ATTACH 7B.3..pdf

Green Book Playbook Consolidated PDF

Date of Playbook Consolidation: 30 September 2013

Note: Please check the Playbook on the CE Portal for the most updated version. Updates are communicated through the “Playbook Updates” list on the right hand side of each Playbook.

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Contents

Overview

1.0 Financial Management Basics

1.1 Fiscal Law and the Antideficiency Act

1.2 Legislative Process

1.3 Planning, Programming, Budgeting, and Execution

1.4 Budget Coding Basics

1.5 Stages of Accounting

1.6 Reimbursements

1.7 Budget Formulation Process

1.8 Base Level Financial Management

1.9 Year-End Process

2.0 Civil Engineer-Specific Financial Management

2.1 Funds of the Base Civil Engineer

2.2 Civil Engineer Program Element Codes

2.3 Utilities and Utility Sales Management

2.4 Operations and Maintenance Support of Non-Appropriated Fund Activities

3.0 Information Technology Systems

3.1 Civil Engineer Financial Data Flow and Interim Work Information Management System

3.2 Understanding Shop Rates

3.3 Logistics and Supplies

Definitions and Acronyms

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Green Book Overview

Introduction Green Book Playbook Scope Green Book Structure Green Book History

The Green Book is a popular reference resource for Air Force (AF) staff and is used as an Air Force Institute of Technology (AFIT) teaching tool to educate new resource advisors at the installation level. The book covers a variety of topics including overall financial management, Civil Engineer (CE)-specific elements of financial management, and the AF systems used to maintain finances.

Green Book Playbook Scope Limitations: This Playbook does not replace, supersede, or circumvent existing Department of Defense (DoD) or AF policy.

Applicability: The Green Book playbook is most applicable for Resource Advisors (RA) at the installation level.

Process Narratives

The Green Book is divided into three major components:

1. Financial Management Basics

2. Civil Engineer-Specific Financial Management

3. Information Technology Systems

Within each of these components are chapters that provide helpful information to the RA. While some chapters guide the reader through major processes, others are simply narrative descriptions. All together, the three components of the Green Book cover the major responsibilities for a base level RA. Hyperlinks and a Reference section to various policies and instructions are provided throughout the guide for users who want to learn more about specific subjects. For a more detailed explanation of acronyms, please review the Definitions and Acronym section.

Green Book Structure

1.0 Financial Management Basics

1.1 Fiscal Law and the Antideficiency Act

1.2 Legislative Process

1.3 Planning, Programming, Budgeting & Execution

1.4 Budget Coding Basics

1.5 Stages of Accounting

1.6 Reimbursements

1.7 Budget Formulation Process

1.8 Base Level Financial Management

1.9 Year-End Process

2.0 Civil Engineer-Specific Financial Management

2.1 Funds of Base Civil Engineer

2.2 Civil Engineer Program Element Codes

2.3 Utilities and Utility Sales Management

2.4 Operations and Maintenance of Non-Appropriated Fund Activities

3.0 Information Technology Systems

3.1 CE Financial Data Flow and Interim Work Information Management System

3.2 Understanding Shop Rates

3.3 Logistics and Supplies

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Green Book History The Green Book by design is a reference document intended to be used as the text for AFIT’s classes. Likewise, this volume was intended to be exactly what the title conveys; a desktop reference -- something kept close at hand to help Civil Engineer resources and financial managers get through their day. It has been successfully doing that for more than 19 years.

In 1994, AFIT CE financial management instructor, Captain Mike Heard, began drafting the original Green Book. Captain Heard received the Gage H. Crocker Award and the United States Air Force (USAF) Comptroller Educator of the Year Award; both honors earned in part for his success in writing this straightforward and practical book. Over the years, this book has been carefully cared for, cultivated, updated, and re-published by AFIT's financial management instructors - Ms.

Cherry Wilcoxon-Hurt (1997-2002), Captain Eddie Phillips (2002-2004), and since 2005, Dennis Blythe. In 2009, AF CE discontinued printing an actual paper Green Book, opting instead to place it electronically on the CE Portal in order to make it readily available to all Civil Engineers. In 2010, Major Cynthia Kearley; from the Judge Advocate General School at Maxwell Air Force Base, provided a new chapter on fiscal law and the Anti-Deficiency Act. In 2013, AFIT/CE adapted a guide originally authored by Ms. Carolyn McClain as a replacement chapter on Interim Work Information Management System (IWIMS), shop rates, and the Automated Civil Engineer System for Financial Management (ACES-FM).

Several volunteer readers have helped read, write, re-write, and "de-bug" this online book. Out of fear that one of the many contributors will be forgotten in a long list of thank-you’s, the Green Book collaborators will not try to list each individual but simply say thank you to all of them.

As comprehensive as this book is, some content may have been missed, words misspelled, or maybe simply mistaken how some things work. If you find any of the above, please use the “Submit Comments and Feedback” link found on the CE Portal and an e-mail will be sent to dennis.blythe@AFIT.edu for the feedback to be incorporated.

