department (as such term is defined in

section 102 of title 5);

(D) a Government corporation (as such term is defined

in section 103(1) of title 5);

(E) a Government controlled corporation (as such term is

defined in section 103(2) of title 5);

(F) a mixed-ownership Government corporation (as such

term is defined in section 9101(2) of this title);

(G) any establishment in the executive branch of the

Government (including the Executive Office of the President);

(H) any independent regulatory agency (including an

independent regulatory agency specified in section

3502(10) of title 44);

(I) the Smithsonian Institution; and

(J) any nonappropriated fund instrumentality of the

United States,

except that such term does not include the government of the

District of Columbia.

(h) Notwithstanding section 410(a) of title 39, this section applies

to the United States Postal Service.

SEC. 1345. EXPENSES OF MEETINGS.

Except as specifically provided by law, an appropriation may not

be used for travel, transportation, and subsistence expenses for a

meeting. This section does not prohibit—

(1) an agency from paying the expenses of an officer or employee of the United States Government carrying out an official

duty; and

(2) the Secretary of Agriculture from paying necessary expenses for a meeting called by the Secretary for 4-H Boys and
Sec. 1346 CH. 13—APPROPRIATIONS 84

Girls Clubs as part of the cooperative extension work of the

Department of Agriculture.

SEC. 1346. COMMISSIONS, COUNCILS, BOARDS, AND INTERAGENCY

AND SIMILAR GROUPS.

(a) Except as provided in this section—

(1) public money and appropriations are not available to

pay—

(A) the pay or expenses of a commission, council, board,

or similar group, or a member of that group;

(B) expenses related to the work or the results of work

or action of that group; or

(C) for the detail or cost of personal services of an officer

or employee from an executive agency in connection with

that group; and

(2) an accounting or disbursing official, absent a special appropriation to pay the account or charge, may not allow or pay

an account or charge related to that group.

(b) Appropriations of an executive agency are available for the

expenses of an interagency group conducting activities of interest

common to executive agencies when the group includes a representative of the agency. The representatives receive no additional pay

because of membership in the group. An officer or employee of an

executive agency not a representative of the group may not receive

additional pay for providing services for the group.

(c) Subject to section 1347 of this title, this section does not apply

to—

(1) commissions, councils, boards, or similar groups authorized by law;

(2) courts-martial or courts of inquiry of the armed forces; or

(3) the contingent fund related to foreign relations at the disposal of the President.

SEC. 1347. APPROPRIATIONS OR AUTHORIZATIONS REQUIRED FOR

AGENCIES IN EXISTENCE FOR MORE THAN ONE YEAR.

(a) An agency in existence for more than one year may not use

amounts otherwise available for obligation to pay its expenses

without a specific appropriation or specific authorization by law. If

the principal duties and powers of the agency are substantially the

same as or similar to the duties and powers of an agency established by executive order, the agency established later is deemed

to have been in existence from the date the agency established by

the order came into existence.

(b) Except as specifically authorized by law, another agency may

not use amounts available for obligation to pay expenses to carry

out duties and powers substantially the same as or similar to the

principal duties and powers of an agency that is prohibited from

using amounts under this section.

SEC. 1348. TELEPHONE INSTALLATION AND CHARGES.

(a)(1) Except as provided in this section, appropriations are not

available to install telephones in private residences or for tolls or

other charges for telephone service from private residences.

(2) Under regulations of the Secretary of State, appropriations

may be used to install and pay for the use of telephones in residences owned or leased by the United States Government in for-
85 SEC. 1352 CH. 13—APPROPRIATIONS

eign countries for the use of the Foreign Service. Subsection (b) of

this section applies to long-distance calls made on those telephones.

(b) Appropriations of an agency are available to pay charges for

a long-distance call if required for official business and the voucher

to pay for the call is sworn to by the head of the agency. Appropriations of an executive agency are available only if the head of the

agency also certifies that the call is necessary in the interest of the

Government.

(c) Under regulations prescribed by the Secretary of the Army on recommendation of the Chief of Engineers, not more than $30,000

may be expended each fiscal year to install and use in private residences telephones required for official business in constructing and

operating locks and dams for navigation, flood control, and related

water uses.

(d) Under regulations prescribed by the Secretary of Defense,

funds appropriated to the Department of Defense are available to

install, repair, and maintain telephone wiring in residences owned

or leased by the United States Government and, if necessary for

national defense purposes, in other private residences.

SEC. 1349. ADVERSE PERSONNEL ACTIONS

(a) An officer or employee of the United States Government or of

the District of Columbia government violating section 1341(a) or

1342 of this title shall be subject to appropriate administrative discipline including, when circumstances warrant, suspension from

duty without pay or removal from office.

(b) An officer or employee who willfully uses or authorizes the

use of a passenger motor vehicle or aircraft owned or leased by the

United States Government (except for an official purpose authorized by section 1344 of this title) or otherwise violates section 1344

shall be suspended without pay by the head of the agency. The officer or employee shall be suspended for at least one month, and

when circumstances warrant, for a longer period or summarily removed from office.

SEC. 1350. CRIMINAL PENALTY.

An officer or employee of the United States Government or of the

District of Columbia government knowingly and willfully violating

section 1341(a) or 1342 of this title shall be fined not more than

$5,000, imprisoned for not more than 2 years, or both.

SEC. 1351. REPORTS ON VIOLATIONS.

If an officer or employee of an executive agency or an officer or

employee of the District of Columbia government violates section

1341(a) or 1342 of this title, the head of the agency or the Mayor

of the District of Columbia, as the case may be, shall report immediately to the President and Congress all relevant facts and a statement of actions taken.

SEC. 1352. LIMITATION ON USE OF APPROPRIATED FUNDS TO INFLUENCE CERTAIN FEDERAL CONTRACTING AND FINANCIAL

TRANSACTIONS.

(a)(1) None of the funds appropriated by any Act may be expended by the recipient of a Federal contract, grant, loan, or cooperative agreement to pay any person for influencing or attempting

to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Mem-
SEC. 1352 CH. 13—APPROPRIATIONS 86

ber of Congress in connection with any Federal action described in

paragraph (2) of this subsection.

(2) The prohibition in paragraph (1) of this subsection applies

with respect to the following Federal actions:

(A) The awarding of any Federal contract.

(B) The making of any Federal grant.

(C) The making of any Federal loan.

(D) The entering into of any cooperative agreement.

(E) The extension, continuation, renewal, amendment, or

modification of any Federal contract, grant, loan, or cooperative agreement.

(b)(1) Each person who requests or receives a Federal contract,

grant, loan, or cooperative agreement from an agency or requests

or receives from an agency a commitment providing for the United

States to insure or guarantee a loan shall file with that agency, in

accordance with paragraph (4) of this subsection—

(A) a written declaration described in paragraph (2) or (3) of

this subsection, as the case may be; and

(B) copies of all declarations received by such person under

paragraph (5).

(2) A declaration filed by a person pursuant to paragraph (1)(A)

of this subsection in connection with a Federal contract, grant,

loan, or cooperative agreement shall contain—

(A) a statement setting forth whether such person—

(i) has made any payment with respect to that Federal

contract, grant, loan, or cooperative agreement, using

funds other than appropriated funds, which would be prohibited by subsection (a) of this section if the payment

were paid for with appropriated funds; or

(ii) has agreed to make any such payment;

(B) with respect to each such payment (if any) and each such

agreement (if any)—

(i) the name and address of each person paid, to be paid,

or reasonably expected to be paid;

(ii) the name and address of each individual performing

the services for which such payment is made, to be made,

or reasonably expected to be made;

(iii) the amount paid, to be paid, or reasonably expected

to be paid;

(iv) how the person was paid, is to be paid, or is reasonably expected to be paid; and

(v) the activity for which the person was paid, is to be

paid, or is reasonably expected to be paid; and

(C) a certification that the person making the declaration

has not made, and will not make, any payment prohibited by

subsection (a).

(3) A declaration filed by a person pursuant to paragraph (1)(A)

of this subsection in connection with a commitment providing for

the United States to insure or guarantee a loan shall contain—

(A) a statement setting forth whether such person—

(i) has made any payment to influence or attempt to influence an officer or employee of any agency, a Member of

Congress, an officer or employee of Congress, or an em-
87 SEC. 1352 CH. 13—APPROPRIATIONS

ployee of a Member of Congress in connection with that

loan insurance or guaranty; or

(ii) has agreed to make any such payment; and

(B) with respect to each such payment (if any) and each such

agreement (if any), the information described in paragraph

(2)(B) of this subsection.

(4) A person referred to in paragraph (1)(A) of this subsection

shall file a declaration referred to in that paragraph—

(A) with each submission by such person that initiates agency consideration of such person for award of a Federal contract,

grant, loan, or cooperative agreement, or for grant of a commitment providing for the United States to insure or guarantee a

loan;

(B) upon receipt by such person of a Federal contract, grant,

loan, or cooperative agreement or of a commitment providing

for the United States to insure or guarantee a loan, unless

such person previously filed a declaration with respect to such

contract, grant, loan, cooperative agreement or commitment

pursuant to clause (A); and

(C) at the end of each calendar quarter in which there occurs

any event that materially affects the accuracy of the information contained in any declaration previously filed by such person in connection with such Federal contract, grant, loan, cooperative agreement, loan insurance commitment, or loan guaranty commitment.

(5) Any person who requests or receives from a person referred

to in paragraph (1) of this subsection a subcontract under a Federal

contract, a subgrant or contract under a Federal grant, a contract

or subcontract to carry out any purpose for which a particular Federal loan is made, or a contract under a Federal cooperative agreement shall be required to file with the person referred to in such

paragraph a written declaration referred to in clause (A) of such

paragraph.

(6)(A) The head of each agency shall collect and compile the information contained, pursuant to paragraphs (2)(B) and (3)(B) of

this subsection, in the statements filed under this subsection and,

on May 31 and November 30 of each year, submit to the Secretary

of the Senate and the Clerk of the House of Representatives a report containing a compilation of the information contained, pursuant to such paragraphs, in the statements received during the sixmonth period ending on March 31 or September 30, respectively,

of that year. The report, including the compilation, shall be available for public inspection 30 days after receipt of the report by the

Secretary and the Clerk.

(B) Notwithstanding subparagraph (A)—

(i) information referred to in subparagraph (A) that involves

intelligence matters shall be reported only to the Select Committee on Intelligence of the Senate, the Permanent Select

Committee on Intelligence of the House of Representatives,

and the Committees on Appropriations of the Senate and the

House of Representatives in accordance with procedures agreed

to by such committees;

(ii) information referred to in subparagraph (A) that is specifically authorized under criteria established by an Executive
SEC. 1352 CH. 13—APPROPRIATIONS 88

order to be kept secret in the interest of national defense or

foreign policy, is classified in accordance with such order, and

is available only by special access shall be reported only to the

Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives or

the Committees on Armed Services of the Senate and the

House of Representatives (whichever such committees have jurisdiction of matters involving such information) and to the

Committees on Appropriations of the Senate and the House of

Representatives in accordance with procedures agreed to by

such committees; and

(iii) information reported in accordance with this subparagraph shall not be available for public inspection.

(7) The Director of the Office of Management and Budget, after

consulting with the Secretary of the Senate and the Clerk of the

House of Representatives, shall issue guidance for agency implementation of, and compliance with, the requirements of this section.

(c)(1) Any person who makes an expenditure prohibited by subsection (a) of this section shall be subject to a civil penalty of not

less than $10,000 and not more than $100,000 for each such expenditure.

(2)(A) Any person who fails to file or amend a declaration required to be filed or amended under subsection (b) of this section

shall be subject to a civil penalty of not less than $10,000 and not

more than $100,000 for each such failure.

(B) A filing of a declaration of a declaration amendment on or

after the date on which an administrative action for the imposition

of a civil penalty under this subsection is commenced does not prevent the imposition of such civil penalty for a failure occurring before that date. For the purposes of this subparagraph, an administrative action is commenced with respect to a failure when an investigating official determines in writing to commence an investigation of an allegation of such failure.

(3) Sections 3803 (except for subsection (c)), 3804, 3805, 3806,

3807, 3808, and 3812 of this title shall be applied, consistent with

the requirements of this section, to the imposition and collection of

civil penalties under this subsection.

(4) An imposition of a civil penalty under this subsection does not

prevent the United States from seeking any other remedy that the

United States may have for the same conduct that is the basis for

the imposition of such civil penalty.

(d)(1) The official of each agency referred to in paragraph (3) of

this subsection shall submit to Congress each year an evaluation

of the compliance of that agency with, and the effectiveness of, the

requirements imposed by this section on the agency, persons requesting or receiving Federal contracts, grants, loans, or cooperative agreements from that agency, and persons requesting or receiving from that agency commitments providing for the United

States to insure or guarantee loans. The report shall be submitted

at the same time the agency submits its annual budget justifications to Congress.

(2) The report of an agency under paragraph (1) of this subsection shall include the following:
89 SEC. 1352 CH. 13—APPROPRIATIONS

(A) All alleged violations of the requirements of subsections

(a) and (b) of this section, relating to the agency’s Federal actions referred to in such subsections, during the year covered

by the report.

(B) The actions taken by the head of the agency in such year

with respect to those alleged violations and any alleged violations of subsections (a) and (b) of this section that occurred before such year, including the amounts of civil penalties imposed by the head of such agency in such year, if any.

(3) The Inspector General of an agency shall prepare and submit

the annual report of the agency required by paragraph (1) of this

subsection. In the case of an agency that does not have an inspector general, the agency official comparable to an inspector general

shall prepare and submit the annual report, or, if there is no such

comparable official, the head of the agency shall prepare and submit such annual report.

(e)(1)(A) Subsection (a)(1) of this section does not apply in the

case of a payment of reasonable compensation made to an officer

or employee of a person requesting or receiving a Federal contract,

grant, loan, or cooperative agreement to the extent that the payment is for agency and legislative liaison activities not directly related to a Federal action referred to in subsection (a)(2) of this section.

(B) Subsection (a)(1) of this section does not prohibit any reasonable payment to a person in connection with, or any payment of

reasonable compensation to an officer or employee of a person requesting or receiving, a Federal contract, grant, loan, or cooperative agreement or an extension, continuation, renewal, amendment,

or modification of a Federal contract, grant, loan, or cooperative

agreement if the payment is for professional or technical services

rendered directly in the preparation, submission, or negotiation of

any bid, proposal, or application for that Federal contract, grant,

loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement.

(C) Nothing in this paragraph shall be construed as permitting

the use of appropriated funds for making any payment prohibited

in or pursuant to any other provision of law.

(2) The reporting requirement in subsection (b) of this section

shall not apply to any person with respect to—

(A) payments of reasonable compensation made to regularly

employed officers or employees of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment providing for the United States to insure or guarantee a loan;

(B) a request for or receipt of a contract (other than a contract referred to in clause (C)), grant, cooperative agreement,

subcontract (other than a subcontract referred to in clause (C)),

or subgrant that does not exceed $100,000; and

(C) a request for or receipt of a loan, or a commitment providing for the United States to insure or guarantee a loan, that

does not exceed $150,000, or the single family maximum mortgage limit for affected programs, whichever is greater, includ-
SEC. 1352 CH. 13—APPROPRIATIONS 90

ing a contract or subcontract to carry out any purpose for

which such a loan is made.

(f) The Secretary of Defense may exempt a Federal action described in subsection (a)(2) from the prohibition in subsection (a)(1)

whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a

copy of each such written exemption to Congress immediately after

making such determination.

(g) The head of each Federal agency shall take such actions as

are necessary to ensure that the provisions of this section are vigorously implemented and enforced in such agency.

(h) As used in this section:

(1) The term ‘‘recipient’’, with respect to funds received in

connection with a Federal contract, grant, loan, or cooperative

agreement—

(A) includes the contractors, subcontractors, or subgrantees (as the case may be) of the recipient; but

(B) does not include an Indian tribe, tribal organization,

or any other Indian organization eligible to receive Federal

contracts, grants, cooperative agreements, or loans from an

agency but only with respect to expenditures that are by

such tribe or organization for purposes specified in subsection (a) and are permitted by other Federal law.

(2) The term ‘‘agency’’ has the same meaning provided for

such term in section 552(f) of title 5, and includes a Government corporation, as defined in section 9101(1) of this title.

(3) The term ‘‘person’’—

(A) includes an individual, corporation, company, association, authority, firm, partnership, society, State, and

local government, regardless of whether such entity is operated for profit or not for profit; but

(B) does not include an Indian tribe, tribal organization,

or any other Indian organization eligible to receive Federal

contracts, grants, cooperative agreements, or loans from an

agency but only with respect to expenditures by such tribe

or organization that are made for purposes specified in

subsection (a) and are permitted by other Federal law.

(4) The term ‘‘State’’ means a State of the United States, the

District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and a multi-State, regional, or interstate

entity having governmental duties and powers.

(5) The term ‘‘local government’’ means a unit of government

in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty,

the following entities:

(A) A local public authority.

(B) A special district.

(C) An intrastate district.

(D) A council of governments.

(E) A sponsor group representative organization.

(F) Any other instrumentality of a local government.

(6)(A) The terms ‘‘Federal contract’’, ‘‘Federal grant’’, ‘‘Federal cooperative agreement’’ mean, respectively—
91 Sec. 1353 CH. 13—APPROPRIATIONS

(i) a contract awarded by an agency;

(ii) a grant made by an agency or a direct appropriation

made by law to any person; and

(iii) a cooperative agreement entered into by an agency.

(B) Such terms do not include—

(i) direct United States cash assistance to an individual;

(ii) a loan;

(iii) loan insurance; or

(iv) a loan guaranty.

(7) The term ‘‘Federal loan’’ means a loan made by an agency. Such term does not include loan insurance or a loan guaranty.

(8) The term ‘‘reasonable payment’’ means, with respect to

professional and other technical services, a payment in an

amount that is consistent with the amount normally paid for

such services in the private sector.

(9) The term ‘‘reasonable compensation’’ means, with respect

to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for

such officer or employee for work that is not furnished to, not

funded by, or not furnished in cooperation with the Federal

Government.

(10) The term ‘‘regularly employed’’ with respect to an officer

or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment

providing for the United States to insure or guarantee a loan,

means an officer or employee who is employed by such person

for at least 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract, grant, loan,

cooperative agreement, loan insurance commitment, or loan

guaranty commitment.

(11) The terms ‘‘Indian tribe’’ and ‘‘tribal organization’’ have

the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

SEC. 1353. ACCEPTANCE OF TRAVEL AND RELATED EXPENSES FROM

NON-FEDERAL SOURCES.

(a) Notwithstanding any other provision of law, the Administrator of General Services, in consultation with the Director of the

Office of Government Ethics, shall prescribe by regulation the conditions under which an agency in the executive branch (including

an independent agency) may accept payment, or authorize an employee of such agency to accept payment on the agency’s behalf,

from non-Federal sources for travel, subsistence, and related expenses with respect to attendance of the employee (or the spouse

of such employee) at any meeting or similar function relating to the

official duties of the employee. Any cash payment so accepted shall

be credited to the appropriation applicable to such expenses. In the

case of a payment in kind so accepted, a pro rata reduction shall

be made in any entitlement of the employee to payment from the

Government for such expenses.

(b) Except as provided in this section or section 4111 or 7342 of

title 5, an agency or employee may not accept payment for ex-
Sec. 1353 CH. 13—APPROPRIATIONS 92

penses referred to in subsection (a). An employee who accepts any

payment in violation of the preceding sentence—

(1) may be required, in addition to any penalty provided by

law, to repay, for deposit in the general fund of the Treasury,

an amount equal to the amount of the payment so accepted;

and

(2) in the case of a repayment under paragraph (1), shall not

be entitled to any payment from the Government for such expenses.

(c) As used in this section—

(1) the term ‘‘executive branch’’ means all executive agencies

(as such term is defined in section 105 of title 5); and

(2) the term ‘‘employee in the executive branch’’ means—

(A) an appointed officer or employee in the executive

branch; and

(B) an expert or consultant in the executive branch,

under section 3109 of title 5; and

(3) the term ‘‘payment’’ means a payment or reimbursement,

in cash or in kind.

(d)(1) The head of each agency of the executive branch shall, in

the manner provided in paragraph (2), submit to the Director of the

Office of Government Ethics reports of payments of more than $250

accepted under this section with respect to employees of the agency. The Director shall make such reports available for public inspection and copying.

(2) The reports required by paragraph (1) shall, with respect to

each payment—

(A) specify the amount and method of payment, the name of

the person making the payment, the name of the employee, the

nature of the meeting or similar function, the time and place

of travel, the nature of the expenses, and such other information as the Administrator of General Services may prescribe by

regulation under subsection (a);

(B) be submitted not later than May 31 of each year with respect to payments in the preceding period beginning on October 1 and ending on March 31; and

(C) be submitted not later than November 30 of each year

with respect to payments in the preceding period beginning on

April 1 and ending on September 30.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

1344 ............................................ 41 C.F.R. 101–6

1352 ............................................ 7 C.F.R. 3018; 10 C.F.R. 601; 12 C.F.R. 411; 13 C.F.R. 146; 14 C.F.R. 1271; 15 C.F.R.

28; 18 C.F.R. 1315; 22 C.F.R. 138, 227, 311, 519, 712; 24 C.F.R. 87; 28 C.F.R. 69;

29 C.F.R. 93; 31 C.F.R. 21; 32 C.F.R. 28; 34 C.F.R. 82; 38 C.F.R. 45; 40 C.F.R. 34; 41

C.F.R.105–69; 43 C.F.R. 18; 45 C.F.R. 93, 604, 1158, 1168, 1230; 49 C.F.R. 20

1353 ............................................ 41 C.F.R. 301–1

1321 ............................................ OMB: Circular A–34, see appendix IV

1322 ............................................ OMB: Circular A–34, see appendix IV

1323 ............................................ OMB: Circular A–34, see appendix IV

1324 ............................................ OMB: Circular A–34, see appendix IV
93

TITLE 31—MONEY AND FINANCE

Subtitle II—the Budget Process

* * * * * * *

CHAPTER 15—APPROPRIATION ACCOUNTING

SUBCHAPTER I—GENERAL

SEC. 1501. DOCUMENTARY EVIDENCE REQUIREMENT FOR GOVERNMENT OBLIGATIONS.

(a) An amount shall be recorded as an obligation of the United

States Government only when supported by documentary evidence

of—

(1) a binding agreement between an agency and another person (including an agency) that is—

(A) in writing, in a way and form, and for a purpose authorized by law; and

(B) executed before the end of the period of availability

for obligation of the appropriation or fund used for specific

goods to be delivered, real property to be bought or leased,

or work or service to be provided;

(2) a loan agreement showing the amount and terms of repayment;

(3) an order required by law to be placed with an agency;

(4) an order issued under a law authorizing purchases without advertising—

(A) when necessary because of a public exigency;

(B) for perishable subsistence supplies; or

(C) within specific monetary limits;

(5) a grant or subsidy payable—

(A) from appropriations made for payment of, or contributions to, amounts required to be paid in specific

amounts fixed by law or under formulas prescribed by law;

(B) under an agreement authorized by law; or

(C) under plans approved consistent with and authorized

by law;

(6) a liability that may result from pending litigation;

(7) employment or services of persons or expenses of travel

under law;

(8) services provided by public utilities; or

(9) other legal liability of the Government against an available appropriation or fund.

(b) A statement of obligations provided to Congress or a committee of Congress by an agency shall include only those amounts that

are obligations consistent with subsection (a) of this section.
Sec. 1502 CH. 15—APPROPRIATION ACCOUNTING 94

SEC. 1502. BALANCES AVAILABLE.

(a) The balance of an appropriation or fund limited for obligation

to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title. However, the appropriation or fund is not available for expenditure for a period beyond

the period otherwise authorized by law.

(b) A provision of law requiring that the balance of an appropriation or fund be returned to the general fund of the Treasury at the

end of a definite period does not affect the status of lawsuits or

rights of action involving the right to an amount payable from the

balance.

SEC. 1503. COMPTROLLER GENERAL REPORTS OF AMOUNTS FOR

WHICH NO ACCOUNTING IS MADE.

The Comptroller General shall make a special report each year

to Congress on recommendations for changes in laws, that the

Comptroller General believes may be in the public interest, about

amounts—

(1) for which no accounting is made to the Comptroller General; and

(2) that are in—

(A) accounts of the United States Government; or

(B) the custody of an officer or employee of the Government if the Government is financially concerned.

SUBCHAPTER II—APPORTIONMENT

SEC. 1511. DEFINITION AND APPLICATION.

(a) In this subchapter, ‘‘appropriations’’ means—

(1) appropriated amounts;

(2) funds; and

(3) authority to make obligations by contract before appropriations.

(b) This subchapter does not apply to—

(1) amounts (except amounts for administrative expenses)

available—

(A) for price support and surplus removal of agricultural

commodities; and

(B) under section 32 of the Act of August 24, 1935 (7

U.S.C. 612c);

(2) a corporation getting amounts to make loans (except paid

in capital amounts) without legal liability on the part of the

United States Government; and

(3) the Senate, the House of Representatives, a committee of

Congress, a member, officer, employee, or office of either House

of Congress, or the Office of the Architect of the Capitol or an

officer or employee of that Office.

SEC. 1512. APPORTIONMENT AND RESERVES.

(a) Except as provided in this subchapter, an appropriation available for obligation for a definite period shall be apportioned to prevent obligation or expenditure at a rate that would indicate a necessity for a deficiency or supplemental appropriation for the period. An appropriation for an indefinite period and authority to
95 Sec. 1513 CH. 15—APPROPRIATION ACCOUNTING

make obligations by contract before appropriations shall be apportioned to achieve the most effective and economical use. An apportionment may be reapportioned under this section.

(b)(1) An appropriation subject to apportionment is apportioned

by—

(A) months, calendar quarters, operating seasons, or other

time periods;

(B) activities, functions, projects, or objects; or

(C) a combination of the ways referred to in clauses (A) and

(B) of this paragraph.

(2) The official designated in section 1513 of this title to make

apportionments shall apportion an appropriation under paragraph

(1) of this subsection as the official considers appropriate. Except

as specified by the official, an amount apportioned is available for

obligation under the terms of the appropriation on a cumulative

basis unless reapportioned.

(c)(1) In apportioning or reapportioning an appropriation, a reserve may be established only—

(A) to provide for contingencies;

(B) to achieve savings made possible by or through changes

in requirements or greater efficiency of operations; or

(C) as specifically provided by law.

(2) A reserve established under this subsection may be changed

as necessary to carry out the scope and objectives of the appropriation concerned. When an official designated in section 1513 of this

title to make apportionments decides that an amount reserved will

not be required to carry out the objectives and scope of the appropriation concerned, the official shall recommend the rescission of

the amount in the way provided in chapter 11 of this title for appropriation requests. Reserves established under this section shall

be reported to Congress as provided in the Impoundment Control

Act of 1974 (2 U.S.C. 681 et seq.).

(d) An apportionment or a reapportionment shall be reviewed at

least 4 times a year by the official designated in section 1513 of

this title to make apportionments.

SEC. 1513. OFFICIALS CONTROLLING APPORTIONMENTS.

(a) The official having administrative control of an appropriation

available to the legislative branch, the judicial branch, the United

States International Trade Commission, or the District of Columbia

government that is required to be apportioned under section 1512

of this title shall apportion the appropriation in writing. An appropriation shall be apportioned not later than the later of the following:

(1) 30 days before the beginning of the fiscal year for which

the appropriation is available; or

(2) 30 days after the date of enactment of the law by which

the appropriation is made available.

(b)(1) The President shall apportion in writing an appropriation

available to an executive agency (except the Commission) that is

required to be apportioned under section 1512 of this title. The

head of each executive agency to which the appropriation is available shall submit to the President information required for the apportionment in the form and the way and at the time specified by
Sec. 1514 CH. 15—APPROPRIATION ACCOUNTING 96

the President. The information shall be submitted not later than

the later of the following:

(A) 40 days before the beginning of the fiscal year for which

the appropriation is available; or

(B) 15 days after the date of enactment of the law by which

the appropriation is made available.

(2) The President shall notify the head of the executive agency

of the action taken in apportioning the appropriation under paragraph (1) of this subsection not later than the later of the following:

(A) 20 days before the beginning of the fiscal year for which

the appropriation is available; or

(B) 30 days after the date of enactment of the law by which

the appropriation is made available.

(c) By the first day of each fiscal year, the head of each executive

department of the United States Government shall apportion

among the major organizational units of the department the maximum amount to be expended by each unit during the fiscal year

out of each contingent fund appropriated for the entire year for the

department. Each amount may be changed during the fiscal year

only by written direction of the head of the department. The direction shall state the reasons for the change.

(d) An appropriation apportioned under this subchapter may be

divided and subdivided administratively within the limits of the

apportionment.

(e) This section does not affect the initiation and operation of agricultural price support programs.

SEC. 1514. ADMINISTRATIVE DIVISION OF APPORTIONMENTS.

(a) The official having administrative control of an appropriation

available to the legislative branch, the judicial branch, the United

States International Trade Commission, or the District of Columbia

government, and, subject to the approval of the President, the head

of each executive agency (except the Commission) shall prescribe by

regulation a system of administrative control not inconsistent with

accounting procedures prescribed under law. The system shall be

designed to—

(1) restrict obligations or expenditures from each appropriation to the amount of apportionments or reapportionments of

the appropriation; and

(2) enable the official or the head of the executive agency to

fix responsibility for an obligation or expenditure exceeding an

apportionment or reapportionment.

(b) To have a simplified system for administratively dividing appropriations, the head of each executive agency (except the Commission) shall work toward the objective of financing each operating unit, at the highest practical level, from not more than one administrative division for each appropriation affecting the unit.

SEC. 1515. AUTHORIZED APPORTIONMENTS NECESSITATING DEFICIENCY OR SUPPLEMENTAL APPROPRIATIONS.

(a) An appropriation required to be apportioned under section

1512 of this title may be apportioned on a basis that indicates the

need for a deficiency or supplemental appropriation to the extent

necessary to permit payment of such pay increases as may be

granted pursuant to law to civilian officers and employees (includ-
97 Sec. 1517 CH. 15—APPROPRIATION ACCOUNTING

ing prevailing rate employees whose pay is fixed and adjusted

under subchapter IV of chapter 53 of title 5) and to retired and active military personnel.

(b)(1) Except as provided in subsection (a) of this section, an official may make, and the head of an executive agency may request,

an apportionment under section 1512 of this title that would indicate a necessity for a deficiency or supplemental appropriation only

when the official or agency head decides that the action is required

because of—

(A) a law enacted after submission to Congress of the estimates for an appropriation that requires an expenditure beyond administrative control; or

(B) an emergency involving the safety of human life, the protection of property, or the immediate welfare of individuals

when an appropriation that would allow the United States

Government to pay, or contribute to, amounts required to be

paid to individuals in specific amounts fixed by law or under

formulas prescribed by law, is insufficient.

(2) If an official making an apportionment decides that an apportionment would indicate a necessity for a deficiency or supplemental appropriation, the official shall submit immediately a detailed report of the facts to Congress. The report shall be referred

to in submitting a proposed deficiency or supplemental appropriation.

SEC. 1516. EXEMPTIONS.

An official designated in section 1513 of this title to make apportionments may exempt from apportionment—

(1) a trust fund or working fund if an expenditure from the

fund has no significant effect on the financial operations of the

United States Government;

(2) a working capital fund or a revolving fund established for

intragovernmental operations;

(3) receipts from industrial and power operations available

under law; and

(4) appropriations made specifically for—

(A) interest on, or retirement of, the public debt;

(B) payment of claims, judgments, refunds, and drawbacks;

(C) items the President decides are of a confidential nature;

(D) payment under a law requiring payment of the total

amount of the appropriation to a designated payee; and

(E) grants to the States under the Social Security Act

(42 U.S.C. 301 et seq.).

SEC. 1517. PROHIBITED OBLIGATIONS AND EXPENDITURES.

(a) An officer or employee of the United States Government or of

the District of Columbia government may not make or authorize an

expenditure or obligation exceeding—

(1) an apportionment; or

(2) the amount permitted by regulations prescribed under

section 1514(a) of this title.

(b) If an officer or employee of an executive agency or of the District of Columbia government violates subsection (a) of this section,
Sec. 1518 CH. 15—APPROPRIATION ACCOUNTING 98

the head of the executive agency or the Mayor of the District of Columbia, as the case may be, shall report immediately to the President and Congress all relevant facts and a statement of actions

taken.

SEC. 1518. ADVERSE PERSONNEL ACTIONS.

An officer or employee of the United States Government or of the

District of Columbia government violating section 1517(a) of this

title shall be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office.

SEC. 1519. CRIMINAL PENALTY.

An officer or employee of the United States Government or of the

District of Columbia government knowingly and willfully violating

section 1517(a) of this title shall be fined not more than $5,000, imprisoned for not more than 2 years, or both.

SUBCHAPTER III—TRANSFERS AND REIMBURSEMENTS

SEC. 1531. TRANSFERS OF FUNCTIONS AND ACTIVITIES.

(a) The balance of an appropriation available and necessary to finance or discharge a function or activity transferred or assigned

under law within an executive agency or from one executive agency

to another may be transferred to and used—

(1) by the organizational unit or agency to which the function or activity was transferred or assigned; and

(2) for a purpose for which the appropriation was originally

available.

(b) The head of the executive agency determines the amount

that, with the approval of the President, is necessary to be transferred when the transfer or assignment of the function or activity

is within the agency. The President determines the amount necessary to be transferred when the transfer or assignment of the

function or activity is from one executive agency to another.

(c) A balance transferred under this section is—

(1) credited to an applicable existing or new appropriation

account;

(2) merged with the amount in an account to which the balance is credited; and

(3) with the amount with which the balance is merged, accounted for as one amount.

(d) New appropriation accounts may be established to carry out

subsection (c)(1) of this section.

SEC. 1532. WITHDRAWAL AND CREDIT.

An amount available under law may be withdrawn from one appropriation account and credited to another or to a working fund

only when authorized by law. Except as specifically provided by

law, an amount authorized to be withdrawn and credited is available for the same purpose and subject to the same limitations provided by the law appropriating the amount. A withdrawal and

credit is made by check and without a warrant.
99 Sec. 1535 CH. 15—APPROPRIATION ACCOUNTING

SEC. 1533. TRANSFERS OF APPROPRIATIONS FOR SALARIES AND EXPENSES TO CARRY OUT NATIONAL DEFENSE RESPONSIBILITIES.

An appropriation of an executive agency for salaries and expenses is available to carry out national defense responsibilities assigned to the agency under law. A transfer necessary to carry out

this section may be made between appropriations or allocations

within the executive agency. An allocation may not be made to an

executive agency that can carry out with its regular personnel a defense activity assigned to it by using the authority of this section

to realign its regular programs.

SEC. 1534. ADJUSTMENTS BETWEEN APPROPRIATIONS.

(a) An appropriation available to an agency may be charged at

any time during a fiscal year for the benefit of another appropriation available to the agency to pay costs—

(1) when amounts are available in both the appropriation to

be charged and the appropriation to be benefited; and

(2) subject to limitations applicable to the appropriations.

(b) Amounts paid under this section are charged on a final basis

during, or as of the close of, the fiscal year to the appropriation

benefited. The appropriation charged under subsection (a) of this

section shall be appropriately credited.

SEC. 1535. AGENCY AGREEMENTS.

(a) The head of an agency or major organizational unit within an

agency may place an order with a major organizational unit within

the same agency or another agency for goods or services if—

(1) amounts are available;

(2) the head of the ordering agency or unit decides the order

is in the best interest of the United States Government;

(3) the agency or unit to fill the order is able to provide or

get by contract the ordered goods or services; and

(4) the head of the agency decides ordered goods or services

cannot be provided by contract as conveniently or cheaply by

a commercial enterprise.

(b) Payment shall be made promptly by check on the written request of the agency or unit filling the order. Payment may be in

advance or on providing the goods or services ordered and shall be

for any part of the estimated or actual cost as determined by the

agency or unit filling the order. A bill submitted or a request for

payment is not subject to audit or certification in advance of payment. Proper adjustment of amounts paid in advance shall be made

as agreed to by the heads of the agencies or units on the basis of

the actual cost of goods or services provided.

(c) A condition or limitation applicable to amounts for procurement of an agency or unit placing an order or making a contract

under this section applies to the placing of the order or the making

of the contract.

(d) An order placed or agreement made under this section obligates an appropriation of the ordering agency or unit. The amount

obligated is deobligated to the extent that the agency or unit filling

the order has not incurred obligations, before the end of the period

of availability of the appropriation, in—

(1) providing goods or services; or
Sec. 1535 CH. 15—APPROPRIATION ACCOUNTING 100

(2) making an authorized contract with another person to

provide the requested goods or services.

(e) This section does not—

(1) authorize orders to be placed for goods or services to be

provided by convict labor; or

(2) affect other laws about working funds.

NOTE

Economy Act Purchases

Pub.L. 103–355, Title I, Sec. 1074, Oct. 13, 1994, 108 Stat. 3271,

provided that:

‘‘(a) REGULATIONS REQUIRED.—The Federal Acquisition Regulation shall be revised to include regulations governing the exercise of

the authority under section 1535 of title 31, United States Code [this

section], for Federal agencies to purchase goods and services under

contracts entered into or administered by other agencies.

‘‘(b) CONTENT OF REGULATIONS.—The regulations prescribed pursuant to subsection (a) shall—

‘‘(1) require that each purchase described in subsection (a) be

approved in advance by a contracting officer of the ordering

agency with authority to contract for the goods or services to be

purchased or by another official in a position specifically designated by regulation to approve such purchase;

‘‘(2) provide that such a purchase of goods or services may be

made only if—

‘‘(A) the purchase is appropriately made under a contract

that the agency filling the purchase order entered into, before the purchase order, in order to meet the requirements

of such agency for the same or similar goods or services;

‘‘(B) the agency filling the purchase order is better qualified to enter into or administer the contract for such goods

or services by reason of capabilities or expertise that is not

available within the ordering agency; or

‘‘(C) the agency or unit filling the order is specifically authorized by law or regulations to purchase such goods or

services on behalf of other agencies;

‘‘(3) prohibit any such purchase under a contract or other

agreement entered into or administered by an agency not covered by the provisions of chapter 137 of title 10, United States

Code, or title III of the Federal Property and Administrative

Services Act of 1949 (41 U.S.C. 251 et seq.) and not covered by

the Federal Acquisition Regulation unless the purchase is approved in advance by the senior procurement official responsible

for purchasing by the ordering agency; and

‘‘(4) prohibit any payment to the agency filling a purchase

order of any fee that exceeds the actual cost or, if the actual cost

is not known, the estimated cost of entering into and administering the contract or other agreement under which the order

is filled.

‘‘(c) MONITORING SYSTEM REQUIRED.—The Administrator for Federal Procurement Policy shall ensure that, not later than one year

after the date of the enactment of this Act [Oct. 13, 1994], systems

for collecting and evaluating procurement data are capable of col-
101 Sec. 1535 CH. 15—APPROPRIATION ACCOUNTING

lecting and evaluating appropriate data on procurements conducted

under the regulations prescribed pursuant to subsection (a).

‘‘(d) TERMINATION.—This section shall cease to be effective one

year after the date on which final regulations prescribed pursuant

to subsection (a) take effect.’’ [Note effective Oct. 13, 1994, except as

otherwise provided, see section 10001 of Pub.L. 103–355, set out as

a note under section 251 of Title 41, Public Contracts.]

Department of Defense Purchases Through Other Agencies

Pub.L. 103–160, Div. A, Title VIII, Sec. 844, Nov. 30, 1993, 107

Stat. 1720, provided that:

‘‘(a) REGULATIONS REQUIRED.—Not later than six months after

the date of the enactment of this Act [Nov. 30, 1993], the Secretary

of Defense shall prescribe regulations governing the exercise by the

Department of Defense of the authority under section 1535 of title

31, United States Code [this section], to purchase goods and services

under contracts entered into or administered by another agency.

‘‘(b) CONTENT OF REGULATIONS.—The regulations prescribed pursuant to subsection (a) shall—

‘‘(1) require that each purchase described in subsection (a) be

approved in advance by a contracting officer of the Department

of Defense with authority to contract for the goods or services

to be purchased or by another official in a position specifically

designated by regulation to approve such purchase;

‘‘(2) provide that such a purchase of goods or services may be

made only if—

‘‘(A) the purchase is appropriately made under a contract

that the agency filling the purchase order entered into, before the purchase order, in order to meet the requirements

of such agency for the same or similar goods or services;

‘‘(B) the agency filling the purchase order is better qualified to enter into or administer the contract for such goods

or services by reason of capabilities or expertise that is not

available within the Department;

‘‘(C) the agency or unit filling the order is specifically authorized by law or regulations to purchase such goods or

services on behalf of other agencies; or

‘‘(D) the purchase is authorized by an Executive order or

a revision to the Federal Acquisition Regulation setting

forth specific additional circumstances in which purchases

referred to in subsection (a) are authorized;

‘‘(3) prohibit any such purchase under a contract or other

agreement entered into or administered by an agency not covered by the provisions of chapter 137 of title 10, United States

Code [section 2301 et seq. of Title 10, Armed Forces], or title III

of the Federal Property and Administrative Services Act of 1949

[section 251 et seq. of Title 41, Public Contracts] and not covered by the Federal Acquisition Regulation unless the purchase

is approved in advance by the Senior Acquisition Executive responsible for purchasing by the ordering agency or unit; and

‘‘(4) prohibit any payment to the agency filling a purchase

order of any fee that exceeds the actual cost or, if the actual cost

is not known, the estimated cost of entering into and admin-
Sec. 1536 CH. 15—APPROPRIATION ACCOUNTING 102

istering the contract or other agreement under which the order

is filled.

‘‘(c) MONITORING SYSTEM REQUIRED.—The Secretary of Defense

shall ensure that, not later than one year after the date of the enactment of this Act [Nov. 30, 1993], systems of the Department of Defense for collecting and evaluating procurement data are capable of

collecting and evaluating appropriate data on procurements conducted under the regulations prescribed pursuant to subsection (a).

‘‘(d) TERMINATION.—This section [this note] shall cease to be effective one year after the date on which final regulations prescribed

pursuant to subsection (a) take effect.’’

Acquisition of Goods, Services, or Space by Secretary of

Senate and Sergeant at Arms and Doorkeeper of the Senate

Pub.L. 101–163, Title I, Sec. 8, Nov. 21, 1989, 103 Stat. 1046,

provided that:

‘‘(1) The Secretary of the Senate and the Sergeant at Arms

and Doorkeeper of the Senate are authorized to acquire goods,

services, or space from government agencies and units by agreement under the provisions of the Economy Act, 31 U.S.C. 1535,

and to make advance payments in conjunction therewith, if required by the providing agency or establishment.

‘‘(2) No advance payment may be made under paragraph (1)

unless specifically provided for in the agreement. No agreement

providing for advance payment may be entered into unless it

contains a provision requiring the refund of any unobligated

balance of the advance.

‘‘(3) No agreement may be entered into under paragraph (1)

without the approval of the Senate Committee on Rules and Administration and the Senate Committee on Appropriations.’’

SEC. 1536. CREDITING PAYMENTS FROM PURCHASES BETWEEN EXECUTIVE AGENCIES.

(a) An advance payment made on an order under section 1535 of

this title is credited to a special working fund that the Secretary

of the Treasury considers necessary to be established. Except as

provided in this section, any other payment is credited to the appropriation or fund against which charges were made to fill the

order.

(b) An amount paid under section 1535 of this title may be expended in providing goods or services or for a purpose specified for

the appropriation or fund credited. Where goods are provided from

stocks on hand, the amount received in payment is credited so as

to be available to replace the goods unless—

(1) another law authorizes the amount to be credited to some

other appropriation or fund; or

(2) the head of the executive agency filling the order decides

that replacement is not necessary, in which case, the amount

received is deposited in the Treasury as miscellaneous receipts.

(c) This section does not affect other laws about working funds.
103 Sec. 1551 CH. 15—APPROPRIATION ACCOUNTING

SEC. 1537. SERVICES BETWEEN THE UNITED STATES GOVERNMENT

AND THE DISTRICT OF COLUMBIA GOVERNMENT.

(a) To prevent duplication and to promote efficiency and economy, an officer or employee of—

(1) the United States Government may provide services to

the District of Columbia government; and

(2) the District of Columbia government may provide services to the United States Government.

(b)(1) Services under this section shall be provided under an

agreement—

(A) negotiated by officers and employees of the two governments; and

(B) approved by the Director of the Office of Management

and Budget and the Mayor of the District of Columbia.

(2) Each agreement shall provide that the cost of providing the

services shall be borne in the way provided in subsection (c) of this

section by the government to which the services are provided at

rates or charges based on the actual cost of providing the services.

(3) To carry out an agreement made under this subsection, the

agreement may provide for the delegation of duties and powers of

officers and employees of—

(A) the District of Columbia government to officers and employees of the United States Government; and

(B) the United States Government to officers and employees

of the District of Columbia government.

(c) In providing services under an agreement made under subsection (b) of this section—

(1) costs incurred by the United States Government may be

paid from appropriations available to the District of Columbia

government officer or employee to whom the services were provided; and

(2) costs incurred by the District of Columbia government

may be paid from amounts available to the United States Government officer or employee to whom the services were provided.

(d) When requested by the Director of the United States Secret

Service, the Chief of the Metropolitan Police shall assist the Secret

Service and the Executive Protective Service on a non-reimbursable

basis in carrying out their protective duties under section 302 of

title 3 and section 3056 of title 18.

SUBCHAPTER IV—CLOSING ACCOUNTS

SEC. 1551. DEFINITIONS; APPLICABILITY OF SUBCHAPTER.

(a) In this subchapter—

(1) An obligated balance of an appropriation account as of

the end of a fiscal year is the amount of unliquidated obligations applicable to the appropriation less amounts collectible as

repayments to the appropriation.

(2) An unobligated balance is the difference between the obligated balance and the total unexpended balance.

(3) A fixed appropriation account is an appropriation account

available for obligation for a definite period.
Sec. 1552 CH. 15—APPROPRIATION ACCOUNTING 104

(b) The limitations on the availability for expenditure prescribed

in this subchapter apply to all appropriations unless specifically

otherwise authorized by a law that specifically—

(1) identifies the appropriate account for which the availability for expenditure is to be extended;

(2) provides that such account shall be available for recording, adjusting, and liquidating obligations properly chargeable

to that account; and

(3) extends the availability for expenditure of the obligated

balances.

(c) This subchapter does not apply to—

(1) appropriations for the District of Columbia government;

or

(2) appropriations to be disbursed by the Secretary of the

Senate or the Clerk of the House of Representatives.

SEC. 1552. PROCEDURE FOR APPROPRIATION ACCOUNTS AVAILABLE

FOR DEFINITE PERIODS.

(a) On September 30th of the 5th fiscal year after the period of

availability for obligation of a fixed appropriation account ends, the

account shall be closed and any remaining balance (whether obligated or unobligated) in the account shall be canceled and thereafter shall not be available for obligation or expenditure for any

purpose.

(b) Collections authorized or required to be credited to an appropriation account, but not received before closing of the account

under subsection (a) or under section 1555 of this title shall be deposited in the Treasury as miscellaneous receipts.

SEC. 1553. AVAILABILITY OF APPROPRIATION ACCOUNTS TO PAY OBLIGATIONS.

(a) After the end of the period of availability for obligation of a

fixed appropriation account and before the closing of that account

under section 1552(a) of this title, the account shall retain its fiscal-year identity and remain available for recording, adjusting, and

liquidating obligations properly chargeable to that account.

(b)(1) Subject to the provisions of paragraph (2), after the closing

of an account under section 1552(a) or 1555 of this title, obligations

and adjustments to obligations that would have been properly

chargeable to that account, both as to purpose and in amount, before closing and that are not otherwise chargeable to any current

appropriation account of the agency may be charged to any current

appropriation account of the agency available for the same purpose.

(2) The total amount of charges to an account under paragraph

(1) may not exceed an amount equal to 1 percent of the total appropriations for that account.

(c)(1) In the case of a fixed appropriation account with respect to

which the period of availability for obligation has ended, if an obligation of funds from that account to provide funds for a program,

project, or activity to cover amounts required for contract changes

would cause the total amount of obligations from that appropriation during a fiscal year for contract changes for that program,

project, or activity to exceed $4,000,000, the obligation may only be

made if the obligation is approved by the head of the agency (or

an officer of the agency within the Office of the head of the agency
105 Sec. 1554 CH. 15—APPROPRIATION ACCOUNTING

to whom the head of the agency has delegated the authority to approve such an obligation).

(2) In the case of a fixed appropriation account with respect to

which the period of availability for obligation has ended, if an obligation of funds from that account to provide funds for a program,

project, or activity to cover amounts required for contract changes

would cause the total amount obligated from that appropriation

during a fiscal year for that program, project, or activity to exceed

$25,000,000, the obligation may not be made until—

(A) the head of the agency submits to the appropriate authorizing committees of Congress and the Committees on Appropriations of the Senate and the House of Representatives a

notice in writing of the intent to obligate such funds, together

with a description of the legal basis for the proposed obligation

and the policy reasons for the proposed obligation; and

(B) a period of 30 days has elapsed after the notice is submitted.

(3) In this subsection, the term ‘‘contract change’’ means a

change to a contract under which the contractor is required to perform additional work. Such term does not include adjustments to

pay claims or increases under an escalation clause.

(d)(1) Obligations under this section may be paid without prior

action of the Comptroller General.

(2) This subchapter does not—

(A) relieve the Comptroller General of the duty to make decisions requested under law; or

(B) affect the authority of the Comptroller General to settle

claims and accounts.

SEC. 1554. AUDIT, CONTROL, AND REPORTING.

(a) Any audit requirement, limitation on obligations, or reporting

requirement that is applicable to an appropriation account shall remain applicable to that account after the end of the period of availability for obligation of that account.

(b)(1) After the close of each fiscal year, the head of each agency

shall submit to the President and the Secretary of the Treasury a

report regarding the unliquidated obligations, unobligated balances, canceled balances, and adjustments made to appropriation

accounts of that agency during the completed fiscal year. The report shall be submitted no later than 15 days after the date on

which the President’s budget for the next fiscal year is submitted

to Congress under section 1105 of this title.

(2) Each report required by this subsection shall—

(A) provide a description, with reference to the fiscal year of

appropriations, of the amount in each account, its source, and

an itemization of the appropriations accounts;

(B) describe all current and expired appropriations accounts;

(C) describe any payments made under section 1553 of this

title;

(D) describe any adjustment of obligations during that fiscal

year pursuant to section 1553 of this title;

(E) contain a certification by the head of the agency that the

obligated balances in each appropriation account of the agency

reflect proper existing obligations and that expenditures from
Sec. 1555 CH. 15—APPROPRIATION ACCOUNTING 106

the account since the preceding review were supported by a

proper obligation of funds and otherwise were proper;

(F) describe all balances canceled under sections 1552 and

1555 of this title.

(3) The head of each Federal agency shall provide a copy of each

such report to the Speaker of the House of Representatives and the

Committee on Appropriations, the Committee on Governmental Affairs, and other appropriate oversight and authorizing committees

of the Senate.

(c) The head of each agency shall establish internal controls to

assure that an adequate review of obligated balances is performed

to support the certification required by section 1108(c) of this title.

SEC. 1555. CLOSING OF APPROPRIATION ACCOUNTS AVAILABLE FOR

INDEFINITE PERIODS.

An appropriation account available for obligation for an indefinite period shall be closed, and any remaining balance (whether obligated or unobligated) in that account shall be canceled and thereafter shall not be available for obligation or expenditure for any

purpose, if—

(1) the head of the agency concerned or the President determines that the purposes for which the appropriation was made

have been carried out; and

(2) no disbursement has been made against the appropriation for two consecutive fiscal years.

SEC. 1556. COMPTROLLER GENERAL: REPORTS ON APPROPRIATION

ACCOUNTS.

(a) In carrying out audit responsibilities, the Comptroller General shall report on operations under this subchapter to—

(1) the head of the agency concerned;

(2) the Secretary of the Treasury; and

(3) the President.

(b) A report under this section shall include an appraisal of unpaid obligations under fixed appropriation accounts for which the

period of availability for obligation has ended.

SEC. 1557. AUTHORITY FOR EXEMPTIONS IN APPROPRIATION LAWS.

A provision of an appropriation law may exempt an appropriation from the provisions of this subchapter and fix the period for

which the appropriation remains available for expenditure.

SEC. 1558. AVAILABILITY OF FUNDS FOLLOWING RESOLUTION OF A

PROTEST.

(a) Notwithstanding section 1552 of this title or any other provision of law, funds available to an agency for obligation for a contract at the time a protest is filed in connection with a solicitation

for, proposed award of, or award of such contract shall remain

available for obligation for 90 working days after the date on which

the final ruling is made on the protest. A ruling is considered final

on the date on which the time allowed for filing an appeal or request for reconsideration has expired, or the date on which a decision is rendered on such an appeal or request, whichever is later.

(b) Subsection (a) applies with respect to any protest filed under

subchapter V of chapter 35 of this title or under section 111(f) of
107 Sec. 1558 CH. 15—APPROPRIATION ACCOUNTING

the Federal Property and Administrative Services Act of 1949 (40

U.S.C. 759(f)).

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

1514 ............................................ 38 C.F.R. 1

1535 ............................................ 32 C.F.R. 728; 48 C.F.R. 2417

TFM, Volume 1, Part 2, Chapter 2500, see appendix V

TFM, Volume 1, Part 6, Chapter 8000, see appendix V

1536 ............................................ TFM, Volume 1, Part 2, Chapter 2500, see appendix V

1511 ............................................ OMB: Circular A–34, see appendix IV

1512 ............................................ OMB: Circular A–34, see appendix IV

1513 ............................................ OMB: Circular A–34, see appendix IV

1514 ............................................ OMB: Circular A–34, see appendix IV

1515 ............................................ OMB: Circular A–34, see appendix IV

1516 ............................................ OMB: Circular A–34, see appendix IV

1517 ............................................ OMB: Circular A–34, see appendix IV

1518 ............................................ OMB: Circular A–34, see appendix IV

1519 ............................................ OMB: Circular A–34, see appendix IV

1551 ............................................ OMB: Circular A–34, see appendix IV

1552 ............................................ OMB: Circular A–34, see appendix IV

1553 ............................................ OMB: Circular A–34, see appendix IV

1554 ............................................ OMB: Circular A–34, see appendix IV

1555 ............................................ OMB: Circular A–34, see appendix IV

1556 ............................................ OMB: Circular A–34, see appendix IV

1557 ............................................ OMB: Circular A–34, see appendix IV
108

TITLE 31—MONEY AND FINANCE

Subtitle III—Financial Management

* * * * * * *

CHAPTER 31—PUBLIC DEBT

SUBCHAPTER I—BORROWING AUTHORITY

SEC. 3101. PUBLIC DEBT LIMIT.

(a) In this section, the current redemption value of an obligation

issued on a discount basis and redeemable before maturity at the

option of its holder is deemed to be the face amount of the obligation.

(b) The face amount of obligations issued under this chapter and

the face amount of obligations whose principal and interest are

guaranteed by the United States Government (except guaranteed

obligations held by the Secretary of the Treasury) may not be more

than $4,900,000,000,000, outstanding at one time, subject to

changes periodically made in that amount as provided by law

through the congressional budget process described in Rule XLIX

of the Rules of the House of Representatives or otherwise.

(c) For purposes of this section, the face amount, for any month,

of any obligation issued on a discount basis that is not redeemable

before maturity at the option of the holder of the obligation is an

amount equal to the sum of—

(1) the original issue price of the obligation, plus

(2) the portion of the discount on the obligation attributable

to periods before the beginning of such month (as determined

under the principles of section 1272(a) of the Internal Revenue

Code of 1986 without regard to any exceptions contained in

paragraph (2) of such section).

SEC. 3102. BONDS.

(a) With the approval of the President, the Secretary of the

Treasury may borrow on the credit of the United States Government amounts necessary for expenditures authorized by law and

may issue bonds of the Government for the amounts borrowed and

may buy, redeem, and make refunds under section 3111 of this

title. The Secretary may issue bonds authorized by this section to

the public and to Government accounts at any annual interest rate

and prescribe conditions under section 3121 of this title.

(b) The Secretary shall offer the bonds authorized under this section first as a popular loan under regulations of the Secretary that

allow the people of the United States as nearly as possible an equal

opportunity to participate in subscribing to the offered bonds. However, the bonds may be offered in a way other than as a popular
109 Sec. 3104 CH. 31—PUBLIC DEBT

loan when the Secretary decides the other way is in the public interest.

(c)(1) When the Secretary decides it is in the public interest in

making a bond offering under this section, the Secretary may—

(A) make full allotments on receiving applications for smaller

amounts of bonds to subscribers applying before the closing

date the Secretary sets for filing applications;

(B) reject or reduce allotments on receiving applications filed

after the closing date or for larger amounts;

(C) reject or reduce allotments on receiving applications from

incorporated banks and trust companies for their own account

and make full allotments or increase allotments to other subscribers; and

(D) prescribe a graduated scale of allotments.

(2) The Secretary shall prescribe regulations applying to all popular loan subscribers similarly situated governing a reduction or

increase of an allotment under paragraph (1) of this subsection.

(d) The Secretary may make special arrangements for subscriptions from members of the armed forces. However, bonds issued to

those members must be the same as other bonds of the same issue.

(e) The Secretary may dispose of any part of a bond offering not

taken and may prescribe the price and way of disposition.

SEC. 3103. NOTES.

(a) With the approval of the President, the Secretary of the

Treasury may borrow on the credit of the United States Government amounts necessary for expenditures authorized by law and

may issue notes of the Government for the amounts borrowed and

may buy, redeem, and make refunds under section 3111 of this

title. The Secretary may prescribe conditions under section 3121 of

this title. Notwithstanding section 3121(a)(5) of this title, the payment date of each series of notes issued shall be at least one year

but not more than 10 years from the date of issue.

(b) The Government may redeem any part of a series of notes before maturity by giving at least 4 months’ notice but not more than

one year’s notice.

(c) The holder of a note of one series issued under this section

with the same issue date as another series of notes issued under

this section may convert, at par value, a note of the holder for a

note of the other series.

SEC. 3104. CERTIFICATES OF INDEBTEDNESS AND TREASURY BILLS.

(a) The Secretary of the Treasury may borrow on the credit of the

United States Government amounts necessary for expenditures authorized by law and may buy, redeem, and make refunds under

section 3111 of this title. For amounts borrowed, the Secretary may

issue—

(1) certificates of indebtedness of the Government; and

(2) Treasury bills of the Government.

(b) The Secretary may prescribe conditions for issuing certificates

of indebtedness and Treasury bills under section 3121 of this title

and conditions under which the certificates and bills may be redeemed before maturity. Notwithstanding section 3121(a)(5) of this

title, the payment date of certificates of indebtedness and Treasury

bills may not be more than one year after the date of issue.
Sec. 3105 CH. 31—PUBLIC DEBT 110

(c) Treasury bills issued under this section may not be accepted

before maturity to pay principal or interest on obligations of governments of foreign countries that are held by the United States

Government.

SEC. 3105. SAVINGS BONDS AND SAVINGS CERTIFICATES.

(a) With the approval of the President, the Secretary of the

Treasury may issue savings bonds and savings certificates of the

United States Government and may buy, redeem, and make refunds under section 3111 of this title. Proceeds from the bonds and

certificates shall be used for expenditures authorized by law. Savings bonds and certificates may be issued on an interest-bearing

basis, on a discount basis, or on an interest-bearing and discount

basis. Savings bonds shall mature not more than 20 years from the

date of issue. Savings certificates shall mature not more than 10

years from the date of issue. The difference between the price paid

and the amount received on redeeming a savings bond or certificate

is interest under the Internal Revenue Code of 1954 (26 U.S.C. 1

et seq.).

(b)(1) The Secretary may—

(A) fix the investment yield for savings bonds; and

(B) change the investment yield on an outstanding savings

bond, except that the yield on a bond for the period held may

not be decreased below the minimum yield for the period guaranteed on the date of issue.

(2) The Secretary may prescribe regulations providing that—

(A) owners of savings bonds may keep the bonds after maturity or after a period beyond maturity during which the bonds

have earned interest and continue to earn interest at rates

consistent with paragraph (1) of this subsection; and

(B) savings bonds earning a different rate of interest before

the regulations are prescribed shall earn a rate of interest consistent with paragraph (1).

(c) The Secretary may prescribe for savings bonds and savings

certificates issued under this section—

(1) the form and amount of an issue and series;

(2) the way in which they will be issued;

(3) the conditions, including restrictions on transfer, to which

they will be subject;

(4) conditions governing their redemption;

(5) their sales price and denominations;

(6) a way to evidence payments for or on account of them

and to provide for the exchange of savings certificates for savings bonds; and

(7) the maximum amount issued in a year that may be held

by one person.

(d) The Secretary may authorize financial institutions to make

payments to redeem savings bonds and savings notes. A financial

institution may be a paying agent only if the institution—

(1) is incorporated under the laws of the United States, a

State, the District of Columbia, or a territory or possession of

the United States;

(2) in the usual course of business accepts, subject to withdrawal, money for deposit or the purchase of shares;
111 Sec. 3107 CH. 31—PUBLIC DEBT

(3) is under the supervision of a banking authority of the jurisdiction in which it is incorporated;

(4) has a regular office to do business; and

(5) is qualified under regulations prescribed by the Secretary

in carrying out this subsection.

(e)(1) The Secretary may prescribe a way in which a check issued

to an individual (except a trust or estate) as a refund for taxes imposed under subtitle A of the Internal Revenue Code of 1954 (26

U.S.C. 1 et seq.) may become a series E savings bond. However, a

check may become a bond only if the claim for a refund is filed by

the last day prescribed by law for filing the return (determined

without any extensions) for the taxable year for which the refund

is made. The Secretary may prescribe the time and way in which

the check becomes a bond.

(2) A bond issued under this subsection is deemed to be a series

E bond issued under this section, except that the bond shall bear

an issue date of the first day of the first month beginning after the

close of the taxable year for which the bond is issued. The Secretary also may provide that a bond issued to joint payees may be

redeemed by either payee alone.

SEC. 3106. RETIREMENT AND SAVINGS BONDS.

(a) With the approval of the President, the Secretary of the

Treasury may issue retirement and savings bonds of the United

States Government and may buy, redeem, and make refunds under

section 3111 of this title. The proceeds from the bonds shall be

used for expenditures authorized by law. Retirement and savings

bonds may be issued only on a discount basis. The maturity period

of the bonds shall be at least 10 years from the date of issue but

not more than 30 years from the date of issue. The difference between the price paid and the amount received on redeeming a bond

is interest under the Internal Revenue Code of 1954 (26 U.S.C. 1

et seq.).

(b) With the approval of the President, the Secretary may allow

owners of retirement and savings bonds to keep the bonds after

maturity and continue to earn interest on them at rates that are

consistent with the rate of investment yield provided by retirement

and savings bonds.

(c) Section 3105(c)(1)–(5) of this title applies to this section. Sections 3105(c)(6) and (d) and 3126 of this title apply to this section

to the extent consistent with this section. The Secretary may prescribe the maximum amount of retirement and savings bonds issued under this section in a year that may be held by one person.

However, the maximum amount shall be at least $3,000.

SEC. 3107. INCREASING INTEREST RATES AND INVESTMENT YIELDS

ON RETIREMENT BONDS.

With the approval of the President, the Secretary of the Treasury

may increase by regulation the interest rate or investment yield on

an offering of bonds issued under this chapter that are described

in sections 405(b) and 409(a) of the Internal Revenue Code of 1954

(26 U.S.C. 405(b), 409(a)), as in effect before the enactment of the

Tax Reform Act of 1984. The increased yield shall be for interest

accrual periods specified in the regulations so that the interest rate

or investment yield on the bonds for those periods is consistent
Sec. 3108 CH. 31—PUBLIC DEBT 112

with the interest rate or investment yield on a new offering of

those bonds.

SEC. 3108. PROHIBITION AGAINST CIRCULATION PRIVILEGE.

An obligation issued under sections 3102–3104(a)(1) and 3105–

3107 of this title may not bear the circulation privilege.

SEC. 3109. TAX AND LOSS BONDS.

(a) The Secretary of the Treasury may issue tax and loss bonds

of the United States Government and may buy, redeem, and make

refunds under section 3111 of this title. The proceeds of the tax

and loss bonds shall be used for expenditures authorized by law.

Tax and loss bonds are nontransferrable except as provided by the

Secretary, bear no interest, and shall be issued in amounts needed

to allow persons to comply with section 832(e) of the Internal Revenue Code of 1954 (26 U.S.C. 832(e)). The Secretary may prescribe

the amount of tax and loss bonds and the conditions under which

the bonds will be issued as required by section 832(e).

(b) For a taxable year in which amounts are deducted from the

mortgage guaranty account referred to in section 832(e)(3) of the

Internal Revenue Code of 1954 (26 U.S.C. 832(e)(3)), an amount of

tax and loss bonds bought under section 832(e)(2) of the Internal

Revenue Code of 1954 (26 U.S.C. 832(e)(2)) shall be redeemed for

the amount deducted from the account. The amount redeemed shall

be applied as necessary to pay taxes due because of the inclusion

under section 832(b)(1)(E) of the Internal Revenue Code of 1954 (26

U.S.C. 832(b)(1)(E)) of amounts in gross income. The Secretary also

may prescribe additional ways to redeem the bonds.

SEC. 3110. SALE OF OBLIGATIONS OF GOVERNMENTS OF FOREIGN

COUNTRIES.

(a) With the approval of the President, the Secretary of the

Treasury may sell obligations of the government of a foreign country when the obligations were acquired under—

(1) the First Liberty Bond Act and matured before June 16,

1947;

(2) the Second Liberty Bond Act and matured before October

16, 1938; or

(3) section 7(a) of the Victory Liberty Loan Act.

(b) The Secretary may prescribe the conditions and frequency for

receiving payment under obligations of a government of a foreign

country acquired under the laws referred to in subsection (a) of this

section. A sale of an obligation acquired under those Acts shall at

least equal the purchase price and accrued interest. The proceeds

of obligations sold under this section and payments received from

governments on the principal of their obligations shall be used to

redeem or buy (for not more than par value and accrued interest)

bonds of the United States Government issued under this chapter.

If those bonds cannot be redeemed or bought, the Secretary shall

redeem or buy other outstanding interest-bearing obligations of the

Government that are subject to redemption or which can be bought

at not more than par value and accrued interest.

SEC. 3111. NEW ISSUE USED TO BUY, REDEEM, OR REFUND OUTSTANDING OBLIGATIONS.

An obligation may be issued under this chapter to buy, redeem,

or refund, at or before maturity, outstanding bonds, notes, certifi-
113 Sec. 3113 CH. 31—PUBLIC DEBT

cates of indebtedness, Treasury bills, or savings certificates of the

United States Government. Under regulations of the Secretary of

the Treasury, money received from the sale of an obligation and

other money in the general fund of the Treasury may be used in

making the purchases, redemptions, or refunds.

SEC. 3112. SINKING FUND FOR RETIRING AND CANCELLING BONDS

AND NOTES.

(a) The Department of the Treasury has a sinking fund for retiring bonds and notes issued under this chapter. Amounts in the

fund are appropriated for payment of bonds and notes at maturity

or for their redemption or purchase before maturity by the Secretary of the Treasury. The fund is available until all the bonds

and notes are retired.

(b) For each fiscal year, an amount is appropriated equal to—

(1) the interest that would have been payable during the fiscal year for which the appropriation is made on the bonds and

notes bought, redeemed, or paid out of the fund during that or

prior years;

(2) 2.5 percent of the total amount of bonds and notes issued

under the First Liberty Bond Act, the Second Liberty Bond

Act, the Third Liberty Bond Act, the Fourth Liberty Bond Act,

and the Victory Liberty Loan Act and outstanding on July 1,

1920, less an amount equal to the par amount of obligations

of governments of foreign countries that the United States

Government held on July 1, 1920; and

(3) 2.5 percent of the total amount expended after June 29,

1933, from appropriations made or authorized in sections 301

and 302 of the Emergency Relief and Construction Act of 1932.

(c) The Secretary may prescribe the price and conditions for paying, redeeming, and buying bonds and notes under this section. The

average cost of bonds and notes bought under this section may not

be more than par value and accrued interest. Bonds and notes

bought, redeemed, or paid out of the sinking fund must be canceled

and retired and may not be reissued.

SEC. 3113. ACCEPTING GIFTS.

(a) To provide the people of the United States with an opportunity to make gifts to the United States Government to be used

to reduce the public debt—

(1) the Secretary of the Treasury may accept for the Government a gift of—

(A) money made only on the condition that it be used to

reduce the public debt;

(B) an obligation of the Government included in the public debt made only on the condition that the obligation be

canceled and retired and not reissued; and

(C) other intangible personal property made only on the

condition that the property is sold and the proceeds from

the sale used to reduce the public debt; and

(2) the Administrator of General Services may accept for the

Government a gift of tangible property made only on the condition that it be sold and the proceeds from the sale be used to

reduce the public debt.
Sec. 3121 CH. 31—PUBLIC DEBT 114

(b) The Secretary and the Administrator each may reject a gift

under this section when the rejection is in the interest of the Government.

(c) The Secretary and the Administrator shall convert a gift either of them accepts under subsection (a)(1)(C) or (2) of this section

to money on the best terms available. If a gift accepted under subsection (a) of this section is subject to a gift or inheritance tax, the

Secretary or the Administrator may pay the tax out of the proceeds

of the gift or the proceeds of the redemption or sale of the gift.

(d) The Treasury has an account into which money received as

gifts and proceeds from the sale or redemption of gifts under this

section shall be deposited. The Secretary shall use the money in

the account to pay at maturity, or to redeem or buy before maturity, an obligation of the Government included in the public debt.

An obligation of the Government that is paid, redeemed, or bought

with money from the account shall be canceled and retired and

may not be reissued. Money deposited in the account is appropriated and may be expended to carry out this section.

(e)(1) The Secretary shall redeem a direct obligation of the Government bearing interest or sold on a discount basis on receiving

it when the obligation—

(A) is given to the Government;

(B) becomes the property of the Government under the conditions of a trust; or

(C) is payable on the death of the owner to the Government

(or to an officer of the Government in the officer’s official capacity).

(2) If the gift or transfer to the Government is subject to a gift

or inheritance tax, the Secretary shall pay the tax out of the proceeds of redemption.

SUBCHAPTER II—ADMINISTRATIVE

SEC. 3121. PROCEDURE.

(a) In issuing obligations under sections 3102–3104 of this title,

the Secretary of the Treasury may prescribe—

(1) whether an obligation is to be issued on an interest-bearing basis, a discount basis, or an interest-bearing and discount

basis;

(2) regulations on the conditions under which the obligation

will be offered for sale, including whether it will be offered for

sale on a competitive or other basis;

(3) the offering price and interest rate;

(4) the method of computing the interest rate;

(5) the dates for paying principal and interest;

(6) the form and denominations of the obligations; and

(7) other conditions.

(b)(1) Under conditions prescribed by the Secretary, an obligation

issued under this chapter and redeemable on demand of the owner

or holder may be used to pay the United States Government for

taxes imposed by it.

(2) An obligation of the Government issued after March 3, 1971,

under law may not be redeemed before its maturity to pay a tax

imposed by the Government in an amount more than the fair mar-
115 Sec. 3121 CH. 31—PUBLIC DEBT

ket value of the obligation at the time of its redemption. This paragraph does not apply to a Treasury bill issued under section 3104

of this title.

(c) Under conditions prescribed by the Secretary, an obligation

authorized by this chapter may be issued in exchange for an obligation of an agency whose principal and interest are unconditionally

guaranteed by the Government at or before maturity.

(d) Under conditions prescribed by the Secretary, the Secretary

may issue registered bonds in exchange for and instead of coupon

bonds that have been or may be issued. The registered bonds shall

be similar in all respects to the registered bonds issued under a

law authorizing the issue of coupon bonds offered for exchange.

(e) A decision of the Secretary about an issue of obligations under

sections 3102–3104 of this title is final.

(f) The Secretary may accept voluntary services in carrying out

the sale of public debt obligations.

(g)(1) In this subsection, ‘‘registration-required obligation’’ means

an obligation except an obligation—

(A) not of a type offered to the public;

(B) having a maturity (at issue) of not more than one year;

or

(C) described in paragraph (2) of this subsection.

(2) An obligation is not a registration-required obligation if—

(A) there are arrangements reasonably designed to ensure

that the obligation will be sold (or resold in connection with

the original issue) only to a person that is not a United States

person; and

(B) for an obligation not in registered form—

(i) interest on the obligation is payable only outside the

United States and its territories and possessions; and

(ii) a statement is on the face of the obligation that a

United States person holding the obligation is subject to

limitations under the United States income tax laws.

(3) Every registration-required obligation of the Government

shall be in registered form. A book entry obligation is deemed to

be in registered form if the right to principal and stated interest

on the obligation may be transferred only through a book entry

consistent with regulations of the Secretary.

(4) The Secretary shall prescribe regulations necessary to carry

out this subsection when there is a nominee.

(h)(1) The Secretary shall prescribe by regulation standards for

the safeguarding and use of obligations issued under this chapter,

and obligations otherwise issued or guaranteed as to principal or

interest by the United States. Such regulations shall apply only to

a depository institution that is not a government securities broker

or a government securities dealer and that holds such obligations

as fiduciary, custodian, or otherwise for the account of a customer

and not for its own account. Such regulations shall provide for the

adequate segregation of obligations so held, including obligations

which are purchased or sold subject to resale or repurchase.

(2) Violation of a regulation prescribed under paragraph (1) shall

constitute adequate basis for the issuance of an order under section

5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 8(b) or 8(c) of the Federal Deposit Insurance Act, section
Sec. 3122 CH. 31—PUBLIC DEBT 116

5(d)(2) or 5(d)(3) of the Home Owners’ Loan Act of 1933, section

407(e) or 407(f) of the National Housing Act, or section 206(e) or

206(f) of the Federal Credit Union Act. Such an order may be issued with respect to a depository institution by its appropriate regulatory agency and with respect to a federally insured credit union

by the National Credit Union Administration Board.

(3) Nothing in this subsection shall be construed to affect in any

way the powers of such agencies under any other provision of law.

(4) The Secretary shall, prior to adopting regulations under this

subsection, determine with respect to each appropriate regulatory

agency and the National Credit Union Administration Board,

whether its rules and standards adequately meet the purposes of

regulations to be promulgated under this subsection, and if the

Secretary so determines, shall exempt any depository institution

subject to such rules or standards from the regulations promulgated under this subsection.

(5) As used in this subsection—

(A) ‘‘depository institution’’ has the meaning stated in

clauses (i) through (vi) of section 19(b)(1)(A) of the Federal Reserve Act and also includes a foreign bank, an agency or

branch of a foreign bank, and a commercial lending company

owned or controlled by a foreign bank (as such terms are defined in the International Banking Act of 1978).

(B) ‘‘government securities broker’’ has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act of

1934.

(C) ‘‘government securities dealer’’ has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act of

1934.

(D) ‘‘appropriate regulatory agency’’ has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange Act of

1934.

SEC. 3122. BANKS AND TRUST COMPANIES AS DEPOSITARIES.

(a) The Secretary of the Treasury may designate incorporated

banks and trust companies as depositaries for any part of proceeds

of an obligation issued under this chapter. The Secretary may prescribe the conditions under which deposits may be made under this

section, including the interest rate on amounts deposited and security requirements.

(b) The Secretary may designate a bank or trust company that

is a depositary under subsection (a) of this section as a fiscal agent

of the United States Government in selling and delivering bonds

and certificates of indebtedness issued by the Government.

SEC. 3123. PAYMENT OF OBLIGATIONS AND INTEREST ON THE PUBLIC

DEBT.

(a) The faith of the United States Government is pledged to pay,

in legal tender, principal and interest on the obligations of the Government issued under this chapter.

(b) The Secretary of the Treasury shall pay interest due or accrued on the public debt. As the Secretary considers expedient, the

Secretary may pay in advance interest on the public debt by a period of not more than one year, with or without a rebate of interest

on the coupons.
117 Sec. 3125 CH. 31—PUBLIC DEBT

(c)(1) The Secretary may issue a bond, note, or certificate of indebtedness authorized under this chapter whose principal and interest are payable in a foreign currency stated in the bond, note,

or certificate. The Secretary may dispose of the bonds, notes, and

certificates at a price that is at least par value without complying

with section 3102(b)–(d) of this title.

(2) In determining the dollar amount of bonds, notes, and certificates of indebtedness that may be issued under this chapter, the

dollar equivalent of the amount of bonds, notes, and certificates

payable in a foreign currency is determined by the par of the exchange value on the date of issue of the bonds, notes, or certificates

as published by the Secretary under section 5151 of this title.

(3) The Secretary may designate depositaries in foreign countries

in which any part of the proceeds of bonds, notes, or certificates of

indebtedness payable in the foreign currency may be deposited.

SEC. 3124. EXEMPTION FROM TAXATION.

(a) Stocks and obligations of the United States Government are

exempt from taxation by a State or political subdivision of a State.

The exemption applies to each form of taxation that would require

the obligation, the interest on the obligation, or both, to be considered in computing a tax, except—

(1) a nondiscriminatory franchise tax or another nonproperty

tax instead of a franchise tax, imposed on a corporation; and

(2) an estate or inheritance tax.

(b) The tax status of interest on obligations and dividends, earnings, or other income from evidences of ownership issued by the

Government or an agency and the tax treatment of gain and loss

from the disposition of those obligations and evidences of ownership is decided under the Internal Revenue Code of 1954 (26 U.S.C.

1 et seq.). An obligation that the Federal Housing Administration

had agreed, under a contract made before March 1, 1941, to issue

at a future date, has the tax exemption privileges provided by the

authorizing law at the time of the contract. This subsection does

not apply to obligations and evidences of ownership issued by the

District of Columbia, a territory or possession of the United States,

or a department, agency, instrumentality, or political subdivision of

the District, territory, or possession.

SEC. 3125. RELIEF FOR LOST, STOLEN, DESTROYED, MUTILATED, OR

DEFACED OBLIGATIONS.

(a) In this section, ‘‘obligation’’ means a direct obligation of the

United States Government issued under law for valuable consideration, including bonds, notes, certificates of indebtedness, Treasury

bills, and interim certificates issued for an obligation.

(b) The Secretary of the Treasury may provide relief for the loss,

theft, destruction, mutilation, or defacement of an obligation identified by number and description.

(c)(1) An indemnity bond is required as a condition of relief if the

obligation is payable to bearer or assigned so as to become payable

to bearer and is not proven clearly to have been destroyed. The

Secretary may prescribe for the indemnity bond the form, amount,

and surety or security requirements.

(2) Relief for interest coupons claimed to have been attached to

an obligation may be provided only if the Secretary is satisfied that
Sec. 3126 CH. 31—PUBLIC DEBT 118

the coupons have not been paid and are destroyed or will not become the basis of a valid claim against the Government.

SEC. 3126. LOSSES AND RELIEF FROM LIABILITY RELATED TO REDEEMING SAVINGS BONDS AND NOTES.

(a) Under regulations prescribed by the Secretary of the Treasury, a loss resulting from a payment related to redeeming a savings bond or savings note shall be replaced out of the fund established by section 2 of the Government Losses in Shipment Act (40

U.S.C. 722). A Federal reserve bank, a paying agent allowed to

make payments in redeeming a bond or note, or an officer or employee of the Department of the Treasury is relieved from liability

to the United States Government for the loss when the Secretary

decides that the loss did not result from the fault or negligence of

the bank, paying agent, officer, or employee. The Secretary shall

relieve the bank, agent, officer, or employee from liability when the

Secretary decides that written notice of liability or potential liability has not been given to the bank, agent, officer, or employee by

the Government within 10 years from the date of the erroneous

payment. However, the Secretary may not relieve a paying agent

of an assumed unconditional liability to the Government.

(b) Section 3 of the Government Losses in Shipment Act (40

U.S.C. 723) (related to finality of decisions of the Secretary) applies

to a decision of the Secretary made under this section. A recovery

or repayment of a loss for which replacement is made out of the

fund shall be credited to the fund and is available for the purposes

for which the fund was established.

SEC. 3127. CREDIT TO OFFICERS, EMPLOYEES, AND AGENTS FOR STOLEN TREASURY NOTES.

When an officer, employee, or agent of the United States Government authorized to receive, redeem, or cancel Treasury notes receives or pays a note that was stolen and put in circulation after

it had been received or redeemed by an officer, employee, or agent

authorized to receive or redeem the note, the Secretary of the

Treasury may allow the officer, employee, or agent receiving or

paying the stolen note a credit for the amount of the note. The Secretary may allow the credit only if the Secretary is satisfied that

the note was received or paid in good faith and in exercising ordinary prudence.

SEC. 3128. PROOF OF DEATH TO SUPPORT PAYMENT.

A finding of death made by an officer or employee of the United

States Government authorized by law to make the finding is sufficient proof of death to allow credit in the accounts of a Federal reserve bank or accountable official of the Department of the Treasury in a case involving the transfer, exchange, reissue, redemption,

or payment of obligations of the Government, including obligations

guaranteed by the Government for which the Secretary of the

Treasury acts as transfer agent.

SEC. 3129. APPROPRIATION TO PAY EXPENSES.

(a) Amounts to pay necessary expenses (including rent) for an

issue of obligations authorized under this chapter are appropriated

to the Secretary of the Treasury. However, the amount appropriated under this section may not be more than—
119 Sec. 3130 CH. 31—PUBLIC DEBT

(1) .2 percent of the amount of bonds and notes authorized

under this chapter;

(2) .1 percent of the amount of certificates of indebtedness

authorized under section 3104 of this title; and

(3) .1 percent of the amount of certificates of indebtedness

authorized under the First Liberty Bond Act.

(b) An appropriation under this section is available for obligation

only through the end of the fiscal year after the fiscal year in which

the issue was made. During a period for which an appropriation for

a specified amount is made for expenses for which this section

makes an appropriation for an unspecified amount, only the appropriation for the specified amount is available for obligation.

SEC. 3130. ANNUAL PUBLIC DEBT REPORT.

(a) GENERAL RULE.—On or before June 1 of each calendar year

after 1993, the Secretary of the Treasury shall submit a report to

the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on—

(1) the Treasury’s public debt activities, and

(2) the operations of the Federal Financing Bank.

(b) REQUIRED INFORMATION ON PUBLIC DEBT ACTIVITIES.—Each

report submitted under subsection (a) shall include the following

information:

(1) A table showing the following information with respect to

the total public debt:

(A) The past levels of such debt and the projected levels

of such debt as of the close of the current fiscal year and

as of the close of the next 5 fiscal years under the most

recent current services baseline projection of the executive

branch.

(B) The past debt to GDP ratios and the projected debt

to GDP ratios as of the close of the current fiscal year and

as of the close of the next 5 fiscal years under such most

recent current services baseline projection.

(2) A table showing the following information with respect to

the net public debt:

(A) The past levels of such debt and the projected levels

of such debt as of the close of the current fiscal year and

as of the close of the next 5 fiscal years under the most

recent current services baseline projection of the executive

branch.

(B) The past debt to GDP ratios and the projected debt

to GDP ratios as of the close of the current fiscal year and

as of the close of the next 5 fiscal years under such most

recent current services baseline projection.

(C) The interest cost on such debt for prior fiscal years

and the projected interest cost on such debt for the current

fiscal year and for the next 5 fiscal years under such most

recent current services baseline projection.

(D) The interest cost to outlay ratios for prior fiscal

years and the projected interest cost to outlay ratios for

the current fiscal year and for the next 5 fiscal years

under such most recent current services baseline projection.
Sec. 3130 CH. 31—PUBLIC DEBT 120

(3) A table showing the maturity distribution of the net public debt as of the time the report is submitted and for prior

years, and an explanation of the overall financing strategy

used in determining the distribution of maturities when issuing public debt obligations, including a discussion of the projections and assumptions with respect to the structure of interest

rates for the current fiscal year and for the succeeding 5 fiscal

years.

(4) A table showing the following information as of the time

the report is submitted and for prior years:

(A) A description of the various categories of the holders

of public debt obligations.

(B) The portions of the total public debt held by each of

such categories.

(5) A table showing the relationship of federally assisted borrowing to total Federal borrowing as of the time the report is

submitted and for prior years.

(6) A table showing the annual principal and interest payments which would be required to amortize in equal annual

payments the level (as of the time the report is submitted) of

the net public debt over the longest remaining term to maturity of any obligation which is a part of such debt.

(c) REQUIRED INFORMATION ON FEDERAL FINANCING BANK.—Each

report submitted under subsection (a) shall include (but not be limited to) information on the financial operations of the Federal Financing Bank, including loan payments and prepayments, and on

the levels and categories of the lending activities of the Federal Financing Bank, for the current fiscal year and for prior fiscal years.

(d) RECOMMENDATIONS.—The Secretary of the Treasury may include in any report submitted under subsection (a) such recommendations to improve the issuance and sale of public debt obligations (and with respect to other matters) as he may deem advisable.

(e) DEFINITIONS.—For purposes of this section—

(1) CURRENT FISCAL YEAR.—The term ‘‘current fiscal year’’

means the fiscal year ending in the calendar year in which the

report is submitted.

(2) TOTAL PUBLIC DEBT.—The term ‘‘total public debt’’ means

the total amount of the obligations subject to the public debt

limit established in section 3101 of this title.

(3) NET PUBLIC DEBT.—The term ‘‘net public debt’’ means the

portion of the total public debt which is held by the public.

(4) DEBT TO GDP RATIO.—The term ‘‘debt to GDP ratio’’

means the percentage obtained by dividing the level of the

total public debt or net public debt, as the case may be, by the

gross domestic product.

(5) INTEREST COST TO OUTLAY RATIO.—The term ‘‘interest

cost to outlay ratio’’ means, with respect to any fiscal year, the

percentage obtained by dividing the interest cost for such fiscal

year on the net public debt by the total amount of Federal outlays for such fiscal year.

* * * * * * *
121 Sec. 3130 CH. 31—PUBLIC DEBT

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

3101 et seq. ................................ 31 C.F.R. 344, 355, 358

3101–3129 .................................. 31 C.F.R. 306, 357

3102 et seq. ................................ 31 C.F.R. 344, 356

3102–3104 .................................. 31 C.F.R. 306

3103 ............................................ 31 C.F.R. 342

3105 ............................................ 31 C.F.R. 315–317, 321, 330, 332, 352, 353

3107–3108 .................................. 31 C.F.R. 306

3111 ............................................ 31 C.F.R. 306

3121–3123 .................................. 31 C.F.R. 306

3121 ............................................ 17 C.F.R. 450; 31 C.F.R. 353

3122 ............................................ 31 C.F.R. 203, 214

3125 ............................................ 31 C.F.R. 306

3126 ............................................ 31 C.F.R. 321

3129 ............................................ 31 C.F.R. 306
122

TITLE 31—MONEY AND FINANCE

Subtitle III—Financial Management

* * * * * * *

CHAPTER 33—DEPOSITING, KEEPING, AND PAYING

MONEY

SUBCHAPTER I—DEPOSITS AND DEPOSITORIES

SEC. 3301. GENERAL DUTIES OF THE SECRETARY OF THE TREASURY.

(a) The Secretary of the Treasury shall—

(1) receive and keep public money;

(2) take receipts for money paid out by the Secretary;

(3) give receipts for money deposited in the Treasury;

(4) endorse warrants for receipts for money deposited in the

Treasury;

(5) submit the accounts of the Secretary to the Comptroller

General every 3 months, or more often if required by the

Comptroller General; and

(6) submit to inspection at any time by the Comptroller General of money in the possession of the Secretary.

(b) Except as provided in section 3326 of this title, an acknowledgment for money deposited in the Treasury is not valid if the

Secretary does not endorse a warrant as required by subsection

(a)(4) of this section.

SEC. 3302. CUSTODIANS OF MONEY.

(a) Except as provided by another law, an official or agent of the

United States Government having custody or possession of public

money shall keep the money safe without—

(1) lending the money;

(2) using the money;

(3) depositing the money in a bank; and

(4) exchanging the money for other amounts.

(b) Except as provided in section 3718(b) of this title, an official

or agent of the Government receiving money for the Government

from any source shall deposit the money in the Treasury as soon

as practicable without deduction for any charge or claim.

(c)(1) A person having custody or possession of public money, including a disbursing official having public money not for current

expenditure, shall deposit the money without delay in the Treasury

or with a depositary designated by the Secretary of the Treasury

under law. Except as provided in paragraph (2), money required to

be deposited pursuant to this subsection shall be deposited not

later than the third day after the custodian receives the money.

The Secretary or a depositary receiving a deposit shall issue dupli-
123 Sec. 3305 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

cate receipts for the money deposited. The original receipt is for the

Secretary and the duplicate is for the custodian.

(2) The Secretary of the Treasury may by regulation prescribe

that a person having custody or possession of money required by

this subsection to be deposited shall deposit such money during a

period of time that is greater or lesser than the period of time specified by the second sentence of paragraph (1).

(d) An official or agent not complying with subsection (b) of this

section may be removed from office. The official or agent may be

required to forfeit to the Government any part of the money held

by the official or agent and to which the official or agent may be

entitled.

(e) An official or agent of the Government having custody or possession of public money shall keep an accurate entry of each

amount of public money received, transferred, and paid.

(f) When authorized by the Secretary, an official or agent of the

Government having custody or possession of public money, or performing other fiscal agent services, may be allowed necessary expenses to collect, keep, transfer, and pay out public money and to

perform those services. However, money appropriated for those expenses may not be used to employ or pay officers and employees

of the Government.

SEC. 3303. DESIGNATION OF DEPOSITARIES.

(a) The Secretary of the Treasury designates depositaries of

money as provided in this section and under other law.

(b) When necessary to carry out the business of the United

States Government and under conditions the Secretary decides are

necessary, the Secretary may designate depositaries in foreign

countries and in territories and possessions of the United States to

receive deposits of public money. The Secretary shall give preference to United States financial institutions the Secretary decides

are safe and able to give the service required.

SEC. 3304. TRANSFERS OF PUBLIC MONEY FROM DEPOSITARIES.

The Secretary of the Treasury may transfer public money in the

possession of a depositary—

(1) to the Treasury; and

(2) if the Secretary believes the safety of the public money

and convenience require it, to another depositary.

SEC. 3305. AUDITS OF DEPOSITARIES.

The Secretary of the Treasury, or an officer, employee, or agent

designated by the Secretary, may audit a depositary of public

money. For uniformity and accuracy in accounts and safety of public money, an individual conducting an audit shall audit a depositary’s—

(1) books;

(2) accounts;

(3) returns; and

(4) public money on hand and the way the money is kept.
Sec. 3321 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 124

SUBCHAPTER II—PAYMENTS

SEC. 3321. DISBURSING AUTHORITY IN THE EXECUTIVE BRANCH.

(a) Except as provided in this section or another law, only officers

and employees of the Department of the Treasury designated by

the Secretary of the Treasury as disbursing officials may disburse

public money available for expenditure by an executive agency.

(b) For economy and efficiency, the Secretary may delegate the

authority to disburse public money to officers and employees of

other executive agencies.

(c) The head of each of the following executive agencies shall designate personnel of the agency as disbursing officials to disburse

public money available for expenditure by the agency:

(1) United States Marshal’s Office.

(2) The Department of Defense (except for disbursements for

departmental pay and expenses in the District of Columbia).

(d) On request of the Secretary and with the approval of the head

of an executive agency referred to in subsection (c) of this section,

facilities of the agency may be used to assist in disbursing public

money available for expenditure by another executive agency.

SEC. 3322. DISBURSING OFFICIALS.

(a) The Secretary of the Treasury shall transfer public money to

a disbursing official only by draft or warrant written on the Treasury. Except as provided in subsection (b) of this section, a disbursing official shall—

(1) deposit public money as required by section 3302 of this

title; and

(2) draw public money from the Treasury or a depositary

only—

(A) as necessary to make payments; and

(B) payable to persons to whom payment is to be made.

(b) In a place without a depositary, the Secretary, on deciding it

is essential to the public interest, may authorize specially in writing that public money be—

(1) deposited in any other public depositary; or

(2) kept in another manner under regulations the Secretary

decides are the safest and most effective in making a payment

to a public creditor easier.

(c) A disbursing official is not liable for an overpayment provided

under a United States Government bill of lading or transportation

request when the overpayment is caused by the—

(1) use of improper transportation rates or classifications; or

(2) failure to deduct the proper amount under—

(A) a land grant law; or

(B) an equalization or other agreement.

SEC. 3323. WARRANTS.

(a) Except as provided in section 3326 of this title, the Secretary

of the Treasury may pay out money only against a warrant. A warrant shall be—

(1) authorized by law;

(2) signed by the Secretary; and

(3) countersigned by the Comptroller General.
125 Sec. 3325 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

(b)(1) A disbursing official shall send to the Secretary with a warrant a certificate under section 3526 of this title, or a requisition

for an advance. The certificate or requisition shall state the appropriation to which the payment is to be charged.

(2) The Secretary shall return the certificate or requisition to the

Comptroller General with the date and amount endorsed on the

certificate or requisition.

(c) A requisition for the payment of money on an audited account

or for depositing money in the Treasury is not required.

(d) The Secretary and the Comptroller General shall charge to

the appropriate appropriation in their books any money paid by a

warrant.

SEC. 3324. ADVANCES.

(a) Except as provided in this section, a payment under a contract to provide a service or deliver an article for the United States

Government may not be more than the value of the service already

provided or the article already delivered.

(b) An advance of public money may be made only if it is authorized by—

(1) a specific appropriation or other law; or

(2) the President to be made to—

(A) a disbursing official if the President decides the advance is necessary to carry out—

(i) the duties of the official promptly and faithfully;

and

(ii) an obligation of the Government; or

(B) an individual serving in the armed forces at a distant station if the President decides the advance is necessary to disburse regularly pay and allowances.

(c) Before the Secretary of the Treasury acts on a requisition for

an advance, the Comptroller General shall act on the requisition

under section 3522 of this title. The Comptroller General does not

countersign a requisition for an advance.

(d) The head of an agency may pay in advance from appropriations available for the purpose—

(1) to the Secretary of the Army, charges for messages sent

by the Secretary of the Army for the head of the agency, including charges for—

(A) payment of tolls of commercial carriers;

(B) leasing facilities for sending messages; and

(C) installing and maintaining facilities for sending messages; and

(2) charges for a publication printed or recorded in any way

for the auditory or visual use of the agency.

SEC. 3325. VOUCHERS.

(a) A disbursing official in the executive branch of the United

States Government shall—

(1) disburse money only as provided by a voucher certified

by—

(A) the head of the executive agency concerned; or

(B) an officer or employee of the executive agency having

written authorization from the head of the agency to certify vouchers;
Sec. 3326 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 126

(2) examine a voucher if necessary to decide if it is—

(A) in proper form;

(B) certified and approved; and

(C) computed correctly on the facts certified; and

(3) except for the correctness of computations on a voucher,

be held accountable for carrying out clauses (1) and (2) of this

subsection.

(b) Subsection (a) of this section does not apply to disbursements

of a military department of the Department of Defense, except for

disbursements for departmental pay and expenses in the District

of Columbia.

(c) On request, the Secretary of the Treasury may provide to the

appropriate officer or employee of the United States Government a

list of persons receiving periodic payments from the Government.

When certified and in proper form, the list may be used as a voucher on which the Secretary may disburse money.

SEC. 3326. WAIVER OF REQUIREMENTS FOR WARRANTS AND ADVANCES.

(a) When the Secretary of the Treasury and the Comptroller General decide that, with sufficient safeguards, existing procedures

may be changed to simplify, improve, and economize the control

and accounting of public money, they may prescribe joint regulations for waiving any part of the requirements in effect on September 12, 1950, that—

(1) warrants be issued and countersigned for the receipt, retention, and disbursement of public money and trust funds;

and

(2) amounts be requisitioned and advanced to accountable officials.

(b) Regulations of the Secretary and the Comptroller General

may provide for the payment of vouchers by authorized disbursing

officials by checks drawn on the general fund of the Treasury. However, the regulations shall provide for appropriate action (including

suspension or withdrawal of authority to make payments) against

a delinquent disbursing official for any reason related to the official’s accounts.

SEC. 3327. GENERAL AUTHORITY TO ISSUE CHECKS AND OTHER

DRAFTS.

The Secretary of the Treasury may issue a check or other draft

on public money in the Treasury to pay an obligation of the United

States Government. When the Secretary decides it is convenient to

a public creditor and in the public interest, the Secretary may designate a depositary to issue a check or other draft on public money

held by the depositary to pay an obligation of the Government. As

directed by the Secretary, each depositary shall report to the Secretary on public money paid and received by the depositary.

SEC. 3328. PAYING CHECKS AND DRAFTS.

(a) TIME LIMIT ON TREASURY CHECKS.—

(1) IN GENERAL.—Except as provided in sections 3329 and

3330 of this title—

(A) the Secretary shall not be required to pay a Treasury

check issued on or after the effective date of this section
127 Sec. 3329 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

unless it is negotiated to a financial institution within 12

months after the date on which the check was issued; and

(B) the Secretary shall not be required to pay a Treasury

check issued before the effective date of this section unless

it is negotiated to a financial institution within 12 months

after such effective date.

(2) DEFERRAL PENDING SETTLEMENT.—Notwithstanding the

time limitations imposed by paragraph (1), if the Secretary is

on notice of a question of law or fact about whether a Treasury

check is properly payable when the check is presented for payment, the Secretary may defer payment on such check until

the Comptroller General settles the question.

(3) Nothing in this subsection shall be construed to affect the

underlying obligation of the United States, or any agency

thereof, for which a Treasury check was issued.

(b)(1) If a check issued by a disbursing official and drawn on a

designated depositary is not paid by the last day of the fiscal year

after the fiscal year in which the check was issued, the amount of

the check is—

(A) withdrawn from the account with the depositary; and

(B) deposited in the Treasury for credit to a consolidated account of the Treasury.

(2) A claim for the proceeds of an unpaid check under this subsection may be paid from a consolidated account by a check drawn

on the Treasury on settlement by the Comptroller General.

(c) A limitation imposed on a claim against the United States

Government under section 3702 of this title does not apply to an

unpaid check drawn on the Treasury or a designated depositary.

(d) With the approval of the Comptroller General, the Secretary

may prescribe regulations the Secretary decides are necessary to

carry out subsections (a)–(c) of this section.

(e)(1) The Secretary shall prescribe regulations on—

(A) enforcing the speedy presentation of Government drafts;

(B) paying drafts, including the place of payment; and

(C) paying drafts if presentment is not made as required.

(2) Regulations prescribed under paragraph (1) of this subsection

shall prevent, as far as may be practicable, Government drafts

from being used or placed in circulation as paper currency or a medium of exchange.

(f) AUTHORITY TO DECLINE PAYMENT.—Nothing in this section

limits the authority of the Secretary to decline payment of a Treasury check after first examination thereof at the Treasury.

SEC. 3329. WITHHOLDING CHECKS TO BE SENT TO FOREIGN COUNTRIES.

(a) The Secretary of the Treasury shall prohibit a check or warrant drawn on public money from being sent to a foreign country

from the United States or from a territory or possession of the

United States when the Secretary decides that postal, transportation, or banking facilities generally, or local conditions in the foreign country, do not reasonably ensure that the payee—

(1) will receive the check or warrant; and

(2) will be able to negotiate it for full value.

(b)(1) If a check or warrant is prohibited from being sent to a foreign country under subsection (a) of this section, the drawer shall
Sec. 3330 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 128

hold the check or warrant until the end of the calendar quarter

after the date of the check or warrant.

(2) The Secretary may release the check or warrant for delivery

during the calendar quarter after the date of the check or warrant

if the Secretary decides that conditions have changed to ensure

reasonably that the payee—

(A) will receive the check or warrant; and

(B) will be able to negotiate it for full value.

(3) Unless the Secretary otherwise directs, the drawer shall send

at the end of the calendar quarter after the date of the check or

warrant the—

(A) withheld check or warrant to the drawee; and

(B) report to the Secretary on—

(i) the name and address of the payee;

(ii) the date, number, and amount of the check or warrant; and

(iii) the account on which the check or warrant was

drawn.

(4) The drawee shall transfer the amount of a withheld check or

warrant from the account of the drawer to the special deposit account ‘‘Secretary of the Treasury, Proceeds of Withheld Foreign

Checks’’. The check or warrant shall be marked ‘‘Paid into Withheld Foreign Check Account’’. After that time, the drawee shall

send all withheld checks and warrants to the Comptroller General.

The Comptroller General shall credit the accounts of the drawer

and drawee.

(c) The Secretary may pay an amount deposited in the special account under subsection (b)(4) of this section with a check drawn on

the account when—

(1) a person claiming payment satisfies the Secretary of the

right to the amount of the check or warrant (or satisfies the

Secretary of Veterans Affairs if the claim represents a payment

under laws administered by the Secretary of Veterans Affairs);

and

(2) the Secretary is reasonably ensured that the person—

(A) will receive the check or warrant; and

(B) will be able to negotiate it for full value.

(d) This section and section 3330 of this title—

(1) apply to a check or warrant whose delivery may be withheld under Executive Order 8389;

(2) do not affect a requirement for a license for delivering

and paying a check in payment of a claim under subsection (c)

of this section when a license is required by law to authorize

delivery and payment; and

(3) do not affect a check or warrant issued for the payment

of pay or goods bought by the United States Government in a

foreign country.

SEC. 3330. PAYMENT OF DEPARTMENT OF VETERANS AFFAIRS

CHECKS FOR THE BENEFIT OF INDIVIDUALS IN FOREIGN

COUNTRIES.

(a)(1) A check is deemed to be issued for sending to a foreign

country and subject to this section and section 3329 of this title if

the check is—

(A) drawn on public money;
129 Sec. 3331 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

(B) for benefits under laws carried out by the Secretary of

Veterans Affairs; and

(C) to be sent to a person in the United States or a territory

or possession of the United States, and the person is legally responsible for the care of an individual in a foreign country.

(2) The Secretary of Veterans Affairs shall notify the Secretary

of the Treasury of each check described under paragraph (1) of this

subsection.

(3) The Secretary of Veterans Affairs may exempt a check from

paragraph (1) of this subsection if the application of paragraph (1)

would reduce, discontinue, or deny benefits for the care of a dependent of an individual in a foreign country.

(b) When the amount of checks (representing payments to an individual under laws administered by the Secretary of Veterans Affairs) transferred under section 3329(b)(4) of this title equals

$1,000, the amounts of additional checks (except checks under contracts of insurance) payable to the individual under those laws

shall be deposited in the Treasury as miscellaneous receipts. An

amount transferred under section 3329(b)(4) or deposited as miscellaneous receipts is deemed to be payment for all purposes to the

individual entitled to payment.

(c) If the payee of a check for pension, compensation, or emergency officers’ retirement pay under laws administered by the Secretary of Veterans Affairs dies while the amount of the check is in

the special deposit account, the amount is payable (subject to section 3329 of this title and this section) as follows:

(1) after the death of the veteran, to the surviving spouse,

or, if there is no surviving spouse, to children of the veteran

under 18 years of age at the time of the veteran’s death.

(2) after the death of the surviving spouse, to children of the

spouse under 18 years of age at the time of the spouse’s death.

(3) after the death of an apportionee of a part of the veteran’s pension, compensation, or emergency officers’ retirement

pay but before all of the apportioned amount is paid to the veteran, the apportioned amount not paid.

(4) in any other case, only to the extent necessary to reimburse a person for burial expenses.

(d)(1) A payment may be made under subsection (c) of this section only if a claim for payment is—

(A) filed with the Secretary of Veterans Affairs by the end

of the first year after the date of the death of the individual

entitled to payment; and

(B) completed by submitting the necessary evidence by the

6th month after the date the Secretary of Veterans Affairs requests the evidence.

(2) Payment shall include only amounts due at the time of death

under ratings or decisions existing at the time of the death.

SEC. 3331. SUBSTITUTE CHECKS.

(a) In this section, ‘‘original check’’—

(1) means an order for the payment of money—

(A) payable on demand;

(B) that does not bear interest;
Sec. 3332 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 130

(C) drawn by an authorized disbursing official or agent

of the United States Government; and

(D) the amount of which is deposited with the Treasury

or another account available for payment; and

(2) does not include coins and currency of the Government.

(b) When the Secretary of the Treasury is satisfied that an original check is lost, stolen, destroyed in any part, or is so defaced that

the value to the owner or holder is impaired, the Secretary may

issue a substitute check to the owner or holder of the original

check. Except as provided in subsection (c) of this section, the substitute check is payable from the amount available to pay the original check.

(c) When the Secretary is satisfied that an original check drawn

on a depositary in a foreign country or a territory or possession of

the United States is lost, stolen, destroyed in part, or is so defaced

that its value to the owner or holder is impaired, the drawer of the

original check (or another official designated by the Secretary with

the approval of the head of the agency on whose behalf the original

check was issued) may issue to the owner or holder of the check

a substitute check. The drawer or official shall issue the substitute

check by the last day of the fiscal year after the fiscal year in

which the original check was issued—

(1) using the current date; and

(2) drawn on the account of the drawer of the original check

or another account available for payment of the substitute.

(d) A substitute check issued under this section—

(1) may be paid only if the original check has not been paid;

(2) shall include information necessary to identify the original check;

(3) that is drawn on the Treasury—

(A) is deemed to be an original check; and

(B) is paid under the same conditions as the original

check; and

(4) does not relieve a disbursing or certifying official from liability to the Government for payment resulting from erroneously issuing the original check.

(e) Before issuing a substitute check under this section, the Secretary may require the owner or holder of the original check to

agree to indemnify the Government with security in the form and

amount the Secretary decides is necessary.

(f) Under conditions the Secretary may prescribe, the Secretary

may delegate duties and powers of the Secretary under this section

to the head of an agency. Consistent with a delegation from the

Secretary under this subsection, the head of an agency may delegate those duties and powers to an officer or employee of the agency.

SEC. 3332. REQUIRED DIRECT DEPOSIT.

(a)(1) Notwithstanding any other provision of law, all Federal

wage, salary, and retirement payments shall be paid to recipients

of such payments by electronic funds transfer, unless another

method has been determined by the Secretary of the Treasury to

be appropriate.
131 Sec. 3334 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

(2) Each recipient of Federal wage, salary, or retirement payments shall designate one or more financial institutions or other

authorized payment agents and provide the payment certifying or

authorizing agency information necessary for the recipient to receive electronic funds transfer payments through each institution

so designated.

(b)(1) The head of each agency shall waive the requirements of

subsection (a) of this section for a recipient of Federal wage, salary,

or retirement payments authorized or certified by the agency upon

written request by such recipient.

(2) Federal wage, salary, or retirement payments shall be paid to

any recipient granted a waiver under paragraph (1) of this subsection by any method determined appropriate by the Secretary of

the Treasury.

(c)(1) The Secretary of the Treasury may waive the requirements

of subsection (a) of this section for any group of recipients upon request by the head of an agency under standards prescribed by the

Secretary of the Treasury.

(2) Federal wage, salary, or retirement payments shall be paid to

any member of a group granted a waiver under paragraph (1) of

this subsection by any method determined appropriate by the Secretary of the Treasury.

(d) This section shall apply only to recipients of Federal wage or

salary payments who begin to receive such payments on or after

January 1, 1995, and recipients of Federal retirement payments

who begin to receive such payments on or after January 1, 1995.

(e) The crediting of the amount of a payment to the appropriate

account on the books of a financial institution or other authorized

payment agent designated by a payment recipient under this section shall constitute a full acquittance to the United States for the

amount of the payment.

SEC. 3333. RELIEF FOR PAYMENTS MADE WITHOUT NEGLIGENCE.

(a)(1) The Secretary of the Treasury is not liable for a payment

made by the Secretary or depositary in due course and without

negligence, of a—

(A) check, draft, or warrant drawn on the Treasury or the

depositary; and

(B) debt obligation guaranteed or assumed by the United

States Government.

(2) The Comptroller General shall credit the accounts of the

Treasury or the depositary for the payment.

(b) This section does not relieve another individual from civil or

criminal liability for a check, draft, warrant, or debt obligation of

the Government.

SEC. 3334. CANCELLATION AND PROCEEDS DISTRIBUTION OF TREASURY CHECKS.

(a) IN GENERAL.—(1) The Secretary shall provide monthly to

each agency that authorizes the issuance of Treasury checks a list

of those checks issued for such agency on or after such effective

date that have not been paid and have become more than 12

months old during the preceding month, beginning with the fourteenth month following the effective date of this section.
Sec. 3335 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 132

(2) Such checks shall be canceled by the Secretary and the proceeds thereof shall be returned to the agency concerned and credited to the appropriation or fund account initially charged for the

payment.

(b) CHECKS ISSUED BEFORE EFFECTIVE DATE.—(1) Not later than

18 months after the effective date of this section, the Secretary

shall identify and cancel all Treasury checks issued before such effective date that have not been paid in accordance with section

3328 of this title.

(2) The proceeds from checks canceled pursuant to paragraph (1)

shall be applied to eliminate the balances in accounts that represent uncollectible accounts receivable and other costs associated

with the payment of checks and check claims by the Department

of the Treasury on behalf of all payment certifying agencies. Any

remaining proceeds shall be deposited to the miscellaneous receipts

of the Treasury.

(c) NO EFFECT ON UNDERLYING OBLIGATION.—Nothing in this

section shall be construed to affect the underlying obligation of the

United States, or any agency thereof, for which a Treasury check

was issued.

SEC. 3335. TIMELY DISBURSEMENT OF FEDERAL FUNDS.

(a) Each head of an executive agency (other than the Tennessee

Valley Authority) shall, under such regulations as the Secretary of

the Treasury shall prescribe, provide for the timely disbursement

of Federal funds through cash, checks, electronic funds transfer, or

any other means identified by the Secretary.

(b) The Secretary may collect from any executive agency which

does not comply with subsection (a) a charge in an amount the Secretary determines to be the cost to the general fund of the Treasury

caused by such noncompliance.

(c) The amounts of charges collected from an executive agency

under this section shall be deposited in the Treasury and credited

as miscellaneous receipts.

(d) Any charge assessed by the Secretary under this section, to

the maximum extent practicable—

(1) shall be paid out of appropriations available for executive

agency operations; and

(2) shall not be paid from amounts available for funding programs of an executive agency.

SUBCHAPTER III—MISCELLANEOUS

SEC. 3341. SALE OF GOVERNMENT WARRANTS, CHECKS, DRAFTS, AND

OBLIGATIONS.

(a) A disbursing official of the United States Government may

sell a Government warrant, check, draft, or obligation not the property of the official at a premium, or dispose of the proceeds of the

warrant, check, draft, or obligation, only if the official deposits the

premium and the proceeds in the Treasury or with a depositary for

the credit of the Government.

(b) A disbursing official violating subsection (a) of this section

shall be dismissed immediately.

SEC. 3342. CHECK CASHING AND EXCHANGE TRANSACTIONS.

(a) A disbursing official of the United States Government may—
133 Sec. 3343 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY

(1) cash and negotiate negotiable instruments payable in

United States currency or currency of a foreign country;

(2) exchange United States currency, coins, and negotiable

instruments and currency, coins, and negotiable instruments of

foreign countries; and

(3) cash checks drawn on the Treasury to accommodate United States citizens in a foreign country, but only if—

(A) satisfactory banking facilities are not available in the

foreign country; and

(B) a check is presented by the payee who is a United

States citizen.

(b) A disbursing official may act under subsection (a)(1) and (2)

of this section only for—

(1) an official purpose;

(2) personnel of the Government;

(3) a veteran hospitalized or living in an institution operated

by an agency;

(4) a contractor, or personnel of a contractor, carrying out a

Government project; and

(5) personnel of an authorized agency not part of the Government that operates with an agency of the Government.

(c)(1) An amount held by the disbursing official that is available

for expenditure may be used to carry out subsection (a) of this section with the approval of the head of the agency having jurisdiction

over the amount.

(2) The head of an agency having jurisdiction over a disbursing

official may offset, within the same fiscal year, a deficiency resulting from a transaction under subsection (a) of this section with a

gain from a transaction under subsection (a). A gain in the account

of a disbursing official not used to offset deficiencies under subsection (a) shall be deposited in the Treasury as miscellaneous receipts.

(3) Amounts necessary to adjust for deficiencies in the account of

a disbursing official because of transactions under subsection (a) of

this section are authorized to be appropriated.

(d) The Secretary of the Treasury and, with the approval of the

Secretary, the head of an agency having jurisdiction over a disbursing official, may issue regulations to carry out this section. However, under conditions the Secretary decides are necessary, the Secretary may delegate to the head of an agency the authority to issue

regulations applying to a disbursing official that is an officer or employee of the agency.

SEC. 3343. CHECK FORGERY INSURANCE FUND.

(a) The Department of the Treasury has a special deposit revolving fund, the ‘‘Check Forgery Insurance Fund’’. Amounts may be

appropriated to the Fund. The Fund consists of amounts—

(1) appropriated to the Fund; and

(2) received under subsection (d) of this section.

(b) The Secretary of the Treasury shall pay from the Fund to a

payee or special endorsee of a check drawn on the Treasury or a

depositary designated by the Secretary the amount of the check

without interest if—
Sec. 3343 CH. 33—DEPOSITING, KEEPING, AND PAYING MONEY 134

(1) the check was lost or stolen without the fault of the payee

or a holder that is a special endorsee and whose endorsement

is necessary for further negotiation;

(2) the check was negotiated later and paid by the Secretary

or a depositary on a forged endorsement of the payee’s or special endorsee’s name;

(3) the payee or special endorsee has not participated in any

part of the proceeds of the negotiation or payment; and

(4) recovery from the forger, a transferee, or a party on the

check after the forgery has been or may be delayed or unsuccessful.

(c) Notwithstanding section 1306 of this title, a check drawn on

a designated depositary may be paid in the currency of a foreign

country when the appropriate accountable official authorizes payment in that currency.

(d) The Secretary shall deposit immediately to the credit of the

Fund an amount recovered from a forger or a transferee or party

on the check. However, currency of a foreign country recovered because of a forged check drawn on a designated depositary shall be

credited to the Fund or to the foreign currency fund that was

charged when payment was made under subsection (b) of this section to the payee or special endorsee.

(e) This section does not relieve—

(1) a forger from civil or criminal liability; or

(2) a transferee or party on a check after the forgery from

liability—

(A) on the express or implied warranty of prior endorsements of the transferee or party; or

(B) to refund amounts to the Secretary.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

3301 ............................................ 31 C.F.R. 206

TFM, Volume 1, Part 6, Chapter 8000 and Chapter 9000, see appendix V

3302 ............................................ 31 C.F.R. 206

OMB: Circular A–50, see appendix IV

TFM, Volume 1, Part 6, Chapter 8000, see appendix V

3321 ............................................ 31 C.F.R. 206

TFM, Volume 1, Part 2, Chapter 3100, see appendix V

TFM, Volume 1, Part 4, Chapter 1000, Chapter 1100, Chapter 3000, Chapter 4500, see

appendix V

3322 ............................................ OMB: Bulletin 94–09, see appendix IV

TFM, Volume 1, Part 4, Chapter 4500, see appendix V

3325 ............................................ TFM, Volume 1, Part 4, Chapter 1100, see appendix V

TFM, Volume 1, Part 6, Chapter 6000, see appendix V

3326 ............................................ TFM, Volume 1, Part 6, Chapter 6000, see appendix V

3327 ............................................ 31 C.F.R. 206

TFM, Volume 1, Part 4, Chapter 4500, see appendix V

3328 ............................................ 31 C.F.R. 206, 240, 245

3331 ............................................ 31 C.F.R. 240, 245, 248

3332 ............................................ 31 C.F.R. 206

3335 ............................................ 31 C.F.R. 205, 206

OMB: Bulletin 94–09, see appendix IV

TFM, Volume 1, Part 4, Chapter 4500, see appendix V

3343 ............................................ 31 C.F.R. 235, 240
135

5The Comptroller General also prescribes internal control standards. The ‘‘Federal Managers’

Financial Integrity Act of 1982,’’ PL 97–255, Section 2(d)(1)(A) states that ‘‘. . . internal accounting and administrative controls of each executive agency shall be established in accordance

with standards prescribed by the Comptroller General . . .’’

TITLE 31—MONEY AND FINANCE

Subtitle III—Financial Management

* * * * * * *

CHAPTER 35—ACCOUNTING AND COLLECTION

SUBCHAPTER I—GENERAL

SEC. 3501. DEFINITION

In this chapter, ‘‘executive agency’’ does not include (except in

section 3513 of this title) a corporation, agency, or instrumentality

subject to chapter 91 of this title.

SUBCHAPTER II—ACCOUNTING REQUIREMENTS, SYSTEMS, AND

INFORMATION

SEC. 3511. PRESCRIBING ACCOUNTING REQUIREMENTS AND DEVELOPING ACCOUNTING SYSTEMS.

(a) The Comptroller General shall prescribe the accounting principles, standards, and requirements that the head of each executive

agency shall observe.5 Before prescribing the principles, standards,

and requirements, the Comptroller General shall consult with the

Secretary of the Treasury and the President on their accounting,

financial reporting, and budgetary needs, and shall consider the

needs of the heads of the other executive agencies.

(b) Requirements prescribed under subsection (a) of this section

shall—

(1) provide for suitable integration between the accounting

process of each executive agency and the accounting of the Department of the Treasury;

(2) allow the head of each agency to carry out section 3512

of this title; and

(3) provide a method of—

(A) integrated accounting for the United States Government;

(B) complete disclosure of the results of the financial operations of each agency and the Government; and

(C) financial information and control the President and

Congress require to carry out their responsibilities.

(c) Consistent with subsections (a) and (b) of this section—

(1) the authority of the Comptroller General continues under

section 205(b) of the Federal Property and Administrative

Services Act of 1949 (40 U.S.C. 486(b)); and
Sec. 3512 CH. 35—ACCOUNTING AND COLLECTION 136

(2) the Comptroller General may prescribe the forms, systems, and procedures that the judicial branch of the Government (except the Supreme Court) shall observe.

(d) The Comptroller General, the Secretary, and the President

shall conduct a continuous program for improving accounting and

financial reporting in the Government.

SEC. 3512. EXECUTIVE AGENCY ACCOUNTING AND OTHER FINANCIAL

MANAGEMENT REPORTS AND PLANS.

(a)(1) The Director of the Office of Management and Budget shall

prepare and submit to the appropriate committees of the Congress

a financial management status report and a governmentwide 5-

year financial management plan.

(2) A financial management status report under this subsection

shall include—

(A) a description and analysis of the status of financial management in the executive branch;

(B) a summary of the most recently completed financial

statements—

(i) of Federal agencies under section 3515 of this title;

and

(ii) of Government corporations;

(C) a summary of the most recently completed financial

statement audits and reports—

(i) of Federal agencies under section 3521(e) and (f) of

this title; and

(ii) of Government corporations;

(D) a summary of reports on internal accounting and administrative control systems submitted to the President and the

Congress under the amendments made by the Federal Managers’ Financial Integrity Act of 1982 (Public Law 97–255); and

(E) any other information the Director considers appropriate

to fully inform the Congress regarding the financial management of the Federal Government.

(3)(A) A governmentwide 5-year financial management plan

under this subsection shall describe the activities the Director, the

Deputy Director for Management, the Controller of the Office of

Federal Financial Management, and agency Chief Financial Officers shall conduct over the next 5 fiscal years to improve the financial management of the Federal Government.

(B) Each governmentwide 5-year financial management plan prepared under this subsection shall—

(i) describe the existing financial management structure and

any changes needed to establish an integrated financial management system;

(ii) be consistent with applicable accounting principles,

standards, and requirements;

(iii) provide a strategy for developing and integrating individual agency accounting, financial information, and other financial management systems to ensure adequacy, consistency,

and timeliness of financial information;

(iv) identify and make proposals to eliminate duplicative and

unnecessary systems, including encouraging agencies to share

systems which have sufficient capacity to perform the functions

needed;
137 Sec. 3512 CH. 35—ACCOUNTING AND COLLECTION

(v) identify projects to bring existing systems into compliance

with the applicable standards and requirements;

(vi) contain milestones for equipment acquisitions and other

actions necessary to implement the 5-year plan consistent with

the requirements of this section;

(vii) identify financial management personnel needs and actions to ensure those needs are met;

(viii) include a plan for ensuring the annual audit of financial statements of executive agencies pursuant to section

3521(h) of this title; and

(ix) estimate the costs of implementing the governmentwide

5-year plan.

(4)(A) Not later than 15 months after the date of the enactment

of this subsection, the Director of the Office of Management and

Budget shall submit the first financial management status report

and governmentwide 5-year financial management plan under this

subsection to the appropriate committees of the Congress.

(B)(i) Not later than January 31 of each year thereafter, the Director of the Office of Management and Budget shall submit to the

appropriate committees of the Congress a financial management

status report and a revised governmentwide 5-year financial management plan to cover the succeeding 5 fiscal years, including a report on the accomplishments of the executive branch in implementing the plan during the preceding fiscal year.

(ii) The Director shall include with each revised governmentwide

5-year financial management plan a description of any substantive

changes in the financial statement audit plan required by paragraph (3)(B)(viii), progress made by executive agencies in implementing the audit plan, and any improvements in Federal Government financial management related to preparation and audit of financial statements of executive agencies.

(5) Not later than 30 days after receiving each annual report

under section 902(a)(6) of this title, the Director shall transmit to

the Chairman of the Committee on Government Operations of the

House of Representatives and the Chairman of the Committee on

Governmental Affairs of the Senate a final copy of that report and

any comments on the report by the Director.

(b) The head of each executive agency shall establish and maintain systems of accounting and internal controls that provide—

(1) complete disclosure of the financial results of the activities of the agency;

(2) adequate financial information the agency needs for management purposes;

(3) effective control over, and accountability for, assets for

which the agency is responsible, including internal audit;

(4) reliable accounting results that will be the basis for—

(A) preparing and supporting the budget requests of the

agency;

(B) controlling the carrying out of the agency budget;

and

(C) providing financial information the President requires under section 1104(e) of this title; and
Sec. 3512 CH. 35—ACCOUNTING AND COLLECTION 138

(5) suitable integration of the accounting of the agency with

the central accounting and reporting responsibilities of the Secretary of the Treasury under section 3513 of this title.

(c)(1) To ensure compliance with subsection (b)(3) of this section

and consistent with standards the Comptroller General prescribes,

the head of each executive agency shall establish internal accounting and administrative controls that reasonably ensure that—

(A) obligations and costs comply with applicable law;

(B) all assets are safeguarded against waste, loss, unauthorized use, and misappropriation; and

(C) revenues and expenditures applicable to agency operations are recorded and accounted for properly so that accounts

and reliable financial and statistical reports may be prepared

and accountability of the assets may be maintained.

(2) Standards the Comptroller General prescribes under this subsection shall include standards to ensure the prompt resolution of

all audit findings.

(d)(1) In consultation with the Comptroller General, the Director

of the Office of Management and Budget—

(A) shall establish by December 31, 1982, guidelines that the

head of each executive agency shall follow in evaluating the internal accounting and administrative control systems of the

agency to decide whether the systems comply with subsection

(c) of this section; and

(B) may change a guideline when considered necessary.

(2) By December 31 of each year (beginning in 1983), the head

of each executive agency, based on an evaluation conducted according to guidelines prescribed under paragraph (1) of this subsection,

shall prepare a statement on whether the systems of the agency

comply with subsection (c) of this section, including—

(A) if the head of an executive agency decides the systems

do not comply with subsection (c) of this section, a report identifying any material weakness in the systems and describing

the plans and schedule for correcting the weakness; and

(B) a separate report on whether the accounting system of

the agency conforms to the principles, standards, and requirements the Comptroller General prescribes under section

3511(a) of this title.

(3) The head of each executive agency shall sign the statement

and reports required by this subsection and submit them to the

President and Congress. The statement and reports are available

to the public, except that information shall be deleted from a statement or report before it is made available if the information specifically is—

(A) prohibited from disclosure by law; or

(B) required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs.

(e) To assist in preparing a cost-based budget under section

1108(b) of this title and consistent with principles and standards

the Comptroller General prescribes, the head of each executive

agency shall maintain the accounts of the agency on an accrual

basis to show the resources, liabilities, and costs of operations of

the agency. An accounting system under this subsection shall include monetary property accounting records.
139 Sec. 3515 CH. 35—ACCOUNTING AND COLLECTION

(f) The Comptroller General shall—

(1) cooperate with the head of each executive agency in developing an accounting system for the agency; and

(2) approve the system when the Comptroller General considers it to be adequate and in conformity with the principles,

standards, and requirements prescribed under section 3511 of

this title.

(g) The Comptroller General shall review the accounting systems

of each executive agency. The results of a review shall be available

to the head of the executive agency, the Secretary, and the President. The Comptroller General shall report to Congress on a review

when the Comptroller General considers it proper.

SEC. 3513. FINANCIAL REPORTING AND ACCOUNTING SYSTEM.

(a) The Secretary of the Treasury shall prepare reports that will

inform the President, Congress, and the public on the financial operations of the United States Government. The reports shall include financial information the President requires. The head of

each executive agency shall give the Secretary reports and information on the financial conditions and operations of the agency the

Secretary requires to prepare the reports.

(b) The Secretary may—

(1) establish facilities necessary to prepare the reports; and

(2) reorganize the accounting functions and procedures and

financial reports of the Department of the Treasury to develop

an effective and coordinated system of accounting and financial

reporting in the Department that will integrate the accounting

results for the Department and be the operating center for consolidating accounting results of other executive agencies with

accounting results of the Department.

(c) The Comptroller General shall—

(1) cooperate with the Secretary in developing and establishing the reporting and accounting system under this section;

and

(2) approve the system when the Comptroller General considers it to be adequate and in conformity with the principles,

standards, and requirements prescribed under section 3511 of

this title.

SEC. 3514. DISCONTINUING CERTAIN ACCOUNTS MAINTAINED BY THE

COMPTROLLER GENERAL.

The Comptroller General may discontinue an agency appropriation, expenditure, limitation, receipt, or personal ledger account

maintained by the Comptroller General when the Comptroller General believes that the accounting system and internal controls of

the agency will allow the Comptroller General to carry out the

functions related to the account.

SEC. 3515. FINANCIAL STATEMENTS OF AGENCIES.

(a) Not later than March 1 of 1997 and each year thereafter, the

head of each executive agency identified in section 901(b) of this

title shall prepare and submit to the Director of the Office of Management and Budget an audited financial statement for the preceding fiscal year, covering all accounts and associated activities of

each office, bureau, and activity of the agency.
Sec. 3521 CH. 35—ACCOUNTING AND COLLECTION 140

(b) Each audited financial statement of an executive agency

under this section shall reflect—

(1) the overall financial position of the offices, bureaus, and

activities covered by the statement, including assets and liabilities thereof; and

(2) results of operations of those offices, bureaus, and activities.

(c) The Director of the Office of Management and Budget shall

identify components of executive agencies that shall be required to

have audited financial statements meeting the requirements of

subsection (b).

(d) The Director of the Office of Management and Budget shall

prescribe the form and content of the financial statements of executive agencies under this section, consistent with applicable accounting and financial reporting principles, standards, and requirements.

(e) The Director of the Office of Management and Budget may

waive the application of all or part of subsection (a) for financial

statements required for fiscal years 1996 and 1997.

(f) Not later than March 1 of 1995 and 1996, the head of each

executive agency identified in section 901(b) of this title and designated by the Director of the Office of Management and Budget

shall prepare and submit to the Director of the Office of Management and Budget an audited financial statement for the preceding

fiscal year, covering all accounts and associated activities of each

office, bureau, and activity of the agency.

(g) Not later than March 31 of 1995 and 1996, for executive agencies not designated by the Director of the Office of Management

and Budget under subsection (f), the head of each executive agency

identified in section 901(b) of this title shall prepare and submit to

the Director of the Office of Management and Budget a financial

statement for the preceding fiscal year, covering—

(1) each revolving fund and trust fund of the agency; and

(2) to the extent practicable, the accounts of each office, bureau, and activity of the agency which performed substantial

commercial functions during the preceding fiscal year.

(h) For purposes of subsection (g), the term ‘‘commercial functions’’ includes buying and leasing of real estate, providing insurance, making loans and loan guarantees, and other credit programs

and any activity involving the provision of a service or thing for

which a fee, royalty, rent, or other charge is imposed by an agency

for services and things of value it provides.

SUBCHAPTER III—AUDITING AND SETTLING ACCOUNTS

SEC. 3521. AUDITS BY AGENCIES.

(a) Each account of an agency shall be audited administratively

before being submitted to the Comptroller General. The head of

each agency shall prescribe regulations for conducting the audit

and designate a place at which the audit is to be conducted. However, a disbursing official of an executive agency may not administratively audit vouchers for which the official is responsible. With

the consent of the Comptroller General, the head of the agency may

waive any part of an audit.
141 Sec. 3521 CH. 35—ACCOUNTING AND COLLECTION

(b) The head of an agency may prescribe a statistical sampling

procedure to audit vouchers of the agency when the head of the

agency decides economies will result from using the procedure. The

Comptroller General—

(1) may prescribe the maximum amount of a voucher that

may be audited under this subsection; and

(2) in reviewing the accounting system of the agency, shall

evaluate the adequacy and effectiveness of the procedure.

(c) A disbursing or certifying official acting in good faith under

subsection (b) of this section is not liable for a payment or certification of a voucher not audited specifically because of the procedure prescribed under subsection (b) if the official and the head of

the agency carry out diligently collection action the Comptroller

General prescribes.

(d) Subsections (b) and (c) of this section do not—

(1) affect the liability, or authorize the relief, of a payee, beneficiary, or recipient of an illegal, improper, or incorrect payment; or

(2) relieve a disbursing or certifying official, the head of an

agency, or the Comptroller General of responsibility in carrying

out collection action against a payee, beneficiary, or recipient.

(e) Each financial statement prepared under section 3515 by an

agency shall be audited in accordance with applicable generally accepted government auditing standards—

(1) in the case of an agency having an Inspector General appointed under the Inspector General Act of 1978 (5 U.S.C.

