United States Government Accountability Office

Washington, DC 20548 

Comptroller General

of the United States

Decision 

Matter of: United States Postal Service Office of Inspector General— 

Implementation of Postal Accountability and Enhancement Act 

Section 603, Part 2 

File: B-317878 

Date: March 3, 2009 

DIGEST

Amounts appropriated by transfer to the United States Postal Service (USPS) Office 

of Inspector General (OIG) from the Postal Service Fund remain available for OIG 

obligations without fiscal year limitation and will not revert to the Postal Service 

Fund. Amounts transferred between appropriations accounts do not lose their fiscal 

year character. 

Governmentwide rescissions do not apply to USPS OIG appropriations. The Postal 

Service Fund is exempt from general statutory budget limitations by operation of 

39 U.S.C. § 2009a(2). Because OIG is a component of USPS and is funded by amounts 

transferred from the Postal Service Fund, its appropriations are exempt from acrossthe-board rescissions. 

Although the Economy Act does not apply to USPS and its components, including 

OIG, OIG may engage in interagency transactions with other federal entities under 

authority provided by 39 U.S.C. § 411. However, OIG may not enter into intra-agency 

transactions with other USPS components in the absence of other authority to permit 

such action. 

DECISION 

The Office of Inspector General (OIG) of the United States Postal Service (USPS) 

requested a decision regarding the implementation of section 603 of the Postal 

Accountability and Enhancement Act, Pub. L. No. 109-435, 120 Stat. 3198, 3240--41 

(Dec. 20, 2006). Letter from Ronald K. Stith, Assistant Inspector General for Mission 

Support, USPS, to Gary L. Kepplinger, General Counsel, GAO, Aug. 18, 2008 (Request 

Letter). Section 603 authorizes a direct appropriation for the OIG from the Postal 

Service Fund. In its request, OIG asked six questions concerning the appropriation of 
funds to OIG and the effect such an appropriation will have on the applicability of 

statutes as regards OIG as a component of USPS. In a prior decision, we answered 

three of those questions. B-317022, Sept. 25, 2008. We respond to the remaining 

three questions here, as well as an additional question that OIG asked subsequent to 

our September decision. 

Our practice when rendering decisions is to obtain the views of the relevant agency 

to establish a factual record and the agency’s legal position on the subject matter. 

GAO, Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP 

(Washington, D.C.: Sept. 2006), available at www.gao.gov/legal/resources.html. In 

this regard, OIG provided its legal views in a memorandum supplementing its request. 

In response to our request for information on how USPS currently funds OIG 

expenses, OIG provided the relevant USPS procedures and practices. E-mail from 

Robert B. Neill, Senior Attorney, Office of General Counsel, USPS OIG, to Faisal 

Amin, Senior Staff Attorney, GAO, Subject: USPS OIG Response to Request for 

Additional Information, Aug. 29, 2008 (Neill E-mail). In addition, in a telephone 

conversation subsequent to our September decision, OIG provided clarifying 

information regarding the four questions addressed in this decision. Telephone 

Conversation between Robert B. Neill, Office of General Counsel, USPS OIG; Faisal 

Amin, Senior Staff Attorney; and Thomas H. Armstrong, Assistant General Counsel, 

GAO, Oct. 3, 2008 (October Telephone Conversation). 

BACKGROUND1

In the past, OIG expenses have been paid from the Postal Service Fund, a revolving 

fund established within the United States Treasury. Request Letter. See 39 U.S.C. 

§ 2003(a). Amounts contained in the fund are “no-year funds,” available without 

fiscal year limitation. 39 U.S.C. § 2003(a). See B-221498.26, May 2, 1986. Section 

603(b) of the Postal Accountability and Enhancement Act (PAEA), which became law 

on December 20, 2006, amended the Inspector General Act of 1978 to authorize “such 

sums as may be necessary” to be appropriated to OIG from the Postal Service Fund. 

Pub. L. No. 109-435, § 603(b). Section 603(c) amends the Postal Service Fund statute, 

39 U.S.C. § 2003. The amending language provides that the Postal Service Fund “shall 

be available for the payment of . . . all expenses of the Office of Inspector General, 

subject to the availability of amounts appropriated under [section 603(b)].” Pub. L. 

No. 109-435, § 603(c), codified at 39 U.S.C. § 2003(e)(1). These amendments “apply 

with respect to fiscal years beginning on or after October 1, 2008.” Pub. L. 

No. 109-435, § 603(d)(1). 

 

1

 In our September 2008 decision, we provided the details about USPS and OIG that 

gave rise to the questions OIG asked us. B-317022, Sept. 25, 2008. In this decision, we 

provide information specific to the questions addressed herein. We refer readers to 

the September decision for additional information. 