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Green Book – 1.0 Financial Management Basics

The following section covers multiple topics necessary to understanding fundamental principles and driving policies concerning Air Force and government financial management. These topics include:

1.1 Fiscal Law and the Antideficiency Act

1.2 Legislative Process

1.3 Planning, Programming, Budgeting & Execution

1.4 Budget Coding Basics

1.5 Stages of Accounting

1.6 Reimbursements

1.7 Budget Formulation Process

1.8 Base Level Financial Management

1.9 Year-End Process

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Green Book – 1.1 Fiscal Law and the Antideficiency Act

Fiscal Law Players Fiscal Law Analysis Potential ADA Violations Voluntary Services vs. Gratuitous Services ADA Sanctions Research Starting Points Credits References and Resources Advice and Tips

Introduction Background

The origins of fiscal law in the United States can be traced back to Article I, Section 8, Clause 1 of the Constitution; “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States.” Further, Article I, Section 9, Clause 7 provides, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” Congress, by design, plays the chief role in overseeing the public treasury.

In the early days of the Republic, executive agencies frequently mismanaged the funds provided to them by Congress.

Examples of such mismanagement included:

Obligating funds in advance of appropriations (i.e., spending money before Congress appropriates funds) Using funds for purposes other than those intended by Congress Spending funds early in the fiscal year (FY), thereby creating a “coercive deficiency” (i.e., spending all of their money then demanding that Congress give them more money or face closure of the executive agency involved)

In order to stop the rampant fiscal abuse, Congress passed a series of statutes, known as the “Antideficiency Act” (ADA).

See 31 United States Code (U.S.C.) § 1341-42, 1512-14, & 1517. These statutes require administrative and criminal sanctions for persons misusing appropriated funds.

Fiscal Law Players

Congress is charged with collecting funds from the American public, then distributing the funds to other Government departments or agencies (such as the Department of Defense (DoD))

Federal Agencies such as the DoD, Department of Energy, Department of Homeland Security, Department of Transportation, etc., receive appropriated funds from Congress. The funds are often designated for a particular kind of use. The agencies must ensure that they spend the money in accordance with any requirements and restrictions established by Congress

Government Accountability Office (GAO), formerly called the General Accounting Office, is an agency that works for Congress and the American people. Congress asks GAO to study the programs and expenditures of the federal government. GAO, commonly called the investigative arm of Congress or the congressional watchdog, is independent and nonpartisan. It studies how the federal government spends taxpayer dollars. GAO advises Congress and the heads of executive agencies about ways to make government more effective and responsive.

GAO evaluates federal programs, audits federal expenditures, and issues legal opinions. When GAO reports its findings to Congress, it recommends actions. Its work leads to laws and acts that improve government operations

Supreme Court serves as final arbiter over fiscal law matters contested through the U.S. judicial system. Such matters frequently involve the application and interpretation of federal statutes. In 1976, the Supreme Court issued a landmark ruling in the case of U.S. v. MacCollom, 426 U.S. 317. In MacCollom, the Court stated, “the established rule is that the expenditure of public funds is proper only when authorized by Congress, not that public funds may be expended unless prohibited by Congress.” *

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* U.S. v. MacCollom, 426 U.S. 317 (explaining that Mr. MacCollom was a federal prisoner and pro se respondent, who sought declaratory and injunctive relief in which he sought a vacation of his sentence pursuant to 28 U.S.C. § 2255 and asserted that he could not afford a transcript of his trial, without which he could not properly frame his argument that his trial lawyer was ineffective.) Another statute, 28 U.S.C. § 753(f) provides for a free transcript to indigent persons and that the costs “shall be paid by the United States out of moneys appropriated for these purposes.” Moreover, the statute states that “[f]or proceedings brought under 28 U.S.C. § 2255… [the costs will be paid by appropriated funds] if the trial judge or district judge certifies that the suit or appeal is not frivolous…” Subsequently, the district court deemed that Mr.

MacCollom “failed to state a claim upon which relief could be granted” and did not provide him a free transcript. The appellate court, citing 5th Amendment concerns, determined that the statute does not prohibit a free transcript and supplying one “would simply fill a constitutional void.” The Supreme Court ultimately reversed the appellate court’s decision and held “the established rule is that the expenditure of public funds is proper only when authorized by Congress, not that public funds may be expended unless prohibited by Congress.” Id [citing Reeside v. Walker, 11 How. 272, 291, 13 L. Ed. 693 (1851)]

Fiscal Law Analysis

To analyze whether an executive agency may spend appropriated funds on a certain object or service, it is necessary to consider three things:

Purpose - the purpose for which Congress intended the funds to be used Time - how long Congress intended the funds to remain available to the agency before they expire Amount - the amount of funds available to the agency for the intended purpose

The Purpose Rule

“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), the “Purpose Statute”). The Comptroller General has determined that in order to expend appropriated funds, the following three-part test is met:

The expenditure must be for a particular statutory purpose, or necessary and incident to the proper execution of the general purpose of the appropriation. The broader the language of the appropriation, the broader the agency’s discretion in determining what is “necessary and incident.”

