DoD 7000.14-R Financial Management Regulation PDF

DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 VOLUME 14, CHAPTER 2: “ANTIDEFICIENCY ACT VIOLATIONS” SUMMARY OF MAJOR CH...

DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 VOLUME 14, CHAPTER 2: “ANTIDEFICIENCY ACT VIOLATIONS” SUMMARY OF MAJOR CHANGES Changes are identified in this table and also denoted by blue font. Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision. Unless otherwise noted, chapters referenced are contained in this volume. Hyperlinks are denoted by bold, italic, blue and underlined font. The previous version dated June 2020 is archived. PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE All This chapter has been certified as current. Current 2-1 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Table of Contents VOLUME 14, CHAPTER 2: “ANTIDEFICIENCY ACT VIOLATIONS”................................. 1 1.0 GENERAL......................................................................................................................... 3 1.1 Purpose........................................................................................................................... 3 1.2 Authoritative Guidance.................................................................................................. 3 2.0 VIOLATIONS................................................................................................................... 5 2.1 General Violations.......................................................................................................... 5 2.2 Recording Obligations/Expenditures............................................................................. 6 2.3 Recording Errors/Omissions.......................................................................................... 6 3.0 CAUSES OF VIOLATIONS............................................................................................. 6 4.0 PREVENTING VIOLATIONS......................................................................................... 7 4.1 Requirements.................................................................................................................. 7 4.2 Common Violations....................................................................................................... 9 Figure 2-1. Potential Violations................................................................................................ 14 Figure 2-2. Violation Examples................................................................................................ 16 Figure 2-3. Reference Hyperlinks............................................................................................ 19 2-2 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 CHAPTER 2 ANTIDEFICIENCY ACT VIOLATIONS 1.0 GENERAL 1.1 Purpose This chapter explains the Antideficiency Act (ADA) and related funding statutes that consist of certain provisions of law prescribed in sections (§) of Title 31, United States Code (U.S.C.). It also provides examples of circumstances in which ADA violations may occur and establishes requirements to prevent ADA violations. Additional requirements are contained in Volume 3, Chapter 11. Any military member or Department of Defense (DoD) employee who violates any provision or limitation imposed by any law may violate the ADA and be subject to discipline and/or criminal penalties. 1.2 Authoritative Guidance 1.2.1. The ADA, prescribed in 31 U.S.C. §§ 1341–1342, and 31 U.S.C. § 1517, prohibits obligations and expenditures in excess of an appropriation or before an appropriation is available. 31 U.S.C. § 1517 is the primary foundation for the administrative control of funds set forth in Chapter 1. See Figure 2-3 for additional references. 1.2.1.1. Amount Limitation. 31 U.S.C. § 1341 stipulates that any officer or employee of the United States Government or of the District of Columbia government may not: 1.2.1.1.1. Make an obligation, expenditure, or authorize an obligation or expenditure of funds that exceeds the amount available in an appropriation or fund. 1.2.1.1.2. Involve the Government in any contract or obligation for the payment of money before an appropriation is made available, unless the law authorizes such contract or obligation. 1.2.1.2. Voluntary Services Limitation. 31 U.S.C. § 1342 stipulates that an officer or employee of the United States Government or of the District of Columbia government may not accept voluntary services on behalf of the Government or employ personal services in excess of that authorized by law, except as it may be necessary in emergencies involving the safety of human life or the protection of property. 1.2.1.3. Administrative Control of Funds, Amount Limitation. 31 U.S.C. § 1517 stipulates that an officer or employee of the United States Government or of the District of Columbia government may not make an obligation or expenditure or authorize an obligation or expenditure that exceeds an apportionment or amount permitted by a regulation prescribed for the administrative control of an appropriation, including any other formal administrative subdivision of funds designated by a DoD Component. See Chapter 1 for DoD administrative control of funds policy. 2-3 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 1.2.2. 31 U.S.C. § 1301, 31 U.S.C. § 1502(a), and 31 U.S.C. § 3302(b) are additional funding statutes. Noncompliance with these statutes may result in an ADA violation. 1.2.2.1. Purpose Statute. 31 U.S.C. § 1301 stipulates that appropriations must be applied only to the objects for which the appropriations were made, except as otherwise provided by law. 1.2.2.2. Time Limitation. 31 U.S.C. § 1502(a) stipulates that 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 and obligated within that period. See Volume 3, Chapter 8 for obligation policy and Volume 3, Chapter 10 for expired and closed account policy. 1.2.2.3. Miscellaneous Receipts Statute. 31 U.S.C. § 3302(b) requires an official or agent of the Government to deposit money received for the Government from any source into the miscellaneous receipts account of the U.S. Treasury without deduction for any charge or claim if the retention of the money is not authorized or exceeds authorized levels. 1.2.3. If sufficient amounts were available in the proper account for the proper fiscal year at the time of the obligation, and the amount is properly recorded as an obligation, then the use of the wrong appropriation (purpose) or the wrong fiscal year funds (time limitation) generally will not result in an ADA violation. It may be possible to adjust the accounts to replace the erroneously obligated funds with the proper funds. Under these conditions, the error can and should be corrected. 1.2.3.1. The use of the wrong appropriation (purpose) can be corrected if the proper funds (appropriation, year, and amount) were available at the time of the erroneous obligation, available during the entire period from the time of obligation until the time of correction, and available at the time of correction. In other words, to correct the error, not only must amounts have been properly available at the time of the error and be available at the time of correction, but the correct amount must be properly recorded as an obligation in the proper account, consistent with paragraph 2.2, thereby requiring accounting adjustments going forward from the time of correction to account for the change in balance. Funds must be available at the lowest level of the administrative subdivision of funds, i.e., the lowest level of the appropriation, apportionment, allotment, suballotment, or allocation at which the ADA violation occurred. 1.2.3.2. The use of the wrong fiscal year funds (time limitation) can be corrected if the proper funds (appropriation, year, and amount) were available during the entire period from the time of obligation until the time of correction, at the time of the erroneous obligation, and at the time of correction. In other words, to correct the error, not only must amounts have been properly available at the time of the error and be available at the time of correction, but the correct amount must be properly recorded as an obligation in the proper account, consistent with paragraph 2.2, thereby requiring accounting adjustments going forward from the time of correction to account for the change in balance. Funds must be available at the lowest level of the administrative subdivision of funds, i.e., the lowest of the appropriation, apportionment, allotment, suballotment, or allocation level at which the ADA violation occurred. 2-4 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 1.2.3.3. See Volume 3, Chapter 8, paragraph 080304.A for Bona Fide Need recording requirements. 2.0 VIOLATIONS 2.1 General Violations General ADA violations occur when: 2.1.1. Statutory limitation was exceeded for the amount authorized in an appropriation or fund, to include special and recurring statutory limitations or restrictions on the amounts for which an appropriation or fund may be used. 2.1.2. Statutory limitation on the purposes authorized in an appropriation or fund was violated and upon correction into the proper appropriation or fund, funds were not available at the time of the erroneous obligation or were not available when the obligation was recorded in the proper appropriation or fund. 2.1.3. Funding authority was issued in excess of the amount available in an appropriation or fund and the excess amount was obligated or expended. The issuance of funds by means of a formal administrative subdivision of funds (apportionment, allotment, suballotment, allocation or other formal administrative subdivision of fund), in an amount that exceeds the amount currently available, would result in an ADA violation if those excess funds distributed are obligated or expended. The issuance of a reimbursable order in excess of available funds may also result in an ADA violation. 