Congressional Directives: Selected Agencies' Processes for Responding to Funding Instructions
Released: 2008-01-31T00:00:00

Letter

Section 1: Background

This section provides context for understanding the history and use of congressional direction for appropriated funds. It traces the development of authority for congressional direction of funds from the U.S. Constitution to the current focus on reducing the number and amount of earmarks in appropriations legislation.

The Constitution gives Congress the power to levy taxes and raise revenue for the government, to finance government operations through appropriation of federal funds, and to prescribe the conditions governing the use of those appropriations. This power is generally referred to as the congressional “power of the purse.” The linchpin of congressional control over federal funds is found in article I, section 9, clause 7 of the Constitution, which provides that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Thus, no officer or employee of the government may draw money out of the Treasury to fund agency operations unless Congress has appropriated the money to the agency. At its most basic level, this means that it is up to Congress to decide whether to provide funds for a particular program or activity and to fix the level of that funding.

It is also well established that Congress can, within constitutional limits, determine the terms and conditions under which an appropriation may be used. In other words, Congress can specify (or direct) in an appropriation the specific purposes for which the funds may be used, the length of time the funds may remain available for these uses, and the maximum amount an agency may spend on particular elements of a program. In this manner, Congress may use its appropriation power to accomplish policy objectives and to establish priorities among federal programs. It is then the obligation of the agencies under Presidential supervision to ensure that these policy objectives and priorities are faithfully executed.

Definitions

Historically, the term “earmark” has described legislative language that designates a specified amount of a larger appropriation as available only for a particular object. The term earmark derives from ancient England where English farmers would mark the ears of their swine, oxen, and other livestock to cull them from the village herd and demonstrate ownership. In common usage, however, the term earmark soon developed a broader meaning.

There are many definitions of earmarks. For example, our Glossary of Terms Used in the Federal Budget Process defines earmarking as either of the following: 1. Dedicating collections by law for a specific purpose or program.

Earmarked collections include trust fund receipts, special fund receipt accounts, intragovernmental receipts, and offsetting collections credited to appropriation accounts. These collections may be classified as budget receipts, proprietary receipts, or reimbursements to appropriations. 2. Designating any portion of a lump-sum amount for particular purposes by means of legislative language. Sometimes “earmarking” is colloquially used to characterize directions included in congressional committee reports but not in the legislation itself. “There is not a single definition of the term earmark accepted by all practitioners and observers of the appropriations process, nor is there a standard earmark practice across all 13 appropriation bills. According to Congressional Quarterly’s American Congressional Dictionary, under the broadest definition ‘virtually every appropriation is earmarked.’ In practice, however, earmarks are generally defined more narrowly, often reflecting procedures established over time that may differ from one appropriation bill to another.

For one bill, an earmark may refer to a certain level of specificity within an account.

For other bills, an earmark may refer to funds set aside within an account for individual projects, locations, or institutions (emphasis added).”

In recent years there has been a significant amount of public discussion about the nature and number of earmarks, with exponential growth reported in the number and amounts. For example, researchers at the Brookings Institution, on the basis of data compiled by CRS, cited dramatic growth in earmarks between 1994 and fiscal year 2006. In fact, CRS data show increases in the number and amount for individual appropriation bills during that period.

Any discussion of trends, however, is complicated by the fact that different definitions of the term earmarks exist and that the amounts reported vary depending on the definition used. Although CRS has totaled the number and amount of earmarked spending for each of the regular annual spending bills enacted since fiscal year 1994, CRS has cautioned that the data presented for the 13 appropriations cannot be combined into a governmentwide total because of the different definitions and methodologies that were used for each bill. These differing definitions would make any total invalid.

Lump Sum and Line Item

Any definition of the term earmark requires a reference to two other terms in appropriations law—lump-sum appropriations and line-item appropriations. A lump-sum appropriation is one that is made to cover a number of programs, projects, or items. Our publication, Principles of Federal Appropriations Law (also known as the Red Book), notes that GAO’s appropriations case law defines earmarks as “actions where Congress . . . designates part of a more general lump-sum appropriation for a particular object, as either a maximum, a minimum, or both.”

Today, Congress gives federal agencies flexibility and discretion to spend among many different programs, projects, and activities financed by one lump-sum appropriation. For example, in fiscal year 2007, Congress appropriated a lump-sum appropriation of $22,397,581,000 for all Army Operations and Maintenance expenses. Many smaller agencies receive only a single appropriation, usually termed Salaries and Expenses or Operating Expenses. All of the agency’s operations must be funded from this single appropriation.

A line-item appropriation is generally considered to be an appropriation of a smaller scope, for specific programs, projects, and activities. In this sense, the difference between a lump-sum appropriation and a line-item appropriation is a relative concept hinging on the specificity of the appropriation. Also, unlike an earmark, a line item is typically separate from the larger appropriation. As noted above, in earlier times when the federal government was much smaller and federal programs were (or at least seemed) less complicated, line-item appropriations were more common. For example, among the items for which Congress appropriated funds for 1853 were separate appropriations to the Army, including: $203,180.83 for clothing, camp and garrison equipage, and horse equipment; $4,500 for fuel and quarters for officers serving on the coast survey; and $400,000 for construction and repair.

Appropriations in the Beginning of the Republic

“Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there be appropriated for the service of the present year, to be paid out of the monies which arise, either from the requisitions heretofore made upon the several states, or from the duties on impost and tonnage, the following sums, viz. A sum not exceeding two hundred and sixteen thousand dollars for defraying the expenses of the civil list, under the late and present government; a sum not exceeding one hundred and thirty-seven thousand dollars for defraying the expenses of the department of war; a sum not exceeding one hundred and ninety thousand dollars for discharging the warrants issued by the late board of treasury, and remaining unsatisfied; and a sum not exceeding ninety- six thousand dollars for paying the pensions to invalids.”

