Authority of HUD's Chief Financial Officer to Submit Final Reports on Violations of Appropriations Laws ( 2004 )

Authority of HUD’s Chief Financial Officer to Submit
Final Reports on Violations of Appropriations Laws
The Consolidated Appropriations Resolution for Fiscal Year 2003 requires the Chief Financial Officer
of the Department of Housing and Urban Development to report to the President and Congress on
violations by the agency of the Anti-Deficiency Act and other appropriations laws concerning
expenditures, but the CFO must first submit his reports to the Secretary of HUD for review and
approval.
August 31, 2004
MEMORANDUM OPINION FOR THE ACTING GENERAL COUNSEL
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
You have asked for our opinion concerning the proper interpretation of an
appropriations statute that directs the Chief Financial Officer (“CFO”) of the
Department of Housing and Urban Development (“HUD”) to submit final reports
to the Secretary of HUD, the President, and Congress concerning violations of the
Anti-Deficiency Act (“ADA”) and other statutes relating to HUD appropriations.
In particular, you have inquired whether this legislation overrides language in the
ADA that directs “the head of the agency” to report ADA violations to the
President and Congress and, if so, whether the CFO may submit reports on ADA
violations without first seeking the review and approval of HUD’s Secretary. We
conclude that the appropriations statute at issue does require the CFO to report to
the President and Congress on violations of the ADA and other applicable
appropriations statutes, but that he must first submit his reports to the Secretary for
review and approval.
The ADA provides in relevant part that executive branch officials may not
expend funds or enter into contracts that impose financial obligations on the
United States without express congressional authorization in appropriations
legislation. 31 U.S.C. § 1341(a)(1) (2000); see also id. §§ 1341–1342, 1349–1351,
1511–1519. Violations of the ADA—which enforces the Constitution’s directive
that “[n]o Money shall be drawn from the Treasury, but in Consequence of
Appropriations made by Law,” U.S. Const. art. I, § 9, cl. 7—require “appropriate
administrative discipline,” including possible reprimand, suspension without pay,
or removal from office, and, if the violation is knowing and willful, may result in a
fine or imprisonment. 31 U.S.C. §§ 1349(a), 1350.
To ensure that the President and Congress are made aware of violations of the
Act, Congress directed that “[i]f an officer or employee of an executive agency . . .
violates section 1341(a) or 1342 of this title, the head of the agency . . . shall report
immediately to the President and Congress all relevant facts and a statement of
actions taken.” 31 U.S.C. § 1351. Under the ADA, therefore, the heads of the
executive agencies bear responsibility for reporting violations of the ADA to the
President and Congress.
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Authority of HUD’s CFO to Submit Final Reports on Violations of Appropriations Laws
In 2003, Congress established specific additional parameters for HUD’s report-
ing of violations of the ADA and other statutes authorizing obligation of HUD
funds. In the Consolidated Appropriations Resolution for Fiscal Year 2003 (“FY
2003 Appropriations Act” or “2003 Act”), Congress subjected the appropriation of
funds for administrative and other expenses of HUD’s CFO to the following
conditions:
Provided further, That, notwithstanding any other provision of law,
hereafter, the Chief Financial Officer of the Department of Housing
and Urban Development shall, in consultation with the Budget Of-
ficer, have sole authority to investigate potential or actual violations
under the Anti-Deficiency Act (31 U.S.C. 1341 et seq.) and all other
statutes and regulations related to the obligation and expenditure of
funds made available in this, or any other Act; shall determine
whether violations exist; and shall submit final reports on violations
to the Secretary, the President, the Office of Management and Budg-
et and the Congress in accordance with applicable statutes and Of-
fice of Management and Budget circulars.
Pub. L. No. 108-7, 117 Stat. 11, 499 (2003) (emphasis added).