App.), by the Inspector General or by an independent external

auditor, as determined by the Inspector General of the agency;

and

(2) in any other case, by an independent external auditor, as

determined by the head of the agency.

(f)(1) For each audited financial statement required under subsections (a) and (f) of section 3515 of this title, the person who audits the statement for purpose of subsection (e) of this section shall

submit a report on the audit to the head of the agency. A report

under this subsection shall be prepared in accordance with generally accepted government auditing standards.

(2) Not later than June 30 following the fiscal year for which a

financial statement is submitted under subsection (g) of section

3515 of this title, the person who audits the statement for purpose

of subsection (e) of this section shall submit a report on the audit

to the head of the agency. A report under this subsection shall be

prepared in accordance with generally accepted government auditing standards.

(g) The Comptroller General of the United States—

(1) may review any audit of a financial statement conducted

under this subsection by an Inspector General or an external

auditor;

(2) shall report to the Congress, the Director of the Office of

Management and Budget, and the head of the agency which

prepared the statement, regarding the results of the review

and make any recommendation the Comptroller General considers appropriate; and
Sec. 3522 CH. 35—ACCOUNTING AND COLLECTION 142

(3) may audit a financial statement prepared under section

3515 of this title at the discretion of the Comptroller General

or at the request of a committee of the Congress.

An audit the Comptroller General performs under this subsection

shall be in lieu of the audit otherwise required by subsection (e) of

this section. Prior to performing such audit, the Comptroller General shall consult with the Inspector General of the agency which

prepared the statement.

(h) Each financial statement prepared by an executive agency for

a fiscal year after fiscal year 1991 shall be audited in accordance

with this section and the plan required by section

3512(a)(3)(B)(viii) of this title.

SEC. 3522. MAKING AND SUBMITTING ACCOUNTS.

(a)(1) Unless the Comptroller General decides the public interest

requires that an account be made more frequently, each disbursing

official shall make a quarterly account. An official or agent of the

United States Government receiving public money not authorized

to be kept as pay of the official or agent shall make a monthly account of the money.

(2) An official or agent of the Government receiving public money

shall make an account of public money received by the official or

agent according to the appropriation from which the money was advanced.

(b)(1) A monthly account shall be submitted to the appropriate

official in the District of Columbia by the 10th day after the end

of the month covered by the account. The official shall submit the

account to the Comptroller General by the 20th day after receiving

the account.

(2) An account (except a monthly account) shall be submitted to

the appropriate official in the District of Columbia by the 20th day

after the end of the period covered by the account. The official shall

submit the account to the Comptroller General by the 60th day

after receiving the account.

(3) Notwithstanding paragraphs (1) and (2) of this subsection, an

account of the armed forces shall be submitted to the Comptroller

General by the 60th day after the account is received. However,

during a war or national emergency and for 18 months after the

war or emergency ends, an account shall be submitted to the

Comptroller General by the 90th day after the account is received.

(4) Notwithstanding paragraphs (1) and (2) of this subsection, an

account of a disbursing official of the Department of Justice shall

be submitted to the Comptroller General by the 80th day after the

account is received.

(c) An official shall give evidence of compliance with subsection

(b) of this section if an account is not received within a reasonable

time after the time required by subsection (b).

(d) The head of an agency may require other returns or reports

about the agency that the public interest requires.

(e)(1) The Comptroller General shall disapprove a requisition for

an advance of money if an account from which the advance is to

be made is not submitted to the Comptroller General within the

time required by subsection (b) of this section. The Comptroller

General may disapprove the request for another reason related to
143 Sec. 3524 CH. 35—ACCOUNTING AND COLLECTION

the condition of an account of the official for whom the advance is

requested. However, the Secretary of the Treasury may overrule

the decision of the Comptroller General on the sufficiency of the

other reasons.

(2) The Secretary may extend the time requirements of subsection (b)(1) and (2) of this section for submitting an account to

the proper official in the District of Columbia or waive a condition

of delinquency only when there is, or is likely to be, a manifest

physical difficulty in complying with those requirements. If an account is not submitted to the Comptroller General on time under

subsection (b), an order of the President or, if the President is ill

or not in the District of Columbia, the Secretary is required to authorize an advance.

SEC. 3523. GENERAL AUDIT AUTHORITY OF THE COMPTROLLER GENERAL.

(a) Except as specifically provided by law, the Comptroller General shall audit the financial transactions of each agency. In deciding on auditing procedures and the extent to which records are to

be inspected, the Comptroller General shall consider generally accepted auditing principles, including the effectiveness of accounting

organizations and systems, internal audit and control, and related

administrative practices of each agency.

(b) The Comptroller General shall audit the Architect of the Capitol at times the Comptroller General considers appropriate. Section 716 of this title applies to the Architect in conducting the

audit. The Comptroller General shall report the results of the audit

to Congress. Each report shall be printed as a Senate document.

(c)(1) When the Comptroller General decides an audit shall be

conducted at a place at which the records of an executive agency

or the Architect of the Capitol are usually kept, the Comptroller

General may require the head of the agency or the Architect to

keep any part of an account of an accountable official or of a record

required to be submitted to the Comptroller General. The Comptroller General may require records be kept under conditions and

for a period of not more than 10 years specified by the Comptroller

General. However, the Comptroller General and the head of the

agency or the Architect may agree on a longer period.

(2) The Comptroller General and the head of an agency in the

legislative or judicial branch of the United States Government (except the Architect) may agree to apply this subsection to the agency.

SEC. 3524. AUDITING EXPENDITURES APPROVED WITHOUT VOUCHERS.

(a)(1) The Comptroller General may audit expenditures, accounted for only on the approval, authorization, or certificate of the

President or an official of an executive agency, to decide if the expenditure was authorized by law and made. Records and related information shall be made available to the Comptroller General in

conducting the audit.

(2) The Comptroller General may release the results of the audit

or disclose related information only to the President or head of the

agency, or, if there is an unresolved discrepancy, to the Committee

on Governmental Affairs of the Senate, the Committee on Govern-
Sec. 3525 CH. 35—ACCOUNTING AND COLLECTION 144

ment Operations of the House of Representatives, and the committees of Congress having legislative or appropriation oversight of the

expenditure.

(b) Before December 1 of each year, the Director of the Office of

Management and Budget shall submit a report listing each account

that may be subject to this section to the Committees on the Budget and Appropriations of both Houses of Congress, the Committee

on Governmental Affairs, and to the Committee on Government

Operations, and to the Comptroller General.

(c) The President may exempt from this section a financial transaction about sensitive foreign intelligence or foreign counter-intelligence activities or sensitive law enforcement investigations if an

audit would expose the identifying details of an active investigation

or endanger investigative or domestic intelligence sources involved

in the investigation. The exemption may apply to a class or category of financial transactions.

(d) This section does not—

(1) apply to expenditures under section 102, 103, 105(d)(1),

(3), or (5), or 106(b)(2) or (3) of title 3; or

(2) affect authority under section 8(b) of the Central Intelligence Agency Act of 1949 (50 U.S.C. 403j(b)).

(e) Information about a financial transaction exempt under subsection (c) of this section or a financial transaction under section

8(b) of the Central Intelligence Agency Act of 1949 (50 U.S.C.

403j(b)) may be reviewed by the Permanent Select Committee on

Intelligence of the House and the Select Committee on Intelligence

of the Senate.

(f) Subsections (a)(1) and (d)(1) of this section may be superseded

only by a law enacted after April 3, 1980, specifically repealing or

amending this section.

SEC. 3525. AUDITING NONAPPROPRIATED FUND ACTIVITIES.

(a) The Comptroller General may audit—

(1) the operations and accounts of each nonappropriated fund

and related activities authorized or operated by the head of an

executive agency to sell goods or services to United States Government personnel and their dependents;

(2) accounting systems and internal controls of the fund and

related activities; and

(3) internal or independent audits or reviews of the fund and

related activities.

(b) The head of each executive agency promptly shall provide the

Comptroller General with—

(1) a copy of the annual report of a nonappropriated fund

and related activities subject to this section when the Comptroller General—

(A) requires a report for a designated class of each fund

and related activities having gross sales receipts of more

than $100,000 a year; or

(B) specifically requests a report for another fund and

related activities; and

(2) a statement on the yearly financial operations, financial

condition, and cash flow and other yearly information about

the fund and related activities that the head of the agency and
145 Sec. 3526 CH. 35—ACCOUNTING AND COLLECTION

the Comptroller General agree on if the information is not included in the annual report.

(c) Records and property of a fund and related activities subject

to this section shall be made available to the Comptroller General

to the extent the Comptroller General considers necessary.

SEC. 3526. SETTLEMENT OF ACCOUNTS.

(a) The Comptroller General shall settle all accounts of the United States Government and supervise the recovery of all debts finally certified by the Comptroller General as due the Government.

(b) A decision of the Comptroller General under section 3529 of

this title is conclusive on the Comptroller General when settling

the account containing the payment.

(c)(1) The Comptroller General shall settle an account of an accountable official within 3 years after the date the Comptroller

General receives the account. A copy of the certificate of settlement

shall be provided the official.

(2) The settlement of an account is conclusive on the Comptroller

General after 3 years after the account is received by the Comptroller General. However, an amount may be charged against the account after the 3-year period when the Government has or may

have lost money because the official acted fraudulently or criminally.

(3) A 3-year period under this subsection is suspended during a

war.

(4) This subsection does not prohibit—

(A) recovery of public money illegally or erroneously paid;

(B) recovery from an official of a balance due the Government under a settlement within the 3-year period; or

(C) an official from clearing an account of questioned items

as prescribed by law.

(d) On settling an account of the Government, the balance certified by the Comptroller General is conclusive on the executive

branch of the Government. On the initiative of the Comptroller

General or on request of an individual whose accounts are settled

or the head of the agency to which the account relates, the Comptroller General may change the account within a year after settlement. The decision of the Comptroller General to change the account is conclusive on the executive branch.

(e) When an amount of money is expended under law for a treaty

or relations with a foreign country, the President may—

(1) authorize the amount to be accounted for each year specifically by settlement of the Comptroller General when the

President decides the amount expended may be made public;

or

(2) make, or have the Secretary of State make, a certificate

of the amount expended if the President decides the amount is

not to be accounted for specifically. The certificate is a sufficient voucher for the amount stated in the certificate.

(f) The Comptroller General shall keep all settled accounts,

vouchers, certificates, and related papers until they are disposed of

as prescribed by law.
Sec. 3527 CH. 35—ACCOUNTING AND COLLECTION 146

(g) This subchapter does not prohibit the Comptroller General

from suspending an item in an account to get additional evidence

or explanations needed to settle an account.

SEC. 3527. GENERAL AUTHORITY TO RELIEVE ACCOUNTABLE OFFICIALS AND AGENTS FROM LIABILITY.

(a) Except as provided in subsection (b) of this section, the Comptroller General may relieve a present or former accountable official

or agent of an agency responsible for the physical loss or deficiency

of public money, vouchers, checks, securities, or records, or may authorize reimbursement from an appropriation or fund available for

the activity in which the loss or deficiency occurred for the amount

of the loss or deficiency paid by the official or agent as restitution,

when—

(1) the head of the agency decides that—

(A) the official or agent was carrying out official duties

when the loss or deficiency occurred, or the loss or deficiency occurred because of an act or failure to act by a subordinate of the official or agent; and

(B) the loss or deficiency was not the result of fault or

negligence by the official or agent;

(2) the loss or deficiency was not the result of an illegal or

incorrect payment; and

(3) the Comptroller General agrees with the decision of the

head of the agency.

(b)(1) The Comptroller General shall relieve a disbursing official

of the armed forces responsible for the physical loss or deficiency

of public money, vouchers, or records, or shall authorize reimbursement, from an appropriation or fund available for reimbursement,

of the amount of the loss or deficiency paid by or for the official

as restitution, when—

(A) the Secretary of Defense or the appropriate Secretary of

the military department of the Department of Defense decides

that the official was carrying out official duties when the loss

or deficiency occurred;

(B) the loss or deficiency was not the result of an illegal or

incorrect payment; and

(C) the loss or deficiency was not the result of fault or negligence by the official.

(2) The finding of the Secretary involved is conclusive on the

Comptroller General.

(c) On the initiative of the Comptroller General or written recommendation of the head of an agency, the Comptroller General

may relieve a present or former disbursing official of the agency responsible for a deficiency in an account because of an illegal, improper, or incorrect payment, and credit the account for the deficiency, when the Comptroller General decides that the payment

was not the result of bad faith or lack of reasonable care by the

official. However, the Comptroller General may deny relief when

the Comptroller General decides the head of the agency did not

carry out diligently collection action under procedures prescribed

by the Comptroller General.

(d)(1) When the Comptroller General decides it is necessary to

adjust the account of an official or agent granted relief under sub-
147 Sec. 3528 CH. 35—ACCOUNTING AND COLLECTION

section (a) or (c) of this section, the amount of the relief shall be

charged—

(A) to an appropriation specifically provided to be charged; or

(B) if no specific appropriation, to the appropriation or fund

available for the expense of the accountable function when the

adjustment is carried out.

(2) Subsection (c) of this section does not—

(A) affect the liability, or authorize the relief, of a payee,

beneficiary, or recipient of an illegal, improper, or incorrect

payment; or

(B) relieve an accountable official, the head of an agency, or

the Comptroller General of responsibility in carrying out collection action against a payee, beneficiary, or recipient.

(e) Relief provided under this section is in addition to relief provided under another law.

SEC. 3528. RESPONSIBILITIES AND RELIEF FROM LIABILITY OF CERTIFYING OFFICIALS.

(a) A certifying official certifying a voucher is responsible for—

(1) information stated in the certificate, voucher, and supporting records;

(2) the computation of a certified voucher under this section

and section 3325 of this title;

(3) the legality of a proposed payment under the appropriation or fund involved; and

(4) repaying a payment—

(A) illegal, improper, or incorrect because of an inaccurate or misleading certificate;

(B) prohibited by law; or

(C) that does not represent a legal obligation under the

appropriation or fund involved.

(b)(1) The Comptroller General may relieve a certifying official

from liability when the Comptroller General decides that—

(A) the certification was based on official records and the official did not know, and by reasonable diligence and inquiry

could not have discovered, the correct information; or

(B)(i) the obligation was incurred in good faith;

(ii) no law specifically prohibited the payment; and

(iii) the United States Government received value for payment.

(2) The Comptroller General may deny relief when the Comptroller General decides the head of the agency did not carry out diligently collection action under procedures described by the Comptroller General.

(c) The Comptroller General shall relieve a certifying official from

liability for an overpayment—

(1) to a common carrier under section 3726 of this title when

the Comptroller General decides the overpayment occurred

only because the administrative audit before payment did not

verify transportation rates, freight classifications, or land-grant

deductions; or

(2) provided under a Government bill of lading or transportation request when the overpayment was the result of using

improper transportation rates or classifications or the failure
Sec. 3529 CH. 35—ACCOUNTING AND COLLECTION 148

to deduct the proper amount under a land-grant law or agreement.

(d) This section does not apply to disbursements of a military department of the Department of Defense, except disbursements for

departmental pay and expenses in the District of Columbia.

SEC. 3529. REQUEST FOR DECISIONS OF THE COMPTROLLER GENERAL.

(a) A disbursing or certifying official or the head of an agency

may request a decision from the Comptroller General on a question

involving—

(1) a payment the disbursing official or head of the agency

will make; or

(2) a voucher presented to a certifying official for certification.

(b) The Comptroller General shall issue a decision requested

under this section.

SEC. 3530. ADJUSTING ACCOUNTS.

(a) An appropriation or fund currently available for the expense

of an accountable function shall be charged with an amount necessary to adjust an account of an accountable official or agent

when—

(1) necessary to adjust the account for a loss to the United

States Government resulting from the fault or negligence of

the official or agent; and

(2) the head of the agency decides the loss is uncollectable.

(b) An adjustment does not affect the personal financial liability

of an official or agent for the loss.

(c) The Comptroller General shall prescribe regulations to carry

out subsection (a) of this section.

(d) Under procedures prescribed by the Comptroller General, the

head of an agency may charge the net amount of unpaid and overpaid balances in individual pay accounts against the appropriation

for the fiscal year in which the balances occurred and from which

the accounts were payable. The net amount shall be credited to and

paid from the corresponding appropriation for the next fiscal year.

SEC. 3531. PROPERTY RETURNS.

(a) The head of an executive department—

(1) shall certify to the Comptroller General a charge against

an official or agent entrusted with public property for the department resulting from a loss to the United States Government from the property because of fault of the official or agent;

and

(2) may not forward the property to the Comptroller General.

(b)(1) A certificate under subsection (a) of this section shall

state—

(A) the condition of the property;

(B) that the official or agent has had a reasonable opportunity to be heard but has not been relieved of liability; and

(C) that the certificate includes all charges not certified previously.

(2) The effect of information in the certificate is the same as if

the Comptroller General had discovered the information when au-
149 Sec. 3542 CH. 35—ACCOUNTING AND COLLECTION

diting the account. The Comptroller General shall charge the appropriate account for the amount of the loss.

(c) Except as provided in subsection (a) of this section, this section does not affect the way a property return is made or liability

for property is decided.

SEC. 3532. NOTIFICATION OF ACCOUNT DEFICIENCIES.

An accounting official discovering a deficiency in an account of an

official of the United States Government having custody of public

money shall notify the head of the agency having jurisdiction of the

official of the kind and amount of the deficiency.

SUBCHAPTER IV—COLLECTION

SEC. 3541. DISTRESS WARRANTS.

(a) When an official receiving public money before it is paid to

the Treasury or a disbursing or certifying official of the United

States Government does not submit an account or pay the money

as prescribed by law, the Comptroller General shall make the account for the official and certify to the Secretary of the Treasury

the amount due the Government.

(b) The Secretary shall issue a distress warrant against the official stating the amount due from the official and any amount paid.

The warrant shall be directed to the marshal of the district in

which the official resides. If the Secretary intends to take and sell

the property of an official that is located in a district other than

where the official resides, the warrant shall be directed to the marshal of the district in which the official resides and the marshal of

the district in which the property is located.

SEC. 3542. CARRYING OUT DISTRESS WARRANTS.

(a) A marshal carrying out a distress warrant issued under section 3541 of this title shall seize the personal property of the official and sell the property after giving 10 days notice of the sale.

Notice shall be given by posting an advertisement of the property

to be sold in at least 2 public places in the town and county in

which the property was taken or the town and county in which the

owner of the property resides. If the property does not satisfy the

amount due under the warrant, the official may be sent to prison

until discharged by law.

(b)(1) The amount due under a warrant is a lien on the real property of the official from the date the distress warrant is issued. The

lien shall be recorded in the office of the clerk of the appropriate

district court until discharged under law.

(2) If the personal property of the official is not enough to satisfy

a distress warrant, the marshal shall sell real property of the official after advertising the property for at least 3 weeks in at least

3 public places in the county or district where the property is located. A buyer of the real property has valid title against all persons claiming under the official.

(c) The official shall receive that part of the proceeds of a sale

remaining after the distress warrant is satisfied and the reasonable

costs and charges of the sale are paid.
Sec. 3543 CH. 35—ACCOUNTING AND COLLECTION 150

SEC. 3543. POSTPONING A DISTRESS WARRANT PROCEEDING.

(a) A distress warrant proceeding may be postponed for a reasonable time if the Secretary of the Treasury believes the public interest will not be harmed by the postponement.

(b)(1) A person adversely affected by a distress warrant issued

under section 3541 of this title may bring a civil action in a district

court of the United States. The complaint shall state the kind and

extent of the harm. The court may grant an injunction to stay any

part of a distress warrant proceeding required by the action after

the person applying for the injunction gives a bond in an amount

the court prescribes for carrying out a judgment.

(2) An injunction under this subsection does not affect a lien

under section 3542(b)(1) of this title. The United States Government is not required to answer in a civil action brought under this

subsection.

(3) If the court dissolves the injunction on a finding that the civil

action for the injunction was brought only for delay, the court may

increase the interest rate imposed on amounts found due against

the complainant to not more than 10 percent a year. The judge

may grant or dissolve an injunction under this subsection either in

or out of court.

(c) A person adversely affected by a refusal to grant an injunction

or by dissolving an injunction under subsection (b) of this section

may petition a judge of a circuit court of appeals in which the district is located or the Supreme Court justice allotted to that circuit

by giving the judge or justice a copy of the proceeding held before

the district judge. The judge or justice may grant an injunction or

allow an appeal if the judge or justice finds the case requires it.

SEC. 3544. RIGHTS AND REMEDIES OF THE UNITED STATES GOVERNMENT RESERVED.

This subchapter does not affect a right or remedy the United

States Government has by law to recover a tax, debt, or demand.

SEC. 3545. CIVIL ACTION TO RECOVER MONEY.

The Attorney General shall bring a civil action to recover an

amount due to the United States Government on settlement of the

account of a person accountable for public money when the person

neglects or refuses to pay the amount to the Treasury. Any commission of that person and interest of 6 percent a year from the

time the money is received by the person until repaid to the Treasury shall be added to the amount due on the account. The commission is forfeited when judgment is obtained.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

3511–3513 .................................. 4 C.F.R. 52

3511–3512 .................................. 4 C.F.R. 51

3511 ............................................ 4 C.F.R. 75

3511 ............................................ GAO: Policies and Procedures Manual, Title 2, (Appendices I, II, III), see appendix III

GAO: Policies and Procedures Manual, Title 6, see appendix III

GAO: Policies and Procedures Manual, Title 7, see appendix III

OMB: Circulars A–50, A–123, A–127, see appendix IV

TFM, Volume 1, Part 4, Chapters 2000 and 2500, see appendix V
151 Sec. 3545 CH. 35—ACCOUNTING AND COLLECTION

31 U.S.C. Requirements or Guidelines

JFMIP: Federal Financial Management System Requirements, see appendix VI

FASAB, see appendix VII

3512 ............................................ OMB: Circulars A–123, A–127, see appendix IV, Bulletin 93–06

TFM, Volume 1, Part 2, Chapter 3300

3512(b) ........................................ GAO: Policies and Procedures Manual, Title 2 (Appendix II), see appendix III

OMB: Circular A–50, see appendix IV

3512(c) ........................................ GAO: Policy and Procedures Manual, Title 2, (Appendix I), see appendix III

3512(d) ........................................ GAO: Policy and Procedures Manual, Title 2, (Appendix I), see appendix III

TFM, Volume 1, Part 2, Chapters 1000, 1500, 2000, 3000, 3200, 3900, 4200, 4300, and

4500, see appendix V

TFM, Volume 1, Part 3, Chapter 2000, see appendix V

TFM, Volume 1, Part 4, Chapters 2000 and 2500, see appendix V

TFM, Volume 1, Part 6, Chapters 4000 and 7000, see appendix V

3513a .......................................... TFM, Volume 1, Part 2, Chapters 4000, 4100, and 4200, see appendix V

3515 ............................................ OMB: Bulletins 93–06, 93–18, see appendix IV

3515(d) ........................................ OMB: Bulletin 94–01, see appendix IV

3523–3524 .................................. 4 C.F.R. 82

3521 ............................................ OMB: Circular A–73, see appendix IV

3523 ............................................ 4 C.F.R. 52

GAO: Government Auditing Standards: 1994 Revision, see appendix III

3524 ............................................ OMB Circular A–73, see appendix IV

3526 ............................................ 4 C.F.R. 52, 82

3528 ............................................ TFM, Volume 1, Part 6, Chapter 6000, see appendix V

3529 ............................................ 4 C.F.R. 52, 82
152

TITLE 31—MONEY AND FINANCE

Subtitle III—Financial Management

* * * * * * *

CHAPTER 37—CLAIMS

SUBCHAPTER I—GENERAL

SEC. 3701. DEFINITIONS AND APPLICATION.

(a) In this chapter—

(1) ‘‘administrative offset’’ means withholding money payable

by the United States Government to, or held by the Government for, a person to satisfy a debt the person owes the Government;

(2) ‘‘calendar quarter’’ means a 3-month period beginning on

January 1, April 1, July 1, or October 1;

(3) ‘‘consumer reporting agency’’ means—

(A) a consumer reporting agency as that term is defined

in section 603(f) of the Fair Credit Reporting Act (15

U.S.C. 1681a(f)); or

(B) a person that, for money or on a cooperative basis,

regularly—

(i) gets information on consumers to give the information to a consumer reporting agency; or

(ii) serves as a marketing agent under an arrangement allowing a third party to get the information

from a consumer reporting agency;

(4) ‘‘executive or legislative agency’’ means a department,

agency, or instrumentality in the executive or legislative

branch of the Government;

(5) ‘‘military department’’ means the Departments of the

Army, Navy, and Air Force;

(6) ‘‘system of records’’ has the same meaning given that

term in section 552a(a)(5) of title 5; and

(7) ‘‘uniformed services’’ means the Army, Navy, Air Force,

Marine Corps, Coast Guard, Commissioned Corps of the National Oceanic and Atmospheric Administration, and Commissioned Corps of the Public Health Service.

(b) In subchapter II of this chapter, ‘‘claim’’ includes amounts

owing on account of loans insured or guaranteed by the Government and other amounts due the Government.

(c) In sections 3716 and 3717 of this title, ‘‘person’’ does not include an agency of the United States Government, of a State government, or of a unit of general local government.

(d) Sections 3711(f) and 3716–3719 of this title do not apply to

a claim or debt under, or to an amount payable under, the Internal
153 Sec. 3702 CH. 37—CLAIMS

Revenue Code of 1954 (26 U.S.C. 1 et seq.), the Social Security Act

(42 U.S.C. 301 et seq.), except to the extent provided under section

204(f) of such Act (42 U.S.C. 404(f)), or the tariff laws of the United

States.

NOTE

United States Senate as Legislative Agency; Regulations

Promulgated by Secretary of the Senate

Pub.L. 101–163, Title I, Sec. 11, Nov. 21, 1989, 103 Stat. 1046,

provided that:

‘‘(a) For purposes of subchapters I and II of chapter 37 of title 31,

United States Code [this chapter] (relating to claims of or against

the United States Government), the United States Senate shall be

considered to be a legislative agency (as defined in section

3701(a)(4) of such title), and the Secretary of the Senate shall be

deemed to be the head of such legislative agency.

‘‘(b) Regulations prescribed by the Secretary of the Senate pursuant to section 3716 of title 31, United States Code [section 3716 of

this title], shall not become effective until they are approved by the

Senate Committee on Rules and Administration.’’

SEC. 3702. AUTHORITY OF THE COMPTROLLER GENERAL TO SETTLE

CLAIMS.

(a) Except as provided in this chapter or another law, the Comptroller General shall settle all claims of or against the United

States Government. A claim that was not administratively examined before submission to the Comptroller General shall be examined by 2 officers or employees of the General Accounting Office

independently of each other.

(b)(1) A claim against the Government presented under this section must contain the signature and address of the claimant or an

authorized representative. The claim must be received by the

Comptroller General within 6 years after the claim accrues except—

(A) as provided in this chapter or another law; or

(B) a claim of a State, the District of Columbia, or a territory

or possession of the United States.

(2) When the claim of a member of the armed forces accrues during war or within 5 years before war begins, the claim must be presented to the Comptroller General within 5 years after peace is established or within the period provided in clause (1) of this subsection, whichever is later.

(3) The Comptroller General shall return a claim not received in

the time required under this subsection with a copy of this subsection and no further communication is required.

(c) One-year limit for check claims.—(1) Any claim on account of

a Treasury check shall be barred unless it is presented to the agency that authorized the issuance of such check within 1 year after

the date of issuance of the check or the effective date of this subsection, whichever is later.
Sec. 3711 CH. 37—CLAIMS 154

(2) Nothing in this subsection affects the underlying obligation of

the United States, or any agency thereof, for which a Treasury

check was issued.

(d) The Comptroller General shall report to Congress on a claim

against the Government that is timely presented under this section

that may not be adjusted by using an existing appropriation, and

that the Comptroller General believes Congress should consider for

legal or equitable reasons. The report shall include recommendations of the Comptroller General.

SUBCHAPTER II—CLAIMS OF THE UNITED STATES GOVERNMENT

SEC. 3711. COLLECTION AND COMPROMISE.

(a) The head of an executive or legislative agency—

(1) shall try to collect a claim of the United States Government for money or property arising out of the activities of, or

referred to, the agency;

(2) may compromise a claim of the Government of not more

than $100,000 (excluding interest) or such higher amount as

the Attorney General may from time to time prescribe that has

not been referred to another executive or legislative agency for

further collection action; and

(3) may suspend or end collection action on a claim referred

to in clause (2) of this subsection when it appears that no person liable on the claim has the present or prospective ability

to pay a significant amount of the claim or the cost of collecting the claim is likely to be more than the amount recovered.

(b) The Comptroller General has the same authority that the

head of the agency has under subsection (a) of this section when

the claim is referred to the Comptroller General for further collection action. Only the Comptroller General may compromise a claim

arising out of an exception the Comptroller General makes in the

account of an accountable official.

(c)(1) The head of an executive or legislative agency may not act

under subsection (a)(2) or (3) of this section on a claim that appears

to be fraudulent, false, or misrepresented by a party with an interest in the claim, or that is based on conduct in violation of the antitrust laws.

(2) The Secretary of Transportation may not compromise for less

than $500 a penalty under section 21302 of title 49 for a violation

of chapter 203, 205, or 207 of title 49 or a regulation or requirement prescribed or order issued under any of those chapters.

(d) A compromise under this section is final and conclusive unless gotten by fraud, misrepresentation, presenting a false claim, or

mutual mistake of fact. An accountable official is not liable for an

amount paid or for the value of property lost or damaged if the

amount or value is not recovered because of a compromise under

this section.

(e) The head of an executive or legislative agency acts under—

(1) regulations prescribed by the head of the agency; and

(2) standards that the Attorney General and the Comptroller

General may prescribe jointly.

(f)(1) When trying to collect a claim of the Government under a

law except the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.),
155 Sec. 3711 CH. 37—CLAIMS

the head of an executive or legislative agency may disclose to a

consumer reporting agency information from a system of records

that an individual is responsible for a claim if—

(A) notice required by section 552a(e)(4) of title 5 indicates

that information in the system may be disclosed to a consumer

reporting agency;

(B) the head of the agency has reviewed the claim and decided that the claim is valid and overdue;

(C) the head of the agency has notified the individual in

writing—

(i) that payment of the claim is overdue;

(ii) that, within not less than 60 days after sending the

notice, the head of the agency intends to disclose to a

consumer reporting agency that the individual is responsible for the claim;

(iii) of the specific information to be disclosed to the

consumer reporting agency; and

(iv) of the rights the individual has to a complete explanation of the claim, to dispute information in the records

of the agency about the claim, and to administrative repeal

or review of the claim;

(D) the individual has not—

(i) repaid or agreed to repay the claim under a written

repayment plan that the individual has signed and the

head of the agency has agreed to; or

(ii) filed for review of the claim under paragraph (2) of

this subsection;

(E) the head of the agency has established procedures to—

(i) disclose promptly, to reach consumer reporting agency

to which the original disclosure was made, a substantial

change in the condition or amount of the claim;

(ii) verify or correct promptly information about the

claim on request of a consumer reporting agency for verification of information disclosed; and

(iii) get satisfactory assurances from each consumer reporting agency that the agency is complying with all laws

of the United States related to providing consumer credit

information; and

(F) the information disclosed to the consumer reporting agency is limited to—

(i) information necessary to establish the identity of the

individual, including name, address, and taxpayer identification number;

(ii) the amount, status, and history of the claim; and

(iii) the agency or program under which the claim arose.

(2) Before disclosing information to a consumer reporting agency

under paragraph (1) of this subsection and at other times allowed

by law, the head of an executive or legislative agency shall provide,

on request of an individual alleged by the agency to be responsible

for the claim, for a review of the obligation of the individual, including an opportunity for reconsideration of the initial decision on

the claim.

(3) Before disclosing information to a consumer reporting agency

under paragraph (1) of this subsection, the head of an executive or
Sec. 3712. CH. 37—CLAIMS 156

legislative agency shall take reasonable action to locate an individual for whom the head of the agency does not have a current address to send the notice under paragraph (1)(C).

SEC. 3712. TIME LIMITATIONS FOR PRESENTING CERTAIN CLAIMS OF

THE GOVERNMENT.

(a) CLAIMS OVER FORGED OR UNAUTHORIZED ENDORSEMENTS.—

(1) PERIOD FOR CLAIMS.—If the Secretary of the Treasury determines that a Treasury check has been paid over a forged or

unauthorized endorsement, the Secretary may reclaim the

amount of such check from the presenting bank or any other

endorser that has breached its guarantee of endorsements

prior to—

(A) the end of the 1-year period beginning on the date

of payment; or

(B) the expiration of the 180-day period beginning on the

close of the period described in subparagraph (A) if a timely claim is received under section 3702.

(2) CIVIL ACTIONS.—(A) Except as provided in subparagraph

(B), the United States may bring a civil action to enforce the

liability of an endorser, transferor, depository, or fiscal agent

on a forged or unauthorized signature or endorsement on, or

a change in, a check or warrant issued by the Secretary of the

Treasury, the United States Postal Service, or any disbursing

official or agent not later than 1 year after a check or warrant

is presented to the drawee for payment.

(B) If the United States has given an endorser written notice

of a claim against the endorser within the time allowed by subparagraph (A), the 1-year period for bringing a civil action on

that claim under subparagraph (A) shall be extended by 3

years.

(3) EFFECT ON AGENCY AUTHORITY.—Nothing in this subsection shall be construed to limit the authority of any agency

under subchapter II of chapter 37 of this title.

(b) Notwithstanding subsection (a) of this section, a civil action

may be brought within 2 years after the claim is discovered when

an endorser, transferor, depositary, or fiscal agent fraudulently

conceals the claim from an officer or employee of the Government

entitled to bring the civil action.

(c) The Comptroller General shall credit the appropriate account

of the Treasury for the amount of a check or warrant for which a

civil action cannot be brought because notice was not given within

the time required under subsection (a) of this section if the failure

to give notice was not the result of negligence of the Secretary.

(d) The Government waives all claims against a person arising

from dual pay from the Government if the dual pay is not reported

to the Comptroller General for collection within 6 years from the

last date of a period of dual pay.

SEC. 3713. PRIORITY OF GOVERNMENT CLAIMS.

(a)(1) A claim of the United States Government shall be paid

first when—

(A) a person indebted to the Government is insolvent and—

(i) the debtor without enough property to pay all debts

makes a voluntary assignment of property;
157 Sec. 3716 CH. 37—CLAIMS

(ii) property of the debtor, if absent, is attached; or

(iii) an act of bankruptcy is committed; or

(B) the estate of a deceased debtor, in the custody of the executor or administrator, is not enough to pay all debts of the

debtor.

(2) This subsection does not apply to a case under title 11.

(b) A representative of a person or an estate (except a trustee

acting under title 11) paying any part of a debt of the person or

estate before paying a claim of the Government is liable to the extent of the payment for unpaid claims of the Government.

SEC. 3714. KEEPING MONEY DUE STATES IN DEFAULT.

The Secretary of the Treasury shall keep the necessary amount

of money the United States Government owes a State when the

State defaults in paying principal or interest on investments in

stocks or bonds the State issues or guarantees and that the Government holds in trust. The money shall be used to pay the principal or interest or reimburse, with interest, money the Government advanced for interest due on the stocks or bonds.

SEC. 3715. BUYING REAL PROPERTY OF A DEBTOR.

The head of an agency for whom a civil action is brought against

a debtor of the United States Government may buy real property

of the debtor at a sale on execution of the real property of the debtor resulting from the action. The head of the agency may not bid

more for the property than the amount of the judgment for which

the property is being sold, and costs. The marshal of the district

in which the sale is held shall transfer the property to the Government.

SEC. 3716. ADMINISTRATIVE OFFSET.

(a) After trying to collect a claim from a person under section

3711(a) of this title, the head of an executive or legislative agency

may collect the claim by administrative offset. The head of the

agency may collect by administrative offset only after giving the

debtor—

(1) written notice of the type and amount of the claim, the

intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the

debtor under this section;

(2) an opportunity to inspect and copy the records of the

agency related to the claim;

(3) an opportunity for a review within the agency of the decision of the agency related to the claim; and

(4) an opportunity to make a written agreement with the

head of the agency to repay the amount of the claim.

(b) Before collecting a claim by administrative offset under subsection (a) of this section, the head of an executive or legislative

agency must prescribe regulations on collecting by administrative

offset based on—

(1) the best interests of the United States Government;

(2) the likelihood of collecting a claim by administrative offset; and

(3) for collecting a claim by administrative offset after the 6-

year period for bringing a civil action on a claim under section
Sec. 3717 CH. 37—CLAIMS 158

2415 of title 28 has expired, the cost effectiveness of leaving a

claim unresolved for more than 6 years.

(c) This section does not apply—

(1) to a claim under this subchapter that has been outstanding for more than 10 years; or

(2) when a statute explicitly provides for or prohibits using

administrative offset to collect the claim or type of claim involved.

SEC. 3717. INTEREST AND PENALTY ON CLAIMS.

(a)(1) The head of an executive or legislative agency shall charge

a minimum annual rate of interest on an outstanding debt on a

United States Government claim owed by a person that is equal to

the average investment rate for the Treasury tax and loan accounts

for the 12-month period ending on September 30 of each year,

rounded to the nearest whole percentage point. The Secretary of

the Treasury shall publish the rate before November 1 of that year.

The rate is effective on the first day of the next calendar quarter.

(2) The Secretary may change the rate of interest for a calendar

quarter if the average investment rate for the 12-month period

ending at the close of the prior calendar quarter, rounded to the

nearest whole percentage point, is more or less than the existing

published rate by 2 percentage points.

(b) Interest under subsection (a) of this section accrues from the

date—

(1) on which notice is mailed after October 25, 1982, if notice

was first mailed before October 25, 1982; or

(2) notice of the amount due is first mailed to the debtor at

the most current address of the debtor available to the head

of the executive or legislative agency, if notice is first mailed

after October 24, 1982.

(c) The rate of interest charged under subsection (a) of this section—

(1) is the rate in effect on the date from which interest begins to accrue under subsection (b) of this section; and

(2) remains fixed at that rate for the duration of the indebtedness.

(d) Interest under subsection (a) of this section may not be

charged if the amount due on the claim is paid within 30 days after

the date from which interest accrues under subsection (b) of this

section. The head of an executive or legislative agency may extend

the 30-day period.

(e) The head of an executive or legislative agency shall assess on

a claim owed by a person—

(1) a charge to cover the cost of processing and handling a

delinquent claim; and

(2) a penalty charge of not more than 6 percent a year for

failure to pay a part of a debt more than 90 days past due.

(f) Interest under subsection (a) of this section does not accrue

on a charge assessed under subsection (e) of this section.

(g) This section does not apply—

(1) if a statute, regulation required by statute, loan agreement, or contract prohibits charging interest or assessing

charges or explicitly fixes the interest or charges; and
159 Sec. 3718 CH. 37—CLAIMS

(2) to a claim under a contract executed before October 25,

1982, that is in effect on October 25, 1982.

(h) In conformity with standards prescribed jointly by the Attorney General and the Comptroller General, the head of an executive

or legislative agency may prescribe regulations identifying circumstances appropriate to waiving collection of interest and

charges under subsections (a) and (e) of this section. A waiver

under the regulations is deemed to be compliance with this section.

SEC. 3718. CONTRACTS FOR COLLECTION SERVICES.

(a) Under conditions the head of an executive or legislative agency considers appropriate, the head of the agency may make a contract with a person for collection services to recover indebtedness

owed the United States Government. The contract shall provide

that—

(1) the head of the agency retains the authority to resolve a

dispute, compromise a claim, end collection action, and refer a

matter to the Attorney General to bring a civil action; and

(2) the person is subject to—

(A) section 552a of title 5, to the extent provided in section 552a(m); and

(B) laws and regulations of the United States Government and State governments related to debt collection

practices.

(b)(1)(A) The Attorney General may make contracts retaining private counsel to furnish legal services, including representation in

negotiation, compromise, settlement, and litigation, in the case of

any claim of indebtedness owed the United States. Each such contract shall include such terms and conditions as the Attorney General considers necessary and appropriate, including a provision

specifying the amount of the fee to be paid to the private counsel

under such contract or the method for calculating that fee. The

amount of the fee payable for legal services furnished under any

such contract may not exceed the fee that counsel engaged in the

private practice of law in the area or areas where the legal services

are furnished typically charge clients for furnishing legal services

in the collection of claims of indebtedness, as determined by the Attorney General, considering the amount, age, and nature of the indebtedness and whether the debtor is an individual or a business

entity. If the Attorney General makes a contract for legal services

to be furnished in any judicial district of the United States under

the first sentence of this paragraph, the Attorney General shall use

his best efforts to obtain, from among attorneys regularly engaged

in the private practice of law in such district, at least four such

contracts for legal services with private individuals or firms in such

district. Nothing in this subparagraph shall relieve the Attorney

General of the competition requirements set forth in title III of the

Federal Property and Administrative Services Act of 1949 (41

U.S.C. 251 and following).

(B) The Attorney General shall use his best efforts to enter into

contracts under this paragraph with law firms owned and controlled by socially and economically disadvantaged individuals, so

as to enable each agency to comply with paragraph (3).
Sec. 3718 CH. 37—CLAIMS 160

(2) The head of an executive or legislative agency may, subject

to the approval of the Attorney General, refer to a private counsel

retained under paragraph (1) of this subsection claims of indebtedness owed the United States arising out of activities of that agency.

(3) Each agency shall use its best efforts to assure that not less

than 10 percent of the amounts of all claims referred to private

counsel by that agency under paragraph (2) are referred to law

firms owned and controlled by socially and economically disadvantaged individuals. For purposes of this paragraph—

(A) the term ‘‘law firm owned and controlled by socially and

economically disadvantaged individuals’’ means a law firm that

meets the requirements set forth in clauses (i) and (ii) of section 8(d)(3)(C) of the Small Business Act (15 U.S.C.

637(d)(3)(C)(i) and (ii)) and regulations issued under those

clauses; and

(B) ‘‘socially and economically disadvantaged individuals’’

shall be presumed to include these groups and individuals described in the last paragraph of section 8(d)(3)(C) of the Small

Business Act.

(4) Notwithstanding sections 516, 518(b), 519, and 547(2) of title

28, a private counsel retained under paragraph (1) of this subsection may represent the United States in litigation in connection

with legal services furnished pursuant to the contract entered into

with that counsel under paragraph (1) of this subsection.

(5) A contract made with a private counsel under paragraph (1)

of this subsection shall include—

(A) a provision permitting the Attorney General to terminate

either the contract or the private counsel’s representation of

the United States in particular cases if the Attorney General

finds that such action is for the convenience of the Government;

(B) a provision stating that the head of the executive or legislative agency which refers a claim under the contract retains

the authority to resolve a dispute regarding the claim, to compromise the claim, or to terminate a collection action on the

claim; and

(C) a provision requiring the private counsel to transmit

monthly to the Attorney General and the head of the executive

or legislative agency referring a claim under the contract a report on the services relating to the claim rendered under the

contract during the month and the progress made during the

month in collecting the claim under the contract.

(6) Notwithstanding the fourth sentence of section 803(6) of the

Fair Debt Collection Practices Act (15 U.S.C. 1692a(6)), a private

counsel performing legal services pursuant to a contract made

under paragraph (1) of this subsection shall be considered to be a

debt collector for the purposes of such Act.

(7) Any counterclaim filed in any action to recover indebtedness

owed the United States which is brought on behalf of the United

States by private counsel retained under this subsection may not

be asserted unless the counterclaim is served directly on the Attorney General or the United States Attorney for the judicial district

in which, or embracing the place in which, the action is brought.
161 Sec. 3719 CH. 37—CLAIMS

Such service shall be made in accordance with the rules of procedure of the court in which the action is brought.

(c) The Attorney General shall transmit to the Congress an annual report on the activities of the Department of Justice to recover

indebtedness owed the United States which was referred to the Department of Justice for collection. Each such report shall include a

list, by agency, of—

(1) the total number and amounts of claims which were referred for legal services to the Department of Justice and to

private counsel under subsection (b) during the 1-year period

covered by the report;

(2) the total number and amount of those claims referred for

legal services to the Department of Justice which were collected or were not collected or otherwise resolved during the 1-

year period covered by the report; and

(3) the total number and amount of those claims referred for

legal services to private counsel under subsection (b)—

(A) which were collected or were not collected or otherwise resolved during the 1-year period covered by the report;

(B) which were not collected or otherwise resolved under

a contract terminated by the Attorney General during the

1-year period covered by the report; and

(C) on which the Attorney General terminated the private counsel’s representation during the 1-year period covered by the report without terminating the contract with

the private counsel under which the claims were referred.

(d) Notwithstanding section 3302(b) of this title, a contract under

subsection (a) or (b) of this section may provide that a fee a person

charges to recover indebtedness owed the United States Government is payable from the amount recovered.

(e) A contract under subsection (a) or (b) of this section is effective only to the extent and in the amount provided in an appropriation law. This limitation does not apply in the case of a contract

that authorizes a person to collect a fee as provided in subsection

(d) of this section.

(f) This section does not apply to the collection of debts under the

Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.).

(g) In order to assist Congress in determining whether use of private counsel is a cost-effective method of collecting Government

debts, the Attorney General shall, following consultation with the

General Accounting Office, maintain and make available to the Inspector General of the Department of Justice, statistical data relating to the comparative costs of debt collection by participating

United States Attorneys’ Offices and by private counsel.

SEC. 3719. REPORTS ON DEBT COLLECTION ACTIVITIES.

(a) In consultation with the Secretary of the Treasury and the

Comptroller General, the Director of the Office of Management and

Budget shall prescribe regulations requiring the head of each agency with outstanding debts to prepare and submit to the Director

and the Secretary at least once each year a report summarizing the

status of loans and accounts receivable managed by the head of the

agency. The report shall contain—
Sec. 3720 CH. 37—CLAIMS 162

(1) information on—

(A) the total amount of loans and accounts receivable

owed the agency and when amounts owed the agency are

due to be repaid;

(B) the total amount of receivables and number of claims

at least 30 days past due;

(C) the total amount written off as actually uncollectible

and the total amount allowed for uncollectible loans and

accounts receivable;

(D) the rate of interest charged for overdue debts and

the amount of interest charged and collected on debts;

(E) the total number of claims and the total amount collected; and

(F) the number and total amount of claims referred to

the Attorney General for settlement and the number and

total amount of claims the Attorney General settles;

(2) the information described in clause (1) of this subsection

for each program or activity the head of the agency carries out;

and

(3) other information the Director considers necessary to decide whether the head of the agency is acting aggressively to

collect the claims of the agency.

(b) The Director shall analyze the reports submitted under subsection (a) of this section and shall report annually to Congress on

the management of debt collection activities by the head of each

agency, including the information provided the Director under subsection (a).

SEC. 3720. COLLECTION OF PAYMENTS.

(a) Each head of an executive agency (other than an agency subject to section 9 of the Act of May 18, 1933 (48 Stat. 63, chapter

32; 16 U.S.C. 831h)) shall, under such regulations as the Secretary

of the Treasury shall prescribe, provide for the timely deposit of

money by officials and agents of such agency in accordance with

section 3302, and for the collection and timely deposit of sums

owed to such agency by the use of such procedures as withdrawals

and deposits by electronic transfer of funds, automatic withdrawals

from accounts at financial institutions, and a system under which

financial institutions receive and deposit, on behalf of the executive

agency, payments transmitted to post office lockboxes. The Secretary is authorized to collect from any agency not complying with

the requirements imposed pursuant to the preceding sentence a

charge in an amount the Secretary determines to be the cost to the

general fund caused by such noncompliance.

(b) The head of an executive agency shall pay to the Secretary

of the Treasury charges imposed pursuant to subsection (a). Payments shall be made out of amounts appropriated or otherwise

made available to carry out the program to which the collections

relate. The amounts of the charges paid under this subsection shall

be deposited in the Cash Management Improvements Fund established by subsection (c).

(c) There is established in the Treasury of the United States a

revolving fund to be known as the ‘‘Cash Management Improvements Fund’’. Sums in the fund shall be available without fiscal
163 Sec. 3720A CH. 37—CLAIMS

year limitation for the payment of expenses incurred in developing

the methods of collection and deposit described in subsection (a) of

this section and the expenses incurred in carrying out collections

and deposits using such methods, including the costs of personal

services and the costs of the lease or purchase of equipment and

operating facilities.

SEC. 3720A. REDUCTION OF TAX REFUND BY AMOUNT OF DEBT.

(a) Any Federal agency that is owed a past-due legally enforceable debt (other than any past-due support), including debt administered by a third party acting as an agent for the Federal Government, by a named person shall, in accordance with regulations issued pursuant to subsections (b) and (d), notify the Secretary of the

Treasury at least once a year of the amount of all such debt.

(b) No Federal agency may take action pursuant to subsection (a)

with respect to any debt until such agency—

(1) notifies the person incurring such debt that such agency

proposes to take action pursuant to such paragraph with respect to such debt;

(2) gives such person at least 60 days to present evidence

that all or part of such debt is not past-due or not legally enforceable;

(3) considers any evidence presented by such person and determines that an amount of such debt is past due and legally

enforceable;

(4) satisfies such other conditions as the Secretary may prescribe to ensure that the determination made under paragraph

(3) with respect to such debt is valid and that the agency has

made reasonable efforts (determined on a government-wide

basis) to obtain payment of such debt; and

(5) certifies that reasonable efforts have been made by the

agency (pursuant to regulations) to obtain payment of such

debt.

(c) Upon receiving notice from any Federal agency that a named

person owes to such agency a past-due legally enforceable debt, the

Secretary of the Treasury shall determine whether any amounts, as

refunds of Federal taxes paid, are payable to such person. If the

Secretary of the Treasury finds that any such amount is payable,

he shall reduce such refunds by an amount equal to the amount

of such debt, pay the amount of such reduction to such agency, and

notify such agency of the individual’s home address.

(d) The Secretary of the Treasury shall issue regulations prescribing the time or times at which agencies must submit notices

of past-due legally enforceable debts, the manner in which such notices must be submitted, and the necessary information that must

be contained in or accompany the notices. The regulations shall

specify the minimum amount of debt to which the reduction procedure established by subsection (c) may be applied and the fee that

an agency must pay to reimburse the Secretary of the Treasury for

the full cost of applying such procedure. Any fee paid to the Secretary pursuant to the preceding sentence may be used to reimburse appropriations which bore all or part of the cost of applying

such procedure.
Sec. 3720A CH. 37—CLAIMS 164

(e) Any Federal agency receiving notice from the Secretary of the

Treasury that an erroneous payment has been made to such agency

under subsection (c) shall pay promptly to the Secretary, in accordance with such regulations as the Secretary may prescribe, an

amount equal to the amount of such erroneous payment (without

regard to whether any other amounts payable to such agency under

such subsection have been paid to such agency).

(f)(1) Subsection (a) shall apply with respect to an OASDI overpayment made to any individual only if such individual is not currently entitled to monthly insurance benefits under title II of the

Social Security Act.

(2)(A) The requirements of subsection (b) shall not be treated as

met in the case of the recovery of an OASDI overpayment from any

individual under this section unless the notification under subsection (b)(1) describes the conditions under which the Commissioner of Social Security is required to waive recovery of an overpayment, as provided under section 204(b) of the Social Security

Act.

(B) In any case in which an individual files for a waiver under

section 204(b) of the Social Security Act within the 60-day period

referred to in subsection (b)(2), the Commissioner of Social Security

shall not certify to the Secretary of the Treasury that the debt is

valid under subsection (b)(4) before rendering a decision on the

waiver request under such section 204(b). In lieu of payment, pursuant to subsection (c), to the Commissioner of Social Security of

the amount of any reduction under this subsection based on an

OASDI overpayment, the Secretary of the Treasury shall deposit

such amount in the Federal Old-Age and Survivors Insurance

Trust Fund or the Federal Disability Insurance Trust Fund, whichever is certified to the Secretary of the Treasury as appropriate by

the Commissioner of Social Security.

(g) In the case of refunds of business associations, this section

shall apply only to refunds payable on or after January 1, 1995. In

the case of refunds of individuals who owe debts to Federal agencies that have not participated in the Federal tax refund offset program prior to the date of enactment of this subsection, this section

shall apply only to refunds payable on or after January 1, 1994.

(h) For purposes of this section—

(1) the term ‘‘Federal agency’’ means a department, agency,

or instrumentality of the United States (other than an agency

subject to section 9 of the Act of May 18, 1933 (48 Stat. 63,

chapter 32; 16 U.S.C. 831h)), and includes a Government corporation (as such term is defined in section 103 of title 5, United States Code);

(2) the term ‘‘past-due support’’ means any delinquency subject to section 464 of the Social Security Act;

(3) the term ‘‘OASDI overpayment’’ means any overpayment

of benefits made to an individual under title II of the Social Security Act; and

(4) the term ‘‘person’’ means an individual; or a sole proprietorship, partnership, corporation, nonprofit organization, or

any other form of business association.
165 Sec. 3721 CH. 37—CLAIMS

SUBCHAPTER III—CLAIMS AGAINST THE UNITED STATES

GOVERNMENT

SEC. 3721. CLAIMS OF PERSONNEL OF AGENCIES AND THE DISTRICT

OF COLUMBIA GOVERNMENT FOR PERSONAL PROPERTY

DAMAGE OR LOSS.

(a) In this section—

(1) ‘‘agency’’ does not include a nonappropriated fund activity

or a contractor with the United States Government.

(2) ‘‘head of an agency’’ means—

(A) for a military department, the Secretary of the military department;

(B) for the Department of Defense (except the military

departments), the Secretary of Defense; and

(C) for another agency, the head of the agency.

(3) ‘‘settle’’ means consider, determine, adjust, and dispose of

a claim by disallowance or by complete or partial allowance.

(b)(1) The head of an agency may settle and pay not more than $40,000 for a claim against the Government made by a member of

the uniformed services under the jurisdiction of the agency or by

an officer or employee of the agency for damage to, or loss of, personal property incident to service. A claim allowed under this subsection may be paid in money or the personal property replaced in

kind.

(2) The Secretary of State may waive the settlement and payment limitation referred to in paragraph (1) for claims for damage

or loss by United States Government personnel under the jurisdiction of a chief of mission in a foreign country if such claims arise

in circumstances where there is in effect a departure from the

country authorized or ordered under circumstances described in

section 5522(a) of title 5, if the Secretary determines that there exists exceptional circumstances that warrant such a waiver.

(c) On paying a claim under this section, the Government is subrogated for the amount of the payment to a right or claim that the

claimant may have against a foreign country for the damage or loss

for which the Government made the payment.

(d) The Mayor of the District of Columbia may settle and pay a

claim against the District of Columbia government made by an officer or employee of the District of Columbia government to the same

extent the head of an agency may settle and pay a claim under this

section.

(e) A claim may not be allowed under this section if the personal

property damage or loss occurred at quarters occupied by the

claimant in a State or the District of Columbia that were not assigned or provided in kind by the United States Government or the

District of Columbia government.

(f) A claim may be allowed under this section only if—

(1) the claim is substantiated;

(2) the head of the agency decides that possession of the

property was reasonable or useful under the circumstances;

and

(3) no part of the loss was caused by any negligent or wrongful act of the claimant or an agent or employee of the claimant.

(g) A claim may be allowed under this section only if it is presented in writing within 2 years after the claim accrues. However,
Sec. 3722 CH. 37—CLAIMS 166

if a claim under subsection (b) of this section accrues during war

or an armed conflict in which an armed force of the United States

is involved, or has accrued within 2 years before war or an armed

conflict begins, and for cause shown, the claim must be presented

within 2 years after the cause no longer exists or after the war or

armed conflict ends, whichever is earlier. An armed conflict begins

and ends as stated in a concurrent resolution of Congress or a decision of the President.

(h) The head of the agency—

(1) may settle and pay a claim made by the surviving spouse,

child, parent, or brother or sister of a dead member, officer, or

employee if the claim is otherwise payable under this section;

and

(2) may settle and pay the claims by the survivors only in

the following order:

(A) the spouse’s claim.

(B) a child’s claim.

(C) a parent’s claim.

(D) a brother’s or sister’s claim.

(i) Notwithstanding a contract, the representative of a claimant

may not receive more than 10 percent of a payment of a claim

made under this section for services related to the claim. A person

violating this subsection shall be fined not more than $1,000.

(j) The President may prescribe policies to carry out this section

(except subsection (b) to the extent that subsection (b) applies to

the military departments, the Department of Defense, and the

Coast Guard). Subject to those policies, the head of each agency

shall prescribe regulations to carry out this section.

(k) Settlement of a claim under this section is final and conclusive.

SEC. 3722. CLAIMS OF OFFICERS AND EMPLOYEES AT GOVERNMENT

PENAL AND CORRECTIONAL INSTITUTIONS.

(a) The Attorney General may settle and pay not more than

$1,000 in any one case for a claim made by an officer or employee

at a United States Government penal or correctional institution for

damage to, or loss of, personal property incident to employment.

(b) A claim may not be allowed under this section if the loss occurred at quarters occupied by the claimant that were not assigned

or provided in kind by the Government.

(c) A claim may be allowed only if—

(1) no part of the loss was caused by any negligent or wrongful act of the claimant or an agent or employee of the claimant;

(2) the Attorney General decides that possession of the property was reasonable or useful under the circumstances; and

(3) it is presented in writing within one year after it accrues.

(d) A claim may be paid under this section only if the claimant

accepts the amount of the settlement in complete satisfaction of the

claim.

(e) Necessary amounts are authorized to be appropriated to carry

out this section.
167 Sec. 3725 CH. 37—CLAIMS

SEC. 3723. SMALL CLAIMS FOR PRIVATELY OWNED PROPERTY DAMAGE OR LOSS.

(a) The head of an agency (except a military department of the

Department of Defense or the Coast Guard) may settle a claim for

not more than $1,000 for damage to, or loss of, privately owned

property that—

(1) is caused by the negligence of an officer or employee of

the United States Government acting within the scope of employment; and

(2) may not be settled under chapter 171 of title 28.

(b) A claim under this section may be allowed only if it is presented to the head of the agency within one year after it accrues.

(c) A claim under this section may be paid as provided in section

1304 of this title only if the claimant accepts the amount of the settlement in complete satisfaction of the claim against the Government.

SEC. 3724. CLAIMS FOR DAMAGES CAUSED BY INVESTIGATIVE OR LAW

ENFORCEMENT OFFICERS OF THE DEPARTMENT OF JUSTICE.

(a) The Attorney General may settle, for not more than $50,000

in any one case, a claim for personal injury, death, or damage to,

or loss of, privately owned property, caused by an investigative or

law enforcement officer as defined in section 2680(h) of title 28 who

is employed by the Department of Justice acting within the scope

of employment that may not be settled under chapter 171 of title

28. An officer or employee of the United States Government may

not present a claim arising during the scope of employment. A

claim may be allowed only if it is presented to the Attorney General within one year after it accrues.

(b) The Attorney General shall report annually to the Congress

on all settlements made under this section. With respect to each

such settlement, the Attorney General shall include a brief statement on the type of the claim, the amount claimed, and the

amount of the settlement.

(c) A claim may be paid under this section only if the claimant

accepts the amount of the settlement in complete satisfaction of the

claim against the Government.

SEC. 3725. CLAIMS OF NON-NATIONALS FOR PERSONAL INJURY OR

DEATH IN A FOREIGN COUNTRY

(a) The Secretary of State may settle, for not more than $1,500

in any one case, a claim for personal injury or death of an individual not a national of the United States in a foreign country in

which the United States exercises privileges of extraterritoriality

when the injury or death is caused by an officer, employee, or

agent of the United States Government (except of a military department of the Department of Defense or the Coast Guard). An officer or employee of the Government may not present a claim. A

claim under this section may be allowed only if it is presented to

the Secretary within one year after it accrues.

(b) The Secretary shall certify to Congress a settlement under

this section for payment out of an appropriation that may be made

to pay the settlement. The Secretary shall include a brief statement on the type of the claim, the amount claimed, and the

amount of the settlement.
Sec. 3726 CH. 37—CLAIMS 168

(c) A claim may be paid under this section only if the claimant

accepts the amount of the settlement in complete satisfaction of the

claim against the Government.

SEC. 3726. PAYMENT FOR TRANSPORTATION.

(a) A carrier or freight forwarder presenting a bill for transporting an individual or property for the United States Government

may be paid before the Administrator of General Services conducts

an audit, in accordance with regulations that the Administrator

shall prescribe. A claim under this section shall be allowed only if

it is received by the Administrator not later than 3 years (excluding time of war) after the later of the following dates:

(1) accrual of the claim;

(2) payment for the transportation is made;

(3) refund for an overpayment for the transportation is

made; or

(4) a deduction under subsection (b) of this section is made.

(b) Not later than 3 years (excluding time of war) after the time

a bill is paid, the Government may deduct from an amount subsequently due a carrier or freight forwarder an amount paid on the

bill that was greater than the rate allowed under—

(1) a lawful tariff on file with the Interstate Commerce Commission, the Secretary of Transportation with respect to foreign air transportation (as defined in section 40102(a) of title

49), the Federal Maritime Commission, or a State transportation authority; or

(2) sections 10721–10724 of title 49 or an equivalent arrangement or an exemption.

(c) Expenses of transportation audit postpayment contracts and

contract administration, and the expenses of all other transportation audit and audit-related functions conferred upon the Administrator of General Services, shall be financed from overpayments

collected from carriers on transportation bills paid by the Government and other similar type refunds, not to exceed collections. Payment to any contractor for audit services shall not exceed 50 percent of the overpayment identified by contract audit.

(d) At least annually, and as determined by the Administrator,

after making adequate provision for expense of refunds to carriers,

transportation audit postpayment contracts, contract administration, and other expenses authorized in subsection (c), overpayments

collected by the General Services Administration shall be transferred to miscellaneous receipts of the Treasury. A report of receipts, disbursements, and transfers (to miscellaneous receipts)

pursuant to this section shall be made annually in connection with

the budget estimates to the Director of the Office of Management

and Budget and to the Congress.

(e) The Administrator may delegate any authority conferred by

this section to another agency or agencies if the Administrator determines that such a delegation would be cost-effective or otherwise

in the public interest.

(f) Under regulations the head of an agency prescribes that conform with standards the Secretary of the Treasury and the Comptroller General prescribe jointly, a bill under this section may be

paid before the transportation is completed notwithstanding section
169 Sec. 3727 CH. 37—CLAIMS

3324 of this title when a carrier or freight forwarder issues the

usual document for the transportation. Payment for transportation

ordered but not provided may be recovered by deduction or other

means.

(g)(1) A carrier or freight forwarder may request the Comptroller

General to review the action of the Administrator if the request is

received not later than 6 months (excluding time of war) after the

Administrator acts or within the time stated in subsection (a) of

this section, whichever is later.

(2) This section does not prevent the Comptroller General from

conducting an audit under chapter 35 of this title.

SEC. 3727. ASSIGNMENTS OF CLAIMS.

(a) In this section, ‘‘assignment’’ means—

(1) a transfer or assignment of any part of a claim against

the United States Government or of an interest in the claim;

or

(2) the authorization to receive payment for any part of the

claim.

(b) An assignment may be made only after a claim is allowed, the

amount of the claim is decided, and a warrant for payment of the

claim has been issued. The assignment shall specify the warrant,

must be made freely, and must be attested to by 2 witnesses. The

person making the assignment shall acknowledge it before an official who may acknowledge a deed, and the official shall certify the

assignment. The certificate shall state that the official completely

explained the assignment when it was acknowledged. An assignment under this subsection is valid for any purpose.

(c) Subsection (b) of this section does not apply to an assignment

to a financing institution of money due or to become due under a

contract providing for payments totaling at least $1,000 when—

(1) the contract does not forbid an assignment;

(2) unless the contract expressly provides otherwise, the assignment—

(A) is for the entire amount not already paid;

(B) is made to only one party, except that it may be

made to a party as agent or trustee for more than one

party participating in the financing; and

(C) may not be reassigned; and

(3) the assignee files a written notice of the assignment and

a copy of the assignment with the contracting official or the

head of the agency, the surety on a bond on the contract, and

any disbursing official for the contract.

(d) During a war or national emergency proclaimed by the President or declared by law and ended by proclamation or law, a contract with the Department of Defense, the General Services Administration, the Department of Energy (when carrying out duties and

powers formerly carried out by the Atomic Energy Commission), or

other agency the President designates may provide, or may be

changed without consideration to provide, that a future payment

under the contract to an assignee is not subject to reduction or

setoff. A payment subsequently due under the contract (even after

the war or emergency is ended) shall be paid to the assignee without a reduction or setoff for liability of the assignor—
Sec. 3728 CH. 37—CLAIMS 170

(1) to the Government independent of the contract; or

(2) because of renegotiation, fine, penalty (except an amount

that may be collected or withheld under, or because the assignor does not comply with, the contract), taxes, social security contributions, or withholding or failing to withhold taxes

or social security contributions, arising from, or independent of,

the contract.

(e)(1) An assignee under this section does not have to make restitution of, refund, or repay the amount received because of the liability of the assignor to the Government that arises from or is

independent of the contract.

(2) The Government may not collect or reclaim money paid to a

person receiving an amount under an assignment or allotment of

pay or allowances authorized by law when liability may exist because of the death of the person making the assignment or allotment.

SEC. 3728. SETOFF AGAINST JUDGMENT.

(a) The Comptroller General shall withhold paying that part of

a judgment against the United States Government presented to the

Comptroller General that is equal to a debt the plaintiff owes the

Government.

(b) The Comptroller General shall—

(1) discharge the debt if the plaintiff agrees to the setoff and

discharges a part of the judgment equal to the debt; or

(2)(A) withhold payment of an additional amount the Comptroller General decides will cover legal costs of bringing a civil

action for the debt if the plaintiff denies the debt or does not

agree to the setoff; and

(B) have a civil action brought if one has not already been

brought.

(c) If the Government loses a civil action to recover a debt or recovers less than the amount the Comptroller General withholds

under this section, the Comptroller General shall pay the plaintiff

the balance and interest of 6 percent for the time the money is

withheld.

SEC. 3729. FALSE CLAIMS.

(a) LIABILITY FOR CERTAIN ACTS.—Any person who—

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member

of the Armed Forces of the United States a false or fraudulent

claim for payment or approval;

(2) knowingly makes, uses, or causes to be made or used, a

false record or statement to get a false or fraudulent claim paid

or approved by the Government;

(3) conspires to defraud the Government by getting a false

or fraudulent claim allowed or paid;

(4) has possession, custody, or control of property or money

used, or to be used, by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount

for which the person receives a certificate or receipt;

(5) authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and,
171 Sec. 3729 CH. 37—CLAIMS

intending to defraud the Government, makes or delivers the

receipt without completely knowing that the information on

the receipt is true;

(6) knowingly buys, or receives as a pledge of an obligation

or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may

not sell or pledge the property; or

(7) knowingly makes, uses, or causes to be made or used, a

false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government, is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus

3 times the amount of damages which the Government sustains because of the act of that person, except that if the court

finds that—

(A) the person committing the violation of this subsection furnished officials of the United States responsible

for investigating false claims violations with all information known to such person about the violation within 30

days after the date on which the defendant first obtained

the information;

(B) such person fully cooperated with any Government

investigation of such violation; and

(C) at the time such person furnished the United States

with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and

the person did not have actual knowledge of the existence

of an investigation into such violation;

the court may assess not less than 2 times the amount of damages

which the Government sustains because of the act of the person.

A person violating this subsection shall also be liable to the United

States Government for the costs of a civil action brought to recover

any such penalty or damages.

(b) KNOWING AND KNOWINGLY DEFINED.—For purposes of this

section, the terms ‘‘knowing’’ and ‘‘knowingly’’ mean that a person,

with respect to information—

(1) has actual knowledge of the information;

(2) acts in deliberate ignorance of the truth or falsity of the

information; or

(3) acts in reckless disregard of the truth or falsity of the information,

and no proof of specific intent to defraud is required.

(c) CLAIM DEFINED.—For purposes of this section, ‘‘claim’’ includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee,

or other recipient if the United States Government provides any

portion of the money or property which is requested or demanded,

or if the Government will reimburse such contractor, grantee, or

other recipient for any portion of the money or property which is

requested or demanded.

(d) EXEMPTION FROM DISCLOSURE.—Any information furnished

pursuant to subparagraphs (A) through (C) of subsection (a) shall

be exempt from disclosure under section 552 of title 5.
Sec. 3730 CH. 37—CLAIMS 172

(e) EXCLUSION.—This section does not apply to claims, records, or

statements made under the Internal Revenue Code of 1986.

SEC. 3730. CIVIL ACTIONS FOR FALSE CLAIMS.

(a) RESPONSIBILITIES OF THE ATTORNEY GENERAL.—The Attorney

General diligently shall investigate a violation under section 3729.

If the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action

under this section against the person.

(b) ACTIONS BY PRIVATE PERSONS.—

(1) A person may bring a civil action for a violation of section

3729 for the person and for the United States Government.

The action shall be brought in the name of the Government.

The action may be dismissed only if the court and the Attorney

General give written consent to the dismissal and their reasons

for consenting.

(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person

possesses shall be served on the Government pursuant to Rule

4(d)(4) of the Federal Rules of Civil Procedure. The complaint

shall be filed in camera, shall remain under seal for at least

60 days, and shall not be served on the defendant until the

court so orders. The Government may elect to intervene and

proceed with the action within 60 days after it receives both

the complaint and the material evidence and information.

(3) The Government may, for good cause shown, move the

court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may

be supported by affidavits or other submissions in camera. The

defendant shall not be required to respond to any complaint

filed under this section until 20 days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of

the Federal Rules of Civil Procedure.

(4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall—

(A) proceed with the action, in which case the action

shall be conducted by the Government; or

(B) notify the court that it declines to take over the action, in which case the person bringing the action shall

have the right to conduct the action.

(5) When a person brings an action under this subsection, no

person other than the Government may intervene or bring a

related action based on the facts underlying the pending action.

(c) RIGHTS OF THE PARTIES TO QUI TAM ACTIONS.—

(1) If the Government proceeds with the action, it shall have

the primary responsibility for prosecuting the action, and shall

not be bound by an act of the person bringing the action. Such

person shall have the right to continue as a party to the action,

subject to the limitations set forth in paragraph (2).

(2)(A) The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the
173 Sec. 3730 CH. 37—CLAIMS

motion and the court has provided the person with an opportunity for a hearing on the motion.

(B) The Government may settle the action with the defendant notwithstanding the objections of the person initiating the

action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all

the circumstances. Upon a showing of good cause, such hearing

may be held in camera.

(C) Upon a showing by the Government that unrestricted

participation during the course of the litigation by the person

initiating the action would interfere with or unduly delay the

Government’s prosecution of the case, or would be repetitious,

irrelevant, or for purposes of harassment, the court may, in its

discretion, impose limitations on the person’s participation,

such as—

(i) limiting the number of witnesses the person may call;

(ii) limiting the length of the testimony of such witnesses;

(iii) limiting the person’s cross-examination of witnesses;

or

(iv) otherwise limiting the participation by the person in

the litigation.

(D) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would

cause the defendant undue burden or unnecessary expense, the

court may limit the participation by the person in the litigation.

(3) If the Government elects not to proceed with the action,

the person who initiated the action shall have the right to conduct the action. If the Government so requests, it shall be

served with copies of all pleadings filed in the action and shall

be supplied with copies of all deposition transcripts (at the

Government’s expense). When a person proceeds with the action, the court, without limiting the status and rights of the

person initiating the action, may nevertheless permit the Government to intervene at a later date upon a showing of good

cause.

(4) Whether or not the Government proceeds with the action,

upon a showing by the Government that certain actions of discovery by the person initiating the action would interfere with

the Government’s investigation or prosecution of a criminal or

civil matter arising out of the same facts, the court may stay

such discovery for a period of not more than 60 days. Such a

showing shall be conducted in camera. The court may extend

the 60-day period upon a further showing in camera that the

Government has pursued the criminal or civil investigation or

proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal

or civil investigation or proceedings.

(5) Notwithstanding subsection (b), the Government may

elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. If any such alternate
Sec. 3730 CH. 37—CLAIMS 174

remedy is pursued in another proceeding, the person initiating

the action shall have the same rights in such proceeding as

such person would have had if the action had continued under

this section. Any finding of fact or conclusion of law made in

such other proceeding that has become final shall be conclusive

on all parties to an action under this section. For purposes of

the preceding sentence, a finding or conclusion is final if it has

been finally determined on appeal to the appropriate court of

the United States, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding

or conclusion is not subject to judicial review.

(d) AWARD TO QUI TAM PLAINTIFF.— (1) If the Government proceeds with an action brought by a

person under subsection (b), such person shall, subject to the

second sentence of this paragraph, receive at least 15 percent

but not more than 25 percent of the proceeds of the action or

settlement of the claim, depending upon the extent to which

the person substantially contributed to the prosecution of the

action. Where the action is one which the court finds to be

based primarily on disclosures of specific information (other

than information provided by the person bringing the action)

relating to allegations or transactions in a criminal, civil, or

administrative hearing, in a congressional, administrative, or

Government Accounting Office report, hearing, audit, or investigation, or from the news media, the court may award such

sums as it considers appropriate, but in no case more than 10

percent of the proceeds, taking into account the significance of

the information and the role of the person bringing the action

in advancing the case to litigation. Any payment to a person

under the first or second sentence of this paragraph shall be

made from the proceeds. Any such person shall also receive an

amount for reasonable expenses which the court finds to have

been necessarily incurred, plus reasonable attorneys’ fees and

costs. All such expenses, fees, and costs shall be awarded

against the defendant.

(2) If the Government does not proceed with an action under

this section, the person bringing the action or settling the

claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The

amount shall be not less than 25 percent and not more than

30 percent of the proceeds of the action or settlement and shall

be paid out of such proceeds. Such person shall also receive an

amount for reasonable expenses which the court finds to have

been necessarily incurred, plus reasonable attorneys’ fees and

costs. All such expenses, fees, and costs shall be awarded

against the defendant.

(3) Whether or not the Government proceeds with the action,

if the court finds that the action was brought by a person who

planned and initiated the violation of section 3729 upon which

the action was brought, then the court may, to the extent the

court considers appropriate, reduce the share of the proceeds

of the action which the person would otherwise receive under

paragraph (1) or (2) of this subsection, taking into account the

role of that person in advancing the case to litigation and any
175 Sec. 3730 CH. 37—CLAIMS

relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising

from his or her role in the violation of section 3729, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such dismissal

shall not prejudice the right of the United States to continue

the action, represented by the Department of Justice.

(4) If the Government does not proceed with the action and

the person bringing the action conducts the action, the court

may award to the defendant its reasonable attorneys’ fees and

expenses if the defendant prevails in the action and the court

finds that the claim of the person bringing the action was

clearly frivolous, clearly vexatious, or brought primarily for

purposes of harassment.

(e) CERTAIN ACTIONS BARRED.— (1) No court shall have jurisdiction over an action brought by

a former or present member of the armed forces under subsection (b) of this section against a member of the armed forces

arising out of such person’s service in the armed forces.

(2)(A) No court shall have jurisdiction over an action brought

under subsection (b) against a Member of Congress, a member

of the judiciary, or a senior executive branch official if the action is based on evidence or information known to the Government when the action was brought.

(B) For purposes of this paragraph, ‘‘senior executive branch

official’’ means any officer or employee listed in paragraphs (1)

through (8) of section 101(f) of the Ethics in Government Act

of 1978 (5 U.S.C.App.).

(3) In no event may a person bring an action under subsection (b) which is based upon allegations or transactions

which are the subject of a civil suit or an administrative civil

money penalty proceeding in which the Government is already

a party.

(4)(A) No court shall have jurisdiction over an action under

this section based upon the public disclosure of allegations or

transactions in a criminal, civil, or administrative hearing, in

a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news

media, unless the action is brought by the Attorney General or

the person bringing the action is an original source of the information.

(B) For purposes of this paragraph, ‘‘original source’’ means

an individual who has direct and independent knowledge of the

information on which the allegations are based and has voluntarily provided the information to the Government before filing

an action under this section which is based on the information.

(f) GOVERNMENT NOT LIABLE FOR CERTAIN EXPENSES.—The Government is not liable for expenses which a person incurs in bringing an action under this section.

(g) FEES AND EXPENSES TO PREVAILING DEFENDANT.—In civil actions brought under this section by the United States, the provisions of section 2412(d) of title 28 shall apply.

(h) Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in
Sec. 3731 CH. 37—CLAIMS 176

the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance

in an action filed or to be filed under this section, shall be entitled

to all relief necessary to make the employee whole. Such relief

shall include reinstatement with the same seniority status such

employee would have had but for the discrimination, 2 times the

amount of back pay, interest on the back pay, and compensation

for any special damages sustained as a result of the discrimination,

including litigation costs and reasonable attorneys’ fees. An employee may bring an action in the appropriate district court of the

United States for the relief provided in this subsection.

SEC. 3731. FALSE CLAIMS PROCEDURE.

(a) A subpoena requiring the attendance of a witness at a trial

or hearing conducted under section 3730 of this title may be served

at any place in the United States.

(b) A civil action under section 3730 may not be brought—

(1) more than 6 years after the date on which the violation

of section 3729 is committed, or

(2) more than 3 years after the date when facts material to

the right of action are known or reasonably should have been

known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than

10 years after the date on which the violation is committed,

whichever occurs last.

(c) In any action brought under section 3730, the United States

shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.

(d) Notwithstanding any other provision of law, the Federal

Rules of Criminal Procedure, or the Federal Rules of Evidence, a

final judgment rendered in favor of the United States in any criminal proceeding charging fraud or false statements, whether upon a

verdict after trial or upon a plea of guilty or nolo contendere, shall

estop the defendant from denying the essential elements of the offense in any action which involves the same transaction as in the

criminal proceeding and which is brought under subsection (a) or

(b) of section 3730.

SEC. 3732. FALSE CLAIMS JURISDICTION.

(a) ACTIONS UNDER SECTION 3730.—Any action under section

3730 may be brought in any judicial district in which the defendant

or, in the case of multiple defendants, any one defendant can be

found, resides, transacts business, or in which any act proscribed

by section 3729 occurred. A summons as required by the Federal

Rules of Civil Procedure shall be issued by the appropriate district

court and served at any place within or outside the United States.

(b) CLAIMS UNDER STATE LAW.—The district courts shall have jurisdiction over any action brought under the laws of any State for

the recovery of funds paid by a State or local government if the action arises from the same transaction or occurrence as an action

brought under section 3730.

SEC. 3733. CIVIL INVESTIGATIVE DEMANDS.

(a) IN GENERAL.—
177 Sec. 3733 CH. 37—CLAIMS

(1) ISSUANCE AND SERVICE.—Whenever the Attorney General

has reason to believe that any person may be in possession,

custody, or control of any documentary material or information

relevant to a false claims law investigation, the Attorney General may, before commencing a civil proceeding under section

3730 or other false claims law, issue in writing and cause to

be served upon such person, a civil investigative demand requiring such person—

(A) to produce such documentary material for inspection

and copying,

(B) to answer in writing written interrogatories with respect to such documentary material or information,

(C) to give oral testimony concerning such documentary

material or information, or

(D) to furnish any combination of such material, answers, or testimony.

The Attorney General may not delegate the authority to issue

civil investigative demands under this subsection. Whenever a

civil investigative demand is an express demand for any product of discovery, the Attorney General, the Deputy Attorney

General, or an Assistant Attorney General shall cause to be

served, in any manner authorized by this section, a copy of

such demand upon the person from whom the discovery was

obtained and shall notify the person to whom such demand is

issued of the date on which such copy was served.

(2) CONTENTS AND DEADLINES.— (A) Each civil investigative demand issued under paragraph (1) shall state the nature of the conduct constituting

the alleged violation of a false claims law which is under

investigation, and the applicable provision of law alleged

to be violated.

(B) If such demand is for the production of documentary

material, the demand shall—

(i) describe each class of documentary material to be

produced with such definiteness and certainty as to

permit such material to be fairly identified;

(ii) prescribe a return date for each such class which

will provide a reasonable period of time within which

the material so demanded may be assembled and

made available for inspection and copying; and

(iii) identify the false claims law investigator to

whom such material shall be made available.

(C) If such demand is for answers to written interrogatories, the demand shall—

(i) set forth with specificity the written interrogatories to be answered;

(ii) prescribe dates at which time answers to written

interrogatories shall be submitted; and

(iii) identify the false claims law investigator to

whom such answers shall be submitted.

(D) If such demand is for the giving of oral testimony,

the demand shall—

(i) prescribe a date, time, and place at which oral

testimony shall be commenced;
Sec. 3733 CH. 37—CLAIMS 178

(ii) identify a false claims law investigator who shall

conduct the examination and the custodian to whom

the transcript of such examination shall be submitted;

(iii) specify that such attendance and testimony are

necessary to the conduct of the investigation;

(iv) notify the person receiving the demand of the

right to be accompanied by an attorney and any other

representative; and

(v) describe the general purpose for which the demand is being issued and the general nature of the

testimony, including the primary areas of inquiry,

which will be taken pursuant to the demand.

(E) Any civil investigative demand issued under this section which is an express demand for any product of discovery shall not be returned or returnable until 20 days after

a copy of such demand has been served upon the person

from whom the discovery was obtained.

(F) The date prescribed for the commencement of oral

testimony pursuant to a civil investigative demand issued

under this section shall be a date which is not less than

seven days after the date on which demand is received, unless the Attorney General or an Assistant Attorney General designated by the Attorney General determines that

exceptional circumstances are present which warrant the

commencement of such testimony within a lesser period of

time.

(G) The Attorney General shall not authorize the issuance under this section of more than one civil investigative

demand for oral testimony by the same person unless the

person requests otherwise or unless the Attorney General,

after investigation, notifies that person in writing that an

additional demand for oral testimony is necessary. The Attorney General may not, notwithstanding section 510 of

title 28, authorize the performance, by any other officer,

employee, or agency, of any function vested in the Attorney

General under this subparagraph.

(b) PROTECTED MATERIAL OR INFORMATION.—

(1) IN GENERAL.—A civil investigative demand issued under

subsection (a) may not require the production of any documentary material, the submission of any answers to written interrogatories, or the giving of any oral testimony if such material,

answers, or testimony would be protected from disclosure

under—

(A) the standards applicable to subpoenas or subpoenas

duces tecum issued by a court of the United States to aid

in a grand jury investigation; or

(B) the standards applicable to discovery requests under

the Federal Rules of Civil Procedure, to the extent that the

application of such standards to any such demand is appropriate and consistent with the provisions and purposes

of this section.

(2) EFFECT ON OTHER ORDERS, RULES, AND LAWS.—Any such

demand which is an express demand for any product of discovery supersedes any inconsistent order, rule, or provision of law
179 Sec. 3733 CH. 37—CLAIMS

(other than this section) preventing or restraining disclosure of

such product of discovery to any person. Disclosure of any

product of discovery pursuant to any such express demand

does not constitute a waiver of any right or privilege which the

person making such disclosure may be entitled to invoke to resist discovery of trial preparation materials.

(c) SERVICE; JURISDICTION.— (1) BY WHOM SERVED.—Any civil investigative demand issued

under subsection (a) may be served by a false claims law investigator, or by a United States marshal or a deputy marshal, at

any place within the territorial jurisdiction of any court of the

United States.

(2) SERVICE IN FOREIGN COUNTRIES.—Any such demand or

any petition filed under subsection (j) may be served upon any

person who is not found within the territorial jurisdiction of

any court of the United States in such manner as the Federal

Rules of Civil Procedure prescribe for service in a foreign country. To the extent that the courts of the United States can assert jurisdiction over any such person consistent with due process, the United States District Court for the District of Columbia shall have the same jurisdiction to take any action respecting compliance with the section by any such person that such

court would have if such person were personally within the jurisdiction of such court.

(d) SERVICE UPON LEGAL ENTITIES AND NATURAL PERSONS.— (1) LEGAL ENTITIES.—Service of any civil investigative demand issued under subsection (a) or of any petition filed under

subsection (j) may be made upon a partnership, corporation,

association, or other legal entity by—

(A) delivering an executed copy of such demand or petition to any partner, executive officer, managing agent, or

general agent of the partnership, corporation, association,

or entity, or to any agent authorized by appointment or by

law to receive service of process on behalf of such partnership, corporation, association, or entity;

(B) delivering an executed copy of such demand or petition to the principal office or place of business of the partnership, corporation, association, or entity; or

(C) depositing an executed copy of such demand or petition in the United States mails by registered or certified

mail, with a return receipt requested, addressed to such

partnership, corporation, association, or entity at its principal office or place of business.

(2) NATURAL PERSONS.—Service of any such demand or petition may be made upon any natural person by—

(A) delivering an executed copy of such demand or petition to the person; or

(B) depositing an executed copy of such demand or petition in the United States mails by registered or certified

mail, with a return receipt requested, addressed to the

person at the person’s residence or principal office or place

of business.

(e) PROOF OF SERVICE.—A verified return by the individual serving any civil investigative demand issued under subsection (a) or
Sec. 3733 CH. 37—CLAIMS 180

any petition filed under subsection (j) setting forth the manner of

such service shall be proof of such service. In the case of service

by registered or certified mail, such return shall be accompanied by

the return post office receipt of delivery of such demand.

(f) DOCUMENTARY MATERIAL.— (1) SWORN CERTIFICATES.—The production of documentary

material in response to a civil investigative demand served

under this section shall be made under a sworn certificate, in

such form as the demand designates, by—

(A) in the case of a natural person, the person to whom

the demand is directed, or

(B) in the case of a person other than a natural person,

a person having knowledge of the facts and circumstances

relating to such production and authorized to act on behalf

of such person.

The certificate shall state that all of the documentary material

required by the demand and in the possession, custody, or control of the person to whom the demand is directed has been

produced and made available to the false claims law investigator identified in the demand.

(2) PRODUCTION OF MATERIALS.—Any person upon whom any

civil investigative demand for the production of documentary

material has been served under this section shall make such

material available for inspection and copying to the false

claims law investigator identified in such demand at the principal place of business of such person, or at such other place

as the false claims law investigator and the person thereafter

may agree and prescribe in writing, or as the court may direct

under subsection (j)(1). Such material shall be made so available on the return date specified in such demand, or on such

later date as the false claims law investigator may prescribe in

writing. Such person may, upon written agreement between

the person and the false claims law investigator, substitute

copies for originals of all or any part of such material.

(g) INTERROGATORIES.—Each interrogatory in a civil investigative

demand served under this section shall be answered separately and

fully in writing under oath and shall be submitted under a sworn

certificate, in such form as the demand designates, by—

(1) in the case of a natural person, the person to whom the

demand is directed, or

(2) in the case of a person other than a natural person, the

person or persons responsible for answering each interrogatory.

If any interrogatory is objected to, the reasons for the objection

shall be stated in the certificate instead of an answer. The certificate shall state that all information required by the demand

and in the possession, custody, control, or knowledge of the

person to whom the demand is directed has been submitted. To

the extent that any information is not furnished, the information shall be identified and reasons set forth with particularity

regarding the reasons why the information was not furnished.

(h) ORAL EXAMINATIONS.—

(1) PROCEDURES.—The examination of any person pursuant

to a civil investigative demand for oral testimony served under

this section shall be taken before an officer authorized to ad-
181 Sec. 3733 CH. 37—CLAIMS

minister oaths and affirmations by the laws of the United

States or of the place where the examination is held. The officer before whom the testimony is to be taken shall put the witness on oath or affirmation and shall, personally or by someone

acting under the direction of the officer and in the officer’s

presence, record the testimony of the witness. The testimony

shall be taken stenographically and shall be transcribed. When

the testimony is fully transcribed, the officer before whom the

testimony is taken shall promptly transmit a copy of the transcript of the testimony to the custodian. This subsection shall

not preclude the taking of testimony by any means authorized

by, and in a manner consistent with, the Federal Rules of Civil

Procedure.

(2) PERSONS PRESENT.—The false claims law investigator

conducting the examination shall exclude from the place where

the examination is held all persons except the person giving

the testimony, the attorney for and any other representative of

the person giving the testimony, the attorney for the Government, any person who may be agreed upon by the attorney for

the Government and the person giving the testimony, the officer before whom the testimony is to be taken, and any stenographer taking such testimony.

(3) WHERE TESTIMONY TAKEN.—The oral testimony of any

person taken pursuant to a civil investigative demand served

under this section shall be taken in the judicial district of the

United States within which such person resides, is found, or

transacts business, or in such other place as may be agreed

upon by the false claims law investigator conducting the examination and such person.

(4) TRANSCRIPT OF TESTIMONY.—When the testimony is fully

transcribed, the false claims law investigator or the officer before whom the testimony is taken shall afford the witness, who

may be accompanied by counsel, a reasonable opportunity to

examine and read the transcript, unless such examination and

reading are waived by the witness. Any changes in form or

substance which the witness desires to make shall be entered

and identified upon the transcript by the officer or the false

claims law investigator, with a statement of the reasons given

by the witness for making such changes. The transcript shall

then be signed by the witness, unless the witness in writing

waives the signing, is ill, cannot be found, or refuses to sign.

If the transcript is not signed by the witness within 30 days

after being afforded a reasonable opportunity to examine it,

the officer or the false claims law investigator shall sign it and

state on the record the fact of the waiver, illness, absence of

the witness, or the refusal to sign, together with the reasons,

if any, given therefor.

(5) CERTIFICATION AND DELIVERY TO CUSTODIAN.—The officer

before whom the testimony is taken shall certify on the transcript that the witness was sworn by the officer and that the

transcript is a true record of the testimony given by the witness, and the officer or false claims law investigator shall

promptly deliver the transcript, or send the transcript by registered or certified mail, to the custodian.
Sec. 3733 CH. 37—CLAIMS 182

(6) FURNISHING OR INSPECTION OF TRANSCRIPT BY WITNESS.— Upon payment of reasonable charges therefor, the false claims

law investigator shall furnish a copy of the transcript to the

witness only, except that the Attorney General, the Deputy Attorney General, or an Assistant Attorney General may, for

good cause, limit such witness to inspection of the official transcript of the witness’ testimony.

(7) CONDUCT OF ORAL TESTIMONY.— (A) Any person compelled to appear for oral testimony

under a civil investigative demand issued under subsection

(a) may be accompanied, represented, and advised by counsel. Counsel may advise such person, in confidence, with

respect to any question asked of such person. Such person

or counsel may object on the record to any question, in

whole or in part, and shall briefly state for the record the

reason for the objection. An objection may be made, received, and entered upon the record when it is claimed

that such person is entitled to refuse to answer the question on the grounds of any constitutional or other legal

right or privilege, including the privilege against self-incrimination. Such person may not otherwise object to or

refuse to answer any question, and may not directly or

through counsel otherwise interrupt the oral examination.

If such person refuses to answer any question, a petition

may be filed in the district court of the United States

under subsection (j)(1) for an order compelling such person

to answer such question.

(B) If such person refuses to answer any question on the

grounds of the privilege against self-incrimination, the testimony of such person may be compelled in accordance

with the provisions of part V of title 18.

(8) WITNESS FEES AND ALLOWANCES.—Any person appearing

for oral testimony under a civil investigative demand issued

under subsection (a) shall be entitled to the same fees and allowances which are paid to witnesses in the district courts of

the United States.

(i) CUSTODIANS OF DOCUMENTS, ANSWERS, AND TRANSCRIPTS.—

(1) DESIGNATION.—The Attorney General shall designate a

false claims law investigator to serve as custodian of documentary material, answers to interrogatories, and transcripts of

oral testimony received under this section, and shall designate

such additional false claims law investigators as the Attorney

General determines from time to time to be necessary to serve

as deputies to the custodian.

(2) RESPONSIBILITY FOR MATERIALS; DISCLOSURE.—

(A) A false claims law investigator who receives any documentary material, answers to interrogatories, or transcripts of oral testimony under this section shall transmit

them to the custodian. The custodian shall take physical

possession of such material, answers, or transcripts and

shall be responsible for the use made of them and for the

return of documentary material under paragraph (4).

(B) The custodian may cause the preparation of such

copies of such documentary material, answers to interrog-
183 Sec. 3733 CH. 37—CLAIMS

atories, or transcripts of oral testimony as may be required

for official use by any false claims law investigator, or

other officer or employee of the Department of Justice, who

is authorized for such use under regulations which the Attorney General shall issue. Such material, answers, and

transcripts may be used by any such authorized false

claims law investigator or other officer or employee in connection with the taking of oral testimony under this section.

(C) Except as otherwise provided in this subsection, no

documentary material, answers to interrogatories, or transcripts of oral testimony, or copies thereof, while in the

possession of the custodian, shall be available for examination by any individual other than a false claims law investigator or other officer or employee of the Department of

Justice authorized under subparagraph (B). The prohibition in the preceding sentence on the availability of material, answers, or transcripts shall not apply if consent is

given by the person who produced such material, answers,

or transcripts, or, in the case of any product of discovery

produced pursuant to an express demand for such material, consent is given by the person from whom the discovery was obtained. Nothing in this subparagraph is intended to prevent disclosure to the Congress, including any

committee or subcommittee of the Congress, or to any

other agency of the United States for use by such agency

in furtherance of its statutory responsibilities. Disclosure

of information to any such other agency shall be allowed

only upon application, made by the Attorney General to a

United States district court, showing substantial need for

the use of the information by such agency in furtherance

of its statutory responsibilities.

(D) While in the possession of the custodian and under

such reasonable terms and conditions as the Attorney General shall prescribe—

(i) documentary material and answers to interrogatories shall be available for examination by the person who produced such material or answers, or by a

representative of that person authorized by that person to examine such material and answers; and

(ii) transcripts of oral testimony shall be available

for examination by the person who produced such testimony, or by a representative of that person authorized by that person to examine such transcripts.

(3) USE OF MATERIAL, ANSWERS, OR TRANSCRIPTS IN OTHER

PROCEEDINGS.—Whenever any attorney of the Department of

Justice has been designated to appear before any court, grand

jury, or Federal agency in any case or proceeding, the custodian of any documentary material, answers to interrogatories,

or transcripts of oral testimony received under this section may

deliver to such attorney such material, answers, or transcripts

for official use in connection with any such case or proceeding

as such attorney determines to be required. Upon the completion of any such case or proceeding, such attorney shall return
Sec. 3733 CH. 37—CLAIMS 184

to the custodian any such material, answers, or transcripts so

delivered which have not passed into the control of such court,

grand jury, or agency through introduction into the record of

such case or proceeding.

(4) CONDITIONS FOR RETURN OF MATERIAL.—If any documentary material has been produced by any person in the course

of any false claims law investigation pursuant to a civil investigative demand under this section, and—

(A) any case or proceeding before the court or grand jury

arising out of such investigation, or any proceeding before

any Federal agency involving such material, has been completed, or

(B) no case or proceeding in which such material may be

used has been commenced within a reasonable time after

completion of the examination and analysis of all documentary material and other information assembled in the

course of such investigation the custodian shall, upon written request of the person who produced such material, return to such person any such material (other than copies

furnished to the false claims law investigator under subsection (f)(2) or made for the Department of Justice under

paragraph (2)(B) which has not passed into the control of

any court, grand jury, or agency through introduction into

the record of such case or proceeding.

(5) APPOINTMENT OF SUCCESSOR CUSTODIANS.—In the event

of the death, disability, or separation from service in the Department of Justice of the custodian of any documentary material, answers to interrogatories, or transcripts of oral testimony

produced pursuant to a civil investigative demand under this

section, or in the event of the official relief of such custodian

from responsibility for the custody and control of such material, answers, or transcripts, the Attorney General shall

promptly—

(A) designate another false claims law investigator to

serve as custodian of such material, answers, or transcripts, and

(B) transmit in writing to the person who produced such

material, answers, or testimony notice of the identity and

address of the successor so designated.

Any person who is designated to be a successor under this

paragraph shall have, with regard to such material, answers,

or transcripts, the same duties and responsibilities as were imposed by this section upon that person’s predecessor in office,

except that the successor shall not be held responsible for any

default or dereliction which occurred before that designation.

(j) JUDICIAL PROCEEDINGS.—

(1) PETITION FOR ENFORCEMENT.—Whenever any person fails

to comply with any civil investigative demand issued under

subsection (a), or whenever satisfactory copying or reproduction of any material requested in such demand cannot be done

and such person refuses to surrender such material, the Attorney General may file, in the district court of the United States

for any judicial district in which such person resides, is found,

or transacts business, and serve upon such person a petition
185 Sec. 3733 CH. 37—CLAIMS

for an order of such court for the enforcement of the civil investigative demand.

(2) PETITION TO MODIFY OR SET ASIDE DEMAND.—

(A) Any person who has received a civil investigative demand issued under subsection (a) may file, in the district

court of the United States for the judicial district within

which such person resides, is found, or transacts business,

and serve upon the false claims law investigator identified

in such demand a petition for an order of the court to modify or set aside such demand. In the case of a petition addressed to an express demand for any product of discovery,

a petition to modify or set aside such demand may be

brought only in the district court of the United States for

the judicial district in which the proceeding in which such

discovery was obtained is or was last pending. Any petition

under this subparagraph must be filed—

(i) within 20 days after the date of service of the

civil investigative demand, or at any time before the

return date specified in the demand, whichever date is

earlier, or

(ii) within such longer period as may be prescribed

in writing by any false claims law investigator identified in the demand.

(B) The petition shall specify each ground upon which

the petitioner relies in seeking relief under subparagraph

(A), and may be based upon any failure of the demand to

comply with the provisions of this section or upon any constitutional or other legal right or privilege of such person.

During the pendency of the petition in the court, the court

may stay, as it deems proper, the running of the time allowed for compliance with the demand, in whole or in part,

except that the person filing the petition shall comply with

any portions of the demand not sought to be modified or

set aside.

(3) PETITION TO MODIFY OR SET ASIDE DEMAND FOR PRODUCT

OF DISCOVERY.—

(A) In the case of any civil investigative demand issued

under subsection (a) which is an express demand for any

product of discovery, the person from whom such discovery

was obtained may file, in the district court of the United

States for the judicial district in which the proceeding in

which such discovery was obtained is or was last pending,

and serve upon any false claims law investigator identified

in the demand and upon the recipient of the demand, a petition for an order of such court to modify or set aside

those portions of the demand requiring production of any

such product of discovery. Any petition under this subparagraph must be filed—

(i) within 20 days after the date of service of the

civil investigative demand, or at any time before the

return date specified in the demand, whichever date is

earlier, or
Sec. 3733 CH. 37—CLAIMS 186

(ii) within such longer period as may be prescribed

in writing by any false claims law investigator identified in the demand.

(B) The petition shall specify each ground upon which

the petitioner relies in seeking relief under subparagraph

(A), and may be based upon any failure of the portions of

the demand from which relief is sought to comply with the

provisions of this section, or upon any constitutional or

other legal right or privilege of the petitioner. During the

pendency of the petition, the court may stay, as it deems

proper, compliance with the demand and the running of

the time allowed for compliance with the demand.

(4) PETITION TO REQUIRE PERFORMANCE BY CUSTODIAN OF DUTIES.—At any time during which any custodian is in custody

or control of any documentary material or answers to interrogatories produced, or transcripts of oral testimony given, by any

person in compliance with any civil investigative demand issued under subsection (a), such person, and in the case of an

express demand for any product of discovery, the person from

whom such discovery was obtained, may file, in the district

court of the United States for the judicial district within which

the office of such custodian is situated, and serve upon such

custodian, a petition for an order of such court to require the

performance by the custodian of any duty imposed upon the

custodian by this section.

(5) JURISDICTION.—Whenever any petition is filed in any district court of the United States under this subsection, such

court shall have jurisdiction to hear and determine the matter

so presented, and to enter such order or orders as may be required to carry out the provisions of this section. Any final

order so entered shall be subject to appeal under section 1291

of title 28. Any disobedience of any final order entered under

this section by any court shall be punished as a contempt of

the court.

(6) APPLICABILITY OF FEDERAL RULES OF CIVIL PROCEDURE.—

The Federal Rules of Civil Procedure shall apply to any petition under this subsection, to the extent that such rules are

not inconsistent with the provisions of this section.

(k) DISCLOSURE EXEMPTION.—Any documentary material, answers to written interrogatories, or oral testimony provided under

any civil investigative demand issued under subsection (a) shall be

exempt from disclosure under section 552 of title 5.

(l) DEFINITIONS.—For purposes of this section—

(1) the term ‘‘false claims law’’ means—

(A) this section and sections 3729 through 3732; and

(B) any Act of Congress enacted after the date of the enactment of this section which prohibits, or makes available

to the United States in any court of the United States any

civil remedy with respect to, any false claim against, bribery of, or corruption of any officer or employee of the United States;

(2) the term ‘‘false claims law investigation’’ means any inquiry conducted by any false claims law investigator for the
187 Sec. 3733 CH. 37—CLAIMS

purpose of ascertaining whether any person is or has been engaged in any violation of a false claims law;

(3) the term ‘‘false claims law investigator’’ means any attorney or investigator employed by the Department of Justice who

is charged with the duty of enforcing or carrying into effect any

false claims law, or any officer or employee of the United

States acting under the direction and supervision of such attorney or investigator in connection with a false claims law investigation;

(4) the term ‘‘person’’ means any natural person, partnership, corporation, association, or other legal entity, including

any State or political subdivision of a State;

(5) the term ‘‘documentary material’’ includes the original or

any copy of any book, record, report, memorandum, paper,

communication, tabulation, chart, or other document, or data

compilations stored in or accessible through computer or other

information retrieval systems, together with instructions and

all other materials necessary to use or interpret such data

compilations, and any product of discovery;

(6) the term ‘‘custodian’’ means the custodian, or any deputy

custodian, designated by the Attorney General under subsection (i)(1); and

(7) the term ‘‘product of discovery’’ includes—

(A) the original or duplicate of any deposition, interrogatory, document, thing, result of the inspection of land or

other property, examination, or admission, which is obtained by any method of discovery in any judicial or administrative proceeding of an adversarial nature;

(B) any digest, analysis, selection, compilation, or derivation of any item listed in subparagraph (A); and

(C) any index or other manner of access to any item listed in subparagraph (A).

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

3701 et seq ................................. 34 C.F.R. 198, 204, 296; 44 C.F.R. 11

3701–3731 .................................. 45 C.F.R. 30

3701–3720A ................................ 49 C.F.R. 89

3701–3719 .................................. 10 C.F.R. 15, 1015; 12 C.F.R. 608, 1408; 22 C.F.R. 34, 309; 29 C.F.R. 1450; 41 C.F.R.

105–55

3701 ............................................ 7 C.F.R. 3, 792, 17 C.F.R. 204; 22 C.F.R. 512; 29 C.F.R. 2609; 31 C.F.R. 5, 390, 391; 32

C.F.R. 842; 38 C.F.R. 1; 47 C.F.R. 1; 49 C.F.R. 1018

3702 ............................................ 4 C.F.R. 30, 31, 35, 36

3710 ............................................ 32 C.F.R. 518

3711 et seq ................................. 4 C.F.R. 102; 22 C.F.R. 512; 29 C.F.R. 20; 40 C.F.R. 13; 44 C.F.R. 11; 47 C.F.R. 1; 49

C.F.R. 1018

3711–3719 .................................. 38 C.F.R. 1

3711 ............................................ 4 C.F.R. 101, 103–105; 7 C.F.R. 3, 1956, 3711; 10 C.F.R. 16; 17 C.F.R. 204; 22 C.F.R.

1506; 24 C.F.R. 17; 31 C.F.R. 5, 240, 390, 391; 34 C.F.R. 30, 31; 42 C.F.R. 405, 408;

45 C.F.R. 31, 708, 1177; 49 C.F.R. 1

OMB: Circular 50, see appendix IV

3713 ............................................ 19 C.F.R. 141

3716 et seq ................................. 30 C.F.R. 207, 210, 230

3716–3719 .................................. 7 C.F.R. 3, 792; 45 C.F.R. 1177

3716–3718 .................................. 10 C.F.R. 16; 24 C.F.R. 17
Sec. 3733 CH. 37—CLAIMS 188

31 U.S.C. Requirements or Guidelines

3716–3717 .................................. 31 C.F.R. 240

3716 ............................................ 15 C.F.R. 21; 17 C.F.R. 204; 20 C.F.R. 367; 24 C.F.R. 17; 29 C.F.R. 2609; 30 C.F.R. 216,

218; 31 C.F.R. 5, 390; 34 C.F.R. 30–32; 45 C.F.R. 31, 608; 49 C.F.R. 1017

OMB: Circular 50, see appendix IV

3717–3718 .................................. 34 C.F.R. 30

3717 ............................................ 12 C.F.R. 701; 15 C.F.R. 4, 60; 24 C.F.R. 17; 28 C.F.R. 16, 505; 31 C.F.R. 391

OMB: Circular 50, see appendix IV

3718 ............................................ 17 C.F.R. 204; 24 C.F.R. 17; 28 C.F.R. 11; 45 C.F.R. 31, 608

3719 ............................................ OMB: Circular A–50, appendix IV

3720 ............................................ 31 C.F.R. 5, 206

OMB: Circular A–129, see appendix IV

TFM, Volume 1, Part 6, Chapter 8000, see appendix V

3720A .......................................... 5 C.F.R. 835; 7 C.F.R. 3, 1951; 10 C.F.R. 1018; 13 C.F.R. 140; 15 C.F.R. 19; 17 C.F.R.

204; 20 C.F.R. 366; 22 C.F.R. 139, 309; 24 C.F.R. 17; 26 C.F.R. 301; 28 C.F.R. 11; 9

C.F.R. 1650, 2609; 30 C.F.R. 216, 218, 230; 1 C.F.R. 5; 34 C.F.R. 30; 40 C.F.R. 13;

41 C.F.R. 105–57; 45 C.F.R. 31, 608

TFM, Volume 1, Part 5, Chapters 4600 and 4700, see appendix V

3721 ............................................ 14 C.F.R. 1261; 24 C.F.R. 17; 31 C.F.R. 4; 32 C.F.R. 842; 38 C.F.R. 14; 40 C.F.R. 14; 44

C.F.R. 11; 46 C.F.R. 501

3726 ............................................ 41 C.F.R. 101–41

3728 ............................................ 7 C.F.R. 3, 792, OMB: Circular A–50, see appendix IV

3729–3731 .................................. 38 C.F.R. 21

3729 ............................................ 32 C.F.R. 516
189

TITLE 31—MONEY AND FINANCE

Subtitle III—Financial Management

* * * * * * *

CHAPTER 39—PROMPT PAYMENT

SEC. 3901. DEFINITIONS AND APPLICATION.

(a) In this chapter—

(1) ‘‘agency’’ has the same meaning given that term in section 551(1) of title 5 and includes an entity being operated, and

the head of the agency identifies the entity as being operated,

only as an instrumentality of the agency to carry out a program of the agency.

(2) ‘‘business concern’’ means—

(A) a person carrying on a trade or business; and

(B) a nonprofit entity operating as a contractor.

(3) ‘‘proper invoice’’ is an invoice containing or accompanied

by substantiating documentation the Director of the Office of

Management and Budget may require by regulation and the

head of the appropriate agency may require by regulation or

contract.

(4) for the purposes of determining a payment due date and

the date upon which any late payment interest penalty shall

begin to accrue, the head of the agency is deemed to receive

an invoice—

(A) on the later of—

(i) the date on which the place or person designated

by the agency to first receive such invoice actually receives a proper invoice; or

(ii) on the 7th day after the date on which, in accordance with the terms and conditions of the contract, the property is actually delivered or performance

of the services is actually completed, as the case may

be, unless—

(I) the agency has actually accepted such property or services before such 7th day; or

(II) the contract (except in the case of a contract

for the procurement of a brand-name commercial

item for authorized resale) specifies a longer acceptance period, as determined by the contracting

officer to be required to afford the agency a practicable opportunity to inspect and test the property furnished or evaluate the services performed;

or

(B) on the date of the invoice, if the agency has failed

to annotate the invoice with the date of receipt at the time
Sec. 3902 CH. 39—PROMPT PAYMENT 190

of actual receipt by the place or person designated by the

agency to first receive such invoice.

(5) a payment is deemed to be made on the date a check for

payment is dated or an electronic fund transfer is made.

(6) a contract to rent property is deemed to be a contract to

acquire the property.

(b) This chapter applies to the Tennessee Valley Authority. However, regulations prescribed under this chapter do not apply to the

Authority, and the Authority alone is responsible for carrying out

this chapter as it applies to contracts of the Authority.

(c) This chapter, except section 3906 of this title, applies to the

United States Postal Service. However, the Postmaster General

shall be responsible for issuing the implementing procurement regulations, solicitation provisions, and contract clauses for the United

States Postal Service.

SEC. 3902. INTEREST PENALTIES.

(a) Under regulations prescribed under section 3903 of this title,

the head of an agency acquiring property or service from a business

concern, who does not pay the concern for each complete delivered

item of property or service by the required payment date, shall pay

an interest penalty to the concern on the amount of the payment

due. The interest shall be computed at the rate of interest established by the Secretary of the Treasury, and published in the Federal Register, for interest payments under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611), which is in effect at the

time the agency accrues the obligation to pay a late payment interest penalty.

(b) Except as provided in section 3906 of this title, the interest

penalty shall be paid for the period beginning on the day after the

required payment date and ending on the date on which payment

is made.

(c)(1) A business concern shall be entitled to an interest penalty

of $1.00 or more which is owed such business concern under this

section, and such penalty shall be paid without regard to whether

the business concern has requested payment of such penalty.

(2) Each payment subject to this chapter for which a late payment interest penalty is required to be paid shall be accompanied

by a notice stating the amount of the interest penalty included in

such payment and the rate by which, and period for which, such

penalty was computed.

(3) If a business concern—

(A) is owed an interest penalty by an agency;

(B) is not paid the interest penalty in a payment made to the

business concern by the agency on or after the date on which

the interest penalty becomes due;

(C) is not paid the interest penalty by the agency within 10

days after the date on which such payment is made; and

(D) makes a written demand, not later than 40 days after

the date on which such payment is made, that the agency pay

such a penalty,

such business concern shall be entitled to an amount equal to the

sum of the late payment interest penalty to which the contractor

is entitled and an additional penalty equal to a percentage of such
191 Sec. 3902 CH. 39—PROMPT PAYMENT

late payment interest penalty specified by regulation by the Director of the Office of Management and Budget, subject to such maximum as may be specified in such regulations.

(d) The temporary unavailability of funds to make a timely payment due for property or services does not relieve the head of an

agency from the obligation to pay interest penalties under this section.

(e) An amount of an interest penalty unpaid after any 30-day period shall be added to the principal amount of the debt, and a penalty accrues thereafter on the added amount.

(f) This section does not authorize the appropriation of additional

amounts to pay an interest penalty. The head of an agency shall

pay a penalty under this section out of amounts made available to

carry out the program for which the penalty is incurred.

(g) A recipient of a grant from the head of an agency may provide

in a contract for the acquisition of property or service from a business concern that, consistent with the usual business practices of

the recipient and applicable State and local law, the recipient will

pay an interest penalty on amounts overdue under the contract

under conditions agreed to by the recipient and the concern. The

recipient may not pay the penalty from amounts received from an

agency. Amounts expended for the penalty may not be counted toward a matching requirement applicable to the grant. An obligation to pay the penalty is not an obligation of the United States

Government.

(h)(1) This section shall apply to contracts for the procurement

of property or services entered into pursuant to section 4(h) of the

Act of June 29, 1948 (15 U.S.C. 714b(h)).

(2)(A) In the case of a payment to which producers on a farm are

entitled under the terms of an agreement entered into under the

Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), an interest penalty

shall be paid to the producers if the payment has not been made

by the required payment or loan closing date. The interest penalty

shall be paid—

(i) on the amount of payment or loan due; and

(ii) for the period beginning on the first day beginning after

the required payment or loan closing date and ending on the

date the amount is paid or loaned.

(B) As used in this subsection, the ‘‘required payment or loan

closing date’’ means—

(i) for a purchase agreement, the 30th day after delivery of

the warehouse receipt for the commodity subject to the purchase agreement;

(ii) for a loan agreement, the 30th day beginning after the

date of receipt of an application with all requisite documentation and signatures, unless the applicant requests that the disbursement be deferred;

(iii) for refund of amounts received greater than the amount

required to repay a commodity loan, the first business day

after the Commodity Credit Corporation receives payment for

such loan;

(iv) for land diversion payments (other than advance payments), the 30th day beginning after the date of completion of

the production adjustment contract by the producer;
Sec. 3903 CH. 39—PROMPT PAYMENT 192

(v) for an advance land diversion payment, 30 days after the

date the Commodity Credit Corporation executes the contract

with the producer;

(vi) for a deficiency payment (other than advance payments)

based upon a 12-month or 5-month period, 91 days after the

end of such period; or

(vii) for an advance deficiency payment, 30 days after the

date the Commodity Credit Corporation executes the contract

with the producer.

(3) Payment of the interest penalty under this subsection shall

be made out of funds available under section 8 of the Act of June

29, 1948 (15 U.S.C. 714f).

(4) Section 3907 of this title shall not apply to interest penalty

payments made under this subsection.

SEC. 3903. REGULATIONS.

(a) The Director of the Office of Management and Budget shall

prescribe regulations to carry out section 3902 of this title. The regulations shall—

(1) provide that the required payment date is—

(A) the date payment is due under the contract for the

item of property or service provided; or

(B) 30 days after a proper invoice for the amount due is

received if a specific payment date is not established by

contract;

(2) for the acquisition of meat or a meat food product (as defined in section 2(a)(3) of the Packers and Stockyards Act, 1921

(7 U.S.C. 182(3)), including any edible fresh or frozen poultry

meat, any perishable poultry meat food product, fresh eggs,

and any perishable egg product, or of fresh or frozen fish (as

defined in section 204(3) of the Fish and Seafood Promotion

Act of 1986 (16 U.S.C. 4003(3)), provide a required payment

date of not later than 7 days after the meat, meat food product,

or fish is delivered; and

(3) for the acquisition of a perishable agricultural commodity

(as defined in section 1(4) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a(4))), provide a required payment date consistent with that Act;

(4) for the acquisition of dairy products (as defined in section

111(e) of the Dairy Production Stabilization Act of 1983 (7

U.S.C. 4502(e)), the acquisition of edible fats or oils, and the

acquisition of food products prepared from edible fats or oils,

provide a required payment date of not later than 10 days

after the date on which a proper invoice for the amount due

has been received by the agency acquiring such dairy products,

fats, oils, or food products;

(5) require periodic payments, in the case of a property or

service contract which does not prohibit periodic payments for

partial deliveries or other contract performance during the contract period, upon—

(A) submission of an invoice for property delivered or

services performed during the contract period, if an invoice

is required by the contract; and

(B) either—
193 Sec. 3903 CH. 39—PROMPT PAYMENT

(i) acceptance of the property or services by an employee

of an agency authorized to accept the property or services;

or

(ii) the making of a determination by such an employee,

that the performance covered by the payment conforms to

the terms and conditions of the contract;

(6) in the case of a construction contract, provide for the payment

of interest on—

(A) a progress payment (including a monthly percentage-ofcompletion progress payment or milestone payments for completed phases, increments, or segments of any project) that is

approved as payable by the agency pursuant to subsection (b)

of this section and remains unpaid for—

(i) a period of more than 14 days after receipt of the payment request by the place or person designated by the

agency to first receive such requests; or

(ii) a longer period, specified in the solicitation, if required to afford the Government a practicable opportunity

to adequately inspect the work and to determine the adequacy of the contractor’s performance under the contract;

and

(B) any amounts which the agency has retained pursuant to

a prime contract clause providing for retaining a percentage of

progress payments otherwise due to a contractor and that are

approved for release to the contractor, if such retained

amounts are not paid to the contractor by a date specified in

the contract or, in the absence of such a specified date, by the

30th day after final acceptance;

(7) require that—

(A) each invoice be reviewed as soon as practicable after receipt for the purpose of determining that such an invoice is a

proper invoice within the meaning of section 3901(a)(3) of this

title;

(B) any invoice determined not to be such a proper invoice

suitable for payment shall be returned as soon as practicable,

but not later than 7 days, after receipt, specifying the reasons

that the invoice is not a proper invoice; and

(C) the number of days available to an agency to make a

timely payment of an invoice without incurring an interest

penalty shall be reduced by the number of days by which an

agency exceeds the requirements of subparagraph (B) of this

paragraph;

(8) permit an agency to make payment up to 7 days prior to the

required payment date, or earlier as determined by the agency to

be necessary on a case-by-case basis; and

(9) prescribe the methods for computing interest under section

3903(c) of this title.

(b)(1) A payment request may not be approved under subsection

(a)(6)(A) of this section unless the application for such payment includes—

(A) substantiation of the amounts requested; and

(B) a certification by the prime contractor, to the best of the

contractor’s knowledge and belief, that—
Sec. 3904 CH. 39—PROMPT PAYMENT 194

(i) the amounts requested are only for performance in accordance with the specifications, terms, and conditions of

the contract;

(ii) payments to subcontractors and suppliers have been

made from previous payments received under the contract,

and timely payments will be made from the proceeds of the

payment covered by the certification, in accordance with

their subcontract agreements and the requirements of this

chapter; and

(iii) the application does not include any amounts which

the prime contractor intends to withhold or retain from a

subcontractor or supplier in accordance with the terms and

conditions of their subcontract.

(2) The agency shall return any such payment request which is

defective to the contractor within 7 days after receipt, with a statement identifying the defect.

(c)(1) The contracting officer shall—

(A) compute the interest which a contractor shall be obligated to pay under sections 3905(a)(2) and 3905(e)(6) of this

title on the basis of the average bond equivalent rates of 91-

day Treasury bills auctioned at the most recent auction of such

bills prior to the date the contractor received the unearned

amount; and

(B) deduct the interest amount determined under subparagraph (A) of this paragraph from the next available payment

to the contractor.

(2) Amounts deducted from payments to contractors under paragraph (1)(B) shall revert to the Treasury.

SEC. 3904. LIMITATIONS ON DISCOUNT PAYMENTS.

The head of an agency offered a discount by a business concern

from an amount due under a contract for property or service in exchange for payment within a specified time may pay the discounted

amount only if payment is made within the specified time. For the

purpose of the preceding sentence, the specified time shall be determined from the date of the invoice. The head of the agency shall

pay an interest penalty on an amount remaining unpaid in violation of this section. The penalty accrues as provided under sections

3902 and 3903 of this title, except that the required payment date

for the unpaid amount is the last day specified in the contract that

the discounted amount may be paid.

SEC. 3905. PAYMENT PROVISIONS RELATING TO CONSTRUCTION CONTRACTS.

(a) In the event that a contractor, after making a certified payment request to an agency pursuant to section 3903(b) of this title,

discovers that a portion or all of such payment request constitutes

a payment for performance by such contractor that fails to conform

to the specifications, terms, and conditions of its contract (hereafter

in this subsection referred to as the ‘‘unearned amount’’), then the

contractor shall—

(1) notify the agency of such performance deficiency; and

(2) be obligated to pay the Government an amount equal to

interest on the unearned amount (computed in the manner
195 Sec. 3905 CH. 39—PROMPT PAYMENT

provided in section 3903(c) of this title), from the date of the

contractor’s receipt of such unearned amount until—

(A) the date the contractor notifies the agency that the

performance deficiency has been corrected; or

(B) the date the contractor reduces the amount of any

subsequent certified application for payment to such agency by an amount equal to the unearned amount.

(b) Each construction contract awarded by an agency shall include a clause that requires the prime contractor to include in each

subcontract for property or services entered into by the prime contractor and a subcontractor (including a material supplier) for the

purpose of performing such construction contract—

(1) a payment clause which obligates the prime contractor to

pay the subcontractor for satisfactory performance under its

subcontract within 7 days out of such amounts as are paid to

the prime contractor by the agency under such contract; and

(2) an interest penalty clause which obligates the prime contractor to pay to the subcontractor an interest penalty on

amounts due in the case of each payment not made in accordance with the payment clause included in the subcontract pursuant to paragraph (1) of this subsection—

(A) for the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and

(B) computed at the rate specified by section 3902(a) of

this title.

(c) The construction contract awarded by the agency shall further

require the prime contractor to include in each of its subcontracts

(for the purpose of performance of such construction contract) a

provision requiring the subcontractor to include a payment clause

and an interest penalty clause conforming to the standards of subsection (b) of this section in each of its subcontracts and to require

each of its subcontractors to include such clauses in their subcontracts with each lower-tier subcontractor or supplier.

(d) The clauses required by subsections (b) and (c) of this section

shall not be construed to impair the right of a prime contractor or

a subcontractor at any tier to negotiate, and to conclude in their

subcontract, provisions which—

(1) permit the prime contractor or a subcontractor to retain

(without cause) a specified percentage of each progress payment otherwise due to a subcontractor for satisfactory performance under the subcontract, without incurring any obligation to

pay a late payment interest penalty, in accordance with terms

and conditions agreed to by the parties to the subcontract, giving such recognition as the parties deem appropriate to the

ability of a subcontractor to furnish a performance bond and a

payment bond;

(2) permit the contractor or subcontractor to make a determination that part or all of the subcontractor’s request for payment may be withheld in accordance with the subcontract

agreement; and

(3) permit such withholding without incurring any obligation

to pay a late payment penalty if—
Sec. 3905 CH. 39—PROMPT PAYMENT 196

(A) a notice conforming to the standards of subsection (g)

of this section has been previously furnished to the subcontractor; and

(B) a copy of any notice issued by a prime contractor

pursuant to subparagraph (A) of this paragraph has been

furnished to the Government.

(e) If a prime contractor, after making application to an agency

for payment under a contract but before making a payment to a

subcontractor for the subcontractor’s performance covered by such

application, discovers that all or a portion of the payment otherwise due such subcontractor is subject to withholding from the subcontractor in accordance with the subcontract agreement, then the

prime contractor shall—

(1) furnish to the subcontractor a notice conforming to the

standards of subsection (g) of this section as soon as practicable upon ascertaining the cause giving rise to a withholding, but prior to the due date for subcontractor payment;

(2) furnish to the Government, as soon as practicable, a copy

of the notice furnished to the subcontractor pursuant to paragraph (1) of this subsection;

(3) reduce the subcontractor’s progress payment by an

amount not to exceed the amount specified in the notice of

withholding furnished under paragraph (1) of this subsection;

(4) pay the subcontractor as soon as practicable after the correction of the identified subcontract performance deficiency,

and—

(A) make such payment within—

(i) 7 days after correction of the identified subcontract performance deficiency (unless the funds

therefor must be recovered from the Government because of a reduction under paragraph (5)(A)); or

(ii) 7 days after the contractor recovers such funds

from the Government; or

(B) incur an obligation to pay a late payment interest

penalty computed at the rate specified by section 3902(a)

of this title;

(5) notify the Government, upon—

(A) reduction of the amount of any subsequent certified

application for payment; or

(B) payment to the subcontractor of any withheld

amounts of a progress payment, specifying—

(i) the amounts of the progress payments withheld

under paragraph (1) of this subsection; and

(ii) the dates that such withholding began and

ended; and

(6) be obligated to pay to the Government an amount equal

to interest on the withheld payments (computed in the manner

provided in section 3903(c) of this title), from the 8th day after

receipt of the withheld amounts from the Government until—

(A) the day the identified subcontractor performance deficiency is corrected; or

(B) the date that any subsequent payment is reduced

under paragraph (5)(A).
197 Sec. 3905 CH. 39—PROMPT PAYMENT

(f)(1) If a prime contractor, after making payment to a first-tier

subcontractor, receives from a supplier or subcontractor of the firsttier subcontractor (hereafter referred to as a ‘‘second-tier subcontractor’’) a written notice in accordance with section 2 of the Act

of August 24, 1935 (40 U.S.C. 270b), asserting a deficiency in such

first-tier subcontractor’s performance under the contract for which

the prime contractor may be ultimately liable, and the prime contractor determines that all or a portion of future payments otherwise due such first-tier subcontractor is subject to withholding in

accordance with the subcontract agreement, then the prime contractor may, without incurring an obligation to pay an interest penalty under subsection (e)(6) of this section—

(A) furnish to the first-tier subcontractor a notice conforming

to the standards of subsection (g) of this section as soon as

practicable upon making such determination; and

(B) withhold from the first-tier subcontractor’s next available

progress payment or payments an amount not to exceed the

amount specified in the notice of withholding furnished under

subparagraph (A) of this paragraph.

(2) As soon as practicable, but not later than 7 days after receipt

of satisfactory written notification that the identified subcontract

performance deficiency has been corrected, the prime contractor

shall pay the amount withheld under paragraph (1)(B) of this subsection to such first-tier subcontractor, or shall incur an obligation

to pay a late payment interest penalty to such first-tier subcontractor computed at the rate specified by section 3902(a) of this title.

(g) A written notice of any withholding shall be issued to a subcontractor (with a copy to the Government of any such notice issued by a prime contractor), specifying—

(1) the amount to be withheld;

(2) the specific causes for the withholding under the terms

of the subcontract; and

(3) the remedial actions to be taken by the subcontractor in

order to receive payment of the amounts withheld.

(h) A prime contractor may not request payment from the agency

of any amount withheld or retained in accordance with subsection

(d) of this section until such time as the prime contractor has determined and certified to the agency that the subcontractor is entitled to the payment of such amount.

(i) A dispute between a contractor and subcontractor relating to

the amount or entitlement of a subcontractor to a payment or a

late payment interest penalty under a clause included in the subcontract pursuant to subsection (b) or (c) of this section does not

constitute a dispute to which the United States is a party. The

United States may not be interpleaded in any judicial or administrative proceeding involving such a dispute.

(j) Except as provided in subsection (i) of this section, this section

shall not limit or impair any contractual, administrative, or judicial

remedies otherwise available to a contractor or a subcontractor in

the event of a dispute involving late payment or nonpayment by a

prime contractor or deficient subcontract performance or nonperformance by a subcontractor.

(k) A contractor’s obligation to pay an interest penalty to a subcontractor pursuant to the clauses included in a subcontract under
Sec. 3906 CH. 39—PROMPT PAYMENT 198

subsection (b) or (c) of this section may not be construed to be an

obligation of the United States for such interest penalty. A contract

modification may not be made for the purpose of providing reimbursement of such interest penalty. A cost reimbursement claim

may not include any amount for reimbursement of such interest

penalty.

SEC. 3906. REPORTS.

(a)(1) By the 60th day after the end of the fiscal year, the head

of each agency shall submit to the Director of the Office of Management and Budget a report on the agency’s payment practices during that fiscal year, including a description of the extent to which

those practices satisfy the requirements of this chapter.

(2) In addition to such other information as may be required by

the Director, the report required by paragraph (1) shall include—

(A) the number, dollar value, and percentage of invoices for

which interest or other late payment penalties were paid, the

amount of such late payment interest and other penalties, and

the reasons the interest penalties were not avoided by prompt

payment; and

(B) the number, dollar value, and percentage of invoices paid

after the required payment date without payment of an interest penalty or other late payment penalty, and the reasons no

obligation to pay such penalties was incurred with respect to

such invoices or no amount for such penalties were included in

the payments of such invoices.

(b) By the 120th day after the end of each fiscal year, the Director shall submit to the Committees on Governmental Affairs, Appropriations, and Small Business of the Senate and the Committees on Government Operations, Appropriations, and Small Business of the House of Representatives a report on agency compliance

with this chapter. The report shall include a summary of the report

of each agency submitted under subsection (a) of this section and

an analysis of progress made in reducing interest penalty payments

by that agency from prior years.

SEC. 3907. RELATIONSHIP TO OTHER LAWS.

(a) A claim for an interest penalty not paid under this chapter

may be filed under section 6 of the Contract Disputes Act of 1978

(41 U.S.C. 605).

(b)(1) An interest penalty under this chapter does not continue

to accrue—

(A) after a claim for a penalty is filed under the Contract

Disputes Act of 1978 (41 U.S.C. 601 et seq.); or

(B) for more than one year.

(2) Paragraph (1) of this subsection does not prevent an interest

penalty from accruing under section 12 of the Contract Disputes

Act of 1978 (41 U.S.C. 611) after a penalty stops accruing under

this chapter. A penalty accruing under section 12 may accrue on

an unpaid contract payment and on the unpaid penalty under this

chapter.

(c) Except as provided in section 3904 of this title, this chapter

does not require an interest penalty on a payment that is not made

because of a dispute between the head of an agency and a business

concern over the amount of payment or compliance with the con-
199 Sec. 3907 CH. 39—PROMPT PAYMENT

tract. A claim related to the dispute, and interest payable for the

period during which the dispute is being resolved, is subject to the

Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.).

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements of guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

3901–3906 .................................. 48 C.F.R. 2432

3903(a) ........................................ OMB: Circular A–125, see appendix IV
200

TITLE 31—MONEY AND FINANCE

Subtitle V—General Assistance Administration

* * * * * * *

CHAPTER 75—REQUIREMENTS FOR SINGLE AUDITS

SEC. 7501. DEFINITIONS.

As used in this chapter, the term—

(1) ‘‘cognizant agency’’ means a Federal agency which is assigned by the Director with the responsibility for implementing

the requirements of this chapter with respect to a particular

State or local government.

(2) ‘‘Comptroller General’’ means the Comptroller General of

the United States.

(3) ‘‘Director’’ means the Director of the Office of Management and Budget.

(4) ‘‘Federal financial assistance’’ means assistance provided

by a Federal agency in the form of grants, contracts, loans,

loan guarantees, property, cooperative agreements, interest

subsidies, insurance, or direct appropriations, but does not include direct Federal cash assistance to individuals.

(5) ‘‘Federal agency’’ has the same meaning as the term

‘‘agency’’ in section 551(1) of title 5, United States Code.

(6) ‘‘generally accepted accounting principles’’ has the meaning specified in the generally accepted government auditing

standards.

(7) ‘‘generally accepted government auditing standards’’

means the standards for audit of governmental organizations,

programs, activities, and functions, issued by the Comptroller

General.

