Tips on Base Level Fiscal Law
Keith M. Dunn
Counsel to the Navy Surgeon General
Navy Bureau of Medicine and Surgery
keith.dunn@med.navy.mil
202.762.3299
www.twitter.com/TheFiscalLawyer
1
The Power of the Purse
• “No money shall be drawn
from the Treasury, but in
Consequence of
Appropriations made by
law . . . “
– Constitution, Article I,
section 9, clause 7
what does it mean?
“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.”
United States v. MacCollom, 426 US 317 (1976)
Sources of Law
• US CODE
• AUTHORIZATION ACTS
– AUTHORIZE PROJECTS - 10 USC 2802
– AUTHORIZE APPROPRIATIONS - 10 USC 114
– ENACT PERMANENT LEGISLATION
• APPROPRIATION ACTS
– 31 USC 1301(d)
– GENERALLY TEMPORARY
• OTHER PUBLIC LAWS
• OPINIONS
4
THE BOX DOES NOT
CHANGE!
PURPOSE
– Funds may be obligated
and expended only for
specified purposes;
TIME
– Funds are available for
obligation only for
specified time limits
AMOUNT
– Agencies may not spend
more than is appropriated
5
Banking and Laundering Funds
If it sounds too good to be
true, it is.
Sending money to GSA does
not change the character of
your money!
(Neither does MIPRing it
somewhere!)
You cannot extend the life of
money by offloading it
somewhere!
6
Interagency Agreements
B-308944, July 17, 2007
• A MIPR lacking
specificity as to the
goods or services
ordered does not
serve properly to
obligate DOD funds
• Funds must be used
within a reasonable
time of receipt in
order to meet the
bona fide needs rule.
7
Natural Resources Conservation Service – Obligating
Orders with GSA’s AutoChoice Summer Program
B-317249, July 1, 2009
• Current fiscal year funds
are not available for
obligation for orders
placed this fiscal year that
cannot be finalized until
the next fiscal year.
• Not a valid obligation to
the current fiscal year
because, until finalized,
the order is tentative and
incomplete.
8
Speaking of GSA . . .
Chemical Safety and Hazard Investigation Board – Interagency
Agreement with the General Services Administration, B318425,
December 8, 2009
• FY appropriations are not
available to fund
severable services that
will be performed in a
future fiscal year
• Proposed IA that does
not specify a period of
performance or the
services to be provided
(exposing the agency to
an unknown liability)
violates the Antideficiency
Act.
9
Funding of Severable Services Contracts
Severable Services Contracts, B-317636, April 21, 2009
• 10 USC 2410a authorizes agencies to enter into
severable services contracts that begin in one fiscal year
and end no more than 12 months later funded with the
appropriation current at the time of contract award
– a statutory exception to the bona fide needs rule
– only applies to contracts funded with time limited appropriations
• An agency using a multiple year appropriation would not
violate the bona fide needs rule if it enters into a
severable services contract for more than one year so
long as the period of performance does not exceed the
period of availability of the appropriation
• Bona fide needs rule not an issue with no-year funds
10
Nonseverable Services Contracts
•
A nonseverable services
contract that is not separated
for performance by fiscal years
may not be funded on an
incremental basis without
statutory authority.
•
Failure to obligate the estimated
cost of a nonseverable cost
reimbursement contract at time
of award violates the bona fide
needs rule.
Financial Crimes Enforcement
Network – Obligations under a
Cost-Reimbursement,
Nonseverable Services
Contract, B-317139, June 1,
2009
11
Recurring Purpose Issues
Plus ca change
plus c'est la
meme
12
Food
“[F]ree food . . . Normally
cannot be justified as a
‘necessary expense’ under
an appropriation since such
expenses are considered
personal expenses that
government employees are
expected to bear from their
own salaries.”
