1. Funding You need to understand the rules attached to government funds so as to avoid any personal liability on your behalf or on your KO’s behalf 3 - 1

2. Appropriation Act (Purpose) Requires funds to be used only for the purposes and programs for which the appropriation was made – otherwise considered misappropriated funds. aka “The Purpose Statute” Bona Fide Need Rule (Time) Requires funds to be used only for needs or services in the year of the appropriations obligation period. Anti-Deficiency Act (Amount) Prohibits making or authorizing an obligation in excess of the amount available. Forbids obligation to pay money from the US Treasury in advance of an appropriation. Requires agency to fix responsibility for violations of the Act. Funding Limitations 3 - 2

3. Major Appropriation Categories APPN CAT FUNDING POLICY OBLIGATION PERIOD O&M SCOPE OF WORK EFFORT Development, Test & Eval, Equipment & Software for T&E, and Operations at R&D Facilities Incremental 3 Years 5 Years - SCN Civilian Salaries, Travel, Fuel, Supplies, Minor Construction <$750K, Replenishment Spares, Equipment & Software <$250K Annual1 Year 5 Years 2 Years Annual Full Military Pay & Allowances, PCS Moves, Retired Pay Accrual Major Construction Projects >$750K Hardware, Production Labor,, Initial Spares, Equipment and Software> = $250K SCN – Ship Building and Conversion Navy MILPERS MILCON RDT&E PROC SCN 3 - 3

4. Appropriation Life-Cycle C = CurrentE = ExpiredX = Canceled Available for New Obligations & Payments Available for Upward Obligations, Adjustments, & Payments on Prior Obligations. Not Available for New Obligations No Longer Available for Upwards Adjustments to Obligations or to Liquidate Recorded Obligations Closed 3 - 4 Account TitleYears After Appropriation First Authorized 123456789101112 O&M CEEEEEXXXXXX RDT&E CCEEEEEXXXXX PROCUREMENT CCCEEEEEXXXX MILCON / SCN CCCCCEEEEEXX