Administrative Agencies and the Administrative Process
Montana, John, Records Management Quarterly
During civics classes in high school, most adults learned that there are three branches of government - the legislative, the executive, and the judicial. These are the branches of government provided for in the Constitution. Often, it is said that there is also a fourth - the administrative agencies. While this is not formally true (you won't find the Internal Revenue Service [I.R.S.] mentioned in the Constitution), it has become increasingly true in practice - administrative agencies such as the Internal Revenue Service, the Environmental Protection Agency, and the Occupational Safety and Health Administration are increasingly the source of the laws that govern the day-to-day activities of business, with less and less hands-on regulation directly by the executive and legislative branches of government. On both the state and federal levels, a large number of such agencies administer the law in a wide variety of areas.
Most information management professionals are at least vaguely aware of the power and reach of administrative agencies. The agencies mentioned all have an effect on business every day, and businesses are obligated to spend considerable time and effort responding to their mandates. This impact extends to the business's records management. Agency rules frequently include recordkeeping requirements, and an audit or investigation by an agency almost invariably will involve a review of the organization's records.
However, while most people are generally aware that agencies such as the I.R.S. are powerful, few know much about the scope or source of that power. This article will attempt to clear up some of the mystery and confusion that surrounds these agencies.
THE SOURCE OF AGENCY POWER
On both the state and federal levels, administrative agencies gain whatever power they have by delegation - that is to say, they have no inherent, constitutionally mandated power to act. Rather, another, higher level of government - normally the legislature - must delegate some of its own power to the agency.
How much power is that? It depends. In order for an agency to exist, it must first be created by enabling legislation. This statute is a device that sets up the basic framework for the agency, and the set of rules and limitations by which it must live. These may include a variety of things, including organizational matters, staffing, salaries and procedures for conducting business. One of the most important is the delegation of power and its limitation. The delegation may be quite broad, giving the agency virtually complete power within an area (e.g., all taxation matters within a jurisdiction), or it may be quite specific and restrict the agency's authority to a very narrow range of activities, such as operating a single toll road.
An agency may only exercise authority within the delegation of authority provided for in its enabling legislation, or subsequent legislation granting specific additional power. This specified authority is all the authority the legislature has "handed over" to the agency, and since the agency has no inherent authority outside of this "handed over" authority, there is no other authority to wield. In addition, agencies are bound by the mandates - executive decrees, statutes, and case decisions - of superior levels of government, which limit their powers.
Many records managers are undoubtedly aware of one example of a subsequent legislative act significantly restricting the power of agencies - the Paperwork Reduction Act. Prior to the Act, federal agencies were free to impose any sort of paperwork burden they chose upon regulated parties. Now, agencies must submit these proposed requirements to the Office of Management and Budget for review and approval.
The limitation of agency power is an important concept, since actions taken by an agency which turn out to be outside the scope of its authority are not binding. A good deal of litigation between agencies and regulated parties concerns the question whether the agency acted within the scope of authority delegated to it, or whether it has acted in a manner contrary to an act of a superior branch of government. …