About 15 Percent of DOJ’s Total Budgetary Resources Comes from Alternative Sources of Funding, and Laws Specific to Each Source Determine How Funds Should Be Obligated

Seven alternative sources of funding made up approximately 15 percent  of DOJ’s total budgetary resources in fiscal year 2013, and different  legislative requirements affect the agency’s flexibility in using these funds. Specifically, DOJ had about $4.3 billion in collections from seven major  alternative sources of funding in 2013, and generally used this funding for  related program costs. In addition, agency flexibility regarding using the  seven funding sources varied with laws specifying funding purposes,  amounts, and availability. In addition to collections that DOJ had the authority to use, in fiscal year  2013, DOJ received deposits of about $1.6 billion from two of the seven  alternative sources of funding that were by law not available for the  department to obligate, and therefore not counted as a budgetary  resource. Crime Victims Fund: Criminal fines and penalties collected from  offenders, among other sources, are deposited in the CVF. DOJ Can Improve the Management of Unobligated Balances of Selected Alternative Sources of Funding

Selected alternative sources of funding have growing unobligated  balances, some of which could benefit from improved management. DOJ Could Improve Transparency in Fingerprint Checks Fees and Determine Appropriate Size of Unobligated Balances

According to DOJ-provided data, in fiscal years 2009 through 2013, the  FBI’s CJIS Division collected on average about $385 million per year in  fingerprint checks fees. The two portions of the fee have different statutory requirements. The automation portion of the fee is no-year money that can be carried  over from year to year. When including balances from fiscal years prior to  2009, the CVF had a temporarily unavailable balance—composed of  funds received in excess of obligations made—of nearly $9 billion at the  end of fiscal year 2013. Specifically, during the annual appropriations process, the  CVF balance unavailable for obligation by DOJ during the year counts as  a “savings.” Consistent with scorekeeping guidelines used during the  congressional budget process, this savings resulted in DOJ reporting a  lower level of net budget authority because the unavailable CVF balance   For example,  is applied as a credit to DOJ’s total discretionary budget.in fiscal year 2013,
DOJ received about $25 billion in enacted total discretionary budget  authority according to DOJ’s congressional budget justification. Conclusions

The seven major sources of DOJ’s alternative funding bring in more than  $3 billion annually. By developing a policy to analyze unobligated balances from the Three  Percent Fund, DOJ could better manage balances to ensure efficient and  effective use of resources to support program activities. In addition, CJIS  is missing opportunities for meaningful feedback that could affect the  outcome of changes in fees and program implementation by not  transparently communicating with stakeholders and customers the  breakout of cost recovery and automation fees. DOJ also provided various reasons why it does not query or calculate  revenue estimates. DOJ concurred with our third recommendation, which called for the FBI to  develop a policy to analyze the unobligated balances coming from the  automation portion of the CJIS fingerprint checks fees and establish a  range of appropriate carryover amounts to support program needs. For six of  the seven alternative sources of funding—the Assets Forfeiture Fund, the  Crime Victims Fund, the Diversion Control Fee Account, the Federal  Prison Industries, the Three Percent Fund, and the United States Trustee  System Fund—we determined that the data on the amounts reported for  the years under review DOJ-wide were sufficiently reliable for determining  how much of DOJ’s budgetary resources come from these alternative  sources of funding. We also determined that for fiscal year 2013, the  fingerprint-based Criminal History Record Information checks provided by  the Federal Bureau of Investigation (FBI) Criminal Justice Information  Services (CJIS) Division (CJIS fingerprint checks fees) were also reliable  for our purposes. To  report on DOJ’s flexibility in using alternative sources of funding for DOJ  activities, we identified key statutory characteristics that increase or  decrease agency flexibility with respect to these funds by reviewing  principles of appropriations law and our prior work.statutory language and identified legal requirements applicable to the  seven funds in the scope of this objective for each of these key areas: (1)  purpose—for what purposes the funds may be obligated, (2) amount— how available amounts are determined and what action triggers the  availability of funding, (3) time—what is the period of availability for the  funding, and (4) review—what specific reporting requirements apply to the  funding. 5. As noted above, annual appropriation acts have included obligations  limitations for CVF funds.
Why GAO Did This Study

DOJ is composed of approximately 40 components that carry out its activities and functions. The majority of DOJ’s budget authority is provided through annual appropriations, but, in some cases, DOJ has the ability to fund its programs by using money it collects through alternative sources, such as fines, fees, and penalties. The authority to use these sources may come from either permanent statutory authority or may be contained within an annual appropriations act.
GAO was requested to examine DOJ’s alternative sources of funds. Specifically, this report addresses (1) how much of DOJ’s total budgetary resources come from major alternative sources of funding and the key statutory characteristics that provide agency flexibility regarding these sources, and (2) any opportunities that may exist for DOJ to better manage unobligated balances for selected major alternative sources of funding. GAO reviewed DOJ budget documents and relevant laws, and interviewed DOJ officials.

What GAO Found

Alternative sources of funding—collections by the Department of Justice (DOJ) from sources such as fines, fees, and penalties—made up about 15 percent of DOJ's total budgetary resources in fiscal year 2013. Specifically, DOJ collected about $4.3 billion from seven major alternative sources of funding—including the Assets Forfeiture Fund, the Crime Victims Fund (CVF), and noncriminal fingerprint checks fees, among others—which were available to DOJ. Agency flexibility regarding the use of the seven funding sources varied with laws specifying funding purposes, amounts, and availability by, for instance, limiting obligations from a source or limiting the period in which funds may be obligated.
DOJ can improve management of two alternative sources of funding. Specifically:
The Federal Bureau of Investigation's (FBI) Criminal Justice Information Services (CJIS) Division collected $396 million in fees for providing non-criminal justice fingerprint checks during fiscal year 2013. The fee is made up of a cost recovery and automation portion but the breakout between the two portions of the fee is not explicitly communicated to stakeholders. As a result, stakeholders do not have complete information for providing meaningful feedback. Additionally, CJIS sets fees, in part, based on projected volume of transactions. Actual volumes have exceeded projected volumes, resulting in CJIS bringing in more than anticipated in automation fees and contributing to an unobligated balance of $284 million at the end of fiscal year 2013. CJIS officials stated that they are aware of growing unobligated balances but have not evaluated what an appropriate amount should be. As a result, CJIS does not know if it is carrying over a suitable amount to meet future needs.
In addition, unobligated balances in the CVF grew to nearly $9 billion by the end of fiscal year 2013. Statutory provisions annually limit DOJ's ability to obligate collections in the fund. For example, during fiscal year 2013, DOJ received about $1.5 billion in deposits to the fund, from sources such as criminal fines, and had statutory authority to obligate $730 million from the fund for crime victim assistance programs. Consistent with scorekeeping guidelines used during the congressional budget process, DOJ reported funds not available for obligation as a credit or offset to its annual discretionary budget authority. From fiscal years 2009 through 2013, DOJ reported $32 billion in offsets provided primarily by the CVF. As a result, DOJ's reported net discretionary budgetary authority decreased about 36 percent from 2009 to 2013, while DOJ's actual total discretionary budget authority remained relatively constant during these years.

What GAO Recommends

GAO recommends that DOJ develop a policy to analyze unobligated carryover balances of the Three Percent Fund. GAO also recommends that the FBI publish cost recovery and automation portions of fingerprint checks fees and develop a policy to analyze and determine an appropriate range for unobligated balances from automation fees. DOJ generally concurred with our recommendations, but noted concerns with developing revenue estimates for the Three Percent Fund and establishing a range of carryover balances for FBI fingerprint check fees.