Government Resource Management Environment Participant Guide PDF

Government Resource Management Environment  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Module Objective  Discuss the significance of the federal legislative process in shaping the allocation of fe...

Government Resource Management Environment  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Module Objective  Discuss the significance of the federal legislative process in shaping the allocation of federal funds and resources The government resource management environment comprises the various processes and systems the federal government uses to manage and allocate resources, including financial, human, and physical resources. Managing these resources effectively is critical for the government to operate efficiently and achieve its goals and objectives. This module will explore key topics in the government resource management environment, including the legislative process and the federal budget cycle. 14 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Tip Financial management is a dynamic environment and the issues you face as a financial manager may be different every day. One of the key challenges in the Department of Defense (DoD) environment is the instability of the global threat and the department's need for resiliency and flexibility in redirecting resources to meet the highest demand requirements. A second challenge is maintaining current knowledge of legal authorities, DoD instructions and directives, and policies. The Department of Defense Financial Management Regulation (FMR) is your definitive source of financial management guidance, but it may not always be completely current, based on recent congressional action. In addition, other directives and instructions will be modified to accommodate changes in legislation or policy. As a financial manager, you will need to confirm the status of statutory authorities and financial management policies throughout execution. For example, authorities can change from one fiscal year to the next, such as the limitation of the exception to the Voluntary Separation Incentive Pay (VSIP) Program, which allowed payouts of up to $40,000 until September 30, 2021. That exception is no longer available and DoD is limited to a maximum of $25,000 per VSIP payout. However, this exception may be reinstated at any time through the annual National Defense Authorization Act. Throughout the course, your facilitator will highlight authorities and policies that may have changed recently or may be changing in the future. That information is all subject to change, however, with the next Congress or change in administration. The material in the text is current as of May 2024. Keep in mind that the exam material may not be as current as the course material. Refer to Website To access the CDFM Candidate Handbook, visit: https://asmconline.org/cdfm/candidate-handbook/. Lessons 1. The Legislative Process 2. DoD Fiscal Law Framework 3. The Federal Budget Cycle © Management Concepts. See inside front cover for additional details. 15  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT LESSON 1 THE LEGISLATIVE PROCESS Lesson Objectives After completing this lesson, you will be able to: 1.1.1 Describe the stages of the federal legislative process 1.1.2 Explain the historical origins of the federal legislative process 1.1.3 Explore the authorities, responsibilities, limitations, and roles of the three branches of the federal government 1.1.4 Identify the basic concepts and principles of appropriations law KEY DOCUMENTS The genesis of the U.S. federal legislative process can be traced to these key events Once the Constitution was established, a clear legislative process determined how the government should function. The legislative process involves creating and implementing the laws that govern society, including how resources are allocated and utilized. The legislative process begins when a bill is introduced and ends when the bill is signed into law. During the process, the legislation is reviewed, debated, and amended by multiple people in the executive and legislative branches. The legislative process can be complex and slow, but it is an essential part of the democratic process. It ensures that elected representatives and the federal government remain accountable to the people and that laws are created in a transparent manner. © Management Concepts. See inside front cover for additional details. 16  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 1.1 FOUNDATIONS OF THE FEDERAL GOVERNMENT Power in the U.S. federal government is divided and shared between the 50 states and the federal government. This division of power and authority is a foundational principle reflected in the key documents that set forth the systems of governance in the United States. Power is further divided within the federal government, with three separate branches that each have clearly defined powers and limitations. This creates a system of checks and balances that allows each branch of the federal government to limit the power of the other branches. The checks and balances protect the American people from any single branch of the government becoming too powerful or taking authority it is not granted. The U.S. Constitution is the supreme law of the land, and has remained so since it went into effect in 1789. It was preceded by the Articles of Confederation, ratified in 1781. Together, these two documents helped shape the political structure of the United States and establish the relationship between the federal government and the states. The philosophy of checks and balances, separation of powers, and federalism is present in both documents, and the founders considered these principles to be key to the success and prosperity of the country. 1.1.1 The Articles of Confederation The Articles of Confederation, ratified on March 1, 1781, were the precursor to the Constitution. These articles:  Were explicit in guarding the independence of the states  Did not provide for a federal chief executive or judicial system Any amendment to the Articles of Confederation required the unanimous approval of all the states. The early framers of the articles were heavily influenced by the constitutions of individual states and the principles underlying the Declaration of Independence. They were particularly concerned with limiting the powers of the federal government over the states and guaranteeing the freedom of each citizen. The principle of separation of power among the executive, legislative, and judicial branches was devised to allay the fear that a monolithic centralized government, in which all power is vested, would lead to tyranny. Separation of power prevents Congress and the president from unilaterally making laws and treaties. This system of checks and balances maintains the delicate balance between the authority of the federal government and the rights and liberties of the individual citizen. Refer to Website To view the full text of the Articles of Confederation, visit: https://www.archives.gov/milestone-documents/articles-of- confederation. 1.1.2 The Constitution: Overview and Principles The Constitution defines the fundamental law of the federal government as:  Setting forth the three principal branches of the federal government  Outlining their jurisdictions  Propounding the basic rights of U.S. citizens © Management Concepts. See inside front cover for additional details. 17  LESSON 1 | THE LEGISLATIVE PROCESS It has become the landmark legal document of the Western world and is the oldest written national constitution currently in effect. The essential principle of the document is that government must be confined to the rule of law. STRUCTURE OF THE FEDERAL GOVERNMENT The Constitution represents a set of general principles from which implementing statutes and codes have emerged. The success of the document in remaining the foundation of American government is based on the fact that successive congresses and courts have been able to interpret it or adapt it to the demands of changing times. Often, contributions to constitutional interpretation are set by precedent, custom, and usage. Early on, Congress began enhancing the definition of constitutional powers through statute, such as providing for the creation of the federal budget system, executive departments, federal courts, new states and territories, and controlling presidential succession. Article I, section 8, states that Congress shall have the authority “To make all Laws which shall be necessary and proper for carrying into Execution [the various powers allotted to the federal government by the Constitution].” Our constitutional framework guides the operations of all three branches across all of their activities. For example, the president is the sole representative of the United States in foreign affairs and, as such, is authorized to enter into executive agreements with other nations. However, if the president negotiates a treaty, the Senate must approve it. Other key activities, such as the operations of the electoral college in electing the president and vice president, the approval of the cabinet members by the Senate, and approval of federal judge appointments by the Senate, are all laid out in the Constitution. 