SUBJECT: Follow-Up Questions on the Use of Gift and Trust Funds. It is my understanding that the subcommittee on legislative appropriations has asked for a more detailed explanation of the procurement procedures the Library applies to gift and trust funds. The following is submitted in response to the request and the specific questions that are now raised by the subcommittee: Question: Is the expenditure of these gift funds subject to the normal procurement regulations as are appropriated funds? The Library considers gift and trust funds to be "public" monies and subject to the same procurement regulations applicable to appropriated funds. A review of Comptroller General Decisions and the advice given by the General Accounting Office (GAO) on the use of gift and trust funds supports this position. The GAO has indicated that federal officials often conclude that merely because the souce or funding is private rather than appropriated, there is no requirement to follow regulations applicable to appropriated funds. What appears to be the early decision leading to this simple, but misleading, conclusion by federal officials was set out in an opinion of the Comptroller General in 1937: "Where the Congress authorized Federal officers 16 Comp. Gen. 650, 655 (January BUY U.S. SAVINGS BONDS THROUGH THE PAYROLL PLAN 2 While this statement correctly sets out what has come to be known as the "trust theory," the GAO has instructed that agencies have sometimes misconstrued it to mean that they have free and unrestricted use of donated funds. "This is not the case...," warns GAO. "On the one hand, donated funds are not subject to all of restrictions applicable to direct appropriations. Yet, on the other hand, they are still 'public funds' in a very real sense. They can be used only in furtherance of authorized agency purposes and incident to the terms of the trust." [See Principles of Federal Appropriations Law, 2nd ed., GAO, December 1992, page 6-144, citing Comp. Gen. decision B-195492, March 18, 1980.] The GAO has been willing to rely on the discretion of agency officials to determine when expenditures are in furtherance of official purposes, but this agency discretion concept does not mean that agencies have blanket authority to use gift or trust funds for personal purposes; each agency must justify its use of these funds as incident to the terms of the trust. For the most part, the Library, when carrying out the public purposes of a gift or trust fund has been able to do so by following statutes and regulations pertaining to appropriated funds. Consider: On a regular basis, the Library hires consultants under gift or trust funds, and in so doing, it follows standard procurement procedures. If by having to follow such statutes and regulations, the purpose of the fund is frustrated or not possible to accomplish, the GAO has allowed that the "public" nature of these gift or trust monies may be ignored: "It is true that under some circumstances, we May 3, 1976 As a rule, the GAO will look for some language in the gift or trust, itself, that permits the trustee to ignore general regulatory and prohibitory statutes or regulations applicable to public funds when such problems develop. It is not clear from a reading of GAO decisions, however, what position the Comptroller General would take if a gift instrument were silent with respect to such language. For this reason, I have advised since 1976 that specific language be included in all gift instruments when the Library has advance knowledge of a proposed gift or trust or where the Library has been asked by a prospective donor or his/her/its representative to suggest other provisions for the donative letter or instrument. - 3 For Library officials, I have summarized my advice on these matters as follows: 1. Although they come from private sources, gift and trust funds are still "public" monies once accepted under a federal statutory authority. In the Library's case, 2 U.S.C. 156, 160. 2. Accordingly, the Library always should consider first following those rules and regulations applicable to the expenditure of appropriated funds. These rules and regulations are structured to accomplish the Library's needs, but they are often intended to serve several other public purposes as well; for example: assuring equal competition opportunity, minimizing costs to the Government, and providing for uniform accountability. 3. Where, however, following rules and regulations applicable to appropriated funds would interfere with or frustrate the purposes of a gift or trust fund (as, for example, where a regulation precludes printing in a certain style or precludes the Library from meeting a required time reporting deadline under a grant), then the Library may follow the direction provided by the Comptroller General and ignore those rules or regulations which preclude meeting conditions of a gift or trust. 