  Authority to Use Funds from Fiscal Year 1990 Appropriation to
   Cover Shortfall from Prior Award Year’s Pell Grant Program


T h e P e ll G r a n t P r o g r a m ’s lum p su m a p p ro p ria tio n f o r fiscal y e a r 1990 m a y b e u s e d to p a y th e
     d e f ic ie n c ie s in th e p ro g ra m ’s fu n d in g fo r th e 1 9 8 9 -9 0 a w a rd year.


                                                                                                        March 29, 1990

                     M e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l
                                          D e p a r t m e n t o f E d u c a t io n



    This memorandum responds to your request for advice concerning a dis­
pute between the Department o f Education (“the Department”) and the Office
o f M anagement and Budget (“OMB”) over the funding of the Pell grant
program, 20 U.S.C. §§ 1070-1070f.‘ The question presented is whether Pell
grant funds appropriated in the Departments of Labor, Health and Human
Services, and Education and Related Agencies Appropriations Act, 1990 (“FY
1990 Appropriations Act”), Pub. L. No. 101-166, 103 Stat. 1159 (1989), may
be used to cover Pell grant program expenses for both the 1989-90 and
1990-91 “award years,” and in particular whether the program’s projected
shortfall for the 1989-90 award year can be met by using appropriated funds
in excess of the $131,000,000 that the FY 1990 Appropriations Act states
“shall be available only for unfinanced costs in the 1989-90 award year Pell
Grant program.” Pub. L. No. 101-166, 103 Stat. at 1181. We conclude that
the lump sum appropriation in the FY 1990 Appropriations Act may be used
to pay the deficiencies in the program’s funding for the 1989-90 award year.

                                                    I. Background

   Title IV o f the Higher Education Act of 1965, as amended, authorizes the
Pell grant program and declares that its purpose is “to assist in making
available the benefits of postsecondary education to eligible students.” 20
U.S.C. § 1070a. The basic grants provided under the program are intended,


   'S e e L e tte r fo r W illiam P. B arr, A ssistant A ttorney G en eral, O ffice o f Legal C o u n sel, from E dw ard C.
S trin g e r, G e n e ra l C o u n se l, D epartm ent o f E d u catio n (Jan. 12, 1990) (“ S tringer L e tte r” ), and a cco m p a­
n y in g M e m o ran d u m o f L aw (Nov. 13, 1 9 8 9 ) (“ E ducation M em o ran d u m ”).

                                                               68
within statutory limits, to meet up to sixty percent of an eligible student’s
cost of attendance. Id. § 1070a(b)(l), (3). The statute also sets forth criteria
of eligibility, expected family contributions, and the amount of each grant.
Id. §§ 1070a to 1070a-4.
    Congress has funded the Pell grant program with appropriations that are
available for obligation over a period of two fiscal years. The federal
government’s fiscal year begins on October 1 and ends on the following
September 30. See 31 U.S.C. § 1102. An “award year” is defined at 20
U.S.C. § 1070a-6(3) as “the period of time between July 1 of the first year
and June 30 of the following year.” Thus, a Pell grant award year begins
three months before the start of a fiscal year and runs through the first nine
months of that fiscal year. Generally, Pell grant appropriations have been
justified in budget submissions to Congress for the next award year, i.e., the
award year that will begin nine months after the start of the first fiscal year
covered by the appropriation. See Stringer Letter at 1; Letter for Lynda
Guild Simpson, Deputy Assistant Attorney General, Office of Legal Coun­
sel, from Rosalyn J. Rettman, Associate General Counsel for Budget, Office
of Management and Budget at 9 (Feb. 6, 1990)(“Rettman Letter”).
    Budget estimates of the cost of the Pell grant program for a future award
year depend on several variables, including the number of eligible students
and the extent of family contributions, that are difficult to predict. There is
also a substantial time lag between the submission of a budget request to
Congress based on estimates of funds that will be needed, and the com ple­
tion of the award year for which appropriations have been made, when the
actual costs of the program can finally be known. See Education Memoran­
dum at 3, 4. Thus, the amounts appropriated for the program in a given
fiscal period and the program’s actual cost in the corresponding award year
almost inevitably fail to match. The authorizing statute provides methods
for handling these mismatches. Section 1070a(h) of title 20, U.S. Code
provides for the disposition of excess funds, and section 1070a(g) provides
for the Department to make program cuts by applying a “linear reduction”
formula to certain grants if appropriations for any fiscal year do not suffice
to satisfy fully all entitlements.2
   The Pell grant program has suffered from recurring funding deficiencies
that began in the late 1970s. Congress usually addressed these deficiencies

