Fiscal Year 2019 Antideficiency Act Reports Compilation

B-331343

April 27, 2020

The Honorable Michael R. Pence
President of the Senate

The Honorable Nancy Pelosi
Speaker of the House of Representatives

Subject:  Fiscal Year 2019 Antideficiency Act Reports Compilation

Agencies that violate the Antideficiency Act must report the violation to the President and Congress and transmit a copy of the report to the Comptroller General at the same time.  31 U.S.C. §§ 1351, 1517(b).  The report must contain all relevant facts and a statement of actions taken. 

Since fiscal year 2005, GAO, in its role as repository for the Antideficiency Act reports that agencies submit, has produced and publicly released an annual compilation of summaries of the reports.  We base the summaries on unaudited information extracted from the agency reports.  Each summary includes a brief description of the violation and of remedial actions agencies report that they have taken.  We also include copies of the agencies’ transmittal letters.  We post the summaries and the agency transmittal letters on our public web site.  In some cases, the agencies also sent us additional materials to accompany their transmittal letters.  We will make these additional materials available to Members and their staffs upon request.

Please find enclosed the compilation of summaries of the nine Antideficiency Act violation reports and agency transmittal letters submitted to GAO in fiscal year 2019.  GAO has not opined on the violations reported or the remedial actions taken.

If you have any questions, please do not hesitate to contact Shirley A. Jones, Managing Associate General Counsel, at (202) 512-8156, or Omari Norman, Assistant General Counsel for Appropriations Law, at (202) 512-8272.

Thomas H. Armstrong
General Counsel

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-01

Agency No.:  Navy, 16-01	Date Reported to GAO: October 4, 2018
Agency: Department of the Navy (Navy)	Date(s) of Violation(s): Fiscal Year 2006
Account(s): Procurement, Marine Corps	Amount Reported: $339,692

Description:  TheNavy, through the Department of Defense, reported that it violated the Antideficiency Act (ADA) when it obligated the incorrect appropriation to partially pay for the construction of a new facility at Marine Corps Base Camp Pendleton. 

The construction project was initially characterized as a temporary, relocatable training facility, which would have required that the building be readily movable, erected, disassembled, stored, and reusable.  However, the second floor of the facility was constructed using concrete, making it non‑relocatable.  Accordingly, the Navy reported that the project should have been characterized as a minor military construction project and exclusively paid for using Operation and Maintenance, Marine Corps appropriation.  Instead, the Marine Corps Systems Command improperly used both Procurement, Marine Corps and Operation and Maintenance, Marine Corps appropriation to pay for the construction of this facility. 

Remedial Action Taken:  To prevent a recurrence of this type of violation, the Navy reported that the Marine Corps Systems Command issued “Construction Acquisition Guidelines” on January 27, 2016, which established procedures and internal controls to govern future construction and construction related efforts.  The Navy identified the Assistant Program Manager and the lead Contracting Officer as being responsible for the ADA violation.  The Contracting Officer received a formal letter of reprimand.  The Assistant Program Manager was no longer a U.S. government employee when the violation was identified and so discipline was not pursued.  The Navy determined that the ADA violations were not willfully or knowingly committed. 

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-02

Agency No.: None Reported	Date Reported to GAO: October 29,  2018
Agency: Department of the Treasury (Treasury)	Date(s) of Violation(s): Fiscal Year (FY) 2015
Account(s): Salaries and Expenses, Departmental Offices	Amount Reported: $35,996,536

Description:  Treasury reported two separate violations of the Antideficiency Act (ADA) when it expended an amount more than was available in the Salaries and Expenses, Departmental Offices account. 

The first violation occurred in July 2015 in the amount of $9,906,155.  The second violation occurred in August 2015 in the amount of $26,090,381.  Treasury stated that these two violations occurred due to delays in collecting payments from other federal entities under reimbursable agreements, and that the following circumstances contributed to the violations: (1) its fund control systems did not verify fund balances before an expenditure liquidating a valid obligation was approved; (2) its longstanding systems and practices did not include real-time monitoring of fund balances; and (3) in FY 2015, Congress enacted a new Salaries and Expenses, Office of Terrorism and Financial Intelligence account, which had previously been part of the Salaries and Expenses, Departmental Offices account, and the creation of the new account reduced the cash balance in the latter account during that fiscal year. 

