The General Accounting Office said yesterday that the Office of Management and Budget had improperly impounded $11.5 million of the $89 million that Congress provided this year for counties with large numbers of refugees needing social services.
Rep. Richard H. Lehman (D-Calif.), one of several members from affected counties who released the GAO decision, said, "OMB has tried to defund this program going back to 1983. Now, they have circumvented the law in their efforts and have been caught redhanded."
Rep. Don Edwards (D-Calif.) said, "This illegal impoundment is just another in a series of the Reagan administration attempts to renege on the federal responsibility toward those whom the federal government has granted refuge."
Lehman said that if the money is not released by the end of the current fiscal year on Monday, it might revert to the Treasury and thus "OMB's action may succeed, despite the GAO ruling."
To prevent this, Lehman aide Steve Jost said Lehman is preparing to file suit in federal court in San Francisco today to try to get the money released.
Under the law, whenever the president wants to rescind or withhold money appropriated by Congress, he is required to notify Congress, which then has 45 days in which to block the president's decision by a vote of both houses.
In a case like this one, in which the comptroller general notifies Congress that money has been impounded, the president has 45 days to persuade Congress to pass legislation approving the impoundment. But that would take Congress into the new fiscal year.
In a letter to House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), Comptroller General Charles A. Bowsher said he had ruled on June 28 that the Health and Human Services Department's Office of Refugee Assistance was required to spend $89 million in fiscal 1985 for the special program. But, he said, the Reagan administration had neither released all the money nor notified Congress that it wanted to withhold $11.5 million, as required by law.
Bowsher told O'Neill that after he made his ruling, he had "no reason to believe" that OMB would not make the full amount of funding available. "Accordingly," he said, "we did not report an impoundment at that time."
The dispute over the money goes back to an interpretation of several provisions of an appropriations bill. For fiscal 1984, Congress approved $77.5 million for the special program, but by the end of the year, just over $39 million was unspent. Congress then approved another $50 million for fiscal 1985, but a dispute arose as to whether the $39 million should be carried over to this year, or dropped, leaving only $50 million for this year.
The OMB initially took the position that the language of the appropriations measures and committee reports called for ignoring the leftover funds. But the GAO ruled that Congress clearly meant for the funds to be carried over and $89 million spent.
However, on Sept. 16 the OMB said its reading of the language was that only $77.5 million should be distributed because the committee reports contained language that established that ceiling, even if the leftover funds were made available.
Bowsher, in his letter to O'Neill, disagreed, saying, "We remain persuaded by the legislative history that the Congress intended to make $50 million available and intended this to be in addition to the $39 million in carryover funds."
OMB spokesman Edwin L. Dale Jr. said the agency would not comment because the matter was under legal review.