From today’s perspective, some might say that this first appropriation contains several lump-sum appropriations. Others might say that these are line-item appropriations for (1) civil servants, (2) department of war, (3) treasury, and (4) pension payments. In any event, these are congressional directives instructing the executive branch on how funds are to be spent. As discussed earlier, this illustrates the definitional difficulties in this area.

The second appropriation made by the First Congress for 1791 contained a congressional directive to spend “a sum not exceeding fifty thousand seven hundred and fifty-six dollars and fifty-three cents,” for several specific objects requested by Secretary of the Treasury Alexander Hamilton in his budget estimates, such as converting the Beacon of Georgia into a lighthouse and for the purchase of hydrometers.

Congressional Directives and Restrictions in Legislative History

Today, congressional committees sometimes insert spending directives and restrictions on the use of appropriated funds in what is known as the legislative history of an act—that is, House, Senate, and conference reports accompanying a piece of legislation. As a matter of law, instructions in committee reports and other legislative history as to how funds should or are expected to be spent do not impose any legal requirements on federal agencies. Only directions that are specified in the law itself are legally binding.

This does not mean agencies are free to ignore clearly expressed legislative history applicable to the use of appropriated funds. In a 1975 decision, we pointed out that agencies ignore such expressions of intent at the peril of strained relations with committees and that agencies have a practical obligation to abide by such expressions. This obligation, however, must be understood to fall short of a legal requirement giving rise to a legal infraction where there is a failure to carry out that obligation. In that decision, we pointed out that Congress has recognized that it is desirable to maintain executive flexibility to shift funds within a particular lump-sum appropriation account so that agencies can make necessary adjustments for unforeseen developments, changing requirements, and legislation enacted subsequent to appropriations. This is not to say that Congress does not expect that funds will be spent in accordance with budget estimates or in accordance with restrictions or directions detailed in committee reports. However, in order to preserve spending flexibility, it may choose not to impose these particular restrictions as a matter of law, but rather to leave it to the agencies to “keep faith” with Congress. “Congress may always circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes (though not . . . just in the legislative history). And of course, we hardly need to note that an agency’s decision to ignore congressional expectations may expose it to grave political consequences.”

Recent Guidance to Agencies on Collecting Data on Earmarks

There have been numerous calls in and out of Congress for earmark reform. Both Houses of Congress have taken steps to increase disclosure requirements. In January 2007, the President proposed “earmark reforms” in his State of the Union address. These included cutting the number and amount of earmarks by at least half. According to the Office of Management and Budget (OMB), in fiscal year 2005, there were 13,492 earmarks totaling $18,938,657,000 for appropriations accounts. “Earmarks are funds provided by the Congress for projects or programs where the congressional direction (in bill or report language) circumvents the merit-based or competitive allocation process, or specifies the location or recipient, or otherwise curtails the ability of the Administration to control critical aspects of the funds allocation process.”

OMB asked agencies to provide earmark information encompassed in all enacted appropriations bills in fiscal year 2005 and in any congressional reports. The guidance to agencies also directed prioritization of data collection to focus first on appropriations bills, since legislative action on those bills typically begins in the spring. In addition, OMB directed agencies to plan on providing information on earmarks in authorizing and other bills that are identified based on consultation with OMB. OMB’s guidance to agencies excludes from its definition of earmarks funds requested in the President’s Budget.

OMB posted these data on its Web site and also asked agencies to identify earmarks in fiscal year 2008 appropriations bills as they moved through the legislative process. This request for data asked the heads of departments and agencies to report to OMB the number and dollar value of earmarks in each account within 7 days after an appropriations bill is reported by the House or Senate Appropriations Committee or passes on the House or Senate floor.

Section 2: Department of Defense

The Department of Defense (DOD) is responsible for the military forces needed to deter war and protect the security of the United States. The major elements of these forces are the Army, Navy, Air Force, and Marine Corps. DOD includes the Office of the Secretary of Defense (OSD), the Chairman of the Joint Chiefs of Staff, three military departments, nine unified combatant commands, the DOD Inspector General, 15 defense agencies, and 7 DOD field activities.

We focused on OSD’s Comptroller; the military services (Army, Navy, Marine Corps, and Air Force); two defense agencies, the Defense Information Systems Agency (DISA) and the Defense Threat Reduction Agency (DTRA); and one combatant command, the U.S. Special Operations Command (SOCOM).

Definition DOD Used for Identifying and Tracking Congressional Directives

DOD has had a procedure in place for many years that identifies and categorizes all congressional directives—which it calls add-ons or items of congressional interest—for programs and projects contained in the bill language included in the appropriations conference report. DOD does not include items in defense authorization bills in its list of add-ons. According to DOD officials, DOD defines an add-on as an increase in funding levels in the bill language included in the appropriations conference report that was not originally requested in the President’s Budget submission. appropriate funds for execution of program directives. DOD follows defense appropriation bills to determine how to execute program directives. Six additional types of add-ons to be excluded were funding for the Global War on Terror, funding for the National Guard and Reserve Equipment (97-0350) appropriations account for procuring equipment, funding for military personnel, funding for peer-reviewed Defense health programs, policy decisions for which DOD submitted its budget request with the best estimate available at the time but for which Congress subsequently adjusted the budget request due to refined estimates provided to it, and items that are being transferred to other accounts that result in a net zero change to DOD’s overall budget.

