Federal Appropriations Law: A Primer James F. Nagle Oles Morrison Rinker & Baker LLP

What is Federal Appropriations Law Fiscal law The body of law that governs the availability and use of federal funds –GAO Principles of Appropriations Law, Volume I, page 1 to 2 Federal Appropriations Law: A Primer 2

Congress’s Role Decides whether to fund How much and how long to fund Sets terms and conditions of use Federal Appropriations Law: A Primer 3

Role of GAO Financial and Program Audits Legal Opinions Legal Decisions Publishes the Red Book Federal Appropriations Law: A Primer 4

Three Phases of an Appropriation Period of Availability Expired Phase – Five Years Closure – Returns to Treasury Federal Appropriations Law: A Primer 5

Specific versus General Appropriations Agency must use Specific Appropriation to the exclusion of General Appropriation –Amount in Specific Appropriation is a ceiling –Once Specific Appropriation is exhausted, cannot use General Appropriation Two Appropriations available for the same purpose – Use the “Rule of Election” and be consistent Federal Appropriations Law: A Primer 6

Rules of Fiscal Law The propriety of the use of funds depends on three things –The Purpose of the obligation or expenditure –The obligation must occur within the Time limits applicable to the Appropriation –The obligation expenditure must be within the Amounts that Congress has established Federal Appropriations Law: A Primer 7

Purpose The Purpose statute, 31 U.S.C (a) Necessary Expense doctrine –The expenditure must be a logical relationship to the Appropriation charged –Must not be prohibited by law –Must not be otherwise provided for Federal Appropriations Law: A Primer 8

Examples of Necessary Expense Issues Clothing Water Office Equipment Business Cards Entertainment Federal Appropriations Law: A Primer 9

Time Limitations Type of Appropriation / Duration –Annual –Multi-year –No year Federal Appropriations Law: A Primer 10

Bona fide Needs Rule A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or continuing to exist, in the fiscal year for which the appropriation is made Federal Appropriations Law: A Primer 11

Bona Fide Needs Supply contracts Services contracts –Non Severable – same as supply contracts –Severable – normally charge appropriation when services are rendered – but major exceptions Federal Appropriations Law: A Primer 12

Amount – the Anti-Deficiency Act Cannot obligate the government in advance of or in excess of an Appropriation Cannot accept voluntary services Issues –Indemnifications –Change Orders –Options –Judgment Fund Federal Appropriations Law: A Primer 13