Impoundment Control

This letter reports an impoundment of Defense Department (DOD) budget authority that should have been but was not reported to Congress by the President under the Impoundment Control Act. GAO believes that DOD's failure to release $790 million in funds for the V-22 Osprey program is not traceable to programmatic delays. When Congress appropriated new funds for the V-22, it was well aware of the aircraft's developmental problems and expected the Pentagon to embark on a program to correct them and produce prototype aircraft. DOD's lack of confidence in its ability to satisfy legislative time frames does not relieve DOD from trying to obligate funds in faithful execution of this legislatively mandated program. DOD's position is that the funds are not and will not be available for obligation until restrictive statutory conditions are changed, which suggests that the funds will be withheld until they expire. GAO, believing that this action should have been reported as a proposed rescission, is alerting Congress of the unreported withholding of budget authority. Under law, this impoundment report permits the withholding to continue for 45 legislative days unless Congress disapproves the proposal earlier; the 45-day period expires on August 3, 1992.

GAO found that DOD: (1) lack of confidence in its ability to fully satisfy the statutory objectives for obligating V-22 funds does not free it from its obligation to use its best efforts to obligate funds in faithful execution of the legislatively mandated program; and (2) assertions that the issue is devoid of any Impoundment Control Act implications, and past DOD attempts to retard the V-22 Program through unauthorized withholdings, reflect DOD intent to reserve funds that should have been, but were not, proposed for rescission.