DOD officials provided their rationale for excluding these types of add-ons for fiscal year 2005. According to DOD officials, the funding for the Global War on Terror is specific to providing support to the troops for ongoing combat operations and related activities. In fiscal year 2005, the Global War on Terror was funded primarily through supplemental appropriations rather than through the DOD base budget request. DOD officials stated that the National Guard and Reserve appropriations account to procure equipment (i.e., account 97-0350) was not an earmark because, although its funding was not requested in the President’s Budget, the funding was routinely provided directly by Congress to maximize readiness of the National Guard and Reserve. Congressional add-ons for military personnel appropriated for basic pay and benefits were excluded because these were routine, merit-based administrative costs. Peer-reviewed Defense health programs were not considered earmarks because they were funded based on merit that was determined by a panel of physicians. Policy decisions for which DOD submitted a budget but did not fully fund procurement of an item were excluded because they were based on a preliminary estimate that required additional funding and were not new items. DOD excluded funds that were transferred to other accounts because the funds needed to be aligned with the correct place in the budget before they could be obligated or expended.

DOD officials stated that the list of exclusions is guidance for the components to use as they review the congressional add-ons to determine which funds should not be considered earmarks. Components prepared justifications for each add-on they believed should be excluded based on the exclusion criteria. In addition, officials stated that the criteria are evolving and that they are continuing to work with OMB to refine them.

DOD’s Process for Identifying and Categorizing Congressional Directives

Before OMB’s 2007 guidance, DOD had an established process that it continues to use for identifying congressional directives contained in the bill language of the appropriations conference report. In addition, each component routinely monitors the congressional budget cycle and has its own staff (i.e., legislative liaisons and financial management staff) who work with congressional staff to determine, if necessary, the purposes and objectives of congressional directives. In addition, legislative liaisons are responsible for updating their leadership on the status of congressional directives during House and Senate Appropriations Committee markups, floor debates, and the final conference report.

Under the procedure DOD has had in place for years, the OSD Comptroller identifies all congressional directives contained in the bill language from the appropriations conference report, which are categorized by budget accounts and components, and provides the relevant list to the appropriate component.

In response to OMB’s 2007 guidance, DOD officials described an additional three-step process they used for identifying and categorizing fiscal year 2005 earmarks: 1. Components reviewed the list of congressional directives identified by the OSD Comptroller and applied the agreed-on exclusion criteria, then developed justifications for any congressional directives they identified as earmarks that met the criteria to be excluded, and then provided the revised list of directives and justifications back to the OSD Comptroller. 2. The OSD Comptroller and OMB jointly determined if any further adjustments needed to be made to the list based on their review of the justification provided by the components. 3. After the list was agreed on, an OSD official created the list that was uploaded to an OMB earmarks site for review. OMB approved the list for release to the public site.

Figure 1 describes DOD’s process for identifying and categorizing fiscal year 2005 congressional directives in response to OMB’s 2007 data collection effort.

Committee markups, floor debates, and the conference report) within 7 days. In addition, the DOD components will have access to the OMB database and will be required to enter the details about the earmarks, including recipient, location, and amount, as well as data on the execution status of their respective earmarks. OSD Comptroller officials said that they will be responsible for providing oversight of this process and will monitor the Web site to ensure that the components populate the database within the required time frames.

DOD’s Process for Tracking, Implementing, and Reporting on Congressional Directives

DOD does not have a centralized tracking and reporting mechanism that shows to what extent funding has been obligated and expended in accordance with congressional directives. DOD component headquarters staff track the amount of funding provided to them for individual congressional directives. Program offices track the execution of funds for the specific programs covered by the directives but are not required to report the status to the components or to the OSD Comptroller’s office.

The OSD Comptroller makes an allotment of funding for the congressional directives to the components, and this funding is tracked by the various components’ financial management systems rather than within a centralized system maintained by OSD. We identified the financial management systems for five of the six components that we interviewed. The sixth, SOCOM, at this time uses the department’s Programming, Budgeting, and Accounting System to facilitate the tracking of congressional directives. The systems described by the five components track all budget allotments and include unique codes or other features that identify funds designated for congressional directives for tracking purposes.

The financial management systems used by the five components are as follows: The Army uses the Funds Control System to track funds allotted for various directives. The system issues a funding authorization document to the Army operating agencies responsible for implementing the directives. Army officials identified two steps within the process that allow operating agencies to track congressional directives. The remarks section of the funding authorization document includes a statement that identifies the item as a congressional directive, and resource managers give each item an execution code that further facilitates tracking of such directives. congressional directives in the system. This process allows the system to produce reports on such directives for review by program managers, as needed.

The Navy’s financial management system is the Program Budget Information System that tracks congressional directives. These directives are tagged and then monitored during execution.

The Washington Allotment Accounting System is the financial accounting system used by DISA that provides information on the funding execution of congressional directives. Funding is monitored at the program level by DISA’s Home Team. According to DISA officials, congressional directives are assigned a project code that is linked to the funding documents, such as contracting vehicles, and that code allows DISA to determine that funding for a directive has been spent.

DTRA’s financial accounting system is the Centralized Accounts and Financial Resources Management System. According to DTRA officials, congressional directives are given a work unit code in the accounting system that provides the status of funds for these directives through execution.

Furthermore, Navy and Air Force officials provided examples of initiatives intended to streamline the process for tracking the status of congressional directives.

According to a Navy official, the Navy’s Enterprise Resource Planning System is part of its ongoing business transformation effort, which, among other improvements, is intended to enhance its capability to track congressional directives. Through this integrated system, the Navy plans to include a code that identifies congressional directives through its accounting system.

The Air Force Research Lab has developed a process for tracking congressional directives. The lab set up separate account codes, called Emergency and Special Program Codes, to identify the funding that has been allocated for each directive. According to Air Force officials, they are considering a similar tracking model for Air Force-wide implementation. the funding status for the list of congressional directives. Officials we interviewed from the six components said that once funding has been distributed to the program offices, they do not follow up to determine whether the directives are implemented.