(8) ‘‘independent auditor’’ means—

(A) an external State or local government auditor who

meets the independence standards included in generally

accepted government auditing standards, or

(B) a public accountant who meets such independence

standards.

(9) ‘‘internal controls’’ means the plan of organization and

methods and procedures adopted by management to ensure

that—

(A) resource use is consistent with laws, regulations, and

policies;

(B) resources are safeguarded against waste, loss and

misuse; and

(C) reliable data are obtained, maintained, and fairly

disclosed in reports.
201 Sec. 7501 CH. 75—REQUIREMENTS FOR SINGLE AUDITS

(10) ‘‘Indian tribe’’ means any Indian tribe, band, nation, or

other organized group or community, including any Alaskan

Native village or regional or village corporation (as defined in,

or established under, the Alaskan Native Claims Settlement

Act) that is recognized by the United States as eligible for the

special programs and services provided by the United States to

Indians because of their status as Indians.

(11) ‘‘local government’’ means any unit of local government

within a State, including a county, borough, municipality, city,

town, township, parish, local public authority, special district,

school district, intrastate district, council of governments, and

any other instrumentality of local government.

(12) ‘‘major Federal assistance program’’ means any program

for which total expenditures of Federal financial assistance by

the State or local government during the applicable year exceed—

(A) $20,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $7,000,000,000; (B) $19,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $6,000,000,000 but are less than or equal to

$7,000,000,000;

(C) $16,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $5,000,000,000 but are less than or equal to

$6,000,000,000;

(D) $13,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $4,000,000,000 but are less than or equal to

$5,000,000,000;

(E) $10,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $3,000,000,000 but are less than or equal to

$4,000,000,000;

(F) $7,000,000 in the case of a State or local government

for which such total expenditures for all programs exceed

$2,000,000,000 but are less than or equal to

$3,000,000,000;

(G) $4,000,000 in the case of a State or local government

for which such total expenditures for all programs exceed

$1,000,000,000 but are less than or equal to

$2,000,000,000;

(H) $3,000,000 in the case of a State or local government

for which such total expenditures for all programs exceed

$100,000,000 but are less than or equal to $1,000,000,000;

and

(I) the larger of (i) $300,000, or (ii) 3 percent of such

total expenditures for all programs, in the case of a State

or local government for which such total expenditures for

all programs exceed $100,000 but are less than or equal to

$100,000,000.

(13) ‘‘public accountants’’ means those individuals who meet

the qualification standards included in generally accepted gov-
Sec. 7502 CH. 75—REQUIREMENTS FOR SINGLE AUDITS 202

ernment auditing standards for personnel performing government audits.

(14) ‘‘State’’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of

the Northern Mariana Islands, and the Trust Territory of the

Pacific Islands, any instrumentality thereof, any multi-State,

regional, or interstate entity which has governmental functions, and any Indian tribe.

(15) ‘‘subrecipient’’ means any person or government department, agency, or establishment that receives Federal financial

assistance through a State or local government, but does not

include an individual that receives such assistance.

SEC. 7502. AUDIT REQUIREMENTS; EXEMPTIONS.

(a)(1)(A) Each State and local government which receives a total

amount of Federal financial assistance equal to or in excess of

$100,000 in any fiscal year of such government shall have an audit

made for such fiscal year in accordance with the requirements of

this chapter and the requirements of the regulations prescribed

pursuant to section 7505 of this title.

(B) Each State and local government that receives a total amount

of Federal financial assistance which is equal to or in excess of

$25,000 but less than $100,000 in any fiscal year of such government shall—

(i) have an audit made for such fiscal year in accordance

with the requirements of this chapter and the requirements of

the regulations prescribed pursuant to section 7505 of this

title; or

(ii) comply with any applicable requirements concerning financial or financial and compliance audits contained in Federal statutes and regulations governing programs under which

such Federal financial assistance is provided to that government.

(C) Each State and local government that receives a total amount

of Federal financial assistance which is less than $25,000 in any

fiscal year of such government shall be exempt for such fiscal year

from compliance with—

(i) the audit requirements of this chapter; and

(ii) any applicable requirements concerning financial or financial and compliance audits contained in Federal statutes

and regulations governing programs under which such Federal

financial assistance is provided to that government.

The provisions of clause (ii) of this subparagraph do not exempt a State or local government from compliance with any

provision of a Federal statute or regulation that requires such

government to maintain records concerning Federal financial

assistance provided to such government or that permits a Federal agency or the Comptroller General access to such records.

(2) For purposes of this section, a State or local government shall

be considered to receive Federal financial assistance whether such

assistance is received directly from a Federal agency or indirectly

through another State or local government.
203 Sec. 7502 CH. 75—REQUIREMENTS FOR SINGLE AUDITS

(b)(1) Except as provided in paragraphs (2) and (3), audits conducted pursuant to this chapter shall be conducted annually.

(2) If a State or local government is required—

(A) by constitution or statute, as in effect on October 19,

1984, or

(B) by administrative rules, regulations, guidelines, standards, or policies, as in effect on October 19, 1984,

to conduct its audits less frequently than annually, the cognizant

agency for such government shall, upon request of such government, permit the government to conduct its audits pursuant to this

chapter biennially, except as provided in paragraph (3). Such audits shall cover both years within the biennial period.

(3) Any State or local government that is permitted, under clause

(B) of paragraph (2), to conduct its audits pursuant to this chapter

biennially by reason of the requirements of a rule, regulation,

guideline, standard, or policy, shall, for any of its fiscal years beginning after December 31, 1986, conduct such audits annually unless such State or local government codifies a requirement for biennial audits in its constitution or statutes by January 1, 1987. Audits conducted biennially under the provisions of this paragraph

shall cover both years within the biennial period.

(c) Each audit conducted pursuant to subsection (a) shall be conducted by an independent auditor in accordance with generally accepted government auditing standards, except that, for the purposes of this chapter, such standards shall not be construed to require economy and efficiency audits, program results audits, or program evaluations.

(d)(1) Each audit conducted pursuant to subsection (a) for any

fiscal year shall cover the entire State or local government’s operations except that, at the option of such government—

(A) such audit may, except as provided in paragraph (5),

cover only each department, agency, or establishment which

received, expended, or otherwise administered Federal financial assistance during such fiscal year; and

(B) such audit may exclude public hospitals and public colleges and universities.

(2) Each such audit shall encompass the entirety of the financial

operation of such government or of such department, agency, or establishment, whichever is applicable, and shall determine and report whether—

(A)(i) the financial statements of the government, department, agency, or establishment present fairly its financial position and the results of its financial operations in accordance

with generally accepted accounting principles; and

(ii) the government, department, agency, or establishment

has complied with laws and regulations that may have a material effect upon the financial statements;

(B) the government, department, agency, or establishment

has internal control systems to provide reasonable assurance

that it is managing Federal financial assistance programs in

compliance with applicable laws and regulations; and

(C) the government, department, agency, or establishment

has complied with laws and regulations that may have a material effect upon each major Federal assistance program.
Sec. 7502 CH. 75—REQUIREMENTS FOR SINGLE AUDITS 204

In complying with the requirements of subparagraph (C), the independent auditor shall select and test a representative number of

transactions from each major Federal assistance program.

(3) Transactions selected from Federal assistance programs,

other than major Federal assistance programs, pursuant to the requirements of paragraphs (2)(A) and (2)(B) shall be tested for compliance with Federal laws and regulations that apply to such transactions. Any noncompliance found in such transactions by the independent auditor in making determinations required by this paragraph shall be reported.

(4) The number of transactions selected and tested under paragraphs (2) and (3), the selection and testing of such transactions,

and the determinations required by such paragraphs shall be based

on the professional judgment of the independent auditor.

(5) A series of audits of individual departments, agencies, and establishments for the same fiscal year may be considered to be an

audit for the purpose of this chapter.

(6) Redesignated (5)

(e)(1) Each State and local government subject to the audit requirements of this chapter, which receives Federal financial assistance and provides $25,000 or more of such assistance in any fiscal

year to a subrecipient, shall—

(A) if the subrecipient conducts an audit in accordance with

the requirements of this chapter, review such audit and ensure

that prompt and appropriate corrective action is taken on instances of material noncompliance with applicable laws and

regulations with respect to Federal financial assistance provided to the subrecipient by the State or local government; or

(B) if the subrecipient does not conduct an audit in accordance with the requirements of this chapter—

(i) determine whether the expenditures of Federal financial assistance provided to the subrecipient by the State or

local government are in accordance with applicable laws

and regulations; and

(ii) ensure that prompt and appropriate corrective action

is taken on instances of material noncompliance with applicable laws and regulations with respect to Federal financial assistance provided to the subrecipient by the

State or local government.

(2) Each such State and local government shall require each subrecipient of Federal assistance through such government to permit,

as a condition of receiving funds from such assistance, the independent auditor of the State or local government to have such access to the subrecipient’s records and financial statements as may

be necessary for the State or local government to comply with this

chapter.

(f) The report made on any audit conducted pursuant to this section shall, within thirty days after completion of such report, be

transmitted to the appropriate Federal officials and made available

by the State or local government for public inspection.

(g) If an audit conducted pursuant to this section finds any material noncompliance with applicable laws and regulations by, or material weakness in the internal controls of, the State or local government with respect to the matters described in subsection (d)(2),
205 Sec. 7504 CH. 75—REQUIREMENTS FOR SINGLE AUDITS

the State or local government shall submit to appropriate Federal

officials a plan for corrective action to eliminate such material noncompliance or weakness or a statement describing the reasons that

corrective action is not necessary. Such plan shall be consistent

with the audit resolution standard promulgated by the Comptroller

General (as part of the standards for internal controls in the Federal Government) pursuant to section 3512(c) of this title.

SEC. 7503. RELATION TO OTHER AUDIT REQUIREMENTS.

(a) An audit conducted in accordance with this chapter shall be

in lieu of any financial or financial and compliance audit of an individual Federal assistance program which a State or local government is required to conduct under any other Federal law or regulation. To the extent that such audit provided a Federal agency with

the information it requires to carry out its responsibilities under

Federal law or regulation, a Federal agency shall rely upon and use

that information and plan and conduct its own audits accordingly

in order to avoid a duplication of effort.

(b) Notwithstanding subsection (a), a Federal agency shall conduct any additional audits which are necessary to carry out its responsibilities under Federal law or regulation. The provisions of

this chapter do not authorize any State or local government (or

subrecipient thereof) to constrain, in any manner, such agency from

carrying out such additional audits.

(c) The provisions of this chapter do not limit the authority of

Federal agencies to conduct, or enter into contracts for the conduct

of, audits and evaluations of Federal financial assistance programs,

nor limit the authority of any Federal agency Inspector General or

other Federal audit official.

(d) Subsection (a) shall apply to a State or local government

which conducts an audit in accordance with this chapter even

though it is not required by section 7502(a) to conduct such audit.

(e) A Federal agency that performs or contracts for audits in addition to the audits conducted by recipients pursuant to this chapter shall, consistent with other applicable law, arrange for funding

the cost of such additional audits. Such additional audits include

economy and efficiency audits, program results audits, and program evaluations.

SEC. 7504. COGNIZANT AGENCY RESPONSIBILITIES.

(a) The Director shall designate cognizant agencies for audits

conducted pursuant to this chapter.

(b) A cognizant agency shall—

(1) ensure that audits are made in a timely manner and in

accordance with the requirements of this chapter;

(2) ensure that the audit reports and corrective action plans

made pursuant to section 7502 of this title are transmitted to

the appropriate Federal officials; and

(3) (A) coordinate, to the extent practicable, audits done by

or under contract with Federal agencies that are in addition to

the audits conducted pursuant to this chapter; and

(B) ensure that such additional audits build upon the audits

conducted pursuant to this chapter.
Sec. 7505 CH. 75—REQUIREMENTS FOR SINGLE AUDITS 206

SEC. 7505. REGULATIONS.

(a) The Director, after consultation with the Comptroller General

and appropriate Federal, State, and local government officials,

shall prescribe policies, procedures, and guidelines to implement

this chapter. Each Federal agency shall promulgate such amendments to its regulations as may be necessary to conform such regulations to the requirements of this chapter and of such policies, procedures, and guidelines.

(b)(1) The policies, procedures, and guidelines prescribed pursuant to subsection (a) shall include criteria for determining the appropriate charges to programs of Federal financial assistance for

the cost of audits. Such criteria shall prohibit a State or local government which is required to conduct an audit pursuant to this

chapter from charging to any such program (A) the cost of any financial or financial and compliance audit which is not conducted

in accordance with this chapter, and (B) more than a reasonably

proportionate share of the cost of any such audit that is conducted

in accordance with this chapter.

(2) The criteria prescribed pursuant to paragraph (1) shall not,

in the absence of documentation demonstrating a higher actual

cost, permit (A) the ratio of (i) the total charges by a government

to Federal financial assistance programs for the cost of audits performed pursuant to this chapter, to (ii) the total cost of such audits,

to exceed (B) the ratio of (i) total Federal financial assistance expended by such government during the applicable fiscal year or

years, to (ii) such government’s total expenditures during such fiscal year or years.

(c) Such policies, procedures, and guidelines shall include such

provisions as may be necessary to ensure that small business concerns and business concerns owned and controlled by socially and

economically disadvantaged individuals will have the opportunity

to participate in the performance of contracts awarded to fulfill the

audit requirements of this chapter.

SEC. 7506. MONITORING RESPONSIBILITIES OF THE COMPTROLLER

GENERAL.

The Comptroller General shall review provisions requiring financial or financial and compliance audits of recipients of Federal assistance that are contained in bills and resolutions reported by the

committees of the Senate and the House of Representatives. If the

Comptroller General determines that a bill or resolution contains

provisions that are inconsistent with the requirements of this chapter, the Comptroller General shall, at the earliest practicable date,

notify in writing—

(1) the committee that reported such bill or resolution; and

(2)(A) the Committee on Governmental Affairs of the Senate

(in the case of a bill or resolution reported by a committee of

the Senate); or

(B) the Committee on Government Operations of the House

of Representatives (in the case of a bill or resolution reported

by a committee of the House of Representatives).
207 Sec. 7507 CH. 75—REQUIREMENTS FOR SINGLE AUDITS

SEC. 7507. EFFECTIVE DATE; REPORT.

(a) This chapter shall apply to any State or local government

with respect to any of its fiscal years which begin after December

31, 1984.

(b) The Director, on or before May 1, 1987, and annually thereafter, shall submit to each House of Congress a report on operations under this chapter. Each such report shall specifically identify each Federal agency or State or local government which is failing to comply with this chapter.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

7500 et seq ................................. 29 C.F.R. 96

7501 et seq ................................. 15 C.F.R. 299; 34 C.F.R. 298, 401; 38 C.F.R. 41; 39 C.F.R. 204

7501–7507 .................................. 24 C.F.R. 44

7501 ............................................ 43 C.F.R. 12

GAO: Government Auditing Standards: 1994 Revision, see appendix III

7503 ............................................ 7 C.F.R. 3015; 44 C.F.R. 14; 45 C.F.R. 74

GAO: Government Auditing Standards: 1994 Revision, see appendix III

7505 ............................................ GAO: Government Auditing Standards: 1994 Revision, see appendix III

OMB: Circular A–128, see appendix IV
208

TITLE 31—MONEY AND FINANCE

Subtitle VI—Miscellaneous

* * * * * * *

CHAPTER 91—GOVERNMENT CORPORATIONS

SEC. 9101. DEFINITIONS.

In this chapter—

(1) ‘‘Government corporation’’ means a mixed-ownership Government corporation and a wholly owned Government Corporation.

(2) ‘‘mixed-ownership Government corporation means—

(A) Amtrack.

(B) the Central Bank for Cooperatives.

(C) the Federal Deposit Insurance Corporation.

(D) the Federal Home Loan Banks.

(E) the Federal Intermediate Credit Banks.

(F) the Federal Land Banks.

(G) the National Credit Union Administration Central

Liquidity Facility.

(H) the Regional Banks for Cooperatives.

(I) the Rural Telephone Bank when the ownership, control, and operation of the Bank are converted under section

410(a) of the Rural Electrification Act of 1936 (7 U.S.C.

950(a)).

(J) the United States Railway Association.

(K) the Financing Corporation.

(L) the Resolution Trust Corporation.

(M) the Resolution Funding Corporation.

* * * * * * *
209

TITLE 31—MONEY AND FINANCE

Subtitle VI—Miscellaneous

* * * * * * *

CHAPTER 97—MISCELLANEOUS

SEC. 9701. FEES AND CHARGES FOR GOVERNMENT SERVICES AND

THINGS OF VALUE.

(a) It is the sense of Congress that each service or thing of value

provided by an agency (except a mixed-ownership Government corporation) to a person (except a person on official business of the

United States Government) is to be self-sustaining to the extent

possible.

(b) The head of each agency (except a mixed-ownership Government corporation) may prescribe regulations establishing the

charge for a service or thing of value provided by the agency. Regulations prescribed by the heads of executive agencies are subject to

policies prescribed by the President and shall be as uniform as

practicable. Each charge shall be—

(1) fair; and

(2) based on—

(A) the costs to the Government;

(B) the value of the service or thing to the recipient;

(C) public policy or interest served; and

(D) other relevant facts.

(c) This section does not affect a law of the United States—

(1) prohibiting the determination and collection of charges

and the disposition of those charges; and

(2) prescribing bases for determining charges, but a charge

may be redetermined under this section consistent with the

prescribed bases.

SEC. 9702. INVESTMENT OF TRUST FUNDS.

Except as required by a treaty of the United States, amounts

held in trust by the United States Government (including annual

interest earned on the amounts)—

(1) shall be invested in Government obligations; and

(2) shall earn interest at an annual rate of at least 5 percent.

SEC. 9703. MANAGERIAL ACCOUNTABILITY AND FLEXIBILITY.

(a) Beginning with fiscal year 1999, the performance plans required under section 1115 may include proposals to waive administrative procedural requirements and controls, including specification of personnel staffing levels, limitations on compensation or remuneration, and prohibitions or restrictions on funding transfers

among budget object classification 20 and subclassifications 11, 12,

31, and 32 of each annual budget submitted under section 1105, in
Sec. 9704 CH. 97—MISCELLANEOUS 210

return for specific individual or organization accountability to

achieve a performance goal. In preparing and submitting the performance plan under section 1105(a)(29), the Director of the Office

of Management and Budget shall review and may approve any proposed waivers. A waiver shall take effect at the beginning of the

fiscal year for which the waiver is approved.

(b) Any such proposal under subsection (a) shall describe the anticipated effects on performance resulting from greater managerial

or organizational flexibility, discretion, and authority, and shall

quantify the expected improvements in performance resulting from

any waiver. The expected improvements shall be compared to current actual performance, and to the projected level of performance

that would be achieved independent of any waiver.

(c) Any proposal waiving limitations on compensation or remuneration shall precisely express the monetary change in compensation or remuneration amounts, such as bonuses or awards, that

shall result from meeting, exceeding, or failing to meet performance goals.

(d) Any proposed waiver of procedural requirements or controls

imposed by an agency (other than the proposing agency or the Office of Management and Budget) may not be included in a performance plan unless it is endorsed by the agency that established the

requirement, and the endorsement included in the proposing agency’s performance plan.

(e) A waiver shall be in effect for one or two years as specified

by the Director of the Office of Management and Budget in approving the waiver. A waiver may be renewed for a subsequent year.

After a waiver has been in effect for three consecutive years, the

performance plan prepared under section 1115 may propose that a

waiver, other than a waiver of limitations on compensation or remuneration, be made permanent.

(f) For purposes of this section, the definitions under section

1115(f) shall apply.

SEC. 9704. PILOT PROJECTS FOR MANAGERIAL ACCOUNTABILITY AND

FLEXIBILITY.

(a) The Director of the Office of Management and Budget shall

designate not less than five agencies as pilot projects in managerial

accountability and flexibility for fiscal years 1995 and 1996. Such

agencies shall be selected from those designated as pilot projects

under section 1118 and shall reflect a representative range of Government functions and capabilities in measuring and reporting program performance.

(b) Pilot projects in the designated agencies shall include proposed waivers in accordance with section 9703 for one or more of

the major functions and operations of the agency.

(c) The Director of the Office of Management and Budget shall

include in the report to the President and to the Congress required

under section 1118(c)—

(1) an assessment of the benefits, costs, and usefulness of increasing managerial and organizational flexibility, discretion,

and authority in exchange for improved performance through

a waiver; and

(2) an identification of any significant difficulties experienced

by the pilot agencies in preparing proposed waivers.
211 Sec. 9704 CH. 97—MISCELLANEOUS

(d) For purposes of this section the definitions under section

1115(f) shall apply.

* * * * * * *

The following list shows the section of 31 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

31 U.S.C. Requirements or Guidelines

9701 ............................................ OMB: Circular A–25, see appendix IV

9703 ............................................ OMB: Circular A–11, see appendix IV

9704 ............................................ OMB: Circular A–11, see appendix IV

213

SELECTED PROVISIONS OF TITLE 1,

UNITED STATES CODE—

GENERAL PROVISIONS

215

6This table of sections is not part of Title 1 but is included for convenience of the reader.

Table of Sections of Selected Provisions of Title 1 6

TITLE 1, UNITED STATES CODE

GENERAL PROVISIONS

Subtitle I—General

* * * * * * *

Chapter 2—Acts and Resolutions; Formalities of Enactment;

Repeals; Sealing of Instruments

Sec.

105. Title of appropriation Acts.
216

TITLE 1, UNITED STATES CODE

GENERAL PROVISIONS

* * * * * * *

Chapter 2—Acts and Resolutions; Formalities of Enactment; Repeals; Sealing of Instruments

SEC. 105. TITLE OF APPROPRIATION ACTS.

The style and title of all Acts making appropriations for the support of Government shall be as follows: ‘‘An Act making appropriations (here insert the object) for the year ending September 30

(here insert the calendar year).’’
217

SELECTED PROVISIONS OF TITLE 2,

UNITED STATES CODE—

THE CONGRESS

219

7This table of sections is not part of Title 2 but is included for the convenience of the reader.

Table of Sections of Selected

Provisions of Title 2 7

SELECTED PROVISIONS OF TITLE 2, UNITED

STATES CODE

TITLE 2, UNITED STATES CODE

The Congress

Chapter 6—Congressional and Committee Procedure;

Investigations

Sec. 190d. Legislative review by standing committees of the Senate and the House

of Representatives

CHAPTER 17—CONGRESSIONAL BUDGET OFFICE

Sec. 601. Establishment.

Sec. 602. Duties and functions.

Sec. 603. Public access to budget data.

Sec. 605. Sale or Lease of property, supplies, or services.

Sec. 606. Disposition of surplus or obsolete property.

CHAPTER 17A: CONGRESSIONAL BUDGET AND FISCAL OPERATIONS

Sec. 621. Congressional declaration of purpose.

Sec. 622. Definitions.

Sec. 623. Continuing study of additional budget reform proposals.

SUBCHAPTER I—CONGRESSIONAL BUDGET PROCESS

Sec. 631. Timetable.

Sec. 632. Annual adoption of concurrent resolution on the budget.

Sec. 633. Committee allocations.

Sec. 634. Adoption of first concurrent resolution on the budget prior to consideration of legislation providing new budget authority, new spending authority, new

credit authority, or changes in revenues or public debt limit.

Sec. 635. Permissible revisions of concurrent resolutions on the budget.

Sec. 636. Consideration of concurrent resolutions on the budget.

Sec. 637. Legislation dealing with Congressional budget must be handled by Budget Committees.

Sec. 638. House Committee action on all appropriation bills to be completed by

June 10.

Sec. 639. Reports, summaries, and projections of Congressional budget actions.

Sec. 640. House approval of regular appropriation bills.

Sec. 641. Reconciliation.

Sec. 642. New budget authority, new spending authority, and revenue legislation

to be within appropriate levels.

Sec. 643. Effects of points of order.
220

Sec. 644. Extraneous matter in reconciliation legislation.

SUBCHAPTER II—FISCAL PROCEDURES

Part A—General Provisions

Sec. 651. Bills providing new spending authority.

Sec. 652. Legislation providing new credit authority.

Sec. 653. Analysis by Congressional Budget Office.

Sec. 654. Study by General Accounting Office of forms of Federal financial commitment not reviewed annually by Congress.

Sec. 655. Off-budget agencies, programs, and activities.

Sec. 656. Member User Group.

SUBCHAPTER III—CREDIT REFORM

Sec. 661. Purposes.

Sec. 661a. Definitions.

Sec. 661b. OMB and CBO analysis, coordination, and review.

Sec. 661c. Budgetary treatment.

Sec. 661d. Authorizations.

Sec. 661e. Treatment of Deposit Insurance and agencies and other insurance programs.

Sec. 661f. Effect on other laws.

SUBCHAPTER IV—BUDGET AGREEMENT ENFORCEMENT PROVISIONS

Sec. 665. Definitions and point of order.

Sec. 665a. Committee allocations and enforcement.

Sec. 665b. Consideration of legislation before adoption of budget resolution for that

fiscal year.

Sec. 665c. Reconciliation directives regarding pay-as-you-go requirements.

Sec. 665d. Application of section 642 of this title; point of order.

Sec. 665e. 5-Year budget resolutions; budget resolutions must conform to Balanced

Budget and Emergency Deficit Control Act of 1985.

CHAPTER 17B—IMPOUNDMENT CONTROL

Sec. 681. Disclaimer.

Sec. 682. Definitions.

Sec. 683. Rescission of budget authority.

Sec. 684. Proposed deferrals of budget authority.

Sec. 685. Transmission of messages; publication.

Sec. 686. Reports by Comptroller General.

Sec. 687. Suits by Comptroller General.

Sec. 688. Procedure in House of Representatives and Senate.

CHAPTER 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

SUBCHAPTER I—ELIMINATION OF DEFICITS IN EXCESS OF MAXIMUM DEFICIT AMOUNT

Sec. 900. Statement of budget enforcement through sequestration; definitions.

Sec. 901. Enforcing discretionary spending limits.

Sec. 902. Enforcing pay-as-you-go.

Sec. 904. Reports and orders.

Sec. 905. Exempt programs and activities.

Sec. 906. Exceptions, limitations, and special rules.

Sec. 907. The baseline.

Sec. 907a. Suspension in the event of war or low growth.

Sec. 907b. Modification of Presidential order.

Sec. 907c. Flexibility among defense programs, projects, and activities.

Sec. 907d. Special reconciliation process.

Sec. 908. Modification of Presidential order.
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TITLE 2—THE CONGRESS

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CHAPTER 6—CONGRESSIONAL AND COMMITTEE

PROCEDURE; INVESTIGATIONS

SEC. 190D. LEGISLATIVE REVIEW BY STANDING COMMITTEES OF THE

SENATE AND THE HOUSE OF REPRESENTATIVES.

(a) SCOPE OF ASSISTANCE.—In order to assist the Congress in—

(1) its analysis, appraisal, and evaluation of the application,

administration, and execution of the laws enacted by the Congress, and

(2) its formulation, consideration, and enactment of such

modifications of or changes in those laws, and of such additional legislation, as may be necessary or appropriate,

each standing committee of the Senate and the House of Representatives shall review and study, on a continuing basis, the application, administration, and execution of those laws, or parts of

laws, the subject matter of which is within the jurisdiction of that

committee. Such committees may carry out the required analysis,

appraisal, and evaluation themselves, or by contract, or may require a Government agency to do so and furnish a report thereon

to the Congress. Such committees may rely on such techniques as

pilot testing, analysis of costs in comparison with benefits, or provision for evaluation after a defined period of time.

(b) REPORTS TO THE SENATE AND THE HOUSE OF REPRESENTATIVES.—In each odd-numbered year beginning on or after January

1, 1973, each standing committee of the Senate shall submit, not

later than March 31, to the Senate, and each standing committee

of the House shall submit, not later than January 2, to the House,

a report on the activities of that committee under this section during the Congress ending at noon on January 3 of such year.

(c) EXCEPTIONS.—The preceding provisions of this section do not

apply to the Committees on Appropriations and the Budget of the

Senate and the Committees on Appropriations, the Budget, House

Administration, Rules, and Standards of Official Conduct of the

House.
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TITLE 2—THE CONGRESS

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CHAPTER 17—CONGRESSIONAL BUDGET OFFICE

SEC. 601. ESTABLISHMENT.

(a) IN GENERAL.—

(1) There is established an office of the Congress to be known

as the Congressional Budget Office (hereinafter in this chapter

referred to as the ‘‘Office’’). The Office shall be headed by a Director; and there shall be a Deputy Director who shall perform

such duties as may be assigned to him by the Director and,

during the absence or incapacity of the Director or during a vacancy in that office, shall act as Director.

(2) The Director shall be appointed by the Speaker of the

House of Representatives and the President pro tempore of the

Senate after considering recommendations received from the

Committees on the Budget of the House and the Senate, without regard to political affiliation and solely on the basis of his

fitness to perform his duties. The Deputy Director shall be appointed by the Director.

(3) The term of office of the Director first appointed shall expire at noon on January 3, 1979, and the terms of office of Directors subsequently appointed shall expire at noon on January 3 of each fourth year thereafter. Any individual appointed

as Director to fill a vacancy prior to the expiration of a term

shall serve only for the unexpired portion of that term. An individual serving as Director at the expiration of a term may

continue to serve until his successor is appointed. Any Deputy

Director shall serve until the expiration of the term of office of

the Director who appointed him (and until his successor is appointed), unless sooner removed by the Director.

(4) The Director may be removed by either House by resolution.

(5) The Director shall receive compensation at a per annum

gross rate equal to the rate of basic pay, as in effect from time

to time, for level III of the Executive Schedule in section 5314

of Title 5. The Deputy Director shall receive compensation at

a per annum gross rate equal to the rate of basic pay, as so

in effect, for level IV of the Executive Schedule in section 5315

of such title.

(b) PERSONNEL.—The Director shall appoint and fix the compensation of such personnel as may be necessary to carry out the

duties and functions of the Office. All personnel of the Office shall

be appointed without regard to political affiliation and solely on the

basis of their fitness to perform their duties. The Director may prescribe the duties and responsibilities of the personnel of the Office,
223 Sec. 601 CH. 17—CBO

and delegate to them authority to perform any of the duties, powers, and functions imposed on the Office or on the Director. For

purposes of pay (other than pay of the Director and Deputy Director) and employment benefits, rights, and privileges, all personnel

of the Office shall be treated as if they were employees of the

House of Representatives.

(c) EXPERTS AND CONSULTANTS.—In carrying out the duties and

functions of the Office, the Director may procure the temporary

(not to exceed one year) or intermittent services of experts or consultants or organizations thereof by contract as independent contractors, or, in the case of individual experts or consultants, by employment at rates of pay not in excess of the daily equivalent of the

highest rate of basic pay payable under the General Schedule of

section 5332 of Title 5.

(d) RELATIONSHIP TO EXECUTIVE BRANCH.—The Director is authorized to secure information, data, estimates, and statistics directly from the various departments, agencies, and establishments

of the executive branch of Government and the regulatory agencies

and commissions of the Government. All such departments, agencies, establishments, and regulatory agencies and commissions

shall furnish the Director any available material which he determines to be necessary in the performance of his duties and functions (other than material the disclosure of which would be a violation of law). The Director is also authorized, upon agreement with

the head of any such department, agency, establishment, or regulatory agency or commission, to utilize its services, facilities, and

personnel with or without reimbursement; and the head of each

such department, agency, establishment, or regulatory agency or

commission is authorized to provide the Office such services, facilities, and personnel.

(e) RELATIONSHIP TO OTHER AGENCIES OF CONGRESS.—In carrying out the duties and functions of the Office, and for the purpose

of coordinating the operations of the Office with those of other congressional agencies with a view to utilizing most effectively the information, services, and capabilities of all such agencies in carrying

out the various responsibilities assigned to each, the Director is authorized to obtain information, data, estimates, and statistics developed by the General Accounting Office, the Library of Congress,

and the Office of Technology Assessment, and (upon agreement

with them) to utilize their services, facilities, and personnel with

or without reimbursement. The Comptroller General, the Librarian

of Congress, and the Technology Assessment Board are authorized

to provide the Office with the information, data, estimates, and statistics, and the services, facilities, and personnel, referred to in the

preceding sentence.

(f) Redesignated (g)

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to

be appropriated to the Office for each fiscal year such sums as may

be necessary to enable it to carry out its duties and functions. Until

sums are first appropriated pursuant to the preceding sentence,

but for a period not exceeding 12 months following the effective

date of this subsection, the expenses of the Office shall be paid

from the contingent fund of the Senate, in accordance with section

68 of this title, and upon vouchers approved by the Director.
Sec. 602 CH. 17—CBO 224

(g) REVENUE ESTIMATES.—For the purposes of revenue legislation

which is income, estate and gift, excise, and payroll taxes (i.e., Social Security), considered or enacted in any session of Congress, the

Congressional Budget Office shall use exclusively during that session of Congress revenue estimates provided to it by the Joint Committee on Taxation. During that session of Congress such revenue

estimates shall be transmitted by the Congressional Budget Office

to any committee of the House of Representatives or the Senate requesting such estimates, and shall be used by such Committees in

determining such estimates. The Budget Committees of the Senate

and House shall determine all estimates with respect to scoring

points of order and with respect to the execution of the purposes

of this Act.

SEC. 602. DUTIES AND FUNCTIONS.

(a) ASSISTANCE TO BUDGET COMMITTEES.—It shall be the duty

and function of the Office to provide to the Committees on the

Budget of both Houses information which will assist such committees in the discharge of all matters within their jurisdictions, including (1) information with respect to the budget, appropriation

bills, and other bills authorizing or providing new budget authority

or tax expenditures, (2) information with respect to revenues, receipts, estimated future revenues and receipts, and changing revenue conditions, and (3) such related information as such Committees may request.

(b) ASSISTANCE TO COMMITTEES ON APPROPRIATIONS, WAYS AND

MEANS, AND FINANCE.—At the request of the Committee on Appropriations of either House, the Committee on Ways and Means of

the House of Representatives, or the Committee on Finance of the

Senate, the Office shall provide to such Committee any information

which will assist it in the discharge of matters within its jurisdiction, including information described in clauses (1) and (2) of subsection (a) of this section and such related information as the Committee may request.

(c) ASSISTANCE TO OTHER COMMITTEES AND MEMBERS.—

(1) At the request of any other committee of the House of

Representatives or the Senate or any joint committee of the

Congress, the Office shall provide to such committee or joint

committee any information compiled in carrying out clauses (1)

and (2) of subsection (a) of this section, and, to the extent practicable, such additional information related to the foregoing as

may be requested.

(2) At the request of any committee of the Senate or the

House of Representatives, the Office shall, to the extent practicable, consult with and assist such committee in analyzing

the budgetary or financial impact of any proposed legislation

that have—

(A) a significant budgetary impact on State, local, or

Tribal government;

(B) a significant financial impact on the private sector;

or

(C) a significant employment impact on the private sector.
225 Sec. 602 CH. 17—CBO

(3) At the request of any Member of the House or Senate, the

Office shall provide to such Member any information compiled

in carrying out clauses (1) and (2) of subsection (a) of this section, and, to the extent available, such additional information

related to the foregoing as may be requested.

(d) ASSIGNMENT OF OFFICE PERSONNEL TO COMMITTEES AND

JOINT COMMITTEES.—At the request of the Committee on the Budget of either House, personnel of the Office shall be assigned, on a

temporary basis, to assist such committee. At the request of any

other committee of either House or any joint committee of the Congress, personnel of the Office may be assigned, on a temporary

basis, to assist such committee or joint committee with respect to

matters directly related to the applicable provisions of subsection

(b) or (c) of this section.

(e) TRANSFER OF FUNCTIONS OF JOINT COMMITTEE ON REDUCTION

OF FEDERAL EXPENDITURES.—The duties, functions, and personnel

of the Joint Committee on Reduction of Federal Expenditures are

transferred to the Office, and the Joint Committee is abolished.

(f) REPORTS TO BUDGET COMMITTEES.—

(1) On or before February 15 of each year, the Director shall

submit to the Committees on the Budget of the House of Representatives and the Senate a report, for the fiscal year commencing on October 1 of that year, with respect to fiscal policy,

including (A) alternative levels of total revenues, total new

budget authority, and total outlays (including related surpluses

and deficits), and (B) the levels of tax expenditures under existing law, taking into account projected economic factors and

any changes in such levels based on proposals in the budget

submitted by the President for such fiscal year. Such report

shall also include a discussion of national budget priorities, including alternative ways of allocating new budget authority

and budget outlays for such fiscal year among major programs

or functional categories, taking into account how such alternative allocations will meet major national needs and affect

balanced growth and development of the United States.

(2) The Director shall from time to time submit to the Committees on the Budget of the House of Representatives and the

Senate such further reports (including reports revising the report required by paragraph (1)) as may be necessary or appropriate to provide such Committees with information, data, and

analyses for the performance of their duties and functions.

(3) On or before January 15 of each year, the Director, after

consultation with the appropriate committees of the House of

Representatives and Senate, shall submit to the Congress a report listing (A) all programs and activities funded during the

fiscal year ending September 30 of that calendar year for

which authorizations for appropriations have not been enacted

for that fiscal year, and (B) all programs and activities for

which authorizations for appropriations have been enacted for

the fiscal year ending September 30 of that calendar year, but

for which no authorizations for appropriations have been enacted for the fiscal year beginning October 1 of that calendar

year.
Sec. 602 CH. 17—CBO 226

(g) USE OF COMPUTERS AND OTHER TECHNIQUES.—The Director

may equip the Office with up-to-date computer capability (upon approval of the Committee on House Administration of the House of

Representatives and the Committee on Rules and Administration

of the Senate), obtain the services of experts and consultants in

computer technology, and develop techniques for the evaluation of

budgetary requirements.

(h) STUDIES. (1) CONTINUING STUDIES.—The Director of the Congressional

Budget Office shall conduct continuing studies to enhance comparisons of budget outlays, credit authority, and tax expenditures.

(2) FEDERAL MANDATED STUDIES.—(A) At the request of any

Chairman or ranking member of the minority of a Committee

of the Senate or the House of Representatives, the Director

shall, to the extent practicable, conduct a study of a legislative

proposal containing a Federal mandate.

(B) In conducting a study on intergovernmental mandates

under subparagraph (A), the Director shall—

(i) solicit and consider information or comments from

elected officials (including their designated representatives) of State, local, or tribal governments as may provide

helpful information or comments;

(ii) consider establishing advisory panels of elected officials or their designated representatives, of State, local, or

tribal governments if the Director determines that such

advisory panels would be helpful in performing responsibilities of the Director under this section; and

(iii) if, and to the extent that the Director determines

that accurate estimates are reasonably feasible, include estimates of—

(I) the future direct cost of the Federal mandate to

the extent that such costs significantly differ from or

extend beyond the 5-year period after the mandate is

first effective; and

(II) any disproportionate budgetary effects of Federal mandates upon particular industries or sectors of

the economy, States, regions, and urban or rural or

other types of communities, as appropriate.

(C) In conducting a study on private sector mandates under

subparagraph (A), the Director shall provide estimates, if and

to the extent that the Director determines that such estimates

are reasonably feasible, of—

(i) future costs of Federal private sector mandates to the

extent that such mandates differ significantly from or extend beyond the 5-year time period referred to in subparagraph (b)(iii)(I);

(ii) any disproportionate financial effects of Federal private sector mandates and of any Federal financial assistance in the bill or joint resolution upon any particular industries or sectors of the economy, States, regions, and

urban or rural or other types of communities; and

(iii) the effect of Federal private sector mandates in the

bill or joint resolution on the national economy, including
227 Sec. 606 CH. 17—CBO

the effect on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of United States goods and services.

SEC. 603. PUBLIC ACCESS TO BUDGET DATA.

(a) RIGHT TO COPY.—Except as provided in subsections (c) and

(d) of this section, the Director shall make all information, data, estimates, and statistics obtained under section 601 (d) and (e) of this

title available for public copying during normal business hours,

subject to reasonable rules and regulations, and shall to the extent

practicable, at the request of any person, furnish a copy of any

such information, data, estimates, or statistics upon payment by

such person of the cost of making and furnishing such copy.

(b) INDEX.—The Director shall develop and maintain filing, coding, and indexing systems that identify the information, data, estimates, and statistics to which subsection (a) of this section applies

and shall make such systems available for public use during normal business hours.

(c) EXCEPTIONS.—Subsection (a) of this section shall not apply to

information, data, estimates, and statistics—

(1) which are specifically exempted from disclosure by law;

or

(2) which the Director determines will disclose—

(A) matters necessary to be kept secret in the interests

of national defense or the confidential conduct of the foreign relations of the United States;

(B) information relating to trade secrets or financial or

commercial information pertaining specifically to a given

person if the information has been obtained by the Government on a confidential basis, other than through an application by such person for a specific financial or other benefit, and is required to be kept secret in order to prevent

undue injury to the competitive position of such person; or

(C) personnel or medical data or similar data the disclosure of which would constitute a clearly unwarranted invasion of personal privacy;

unless the portions containing such matters, information, or

data have been excised.

(d) INFORMATION OBTAINED FOR COMMITTEES AND MEMBERS.—

Subsection (a) of this section shall apply to any information, data,

estimates, and statistics obtained at the request of any committee,

joint committee, or Member unless such committee, joint committee, or Member has instructed the Director not to make such information, data, estimates, or statistics available for public copying.

SEC. 604. OMITTED.

SEC. 605. SALE OR LEASE OF PROPERTY, SUPPLIES, OR SERVICES.

Any sale or lease of property, supplies, or services to the Congressional Budget Office shall be deemed to be a sale or lease of

such property, supplies, or services to the Congress subject to section 111b of this title.

SEC. 606. DISPOSITION OF SURPLUS OR OBSOLETE PROPERTY.

The Director of the Congressional Budget Office shall have the

authority, within the limits of available appropriations, to dispose
Sec. 606 CH. 17—CBO 228

of surplus or obsolete personal property by inter-agency transfer,

donation, or discarding.
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TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 17A—CONGRESSIONAL BUDGET AND FISCAL

OPERATIONS

SEC. 621. CONGRESSIONAL DECLARATION OF PURPOSE.

The Congress declares that it is essential—

(1) to assure effective congressional control over the budgetary process;

(2) to provide for the congressional determination each year

of the appropriate level of Federal revenues and expenditures;

(3) to provide a system of impoundment control;

(4) to establish national budget priorities; and

(5) to provide for the furnishing of information by the executive branch in a manner that will assist the Congress in discharging its duties.

NOTE

Multiyear Authorizations and 2-Year Appropriations for

Selected Agencies and Accounts

Pub. L. 100–119, Title II, Sec. 201, Sept. 29, 1987, 101 Stat. 784,

provided that: ‘‘It is the sense of the Congress that the Congress

should undertake an experiment with multiyear authorizations and

2-year appropriations for selected agencies and accounts. An evaluation of the efficacy and desirability of such experiment should be

conducted at the end of the 2-year period. The appropriate committees are directed to develop a plan in consultation with the leadership of the House and Senate to implement this experiment.’’

Financial Management Reform

Pub. L. 100–119, Title II, Sec. 203, Sept. 29, 1987, 101 Stat. 784,

provided that: ‘‘It is the sense of the Congress that the Congress

should undertake a coordinated effort to identify problems and develop specific recommendations to reform the financial management

systems of the United States Government, including consideration of

the use of generally accepted accounting principles.’’

SEC. 622. DEFINITIONS.

For purposes of this Act—

(1) The terms ‘‘budget outlays’’ and ‘‘outlays’’ mean, with respect to any fiscal year, expenditures and net lending of funds

under budget authority during such year.

(2) Budget authority and new budget authority—
Sec. 622 CH. 17A—CONG. BUDGET AND FISCAL OPS. 230

(A) IN GENERAL.—The term ‘‘budget authority’’ means

the authority provided by Federal law to incur financial

obligations, as follows:

(i) provisions of law that make funds available for

obligation and expenditure (other than borrowing authority), including the authority to obligate and expend the proceeds of offsetting receipts and collections;

(ii) borrowing authority, which means authority

granted to a Federal entity to borrow and obligate and

expend the borrowed funds, including through the issuance of promissory notes or other monetary credits;

(iii) contract authority, which means the making of

funds available for obligation but not for expenditure;

and

(iv) offsetting receipts and collections as negative

budget authority, and the reduction thereof as positive

budget authority.

(B) LIMITATIONS ON BUDGET AUTHORITY.—With respect

to the Federal Hospital Insurance Trust Fund, the Supplementary Medical Insurance Trust Fund, the Unemployment Trust Fund, and the railroad retirement account,

any amount that is precluded from obligation in a fiscal

year by a provision of law (such as a limitation or a benefit

formula) shall not be budget authority in that year.

(C) NEW BUDGET AUTHORITY.—The term ‘‘new budget authority’’ means, with respect to a fiscal year—

(i) budget authority that first becomes available for

obligation in that year, including budget authority

that becomes available in that year as a result of a reappropriation; or

(ii) a change in any account in the availability of unobligated balances of budget authority carried over

from a prior year, resulting from a provision of law

first effective in that year;

and includes a change in the estimated level of new budget

authority provided in indefinite amounts by existing law.

(3) The term ‘‘tax expenditures’’ means those revenue losses

attributable to provisions of the Federal tax laws which allow

a special exclusion, exemption, or deduction from gross income

or which provide a special credit, a preferential rate of tax, or

a deferral of tax liability; and the term ‘‘tax expenditures budget’’ means an enumeration of such tax expenditures.

(4) The term ‘‘concurrent resolution on the budget’’ means—

(A) a concurrent resolution setting forth the congressional budget for the United States Government for a fiscal year as provided in section 632 of this title; and

(B) any other concurrent resolution revising the congressional budget for the United States Government for a fiscal year as described in section 635 of this title.

(5) The term ‘‘appropriation Act’’ means an Act referred to in

section 105 of Title 1.

(6) The term ‘‘deficit’’ means, with respect to a fiscal year,

the amount by which outlays exceeds receipts during that year.
231 Sec. 623 CH. 17A—CONG. BUDGET AND FISCAL OPS.

(7) The term ‘‘surplus’’ means, with respect to a fiscal year,

the amount by which receipts exceeds outlays during that year.

(8) The term ‘‘government-sponsored enterprise’’ means a

corporate entity created by a law of the United States that—

(A)(i) has a Federal charter authorized by law;

(ii) is privately owned, as evidenced by capital stock

owned by private entities or individuals;

(iii) is under the direction of a board of directors, a majority of which is elected by private owners;

(iv) is a financial institution with power to—

(I) make loans or loan guarantees for limited purposes such as to provide credit for specific borrowers

or one sector; and

(II) raise funds by borrowing (which does not carry

the full faith and credit of the Federal Government) or

to guarantee the debt of others in unlimited amounts;

and

(B)(i) does not exercise powers that are reserved to the

Government as sovereign (such as the power to tax or to

regulate interstate commerce);

(ii) does not have the power to commit the Government

financially (but it may be a recipient of a loan guarantee

commitment made by the Government); and

(iii) has employees whose salaries and expenses are paid

by the enterprise and are not Federal employees subject to

Title 5.

(9) the term ‘‘entitlement authority’’ means spending authority described by section 401(c)(2)(C) [2 U.S.C.A. Sec.

651(c)(2)(C)].

(10) The term ‘‘credit authority’’ means authority to incur direct loan obligations or to incur primary loan guarantee commitments.

SEC. 623. CONTINUING STUDY OF ADDITIONAL BUDGET REFORM PROPOSALS.

(a) The Committees on the Budget of the House of Representatives and the Senate shall study on a continuing basis proposals

designed to improve and facilitate methods of congressional

budgetmaking. The proposals to be studied shall include, but are

not limited to, proposals for—

(1) improving the information base required for determining

the effectiveness of new programs by such means as pilot testing, survey research, and other experimental and analytical

techniques;

(2) improving analytical and systematic evaluation of the effectiveness of existing programs;

(3) establishing maximum and minimum time limitations for

program authorization; and

(4) developing techniques of human resource accounting and

other means of providing noneconomic as well as economic

evaluation measures.

(b) The Committee on the Budget of each House shall, from time

to time, report to its House the results of the study carried on by

it under subsection (a) of this section, together with its recommendations.
Sec. 623 CH. 17A—CONG. BUDGET AND FISCAL OPS. 232

(c) Nothing in this section shall preclude studies to improve the

budgetary process by any other committee of the House of Representatives or the Senate or any joint committee of the Congress.
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TITLE 2—THE CONGRESS

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CHAPTER 17A—CONGRESSIONAL BUDGET AND FISCAL

OPERATIONS

Subchapter I—Congressional Budget Process

SEC. 631. TIMETABLE.

The timetable with respect to the congressional budget process

for any fiscal year is as follows:

On or before Action to be completed

First Monday in February President submits his budget.

February 15 ................... Congressional Budget Office submits report to Budget Committees.

February 25 ................... Committees submit views and estimates to Budget Committees.

April 1 ........................... Senate Budget Committee reports concurrent resolution on the budget.

April 15 ......................... Congress completes action on concurrent resolution on the budget.

May 15 .......................... Annual appropriation bills may be considered in the House.

June 10 .......................... House Appropriations Committee reports last annual appropriation bill.

June 15 .......................... Congress completes action on reconciliation legislation.

June 30 .......................... House completes action on annual appropriation bills.

October 1 ....................... Fiscal year begins.

SEC. 632. ANNUAL ADOPTION OF CONCURRENT RESOLUTION ON THE

BUDGET.

(a) CONTENT OF CONCURRENT RESOLUTION ON THE BUDGET.—On

or before April 15 of each year, the Congress shall complete action

on a concurrent resolution on the budget for the fiscal year beginning on October 1 of such year. The concurrent resolution shall set

forth appropriate levels for the fiscal year beginning on October 1

of such year, and planning levels for each of the two ensuing fiscal

years, for the following—

(1) totals of new budget authority, budget outlays, direct loan

obligations, and primary loan guarantee commitments;

(2) total Federal revenues and the amount, if any, by which

the aggregate level of Federal revenues should be increased or

decreased by bills and resolutions to be reported by the appropriate committees;

(3) the surplus or deficit in the budget;

(4) new budget authority, budget outlays, direct loan obligations, and primary loan guarantee commitments for each major

functional category, based on allocations of the total levels set

forth pursuant to paragraph (1);

(5) the public debt;

(6) for purposes of Senate enforcement under this subchapter, outlays of the old-age, survivors, and disability insurance program established under title II of the Social Security
Sec. 632 CH. 17A—CONG. BUDGET AND FISCAL OPS. 234

Act [42 U.S.C.A. Sec. 401 et seq.] for the fiscal year of the resolution and for each of the 4 succeeding fiscal years; and

(7) for purposes of Senate enforcement under this subchapter, revenues of the old-age, survivors, and disability insurance program established under title II of the Social Security Act [42 U.S.C.A. Sec. 401 et seq.] (and the related provisions of the Internal Revenue Code of 1986) for the fiscal year

of the resolution and for each of the 4 succeeding fiscal years.

The concurrent resolution shall not include the outlays and revenue totals of the old age, survivors, and disability insurance program established under title II of the Social Security Act [42

U.S.C.A. Sec. 401 et seq.] or the related provisions of the Internal

Revenue Code of 1986 in the surplus or deficit totals required by

this subsection or in any other surplus or deficit totals required by

this subchapter.

(b) ADDITIONAL MATTERS IN CONCURRENT RESOLUTION.—The

concurrent resolution on the budget may—

(1) set forth, if required by subsection (f) of this section, the

calendar year in which, in the opinion of the Congress, the

goals for reducing unemployment set forth in section 4(b) of the

Employment Act of 1946 [15 U.S.C.A. Sec. 1022a(b)] should be

achieved;

(2) include reconciliation directives described in section 641

of this title;

(3) require a procedure under which all or certain bills or

resolutions providing new budget authority or new entitlement

authority for such fiscal year shall not be enrolled until the

Congress has completed action on any reconciliation bill or reconciliation resolution or both required by such concurrent resolution to be reported in accordance with section 641(b) of this

title;

(4) set forth such other matters, and require such other procedures, relating to the budget, as may be appropriate to carry

out the purposes of this Act;

(5) include a heading entitled ‘‘Debt Increase as Measure of

Deficit’’ in which the concurrent resolution shall set forth the

amounts by which the debt subject to limit (in section 3101 of

Title 31) has increased or would increase in each of the relevant fiscal years;

(6) include a heading entitled ‘‘Display of Federal Retirement

Trust Fund Balances’’ in which the concurrent resolution shall

set forth the balances of the Federal retirement trust funds;

(7) set forth pay-as-you-go procedures for the Senate whereby—

(A) budget authority and outlays may be allocated to a

committee for legislation that increases funding for entitlement and mandatory spending programs within its jurisdiction if that committee or the committee of conference on

such legislation reports such legislation, if, to the extent

that the costs of such legislation are not included in the

concurrent resolution on the budget, the enactment of such

legislation will not increase the deficit (by virtue of either

deficit reduction in the bill or previously passed deficit reduction) in the resolution for the first fiscal year covered
235 Sec. 632 CH. 17A—CONG, BUDGET AND FISCAL OPS.

by the concurrent resolution on the budget, and will not

increase the total deficit for the period of fiscal years covered by the concurrent resolution on the budget;

(B) upon the reporting of legislation pursuant to subparagraph (A), and again upon the submission of a conference report on such legislation (if a conference report is

submitted), the chairman of the Committee on the Budget

of the Senate may file with the Senate appropriately revised allocations under section 633(a) of this title and revised functional levels and aggregates to carry out this

paragraph;

(C) such revised allocations, functional levels, and aggregates shall be considered for the purposes of this Act as allocations, functional levels, and aggregates contained in

the concurrent resolution on the budget; and

(D) the appropriate committee shall report appropriately

revised allocations pursuant to section 633(b) to carry out

this paragraph; and

(8) set forth procedures to effectuate pay-as-you-go in the

House of Representatives.

(c) CONSIDERATION OF PROCEDURES OR MATTERS WHICH HAVE

EFFECT OF CHANGING ANY RULE OF HOUSE OF REPRESENTATIVES.— If the Committee on the Budget of the House of Representatives reports any concurrent resolution on the budget which includes any

procedure or matter which has the effect of changing any rule of

the House of Representatives, such concurrent resolution shall then

be referred to the Committee on Rules with instructions to report

it within five calendar days (not counting any day on which the

House is not in session). The Committee on Rules shall have jurisdiction to report any concurrent resolution referred to it under this

paragraph with an amendment or amendments changing or striking out any such procedure or matter.

(d) VIEWS AND ESTIMATES OF OTHER COMMITTEES.—

Within 6 weeks after the President submits a budget under section 1105(a)(1) of Title 31, each committee of the House of Representatives having legislative jurisdiction shall submit to the

Committee on the Budget of the House and each committee of the

Senate having legislative jurisdiction shall submit to the Committee on the Budget of the Senate its views and estimates (as determined by the committee making such submission) with respect to

all matters set forth in subsections (a) and (b) of this section which

relate to matters within the jurisdiction or functions of such committee. The Joint Economic Committee shall submit to the Committees on the Budget of both Houses its recommendations as to the

fiscal policy appropriate to the goals of the Employment Act of 1946

[15 U.S.C.A. Sec. 1021 et seq.]. Any other committee of the House

of Representatives or the Senate may submit to the Committee on

the Budget of its House, and any joint committee of the Congress

may submit to the Committees on the Budget of both Houses, its

views and estimates with respect to all matters set forth in subsections (a) and (b) of this section which relate to matters within

its jurisdiction or functions.

(e) HEARINGS AND REPORT.—In developing the concurrent resolution on the budget referred to in subsection (a) of this section for
Sec. 632 CH. 17A—CONG. BUDGET AND FISCAL OPS. 236

each fiscal year, the Committee on the Budget of each House shall

hold hearings and shall receive testimony from Members of Congress and such appropriate representatives of Federal departments

and agencies, the general public, and national organizations as the

committee deems desirable. Each of the recommendations as to

short-term and medium-term goals set forth in the report submitted by the members of the Joint Economic Committee under subsection (d) of this section may be considered by the Committee on

the Budget of each House as part of its consideration of such concurrent resolution, and its report may reflect its views thereon, including its views on how the estimates of revenues and levels of

budget authority and outlays set forth in such concurrent resolution are designed to achieve any goals it is recommending. The report accompanying such concurrent resolution shall include, but

not be limited to—

(1) a comparison of revenues estimated by the committee

with those estimated in the budget submitted by the President;

(2) a comparison of the appropriate levels of total budget outlays and total new budget authority, total direct loan obligations, total primary loan guarantee commitments, as set forth

in such concurrent resolution, with those estimated or requested in the budget submitted by the President;

(3) with respect to each major functional category, an estimate of budget outlays and an appropriate level of new budget

authority for all proposed programs and for all existing programs (including renewals thereof), with the estimate and level

for existing programs being divided between permanent authority and funds provided in appropriation Acts, and with

each such division being subdivided between controllable

amounts and all other amounts;

(4) an allocation of the level of Federal revenues recommended in the concurrent resolution among the major

sources of such revenues;

(5) the economic assumptions and objectives which underlie

each of the matters set forth in such concurrent resolution and

any alternative economic assumptions and objectives which the

committee considered;

(6) projections (not limited to the following), for the period of

five fiscal years beginning with such fiscal year, of the estimated levels of total budget outlays and total new budget authority, the estimated revenues to be received, and the estimated surplus or deficit, if any, for each fiscal year in such period, and the estimated levels of tax expenditures (the tax expenditures budget) by major functional categories;

(7) a statement of any significant changes in the proposed

levels of Federal assistance to State and local governments;

(8) information, data, and comparisons indicating the manner in which, and the basis on which, the committee determined each of the matters set forth in the concurrent resolution;

(9) allocations described in section 633(a) of this title.

(10) Omitted.

(f) ACHIEVEMENT OF GOALS FOR REDUCING UNEMPLOYMENT.—
237 Sec. 632 CH. 17A—CONG, BUDGET AND FISCAL OPS.

(1) If, pursuant to section 4(c) of the Employment Act of 1946

[15 U.S.C.A. Sec. 1022a(c)], the President recommends in the

Economic Report that the goals for reducing unemployment set

forth in section 4(b) of such Act [15 U.S.C.A. Sec. 1022a(b)] be

achieved in a year after the close of the five-year period prescribed by such subsection, the concurrent resolution on the

budget for the fiscal year beginning after the date on which

such Economic Report is received by the Congress may set

forth the year in which, in the opinion of the Congress, such

goals can be achieved.

(2) After the Congress has expressed its opinion pursuant to

paragraph (1) as to the year in which the goals for reducing

unemployment set forth in section 4(b) of the Employment Act

of 1946 [15 U.S.C.A. Sec. 1022a(b)] can be achieved, if, pursuant to section 4(e) of such Act [15 U.S.C.A. Sec. 1022a(e)], the

President recommends in the Economic Report that such goals

be achieved in a year which is different from the year in which

the Congress has expressed its opinion that such goals should

be achieved, either in its action pursuant to paragraph (1) or

in its most recent action pursuant to this paragraph, the concurrent resolution on the budget for the fiscal year beginning

after the date on which such Economic Report is received by

the Congress may set forth the year in which, in the opinion

of the Congress, such goals can be achieved.

(3) It shall be in order to amend the provision of such resolution setting forth such year only if the amendment thereto also

proposes to alter the estimates, amounts, and levels (as described in subsection (a) of this section) set forth in such resolution in germane fashion in order to be consistent with the

economic goals (as described in sections 3(a)(2) [15 U.S.C.A.

Sec. 1022(a)(2)] and 4(b) [15 U.S.C.A. Sec. 1022a(b)] of the Employment Act of 1946) which such amendment proposes can be

achieved by the year specified in such amendment.

(g) ECONOMIC ASSUMPTIONS.—

(1) It shall not be in order in the Senate to consider any concurrent resolution on the budget for a fiscal year, or any

amendment thereto, or any conference report thereon, that sets

forth amounts and levels that are determined on the basis of

more than one set of economic and technical assumptions.

(2) The joint explanatory statement accompanying a conference report on a concurrent resolution on the budget shall

set forth the common economic assumptions upon which such

joint statement and conference report are based, or upon which

any amendment contained in the joint explanatory statement

to be proposed by the conferees in the case of technical disagreement, is based.

(3) Subject to periodic reestimation based on changed economic conditions or technical estimates, determinations under

titles III [2 U.S.C.A. Sec. 631 et seq.] and IV [2 U.S.C.A. Sec.

651 et seq.] of the Congressional Budget Act of 1974 shall be

based upon such common economic and technical assumptions.

(h) BUDGET COMMITTEE’S CONSULTATION WITH COMMITTEES.—

The Committee on the Budget of the House of Representatives

shall consult with the committees of its House having legislative
Sec. 633 CH. 17A—CONG. BUDGET AND FISCAL OPS. 238

jurisdiction during the preparation, consideration, and enforcement

of the concurrent resolution on the budget with respect to all matters which relate to the jurisdiction or functions of such committees.

(i) MAXIMUM DEFICIT AMOUNT MAY NOT BE EXCEEDED.—It shall

not be in order in the Senate to consider any concurrent resolution

on the budget as reported to the Senate that would decrease the

excess of social security revenues over social security outlays in any

of the fiscal years covered by the concurrent resolution. No change

in chapter 1 of the Internal Revenue Code of 1986 [26 U.S.C.A. Sec.

1 et seq.] shall be treated as affecting the amount of social security

revenues unless such provision changes the income tax treatment

of social security benefits.

NOTE

Exclusion of Social Security from All Budgets

Section 13301(a) of Pub. L. 101–508 provided that:

‘‘Notwithstanding any other provision of law, the receipts and

disbusements of the Federal Old-Age and Survivors Insurance Trust

Fund and the Federal Disability Insurance Trust Fund shall not be

counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of—

‘‘(1) the budget of the United States Government as submitted

by the President,

‘‘(2) the congressional budget, or

‘‘(3) the Balanced Budget and Emergency Deficit Control Act

of 1985 [Pub. L. 99–177, Title II, Dec. 12, 1985, 99 Stat. 1038].’’

SEC. 633. COMMITTEE ALLOCATIONS.

(a) ALLOCATION OF TOTALS.—(1) For the House of Representatives, the joint explanatory statement accompanying a conference

report on a concurrent resolution on the budget shall include an estimated allocation, based upon such concurrent resolution as recommended in such conference report, of the appropriate levels of

total budget outlays, total new budget authority, and total entitlement authority among each committee of the House of Representatives which has jurisdiction over laws, bills and resolutions providing such new budget authority, or such entitlement authority. The

allocation shall, for each committee, divide new budget authority,

and entitlement authority between amounts provided or required

by law on the date of such conference report (mandatory or uncontrollable amounts), and amounts not so provided or required (discretionary or controllable amounts), and shall make the same division for estimated outlays that would result from such new budget

authority.

(2) For the Senate, the joint explanatory statement accompanying a conference report on a concurrent resolution on the budget

shall include an estimated allocation, based upon such concurrent

resolution as recommended in such conference report, of the appropriate levels of social security outlays for the fiscal year of the resolution and for each of the 4 succeeding fiscal years, total budget

outlays and total new budget authority among each committee of
239 Sec. 633 CH. 17A—CONG, BUDGET AND FISCAL OPS.

the Senate which has jurisdiction over bills and resolutions providing such new budget authority.

(b) REPORTS BY COMMITTEES.—As soon as practicable after a concurrent resolution on the budget is agreed to—

(1) the Committee on Appropriations of each House shall,

after consulting with the Committee on Appropriations of the

other House, (A) subdivide among its subcommittees the allocation of budget outlays and new budget authority allocated to

it in the joint explanatory statement accompanying the conference report on such concurrent resolution, and (B) further

subdivide the amount with respect to each such subcommittee

between controllable amounts and all other amounts; and

(2) every other committee of the House and Senate to which

an allocation was made in such joint explanatory statement

shall, after consulting with the committee or committees of the

other House to which all or part of its allocation was made, (A)

subdivide such allocation among its subcommittees or among

programs over which it has jurisdiction, and (B) further subdivide the amount with respect to each subcommittee or program between controllable amounts and all other amounts.

Each such committee shall promptly report to its House the subdivisions made by it pursuant to this subsection.

(c) POINT OF ORDER.—It shall not be in order in the House of

Representatives or the Senate to consider any bill, joint resolution,

amendment, motion, or conference report, providing—

(1) new budget authority for a fiscal year; or

(2) new spending authority as described in section 651(c)(2)

of this title for a fiscal year

within the jurisdiction of any committee which has received an appropriate allocation of such authority pursuant to subsection (a) of

this section for such fiscal year, unless and until such committee

makes the allocation or subdivisions required by subsection (b) of

this section, in connection with the most recently agreed to concurrent resolution on the budget for such fiscal year.

(d) SUBSEQUENT CONCURRENT RESOLUTIONS.—In the case of a

concurrent resolution on the budget referred to in section 635 of

this title, the allocations under subsection (a) of this section and

the subdivisions under subsection (b) of this section shall be required only to the extent necessary to take into account revisions

made in the most recently agreed to concurrent resolution on the

budget.

(e) ALTERATION OF ALLOCATIONS.—At any time after a committee

reports the allocations required to be made under subsection (b) of

this section, such committee may report to its House an alteration

of such allocations. Any alteration of such allocations must be consistent with any actions already taken by its House on legislation

within the committee’s jurisdiction.

(f) LEGISLATION SUBJECT TO POINT OF ORDER.—

(1) IN HOUSE OF REPRESENTATIVES.—After the Congress has

completed action on a concurrent resolution on the budget for

a fiscal year, it shall not be in order in the House of Representatives to consider any bill, joint resolution, or amendment providing new budget authority for such fiscal year or new entitle-
Sec. 633 CH. 17A—CONG. BUDGET AND FISCAL OPS. 240

ment authority effective during such fiscal year, or any conference report on any such bill or joint resolution, if—

(A) the enactment of such bill or resolution as reported;

(B) the adoption and enactment of such amendment; or

(C) the enactment of such bill or resolution in the form

recommended in such conference report,

would cause the appropriate allocation made pursuant to subsection (b) of this section for such fiscal year of new discretionary budget authority or new entitlement authority to be exceeded.

(2) IN SENATE.—At any time after the Congress has completed action on the concurrent resolution on the budget required to be reported under section 632(a) of this title for a fiscal year, it shall not be in order in the Senate to consider any

bill, joint resolution, amendment, motion, or conference report,

that provides for budget outlays, new budget authority, or new

spending authority (as defined in section 651(c)(2) of this title)

in excess of (A) the appropriate allocation of such outlays or

authority reported under subsection (a) of this section, or (B)

the appropriate allocation (if any) of such outlays or authority

reported under subsection (b) of this section in connection with

the most recently agreed to concurrent resolution on the budget for such fiscal year or provides for social security outlays in

excess of the appropriate allocation of social security outlays

under subsection (a) of this section for the fiscal year of the

resolution or for the total of that year and the 4 succeeding fiscal years. Subparagraph (A) shall not apply to any bill, resolution, amendment, motion, or conference report that is within

the jurisdiction of the Committee on Appropriations. In applying this paragraph—

(A) estimated social security outlays shall be deemed to

be reduced by the excess of estimated social security revenues (including social security revenues provided for in the

bill, resolution, amendment, or conference report with respect to which this paragraph is applied) over the appropriate level of social security revenues specified in the

most recently adopted concurrent resolution on the budget;

(B) estimated social security outlays shall be deemed increased by the shortfall of estimated social security revenues (including social security revenues provided for in the

bill, resolution, amendment, or conference report with respect to which this paragraph is applied) below the appropriate level of social security revenues specified in the

most recently adopted concurrent resolution on the budget;

and

(C) no provision of any bill or resolution, or any amendment thereto or conference report thereon, involving a

change in chapter 1 of Title 26 shall be treated as affecting

the amount of social security revenues unless such provision changes the income tax treatment of social security

benefits.

The Chairman of the Committee on the Budget of the Senate

may file with the Senate appropriately revised allocations

under subsection (a) of this section and revised functional lev-
241 Sec. 634 CH. 17A—CONG, BUDGET AND FISCAL OPS.

els and aggregates to reflect the application of the preceding

sentence. Such revised allocations, functional levels, and aggregates shall be considered as allocations, functional levels, and

aggregates contained in the most recently agreed to concurrent

resolution on the budget, and the appropriate committees shall

report revised allocations pursuant to subsection (b) of this section.

(g) DETERMINATIONS BY BUDGET COMMITTEES.—For purposes of

this section, the levels of new budget authority, spending authority

as described in section 651(c)(2) of this title, outlays, and new credit authority for a fiscal year shall be determined on the basis of estimates made by the Committee on the Budget of the House of

Representatives or the Senate, as the case may be.

SEC. 634. ADOPTION OF FIRST CONCURRENT RESOLUTION ON THE

BUDGET PRIOR TO CONSIDERATION OF LEGISLATION

PROVIDING NEW BUDGET AUTHORITY, NEW SPENDING

AUTHORITY, NEW CREDIT AUTHORITY, OR CHANGES IN

REVENUES OR PUBLIC DEBT LIMIT.

(a) IN GENERAL.—It shall not be in order in either the House of

Representatives or the Senate to consider any bill, joint resolution,

amendment, motion, or conference report as reported to the House

or Senate which provides—

(1) new budget authority for a fiscal year;

(2) an increase or decrease in revenues to become effective

during a fiscal year;

(3) an increase or decrease in the public debt limit to become

effective during a fiscal year;

(4) new entitlement authority to become effective during a

fiscal year;

(5) in the Senate only, new spending authority (as defined in

section 651(c)(2) of this title) for a fiscal year; or

(6) in the Senate only, outlays,

until the concurrent resolution on the budget for such fiscal year

(or, in the Senate, a concurrent resolution on the budget covering

such fiscal year) has been agreed to pursuant to section 632 of this

title.

(b) EXCEPTIONS.—

(1) In the House of Representatives, subsection (a) of this

section does not apply to any bill or resolution—

(A) providing new budget authority which first becomes

available in a fiscal year following the fiscal year to which

the concurrent resolution applies; or

(B) increasing or decreasing revenues which first become

effective in a fiscal year following the fiscal year to which

the concurrent resolution applies.

After May 15 of any calendar year, subsection (a) of this section does not apply in the House of Representatives to any general appropriation bill, or amendment thereto, which provides

new budget authority for the fiscal year beginning in such calendar year.

(2) In the Senate, subsection (a) of this section does not

apply to any bill or resolution making advance appropriations

for the fiscal year to which the concurrent resolution applies

and the two succeeding fiscal years.
Sec. 635 CH. 17A—CONG. BUDGET AND FISCAL OPS. 242

(c) WAIVER IN SENATE.—

(1) The committee of the Senate which reports any bill or

resolution (or amendment thereto) to which subsection (a) of

this section applies may at or after the time it reports such bill

or resolution (or amendment), report a resolution to the Senate

(A) providing for the waiver of subsection (a) of this section

with respect to such bill or resolution (or amendment), and (B)

stating the reasons why the waiver is necessary. The resolution shall then be referred to the Committee on the Budget of

the Senate. That committee shall report the resolution to the

Senate within 10 days after the resolution is referred to it (not

counting any day on which the Senate is not in session) beginning with the day following the day on which it is so referred,

accompanied by that committee’s recommendations and reasons for such recommendations with respect to the resolution.

If the committee does not report the resolution within such 10-

day period, it shall automatically be discharged from further

consideration of the resolution and the resolution shall be

placed on the calendar.

(2) During the consideration of any such resolution, debate

shall be limited to one hour, to be equally divided between, and

controlled by, the majority leader and minority leader or their

designees, and the time on any debatable motion or appeal

shall be limited to twenty minutes, to be equally divided between, and controlled by, the mover and the manager of the

resolution. In the event the manager of the resolution is in

favor of any such motion or appeal, the time in opposition

thereto shall be controlled by the minority leader or his designee. Such leaders, or either of them, may, from the time

under their control on the passage of such resolution, allot additional time to any Senator during the consideration of any

debatable motion or appeal. No amendment to the resolution

is in order.

(3) If, after the Committee on the Budget has reported (or

been discharged from further consideration of) the resolution,

the Senate agrees to the resolution, then subsection (a) of this

section shall not apply with respect to the bill or resolution (or

amendment thereto) to which the resolution so agreed to applies.

SEC. 635. PERMISSIBLE REVISIONS OF CONCURRENT RESOLUTIONS

ON THE BUDGET.

(a) IN GENERAL.—At any time after the concurrent resolution on

the budget for a fiscal year has been agreed to pursuant to section

632 of this title, and before the end of such fiscal year, the two

Houses may adopt a concurrent resolution on the budget which revises or reaffirms the concurrent resolution on the budget for such

fiscal year most recently agreed to.

(b) ECONOMIC ASSUMPTIONS.—The provisions of section 632(g) of

this title shall apply with respect to concurrent resolutions on the

budget under this section (and amendments thereto and conference

reports thereon) in the same way they apply to concurrent resolutions on the budget under such section 632(g) of this title (and

amendments thereto and conference reports thereon).
243 Sec. 636 CH. 17A—CONG, BUDGET AND FISCAL OPS.

SEC. 636. CONSIDERATION OF CONCURRENT RESOLUTIONS ON THE

BUDGET.

(a) PROCEDURE IN HOUSE OF REPRESENTATIVES AFTER REPORT OF

COMMITTEE; DEBATE.—

(1) When the Committee on the Budget of the House of Representatives has reported any concurrent resolution on the

budget, it is in order at any time after the fifth day (excluding

Saturdays, Sundays, and legal holidays) following the day on

which the report upon such resolution by the Committee on the

Budget has been available to Members of the House and, if applicable, after the first day (excluding Saturdays, Sundays, and

legal holidays) following the day on which a report upon such

resolution by the Committee on Rules pursuant to section

632(c) of this title has been available to Members of the House

(even though a previous motion to the same effect has been

disagreed to) to move to proceed to the consideration of the

concurrent resolution. The motion is highly privileged and is

not debatable. An amendment to the motion is not in order,

and it is not in order to move to reconsider the vote by which

the motion is agreed to or disagreed to.

(2) General debate on any concurrent resolution on the budget in the House of Representatives shall be limited to not more

than 10 hours, which shall be divided equally between the majority and minority parties, plus such additional hours of debate as are consumed pursuant to paragraph (3). A motion further to limit debate is not debatable. A motion to recommit the

concurrent resolution is not in order, and it is not in order to

move to reconsider the vote by which the concurrent resolution

is agreed to or disagreed to.

(3) Following the presentation of opening statements on the

concurrent resolution on the budget for a fiscal year by the

chairman and ranking minority member of the Committee on

the Budget of the House, there shall be a period of up to four

hours for debate on economic goals and policies.

(4) Only if a concurrent resolution on the budget reported by

the Committee on the Budget of the House sets forth the economic goals (as described in sections 1022(a) and 1022a(b) of

Title 15) which the estimates, amounts, and levels (as described in section 632(a) of this title) set forth in such resolution are designed to achieve, shall it be in order to offer to such

resolution an amendment relating to such goals, and such

amendment shall be in order only if it also proposes to alter

such estimates, amounts, and levels in germane fashion in

order to be consistent with the goals proposed in such amendment.

(5) Consideration of any concurrent resolution on the budget

by the House of Representatives shall be in the Committee of

the Whole, and the resolution shall be considered for amendment under the five-minute rule in accordance with the applicable provisions of rule XXIII of the Rules of the House of Representatives. After the Committee rises and reports the resolution back to the House, the previous question shall be considered as ordered on the resolution and any amendments thereto

to final passage without intervening motion; except that it
Sec. 636 CH. 17A—CONG. BUDGET AND FISCAL OPS. 244

shall be in order at any time prior to final passage (notwithstanding any other rule or provision of law) to adopt an

amendment (or a series of amendments) changing any figure or

figures in the resolution as so reported to the extent necessary

to achieve mathematical consistency.

(6) Debate in the House of Representatives on the conference

report on any concurrent resolution on the budget shall be limited to not more than 5 hours, which shall be divided equally

between the majority and minority parties. A motion further to

limit debate is not debatable. A motion to recommit the conference report is not in order, and it is not in order to move

to reconsider the vote by which the conference report is agreed

to or disagreed to.

(7) Appeals from decisions of the Chair relating to the application of the Rules of the House of Representatives to the procedure relating to any concurrent resolution on the budget

shall be decided without debate.

(b) PROCEDURE IN SENATE AFTER REPORT OF COMMITTEE; DE- BATE; AMENDMENTS.— (1) Debate in the Senate on any concurrent resolution on the

budget, and all amendments thereto and debatable motions

and appeals in connection therewith, shall be limited to not

more than 50 hours, except that with respect to any concurrent

resolution referred to in section 635(a) of this title all such debate shall be limited to not more than 15 hours. The time shall

be equally divided between, and controlled by, the majority

leader and the minority leader or their designees.

(2) Debate in the Senate on any amendment to a concurrent

resolution on the budget shall be limited to 2 hours, to be

equally divided between, and controlled by, the mover and the

manager of the concurrent resolution, and debate on any

amendment to an amendment, debatable motion, or appeal

shall be limited to 1 hour, to be equally divided between, and

controlled by, the mover and the manager of the concurrent

resolution, except that in the event the manager of the concurrent resolution is in favor of any such amendment, motion, or

appeal, the time in opposition thereto shall be controlled by the

minority leader or his designee. No amendment that is not germane to the provisions of such concurrent resolution shall be

received. Such leaders, or either of them, may, from the time

under their control on the passage of the concurrent resolution,

allot additional time to any Senator during the consideration

of any amendment, debatable motion, or appeal.

(3) Following the presentation of opening statements on the

concurrent resolution on the budget for a fiscal year by the

chairman and ranking minority member of the Committee on

the Budget of the Senate, there shall be a period of up to four

hours for debate on economic goals and policies.

(4) Subject to the other limitations of this Act, only if a concurrent resolution on the budget reported by the Committee on

the Budget of the Senate sets forth the economic goals (as described in sections 1022(a)(2) and 1022a(b) of Title 15) which

the estimates, amounts, and levels (as described in section

632(a) of this title) set forth in such resolution are designed to
245 Sec. 636 CH. 17A—CONG, BUDGET AND FISCAL OPS.

achieve, shall it be in order to offer to such resolution an

amendment relating to such goals, and such amendment shall

be in order only if it also proposes to alter such estimates,

amounts, and levels in germane fashion in order to be consistent with the goals proposed in such amendment.

(5) A motion to further limit debate is not debatable. A motion to recommit (except a motion to recommit with instructions to report back within a specified number of days, not to

exceed 3, not counting any day on which the Senate is not in

session) is not in order. Debate on any such motion to recommit shall be limited to 1 hour, to be equally divided between,

and controlled by, the mover and the manager of the concurrent resolution.

(6) Notwithstanding any other rule, an amendment or series

of amendments to a concurrent resolution on the budget proposed in the Senate shall always be in order if such amendment or series of amendments proposes to change any figure

or figures then contained in such concurrent resolution so as

to make such concurrent resolution mathematically consistent

or so as to maintain such consistency.

(c) ACTION ON CONFERENCE REPORTS IN THE SENATE.— (1) A motion to proceed to the consideration of the conference

report on any concurrent resolution on the budget (or a reconciliation bill or resolution) may be made even though a previous motion to the same effect has been disagreed to.

(2) During the consideration in the Senate of the conference

report (or a message between Houses) on any concurrent resolution on the budget, and all amendments in disagreement,

and all amendments thereto, and debatable motions and appeals in connection therewith, debate shall be limited to 10

hours, to be equally divided between, and controlled by, the

majority leader and minority leader or their designees. Debate

on any debatable motion or appeal related to the conference report (or a message between Houses) shall be limited to 1 hour,

to be equally divided between, and controlled by, the mover

and the manager of the conference report (or a message between Houses).

(3) Should the conference report be defeated, debate on any

request for a new conference and the appointment of conferees

shall be limited to 1 hour, to be equally divided between, and

controlled by, the manager of the conference report and the minority leader or his designee, and should any motion be made

to instruct the conferees before the conferees are named, debate on such motion shall be limited to one-half hour, to be

equally divided between, and controlled by, the mover and the

manager of the conference report. Debate on any amendment

to any such instructions shall be limited to 20 minutes, to be

equally divided between and controlled by the mover and the

manager of the conference report. In all cases when the manager of the conference report is in favor of any motion, appeal,

or amendment, the time in opposition shall be under the control of the minority leader or his designee.

(4) In any case in which there are amendments in disagreement, time on each amendment shall be limited to 30 minutes,
Sec. 637 CH. 17A—CONG. BUDGET AND FISCAL OPS. 246

to be equally divided between, and controlled by, the manager

of the conference report and the minority leader or his designee. No amendment that is not germane to the provisions of

such amendments shall be received.

(d) CONCURRENT RESOLUTION MUST BE CONSISTENT IN SENATE.—It shall not be in order in the Senate to vote on the question

of agreeing to—

(1) a concurrent resolution on the budget unless the figures

then contained in such resolution are mathematically consistent; or

(2) a conference report on a concurrent resolution on the

budget unless the figures contained in such resolution, as recommended in such conference report, are mathematically consistent.

(e) Redesignated (d).

SEC. 637. LEGISLATION DEALING WITH CONGRESSIONAL BUDGET

MUST BE HANDLED BY BUDGET COMMITTEES.

No bill, resolution, amendment, motion, or conference report,

dealing with any matter which is within the jurisdiction of the

Committee on the Budget of either House shall be considered in

that House unless it is a bill or resolution which has been reported

by the Committee on the Budget of that House (or from the consideration of which such committee has been discharged) or unless it

is an amendment to such a bill or resolution.

SEC. 638. HOUSE COMMITTEE ACTION ON ALL APPROPRIATION BILLS

TO BE COMPLETED BY JUNE 10.

On or before June 10 of each year, the Committee on Appropriations of the House of Representatives shall report annual appropriation bills providing new budget authority under the jurisdiction

of all of its subcommittees for the fiscal year which begins on October 1 of that year.

SEC. 639. REPORTS, SUMMARIES, AND PROJECTIONS OF CONGRESSIONAL BUDGET ACTIONS.

(a) REPORTS ON LEGISLATION PROVIDING NEW BUDGET AUTHORITY, NEW SPENDING AUTHORITY, OR NEW CREDIT AUTHORITY, OR

PROVIDING INCREASE OR DECREASE IN REVENUES OR TAX EXPENDITURES.—

(1) Whenever a committee of either House reports to its

House a bill or resolution, or committee amendment thereto,

providing new budget authority (other than continuing appropriations), new spending authority described in section

651(c)(2) of this title, or new credit authority, or providing an

increase or decrease in revenues or tax expenditures for a fiscal year (or fiscal years), the report accompanying that bill or

resolution shall contain a statement, or the committee shall

make available such a statement in the case of an approved

committee amendment which is not reported to its House, prepared after consultation with the Director of the Congressional

Budget Office—

(A) comparing the levels in such measure to the appropriate allocations in the reports submitted under section

633(b) of this title for the most recently agreed to concur-
247 Sec. 639 CH. 17A—CONG, BUDGET AND FISCAL OPS.

rent resolution on the budget for such fiscal year (or fiscal

years);

(B) including an identification of any new spending authority described in section 651(c)(2) of this title which is

contained in such measure and a justification for the use

of such financing method instead of annual appropriations;

(C) containing a projection by the Congressional Budget

Office of how such measure will affect the levels of such

budget authority, budget outlays, spending authority, revenues, tax expenditures, direct loan obligations, or primary

loan guarantee commitments under existing law for such

fiscal year (or fiscal years) and each of the four ensuing fiscal years, if timely submitted before such report is filed;

and

(D) containing an estimate by the Congressional Budget

Office of the level of new budget authority for assistance

to State and local governments provided by such measure,

if timely submitted before such report is filed.

(2) Whenever a conference report is filed in either House and

such conference report or any amendment reported in disagreement or any amendment contained in the joint statement of

managers to be proposed by the conferees in the case of technical disagreement on such bill or resolution provides new

budget authority (other than continuing appropriations), new

spending authority described in section 651(c)(2) of this title,

or new credit authority, or provides an increase or decrease in

revenues for a fiscal year (or fiscal years), the statement of

managers accompanying such conference report shall contain

the information described in paragraph (1), if available on a

timely basis. If such information is not available when the conference report is filed, the committee shall make such information available to Members as soon as practicable prior to the

consideration of such conference report.

(b) UP-TO-DATE TABULATION OF CONGRESSIONAL BUDGET ACTION.—

(1) The Director of the Congressional Budget Office shall

issue to the committees of the House of Representatives and

the Senate reports on at least a monthly basis detailing and

tabulating the progress of congressional action on bills and resolutions providing new budget authority, new spending authority described in section 651(c)(2) of this title, or new credit authority, or providing an increase or decrease in revenues or tax

expenditures for each fiscal year covered by a concurrent resolution on the budget. Such reports shall include but are not

limited to an up-to-date tabulation comparing the appropriate

aggregate and functional levels (including outlays) included in

the most recently adopted concurrent resolution on the budget

with the levels provided in bills and resolutions reported by

committees or adopted by either House or by the Congress, and

with the levels provided by law for the fiscal year preceding

the first fiscal year covered by the appropriate concurrent resolution.
Sec. 640 CH. 17A—CONG. BUDGET AND FISCAL OPS. 248

(2) The Committee on the Budget of each House shall make

available to Members of its House summary budget

scorekeeping reports. Such reports—

(A) shall be made available on at least a monthly basis,

but in any case frequently enough to provide Members of

each House an accurate representation of the current status of congressional consideration of the budget;

(B) shall include, but are not limited to, summaries of

tabulations provided under subsection (b)(1) of this section;

and

(C) shall be based on information provided under subsection (b)(1) of this section without substantive revision.

The chairman of the Committee on the Budget of the House

of Representatives shall submit such reports to the Speaker.

(c) FIVE-YEAR PROJECTION OF CONGRESSIONAL BUDGET ACTION.—

As soon as practicable after the beginning of each fiscal year, the

Director of the Congressional Budget Office shall issue a report

projecting for the period of 5 fiscal years beginning with such fiscal

year—

(1) total new budget authority and total budget outlays for

each fiscal year in such period;

(2) revenues to be received and the major sources thereof,

and the surplus or deficit, if any, for each fiscal year in such

period;

(3) tax expenditures for each fiscal year in such period;

(4) entitlement authority for each fiscal year in such period;

and

(5) credit authority for each fiscal year in such period.

SEC. 640. HOUSE APPROVAL OF REGULAR APPROPRIATION BILLS.

It shall not be in order in the House of Representatives to consider any resolution providing for an adjournment period of more

than three calendar days during the month of July until the House

of Representatives has approved annual appropriation bills providing new budget authority under the jurisdiction of all the subcommittees of the Committee on Appropriations for the fiscal year

beginning on October 1 of such year. For purposes of this section,

the chairman of the Committee on Appropriations of the House of

Representatives shall periodically advise the Speaker as to changes

in jurisdiction among its various subcommittees.

SEC. 641. RECONCILIATION.

(a) INCLUSION OF RECONCILIATION DIRECTIVES IN CONCURRENT

RESOLUTIONS ON THE BUDGET.—A concurrent resolution on the

budget for any fiscal year, to the extent necessary to effectuate the

provisions and requirements of such resolution, shall—

(1) specify the total amount by which—

(A) new budget authority for such fiscal year;

(B) budget authority initially provided for prior fiscal

years;

(C) new entitlement authority which is to become effective during such fiscal year; and

(D) credit authority for such fiscal year, contained in

laws, bills, and resolutions within the jurisdiction of a committee, is to be changed and direct that committee to de-
249 Sec. 641 CH. 17A—CONG, BUDGET AND FISCAL OPS.

termine and recommend changes to accomplish a change of

such total amount;

(2) specify the total amount by which revenues are to be

changed and direct that the committees having jurisdiction to

determine and recommend changes in the revenue laws, bills,

and resolutions to accomplish a change of such total amount;

(3) specify the amounts by which the statutory limit on the

public debt is to be changed and direct the committee having

jurisdiction to recommend such change; or

(4) specify and direct any combination of the matters described in paragraphs (1), (2), and (3) (including a direction to

achieve deficit reduction).

(b) LEGISLATIVE PROCEDURE.—If a concurrent resolution containing directives to one or more committees to determine and recommend changes in laws, bills, or resolutions is agreed to in accordance with subsection (a) of this section, and—

(1) only one committee of the House or the Senate is directed

to determine and recommend changes, that committee shall

promptly make such determination and recommendations and

report to its House reconciliation legislation containing such

recommendations; or

(2) more than one committee of the House or the Senate is

directed to determine and recommend changes, each such committee so directed shall promptly make such determination

and recommendations and submit such recommendations to

the Committee on the Budget of its House, which, upon receiving all such recommendations, shall report to its House reconciliation legislation carrying out all such recommendations

without any substantive revision.

For purposes of this subsection, a reconciliation resolution is a concurrent resolution directing the Clerk of the House of Representatives or the Secretary of the Senate, as the case may be, to make

specified changes in bills and resolutions which have not been enrolled.

(c) COMPLIANCE WITH RECONCILIATION DIRECTIONS.—

(1) Any committee of the House of Representatives or the

Senate that is directed, pursuant to a concurrent resolution on

the budget, to determine and recommend changes of the type

described in paragraphs (1) and (2) of subsection (a) of this section with respect to laws within its jurisdiction, shall be

deemed to have complied with such directions—

(A) if—

(i) the amount of the changes of the type described

in paragraph (1) of such subsection recommended by

such committee do not exceed or fall below the amount

of the changes such committee was directed by such

concurrent resolution to recommend under such paragraph by more than 20 percent of the total of the

amounts of the changes such committee was directed

to make under paragraphs (1) and (2) of such subsection, and

(ii) the amount of the changes of the type described

in paragraph (2) of such subsection recommended by

such committee do not exceed or fall below the amount
Sec. 641 CH. 17A—CONG. BUDGET AND FISCAL OPS. 250

of the changes such committee was directed by such

concurrent resolution to recommend under that paragraph by more than 20 percent of the total of the

amounts of the changes such committee was directed

to make under paragraphs (1) and (2) of such subsection; and

(B) if the total amount of the changes recommended by

such committee is not less than the total of the amounts

of the changes such committee was directed to make under

paragraphs (1) and (2) of such subsection.

(2)(A) Upon the reporting to the Committee on the Budget of

the Senate of a recommendation that shall be deemed to have

complied with such directions solely by virtue of this subsection, the chairman of that committee may file with the Senate appropriately revised allocations under section 633(a) of

this title and revised functional levels and aggregates to carry

out this subsection.

(B) Upon the submission to the Senate of a conference report

recommending a reconciliation bill or resolution in which a

committee shall be deemed to have complied with such directions solely by virtue of this subsection, the chairman of the

Committee on the Budget of the Senate may file with the Senate appropriately revised allocations under section 633(a) of

this title and revised functional levels and aggregates to carry

out this subsection.

(C) Allocations, functional levels, and aggregates revised pursuant to this paragraph shall be considered to be allocations,

functional levels, and aggregates contained in the concurrent

resolution on the budget pursuant to section 632 of this title.

(D) Upon the filing of revised allocations pursuant to this

paragraph, the reporting committee shall report revised allocations pursuant to section 633(b) of this title to carry out this

subsection.

(d) LIMITATION ON AMENDMENTS TO RECONCILIATION BILLS AND

RESOLUTIONS.—

(1) It shall not be in order in the House of Representatives

to consider any amendment to a reconciliation bill or reconciliation resolution if such amendment would have the effect of increasing any specific budget outlays above the level of such

outlays provided in the bill or resolution (for the fiscal years

covered by the reconciliation instructions set forth in the most

recently agreed to concurrent resolution on the budget), or

would have the effect of reducing any specific Federal revenues

below the level of such revenues provided in the bill or resolution (for such fiscal years), unless such amendment makes at

least an equivalent reduction in other specific budget outlays,

an equivalent increase in other specific Federal revenues, or an

equivalent combination thereof (for such fiscal years), except

that a motion to strike a provision providing new budget authority or new entitlement authority may be in order.

(2) It shall not be in order in the Senate to consider any

amendment to a reconciliation bill or reconciliation resolution

if such amendment would have the effect of decreasing any

specific budget outlay reductions below the level of such outlay
251 Sec. 641 CH. 17A—CONG, BUDGET AND FISCAL OPS.

reductions provided (for the fiscal years covered) in the reconciliation instructions which relate to such bill or resolution

set forth in a resolution providing for reconciliation, or would

have the effect of reducing Federal revenue increases below the

level of such revenue increases provided (for such fiscal years)

in such instructions relating to such bill or resolution, unless

such amendment makes a reduction in other specific budget

outlays, an increase in other specific Federal revenues, or a

combination thereof (for such fiscal years) at least equivalent

to any increase in outlays or decrease in revenues provided by

such amendment, except that a motion to strike a provision

shall always be in order.

(3) Paragraphs (1) and (2) shall not apply if a declaration of

war by the Congress is in effect.

(4) For purposes of this section, the levels of budget outlays

and Federal revenues for a fiscal year shall be determined on

the basis of estimates made by the Committee on the Budget

of the House of Representatives or of the Senate, as the case

may be.

(5) The Committee on Rules of the House of Representatives

may make in order amendments to achieve changes specified

by reconciliation directives contained in a concurrent resolution

on the budget if a committee or committees of the House fail

to submit recommended changes to its Committee on the Budget pursuant to its instruction.

(e) PROCEDURE IN SENATE.—

(1) Except as provided in paragraph (2), the provisions of section 636 of this title for the consideration in the Senate of concurrent resolutions on the budget and conference reports thereon shall also apply to the consideration in the Senate of reconciliation bills reported under subsection (b) of this section

and conference reports thereon.

(2) Debate in the Senate on any reconciliation bill reported

under subsection (b) of this section, and all amendments thereto and debatable motions and appeals in connection therewith,

shall be limited to not more than 20 hours.

(f) COMPLETION OF RECONCILIATION PROCESS.—It shall not be in

order in the House of Representatives to consider any resolution

providing for an adjournment period of more than three calendar

days during the month of July until the House of Representatives

has completed action on the reconciliation legislation for the fiscal

year beginning on October 1 of the calendar year to which the adjournment resolution pertains, if reconciliation legislation is required to be reported by the concurrent resolution on the budget

for such fiscal year.

(g) LIMITATION ON CHANGES TO SOCIAL SECURITY ACT.—Notwithstanding any other provision of law, it shall not be in order in the

Senate or the House of Representatives to consider any reconciliation bill or reconciliation resolution reported pursuant to a concurrent resolution on the budget agreed to under section 632 or 635

of this title, or a joint resolution pursuant to section 907(d) of this

title, or any amendment thereto or conference report thereon, that

contains recommendations with respect to the old-age, survivors,
Sec. 642 CH. 17A—CONG. BUDGET AND FISCAL OPS. 252

and disability insurance program established under title II of the

Social Security Act [42 U.S.C.A. Sec. 401 et seq.].

SEC. 642. NEW BUDGET AUTHORITY, NEW SPENDING AUTHORITY, AND

REVENUE LEGISLATION TO BE WITHIN APPROPRIATE

LEVELS.

(a) LEGISLATION SUBJECT TO POINT OF ORDER.—

(1) Except as provided by subsection (b) of this section, after

the Congress has completed action on a concurrent resolution

on the budget for a fiscal year, it shall not be in order in either

the House of Representatives or the Senate to consider any

bill, joint resolution, amendment, motion, or conference report

providing new budget authority for such fiscal year, providing

new entitlement authority effective during such fiscal year, or

reducing revenues for such fiscal year, if—

(A) the enactment of such bill or resolution as reported;

(B) the adoption and enactment of such amendment; or

(C) the enactment of such bill or resolution in the form

recommended in such conference report;

would cause the appropriate level of total new budget authority

or total budget outlays set forth in the most recently agreed to

concurrent resolution on the budget for such fiscal year to be

exceeded, or would cause revenues to be less than the appropriate level of total revenues set forth in such concurrent resolution except in the case that a declaration of war by the Congress is in effect.

(2)(A) After the Congress has completed action on a concurrent resolution on the budget, it shall not be in order in the

Senate to consider any bill, resolution, amendment, motion, or

conference report that would cause the appropriate level of

total new budget authority or total budget outlays or social security outlays set forth for the first fiscal year in the most recently agreed to concurrent resolution on the budget covering

such fiscal year to be exceeded, or would cause revenues to be

less than the appropriate level of total revenues (or social security revenues to be less than the appropriate level of social security revenues) set forth for the first fiscal year covered by the

resolution and for the period including the first fiscal year plus

the following 4 fiscal years in such concurrent resolution.

(B) In applying this paragraph—

(i)(I) estimated social security outlays shall be deemed to

be reduced by the excess of estimated social security revenues (including those provided for in the bill, resolution,

amendment, or conference report with respect to which

this subsection is applied) over the appropriate level of Social Security revenues specified in the most recently

agreed to concurrent resolution on the budget;

(II) estimated social security revenues shall be deemed

to be increased to the extent that estimated social security

outlays are less (taking into account the effect of the bill,

resolution, amendment, or conference report to which this

subsection is being applied) than the appropriate level of

social security outlays in the most recently agreed to concurrent resolution on the budget; and
253 Sec. 642 CH. 17A—CONG, BUDGET AND FISCAL OPS.

(ii)(I) estimated Social Security outlays shall be deemed

to be increased by the shortfall of estimated social security

revenues (including Social Security revenues provided for

in the bill, resolution, amendment, or conference report

with respect to which this subsection is applied) below the

appropriate level of social security revenues specified in

the most recently adopted concurrent resolution on the

budget; and

(II) estimated social security revenues shall be deemed

to be reduced by the excess of estimated social security

outlays (including social security outlays provided for in

the bill, resolution, amendment, or conference report with

respect to which this subsection is applied) above the appropriate level of social security outlays specified in the

most recently adopted concurrent resolution on the budget;

and

(iii) no provision of any bill or resolution, or any amendment thereto or conference report thereon, involving a

change in chapter 1 of Title 26 shall be treated as affecting

the amount of social security revenues unless such provision changes the income tax treatment of social security

benefits.

The chairman of the Committee on the Budget of the Senate

may file with the Senate appropriately revised allocations

under section 633(a) of this title and revised functional levels

and aggregates to reflect the application of the preceding sentence. Such revised allocations, functional levels, and aggregates shall be considered as allocations, functional levels, and

aggregates contained in the most recently agreed to concurrent

resolution on the budget, and the appropriate committees shall

report revised allocations pursuant to section 633(b) of this

title.

(b) EXCEPTION IN HOUSE OF REPRESENTATIVES.—Subsection (a) of

this section shall not apply in the House of Representatives to any

bill, resolution, or amendment which provides new budget authority or new entitlement authority effective during such fiscal year,

or to any conference report on any such bill or resolution, if—

(1) the enactment of such bill or resolution as reported;

(2) the adoption and enactment of such amendment; or

(3) the enactment of such bill or resolution in the form recommended in such conference report, would not cause the appropriate allocation of new discretionary budget authority or

new entitlement authority made pursuant to section 633(a) of

this title for such fiscal year, for the committee within whose

jurisdiction such bill, resolution, or amendment falls, to be exceeded.

(c) DETERMINATION OF BUDGET LEVELS.—For purposes of this

section, the levels of new budget authority, budget outlays, new entitlement authority, and revenues for a fiscal year shall be determined on the basis of estimates made by the Committee on the

Budget of the House of Representatives or of the Senate, as the

case may be.
Sec. 643 CH. 17A—CONG. BUDGET AND FISCAL OPS. 254

SEC. 643. EFFECTS OF POINTS OF ORDER.

(a) POINTS OF ORDER IN THE SENATE AGAINST AMENDMENTS BETWEEN THE HOUSES.—Each provision of this Act that establishes a

point of order against an amendment also establishes a point of

order in the Senate against an amendment between the Houses. If

a point of order under this Act is raised in the Senate against an

amendment between the Houses, and the Presiding Officer sustains the point of order, the effect shall be the same as if the Senate had disagreed to the amendment.

(b) EFFECT OF A POINT OF ORDER ON A BILL IN THE SENATE.—

In the Senate, if the Chair sustains a point of order under this Act

against a bill, the Chair shall then send the bill to the committee

of appropriate jurisdiction for further consideration.

SEC. 644. EXTRANEOUS MATTER IN RECONCILIATION LEGISLATION.

(a) IN GENERAL.—When the Senate is considering a reconciliation

bill or a reconciliation resolution pursuant to section 641 of this

title, (whether that bill or resolution originated in the Senate or

the House) or section 907d of this title, upon a point of order being

made by any Senator against material extraneous to the instructions to a committee which is contained in any title or provision of

the bill or resolution or offered as an amendment to the bill or resolution, and the point of order is sustained by the Chair, any part

of said title or provision that contains material extraneous to the

instructions to said Committee as defined in subsection (b) of this

section shall be deemed stricken from the bill and may not be offered as an amendment from the floor.

(b) EXTRANEOUS PROVISIONS.—

(1)(A) Except as provided in paragraph (2), a provision of a

reconciliation bill or reconciliation resolution considered pursuant to section 641 of this title shall be considered extraneous

if such provision does not produce a change in outlays or revenues, including changes in outlays and revenues brought about

by changes in the terms and conditions under which outlays

are made or revenues are required to be collected (but a provision in which outlay decreases or revenue increases exactly offset outlay increases or revenue decreases shall not be considered extraneous by virtue of this subparagraph); (B) any provision producing an increase in outlays or decrease in revenues

shall be considered extraneous if the net effect of provisions reported by the Committee reporting the title containing the provision is that the Committee fails to achieve its reconciliation

instructions; (C) a provision that is not in the jurisdiction of

the Committee with jurisdiction over said title or provision

shall be considered extraneous; (D) a provision shall be considered extraneous if it produces changes in outlays or revenues

which are merely incidental to the non-budgetary components

of the provision; (E) a provision shall be considered to be extraneous if it increases, or would increase, net outlays, or if it decreases, or would decrease, revenues during a fiscal year after

the fiscal years covered by such reconciliation bill or reconciliation resolution, and such increases or decreases are greater

than outlay reductions or revenue increases resulting from

other provisions in such title in such year; and (F) a provision
255 Sec. 644 CH. 17A—CONG, BUDGET AND FISCAL OPS.

shall be considered extraneous if it violates section 641(g) of

this title.

(2) A Senate-originated provision shall not be considered extraneous under paragraph (1)(A) if the Chairman and Ranking

Minority Member of the Committee on the Budget and the

Chairman and Ranking Minority Member of the Committee

which reported the provision certify that: (A) the provision

mitigates direct effects clearly attributable to a provision

changing outlays or revenues and both provisions together

produce a net reduction in the deficit; (B) the provision will result in a substantial reduction in outlays or a substantial increase in revenues during fiscal years after the fiscal years covered by the reconciliation bill or reconciliation resolution; (C)

a reduction of outlays or an increase in revenues is likely to

occur as a result of the provision, in the event of new regulations authorized by the provision or likely to be proposed, court

rulings on pending litigation, or relationships between economic indices and stipulated statutory triggers pertaining to

the provision, other than the regulations, court rulings or relationships currently projected by the Congressional Budget Office for scorekeeping purposes; or (D) such provision will be

likely to produce a significant reduction in outlays or increase

in revenues but, due to insufficient data, such reduction or increase cannot be reliably estimated.

(3) A provision reported by a committee shall not be considered extraneous under paragraph (1)(C) if (A) the provision is

an integral part of a provision or title, which if introduced as

a bill or resolution would be referred to such committee, and

the provision sets forth the procedure to carry out or implement the substantive provisions that were reported and which

fall within the jurisdiction of such committee; or (B) the provision states an exception to, or a special application of, the general provision or title of which it is a part and such general

provision or title if introduced as a bill or resolution would be

referred to such committee.

(c) POINT OF ORDER.—When the Senate is considering a conference report on, or an amendment between the Houses in relation

to, a reconciliation bill or reconciliation resolution pursuant to section 641 of this title, upon—

(1) a point of order being made by any Senator against extraneous material meeting the definition of subsections (b)(1)(A),

(b)(1)(B), (b)(1)(D), (b)(1)(E), or (b)(1)(F) of this section, and

(2) such point of order being sustained,

such material contained in such conference report or amendment

shall be deemed stricken, and the Senate shall proceed, without intervening action or motion, to consider the question of whether the

Senate shall recede from its amendment and concur with a further

amendment, or concur in the House amendment with a further

amendment, as the case may be, which further amendment shall

consist of only that portion of the conference report or House

amendment, as the case may be, not so stricken. Any such motion

in the Senate shall be debatable for two hours. In any case in

which such point of order is sustained against a conference report
Sec. 644 CH. 17A—CONG. BUDGET AND FISCAL OPS. 256

(or Senate amendment derived from such conference report by operation of this subsection) no further amendment shall be in order.

(d) EXTRANEOUS MATERIALS.—Upon the reporting or discharge of

a reconciliation bill or resolution pursuant to section 641 of this

title in the Senate, and again upon the submission of a conference

report on such a reconciliation bill or resolution, the Committee on

the Budget of the Senate shall submit for the record a list of material considered to be extraneous under subsections (b)(1)(A),

(b)(1)(B), and (b)(1)(E) of this section to the instructions of a committee as provided in this section. The inclusion or exclusion of a

provision shall not constitute a determination of extraneousness by

the Presiding Officer of the Senate.

(e) GENERAL POINT OF ORDER.—Notwithstanding any other law

or rule of the Senate, it shall be in order for a Senator to raise a

single point of order that several provisions of a bill, resolution,

amendment, motion, or conference report violate this section. The

Presiding Officer may sustain the point of order as to some or all

of the provisions against which the Senator raised the point of

order. If the Presiding Officer so sustains the point of order as to

some of the provisions (including provisions of an amendment, motion, or conference report) against which the Senator raised the

point of order, then only those provisions (including provisions of

an amendment, motion, or conference report) against which the

Presiding Officer sustains the point of order shall be deemed stricken pursuant to this section. Before the Presiding Officer rules on

such a point of order, any Senator may move to waive such a point

of order as it applies to some or all of the provisions against which

the point of order was raised. Such a motion to waive is amendable

in accordance with the rules and precedents of the Senate. After

the Presiding Officer rules on such a point of order, any Senator

may appeal the ruling of the Presiding Officer on such a point of

order as it applies to some or all of the provisions on which the

Presiding Officer ruled.

(f) DETERMINATION OF LEVELS.—For purposes of this section, the

levels of new budget authority, budget outlays, new entitlement authority, and revenues for a fiscal year shall be determined on the

basis of estimates made by the Committee on the Budget of the

Senate.
257

TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 17A—CONGRESSIONAL BUDGET AND FISCAL

OPERATIONS

Subchapter II—Fiscal Procedures

PART A—GENERAL PROVISIONS

SEC. 651. BILLS PROVIDING NEW SPENDING AUTHORITY.

(a) CONTROLS ON LEGISLATION PROVIDING SPENDING AUTHORITY.—It shall not be order in either the House of Representatives

or the Senate to consider any bill, joint resolution, amendment, motion, or conference report, as reported to its House which provides

new spending authority described in subsection (c)(2)(A) or (B) of

this section, unless that bill, resolution, conference report, or

amendment also provides that such new spending authority as described in subsection (c)(2)(A) or (B) of this section is to be effective

for any fiscal year only to such extent or in such amounts as are

provided in appropriation Acts.

(b) LEGISLATION PROVIDING ENTITLEMENT AUTHORITY.—

(1) It shall not be in order in either the House of Representatives or the Senate to consider any bill, joint resolution,

amendment, motion, or conference report, as reported to its

House which provides new spending authority described in

subsection (c)(2)(C) of this section which is to become effective

before the first day of the fiscal year which begins during the

calendar year in which such bill or resolution is reported.

(2) If any committee of the House of Representatives or the

Senate reports any bill or resolution which provides new

spending authority described in subsection (c)(2)(C) of this section which is to become effective during a fiscal year and the

amount of new budget authority which will be required for

such fiscal year if such bill or resolution is enacted as so reported exceeds the appropriate allocation of new budget authority reported under section 633(b) of this title in connection

with the most recently agreed to concurrent resolution on the

budget for such fiscal year, such bill or resolution shall then

be referred to the Committee on Appropriations of that House

with instructions to report it, with the committee’s recommendations, within 15 calendar days (not counting any day

on which that House is not in session) beginning with the day

following the day on which it is so referred. If the Committee

on Appropriations of either House fails to report a bill or resolution referred to it under this paragraph within such 15-day
Sec. 651 CH. 17A—CONG. BUDGET AND FISCAL OPS. 258

period, the committee shall automatically be discharged from

further consideration of such bill or resolution and such bill or

resolution shall be placed on the appropriate calendar.

(3) The Committee on Appropriations of each House shall

have jurisdiction to report any bill or resolution referred to it

under paragraph (2) with an amendment which limits the total

amount of new spending authority provided in such bill or resolution.

(c) DEFINITIONS.— (1) For purposes of this section, the term ‘‘new spending authority’’ means spending authority not provided by law on the

effective date of this Act, including any increase in or addition

to spending authority provided by law on such date.

(2) For purposes of paragraph (1), the term ‘‘spending authority’’ means authority (whether temporary or permanent)—

(A) to enter into contracts under which the United

States is obligated to make outlays, the budget authority

for which is not provided in advance by appropriation Acts;

(B) to incur indebtedness (other than indebtedness incurred under chapter 31 of Title 31) for the repayment of

which the United States is liable, the budget authority for

which is not provided in advance by appropriation Acts;

(C) to make payments (including loans and grants), the

budget authority for which is not provided for in advance

by appropriation Acts, to any person or government if,

under the provisions of the law containing such authority,

the United States is obligated to make such payments to

persons or governments who meet the requirements established by such law;

(D) to forego the collection by the United States of proprietary offsetting receipts, the budget authority for which

is not provided in advance by appropriation Acts to offset

such foregone receipts; and

(E) to make payments by the United States (including

loans, grants, and payments from revolving funds) other

than those covered by subparagraph (A), (B), (C), or (D),

the budget authority for which is not provided in advance

by appropriation Acts.

Such term does not include authority to insure or guarantee

the repayment of indebtedness incurred by another person or

government.

(d) EXCEPTIONS.—

(1) Subsections (a) and (b) of this section shall not apply to

new spending authority if the budget authority for outlays

which will result from such new spending authority is derived—

(A) from a trust fund established by the Social Security

Act [42 U.S.C.A. Sec. 301 et seq.] (as in effect on July 12,

1974); or

(B) from any other trust fund, 90 percent or more of the

receipts of which consist or will consist of amounts (transferred from the general fund of the Treasury) equivalent to

amounts of taxes (related to the purposes for which such

outlays are or will be made) received in the Treasury
259 Sec. 653 CH. 17A—CONG. BUDGET AND FISCAL OPS.

under specified provisions of the Internal Revenue Code of

1954 [26 U.S.C.A. Sec. 1 et seq.].

(2) Subsections (a) and (b) of this section shall not apply to

new spending authority which is an amendment to or extension of chapter 67 of Title 31, or a continuation of the program

of fiscal assistance to State and local governments provided by

that chapter, to the extent so provided in the bill or resolution

providing such authority.

(3) Subsections (a) and (b) of this section shall not apply to

new spending authority to the extent that—

(A) the outlays resulting therefrom are made by an organization which is (i) a mixed-ownership Government corporation (as defined in section 9101(2) of Title 31) or (ii)

a wholly owned Government corporation (as defined in section 9101(3) of Title 31) which is specifically exempted by

law from compliance with any or all of the provisions of

chapter 91 of Title 31, as of December 12, 1985; or

(B) the outlays resulting therefrom consist exclusively of

the proceeds of gifts or bequests made to the United States

for a specific purpose.

SEC. 652. LEGISLATION PROVIDING NEW CREDIT AUTHORITY.

(a) CONTROLS ON LEGISLATION PROVIDING NEW CREDIT AUTHORITY.—It shall not be in order in either the House of Representatives

or the Senate to consider any bill, joint resolution, amendment, motion, or conference report as reported to its House, which provides

new credit authority described in subsection (b)(1) of this section,

unless that bill, resolution, conference report, or amendment also

provides that such new credit authority is to be effective for any

fiscal year only to such extent or in such amounts as are provided

in appropriation Acts.

(b) DEFINITION.—For purposes of this Act, the term ‘‘new credit

authority’’ means credit authority (as defined in section 622(10) of

this title) not provided by law on the effective date of this section,

including any increase in or addition to credit authority provided

by law on such date.

SEC. 653. ANALYSIS BY CONGRESSIONAL BUDGET OFFICE.

The Director of the Congressional Budget Office shall, to the extent practicable, prepare for each bill or resolution of a public character reported by any committee of the House of Representatives

or the Senate (except the Committee on Appropriations of each

House), and submit to such committee—

(1) an estimate of the costs which would be incurred in carrying out such bill or resolution in the fiscal year in which it

is to become effective and in each of the 4 fiscal years following

such fiscal year, together with the basis for each such estimate;

(2) a comparison of the estimates of costs described in paragraph (1) and (2) with any available estimates of costs made

by such committee or by any Federal agency; and

(3) a description of each method for establishing a Federal financial commitment contained in such bill or resolution.

The estimates, comparison, and description so submitted shall be

included in the report accompanying such bill or resolution if timely submitted to such committee before such report is filed.
Sec. 654 CH. 17A—CONG. BUDGET AND FISCAL OPS. 260

SEC. 654. STUDY BY GENERAL ACCOUNTING OFFICE OF FORMS OF

FEDERAL FINANCIAL COMMITMENT NOT REVIEWED ANNUALLY BY CONGRESS.

The General Accounting Office shall study those provisions of

law which provide spending authority as described by section

651(c)(2) of this title and which provide permanent appropriations,

and report to the Congress its recommendations for the appropriate

form of financing for activities or programs financed by such provisions not later than eighteen months after December 12, 1985.

Such report shall be revised from time to time.

SEC. 655. OFF-BUDGET AGENCIES, PROGRAMS, AND ACTIVITIES.

(a) Notwithstanding any other provision of law, budget authority,

credit authority, and estimates of outlays and receipts for activities

of the Federal budget which are off-budget immediately prior to

December 12, 1985, not including activities of the Federal Old-Age

and Survivors Insurance and Federal Disability Insurance Trust

Funds, shall be included in a budget submitted pursuant to section

1105 of Title 31, and in a concurrent resolution on the budget reported pursuant to section 632 or 635 of this title and shall be considered, for purposes of this Act, budget authority, outlays, and

spending authority in accordance with definitions set forth in this

Act.

(b) All receipts and disbursements of the Federal Financing Bank

with respect to any obligations which are issued, sold, or guaranteed by a Federal agency shall be treated as a means of financing

such agency for purposes of section 1105 of Title 31 and for purposes of this Act.

SEC. 656. MEMBER USER GROUP.

The Speaker of the House of Representatives, after consulting

with the Minority Leader of the House, may appoint a Member

User Group for the purpose of reviewing budgetary scorekeeping

rules and practices of the House and advising the Speaker from

time to time on the effect and impact of such rules and practices.
261

TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 17A—CONGRESSIONAL BUDGET AND FISCAL

OPERATIONS

Subchapter III—Credit Reform

SEC. 661. PURPOSES.

The purposes of this subchapter are to—

(1) measure more accurately the costs of Federal credit programs;

(2) place the cost of credit programs on a budgetary basis

equivalent to other Federal spending;

(3) encourage the delivery of benefits in the form most appropriate to the needs of beneficiaries; and

(4) improve the allocation of resources among credit programs and between credit and other spending programs.

SEC. 661A. DEFINITIONS.

For purposes of this subchapter—

(1) The term ‘‘direct loan’’ means a disbursement of funds by

the Government to a non-Federal borrower under a contract

that requires the repayment of such funds with or without interest. The term includes the purchase of, or participation in,

a loan made by another lender. The term does not include the

acquisition of a federally guaranteed loan in satisfaction of default claims or the price support loans of the Commodity Credit

Corporation.

(2) The term ‘‘direct loan obligation’’ means a binding agreement by a Federal agency to make a direct loan when specified

conditions are fulfilled by the borrower.

(3) The term ‘‘loan guarantee’’ means any guarantee, insurance, or other pledge with respect to the payment of all or a

part of the principal or interest on any debt obligation of a

non-Federal borrower to a non-Federal lender, but does not include the insurance of deposits, shares, or other withdrawable

accounts in financial institutions.

(4) The term ‘‘loan guarantee commitment’’ means a binding

agreement by a Federal agency to make a loan guarantee when

specified conditions are fulfilled by the borrower, the lender, or

any other party to the guarantee agreement.

(5)(A) The term ‘‘cost’’ means the estimated long-term cost to

the Government of a direct loan or loan guarantee, calculated

on a net present value basis, excluding administrative costs

and any incidental effects on governmental receipts or outlays.
Sec. 661B CH. 17A—CONG. BUDGET AND FISCAL OPS. 262

(B) The cost of a direct loan shall be the net present value,

at the time when the direct loan is disbursed, of the following

cash flows:

(i) loan disbursements;

(ii) repayments of principal; and

(iii) payments of interest and other payments by or to

the Government over the life of the loan after adjusting for

estimated defaults, prepayments, fees, penalties and other

recoveries.

(C) The cost of a loan guarantee shall be the net present

value when a guaranteed loan is disbursed of the cash flow

from—

(i) estimated payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments, and

(ii) the estimated payments to the Government including

origination and other fees, penalties and recoveries.

(D) Any Government action that alters the estimated net

present value of an outstanding direct loan or loan guarantee

(except modifications within the terms of existing contracts or

through other existing authorities) shall be counted as a

change in the cost of that direct loan or loan guarantee. The

calculation of such changes shall be based on the estimated

present value of the direct loan or loan guarantee at the time

of modification.

(E) In estimating net present values, the discount rate shall

be the average interest rate on marketable Treasury securities

of similar maturity to the direct loan or loan guarantee for

which the estimate is being made.

(6) The term ‘‘credit program account’’ means the budget account into which an appropriation to cover the cost of a direct

loan or loan guarantee program is made and from which such

cost is disbursed to the financing account.

(7) The term ‘‘financing account’’ means the non-budget account or accounts associated with each credit program account

which holds balances, receives the cost payment from the credit program account, and also includes all other cash flows to

and from the Government resulting from direct loan obligations or loan guarantee commitments made on or after October

1, 1991.

(8) The term ‘‘liquidating account’’ means the budget account

that includes all cash flows to and from the Government resulting from direct loan obligations or loan guarantee commitments made prior to October 1, 1991.

These accounts shall be shown in the budget on a cash basis.

(9) The term ‘‘Director’’ means the Director of the Office of

Management and Budget.

SEC. 661B. OMB AND CBO ANALYSIS, COORDINATION, AND REVIEW.

(a) IN GENERAL.—For the executive branch, the Director shall be

responsible for coordinating the estimates required by this title.

The Director shall consult with the agencies that administer direct

loan or loan guarantee programs.
263 Sec. 661c CH. 17A—CONG. BUDGET AND FISCAL OPS.

(b) DELEGATION.—The Director may delegate to agencies authority to make estimates of costs. The delegation of authority shall be

based upon written guidelines, regulations, or criteria consistent

with the definitions in this title.

(c) COORDINATION WITH THE CONGRESSIONAL BUDGET OFFICE.—

In developing estimation guidelines, regulations, or criteria to be

used by Federal agencies, the Director shall consult with the Director of the Congressional Budget Office.

(d) IMPROVING COST ESTIMATES.—The Director and the Director

of the Congressional Budget Office shall coordinate the development of more accurate data on historical performance of direct loan

and loan guarantee programs. They shall annually review the performance of outstanding direct loans and loan guarantees to improve estimates of costs. The Office of Management and Budget

and the Congressional Budget Office shall have access to all agency

data that may facilitate the development and improvement of estimates of costs.

(e) HISTORICAL CREDIT PROGRAM COSTS.—The Director shall review, to the extent possible, historical data and develop the best

possible estimates of adjustments that would convert aggregate historical budget data to credit reform accounting.

(f) ADMINISTRATIVE COSTS.—The Director and the Director of the

Congressional Budget Office shall each analyze and report to Congress on differences in long-term administrative costs for credit

programs versus grant programs by January 31, 1992. Their reports shall recommend to Congress any changes, if necessary, in

the treatment of administrative costs under credit reform accounting.

SEC. 661C. BUDGETARY TREATMENT.

(a) PRESIDENT’S BUDGET.—Beginning with fiscal year 1992, the

President’s budget shall reflect the costs of direct loan and loan

guarantee programs. The budget shall also include the planned

level of new direct loan obligations or loan guarantee commitments

associated with each appropriations request.

(b) APPROPRIATIONS REQUIRED.—Notwithstanding any other provision of law, new direct loan obligations may be incurred and new

loan guarantee commitments may be made for fiscal year 1992 and

thereafter only to the extent that—

(1) appropriations of budget authority to cover their costs are

made in advance;

(2) a limitation on the use of funds otherwise available for

the cost of a direct loan or loan guarantee program is enacted;

or

(3) authority is otherwise provided in appropriation Acts.

(c) EXEMPTION FOR MANDATORY PROGRAMS.—Subsection (b) of

this section shall not apply to a direct loan or loan guarantee program that—

(1) constitutes an entitlement (such as the guaranteed student loan program or the veterans’ home loan guaranty program); or

(2) all existing credit programs of the Commodity Credit Corporation on November 5, 1990.

(d) BUDGET ACCOUNTING.—
Sec. 661d CH. 17A—CONG. BUDGET AND FISCAL OPS. 264

(1) The authority to incur new direct loan obligations, make

new loan guarantee commitments, or directly or indirectly

alter the costs of outstanding direct loans and loan guarantees

shall constitute new budget authority in an amount equal to

the cost of the direct loan or loan guarantee in the fiscal year

in which definite authority becomes available or indefinite authority is used. Such budget authority shall constitute an obligation of the credit program account to pay to the financing account.

(2) The outlays resulting from new budget authority for the

cost of direct loans or loan guarantees described in paragraph

(1) shall be paid from the credit program account into the financing account and recorded in the fiscal year in which the

direct loan or the guaranteed loan is disbursed or its costs altered.

(3) All collections and payments of the financing accounts

shall be a means of financing.

(e) MODIFICATIONS.—A direct loan obligation or loan guarantee

commitment shall not be modified in a manner that increases its

cost unless budget authority for the additional cost is appropriated,

or is available out of existing appropriations or from other budgetary resources.

(f) REESTIMATES.—When the estimated cost for a group of direct

loans or loan guarantees for a given credit program made in a single fiscal year is reestimated in a subsequent year, the difference

between the reestimated cost and the previous cost estimate shall

be displayed as a distinct and separately identified subaccount in

the credit program account as a change in program costs and a

change in net interest. There is hereby provided permanent indefinite authority for these reestimates.

(g) ADMINISTRATIVE EXPENSES.—All funding for an agency’s administration of a direct loan or loan guarantee program shall be

displayed as distinct and separately identified subaccounts within

the same budget account as the program’s cost.

SEC. 661D. AUTHORIZATIONS.

(a) AUTHORIZATION OF APPROPRIATIONS FOR COSTS.—There are

authorized to be appropriated to each Federal agency authorized to

make direct loan obligations or loan guarantee commitments, such

sums as may be necessary to pay the cost associated with such direct loan obligations or loan guarantee commitments.

(b) AUTHORIZATION FOR FINANCING ACCOUNTS.—In order to implement the accounting required by this subchapter, the President

is authorized to establish such non-budgetary accounts as may be

appropriate.

(c) TREASURY TRANSACTIONS WITH THE FINANCING ACCOUNTS.—

The Secretary of the Treasury shall borrow from, receive from, lend

to, or pay to the financing accounts such amounts as may be appropriate. The Secretary of the Treasury may prescribe forms and denominations, maturities, and terms and conditions for the transactions described above. The authorities described above shall not

be construed to supercede or override the authority of the head of

a Federal agency to administer and operate a direct loan or loan

guarantee program. All of the transactions provided in this sub-
265 Sec. 661f CH. 17A—CONG. BUDGET AND FISCAL OPS.

section shall be subject to the provisions of subchapter II of chapter

15 of Title 31. Cash balances of the financing accounts in excess

of current requirements shall be maintained in a form of

uninvested funds and the Secretary of the Treasury shall pay interest on these funds.

(d) AUTHORIZATION FOR LIQUIDATING ACCOUNTS.—If funds in liquidating accounts are insufficient to satisfy the obligations and

commitments of said accounts, there is hereby provided permanent,

indefinite authority to make any payments required to be made on

such obligations and commitments.

(e) AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION EXPENSES.—There are authorized to be appropriated to existing accounts such sums as may be necessary for salaries and expenses

to carry out the responsibilities under this subchapter.

(f) REINSURANCE.—Nothing in this subchapter shall be construed

as authorizing or requiring the purchase of insurance or reinsurance on a direct loan or loan guarantee from private insurers. If

any such reinsurance for a direct loan or loan guarantee is authorized, the cost of such insurance and any recoveries to the Government shall be included in the calculation of the cost.

(g) ELIGIBILITY AND ASSISTANCE.—Nothing in this subchapter

shall be construed to change the authority or the responsibility of

a Federal agency to determine the terms and conditions of eligibility for, or the amount of assistance provided by a direct loan or

a loan guarantee.

SEC. 661E. TREATMENT OF DEPOSIT INSURANCE AND AGENCIES AND

OTHER INSURANCE PROGRAMS.

(a) IN GENERAL.—

(1) This subchapter shall not apply to the credit or insurance

activities of the Federal Deposit Insurance Corporation, National Credit Union Administration, Resolution Trust Corporation, Pension Benefit Guaranty Corporation, National Flood Insurance, National Insurance Development Fund, Crop Insurance, or Tennessee Valley Authority.

(2) The Director and the Director of the Congressional Budget Office shall each study whether the accounting for Federal

deposit insurance programs should be on a cash basis on the

same basis as loan guarantees, or on a different basis. Each

Director shall report findings and recommendations to the

President and the Congress on or before May 31, 1991.

(3) For the purposes of paragraph (2), the Office of Management and Budget and the Congressional Budget Office shall

have access to all agency data that may facilitate these studies.

SEC. 661F. EFFECT ON OTHER LAWS.

(a) EFFECT ON OTHER LAWS.—This subchapter shall supersede,

modify, or repeal any provision of law enacted prior to November

5, 1990, to the extent such provision is inconsistent with this subchapter. Nothing in this subchapter shall be construed to establish

a credit limitation on any Federal loan or loan guarantee program.

(b) CREDITING OF COLLECTIONS.—Collections resulting from direct loans obligated or loan guarantees committed prior to October

1, 1991, shall be credited to the liquidating accounts of Federal

agencies. Amounts so credited shall be available, to the same ex-
Sec. 661f CH. 17A—CONG. BUDGET AND FISCAL OPS. 266

tent that they were available prior to November 5, 1988, to liquidate obligations arising from such direct loans obligated or loan

guarantees committed prior to October 1, 1991, including repayment of any obligations held by the Secretary of the Treasury or

the Federal Financing Bank. The unobligated balances of such accounts that are in excess of current needs shall be transferred to

the general fund of the Treasury. Such transfers shall be made

from time to time but, at least once each year.
267

TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 17A—CONGRESSIONAL BUDGET AND FISCAL

OPERATIONS

Subchapter IV—Budget Agreement Enforcement Provisions

SEC. 665. DEFINITIONS AND POINT OF ORDER

(a) DEFINITIONS.—As used in this subchapter and for purposes of

the Balanced Budget and Emergency Deficit Control Act of 1985:

(1) MAXIMUM DEFICIT AMOUNT.—The term ‘‘maximum deficit

amount’’ means—

(A) with respect to fiscal year 1991, $327,000,000,000;

(B) with respect to fiscal year 1992, $317,000,000,000;

(C) with respect to fiscal year 1993, $236,000,000,000;

(D) with respect to fiscal year 1994, $102,000,000,000;

and

(E) with respect to fiscal year 1995, $83,000,000,000;

as adjusted in strict conformance with sections 251, 252, and

253 of the Balanced Budget and Emergency Deficit Control Act

of 1985 [2 U.S.C.A. Secs. 901, 902, and 903].

(2) DISCRETIONARY SPENDING LIMIT.—The term ‘‘discretionary spending limit’’ means—

(A) with respect to fiscal year 1991—

(i) for the defense category: $288,918,000,000 in new

budget authority and $297,660,000,000 in outlays;

(ii) for the international category: $20,100,000,000 in

new budget authority and $18,600,000,000 in outlays;

and

(iii) for the domestic category: $182,700,000,000 in

new budget authority and $198,100,000,000 in outlays;

(B) with respect to fiscal year 1992—

(i) for the defense category: $291,643,000,000 in new

budget authority and $295,744,000,000 in outlays;

(ii) for the international category: $20,500,000,000 in

new budget authority and $19,100,000,000 in outlays;

and

(iii) for the domestic category: $191,300,000,000 in

new budget authority and $210,100,000,000 in outlays;

(C) with respect to fiscal year 1993—

(i) for the defense category: $291,785,000,000 in new

budget authority and $292,686,000,000 in outlays;

(ii) for the international category: $21,400,000,000 in

new budget authority and $19,600,000,000 in outlays;

and
Sec. 665A CH. 17A—CONG. BUDGET AND FISCAL OPS. 268

(iii) for the domestic category: $198,300,000,000 in

new budget authority and $221,700,000,000 in outlays;

(D) with respect to fiscal year 1994, for the discretionary

category: $510,800,000,000 in new budget authority and

$534,800,000,000 in outlays;

(E) with respect to fiscal year 1995, for the discretionary

category: $517,700,000,000 in new budget authority and

$540,800,000,000 in outlays;

(F) with respect to fiscal years 1996, 1997, and 1998, for

the discretionary category, the amounts set forth for those

years in section 12(b)(1) of House Concurrent Resolution

64 (One Hundred Third Congress);

as adjusted in strict conformance with section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 [2

U.S.C.A. Sec. 901].

(b) Point of order in the Senate on aggregate allocations for defense, international, and domestic discretionary spending—

(1) Except as otherwise provided in this subsection, it shall

not be in order in the Senate to consider any concurrent resolution on the budget for fiscal year 1995, 1996, 1997, or 1998 (or

amendment, motion, or conference report on such a resolution)

that would exceed any of the discretionary spending limits in

this section.