The expenditure must not be prohibited by law [e.g., 10 U.S.C. 2246 prohibits DoD from using appropriated funds to operate or maintain golf courses in the continental United States (CONUS)]

The expenditure must not otherwise be provided for (i.e., it must not fall within the scope of some other appropriation) o If two appropriations are available but one is more specific, use the more specific of the two o If two appropriations are equally available, then the agency must choose which one to use. The agency must choose wisely because it will be required to continually use the appropriation selected Example: the Navy wants to dredge the harbor at a certain naval base. It determines the Rivers and Harbors Appropriations and Shipbuilding and Conversion Appropriations are equally applicable. The Navy decides to use the Harbors and Rivers Appropriation to fund the dredging and exhausts the fund. The Navy cannot then turn to the Shipbuilding and Conversion Appropriations to complete the work.

The Time Rule

Key Fiscal Law Concepts – Congress sets time limits for the use of a particular appropriation; however, the clock does not start running until the President signs the appropriations act.

FY – The FY begins on 1 October and ends on 30 September.

Period of Availability – Is the period of time for which appropriations are available for obligation. If funds are not obligated during their period of availability, then the funds expire and are generally unavailable for further obligation.

[See GAO–05-734SP Budget Glossary, at 22-23 (available at http://www.gao.gov/new.items/d05734sp.pdf)].

Different funds have different periods of availability [e.g., Operations and Maintenance (O&M) funds, 1 year;

Personnel Funds, 1 year; Research, Development, Test & Evaluation Funds (RDT&E), 2 years; Procurement funds, 3 years; Military Construction Funds, 5 years].

Obligation – A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received. [See GAO –05-734SP Budget Glossary, at 70 (available at

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Go to Table of Contents 8 | P a g e http://www.gao.gov/new.items/d05734sp.pdf)]. Obligations represent the amount of orders placed, contracts awarded, and services received, that will require payment.

The Key to Fiscal Law Time Issues – The Bona Fide Needs Rule. The balance of an appropriation is available only for payment of expenses properly incurred during the period of availability, or to complete contracts properly made during the period of availability [31 U.S.C. 1502(a)]. The Bona Fide Need of the government determines by the category (supplies or services) the government is acquiring. The general rule, however, is “current year money for current year needs.” Depending on the time procured, an exception(s) to the general Bona Fide Needs rule may exist.

Thus, good methodologies for analyzing Bona Fide Needs’ issues are to:

1. Classify the acquisition as a supply or service

2. Identify the appropriate Bona Fide Needs rule

3. Determine if any exception to the applicable Bona Fide Needs exists

For supplies – The Government has a Bona Fide Need for supplies when it actually requires, and is available to use, the requested supplies.

Figure 1.1 below depicts the single fiscal year supply contract.

Figure 1.1

Exceptions – There are two major exceptions to the Bona Fide Needs’ Rule – the “Lead-Time Exception” and the “Stock Level Exception.”

1. Lead-Time Exception – There are two variants to the Lead-Time Exception. They are:

Delivery Time – This exception applies when an agency has a need for materials, but the item delivery is not in the current FY. If an agency cannot obtain materials in the same FY in which they are needed and contracted for, delivery in the next FY does not violate the Bona Fide Needs Rule. This is true as long as the purchase meets two requirements. First, the time between contracting and delivery must not be excessive; and second, the procurement must not be for standard, commercial items, readily available from other sources.

o Example: A customized widget is needed now in September of FY 1, but the contractor cannot deliver it until November of FY 2. The purchaser may obligate current FY funds to pay for the widget without violating the Bona Fide Needs Rule. However, if the widget is not needed now but is expected to be needed sometime in the next FY, it should not be purchased with current FY 1 funds because it would not fall within the delivery time exception.

Production Lead-Time – This exception allows the agency to consider normal production lead-time in determining the bona fide need for an acquisition. As a result, an agency may contract in one FY for delivery in the next FY if the material contracted for will not be obtained on the open market at the time needed for use, so long as the intervening period is necessary for production.

o Example: A new, customized radar system is needed now in September of FY 1, but the contractor cannot produce the radar system until November FY 2. The purchaser may obligate current FY funds to pay for the system now, because the need exists now.

Figure 1.2 below depicts the exception for lead time.

Figure 1.2 http://www.gao.gov/new.items/d05734sp.pdf

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2. Stock Level Exception – This exception allows agencies to purchase sufficient supplies to maintain adequate and normal stock levels. It does not permit the agency to stockpile supplies in excess of normal usage requirements.

Example: An office normally maintains a stock of fifty packs of copy paper. In September FY 1, the stock has dwindled to ten packs. The purchaser may order additional packs and pay with FY 1 funds, even though the paper will actually be consumed in FY 2. However, the purchaser could not legitimately buy six hundred packs of copy paper with current FY funds, even if they were offered a large discount that might save the government money in the end. That is considered stockpiling.

Figure 1.3 below depicts the exception regarding stock levels.

