Summary: Pursuant to a congressional request, GAO responded to questions about the Food and Drug Administration's (FDA) carry-over account and its implications regarding reduction in force (RIF) notices should the Prescription Drug User Fee Act (PDUFA) not be reauthorized.
GAO noted that: (1) if PDUFA were not reauthorized, FDA staff would be subject to RIF, and that, according to regulations promulgated by the Office of Personnel Management (OPM), FDA must give notice to employees 60 days before a RIF; (2) thus, even though the authorization for collecting fees does not expire until October 1, 1997, RIF notices are slated to be issued on August 1,997; (3) user fees currently fund 700 full-time equivalents dispersed over 1,1977 employees; (4) no carryover account exists, but if at the end of the fiscal year, the funds available under the fee program have exceeded program obligations, the balance is carried over into the next fiscal year; (5) FDA believes and GAO agrees that if the user fee program were not reauthorized, funds carried over from the final year of the program, fiscal year (FY) 1997, could be used to cover costs associated with the expiration of PDUFA authority, including the cost of terminating staff; (6) if the user fee program is not reauthorized, FDA could use some portion of the funds carried over from FY 1997 to effect an orderly shutdown of the program; (7) any funds not needed for closing down the program would presumably be available to continue daily operations, delaying the need to issue RIF notices for the time period during which operations would continue; (8) if FDA were to assume that the user fee program would be reauthorized and therefore no shutdown or RIF would be necessary, it could use the funds carried over from FY 1997 to continue operations for some time; (9) the risk of proceeding on this assumption, however, is that if the program were not reauthorized, FDA could have insufficient user fee funds for closing the program down; (10) funds to effect the orderly shutdown of the program would then have to come from elsewhere; and (11) if funds were not available, however, an even larger RIF might be necessary than would be necessary if planned for in advance.
