The Agriculture Department has the legal authority to move the Economic Research Service and National Institute of Food and Agriculture from the nation's capital to Kansas City, but USDA may not have the authority to spend money on the relocation, USDA's inspector general says. 

USDA disagreed with the IG’s findings about the department's spending authority, citing language in a 66-year-old law, Reorganization Plan No. 2 of 1953, and legal precedent.

In its report released Monday, the IG agreed that law gives USDA the legal authority to relocate the offices, but said USDA may have skirted the law by failing to comply with provisions in a fiscal 2018 appropriations bill. 

Last October, the department paid Ernst & Young about $339,000 to review applications from entities around the country seeking to be the new homes for ERS and NIFA. In June, Agriculture Secretary Sonny Perdue announced that the agencies would move from Washington to Kansas City.

However, provisions in the 2018 spending bill placed restrictions on spending for the relocations, the IG said. The law required the department “to provide written notice to the committees on appropriations of both Houses of Congress at least 30 days prior to reprogramming or transferring funds to relocate an office or its employees.” Another section of that law required USDA “to receive approval from Congress prior to the expenditure of funds for the relocation of an office or its employees.”

The October 2018 payment to Ernst & Young “appears” to have been made without prior congressional approval, the IG report said.

“This obligation of funds may have also violated the Antideficiency Act (ADA), which prohibits government employees from involving the federal Government in a contract or obligation for the payment of money before an appropriation is made,” the IG said.

USDA “did not have the budgetary authority to obligate appropriated funds related to the relocation of NIFA offices” because it did not meet a deadline in the March 2018 omnibus act, which provided $6 million for relocation, alteration and repair of NIFA offices, to inform the appropriators how it would spend the money. The OIG also said the department "may not have the budgetary authority to obligate appropriated funds related to the relocation of ERS offices" because it did get approval of the appropriations committees before paying Ernst & Young.

The IG recommended the department consult with the Office of the General Counsel to determine whether its actions complied with the Omnibus Act and whether any corresponding Anti-Deficiency Act violations have occurred.

“If so, the department should take appropriate action,” the IG said. “Additionally, we recommend that the department obtain congressional approval prior to obligating and/or expending for reprogramming or transfer of any additional funds related to the relocation of ERS and NIFA offices.”

In an OGC opinion prepared to respond to the IG’s draft conclusions, USDA says the “committee approval” provisions in the omnibus act are unconstitutional.

“The department states that Supreme Court, Office of Legal Counsel, and Government Accountability Office (GAO) precedents support their position,” the IG said. “The department provided advance notification to the committees before obligating funds for office reorganizations and relocations to the extent they involve a reprogramming or the use of the identified interagency agreement or transfer authorities. The department states that it is not required to obtain committee approval of such actions.”

But the inspector general said that position conflicts with previous positions taken in litigation by USDA. “The department needs to communicate, in writing, this change of interpretation to USDA leaders at the sub-cabinet and agency levels.”

In a statement attributed to a department spokesperson, USDA said, “The budgetary provisions cited by the OIG report requiring committee approval have been ruled unconstitutional. To say the department was out of step with budgetary requirements disregards the authority given to the Executive Branch by the U.S. Constitution."

USDA "is not required to abide by provisions that have been deemed unconstitutional; therefore we will not take the OIG’s recommendation to ignore nearly 40 years of precedent set by the Supreme Court, Office of Legal Counsel, and the Government Accountability Office – an arm of Congress. Since the Inspector General affirms the department has the legal authority and we do not agree with the unconstitutional budgetary provision, this case is closed." The OIG report "is opinion based on policy decisions that have no basis in fact.” 

More than half the employees of ERS and NIFA have said they will not relocate. Meanwhile, the General Services Administration has set Aug. 7 as the deadline for bids to house the agencies. It has not been decided where in the Kansas City region the new offices will be located. In the meantime, agency employees will be sharing space with the Farm Service Agency and Risk Management Agency.

The OIG report did not examine the motives behind the move, but took note of USDA's stated reasons for it: "These goals were to: (1) improve its ability to attract and retain highly qualified staff with training and interests in agriculture, (2) place important USDA resources closer to stakeholders who live and work outside the National Capital Region, and (3) benefit the American taxpayers with potential savings on employment and facility costs."

Office and Management Budget Director Mick Mulvaney spoke to one of those goals at a speech in South Carolina Friday night at the state Republican Party’s Silver Elephant gala.

According to an account in the Washington Examiner, Mulvaney brought up the ERS and NIFA relocation as a way to "streamline" the government. "More than half the people quit," he said, adding, "By simply saying to people, ‘You know what, we’re going to take you outside the bubble, outside the Beltway, outside this liberal haven of Washington, D.C., and move you out to the real part of the country, and they quit."

This story was edited to include a statement from USDA and quotes from Mick Mulvaney.

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