Figure 1.3

Services– A Bona Fide Need for services does not arise until the services are rendered. There are two categories of services: Severable and Non-Severable.

Severable Services – A service is severable if separated into components that independently meet a separate need of the government such as landscaping or janitorial services. The general rule is that services may be funded with current year funds as of the date the service rendered. Therefore, a severable services contract should not cross FY.

Figure 1.4 below depicts serverable services for Fiscal Year (FY) 1 and FY 2.

Figure 1.4

Statutory Exception – Under the authority of 10 U.S.C. 2410(a), agencies may obligate their current funds to a one year period of performance contract which finances serverable services even if the period of performance crosses fiscal years.

Non-Severable Services – A service is non-severable if the service produces a single or unified outcome, product, or report that cannot be subdivided for separate performance in different FY. Examples of products or reports that cannot be separated between fiscal years are software development or a research study. For non-severable service contracts, the government may fund the entire contract with funds available for obligation at the time the contract is executed and the contract performance may cross fiscal years.

Figure 1.5 below depicts nonserverable services that cannot be subdivided into different fiscal years

Figure 1.5

Expired Appropriations – Expired Appropriations are appropriations whose availability for new obligations have expired, but have retained their fiscal identity and are available to adjust and liquidate previous obligations. At the end of a particular fund’s period of availability for new obligations, the funds are said to have expired and will remain in that expired state for five years [31 U.S.C. 1553(a)].

Example: a contractor wins a contract dispute with the agency in FY 3 and is entitled to additional payment under the original contract that was award in FY 1. Expired funds from that procurement appropriation may

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Cancelled Appropriations – Cancelled Appropriations are appropriations that are no longer available for any purpose.

An appropriation becomes “closed” five years after the end of its period of availability as defined by the applicable appropriations act. According to 31 U.S.C. 1552(a), on September 30th of the fifth FY, after the period of availability for obligation of a fixed appropriation account ends, the account shall be cancelled. Any remaining balance (whether obligated or unobligated) in the account shall be canceled and thereafter shall not be available for obligation or expenditure for any purpose.

The Amount Rule

The ADA is a series of statutes (31 U.S.C. §§ 1341-42, 1512-14, & 1517) designed to prevent “coercive deficiencies” and other mismanagement by governmental agencies. To ensure agencies behave in a fiscally responsible manner, the ADA exerts three levels of fiscal control over appropriated funds. The three levels are Appropriations, Apportionment, and Administrative. Administrative subdivisions fall into two categories: “formal” and “informal.”

Appropriations – Congress gives funds to the Executive Branch Apportionment – Chief Executive of Office of Management & Budget (OMB) distributes appropriations to federal agencies Administrative Subdivision (Formal) – (Allocations and Allotments) Distribution within the agency; e.g., Department of Air Force (AF) to Major Command (MAJCOMS) Administrative Subdivision (Informal) – (Allowance, Target, Advisory Guide) Distribution within the agency at a lower level; e.g., MAJCOM to Non-Appropriated Fund (NAF) and Military Aviation Unit (Wing)

Appropriations (First level, 31 U.S.C. 1341) – This statute prohibits obligations or expenditures in excess of the amount available in an appropriation, as well as contracting in advance of an appropriation. Exceeding an appropriation is a Per Se violation of the ADA. Two major exceptions include:

In Excess of Exception: 41 U.S.C. 11 (commonly referred to as the “Feed and Forage Act*”) permits the DoD to contract in advance/excess of an appropriation for clothing, subsistence, forage, fuel, quarters, transportation, or medical and hospital supplies.* This authority requires Congressional notification and does not permit actual expenditures, i.e., obligation of funds, until Congress provides an appropriation of the required funds.

In Advance of Exception: Multi-Year contracts are authorized under 10 USC 2306(b) (property) and 10 USC 2306(c) (services). Regulatory guidance for multi-year contacts is found in the Federal Acquisition Regulation (FAR) part 17. Multi-year contracting authority allows an agency to “enter into contracts for periods of not more than five years for services… and for items of supplies related to such services” with one year funds as long as the agency meets certain administrative determinations [10 U.S.C. 2306(c)]. This exception is rarely used and multi-year contracting typically occurs by using an option year contract or specified multi-year funds

A quasi exception to the In Advance of Exception: FAR 32.703-2 Contracts conditioned upon availability of funds and 52.232-18, Availability of Funds Clause. Contracting activities may initiate certain contracting actions prior to an appropriation if the solicitation and contract include the above-referenced FAR clause. However, the government may not obligate funds of the next FY or accept supplies/services under these contracts until proper funds are actually appropriated and the contracting officer has given written notice to the contractor that funds are available. A failure to insert an Availability of Funds clause will result in a violation of the ADA’s In Advance of Prohibition.

