GAO-04-272R HUD Appropriation Law Issues 

United States General Accounting Office 

Washington, DC 20548 

November 21, 2003 

The Honorable Christopher S. Bond 

Chairman 

The Honorable Barbara A. Mikulski 

Ranking Minority Member 

Subcommittee on Veteran Affairs, HUD and Independent Agencies 

Committee on Appropriations 

United States Senate 

Subject: Financial Management: Information on the Mandated Transfer of HUD’s 

Appropriation Law Function to the Chief Financial Officer 

The Departments of Veterans Affairs and Housing and Urban Development (HUD), 

and Independent Agencies Appropriations Act, 2003 (the Appropriation Act)1

 gave 

HUD’s Chief Financial Officer (CFO), in consultation with the HUD Budget Officer, 

the “sole authority” to investigate potential or actual violations under the AntiDeficiency Act2

 and all other statutes and regulations related to the obligation and 

expenditure of funds made available in any act. Further, the Appropriations Act 

provided that the CFO shall determine whether violations occurred and submit the 

final reports required by law. Finally, the Appropriation Act required the Secretary of

HUD to transfer no fewer than four appropriation law attorneys from its Office of 

General Counsel (OGC) to its Office of Chief Financial Officer (OCFO). 

These provisions and HUD’s actions to implement the Appropriation Act’s 

requirements raised a number of potential implementation issues and led to your 

request that we review and provide information on the impact that these provisions 

have had at HUD. Specifically, you asked for information pertaining to the following 

five questions, which we have provided in a question and answer format in this 

report. As discussed with your staff, the responses to these questions are primarily 

based on information obtained from interviews with various HUD and HUD Office of 

Inspector General (OIG) officials who were affected by the Appropriation Act. 

1. What functions were transferred to OCFO and how has HUD implemented the 

administration of these functions within OCFO? 

 

1

 Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003). 

2

 31 U.S.C. §§ 1341, 1342, 1350, 1517, 1519 (2000). 
Page 2 GAO-04-272R HUD Appropriation Law Issues 

2. Is there any conflict between the CFO’s traditional duties and responsibilities and 

(a) the sole authority to investigate and report on potential or actual violations of 

statutes and regulations related to the obligation and expenditure of funds or 

(b) the added responsibility of sole authority to opine on all appropriations law 

issues? 

3. What steps has HUD taken to ensure that any conflict of interest has been 

identified and eliminated? 

4. Are there any issues associated with removing the HUD General Counsel from 

being able to review any appropriations law actions of the CFO or the HUD 

Budget Officer and render timely, needed advice to the HUD Secretary on any 

aspect of appropriations law? 

5. Does the “sole authority” to investigate and report provided to the CFO by the 

Appropriation Act conflict with or undermine the authority provided to the 

Inspector General by the Inspector General Act? 

To address your request, we obtained and reviewed the relevant provisions of the 

Appropriation Act and related conference and committee reports. We interviewed 

several senior level HUD officials affected by the Appropriation Act’s provisions, 

including the General Counsel and several other attorneys from HUD’s OGC; HUD’s 

Deputy Chief Financial Officer3

 and staff from his office, including the head 

appropriations law attorney and HUD’s budget officer; and senior officials from 

HUD’s program offices who receive legal services from HUD’s attorneys. We also 

interviewed officials from HUD’s OIG and reviewed the OIG’s March 2002 report on 

the Office of Multifamily Housing Assistance Restructuring (OMHAR) Anti-Deficiency 

Act case.4

 We also reviewed the Anti-Deficiency Act, the Chief Financial Officers Act 

of 1990, and the Inspector General Act of 1978, as amended (IG Act). Finally, we 

reviewed the department’s revised funds control handbook dated December 18, 2002, 

which was updated and issued just prior to the enactment of the Appropriation Act 

and which lays out HUD’s process for handling future Anti-Deficiency Act issues.5

 We 

requested comments on a draft of this report from the Secretary of Housing and 

Urban Development and HUD’s Inspector General or their designees. We conducted 

our work from August 2003 through November 2003 in accordance with U.S. 

generally accepted government auditing standards. 