72 Comp. Gen. 178
Forest Service--Light
Refreshments for National
Trails Day, B-310023, April
17, 2008
13
The Food Exceptions
•
•
•
•
•
•
•
Emergencies
Training
Meetings
Conferences
Awards Ceremonies
Cultural Awareness Ceremonies
Travel
•
•
•
DoD DGC(Fiscal) memo dtd 1 Sept 05
FMB memo dtd 12 May 06
http://www.gao.gov/special.pubs/appforum2005/approfunds/index.
html
14
U.S. Army Garrison Ansbach, B-317423,
March 9, 2009
•
Food may be provided for
civilian employees, military
members, and nonfederal
participants such as
contractors and host nation
first responders at annual
antiterrorism training exercises
where necessary to achieve the
objectives of the training
exercise
•
That it would be an
“embarrassment” not to
provide food to host nation first
responders is not sufficient
justification for using
appropriated funds to buy food
for nonfederal personnel
15
Department of the Navy – Lunch for
Volunteer Focus Group
B-318499, November 19, 2009
•
•
•
•
In general, appropriated funds
are not available for personal
expenses, such as lunch
Whether to provide food for
focus group participation must
be decided on a case-by-case
basis
Here, no specific statutory
objective identified, so
appropriated funds not
available
Contrast with Veterans Benefits
Administration – Refreshments
for Focus Groups, B-304718,
Nov. 9, 2005
16
Bottled Water
The Rule:
personal expense!
Appropriated funds may be
used only upon a showing of
necessity; i.e., there is no
potable water available.
2 Comp. Gen 776 (1923) and
many other cases!
B-318588, Sept. 29, 2009
B-310502, 4 Feb 2008
17
Kitchen Appliances
• Use of Appropriated
Funds to Purchase
Kitchen Appliances, B302993, 25 June 2004
– appropriated funds may
be used to purchase
major kitchen appliances
that would be placed in
common areas for the
use of personnel at the
site
18
Clothing
“ . . . every employee of the
Government is required to
present himself for duty
properly attired according to
the requirements of his
position.”
63 Comp. Gen. 245, 246
(1984)
See also B-288828, 3 Oct 02;
B-289683, 7 Oct 02
19
The Clothing Exceptions
• Official Civilian DOD Uniforms: 10 U.S.C. § 1593
• Administrative Expenses Act: 5 U.S.C. § 7903
• Special/unusual clothing
• Item must be for the benefit of the Government,
essential to the safe and successful accomplishment
of the work, and not solely for the protection/comfort
of employee
• Must involve hazardous duty
• OSHA Compliance: 29 U.S.C. § 668
20
Not Exceptions!
• Raincoats and umbrellas
for employees who must
frequently go out into the
rain
• Running shoes for
couriers
• Cold weather/foul
weather gear
21
the “strolling through the mall” test
Clothing items that
are specifically
required safety
equipment under
NAVOSH Instructions
Jackets with cool
Command Logos given
to all employees to
increase esprit d’ corps
Foul weather gear
and work overalls
demanded by the
local Labor Union
“Organizational
Clothing”
“GOOD”
“BAD”
“MAYBE”
Astronaut's Suit
Grateful Dead®
T-Shirts
22
Other Personal Expenses
•
Questions to ask:
– Is there a reasonable relationship
between the proposed expenditure
and the purpose for which the funds
were appropriated?
– What is the benefit to the agency?
– What is the benefit to the individual?
– Is there a more cost effective way to
achieve the agency mission or
program goals?
•
Examples:
–
–
–
–
Registered traveler programs
Health promotion items
Recruiting items
Gifts and other giveaway items
23
The Ever Popular Trinkets
• Legitimate only:
– As part of an approved Awards program
– Items of no intrinsic value designed solely to assist in
achieving internal agency management objectives
– In rare cases, ok where there is a direct connection between
the expenditure and the execution of the agency’s mission;
benefit to the government must outweigh the personal
nature of the item
• (Rule of thumb: with the exception of a legitimate award, if it’s
something actually you’d want, you can’t have it.)
