CDFM - Module 3

What are the three tests that must be met for use of the Necessary Expense doctrine?

Must bear a logical relationship
Not prohibited by law
Not funded elsewhere
(p 3.1.17)

Who grants relief of liability to a certifying officer for erroneous or illegal payments in the Department of Defense?

The Defense Finance and Accounting Service (DFAS)
(p. 3.1.51)

What type of budgetary resources remains available for new obligations for more than one fiscal year?

Multi-year authority
(p. 3.1.24)

What type of Congressional resolution can be thought of as a temporary appropriations act?

Continuing Resolution (CR)
(p. 3.1.41)

What agency apportions funds for a working capital fund?

The Office of Management and Budget (OMB)
(p. 2.1.71)

What is the acronym for disbursing office identification numbers?

Disbursing Station Symbol Numbers (DSSN)
(p. 3.2.30)

What three primary types of officials are accountable Individuals in the DoD?

Certifying Officers (CO),
Disbursing Officers (DO),
Departmental Accountable Officials (DAO)
(p. 2.2.21, 2.2.64)

What is the normal collection method for debts owed by active military members and civilian employees who are still in service?

Salary Offset garnishing
(p. 3.2.38)

When collecting debts owed by vendors that have failed to properly respond to the demand letters, what is the next step?

Do Not Pay List
(p. 3.2.40)

When in doubt about the proper use of an appropriation, what may the disbursing officer request form the OSD General Counsel on the propriety of the prospective payment?

An Advance Decision
(p. 3.2.12)

When a civilian employee moves from a job overseas to a job in the states, which organization pays for the Permanent Duty Travel?

The "losing" activity
(the OCONUS activity)
(p. 3.2.22)

Name the supporting documents required in the DoD Payment Package?

Contract
Invoice
Proof of Receipt
Acceptance Document
(p. 3.2.24)

Name two key forms that provide accountability and control by Disbursing Officers?

Standard Form 1219, Statement of Accountability (monthly)
DD Form 2657, Daily Statement of Accountability
(p. 3.2.44)

What term is used to describe Federal Government funds that have been paid but have not yet been identified to a specific organization?

Undistributed Disbursement
(p. 3.3.39)

The aggregate amount of an entity's funds in the Treasury is in what account?

Fund Balance with Treasury
(p. 3.3.39)

Which three Federal agencies established the FASAB?

The Government Accountability Office (GAO),
the Department of Treasury, and
the Office of Management and Budget (OMB)
(p. 3.3.13)

What is the Federal law that specifically required existing CFO agencies to have financial statements that successfully pass a financial audit?

The Government Management Reform Act of 1994
(p. 3.4.5)

Which standards generally apply to all Federal Government audits?

GAO Standards or GAGAS
(p. 3.4.10)

How many hours of continuing professional education must an auditor complete every 2 years?

80 hours in 2 years
(p. 3.4.14)

What is the minimum number of hours that must be completed in any year of the 2-year period?

20 hours minimum each year
(p. 3.4.14)

The auditor is restricted access to essential data necessary to satisfy the audit objective. What type of impairment would this be?

External Impairment
(p. 3.4.12)

Which type of audit is expected to determine whether:
- The financial information is presented in accordance with established stated criteria;
- The entity has adhered to specific financial compliance requirements; and
- The entity's internal control structure over financial reporting and/or safeguarding of assets is suitably designed and implemented to achieve the control objective?

Financial Audit
(p. 3.4.22)

Which type of audit is expected to determine whether:
- The entity is acquiring, using, and protecting its resources economically and efficiently;
- The entity's programs are achieving the desired results or benefits; and
- The entity is accomplishing its mission in accordance with applicable laws, regulations, and public policies.

Performance Audit
(p. 3.4.22)

What does Title 31 do?

Provides statutory authority for the use, control, and accountability of public funds.

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.

Basic Axiom of Fiscal Law

What are the sources of Fiscal Law?

- The Constitution
- Authorization Acts
- Appropriation Acts
- General Statutes
- CG Decisions & Courts

Which part of the constitution empowers the Congress to pass bills for the raising of revenue, and delineates how bills will pass from the Congress to the President for signature or veto?

Article 1, Section 7

Which part of the constitution empowers Congress to collect taxes?

Article 1, Section 8, Clause 1

Which part of the constitution requires appropriations in law before money may be spent from the Treasury?
The term appropriation applies broadly to any law that permits a Government employee to spend money, not just to the regular appropriation bill.

Article 1, Section 9, Clause 7

What did the Budget and Accounting Act of 1921 provide?

- Required the President to submit an annual budget to Congress for all three branches of the Federal Government
- Created a budget office for the President (chgd to OBM in 1970)
- Established the General Accounting Office (now called the Government Accountability Office)

This law:
- Governs the congressional budget process
- Defines some key budget terms, such as budget authority, that are used in all phases of the budget process
- Establishes the House and Senate Budget committees and the Congressional Budget Office (CBO)

P.L. 93-344 and P.L. 100-119 Congressionl Budget Act of 1974

This law prescribes rules and procedures designed to constrain spending and receipts legislation.