* The Feed and Forage act was passed in 1861 during the U.S. Civil War. Since then, the authority has been used on numerous occasions in a modern context. For example, the authority was invoked several times to support the Vietnam War (in 1968, 1969, and 1972). In more recent times, the authority was invoked in 1990 during Operation Desert Shield, in 1994 to restore democracy in Haiti, and in 2001 immediately following 9/11. OMB Watch, Exploring the Scope of the Feed and Forage Act of 1861, May 22, 2007, http://www.ombwatch.org/budget/feedandforageact.pdf

Apportionment [the second level, 31 U.S.C. 1512-1513, 1517(a) (1)] – These statutes require the President to apportion Executive Branch appropriations. The President has delegated this authority to the OMB. Exceeding an apportionment is a Per Se violation of the ADA.

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Definition – According to the Defense Acquisition University, an apportionment is an action by which the OMB distributes amounts available for obligation in an appropriation account. The distribution makes amounts available on the basis of specified time periods (usually quarters), programs, activities, projects, objects, or combinations thereof. GAO–05-734SP Budget Glossary, at 20 (available at http://www.gao.gov/new.items/d05734sp.pdf)

Purpose – The apportionment process is intended to (1) prevent the obligation of amounts available within an appropriation or fund account in a manner that would require deficiency or supplemental appropriations and

(2) achieve the most effective and economical use of amounts made available for obligation. Id. at 21

Exceptions – Apportionment at a rate that would create a need for a supplemental appropriation is allowed by 31 U.S.C. 1515 for: military and civilian pay increases; laws enacted after budget submission which require additional expenditures; or emergencies involving life or property

Administrative Subdivisions (the third level, 31 U.S.C. 1514) – This statute requires agency heads to establish administrative controls that: (1) restrict obligations or expenditures to the amount of apportionments; and (2) enable the agency to fix responsibility for exceeding an apportionment. Administrative subdivision of funds can be broken down into two types, “formal” and “informal”:

Allocations and Allotments – These are “formal” administrative subdivisions prescribed generally by 31 U.S.C. 1514.

Exceeding a formal administrative subdivision is a Per Se violation of the ADA.

Allowance/Target/Advisory Guide – These “informal” distributions do not create formal administrative subdivisions.

Exceeding an “informal” administrative subdivision of funds does not necessarily violate the ADA.

Definition – An apportionment is an action by which the OMB distributes amounts available for obligation in an appropriation account. The distribution makes amounts available on the basis of specified time periods (usually quarters), programs, activities, projects, objects, or combinations thereof. GAO–05-734SP Budget Glossary, at 20 (available at http://www.gao.gov/new.items/d05734sp.pdf)

Purpose – The apportionment process is intended to (1) prevent the obligation of amounts available within an appropriation or fund account in a manner that would require deficiency or supplemental appropriations and

(2) achieve the most effective and economical use of amounts made available for obligation. Id. at 21

Exceptions – Apportionment at a rate that would create a need for a supplemental appropriation is allowed by 31 U.S.C. 1515 for: military and civilian pay increases; laws enacted after budget submission which require additional expenditures; or emergencies involving life or property

Potential ADA Violations

Violations of Purpose, Time, and Amount – Government officials, who spend appropriated funds for an improper purpose, violate the time rule(s) (Bona Fide Needs Rule), or obligate funds beyond the amount available in an informal subdivision, commit a potential violation of the ADA. Whether an ADA violation has occurred depends on whether or not the agency can meet all three of the following conditions: (1) proper funds were available at the time of the erroneous obligation, (2) proper funds were available at the time of correction for the agency to correct the erroneous obligation, and (3) proper funds were available continuously from the time of the erroneous obligation to the time of correction. See To the Hon. Bill Alexander, B-213137, 63 Comp. Gen. 422 (1984), GAO Red Book, Vol. II, Pages 6-80.

Figure 1.6 below shows the occurrences of most frequent types of fund misuse.

Figure 1.6

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Voluntary Services vs. Gratuitous Services

The ADA generally prohibits federal officers or employees from accepting “voluntary services.” However, permits acceptance of “gratuitous services.”

Voluntary Services – An officer or employee may not accept voluntary services or employ personal services exceeding those authorized by law, except for emergencies involving the safety of human life or the protection of property. Acceptance of such services is a Per Se violation of the ADA. However, the federal statutes provide several examples detailing when an officer or employee may accept voluntary services, even in non-emergency situations. Examples of voluntary services that officers or employees are authorized by law to accept include, but are not limited to: (1) alternate dispute resolution (5 U.S.C. 593), (2) student interns (5 U.S.C. 3111), (3) military departments may accept voluntary services for medical care, museums, natural resource programs, or family support activities, and (4) Red Cross (accepted by the President). Volunteers are also authorized to work in a base legal office. See TJAG POLICY MEMORANDUM: TJAGC Standards – 8 (17 Aug. 2005)

Gratuitous Services – It is not a violation of the ADA to accept free services from a person who agrees, in writing, to waive entitlement to compensation according to the Army’s Authority to Accept Services from the Am. Assoc.

of Retired Persons/Nat’l Retired Teachers Assoc., B-204326, 1982 U.S. Comp. Gen. LEXIS 667, July 26, 1982.