24
Giveaway Items Held Proper
•
Caps and other items
distributed to a local residents
in furtherance of threatened
eider conservation plan – US
Fish and Wildlife Service, B318386, 12 August 2009
•
Gift cards for respondents to
the Converter Box Coupon
Program Survey - National
Telecommunications and
Information Administration, B310981, 25 Jan 2008
•
Lava rocks distributed by
National Park Service at Capulin
Mountain National Monument,
B-193769, 24 Jan 1979
25
Examples of Improper Giveaway Items
•
T-shirts with the CFC logo given
to employees who contributed a
certain amount
•
Ice scrapers imprinted with the
logo “Don’t Drink and Drive”
•
Novelty plastic garbage cans
containing candy in the shape
of solid waste, given by EPA to
attendees at an exposition
•
Decorative ashtrays given to
conference attendees
26
Commander’s Coins
Three sources of funding
- O&M – for awards pursuant to a properly established awards
program; or pursuant to 10 USC § 2261 authority for
recognition items
- ORF – IAW SECNAVINST 7042.7K (for the Navy) or other
relevant Instruction
- OWN – for all others
Caveats
- Be wary of bona fide need
- Personalization increases risk of obsolete stock upon
departure
27
Recognition Items for Recruitment/Retention
10 USC 2261
• Allows appropriated funds to be used to procure items of
nominal or modest value for recruitment/retention
– to members of the armed forces, their families, and
other individuals recognized as providing support that
substantially facilitates service in the armed forces
– “nominal or modest value” defined as a commemorative
coin, medal, trophy, badge, flag, poster, painting, or
similar item valued less than $50
• B-307892, October 11, 2006
• OASN(FM&C) memos dated November 9, 2006 and
December 14, 2006
28
Traditional Ceremonies
(i.e., Retirement, Change of Command)
– Traditional ceremonies are considered official events
– Authorized to use appropriated funds, government
personnel, and other resources
Includes cost of printing/addressing/sending reasonable
number of invitations, as appropriate
Does not include cost of food, beverages, or other
entertainment
– Presentation of award during a traditional ceremony
does not permit use of appropriated funds to purchase
food at follow-on reception or ceremony
29
Commuting Expenses
•
National Indian Gaming
Commission – Reimbursing
Bicyclists as Part of the Agency’s
Transportation Fringe Benefit
Program, B-318325, Aug. 12, 2009
– Agency may use its authority
under 5 USC 7905 to provide a
$20 reimbursement to
employees who commute to
work by bicycle
•
Army – Mass Transit Benefits,
Aberdeen Proving Ground, B316381, July 18, 2008
– A certifying officer does not
have a responsibility to
question the wisdom of a
payment where there is clear
agency policy
30
Use of Government Resources
• B-277678, 4 January
1999
• Joint Ethic
Regulation, DoD
5500.7-R 3-201
31
Social Networking
• Has been embraced by
DoD
• Can be a valuable tool
– information dissemination
– freeing workforce from
answering repetitive
questions
– sharing best practices
– information management
– electronic learning
32
however • Use caution with social
networking, user
generated content, and
wikis
• Do not combine personal
and professional
information.
• When in doubt, talk to
your lawyer!
33
remember . . .
• “What happens in Vegas . . .” stays on
YouTube, Facebook, Twitter
• Ten seconds to post – it’s out there forever
• Most Commands require users to sign
statements regarding permissible use, etc.
• IT Departments can detect spikes in online
use; also can monitor content
• Use Facebook, Twitter, etc. for personal
use on personal time
34
Use of Official Government Vehicles
• 31 USC 1344
• 31 USC 1349 – penalty
for violating 1344 is a
suspension of at least
one month
35
For the Vast Majority of Us . . .
•Official Purpose
•TAD Status
36
Domicile to Duty Transportation
Only as authorized by 31
U.S.C. § 1344, e.g.
Secretaries and Chiefs of
Staff, certain others as
justified by command &
control or security issues
37
Ground Travel and Transportation
Ground Transportation of Spouses
• Spouses may ride in government vehicles to official events
with their sponsors
• Spouses may not ride by themselves in government vehicles to
official events unless
– the sponsor is authorized domicile-to-duty transportation
and
– it is impractical or impossible for the sponsor to accompany
the spouse Duty-to-Duty Transportation
38
Air Travel and Transportation
Funded Travel of Spouses & Family Members
“Rare Exception” authorized only if
• The family member actually participates in an “unquestionably
official” function or capacity, or
•
Such travel is in the best interests of the United States because
of a diplomatic or public relations benefit to the United States
DoDD 4500.56, DoD 4515.13-R
39
Air Travel and Transportation
Unofficial travel of Spouses and Family Members of Senior Official on
MilAir – also a rare exception:
Spouse/family member may accompany General Officer, SES and
equivalents on official business if 1.
2.
3.
4.
Travel is reimbursed at full coach fare
MilAir already scheduled for official trip
Spouse/family member cannot displace official travelers
Larger aircraft not required to accommodate spouse/family
member travel
40