TO: Office of Management and Budget
FROM: Madge Bolinger Gazzola, Chief Operating Officer
DATE: April 7, 2011
SUBJECT: CFTC Shutdown Plan
Pursuant to Section 124, Agency Operations in the Absence of Appropriations, OMB Circular A-11 (2010), the Commodity Futures Trading Commission is submitting its plan for an orderly shutdown in the event of a lapse of appropriations.
In the event that a lapse of appropriations occurs, the CFTC expects that the vast bulk of the agency’s operations will cease. However, certain employees have been identified as excepted from the restrictions set forth in the Antideficiency Act. That determination is based, in part, on the acknowledgement that the complete absence of any oversight or surveillance by the CFTC would create an imminent risk to the protection of property, as noted on page 2 of the Department of Justice, Office of Legal Counsel, opinion dated August 16, 1995: “In the absence of government supervision, the stock markets, commodities and futures exchanges would be unable to operate.”
In light of the guidance from the Office of Legal Counsel, as well as other guidance relating to the Antideficiency Act, we have identified employees who are necessary to address an imminent risk to the safety of human life or the protection of property:
- Assuming the plan is implemented on April 9, 2011, the CFTC has approximately 675 employees on board.
- Of the 675 employees, 25 have been identified as excepted from the restrictions of the Antideficiency Act, because their work is necessary to address an imminent risk to the safety of human life or the protection of property. This represents 3.7% of the CFTC’s staff. The justification for each employee’s inclusion on the excepted list is set forth in the attached table.
- The CFTC presently has 2 administrative law judges (ALJs). During a lapse of appropriations, the work of the ALJs is not necessary to address an imminent risk to the safety of human life or the protection of property. Accordingly, under the terms of the Antideficiency Act, the CFTC will take proper steps to furlough the ALJs and their staffs.
- The 5 Commissioners are PAS appointees (Presidential appointees with Senate confirmation) and are exempt from furlough. Their respective staffs, however, are subject to furlough under the Antideficiency Act.
- With limited exceptions, all employees who are not identified as excepted would require no more than four hours to conduct an orderly shutdown of agency operations. However, six employees in the Office of Financial Management (OFM) would require no more than two work days to complete orderly shutdown activities. The 6 OFM employees will require additional time to conduct orderly shutdown activities in order to address the substantial number of agency contracts that are in force, so as to reasonably assure that the CFTC is compliant with the Antideficiency Act during a lapse of appropriations. To the extent feasible, OFM is taking steps in advance of a lapse of appropriations to address the agency’s contracts and to communicate with the agency’s contractors.
- The CFTC has no employees that are excepted because they are engaged in military, law enforcement, or direct provision of health care activities or because their compensation is financed by a resource other than annual appropriations.
The limited contingent of excepted employees has been identified to ensure, to the extent practicable, that a bare minimum level of oversight and surveillance of the futures markets, clearing operations, and intermediaries is maintained. However, the vast bulk of the CFTC’s oversight and surveillance functions will cease during a lapse of appropriations. In the event that circumstances change such that an imminent risk to the safety of human life or the protection of property emerges, the excepted employees will be responsible for notifying appropriate agency officials, who then will make a determination as to whether additional employees must be recalled from furlough to address the imminent risk.
For your information, we are attaching three documents as appendices to this response:
1.A copy of the CFTC’s Lapse Procedure, dated April 2011.
2.A chart containing a list of the 25 employees who have been determined to be excepted for purposes of the Antideficiency Act.
3.A one-page summary of which CFTC functions will continue in the event of a lapse of appropriations, and which functions will cease during such a lapse
Please feel free to contact me at 202-418-5190 if you have any questions.
Date: April 2011
Description: Lapse in Appropriation – This procedure describes the agency’s plan for operating in the event of an emergency shutdown due to a lapse in appropriations
Contact: Catherine McCoy, Mark Carney
This procedure outlines the process the Commodity Futures Trading Commission (CFTC) will follow to shut down operations in the event of a lapse in appropriations. Under the Antideficiency Act (31 USC §1341 et seq.), officers and employees of the federal government cannot, among other things, enter into obligations in advance of appropriations or employ federal personnel except in emergencies involving the safety of human life or protection of property, or to accomplish the orderly suspension of agency operations. If no funds are available, the agency must:
- Initiate the orderly shutdown of agency activities not considered essential to the safety of human life or protection of property; and
- Continue only those functions that are essential to the safety of human life or protection of property, as defined in this procedure.
