FISCAL LAW “Show where Congress says you can, not where Congress says you can’t” Supreme Court Ruling on Budget Authority

Terminal Learning Objective Action: Conditions: Standard: Identify the Principles of Fiscal Law. FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion Verify the types of appropriations, purpose, time, and amount rules; Define funding threshold levels; Define Bona Fide Need Rule; Identify budget problems regarding fiscal law; and Verify the anti-deficiency act.

Overview (1 of 2) Congress has the power of the purse. “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law” (U.S. Constitution, Art 1, Section 9, CL 7) Budget/Contract Authority - Legal authority to enter into obligations which will result in immediate or future outlays of government funds (2 USC & 622 (2)) Appropriation Act is an authorization to incur obligations and make payments out of the Treasury for specified purposes

Overview (2 of 2) Authorization Act defines reasons for use of funds Treasury Warrant provides fiscal resources to OMB OMB formally subdivides funding to agencies through apportionment, allotment, or allocation Funding Authorization Document provides activities authority to legally obligate government funds

Types of Appropriations Operation and Maintenance (O&M) - 2020 - Annual - Day to day operations Military Personnel (MILPAY) - 2010 - Annual - Soldier pay and entitlements Procurement – 2031 thru 2035 - 3 years - Purchase of various high value items such as weapons, ammunition, missiles, etc Military Construction Army (MILCON) - 2050 - 5 years - New or continuing construction Research, Development, Test & Evaluation (RDT&E) - 2040 - 2 years - Future system’s RDT&E

Appropriations Law Key Principles Three tests as to the lawful availability of funds (PTA) Purpose (31 USC 1301) Time (31 USC 1502) Amount (31 USC 1341 1342/1517)

Appropriated Funds Limitations Proper purpose of expenditure Within appropriation life (time limit) Within amount established by Congress

Appropriations Law Key Principles Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law (31 U.S.C. 1301(a))

Purpose Statute (2 of 2) Appropriation provides the dollars Authorization and Legal History clarify the appropriation Three Part Test - Used to validate Purpose Statute Expenditure must be for the specific purpose or necessary and incident to proper execution of general purpose of appropriation Must not be prohibited by law Can not be provided for within the scope of another appropriation

Unexpired, Expired or Closed Time Statute Unexpired, Expired or Closed Congress sets time limits by appropriation President starts clock when he signs appropriation act Obligation must occur within the appropriate period Fiscal year of the appropriation designated by 1 Oct XX to 30 Sep XX Adjustments to appropriation can be made up to 5 years after appropriation moves to expired stage

Amount Statue Items <$250,000 (O&M) Items >$250,000 (Procurement) Minor construction projects < $1,000,000 (O&M) Maintenance and repair >$1,000,000 (O&M) Projects >$1,500,000 (MILCON)

Bona Fide Need Rule “only for payments or expenses properly incurred during the period of availability, or to complete contracts properly made during the period of availability” Focus on timing of the obligation and current need of the agency Spend current year dollars for current year needs Supplies must be needs of period or consumed in period - Exceptions are Inventory Stockage level, Delivery or Lead time

Common Problems Clothing Generally considered a personal expense Exceptions: If not an ordinary purchase (cold weather gear) Essential to successful completion of work - Tuxedoes for Secret Service - Suits for SOF on mission Need for hazardous duty - Safety shoes Used as a Award/Reward - T shirts/Hats for sports event winner (< 5% of participants)

Common Problems Food (1 of 3) May not use appropriated funds for meals for government workers at duty station Generally a personal expense - Paid salary - buy own food Exceptions: Light refreshments at government sponsored conferences for those attendees in a travel status and/or facility rental includes cost of food gao-ada-09-03.pdf Award Ceremonies can have “light refreshments” - Not for a Military Personnel Award Ceremony

Common Problems Food (2 of 3) Exceptions cond’t: Training when necessary to achieve training objective - not for convenience Ethnic or cultural awareness training Civilian award/reward meal ($20 limit) Bottled water may be procured when a building’s water supply is deemed unwholesome or unpotable ADA bottle water -05-11.pdf

Common Problems Food (3 of 3) Meals expenses allowed (Civilian’s Only): Meals are incidental to the meeting Employee attendance at the meal is necessary for full participation in meeting Can’t take meals elsewhere and achieve full participation Not a routine business meeting

Common Problems General (1 of 2) Decorations - When consistent with the work related objectives, placed in common area, and not for personal use, i.e., X-mas cards are a no go Business Cards - Only allowed for those that regularly deal with public or outside organizations, i.e., recruiters, contractors, investigators Entertainment - For equal opportunity/ethnic programs Unit T-shirts - Not allowed Mementos - Not allowed Cell phones - Can reimburse for official phone call charges

Common Problems General (2 of 2) Fines and Penalties - Can reimburse for fines directly associated with official duties, i.e., contempt fine by court not testifying due to regulations/agency instructions - Parking tickets not covered Licenses and Certificates - Can pay if duties directly benefit the government or State or local law requires position to have it CDFM: interpretation of U.S.C. 5757, 1112 does allow for test reimbursement for civilians Awards/Rewards - May be given Unit Coins - Can buy coins for awards issued to individual on a one time basis for significant accomplishment or competition

Unauthorized Commitment Common Problems Unauthorized Commitment Only an authorized individual with a warrant can procure for the government If any unauthorized person enters into an agreement to purchase goods or services for the government and the government accepts the goods or services, the agreement must be ratified for payment to occur Ratification is the act of making the agreement good - Must be performed by a Contracting Officer after a legal review

Antideficiency Act Prohibits government employees from: - Making or authorizing expenditures or obligations: - In excess of amount available in appropriation, apportionment, or allotment - In advance of an appropriation, apportionment or allotment in violation of the Bona Fide Needs rule - Accepting voluntary services wrong appropriation gao-ada-05-13.pdf - Using military vehicles for personal use I.E. - TMP vehicles used for domicile to duty transportation

Antideficiency Act Close Calls Officials may avoid ADA violations if: - Proper funds were available at the time of the erroneous obligation, i.e., OMA obligated for a MILCON project and where MILCON funds were available - Proper funds were available continuously from the time of the erroneous obligation; and - Proper funds were available for the agency to correct the erroneous obligation, i.e., ACOM or HQDA can cover it

Resources Fiscal Law Course - one week in Charlottesville, VA Satellite VTC - timeframe varies Web Site - https://jag.ellc.learn.army.mil/webapps/portal/frameset.jsp Fiscal Law Deskbook download on web www.jagcnet.army.mil/JAGCNETInternet/Homepages/AC/TJAGSAWeb.nsf/TJAGSAPublications!OpenView

Check On Learning Q. Whenever you are unsure about an appropriation or a budget issue, what three key rules to apply? Q. How long is RDTE in the “unexpired” state? True / False. According to the Bona Fide Needs Rule we can fund supplies needed this year with prior year dollars Q. Explain the unexpired state; expired state; and unexpired state for funding Q. What does the ACOM need to do before the installation (subordinate unit) can obligate money? Purpose, Time, and Amount 2 Years False The ACOM needs to allot money to the installation. They must provide allotment 23

Terminal Learning Objective Action: Conditions: Standard: Identify the Principles of Fiscal Law. FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion Verify the types of appropriations, purpose, time, and amount rules; Define funding threshold levels; Define Bona Fide Need Rule; Identify budget problems regarding fiscal law; and Verify the anti-deficiency act.