A government watchdog says the Trump administration has once again violated a federal law that prevents the executive branch from holding back funds approved by Congress. For the second time in as many months, the Government Accountability Office found that an agency under the Trump administration’s leadership violated the 1974 Impoundment Control Act.
GAO on Monday determined the Institute of Museum and Library Services (IMLS) violated that law, when it withheld funds that Congress appropriated for grants and contracts, meant to support libraries and museums across the country. IMLS has been operating under a skeleton crew of employees since April, when the agency terminated most of its 75-employee workforce. President Donald Trump signed an executive order in March eliminating IMLS and six other small agencies “to the maximum extent consistent with applicable law.” GAO also issued a second decision on Monday, finding the Energy Department didn’t violate the ICA through its Wind Energy Technology Office. This is GAO’s second ruling that the Trump administration violated federal law by withholding congressionally appropriated funds. The watchdog office has dozens of similar investigations still underway. In May, GAO found the Transportation Department’s Federal Highway Administration (FHWA)
violated the Impoundment Control Act , when it didn’t award funding to states to set up electric-vehicle chargers, as authorized under the 2021 Infrastructure Investment and Jobs Act. Comptroller General Gene Dodaro
told lawmakers in April that GAO has 39 impoundment investigations pending. The Impoundment Control Act prevents the president from withholding agency spending that lawmakers approved without notifying Congress. GAO General Counsel Edda Emmanuelli Perez wrote in her decision on Monday that IMLS officials did not cooperate with the watchdog’s investigation. But based on public information, including sworn statements from the agency’s acting leader as part of ongoing lawsuits, she wrote that IMLS, so far this year, has been “improperly withholding appropriated funds from obligation and expenditure.” “Once enacted, an appropriation is a law like any other, and the President must implement it by ensuring that appropriated funds are obligated and expended prudently during their period of availability unless and until Congress enacts another law providing otherwise,” Perez wrote. Perez wrote that IMLS, in the first five months of this year, has cut its funding by more than half, compared to spending in recent years.
IMLS spending is more than 50% less
According to GAO, IMLS obligated nearly $90 million toward eight grant programs as of June 3. But during the same period last year, the agency spent more than $191 million on these same programs, and awarded $189 million in grants in 2023. Acting IMLS Director Keith Sonderling, who also serves as the Labor Department’s deputy secretary, stated in a
declaration to a federal court in Rhode Island that the agency terminated approximately 1,200 competitive grants around March, leaving only about 100 grants in place. Sonderling told the federal court that, under the EO, three grants to states were terminated on April 1, but that he “authorized back payments” a month later, and then “fully reinstated them” on May 5. Sonderling said he “authorized partial FY25 grant payments to all state grantees,” and that the agency will pay the full grant amounts once it receives more of its apportioned funding from the Office of Management and Budget. “The payments are partial only because IMLS has not yet received its fiscal 25 apportionment from the Office of Management and Budget. Once that apportionment is received, IMLS will pay out the remainder of the fiscal 25 award,” Sonderling wrote. Beyond grants to states, GAO found that IMLS only obligated about 19% of its remaining budget for fiscal 2025, after cancelling millions of dollars in contracts and terminating much of its workforce. “While there is no numeric threshold for an ICA violation, the obligation of roughly 19% does not suggest a reasonable attempt by the agency to carry out the purposes of the appropriation,” Perez wrote. GAO determined that IMLS has no plans to repurpose any of the unspent funds, and its online events calendar shows no scheduled public activity since December 2024. Perez wrote that IMLS has not responded to GAO’s requests for information. But based on public data, GAO determined that IMLS “withheld grant and other appropriated funds.” “Based on the available evidence and the lack of any special message pertaining to IMLS funds, GAO concludes that IMLS has violated the ICA by withholding funds from obligation and expenditure,” Perez wrote. IMLS and the Office of Management and Budget did not immediately respond to requests for comment. The U.S. District Court for the District of Columbia
issued a temporary restraining order in May , blocking the agency from taking “any further actions to dissolve IMLS or its operations.” That same month, the District Court for the District of Rhode Island issued a
preliminary injunction, ordering IMLS to reinstate anyone “placed on leave or involuntarily terminated” because of Trump’s executive order, and pausing further cuts to grants and contracts.
Energy didn’t violate ICA
Vice Chairwoman of the Senate Appropriations Committee Patty Murray (D-Wash.) said in a statement Monday that “it is clear as day President Trump is breaking the law to block funding Congress provided.” “President Trump may not like the fact that Congress has, on a bipartisan basis, invested in helping kids learn at their local library — but that does not change the fact that he himself signed these investments into law, and they need to start flowing immediately,” Murray said. “The president’s funding freeze isn’t just illegal; every day it continues, it hurts real people and communities across our country who are suffering the consequences as investments they count on get choked off.” In a
separate decision , GAO found that offices within the Energy Department did not violate the Impoundment Control Act. President Donald Trump signed a memorandum on his first day in office, barring the Energy and Interior Department from issuing or renewing approvals, rights of way, permits, leases or loans for onshore or offshore wind projects, while a review of federal wind leasing and permitting practices is underway. But Energy Department officials told GAO that its Wind Energy Technology Office deals mainly with research and development, and that Trump’s memo “did not significantly impact its work.” The Advanced Research Projects Agency-Energy (ARPA-E) told GAO that its active R&D projects related to wind energy had all been awarded before Trump’s memorandum, and that its funding has been unaffected.