(3) For purposes of this subsection, the levels of new budget

authority and outlays for a fiscal year shall be determined on

the basis of estimates made by the Committee on the Budget

of the Senate.

(4) This subsection shall not apply if a declaration of war by

the Congress is in effect or if a joint resolution pursuant to section 258 of the Balanced Budget and Emergency Deficit Control Act of 1985 has been enacted.

NOTE

Downward Adjustments in Discretionary Spending Limits

Pub. L. 104–19, Title II, Sec. 2003, July 27, 1995, 109 Stat. 247,

provided that: ‘‘Upon the enactment of this Act [probably means

date of enactment of Pub. L. 104–19, which was approved July 27,

1995], the Director of the Office of Management and Budget shall

make downward adjustments in the discretionary spending limits

(new budget authority and outlays) specified in section 601(a)(2) of

the Congressional Budget Act of 1974 [subsec. (a)(2) of this section]

for each of the fiscal years 1995 through 1998 by the programs resulting from the provisions of this Act [Pub. L. 104–19, July 27,

1995, 109 Stat. 194, for classifications of which see Tables] (other

than emergency appropriations) for such fiscal year, as calculated

by the Director.’’

SEC. 665A. COMMITTEE ALLOCATIONS AND ENFORCEMENT.

(a) COMMITTEE SPENDING ALLOCATIONS.—

(1) HOUSE OF REPRESENTATIVES.—

(A) ALLOCATION AMONG COMMITTEES.—The joint explanatory statement accompanying a conference report on a

budget resolution shall include allocations, consistent with
269 Sec. 665A CH. 17A—CONG. BUDGET AND FISCAL OPS.

the resolution recommended in the conference report, of

the appropriate levels (for each fiscal year covered by that

resolution and a total for all such years) of—

(i) total new budget authority,

(ii) total entitlement authority,

(iii) total outlays,

(iv) new budget authority from the Violent Crime

Reduction Trust Fund, and

(v) outlays from the Violent Crime Reduction Trust

Fund;

among each committee of the House of Representatives

that has jurisdiction over legislation providing or creating

such amounts.

(B) NO DOUBLE COUNTING.—Any item allocated to one

committee of the House of Representatives may not be allocated to another such committee.

(C) FURTHER DIVISION OF AMOUNTS.—The amounts allocated to each committee for each fiscal year, other than

the Committee on Appropriations, shall be further divided

between amounts provided or required by law on the date

of filing of that conference report and amounts not so provided or required. The amounts allocated to the Committee

on Appropriations for each fiscal year shall be further divided between discretionary and mandatory amounts or

programs, as appropriate.

(2) SENATE ALLOCATION AMONG COMMITTEES.—The joint explanatory statement accompanying a conference report on a

budget resolution shall include an allocation, consistent with

the resolution recommended in the conference report, of the appropriate levels of—

(A) total new budget authority;

(B) total outlays;

(C) social security outlays;

(D) new budget authority from the Violent Crime Reduction Trust Fund; and

(E) outlays from the Violent Crime Reduction Trust

Fund;

among each committee of the Senate that has jurisdiction over

legislation providing or creating such amounts.

(3) AMOUNTS NOT ALLOCATED.—

(A) In the House of Representatives, if a committee receives no allocation of new budget authority, entitlement

authority, or outlays, that committee shall be deemed to

have received an allocation equal to zero for new budget

authority, entitlement authority, or outlays.

(B) In the Senate, if a committee receives no allocation

of new budget authority, outlays, or social security outlays,

that committee shall be deemed to have received an allocation equal to zero for new budget authority, outlays, or social security outlays.

(4) NO DOUBLE COUNTING.—Amounts allocated among committees under clause (iv) or (v) of paragraph (1)(A) or under

subparagraph (D) or (E) of paragraph (2) shall not be included

within any other allocation under that paragraph.
Sec. 665A CH. 17A—CONG. BUDGET AND FISCAL OPS. 270

(b) SUBALLOCATIONS BY COMMITTEES.— (1) SUBALLOCATIONS BY APPROPRIATIONS COMMITTEES.—As

soon as practicable after a budget resolution is agreed to, the

Committee on Appropriations of each House (after consulting

with the Committee on Appropriations of the other House)

shall suballocate each amount allocated to it for the budget

year under subsection (a)(1)(A) or (a)(2) of this section among

its subcommittees. Each Committee on Appropriations shall

promptly report to its House suballocations made or revised

under this paragraph.

(2) SUBALLOCATIONS BY OTHER COMMITTEES OF THE SEN- ATE.—Each other committee of the Senate to which an allocation under subsection (a)(2) of this section is made in the joint

explanatory statement may subdivide each amount allocated to

it under subsection (a) of this section among its subcommittees

or among programs over which it has jurisdiction and shall

promptly report any such suballocations to the Senate. Section

633(c) of this title shall not apply in the Senate to committees

other than the Committee on Appropriations.

(c) APPLICATION OF SECTION 633(f) OF THIS TITLE TO THIS SEC- TION.—In fiscal years through 1995, reference in section 633(f) of

this title to the appropriate allocation made pursuant to section

633(b) of this title for a fiscal year shall, for purposes of this section, be deemed to be a reference to any allocation made under subsection (a) or any suballocation made under subsection (b) of this

section, as applicable, for the fiscal year of the resolution or for the

total of all fiscal years made by the joint explanatory statement accompanying the applicable concurrent resolution on the budget. In

the House of Representatives, the preceding sentence shall not

apply with respect to fiscal year 1991.

(d) APPLICATION OF SUBSECTIONS (A) AND (B) OF THIS SECTION TO

FISCAL YEARS 1992 TO 1995.—In the case of concurrent resolutions

on the budget for fiscal years 1992 through 1995, allocations shall

be made under subsection (a) of this section instead of section

633(a) of this title and shall be made under subsection (b) of this

section instead of section 633(b) of this title. For those fiscal years,

all references in sections 633(c), (d), (e), (f), and (g) of this title to

section 633(a) of this title shall be deemed to be to subsection (a)

of this section (including revisions made under section 665c of this

title) and all such references to section 633(b) of this title shall be

deemed to be to subsection (b) of this section (including revisions

made under section 665c of this title).

(e) PAY-AS-YOU-GO EXCEPTION IN THE HOUSE.—Section 663(f)(1)

of this title and, after April 15 of any calendar year section 633(a)

of this title, shall not apply to any bill, joint resolution, amendment

thereto, or conference report thereon if, for each fiscal year covered

by the most recently agreed to concurrent resolution on the

budget—

(1) the enactment of such bill or resolution as reported;

(2) the adoption and enactment of such amendment; or

(3) the enactment of such bill or resolution in the form recommended in such conference report,

would not increase the deficit for any such fiscal year, and, if the

sum of any revenue increases provided in legislation already en-
271 Sec. 665C CH. 17A—CONG. BUDGET AND FISCAL OPS.

acted during the current session (when added to revenue increases,

if any, in excess of any outlay increase provided by the legislation

proposed for consideration) is at least as great as the sum of the

amount, if any, by which the aggregate level of Federal revenues

should be increased as set forth in that concurrent resolution and

the amount, if any, by which revenues are to be increased pursuant

to pay-as-you-go procedures under section 632(b)(8) of this title if

included in that concurrent resolution.

(2) REVISED ALLOCATIONS.—

(A) As soon as practicable after Congress agrees to a bill

or joint resolution that would have been subject to a point

of order under section 633(f)(1) of this title but for the exception provided in paragraph (1), the chairman of the

Committee on the Budget of the House of Representatives

may file with the House appropriately revised allocations

under section 633(a) of this title and revised functional levels and budget aggregates to reflect that bill.

(B) such revised allocations, functional levels, and budget aggregates shall be considered for the purposes of this

Act as allocations, functional levels, and budget aggregates

contained in the most recently agreed to concurrent resolution on the budget.

SEC. 665B. CONSIDERATION OF LEGISLATION BEFORE ADOPTION OF

BUDGET RESOLUTION FOR THAT FISCAL YEAR.

(a) ADJUSTING SECTION ALLOCATION OF DISCRETIONARY SPENDING.—If a concurrent resolution on the budget is not adopted by

April 15, the chairman of the Committee on the Budget of the

House of Representatives shall submit to the House, as soon as

practicable, a section 665a(a) allocation to the Committee on Appropriations consistent with the discretionary spending limits contained in the most recent budget submitted by the President under

section 1105(a) of Title 31. Such allocations shall include the full

allowance specified under section 901(b)(2)(E)(i) of this title.

(b) As soon as practicable after a section 665a(a) allocation is

submitted under this section, the Committee on Appropriations

shall make suballocations and promptly report those suballocations

to the House of Representatives.

SEC. 665C. RECONCILIATION DIRECTIVES REGARDING PAY-AS-YOU-GO

REQUIREMENTS.

(a) INSTRUCTIONS TO EFFECTUATE PAY-AS-YOU-GO IN THE HOUSE

OF REPRESENTATIVES.—If legislation providing for a net reduction

in revenues in any fiscal year (that, within the same measure, is

not fully offset in that fiscal year by reductions in direct spending)

is enacted, the Committee on the Budget of the House of Representatives may report, within 15 legislative days during a Congress, a pay-as-you-go reconciliation directive in the form of a concurrent resolution—

(1) specifying the total amount by which revenues sufficient

to eliminate the net deficit increase resulting from that legislation in each fiscal year are to be changed; and

(2) directing that the committees having jurisdiction determine and recommend changes in the revenue law, bills, and

resolutions to accomplish a change of such total amount.
Sec. 665D CH. 17A—CONG. BUDGET AND FISCAL OPS. 272

(b) CONSIDERATION OF PAY-AS-YOU-GO RECONCILIATION LEGISLA- TION IN THE HOUSE OF REPRESENTATIVES.—In the House of Representatives, subsections (b) through (d) of section 641 of this title

shall apply in the same manner as if the reconciliation directive described in subsection (a) of this section were a concurrent resolution on the budget.

SEC. 665D. APPLICATION OF SECTION 642 OF THIS TITLE; POINT OF

ORDER.

(a) APPLICATION OF SECTION 642(a) OF THIS TITLE.— (1) In the House of Representatives, in the application of section 642(a)(1) of this title to any bill, resolution, amendment,

or conference report, reference in section 642 of this title to the

appropriate level of total budget authority or total budget outlays or appropriate level of total revenues set forth in the most

recently agreed to concurrent resolution on the budget for a fiscal year shall be deemed to be a reference to the appropriate

level for that fiscal year and to the total of the appropriate

level for that year and the 4 succeeding years.

(2) In the Senate, in the application of section 642(a)(2) of

this title to any bill, resolution, motion, or conference report,

reference in section 642 of this title to the appropriate level of

total revenues set forth in the most recently agreed to concurrent resolution on the budget for a fiscal year shall be deemed

to be a reference to the appropriate level for that fiscal year

and to the total of the appropriate levels for that year and the

4 succeeding years.

(b) MAXIMUM DEFICIT AMOUNT POINT OF ORDER IN THE SEN- ATE.—After Congress has completed action on a concurrent resolution on the budget, it shall not be in order in the Senate to consider

any bill, resolution, amendment, motion, or conference report that

would result in a deficit for the first fiscal year covered by that resolution that exceeds the maximum deficit amount specified for such

fiscal year in section 655(a) of this title.

SEC. 665E. 5-YEAR BUDGET RESOLUTIONS; BUDGET RESOLUTIONS

MUST CONFORM TO BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985.

(a) 5-YEAR BUDGET RESOLUTIONS.—In the case of any concurrent

resolution on the budget for fiscal year 1992, 1993, 1994, or 1995,

that resolution shall set forth appropriate levels for the fiscal year

beginning on October 1 of the calendar year in which it is reported

and for each of the 4 succeeding fiscal years for the matters described in section 632(a) of this title.

(b) POINT OF ORDER IN THE HOUSE OF REPRESENTATIVES.—It

shall not be in order in the House of Representatives to consider

any concurrent resolution on the budget for a fiscal year or conference report thereon under section 632 or 635 of this title that

exceeds the maximum deficit amount for each fiscal year covered

by the concurrent resolution or conference report as determined

under section 665(a) of this title, including possible revisions under

part C of the Balanced Budget and Emergency Deficit Control Act

of 1985 [2 U.S.C.A. Sec. 900 et seq.].

(c) POINT OF ORDER IN THE SENATE.—It shall not be in order in

the Senate to consider any concurrent resolution on the budget for

a fiscal year under section 632 of this title, or to consider any
273 Sec. 682 CH. 17B—IMPOUNDMENT CONTROL

amendment to such a concurrent resolution, or to consider a conference report on such a concurrent resolution, if the level of total

budget outlays for the first fiscal year that is set forth in such concurrent resolution or conference report exceeds the recommended

level of Federal revenues set forth for that year by an amount that

is greater than the maximum deficit amount for such fiscal year as

determined under section 665(a) of this title or if the adoption of

such amendment would result in a level of total budget outlays for

that fiscal year which exceeds the recommended level of Federal

revenues for that fiscal year, by an amount that is greater than the

maximum deficit amount for such fiscal years as determined under

section 665(a) of this title.

(d) ADJUSTMENTS.— (1) Notwithstanding any other provision of law, concurrent

resolutions on the budget for fiscal years 1992, 1993, 1994, and

1995 under section 632 or 635 of this title may set forth levels

consistent with allocations increased by—

(A) amounts not to exceed the budget authority amounts

in section 251(b)(2)(E) (i) and (ii) of the Balanced Budget

and Emergency Deficit Control Act of 1985 [2 U.S.C.A. Sec.

901(b)(2)(E) (i) and (ii)] and the composite outlays per category consistent with them; and

(B) the budget authority and outlay amounts in section

251(b)(1) of that Act [2 U.S.C.A. Sec. 901(b)(1)].

(2) For purposes of congressional consideration of provisions

described in sections 251(b)(2)(A), 251(b)(2)(B), 251(b)(2)(C),

251(b)(2)(D), and 252(e), determinations under sections 633,

634, and 642 of this title shall not take into account any new

budget authority, new entitlement authority, outlays, receipts,

or deficit effects in any fiscal year of those provisions.

TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 17B—IMPOUNDMENT CONTROL

SEC. 681. DISCLAIMER.

Nothing contained in this Act, or in any amendments made by

this Act, shall be construed as—

(1) asserting or conceding the constitutional powers or limitations of either the Congress or the President;

(2) ratifying or approving any impoundment heretofore or

hereafter executed or approved by the President or any other

Federal officer or employee, except insofar as pursuant to statutory authorization then in effect;

(3) affecting in any way the claims or defenses of any party

to litigation concerning any impoundment; or

(4) superseding any provision of law which requires the obligation of budget authority or the making of outlays thereunder.

SEC. 682. DEFINITIONS.

For purposes of sections 682 to 688 of this title—

(1) ‘‘deferral of budget authority’’ includes—
Sec. 683 CH. 17B—IMPOUNDMENT CONTROL 274

(A) withholding or delaying the obligation or expenditure

of budget authority (whether by establishing reserves or

otherwise) provided for projects or activities; or

(B) any other type of Executive action or inaction which

effectively precludes the obligation or expenditure of budget authority, including authority to obligate by contract in

advance of appropriations as specifically authorized by

law;

(2) ‘‘Comptroller General’’ means the Comptroller General of

the United States;

(3) ‘‘rescission bill’’ means a bill or joint resolution which

only rescinds, in whole or in part, budget authority proposed

to be rescinded in a special message transmitted by the President under section 683 of this title, and upon which the Congress completes action before the end of the first period of 45

calendar days of continuous session of the Congress after the

date on which the President’s message is received by the Congress;

(4) ‘‘impoundment resolution’’ means a resolution of the

House of Representatives or the Senate which only expresses

its disapproval of a proposed deferral of budget authority set

forth in a special message transmitted by the President under

section 684 of this title; and

(5) continuity of a session of the Congress shall be considered

as broken only by an adjournment of the Congress sine die,

and the days on which either House is not in session because

of an adjournment of more than 3 days to a day certain shall

be excluded in the computation of the 45-day period referred

to in paragraph (3) of this section and in section 683 of this

title, and the 25-day periods referred to in sections 687 and

688(b) (1) of this title. If a special message is transmitted

under section 683 of this title during any Congress and the last

session of such Congress adjourns sine die before the expiration of 45 calendar days of continuous session (or a special

message is so transmitted after the last session of the Congress

adjourns sine die), the message shall be deemed to have been

retransmitted on the first day of the succeeding Congress and

the 45-day period referred to in paragraph (3) of this section

and in section 683 of this title (with respect to such message)

shall commence on the day after such first day.

SEC. 683. RESCISSION OF BUDGET AUTHORITY.

(a) TRANSMITTAL OF SPECIAL MESSAGE.—Whenever the President

determines that all or part of any budget authority will not be required to carry out the full objectives or scope of programs for

which it is provided or that such budget authority should be rescinded for fiscal policy or other reasons (including the termination

of authorized projects or activities for which budget authority has

been provided), or whenever all or part of budget authority provided for only one fiscal year is to be reserved from obligation for

such fiscal year, the President shall transmit to both Houses of

Congress a special message specifying—

(1) the amount of budget authority which he proposes to be

rescinded or which is to be so reserved;
275 Sec. 684 CH. 17B—IMPOUNDMENT CONTROL

(2) any account, department, or establishment of the Government to which such budget authority is available for obligation,

and the specific project or governmental functions involved;

(3) the reasons why the budget authority should be rescinded

or is to be so reserved;

(4) to the maximum extent practicable, the estimated fiscal,

economic, and budgetary effect of the proposed rescission or of

the reservation; and

(5) all facts, circumstances, and considerations relating to or

bearing upon the proposed rescission or the reservation and

the decision to effect the proposed rescission or the reservation,

and to the maximum extent practicable, the estimated effect of

the proposed rescission or the reservation upon the objects,

purposes, and programs for which the budget authority is provided.

(b) REQUIREMENT TO MAKE AVAILABLE FOR OBLIGATION.—Any

amount of budget authority proposed to be rescinded or that is to

be reserved as set forth in such special message shall be made

available for obligation unless, within the prescribed 45-day period,

the Congress has completed action on a rescission bill rescinding

all or part of the amount proposed to be rescinded or that is to be

reserved. Funds made available for obligation under this procedure

may not be proposed for rescission again.

SEC. 684. PROPOSED DEFERRALS OF BUDGET AUTHORITY.

(a) TRANSMITTAL OF SPECIAL MESSAGE.—Whenever the President, the Director of the Office of Management and Budget, the

head of any department or agency of the United States, or any officer or employee of the United States proposes to defer any budget

authority provided for a specific purpose or project, the President

shall transmit to the House of Representatives and the Senate a

special message specifying—

(1) the amount of the budget authority proposed to be deferred;

(2) any account, department, or establishment of the Government to which such budget authority is available for obligation,

and the specific projects or governmental functions involved;

(3) the period of time during which the budget authority is

proposed to be deferred;

(4) the reasons for the proposed deferral, including any legal

authority invoked to justify the proposed deferral;

(5) to the maximum extent practicable, the estimated fiscal,

economic, and budgetary effect of the proposed deferral; and

(6) all facts, circumstances, and considerations relating to or

bearing upon the proposed deferral and the decision to effect

the proposed deferral, including an analysis of such facts, circumstances, and considerations in terms of their application to

any legal authority, including specific elements of legal authority, invoked to justify such proposed deferral, and to the maximum extent practicable, the estimated effect of the proposed

deferral upon the objects, purposes, and programs for which

the budget authority is provided.

A special message may include one or more proposed deferrals of

budget authority. A deferral may not be proposed for any period of
Sec. 685 CH. 17B—IMPOUNDMENT CONTROL 276

time extending beyond the end of the fiscal year in which the special message proposing the deferral is transmitted to the House

and the Senate.

(b) CONSISTENCY WITH LEGISLATIVE POLICY.—Deferrals shall be

permissible only—

(1) to provide for contingencies;

(2) to achieve savings made possible by or through changes

in requirements or greater efficiency of operations; or

(3) as specifically provided by law.

No officer or employee of the United States may defer any budget

authority for any other purpose.

(c) EXCEPTION.—The provisions of this section do not apply to

any budget authority proposed to be rescinded or that is to be reserved as set forth in a special message required to be transmitted

under section 683 of this title.

SEC. 685. TRANSMISSION OF MESSAGES; PUBLICATION.

(a) DELIVERY TO HOUSE AND SENATE.—Each special message

transmitted under section 683 or 684 of this title shall be transmitted to the House of Representatives and the Senate on the same

day, and shall be delivered to the Clerk of the House of Representatives if the House is not in session, and to the Secretary of the

Senate if the Senate is not in session. Each special message so

transmitted shall be referred to the appropriate committee of the

House of Representatives and the Senate. Each such message shall

be printed as a document of each House.

(b) DELIVERY TO COMPTROLLER GENERAL.—A copy of each special

message transmitted under section 683 or 684 of this title shall be

transmitted to the Comptroller General on the same day it is transmitted to the House of Representatives and the Senate. In order to

assist the Congress in the exercise of its functions under sections

683 and 684 of this title, the Comptroller General shall review each

such message and inform the House of Representatives and the

Senate as promptly as practicable with respect to—

(1) in the case of a special message transmitted under section 683 of this title, the facts surrounding the proposed rescission or the reservation of budget authority (including the probable effects thereof); and

(2) in the case of a special message transmitted under section 684 of this title, (A) the facts surrounding each proposed

deferral of budget authority (including the probable effects

thereof) and (B) whether or not (or to what extent), in his judgment, such proposed deferral is in accordance with existing

statutory authority.

(c) TRANSMISSION OF SUPPLEMENTARY MESSAGES.—If any information contained in a special message transmitted under section

683 or 684 of this title is subsequently revised, the President shall

transmit to both Houses of Congress and the Comptroller General

a supplementary message stating and explaining such revision.

Any such supplementary message shall be delivered, referred, and

printed as provided in subsection (a) of this section. The Comptroller General shall promptly notify the House of Representatives and

the Senate of any changes in the information submitted by him
277 Sec. 686 CH. 17B—IMPOUNDMENT CONTROL

under subsection (b) of this section which may be necessitated by

such revision.

(d) PRINTING IN FEDERAL REGISTER.—Any special message transmitted under section 683 or 684 of this title, and any supplementary message transmitted under subsection (c) of this section,

shall be printed in the first issue of the Federal Register published

after such transmittal.

(e) CUMULATIVE REPORTS OF PROPOSED RESCISSIONS, RESERVATIONS, AND DEFERRALS OF BUDGET AUTHORITY.—

(1) The President shall submit a report to the House of Representatives and the Senate, not later than the 10th day of

each month during a fiscal year, listing all budget authority for

that fiscal year with respect to which, as of the first day of

such month—

(A) he has transmitted a special message under section

683 of this title with respect to a proposed rescission or a

reservation; and

(B) he has transmitted a special message under section

684 of this title proposing a deferral.

Such report shall also contain, with respect to each such proposed rescission or deferral, or each such reservation, the information required to be submitted in the special message with

respect thereto under section 683 or 684 of this title.

(2) Each report submitted under paragraph (1) shall be

printed in the first issue of the Federal Register published

after its submission.

SEC. 686. REPORTS BY COMPTROLLER GENERAL.

(a) FAILURE TO TRANSMIT SPECIAL MESSAGE.—If the Comptroller

General finds that the President, the Director of the Office of Management and Budget, the head of any department or agency of the

United States, or any other officer or employee of the United

States—

(1) is to establish a reserve or proposes to defer budget authority with respect to which the President is required to

transmit a special message under section 683 or 684 of this

title; or

(2) has ordered, permitted, or approved the establishment of

such a reserve or a deferral of budget authority;

and that the President has failed to transmit a special message

with respect to such reserve or deferral, the Comptroller General

shall make a report on such reserve or deferral and any available

information concerning it to both Houses of Congress. The provisions of sections 682 to 688 of this title shall apply with respect to

such reserve or deferral in the same manner and with the same effect as if such report of the Comptroller General were a special

message transmitted by the President under section 683 or 684 of

this title, and, for purposes of sections 682 to 688 of this title, such

report shall be considered a special message transmitted under section 683 or 684 of this title.

(b) INCORRECT CLASSIFICATION OF SPECIAL MESSAGE.—If the

President has transmitted a special message to both Houses of

Congress in accordance with section 683 or 684 of this title, and

the Comptroller General believes that the President so transmitted
Sec. 687 CH. 17B—IMPOUNDMENT CONTROL 278

the special message in accordance with one of those sections when

the special message should have been transmitted in accordance

with the other of those sections, the Comptroller General shall

make a report to both Houses of the Congress setting forth his reasons.

SEC. 687. SUITS BY COMPTROLLER GENERAL.

If, under this chapter, budget authority is required to be made

available for obligation and such budget authority is not made

available for obligation, the Comptroller General is hereby expressly empowered, through attorneys of his own selection, to bring

a civil action in the United States District Court for the District

of Columbia to require such budget authority to be made available

for obligation, and such court is hereby expressly empowered to

enter in such civil action, against any department, agency, officer

or employee of the United States, any decree, judgment, or order

which may be necessary or appropriate to make such budget authority available for obligation. No civil action shall be brought by

the Comptroller General under this section until the expiration of

25 calendar days of continuous session of the Congress following

the date on which an explanatory statement by the Comptroller

General of the circumstances giving rise to the action contemplated

has been filed with the Speaker of the House of Representatives

and the President of the Senate.

SEC. 688. PROCEDURE IN HOUSE OF REPRESENTATIVES AND SENATE.

(a) REFERRAL.—Any rescission bill introduced with respect to a

special message or impoundment resolution introduced with respect to a proposed deferral of budget authority shall be referred

to the appropriate committee of the House of Representatives or

the Senate, as the case may be.

(b) DISCHARGE OF COMMITTEE.— (1) If the committee to which a rescission bill or impoundment resolution has been referred has not reported it at the

end of 25 calendar days of continuous session of the Congress

after its introduction, it is in order to move either to discharge

the committee from further consideration of the bill or resolution or to discharge the committee from further consideration

of any other rescission bill with respect to the same special

message or impoundment resolution with respect to the same

proposed deferral, as the case may be, which has been referred

to the committee.

(2) A motion to discharge may be made only by an individual

favoring the bill or resolution, may be made only if supported

by one-fifth of the Members of the House involved (a quorum

being present), and is highly privileged in the House and privileged in the Senate (except that it may not be made after the

committee has reported a bill or resolution with respect to the

same special message or the same proposed deferral, as the

case may be); and debate thereon shall be limited to not more

than 1 hour, the time to be divided in the House equally between those favoring and those opposing the bill or resolution,

and to be divided in the Senate equally between, and controlled by, the majority leader and the minority leader or their

designees. An amendment to the motion is not in order, and
279 Sec. 688 CH. 17B—IMPOUNDMENT CONTROL

it is not in order to move to reconsider the vote by which the

motion is agreed to or disagreed to.

(c) FLOOR CONSIDERATION IN THE HOUSE.— (1) When the committee of the House of Representatives has

reported, or has been discharged from further consideration of,

a rescission bill or impoundment resolution, it shall at any

time thereafter be in order (even though a previous motion to

the same effect has been disagreed to) to move to proceed to

the consideration of the bill or resolution. The motion shall be

highly privileged and not debatable. An amendment to the motion shall not be in order, nor shall it be in order to move to

reconsider the vote by which the motion is agreed to or disagreed to.

(2) Debate on a rescission bill or impoundment resolution

shall be limited to not more than 2 hours, which shall be divided equally between those favoring and those opposing the

bill or resolution. A motion further to limit debate shall not be

debatable. In the case of an impoundment resolution, no

amendment to, or motion to recommit, the resolution shall be

in order. It shall not be in order to move to reconsider the vote

by which a rescission bill or impoundment resolution is agreed

to or disagreed to.

(3) Motions to postpone, made with respect to the consideration of a rescission bill or impoundment resolution, and

motions to proceed to the consideration of other business,

shall be decided without debate.

(4) All appeals from the decisions of the Chair relating to the

application of the Rules of the House of Representatives to the

procedure relating to any rescission bill or impoundment resolution shall be decided without debate.

(5) Except to the extent specifically provided in the preceding

provisions of this subsection, consideration of any rescission

bill or impoundment resolution and amendments thereto (or

any conference report thereon) shall be governed by the Rules

of the House of Representatives applicable to other bills and

resolutions, amendments, and conference reports in similar circumstances.

(d) FLOOR CONSIDERATION IN THE SENATE.—

(1) Debate in the Senate on any rescission bill or impoundment resolution, and all amendments thereto (in the case of a

rescission bill) and debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours. The

time shall be equally divided between, and controlled by, the

majority leader and the minority leader or their designees.

(2) Debate in the Senate on any amendment to a rescission

bill shall be limited to 2 hours, to be equally divided between,

and controlled by, the mover and the manager of the bill. Debate on any amendment to an amendment, to such a bill, and

debate on any debatable motion or appeal in connection with

such a bill or an impoundment resolution shall be limited to

1 hour, to be equally divided between, and controlled by, the

mover and the manager of the bill or resolution, except that in

the event the manager of the bill or resolution is in favor of

any such amendment, motion, or appeal, the time in opposition
Sec. 688 CH. 17B—IMPOUNDMENT CONTROL 280

thereto, shall be controlled by the minority leader or his designee. No amendment that is not germane to the provisions of

a rescission bill shall be received. Such leaders, or either of

them, may, from the time under their control on the passage

of a rescission bill or impoundment resolution, allot additional

time to any Senator during the consideration of any amendment, debatable motion, or appeal.

(3) A motion to further limit debate is not debatable. In the

case of a rescission bill, a motion to recommit (except a motion

to recommit with instructions to report back within a specified

number of days, not to exceed 3, not counting any day on

which the Senate is not in session) is not in order. Debate on

any such motion to recommit shall be limited to one hour, to

be equally divided between, and controlled by, the mover and

the manager of the concurrent resolution. In the case of an impoundment resolution, no amendment or motion to recommit is

in order.

(4) The conference report on any rescission bill shall be in

order in the Senate at any time after the third day (excluding

Saturdays, Sundays, and legal holidays) following the day on

which such a conference report is reported and is available to

Members of the Senate. A motion to proceed to the consideration of the conference report may be made even though a previous motion to the same effect has been disagreed to.

(5) During the consideration in the Senate of the conference

report on any rescission bill, debate shall be limited to 2 hours,

to be equally divided between, and controlled by, the majority

leader and minority leader or their designees. Debate on any

debatable motion or appeal related to the conference report

shall be limited to 30 minutes, to be equally divided between,

and controlled by, the mover and the manager of the conference report.

(6) Should the conference report be defeated, debate on any

request for a new conference and the appointment of conferees

shall be limited to one hour, to be equally divided between, and

controlled by, the manager of the conference report and the minority leader or his designee, and should any motion be made

to instruct the conferees before the conferees are named, debate on such motion shall be limited to 30 minutes, to be

equally divided between, and controlled by, the mover and the

manager of the conference report. Debate on any amendment

to any such instructions shall be limited to 20 minutes, to be

equally divided between, and controlled by, the mover and the

manager of the conference report. In all cases when the manager of the conference report is in favor of any motion, appeal,

or amendment, the time in opposition shall be under the control of the minority leader or his designee.

(7) In any case in which there are amendments in disagreement, time on each amendment shall be limited to 30 minutes,

to be equally divided between, and controlled by, the manager

of the conference report and the minority leader or his designee. No amendment that is not germane to the provisions of

such amendments shall be received.
281

TITLE 2—THE CONGRESS

* * * * * * *

CHAPTER 20—EMERGENCY POWERS TO ELIMINATE

BUDGET DEFICITS

SUBCHAPTER I—ELIMINATION OF DEFICITS IN EXCESS OF MAXIMUM

DEFICIT AMOUNT

SEC. 900. STATEMENT OF BUDGET ENFORCEMENT THROUGH SEQUESTRATION; DEFINITIONS.

(a) Omitted.

(b) GENERAL STATEMENT OF BUDGET ENFORCEMENT THROUGH

SEQUESTRATION.—This subchapter provides for the enforcement of

the deficit reduction assumed in House Concurrent Resolution 310

(101st Congress, second session) and the applicable deficit targets

for fiscal years 1991 through 1995. Enforcement, as necessary, is

to be implemented through sequestration—

(1) to enforce discretionary spending levels assumed in that

resolution (with adjustments as provided hereinafter);

(2) to enforce the requirement that any legislation increasing

direct spending or decreasing revenues be on a pay-as-you-go

basis; and

(3) to enforce the deficit targets specifically set forth in the

Congressional Budget and Impoundment Control Act of 1974

(with adjustments as provided hereinafter); applied in the

order set forth above.

(c) DEFINITIONS.—As used in this subchapter:

(1) The terms ‘‘budget authority’’, ‘‘new budget authority’’,

‘‘outlays’’, and ‘‘deficit’’ have the meanings given to such terms

in section 3 of the Congressional Budget and Impoundment

Control Act of 1974 [2 U.S.C.A. Sec. 622] (but including the

treatment specified in section 907(b)(3) of this title of the Hospital Insurance Trust Fund) and the terms ‘‘maximum deficit

amount’’ and ‘‘discretionary spending limit’’ shall mean the

amounts specified in section 601 of that Act [2 U.S.C.A. Sec.

665] as adjusted under sections 901 and 903 of this title.

(2) The terms ‘‘sequester’’ and ‘‘sequestration’’ refer to or

mean the cancellation of budgetary resources provided by discretionary appropriations or direct spending law.

(3) The term ‘‘breach’’ means, for any fiscal year, the amount

(if any) by which new budget authority or outlays for that year

(within a category of discretionary appropriations) is above

that category’s discretionary spending limit for new budget authority or outlays for that year, as the case may be.

(4) The term ‘‘category’’ means:
Sec. 900 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 282

(A) For fiscal years 1991, 1992, and 1993, any of the following subsets of discretionary appropriations: defense,

international, or domestic.

Discretionary appropriations in each of the three categories

shall be those so designated in the joint statement of managers

accompanying the conference report on the Omnibus Budget

Reconciliation Act of 1990. New accounts or activities shall be

categorized in consultation with the Committees on Appropriations and the Budget of the House of Representatives and the

Senate.

(B) For fiscal years 1994 and 1995, all discretionary appropriations.

Contributions to the United States to offset the cost of Operation Desert Shield shall not be counted within any category.

(5) The term ‘‘baseline’’ means the projection (described in

section 907 of this title) of current-year levels of new budget

authority, outlays, receipts, and the surplus or deficit into the

budget year and the outyears.

(6) The term ‘‘budgetary resources’’ means—

(A) with respect to budget year 1991, new budget authority; unobligated balances; new loan guarantee commitments or limitations; new direct loan obligations, commitments, or limitations; direct spending authority; and obligation limitations; or

(B) with respect to budget year 1992, 1993, 1994, or

1995, new budget authority; unobligated balances; direct

spending authority; and obligation limitations.

(7) The term ‘‘discretionary appropriations’’ means budgetary

resources (except to fund direct-spending programs) provided

in appropriation Acts.

(8) The term ‘‘direct spending’’ means—

(A) budget authority provided by law other than appropriation Acts;

(B) entitlement authority; and

(C) the food stamp program.

(9) The term ‘‘current’’ means, with respect to OMB estimates included with a budget submission under section 1105(a)

of Title 31, the estimates consistent with the economic and

technical assumptions underlying that budget and with respect

to estimates made after submission of the fiscal year 1992

budget that are not included with a budget submission, estimates consistent with the economic and technical assumptions

underlying the most recently submitted President’s budget.

(10) The term ‘‘real economic growth’’, with respect to any

fiscal year, means the growth in the gross national product

during such fiscal year, adjusted for inflation, consistent with

Department of Commerce definitions.

(11) The term ‘‘account’’ means an item for which appropriations are made in any appropriation Act and, for items not provided for in appropriation Acts, such term means an item for

which there is a designated budget account identification code

number in the President’s budget.
283 Sec. 900 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(12) The term ‘‘budget year’’ means, with respect to a session

of Congress, the fiscal year of the Government that starts on

October 1 of the calendar year in which that session begins.

(13) The term ‘‘current year’’ means, with respect to a budget

year, the fiscal year that immediately precedes that budget

year.

(14) The term ‘‘outyear’’ means, with respect to a budget

year, any of the fiscal years that follow the budget year

through fiscal year 1995.

(15) The term ‘‘OMB’’ means the Director of the Office of

Management and Budget.

(16) The term ‘‘CBO’’ means the Director of the Congressional Budget Office.

(17) For purposes of sections 902 and 903 of this title, legislation enacted during the second session of the One Hundred

First Congress shall be deemed to have been enacted before

the enactment of this Act.

(18) As used in this subchapter, all references to entitlement

authority shall include the list of mandatory appropriations included in the joint explanatory statement of managers accompanying the conference report on the Omnibus Budget Reconciliation Act of 1990.

(19) The term ‘‘deposit insurance’’ refers to the expenses of

the Federal Deposit Insurance Corporation and the funds it incorporates, the Resolution Trust Corporation, the National

Credit Union Administration and the funds it incorporates, the

Office of Thrift Supervision, the Comptroller of the Currency

Assessment Fund, and the RTC Office of Inspector General.

(20) The term ‘‘composite outlay rate’’ means the percent of

new budget authority that is converted to outlays in the fiscal

year for which the budget authority is provided and subsequent fiscal years, as follows:

(A) For the international category, 46 percent for the

first year, 20 percent for the second year, 16 percent for

the third year, and 8 percent for the fourth year.

(B) For the domestic category, 53 percent for the first

year, 31 percent for the second year, 12 percent for the

third year, and 2 percent for the fourth year.

(21) The sale of an asset means the sale to the public of any

asset, whether physical or financial, owned in whole or in part

by the United States. The term ‘‘prepayment of a loan’’ means

payments to the United States made in advance of the schedules set by law or contract when the financial asset is first acquired, such as the prepayment to the Federal Financing Bank

of loans guaranteed by the Rural Electrification Administration. If a law or contract allows a flexible payment schedule,

the term ‘‘in advance’’ shall mean in advance of the slowest

payment schedule allowed under such law or contract.

NOTES

Effective and Termination Dates

Pub. L. 103–66, Title XIV, Sec. 14002(c)(3)(A), Aug. 10, 1993, 107

Stat. 684, provided that: ‘‘Notwithstanding section 275(b) of the Bal-
Sec. 900 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 284

anced Budget and Emergency Deficit Control Act of 1985 [section

275(b) of Pub. L. 99–177, set out as a note under this section], sections 250, 251, 252, and 254 through 258C of that Act [this section,

sections 901, 902, and 904 through 908 of this title] shall expire on

September 30, 1998.’’

Executive Order No. 12857

Aug. 4, 1993, 58 F.R. 42181

Budget Control

By the authority vested in me as President of the United States

by the Constitution and the laws of the United States of America,

including section 1105 of title 31, United States Code [section 1105

of Title 31, Money and Finance], it is hereby ordered as follows:

SECTION 1.—Purpose. The purpose of this order is to create a

mechanism to monitor total costs of direct spending programs, and,

in the event that actual or projected costs exceed targeted levels, to

require that the budget address adjustments in direct spending.

SEC. 2.—Establishment of Direct Spending Targets.

(a) IN GENERAL.—The initial direct spending targets for each of

fiscal years 1994 through 1997 shall equal total outlays for all direct spending except net interest and deposit insurance as determined by the Director of the Office of Management and Budget (Director) under subsection (b).

(b) INITIAL REPORT BY DIRECTOR.—(1) Not later than 30 days

after the date of enactment of the Omnibus Budget Reconciliation

Act of 1993 (OBRA) [Aug. 10, 1993], the Director shall submit a report to the Congress setting forth projected direct spending targets

for each of fiscal years 1994 through 1997.

(2) The Director’s projections shall be based on legislation enacted

as of 5 days before the report is submitted under paragraph (1). To

the extent feasible, the Director shall use the same economic and

technical assumptions used in preparing the concurrent resolution

on the budget for fiscal year 1994 (H.Con.Res. 64).

(c) Adjustments. Direct spending targets shall be subsequently adjusted by the Director under Section 6.

SEC. 3. Annual Review of Direct Spending and Receipts by President. As part of each budget submitted under section 1105(a) of title

31, United States Code, the Director shall provide an annual review

of direct spending and receipts, which shall include (1) information

supporting the adjustment of direct spending targets pursuant to

Section 6, (2) information on total outlays for programs covered by

the direct spending targets, including actual outlays for the prior

fiscal year and projected outlays for the current fiscal year and the

5 succeeding fiscal years, and (3) information on the major categories of Federal receipts, including a comparison between the levels of those receipts and the levels projected as of the date of enactment of OBRA [Aug. 10, 1993].

SEC. 4. Special Direct Spending Message by President. (a) TRIGGER.—In the event that the information submitted under Section 3

indicates—

(1) that actual outlays for direct spending in the prior fiscal

year exceeded the applicable direct spending target, or
285 Sec. 900 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(2) that outlays for direct spending for the current or budget

year are projected to exceed the applicable direct spending targets, the Director shall include in the budget a special direct

spending message meeting the requirements of subsection (b) of

this Section.

(b) CONTENTS.—(1) The special direct spending message shall include:

(A) An explanation of any adjustments to the direct spending

targets pursuant to Section 6.

(B) An analysis of the variance in direct spending over the

adjusted direct spending targets.

(C) The President’s recommendations for addressing the direct spending overages, if any, in the prior, current, or budget

year.

(2) The recommendations may consist of any of the following:

(A) Proposed legislative changes to reduce outlays, increase

revenues, or both, in order to recoup or eliminate the overage for

the prior, current, and budget years in the current year, the

budget year, and the 4 out-years.

(B) Proposed legislative changes to reduce outlays, increase

revenues, or both, in order to recoup or eliminate part of the

overage for the prior, current, and budget year in the current

year, the budget year, and the 4 out-years, accompanied by a

finding by the President that, because of economic conditions or

for other specified reasons, only some of the overage should be

recouped or eliminated by outlay reductions or revenue increases, or both.

(C) A proposal to make no legislative changes to recoup or

eliminate any overage, accompanied by a finding by the President that, because of economic conditions or for other specified

reasons, no legislative changes are warranted.

(3) Any proposed legislative change under paragraph (2) to reduce

outlays may include reductions in direct spending or in the discretionary spending limits under section 601 of the Congressional

Budget Act of 1974 [section 665 of this title].

SEC. 5. Proposed Special Direct Spending Resolution. If the President recommends reductions consistent with subsection 4(b)(2)(A) or

(B), the special direct spending message shall include the text of a

special direct spending resolution implementing the President’s recommendations through reconciliation directives instructing the appropriate committees of the House of Representatives and Senate to

determine and recommend changes in laws within their jurisdictions to reduce outlays or increase revenues by specified amounts. If

the President recommends no reductions pursuant to Section

4(b)(2)(C), the special direct spending message shall include the text

of a special resolution concurring in the President’s recommendation

of no legislative action.

SEC. 6. Adjustments to Direct Spending Targets.

(a) REQUIRED ANNUAL ADJUSTMENTS.—Prior to the submission of

the President’s budget for each of fiscal years 1995 through 1997,

the Director shall adjust the direct spending targets in accordance

with this Section. Any such adjustments shall be reflected in the

targets used in the report under Section 3 and message (if any)

under Section 4.
Sec. 900 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 286

(b) ADJUSTMENT FOR INCREASES IN BENEFICIARIES.—(1) The Director shall adjust the direct spending targets for increases (if any)

in actual or projected numbers of beneficiaries under direct spending programs for which the number of beneficiaries is a variable in

determining costs.

(2) The adjustment shall be made by—

(A) computing, for each program under paragraph (1), the

percentage change between (i) the annual average number of

beneficiaries under that program (including actual numbers of

beneficiaries for the prior fiscal year and projections for the

budget and subsequent fiscal years) to be used in the President’s

budget with which the adjustments will be submitted, and (ii)

the annual average number of beneficiaries used in the adjustments made by the Director in the previous year (or, in the case

of adjustments made in 1994, the annual average number of

beneficiaries used in the Director’s initial report under Section

2(b));

(B) applying the percentages computed under subparagraph

(A) to the projected levels of outlays for each program consistent

with the direct spending targets in effect immediately prior to

the adjustment; and

(C) adding the results of the calculations required by subparagraph (B) to the direct spending targets in effect immediately prior to the adjustment.

(3) No adjustment shall be made for any program for a fiscal year

in which the percentage increase computed under paragraph (2)(A)

is less than or equal to zero.

(c) ADJUSTMENTS FOR REVENUE LEGISLATION.—The Director

shall adjust the targets as follows:

(1) they shall be increased by the amount of any increase in

receipts; or

(2) they shall be decreased by the amount of any decrease in

receipts, resulting from receipts legislation enacted after the

date of enactment of OBRA [Aug. 10, 1993], except legislation

enacted in response to the message transmitted under Section 4.

(d) ADJUSTMENTS TO REFLECT CONGRESSIONAL DECISIONS.—

Upon enactment of a reconciliation bill enacted in response to a

message submitted under Section 4, the Director shall adjust direct

spending targets for the current year, the budget year, and each outyear through 1997 by—

(1) increasing the target for the current year and the budget

year by the amount stated for that year in that reconciliation

bill (but if a separate vote was required by Congressional rules,

only if that vote has occurred); and

(2) decreasing the target for the current, budget, and outyears

through 1997 by the amount of reductions in direct spending

enacted in that reconciliation bill.

(e) DESIGNATED EMERGENCIES.—The Director shall adjust the targets to reflect the costs of legislation that is designated as an emergency by Congress and the President under section 252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985 [section

902(e) of this title].

SEC. 7. Relationship to Balanced Budget and Emergency Deficit

Control Act. Recommendations pursuant to Section 4 shall include
287 Sec. 901 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

a provision specifying that reductions in outlays or increases in receipts resulting from that legislation shall not be taken into account

for purposes of any budget enforcement procedures under the Balanced Budget and Emergency Deficit Control Act of 1985 [Pub.L.

99–177; see Tables].

SEC. 8. Estimating Margin. For any fiscal year for which the

overage is less than one-half of 1 percent of the direct spending target for that year, the procedures set forth in Section 4 shall not

apply.

SEC. 9. Means-Tested Programs. In making recommendations

under Section 4, the Director shall seriously consider all other alternatives before proposing reductions in means-tested programs.

SEC. 10. Effective Date. This order shall take effect upon enactment of OBRA [Pub.L. 103–66, which was approved Aug. 10, 1993].

This order shall apply to direct spending targets for fiscal years

1994 through 1997 and shall expire at the end of fiscal year 1997.

WILLIAM J. CLINTON.

SEC. 901. ENFORCING DISCRETIONARY SPENDING LIMITS.

(a) FISCAL YEARS 1991–1998 ENFORCEMENT.—

(1) SEQUESTRATION.—Within 15 calendar days after Congress

adjourns to end a session and on the same day as a sequestration (if any) under section 902 of this title and section 903 of

this title, there shall be a sequestration to eliminate a budgetyear breach, if any, within any category.

(2) ELIMINATING A BREACH.—Each non-exempt account within a category shall be reduced by a dollar amount calculated

by multiplying the baseline level of sequestrable budgetary resources in that account at that time by the uniform percentage

necessary to eliminate a breach within that category; except

that the health programs set forth in section 906(e) of this title

shall not be reduced by more than 2 percent and the uniform

percent applicable to all other programs under this paragraph

shall be increased (if necessary) to a level sufficient to eliminate that breach. If, within a category, the discretionary spending limits for both new budget authority and outlays are

breached, the uniform percentage shall be calculated by—

(A) first, calculating the uniform percentage necessary to

eliminate the breach in new budget authority, and

(B) second, if any breach in outlays remains, increasing

the uniform percentage to a level sufficient to eliminate

that breach.

(3) MILITARY PERSONNEL.—If the President uses the authority to exempt any military personnel from sequestration under

section 905(h) of this title, each account within subfunctional

category 051 (other than those military personnel accounts for

which the authority provided under section 905(h) of this title

has been exercised) shall be further reduced by a dollar

amount calculated by multiplying the enacted level of non-exempt budgetary resources in that account at that time by the

uniform percentage necessary to offset the total dollar amount

by which outlays are not reduced in military personnel accounts by reason of the use of such authority.
Sec. 901 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 288

(4) PART-YEAR APPROPRIATIONS.—If, on the date specified in

paragraph (1), there is in effect an Act making or continuing

appropriations for part of a fiscal year for any budget account,

then the dollar sequestration calculated for that account under

paragraphs (2) and (3) shall be subtracted from—

(A) the annualized amount otherwise available by law in

that account under that or a subsequent part-year appropriation; and

(B) when a full-year appropriation for that account is enacted, from the amount otherwise provided by the full-year

appropriation.

(5) LOOK-BACK.—If, after June 30, an appropriation for the

fiscal year in progress is enacted that causes a breach within

a category for that year (after taking into account any sequestration of amounts within that category), the discretionary

spending limits for that category for the next fiscal year shall

be reduced by the amount or amounts of that breach.

(6) WITHIN-SESSION SEQUESTRATION.—If an appropriation for

a fiscal year in progress is enacted (after Congress adjourns to

end the session for that budget year and before July 1 of that

fiscal year) that causes a breach within a category for that

year (after taking into account any prior sequestration of

amounts within that category), 15 days later there shall be a

sequestration to eliminate that breach within that category following the procedures set forth in paragraphs (2) through (4).

(7) OMB ESTIMATES.—As soon as practicable after Congress

completes action on any discretionary appropriation, CBO,

after consultation with the Committees on the Budget of the

House of Representatives and the Senate, shall provide OMB

with an estimate of the amount of discretionary new budget

authority and outlays for the current year (if any) and the

budget year provided by that legislation. Within 5 calendar

days after the enactment of any discretionary appropriation,

OMB shall transmit a report to the House of Representatives

and to the Senate containing the CBO estimate of that legislation, an OMB estimate of the amount of discretionary new

budget authority and outlays for the current year (if any) and

the budget year provided by that legislation, and an explanation of any difference between the two estimates. For purposes of this paragraph, amounts provided by annual appropriations shall include any new budget authority and outlays

for those years in accounts for which funding is provided in

that legislation that result from previously enacted legislation.

Those OMB estimates shall be made using current economic

and technical assumptions. OMB shall use the OMB estimates

transmitted to the Congress under this paragraph for the purposes of this subsection. OMB and CBO shall prepare estimates under this paragraph in conformance with scorekeeping

guidelines determined after consultation among the House and

Senate Committees on the Budget, CBO, and OMB.

(b) ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.—

(1) When the President submits the budget under section

1105(a) of Title 31 for budget year 1992, 1993, 1994, 1995,

1996, 1997, or 1998 (except as otherwise indicated), OMB shall
289 Sec. 901 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

calculate (in the order set forth below), and the budget shall

include, adjustments to discretionary spending limits (and

those limits as cumulatively adjusted) for the budget year and

each outyear through 1998 to reflect the following:

(A) CHANGES IN CONCEPTS AND DEFINITIONS.—The adjustments produced by the amendments made by Title XIII

of the Omnibus Budget Reconciliation Act of 1990 or by

any other changes in concepts and definitions shall equal

the baseline levels of new budget authority and outlays

using up-to-date concepts and definitions minus those levels using the concepts and definitions in effect before such

changes. Such other changes in concepts and definitions

may only be made in consultation with the Committees on

Appropriations, the Budget, Government Operations, and

Governmental Affairs of the House of Representatives and

Senate.

(B) CHANGES IN INFLATION.— (i) For a budget submitted for budget year 1992,

1993, 1994, or 1995, the adjustments produced by

changes in inflation shall equal the levels of discretionary new budget authority and outlays in the baseline (calculated using current estimates) subtracted

from those levels in that baseline recalculated with

the baseline inflators for the budget year only, multiplied by the inflation adjustment factor computed

under clause (ii).

(ii) For a budget year the inflation adjustment factor

shall equal the ratio between the level of year-overyear inflation measured for the fiscal year most recently completed and the applicable estimated level for

that year set forth below: For 1990, 1.041; for 1991,

1.052; for 1992, 1.041; and for 1993, 1.033.

Inflation shall be measured by the average of the estimated gross national product implicit price deflator

index for a fiscal year divided by the average index for

the prior fiscal year.

(iii) For a budget submitted for budget year 1996,

1997, or 1998, the adjustments shall be those necessary to reflect changes in inflation estimates since

those of March 31, 1993, set forth on page 46 of House

Conference Report 103–48.

(C) CREDIT REESTIMATES.—For a budget submitted for

fiscal year 1993 or 1994, the adjustments produced by reestimates to costs of Federal credit programs shall be, for

any such program, a current estimate of new budget authority and outlays associated with a baseline projection of

the prior year’s gross loan level for that program minus

the baseline projection of the prior year’s new budget authority and associated outlays for that program.

(2) When OMB submits a sequestration report under section

904(g) or (h) of this title for fiscal year 1991, 1992, 1993, 1994,

1995, 1996, 1997, or 1998 (except as otherwise indicated), OMB

shall calculate (in the order set forth below), and the sequestration report, and subsequent budgets submitted by the Presi-
Sec. 901 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 290

dent under section 1105(a) of Title 31, shall include, adjustments to discretionary spending limits (and those limits as adjusted) for the fiscal year and each succeeding year through

1998, as follows:

(A) IRS FUNDING.—To the extent that appropriations are

enacted that provide additional new budget authority or

result in additional outlays (as compared with the CBO

baseline constructed in June 1990) for the Internal Revenue Service compliance initiative in any fiscal year, the adjustments for that year shall be those amounts, but shall

not exceed the amounts set forth below—

(i) for fiscal year 1991, $191,000,000 in new budget authority and $183,000,000 in outlays; s (ii) for fiscal year 1992, $172,000,000 in new budget authority and $169,000,000 in outlays; (iii) for fiscal year 1993, $183,000,000 in new budget authority and $179,000,000 in outlays; (iv) for fiscal year 1994, $187,000,000 in new budget authority and $183,000,000 in outlays; and (v) for fiscal year 1995, $188,000,000 in new budget authority and $184,000,000 in outlays; and

the prior-year outlays resulting from these appropriations

of budget authority.

(B) DEBT FORGIVENESS.—If, in calendar year 1990 or

1991, an appropriation is enacted that forgives the Arab

Republic of Egypt’s foreign military sales indebtedness to

the United States and any part of the Government of Poland’s indebtedness to the United States, the adjustment

shall be the estimated costs (in new budget authority and

outlays, in all years) of that forgiveness.

(C) IMF FUNDING.—If, in fiscal year 1991, 1992, 1993,

1994, or 1995 an appropriation is enacted to provide to the

International Monetary Fund the dollar equivalent, in

terms of Special Drawing Rights, of the increase in the

United States quota as part of the International Monetary

Fund Ninth General Review of Quotas, the adjustment

shall be the amount provided by that appropriation.

(D) EMERGENCY APPROPRIATIONS.—

(i) If, for any fiscal year, appropriations for discretionary accounts are enacted that the President designates as emergency requirements and that the Congress so designates in statute, the adjustment shall be

the total of such appropriations in discretionary accounts designated as emergency requirements and the

outlays flowing in all years from such appropriations.

This subparagraph shall not apply to appropriations to

cover agricultural crop disaster assistance.

(ii) The costs for operation Desert Shield are to be

treated as emergency funding requirements not subject to the defense spending limits. Funding for Desert

Shield will be provided through the normal legislative

process. Desert Shield costs should be accommodated

through Allied burden-sharing, subsequent appropriation Acts, and if the President so chooses, through off-
291 Sec. 901 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

sets within other defense accounts. Emergency Desert

Shield costs mean those incremental costs associated

with the increase in operations in the Middle East and

do not include costs that would be experienced by the

Department of Defense as part of its normal operations absent Operation Desert Shield.

(E) SPECIAL ALLOWANCE FOR DISCRETIONARY NEW BUDG- ET AUTHORITY.— (i) For each of fiscal years 1992 and 1993, the adjustment for the domestic category in each year shall

be an amount equal to 0.1 percent of the sum of the

adjusted discretionary spending limits on new budget

authority for all categories for fiscal years 1991, 1992,

and 1993 (cumulatively), together with outlays associated therewith (calculated at the composite outlay rate

for the domestic category);

(ii) for each of fiscal years 1992 and 1993, the adjustment for the international category in each year

shall be an amount equal to 0.079 percent of the sum

of the adjusted discretionary spending limits on new

budget authority for all categories for fiscal years

1991, 1992, and 1993 (cumulatively), together with

outlays associated therewith (calculated at the composite outlay rate for the international category);

(iii) if, for fiscal years 1992 and 1993, the amount of

new budget authority provided in appropriation Acts

exceeds the discretionary spending limit on new budget authority for any category due to technical estimates made by the Director of the Office of Management and Budget, the adjustment is the amount of the

excess, but not to exceed an amount (for 1992 and

1993 together) equal to 0.042 percent of the sum of the

adjusted discretionary limits on new budget authority

for all categories for fiscal years 1991, 1992, and 1993

(cumulatively); and

(iv) if, for fiscal years 1994, 1995, 1996, 1997, and

1998, the amount of new budget authority provided in

appropriation Acts exceeds the discretionary spending

limit on new budget authority due to technical estimates made by the director of the Office of Management and Budget, the adjustment is the amount of the

excess, but not to exceed an amount (for any one fiscal

year) equal to 0.1 percent of the adjusted

descretionary spending limit on new budget authority

for that fiscal year.

(F) SPECIAL OUTLAY ALLOWANCE.—If in any fiscal year

outlays for a category exceed the discretionary spending

limit for that category but new budget authority does not

exceed its limit for that category (after application of the

first step of a sequestration described in subsection (a)(2)

of this section, if necessary), the adjustment in outlays is

the amount of the excess, but not to exceed $2,500,000,000

in the defense category, $1,500,000,000 in the international category, or $2,500,000,000 in the domestic cat-
Sec. 902 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 292

egory (as applicable) in fiscal year 1991, 1992, or 1993, and

not to exceed $6,500,000,000 in fiscal year 1994 or 1995

less any of the outlay adjustments made under subparagraph (E) for a category for a fiscal year, and not to exceed

0.5 percent of the adjusted descretionary spending limit on

outlays for the fiscal year in fiscal year 1996, 1997, or

1998.

(G) NET GUARANTEE COSTS.—The net costs for fiscal year

1994 and 1995 of the appropriation made under section

2186 of Title 22 are not subject to the discretionary spending limits or the Appropriations Committee’s Foreign Operations Subcommittee’s 602(b) allocation in fiscal year

1994 and 1995.

SEC. 902. ENFORCING PAY-AS-YOU-GO.

(a) FISCAL YEAR 1992–1998 ENFORCEMENT.—The purpose of this

section is to assure that any legislation (enacted after November 5,

1990) affecting direct spending or receipts that increases the deficit

in any fiscal year covered by this Act will trigger an offsetting sequestration.

(b) SEQUESTRATION; LOOK-BACK.—Within 15 calendar days after

Congress adjourns to end a session (other than of the One Hundred

First Congress) and on the same day as a sequestration (if any)

under section 901 of this title and section 903 of this title, there

shall be a sequestration to offset the amount of any net deficit increase in that fiscal year and the prior fiscal year caused by all direct spending and receipts legislation enacted after the date of enactment of this section (after adjusting for any prior sequestration

as provided by paragraph (2)). OMB shall calculate the amount of

deficit increase, if any, in those fiscal years by adding—

(1) all applicable estimates of direct spending and receipts

legislation transmitted under subsection (d) of this section applicable to those fiscal years, other than any amounts included

in such estimates resulting from—

(A) full funding of, and continuation of, the deposit insurance guarantee commitment in effect on November 5,

1990, and

(B) emergency provisions as designated under subsection

(e) of this section; and

(2) the estimated amount of savings in direct spending programs applicable to those fiscal years resulting from the prior

year’s sequestration under this section or section 903 of this

title, if any (except for any amounts sequestered as a result of

a net deficit increase in the fiscal year immediately preceding

the prior fiscal year), as published in OMB’s end-of-session sequestration report for that prior year.

(c) ELIMINATING A DEFICIT INCREASE.—

(1) The amount required to be sequestered in a fiscal year

under subsection (b) of this section shall be obtained from nonexempt direct spending accounts from actions taken in the following order:

(A) FIRST.—All reductions in automatic spending increases specified in section 906(a) of this title shall be

made.
293 Sec. 902 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(B) SECOND.—If additional reductions in direct spending

accounts are required to be made, the maximum reductions permissible under sections 906(b) of this title (guaranteed student loans) and 906(c) of this title (foster care

and adoption assistance) shall be made.

(C) THIRD.— (i) If additional reductions in direct spending accounts are required to be made, each remaining nonexempt direct spending account shall be reduced by

the uniform percentage necessary to make the reductions in direct spending required by paragraph (1); except that the medicare programs specified in section

906(d) of this title shall not be reduced by more than

4 percent and the uniform percentage applicable to all

other direct spending programs under this paragraph

shall be increased (if necessary) to a level sufficient to

achieve the required reduction in direct spending.

(ii) For purposes of determining reductions under

clause (i), outlay reductions (as a result of sequestration of Commodity Credit Corporation commodity price

support contracts in the fiscal year of a sequestration)

that would occur in the following fiscal year shall be

credited as outlay reductions in the fiscal year of the

sequestration.

(2) For purposes of this subsection, accounts shall be assumed to be at the level in the baseline.

(d) OMB ESTIMATES.—As soon as practicable after Congress completes action on any direct spending or receipts legislation enacted

after November 5, 1990, after consultation with the Committees on

the Budget of the House of Representatives and the Senate, CBO

shall provide OMB with an estimate of the amount of change in

outlays or receipts, as the case may be, in each fiscal year through

fiscal year 1998 resulting from that legislation. Within 5 calendar

days after the enactment of any direct spending or receipts legislation enacted after November 5, 1990, OMB shall transmit a report

to the House of Representatives and to the Senate containing such

CBO estimate of that legislation, an OMB estimate of the amount

of change in outlays or receipts, as the case may be, in each fiscal

year through fiscal year 1998 resulting from that legislation, and

an explanation of any difference between the two estimates. Those

OMB estimates shall be made using current economic and technical assumptions. OMB and CBO shall prepare estimates under

this paragraph in conformance with scorekeeping guidelines determined after consultation among the House and Senate Committees

on the Budget, CBO, and OMB.

(e) EMERGENCY LEGISLATION.—If, for any fiscal year from 1991

through 1998, a provision of direct spending or receipts legislation

is enacted that the President designates as an emergency requirement and that the Congress so designates in statute, the amounts

of new budget authority, outlays, and receipts in all fiscal years

through 1995 resulting from that provision shall be designated as

an emergency requirement in the reports required under subsection (d) of this section. This subsection shall not apply to direct

spending provisions to cover agricultural crop disaster assistance.
Sec. 904 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 294

SEC. 904. REPORTS AND ORDERS.

(a) TIMETABLE.—The timetable with respect to this subchapter

for any budget year is as follows:

Date: Action to be completed:

January 21—Notification regarding optional adjustment of maximum deficit amount.

5 days before the President’s budget submission—CBO sequestration preview report.

The President’s budget submission—OMB sequestration preview

report.

August 10—Notification regarding military personnel.

August 15—CBO sequestration update report.

August 20—OMB sequestration update report.

10 days after end of session—CBO final sequestration report.

15 days after end of session—OMB final sequestration report;

Presidential order.

30 days later—GAO compliance report.

(b) SUBMISSION AND AVAILABILITY OF REPORTS.—Each report required by this section shall be submitted, in the case of CBO, to

the House of Representatives, the Senate and OMB and, in the

case of OMB, to the House of Representatives, the Senate, and the

President on the day it is issued. On the following day a notice of

the report shall be printed in the Federal Register.

(c) OPTIONAL ADJUSTMENT OF MAXIMUM DEFICIT AMOUNTS.—

With respect to budget year 1994 or 1995, on the date specified in

subsection (a) of this section the President shall notify the House

of Representatives and the Senate of his decision regarding the optional adjustment of the maximum deficit amount (as allowed

under section 903(g)(1)(B) of this title).

(d) SEQUESTRATION PREVIEW REPORTS.—

(1) REPORTING REQUIREMENT.—On the dates specified in subsection (a) of this section, OMB and CBO shall issue a preview

report regarding discretionary, pay-as-you-go, and deficit sequestration based on laws enacted through those dates.

(2) DISCRETIONARY SEQUESTRATION REPORT.—The preview reports shall set forth estimates for the current year and each

subsequent year through 1998 of the applicable discretionary

spending limits for each category and an explanation of any

adjustments in such limits under section 901 of this title.

(3) PAY-AS-YOU-GO SEQUESTRATION REPORTS.—The preview

reports shall set forth, for the current year and the budget

year, estimates for each of the following:

(A) The amount of net deficit increase or decrease, if

any, calculated under subsection 902(b) of this title.

(B) A list identifying each law enacted and sequestration

implemented after November 5, 1990, included in the calculation of the amount of deficit increase or decrease and

specifying the budgetary effect of each such law.

(C) The sequestration percentage or (if the required sequestration percentage is greater than the maximum allowable percentage for medicare) percentages necessary to

eliminate a deficit increase under section 902(c) of this

title.
295 Sec. 904 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(4) DEFICIT SEQUESTRATION REPORTS.—The preview reports

shall set forth for the budget year estimates for each of the following:

(A) The maximum deficit amount, the estimated deficit

calculated under section 903(b) of this title, the excess deficit, and the margin.

(B) The amount of reductions required under section 902

of this title, the excess deficit remaining after those reductions have been made, and the amount of reductions required from defense accounts and the reductions required

from non-defense accounts.

(C) The sequestration percentage necessary to achieve

the required reduction in defense accounts under section

903(d) of this title.

(D) The reductions required under sections 903(e)(1) and

903(e)(2) of this title.

(E) The sequestration percentage necessary to achieve

the required reduction in non-defense accounts under section 903(e)(3) of this title.

The CBO report need not set forth the items other than the

maximum deficit amount for fiscal year 1992, 1993, or any fiscal year for which the President notifies the House of Representatives and the Senate that he will adjust the maximum

deficit amount under the option under section 903(g)(1)(B) of

this title.

(5) EXPLANATION OF DIFFERENCES.—The OMB reports shall

explain the differences between OMB and CBO estimates for

each item set forth in this subsection.

(e) NOTIFICATION REGARDING MILITARY PERSONNEL.—On or before the date specified in subsection (a) of this section, the President shall notify the Congress of the manner in which he intends

to exercise flexibility with respect to military personnel accounts

under section 905(h) of this title.

(f) SEQUESTRATION UPDATE REPORTS.—On the dates specified in

subsection (a) of this section, OMB and CBO shall issue a sequestration update report, reflecting laws enacted through those dates,

containing all of the information required in the sequestration preview reports.

(g) FINAL SEQUESTRATION REPORTS.—

(1) REPORTING REQUIREMENT.—On the dates specified in subsection (a) of this section, OMB and CBO shall issue a final sequestration report, updated to reflect laws enacted through

those dates.

(2) DISCRETIONARY SEQUESTRATION REPORTS.—The final reports shall set forth estimates for each of the following:

(A) For the current year and each subsequent year

through 1998 the applicable discretionary spending limits

for each category and an explanation of any adjustments

in such limits under section 901 of this title.

(B) For the current year and the budget year the estimated new budget authority and outlays for each category

and the breach, if any, in each category.
Sec. 904 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 296

(C) For each category for which a sequestration is required, the sequestration percentages necessary to achieve

the required reduction.

(D) For the budget year, for each account to be sequestered, estimates of the baseline level of sequestrable [FN1]

budgetary resources and resulting outlays and the amount

of budgetary resources to be sequestered and resulting outlay reductions.

(3) PAY-AS-YOU-GO AND DEFICIT SEQUESTRATION REPORTS.— The final reports shall contain all the information required in

the pay-as-you-go and deficit sequestration preview reports. In

addition, these reports shall contain, for the budget year, for

each account to be sequestered, estimates of the baseline level

of sequestrable budgetary resources and resulting outlays and

the amount of budgetary resources to be sequestered and resulting outlay reductions. The reports shall also contain estimates of the effects on outlays of the sequestration in each outyear through 1998 for direct spending programs.

(4) REPORTS ON SEQUESTRATION TO REDUCE THE VIOLENT

CRIME REDUCTION TRUST FUND.—The final reports shall set

forth for the budget year estimates for each of the following:

(A) The amount of budget authority appropriated from

the Violent Crime Reduction Trust Fund and outlays resulting from those appropriations.

(B) The sequestration percentage and reductions, if any,

required under section 901a of this title.

(5) EXPLANATION OF DIFFERENCES.—The OMB report shall

explain any differences between OMB and CBO estimates of

the amount of any net deficit change calculated under subsection 902(b) of this title, any excess deficit, any breach, and

any required sequestration percentage. The OMB report shall

also explain differences in the amount of sequestrable [FN1]

resources for any budget account to be reduced if such difference is greater than $5,000,000.

(6) PRESIDENTIAL ORDER.—On the date specified in subsection (a) of this section, if in its final sequestration report

OMB estimates that any sequestration is required, the President shall issue an order fully implementing without change

all sequestrations required by the OMB calculations set forth

in that report. This order shall be effective on issuance.

(h) WITHIN-SESSION SEQUESTRATION REPORTS AND ORDER.—If an

appropriation for a fiscal year in progress is enacted (after Congress adjourns to end the session for that budget year and before

July 1 of that fiscal year) that causes a breach, 10 days later CBO

shall issue a report containing the information required in paragraph (g)(2). Fifteen days after enactment, OMB shall issue a report containing the information required in paragraphs (g)(2) and

(g)(4). On the same day as the OMB report, the President shall

issue an order fully implementing without change all sequestrations required by the OMB calculations set forth in that report.

This order shall be effective on issuance.

(i) GAO COMPLIANCE REPORT.—On the date specified in subsection (a) of this section, the Comptroller General shall submit to

the Congress and the President a report on—
297 Sec. 905 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(1) the extent to which each order issued by the President

under this section complies with all of the requirements contained in this part, either certifying that the order fully and accurately complies with such requirements or indicating the respects in which it does not; and

(2) the extent to which each report issued by OMB or CBO

under this section complies with all of the requirements contained in this part, either certifying that the report fully and

accurately complies with such requirements or indicating the

respects in which it does not.

(j) LOW-GROWTH REPORT.—At any time, CBO shall notify the

Congress if—

(1) during the period consisting of the quarter during which

such notification is given, the quarter preceding such notification, and the 4 quarters following such notification, CBO or

OMB has determined that real economic growth is projected or

estimated to be less than zero with respect to each of any 2

consecutive quarters within such period; or

(2) the most recent of the Department of Commerce’s advance preliminary or final reports of actual real economic

growth indicate that the rate of real economic growth for each

of the most recently reported quarter and the immediately preceding quarter is less than one percent.

(k) ECONOMIC AND TECHNICAL ASSUMPTIONS.—In all reports required by this section, OMB shall use the same economic and technical assumptions as used in the most recent budget submitted by

the President under section 1105(a) of Title 31.

SEC. 905. EXEMPT PROGRAMS AND ACTIVITIES.

(a) SOCIAL SECURITY BENEFITS AND TIER I RAILROAD RETIREMENT

BENEFITS.—Benefits payable under the old-age, survivors, and disability insurance program established under title II of the Social

Security Act [42 U.S.C.A. Sec. 401 et seq.] and benefits payable

under section 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement

Act of 1974 [45 U.S.C.A. Secs. 231b(a), 231(f)(3), 231c(a), and

231c(f)] shall be exempt from reduction under any order issued

under this subchapter.

(b) VETERANS PROGRAMS.—The following programs shall be exempt from reduction under any order issued under this subchapter:

National Service Life Insurance Fund (36–8132–0–7–701);

Service-Disabled Veterans Insurance Fund (36–4012–0–3–

701);

Veterans Special Life Insurance Fund (36–8455–0–8–701);

Veterans Reopened Insurance Fund (36–4010–0–3–701);

United States Government Life Insurance Fund (36–8150–0–

7–701);

Veterans Insurance and Indemnity (36–0120–0–1–701);

Special Therapeutic and Rehabilitation Activities Fund (36–

4048–0–3–703);

Veterans’ Canteen Service Revolving Fund (36–4014–0–3–

705);

Benefits under chapter 21 of title 38, United States Code, relating to specially adapted housing and mortgage-protection
Sec. 905 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 298

life insurance for certain veterans with service-connected disabilities (36–0137–0–1–702);

Benefits under section 907 of title 38, United States Code,

relating to burial benefits for veterans who die as a result of

service-connected disability (36–0155–0–1–701);

Benefits under chapter 39 of title 38, United States Code, relating to automobiles and adaptive equipment for certain disabled veterans and members of the Armed Forces (36–0137–0–

1–702);

Veterans’ compensation (36–0153–0–1–701); and

Veterans’ pensions (36–0154–0–1–701).

(c) NET INTEREST.—No reduction of payments for net interest (all

of major functional category 900) shall be made under any order issued under this subchapter.

(d) EARNED INCOME TAX CREDIT.—Payments to individuals made

pursuant to section 32 of the Internal Revenue Code of 1954 [26

U.S.C.A. Sec. 32] shall be exempt from reduction under any order

issued under this subchapter.

(e) NON-DEFENSE UNOBLIGATED BALANCES.—Unobligated balances of budget authority carried over from prior fiscal years, except balances in the defense category, shall be exempt from reduction under any order issued under this part.

(f) CERTAIN PROGRAM BASES.—Outlays for programs specified in

paragraph (1) of section 907 of this title shall be subject to reduction only in accordance with the procedures established in section

901(a)(3)(C) and 906(b) of this title.

(g) OTHER PROGRAMS AND ACTIVITIES.—(1)(A) The following

budget accounts and activities shall be exempt from reduction

under any order issued under this subchapter:

Activities resulting from private donations, bequests, or voluntary contributions to the Government;

Administration of Territories, Northern Mariana Islands

Covenant grants (14–0412–0–1–806);

Thrift Savings Fund (26–8141–0–7–602);

Alaska Power Administration, Operations and maintenance

(89–0304–0–1–271);

Appropriations for the District of Columbia (to the extent

they are appropriations of locally raised funds);

Bonneville Power Administration fund and borrowing authority established pursuant to section 13 of Public Law 93–

454 (1974), as amended (89–4045–0–3–271);

Bureau of Indian Affairs, miscellaneous payments to Indians

(14–2303–0–1–452);

Bureau of Indian Affairs miscellaneous trust funds, tribal

trust funds (14–9973–0–7–999);

Claims, defense (97–0102–0–1–051);

Claims, judgments, and relief acts (20–1895–0–1–806);

Coinage profit fund (20–5811–0–2–803);

Compensation of the President (11–0001–0–1–802);

Customs Service, miscellaneous permanent appropriations

(20–9922–0–2–852);

Comptroller of the Currency;

Director of the Office of Thrift Supervision;

Dual benefits payments account (60–0111–0–1–601);
299 Sec. 905 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

Eastern Indian land claims settlement fund (14–2202–0–1–

806);

Exchange stabilization fund (20–4444–0–3–155);

Farm Credit System Financial Assistance Corporation, interest payments (20–1850–0–1–351);

Federal Deposit Insurance Corporation;

Federal Deposit Insurance Corporation, Bank Insurance

Fund;

Federal Deposit Insurance Corporation, FSLIC Resolution

Fund;

Federal Deposit Insurance Corporation, Savings Association

Insurance Fund;

Federal Housing Finance Board;

Federal payment to the railroad retirement account (60–

0113–0–1–601);

Foreign military sales trust fund (11–8242–0–7–155);

Health professions graduate student loan insurance fund

(Health Education Assistance Loan Program) (75–4305–0–3–

553);

Higher education facilities loans and insurance (91–0240–0–

1–502);

Internal Revenue Collections for Puerto Rico (20–5737–0–2–

852);

Intragovernmental funds, including those from which the

outlays are derived primarily from resources paid in from other

government accounts, except to the extent such funds are augmented by direct appropriations for the fiscal year during

which an order is in effect;

Panama Canal Commission, operating expenses (95–5190–0–

2–403), and Panama Canal Commission, capital outlay (95–

5190–0–2–403);

Medical facilities guarantee and loan fund, Federal interest

subsidies for medical facilities (75–4430–0–3–551);

National Credit Union Administration;

National Credit Union Administration, central liquidity facility;

National Credit Union Administration, credit union share insurance fund;

Payment of Vietnam and USS Pueblo prisoner-of-war claims

(15–0104–0–1–153);

Payment to civil service retirement and disability fund (24–

0200–0–1–805);

Payment to Judiciary Trust Funds (10–0941–0–1–752);

Payments to copyright owners (03–5175–0–2–376);

Payments to health care trust funds (75–0580–0–1–572);

Payments to military retirement fund (97–0040–0–1–054);

Compact of Free Association, economic assistance pursuant

to Public Law 99–658 (14–0415–0–1–806);

Payments to social security trust funds (75–0404–0–1–571);

Payments to state and local government fiscal assistance

trust fund (20–2111–0–1–851);

Payments to the foreign service retirement and disability

fund (11–1036–0–1–153 and 19–0540–0–1–153);
Sec. 905 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 300

Payments to trust funds from excise taxes or other receipts

properly creditable to such trust funds;

Payments to the United States territories, fiscal assistance

(14–0418–0–1–852);

Payments to widows and heirs of deceased Members of Congress (00–0215–0–1–801);

Postal service fund (18–4020–0–3–372);

Resolution Funding Corporation;

Resolution Trust Corporation;

Salaries of Article III judges;

Soldiers and Airmen’s Home, payment of claims (84–8930–0–

7–705);

Southeastern Power Administration, Operations and maintenance (89–0302–0–1–271);

Southwestern Power Administration, Operations and maintenance (89–0303–0–1–271);

Tennessee Valley Authority fund, except non-power programs and activities (64–4110–0–3–999);

United States Enrichment Corporation;

Washington Metropolitan Area Transit Authority, interest

payments (46–0300–0–1–401);

Western Area Power Administration, Construction, rehabilitation, operations, and maintenance (89–5068–0–2–271); and

Western Area Power Administration, Colorado River basins

power marketing fund (89–4452–0–3–271).

(B) The following budget accounts and activities shall be exempt

from reduction under any order issued under this subchapter:

Black lung benefits (20–8144–0–7–601);

Central Intelligence Agency retirement and disability system

fund (56–3400–0–1–054);

Civil service retirement and disability fund (24–8135–0–7–

602);

Comptrollers general retirement system (05–0107–0–1–801);

Court of Federal Claims Judges’ Retirement Fund (10–8124–

0–7–602);

Foreign service retirement and disability fund (19–8186–0–

7–602);

Judicial survivors’ annuities fund (10–8110–0–7–602);

Judicial Officers’ Retirement Fund (10–8122–0–7–602);

Longshoremen’s and harborworkers’ compensation benefits

(16–9971–0–7–601);

Military retirement fund (97–8097–0–7–602);

National Oceanic and Atmospheric Administration retirement (13–1450–0–1–306);

Pensions for former Presidents (47–0105–0–1–802);

Railroad retirement tier II (60–8011–0–7–601);

Railroad supplemental annuity pension fund (60–8012–0–7–

602);

Retired pay, Coast Guard (69–0241–0–1–403);

Retirement pay and medical benefits for commissioned officers, Public Health Service (75–0379–0–1–551);

Special benefits, Federal Employees’ Compensation Act (16–

1521–0–1–600);

Special benefits for disabled coal miners (75–0409–0–1–601);
301 Sec. 905 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

Tax Court judges survivors annuity fund (23–8115–0–7–602).

(2) Prior legal obligations of the Government in the following

budget accounts and activities shall be exempt from any order issued under this subchapter:

Agency for International Development, Housing, and other

credit guarantee programs (72–4340–0–3–151);

Agricultural credit insurance fund (12–4140–0–3–351);

Biomass energy development (20–0114–0–1–271);

Check forgery insurance fund (20–4109–0–3–803);

Community development grant loan guarantees (86–0162–0–

1–451);

Credit union share insurance fund (25–4468–0–3–371);

Economic development revolving fund (13–4406–0–3–452);

Employees life insurance fund (24–8424–0–8–602);

Energy security reserve (Synthetic Fuels Corporation) (20–

0112–0–1–271);

Export-Import Bank of the United States, Limitation of program activity (83–4027–0–3–155);

Federal Aviation Administration, Aviation insurance revolving fund (69–4120–0–3–402);

Federal Crop Insurance Corporation fund (12–4085–0–3–

351);

Federal Deposit Insurance Corporation (51–8419–0–8–371);

Federal Emergency Management Agency, National flood insurance fund (58–4236–0–3–453);

Federal Emergency Management Agency, National insurance

development fund (58–4235–0–3–451);

Federal Housing Administration fund (86–4070–0–3–371);

Federal ship financing fund (69–4301–0–3–403);

Federal ship financing fund, fishing vessels (13–4417–0–3–

376);

Geothermal resources development fund (89–0206–0–1–271);

Government National Mortgage Association, Guarantees of

mortgage-backed securities (86–4238–0–3–371);

Health education loans (75–4307–0–3–553);

Homeowners assistance fund, Defense (97–4090–0–3–051);

Indian loan guarantee and insurance fund (14–4410–0–3–

452);

International Trade Administration, Operations and administration (13–1250–0–1–376);

Low-rent public housing, Loans and other expenses (86–

4098–0–3–604);

Maritime Administration, War-risk insurance revolving fund

(69–4302–0–3–403);

Overseas Private Investment Corporation (71–4030–0–3–

151);

Pension Benefit Guaranty Corporation fund (16–4204–0–3–

601);

Rail service assistance (69–0122–0–1–401);

Railroad rehabilitation and improvement financing fund (69–

4411–0–3–401);

Rural development insurance fund (12–4155–0–3–452);

Rural electric and telephone revolving fund (12–4230–8–3–

271);
Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 302

Rural housing insurance fund (12–4141–0–3–371);

Small Business Administration, Business loan and investment fund (73–4154–0–3–376);

Small Business Administration, Lease guarantees revolving

fund (73–4157–0–3–376);

Small Business Administration, Pollution control equipment

contract guarantee revolving fund (73–4147–0–3–376);

Small Business Administration, Surety bond guarantees revolving fund (73–4156–0–3–376);

Department of Veterans Affairs, Loan guaranty revolving

fund (36–4025–0–3–704); and

Department of Veterans Affairs, Servicemen’s group life insurance fund (36–4009–0–3–701).

(h) LOW-INCOME PROGRAMS.—The following programs shall be

exempt from reduction under any order issued under this subchapter:

Aid to families with dependent children (75–0412–0–1–609);

Child nutrition (12–3539–0–1–605);

Commodity supplemental food program (12–3512–0–1–605);

Food stamp programs (12–3505–0–1–605 and 12–3550–0–1–

605);

Grants to States for Medicaid (75–0512–0–1–551);

Supplemental Security Income Program (75–0406–0–1–609);

and

Women, infants, and children program (12–3510–0–1–605).

(i) OPTIONAL EXEMPTION OF MILITARY PERSONNEL.—

(1) The President may, with respect to any military personnel account, exempt that account from sequestration or provide

for a lower uniform percentage reduction than would otherwise

apply.

(2) The President may not use the authority provided by

paragraph (1) unless he notifies the Congress of the manner in

which such authority will be exercised on or before the initial

snapshot date for the budget year.

(j) IDENTIFICATION OF PROGRAMS.—For purposes of subsections

(g) and (h) of this section, programs are identified by the designated budget account identification code numbers set forth in the

Budget of the United States Government, 1986—Appendix.

SEC. 906. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

(a) AUTOMATIC SPENDING INCREASES.—Automatic spending increases are increases in outlays due to changes in indexes in the

following programs:

(1) National Wool Act [7 U.S.C.A. Sec. 1781 et seq.];

(2) Special milk program; and

(3) Vocational rehabilitation basic State grants.

In those programs all amounts other than the automatic spending

increases shall be exempt from reduction under any order issued

under this subchapter.

(b) EFFECT OF ORDERS ON THE GUARANTEED STUDENT LOAN PROGRAM.—

(1) Any reductions which are required to be achieved from

the student loan programs operated pursuant to part B of title

IV of the Higher Education Act of 1965 [20 U.S.C.A. Sec. 1071
303 Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

et seq.], as a consequence of an order issued pursuant to section 904 of this title, shall be achieved only from loans described in paragraphs (2) and (3) by the application of the

measures described in such paragraphs.

(2) For any loan made during the period beginning on the

date that an order issued under section 904 of this title takes

effect with respect to a fiscal year and ending at the close of

such fiscal year, the rate used in computing the special allowance payment pursuant to section 438(b)(2)(A)(iii) of such Act

[20 U.S.C.A. Sec. 1087–1(b)(2)(A)(iii)] for each of the first four

special allowance payments for such loan shall be adjusted by

reducing such rate by the lesser of—

(A) 0.40 percent, or

(B) the percentage by which the rate specified in such

section exceeds 3 percent.

(3) For any loan made during the period beginning on the

date that an order issued under section 904 of this title takes

effect with respect to a fiscal year and ending at the close of

such fiscal year, the origination fee which is authorized to be

collected pursuant to section 438(c)(2) of such Act [20 U.S.C.A.

Sec. 1087–1(c)(2)] shall be increased by 0.50 percent.

(c) TREATMENT OF FOSTER CARE AND ADOPTION ASSISTANCE PRO- GRAMS.—Any order issued by the President under section 904 of

this title shall make the reduction which is otherwise required

under the foster care and adoption assistance programs (established by part E of title IV of the Social Security Act [42 U.S.C.A.

Sec. 670 et seq.]) only with respect to payments and expenditures

made by States in which increases in foster care maintenance payment rates or adoption assistance payment rates (or both) are to

take effect during the fiscal year involved, and only to the extent

that the required reduction can be accomplished by applying a uniform percentage reduction to the Federal matching payments that

each such State would otherwise receive under section 474 of that

Act [42 U.S.C.A. Sec. 674] (for such fiscal year) for that portion of

the State’s payments which is attributable to the increases taking

effect during that year. No State’s matching payments from the

Federal Government for foster care maintenance payments or for

adoption assistance maintenance payments may be reduced by a

percentage exceeding the applicable domestic sequestration percentage. No State may, after December 12, 1985, make any change

in the timetable for making payments under a State plan approved

under part E of title IV of the Social Security Act [42 U.S.C.A. Sec.

670 et seq.] which has the effect of changing the fiscal year in

which expenditures under such part are made.

(d) SPECIAL RULES FOR MEDICARE PROGRAM.—

(1) CALCULATION OF REDUCTION IN INDIVIDUAL PAYMENT

AMOUNTS.—To achieve the total percentage reduction in those

programs required by sections 902 of this title and 903 of this

title, and notwithstanding section 710 of the Social Security

Act [42 U.S.C.A. Sec. 911], OMB shall determine, and the applicable Presidential order under section 904 of this title shall

implement, the percentage reduction that shall apply to payments under the health insurance programs under title XVIII

of the Social Security Act [42 U.S.C.A. Sec. 1395 et seq.] for
Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 304

services furnished after the order is issued, such that the reduction made in payments under that order shall achieve the

required total percentage reduction in those payments for that

fiscal year as determined on a 12-month basis.

(2) TIMING OF APPLICATION OF REDUCTIONS.— (A) IN GENERAL.—Except as provided in subparagraph

(B), if a reduction is made under paragraph (1) in payment

amounts pursuant to a sequestration order, the reduction

shall be applied to payment for services furnished during

the effective period of the order. For purposes of the previous sentence, in the case of inpatient services furnished

for an individual, the services shall be considered to be

furnished on the date of the individual’s discharge from

the inpatient facility.

(B) PAYMENT ON BASIS OF COST REPORTING PERIODS.—In

the case in which payment for services of a provider of

services is made under title XVIII of the Social Security

Act [42 U.S.C.A. Sec. 1395 et seq.] on a basis relating to

the reasonable cost incurred for the services during a cost

reporting period of the provider, if a reduction is made

under paragraph (1), in payment amounts pursuant to a

sequestration order, the reduction shall be applied to payment for costs for such services incurred at any time during each cost reporting period of the provider any part of

which occurs during the effective period of the order, but

only (for each such cost reporting period) in the same proportion as the fraction of the cost reporting period that occurs during the effective period of the order.

(3) NO INCREASE IN BENEFICIARY CHARGES IN ASSIGNMENT-RE- LATED CASES.—If a reduction in payment amounts is made

under paragraph (1) for services for which payment under part

B of title XVIII of the Social Security Act [42 U.S.C.A. Sec.

1395j et seq.] is made on the basis of an assignment described

in section 1842(b)(3)(B)(ii) [42 U.S.C.A. Sec. 1395u(b)(3)(B)(ii)],

in accordance with section 1842(b)(6)(B) [42 U.S.C.A. Sec.

1395u(b)(6)(B)], or under the procedure described in section

1870(f)(1) [42 U.S.C.A Sec. 1395gg(f)(1)], of such Act, the person furnishing the services shall be considered to have accepted payment of the reasonable charge for the services, less any

reduction in payment amount made pursuant to a sequestration order, as payment in full.

(4) NO EFFECT ON COMPUTATION OF ADJUSTED AVERAGE PER

CAPITA COST.—In computing the adjusted average per capita

cost for purposes of section 1876(a)(4) of the Social Security Act

[42 U.S.C.A. Sec. 1395mm(a)(4)], the Secretary of Health and

Human Services shall not take into account any reductions in

payment amounts which have been or may be effected under

this subchapter.

(e) COMMUNITY AND MIGRANT HEALTH CENTERS, INDIAN HEALTH

SERVICES AND FACILITIES, AND VETERAN’S MEDICAL CARE.—

(1) The maximum permissible reduction in budget authority

for any account listed in paragraph (2) for any fiscal year, pursuant to an order issued under section 902 of this title, shall

be—
305 Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(A) 1 percent in the case of the fiscal year 1986, and

(B) 2 percent in the case of any subsequent fiscal year.

(2) The accounts referred to in paragraph (1) are as follows:

(A) Community health centers (75–0350–0–1–550).

(B) Migrant health centers (75–0350–0–1–550).

(C) Indian health facilities (75–0391–0–1–551).

(D) Indian health services (75–0390–0–1–551).

(E) Veterans’ medical care (36–0160–0–1–703).

For purposes of the preceding provisions of this paragraph,

programs are identified by the designated budget account identification code numbers set forth in the Budget of the United

States Government—Appendix.

(f) TREATMENT OF CHILD SUPPORT ENFORCEMENT PROGRAM.— Notwithstanding any change in the display of budget accounts, any

order issued by the President under section 904 of this title shall

accomplish the full amount of any required reduction in expenditures under sections 455 and 458 of the Social Security Act [42

U.S.C.A. Secs. 655 and 658] by reducing the Federal matching rate

for State administrative costs under such program, as specified (for

the fiscal year involved) in section 455(a) of such Act [42 U.S.C.A.

Sec. 655(a)], to the extent necessary to reduce such expenditures by

that amount.

(g) FEDERAL PAY.— (1) IN GENERAL.—For purposes of any order issued under section 904 of this title—

(A) Federal pay under a statutory pay system, and

(B) elements of military pay,

shall be subject to reduction under an order in the same manner as other administrative expense components of the Federal

budget; except that no such order may reduce or have the effect of reducing the rate of pay to which any individual is entitled under any such statutory pay system (as increased by any

amount payable under section 5304 of Title 5, or section 302

of the Federal Employees Pay Comparability Act of 1990) or

the rate of any element of military pay to which any individual

is entitled under Title 37, or any increase in rates of pay which

is scheduled to take effect under section 5303 of Title 5, section

1009 of Title 37, or any other provision of law.

(2) DEFINITIONS.—For purposes of this subsection:

(A) The term ‘‘statutory pay system’’ shall have the

meaning given that term in section 5302(1) of Title 5.

(B) The term ‘‘elements of military pay’’ means—

(i) the elements of compensation of members of the

uniformed services specified in section 1009 of Title

37,

(ii) allowances provided members of the uniformed

services under sections 403a and 405 of such title, and

(iii) cadet pay and midshipman pay under section

203(c) of such title.

(C) The term ‘‘uniformed services’’ shall have the meaning given that term in section 101(3) of Title 37.

(h) TREATMENT OF FEDERAL ADMINISTRATIVE EXPENSES.—

(1) Notwithstanding any other provision of this title, administrative expenses incurred by the departments and agencies,
Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 306

including independent agencies, of the Federal Government in

connection with any program, project, activity, or account shall

be subject to reduction pursuant to an order issued under section 904 of this title, without regard to any exemption, exception, limitation, or special rule which is otherwise applicable

with respect to such program, project, activity, or account

under this subchapter.

(2) Notwithstanding any other provision of law, administrative expenses of any program, project, activity, or account

which is self-supporting and does not receive appropriations

shall be subject to reduction under a sequester order, unless

specifically exempted in this joint resolution.

(3) Payments made by the Federal Government to reimburse

or match administrative costs incurred by a State or political

subdivision under or in connection with any program, project,

activity, or account shall not be considered administrative expenses of the Federal Government for purposes of this section,

and shall be subject to reduction or sequestration under this

subchapter to the extent (and only to the extent) that other

payments made by the Federal Government under or in connection with that program, project, activity, or account are subject to such reduction or sequestration; except that Federal

payments made to a State as reimbursement of administrative

costs incurred by such State under or in connection with the

unemployment compensation programs specified in subsection

(h)(1) of this section shall be subject to reduction or sequestration under this subchapter notwithstanding the exemption otherwise granted to such programs under that subsection.

(4) Notwithstanding any other provision of law, this subsection shall not apply with respect to the following:

(A) Comptroller of the Currency.

(B) Federal Deposit Insurance Corporation.

(C) Office of Thrift Supervision.

(D) Office of Thrift Supervision.

(E) National Credit Union Administration.

(F) National Credit Union Administration, central liquidity facility.

(G) Federal Retirement Thrift Investment Board.

(H) Resolution Funding Corporation.

(I) Resolution Trust Corporation.

(i) TREATMENT OF PAYMENTS AND ADVANCES MADE WITH RESPECT TO UNEMPLOYMENT COMPENSATION PROGRAMS.—

(1) For purposes of section 904 of this title—

(A) any amount paid as regular unemployment compensation by a State from its account in the Unemployment Trust Fund (established by section 904(a) of the Social Security Act [42 U.S.C.A. Sec. 1104(a)]),

(B) any advance made to a State from the Federal unemployment account (established by section 904(g) of such Act

[42 U.S.C.A. Sec. 1104(g)]) under title XII of such Act [42

U.S.C.A. Sec. 1321 et seq.] and any advance appropriated

to the Federal unemployment account pursuant to section

1203 of such Act [42 U.S.C.A. Sec. 1323], and
307 Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(C) any payment made from the Federal Employees

Compensation Account (as established under section 909 of

such Act [42 U.S.C.A. Sec. 1109]) for the purpose of carrying out chapter 85 of Title 5 [5 U.S.C.A. Sec. 8501 et seq.]

and funds appropriated or transferred to or otherwise deposited in such Account, shall not be subject to reduction.

(2)(A) A State may reduce each weekly benefit payment

made under the Federal-State Extended Unemployment Compensation Act of 1970 [26 U.S.C.A. Sec. 3304 note] for any

week of unemployment occurring during any period with respect to which payments are reduced under an order issued

under section 904 of this title by a percentage not to exceed the

percentage by which the Federal payment to the State under

section 204 of such Act is to be reduced for such week as a result of such order.

(B) A reduction by a State in accordance with subparagraph

(A) shall be not be considered as a failure to fulfill the requirements of section 3304(a)(11) of the Internal Revenue Code of

1954 [26 U.S.C.A. Sec. 3304(A)(11)].

(j) COMMODITY CREDIT CORPORATION.— (1) POWERS AND AUTHORITIES OF COMMODITY CREDIT COR- PORATION.—This title shall not restrict the Commodity Credit

Corporation in the discharge of its authority and responsibility

as a corporation to buy and sell commodities in world trade, to

use the proceeds as a revolving fund to meet other obligations

and otherwise operate as a corporation, the purpose for which

it was created.

(2) REDUCTION IN PAYMENTS MADE UNDER CONTRACTS.— (A) Payments and loan eligibility under any contract entered into with a person by the Commodity Credit Corporation prior to the time an order has been issued under

section 904 of this title shall not be reduced by an order

subsequently issued. Subject to subparagraph (B), after an

order is issued under such section for a fiscal year, any

cash payments made by the Commodity Credit Corporation—

(i) under the terms of any one-year contract entered

into in such fiscal year and after the issuance of the

order; and

(ii) out of an entitlement account,

to any person (including any producer, lender, or guarantee entity) shall be subject to reduction under the order.

(B) Each contract entered into with producers or producer cooperatives with respect to a particular crop of a

commodity and subject to reduction under subparagraph

(A) shall be reduced in accordance with the same terms

and conditions. If some, but not all, contracts applicable to

a crop of a commodity have been entered into prior to the

issuance of an order under section 904 of this title, the

order shall provide that the necessary reduction in payments under contracts applicable to the commodity be uniformly applied to all contracts for the next succeeding crop

of the commodity, under the authority provided in paragraph (3).
Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 308

(3) DELAYED REDUCTION IN OUTLAYS PERMISSIBLE.—Notwithstanding any other provision of this joint resolution, if an order

under section 904 of this title is issued with respect to a fiscal

year, any reduction under the order applicable to contracts described in paragraph (1) may provide for reductions in outlays

for the account involved to occur in the fiscal year following the

fiscal year to which the order applies. No other account, or

other program, project, or activity, shall bear an increased reduction for the fiscal year to which the order applies as a result of the operation of the preceding sentence.

(4) UNIFORM PERCENTAGE RATE OF REDUCTION AND OTHER

LIMITATIONS.—All reductions described in paragraph (2) which

are required to be made in connection with an order issued

under section 904 of this title with respect to a fiscal year—

(A) shall be made so as to ensure that outlays for each

program, project, activity, or account involved are reduced

by a percentage rate that is uniform for all such programs,

projects, activities, and accounts, and may not be made so

as to achieve a percentage rate of reduction in any such

item exceeding the rate specified in the order; and

(B) with respect to commodity price support and income

protection programs, shall be made in such manner and

under such procedures as will attempt to ensure that—

(i) uncertainty as to the scope of benefits under any

such program is minimized;

(ii) any instability in market prices for agricultural

commodities resulting from the reduction is minimized; and

(iii) normal production and marketing relationships

among agricultural commodities (including both contract and non-contract commodities) are not distorted.

In meeting the criterion set out in clause (iii) of subparagraph (B) of the preceding sentence, the President shall

take into consideration that reductions under an order

may apply to programs for two or more agricultural commodities that use the same type of production or marketing resources or that are alternative commodities among

which a producer could choose in making annual production decisions.

(5) NO DOUBLE REDUCTION.—No agricultural price support or

income protection program that is subject to reduction under

an order issued under section 904 of this title for a fiscal year

may be subject, as well, to modification or suspension under

such order as an automatic spending increase.

(6) CERTAIN AUTHORITY NOT TO BE LIMITED.—Nothing in this

joint resolution shall limit or reduce, in any way, any appropriation that provides the Commodity Credit Corporation with

budget authority to cover the Corporation’s net realized losses.

(k) SPECIAL RULES FOR THE JOBS PORTION OF AFDC.—

(1) FULL AMOUNT OF SEQUESTRATION REQUIRED.—Any order

issued by the President under section 904 of this title shall accomplish the full amount of any required sequestration of the

job opportunities and basic skills training program under section 402(a)(19) [42 U.S.C.A. Sec. 602(a)(19)], and part F of title
309 Sec. 906 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

VI, of the Social Security Act, in the manner specified in this

subsection. Such an order may not reduce any Federal matching rate pursuant to section 403(l) of the Social Security Act

[42 U.S.C.A. Sec. 603(l)].

(2) NEW ALLOTMENT FORMULA.— (A) GENERAL RULE.—Notwithstanding section 403(k) of

the Social Security Act [42 U.S.C.A. Sec. 603(k)], each

State’s percentage share of the amount available after sequestration for direct spending pursuant to section 403(l)

of such Act [42 U.S.C.A. Sec. 603(l)] for the fiscal year to

which the sequestration applies shall be equal to—

(I) that percentage of the total amount paid to the

States pursuant to such section 403(l) for the prior fiscal year that is represented by the amount paid to

such State pursuant to such section 403(l) [42

U.S.C.A. Sec. 603(l)] for the prior fiscal year; or

(II) the amount that would have been allotted to

such State pursuant to such section 403(k) [42

U.S.C.A. Sec. 603(k)] had the sequestration not been

in effect.

(B) REALLOTMENT OF AMOUNTS REMAINING UNALLOTTED

AFTER APPLICATION OF GENERAL RULE.—Any amount made

available after sequestration for direct spending pursuant

to section 403(l) of the Social Security Act [42 U.S.C.A.

Sec. 603(l)] for the fiscal year to which the sequestration

applies that remains unallotted as a result of subparagraph (A) of this paragraph shall be allotted among the

States in proportion to the absolute difference between the

amount allotted, respectively, to each State as a result of

such subparagraph and the amount that would have been

allotted to such State pursuant to section 403(k) [42

U.S.C.A. Sec. 603(k)] of such Act had the sequestration not

been in effect, except that a State may not be allotted an

amount under this subparagraph that results in a total allotment to the State under this paragraph of more than

the amount that would have been allotted to such State

pursuant to such section 403(k) [42 U.S.C.A. Sec. 603(k)]

had the sequestration not been in effect.

(l) EFFECTS OF SEQUESTRATION.—The effects of sequestration

shall be as follows:

(1) Budgetary resources sequestered from any account other

than a trust or special fund account shall be permanently cancelled.

(2) Except as otherwise provided, the same percentage sequestration shall apply to all programs, projects, and activities

within a budget account (with programs, projects, and activities as delineated in the appropriation Act or accompanying report for the relevant fiscal year covering that account, or for

accounts not included in appropriation Acts, as delineated in

the most recently submitted President’s budget).

(3) Administrative regulations or similar actions implementing a sequestration shall be made within 120 days of the sequestration order. To the extent that formula allocations differ

at different levels of budgetary resources within an account,
Sec. 907 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 310

program, project, or activity, the sequestration shall be interpreted as producing a lower total appropriation, with the remaining amount of the appropriation being obligated in a manner consistent with program allocation formulas in substantive

law.

(4) Except as otherwise provided, obligations in sequestered

accounts shall be reduced only in the fiscal year in which a sequester occurs.

(5) If an automatic spending increase is sequestered, the increase (in the applicable index) that was disregarded as a result of that sequestration shall not be taken into account in

any subsequent fiscal year.

(6) Except as otherwise provided, sequestration in trust and

special fund accounts for which obligations are indefinite shall

be taken in a manner to ensure that obligations in the fiscal

year of a sequestration are reduced, from the level that would

actually have occurred, by the applicable sequestration percentage.

SEC. 907. THE BASELINE.

(a) IN GENERAL.—For any budget year, the baseline refers to a

projection of current-year levels of new budget authority, outlays,

revenues, and the surplus or deficit into the budget year and the

outyears based on laws enacted through the applicable date.

(b) DIRECT SPENDING AND RECEIPTS.—For the budget year and

each outyear, the baseline shall be calculated using the following

assumptions:

(1) IN GENERAL.—Laws providing or creating direct spending

and receipts are assumed to operate in the manner specified in

those laws for each such year and funding for entitlement authority is assumed to be adequate to make all payments required by those laws.

(2) EXCEPTIONS.—

(A) No program with estimated current-year outlays

greater than $50 million shall be assumed to expire in the

budget year or outyears.

(B) The increase for veterans’ compensation for a fiscal

year is assumed to be the same as that required by law

for veterans’ pensions unless otherwise provided by law

enacted in that session.

(C) Excise taxes dedicated to a trust fund, if expiring,

are assumed to be extended at current rates.

(3) HOSPITAL INSURANCE TRUST FUND.—Notwithstanding any

other provision of law, the receipts and disbursements of the

Hospital Insurance Trust Fund shall be included in all calculations required by this Act.

(c) DISCRETIONARY APPROPRIATIONS.—For the budget year and

each outyear, the baseline shall be calculated using the following

assumptions regarding all amounts other than those covered by

subsection (b) of this section:

(1) INFLATION OF CURRENT-YEAR APPROPRIATIONS.—Budgetary resources other than unobligated balances shall be at the

level provided for the budget year in full-year appropriation

Acts. If for any account a full-year appropriation has not yet
311 Sec. 907 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

been enacted, budgetary resources other than unobligated balances shall be at the level available in the current year, adjusted sequentially and cumulatively for expiring housing contracts as specified in paragraph (2), for social insurance administrative expenses as specified in paragraph (3), to offset pay

absorption and for pay annualization as specified in paragraph

(4), for inflation as specified in paragraph (5), and to account

for changes required by law in the level of agency payments for

personnel benefits other than pay.

(2) EXPIRING HOUSING CONTRACTS.—New budget authority to

renew expiring multiyear subsidized housing contracts shall be

adjusted to reflect the difference in the number of such contracts that are scheduled to expire in that fiscal year and the

number expiring in the current year, with the per-contract renewal cost equal to the average current-year cost of renewal

contracts.

(3) SOCIAL INSURANCE ADMINISTRATIVE EXPENSES.—Budgetary resources for the administrative expenses of the following

trust funds shall be adjusted by the percentage change in the

beneficiary population from the current year to that fiscal year:

the Federal Hospital Insurance Trust Fund, the Supplementary Medical Insurance Trust Fund, the Unemployment

Trust Fund, and the railroad retirement account.

(4) PAY ANNUALIZATION; OFFSET TO PAY ABSORPTION.—Current-year new budget authority for Federal employees shall be

adjusted to reflect the full 12-month costs (without absorption)

of any pay adjustment that occurred in that fiscal year.

(5) INFLATORS.—The inflator used in paragraph (1) to adjust

budgetary resources relating to personnel shall be the percent

by which the average of the Bureau of Labor Statistics Employment Cost Index (wages and salaries, private industry

workers) for that fiscal year differs from such index for the current year. The inflator used in paragraph (1) to adjust all other

budgetary resources shall be the percent by which the average

of the estimated gross national product fixed-weight price

index for that fiscal year differs from the average of such estimated index for the current year.

(6) CURRENT-YEAR APPROPRIATIONS.—If, for any account, a

continuing appropriation is in effect for less than the entire

current year, then the current-year amount shall be assumed

to equal the amount that would be available if that continuing

appropriation covered the entire fiscal year. If law permits the

transfer of budget authority among budget accounts in the current year, the current-year level for an account shall reflect

transfers accomplished by the submission of, or assumed for

the current year in, the President’s original budget for the

budget year.

(d) UP-TO-DATE CONCEPTS.—In deriving the baseline for any

budget year or outyear, current-year amounts shall be calculated

using the concepts and definitions that are required for that budget

year.

(e) SALE OF ASSETS OR PREPAYMENT OF LOANS.—The sale of an

asset or prepayment of a loan shall not alter the deficit or produce

any net deficit reduction in the budget baseline, except that the
Sec. 907A CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 312

budget baseline estimate shall include asset sales mandated by law

before September 18, 1987, and routine, ongoing asset sales and

loan prepayments at levels consistent with agency operations in fiscal year 1986.

SEC. 907A. SUSPENSION IN THE EVENT OF WAR OR LOW GROWTH.

(a) PROCEDURES IN THE EVENT OF A LOW GROWTH REPORT.—

(1) TRIGGER.—Whenever CBO issues a low-growth report

under section 254(j), the Majority Leader of the House of Representatives may, and the Majority Leader of the Senate shall,

introduce a joint resolution (in the form set forth in paragraph

(2)) declaring that the conditions specified in section 254(j) are

met and suspending the relevant provisions of this title, titles

III and VI of the Congressional Budget Act of 1974, and section

1103 of title 31, United States Code.

(2) FORM OF JOINT RESOLUTION.—

(A) The matter after the resolving clause in any joint

resolution introduced pursuant to paragraph (1) shall be

as follows: That the Congress declares that the conditions

specified in section 254(j) of the Balanced Budget and

Emergency Deficit Control Act of 1985 are met, and the

implementation of the Congressional Budget and Impoundment Control Act of 1974, chapter 11 of title 31, United

States Code, and part C of the Balanced Budget and Emergency Deficit Control Act of 1985 are modified as described

in section 258(b) of the Balanced Budget and Emergency

Deficit Control Act of 1985.

(B) The title of the joint resolution shall be ‘‘Joint resolution suspending certain provisions of law pursuant to section 258(a)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985.’’; and the joint resolution shall not

contain any preamble.

(3) COMMITTEE ACTION.—Each joint resolution introduced

pursuant to paragraph (1) shall be referred to the appropriate

committees of the House of Representatives or the Committee

on the Budget of the Senate, as the case may be; and such

Committee shall report the joint resolution to its House without amendment on or before the fifth day on which such House

is in session after the date on which the joint resolution is introduced. If the Committee fails to report the joint resolution

within the five-day period referred to in the preceding sentence, it shall be automatically discharged from further consideration of the joint resolution, and the joint resolution shall be

placed on the appropriate calendar.

(4) CONSIDERATION OF JOINT RESOLUTION.—

(A) A vote on final passage of a joint resolution reported

to the Senate or discharged pursuant to paragraph (3)

shall be taken on or before the close of the fifth calendar

day of session after the date on which the joint resolution

is reported or after the Committee has been discharged

from further consideration of the joint resolution. If prior

to the passage by one House of a joint resolution of that

House, that House receives the same joint resolution from

the other House, then—
313 Sec. 907A CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(i) the procedure in that House shall be the same as

if no such joint resolution had been received from the

other House, but

(ii) the vote on final passage shall be on the joint

resolution of the other House.

When the joint resolution is agreed to, the Clerk of the

House of Representatives (in the case of a House joint resolution agreed to in the House of Representatives) or the

Secretary of the Senate (in the case of a Senate joint resolution agreed to in the Senate) shall cause the joint resolution to be engrossed, certified, and transmitted to the other

House of the Congress as soon as practicable.

(B) (i) In the Senate, a joint resolution under this paragraph shall be privileged. It shall not be in order to move

to reconsider the vote by which the motion is agreed to or

disagreed to.

(ii) Debate in the Senate on a joint resolution under this

paragraph, and all debatable motions and appeals in connection therewith, shall be limited to not more than five

hours. The time shall be equally divided between, and controlled by, the majority leader and the minority leader or

their designees.

(iii) Debate in the Senate on any debatable motion or appeal in connection with a joint resolution under this paragraph shall be limited to not more than one hour, to be

equally divided between, and controlled by, the mover and

the manager of the joint resolution, except that in the

event the manager of the joint resolution is in favor of any

such motion or appeal, the time in opposition thereto shall

be controlled by the minority leader or his designee.

(iv) A motion in the Senate to further limit debate on a

joint resolution under this paragraph is not debatable. A

motion to table or to recommit a joint resolution under this

paragraph is not in order.

(C) No amendment to a joint resolution considered under

this paragraph shall be in order in the Senate.

(b) SUSPENSION OF SEQUESTRATION PROCEDURES.—Upon the enactment of a declaration of war or a joint resolution described in

subsection (a)—

(1) the subsequent issuance of any sequestration report or

any sequestration order is precluded;

(2) sections 302(f), 310(d), 311(a), and title VI of the Congressional Budget Act of 1974 are suspended; and

(3) section 1103 of title 31, United States Code, is suspended.

(c) RESTORATION OF SEQUESTRATION PROCEDURES.—

(1) In the event of a suspension of sequestration procedures

due to a declaration of war, then, effective with the first fiscal

year that begins in the session after the state of war is concluded by Senate ratification of the necessary treaties, the provisions of subsection (b) triggered by that declaration of war

are no longer effective.

(2) In the event of a suspension of sequestration procedures

due to the enactment of a joint resolution described in subsection (a), then, effective with regard to the first fiscal year
Sec. 907B CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 314

beginning at least 12 months after the enactment of that resolution, the provisions of subsection (b) triggered by that resolution are no longer effective.

SEC. 907B. MODIFICATION OF PRESIDENTIAL ORDER.

(a) INTRODUCTION OF JOINT RESOLUTION.—At any time after the

Director of OMB issues a final sequestration report under section

904 of this title for a fiscal year, but before the close of the twentieth calendar day of the session of Congress beginning after the

date of issuance of such report, the majority leader of either House

of Congress may introduce a joint resolution which contains provisions directing the President to modify the most recent order issued

under section 904 of this title or provide an alternative to reduce

the deficit for such fiscal year. After the introduction of the first

such joint resolution in either House of Congress in any calendar

year, then no other joint resolution introduced in such House in

such calendar year shall be subject to the procedures set forth in

this section.

(b) PROCEDURES FOR CONSIDERATION OF JOINT RESOLUTIONS.—

(1) REFERRAL TO COMMITTEE.—A joint resolution introduced

in the Senate under subsection (a) of this section shall not be

referred to a committee of the Senate and shall be placed on

the calendar pending disposition of such joint resolution in accordance with this subsection.

(2) CONSIDERATION IN THE SENATE.—On or after the third

calendar day (excluding Saturdays, Sundays, and legal holidays) beginning after a joint resolution is introduced under

subsection (a) of this section, notwithstanding any rule or

precedent of the Senate, including Rule XXII of the Standing

Rules of the Senate, it is in order (even though a previous motion to the same effect has been disagreed to) for any Member

of the Senate to move to proceed to the consideration of the

joint resolution. The motion is not in order after the eighth calendar day (excluding Saturdays, Sundays, and legal holidays)

beginning after a joint resolution (to which the motion applies)

is introduced. The joint resolution is privileged in the Senate.

A motion to reconsider the vote by which the motion is agreed

to or disagreed to shall not be in order. If a motion to proceed

to the consideration of the joint resolution is agreed to, the

Senate shall immediately proceed to consideration of the joint

resolution without intervening motion, order, or other business,

and the joint resolution shall remain the unfinished business

of the Senate until disposed of.

(3) DEBATE IN THE SENATE.—

(A) In the Senate, debate on a joint resolution introduced

under subsection (a) of this section, amendments thereto,

and all debatable motions and appeals in connection therewith shall be limited to not more than 10 hours, which

shall be divided equally between the majority leader and

the minority leader (or their designees).

(B) A motion to postpone, or a motion to proceed to the

consideration of other business is not in order. A motion to

reconsider the vote by which the joint resolution is agreed
315 Sec. 907B CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

to or disagreed to is not in order, and a motion to recommit the joint resolution is not in order.

(C) (i) No amendment that is not germane to the provisions of the joint resolution or to the order issued under

section 904 of this title shall be in order in the Senate. In

the Senate, an amendment, any amendment to an amendment, or any debatable motion or appeal is debatable for

not to exceed 30 minutes to be equally divided between,

and controlled by, the mover and the majority leader (or

their designees), except that in the event that the majority

leader favors the amendment, motion, or appeal, the minority leader (or the minority leader’s designee) shall control the time in opposition to the amendment, motion, or

appeal.

(ii) In the Senate, an amendment that is otherwise in

order shall be in order notwithstanding the fact that it

amends the joint resolution in more than one place or

amends language previously amended. It shall not be in

order in the Senate to vote on the question of agreeing to

such a joint resolution or any amendment thereto unless

the figures then contained in such joint resolution or

amendment are mathematically consistent.

(4) VOTE ON FINAL PASSAGE.—Immediately following the conclusion of the debate on a joint resolution introduced under

subsection (a) of this section, a single quorum call at the conclusion of the debate if requested in accordance with the rules

of the Senate, and the disposition of any pending amendments

under paragraph (3), the vote on final passage of the joint resolution shall occur.

(5) APPEALS.—Appeals from the decisions of the Chair shall

be decided without debate.

(6) CONFERENCE REPORTS.—In the Senate, points of order

under titles III, IV, and VI of the Congressional Budget Act of

1974 [2 U.S.C.A. Secs. 631 et seq., 651 et seq., and 665 et seq.]

are applicable to a conference report on the joint resolution or

any amendments in disagreement thereto.

(7) RESOLUTION FROM OTHER HOUSE.—If, before the passage

by the Senate of a joint resolution of the Senate introduced

under subsection (a) of this section, the Senate receives from

the House of Representatives a joint resolution introduced

under subsection (a) of this section, then the following procedures shall apply:

(A) The joint resolution of the House of Representatives

shall not be referred to a committee and shall be placed on

the calendar.

(B) With respect to a joint resolution introduced under

subsection (a) of this section in the Senate—

(i) the procedure in the Senate shall be the same as

if no joint resolution had been received from the

House; but

(ii)(I) the vote on final passage shall be on the joint

resolution of the House if it is identical to the joint

resolution then pending for passage in the Senate; or
Sec. 907C CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 316

(II) if the joint resolution from the House is not

identical to the joint resolution then pending for passage in the Senate and the Senate then passes the

Senate joint resolution, the Senate shall be considered

to have passed the House joint resolution as amended

by the text of the Senate joint resolution.

(C) Upon disposition of the joint resolution received from

the House, it shall no longer be in order to consider the

resolution originated in the Senate.

(8) SENATE ACTION ON HOUSE RESOLUTION.—If the Senate receives from the House of Representatives a joint resolution introduced under subsection (a) of this section after the Senate

has disposed of a Senate originated resolution which is identical to the House passed joint resolution, the action of the

Senate with regard to the disposition of the Senate originated

joint resolution shall be deemed to be the action of the Senate

with regard to the House originated joint resolution. If it is not

identical to the House passed joint resolution, then the Senate

shall be considered to have passed the joint resolution of the

House as amended by the text of the Senate joint resolution.

SEC. 907C. FLEXIBILITY AMONG DEFENSE PROGRAMS, PROJECTS,

AND ACTIVITIES.

(a) REDUCTIONS BEYOND AMOUNT SPECIFIED IN PRESIDENTIAL

ORDER.—Subject to subsections (b), (c), and (d) of this section, new

budget authority and unobligated balances for any programs,

projects, or activities within major functional category 050 (other

than a military personnel account) may be further reduced beyond

the amount specified in an order issued by the President under section 904 of this title for such fiscal year. To the extent such additional reductions are made and result in additional outlay reductions, the President may provide for lesser reductions in new budget authority and unobligated balances for other programs, projects,

or activities within major functional category 050 for such fiscal

year, but only to the extent that the resulting outlay increases do

not exceed the additional outlay reductions, and no such program,

project, or activity may be increased above the level actually made

available by law in appropriation Acts (before taking sequestration

into account). In making calculations under this subsection, the

President shall use account outlay rates that are identical to those

used in the report by the Director of OMB under section 904 of this

title.

(b) BASE CLOSURES PROHIBITED.—No actions taken by the President under subsection (a) of this section for a fiscal year may result

in a domestic base closure or realignment that would otherwise be

subject to section 2687 of Title 10.

(c) REPORT AND JOINT RESOLUTION REQUIRED.—The President

may not exercise the authority provided by this paragraph for a fiscal year unless—

(1) the President submits a single report to Congress specifying, for each account, the detailed changes proposed to be made

for such fiscal year pursuant to this section;

(2) that report is submitted within 5 calendar days of the

start of the next session of Congress; and
317 Sec. 907C CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(3) a joint resolution affirming or modifying the changes proposed by the President pursuant to this paragraph becomes

law.

(d) INTRODUCTION OF JOINT RESOLUTION.—Within 5 calendar

days of session after the President submits a report to Congress

under subsection (c)(1) of this section for a fiscal year, the majority

leader of each House of Congress shall (by request) introduce a

joint resolution which contains provisions affirming the changes

proposed by the President pursuant to this paragraph.

(e) FORM AND TITLE OF JOINT RESOLUTION.— (1) The matter after the resolving clause in any joint resolution introduced pursuant to subsection (d) of this section shall

be as follows: ‘‘That the report of the President as submitted

on [Insert Date] under section 258B is hereby approved.’’

(2) The title of the joint resolution shall be ‘‘Joint resolution

approving the report of the President submitted under section

258B of the Balanced Budget and Emergency Deficit Control

Act of 1985.’’

(3) Such joint resolution shall not contain any preamble.

(f) CALENDARING AND CONSIDERATION OF JOINT RESOLUTION IN

THE SENATE.— (1) A joint resolution introduced in the Senate under subsection (d) of this section shall be referred to the Committee on

Appropriations, and if not reported within 5 calendar days (excluding Saturdays, Sundays, and legal holidays) from the date

of introduction shall be considered as having been discharged

therefrom and shall be placed on the appropriate calendar

pending disposition of such joint resolution in accordance with

this subsection. In the Senate, no amendment proposed in the

Committee on Appropriations shall be in order other than an

amendment (in the nature of a substitute) that is germane or

relevant to the provisions of the joint resolution or to the order

issued under section 904 of this title. For purposes of this paragraph, an amendment shall be considered to be relevant if it

relates to function 050 (national defense).

(2) On or after the third calendar day (excluding Saturdays,

Sundays, and legal holidays) beginning after a joint resolution

is placed on the Senate calendar, notwithstanding any rule or

precedent of the Senate, including Rule XXII of the Standing

Rules of the Senate, it is in order (even though a previous motion to the same effect has been disagreed to) for any Member

of the Senate to move to proceed to the consideration of the

joint resolution. The motion is not in order after the eighth calendar day (excluding Saturdays, Sundays, and legal holidays)

beginning after such joint resolution is placed on the appropriate calendar. The motion is not debatable. The joint resolution is privileged in the Senate. A motion to reconsider the vote

by which the motion is agreed to or disagreed to shall not be

in order. If a motion to proceed to the consideration of the joint

resolution is agreed to, the Senate shall immediately proceed

to consideration of the joint resolution without intervening motion, order, or other business, and the joint resolution shall remain the unfinished business of the Senate until disposed of.

(g) DEBATE OF JOINT RESOLUTION; MOTIONS.—
Sec. 907C CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 318

(1) In the Senate, debate on a joint resolution introduced

under subsection (d) of this section, amendments thereto, and

all debatable motions and appeals in connection therewith

shall be limited to not more than 10 hours, which shall be divided equally between the majority leader and the minority

leader (or their designees).

(2) A motion to postpone, or a motion to proceed to the consideration of other business is not in order. A motion to reconsider the vote by which the joint resolution is agreed to or disagreed to is not in order. In the Senate, a motion to recommit

the joint resolution is not in order.

(h) AMENDMENT OF JOINT RESOLUTION.—

(1) No amendment that is not germane or relevant to the

provisions of the joint resolution or to the order issued under

section 904 of this title shall be in order in the Senate. For

purposes of this paragraph, an amendment shall be considered

to be relevant if it relates to function 050 (national defense).

In the Senate, an amendment, any amendment to an amendment, or any debatable motion or appeal is debatable for not

to exceed 30 minutes to be equally divided between, and controlled by, the mover and the majority leader (or their designees), except that in the event that the majority leader favors

the amendment, motion, or appeal, the minority leader (or the

minority leader’s designee) shall control the time in opposition

to the amendment, motion, or appeal.

(2) In the Senate, an amendment that is otherwise in order

shall be in order notwithstanding the fact that it amends the

joint resolution in more than one place or amends language

previously amended, so long as the amendment makes or

maintains mathematical consistency. It shall not be in order in

the Senate to vote on the question of agreeing to such a joint

resolution or any amendment thereto unless the figures then

contained in such joint resolution or amendment are mathematically consistent.

(3) It shall not be in order in the Senate to consider any

amendment to any joint resolution introduced under subsection

(d) of this section or any conference report thereon if such

amendment or conference report would have the effect of decreasing any specific budget outlay reductions below the level

of such outlay reductions provided in such joint resolution unless such amendment or conference report makes a reduction

in other specific budget outlays at least equivalent to any increase in outlays provided by such amendment or conference

report.

(4) For purposes of the application of paragraph (3), the level

of outlays and specific budget outlay reductions provided in an

amendment shall be determined on the basis of estimates

made by the Committee on the Budget of the Senate.

(i) VOTE ON FINAL PASSAGE OF JOINT RESOLUTION.—Immediately

following the conclusion of the debate on a joint resolution introduced under subsection (d) of this section, a single quorum call at

the conclusion of the debate if requested in accordance with the

rules of the Senate, and the disposition of any pending amend-
319 Sec. 907D CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

ments under subsection (h) of this section, the vote on final passage

of the joint resolution shall occur.

(j) APPEAL FROM DECISION OF CHAIR.—Appeals from the decisions of the Chair relating to the application of the rules of the

Senate to the procedure relating to a joint resolution described in

subsection (d) of this section shall be decided without debate.

(k) CONFERENCE REPORTS.—In the Senate, points of order under

titles III [2 U.S.C.A. Sec. 631 et seq.] and IV [2 U.S.C.A. Sec. 651

et seq.] of the Congressional Budget Act of 1974 (including points

of order under sections 302(c) [2 U.S.C.A. Sec. 633(c)], 303(a) [2

U.S.C.A. Sec. 634(a)], 306 [2 U.S.C.A. Sec. 637], and 401(b)(1) [2

U.S.C.A. Sec. 651(b)(1)]) are applicable to a conference report on

the joint resolution or any amendments in disagreement thereto.

(l) RESOLUTION FROM OTHER HOUSE.—If, before the passage by

the Senate of a joint resolution of the Senate introduced under subsection (d) of this section, the Senate receives from the House of

Representatives a joint resolution introduced under subsection (d)

of this section, then the following procedures shall apply:

(1) The joint resolution of the House of Representatives shall

not be referred to a committee.

(2) With respect to a joint resolution introduced under subsection (d) of this section in the Senate—

(A) the procedure in the Senate shall be the same as if

no joint resolution had been received from the House; but

(B)(i) the vote on final passage shall be on the joint resolution of the House if it is identical to the joint resolution

then pending for passage in the Senate; or

(ii) if the joint resolution from the House is not identical

to the joint resolution then pending for passage in the Senate and the Senate then passes the Senate joint resolution,

the Senate shall be considered to have passed the House

joint resolution as amended by the text of the Senate joint

resolution.

(3) Upon disposition of the joint resolution received from the

House, it shall no longer be in order to consider the joint resolution originated in the Senate.

(m) SENATE ACTION ON HOUSE RESOLUTION.—If the Senate receives from the House of Representatives a joint resolution introduced under subsection (d) of this section after the Senate has disposed of a Senate originated joint resolution which is identical to

the House passed joint resolution, the action of the Senate with regard to the disposition of the Senate originated joint resolution

shall be deemed to be the action of the Senate with regard to the

House originated joint resolution. If it is not identical to the House

passed joint resolution, then the Senate shall be considered to have

passed the joint resolution of the House as amended by the text of

the Senate joint resolution.

SEC. 907D. SPECIAL RECONCILIATION PROCESS.

(a) REPORTING OF RESOLUTIONS AND RECONCILIATION BILLS AND

RESOLUTIONS, IN THE SENATE.—

(1) COMMITTEE ALTERNATIVES TO PRESIDENTIAL ORDER.—

After the submission of an OMB sequestration update report

under section 904 of this title that envisions a sequestration
Sec. 907D CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 320

under section 902 of this title or 903 of this title, each standing

committee of the Senate may, not later than October 10, submit to the Committee on the Budget of the Senate information

of the type described in section 632(d) of this title with respect

to alternatives to the order envisioned by such report insofar

as such order affects laws within the jurisdiction of the committee.

(2) INITIAL BUDGET COMMITTEE ACTION.—After the submission of such a report, the Committee on the Budget of the Senate may, not later than October 15, report to the Senate a resolution. The resolution may affirm the impact of the order envisioned by such report, in whole or in part. To the extent that

any part is not affirmed, the resolution shall state which parts

are not affirmed and shall contain instructions to committees

of the Senate of the type referred to in section 641(a) of this

title, sufficient to achieve at least the total level of deficit reduction contained in those sections which are not affirmed.

(3) RESPONSE OF COMMITTEES.—Committees instructed pursuant to paragraph (2), or affected thereby, shall submit their

responses to the Budget Committee no later than 10 days after

the resolution referred to in paragraph (2) is agreed to, except

that if only one such Committee is so instructed such Committee shall, by the same date, report to the Senate a reconciliation bill or reconciliation resolution containing its recommendations in response to such instructions. A committee

shall be considered to have complied with all instructions to it

pursuant to a resolution adopted under paragraph (2) if it has

made recommendations with respect to matters within its jurisdiction which would result in a reduction in the deficit at

least equal to the total reduction directed by such instructions.

(4) BUDGET COMMITTEE ACTION.—Upon receipt of the recommendations received in response to a resolution referred to

in paragraph (2), the Budget Committee shall report to the

Senate a reconciliation bill or reconciliation resolution, or both,

carrying out all such recommendations without any substantive revisions. In the event that a committee instructed in

a resolution referred to in paragraph (2) fails to submit any

recommendation (or, when only one committee is instructed,

fails to report a reconciliation bill or resolution) in response to

such instructions, the Budget Committee shall include in the

reconciliation bill or reconciliation resolution reported pursuant

to this subparagraph legislative language within the jurisdiction of the noncomplying committee to achieve the amount of

deficit reduction directed in such instructions.

(5) POINT OF ORDER.—It shall not be in order in the Senate

to consider any reconciliation bill or reconciliation resolution

reported under paragraph (4) with respect to a fiscal year, any

amendment thereto, or any conference report thereon if—

(A) the enactment of such bill or resolution as reported;

(B) the adoption and enactment of such amendment; or

(C) the enactment of such bill or resolution in the form

recommended in such conference report,

would cause the amount of the deficit for such fiscal year to exceed the maximum deficit amount for such fiscal year, unless
321 Sec. 908 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

the low-growth report submitted under section 904 of this title

projects negative real economic growth for such fiscal year, or

for each of any two consecutive quarters during such fiscal

year.

(6) TREATMENT OF CERTAIN AMENDMENTS.—In the Senate, an

amendment which adds to a resolution reported under paragraph (2) an instruction of the type referred to in such paragraph shall be in order during the consideration of such resolution if such amendment would be in order but for the fact that

it would be held to be non-germane on the basis that the instruction constitutes new matter.

(7) DEFINITION.—For purposes of paragraphs (1), (2), and (3),

the term ‘‘day’’ shall mean any calendar day on which the Senate is in session.

(b) PROCEDURES.—

(1) IN GENERAL.—Except as provided in paragraph (2), in the

Senate the provisions of sections 636 and 641 of this title for

the consideration of concurrent resolutions on the budget and

conference reports thereon shall also apply to the consideration

of resolutions, and reconciliation bills and reconciliation resolutions reported under this paragraph and conference reports

thereon.

