6F051O Module 2 Foundations of the Combat Comptroller PDF

6F051O, Module 2: Foundations of the Combat Comptroller Lesson 1 _ Fiscal Law Without reference, determine purpose, time, and amount IAW prescribed publications and guidance. Overview Determine Purpose, Time, and Amount Determine Purpose, Time, and Amount...

6F051O, Module 2: Foundations of the Combat Comptroller Lesson 1 _ Fiscal Law Without reference, determine purpose, time, and amount IAW prescribed publications and guidance. Overview Determine Purpose, Time, and Amount Determine Purpose, Time, and Amount We previously discussed the process of how the budget is formed, planned, and executed. Now we must examine what limitations or restrictions are placed on obligation authority: Purpose, Time, and Amount (PTA). Every transaction within a finance office is ultimately traced back to fiscal law. Fiscal law is the foundation for our entire career field. If you remember PTA and apply them in every financial situation, you can rest assured each taxpayer dollar has been spent legally. Before we can comprehend PTA, we must first understand fiscal law. Keeping current on new and existing laws that apply to how we utilize the funds we receive from Congress is not only important to you, but those appointed over you. Comptrollers rely on your decision support which must be based on sound interpretation of fiscal law. It deals with the availability of appropriations, pertains to the entire Finance career field, and requires financial managers (FM) to be familiar with the Constitution, PTA, and the Anti- Deficiency Act (ADA). No money shall be drawn from the Treasury, but in consequence of Appropriations made by law. United States (US) Constitution, Article I, Section 9 Origins of Fiscal Law Fiscal law originated with the US Constitution, Article I, Section 9, which states: "No money shall be drawn from the Treasury, but in consequence of Appropriations made by law." This quote means the federal government can buy nothing unless Congress first authorizes it through a committee process. Once the House of Representatives and the Senate agree on authorization legislation, the bill is passed, and the appropriation bill's approval process begins. The authorization bill gives budget authority to make purchases. Budget authority is not money. The amount of money we can spend comes in the appropriation bill. Until both of these are passed, no money can be spent. This fundamental principle of fiscal law was further expanded on in the US vs. MacCollum, when the court stated: "The established rule is that the expenditure of public funds is proper only when established by Congress, NOT that public funds may be expended unless prohibited by Congress." Stated, just because Congress doesn't say "no" this does not mean "yes." As an example, there is nothing in the regulation explicitly prohibiting a four-star general from buying a car (with gov't funds) to travel to, and from all the functions he/she may be required to attend. This does not mean he/she has the authority to make such a purchase. Fiscal Law Issues Understanding the origins of fiscal law is tied to the US Constitution and allows us to understand better how subsequent decisions affect how we can spend the money Congress appropriates to the DoD. Beginning with the premise stated in Article I, Section 9, we can base most of our decisions on whether a purchase is legal or not on this simple sentence. If Congress has not specifically authorized us to expend our funds, then we cannot do so. Many questions have been raised since the framers of the Constitution wrote this straightfor ward, concise sentence, and FM has been faced with difficult decisions about what can and cannot be purchased. When faced with a fiscal law issue, a financial analyst can use these simple approaches: Identify the appropriation. Determine whether the appropriation is available for the purpose. Determine whether the appropriation is available at the time. Determine whether the appropriation is available in the amount of the obligation. C O NT I NU E Purpose Statute The Purpose Statute was initially enacted on 3 March 1809 and states that funds may only be spent for purposes expressly authorized by Congress. This statute was passed to limit the discretion of Executive Branch agencies in spending appropriations issued by Congress. This clear and direct statute leads to the most significant number of ADA violations. More than 90% of the ADA violations that occur are violations of the Purpose Statute. The authorization bill passed each year by Congress explicitly states the purposes we may spend our money. Later, we receive the actual dollars in the appropriation bill. When Congress authorizes money for aircraft procurement, it is straightfor ward to determine what we can and cannot buy. However, when we receive lump-sum appropriations, such as Operation and Maintenance (O&M), the line between legal and illegal becomes much more "gray." When decisions are made concerning the proper use of an appropriation, there is a 3-part test: 1 The expenditure of an appropriation must be for a particular statutory purpose, necessary and incident to the proper execution of the general purpose of the appropriation. 2 The expenditure must not be prohibited by law. 3 The expenditure must not other wise be provided for. Title 31 United States Code (USC) 1301(a) does not require Congress to specify every specific item to be purchased. Government agencies have reasonable discretion to determine what is purchased. Congress has expressly authorized purchases as "necessary expenses" of an existing appropriation. Take the O&M appropriation, for example. There is no list stating what we can buy using O&M funds. Therefore, we have to apply the Necessary Expense Rule to our purchase decisions. Necessary Expense Rule The Necessary Expense Rule is the foundation of the Purpose Statute and requires that the same three tests must be applied to all purchases: 1 Logical relationship. 