The key element which makes gratuitous services allowable under the law, is that the person providing the free service agrees in writing not to seek compensation for his or her work. Note, however, that an employee may not waive compensation if a statute establishes entitlement, unless another statute permits waiver. The Agency for Int’l Dev.—Waiver of Compensation Fixed by or Pursuant to Statute, B-190466, 57 Comp. Gen. 423 (1978) (AID employees could not waive salaries). In addition, be aware that acceptance of gratuitous services may be an improper augmentation of an appropriation if federal employees normally would perform the work, unless a statute authorizes gratuitous services.

ADA Sanctions

Adverse Personnel Actions – 31 U.S.C. § 1349(a), 1518 – An officer or employee of the United States Government or of the District of Columbia Government violating section 1341(a) or 1342 of this title shall be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office.

Likewise, an officer or employee of the United States Government or of the District of Columbia Government violating section 1517(a) of title 31 shall be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office. Military members who commit ADA violation may also be subject to adverse action under the Uniform Code of Military Justice. Finally, good faith or mistake of fact will not relieve an in individual from responsibility for an ADA violation.

Criminal Penalties – 31 U.S.C. § 1350 – An officer or employee of the United States Government or of the District of Columbia Government knowingly and willfully violating section 1341(a) or 1342 of this title shall be fined not more than $5,000, imprisoned for not more than 2 years, or both.

Research Starting Points

Fiscal law rules are embodied in a variety of documents ranging from the U.S. Constitution, to case law, federal statutes, and regulatory guidance. Useful sources in conducting fiscal law research include:

1. U.S. Constitution, Article I, Section 9, Clause 7, found at http://www.law.cornell.edu/constitution/constitution.overview.html

2. Titles 10 and 31, United States Code, found at http://www.law.cornell.edu/ptoa/uscode

3. Decisions of the Comptroller General of the United States, published by the Government Printing Office; also located on the GAO) website at http://www.gao.gov/legal/lawresources/resources.html

4. DOD Financial Management Regulation 7000.14-R, found at http://www.DoD.mil/comptroller/fmr/

5. DFAS-IN 37-1, Finance and Accounting Policy Implementation, found at http://www.asafm.army.mil/offices/BU/Dfas371.aspx?OfficeCode=1200

6. AFI 65-601, vol. 1, Budget Guidance and Procedures, 3 Mar 05, found at http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-601v1/afi65-601v1.pdf

7. AFI 65-608, Antideficiency Act Violations, 18 Mar 05, found at http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-608/afi65-608.pdf

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http://www.law.cornell.edu/constitution/constitution.overview.html http://www.law.cornell.edu/ptoa/uscode http://www.gao.gov/legal/lawresources/resources.html http://www.dod.mil/comptroller/fmr/ http://www.asafm.army.mil/offices/BU/Dfas371.aspx?OfficeCode=1200 http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-601v1/afi65-601v1.pdf http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-601v1/afi65-601v1.pdf http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-608/afi65-608.pdf

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8. Principles of Federal Appropriations Law (AKA “GAO Red Books”), four-volume treatise published by the GAO, found at http://www.gao.gov/special.pubs/redbook1.html

9. A Glossary of Terms Used in the Budget Process, published by the GAO, found at http://www.gao.gov/new.items/d05734sp.pdf

10. SAF/FM Fiscal Law Training On-Line Tutorial, found at https://fmonline.ousdc.osd.mil/FMmyLearn/CourseList.aspx?Delivery_Method=Web Based Training:3&Subject_Area=Fiscal Law:8

11. US Army’s The Judge Advocate General’s Legal Center and School (TJAGLCS) webpage is found at https://www.jagcnet.army.mil/TJAGLCS. To access the fiscal law materials, click on “TJAGLCS Publications.”

The Army’s most recent Fiscal Law Course Deskbook can be found at this location.

Credits

The AF Judge Advocate School (USAF JAG), located at Maxwell AF Base, provided the following information with only formatting changes in order to meet our purposes here. We appreciate the USAF JAG School sharing their authoritative expertise.

References and Resources

Templates o N/A

Policies and Regulations o AFI 65-601, vol. 1, Budget Guidance and Procedures o AFI 65-608, Antideficiency Act Violations o DFAS-IN 37-1, Finance and Accounting Policy Implementation o DOD Financial Management Regulation 7000.14-R o Titles 10 and 31, United States Code o U.S. Constitution, Article I, Section 9, Clause 7

Forms o N/A

Documents o Principles of Federal Appropriations Law

File Directories o N/A

Websites o A Glossary of Terms Used in the Budget Process o Decisions of the Comptroller General of the United States o SAF/FM Fiscal Law Training On-Line Tutorial o U.S. Army’s The Judge Advocate General’s Legal Center and School (TJAGLCS)