(2) LIMIT ON DEBATE.—Debate in the Senate on any resolution reported pursuant to subsection (a)(2) of this section, and

all amendments thereto and debatable motions and appeals in

connection therewith, shall be limited to 10 hours.

(3) LIMITATION ON AMENDMENTS.—Section 636(d)(2) of this

title shall apply to reconciliation bills and reconciliation resolutions reported under this subsection.

(4) BILLS AND RESOLUTIONS RECEIVED FROM THE HOUSE.—

Any bill or resolution received in the Senate from the House,

which is a companion to a reconciliation bill or reconciliation

resolution of the Senate for the purposes of this subsection,

shall be considered in the Senate pursuant to the provisions of

this subsection.

(5) DEFINITION.—For purposes of this subsection, the term

‘‘resolution’’ means a simple, joint, or concurrent resolution.

SEC. 908. MODIFICATION OF PRESIDENTIAL ORDER.

(a) INTRODUCTION OF JOINT RESOLUTION.—At any time after the

Director of OMB issues a report under section 901(c)(2) of this title

for a fiscal year, but before the close of the tenth calendar day of

session in that session of Congress beginning after the date of issuance of such report, the majority leader of either House of Congress

may introduce a joint resolution which contains provisions directing the President to modify the most recent order issued under section 902 of this title for such fiscal year. After the introduction of

the first such joint resolution in either House of Congress in any

calendar year, then no other joint resolution introduced in such

House in such calendar year shall be subject to the procedures set

forth in this section.

(b) PROCEDURES FOR CONSIDERATION OF JOINT RESOLUTIONS.—

(1) NO REFERRAL TO COMMITTEE.—A joint resolution introduced in the Senate or the House of Representatives under
Sec. 908 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 322

subsection (a) of this section shall not be referred to a committee of the Senate or the House of Representatives, as the case

may be, and shall be placed on the appropriate calendar pending disposition of such joint resolution in accordance with this

subsection.

(2) IMMEDIATE CONSIDERATION.—On or after the third calendar day (excluding Saturdays, Sundays, and legal holidays)

beginning after a joint resolution is introduced under subsection (a) of this section, notwithstanding any rule or precedent of the Senate, including Rule 22 of the Standing Rules of

the Senate, it is in order (even though a previous motion to the

same effect has been disagreed to) for any Member of the respective House to move to proceed to the consideration of the

joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are

waived, except for points of order under titles III [2 U.S.C.A.

Sec. 631 et seq.] or IV [2 U.S.C.A. Sec. 651 et seq.] of the Congressional Budget Act of 1974. The motion is not in order after

the eighth calendar day (excluding Saturdays, Sundays, and

legal holidays) beginning after a joint resolution (to which the

motion applies) is introduced. The motion is highly privileged

in the House of Representatives and is privileged in the Senate

and is not debatable. The motion is not subject to amendment,

or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by

which the motion is agreed to or disagreed to shall not be in

order. If a motion to proceed to the consideration of the joint

resolution is agreed to, the respective House shall immediately

proceed to consideration of the joint resolution without intervening motion, order, or other business, and the joint resolution shall remain the unfinished business of the respective

House until disposed of.

(3) DEBATE—

(A) In the Senate, debate on a joint resolution introduced

under subsection (a) of this section, amendments thereto,

and all debatable motions and appeals in connection therewith shall be limited to not more than 10 hours, which

shall be divided equally between the majority leader and

the minority leader (or their designees). In the House, general debate on a joint resolution introduced under subsection (a) of this section shall be limited to not more than

4 hours which shall be equally divided between the majority and minority leaders.

(B) A motion to postpone, or a motion to proceed to the

consideration of other business is not in order. A motion to

reconsider the vote by which the joint resolution is agreed

to or disagreed to is not in order. In the Senate, a motion

to recommit the joint resolution is not in order. In the

House, a motion further to limit debate is in order and not

debatable. In the House, a motion to recommit is in order.

(C)(i) In the House of Representatives, an amendment

and any amendment thereto is debatable for not to exceed

30 minutes to be equally divided between the proponent of

the amendment and a Member opposed thereto.
323 Sec. 908 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS

(ii) No amendment that is not germane or relevant to

the provisions of the joint resolution or to the order issued

under section 902(b)(1) of this title shall be in order in the

Senate. In the Senate, an amendment, any amendment to

an amendment, or any debatable motion or appeal is debatable for not to exceed 30 minutes to be equally divided

between the majority leader and the minority leader (or

their designees).

(iii) In the Senate, an amendment that is otherwise in

order shall be in order notwithstanding the fact that it

amends the joint resolution in more than one place or

amends language previously amended. It shall not be in

order in the Senate to vote on the question of agreeing to

such a joint resolution or any amendment thereto unless

the figures then contained in such joint resolution or

amendment are mathematically consistent.

(4) VOTE ON FINAL PASSAGE.—Immediately following the conclusion of the debate on a joint resolution introduced under

subsection (a) of this section, a single quorum call at the conclusion of the debate if requested in accordance with the rules

of the appropriate House, and the disposition of any amendments under paragraph (3) (except for the motion to recommit

in the House of Representatives), the vote on final passage of

the joint resolution shall occur.

(5) APPEALS.—Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House

of Representatives, as the case may be, to the procedure relating to a joint resolution described in subsection (a) of this section shall be decided without debate.

(6) CONFERENCE REPORTS.—In the Senate, points of order

under titles III [2 U.S.C.A. Sec. 631 et seq.] and IV [2 U.S.C.A.

Sec. 651 et seq.] of the Congressional Budget Act of 1974 (including points of order under sections 302(c) [2 U.S.C.A. Sec.

633(c)], 303(a) [2 U.S.C.A. Sec. 634(a)], 306 [2 U.S.C.A. Sec.

637], and 401(b)(1) [2 U.S.C.A. Sec. 651(b)(1)]) are applicable

to a conference report on the joint resolution or any amendments in disagreement thereto.

(7) RESOLUTION FROM OTHER HOUSE.—If, before the passage

by the Senate of a joint resolution of the Senate introduced

under subsection (a) of this section, the Senate receives from

the House of Representatives a joint resolution introduced

under subsection (a), of this section, then the following procedures shall apply:

(A) The joint resolution of the House of Representatives

shall not be referred to a committee.

(B) With respect to a joint resolution introduced under

subsection (a) of this section in the Senate—

(i) the procedure in the Senate shall be the same as

if no joint resolution had been received from the

House; but

(ii)(I) the vote on final passage shall be on the joint

resolution of the House if it is identical to the joint

resolution then pending for passage in the Senate; or
Sec. 908 CH. 20—EMERGENCY POWERS TO ELIMINATE BUDGET DEFICITS 324

(II) if the joint resolution from the House is not

identical to the joint resolution then pending for passage in the Senate and the Senate then passes it, the

Senate shall be considered to have passed the joint

resolution as amended by the text of the Senate joint

resolution.

(C) Upon disposition of the joint resolution received from

the House, it shall no longer be in order to consider the

resolution originated in the Senate.

(8) SENATE ACTION ON HOUSE RESOLUTION.—If the Senate receives from the House of Representatives a joint resolution introduced under subsection (a) of this section after the Senate

has disposed of a Senate originated resolution which is identical to the House passed joint resolution, the action of the

Senate with regard to the disposition of the Senate originated

joint resolution shall be deemed to be the action of the Senate

with regard to the House originated joint resolution. If it is not

identical to the House passed joint resolution, then the Senate

shall be considered to have passed the joint resolution of the

House as amended by the text of the Senate joint resolution.
325

SELECTED PROVISIONS OF TITLE 5,

UNITED STATES CODE—

GOVERNMENT ORGANIZATION AND

EMPLOYEES

327

8This table of sections is not part of Title 5 but is included for the convenience of the reader.

Table of Sections of Selected Provisions of Title 5 8

TITLE 5, UNITED STATES CODE

GOVERNMENT ORGANIZATION AND EMPLOYEES

PART I—THE AGENCIES GENERALLY

CHAPTER 1—ORGANIZATION

Sec. 101. Executive departments.

Sec. 102. Military departments.

Sec. 103. Government corporation.

CHAPTER 3—POWERS

Sec. 306. Strategic plans.

CHAPTER 5—ADMINISTRATIVE PROCEDURE

SUBCHAPTER II—ADMINISTRATIVE PROCEDURE

Sec. 551. Definitions.

Sec. 552a. Records maintained on Individuals.

APPENDIX 3—INSPECTOR GENERAL ACT

Sec. 1. Short title.

Sec. 2. Purpose and establishment of Offices of Inspector General.

Sec. 3. Appointment of Inspector General.

Sec. 4. Duties and responsibilities.

Sec. 5. Semiannual reports.

Sec. 6. Authority of Inspector General.

Sec. 7. Complaints by employees.

Sec. 8A. Special provisions relating to the Agency for International Development.

Sec. 8B. Special provisions relating to the Nuclear Regulatory Commission.

Sec. 8C. Special provisions relating to the Federal Deposit Insurance Corporation.

Sec. 8D. Special provisions relating to the Department of the Treasury.

Sec. 8E. Special provisions relating to the Department of Justice.

Sec. 8F. Special provisions relating to the Corporation for National and Community Service.

Sec. 8G. Requirements for Federal entities and designated Federal entities.

Sec. 8H. Rule of construction of special provisions.

Sec. 9. Transfer of functions.

Sec. 10. Conforming and technical amendments.

Sec. 11. Definitions.

Sec. 12. Effective date.
328

TITLE 5—GOVERNMENT ORGANIZATION AND

EMPLOYEES

* * * * * * *

PART I—THE AGENCIES GENERALLY

CHAPTER 1—ORGANIZATION

SEC. 101. EXECUTIVE DEPARTMENTS.

The Executive departments are:

The Department of State.

The Department of the Treasury.

The Department of Defense.

The Department of Justice.

The Department of the Interior.

The Department of Agriculture.

The Department of Commerce.

The Department of Labor.

The Department of Health and Human Services.

The Department of Housing and Urban Development.

The Department of Transportation.

The Department of Energy.

The Department of Education.

The Department of Veterans Affairs.

SEC. 102. MILITARY DEPARTMENTS.

The military departments are:

The Department of the Army.

The Department of the Navy.

The Department of the Air Force.

SEC. 103. GOVERNMENT CORPORATION.

For the purpose of this title—

(1) ‘‘Government corporation’’ means a corporation owned or

controlled by the Government of the United States; and

(2) ‘‘Government controlled corporation’’ does not include a

corporation owned by the Government of the United States.

* * * * * * *

The following list shows the section of 5 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

5 U.S.C. Requirements or Guidelines

102 .............................................. 32 C.F.R. 626, 627
329

TITLE 5—GOVERNMENT ORGANIZATION AND

EMPLOYEES

* * * * * * *

PART I—THE AGENCIES GENERALLY

CHAPTER 3—POWERS

SEC. 306. STRATEGIC PLANS.

(a) No later than September 30, 1997, the head of each agency

shall submit to the Director of the Office of Management and Budget and to the Congress a strategic plan for program activities. Such

plan shall contain—

(1) a comprehensive mission statement covering the major

functions and operations of the agency;

(2) general goals and objectives, including outcome-related

goals and objectives, for the major functions and operations of

the agency;

(3) a description of how the goals and objectives are to be

achieved, including a description of the operational processes,

skills and technology, and the human, capital, information, and

other resources required to meet those goals and objectives;

(4) a description of how the performance goals included in

the plan required by section 1115(a) of title 31 shall be related

to the general goals and objectives in the strategic plan;

(5) an identification of those key factors external to the agency and beyond its control that could significantly affect the

achievement of the general goals and objectives; and

(6) a description of the program evaluations used in establishing or revising general goals and objectives, with a schedule for future program evaluations.

(b) The strategic plan shall cover a period of not less than five

years forward from the fiscal year in which it is submitted, and

shall be updated and revised at least every three years.

(c) The performance plan required by section 1115 of title 31

shall be consistent with the agency’s strategic plan. A performance

plan may not be submitted for a fiscal year not covered by a current strategic plan under this section.

(d) When developing a strategic plan, the agency shall consult

with the Congress, and shall solicit and consider the views and

suggestions of those entities potentially affected by or interested in

such a plan.

(e) The functions and activities of this section shall be considered

to be inherently Governmental functions. The drafting of strategic

plans under this section shall be performed only by Federal employees.
Sec. 306 CH. 3—POWERS 330

(f) For purposes of this section the term ‘‘agency’’ means an Executive agency defined under section 105, but does not include the

Central Intelligence Agency, the General Accounting Office, the

Panama Canal Commission, the United States Postal Service, and

the Postal Rate Commission.
331

TITLE 5—GOVERNMENT ORGANIZATION AND

EMPLOYEES

* * * * * * *

PART I—THE AGENCIES GENERALLY

CHAPTER 5—ADMINISTRATIVE PROCEDURE

SUBCHAPTER II—ADMINISTRATIVE PROCEDURE

SEC. 551. DEFINITIONS.

For the purpose of this subchapter—

(1) ‘‘agency’’ means each authority of the Government of the

United States, whether or not it is within or subject to review

by another agency, but does not include—

(A) the Congress;

(B) the courts of the United States;

(C) the governments of the territories or possessions of

the United States;

(D) the government of the District of Columbia;

or except as to the requirements of section 552 of this title—

(E) agencies composed of representatives of the parties

or of representatives of organizations of the parties to the

disputes determined by them;

(F) courts martial and military commissions;

(G) military authority exercised in the field in time of

war or in occupied territory; or

(H) functions conferred by sections 1738, 1739, 1743, and

1744 of title 12; chapter 2 of title 41; subchapter II of

chapter 471 of title 49; or sections 1884, 1891–1902, and

former section 1641(b)(2), of title 50, appendix;

(2) ‘‘person’’ includes an individual, partnership, corporation,

association, or public or private organization other than an

agency;

(3) ‘‘party’’ includes a person or agency named or admitted

as a party, or properly seeking and entitled as of right to be

admitted as a party, in an agency proceeding, and a person or

agency admitted by an agency as a party for limited purposes;

(4) ‘‘rule’’ means the whole or a part of an agency statement

of general or particular applicability and future effect designed

to implement, interpret, or prescribe law or policy or describing

the organization, procedure, or practice requirements of an

agency and includes the approval or prescription for the future

of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing;
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 332

(5) ‘‘rule making’’ means agency process for formulating,

amending, or repealing a rule;

(6) ‘‘order’’ means the whole or a part of a final disposition,

whether affirmative, negative, injunctive, or declaratory in

form, of an agency in a matter other than rule making but including licensing;

(7) ‘‘adjudication’’ means agency process for the formulation

of an order;

(8) ‘‘license’’ includes the whole or a part of an agency permit, certificate, approval, registration, charter, membership,

statutory exemption or other form of permission;

(9) ‘‘licensing’’ includes agency process respecting the grant,

renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditioning of

a license;

(10) ‘‘sanction’’ includes the whole or a part of an agency—

(A) prohibition, requirement, limitation, or other condition affecting the freedom of a person;

(B) withholding of relief;

(C) imposition of penalty or fine;

(D) destruction, taking, seizure, or withholding of property;

(E) assessment of damages, reimbursement, restitution,

compensation, costs, charges, or fees;

(F) requirement, revocation, or suspension of a license;

or

(G) taking other compulsory or restrictive action;

(11) ‘‘relief’’ includes the whole or a part of an agency—

(A) grant of money, assistance, license, authority, exemption, exception, privilege, or remedy;

(B) recognition of a claim, right, immunity, privilege, exemption, or exception; or

(C) taking of other action on the application or petition

of, and beneficial to, a person;

(12) ‘‘agency proceeding’’ means an agency process as defined

by paragraphs (5), (7), and (9) of this section;

(13) ‘‘agency action’’ includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act; and

(14) ‘‘ex parte communication’’ means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not

include requests for status reports on any matter or proceeding

covered by this subchapter.

SEC. 552A. RECORDS MAINTAINED ON INDIVIDUALS.

(a) DEFINITIONS.—For purposes of this section—

(1) the term ‘‘agency’’ means agency as defined in section

552(e) of this title;

(2) the term ‘‘individual’’ means a citizen of the United

States or an alien lawfully admitted for permanent residence;

(3) the term ‘‘maintain’’ includes maintain, collect, use, or

disseminate;
333 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

(4) the term ‘‘record’’ means any item, collection, or grouping

of information about an individual that is maintained by an

agency, including, but not limited to, his education, financial

transactions, medical history, and criminal or employment history and that contains his name, or the identifying number,

symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph;

(5) the term ‘‘system of records’’ means a group of any

records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual;

(6) the term ‘‘statistical record’’ means a record in a system

of records maintained for statistical research or reporting purposes only and not used in whole or in part in making any determination about an identifiable individual, except as provided by section 8 of title 13;

(7) the term ‘‘routine use’’ means, with respect to the disclosure of a record, the use of such record for a purpose which is

compatible with the purpose for which it was collected;

(8) the term ‘‘matching program’’—

(A) means any computerized comparison of—

(i) two or more automated systems of records or a

system of records with non-Federal records for the

purpose of—

(I) establishing or verifying the eligibility of, or

continuing compliance with statutory and regulatory requirements by, applicants for, recipients

or beneficiaries of, participants in, or providers of

services with respect to, cash or in-kind assistance

or payments under Federal benefit programs, or

(II) recouping payments or delinquent debts

under such Federal benefit programs, or

(ii) two or more automated Federal personnel or

payroll systems of records or a system of Federal personnel or payroll records with non-Federal records,

(B) but does not include—

(i) matches performed to produce aggregate statistical data without any personal identifiers;

(ii) matches performed to support any research or

statistical project, the specific data of which may not

be used to make decisions concerning the rights, benefits, or privileges of specific individuals;

(iii) matches performed, by an agency (or component

thereof) which performs as its principal function any

activity pertaining to the enforcement of criminal

laws, subsequent to the initiation of a specific criminal

or civil law enforcement investigation of a named person or persons for the purpose of gathering evidence

against such person or persons;

(iv) matches of tax information (I) pursuant to section 6103(d) of the Internal Revenue Code of 1986, (II)

for purposes of tax administration as defined in section 6103(b)(4) of such Code, (III) for the purpose of
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 334

intercepting a tax refund due an individual under authority granted by section 464 or 1137 of the Social Security Act; or (IV) for the purpose of intercepting a tax

refund due an individual under any other tax refund

intercept program authorized by statute which has

been determined by the Director of the Office of Management and Budget to contain verification, notice,

and hearing requirements that are substantially similar to the procedures in section 1137 of the Social Security Act;

(v) matches—

(I) using records predominantly relating to Federal personnel, that are performed for routine administrative purposes (subject to guidance provided by the Director of the Office of Management

and Budget pursuant to subsection (v)); or

(II) conducted by an agency using only records

from systems of records maintained by that agency;

if the purpose of the match is not to take any adverse

financial, personnel, disciplinary, or other adverse action against Federal personnel

(vi) matches performed for foreign counterintelligence purposes or to produce background checks for

security clearances of Federal personnel or Federal

contractor personnel; or

(vii) matches performed pursuant to section

6103(l)(12) of the Internal Revenue Code of 1986 and

section 1144 of the Social Security Act;

(9) the term ‘‘recipient agency’’ means any agency, or contractor thereof, receiving records contained in a system of

records from a source agency for use in a matching program;

(10) the term ‘‘non-Federal agency’’ means any State or local

government, or agency thereof, which receives records contained in a system of records from a source agency for use in

a matching program;

(11) the term ‘‘source agency’’ means any agency which discloses records contained in a system of records to be used in

a matching program, or any State or local government, or

agency thereof, which discloses records to be used in a matching program;

(12) the term ‘‘Federal benefit program’’ means any program

administered or funded by the Federal Government, or by any

agent or State on behalf of the Federal Government, providing

cash or in-kind assistance in the form of payments, grants,

loans, or loan guarantees to individuals; and

(13) the term ‘‘Federal personnel’’ means officers and employees of the Government of the United States, members of the

uniformed services (including members of the Reserve Components), individuals entitled to receive immediate or deferred retirement benefits under any retirement program of the Government of the United States (including survivor benefits).

(b) CONDITIONS OF DISCLOSURE.—No agency shall disclose any

record which is contained in a system of records by any means of
335 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of,

the individual to whom the record pertains, unless disclosure of the

record would be—

(1) to those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties;

(2) required under section 552 of this title;

(3) for a routine use as defined in subsection (a)(7) of this

section and described under subsection (e)(4)(D) of this section;

(4) to the Bureau of the Census for purposes of planning or

carrying out a census or survey or related activity pursuant to

the provisions of title 13;

(5) to a recipient who has provided the agency with advance

adequate written assurance that the record will be used solely

as a statistical research or reporting record, and the record is

to be transferred in a form that is not individually identifiable;

(6) to the National Archives and Records Administration as

a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Archivist of the United States

or the designee of the Archivist to determine whether the

record has such value;

(7) to another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United

States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which

maintains the record specifying the particular portion desired

and the law enforcement activity for which the record is

sought;

(8) to a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if

upon such disclosure notification is transmitted to the last

known address of such individual;

(9) to either House of Congress, or, to the extent of matter

within its jurisdiction, any committee or subcommittee thereof,

any joint committee of Congress or subcommittee of any such

joint committee;

(10) to the Comptroller General, or any of his authorized representatives, in the course of the performance of the duties of

the General Accounting Office;

(11) pursuant to the order of a court of competent jurisdiction; or

(12) to a consumer reporting agency in accordance with section 3711(f) of title 31.

(c) ACCOUNTING OF CERTAIN DISCLOSURES.—Each agency, with

respect to each system of records under its control, shall—

(1) except for disclosures made under subsections (b)(1) or

(b)(2) of this section, keep an accurate accounting of—

(A) the date, nature, and purpose of each disclosure of

a record to any person or to another agency made under

subsection (b) of this section; and
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 336

(B) the name and address of the person or agency to

whom the disclosure is made;

(2) retain the accounting made under paragraph (1) of this

subsection for at least five years or the life of the record,

whichever is longer, after the disclosure for which the accounting is made;

(3) except for disclosures made under subsection (b)(7) of this

section, make the accounting made under paragraph (1) of this

subsection available to the individual named in the record at

his request; and

(4) inform any person or other agency about any correction

or notation of dispute made by the agency in accordance with

subsection (d) of this section of any record that has been disclosed to the person or agency if an accounting of the disclosure was made.

(d) ACCESS TO RECORDS.—Each agency that maintains a system

of records shall—

(1) upon request by any individual to gain access to his

record or to any information pertaining to him which is contained in the system, permit him and upon his request, a person of his own choosing to accompany him, to review the record

and have a copy made of all or any portion thereof in a form

comprehensible to him, except that the agency may require the

individual to furnish a written statement authorizing discussion of that individual’s record in the accompanying person’s

presence;

(2) permit the individual to request amendment of a record

pertaining to him and—

(A) not later than 10 days (excluding Saturdays, Sundays, and legal public holidays) after the date of receipt of

such request, acknowledge in writing such receipt; and

(B) promptly, either—

(i) make any correction of any portion thereof which

the individual believes is not accurate, relevant, timely, or complete; or

(ii) inform the individual of its refusal to amend the

record in accordance with his request, the reason for

the refusal, the procedures established by the agency

for the individual to request a review of that refusal

by the head of the agency or an officer designated by

the head of the agency, and the name and business

address of that official;

(3) permit the individual who disagrees with the refusal of

the agency to amend his record to request a review of such refusal, and not later than 30 days (excluding Saturdays, Sundays, and legal public holidays) from the date on which the individual requests such review, complete such review and make

a final determination unless, for good cause shown, the head

of the agency extends such 30-day period; and if, after his review, the reviewing official also refuses to amend the record in

accordance with the request, permit the individual to file with

the agency a concise statement setting forth the reasons for his

disagreement with the refusal of the agency, and notify the individual of the provisions for judicial review of the reviewing
337 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

official’s determination under subsection (g)(1)(A) of this section;

(4) in any disclosure, containing information about which the

individual has filed a statement of disagreement, occurring

after the filing of the statement under paragraph (3) of this

subsection, clearly note any portion of the record which is disputed and provide copies of the statement and, if the agency

deems it appropriate, copies of a concise statement of the reasons of the agency for not making the amendments requested,

to persons or other agencies to whom the disputed record has

been disclosed; and

(5) nothing in this section shall allow an individual access to

any information compiled in reasonable anticipation of a civil

action or proceeding.

(e) AGENCY REQUIREMENTS.—Each agency that maintains a system of records shall—

(1) maintain in its records only such information about an

individual as is relevant and necessary to accomplish a purpose of the agency required to be accomplished by statute or

by executive order of the President;

(2) collect information to the greatest extent practicable directly from the subject individual when the information may

result in adverse determinations about an individual’s rights,

benefits, and privileges under Federal programs;

(3) inform each individual whom it asks to supply information, on the form which it uses to collect the information or on

a separate form that can be retained by the individual—

(A) the authority (whether granted by statute, or by executive order of the President) which authorizes the solicitation of the information and whether disclosure of such

information is mandatory or voluntary;

(B) the principal purpose or purposes for which the information is intended to be used;

(C) the routine uses which may be made of the information, as published pursuant to paragraph (4)(D) of this

subsection; and

(D) the effects on him, if any, of not providing all or any

part of the requested information;

(4) subject to the provisions of paragraph (11) of this subsection, publish in the Federal Register upon establishment or

revision a notice of the existence and character of the system

of records, which notice shall include—

(A) the name and location of the system;

(B) the categories of individuals on whom records are

maintained in the system;

(C) the categories of records maintained in the system;

(D) each routine use of the records contained in the system, including the categories of users and the purpose of

such use;

(E) the policies and practices of the agency regarding

storage, retrievability, access controls, retention, and disposal of the records;

(F) the title and business address of the agency official

who is responsible for the system of records;
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 338

(G) the agency procedures whereby an individual can be

notified at his request if the system of records contains a

record pertaining to him;

(H) the agency procedures whereby an individual can be

notified at his request how he can gain access to any

record pertaining to him contained in the system of

records, and how he can contest its content; and

(I) the categories of sources of records in the system;

(5) maintain all records which are used by the agency in

making any determination about any individual with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individual in the determination;

(6) prior to disseminating any record about an individual to

any person other than an agency, unless the dissemination is

made pursuant to subsection (b)(2) of this section, make reasonable efforts to assure that such records are accurate, complete, timely, and relevant for agency purposes;

(7) maintain no record describing how any individual exercises rights guaranteed by the First Amendment unless expressly authorized by statute or by the individual about whom

the record is maintained or unless pertinent to and within the

scope of an authorized law enforcement activity;

(8) make reasonable efforts to serve notice on an individual

when any record on such individual is made available to any

person under compulsory legal process when such process becomes a matter of public record;

(9) establish rules of conduct for persons involved in the design, development, operation, or maintenance of any system of

records, or in maintaining any record, and instruct each such

person with respect to such rules and the requirements of this

section, including any other rules and procedures adopted pursuant to this section and the penalties for noncompliance;

(10) establish appropriate administrative, technical, and

physical safeguards to insure the security and confidentiality of

records and to protect against any anticipated threats or hazards to their security or integrity which could result in substantial harm, embarrassment, inconvenience, or unfairness to

any individual on whom information is maintained;

(11) at least 30 days prior to publication of information

under paragraph (4)(D) of this subsection, publish in the Federal Register notice of any new use or intended use of the information in the system, and provide an opportunity for interested persons to submit written data, views, or arguments to

the agency; and

(12) if such agency is a recipient agency or a source agency

in a matching program with a non-Federal agency, with respect to any establishment or revision of a matching program,

at least 30 days prior to conducting such program, publish in

the Federal Register notice of such establishment or revision.

(f) AGENCY RULES.—In order to carry out the provisions of this

section, each agency that maintains a system of records shall promulgate rules, in accordance with the requirements (including general notice) of section 553 of this title, which shall—
339 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

(1) establish procedures whereby an individual can be notified in response to his request if any system of records named

by the individual contains a record pertaining to him;

(2) define reasonable times, places, and requirements for

identifying an individual who requests his record or information pertaining to him before the agency shall make the record

or information available to the individual;

(3) establish procedures for the disclosure to an individual

upon his request of his record or information pertaining to

him, including special procedure, if deemed necessary, for the

disclosure to an individual of medical records, including psychological records, pertaining to him;

(4) establish procedures for reviewing a request from an individual concerning the amendment of any record or information

pertaining to the individual, for making a determination on the

request, for an appeal within the agency of an initial adverse

agency determination, and for whatever additional means may

be necessary for each individual to be able to exercise fully his

rights under this section; and

(5) establish fees to be charged, if any, to any individual for

making copies of his record, excluding the cost of any search

for and review of the record.

The Office of the Federal Register shall biennially compile and publish the rules promulgated under this subsection and agency notices published under subsection (e)(4) of this section in a form

available to the public at low cost.

(g)(1) CIVIL REMEDIES.—Whenever any agency—

(A) makes a determination under subsection (d)(3) of this

section not to amend an individual’s record in accordance with

his request, or fails to make such review in conformity with

that subsection;

(B) refuses to comply with an individual request under subsection (d)(1) of this section;

(C) fails to maintain any record concerning any individual

with such accuracy, relevance, timeliness, and completeness as

is necessary to assure fairness in any determination relating to

the qualifications, character, rights, or opportunities of, or benefits to the individual that may be made on the basis of such

record, and consequently a determination is made which is adverse to the individual; or

(D) fails to comply with any other provision of this section,

or any rule promulgated thereunder, in such a way as to have

an adverse effect on an individual,

the individual may bring a civil action against the agency, and the

district courts of the United States shall have jurisdiction in the

matters under the provisions of this subsection.

(2)(A) In any suit brought under the provisions of subsection

(g)(1)(A) of this section, the court may order the agency to amend

the individual’s record in accordance with his request or in such

other way as the court may direct. In such a case the court shall

determine the matter de novo.

(B) The court may assess against the United States reasonable

attorney fees and other litigation costs reasonably incurred in any
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 340

case under this paragraph in which the complainant has substantially prevailed.

(3)(A) In any suit brought under the provisions of subsection

(g)(1)(B) of this section, the court may enjoin the agency from withholding the records and order the production to the complainant of

any agency records improperly withheld from him. In such a case

the court shall determine the matter de novo, and may examine the

contents of any agency records in camera to determine whether the

records or any portion thereof may be withheld under any of the

exemptions set forth in subsection (k) of this section, and the burden is on the agency to sustain its action.

(B) The court may assess against the United States reasonable

attorney fees and other litigation costs reasonably incurred in any

case under this paragraph in which the complainant has substantially prevailed.

(4) In any suit brought under the provisions of subsection

(g)(1)(C) or (D) of this section in which the court determines that

the agency acted in a manner which was intentional or willful, the

United States shall be liable to the individual in an amount equal

to the sum of—

(A) actual damages sustained by the individual as a result

of the refusal or failure, but in no case shall a person entitled

to recovery receive less than the sum of $1,000; and

(B) the costs of the action together with reasonable attorney

fees as determined by the court.

(5) An action to enforce any liability created under this section

may be brought in the district court of the United States in the district in which the complainant resides, or has his principal place

of business, or in which the agency records are situated, or in the

District of Columbia, without regard to the amount in controversy,

within two years from the date on which the cause of action arises,

except that where an agency has materially and willfully misrepresented any information required under this section to be disclosed

to an individual and the information so misrepresented is material

to establishment of the liability of the agency to the individual

under this section, the action may be brought at any time within

two years after discovery by the individual of the misrepresentation. Nothing in this section shall be construed to authorize any

civil action by reason of any injury sustained as the result of a disclosure of a record prior to September 27, 1975.

(h) RIGHTS OF LEGAL GUARDIANS.—For the purposes of this section, the parent of any minor, or the legal guardian of any individual who has been declared to be incompetent due to physical or

mental incapacity or age by a court of competent jurisdiction, may

act on behalf of the individual.

(i)(1) CRIMINAL PENALTIES.—Any officer or employee of an agency, who by virtue of his employment or official position, has possession of, or access to, agency records which contain individually

identifiable information the disclosure of which is prohibited by

this section or by rules or regulations established thereunder, and

who knowing that disclosure of the specific material is so prohibited, willfully discloses the material in any manner to any person

or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.
341 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

(2) Any officer or employee of any agency who willfully maintains

a system of records without meeting the notice requirements of

subsection (e)(4) of this section shall be guilty of a misdemeanor

and fined not more than $5,000.

(3) Any person who knowingly and willfully requests or obtains

any record concerning an individual from an agency under false

pretenses shall be guilty of a misdemeanor and fined not more than

$5,000.

(j) GENERAL EXEMPTIONS.—The head of any agency may promulgate rules, in accordance with the requirements (including general

notice) of sections 553(b)(1), (2), and (3), (c), and (e) of this title, to

exempt any system of records within the agency from any part of

this section except subsections (b), (c)(1) and (2), (e)(4)(A) through

(F), (e) (6), (7), (9), (10), and (11), and (i) if the system of records

is—

(1) maintained by the Central Intelligence Agency; or

(2) maintained by an agency or component thereof which performs as its principal function any activity pertaining to the

enforcement of criminal laws, including police efforts to prevent, control, or reduce crime or to apprehend criminals, and

the activities of prosecutors, courts, correctional, probation,

pardon, or parole authorities, and which consists of (A) information compiled for the purpose of identifying individual criminal offenders and alleged offenders and consisting only of identifying data and notations of arrests, the nature and disposition of criminal charges, sentencing, confinement, release, and

parole and probation status; (B) information compiled for the

purpose of a criminal investigation, including reports of informants and investigators, and associated with an identifiable individual; or (C) reports identifiable to an individual compiled

at any stage of the process of enforcement of the criminal laws

from arrest or indictment through release from supervision.

At the time rules are adopted under this subsection, the agency

shall include in the statement required under section 553(c) of this

title, the reasons why the system of records is to be exempted from

a provision of this section.

(k) SPECIFIC EXEMPTIONS.—The head of any agency may promulgate rules, in accordance with the requirements (including general

notice) of sections 553(b)(1), (2), and (3), (c), and (e) of this title, to

exempt any system of records within the agency from subsections

(c)(3), (d), (e)(1), (e)(4) (G), (H), and (I) and (f) of this section if the

system of records is—

(1) subject to the provisions of section 552(b)(1) of this title;

(2) investigatory material compiled for law enforcement purposes, other than material within the scope of subsection (j)(2)

of this section: Provided, however, That if any individual is denied any right, privilege, or benefit that he would otherwise be

entitled by Federal law, or for which he would otherwise be eligible, as a result of the maintenance of such material, such

material shall be provided to such individual, except to the extent that the disclosure of such material would reveal the identity of a source who furnished information to the Government

under an express promise that the identity of the source would

be held in confidence, or, prior to the effective date of this sec-
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 342

tion, under an implied promise that the identity of the source

would be held in confidence;

(3) maintained in connection with providing protective services to the President of the United States or other individuals

pursuant to section 3056 of title 18;

(4) required by statute to be maintained and used solely as

statistical records;

(5) investigatory material compiled solely for the purpose of

determining suitability, eligibility, or qualifications for Federal

civilian employment, military service, Federal contracts, or access to classified information, but only to the extent that the

disclosure of such material would reveal the identity of a

source who furnished information to the Government under an

express promise that the identity of the source would be held

in confidence, or, prior to the effective date of this section,

under an implied promise that the identity of the source would

be held in confidence;

(6) testing or examination material used solely to determine

individual qualifications for appointment or promotion in the

Federal service the disclosure of which would compromise the

objectivity or fairness of the testing or examination process; or

(7) evaluation material used to determine potential for promotion in the armed services, but only to the extent that the

disclosure of such material would reveal the identity of a

source who furnished information to the Government under an

express promise that the identity of the source would be held

in confidence, or, prior to the effective date of this section,

under an implied promise that the identity of the source would

be held in confidence.

At the time rules are adopted under this subsection, the agency

shall include in the statement required under section 553(c) of this

title, the reasons why the system of records is to be exempted from

a provision of this section.

(l)(1) ARCHIVAL RECORDS.—Each agency record which is accepted

by the Archivist of the United States for storage, processing, and

servicing in accordance with section 3103 of title 44 shall, for the

purposes of this section, be considered to be maintained by the

agency which deposited the record and shall be subject to the provisions of this section. The Archivist of the United States shall not

disclose the record except to the agency which maintains the

record, or under rules established by that agency which are not inconsistent with the provisions of this section.

(2) Each agency record pertaining to an identifiable individual

which was transferred to the National Archives of the United

States as a record which has sufficient historical or other value to

warrant its continued preservation by the United States Government, prior to the effective date of this section, shall, for the purposes of this section, be considered to be maintained by the National Archives and shall not be subject to the provisions of this

section, except that a statement generally describing such records

(modeled after the requirements relating to records subject to subsections (e)(4) (A) through (G) of this section) shall be published in

the Federal Register.
343 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

(3) Each agency record pertaining to an identifiable individual

which is transferred to the National Archives of the United States

as a record which has sufficient historical or other value to warrant

its continued preservation by the United States Government, on or

after the effective date of this section, shall, for the purposes of this

section, be considered to be maintained by the National Archives

and shall be exempt from the requirements of this section except

subsections (e)(4) (A) through (G) and (e)(9) of this section.

(m)(1) GOVERNMENT CONTRACTORS.—When an agency provides

by a contract for the operation by or on behalf of the agency of a

system of records to accomplish an agency function, the agency

shall, consistent with its authority, cause the requirements of this

section to be applied to such system. For purposes of subsection (i)

of this section any such contractor and any employee of such contractor, if such contract is agreed to on or after the effective date

of this section, shall be considered to be an employee of an agency.

(2) A consumer reporting agency to which a record is disclosed

under section 3711(f) of title 31 shall not be considered a contractor

for the purposes of this section.

(n) MAILING LISTS.—An individual’s name and address may not

be sold or rented by an agency unless such action is specifically authorized by law. This provision shall not be construed to require

the withholding of names and addresses otherwise permitted to be

made public.

(o) MATCHING AGREEMENTS.—(1) No record which is contained in

a system of records may be disclosed to a recipient agency or nonFederal agency for use in a computer matching program except

pursuant to a written agreement between the source agency and

the recipient agency or non-Federal agency specifying—

(A) the purpose and legal authority for conducting the program;

(B) the justification for the program and the anticipated results, including a specific estimate of any savings;

(C) a description of the records that will be matched, including each data element that will be used, the approximate number of records that will be matched, and the projected starting

and completion dates of the matching program;

(D) procedures for providing individualized notice at the time

of application, and notice periodically thereafter as directed by

the Data Integrity Board of such agency (subject to guidance

provided by the Director of the Office of Management and

Budget pursuant to subsection (v)), to—

(i) applicants for and recipients of financial assistance or

payments under Federal benefit programs, and

(ii) applicants for and holders of positions as Federal

personnel, that any information provided by such applicants, recipients, holders, and individuals may be subject

to verification through matching programs;

(E) procedures for verifying information produced in such

matching program as required by subsection (p);

(F) procedures for the retention and timely destruction of

identifiable records created by a recipient agency or non-Federal agency in such matching program;
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 344

(G) procedures for ensuring the administrative, technical,

and physical security of the records matched and the results of

such programs;

(H) prohibitions on duplication and redisclosure of records

provided by the source agency within or outside the recipient

agency or the non-Federal agency, except where required by

law or essential to the conduct of the matching program;

(I) procedures governing the use by a recipient agency or

non-Federal agency of records provided in a matching program

by a source agency, including procedures governing return of

the records to the source agency or destruction of records used

in such program;

(J) information on assessments that have been made on the

accuracy of the records that will be used in such matching program; and

(K) that the Comptroller General may have access to all

records of a recipient agency or a non-Federal agency that the

Comptroller General deems necessary in order to monitor or

verify compliance with the agreement.

(2)(A) A copy of each agreement entered into pursuant to paragraph (1) shall—

(i) be transmitted to the Committee on Governmental Affairs

of the Senate and the Committee on Government Operations

of the House of Representatives; and

(ii) be available upon request to the public.

(B) No such agreement shall be effective until 30 days after the

date on which such a copy is transmitted pursuant to subparagraph (A)(i).

(C) Such an agreement shall remain in effect only for such period, not to exceed 18 months, as the Data Integrity Board of the

agency determines is appropriate in light of the purposes, and

length of time necessary for the conduct, of the matching program.

(D) Within 3 months prior to the expiration of such an agreement

pursuant to subparagraph (C), the Data Integrity Board of the

agency may, without additional review, renew the matching agreement for a current, ongoing matching program for not more than

one additional year if—

(i) such program will be conducted without any change; and

(ii) each party to the agreement certifies to the Board in

writing that the program has been conducted in compliance

with the agreement.

(p) VERIFICATION AND OPPORTUNITY TO CONTEST FINDINGS.—(1)

In order to protect any individual whose records are used in a

matching program, no recipient agency, non-Federal agency, or

source agency may suspend, terminate, reduce, or make a final denial of any financial assistance or payment under Federal benefit

program to such individual, or take other adverse action against

such individual, as a result of information produced by such matching program, until—

(A)(i) the agency has independently verified the information;

or

(ii) the Data Integrity Board of the agency, or in the case of

a non-Federal agency the Data Integrity Board of the source
345 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

agency determines in accordance with guidance issued by the

Director of the Office of Management and Budget that—

(I) the information is limited to identification and

amount of benefits paid by the source agency under a Federal benefit program; and

(II) there is a high degree of confidence that the information provided to the recipient agency is accurate;

(B) the individual receives a notice from the agency containing a statement of its findings and informing the individual of

the opportunity to contest such findings; and

(C)(i) the expiration of any time period established for the

program by statute or regulation for the individual to respond

to that notice; or

(ii) in the case of a program for which no such period is established, the end of the 30-day period beginning on the date

on which notice under subparagraph (B) is mailed or otherwise

provided to the individual.

(2) Independent verification referred to in paragraph (1) requires

investigation and confirmation of specific information relating to an

individual that is used as a basis for an adverse action against the

individual, including where applicable investigation and confirmation of—

(A) the amount of any asset or income involved;

(B) whether such individual actually has or had access to

such asset or income for such individual’s own use; and

(C) the period or periods when the individual actually had

such asset or income.

(3) Notwithstanding paragraph (1), an agency may take any appropriate action otherwise prohibited by such paragraph if the

agency determines that the public health or public safety may be

adversely affected or significantly threatened during any notice period required by such paragraph.

(q) SANCTIONS.—(1) Notwithstanding any other provision of law,

no source agency may disclose any record which is contained in a

system of records to a recipient agency or non-Federal agency for

a matching program if such source agency has reason to believe

that the requirements of subsection (p), or any matching agreement

entered into pursuant to subsection (o), or both, are not being met

by such recipient agency.

(2) No source agency may renew a matching agreement unless—

(A) the recipient agency or non-Federal agency has certified

that it has complied with the provisions of that agreement; and

(B) the source agency has no reason to believe that the certification is inaccurate.

(r) REPORT ON NEW SYSTEMS AND MATCHING PROGRAMS.—Each

agency that proposes to establish or make a significant change in

a system of records or a matching program shall provide adequate

advance notice of any such proposal (in duplicate) to the Committee

on Government Operations of the House of Representatives, the

Committee on Governmental Affairs of the Senate, and the Office

of Management and Budget in order to permit an evaluation of the

probable or potential effect of such proposal on the privacy or other

rights of individuals.
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 346

(s) BIENNIAL REPORT.—The President shall biennially submit to

the Speaker of the House of Representatives and the President pro

tempore of the Senate a report—

(1) describing the actions of the Director of the Office of

Management and Budget pursuant to section 6 of the Privacy

Act of 1974 during the preceding 2 years;

(2) describing the exercise of individual rights of access and

amendment under this section during such years;

(3) identifying changes in or additions to systems of records;

(4) containing such other information concerning administration of this section as may be necessary or useful to the Congress in reviewing the effectiveness of this section in carrying

out the purposes of the Privacy Act of 1974.

(t) EFFECT OF OTHER LAWS.—(1) No agency shall rely on any exemption contained in section 552 of this title to withhold from an

individual any record which is otherwise accessible to such individual under the provisions of this section.

(2) No agency shall rely on any exemption in this section to withhold from an individual any record which is otherwise accessible to

such individual under the provisions of section 552 of this title.

(u) DATA INTEGRITY BOARDS.—(1) Every agency conducting or

participating in a matching program shall establish a Data Integrity Board to oversee and coordinate among the various components of such agency the agency’s implementation of this section.

(2) Each Data Integrity Board shall consist of senior officials designated by the head of the agency, and shall include any senior official designated by the head of the agency as responsible for implementation of this section, and the inspector general of the agency,

if any. The inspector general shall not serve as chairman of the

Data Integrity Board.

(3) EACH DATA INTEGRITY BOARD.— (A) shall review, approve, and maintain all written agreements for receipt or disclosure of agency records for matching

programs to ensure compliance with subsection (o), and all relevant statutes, regulations, and guidelines;

(B) shall review all matching programs in which the agency

has participated during the year, either as a source agency or

recipient agency, determine compliance with applicable laws,

regulations, guidelines, and agency agreements, and assess the

costs and benefits of such programs;

(C) shall review all recurring matching programs in which

the agency has participated during the year, either as a source

agency or recipient agency, for continued justification for such

disclosures;

(D) shall compile an annual report, which shall be submitted

to the head of the agency and the Office of Management and

Budget and made available to the public on request, describing

the matching activities of the agency, including—

(i) matching programs in which the agency has participated as a source agency or recipient agency;

(ii) matching agreements proposed under subsection (o)

that were disapproved by the Board;

(iii) any changes in membership or structure of the

Board in the preceding year;
347 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

(iv) the reasons for any waiver of the requirement in

paragraph (4) of this section for completion and submission

of a cost-benefit analysis prior to the approval of a matching program;

(v) any violations of matching agreements that have

been alleged or identified and any corrective action taken;

and

(vi) any other information required by the Director of the

Office of Management and Budget to be included in such

report;

(E) shall serve as a clearinghouse for receiving and providing

information on the accuracy, completeness, and reliability of

records used in matching programs;

(F) shall provide interpretation and guidance to agency components and personnel on the requirements of this section for

matching programs;

(G) shall review agency recordkeeping and disposal policies

and practices for matching programs to assure compliance with

this section; and

(H) may review and report on any agency matching activities

that are not matching programs.

(4)(A) Except as provided in subparagraphs (B) and (C), a Data

Integrity Board shall not approve any written agreement for a

matching program unless the agency has completed and submitted

to such Board a cost-benefit analysis of the proposed program and

such analysis demonstrates that the program is likely to be cost effective.

(B) The Board may waive the requirements of subparagraph (A)

of this paragraph if it determines in writing, in accordance with

guidelines prescribed by the Director of the Office of Management

and Budget, that a cost-benefit analysis is not required.

(C) A cost-benefit analysis shall not be required under subparagraph (A) prior to the initial approval of a written agreement for

a matching program that is specifically required by statute. Any

subsequent written agreement for such a program shall not be approved by the Data Integrity Board unless the agency has submitted a cost-benefit analysis of the program as conducted under the

preceding approval of such agreement.

(5)(A) If a matching agreement is disapproved by a Data Integrity Board, any party to such agreement may appeal the disapproval to the Director of the Office of Management and Budget.

Timely notice of the filing of such an appeal shall be provided by

the Director of the Office of Management and Budget to the Committee on Governmental Affairs of the Senate and the Committee

on Government Operations of the House of Representatives.

(B) The Director of the Office of Management and Budget may

approve a matching agreement notwithstanding the disapproval of

a Data Integrity Board if the Director determines that—

(i) the matching program will be consistent with all applicable legal, regulatory, and policy requirements;

(ii) there is adequate evidence that the matching agreement

will be cost-effective; and

(iii) the matching program is in the public interest.
Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE 348

(C) The decision of the Director to approve a matching agreement

shall not take effect until 30 days after it is reported to committees

described in subparagraph (A).

(D) If the Data Integrity Board and the Director of the Office of

Management and Budget disapprove a matching program proposed

by the inspector general of an agency, the inspector general may

report the disapproval to the head of the agency and to the Congress.

(6) The Director of the Office of Management and Budget shall,

annually during the first 3 years after the date of enactment of this

subsection and biennially thereafter, consolidate in a report to the

Congress the information contained in the reports from the various

Data Integrity Boards under paragraph (3)(D). Such report shall

include detailed information about costs and benefits of matching

programs that are conducted during the period covered by such

consolidated report, and shall identify each waiver granted by a

Data Integrity Board of the requirement for completion and submission of a cost-benefit analysis and the reasons for granting the

waiver.

(7) In the reports required by paragraphs (3)(D) and (6), agency

matching activities that are not matching programs may be reported on an aggregate basis, if and to the extent necessary to protect ongoing law enforcement or counterintelligence investigations.

(v) OFFICE OF MANAGEMENT AND BUDGET RESPONSIBILITIES.—

The Director of the Office of Management and Budget shall—

(1) develop and, after notice and opportunity for public comment, prescribe guidelines and regulations for the use of agencies in implementing the provisions of this section; and

(2) provide continuing assistance to and oversight of the implementation of this section by agencies.

* * * * * * *

The following list shows the section of 5 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

5 U.S.C. Requirements or Guidelines

551 et seq ................................... 14 C.F.R. 201, 211; 16 C.F.R. 1025; 18 C.F.R. 281, 286; 22 C.F.R. 171; 29 C.F.R. 1910;

40 C.F.R. 124; 43 C.F.R. 4, 2650

551–559 ...................................... 29 C.F.R. 511; 31 C.F.R. 8, 10

51–558 ........................................ 21 C.F.R. 10, 12, 13

551–557 ...................................... 18 C.F.R. 3, 6, 8, 36, 154, 375, 382, 385, 388; 46 C.F.R. 501

551–553 ...................................... 44 C.F.R. 18

551–552a .................................... 32 C.F.R. 518

551 .............................................. 17 C.F.R. 10; 28 C.F.R. 540; 29 C.F.R. 580; 44 C.F.R. 1; 46 C.F.R. 502; 49 C.F.R. 1003

552–556 ...................................... 29 C.F.R. 98

552–552a .................................... 48 C.F.R. 2424
349 Sec. 552a CH. 5—ADMINISTRATIVE PROCEDURE

5 U.S.C. Requirements or Guidelines

552a ............................................ 1 C.F.R. 304, 425, 455; 5 C.F.R. 297, 736, 831, 841, 1001, 1205, 1261, 1302, 1410,

1630, 1703, 1830, 2100, 2412, 2504; 7 C.F.R. 1, 661; 18 C.F.R. 103; 10 C.F.R. 9,

1008, 1705; 11 C.F.R. 1; 12 C.F.R. 261a, 310, 405, 411, 503, 603, 790, 792, 909,

1403, 1503, 1616; 13 C.F.R. 102; 14 C.F.R. 1206, 1212; 15 C.F.R. 4b, 2005; 16

C.F.R. 1014, 1016; 17 C.F.R. 145–147, 200; 18 C.F.R. 701, 1301; 19 C.F.R. 201; 20

C.F.R. 401, 422, 903; 21 C.F.R. 21, 291; 22 C.F.R. 171, 215, 308, 505, 603, 707,

1003, 1101, 1202, 1301, 1507; 24 C.F.R. 16, 2003; 25 C.F.R. 515; 27 C.F.R. 179; 28

C.F.R. 16, 30, 50, 540, 700; 29 C.F.R. 70a, 102, 1410, 1611, 1913, 2400, 2607,

2705; 31 C.F.R. 1; 32 C.F.R. 310–323, 505, 701, 806b, 1665, 1901, 2102; 34 C.F.R.

5b; 35 C.F.R. 10, 1202; 36 C.F.R. 903, 1121, 1202; 38 C.F.R. 1, 19; 39 C.F.R. 262,

266, 3003; 40 C.F.R. 13, 16, 1516; 41 C.F.R. 51–9, 105–64; 42 C.F.R. 401; 43 C.F.R.

2; 44 C.F.R. 6; 45 C.F.R. 5b, 30, 504, 613, 705, 1115, 1224, 1705, 1800, 2106; 46

C.F.R. 503; 49 C.F.R. 10, 802; 50 C.F.R. 501
350

TITLE 5—GOVERNMENT ORGANIZATION AND

EMPLOYEES

* * * * * * *

APPENDIX 3. INSPECTOR GENERAL ACT OF 1978

SEC. 1. SHORT TITLE.

That this Act be cited as the ‘‘Inspector General Act of 1978’’.

SEC. 2. PURPOSE AND ESTABLISHMENT OF OFFICES OF INSPECTOR

GENERAL; DEPARTMENTS AND AGENCIES INVOLVED.

In order to create independent and objective units—

(1) to conduct and supervise audits and investigations relating to the programs and operations of the establishments listed

in section 11(2);

(2) to provide leadership and coordination and recommend

policies for activities designed (A) to promote economy, efficiency, and effectiveness in the administration of, and (B) to

prevent and detect fraud and abuse in, such programs and operations; and

(3) to provide a means for keeping the head of the establishment and the Congress fully and currently informed about

problems and deficiencies relating to the administration of

such programs and operations and the necessity for and

progress of corrective action;

SEC. 3. APPOINTMENT OF INSPECTOR GENERAL; SUPERVISION; REMOVAL; POLITICAL ACTIVITIES; APPOINTMENT OF ASSISTANT INSPECTOR GENERAL FOR AUDITING AND ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS.

(a) There shall be at the head of each Office an Inspector General

who shall be appointed by the President, by and with the advice

and consent of the Senate, without regard to political affiliation

and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis,

public administration, or investigations. Each Inspector General

shall report to and be under the general supervision of the head

of the establishment involved or, to the extent such authority is

delegated, the officer next in rank below such head, but shall not

report to, or be subject to supervision by, any other officer of such

establishment. Neither the head of the establishment nor the officer next in rank below such head shall prevent or prohibit the Inspector General from initiating, carrying out, or completing any

audit or investigation, or from issuing any subpena during the

course of any audit or investigation.

(b) An Inspector General may be removed from office by the

President. The President shall communicate the reasons for any

such removal to both Houses of Congress.
351 Sec. 4 APP. 3—INSPECTOR GENERAL ACT OF 1978

(c) For the purposes of section 7324 of Title 5, United States

Code, no Inspector General shall be considered to be an employee

who determines policies to be pursued by the United States in the

nationwide administration of Federal laws.

(d) Each Inspector General shall, in accordance with applicable

laws and regulations governing the civil service—

(1) appoint an Assistant Inspector General for Auditing who

shall have the responsibility for supervising the performance of

auditing activities relating to programs and operations of the

establishment, and

(2) appoint an Assistant Inspector General for Investigations

who shall have the responsibility for supervising the performance of investigative activities relating to such programs and

operations.

SEC. 4. DUTIES AND RESPONSIBILITIES; REPORT OF CRIMINAL VIOLATIONS TO ATTORNEY GENERAL.

(a) It shall be the duty and responsibility of each Inspector General, with respect to the establishment within which his office is established—

(1) to provide policy direction for and to conduct, supervise,

and coordinate audits and investigations relating to the programs and operations of such establishment;

(2) to review existing and proposed legislation and regulations relating to programs and operations of such establishment and to make recommendations in the semiannual reports

required by section 5(a) concerning the impact of such legislation or regulations on the economy and efficiency in the administration of programs and operations administered or financed

by such establishment or the prevention and detection of fraud

and abuse in such programs and operations;

(3) to recommend policies for, and to conduct, supervise, or

coordinate other activities carried out or financed by such establishment for the purpose of promoting economy and efficiency in the administration of, or preventing and detecting

fraud and abuse in, its programs and operations;

(4) to recommend policies for, and to conduct, supervise, or

coordinate relationships between such establishment and other

Federal agencies, State and local governmental agencies, and

non-governmental entities with respect to (A) all matters relating to the promotion of economy and efficiency in the administration of, or the prevention and detection of fraud and abuse

in, programs and operations administered or financed by such

establishment, or (B) the identification and prosecution of participants in such fraud or abuse; and

(5) to keep the head of such establishment and the Congress

fully and currently informed, by means of the reports required

by section 5 and otherwise, concerning fraud and other serious

problems, abuses, and deficiencies relating to the administration of programs and operations administered or financed by

such establishment, to recommend corrective action concerning

such problems, abuses, and deficiencies, and to report on the

progress made in implementing such corrective action.

(b)(1) In carrying out the responsibilities specified in subsection

(a)(1), each Inspector General shall—
Sec. 5 APP. 3—INSPECTOR GENERAL ACT OF 1978 352

(A) comply with standards established by the Comptroller

General of the United States for audits of Federal establishments, organizations, programs, activities, and functions;

(B) establish guidelines for determining when it shall be appropriate to use non-Federal auditors; and

(C) take appropriate steps to assure that any work performed by non-Federal auditors complies with the standards

established by the Comptroller General as described in paragraph (1).

(2) For purposes of determining compliance with paragraph

(1)(A) with respect to whether internal quality controls are in place

and operating and whether established audit standards, policies,

and procedures are being followed by Offices of Inspector General

of establishments defined under section 11(2), Offices of Inspector

General of designated Federal entities defined under section

8F(a)(2), and any audit office established within a Federal entity

defined under section 8F(a)(1), reviews shall be performed exclusively by an audit entity in the Federal Government, including the

General Accounting Office or the Office of Inspector General of

each establishment defined under section 11(2), or the Office of Inspector General of each designated Federal entity defined under

section 8F(a)(2).

(c) In carrying out the duties and responsibilities established

under this Act, each Inspector General shall give particular regard

to the activities of the Comptroller General of the United States

with a view toward avoiding duplication and insuring effective coordination and cooperation.

(d) In carrying out the duties and responsibilities established

under this Act, each Inspector General shall report expeditiously to

the Attorney General whenever the Inspector General has reasonable grounds to believe there has been a violation of Federal criminal law.

SEC. 5. SEMIANNUAL REPORTS; TRANSMITTAL TO CONGRESS; AVAILABILITY TO PUBLIC; IMMEDIATE REPORT ON SERIOUS OR

FLAGRANT PROBLEMS.

(a) Each Inspector General shall, not later than April 30 and October 31 of each year, prepare semiannual reports summarizing the

activities of the Office during the immediately preceding six-month

periods ending March 31 and September 30. Such reports shall include, but need not be limited to—

(1) a description of significant problems, abuses, and deficiencies relating to the administration of programs and operations of such establishment disclosed by such activities during

the reporting period;

(2) a description of the recommendations for corrective action

made by the Office during the reporting period with respect to

significant problems, abuses, or deficiencies identified pursuant

to paragraph (1);

(3) an identification of each significant recommendation described in previous semiannual reports on which corrective action has not been completed;

(4) a summary of matters referred to prosecutive authorities

and the prosecutions and convictions which have resulted;
353 Sec. 5 APP. 3—INSPECTOR GENERAL ACT OF 1978

(5) a summary of each report made to the head of the establishment under section 6(b)(2) during the reporting period;

(6) a listing, subdivided according to subject matter, of each

audit report issued by the Office during the reporting period

and for each audit report, where applicable, the total dollar

value of questioned costs (including a separate category for the

dollar value of unsupported costs) and the dollar value of recommendations that funds be put to better use;

(7) a summary of each particularly significant report;

(8) statistical tables showing the total number of audit reports and the total dollar value of questioned costs (including

a separate category for the dollar value of unsupported costs),

for audit reports—

(A) for which no management decision had been made by

the commencement of the reporting period;

(B) which were issued during the reporting period;

(C) for which a management decision was made during

the reporting period, including—

(i) the dollar value of disallowed costs; and

(ii) the dollar value of costs not disallowed; and

(D) for which no management decision has been made by

the end of the reporting period;

(9) statistical tables showing the total number of audit reports and the dollar value of recommendations that funds be

put to better use by management, for audit reports—

(A) for which no management decision had been made by

the commencement of the reporting period;

(B) which were issued during the reporting period;

(C) for which a management decision was made during

the reporting period, including—

(i) the dollar value of recommendations that were

agreed to by management; and

(ii) the dollar value of recommendations that were

not agreed to by management; and

(D) for which no management decision has been made by

the end of the reporting period;

(10) a summary of each audit report issued before the commencement of the reporting period for which no management

decision has been made by the end of the reporting period (including the date and title of each such report), an explanation

of the reasons such management decision has not been made,

and a statement concerning the desired timetable for achieving

a management decision on each such report;

(11) a description and explanation of the reasons for any significant revised management decision made during the reporting period; and

(12) information concerning any significant management decision with which the Inspector General is in disagreement.

(b) Semiannual reports of each Inspector General shall be furnished to the head of the establishment involved not later than

April 30 and October 31 of each year and shall be transmitted by

such head to the appropriate committees or subcommittees of the

Congress within thirty days after receipt of the report, together

with a report by the head of the establishment containing—
Sec. 5 APP. 3—INSPECTOR GENERAL ACT OF 1978 354

(1) any comments such head determines appropriate;

(2) statistical tables showing the total number of audit reports and the dollar value of disallowed costs, for audit reports—

(A) for which final action had not been taken by the

commencement of the reporting period;

(B) on which management decisions were made during

the reporting period;

(C) for which final action was taken during the reporting

period, including—

(i) the dollar value of disallowed costs that were recovered by management through collection, offset,

property in lieu of cash, or otherwise; and

(ii) the dollar value of disallowed costs that were

written off by management; and

(D) for which no final action has been taken by the end

of the reporting period;

(3) statistical tables showing the total number of audit reports and the dollar value of recommendations that funds be

put to better use by management agreed to in a management

decision, for audit reports—

(A) for which final action had not been taken by the

commencement of the reporting period;

(B) on which management decisions were made during

the reporting period;

(C) for which final action was taken during the reporting

period, including—

(i) the dollar value of recommendations that were

actually completed; and

(ii) the dollar value of recommendations that management has subsequently concluded should not or

could not be implemented or completed; and

(D) for which no final action has been taken by the end

of the reporting period; and

(4) a statement with respect to audit reports on which management decisions have been made but final action has not

been taken, other than audit reports on which a management

decision was made within the preceding year, containing—

(A) a list of such audit reports and the date each such

report was issued;

(B) the dollar value of disallowed costs for each report;

(C) the dollar value of recommendations that funds be

put to better use agreed to by management for each report;

and

(D) an explanation of the reasons final action has not

been taken with respect to each such audit report,

except that such statement may exclude such audit reports

that are under formal administrative or judicial appeal or upon

which management of an establishment has agreed to pursue

a legislative solution, but shall identify the number of reports

in each category so excluded.

(c) Within sixty days of the transmission of the semiannual reports of each Inspector General to the Congress, the head of each

establishment shall make copies of such report available to the
355 Sec. 5 APP. 3—INSPECTOR GENERAL ACT OF 1978

public upon request and at a reasonable cost. Within 60 days after

the transmission of the semiannual reports of each establishment

head to the Congress, the head of each establishment shall make

copies of such report available to the public upon request and at

a reasonable cost.

(d) Each Inspector General shall report immediately to the head

of the establishment involved whenever the Inspector General becomes aware of particularly serious or flagrant problems, abuses,

or deficiencies relating to the administration of programs and operations of such establishment. The head of the establishment shall

transmit any such report to the appropriate committees or subcommittees of Congress within seven calendar days, together with

a report by the head of the establishment containing any comments

such head deems appropriate.

(e)(1) Nothing in this section shall be construed to authorize the

public disclosure of information which is—

(A) specifically prohibited from disclosure by any other provision of law;

(B) specifically required by Executive order to be protected

from disclosure in the interest of national defense of national

security or in the conduct of foreign affairs; or

(C) a part of an ongoing criminal investigation.

(2) Notwithstanding paragraph (1)(C), any report under this section may be disclosed to the public in a form which includes information with respect to a part of an ongoing criminal investigation

if such information has been included in a public record.

(3) Except to the extent and in the manner provided under section 6103(f) of the Internal Revenue Code of 1986 [26 U.S.C.A. Sec.

6103(f)], nothing in this section or in any other provision of this Act

shall be construed to authorize or permit the withholding of information from the Congress, or from any committee or subcommittee

thereof.

(f) As used in this section—

(1) the term ‘‘questioned cost’’ means a cost that is questioned by the Office because of—

(A) an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other

agreement or document governing the expenditure of

funds;

(B) a finding that, at the time of the audit, such cost is

not supported by adequate documentation; or

(C) a finding that the expenditure of funds for the intended purpose is unnecessary or unreasonable;

(2) the term ‘‘unsupported cost’’ means a cost that is questioned by the Office because the Office found that, at the time

of the audit, such cost is not supported by adequate documentation;

(3) the term ‘‘disallowed cost’’ means a questioned cost that

management, in a management decision, has sustained or

agreed should not be charged to the Government;

(4) the term ‘‘recommendation that funds be put to better

use’’ means a recommendation by the Office that funds could

be used more efficiently if management of an establishment
Sec. 1 APP. 3—INSPECTOR GENERAL ACT OF 1978 356

took actions to implement and complete the recommendation,

including—

(A) reductions in outlays;

(B) deobligation of funds from programs or operations;

(C) withdrawal of interest subsidy costs on loans or loan

guarantees, insurance, or bonds;

(D) costs not incurred by implementing recommended

improvements related to the operations of the establishment, a contractor or grantee;

(E) avoidance of unnecessary expenditures noted in

preaward reviews of contract or grant agreements; or

(F) any other savings which are specifically identified;

(5) the term ‘‘management decision’’ means the evaluation by

the management of an establishment of the findings and recommendations included in an audit report and the issuance of

a final decision by management concerning its response to such

findings and recommendations, including actions concluded to

be necessary; and

(6) the term ‘‘final action’’ means—

(A) the completion of all actions that the management of

an establishment has concluded, in its management decision, are necessary with respect to the findings and recommendations included in an audit report; and

(B) in the event that the management of an establishment concludes no action is necessary, final action occurs

when a management decision has been made.

NOTE

Prompt Resolution of Audit Recommendations

Pub. L. 103–355, Title Vi, Sec. 6009, Oct. 13, 1994, 108 Stat.

3367, provides that: ‘‘Federal agencies shall resolve or take corrective action on all Office of Inspector General audit report findings

within a maximum of six months after their issuance, or, in case

of audits performed by non-Federal auditors, six months after receipt of the reports by the Federal Government.’’

[Note effective Oct. 13, 1994, except as otherwise provided, see section 10001 of Pub. L. 103–355, set out as a note under section 251

of Title 41, Public Contracts.]

SEC. 6. AUTHORITY OF INSPECTOR GENERAL; INFORMATION AND ASSISTANCE FROM FEDERAL AGENCIES; UNREASONABLE

REFUSAL; OFFICE SPACE AND EQUIPMENT.

(a) In addition to the authority otherwise provided by this Act,

each Inspector General, in carrying out the provisions of this Act,

is authorized—

(1) to have access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available

to the applicable establishment which relate to programs and

operations with respect to which that Inspector General has responsibilities under this Act;

(2) to make such investigations and reports relating to the

administration of the programs and operations of the applica-
357 Sec. 1 APP. 3—INSPECTOR GENERAL ACT OF 1978

ble establishment as are, in the judgment of the Inspector General, necessary or desirable;

(3) to request such information or assistance as may be necessary for carrying out the duties and responsibilities provided

by this Act from any Federal, State, or local governmental

agency or unit thereof;

(4) to require by subpoena the production of all information,

documents, reports, answers, records, accounts, papers, and

other data and documentary evidence necessary in the performance of the functions assigned by this Act, which subpoena, in the case of contumacy or refusal to obey, shall be enforceable by order of any appropriate United States district

court: Provided, That procedures other than subpoenas shall be

used by the Inspector General to obtain documents and information from Federal agencies;

(5) to administer to or take from any person an oath, affirmation, or affidavit, whenever necessary in the performance of

the functions assigned by this Act, which oath, affirmation, or

affidavit when administered or taken by or before an employee

of an Office of Inspector General designated by the Inspector

General shall have the same force and effect as if administered

or taken by or before an officer having a seal;

(6) to have direct and prompt access to the head of the establishment involved when necessary for any purpose pertaining

to the performance of functions and responsibilities under this

Act;

(7) to select, appoint, and employ such officers and employees

as may be necessary for carrying out the functions, powers,

and duties of the Office subject to the provisions of Title 5,

United States Code, governing appointments in the competitive

service, and the provisions of chapter 51 and subchapter III of

chapter 53 of such title relating to classification and General

Schedule pay rates;

(8) to obtain services as authorized by section 3109 of Title

5, United States Code, at daily rates not to exceed the equivalent rate prescribed for grade GS–18 of the General Schedule

by section 5332 of Title 5, United States Code; and

(9) to the extent and in such amounts as may be provided

in advance by appropriations Acts, to enter into contracts and

other arrangements for audits, studies, analyses, and other

services with public agencies and with private persons, and to

make such payments as may be necessary to carry out the provisions of this Act.

(b)(1) Upon request of an Inspector General for information or assistance under subsection (a)(3), the head of any Federal agency involved shall, insofar as is practicable and not in contravention of

any existing statutory restriction or regulation of the Federal agency from which the information is requested, furnish to such Inspector General, or to an authorized designee, such information or assistance.

(2) Whenever information or assistance requested under subsection (a)(1) or (a)(3) is, in the judgment of an Inspector General,

unreasonably refused or not provided, the Inspector General shall
Sec. 7 APP. 3—INSPECTOR GENERAL ACT OF 1978 358

report the circumstances to the head of the establishment involved

without delay.

(c) Each head of an establishment shall provide the Office within

such establishment with appropriate and adequate office space at

central and field office locations of such establishment, together

with such equipment, office supplies, and communications facilities

and services as may be necessary for the operation of such offices,

and shall provide necessary maintenance services for such offices

and the equipment and facilities located therein.

(d) For purposes of the provisions of title 5, United States Code,

governing the Senior Executive Service, any reference in such provisions to the ‘‘appointing authority’’ for a member of the Senior

Executive Service or for a Senior Executive Service position shall,

if such member or position is or would be within the Office of an

Inspector General, be deemed to be a reference to such Inspector

General.

SEC. 7. COMPLAINTS BY EMPLOYEES; DISCLOSURE OF IDENTITY; REPRISALS.

(a) The Inspector General may receive and investigate complaints or information from an employee of the establishment concerning the possible existence of an activity constituting a violation

of law, rules, or regulations, or mismanagement, gross waste of

funds, abuse of authority or a substantial and specific danger to

the public health and safety.

(b) The Inspector General shall not, after receipt of a complaint

or information from an employee, disclose the identity of the employee without the consent of the employee, unless the Inspector

General determines such disclosure is unavoidable during the

course of the investigation.

(c) Any employee who has authority to take, direct others to take,

recommend, or approve any personnel action, shall not, with respect to such authority, take or threaten to take any action against

any employee as a reprisal for making a complaint or disclosing information to an Inspector General, unless the complaint was made

or the information disclosed with the knowledge that it was false

or with willful disregard for its truth or falsity.

SEC. 8A. SPECIAL PROVISIONS RELATING TO THE AGENCY FOR INTERNATIONAL DEVELOPMENT.

(a) In addition to the other duties and responsibilities specified

in this Act, the Inspector General of the Agency for International

Development—

(1) shall supervise, direct, and control all security activities

relating to the programs and operations of that Agency, subject

to the supervision of the Administrator of that Agency; and

(2) to the extent requested by the Director of the United

States International Development Cooperation Agency (after

consultation with the Administrator of the Agency for International Development), shall supervise, direct, and control all

audit, investigative, and security activities relating to programs and operations within the United States International

Development Cooperation Agency.

(b) In addition to the Assistant Inspector Generals provided for

in section 3(d) of this Act, the Inspector General of the Agency for
359 Sec. 8B APP. 3—INSPECTOR GENERAL ACT OF 1978

International Development shall, in accordance with applicable

laws and regulations governing the civil service, appoint an Assistant Inspector General for Security who shall have the responsibility for supervising the performance of security activities relating to

programs and operations of the Agency for International Development.

(c) The semiannual reports required to be submitted to the Administrator of the Agency for International Development pursuant

to section 5(b) of this Act shall also be submitted to the Director

of the United States International Development Cooperation Agency.

(d) In addition to the officers and employees provided for in section 6(a)(6) of this Act, members of the Foreign Service may, at the

request of the Inspector General of the Agency for International

Development, be assigned as employees of the Inspector General.

Members of the Foreign Service so assigned shall be responsible

solely to the Inspector General, and the Inspector General (or his

or her designee) shall prepare the performance evaluation reports

for such members.

(e) In establishing and staffing field offices pursuant to section

6(c) of this Act, the Administrator of the Agency for International

Development shall not be bound by overseas personnel ceilings established under the Monitoring Overseas Direct Employment policy.

(f) The reference in section 7(a) of this Act to an employee of the

establishment shall, with respect to the Inspector General of the

Agency for International Development, be construed to include an

employee of or under the United States International Development

Cooperation Agency.

(g) The Inspector General of the Agency for International Development shall be in addition to the officers provided for in section

624(a) of the Foreign Assistance Act of 1961 [22 U.S.C.A. Sec.

2384(a)].

(h) As used in this Act, the term ‘‘Agency for International Development’’ includes any successor agency primarily responsible for

administering part I of the Foreign Assistance Act of 1961 [22

U.S.C.A. Sec. 2151 et seq.].

SEC. 8B. SPECIAL PROVISIONS CONCERNING THE NUCLEAR REGULATORY COMMISSION.

(a) The Chairman of the Commission may delegate the authority

specified in the second sentence of section 3(a) to another member

of the Nuclear Regulatory Commission, but shall not delegate such

authority to any other officer or employee of the Commission.

(b) Notwithstanding sections 6(a)(7) and (8), the Inspector General of the Nuclear Regulatory Commission is authorized to select,

appoint, and employ such officers and employees as may be necessary for carrying out the functions, powers and duties of the Office of Inspector General and to obtain the temporary or intermittent services of experts or consultants or an organization thereof,

subject to the applicable laws and regulations that govern such selections, appointments and employment, and the obtaining of such

services, within the Nuclear Regulatory Commission.
Sec. 8C APP. 3—INSPECTOR GENERAL ACT OF 1978 360

SEC. 8C. SPECIAL PROVISIONS CONCERNING THE FEDERAL DEPOSIT

INSURANCE CORPORATION.

(a) DELEGATION.—The Chairperson of the Federal Deposit Insurance Corporation may delegate the authority specified in the second sentence of section 3(a) to the Vice Chairperson of the Board

of Directors of the Federal Deposit Insurance Corporation, but may

not delegate such authority to any other officer or employee of the

Corporation.

(b) PERSONNEL.—Notwithstanding paragraphs (7) and (8) of section 6(a), the Inspector General of the Federal Deposit Insurance

Corporation may select, appoint, and employ such officers and employees as may be necessary for carrying out the functions, powers,

and duties of the Office of Inspector General and to obtain the temporary or intermittent services of experts or consultants or an organization of experts or consultants, subject to the applicable laws

and regulations that govern such selections, appointments, and employment, and the obtaining of such services, within the Federal

Deposit Insurance Corporation.

SEC. 8D. SPECIAL PROVISIONS CONCERNING THE DEPARTMENT OF

THE TREASURY.

(a)(1) Notwithstanding the last two sentences of section 3(a), the

Inspector General shall be under the authority, direction, and control of the Secretary of the Treasury with respect to audits or investigations, or the issuance of subpoenas, which require access to

sensitive information concerning—

(A) ongoing criminal investigations or proceedings;

(B) undercover operations;

(C) the identity of confidential sources, including protected

witnesses;

(D) deliberations and decisions on policy matters, including

documented information used as a basis for making policy decisions, the disclosure of which could reasonably be expected to

have a significant influence on the economy or market behavior;

(E) intelligence or counterintelligence matters; or

(F) other matters the disclosure of which would constitute a

serious threat to national security or to the protection of any

person or property authorized protection by section 3056 of

title 18, United States Code, section 202 of title 3, United

States Code, or any provision of the Presidential Protection Assistance Act of 1976 (18 U.S.C. 3056 note; Public Law 94–524).

(2) With respect to the information described under paragraph

(1), the Secretary of the Treasury may prohibit the Inspector General from carrying out or completing any audit or investigation, or

from issuing any subpoena, after such Inspector General has decided to initiate, carry out, or complete such audit or investigation

or to issue such subpoena, if the Secretary determines that such

prohibition is necessary to prevent the disclosure of any information described under paragraph (1) or to prevent significant impairment to the national interests of the United States.

(3) If the Secretary of the Treasury exercises any power under

paragraph (1) or (2), the Secretary of the Treasury shall notify the

Inspector General in writing stating the reasons for such exercise.

Within 30 days after receipt of any such notice, the Inspector Gen-
361 Sec. 8D APP. 3—INSPECTOR GENERAL ACT OF 1978

eral shall transmit a copy of such notice to the Committees on Governmental Affairs and Finance of the Senate and the Committees

on Government Operations and Ways and Means of the House of

Representatives, and to other appropriate committees or subcommittees of the Congress.

(b) In carrying out the duties and responsibilities specified in this

Act, the Inspector General of the Department of the Treasury shall

have oversight responsibility for the internal investigations performed by the Office of Internal Affairs of the Bureau of Alcohol,

Tobacco and Firearms, the Office of Internal Affairs of the United

States Customs Service, and the Office of Inspections of the United

States Secret Service, and the internal audits and internal investigations performed by the Office of Assistant Commissioner (Inspection) of the Internal Revenue Service. The head of each such

office shall promptly report to the Inspector General the significant

activities being carried out by such office.

(c) Notwithstanding subsection (b), the Inspector General may

initiate, conduct and supervise such audits and investigations in

the Department of the Treasury (including the bureaus and services referred to in subsection (b)) as the Inspector General considers appropriate.

(d) If the Inspector General initiates an audit or investigation

under subsection (c) concerning a bureau or service referred to in

subsection (b), the Inspector General may provide the head of the

office of such bureau or service referred to in subsection (b) with

written notice that the Inspector General has initiated such an

audit or investigation. If the Inspector General issues a notice

under the preceding sentence, no other audit or investigation shall

be initiated into the matter under audit or investigation by the Inspector General and any other audit or investigation of such matter

shall cease.

(e)(1) The Inspector General shall have access to returns and return information, as defined in section 6103(b) of the Internal Revenue Code of 1986, only in accordance with the provisions of section 6103 of such Code [26 U.S.C.A. Sec. 6103] and this Act.

(2) Access by the Inspector General to returns and return information under section 6103(h)(1) of such Code shall be subject to the

following additional requirements:

(A) In order to maintain internal controls over access to returns and return information, the Inspector General, or in the

absence of the Inspector General, the Acting Inspector General,

the Deputy Inspector General, the Assistant Inspector General

for Audits, or the Assistant Inspector General for Investigations, shall provide to the Assistant Commissioner (Inspection)

of the Internal Revenue Service written notice of the Inspector

General’s intent to access returns and return information. If

the Inspector General determines that the Inspection Service

of the Internal Revenue Service should not be made aware of

a notice of access to returns and return information, such notice shall be provided to the Senior Deputy Commissioner of

Internal Revenue.

(B) Such notice shall clearly indicate the specific returns or

return information being accessed, contain a certification by

the Inspector General, or in the absence of the Inspector Gen-
Sec. 8E APP. 3—INSPECTOR GENERAL ACT OF 1978 362

eral, the Acting Inspector General, the Deputy Inspector General, the Assistant Inspector General for Audits, or the Assistant Inspector General for Investigations, that the returns or

return information being accessed are needed for a purpose described under section 6103(h)(1) of the Internal Revenue Code

of 1986, and identify those employees of the Office of Inspector

General of the Department of the Treasury who may receive

such returns or return information.

(C) The Internal Revenue Service shall maintain the same

system of standardized records or accountings of all requests

from the Inspector General for inspection or disclosure of returns and return information (including the reasons for and

dates of such requests), and of returns and return information

inspected or disclosed pursuant to such requests, as described

under section 6103(p)(3)(A) of the Internal Revenue Code of

1986. Such system of standardized records or accountings shall

also be available for examination in the same manner as provided under section 6103(p)(3) of the Internal Revenue Code of

1986.

(D) The Inspector General shall be subject to the same safeguards and conditions for receiving returns and return information as are described under section 6103(p)(4) of the Internal Revenue Code of 1986.

(f) An audit or investigation conducted by the Inspector General

shall not affect a final decision of the Secretary of the Treasury or

his delegate under section 6406 of the Internal Revenue Code of

1986 [26 U.S.C.A. Sec. 6406].

(g) Notwithstanding section 4(d), in matters involving chapter 75

of the Internal Revenue Code of 1986 [26 U.S.C.A. Secs. 7201 to

7487], the Inspector General shall report expeditiously to the Attorney General only offenses under section 7214 of such Code [26

U.S.C.A. Sec. 7214], unless the Inspector General obtains the consent of the Commissioner of Internal Revenue to exercise additional reporting authority with respect to such chapter.

(h) Any report required to be transmitted by the Secretary of the

Treasury to the appropriate committees or subcommittees of the

Congress under section 5(d) shall also be transmitted, within the

seven-day period specified under such section, to the Committees

on Governmental Affairs and Finance of the Senate and the Committees on Government Operations and Ways and Means of the

House of Representatives.

SEC. 8E. SPECIAL PROVISIONS CONCERNING THE DEPARTMENT OF

JUSTICE.

(a)(1) Notwithstanding the last two sentences of section 3(a), the

Inspector General shall be under the authority, direction, and control of the Attorney General with respect to audits or investigations, or the issuance of subpoenas, which require access to sensitive information concerning—

(A) ongoing civil or criminal investigations or proceedings;

(B) undercover operations;

(C) the identity of confidential sources, including protected

witnesses;

(D) intelligence or counterintelligence matters; or
363 Sec. 8F APP. 3—INSPECTOR GENERAL ACT OF 1978

(E) other matters the disclosure of which would constitute a

serious threat to national security.

(2) With respect to the information described under paragraph

(1), the Attorney General may prohibit the Inspector General from

carrying out or completing any audit or investigation, or from issuing any subpoena, after such Inspector General has decided to initiate, carry out, or complete such audit or investigation or to issue

such subpoena, if the Attorney General determines that such prohibition is necessary to prevent the disclosure of any information described under paragraph (1) or to prevent the significant impairment to the national interests of the United States.

(3) If the Attorney General exercises any power under paragraph

(1) or (2), the Attorney General shall notify the Inspector General

in writing stating the reasons for such exercise. Within 30 days

after receipt of any such notice, the Inspector General shall transmit a copy of such notice to the Committees on Governmental Affairs and Judiciary of the Senate and the Committees on Government Operations and Judiciary of the House of Representatives,

and to other appropriate committees or subcommittees of the Congress.

(b) In carrying out the duties and responsibilities specified in this

Act, the Inspector General of the Department of Justice—

(1) may initiate, conduct and supervise such audits and investigations in the Department of Justice as the Inspector General considers appropriate;

(2) shall give particular regard to the activities of the Counsel, Office of Professional Responsibility of the Department and

the audit, internal investigative, and inspection units outside

the Office of Inspector General with a view toward avoiding

duplication and insuring effective coordination and cooperation;

and

(3) shall refer to the Counsel, Office of Professional Responsibility of the Department for investigation, information or allegations relating to the conduct of an officer or employee of

the Department of Justice employed in an attorney, criminal

investigative, or law enforcement position that is or may be a

violation of law, regulation, or order of the Department or any

other applicable standard of conduct, except that no such referral shall be made if the officer or employee is employed in the

Office of Professional Responsibility of the Department.

(c) Any report required to be transmitted by the Attorney General to the appropriate committees or subcommittees of the Congress under section 5(d) shall also be transmitted, within the

seven-day period specified under such section, to the Committees

on the Judiciary and Governmental Affairs of the Senate and the

Committees on the Judiciary and Government Operations of the

House of Representatives.

SEC. 8F. SPECIAL PROVISIONS CONCERNING THE CORPORATION FOR

NATIONAL AND COMMUNITY SERVICE.

(a) Notwithstanding the provisions of paragraphs (7) and (8) of

section 6(a), it is within the exclusive jurisdiction of the Inspector

General of the Corporation for National and Community Service

to—
Sec. 8G APP. 3—INSPECTOR GENERAL ACT OF 1978 364

(1) appoint and determine the compensation of such officers

and employees in accordance with section 195(b) of the National and Community Service Trust Act of 1993 [42 U.S.C.A.

Sec. 12651f(b)]; and

(2) procure the temporary and intermittent services of and

compensate such experts and consultants, in accordance with

section 3109(b) of title 5, United States Code [5 U.S.C.A. Sec.

3109(b)],

as may be necessary to carry out the functions, powers, and duties

of the Inspector General.

(b) No later than the date on which the Chief Executive Officer

of the Corporation for National and Community Service transmits

any report to the Congress under subsection (a) or (b) of section 5,

the Chief Executive Officer shall transmit such report to the Board

of Directors of such Corporation.

(c) No later than the date on which the Chief Executive Officer

of the Corporation for National and Community Service transmits

a report described under section 5(b) to the Board of Directors as

provided under subsection (b) of this section, the Chief Executive

Officer shall also transmit any audit report which is described in

the statement required under section 5(b)(4) to the Board of Directors. All such audit reports shall be placed on the agenda for review at the next scheduled meeting of the Board of Directors following such transmittal. The Chief Executive Officer of the Corporation shall be present at such meeting to provide any information relating to such audit reports.

(d) No later than the date on which the Inspector General of the

Corporation for National and Community Service reports a problem, abuse, or deficiency under section 5(d) to the Chief Executive

Officer of the Corporation, the Chief Executive Officer shall report

such problem, abuse, or deficiency to the Board of Directors.

SEC. 8G. REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED

FEDERAL ENTITIES

(a) Notwithstanding section 11 of this Act, as used in this section—

(1) the term ‘‘Federal entity’’ means any Government corporation (within the meaning of section 103(1) of title 5, United

States Code), any Government controlled corporation (within

the meaning of section 103(2) of such title), or any other entity

in the Executive branch of the Government, or any independent regulatory agency, but does not include—

(A) an establishment (as defined under section 11(2) of

this Act) or part of an establishment;

(B) a designated Federal entity (as defined under paragraph (2) of this subsection) or part of a designated Federal entity;

(C) the Executive Office of the President;

(D) the Central Intelligence Agency;

(E) the General Accounting Office; or

(F) any entity in the judicial or legislative branches of

the Government, including the Administrative Office of the

United States Courts and the Architect of the Capitol and

any activities under the direction of the Architect of the

Capitol;
365 Sec. 8G APP. 3—INSPECTOR GENERAL ACT OF 1978

(2) the term ‘‘designated Federal entity’’ means Amtrak, the

Appalachian Regional Commission, the Board of Governors of

the Federal Reserve System, the Board for International

Broadcasting, the Commodity Futures Trading Commission,

the Consumer Product Safety Commission, the Corporation for

Public Broadcasting, the Equal Employment Opportunity Commission, the Farm Credit Administration, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Election Commission, the Federal Housing Finance Board, the Federal Labor Relations Authority, the Federal Maritime Commission, the Federal Trade Commission, the

Interstate Commerce Commission, the Legal Services Corporation, the National Archives and Records Administration, the

National Credit Union Administration, the National Endowment for the Arts, the National Endowment for the Humanities, the National Labor Relations Board, the National Science

Foundation, the Panama Canal Commission, the Peace Corps,

the Pension Benefit Guaranty Corporation, the Securities and

Exchange Commission, the Smithsonian Institution, the Tennessee Valley Authority, the United States International Trade

Commission, and the United States Postal Service;

(3) the term ‘‘head of the Federal entity’’ means any person

or persons designated by statute as the head of a Federal entity, and if no such designation exists, the chief policymaking

officer or board of a Federal entity as identified in the list published pursuant to subsection (h)(1) of this section;

(4) the term ‘‘head of the designated Federal entity’’ means

any person or persons designated by statute as the head of a

designated Federal entity and if no such designation exists, the

chief policymaking officer or board of a designated Federal entity as identified in the list published pursuant to subsection

(h)(1) of this section, except that with respect to the National

Science Foundation, such term means the National Science

Board;

(5) the term ‘‘Office of Inspector General’’ means an Office of

Inspector General of a designated Federal entity; and

(6) the term ‘‘Inspector General’’ means an Inspector General

of a designated Federal entity.

(b) No later than 180 days after October 18, 1988, there shall be

established and maintained in each designated Federal entity an

Office of Inspector General. The head of the designated Federal entity shall transfer to such office the offices, units, or other components, and the functions, powers, or duties thereof, that such head

determines are properly related to the functions of the Office of Inspector General and would, if so transferred, further the purposes

of this section. There shall not be transferred to such office any

program operating responsibilities.

(c) Except as provided under subsection (f) of this section, the Inspector General shall be appointed by the head of the designated

Federal entity in accordance with the applicable laws and regulations governing appointments within the designated Federal entity.

(d) Each Inspector General shall report to and be under the general supervision of the head of the designated Federal entity, but

shall not report to, or be subject to supervision by, any other officer
Sec. 8G APP. 3—INSPECTOR GENERAL ACT OF 1978 366

or employee of such designated Federal entity. The head of the designated Federal entity shall not prevent or prohibit the Inspector

General from initiating, carrying out, or completing any audit or

investigation, or from issuing any subpena during the course of any

audit or investigation.

(e) If an Inspector General is removed from office or is transferred to another position or location within a designated Federal

entity, the head of the designated Federal entity shall promptly

communicate in writing the reasons for any such removal or transfer to both Houses of the Congress.

(f)(1) The Chief Postal Inspector of the United States Postal Service shall also hold the position of Inspector General of the United

States Postal Service, and for purposes of this section, shall report

to, and be under the general supervision of, the Postmaster General of the United States Postal Service. The Postmaster General,

in consultation with the Governors of the United States Postal

Service, shall appoint the Chief Postal Inspector. The Postmaster

General, with the concurrence of the Governors of the United

States Postal Service, shall have power to remove the Chief Postal

Inspector or transfer the Chief Postal Inspector to another position

or location within the United States Postal Service. If the Chief

Postal Inspector is removed or transferred in accordance with this

subsection, the Postmaster General shall promptly notify both

Houses of the Congress in writing of the reasons for such removal

or transfer.

(2) For purposes of paragraph (1), the term ‘‘Governors’’ has the

same meaning as such term is defined under section 102(3) of title

39, United States Code.

(g)(1) Sections 4, 5, 6 (other than subsections (a)(7) and (a)(8)

thereof), and 7 of this Act shall apply to each Inspector General

and Office of Inspector General of a designated Federal entity and

such sections shall be applied to each designated Federal entity

and head of the designated Federal entity (as defined under subsection (a)) by substituting—

(A) ‘‘designated Federal entity’’ for ‘‘establishment’’; and

(B) ‘‘head of the designated Federal entity’’ for ‘‘head of the

establishment’’.

(2) In addition to the other authorities specified in this Act, an

Inspector General is authorized to select, appoint, and employ such

officers and employees as may be necessary for carrying out the

functions, powers, and duties of the Office of Inspector General and

to obtain the temporary or intermittent services of experts or consultants or an organization thereof, subject to the applicable laws

and regulations that govern such selections, appointments, and employment, and the obtaining of such services, within the designated

Federal entity.

(3) Notwithstanding the last sentence of subsection (d) of this

section, the provisions of subsection (a) of section 8C (other than

the provisions of subparagraphs (A), (B), (C), and (E) of subsection

(a)(1)) shall apply to the Inspector General of the Board of Governors of the Federal Reserve System and the Chairman of the

Board of Governors of the Federal Reserve System in the same

manner as such provisions apply to the Inspector General of the
367 Sec. 9 APP. 3—INSPECTOR GENERAL ACT OF 1978

Department of the Treasury and the Secretary of the Treasury, respectively.

(h)(1) No later than April 30, 1989, and annually thereafter, the

Director of the Office of Management and Budget, after consultation with the Comptroller General of the United States, shall publish in the Federal Register a list of the Federal entities and designated Federal entities and the head of each such entity (as defined under subsection (a) of this section).

(2) Beginning on October 31, 1989, and on October 31 of each

succeeding calendar year, the head of each Federal entity (as defined under subsection (a) of this section) shall prepare and transmit to the Director of the Office of Management and Budget and

to each House of the Congress a report which—

(A) states whether there has been established in the Federal

entity an office that meets the requirements of this section;

(B) specifies the actions taken by the Federal entity otherwise to ensure that audits are conducted of its programs and

operations in accordance with the standards for audit of governmental organizations, programs, activities, and functions issued by the Comptroller General of the United States, and includes a list of each audit report completed by a Federal or

non-Federal auditor during the reporting period and a summary of any particularly significant findings; and

(C) summarizes any matters relating to the personnel, programs, and operations of the Federal entity referred to prosecutive authorities, including a summary description of any preliminary investigation conducted by or at the request of the

Federal entity concerning these matters, and the prosecutions

and convictions which have resulted.

SEC. 8H. RULE OF CONSTRUCTION OF SPECIAL PROVISIONS.

The special provisions under section 8, 8A, 8B, 8C, 8D, or 8E of

this Act relate only to the establishment named in such section and

no inference shall be drawn from the presence or absence of a provision in any such section with respect to an establishment not

named in such section or with respect to a designated Federal entity as defined under section 8F(a).

SEC. 9. TRANSFER OF FUNCTIONS.

(a) There shall be transferred—

(1) to the Office of Inspector General—

(A) of the Department of Agriculture, the offices of that

department referred to as the ‘‘Office of Investigation’’ and

the ‘‘Office of Audit’’;

(B) of the Department of Commerce, the offices of that

department referred to as the ‘‘Office of Audits’’ and the

‘‘Investigations and Inspections Staff’’ and that portion of

the office referred to as the ‘‘Office of Investigations and

Security’’ which has responsibility for investigation of alleged criminal violations and program abuse;

(C) of the Department of Defense, the offices of that department referred to as the ‘‘Defense Audit Service’’ and

the ‘‘Office of Inspector General, Defense Logistics Agency’’, and that portion of the office of that department referred to as the ‘‘Defense Investigative Service’’ which has
Sec. 9 APP. 3—INSPECTOR GENERAL ACT OF 1978 368

responsibility for the investigation of alleged criminal violations;

(D) of the Department of Education, all functions of the

Inspector General of Health, Education, and Welfare or of

the Office of Inspector General of Health, Education, and

Welfare relating to functions transferred by section 301 of

the Department of Education Organization Act [20

U.S.C.A. Sec. 3441];

(E) of the Department of Energy, the Office of Inspector

General (as established by section 208 of the Department

of Energy Organization Act) [42 U.S.C.A. former Sec.

7138];

(F) of the Department of Health and Human Services,

the Office of Inspector General (as established by title II

of Public Law 94–505) [42 U.S.C.A. former Secs. 3521–

3527];

(G) of the Department of Housing and Urban Development, the office of that department referred to as the ‘‘Office of Inspector General’’;

(H) of the Department of the Interior, the office of that

department referred to as the ‘‘Office of Audit and Investigation’’;

(I) of the Department of Justice, the offices of that Department referred to as (i) the ‘‘Audit Staff, Justice Management Division’’, (ii) the ‘‘Policy and Procedures Branch,

Office of the Comptroller, Immigration and Naturalization

Service’’, the ‘‘Office of Professional Responsibility, Immigration and Naturalization Service’’, and the ‘‘Office of Program Inspections, Immigration and Naturalization Service’’, (iii) the ‘‘Office of Internal Inspection, United States

Marshals Service’’, (iv) the ‘‘Financial Audit Section, Office

of Financial Management, Bureau of Prisons’’ and the ‘‘Office of Inspections, Bureau of Prisons’’, and (v) from the

Drug Enforcement Administration, that portion of the ‘‘Office of Inspections’’ which is engaged in internal audit activities, and that portion of the ‘‘Office of Planning and

Evaluation’’ which is engaged in program review activities;

(J) of the Department of Labor, the office of that department referred to as the ‘‘Office of Special Investigations’’;

(K) of the Department of Transportation, the offices of

that department referred to as the ‘‘Office of Investigations

and Security’’ and the ‘‘Office of Audit’’ of the Department,

the ‘‘Offices of Investigations and Security, Federal Aviation Administration’’, and ‘‘External Audit Divisions, Federal Aviation Administration’’, the ‘‘Investigations Division

and the External Audit Division of the Office of Program

Review and Investigation, Federal Highway Administration’’, and the ‘‘Office of Program Audits, Urban Mass

Transportation Administration’’;

(L) of the Department of the Treasury, the office of that

department referred to as the ‘‘Office of Inspector General’’, and, notwithstanding any other provision of law,

that portion of each of the offices of that department referred to as the ‘‘Office of Internal Affairs, Bureau of Alco-
369 Sec. 9 APP. 3—INSPECTOR GENERAL ACT OF 1978

hol, Tobacco, and Firearms’’, the ‘‘Office of Internal Affairs,

United States Customs Service’’, and the ‘‘Office of Inspections, United States Secret Service’’ which is engaged in

internal audit activities;

(M) of the Environmental Protection Agency, the offices

of that agency referred to as the ‘‘Office of Audit’’ and the

‘‘Security and Inspection Division’’;

(N) of the Federal Emergency Management Agency, the

office of that agency referred to as the ‘‘Office of Inspector

General’’;

(O) of the General Services Administration, the offices of

that agency referred to as the ‘‘Office of Audits’’ and the

‘‘Office of Investigations’’;

(P) of the National Aeronautics and Space Administration, the offices of that agency referred to as the ‘‘Management Audit Office’’ and the ‘‘Office of Inspections and Security’’;

(Q) of the Nuclear Regulatory Commission, the office of

that commission referred to as the ‘‘Office of Inspector and

Auditor’’;

(R) of the Office of Personnel Management, the offices of

that agency referred to as the ‘‘Office of Inspector General’’, the ‘‘Insurance Audits Division, Retirement and Insurance Group’’, and the ‘‘Analysis and Evaluation Division, Administration Group’’;

(S) of the Railroad Retirement Board, the Office of Inspector General (as established by section 23 of the Railroad Retirement Act of 1974);

(T) of the Small Business Administration, the office of

that agency referred to as the ‘‘Office of Audits and Investigations’’;

(U) of the Veterans’ Administration, the offices of that

agency referred to as the ‘‘Office of Audits’’ and the ‘‘Office

of Investigations’’; and

(V) of the Corporation for National and Community

Service, the Office of Inspector General of ACTION;

(W) of the Social Security Administration, the functions

of the Inspector General of the Department of Health and

Human Services which are transferred to the Social Security Administration by the Social Security Independence

and Program Improvements Act of 1994 (other than functions performed pursuant to section 105(a)(2) of such Act),

except that such transfers shall be made in accordance

with the provisions of such Act and shall not be subject to

subsections (b) through (d) of this section; and

(2) such other offices or agencies, or functions, powers, or duties thereof, as the head of the establishment involved may determine are properly related to the functions of the Office and

would, if so transferred, further the purposes of this Act,

except that there shall not be transferred to an Inspector General under paragraph (2) program operating responsibilities.

(b) The personnel, assets, liabilities, contracts, property, records,

and unexpended balances of appropriations, authorizations, allocations, and other funds employed, held, used, arising from, available
Sec. 10 APP. 3—INSPECTOR GENERAL ACT OF 1978 370

or to be made available, of any office or agency the functions, powers, and duties of which are transferred under subsection (a) are

hereby transferred to the applicable Office of Inspector General.

(c) Personnel transferred pursuant to subsection (b) shall be

transferred in accordance with applicable laws and regulations relating to the transfer of functions except that the classification and

compensation of such personnel shall not be reduced for one year

after such transfer.

(d) In any case where all the functions, powers, and duties of any

office or agency are transferred pursuant to this subsection, such

office or agency shall lapse. Any person who, on the effective date

of this Act [Oct. 1, 1978], held a position compensated in accordance with the General Schedule, and who, without a break in service, is appointed in an Office of Inspector General to a position having duties comparable to those performed immediately preceding

such appointment shall continue to be compensated in the new position at not less than the rate provided for the previous position,

for the duration of service in the new position.

SEC. 10. CONFORMING AND TECHNICAL AMENDMENTS.

[Section amended sections 5315 and 5316 of Title 5, Government

Organization and Employees, and section 3522 of Title 42, The

Public Health and Welfare, which amendments have been executed

to text.]

SEC. 11. DEFINITIONS.

As used in this Act—

(1) the term ‘‘head of the establishment’’ means the Secretary of Agriculture, Commerce, Defense, Education, Energy,

Health and Human Services, Housing and Urban Development, the Interior, Labor, State, Transportation, or the Treasury; the Attorney General; the Administrator of the Agency for

International Development, Environmental Protection, General

Services, National Aeronautics and Space, Small Business, or

Veterans’ Affairs; the Director of the Federal Emergency Management Agency, the Office of Personnel Management or the

United States Information Agency; the Chairman of the Nuclear Regulatory Commission or the Railroad Retirement

Board; the Chairperson of the Thrift Depositor Protection

Oversight Board; the Chief Executive Officer of the Corporation for National and Community Service; the Administrator of

the Community Development Financial Institutions Fund; and

the chief executive officer of the Resolution Trust Corporation;

and the Chairperson of the Federal Deposit Insurance Corporation; or the Commissioner of Social Security, Social Security

Administration; as the case may be;

(2) the term ‘‘establishment’’ means the Department of Agriculture, Commerce, Defense, Education, Energy, Health and

Human Services, Housing and Urban Development, the Interior, Justice, Labor, State, Transportation, or the Treasury; the

Agency for International Development, the Community Development Financial Institutions Fund, the Environmental Protection Agency, the Federal Emergency Management Agency,

the General Services Administration, the National Aeronautics

and Space Administration, the Nuclear Regulatory Commis-
371 Sec. 12 APP. 3—INSPECTOR GENERAL ACT OF 1978

sion, the Office of Personnel Management, the Railroad Retirement Board, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, the Small Business Administration, the United States Information Agency, the Corporation

for National and Community Service, or the Veterans’ Administration, or the Social Security Administration; as the case

may be;

(3) the term ‘‘Inspector General’’ means the Inspector General of an establishment;

(4) the term ‘‘Office’’ means the Office of Inspector General

of an establishment; and

(5) the term ‘‘Federal agency’’ means an agency as defined in

section 552(e) of Title 5 (including an establishment as defined

in paragraph (2)), United States Code, but shall not be construed to include the General Accounting Office.

SEC. 12. EFFECTIVE DATE.

The provisions of this Act and the amendments made by this Act

[see section 10 of this Act] shall take effect October 1, 1978.

* * * * * * *

The following list shows the section of 5 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

5 U.S.C. Requirements or Guidelines

Appendix 3 ................................... 12 C.F.R. 603, 1403; 20 C.F.R. 75, 76; 39 C.F.R. 221, 222, 224, 233, 265

GAO: Government Auditing Standards: 1994 Revision, see appendix III

373

SELECTED PROVISIONS OF TITLE 15,

UNITED STATES CODE—

COMMERCE AND TRADE

375

9This table of sections is not part of Title 15 but is included for the convenience of the reader.

Table of Sections of Selected Provisions of Title

15 9

TITLE 15, UNITED STATES CODE

COMMERCE AND TRADE

CHAPTER 14A—AID TO SMALL BUSINESS

Sec. 644. Awards or contracts.

CHAPTER 21—NATIONAL POLICY ON EMPLOYMENT AND PRODUCTIVITY

Sec. 1022. Economic Report of President; coverage; supplementary reports; reference to congressional joint committee; percentage rate of unemployment; definitions.
376

TITLE 15—COMMERCE AND TRADE

* * * * * * *

CHAPTER 14A—AID TO SMALL BUSINESS

SEC. 644. AWARDS OR CONTRACTS

(a) DETERMINATION.—To effectuate the purposes of this chapter,

small-business concerns within the meaning of this chapter shall

receive any award or contract or any part thereof, and be awarded

any contract for the sale of Government property, as to which it is

determined by the Administration and the contracting procurement

or disposal agency (1) to be in the interest of maintaining or mobilizing the Nation’s full productive capacity, (2) to be in the interest

of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts

for property and services for the Government in each industry category are placed with small-business concerns, or (4) to be in the

interest of assuring that a fair proportion of the total sales of Government property be made to small-business concerns; but nothing

contained in this chapter shall be construed to change any preferences or priorities established by law with respect to the sale of

electrical power or other property by the Government or any agency thereof. These determinations may be made for individual

awards or contracts or for classes of awards or contracts. If a proposed procurement includes in its statement of work goods or services currently being performed by a small business, and if the proposed procurement is in a quantity or estimated dollar value the

magnitude of which renders small business prime contract participation unlikely, or if a proposed procurement for construction seeks

to package or consolidate discrete construction projects, the Procurement Activity shall provide a copy of the proposed procurement

to the Procurement Activity’s Small Business Procurement Center

Representative at least 30 days prior to the solicitation’s issuance

along with a statement explaining (1) why the proposed acquisition

cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the

total requirement, (2) why delivery schedules cannot be established

on a realistic basis that will encourage small business participation

to the extent consistent with the actual requirements of the Government, (3) why the proposed acquisition cannot be offered so as

to make small business participation likely, or (4) why construction

cannot be procured as separate discrete projects. The thirty-day notification process shall occur concurrently with other processing

steps required prior to issuance of the solicitation. Within 15 days

after receipt of the proposed procurement and accompanying statement, if the Procurement Center Representative believes that the

procurement as proposed will render small business prime contract
377 Sec. 644 CH. 14A—AID TO SMALL BUSINESS

participation unlikely, the Representative shall recommend to the

Procurement Activity alternative procurement methods which

would increase small business prime contracting opportunities.

Whenever the Administration and the contracting procurement

agency fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or

agency by the Administrator. For purposes of clause (3) of the first

sentence of this subsection, an industry category is a discrete group

of similar goods and services. Such groups shall be determined by

the Administration in accordance with the four-digit standard industrial classification codes contained in the Standard Industrial

Classification Manual published by the Office of Management and

Budget, except that the Administration shall limit such an industry

category to a greater extent than provided under such classification

codes if the Administration receives evidence indicating that further segmentation for purposes of this paragraph is warranted due

to special capital equipment needs or special labor or geographic

requirements or to recognize a new industry. A market for goods

or services may not be segmented under the preceding sentence

due to geographic requirements unless the Government typically

designates the area where work for contracts for such goods or

services is to be performed and Government purchases comprise

the major portion of the entire domestic market for such goods or

services and, due to the fixed location of facilities, high mobilization costs, or similar economic factors, it is unreasonable to expect

competition from business concerns located outside of the general

areas where such concerns are located. A contract may not be

awarded under this subsection if the award of the contract would

result in a cost to the awarding agency which exceeds a fair market

price.

(b) PLACEMENT OF CONTRACTS BY CONTRACTING PROCUREMENT

AGENCY.—With respect to any work to be performed the amount of

which would exceed the maximum amount of any contract for

which a surety may be guaranteed against loss under section 694b

of this title, the contracting procurement agency shall, to the extent

practicable, place contracts so as to allow more than one small

business concern to perform such work.

(c) PROGRAMS FOR BLIND AND HANDICAPPED INDIVIDUALS.—(1) As

used in this subsection:

(A) The term ‘‘Committee’’ means the Committee for Purchase From People Who Are Blind or Severely Disabled established under section 46 of Title 41.

(B) The term ‘‘public or private organization for the handicapped’’ has the same meaning given such term in section 3(e).

(C) The term ‘‘handicapped individual’’ has the same meaning given such term in section 632(f) of this title.

(2)(A) During fiscal year 1995, public or private organizations for

the handicapped shall be eligible to participate in programs authorized under this section in an aggregate amount not to exceed

$40,000,000.

(B) None of the amounts authorized for participation by subparagraph (A) may be placed on the procurement list maintained by the

Committee pursuant to section 47 of Title 41.
Sec. 644 CH. 14A—AID TO SMALL BUSINESS 378

(3) The Administrator shall monitor and evaluate such participation.

(4)(A) Not later than ten days after the announcement of a proposed award of a contract by an agency or department to a public

or private organization for the handicapped, a for-profit small business concern that has experienced or is likely to experience severe

economic injury as the result of the proposed award may file an appeal of the proposed award with the Administrator.

(B) If such a concern files an appeal of a proposed award under

subparagraph (A) and the Administrator, after consultation with

the Executive Director of the Committee, finds that the concern has

experienced or is likely to experience severe economic injury as the

result of the proposed award, not later than thirty days after the

filing of the appeal, the Administration shall require each agency

and department having procurement powers to take such action as

may be appropriate to alleviate economic injury sustained or likely

to be sustained by the concern.

(5) Each agency and department having procurement powers

shall report to the Office of Federal Procurement Policy each time

a contract subject to paragraph (2)(A) is entered into, and shall include in its report the amount of the next higher bid submitted by

a for-profit small business concern. The Office of Federal Procurement Policy shall collect data reported under the preceding sentence through the Federal procurement data system and shall report to the Administration which shall notify all such agencies and

departments when the maximum amount of awards authorized

under paragraph (2)(A) has been made during any fiscal year.

(6) For the purpose of this subsection, a contract may be awarded

only if at least 75 per centum of the direct labor performed on each

item being produced under the contract in the sheltered workshop

or performed in providing each type of service under the contract

by the sheltered workshop is performed by handicapped individuals.

(7) Agencies awarding one or more contracts to such an organization pursuant to the provisions of this subsection may use

multiyear contracts, if appropriate.

(d) PRIORITY.—For purposes of this section priority shall be given

to the awarding of contracts and the placement of subcontracts to

small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within

areas of concentrated unemployment or underemployment or within labor surplus areas. Notwithstanding any other provision of law,

total labor surplus area set-asides pursuant to Defense Manpower

Policy Number 4 (32A C.F.R. Chapter 1) or any successor policy

shall be authorized if the Secretary or his designee specifically determines that there is a reasonable expectation that offers will be

obtained from a sufficient number of eligible concerns so that

awards will be made at reasonable prices. As soon as practicable

and to the extent possible, in determining labor surplus areas, consideration shall be given to those persons who would be available

for employment were suitable employment available. Until such

definition reflects such number, the present criteria of such policy

shall govern.
379 Sec. 644 CH. 14A—AID TO SMALL BUSINESS

(e), (f) Repealed.—Pub. L. 103–355, Title VII, Sec. 7101(a), Oct.

13, 1994, 108 Stat. 3367

(g) GOALS FOR PARTICIPATION OF SMALL BUSINESS CONCERNS IN

PROCUREMENT CONTRACTS.— (1) The President shall annually establish Government-wide

goals for procurement contracts awarded to small business concerns, small business concerns owned and controlled by socially

and economically disadvantaged individuals, and small business concerns owned and controlled by women. The Government-wide goal for participation by small business concerns

shall be established at not less than 20 percent of the total

value of all prime contract awards for each fiscal year. The

Government-wide goal for participation by small business concerns owned and controlled by socially and economically disadvantaged individuals shall be established at not less than 5

percent of the total value of all prime contract and subcontract

awards for each fiscal year. The Government-wide goal for participation by small business concerns owned and controlled by

women shall be established at not less than 5 percent of the

total value of all prime contract and subcontract awards for

each fiscal year. Notwithstanding the Government-wide goal,

each agency shall have an annual goal that presents, for that

agency, the maximum practicable opportunity for small business concerns, small business concerns owned and controlled

by socially and economically disadvantaged individuals, and

small business concerns owned and controlled by women to

participate in the performance of contracts let by such agency.

The Administration and the Administrator of the Office of Federal Procurement Policy shall, when exercising their authority

pursuant to paragraph (2), insure that the cumulative annual

prime contract goals for all agencies meet or exceed the annual

Government-wide prime contract goal established by the President pursuant to this paragraph.

(2) The head of each Federal agency shall, after consultation

with the Administration, establish goals for the participation

by small business concerns, owned and controlled by socially

and economically disadvantaged individuals, and by small

business concerns owned and controlled by women in procurement contracts of such agency. Goals established under this

subsection shall be jointly established by the Administration

and the head of each Federal agency and shall realistically reflect the potential of small business concerns, small business

concerns owned and controlled by socially and economically

disadvantaged individuals, and small business concerns owned

and controlled by women to perform such contracts and to perform subcontracts under such contracts. Whenever the Administration and the head of any Federal agency fail to agree on

established goals, the disagreement shall be submitted to the

Administrator of the Office of Federal Procurement Policy for

final determination. For the purpose of establishing goals

under this subsection, the head of each Federal agency shall

make consistent efforts to annually expand participation by

small business concerns from each industry category in procurement contracts of the agency, including participation by
Sec. 644 CH. 14A—AID TO SMALL BUSINESS 380

small business concerns owned and controlled by socially and

economically disadvantaged individuals and participation by

small business concerns owned and controlled by women. The

head of each Federal agency, in attempting to attain such participation, shall consider—

(A) contracts awarded as the result of unrestricted competition; and

(B) contracts awarded after competition restricted to eligible small business concerns under this section and under

the program established under section 637(a) of this title.

(h) REPORTS TO ADMINISTRATION; SUBMITTAL OF INFORMATION TO

CONGRESS.— (1) At the conclusion of each fiscal year, the head of each

Federal agency shall report to the Administration on the extent of participation by small business concerns, small business

concerns owned and controlled by socially and economically

disadvantaged individuals, and small business concerns owned

and controlled by women in procurement contracts of such

agency. Such reports shall contain appropriate justifications for

failure to meet the goals established under subsection (g) of

this section.

(2) The Administration shall annually compile and analyze

the reports submitted by the individual agencies pursuant to

paragraph (1) and shall submit them to the President. The Administration’s submission to the President shall include the following:

(A) The Government-wide goals for participation by

small business concerns, small business concerns owned

and controlled by socially and economically disadvantaged

individuals, and small business concerns owned and controlled by women and the performance in attaining such

goals.

(B) The goals in effect for each agency and the agency’s

performance in attaining such goals.

(C) An analysis of any failure to achieve the Government-wide goals or any individual agency goals and the actions planned by such agency (and approved by the Administration) to achieve the goals in the succeeding fiscal year.

(D) The number and the dollar value of contracts awarded to small business concerns, small business concerns

owned and controlled by socially and economically disadvantaged individuals, and small business concerns

owned and controlled by women through—

(i) noncompetitive negotiation,

(ii) competition restricted to small business concerns

owned and controlled by socially and economically disadvantaged individuals,

(iii) competition restricted to small business concerns, and

(iv) unrestricted competitions, for each agency and

on a Government-wide basis.

(E) The number and dollar value of subcontracts awarded to small business concerns, small business concerns

owned and controlled by socially and economically dis-
381 Sec. 644 CH. 14A—AID TO SMALL BUSINESS

advantaged individuals, and small business concerns

owned and controlled by women.

(F) The number and dollar value of prime contracts and

subcontracts awarded to small business concerns owned

and controlled by women.

(3) The President shall include the information required by

paragraph (2) in each annual report to the Congress on the

state of small business prepared pursuant to section 631b(a) of

this title.

(i) SMALL BUSINESS SET-ASIDES.—Nothing in this chapter or any

other provision of law precludes exclusive small business set-asides

for procurements of architectural and engineering services, research, development, test and evaluation, and each Federal agency

is authorized to develop such set-asides to further the interests of

small business in those areas.

(j) SMALL BUSINESS RESERVATION.— (1) Each contract for the purchase of goods and services that has an anticipated value greater than $2,500 but not greater

than $100,000 shall be reserved exclusively for small business

concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and are competitive with regard to

the quality and delivery of the goods or services being purchased.

(2) In carrying out paragraph (1), a contracting officer shall

consider a responsive offer timely received from an eligible

small business offeror.

(3) Nothing in paragraph (1) shall be construed as precluding an award of a contract with a value not greater than $100,000

under the authority of subsection (a) of section 637 of this title,

section 2323 of Title 10, section 712 of the Business Opportunity Development Reform Act of 1988 (Public Law 100–656;

15 U.S.C. 644 note), or section 7102 of the Federal Acquisition

Streamlining Act of 1994.

(k) OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION; DIRECTOR.—There is hereby established in each Federal

agency having procurement powers an office to be known as the

‘‘Office of Small and Disadvantaged Business Utilization’’. The

management of each such office shall be vested in an officer or employee of such agency who shall—

(1) be known as the ‘‘Director of Small and Disadvantaged

Business Utilization’’ for such agency,

(2) be appointed by the head of such agency,

(3) be responsible only to, and report directly to, the head of

such agency or to the deputy of such head, except that the director for the Office of the Secretary of Defense shall be responsible only to, and report directly to, such Secretary or the

Secretary’s designee,

(4) be responsible for the implementation and execution of

the functions and duties under this section and section 637 of

this title which relate to such agency,

(5) assist small business concerns to obtain payments, required late payment interest penalties, or information regarding payments due to such concerns from an executive agency
Sec. 644 CH. 14A—AID TO SMALL BUSINESS 382

or a contractor, in conformity with chapter 39 of Title 31 or

any other protection for contractors or subcontractors (including suppliers) that is included in the Federal Acquisition Regulation or any individual agency supplement to such Government-wide regulation,

(6) have supervisory authority over personnel of such agency

to the extent that the functions and duties of such personnel

relate to functions and duties under this section and section

637 of this title,

(7) assign a small business technical adviser to each office to

which the Administration has assigned a procurement center

representative—

(A) who shall be a full-time employee of the procuring

activity and shall be well qualified, technically trained and

familiar with the supplies or services purchased at the activity, and

(B) whose principal duty shall be to assist the Administration procurement center representative in his duties

and functions relating to this section and section 637 of

this title, and

(8) cooperate, and consult on a regular basis, with the Administration with respect to carrying out the functions and duties described in paragraph (4) of this subsection, and

(9) make recommendations to contracting officers as to

whether a particular contract requirement should be awarded

pursuant to subsection (a) of this section, or section 637(a) of

this title or section 2323 of Title 10. Such recommendations

shall be made with due regard to the requirements of subsection (m) of this section, and the failure of the contracting officer to accept any such recommendations shall be documented

and included within the appropriate contract file. This subsection shall not apply to the Administration.

(l) BREAKOUT PROCUREMENT CENTER REPRESENTATIVES.—(1) The

Administration shall assign to each major procurement center a

breakout procurement center representative with such assistance

as may be appropriate. The breakout procurement center representative shall carry out the activities described in paragraph (2),

and shall be an advocate for the breakout of items for procurement

through full and open competition, whenever appropriate, while

maintaining the integrity of the system in which such items are

used, and an advocate for the use of full and open competition,

whenever appropriate, for the procurement of supplies and services

by such center. Any breakout procurement center representative

assigned under this subsection shall be in addition to the representative referred to in subsection (k)(6) of this section.

(2) In addition to carrying out the responsibilities assigned by the

Administration, a breakout procurement center representative is

authorized to—

(A) attend any provisioning conference or similar evaluation

session during which determinations are made as to whether

requirements are to be procured through other than full and

open competition and make recommendations with respect to

such requirements to the members of such conference or session;
383 Sec. 644 CH. 14A—AID TO SMALL BUSINESS

(B) review, at any time, restrictions on competition previously imposed on items through acquisition method coding or

similar procedures, and recommend to personnel of the appropriate activity the prompt reevaluation of such limitations;

(C) review restrictions on competition arising out of restrictions on the rights of the United States in technical data, and,

when appropriate, recommend that personnel of the appropriate activity initiate a review of the validity of such an asserted restriction;

(D) obtain from any governmental source, and make available to personnel of the appropriate activity, technical data

necessary for the preparation of a competitive solicitation package for any item of supply or service previously procured noncompetitively due to the unavailability of such technical data;

(E) have access to procurement records and other data of the

procurement center commensurate with the level of such representative’s approved security clearance classification;

(F) receive unsolicited engineering proposals and, when appropriate (i) conduct a value analysis of such proposal to determine whether such proposal, if adopted, will result in lower

costs to the United States without substantially impeding legitimate acquisition objectives and forward to personnel of the

appropriate activity recommendations with respect to such proposal, or (ii) forward such proposals without analysis to personnel of the activity responsible for reviewing such proposals and

who shall furnish the breakout procurement center representative with information regarding the disposition of any such

proposal; and

(G) review the systems that account for the acquisition and

management of technical data within the procurement center

to assure that such systems provide the maximum availability

and access to data needed for the preparation of offers to sell

to the United States those supplies to which such data pertain

which potential offerors are entitled to receive.

(3) A breakout procurement center representative is authorized

to appeal the failure to act favorably on any recommendation made

pursuant to paragraph (2). Such appeal shall be filed and processed

in the same manner and subject to the same conditions and limitations as an appeal filed by the Administrator pursuant to subsection (a).

(4) The Administration shall assign and co-locate at least two

small business technical advisers to each major procurement center

in addition to such other advisers as may be authorized from time

to time. The sole duties of such advisers shall be to assist the

breakout procurement center representative for the center to which

such advisers are assigned in carrying out the functions described

in paragraph (2) and the representatives referred to in subsection

(k)(6) of this section.

(5)(A) The breakout procurement center representatives and

technical advisers assigned pursuant to this subsection shall be—

(i) full-time employees of the Administration; and

(ii) fully qualified, technically trained, and familiar with the

supplies and services procured by the major procurement center to which they are assigned.
Sec. 644 CH. 14A—AID TO SMALL BUSINESS 384

(B) In addition to the requirements of subparagraph (A), each

breakout procurement center representative, and at least one technical adviser assigned to such representative, shall be an accredited engineer.

(C) The Administration shall establish personnel positions for

breakout procurement representatives and advisers assigned pursuant to this subsection, which are classified at a grade level of the

General Schedule sufficient to attract and retain highly qualified

personnel.

(6) For purposes of this subsection, the term ‘‘major procurement

center’’ means a procurement center that, in the opinion of the Administrator, purchases substantial dollar amounts of other than

commercial items and which has the potential to incur significant

savings as the result of the placement of a breakout procurement

center representative.

(7)(A) At such times as the Administrator deems appropriate, the

breakout procurement center representative shall conduct familiarization sessions for contracting officers and other appropriate

personnel of the procurement center to which such representative

is assigned. Such sessions shall acquaint the participants with the

provisions of this subsection and shall instruct them in methods designed to further the purposes of such subsection.

(B) The breakout procurement center representative shall prepare and personally deliver an annual briefing and report to the

head of the procurement center to which such representative is assigned. Such briefing and report shall detail the past and planned

activities of the representative and shall contain such recommendations for improvement in the operation of the center as may be appropriate. The head of such center shall personally receive such

briefing and report and shall, within sixty calendar days after receipt, respond, in writing, to each recommendation made by such

representative.

(m) RELATIONSHIP TO OTHER PROCUREMENT PROGRAMS.—

(1) Each agency subject to the requirements of section 2323

of Title 10 shall, when implementing such requirements—

(A) establish policies and procedures that insure that

there will be no reduction in the number of dollar value of

contracts awarded pursuant to this section and section

637(a) of this title in order to achieve any goal or other

program objective; and

(B) assure that such requirements will not alter or

change the procurement process used to implement this

section or section 637(a) of this title.

(2) All procurement center representatives (including those

referred to in subsection (k)(6) of this section), in addition to

such other duties as may be assigned by the Administrator,

shall—

(A) monitor the performance of the procurement activities to which they are assigned to ascertain the degree of

compliance with the requirements of paragraph (1);

(B) report to their immediate supervisors all instances of

noncompliance with such requirements; and

(C) increase, insofar as possible, the number and dollar

value of procurements that may be used for the programs
385 Sec. 644 CH. 14A—AID TO SMALL BUSINESS

established under this section, section 637(a) of this title,

and section 2323 of Title 10.

(n) DETERMINATION OF LABOR SURPLUS AREAS.—For purposes of

this section, the determination of labor surplus areas shall be made

on the basis of the criteria in effect at the time of the determination, except that any minimum population criteria shall not exceed

twenty-five thousand. Such determination, as modified by the preceding sentence, shall be made by the Secretary of Labor.

(o) COSTS OF CONTRACT PERFORMANCE AND MANUFACTURING.—

(1) A concern may not be awarded a contract under subsection (a) as a small business concern unless the concern

agrees that—

(A) in the case of a contract for services (except construction), at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; and

(B) in the case of a contract for procurement of supplies

(other than procurement from a regular dealer in such

supplies), the concern will perform work for at least 50

percent of the cost of manufacturing the supplies (not including the cost of materials).

(2) The Administrator may change the percentage under subparagraph (A) or (B) of paragraph (1) if the Administrator determines that such change is necessary to reflect conventional

industry practices among business concerns that are below the

numerical size standard for businesses in that industry category.

(3) The Administration shall establish, through public rulemaking, requirements similar to those specified in paragraph

(1) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not

otherwise subject to the requirements of such paragraph. The

percentage applicable to any such requirement shall be determined in accordance with paragraph (2).

* * * * * * *

The following list shows the section of 15 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

5 U.S.C. Requirements or Guidelines

644 .............................................. 13 C.F.R. 121; 20 C.F.R. 654; 48 C.F.R. 2819
386

TITLE 15—COMMERCE AND TRADE

* * * * * * *

CHAPTER 21—NATIONAL POLICY ON EMPLOYMENT AND

PRODUCTIVITY

SEC. 1022. ECONOMIC REPORT OF PRESIDENT; COVERAGE; SUPPLEMENTARY REPORTS; REFERENCE TO CONGRESSIONAL

JOINT COMMITTEE; PERCENTAGE RATE OF UNEMPLOYMENT; DEFINITIONS.

(a) The President shall annually transmit to the Congress not

later than 10 days after the submission of the budget under section

1105(a) of Title 31, United States Code, with copies transmitted to

the Governor of each State and to other appropriate State and local

officials, an economic report (hereinafter in this chapter referred to

as the ‘‘Economic Report’’) together with the annual report of the

Council of Economic Advisers submitted in accord with section

1023(c) of this title, setting forth—

(1) the current and foreseeable trends in the levels of employment, unemployment, production, capital formation, real

income, Federal budget outlays and receipts, productivity,

international trade and payments, and prices, and a review

and analysis of recent domestic and international developments affecting economic trends in the Nation;

(2)(A) annual numerical goals for employment and unemployment, production, real income, productivity, Federal outlays as a proportion of gross national product, and prices for

the calendar year in which the Economic Report is transmitted

and for the following calendar year, designated as short-term

goals, which shall be consistent with achieving as rapidly as

feasible the goals of full employment and production, increased

real income, balanced growth, fiscal policies that would establish the share of an expanding gross national product accounted for by Federal outlays at the lowest level consistent

with national needs and priorities, a balanced Federal budget,

adequate productivity growth, price stability, achievement of

an improved trade balance, and proper attention to national

priorities; and

(B) annual numerical goals as specified in subparagraph (A)

for the three successive calendar years, designated as medium

term goals;

(3) employment objectives for certain significant subgroups of

the labor force, including youth, women, minorities, handicapped persons, veterans, and middle-aged and older persons;

and

(4) a program for carrying out the policy declared in section

1021 of this title, together with such recommendations for legislation as the President may deem necessary or desirable.
387 Sec. 1022 NATL. POLICY ON EMPLOYMT. & PRODUCTIVITY

(b) The President may transmit from time to time to the Congress reports supplementary to the Economic Report, each of which

shall include such supplementary or revised recommendations as

he may deem necessary or desirable to achieve the policy declared

in section 1021 of this title.

(c) The Economic Report, and all supplementary reports transmitted under subsection (b) of this section, shall, when transmitted

to Congress, be referred to the joint committee created by section

1024 of this title.

(d) For the purposes of the Full Employment and Balanced

Growth Act of 1978 [15 U.S.C.A. Sec. 3101 et seq.], the percentage

rate of unemployment as [FN1] a percentage of the civilian labor

force as set forth by the Bureau of Labor Statistics in the Department of Labor as computed under the procedures in effect as of October 27, 1978.

(e) For the purpose of the Full Employment and Balanced

Growth Act of 1978 [15 U.S.C.A. Sec. 3101 et seq.], the terms ‘‘inflation’’, ‘‘prices’’, and ‘‘reasonable price stability’’ refer to the rate

of change or level of the consumer price index as set forth by the

Bureau of Labor Statistics, United States Department of Labor.

389

SELECTED PROVISIONS OF TITLE 39,

UNITED STATES CODE—

POSTAL SERVICE

391

10This table of sections is not part of Title 39 but is included for the convenience of the

reader.

Table of Sections of Selected

Provisions of Title 39 10

TITLE 39, UNITED STATES CODE

POSTAL SERVICE

PART III—MODERNIZATION AND FISCAL ADMINISTRATION

CHAPTER 28—STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT

Sec. 2801. Definitions.

Sec. 2802. Strategic plans.

Sec. 2803. Performance plans.

Sec. 2804. Program performance reports.

Sec. 2805. Inherently Governmental functions.
392

TITLE 39—POSTAL SERVICE

* * * * * * *

PART III—MODERNIZATION AND FISCAL

ADMINISTRATION

CHAPTER 28—STRATEGIC PLANNING AND

PERFORMANCE MANAGEMENT

SEC. 2801. DEFINITIONS.

For purposes of this chapter the term—

(1) ‘‘outcome measure’’ refers to an assessment of the results

of a program activity compared to its intended purpose;

(2) ‘‘output measure’’ refers to the tabulation, calculation, or

recording of activity or effort and can be expressed in a quantitative or qualitative manner;

(3) ‘‘performance goal’’ means a target level of performance

expressed as a tangible, measurable objective, against which

actual achievement shall be compared, including a goal expressed as a quantitative standard, value, or rate;

(4) ‘‘performance indicator’’ refers to a particular value or

characteristic used to measure output or outcome;

(5) ‘‘program activity’’ means a specific activity related to the

mission of the Postal Service; and

(6) ‘‘program evaluation’’ means an assessment, through objective measurement and systematic analysis, of the manner

and extent to which Postal Service programs achieve intended

objectives.

SEC. 2802. STRATEGIC PLANS.