The question at issue focuses, first, on the relation between the reporting re-
quirements of the FY 2003 Appropriations Act and those of the ADA—in
particular, whether the 2003 Act vests HUD’s CFO with authority, independent of
the Secretary, to report ADA violations to the President and Congress. More
generally, in addressing your question, we must consider the relation between the
reporting authority of the CFO under the 2003 Act and the supervisory authority of
the Secretary of HUD, and ultimately of the President as the head of the Executive
Branch. The General Counsel of HUD has provided his view that the FY 2003
Appropriations Act does not nullify the ADA’s requirement that the “head of the
agency” inform the President and Congress of any ADA violations, or that, at a
minimum, the CFO’s reports must first be reviewed and approved by the Secre-
tary. See Letter for Jack L. Goldsmith III, Assistant Attorney General, Office of
Legal Counsel, from Richard A. Hauser, General Counsel, U.S. Department of
Housing and Urban Development (May 10, 2004). For the reasons set forth below,
we conclude that the FY 2003 Appropriations Act does require the CFO to report
to the President and Congress on violations of the ADA and other applicable
appropriations statutes, but that the CFO’s reports are subject to prior review and
approval by the Secretary or the President.1
1
We have not analyzed the question whether the reporting requirements set forth in the FY 2003
Appropriations Act are permanent requirements, but we are informed that HUD treats them as such. See
E-mail for Steffen N. Johnson, Attorney-Adviser, Office of Legal Counsel, from Camille E. Acevedo,
Associate General Counsel for Legislation and Regulations, Department of Housing and Urban
Development (July 22, 2004). See also FY 2003 Appropriations Act, 117 Stat. at 499 (conditioning
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Opinions of the Office of Legal Counsel in Volume 28
In the FY 2003 Appropriations Act, Congress directed the CFO to submit his
reports “in accordance with applicable statutes and Office of Management and
Budget circulars.” 117 Stat. at 499 (emphasis added). Among the “applicable
statutes” must be the ADA, 31 U.S.C. § 1351, which, as discussed above, imposes
on “the head of the agency,” rather than the CFO, the responsibility of reporting
ADA violations to the President and Congress. Chief among the applicable OMB
circulars is Circular A-11, which implements the requirements of the ADA for the
Executive Branch and specifies that reports of ADA violations are to take the form
of letters that shall be transmitted from the “agency head” to the President through
the Director of OMB. OMB Circular No. A-11, § 145.7 (2004). OMB Circular A-
11 also directs the agency to “report identical letters to the Speaker of the House of
Representatives and the President of the Senate,” and it specifies: “If the letters to
Congress are identical to the letter to the President, include a statement to this
effect in the letter to the President. If the letters to Congress are not identical to the
letter to the President, you will submit a copy of the letter to Congress with your
letter to the President.” Id. Thus, although the phrase “notwithstanding any other
provision of law” in the 2003 Act would generally override other laws to the
extent they interfere with the CFO’s exercise of his duties under the Act, that
phrase cannot be read to override the terms of the ADA and OMB Circular A-11
entirely, because the requirement in the same provision that the CFO submit his
final reports “in accordance with” applicable statutes and OMB circulars expressly
preserves the procedures prescribed by the ADA and Circular A-11. See Williams
v. Taylor, 529 U.S. 362, 364 (2000) (noting “the cardinal principle of statutory
construction that courts must give effect, if possible, to every clause and word of a
statute”).
On the other hand, the ADA and OMB Circular A-11 have general application
to the deficiency reports of all executive agencies, whereas the 2003 Act is specific
to HUD. It is a usual rule of construction that the specific statutory provision will
trump the general where they conflict or address the same concern. See Edmond v.
United States, 520 U.S. 651, 657 (1997) (“Ordinarily, where a specific provision
conflicts with a general one, the specific governs.”); Morales v. Trans World
Airlines, Inc., 504 U.S. 374, 384 (1992) (“[I]t is a commonplace of statutory
construction that the specific governs the general.”). It is unlikely, in our view, that
Congress intended to create two redundant reporting obligations for ADA
violations at HUD, one requiring a report to be submitted by the Secretary under
the general terms of the ADA and one requiring a separate and independent report
certain HUD appropriations on the requirement that the CFO “hereafter” submit final reports on
violations of the ADA and other appropriations statutes to the Secretary and the President as well as to
Congress); H.R. Rep. No. 108-235, at 77–78 (2003) (describing the changes made in the FY 2003
Appropriations Act as “permanent changes” and stating that they “permanently clarif[ied] responsibili-
ties within the Department for investigating and reporting on potential and actual violations of all
appropriations laws”).
