The Corps’ Civil Works program is responsible for investigating, developing, and maintaining the nation’s water and related environmental resources. In addition, the Civil Works program also provides disaster response as well as engineering and technical services. The Corps’ headquarters is located in Washington, D.C., with eight regional divisions, and 38 districts that carry out its domestic civil works responsibilities. Each year, the Corps’ Civil Works program receives funding through the Energy and Water Development Appropriations Act. The act normally specifies a total sum for several different appropriation accounts, including investigations, construction, and operation and maintenance, to fund projects related to the nation’s water resources. The funds appropriated to the Corps are “no year” funds, which means that they remain available to the Corps until spent. Table 1 shows the appropriations received in fiscal years 2003 and 2004 for the investigations, construction, and operation and maintenance accounts. The conference report accompanying the Energy and Water Development Appropriations Act specifically lists individual investigations, construction, and operation and maintenance projects and the amount of funds designated for each project. In effect, this provides the Corps with its priorities for accomplishing its water resource projects. In recent years, the Congress has appropriated fewer funds than the sum of the amount designated to individual projects in the conference report. The difference between the total amount designated for projects in the conference report and the full appropriation is known as savings and slippage. As directed by the Congress, the Corps reduces the conference report amount for each project by a percentage to allow for savings and slippage and then releases the entire amount of each projects’ funding to the districts’ project managers for executing projects. However, once the Corps has allotted the funds to specific projects, the Corps may reprogram the funds to other projects. Reprogramming is the shifting of funds from one project or program to another within an appropriation or fund account for purposes other than those contemplated at the time of appropriation. A reprogramming transaction changes the amount of funds provided to at least two projects– the donor project and the recipient project. However, more than two projects are often involved in a single reprogramming action. For example, in an effort to make effective use of available funding, the Corps may move funds from a construction project that has slipped due to inclement weather and reprogram the funds to one or more construction projects that are ahead of schedule or experiencing cost overruns. The authority to reprogram funds is implicit in an agency’s responsibility to manage its funds; no specific additional statutory authority is necessary. While there are no governmentwide reprogramming guidelines, the Congress exercises control over an agency’s spending flexibility by providing guidelines or nonstatutory instructions on reprogramming in a variety of ways. For example, some reprogramming and reporting guidelines have evolved from informal agreements between various agencies and their congressional oversight committees. Reprogramming guidelines frequently involve some form of notification to the House and Senate appropriations committees prior to the action. (In this report, notification to the House and Senate appropriations committees will be referred to as congressional notification or notifying the Congress.) In addition to notification, reprogramming arrangements sometimes also provide for committee approval prior to the movement of funds that exceed certain thresholds. The Corps’ reprogramming guidelines have evolved over nearly 50 years, stemming from direction provided to the Corps through congressional reports and informal agreements with the House and Senate Appropriations Committees. In 1995, the Corps published revised internal reprogramming guidance based upon previous congressional direction (U.S. Army Corps of Engineers, Engineering Regulation ER 11-2-201). These reprogramming guidelines set forth procedures and polices on reprogramming actions for civil works activities under investigations, construction, and operation and maintenance appropriations titles, among others. Under the 1995 guidance, the Corps was permitted to reprogram construction funds up to 15 percent of the base amount of a project for any fiscal year. The base amount is the amount listed in the conference report plus any funds carried in from previous fiscal years and adjusted for funds sequestered, deferred, rescinded, or released from deferral. Any reprogramming action(s) that exceeded the 15 percent threshold required the Corps to coordinate its intentions with both the House and Senate Appropriations Committees. There were two exceptions to the 15 percent limitation. The Corps may reprogram up to $300,000, without regard to percentage, for projects on which the amount available for the fiscal year is $2 million or less, and the Corps may move up to $5 million per construction project without regard to the percentage limitation when the increased requirement results from a settled contractor claim, increased contractor earnings due to accelerated rate of operations, or real estate deficiency judgments. For investigations projects, the Corps was permitted to reprogram up to $25,000 for projects that have a base amount of $25,000 or