Page 2 B-317878
OIG states that “[a]ppropriations acts are anticipated to specifically provide for 

payment of the expenses of the Office of Inspector General out of the Postal Service 

Fund . . . .” Request Letter, Memorandum at p.8. The appropriations bill pending for 

fiscal year 2009, the Financial Services and General Government Appropriations Act, 

would appropriate for OIG operations “$239,356,000, to be derived by transfer from 

the Postal Service Fund and expended as authorized by section 603(b)(3) of [Public 

Law 109-435].” S. 3260, 110th Cong. (2008); H.R. 7323, 110th Cong. (2008). In its 

request, OIG observes that a “clear understanding of the laws governing the 

obligation, expenditure, and accounting of the Postal Service Fund funds specifically 

appropriated for the Postal Service OIG is vital to the OIG’s successful 

implementation of section 603.” Request Letter. Currently, OIG operations are 

funded by the governmentwide continuing resolution; the continuing resolution 

appropriated “$233,440,000, to be derived by transfer from the Postal Service Fund.” 

Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, 

Pub. L. No. 110-329, div. A, § 141, 122 Stat. 3574, 3580 (Sept. 30, 2008). It expires on 

March 6, 2009. 

DISCUSSION 

1. Will funds appropriated for the OIG from the Postal Service Fund pursuant to 

section 603 remain “no-year” funds available to pay all expenses incurred by the OIG 

no matter when the expenses are incurred? 

Unless Congress provides otherwise, appropriations are available only for the fiscal 

year for which the funds are appropriated. 71 Comp. Gen. 39, 40 (1991). In the 

continuing resolution, Congress appropriated $233,440,000 to fund OIG operations, 

“to be derived by transfer from the Postal Service Fund.” Pub. L. No. 110-329, § 141 

(emphasis added). The pending fiscal year 2009 Financial Services and General 

Government Appropriations bill uses the same terminology: “$239,356,000, to be 

derived by transfer from the Postal Service Fund and expended as authorized by 

section 603(b)(3) of [PAEA].” S. 3260. Congress’s use of the term “transfer” is key to 

answering OIG’s question. Instead of directly “appropriating” amounts from the Fund 

to OIG, Congress makes amounts available by “transfer” to OIG.2

 When an amount is 

 

2

 This language differs from other appropriations made from dedicated accounts, 

which, for example, use the phrase “to be derived from.” See, e.g., Consolidated 

Appropriations Act, 2008, Pub. L. No. 110-161, div. K, title I, 121 Stat. 1844, 2389 

(Dec. 26, 2007) (Federal Motor Carrier Safety Administration was appropriated 

“$229,654,000, to be derived from the Highway Trust Fund. . . .”); id. at 2391 (for 

highway safety research and development, National Highway Traffic Safety 

Administration was appropriated “$107,750,000, to be derived from the Highway Trust 

Fund. . . .”); Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, div. D, title V, 

121 Stat. at 1998 (Federal Deposit Insurance Corporation was appropriated 

“$26,848,000, to be derived from the Deposit Insurance Fund and the FSLIC 

Resolution Fund.”). 

Page 3 B-317878
transferred from one appropriation account to another, that amount is “subject to the 

same limitations provided by the law appropriating the amount.” 31 U.S.C. § 1532. 

Consequently, unless statutory transfer authority provides otherwise,3

 appropriated 

funds do not lose their time character when they are moved from one appropriation 

to another. See B-288142, Sept. 6, 2001. 

 

The Postal Service Fund, a revolving fund, is a permanent indefinite appropriation, 

and the amounts in the fund are available without fiscal year limitation. 39 U.S.C. 

§ 2003(a). Therefore, when Congress enacts a transfer from that fund to OIG, 

amounts transferred remain no-year funds. 

2. Will funds appropriated for the OIG out of the Postal Service Fund that remain 

unobligated and unexpended at the end of a fiscal year remain in the Postal Service 

Fund revolving fund at the end of the fiscal year? If not, will any such unobligated 

and unexpended funds appropriated for the OIG have to be accounted for separately 

in order to remain available for adjustment of existing OIG obligations for some 

period of time before ultimately being returned to the Postal Service Fund? 

Unobligated and unexpended funds transferred to OIG from the Postal Service Fund 

should remain in the OIG account at the end of the fiscal year. As explained in our 

answer to question 1, amounts appropriated by the continuing resolution, in effect, 

provide OIG with no-year funds. If the fiscal year 2009 appropriations bill before 

Congress is enacted as currently written, it, too, will provide OIG with no-year funds. 