2.1.4. Obligations or expenditures are authorized or incurred in excess of the amount of funds available at the formal administrative subdivision of funds level. Apportionments, allotments, suballotments, allocations and other formal administrative subdivision of funds designated by a DoD Component are subject to the provisions of the ADA; therefore, obligations and disbursements of funds that exceed these limitations are violations of the ADA. Incurring an obligation or disbursement in excess of a target versus a formal administrative subdivision of funds does not in itself create an ADA violation; however, if exceeding a target causes the governing formal administrative fund subdivision level or limitation to be breached, then a potential ADA violation arises. Errors that require correction by obtaining additional funds at a formal administrative subdivision of fund level cannot eliminate the fact that a violation likely has occurred and must be investigated. An exception applies when funds are required at the formal administrative subdivision level but funds were returned to higher headquarters as the result of the customary practice of sweeping up funds near the end of a fiscal year. 2.1.5. Obligations were made or authorized in advance of funds being available. 2.1.6. Obligations or expenditures of funds did not provide for a bona fide need of the fund or account (time violation) and upon correction into the proper fund or account, proper funds were not available at the time of the erroneous obligation or were not available when the obligation was recorded in the proper fund or account. 2-5 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 2.1.7. Obligations charged against a current account that would otherwise be properly chargeable (except as to amount) to an expired account, but sufficient funds did not exist in the applicable expired account to fund the obligation. 2.1.8. Obligations that otherwise would have been properly chargeable (both as to purpose and amount) to a canceled appropriation exceeds the limits specified in Volume 3, Chapter 10, subparagraph 100303.D. 2.1.9. Voluntary services were accepted, or personal services were employed, except as authorized by law. 2.1.10. Funds were retained without authority and were not deposited into the miscellaneous receipts of the U.S. Treasury but instead augmented an appropriation and, as a result, obligations or expenditures exceed the amount appropriated by Congress. 2.2 Recording Obligations/Expenditures A violation may not be avoided by declining to record valid obligations or expenditures in the official accounting records. All obligations or expenditures must be recorded accurately and promptly, even if the recording results in a negative amount in the appropriation, fund, or at the formal administrative subdivision of funds level. 2.3 Recording Errors/Omissions An ADA violation is not considered to have occurred when an over-obligation or over-expenditure results solely from recording a transaction in an erroneous account or recording an incorrect amount for a transaction. In each instance, the potential violation status is eliminated by correcting the erroneous transaction or by posting the omitted transaction. These actions must not include the deletion or adjustment of any valid transactions. If, after the proper recording of the transactions, an over-obligation or expenditure of the appropriation, fund or amount limited by a formal administrative subdivision of funds remains, then a potential ADA violation has occurred. 3.0 CAUSES OF VIOLATIONS ADA violations occur for several reasons. The following is a list of the most frequent causes of DoD ADA violations: 3.0.1. Inadequate or obsolete internal controls and standard operating procedures; 3.0.2. Internal controls and standard operating procedures that are ignored; 3.0.3. Lack of appropriate training; and 3.0.4. Inadequate supervisory involvement or oversight. 2-6 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.0 PREVENTING VIOLATIONS 4.1 Requirements Inadequate supervisory involvement and oversight combined with a lack of appropriate training are common throughout most DoD ADA violations. Therefore, supervisors of DoD personnel who have responsibility for control and use of DoD funds must ensure that their personnel receive proper oversight, support, and training to prevent violations. To assist in the prevention of ADA violations, DoD personnel must be knowledgeable of requirements in this chapter and Chapter 1. The following subparagraphs provide specific actions that must be taken to reduce or prevent violations. 4.1.1. Heads of DoD Components must: 4.1.1.1. Use the internal management control programs as required by DoD Instruction 5010.40, “Managers’ Internal Control Program Procedures,” to periodically assess the reliability of internal controls to prevent ADA violations. 4.1.1.2. Develop a full spectrum of DoD formal education programs for all military officers, from staff officer courses to executive development courses, and incorporate relevant aspects of this volume to highlight the potential pitfalls and risks associated with the ADA. This volume must be used as source material to conduct seminars and workshops targeted to general and specific audiences including financial, program, and project managers; engineers; contracting, information system, and comptroller personnel; commanders; supervisors; and managers. 4.1.1.3. Develop formal education structures to educate personnel about the ADA. Formal courses can be used to alert personnel to common violations and high-risk business transactions and decisions that can result in a violation. Course materials will clearly state that taxpayer funds should not be spent when the requirement is no longer needed, i.e., the requirement is no longer a bona fide need at that time. The DoD financial management community sponsors professional development courses that include discussions on ADA violations. These courses include the Army Comptroller and Advanced Resource Management Programs at Syracuse (NY) University; the Naval Post Graduate School at Monterey, California; and the Defense Financial Management and Comptroller School at Maxwell Air Force Base, Alabama. In addition, the U.S. Army Judge Advocate General School at Charlottesville, Virginia, includes a fiscal law course in its curriculum; and both the Enhanced Defense Financial Management training course hosted by the American Society of Military Comptrollers and the Under Secretary of Defense (Comptroller) Defense Financial Management Certification Program include fiscal law in their accreditation programs. 2-7 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.1.2. DoD commanders, supervisors, and managers must: 4.1.2.1. Be aware of the ADA, related funding statutes, types of violations, and causes of violations as described in this chapter. 4.1.2.2. Provide appropriate ADA training to financial, program, and project managers; engineers; and contracting, information system, and comptroller personnel. Provide fiscal law training to educate DoD personnel with regard to their fiduciary and legal responsibilities to prevent wasteful spending of appropriated funds. The focus of this training must include the basics of fund control, the ADA statute, and related funding statutes; the types of violations that can occur; the most frequent types of violations that occur within the DoD and their causes; the necessary training, supervision, and oversight of personnel who perform financial management or programmatic functions; and methods for preventing violations. Require that all executive development and financial management course content be updated to ensure proper use and good stewardship of appropriated funds. The training must be maintained to ensure the information remains current. Videos, computer courses or handbooks may be used for such training. 4.1.2.3. Identify key fund control personnel, incorporate the provisions of this volume into key fund control personnel training programs, require that key fund control personnel receive appropriations law training at least every three years, maintain the documents that identify key fund control personnel, and maintain documents that confirm completion of the appropriations law training. Key fund control personnel are those responsible for the proper assignment of funding on a commitment or obligation document before the obligation is incurred. Examples are resource managers, fund holders, funds certifying officials, and authorizing officials. Key fund control personnel should inquire with their individual DoD Components as to the appropriate source of training that satisfies this requirement. Appropriations law training requirements for certification of fund availability are separate from training requirements for certification for payment. Personnel that certify vouchers for payment must adhere to additional requirements as prescribed in Volume 5, Chapter 5. 4.1.2.4. Ensure key fund control personnel coordinate with requiring officials, such as program managers, contracting officers, and engineers, to verify that requests comply with funding statutes applicable to the assignment of funding on a commitment or obligation document before the obligation is incurred. This coordination should include ensuring delivery of supplies and/or the period of performance for services aligns with the lifecycle of the associated funds such that the obligation meets the bona fide need rules laid out in Volume 3, Chapter 8, subparagraph 080304.A. Key fund personnel must review and verify on a continuous basis that the goods and/or services are still needed. Key fund control personnel must not spend taxpayer funds when goods and/or services are no longer needed. 2-8 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.1.2.5. Ensure that their employees receive the necessary training and experience in the control and use of funds at levels that correspond with their responsibilities. Furthermore, supervisors must perform oversight and validation checks to ensure that established internal controls and standard operating procedures are adequate and are being consistently followed by their subordinates. Inadequate supervisory involvement or oversight combined with lack of appropriate training is common in DoD ADA violations. 4.1.2.6. Ensure regular reviews of fund status type reports are performed. If the amount of commitments and obligations (undelivered orders and delivered orders unpaid or paid) exceed the total amount available in an appropriation or the total amount of funds available at the formal administrative subdivision level, a violation could occur if all or some of the commitments eventually become valid obligations. 4.1.2.7. Take proactive measures specifically tailored to address the causes and corrective actions required to prevent violations. See section 3.0 for causes of violations. 