Summary 

There was general agreement among the HUD officials we spoke with that the 

OMHAR Anti-Deficiency Act investigation was contentious and highlighted the need 

for changes to strengthen the department’s funds control system and to improve the 

 

3

 HUD’s Chief Financial Officer position is currently vacant. 4

 HUD Office of Inspector General Audit Memorandum Report 2002-DE-0801 (March 22, 2002), 

“Alleged Violations of the Anti-Deficiency Act and the HUD Reform Act by the Office of Multifamily 

Housing Assistance Restructuring (OMHAR).” There was consensus among HUD officials that HUD’s 

handling of this Anti-Deficiency Act case played a significant role in the events leading to enactment of 

the Appropriation Act’s provisions that are the subject of this request. 5

 HUD is currently revising its funds control handbook (Handbook No. 1830.2 Rev-4) to incorporate the 

organizational changes mandated by the fiscal year 2003 Appropriation Act. 
Page 3 GAO-04-272R HUD Appropriation Law Issues 

department’s process for responding to Anti-Deficiency Act issues. Some HUD 

officials also told us that tension over the handling of Anti-Deficiency Act issues led 

to changes in OGC’s provision of legal assistance to OCFO, which hindered timely, 

informal communications between OCFO and OGC’s appropriation law attorneys. 

However, there were differing views on how to address these matters and on various 

implementation issues raised about provisions included in the Appropriation Act. 

There was agreement on what functions and roles OCFO assumed pursuant to the 

Appropriation Act. HUD transferred four appropriations law attorneys from OGC to 

OCFO as required. Also, in addition to OCFO’s typical responsibilities of accounting, 

financial reporting, budgeting, and establishing and maintaining the department’s 

funds control system, the HUD officials concurred that OCFO is now responsible for 

all appropriation law matters, including providing legal interpretations on 

appropriation law to HUD’s Secretary and program offices and leading all AntiDeficiency Act investigations that may arise within the department. There also was 

general consensus that having OCFO as a designated focal point within HUD for 

addressing Anti-Deficiency Act matters was a positive development.

Regarding the remaining questions you raised, there was much less consensus 

concerning potential conflicts of interest and the respective roles of OCFO, OGC, and 

the IG. Responses to the remaining questions revealed different perspectives, most 

notably over the implication of the Appropriation Act providing OCFO with “sole 

authority” to investigate and determine violations of appropriation law and 

transferring attorneys from OGC to OCFO.

Certain HUD officials and the OIG officials we spoke with believe there is a conflict 

of interest, or at least the appearance of a conflict, by having OCFO solely 

responsible for investigating, determining, and reporting on potential or actual AntiDeficiency Act violations in situations involving breakdowns in HUD’s funds control 

system. The OIG officials cited the OMHAR Anti-Deficiency Act case as a prime 

example of the existence of a conflict as two of the four individuals deemed 

responsible for that violation worked within OCFO. Others, particularly within 

HUD’s OCFO, while acknowledging these concerns, did not necessarily feel that the 

Appropriation Act’s provisions created a conflict. Instead they said it was their 

management responsibility, even without the legislation, to be involved with and lead 

investigations of potential or actual Anti-Deficiency Act violations. Nevertheless, 

OCFO has taken certain steps that it believes will help minimize the potential for, or 

the appearance of, a conflict of interest by establishing and documenting the process 

that will be followed if and when future Anti-Deficiency Act violations arise. 

Additionally, OCFO is also now finalizing the establishment of a new division within 

OCFO that will be headed by an individual with no budgetary or funds control 

responsibilities to oversee and report on future Anti-Deficiency Act investigations. 

