Government Management Reform Act of 1994
PL 103-356 (S.2170), enacted 10/13/1994

108 STAT. 3410 
PUBLIC LAW 103-356—OCT. 13, 1994 
Oct. 13, 1994 
[S. 2170] 
Government 
Management 
Reform Act of 
1994. 
31 u s e 3301 
note. 
Public Law 103-356 
103d Congress 
An Act 
To provide a more effective, efficient, and responsive Grovernment. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the "Grovernment 
Management Reform Act of 1994". 
(b) TABLE OF CONTENTS.—The table of contents for this Act 
is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—LIMITATION ON PAY 
Sec. 101. Limitation on certain annual pay adjustments. 
TITLE II—HUMAN RESOURCE MANAGEMENT 
Sec. 201. SES annual leave accumulation. 
TITLE III—STREAMLINING MANAGEMENT CONTROL 
Sec. 301. Authority to increase efficiency in reporting to Congress. 
TITLE IV—FINANCIAL MANAGEMENT 
Sec. 401. Short title. 
Sec. 402. Electronic pa3Tnents. 
Sec. 403. Franchise fund pilot programs. 
Sec. 404. Simplification of management reporting process. 
Sec. 405. Annual financial reports. 
TITLE I—LIMITATION ON PAY 
SEC. 101. LIMITATION ON CERTAIN ANNUAL PAY ADJUSTMENTS. 
Effective date. 
Effective as of December 31, 1994— 
(1) section 601(a)(2) of the Legislative Reorganization Act 
of 1946 (2 U.S.C. 31(2)) is amended— 
(A) by striking out "(2) Effective" and inserting in 
lieu thereof "(2)(A) Subject to subparagraph (B), effective"; 
and 
(B) by adding at the end thereof the following: 
"(B) In no event shall the percentage adjustment taking effect 
under subparagraph (A) in any calendar year (before rounding), 
in any rate of pay, exceed the percentage adjustment taking effect 
in such calendar year under section 5303 of title 5, United States 
Code, in the rates of pay under the General Schedule."; 
(2) section 104 of title 3, United States Code, is amended— 
(A) in the first sentence by inserting "(a)" before "The"; 
PUBLIC LAW 103-356—OCT. 13, 1994 
108 STAT. 3411 
(B) in the second sentence by striking out "Effective" 
and inserting in lieu thereof "Subject to subsection (b), 
effective"; and 
(C) by adding at the end thereof the following: 
"(b) In no event shall the percentage adjustment taking effect 
under the second gind third sentences of subsection (a) in any 
calendar year (before rounding) exceed the percentage adjustment 
taking effect in such calendar year under section 5303 of title 
5 in the rates of pay under the General Schedule."; 
(3) section 5318 of title 5, United States Code, is amended— 
(A) in the first sentence by striking out "Effective" 
and inserting in lieu thereof "(a) Subject to subsection 
(b), effective"; and 
(B) by adding at the end thereof the following: 
"(b) In no event shall the percentage adjustment taking effect 
under subsection (a) in any calendar year (before rounding), in 
any rate of pay, exceed the percentage adjustment taking effect 
in such calendar year under section 5303 in the rates of pay 
under the General Schedule."; and 
(4) section 461(a) of title 28, United States Code, is 
amended— 
(A) by striking out "(a) Effective" and inserting in 
lieu thereof "(a)(1) Subject to paragraph (2), effective"; and 
(B) by adding at the end thereof the following: 
"(2) In no event shall the percentage adjustment taking effect 
under paragraph (1) in any calendar year (before rounding), in 
any salary rate, exceed the percentage adjustment taking effect 
in such calendar year under section 5303 of title 5 in the rates 
of pay under the General Schedule.". 
TITLE II—HUMAN RESOURCE 
MANAGEMENT 
SEC. 201. SES ANNUAL LEAVE ACCUMULATION. 
(a) IN GENERAL.—Effective on the first day of the 
first 
Effective date, 
applicable pay period beginning sifter the date of the enactment 
of this Act, subsection (f) of section 6304 of title 5, United States 
Code, is amended to read as follows: 
"(f)(1) This subsection applies with respect to annual leave 
accrued by an individual while serving in a position in— 
"(A) the Senior Executive Service; 
"(B) the Senior Foreign Service; 
"(C) the Defense Intelligence Senior Executive Service; 
"(D) the Senior Cryptologic Executive Service; or 
"(E) the Federal Bureau of Investigation and Drug Enforce-
ment Administration Senior Executive Service. 
"(2) For purposes of applying any limitation on accumulation 
under this section with respect to any annual leave described in 
paragraph (1)— 
"(A) '30 days' in subsection (a) shall be deemed to read 
'90 days'; and 
"(B) '45 days' in subsection (b) shall be deemed to read 
'90 days'.". 
