Fiscal Year 2022 Antideficiency Act Reports Compilation

B-334682

February 8, 2023

The Honorable Kamala Harris
President of the Senate

The Honorable Kevin McCarthy
Speaker of the House of Representatives

Subject: Fiscal Year 2022 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 we extract from the agency reports. Each summary includes a brief description of the violation, as reported by the agency, 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 website. In some cases, the agencies also send us additional materials with their transmittal letters. We make these additional materials available to Members and their staffs upon request.

Please find enclosed the compilation of summaries of the ten Antideficiency Act violation reports and agency transmittal letters submitted to GAO in fiscal year 2022. The Department of Veterans Affairs submitted six reports, while the Department of Housing and Urban Development, the Department of Defense, the Department of the Treasury, and the Chemical Safety and Hazard Investigation Board each submitted one report.

While GAO has not opined on the agency reports or the remedial actions taken, we do note that many of the reported violations resulted from similar agency actions. For example, six of the reported violations resulted from government officials or employees obligating or expending funds in violation of statutory spending restrictions.

If you have any questions, please contact Shirley A. Jones, Managing Associate General Counsel, at (202) 512-8156, or Charlie McKiver, Assistant General Counsel for Appropriations Law, at (202) 512-5992.

Edda Emmanuelli Perez
General Counsel

Enclosure

Enclosure

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-01

Agency No.: None Reported	Date Reported to GAO: October 1, 2021
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2000
Account(s): General Operating Expenses, Veterans Benefits Administration	Amount Reported: None Reported

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), on March 31, 2000, when it entered into an Insurance Service Agreement (ISA) for FYs 2000 through 2020 that included an open-ended, uncapped indemnification clause.

According to VA, the ISA included provisions that would authorize the disclosure of confidential information requested by VA and would require VA to indemnify a third party for any damages associated with these disclosures. VA reported that these violations were discovered in August 2020, when VA’s Office of General Counsel (VA OGC) reviewed the agreement and opined that the open-ended indemnification clause violated the ADA, regardless of whether the clause was exercised. The current Director of Insurance terminated the agreement on September 11, 2020.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA is sending all relevant agreements to VA OGC for legal sufficiency. Additionally, VA reported that it is working with the Office of Management and Budget to update and get approval of its administrative funds control policy. According to VA, the former Director of Insurance was responsible for the violation, and there was no willful or knowing intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-02

Agency No.: Army 19-02	Date Reported to GAO: February 2, 2022
Agency: Department of the Army (Army)	Date(s) of Violation(s): Fiscal Years (FYs) 2015‒2019
Account(s): Research, Development, Test and Evaluation (RDT&E)	Amount Reported: $3,441,220

 

Description: Army, through the Department of Defense (DOD), reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated and expended funds in its RDT&E account to pay for education expenses of Marshallese schoolchildren attending the U.S. Army Kwajalein Atoll (USAKA) Garrison School, where neither those funds nor any other DOD funds were available for this purpose.

According to Army, in 1986, USAKA established a scholarship program, known as the Ri’katak Program, which paid the tuition of several Marshallese children to attend the base school in the Republic of the Marshall Islands, with hopes that the Program would foster increased trust between the Army and the local population. According to Army, the USAKA operations, including its base schools, are funded exclusively with RDT&E appropriations. However, according to Army, RDT&E appropriations were not available for the purpose of paying tuition of Marshallese children, and therefore, Army violated the purpose statute, 31 U.S.C. § 1301(a), when it used these appropriations to do so. Moreover, Army reported that because neither RDT&E appropriations nor any other DOD appropriations were available for this purpose, Army also violated the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, Army reported that legislation was included in the FY 2020 National Defense Authorization Act[1], to authorize the Ri’katak Program on a space-available basis. According to Army, four USAKA Garrison commanders were responsible for the violations. However, Army reported that disciplinary action against the commanders was not appropriate because the Program had been in existence for decades and was believed to be legally permissible. Further, Army determined that there was no willful or knowing intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-03