18 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Discussion  What do you consider to be the distinctive and defining characteristics of the American system of government? Refer to Website To view the entire text of the U.S. Constitution, visit: https://constitution.congress.gov/constitution/. 1.1.2.1 Article I—The Legislative Branch Article I of the U.S. Constitution establishes Congress, the legislative branch of the federal government. There are two chambers of Congress: the House of Representatives and the Senate. Article I details how each chamber should be formed, who is qualified for each chamber, and what powers each chamber does and does not have. The legislative branch has the unique responsibility to make laws, and to raise and spend money through taxation or borrowing. This branch holds the power of the purse, meaning that Congress controls the flow of funds in the federal government. Several law-making powers are enumerated to Congress in Article I, section 8, including the power to:  Raise taxes. "The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States."  Borrow money. "The Congress shall have power To borrow Money on the credit of the United States."  Regulate commerce. "The Congress shall have Power To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."  Conscript forces. "The Congress shall have Power... To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions."  Declare war. "The Congress shall have power... To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water."  Raise and support armies. "The Congress shall have power... To provide and maintain a Navy"  Provide and maintain a Navy. "The Congress shall have power... To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years." © Management Concepts. See inside front cover for additional details. 19  LESSON 1 | THE LEGISLATIVE PROCESS Poll Which legislative branch authority do you think is the most powerful? o Raise taxes o Borrow money o Regulate commerce o Conscript forces o Declare war o Raise and support armies o Provide and maintain a navy The following excerpts from Article I of the U.S. Constitution are important for you to be familiar with and apply to your work. U.S. Constitution, Article I, Section 1 “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” U.S. Constitution, Article I, Section 2 “The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature.” U.S. Constitution, Article I, Section 3 “The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years; and each Senator shall have one Vote.” [The Seventeenth Amendment, ratified in 1913, provided for Senators to be elected by the people of the state rather than being appointed by the legislature of the state.] “The Vice President of the United States shall be President of the Senate, but shall have no Vote, unless they be equally divided.” 20 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT U.S. Constitution, Article I, Section 7 “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills. “Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law. “Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.” © Management Concepts. See inside front cover for additional details. 21  LESSON 1 | THE LEGISLATIVE PROCESS U.S. Constitution, Article I, Section 8 “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; “To borrow Money on the credit of the United States; “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; “To constitute Tribunals inferior to the supreme Court. “To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water; "To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; “To provide and maintain a Navy; “To make Rules for the Government and Regulation of the land and naval Forces; “To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” U.S. Constitution, Article I, Section 9 “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” 22 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Discussion  Article I, section 9, of the Constitution states, “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” How is your professional role governed by this section? Limits of the Legislative Branch The Constitution places several limits on the power of the legislative branch. TABLE: CONSTITUTIONAL LIMITS ON THE LEGISLATIVE BRANCH Limit Location in the Text in the Constitution Constitution Cannot violate rights Fifth Amendment "No person shall be deprived of life, liberty, or property, without due process of law" Cannot pass ex facto laws Article I, section 9, clause 3 "No Bill of Attainder or ex post facto Law shall be passed." [An ex facto law makes an action that was legal at the time of the action retroactively illegal.] Cannot pass bills of Article I, section 9, clause 3 "No Bill of Attainder or ex post facto Law shall attainder be passed." [A bill of attainder punishes a specific individual without the protection of a trial.] Cannot delegate Article I, section 1 "All legislative powers herein granted shall be lawmaking power vested in a Congress of the United States, which shall consist of a Senate and House of Representatives" 1.1.2.2 Article II—The Executive Branch Article II of the U.S. Constitution establishes the executive branch of the federal government. It provides details about the duties and powers of the president. The primary duty of the executive branch is to enforce the laws of the land and defend the country. The president, as head of the executive branch, has significant power and influence over domestic and foreign policy. The executive branch has the unique responsibility to execute and enforce the laws passed by Congress. One way the executive branch provides a check on the other branches is through the power of the president to veto a law passed by Congress. © Management Concepts. See inside front cover for additional details. 23  LESSON 1 | THE LEGISLATIVE PROCESS TABLE: CONSTITUTIONAL POWERS GRANTED TO THE PRESIDENT Power Location in the Text in the Constitution Constitution Commander in chief Article II, section 2 "The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States..." Appointments Article II, section 2 "[H]e shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States..." Treaties Article II, section 2 "He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur" Veto Article I, section 7 "Every Bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a Law, be presented to the President of the United States; If he approves he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it" Executive power Article II, section 1 "The executive Power shall be vested in a President of the United States of America" Executive power Article II, section 3 "[H]e shall take Care that the Laws be faithfully executed..." Pardons Article II, section 2 "[H]e shall have Power to grant Reprieves and Pardons for Offenses against the United States, except in Cases of Impeachment" Poll Which executive branch authority do you think is the most powerful? o Commander in chief o Appointments o Treaties o Veto o Executive power o Pardons 24 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT The following excerpts from Article II of the U.S. Constitution are important for you to be familiar with and apply to your work. U.S. Constitution, Article II, Section 1 "The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President chosen for the same Term, be elected...” U.S. Constitution, Article II, Section 2 “The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any subject relating to the Duties of their respective Offices, and he shall have Power to Grant Reprieves and Pardons for Offence against the United States, except in Cases of Impeachment. “He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States …” U.S. Constitution, Article II, Section 3 “He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.” Limits of the Executive Branch The Constitution places several limits on the power of the executive branch. © Management Concepts. See inside front cover for additional details. 