The HUD program officials and most of the attorneys, including the head 

appropriations law attorney in OCFO, we spoke with who work with the program 

offices every day did say that despite HUD’s best efforts to implement the new 

mandated structure and ensure collaboration among the two groups of attorneys, the 

transfer of the appropriations law attorneys from OGC to OCFO caused initial and 

lingering confusion over which group of attorneys should be consulted for legal 

assistance. According to the General Counsel, this confusion delays legal advice, 
Page 4 GAO-04-272R HUD Appropriation Law Issues 

provides the opportunity for program officials to “shop” for legal interpretations, and 

hampers his ability to provide timely, needed legal advice not only to the Secretary 

but also to the HUD program offices. Further, numerous officials said they were not 

sure how differing legal views would be resolved. Historically, the General Counsel 

has made the final interpretation. On the other hand, officials from OCFO said the 

transfer of the appropriation attorneys was necessary because at some point during 

the OMHAR Anti-Deficiency Act investigation the General Counsel began restricting 

access to the appropriation law attorneys by requiring formal written requests for all 

appropriation law services. As a result, an official in HUD’s OCFO said that his office 

and the program offices could not obtain needed assistance on appropriation law 

issues in a timely manner. 

Finally, OIG officials told us that they see two conflicts, or at least possible conflicts, 

between the literal language of the Appropriations Act and the language of the IG Act. 

First, they said that by providing OCFO with “sole authority” to investigate potential 

or actual Anti-Deficiency Act violations, the Appropriations Act conflicts with the 

language of the IG Act that generally authorizes the OIG to investigate HUD matters. 

In response to this conflict, the OIG is referring all potential Anti-Deficiency Act 

issues to HUD’s OCFO. Second, the OIG officials said they believe there is a possible 

conflict between OCFO’s sole authority to report on Anti-Deficiency Act violations 

under the Appropriation Act and the OIG’s authority to report criminal violations to 

the Attorney General under the IG Act. On the other hand, officials from HUD’s 

OCFO said that the OIG should not routinely be involved in an Anti-Deficiency Act 

violation until an official determination has been made by the department. At that 

time, the OCFO official said it would be appropriate for the OIG to review the work 

that went into the investigation, and more importantly and pursuant to their 

authority, to investigate and determine whether criminal acts may have been 

committed. 

Background 

In its report 6 on the fiscal year 2003 Departments of Veterans Affairs and Housing 

and Urban Development, and Independent Agencies Appropriations Bill, the House 

Appropriations Committee noted that in prior years it and others, including GAO and 

the Office of Management and Budget (OMB), had raised concerns about HUD’s 

system of funds control and compliance with the Anti-Deficiency Act. Congress 

enacted the Anti-Deficiency Act and has amended it over many years to prohibit 

agencies from making obligations and expenditures in excess of the appropriations 

provided to them. Among other things, the Anti-Deficiency Act prohibits officers or 

employees of the United States government, unless otherwise authorized by law, 

from (1) making or authorizing an obligation or expenditure in excess of an available 

appropriation or fund, (2) involving the government in any contract or obligation in 

advance of appropriations, or (3) making obligations or expenditures in excess of an 

apportionment or the amount permitted by agency regulations. To help protect 

against violating the Anti-Deficiency Act’s prohibitions, Congress amended the AntiDeficiency Act on several occasions to establish requirements for agency systems of 

funds control. When violations do occur, the Anti-Deficiency Act requires that 

agency heads report to the President and Congress and subjects the officers and 

 

6

 H.R. Rep. No. 107-740, at 78-79 (2002).
Page 5 GAO-04-272R HUD Appropriation Law Issues 

employees responsible for the violation to possible adverse personnel actions and 

criminal penalties.7

The House Appropriations Committee report also noted that these concerns and 

three recent Anti-Deficiency Act violations8

 that were brought to the Committee’s 

attention prompted an investigation by the Committee’s Survey and Investigations 

staff into HUD’s procedures to investigate and enforce the Anti-Deficiency Act. 