4.2 Common Violations To prevent ADA violations, DoD personnel must be knowledgeable of the most common and frequent types of ADA violations to include the following: 4.2.1. Exceeding an Appropriation. 4.2.1.1. All DoD commanders, managers, and personnel whose duties include obligating and/or managing funds must be aware of this type of violation and causal factors. This violation often occurs when obligations from an obligation document are not timely or accurately recorded thus causing the official accounting records to reflect an inflated (and incorrect) availability of funds. Since personnel use those records to certify funds are available for other obligations, a violation can easily occur because the records do not reflect the correct amount of funds available for obligation. This violation also occurs when obligations are charged against a current account that would otherwise be properly chargeable (except as to the amount) to an expired account, but sufficient funds do not exist in the applicable expired account to fund the obligation. 4.2.1.2. This type of potential violation is commonly discovered when an unmatched disbursement is recorded in the accounting system when correcting inaccurately recorded obligations, or when a reprogramming action requests additional funds for an expired account. To help prevent this type of violation, DoD funds managers (for example, Comptrollers) must require that all organizations that incur obligations and record obligations maintain strict and absolute positive controls over-obligating documents (or their electronic equivalents) to ensure that none are lost or misplaced and all transactions are recorded accurately and in a timely manner. Such controls include batch totals of transactions and dollar amounts incurred, transmitted, received, processed, and recorded. 2-9 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.2.1.3. The establishment of a funds control system is also essential to ensure that all obligations are reconciled properly against available funds and authorized before they are incurred. This process must include reserving available funds for authorized obligations that are not immediately recorded as an obligation. The reservation must be made by means of a formal commitment or an informal reservation record that contains an estimated amount. The documented estimated reservation must closely approximate the obligation when incurred and recorded. Also, when recording estimated obligations, it is important to record the initial obligation based on the most current data available and adjust the estimated obligations as conditions change to avoid making an obligation or expenditure that exceeds the amount available in an appropriation or fund. 4.2.2. Exceeding Statutory Limitations on the Use of Operations and Maintenance Funds. 4.2.2.1. Military Construction. To prevent an ADA violation, engineering and contracting personnel must be advised of the provisions of 10 U.S.C. §§ 2801–2802, and 10 U.S.C. § 2805; and DoD rules and regulations that cover minor construction projects. Engineering personnel and those who authorized the construction are frequently identified responsible for violations involving construction projects exceeding statutory construction limitations and administrative construction limitations placed in engineering regulations. The following is a brief summary of some of the provisions of 10 U.S.C. §§ 2801, 2802, and 2805; and DoD rules and regulations on minor projects. 4.2.2.1.1. Congress establishes by statute, the amount of Operations and Maintenance (O&M) funds that may be used for a minor construction project. From time to time, that limit is increased by Congress. If the specified limit is exceeded, Military Construction funds must be used for the entire project including planning and design. A violation of 31 U.S.C § 1341(a)(1)(A) may occur when the limitation is exceeded. The limitation applies to the use of O&M funds for a minor construction project even though there is sufficient obligational authority available in the O&M account at the time that the project is authorized and approved. 4.2.2.1.2. A military construction project includes all work necessary to produce a complete and usable facility, or a complete and usable improvement to an existing facility under provisions of 10 U.S.C. § 2801(b). Incremental construction, which is the planned acquisition of, or improvement to, a real property facility through a series of minor construction projects is prohibited. See Volume 3, Chapter 17 for military construction project requirements. 4.2.2.1.3. Engineering and contracting personnel must be familiar with the statutory limitation, under the provisions of 10 U.S.C. § 2825, on the maintenance and repair funds that may be used for a family housing unit. That limit may not be exceeded without prior notification to Congress. When that limit is exceeded for any reason during the completion of a family housing maintenance and repair project, and the conditions specified in the law for a waiver of the statutory limitations have not been met, a violation of 31 U.S.C. § 1341(a)(1)(A) may occur. 2-10 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.2.2.1.4. The misclassification of construction costs as alterations by engineering personnel may result in an ADA violation. A potential violation may occur if the amount of the misclassification, when added to construction costs (if any), exceeds a statutory limitation. For example, an engineering project that has a minor construction cost close to the statutory limit, but which also has related maintenance and repair costs, could cause a violation of the statutory limit if the maintenance and repair work later is proven to be construction. Likewise, a maintenance and repair project exceeding the statutory construction limit could be a potential ADA violation if the maintenance and repair later is determined to be construction. 4.2.2.2. Equipment. 4.2.2.2.1. Congress designates an amount above which acquisitions of equipment must be funded from a procurement fund (expense versus investment threshold rule). Using O&M funds to acquire equipment items that exceed the designated threshold amount for the mandatory use of procurement funds could be a potential ADA violation. For instance, O&M funds are used to purchase a computer system when Other Procurement funds are required. Expense versus investment criteria is in Volume 2A, Chapter 1, paragraph 010212 and Volume 2B, Chapter 18. 4.2.2.2.2. Similar problems also frequently occur when acquiring low dollar value equipment items that are estimated to cost less than the congressionally designated amount for procurement funds, but actually cost more than that amount when acquired. 4.2.2.2.3. An ADA violation does not occur automatically in the situations outlined in subparagraphs 4.2.2.2.1 and 4.2.2.2.2 because the obligation can be moved from the O&M account to the applicable procurement account. If proper funds were available in the proper procurement account at the time of the erroneous obligation of O&M funds and funds are available when the obligation is recorded in the procurement account, including all other known valid obligations and deobligations, then a potential ADA violation has not occurred. However, if proper procurement funds were not available at the time of the erroneous obligation or were not available when the obligation is recorded in the procurement account to cover the obligation in the procurement account, a potential ADA violation may have occurred. 4.2.2.2.4. DoD decision makers, such as program managers, information systems managers, and contracting personnel, must be knowledgeable of the expense versus investment rules to prevent this type of violation. Program managers and information systems, contracting, and comptroller personnel must be trained on this issue. Such training should help reduce the incorrect application of the expense versus investment rule and the resulting ADA violations. 4.2.3. Exceeding a Formal Administrative Subdivision of Funds. If a formal administrative subdivision of funds level is exceeded, then a potential violation must be reported. The receipt of additional funds before the end of a reporting period does not mitigate a limitation violation or eliminate the potential violation reporting requirement as specified in Chapter 3. Also, failure to record a valid obligation or expenditure as of the date incurred does not avoid the incurrence of, and the requirement to report, a potential ADA violation if, upon recordation, 2-11 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 available funds in the appropriation fund or other formal administrative fund subdivision level are exceeded. For example, the Military Departments historically have experienced problems with over-obligated Reserve Component (RC) personnel accounts. Funds in these accounts are used to pay RC personnel for such items as weekend drills, travel, special tours, or other training. RC unit commanders who control a formal administrative subdivision of funds level are subject to the ADA and must, in advance of the incurrence and recording of these obligations, budget and reserve against available funds the amounts estimated for weekend drills and other scheduled training. 4.2.4. Obligating Funds in Advance of Availability. 4.2.4.1. A common scenario is the use of current year funds to procure goods or services that properly are funded only with a subsequent year appropriation. An ADA violation occurs when an individual obligates funds before those funds are authorized and appropriated by Congress. For example, signing a facility or equipment operating lease using one-year authority funds and agreeing to pay, or obligating the funds, for a two-year lease during the first year would constitute an obligation in advance of the availability of the funds for the amount associated to the second year of the lease. Similarly, agreeing to pay or obligating the funds for a two-year equipment maintenance agreement using one-year authority funds would constitute an ADA violation related to the amount associated with the second year of the agreement. 4.2.4.2. To help prevent this type of violation, training programs must include specific focus on the importance of ensuring funds are authorized and available before obligating the Government to contracts for future fiscal years’ expenses. 4.2.4.3. For guidance on determining whether a violation may be properly corrected, see subparagraph 1.2.3. 