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Authority of HUD’s CFO to Submit Final Reports on Violations of Appropriations Laws
to be submitted by the CFO under the specific terms of the 2003 Act. The
language in the 2003 Act requiring the CFO to “submit final reports on violations”
reinforces the view that only one report on a given violation is contemplated by the
statute. Accordingly, we conclude that the HUD-specific terms of the 2003 Act
were intended to assign to the CFO the duty of submitting reports to the President
and Congress with respect to violations at HUD of the ADA and other applicable
appropriations laws.
But it does not necessarily follow that, simply because the 2003 Act charges the
HUD CFO, rather than the Secretary of HUD, with the duty to submit final reports
on violations, the HUD CFO has independent and unreviewable authority to
prepare and submit final reports to the President and Congress without supervision
by the Secretary. The language of the 2003 Act does not require such a reading,
but rather is reasonably susceptible to the interpretation that the Secretary retains
his ordinary supervisory authority over the CFO, as reflected in the statute spelling
out the CFO’s authority and functions. See 31 U.S.C. § 902(a)(1) (2000) (the CFO
shall “report directly to the head of the agency regarding financial management
matters”). The need to avoid raising a significant constitutional problem requires
that we adopt this interpretation—i.e., that the CFO’s duty to prepare and submit
final reports under the 2003 Act, like his other duties, is subject to the ordinary
supervision of the Secretary, and ultimately of the President through the Secretary.
Accordingly, we conclude that although the CFO is assigned the responsibility for
submitting reports to the President and Congress on all violations of appropriations
laws at HUD, including the reports required by the ADA and OMB Circular A-11,
the CFO’s exercise of that duty is subject to prior review and approval by the
Secretary.2
This result follows from the rule of construction requiring that statutes be inter-
preted to avoid raising a significant constitutional problem, provided that doing so
does not contravene the clear meaning of the statute. See Solid Waste Agency of N.
Cook Cnty. v. Army Corps of Eng’rs, 531 U.S. 159, 173 (2001) (“[W]here an
otherwise acceptable construction of a statute would raise serious constitutional
problems, the Court will construe the statute to avoid such problems unless such
construction is plainly contrary to the intent of Congress.”) (quoting Edward J.
DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S.
568, 575 (1988)). Here, we conclude that it is most reasonable to construe the FY
2003 Appropriations Act to require supervisory review by the Secretary of the
CFO’s reports to the President and Congress because a contrary conclusion would
2
The legislative history does not elaborate on the relationship between the reporting requirements
of the ADA and those of the FY 2003 Appropriations Act. The House Conference Report, which
reflects the conferees’ adoption of the House version of the bill, references an earlier House report that
discusses HUD’s past difficulties in complying with the ADA, but neither document discusses the issue
of reporting in any depth. See H.R. Conf. Rep. No. 108-10, at 1427 (2003); H.R. Rep. No. 107-740, at
78–79 (2002).
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Opinions of the Office of Legal Counsel in Volume 28
raise serious constitutional problems by interfering with the President’s exercise of
his constitutional responsibility to supervise the unitary Executive Branch.
The President’s ability to supervise and control the work of subordinate officers
and employees of the Executive Branch, through his supervision of the principal
officers of the executive agencies, is vital to the exercise of his constitutional duty
faithfully to execute the laws. See U.S. Const. art. II, § 3 (providing that the Presi-
dent “shall take Care that the Laws be faithfully executed”). As we have elsewhere
explained:
The [judicial] decisions and the long practical history concerning the
right of the President to protect his control over the Executive
Branch are based on the fundamental principle that the President’s
relationship with his subordinates must be free from certain types of
interference from the coordinate branches of government in order to
permit the President effectively to carry out his constitutionally as-
signed responsibilities. The executive power resides in the President,
and he is obligated to “take care that the laws are faithfully execut-
ed.” In order to fulfill those responsibilities, the President must be
able to rely upon the faithful service of subordinate officials. To the
extent that Congress or the courts interfere with the President’s right
to control or receive effective service from his subordinates within
the Executive Branch, those other branches limit the ability of the
President to perform his constitutional function.