According to the House Appropriations Committee report, the House investigators 

determined that HUD lacked adequate funds control policies and procedures with 

respect to oversight, checks and balances, automated systems, audits, and training. 

On the basis of these findings, the House Appropriations Committee included bill 

language and additional funding to assist HUD’s efforts to improve funds control and 

its financial management systems. Additional bill language vested the sole authority 

to investigate, determine, and report compliance with the Anti-Deficiency Act and all 

other appropriations law with HUD’s OCFO. The bill language also required the 

transfer of no fewer than four appropriation law attorneys from OGC. 

The Senate’s version of the fiscal year 2003 appropriations bill for HUD did not 

contain any similar provisions. The Departments of Veterans Affairs and Housing and 

Urban Development, Independent Agencies Appropriations Act, 2003, was ultimately 

enacted on February 20, 2003, as part of the Consolidated Appropriations Resolution, 

2003.9

 The appropriations for HUD “Management and Administration, salaries and 

expenses” essentially adopted the language from the House bill that involved OCFO’s 

responsibilities for Anti-Deficiency Act and other appropriation law matters and the 

transfer of four appropriation law attorneys.10

 In the conference report11 on the 

Consolidated Appropriations Resolution, 2003, the conferees reiterated the concerns 

expressed in the House report about the severe chronic funds control problems at 

HUD, including the department’s failure to make timely, formal determinations of the 

violations of the Anti-Deficiency Act and other appropriations statutes. As of March 

2003, HUD had completed the mandated transfer of the four appropriation law 

attorneys from OGC to OCFO. 

 

7

 OMB Circular A-11 provides requirements for funds control and instructions for required agency head 

reports if the agency head determines that an Anti-Deficiency Act violation occurred. For an extensive 

discussion of the Anti-Deficiency Act, see chapter 6 of GAO’s Principles of Federal Appropriations 

Law. 8

 The most significant Anti-Deficiency Act violation involved HUD’s Office of Multifamily Housing and 

Assistance Restructuring’s (OMHAR) use of technical assistance grant funds. HUD’s investigation into 

this matter was lengthy and resulted in mixed opinions about whether an Anti-Deficiency Act violation 

actually occurred. Both HUD’s General Counsel and the Office of Inspector General concluded that 

with respect to the OMHAR case no Anti-Deficiency Act violation occurred. However, HUD’s 

Secretary ultimately concluded there was an Anti-Deficiency Act violation and reported it. 

9

 Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003).

10 117 Stat. at 499-500.

11 H.R. Conf. Rep. No. 108-10, at 1427 (2003).
Page 6 GAO-04-272R HUD Appropriation Law Issues 

Questions and Answers 

1. What functions were transferred to OCFO and how has HUD implemented 

the administration of these functions within OCFO? 

Provisions in the Appropriations Act, gave OCFO, in consultation with the Budget 

Officer, the “sole authority” to investigate potential or actual violations of the AntiDeficiency Act and all other statutes and regulations related to the obligation and 

expenditure of funds. In addition, OCFO is to determine whether violations exist and 

is to submit the final reports on violations to the Secretary, the President, OMB, and 

Congress. 

As required by the Appropriations Act, HUD transferred four attorneys from the 

Legislation Division, Office of Legislation and Regulations, Office of General Counsel 

to OCFO. Two of these attorneys had what HUD described as “significant” 

appropriations law experience, while the other two had lesser amounts of 

appropriations law experience. OCFO’s appropriations law function is now 

responsible for providing legal assistance on all appropriations law matters to HUD’s 

program offices as well as the HUD Secretary. The appropriation law attorneys are 

supervised by a GM-15 attorney and are currently reporting to HUD’s Deputy CFO, 

who is not an attorney. 

2. Is there any conflict between the CFO’s traditional duties and 

responsibilities and (1) the sole authority to investigate and report on 

potential or actual violations of statutes and regulations related to the 

obligation and expenditure of funds or (2) the added responsibility of sole 

authority to opine on all appropriations law issues? 

