Introduction to Fiscal Law
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1 Pacific Air Forces Introduction to Fiscal Law Maj Reagan Beaton Chief, Contingency Contracting Office of the Staff Judge Advocate Headquarters, Pacific Air Forces 1
2 Roadmap Background Key Terminology Limitations on the Use of Appropriated Funds Why should I care? 2
3 What is Fiscal Law? Fisc the treasury of a prince; a royal or state treasury Fiscal of or pertaining to the public treasury or revenues Law constitution, statutes, regulations, case law / GAO opinions Fiscal Law law governing receipt and disbursement of public funds 3
4 The Fiscal Philosophy 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. -- United States v. MacCollom, 426 U.S. 317 (1976). 4
5 Reconciling Competing Philosophies? Operational: Boldness, initiative, speed Institutional: Just do it Procurement: Unless prohibited, it s OK Fiscal: You better not do it unless you can find where clearly it says you can do it Fiscal Law: the art of reconciling the above.getting to yes while keeping the boss out of jail 5
6 What is Fiscal Law? At its core, Fiscal Law is NOT about : efficiency government savings best use of taxpayer dollars All worthy goals and lofty ideals, but Fiscal Law is about one thing CONTROL 6
7 The Power of the Purse 7
8 Fiscal Framework: The Big Picture 8
9 What is Fiscal Law? Congress controlling how we spend money. Purpose: What can we spend this money on? Time: What year s money must be used? Amount: How much can we spend? 9
10 Roadmap Background KEY TERMINOLOGY Limitations on the Use of Appropriated Funds Why should I care? 10
11 Fiscal Year 11
12 Period of Availability POA 5 Years Examples: Operation and Maintenance (O&M) = 1 year Procurement = 3 years MILCON = 5 years 12
13 Obligation An obligation is any act that legally binds the government to make payment. Distinguished from commitments which are administrative reservations of funds. Obligations represent the amounts of: Orders Placed Contracts Awarded Services Received 13
14 Budget Authority Congress finances federal programs and activities by granting budget authority. Budget Authority = Obligation Authority Budget Authority means the authority provided by Federal Law to incur financial obligations 2 U.S.C. 622(2) 14
15 Authorization Act Passed annually by Congress Authorizes the appropriation of funds for programs and activities (Congressional mandate to itself) Authorization Act Budget Authority Frequently contains restrictions or limitations on the obligation of appropriated funds 15
16 Appropriations Act Most common form of Budget Authority The services receive the bulk of their funds from two* annual appropriations: DoD Appropriations Act Military Construction Appropriations Act * Some supplemental appropriations for GWOT/OCO Appropriations must be stated expressly May NOT be inferred or made by implication 16
17 Appropriations Process 17
18 Comptroller General & the GAO The Comptroller General heads the Government Accountability Office (GAO) Formerly the General Accounting Office The GAO is an investigative arm of Congress charged with examining all matters relating to the receipt and disbursement of public funds Issues opinions and reports to Federal agencies concerning the obligation and expenditure of appropriated funds Why care what GAO says? 18
19 Roadmap Background Key Terminology LIMITATIONS ON THE USE OF APPROPRIATED FUNDS Why should I care? 19
20 Fiscal Law: The Big Picture Congress controlling how we spend money. Purpose: What we can buy with particular funds. Time: For what period of time we can obligate the money. Amount: How much we can spend. 20
21 PURPOSE Use of Appropriated Funds General Limitations Time Amount 21
22 Purpose Statute Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law U.S.C
23 Finding Purpose Express statutory purpose, or 3 Part Purpose Test Necessary and incident to an appropriation s purpose. Must not be prohibited. Must not be provided for otherwise. 23
24 Finding Purpose Is there an Express Statutory Purpose? 2008 NDAA SEC REIMBURSEMENT OF ENVIRONMENTAL PROTECTION AGENCY FOR CERTAIN COSTS IN CONNECTION WITH THE ARCTIC SURPLUSSUPERFUND SITE, FAIRBANKS, ALASKA. From funds authorized to be appropriated by section 301(16) for Environmental Restoration, Defense-wide, the Secretary of Defense may, notwithstanding section 2215 of title 10, United States Code, transfer not more than $186, to the Hazardous Substance Superfund to reimburse the Environmental Protection Agency for costs incurred pursuant to the agreement known as "In the Matter of Arctic Surplus Superfund Site, U.S. EPA Docket Number CERCLA : Administrative Order on Consent for Remedial Design and Remedial Action," entered into by the Department of Defense and the Environmental Protection Agency on December 11,
25 Finding Purpose Not so obvious statutory purpose? Department of Defense and Full-Year Continuing Appropriations Act, 2011, PL
26 Purpose Use of Appropriated Funds General Limitations TIME Amount 26
27 Limitations as to Time Funds must be obligated during their period of availability, and the obligation must be for a bona fide need of that period. Currents funds for current needs. 27
28 Period of Availability POA 5 Years 28
29 Purpose Use of Appropriated Funds General Limitations Time AMOUNT 29
30 The Antideficiency Act Obligating in excess of an appropriation (or apportionment or formal subdivision). Obligating in advance of an appropriation. Accepting voluntary services. 30
31 Roadmap Background Key Terminology Limitations on the Use of Appropriated Funds WHY SHOULD I CARE? 31
32 Why is this Important? 1. Budget is Policy 2. ADA violation is punishable with fines up to $5,000 and 2 years in prison 3. Increased security / stability = increased oversight no combat pass 4. Your boss does not want to be on C-SPAN 32
33 ADA Violation Reports 33
34 ADA Violation Reports 34
35 5. Bad economy + enormous debt = significant cut backs 6. You re a taxpayer too 7. It s the LAW and service members obey the LAW 8. You re the subject matter expert! 9. Even if you have to say no, there s usually a way to get to yes 10. Lawyers think everything they talk about is important 35
36 Questions??? 36
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