2 Not prohibited by law. 3 Not funded elsewhere. Can civilian clothes be purchased with government funds? Generally, the answer is no. However, the Government Accountability Office (GAO) has authorized the purchase of tuxedos for Secret Ser vice agents so that they could blend in at social functions. This purchase has an apparent logical relationship to agents accomplishing their mission, it is not prohibited by law, and it is not specifically funded for elsewhere. Therefore, this purchase is made legal because it passes all three tests of the Necessary Expense Rule. Another example is decorations for office areas during certain holidays. Congress and the Comptroller General have ruled seasonal decorations pass the three-part test as long as they are consistent with work-related objectives and not specifically for personal convenience. Whenever you are asked to decide concerning spending government funds, apply the three-part test of the Necessary Expense Rule. Time Statute The Time Statute states Congress appropriates funds for a certain length of time. Agencies must obligate their appropriations during this period of availability established by Congress, or the authorization expires. For example, the O&M appropriation is good for one fiscal year (FY). If we fail to obligate O&M dollars in the FY for which they are appropriated, we no longer have the authority to spend these dollars. An example is military construction funds. Usually, these funds are available for obligation for five FYs, again if we fail to appropriate in the allotted time, the money is lost to us. Congress places time limits on appropriations so they can periodically reevaluate whether the funds are being spent for the purpose they were intended. Types of Appropriations Appropriations are available for obligation for limited periods. To understand appropriations within the context of the time element, you need to know some basic definitions. Current appropriations are monies whose availability for new obligations has not yet expired under the terms of the governing appropriations act. Expired appropriations are monies whose availability has expired for new obligations, but which are available to adjust and liquidate previous obligations. All appropriations remain expired for five years. Closed (or canceled) appropriations are monies that are no longer available for any purpose. One way to understand definitions of TIME, as they relate to appropriations, is with the chart below. Current Appropriations – The green bar shows funds as current and available for obligation. Funds may be obligated during this period but are subject to appropriation rules and laws. Depending on the appropriation, the "current" period may be one year, two years, three years, or five years. Expired Appropriations – The yellow bar represents funds as expired. The basic rules for expired funds are: They are available for limited use up to five years after the date the funds expired They are not available for new obligations Closed Appropriations – After five years, the agency must STOP (red bar) using these funds for any purpose. The money is now closed, also known as "canceled." This means: The funds are not available for any purpose. You cannot obligate them. You cannot use them to adjust contracts. The funds become miscellaneous receipts to the Treasury. If you have a legal liability related to a closed appropriation, you MUST use current year funds to pay it. Annual Appropriations – Annual appropriations, also called one-year appropriations are based on TIME (duration), and there are three types of appropriations: Annual appropriations Multi-year appropriations No-year appropriations They are made for a specified fiscal year and are available for new obligations only during that fiscal year. Routine activities of the federal government are, for the most part, financed by annual appropriations. The O&M and Personnel appropriations are annual appropriations. All appropriations are presumed to be annual appropriations unless the appropriations act expressly provides other wise. Multiple-Year Appropriations – Multiple-year appropriations are available for new obligations for a definite period over one fiscal year. Apart from the extended period of availability, multiple-year appropriations are subject to the same principles applicable to annual appropriations. Multiple-year defense appropriations include: Research, Development, Test, & Evaluation (RDT&E) funds (2 years) Procurement funds (3 years) Military Construction funds (5 years) No-year Appropriations – These appropriations are available for new obligations without fiscal year limitation. For a budget to be a no-year appropriation, the appropriating language must expressly state so. The standard language used to make a no-year appropriation is "to remain available until expended." However, other languages will suffice as long as its meaning is unmistakable, such as "without fiscal year limitation." The rules relating to no-year appropriations are simple. All statutory time limits as to when the funds may be obligated and expended are removed, and the funds remain available for their original purposes until paid. DoD Working Capital and Base Realignment and Closure (BRAC) funds are no-year appropriations. Bona Fide Need Rule states: "a fiscal year appropriation may be obligated only to meet a legitimate, or bona fide need arising in, or in some cases before but continuing to exist in, the fiscal year for which the appropriation was made." For example, ordering 500 boxes of copier paper one week before the end of the FY, when you have enough paper to make it through to the end of the FY, would be a violation of the Bona Fide Need Rule.  