Appropriations Law and Fiscal Law
Appropriations Law and Fiscal Law tests the three questions every obligating action must answer, purpose, time, and amount, and the statutes that enforce them. Article I, Section 9 of the Constitution bars drawing money from the Treasury except under an appropriation.
Purpose
31 U.S.C. 1301(a) limits an appropriation to the objects for which it was made. The necessary expense doctrine asks whether the expense (1) bears a logical relationship to the appropriation's purpose, (2) is not prohibited by law, and (3) is not funded by a more specific appropriation. The expense/investment threshold in 10 U.S.C. 2245 and the DoD FMR separates O&M-funded items from procurement-funded investment items. Augmentation is barred: the Miscellaneous Receipts Act (31 U.S.C. 3302(b)) sends collections to Treasury unless a statute permits crediting to the appropriation, as with refunds of erroneous payments. Gifts require acceptance authority such as 10 U.S.C. 2601.
Time
The bona fide needs rule confines an appropriation to needs arising in its period of availability. Recognized exceptions include the lead-time exception (a continuing need whose production lead time exceeds the period of availability), stock-level and pipeline requirements, and severable services under 10 U.S.C. 3133, which allows a contract beginning in the fiscal year to run up to twelve months into the next.
Amount
The Antideficiency Act (31 U.S.C. 1341, 1342, 1349, 1350) prohibits obligating or expending in excess of or before an appropriation and bars accepting voluntary services except in emergencies involving the safety of human life or protection of property. Sections 1517 and 1519 cover apportionment and allotment. Violations are investigated and reported to the President, Congress, and GAO. The Impoundment Control Act (2 U.S.C. 681-688) governs deferrals and rescissions: a rescission proposal gives Congress 45 days of expedited review and funds remain available for obligation during that period; deferrals may not be proposed for policy reasons.
Worked example
An O&M activity signs a janitorial contract in July of FY 1 for performance from 1 August FY 1 through 31 July FY 2. The service is severable, so 10 U.S.C. 3133 permits the cross-fiscal-year obligation for no more than twelve months, and the need genuinely arises in FY 1. If the same contract began 1 October FY 2, it would be charged to FY 2 because no FY 1 need exists.
Traps that cost marks
- Declaring an expense "necessary" without checking a more specific appropriation.
- Assuming any contract may cross fiscal years.
- Assuming a lapse in appropriations halts every obligation; excepted safety-of-life and property activities continue.
- Confusing a deferral with a rescission.