OMB’s Web site for fiscal year 2005 earmarks did not provide a means to include the implementation status of individual earmarks. According to DOD officials, DOD has asked OMB to include another field that would show the implementation or completion status of congressional earmarks in OMB’s database to facilitate tracking in the future. This field will require DOD components to update information on the Web site beyond the OSD Comptroller’s initial posting of data.

DOD does not have a routine procedure for reporting to Congress on the progress being made on individual directives. According to DOD officials, components respond to individual congressional inquiries regarding the status of individual directives. In addition, the legislative liaison coordinates and oversees DOD responses to congressional inquiries on congressional directives as they are received.

DOD Officials’ Views on Trends and Impact of Congressional Directives

We interviewed DOD officials who had responsibility for budgeting, financial management, and legislative issues related to congressional directives from six components. Some of the officials stated that they had only been in their positions for a short time and therefore could not comment on the trends and impact of directives on their budget and programs. However, others provided views on how congressional directives affect budget and program execution. Anecdotally, they offered the following views: According to OSD officials, they have not maintained data on whether the number of congressional directives has increased or decreased over time. However, two military service officials commented that in their view there has been an increase in the number of such directives.

Congressional directives are viewed as tasks to be implemented and are opportunities to enhance their mission requirements through additional funding in areas that would not have been priority areas because of budget constraints.

Congressional directives can sometimes place restrictions on the ability to retire some programs and to invest in others. Restrictions have an effect on the budget because they require the components to support an activity that was not in the budget.

There has always been a feeling that the billions of dollars of congressional directives must come from somewhere, but it is not possible to determine whether any specific directive resulted in reducing funding for another program.

Congressional directives could tend to displace “core” programs, which according to a DOD official, are programs for which DOD has requested funding in its budget submission.

Additional time and effort are required to manage the increasing number of congressional directives.

Program execution of congressional directives is delayed in some cases as efforts are made to identify congressional intent.

The process for identifying the purposes and objectives of a congressional directive was significantly streamlined in the fiscal year 2008 defense appropriations bill, and it is now easier to determine the source of a directive.

Section 3: Department of Energy

The Department of Energy’s (DOE) mission is to promote energy security and scientific and technological innovation, maintain and secure the nation’s nuclear weapons capability, and ensure the cleanup of the nuclear and hazardous waste from more than 60 years of weapons production. DOE’s nine program offices focus on accomplishing various aspects of this mission. We reviewed documentation and interviewed officials in the Office of Budget, which is within the Office of the Chief Financial Officer, and four DOE program offices: the National Nuclear Security Administration (NNSA), Office of Science, Office of Energy Efficiency and Renewable Energy (EERE), and Office of Electricity Delivery and Energy Reliability.

Definition DOE Used for Identifying and Tracking Congressional Directives

Since 2005 DOE has generally defined congressional directives, which it refers to as earmarks, as funding designated for projects in an appropriations act or accompanying conference or committee reports that are not requested in the President’s Budget. These congressional directives specify the recipient, the recipient’s location, and the dollar amount of the award and are awarded without competition. DOE officials said that this definition does not include money appropriated over and above the department’s budget request (also known as “plus ups”) or program direction contained in the act or report language because the department can still develop projects and compete them in following this direction. However, before fiscal year 2005 some DOE program offices considered program direction in committee reports, such as language requesting more research in a certain area, to be earmarks.

DOE’s Process for Identifying and Categorizing Congressional Directives

Officials from DOE’s Office of Budget and program offices separately review the appropriations act and accompanying conference and committee reports to identify and categorize congressional directives by program office. These processes are not recorded in written policy but have generally been in place since fiscal year 2005, according to DOE officials. Once the staff of the Office of Budget and each program office develop their lists, they work together to reconcile any differing interpretations of the act and report language to produce a single list. Program office staff make the final determination on whether a particular provision should be considered a congressional directive. During the course of the fiscal year, this list may change as the Office of Budget or a program office learns more about the intent of the appropriations committee responsible for the direction.

The process for identifying and categorizing congressional directives has changed somewhat since OMB issued instructions on earmarks in 2007. According to DOE Office of Budget officials, OMB’s January 2007 definition of earmarks differed from DOE’s definition, and applying OMB’s definition somewhat increased the number of earmarks the department reported to OMB for fiscal year 2005. For example, DOE budget officials said that OMB’s definition of earmarks includes money specified for a particular DOE laboratory, while DOE’s definition does not because DOE maintains some level of control over project objectives and outcomes at these laboratories. These budget officials also said that DOE is planning to adopt OMB’s definition beginning in fiscal year 2008 to identify earmarks to make this process of developing a list of earmarks more uniform.

DOE’s Process for Tracking, Implementing, and Reporting on Congressional Directives

research or demonstration projects under the Energy Policy Act of 2005. They also prepare a Determination for Non-Competitive Financial Assistance to explain why the award will not be competed—a document that requires approval by the relevant program Assistant Secretary. Once these paperwork requirements have been met and a financial assistance agreement (grant or cooperative agreement) is awarded, the recipient can begin withdrawing funds from an account set up for the project or submit requests for reimbursements. During the course of the project, the recipient must submit progress reports and a final report to program officials.