 ! 20 U .S .C . § 1070a(g) provides as follows:
         (1 ) If, fo r any fiscal year, the funds appropriated fo r paym ents u n d e r this su b p art are
      insufficient to satisfy fully all en titlem en ts, as calcu lated u n d er su b section (b) o f this
      sectio n , the a m o u n t paid w ith respect to each en titlem en t shall be—
             (A) the full am ount fo r any student w hose expected fam ily contrib u tio n is $ 2 0 0 or
      less, or
             (B) a p ercen tag e o f th at entitlem ent, as determ ined in accordance w ith a sch ed u le
      o f reductions estab lished by the Secretary for this purpose, for any student w hose e x ­
      pected fam ily con trib utio n is m ore than $200.
         (2 ) Any sch ed u le e stab lish ed by the S ecretary for the purpose o f paragraph (1 )(B ) of
     this subsection shall contain a single lin e a r reduction form ula in w hich the percentage
     red u ctio n in creases u n iform ly as the en titlem en t decreases and shall provide that if an
     en titlem en t is reduced to less than $100, no paym ent shall be m ade.

                                                        69
 by providing, in annual appropriations acts between 1979 and 1987, that the
 lump sum appropriation would first be available to meet any deficiency from
 the award year that was in progress when the fiscal year began. For ex­
 ample, the FY 1979 Appropriations Act, Pub. L. No. 95-480, 92 Stat. 1567,
 1579 (1978), provided that “amounts appropriated for basic opportunity grants
 shall first be available to meet any insufficiencies in entitlements resulting
 from the payment schedule . . . published by the Commissioner of Education
during the prior fiscal year.” This language was slightly altered beginning
with a FY 1983 Appropriations Act, Pub. L. No. 97-377, 96 Stat. 1897 (1982),
which stated that “amounts appropriated for Pell Grants shall be available
first to meet any insufficiencies in entitlements resulting from the payment
schedule for Pell Grants published by the Secretary of Education for the
 1981-1982 academic [i.e., award] year.”3 During this period, the “Budget
Justifications submitted by the Executive Branch reflect a fairly, consistent
view that the provisions were added to perm it use o f the appropriations for
the prior award year.” Education Memorandum at 8.
    In 1987, Congress changed this practice by enacting a $287,000,000 supple­
mental appropriation. See Pub. L. No. 100-71, 101 Stat. 391, 421 (1987)
(“Supplemental Appropriation Act, 1987”). This supplemental appropriation
forestalled any need to state in the FY 1988 Appropriations Act that FY
 1988 funds were to be first available to retire the shortfall from the award
year then in progress. Moreover, no such language was contained in the FY
1989 Appropriations Act.4
    Before the beginning of FY 1990, the Administration forecast a shortfall
for the award year 1989-90 o f some $331,000,000. OMB informed Con­
gress that the Administration would impose the linear reductions mandated
by 20 U.S.C. § 1070a(g) unless Congress appropriated sufficient funds to
cover the projected deficiency. Congress, however, relied on the cost esti­
mates calculated by the Congressional Budget Office, which suggested a
funding shortfall of not more than $131,000,000. See H.R. Conf. Rep. No.
274, 101st Cong., 1st Sess. 40-41 (1989); see also Pub. Papers of George
Bush 1373 (Oct. 21, 1989) (President’s veto message on H.R. 2990, noting
that legislation underfunded Pell grant program). In light of that lower
estimate, Congress provided in the FY 1990 Appropriations Act that the
Secretary would have an “additional” $131,000,000 to be “available only”
for the anticipated shortfall. In relevant part, the statutory language reads:

            For carrying out subparts 1, 2, and 3 of part A and parts C, D,
            and E o f title IV of the Higher Education Act, as amended,

   3See S trin g e r L e tte r at 3; Education M em o ran d u m at 2 ,7 an d A ttachm ent B (quoting relevant language
fro m a p p ro p ria tio n s acts); R ettm an L e tte r at 2-3.
   O n e e x c e p tio n to th is p attern should b e noted. L an g u ag e sim ilar to that q u oted from the FY 1979
a p p ro p ria tio n a p p ea re d in th e proposed b ill, H .R . 7998, 9 6 th C ong., 2 d Sess. (1980), fo r the FY 1981
a p p ro p ria tio n , b u t not in th e final e n actm ent. See E d u catio n M em orandum , A ttachm ent B at 2.
   4See P u b . L . N o . 10 0-2 0 2 , 101 Stat. 1329-1 (1 9 8 7 ) (“F Y 1988 A p p ro p riatio n A c t); R ettm an L e tte r at
3-4.

                                                              70
            $6,044,097,000 together with an additional $131,000,000 which
            shall be available only fo r unfinanced costs in the 1989-90
            award y e a r Pell Grant program . . . .

Pub. L. No. 101-166, 103 Stat. at 1181 (emphasis added).

   The Department currently expects a 1989-90 award year shortfall of
$265,000,000 over and above the $131,000,000 earmarked by the FY 1990
Appropriations Act. You have advised us that unless the Department can
draw on additional funds from the FY 1990 appropriations to meet this
shortfall, its only practicable recourse will be “to discontinue all further
awards or payments to schools (and, indirectly, to students) or to announce a
reduced payment schedule.” Stringer Letter at 3.

                                                      II. Analysis

    As a general proposition, “the absence in the terms of an appropriations
act of a prohibition against certain expenditures under that appropriation
implies that Congress did not intend to impose restraints upon an agency’s
flexibility in shifting funds among activities or functions within a particular
lump sum account.” 4B Op. O.L.C. 701, 702 (1980); see also General
Accounting Office, Principles o f Federal Appropriations Law at 5-95 (1982)
(restrictions on a lump sum appropriation contained in an agency’s budget
request or in legislative history are not binding unless they are specified in
the appropriations act itself). Thus, lump sum appropriations available to an
agency in a given fiscal year can generally be used to meet any program ex­
penses that are incurred within the same fiscal year. Presumptively, then, expenses
incurred in the operation of the Pell grant program within FY 1990 — including
program expenses incurred in the nine months of the 1989-90 award year that
occur in FY 1990 — can be paid out of the Department’s FY 1990 appropria­
tion, unless Congress has determined otherwise.5 The central question therefore
is whether Congress has restricted the Department’s presumptive authority to
draw on the FY 1990 lump sum appropriation to meet the shortfall for the 1989-
90 award year. We conclude that Congress has imposed no such restriction.



   ’ T his view acco rd s w ith p rio r C ongressional understan d in g o f th e Pell grant app ro p riatio n . T h u s, the
a p p ropriatio n fo r the p ro g ram in FY 1978 was found on la te r e stim ates to exceed the ex p en se s re q u ire d
fo r the 1978-79 aw ard year. T h is left som e $ 5 6 1,000,000 still a v ailab le at the end o f the 1978-79 aw ard
y e ar in June, 1979. T h e leg islativ e history to Pub. L. N o. 96-123, 93 Stat. 925 (1979), reflects that
C o n g ress u n d ersto o d th at that m oney rem ained available fo r o b lig ation until S ep tem b er 30 , 1979, i.e.,
the end o f FY 1978. A ccordingly, C ongress understood th at th at a m o unt could be spent before S e p te m ­
b e r 30, 1979, to p ay g ran t aw ards for the 1979-80 aw ard year. A s the S enate R eport on H .R . 4 3 8 9 , a
p re d e ce sso r o f Pub. L. N o. 96 -1 2 3 , stated, see S. R ep N o. 247, 9 6 th C ong., 1st Sess. (1 9 7 9 ), “ (i]n o th e r
w ords, all funds w ill be o b lig ated d uring the fiscal y ears fo r w hich they w ere app ro p riated . T h e o nly
d ifferen ce is th at they w ill be used by students in different school [i.e., aw ard] years than w as o rig in ally
planned. Both H E W an d the O ffice o f M anagem ent and B udget agree th at this can be d o n e .” Id. at 116.