There are some exceptions to the Bona Fide Need Rule, such as lead-time exception, training, and stock level. LE A D - T I ME E X C E P T I ON TRAI NI NG S T OC K - LE V E L E X C E P T I ON The lead-time exception allows agencies to purchase something in one FY and deliver it in the next FY. This exception applies if it takes an extended period to receive the item. LE A D - T I ME E X C E P T I ON TRAI NI NG S T OC K - LE V E L E X C E P T I ON Training is an authorized expenditure, as long as an approving official deems the training necessary, regardless of when the training is delivered. For example, in September, your training manager determines you need to attend a training course offered in November. This is a legitimate expense under the Bona Fide Need Rule because the training was deemed necessary in the previous FY, and was not available until the next FY. LE A D - T I ME E X C E P T I ON TRAI NI NG S T OC K - LE V E L E X C E P T I ON A stock-level exception allows government agencies to purchase enough of an item to keep a sufficient stock level. Imagine if the Bona Fide Need Rule strictly controlled flight-line operations. Mechanics needing a part would have to wait until the part had to be put on the plane before they could order it. The stock-level exception allows us to avoid this. These are some of the exceptions to the Bona Fide Need Rule. FY closeout is often a time ripe for violations of the Time Statute. Simply because we have "fallout" money, or our budget has not been completely executed on 30 September does not allow us to ignore the Bona Fide Need Rule. This is not to say we cannot purchase an item in one FY, and have it delivered in the next FY, but the item must still meet all Bona Fide Need Rule requirements. Amount Statute The Amount Statute is governed by the Anti-Deficiency Act. Congress controls the use of appropriations by Purpose and Time, as discussed. They also set limits as to the amount of funds available. Anti-Deficiency Act (ADA) Three USCs make up the main part of the ADA as it relates to the amount. All three fall under Title 31. They are sections 1341, 1342, and 1517. Title 31 USC 1341 – Prohibits obligating or expending in advance or in excess of the appropriation. No government official may make or authorize an expenditure or obligation exceeding an amount appropriated by Congress or involve the government in a contract or obligation for payment before an appropriation is made by Congress. Title 31 USC 1342 – Prohibits accepting voluntary ser vices for the United States. Title 31 USC 1517 – Prohibits obligating or expending in excess of an apportionment. DO NOT overspend an appropriation. Penalties for violation of Title 31 USC sections 1341, 1342, or 1517: Written reprimand | Suspension of duty without pay | Fines up to $5,000 | Imprisonment up to two years | Or all of these. C O NT I NU E Use this icon to view the (below) StoryLine activity in full screen mode. If the StoryLine activity has background audio or music, you will need to mute the activity once complete. Thumbnail  C O NT I NU E Lesson 2 - Accounting Principles Without reference, determine data elements of the accounting structure IAW prescribed publications and guidance. Overview Withour reference, determine Data Elements of the Accounting Structure IAW prescribed guidance and publications Determine Data Elements of the Accounting Structure It is very important as an Analyst to know and understand the data elements of the accounting structure. For example, before you certify a document, you must know that the line of accounting is correct. We wouldn't want to mistakenly use a travel line of accounting for a GPC purchase. Let's discuss in detail what data elements DEAMS uses as the accounting structure.  Project, Task, Expenditure Type, and Organization A system of codes has been developed for recording financial transactions to meet the requirements for sound accounting procedures in DEAMS. This system of coding ensures standardization. When financial transactions are processed, financial managers code the document with a data element. These data elements contain groups of codes called major components. The guidance for data elements can be found in DAFMAN 65-604, Appropriation Symbols and Budget Codes. There are multiple configurations of major components available for use in the Air Force data elements, but we will focus on the PTEO elements. C O NT I NU E Use this icon to view the (below) StoryLine activity in full screen mode. If the StoryLine activity has background audio or music, you will need to mute the activity once complete. Thumbnail C O NT I NU E Standard Financial Information Structure The Standard Financial Information Structure (SFIS) is a comprehensive data structure that supports requirements for budgeting, financial accounting, interoperability (the use between different systems and/or government agencies), and external reporting needs  for the DoD. It is a common business language that standardizes financial reporting across the DoD rather than focusing on specific appropriations (i.e., programs, units, projects, etc.). Guidance for data elements can be found in Department of the Air Force Manual (DAFMAN) 65-604, Appropriation Symbols and Budget Codes, DoD FMR Volume 1, Chapter 4, Standard Financial Information Structure, and the SFIS Web Page: https://comptroller.defense.gov/ODCFO/sfis.aspx. There are multiple parts to the SFIS, referred to as flex fields, symbols, or codes. Each part must be placed in a specific area of the SFIS and has a specific meaning to the accounting system and the budget technicians who use them. C O NT I NU E Use this icon to view the (below) StoryLine activity in full screen mode. If the StoryLine activity has background audio or music, you will need to mute the activity once complete. Thumbnail C O NT I NU E Congratulations! You have completed the second of five modules. Please advance through the subsequent modules to continue.