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OGC-83-11 1 (1983-05-05)

handle is hein.gao/gaobabmyy0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTOND.C. 20649 B-038May 5, 1983 jf~ 111 To the President of the Senate and the 121375 Speaker of the House of Representatives This letter reports a deferral in budget authority provided for the Strategic Petroleum Reserve petroleum account which should have been, but was not, reported to the Congress pursuant to the provisions of the Impoundment Control Act, 2 U.S.C.A. SS 681 et seq. The funds involved are used for petroleum acquisition, transportation, and injection activi- ties for the Strategic Petroleum Reserve (SPR). A total of $4.5 billion is available in the SPR account for oil deliv- eries in fiscal year 1983. We estimate that, at current prices, approximately $800 million in the SPR account will remain unobligated in fiscal year 1983. Our estimate of the amount deferred is based on our calculation of the amount of funds that will not be used if the President continues to fill the SPR at the current rate for the rest of fiscal year 1983 and carries out current plans to enter into contracts in fis- cal year 1983 for oil delivery in-the first 6 months of fiscal year 1984. Our calculations are set out in the enclosure to this report. The Office of Management and Budget (OMB) recently sub- mitted to our Office a memorandum addressing several issues related to the SPR fill rate. In the memorandum, OMB main- tained that there are difficulties with applying the Impound- ment Control Act to the SPR funds. First, our estimate of the amount deferred includes certain funds transferred by the Department of Energy (DOE) to the Defense Fuel Supply Center (DFSC), DOE's agent for purchasing oil. The funds involved are recorded as obligations by DOE upon transfer to DFSC, which is authorized to commit the funds for oil purchases as directed by DOE. In our deferral report, we include the amount of funds so transferred to DFSC that DFSC has not yet committed to oil purchases. In its memorandum, OMB argued that the effect on the funds transferred to DFSC of congres- sional disapproval of the SPR deferral would be unclear, because those funds already are obligated by DOE. In our view, the Impoundment Control Act requires reporting as part of the deferral of SPR funds, the funds obligated by DOE and transferred to DFSC, but uncommitted to oil purchases. Section 1011(1)(A) of the Impoundment Control Act defines deferral of budget authority to include-- GAO/OGC-83-11 3 / 57 3

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