HUD’s OCFO typically has been responsible for the department’s accounting, 

financial reporting, and budgeting functions, as well as for creating and maintaining 

HUD’s system of funds control to ensure appropriated funds are used lawfully and as 

intended. Given these responsibilities, several of the HUD officials and the OIG 

officials we interviewed told us that they do believe the new responsibilities provided 

in the Appropriation Act have led to or increased the potential for a conflict of 

interest or at least the appearance of a conflict of interest. A chief concern is that 

OCFO is now solely responsible for investigating potential Anti-Deficiency Act 

violations that involve breakdowns in the funds control system, which it is 

responsible for administering. Also, OCFO attorneys are now in the position of 

having to render legal interpretations that may directly implicate the performance of 

the CFO for whom they now work. Additionally, there were some concerns raised 

about the supervision and rating of the OCFO attorneys. The OIG officials cited the 

OMHAR Anti-Deficiency Act case as prime example of why the Appropriation Act 

created a conflict of interest. In the Secretary’s OMHAR Anti-Deficiency Act report, 

two of the four persons or positions deemed responsible for the violation worked 

within OCFO. 

Others at HUD, principally in OCFO, told us they do not believe there is a clear 

conflict. Their belief is that since OCFO has been delegated responsibility for funds 
Page 7 GAO-04-272R HUD Appropriation Law Issues 

control within the department, management of that responsibility dictates that OCFO 

should also be responsible for and involved with assessing where that system failed, 

and if an Anti-Deficiency Act violation occurred. Further, HUD’s budget officer 

believes the Anti-Deficiency Act and OMB circulars make it clear that the funds 

control responsibilities rest within OCFO. 

 

The Deputy CFO and some others said the Appropriation Act was useful in that it 

clearly establishes who within HUD has responsibility for leading and making future 

Anti-Deficiency Act violation determinations. During the OMHAR Anti-Deficiency 

Act investigation, these responsibilities were not clearly defined and this hampered 

the investigation. HUD’s updated funds control handbook now specifies individuals’ 

responsibilities with respect to future Anti-Deficiency Act issues. Further, the Deputy 

CFO stated that the appropriation law attorneys now assigned to his office can focus 

on reviewing newly required funds control plans, which he and others believe are a 

key component in strengthening HUD’s system of funds control to prevent future 

Anti-Deficiency Act violations. 

The Deputy CFO said that OCFO did recognize that others have concerns about the 

potential for an appearance of a conflict of interest and therefore, as discussed in the 

response to question 3, has taken or plans certain actions to help mitigate these 

concerns. 

3. What steps has HUD taken to ensure that any conflict of interest has been 

identified and eliminated? 

Given the responsibilities of HUD’s OCFO, it would be difficult to completely 

eliminate the potential for a conflict of interest or the appearance of a conflict of 

interest. However, HUD has taken or is planning to take certain steps to try to 

mitigate this risk. Specifically, we were told that OCFO is in the process of 

establishing a new division within OCFO that is to be headed by an individual with no 

funds control or budget responsibilities to lead future Anti-Deficiency Act inquiries. 

The investigative team is also to be comprised of staff not associated with the activity 

where the Anti-Deficiency Act violation is alleged. We were told that OCFO 

appropriations law attorneys would provide legal assistance to this group and the 

new division would submit its report – a report that we were told will serve as the 

department’s report as required by the Anti-Deficiency Act and OMB Circular A-11-- 

to the CFO and HUD Secretary for acceptance. A HUD official told us that this 

division is staffed and ready to begin work pending notification to Congress. 