                                                              71
A. The FY 1990 Appropriations Act

   Our starting point is, of course, the language of the FY 1990 Appropria­
tions Act itself. See supra pp. 70-71 (quoting statute). That language does
not in terms limit the Department’s authority to use the lump sum funds only
for program expenses for the upcoming 1990-91 award year. The language
makes an appropriation of $6,044,097,000 for Pell grant program expenses
without limiting the use of those funds to program costs arising in any
single award year. The language then provides “an additional $131,000,000
to the specific purpose of paying off the 1989-90 award year deficiency; it
does not, however, limit the use of the lump sum appropriation, nor does it
state that the $131,000,000 which shall be available only for unfinanced
costs in the 1989-90 award year Pell Grant program.” In effect, this proviso
limits the use of the $131,000,000 to the specific purpose of paying off the
1989-90 award year deficiency; it does not, however, limit the use of the
lump sum appropriation, nor does it state that the $131,000,000 is the only
amount that may be used for retiring the deficiency. Thus, we see nothing in
the express language of the FY 1990 Appropriations Act that prohibits the
Department from using the lump sum appropriation to cover a prior award
year’s deficiency if the $131,000,000 earmarked for that purpose proves
insufficient.
   Such a construction of the FY 1990 Appropriations Act accords with its
legislative history. The Conference Report details the background to the FY
1990 appropriation, including the Administrations’s revised estimate of a
$331,000,000 deficiency for award year 1989-90, OMB’s warning to Con­
gress that the Administration would seek to recover program funds from
individual grantees if additional funds to meet the deficiency were not pro­
vided in FY 1990, and the Congressional Budget Office’s counter-estimate
of a deficiency “o f not more than $131 million.” H.R. Conf. Rep. No. 274 at
40. The Report then states:
        Based on this information, the conferees have provided an
        immediate appropriation of $131 million to cover the funding
        shortfall for the 1989/1990 academic year. Although the con­
        ferees have provided explicit legislative authority for the use
        o f funds for the 1989 shortfall, the conferees do not necessar­
        ily concur in OMB’s view that this language is necessary in
        order for funds to be used for this purpose. The conferees
        note that OMB’s policy differs substantially from previous
        Administration practice in handling the financing of current
        year shortfalls. As a result of this 1989 appropriation and
        some 1989 savings achieved through the provisions cited be­
        low [6], the conferees consider any attempt to impose a linear

   ‘ T h e “ 1989 sa v in g s " th a t the c o n fe re es ex p ec te d to a ch iev e w ere to com e from the b ill’s ch an g e s in
P e ll g ra n t fu n d in g , s p e c ific a lly the fa c ts that it “ lim it[ed ] th e d iscretio n o f stu d en t a id a d m in istra to rs in
                                                                 C o n tin u ed

                                                                      72
           reduction of Pell Grant awards in the current academic year to
           be both unacceptable and unnecessary.

H.R. Conf. Rep. No. 274 at 40-41.

