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Inspector General Opens Investigation of NLRB Spending, Surplus

Nov. 21, 2019, 9:25 PM

The NLRB’s Inspector General is investigating why the agency ended the 2019 fiscal year with a $5.7 million surplus, according to a Nov. 20 agency memorandum.

Federal laws laying out Congress’ power of the purse generally prohibit both overspending and underspending by agencies after the Legislature establishes the government’s annual budget. Congresswoman Rosa DeLauro (D-Conn.) said earlier this week that Democrats in the House and Senate are looking into what she called a “misuse of funds.” Agency leaders have said the surplus was caused by contracts that didn’t pan out, came in under budget, or are under protest.

The National Labor Relations Board also ended fiscal year 2018 without spending all of its appropriated budget. Career staffers have accused agency leadership of an intentional effort to slim down the NLRB and limit workers’ ability to unionize and file labor complaints. They have noted that the board carried budget surpluses the last two years while offering buyouts to employees and failing to fill six vacancies for regional directors—the senior bureaucrats who run the agency’s roughly 26 regional offices.

Agency heads say they’re trying to make the NLRB more efficient, and have previously pointed to the White House’s proposed budgets as a reason to cut staff and make other belt-tightening moves. Congress ultimately has rejected each of the Trump administration’s suggested budget cuts for the agency.

Inspector General David Berry’s audit will probe the agency’s execution of the 2019 fiscal year budget and focus on determining the “cause of the lapse of $5.7 million from the Fiscal Year 2019 appropriation,” according to the memo. The audit will also scrutinize internal budgetary controls and processes.

Berry’s office and the NLRB declined to comment.

More Surpluses Anticipated?

NLRB General Counsel Peter Robb said Nov. 8 that the agency has sought authority to hold on to budgeted monies it doesn’t spend in the future, suggesting the board may anticipate another surplus.

The NLRB operated without a permanent chief financial officer for some months in 2018, until a new CFO and budget director were installed in January. The Government Accountability Office Investigated the agency’s spending decisions that fiscal year year, following staff allegations that the Trump administration had instructed agency heads to stop spending budgeted money.

The matter was closed after the NLRB apparently corrected course.

Senate Republicans rejected in September a proposal by Democrats to raise NLRB’s budget to $341 million to increase staffing levels and fill the vacant regional director spots. The move means the agency’s budget likely will remain flat at $274 million, as in the previous six years.

The NLRB began accepting applications for three of the six vacant regional director positions earlier this month.

To contact the reporter on this story: Hassan A. Kanu in Washington at hkanu@bloomberglaw.com

To contact the editors responsible for this story: Terence Hyland at thyland@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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