1 jeanna l. pryor, col, usaf director, defense financial management and comptroller school 9...

Anti-deficiency Act

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Jeanna L. Pryor, Col, USAFDirector, Defense Financial Management and Comptroller School9 November 2012

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Defense Financial Management & Comptroller School

Overview

Anti-Deficiency Act History U.S. CodesProhibitionsPenalitiesProvisions

Purpose, Time, and Amount Analysis

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Overview (continued)

Violation ProcessSuspicionsInvestigatingReporting

Examples of ADA casesPrevention


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Congressional “Power of the Purse”Agencies routinely overspentADA is the greatest power that Congress has

over the Executive BranchSeries of acts started in 1870

Additional provisions made in 1905, 1906, 1951 and 1956

Copyright 2012 Arnold Federal Consulting

History

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The Anti-deficiency Act prohibits federal employees from 31 U.S.C. § 1341(a)(1)(A): Making or

authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law.

31 U.S.C. § 1517(a): Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations.

U.S. Codes

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31 U.S.C. § 1341(a)(1)(B): Involving the government in any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed by law.

31 U.S.C. § 1342: Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property..

Federal employees who violate the Anti-deficiency Act are subject to two types of sanctions: administrative and penal. Employees may be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office. In addition, employees may also be subject to fines, imprisonment, or both.

U.S. Codes (continued)

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Prohibits federal employees from…

Making obligations or expenditures in excess of the amount available in the appropriation/fund unless authorized by law.

Making obligations or expenditures in excess of the amount available in the apportionment or reapportionment, or in excess of the amount permitted by agency regulations

Prohibitions

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Any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed by law

Accepting voluntary services or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property (31 U.S.C. & 1342)

Prohibitions (continued)

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Penalties

Criminal Penalties“Knowing or willful” violations are feloniesFine <$5,000 / Imprisonment <two years, or both

Civil PenaltiesAdministrative disciplineSuspension without pay or removal from office

Most cases go unpunished or administrative action only

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AugmentationReceiving funds from a source without statutory

authority, then obligating those funds is a violation

Extension ofMiscellaneous Receipts Statute (31 USC 3302)Purpose Law (31 USC 1301)Supplementation of salary (18 USC 209)

IndemnificationUnlimited indemnification is an automatic

violation ((even when no dollars are involved)


Provisions

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Purpose, Time, and Amount(PTA) Analysis

Only use appropriations for the purposes for which the appropriation was made; for the time period for which the appropriation is made; and in the amount appropriated by CongressObligating funds for a purpose other than for which

funds were appropriated is the most common ADA violation

Most cases involve using the wrong “color” of money (O&M vs. procurement)

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Violation of Purpose Law and Bona Fide Need ruleMay or May Not violate the ADACorrectable Purpose and Time violations

that do not result in an Amount problem are considered accounting adjustmentsFunds were available at the time the

obligation occurred and still available to correct the violation

Some Purpose and Time violations automatically are ADA violations


Relationship to Purpose and Time


A FISCAL "PHILOSOPHY"THE SUPREME COURT

"The established rule is that theexpenditure of public funds is properonly when authorized by Congress,NOT that public funds may be expended

unless prohibited by Congress."

United States v. MacCollom,426 U.S. 317 (1976)


ADAs are usually identifiedDuring audits (internal to Agency or GAO)Change over of personnel question fundingRequest for increase funding to existing long-

term projectLaunch an inquiry with Agency legal or fiscal

policy office for determinationFacts indicate an ADA may have occurred;

launch a formal investigation

Violation Process Suspension

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Agency Comptroller notified/briefed on inquiry findings

Comptroller appoint by letter an Investigating Officer (IO) and timeframe to complete investigation

Investigating Officer compete IO training or certify training has been previously completed

