CDFM-A Module 4 flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Bona fide needs rule

Funds may be obligated only for a legitimate need arising in the period of availability; advance funding of future-year requirements is prohibited without statutory authority.

Apportionment

OMB's distribution of appropriated funds by quarter or activity via SF 132; agencies may not obligate faster than apportioned without reapportionment.

Allotment

An agency head's subdivision of an apportionment to operating units, authorizing them to incur obligations within the amount allotted.

Anti-Deficiency Act

31 U.S.C. 1341 prohibits obligating before an appropriation or exceeding apportionment; violations require reporting to the President and Congress.

Continuing resolution

Temporary appropriations act funding activities at prior-year rates or lower of chamber marks, generally barring new starts, until a full-year act passes.

Period of availability

The time during which an appropriation may be obligated, typically one fiscal year for annual funds, followed by an expired phase for adjustments only.

Purpose statute

31 U.S.C. 1301(a) restricts appropriations to the objects and purposes Congress specified; the necessary expense doctrine guides interpretation.

Commitment

An administrative reservation of funds before a binding agreement is executed; it precedes obligation and does not itself create a legal liability.

Obligation

A binding agreement such as a contract, order, or grant that legally commits the government to pay; it precedes the actual cash outlay.

Expired phase

The five-year period after an appropriation's obligation period ends, during which only upward adjustments to existing obligations are permitted.

M account

A Treasury account holding expired funds; after five years, unobligated balances are cancelled and returned to Treasury.

Unauthorized commitment

An agreement made by a person without authority to obligate the government; ratification requires legal review, funds availability, and authorized approval.

USSGL

The Treasury's standard general ledger providing account definitions for proprietary and budgetary accounting, ensuring consistent federal financial reporting.

Statement of Net Cost

A required financial statement reporting gross program cost less earned revenue, with intragovernmental and public costs displayed separately.

Statement of Budgetary Resources

A required statement showing budgetary authority, obligations, and outlays, reconciled to net cost through accrual-to-cash adjustments.

Fund balance with Treasury

The aggregate of an agency's budgetary resources held at Treasury; it is reconciled with Treasury records as a key internal control.

SFFAS

Statements of Federal Financial Accounting Standards issued by FASAB, forming the primary layer of the federal accounting standards hierarchy.

Accrual accounting

Recognizes expenses when incurred and revenue when earned, regardless of cash timing, producing payables and accrued liabilities.

Firm-fixed-price contract

A contract type placing cost risk on the contractor; the government pays a set price regardless of actual costs, used when requirements are well defined.

Progress payments

Financing payments based on costs incurred, typically 80 percent for large business and 90 percent for small business, made before acceptance.

Performance-based payments

Contract financing tied to defined events or milestones rather than costs incurred, negotiated in the contract and not exceeding a stated percentage of price.

Limitation of funds clause

Requires the contractor to notify the government before incurring costs beyond the funded amount; the government is not obligated beyond funds allotted.

Termination for convenience

Government termination not caused by contractor fault; the contractor recovers costs incurred plus profit on work done, with no excess reprocurement costs.

Prompt Payment Act

Requires payment within 30 days of receipt of a proper invoice and accrues interest penalties on late payments.

Green Book

GAO standards for internal control in the federal government, defining five components and seventeen principles for control systems.

Material weakness

A deficiency, or combination of deficiencies, creating a reasonable possibility that a material misstatement will not be prevented or detected timely.

Segregation of duties

Separating authorization, custody, recording, and reconciliation functions so no single person controls a transaction end to end.

OMB Circular A-123

Requires agencies to assess and report on internal control over financial reporting and maintain an ongoing internal control program.

Corrective action plan

A documented plan addressing an audit finding with milestones, owners, and validation testing required before the finding is closed.

Life-cycle cost

Total cost of acquisition, operations and support, and disposal; O&S typically dominates for long-lived systems.

Cost estimating relationship

A statistical relationship between cost and one or more independent variables, such as cost per square foot or per flight hour.

Net present value

The sum of discounted future cash flows; accept alternatives with positive NPV and choose the highest among mutually exclusive options.