Federal Appropriations Law:
A Primer
James F. Nagle
Oles Morrison Rinker & Baker LLP
www.oles.com
nagle@oles.com
What is Federal Appropriations
Law
• Fiscal law
• The body of law that governs the
availability and use of federal funds
– GAO Principles of Appropriations Law,
Volume I, page 1 to 2
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Congress’s Role
• Decides whether to fund
• How much and how long to fund
• Sets terms and conditions of use
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Role of GAO
•
•
•
•
Financial and Program Audits
Legal Opinions
Legal Decisions
Publishes the Red Book
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Three Phases of an Appropriation
• Period of Availability
• Expired Phase – Five Years
• Closure – Returns to Treasury
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Specific versus General
Appropriations
• Agency must use Specific Appropriation to
the exclusion of General Appropriation
– Amount in Specific Appropriation is a ceiling
– Once Specific Appropriation is exhausted, cannot use
General Appropriation
• Two Appropriations available for the same
purpose – Use the “Rule of Election” and be
consistent
•
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Rules of Fiscal Law
• The propriety of the use of funds depends
on three things
– The Purpose of the obligation or expenditure
– The obligation must occur within the Time limits
applicable to the Appropriation
– The obligation expenditure must be within the
Amounts that Congress has established
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Purpose
• The Purpose statute, 31 U.S.C. 1301 (a)
• Necessary Expense doctrine
– The expenditure must be a logical relationship to the
Appropriation charged
– Must not be prohibited by law
– Must not be otherwise provided for
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Examples of Necessary
Expense Issues
•
•
•
•
•
Clothing
Water
Office Equipment
Business Cards
Entertainment
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Time Limitations
• Type of Appropriation / Duration
– Annual
– Multi-year
– No year
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Bona fide Needs Rule
• A fiscal year appropriation may be
obligated only to meet a legitimate, or
bona fide, need arising in, or continuing to
exist, in the fiscal year for which the
appropriation is made
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Bona Fide Needs
• Supply contracts
• Services contracts
– Non Severable – same as supply contracts
– Severable – normally charge appropriation
when services are rendered – but major
exceptions
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Amount – the Anti-Deficiency Act
• Cannot obligate the government in advance of
or in excess of an Appropriation
• Cannot accept voluntary services
• Issues
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–
–
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Indemnifications
Change Orders
Options
Judgment Fund
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