Agency No.: None Reported	Date Reported to GAO: April 15, 2022
Agency: U.S. Chemical Safety and Hazard Investigation Board (CSB)	Date(s) of Violation(s): September 17, 2020
Account(s): Salaries and Expenses	Amount Reported: $4,690.38

 

Description: CSB reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it incurred obligations without providing advance congressional notification in violation of a statutory prohibition.[2]

CSB reported that on September 17, 2020, it issued a task order for $9,690.38 to purchase office furniture for the Chairman’s office. According to CSB, when it issued the task order, it was subject to a statutory provision requiring CSB to notify Congress in advance of obligating in excess of $5,000 to furnish the Chairman’s office.[3] CSB failed to notify Congress in advance of issuing the task order, violating both this provision and the ADA. The violation was discovered on November 29, 2021, when the Office of Inspector General (OIG) for the Environmental Protection Agency, which also serves as the OIG for CSB, informed CSB of an administrative investigation into matters, including this task order.

CSB reported that the violation occurred, in part, because career staff, including the responsible legal, contracting, and finance staff, were unaware of the statutory provision. Additionally, CSB reported that the statutory provision was not included in agency guidance, or agency onboarding and training materials for new political appointees.

Remedial Action Taken: To prevent a recurrence of this type of violation, CSB revised its onboarding documents for new political appointees and issued policy guidance to current Board Members and relevant staff regarding the statutory provision. According to CSB, the employee responsible for the violation was a Contract Specialist, who is no longer with the agency. CSB determined that there was no willful or knowing intent to violate the ADA.

Source: Unaudited information GAO extracted from agency Antideficiency Act reports; Email from Acting General Counsel, CSB, to Staff Attorney, GAO (Dec. 2, 2022).

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-04

Agency No.: None Reported	Date Reported to GAO: May 11, 2022
Agency: Department of the Treasury (Treasury)	Date(s) of Violation(s): Fiscal Years (FYs) 2020, 2021
Account(s): Guam World War II Claims Fund	Amount Reported: $3,478,000; $2,086,472.33; $2,078,541.12

 

Description: Treasury reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1517(a), three times in FYs 2020 and 2021. The first violation occurred when Treasury incurred an obligation in advance of an apportionment, the second violation when it incurred an obligation in excess of an apportionment, and the final violation when it incurred an obligation and made an expenditure in advance of an apportionment.

According to Treasury, it first violated the ADA between March 26, 2020, and May 19, 2020, when the Department of Justice’s Foreign Claims Settlement Commission (Commission) certified Guam’s claims under the Guam World War II Loyalty Recognition Act (Act). Treasury reported that the Commission’s certification of Guam’s claims required Treasury to incur an obligation[4] in the Guam World War II Claims Fund (Fund) in advance of having an approved apportionment for the Fund. Treasury reported that the violation occurred because neither Fiscal Service nor the Commission were aware that an obligation was incurred when the Commission certified a claim, and therefore, did not seek an apportionment prior to the certification of claims.

According to Treasury, it also violated the ADA when it obligated funds in excess of its approved apportionment for the Fund. Treasury reported that this overobligation occurred because agency officials were not aware of the timing of obligations for Guam’s claims as well as the lack of controls associated with the Guam Claims Program.

Lastly, Treasury reported that it violated the ADA again when the Commission obligated and Fiscal Service expended funds in advance of an approved apportionment for the Fund. Treasury reported that Fiscal Service did not request an apportionment for available carryover funds in the Fund prior to the Commission incurring an obligation for Guam’s claims, even though it had incorrectly recorded the unapportioned carryover funds as being available in its financial system. According to Treasury, these actions took place due to a lack of controls associated with the Guam Claims Program and lack of awareness by officials as to when obligations for the claims are incurred.

Fiscal Service and Treasury’s Departmental Offices identified all three of these violations as part of a quarterly financial review on January 22, 2021.

Remedial Action Taken: To prevent a recurrence of this type of violation, Treasury established a process whereby the Commission and Fiscal Service would coordinate before claims are certified so that Fiscal Service can ensure sufficient funds are available and apportioned for the claims. Additionally, Treasury reported that Fiscal Service’s systems no longer show that funds are available until the funds are apportioned, and Fiscal Service updated its procedures to ensure apportionments are requested in a timely manner.

