The Judgment Fund: GAO-08-295R

February 2008
GAO Reports;2/27/2008, p1
Government Documents
The Notification and Federal Employee Antidiscrimination and Retaliation (No FEAR) Act of 2002 has, since October 1, 2003, required federal agencies to reimburse the Judgment Fund for payments made to claimants to cover judgments, awards, and settlements in equal employment opportunity (EEO) and whistleblower cases. As we previously reported in 2004, the reimbursement provision of the No FEAR Act was intended to make agencies more accountable for their violations of employment discrimination and whistleblower protection laws brought against the agencies. Similarly, the Contract Disputes Act of 1978 (CDA) also has, since March 1, 1979, required agencies to reimburse the Judgment Fund for payments to claimants in cases involving federal contract disputes. The No FEAR Act mandated that we conduct a study of the payments, reimbursements, and effects of the reimbursement provisions of both No FEAR Act and CDA cases. In 1956, Congress established the Judgment Fund, which is a permanent, indefinite appropriation to pay judgments against federal agencies that are not otherwise provided for by other appropriations. In 1961, legislation was enacted allowing the Judgment Fund to pay, among other things, Department of Justice (DOJ) settlements of ongoing or imminent lawsuits against federal agencies. The Judgment Fund is intended to allow for prompt payment of settlements and awards to claimants, thereby reducing the assessment of interest against federal agencies (where allowed by law) during the period between the rendering and payment of such settlements and awards. The Judgment Fund makes such payments upon certification that a court has handed down an award or that a settlement has been reached. The Judgment Fund is currently managed by the Department of the Treasury's Financial Management Service (FMS). In response to the mandate, the objectives of our review, for both No FEAR Act and CDA cases, were to: (1) determine in how many cases payments were made from the Judgment Fund for judgments, settlements, or awards resulting from (a) EEO and whistleblower protection complaints after the No FEAR Act became effective, and (b) contract disputes; (2) determine in how many cases and to what extent agencies made reimbursements to the Judgment Fund and how long reimbursements took; and (3) obtain agency official and stakeholder views of the effects of the requirement to reimburse the Judgment Fund on operations, appropriations, employee relations and other human capital matters, and settlement practices at federal agencies. From fiscal year 2004, when the No FEAR Act took effect, through fiscal year 2006, the Judgment Fund paid $45.1 million to claimants for settlements, awards, and other costs involving 625 No FEAR cases at 36 federal agencies. Of this amount, federal agencies had repaid $44.9 million, or 99 percent, as of March 31, 2007. These No FEAR agency reimbursements were made, on average, 4.8 months after the original Judgment Fund...


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