FINANCIAL MANAGEMENT SCHOOL FISCAL LAW “Show where Congress says you can, not where Congress says you can’t” Supreme Court Ruling on Budget Authority SHOW SLIDE 1: Fiscal Law SECTION I. : Identify the Principles of Fiscal Law ADMINISTRATIVE DATA All Courses Including This Lesson Course Number Version Course Title 01 Planning Programming Budget & Execution Course (PPBE)   Task(s) Task Number Individual Taught (*) or Academic Hours The academic hours required to teach this lesson are as follows: Resident Hours/Methods Academic Hours/Method 0.1 hrs Introduction/Conference Discussion 3.8 hrs Conference Discussion 0.1 hrs Summary 4.0 hrs Total Time Test Lesson Number Testing (to include test review) Hours -0 hrs Lesson Number - Prerequisite Lesson(s) Lesson Number Lesson Title Identify the Principles of Fiscal Law Security Level: Unclassified Requirements: There are no clearance or access requirements for the lesson. Foreign Disclosure Restrictions FD5. This product/publication has been reviewed by the product developers in coordination with the Fort Jackson Soldier Support Institute foreign disclosure authority. This product is releasable to students from all requesting foreign countries without restrictions. Instructor Requirements Must meet physical qualifications IAW AR 600-9. Materials Required Instructor Materials: Lesson plan slides and Fiscal Law Summary Sheet Student Materials: Fiscal Law Summary Sheet Classroom, Training Area, and Range Requirements General Purpose Classroom - 25 Seats Instructional Guidance Note: Before presenting this lesson, instructors must thoroughly prepare by studying this lesson and identified reference material. Also, provide the students with situational awareness of the Operational Environment (OE) variables and actors. Proponent Lesson Plan Approvals Name Rank Position Date Harris, Norman CTR Writer/Developer xx-xxx-xxxx Bonig, Reid GS-12 Chief - FMITD xx-xxx-xxxx Davis, Bobby LTC FM-DOT xx-xxx-xxxx Zellars, Eric COL Commandant xx-xxx-xxxx Motivator: As Resource Managers, we must understand the rules, regulations, and laws that govern the use of taxpayer’s dollars Knowing the fiscal laws pertaining to appropriated dollars enable us to avoid funding violations and, or find a way to legally support commanders The motto of fiscal lawyers and the Supreme Court is to show where Congress says you can, not where you can’t Our job is to interpret law when those “gray area” questions/issues arise 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

Terminal Learning Objective Action: Conditions: Standard: Identify the Principles of Fiscal Law. Given a summary sheet and slides. With 80% accuracy: 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. SHOW SLIDE 2: TERMINAL LEARNING OBJECTIVE Note: State the TLO Action: Identify the Principles of Fiscal Law Conditions: Given a summary sheet and slides Standards: 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 Note: Click on the underlined “Fiscal Law”` hyperlink if you'd like to view the, 2014 FISCAL LAW DESKBOOK Safety Requirements:  Everyone is responsible for safety. A thorough risk assessment must be completed prior to every mission or operation. Risk Assessment Level: Low Environmental Considerations: NOTE: It is the responsibility of all Soldiers and DA civilians to protect the environment from damage. Environmental protection is not just the law but the right thing to do. It is a continual process and starts with deliberate planning. Always be alert to ways to protect our environment during training and missions. In doing so you will contribute to the sustainment of our training resources while protecting people and the environment from harmful effects. Evaluation: Students will take a comprehensive test at the end of Week 1. Students must score 80% or higher and International officers must score 70% or higher. Fiscal Law 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 3: Overview (1 of 2) Bullet 1 - Congress has the power to tax and appropriate dollars for the Treasury.   Bullet 2 - Congress is the only one that can provide legal authority for the Federal Government to incur obligations/outlays We cannot incur obligations until Congress passes a Continuing Resolution Authority and/or the President has signed the Budget Bill Must have authority to incur an obligation Bullet 3 - Funding from Congress 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 4: Overview (2 of 2) Bullet 1 - Tells purpose of funds and #’s   Bullet 2 - Need warrant to draw on Treasury Bullet 3 Bullet 4 -. A key point here is that just because the President signs the appropriations bill into law, it doesn’t mean you have obligation authority until you have a Funding Authorization Document. 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