Contract management staff in each of the four program offices use administrative databases to track each of their projects, including congressional directives. They use these databases to help manage workload for project officers and to keep track of documentation sent to and received from recipients. Specifically, EERE tracks each of its congressional directives through an Internet-based database. The other three DOE program offices maintain separate, less formal spreadsheets on the congressional directives for their specific programs. These spreadsheets contain background information, such as the project’s purpose, dollar amount, and recipient. These spreadsheets are not part of a larger DOE tracking system. In addition, the program offices do not prepare regular reports on congressional directives and generally only follow up on the status of a particular congressional directive if they receive an inquiry from the appropriations committee. DOE Budget Office officials told us that the departmentwide accounting system, the Standard Accounting and Reporting System, cannot generate reports specifically on congressional directives for the department. This is because DOE’s program offices differ in the way they assign accounting codes to congressional directives. For example, while EERE assigns an individual accounting code to each directive, NNSA generally does not. recipient of congressional directives in prior years that sought continued funding in fiscal year 2007 to submit an application for a formal merit review by the department because (1) the resolution directed all federal departments (including DOE) to disregard fiscal year 2006 congressional directives, cutting off funding for any multiyear directives from previous years, and (2) no committee reports, which are the primary source of the department’s congressional directives, accompanied the continuing resolution. As a result of this policy, program officials from the Office of Science told us that they received few applications for continued funding in fiscal year 2007. The department funded substantially fewer congressional directives compared to previous years.

DOE Officials’ Views on Trends and Impact of Congressional Directives

DOE officials stated that through fiscal year 2006 the number of congressional directives had increased, and that this growth limited the ability of certain program offices to develop and implement their strategic goals. DOE officials said that the number of congressional directives began a steady rise in the late 1990s that continued through fiscal year 2006. As noted earlier, they said that because of the continuing resolution there were far fewer projects in fiscal year 2007 that were associated with congressional directives. In terms of the types of congressional directives awarded since the late 1990s, DOE officials from two program offices said that there were “hot topics” that garnered attention at certain times. For example, an official from EERE—which had the highest dollar value of congressional directives among DOE program offices—told us that there were directives in recent years to fund fuel cell research at specific facilities.

DOE program officials reported that implementing congressional directives imposed a high administrative burden. For example, many officials reported that it takes longer to process and award congressional directives because DOE personnel need to educate some recipients on DOE’s processes, such as how to submit an application and comply with DOE’s reporting requirements and the applicability of cost-sharing requirements. To help address this issue, EERE invites all recipients of congressional directives to a presentation at DOE headquarters for an overview of the process.

EERE and the Office of Electricity Delivery and Energy Reliability said that they were not appropriated additional dollars to fund congressional directives. These program officials told us that their ability to accomplish their strategic goals has been limited because congressional directives make up a large percentage of their budget and it is often difficult to align the outcomes of congressional directives with these goals.

Section 4: Department of Transportation: Highways and Transit

The Department of Transportation (DOT) implements and administers most federal transportation policies through its 10 operating administrations. These operating administrations are generally organized by mode and include highways and transit. The operating administrations are responsible for independently managing their programs and budgets to carry out their goals as well as those of the department. As such, DOT has delegated the responsibility for identifying, categorizing, tracking, and reporting on congressional directives to its operating administrations.

The Federal Highway Administration (FHWA) is responsible for the highway program, and the Federal Transit Administration (FTA) is responsible for the transit program. While FHWA and FTA carry out some activities directly, they, like many other DOT operating administrations, do not have direct control over the vast majority of the activities they fund through grants, such as constructing transportation projects. The recipients of transportation funds, such as state departments of transportation, are responsible for implementing most transportation programs and congressional directives. The federal highway and transit programs are typically funded through multiyear authorization acts, such as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) and its predecessor, the Transportation Equity Act for the 21st Century (TEA-21). These authorization acts, which are subject to the annual appropriations process, set the upper funding limit for the federal highway and transit programs. Both the authorization and appropriations acts contain congressional directives for the federal highway and transit programs. See figure 2 for additional information on the mission and organizational structure of FHWA and FTA.

Section 4: Department of Transportation: Highways and Transit FHWA provides financial and technical support to states and localities for constructing, improving, and preserving the national highway system through its headquarters office and 52 federal-aid division offices (division offices). Division offices are located in every state, as well as the District of Columbia and Puerto Rico, and provide front-line delivery assistance in the areas of highway transportation and safety services.

FTA supports locally planned and operated mass transit systems throughout the United States through its headquarters office and 10 regional offices. The regional offices work with local transit officials in developing and processing grant allocations, providing technical assistance, and monitoring projects.

Definitions FHWA and FTA Used for Identifying and Tracking Congressional Directives

DOT’s definition of congressional directives, which it refers to as earmarks, has remained generally consistent over a number of years and mirrors OMB’s definition. Although DOT has not issued guidance on the definition of earmarks to its operating administrations, DOT officials said that they expect the operating administrations to follow OMB’s definition. Although FHWA’s and FTA’s definitions are generally consistent with OMB’s definition, there are a few differences, specifically: FHWA defines earmarks as designations that specify a recipient, purpose, and total funding amount. FHWA officials told us that they consider their definition narrower in scope than OMB’s definition because OMB does not require an earmark to contain all three elements (i.e., recipient, purpose, and total funding amount). FHWA distinguishes between statutory designations that are binding on the agency and nonstatutory designations identified in congressional reports that are not binding on the agency. FHWA officials did not change their definition of earmarks after the release of OMB’s guidance in 2007. FHWA officials told us that they honored fiscal year 2007 statutory designations and handled nonstatutory designations in accordance with the OMB guidance. definition would capture New Starts projects, which are typically designated in both the President’s Budget and legislation. OMB’s definition would not capture the New Starts projects, if the projects and funding levels designated by Congress match the projects and funding levels designated in the President’s Budget. FTA officials did not change their definition of earmarks after the release of OMB’s guidance in 2007.