Additionally, prior to the enactment of the Appropriations Act, HUD’s OCFO made 

substantial revisions to its funds control handbook. Included in this revised 

handbook is a chapter that lays out the department’s process for responding to future 

Anti-Deficiency Act issues. The process spells out who to notify when an AntiDeficiency Act violation is suspected, delineates responsibilities for conducting the 

investigation, and prescribes the documentation that is to be maintained. HUD is 

now in the final stages of updating the funds control handbook again to reflect the 

organizational changes mandated by the Appropriations Act and the establishment of 

the new division within OCFO that will lead future Anti-Deficiency Act investigations. 
Page 8 GAO-04-272R HUD Appropriation Law Issues 

4. Are there any issues associated with removing the HUD General Counsel 

from being able to review any appropriations law actions of the CFO or the 

HUD Budget Officer and render timely, needed advice to the HUD Secretary 

on any aspect of appropriations law? 

In our discussions concerning this question, agency officials had different views. 

Most of the attorneys we interviewed from HUD’s OGC, including the General 

Counsel, shared the opinion that the current organizational structure does not lend 

itself to ensuring the Secretary receives the best, most timely legal advice. In fact, 

there was broad consensus among those we spoke to that the current organizational 

structure is awkward. On the other hand, officials in OCFO said the transfer of 

attorneys was necessary because in the wake of the OMHAR Anti-Deficiency Act 

investigation, OGC restricted access to the appropriation law attorneys making it 

very cumbersome for OCFO staff and program office officials to obtain timely, 

needed advice on appropriation issues. We were told that collaboration occurred 

informally prior to the OMHAR Anti-Deficiency Act investigation. At some point 

during the OMHAR Anti-Deficiency Act investigation, OGC instituted a policy of 

requiring formal written requests for all appropriation law services. 

The General Counsel expressed three key concerns about the change in 

organizational structure mandated by the Appropriations Act. First, he was 

concerned that under the current structure his office might not be informed of all 

legal issues that arise within the department, including those that should be elevated 

to the Secretary’s attention. Second, he and others commented that now the 

Secretary and even the program assistant secretaries could be presented with two 

conflicting legal interpretations and that there is currently no mechanism for 

resolving these differences. In the past the General Counsel, after hearing the 

opposing views, would make the final interpretation of law. Third, he thought that 

under the current structure there was a greater risk for program office officials to 

“shop” for the legal interpretation that best met their goals. He said having all the 

attorneys placed within OGC reduces that risk because all legal issues ultimately 

were subject to review and resolution by the General Counsel. 

Officials within OCFO told us that they believe the creation of a separate 

appropriations law function within OCFO has resulted in an increase in the level of 

legal staff effort and service devoted to appropriations law issues, and that this 

increased focus and effort should be sustained regardless of its organizational 

placement within HUD. An OGC official told us that prior to their transfer to OCFO, 

the four appropriation law attorneys assigned to her spent less than half their time on 

appropriation law issues. 

Several HUD officials from both OGC and OCFO said that the OMHAR AntiDeficiency Act investigation highlighted the need for additional resources and 

expertise in its appropriation law function and that prior to the enactment of the 

Appropriation Act, OGC had hired an additional attorney with considerable 

appropriations law experience to bolster that function. However, this attorney was 

not one of those transferred to OCFO because, according to HUD’s General Counsel, 

at the time of the transfer this individual was not assigned to the division that was 

specifically identified in the Appropriation Act as having to transfer staff. 
Page 9 GAO-04-272R HUD Appropriation Law Issues 

While most of the HUD attorneys we spoke with, including the head OCFO 

appropriations law attorney, believed that HUD has done its best under the new 

structure to ensure that coordination between the program attorneys and the 

appropriation law attorneys continues, nearly all acknowledged that there was initial 

and even lingering confusion in some situations as to what group of attorneys has 

responsibility over a particular issue. The HUD program office officials raised the 

same issue. 

Two attorneys stated that it is often difficult to seperate appropriation law issues 

from other legal issues, which highlights the need for good coordination and 

communication between all of HUD’s attorneys. There was further concern raised 

that as the attorneys in OGC and OCFO change over time the level of coordination 

between the two groups could deteriorate under the current structure. Currently, 

OGC and OCFO attorneys have the benefit of long-standing working relationships 

with one another. 

