As discussed in Chapters 2 and 5, we found that OJP event planners for the OJJDP National Conference and the NIJ Technology Conference solicited and retained registration fees from conference attendees and vendors. According to 31 U.S.C. § 3302(b), an official or agent of the government receiving funds “from any source shall deposit the money in the Treasury as soon as practicable without any deduction for any charge or claim.” The rationale underlying this rule, also known as the miscellaneous receipts statute, is that in order to maintain Congress’s “power of the purse,” an agency should not augment its appropriations from sources outside the government without statutory authority.
In March 2005, the GAO, applying § 3302(b), held that neither federal agencies nor contractors acting on their behalf may charge and retain conference fees without specific statutory authority to do so. In light of this ruling, we considered the decision to charge conference fees in connection with the OJJDP and NIJ conferences. We concluded that, in the absence of specific statutory authority, outside entities retained by OJP should not charge conference fees in those cases where they have been retained primarily to provide conference planning services.
OJJDP National Conference
As discussed above, OJJDP originally entered into a contract with an event planner to provide conference planning services for the OJJDP National Conference. Thereafter, OJP and the event planner entered into a cooperative agreement pursuant to which these planning activities would continue.
An attachment to the application for the cooperative agreement indicated that the event planner would offset the expenses associated with providing meals and refreshments by charging registration fees. The amount charged to exhibitors ranged from $300 for a tabletop display to $1,000 for an exhibitor package. Attendee fees for the conference ranged from a high of $525, noted as a late registration, to a low “discounted rate” of $225. Some attendees, such as federal officials and presenters, received complimentary registrations, while the event planner offered $100-a-day registration fees to attendees who could not attend the entire conference.
According to the event planner’s records, the fees collected from the conference totaled $505,657. We asked event planner officials how these fees were applied, and they confirmed that the collected monies were used to pay for food and beverages provided to attendees at the conference.
As noted above, OJJDP first entered into a contract with the planner and thereafter switched to a cooperative agreement. The Federal Grant and Cooperative Agreements Act of 1977, 31 U.S.C. § 6305, directs executive agencies to use cooperative agreements to reflect the relationship between the federal government and another entity when:
the principal purpose of the relationship is to transfer a thing of value to the... recipient to carry out a public purpose... authorized by law... instead of acquiring property or services for the direct benefit or use of the... government; and
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substantial involvement is expected between the executive agency and the... recipient when carrying out the activity contemplated in the agreement.
By contrast, executive agencies are directed to use contracts when “the principal purpose is to acquire... property or services for the direct benefit or use of the... government.” Id. at § 6303. Pursuant to DOJ regulations, such as 28 C.F.R. § 70.24, non-profit organizations that enter into cooperative agreements with the Department may retain program income earned during the project period.59
We inquired as to why OJJDP entered into a cooperative agreement with the conference planner when a contract for such services was already in place. According to conference planning documents, OJP officials believed that the event planner would be prohibited from charging conference fees if they proceeded under the contract.60 By opting for a cooperative agreement instead, OJP believed that it would be permissible for the event planner to charge and retain registration fees as program income.
We believe there are two problems with OJP’s approach. First, it does not appear that a cooperative agreement was the proper vehicle for OJJDP to use in this case. As is evident from the choice of a contract as the original procurement vehicle, the primary purpose of the agreement between OJJDP and the conference planner was for OJJDP to acquire conference planning services. As discussed above, a contract is the proper vehicle when federal agencies are securing such services for their use.
Second, even if a cooperative agreement would have been appropriate in these circumstances, the regulations relating to program income do not apply to agreements with for-profit entities like the event planner used in the OJJDP conference.
Accordingly, we believe that absent specific statutory authority to charge conference fees, it was inconsistent with the miscellaneous receipts statute for the OJJDP conference planner to charge and retain registration fees. In response to questions from the OIG, OJP has not identified any such statutory authority.
NIJ Technology Conference
In September 2005, NIJ entered into a cooperative agreement with a non-profit entity related to the technology conference. As part of the agreement, the non-profit was to provide planning and other services for the technology conference. The agreement provided that the event planner would collect anticipated program income generated by charging fees to conference exhibitors and attendees.
The Statement of Work attached to the cooperative agreement indicated that the NIJ event planner would consult with NIJ and DHS to establish the conference’s registration fee schedule. Once collected, the registration fees would be used to offset conference costs, including providing attendees “two breakfasts, two lunches, numerous breaks, and access to all sessions and special events.” The fee charged to rent a booth in the conference’s exhibition hall ranged from $1,300 for government and non-profit exhibitors to $1,800 for private industry exhibitors. Attendee fees for the conference ranged from a high of $550 for private industry attendees to a $225 special registration fee. Speakers and staff received complimentary registrations.
Summary financial records indicated that the NIJ event planner collected $411,914 in attendee and exhibitor fees. We asked NIJ event planner officials how the revenue was applied to offset conference costs. An official with the NIJ event planner told us that the collected registration revenue offset the general cost of the Technology Conference and was not applied against any specific type or category of conference cost.
In light of the March 2005 GAO decision concerning conference registration fees, we asked OJP officials whether NIJ had statutory authority to collect fees in connection with the technology conference. According to OJP, such authority was not required. OJP reasoned that because the event planner in this case provided more than just pure planning services, a cooperative agreement was the appropriate funding vehicle and the fees collected were allowable program income under that agreement. Specifically, OJP noted that in addition to purely logistical support, the NIJ conference planner also performed such programmatic tasks as identifying possible participants and coordinating among the sponsoring government agencies.61
We believe that whether it was appropriate to charge registration fees in connection with the NIJ conference is a close question. We recognize that cooperative agreements may be appropriate funding vehicles in cases where OJP is transferring funds to a non-profit entity primarily to permit that entity to carry out a programmatic function of OJP. We also recognize that the governing regulations permit the retention of program income when such agreements are utilized. However, we believe OJP must ensure that cooperative agreements are not utilized inappropriately as a means of avoiding the strictures of the miscellaneous receipts statute. Accordingly, we recommend that OJP develop and implement clear guidance outlining the specific circumstances under which event planners retained to assist with OJP conferences may charge and retain conference fees.
Each conference can present unique circumstances that make consistent application of the miscellaneous receipts statute difficult. Because OJP is a sponsor of many conferences each year, we recommend that OJP develop and implement policies and procedures to ensure compliance with the statute. We believe these policies should prohibit the charging and retaining of registration fees by conference planners in the absence of specific statutory authority when the primary purpose of the transfer of OJP funds is to procure event planning services for an OJP-sponsored conference.
We recommend that OJP:
Develop and implement policies and procedures to ensure compliance with the miscellaneous receipts statute.
This provision is part of the Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations. It does not apply to agreements with for-profit corporations such as the event planner for the OJJDP conference.
This document, dated August 9, 2005, suggests that OJP was aware of the GAO decision and its potential implications for the OJJDP conference.
For purposes of this review, programmatic support means a service designed to achieve the award or agreement’s mission or objectives.