Reviews inquiry resultsConducts investigation

Use inquiry results as a baseline starting point

Violation ProcessInvestigation

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Follow the money and document trailInterview relevant personnel (sworn

statements/transcribe)Validate accounting transactionsValidate meeting minutesReview appropriations, Congressional

testimony and hearings, contracts, etc.Determine Congressional intent

Report findings and responsible person

Violation Process Investigation (continued)

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Report findings and responsible personObtain legal review of the report and finds

Get concurrenceNotify responsible person

Get written concurrence or rebuttalNotify Agency Comptroller and supervisor

Obtain punishment and/or penalties decision

Violation ProcessInvestigation (continued)

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Letter reporting the violation is submitted by the Agency Comptroller to:• President • Congress • The Office of Management & Budget• Comptroller General

Contains all relevant facts and corrective actions taken to preclude future occurrence

Violation ProcessReporting

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Transmittal Letter Title and Treasury symbol (including the fiscal year) of the

appropriation or fund account

Amount involved for each violation,

Date on which the violation occurred.

Name and position of the officer(s) or employee(s) responsible for the violation

Facts pertaining to the violation, to include violation type

Statement of the administrative discipline imposed and any further action(s) taken with respect to the officer(s) or employee(s) involved in the violation

Violation ProcessReporting

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Violation Letter Sample

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39 Reports – 26 were DoD19 of DoD’s 26 were Purpose violations4 of 19 were unauthorized purchasesRemaining 5 of 19 were wrong

appropriations10 of 15 were O&M, R&D, Procurement,

DWCF in lieu of MILCON5 of 15 were O&M and DWCF in lieu of R&D,

Procurement or Capital Budget AuthorityLargest was $1,429,332,309 smallest $0

ADA Cases FY 10 & 11

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Communication Equipment Bona Fide NeedAcquisitions system hardware

requirements and increased delivery costs Used FY03 O&M funds vs. FY04FY04 funds were not available to make

an accounting correctionDepartment of the Air Force

FY04$9,077,69031 USC 1517(a)(2)

Case GAO# 11-04

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Contracts crossing multiple fiscal yearsSeverable contracts exceeded twelve

month period funding funding with one fiscal year funds

Severable contract service begun in subsequent fiscal year

Department of Health & Human SvsFY 02-10$1,429,332,30931 USC 1341(a)

Case GAO# 11-23

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ConstructionProjects and site prep were divided into

multiple discrete projects each below the statutory threshold

Each project was funded with OMA dollars

Department of the ArmyFY04 and FY05$15,449,992.49 and $11,806,99331 USC 1341(a)(1)(A)

Case GAO# 10-07, 10-10

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Period of PerformanceContract to analyze drinking water

samples from August 04-06Funds were legally available FY04 –

FY05Environmental Protection Agency

FY04$193,54531 USC 1541(a)(1)(B)

Case GAO# 10-12

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AugmentationAmounts received from private sector for

work performed were collected as reimbursements and then obligated.

Department of NavyFY02-10$561,906, $285,987 & $842,857(31 USC 1517)

Case GAO # 06-15, 10-13 and 10-14


Preventing Violations

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Internal Controls Include ADA as a focus area during annual reviews

TrainingAppropriation Law classes for both Fiduciary

and Pecuniary certifiers and decision makersRead your appropriation act each yearGet an interpretation from GAOGet GAO emails with latest decisionsReview GAO database for ADA violations


Preventing Violations

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Promptly and accurately record obligationsRemind managers about voluntary servicesPay attention to Government Purchase Cards

purchasesQuestion transactions that are unusual or just

don’t look rightIf you have doubts about a transaction, resist

pressure for immediate actionMake friends with your agency legal office Copyright 2012 Arnold Federal Consulting

Preventing Violations (continued)

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Questions?

1 jeanna l. pryor, col, usaf director, defense financial management and comptroller school 9...

Documents

analysis slide

federal employees

personal services

voluntary services

antideficiency act history

cases of emergency

safety of human life

arnold federal consulting