4.2.5. Providing Funds to Servicing Agencies Before or Past the Period of Availability. 4.2.5.1. A common scenario occurs when funds cited on an Economy or non-Economy Act order do not meet the bona fide need arising or existing in the fiscal year (or years) for which the appropriation is available for obligation. When an erroneous obligation is moved to the applicable fiscal year and proper funds were not available at the time of the erroneous obligation or were not available when the obligation was recorded in the proper fund or account, a potential ADA violation may have occurred. 4.2.5.2. To prevent this type of ADA violation, DoD personnel with the responsibility to control the use and type of funds used must be aware of the fiscal limitations of providing funds to servicing agencies before or past the period of availability. See specific policy for Economy Act orders in Volume 11A, Chapter 3, section 0304; and non-Economy Act orders in Volume 11A, Chapter 18, sections 1802 and 1803. 2-12 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 4.2.6. Retaining Funds Without Authority. 4.2.6.1. This violation often occurs when funds are retained without authority and are not deposited into the miscellaneous receipts of the U.S. Treasury but instead augments an appropriation and, as a result, obligations or expenditures exceed the amount appropriated by Congress. 4.2.6.2. This violation is often discovered when new personnel arrive and raise concerns over accepting and retaining unauthorized funds. Therefore, it is essential that DoD decision makers, such as DoD Commanders and Comptrollers, are knowledgeable of this type of violation and that financial managers be trained on this issue and understand the authority related to funds under their control to preclude augmenting an appropriation. 2-13 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-1. Potential Violations A DESCRIPTION OF POTENTIAL VIOLATION TITLE 31, VIOLATION UNITED MAY STATES OCCUR CODE WHEN SECTION Any military 1. Makes or authorizes an obligation or expenditure 1341(a)(1)(A) member or that exceeds: DoD a. The available amount of any appropriation or employee: fund. b. Any statutory restriction imposed on the use of an 1341(a)(1)(A) appropriation or fund, such as limits on the use of O&M funds for unspecified minor construction or for purchase of investment items. c. The available amount of any apportionment or 1517(a)(1) reapportionment. d. The available amount of any formal 1517(a)(2) administrative subdivision. e. Any limitation imposed by an authorized official 1517(a)(2) of the DoD or a DoD Component that is intended to restrict obligations of apportioned appropriations or funds. 2. Involves the Government in any contract or other 1341(a)(1)(B) obligation for the payment of money for any purpose before appropriations are made for such purposes, unless the law authorizes such contract or obligation. 3. Makes or authorizes an obligation or expenditure 1341(a)(1)(A) against an appropriation account that was closed pursuant to 31 U.S.C. §§ 1552 or 1555 or the period prescribed in an appropriations act for making expenditures as authorized by 31 U.S.C. § 1557. 4. Accepts voluntary service or employs personal 1342 service in excess of that authorized by law except in cases of emergency involving the safety of human life or the protection of property. 2-14 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-1. Potential Violations (continued) A DESCRIPTION OF POTENTIAL VIOLATION TITLE 31, VIOLATION UNITED MAY STATES OCCUR CODE WHEN SECTION Any military 5. Expends a working capital (revolving) fund 1341(a)(1)(A) member or established under 10 U.S.C. § 2208 in excess of amounts DoD available in Fund Balance with Treasury whether employee: apportioned or not. (Recurring provisions of annual DoD Appropriations Acts that establish cash balances (Fund Balance with Treasury) in working capital funds may be maintained only in such amounts as are necessary at any time for cash disbursements to be made from such funds. This provision allows working capital funds to incur liabilities in excess of available fund balances with Treasury.) 6. Obligates a working capital (revolving) fund 1517(a)(1) established under 10 U.S.C. § 2208 or a part of the fund, whether subject to or exempt from apportionment, in excess of the available amount. 7. Obligates a working capital (revolving) fund 1517(a)(2) established under 10 U.S.C. § 2208 in excess of the available amount of budgetary resources. In Fund 1. Total allotments, or operating budget authorities for 1517(a)(1) Distribution: O&M type funds exceed the amount available for each apportionment period. 2. Total suballotments, allocations, or operating 1517(a)(2) budget authorities, and centrally managed accounts (CMAs) exceed the amount of the allotment or operating budget authority for each period. 3. Total allocations or operating budget authorities and 1517(a)(2) CMAs exceed the amount of the available suballotment. 4. Total suballocations exceed the amount of the 1517(a)(2) allocation. 2-15 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-2. Violation Examples A. GENERAL. Most of the examples described in items B – D are taken from actual violations that occurred within DoD. However, these violations are fact specific and in other circumstances a potential violation may or may not be incurred. These examples are supplied for information only and are not intended to imply that in all similar but not identical circumstances a violation would have been incurred. B. TITLE 31, UNITED STATES CODE, SECTION 1341 1. 31 U.S.C. § 1341(a)(1)(A) a. Obligated O&M funds for site preparation construction costs on a relocatable building project. The project was incorrectly scoped into multiple projects and the cumulative costs of the construction exceeded the minor construction threshold and should have been authorized by Congress and funded with military construction funds. This unauthorized obligation of O&M funds instead of military construction funds resulted in a violation. b. Obligated O&M and Working Capital funds on a single military construction project. The project amount exceeded the minor construction statutory limitation and resulted in a violation. The Government Accountability Office takes the position that a violation of a funding restriction in an authorizing statute (such as 10 U.S.C. § 2805) results in a violation of the ADA (31 U.S.C. § 1341). The use of funds to finance the project is not consistent with the authorized purpose of the appropriation and resulted in an incurable violation of the “purpose statute” (31 U.S.C. § 1301). Note: Although the circumstances described herein constitute a violation of 10 U.S.C. §§ 2802(a) and 2805(b), the Department of Justice (DOJ) Office of Legal Counsel (OLC) has concluded that “a violation of a statutory restriction on spending does not violate the ADA where the restriction is not ‘in an appropriation.’ ” See also: DOJ OLC opinion, “Use of Appropriated Funds to Provide Light Refreshments to Non-Federal Participants at EPA Conferences,” April 5, 2007 (online at: http://www.justice.gov/sites/default/files/olc/opinions/2007/04/31/epa- light-refreshments13.pdf); and DOJ OLC letter, “Re: Whether the Federal Aviation Administration’s Finalizing and Implementing of Slot Auction Regulations Would Violate the Anti-Deficiency Act,” October 7, 2008. c. Obligated O&M funds rather than Procurement funds for recapitalization of a system and Procurement funds were not available when the obligation was recorded which resulted in a violation. 2-16 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-2. Violation Examples (continued) d. Failure to promptly record valid obligations in a reserve personnel appropriation resulted in valid obligations that exceeded the available amount in the appropriation and resulted in a violation 2. 31 U.S.C. § 1341(a)(1)(B) a. Obligated O&M funds in advance of the appropriation when a 14 month severable services contract was awarded that exceeded the 12 month limit set forth in section 10 U.S.C. § 2410a, and resulted in a violation. b. Obligated O&M funds for two and four year severable equipment leases in advance of an appropriation which resulted in a violation. c. Obligated O&M funds for equipment with phased deliveries into subsequent fiscal years in advance of an appropriation which resulted in a violation. C. TITLE 31, UNITED STATES CODE, SECTION 1342 Apparently, at the urging of the Chairman, a member of a Federal Commission agreed to waive his statutory entitlement to $100 per day while involved in Commission business. The year after the Commission was disbanded, the former member changed his mind and filed a claim for a portion of the compensation he would have received had it not been for the waiver. Since the $100 per day was a statutory entitlement, the purported waiver was invalid and the former commissioner was entitled to be paid. By accepting the waiver and allowing the commissioner to conduct Commission business without pay, the provision against acceptance of voluntary services was violated and a violation of the ADA occurred. D. TITLE 31, UNITED STATES CODE, SECTION 1517 1. Obligated O&M funds in excess of the Continuing Resolution Authority allocation which resulted in a violation. 2. Obligated O&M funds for information technology equipment in excess of the investment threshold. When correction was made, Procurement funds were not available at the suballotment level which resulted in a violation. 2-17 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-2. Violation Examples (continued) 3. A DoD activity used O&M funds, rather than Other Procurement funds to purchase a data processing local area network (LAN). Even though the hardware components and LAN operating system software were purchased separately, the components and the software together constituted a system with an aggregate cost in excess of the expense/investment threshold specified by the Congress for the required use of procurement appropriation funds. A violation occurred because the DoD activity did not have the required amount of Other Procurement funds at the time of the purchases. 4. A funds holder at a formal administrative subdivision of fund level erroneously distributed more funds than available at the subdivision level. The activities receiving the funds incurred obligations and expenditures in excess of amounts available to the fund holder but below the amount distributed. The funds holder incurred an ADA violation because the obligations and expenditures exceeded the total amount in the formal administrative subdivision of funds. 