(b) USE OF EXCESS LEAVE.—Notwithstanding the amendment 5 use 6304 note. 
made by subsection (a), in the case of an employee who, on the 
effective date of subsection (a), is subject to subsection (0 of section 
108 STAT. 3412 
PUBLIC LAW 103-356—OCT. 13, 1994 
6304 of title 5, United States Code, and who has to such employee's 
credit annual leave in excess of the maximum accumulation other-
wise permitted by subsection (a) or (b) of section 6304 (determined 
applying the amendment made by subsection (a)), such excess 
annual leave shall remain to the credit of the employee and be 
subject to reduction, in the same manner as providea in subsection 
(c) of section 6304. 
TITLE III—STREAMLINING 
MANAGEMENT CONTROL 
31 use 1113 
SEC. 301. AUTHORITY TO INCREASE EFFICIENCY IN REPORTING TO 
note. 
CONGRESS. 
(a) PURPOSE.—^The purpose of this title is to improve the effi-
ciency of executive branch performance in implementing statutory 
requirements for reports to Congress and committees of Congress 
such as the elimination or consolidation of duplicative or obsolete 
reporting requirements and adjustments to deadlines that shall 
provide for more efficient workload distribution or improve the 
quality of reports. 
(b) AUTHORITY OF THE DIRECTOR.—The Director of the Office 
of Management and Budget may publish annually in the budget 
submitted by the President to the Congress, recommendations for 
consolidation, elimination, or adjustments in frequency and due 
dates of statutorily required periodic reports to the Congress or 
committees of Congress. For each recommendation, the Director 
shall provide an individualized statement of the reasons that sup-
port the recommendation. In addition, for each report for which 
a recommendation is made, the Director shall state with specificity 
the exact consolidation, elimination, or adjustment in frequency 
or due date that is recommended. 
(c) RECOMMENDATIONS.—The Director's recommendations shall 
be consistent with the purpose stated in subsection (a). 
(d) CONSULTATION.—Before the publication of the recommenda-
tions under subsection (b), the Director or his designee shall consult 
with the appropriate congressional committees concerning the rec-
ommendations. 
FfnJndai 
TITLE IV—FINANCIAL MANAGEMENT 
Management 
ffuSC 3301 
^^^' ^^^' ^^^^'^ TITLE. 
note. 
This title may be cited as the "Federal Financial Management 
Act of 1994". 
SEC. 402. ELECTRONIC PAYMENTS. 
(a) IN GENERAL.—Section 3332 of title 31, United States Code, 
is amended to read as follows: 
*
*
§ 3332. Required direct deposit 
"(a)(1) Notwithstanding any other provision of law, all Federal 
wage, salary, and retirement payments shall be paid to recipients 
of such payments by electronic funds transfer, unless another 
method has been determined by the Secretary of the Treasury 
to be appropriate. 
PUBLIC LAW 103-356—OCT. 13, 1994 
108 STAT. 3413 
"(2) Each recipient of Federal wage, salary, or retirement pay-
ments shall designate one or more financial institutions or other 
authorized payment agents and provide the payment certifying 
or authorizing agency information necessary for the recipient to 
receive electronic funds transfer payments through each institution 
so designated. 
"(b)(1) The head of each agency shall waive the requirements 
of subsection (a) of this section for a recipient of Federal wage, 
salary, or retirement payments authorized or certified by the agency 
upon written request by such recipient. 
"(2) Federal wage, salary, or retirement payments shall be 
paid to any recipient granted a waiver under paragraph (1) of 
this subsection by any method determined appropriate by the Sec-
retary of the Treasury. 
"(c)(1) The Secretary' of the Treasury may waive the require-
ments of subsection (a) of this section for any group of recipients 
upon request by the head of an agency under standards prescribed 
by the Secretary of the Treasury. 
"(2) Federal wage, salary, or retirement payments shall be 
paid to any member of a group granted a waiver under paragraph 
(1) of this subsection by any method determined appropriate by 
the Secretary of the Treasury. 
"(d) This section shall apply only to recipients of Federal wage 
or salary payments who begin to receive such payments on or 
after January 1, 1995, and recipients of Federal retirement pay-
ments who begin to receive such payments on or after January 
1, 1995. 
"(e) The crediting of the amount of a pa5anent to the appropriate 
account on the books of a financial institution or other authorized 
payment agent designated by a pajonent recipient under this section 
shall constitute a full acquittance to the United States for the 
amount of the payment.". 