Treasury did not identify any specific individuals as being primarily responsible for these violations. According to Treasury, there was also no knowing or willful intent to violate the ADA.

Source: Unaudited information GAO extracted from agency Antideficiency Act reports; Email from Deputy Director, Office of Performance Budgeting, Treasury, to Staff Attorney, GAO, Subject: RE: Treasury ADA violations in the Guam World War II Loyalty Recognition Act Fund (Oct. 25, 2022).

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-05

Agency No.: None	Date Reported to GAO: May 25, 2022
Agency: Department of Housing and Urban Development (HUD)	Date(s) of Violation(s): July 27, 2017
Account(s): Rental Housing Assistance Program (RAP)	Amount Reported: $8,887,481.61

 

Description: HUD reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it recorded an obligation for the execution of an Interest Reduction Payment (IRP) decoupling agreement in excess of amounts available.

According to HUD, on July 27, 2017, it executed an IRP decoupling approval letter. The execution of this letter resulted in an obligation of $10,596,121.50, although only $1,708,639.89 was available for this agreement. HUD reported that this overobligation occurred because the financial and program staff used incorrect project information when identifying what was legally available for the agreement. According to HUD, agency officials attempted to correct the violation on October 5, 2017.

HUD reported that it attempted to correct the violation by executing an amended IRP decoupling approval letter. However, HUD reported that by amending the letter, it also obligated in excess of what was legally available for the agreement. According to HUD, this error occurred because staff relied on inaccurate numbers in the payment schedule without verifying how much was available for the agreement.

Remedial Action Taken: To prevent a recurrence of this type of violation, HUD reported that it has reinforced the need to verify available amounts against underlying legal agreements and system data before execution of IRP decoupling approval letters. Additionally, HUD reported that it created standard operating procedures for funds control and internal control processes relating to IRP decoupling approval letters to prevent future data discrepancies. According to HUD, it revised the Department’s Funds Control Handbook, which was reviewed and approved by OMB. HUD reported that the violation occurred due to systemic failures and therefore, no responsible employees were identified. According to HUD, there was no knowing or willful intent to violate the ADA. Finally, HUD noted that because there are no amounts available to liquidate the obligation at issue, they requested authority from Congress to do so.

Source: Unaudited information GAO extracted from agency Antideficiency Act reports; Telephone Conversation with Appropriations Law Staff, HUD, and Staff Attorney, GAO (Nov. 7, 2022) (confirming that HUD was reporting only one ADA violation).

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-06

Agency No.: None Reported	Date Reported to GAO: September 6, 2022
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2011
Account(s): Construction, Major Projects	Amount Reported: $18,147,048

 

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated funds in its Construction, Major Projects (Major Construction) account to finance a major construction project at the VA Medical Center (VAMC) in American Lake, Washington, in violation of a statutory spending restriction.

VA reported that in FY 2011, it incurred obligations for a major construction project at the VAMC in American Lake in its FY 2011 Construction, Minor Projects and Veterans Health Administration (VHA) Medical Facilities (MF) accounts. According to VA, the construction work at this VAMC was originally characterized as two minor construction projects and one Non-Recurring Maintenance (NRM) project, but the projects were later combined into a single project, which cost $18,147,048. According to VA, at the time it incurred the obligation for this project, projects in excess of $10 million were required to be charged to the Major Construction account.

According to VA, in FY 2022, it corrected its error and charged the project at the VAMC in American Lake to its no-year Major Construction account. VA reported that while the account had sufficient funds to cover the obligation, such account was subject to a statutory restriction that prohibited VA from using funds in the account for projects that had not been approved by Congress. According to VA, this project had not been approved by Congress, and therefore, VA reported that it violated the statutory restriction and the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA modified its major and minor construction and NRM program processes, including its oversight program. For example, VA reported that Chief Engineers must certify that minor construction projects are stand-alone projects, and minor construction projects that are accomplished in phases are not allowed to proceed with construction until the preceding phase is 95% complete. Additionally, contiguous construction activity, such as NRM projects, are reviewed for project independence by incorporating new review processes between phases, which ensures that initial phases of projects are not dependent on subsequent phases or any other construction projects. VA also reported that total minor construction project costs are controlled through a cost-increase and scope deviation approval process.