2-18 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-3. Reference Hyperlinks Office of Management and Budget (OMB) Circular A-11, “Preparation, Submission, and Execution of the Budget” U.S. Government Accountability Office Principles of Federal Appropriations Law (Red Book) United States Code (U.S.C.) title and section: U.S.C. Section Title 2 U.S.C. § 681 Disclaimer 2 U.S.C. § 682 Definitions 2 U.S.C. § 683 Rescission of Budget Authority 2 U.S.C. § 684 Proposed Deferrals of Budget Authority 2 U.S.C. § 685 Transmission of Messages; Publication 2 U.S.C. § 686 Reports by Comptroller General 2 U.S.C. § 687 Suits by Comptroller General 2 U.S.C. § 688 Procedure in House of Representatives and Senate 5 U.S.C. § 1304 Loyalty Investigations; Reports; Revolving Fund 10 U.S.C. § 2201 Apportionment of Funds; Authority for Exemption; Excepted Expenses 10 U.S.C. § 2204 Obligation of Appropriations 10 U.S.C. § 2208 Working-Capital Funds 10 U.S.C. § 2410a Severable Service Contracts for Periods Crossing Fiscal Years 10 U.S.C. § 2805 Unspecified Minor Construction 10 U.S.C. § 2825 Improvements to Family Housing Units 18 U.S.C. § 4124 Purchase of Prison-Made Products by Federal Departments 2-19 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-3. Reference Hyperlinks (continued) U.S.C. Section Title 31 U.S.C. § 1104 Budget and Appropriations Authority of the President 31 U.S.C. § 1105 Budget Contents and Submission to Congress 31 U.S.C. § 1106 Supplemental Budget Estimates and Changes 31 U.S.C. § 1107 Deficiency and Supplemental Appropriations 31 U.S.C. § 1108 Preparation and Submission of Appropriations Requests to the President 31 U.S.C. § 1112 Fiscal, Budget, and Program Information 31 U.S.C. § 1301 Application 31 U.S.C. § 1321 Trust Funds 31 U.S.C. § 1341 Limitations on Expending and Obligating Amounts 31 U.S.C. § 1342 Limitation on Voluntary Services 31 U.S.C. § 1349 Adverse Personnel Actions 31 U.S.C. § 1350 Criminal Penalty 31 U.S.C. § 1351 Reports on Violations 31 U.S.C. § 1501 Documentary Evidence Requirement for Government Obligations 31 U.S.C. § 1502 Balances Available 31 U.S.C. § 1511 Definition and Application 31 U.S.C. § 1512 Apportionment and Reserves 31 U.S.C. § 1513 Officials Controlling Apportionments 31 U.S.C. § 1514 Administrative Division of Apportionments 31 U.S.C. § 1515 Authorized Apportionments Necessitating Deficiency or Supplemental Appropriations 31 U.S.C. § 1516 Exemptions 2-20 DoD 7000.14-R Financial Management Regulation Volume 14, Chapter 2 * May 2023 Figure 2-3. Reference Hyperlinks (continued) U.S.C. Section Title 31 U.S.C. § 1517 Prohibited Obligations and Expenditures 31 U.S.C. § 1518 Adverse Personnel Actions 31 U.S.C. § 1519 Criminal Penalty 31 U.S.C. § 1531 Transfer of Functions and Activities 31 U.S.C. § 1552 Procedure for Appropriation Accounts Available for Definite Periods 31 U.S.C. § 1553 Availability for Appropriation Accounts to Pay Obligations 31 U.S.C. § 1555 Closing of Appropriation Accounts Available for Indefinite Periods 31 U.S.C. § 1557 Authority for Exemptions in Appropriation Laws 31 U.S.C. § 3302 Custodians of Money 31 U.S.C. § 3324 Advances 31 U.S.C. § 3512 Executive Agency Accounting and Other Financial Management Reports and Plans 31 U.S.C. § 3524 Auditing Expenditures Approved without Vouchers 33 U.S.C. § 576 Revolving Fund; Establishment; Availability; Reimbursement; Transfer of Funds; Limitation 41 U.S.C. § 6301 Authorization Requirement 2-21 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 VOLUME 14, CHAPTER 3: “ANTIDEFICIENCY ACT VIOLATION PROCESS” SUMMARY OF MAJOR CHANGES Changes are identified in this table and also denoted by blue font. Substantive revisions are denoted by an * symbol preceding the section, paragraph, table, or figure that includes the revision. Unless otherwise noted, chapters referenced are contained in this volume. Hyperlinks are denoted by bold, italic, blue and underlined font. This is the initial publication. PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE This chapter is a consolidation of the following seven chapters that are now archived: Chapter 3, dated November 2010 Chapter 4, dated November 2010 All New Chapter Chapter 5, dated November 2010 Chapter 6, dated November 2010 Chapter 7, dated November 2010 Chapter 8, dated March 2009 Chapter 9, dated March 2009 This revision incorporated and cancelled the Deputy Chief Financial Officer memorandum, “Antideficiency Policy Memo Cancellation Act (ADA) Investigator Training Frequency,” dated December 13, 2011. 3-1 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 Table of Contents VOLUME 14, CHAPTER 3: “ANTIDEFICIENCY ACT VIOLATION PROCESS” 1 1.0 GENERAL (0301).......................................................................................................... 4 1.1 Overview (030101).............................................................................................. 4 1.2 Purpose (030102)................................................................................................. 4 1.3 Authoritative Guidance (030103)......................................................................... 4 2.0 REPORTING SUSPECTED VIOLATIONS (0302)..................................................... 5 2.1 Initial Discovery (030201)................................................................................... 5 2.2 Initial Report (030202)......................................................................................... 5 2.3 Evaluation (030203)............................................................................................. 6 3.0 DOD COMPONENT INVESTIGATION ADMINISTRATION (0303)...................... 6 3.1 Timeframes for Investigation (030301).............................................................. 6 3.2 Approving Exceptions to Timeframes (030302).................................................. 7 3.3 Special Interest Investigations (030303).............................................................. 7 3.4 Involvement of the OUSD(C) (030304)............................................................... 7 3.5 Investigation Costs (030305)............................................................................... 7 4.0 PRELIMINARY REVIEWS (0304).............................................................................. 7 4.1 Purpose (030401)................................................................................................. 7 4.2 Investigating Officer Appointment (030402)....................................................... 8 4.3 Conduct of the Investigation (030403)................................................................. 9 4.4 Obligations Charged to the Wrong Appropriation or Wrong Year (030404)....... 9 4.5 Obligations Incurred in Advance of an Appropriation (030405)....................... 10 4.6 Review Results (030406)................................................................................... 10 4.7 Preliminary Reviews Initiated by the OUSD(C) (030407)................................ 10 4.8 Oversight Entities (030408)............................................................................... 10 4.9 Evaluation (030409)............................................................................................11 5.0 ROLES OF THE DOD INSPECTOR GENERAL (0305).......................................... 11 6.0 FORMAL INVESTIGATIONS (0306)....................................................................... 11 6.1 Overview (030601).............................................................................................11 6.2 Investigating Officer Appointment (030602)..................................................... 12 6.3 Conduct of Investigation and Preparation of Formal Report of ADA Violation Investigation (ROI) (030603)................................................................................................. 13 6.4 Reinvestigation (030604)................................................................................... 17 6.5 Formal Investigation Results (030605).............................................................. 17 7.0 DOD COMPONENT ROI (0307)................................................................................ 18 7.1 Preparation of the ROI. (030701)....................................................................... 18 7.2 Legal Coordination. (030702)............................................................................ 18 8.0 REQUEST FOR ADVANCE DECISION (0308)....................................................... 19 8.1 Advance Decision Package Submission (030801)............................................. 19 3-2 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 Table of Contents (Continued) 8.2 OUSD(C) DCFO Review (030802)................................................................... 19 9.0 DISCIPLINARY ACTION (0309).............................................................................. 20 9.1 Disciplinary Actions (030901)........................................................................... 20 9.2 Imposing Discipline (030902)............................................................................ 20 9.3 Documentation of Discipline Imposed (030903)............................................... 21 10.0 SUBMISSION OF THE FINAL REPORT (0310)...................................................... 21 10.1 Submission to DCFO (031001).......................................................................... 21 11.0 NOTIFICATION TO EXTERNAL AUTHORITIES (0311)...................................... 22 11.1 Letter Preparation (031101)............................................................................... 22 11.2 Letter Content/Submission (031102)................................................................. 22 Figure 3-1. Checklist for Formal Investigations................................................................... 23 Figure 3-2. Template for Initial Reports............................................................................... 25 Figure 3-3. Template for Appointment Orders..................................................................... 26 Figure 3-4. Template for Preliminary Review...................................................................... 