Constitutionality of Statute Requiring Executive Agency to Report Directly to
Congress, 6 Op. O.L.C. 632, 638–39 (1982).
Applying these general separation of powers principles, we have concluded that
statutory “requirement[s] that subordinate officials within the Executive Branch
submit reports directly to Congress, without any prior review by their superiors,
would greatly impair the right of the President to exercise his constitutionally
based right to control the Executive Branch,” and that statutory reporting require-
ments should generally be construed to avoid such a result. Id. at 633. Similarly,
we have concluded that inspectors general in the Executive Branch may not be
required to report information to Congress without review and approval by the
head of the relevant agency, explaining that “[r]eports of problems encountered . . .
may be required of the agencies in question, but . . . the statutory head of the
agency . . . must reserve the power of supervision over the contents of those
reports.” Inspector General Legislation, 1 Op. O.L.C. 16, 18 (1977). See also
Authority of the Special Counsel of the Merit Systems Protection Board to Litigate
and Submit Legislation to Congress, 8 Op. O.L.C. 30, 31 (1984) (“Congress may
not grant [Special Counsel] the authority to submit legislative proposals directly to
Congress without prior review and clearance by the President, or other appropriate
authority, without raising serious separation of powers concerns”). Thus, it would
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Authority of HUD’s CFO to Submit Final Reports on Violations of Appropriations Laws
be constitutionally problematic to interpret the FY 2003 Appropriations Act to
grant HUD’s CFO unreviewable authority to report to the President and Congress
concerning potential violations of the ADA and other appropriations laws.3
Because the plain terms of the 2003 Act, including its directive that reports be
submitted “in accordance with” applicable statutes and OMB circulars, do not
require such an interpretation, it must be avoided. The better reading of the statute
is that the reports prepared by the CFO must be subject to the review and approval
of the Secretary before they are finalized and submitted by the CFO to the
President and Congress.4
In summary, we conclude that the FY 2003 Appropriations Act does give the
CFO of HUD authority to report to the President and Congress on violations by the
agency of the ADA and other appropriations laws concerning expenditures, but
that he must first submit his reports to the Secretary for review and approval.
STEVEN G. BRADBURY
Principal Deputy Assistant Attorney General
Office of Legal Counsel
3
The same fundamental constitutional concern would be raised by a statute requiring a principal
officer like the Secretary to make a report directly to Congress without prior review and approval by the
President. We note that the ADA itself could be read to suggest such a requirement, though such a
problematic interpretation of the ADA is not required by the plain language of the statute. Of course,
the President, in his discretion, may permit the heads of departments to make simultaneous reports to
Congress when they report ADA violations to the President through OMB, and that is the policy
reflected in OMB Circular A-11.
4
Our conclusion is not altered by the fact that the FY 2003 Appropriations Act provides that the
CFO “shall . . . prescribe the content, format and other requirements for the submission of final reports
on violations; and . . . prescribe such additional policies and procedures as may be required for
conducting investigations of, and administering, processing, and reporting on, potential and actual
violations of the Anti-Deficiency Act and all other statutes and regulations governing the obligation and
expenditure of funds made available in this or any other Act.” FY 2003 Appropriations Act, 117 Stat. at
500. These responsibilities of the CFO do not foreclose a substantive role for the Secretary in
overseeing and directing the preparation of reports concerning violations of the appropriations laws.
Although the CFO is charged in the first instance with preparing the content of his reports and
establishing policies and procedures for reporting violations, we construe these responsibilities—like
the CFO’s other duties—to be subject to oversight by the President and the Secretary, for the reasons
discussed in the text.
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