(b) TECHNICAL AND CONFORMING AMENDMENT.—The table of 
sections for chapter 33 of title 31, United States Code, is amended 
by amending the item for section 3332 to read: 
"3332. Required direct deposit.". 
SEC. 403. FRANCHISE FUND PILOT PROGRAMS. 
31 USC 501 note. 
(a) ESTABLISHMENT.—There is authorized to be established on 
a pilot program basis in each of six executive agencies a franchise 
fund. The Director of the Office of Management and Budget, after 
consultation with the chairman and ranking members of the 
Committees on Appropriations and Governmental Affairs of the 
Senate, and the Committees on Appropriations and Government 
Operations of the House of Representatives, shall designate the 
agencies. 
(b) USES.—Each such fund may provide, consistent with guide-
lines established by the Director of the Office of Management and 
Budget, such common administrative support services to the agency 
and to other agencies as the head of such agency, with the concur-
rence of the Director, determines can be provided more efficiently 
through such a fund than by other means. To provide such services, 
each such fund is authorized to acquire the capital equipment, 
automated data processing systems, and financial management and 
management information systems needed. Services shall be pro-
vided by such funds on a competitive basis. 
108 STAT. 3414 
PUBLIC LAW 103-356—OCT. 13, 1994 
Appropriations 
(c) FUNDING.—(1) There are authorized to be appropriated to 
authorization. 
^j^g franchise fund of each agency designated under subsection 
(a) such funds as are necessary to carry out the purposes of the 
fund, to remain available until expended. To the extent that unex-
pended balances remain available in other accounts for the purposes 
to be carried out by the fund, the head of the agency may transfer 
such balances to the fund. 
(2) Fees for services shall be established by the head of the 
agency at a level to cover the total estimated costs of providing 
such services. Such fees shall be deposited in the agencys fund 
to remain available until expended, and may be used to carry 
out the purposes of the fund. 
(3) Existing inventories, including inventories on order, equip-
ment, and other assets or liabilities pertaining to the purposes 
of the fund may be transferred to the fund. 
(d) REPORT ON PILOT PROGRAMS.—Within 6 months after the 
end of fiscal year 1997, the Director of the Office of Management 
and Budget shall forward a report on the results of the pilot 
programs to the Committees on Appropriations of the Senate and 
of the House of Representatives, and to the Committee on Govern-
mental Affairs of the Senate and the Committee on Government 
Operations of the House of Representatives. The report shall contain 
the financial and program performance results of the pilot programs, 
including recommendations for— 
(1) the structure of the fund; 
(2) the composition of the funding mechanism; 
(3) the capacity of the fund to promote competition; and 
(4) the desirability of extending the application and 
implementation of franchise funds to other Federal agencies. 
(e) PROCUREMENT.—^Nothing in this section shall be construed 
as relieving any agency of any duty under applicable procurement 
laws. 
(0 TERMINATION.—^The provisions of this section shall expire 
on October 1,1999. 
31 use 501 note. 
SEC. 404. SIMPLIFICATION OF MANAGEMENT REPORTING PROCESS. 
(a) IN GENERAL.—^To improve the efficiency of executive branch 
performance in implementing statutory requirements for financial 
management reporting to the Congress and its committees, the 
Director of the Office of Management and Budget may adjust the 
frequency and due dates of or consolidate any statutorily required 
reports of agencies to the Office of Management and Budget or 
the President and of agencies or the Office of Management and 
Budget to the Congress under any laws for which the Office of 
Management and Budget has financial management responsibility, 
including— 
(1) chapters 5, 9, 11, 33, 35, 37, 39, 75, and 91 of title 
31, United States Code; 
(2) the Federal Civil Penalties Inflation Adjustment Act 
of 1990 (28 U.S.C. 2461 note; Public Law 101-410; 104 Stat. 
890). 
(b) APPLICATION.—^The authority provided in subsection (a) shall 
apply only to reports of agencies to the Office of Management 
and Budget or the President and of agencies or the Office of Manage-
ment and Budget to the Congress required by statute to be submit-
ted between January 1,1995, Euid September 30, 1997. 
PUBLIC LAW 103-356—OCT. 13, 1994 
108 STAT. 3415 
(c) ADJUSTMENTS IN REPORTING.—^The Director may consolidate 
or adjust the frequency and due dates of any statutorily required 
reports under subsections (a) and (b) only after— 
(1) consultation with the Chairman of the Senate Commit-
tee on Governmental Affairs and the Chairman of the House 
of Representatives Committee on Government Operations; and 
(2) written notification to the Congress, no later than Feb-
ruary 8 of each fiscal year covered under subsection (b) for 
those reports required to be submitted during that fiscal year. 
SEC. 405. ANNUAL FINANCIAL REPORTS. 