25  LESSON 1 | THE LEGISLATIVE PROCESS TABLE: CONSTITUTIONAL LIMITS ON THE EXECUTIVE BRANCH Limit Location in the Text in the Constitution Constitution Cannot violate individual Fifth Amendment "No person shall be deprived of life, liberty, or rights and liberties property, without due process of law" Cannot refuse to faithfully Article II, section 3 "[H]e shall take Care that the Laws be faithfully execute laws duly passed executed, and shall Commission all the by Congress Officers of the United States" Cannot make unilateral Article II, section 2, clause 2 "He shall have Power, by and with the Advice treaties without the advice and Consent of the Senate, to make Treaties, and consent of the Senate provided two thirds of the Senators present concur" Cannot appoint judges or Article II, section 2, clause 2 "[H]e shall nominate, and by and with the officials without the advice Advice and Consent of the Senate, shall and consent of the Senate appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law" 1.1.2.3 Article III—The Judicial Branch Article III of the U.S. Constitution establishes the judicial branch of the federal government. This includes the Supreme Court of the United States, as well as any lower courts that Congress decides are necessary. This article also outlines some of the key rights of citizens, such as the right to a jury trial and protection against treason. These rights are included in this article to help protect individual liberties, which is a key responsibility of the judicial branch. The judicial branch is primarily responsible for interpreting laws passed by Congress and settling disputes that arise from the law. The judicial branch evaluates all laws and precedents against the Constitution, which is the supreme law of the land. If a law is found to be unconstitutional, the judiciary has the power to strike down the law, even if it was duly passed by Congress and signed by the president. Article III, section 2, Clause 1 of the Constitution states, "The judicial Power shall extend to all Cases... arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority." This clause grants the judicial branch specific powers:  Judicial review  Hear cases arising under federal law  Enforce the Constitution and federal laws  Interpret the Constitution and federal laws 26 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Article III, section 2, clause 2, grants the judicial branch the power to hear cases involving diplomats and the government (those in which the United States is a party), stating, "In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction." Poll Which judicial branch authority do you think is the most powerful? o Judicial review o Hear cases under federal law o Hear cases involving diplomats and the government o Enforce the Constitution o Interpret the Constitution and federal laws The following excerpts from Article III of the U.S. Constitution are important for you to be familiar with and apply to your work. U.S. Constitution, Article III, Section 1 “The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services a Compensation, which shall not be diminished during their Continuance in Office.” U.S. Constitution, Article III, Section 2 “The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority...” Limits of the Judicial Branch The Constitution places several limits on the power of the judicial branch. TABLE: CONSTITUTIONAL LIMITS ON THE JUDICIAL BRANCH Limit Location in the Text in the Constitution Constitution Cannot violate individual Fifth Amendment "No person shall be deprived of life, liberty, or rights property, without due process of law" © Management Concepts. See inside front cover for additional details. 27  LESSON 1 | THE LEGISLATIVE PROCESS Limit Location in the Text in the Constitution Constitution Cannot make laws Article III, section 2, clause 1 "The judicial Power shall extend to all Cases... arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority" Cannot circumvent the Article III, section 2, clause 1 "The judicial Power shall extend to all Cases, Constitution in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction;—to Controversies to which the United States shall be a Party;—to Controversies between two or more States;— between a State and Citizens of another State;—between citizens of different States;— between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or subjects." 1.2 CONGRESS It is important to understand how Congress and congressional committees are organized. In addition to providing the legislation for the department to operate, the congressional committees that provide oversight to the DoD also provide significant direction through the appropriations and authorization laws and interact extensively with DoD leaders to develop their positions. Discussion  What legislation do we need from Congress to execute our programs? 1.2.1 Organization of Congress The U.S. Congress consists of two bodies, the House of Representatives and the Senate. These bodies have equal powers even though their sizes and the terms of their members differ. The House of Representatives has 435 voting members. The number of representatives per state is based on each state’s population. Each representative represents approximately the same number of people. Each state has two senators for a total of 100 Senate members. The senators represent their states. 28 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT ORGANIZATION OF CONGRESS Since representatives serve the people of their districts, the U.S. Constitution requires any revenue bills (e.g., tax increases) to be initiated in the House of Representatives. By tradition, appropriation bills are also initiated in the House of Representatives. Senators serve six-year terms while representatives serve two-year terms. Since the entire House of Representatives is up for election every two years, each election cycle elects a new Congress. In addition to the number designation of each Congress, each year of Congress is considered a session. Discussion  What is the number of the current Congress and when did the session start? The composition of Congress is determined by the outcomes of elections held every two years, when all 435 seats in the House of Representatives and one-third of the 100 seats in the Senate are up for election. Congress is made up of members from all 50 states, representing a range of beliefs, communities, and political perspectives. Members also represent a large range of professional backgrounds, including law, business, education, and military service. The majority of congressional elected officials come from one of the two major political parties— Democrats and Republicans—but there are a few members of the Independent or other political parties in Congress. Most members who are not part of one of the major parties will still choose to caucus with one of the major parties, and members of Congress often vote along party lines. This © Management Concepts. See inside front cover for additional details. 29  LESSON 1 | THE LEGISLATIVE PROCESS can make the legislative environment in Congress highly polarized, but members are still expected to try to work together to find common ground and serve the needs of their constituents. U.S. territories and districts, such as Puerto Rico and Washington, D.C., are not represented in the same way as states in the U.S. Congress. These territories do not have voting representation in Congress, but they can still participate in the political process by electing a delegate to the House of Representatives. This delegate can participate in committee meetings and other legislative activities but cannot vote. There is no representation for U.S. territories and districts in the Senate. Discussion  Can you name the six territories and districts that do not have voting members in the House of Representatives? 30 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 1.2.2 EXERCISE: THE CURRENT CONGRESS Directions  Use the links provided or other resources to research and answer the questions about the current Congress. Refer to Websites For the current House of Representatives profile, visit: http://clerk.house.gov/. For the current Senate profile, visit: https://www.senate.gov/senators/index.htm. Questions 1. Of the 435 members of the House of Representatives, how many are Republicans? How many are Democrats? How many are Independents? 2. Of the 100 members of the Senate, how many are Republicans? How many are Democrats? How many are Independents? 3. How many vacancies are there in the House and Senate? © Management Concepts. See inside front cover for additional details. 31  LESSON 1 | THE LEGISLATIVE PROCESS 1.2.3 Current Committees Congress conducts most of its business through its committee structure and assignments. There are three basic types of committees:  Standing. These can be considered the permanent committees.  Special, select, or other. These committees are established for a specific topic area and can be either long-term or dissolved once the issue has been addressed.  Joint. These include members from both the House of Representatives and the Senate.  