FHWA and FTA Processes for Identifying and Categorizing Congressional Directives

DOT has delegated the responsibility for identifying and categorizing congressional directives to its operating administrations. FHWA has further delegated the responsibility for identifying and categorizing congressional directives to its program offices. For example, the Office of Infrastructure is responsible for identifying congressional directives in the High Priority Projects program—which falls under this office’s purview. When identifying congressional directives, FHWA categorizes them as statutory, nonstatutory, or hybrids. apportionments and allocations. Both FHWA and FTA officials told us that they comply with nonstatutory congressional directives that meet eligibility requirements to the extent possible—although they are not required to do so.

FHWA and FTA Processes for Tracking, Implementing, and Reporting on Congressional Directives

FHWA uses an electronic system to track congressional directives. FHWA’s Office of the Chief Financial Officer and program offices collaborate to track most congressional directives. Staff in FHWA’s Office of the Chief Financial Officer enter projects into the tracking system after receiving requests from program offices for project identification numbers. Once congressional directives are entered into the system, they are not tracked separately from other projects, such as those funded by formula. The program offices then send memorandums to FHWA division offices to notify them of the total amount of funds available for each project. Officials from FHWA division offices and state departments of transportation with whom we spoke have access to FHWA’s system and may also track congressional directives using their own systems. Officials in these offices said that they also maintain their own tracking systems to improve their staff’s and the public’s access to data and to corroborate data in the federal tracking system. was added to the system in 2006, in part, to track what they described as the growing number of congressional directives.

FHWA and FTA do not typically implement congressionally directed projects. Rather, they provide funds through grants, and state and local agencies generally implement the highway and transit congressional directives in carrying out their programs. Specifically, FHWA division offices and FTA regional offices administer and obligate funds for projects, including congressionally directed projects, to grant recipients and respond to questions from recipients on issues related to eligibility and transferability, among other things. In turn, the grant recipients implement congressional directives. Figure 3 illustrates the processes used by FHWA and FTA to identify, track, and implement congressional directives. “clarification letters” that are periodically sent to DOT from congressional committees. These letters are jointly signed by the House and Senate appropriations subcommittees and provide clarification on how Congress would like to see directed funds used. DOT provides the responsible operating administrations, such as FHWA or FTA, with these letters and coordinates responses on whether the operating administration can comply with the request. In addition to responding to specific requests from congressional committees, DOT also communicates some general funding information on congressional directives to Congress. For example, as required by law, DOT notifies the relevant House and Senate Committees prior to announcing a discretionary grant, letter of intent, or full funding grant agreement totaling $1 million or more. In addition, FTA reports to Congress at the end of each fiscal year on all projects with unobligated funds that have reached the end of their availability period.

FHWA and FTA Officials’ Views on Trends and Impact of Congressional Directives

FHWA officials, as well as officials from the state departments of transportation with whom we spoke, stated that the number and value of directives, notably high-priority projects, increased substantially from TEA-21 (1998 to 2003) to SAFETEA-LU (2005 to 2009). FHWA officials provided documentation that showed that the number of High Priority Projects listed in SAFETEA-LU was almost triple that of the number of projects listed in TEA-21. FTA officials also stated that the number and value of authorization and appropriations directives in transit programs increased between TEA-21 and SAFETEA-LU.

SAFETEA-LU. FHWA officials further noted that congressional directives can be inconsistent with states’ transportation priorities, particularly if the congressional directives are for projects outside of their statewide transportation programs. Officials from one state department of transportation noted that although many congressional directives in SAFETEA-LU were requested by the state, about one-third of the congressional directives did not have statewide benefits or serve an eligible highway purpose.

A senior FTA official also noted that congressional directives may result in the displacement of projects that FTA views as being a higher priority and ready for implementation with projects that are a lower priority for FTA. For example, some New Starts congressional directives provide funding for projects that are not yet ready for implementation, delaying the implementation of FTA’s higher-priority projects that are scheduled to receive federal appropriations.

FTA officials said that roughly 85 to 90 percent of the congressional directives received in the New Starts program are for projects that FTA has recommended for funding in its budget. One FTA official also acknowledged that some congressional directives provide funding for projects that FTA has identified as priorities in its research program and were included in the President’s Budget, although the majority of directives were not requested and displaced research activities FTA identified as being of higher priority. funding in a merit-based selection process. FTA officials also told us that congressional directives sometimes provide funding for projects that would otherwise be considered ineligible, such as directives to construct parking garages with transit funding.

Officials from FHWA division offices and FTA noted that in some cases, the language of congressional directives makes it difficult to implement projects. For example, an official from one FHWA division office noted that some congressional directives for the state contained language that was either too specific and was therefore inconsistent with the purposes and objectives of the local sponsor or contained language that made the project ineligible because it did not meet certain federal regulations. According to agency officials, in these cases, a technical corrections bill must be passed before the projects can be implemented, delaying implementation of the projects.

Officials we spoke with from three state departments of transportation also noted that inflexibilities in the use of congressionally directed funds limit the states’ ability to implement projects and efficiently use transportation funds by, for example, providing funding for projects that are not yet ready for implementation or providing insufficient funds to complete particular projects.

An official from one state department of transportation noted that although congressional directives can create administrative challenges, they often represent funding that the state may not have otherwise received.

FHWA and FTA officials noted that the growth in the number of congressional directives has increased the time and staff resources needed to identify and track projects. For example, FHWA officials noted that relative to their proportion of the budget, they devote a higher percentage of time to administering congressional directives than other projects. Similarly, officials from FHWA division offices stated that they spend a substantial amount of time working with the state to determine whether projects meet federal eligibility requirements, respond to questions of transferability, and provide assistance to the state for projects that were not included in their state transportation plan. FTA officials noted that some recipients of a congressional directive are unaware of the directive and may decide to use the grant for another purpose, making it difficult to obligate funds within the 3-year availability period.

