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B-189443 1 (1980-08-04)

handle is hein.gao/gaobabjvb0001 and id is 1 raw text is: .z UNITED STATES GENERAL ACCOUNTING OFFICE / V/-' _ --* WASHINGTON, D.C. 20548 OFFCE OF GENERAL COUNSEL August 4, 1980 B-189443 The Honorable A. Vernon Weaver, Jr. Administrator, Small Business Administration 1 Dear Mr. Weaver: Some time ago theiDepartment of Justice asked us to certify the ompromise settlements and judgments f in three .5 44 'i J suits to which the Small Business Administration (SBA) was party.2_ 4'The case of Joan M. Brown v. SBA involved a compromise settlement under the Federal Tort Claims Act, 28 U.S.C. § 2677, and Rosemary E. Twiggs v. SBA involved judgment for costs in an action under Title VII of the Civil Rights Act of 1964, as amended. In the third case- Mucavil, Inc. v. Jerry Derby-SBA had been joined as a third party defendant under a deferred participation agreement with a bank, in a suit against the bank for the wrongful sale of loan collateral.! Upon our informal inquiry,SBA officials advised us that SBA's practice has been to pay judgments and settlements arising from SBA's activities from SBA funds on the theory that such payments were necessary program expenditures. It is unclear why Justice departed from the past practice and sent these cases to us for payment. However, at Justice's Urging n the Mucavil case, in order to avoid jeopardizing the compromise agreement because of delay, we certified that settlement and the other two for payment from the permanent indefinite appropriation for judgments pro- vided for in 31 U.S.C. § 724a (1976). ,-The statutory provisions governing SBA do not expressly provide for the payment of judgments or compromise settlements. However, SBA receives two distinct kinds of appropriations. 0ne appropria- tion is for Salaries and Expenses and is generally used to fund the cost of administering SBA's various programs. The other appro- priation authorizes SBA to make expenditures from various revolving funds under its jurisdiction. These expenditures are made within the limits of the funds and borrowing authority available to them, with those arounts often being adjusted in the annual appropriation acts. Those revolving funds include the Disaster Loan Fund, the Business Loan and Investment Fund, the Lease Guarantees Revolving Fund, the Pollution Control Equipment Contract Guarantees Revolv- ing Fund, and the Surety Bond Guarantees Revolving Fund.

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