B-308010, Department of Agriculture--Cooperative Agreement for Use of Aircraft, April 20, 2007

B-308010 Apr 20, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Animal and Plant Health Inspection Service (APHIS), a division in the U.S. Department of Agriculture, did not violate the bona fide needs rule when it used fiscal year 2000 funds to facilitate purchase of an aircraft as part of a cooperative agreement. APHIS had the authority to enter into a cooperative agreement with Wyoming Woolgrowers Association (WWGA), but made the payments prior to a written cooperative agreement. We do not endorse APHIS's actions in expending federal funds prior to executing a cooperative agreement and remind APHIS of its duty to protect government funds from potential loss. View Decision B-308010, Department of Agriculture--Cooperative Agreement for Use of Aircraft, April 20, 2007 Decision Matter of: Department of Agriculture—Cooperative Agreement for Use of Aircraft File: B-308010 Date: April 20, 2007 DIGEST The Animal and Plant Health Inspection Service (APHIS), a division in the U.S. Department of Agriculture, did not violate the bona fide needs rule when it used fiscal year 2000 funds to facilitate purchase of an aircraft as part of a cooperative agreement. APHIS had the authority to enter into a cooperative agreement with Wyoming Woolgrowers Association (WWGA), but made the payments prior to a written cooperative agreement. We do not endorse APHIS's actions in expending federal funds prior to executing a cooperative agreement and remind APHIS of its duty to protect government funds from potential loss. DECISION The Inspector General (IG), U.S. Department of Agriculture (USDA), asked whether expenditures of appropriated funds by the Wildlife Services (WS) program office of the Animal and Plant Health Inspection Service (APHIS) violated the bona fide needs rule. Letter from David R. Gray, Counsel to the Inspector General, USDA, to Anthony Gamboa, General Counsel, GAO, May 30, 2006 (Request Letter). In August and December 2000, APHIS made payments to an aircraft owner to facilitate a purchase agreement between the owner and an industry group, Wyoming Woolgrowers Association (WWGA). Id.In August 2000, WWGA purchased the aircraft in anticipation of entering into a cooperative agreement with APHIS for use of the aircraft by WS for its wildlife predation program. Id. For reasons explained below, APHIS did not violate the bona fide needs rule when it obligated and subsequently expended fiscal year (FY) 2000 funds to facilitate WWGA's purchase of the aircraft. The purchase agreement between WWGA and the aircraft owner credited a portion of APHIS's payment as reimbursements for past modifications to the aircraft in 1999, which the aircraft owner had made on his own initiative. While APHIS's payments reflected the costs the owner had incurred when he made the modifications, APHIS had neither instructed the owner to make modifications nor was the payment made to induce the owner into making the modifications. APHIS was making payments to the owner to defray a portion of WWGA's purchase price of the aircraft as measured by the cost of the 1999 modifications. Also, APHIS had the authority to enter into a cooperative agreement for use of the aircraft, but APHIS should have definitized and executed its agreement with WWGA prior to paying part of the purchase price of the aircraft. Otherwise, APHIS risked losing the money it had paid to the aircraft owner on WWGA's behalf. However, sufficient evidence exists that at the time APHIS made the payments, APHIS and WWGA had already agreed to cooperate in the purchase and subsequent exclusive use of the aircraft by APHIS. We, however, do not endorse APHIS's actions in expending federal funds prior to executing a written cooperative agreement and we remind APHIS that it is the duty of all agencies to protect government funds from potential loss. Our practice when rendering decisions is to obtain the views of the relevant federal agency to establish a factual record and to elicit the agency's legal position in the matter. GAO, Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006), available at http://www.gao.gov/legal.htm. In this case, the Agriculture Department's General Counsel provided us with a copy of a May 2005 legal opinion in this matter that was prepared for the WS program office. USDA, Office of the General Counsel Memorandum for William H. Clay, Deputy Administrator, Wildlife Services, Review of Wildlife Services Aircraft Expenditures for Violations of Appropriations Law, May 24, 2005 (GC Memo). BACKGROUND APHIS conducts programs, through its WS office, to eradicate and control predatory and other injurious wild animals for the protection of domestic livestock. GC Memo, at 1. WS cooperates with states and other cooperators, including industry groups, wherein both parties provide resources to meet the objectives of the program.