Remedial Action Taken:  To prevent a recurrence of these types of violations, Treasury reported that it developed standardized processes and procedures, implemented signature workflows, and created a centralized filing system.  Treasury reported that it also automated the generation of agreements and documents to enhance standardization and effectiveness of internal controls.  Lastly, Treasury reported that dedicated personnel now monitor inter‑governmental invoices to ensure timely posting of collections, and monitor the fund balance with Treasury to ensure the account carries a positive cash balance at the end of each month.  Treasury did not report whether any disciplinary action was taken against any employees, but did report that it determined that the ADA violations were not willfully or knowingly committed.

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-03

Agency No.: None Reported	Date Reported to GAO: November 8, 2018
Agency: Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects (OFC)	Date(s) of Violation(s): Fiscal Year (FY) 2015
Account(s): Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects	Amount Reported: $210,000

Description:  On November 8, 2018, the Office of Management and Budget (OMB) transmitted a letter from OFC dated March 6, 2015, reporting a violation of the Antideficiency Act (ADA) when OFC obligated funds in advance of an apportionment.

OFC reported that it obligated $210,000 in FY 2015 without an apportionment.  OFC reported that it relied on the General Services Administration (GSA) to perform its accounting.  GSA erroneously informed OFC that upon enactment of the FY 2015 Continuing Resolution (Public Law 113-164, as amended), it had been automatically apportioned funds under OMB Bulletin No. 14-03.  Only after obligation, GSA notified OFC that the automatic apportionment provided by OMB under the FY 2015 Continuing Resolution did not apply to an account if either the House or Senate had reported or passed a bill that provided no funding for that account at the time the Continuing Resolution was enacted or extended.  The House of Representatives had passed a 2015 Energy and Water Appropriations bill on July 10, 2014 that did not include any funding for OFC.  GSA notified OFC of GSA’s error on January 23, 2015. 

Remedial Action Taken:  OMB reported that OFC de-obligated funds to the maximum extent possible after it was notified of the error, and moved $83,000 of the obligations that were improperly recorded to other accounts that OFC said were available for the same purposes.  OMB apportioned the remaining $127,000 balance and obtained a warrant from the Department of Treasury to cover these obligations.  OFC determined that the ADA violations were not willfully or knowingly committed. 

Note: In its March 6, 2015 letter, OFC noted that it would be “shut down” as of March 7, 2015. 

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-04

Agency No.:DLA, 17-01	Date Reported to GAO: November 26, 2018
Agency: Defense Logistics Agency (DLA)	Date(s) of Violation(s): Fiscal Years (FYs) 2015-2017
Account(s): Operation and Maintenance, Navy	Amount Reported: $229,444

Description:  DLA, through the Department of Defense (DOD), reported violations of the Antideficiency Act (ADA) that occurred when it purchased boots under a contract that did not comply with the Berry Amendment, 10 U.S.C. §§ 2533a.  The Berry Amendment prohibits the procurement of certain items if they are not grown, reprocessed, reused, or produced in the United States. 

DLA awarded a multiyear contract in FY 2015 to procure boots for the Navy.  A DOD Inspector General report determined that the contract did not comply with the Berry Amendment because components of the boots being purchased were not produced in the United States, and no valid exceptions to the Berry Amendment applied. 

Remedial Action Taken: To prevent a recurrence of this type of violation, DLA reported that it performs reviews of contracts awarded by DLA Land & Maritime detachments at each of the shipyards every two years.  Additionally, DLA reported that all DLA acquisition personnel are required to complete Buy American Statute and Berry Amendment courses offered by the Defense Acquisition University.  The DLA headquarters management review team also visits all major subordinate commands to perform reviews to validate ongoing self-assessments reported by the major subordinate commands to detect Berry Amendment non-compliance issues.  DLA identified one Contracting Officer as being responsible for the ADA violations.  The individual left DLA and joined the U.S. Army Corps of Engineers (USACE) prior to completion of the ADA investigation.  A copy of the ADA report was submitted to USACE for consideration.  USACE determined that Berry Amendment training for the contracting officer was sufficient and no additional disciplinary action was taken.  DLA determined that the ADA violations were not willfully or knowingly committed. 