Because OIG’s appropriation is available without fiscal year limitation, such funds do 

not expire at the end of the fiscal year when appropriated. See 31 U.S.C. §§ 1552--

1553. Nevertheless, OIG will need to account for amounts transferred to it separately 

from balances in the Postal Service Fund. OIG explained to us that the Department 

of Treasury will establish a separate account for OIG. October Telephone 

Conversation. Once the funds are withdrawn from the Postal Service Fund and 

transferred and credited to OIG’s account, they should no longer be accounted for in 

the Postal Service Fund. 

 

3

 For example, where Congress transfers funds to another account to be merged 

therein, the funds take on the conditions and characteristics of the receiving account. 

See, e.g., Pub. L. No. 110-329, div. B, title I, ch. 1, § 10101, 122 Stat. at 3587 (“The 

Secretary of Agriculture may transfer to the Rural Development Disaster Assistance 

Fund, and merge with other amounts generally appropriated to the Fund, the 

available unobligated balance of [amounts appropriated] before the date of the 

enactment of this Act for programs and activities of the Rural Development Mission 

Area . . . .”). 

Page 4 B-317878
3. What effect, if any, will any governmentwide rescission have on amounts 

appropriated to USPS OIG?4

Congress from time to time may enact “across-the-board” rescissions that apply 

governmentwide.5 For example, the Emergency Supplemental Appropriations Act to 

Address Hurricanes in the Gulf of Mexico and Pandemic Influenza, 2006 (2006 

Supplemental) rescinded “an amount equal to 1 percent of . . . the budget authority 

provided (or obligation limit imposed) for fiscal year 2006 for any discretionary 

account of this Act and in any other fiscal year 2006 appropriation Act.” Pub. L. 

No. 109-148, div. B, title III, ch. 8, § 3801(a), 119 Stat. 2680, 2791 (Dec. 30, 2005) 

(chapter 8 is entitled “Government-Wide Rescissions” and section 3801 is entitled 

“Across-the-Board Rescissions”). OIG’s question goes to an “across-the-board,” or 

governmentwide, rescission. In those cases, the rescission applies to all agencies and 

all appropriations within a particular act, or all appropriated amounts in a fiscal year, 

as in the case of the 2006 Supplemental. Unless specific statutory authority excepts 

OIG from an across-the-board rescission, the rescission would apply to any amount 

appropriated to OIG from the Postal Service Fund. 

However, a statute does exempt the Postal Service Fund “from any general budget 

limitation imposed by statute on expenditures . . . .” 39 U.S.C. § 2009a. As a 

component of USPS, and as an activity funded by amounts transferred from the 

Postal Service Fund, OIG enjoys the same exemption 39 U.S.C. § 2009a(2) affords 

USPS as a whole. See B-317022, Sept. 25, 2008. Congress enacted the exemption, at 

least in part, in reaction to the application of the Balanced Budget and Emergency 

Deficit Control Act of 1985, Pub. L. No. 99-177, title II (Dec. 12, 1985), commonly 

referred to as Gramm-Rudman-Hollings, which prescribed deficit reduction targets 

each fiscal year, to USPS. H.R. Rep. No. 101-247, at 850 (1989). In its report, the 

House committee stated that the Postal Service should not be subjected to the 

provisions of Gramm-Rudman-Hollings, and explained that the exemption “will allow 

the Postal Service to operate . . . free from budget pressures unrelated to its 

operation.” Id. “Mail delivery should respond to the demands of Postal Service 

customers; it should not be scaled up or down depending on federal budget 

considerations. . . . [USPS] should not be included in deficit reduction plans.” Id. 

The committee noted: “Under current law [Postal Service] administrative expenses 

 

4

 Although OIG originally asked a question about the application of the Impoundment 

Control Act to OIG appropriations, OIG clarified, in a telephone conversation with 

GAO staff, that it questions the application of a governmentwide rescission. October 

Telephone Conversation. 

5

 Sometimes, Congress rescinds amounts in response to a presidential rescission 

proposal. The Impoundment Control Act of 1974 provides that whenever the 

President determines that budget authority is not required to carry out programs or 

that the budget authority should be rescinded for fiscal policy, or other reasons, the 

President may transmit a special message to Congress proposing a rescission, 

specifying all the facts and circumstances bearing thereon. 2 U.S.C. § 683(a). 

Page 5 B-317878
are considered sequestrable resources and are subject to across-the-board 

reductions. [The Postal Service Off-Budget Act] would exempt all Postal Service 

resources from sequestration.” Id. at 846. The effect of a governmentwide rescission 

is the same as that of a sequestration in that a certain proportion of funds 

appropriated to an entity is not available. Viewed in the context of this legislative 

history, a governmentwide rescission, such as that contained in the 2006 

Supplemental, is a general budget limitation and, as such, would not apply to 

amounts appropriated to OIG.