- When shutdown appears imminent, the Office of Human Resources (OHR), in consultation with the Office of General Counsel (OGC) and the agency offices and divisions, will recommend to the Chairman which employees should be excepted from furlough because their duties are essential to protect life or property.
- Once the Chairman approves this list, OHR will notify excepted employees of their obligation to report to work in the event of shutdown.
- As the shutdown continues, the Division/Office Directors will continually evaluate the list of excepted employees to determine whether the limited life/property exception requires that adjustments be made.
- If circumstances shift, the Directors may request that adjustments be made to the excepted list, which may result in the recall of certain employees. Any such request must be made to the Executive Director, who will consult with the General Counsel and Office of the Chairman prior to approval.
- OHR will notify Presidential appointees that they may continue to work but their staff members will be subject to furlough unless excepted.
- OHR will seek approval from Merit Systems Protection Board (MSPB) for furlough of ALJs.
Employees Subject to Furlough
- All employees (including student volunteers, unpaid consultants, and individuals on Intergovernmental Personnel Act agreements (as applicable)) other than those described above are subject to furlough.
- All employees (except those on preapproved leave or an alternative work schedule) must report to work on the first business day following the initiation of a shutdown (emergency furlough). Each employee will receive a furlough notice and perform duties necessary for the orderly shutdown of Commission operations.
- Supervisors must notify employees that travel is cancelled; any employee on travel must return to his or her duty station.
- Employees MAY NOT volunteer to work without pay. This is a violation of Antideficiency Act and carries strong personal sanctions against the individual. Sanctions may be criminal (imprisonment and/or fine) and administrative (up to and including removal from Federal service) in nature.
- In the event of a shutdown, all paid leave must be cancelled. Accordingly, any employee who has received preapproval for paid leave during the shutdown period will be furloughed, unless such employee is considered “excepted” as outlined above. Any employee who is excepted must report to work.
- Office of Financial Management (OFM) will issue “stop work” notices to CFTC contractors for contracts that are not necessary to address an imminent risk to the safety of human life or the protection of property, unless the contract: (1) is already funded; (2) will not impose any new obligations on the government during the lapse in appropriations; and (3) will not require oversight by CFTC personnel during the lapse in appropriations.
- To promote compliance with the Antideficiency Act, OFM may issue “termination” notices to CFTC contractors if the lapse in appropriations lasts for thirty days or longer.
Notification to OMB
- The CFO is responsible for notifying OMB of the shutdown in compliance with Section 124 of OMB Circular A-11.
Shutdown Activities for Staff Subject to Furlough
- Email and BlackBerrys will not be shut down. However, staff on furlough may not check email or use voice capabilities or conduct any work. Employees who are not excepted will be instructed to power off and securely store all BlackBerrys and laptops prior to the lapse in appropriations, and will be informed that they cannot access any such devices while on furlough.
- The email addresses of all furloughed staff and public email addresses should be set at autoreply, and out-of-office messages should be recorded on all public phones and the phones of furloughed employees.
- All furloughed staff must cancel meetings, hearings, and other previously arranged business and notify appropriate parties of the cessation of normal agency business.
- Staff should document the status of cases and projects so they can be resumed, transferred, or otherwise appropriately handled when the funding situation is resolved.
- Staff must safeguard records and property and ensure protection of any classified or sensitive information.
- Shutdown activities must be completed within three (3) hours after the employee reports to work at his/her regularly scheduled tour of duty start time on the first business day following the lapse in appropriations.
Notification to Public and Staff
- The Office of Public Affairs will notify the public of closure and reopening of CFTC offices through the CFTC Website. The website will remain operational because it has already been fully funded prior to the lapse in appropriations. However, the website will not be updated or maintained during a lapse in appropriations, unless necessary to address an imminent risk to the safety of human life or the protection of property.
- The Office of Management Operations will ensure that the main CFTC information line (1-866-406-8550) and the headquarters and regional main phone lines contain current status information.
- Employees are responsible for checking the CFTC information line for information about the reopening of the agency after Congress appropriates funds.
- Employees are expected to return to work on their next regularly scheduled work day, unless on preapproved leave, following enactment of appropriations legislation.