   Although this language is not free from ambiguity, we believe that it
supports the Department’s position. The Report clearly states that the con­
ferees provided an “immediate” appropriation to be applied to the shortfall,
but that they did not concur in the view that special language was necessary
to achieve that purpose. Moreover, the Report notes that OMB’s view was
contrary to prior practice, in which the Department had drawn on the lump
sum to prevent linear reductions from taking effect without obtaining a spe­
cial appropriation earmarked for that purpose. These statements, in conjunction
with the conclusion that the conferees would find linear reductions unaccept­
able, strongly suggest that the conferees believed the Department could,
consistent with prior practice, also draw on the lump sum appropriation to
prevent linear reductions if the $131,000,000 proved insufficient. The Report
in no way demonstrates that Congress thought specific language, like that
used in the past, was necessary for the lump sum to be used as the Depart­
ment intends. At most, the Report does not address that issue squarely.
Under those circumstances, the Department’s presumptive ability to use the
lump sum appropriation for any expenses incurred within the fiscal period
applies.7

B. The FY 1979-1987 Appropriations Acts

   OMB argues that the language Congress included in annual appropria­
tions acts from FY 1979 through FY 1987, providing that moneys appropriated
for the Pell grant program “shall first be available” to meet deficiencies in
funding for the award year in progress, was required in order for the Depart­
ment to have the authority to use the lump sum for that purpose. OMB
argues that the absence of such language in the FY 1990 Appropriations Act
prevents the Department from using the lump sum appropriation for FY
1990 to meet the 1989-90 award year deficiency. See Rettman Letter at 9;

   ‘ (....contin u ed )
a d ju stin g Pell G ra n t aw ards at th e cam pus lev el,” that it “ im plem ent[ed] the A d m in istra tio n ’s p ro p o sa l
fo r the im p lem en tatio n o f p ro -rata refund p o licies at p ostsecondary in stitutions w ith loan defau lt ra te s
in e x ce ss o f 30 p e rc en t," and that it “delay[ed] the eligibility o f students attending on a less than h a lf tim e
b a sis fo r Pell G ran t aw ard s.” H .R . C onf. R ep. No. 274 at 41
   1 S e n a to r H a rk in 's floor statem en t explaining the purpose o f the $ 131,000,000 ap p ro p riatio n also n o te s
th at this prior p ra c tic e w as to be preserved. See S trin g er L etter at 2 n.4. S en ato r H arkin stated th a t “ in
re serv in g this a m o u n t for the sh o rtfall, it was not intended that the S ecretary o f E ducation be pre c lu d e d
from using other av ailab le fu n d s in the Pell g ran t appropriation, as done in previous y e ars, to c o v er the
u n fin an ced costs fo r th e cu rren t academ ic year.” 135 C ong. Rec. S15, 804 (daily ed. N ov. 16, 1989).
   O f c o u rse, it is true that C o n g re ss’ primary intention in app ro p riatin g a lum p sum o f $ 6 ,0 4 4 ,0 9 7 ,0 0 0
for the Pell grant p ro g ram for FY 1990 w as to fu n d the p ro g ram ’s ex p en ses fo r the 1990-91 aw ard year.
                                                        C ontinued

                                                            73
Education Memorandum at 8. We reject that negative implication for two
main reasons.
    We believe the language o f the prior appropriations acts did not provide
“additional authority not otherwise available to the agency head.” Rettman
Letter at 9. Rather, the requirement that appropriated funds “shall first be
available” to meet an outstanding deficiency establishes a priority use for
funds that the Department otherwise would have had authority to allocate to
any expenses incurred within the fiscal year for which the appropriation was
made, regardless of the award year. See Education Memorandum at 8. The
form of words chosen by Congress — requiring that the Pell grant appro­
priation fir s t be available for paying a program deficiency from a pending
award year — says that Congress wanted to ensure that the Department
applied the appropriation to the deficiency before it expended funds for
other purposes. In our view, the plain language of these provisions consti­
tutes a limitation on existing authority, rather than an affirmative grant of
new authority. Congress’ underlying intent was apparently to prevent the
Department from pursuing alternatives to a draw-down on the lump sum
appropriation, such as imposing linear reductions.
   The pattern of Congress’ decisions from FY 1979 through FY 1987 is
thus entirely consistent with its decision in FY 1990. In each of these
appropriations, Congress appears to have wanted to prevent the hardship that
would have been caused by imposing linear reductions. To that end, Con­
gress consistently provided alternatives to the linear reduction procedure. In
the early years, Congress m andated the first use of the lump sum appropria­
tion to cover a shortfall, thus limiting the Department’s discretion to spend
the money for other purposes and impose linear reductions instead. In FY
1990, Congress achieved the same end by appropriating what it believed to
be an ample sum for the specific purpose of retiring the shortfall.8 Never­
theless, the conferees made clear that they did not approve of a deviation
from the past practice of resorting to the lump sum rather than permitting
linear reductions to take effect. Against this background, it is implausible to