4. Would receipt of reimbursement from other organizations for services performed 

by OIG improperly augment OIG’s appropriation? 

In our September 2008 decision, we addressed OIG’s question regarding whether 

USPS may supplement OIG’s appropriation. B-317022, Sept. 25, 2008. We concluded 

that USPS may not supplement OIG’s appropriation because doing so would 

constitute an impermissible augmentation. Id. Congress controls agency activity by 

establishing funding levels; allowing an agency to credit and expend additional funds 

dilutes congressional control over agency finances, thereby weakening congressional 

control over agency activity. 

After we issued our decision, OIG asked an additional, related question: whether 

reimbursement from another USPS entity for services performed would constitute an 

improper augmentation of OIG’s appropriation.6

 E-mail from Robert Neill, USPS OIG, 

to Thomas H. Armstrong, GAO, Subject: Question Concerning Decision: B-317022

(Oct. 3, 2008). For example, the Postal Inspection Service may wish to utilize OIG’s 

expertise to install video surveillance equipment. Telephone Conversation between 

Robert Neill, USPS OIG and Faisal Amin, GAO, Dec. 10, 2008 (December Telephone 

Conversation). OIG also asked whether providing services to inspectors general at 

other agencies on a reimbursable basis constitutes an impermissible augmentation. 

October Telephone Conversation. 

OIG’s questions involve interagency (between agencies) and intra-agency (between 

agency components) transactions. Generally, the Economy Act, 31 U.S.C. § 1535, 

authorizes federal agencies to perform intra-agency and interagency services on a 

reimbursable basis. Specifically, the Economy Act permits “[t]he head of an agency 

or major organizational unit within an agency” to place orders for goods or services 

 

6

 We understand OIG’s question to encompass those requests for services for which 

OIG does not already receive an appropriation. Agencies may not charge or receive 

money for activities funded by Congress. See 61 Comp. Gen. 419 (Merit Systems 

Protection Board may not accept reimbursement from other agencies for hearing 

officer travel expenses; Congress appropriates money to the Board to cover such 

expenses). See also B-308476, Dec. 20, 2006 (Federal Motor Carrier Safety 

Administration may not retain restitution award to defray obligations for which 

Congress provides an appropriation). 

Page 6 B-317878
with a “major organizational unit of the same agency or another agency” if specified 

conditions are met. Id. USPS is exempt from federal laws dealing with “contracts, 

property, works, officers, employees, budgets, or funds.” 39 U.S.C. § 410. Thus, we 

have found that the Economy Act does not apply to USPS. 58 Comp. Gen. 451, 459 

(1979). USPS, and OIG as a component thereof, have statutory authority to engage in 

transactions with executive branch agencies or the Government Printing Office for 

the furnishing of property or services. 39 U.S.C. § 411. Clearly, this permits OIG, like 

USPS, to enter into transactions with other agencies. However, the question about 

intra-agency transactions then remains. 

If the Economy Act does not apply to USPS and no other authority exists to allow 

intra-agency transactions between OIG and other USPS components, then OIG may 

not provide goods or services to USPS. This may, indeed, be an unintended 

consequence of the statutory structure of 39 U.S.C. § 411, which permits interagency 

transactions but is silent about intra-agency transactions. USPS previously funded all 

its activities, including OIG activities, directly from the Postal Service Fund, so 

independent authority to permit intra-agency transactions was unnecessary. Where 

an entity like USPS only has one appropriation, no question arises about intra-agency 

transactions requiring the debiting and crediting of multiple appropriations. The 

establishment of independent funding for OIG activities as a result of the Postal 

Accountability and Enhancement Act and subsequent appropriations from the Postal 

Service Fund creates the present situation. If OIG and other USPS components wish 

to enter into reimbursable intra-agency agreements, OIG may want to seek statutory 

authority permitting such activity. 

CONCLUSION 

If Congress continues to appropriate funds to OIG by transferring amounts from the 

no-year Postal Service Fund, amounts transferred do not lose their character as noyear funds. Funds remaining at the end of the fiscal year shall remain in OIG’s 

account, to be available until expended. In addition, governmentwide rescissions do 

not apply to USPS OIG appropriations by operation of 39 U.S.C. § 2009a, which 

exempts the Postal Service from general budget limitations enacted by statute. 

Finally, regarding interagency and intra-agency transactions, OIG has statutory 

authority to be reimbursed for interagency transactions. However, it has no authority 

for intra-agency agreements. 

Gary L. Kepplinger 

General Counsel 

Page 7 B-317878