Types of Appropriations Operation and Maintenance (O&M) - 2020 - Annual - Day to day operations Military Personnel, Army (MPA) - 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 SHOW SLIDE 5: Types of Appropriations We have roughly 156 different types of Appropriations   - A few of the more popular ones you’ll see Bullet ‘s 1 / 2 / 3 / 4 / 5 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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) SHOW SLIDE 6: Appropriations Law - Key Principles Whenever you are unsure about an appropriation or a budget issue:   Test using Purpose, Time, and Amount. Purpose - What can you spend the money on - For example, OMA dollars are used for operations and maintenance and not for buying tanks. Time - When can you obligate the money Amount - How much money can we obligate on this item 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL Appropriated Funds Limitations Proper purpose of expenditure Within appropriation life (time limit) Within amount established by Congress SHOW SLIDE 7: Appropriated Funds Limitations This slide further defines the 3 part test.   Bullet 1 - Right reason to spend Bullet 2 - Is the appropriation unexpired, expired, or closed also Bona Fide Need Bullet 3 - Also do we have enough 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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)) SHOW SLIDE 8: Purpose Statute (1 of 2) Reading the comic strip, Dilbert’s boss used the furniture pot of money to hire someone. We can’t do that   Misappropriation of funds 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL Purpose Statute 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 SHOW SLIDE 9: Purpose Statute (2 of 2) Bullet 1- Appropriation give funding   Bullet 2 - Provide intent We have a 3 part test to further evaluate purpose: Sub-bullet 1 - The purpose intended by Congress Sub-bullet 2 - No illegal activities Sub-bullet 3 - You can’t use two appropriations for the same purpose 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

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 SHOW SLIDE 10: Time Statute Bullet 1 Congress can make appropriations last 1, 2, 3, or 5 years   Sometimes they may even establish “no year” appropriations which means funding is available until Congress decides to stop funding. Bullet 2 Bullet 3 - Obligations must be initiated in the Unexpired time frame 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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) SHOW SLIDE 11: Amount Statue Congress does give us some leeway when it comes to using appropriations for other purposes and it is based on amount   Example is the investment threshold Bullet 1 - Usually items costing <$250,000 and not designated for centralized management and asset control are considered “expenses” and are funded with O&M funds Bullet 2 - Investment items are those that cost >$250,000 and/or are designated for centralized management and asset control. There isn’t an increase in funding, just permission to use funds for other than the intended purpose Bullet 3 - Minor construction projects costing < $100,000 can be funded with O&M For building something Bullet 4 - Maintenance and repair, not construction, doesn’t exceed the >$1,000,000 threshold Maintenance does not alter, improve, or change a permanent structure - it preserves the facility for its intended purpose Approved by DA Bullet 5 - Dollar threshold is raised to $1,500,000 if the project is to resolve a condition that threatens life, health or safety. Specific lump sum approved by Congress 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 12: Bona Fide Need Rule We often find ourselves wondering which FY funds to use or sometimes our requirements cross fiscal years   Thus, we have a dilemma - which year’s funding do I use The Bona Fide Need rule is a great tool to solve this dilemma Quote Bullet 1 - When do you need this product or service? Bullet 2 - Not future year needs Bullet 3 - We must consume or use the items in question during the FY Exception bullet - You have to order it now to use it next FY. In many cases, you may order the part and not receive it until the next FY 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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) SHOW SLIDE 13: Common Problems - Clothing 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 14: Common Problems - Food (1 of 3) Food   Bullet 1 - Why Bullet 2 - Military get food allowance Some exceptions for all personnel: Sub-bullet 1 - This is how most people get around it Sub-bullet 2 - Must be for Civilian award ceremonies - Non-military personnel (Col leaving - so have refreshments at the award ceremony - NO GO) 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 15: Common Problems - Food (2 of 3) 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 16: Common Problems – Food (3 of 3) 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 17: Common Problems – General (1 of 2) Here is a laundry list of headaches where commanders, civilians, and soldiers argue that we should fund these requirements   Bullet 1 - Ex Christmas tree in hall not in office Bullet’s 2 / 3 Bullet 4 - Unless used as an award (Unit 5K run where anyone can compete) Bullet 5 - Can’t use OMA, must use .0012 Commander representation funds - $300 ceiling / gift Bullet 6 - Cover the cost of the call, not the phone or service 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 18: Common Problems – General (2 of 2) Bullet 1 - Must be “line of duty”   Bullet 2 - CDFM is covered by the GI Bill for soldiers, Civilians can be reimbursed Bullet 3 - Awards/Rewards to civilians only - ex: Buy lunch for guy when he leaves out of O & M - $20 limit Sub-Bullet - Issued to individual once - Can’t issue every time you do something good - Defeats the reward system/intent and is considered “coin collecting” 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