  ’ (....c o n tin u e d )
See B -2 3 6 6 6 7 , O p in io n o f th e C om ptroller G eneral, 1990 W L 277766, at *2 (Jan. 26, 1990) (“E ach tw o-
y e a r a p p ro p ria tio n p ro v id e s funding in te n d e d p rim arily fo r the aw ard y e ar beginning nine m onths a fte r
its e n a c tm e n t.” ). H ow ev er, the fact th a t C o n g ress believed that the b ulk o f the lum p sum a p p ropriation
w o u ld be a p p lie d to aw ard year 1990-91 expenses does n o t preclude its a vailability to m eet the aw ard
y e a r 1 9 8 9 -9 0 d eficien cy .
   'O M B n o tes th a t at the tim e of the F Y 1986 a p p ro p riatio n , Senators W eicker and Proxm ire disavow ed
C o n g re s s ' p rio r p ra c tic e o f requiring m an d ato ry draw s ag ain st appropriations to c o v er cu rren t aw ard
y e a r e x p e n se s. See R ettm an Letter at 3; 131 C ong. R ec. 34,997 (19 8 5 ) (rem arks o f Sen. W eicker); id.
(re m a rk s o f S e n a to r P ro x m ire). Senator W eicker stated th a t “ the conferees direct that the S ecretary take
w h a te v e r step s are a v ailab le to him u n d e r cu rren t statu to ry authority to ensure th a t 1986 program costs
are re d u c e d to a lev el co n sisten t w ith th e ap p ro p riatio n ," th u s im plying that the m an d ato ry draw -dow n
w o u ld n o t b e re p e ated in the FY 1987 a p p ro p riatio n , an d th a t linear reductions should, if necessary, be
im p o se d on th e 1986-87 aw ard year P ell grants. Id. S e n a to r Proxm ire agreed and stated th at “ [i]f there
is an y u n a n tic ip a te d sh o rtfa ll in 1986 p ro g ram co sts, in s p ite of the $3.5 billion inclu d ed in the c o n fe r­
e n c e re p o rt, th en the S ecretary of E d u catio n can m ake th e necessary reductions c o n siste n t w ith existin g
law .” Id. D e sp ite th e se w arnings, h o w e v er, th e FY 1987 a p p ropriation again in clu d ed m an d ato ry
d ra w -d o w n la n g u a g e sim ila r to that o f p rio r years. See Pub. L. No. 99-591, 100 Stat. 3341-287 (1986).

                                                               74
maintain, as does OMB, that the FY 1990 appropriation compels the imposi­
tion of linear reductions and forbids the draw-down of lump sum funds.