Section 5: U.S. Army Corps of Engineers’ Civil Works Programs

Through its Civil Works programs, the U.S. Army Corps of Engineers (Corps) investigates, develops, and maintains water and related environmental resources throughout the country to meet the agency’s navigation, flood control, and ecosystem restoration missions. Headquartered in Washington, D.C., the Corps has eight regional divisions and 38 districts that carry out its domestic civil works responsibilities. Figure 4 shows the Corps’ divisions and districts.

Definition Corps Civil Works Used for Identifying and Tracking Congressional Directives

The Corps has identified congressional directives for many years for project implementation purposes. The Corps has used the term adds to identify some congressionally directed projects. According to Corps budget officials, congressional directives are defined by the agency as any of the following changes to requests made in the President’s Budget: an increase or decrease in funding levels for a budgeted project, the funding of a project that was not included in the President’s Budget, and any project that has language in a committee or conference report or in statute that restricts or directs the Corps on how to spend funds.

Corps officials told us that this definition is consistent with the definition of earmarks in OMB’s 2007 guidance, except that an earmark is a restriction or specification on the use of funds, while a congressional directive can be simply an increase or decrease in funding for a budgeted project. For project implementation purposes, the Corps has continued to identify congressional directives in the same manner as it did before OMB issued its guidance. that a separate effort was needed because (1) OMB required information that was not available from the Corps’ normal process for identifying congressional directives and (2) the Corps had only a short time to respond to the request. The program manager responsible for responding to OMB identified the fiscal year 2005 earmarks using appropriations bills and conference reports. To complete the OMB request, the program manager supplemented this information with some project-level details, such as the name of the nonfederal sponsor, which the manager obtained from the relevant districts, according to Corps officials. These officials also said that the results of the program manager’s work were reviewed by Corps managers before the information was submitted to OMB.

Corps Civil Works’ Process for Identifying and Categorizing Congressional Directives

The Corps identifies all congressional directives included in appropriations statutes, bills, and related conference reports each year and routinely makes this information available to its headquarters and division and district staff, according to Corps officials. With the assistance of the district offices, officials in each of the Corps’ divisions develop spreadsheets identifying the congressional directives in their region by examining the language in appropriations committee reports, the conference report, and the appropriations statute and comparing this language to the President’s Budget. According to Corps budget officials, most congressional directives receive no special attention because they are generally categorized as being in compliance with the Administration’s budget policy and the Corps’ policy (i.e., increased funding provided to projects included in the President’s Budget). not provide the nonfederal sponsor with credit for work completed before the nonfederal sponsor enters into an agreement with the Corps.

For the congressional directives that require additional discussion on how the Corps will implement the projects, the divisions prepare fact sheets. Table 1 shows the various types of information provided with each fact sheet. submits all prepared fact sheets with the recommended implementation plans to Corps headquarters and the Office of the Assistant Secretary of the Army for Civil Works for their review. Each division then has a teleconference with these headquarters officials to discuss and approve the plans. Most implementation plans are completed at this stage.

For the fact sheets with unresolved issues, each division holds a videoconference with officials from headquarters and the Assistant Secretary’s office. Attendees for each videoconference include senior executives from the Corps and the Office of the Deputy Assistant Secretary of the Army for Management and Budget. After this videoconference, each division incorporates changes to its implementation plan and resubmits it for final approval by headquarters and the Assistant Secretary.

Corps headquarters releases the associated funding for all projects to the districts immediately after the agency receives its appropriation. Corps officials said that while the implementation plans are being discussed for projects with unresolved issues, the districts may obligate funds for certain activities that do not conflict with Administration budget policy or Corps policy. Once the implementation plans are completed, the districts will continue to execute remaining aspects of the plans.

However, according to a Corps official, there are a few instances in which the Corps does not execute the project. These instances may occur, for example, when (1) funds are appropriated for the project, although funds had not previously been authorized; (2) the project was authorized, but the authorized spending limit had already been reached; or (3) the Corps was directed to continue a feasibility study, but the agency found that the least costly alternative was to relocate the affected facilities and the local sponsor was not interested in continuing the study. In such situations, the districts are generally responsible for informing individual Members of Congress about the decisions affecting their respective jurisdictions, and Corps headquarters notifies the relevant congressional committees.

Corps Civil Works’ Process for Tracking, Implementing, and Reporting on Congressional Directives

According to Corps officials, the Corps does not have a separate approach for tracking, implementing, and reporting on projects generated from congressional directives. Instead, all projects are managed in the same manner for tracking, implementation, and reporting purposes. The procedures are detailed in a manual that establishes the Corps’ project management practices. For example, all Corps projects require a written project management plan that details how the project will be accomplished. A Corps official stated that the process does not include a distinct method for reporting on the status of directives to Congress or any of its committees or members.

Corps Civil Works Officials’ Views on Trends and Impact of Congressional Directives

The Corps does not analyze trends in congressional directives, and there was no consensus among the officials we spoke with on trends in the number of these directives. While some Corps officials told us that they believe the overall number of congressional directives has remained at about the same level for the last decade, another Corps official told us that he believes the number of congressional directives has increased throughout the decade. This official stated that in recent years Congress has added a number of projects that the Corps labels as “environmental infrastructure projects” that are outside the scope of the Corps’ historic missions. Those projects included building sewage treatment plants and water supply facilities, revitalizing local waterfronts, and maintaining waterways primarily for local recreation. The Chief of the Programs Integration Division, who is responsible for the Civil Works budget, estimated that these types of congressional directives are a small portion of the Corps’ Civil Works program budget.