27 Figure 3-5. Template for Formal Report............................................................................... 29 Figure 3-6. Template for Discipline Confirmation............................................................... 33 3-3 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 CHAPTER 3 * ANTIDEFICIENCY ACT VIOLATION PROCESS 1.0 GENERAL (0301) 1.1 Overview (030101) This chapter describes the Antideficiency Act (ADA) violation process from initial discovery to formal investigation and final report. When an ADA violation is suspected and those concerns are validated by an internal review, an in depth investigation is required. The structured investigation process consists of two phases, a preliminary review and, if required, a formal investigation. Generally, the likelihood that a potential ADA violation occurred must be established during the preliminary review, before a formal investigation begins. The preliminary review gathers facts and establishes by adequate evidence whether an uncorrectable deficiency has occurred. The formal investigation then determines the event(s) that “more likely than not” caused the potential violation, the responsible individual(s), and action(s) being taken to ensure that a similar violation does not reoccur. To ensure efficiency, it is important that those involved in the investigation of, and reporting on, ADA violations are adequately trained and qualified. Investigators are provided specific authority to collect and evaluate relevant information as well as obtain direct support from subject matter experts and personnel throughout the process. 1.2 Purpose (030102) This chapter provides guidance for addressing potential and actual violations of statutes discussed in Chapters 1 and 2. It establishes the policy for conducting initial reviews, structured investigations, and other requirements to report an ADA violation properly. It also establishes policies for training individuals assigned to investigate potential and actual ADA violations. Additionally, this chapter provides the process and policies regarding organizational corrective actions and disciplining of civilian and military employees. 1.3 Authoritative Guidance (030103) This chapter implements provisions of Title 31, United States Code (U.S.C.), especially sections 1511 – 1517 and 1519 (31 U.S.C. §§ 1511 – 1517 and 31 U.S.C. § 1519) related to apportionment and allotment, and §§ 1341 and 1348 related to limitations on obligations and expenditures, § 1342 related to voluntary services and personal services, and §§ 1349 and 1518 related to disciplinary actions. This chapter also implements reporting requirements as specified in 31 U.S.C. §§ 1351 and 1517(b), and the Office of Management and Budget (OMB) Circular No. A-11, Exhibit 145A 3-4 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 2.0 REPORTING SUSPECTED VIOLATIONS (0302) 2.1 Initial Discovery (030201) Date of discovery is the point in time when there is adequate information to suspect a potential ADA violation may have occurred, triggering an initial review. Discovery is often marked by an event, such as release of internal review findings suggesting an ADA violation may have occurred, or receipt of a status of funds report showing irregularities. An inquiry may be conducted to confirm that the information is accurate, complete, and sufficient to suggest that a violation of the ADA has occurred. 2.2 Initial Report (030202) 2.2.1. Fund holders have a fiduciary responsibility to ensure their funds are properly executed in accordance with applicable laws and regulations. Consequently, fund holders are responsible for reporting all suspected violations of the ADA. This does not mean that others are not responsible for bringing suspected violations to the attention of the proper officials. 2.2.2. Within two weeks of discovering a potential violation of the ADA, an initial review must be conducted and an initial report must be prepared by the activity holding the funds that were allegedly misused. The review is intended to aid in the preparation of the initial report. It determines whether a suspected violation may have occurred – even when the suspected violation is presumed to be curable. In cases where the activity identifies a potential cure, it should be noted in the report. However, no action to cure a potential ADA should be undertaken without concurrence from the authorities identified in 2.2.3. 2.2.3. 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 Department of Defense (DoD) Agencies and Field Activities (referred herein as DoD Component). 2.2.4. The initial report is not a determination of responsibility for causing the potential ADA; it merely serves as official notification that a suspected violation may have occurred. A template for an initial report is located at Figure 3-2. To the extent, such information is available and pertinent to the potential ADA at issue (e.g., some of the following may not be pertinent to a potential voluntary services ADA violation), the report must contain the following: 2.2.4.1. Accounting classification of funds allegedly misspent; 2.2.4.2. Name and location of the activity where the alleged violation occurred; 2.2.4.3. Name and location of the activity issuing the fund authorization; 2.2.4.4. Amount of the alleged violation; 2.2.4.5. Nature of the alleged violation; 3-5 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 2.2.4.6. Date the alleged violation occurred and date discovered; 2.2.4.7. Means of discovery; and 2.2.4.8. Description of the facts and circumstances of the case. 2.2.5. Initial reports addressing potential voluntary services ADA violations must include all items listed in subparagraph 2.2.4 (except subparagraphs 2.2.4.1 and 2.2.4.3). 2.3 Evaluation (030203) 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. If the DoD Component determines that the suspected violation is curable, the impacted activity/command will provide all the necessary information and documentation to support the correction to the DoD Component. Upon correction of the error and determination of appropriate internal controls to prevent a recurrence of similar violations, there are no additional ADA violation requirements. 3.0 DOD COMPONENT INVESTIGATION ADMINISTRATION (0303) 3.1 Timeframes for Investigation (030301) 3.1.1. The preliminary review must be completed within four months from the date it was directed by the DoD Component. 3.1.2. The formal investigation must be completed within nine months from the date it was directed by the DoD Component. 3.1.3. The Office of the General Counsel (OGC) (Fiscal) advance decision legal review must be completed within three months from the date the draft formal investigation report is submitted to the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)), Deputy Chief Financial Officer (DCFO) requesting an advanced decision. 3.1.4. The DoD Component must consider appropriate disciplinary action and document any disciplinary action taken. A final summary report must be submitted by the DoD Component within two months from the Office of the Secretary of Defense (OSD) OGC (Fiscal) receipt of an advance decision concurring with the formal investigation report. However, DoD Components may request additional time from the DCFO to complete disciplinary actions, if required. 3.1.5. The DCFO must complete and submit the letters required by OMB Circular No. A-11, Exhibit 145A within one month after receiving the final investigation report from the DoD Component. The total process for investigating and reporting potential ADA violations must be completed within 15 months from the start of the formal investigation. The preliminary review is not part of the 15 months’ timeline. 3-6 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 3.1.6. All appointing officials must stipulate in the investigating officer appointment memorandum a due date for the ADA violation investigation report. The due date must conform to the timeframes stipulated in paragraph 3.1.1 through 3.1.5 regardless of the scope or amount of the potential violation. 3.2 Approving Exceptions to Timeframes (030302) The DCFO may approve an exception to the timeframes on a case-by-case basis. Upon request, this responsibility may be delegated to the DoD Components. This responsibility may not be redelegated. The DoD Components must provide sufficient justification for the extension. The DCFO will notify the DoD Components of any extension that is approved. 3.3 Special Interest Investigations (030303) Special interest investigations include potential violations that may have been the subject of a news release; requested by the Secretary of Defense, Deputy Secretary of Defense, or the USD(C); or involve a high-level DoD official. When necessary, investigations of special interest may deviate from the timeframes stipulated in paragraphs 3.1.1 through 3.1.5; however, the DoD Components must notify the DCFO when such deviations are necessary. If the DCFO agrees, the timeframes may be extended. 3.4 Involvement of the OUSD(C) (030304) The OUSD(C) may supervise the progress of an investigation when the nature of the violation or the implication of individuals in the violation warrants such involvement. Such supervision may include requirements for oral and written progress reports and may require a team of investigating officers (IOs) and compressed timeframes. 3.5 Investigation Costs (030305) When conducting an investigation outside the major activity/command to which the IO is assigned, incidental costs (e.g., temporary duty, local travel) incurred must be identified and accumulated. In accordance with Volume 11A and Volume 11B, reimbursement must be provided by the activity/command that was under investigation. 4.0 PRELIMINARY REVIEWS (0304) 4.1 Purpose (030401) 4.1.1. The purpose of the preliminary review is to gather facts that adequately support, at a minimum, the conclusion that a reportable violation of the ADA has occurred. It does not identify responsible officials or recommend corrective actions to prevent similar violations. Applicable corrective actions will be developed during the formal investigation, if a formal investigation is warranted. 3-7 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 4.1.2. The DoD Component will assign the responsibility for conducting the preliminary review to the activity where funds were potentially misused. 