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-05

Agency No.: None Reported	Date Reported to GAO: December 13, 2018
Agency: Department of Justice (Justice)	Date(s) of Violation(s): Fiscal Years (FYs) 2005-2016
Account(s): Salaries and Expenses, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)	Amount Reported: Justice was Unable to  Calculate the Amount

Description:  Justice reported that it violated the Antideficiency Act (ADA) when it improperly used funds to open and close foreign ATF offices without providing advance notice to Congress, as required by its annual appropriations acts.

Justice’s annual appropriations acts prohibit it from spending funds to relocate or close an office, including those offices located in foreign countries, until it provides 45-days advance notice to the House and Senate Committees on Appropriations.  Justice reported that it opened six, and closed two, foreign offices between FY 2005 through FY 2016 without first notifying Congress.  Justice was not able to calculate the costs of the ADA violations that were associated with opening and closing the foreign offices for various reasons.  For example, many of the expenses involved, such as salaries and foreign duty pay differentials, would have been incurred regardless of whether Justice had a temporary presence in the foreign location or a permanent office. 

Remedial Action Taken:  To prevent a recurrence of this type of violation, Justice reported that ATF published and circulated a standard operating procedure (SOP) for notifying Congress on office relocations.  The SOP also provides staff with guidance for how to obtain internal authorizations and notification templates.  Additionally, Justice reported that it has revised its internal policies for obtaining approvals in these types of situations.  Justice identified its Office of Management and its International Affairs Division as being responsible for the ADA violations but noted that the violations spanned over 10 years, and involved a variety of individuals, some of whom likely are no longer still employed at ATF or in the same positions.  Justice determined that the ADA violations were not willfully or knowingly committed, and reported that no disciplinary action was taken against any individuals.

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-06

Agency No.: None reported	Date Reported to GAO: April12, 2019
Agency: Department of Homeland Security (DHS)	Date(s) of Violation(s): Fiscal Year (FY) 2012
Account(s): Analysis and Operations	Amount Reported: $4,811,827

Description:  DHS reported that it violated the Antideficiency Act (ADA) during FY 2012 when its Office of Intelligence and Analysis (I&A) made obligations in excess of its apportionment. 

The ADA violation occurred when I&A used the incorrect apportionment methodology to calculate the amount of its funding while operating under an automatic apportionment of funds appropriated by the Consolidated Appropriations Act, 2012.  This error led to I&A obligating funds in excess of its apportionment on December 30, 2011. 

Remedial Action Taken:  To prevent a recurrence of this type of violation, DHS reported that the Department no longer allows its components to calculate their automatic apportionment amounts.  Rather, the DHS Office of the Chief Financial Officer now provides allocations to component DHS offices.  DHS identified a Supervisory Budget Analyst as being responsible for the violation.  DHS determined that the ADA violations were not willfully or knowingly committed, and reported that no disciplinary action was taken against the employee involved.

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-07

Agency No.: Air Force, 16-02	Date Reported to GAO: April 19, 2019
Agency: Department of the Air Force (Air Force)	Date(s) of Violation(s): Fiscal Year 2010
Account(s): Operation and Maintenance, Air Force	Amount Reported: $2,729,870

Description:  The Air Force, through the Department of Defense, reported that it violated the Antideficiency Act (ADA) when it improperly used Air Force’s Operation and Maintenance (O&M) funds to procure movable containers that were incorporated into a construction project at Vogelweh Air Base in Germany. 

The construction project was for work to convert a building at Vogelweh Air Base into a U.S. Air Force band facility.  The Air Force reported that it initially characterized the removable containers as personal property and used O&M funds to procure them.  However, the removable containers should have been characterized as a part of the overall cost of construction because they were installed as an integral part of the converted building.  The Air Force reported that due to the overall cost of the effort, it should have been categorized as major military construction (MILCON).  Accordingly, all aspects of the construction project, inclusive of the movable containers, should have been paid for exclusively with specific MILCON funds, but there were no MILCON funds available for this purpose. 

