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GAO-02-932R 1 (2002-07-26)

handle is hein.gao/gaobaamak0001 and id is 1 raw text is: 


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       Accountability * Integrity * Reliability
United States General Accounting Office
Washington, DC 20548


         July 26, 2002

         The Honorable Rita R. Colwell
         Director
         National Science Foundation

         Subject: National Science Foundation's Compliance With the Inflation
                  Adjustment Act

         Dear Dr. Colwell:

         Earlier this year, we initiated a governmentwide review of the implementation of the
         Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (Inflation
         Adjustment Act).' The Inflation Adjustment Act required each federal agency to issue
         a regulation adjusting its covered maximum civil monetary penalties for inflation by
         October 23, 1996, and to make necessary adjustments at least once every 4 years
         thereafter. During our review, we determined that the National Science Foundation
         (NSF) had adjusted its maximum civil penalties more than the act permits. This
         report is intended to bring this matter to your attention and to recommend corrective
         action.

         NSF Adjusted Its Civil Penalties More Than
         The Inflation Adjustment Act Permitted

         The Inflation Adjustment Act defines a cost-of-living adjustment as the percentage
         change in the Consumer Price Index (CPI) between June of the calendar year in
         which the penalty was last set or adjusted pursuant to law and June of the calendar
         year preceding the adjustment (i.e., June 1995 for the first adjustment required in
         October 1996). The statute limited an agency's first round of civil penalty
         adjustments to 10 percent, and any subsequent adjustments to changes in the CPI
         since the last adjustment.

         On November 20, 1996, NSF published a final rule that adjusted its civil monetary
         penalties under the Antarctic Conservation Act of 1978 (16 U.S.C. 2407) in two steps.'
         First, the agency adjusted the civil penalties by 10 percent, which increased the

         'The Inflation Adjustment Act is codified at 28 U.S.C. 2461 note. The 1990 act was amended in 1996 by
         the Debt Collection Improvement Act, which added the requirement for agencies to adjust their civil
         penalties by regulation (Pub. Law 104-134, Sec. 31001, 110 Stat. 1321-373).
         2NSF did not submit this rule to the Congress and the Comptroller General as required by 5 U.S.C.
         801(a), so it did not take effect. NSF published another rule on June 16, 1998, that replaced the 1996
         rule and made the same adjustments, except that the $23,000 penalty for intentional violations was
         increased to $25,000.


GAO-02-932R NSF Penalty Adjustments

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