National Association of Government Contractors


GAO Threatens Jail Time Over Shutdown Spending

Review by the Government Accountability Office (GAO) has determined that several federal agencies illegally spent money during the government shutdown earlier this year. GAO warned that future violations could result in penalties including fines and jail time. 

 
The GAO’s review followed an unusual decision by the Trump administration during the record-setting shutdown, instructing agencies to continue funding a variety of functions typically suspended during a lapse in appropriations. As the shutdown dragged on and agencies were increasingly strained by a lack of resources, the administration diverted funds from their normal purposes to mitigate its impact. Those decisions led congressional Democrats to ask GAO, the agency tasked with enforcing appropriations laws, to investigate if any of the spending was improper. 
 
In one legal decision, GAO said the Interior Department violated the Anti-Deficiency Act when it used recreation fees collected by the National Park Service to keep parks open and continue services such as trash collection and restroom maintenance. In another, GAO faulted the Agriculture Department for disbursing Supplemental Nutrition Assistance Program benefits early during the shutdown. 
 
Officials at both departments defended their spending, noting the White House had signed off on them and vowing to ignore GAO’s decisions. Jacob Wood, a spokesman for the Office of Management and Budget, blamed congressional Democrats for the length of the 35-day shutdown that started in December 2018 and continued into this year and said the administration acted so Americans would not suffer over “partisan politics.” 
 
“At the direction of the president, the administration made the partial lapse in appropriations as painless as possible,” Wood said. “Working with agencies and consistent with the law, we were able to continue to provide assistance to those in need of SNAP benefits, allow National Parks to be open, and more. GAO’s attempt to call into question these lawful actions is absurd and heartless.” 
 
During the shutdown, the Trump administration opted to keep national parks open. After widespread complaints about a lack of maintenance at park facilities, Interior eventually announced it would use fees collected under the Federal Lands Recreation Enhancement Act to better serve visitors. Those funds are statutorily set aside for deferred maintenance and facility improvement projects, such as fixing roofs and replacing deteriorating bridges. Following the shutdown, Interior replenished its fee-funded account through its Operation of National Park System appropriation. In so doing, GAO said, the department violated both the lands recreation enhancement and the Anti-Deficiency Act, the law that prohibits executive branch officials from spending appropriated funds in ways not approved by Congress.
 
Interior’s rationale behind its decision “tears at the very fabric of Congress’s constitutional power of the purse,” GAO said. 
 
The auditors said Interior “must” report its violations to Congress, make whole the appropriated account it tapped to replenish the FLREA account and explain how it would prevent future violations during any forthcoming shutdown. GAO further said any future violation would be treated as “knowing and willful” and would result in fines of up to $5,000 and up to two years of imprisonment for the officials responsible.
 
An Interior spokesperson, however, made clear the department did not feel bound by GAO’s ruling.
 
“It’s obvious that the GAO reached their conclusion prematurely and without regard for all of the facts,” the spokesperson said. “We completely disagree with the GAO’s erroneous opinion regarding our appropriate and lawful use of FLREA funds. The department acted well within its legal authority to clean up restrooms and pick up trash, so the American people could enjoy their National Parks.” 
 
GAO also faulted Interior for not responding to its request for the department’s legal views and other information, noting it first made its request in early May. While GAO said it had sufficient information to still issue its decision, Interior’s unresponsiveness forced the watchdog to delay another decision regarding the National Park Service’s move to transfer funds to keep the tower connected to the Old Post Office in downtown Washington, D.C.--where President Trump’s real estate company operates a hotel--open during the shutdown. Interior kept the tower open in partnership with the General Services Administration, which GAO cleared of wrongdoing. 
 
The Interior spokesperson said the department was still working on complying with GAO’s requests.
 
“The department was in ongoing conversations with GAO regarding our response, which they knew was in process,” the official said. “The report’s characterization of our lack of cooperation is blatantly false.”    
 
At Agriculture, meanwhile, the department decided to disburse SNAP benefits--which provide food assistance to 42 million Americans--earlier than the normal date so funds would not expire. A previous spending bill gave USDA 30 days after appropriations ran out to spend SNAP money. Instead of disbursing the benefits at the beginning of the month for the February 2019 payments, the department sent them on Jan. 21 to comply with the 30-day deadline. 
 
GAO said if Congress had intended to enable USDA to disburse SNAP funds indefinitely, it would have provided that authority in statute. 
 
“Taken to its logical conclusion, USDA’s rationale would allow the agency to circumvent the [continuing resolution’s] restrictions by obligating up to a full year of SNAP payments, so long as the obligations were made during the 30-day period following expiration of the CR,” GAO said. “This would contravene Congress’s power of the purse and is therefore untenable.”
 
Like it did for Interior, GAO said Agriculture violated the Anti-Deficiency Act and should adjust its accounts to make up for the money it shifted around during the shutdown. It also threatened USDA with fines and imprisonment for future violations. 
 
A USDA spokesperson condemned the decision as erroneous, saying the department had authority from OMB. The official added the moving up of payments was in line with precedent set during natural disasters. 
 
“GAO’s attempt to call this longstanding legal authority of USDA into question is both reckless and heartless,” the spokesperson said. “USDA does not and will not apologize for ensuring that those who are less fortunate receive the nutrition benefits they need. Instead, USDA will continue to interpret our legal authorities as we always have.” 
 
While administration officials blasted GAO, the watchdog agency did provide the White House with one win in its recent set of legal decisions. The auditors said the Pentagon acted lawfully when it used money from its Drug Interdiction and Counter Drug Activities account to support the Homeland Security Department in installing fences and barriers at the U.S.-Mexico border. GAO said it was in “no position” to contest the barrier construction was a “higher priority” than the original purpose of the appropriation. It also confirmed the shift was “based on unforeseen military requirements” and Congress had not explicitly prohibited the construction of barriers and fences.



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