Conference. If the bills passed in the House and Senate differ, a conference committee with members from each respective chamber is convened to resolve differences. In addition, of the special, select and other committees, the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence authorize and provide oversight of all the intelligence agencies and funding, including those managed by the DoD. HOUSE AND SENATE COMMITTEES Of the 20 standing committees in the House of Representatives and 16 in the Senate, four have the most direct influence over the operations of the Department of Defense:  House and Senate Armed Services  House and Senate Appropriations 32 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT  House Oversight and Accountability and Senate Homeland Security and Governmental Affairs  House Permanent Select Committee on Intelligence and Senate Select Committee on Intelligence Refer to Website To review all congressional committees, visit: https://www.congress.gov/committees. 1.2.4 Personal vs. Committee Staff In discussing congressional staff members, a distinction must be made between the personal staff of members and the professional staff who serve committees. Personal Staff Each member of Congress is given a personal staff to help assist in matters related to constituent support as well as lawmaking issues. These individuals:  Are paid out of allowances granted to each member  Serve at the will of the members they work for  Are often recent graduates who gain experience working for a member before moving to other positions Committee Staff Professional staffers provide support to the various committees of Congress. These individuals:  Are hired by the committee chair and may be supplemented in their work by individuals from members’ staffs who are placed with the committee  Serve at the will of the committee chair and are not civil service employees  Specialize in matters before their committee. They draft legislation, review budgets, and serve as institutional memory on many issues. 1.2.5 Passing Legislation All proposed legislation and nearly all formal actions by either of the two houses take the form of bills, joint resolutions, or concurrent resolutions. Bills A bill is a legislative proposal of a general nature. A bill may propose either a public or private matter, but both are numbered in the same sequence. Public bills are the most numerous. Private bills are designed to affect or benefit specific individuals or groups of individuals. Together, bills account for a large majority of the total of legislative proposals of each Congress. The Senate numbers bills in sequence starting with number 1, and each number is preceded by the designation S. House bills are similarly numbered and prefaced by H.R. Thus, bill number 100 in the Senate is written S.100, and in the House, H.R.100. Joint Resolutions Joint resolutions may originate in either the House of Representatives or Senate. There is little practical difference between a bill and a joint resolution. Both are subject to the same procedure. A © Management Concepts. See inside front cover for additional details. 33  LESSON 1 | THE LEGISLATIVE PROCESS joint resolution originating in the House of Representatives is designated H.J. Res. (S.J. Res. for the Senate) followed by its individual number. Joint resolutions become law in the same manner as bills. Congress also uses the joint resolution process to consider a proposed amendment to the Constitution. Article V of the Constitution states that Congress may propose such amendments upon two-thirds vote of both House and Senate. Upon approval, Congress sends the proposed amendment directly to the Administrator of General Services for submission to the individual states for ratification consideration. Ratification requires the approval of three-fourths of the states. Proposed amendments are not presented to the president for approval. Concurrent Resolutions Matters affecting the operations of both the House of Representatives and Senate are usually initiated by means of concurrent resolutions. A concurrent resolution originating in the House of Representatives is designated H.Con.Res. (S.Con.Res. for the Senate) followed by its individual number. The concurrent budget resolution is an example of such a resolution. On approval by both the House and Senate, a concurrent resolution is signed by the Clerk of the House and the Secretary of the Senate; it is not presented to the president for action. Simple Resolutions A matter concerning the operation of either the House of Representatives or Senate alone is initiated by a simple resolution. A resolution affecting the House of Representatives is designated H.Res. followed by its number (S.Res. for the Senate). It is not presented to the president for action. 1.2.5.1 Origins of Legislation Federal legislation is originated by a recommendation from the president, a member of the House or Senate, or House or Senate committee. The legislative process begins when a bill is introduced. The source of the bill can have an impact on how likely it is the bill will be passed. Regardless of the origin of the legislation, all bills must pass through the same legislative process. Recommended by the President The Constitution provides that the president “shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient...” The president fulfills this duty either by personally addressing a joint session of the two houses or by sending messages in writing to Congress, or to either body thereof, which are received and referred to the appropriate committees. The president usually presents or submits his annual message on the State of the Union shortly after the beginning of a session. Bills to carry out the recommendations of the president are usually introduced by request by the chairpersons of the various committees or subcommittees thereof that have jurisdiction of the subject matter. Sometimes the committees themselves may submit and report original bills to carry out such recommendations. In addition to recommendations proposed in the annual budget and the State of the Union address, there is another way the president can recommend a specific bill. An executive branch department 34 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT may submit a proposed bill—with the approval of the Office of Management and Budget (OMB) on behalf of the president—to a congressional committee or subcommittee. Introduced by Members The ideas for legislative proposals may come from an individual representative or senator, from any of the executive departments of the government, from private organized groups or associations, or from any individual citizen. However, only senators and representatives can introduce legislative proposals in their respective houses. When introduced, such proposals are referred to the standing committees that have jurisdiction over the subject matter. Introduced by Committees Members frequently introduce different bills that have a similar purpose. In such a case, the committee considering the bills may add to one of them the best features of the others for reporting to the parent body or draft an entirely new bill (known as an original bill) and report it in lieu of the others. 1.2.5.2 How a Bill Becomes a Law THE LEGISLATIVE PROCESS © Management Concepts. See inside front cover for additional details. 35  LESSON 1 | THE LEGISLATIVE PROCESS Poll Which branch(es) of the government has the authority to originate bills? Select all that apply. o The executive branch o The legislative branch o The judicial branch When the question of agreement to, or formal acceptance of, a resolution is raised in Congress:  Concurrent and simple resolutions are agreed to or adopted  Bills and joint resolutions are passed and sent to the president for signature Introduction and Referral to Committee INTRODUCTION AND REFERRAL TO COMMITTEE Any member of Congress may introduce a bill at any time while their chamber is in session by simply placing it in the hopper provided for the purpose. The sponsor’s signature must appear on the bill. A public bill may have an unlimited number of co-sponsoring members. The bill is assigned its legislative number by the clerk and referred to the appropriate committee. The bill is then printed in its introduced form. An important phase of the legislative process is the action taken by committees. During this phase, the most intense consideration is given to the proposed measures; this is also the time when the people are given their opportunity to be heard. Each piece of legislation is referred to the committee that has jurisdiction over the area affected by the measure. 