Tennessee Valley Authority--False Claims Act Recoveries, B-281064, February 14, 2000

B-281064 Feb 14, 2000 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Inspector General of the Tennessee Valley Authority (TVA) questions the decision by the Department of Justice not to deposit into the TVA Fund the full amount of any recovery by the United States pursuant to the False Claims Act, including double and triple damages, but rather to turn over only funds representing TVA's actual losses and costs incurred in investigating the claim. GAO held that the TVA Act does not authorize TVA to deposit in the TVA Fund double and treble damages recovered under the False Claim Act, only those funds necessary to replace actual losses. View Decision Matter of: Tennessee Valley Authority--False Claims Act Recoveries File DIGEST   DECISION The Inspector General of the Tennessee Valley Authority (TVA) asks whether the TVA Act permits TVA to deposit in the TVA Fund the full amount of any recovery by the United States pursuant to the False Claims Act, 31 U.S.C. Sec. 3729, including double and treble damages. The False Claims Act authorizes the government to recover a civil penalty of $5,000 to $10,000, plus two or three times the amount of damages that the government sustained because of a false or fraudulent claim filed with the government. 31 U.S.C. Sec. 3729(a). Currently, the Department of Justice (Justice), which litigates all actions brought by the United States pursuant to the False Claims Act, turns over to TVA only single damages recovered in actions involving false claims filed with TVA. Justice deposits any double and treble damages into the U.S. Treasury pursuant to 31 U.S.C. Sec. 3302. For the reasons stated below, we conclude that the TVA Act does not authorize TVA to deposit double and treble damages into the TVA Fund. TVA should deposit into the Fund any recoveries of actual damages it incurred as a result of a false claim (i.e., single damages), as well as any costs it incurred in investigating the false claim. Background TVA was created by the Tennessee Valley Authority Act of 1933 (TVA Act), 16 U.S.C. Sec. 831. TVA, a wholly owned government corporation and instrumentality of the United States, supplies electric power to customers in seven states. It finances its operations using proceeds earned from the sale of power and borrowings. 16 U.S.C. Secs. 831n-4, 831y. The TVA Act requires that TVA charge rates for power that will produce sufficient revenues to provide funds for operation, maintenance, administration and other specified costs. 16 U.S.C. Sec. 831n-4(f). TVA deposits revenues into the TVA Fund. The Act, however, requires TVA to transfer to the U.S. Treasury any amounts excess to its operational needs. 16 U.S.C. Sec. 831y. The Act authorizes TVA to "sue and be sued in its corporate name." 16 U.S.C. Sec. 831c(b). Using this authority, TVA attorneys conduct all litigation on behalf of TVA except civil actions for false claims under the False Claims Act. Justice investigates violations of the False Claims Act and brings civil actions against persons who obtain payments from the government, including TVA, through false claims. The False Claims Act authorizes the government to recover a civil penalty of $5,000 to $10,000, plus double or treble the amount of damages sustained as a result of filing a false claim. 31 U.S.C. Sec. 3729(a). Currently, when Justice prevails in actions involving TVA losses from false claims, Justice remits to TVA for deposit in the TVA Fund that portion of a False Claims Act recovery that equals single damages, i.e., TVA's actual damages, to compensate TVA for its losses. Justice deposits the balance of double or treble damages into the general fund of the U.S. Treasury as miscellaneous receipts. TVA has asked Justice to transfer to TVA the entire amount of False Claims Act recoveries, including double and treble damages, not just single, or actual, damages. Justice has refused to do so absent a Comptroller General decision. If we conclude that TVA may not receive the entire amount of any False Claims Act recovery, TVA asks us to consider whether TVA may recover, as a reimbursement to the TVA Fund, its administrative costs in investigating a false claim, as well as actual damages. TVA notes that although Justice brings the civil action on behalf of TVA, TVA incurs investigative costs related to the false claim. Discussion In the absence of specific statutory authority, an agency must deposit moneys received for the use of the United States into the general fund of the Treasury as miscellaneous receipts. 31 U.S.C. Sec. 3302. There are two exceptions to this requirement: (1) where an agency is specifically authorized to retain moneys it collects, and (2) where the moneys received qualify as refunds to appropriations. 69 Comp. Gen. 260, 261-262 (1990). In these instances, an agency can deposit the moneys into an appropriation account or fund for subsequent obligation and expenditure. 62 Comp. Gen. 678, 679 (1983).