(a) No later than September 30, 1997, the Postal Service shall

submit to the President and the Congress a strategic plan for its

program activities. Such plan shall contain—

(1) a comprehensive mission statement covering the major

functions and operations of the Postal Service;

(2) general goals and objectives, including outcome-related

goals and objectives, for the major functions and operations of

the Postal Service;

(3) a description of how the goals and objectives are to be

achieved, including a description of the operational processes,

skills and technology, and the human, capital, information, and

other resources required to meet those goals and objectives;

(4) a description of how the performance goals included in

the plan required under section 2803 shall be related to the

general goals and objectives in the strategic plan;

(5) an identification of those key factors external to the Postal Service and beyond its control that could significantly affect

the achievement of the general goals and objectives; and
393 Sec. 2803 CH. 28—STRATEGIC PLANNING

(6) a description of the program evaluations used in establishing or revising general goals and objectives, with a schedule for future program evaluations.

(b) The strategic plan shall cover a period of not less than five

years forward from the fiscal year in which it is submitted, and

shall be updated and revised at least every three years.

(c) The performance plan required under section 2803 shall be

consistent with the Postal Service’s strategic plan. A performance

plan may not be submitted for a fiscal year not covered by a current strategic plan under this section.

(d) When developing a strategic plan, the Postal Service shall solicit and consider the views and suggestions of those entities potentially affected by or interested in such a plan, and shall advise the

Congress of the contents of the plan.

SEC. 2803. PERFORMANCE PLANS.

(a) The Postal Service shall prepare an annual performance plan

covering each program activity set forth in the Postal Service budget, which shall be included in the comprehensive statement presented under section 2401(g) of this title. Such plan shall—

(1) establish performance goals to define the level of performance to be achieved by a program activity;

(2) express such goals in an objective, quantifiable, and

measurable form unless an alternative form is used under subsection (b);

(3) briefly describe the operational processes, skills and technology, and the human, capital, information, or other resources

required to meet the performance goals;

(4) establish performance indicators to be used in measuring

or assessing the relevant outputs, service levels, and outcomes

of each program activity;

(5) provide a basis for comparing actual program results with

the established performance goals; and

(6) describe the means to be used to verify and validate

measured values.

(b) If the Postal Service determines that it is not feasible to express the performance goals for a particular program activity in an

objective, quantifiable, and measurable form, the Postal Service

may use an alternative form. Such alternative form shall—

(1) include separate descriptive statements of—

(A) a minimally effective program, and

(B) a successful program,

with sufficient precision and in such terms that would allow

for an accurate, independent determination of whether the program activity’s performance meets the criteria of either description; or

(2) state why it is infeasible or impractical to express a performance goal in any form for the program activity.

(c) In preparing a comprehensive and informative plan under this

section, the Postal Service may aggregate, disaggregate, or consolidate program activities, except that any aggregation or consolidation may not omit or minimize the significance of any program activity constituting a major function or operation.
Sec. 2804 CH. 28—STRATEGIC PLANNING 394

(d) The Postal Service may prepare a non-public annex to its

plan covering program activities or parts of program activities relating to—

(1) the avoidance of interference with criminal prosecution;

or

(2) matters otherwise exempt from public disclosure under

section 410(c) of this title.

SEC. 2804. PROGRAM PERFORMANCE REPORTS.

(a) The Postal Service shall prepare a report on program performance for each fiscal year, which shall be included in the annual

comprehensive statement presented under section 2401(g) of this

title.

(b)(1) The program performance report shall set forth the performance indicators established in the Postal Service performance

plan, along with the actual program performance achieved compared with the performance goals expressed in the plan for that fiscal year.

(2) If performance goals are specified by descriptive statements

of a minimally effective program activity and a successful program

activity, the results of such program shall be described in relationship to those categories, including whether the performance failed

to meet the criteria of either category.

(c) The report for fiscal year 2000 shall include actual results for

the preceding fiscal year, the report for fiscal year 2001 shall include actual results for the two preceding fiscal years, and the report for fiscal year 2002 and all subsequent reports shall include

actual results for the three preceding fiscal years.

(d) Each report shall—

(1) review the success of achieving the performance goals of

the fiscal year;

(2) evaluate the performance plan for the current fiscal year

relative to the performance achieved towards the performance

goals in the fiscal year covered by the report;

(3) explain and describe, where a performance goal has not

been met (including when a program activity’s performance is

determined not to have met the criteria of a successful program activity under section 2803(b)(2))—

(A) why the goal was not met;

(B) those plans and schedules for achieving the established performance goal; and

(C) if the performance goal is impractical or infeasible,

why that is the case and what action is recommended; and

(4) include the summary findings of those program evaluations completed during the fiscal year covered by the report.

SEC. 2805. INHERENTLY GOVERNMENTAL FUNCTIONS.

The functions and activities of this chapter shall be considered

to be inherently Governmental functions. The drafting of strategic

plans, performance plans, and program performance reports under

this section shall be performed only by employees of the Postal

Service.

* * * * * * *
395 Sec. 2805 CH. 28—STRATEGIC PLANNING

The following list shows the section of 39 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

39 U.S.C. Requirements or Guidelines

2801 ......................................... OMB: Circular A–11, see appendix IV

2802 ......................................... OMB: Circular A–11, see appendix IV

2803 ......................................... OMB: Circular A–11, See appendix IV

397

SELECTED PROVISIONS OF TITLE 40,

UNITED STATES CODE—

PUBLIC BUILDINGS, PROPERTY, AND WORKS

399

11This table of sections is not part of Title 40 but is included for the convenience of the

reader.

Table of Sections of Selected

Provisions of Title 40 11

TITLE 40, UNITED STATES CODE

PUBLIC BUILDINGS, PROPERTY, AND WORKS

CHAPTER 10—MANAGEMENT AND DISPOSAL OF GOVERNMENT PROPERTY

SUBCHAPTER I—GENERAL PROVISIONS

Sec. 472. Definitions.
400

TITLE 40—PUBLIC BUILDINGS, PROPERTY,

AND WORKS

* * * * * * *

CHAPTER 10—MANAGEMENT AND DISPOSAL OF

GOVERNMENT PROPERTY

SUBCHAPTER I—GENERAL PROVISIONS

SEC. 472. DEFINITIONS.

As used in titles I through VI of this Act—

(a) The term ‘‘executive agency’’ means any executive department or independent establishment in the executive branch of

the Government, including any wholly owned Government corporation.

(b) The term ‘‘Federal agency’’ means any executive agency

or any establishment in the legislative or judicial branch of the

Government (except the Senate, the House of Representatives,

and the Architect of the Capitol and any activities under his

direction).

(c) The term ‘‘Administrator’’ means the Administrator of

General Services provided for in chapter 16 of this title.

(d) The term ‘‘property’’ means any interest in property except (1) the public domain; lands reserved or dedicated for national forest or national park purposes; minerals in lands or

portions of lands withdrawn or reserved from the public domain which the Secretary of the Interior determines are suitable for disposition under the public land mining and mineral

leasing laws; and lands withdrawn or reserved from the public

domain except lands or portions of lands so withdrawn or reserved which the Secretary of the Interior, with the concurrence of the Administrator, determines are not suitable for return to the public domain for disposition under the general

public-land laws because such lands are substantially changed

in character by improvements or otherwise; (2) naval vessels of

the following categories: Battleships, cruisers, aircraft carriers,

destroyers, and submarines; and (3) records of the Federal

Government.

(e) The term ‘‘excess property’’ means any property under the

control of any Federal agency which is not required for its

needs and the discharge of its responsibilities, as determined

by the head thereof.

(f) The term ‘‘foreign excess property’’ means any excess

property located outside the States of the Union, the District

of Columbia, Puerto Rico, American Samoa, Guam, the Trust

Territory of the Pacific Islands, and the Virgin Islands.
401 Sec. 472 CH. 10—DISPOSAL OF GOV’T PROPERTY

(g) The term ‘‘surplus property’’ means any excess property

not required for the needs and the discharge of the responsibilities of all Federal agencies, as determined by the Administrator.

(h) The term ‘‘care and handling’’ includes completing, repairing, converting, rehabilitating, operating, preserving, protecting, insuring, packing, storing, handling, conserving, and

transporting excess and surplus property, and, in the case of

property which is dangerous to public health or safety, destroying or rendering innocuous such property.

(i) The term ‘‘person’’ includes any corporation, partnership,

firm, association, trust, estate, or other entity.

(j) The term ‘‘nonpersonal services’’ means such contractual

services, other than personal and professional services, as the

Administrator shall designate.

(k) The term ‘‘contractor inventory’’ means (1) any property

acquired by and in the possession of a contractor or subcontractor under a contract pursuant to the terms of which

title is vested in the Government, and in excess of the amounts

needed to complete full performance under the entire contract;

and (2) any property which the Government is obligated or has

the option to take over under any type of contract as a result

either of any changes in the specifications or plans thereunder

or of the termination of such contract (or subcontract thereunder), prior to completion of the work, for the convenience or

at the option of the Government.

(l) The term ‘‘motor vehicle’’ means any vehicle, self-propelled or drawn by mechanical power, designed and operated

principally for highway transportation of property or passengers, exclusive of any vehicle designed or used for military

field training, combat, or tactical purposes, or used principally

within the confines of a regularly established military post,

camp, or depot, and any vehicle regularly used by an agency

in the performance of investigative, law enforcement, or intelligence duties if the head of such agency determines that exclusive control of such vehicle is essential to the effective performance of such duties.

* * * * * * *

The following list shows the section of 40 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

40 U.S.C. Requirements or Guidelines

472 ........................................... 43 C.F.R. 2370

403

SELECTED PROVISIONS OF TITLE 41,

UNITED STATES CODE—

PUBLIC CONTRACTS

405

12This table of sections is not part of Title 41 but is included for the convenience of the

reader.

Table of Sections of Selected

Provisions of Title 41 12

TITLE 41, UNITED STATES CODE

PUBLIC CONTRACTS

CHAPTER 1—GENERAL PROVISIONS

Sec. 5a. Definitions

Sec. 11. No contracts or purchases unless authorized or under adequate appropriation; report to Congress.

CHAPTER 7—OFFICE OF FEDERAL PROCUREMENT POLICY

Sec. 422. Cost accounting standards board.

CHAPTER 9—CONTRACT DISPUTES

Sec. 601. Definitions.

Sec. 605. Decisions by contracting officer.

Sec. 611. Interest.
406

TITLE 41—PUBLIC CONTRACTS

* * * * * * *

CHAPTER 1—GENERAL PROVISIONS

SEC. 5a. DEFINITIONS.

The word ‘‘department’’ as used in this Act shall be construed to

include independent establishments, other agencies, wholly owned

Government corporations (the transactions of which corporations

shall be subject to the authorizations and limitations of this Act,

except that section 5 of this title shall apply to their administrative

transactions only) and the Government of the District of Columbia,

but shall not include the Senate, House of Representatives, or Office of the Architect of the Capitol, or the officers or employees

thereof. The words ‘‘continental United States’’ as used herein shall

be construed to mean the forty-eight States and the District of Columbia. The word ‘‘Government’’ shall be construed to include the

government of the District of Columbia. The word ‘‘appropriation’’

shall be construed as including funds made available by legislation

under section 9104 of Title 31.

SEC. 11. NO CONTRACTS OR PURCHASES UNLESS AUTHORIZED OR

UNDER ADEQUATE APPROPRIATION; REPORT TO CONGRESS.

(a) No contract or purchase on behalf of the United States shall

be made, unless the same is authorized by law or is under an appropriation adequate to its fulfillment, except in the Department of

Defense and in the Department of Transportation with respect to

the Coast Guard when it is not operating as a service in the Navy,

for clothing, subsistence, forage, fuel, quarters, transportation, or

medical and hospital supplies, which, however, shall not exceed the

necessities of the current year.

(b) The Secretary of Defense and the Secretary of Transportation

with respect to the Coast Guard when it is not operating as a service in the Navy shall immediately advise the Congress of the exercise of the authority granted in subsection (a) of this section, and

shall report quarterly on the estimated obligations incurred pursuant to the authority granted in subsection (a) of this section.
407

TITLE 41—PUBLIC CONTRACTS

* * * * * * *

CHAPTER 7—OFFICE OF FEDERAL PROCUREMENT

POLICY

SEC. 422. COST ACCOUNTING STANDARDS BOARD.

(a) ESTABLISHMENT; MEMBERSHIP; TERMS.—(1) There is established within the Office of Federal Procurement Policy an independent board to be known as the ‘‘Cost Accounting Standards

Board’’ (hereinafter referred to as the ‘‘Board’’). The Board shall

consist of 5 members, including the Administrator, who shall serve

as Chairman, and 4 members, all of whom shall have experience

in Government contract cost accounting, and who shall be appointed as follows:

(A) two representatives of the Federal Government—

(i) one of whom shall be a representative of the Department of Defense and be appointed by the Secretary of Defense; and

(ii) one of whom shall be an officer or employee of the

General Services Administration appointed by the Administrator of General Services; and

(B) two individuals from the private sector, each of whom

shall be appointed by the Administrator and—

(i) one of whom shall be a representative of industry;

and

(ii) one of whom shall be particularly knowledgeable

about cost accounting problems and systems.

(2)(A) The term of office of each of the members of the Board,

other than the Administrator for Federal Procurement Policy, shall

be 4 years, except that—

(i) of the initial members, two shall be appointed for terms

of two years, one shall be appointed for a term of three years,

and one shall be appointed for a term of four years;

(ii) any member appointed to fill a vacancy in the Board

shall serve for the remainder of the term for which his predecessor was appointed; and

(iii) no individual who is appointed under paragraph (1)(A)

of this subsection shall continue to serve after ceasing to be an

officer or employee of the agency from which he or she was appointed.

(B) A vacancy on the Board shall be filled in the same manner

in which the original appointment was made.

(C) The initial members of the Board shall be appointed within

120 days after November 17, 1988.

(b) SENIOR STAFF.—The Administrator, after consultation with

the Board, may appoint an executive secretary and two additional
Sec. 422 CH. 7–OFFICE OF FEDERAL PROCUREMENT POLICY 408

staff members without regard to the provisions of Title 5, governing appointments in the competitive service, and may pay such employees without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and

General Schedule pay rates, except that no individual so appointed

may receive pay in excess of the annual rate of basic pay payable

for GS–18 of the General Schedule.

(c) OTHER STAFF.—The Administrator may appoint, fix the compensation, and remove additional employees of the Board under the

applicable provisions of Title 5.

(d) DETAILED AND TEMPORARY PERSONNEL.—(1) The Board may

use, without reimbursement, any personnel of a Federal agency

(with the consent of the head of the agency concerned) to serve on

advisory committees and task forces to assist the Board in carrying

out the functions and responsibilities of the Board under this section.

(2) The Administrator, after consultation with the Board, may

procure temporary and intermittent services under section 3109(b)

of Title 5, of personnel for the purpose of serving on advisory committees and task forces to assist the Board in carrying out the

functions and responsibilities of the Board under this section.

(e) COMPENSATION.—Except as otherwise provided in subsection

(a) of this section the members of the Board who are officers or employees of the Federal Government, and officers and employees of

other agencies of the Federal Government who are used under subsection (d)(1) of this section shall receive no additional compensation for services, but shall continue to be compensated by the employing Department or agency of such officer or employee. Each

member of the Board appointed from private life shall receive compensation at a rate not to exceed the daily equivalent of the rate

prescribed for level IV of the Executive Schedule for each day (including travel time) in which the member is engaged in the actual

performance of duties vested in the Board. Individuals hired under

subsection (d)(2) of this section may receive compensation at rates

fixed by the Administrator, but not to exceed the daily equivalent

of the rate prescribed for level V of the Federal Executive Salary

Schedule under section 5316 of Title 5, for each day (including

travel time) in which such appointees are properly engaged in the

actual performance of duties under this section. While serving

away from homes or the regular place of business, Board members

and other appointees serving on an intermittent basis under this

section shall be allowed travel expenses in accordance with section

5703 of Title 5.

(f) COST ACCOUNTING STANDARDS AUTHORITY.—(1) The Board

shall have the exclusive authority to make, promulgate, amend,

and rescind cost accounting standards and interpretations thereof

designed to achieve uniformity and consistency in the cost accounting standards governing measurement, assignment, and allocation

of costs to contracts with the United States.

(2)(A) Cost accounting standards promulgated under this section

shall be mandatory for use by all executive agencies and by contractors and subcontractors in estimating, accumulating, and reporting costs in connection with pricing and administration of, and

settlement of disputes concerning, all negotiated prime contract
409 Sec. 422 CH. 7–OFFICE OF FEDERAL PROCUREMENT POLICY

and subcontract procurements with the United States in excess of

$500,000.

(B) Subparagraph (A) does not apply to the following contracts or

subcontracts:

(i) Contracts or subcontracts where the price negotiated is

based on established catalog or market prices of commercial

items sold in substantial quantities to the general public.

(ii) Contracts or subcontracts where the price negotiated is

based on prices set by law or regulation.

(iii) Any other firm fixed-price contract or subcontract (without cost incentives) for commercial items.

(C) In this paragraph, the term ‘‘subcontract’’ includes a transfer

of commercial items between divisions, subsidiaries, or affiliates of

a contractor or subcontractor.

(3) The Administrator, after consultation with the Board, shall

prescribe rules and procedures governing actions of the Board

under this section. Such rules and procedures shall require that

any cost accounting standard promulgated, amended, or rescinded

(and interpretations thereof) shall be adopted by majority vote of

the Board members.

(4) The Board is authorized—

(A) to exempt classes or categories of contractors and subcontractors from the requirements of this section; and

(B) to establish procedures for the waiver of the requirements of this section with respect to individual contracts and

subcontracts.

(g) REQUIREMENTS FOR STANDARDS.—(1) Prior to the promulgation under this section of cost accounting standards and interpretations thereof, the Board shall—

(A) take into account, after consultation and discussions with

the Comptroller General and professional accounting organizations, contractors, and other interested parties—

(i) the probable costs of implementation, including inflationary effects, if any, compared to the probable benefits;

(ii) the advantages, disadvantages, and improvements

anticipated in the pricing and administration of, and settlement of disputes concerning, contracts; and

(iii) the scope of, and alternatives available to, the action

proposed to be taken;

(B) prepare and publish a report in the Federal Register on

the issues reviewed under paragraph (1)(A);

(C)(i) publish an advanced notice of proposed rulemaking in

the Federal Register in order to solicit comments on the report

prepared pursuant to subparagraph (B);

(ii) provide all parties affected a period of not less than 60

days after such publication to submit their views and comments; and

(iii) during this 60-day period, consult with the Comptroller

General and consider any recommendation the Comptroller

General may make; and

(D) publish a notice of such proposed rulemaking in the Federal Register and provide all parties affected a period of not

less than 60 days after such publication to submit their views

and comments.
Sec. 422 CH. 7–OFFICE OF FEDERAL PROCUREMENT POLICY 410

(2) Rules, regulations, cost accounting standards, and modifications thereof promulgated or amended under this section shall have

the full force and effect of law, and shall become effective within

120 days after publication in the Federal Register in final form, unless the Board determines a longer period is necessary. Implementation dates for contractors and subcontractors shall be determined

by the Board, but in no event shall such dates be later than the

beginning of the second fiscal year of the contractor or subcontractor after the standard becomes effective. Rules, regulations, cost accounting standards, and modifications thereof promulgated or

amended under this section shall be accompanied by prefatory comments and by illustrations, if necessary.

(3) The functions exercised under this section are excluded from

the operation of sections 551, 553 through 559, and 701 through

706 of Title 5.

(h) IMPLEMENTING REGULATIONS.—(1) The Board shall promulgate rules and regulations for the implementation of cost accounting standards promulgated or interpreted under subsection (f) of

this section. Such regulations shall be incorporated into the Federal Acquisition Regulation and shall require contractors and subcontractors as a condition of contracting with the United States

to—

(A) disclose in writing their cost accounting practices, including methods of distinguishing direct costs from indirect costs

and the basis used for allocating indirect costs; and

(B) agree to a contract price adjustment, with interest, for

any increased costs paid to such contractor or subcontractor by

the United States by reason of a change in the contractor’s or

subcontractor’s cost accounting practices or by reason of a failure by the contractor or subcontractor to comply with applicable cost accounting standards.

(2) If the United States and a contractor or subcontractor fail to

agree on a contract price adjustment, including whether the contractor or subcontractor has complied with the applicable cost accounting standards, the disagreement will constitute a dispute

under the Contract Disputes Act (41 U.S.C. 601).

(3) Any contract price adjustment undertaken pursuant to paragraph (1)(B) shall be made, where applicable, on relevant contracts

between the United States and the contractor that are subject to

the cost accounting standards so as to protect the United States

from payment, in the aggregate, of increased costs (as defined by

the Board). In no case shall the Government recover costs greater

than the increased cost (as defined by the Board) to the Government, in the aggregate, on the relevant contracts subject to the

price adjustment, unless the contractor made a change in its cost

accounting practices of which it was aware or should have been

aware at the time of the price negotiation and which it failed to

disclose to the Government.

(4) The interest rate applicable to any contract price adjustment

shall be the annual rate of interest established under section 6621

of Title 26 for such period. Such interest shall accrue from the time

payments of the increased costs were made to the contractor or

subcontractor to the time the United States receives full compensation for the price adjustment.
411 Sec. 422 CH. 7–OFFICE OF FEDERAL PROCUREMENT POLICY

(i) REPORTS TO CONGRESS.—The Board shall report to the Congress not later than one year after November 17, 1988, and annually thereafter, with respect to the activities and operations of the

Board under this section, together with such recommendations as

it considers appropriate.

(j) EFFECT ON OTHER STANDARDS AND REGULATIONS.—(1) All cost

accounting standards, waivers, exemptions, interpretations, modifications, rules, and regulations promulgated by the Cost Accounting Standards Board under section 2168 of this Appendix to Title

5 (50 U.S.C. App. 2168) shall remain in effect unless and until

amended, superseded, or rescinded by the Board pursuant to this

section.

(2) Existing cost accounting standards referred to in paragraph

(1) shall be subject to the provisions of this Act in the same manner as if promulgated by the Board under this chapter.

(3) The Administrator, under the authority set forth in section

405 of this title, shall ensure that no regulation or proposed regulation of an executive agency is inconsistent with a cost accounting

standard promulgated or amended under this section by rescinding

or denying the promulgation of any such inconsistent regulation or

proposed regulation and taking such other action authorized under

section 405 of this title as may be appropriate.

(4) Costs which are the subject of cost accounting standards promulgated under this section shall not be subject to regulations that

are established by another executive agency that differ from such

standards with respect to the measurement, assignment, and allocation of such costs.

(k) EXAMINATIONS.—For the purpose of determining whether a

contractor or subcontractor has complied with cost accounting

standards promulgated under this section and has followed consistently the contractor’s or subcontractor’s disclosed cost accounting

practices, any authorized representative of the head of the agency

concerned, of the offices of inspector general established pursuant

to the Inspector General Act of 1978, or of the Comptroller General

of the United States shall have the right to examine and make copies of any documents, papers, or records of such contractor or subcontractor relating to compliance with such cost accounting standards.

(l) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to

be appropriated such sums as may be necessary to carry out the

provisions of this section.

* * * * * * *

The following list shows the section of 41 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

41 U.S.C. Requirements or Guidelines

422 ........................................... 48 C.F.R. 9900, 9901, 9903–9905

OMB: Circular A–21, see appendix IV

CASB: Cost Accounting Standards Board, see appendix VIII
412

TITLE 41—PUBLIC CONTRACTS

* * * * * * *

CHAPTER 9—CONTRACT DISPUTES

SEC. 601. DEFINITIONS

As used in this chapter—

(1) the term ‘‘agency head’’ means the head and any assistant head of an executive agency, and may ‘‘upon the designation by’’ the head of an executive agency include the chief official of any principal division of the agency;

(2) the term ‘‘executive agency’’ means an executive department as defined in section 101 of Title 5, an independent establishment as defined by section 104 of Title 5 (except that it

shall not include the General Accounting Office): a military department as defined by section 102 of Title 5, and a wholly

owned Government corporation as defined by section 9101(3) of

Title 31, the United States Postal Service, and the Postal Rate

Commission;

(3) The term ‘‘contracting officer’’ means any person who, by

appointment in accordance with applicable regulations, has the

authority to enter into and administer contracts and make determinations and findings with respect thereto. The term also

includes the authorized representative of the contracting officer, acting within the limits of his authority;

(4) the term ‘‘contractor’’ means a party to a Government

contract other than the Government;

(5) The term ‘‘Administrator’’ means the Administrator for

Federal Procurement Policy appointed pursuant to the Office of

Federal Procurement Policy Act [41 U.S.C.A. Sec. 401 et seq.];

(6) The term ‘‘agency board’’ means an agency board of contract appeals established under section 607 of this title; and

(7) The term ‘‘misrepresentation of fact’’ means a false statement of substantive fact, or any conduct which leads to a belief

of a substantive fact material to proper understanding of the

matter in hand, made with intent to deceive or mislead.

SEC. 605. DECISION BY CONTRACTING OFFICER.

(a) CONTRACTOR CLAIMS.—All claims by a contractor against the

government relating to a contract shall be in writing and shall be

submitted to the contracting officer for a decision. All claims by the

government against a contractor relating to a contract shall be the

subject of a decision by the contracting officer. Each claim by a contractor against the government relating to a contract and each

claim by the government against a contractor relating to a contract

shall be submitted within 6 years after the accrual of the claim.

The preceding sentence does not apply to a claim by the government against a contractor that is based on a claim by the contrac-
413 Sec. 605 CH. 9—CONTRACT DISPUTES

tor involving fraud. The contracting officer shall issue his decisions

in writing, and shall mail or otherwise furnish a copy of the decision to the contractor. The decision shall state the reasons for the

decision reached, and shall inform the contractor of his rights as

provided in this chapter. Specific findings of fact are not required,

but, if made, shall not be binding in any subsequent proceeding.

The authority of this subsection shall not extend to a claim or dispute for penalties or forfeitures prescribed by statute or regulation

which another Federal agency is specifically authorized to administer, settle, or determine. This section shall not authorize any

agency head to settle, compromise, pay, or otherwise adjust any

claim involving fraud.

(b) REVIEW; PERFORMANCE OF CONTRACT PENDING APPEAL.—The

contracting officer’s decision on the claim shall be final and conclusive and not subject to review by any forum, tribunal, or Government agency, unless an appeal or suit is timely commenced as authorized by this chapter. Nothing in this chapter shall prohibit executive agencies from including a clause in government contracts

requiring that pending final decision of an appeal, action, or final

settlement, a contractor shall proceed diligently with performance

of the contract in accordance with the contracting officer’s decision.

(c) AMOUNT OF CLAIM; CERTIFICATION; NOTIFICATION; TIME OF IS- SUANCE; PRESUMPTION; AUTHORIZATION OF CERTIFIER.—(1) A contracting officer shall issue a decision on any submitted claim of

$100,000 or less within sixty days from his receipt of a written request from the contractor that a decision be rendered within that

period. For claims of more than $100,000, the contractor shall certify that the claim is made in good faith, that the supporting data

are accurate and complete to the best of his knowledge and belief,

that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable,

and that the certifier is duly authorized to certify the claim on behalf of the contractor.

(2) A contracting officer shall, within sixty days of receipt of a

submitted certified claim over $100,000—

(A) issue a decision; or

(B) notify the contractor of the time within which a decision

will be issued.

(3) The decision of a contracting officer on submitted claims shall

be issued within a reasonable time, in accordance with regulations

promulgated by the agency, taking into account such factors as the

size and complexity of the claim and the adequacy of the information in support of the claim provided by the contractor.

(4) A contractor may request the tribunal concerned to direct a

contracting officer to issue a decision in a specified period of time,

as determined by the tribunal concerned, in the event of undue

delay on the part of the contracting officer.

(5) Any failure by the contracting officer to issue a decision on

a contract claim within the period required will be deemed to be

a decision by the contracting officer denying the claim and will authorize the commencement of the appeal or suit on the claim as

otherwise provided in this chapter. However, in the event an appeal or suit is so commenced in the absence of a prior decision by

the contracting officer, the tribunal concerned may, at its option,
Sec. 611 CH. 9—CONTRACT DISPUTES 414

stay the proceedings to obtain a decision on the claim by the contracting officer.

(6) The contracting officer shall have no obligation to render a

final decision on any claim of more than $100,000 that is not certified in accordance with paragraph (1) if, within 60 days after receipt of the claim, the contracting officer notifies the contractor in

writing of the reasons why any attempted certification was found

to be defective. A defect in the certification of a claim shall not deprive a court or an agency board of contract appeals of jurisdiction

over that claim. Prior to the entry of a final judgment by a court

or a decision by an agency board of contract appeals, the court or

agency board shall require a defective certification to be corrected.

(7) The certification required by paragraph (1) may be executed

by any person duly authorized to bind the contractor with respect

to the claim.

(d) ALTERNATIVE MEANS OF DISPUTE RESOLUTION.—Notwithstanding any other provision of this chapter, a contractor and a

contracting officer may use any alternative means of dispute resolution under subchapter IV of chapter 5 of Title 5, or other mutually agreeable procedures, for resolving claims. In a case in which

such alternative means of dispute resolution or other mutually

agreeable procedures are used, the contractor shall certify that the

claim is made in good faith, that the supporting data are accurate

and complete to the best of his or her knowledge and belief, and

that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable.

All provisions of subchapter IV of chapter 5 of Title 5 shall apply

to such alternative means of dispute resolution.

(e) CESSATION OF AUTHORITY IN DISPUTE RESOLUTION; PROCEDURES REGARDING SMALL BUSINESS CONTRACTORS.—The authority

of agencies to engage in alternative means of dispute resolution

proceedings under subsection (d) of this section shall cease to be effective on October 1, 1999, except that such authority shall continue in effect with respect to then pending dispute resolution proceedings which, in the judgment of the agencies that are parties to

such proceedings, require such continuation, until such proceedings

terminate. In any case in which the contracting officer rejects a

contractor’s request for alternative dispute resolution proceedings,

the contracting officer shall provide the contractor with a written

explanation, citing one or more of the conditions in section 572(b)

of Title 5, or such other specific reasons that alternative dispute

resolution procedures are inappropriate for the resolution of the

dispute. In any case in which a contractor rejects a request of an

agency for alternative dispute resolution proceedings, the contractor shall inform the agency in writing of the contractor’s specific

reasons for rejecting the request.

SEC. 611. INTEREST.

Interest on amounts found due contractors on claims shall be

paid to the contractor from the date the contracting officer receives

the claim pursuant to section 605(a) of this title from the contractor until payment thereof. The interest provided for in this section

shall be paid at the rate established by the Secretary of the Treas-
415 Sec. 611 CH. 9—CONTRACT DISPUTES

ury pursuant to Public Law 92–41 (85 Stat. 97) for the Renegotiation Board.

* * * * * * *

The following list shows the section of 41 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

41 U.S.C. Requirements or Guidelines

601–613 ................................... 7 C.F.R. 24; 24 C.F.R. 20; 38 C.F.R. 1; 43 C.F.R. 4; 48 C.F.R. 6101

417

SELECTED PROVISIONS OF TITLE 44,

UNITED STATES CODE—

PUBLIC PRINTING AND DOCUMENTS

419

13This table of sections is not part of Title 44 but is included for the convenience of the

reader.

Table of Sections of Selected

Provisions of Title 44 13

TITLE 44, UNITED STATES CODE

PUBLIC PRINTING AND DOCUMENTS

CHAPTER 35—COORDINATION OF FEDERAL INFORMATION POLICY

Sec. 3502. Definitions.
420

TITLE 44—PUBLIC PRINTING AND DOCUMENTS

* * * * * * *

CHAPTER 35—COORDINATION OF FEDERAL

INFORMATION POLICY

SEC. 3502. DEFINITIONS.

As used in this chapter—

(1) the term ‘‘agency’’ means any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive

branch of the Government (including the Executive Office of

the President), or any independent regulatory agency, but does

not include—

(A) the General Accounting Office;

(B) Federal Election Commission;

(C) the governments of the District of Columbia and of

the territories and possessions of the United States, and

their various subdivisions; or

(D) Government-owned contractor-operated facilities, including laboratories engaged in national defense research

and production activities;

(2) the term ‘‘burden’’ means time, effort, or financial resources expended by persons to generate, maintain, or provide

information to or for a Federal agency, including the resources

expended for—

(A) reviewing instructions;

(B) acquiring, installing, and utilizing technology and

systems;

(C) adjusting the existing ways to comply with any previously applicable instructions and requirements;

(D) searching data sources;

(E) completing and reviewing the collection of information; and

(F) transmitting, or otherwise disclosing the information;

(3) the term ‘‘collection of information’’—

(A) means the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of

form or format, calling for either—

(i) answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed

on, ten or more persons, other than agencies, instrumentalities, or employees of the United States; or

(ii) answers to questions posed to agencies, instrumentalities, or employees of the United States which

are to be used for general statistical purposes; and
421 Sec. 3502 CH. 35—COORDINATION OF FED. INFO. POLICY

(B) shall not include a collection of information described

under section 3518(c)(1);

(4) the term ‘‘Director’’ means the Director of the Office of

Management and Budget;

(5) the term ‘‘independent regulatory agency’’ means the

Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Consumer Product

Safety Commission, the Federal Communications Commission,

the Federal Deposit Insurance Corporation, the Federal Energy

Regulatory Commission, the Federal Housing Finance Board,

the Federal Maritime Commission, the Federal Trade Commission, the Interstate Commerce Commission, the Mine Enforcement Safety and Health Review Commission, the National

Labor Relations Board, the Nuclear Regulatory Commission,

the Occupational Safety and Health Review Commission, the

Postal Rate Commission, the Securities and Exchange Commission, and any other similar agency designated by statute as a

Federal independent regulatory agency or commission;

(6) the term ‘‘information resources’’ means information and

related resources, such as personnel, equipment, funds, and information technology;

(7) the term ‘‘information resources management’’ means the

process of managing information resources to accomplish agency missions and to improve agency performance, including

through the reduction of information collection burdens on the

public;

(8) the term ‘‘information system’’ means a discrete set of information resources organized for the collection, processing,

maintenance, use, sharing, dissemination, or disposition of information;

(9) the term ‘‘information technology’’ has the same meaning

as the term ‘‘automatic data processing equipment’’ as defined

by section 111(a)(2) and (3)(C)(i) through (v) of the Federal

Property and Administrative Services Act of 1949 (40 U.S.C.

759(a)(2) and (3)(C)(i) through (v));

(10) the term ‘‘person’’ means an individual, partnership, association, corporation, business trust, or legal representative,

an organized group of individuals, a State, territorial, tribal, or

local government or branch thereof, or a political subdivision

of a State, territory, tribal, or local government or a branch of

a political subdivision;

(11) the term ‘‘practical utility’’ means the ability of an agency to use information, particularly the capability to process

such information in a timely and useful fashion;

(12) the term ‘‘public information’’ means any information,

regardless of form or format, that an agency discloses, disseminates, or makes available to the public;

(13) the term ‘‘recordkeeping requirement’’ means a requirement imposed by or for an agency on persons to maintain specified records, including a requirement to—

(A) retain such records;

(B) notify third parties, the Federal Government, or the

public of the existence of such records;
Sec. 3502 CH. 35—COORDINATION OF FED. INFO. POLICY 422

(C) disclose such records to third parties, the Federal

Government, or the public; or

(D) report to third parties, the Federal Government, or

the public regarding such records; and

(14) the term ‘‘penalty’’ includes the imposition by an agency

or court of a fine or other punishment; a judgment for monetary damages or equitable relief; or the revocation, suspension,

reduction, or denial of a license, privilege, right, grant, or benefit.

* * * * * * *

The following list shows the section of 44 U.S.C. and the related

requirements or guidelines issued by federal agencies or entities:

44 U.S.C. Requirements or Guidelines

3501–3520 ............................... 18 C.F.R. 389; 41 C.F.R. 60–999; 46 C.F.R. 501; 50 C.F.R. 204
423

DEBT COLLECTION

IMPROVEMENT ACT

OF 1996

425

14This Act is Section 31001 of Public Law 104–134, the ‘‘Omnibus Consolidated Rescissions

and Appropriations Act of 1996,’’ enacted on April 26, 1996.

Debt Collection Improvement Act of 1996 14

(Public Law 104–134)

(a)(1) This section may be cited as the ‘‘Debt Collection Improvement Act of 1996’’.

(2)(A) IN GENERAL.—The provisions of this section and the

amendments made by this section shall take effect on the date of

the enactment of this Act.

(B) OFFSETS FROM SOCIAL SECURITY PAYMENTS, ETC.—Subparagraph (A) of section 3716(c)(3) of title 31, United States Code (as

added by subsection (d)(2) of this section), shall apply only to payments made after the date which is 4 months after the date of the

enactment of this Act.

(b) The purposes of this section are the following:

(1) To maximize collections of delinquent debts owed to the

Government by ensuring quick action to enforce recovery of

debts and the use of all appropriate collection tools.

(2) To minimize the costs of debt collection by consolidating

related functions and activities and utilizing interagency

teams.

(3) To reduce losses arising from debt management activities

by requiring proper screening of potential borrowers, aggressive monitoring of all accounts, and sharing of information

within and among Federal agencies.

(4) To ensure that the public is fully informed of the Federal

Government’s debt collection policies and that debtors are cognizant of their financial obligations to repay amounts owed to

the Federal Government.

(5) To ensure that debtors have all appropriate due process

rights, including the ability to verify, challenge, and compromise claims, and access to administrative appeals procedures which are both reasonable and protect the interests of

the United States.

(6) To encourage agencies, when appropriate, to sell delinquent debt, particularly debts with underlying collateral.

(7) To rely on the experience and expertise of private sector

professionals to provide debt collection services to Federal

agencies.

(c) Chapter 37 of title 31, United States Code, is amended—

(1) in each of sections 3711, 3716, 3717, and 3718, by striking ‘‘the head of an executive or legislative agency’’ each place

it appears and inserting ‘‘the head of an executive, judicial, or

legislative agency’’; and

(2) by amending section 3701(a)(4) to read as follows:
DEBT COLLECTION IMPROVEMENT ACT OF 1996 426

‘‘(4) ‘executive, judicial, or legislative agency’ means a department, agency, court, court administrative office, or instrumentality in the executive, judicial, or legislative branch of

Government, including government corporations.’’

(d)(1) PERSONS SUBJECT TO ADMINISTRATIVE OFFSET.—Section

3701(c) of title 31, United States Code, is amended to read as follows:

‘‘(c) In sections 3716 and 3717 of this title, the term ‘person’ does

not include an agency of the United States Government.’’

(2) REQUIREMENTS AND PROCEDURES.—Section 3716 of title 31,

United States Code, is amended—

(A) by amending subsection (b) to read as follows:

‘‘(b) Before collecting a claim by administrative offset, the head

of an executive, judicial, or legislative agency must either—

‘‘(1) adopt, without change, regulations on collecting by administrative offset promulgated by the Department of Justice,

the General Accounting Office, or the Department of the Treasury; or

‘‘(2) prescribe regulations on collecting by administrative offset consistent with the regulations referred to in paragraph

(1).’’;

(B) by amending subsection (c)(2) to read as follows:

‘‘(2) when a statute explicitly prohibits using administrative

offset or setoff to collect the claim or type of claim involved.’’

(C) by redesignating subsection (c) as subsection (e); and

(D) by inserting after subsection (b) the following new subsections:

‘‘(c)(1)(A) Except as otherwise provided in this subsection, a disbursing official of the Department of the Treasury, the Department

of Defense, the United States Postal Service, or any other government corporation, or any disbursing official of the United States

designated by the Secretary of the Treasury, shall offset at least

annually the amount of a payment which a payment certifying

agency has certified to the disbursing official for disbursement, by

an amount equal to the amount of a claim which a creditor agency

has certified to the Secretary of the Treasury pursuant to this subsection.

‘‘(B) An agency that designates disbursing officials pursuant to

section 3321(c) of this title is not required to certify claims arising

out of its operations to the Secretary of the Treasury before such

agency’s disbursing officials offset such claims.

‘‘(C) Payments certified by the Department of Education under a

program administered by the Secretary of Education under title IV

of the Higher Education Act of 1965 shall not be subject to administrative offset under this subsection.

‘‘(2) Neither the disbursing official nor the payment certifying

agency shall be liable—

‘‘(A) for the amount of the administrative offset on the basis

that the underlying obligation, represented by the payment before the administrative offset was taken, was not satisfied; or

‘‘(B) for failure to provide timely notice under paragraph (8).

‘‘(3)(A)(i) Notwithstanding any other provision of law (including

sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C.

407 and 1383(d)(1)), section 413(b) of Public Law 91–173 (30 U.S.C.
427 DEBT COLLECTION IMPROVEMENT ACT OF 1996

923(b)), and section 14 of the Act of August 29, 1935 (45 U.S.C.

231m)), except as provided in clause (ii), all payments due to an individual under—

‘‘(I) the Social Security Act,

‘‘(II) part B of the Black Lung Benefits Act, or

‘‘(III) any law administered by the Railroad Retirement

Board (other than payments that such Board determines to be

tier 2 benefits), shall be subject to offset under this section. ‘‘(ii) An amount of $9,000 which a debtor may receive under Federal benefit programs cited under clause (i) within a 12-month period shall be exempt from offset under this subsection. In applying

the $9,000 exemption, the disbursing official shall— ‘‘(I) reduce the $9,000 exemption amount for the 12-month

period by the amount of all Federal benefit payments made

during such 12-month period which are not subject to offset

under this subsection; and

‘‘(II) apply a prorated amount of the exemption to each periodic benefit payment to be made to the debtor during the applicable 12-month period.

For purposes of the preceding sentence, the amount of a periodic

benefit payment shall be the amount after any reduction or deduction required under the laws authorizing the program under which

such payment is authorized to be made (including any reduction or

deduction to recover any overpayment under such program).

‘‘(B) The Secretary of the Treasury shall exempt from administrative offset under this subsection payments under means-tested programs when requested by the head of the respective agency. The

Secretary may exempt other payments from administrative offset

under this subsection upon the written request of the head of a

payment certifying agency. A written request for exemption of

other payments must provide justification for the exemption under

standards prescribed by the Secretary. Such standards shall give

due consideration to whether administrative offset would tend to

interfere substantially with or defeat the purposes of the payment

certifying agency’s program. The Secretary shall report to the Congress annually on exemptions granted under this section.

‘‘(C) The provisions of sections 205(b)(1) and 1631(c)(1) of the Social Security Act shall not apply to any administrative offset executed pursuant to this section against benefits authorized by either

title II or title XVI of the Social Security Act, respectively.

‘‘(4) The Secretary of the Treasury may charge a fee sufficient to

cover the full cost of implementing this subsection. The fee may be

collected either by the retention of a portion of amounts collected

pursuant to this subsection, or by billing the agency referring or

transferring a claim for those amounts. Fees charged to the agencies shall be based on actual administrative offsets completed.

Amounts received by the United States as fees under this subsection shall be deposited into the account of the Department of the

Treasury under section 3711(g)(7) of this title, and shall be collected and accounted for in accordance with the provisions of that

section.

‘‘(5) The Secretary of the Treasury in consultation with the Commissioner of Social Security and the Director of the Office of Management and Budget, may prescribe such rules, regulations, and
DEBT COLLECTION IMPROVEMENT ACT OF 1996 428

procedures as the Secretary of the Treasury considers necessary to

carry out this subsection. The Secretary shall consult with the

heads of affected agencies in the development of such rules, regulations, and procedures.

‘‘(6) Any Federal agency that is owed by a person a past due, legally enforceable nontax debt that is over 180 days delinquent, including nontax debt administered by a third party acting as an

agent for the Federal Government, shall notify the Secretary of the

Treasury of all such nontax debts for purposes of administrative

offset under this subsection.

‘‘(7)(A) The disbursing official conducting an administrative offset

with respect to a payment to a payee shall notify the payee in writing of—

‘‘(i) the occurrence of the administrative offset to satisfy a

past due legally enforceable debt, including a description of the

type and amount of the payment otherwise payable to the

payee against which the offset was executed;

‘‘(ii) the identity of the creditor agency requesting the offset;

and

‘‘(iii) a contact point within the creditor agency that will handle concerns regarding the offset.

‘‘(B) If the payment to be offset is a periodic benefit payment, the

disbursing official shall take reasonable steps, as determined by

the Secretary of the Treasury, to provide the notice to the payee

not later than the date on which the payee is otherwise scheduled

to receive the payment, or as soon as practical thereafter, but no

later than the date of the administrative offset. Notwithstanding

the preceding sentence, the failure of the debtor to receive such notice shall not impair the legality of such administrative offset.

‘‘(8) A levy pursuant to the Internal Revenue Code of 1986 shall

take precedence over requests for administrative offset pursuant to

other laws.

‘‘(d) Nothing in this section is intended to prohibit the use of any

other administrative offset authority existing under statute or common law.’’.

(3) NONTAX DEBT OR CLAIM DEFINED.—Section 3701 of title 31,

United States Code, is amended in subsection (a) by adding at the

end the following new paragraph:

‘‘(8) ‘nontax’ means, with respect to any debt or claim, any

debt or claim other than a debt or claim under the Internal

Revenue Code of 1986.’’.

(4) TREASURY CHECK WITHHOLDING.—Section 3712 of title 31,

United States Code, is amended by adding at the end the following

new subsection:

‘‘(e) TREASURY CHECK OFFSET.—

‘‘(1) IN GENERAL.—To facilitate collection of amounts owed by

presenting banks pursuant to subsection (a) or (b), upon the direction of the Secretary, a Federal reserve bank shall withhold

credit from banks presenting Treasury checks for ultimate

charge to the account of the United States Treasury. By presenting Treasury checks for payment a presenting bank is

deemed to authorize this offset.

‘‘(2) ATTEMPT TO COLLECT REQUIRED.—Prior to directing offset under subsection (a)(1), the Secretary shall first attempt to
429 DEBT COLLECTION IMPROVEMENT ACT OF 1996

collect amounts owed in the manner provided by sections 3711

and 3716.’’

(e) Section 3716 of title 31, United States Code, as amended by

subsection (d)(2) of this section, is further amended by adding at

the end the following new subsections:

‘‘(f) The Secretary may waive the requirements of sections

552a(o) and (p) of title 5 for administrative offset or claims collection upon written certification by the head of a State or an executive, judicial, or legislative agency seeking to collect the claim that

the requirements of subsection (a) of this section have been met.

‘‘(g) The Data Integrity Board of the Department of the Treasury

established under 552a(u) of title 5 shall review and include in reports under paragraph (3)(D) of that section a description of any

matching activities conducted under this section. If the Secretary

has granted a waiver under subsection (f) of this section, no other

Data Integrity Board is required to take any action under section

552a(u) of title 5.’’.

(f) Section 3716 of title 31, United States Code, as amended by

subsections (d) and (e) of this section, is further amended by adding

at the end the following new subsection:

‘‘(h)(1) The Secretary may, in the discretion of the Secretary,

apply subsection (a) with respect to any past-due, legally-enforceable debt owed to a State if—

‘‘(A) the appropriate State disbursing official requests that

an offset be performed; and

‘‘(B) a reciprocal agreement with the State is in effect which

contains, at a minimum—

‘‘(i) requirements substantially equivalent to subsection

(b) of this section; and

‘‘(ii) any other requirements which the Secretary considers appropriate to facilitate the offset and prevent duplicative efforts.

‘‘(2) This subsection does not apply to—

‘‘(A) the collection of a debt or claim on which the administrative costs associated with the collection of the debt or claim

exceed the amount of the debt or claim;

‘‘(B) any collection of any other type, class, or amount of

claim, as the Secretary considers necessary to protect the interest of the United States; or

‘‘(C) the disbursement of any class or type of payment exempted by the Secretary of the Treasury at the request of a

Federal agency.

‘‘(3) In applying this section with respect to any debt owed to a

State, subsection (c)(3)(A) shall not apply.’’.

(g)(1) TITLE 31.—Title 31, United States Code, is amended—

(A) in section 3322(a), by inserting ‘‘section 3716 and section

3720A of this title and’’ after ‘‘Except as provided in’’;

(B) in section 3325(a)(3), by inserting ‘‘or pursuant to payment intercepts or offsets pursuant to section 3716 or 3720A

of this title,’’ after ‘‘voucher’’; and

(C) in each of sections 3711(e)(2) and 3717(h) by inserting ‘‘,

the Secretary of the Treasury,’’ after ‘‘Attorney General’’.

(2) INTERNAL REVENUE CODE OF 1986.—Subparagraph (A) of section 6103(l)(10) of the Internal Revenue Code of 1986 (26 U.S.C.
DEBT COLLECTION IMPROVEMENT ACT OF 1996 430

6103(l)(10)) is amended by inserting ‘‘and to officers and employees

of the Department of the Treasury in connection with such reduction’’ after ‘‘6402’’.

(h) Section 5514 of title 5, United States Code, is amended—

(A) in subsection (a)—

(i) by adding at the end of paragraph (1) the following:

‘‘All Federal agencies to which debts are owed and which

have outstanding delinquent debts shall participate in a

computer match at least annually of their delinquent debt

records with records of Federal employees to identify those

employees who are delinquent in repayment of those debts.

The preceding sentence shall not apply to any debt under

the Internal Revenue Code of 1986. Matched Federal employee records shall include, but shall not be limited to,

records of active Civil Service employees government-wide,

military active duty personnel, military reservists, United

States Postal Service employees, employees of other government corporations, and seasonal and temporary employees. The Secretary of the Treasury shall establish and

maintain an interagency consortium to implement centralized salary offset computer matching, and promulgate regulations for this program. Agencies that perform centralized salary offset computer matching services under this

subsection are authorized to charge a fee sufficient to cover

the full cost for such services.’’;

(ii) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively;

(iii) by inserting after paragraph (2) the following new

paragraph:

‘‘(3) Paragraph (2) shall not apply to routine intra-agency adjustments of pay that are attributable to clerical or administrative errors or delays in processing pay documents that have occurred within the four pay periods preceding the adjustment

and to any adjustment that amounts to $50 or less, if at the

time of such adjustment, or as soon thereafter as practical, the

individual is provided written notice of the nature and the

amount of the adjustment and a point of contact for contesting

such adjustment.’’; and

(iv) by amending paragraph (5)(B) (as redesignated by

clause (ii) of this subparagraph) to read as follows:

‘‘(B) ‘agency’ includes executive departments and agencies, the United States Postal Service, the Postal Rate

Commission, the United States Senate, the United States

House of Representatives, and any court, court administrative office, or instrumentality in the judicial or legislative

branches of the Government, and government corporations.’’;

(B) by adding after subsection (c) the following new subsection:

‘‘(d) A levy pursuant to the Internal Revenue Code of 1986 shall

take precedence over other deductions under this section.’’.

(i)(1) IN GENERAL.—Section 7701 of title 31, United States Code,

is amended by adding at the end the following new subsections:
431 DEBT COLLECTION IMPROVEMENT ACT OF 1996

‘‘(c)(1) The head of each Federal agency shall require each person

doing business with that agency to furnish to that agency such person’s taxpayer identifying number.

‘‘(2) For purposes of this subsection, a person shall be considered

to be doing business with a Federal agency if the person is—

‘‘(A) a lender or servicer in a Federal guaranteed or insured

loan program administered by the agency;

‘‘(B) an applicant for, or recipient of, a Federal license, permit, right-of-way, grant, or benefit payment administered by

the agency or insurance administered by the agency;

‘‘(C) a contractor of the agency;

‘‘(D) assessed a fine, fee, royalty or penalty by the agency;

and

‘‘(E) in a relationship with the agency that may give rise to

a receivable due to that agency, such as a partner of a borrower in or a guarantor of a Federal direct or insured loan administered by the agency.

‘‘(3) Each agency shall disclose to a person required to furnish a

taxpayer identifying number under this subsection its intent to use

such number for purposes of collecting and reporting on any delinquent amounts arising out of such person’s relationship with the

Government.

‘‘(4) For purposes of this subsection, a person shall not be treated

as doing business with a Federal agency solely by reason of being

a debtor under third party claims of the United States. The preceding sentence shall not apply to a debtor owing claims resulting

from petroleum pricing violations or owing claims resulting from

Federal loan or loan guarantee/insurance programs.

‘‘(d) Notwithstanding section 552a(b) of title 5, United States

Code, creditor agencies to which a delinquent claim is owed, and

their agents, may match their debtor records with Department of

Health and Human Services, and Department of Labor records to

obtain names (including names of employees), name controls,

names of employers, taxpayer identifying numbers, addresses (including addresses of employers), and dates of birth. The preceding

sentence shall apply to the disclosure of taxpayer identifying numbers only if such disclosure is not otherwise prohibited by section

6103 of the Internal Revenue Code of 1986. The Department of

Health and Human Services, and the Department of Labor shall

release that information to creditor agencies and may charge reasonable fees sufficient to pay the costs associated with that release.’’.

(2) INCLUDED FEDERAL LOAN PROGRAM DEFINED.—Subparagraph

(C) of section 6103(l)(3) of the Internal Revenue Code of 1986 (relating to disclosure that applicant for Federal loan has tax delinquent account) is amended to read as follows:

‘‘(C) INCLUDED FEDERAL LOAN PROGRAM DEFINED.—For purposes of this paragraph, the term ‘included Federal loan program’ means any program under which the United States or

a Federal agency makes, guarantees, or insures loans.’’.

(3) CLERICAL AMENDMENTS.—

(A) The chapter title to chapter 77 of subtitle VI of title 31,

United States Code, is amended to read as follows:
DEBT COLLECTION IMPROVEMENT ACT OF 1996 432

‘‘CHAPTER 77—ACCESS TO INFORMATION FOR DEBT COLLECTION’’.

(B) The table of chapters for subtitle VI of title 31, United

States Code, is amended by inserting before the item relating

to chapter 91 the following new item:

‘‘77. Access to information for debt collection ............................................ 7701’’.

(j)(1) IN GENERAL.—Title 31, United States Code, is amended by

inserting after section 3720A the following new section:

‘‘SEC. 3720B. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING FEDERAL LOANS OR LOAN INSURANCE GUARANTEES.

‘‘(a) Unless this subsection is waived by the head of a Federal

agency, a person may not obtain any Federal financial assistance

in the form of a loan (other than a disaster loan) or loan insurance

or guarantee administered by the agency if the person has an outstanding debt (other than a debt under the Internal Revenue Code

of 1986) with any Federal agency which is in a delinquent status,

as determined under standards prescribed by the Secretary of the

Treasury. Such a person may obtain additional loans or loan guarantees only after such delinquency is resolved in accordance with

those standards. The Secretary of the Treasury may exempt, at the

request of an agency, any class of claims.

‘‘(b) The head of a Federal agency may delegate the waiver authority under subsection (a) to the Chief Financial Officer of the

agency. The waiver authority may be redelegated only to the Deputy Chief Financial Officer of the agency.’’

(2) CLERICAL AMENDMENT.—The table of sections for subchapter

II of chapter 37 of title 31, United States Code, is amended by inserting after the item relating to section 3720A the following new

item:

‘‘3720B. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING

FEDERAL LOANS OR LOAN INSURANCE GUARANTEES.’’.

(k) Section 3711(f) of title 31, United States Code, is amended—

(1) by striking ‘‘may’’ the first place it appears and inserting

‘‘shall’’;

(2) by striking ‘‘an individual’’ each place it appears and inserting ‘‘a person’’;

(3) by striking ‘‘the individual’’ each place it appears and inserting ‘‘the person’’; and

(4) by adding at the end the following new paragraphs:

‘‘(4) The head of each executive agency shall require, as a

condition for insuring or guaranteeing any loan, financing, or

other extension of credit under any law to a person, that the

lender provide information relating to the extension of credit to

consumer reporting agencies or commercial reporting agencies,

as appropriate.

‘‘(5) The head of each executive agency may provide to a

consumer reporting agency or commercial reporting agency information from a system of records that a person is responsible

for a claim which is current, if notice required by section

552a(e)(4) of title 5 indicates that information in the system

may be disclosed to a consumer reporting agency or commercial

reporting agency, respectively.’’.

(l) Section 3718 of title 31, United States Code, is amended—
433 DEBT COLLECTION IMPROVEMENT ACT OF 1996

(1) in subsection (a), by striking the first sentence and inserting the following: ‘‘Under conditions the head of an executive, judicial, or legislative agency considers appropriate, the

head of the agency may enter into a contract with a person for

collection service to recover indebtedness owed, or to locate or

recover assets of, the United States Government. The head of

an agency may not enter into a contract under the preceding

sentence to locate or recover assets of the United States held

by a State government or financial institution unless that

agency has established procedures approved by the Secretary

of the Treasury to identify and recover such assets.’’; and

(2) in subsection (d), by inserting ‘‘, or to locate or recover assets of,’’ after ‘‘owed’’.

(m)(1) IN GENERAL.—Section 3711 of title 31, United States

Code, is amended by adding at the end the following new subsections:

‘‘(g)(1) If a nontax debt or claim owed to the United States has

been delinquent for a period of 180 days—

‘‘(A) the head of the executive, judicial, or legislative agency

that administers the program that gave rise to the debt or

claim shall transfer the debt or claim to the Secretary of the

Treasury; and

‘‘(B) upon such transfer the Secretary of the Treasury shall

take appropriate action to collect or terminate collection actions on the debt or claim.

‘‘(2) Paragraph (1) shall not apply—

‘‘(A) to any debt or claim that—

‘‘(i) is in litigation or foreclosure;

‘‘(ii) will be disposed of under an asset sales program

within 1 year after becoming eligible for sale, or later than

1 year if consistent with an asset sales program and a

schedule established by the agency and approved by the

Director of the Office of Management and Budget;

‘‘(iii) has been referred to a private collection contractor

for collection for a period of time determined by the Secretary of the Treasury;

‘‘(iv) has been referred by, or with the consent of, the

Secretary of the Treasury to a debt collection center for a

period of time determined by the Secretary of the Treasury; or

‘‘(v) will be collected under internal offset, if such offset

is sufficient to collect the claim within 3 years after the

date the debt or claim is first delinquent; and

‘‘(B) to any other specific class of debt or claim, as determined by the Secretary of the Treasury at the request of the

head of an executive, judicial, or legislative agency or otherwise.

‘‘(3) For purposes of this section, the Secretary of the Treasury

may designate, and withdraw such designation of debt collection

centers operated by other Federal agencies. The Secretary of the

Treasury shall designate such centers on the basis of their performance in collecting delinquent claims owed to the Government.

‘‘(4) At the discretion of the Secretary of the Treasury, referral

of a nontax claim may be made to—
DEBT COLLECTION IMPROVEMENT ACT OF 1996 434

‘‘(A) any executive department or agency operating a debt

collection center for servicing, collection, compromise, or suspension or termination of collection action;

‘‘(B) a private collection contractor operating under a contract for servicing or collection action; or

‘‘(C) the Department of Justice for litigation.

‘‘(5) Nontax claims referred or transferred under this section

shall be serviced, collected, or compromised, or collection action

thereon suspended or terminated, in accordance with otherwise applicable statutory requirements and authorities. Executive departments and agencies operating debt collection centers may enter

into agreements with the Secretary of the Treasury to carry out the

purposes of this subsection. The Secretary of the Treasury shall—

‘‘(A) maintain competition in carrying out this subsection;

‘‘(B) maximize collections of delinquent debts by placing delinquent debts quickly;

‘‘(C) maintain a schedule of private collection contractors and

debt collection centers eligible for referral of claims; and

‘‘(D) refer delinquent debts to the person most appropriate to

collect the type or amount of claim involved.

‘‘(6) Any agency operating a debt collection center to which

nontax claims are referred or transferred under this subsection

may charge a fee sufficient to cover the full cost of implementing

this subsection. The agency transferring or referring the nontax

claim shall be charged the fee, and the agency charging the fee

shall collect such fee by retaining the amount of the fee from

amounts collected pursuant to this subsection. Agencies may agree

to pay through a different method, or to fund an activity from another account or from revenue received from the procedure described under section 3720C of this title. Amounts charged under

this subsection concerning delinquent claims may be considered as

costs pursuant to section 3717(e) of this title.

‘‘(7) Notwithstanding any other law concerning the depositing

and collection of Federal payments, including section 3302(b) of

this title, agencies collecting fees may retain the fees from amounts

collected. Any fee charged pursuant to this subsection shall be deposited into an account to be determined by the executive department or agency operating the debt collection center charging the

fee (in this subsection referred to in this section as the ‘Account’).

Amounts deposited in the Account shall be available until expended to cover costs associated with the implementation and operation of Governmentwide debt collection activities. Costs properly

chargeable to the Account include—

‘‘(A) the costs of computer hardware and software, word processing and telecommunications equipment, and other equipment, supplies, and furniture;

‘‘(B) personnel training and travel costs;

‘‘(C) other personnel and administrative costs;

‘‘(D) the costs of any contract for identification, billing, or collection services; and

‘‘(E) reasonable costs incurred by the Secretary of the Treasury, including services and utilities provided by the Secretary,

and administration of the Account.
435 DEBT COLLECTION IMPROVEMENT ACT OF 1996

‘‘(8) Not later than January 1 of each year, there shall be deposited into the Treasury as miscellaneous receipts an amount equal

to the amount of unobligated balances remaining in the Account at

the close of business on September 30 of the preceding year, minus

any part of such balance that the executive department or agency

operating the debt collection center determines is necessary to

cover or defray the costs under this subsection for the fiscal year

in which the deposit is made.

‘‘(9) Before discharging any delinquent debt owed to any executive, judicial, or legislative agency, the head of such agency shall

take all appropriate steps to collect such debt, including (as applicable)—

‘‘(A) administrative offset,

‘‘(B) tax refund offset,

‘‘(C) Federal salary offset,

‘‘(D) referral to private collection contractors,

‘‘(E) referral to agencies operating a debt collection center,

‘‘(F) reporting delinquencies to credit reporting bureaus,

‘‘(G) garnishing the wages of delinquent debtors, and

‘‘(H) litigation or foreclosure.

‘‘(10) To carry out the purposes of this subsection, the Secretary

of the Treasury may prescribe such rules, regulations, and procedures as the Secretary considers necessary and transfer such funds

from funds appropriated to the Department of the Treasury as may

be necessary to meet existing liabilities and obligations incurred

prior to the receipt of revenues that result from debt collections.

‘‘(h)(1) The head of an executive, judicial, or legislative agency

acting under subsection (a) (1), (2), or (3) of this section to collect

a claim, compromise a claim, or terminate collection action on a

claim may obtain a consumer report (as that term is defined in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)) or

comparable credit information on any person who is liable for the

claim.

‘‘(2) The obtaining of a consumer report under this subsection is

deemed to be a circumstance or purpose authorized or listed under

section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b).’’.

(2) RETURNS RELATING TO CANCELLATION OF INDEBTEDNESS BY

CERTAIN ENTITIES.—

(A) IN GENERAL.—Subsection (a) of section 6050P of the Internal Revenue Code of 1986 (relating to returns relating to

the cancellation of indebtedness by certain financial entities) is

amended by striking ‘‘applicable financial entity’’ and inserting

‘‘applicable entity’’.

(B) ENTITIES TO WHICH REQUIREMENT APPLIES.—Subsection

(c) of section 6050P of such Code is amended—

(i) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively, and inserting before paragraph (2) (as so redesignated) the following new paragraph:

‘‘(1) APPLICABLE ENTITY.—The term ‘applicable entity’ means—

‘‘(A) an executive, judicial, or legislative agency (as defined

in section 3701(a)(4) of title 31, United States Code), and

‘‘(B) an applicable financial entity.’’, and
DEBT COLLECTION IMPROVEMENT ACT OF 1996 436

(ii) in paragraph (3), as so redesignated, by striking

‘‘(1)(B)’’ and inserting ‘‘(1)(A) or (2)(B)’’.

(C) ALTERNATIVE PROCEDURE.—Section 6050P of such Code is

amended by adding at the end the following new subsection:

‘‘(e) ALTERNATIVE PROCEDURE.—In lieu of making a return required under subsection (a), an agency described in subsection

(c)(1)(A) may submit to the Secretary (at such time and in such

form as the Secretary may by regulations prescribe) information

sufficient for the Secretary to complete such a return on behalf of

such agency. Upon receipt of such information, the Secretary shall

complete such return and provide a copy of such return to such

agency.’’

(D) CONFORMING AMENDMENTS.— (i) Subsection (d) of section 6050P of such Code is

amended by striking ‘‘applicable financial entity’’ and inserting ‘‘applicable entity’’.

(ii) The heading of section 6050P of such Code is amended to read as follows:

‘‘SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY CERTAIN ENTITIES.’’

(iii) The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by striking the item relating to section 6050P and inserting the

following new item:

‘‘Sec. 6050P. Returns relating to the cancellation of indebtedness by certain entities.’’

(n) Effective October 1, 1995, section 11 of the Administrative

Dispute Resolution Act (Public Law 101–552, 5 U.S.C. 571 note)

shall not apply to the amendment made by section 8(b) of such Act.

(o)(1) IN GENERAL.—Chapter 37 of title 31, United States Code,

is amended in subchapter II by adding after section 3720C, as

added by subsection (t) of this section, the following new section:

‘‘SEC. 3720D. GARNISHMENT.

‘‘(a) Notwithstanding any provision of State law, the head of an

executive, judicial, or legislative agency that administers a program

that gives rise to a delinquent nontax debt owed to the United

States by an individual may in accordance with this section garnish the disposable pay of the individual to collect the amount

owed, if the individual is not currently making required repayment

in accordance with any agreement between the agency head and

the individual.

‘‘(b) In carrying out any garnishment of disposable pay of an individual under subsection (a), the head of an executive, judicial, or

legislative agency shall comply with the following requirements:

‘‘(1) The amount deducted under this section for any pay period may not exceed 15 percent of disposable pay, except that

a greater percentage may be deducted with the written consent

of the individual.

‘‘(2) The individual shall be provided written notice, sent by

mail to the individual’s last known address, a minimum of 30

days prior to the initiation of proceedings, from the head of the

executive, judicial, or legislative agency, informing the individual of—
437 DEBT COLLECTION IMPROVEMENT ACT OF 1996

‘‘(A) the nature and amount of the debt to be collected;

‘‘(B) the intention of the agency to initiate proceedings to

collect the debt through deductions from pay; and

‘‘(C) an explanation of the rights of the individual under

this section.

‘‘(3) The individual shall be provided an opportunity to inspect and copy records relating to the debt.

‘‘(4) The individual shall be provided an opportunity to enter

into a written agreement with the executive, judicial, or legislative agency, under terms agreeable to the head of the agency,

to establish a schedule for repayment of the debt.

‘‘(5) The individual shall be provided an opportunity for a

hearing in accordance with subsection (c) on the determination

of the head of the executive, judicial, or legislative agency concerning—

‘‘(A) the existence or the amount of the debt, and

‘‘(B) in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to paragraph (4), the terms of the repayment schedule.

‘‘(6) If the individual has been reemployed within 12 months

after having been involuntarily separated from employment, no

amount may be deducted from the disposable pay of the individual until the individual has been reemployed continuously

for at least 12 months.

‘‘(c)(1) A hearing under subsection (b)(5) shall be provided prior

to issuance of a garnishment order if the individual, on or before

the 15th day following the mailing of the notice described in subsection (b)(2), and in accordance with such procedures as the head

of the executive, judicial, or legislative agency may prescribe, files

a petition requesting such a hearing.

‘‘(2) If the individual does not file a petition requesting a hearing

prior to such date, the head of the agency shall provide the individual a hearing under subsection (a)(5) upon request, but such hearing need not be provided prior to issuance of a garnishment order.

‘‘(3) The hearing official shall issue a final decision at the earliest

practicable date, but not later than 60 days after the filing of the

petition requesting the hearing.

‘‘(d) The notice to the employer of the withholding order shall

contain only such information as may be necessary for the employer to comply with the withholding order.

‘‘(e)(1) An employer may not discharge from employment, refuse

to employ, or take disciplinary action against an individual subject

to wage withholding in accordance with this section by reason of

the fact that the individual’s wages have been subject to garnishment under this section, and such individual may sue in a State

or Federal court of competent jurisdiction any employer who takes

such action.

‘‘(2) The court shall award attorneys’ fees to a prevailing employee and, in its discretion, may order reinstatement of the individual, award punitive damages and back pay to the employee, or

order such other remedy as may be reasonably necessary.

‘‘(f)(1) The employer of an individual—
DEBT COLLECTION IMPROVEMENT ACT OF 1996 438

‘‘(A) shall pay to the head of an executive, judicial, or legislative agency as directed in a withholding order issued in an action under this section with respect to the individual, and

‘‘(B) shall be liable for any amount that the employer fails

to withhold from wages due an employee following receipt by

such employer of notice of the withholding order, plus attorneys’ fees, costs, and, in the court’s discretion, punitive damages.

‘‘(2)(A) The head of an executive, judicial, or legislative agency

may sue an employer in a State or Federal court of competent jurisdiction to recover amounts for which the employer is liable

under paragraph (1)(B).

‘‘(B) A suit under this paragraph may not be filed before the termination of the collection action, unless earlier filing is necessary

to avoid expiration of any applicable statute of limitations period.

‘‘(3) Notwithstanding paragraphs (1) and (2), an employer shall

not be required to vary its normal pay and disbursement cycles in

order to comply with this subsection.

‘‘(g) For the purpose of this section, the term ‘disposable pay’

means that part of the compensation of any individual from an employer remaining after the deduction of any amounts required by

any other law to be withheld.

‘‘(h) The Secretary of the Treasury shall issue regulations to implement this section.’’.

(2) CLERICAL AMENDMENT.—The table of sections for subchapter

II of chapter 37 of title 31, United States Code, is amended by inserting after the item relating to section 3720C (as added by subsection (t) of this section) the following new item:

‘‘§ 3720D. Garnishment’’.

(p) Section 3711 of title 31, United States Code, as amended by

subsection (m) of this section, is further amended by adding at the

end the following new subsection:

‘‘(i)(1) The head of an executive, judicial, or legislative agency

may sell, subject to section 504(b) of the Federal Credit Reform Act

of 1990 and using competitive procedures, any nontax debt owed to

the United States that is delinquent for more than 90 days. Appropriate fees charged by a contractor to assist in the conduct of a sale

under this subsection may be payable from the proceeds of the sale.

‘‘(2) After terminating collection action, the head of an executive,

judicial, or legislative agency shall sell, using competitive procedures, any nontax debt or class of nontax debts owed to the United

States, if the Secretary of the Treasury determines the sale is in

the best interests of the United States.

‘‘(3) Sales of nontax debt under this subsection—

‘‘(A) shall be for—

‘‘(i) cash, or

‘‘(ii) cash and a residuary equity or profit participation,

if the head of the agency reasonably determines that the

proceeds will be greater than sale solely for cash,

‘‘(B) shall be without recourse, but may include the use of

guarantees if otherwise authorized, and

‘‘(C) shall transfer to the purchaser all rights of the Government to demand payment of the nontax debt, other than with
439 DEBT COLLECTION IMPROVEMENT ACT OF 1996

respect to a residuary equity or profit participation under subparagraph (A)(ii).

‘‘(4)(A) Within one year after the date of enactment of the Debt

Collection Improvement Act of 1996, each executive agency with

current and delinquent collateralized nontax debts shall report to

the Congress on the valuation of its existing portfolio of loans,

notes and guarantees, and other collateralized debts based on

standards developed by the Director of the Office of Management

and Budget, in consultation with the Secretary of the Treasury.

‘‘(B) The Director of the Office of Management and Budget shall

determine what information is required to be reported to comply

with subparagraph (A). At a minimum, for each financing account

and for each liquidating account (as those terms are defined in sections 502(7) and 502(8), respectively, of the Federal Credit Reform

Act of 1990) the following information shall be reported:

‘‘(i) The cumulative balance of current debts outstanding, the

estimated net present value of such debts, the annual administrative expenses of those debts (including the portion of salaries and expenses that are directly related thereto), and the estimated net proceeds that would be received by the Government if such debts were sold.

‘‘(ii) The cumulative balance of delinquent debts, debts outstanding, the estimated net present value of such debts, the

annual administrative expenses of those debts (including the

portion of salaries and expenses that are directly related thereto), and the estimated net proceeds that would be received by

the Government if such debts were sold.

‘‘(iii) The cumulative balance of guaranteed loans outstanding, the estimated net present value of such guarantees, the

annual administrative expenses of such guarantees (including

the portion of salaries and expenses that are directly related

to such guaranteed loans), and the estimated net proceeds that

would be received by the Government if such loan guarantees

were sold.

‘‘(iv) The cumulative balance of defaulted loans that were

previously guaranteed and have resulted in loans receivables,

the estimated net present value of such loan assets, the annual

administrative expenses of such loan assets (including the portion of salaries and expenses that are directly related to such

loan assets), and the estimated net proceeds that would be received by the Government if such loan assets were sold.

‘‘(v) The marketability of all debts.

‘‘(5) This subsection is not intended to limit existing statutory authority of agencies to sell loans, debts, or other assets.’’.

(q) Section 3717 of title 31, United States Code, is amended by

adding at the end of subsection (h) the following new subsection:

‘‘(i)(1) The head of an executive, judicial, or legislative agency

may increase an administrative claim by the cost of living adjustment in lieu of charging interest and penalties under this section.

Adjustments under this subsection will be computed annually.

‘‘(2) For the purpose of this subsection—

‘‘(A) the term ‘cost of living adjustment’ means the percentage by which the Consumer Price Index for the month of June

of the calendar year preceding the adjustment exceeds the
Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996 440

Consumer Price Index for the month of June of the calendar

year in which the claim was determined or last adjusted; and

‘‘(B) the term ‘administrative claim’ includes all debt that is

not based on an extension of Government credit through direct

loans, loan guarantees, or insurance, including fines, penalties,

and overpayments.’’.

(r)(1) IN GENERAL.—Chapter 37 of title 31, United States Code,

is amended in subchapter II by adding after section 3720D, as

added by subsection (o) of this section, the following new section:

‘‘§ 3720E. Dissemination of information regarding identity of

delinquent debtors

‘‘(a) The head of any agency may, with the review of the Secretary of the Treasury, for the purpose of collecting any delinquent

nontax debt owed by any person, publish or otherwise publicly disseminate information regarding the identity of the person and the

existence of the nontax debt.

‘‘(b)(1) The Secretary of the Treasury, in consultation with the

Director of the Office of Management and Budget and the heads of

other appropriate Federal agencies, shall issue regulations establishing procedures and requirements the Secretary considers appropriate to carry out this section.

‘‘(2) Regulations under this subsection shall include—

‘‘(A) standards for disseminating information that maximize

collections of delinquent nontax debts, by directing actions

under this section toward delinquent debtors that have assets

or income sufficient to pay their delinquent nontax debt;

‘‘(B) procedures and requirements that prevent dissemination

of information under this section regarding persons who have

not had an opportunity to verify, contest, and compromise their

nontax debt in accordance with this subchapter; and

‘‘(C) procedures to ensure that persons are not incorrectly

identified pursuant to this section.’’.

(2) CLERICAL AMENDMENT.—The table of sections for subchapter

II of chapter 37 of title 31, United States Code, is amended by adding after the item relating to section 3720D (as added by subsection

(o) of this section) the following new item:

‘‘3720E. Dissemination of information regarding identity of delinquent debtors.’’.

(s)(1) IN GENERAL.—The Federal Civil Penalties Inflation Adjustment Act of 1990 (Public Law 101–410, 104 Stat. 890; 28 U.S.C.

2461 note) is amended—

(A) by amending section 4 to read as follows:

‘‘SEC. 4. The head of each agency shall, not later than 180 days

after the date of enactment of the Debt Collection Improvement Act

of 1996, and at least once every 4 years thereafter—

‘‘(1) by regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency, except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986, the

Tariff Act of 1930, the Occupational Safety and Health Act of

1970, or the Social Security Act, by the inflation adjustment

described under section 5 of this Act; and

‘‘(2) publish each such regulation in the Federal Register.’’;
441 Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996

(B) in section 5(a), by striking ‘‘The adjustment described

under paragraphs (4) and (5)(A) of section 4’’ and inserting

‘‘The inflation adjustment under section 4’’; and

(C) by adding at the end the following new section:

‘‘SEC. 7. Any increase under this Act in a civil monetary penalty

shall apply only to violations which occur after the date the increase takes effect.’’

(2) LIMITATION ON INITIAL ADJUSTMENT.—The first adjustment

of a civil monetary penalty made pursuant to the amendment made

by paragraph (1) may not exceed 10 percent of such penalty.

(t)(1) IN GENERAL.—Title 31, United States Code, is amended by

inserting after section 3720B (as added by subsection (j) of this section) the following new section:

‘‘SEC. 3720C. DEBT COLLECTION IMPROVEMENT ACCOUNT.

‘‘(a)(1) There is hereby established in the Treasury a special fund

to be known as the ‘Debt Collection Improvement Account’ (hereinafter in this section referred to as the ‘Account’).

‘‘(2) The Account shall be maintained and managed by the Secretary of the Treasury, who shall ensure that agency programs are

credited with amounts transferred under subsection (b)(1).

‘‘(b)(1) Not later than 30 days after the end of a fiscal year, an

agency may transfer to the Account the amount described in paragraph (3), as adjusted under paragraph (4).

‘‘(2) Agency transfers to the Account may include collections

from—

‘‘(A) salary, administrative, and tax refund offsets;

‘‘(B) the Department of Justice;

‘‘(C) private collection agencies;

‘‘(D) sales of delinquent loans; and

‘‘(E) contracts to locate or recover assets.

‘‘(3) The amount referred to in paragraph (1) shall be 5 percent

of the amount of delinquent debt collected by an agency in a fiscal

year, minus the greater of—

‘‘(A) 5 percent of the amount of delinquent nontax debt collected by the agency in the previous fiscal year, or

‘‘(B) 5 percent of the average annual amount of delinquent

nontax debt collected by the agency in the previous 4 fiscal

years.

‘‘(4) In consultation with the Secretary of the Treasury, the Office

of Management and Budget may adjust the amount described in

paragraph (3) for an agency to reflect the level of effort in credit

management programs by the agency. As an indicator of the level

of effort in credit management, the Office of Management and

Budget shall consider the following:

‘‘(A) The number of days between the date a claim or debt

became delinquent and the date which an agency referred the

debt or claim to the Secretary of the Treasury or obtained an

exemption from this referral under section 3711(g)(2) of this

title.

‘‘(B) The ratio of delinquent debts or claims to total receivables for a given program, and the change in this ratio over a

period of time.
Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996 442

‘‘(c)(1) The Secretary of the Treasury may make payments from

the Account solely to reimburse agencies for qualified expenses. For

agencies with franchise funds, such payments may be credited to

subaccounts designated for debt collection.

‘‘(2) For purposes of this section, the term ‘qualified expenses’

means expenditures for the improvement of credit management,

debt collection, and debt recovery activities, including—

‘‘(A) account servicing (including cross-servicing under section 3711(g) of this title),

‘‘(B) automatic data processing equipment acquisitions,

‘‘(C) delinquent debt collection,

‘‘(D) measures to minimize delinquent debt,

‘‘(E) sales of delinquent debt,

‘‘(F) asset disposition, and

‘‘(G) training of personnel involved in credit and debt management.

‘‘(3)(A) Amounts transferred to the Account shall be available to

the Secretary of the Treasury for purposes of this section to the extent and in amounts provided in advance in appropriations Acts.

‘‘(B) As soon as practicable after the end of the third fiscal year

after which amounts transferred are first available pursuant to this

section, and every 3 years thereafter, any uncommitted balance in

the Account shall be transferred to the general fund of the Treasury as miscellaneous receipts.

‘‘(d) For direct loans and loan guarantee programs subject to title

V of the Congressional Budget Act of 1974, amounts credited in accordance with subsection (c) shall be considered administrative

costs.

‘‘(e) The Secretary of the Treasury shall prescribe such rules, regulations, and procedures as the Secretary considers necessary or

appropriate to carry out the purposes of this section.’’.

(2) CLERICAL AMENDMENT.—The table of sections for chapter 37

of title 31, United States Code, is amended by inserting after the

item relating to section 3720B (as added by subsection (j) of this

section) the following new item:

‘‘3720C. Debt Collection Improvement Account.’’.

(u)(1) DISCRETIONARY AUTHORITY.—Section 3720A of title 31,

United States Code, is amended by adding after subsection (h) the

following new subsection:

‘‘(i) An agency subject to section 9 of the Act of May 18, 1933 (16

U.S.C. 831h), may implement this section at its discretion.’’

(2) FEDERAL AGENCY DEFINED.—Section 6402(f) of the Internal

Revenue Code of 1986 (26 U.S.C. 6402(f)) is amended to read as follows:

‘‘(f) FEDERAL AGENCY.—For purposes of this section, the term

‘Federal agency’ means a department, agency, or instrumentality of

the United States, and includes a Government corporation (as such

term is defined in section 103 of title 5, United States Code).’’

(v)(1) NOTIFICATION OF SECRETARY OF THE TREASURY.—Section

3720A(a) of title 31, United States Code, is amended to read as follows:

‘‘(a) Any Federal agency that is owed by a person a past-due, legally enforceable debt (including debt administered by a third party
443 Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996

acting as an agent for the Federal Government) shall, and any

agency subject to section 9 of the Act of May 18, 1933 (16 U.S.C.

831h), owed such a debt may, in accordance with regulations issued

pursuant to subsections (b) and (d), notify the Secretary of the

Treasury at least once each year of the amount of such debt.’’

(2) IMPLEMENTATION OF SUPPORT COLLECTION BY SECRETARY OF

THE TREASURY.—Section 464(a) of the Social Security Act (42

U.S.C. 664(a)) is amended—

(1) in paragraph (1), by adding at the end the following:

‘‘This subsection may be executed by the disbursing official of

the Department of the Treasury.’’; and

(2) in paragraph (2)(A), by adding at the end the following:

‘‘This subsection may be executed by the Secretary of the Department of the Treasury or his designee.’’.

(w) Section 3720A(h) of title 31, United States Code, is amended

to read as follows:

‘‘(h)(1) The disbursing official of the Department of the Treasury—

‘‘(1) shall notify a taxpayer in writing of—

‘‘(A) the occurrence of an offset to satisfy a past-due legally enforceable nontax debt;

‘‘(B) the identity of the creditor agency requesting the

offset; and

‘‘(C) a contact point within the creditor agency that will

handle concerns regarding the offset;

‘‘(2) shall notify the Internal Revenue Service on a weekly

basis of—

‘‘(A) the occurrence of an offset to satisfy a past-due legally enforceable non-tax debt;

‘‘(B) the amount of such offset; and

‘‘(C) any other information required by regulations; and

‘‘(3) shall match payment records with requests for offset by

using a name control, taxpayer identifying number (as that

term is used in section 6109 of the Internal Revenue Code of

1986), and any other necessary identifiers.’’.

‘‘(h)(2) The term ‘disbursing official’ of the Department of the

Treasury means the Secretary or his designee.’’

(x)(1) AMENDMENTS RELATING TO ELECTRONIC FUNDS TRANSFER.—Section 3332 of title 31, United States Code, popularly

known as the Federal Financial Management Act of 1994, is

amended—

(A) by redesignating subsection (e) as subsection (h), and inserting after subsection (d) the following new subsections:

‘‘(e)(1) Notwithstanding subsections (a) through (d) of this section, sections 5120 (a) and (d) of title 38, and any other provision

of law, all Federal payments to a recipient who becomes eligible for

that type of payment after 90 days after the date of the enactment

of the Debt Collection Improvement Act of 1996 shall be made by

electronic funds transfer.

‘‘(2) The head of a Federal agency shall, with respect to Federal

payments made or authorized by the agency, waive the application

of paragraph (1) to a recipient of those payments upon receipt of

written certification from the recipient that the recipient does not
Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996 444

have an account with a financial institution or an authorized payment agent.

‘‘(f)(1) Notwithstanding any other provision of law (including subsections (a) through (e) of this section and sections 5120 (a) and (d)

of title 38), except as provided in paragraph (2) all Federal payments made after January 1, 1999, shall be made by electronic

funds transfer.

‘‘(2)(A) The Secretary of the Treasury may waive application of

this subsection to payments—

‘‘(i) for individuals or classes of individuals for whom compliance imposes a hardship;

‘‘(ii) for classifications or types of checks; or

‘‘(iii) in other circumstances as may be necessary.

‘‘(B) The Secretary of the Treasury shall make determinations

under subparagraph (A) based on standards developed by the Secretary.

‘‘(g) Each recipient of Federal payments required to be made by

electronic funds transfer shall—

‘‘(1) designate 1 or more financial institutions or other authorized agents to which such payments shall be made; and

‘‘(2) provide to the Federal agency that makes or authorizes

the payments information necessary for the recipient to receive

electronic funds transfer payments through each institution or

agent designated under paragraph (1).’’; and

(B) by adding after subsection (h) (as so redesignated) the following new subsections:

‘‘(i)(1) The Secretary of the Treasury may prescribe regulations

that the Secretary considers necessary to carry out this section.

‘‘(2) Regulations under this subsection shall ensure that individuals required under subsection (g) to have an account at a financial

institution because of the application of subsection (f)(1)—

‘‘(A) will have access to such an account at a reasonable cost;

and

‘‘(B) are given the same consumer protections with respect to

the account as other account holders at the same financial institution.

‘‘(j) For purposes of this section—

‘‘(1) The term ‘electronic funds transfer’ means any transfer

of funds, other than a transaction originated by cash, check, or

similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the

purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes Automated Clearing House transfers, Fed Wire transfers, transfers

made at automatic teller machines, and point-of-sale terminals.

‘‘(2) The term ‘Federal agency’ means—

‘‘(A) an agency (as defined in section 101 of this title);

and

‘‘(B) a Government corporation (as defined in section 103

of title 5).

‘‘(3) The term ‘Federal payments’ includes—

‘‘(A) Federal wage, salary, and retirement payments;

‘‘(B) vendor and expense reimbursement payments; and

‘‘(C) benefit payments.
445 Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996

Such term shall not include any payment under the Internal

Revenue Code of 1986.’’

(2) AMENDMENTS RELATING TO SUBSTITUTE CHECKS.—Section

3331 of title 31, United States Code, is amended—

(A) in subsection (b), by striking ‘‘subsection (c)’’ and inserting ‘‘subsection (c) or (f)’’;

(B) by redesignating subsection (f) as subsection (g); and

(C) by inserting after subsection (e) the following new subsection:

‘‘(f) The Secretary may waive any provision of this section as may

be necessary to ensure that claimants receive timely payments.’’.

(3) PERMANENT FUNDING OF THE CHECK FORGERY INSURANCE

FUND.—Section 3343 of title 31, United States Code, is amended—

(A) in subsection (a), by amending the second sentence to

read as follows: ‘‘Necessary amounts are hereafter appropriated to the Fund out of any moneys in the Treasury not otherwise appropriated, and shall remain available until expended

to make the payments required or authorized under this section.’’;

(B) in subsection (b)—

(i) by inserting ‘‘in the determination of the Secretary

the payee or special endorse establishes that’’ after ‘‘without interest if’’;

(ii) in paragraph (2), by inserting ‘‘and’’ after the semicolon;

(iii) in paragraph (3), by striking ‘‘; and’’ and inserting

a period; and

(iv) by striking paragraph (4);

(C) in subsection (d), by inserting after the first sentence the

following new sentence: ‘‘The Secretary may use amounts in

the Fund to reimburse payment certifying or authorizing agencies for any payment that the Secretary determines would otherwise have been payable from the Fund, and may reimburse

certifying or authorizing agencies with amounts recovered because of payee nonentitlement;’’

(D) by redesignating subsection (e) as subsection (g); and

(E) by inserting after subsection (d) the following new subsections:

‘‘(e) The Secretary may waive any provision of this section as

may be necessary to ensure that claimants receive timely payments.

‘‘(f) Under such conditions as the Secretary may prescribe, the

Secretary may delegate duties and powers of the Secretary under

this section to the head of an agency. Consistent with a delegation

from the Secretary under this subsection, the head of an agency

may redelegate those duties and powers to officers or employees of

the agency.’’.

(y) Section 3325 of title 31, United States Code, is amended by

adding at the end the following new subsection:

‘‘(d) The head of an executive agency or an officer or employee

of an executive agency referred to in subsection (a)(1)(B), as applicable, shall include with each certified voucher submitted to a disbursing official pursuant to this section the taxpayer identifying
Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996 446

number of each person to whom payment may be made under the

voucher.’’.

(z)(1) IN GENERAL.—Section 3701 of title 31, United States Code,

is amended—

(A) by amending subsection (a)(1) to read as follows:

‘‘(1) ‘administrative offset’ means withholding funds payable

by the United States (including funds payable by the United

States on behalf of a State government) to, or held by the United States for, a person to satisfy a claim.’’;

(B) by amending subsection (b) to read as follows:

‘‘(b)(1) In subchapter II of this chapter and subsection (a)(8) of

this section, the term ‘claim’ or ‘debt’ means any amount of funds

or property that has been determined by an appropriate official of

the Federal Government to be owed to the United States by a person, organization, or entity other than another Federal agency. A

claim includes, without limitation—

‘‘(A) funds owed on account of loans made, insured, or guaranteed by the Government, including any deficiency or any difference between the price obtained by the Government in the

sale of a property and the amount owed to the Government on

a mortgage on the property,

‘‘(B) expenditures of nonappropriated funds,

‘‘(C) over-payments, including payments disallowed by audits

performed by the Inspector General of the agency administering the program,

‘‘(D) any amount the United States is authorized by statute

to collect for the benefit of any person,

‘‘(E) the unpaid share of any non-Federal partner in a program involving a Federal payment and a matching, or costsharing, payment by the non-Federal partner,

‘‘(F) any fines or penalties assessed by an agency; and

‘‘(G) other amounts of money or property owed to the Government.

‘‘(2) For purposes of section 3716 of this title, each of the terms

‘claim’ and ‘debt’ includes an amount of funds or property owed by

a person to a State (including any past-due support being enforced

by the State), the District of Columbia, American Samoa, Guam,

the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the Commonwealth of Puerto Rico.’’;

(C) by adding after subsection (d) the following new subsection:

‘‘(e) In section 3716 of this title—

‘‘(1) ‘creditor agency’ means any agency owed a claim that

seeks to collect that claim through administrative offset; and

‘‘(2) ‘payment certifying agency’ means any agency that has

transmitted a voucher to a disbursing official for disbursement.

‘‘(f) In section 3711 of this title, ‘private collection contractor’

means private debt collectors under contract with an agency to collect a nontax debt or claim owed the United States. The term includes private debt collectors, collection agencies, and commercial

attorneys.’’; and

(D) by amending subsection (d) to read as follows:

‘‘(d) Sections 3711(f) and 3716–3719 of this title do not apply to

a claim or debt under, or to an amount payable under—
447 Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996

‘‘(1) the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.),

‘‘(2) the Social Security Act (42 U.S.C. 301 et seq.), except to

the extent provided under section 204(f) of such Act and section 3716(c) of this title, or

‘‘(3) the tariff laws of the United States.’’.

(2) SOCIAL SECURITY.—

(A) APPLICATION OF AMENDMENTS MADE BY THIS ACT.—Subsection (f) of section 204 of the Social Security Act (42 U.S.C.

404) is amended to read as follows:

‘‘(f)(1) With respect to any delinquent amount, the Commissioner

of Social Security may use the collection practices described in sections 3711(f), 3716, 3717, and 3718 of title 31, United States Code

and in section 5514 of title 5, United States Code, as in effect immediately after the enactment of the Debt Collection Improvement

Act of 1996.’’

(B) PERMANENT APPLICATION.—Subsection (c) of section 5 of

the Social Security Domestic Reform Act of 1994 (Public Law

103–387) is amended by striking ‘‘and before’’ and all that follows and inserting a period.

(aa)(1) GUIDELINES.—The Secretary of the Treasury, in consultation with concerned Federal agencies, may establish guidelines, including information on outstanding debt, to assist agencies in the

performance and monitoring of debt collection activities.

(2) REPORT.—Not later than 3 years after the date of enactment

of this Act, the Secretary of the Treasury shall report to the Congress on collection services provided by Federal agencies or entities

collecting debt on behalf of other Federal agencies under the authorities contained in section 3711(g) of title 31, United States

Code, as added by subsection (m) of this section.

(3) AGENCY REPORTS.—Section 3719 of title 31, United States

Code, is amended—

(A) in subsection (a)—

(i) by amending the first sentence to read as follows: ‘‘In

consultation with the Comptroller General of the United

States, the Secretary of the Treasury shall prescribe regulations requiring the head of each agency with outstanding

nontax claims to prepare and submit to the Secretary at

least once each year a report summarizing the status of

loans and accounts receivable that are managed by the

head of the agency.’’; and

(ii) in paragraph (3), by striking ‘‘Director’’ and inserting

‘‘Secretary’’; and

(B) in subsection (b), by striking ‘‘Director’’ and inserting

‘‘Secretary.’’

(4) CONSOLIDATION OF REPORTS.—Notwithstanding any other

provision of law, the Secretary of the Treasury may consolidate reports concerning debt collection otherwise required to be submitted

by the Secretary into one annual report.

(bb) The Director of the Office of Management and Budget

shall—

(1) review the standards and policies of each Federal agency

for compromising, writing-down, forgiving, or discharging indebtedness arising from programs of the agency;
Sec. 3720E DEBT COLLECTION IMPROVEMENT ACT OF 1996 448

(2) determine whether those standards and policies are consistent and protect the interests of the United States;

(3) in the case of any Federal agency standard or policy that

the Director determines is not consistent or does not protect

the interests of the United States, direct the head of the agency to make appropriate modifications to the standard or policy;

and

(4) report annually to the Congress on—

(A) deficiencies in the standards and policies of Federal

agencies for compromising, writing-down, forgiving, or discharging indebtedness; and

(B) progress made in improving those standards and

policies.

(cc)(1) ELIMINATION OF MINIMUM NUMBER OF CONTRACTS.—Section 3718(b)(1)(A) of title 31, United States Code, is amended by

striking the fourth sentence.

(2) REPEAL.—Sections 3 and 5 of the Act of October 28, 1986

(popularly known as the Federal Debt Recovery Act; Public Law

99–578, 100 Stat. 3305) are hereby repealed.
449

SINGLE AUDIT ACT

AMENDMENTS OF

1996
450

Single Audit Act

Amendments of 1996

Public Law 104–156

(110 Stat. 1391)

AN ACT To streamline and improve the effectiveness of chapter 75 of title 31,

United States Code (commonly referred to as the ‘‘Single Audit Act’’).

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SECTION 1. SHORT TITLE; PURPOSES.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Single Audit

Act Amendments of 1996’’.

(b) PURPOSES.—The purposes of this Act are to—

(1) promote sound financial management, including effective internal controls, with respect to Federal awards administered by non-Federal entities;

(2) establish uniform requirements for audits of Federal

awards administered by non-Federal entities;

(3) promote the efficient and effective use of audit resources;

(4) reduce burdens on State and local governments, Indian

tribes, and nonprofit organizations; and

(5) ensure that Federal departments and agencies, to the

maximum extent practicable, rely upon and use audit work

done pursuant to chapter 75 of title 31, United States Code (as

amended by this Act).

SEC. 2. AMENDMENT TO TITLE 31, UNITED STATES CODE.

Chapter 75 of title 31, United States Code, is amended to read

as follows:

‘‘CHAPTER 75—REQUIREMENTS FOR SINGLE AUDITS

‘‘Sec.

‘‘7501. Definitions.

‘‘7502. Audit requirements; exemptions.

‘‘7503. Relation to other audit requirements.

‘‘7504. Federal agency responsibilities and relations with non-Federal entities.

‘‘7505. Regulations.

‘‘7506. Monitoring responsibilities of the Comptroller General.

‘‘7507. Effective date.

‘‘§ 7501. Definitions

‘‘(a) As used in this chapter, the term—

‘‘(1) ‘Comptroller General’ means the Comptroller General

of the United States;
451 Sec. 2 SINGLE AUDIT ACT

‘‘(2) ‘Director’ means the Director of the Office of Management and Budget;

‘‘(3) ‘Federal agency’ has the same meaning as the term

‘agency’ in section 551(1) of title 5;

‘‘(4) ‘Federal awards’ means Federal financial assistance

and Federal cost-reimbursement contracts that non-Federal entities receive directly from Federal awarding agencies or indirectly from pass-through entities;

‘‘(5) ‘Federal financial assistance’ means assistance that

non-Federal entities receive or administer in the form of

grants, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, food commodities, direct

appropriations, or other assistance, but does not include

amounts received as reimbursement for services rendered to

individuals in accordance with guidance issued by the Director;

‘‘(6) ‘Federal program’ means all Federal awards to a nonFederal entity assigned a single number in the Catalog of Federal Domestic Assistance or encompassed in a group of numbers or other category as defined by the Director;

‘‘(7) ‘generally accepted government auditing standards’

means the government auditing standards issued by the Comptroller General;

‘‘(8) ‘independent auditor’ means—

‘‘(A) an external State or local government auditor who

meets the independence standards included in generally

accepted government auditing standards; or

‘‘(B) a public accountant who meets such independence

standards;

‘‘(9) ‘Indian tribe’ means any Indian tribe, band, nation, or

other organized group or community, including any Alaskan

Native village or regional or village corporation (as defined in,

or established under, the Alaskan Native Claims Settlement

Act) that is recognized by the United States as eligible for the

special programs and services provided by the United States to

Indians because of their status as Indians;

‘‘(10) ‘internal controls’ means a process, effected by an entity’s management and other personnel, designed to provide

reasonable assurance regarding the achievement of objectives

in the following categories:

‘‘(A) Effectiveness and efficiency of operations.

‘‘(B) Reliability of financial reporting.

‘‘(C) Compliance with applicable laws and regulations;

‘‘(11) ‘local government’ means any unit of local government within a State, including a county, borough, municipality,

city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments,

any other instrumentality of local government and, in accordance with guidelines issued by the Director, a group of local

governments;

‘‘(12) ‘major program’ means a Federal program identified

in accordance with risk-based criteria prescribed by the Director under this chapter, subject to the limitations described

under subsection (b);
Sec. 2 SINGLE AUDIT ACT 452

‘‘(13) ‘non-Federal entity’ means a State, local government,

or nonprofit organization;

‘‘(14) ‘nonprofit organization’ means any corporation, trust,

association, cooperative, or other organization that—

‘‘(A) is operated primarily for scientific, educational,

service, charitable, or similar purposes in the public interest;

‘‘(B) is not organized primarily for profit; and

‘‘(C) uses net proceeds to maintain, improve, or expand

the operations of the organization;

‘‘(15) ‘pass-through entity’ means a non-Federal entity that

provides Federal awards to a subrecipient to carry out a Federal program;

‘‘(16) ‘program-specific audit’ means an audit of one Federal program;

‘‘(17) ‘recipient’ means a non-Federal entity that receives

awards directly from a Federal agency to carry out a Federal

program;

‘‘(18) ‘single audit’ means an audit, as described under section 7502(d), of a non-Federal entity that includes the entity’s

financial statements and Federal awards;

‘‘(19) ‘State’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of

the Northern Mariana Islands, and the Trust Territory of the

Pacific Islands, any instrumentality thereof, any multi-State,

regional, or interstate entity which has governmental functions, and any Indian tribe; and

‘‘(20) ‘subrecipient’ means a non-Federal entity that receives Federal awards through another non-Federal entity to

carry out a Federal program, but does not include an individual who receives financial assistance through such awards.

‘‘(b) In prescribing risk-based program selection criteria for

major programs, the Director shall not require more programs to

be identified as major for a particular non-Federal entity, except as

prescribed under subsection (c) or as provided under subsection (d),

than would be identified if the major programs were defined as any

program for which total expenditures of Federal awards by the

non-Federal entity during the applicable year exceed— ‘‘(1) the larger of $30,000,000 or 0.15 percent of the nonFederal entity’s total Federal expenditures, in the case of a

non-Federal entity for which such total expenditures for all

programs exceed $10,000,000,000; ‘‘(2) the larger of $3,000,000, or 0.30 percent of the nonFederal entity’s total Federal expenditures, in the case of a

non-Federal entity for which such total expenditures for all

programs exceed $100,000,000 but are less than or equal to

$10,000,000,000; or

‘‘(3) the larger of $300,000, or 3 percent of such total Federal expenditures for all programs, in the case of a non-Federal

entity for which such total expenditures for all programs equal

or exceed $300,000 but are less than or equal to $100,000,000.

‘‘(c) When the total expenditures of a non-Federal entity’s

major programs are less than 50 percent of the non-Federal entity’s
453 Sec. 2 SINGLE AUDIT ACT

total expenditures of all Federal awards (or such lower percentage

as specified by the Director), the auditor shall select and test additional programs as major programs as necessary to achieve audit

coverage of at least 50 percent of Federal expenditures by the nonFederal entity (or such lower percentage as specified by the Director), in accordance with guidance issued by the Director.

‘‘(d) Loan or loan guarantee programs, as specified by the Director, shall not be subject to the application of subsection (b).

‘‘§ 7502. Audit requirements; exemptions

‘‘(a)(1)(A) Each non-Federal entity that expends a total amount of Federal awards equal to or in excess of $300,000 or such other

amount specified by the Director under subsection (a)(3) in any fiscal year of such non-Federal entity shall have either a single audit

or a program-specific audit made for such fiscal year in accordance

with the requirements of this chapter.

‘‘(B) Each such non-Federal entity that expends Federal

awards under more than one Federal program shall undergo a single audit in accordance with the requirements of subsections (b)

through (i) of this section and guidance issued by the Director

under section 7505.

‘‘(C) Each such non-Federal entity that expends awards under

only one Federal program and is not subject to laws, regulations,

or Federal award agreements that require a financial statement

audit of the non-Federal entity, may elect to have a program-specific audit conducted in accordance with applicable provisions of

this section and guidance issued by the Director under section

7505.

‘‘(2)(A) Each non-Federal entity that expends a total amount of

Federal awards of less than $300,000 or such other amount specified by the Director under subsection (a)(3) in any fiscal year of

such entity, shall be exempt for such fiscal year from compliance

with—

‘‘(i) the audit requirements of this chapter; and

‘‘(ii) any applicable requirements concerning financial audits contained in Federal statutes and regulations governing

programs under which such Federal awards are provided to

that non-Federal entity.

‘‘(B) The provisions of subparagraph (A)(ii) of this paragraph

shall not exempt a non-Federal entity from compliance with any

provision of a Federal statute or regulation that requires such nonFederal entity to maintain records concerning Federal awards provided to such non-Federal entity or that permits a Federal agency,

pass-through entity, or the Comptroller General access to such

records.

‘‘(3) Every 2 years, the Director shall review the amount for requiring audits prescribed under paragraph (1)(A) and may adjust

such dollar amount consistent with the purposes of this chapter,

provided the Director does not make such adjustments below

$300,000.

‘‘(b)(1) Except as provided in paragraphs (2) and (3), audits

conducted pursuant to this chapter shall be conducted annually.

‘‘(2) A State or local government that is required by constitution or statute, in effect on January 1, 1987, to undergo its audits
Sec. 2 SINGLE AUDIT ACT 454

less frequently than annually, is permitted to undergo its audits

pursuant to this chapter biennially. Audits conducted biennially

under the provisions of this paragraph shall cover both years within the biennial period.

‘‘(3) Any nonprofit organization that had biennial audits for all

biennial periods ending between July 1, 1992, and January 1, 1995,

is permitted to undergo its audits pursuant to this chapter biennially. Audits conducted biennially under the provisions of this paragraph shall cover both years within the biennial period.

‘‘(c) Each audit conducted pursuant to subsection (a) shall be

conducted by an independent auditor in accordance with generally

accepted government auditing standards, except that, for the

purposes of this chapter, performance audits shall not be required

except as authorized by the Director.

‘‘(d) Each single audit conducted pursuant to subsection (a) for

any fiscal year shall—

‘‘(1) cover the operations of the entire non-Federal entity;

or

‘‘(2) at the option of such non-Federal entity such audit

shall include a series of audits that cover departments, agencies, and other organizational units which expended or otherwise administered Federal awards during such fiscal year provided that each such audit shall encompass the financial statements and schedule of expenditures of Federal awards for each

such department, agency, and organizational unit, which shall

be considered to be a non-Federal entity.

‘‘(e) The auditor shall—

‘‘(1) determine whether the financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles;

‘‘(2) determine whether the schedule of expenditures of

Federal awards is presented fairly in all material respects in

relation to the financial statements taken as a whole;

‘‘(3) with respect to internal controls pertaining to the compliance requirements for each major program—

‘‘(A) obtain an understanding of such internal controls;

‘‘(B) assess control risk; and

‘‘(C) perform tests of controls unless the controls are

deemed to be ineffective; and

‘‘(4) determine whether the non-Federal entity has complied with the provisions of laws, regulations, and contracts or

grants pertaining to Federal awards that have a direct and

material effect on each major program.

‘‘(f)(1) Each Federal agency which provides Federal awards to

a recipient shall—

‘‘(A) provide such recipient the program names (and any

identifying numbers) from which such awards are derived, and

the Federal requirements which govern the use of such awards

and the requirements of this chapter; and

‘‘(B) review the audit of a recipient as necessary to determine whether prompt and appropriate corrective action has

been taken with respect to audit findings, as defined by the Director, pertaining to Federal awards provided to the recipient

by the Federal agency.
455 Sec. 2 SINGLE AUDIT ACT

‘‘(2) Each pass-through entity shall—

‘‘(A) provide such subrecipient the program names (and

any identifying numbers) from which such assistance is derived, and the Federal requirements which govern the use of

such awards and the requirements of this chapter;

‘‘(B) monitor the subrecipient’s use of Federal awards

through site visits, limited scope audits, or other means;

‘‘(C) review the audit of a subrecipient as necessary to determine whether prompt and appropriate corrective action has

been taken with respect to audit findings, as defined by the Director, pertaining to Federal awards provided to the subrecipient by the pass-through entity; and

‘‘(D) require each of its subrecipients of Federal awards to

permit, as a condition of receiving Federal awards, the independent auditor of the pass-through entity to have such access

to the subrecipient’s records and financial statements as may

be necessary for the pass-through entity to comply with this

chapter.

‘‘(g)(1) The auditor shall report on the results of any audit conducted pursuant to this section, in accordance with guidance issued

by the Director.

‘‘(2) When reporting on any single audit, the auditor shall include a summary of the auditor’s results regarding the non-Federal

entity’s financial statements, internal controls, and compliance

with laws and regulations.

‘‘(h) The non-Federal entity shall transmit the reporting package, which shall include the non-Federal entity’s financial statements, schedule of expenditures of Federal awards, corrective action plan defined under subsection (i), and auditor’s reports developed pursuant to this section, to a Federal clearinghouse designated by the Director, and make it available for public inspection

within the earlier of—

‘‘(1) 30 days after receipt of the auditor’s report; or

‘‘(2)(A) for a transition period of at least 2 years after the

effective date of the Single Audit Act Amendments of 1996, as

established by the Director, 13 months after the end of the period audited; or

‘‘(B) for fiscal years beginning after the period specified in

subparagraph (A), 9 months after the end of the period audited, or within a longer timeframe authorized by the Federal

agency, determined under criteria issued under section 7504,

when the 9-month timeframe would place an undue burden on

the non-Federal entity.

‘‘(i) If an audit conducted pursuant to this section discloses any

audit findings, as defined by the Director, including material noncompliance with individual compliance requirements for a major

program by, or reportable conditions in the internal controls of, the

non-Federal entity with respect to the matters described in subsection (e), the non-Federal entity shall submit to Federal officials

designated by the Director, a plan for corrective action to eliminate

such audit findings or reportable conditions or a statement describing the reasons that corrective action is not necessary. Such plan

shall be consistent with the audit resolution standard promulgated
Sec. 2 SINGLE AUDIT ACT 456

by the Comptroller General (as part of the standards for internal

controls in the Federal Government) pursuant to section 3512(c).

‘‘(j) The Director may authorize pilot projects to test alternative

methods of achieving the purposes of this chapter. Such pilot

projects may begin only after consultation with the Chair and

Ranking Minority Member of the Committee on Governmental Affairs of the Senate and the Chair and Ranking Minority Member

of the Committee on Government Reform and Oversight of the

House of Representatives.

‘‘§ 7503. Relation to other audit requirements

‘‘(a) An audit conducted in accordance with this chapter shall

be in lieu of any financial audit of Federal awards which a nonFederal entity is required to undergo under any other Federal law

or regulation. To the extent that such audit provides a Federal

agency with the information it requires to carry out its responsibilities under Federal law or regulation, a Federal agency shall rely

upon and use that information.

‘‘(b) Notwithstanding subsection (a), a Federal agency may conduct or arrange for additional audits which are necessary to carry

out its responsibilities under Federal law or regulation. The provisions of this chapter do not authorize any non-Federal entity (or

subrecipient thereof) to constrain, in any manner, such agency from

carrying out or arranging for such additional audits, except that

the Federal agency shall plan such audits to not be duplicative of

other audits of Federal awards.

‘‘(c) The provisions of this chapter do not limit the authority of

Federal agencies to conduct, or arrange for the conduct of, audits

and evaluations of Federal awards, nor limit the authority of any

Federal agency Inspector General or other Federal official.

‘‘(d) Subsection (a) shall apply to a non-Federal entity which

undergoes an audit in accordance with this chapter even though it

is not required by section 7502(a) to have such an audit.

‘‘(e) A Federal agency that provides Federal awards and conducts or arranges for audits of non-Federal entities receiving such

awards that are in addition to the audits of non-Federal entities

conducted pursuant to this chapter shall, consistent with other applicable law, arrange for funding the full cost of such additional audits. Any such additional audits shall be coordinated with the Federal agency determined under criteria issued under section 7504 to

preclude duplication of the audits conducted pursuant to this chapter or other additional audits.

‘‘(f) Upon request by a Federal agency or the Comptroller General, any independent auditor conducting an audit pursuant to this

chapter shall make the auditor’s working papers available to the

Federal agency or the Comptroller General as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this chapter. Such access to

auditor’s working papers shall include the right to obtain copies.
457 Sec. 2 SINGLE AUDIT ACT

‘‘§ 7504. Federal agency responsibilities and relations with

non-Federal entities

‘‘(a) Each Federal agency shall, in accordance with guidance issued by the Director under section 7505, with regard to Federal

awards provided by the agency—

‘‘(1) monitor non-Federal entity use of Federal awards, and

‘‘(2) assess the quality of audits conducted under this chapter for audits of entities for which the agency is the single Federal agency determined under subsection (b).

‘‘(b) Each non-Federal entity shall have a single Federal agency, determined in accordance with criteria established by the Director, to provide the non-Federal entity with technical assistance and

assist with implementation of this chapter.

‘‘(c) The Director shall designate a Federal clearinghouse to—

‘‘(1) receive copies of all reporting packages developed in

accordance with this chapter;

‘‘(2) identify recipients that expend $300,000 or more in

Federal awards or such other amount specified by the Director

under section 7502(a)(3) during the recipient’s fiscal year but

did not undergo an audit in accordance with this chapter; and

‘‘(3) perform analyses to assist the Director in carrying out

responsibilities under this chapter.

‘‘§ 7505. Regulations

‘‘(a) The Director, after consultation with the Comptroller General, and appropriate officials from Federal, State, and local governments and nonprofit organizations shall prescribe guidance to

implement this chapter. Each Federal agency shall promulgate

such amendments to its regulations as may be necessary to conform such regulations to the requirements of this chapter and of

such guidance.

‘‘(b)(1) The guidance prescribed pursuant to subsection (a) shall

include criteria for determining the appropriate charges to Federal

awards for the cost of audits. Such criteria shall prohibit a nonFederal entity from charging to any Federal awards—

‘‘(A) the cost of any audit which is—

‘‘(i) not conducted in accordance with this chapter; or

‘‘(ii) conducted in accordance with this chapter when

expenditures of Federal awards are less than amounts

cited in section 7502(a)(1)(A) or specified by the Director

under section 7502(a)(3), except that the Director may

allow the cost of limited scope audits to monitor subrecipients in accordance with section 7502(f)(2)(B); and

‘‘(B) more than a reasonably proportionate share of the

cost of any such audit that is conducted in accordance with this

chapter.

‘‘(2) The criteria prescribed pursuant to paragraph (1) shall

not, in the absence of documentation demonstrating a higher actual

cost, permit the percentage of the cost of audits performed pursuant to this chapter charged to Federal awards, to exceed the ratio

of total Federal awards expended by such non-Federal entity during the applicable fiscal year or years, to such non-Federal entity’s

total expenditures during such fiscal year or years.
Sec. 3 SINGLE AUDIT ACT 458

‘‘(c) Such guidance shall include such provisions as may be necessary to ensure that small business concerns and business concerns owned and controlled by socially and economically disadvantaged individuals will have the opportunity to participate in the

performance of contracts awarded to fulfill the audit requirements

of this chapter.

‘‘§ 7506. Monitoring responsibilities of the Comptroller General

‘‘(a) The Comptroller General shall review provisions requiring

financial audits of non-Federal entities that receive Federal awards

that are contained in bills and resolutions reported by the committees of the Senate and the House of Representatives.

‘‘(b) If the Comptroller General determines that a bill or resolution contains provisions that are inconsistent with the requirements of this chapter, the Comptroller General shall, at the earliest practicable date, notify in writing—

‘‘(1) the committee that reported such bill or resolution;

and

‘‘(2)(A) the Committee on Governmental Affairs of the Senate (in the case of a bill or resolution reported by a committee

of the Senate); or

‘‘(B) the Committee on Government Reform and Oversight

of the House of Representatives (in the case of a bill or resolution reported by a committee of the House of Representatives).

‘‘§ 7507. Effective date

‘‘This chapter shall apply to any non-Federal entity with respect to any of its fiscal years which begin after June 30, 1996.’’.

SEC. 3. TRANSITIONAL APPLICATION.

Subject to section 7507 of title 31, United States Code (as

amended by section 2 of this Act) the provisions of chapter 75 of

such title (before amendment by section 2 of this Act) shall continue to apply to any State or local government with respect to any

of its fiscal years beginning before July 1, 1996.
459

MAJOR LAWS ON

FINANCIAL MANAGEMENT

(Original Acts)

461

15 A twelfth law, ‘‘The Inspector General Act of 1978,’’ is important, however, it is not included

in this part of the report since the pertinent sections appear in their entirety, as amended, in

appendix 3 of Title 5 (5 U.S.C. App 3) in this report.

Major Laws on Financial Management (Original Acts)

Laws enacted are often codified in multiple sections in the Code.

To provide users of this report the entire text of important laws

and to provide a historical perspective, 11 major laws 15 effecting

financial management are included herein in the original text

when enacted.

The 11 major laws in the order enacted are:

1. Budget and Accounting Act of 1921

2. Budget and Accounting Procedures Act of 1950

3. Legislative Reorganization Act of 1970 (Parts 1, 2, and

3)

4. Impoundment Control Act of 1974

5. Federal Managers’ Financial Integrity Act of 1982

6. Debt Collection Act of 1982

7. Single Audit Act of 1984

8. Chief Financial Officers Act of 1990

9. Cash Management Improvement Act Amendments of

1992

10. Government Performance and Results Act of 1993

11. Government Management Reform Act of 1994

Several of these laws have been amended by subsequent laws.

These amendments are reflected in the Code contained in this

Print. Appendix IX, ‘‘Popular Names of Selected Major Laws CrossIndexed to Sections of the United States Code and Statute or Public Law’’ contains an alphabetic listing of these 11 laws (as well as

other laws) with the related U.S.C. cite.

However, for laws numbered 5 through 11 listed above, we provide a reference if the law has been amended as of December 31,

1995.
462

Budget and Accounting Act, 1921

(Chapter 18, 42 Stat. 20)

TITLE I—DEFINITIONS

SECTION 1. This Act may be cited as the ‘‘Budget and Accounting

Act, 1921.’’

SEC 2. When used in this Act—

The terms ‘‘department and establishment’’ and ‘‘department or

establishment’’ mean any executive department, independent commission, board, bureau, office, agency, or other establishment of the

Government, including the municipal government of the District of

Columbia, but do not include the Legislative Branch of the Government or the Supreme Court of the United States;

The term ‘‘the Budget’’ means the Budget required by section 201

to be transmitted to Congress;

The term ‘‘Bureau’’ means the Bureau of the Budget;

The term ‘‘Director’’ means the Director of the Bureau of the

Budget; and

The term ‘‘Assistant Director’’ means the Assistant Director of

the Bureau of the Budget.

TITLE II—THE BUDGET

SEC. 201. The President shall transmit to Congress on the first

day of each regular session, the Budget, which shall set forth in

summary and in detail:

(a) Estimates of the expenditures and appropriations necessary

in his judgment for the support of the Government for the ensuing

fiscal year; except that the estimates for such year for the Legislative Branch of the Government and the Supreme Court of the United States shall be transmitted to the President on or before October 15th of each year, and shall be included by him in the Budget

without revision;

(b) His estimates of the receipts of the Government during the

ensuing fiscal year, under (1) laws existing at the time the Budget

is transmitted and also (2) under the revenue proposals, if any,

contained in the Budget;

(c) The expenditures and receipts of the Government during the

last completed fiscal year;

(d) Estimates of the expenditures and receipts of the Government

during the fiscal year in progress;

(e) The amount of annual, permanent, or other appropriations,

including balances of appropriations for prior fiscal years, available

for expenditure during the fiscal year in progress, as of November

1 of such year;

(f) Balanced statements of (1) the condition of the Treasury at

the end of the last completed fiscal year, (2) the estimated condi-
463 Sec. 205 BUDGET AND ACCOUNTING ACT, 1921

tion of the Treasury at the end of the fiscal year in progress, and

(3) the estimated condition of the Treasury at the end of the ensuing fiscal year if the financial proposals contained in the Budget

are adopted.

(g) All essential facts regarding the bonded and other indebtedness of the Government; and

(h) Such other financial statements and data as in his opinion

are necessary or desirable in order to make known in all practicable detail the financial condition of the Government.

SEC. 202. (a) If the estimated receipts for the ensuing fiscal year

contained in the Budget, on the basis of laws existing at the time

the Budget is transmitted, plus the estimated amounts in the

Treasury at the close of the fiscal year in progress, available for expenditure in the ensuing fiscal year, are less than the estimated

expenditures for the ensuing fiscal year contained in the Budget,

the President in the Budget shall make recommendations to Congress for new taxes, loans, or other appropriate action to meet the

estimated deficiency.

(b) If the aggregate of such estimated receipts and such estimated amounts in the Treasury is greater than such estimated expenditures for the ensuing fiscal year, he shall make such recommendations as in his opinion the public interests require.

SEC. 203. (a) The President from time to time may transmit to

Congress supplemental or deficiency estimates for such appropriations or expenditures as in his judgment (1) are necessary on account of laws enacted after the transmission of the Budget, or (2)

are otherwise in the public interest. He shall accompany such estimates with a statement of the reasons therefor, including the reasons for their omission from the Budget.

(b) Whenever such supplemental or deficiency estimates reach an

aggregate which, if they had been contained in the Budget, would

have required the President to make a recommendation under subdivision (a) of section 202, he shall thereupon make such recommendation.

SEC. 204. (a) Except as otherwise provided in this Act, the contents, order, and arrangement of the estimates of appropriations

and the statements of expenditures and estimated expenditures

contained in the Budget or transmitted under Section 203, and the

notes and other data submitted therewith, shall conform to the requirements of existing law.

(b) Estimates for lump-sum appropriations contained in the

Budget or transmitted under section 203 shall be accompanied by

statements showing, in such detail and form as may be necessary

to inform Congress, the manner of expenditure of such appropriations and of the corresponding appropriations for the fiscal year in

progress and the last completed fiscal year. Such statements shall

be in lieu of statements of like character now required by law.

SEC. 205. The President, in addition to the Budget, shall transmit to Congress on the first Monday in December, 1921, for the

service of the fiscal year ending June 30, 1923, only, an alternative

budget, which shall be prepared in such form and amounts and according to such system of classification and itemization as is, in his

opinion, most appropriate, with such explanatory notes and tables
Sec. 206 BUDGET AND ACCOUNTING ACT, 1921 464

as may be necessary to show where the various items embraced in

the Budget are contained in such alternative budget.

SEC. 206. No estimate or request for an appropriation and no request for an increase in an item of any such estimate or request,

and no recommendation as to how the revenue needs of the Government should be met, shall be submitted to Congress or any committee thereof by any officer or employee of any department or establishment, unless at the request of either House of Congress.

SEC. 207. There is hereby created in the Treasury Department a

Bureau to be known as the Bureau of the Budget. There shall be

in the Bureau a Director and an Assistant Director, who shall be

appointed by the President and receive salaries of $10,00 and

$7,500 a year, respectively. The Assistant Director shall perform

such duties as the Director may designate, and during the absence

or incapacity of the Director or during a vacancy in the office of Director he shall act as Director. The Bureau, under such rules and

regulations as the President may prescribe, shall prepare for him

the Budget, the alternative Budget, and any supplemental or deficiency estimates, and to this end shall have authority to assemble,

correlate, revise, reduce, or increase the estimates of the several

departments or establishments.

SEC. 208. (a) The Director, under such rules and regulations as

the President may prescribe, shall appoint and fix the compensation of attorneys and other employees and make expenditures for

rent in the District of Columbia, printing, binding, telegrams, telephone service, law books, books of reference, periodicals, stationery,

furniture, office equipment, other supplies, and necessary expenses

of the office, within the appropriations made therefor.

(b) No person appointed by the Director shall be paid a salary at a rate in excess of $6,000 a year, and not more than four persons

so appointed shall be paid a salary at a rate in excess of $5,000

a year.

(c) All employees in the Bureau whose compensation is at a rate

of $5,000 a year or less shall be appointed in accordance with the

civil-service laws and regulations.

(d) The provisions of law prohibiting the transfer of employees of

executive departments and independent establishments until after

service of three years shall not apply during the fiscal years ending

June 30, 1921, and June 30, 1922, to the transfer of employees to

the Bureau.

(e) The Bureau shall not be construed to be a bureau or office

created since January 1, 1916, so as to deprive employees therein

of the additional compensation allowed civilian employees under

the provisions of section 6 of the Legislative, Executive, and Judicial Appropriation Act for the fiscal years ending June 30, 1921,

and June 30, 1922, if otherwise entitled thereto.

SEC. 209. The Bureau, when directed by the President, shall

make a detailed study of the departments and establishments for

the purpose of enabling the President to determine what changes

(with a view of securing greater economy and efficiency in the conduct of the public service) should be made in (1) the existing organization, activities, and methods of business of such departments

or establishments, (2) the appropriations therefor, (3) the assignment of particular activities to particular services, or (4) the re-
465 Sec. 217 BUDGET AND ACCOUNTING ACT, 1921

grouping of services. The results of such study shall be embodied

in a report or reports to the President, who may transmit to Congress such report or reports or any part thereof with his recommendations on the matters covered thereby.

SEC. 210. The Bureau shall prepare for the President a codification of all laws or parts of laws relating to the preparation and

transmission to Congress of statements of receipts and expenditures of the Government and of estimates of appropriations. The

President shall transmit the same to Congress on or before the first

Monday in December, 1921, with a recommendation as to the

changes which, in his opinion, should be made in such laws or

parts of laws.

SEC. 211. The powers and duties relating to the compiling of estimates now conferred and imposed upon the Division of Bookkeeping and Warrants of the office of the Secretary of the Treasury

are transferred to the Bureau.

SEC. 212. The Bureau shall, at the request of any committee of

either House of Congress having jurisdiction over revenue or appropriations, furnish the committee such aid and information as it

may request.

SEC. 213. Under such regulations as the President may prescribe,

(1) every department and establishment shall furnish to the Bureau such information as the Bureau may from time to time require, and (2) the Director and the Assistant Director, or any employee of the Bureau when duly authorized, shall, for the purpose

of securing such information, have access to, and the right to examine, any books, documents, papers, or records of any such department or establishment.

SEC. 214. (a) The head of each department and establishment

shall designate an official thereof as budget officer therefor, who,

in each year under his direction and on or before a date fixed by

him, shall prepare the departmental estimates.

(b) Such budget officer shall also prepare, under the direction of

the head of the department or establishment, such supplemental

and deficiency estimates as may be required for its work.

SEC. 215. The head of each department and establishment shall

revise the departmental estimates and submit them to the Bureau

on or before September 15 of each year. In case of his failure so

to do, the President shall cause to be prepared such estimates and

data as are necessary to enable him to include in the Budget estimates and statements in respect to the work of such department

or establishment.

SEC. 216. The departmental estimates and any supplemental or

deficiency estimates submitted to the Bureau by the head of any

department or establishment shall be prepared and submitted in

such form, manner, and detail as the President may prescribe.

SEC. 217. For expenses of the establishment and maintenance of

the Bureau there is appropriated, out of any money in the Treasury

not otherwise appropriated, the sum of $225,000, to continue available during the fiscal year ending June 30, 1922.
Sec. 301 BUDGET AND ACCOUNTING ACT, 1921 466

TITLE III—GENERAL ACCOUNTING OFFICE

SEC. 301. There is created an establishment of the Government

to be known as the General Accounting Office, which shall be independent of the executive departments and under the control and direction of the Comptroller General of the United States. The offices

of Comptroller of the Treasury and Assistant Comptroller of the

Treasury are abolished, to take effect July 1, 1921. All other officers and employees of the office of the Comptroller of the Treasury

shall become officers and employees in the General Accounting Office at their grades and salaries on July 1, 1921, and all books,

records, documents, papers, furniture, office equipment and other

property of the office of the Comptroller of the Treasury shall become the property of the General Accounting Office. The Comptroller General is authorized to adopt a seal for the General Accounting Office.

SEC. 302. There shall be in the General Accounting Office a

Comptroller General of the United States and an Assistant Comptroller General of the United States, who shall be appointed by the

President with the advice and consent of the Senate, and shall receive salaries of $10,000 and $7,500 a year, respectively. The Assistant Comptroller General shall perform such duties as may be

assigned to him by the Comptroller General, and during the absence or incapacity of the Comptroller General, or during a vacancy

in that office, shall act as Comptroller General.

SEC. 303. Except as hereinafter provided in this section, the

Comptroller General and the Assistant Comptroller General shall

hold office for fifteen years. The Comptroller General shall not be

eligible for reappointment. The Comptroller General or the Assistant Comptroller General may be removed at any time by joint resolution of Congress after notice and hearing, when, in the judgment

of Congress, the Comptroller General or Assistant Comptroller

General has become permanently incapacitated or has been inefficient, or guilty of neglect of duty, or of malfeasance in office, or of

any felony or conduct involving moral turpitude, or for no other

cause and in no other manner except by impeachment. Any Comptroller General or Assistant Comptroller General removed in the

manner herein provided shall be ineligible for reappointment to

that office. When a Comptroller General or Assistant Comptroller

General attains the age of seventy years, he shall be retired from

his office.

SEC. 304. All powers and duties now conferred or imposed by law

upon the Comptroller of the Treasury or the six auditors of the

Treasury Department, and the duties of the Division of Bookkeeping and Warrants of the Office of the Secretary of the Treasury relating to keeping the personal ledger accounts of disbursing

and collecting officers, shall, so far as not inconsistent with this

Act, be vested in and imposed upon the General Accounting Office

and be exercised without direction from any other officer. The balances certified by the Comptroller General shall be final and conclusive upon the executive branch of the Government. The revision

by the Comptroller General of settlements made by the six auditors

shall be discontinued, except as to settlements made before July 1,

1921.
467 Sec. 309 BUDGET AND ACCOUNTING ACT, 1921

The administrative examination of the accounts and vouchers of

the Postal Service now imposed by law upon the Auditor for the

Post Office Department shall be performed on and after July 1,

1921, by a bureau in the Post Office Department to be known as

the Bureau of Accounts, which is hereby established for that purpose. The Bureau of Accounts shall be under the direction of a

Comptroller, who shall be appointed by the President with the advice and consent of the Senate, and shall receive a salary of $5,000

a year. The Comptroller shall perform the administrative duties

now performed by the Auditor for the Post Office Department and

such other duties in relation thereto as the Postmaster General

may direct. The appropriation of $5,000 for the salary of the Auditor for the Post Office Department for the fiscal year 1922 is transferred and made available for the salary of the Comptroller, Bureau of Accounts, Post Office Department. The officers and employees of the Office of the Auditor for the Post Office Department engaged in the administrative examination of accounts shall become

officers and employees of the Bureau of Accounts at their grades

and salaries on July 1, 1921. The appropriations for salaries and

for contingent and miscellaneous expenses and tabulating equipment for such office for the fiscal year 1922, and all books, records,

documents, papers, furniture, office equipment, and other property

shall be apportioned between, transferred to, and made available

for the Bureau of Accounts and the General Accounting Office, respectively, on the basis of duties transferred.

SEC. 305. Section 236 of the Revised Statutes is amended to read

as follows:

‘‘SEC. 236. All claims and demands whatever by the Government

of the United States or against it, and all accounts whatever in

which the Government of the United States is concerned, either as

debtor or creditor, shall be settled and adjusted in the General Accounting Office.’’

SEC. 306. All laws relating generally to the administration of the

departments and establishments shall, so far as applicable, govern

the General Accounting Office. Copies of any books, records, papers, or documents, and transcripts from the books and proceedings

of the General Accounting Office, when certified by the Comptroller

General or the Assistant Comptroller General under its seal, shall

be admitted as evidence with the same effect as the copies and

transcripts referred to in sections 882 and 886 of the Revised Statutes.

SEC. 307. The Comptroller General may provide for the payment

of accounts or claims adjusted and settled in the General Accounting Office, through disbursing officers of the several departments

and establishments, instead of by warrant.

SEC. 308. The duties now appertaining to the Division of Public

Moneys of the Office of the Secretary of the Treasury, so far as

they relate to the covering of revenues and repayments into the

Treasury, the issue of duplicate checks and warrants, and the certification of outstanding liabilities for payment, shall be performed

by the Division of Bookkeeping and Warrants of the Office of the

Secretary of the Treasury.

SEC. 309. The Comptroller General shall prescribe the forms, systems, and procedure for administrative appropriation and fund ac-
Sec. 310 BUDGET AND ACCOUNTING ACT, 1921 468

counting in the several departments and establishments, and for

the administrative examination of fiscal officers’ accounts and

claims against the United States.