4.2 Investigating Officer Appointment (030402) 4.2.1. The IO’s must be appointed by an appointing official. The appointing official is at the DoD Component level unless the Component delegates this authority to a senior Commander, or director of the organization assigned responsibility for conducting the investigation. The appointing official will appoint a qualified IO to be assisted by a review team with expertise in the areas being investigated, if necessary. The appointing official will issue an appointment letter within two weeks after the DoD Component’s evaluation of the initial report concluded that a potential reportable violation has occurred. A template for appointment orders is located at Figure 3-3. 4.2.2. The appointing official must certify that the IO has been trained in fiscal law or appropriations law within the last three years and is capable of conducting a complete, impartial, and unbiased review. It is the responsibility of each DoD Component to ensure that its ADA investigators are properly trained and that the training is current and documented. 4.2.3. The IO should be selected from an organization external to the activity/command being reviewed. 4.2.4. The IO does not need to be senior in grade to the persons potentially under investigation. 4.2.5. The IO must be competent and capable of gathering evidence, establishing facts, documenting findings and recommendations, and preparing investigation reports of violation. 4.2.6. The IO must also be able to manage time and meet timeframes established for the completion of the investigation. The appointing official may prescribe additional training as required. 4.2.7. Appointing officials must ensure the investigation receives the appropriate level of activity/command emphasis and the IO is given adequate time and resources to conduct a thorough investigation. 4.2.8. The appointment orders must certify that investigators are free of personal, external, and organizational impairments and retain the document(s) in the ADA case file. 4.2.9. Appointment orders must be submitted to the DoD Component and are part of the case files for the investigation. 3-8 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 4.3 Conduct of the Investigation (030403) 4.3.1. Checklists. Figure 3-4 contains a template for preparation of the preliminary review report. 4.3.2. At the conclusion of the preliminary review, the investigator must have gathered facts, established a narrative of events and determined what should have happened. This may involve reviewing funding documents, contracts, and other key documents, as well as interviewing key witnesses. 4.3.3. The investigation should check for accounting errors such as: duplications or other errors in recording the applicable obligation and/or expenditure; obligations and/or expenditures charged to invalid and/or improper fund accounts; and inaccurate fund status at the time the applicable transaction occurred. If the preliminary review determines that an accounting error occurred, the investigator must coordinate the appropriate accounting correction. 4.3.4. When an IO determines that a reportable violation can be cured, the fund holder must attempt to correct the accounts. Corrections must be completed with the concurrence of the DoD Component, and only after appropriate supporting documentation is provided to the DoD Component. 4.4 Obligations Charged to the Wrong Appropriation or Wrong Year (030404) 4.4.1. To cure a potential ADA violation and to correct the accounts, (violations of Purpose (31 U.S.C. §1301) and the Bona Fide Need Rule (31 U.S.C. §1502)), the fund control personnel should first ascertain that: 4.4.1.1. The proper type of funds, fiscal year, and amount are currently available to correct the erroneous obligation(s), and 4.4.1.2. If so, they should also determine that the proper funds were available at the time of the erroneous obligations. 4.4.2. If the fund holder is able to certify that both of these conditions have been met and that the potential ADA violation can be cured via fund substitution by account adjustments, this should be explicitly stated in the report. 4.4.3. The IO should then coordinate with the necessary personnel to correct the potential violation and document completion of the proper accounting corrections. Once the accounting corrections have been made, the IO, in coordination with his/her legal advisor must determine whether a reportable violation occurred and document this in the Preliminary Report. 4.4.4. If fund control personnel do not provide the certification, then the preliminary review report must include evidence that adequately supports a determination that there is a reasonable likelihood that a violation of 31 U.S.C. §§ 1341 or 1517 occurred. 3-9 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 4.5 Obligations Incurred in Advance of an Appropriation (030405) 4.5.1. Obligations incurred in advance of the availability of the proper appropriation (31 U.S.C. §1341(a)(1)(B)) will not be regarded as reportable violations of the ADA, provided that there are sufficient funds available in the proper appropriation to cover the obligation. 4.5.2. To cure a potential ADA violation, fund control personnel should first ascertain that the proper type of funds, fiscal year, and amount are currently legally available to correct the premature erroneous obligation. 4.5.3. If the fund holder is able to certify that this condition has been met and that the potential ADA can be cured via fund substitution, this should be explicitly stated in the report. 4.5.4. The IO should then coordinate with the necessary personnel to correct the potential violation and document completion of the proper accounting corrections. Once the accounting corrections have been made, the IO, in coordination with his/her legal advisor must determine whether a reportable violation occurred and document this in the Preliminary Report. 4.5.5. If fund control personnel do not provide the certification, then the preliminary review report must include evidence that adequately supports a determination that a violation of 31 U.S.C. §§ 1341 or 1517 occurred. 4.6 Review Results (030406) The findings of the preliminary review must be documented in the IO’s preliminary report and the report must be accompanied by a legal review. This report and legal review are forwarded for approval to the applicable DoD Component, and coordinated with the applicable DoD Component’s General Counsel. If the DoD Component involved determines that there is no violation, then the preliminary report completes the required ADA violation investigation. 4.7 Preliminary Reviews Initiated by the OUSD(C) (030407) When the OUSD(C) is informed of a potential violation by an audit report or otherwise learns of a potential violation, the applicable DoD Component may be directed to initiate a preliminary review of the circumstances surrounding the potential violation. The date the DoD Component receives the direction is considered the date of discovery for reporting purposes and the DoD Component must follow procedures in sections 2.0, and 3.0. 4.8 Oversight Entities (030408) 4.8.1. In some cases, the Government Accountability Office, DoD Office of Inspector General, a military department audit agency, or other organizations external to a DoD Component may advise in a report that a potential violation may have occurred and recommends a preliminary review be conducted. The DoD Component must review the finding(s) and recommendation(s) provided in the report. An informed inquiry may have to be conducted by the DoD component. 3-10 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 4.8.2. If the DoD Component agrees that a potential violation may have occurred and a preliminary review is warranted, then the date of the agreement is considered the date of discovery for reporting purposes. The DoD Component must follow procedures in section 4.0 and must supply the status of the preliminary review as requested by the applicable external organization. 4.8.3. If the DoD Component disagrees that a potential violation has occurred and believes a preliminary review is not warranted, the DoD Component must provide applicable written comments to the report outlining the disagreement consistent with policy prescribed in DoD Instruction 7650.03 “Follow-up on General Accountability Office (GAO), Inspector General of the Department of Defense (IG DoD), and Internal Audit Reports.” 4.8.4. If disagreements between the DoD Component and the oversight activity arise as to whether a preliminary review is warranted, the DoD Component may request assistance from the DCFO. 4.9 Evaluation (030409) The DCFO may routinely examine open or closed preliminary review cases. 5.0 ROLES OF THE DOD INSPECTOR GENERAL (0305) The Inspector General Act of 1978 (P.L. 95-452), as amended, gives the DoD Inspector General (DoD IG) the authority to conduct investigations of violations of the ADA. 5.0.1. The DoD IG reserves the right to initiate investigations of potential violations of the ADA, depending upon the type, amount, or significance of the violation. 5.0.2. The DoD IG may elect to conduct investigations not requested by the OUSD(C) or other DoD official. 5.0.3. When the DoD Inspector General conducts such investigations, the resultant report must constitute the official DoD report on the matter; no other DoD Component must conduct parallel or supplemental investigations unless directed to do so by the Secretary of Defense, Deputy Secretary of Defense, or OUSD(C). 6.0 FORMAL INVESTIGATIONS (0306) 6.1 Overview (030601) 6.1.1. Following completion of a preliminary review that concludes by adequate evidence that a reportable and incurable violation of the ADA has occurred, a formal investigation must be opened. The violation must be reported to the DCFO within 2 weeks of the determination. The DCFO will assign the DoD Component a unique tracking number and due date. 3-11 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 6.1.2. The purpose of the formal investigation is to determine the event that caused the potential violation, the responsible individual(s), and action(s) taken to ensure that a similar violation does not occur in the future. It may require the discovery of new or additional evidence, re-interviewing witness or interviewing new witness, re-examining documents or discovery of new documents. 6.1.3. During the course of a formal investigation, the DCFO may request periodic status reports. 