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 SHOW SLIDE 19: Common Problems – Unauthorized Commitment Unauthorized commitment ‘s are headaches - Basically, someone at the installation is committing the government to procure something when no authority exists for them to do it   Bullets 1 / 2 / 3 When we find out, you must report the incident to the Directorate of Contracting to avoid Prompt Payment Act situations - must be ratified Contracting Officer works deal - Usually we keep the items and make the soldier pay for it Ex’s: A sergeant promising Wal-Mart that the post will buy 4,000 bed sheets is an unauthorized obligation Ordering books in the mail for OPD - send them back 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 20: Antideficiency Act No one has ever been convicted criminally for violating the Ant deficiency Act   - However, it is a career ender with the Admin punishments! - Letter of reprimand - Suspension without pay - Removal from office Bullet 1 Sub-bullet’s 1 / 2 / 3 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 21: Antideficiency Act - Close calls Lets say a mistake has occurred - is there a way to avoid an ADA violation?   Here are a couple of pointers to avoid an ADA violation: (These are all and / or) Bullet 1 - See if the installation had proper funding and it was available at the time of erroneous obligation - Did you have enough OPA? Bullet 2 - Did you even have OPA on a FAD? If so, determine if funds were continuously available - If not on FAD - screwed Or If you Obligate the money will you have enough or did you have other obligations present Bullet 3 - Can higher HQ’s bail you out? 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

FINANCIAL MANAGEMENT SCHOOL 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 SHOW SLIDE 22: Resources Here is a listing of references for you to keep updated and/or research issues that arise at work   The United States Army Judge Advocate General School, Contract and Fiscal Law Division, located in Charlottesville, Virginia, offers a one week fiscal law course three times a year — in addition to a distance learning fiscal law course broadcast via satellite from Maxwell AFB. The Web Site listed is the link to The Comptrollers Accreditation and Fiscal Law Course that meets the mandatory training requirements for the Army's Comptroller Accreditation Program for CP11 and FA45 personnel and satisfies the requirement for fiscal law training as set out in the 2 June 2006 memo from the Assistant Secretary of the Army for Financial Management & Comptroller. It must be completed within 60 days of your enrollment. I highly suggest you download the Fiscal Law Desk book from the JAG web site 11/11/2018 FINANCIAL MANAGEMENT SCHOOL

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 Check on Learning CHECK ON LEARNING The ACOM needs to allot money to the installation. They must provide allotment 2323

Terminal Learning Objective Action: Conditions: Standard: Identify the Principles of Fiscal Law. Given a summary sheet and slides. With 80% accuracy: 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. SHOW SLIDE 23: Terminal Learning Objective 11/11/2018 FINANCIAL MANAGEMENT SCHOOL