36 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Consideration by Committee—Public Hearings and Markup Sessions Usually, the first step in this process is a public hearing, where the committee members hear witnesses representing various viewpoints on the measure. Each committee makes public the date, place, and subject of any hearing it conducts. A transcript of the testimony taken at a hearing is made available for inspection in the committee office, and frequently the complete transcript is printed and distributed by the committee. After hearings are completed, the bill is considered in a session that is popularly known as the markup session. Members of the committee study the viewpoints presented in detail. Amendments may be offered to the bill and the committee members vote to accept or reject these changes. This process can take place at either the subcommittee level, the full committee level, or both. For example, the House Appropriations Committee has subcommittees for each of the appropriations bills. The subcommittee on Defense holds hearings, drafts a bill, and forwards the proposed bill to the full Appropriations Committee. Committee Action At the conclusion of deliberation, a vote of committee or subcommittee members is taken to determine what action to take on the measure—it can be reported, with or without amendment, or tabled, which means no further action on it will occur. If the committee has approved extensive amendments, it may decide to report a new bill incorporating all the amendments. This is known as a clean bill, which will have a new number. COMMITTEE ACTION © Management Concepts. See inside front cover for additional details. 37  LESSON 1 | THE LEGISLATIVE PROCESS If the committee votes to report a bill, the explanatory statement accompanying the legislation is written. The committee's explanatory statement is generally referred to as the committee report. This report describes the purpose and scope of the measure and the reasons for recommended approval. While the committee report is not normally part of the bill, it does show intent of the committee and is critical in guiding decisions within federal agencies. If specifically directed by the committee chair, the explanatory statement can be incorporated in the bill and, if signed by the president, becomes part of the law. House report numbers are prefixed with H. Rept. and then a number indicating the Congress; Senate reports are S. Rept. Refer to Digital Guide Review the learning point Committee Reports and consider the key question. House and Senate Floor Consideration HOUSE AND SENATE FLOOR CONSIDERATION Consideration of a measure by the full House or Senate can be a simple or very complex operation. In general, a measure is ready for consideration by the full chamber after a committee has reported it. Under certain circumstances, it may be brought to the floor directly. The consideration of a measure may be governed by a rule. A rule is itself a simple resolution, which must be passed by the House or Senate, that sets out the particulars of debate for a specific bill, including how much time will be allowed for debate, whether amendments can be offered, and other matters. Debate 38 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT time for a measure is normally divided between proponents and opponents. Each side yields time to those members who wish to speak on the bill. When amendments are offered, they are also debated and voted upon. After all debate is concluded and amendments decided upon, members are ready to vote on final passage. In some cases, a vote to recommit the bill to committee is requested. This is usually an effort by opponents to change some portion or table the measure. If the attempt to recommit fails, a vote on final passage is ordered. After the bill has passed one body (House or Senate), the bill is called an engrossed bill. Resolving Differences—Conference Committees RESOLVING DIFFERENCES—CONFERENCE COMMITTEES After a measure introduced in the House passes the chamber, it goes to the Senate for consideration. A bill must pass both bodies in the same form before it can be presented to the president for signature into law. If the Senate changes the language of the measure, it must return to the House for concurrence or additional changes. This back-and-forth negotiation may occur on the House floor, with the House accepting or rejecting Senate amendments or the complete Senate text. When either the House or Senate requests a conference and the other chamber agrees, conferees are appointed and all the papers relating to the measure (referred to as the official papers) are transmitted to the conference. This includes the original bill, amendments, and the various messages of transmittal between the houses. Conference committees are composed of members of the respective House and Senate committees (selected by the ranking majority and minority members of the committees) and non- committee members, if determined appropriate. Because the conferees of each house vote as a © Management Concepts. See inside front cover for additional details. 39  LESSON 1 | THE LEGISLATIVE PROCESS unit, each chamber may appoint as many conferees as it chooses to reconcile the differences between the two houses—the sole purpose of a conference. Thus, a larger number of conferees than the other house does not provide an advantage. Conference committees are very powerful and have often been referred to as the third chamber of Congress. After deliberation, the conferees may make one or more recommendations, including that the:  Originating chamber recede from all or certain of its amendments  Other chamber recede from its disagreement to all or certain of the originating chamber amendments and agree to the same  Conference committee reports an inability to agree in all or in part. Usually, however, there is a compromise. Conferees dealing with an amendment or a series of amendments are more limited in their options than conferees dealing with a bill passed by the second house with an amendment in the nature of a substitute. These latter conferees:  Can only deal with the matters in disagreement  Cannot insert new matter or leave out matter agreed to by both houses, and if they exceed their authority, a point of order will lie against the conference report. Each house may instruct its conferees, but this is rarely done. Such instructions are not binding since conferences are presumed to be full and free—one house cannot restrict the other house’s conferees. Conference committees also prepare an explanatory statement to indicate whether the final bill recedes to the House or the Senate on each point of disagreement. The conference report may also include additional guidance to the relevant federal agencies. Similar to the initial explanatory statements, the conference statement can be incorporated into law if the committee chairs choose to do so. 40 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT Final Step FINAL STEP After a measure has been passed in identical form by both the House and Senate, it is considered enrolled. It is sent to the president, who may sign the measure into law, veto it and return it to Congress, let it become law without signature, or at the end of a session, pocket-veto it. 1.2.5.3 Presidential Action—Approval or Veto The president, under Article I, section 7, clause 2, of the Constitution, has ten days (Sundays excepted) after the bill has been presented to him in which to act upon it. The following actions can occur:  Approval and signature. If the president approves the bill and signs it, giving the date, it is transmitted with this information by messenger to Congress. The bill is delivered to the Archivist of the United States who designates it as a public or private law, depending upon its purpose, and gives it a number. Public and private laws are numbered separately and serially.  Does not sign but allows the bill to become law. If the president does not wish to approve a bill but is unwilling to veto it, the president may, by not returning it within the ten-day period after it is presented, permit it to become a law without approval. The archivist makes an endorsement on the bill that, having been presented to the president of the United States for approval and not having been returned to the house of Congress in which it originated within the time prescribed by the Constitution, it has become a law without presidential approval. © Management Concepts. See inside front cover for additional details. 41  LESSON 1 | THE LEGISLATIVE PROCESS  Pocket veto. If Congress is adjourned and the president fails to sign a bill during the ten-day period, that bill does not become law. This action is referred to as a pocket veto.  