VA reported that the former VAMC Director was the senior executive officer responsible for the violation, and he has since retired from office. VA determined that there was no knowing or willful intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-07

Agency No.: None Reported	Date Reported to GAO: September 6, 2022
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2009
Account(s): Construction, Major Projects	Amount Reported: $13,324,051

 

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated funds in its Construction, Major Projects (Major Construction) account to finance a major construction project at the VA Medical Center (VAMC) in Palo Alto, California, in violation of a statutory spending restriction.

VA reported that in FY 2009, it incurred obligations for a major construction project at the VAMC in Palo Alto in its FY 2009 Construction, Minor Projects and Veterans Health Administration (VHA) Medical Facilities (MF) accounts. According to VA, the construction work at this VAMC was originally characterized as one minor construction project and three Non-Recurring Maintenance (NRM) projects, but the four projects were later combined into a single project, which cost $13,324,051. According to VA, at the time it incurred the obligation for this project, projects in excess of $10 million were required to be charged to the Major Construction account.

According to VA, in FY 2022, it corrected its error and charged the project at the VAMC in Palo Alto to its no-year Major Construction account. VA reported that while the account had sufficient funds to cover the obligation, such account was subject to a statutory restriction that prohibited VA from using its funds in the account for projects that had not been approved by Congress. According to VA, this project had not been approved by Congress, and therefore, VA reported that it violated the statutory restriction and the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA modified its major and minor construction and NRM program processes, including its oversight program. For example, VA reported that Chief Engineers must certify that minor construction projects are stand-alone projects, and minor construction projects that are accomplished in phases are not allowed to proceed with construction until the preceding phase is 95% complete. Additionally, contiguous construction activity, such as NRM projects, are reviewed for project independence by incorporating new review processes between phases, which ensures that initial phases of projects are not dependent on subsequent phases or any other construction projects. VA also reported that total minor construction project costs are controlled through a cost-increase and scope deviation approval process.

VA reported that the former VAMC Director was the senior executive officer responsible for the violation, and he has since retired from office. VA determined that there was no knowing or willful intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-08

Agency No.: None Reported	Date Reported to GAO: September 6, 2022
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2010
Account(s): Construction, Major Projects	Amount Reported: $10,333,337

 

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated funds in its Construction, Major Projects (Major Construction) account to finance a major construction project at the VA Medical Center (VAMC) in West Haven, Connecticut, in violation of a statutory spending restriction.

VA reported that in FY 2010, it incurred obligations for a major construction project at the VAMC in West Haven in its FY 2010 Veterans Health Administration (VHA) Medical Facilities (MF) account. According to VA, its obligation for this project totaled $10,333,337, and, at the time it incurred the obligation for this project, projects in excess of $10 million were required to be charged to the Major Construction account.

According to VA, in FY 2022, it corrected its error and charged the project at the VAMC in West Haven to its no-year Major Construction account. VA reported that while the account had sufficient funds to cover the obligation, such account was subject to a statutory restriction that prohibited VA from using its funds in the account for projects that had not been approved by Congress. According to VA, this project had not been approved by Congress, and therefore, VA reported that it violated the statutory restriction and the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA modified its major and minor construction and NRM program processes, including its oversight program. For example, VA reported that Chief Engineers must certify that minor construction projects are stand-alone projects, and minor construction projects that are accomplished in phases are not allowed to proceed with construction until the preceding phase is 95% complete. Additionally, contiguous construction activity, such as NRM projects, are reviewed for project independence by incorporating new review processes between phases, which ensures that initial phases of projects are not dependent on subsequent phases or any other construction projects. VA also reported that total minor construction project costs are controlled through a cost-increase and scope deviation approval process.

