B-305484, National Mediation Board--Compensating Neutral Arbitrators Appointed to Grievance Adjustment Boards Under the Railway Labor Act, June 2, 2006

B-305484 Jun 02, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The National Mediation Board (NMB) incurs an obligation when it appoints a neutral arbitrator to a grievance adjustment board to hear a specific case or a specified group of related cases. The Antideficiency Act requires that NMB have an appropriation available to cover the estimated costs of the arbitrator at the time it incurs the obligation. 31 U.S.C. 1341(a). To protect itself from violating the Antideficiency Act, NMB could cap its liability at the time of obligation based on its best estimate of its legal liability. As more information becomes known during the fiscal year, NMB could adjust the cap upwards if it has available unobligated balances. View Decision B-305484, National Mediation Board--Compensating Neutral Arbitrators Appointed to Grievance Adjustment Boards Under the Railway Labor Act, June 2, 2006 Decision Matter of: National Mediation Board—Compensating Neutral Arbitrators Appointed to Grievance Adjustment Boards Under the Railway Labor Act File: B-305484 Date: June 2, 2006 DIGESTS (1) The National Mediation Board (NMB) incurs an obligation when it appoints a neutral arbitrator to a grievance adjustment board to hear a specific case or a specified group of related cases. To comply with the Antideficiency Act, NMB must have an appropriation available to cover the estimated costs of the arbitrator at the time it incurs the obligation. 31 U.S.C. sect. 1341(a). Because NMB does not control the number of days an arbitrator will work before submitting an award, NMB should record an obligation based on its best estimate of the costs of paying the arbitrator and adjust the obligation up or down as more information becomes available. NMB should liquidate the obligation from the appropriation current at the time NMB incurs the obligation, notwithstanding that the arbitrator's performance may extend into the next fiscal year. To the extent we indicated in two prior decisions, B-217475, Dec. 24, 1986, and B-217475, May 5, 1986, that NMB may record obligations monthly based on the anticipated expenditures it approves in monthly compensation requests, they are overruled. (2) An availability of funds clause is not sufficient to protect NMB from violating the Antideficiency Act. The obligation to pay an arbitrator arises at the time of appointment in the full amount of the liability incurred, and NMB must have an appropriation available at that time to pay the full cost. (3) Pending cases to which NMB has not yet appointed an arbitrator constitute a contingent liability of NMB. Contingent liabilities are not recordable as obligations until the contingency actually materializes. (4) NMB will violate the Antideficiency Act if it appoints an arbitrator to a new or existing board and incurs an obligation in excess of its apportionment or any other subdivision of funds as specified in its administrative fund control regulations. If NMB does not have an administrative fund control system, it should work with the Office of Management and Budget to establish one. (5) NMB does not incur an obligation to pay a neutral arbitrator when the parties to a grievance enter into an agreement to form a Special Board of Adjustment or Public Law Board. NMB may anticipate eventually appointing an arbitrator to hear these cases, but it is the appointment of the arbitrator by an authorized NMB official, not the organization of the Special Board of Adjustment or Public Law Board, that is the obligating event for NMB. (6) When NMB appoints an arbitrator to a Special Board of Adjustment or a Public Law Board, the appointment does not constitute an open-ended contract to pay the arbitrator for cases referred to the Special Board of Adjustment or the Public Law Board subsequent to the appointment. The addition of a new case constitutes a new arbitrator appointment and a new obligation. DECISION Pursuant to 31 U.S.C. sect. 3529, the National Mediation Board (NMB) requested our views regarding when it incurs an obligation to pay neutral arbitrators it appoints to hear cases on a grievance adjustment board, and in what amount. We conclude that NMB incurs an obligation when it appoints a neutral arbitrator to a grievance adjustment board. The Antideficiency Act requires that NMB have an appropriation available to cover the estimated costs of the arbitrator at the time it incurs the obligation. 31 U.S.C. sect. 1341(a). Because NMB does not control the number of days an arbitrator will work before submitting an award, NMB should record an obligation based on its best estimate of the costs of paying the arbitrator and adjust the obligation up or down as more information becomes available. NMB should liquidate the obligation from the appropriation current at the time NMB incurs the obligation, notwithstanding that the arbitrator's performance may extend into the next fiscal year.