SEC. 310. The offices of the six auditors shall be abolished, to

take effect July 1, 1921. All other officers and employees of these

offices except as otherwise provided herein shall become officers

and employees of the General Accounting Office at their grades and

salaries on July 1, 1921. All books, records, documents, papers, furniture, office equipment, and other property of these offices, and of

the Division of Bookkeeping and Warrants, so far as they relate to

the work of such division transferred by section 304, shall become

the property of the General Accounting Office. The General Accounting Office shall occupy temporarily the rooms now occupied by

the office of the Comptroller of the Treasury and the six auditors.

SEC. 311. (a) The Comptroller General shall appoint, remove, and

fix the compensation of such attorneys and other employees in the

General Accounting Office as may from time to time be provided

for by law.

(b) All such appointments, except to positions carrying a salary

at a rate of more than $5,000 a year, shall be made in accordance

with the civil-service laws and regulations.

(c) No person appointed by the Comptroller General shall be paid

a salary at a rate of more than $6,000 a year, and not more than

four persons shall be paid a salary at a rate of more than $5,000

a year.

(d) All officers and employees of the General Accounting Office,

whether transferred thereto or appointed by the Comptroller General, shall perform such duties as may be assigned to them by him.

(e) All official acts performed by such officers or employees specially designated therefor by the Comptroller General shall have

the same force and effect as though performed by the Comptroller

General in person.

(f) The Comptroller General shall make such rules and regulations as may be necessary for carrying on the work of the General

Accounting Office, including rules and regulations concerning the

admission of attorneys to practice before such office.

SEC. 312. (a) The Comptroller General shall investigate, at the

seat of government or elsewhere, all matters relating to the receipt,

disbursement, and application of public funds, and shall make to

the President when requested by him, and to Congress at the beginning of each regular session, a report in writing of the work of

the General Accounting Office, containing recommendations concerning the legislation he may deem necessary to facilitate the

prompt and accurate rendition and settlement of accounts and concerning such other matters relating to the receipt, disbursement,

and application of public funds as he may think advisable. In such

regular report, or in special reports at any time when Congress is

in session, he shall make recommendations looking to greater economy or efficiency in public expenditures.

(b) He shall make such investigations and reports as shall be ordered by either House of Congress or by any committee of either

House having jurisdiction over revenue, appropriations, or expenditures. The Comptroller General shall also, at the request of any
469 Sec. 315 BUDGET AND ACCOUNTING ACT, 1921

such committee, direct assistants from his office to furnish the committee such aid and information as it may request.

(c) The Comptroller General shall specially report to Congress

every expenditure or contract made by any department or establishment in any year in violation of law.

(d) He shall submit to Congress reports upon the adequacy and

effectiveness of the administrative examination of accounts and

claims in the respective departments and establishments and upon

the adequacy and effectiveness of departmental inspection of the offices and accounts of fiscal officers.

(e) He shall furnish such information relating to expenditures

and accounting to the Bureau of the Budget as it may request from

time to time.

SEC. 313. All departments and establishments shall furnish to

the Comptroller General such information regarding the powers,

duties, activities, organization, financial transactions, and methods

of business of their respective offices as he may from time to time

require of them; and the Comptroller General, or any of his assistants or employees, when duly authorized by him, shall, for the purpose of securing such information, have access to and the right to

examine any books, documents, papers, or records of any such department or establishment. The authority contained in this section

shall not be applicable to expenditures made under the provisions

of section 291 of the Revised Statutes.

SEC. 314. The Civil Service Commission shall establish an eligible register for accountants for the General Accounting Office, and

the examinations of applicants for entrance upon such register

shall be based upon questions approved by the Comptroller General.

SEC. 315. (a) All appropriations for the fiscal year ending June

30, 1922, for the offices of the Comptroller of the Treasury and the

six auditors, are transferred to and made available for the General

Accounting Office, except as otherwise provided herein.

(b) During such fiscal year the Comptroller General, within the

limit of the total appropriations available for the General Accounting Office, may make such changes in the number and compensation of officers and employees appointed by him or transferred to

the General Accounting Office under this Act as may be necessary.

(c) There shall also be transferred to the General Accounting Office such portions of the appropriations for rent and contingent and

miscellaneous expenses, including allotments for printing and binding, made for the Treasury Department for the fiscal year ending

June 30, 1922, as are equal to the amounts expended from similar

appropriations during the fiscal year ending June 30, 1921, by the

Treasury Department for the offices of the Comptroller of the

Treasury and the six auditors.

(d) During the fiscal year ending June 30, 1922, the appropriations and portions of appropriations referred to in this section shall

be available for salaries and expenses of the General Accounting

Office, including payment for rent in the District of Columbia, traveling expenses, the purchase and exchange of law books, books of

reference, and for all necessary miscellaneous and contingent expenses.
Sec. 316 BUDGET AND ACCOUNTING ACT, 1921 470

SEC. 316. The General Accounting Office and the Bureau of Accounts shall not be construed to be a bureau or office created since

January 1, 1916, so as to deprive employees therein of the additional compensation allowed civilian employees under the provisions of section 6 of the Legislative, Executive, and Judicial Appropriation Act for the fiscal year ending June 30, 1922, if otherwise

entitled thereto.

SEC. 317. The provisions of law prohibiting the transfer of employees of executive departments and independent establishments

until after service of three years shall not apply during the fiscal

year ending June 30, 1922, to the transfer of employees to the General Accounting Office.

SEC. 318. This Act shall take effect upon its approval by the

President: Provided, That sections 301 to 317, inclusive, relating to

the General Accounting Office and the Bureau of Accounts, shall

take effect July 1, 1921.

Approved, June 10, 1921.
471

The Budget and Accounting Procedures Act of 1950

(Chapter 946, 64 Stat. 832)

AN ACT To authorize the President to determine the form of the national budget

and of departmental estimates, to modernize and simplify governmental accounting and auditing methods and procedures, and for other purposes.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled, That this Act may

be cited as the ‘‘Budget and Accounting Procedures Act of 1950’’.

TITLE I—BUDGETING AND ACCOUNTING

PART I—BUDGETING

SEC. 101. Section 2 of the Budget and Accounting Procedures

Act, 1921 (42 Stat. 20), is amended by adding at the end thereof

the following:

‘‘The term ‘appropriations’ includes, in appropriate context, funds

and authorizations to create obligations by contract in advance of

appropriations, or any other authority making funds available for

obligation or expenditure.’’

SEC. 102 (a) Section 201 of such Act is amended to read as follows:

‘‘SEC. 201. The President shall transmit to Congress during his

first fifteen days of each regular session, the Budget, which shall

set forth Budget messages, summary data and text, and supporting

detail. The Budget shall set forth in such form and detail as the

President may determine—-

‘‘(a) functions and activities of the Government;

‘‘(b) any other desirable classification of data;

‘‘(c) a reconciliation of the summary data on expenditures

with proposed appropriations;

‘‘(d) estimated expenditures and proposed appropriations necessary in his judgement for the support of the Government for

the ensuing fiscal year, except that estimated expenditures and

proposed appropriations for such year for the legislative branch

of the Government and the Supreme Court of the United Stated shall be transmitted to the President on or before October

15 of each year and shall be included by him in the Budget

without revision;

‘‘(e) estimated receipts of the Government during the ensuing

fiscal year, under (1) laws existing at the time the Budget is

transmitted and also (2) under the revenue proposals, if any,

contained in the Budget;

‘‘(f) actual appropriations, expenditures, and receipts of the

Government during the last completed fiscal year;

‘‘(g) estimated expenditures and receipts, and actual or proposed appropriations of the Government during the fiscal year

in progress;
Sec. 203 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 472

‘‘(h) balanced statements of (1) the condition of the Treasury

at the end of the last completed fiscal year, (2) the estimated

condition of the Treasury at the end of the fiscal year in

progress, and (3) the estimated condition of the Treasury at the

end of the ensuing fiscal year if the financial proposals contained in the Budget are adopted;

‘‘(i) all essential facts regarding the bonded and other indebtedness of the Government; and

‘‘(j) such other financial statements and data as is in his

opinion are necessary or desirable in order to make known in

all practicable detail the financial condition of the Government.’’

(b) Section 203 of such Act is amended to read as follows:

‘‘SEC. 203. (a) The President from time to time may transmit to

Congress such proposed supplemental or deficiency appropriations

as in his judgement (1) are necessary on account of laws enacted

after the transmission of the Budget, or (2) are other wise in the

public interest. He shall accompany such proposals with a statement of the reasons therefor, including the reasons for their omission from the Budget.

‘‘(b) Whenever such proposed supplemental or deficiency appropriations reach an aggregate, which if they had been contained in

the Budget, would have required the President to make a recommendation under subsection (a) of section 202, he shall thereupon make such recommendation.’’

(c) Section 204 of such Act is amended to read as follows:

‘‘SEC. 204. (a) Except as other wise provided in this Act, the contents, order, and arrangement of then proposed appropriations and

the statement of expenditures and estimated expenditures contained in the Budget or transmitted under section 203, and notes

and other data submitted therewith, shall conform to requirements

prescribed by the President.

‘‘(b) The Budget, and statements furnished with any proposed

supplemental or deficiency appropriations, shall be accompanied by

information as to personal services and other objects of expenditure

in the same manner and form as in the Budget for the fiscal year

1950: Provided, That this requirement may be waived, or modified,

either generally or in specific cases, by joint action of the committees of Congress having jurisdiction over appropriation: And provided further, That nothing in this Act shall be construed to limit

the authority of committees of Congress to request and receive such

information in such form as they may desire in consideration of

and action upon budget estimates.’’

(d) Section 205 of Such Act is amended to read as follows:

‘‘Sec. 205. Whenever any basic change is made in the form of the

Budget, the President, in addition top the Budget, shall transmit

Congress such explanatory notes and tables as may be necessary

to show where the various items embraced in the budget of the

prior year are contained in the new Budget.’’

(e) The last sentence of section 207 of such Act is amended to

read as follows: ‘‘The Bureau, under such rules and regulations as

the President may prescribe, shall prepare the Budget, and any

proposed supplemental or deficiency appropriations, and to this end

shall have authority to assemble, correlate, revise, reduce, or in-
473 Sec. 110 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

crease the requests for appropriations of the several departments

or establishments.’’

(f) Section 214 of such Act is amended to read as follows:

‘‘SEC. 214. The head of each department and establishment shall

prepare or cause to be prepared in each year his requests for regular, supplemental, or deficiency appropriations.’’

(g) Section 215 of such Act is amended to read as follows:

‘‘SEC. 215. The head of each department and establishment shall

submit his requests for appropriations to the Bureau on or before

a date which the President shall determine. In case of his failure

to do so, the President shall cause such requests to be prepared as

are necessary to enable him to include such requests with the

Budget in respect to the work of such department or establishment.’’

(h) Section 216 of such Act is amended to read as follow:

‘‘SEC. 216. Requests for regular, supplemental, or deficiency appropriations which are submitted to the Bureau by the head of any

department or establishment shall be prepared and submitted as

the President may determine in accordance with the provisions of

section 201.’’

GOVERNMENT STATISTICAL ACTIVITIES

SEC. 103. The President, through the Director of the Bureau of

the Budget, is authorized and directed to develop programs and to

issue regulations and orders for the improved gathering, compiling,

analyzing, publishing, and disseminating of statistical information

for any purpose by the various agencies in the executive branch of

the Government. Such regulations and orders shall be adhered to

by such agencies.

IMPROVED ADMINISTRATION OF EXECUTIVE AGENCIES

SEC. 104. The President, through the Director of the Bureau of

the Budget, is authorized and directed to evaluate and develop improved plans for the organization, coordination, and management of

the executive branch of the Government with a view to efficient

and economical service.

BUSINESS-TYPE BUDGETS

SEC. 105. The first two sentences of section 102 of the Government Corporation Control Act of 1945 (59 Stat. 597), are amended

to read as follows: ‘‘Each wholly owned Government corporation

shall cause to be prepared annually a business-type budget which

shall be submitted to the Bureau of the Budget, under such rules

and regulations as the President may establish as to the date of

submission, the form and content, the classifications of data, and

the manner in which such budget program shall be prepared and

presented.’’

PART II—-ACCOUNTING AND AUDITING

SHORT TITLE

SEC. 110. This part may be cited as the ‘‘Accounting and Auditing Act of 1950.’’
Sec. 111 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 474

DECLARATION OF POLICY

SEC. 111. It is the policy of the Congress in enacting this part

that—

(a) The accounting of the Government provide full disclosure of

the results of financial operations, adequate financial information

needed in the management of operations and the formulation and

execution of the Budget, and effective control over income, expenditures, funds, property, and other assets.

(b) Full consideration be given to the needs and responsibilities

of both the legislative and executive branches in the establishment

of accounting and reporting systems and requirements.

(c) The maintenance of accounting systems and the producing of

financial reports with respect to the operations of executive agencies, including central facilities for bringing together and disclosing

information on the results of the financial operations of the Government as a whole, be the responsibility of the executive branch.

(d) The auditing for the Government, conducted by the Comptroller General of the United States as an agent of the Congress be directed at determining the extent to which accounting and related

financial reporting fulfill the purposes specified, financial transactions have been consummated in accordance with laws, regulations or other legal requirements, and adequate internal financial

control over operations is exercised, and afford an effective basis for

the settlement of accounts of accountable officers.

(e) Emphasis be placed on effecting orderly improvements resulting in simplified and more effective accounting, financial reporting,

budgeting, and auditing requirements and procedures and on the

elimination of those which involve duplication or which do not

serve a purpose commensurate with the costs involved.

(f) The Comptroller General of the United States, the Secretary

of the Treasury, and the Director of the Bureau of the Budget conduct a continuous program for the improvement of accounting and

financial reporting in the Government.

ACCOUNTING AND REPORTING PROVISIONS

SEC. 112. (a) the Comptroller General of the United States, after

consulting the Secretary of the Treasury and the Director of the

Bureau of the Budget concerning their accounting, financial reporting, and budgetary needs, and considering the needs of the other

executive agencies, shall prescribe the principles, standards, and

related requirements for accounting to be observed by each executive agency, including requirements for suitable integration between the accounting processes of each executive agency and the

accounting of the Treasury Department. Requirements prescribed

by the Comptroller General shall be designed to permit the executive agencies to carry out their responsibilities under section 113

of this part, while providing a basis for integrated accounting for

the Government, full disclosure of the results of the financial operations of each executive agency and the Government as a whole,

and financial information and control necessary to enable the Congress and the president to discharge their respective responsibilities. The Comptroller General shall continue to exercise the authority vested in him by section 205(b) of the Federal Property and
475 Sec. 114 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

Administrative Services Act of 1949 (63 Stat. 389) and, to the extent he deems necessary, the authority vested in him by section

309 of the Budget and Accounting Act, 1921 (42 Stat. 25). Any such

exercise of authority shall be consistent with the provisions of this

section.

(b) The General Accounting Office shall cooperate with the executive agencies in the development of their accounting systems, including the Treasury Department, in the development and establishment of the system of central accounting and reporting required

by section 114 of this part. Such accounting systems shall be approved by the Comptroller General when deemed by him to be adequate and in conformity with the principles, standards, and related

requirements prescribed by him.

(c) The General Accounting Office shall from time to time review

the accounting systems of the executive agencies. The results of

such reviews shall be available to the heads of the executive agencies concerned, to the Secretary of the Treasury, and the Director

of the Bureau of the Budget, and the Comptroller General shall

make such reports thereon to the Congress as he deems proper.

SEC. 113. (a) The head of each executive agency shall establish

and maintain systems of accounting and internal control designed

to provide—

(1) full disclosure of the financial results of the agency’s activities;

(2) adequate financial information needed for the agency’s

management purposes;

(3) effective control over and accountability for all funds,

property, and other assets for which the agency is responsible,

including appropriate internal audit;

(4) reliable accounting results to serve as the basis for preparation and support of the agency’s budget requests, for controlling the execution of its budget, and for providing financial information required by the Bureau of the Budget under section

213 of the Budget and Accounting Act, 1921 (42 Stat. 23);

(5) suitable integration of the accounting of the agency with

the accounting of the Treasury Department in connection with

the central accounting and reporting responsibilities imposed

on the Secretary of the Treasury by section 114 of this part.

(b) The accounting systems of executive agencies shall conform to

the principles, standards, and related requirements prescribed by

the Comptroller General pursuant to section 112(a) of this part.

SEC. 114. (a) The Secretary of the Treasury shall prepare such

reports for the information of the President, the Congress, and the

public as will present the results of the financial operations of the

Government: Provided, That there shall be included such financial

data as the director of the Bureau of the Budget may require in

connection with the preparation of the Budget or for other purposes

of the Bureau. Each executive agency shall furnish the Secretary

of the Treasury such reports and information relating to its financial condition and operations as the Secretary, by rules and regulations, may require for the effective performance of his responsibilities under this section.

(b) The Secretary of the Treasury is authorized to establish the

facilities necessary to produce the financial reports requires by sub-
Sec. 115 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 476

section (a) of this section. The Secretary is further authorized to reorganize the accounting functions and install, revise, or eliminate

accounting procedures and financial reports of the Treasury Department in order to develop effective and coordinated systems of

accounting and financial reporting in the several bureaus and offices of the Department with such concentration of accounting and

reporting as is necessary to accomplish integration of accounting

results for the activities of the Department and provide the operating center for the consolidation of accounting results of other executive agencies with those of the Department. The authority vested

in and the duties imposed upon the Department by sections 10, 15,

and 22 of the Act entitled ‘‘An act making appropriations for the

legislative, executive, and judicial branches of the Government for

the fiscal year ending June thirtieth, eighteen hundred ninety-five,

and for other purposes’’, approved July 31, 1894 (28 Stat.162, 208–

210), may be exercised and performed by the Secretary of the

Treasury as part of his broader authority and duties under this

section and in such a manner as to provide a unified system of

central accounting and reporting on the most efficient and useful

basis.

(c) The system of central accounting and reporting provided for

herein shall be consistent with the principles, standards, and related requirements prescribed by the Comptroller General pursuant to

section 112 of this part.

SEC. 115. (a) when the Secretary of the Treasury and the Comptroller General determine that existing procedures can be modified

in interest of simplification, improvement, or economy, with sufficient safeguards over the control and accounting for the public

funds, they may issue joint regulations providing for the waiving,

in whole or in part, of the requirements of existing law that—

(1) warrants be issued and countersigned in connection with

the receipt, retention, and disbursement of public moneys and

trust funds; and

(2) funds be requisitioned, and advanced to accountable officers under such separate appropriation head or otherwise.

(b) Such regulations may further provide for the payment of

vouchers by authorized disbursing officers by means of checks issued against the general account of the Treasurer of the United

States: Provided, That in such case the regulations shall provide

for appropriate action in the event of delinquency by disbursing in

the rendition of their accounts of for, other reasons arising out of

the condition of the officers’ accounts, including under necessary

circumstances, the suspension or withdrawal of authority to disburse.

SEC. 116. The Comptroller General is authorized to discontinue

the maintenance in the General Accounting Office of appropriation,

expenditure, limitation, receipt, and personal accounts when in his

opinion the accounting systems and internal control of the executive, legislative, and judicial agencies are sufficient to enable him

to perform properly the functions to which such accounts relate.

AUDITING PROVISIONS

SEC. 117. (a) Except as otherwise specifically provided by law,

the financial transactions of each executive, legislative, and judicial
477 Sec. 201 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

agency, including but not limited to the accounts of accountable officers, shall be audited by the General Accounting Office in accordance with such principles and procedures and under such rules and

regulations as may be prescribed by the Comptroller General of the

United States. In the determination of auditing procedures to be

followed and the extent of examination of vouchers and other documents, the Comptroller General shall give due regard to generally

accepted principles of auditing, including consideration of the effectiveness of accounting organizations and systems, internal audit

and control, and related administrative practices of the respective

agencies.

(b) whenever the Comptroller General determines that he audit

shall be conducted at the place or places where the accounts and

other records of an executive agency are normally kept, he may require any executive agency to retain in whole or in part accounts

of accountable officers, contracts, vouchers, and other documents,

which are required under existing law to be submitted to the General Accounting Office, under such conditions and for such period

not exceeding ten years as he may specify, unless a longer period

is agreed upon with the executive agency: Provided, That under

agreements between the Comptroller General and legislative and

judicial agencies the provisions of this sentence may be extended

to the accounts and records of such agencies.

GENERAL PROVISIONS

SEC. 118. As used in this part, the term ‘‘executive agency’’

means any executive department or independent establishment in

the executive branch of the Government but

(a) except for the purposes of sections 114, 116, and 119 shall not

include any Government corporation or agency subject to the Government Corporation Control Act (59 Stat. 597), and

(b) except for the purposes of sections 111, 114, and 116 shall not

include the Post Office Department.

SEC. 119. The head of each executive agency is authorized to designate then place or places, at the seat of government or elsewhere,

at which the administrative examination of fiscal officers’ accounts

will be performed, and with the concurrence of the Comptroller

General to waive the administrative examination in whole or in

part: Provided, That the same authority is hereby conferred upon

the officers responsible for the administrative examination of accounts for legislative and judicial agencies.

TITLE II—APPROPRIATIONS

AUTHORIZATION FOR APPROPRIATIONS

SEC. 201. No requests for legislation, which, if enacted would authorize subsequent appropriations for a department or establishment the executive branch of the Government, shall be transmitted

to the Bureau of the Budget, to the President, or to the Congress

by such department or establishment, or by any organization unit

thereof, without the prior approval of the head of such department

or establishment.
Sec. 202 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 478

ADJUSTMENT OF APPROPRIATION FOR REORGANIZATION

SEC. 202. (a) When under authority of law a function or an activity is transferred or assigned from one agency within any department or establishment to another agency in the same department

or establishment, the balance of appropriations which are determined by the head of such department or establishment to be available, and necessary to finance or discharge the function or activity

so transferred or assigned may, with the approval of the President,

be transferred to, and be available for use by, the agency to which

said function or activity is transferred or assigned for any purpose

for which said funds were originally available. Balances so transferred shall be credited to any applicable existing appropriation account or accounts, or to any new appropriation account or accounts,

which are hereby authorized to be established, and shall be merged

with funds in the applicable existing or newly established appropriation account or accounts and thereafter accounted for as one

fund.

(b) When under authority of law a function or activity is transferred or assigned from one department or establishment to another department or establishment, the balance of appropriations

which are determined by the President to be available and necessary to finance or discharge the function or activity so transferred or assigned, shall be transferred to and be available for use

by the department or establishment to which said function or activity is transferred or assigned for any purpose for which said funds

were originally available. Balances so transferred shall be credited

to any applicable existing appropriation account or accounts, or to

any new appropriation account or accounts, which are hereby authorized to be established, and shall be merged with funds in the

applicable existing or newly established appropriation account or

accounts and thereafter accounted for as one fund.

TITLE III—REPEALS AND SAVINGS PROVISIONS

REPEALS

SEC. 301. The following Acts and parts of Acts are hereby repealed:

(1) Section 10 of the Act of August 1, 1914 (38 Stat. 680;

U.S.C., title 31, sec. 582).

(2) So much of section 4 of the Act of June 20, 1874 (18 Stat.

109); U.S.C., title 31 sec. 583 (1)), as reads: ‘‘; and hereafter the

Secretary of the Treasury shall annually submit to Congress

detailed estimates of appropriations required for said expenses;’’.

(3) The last proviso in the first paragraph under the heading

‘‘Judgements; United States Courts’’ of the Act of April 27,

1904 (33 Stat. 422; U.S.C., title 31, sec 583 (2)).

(4) The last sentence of section 5 of the Act of August 5, 1882

(22 Stat. 256; U.S.C., title 31, sec. 583(3)).

(5) So much of the matter appearing under the heading

‘‘Mints and Assay Offices’’ of the Act of March 4, 1911 (36 Stat.

1292; U.S.C., title 31, sec. 583 (4)), as reads: ‘‘, and the Secretary of the Treasury shall, for the fiscal year nineteen hun-
479 Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

dred and thirteen, and annually thereafter, submit to Congress

in the regular book of estimates, detailed estimates for the expenses of this Service’’.

(6) So much of the matter appearing under the heading

‘‘Treasury Department’’ in the Act of August 26, 1912 (37 Stat.

596; U.S.C., title 31, sec. 583 (5)), as reads: ‘‘Provided further,

That estimates hereunder shall be submitted in detail for the

fiscal year 1914, and annually thereafter’’.

(7) The last sentence of the paragraph under the heading

‘‘Federal Farm Loan Board’’ of the Act of September 8, 1916

(U.S.C., title 31 sec. 583 (7)), appearing on page 803 of volume

39 of the Statutes at Large; and the third and last paragraph

under the heading ‘‘Federal Farm Loan Bureau’’ of the Act of

March 3, 1917 (U.S.C. title 31, sec. 583 (7)), appearing on page

1084 of volume 39 of the Statutes at Large.

(8) The last sentence on page 48 of volume 30 of the Statutes

at Large, in the Act of June 4, 1897 (U.S.C., title 31, sec. 583

(8)).

(9) The first sentence of section 6 of the Act of March 3, 1919

(40 Stat. 1309; U.S.C., title 31, sec. 583 (10)).

(10) The last proviso under the heading ‘‘Office of the Chief

Signal Officer’’ of the Act of March 2, 1907 (34 Stat. 11539;

U.S.C. title 31, sec. 583 (11)).

(11) The sixth full paragraph appearing on page 648 of volume 29 of the Statutes at Large in the Act of March 3, 1897

(U.S.C., title 31, sec. 583 (13)).

(12) So much of the matter following the heading ‘‘Bureau of

Mines’’ in the Act of March 3, 1915 (38 Stat. 858; U.S.C., title

31, sec. 583 (14)) as reads: ‘‘, estimates shall be submitted specifically for all personal services required permanently and entirely in the Bureau of Mines at Washington, District of Columbia, and previously paid from lump-sum or general appropriations;’’.

(13) The proviso at the end of the fourth paragraph on page

312 of volume 37 of the Statutes at Large, in the Act of August

17, 1912 (U.S.C., title, sec. 583 (15)).

(14) The third paragraph appearing on page 1082 of volume

32 of the Statutes at Large, in the Act of March 3, 1903

(U.S.C., title 31, sec. 583 (16)).

(15) So much of section 12 of the Act of June 26, 1906 (34

Stat. 480; U.S.C., title 31, sec. 583 (18)), as reads: ‘‘and he

shall annually submit to Congress estimates to cover the cost

of the establishment and maintenance of fish hatcheries in

Alaska, the salaries and actual traveling expenses of such officials, and for such other expenditure as may be necessary to

carry out the provisions of this Act’’.

(16) The proviso at the end of the first full paragraph on

page 456 of volume 32 of the Statutes at Large, in the Act of

June 28, 1902 (U.S.C., title 31, sec. 583 (20)).

(17) The second full paragraph on page 841 of volume 38 of

the Statutes at Large, in the Act of March 3, 1915 (U.S.C., title

31, sec. 583 (21)).
Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 480

(18) The fourth full paragraph on page 2 of volume 38 of the

Statutes at Large, in the Act of May 1, 1913 (U.S.C., title 31,

sec. 583 (22)).

(19) The proviso at the end of the second paragraph under

the heading ‘‘Bureau of Immigration and Naturalization’’ of the

Act of March 4, 1907 (34 Stat. 1329, 1330; U.S.C., title 31, sec.

583 (23)).

(20) The second full paragraph on page 374 of volume 35 of

the Statutes at Large, in the Act of May 27, 1908 (U.S.C., title

31 sec. 583 (25)).

(21) So much of the last paragraph on page 396 of volume

37 of the Statutes at Large, in the Act of August 23, 1912

(U.S.C., title 31, sec. 583 (26)), as reads: ‘‘For the fiscal year

nineteen hundred and fourteen and annually thereafter estimates in detail shall be submitted for all personal services required in the Indian Office,’’.

(22) The proviso at the end of the first full paragraph on

page 646 of volume 41 of the Statutes at Large, in the Act of

May 29, 1920 (U.S.C., title 31, sec. 584).

(23) Section 3660 of the Revised Statutes (U.S.C., title 31,

sec. 585).

(24) Section 4 of the Act of June 22, 1906 (34 Stat. 448;

U.S.C., title 31, sec. 586).

(25) Section 4 of the Act of March 4, 1909 (35 Stat. 907;

U.S.C., title 31, sec. 587).

(26) Section 2 of the Act of June 30, 1906 (34 Stat. 762;

U.S.C., title 31, sec. 588); and the proviso in the first paragraph on page 1367 of volume 34 of the Statutes at Large, in

the Act of March 4, 1907 (U.S.C., title 31, sec. 588).

(27) Section 3661, as amended, of the Revised Statutes

(U.S.C., title 31, sec. 589).

(28) So much of the first paragraph on page 255 of volume

24 of the Statutes at Large, in the Act of August 4, 1886

(U.S.C., title 31, sec. 590), as reads: ‘‘: Provided further, That

all printing and engraving for the Geological Survey, the Coast

and Geodetic Survey, the Hydrographic Office of the Navy Department, and the Signal Service shall hereafter be estimated

for separately and in detail, and appropriated for separately for

each of said bureaus’’.

(29) Section 3662 of the Revised Statutes (U.S.C., title 31,

sec. 591).

(30) Section 3663 of the Revised Statutes, as amended

(U.S.C. title 31, sec. 594).

(31) Section 3664 of the Revised Statutes (U.S.C. title 31,

sec. 597).

(32) Section 3665 of the Revised Statutes (U.S.C. title 31,

sec. 598).

(33) The second paragraph under the heading ‘‘Revenue-Cutter Service’’ in the Act of March 2, 1889 (25 Stat. 907; U.S.C.,

title 31, sec. 600).

(34) So much of the second full paragraph on page 512 of volume 24 of the Statutes at Large, in the Act of March 3, 1887

(U.S.C., title 31, sec. 601), as reads: ‘‘That the Secretary of the

Treasury shall for the fiscal year eighteen hundred and eighty-
481 Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

seven, and for each fiscal year thereafter in the annual estimates, report to Congress the number of persons employed outside the District of Columbia, as superintendents, clerks,

watchmen and other wise, and paid from appropriations for the

construction of public buildings showing where said persons

are employed, in what capacity, the length of time and at what

rate of compensation.’’.

(35) So much of the sixth full paragraph on page 374 of volume 26 of the Statutes at Large, in the Act of August 30, 1980

(U.S.C. title 31, sec. 601) as reads: ‘‘; and hereafter the Secretary of the Treasury shall annually report to Congress in the

book of estimates a statement of the expenditure of the appropriation for ‘repairs and preservation of public buildings’ which

shall show the amount expended on each public building and

the number of persons employed and paid salaries from such

appropriation’’.

(36) So much of section 1317 of the Revenue Act of 1921 (42

Stat. 314; U.S.C., title 31, sec. 602) as reads: ‘‘; and the Secretary of the Treasury shall submit for the fiscal year 1921,

and annually thereafter, an estimate of appropriations to refund and pay back duties or taxes erroneously, or illegally assessed or collected under the internal-revenue laws, and to pay

judgements, including interests and costs, rendered for taxes or

penalties erroneously or illegally assessed or collected under

the internal-revenue laws’’.

(37) The first paragraph on page 133 of volume 22 of the

Statutes at Large, in the Act of July 1, 1882 (U.S.C., title 31,

sec. 603).

(38) The eighth paragraph under the heading ‘‘Foreign Intercourse’’ of the Act of May 3, 1905 (33 Stat. 1214; U.S.C., title

31, sec. 603).

(39) The last paragraph on page 48 of volume 30 of the Statutes at Large, in the Act of June 4, 1897 (U.S.C., title 31, sec.

604).

(40) The eighth paragraph under the heading ‘‘Under the

Engineer Department’’ of the Act of February 13, 1913 (37

Stat. 671; U.S.C., title 31, sec. 605).

(41) The sixth paragraph under the heading ‘‘Fortifications

in Insular Possessions’’ of the Act of March 3, 1905 (33 Stat.

847; U.S.C., title 31, sec. 606).

(42) So much of the first section of the Act of August 4, 1886

(24 Stat. 246; U.S.C., title 31, sec. 607), as reads: ‘‘the estimates for the Army and Navy hospital service shall be submitted as a part of the military establishment’’.

(43) The first full paragraph on page 117 of volume 31 of the

Statutes at Large, in the Act of April 17, 1900 (U.S.C., title 31,

sec. 609).

(44) Section 3668 of the Revised Statutes (U.S.C., title 31,

sec. 610).

(45) So much of the first paragraph on page 357 of volume

20 of the Statutes at Large, in the Act of March 3, 1879

(U.S.C., title 31, sec. 611), as reads: ‘‘: Provided That hereafter,

in making this estimates for railway mail service the Postmaster General shall separate the estimate for postal-car serv-
Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 482

ice from the general estimates; and in case any increase of

diminution of service by postal cars shall be made by him, the

reasons therefor shall be given in his annual report next succeeding such increase or diminution’’.

(46) So much of the first paragraph under the heading ‘‘United States Geological Survey’’ in the Act of March 3, 1887 (24

Stat. 527; U.S.C., title 31, sec. 612), as reads: ‘‘; and hereafter

the estimates for the Geological Survey shall be itemized’’.

(47) The first paragraph on page 455 of volume 32 of the

Statutes at Large, in the Act of June 28, 1902 (U.S.C., title 31,

sec. 612).

(48) Section 4 of the Act of August 15, 1876 (19 Stat. 200;

U.S.C., title 31, sec. 613).

(49) The fourth paragraph of section 26 of the Act of June

31, 1913 (38 Stat. 103; U.S.C., title 31, sec. 613).

(50) The eighth full paragraph on page 1421 of volume 36 of

the Statutes at Large, in the Act of March 4, 1911 (U.S.C., title

31, sec. 614).

(51) The eighth full paragraph on page 1206 of volume 33 of

the Statutes at Large, in the Act of March 3, 1905 (U.S.C., title

31, sec. 615).

(52) The fourth full paragraph under the heading ‘‘Government in the Territories’’ of the Act of July 16, 1914 (38 Stat.

479; U.S.C., title 31, sec. 616).

(53) The first full paragraph on page 492 of volume 39 of the

Statutes at Large, in the Act of August 11, 1916 (U.S.C., title

31, sec. 617).

(54) The proviso in the first paragraph under the heading

‘‘Rent in the District of Columbia’’ of the Act of March 4, 1915

(38 Stat.1108; U.S.C., title 31 sec. 617).

(55) The seventh paragraph on page 433 of volume 32 of the

Statutes at Large, in the Act of June 28, 1902 (U.S.C., title 31

sec. 618).

(56) The ninth full paragraph on page 755 of volume 36 of

the Statutes at Large, in the Act of June 25, 1910 (U.S.C., title

31 sec. 618).

(57) The fourth full paragraph on page 362 of volume 27 of

the Statutes at Large, in the Act of August 5, 1892 (U.S.C.,

title 31, sec. 619).

(58) The first full paragraph on page 764 of volume 36 of the

Statutes at Large, in the Act of June 25, 1910 (U.S.C., title 31,

sec. 620).

(59) Section 6 of the Act of August 1, 1914 (38 Stat. 679;

U.S.C., title 31, sec. 621).

(60) The last full sentence in the first paragraph on page 254

of volume 23 of the Statutes at Large, in the Act of July 7,

1884 (U.S.C., title 31, sec. 622).

(61) Section 5 of the Act of June 30, 1906 (34 Stat. 763;

U.S.C., title 31, sec. 626).

(62) The proviso at the end of the first paragraph on page

579 of volume 37 of the Statutes at Large, in the Act of August

24, 1912 (U.S.C., title 31, sec. 626).

(63) Section 7, as amended, of the Act of August 26, 1912 (37

Stat. 626; 37 Stat. 790; U.S.C., title 31, sec. 629).
483 Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

(64) The fourth full paragraph on page 854 of volume 37 of

the Statute at Large, in the Act of March 4, 1913 (U.S.C., title

31, sec. 630).

(65) The proviso at the end of the seventh paragraph on page

1030 of volume 31 of the Statutes at Large, in the Act of

March 3, 1901 (U.S.C., title 31, sec. 633).

(66) The second paragraph under the heading ‘‘Contingent,

Bureau of Ordnance’’ of the Act of July 12, 1921 (42 Stat. 128;

U.S.C., title 31, sec. 636), down through the first proviso therein.

(67) So much of the third paragraph under the heading ‘‘Contingent Expenses, Navy Department’’ of the Act of June 22,

1906 (34 Stat. 427; U.S.C., title 31, sec. 637), as reads: ‘‘and

hereafter it shall not be lawful to expend, for any of the offices

or bureaus of the Navy Department at Washington, any sum

out of appropriations made for the naval establishment for any

of the purposes mentioned or authorized in the said foregoing

paragraph’’.

(68) So much of the paragraph under the heading ‘‘Increase

of the Navy, Equipment’’ of the Act of March 3, 1915 (38 Stat.

952; U.S.C., title 31, sec. 348) as reads: ‘‘and beginning with

July first, nineteen hundred and fifteen, equipment outfits

shall be charged to appropriation ‘Increase of the Navy, Construction and Machinery’ ’’.

(69) The two proviso in the paragraph under the heading

‘‘Fuel and Transportation’’ of the Act of March 3, 1915 (38 Stat.

944; U.S.C., title 31, sec. 649).

(70) The proviso in the tenth paragraph on page 236 of volume 28 of the Statutes at Large, in the Act of August 6, 1894

(U.S.C., title 31, sec. 650).

(71) The fourth full paragraph on page 1175 of volume 34 of

the Statutes as Large, in the Act of March 2, 1907 (U.S.C., title

31, sec. 655).

(72) So much of the first full paragraph on page 1391 of volume 42 of the Statutes at Large, in the Act of March 2, 1923

(U.S.C., title 31, sec. 656), as reads: ‘‘and the Budget estimates

for each of such appropriations shall hereafter carry separately

the amounts required for such transportation costs’’.

(73) The proviso in the seventh full paragraph on page 520

of volume 32 of the Statutes at Large, in the Act of June 30,

1902 (U.S.C., title 31, sec. 657).

(74) The proviso in lines 2 through 8 on page 710 of volume

36 of the Statutes at Large, in the Act of June 25, 1910

(U.S.C., title 31, sec. 664).

(75) Section 3682 of the Revised Statutes (U.S.C., title 31,

sec. 674).

(76) Section 3683 of the Revised Statutes (U.S.C., title 31,

sec. 675).

(77) The second full paragraph on page 1303 of volume 41

of the Statutes at Large, in the Act of March 3, 1921 (U.S.C.,

title 31, sec. 676).

(78) The proviso in lines 7 though 17 on page 203 of volume

21 of the Statutes at Large, in the Act of June 19, 1878

(U.S.C., title 31, sec. 677).
Sec. 301 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 484

(79) Section 3684 of the Revised Statutes (U.S.C., title 31,

sec. 681).

(80) Section 6 of the Act of May 30, 1908 (U.S.C., title 31,

sec. 683).

(81) So much of the paragraph under the heading ‘‘Pay of Assistant Custodians and Janitors’’ on pages 1153 and 1154 of

volume 31 of the Statutes at Large, in the Act of March 3,

1901 (U.S.C., title 31, sec. 684), as reads: ‘‘, and hereafter no

other fund appropriated shall be used for this service’’.

(82) The second paragraph under the heading ‘‘United States

Commerce Court’’ of the Act of March 4, 1911 (36 Stat; U.S.C.,

title 31, sec. 687).

(83) Section 26 of the Act of June 30, 1913 (38 Stat. 103,

U.S.C., title 31, sec. 688).

(84) Section 400 of the Second Deficiency Appropriation Act,

1947 (U.S.C., title 31, sec. 694).

(85) Section 607 of the Act of June 30, 1945, as amended (59

Stat. 304; U.S.C., title 5, sec. 947).

(86) Section 3 of the Act of March 3, 1875, as amended (18

Stat. 370; U.S.C., title 31, sec. 624).

(87) So much of the Act of March 26, 1934, as amended (48

Stat. 466; U.S.C., title 5, sec. 118c), as reads: ‘‘with budget estimates’’.

(88) So much of the paragraph under the heading ‘‘Department of State’’ in the Act of August 5, 1909 (36 Stat. 119;

U.S.C., title 5, sec. 157), as reads: ‘‘and estimates for further

appropriations hereunder shall include in detail salaries for all

persons to be employed and paid in the Department of State

at Washington, District of Columbia’’.

(89) The last proviso under the head ‘‘Working Capital Fund’’

in the Act of July 12, 1943 (57 Stat. 393; U.S.C., title 5, sec.

558a).

(90) So much of section 17 of the Act of May 22, 1920, as

amended (41 Stat. 620; U.S.C., title 5, sec. 730), as reads: ‘‘annually to the Bureau of the Budget’’.

(92) The last sentence of Section 35 of the Act of September

7, 1916, as amended (39 Stat. 749; U.S.C., title 5, sec. 785).

(93) So much of section 1 of the Act of October 1, 1980 (26

Stat. 653; U.S.C., title 10, sec. 214), as reads: ‘‘and the Signal

Corps of the Army shall remain a part of the Military Establishment under the direction of the Secretary of War, and all

estimates for its support shall be included with other estimates

for the support of the Military Establishment’’.

(94) The last proviso of section 4 of the Act of March 12,

1926 (44 Stat. 206; U.S.C., title 10, sec. 1597).

(95) So much of section 1 of the Act of June 12, 1917, as

amended (40 Stat. 153; U.S.C., title 16, sec. 452) as reads: ‘‘and

the Secretary of the Interior is directed to submit, for the fiscal

year nineteen hundred and nineteen and annually thereafter,

estimates of the amounts required for the care, maintenance,

and development of the said parks.’’

(96) So much of section 1 of the Act of July 24, 1876, as

amended (19 Stat. 99; U.S.C., title 24, sec. 278), as requires estimates for the care and maintenance of the national military
485 Sec. 302 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950

cemeteries to be submitted annually by the Director of the National Park Service.

(97) So much of section 1 of the Act of January 24, 1923 (42

Stat. 1208; U.S.C., title 31, sec. 12), as reads: ‘‘The aggregate

of all estimates of appropriations from the ‘reclamation fund’

contained in the Budget for any fiscal year shall be included

in the totals of the Budget for that year.’’

(98) The second paragraph under the heading ‘‘Pay, Miscellaneous’’ of the Act of March 3, 1909 (35 Stat. 754; U.S.C.,

title 31 sec. 609a).

(99) The third paragraph under the heading ‘‘Office of the

Fourth Assistant Postmaster General’’ of the Act of June 9,

1896 (29 Stat. 316; U.S.C., title 31, sec. 610a).

(100) The last proviso under the heading ‘‘National Home for

Disabled Volunteer Soldiers’’ of the Act of October 2, 1888, as

amended (25 Stat. 543; U.S.C., title 31 sec. 719).

(101) Section 119 of the Act of June 3, 1916 (39 Stat. 213;

U.S.C., title 32, sec. 25).

(102) So much of the fourth full paragraph on page 558 of

volume 39 of the Statutes at Large in the Act of August 29,

1916 (U.S.C., title 34, sec. 504), as reads: ‘‘and the Secretary

of the Navy shall each year, in the annual estimates, report to

Congress the number of persons so employed, their duties, and

the amount paid to each’’.

(103) The last proviso in the third paragraph on page 377 of

volume 37 of the Statutes at Large in the Act of August 23,

1912 (U.S.C., title 39, sec. 769).

(104) Section 27 of the Act of January 12, 1895, as amended

(28 Stat. 604; U.S.C., title 44 sec. 37).

(105) The eighth full paragraph on page 382 of volume 35 of

the Statutes at Large in the Act of May 27, 1908 (U.S.C., title

44, sec. 37).

(106) The last paragraph under the heading ‘‘Government in

the Territories’’ in the Act of June 20, 1874 (18 Stat. 99;

U.S.C., title 48, sec. 1456).

SAVING PROVISIONS

SEC. 302. (a) The omission of any provision of law from the provisions of law repealed under section 301 shall not be construed as

limiting the application of section 201 or 216 of the Budget and Accounting Act, 1921, as amended, or the Powers of the President

thereunder, or as evidencing an intent that such provision was not

to be superseded by such sections.

(b) Whenever any law authorizes expenditures for a particular

object or purpose to be made from an appropriation item referred

to in such law by the specific title theretofore used for that appropriation item in the appropriation Act concerned, and thereafter

may be made from any corresponding appropriation item.

(c) Except where authority for performance of a function is specifically repealed in section 301, none of the provisions of such section shall be construed as affecting the jurisdiction or responsibility

of any agency or officer of the Government over any function or organizational unit referred to in such section.
Sec. 302 BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950 486

(d) Existing laws, policies, procedures, and directives pertaining

to functions covered by this Act, and not inconsistent herewith or

repealed hereby, shall remain in full force and effect unless and

until superseded, or except as they may be amended, under the authority of this Act or other appropriate authority.

Approved September 12, 1950.
487

16Only parts 1, 2, and 3, of title II, ‘‘Fiscal Controls,’’ of this law are reproduced here.

Parts 1, 2, and 3 of

Legislative Reorganization Act of 1970

Public Law 91–510

(84 Stat. 1140)

AN ACT To improve the operations of the legislative branch of the Federal

Government, and for other purposes.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled, That this Act, divided into titles, parts, and sections according to the following table

of contents, may be cited as the ‘‘Legislative Reorganization Act of

1970’’.16

TITLE II—FISCAL CONTROLS

PART 1—BUDGETARY AND FISCAL INFORMATION AND DATA

BUDGETARY AND FISCAL DATA PROCESSING SYSTEM

SEC. 201. The Secretary of the Treasury and the Director of the

Office of Management and Budget, in cooperation with the Comptroller General of the United States, shall develop, establish, and

maintain, insofar as practicable, for use by all Federal agencies, a

standardized information and data processing system for budgetary

and fiscal data.

BUDGET STANDARD CLASSIFICATIONS

SEC. 202. (a) The Secretary of the Treasury and the Director of

the Office of Management and Budget, in cooperation with the

Comptroller General, shall develop, establish, and maintain standard classifications of programs, activities, receipts, and expenditures of Federal agencies in order—

(1) to meet the needs of the various branches of the Government; and

(2) to facilitate the development, establishment, and maintenance of the data processing system under section 201 through

the utilization of modern automatic data processing techniques.

The initial classifications under this subsection shall be established

on or before December 31, 1971.

(b) The Secretary of the Treasury and the Director of the Office

of Management and Budget shall submit a report to the Senate

and the House of Representatives on or before September 1 of each

year, commencing with 1971, with respect to the performance during the preceding fiscal year of the functions and duties imposed
Sec. 203 PARTS 1, 2, AND 3 OF LEGISLATIVE REORGANIZATION ACT OF 1970 488

on them by section 201 and subsection (a) of this section. The reports made under the subsection in 1971 and 1972 shall set forth

the progress achieved in the development of classifications under

subsection (a) of this section. The reports made in years thereafter

shall include information with respect to changes in, and additions

to, classifications previously established. Each support report shall

include such comments of the Comptroller General as he deems

necessary or advisable.

AVAILABILITY TO CONGRESS OF BUDGETARY, FISCAL, AND RELATED

DATA

SEC. 203. Upon request of any committee of either House, or of

any joint committee of the two Houses, the Secretary of the Treasury and the Director of the Office of Management and Budget

shall—

(1) furnish to such committee or joint committee information

as to the location and nature of data available in the various

and expenditures of such agencies; and

(2) to the extent feasible, prepare for such committee or joint

committee summary tables of such data.

ASSISTANCE TO CONGRESS BY GENERAL ACCOUNTING OFFICE

Sec. 204. (a) The Comptroller General shall review and analyze

the results of Government programs and activities carried on under

existing law, including the making of cost benefits studies, when

ordered by either House of Congress, or upon his own initiative, or

when requested by any committee of the House of Representatives

or the Senate, or any joint committee of the two Houses, having jurisdiction over such programs and activities.

(b) The Comptroller General shall have available in the General Accounting Office employees who are expert in analyzing and

conducting cost benefit studies of Government programs. Upon request of any committee of either House or any joint committee of

the two Houses, the Comptroller General shall assist such committee or joint committee, or the staff of such committee or joint committee—

(1) in analyzing cost benefit studies furnished by any Federal

agency to such committee or joint committee; or

(2) in conducting cost benefit studies of programs under the

jurisdiction of such committee or joint committee.

POWER AND DUTIES OF COMPTROLLER GENERAL IN CONNECTION WITH

BUDGETARY, FISCAL, AND RELATED MATTERS

SEC. 205. (a) The Comptroller General shall establish within the

General Accounting Office such office or division, or such offices or

divisions, as he considers necessary to carry out the functions and

duties imposed on him by the provisions of this title.

(b) The Comptroller General shall include in his annual report to

the Congress information with respect to the performance of the

functions and duties imposed on him by the provisions of this title.
489 Sec. 221 PARTS 1, 2, AND 3 OF LEGISLATIVE REORGANIZATION ACT OF 1970

PRESERVATION OF EXISTING AUTHORITIES AND DUTIES UNDER

BUDGET AND ACCOUNTING AND OTHER STATUTES

SEC. 206. Nothing contained in this Act shall be constructed as

impairing any authority or responsibility of the Secretary of the

Treasury, the Director of the Office of Management and Budget,

and the Comptroller General of the United States under the Budget and Accounting Act, 1921, as amended, and the Budget and Accounting Procedures Act of 1950, as amended, or any other statutes.

DEFINITION

SEC. 207. As used in this title, the term ‘‘Federal agency’’ means

any department, agency, wholly owned Government corporation,

establishment, or instrumentality of the Government of the United

States or the government of the District of Columbia.

PART 2—THE BUDGET

SUPPLEMENTAL BUDGET INFORMATION

SEC. 221. (a) Section 201(a) of the Budget and Accounting Act,

1921, as amended (31 U.S.C. 11), is amended—

(1) by striking out the word ‘‘and’’ at the end of subparagraph (10)

(2) by striking out the period at the end of subparagraph (11)

and inserting in lieu of the period a semicolon and the word

‘‘and’’; and

(3) by adding immediately below subparagraph (11) the following new subparagraph:

‘‘(12) with respect to each proposal in the Budget for new or

additional legislation which would create or expand any function, activity, or authority, in addition to those functions, activities, and authorities then existing or as then being administered and operated, a tabulation showing—

‘‘(A) the amount proposed in the Budget for appropriation and for expenditure in the ensuring fiscal year on account of such proposal; and

‘‘(B) the estimated appropriation required on account of

such proposal in each of the four fiscal years, immediately

following that ensuing fiscal year, during which such proposal is to be in effect.’’.

(b) Section 201 of the Budget and Accounting Act, 1921, as

amended (31 U.S.C. 11) is amended by striking out the terminated

and obsolete subsections (b), (c), (d), (e), and (f) and inserting in

lieu thereof the following new subsections:

‘‘(b) The President shall transmit to the Congress, on or before

June 1 of each year, beginning with 1972 a supplemental summary

of the Budget for the ensuing fiscal year transmitted to the Congress by the President under subsection (a) of this section. Such

supplemental summary—

‘‘(1) shall reflect with respect to that ensuing fiscal year—

‘‘(A) all substantial alterations in or reappraisals of estimates of expenditures and receipts, and
Sec. 231 PARTS 1, 2, AND 3 OF LEGISLATIVE REORGANIZATION ACT OF 1970 490

‘‘(B) all substantial obligations imposed on that budget

after its transmission to the Congress;

‘‘(2) shall contain current information with respect to those

matters covered by subparagraph (8) and clauses (2) and (3) of

subparagraph (9) of subsection (a) of this section; and

‘‘(3) shall contain such additional information, in summary

form, as the President considers necessary or advisable to provide the Congress with a complete and current summary of information with respect to that Budget and the then currently

estimated functions, obligations, requirements, and financial

condition of the Government for that ensuring fiscal year.

‘‘(c) The President shall transmit to the Congress, on or before

June 1 of each year, beginning with 1972, in such form and detail

as he may determine—

‘‘(1) summaries of estimated expenditures, for the first four

fiscal years following the ensuring fiscal year for which the

Budget was transmitted to the Congress by the President

under subsection (a) of this section, which will be required

under continuing programs which have a legal commitment for

future years or are considered mandatory under existing law;

and

‘‘(2) summaries of estimated expenditures, in fiscal years following such ensuing fiscal year, of balances carried over from

such ensuring fiscal year.’’.

PART 3—UTILIZATION OF REPORTS AND EMPLOYEES OF GENERAL

ACCOUNTING OFFICE

ASSISTANCE BY GENERAL ACCOUNTING OFFICE TO CONGRESSIONAL

COMMITTEES IN CONNECTION WITH PROPOSED LEGISLATION AND

COMMITTEE REVIEW OF FEDERAL PROGRAMS AND ACTIVITIES

SEC. 231. At the request of any committee of the House of Senate, or of any joint committee of the two Houses, the Comptroller

General shall explain to, and discuss with, the committee or joint

committee making the request, or the staff of such committee or

joint committee, any report made by the General Accounting Office

which would assist such committee in connection with—

(1) its consideration of proposed legislation, including requests for appropriations, or

(2) its review of any program, or of any activity of any Federal agency, which is within the jurisdiction of such committee

or joint committee.

DELIVERY OF GENERAL ACCOUNTING OFFICE TO CONGRESSIONAL

COMMITTEES OF REPORTS TO CONGRESS

SEC. 232. Whenever the General Accounting Office submits any

reports to the Congress, the Comptroller General shall deliver copies of such report to—

(1) the Committees on Appropriations of the House and Senate,

(2) the Committees on Government Operations of the House

and Senate, and

(3) any other committee of the House or Senate, or any joint

committee of the two Houses, which has requested information
491 Sec. 235 PARTS 1, 2, AND 3 OF LEGISLATIVE REORGANIZATION ACT OF 1970

on any program or part thereof, or any activity of any Federal

agency, which is the subject, in whole or in part, of such report.

FURNISHING TO CONGRESSIONAL COMMITTEES BY GENERAL

ACCOUNTING OFFICE OF ITS REPORTS GENERALLY

SEC. 233. At the request of any committee of the House or Senate, or of any joint committee of the two Houses, the Comptroller

General shall make available to such committee or joint committee

a copy of any report of the General Accounting Office which was

not delivered to that committee or joint committee under section

232 of this Act.

FURNISHING TO COMMITTEES AND MEMBERS OF CONGRESS BY GENERAL ACCOUNTING OFFICE OF MONTHLY AND ANNUAL LISTS OF ITS

REPORTS; AVAILABILITY OF REPORTS TO COMMITTEES AND MEMBERS

ON REQUEST

SEC. 234. The Comptroller General shall prepare, once each calendar month, a list of all reports of the General Accounting Office

issued during the immediately preceding calendar month, and, not

less than once each calendar year, a cumulative list of all reports

of the General Accounting Office issued during the immediately

preceding twelve months, and transmit a copy of each such list of

reports to each committee, Member of the House or Senate, or the

Resident Commissioner, as the case may be, a copy of each report

so listed and requested.

ASSIGNMENTS OF EMPLOYEES OF GENERAL ACCOUNTING OFFICE TO

DUTY WITH COMMITTEES OF CONGRESS

SEC. 235. (a) Notwithstanding any other provision of law, the

Comptroller General may not assign or detail any employee of the

General Accounting Office to full-time duty on a continuing basis

with any committee of the Senate or House of Representatives or

with any joint committee of Congress for any period of more than

one year.

(b) The Comptroller General shall include in his annual report to

the Congress the following information—

(1) the name of each employee assigned or detailed to any

committee of the Senate or House of Representative or any

joint committee of Congress;

(2) the name of each committee or joint committee to which

each such employee is assigned or detailed;

(3) the length of the period of such assignment or detail of

such employee;

(4) a statement as to whether such assignment or detail is

finished or is currently in effect; and

(5) the pay of such employee, his travel, subsistence, and

other expenses, the agency contributions for his retirement and

life and health insurance benefits, and other necessary monetary expenses for personnel benefits on account of such employee, paid out of appropriations available to the General Accounting Office during the period of the assignment or detail

of such employee, or, if such assignment or detail is currently
Sec. 236 PARTS 1, 2, AND 3 OF LEGISLATIVE REORGANIZATION ACT OF 1970 492

in effect during that part of the period of such assignment or

detail which has been completed.

AGENCY REPORTS

SEC. 236. Whenever the General Accounting Office has made a

report which contains recommendations to the head of any Federal

agency, such agency shall—

(1) not later than sixty days after the date of such report,

submit a written statement to the Committees on Government

Operations of the House of Representatives and the Senate of

the action taken by such agency with respect to such recommendations; and

(2) in connection with the first request for appropriations for

that agency submitted to the Congress more than sixty days

after the date of such report, submit a written statement to the

Committees on Appropriations of the House of Representatives

and the Senate of the action taken by such agency with respect

to such recommendations.

October 26, 1970.
493

Impoundment Control Act of 1974

Title X of Public Law 93–344

(88 Stat. 332)

PART A—GENERAL PROVISIONS

DISCLAIMER

SEC. 1001. Nothing contained in this Act, or in any amendments

made by this Act, shall be construed as—

(1) asserting or conceding the constitutional powers or limitations of either the Congress or the President;

(2) ratifying or approving any impoundment heretofore or

hereafter executed or approved by the President or any other

Federal officer or employee, except insofar as pursuant to statutory authorization then in effect;

(3) affecting in any way the claims or defenses of any party

to litigation concerning any impoundment; or

(4) superseding any provision of law which requires the obligation of budget authority or the making of outlays thereunder.

AMENDMENT TO ANTIDEFICIENCY ACT

SEC. 1002. Section 3679(c)(2) of the Revised Statutes, as amended (31 U.S.C. 665), is amended to read as follows:

‘‘(2) In apportioning an appropriation, reserves may be established solely to provide for contingencies, or to effect savings

whenever savings are made possible by or through changes in

requirements or greater efficiency of operations. Whenever it is

determined by an officer designated in subsection (d) of this

section to make apportionments and reapportionments that

any amount so reserved will not be required to carry out the

full objectives and scope of the appropriation concerned. He

shall recommend the rescission of such amount in the manner

provided in the Budget and Accounting Act, 1921, for estimates

of appropriations. Except as specifically provided by particular

appropriations Acts or other laws, no reserves shall be established other than as authorized by this subsection. Reserves established pursuant to this subsection shall be reported to the

Congress in accordance with the Impoundment Control Act of

1974.’’

REPEAL OF EXISTING IMPOUNDMENT REPORTING PROVISION

SEC. 1003. Section 203 of the Budget and Accounting Procedures

Act of 1950 is repealed.
Sec. 1011 IMPOUNDMENT CONTROL ACT OF 1974 494

PART B—CONGRESSIONAL CONSIDERATION OF PROPOSED RESCISSIONS,

RESERVATIONS, AND DEFERRALS OF BUDGET AUTHORITY

DEFINITIONS

SEC. 1011. For purposes of this part—

(1) ‘‘deferral of budget authority’’ includes—

(A) withholding or delaying the obligation or expenditure

of budget authority (whether by establishing reserves or

otherwise) provided for projects or activities; or

(B) any other type of Executive action or inaction which

effectively precludes the obligation or expenditure of budget authority, including authority to obligate by contract in

advance of appropriations as specifically authorized by

law;

(2) ‘‘Comptroller General’’ means the Comptroller General of

the United States;

(3) ‘‘rescission bill’’ means a bill or joint resolution which

only rescinds, in whole or in part, budget authority proposed

to be rescinded in a special message transmitted by the President under section 1012, and upon which the Congress completes action before the end of the first period of 45 calendar

days of continuous session of the Congress after the date on

which the President’s message is received by the Congress;

(4) ‘‘impoundment resolution’’ means a resolution of the

House of Representatives or the Senate which only expresses

its disapproval of a proposed deferral of budget authority set

forth in a special message transmitted by the President under

section 1013; and

(5) continuity of a session of the Congress shall be considered

as broken only by an adjournment of the Congress sine die,

and the days on which either House is not in session because

of an adjournment of more than 3 days to a day certain shall

be excluded in the computation of the 45-day period referred

to in paragraph (3) of this section and in section 1012, and the

25-day periods referred to in sections 1016 and 1017(b)(1). If

a special message is transmitted under section 1012 during

any Congress and the last session of such Congress adjourns

sine die before the expiration of 45 calendar days of continuous

session (or a special message is so transmitted after the last

session of the Congress adjourns sine die), the message shall

be deemed to have been retransmitted on the first day of the

succeeding Congress and the 45-day period referred to in paragraph (3) of this section and in section 1012 (with respect to

such message) shall commence on the day after such first day.

RESCISSION OF BUDGET AUTHORITY

SEC. 1012. (a) TRANSMITTAL OF SPECIAL MESSAGE.—Whenever

the President determines that all or part of any budget authority

will not be required to carry out the full objectives or scope of programs for which it is provided or that such budget authority should

be rescinded for fiscal policy or other reasons (including the termination of authorized projects or activities for which budget authority has been provided), or whenever all or part of budget authority

provided for only one fiscal year is to be reserved from obligation
495 Sec. 1013 IMPOUNDMENT CONTROL ACT OF 1974

for such fiscal year, the President shall transmit to both Houses of

Congress a special message specifying—

(1) the amount of budget authority which he proposes to be

rescinded or which is to be so reserved;

(2) any account, department, or establishment of the Government to which such budget authority is available for obligation,

and the specific project or governmental functions involved;

(3) the reasons why the budget authority should be rescinded

or is to be so reserved;

(4) to the maximum extent practicable, the estimated fiscal,

economic, and budgetary effect of the proposed rescission or of

the reservation; and

(5) all facts, circumstances, and considerations relating to or

bearing upon the proposed rescission or the reservation and

the decision to effect the proposed rescission or the reservation,

and to the maximum extent practicable, the estimated effect of

the proposed rescission or the reservation upon the objects,

purposes, and programs for which the budget authority is provided.

(b) REQUIREMENT TO MAKE AVAILABLE FOR OBLIGATION.—Any

amount of budget authority proposed to be rescinded or that is to

be reserved as set forth in such special message shall be made

available for obligation unless, within the prescribed 45-day period,

the Congress has completed action on a rescission bill rescinding

all or part of the amount proposed to be rescinded or that is to be

reserved.

DISAPPROVAL OF PROPOSED DEFERRALS OF BUDGET AUTHORITY

SEC. 1013. (a) TRANSMITTAL OF SPECIAL MESSAGE.—Whenever

the President, the Director of the Office of Management and Budget, the head of any department or agency of the United States, or

any officer or employee of the United States proposes to defer any

budget authority provided for a specific purpose or project, the

President shall transmit to the House of Representatives and the

Senate a special message specifying—

(1) the amount of the budget authority proposed to be deferred;

(2) any account, department, or establishment of the Government to which such budget authority is available for obligation,

and the specific projects or governmental functions involved;

(3) the period of time during which the budget authority to

be deferred;

(4) the reasons for the proposed deferral, including any legal

authority invoked by him to justify the proposed deferral;

(5) to the maximum extent practicable, the estimated fiscal,

economic, and budgetary effect of the proposed deferral; and

(6) all facts, circumstances, and considerations relating to or

bearing upon the proposed deferral and the decision to effect

the proposed deferral, including an analysis of such facts, circumstances, and considerations in terms of their application to

any legal authority and specific elements of legal authority invoked by him to justify such proposed deferral, and to the maximum extent practicable, the estimated effect of the proposed
Sec. 1014 IMPOUNDMENT CONTROL ACT OF 1974 496

deferral upon the objects, purposes, and programs for which

the budget authority is provided.

A special message may include one or more proposed deferrals of

budget authority. A deferral may not be proposed for any period of

time extending beyond the end of the fiscal year in which the special message proposing the deferral is transmitted to the House

and the Senate.

(b) REQUIREMENT TO MAKE AVAILABLE FOR OBLIGATION.—Any

amount of budget authority proposed to be deferred, as set forth in

a special message transmitted under subsection (a), shall be made

available for obligation if either House of Congress passes an impoundment resolution disapproving such proposed deferral.

(c) EXCEPTION.—The provisions of this section do not apply to

any budget authority proposed to be rescinded or that is to be reserved as set forth in a special message required to be transmitted

under section 1012.

TRANSMISSION OF MESSAGES; PUBLICATION

SEC. 1014. (a) DELIVERY TO HOUSE AND SENATE.—Each special

message transmitted under section 1012 or 1013 shall be transmitted to the House of Representatives and the Senate on the same

day, and shall be delivered to the Clerk of the House of Representatives if the House is not in session, and to the Secretary of the

Senate if the Senate is not in session. Each special message so

transmitted shall be referred to the appropriate committee of the

House of Representatives and the Senate. Each such message shall

be printed as a document of each House.

(b) DELIVERY TO COMPTROLLER GENERAL.—A copy of each special

message transmitted under section 1012 or 1013 shall be transmitted to the Comptroller General on the same day it is transmitted

to the House of Representatives and the Senate. In order to assist

the Congress in the exercise of its functions under sections 1012

and 1013, the Comptroller General shall review each such message

and inform the House of Representatives and the Senate as

promptly as practicable with respect to—

(1) in the case of a special message transmitted under section 1012, the facts surrounding the proposed rescission or the

reservation of budget authority (including the probable effects

thereof); and

(2) in the case of a special message transmitted under section 1013, (A) the facts surrounding each proposed deferral of

budget authority (including the probable effects thereof) and

(B) whether or not (or to what extent), in his judgment, such

proposed deferral is in accordance with existing statutory authority.

(c) TRANSMISSION OF SUPPLEMENTARY MESSAGES.—If any information contained in a special message transmitted under section

1012 or 1013 is subsequently revised, the President shall transmit

to both Houses of Congress and the Comptroller General a supplementary message stating and explaining such revision. Any such

supplementary message shall be delivered, referred, and printed as

provided in subsection (a). The Comptroller General shall promptly

notify the House of Representatives and the Senate of any changes
497 Sec. 1015 IMPOUNDMENT CONTROL ACT OF 1974

in the information submitted by him under his subsection (b) which

may be necessitated by such revision.

(d) PRINTING IN FEDERAL REGISTER.—Any special message transmitted under section 1012 or 1013, and any supplementary message transmitted under subsection (c) shall be printed in the first

issue of the Federal Register published after such transmittal.

(e) CUMULATIVE REPORTS OF PROPOSED RESCISSIONS, RESERVATIONS, AND DEFERRALS OF BUDGET AUTHORITY.—

(1) The President shall submit a report to the House of Representatives and the Senate, not later than the 10th day of

each month during a fiscal year, listing all budget authority for

that fiscal year with respect to which, as of the first day of

such month—

(A) he has transmitted a special message under section

1012 with respect to a proposed rescission or a reservation;

and

(B) he has transmitted a special message under section

1013 proposing a deferral.

Such report shall also contain, with respect to each such proposed

rescission or deferral, or each such reservation, the information required to be submitted in the special message with respect thereto

under section 1012 or 1013.

(2) Each report submitted under paragraph (1) shall be

printed in the first issue of the Federal Register published

after its submission.

REPORTS BY COMPTROLLER GENERAL

SEC. 1015. (a) FAILURE TO TRANSMIT SPECIAL MESSAGE.—If the

Comptroller General finds that the President, the Director of the

Office of Management and Budget, the head of any department or

agency of the United States, or any other officer or employee of the

United States—

(1) is to establish a reserve or proposes to defer budget authority with respect to which the President is required to

transmit a special message under section 1012 or 1013; or

(2) has ordered, permitted, or approved the establishment of

such a reserve or a deferral of budget authority;

and that the President has failed to transmit a special message

with respect to such reserve or deferral, the Comptroller General

shall make a report on such reserve or deferral and any available

information concerning it to both Houses of Congress. The provisions of this part shall apply with respect to such reserve or deferral in the same manner and with the same effect as if such report

of the Comptroller General were a special message transmitted by

the President under section 1012 or 1013, and, for purposes of this

part, such report shall be considered a special message transmitted

under section 1012 or 1013.

(b) INCORRECT CLASSIFICATION OF SPECIAL MESSAGE.—If the

President has transmitted a special message to both Houses of

Congress in accordance with section 1012 or 1013, and the Comptroller General believes that the President so transmitted the special message in accordance with one of those sections when the special message should have been transmitted in accordance with the
Sec. 1016 IMPOUNDMENT CONTROL ACT OF 1974 498

other of those sections, the Comptroller General shall make a report to both Houses of the Congress setting forth his reasons.

SUITS BY COMPTROLLER GENERAL

SEC. 1016. If, under section 1012(b) or 1013(b), budget authority

is required to be made available for obligation and such budget authority is not made available for obligation, the Comptroller General is hereby expressly empowered through attorneys of his own

selection, to bring a civil action in the United States District Court

for the District of Columbia to require such budget authority to be

made available for obligation, and such court is hereby expressly

empowered to enter in such civil action, against any department,

agency, officer, or employee of the United States, any decree, judgment, or order which may be necessary or appropriate to make

such budget authority available for obligation. The courts shall give

precedence to civil actions brought under this section, and to appeals and writs from decisions in such actions, over all other civil

actions, appeals, and writs. No civil action shall be brought by the

Comptroller General under this section until the expiration of 25

calendar days of continuous session of the Congress following the

date on which an explanatory statement by the Comptroller General of the circumstances giving rise to the action contemplated has

been filed with the Speaker of the House of Representatives and

the President of the Senate.

PROCEDURE IN HOUSE AND SENATE

SEC. 1017. (a) REFERRAL.—Any rescission bill introduced with respect to a special message or impoundment resolution introduced

with respect to a proposed deferral of budget authority shall be refereed to the appropriate committee of the House of Representatives

or the Senate, as the case may be.

(b) DISCHARGE OF COMMITTEE.—

(1) If the committee to which a rescission bill or impoundment resolution has been referred has not reported it at the

end of 25 calendar days of continuous session of the Congress

after its introduction, it is in order to move either to discharge

the committee from further consideration of the bill or resolution or to discharge the committee from further consideration

of any other rescission bill with respect to the same special

message or impoundment resolution with respect to the same

proposed deferral, as the case may be, which has been referred

to the committee.

(2) A motion to discharge may be made only by an individual

favoring the bill or resolution, may be made only if supported

by one-fifth of the Members of the House involved (a quorum

being present), and is highly privileged in the House and privileged in the Senate (except that it may not be made after the

committee has reported a bill or resolution with respect to the

same special message or the same proposed deferral, as the

case may be); and debate thereon shall be limited to not more

than 1 hour, the time to be divided in the House equally between those favoring and those opposing the bill or resolution,

and to be divided in the Senate equally between, and con-
499 Sec. 1017 IMPOUNDMENT CONTROL ACT OF 1974

trolled by, the majority leader and the minority leader or their

designees. An amendment to the motion is not in order, and

it is not in order to move to reconsider the vote by which the

motion is agreed to or disagreed to.

(c) FLOOR CONSIDERATION IN THE HOUSE.— (1) When the committee of the House of Representatives has

reported, or has been discharged from further consideration of,

a rescission bill or impoundment resolution, it shall at any

time thereafter be in order (even though a previous motion to

the same effect has been disagreed to) to move to proceed to

the consideration of the bill or resolution. The motion shall be

highly privileged and not debatable. An amendment to the motion shall not be in order, nor shall it be in order to move to

reconsider the vote by which the motion is agreed to or disagreed to.

(2) Debate on a rescission bill or impoundment resolution

shall be limited to not more than 2 hours, which shall be divided equally between those favoring and those opposing the

bill or resolution. A motion further to limit debate shall not be

debatable. In the case of an impoundment resolution, no

amendment to, or motion to recommit, the resolution shall be

in order. It shall not be in order to move to reconsider the vote

by which a rescission bill or impoundment resolution is agreed

to or disagreed to.

(3) Motions to postpone, made with respect to the consideration of a rescission bill or impoundment resolution, and motions to proceed to the consideration of other business, shall be

decided without debate.

(4) All appeals from the decisions of the Chair relating to the

application of the Rules of the House of Representatives to the

procedure relating to any rescission bill or impoundment resolution shall be decided without debate.

(5) Except to the extent specifically provided in the preceding

provisions of this subsection, consideration of any rescission

bill or impoundment resolution and amendments thereto (or

any conference report thereon) shall be governed by the Rules

of the House of Representatives applicable to other bills and

resolutions, amendments, and conference reports in similar circumstances.

(d) FLOOR CONSIDERATION IN THE SENATE.—

(1) Debate in the Senate on any rescission bill or impoundment resolution, and all amendments thereto (in the case of a

rescission bill) and debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours. The

time shall be equally divided between, and controlled by, the

majority leader and the minority leader or their designees.

(2) Debate in the Senate on any amendment to a rescission

bill shall be limited to 2 hours, to be equally divided between,

and controlled by, the mover and the manager of the bill. Debate on an amendment to an amendment, to such a bill, and

debate on any debatable motion or appeal in connection with

such a bill or an impoundment resolution shall be limited to

1, hours to be equally divided between, and controlled by, the

mover and the manager of the bill or resolution, except that in
Sec. 1017 IMPOUNDMENT CONTROL ACT OF 1974 500

the event the manager of the bill or resolution is in favor of

any such amendment, motion, or appeal, the time in opposition

thereto, shall be controlled by the minority leader or his designee. No amendment that is not germane to the provisions of

a rescission bill shall be received. Such leaders, or either of

them, may, from time to time under their control on the passage of a rescission bill or impoundment resolution, allot additional time to any Senator during the consideration of any

amendment, debatable motion, or appeal.

(3) A motion to further limit debate is not debatable. In the

case of a rescission bill, a motion to recommit (except a motion

to recommit with instructions to report back within a specified

number of days, not to exceed 3, not counting any day on

which the Senate is not in session) is not in order. Debate on

any such motion to recommit shall be limited to one hour, to

be equally divided between, and controlled by, the mover and

the manager of the concurrent resolution. In the case of an impoundment resolution, no amendment or motion to recommit is

in order.

(4) The conference report on any rescission bill shall be in

order in the Senate at any time after the third day (excluding

Saturdays, Sundays, and legal holidays) following the day on

which such a conference report is reported and is available to

Members of the Senate. A motion to proceed to the consideration of the conference report may be made even though a previous motion to the same effect has been disagree to.

(5) During the consideration in the Senate of the conference

report on any rescission bill, debate shall be limited to 2 hours,

to be equally divided between, and controlled by, the majority

leader and minority leader or their designees. Debate on any

debatable motion or appeal related to the conference report

shall be limited to 30 minutes, to be equally divided between,

and controlled by, the mover and the manager of the conference report.

(6) Should the conference report be defeated, debate on any

request for a new conference and the appointment of conferees

shall be limited to one hour, to be equally divided between, and

controlled by, the manager of the conference report and the minority leader or his designee, and should any motion be made

to instruct the conferees before the conferees are named, debate on such motion shall be limited to 30 minutes, to be

equally divided between, and controlled by, the mover and the

manager of the conference report. Debate on any amendment

to any such instructions shall be limited to 20 minutes, to be

equally divided between, and controlled by, the mover and the

manager of the conference report. In all cases when the manager of the conference report is in favor of any motion, appeal,

or amendment, the time in opposition shall be under the control of the minority leader or his designee.

(7) In any case in which there are amendments in disagreement, time on each amendment shall be limited to 30 minutes,

to be equally divided between, and controlled by, the manager

of the conference report and the minority leader or his des-
501 Sec. 1017 IMPOUNDMENT CONTROL ACT OF 1974

ignee. No amendment that is not germane to the provisions of

such amendments shall be received.

Approved July 12, 1974.
502

Federal Managers’ Financial Integrity Act of 1982

Public Law 97–255

(96 Stat. 814)

AN ACT To amend the Accounting and Auditing Act of 1950 to require ongoing

evaluations and reports on the adequacy of the systems of internal accounting and

administrative control of each executive agency, and for other purposes

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

Section 1. This Act may be cited as the ‘‘Federal Managers’ Financial Integrity Act of 1982’’. (31 U.S.C. 65 note).

SEC. 2. Section 113 of the Accounting and Auditing Act of 1950

(31 U.S.C. 66a) is amended by adding at the end thereof the following new subsection:

‘‘(d)(1)(A) To ensure compliance with the requirements of subsection (a)(3) of this section, internal accounting and administrative

controls of each executive agency shall be established in accordance

with standards prescribed by the Comptroller General, and shall

provide reasonable assurances that—

‘‘(i) obligations and costs are in compliance with applicable

law;

‘‘(ii) funds, property, and other assets are safeguarded

against waste, loss, unauthorized use, or misappropriation; and

‘‘(iii) revenues and expenditures applicable to agency operations are properly recorded and accounted for to permit the

preparation of accounts and reliable financial and statistical

reports and to maintain accountability over the assets.

‘‘(B) The standards prescribed by the Comptroller General under this paragraph shall include standards to ensure the prompt resolution of all audit findings.

‘‘(2) By December 31, 1982, the Director of the Office

of Management and Budget, in consultation with the

Comptroller General, shall establish guidelines for the

evaluation by agencies of their systems of internal accounting and administrative control to determine such

systems’ compliance with the requirements of paragraph (1) of this subsection. The Director, in consultation with the Comptroller General, may modify such

guidelines from time to time as deemed necessary.

‘‘(3) By December 31, 1983, and by December 31 of

each succeeding year, the head of each executive agency shall, on the basis of an evaluation conducted in accordance with guidelines prescribed under paragraph

(2) of this subsection, prepare a statement—
503 Sec. 4 FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT OF 1982

This Act has not been amended as of December 31, 1995.

‘‘(A) that the agency’s systems of internal accounting and

administrative control fully comply with the requirements

of paragraph (1); or

‘‘(B) that such systems do not fully comply with such requirements.

‘‘(4) In the event that the head of an agency prepares a statement described in paragraph (3)(B), the

head of such agency shall include with such statement

a report in which any material weaknesses in the

agency’s systems of internal accounting and administrative control are identified and the plans and schedule for correcting any such weakness are described.

‘‘(5) The statements and reports required by this

subsection shall be signed by the head of each executive agency and transmitted to the President and the

Congress. Such statements and reports shall also be

made available to the public, except that, in the case

of any such statement or report containing information which is—

‘‘(A) specifically prohibited from disclosure by any provision of law; or

‘‘(B) specifically required by Executive order to be kept

secret in the interest of national defense or the conduct of

foreign affairs, such information shall be deleted prior to

the report or statement being made available to the public.’’.

SEC. 3. Section 201 of the Budget and Accounting Act, 1921 (31

U.S.C. 11), is amended by adding at the end thereof the following

new subsection:

‘‘(k)(1) The President shall include in the supporting detail

accompanying each Budget submitted on or after January 1,

1983, a separate statement, with respect to each department

and establishment, of the amounts of appropriations requested

by the President for the Office of Inspector General, if any, of

each such establishment or department.

‘‘(2) At the request of 8 committee of the Congress, additional

information concerning the amount of appropriations originally

requested by any office of Inspector General, shall be submitted to such committee.’’.

SEC. 4. Section 113(b) of the Accounting and Auditing Act of 1950

(31 U.S.C. 66a(b)), is amended by adding at the end thereof the following new sentence: ‘‘Each annual statement prepared pursuant

to subsection (d) of this section shall include a separate report on

whether the agency’s accounting system conforms to the principles,

standards, and related requirements prescribed by the Comptroller

General under section 112 of this Act.’’. (31 U.S.C. 66a).

Approved September 8, 1982.
504

Debt Collection Act of 1982

Public Law 97–365

(96 Stat. 1749)

AN ACT To increase the efficiency of Government-wide efforts to collect debts owed

The United States and to provide additional procedures for the collection of debts

owed the United States.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled, That this Act

maybe cited as the ‘‘Debt Collection Act of 1982’’. (5 U.S.C. 5514

note).

AMENDMENTS TO THE PRIVACY ACT

SEC. 2. (a) Section 552a(b) of title 5, United States Code, is

amended—

(1) by striking out ‘‘or’’ at the end of paragraph (10);

(2) by striking out the period at the end of paragraph (11)

and inserting in lieu thereof ‘‘; or’’; and

(3) by adding at the end thereof the following new paragraph:

‘‘(12) to a consumer reporting agency in accordance with section 3(d) of the Federal Claims Collection Act of 1966 (31

U.S.C. 952(d)).’’.

(b) Section 552a(m) of such title is amended—

(1) by inserting ‘‘(1)’’ immediately after ‘‘(m)’’; and

(2) by adding at the end thereof the following new paragraph:

‘‘(2) A consumer reporting agency to which a record is disclosed under section 3(d) of the Federal Claims Collection Act

of 1966 (31 U.S.C. 952(d)) shall not be considered a contractor

for the purposes of this section.’’.

AMENDMENT TO THE FEDERAL CLAIMS COLLECTION ACT OF 1966

SEC. 3. Section 3 of the Federal Claims Collection Act of 1966 (31

U.S.C. 952) is amended by adding at the end thereof the following

new subsection:

‘‘(d)(1) Whenever the head of an agency attempts to collect a

claim of the United States under subsection (a) of this section, or

under any other statutory authority except the Internal Revenue

Code of 1954, the head of the agency may disclose (26 U.S.C. 1 et

seq.) to a consumer reporting agency information from a system of

records that an individual is responsible for a claim if—

‘‘(A) the notice for the system of records required by section

552a(e)(4) of title 5, United States Code, indicates that information in the system may be disclosed to a consumer reporting

agency;
505 Sec. 3 DEBT COLLECTION ACT OF 1982

‘‘(B) the head of the agency has reviewed the claim and determined that such claim is valid and overdue;

‘‘(C) the head of the agency has sent a written notice to the

individual informing such individual*

‘‘(i) that the payment of the claim is overdue;

‘‘(ii) that the agency intends to disclose to a consumer reporting agency, within not less than sixty days after sending such notice, that the individual is responsible for such

claim;

‘‘(iii) of the specific information intended to be disclosed

to the consumer reporting agency; and

‘‘(iv) of the rights of such individual to a full explanation

of the claim, to dispute any information in the records of

the agency concerning the claim, and to administrative appeal or review with respect to the claim;’’

‘‘(D) such individual has not—

‘‘(i) repaid or agreed to repay such claim under a repayment plan which is agreeable to the head of the agency

and is in a written form signed by such individual; or

‘‘(ii) filed for review of such claim under paragraph (2)

of this subsection;

‘‘(E) the agency has established procedures (i) for promptly

disclosing, to each consumer reporting agency to which the

original disclosure was made, any substantial change in the

status or amount of the claim, (ii) for promptly verifying or correcting, as appropriate, information concerning the claim upon

the request of any such consumer reporting agency for verification of any or all information so disclosed, and (iii) for obtaining satisfactory assurances from each such consumer reporting

agency concerning compliance by such consumer reporting

agency with the Fair Credit Reporting Act (15 U.S.C. 1681 et

seq.) and any other Federal law governing the provision of

consumer credit information; and

‘‘(F) the information disclosed to the consumer reporting

agency is limited to (i) the name, address, taxpayer identification number, and other information necessary to establish the

identity of the individual, (ii) the amount, status, and history

of the claim, and (iii) the agency or program under which the

claim arose.

‘‘(2) Prior to a disclosure to any consumer reporting agency under

paragraph (1) of this subsection and at such other times as may be

permitted by law, the head of the agency shall, upon request of any

individual alleged by the agency to be responsible for the claim,

provide for the review of the obligation of such individual, including an opportunity for reconsideration of the initial decision concerning the claim.

‘‘(3) If an agency does not have a current address for an individual for the purpose of sending the notice required by paragraph

(1)(C), the agency shall take reasonable action to locate the individual prior to disclosing any information to a consumer reporting

agency under paragraph (1).

‘‘(4) For purposes of this subsection—

‘‘(A) the term ‘consumer reporting agency’ means—
Sec. 4 DEBT COLLECTION ACT OF 1982 506

‘‘(i) a consumer reporting agency within the meaning of

section 603(f) of the Fair Credit Reporting Act (15 U.E;.C.

1681a(f)); or

‘‘(ii) any person who, for monetary fees, dues, or on a cooperative basis, regularly engages in whole or in part in

the practice of (I) obtaining credit or other information on

consumers for the purpose of furnishing such information

to consumer reporting agencies (as defined in clause (i) of

this subparagraph), or (II) serving as a marketing agent

under arrangements enabling third parties to obtain such

information from such reporting agencies;

‘‘(B) the term ‘system of records’ has the meaning given such

term under section 552a(a)(5) of title 5, United States Code;

and

‘‘(C) the term ‘head of an agency’ includes a designee of the

head of an agency.’’.

REQUIREMENT THAT APPLICANT FURNISH TAXPAYER IDENTIFYING

NUMBER

NUMBER

SEC. 4. (a) IN GENERAL.—Each Federal agency administering an

included Federal loan program shall require any person applying

for a loan under such program to furnish such person’s taxpayer

identifying number. (26 U.S.C. 6103 note).

(b) DEFINITIONS.—For purposes of this section—

(1) INCLUDED FEDERAL LOAN PROGRAM.—The term ‘‘included

Federal loan program’’ has the meaning given to such term by

subparagraph (C) of section 6103(l)(3) of the Internal Revenue

Code of 1954 (as added by section 7 of this Act).

(2) TAXPAYER IDENTIFYING NUMBER.—The term ‘‘taxpayer

identifying number’’ has the meaning given to such term by

section 6109 of such Code. (26 U.S.C. 6109).

SALARY OFFSET

SEC. 5. (a) Subsection (a) of section 5514 of title 5, United States

Code, is amended to read as follows:

‘‘(a)(1) When the head of an agency or his designee determines

that an employee, member of the Armed Forces or Reserve of the

Armed Forces, is indebted to the United States for debts to which

the United States is entitled to be repaid at the time of the determination by the head of an agency or his designee, or is notified

of such a debt by the head of another agency or his designee the

amount of indebtedness may be collected in monthly installments,

or at officially established pay intervals, by deduction from the current pay account of the individual. The deductions may be made

from basic pay, special pay, incentive pay, retired pay, retainer

pay, or, in the case of an individual not entitled to basic pay, other

authorized pay. The amount deducted for any period may not exceed 15 percent of disposable pay, except that a greater percentage

may be deducted upon the written consent of the individual involved. If the individual retires or resigns, or if his employment or

period of active duty otherwise ends, before collection of the

amount of the indebtedness is completed, deduction shall be made
507 Sec. 5 DEBT COLLECTION ACT OF 1982

from subsequent payments of any nature due the individual from

the agency concerned.

‘‘(2) Except as provided in paragraph (3) of this subsection, prior

to initiating any proceedings under paragraph (1) of this subsection

to collect any indebtedness of an individual, the head of the agency

holding the debt or his designee, shall provide the individual

with—

‘‘(A) a minimum of thirty days written notice, informing such

individual of the nature and amount of the indebtedness determined by such agency to be due, the intention of the agency

to initiate proceedings to collect the debt through deductions

from pay, and an explanation of the rights of the individual

under this subsection;

‘‘(B) an opportunity to inspect and copy Government records

relating to the debt;

‘‘(C) an opportunity to enter into a written agreement with

the agency, under terms agreeable to the head of the agency

or his designee, to establish a schedule for the repayment of

the debt; and

‘‘(D) an opportunity for a hearing on the determination of the

agency concerning the existence or the amount of the debt, and

in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to subparagraph (C), concerning the terms of the repayment schedule. A hearing, described in subparagraph (D), shall be provided if the individual, on or before the fifteenth day following

receipt of the notice described in subparagraph (A), and in accordance with such procedures as the head of the agency may

prescribe, files a petition requesting such a hearing. The timely

filing of a petition for hearing shall stay the commencement of

collection proceedings. A hearing under subparagraph (D) may

not be conducted by an individual under the supervision or

control of the head of the agency, except that nothing in this

sentence shall be construed to prohibit the appointment of an

administrative law judge. The hearing official shall issue a

final decision at the earliest practicable date but not later than

sixty days after the filing of the petition requesting the hearing.

‘‘(3) the collection of any amount under this section shall be in

accordance with the standards promulgated pursuant to the Federal Claims Collection Act of 1966 (31 U.S.C. 951 et seq.) or in accordance with any other statutory authority for the collection of

claims of the United States or any agency thereof.

‘‘(4) For purposes of this subsection—

‘‘(A) ‘disposable pay’ means that part of pay of any individual

remaining after the deduction from those earnings of any

amounts required by law to be withheld; and

‘‘(B) ‘agency’ includes the United States Postal Service and

the Postal Rate Commission.’’.

(b) Section 5514(b) of title 5, United States Code, is amended by

inserting ‘‘(1)’’ immediately after ‘‘(b)’’ and by adding at the end

thereof the following new paragraph:

‘‘(2) For purposes of section 7117(a) of this title, no regulation prescribed to carry out subsection (a)(2) of this section
Sec. 6 DEBT COLLECTION ACT OF 1982 508

shall be considered to be a Government-wide rule or regulation.’’.

(c) The section heading of section 5514 of title 5, United States

Code, is amended to read as follows:

‘‘§ 5514. Installment deduction for indebtedness to the United States’’

PROTECTION OF FEDERAL DEBT COLLECTORS

SEC. 6. Section 1114 of title 18, United States Code, is amended—

(1) by striking out ‘‘or’’ before ‘‘any attorney’’; and

(2) by inserting before ‘‘shall be punished’’ a comma and the

following: ‘‘or any officer or employee of the United States or

any agency thereof designated to collect or compromise a Federal claim in accordance with the Federal Claims Collection

Act of 1966 (31 U.S.C. 951 et seq.) or other statutory authority’’.

SCREENING POTENTIAL DEBTORS

SEC. 7. (a) DISCLOSURE TO FEDERAL LENDING AGENCY THAT APPLICANT HAS TAX DELINQUENT ACCOUNT.—Paragraph (3) of section

6103(l) of the Internal Revenue Code of 1954 is amended to read

as follows: (26 U.S.C. 6103).

(3) DISCLOSURE THAT APPLICANT FOR FEDERAL LOAN HAS TAX

DELINQUENT ACCOUNT.—

‘‘(A) IN GENERAL.—Upon written request, the Secretary

may disclose to the head of the Federal agency administering any included Federal loan program whether or not an

applicant for a loan under such program has a tax delinquent account.

‘‘(B) RESTRICTION ON DISCLOSURE. Any disclosure under

subparagraph (A) shall be made only for the purpose of,

and to the extent necessary in, determining the credit worthiness of the applicant for the loan in question.

‘‘(C) INCLUDED FEDERAL LOAN PROGRAM DEFINED. For

purposes of this paragraph, the term ‘included Federal

loan program’ means any program—

‘‘(i) under which the United States or a Federal

agency makes, guarantees, or insures loans, and

‘‘(ii) with respect to which there is in effect a determination by the Director of the Office of Management

and Budget (which has been published in the Federal

Register) that the application of this paragraph to

such program will substantially prevent or reduce future delinquencies under such program.’’

(b) TECHNICAL AMENDMENTS.— (1) Clause (i) of section 6103(p)(3)(C) of such Code is amended by striking out ‘‘(1) (3) or (6) and inserting in lieu thereof

‘‘(1)(6)’’.

(2) Paragraph (4) of section 6103(p) of such Code is amended—

(A) by striking out ‘‘(1) (1), (2),’’ in the matter preceding

subparagraph (A) and inserting in lieu thereof ‘‘(1) (1), (2),
509 Sec. 8 DEBT COLLECTION ACT OF 1982

(B) by striking out ‘‘(1) (3), (6),’’ and inserting in lieu

thereof ‘‘(1)(6),’’, and

(C) by striking out ‘‘(1) (1), (2), or (5), or (o)(1), the commission described in subsection (1)(3)’’ in subparagraph

(F)(ii) and inserting in lieu thereof ‘‘(1) (1), (2), (3), or (5),

or (o)(1),’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply in the case of loan applications made after September

30, 1982. (26 U.S.C. 6103 note).

DISCLOSURE OF MAILING ADDRESS TO THIRD PARTIES FOR PURPOSES OF

COLLECTING FEDERAL CLAIMS

SEC. 8. (a) Paragraph (2) of section 6103(m) of the Internal Revenue Code of 1954 (relating to disclosure of taxpayer identity information) (26 U.S.C. 6103) is amended to read as follows:

‘‘(2) FEDERAL CLAIMS.—

‘‘(A) IN GENERAL. Except as provided in subparagraph

(B), the Secretary may, upon written request, disclose the

mailing address of a taxpayer for use by officers, employees, or agents of a Federal agency for purposes of locating

such taxpayer to collect or compromise a Federal claim

against the taxpayer in accordance with section 3 of the

Federal Claims Collection Act of 1966 (31 U.S.C. 952).

‘‘(B) SPECIAL RULE FOR CONSUMER REPORTING AGENCY. In

the case of an agent of a Federal agency which is a

consumer reporting agency (within the meaning of section

603(f) of the Fair Credit Reporting Act (15 U.S.C. l68la(f))),

the mailing address of a taxpayer may be disclosed to such

agent under subparagraph (A) only for the purpose of allowing such agent to prepare a commercial credit report on

the taxpayer for use by such Federal agency in accordance

with section 3 of the Federal Claims Collection Act of 1966

(31 U.S.C. 952).’’

(b) SAFEGUARDS.—Paragraph (4) of section 6103(p) (26 U.S.C.

6103) of such Code (relating to safeguards) is amended by adding

at the end thereof the following new sentence: ‘‘In the case of any

agency which receives any mailing address under subsection (m) (2)

or (4) and which discloses any such mailing address to any agent,

this paragraph shall apply to such agency and each such agent except that, in the case of an agent, any report to the Secretary or

other action with respect to the Secretary shall be made or taken

through such agency).’’

(c) TECHNICAL AMENDMENTS.—

(1) Paragraph (3) of section 6103(a) of such Code is amended

by striking out ‘‘subsection (m)(4)B’’ and inserting in lieu thereof ‘‘paragraph (2) or (4)(B) of subsection (m)’’.

(2) Paragraph (2) of section 7213(a) (26 U.S.C. 7213) of such

Code (relating to unauthorized disclosure of information) is

amended by striking out ‘‘(m)(4)’’ and inserting in lieu thereof

‘‘(m) (2) or (4)’’.

(d) EFFECTIVE DATE. (26 U.S.C. 6103)—The amendments made

by this section shall take effect on the date of the enactment of this

Act.
Sec. 9 DEBT COLLECTION ACT OF 1982 510

(e) Except as otherwise provided (5 U.S.C. 5514 note) in section

4 or 7 or the foregoing provisions of this section, nothing in this

Act (or in the amendments made by this Act) shall apply to claims

or indebtedness arising under, or amounts payable under, the Internal Revenue Code of 1954, (26 U.S.C. 1 et seq. 42 U.S.C. 1305)

the Social Security Act, or the tariff laws of the United States.

STATUTE OF LIMITATIONS WITH RESPECT TO ADMINISTRATIVE OFFSETS

SEC. 9. Section 2415 of title 28, United States Code, is amended

by adding at the end thereof the following new subsection:

‘‘(i) The provisions of this section shall not prevent

the United States or an officer or agency thereof from

collecting any claim of the United States by means of

administrative offset, in accordance with section 5 of

the Federal Claims Collection Act of 1966.’’.

ADMINISTRATIVE OFFSETS

SEC. 10. The Federal Claims Collection Act of 1966 (31 U.S.C.

951 et seq.) is amended (31 U.S.C. 951 note)— (1) by redesignating section 5 as section 6; and

(2) by adding the following new section 5:

‘‘SEC. 5. (a) The head of an agency or his designee may, after attempting to collect a claim from a Person under section 3(a) of this

Act, collect the claim by means of administrative offset, except that

no claim under this Act that has been outstanding for more than

ten years may be collected by means of administrative offset.

‘‘(b) The head of an agency or his designee may not collect any

claim by administrative offset authorized by subsection (a) unless

the agency head has prescribed regulations for the exercise of such

administrative offset, (31 U.S.C. 954) based on the best interests

of the United States, the likelihood of collecting a claim by administrative offset, and, with respect to the collection of claims by

means of administrative offset after the six-year period provided in

section 2415 of title 28, United States Code, has expired for bringing an action on such a claim, the cost effectiveness of leaving such

claim unresolved for more than six years.

‘‘(c) Prior to collecting any claim through administrative offset,

the head of the agency or his designee shall provide the debtor

with—

‘‘(1) written notification of the nature and amount of the

claim, the intention of the agency to collect the claim through

administrative offset, and an explanation of the rights of the

debtor under this section;

‘‘(2) an opportunity to inspect and copy the records of the

agency with respect to the claim;

‘‘(3) an opportunity for the review, within the agency, of the

determination of the agency with respect to the claim; and

‘‘(4) an opportunity to enter into a written agreement with

the head of the agency or his designee, for the repayment of

the amount of the claim.

‘‘(d) The provisions of this section shall not apply in any case in

which a statute either explicitly provides for or prohibits the collection through administrative offset of the claim or type of claim involved.
511 Sec. 11 DEBT COLLECTION ACT OF 1982

‘‘(e) For purposes of this section—

‘‘(1) the term ‘administrative offset’ means the withholding of

money payable by the United States to or held by the United

States on behalf of a person to satisfy a debt owed the United

States by that person; and

‘‘(2) the term ‘person’ does not include any agency of the

United States, or of any State or local government.’’.

INTEREST AND PENALTY ON INDEBTEDNESS TO THE UNITED STATES

SEC. 11. Section 3 of the Federal Claims Collection Act of 1966

(31 U.S.C. 952) (as amended by section 3 of this Act) is further

amended by adding at the end thereof the following new subsection:

‘‘(e)(1) Except as provided in paragraph (3), the head of an

agency or his designee shall charge a minimum annual rate of

interest on outstanding debts on claims owed by persons that

is equal to the average investment rate for the Treasury tax

and loan accounts for the twelve-month period ending on September 30 of each year, rounded to the nearest whole per centum. The Secretary of the Treasury or his designee shall publish such rate each year not later than October 31 and such

rate shall become effective on the first day of the next calendar

quarter. The Secretary of the Treasury may revise such rate

quarterly if the average investment rate for the twelve-month

period ending at the close of that calendar quarter, rounded to

the nearest whole per centum, is greater or less than the existing published rate by 2 per centum. For purposes of this paragraph, ‘calendar quarter’ means any three month period beginning on January 1, April 1, July 1, or October 1.

‘‘(2) Except as provided in paragraph (3), the head of an

agency or his designee shall, with respect to claims owed by

persons—

‘‘(A) assess charges to cover the costs of processing and

handling delinquent claims, and

‘‘(B) assess a penalty charge, not to exceed 6 per centum

per annum, for failure to pay any portion of a debt more

than ninety days past due.

‘‘(3) Interest and charges under paragraphs (1) and (2) shall

not apply if an applicable statute, a regulation required by

statute, a loan agreement, or a contract either prohibit the

charging of interest or charges, or explicitly fix interest or

charges that apply to claims involved. The head of an agency

or his designee may promulgate regulations identifying circumstances appropriate to waive collection of interest and

charges in conformity with such standards as may be promulgated jointly by the Attorney General and the Comptroller

General. Waivers in accordance with such regulations shall

constitute compliance with the requirements of paragraphs (1)

and (2).

‘‘(4) This subsection shall not apply to any claim under a contract which is executed before the effective date of this subsection and which is in effect on that date.

‘‘(5) Subject to paragraph (6), interest under paragraph (1)

shall accrue’’
Sec. 12 DEBT COLLECTION ACT OF 1982 512

‘‘(A) except as provided in subparagraph (B), from the

date on which notification of the amount due on the claim

is first mailed to the debtor (using the most current address of such debtor that is available to the head of the

agency or his designee; or

‘‘(B) if such notification was first mailed before the date

of the enactment of the Debt Collection Act of 1982, from

the date on which such notification is first mailed after

such date of enactment.

The rate of interest to be charged on a claim under paragraph

(1) shall be the rate in effect on the date from which interest accrues on the claim under subparagraph (A) or (B), and shall remain

fixed at that rate for the duration of the indebtedness.

‘‘(6) Interest under paragraph (1) shall not be charged if the

amount due on the claim is paid within thirty days after the

date from which interest accrues under paragraph (5). The

head of an agency may extend such thirty-day period.

‘‘(7) Interest under this subsection shall not accrue on any

charges assessed pursuant to paragraph (2) of this subsection.

‘‘(8) For purposes of this subsection, the term ‘person’ does

not include any agency of the United States or any State or

local government.’’

REPORT ON AGENCY DEBT COLLECTION ACTIVITIES

SEC. 12. (a) The Director of the Office of Management and Budget, (31 U.S.C. 955) in consultation with the Secretary of the Treasury and Comptroller General of the United States, shall establish

regulations requiring each agency with outstanding debts to prepare and transmit to the Director and the Secretary of the Treasury at least once each year a report which summarizes the status

of loans and accounts receivable managed by each agency. The report shall contain information regarding—

(1) the total amount of loans and accounts receivable owed

to the agency and when the funds owed to the agency are due

to be repaid;

(2) the total amount of receivables and number of claims that

are at least thirty days past due;

(3) the total amount written off as uncollectible, actual, and

allowed for;

(4) the rate of interest charged for overdue debts and the

amount of interest charged and collected on debts;

(5) the total number of claims and total amount collected

(6) the number of claims and the total amount of claims referred to the Department of Justice for settlement and the

number of claims and the total amount of claims settled by

such Department;

(7) for each program or activity administered by the agency,

the information described in clauses (1) through (6) of this subsection; and

(8) such other information as the Director finds necessary in

order to determine whether the agency is engaging in aggressive action to collect the claims of the agency.

(b) The Director shall analyze the reports received by each agency under subsection (a) and shall report annually to the Congress
513 Sec. 13 DEBT COLLECTION ACT OF 1982

This law has been amended by Public Law 103–272, sec. 7(b), July 5, 1994, 108 Stat. 1393.

on the management of agency debt collection activities, including

the information provided to the Director under subsection (a)

above.

CONTRACTS FOR COLLECTION SERVICES

SEC. 13. (a) Section 3617 of the Revised Statutes (31 U.S.C. 484)

is amended by striking out ‘‘section 487’’ and inserting in lieu

thereof ‘‘sections 487 and 952(g)(2)’’.

(b) Section 3 of the Federal Claims Collection Act of 1966 (31

U.S.C. 952) (as amended by sections 3 and 11 of this Act) is further

amended by adding at the end thereof the following new subsections:

‘‘(f)(1) Notwithstanding the provisions of any other law governing the collection of claims owed the United States, except

for collections of unpaid or underpaid debts under the Internal

Revenue Code of 1954, the head of an agency or his designee

may enter into a contract with any person or organization,

under such terms and conditions as the head of the agency or

his designee considers appropriate, for collection services to recover indebtedness owed to the United States. Any such contract shall include provisions specifying that the head of the

agency or his designee retains the authority to resolve disputes, compromise claims, terminate collection action, and

refer the matter to the Attorney General to initiate legal action, and that the contractor shall be subject to section 552a

of title 5, United States Code, to the extent provided in subsection (m) of that section, and shall be subject to Federal and

State laws and regulations pertaining to debt collection practices, including the Fair Debt Collection Practices Act (15

U.S.C. 1692 et seq.).

‘‘(2) Notwithstanding section 3617 of the Revised Statutes

(31 U.S.C. 484), the head of an agency or his designee may provide, as part of a contract described in paragraph (1), that appropriate fees charged by a contractor to recover indebtedness

owed to the United States may be payable from the amount

collected by such contractor.

‘‘(3) Any such contract shall be effective only to such extent

and in such amounts as are provided in advance appropriation

Acts.

‘‘(g) For purposes of this Act, the term ‘claim’ includes

amounts owing on account of loans insured or guaranteed by

the United States and all other amounts due the United States

from fees, duties, leases, rents, royalties, services, sales of real

or personal property, overpayments, fines, penalties, damages,

interest, taxes, forfeitures, and other sources.’’.

Approved October 25, 1982.
514

SINGLE AUDIT ACT OF 1984

Public Law 98–502

(98 Stat. 2327)

AN ACT To establish uniform audit requirements for State and local governments

receiving Federal financial assistance

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SHORT TITLE; PURPOSE

Section 1. (a) This Act may be cited as the ‘‘Single Audit Act of

1984’’. (31 U.S.C. 7501 note).

(b) It is the purpose of this Act—

(1) to improve the financial management of State and local

governments with respect to Federal financial assistance programs;

(2) to establish uniform requirements for audits of Federal financial assistance provided to State and local governments;

(3) to promote the efficient and effective use of audit resources; and

(4) to ensure that Federal departments and agencies, to the

maximum extent practicable, rely upon and use audit work

done pursuant to chapter 75 of title 31, United States Code (as

added by this Act).

AMENDMENT TO TITLE 31, UNITED STATES CODE

SEC. 2. (a) Subtitle V of title 31, United States Code, is amended

by adding at the end thereof the following new chapter:

‘‘CHAPTER 75—REQUIREMENTS FOR SINGLE AUDITS

‘‘Sec.

‘‘7501. Definitions.

‘‘7502. Audit requirements; exemptions.

‘‘7503. Relation to other audit requirement.

‘‘7504. Cognizant agency responsibilities.

‘‘7505. Regulations.

‘‘7506. Monitoring responsibilities of the Comptroller General.

‘‘7537. Effective date; report.

‘‘§ 7501. Definitions (31 U.S.C. 7501)

‘‘As used in this chapter, the term—

‘‘(1) ‘cognizant agency’ means a Federal agency which is assigned by the Director with the responsibility for implementing

the requirements of this chapter with respect to a particular

State or local government.’’
515 Sec. 2 SINGLE AUDIT ACT OF 1984

‘‘(2) ‘Comptroller General’ means the Comptroller General of

the United States.

‘‘(3) ‘Director’ means the Director of the Office of Management and Budget.

‘‘(4) ‘Federal financial assistance’ means assistance provided

by a Federal agency in the form of grants, contracts, loans.

loan guarantees, property, cooperative agreements, interest

subsidies, insurance, or direct appropriations, but does not include direct Federal cash assistance to individuals

‘‘(5) ‘Federal agency’ has the same meaning as the term

‘agency’ in section 551(l) of title 5, United States Code.

‘‘(6) ‘generally accepted accounting principles’ has the meaning specified in the generally accepted government auditing

standards.

‘‘(7) ‘generally accepted government auditing standards’

means the standards for audit of governmental organizations,

programs, activities, and functions, issued by the Comptroller

General.

‘‘(8) ‘independent auditor’ means

‘‘(A) an external State or local government auditor who

meets the independence standards included in generally

accepted government auditing standards, or

‘‘(B) a public accountant who meets such independence

standards.

‘‘(9) ‘internal controls’ means the plan of organization and

methods and procedures adopted by management to ensure

that—

‘‘(A) resource use is consistent with laws, regulations,

and policies;

‘‘(B) resources are safeguarded against waste, loss, and

misuse; and

‘‘(C) reliable data are obtained, maintained, and fairly

disclosed in reports.

‘‘(10) ‘Indian tribe’ means any Indian tribe, band, nation, or

other organized group or community, including any Alaskan

Native village or regional or village corporation (as defined in,

or established under, the Alaskan Native Claims Settlement

Act) that is recognized by the United States as eligible for the

special programs and services provided by the United States to

Indians because of their status as Indians.

‘‘(11) ‘local government’ means any unit of local government

within a State, including a county, borough, municipality, city,

town, township, parish, local public authority, special district,

school district, intrastate district, council of governments, and

any other instrumentality of local government.

‘‘(12) ‘major Federal assistance program’ means any program

for which total expenditures of Federal financial assistance by

the State or local government during the applicable year exceed

‘‘(A) $20,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $7,000,000,000;

‘‘(B) $19,000,000 in the case of a State or local government for which such total expenditures for all programs
Sec. 2 SINGLE AUDIT ACT OF 1984 516

exceed $6,000,000,000 but are less than or equal to

$7,000,000,000;

‘‘(C) $16,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $5,000,000,000 but are less than or equal to

$6,000,000,000;

‘‘(D) $13,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $4,000,000,000 but are less than or equal to

$5,000,000,000;

‘‘(E) $10,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $3,000,000,000 but are less than or equal to

$4,000,000,000;

‘‘(F) $7,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $2,000,000,000 but are less than or equal to

$3,000,000,000;

‘‘(G) $4,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $1,000,000,000 but are less than or equal to

$2,000,000,000;

‘‘(H) $3,000,000 in the case of a State or local government for which such total expenditures for all programs

exceed $100,000,000 but are less than or equal to

$1,000,000,000; and

‘‘(I) the larger of (i) $300,000, or (ii) 3 percent of such

total expenditures for all programs, in the case of a State

or local government for which such total expenditures for

all programs exceed $100,000 but are less than or equal to

$100,000,000.

‘‘(13) ‘public accountants’ means those individuals who meet

the qualification standards included in generally accepted government auditing standards for personnel performing government audits.

‘‘(14) ‘State’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of

the Northern Mariana Islands, and the Trust Territory of the

Pacific Islands, any instrumentality thereof, any multi-State,

regional, or interstate entity which has governmental functions, and any Indian tribe.

‘‘(15) ‘subrecipient’ means any person or government department, agency, or establishment that receives Federal financial

assistance through a State or local government, but does not

include an individual that receives such assistance.

SECTION 7502. Audit requirements; exemptions (31 U.S.C. 7502)

‘‘(a)(1)(A) Each State and local government which receives a total

amount of Federal financial assistance equal to or in excess of

$100,000 in any fiscal year of such government shall have an audit

made for such fiscal year in accordance with the requirements of

this chapter and the requirements of the regulations prescribed

pursuant to section 7505 of this title.
517 Sec. 2 SINGLE AUDIT ACT OF 1984

‘‘(B) Each State and local government that receives a total

amount of Federal financial assistance which is equal to or in excess of $25,000 but less than $100,000 in any fiscal year of such

government shall—

‘‘(i) have an audit made for such fiscal year in accordance

with the requirements of this chapter and the requirements of

the regulations prescribed pursuant to section 7505 of this

title; or

‘‘(ii) comply with any applicable requirements concerning financial or financial and compliance audits contained in Federal statutes and regulations governing programs under which

such Federal financial assistance is provided to that government.

‘‘(C) Each State and local government that receives a total

amount of Federal financial assistance which is less than $25,000

in any fiscal year of such government shall be exempt for such fiscal year from compliance with

‘‘(i) the audit requirements of this chapter; and

‘‘(ii) any applicable requirements concerning financial or financial and compliance audits contained in Federal statutes

and regulations governing programs under which such Federal

financial assistance is provided to that government.

The provisions of clause (ii) of this subparagraph do not exempt a

State or local government from compliance with any provision of a

Federal statute or regulation that requires such government to

maintain records concerning Federal financial assistance provided

to such government or that permits a Federal agency or the Comptroller General access to such records.

‘‘(2) For purposes of this section, a State or local government

shall be considered to receive Federal financial assistance whether

such assistance is received directly from a Federal agency or indirectly through another State or local government.

‘‘(b)(1) Except as provided in paragraphs (2) and (3), audits conducted pursuant to this chapter shall be conducted annually.

‘‘(2) If a State or local government is required—

‘‘(A) by constitution or statute, as in effect on the date of enactment of this chapter, or

‘‘(B) by administrative rules, regulations, guidelines, standards, or policies, as in effect on such date,

to conduct its audits less frequently than annually, the cognizant

agency for such government shall, upon request of such government, permit the government to conduct its audits pursuant to this

chapter biennially, except as provided in paragraph (3). Such audits shall cover both years within the biennial period.

‘‘(3) Any State or local government that is permitted, under

clause (B) of paragraph (2), to conduct its audits pursuant to this

chapter biennially by reason of the requirements of a rule, regulation, guideline, standard, or policy, shall, for any of its fiscal years

beginning after December 31, 1986, conduct such audits annually

unless such State or local government codifies a requirement for biennial audits in its constitution or statutes by January 1, 1987. Audits conducted biennially under the provisions of this paragraph

shall cover both years within the biennial period.’’
Sec. 2 SINGLE AUDIT ACT OF 1984 518

(c) Each audit conducted pursuant to subsection (a) shall be conducted by an independent auditor in accordance with generally accepted government auditing standards, except that, for the purposes of this chapter, such standards shall not be construed to require economy and efficiency audits, program results audits, or program evaluations.

‘‘(d)(1) Each audit conducted pursuant to subsection (a) for any

fiscal year shall cover the entire State or local government’s operations except that, at the option of such government—

‘‘(A) such audit may, except as provided in paragraph (5),

cover only each department, agency, or establishment which

received, expended, or otherwise administered Federal financial assistance during such fiscal year; and

‘‘(B) such audit may exclude public hospitals and public colleges and universities.

‘‘(2) Each such audit shall encompass the entirety of the financial

operations of such government or of such department, agency, or

establishment, whichever is applicable, and shall determine and report whether—

‘‘(A)(i) the financial statements of the government, department, agency, or establishment present fairly its financial position and the results of its financial operations in accordance

with generally accepted accounting principles; and

‘‘(ii) the government, department, agency, or establishment

has complied with laws and regulations that may have a material effect upon the financial statements;

‘‘(B) the government, department, agency, or establishment

has internal control systems to provide reasonable assurance

that it is managing Federal financial assistance programs in

compliance with applicable laws and regulations; and

‘‘(C) the government, department, agency, or establishment

has complied with laws and regulations that may have a material effect upon each major Federal assistance program. In

complying with the requirements of subparagraph (C), the

independent auditor shall select and test a representative

number of transactions from each major Federal assistance

program.

‘‘(3) Transactions selected from Federal assistance programs,

other than major Federal assistance programs, pursuant to the requirements of paragraphs (2)(A) and (2)(B) shall be tested for compliance with Federal laws and regulations that apply to such transactions. Any noncompliance found in such transactions by the independent auditor in making determinations required by this paragraph shall be reported.

‘‘(4) The number of transactions selected and tested under paragraphs (2) and (3), the selection and testing of such transactions,

and the determinations required by such paragraphs shall be based

on the professional judgment of the independent auditor.

‘‘(5) Each State or local government which, in any fiscal year of

such government, receives directly from the Department of the

Treasury a total of $25,000 or more under chapter 67 (31 U.S.C.

6701 et seq.) of this title (relating to general revenue sharing) and

which is required to conduct an audit pursuant to this chapter for
519 Sec. 2 SINGLE AUDIT ACT OF 1984

such fiscal year shall not have the option provided by paragraph

(1)(A) for such fiscal year.

‘‘(6) A series of audits of individual departments, agencies, and

establishments for the same fiscal year may be considered to be an

audit for the purpose of this chapter.

‘‘(e)(1) Each State and local government subject to the audit requirements of this chapter, which receives Federal financial assistance and provides $25,000 or more of such assistance in any fiscal

year to a subrecipient, shall

‘‘(A) if the subrecipient conducts an audit in accordance with

the requirements of this chapter, review such audit and ensure

that prompt and appropriate corrective action is taken on instances of material noncompliance with applicable laws and

regulations with respect to Federal financial assistance provided to the subrecipient by the State or local government; or

‘‘(B) if the subrecipient does not conduct an audit in accordance with the requirements of this chapter

‘‘(i) determine whether the expenditures of Federal financial

assistance provided to the subrecipient by the State or local

government are in accordance with applicable laws and regulations; and

‘‘(ii) ensure that prompt and appropriate corrective action is

taken on instances of material noncompliance with applicable

laws and regulations with respect to Federal financial assistance provided to the subrecipient by the State or local government.

‘‘(2) Each such State and local government shall require each

subrecipient of Federal assistance through such government to permit, as a condition of receiving funds from such assistance, the

independent auditor of the State or local government to have such

access to the subrecipient’s records and financial statements as

may be necessary for the State or local government to comply with

this chapter.

(f) The report made on any audit conducted pursuant to this section shall, within thirty days after completion of such report, be

transmitted to the appropriate Federal officials and made available

by the State or local government for public inspection.

(g) If an audit conducted pursuant to this section finds any material noncompliance with applicable laws and regulations by, or material weakness in the internal controls of, the State or local government with respect to the matters described in subsection (d)(2),

the State or local government shall submit to appropriate Federal

officials a plan for corrective action to eliminate such material noncompliance or weakness or a statement describing the reasons that

corrective action is not necessary. Such plan shall be consistent

with the audit resolution standard promulgated by the Comptroller

General (as part of the standards for internal controls in the Federal Government) pursuant to section 3512(b) of this title. (31

U.S.C. 3512).

‘‘§ 7503. Relation to other audit requirements (31 U.S.C.

7503)

‘‘(a) An audit conducted in accordance with this chapter shall be

in lieu of any financial or financial and compliance audit of an indi-
Sec. 2 SINGLE AUDIT ACT OF 1984 520

vidual Federal assistance program which a State or local government is required to conduct under any other Federal law or regulation. To the extent that such audit provides a Federal agency with

the information it requires to carry out its responsibilities under

Federal law or regulation, a Federal agency shall rely upon and use

that information and plan and conduct its own audits accordingly

in order to avoid a duplication of effort.

‘‘(b) Notwithstanding subsection (a), a Federal agency shall conduct any additional audits which are necessary to carry out its responsibilities under Federal law or regulation. The provisions of

this chapter do not authorize any State or local government (or

subrecipient thereof) to constrain, in any manner, such agency from

carrying out such additional audits.

‘‘(c) The provisions of this chapter do not limit the authority of

Federal agencies to conduct or enter into contracts for the conduct

of, audits and evaluations of Federal financial assistance programs,

nor limit the authority of any Federal agency Inspector General or

other Federal audit official.

‘‘(d) Subsection (a) shall apply to a State or local government

which conducts an audit in accordance with this chapter even

though it is not required by section 7502(a) to conduct such audit.

‘‘(e) A Federal agency that performs or contracts for audits in addition to the audits conducted by recipients pursuant to this chapter shall, consistent with other applicable law, arrange for funding

the cost of such additional audits. Such additional audits include

economy and efficiency audits, program results audits, and program evaluations.

‘‘SECTION 7504. Cognizant agency responsibilities (31 U.S.C.

7504)

‘‘(a) The Director shall designate cognizant agencies for audits conducted pursuant to this chapter.

‘‘(b) A cognizant agency shall—

‘‘(1) ensure that audits are made in a timely manner and

in accordance with the requirements of this chapter;

‘‘(2) ensure that the audit reports and corrective action

plans made pursuant to section 7502 of this title are transmitted to the appropriate Federal officials; and

‘‘(3)(A) coordinate, to the extent practicable, audits done

by or under contract with Federal agencies that are in addition to the audits conducted pursuant to this chapter;

and (B) ensure that such additional audits build upon the

audits conducted pursuant to this chapter.

‘‘SECTION 7505. Regulations (31 U.S.C. 7505)

‘‘(a) The Director, after consultation with the Comptroller

General and appropriate Federal, State, and local government

officials, shall prescribe policies, procedures, and guidelines to

implement this chapter. Each Federal agency shall promulgate

such amendments to its regulations as may be necessary to

conform such regulations to the requirements of this chapter

and of such policies, procedures, and guidelines.

‘‘(b)(1) The policies, procedures, and guidelines prescribed

pursuant to subsection (a) shall include criteria for determining the appropriate charges to programs of Federal financial

assistance for the cost of audits. Such criteria shall prohibit a
521 Sec. 2 SINGLE AUDIT ACT OF 1984

State or local government which is required to conduct an

audit pursuant to this chapter from charging to any such program (A) the cost of any financial or financial and compliance

audit which is not conducted in accordance with this chapter,

and (B) more than a reasonably proportionate share of the cost

of any such audit that is conducted in accordance with this

chapter.

‘‘(2) The criteria prescribed pursuant to paragraph (1) shall

not, in the absence of documentation demonstrating a higher

actual cost, permit (A) the ratio of (i) the total charges by a

government to Federal financial assistance programs for the

cost of audits performed pursuant to this chapter, to (ii) the

total cost of such audits, to exceed (B) the ratio of (i) total Federal financial assistance expended by such government during

the applicable fiscal year or years, to (ii) such government’s

total expenditures during such fiscal year or years.

‘‘(c) Such policies, procedures, and guidelines shall include

such provisions as may be necessary to ensure that small business concerns and business concerns owned and controlled by

socially and economically disadvantaged individuals will have

the opportunity to participate in the performance of contracts

awarded to fulfill the audit requirements of this chapter.

‘‘SECTION 7506. Monitoring responsibilities of the Comptroller

General (31 U.S.C. 7506)

‘‘The Comptroller General shall review provisions requiring financial or financial and compliance audits of recipients of Federal

assistance that are contained in bills and resolutions reported by

the committees of the Senate and the House of Representatives. If

the Comptroller General determines that a bill or resolution contains provisions that are inconsistent with the requirements of this

chapter, the Comptroller General shall, at the earliest practicable

date, notify in writing

‘‘(1) the committee that reported such bill or resolution; and

‘‘(2)(A) the Committee on Governmental Affairs of the Senate

(in the case of a bill or resolution reported by a committee of

the Senate); or

‘‘(B) the Committee on Government Operations of the House

of Representatives in the case of a bill or resolution reported

by a committee of the House of Representatives).

‘‘SECTION 7507. Effective date; report (31 U.S.C. 7507)

‘‘(a) This chapter shall apply to any State or local government with respect to any of its fiscal years which begin after

December 31, 1984.

‘‘(b) The Director, on or before May 1, 1987, and annually

thereafter, shall submit to each House of Congress a report on

operations under this chapter. Each such report shall specifically identify each Federal agency or State or local government

which is failing to comply with this chapter’’.

(b) The provisions of this Act shall not diminish or otherwise

affect the authority of the Tennessee Valley Authority to conduct its own audits of any matter involving funds disbursed by

the Tennessee Valley Authority.
Sec. 2 SINGLE AUDIT ACT OF 1984 522

This Act has not been amended as of December 31, 1995.

(c) The table of chapters for subtitle V of title 31, United

States Code, is amended by inserting after the item relating to

chapter 73 the following new item:

‘‘75. Requirements for Single Audits................7501’’

Approved October 19, 1984
523

Chief Financial Officers Act of 1990

Public Law 101–576

(104 Stat. 2838)

AN ACT To amend title 31, United States Code, to improve the general and financial management of the Federal Government by establishing a Chief Financial Officer of the United States within the Office of Management and Budget; by establishing a Chief Financial Officer within each executive department and within

each major executive agency; and by requiring the development of systems that

provide complete, accurate, and timely reporting of financial information.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

TITLE I—GENERAL PROVISIONS

SEC. 101. SHORT TITLE.

This Act may be cited as the ‘‘Chief Financial Officers Act of

1990’’.

SEC. 102. FINDINGS AND PURPOSES.

(a) FINDINGS.—The Congress finds the following:

(1) General management functions of the Office of Management and Budget need to be significantly enhanced to improve

the efficiency and effectiveness of the Federal Government.

(2) Financial management functions of the Office of Management and Budget need to be significantly enhanced to provide

overall direction and leadership in the development of a modern Federal financial management structure and associated

systems.

(3) Billions of dollars are lost each year through fraud,

waste, abuse, and mismanagement among the hundreds of programs in the Federal Government.

(4) These losses could be significantly decreased by improved

management, including improved central coordination of internal controls and financial accounting.

(5) The Federal Government is in great need of fundamental

reform in financial management requirements and practices as

financial management systems are obsolete and inefficient, and

do not provide complete, consistent, reliable, and timely information.

(6) Current financial reporting practices of the Federal Government do not accurately disclose the current and probable

future cost of operating and investment decisions, including

the future need for cash or other resources, do not permit adequate comparison of actual costs among executive agencies,

and do not provide the timely information required for efficient

management of programs.

(b) PURPOSES.—The purposes of this Act are the following:
Sec. 201 CHIEF FINANCIAL OFFICERS ACT OF 1990 524

(1) Bring more effective general and financial management

practices to the Federal Government through statutory provisions which would establish in the Office of Management and

Budget a Deputy Director for Management, establish an Office

of Federal Financial Management headed by a Controller, and

designate a Chief Financial Officer in each executive department and in each major executive agency in the Federal Government.

(2) Provide for improvement in each agency of the Federal

Government, of systems of accounting, financial management,

and internal controls to assure the issuance of reliable financial information and to deter fraud, waste, and abuse of Government resources.

(3) Provide for the production of complete, reliable, timely,

and consistent financial information for use by the executive

branch of the Government and the Congress in the financing,

management, and evaluation of Federal programs.

TITLE II—ESTABLISHMENT OF CHIEF FINANCIAL OFFICERS

SEC. 201. DEPUTY DIRECTOR FOR MANAGEMENT.

Section 502 of title 31, United States Code, as amended by this

Act, is amended—

(1) by redesignating subsections (c), (d), and (e), as amended

by this section, as subsections (d), (e), and (f); and

(2) by inserting after subsection (b) the following:

‘‘(c) The Office has a Deputy Director for Management appointed

by the President, by and with the advice and consent of the Senate.

The Deputy Director for Management shall be the chief official responsible for financial management in the United States Government.’’.

SEC. 202. FUNCTIONS OF DEPUTY DIRECTOR FOR MANAGEMENT.

(a) CLERICAL AMENDMENTS.—Sections 503 and 504 of title 31,

United States Code, are redesignated in order as sections 505 and

506, respectively.

(b) FUNCTIONS OF DEPUTY DIRECTOR FOR MANAGEMENT.—Subchapter I of chapter 5 of title 31, United States Code, is amended

by inserting after section 502 the following:

§ 503. Functions of Deputy Director for Management

‘‘(a) Subject to the direction and approval of the Director, the

Deputy Director for Management shall establish governmentwide

financial management policies for executive agencies and shall perform the following financial management functions:

‘‘(1) Perform all functions of the Director, including all functions delegated by the President to the Director, relating to financial management.

‘‘(2) Provide overall direction and leadership to the executive

branch on financial management matters by establishing financial management policies and requirements, and by monitoring the establishment and operation of Federal Government

financial management systems.

‘‘(3) Review agency budget requests for financial management systems and operations, and advise the Director on the
525 Sec. 202 CHIEF FINANCIAL OFFICERS ACT OF 1990

resources required to develop and effectively operate and maintain Federal Government financial management systems and

to correct major deficiencies in such systems.

‘‘(4) Review and, where appropriate, recommend to the Director changes to the budget and legislative proposals of agencies

to ensure that they are in accordance with financial management plans of the Office of Management and Budget.

‘‘(5) Monitor the financial execution of the budget in relation

to actual expenditures, including timely performance reports.

‘‘(6) Oversee, periodically review, and make recommendations to heads of agencies on the administrative structure of

agencies with respect to their financial management activities.

‘‘(7) Develop and maintain qualification standards for agency

Chief Financial Officers and for agency Deputy Chief Financial

Officers appointed under sections 901 and 903, respectively.

‘‘(8) Provide advice to agency heads with respect to the selection of agency Chief Financial Officers and Deputy Chief Financial Officers.

‘‘(9) Provide advice to agencies regarding the qualifications,

recruitment, performance, and retention of other financial

management personnel.

‘‘(10) Assess the overall adequacy of the professional qualifications and capabilities of financial management staffs

throughout the Government and make recommendations on

ways to correct problems which impair the capacity of those

staffs.

‘‘(11) Settle differences that arise among agencies regarding

the implementation of financial management policies.

‘‘(12) Chair the Chief Financial Officers Council established

by section 302 of the Chief Financial Officers Act of 1990.

‘‘(13) Communicate with the financial officers of State and

local governments, and foster the exchange with those officers

of information concerning financial management standards,

techniques, and processes.

‘‘(14) Issue such other policies and directives as may be necessary to carry out this section, and perform any other function

prescribed by the Director.

‘‘(b) Subject to the direction and approval of the Director, the

Deputy Director for Management shall establish general management policies for executive agencies and perform the following general management functions:

‘‘(1) Coordinate and supervise the general management functions of the Office of Management and Budget.

‘‘(2) Perform all functions of the Director, including all functions delegated by the President to the Director, relating to—

‘‘(A) managerial systems, including the systematic measurement of performance;

‘‘(B) procurement policy;

‘‘(C) grant, cooperative agreement, and assistance management;

‘‘(D) information and statistical policy;

‘‘(E) property management;

‘‘(F) human resources management;

‘‘(G) regulatory affairs; and
Sec. 203 CHIEF FINANCIAL OFFICERS ACT OF 1990 526

‘‘(H) other management functions, including organizational studies, long-range planning, program evaluation,

productivity improvement, and experimentation and demonstration programs.

‘‘(3) Provide complete, reliable, and timely information to the

President, the Congress, and the public regarding the management activities of the executive branch.

‘‘(4) Facilitate actions by the Congress and the executive

branch to improve the management of Federal Government operations and to remove impediments to effective administration.

‘‘(5) Provide leadership in management innovation,

through—

‘‘(A) experimentation, testing, and demonstration programs; and

‘‘(B) the adoption of modern management concepts and

technologies.

‘‘(6) Work with State and local governments to improve and

strengthen intergovernmental relations, and provide assistance

to such governments with respect to intergovernmental programs and cooperative arrangements.

‘‘(7) Review and, where appropriate, recommend to the Director changes to the budget and legislative proposals of agencies

to ensure that they respond to program evaluations by, and are

in accordance with general management plans of, the Office of

Management and Budget.

‘‘(8) Provide advice to agencies on the qualification, recruitment, performance, and retention of managerial personnel.

‘‘(9) perform any other functions prescribed by the Director.’’.

SEC. 203. OFFICE OF FEDERAL FINANCIAL MANAGEMENT.

(a) ESTABLISHMENT.—Subchapter I of chapter 5 of title 31, United States Code, as amended by this Act, is amended by inserting

after section 503 (as added by section 202 of this Act) the following:

‘‘§ 504. Office of Federal Financial Management

‘‘(a) There is established in the Office of Management and Budget

an office to be known as the ‘Office of Federal Financial Management’. The Office of Federal Financial Management, under the direction and control of the Deputy Director for Management of the

Office of Management and Budget, shall carry out the financial

management functions listed in section 503(a) of this title.

‘‘(b) There shall be at the head of the Office of Federal Financial

Management a Controller, who shall be appointed by the President,

by and with the advice and consent of the Senate. The Controller

shall be appointed from among individuals who possess—

‘‘(1) demonstrated ability and practical experience in accounting, financial management, and financial systems; and

‘‘(2) extensive practical experience in financial management

in large governmental or business entities.