Systems

Advice and Tips

SECTION J - ATTACH 7D

http://www.gao.gov/special.pubs/redbook1.html http://www.gao.gov/new.items/d05734sp.pdf https://fmonline.ousdc.osd.mil/FMmyLearn/CourseList.aspx?Delivery_Method=Web%20Based%20Training:3&Subject_Area=Fiscal%20Law:8 https://fmonline.ousdc.osd.mil/FMmyLearn/CourseList.aspx?Delivery_Method=Web%20Based%20Training:3&Subject_Area=Fiscal%20Law:8 https://www.jagcnet.army.mil/TJAGLCS http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-601v1/afi65-601v1.pdf http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-608/afi65-608.pdf http://www.asafm.army.mil/offices/BU/Dfas371.aspx?OfficeCode=1200 http://www.dod.mil/comptroller/fmr/ http://www.law.cornell.edu/ptoa/uscode http://www.law.cornell.edu/constitution/constitution.overview.html

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Green Book – 1.2 Legislative Process

Congressional Process Appropriations Continuing Resolution Authority Obligation Authority Distribution Summary References and Resources Advice and Tips

Introduction This chapter covers a very high-level overview of the legislative process involving Department of Defense (DoD) funding.

Congressional Process Each February the DoD submits the next fiscal year budget to the President who forwards it to Congress. Following submission of the President’s Budget (PB), the Budget Committees begin hearings to examine economic assumptions and spending priorities in preparation for drafting the first concurrent resolution. The Budget Committee sets levels of new budget authority and spending, revenue, and debt levels. After floor action, the budget resolution goes to conference.

Conferees reconcile The United States House of Representatives (House) and United States Senate (Senate) differences and produce a final agreement. After final agreement, the House, and Senate vote and, upon passage, it becomes the budget. While the Budget Committees are trying to pass a budget, the authorization and appropriations committees are holding hearings on the programs under their jurisdiction. The authorization and appropriations bills are supposed to pass no later than 01 October in preparation for the beginning of the new fiscal year.

The Congressional process has two (2) flows: authorizations and appropriations.

Authorizations are basic substantive legislation enacted by Congress, which sets up or continues the legal operation of a federal program or agency. In addition, authorizations are for a specified period of time or sanction a particular type of obligation or expenditure within a program. Such legislation is normally a prerequisite for subsequent appropriations or other kinds of budget authorities to be contained in the Appropriation Acts. The Appropriation Act may subsequently limit the amount of budget authority provided or may authorize the appropriation of “such sums as may be necessary.”

An appropriation is a provision of legal authority by an act of Congress that permits federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriation usually follows enactment of authorizing legislation. An Appropriation Act is the most common means of providing budget authority. Appropriations do not represent cash actually set aside in the Treasury for purposes specified in the appropriation act; they represent limitations of amounts, which agencies may obligate during the time specified in the respective Appropriation Acts.

Two different types of Congressional actions must take place for the budget process.

Authorization – The House National Security Committee (HNSC) and Senate Armed Services Committee (SASC) validate the DoD budget programs. When satisfied, they authorize the programs and pass the bill

Appropriation – The House and Senate Appropriation Committees (HAC and SAC) actually appropriate dollars for all federal agencies that use governmental funds. The committees are made up of those with budgetary expertise and, when satisfied, those individuals pass the budget in the form of several appropriation acts

The conduction of hearings is to gather information and views from DoD officials. Following the hearings on introduced bills, committees meet to “mark-up” legislation. The purpose of these meetings is to decide whether the bill:

1. Should be amended

2. Should be referred to the full House or Senate for a vote

A bill cannot become law until signed by the President. The President can only sign a bill passed in exactly the same form by the House and the Senate. The President has 10 days in which to sign the bill. If the President “vetoes” the bill, Congress may override his decision by a two-thirds vote in both the House and Senate.

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Figure 1.7 below depicts the steps involved in the budget process.

Figure 1.7

Appropriations An appropriation is the highest fund code level within the resource management system. Air Force Manual (AFMAN) 65- 604, Appropriation Symbols and Budget Codes (Fiscal Year 2013), updated every year, gives a detailed description and accounting of each appropriation the Air Force uses. Each appropriation also has a specific Fund Code (FC), which is a two-digit alphanumeric that also describes the appropriation. The movement of funds from one appropriation to another requires Congressional approval.

Continuing Resolution Authority If the Appropriation Bills remains unsigned as of 1 October, Congress must provide authority to obligate funds. This authority enacted through a Continuing Resolution Authority (CRA) and when signed by the President continues federal expenditures. A CRA usually specifies a designated period and maximum rate at which the agency may incur obligations, based on the rate of the prior year, the PB request, or Appropriation Bills passed by either or both Houses of the Congress. To avoid the disruptive effects of these occurrences, Congress passes continuing appropriations legislation to provide “stopgap” budget authority. Stopgap authority provides funding for a specified amount of time at levels equal to:

The prior fiscal year The President’s requested level for the coming fiscal year The level approved by the House or Senate

Restricted funding includes the inability to start new programs. In some years, continuing appropriations resolutions provided funding for the full-year, taking the place of a regular Appropriations Act. Congress can also enact a Supplemental Appropriations Act. This supplemental appropriations fund covers unanticipated expenditures during the current fiscal year and is in response to a request by the Executive Branch.

