Summary FISCAL LAW OVERVIEW

FISCAL LAW OVERVIEW I. INTRODUCTION............................................................................................................... 3 A. U.S. CONSTITUTION............................................................................................................ 3 B. THE MAJOR FISCAL LIMITATIONS......................................................................................... 3 C. PHILOSOPHY OF FISCAL LAW ............................................................................................. 3 II. KEY TERMINOLOGY...................................................................................................... 4 III. AVAILABILITY AS TO PURPOSE. ............................................................................... 6 A. THE “PURPOSE STATUTE”. ................................................................................................. 6 B. THREE-PART TEST FOR A PROPER PURPOSE. ...................................................................... 7 C. DETERMINING THE PURPOSE OF A SPECIFIC APPROPRIATION. ............................................ 8 D. NECESSARY EXPENSES. .................................................................................................... 14 E. TYPICAL QUESTIONABLE EXPENSES................................................................................. 15 F. IS THE EXPENDITURE PROHIBITED? .................................................................................. 34 G. IS THE EXPENDITURE OTHERWISE PROVIDED FOR IN A SEPARATE APPROPRIATION? ....... 34 H. AUGMENTATION OF APPROPRIATIONS &MISCELLANEOUS RECEIPTS. ............................. 40 I. EMERGENCY AND EXTRAORDINARY EXPENSE FUNDS. ..................................................... 46 J. MILITARY CONSTRUCTION................................................................................................ 51 IV. AVAILABILITY AS TO TIME. ..................................................................................... 63 A. THE TIME RULE. . ............................................................................................................. 63 B. THE “BONA FIDE NEEDS” RULE.. ..................................................................................... 63 C. PARKING FUNDS.............................................................................................................. 65 2 V. AVAILABILITY AS TO AMOUNT............................................................................... 67 A. ADMINISTRATIVE SUBDIVISION OF FUNDS. ...................................................................... 67 B. REGULATIONS TO CONTROL THE RATE OF OBLIGATIONS ................................................. 67 VI. THE ANTIDEFICIENCY ACT. ..................................................................................... 67 A. PROHIBITIONS. ................................................................................................................. 67 B. ANTIDEFICIENCY ISSUES WITH P-T-A............................................................................... 68 C. LIMITATION ON VOLUNTARY SERVICES. .......................................................................... 70 D. INVESTIGATING AND REPORTING ADA VIOLATIONS........................................................ 72 VII. CONCLUSION. ................................................................................................................ 72 Fiscal Law Overview Ethics Counselor's Deskbook November 2013 3 FISCAL LAW OVERVIEW I. INTRODUCTION. A. The U.S. Constitution gives Congress the authority to raise revenue, borrow funds, and appropriate the proceeds for federal agencies. See U.S. Constitution, Art. I, §§ 8 and 9. In implementing these express constitutional powers, Congress limits strictly the obligation and expenditure of public funds by the Executive Branch. Congress regulates virtually all Executive Branch programs and activities through the appropriations process. 1. Congress has enacted fiscal controls, which, if violated, subject the offender to serious adverse personnel actions and possible criminal penalties. 2. Congress and the Department of Defense (DoD) have agreed informally to additional restrictions. The DoD refrains from taking certain actions without first giving prior notice to, and receiving consent from, Congress. These restraints are embodied in regulation or instituted through historical practice. B. What are the major fiscal limitations? 1. An agency may obligate and expend appropriations only for a proper purpose; 2. An agency may obligate only within the time limits applicable to the appropriation (e.g., O&M funds are available for obligation for one fiscal year); and 3. An agency may not obligate more than the amount appropriated by the Congress. C. Philosophy of Fiscal Law. “The established rule is that the expenditure of public funds is proper only when authorized by Congress, not that public funds may be expended unless prohibited by Congress.” United States v. MacCollom, 426 U.S. 317, 321 (1976). Fiscal Law Overview Ethics Counselor's Deskbook November 2013 4 II. KEY TERMINOLOGY. A. Fiscal Year. The Federal Government’s fiscal year begins on 1 October and ends on 30 September. B. Period of Availability. The period of time in which budget authority is available for original obligation. Most appropriations are available for obligation for a limited period of time. If activities do not obligate the funds during the period of availability, the funds expire and are generally unavailable for obligation thereafter. GAO Red Book, Vol. I, p 5-3, GAO-04-261SP (Jan. 2004). C. Obligations. A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States. Payment may be made immediately or in the future. An agency incurs an obligation, for example, when it places an order, signs a contract, awards a grant, purchases a service, or takes other actions that require the government to make payments to the public or from one government account to another. The standards for the proper reporting of obligations are found in section 1501(a) of title 31 of the United States Code. GAO, A Glossary of Terms Used in the Federal Budget Process, p.70, GAO-05-734SP (Sept. 2005) (“GAO Glossary”). D. Budget Authority. 1. Congress finances federal programs and activities by granting budget authority. Budget authority is also called obligational authority. 2. Budget authority means “the authority provided by Federal law to incur financial obligations . . .” 2 U.S.C. § 622(2). 3. “Contract Authority,” is a limited form of “budget authority.” Contract authority is specific statutory authority to contractually obligate the United States to future payments even though no appropriations are available to pay the obligations at the time the contract is made. Hon. Alan Cranston, 1990 WL , at *3, Comp. Gen. No. B- (Aug. 24, 1990). An example of such statutory authority is the Feed and Forage Act, 41 U.S.C. § 11. Fiscal Law Overview Ethics Counselor's Deskbook November 2013 5 E. Comptroller General and Government Accountability Office (GAO). 1. The Comptroller General of the United States heads the GAO, an investigative arm of Congress charged with examining all matters relating to the receipt, disbursement, and use of public funds. Established by the Budget and Accounting Act of 1921 (31 U.S.C. §§ 701, et seq.) the GAO audits government agencies. 2. The Comptroller General has the authority to issue advance decisions regarding the propriety of payments that a disbursing official or head of an agency will make or a voucher presented to a certifying official for certification, except in those instances described in paragraph 3 below (see 31 U.S.C. § 3529), BUT DoD policy is to resolve legal issues internally. DoD agencies are the military departments are prohibited from requesting advance decisions from the Comptroller General without prior approval of the agency’s General Counsel and the DoD General Counsel. Finance officers should direct their questions through channels to the appropriate General Counsel’s office for an advance decision. It is DoD policy not to seek to recover a payment from an accountable official if that individual has obtained from the General Counsel concerned an opinion advising that the payment could legally be made. DOD FMR, Vol. 5, Ch. 25, ¶ 2503 (December 2010); 31 U.S.C. § 3527(b). 3. Agency Advance Decisions. See DOD FMR, Vol. 5, Ch. 25, ¶ 2503 and Vol. 5, (December 2010 ); Transfer of Claims Settlement and Related Advance, Comp. Gen. No. B- (Mar. 17, 1997). Per the General Accounting Office Act of 1996 (Pub. L. 104-316, § 204, 110 Stat. 3826 (1996) (codified at 31 U.S.C. § 3529)) and, as delegated by the Director, Office of Management and Budget (OMB), the following issue advance decisions for designated categories: a. DoD: uniformed service member pay, allowances, travel, transportation, and survivor benefits. b. Office of Personnel Management (OPM): civilian pay and leave.