Standard Army Training Package and Fiscal Law 101 Overview

ARMY STANDARD TRAINING PACKAGE

Fiscal Law 101: Amount and Antideficiency Act (ADA) Violations

AGENDA Key Terms and Concepts The Antideficiency Act Prohibitions Fiscal Controls ADA Violations Reporting Requirements and Investigations Sanctions References/Resources

KEY TERMS AND CONCEPTS Appropriation or Appropriations Act The most common form of budget authority. It is a statutory authorization to incur obligations and make payments out of the U.S. Treasury for specified purposes. Apportionment A distribution by the Office of Management and Budget (OMB) of amounts available in an appropriation into amounts available for specified time periods, activities, projects, or programs. The OMB apportions funds to federal agencies based upon the agency s request. Funds Appropriations or pots of money. Each fund is different with respect to the purposes it can be used for, the time it is available, and the amount it contains. Fiscal Year Budget concerns operate on a fiscal year timeline. The Federal Government fiscal year begins on 1 October and ends on 30 September of the following year. (i.e. FY 2025 runs from 1 October 2024 to 30 September 2025).

KEY TERMS AND CONCEPTS Formal Subdivisions(Allocations) - Subdivisions of appropriations by the executive branch departments and agencies. If a formal subdivision is breached an ADA violation occurs and the person responsible for may be held liable for the violation. Informal Subdivisions (Allowances) - Subdivisions of appropriations by agencies at lower levels, e.g., within an installation. These subdivisions are considered funding targets, or allowances. Incurring obligations in excess of an allowance is not necessarily an ADA violation. Period of Availability - The period of time for which appropriations are available for obligation. If funds are not obligated during the period of availability, then the funds expire and are generally unavailable for new obligations. Periods of availability may or may not be specified in the appropriation act.

KEY TERMS AND CONCEPTS Commitment An administrative reservation of allotted funds, or of other funds, in anticipation of their obligation. This verifies sufficient funds exist. There are no legal consequences for fencing off funds and the commitment can be undone. Obligation A definite act (usually a contract) that creates a legal liability on the part of the Government for the payment of goods and services ordered or received. An agency incurs an obligation when it places an order, signs a contract, awards a grant, purchases services or takes other actions that require the government to make payments to the public or from one government account to another. Voluntary Services Services rendered without a prior contract for compensation or without an advance agreement that the services will be gratuitous.

THE ANTIDEFICIENCY ACT 31 U.S.C. 1511- 1519 requires apportionment and administrative subdivisions of appropriations 31 U.S.C. 1341 prohibits obligations or expenditures in excess of appropriations and contracting in advance of an appropriation 31 U.S.C. 1342 prohibits accepting voluntary services

THE FLOW OF FUNDS Congress Appropriation OMB Apportionment DoD Comptroller Allocation Air Force Navy Army

The Flow of Funds HQDA Allocation DRU/ACOM/ASCC Allotment/Allowance UNIT/GARRISON Allowance C A B

ANTIDEFICIENCY ACT PROHIBITIONS Do not spend more than you get Do not spend too early Do not accept voluntary services except as authorized by law Do not exceed a formal subdivision Do not exceed an informal subdivision which causes the agency to exceed a formal subdivision

THREE LEVELS OF FISCAL CONTROLS Appropriation Apportionment Formal Administrative Subdivisions

ANTIDEFICIENCY ACT VIOLATIONS P-T-A: Purpose Time Amount If you have a P-T-A violation, you have to look for potential ADA violations

ADA CORRECTIONS TEST 1. Proper funds available at time of obligation 2. Proper funds available at time of correction 3. Proper Funds were available the entire time from erroneous obligation until correction

PURPOSE: POTENTIAL ADA VIOLATIONS Right funds not available w/in formal SD No funds available for that purpose Exceed O&M threshold for investment items (>$350K) Exceed O&M threshold for construction (>$4M)

TIME VIOLATIONS Bona Fide Needs Rule Violations Current FY $ for Future FY needs Future FY $ for Future FY need: Prior FY $ for Current FY need: (MAY BE Correctable)

AMOUNT VIOLATIONS Exceeding Appropriation, Apportionment, or Formal Subdivision = ADA violation BUT. . . Exceeding only Informal Subdivision without exceeding the Formal, DOES NOT = ADA violation