Remedial Action Taken: To prevent a recurrence of this type of violation, the Air Force reported that it changed the processes for construction projects to utilize an overlapping team approach.  The Air Force reported that it is also providing fiscal law training to a greater audience than just financial management personnel, with an emphasis on appropriation types and threshold limitations.  The Air Force identified the former 86 Civil Engineer Squadron (CES) Deputy Commander, the former 86 CES Chief of Design, and the former Engineering Flight Chief as being responsible for the ADA violations.  All three individuals received an oral admonishment and counseling from their supervisor.  The Air Force determined that the ADA violations were not willfully or knowingly committed. 

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-08

Agency No.: Navy 17-01	Date Reported to GAO: May 06, 2019
Agency: Department of the Navy (Navy)	Date(s) of Violation(s): Fiscal Years (FYs) 2013-2015
Account(s): Operation and Maintenance, Navy	Amount Reported: $1,070,677

Description: The Navy, through the Department of Defense, reported violations of the Antideficiency Act (ADA) that occurred when the Naval Supply Systems Command (NAVSUP) Fleet Logistics Center awarded a contract that did not comply with the Berry Amendment, 10 U.S.C. §§ 2533a.  The Berry Amendment prohibits the procurement of certain items if they are not grown, reprocessed, reused, or produced in the United States. 

NAVSUP awarded a contract that required the contractor to operate a retail store to sell various supplies, such as clothing, textiles, and hand or measuring tools, to Navy commands and organizations.  A Department of Defense Inspector General investigation determined that a significant number of items purchased by the contractor for resale to customers did not comply with the Berry Amendment.  The contractor acquired the non-compliant items based on the mistaken belief that they were exempt from Berry Amendment requirements. 

Remedial Action Taken:  To prevent a recurrence of this type of violation, the Navy referred the contractor to relevant sections of the contract to ensure the contractor understood Berry Amendment requirements.  The Navy also reported that it updated the contract’s administration plan to require routine Berry Amendment compliance inspections and assessments on a monthly or as-needed basis, or both.  Additionally, the Navy reported that the contractor now requires suppliers to provide evidence of Berry Amendment compliance.  The Navy identified two Contracting Officers and the Deputy Director of the Contracting Department as being responsible for the ADA violations.  The Chief Executive Officer of the Navy Exchange Service Command orally counseled the Deputy Director.  The two Contracting Officers are no longer U.S. government employees and so discipline was not pursued.  The Navy determined that the ADA violations were not willfully or knowingly committed. 

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.

Enclosure

Antideficiency Act Reports – Fiscal Year 2019 GAO No.: GAO-ADA-19-09

Agency No.: None Reported	Date Reported to GAO: July 8, 2019
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Years (FYs) 2013-2015
Account(s): Information Technology Systems	Amount Reported: $8,000,000

Description:  VA reported that its Office of Transition, Employment, and Economic Impact (OTEEI) violated the Antideficiency Act (ADA) when it used funds from its General Operating Expenses account, rather than from its Information Technology (IT) Systems account, to finance the development and maintenance of an IT dashboard. 

VA reported that OTEEI used funds from its General Operating Expenses account because it was not aware that the IT Systems account should have been used for funding IT development costs.  VA reported that the violation was partially cured by later charging and adjusting the appropriate IT Systems accounts after the error was identified by VA’s Office of Inspector General.  However, the correction resulted in violations of certain statutory restrictions and conditions that Congress had placed on VA’s use of the IT Systems Development subaccount in the appropriations acts for FY 2013, FY 2014, and FY 2015.  VA reported the ADA violation because of the violation of these restrictions. 

Remedial Action Taken:To prevent a recurrence of this type of violation, VA reported that VA’s Office of Information and Technology revised its policy guidance both to clarify what constitutes IT and non-IT expenditures and to include definitions in accordance with VA’s appropriations act.  The VA identified its former OTEEI Chief of Transition of the Veterans Benefits Administration as being responsible for the violation.  VA did not report whether any disciplinary action was taken against any employees, but did report that it determined that the ADA violations were not willfully or knowingly committed.

Source:  Unaudited information GAO extracted from agency Antideficiency Act reports.