Administrative agencies are created mainly by the legislature. Therefore, the legislature is considered as the main source of power of an administrative agency. Administrative agencies only carry the powers conferred upon them either by the statute or by the constitution.
Administrative agencies carry the implied or incidental powers that are necessary to carry out the powers which are expressly granted by statute. Administrative agencies derive their powers from their enabling legislation and cannot exceed those powers[i]. Administrative agencies do not carry any inherent, general or common law powers[ii].
An administrative agency can act only according to the applicable statutes and its own regulations. Although the source of powers of an administrative agency lies in statutes, there are situations where an administrative agency is created and empowered by a provision of a state constitution, or by an executive order.
In Yeboah v. United States DOJ, 345 F.3d 216 (3d Cir. Pa. 2003), it was observed that if a statute is not informative enough, then the reviewing court has to look into its legislative history. The reviewing court can set aside the agency decision only if there is clear error of judgment. Thus, even if there are genuine issues of material fact, compliance must be given to the interpretation of the facts by the agency, so long as they are based upon credible information.
[i] Pima County v. Pima County Law Enforcement Merit Sys. Council, 211 Ariz. 224, 227 (Ariz. 2005)
[ii] Arizona State Bd. of Regents ex rel. Arizona State Univ. v. Arizona State Personnel Bd., 195 Ariz. 173, 174 (Ariz. 1999)