P.L. 99-177 Congressional Balanced Budget and Emergency Deficit Control Act of 1985

These sections prescribe rules and procedures for budget execution. The overarching statutory requirement for the use, control and accountability of funds are found here.

31 USC 13 and 15

Responsible for use of appropriated funds as to the proper Purpose, Time and Amount and for those US Codes pertaining thereto.

Fiduciary Certifier

Responsible for the accuracy of the disbursement of funds.

Pecuniary Certifier

(True/False) There is relief from ADA violations in certain circumstances.

False

Disbursing officers, cashiers, and collecting officers all have pecuniary responsibility for the monies entrusted to their case and will be held ____ ____ for any loss or theft of these funds.

personally liable

(True/False) Relief can be granted for either a loss of cash or miscertification when certain conditions are met.

True

What are the 3 dimensions of the availability of budgetary resources?

Purpose / Time / Amount

Funds may be obligated and expended only for the purposes authorized in appropriations acts or other laws.

Purpose

The period of time during which budgetary resources may be used incur new obligations is different from the period of time during which the budgetary resources may be used to incur expenditures.

Time

Obligations and expenditures may not exceed the amounts established in law. Examples are interest on the debt, Federal retirement, social security, and the judgement fund.

Amount

Appropriations control by purpose are part of what?

31 USC 1301 - Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.

The various purposes for which funds are authorized are found in general and specific authorization bills passed by ____ and codified in the statues.

Congress

The _______ authorizes an agency head to recognize superior performance with awards of cash, time off, or merchandise, and to incur expenses determined necessary to enhance the recognition of the awardee.

Government Employee Incentive Awards Act
(5 USC 4503)

What are the 3 test for necessary expense doctrine?

- Logical Relationship
- Not Prohibited by Law
- Not Funded for Elsewhere

Where is the necessary expense doctrine defined?

6 Comp. 619 (March 25, 1927)

Appropriations control by Time are part of what?

31 USC 1502 - The balance of a fixed-term appropriation is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period.

What are the 2 basic uses of appropriations?

Obligations and Expenditures

___ are legal reservations for which payments, or expenditures, will be made in the future.

Obligations

___ are the cash payments made to liquidate an obligation.

Expenditures

A violation of the time code will results in?

ADA

What is the Bona Fide Needs Rules?

a Test to determine when to obligate and for how much consumption or effort the obligation should cover.

When an agency maintains inventories of commonly used items, does the Bona Fide Needs Rule prevent maintaining legitimate inventories at reasonable levels?

No

Does the Bona Fide Needs Rules permit an obligation in one fiscal year and delivery in a subsequent fiscal year even when the production lead-time of the materials requires obligation in one fiscal year in order for the material to be available for installation in a later fiscal year.

Yes

The bona fide needs occurs in which year (when the order is placed or when the goods and services are delivered)?

When the order is placed

___ services are those for which the the Government receives something useful immediately upon the expenditure of funds or by the end of the fiscal year, e.g. routine maintenance, housekeeping services, and trash collection.

Severables

___ services are those that cannot be separated into increments that will provide something useful at the end of the fiscal year, e.g. overhaul of a ship that takes two or more years or development of a software program that will result in a definite end product after more than one year of work.

Non-severable

Severable services are paid...

month to month

The qualification to the rules on severable services is that the 12-month contract can cross fiscal years as long as it is for no more than ___ months.

12

What reference indicates the qualifications of a 12-month severable contract?

10 USC 2410(a)

Training that begins in the following year can be charged to the current year if the Government must make:

1) a payment or deposit in the current year
2) the scheduling is beyond the Governments control
3) the time between obligation and performance is not excessive

What is an important exception to the Bona Fide Needs Rules?

Multi-year service contracting authority

The multi-year service contract authority permits the contracting up to how many years?

5, one year increments

What 2 situations cause a change in contract scope?

Out-of-Scope
In-Scope

What happens if a contract modification exceeds the general scope of the original contract?

the modification amounts to a new obligation and is chargeable to funds current at the time the modification is made.

When an upward price adjustment is required in a subsequent year, if the answer to the question is yes,

then a with-in scope price adjustment, which is requested and approved in a subsequent year will normally be charged against the appropriation current at the time the contract was awarded, even though the appropriation may now be expired

When do agencies have to reimburse the Judgement Fund (current year funds used)?

1) Contract Disputes
2) No fear act
3) EEO Settlements & Claims

What is it called when it becomes necessary to terminate a contract because the contractor defaults?

Contractor Default

What is it called when an agency voluntarily acts to reduce the scope of a contract or termination of the contract for its own convenience will not entitle the agency to obligate expired funds to issue a replacement contract.