If the Corps categorizes a congressional directive as being inconsistent with the Administration or Corps policy, the Corps will not budget for the project in subsequent fiscal years. Officials said that they believe this could potentially increase the Corps’ backlog of incomplete projects.

Congressional directives are more difficult to plan and schedule for execution in advance compared with projects included in the President’s Budget. Officials said that this is because it is more difficult to develop an accurate project timeline because of the greater uncertainty about future funding levels for these projects.

Congressional directives may make it more difficult for the Corps to predict and manage full-time equivalent (FTE) levels and allocations from year to year. Even though congressional directives increase the Corps’ budget authority, the Corps generally establishes FTE levels using the President’s Budget much earlier in the year. Because the number and regional focus of congressional directives can change from year to year, the Corps faces some uncertainty about whether it will have adequate staff in the right locations to manage the project workload of each district in response to the changing nature of the congressional directives.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to identify for selected agencies (1) the process for identifying and categorizing congressional directives; (2) the process for tracking, implementing, and reporting on congressional directives; and (3) agency officials’ views on the trends and impact of congressional directives. The selected agencies were the Department of Defense (DOD), the Department of Energy (DOE), the Department of Transportation (DOT), and the U.S. Army Corps of Engineers’ Civil Works programs (Corps). These agencies cover a range of characteristics concerning congressional directives, including the number of congressional directives.

DOD received the largest number of reported congressional directives and made up 55 percent of discretionary appropriations for fiscal year 2006. We focused our review on the relationship between the Office of the Secretary of Defense’s Comptroller and the components (i.e., military services, defense agencies, and combatant commands) and how the components internally process and account for congressional directives. Specifically, we focused on the Army, Navy, Marine Corps, and Air Force; the Defense Information Systems Agency and the Defense Threat Reduction Agency; and the U.S. Special Operations Command.

DOE generally receives congressional directives in reports that accompany annual appropriations acts. Congressional directives are spread across DOE’s programs, with some programs reporting that congressional directives make up a large portion of their budgets. We focused our review on the following program offices that oversee the majority of DOE’s congressional directives: the National Nuclear Security Administration (NNSA), the Office of Energy Efficiency and Renewable Energy (EERE), the Office of Electricity Delivery and Energy Reliability, and the Office of Science.

DOT receives congressional directives contained in multiyear transportation authorization acts. We focused our review on the surface transportation programs administered by the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) because of the level of funding authorized in the current surface transportation authorizing legislation, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), and the number of congressional directives contained in this legislation for these programs.

The Corps’ Civil Works programs maintain a wide range of water resources projects, including flood protection, navigation, or other water- related infrastructure. Under some definitions of directives, the Corps’ appropriations could be characterized as consisting largely of directives.

We assessed the reliability of the agencies’ data on congressional directives tracking by speaking with knowledgeable officials using a common set of questions about their past and current definitions of congressional directives for purposes of identifying and tracking such directives. We learned that the definitions—both across and, sometimes, within agencies—were not consistent. Therefore the data cannot be used for making comparisons across agencies or showing trends over time, nor can the data from different agencies be aggregated.

This review provides information on the processes described to us by officials at the selected agencies. The information provided is not generalizable beyond the four agencies. In addition, we did not evaluate the agencies’ processes for compliance with the Office of Management and Budget’s (OMB) guidance on earmarks, memorandum M-07-09.

To identify the selected agencies’ processes for identifying and categorizing congressional directives, we first had to determine how they identified directives (i.e., how they defined them) as well as whether the definition changed after the January 25, 2007, issuance of the OMB guidance.

We determined the extent to which the agencies had established processes for identifying and categorizing congressional directives (e.g., by organization, program, location, statute or report, type of directive, or type of impact). To do so, we reviewed the selected agencies’ policies and guidance for identifying and categorizing congressional directives, including the source of these directives before fiscal year 2007 (e.g., statute or conference report). We also interviewed knowledgeable agency officials in budget, program, and congressional affairs offices.

At DOD, we interviewed officials from the Office of the Secretary of Defense Comptroller’s office and budget officials from components to obtain information on how congressional directives are implemented as well as to obtain their views on the impact of congressional directives on their budget and program execution. We also interviewed officials responsible for legislative affairs who support budget officials in determining congressional intent of congressional directives.

At DOE, we spoke with officials from NNSA, the Office of Science, EERE, the Office of Electricity Delivery and Energy Reliability, and the Office of Budget in the Office of the Chief Financial Officer. We also spoke with officials from some of the site offices that help the program offices implement and track congressional directives.

At DOT, we spoke with officials from the Office of the Secretary, FHWA, and FTA. Because implementation is handled at the division and state levels, we also interviewed officials from FHWA division offices and state departments of transportation in Alaska, Florida, and Maine. We selected the division offices and states to interview based on the number of congressional directives in SAFETEA-LU as well as the level of oversight and involvement of those division offices and states in the administration of congressional directives.

At the Corps, we spoke with the Chief of the Programs Integration Division, who is responsible for the Civil Works budget, and other officials responsible for identifying earmarks for OMB and congressional directives for the Corps’ routine management process.

To identify the selected agencies’ processes for tracking, implementing, and reporting on congressional directives, we reviewed agency documents related to available data or databases used for tracking and reporting on congressional directives. We also reviewed agency guidance or written protocols to demonstrate actions taken to implement congressional directives. In addition, we also interviewed the relevant agency officials from the units of the selected agencies we previously discussed.

To obtain their views on the trends and impact of congressional directives on agency programs, we spoke with knowledgeable agency officials from the selected agencies using similar questions. Because we assessed agencies’ data on congressional directives to be insufficiently reliable for the purposes of comparing across agencies and showing trends over time, we could not analyze trend data.

Appendix II: GAO Contacts

Agency-Specific Contacts