Obligation Authority Distribution After the President signs the Appropriation and Authorization Bills into law, the budget monies go through the following distribution until it is finally available for each Responsibility Center (RC) or Civil Engineer (CE) as shown in figure below.

Figure 1.8 depicts the Obligation Authority Distribution.

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Figure 1.8

Summary You should now have a general understanding of legislative process involving the DoD funding and the following topics:

Congressional Process Appropriations Continuing Resolution Authority (CRA) Obligation Authority Distribution

Policies and Regulations o AFMAN 65-604, Appropriation Symbols and Budget Codes (Fiscal Year 2013) o 2013 Fiscal Law Deskbook (Chapters 1-3)

Forms

Documents

File Directories

Websites

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http://www.loc.gov/rr/frd/Military_Law/pdf/fiscal-law-deskbook_2013.pdf

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Green Book – 1.3 Planning, Programming, Budgeting, and Execution

Introduction PPBS Introduced to Improve the Budgeting Process PPBS Becomes PPBE-A Focus on Execution Future Years Defense Program The PPBE Process Summary References and Resources Advice and Tips

Introduction

In the early part of the 20th century, the federal budget process emphasized the control of actual expenditures. Budget estimates were totals of expenses for items such as salaries, spare parts, or office supplies. Department of Defense (DoD) lacked a mission or functional structure to classify costs. In addition, the DoD system was highly decentralized, and resource formulation and allocation processes across the services were duplicative, inequitable, and limited to consideration of a single budget year. In the 1940s and 50s, a number of reforms shifted the focus from budget estimates to performance measurement. Performance measures of effectiveness were developed (for example, “miles of road paved per day”), and the budget based upon functions, activities, and projects. However, there still did not exist a systematic way to ensure that the budget supported the mission or plans of the DoD. Consequently, when the budget changed hands or when new issues received precedence, or objectives/planned courses of action changed, continuity from year to year was unstable.

PPBS Introduced to Improve the Budgeting Process

The Planning, Programming, and Budgeting System (PPBS) had its birth in 1962 under then Secretary of Defense, Robert McNamara. Proponents of PPBS believed achievement in efficiencies and improvements in government operations are through a common approach as listed here:

Establishing long-range planning objectives Analyzing the costs and benefits of alternative programs that would meet those objectives Translating programs into budget and legislative proposals and long-term projections

PPBS differed from the traditional budgeting process that preceded it in two significant ways.

1. Emphasized Objectives: PPBS focused less on the existing base and annual incremental improvements to it, and more on the objectives and long-term alternative means for achieving them. Because of this shift in focus, PPBS was elevated to a level on par with budgetary management and control.

2. Linked Planning and Budgeting: By means of programming, PPBS instilled a process that essentially defines a procedure for distributing available resources equitably among the many competing or possible programs.

PPBS Becomes PPBE-A Focus on Execution

PPBS imposed financial discipline, integrated the information necessary to develop effective programs to address existing and emerging needs, and established a disciplined review and approval process. However, DoD’s processes for strategic planning, identifying needs for military capabilities, developing and acquiring systems, and developing programs and budgets continued to exist as disparate systems.

The strategic planning process did not explicitly drive the identification of needs for military capabilities. In addition, the program and budget development processes; while imposing fiscal discipline, often have failed to integrate strategic decisions into a coherent defense program resulting in more time spent on deciding how much to spend on a program rather than evaluating the investment.

In 2003, the DPG tasked the Senior Executive Council to lead a study and identify improvements to the DoD decision-making and budgeting process. Known as the DPG 20 Streamlining Decision Process, the study recommended the PPBE process. Each year, the Office of Secretary of Defense (OSD) and Congress receive a new detailed planned and programmed budget. The annual budget cycle works with a five-year span. PPBE provides a vehicle for decision makers to examine and analyze decisions by taking into consideration influencing environmental factors such as threats, political and economic climates, technological developments, and resource availability. The processes within PPBE are based on and are consistent with the objectives, policies, priorities and strategies derived from National Security Decision directives;

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With the introduction of PPBE, a major thrust of DoD moving forward was to increase the effectiveness of the programming and budgeting process and to place significant importance on budget execution. Specific emphasis is on linking any major decisions both to the Defense Planning Guide programs and budget development, before focusing on the performance results.

The new PPBE process guides the DoD in developing strategy, identifying needs for military capabilities, planning programs, estimating, allocating, and acquiring resources, and other decision processes. In addition, the change more closely aligns the DoD’s internal cycle with external requirements embedded in statutes and administration policy.

Future Years Defense Program

The PPBE process is captured in the Future Years Defense Program (FYDP), an Official, DoD, computerized database that summarizes forces, resources, and equipment associated with all DoD programs approved by the Secretary of Defense; it also summarizes the changes that occur throughout the process. The FYDP captures the total DoD program Authoritative statement of the Department’s year by year plan in:

Force Structure: how many ships, brigades and divisions, aircraft squadrons and wings, etc., will operate Procurement: how many ships, tanks, aircraft, missiles, etc.