Veto. If the president does not favor a bill and vetoes it, the bill is returned the house of origin without approval, together with objections thereto (referred to as the veto message). According to then Senate Parliamentarian Robert Dove:1 If, upon reconsideration by either House, the House of origin acting first, the bill does not receive a two-thirds vote, the President’s veto is sustained and the bill fails to become a law. If a bill which has been vetoed is passed upon reconsideration by the first House by the required two-thirds vote, an endorsement to this effect is made on the back of the bill, and it is then transmitted, together with the accompanying message, to the second House for its action thereon. If likewise reconsidered and passed by that body, a similar endorsement is made thereon. The bill, which has thereby been enacted into law, is not again presented to the president, but is delivered to the Administrator of the General Services Administration for deposit in the Archives, and is printed, together with the attestations of the Secretary of the Senate and the Clerk of the House of its passage over the president’s veto. 1.2.5.4 Permanent vs. Temporary Legislation Given our constitutional framework, legislation passed by Congress and signed into law pertains to that session of Congress only, unless the language in the law indicates that it is relevant for future periods of time. These terms are called words of futurity and are indicated by phrases such as in this and succeeding acts or hereafter. As a general rule, the appropriations acts are effective for only the period of time for each appropriation included in the act, unless there are specific words of futurity for particular provisions. The same rule applies to authorization acts. They govern the decisions made during that particular session of Congress. When legislation includes enduring authorities, they are codified into the appropriate sections of the United States Code (U.S.C.) with the next update. Tip The resource Glossary of Acronyms defines all of the acronyms used in this course. Refer to Resource Resource: Glossary of Acronyms 1 Dove 1997 42 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 1.2.6 Federal Government Accountability and Transparency Recent decades have brought increased pressure from Congress on accountability, transparency, efficiency, and effectiveness of government operations. Numerous pieces of legislation have addressed these requirements, leading to improved strategic planning, annual performance planning and reporting, assessment of enterprise and program-level risks, and accuracy in financial reporting. Three acts worth highlighting are the Chief Financial Officers (CFO) Act, Government Performance and Results Act (GPRA), and Government Performance and Results Act Modernization Act (GPRAMA). The CFO Act focused the major federal agencies on CFO activities in addition to federal budgeting. It fundamentally increased the emphasis on achieving clean audit opinions and created the CFO Council to help further that goal. Within DoD, the Under Secretary of Defense (Comptroller)—the USD(C)—was designated as the CFO and the Defense Finance and Accounting Service was created in response to the CFO Act. GPRA and GPRAMA are primarily focused on integrating strategic planning, performance planning and performance reporting with the budgeting and reporting processes in the federal agencies. The strategic planning framework, producing both the National Defense Strategy and the Strategic Management Plan, addresses those requirements for DoD. They include performance goals, objectives, and annual performance measures. The agency’s Annual Financial Report includes reporting against the prior year’s targets. In addition, the annual performance plan and report are provided to Congress concurrent with the President’s Budget estimate each year. These acts, taken together, have significantly increased federal agencies’ focus on accurate financial reporting, reducing material weaknesses, undertaking robust strategic planning and integrating performance with their budgeting and execution activities. 1.3 KEY LEGISLATION GOVERNING FINANCIAL MANAGEMENT Financial management involves planning, organizing, directing, and controlling financial resources. Within the federal government, this involves collecting, allocating, and using financial resources to implement the programs and services provided by the government. This critical process is guided by a series of laws, regulations, and policies to ensure transparency, accountability, and the responsible use of taxpayer funds. Several key pieces of legislation govern the process of financial management within the federal government. There was no constitutional requirement for a consolidated budget from the executive branch until 1921. Since then, Congress has passed a number of significant laws governing how and when the budget is submitted, how the appropriated funds are managed, how Congress will manage the budget deficit and control of the federal debt, and how it will hold the executive branch accountable for transparent, efficient government operations. © Management Concepts. See inside front cover for additional details. 43  LESSON 1 | THE LEGISLATIVE PROCESS FEDERAL BUDGET LEGISLATION TIMELINE Highlights of key legislation guiding financial management in federal agencies include:  1921 Budget and Accounting Act. Required the president to submit an annual budget proposal to Congress and established OMB and the Government Accountability Office (GAO, formerly the General Accounting Office).  1974 Congressional Budget and Impoundment Control Act: — Established House and Senate Budget Committees — Created Congressional Budget Office — Established detailed calendar for the congressional budget process — Established the framework and guidance for impoundment — Increased the controls around the Antideficiency Act (ADA) statutes. Specifically, funding was no longer available for obligation until apportioned by OMB and allocated internally within the agencies.  1990 Chief Financial Officers (CFO) Act: — Established CFOs in specified agencies and cabinet departments — Tasked CFOs with overseeing financial management and financial information systems in the federal government  1993 Government Performance and Results Act (GPRA): — Focused budget process on planning and outcomes — Required agencies to submit strategic plans — Required annual performance plans — Required performance reports 44 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT  2010 GPRA Modernization Act (GPRAMA): — Annual Performance Plan requires OMB to establish federal priority goals and agencies to establish priority goals — Agency Performance Reports (APRs) required annually, but quarterly for any priority goals — APR must show actual performance trend over past five years Tip Another way to think about this legislation is by type. The key pieces of legislation can be categorized into three main types:  Legislation addressing the federal budget process: — 1921 Budget and Accounting Act — 1974 Congressional Budget and Impoundment Control Act  Legislation addressing fiscal controls and controlling the deficit between revenue and spending: — 1985 Balanced Budget and Emergency Deficit Control Act — 1987 Balanced Budget and Emergency Deficit Control Reaffirmation Act — 1990 Budget Enforcement Act — 1993 Omnibus Reconciliation Act — 1996 Line Item Veto Act — 2011 Budget Control Act  Legislation addressing government accountability: — 1990 CFO Act — 1993 GPRA — 2010 GPRAMA Deficit Control Legislative History Since the beginning of our nation, Congress has been concerned with the balance of revenue and spending. In the latter part of the twentieth century, Congress passed a number of different pieces of legislation to drive toward a more balanced budget or control the amount of the federal debt. Key pieces of legislation were the 1985 Balanced Budget and Emergency Deficit Control Act, the 2011 Budget Control Act, and a number of other bills during and after that time. The main components of these bills are:  Establishment of budget controls, most recently for defense and non-defense discretionary programs  Establishment of sequestration requirements when controls are breached, either by the mandatory program formulas or through additional discretionary appropriations (currently, there are no budget controls for the discretionary appropriations)  Debt ceiling limitations. The debt ceiling was raised to $31.4 trillion in December 2022. If the federal government exceeds that amount, it will cause a default on the federal government’s obligations. © Management Concepts. See inside front cover for additional details. 45  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT LESSON 2 DOD FISCAL LAW FRAMEWORK Lesson Objectives After completing this lesson, you will be able to: 1.2.1 Identify the basic underlying concepts and principles in appropriations law 1.2.2 Describe how the DoD and congressional committees collaborate on appropriations law 1.2.3 Determine the legal availability of appropriations based on purpose, time, and amount 1.2.4 Recognize common challenges or problems with appropriations for purpose This lesson covers:  The sources of appropriations  The DoD's close working relationship with Congress about appropriations  The three congressional controls of appropriations  How to research appropriation law issues PRINCIPLES OF APPROPRIATIONS LAW Congress has articulated, through statutes and the framework of the Constitution, that three principles guide the use of appropriations: compliance with purpose, time, and amount. The purpose principle is the broadest and requires the most interpretation within the agencies. As a result, more statutes, more regulations, and more case studies address this principle. © Management Concepts. See inside front cover for additional details. 