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Current Issues in Fiscal Law. Andrea Brotherton Assistant General Counsel (Financial Management & Comptroller) 703.695.0770 Keith M. Dunn Counsel to the Navy Surgeon General Navy Bureau of Medicine and Surgery 202.762.3299.

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Current Issues in Fiscal Law

Andrea Brotherton

Assistant General Counsel (Financial Management & Comptroller)


Keith M. Dunn

Counsel to the Navy Surgeon General

Navy Bureau of Medicine and Surgery


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Interagency AgreementsB-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.

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Intra-agency Agreements

For stock funded activities that are required sources of supply, if an ordering agency records an obligation for supplies and:

- the requiring agency has a bona fide need for the supplies at the time the order is placed;

- the request for supplies is sufficiently definite for the supplying activity to provide the supplies without further clarification; and

- the request provides a required delivery date

a valid obligation exists and it does not matter when the stock funded activity awards a contract or otherwise provides the supplies to the ordering activity.

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The Antideficiency Act

  • The Office of Legal Counsel has opined a violation of the ADA occurs only if the violation is of a prohibition enacted in the appropriations act from which the funds at issue were obligated. Use of Appropriated Funds to Provide Light Refreshments to Non-Federal Participants at EPA Conferences, OLC Opinion, April 5, 2007.

  • GAO is of the view if an agency violates any of the numerous prohibitions or restrictions on its use of appropriated funds, regardless whether enacted as part of an appropriations act, the agency will have violated the ADA. B-317450, March 23, 2009.

  • Stay tuned for a reconciliation of the two views or, at a minimum, policy guidance from DoD.

  • Don’t hold your breath waiting.

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Funding of Severable Services ContractsSeverable 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 several 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

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Claims SettlementsNational Science Foundation – B-317413, April 24, 2009

  • Settlement of a contract claim represents a new obligation properly chargeable to funds available at the time the settlement is entered into.

  • Under the facts in this case, could have treated the claim as an unauthorized commitment, which would have been payable with funds available for obligation at the time of the unauthorized commitment.

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  • The designation of a part of a lump sum appropriation for a particular purpose

    • Generally, must be in the statute itself to be binding

    • Limitations on legislative history

      • can illuminate

      • cannot provide that which is not there

    • Exception for Dollar Amounts contained in “Explanation of Project Level Adjustments” Tables Published in C.R. “Explanatory Statement” for FY 09 Approp. Act.

      DoD memo dtd 10 Feb 2006

      OMB memo dtd 15 Feb 2007

      Executive Order, Protecting American Taxpayers From Government Spending on Wasteful Earmarks, 29 Jan 2008

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“[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

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The Food Exceptions





Awards Ceremony

Cultural Awareness Ceremony


DoD DGC(Fiscal) memo dtd 1 Sept 05

FMB memo dtd 12 May 06

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U.S. Army Garrison Ansbach, B-317423, March 9, 2009(the obligatory annual food case)

  • 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

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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-310502, 4 Feb 2008

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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

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Examples of Proper Giveaway items

Gift Cards for Respondents to the Converter Box Coupon Program Survey - National Telecommunications and Information Administration, B-310981, 25 Jan 2008

Veterans Benefits Administration – Refreshments for Focus Groups, B-304718, Nov. 9, 2005

Lava Rocks Distributed by National Park Service at Capulin Mountain National Monument, B-193769, Jan. 24, 1979

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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

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Conference Fees

  • 07 NDAA Sec. 1051

    • SECDEF may collect conference fees to offset the cost of a conference

    • Any collections exceeding actual costs deposited as miscellaneous receipts

    • DoD memorandum dated February 12, 2007

      • Preliminary implementation of 10 USC 2262 authority

      • Requires reimbursable authority

      • More specific guidance to follow

    • OASN (FM&C) memorandum dated March 2, 2007

      • Requires written request to FMB-5 for approval

      • Plan for accounting receipts, reporting

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There are exactly six (maybe seven) fiscal law experts in the Navy and you just slept though a presentation by two of them.


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Office of the Assistant General Counsel FM&C(703) 695-0770

Andrea Brotherton, AGC

Helen Rosen, Deputy AGC

Rob Taylor, Associate Counsel

Doug Edgecomb, Associate Counsel

Sabrina Hay, Associate Counsel