4. In order for the Library to do so, however, the gift or trust fund used must have as a condition of the gift or trust such language as would permit the Library to so ignore those rules and regulations. The standard language recommended by the Library is taken directly from the Comptroller General decision first set out above, 16 Comp. Gen. 650 (1937). Where the language identified in point no. 4, above, is not present (as, for example where the fund was established under a bequest in a will, and there had been no communication with the Library during the life of the testator/testatrix), I have advised Library officers that before they can ignore applicable rules or regulations, they must establish a strong record and argument that the purposes of the gift or trust will be frustrated if the Library is required to follow regulations applicable to appropriated funds. To my knowledge, Library officers have not had to establish such a record. Either they followed federal regulations, or they made use of funds whose gift or trust instruments contained the language advised by the Comptroller General. A second question now raised is: Is the expenditure of these gift funds subject to the identical procurement and financial management regulations as all other appropriated funds? If not identical, please outline the differences. Federal procurement regulations are set out in the Federal Acquisition Regulation (FAR) and the Federal Information Resources Management Regulation (FIRMR). There are no other federal regulations, and the Library's regulations (LCR 1614-2) indicate that the Library follows both, although by statute the FAR applies only to executive agencies. Our regulation requires that any exceptions must be documented by use of a Determination and Finding (FAR, Subpart 1.7) and approved by the Library's Senior Procurement Officer. It is clear that even for exceptions, then, the Library follows the FAR. The procedures set out in the Library's financial services regulation (LCR 1510) apply equally to both appropriated and gift or trust fund activities. POLICE STAFFING Mr. PACKARD. I have one last question, and that is, in your integrated support services, you call for 19 additional police officers to staff pedestrian entrances. Are those entrances not now staffed? And if so, why do you need additional policemen? Dr. BILLINGTON. They are staffed, but with the additional security measures, it is going to require inspection coming in as well as inspection going out. Because we are simultaneously reopening the Jefferson Building with a permanent exhibit of the Treasures of America, which will invite lots of people in. I know that we are all excited about the beautiful restoration that the Congress has made possible of that building. We are going to share it with the American public much more fully at the same time that we increase security in a building that was never built for security in the first place. It is a combination of reopening of the Jefferson Building with much more increased public usage and the need to tighten up various weak points that have been identified in the CSC study, and in our own security analyses that accounts for the bulk of the request. Installation of the metal detectors and x-ray machines at building entrances requires police to operate the metal detectors. Contract personnel will operate the actual x-ray equipment. We are not using police for everything. The Library now has 110 police positions and of the 18 entrances to the three Library buildings, 10 are open throughout the work day, two Madison Building entrances are open during only peak traffic periods and six are closed. This is what we need to bring it up to speed. Mr. PACKARD. Will they be trained at the same level as your Capitol Hill police? Dr. BILLINGTON. The whole purpose of merging the two is to bring the training level into uniformity. And also it is not just building security, but also personnel security. We must inspect people's belongings coming in as well. Mr. PACKARD. I have some questions I will submit to be answered for the record. [The questions and responses follow:] Question. Another item in this appropriation, carried under Integrated Support Services, is for 19 additional policemen to staff pedestrian entrances. We understand that all the entrances are already staffed. Why are 19 additional police personnel needed? Response. The additional positions are needed to permit operation of metal detectors and x-ray machines at building entrances. These devices are necessary as an anti-crime, anti-terrorism measure. The Library placed metal detectors in service on a trial basis in late 1994 and found that additional staffing is needed to avoid excessive delays for persons entering the Library. The concurrent use of metal detectors and x-ray machines assures adequate screening and avoids lengthy delays. The additional Library Police are needed to control the movement of persons being screened and to deal authoritatively with alarm conditions that cannot be quickly resolved. The Library intends to use contract personnel to view the x-ray display screens. Question. Library Police personnel are compensated at the same level as the Capitol Police. Is their training the same? Do they have the same arrest and law enforcement authority? Response. Basic training requirements for the Library Police differ from those for the Capitol Police in part because the Library requires that candidates for employment have 18 months of prior experience as a police officer. The Capitol Police do |