VA reported that the former VAMC Director was the senior executive officer responsible for the violation, and he has since retired from office. VA determined that there was no knowing or willful intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-09

Agency No.: None Reported	Date Reported to GAO: September 6, 2022
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2015
Account(s): Construction, Major Projects	Amount Reported: $15,615,147

 

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated funds in its Construction, Major Projects (Major Construction) account to finance a major construction project at the VA Medical Center (VAMC) in Oklahoma City, Oklahoma, in violation of a statutory spending restriction.

VA reported that in FY 2015, it incurred obligations for a major construction project at the VAMC in Oklahoma City in its FY 2015 Minor Construction and Veterans Health Administration (VHA) Medical Facilities (MF) accounts. According to VA, the construction work at this VAMC was originally characterized as one minor construction project and one Non-Recurring Maintenance (NRM) project, but the two projects were later combined into a single project, which cost $15,615,147. According to VA, at the time it incurred the obligation for this project, projects in excess of $10 million were required to be charged to the Major Construction account.

According to VA, in FY 2022, it corrected its error and charged the project at the VAMC in Oklahoma City to its no-year Major Construction account. VA reported that while the account had sufficient funds to cover the obligation, such account was subject to a statutory restriction that prohibited VA from using its funds in the account for projects that had not been approved by Congress. According to VA, this project had not been approved by Congress, and therefore, VA reported that it violated the statutory restriction and the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA modified its major and minor construction and NRM program processes, including its oversight program. For example, VA reported that Chief Engineers must certify that minor construction projects are stand-alone projects, and minor construction projects that are accomplished in phases are not allowed to proceed with construction until the preceding phase is 95% complete. Additionally, contiguous construction activity, such as NRM projects, are reviewed for project independence by incorporating new review processes between phases, which ensures that initial phases of projects are not dependent on subsequent phases or any other construction projects. VA also reported that total minor construction project costs are controlled through a cost-increase and scope deviation approval process.

VA reported that the former VAMC Director was the senior executive officer responsible for the violation, and he has since retired from office. VA determined that there was no knowing or willful intent to violate the ADA.

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

Antideficiency Act Reports – Fiscal Year 2022

GAO No.: GAO-ADA-22-10

Agency No.: None Reported	Date Reported to GAO: September 6, 2022
Agency: Department of Veterans Affairs (VA)	Date(s) of Violation(s): Fiscal Year (FY) 2009
Account(s): Construction, Major Projects	Amount Reported: $21,068,704

 

Description: VA reported that it violated the Antideficiency Act (ADA), 31 U.S.C. § 1341(a)(1)(A), when it obligated funds in its Construction, Major Projects (Major Construction) account to finance a major construction project at the VA Medical Center (VAMC) in Providence, Rhode Island, in violation of a statutory spending restriction.

VA reported that in FY 2009, it incurred obligations for a major construction project at the VAMC in Providence in its FY 2009 Minor Construction account. According to VA, the construction work at this VAMC was originally characterized as five minor construction projects, but these projects were later combined into a single project, which cost $21,068,704. According to VA, at the time it incurred the obligation for this project, projects in excess of $10 million were required to be charged to the Major Construction account.

According to VA, in FY 2022, it corrected its error and charged the project at the VAMC in Providence to its no-year Major Construction account. VA reported that while the account had sufficient funds to cover the obligation, such account was subject to a statutory restriction that prohibited VA from using its funds in the account for projects that had not been approved by Congress. According to VA, this project had not been approved by Congress, and therefore, VA reported that it violated the statutory restriction and the ADA.

Remedial Action Taken: To prevent a recurrence of this type of violation, VA modified its major and minor construction and NRM program processes, including its oversight program. For example, VA reported that Chief Engineers must certify that minor construction projects are stand-alone projects, and minor construction projects that are accomplished in phases are not allowed to proceed with construction until the preceding phase is 95% complete. Additionally, contiguous construction activity, such as NRM projects, are reviewed for project independence by incorporating new review processes between phases, which ensures that initial phases of projects are not dependent on subsequent phases or any other construction projects. VA also reported that total minor construction project costs are controlled through a cost-increase and scope deviation approval process.

VA reported that the former VAMC Director was the senior executive officer responsible for the violation, and he has since retired from office. VA determined that there was no knowing or willful intent to violate the ADA.

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

 

---