46  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 2.1 LEGAL FRAMEWORK FOR FISCAL LAW LEGAL FRAMEWORK FOR FISCAL LAW Fiscal law, or appropriations law, is based on the U.S. Constitution, permanent and annual legislation in conformance with the U.S. Constitution, and the regulations, policies, and legal counsel decisions that govern the use of appropriations made available by Congress. The Constitution establishes a framework that requires an appropriation by Congress before any funds are disbursed by the U.S. Treasury. As a result, the authority of the federal agencies to engage in activities or enter into obligations must have been authorized and appropriated by Congress in public law. The most common laws are the annual authorization and appropriations acts. A number of other permanent statutes dealing with fiscal law authorities are codified in the United States Code. 2.1.1 Constitutional Authority to Obligate and Expend Funds The following provisions of the Constitution provide the underpinning for the budget and funds control process:  Article I, section 7, empowers Congress to pass bills for the raising of revenue and delineates how bills will pass from Congress to the president for signature or veto  Article I, section 8, clause 1, empowers Congress to collect taxes  Article I, section 9, clause 7, requires appropriations in law before money may be spent from the Treasury. The term appropriation applies broadly to any law that permits a government employee to spend money, not just to the regular appropriations bills. 2.1.2 Role of Appropriations in Controlling Agencies Congress exercises its authority over DoD spending through three primary means:  Different appropriations for different missions and functions  Annual authorization act  Program details contained in committee reports that accompany authorization and appropriations acts © Management Concepts. See inside front cover for additional details. 47  LESSON 2 | DOD FISCAL LAW FRAMEWORK Discussion  How does congressional oversight through appropriations and authorizations ensure that the DoD is using funds for authorized purposes and in compliance with fiscal law? 2.1.3 Types of Appropriations Appropriations can be categorized as either specific vs. general or lump sum vs. line-item appropriated. The designations help understand congressional intent and help agencies determine flexibility in executing the appropriations. In addition, the interpretation of controlling statutes, such as the Antideficiency Act, depend in part on these designations. 2.1.3.1 Specific vs. General General appropriations, such as for operation and maintenance, often provide for a broad range of costs associated with the operation of the agency. However, Congress also provides specific appropriations, such as those for aircraft, missiles, ships, research and development, and most military construction. Example: Army Appropriations The Operation and Maintenance, Army (O&M, A) appropriation states, “For expenses, not otherwise provided for, necessary for the operation and maintenance of the Army...” On the other hand, the Aircraft Procurement, Army (APA) appropriation states, “For construction, procurement, production, modification, and modernization of aircraft, equipment, including ordnance, ground handling equipment, spare parts, and accessories therefor; specialized equipment and training devices; expansion of public and private plants, including the land necessary therefor, for the foregoing purposes, and such lands and interests therein, may be acquired, and construction prosecuted thereon prior to approval of title; and procurement and installation of equipment, appliances, and machine tools in public and private plants; reserve plant and Government and contractor-owned equipment layaway; and other expenses necessary for the foregoing purposes...” The O&M, A appropriation is very general while the APA appropriation provides quite specific language. When a specific appropriation is provided for a specific mission or effort, only that appropriation may be used for that effort. A general appropriation is no longer available for that specific effort because a specific appropriation has been provided for that purpose. If DoD were to use several different appropriations to fund a specific mission, or to revert to an operation and maintenance 48 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT appropriation when the funds in a specific appropriation were depleted, Congress would lose control over DoD activities and spending since there would be no limit on any specific activity. Discussion  How many specific and general appropriations can you name? 2.1.3.2 Lump Sum Even though Congress provides specific appropriations for specific purposes, it usually does not include the program details in the appropriations law. The appropriations are characterized as lump- sum appropriations since the details are not included in the appropriations language itself. With only one or two exceptions, DoD appropriations are lump-sum appropriations. Congress includes the program details supporting an appropriation in the committee reports that accompany the appropriations act. DoD and some other agencies are provided flexibility to reprogram funds between programs within an appropriation because they were not appropriated at the line-item level. Since the program details are not included in the appropriations act language, the congressional committees can set reprogramming threshold levels at whatever they choose. This gives DoD and other agencies the latitude to make some changes without seeking approval from Congress. Reprogramming and transfer policies will be addressed later. Discussion  What are some line-item appropriations in the DoD? 2.1.3.3 Role of Authorization in Appropriations Law The annual National Defense Authorization Act (NDAA) provides two types of authorizations:  Enabling or organic, which authorizes new projects, organizations, and activities  Authorizing appropriations, which authorize the appropriations to provide funding for the agencies In the DoD, authorizations are explicitly required for major military construction projects, the military end strength, military personnel pay and benefits, major procurement programs, and RDT&E new starts as well as any requested multiyear programs. 2.1.4 Role of Committee Reports in Controlling Agencies By including the program details in the committee report and not in the appropriations or authorization acts themselves, Congress avoids making the program details legally binding. DoD adheres to the program details contained in the committee reports because ignoring the wishes of congressional committees can cause Congress to make the details legally binding in future appropriations acts. © Management Concepts. See inside front cover for additional details. 49  LESSON 2 | DOD FISCAL LAW FRAMEWORK 2.2 PRINCIPLES OF APPROPRIATIONS LAW Since appropriations law begins with the Constitution, Congress has passed additional statutes that together address three primary principles for federal appropriations:  Purpose  Time  Amount The most authoritative source of legal use of appropriated funds is the appropriations act itself and the relevant National Defense Authorization Act. Refer to Website To access the status of the latest legislation, visit: http://www.congress.gov. 2.2.1 Overarching Controls on Appropriations One way to think of the availability of appropriations is through the following four criteria:  Laws and regulations both govern the use of appropriations  Funds are not available for obligation until they have been delegated through OMB and the Office of the Secretary of Defense (OSD)  Legislative earmarks and special interest items in reports both limit execution flexibility but in different ways  Appropriations cannot be used indirectly for activities that are not legally funded directly 2.2.2 Principle of Purpose Funds may be obligated and expended only for the purposes authorized in appropriations acts or other laws. 2.2.2.1 Basic Principle The purpose statute, codified at 31 U.S.C. 1301, states that appropriations shall be applied only to the objects for which the appropriations were made, except as otherwise provided by law. 50 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 2.2.2.2 Necessary Expense Doctrine The necessary expense doctrine is critical for satisfying the purpose PURPOSE statute when there is not specific statutory authority for a particular object. The expense or obligation must be necessary, “will contribute materially” or incidentally, and:1  Must be logically connected to the appropriation. It must be reasonably necessary in carrying out the authorized function, though it does not have to be the only way (or even the best way). Agency discretion is allowed, but it must be within reason.  