C.           Section 411(g) o f the Higher Education Act

    Section 411(g) of the Higher Education Act, codified as section 1070a(g)
of title 20, provides for the Department to apply “linear reduction[s]” to
specified classes of grants if, “for any fiscal year, the funds appropriated for
payments under this subpart are insufficient to satisfy fully all entitlements,
as calculated under subsection (b) of this section [providing means of calcu­
lating grants for the award year].” See supra note 2 (quoting statute).9 OMB
construes section 411(g) to require the imposition of linear reductions when­
ever a deficiency arises near the end of an award year (here, the 1989-90
award year), thus preserving the current appropriation (the FY 1990 appro­
priation) for use in the next award year (the 1990-91 award year). It maintains
that this “linear reduction” authority is “that which makes Pell grants a
discretionary program, since it provides a statutory tool permitting the pro­
gram to operate at any given appropriation level.” Rettman Letter at 2. The
Department argues that neither the FY 1990 Appropriations Act nor section
4 1 1(g) in terms requires that lump sum appropriations be restricted to use in
a single award year. Hence, the Department concludes, it has the discretion
to allocate such funds between two award years within the same fiscal year
period of availability. See Education Memorandum at 5. We agree with the
Department’s view.
    The literal language of section 411(g) does not require the imposition of
linear reductions on previously awarded Pell grants whenever a deficiency
arises within an award year, even in cases where funds are available within
an applicable fiscal year period to meet such a deficiency. The section
states only that linear reductions shall be made “ [i]f, for any fiscal year, the
funds appropriated for payments under this subpart are insufficient to satisfy
fully all entitlements.” 20 U.S.C. § 1070a(g). The statutory reference to
“entitlements” does not, by its terms, refer only to grants for the follow ing
award year. Nothing in the linear reductions provisions, in fact, indicates
which award year’s entitlements are to be reduced. It states only that en­
titlements must be reduced whenever funds appropriated for any fisca l year
— not award year — are insufficient. As matters now stand, the funds
available for expenditure in FY 1990 for program costs are not “insufficient
to satisfy fully all entitlements” that now must be covered for the remainder
of the 1989-90 award year. To be sure, a draw-down of $265,000,000 from
the FY 1990 lump sum appropriation to cover the 1989-90 award year defi­
ciency may eventually cause the lump sum appropriation to be “insufficient
to satisfy fully all entitlements” pertaining to the 1990-91 award year. But
at the moment, the funds available to be expended for current Pell grant

 ’ T h e FY 1990 A p p ro p riatio n s A ct d o es not re stric t o r rep eal sec tio n 411(g).

                                                           75
entitlements are more than sufficient, and the Department need not impose
linear reductions to cover the 1989-90 award year shortfall.
    OMB reads section 411(g) to mean that if an appropriation for an award
year is insufficient to meet all entitlements within the same award year,
linear reductions are mandatory. This construction assumes that the sole
purpose o f any Pell grant appropriation, unless otherwise stated, is to fund
program expenses for a single award year. But the language of the FY 1990
Appropriations Act is not so limited. Moreover, as noted above, OM B’s
view implicitly substitutes “award year” for “fiscal year" in the text of the
linear reduction provisions, with no basis for doing so. See Letter for Lynda
Guild Simpson, Deputy Assistant Attorney General, Office of Legal Coun­
sel, from Steven Y. Winnick, Deputy General Counsel for Program Service,
Department o f Education at 2 (Feb. 15, 1990). Even accepting OMB’s point
that the Higher Education Act contains other language showing that the Pell
grant program is structured on an award year basis, see Rettman Letter at 8,
the linear reduction provision is not so limited, and it does not follow that
an appropriation for a given fiscal year period must not be used to pay off
the current award year’s arrearages that occur within that fiscal period.
   We therefore conclude that the Higher Education Act does not prohibit
the Department from using the FY 1990 lump sum appropriation to pay off
the deficiency from the 1989-90 award year.

D. The Anti-D eficiency Act

   OMB also argues that the Anti-Deficiency Act supports its view. It con­
tends that the Department’s analysis

         would allow the possibility of increasing debts rolling for­
         ward each year into the next fiscal year, resulting in a possible
         violation o f the Anti-Deficiency Act: if the Department is
         permitted an indefinite draw on one year’s appropriation to
         pay for shortfalls in the prior award years, then the funds
         available for the current award year will be that much more
         insufficient, increasing the underfunding of the current year —
         with no fiscal accountability and with Congress coerced into
         appropriating that deficiency at some point in the future.