Convenience of the Government

Government may obligate same year funds previously obligated for a replacement contract for amounts less, same or greater than originally obligated if:

- bona fide need still exists
- same or lesser scope of work
- replacement contract awarded in a timely manner

What are the types of appropriation lifes?

- Single Year
- Multi-Year
- No Year

Military Personnel (MILPERS) has a ____ expense appropriation type.

1 year

Research, Development, Test & Evaluation (RDT&E) has a ____ expense appropriation type.

2 years

Operation & Maintenance (O&M) has a ___ expense appropriation type and up to ____ amount limitation.

1 year; minor construction up to $2,000,000 or unit cost of < $250k

Shipbuilding and Conversion, Navy (SCN) has a ___ expense appropriation type

5 years

No-Year Appropriations are covered by?

31 USC 1555 - Agency head or President determines its purpose has been fulfilled, and no disbursements have been made for two consecutive fiscal years

In the Appropriation Life Cycle, the adjustments and payments are charged to currently available appropriation of same type, up to lesser of ___% of currently available appropriation or unexpended balance balance of closed appropriation

1%

At the end of ___ after the expiration of the appropriation year, all unliquidated obligations and expired budget authority are cancelled and deposited into the Misc Receipts of the Treasury and what is the reference?

5th year; 31 USC 1552

What requires that approval be sought from the head of the agency if obligations from an expired appropriation during a fiscal year exceed $4 million for any program?

31 USC 1553

31 USC 1553 requires that approval be sought from the Authorization and Appropriation committees if obligations from an expired appropriation during a fiscal year exceed ___ at the program level. The Congress must be given ___ days notice.

$25 million; 30 days

After an appropriation is cancelled, what happens with any outstanding obligations?

any obligations or adjustments to obligations would have been properly chargeable to that appropriation may be paid from the unexpired appropriation that is available for obligation for the same purpose as the closed account.

What is the 1% requirement?

Pursuant to 31 USC 1553(b), not to exceed 1% of the total appropriations for this account, is apportioned for the purpose of paying legitimate obligations related to cancelled appropriations.

DCAA has to audit prior to closeout. On April 3, 2012, an agency receives an invoice properly invoiced that obligates in 2005 using their 2005 rate appropriation from which account?
a) FY2005 Rate
b) Any 2006-2010
c) 2012
d) Either 2011 or 2012

d) Either 2011 or 2012

Obligating or expending in advance or in excess of the appropriation is covered by

31 USC 1341

Accepting voluntary services for the United States is covered by

31 USC 1342

Obligating or expending in excess of the apportionment or reapportionment or obligating or expending in excess of an administrative subdivision of an apportionment to the extent provided in the agency's fund control regulations prescribed under Section 1514 is covered by

31 USC 1517

Appropriation control by amount are part of what?

31 USC 1341 - Obligating or expending in advance or in excess of the appropriation
31 USC 1342 - Accepting voluntary services for the United States
31 USC 1517 - Obligating or expending in excess of the apportionment or reapportionment or obligating or expending in excess of an administrative subdivision of an apportionment to the extent provided in the agency's fund control regulations prescribed under Section 1514

What are the key provisions of the ADA 31 USC 1341

- Make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation
- Involve either Government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law

Authority in appropriations acts and other provisions of law provide authority to incur new obligations

Appropriations

An authorization for an agency to pledge to pay a part or all the loan principal and interest to a lender in the event of default by a third party borrower.

Loan and Loan Guarantee Authority

The Concept of Earmarking includes:

- Not to Exceed (ceilings)
- Not Less Than (floors)
- Exclusively for (fences)

What is the exception of 31 USC 1342 - Voluntary Services law?

for emergencies involving the safety of human life or the protection of property

What are some of the interpretations and decisions pertaining to the Voluntary Services law?

- If the compensation for a position is fixed by law, then an appointee may not agree to service without compensation
- If the level of compensation is discretionary AND the compensation can be set at zero, THEN an appointment without compensation is permissible
- Example of statutorily authorized gratuitous services are (red cross, candy stripers, & museum volunteers)

What does section 1514 require?

agency in control of an apportionment to prescribe, by regulation, a system of administrative control consistent with accounting procedures prescribed under law.

What is the funding flow?

Appropriation > Apportionment > Allotment > Commitment (Certify) > Obligation > Outlay (Payment)

What 3 statues cover the concept of augmentation?

- 31 USC 3302(b) The miscellaneous receipts statute
- 31 USC 1301(a) the purpose statute
- 18 USC 209 Employee Compensation Prohibition from outside sources

When can the agency accept gifts?

May accept contributions of
- money or real property from any person, foreign Government, or international organization
- services, supplies, real property, or the use of real property under a mutual defense or similar agreement

What is a recent change to what an employee can accept as a gift?

Employees can retain travel promotional items, such as frequent flyer miles earned while on official travel.

What are the ADA Penalties

Administrative - up to and including, when circumstances warrant, suspension from duty without pay or removal from office
Criminal - $5k fine, 2 years imprisonment, or both