less. When the base amount exceeded $25,000, the reprogramming authority was 100 percent of the base up to $50,000 and 25 percent of the increment over $50,000, not to exceed a total reprogramming of $150,000. Any reprogramming action(s) that exceeded these thresholds required the Corps to coordinate with the Congress its intention to reprogram funds. The 1995 guidance does not outline specific thresholds for congressional notification in the operation and maintenance appropriation. According to Corps officials, the agency interpreted the guidance as allowing unlimited reprogramming authority without congressional notification thresholds for operation and maintenance projects. During the spring of 2004, the Corps received new reprogramming direction from both the House and Senate Appropriations Committees. On May 27, 2004, the Corps issued an internal memorandum changing the Corps’ existing reprogramming guidance to reflect direction that was subsequently provided in the House of Representatives Committee on Appropriations Report accompanying the 2005 Energy and Water Development Appropriation Bill (House Report 108-554 accompanying H.R. 4614). The new guidance required the Corps to notify the Congress for any intended single reprogramming action on construction and operation and maintenance projects that exceeded $300,000 plus 20 percent of the base amount and to obtain approval on any project’s cumulative reprogramming actions that exceeded $4 million. The base amount under House Report 108-554 was defined as the amount appropriated for the project or program in the budget plus any amounts carried over from previous fiscal years or reprogrammed during the budget year. For investigations, the Corps was the required to notify the Congress for any intended single reprogramming action that exceeded $50,000 plus 25 percent of the base and to obtain approval on a project’s cumulative reprogramming actions that exceeded $250,000. The Corps followed this guidance until the end of November 2004. At that time, the Corps again received new direction from the Congress, contained in the conference report accompanying the 2005 Energy and Water Development Appropriation Act. These guidelines provided cumulative reprogramming percentage thresholds for investigations, construction, and operation and maintenance accounts. The guidelines further required the Corps to provide quarterly reports notifying the Congress of reprogramming actions that fell between certain thresholds and required congressional approval for reprogramming actions that exceeded an upper threshold limit. The guidelines also allowed certain categories of reprogramming actions to be excluded from counting toward congressional notification thresholds. Appendix II shows the 1995 and 2004 Corps reprogramming guidance. In fiscal years 2003 and 2004, the Corps reprogrammed funds over 7,000 times (3,415 actions in fiscal year 2003 and 3,641 actions in fiscal year 2004) among investigations and construction projects. Sixty-three percent (988 of 1,578) of fiscal year 2003 and 64 percent (998 of 1,533) of fiscal year 2004 investigations and construction projects had funds either moved in and/or out. On average, of the projects that had at least one reprogramming, there were approximately 3.6 (3.5 in fiscal year 2003 and 3.6 in fiscal year 2004) actions per project. Corps-wide reprogramming data on operation and maintenance projects are not available. In terms of dollars, in fiscal years 2003 and 2004, the Corps reprogrammed approximately $2.1 billion of the $3.7 billion available for investigations and construction project funds. Additionally, the average amount of funds moved per reprogramming action was approximately $298,026 ($306,133 in fiscal year 2003 and $290,423 in fiscal year 2004) for investigations and construction projects. Because the Corps could not provide us with Corps-wide reprogramming data for operations and maintenance projects, we reviewed the 107 operations and maintenance projects in our sample and found that the Corps reprogrammed funds 459 times for this sample, which averaged to 4.29 reprogramming actions per project. These 459 reprogramming actions totaled approximately $31 million, and the average amount of funds moved per operation and maintenance reprogramming action was $67,592. For the majority of the reprogrammings that we reviewed as part of our sample of 271 projects, the Corps followed the reprogramming guidance it had in place at the time (under both the Corps’ 1995 guidance and the May 2004 guidance). In the few instances where the guidance was not followed, most involved the Corps failing to notify the Congress when it intended to reprogram funds that would exceed certain limits. The Corps’ reprogramming guidance allowed most reprogrammings to be categorized as fund movements that did not count toward the congressional notification thresholds. As a result, the Corps was able to follow its reprogramming guidance, but still conduct a large number of fund movements (that represented a major deviation from the funding direction the Congress provided for the projects in its conference report) and not have to inform the Congress of the changes and the reason for the changes. In our sample of 271 projects, reprogramming actions related to only 8 projects did not follow the reprogramming guidance in place at the time when the funds were moved. For these 8 projects, there were a total of 12 movements of funds that did not conform to the reprogramming guidance.