Rettman Letter at 4-5.
  The Anti-Deficiency Act, 31 U.S.C. § 1341,10 is intended in part “to keep

 l0T h e p e rtin e n t p ro v isio n s o f that A ct, 31 U .S.C. § 1341(a)(1), read as follow s:
         A n o ffic e r o r em p lo y e e of the U n ite d States G o v e rn m e n t. . . m ay not—
         (A ) m ake o r authorize an expenditure o r obligation exceeding an am ount available in an
      a p p ro p ria tio n o r fu n d fo r the ex p en d itu re o r o b lig a tio n ; o r
         (B ) in v o lv e [the] governm ent in a contract o r oblig ation fo r the paym ent o f m oney
      b e fo re an ap p ro p ria tio n is made u n le ss au th o rized b y law.

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all the departments of the Government, in the matter of incurring obligations
for expenditures, within the limits and purposes of appropriations annually
provided for conducting their lawful functions, and to prohibit any officer or
employee of the Government from involving the Government in any contract
or other obligation for the payment of money for any purpose, in advance of
appropriations made for such purpose.” 55 Comp. Gen. 812, 823 (1976)
(quoting 42 Comp. Gen. 272, 275 (1962)).“
    We do not believe that by drawing on the FY 1990 lump sum appropria­
tion to pay off the remainder of the 1989-90 award year deficiency, the
Department would violate terms of the Anti-Deficiency Act.12 The use o f the
FY 1990 appropriation to pay off the deficiency would not be “an expendi­
ture or obligation exceeding an amount available in an appropriation or fund
for the expenditure or obligation,” 31 U.S.C. § 1341(a)(1)(A), because, as
explained above, the Department may expend the lump sum appropriation for
any program costs incurred within the fiscal year period of availability. Nor
would such action by the Department “involve [the] government in a contract
or obligation for the payment of money before an appropriation is made.” 31
U.S.C. § 1341(a)(1)(B). Even assuming that a draw of $265,000,000 from
the FY 1990 appropriation would leave that appropriation insufficient to cover
program expenses connected with the 1990-91 award year, that result would
not in itself create an obligation to fund grant awards for that award year at
the levels currently contemplated, or compel Congress to enact a supplemen­
tal appropriation to cover a deficiency for that award year. Congress may, at
any time, decline to appropriate more funds. Under those circumstances,
appropriated funds in a fiscal year would be insufficient to satisfy entitle­
ments, and linear reductions would take effect.
    Accordingly, we conclude that the Department would not violate the Anti-
Deficiency Act if it paid the current award year shortfall out of the FY 1990
lump sum appropriation.




    " See also Hooe v. United States, 43 Ct. Cl. 245, 260 (1908), a f f ’d, 218 U .S. 322 (19 1 0 ) (C o n g re ss'
sp ecific ap p ro p riatio n s m ust not be ex ceed ed fo r any fiscal year); 39 Com p. G en. 422, 425 (19 5 9 ) (“T h e
ob ject o f the statute w as to prevent ex ecu tiv e o fficers from involving the G overnm ent in e x p en d itu re o r
liabilities b eyond th o se c o n tem p lated and au th o rized by the C o n g ress."); 55 C om p. G en. 768, 773-74
(1976) (current fiscal y e a r funds c an n o t be applied eith er directly o r through rep ro g ram m in g to liq u i­
d ate contract o b lig atio n s incurred in p rio r fiscal years).
   12 In d e e d , w e d o n o t u n d e rstan d O M B to argue th a t a p er se v io latio n w o u ld exist, s in c e it m e re ly
c la im s that “ a possible v io la tio n ” w o u ld occur, see R ettm an L e tte r at 4-5 (e m p h a sis a d d ed ), if d e fic ie n ­
c ie s co n tin u e d to ro ll fo rw ard fro m o n e fiscal y e a r to the next in d efin itely

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                              C onclusion

   We conclude that neither the FY 1990 Appropriations Act, the Higher
Education Act, nor the Anti-Deficiency Act prevents the Department from
using the lump sum appropriation in the FY 1990 Appropriations Act for
paying deficiencies in excess of $131,000,000 in the Pell grant programs
funding for the 1989-90 award year.

                                            WILLIAM P. BARR
                                       Assistant Attorney General
                                        Office o f Legal Counsel




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