5. Does the “sole authority” to investigate and report provided to the CFO 

by the Appropriations Act conflict with or undermine the authority provided 

to the Inspector General by the Inspector General Act? 

The IG Act provides that IGs shall have the duty and responsibility to “conduct, 

supervise, and coordinate ... investigations relating to the programs and operations 

of the agency.”12 The IG Act also provides that an IG “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.”13 The OIG identified these 

provisions of the IG Act as being in conflict, or at least potentially in conflict, with the 

literal language of the Appropriations Act. 

The HUD OIG officials we met with, including the counsel to the Inspector General, 

pointed to the language in the Appropriations Act that provides the OCFO with “sole 

authority to investigate potential or actual violations under the Anti-Deficiency Act” 

as conflicting with the language of the IG Act providing the IG with general authority 

to investigate HUD matters. They believe the literal language of the Appropriations 

Act precludes the OIG from investigating potential Anti-Deficiency Act violations, 

including those that might be identified during routine or ongoing OIG jobs or those 

that are reported via the Inspector General’s fraud hotline. As a result, the OIG 

officials said they are referring all potential Anti-Deficiency Act matters to OCFO. 

The OIG also brought up that, in addition to providing OCFO with the sole authority 

to investigate potential or actual Anti-Deficiency Act violations, the language in the 

Appropriations Act provides that OCFO shall determine whether violations exist and 

submit final reports on violations.14 The OIG said that there is a possible conflict 

 

12 5 U.S.C. Appendix § 4(a)(1)(2000). Other provisions of the IG Act also support the IG’s authority to 

investigate.

13 5 U.S.C. Appendix § 4(c).

14 The Anti-Deficiency Act provides for heads of agencies to report violations to the President and 

Congress. 31 U.S.C. §§ 1351, 1517(b). 
Page 10 GAO-04-272R HUD Appropriation Law Issues 

between this language and the language in section 4(c) of the IG Act, which directs 

the IG to report to the Attorney General if the IG reasonably believes there has been a 

violation of criminal law.15 The OIG is unclear how to reconcile this provision with 

OCFO’s current authority. OIG officials told us that they have not yet been faced 

with a situation that required resolution of this issue. 

An OCFO official expressed a somewhat different view of the Appropriation Act’s 

potential effect on the IG. The officials stated that the OIG should not routinely be 

involved in an Anti-Deficiency Act violation until the department has determined 

whether an actual violation has occurred. At that time, the OCFO official said it 

would be appropriate for the OIG to review the work that went into the investigation, 

and more importantly and pursuant to their authority to investigate, determine

whether criminal acts may have been committed. 

Agency Comments and Our Evaluation 

On November 19, 2003, HUD’s Assistant Inspector General for Audits provided us 

with oral comments expressing the Office of Inspector General’s agreement with the 

information presented that pertained to or was attributable to the OIG. HUD did not 

take an official position on the issues discussed in this report but instead provided 

separate letters containing technical comments from its Deputy Chief Financial 

Officer and the Deputy General Counsel. We considered these comments and as we 

deemed appropriate made revisions to the report. 

As agreed with your offices, unless you publicly announce the contents of this report 

earlier, we plan no further distribution until 14 days from its date. At that time, we 

will send copies to the Secretary of Housing and Urban Development, the Inspector 

General, and interested congressional committees. We will also provide copies to 

others on request. The report will also be available at no charge on the GAO Web site 

at http://www.gao.gov. 

If you have any questions about this report, please contact me at (202) 512-9508, or 

Phillip McIntyre, Assistant Director, at (202) 512-4373. You may also reach us by Email at calboml@gao.gov or mcintyrep@gao.gov. Other key contributors to this 

report were Jeffrey Jacobson and Jack Hufnagle. 

Linda M. Calbom 

Director, Financial Management and 

 Assurance 

(190107) 

 

15 An Anti-Deficiency Act violation may be subject to criminal penalty. 31 U.S.C. §§ 1350, 1519 (2000). 
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