(a) FINANCIAL STATEMENTS.—Section 3515 of title 31, United 
States Code, is amended to read as follows: 
*'§ 3515. Financial statements of agencies 
"(a) Not later than March 1 of 1997 and each year thereafter, 
the head of each executive agency identified in section 901(b) of 
this title shall prepare and submit to the Director of the Office 
of Management and Budget an audited financial statement for 
the preceding fiscal year, covering all accounts and associated activi-
ties of each office, bureau, and activity of the agency. 
"(b) Each audited financial statement of an executive agency 
under this section shall reflect— 
"(1) the overall financial position of the offices, bureaus, 
and activities covered by the statement, including assets and 
liabilities thereof; and 
^ 
"(2) results of operations of those offices, bureaus, and 
activities. 
"(c) The Director of the Office of Management and Budget 
shall identify components of executive agencies that shall be 
required to have audited financial statements meeting the require-
ments of subsection (b). 
"(d) The Director of the Office of Management and Budget 
shall prescribe the form and content of the financial statements 
of executive agencies under this section, consistent with applicable 
accounting and financial reporting principles, standards, and 
requirements. 
"(e) The Director of the Office of Management and Budget 
may waive the application of all or part of subsection (a) for financial 
statements required for fiscal years 1996 and 1997. 
"(f) Not later than March 1 of 1995 and 1996, the head of 
each executive agency identified in section 901(b) of this title and 
designated by the Director of the Office of Management and Budget 
shall prepare and submit to the Director of the Office of Manage-
ment and Budget an audited financial statement for the preceding 
fiscal year, covering all accounts and associated activities of each 
office, bureau, and activity of the agency. 
"(g) Not later than March 31 of 1995 and 1996, for executive 
agencies not designated by the Director of the Office of Management 
and Budget under subsection (f), the head of each executive agency 
identified in section 901(b) of this title shall prepare and submit 
to the Director of the Office of Management and Budget a financial 
statement for the preceding fiscal year, covering— 
"(1) each revolving fund and trust fund of the agency; 
and 
108 STAT. 3416 
PUBLIC LAW 103-356—OCT. 13, 1994 
"(2) to the extent practicable, the accounts of each office, 
bureau, and activity of the agency which performed substantial 
commercial functions during the preceding fiscal year. 
"(h) For purposes of subsection (g), the term 'commercial func-
tions' includes buying and leasing of real estate, providing insur-
ance, making loans and loan guarantees, and other credit programs 
and any activity involving the provision of a service or thing for 
which a fee, royalty, rent, or other charge is imposed by an agency 
for services and things of value it provides.". 
(b) AUDITS BY AGENCIES.—Subsection 3521(f) of title 31, United 
States Code, is amended to read as follows: 
"(f)(1) For each audited financial statement required under 
subsections (a) and (f) of section 3515 of this title, the person 
who audits the statement for purpose of subsection (e) of this 
section shall submit a report on the audit to the head of the 
agency. A report under this subsection shall be prepared in accord-
ance with generally accepted government auditing standards. 
"(2) Not later than June 30 following the fiscal year for which 
a financial statement is submitted under subsection (g) of section 
3515 of this title, the person who audits the statement for purpose 
of subsection (e) of this section shall submit a report on the audit 
to the head of the agency. A report under this subsection shall 
be prepared in accordance with generally accepted government 
auditing standards.". 
(c) GOVERNMENTWIDE FINANCIAL STATEMENT.—Section 3 3 1 of 
title 31, United States Code, is amended by adding the following 
new subsection: 
"(e)(1) Not later than March 31 of 1998 and each year there-
after, the Secretary of the Treasury, in coordination with the Direc-
tor of the Office of Management and Budget, shall annually prepare 
and submit to the President and the Congress an audited financial 
statement for the preceding fiscal year, covering all accounts and 
associated activities of the executive branch of the United States 
Government. The financial statement shall reflect the overall finan-
cial position, including assets and liabilities, and results of oper-
ations of the executive branch of the United States Government, 
and shall be prepared in accordance with the form and content 
requirements set forth by the Director of the Office of Management 
and Budget. 
PUBLIC LAW 103-356—OCT. 13, 1994 
108 STAT. 3417 
"(2) The Comptroller General of the United States shall audit 
the financial statement required by this section.". 
Approved October 13, 1994. 
LEGISLATIVE HISTORY—S. 2170: 
SENATE REPORTS: No. 103-281 (Comm. on Governmental Affairs). 
CONGRESSIONAL RECORD, Vol. 140 (1994): 
Sept. 28, considered and passed Senate. 
Oct. 3, 4, considered and passed House. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 30 (1994): 
Oct. 13, Presidential statement.