Emergency-designated funds do not have to compete for scarce resources  that are constrained by budget controls. Increased Use of Supplementals is Largely Attributable to Defense Funding

As figure 1 showed, the use of supplementals has increased over the last  several years. Over the 10-year period from fiscal year 1997 through fiscal  year 2006, 25 supplemental appropriations laws were enacted providing  about $612 billion ($557 billion net of rescissions) in new gross budget  authority. Ninety-five percent of the total supplemental funds were appropriated to  11 departments, with the DOD receiving nearly 60 percent of the total (see  fig. When  the emergency-designated provisions were analyzed by the type of  emergency prompting the need for the supplemental, not surprisingly,  defense-related emergencies received over 50 percent of the funds. In comparison, 28 percent was directed to respond to  natural or economic disasters and 16 percent went to antiterror, security,  and post-9/11 activities. International humanitarian assistance, pandemic  influenza, and other activities comprised 3 percent of the total emergency- designated supplemental funds provided over the 10-year period we  studied. Additional Controls Could Reduce the Use of Supplementals and Increase Opportunities for Oversight

Our analysis indicates that there are a number of issues to be addressed if  the use of supplementals is to be limited to needs identified after the  beginning of the fiscal year. Although Congress has specified criteria for  the emergency designation in Budget Resolutions, these criteria are not  self-executing and there are limited screening and enforcement processes. Such funds provide agencies with great flexibility but do not prompt the  annual or periodic Congressional review and reconsideration typical of  funds that are available for a limited amount of time. In our review of emergency-designated supplemental  provisions enacted from fiscal years 1997 through 2006, we found  provisions that were not clearly consistent with these criteria as well as  provisions that did not contain sufficient information for us to make a  determination. Some have questioned the use of the  emergency designation for the funds provided for the ongoing military  operations related to GWOT—noting that it is problematic for an ongoing  event to be considered “sudden” or “unforeseen.” However, we do not  address this in our analysis, because Congress has provided that some of  the funds for overseas contingency operations related to GWOT can be  designated emergency and are exempt from certain points of order and  other budget enforcement provisions. In our review of supplementals over the 10-year period, we found that 35  accounts received supplemental appropriations in at least 6 of the 10 years  studied, totaling over $375 billion. The majority of these accounts fell  within DOD. In addition,  the gross budget authority granted to these 21 DOD accounts ($258 billion)  comprised over 40 percent of the total gross budget authority in  supplemental appropriations enacted over the studied period. Some funds are available until expended (referred to as  “no-year” funding). These experts generally agreed that reform was  needed but differed on how best to achieve this. Second, our analysis showed that some supplementals contain emergency- designated provisions not related to the event/issue(s) that may have  prompted the need for the supplemental. This raises questions as to  whether “emergency” supplementals are not always used just to meet the  needs of unforeseen emergencies but also include funding for activities  that could be covered in regular appropriations acts, if funded at all. Over the 10-year period we examined, over one-third of the supplemental  appropriations enacted were no-year funds. Therefore, controls should be in place to ensure  that emergency supplementals are enacted for their intended purpose—to  address unforeseen needs that arise suddenly after the start of a fiscal  year. Appendix I: Objectives, Scope, and Methodology

The objectives for this report were to evaluate (1) trends in supplemental  appropriations enacted from fiscal years 1997–2006 and (2) steps that  could be taken to increase transparency and establish additional controls  over emergency supplemental appropriations. B— Emergency  Supplemental Act,  2000)
Defense  Appropriations  Act, 2001 (Title  IX—Additional  Fiscal Year 2000  Emergency  Supplemental  Appropriations for  the Department of  Defense)
Supplemental  Appropriations Act  for Recovery from  and Response to  Terrorist Attacks  on the United  States  Defense and  Emergency  Supplemental  Appropriations for  Recovery from  and Response to  Terrorist Attacks  on the United  States, 2002 (2nd  $20 billion - 9/11  attacks)
Wartime  Supplemental  Appropriations  Act, 2003  Supplemental for  Disaster Relief  Act, 2003  Branch, 2003  (Title III— Emergency  Supplemental  Appropriations  Act, 2003)
Supplemental  Appropriations Act  for Defense, the  Global War on  Terror, and  Tsunami Relief,  2005  Interior,  Environment and  Related Agencies  Appropriations  Act, 2006 (Title  VI—Veterans  Health Care)
Supplemental  Appropriations Act  for Defense, the  Global War on  Terror, and  Hurricane  Recovery, 2006  of Defense  Appropriations  Act, 2007 (Title  X— Fiscal Year  2006 Wildland Fire  Emergency  Appropriations)