6.1.4. The DoD Component will generally assign the responsibility for conducting the investigation to the activity that performed the preliminary review. The DoD Component may request another organization to conduct the investigation to eliminate potential conflicts of interest, or to leverage the expertise of another activity/command. 6.2 Investigating Officer Appointment (030602) 6.2.1. IO’s must be appointed by an appointing official. The appointing official is at the DoD Component level unless the Component delegates this authority to a senior activity/commander or director of the organization assigned responsibility for conducting the investigation. The appointing official will appoint a qualified IO, to be assisted by a review team with expertise in the areas being investigated, if necessary. A template for appointment orders is located at Figure 3-3. The formal investigation may be conducted by the same IO who conducted the preliminary review. 6.2.2. The appointing official must certify that the IO/review team lead has been trained in fiscal law or appropriations law within the last three years and is capable of conducting a complete, impartial, and unbiased review. It is the responsibility of each DoD Component to ensure that its ADA investigators are properly trained and that the training is current and documented. 6.2.3. The IO should be selected from an organization external to the activity/command being reviewed. 6.2.4. The IO does not need to be senior in grade to the persons potentially under investigation. 6.2.5. IO’s must be competent and capable of interviewing witnesses, gathering evidence, establishing facts, documenting findings and recommendations, and preparing reports of violation. They must also be able to manage time and meet timeframes established for the completion of the investigation. The appointing official may prescribe additional training as required. 6.2.6. Appointing officials must ensure the investigation receives the appropriate level of activity/command emphasis and the IO is given adequate time and resources to conduct a thorough investigation. 3-12 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 6.2.7. The appointment orders must certify that investigators and/or review team leads are free of personal, external, and organizational impairments and retain the document(s) in the ADA case file. 6.3 Conduct of Investigation and Preparation of Formal Report of ADA Violation Investigation (ROI) (030603) 6.3.1. Checklists 6.3.1.1. Figure 3-1 contains a checklist for use in the conduct of the Formal Investigation. 6.3.1.2. Figure 3-5 contains a template for preparation of the formal report. 6.3.2. Examination of Physical Evidence During the investigation, the IO will be required to expand upon the findings established in the preliminary investigation or make new findings. The IO may revise dollar amounts based on witness statements, or, as more information is obtained, facts and conclusions also may be revised. The focus of the formal investigation will be on finding the root cause(s) for the violation, and identifying the individual(s) making or authorizing the improper obligations or expenditures, as well as identifying the corrective action(s) that are being implemented to reduce the risk of similar violations in the future. 6.3.3. Identifying Circumstances and Assigning Responsibility 6.3.3.1. All relevant aspects of the case, including all individuals and records connected with the event, must be investigated to the fullest extent. Key personnel involved in a violation must be interviewed. If an employee to be interviewed is a member of a bargaining unit, then the IO must comply with appropriate statutory and collective bargaining agreement protections for such employee. 6.3.3.2. Key facts associated with the events leading to the potential violation must be examined and documented in the report and the IO must address any conflicts. If a series of events at several levels led to the violation, then the report clearly must identify what happened at each level and how the events contributed to the violation. 6.3.3.3. In cases where the subject matter of the potential violation is beyond the expertise of the IO, a subject matter expert must be requested to evaluate the evidence along with statements from personnel interviewed and provide an opinion whether the key facts are correct and the conclusions reasonable. For example, when a potential violation involves the question of whether a military construction project results in a complete and usable facility, a civil engineer will be required to analyze the facts and provide an opinion. 6.3.3.4. The IO must make findings of fact to support all conclusions reached in the investigation. All findings of fact that lead to a conclusion of an ADA violation must be 3-13 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 supported by a preponderance of the evidence. A preponderance of the evidence is created when the evidence collected makes the existence of a fact more likely than not. If the IO cannot establish a fact by the preponderance of the evidence, that fact may not be used to support a conclusion that an ADA violation occurred or that an individual is a responsible official. 6.3.3.5. In cases where the IO concludes that a reportable ADA violation occurred, the IO must make findings of fact and conclusions identifying the responsible official(s), the individual or individuals responsible for making or authorizing the improper obligations or expenditures pursuant to 31 U.S.C., §§ 1341(a) and/or 1517(a). Findings of fact used to support a determination that an individual is responsible for the violation must be established by a preponderance of the evidence. A conclusion that an individual is a responsible official does not, by itself, result in pecuniary liability of an accountable official under 10 U.S.C., § 2773a. 6.3.3.6. Any report that concludes an ADA violation occurred must identify one or more responsible officials. A conclusion that no individual was responsible for the violation is not acceptable. 6.3.3.7. The same individual(s) may be responsible for more than one violation under the auspices of a single investigation. In these cases, the report should specifically clarify how they contributed to each discrete violation. 6.3.3.8. The responsible official is usually the highest-ranking individual in the decision-making process with actual or constructive knowledge of the actions taken and awareness of the possible risks. 6.3.3.9. In order to establish responsibility, the IO must conclude, based on findings of fact, that the act or omission was a proximate cause of the violation. An act or omission is a proximate cause when it sets into motion a chain of events that directly leads to the violation, and the violation would not have happened but for the act or omission. A violation may have more than one proximate cause, and therefore more than one responsible official. 6.3.3.10. In some cases, it is necessary to establish that an individual had a duty to take an action that may have prevented the ADA violation, knew or should have known of that duty, and failed to take that action. In such cases, collateral evidence, such as Position Descriptions, may be used as evidence of the individual's scope of duties. If used, such evidence must be included in the ROI. 6.3.3.11. Activity/commanding officers, directors, 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. Responsible officials may also include Information Technology specialists, program managers, facility engineers, and acquisition personnel. 6.3.3.12. The ROI must clearly identify the involvement of each individual and the acts or omissions that were the proximate cause(s) of the violation. The following questions must be considered: 3-14 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 6.3.3.12.1. Did the violation occur because an individual carelessly disregarded instructions? 6.3.3.12.2. Did the violation occur because an individual was inadequately trained or lacked knowledge to properly perform their job? If so, was the individual or a supervisor at fault? 6.3.3.12.3. Did the violation occur because of an error or mistake in judgment by an individual or a supervisor? 6.3.3.12.4. Did the violation occur because of lack of adequate procedures and controls? If so, who was at fault? 6.3.3.12.5. Did the violation occur because of other reasons? If so, who was at fault? 6.3.3.13. If at any time during an investigation the IO believes there may be a criminal issue(s) involved, then the investigation must be stopped immediately. The IO must consult with legal counsel to determine if the issue should be referred to appropriate criminal investigators for resolution. The IO must notify the DoD Component of the outcome of this consultation. 6.3.3.13.1. If at any time it is suspected that the violation of the ADA was knowing and willful, then the IO must submit all available information to the DoD Component, which will consider the case, in conjunction with the applicable Office of the General Counsel, for submission through DoD channels to the Department of Justice pursuant to 31 U.S.C., §§ 1350 or 1519, as applicable. 6.3.3.13.2. At this time, the case will be closed to avoid duplication of effort or interference with a criminal investigation. If appropriate, a new formal investigation will be opened at the conclusion of the criminal investigation. 6.3.4. Rebuttal Statements 6.3.4.1. Individuals found potentially responsible for the violation will be provided a draft ROI detailing the facts and circumstances leading to the determination of their responsibility and given two weeks to issue a rebuttal statement. 6.3.4.2. The individuals named potentially responsible must be granted this opportunity even if they no longer work where the violation occurred or have retired or separated from the DoD. 6.3.4.3. The ROI should document the steps taken to notify the proposed responsible officials and provide them an opportunity to submit a rebuttal statement. Certified mail and/or email with tracking may be used to verify a good faith attempt was made to deliver the draft report to the proposed responsible official. 3-15 DoD 7000.14-R 2B Financial Management Regulation Volume 14, Chapter 3 * April 2019 6.3.4.4. In cases where proposed responsible officials may have separated and left no valid forwarding address, a reasonable attempt to contact them should be made. The report should then be annotated accordingly