‘‘(c) The Controller of the Office of Federal Financial Management shall be the deputy and principal advisor to the Deputy Director for Management in the performance by the Deputy Director

for Management of functions described in section 503(a).’’.
527 Sec. 205 CHIEF FINANCIAL OFFICERS ACT OF 1990

(b) STATEMENT OF APPROPRIATIONS IN BUDGET.—Section 1105(a)

of title 31, United States Code, is amended by adding at the end

the following:

‘‘(28) a separate statement of the amount of appropriations

requested for the Office of Federal Financial Management.’’.

(c) CLERICAL AMENDMENT.—The table of contents at the beginning of chapter 5 of title 31, United States Code, is amended by

striking the items relating to sections 503 and 504 and inserting

the following:

‘‘503. Functions of Deputy Director for Management.

‘‘504. Office of Federal Financial Management.

‘‘505. Office of Information and Regulatory Affairs.

‘‘506. Office of Federal Procurement Policy.’’.

SEC. 204. DUTIES AND FUNCTIONS OF THE DEPARTMENT OF THE

TREASURY.

Nothing in this Act shall be construed to interfere with the exercise of the functions, duties, and responsibilities of the Department

of the Treasury, as in effect immediately before the enactment of

this Act.

SEC. 205. AGENCY CHIEF FINANCIAL OFFICERS.

(a) IN GENERAL.—Subtitle I of title 31, United States Code, is

amended by adding at the end the following new chapter:

CHAPTER 9—AGENCY CHIEF FINANCIAL OFFICERS

‘‘Sec.

‘‘901. Establishment of agency Chief Financial Officers.

‘‘902. Authority and functions of agency Chief Financial Officers.

‘‘903. Establishment of agency Deputy Chief Financial Officers.

‘‘§ 901. Establishment of agency Chief Financial Officers

‘‘(a) There shall be within each agency described in subsection (b)

an agency Chief Financial Officer. Each agency Chief Financial Officer shall—

‘‘(1) for those agencies described in subsection (b)(1)—

‘‘(A) be appointed by the President, by and with the advice and consent of the Senate; or

‘‘(B) be designated by the President, in consultation with

the head of the agency, from among officials of the agency

who are required by law to be so appointed;

‘‘(2) for those agencies described in subsection (b)(2)—

‘‘(A) be appointed by the head of the agency;

‘‘(B) be in the competitive service or the senior executive

service; and

‘‘(C) be career appointees; and

‘‘(3) be appointed or designated, as applicable, from among

individuals who possess demonstrated ability in general management of, and knowledge of and extensive practical experience in financial management practices in large governmental

or business entities.

‘‘(b)(1) The agencies referred to in subsection (a)(1) are the following:

‘‘(A) The Department of Agriculture.

‘‘(B) The Department of Commerce.

‘‘(C) The Department of Defense.
Sec. 205 CHIEF FINANCIAL OFFICERS ACT OF 1990 528

‘‘(D) The Department of Education.

‘‘(E) The Department of Energy.

‘‘(F) The Department of Health and Human Services.

‘‘(G) The Department of Housing and Urban Development.

‘‘(H) The Department of the Interior.

‘‘(I) The Department of Justice.

‘‘(J) The Department of Labor.

‘‘(K) The Department of State.

‘‘(L) The Department of Transportation.

‘‘(M) The Department of the Treasury.

‘‘(N) The Department of Veterans Affairs.

‘‘(O) The Environmental Protection Agency.

‘‘(P) The National Aeronautics and Space Administration.

‘‘(2) The agencies referred to in subsection (a)(2) are the following:

‘‘(A) The Agency for International Development.

‘‘(B) The Federal Emergency Management Agency.

‘‘(C) The General Services Administration.

‘‘(D) The National Science Foundation.

‘‘(E) The Nuclear Regulatory Commission.

‘‘(F) The Office of Personnel Management.

‘‘(G) The Small Business Administration.

‘‘§ 902. Authority and Functions of Agency Chief Financial

Officers

‘‘(a) An agency Chief Financial Officer shall—

‘‘(1) report directly to the head of the agency regarding financial management matters;

‘‘(2) oversee all financial management activities relating to

the programs and operations of the agency;

‘‘(3) develop and maintain an integrated agency accounting

and financial management system, including financial reporting and internal controls, which—

‘‘(A) complies with applicable accounting principles,

standards, and requirements, and internal control standards;

‘‘(B) complies with such policies and requirements as

may be prescribed by the Director of the Office of Management and Budget;

‘‘(C) complies with any other requirements applicable to

such systems; and

‘‘(D) provides for—

‘‘(i) complete, reliable, consistent, and timely information which is prepared on a uniform basis and

which is responsive to the financial information needs

of agency management;

‘‘(ii) the development and reporting of cost information;

‘‘(iii) the integration of accounting and budgeting information; and

‘‘(iv) the systematic measurement of performance;

‘‘(4) make recommendations to the head of the agency regarding the selection of the Deputy Chief Financial Officer of

the agency;
529 Sec. 205 CHIEF FINANCIAL OFFICERS ACT OF 1990

‘‘(5) direct, manage, and provide policy guidance and oversight of agency financial management personnel, activities, and

operations, including—

‘‘(A) the preparation and annual revision of an agency

plan to—

‘‘(i) implement the 5-year financial management

plan prepared by the Director of the Office of Management and Budget under section 3512(a)(3) of this title;

and

‘‘(ii) comply with the requirements established under

sections 3515 and subsections (e) and (f) of section

3521 of this title;

‘‘(B) the development of agency financial management

budgets;

‘‘(C) the recruitment, selection, and training of personnel

to carry out agency financial management functions;

‘‘(D) the approval and management of agency financial

management systems design or enhancement projects;

‘‘(E) the implementation of agency asset management

systems, including systems for cash management, credit

management, debt collection, and property and inventory

management and control;

‘‘(6) prepare and transmit, by not later than 60 days after

the submission of the audit report required by section 3521(f)

of this title, an annual report to the agency head and the Director of the Office of Management and Budget, which shall include—

‘‘(A) a description and analysis of the status of financial

management of the agency;

‘‘(B) the annual financial statements prepared under section 3515 of this title;

‘‘(C) the audit report transmitted to the head of the

agency under section 3521(f) of this title;

‘‘(D) a summary of the reports on internal accounting

and administrative control systems submitted to the President and the Congress under the amendments made by

the Federal Managers’ Financial Integrity Act of 1982

(Public Law 97–255); and

‘‘(E) other information the head of the agency considers

appropriate to fully inform the President and the Congress

concerning the financial management of the agency;

‘‘(7) monitor the financial execution of the budget of the

agency in relation to actual expenditures, and prepare and submit to the head of the agency timely performance reports; and

‘‘(8) review, on a biennial basis, the fees, royalties, rents, and

other charges imposed by the agency for services and things of

value it provides, and make recommendations on revising

those charges to reflect costs incurred by it in providing those

services and things of value.

‘‘(b)(1) In addition to the authority otherwise provided by this

section, each agency Chief Financial Officer—

‘‘(A) subject to paragraph (2), shall have access to all records,

reports, audits, reviews, documents, papers, recommendations,

or other material which are the property of the agency or
Sec. 205 CHIEF FINANCIAL OFFICERS ACT OF 1990 530

which are available to the agency, and which relate to programs and operations with respect to which that agency Chief

Financial Officer has responsibilities under this section;

‘‘(B) may request such information or assistance as may be

necessary for carrying out the duties and responsibilities provided by this section from any Federal, State, or local governmental entity; and

‘‘(C) to the extent and in such amounts as may be provided

in advance by appropriations Acts, may—

‘‘(i) enter into contracts and other arrangements with

public agencies and with private persons for the preparation of financial statements, studies, analyses, and other

services; and

‘‘(ii) make such payments as may be necessary to carry

out the provisions of this section.

‘‘(2) Except as provided in paragraph (1)(B), this subsection does

not provide to an agency Chief Financial Officer any access greater

than permitted under any other law to records, reports, audits, reviews, documents, papers, recommendations, or other material of

any Office of Inspector General established under the Inspector

General Act of 1978 (5 U.S.C. App.).

‘‘903. Establishment of agency Deputy Chief Financial Officers

‘‘(a) There shall be within each agency described in section 901(b)

an agency Deputy Chief Financial Officer, who shall report directly

to the agency Chief Financial Officer on financial management

matters. The position of agency Deputy Chief Financial Officer

shall be a career reserved position in the Senior Executive Service.

‘‘(b) Consistent with qualification standards developed by, and in

consultation with, the agency Chief Financial Officer and the Director of the Office of Management and Budget, the head of each

agency shall appoint as Deputy Chief Financial Officer an individual with demonstrated ability and experience in accounting, budget

execution, financial and management analysis, and systems development, and not less than 6 years practical experience in financial

management at large governmental entities.’’.

(b) CLERICAL AMENDMENT.—The table of chapters at the beginning of subtitle I of title 31, United States Code, is amended by

adding at the end the following:

‘‘9. Agency Chief Financial Officers 901.’’.

(c) CHIEF FINANCIAL OFFICERS OF DEPARTMENT OF VETERANS AFFAIRS AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.—

(1) Designation.—The Secretary of Veterans Affairs and the

Secretary of Housing and Urban Development may each designate as the agency Chief Financial Officer of that department

for purposes of section 901 of title 31, United States Code, as

amended by this section, the officer designated, respectively,

under section 4(c) of the Department of Veterans Affairs Act

(38 U.S.C. 201 note) and section 4(e) of the Department of

Housing and Urban Development Act (42 U.S.C. 3533(e)), as in

effect before the effective date of this Act.

(2) Conforming amendment.—Section 4(c) of the Department

of Veterans Affairs Act (38 U.S.C. 201 note) and section 4(e)

of the Department of Housing and Urban Development Act (42
531 Sec. 207 CHIEF FINANCIAL OFFICERS ACT OF 1990

U.S.C. 3533(e)), as added by section 121 of Public Law 101–

235, are repealed.

SEC. 206. Transfer of Functions and Personnel of Agency Chief

Financial Officers.

(a) AGENCY REVIEWS OF FINANCIAL MANAGEMENT ACTIVITIES.—Not later than 120 days after the date of the enactment

of this Act, the Director of the Office of Management and

Budget shall require each agency listed in subsection (b) of section 901 of title 31, United States Code, as amended by this

Act, to conduct a review of its financial management activities

for the purpose of consolidating its accounting, budgeting, and

other financial management activities under the agency Chief

Financial Officer appointed under subsection (a) of that section

for the agency.

(b) REORGANIZATION PROPOSAL.—Not later than 120 days

after the issuance of requirements under subsection (a) and

subject to all laws vesting functions in particular officers and

employees of the United States, the head of each agency shall

submit to the Director of the Office of Management and Budget

a proposal for reorganizing the agency for the purposes of this

Act. Such proposal shall include—

(1) a description of all functions, powers, duties, personnel, property, or records which the agency Chief Financial

Officer is proposed to have authority over, including those

relating to functions that are not related to financial management activities; and

(2) a detailed outline of the administrative structure of

the office of the agency Chief Financial Officer, including

a description of the responsibility and authority of financial management personnel and resources in agencies or

other subdivisions as appropriate to that agency.

(c) REVIEW AND APPROVAL OF PROPOSAL.—Not later than 60

days after receiving a proposal from the head of an agency

under subsection (b), the Director of the Office of Management

and Budget shall approve or disapprove the proposal and notify the head of the agency of that approval or disapproval. The

Director shall approve each proposal which establishes an

agency Chief Financial Officer in conformance with section 901

of title 31, United States Code, as added by this Act, and which

establishes a financial management structure reasonably tailored to the functions of the agency. Upon approving or disapproving a proposal of an agency under this section, the Director shall transmit to the head of the agency a written notice

of that approval or disapproval.

(d) IMPLEMENTATION OF PROPOSAL.—Upon receiving written

notice of approval of a proposal under this section from the Director of the Office of Management and Budget, the head of an

agency shall implement that proposal.

SEC. 207. COMPENSATION.

(a) COMPENSATION, LEVEL II.—Section 5313 of title 5, United

States Code, is amended by adding at the end the following:

‘‘Deputy Director for Management, Office of Management

and Budget.’’.
Sec. 301 CHIEF FINANCIAL OFFICERS ACT OF 1990 532

(b) COMPENSATION, LEVEL III.—Section 5314 of title 5, United

States Code, is amended by adding at the end the following:

‘‘Controller, Office of Federal Financial Management, Office

of Management and Budget.’’.

(c) COMPENSATION, LEVEL IV.—Section 5315 of title 5, United

States Code, is amended by adding at the end the following:

‘‘Chief Financial Officer, Department of Agriculture.

‘‘Chief Financial Officer, Department of Commerce.

‘‘Chief Financial Officer, Department of Defense.

‘‘Chief Financial Officer, Department of Education.

‘‘Chief Financial Officer, Department of Energy.

‘‘Chief Financial Officer, Department of Health and Human

Services.

‘‘Chief Financial Officer, Department of Housing and Urban

Development.

‘‘Chief Financial Officer, Department of the Interior.

‘‘Chief Financial Officer, Department of Justice.

‘‘Chief Financial Officer, Department of Labor.

‘‘Chief Financial Officer, Department of State.

‘‘Chief Financial Officer, Department of Transportation.

‘‘Chief Financial Officer, Department of the Treasury.

‘‘Chief Financial Officer, Department of Veterans Affairs.

‘‘Chief Financial Officer, Environmental Protection Agency.

‘‘Chief Financial Officer, National Aeronautics and Space Administration.’’.

TITLE III—ENHANCEMENT OF FEDERAL FINANCIAL

MANAGEMENT ACTIVITIES

SEC. 301. FINANCIAL MANAGEMENT STATUS REPORT; 5-YEAR PLAN

OF DIRECTOR OF OFFICE OF MANAGEMENT AND BUDGET.—(a) IN

GENERAL.—Section 3512 of title 31, United States Code, is amended by striking the heading thereof, redesignating subsections (a)

through (f) in order as subsections (b) through (g), and by inserting

before such subsection (b), as so redesignated, the following:

‘‘3512. Executive agency accounting and other financial management reports and plans

‘‘(a)(1) The Director of the Office of Management and Budget

shall prepare and submit to the appropriate committees of the Congress a financial management status report and a governmentwide

5-year financial management plan.

‘‘(2) A financial management status report under this subsection

shall include—

‘‘(A) a description and analysis of the status of financial

management in the executive branch;

‘‘(B) a summary of the most recently completed financial

statements—

‘‘(i) of Federal agencies under section 3515 of this title;

and

‘‘(ii) of Government corporations;

‘‘(C) a summary of the most recently completed financial

statement audits and reports—

‘‘(i) of Federal agencies under section 3521 (e) and (f) of

this title; and
533 Sec. 301 CHIEF FINANCIAL OFFICERS ACT OF 1990

‘‘(ii) of Government corporations;

‘‘(D) a summary of reports on internal accounting and administrative control systems submitted to the President and the

Congress under the amendments made by the Federal Managers’ Financial Integrity Act of 1982 (Public Law 97–255); and

‘‘(E) any other information the Director considers appropriate

to fully inform the Congress regarding the financial management of the Federal Government.

‘‘(3)(A) A governmentwide 5-year financial management plan

under this subsection shall describe the activities the Director, the

Deputy Director for Management, the Controller of the Office of

Federal Financial Management, and agency Chief Financial Officers shall conduct over the next 5 fiscal years to improve the financial management of the Federal Government.

‘‘(B) Each governmentwide 5-year financial management plan

prepared under this subsection shall—

‘‘(i) describe the existing financial management structure and

any changes needed to establish an integrated financial management system;

‘‘(ii) be consistent with applicable accounting principles,

standards, and requirements;

‘‘(iii) provide a strategy for developing and integrating individual agency accounting, financial information, and other financial management systems to ensure adequacy, consistency,

and timeliness of financial information;

‘‘(iv) identify and make proposals to eliminate duplicative

and unnecessary systems, including encouraging agencies to

share systems which have sufficient capacity to perform the

functions needed;

‘‘(v) identify projects to bring existing systems into compliance with the applicable standards and requirements;

‘‘(vi) contain milestones for equipment acquisitions and other

actions necessary to implement the 5-year plan consistent with

the requirements of this section;

‘‘(vii) identify financial management personnel needs and actions to ensure those needs are met;

‘‘(viii) include a plan for ensuring the annual audit of financial statements of executive agencies pursuant to section

3521(h) of this title; and

‘‘(ix) estimate the costs of implementing the governmentwide

5-year plan.

‘‘(4)(A) Not later than 15 months after the date of the enactment

of this subsection, the Director of the Office of Management and

Budget shall submit the first financial management status report

and governmentwide 5-year financial management plan under this

subsection to the appropriate committees of the Congress.

‘‘(B)(i) Not later than January 31 of each year thereafter, the Director of the Office of Management and Budget shall submit to the

appropriate committees of the Congress a financial management

status report and a revised governmentwide 5-year financial management plan to cover the succeeding 5 fiscal years, including a report on the accomplishments of the executive branch in implementing the plan during the preceding fiscal year.
Sec. 302 CHIEF FINANCIAL OFFICERS ACT OF 1990 534

‘‘(ii) The Director shall include with each revised governmentwide

5-year financial management plan a description of any substantive

changes in the financial statement audit plan required by paragraph (3)(B)(viii), progress made by executive agencies in implementing the audit plan, and any improvements in Federal Government financial management related to preparation and audit of financial statements of executive agencies.

‘‘(5) Not later than 30 days after receiving each annual report

under section 902(a)(6) of this title, the Director shall transmit to

the Chairman of the Committee on Government Operations of the

House of Representatives and the Chairman of the Committee on

Governmental Affairs of the Senate a final copy of that report and

any comments on the report by the Director.’’.

(b) Clerical Amendment.—The table of contents at the beginning

of chapter 35 of title 31, United States Code, is amended by striking the item relating to section 3512 and inserting the following:

‘‘3512. Executive agency accounting and other financial

management reports and plans.’’.

SEC. 302. CHIEF FINANCIAL OFFICERS COUNCIL.—(a) ESTABLISHMENT.—There is established a Chief Financial Officers Council,

consisting of—

(1) the Deputy Director for Management of the Office of

Management and Budget, who shall act as chairperson of the

council;

(2) the Controller of the Office of Federal Financial Management of the Office of Management and Budget;

(3) the Fiscal Assistant Secretary of Treasury; and

(4) each of the agency Chief Financial Officers appointed

under section 901 of title 31, United States Code, as amended

by this Act.

(b) FUNCTIONS.—The Chief Financial Officers Council shall meet

periodically to advise and coordinate the activities of the agencies

of its members on such matters as consolidation and modernization

of financial systems, improved quality of financial information, financial data and information standards, internal controls, legislation affecting financial operations and organizations, and any other

financial management matter.

SEC. 303. FINANCIAL STATEMENTS OF AGENCIES.—(a) PREPARATION OF FINANCIAL STATEMENTS.—

(1) In general.—Subchapter II of chapter 35 of title 31, United States Code, is amended by adding at the end the following:

‘‘3515. Financial statements of agencies

‘‘(a) Not later than March 31 of 1992 and each year thereafter,

the head of each executive agency identified in section 901(b) of

this title shall prepare and submit to the Director of the Office of

Management and Budget a financial statement for the preceding

fiscal year, covering—

‘‘(1) each revolving fund and trust fund of the agency; and

‘‘(2) to the extent practicable, the accounts of each office, bureau, and activity of the agency which performed substantial

commercial functions during the preceding fiscal year.
535 Sec. 303 CHIEF FINANCIAL OFFICERS ACT OF 1990

‘‘(b) Each financial statement of an executive agency under this

section shall reflect—

‘‘(1) the overall financial position of the revolving funds, trust

funds, offices, bureaus, and activities covered by the statement,

including assets and liabilities thereof;

‘‘(2) results of operations of those revolving funds, trust

funds, offices, bureaus, and activities;

‘‘(3) cash flows or changes in financial position of those revolving funds, trust funds, offices, bureaus, and activities; and

‘‘(4) a reconciliation to budget reports of the executive agency

for those revolving funds, trust funds, offices, bureaus, and activities.

‘‘(c) The Director of the Office of Management and Budget shall

prescribe the form and content of the financial statements of executive agencies under this section, consistent with applicable accounting principles, standards, and requirements.

‘‘(d) For purposes of this section, the term ‘commercial functions’

includes buying and leasing of real estate, providing insurance,

making loans and loan guarantees, and other credit programs and

any activity involving the provision of a service or thing of value

for which a fee, royalty, rent, or other charge is imposed by an

agency for services and things of value it provides.

‘‘(e) Not later than March 31 of each year, the head of each executive agency designated by the President may prepare and submit

to the Director of the Office of Management and Budget a financial

statement for the preceding fiscal year, covering accounts of offices,

bureaus, and activities of the agency in addition to those described

in subsection (a).’’.

(2) EFFECTIVE DATE OF SUBSECTION.—Subsection (e) of section 3515 of title 31, United States Code, as added by paragraph (1), shall take effect on the date on which a resolution

described in subsection (b)(1) of this section is passed by the

Congress and approved by the President.

(3) WAIVER OF REQUIREMENT.—The Director of the Office of

Management and Budget may, for fiscal year 1991, waive the

application of section 3515(a) of title 31, United States Code,

as amended by this subsection, with respect to any revolving

fund, trust fund, or account of an executive agency.

(b) RESOLUTION APPROVING DESIGNATION OF AGENCIES.—

(1) RESOLUTION DESCRIBED.—A resolution referred to in subsection (a)(2) is a joint resolution the matter after the resolving

clause of which is as follows: ‘‘That the Congress approves the

executive agencies designated by the President pursuant to

section 3515(e) of title 31, United States Code.’’.

(2) INTRODUCTION OF RESOLUTION.—No later than the first

day of session following the day on which the President submits to the Congress a designation of executive agencies authorized to submit financial statements under section 3515(e)

of title 31, United States Code, as added by subsection (a), a

resolution as described in paragraph (1) shall be introduced (by

request) in the House by the chairman of the Committee on

Government Operations of the House of Representatives, or by

a Member or Members of the House designated by such chairman; and shall be introduced (by request) in the Senate by the
Sec. 303 CHIEF FINANCIAL OFFICERS ACT OF 1990 536

chairman of the Committee on Governmental Affairs of the

Senate, or by a Member or Members of the Senate designated

by such chairman.

(3) REFERRAL.—A resolution described in paragraph (1), shall

be referred to the Committee on Governmental Affairs of the

Senate and the Committee on Government Operations of the

House (and all resolutions with respect to the same designation of executive agencies shall be referred to the same committee) by the President of the Senate or the Speaker of the

House of Representatives, as the case may be. The committee

shall make its recommendations to the House of Representatives or the Senate, respectively, within 60 calendar days of

continuous session of the Congress following the date of such

resolution’s introduction.

(4) DISCHARGE OF COMMITTEE.—If the committee to which is

referred a resolution introduced pursuant to paragraph (2) (or,

in the absence of such a resolution, the first resolution introduced with respect to the same designation of executive agencies) has not reported such resolution or identical resolution at

the end of 60 calendar days of continuous session of the Congress after its introduction, such committee shall be deemed to

be discharged from further consideration of such resolution and

such resolution shall be placed on the appropriate calendar of

the House involved.

(5) PROCEDURE AFTER REPORT OR DISCHARGE OF COMMITTEE;

VOTE ON FINAL PASSAGE.—(A) When the committee has reported, or has been deemed to be discharged (under paragraph

(4)) from further consideration of, a resolution described in

paragraph (1), it is at any time thereafter in order (even

though a previous motion to the same effect has been disagreed to) for any Member of the respective House to move to

proceed to the consideration of the resolution. The motion is

highly privileged and is not debatable. The motion shall not be

subject to amendment, or to a motion to postpone, or a motion

to proceed to the consideration of other business. A motion to

reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the

consideration of the resolution is agreed to, the resolution shall

remain the unfinished business of the respective House until

disposed of.

(B) Debate on the resolution, and on all debatable motions

and appeals in connection therewith, shall be limited to not

more than 10 hours, which shall be divided equally between individuals favoring and individuals opposing the resolution. A

motion further to limit debate is in order and not debatable.

An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the resolution is not in order. A motion to reconsider

the vote by which the resolution is passed or rejected shall not

be in order.

(C) Immediately following the conclusion of the debate on the

resolution and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the appro-
537 Sec. 303 CHIEF FINANCIAL OFFICERS ACT OF 1990

priate House, the vote on final passage of the resolution shall

occur.

(D) Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives,

as the case may be, to the procedure relating to a resolution described in paragraph (1), shall be decided without debate.

(E) If, prior to the passage by one House of a resolution of that

House, that House receives a resolution with respect to the same

designation of executive agencies from the other House, then—

(i) the procedure in that House shall be the same as if

no resolution had been received from the other House; but

(ii) the vote on final passage shall be on the resolution

of the other House.

(F) It shall not be in order in either the House of Representatives or the Senate to consider a resolution described in paragraph (1), or to consider any conference report on such a resolution, unless the Director of the Office of Management and

Budget submits to the Congress a report under subsection (e).

(c) REPORT ON SUBSTANTIAL COMMERCIAL FUNCTIONS.—Not

later than 180 days after the date of the enactment of this Act,

the Director of the Office of Management and Budget shall determine and report to the Congress on which executive agencies or parts thereof perform substantial commercial functions

for which financial statements can be prepared practicably

under section 3515 of title 31, United States Code, as added by

this section.

(d) PILOT PROJECT.—(1) Not later than March 31 of each of

1991, 1992, and 1993, the head of the Departments of Agriculture, Labor, and Veterans Affairs, the General Services Administration, and the Social Security Administration shall each

prepare and submit to the Director of the Office of Management and Budget financial statements for the preceding fiscal

year for the accounts of all of the offices, bureaus, and activities of that department or administration.

(2) Not later than March 31 of each of 1992 and 1993, the

head of the Departments of Housing and Urban Development

and the Army shall prepare and submit to the Director of the

Office of Management and Budget financial statements for the

preceding fiscal year for the accounts of all of the offices, bureaus, and activities of that department.

(3) Not later than March 31, 1993, the head of the Department

of the Air Force, the Internal Revenue Service, and the United

States Customs Service, shall each prepare and submit to the Director of the Office of Management and Budget financial statements for the preceding fiscal year for the accounts of all of the offices, bureaus, and activities of that department or service.

(4) Each financial statement prepared under this subsection shall

be audited in accordance with section 3521 (e), (f), (g), and (h) of

title 31, United States Code.

(e) REPORT ON INITIAL FINANCIAL STATEMENTS.—Not later than

June 30, 1993, the Director of the Office of Management and Budget shall report to the Congress on the financial statements prepared for fiscal years 1990, 1991, and 1992 under subsection (a) of

section 3515 of title 31, United States Code (as added by subsection
Sec. 304 CHIEF FINANCIAL OFFICERS ACT OF 1990 538

(a) of this section) and under subsection (d) of this section. The report shall include analysis of—

(1) the accuracy of the data included in the financial statements;

(2) the difficulties each department and agency encountered in

preparing the data included in the financial statements;

(3) the benefits derived from the preparation of the financial

statements; and

(4) the cost associated with preparing and auditing the financial

statements, including a description of any activities that were foregone as a result of that preparation and auditing.

(f) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 35 of title 31, United States Code, is amended by

inserting after the item relating to section 3514 the following:

‘‘3515. Financial statements of agencies.’’.

Sec. 304. FINANCIAL AUDITS OF AGENCIES.—(a) IN GENERAL.—

Section 3521 of title 31, United States Code, is amended by adding

at the end the following new subsections:

‘‘(e) Each financial statement prepared under section 3515 by an

agency shall be audited in accordance with applicable generally accepted government auditing standards—

‘‘(1) in the case of an agency having an Inspector General appointed under the Inspector General Act of 1978 (5 U.S.C.

App.), by the Inspector General or by an independent external

auditor, as determined by the Inspector General of the agency;

and

‘‘(2) in any other case, by an independent external auditor,

as determined by the head of the agency.

‘‘(f) Not later than June 30 following the fiscal year for which a

financial statement is submitted under section 3515 of this title by

an agency, the person who audits the statement for purpose of subsection (e) shall submit a report on the audit to the head of the

agency. A report under this subsection shall be prepared in accordance with generally accepted government auditing standards.

‘‘(g) The Comptroller General of the United States—

‘‘(1) may review any audit of a financial statement conducted

under this subsection by an Inspector General or an external

auditor;

‘‘(2) shall report to the Congress, the Director of the Office

of Management and Budget, and the head of the agency which

prepared the statement, regarding the results of the review

and make any recommendation the Comptroller General considers appropriate; and

‘‘(3) may audit a financial statement prepared under section

3515 of this title at the discretion of the Comptroller General

or at the request of a committee of the Congress.

An audit the Comptroller General performs under this subsection

shall be in lieu of the audit otherwise required by subsection (e) of

this section. Prior to performing such audit, the Comptroller General shall consult with the Inspector General of the agency which

prepared the statement.

‘‘(h) Each financial statement prepared by an executive agency

for a fiscal year after fiscal year 1991 shall be audited in accord-
539 Sec. 305 CHIEF FINANCIAL OFFICERS ACT OF 1990

ance with this section and the plan required by section

3512(a)(3)(B)(viii) of this title.’’.

(b) WAIVER OF REQUIREMENTS.—The Director of the Office of

Management and Budget may waive application of subsections (e)

and (f) of section 3521 of title 31, United States Code, as amended

by this section, to a financial statement submitted by an agency for

fiscal years 1990 and 1991.

SEC. 305. FINANCIAL AUDITS OF GOVERNMENT CORPORATIONS.— Section 9105 of title 31, United States Code, is amended to read

as follows:

‘‘9105. Audits

‘‘(a)(1) The financial statements of Government corporations shall

be audited by the Inspector General of the corporation appointed

under the Inspector General Act of 1978 (5 U.S.C. App.) or by an

independent external auditor, as determined by the Inspector General or, if there is no Inspector General, by the head of the corporation.

‘‘(2) Audits under this section shall be conducted in accordance

with applicable generally accepted government auditing standards.

‘‘(3) Upon completion of the audit required by this subsection, the

person who audits the statement shall submit a report on the audit

to the head of the Government corporation, to the Chairman of the

Committee on Government Operations of the House of Representatives, and to the Chairman of the Committee on Governmental Affairs of the Senate.

‘‘(4) The Comptroller General of the United States—

‘‘(A) may review any audit of a financial statement conducted

under this subsection by an Inspector General or an external

auditor;

‘‘(B) shall report to the Congress, the Director of the Office

of Management and Budget, and the head of the Government

corporation which prepared the statement, regarding the results of the review and make any recommendation the Comptroller General of the United States considers appropriate; and

‘‘(C) may audit a financial statement of a Government corporation at the discretion of the Comptroller General or at the

request of a committee of the Congress.

An audit the Comptroller General performs under this paragraph

shall be in lieu of the audit otherwise required by paragraph (1)

of this subsection. Prior to performing such audit, the Comptroller

General shall consult with the Inspector General of the agency

which prepared the statement.

‘‘(5) A Government corporation shall reimburse the Comptroller

General of the United States for the full cost of any audit conducted by the Comptroller General under this subsection, as determined by the Comptroller General. All reimbursements received

under this paragraph by the Comptroller General of the United

States shall be deposited in the Treasury as miscellaneous receipts.

‘‘(b) Upon request of the Comptroller General of the United

States, a Government corporation shall provide to the Comptroller General of the United States all books, accounts, financial records, reports, files, workpapers, and property belonging

to or in use by the Government corporation and its auditor
Sec. 306 CHIEF FINANCIAL OFFICERS ACT OF 1990 540

This Act has not been amended as of December 31, 1995.

that the Comptroller General of the United States considers

necessary to the performance of any audit or review under this

section.

‘‘(c) Activities of the Comptroller General of the United

States under this section are in lieu of any audit of the financial transactions of a Government corporation that the Comptroller General is required to make under any other law.’’.

SEC. 306. MANAGEMENT REPORTS OF GOVERNMENT CORPORATIONS.—(a) IN GENERAL.—Section 9106 of title 31, United States

Code, is amended to read as follows:

§ ‘‘9106. Management reports

‘‘(a)(1) A Government corporation shall submit an annual management report to the Congress not later than 180 days after the

end of the Government corporation’s fiscal year.

‘‘(2) A management report under this subsection shall include—

‘‘(A) a statement of financial position;

‘‘(B) a statement of operations;

‘‘(C) a statement of cash flows;

‘‘(D) a reconciliation to the budget report of the Government

corporation, if applicable;

‘‘(E) a statement on internal accounting and administrative

control systems by the head of the management of the corporation, consistent with the requirements for agency statements

on internal accounting and administrative control systems

under the amendments made by the Federal Managers’ Financial Integrity Act of 1982 (Public Law 97–255);

‘‘(F) the report resulting from an audit of the financial statements of the corporation conducted under section 9105 of this

title; and

‘‘(G) any other comments and information necessary to inform the Congress about the operations and financial condition

of the corporation.

‘‘(b) A Government corporation shall provide the President, the

Director of the Office of Management and Budget, and the Comptroller General of the United States a copy of the management report when it is submitted to Congress.’’.

(b) CLERICAL AMENDMENT.—The table of sections for chapter 91

of title 31, United States Code, is amended by striking the item relating to section 9106 and inserting the following:

‘‘9106. Management reports.’’.

SEC. 307. ADOPTION OF CAPITAL ACCOUNTING STANDARDS.—No

capital accounting standard or principle, including any human capital standard or principle, shall be adopted for use in an executive

department or agency until such standard has been reported to the

Congress and a period of 45 days of continuous session of the Congress has expired.

Approved November 15, 1990
541

Cash Management Improvement

Act Amendments of 1992

Public Law 102–589

(106 Stat. 5133)

AN ACT To amend the Cash Management Improvement Act of 1990 to provide

adequate time for implementation of that Act, and for other purposes.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Cash Management Improvement

Act Amendments of 1992’’.

SEC. 2. AMENDMENTS TO THE CASH MANAGEMENT IMPROVEMENT

ACT OF 1990.

The Cash Management Improvement Act of 1990 (Public Law

101–453,

104 Stat. 1058) is amended—

(1) in section 4(c) (31 U.S.C. 3335 note), by striking ‘‘by the

date which is 2 years after the date of the enactment of this

Act’’;

(2) in section 5 (31 U.S.C. 6503 note)—

(A) in subsection (d)(1), by striking ‘‘not later than 2

years after the date of enactment of this Act’’ and inserting

‘‘July 1, 1993 or the first day of a State’s fiscal year beginning in 1993, whichever is later’’;

B) in subsection (d)(2), by striking ‘‘2 years after the

date of enactment of this Act’’ and inserting ‘‘on July 1,

1993 or the first day of a State’s fiscal year beginning in

1993, whichever is later’’; and

(C) in subsection (e), by striking ‘‘2 years after the date

of enactment of this Act’’ and inserting ‘‘on July 1, 1993 or

the first day of a State’s fiscal year beginning in 1993,

whichever is later’’; and

(3) in section 6 (31 U.S.C. 6503 note), by striking ‘‘Four’’ and

inserting ‘‘Five’’.

SEC. 3. INTERNAL REVENUE SERVICE TAX REFUND OFFSET.

Section 3720A of title 31, United States Code, is amended—

(1) by amending subsection (a) to read as follows:

‘‘(a) Any Federal agency that is owed a past-due legally enforceable debt (other than any past-due support), including debt administered by a third party acting as an agent for the Federal Government, by a named person shall, in accordance with regulations issued pursuant to subsections (b) and (d), notify the Secretary of the

Treasury at least once a year of the amount of all such debt.’’;
Sec. 4 CASH MANAGEMENT IMPROVEMENT ACT AMENDMENTS OF 1992 542

(2) in subsection (b)—

(A) in paragraph (3) by striking out ‘‘and’’ at the end

thereof;

(B) in paragraph (4) by striking out ‘‘to obtain payment

of such debt.’’ and inserting in lieu thereof ‘‘(determined on

a government-wide basis) to obtain payment of such debt;

and’’; and

(C) by adding at the end thereof the following new paragraph:

‘‘(5) certifies that reasonable efforts have been made by the

agency (pursuant to regulations) to obtain payment of such

debt.’’;

(3) by redesignating subsection (g) as subsection (h);

(4) in subsection (h) (as redesignated under paragraph (3) of

this section)—

(A) in paragraph (2) by striking out ‘‘and’’ at the end

thereof;

(B) in paragraph (3) by adding ‘‘; and’’ at the end thereof;

and

(C) by adding after paragraph (3) the following new

paragraph:

‘‘(4) the term ‘person’ means an individual; or a sole proprietorship, partnership, corporation, nonprofit organization, or

any other form of business association.’’; and

(5) by inserting after subsection (f) the following: ‘‘(g) In the

case of refunds of business associations, this section shall apply

only to refunds payable on or after January 1, 1995. In the

case of refunds of individuals who owe debts to Federal agencies that have not participated in the Federal tax refund offset

program prior to the date of enactment of this subsection, this

section shall apply only to refunds payable on or after January

1, 1994.’’.

SEC. 4. EXTENSION OF THE PRIVATE COUNSEL PILOT.

(a) EXTENSION OF PROGRAM.—The pilot debt collection program

carried out by the Attorney General under section 3718 (b) and (c)

of title 31, United States Code, as authorized and directed under

section 3 of the Act entitled ‘‘An Act to amend section 3718 of title

31, United States Code, to authorize contracts retaining private

counsel to furnish legal services in the case of indebtedness owed

the United States.’’ approved October 29, 1986 (37 U.S.C. 3718

note; Public Law 99–578) is extended through September 30, 1996.

(b) EXTENSION OF JUDICIAL DISTRICTS.—Section 3 of such Act is

amended by striking out ‘‘not more than 10’’ and inserting in lieu

thereof ‘‘not more than 15’’.

(c) EXTENSION OF AUTHORIZATION.—Section 5 of such Act is

amended by striking out all after ‘‘effect’’ and inserting in lieu

thereof ‘‘until September 30, 1996.’’.

(d) CONTRACT EXTENSION.—The Attorney General may extend or

modify any or all of the contracts entered into with private counsel

prior to October 1, 1992, for such time as is necessary to conduct

a full and open competition in accordance with section 3718(b) of

title 31, United States Code.
543 Sec. 7 CASH MANAGEMENT IMPROVEMENT ACT AMENDMENTS OF 1992

This Act has not been amended as of December 31, 1995.

SEC. 5. AUDIT BY INSPECTOR GENERAL.

(a) CONTENTS OF AUDIT.—The Inspector General of the Department of Justice shall conduct an audit, for the period beginning on

October 1, 1991, and ending on September 30, 1994, of the actions

of the Attorney General under subsection (b) of section 3718 of title

31, United States Code, under the pilot program referred to in section 3 of the Act entitled ‘‘An Act to amend section 3718 of title 31,

United States Code, to authorize contracts retaining private counsel to furnish legal services in the case of indebtedness owed the

United States.’’, approved October 29, 1986 (37 U.S.C. 3718 note;

Public Law 99–578). The Inspector General shall determine the extent of the competition among private counsel to obtain contracts

awarded under such subsection, the reasonableness of the fees provided in such contracts, the diligence and efforts of the Attorney

General to retain private counsel in accordance with the provisions

of such subsection, the results of the debt collection efforts of private counsel retained under such contracts, and the cost-effectiveness of the pilot project compared with the use of United States Attorneys’ Offices for debt collection.

(b) REPORT TO CONGRESS.—After completing the audit under subsection (a), the Inspector General shall transmit to the Congress,

not later than June 30, 1995, a report on the findings, conclusions,

and recommendations resulting from the audit.

SEC. 6. ADDITIONAL REPORTING REQUIREMENTS ON CONTRACTS

FOR LEGAL SERVICES.

Section 3718 of title 31, United States Code, is amended by adding at the end thereof the following new subsection:

‘‘(g) In order to assist Congress in determining whether use of

private counsel is a cost-effective method of collecting Government

debts, the Attorney General shall, following consultation with the

General Accounting Office, maintain and make available to the Inspector General of the Department of Justice, statistical data relating to the comparative costs of debt collection by participating

United States Attorneys’ Offices and by private counsel.’’.

SEC. 7. EFFECTIVE DATE.

The provisions of this Act and amendments made by this Act

shall take effect on the date of enactment of this Act, except if such

date of enactment is on or after October 1, 1992, such provisions

and amendments shall be effective as if enacted on September 30,

1992.

November 10, 1992
544

Government Performance and Results Act of 1993

Public Law 103–62

(107 Stat. 285)

AN ACT To provide for the establishment of strategic planning and performance

measurement in the Federal Government, and for other purposes.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Government Performance and Results Act of 1993’’.

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS.—The Congress finds that—

(1) waste and inefficiency in Federal programs undermine

the confidence of the American people in the Government and

reduces the Federal Government’s ability to address adequately vital public needs;

(2) Federal managers are seriously disadvantaged in their efforts to improve program efficiency and effectiveness, because

of insufficient articulation of program goals and inadequate information on program performance; and

(3) congressional policymaking, spending decisions and program oversight are seriously handicapped by insufficient attention to program performance and results.

(b) PURPOSES.—The purposes of this Act are to—

(1) improve the confidence of the American people in the capability of the Federal Government, by systematically holding

Federal agencies accountable for achieving program results;

(2) initiate program performance reform with a series of pilot

projects in setting program goals, measuring program performance against those goals, and reporting publicly on their

progress;

(3) improve Federal program effectiveness and public accountability by promoting a new focus on results, service quality, and customer satisfaction;

(4) help Federal managers improve service delivery, by requiring that they plan for meeting program objectives and by

providing them with information about program results and

service quality;

(5) improve congressional decisionmaking by providing more

objective information on achieving statutory objectives, and on

the relative effectiveness and efficiency of Federal programs

and spending; and

(6) improve internal management of the Federal Government.
545 Sec. 4 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

SEC. 3. STRATEGIC PLANNING.

Chapter 3 of title 5, United States Code, is amended by adding

after section 305 the following new section:

‘‘§ 306. Strategic Plans

‘‘(a) No later than September 30, 1997, the head of each agency

shall submit to the Director of the Office of Management and Budget and to the Congress a strategic plan for program activities. Such

plan shall contain—

‘‘(1) a comprehensive mission statement covering the major

functions and operations of the agency;

‘‘(2) general goals and objectives, including outcome-related

goals and objectives, for the major functions and operations of

the agency;

‘‘(3) a description of how the goals and objectives are to be

achieved, including a description of the operational processes,

skills and technology, and the human, capital, information, and

other resources required to meet those goals and objectives;

‘‘(4) a description of how the performance goals included in

the plan required by section 1115(a) of title 31 shall be related

to the general goals and objectives in the strategic plan;

‘‘(5) an identification of those key factors external to the

agency and beyond its control that could significantly affect the

achievement of the general goals and objectives; and

‘‘(6) a description of the program evaluations used in establishing or revising general goals and objectives, with a schedule for future program evaluations.

‘‘(b) The strategic plan shall cover a period of not less than five

years forward from the fiscal year in which it is submitted, and

shall be updated and revised at least every three years.

‘‘(c) The performance plan required by section 1115 of title 31

shall be consistent with the agency’s strategic plan. A performance

plan may not be submitted for a fiscal year not covered by a current strategic plan under this section.

‘‘(d) When developing a strategic plan, the agency shall consult

with the Congress, and shall solicit and consider the views and

suggestions of those entities potentially affected by or interested in

such a plan.

‘‘(e) The functions and activities of this section shall be considered to be inherently Governmental functions. The drafting of strategic plans under this section shall be performed only by Federal

employees.

‘‘(f) For purposes of this section the term ‘agency’ means an Executive agency defined under section 105, but does not include the

Central Intelligence Agency, the General Accounting Office, the

Panama Canal Commission, the United States Postal Service, and

the Postal Rate Commission.’’.

SEC. 4. ANNUAL PERFORMANCE PLANS AND REPORTS.

(a) BUDGET CONTENTS AND SUBMISSION TO CONGRESS.—Section

1105(a) of title 31, United States Code, is amended by adding at

the end thereof the following new paragraph:

‘‘(29) beginning with fiscal year 1999, a Federal Government

performance plan for the overall budget as provided for under

section 1115.’’.
Sec. 4 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 546

(b) PERFORMANCE PLANS AND REPORTS.—Chapter 11 of title 31,

United States Code, is amended by adding after section 1114 the

following new sections:

‘‘§ 1115. Performance plans

‘‘(a) In carrying out the provisions of section 1105(a)(29), the Director of the Office of Management and Budget shall require each

agency to prepare an annual performance plan covering each program activity set forth in the budget of such agency. Such plan

shall—

‘‘(1) establish performance goals to define the level of performance to be achieved by a program activity;

‘‘(2) express such goals in an objective, quantifiable, and

measurable form unless authorized to be in an alternative form

under subsection (b);

‘‘(3) briefly describe the operational processes, skills and

technology, and the human, capital, information, or other resources required to meet the performance goals;

‘‘(4) establish performance indicators to be used in measuring

or assessing the relevant outputs, service levels, and outcomes

of each program activity;

‘‘(5) provide a basis for comparing actual program results

with the established performance goals; and

‘‘(6) describe the means to be used to verify and validate

measured values.

‘‘(b) If an agency, in consultation with the Director of the Office

of Management and Budget, determines that it is not feasible to

express the performance goals for a particular program activity in

an objective, quantifiable, and measurable form, the Director of the

Office of Management and Budget may authorize an alternative

form. Such alternative form shall—

‘‘(1) include separate descriptive statements of—

‘‘(A)(i) a minimally effective program, and

‘‘(ii) a successful program, or

‘‘(B) such alternative as authorized by the Director of the

Office of Management and Budget, with sufficient precision and in such terms that would allow for an accurate,

independent determination of whether the program activity’s performance meets the criteria of the description; or

‘‘(2) state why it is infeasible or impractical to express a performance goal in any form for the program activity.

‘‘(c) For the purpose of complying with this section, an agency

may aggregate, disaggregate, or consolidate program activities, except that any aggregation or consolidation may not omit or minimize the significance of any program activity constituting a major

function or operation for the agency.

‘‘(d) An agency may submit with its annual performance plan an

appendix covering any portion of the plan that—

‘‘(1) is specifically authorized under criteria established by an

Executive order to be kept secret in the interest of national defense or foreign policy; and

‘‘(2) is properly classified pursuant to such Executive order.

‘‘(e) The functions and activities of this section shall be considered to be inherently Governmental functions. The drafting of per-
547 Sec. 4 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

formance plans under this section shall be performed only by Federal employees.

‘‘(f) For purposes of this section and sections 1116 through 1119,

and sections 9703 and 9704 the term—

‘‘(1) ‘agency’ has the same meaning as such term is defined

under section 306(f) of title 5;

‘‘(2) ‘outcome measure’ means an assessment of the results of

a program activity compared to its intended purpose;

‘‘(3) ‘output measure’ means the tabulation, calculation, or

recording of activity or effort and can be expressed in a quantitative or qualitative manner;

‘‘(4) ‘performance goal’ means a target level of performance

expressed as a tangible, measurable objective, against which

actual achievement can be compared, including a goal expressed as a quantitative standard, value, or rate;

‘‘(5) ‘performance indicator’ means a particular value or characteristic used to measure output or outcome;

‘‘(6) ‘program activity’ means a specific activity or project as

listed in the program and financing schedules of the annual

budget of the United States Government; and

‘‘(7) ‘program evaluation’ means an assessment, through objective measurement and systematic analysis, of the manner

and extent to which Federal programs achieve intended objectives.

‘‘§ 1116. Program performance reports

‘‘(a) No later than March 31, 2000, and no later than March 31

of each year thereafter, the head of each agency shall prepare and

submit to the President and the Congress, a report on program performance for the previous fiscal year.

‘‘(b)(1) Each program performance report shall set forth the performance indicators established in the agency performance plan

under section 1115, along with the actual program performance

achieved compared with the performance goals expressed in the

plan for that fiscal year.

‘‘(2) If performance goals are specified in an alternative form

under section 1115(b), the results of such program shall be described in relation to such specifications, including whether the

performance failed to meet the criteria of a minimally effective or

successful program.

‘‘(c) The report for fiscal year 2000 shall include actual results for

the preceding fiscal year, the report for fiscal year 2001 shall include actual results for the two preceding fiscal years, and the report for fiscal year 2002 and all subsequent reports shall include

actual results for the three preceding fiscal years.

‘‘(d) Each report shall—

‘‘(1) review the success of achieving the performance goals of

the fiscal year;

‘‘(2) evaluate the performance plan for the current fiscal year

relative to the performance achieved toward the performance

goals in the fiscal year covered by the report;

‘‘(3) explain and describe, where a performance goal has not

been met (including when a program activity’s performance is

determined not to have met the criteria of a successful pro-
Sec. 5 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 548

gram activity under section 1115(b)(1)(A)(ii) or a corresponding

level of achievement if another alternative form is used)—

‘‘(A) why the goal was not met;

‘‘(B) those plans and schedules for achieving the established performance goal; and

‘‘(C) if the performance goal is impractical or infeasible,

why that is the case and what action is recommended;

‘‘(4) describe the use and assess the effectiveness in achieving performance goals of any waiver under section 9703 of this

title; and

‘‘(5) include the summary findings of those program evaluations completed during the fiscal year covered by the report.

‘‘(e) An agency head may include all program performance information required annually under this section in an annual financial

statement required under section 3515 if any such statement is

submitted to the Congress no later than March 31 of the applicable

fiscal year.

‘‘(f) The functions and activities of this section shall be considered

to be inherently Governmental functions. The drafting of program

performance reports under this section shall be performed only by

Federal employees.

‘‘§ 1117. Exemption

‘‘The Director of the Office of Management and Budget may exempt from the requirements of sections 1115 and 1116 of this title

and section 306 of title 5, any agency with annual outlays of

$20,000,000 or less.’’.

SEC. 5. MANAGERIAL ACCOUNTABILITY AND FLEXIBILITY.

(a) MANAGERIAL ACCOUNTABILITY AND FLEXIBILITY.—Chapter 97

of title 31, United States Code, is amended by adding after section

9702, the following new section:

‘‘§ 9703. Managerial accountability and flexibility

‘‘(a) Beginning with fiscal year 1999, the performance plans required under section 1115 may include proposals to waive administrative procedural requirements and controls, including specification of personnel staffing levels, limitations on compensation or remuneration, and prohibitions or restrictions on funding transfers

among budget object classification 20 and subclassifications 11, 12,

31, and 32 of each annual budget submitted under section 1105, in

return for specific individual or organization accountability to

achieve a performance goal. In preparing and submitting the performance plan under section 1105(a)(29), the Director of the Office

of Management and Budget shall review and may approve any proposed waivers. A waiver shall take effect at the beginning of the

fiscal year for which the waiver is approved.

‘‘(b) Any such proposal under subsection (a) shall describe the anticipated effects on performance resulting from greater managerial

or organizational flexibility, discretion, and authority, and shall

quantify the expected improvements in performance resulting from

any waiver. The expected improvements shall be compared to current actual performance, and to the projected level of performance

that would be achieved independent of any waiver.
549 Sec. 6 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

‘‘(c) Any proposal waiving limitations on compensation or remuneration shall precisely express the monetary change in compensation or remuneration amounts, such as bonuses or awards, that

shall result from meeting, exceeding, or failing to meet performance goals.

‘‘(d) Any proposed waiver of procedural requirements or controls

imposed by an agency (other than the proposing agency or the Office of Management and Budget) may not be included in a performance plan unless it is endorsed by the agency that established the

requirement, and the endorsement included in the proposing agency’s performance plan.

‘‘(e) A waiver shall be in effect for one or two years as specified

by the Director of the Office of Management and Budget in approving the waiver. A waiver may be renewed for a subsequent year.

After a waiver has been in effect for three consecutive years, the

performance plan prepared under section 1115 may propose that a

waiver, other than a waiver of limitations on compensation or remuneration, be made permanent.

‘‘(f) For purposes of this section, the definitions under section

1115(f) shall apply.’’.

SEC. 6. PILOT PROJECTS.

(a) PERFORMANCE PLANS AND REPORTS.—Chapter 11 of title 31,

United States Code, is amended by inserting after section 1117 (as

added by section 4 of this Act) the following new section:

‘‘§ 1118. Pilot projects for performance goals

‘‘(a) The Director of the Office of Management and Budget, after

consultation with the head of each agency, shall designate not less

than ten agencies as pilot projects in performance measurement for

fiscal years 1994, 1995, and 1996. The selected agencies shall reflect a representative range of Government functions and capabilities in measuring and reporting program performance.

‘‘(b) Pilot projects in the designated agencies shall undertake

the preparation of performance plans under section 1115, and

program performance reports under section 1116, other than

section 1116(c), for one or more of the major functions and operations of the agency. A strategic plan shall be used when

preparing agency performance plans during one or more years

of the pilot period.

‘‘(c) No later than May 1, 1997, the Director of the Office of Management and Budget shall submit a report to the President and to

the Congress which shall—

‘‘(1) assess the benefits, costs, and usefulness of the plans

and reports prepared by the pilot agencies in meeting the purposes of the Government Performance and Results Act of 1993;

‘‘(2) identify any significant difficulties experienced by the

pilot agencies in preparing plans and reports; and

‘‘(3) set forth any recommended changes in the requirements

of the provisions of Government Performance and Results Act

of 1993, section 306 of title 5, sections 1105, 1115, 1116, 1117,

1119 and 9703 of this title, and this section.’’.

(b) MANAGERIAL ACCOUNTABILITY AND FLEXIBILITY.—Chapter 97

of title 31, United States Code, is amended by inserting after sec-
Sec. 6 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 550

tion 9703 (as added by section 5 of this Act) the following new section:

‘‘§ 9704. Pilot projects for managerial accountability and

flexibility

‘‘(a) The Director of the Office of Management and Budget shall

designate not less than five agencies as pilot projects in managerial

accountability and flexibility for fiscal years 1995 and 1996. Such

agencies shall be selected from those designated as pilot projects

under section 1118 and shall reflect a representative range of Government functions and capabilities in measuring and reporting program performance.

‘‘(b) Pilot projects in the designated agencies shall include proposed waivers in accordance with section 9703 for one or more of

the major functions and operations of the agency.

‘‘(c) The Director of the Office of Management and Budget shall

include in the report to the President and to the Congress required

under section 1118(c)—

‘‘(1) an assessment of the benefits, costs, and usefulness of

increasing managerial and organizational flexibility, discretion,

and authority in exchange for improved performance through

a waiver; and

‘‘(2) an identification of any significant difficulties experienced by the pilot agencies in preparing proposed waivers.

‘‘(d) For purposes of this section the definitions under section

1115(f) shall apply.’’.

(c) PERFORMANCE BUDGETING.—Chapter 11 of title 31, United

States Code, is amended by inserting after section 1118 (as added

by section 6 of this Act) the following new section:

‘‘§ 1119. Pilot projects for performance budgeting

‘‘(a) The Director of the Office of Management and Budget, after

consultation with the head of each agency shall designate not less

than five agencies as pilot projects in performance budgeting for

fiscal years 1998 and 1999. At least three of the agencies shall be

selected from those designated as pilot projects under section 1118,

and shall also reflect a representative range of Government functions and capabilities in measuring and reporting program performance.

‘‘(b) Pilot projects in the designated agencies shall cover the preparation of performance budgets. Such budgets shall present, for one

or more of the major functions and operations of the agency, the

varying levels of performance, including outcome-related performance, that would result from different budgeted amounts.

‘‘(c) The Director of the Office of Management and Budget shall

include, as an alternative budget presentation in the budget submitted under section 1105 for fiscal year 1999, the performance

budgets of the designated agencies for this fiscal year.

‘‘(d) No later than March 31, 2001, the Director of the Office of

Management and Budget shall transmit a report to the President

and to the Congress on the performance budgeting pilot projects

which shall—
551 Sec. 7 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

‘‘(1) assess the feasibility and advisability of including a performance budget as part of the annual budget submitted under

section 1105;

‘‘(2) describe any difficulties encountered by the pilot agencies in preparing a performance budget;

‘‘(3) recommend whether legislation requiring performance

budgets should be proposed and the general provisions of any

legislation; and

‘‘(4) set forth any recommended changes in the other requirements of the Government Performance and Results Act of

1993, section 306 of title 5, sections 1105, 1115, 1116, 1117,

and 9703 of this title, and this section.

‘‘(e) After receipt of the report required under subsection (d),

the Congress may specify that a performance budget be submitted as part of the annual budget submitted under section

1105.’’.

SEC. 7. UNITED STATES POSTAL SERVICE.

Part III of title 39, United States Code, is amended by adding at

the end thereof the following new chapter:

‘‘CHAPTER 28—STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT

‘‘Sec.

‘‘2801. ........... Definitions.

‘‘2802. ........... Strategic plans.

‘‘2803. ........... Performance plans.

‘‘2804. ........... Program performance reports.

‘‘2805. ........... Inherently Governmental functions.

‘‘§ 2801. Definitions

‘‘For purposes of this chapter the term—

‘‘(1) ‘outcome measure’ refers to an assessment of the results

of a program activity compared to its intended purpose;

‘‘(2) ‘output measure’ refers to the tabulation, calculation, or

recording of activity or effort and can be expressed in a quantitative or qualitative manner;

‘‘(3) ‘performance goal’ means a target level of performance

expressed as a tangible, measurable objective, against which

actual achievement shall be compared, including a goal expressed as a quantitative standard, value, or rate;

‘‘(4) ‘performance indicator’ refers to a particular value or

characteristic used to measure output or outcome;

‘‘(5) ‘program activity’ means a specific activity related to the

mission of the Postal Service; and

‘‘(6) ‘program evaluation’ means an assessment, through objective measurement and systematic analysis, of the manner

and extent to which Postal Service programs achieve intended

objectives.

‘‘§ 2802. Strategic plans.

‘‘(a) No later than September 30, 1997, the Postal Service shall

submit to the President and the Congress a strategic plan for its

program activities. Such plan shall contain—

‘‘(1) a comprehensive mission statement covering the major

functions and operations of the Postal Service;
Sec. 7 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 552

‘‘(2) general goals and objectives, including outcome-related

goals and objectives, for the major functions and operations of

the Postal Service;

‘‘(3) a description of how the goals and objectives are to be

achieved, including a description of the operational processes,

skills and technology, and the human, capital, information, and

other resources required to meet those goals and objectives;

‘‘(4) a description of how the performance goals included in

the plan required under section 2803 shall be related to the

general goals and objectives in the strategic plan;

‘‘(5) an identification of those key factors external to the

Postal Service and beyond its control that could significantly

affect the achievement of the general goals and objectives; and

‘‘(6) a description of the program evaluations used in establishing or revising general goals and objectives, with a schedule for future program evaluations.

‘‘(b) The strategic plan shall cover a period of not less than five

years forward from the fiscal year in which it is submitted, and

shall be updated and revised at least every three years.

‘‘(c) The performance plan required under section 2803 shall be

consistent with the Postal Service’s strategic plan. A performance

plan may not be submitted for a fiscal year not covered by a current strategic plan under this section.

‘‘(d) When developing a strategic plan, the Postal Service shall

solicit and consider the views and suggestions of those entities potentially affected by or interested in such a plan, and shall advise

the Congress of the contents of the plan.

‘‘§ 2803. Performance plans.

‘‘(a) The Postal Service shall prepare an annual performance plan

covering each program activity set forth in the Postal Service budget, which shall be included in the comprehensive statement presented under section 2401(g) of this title. Such plan shall—

‘‘(1) establish performance goals to define the level of performance to be achieved by a program activity;

‘‘(2) express such goals in an objective, quantifiable, and

measurable form unless an alternative form is used under subsection (b);

‘‘(3) briefly describe the operational processes, skills and

technology, and the human, capital, information, or other resources required to meet the performance goals;

‘‘(4) establish performance indicators to be used in measuring

or assessing the relevant outputs, service levels, and outcomes

of each program activity;

‘‘(5) provide a basis for comparing actual program results

with the established performance goals; and

‘‘(6) describe the means to be used to verify and validate

measured values.

‘‘(b) If the Postal Service determines that it is not feasible to express the performance goals for a particular program activity in an

objective, quantifiable, and measurable form, the Postal Service

may use an alternative form. Such alternative form shall—

‘‘(1) include separate descriptive statements of—

‘‘(A) a minimally effective program, and
553 Sec. 7 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

‘‘(B) a successful program, with sufficient precision and

in such terms that would allow for an accurate, independent determination of whether the program activity’s performance meets the criteria of either description; or

‘‘(2) state why it is infeasible or impractical to express a performance goal in any form for the program activity.

‘‘(c) In preparing a comprehensive and informative plan under

this section, the Postal Service may aggregate, disaggregate, or

consolidate program activities, except that any aggregation or consolidation may not omit or minimize the significance of any program activity constituting a major function or operation.

‘‘(d) The Postal Service may prepare a non-public annex to its

plan covering program activities or parts of program activities relating to—

‘‘(1) the avoidance of interference with criminal prosecution;

or

‘‘(2) matters otherwise exempt from public disclosure under

section 410(c) of this title.

‘‘§ 2804. Program performance reports.

‘‘(a) The Postal Service shall prepare a report on program performance for each fiscal year, which shall be included in the annual

comprehensive statement presented under section 2401(g) of this

title.

‘‘(b)(1) The program performance report shall set forth the performance indicators established in the Postal Service performance

plan, along with the actual program performance achieved compared with the performance goals expressed in the plan for that fiscal year.

‘‘(2) If performance goals are specified by descriptive statements

of a minimally effective program activity and a successful program

activity, the results of such program shall be described in relationship to those categories, including whether the performance failed

to meet the criteria of either category.

‘‘(c) The report for fiscal year 2000 shall include actual results for

the preceding fiscal year, the report for fiscal year 2001 shall include actual results for the two preceding fiscal years, and the report for fiscal year 2002 and all subsequent reports shall include

actual results for the three preceding fiscal years.

‘‘(d) Each report shall—

‘‘(1) review the success of achieving the performance goals of

the fiscal year;

‘‘(2) evaluate the performance plan for the current fiscal year

relative to the performance achieved towards the performance

goals in the fiscal year covered by the report;

‘‘(3) explain and describe, where a performance goal has not

been met (including when a program activity’s performance is

determined not to have met the criteria of a successful program activity under section 2803(b)(2))—

‘‘(A) why the goal was not met;

‘‘(B) those plans and schedules for achieving the established performance goal; and

‘‘(C) if the performance goal is impractical or infeasible,

why that is the case and what action is recommended; and
Sec. 8 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 554

‘‘(4) include the summary findings of those program evaluations completed during the fiscal year covered by the report.

‘‘§ 2805. Inherently Governmental functions.

‘‘The functions and activities of this chapter shall be considered

to be inherently Governmental functions. The drafting of strategic

plans, performance plans, and program performance reports under

this section shall be performed only by employees of the Postal

Service.’’.

SEC. 8. CONGRESSIONAL OVERSIGHT AND LEGISLATION.

(a) IN GENERAL.—Nothing in this Act shall be construed as limiting the ability of Congress to establish, amend, suspend, or annul

a performance goal. Any such action shall have the effect of superseding that goal in the plan submitted under section 1105(a)(29) of

title 31, United States Code.

(b) GAO REPORT.—No later than June 1, 1997, the Comptroller

General of the United States shall report to Congress on the implementation of this Act, including the prospects for compliance by

Federal agencies beyond those participating as pilot projects under

sections 1118 and 9704 of title 31, United States Code.

SEC. 9. TRAINING.

The Office of Personnel Management shall, in consultation with

the Director of the Office of Management and Budget and the

Comptroller General of the United States, develop a strategic planning and performance measurement training component for its

management training program and otherwise provide managers

with an orientation on the development and use of strategic planning and program performance measurement.

SEC. 10. APPLICATION OF ACT.

No provision or amendment made by this Act may be construed

as—

(1) creating any right, privilege, benefit, or entitlement for

any person who is not an officer or employee of the United

States acting in such capacity, and no person who is not an officer or employee of the United States acting in such capacity

shall have standing to file any civil action in a court of the

United States to enforce any provision or amendment made by

this Act; or

(2) superseding any statutory requirement, including any requirement under section 553 of title 5, United States Code.

SEC. 11. TECHNICAL AND CONFORMING AMENDMENTS.

(a) AMENDMENT TO TITLE 5, UNITED STATES CODE.—The table of

sections for chapter 3 of title 5, United States Code, is amended by

adding after the item relating to section 305 the following:

‘‘306. Strategic plans.’’.

(b) AMENDMENTS TO TITLE 31, UNITED STATES CODE.—

(1) AMENDMENT TO CHAPTER 11.—The table of sections for

chapter 11 of title 31, United States Code, is amended by adding after the item relating to section 1114 the following:

‘‘1115. Performance plans.

‘‘1116. Program performance reports.
555 Sec. 11 GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993

This Act has not been amended as of December 31, 1995.

‘‘1117. Exemptions.

‘‘1118. Pilot projects for performance goals.

‘‘1119. Pilot projects for performance budgeting.’’.

(2) AMENDMENT TO CHAPTER 97.—The table of sections for

chapter 97 of title 31, United States Code, is amended by adding after the item relating to section 9702 the following:

‘‘9703. Managerial accountability and flexibility.

‘‘9704. Pilot projects for managerial accountability and flexibility.’’.

(c) AMENDMENT TO TITLE 39, UNITED STATES CODE.—The table

of chapters for part III of title 39, United States Code, is amended

by adding at the end thereof the following new item:

‘‘28. Strategic planning and performance management 2801’’.

August 3, 1993.
556

GOVERNMENT MANAGEMENT REFORM ACT OF 1994

Public Law 103–356

(108 Stat. 3410)

AN ACT To provide a more effective, efficient, and responsive Government.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.—(a) SHORT

TITLE.—This Act may be cited as the ‘‘Government Management

Reform Act of 1994’’.

(b) TABLE OF CONTENTS.—The table of contents for this Act is as

follows:

SEC. 1. Short title and table of contents.

TITLE I—LIMITATION ON PAY

SEC. 101. Limitation on certain annual pay adjustments.

TITLE II—HUMAN RESOURCE

MANAGEMENT

SEC. 201. SES annual leave accumulation.

TITLE III—STREAMLINING

MANAGEMENT CONTROL

SEC. 301. Authority to increase efficiency in reporting to Congress.

TITLE IV—FINANCIAL MANAGEMENT

SEC. 401. Short title.

SEC. 402. Electronic payments.

SEC. 403. Franchise fund pilot programs.

SEC. 404. Simplification of management reporting process.

SEC. 405. Annual financial reports.

TITLE I—LIMITATION ON PAY

SEC. 101. LIMITATION ON CERTAIN ANNUAL PAY ADJUSTMENTS.—

Effective as of December 31, 1994—

(1) section 601(a)(2) of the Legislative Reorganization Act of

1946 (2 U.S.C. 31(2)) is amended—
557 Sec. 201 GOVERNMENT MANAGEMENT REFORM ACT OF 1994

(A) by striking out ‘‘(2) Effective’’ and inserting in lieu

thereof ‘‘(2)(A) Subject to subparagraph (B), effective’’; and

(B) by adding at the end thereof the following:

‘‘(B) In no event shall the percentage adjustment taking

effect under subparagraph (A) in any calendar year (before

rounding), in any rate of pay, exceed the percentage adjustment taking effect in such calendar year under section

5303 of title 5, United States Code, in the rates of pay

under the General Schedule.’’;

(2) section 104 of title 3, United States Code, is amended—

(A) in the first sentence by inserting ‘‘(a)’’ before ‘‘The’’;

(B) in the second sentence by striking out ‘‘Effective’’ and

inserting in lieu thereof ‘‘Subject to subsection (b), effective’’; and

(C) by adding at the end thereof the following:

‘‘(b) In no event shall the percentage adjustment taking effect

under the second and third sentences of subsection (a) in any calendar year (before rounding) exceed the percentage adjustment

taking effect in such calendar year under section 5303 of title 5 in

the rates of pay under the General Schedule.’’;

(3) section 5318 of title 5, United States Code, is amended—

(A) in the first sentence by striking out ‘‘Effective’’ and

inserting in lieu thereof ‘‘(a) Subject to subsection (b), effective’’; and

(B) by adding at the end thereof the following:

‘‘(b) In no event shall the percentage adjustment taking effect

under subsection (a) in any calendar year (before rounding), in any

rate of pay, exceed the percentage adjustment taking effect in such

calendar year under section 5303 in the rates of pay under the

General Schedule.’’; and

(4) section 461(a) of title 28, United States Code, is amended—

(A) by striking out ‘‘(a) Effective’’ and inserting in lieu

thereof ‘‘(a)(1) Subject to paragraph (2), effective’’

(B) by adding at the end thereof the following:

‘‘(2) In no event shall the percentage adjustment taking effect under paragraph (1) in any calendar year (before rounding), in any salary rate, exceed the percentage adjustment taking effect in such calendar year under section 5303 of title 5

in the rates of pay under the General Schedule.’’.

TITLE II—HUMAN RESOURCE MANAGEMENT

SEC. 201. SES ANNUAL LEAVE ACCUMULATION.—(a) IN GENERAL.—Effective on the first day of the first applicable pay period

beginning after the date of the enactment of this Act, subsection (f)

of section 6304 of title 5, United States Code, is amended to read

as follows:

‘‘(f)(1) This subsection applies with respect to annual leave

accrued by an individual while serving in a position in—

‘‘(A) the Senior Executive Service;

‘‘(B) the Senior Foreign Service;

‘‘(C) the Defense Intelligence Senior Executive Service;

‘‘(D) the Senior Cryptologic Executive Service; or
Sec. 301 GOVERNMENT MANAGEMENT REFORM ACT OF 1994 558

‘‘(E) the Federal Bureau of Investigation and Drug Enforcement Administration Senior Executive Service.

‘‘(2) For purposes of applying any limitation on accumulation

under this section with respect to any annual leave described

in paragraph (1)—

‘‘(A) ‘30 days’ in subsection (a) shall be deemed to read

‘90 days’; and

‘‘(B) ‘45 days’ in subsection (b) shall be deemed to read

‘90 days’.’’.

(b) USE OF EXCESS LEAVE.—Notwithstanding the amendment

made by subsection (a), in the case of an employee who, on the effective date of subsection (a), is subject to subsection (f) of section

6304 of title 5, United States Code, and who has to such employee’s

credit annual leave in excess of the maximum accumulation otherwise permitted by subsection (a) or (b) of section 6304 (determined

applying the amendment made by subsection (a)), such excess annual leave shall remain to the credit of the employee and be subject

to reduction, in the same manner as provided in subsection (c) of

section 6304.

TITLE III—STREAMLINING MANAGEMENT CONTROL

SEC. 301. AUTHORITY TO INCREASE EFFICIENCY IN REPORTING TO

CONGRESS.—(a) PURPOSE.—The purpose of this title is to improve

the efficiency of executive branch performance in implementing

statutory requirements for reports to Congress and committees of

Congress such as the elimination or consolidation of duplicative or

obsolete reporting requirements and adjustments to deadlines that

shall provide for more efficient workload distribution or improve

the quality of reports.

(b) AUTHORITY OF THE DIRECTOR.—The Director of the Office of

Management and Budget may publish annually in the budget submitted by the President to the Congress, recommendations for consolidation, elimination, or adjustments in frequency and due dates

of statutorily required periodic reports to the Congress or committees of Congress. For each recommendation, the Director shall provide an individualized statement of the reasons that support the

recommendation. In addition, for each report for which a recommendation is made, the Director shall state with specificity the

exact consolidation, elimination, or adjustment in frequency or due

date that is recommended.

(c) RECOMMENDATIONS.—The Director’s recommendations shall

be consistent with the purpose stated in subsection (a).

(d) CONSULTATION.—Before the publication of the recommendations under subsection (b), the Director or his designee shall consult with the appropriate congressional committees concerning the

recommendations.

TITLE IV—FINANCIAL MANAGEMENT

SEC. 401. SHORT TITLE.—This title may be cited as the ‘‘Federal

Financial Management Act of 1994’’.

SEC. 402. ELECTRONIC PAYMENTS.—(a) IN GENERAL.—Section

3332 of title 31, United States Code, is amended to read as follows:
559 Sec. 403 GOVERNMENT MANAGEMENT REFORM ACT OF 1994

‘‘§ 3332. Required direct deposit.

‘‘(a)(1) Notwithstanding any other provision of law, all Federal

wage, salary, and retirement payments shall be paid to recipients

of such payments by electronic funds transfer, unless another

method has been determined by the Secretary of the Treasury to

be appropriate.

‘‘(2) Each recipient of Federal wage, salary, or retirement payments shall designate one or more financial institutions or other

authorized payment agents and provide the payment certifying or

authorizing agency information necessary for the recipient to receive electronic funds transfer payments through each institution

so designated.

‘‘(b)(1) The head of each agency shall waive the requirements of

subsection (a) of this section for a recipient of Federal wage, salary,

or retirement payments authorized or certified by the agency upon

written request by such recipient.

‘‘(2) Federal wage, salary, or retirement payments shall be paid

to any recipient granted a waiver under paragraph (1) of this subsection by any method determined appropriate by the Secretary of

the Treasury.

‘‘(c)(1) The Secretary of the Treasury may waive the requirements of subsection (a) of this section for any group of recipients

upon request by the head of an agency under standards prescribed

by the Secretary of the Treasury.

‘‘(2) Federal wage, salary, or retirement payments shall be paid

to any member of a group granted a waiver under paragraph (1)

of this subsection by any method determined appropriate by the

Secretary of the Treasury.

‘‘(d) This section shall apply only to recipients of Federal wage

or salary payments who begin to receive such payments on or after

January 1, 1995, and recipients of Federal retirement payments

who begin to receive such payments on or after January 1, 1995.

‘‘(e) The crediting of the amount of a payment to the appropriate

account on the books of a financial institution or other authorized

payment agent designated by a payment recipient under this section shall constitute a full acquittance to the United States for the

amount of the payment.’’.

(b) TECHNICAL AND CONFORMING AMENDMENT.—The table of sections for chapter 33 of title 31, United States Code, is amended by

amending the item for section 3332 to read:

‘‘3332. Required direct deposit.’’.

SEC. 403. FRANCHISE FUND PILOT PROGRAMS.—(a) ESTABLISHMENT.—There is authorized to be established on a pilot program

basis in each of six executive agencies a franchise fund. The Director of the Office of Management and Budget, after consultation

with the chairman and ranking members of the Committees on Appropriations and Governmental Affairs of the Senate, and the Committees on Appropriations and Government Operations of the

House of Representatives, shall designate the agencies.

(b) USES.—Each such fund may provide, consistent with guidelines established by the Director of the Office of Management and

Budget, such common administrative support services to the agen-
Sec. 404 GOVERNMENT MANAGEMENT REFORM ACT OF 1994 560

cy and to other agencies as the head of such agency, with the concurrence of the Director, determines can be provided more efficiently through such a fund than by other means. To provide such

services, each such fund is authorized to acquire the capital equipment, automated data processing systems, and financial management and management information systems needed. Services shall

be provided by such funds on a competitive basis.

(c) FUNDING.—(1) There are authorized to be appropriated to the

franchise fund of each agency designated under subsection (a) such

funds as are necessary to carry out the purposes of the fund, to remain available until expended. To the extent that unexpended balances remain available in other accounts for the purposes to be carried out by the fund, the head of the agency may transfer such balances to the fund.

(2) Fees for services shall be established by the head of the agency at a level to cover the total estimated costs of providing such

services. Such fees shall be deposited in the agency’s fund to remain available until expended, and may be used to carry out the

purposes of the fund.

(3) Existing inventories, including inventories on order, equipment, and other assets or liabilities pertaining to the purposes of

the fund may be transferred to the fund.

(d) REPORT ON PILOT PROGRAMS.—Within 6 months after the end

of fiscal year 1997, the Director of the Office of Management and

Budget shall forward a report on the results of the pilot programs

to the Committees on Appropriations of the Senate and of the

House of Representatives, and to the Committee on Governmental

Affairs of the Senate and the Committee on Government Operations of the House of Representatives. The report shall contain the

financial and program performance results of the pilot programs,

including recommendations for—

(1) the structure of the fund;

(2) the composition of the funding mechanism;

(3) the capacity of the fund to promote competition; and

(4) the desirability of extending the application and implementation of franchise funds to other Federal agencies.

(e) PROCUREMENT.—Nothing in this section shall be construed as

relieving any agency of any duty under applicable procurement

laws.

(f) TERMINATION.—The provisions of this section shall expire on

October 1, 1999.

SEC. 404. SIMPLIFICATION OF MANAGEMENT REPORTING PROCESS.—(a) IN GENERAL.—To improve the efficiency of executive

branch performance in implementing statutory requirements for financial management reporting to the Congress and its committees,

the Director of the Office of Management and Budget may adjust

the frequency and due dates of or consolidate any statutorily required reports of agencies to the Office of Management and Budget

or the President and of agencies or the Office of Management and

Budget to the Congress under any laws for which the Office of

Management and Budget has financial management responsibility,

including—

(1) chapters 5, 9, 11, 33, 35, 37, 39, 75, and 91 of title 31,

United States Code;
561 Sec. 405 GOVERNMENT MANAGEMENT REFORM ACT OF 1994

(2) the Federal Civil Penalties Inflation Adjustment Act of

1990 (28 U.S.C. 2461 note; Public Law 101–410; 104 Stat. 890).

(b) APPLICATION.—The authority provided in subsection (a) shall

apply only to reports of agencies to the Office of Management and

Budget or the President and of agencies or the Office of Management and Budget to the Congress required by statute to be submitted between January 1, 1995, and September 30, 1997.

(c) ADJUSTMENTS IN REPORTING.—The Director may consolidate

or adjust the frequency and due dates of any statutorily required

reports under subsections (a) and (b) only after—

(1) consultation with the Chairman of the Senate Committee

on Governmental Affairs and the Chairman of the House of

Representatives Committee on Government Operations; and

(2) written notification to the Congress, no later than February 8 of each fiscal year covered under subsection (b) for

those reports required to be submitted during that fiscal year.

SEC. 405. ANNUAL FINANCIAL REPORTS.—(a) FINANCIAL STATEMENTS.—Section 3515 of title 31, United States Code, is amended

to read as follows:

‘‘§ 3515. Financial statements of agencies.

‘‘(a) Not later than March 1 of 1997 and each year thereafter, the

head of each executive agency identified in section 901(b) of this

title shall prepare and submit to the Director of the Office of Management and Budget an audited financial statement for the preceding fiscal year, covering all accounts and associated activities of

each office, bureau, and activity of the agency.

‘‘(b) Each audited financial statement of an executive agency

under this section shall reflect—

‘‘(1) the overall financial position of the offices, bureaus, and

activities covered by the statement, including assets and liabilities thereof; and

‘‘(2) results of operations of those offices, bureaus, and activities.

‘‘(c) The Director of the Office of Management and Budget shall

identify components of executive agencies that shall be required to

have audited financial statements meeting the requirements of

subsection (b).

‘‘(d) The Director of the Office of Management and Budget shall

prescribe the form and content of the financial statements of executive agencies under this section, consistent with applicable accounting and financial reporting principles, standards, and requirements.

‘‘(e) The Director of the Office of Management and Budget may

waive the application of all or part of subsection (a) for financial

statements required for fiscal years 1996 and 1997.

‘‘(f) Not later than March 1 of 1995 and 1996, the head of each

executive agency identified in section 901(b) of this title and designated by the Director of the Office of Management and Budget

shall prepare and submit to the Director of the Office of Management and Budget an audited financial statement for the preceding

fiscal year, covering all accounts and associated activities of each

office, bureau, and activity of the agency.
Sec. 405 GOVERNMENT MANAGEMENT REFORM ACT OF 1994 562

*This Act has not been amended as of December 31, 1995.

‘‘(g) Not later than March 31 of 1995 and 1996, for executive

agencies not designated by the Director of the Office of Management and Budget under subsection (f), the head of each executive

agency identified in section 901(b) of this title shall prepare and

submit to the Director of the Office of Management and Budget a

financial statement for the preceding fiscal year, covering—

‘‘(1) each revolving fund and trust fund of the agency; and

‘‘(2) to the extent practicable, the accounts of each office, bureau, and activity of the agency which performed substantial

commercial functions during the preceding fiscal year.

‘‘(h) For purposes of subsection (g), the term ‘commercial functions’ includes buying and leasing of real estate, providing insurance, making loans and loan guarantees, and other credit programs

and any activity involving the provision of a service or thing for

which a fee, royalty, rent, or other charge is imposed by an agency

for services and things of value it provides.’’.

(b) AUDITS BY AGENCIES.—Subsection 3521(f) of title 31, United

States Code, is amended to read as follows:

‘‘(f)(1) For each audited financial statement required under subsections (a) and (f) of section 3515 of this title, the person who audits the statement for purpose of subsection (e) of this section shall

submit a report on the audit to the head of the agency. A report

under this subsection shall be prepared in accordance with generally accepted government auditing standards.

‘‘(2) Not later than June 30 following the fiscal year for which a

financial statement is submitted under subsection (g) of section

3515 of this title, the person who audits the statement for purpose

of subsection (e) of this section shall submit a report on the audit

to the head of the agency. A report under this subsection shall be

prepared in accordance with generally accepted government auditing standards.’’.

(c) GOVERNMENTWIDE FINANCIAL STATEMENT.—Section 331 of

title 31, United States Code, is amended by adding the following

new subsection:

‘‘(e)(1) Not later than March 31 of 1998 and each year thereafter,

the Secretary of the Treasury, in coordination with the Director of

the Office of Management and Budget, shall annually prepare and

submit to the President and the Congress an audited financial

statement for the preceding fiscal year, covering all accounts and

associated activities of the executive branch of the United States

Government. The financial statement shall reflect the overall financial position, including assets and liabilities, and results of operations of the executive branch of the United States Government,

and shall be prepared in accordance with the form and content requirements set forth by the Director of the Office of Management

and Budget.

‘‘(2) The Comptroller General of the United States shall audit the

financial statement required by this section.’’.

October 13, 1994*
563

APPENDIX I

A BRIEF EXPLANATION

OF THE

UNITED STATES CODE

565

17For example, Title 31, ‘‘Money and Finance,’’ Chapter 35, ‘‘Accounting and Collection,’’ section 3511, ‘‘Prescribing Accounting Requirements and Developing Accounting Systems’’ is generally referred to or cited as ‘‘31 U.S.C. 3511.’’

THE UNITED STATES CODE

The United States Code (Code or U.S.C.) is divided into 50 major

parts, called titles, by subject matter. The names of the 50 titles

appear at the end of this appendix. Each title is subdivided into

several categories and the most commonly used categories are

chapters and sections. The chapters in each title are identified by

subject matter and sequential numbers. However, the numbers in

the series may be omitted. Each sequential section within a chapter contains the chapter number followed by the sequential number

of the section.17

SECTIONS OF THE CODE CONTAINED IN THIS REPORT

This report consists primarily of selected provisions from Title

31, ‘‘Money and Finance,’’ since this title contains most of the laws

related to financial management. The provisions cover, among

other subjects, the roles and responsibilities of governmental agencies involved in financial management (including agency Chief Financial Officers); the congressional fiscal and budget process; appropriations and appropriation accounting; the public debt; depositing, keeping and paying money; accounting and collection; claims

process; prompt payment; and requirements for the single audit.

This report also includes selected sections from eight other titles

of the Code in addition to Title 31. Selected provisions of these

other titles provide further requirements of congressional budget

and fiscal operations and governmental functions and processes relating to financial management. The codified laws included in this

report were taken from the Code as of December 31, 1995. These

eight titles are:

Title 1, ‘‘General Provisions,’’

Title 2, ‘‘The Congress,’’

Title 5, ‘‘Government Organization and Employees,’’

Title 15, ‘‘Commerce and Trade,’’

Title 39, ‘‘Postal Service,’’

Title 40, ‘‘Public Buildings, Property and Works,’’

Title 41, ‘‘Public Contracts,’’ and

Title 44, ‘‘Public Printing and Documents.’’

ACTS INCLUDED IN THIS REPORT

This report also includes the recently enacted, but not yet codified, Debt Collection Improvement Act of 1996 and the Single Audit

Act Amendments of 1996, because of their direct relationship to financial management. Further, 11 major laws dealing with financial

management, although included in the provisions of the Code in
THE UNITED STATES CODE 566

this report, also appear as originally enacted to provide users a historical perspective.

STATUTES AND PUBLIC LAWS

Officially enacted laws are bound in volumes (referred to as

‘‘Statutes at Large’’) in chronological order of enactment. When citing a particular law, the volume number followed by the designation of ‘‘Stat.’’ (statute), followed by the page number of the volume

is used. For example, the Chief Financial Officers Act of 1990,

would be cited as ‘‘104 Stat. 2838,’’ meaning the 104th volume of

the statutes at large, page 2,838.

Beginning in 1957, laws have been assigned Public law numbers.

The public law number contains two numbers separated by a dash.

The first number indicates the Congress and the second number indicates the law number. For example, the Chief Financial Officers

Act of 1990, is Public Law 101–576; the first number indicating the

101st Congress and the second the law number.

Prior to 1957, statute citations usually included a chapter number. For example, the Budget and Accounting Act of 1921, is cited

as ‘‘Chapter 18, 42 Stat. 20.’’
567

TITLES OF THE UNITED STATES CODE

1. General Provisions.

2. The Congress.

3. The President.

4. Flag and Seal, Seat of Government,

and the States.

5. Government Organization and

Employees

6. Surety Bonds (See Title 31, Money

and Finance).

7. Agriculture.

8. Aliens and Nationality.

9. Arbitration.

10. Armed Forces.

11. Bankruptcy.

12. Banks and Banking.

13. Census.

14. Coast Guard.

15. Commerce and Trade.

16. Conservation.

17. Copyrights.

18. Crimes and Criminal Procedure.

19. Customs Duties.

20. Education.

21. Food and Drugs.

22. Foreign Relations and Intercourse.

23. Highways.

24. Hospitals and Asylums.

25. Indians.

26. Internal Revenue Code.

27. Intoxicating Liquors.

28. Judiciary and Judicial Procedure.

29. Labor.

30. Minerals and Mining.

31. Money and Finance

32. National Guard.

33. Navigation and Navigable Waters.

34. Navy (See Title 10, Armed Forces).

35. Patents.

36. Patriotic Societies and Observances.

37. Pay and Allowances of the

Uniformed Services.

38. Veterans’ Benefits.

39. Postal Service.

40. Public Buildings, Property, and

Works.

41. Public Contracts.

42. The Public Health and Welfare.

43. Public Lands.

44. Public Printing and Documents.

45. Railroads.

46. Shipping.

47. Telegraphs, Telephones, and

Radiotelegraphs.

48. Territories and Insular Possessions.

49. Transportation.

50. War and National Defense.

569

APPENDIX II

A BRIEF EXPLANATION

OF THE

CODE OF FEDERAL REGULATIONS

571

18 Although the C.F.R. contains 50 titles, as does the Code, it is organized differently from

the Code. Consequently, requirements related to a specific subject matter covered in one section

of the Code may appear in several titles of the C.F.R. 19The C.F.R. citation contains the number of the title followed by the abbreviation ‘‘C.F.R.,’’

followed by the part number; such as 31 C.F.R. 333.

THE CODE OF FEDERAL REGULATIONS

The Code of Federal Regulations (C.F.R.) is a codification of the

general and permanent rules issued mostly by executive departments and agencies of the federal government. The C.F.R., published by the Director of the Federal Register, is a special edition

of the Federal Register containing a compilation of federal regulations.

The C.F.R. is divided into 50 parts called titles (48 active, two

reserved). The titles are listed on the following page. They represent broad areas subject to federal regulation.18 Each title is divided into chapters which usually bear the name of the issuing

agency. Each chapter is further subdivided into parts covering specific regulatory areas. The parts are numbered sequentially

throughout the title.19

The C.F.R. and the individual issues of the Federal Register

(after the latest revision of the C.F.R.) provide the latest version

of any given rule. Each title of the C.F.R., which is contained in

one or two separate volumes, is revised at least once each calendar

year.

The C.F.R. citations in this report are taken from the ‘‘C.F.R.

Index and Finding Aids,’’ revised as of January 1, 1995. The C.F.R.

citations, where applicable, appear at the end of each chapter of

the United States Code included in this report, with the section of

the Code listed sequentially followed by the applicable C.F.R.

citation(s). Of the 48 active titles of the C.F.R., 42 titles are cited

in this report.
572

TITLES OF THE CODE OF FEDERAL REGULATIONS

1. General Provisions.

2. (Reserved).

3. The President.

4. Accounts.

5. Administrative Personnel.

6. (Reserved).

7. Agriculture.

8. Aliens and Nationality.

9. Animals and Animal Products.

10. Energy.

11. Federal Elections.

12. Banks and Banking.

13. Business Credit and Assistance.

14. Aeronautics and Space.

15. Commerce and Foreign Trade.

16. Commercial Practices.

17. Commodity and Securities

Exchanges.

18. Conservation of Power and Water

Resources.

19. Customs Duties.

20. Employees’ Benefits.

21. Food and Drugs.

22. Foreign Relations.

23. Highways.

24. Housing and Urban

Development.

25. Indians.

26. Internal Revenue.

27. Alcohol, Tobacco Products and

Firearms.

28. Judicial Administration.

29. Labor.

30. Mineral Resources.

31. Money and Finance: Treasury.

32. National Defense.

33. Navigation and Navigable Waters.

34. Education.

35. Panama Canal.

36. Parks, Forests, and Public Property.

37. Patents, Trademarks, and

Copyrights.

38. Pensions, Bonuses, and Veterans’

Relief.

39. Postal Service.

40. Protection of Environment.

41. Public Contracts and Property

Management.

42. Public Health.

43. Public Lands: Interior.

44. Emergency Management Assistance.

45. Public Welfare.

46. Shipping.

47. Telecommunication.

48. Federal Acquisition Regulations

System.

49. Transportation.

50. Wildlife and Fisheries.
573

APPENDIX III

FINANCIAL MANAGEMENT ISSUANCES

OF THE

GENERAL ACCOUNTING OFFICE

575

The General Accounting Office

The General Accounting Office (GAO) was established by the

Budget and Accounting Act of 1921 (31 U.S.C. 702) to independently audit Government agencies. The Office is under the control

and direction of the Comptroller General of the United States who

is appointed by the President with the advice and consent of the

Senate for a term of 15 years. GAO is an investigative arm of the

Congress and is charged with examining all matters relating to the

receipt and disbursement of public funds. GAO’s primary role is to

ensure that the Congress has available for its use current, accurate, and complete financial management data. GAO also prescribes accounting principles and standards for the executive

branch; advises other federal agencies on fiscal and related policies

and procedures; and prescribes standards for auditing and evaluating Government programs.

This appendix is divided into two parts. The first contains a description of GAO’s issuances and the second contains a cross-index

listing of the sections of the Code in sequential order followed by

the related GAO issuance.

Description of Issuances

The primary sources of requirements and guidelines issued by

GAO related to financial management are contained in the Policy

and Procedures Manual and Government Auditing Standards as

explained below.

Policy Manual

The GAO Policy and Procedures Manual for Guidance of Federal

Agencies contains the requirements agencies are to follow in accounting, internal controls, and related financial management subjects. The manual is divided into eight major parts called titles.

The titles applicable to the Code in this report on financial management follow.

Title 2, ‘‘Accounting.’’ This title contains the accounting, accounting system, and internal control principles, standards, and related

requirements.

Appendix I, ‘‘Principles and Standards’’ .................................................. 31 U.S.C. 3511.

31 U.S.C. 3512(c).

31 U.S.C. 3512(d).

Appendix II, ‘‘Internal Control Standards’’ ............................................... 31 U.S.C. 3511.

31 U.S.C. 3512(b).

Appendix III, ‘‘Accounting Systems Standards’’ ....................................... 31 U.S.C. 3511.

Title 6, ‘‘Pay, Leave, and Allowances.’’ This title contains the internal control and related requirements pertaining to time and attendance and payroll. (31 U.S.C. 3511)
The General Accounting Office 576

Title 7, ‘‘Fiscal Procedures.’’ This title contains internal controls

and related requirements pertaining to receipt and payment of

funds and recording, using, and reporting budget authority. (31

U.S.C. 3511)

Copies of the GAO Policy and Procedures Manual can be obtained

in Room 1100, 700 4th Street NW, U.S. General Accounting Office, Washington, DC

20548, (202) 512–6000.

Auditing Standards

The Government Auditing Standards (also called the ‘‘Yellow

Book’’) contains the standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other

nongovernment organizations. These standards, often referred to as

generally accepted government auditing standards (GAGAS), are to

be followed by auditors and audit organizations when required by

law, regulation, agreement, or policy. The standards pertain to

auditors’ professional qualifications, the quality of the audit effort,

and the characteristics of professional and meaningful audit reports.

5 U.S.C. App. 3, Section 4; 31 U.S.C. 713; 31 U.S.C. 714; 31 U.S.C.

3523; 31 U.S.C. 7501; 31 U.S.C. 7503; and 31 U.S.C. 7505.

Copies of the Government Auditing Standards: 1994 Revision,

(GAO/OCG–94–4) is for sale by the Superintendent of Documents, U.S. Government

Printing Office, Washington, DC 20401. The stock number is 020–000–00–265–4.

CROSS-INDEX OF THE SECTIONS OF THE CODE FOLLOWED BY GAO

ISSUANCES

5 U.S.C. App. 3, Section 3 ........................................................................ Government Auditing Standards:

1994 Revision.

31 U.S.C. 713 ............................................................................................ Government Auditing Standards:

1994 Revision.

31 U.S.C. 714 ............................................................................................ Government Auditing Standards:

1994 Revision.

31 U.S.C. 3511 .......................................................................................... Policy and Procedures Manual, Title

2, Appendix I.

31 U.S.C. 3511 .......................................................................................... Policy and Procedures Manual, Title

2, Appendix II.

31 U.S.C. 3511 .......................................................................................... Policy and Procedures Manual, Title

2, Appendix III.

31 U.S.C. 3511 .......................................................................................... Policy and Procedures Manual, Title

6.

31 U.S.C. 3511 .......................................................................................... Policy and Procedures Manual, Title

7.

31 U.S.C. 3512(b) ..................................................................................... Policy and Procedures Manual, Title

2, Appendix II.

31 U.S.C. 3512(c) ..................................................................................... Policy and Procedures Manual, Title

2, Appendix I.

31 U.S.C. 3512(d) ..................................................................................... Policy and Procedures Manual, Title

2, Appendix I.

31 U.S.C. 3523 .......................................................................................... Government Auditing Standards:

1994 Revision.

31 U.S.C. 7501 .......................................................................................... Government Auditing Standards:

1994 Revision.

31 U.S.C. 7503 .......................................................................................... Government Auditing Standards:

1994 Revision.
577 The General Accounting Office

31 U.S.C. 7505 .......................................................................................... Government Auditing Standards:

1994 Revision.

579

APPENDIX IV

FINANCIAL MANAGEMENT ISSUANCES

OF THE

OFFICE OF MANAGEMENT AND BUDGET

581

THE OFFICE OF MANAGEMENT AND BUDGET

The Office of Management and Budget (OMB), formerly the Bureau of the Budget, was established in the Executive Office of the

President pursuant to Reorganization Plan No. 1 of 1939 (5 U.S.C.

app.). The Office is headed by the Director, who is appointed by the

President and confirmed by the Senate. OMB evaluates, formulates, and coordinates management procedures and program objectives within and among federal departments and agencies. The Office’s primary fiscal responsibilities include: assisting the President

in preparing the Budget and formulating the federal government’s

fiscal program; supervising the control of the budgetary administration of the Executive Branch; and establishing and overseeing

the implementation of financial management policies and requirements for the federal government.

This appendix is divided into two parts. The first contains a description of the OMB’s issuances pertaining to financial management requirements and the second contains a listing of the Code’s

section with the related OMB issuance.

DESCRIPTION OF ISSUANCES

The primary issuances of OMB related to financial management

requirements are its Circulars and Bulletins.

Circulars, identified by the letter ‘‘A’’ and containing a sequential

number in the order of issuance, are used when the nature of the

subject matter is of continuing use. Between 1952 and December

31, 1995, OMB issued 135 Circulars. Of the 135, 98 have been superseded or rescinded, leaving 37 still applicable. Of the 37, 18 pertain to the financial management requirements relating to the sections of the Code contained in this report. The applicable 18 are

listed below.

Number Contents U.S.C. Cite

A–11 .................................... Preparation and submission of budget estimates with emphasis on the preparation

of program performance information Revised June 1995.

5 U.S.C. 306, 31 U.S.C. 1105, 31 U.S.C.

1115, 31 U.S.C. 1116, 31 U.S.C. 1117, 31

U.S.C. 1118, 31 U.S.C. 1119, 31 U.S.C.

9703, 31 U.S.C. 9704, 39 U.S.C. 2801, 39

U.S.C. 2802, 39 U.S.C. 2803.

A–21 .................................... Cost Principles for Educational Institutions.

Revised 5–8–96.

31 U.S.C. 503, 41 U.S.C. 422.

A–25 .................................... User Charges. Guidelines for Federal agencies for assessing fees for Government

Services and for the sale and use of government property and resources. Revised

7–8–93.

31 U.S.C. 1111, 31 U.S.C. 9701.
582

Number Contents U.S.C. Cite

A–34 .................................... Instructions on Budget Execution, monitoring

Federal Outlays, obtaining exemptions

from GAO access to records, reporting requirements for unvouchered expenditures,

closing accounts, and monitoring Federal

employment. Revised 10–18–94.

31 U.S.C. 1321, 31 U.S.C. 1322, 31 U.S.C.

1323, 31 U.S.C. 1324, 31 U.S.C. 1511, 31

U.S.C. 1512, 31 U.S.C. 1513, 31 U.S.C.

1514, 31 U.S.C. 1515, 31 U.S.C. 1516, 31

U.S.C. 1517, 31 U.S.C. 1518, 31 U.S.C.

1519, 31 U.S.C. 1551, 31 U.S.C. 1552, 31

U.S.C. 1553, 31 U.S.C. 1554, 31 U.S.C.

1555, 31 U.S.C. 1556, 31 U.S.C. 1557, 31

U.S.C. 3524.

A–50 .................................... Audit follow-up. Policies and procedures for

use by executive agencies for following up

on audit reports issued by, GAO, OIG community, and other executive branch audit

organizations. Revised 9–29–82.

31 U.S.C. 720, 31 U.S.C. 3302, 31 U.S.C.

3711, 31 U.S.C. 3716, 31 U.S.C. 3717, 31

U.S.C. 3728.

A–73 .................................... Policies to be Followed in the Audit of Federal Operations and Programs. Revised 6–

20–83.

31 U.S.C. 503, 31 U.S.C. 1111.

A–87 .................................... Principles and Standards for determining

costs for Federal awards carried out

through grants, cost reimbursement contracts, and other agreements with State,

Local, and Indian Tribal Governments. Revised 5–4–95.

31 U.S.C. 503, 31 U.S.C. 1112.

A–94 .................................... Guidelines and Discount Rates for BenefitCost Analysis of Federal Programs. Issued

2–25–93.

31 U.S.C. 1111.

A–102 .................................. Establishment of consistency and uniformity

among Federal agencies in the management of grants and cooperative agreements with state, local, and Federally recognized Indian tribal governments. Revised 10–7–94.

31 U.S.C. 503.

A–110 .................................. Establishment of uniform administrative requirements among Federal agencies in the

administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations. Revised 11–19–93.

31 U.S.C. 503, 31 U.S.C. 1111.

A–122 .................................. Establishment of cost principles for determining costs of Federal grants, contracts,

and other agreements with non-profit organizations. Revised 9–29–95.

31 U.S.C. 1111.

A–123 .................................. Guidance to Federal managers on improving

the accountability and effectiveness of

Federal programs and operations by establishing, assessing, correcting, and reporting on management controls (Internal

Control Systems). Revised 6–21–95.

31 U.S.C. 3512.

A–125 .................................. Prompt Payments. Prescribed policies and

procedures in paying for property and

services acquired under Federal contracts

pursuant to the Prompt Payment Act of

1982, (as amended), and for entitlement

payments under the Agricultural Act of

1949. Revised 12–12–89.

31 U.S.C. 3903a.

A–127 .................................. Financial Management Systems. Prescribed

policies and standards for developing, operating, evaluating, and reporting on financial management systems. Revised 7–

23–93.

31 U.S.C. 1105, 31 U.S.C. 1113, 31 U.S.C.

3512.
583

Number Contents U.S.C. Cite

A–128 .................................. Audits of State and Local Governments. Audit

requirements for State and local governments that receive Federal aid and definition of Federal responsibilities for implementing and monitoring audits. Issued 4–

12–85.

31 U.S.C. 7505.

A–129 .................................. Policies for Federal credit programs and nontax receivables. Prescribed policies and

procedures for justifying, designing, budgeting, and managing Federal credit programs. Revised 1–11–93.

2 U.S.C. 661, 31 U.S.C. 902(a), 31 U.S.C.

1105a, 31 U.S.C. 1108, 31 U.S.C. 3719,

31 U.S.C. 3720.

A–133 .................................. Audits of institutions of higher education

and other non-profit institutions. Definition of Federal responsibilities for implementing and monitoring audit requirements for institutions of higher education

and other nonprofit institutions receiving

Federal awards. Issued 3–8–90.

31 U.S.C. 1104, 31 U.S.C. 1111.

A–134 .................................. Financial Accounting Principles and Standards. Establishment of policies and procedures for approving and publishing financial accounting principles, standards, and

interpretations. Issued 5–20–93.

31 U.S.C. 3511.

Bulletins, numbered in chronological order by fiscal year, are

used when the nature of the subject matter requires only a single

action by agencies or is transitory in nature. The following four

Bulletins in effect as of December 31, 1995 are applicable to financial management requirements:

Number Contents U.S.C. Cite

93–06 ..................... Audit Requirements for Federal Financial Statements. Issued 1–8–93.31 U.S.C. 3512, 31 U.S.C. 3515.

93–18 ..................... Audited Financial Statements. Required pilot

agencies defined by the 1990 CFO Act (P.L.

101–576) to submit audited financial statements to OMB and the Congress through

1996, and accelerated the submission date of

audited financial statements required by the

CFO Act. Issued 6–25–93.

31 U.S.C.1104e, 31 U.S.C.1105a, 31 U.S.C. 3515.

94–01 ..................... Form and Content of Agency Financial Statements (for financial statements beginning

with the year ending September 30, 1993). Issued 11–16–93.

31 U.S.C. 3515d.

94–09 ..................... Payments by Electronic Funds Transfer. Issued

8–15–94.

31 U.S.C. 503, 31 U.S.C. 1111, 31 U.S.C. 3335.

Copies of Circulars and Bulletins can be obtained from:

Executive Office of the President [Office of Management

and Budget], Publications Service; 725 17th St. NW, Room

2200; Washington, DC 20503; (202) 395–7332.

CROSS-INDEX OF SECTIONS OF THE CODE IN THIS REPORT OMB

CIRCULARS AND BULLETINS

2 U.S.C. 661 ............................. Circular A–129.

5 U.S.C. 306 ............................. Circular A–11.

31 U.S.C. 503 ........................... A–21, A–73, A–87, Circulars A–102, A–110.

31 U.S.C. 716 ........................... Circular A–34.
584

31 U.S.C. 720 ........................... Circular A–50.

31 U.S.C. 902(a) ...................... Circular A–129.

31 U.S.C. 1104 ......................... Bulletin 93–18, Circular A–133.

31 U.S.C. 1105(a) .................... Bulletin 93–18, Circular A–129.

31 U.S.C. 1105 ......................... Circulars A–11, A–127.

31 U.S.C. 1108 ......................... Circular A–129.

31 U.S.C. 1111 ......................... Bulletin 94–09, Circulars A–73, A–25, A–94, A 110, A–122, A–133.

31 U.S.C. 1112 ......................... Circular A–87.

31 U.S.C. 1113 ......................... Circular A–127.

31 U.S.C. 1115 ......................... Circular A–11.

31 U.S.C. 1116 ......................... Circular A–11.

31 U.S.C. 1117 ......................... Circular A–11.

31 U.S.C. 1118 ......................... Circular A–11.

31 U.S.C. 1119 ......................... Circular A–11.

31 U.S.C. 1321 ......................... Circular A–34.

31 U.S.C. 1322 ......................... Circular A–34.

31 U.S.C. 1323 ......................... Circular A–34.

31 U.S.C. 1324 ......................... Circular A–34.

31 U.S.C. 1511 ......................... Circular A–34.

31 U.S.C. 1512 ......................... Circular A–34.

31 U.S.C. 1513 ......................... Circular A–34.

31 U.S.C. 1514 ......................... Circular A–34.

31 U.S.C. 1515 ......................... Circular A–34.

31 U.S.C. 1516 ......................... Circular A–34.

31 U.S.C. 1517 ......................... Circular A–34.

31 U.S.C. 1518 ......................... Circular A–34.

31 U.S.C. 1519 ......................... Circular A–34.

31 U.S.C. 1551 ......................... Circular A–34.

31 U.S.C. 1552 ......................... Circular A–34.

31 U.S.C. 1553 ......................... Circular A–34.

31 U.S.C. 1554 ......................... Circular A–34.

31 U.S.C. 1555 ......................... Circular A–34.

31 U.S.C. 1556 ......................... Circular A–34.

31 U.S.C. 1557 ......................... Circular A–34.

31 U.S.C. 3302 ......................... Circular A–50.

31 U.S.C. 3335 ......................... Bulletin 94–09.

31 U.S.C. 3511 ......................... Circular A–134.

31 U.S.C. 3512 ......................... Bulletin 93–06, Circulars A–123, A–127.

31 U.S.C. 3515 ......................... Bulletins 93–06, 93–18.

31 U.S.C. 3515(d) .................... Bulletin 94–01.

31 U.S.C. 3719 ......................... Circular A–129.

31 U.S.C. 3711 ......................... Circular A–50.

31 U.S.C. 3716 ......................... Circular A–50.

31 U.S.C. 3717 ......................... Circular A–50.

31 U.S.C. 3719 ......................... Circular A–129.

31 U.S.C. 3720 ......................... Circular A–129.

31 U.S.C. 3728 ......................... Circular A–50.

31 U.S.C. 3903 (a) ................... Circular A–125.

31 U.S.C. 7505 ......................... Circular A–128.

31 U.S.C. 9701 ......................... Circular A–25.

31 U.S.C. 9703 ......................... Circular A–11.

31 U.S.C. 9704 ......................... Circular A–11.

39 U.S.C. 2801 ......................... Circular A–11.

39 U.S.C. 2802 ......................... Circular A–11.

39 U.S.C. 2803 ......................... Circular A–11.

41 U.S.C. 422 ........................... Circular A–21.
585

APPENDIX V

FINANCIAL MANAGEMENT ISSUANCES

OF THE

DEPARTMENT OF TREASURY

587

THE DEPARTMENT OF THE TREASURY

The Department of the Treasury (Treasury) was created by an

act of September 2, 1789 (31 U.S.C. 301 and 301 note). Many subsequent acts have figured in the development of Treasury, delegating new duties to its charge and establishing the numerous bureaus and divisions that now comprise the Treasury. Headed by the

Secretary, the Treasury performs four basic functions: formulating

and recommending economic, financial, tax, and fiscal policies;

serving as the financial agent for the U.S. Government; enforcing

the law; and manufacturing coins and currency. Its fiscal responsibilities also include managing the public debt by improving cash

management, debt collection, and credit administration on a government wide basis.

This appendix is divided into two parts. The first contains a description of Treasury’s issuances pertaining to financial management requirements and the second contains a cross-index listing of

the section of the Code in sequential order followed by the related

Treasury issuance.

DESCRIPTION OF ISSUANCES

The primary issuance of the Treasury related to financial management requirements is the Treasury Financial Manual (TFM).

The TFM contains six volumes, with only Volume 1 having parts

applicable to the sections of the Code included in this report. Volume 1 includes instructions for financial accounting and reporting

of all receipts and disbursements of the federal government. The

volume is divided into six parts, each part containing several chapters. The applicable parts and chapters of Volume 1 follow.

Chapter Contents U.S.C. Cite

Part 2, Central Accounting and Reporting

1000 Procedures and standard forms agencies are to use in reporting accounting transactions to Treasury.31 U.S.C. 3513.

1500 Description of accounts related to financial operations to be used by agencies ....... 31 U.S.C. 3513.

2000 Non-Expenditure Transactions ....................................................................................... 31 U.S.C. 3513.

2500 Expenditure Transactions between Appropriation, Fund, and Receipt Accounts ......... 31 U.S.C. 1535,

31 U.S.C. 3536.

3100 Instructions for Disbursing Officers’ Reports ............................................................... 31 U.S.C. 3521.

3200 Foreign currency accounting and reporting requirements ............................................ 31 U.S.C. 3513.

3300 Reports of agencies for which Treasury disburses: Statement of Transactions and

supporting documents.

31 U.S.C. 3512,

31 U.S.C. 3513.

3900 Integration of accounting results .................................................................................. 31 U.S.C. 3513.

4000 Federal Agencies’ Centralized Trial-Balance System (FACTS) ...................................... 31 U.S.C. 3513a.

4100 Credit and Debt Management Reporting ...................................................................... 31 U.S.C. 3513a.

4200 Required reports from agencies and government corporations on unexpended balances of appropriations and funds. (Year-End Closing Statements).31 U.S.C. 3513.

4300 Reporting requirements for accounts invested in Treasury Securities ......................... 31 U.S.C. 3513.

4500 Required reports on grants, credits, and contingent liabilities involving foreigners 31 U.S.C. 3513.

4600 Reporting requirements for Direct Loan and Loan Guarantee programs ..................... 31 U.S.C. 3513a.

Part 3, Payrolls, Deductions, and Withholdings

2000 Payroll vouchers. Procedures to be followed and standard forms to be used in preparing payrolls for the executive branch civilian employees.31 U.S.C. 3513.
588

Chapter Contents U.S.C. Cite

Part 4, Disbursing

1000 Prescribed procedures and forms governing certifying and disbursing transactions 31 U.S.C. 3321.

1100 Delegations and designations of authority for disbursing functions ........................... 31 U.S.C. 3321,

31 U.S.C. 3325.

2000 Check issue disbursing procedures ............................................................................... 31 U.S.C. 3511,

31 U.S.C. 3513.

2500 Procedures governing Treasury Financial Communications Systems (TFCS) payments 31 U.S.C. 3511,

31 U.S.C. 3513.

3000 Procedures covering imprest fund disbursing activities .............................................. 31 U.S.C. 3321.

4500 Procedures governing the use of government purchase cards .................................... 31 U.S.C. 3321,

31 U.S.C. 3322,

31 U.S.C. 3327,

31 U.S.C. 3335.

9000 Foreign Exchange. Policies and procedures governing purchase, custody, transfer,

sale, and use of foreign exchange.

31 U.S.C. 301.

Part 5, Deposit Regulations

1000 Forms and procedures for making deposits to the credit of the U. S. Treasury ......... See TFM, Vol. 1, Part 6,

Chapter 8000.

4600 Treasury automated lockbox network ............................................................................ 31 U.S.C. 3720(a).

4700 Plastic card collection network ..................................................................................... 31 U.S.C. 3720(a).

5000 Uncollected and lost checks .......................................................................................... 40 U.S.C. 725.

Part 6, Other Fiscal Matters

4000 Procedures and technical specifications for simultaneous online billing/collection

and payment of intragovernmental transactions.

31 U.S.C. 331,

31 U.S.C. 3513.

6000 Payment procedures upon expiration of an appropriation or continuing resolution .... 31 U.S.C. 3325,

31 U.S.C. 3326,

31 U.S.C. 3328.

7000 Forms and procedures for reporting integrated funding transactions for Federal assistance.31 U.S.C. 3513.

8000 Cash management procedures to ensure prudent practices ....................................... 31 U.S.C. 321,

31 U.S.C. 1535,

31 U.S.C. 3301,

31 U.S.C. 3302,

31 U.S.C. 3720.

9000 Procedures for securing government deposits in Federal agency accounts in nonTreasury institutions.31 U.S.C. 3301.

Copies of the TFM can be obtained from Department of

the Treasury, Financial Management Service, Directives

Management Branch, Room 5C16, 3700 East-West Highway,

Hyattsville, Maryland 20782, (202) 874–9939.

Cross-Index of Sections of the U.S.C. to Treasury Issuances.—

31 U.S.C. 321—TFM, Volume 1, Part 6, Chapter 8000.

31 U.S.C. 331—TFM, Volume 1, Part 6, Chapter 4000.

31 U.S.C. 1535—TFM, Volume 1, Part 2, Chapter 2500.

31 U.S.C. 1535—TFM, Volume 1, Part 6, Chapter 8000.

31 U.S.C. 3301—TFM, Volume 1, Part 6, Chapter 8000.

31 U.S.C. 3301—TFM, Volume 1, Part 6, Chapter 9000.

31 U.S.C. 3302—TFM, Volume 1, Part 6, Chapter 8000.

31 U.S.C. 3321—TFM, Volume 1, Part 2, Chapter 3100.

31 U.S.C. 3321—TFM, Volume 1, Part 4, Chapter 1000.

31 U.S.C. 3321—TFM, Volume 1, Part 4, Chapter 1100.

31 U.S.C. 3321—TFM, Volume 1, Part 4, Chapter 3000.

31 U.S.C. 3321—TFM, Volume 1, Part 4, Chapter 4500.

31 U.S.C. 3322—TFM, Volume 1, Part 4, Chapter 4500.

31 U.S.C. 3325—TFM, Volume 1, Part 4, Chapter 1100.

31 U.S.C. 3325—TFM, Volume 1, Part 6, Chapter 6000.

31 U.S.C. 3326—TFM, Volume 1, Part 6, Chapter 6000.
589

31 U.S.C. 3327—TFM, Volume 1, Part 4, Chapter 4500.

31 U.S.C. 3328—TFM, Volume 1, Part 6, Chapter 6000.

31 U.S.C. 3335—TFM, Volume 1, Part 4, Chapter 4500.

31 U.S.C. 3511—TFM, Volume 1, Part 4, Chapter 2000.

31 U.S.C. 3511—TFM, Volume 1, Part 4, Chapter 2500.

31 U.S.C. 3512—TFM, Volume 1, Part 2, Chapter 3300.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 1000.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 1500.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 3200.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 2000.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 3300.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 3900.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 4200.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 4300.

31 U.S.C. 3513—TFM, Volume 1, Part 2, Chapter 4500.

31 U.S.C. 3513—TFM, Volume 1, Part 3, Chapter 2000.

31 U.S.C. 3513—TFM, Volume 1, Part 4, Chapter 2000.

31 U.S.C. 3513—TFM, Volume 1, Part 4, Chapter 2500.

31 U.S.C. 3513—TFM, Volume 1, Part 6, Chapter 7000.

31 U.S.C. 3513a—TFM, Volume 1, Part 2, Chapter 4000.

31 U.S.C. 3513a—TFM, Volume 1, Part 2, Chapter 4100.

31 U.S.C. 3513a—TFM, Volume 1, Part 2, Chapter 4200.

31 U.S.C. 3720—TFM, Volume 1, Part 6, Chapter 8000.

31 U.S.C. 3720a—TFM, Volume 1, Part 5, Chapter 4600.

31 U.S.C. 3720a—TFM, Volume 1, Part 5, Chapter 4700.

31 U.S.C. 3513—TFM, Volume 1, Part 6, Chapter 4000.

40 U.S.C. 725—TFM, Volume 1, Part 5, Chapter 5000.

591

APPENDIX VI

THE JOINT FINANCIAL MANAGEMENT

IMPROVEMENT PROGRAM

593

JOINT FINANCIAL MANAGEMENT IMPROVEMENT

PROGRAM

REFERENCED TO 31 U.S.C. 3511

The Joint Financial Management Improvement Program (JFMIP)

is a cooperative undertaking of the Office of Management and

Budget, the General Accounting Office, the Department of the

Treasury, and the Office of Personnel Management to improve financial management practices throughout the government. One of

the JFMIP’s recent contributions has been its series on federal financial management system requirements:

Personnel/Payroll System Requirements (May 1990).

Travel System Requirements (January 1991).

Seized/Forfeited Asset System Requirements (March 1993).

Direct Loan System Requirements (December 1993).

Guaranteed Loan System Requirements (December 1993).

Framework for Federal Financial Management Systems

(January 1995).

Financial Management Systems Overview for Agency Leaders (May 1995).

Inventory System Requirements (June 1995)

Core Financial System Requirements (September 1995).

Improving Travel Management Governmentwide (December

1995).

For information or copies of issuances contact JFMIP at

441 G Street NW, Room 3711, Washington, DC 20548, (202)

512–9201.

595

APPENDIX VII

THE FEDERAL ACCOUNTING STANDARDS

ADVISORY BOARD

597

20This standard was approved in May 1996, but has not yet been issued.

Federal Accounting Standards Advisory Board

Referenced to 31 U.S.C. 3511

The Federal Accounting Standards Advisory Board (FASAB) was

established in 1990 by the Secretary of the Treasury, the Director

of the OMB, and the Comptroller General (principals) through a

Memorandum of Understanding. The nine-member FASAB was

created to consider and recommend to the principals for approval

accounting principles and standards for the federal government.

Approved recommendations only become effective as standards

when published by OMB and GAO.

As of December 31, 1995, the FASAB issued the following concept statements and accounting standards which have been approved.

Approved Concept Statements:

#1. ‘‘Objectives of Federal Financial Reporting,’’ September

1993.

#2. ‘‘Entity and Display,’’ June 1995.

Approved Accounting Standards:

#1. ‘‘Accounting for Selected Assets and Liabilities,’’ March

1993.

#2. ‘‘Accounting for Direct Loans and Loan Guarantees,’’

August 1993.

#3. ‘‘Accounting for Inventory and Related Property,’’ October 1993.

#4. ‘‘Managerial Cost Accounting Concepts and Standards,’’

July 1995.

#5. ‘‘Accounting for Liabilities of the Federal Government,’’

December 1995.

#6. ‘‘Accounting for Property, Plant, and Equipment,’’ October 1995.

The FASAB also issued two exposure drafts for comment as of

December 31, 1995, as follows.

‘‘Accounting for Revenue and Other Financing Sources,’’ July

1995.20

‘‘Supplementary Stewardship Reporting,’’ August 1995.

For information on obtaining copies of the FASAB recommendations and exposure drafts, the Memorandum of

Understanding, and its Mission Statement contact the

FASAB at 441 G Street NW, Washington, DC 20548, (202) 512–

7350.

599

APPENDIX VIII

THE COST ACCOUNTING

STANDARDS BOARD

601

Cost Accounting Standards Board

Referenced to 41 U.S.C. 422

The Cost Accounting Standards Board (CASB) was established as

an independent board within the OMB’s Office of Federal Procurement Policy. The CASB has exclusive authority to make, promulgate, amend, and rescind cost accounting standards and interpretations designed to achieve uniformity and consistency in cost accounting practices governing measurement, assignment, and allocation of costs to contracts and subcontracts with the federal government. The Board is a successor to the previous CASB which existed

from 1970 to 1980. The CASB standards and requirements are

codified in the Code of Federal Regulations (48 C.F.R. 9901 and

9903–9905).

Although the CASB standards and requirements primarily pertain to government contractors, they may be referred to as authoritative guidance by federal agencies in specific subject areas (for example, determining which specific costs are part of pension costs)

not covered by standards applicable to agencies.

For additional information, contact the Cost Accounting

Standards Board, Office of Federal Procurement Policy, Office of Management and Budget, Washington, DC 20503,

(202) 395–3254.

603

APPENDIX IX

POPULAR NAMES OF SELECTED

MAJOR LAWS CROSS-INDEXED

TO SECTIONS OF THE

UNITED STATES CODE AND

STATUTE OR PUBLIC LAW

605

Popular Names of Selected Major Laws Cross-Indexed to Sections of the United States Code and

Statute or Public Law

The popular names of selected major laws related to federal financial management that appear below are cross-indexed to (1)

sections of the Code contained in this report and (2) a statute citation or public law number. The Code indexed is the U.S.C.A. as of

December 31, 1995. The statute or public law citations relate only

to the listed law and do not include subsequent amendments.

As explained in appendix I, public law numbers do not exist for

laws enacted prior to 1957. Therefore, the statute citation is provided for laws enacted prior to 1957 and public law numbers are

provided for laws enacted after 1956. Also, some public laws contain more than one act as identified by popular name. Consequently, the same public law number may appear for more than

one popular named law. When this occurs, the part or title of the

public law will be provided. For example, both the Congressional

Budget Act of 1974 and the Impoundment Control Act of 1974 are

contained in PL 93–344. The Congressional Budget Act is in titles

I–IX and will be indexed as ‘‘PL 93–344 (Titles I–IX),’’ whereas, the

Impoundment Control Act will be indexed as ‘‘PL 93–344 (Title X).’’

Popular Name U.S.C. and Statute or PL Number

Accounting and Auditing Act of 1950 ...................................... 31 U.S.C. 713, 714, 718, 719, 3326, 3501, 3511 to 3514,

3521, 3523, 3524. Sept. 12, 1950, ch. 946, Title I, pt. II,

sec. 110 to 119, 64 Stat. 834 to 838.

Accounting Simplification Acts (Meter Readings) .................... 31 U.S.C. 1308. Apr. 27, 1937, ch. 143, 50 Stat. 119.

Balanced Budget and Emergency Deficit Control Act of 1985 2 U.S.C. 601, 602, 621 note, 622, 631 to 642, 651 to 656,

661, 900, 900 note, 901, 901a, 902, 904 to 908; 31

U.S.C. 1104 to 1106, 1109. PL 99–177.

Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987.2 U.S.C. 622, 632, 636, 642, 901, 902, 904 to 908; 31

U.S.C. 1105. PL 100–119.

Budget and Accounting Act of 1921 ........................................ 31 U.S.C. 501, 502, 521, 522, 701 to 704, 711, 712, 716,

718, 719, 1101, 1104 to 1108, 1111, 1113, 3301, 3323,

3324, 3521, 3522, 3526, 3529, 3541, 3702. June 10,

1921, ch. 18, 42 Stat. 20.

Budget and Accounting Procedures Act of 1950 ..................... 31 U.S.C. 701, 1101, 1104, 1105, 1107, 1108, 1111, 1112,

1303, 1531, 3326, 3501, 3511 to 3514, 3521, 3523,

3524. Sept. 12, 1950, ch. 946, 64 Stat. 832.

Cash Management Improvement Act of 1990 ......................... 31 U.S.C. prec. 3301, 3335. PL 101–453.

Cash Management Improvement Act Amendments of 1992 ... 31 U.S.C. 3720. PL 102–589.

Chief Financial Officers Act of 1990 ....................................... 31 U.S.C. 501 note, 502 to 506, 901, 901 notes, 903, 1105,

3511 note, 3512, 3515, 3515 note, 3521. PL 101–576.

Congressional Budget Act of 1974 .......................................... 1 U.S.C. 105; 2 U.S.C. 190d, 601 to 603, 621 to 623, 631 to

644, 651 to 656, 661, 665 & 665a to 665e; 31 U.S.C.

702, 717, 719, 1102, 1104, to 1106, 1108 to 1110, 1112,

1113, 1512, 1552. PL 93–344 (Titles I–IX).

Congressional Budget and Impoundment Control Act of 1974 1 U.S.C. 105; 2 U.S.C. 190d, 601 to 603, 621 to 623, 631 to

642, 651 to 653, 661 & 681 to 688; 31 U.S.C. 702, 717,

719, 1102, 1104 to 1106, 1108 to 1110, 1112, 1113,

1512, 1552. PL 93–344.
606

Popular Name U.S.C. and Statute or PL Number

Debt Collection Act of 1982 ..................................................... 5 U.S.C. 552a; 31 U.S.C. 3302, 3701, 3711, 3716 to 3719.

PL 97–365.

Dockery Act (Accounting) .......................................................... 31 U.S.C. 331, 3323, 3324, 3521, 3522, 3526, 3529, 3541,

3702. July 31, 1894, ch. 174, 28 Stat. 205.

Federal Banking Agency Audit Act ........................................... 31 U.S.C. 714, 718, 719. PL 95–320.

Federal Financial Management Act of 1994 ............................ 31 U.S.C. 331, 501 note, 3332, 3515, 3521. PL 103–356

(Title IV).

Federal Managers’ Financial Integrity Act of 1982 ................. 31 U.S.C. 1105, 1113, 3512. PL 97–255.

General Accounting Act of 1974 .............................................. 31 U.S.C. 702, 3521, 3525, 3702, 3726 PL 93–604.

General Accounting Office Act of 1980 .................................... 31 U.S.C. 702, 703, 716, 718, 3524. PL 96–226.

General Accounting Office Personnel Act of 1980 ................... 31 U.S.C. 711. PL 96–191.

General Accounting Office Personne Amendments Act of 1988 31 U.S.C. 701 note, 703. PL 100–426.

Government Management Reform Act of 1994 ........................ 31 U.S.C. 501 note, 3301 note, 3332, 3515, 3521. PL 103–

356.

Government Performance and Results Act of 1993 ................. 5 U.S.C. 306; 31 U.S.C. 1105, 1115, 1115 note, 1116 to

1119, 9703, 9704; 39 U.S.C. 2801 to 2803. PL 103–62.

Gramm-Rudman-Hollings Act ................................................... See Balanced Budget and Emergency Deficit Control Act of

1985.

Impoundment Control Act of 1974 ........................................... 2 U.S.C. 681 to 688; 31 U.S.C. 1512. PL 93–344 (Title X).

Inspector General Act of 1978 ................................................. 5 App. 3 U.S.C. 4, 8C to 8G, 9, 11. PL 95–452.

Inspector General Act Amendments of 1988 ........................... 31 U.S.C. 1105. PL 100–504.

Legislative Reorganization Act of 1970 ................................... 2 U.S.C. 190d; 31 U.S.C. 702, 717, 719, 720, 1105, 1106,

1112, 1113. PL 91–510.

Major Fraud Act of 1988 .......................................................... 31 U.S.C. 3730. PL 100–700.

Omnibus Budget Reconciliation Act of 1981 ........................... 31 U.S.C. 325. PL 97–35.

Omnibus Budget Reconciliation Act of 1986 ........................... 31 U.S.C. 3101. PL 99–509.

Prompt Payment Act ................................................................. 31 U.S.C. 3901 to 3906. PL 97–177.

Prompt Payment Act Amendments of 1988 ............................. 15 U.S.C. 644; 31 U.S.C. 3901, 3902, 3903 3904 to 3906,

3907. PL 100–496.

Single Audit Act of 1984 .......................................................... 31 U.S.C. 7501 to 7507. PL 98–502.
607

APPENDIX X

SELECTED LAWS RELATING TO FEDERAL

FINANCIAL MANAGEMENT BY STATUTE OR

PUBLIC LAW NUMBER INDEXED TO POPULAR NAME

609

Selected Laws Relating to Federal Financial Management by Statute or Public Law Number Indexed to Popular Name

The list below shows the statute citation or Public Law number

of selected laws related to federal financial management. Subsequent amendments are not shown and users should refer to other

sources for subsequent amendments. As explained in appendix I,

Public Law numbers were not used before 1957, and consequently,

the statute citation is provided for those earlier laws. Following the

statute list are the Public Law numbers, in numeric sequence for

quick reference, cross-indexed to the popular name.

Some public laws contain more than one act as identified by popular name. Consequently, the same public law number may appear

for more than one law. When this occurs, the part or title of the

public law will be provided. For example, both the Congressional

Budget Act of 1974 and the Impoundment Control Act of 1974 are

contained in PL 93–344. The Congressional Budget Act is in titles

I–IX and will be indexed as ‘‘PL 93–344 (Titles I–IX),’’ whereas, the

Impoundment Control Act will be indexed as ‘‘PL 93–344 (Title X).’’

Statute Citation or PL Number Popular Name

Sept. 12, 1950, ch. 946, Title I, pt. II, sec. 110 to 119, 64

Stat. 834 to 838.

Accounting and Auditing Act of 1950.

Apr. 27, 1937, ch. 143, 50 Stat. 119 ...................................... Accounting Simplification Act (Meter Readings).

June 10, 1921, ch. 18, 42 Stat. 20 ......................................... Budget and Accounting Act, 1921.

Sept. 12, 1950, ch. 946, 64 Stat. 832 .................................... Budget and Accounting Procedures Act of 1950.

July 31, 1894, ch. 174, 28 Stat. 205 ...................................... Dockery Act (Accounting).

91–510 ............................................................................. Legislative Reorganization Act of 1970.

93–344 (Titles I–X) ......................................................... Congressional Budget Act of 1974.

93–344 ............................................................................. Congressional Budget and Impoundment Control Act of

1974.

93–344 (Title X) .............................................................. Impoundment Control Act of 1974.

93–604 ............................................................................. General Accounting Act of 1974.

95–320 ............................................................................. Federal Banking Agency Audit Act.

96–191 ............................................................................. General Accounting Office Personnel Act of 1980.

96–226 ............................................................................. General Accounting Office Act of 1980.

97–35 ............................................................................... Omnibus Budget Reconciliation Act of 1981.

97–177 ............................................................................. Prompt Payment Act.

97–255 ............................................................................. Federal Managers’ Financial Integrity Act of 1982.

97–365 ............................................................................. Debt Collection Act of 1982.

98–502 ............................................................................. Single Audit Act of 1984.

99–177 ............................................................................. Balanced Budget and Emergency Deficit Control Act of 1985.

99–509 ............................................................................. Omnibus Budget Reconciliation Act of 1986.

100–119 ........................................................................... Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987.

100–426 ........................................................................... General Accounting Office Personnel Amendments Act of

1988.

100–496 ........................................................................... Prompt Payment Act Amendments of 1988.

100–504 ........................................................................... Inspector General Act Amendments of 1988.

100–700 ........................................................................... Major Fraud Act of 1988.

101–73 ............................................................................. Inspector General Act of 1978.

101–453 ........................................................................... Cash Management Improvement Act of 1990.
610

Statute Citation or PL Number Popular Name

101–576 ........................................................................... Chief Financial Officers Act of 1990.

102–589 ........................................................................... Cash Management Improvement Act Amendments of 1992.

103–62 ............................................................................. Government Performance and Results Act of 1993.

103–356 (Title IV) ........................................................... Government Management Reform Act of 1994.

103–356 ........................................................................... Federal Financial Management Act of 1994.

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