The expenditure cannot be for a purpose that is prohibited by law  The expenditure cannot be otherwise provided for in another, more specific appropriation (incorporated specific vs. general appropriation idea) The following examples are irrelevant for applying the three criteria of necessary expense:  Saves money  Fair  Logical  Implied elsewhere  Common practice  Sympathy  The boss approved it  Ignorance of law  Good idea 2.2.2.3 Applying the Necessary Expense Doctrine in DoD Within the DoD, the purpose statute and the necessary expense doctrine guide decisions on not only whether federal funds are appropriate for a particular purpose but also which appropriation to use. Purpose Guidance In general, federal funds cannot be used for personal benefit unless there is either a statute authorizing that activity or it is incidental to the mission of the organization and has an organizational benefit. Circumstances guiding gifts, food, personal qualifications, awards, coins, and rewards for recovery of lost property are all examples. The key statutes are listed in the table Common Purpose Statutes. TABLE: COMMON PURPOSE STATUTES Purpose Statute Notes Food for service members 37 U.S.C. 402 Basic allowance for subsistence Food necessary for training 5 U.S.C. 4109 For civilians 1 B-286457 2001 © Management Concepts. See inside front cover for additional details. 51  LESSON 2 | DOD FISCAL LAW FRAMEWORK Purpose Statute Notes Food necessary for training 10 U.S.C. 4301 and 9301 For military members Cash awards for military 10 U.S.C. 1124 Only for disclosures, suggestions, inventions or scientific achievements Awards for civilians 5 U.S.C. 4503-4504 - Medals, trophies, etc. for military 10 U.S.C. 1125 Does not include food Rewards for lost property 10 U.S.C. 2252 - Emergency and extraordinary 10 U.S.C. 127 Used for official representation activities, expense such as major change of command ceremonies GAO has provided additional criteria for several categories of expenses, such as food at conferences or training events. Three criteria must be met for it to be considered an appropriate expense:  The meals are incidental  Attendance at the food event is required for full participation  Employees are not free to take meals elsewhere without missing essential elements of the event Appropriation Guidance—Expense Investment Threshold The expense investment threshold, established in the appropriations acts, guides the correct appropriation to use for a specific purchase within the Department of Defense for real property and equipment. If the system unit cost is above the threshold, it is considered an investment and funded from either a procurement or research, development, test and evaluation appropriation. In addition, centrally managed items, such as ammunition, are funded from an investment appropriation. If the system unit cost it is below the threshold and it is not centrally managed, it is funded from either an Operation and Maintenance or a Research, Development, Test, and Evaluation appropriation. The following chart displays the decision tree for determining whether a purchase is an expense or investment. 52 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT EXPENSE AND INVESTMENT DETERMINATION PATHWAY $350K NOW Many audits have revealed that commands have used O&M funds to purchase separate components of a system when they should have used procurement funds for the entire system. This represents a violation of the purpose statute. A system exists if a number of components are designed primarily to function within the context of a whole and will be interconnected to satisfy an approved requirement. DoD FMR Volume 2A, Chapter 1, paragraph 2.1 provides additional guidance on applying the expense investment threshold. The DoD may, for instance, buy a computer server and treat it as an expense unless the server is interrelated to a computer network interface and is necessary to make the system interoperable. Refer to Websites To review additional guidance in Volume 2A, Chapter 1 of the DoD FMR, visit: https://comptroller.defense.gov/fmr/fmrvolumes.aspx. To review interim guidance from the Office of the Under Secretary of Defense (Comptroller) on the increased expense and investment cost threshold (revised to $350,000 in the FY 2023 DoD Appropriations Act), visit: https://comptroller.defense.gov/fmr/policymemos.aspx#vol2a. © Management Concepts. See inside front cover for additional details. 53  LESSON 2 | DOD FISCAL LAW FRAMEWORK Tip The FY 2023 Consolidated Appropriations Act, Division C, section 8039, increased the threshold to $350,000 and included a higher amount for items required by the combatant commands. Because the threshold is established as a general provision in each appropriations act, the amount can change with each separate legislation. Discussion  What are some examples of expenses consumed in operating and maintaining DoD that are normally financed with O&M appropriations? 2.2.3 Principle of Time TIME Placing time limits on appropriations allows Congress to align executive branch activities to the session of Congress that provided the appropriations. Section 1502(a) of 31 U.S.C. is generally referred to as the bona fide needs rule, which states, “The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability....” In other words, obligations can only be made within the period of availability as designated by Congress for each specific appropriation. 54 © Management Concepts. See inside front cover for additional details.  MODULE 1 | GOVERNMENT RESOURCE MANAGEMENT ENVIRONMENT 2.2.3.1 Time Period of Appropriations TIME PERIOD OF APPROPRIATIONS Obligational authority is:  Available. The available period refers to the period for which the appropriation is available for new obligations, disbursements, and obligation adjustments. For example, the period is generally one year for O&M appropriations and two years for Research and Development (R&D) appropriations.  Expired. When expired, disbursements and adjusting obligations are permissible but new obligations are not allowed for new scope. Every time-constrained appropriation is in an expired status for five years after the end of its period of availability.  Canceled. When canceled, the account is closed by Treasury and no adjustments are allowed, with the exception of intragovernmental corrections. One percent of current-year appropriations are available for paying obligations related to canceled appropriations. This limitation is contained on each current-year apportionment, and current-year funds are only used for bills associated with the corresponding type of canceled appropriation (current O&M for old-year O&M, current-year R&D for canceled R&D appropriations, etc.). With one exception, current-year funds are not permitted to be used to pay bills from expired appropriations. The DoD exception permits DoD to use a current-year appropriation to pay a bill from an expired appropriation if there is a negative unliquidated obligation in the expired appropriation. Since it is quite rare that disbursements in a prior-year appropriation will exceed the obligations in that appropriation, the use of the current-year appropriations for this type of bill almost never happens. Should this occur, the disbursements in the current-year appropriation will be backed out of the current-year account when a correction is made to the accounting in the expired account to correct the negative unliquidated obligation. The DoD authority is contained annually in the general provisions of the DoD Appropriations Act. © Management Concepts. See inside front cover for additional details. 55  LESSON 2 | DOD FISCAL LAW FRAMEWORK 2.2.3.2 Types of Appropriations Described by Period of Availability The largest annual DoD appropriations are:  O&M  Military Personnel The major multiple-year appropriations usually provided to the DoD, and their most common periods of availability, are:  Research, Development, Test, and Evaluation (RDT&E): two years  Most procurement accounts: three years  Shipbuilding and Conversion, Navy: five years, except that the Navy may incur certain obligations over longer periods until the ships are accepted into service (e.g., SCN 2007 was active until 2018)  Military Construction: five years  Defense Working Capital Funds (DWCF): no-year appropriation While this provides a general guide to the period of availability of appropriations by title, the appropriations act for each fiscal year is the definitive source document to determine the availability for every individual appropriation. It is not unusual for congress to embed an authority or sub- account within an appropriation that has a different period of availability. Although the appropriations are available for obligation until September 30, Congress normally limits the obligations for the last two months of the year to no more than 20% through a general provision in each appropriations act. Section 8004 of the 2022 Department of Defense Appropriations Act states:2