Appendix III: GAO Contacts and Staff Acknowledgments

	GAO Contact

	Acknowledgments

In addition to the individual listed above, Carol Henn, Assistant Director;  Tiffany Mostert; Elizabeth Hosler; Farahnaaz Khakoo; and John Stradling  made significant contributions to this report.
Why GAO Did This Study

Supplemental appropriations laws (supplementals) are a tool for policymakers to address needs that arise after the fiscal year has begun. Supplementals provide important and necessary flexibility but some have questioned whether supplementals are used just to meet the needs of unforeseen events or whether they also include funding for activities that could be covered in regular appropriations acts. GAO was asked to evaluate (1) trends in supplemental appropriations enacted from fiscal years 1997-2006 and (2) steps that could be taken to increase transparency and establish additional controls over emergency supplemental appropriations. Also, GAO consulted with budget experts to discuss options for reform.

What GAO Found

The use of supplementals has increased over the last several years, largely as a result of an increase in Department of Defense (DOD) funding and the use of supplementals to provide that funding for activities such as the Global War on Terrorism (GWOT). Over the 10-year period from fiscal year 1997 through fiscal year 2006, supplemental appropriations provided about $612 billion ($557 billion net of rescissions) in new gross budget authority, a five-fold increase over the previous 10-year period. Ninety-five percent of the total supplemental funds were appropriated to 11 departments, with DOD receiving nearly 60 percent of the total. Further, an analysis of the type of emergency prompting the need for the supplemental shows that defense-related emergencies received over 50 percent of the emergency-designated funds. In comparison, 28 percent was to respond to natural or economic disasters and 16 percent went to antiterror, security, and post-9/11 activities. International humanitarian assistance, pandemic influenza, and other activities comprised 3 percent of the total emergency-designated supplemental funds provided over the 10-year period. The majority of the supplemental funds appropriated over this 10-year period were designated as emergency. Emergency-designated funds do not have to compete for scarce resources that are constrained by budget controls. Although Congress has specified criteria for the emergency designation in Budget Resolutions, these criteria are not self-executing and there are limited screening and enforcement processes. The increased use of supplementals raises questions about the current incentives and controls surrounding their use. GAO reviewed emergency-designated supplementals and found provisions that were not clearly consistent with emergency designation criteria or did not contain sufficient information for us to make a determination. Also, GAO identified provisions that raise questions about whether supplemental appropriations bills can become vehicles for funding some activities that could be covered in the regular budget and appropriations process. For example, we found $710 million in emergency-designated provisions that appeared to be unrelated to the event/issue(s) that may have prompted the supplemental. In addition, we found that 35 accounts received supplemental appropriations in at least 6 of the 10 years studied, totaling over $375 billion. Twenty-one of these accounts were in DOD and the gross budget authority granted to these 21 accounts ($258 billion) comprised over 40 percent of the total gross budget authority in the supplemental appropriations enacted over the studied period. Finally, over one-third of the supplemental appropriations enacted were available until expended ("no-year" funds). Such no-year funds provide agencies with important flexibility but do not prompt the annual or periodic Congressional oversight typical of funds that are available for a fixed amount of time. If the use of supplemental appropriations is to be limited to addressing unforeseen needs that arise suddenly after the start of a fiscal year, additional controls and increased transparency are needed. Budget experts GAO consulted generally agreed reform was needed but differed on how best to achieve this.