VOLUNTARY SERVICE PROHIBITION An officer or employee of the U.S. government . . . may not accept voluntary services for [the] government . . . exceeding that authorized by law except for emergencies involving the safety of human life or the protection of property

PROHIBITED VOLUNTARY SERVICES Free services to government where: No contract (payment) No legal authorization (10 U.S.C. 1588) No emergency (immediate danger) Results in Unlawful Augmentation AND violates Section 1342 of the Antideficiency Act

REPORTS & INVESTIGATIONS

REPORTING REQUIREMENTS DoD FMR Requirements: The DoD FMR contains the primary guidance regarding the investigation and reporting of ADA violations. According to the FMR, within two weeks of discovering a potential violation of the ADA, an initial report must be prepared by the activity holding funds that were allegedly misused. Once completed, initial reports must be submitted through activity/command channels to the applicable Office of the Assistant Secretary of the Military Department for Financial Management and Comptroller, Combatant Commands, or the Senior Financial Manager for other DoD Agencies and Field Activities (referred herein as DoD Component). Upon receiving the report, the DoD Component must evaluate the initial report for validity and completeness. If this evaluation determines a suspected violation may have occurred, the DoD Component must assign a case number for tracking purposes and direct the initiation of a preliminary review. DoD FMR, vol. 14, ch. 3, para. 030203.22

FLASH REPORT REQUIREMENTS Accounting classification of funds involved Name and location of the activity where the alleged violation occurred Name and location of activity issuing the fund authorization Amount of fund authorization or limitation that was exceeded Amount and nature of the alleged violation Date the alleged violation occurred and date of discovery Means of discovery Description of the facts and circumstances of the case

PROCESS Flash report to Deputy Assistant Secretary of the Army, Financial Management & Comptroller (ASA FM&C) Preliminary Investigation Formal Investigation (if needed)

INVESTIGATIONS Prior to disciplinary action the service must submit a preliminary summary report of violation, with legal counsel coordination, to the OSD and to DFAS The SECDEF must report all violations to the President, Congress, and the GAO The GAO maintains an online database of all reported ADA violations

INVESTIGATIONS Investigations are guided by DoD FMR Preliminary, complete within 4 months from the date it was directed. Para. 030301 Formal, due within 9 months from the date it was directed. Para. 030301 If formal you have to assign responsibility to someone!

RESPONSIBILITY Identifying Circumstances and Fixing Responsibility. The investigating officer shall carefully consider the facts and circumstances surrounding the violation before affixing responsibility for the violation. Commanding officers, budget officers, or fiscal officers may be named because of their overall responsibility or position, or the fact that they are designated as the holder of a subdivision of funds, if they failed to properly exercise their responsibilities. The investigating officer, however; shall attempt to discover the specific act, or the failure to take action, that resulted in the violation, and the responsible individual(s) for the act or the failure to take action. The Report of Antideficiency Act Violation is considered incomplete until an individual(s) has been named as responsible for the violation. A conclusion that no one could be determined responsible for the violation is not acceptable.

THEN WHAT? Notification letters sent to: GAO House Senate President Posted publicly! www.gao.gov

ADMINISTRATIVE PENALTIES Civilian - Discipline including reprimand, reduction in grade, suspension w/o pay, removal Military UCMJ or administrative action

CRIMINAL PENALTIES A knowing and willful violation is a Class E felony, punishable by a $5k fine, confinement for up to 2 years, or both

REFERENCES/RESOURCES 31 U.S.C. 1341 prohibits obligations or expenditures in excess of appropriations and contracting in advance of an appropriation 31 U.S.C. 1342 prohibits government employees from accepting voluntary services 31 U.S.C. 1511-1517 requires apportionment/administrative subdivision of funds and prohibiting obligations or expenditures in excess of apportionment or administrative subdivision of funds

REFERENCES/RESOURCES DOD Regulation 7000.14-R, Financial Management Regulation, vol. 14, available at http://comptroller.defense.gov/fmr/ Principles of Federal Appropriations Law, U.S. Government Accountability Office, Volume II, Third Edition, Chapter 6, available at http://www.gao.gov/legal/redbook.html GAO ADA Violation Report, available at http:/.www.gao.gov

QUESTIONS?