CHAPTER 2 ADMINISTRATIVE CONTROL OF FUNDS

CHAPTER 2

ADMINISTRATIVE CONTROL OF FUNDS

1. INTRODUCTION.

a. Background/Authority. Title 31, section 1514, of the United States Code (31 U.S.C. 1514), Administrative Division of Apportionments, requires the Secretary of Energy to prescribe and carry out a system for administratively controlling funds. In compliance with this requirement, this chapter establishes the policy and general procedures for administrative control of funds within Department of Energy (DOE), and specifies the penalties that apply to persons who violate these procedures. Additional information regarding DOE's internal control requirements can be found in DOE O 413.1A, Management Control Program.

b. Applicability. This chapter is applicable to all Departmental elements, includ ing the National Nuclear Security Administration, and applies to all appropriated funds, revolving funds, trust funds, and any other funds subject to fiscal limitations. All exemptions from administrative control of funds functions are subject to the prio r approval of the Director of the Office of Management and Budget (OMB). DOE fund control policies and procedures shall be in effect only to the extent approved by OMB. This chapter does not apply to DOE's contractors.

c. Policy (Objectives). Program and budget officials shall perform administrative funds control by planning, programming, and using integrated budget and accounting systems to preclude violations of the Anti-Deficiency Act. If deemed appropriate, an office may use local systems to complement and enhance the control, recording, and reporting of accounting and budgetary activities and status of the budget. The administrative control of funds shall satisfy the requirements set forth in OMB Circular A-11, Preparation, Submission, and Execution of the Budget. At a minimum, the following requirements must be met:

(1) Funds are expended solely for the purposes for which they were appropriated, except as otherwise provided by law;

(2) Funds are certified as available and committed before obligation;

(3) Obligations or expenditures are not authorized or incurred in excess of available funds or in excess of any legal or administrative limitations;

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Paragraph 1c(4)

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(4) Only valid obligations are recorded in the accounting records, and all obligations incurred are recorded accurately and promptly; and

(5) Outstanding obligations are validated annually.

2. BUDGETARY RESOURCES AND DISTRIBUTION.

a. Management of Budgetary Resources.

(1) Appropriations. Appropriations are acts of Congress, signed into law by the President, that provide budget authority and permit a Federal agency to incur obligations and to spend public funds, including authority to obligate and expend offsetting receipts and collections that are provided in appropriations acts and other provisions (OMB Circular A-11).

(2) Apportionments. An apportionment is a plan, approved by OMB, to spend resources provided by law. Apportionment requests are submitted to OMB on Standard Form (SF) 132, Apportionment and Reapportionment Schedule, and funds apportioned are made available to DOE for allotment, obligation, and expenditure. The apportionment process is detailed in DOE M 135.1-1A, Budget Execution, and in OMB Circular A-11.

Under a continuing resolution, OMB issues a bulletin to automatically apportion amounts made available by continuing resolutions that expire before the end of the fiscal year.

(3) Allotments.

(a) On behalf of the Secretary and the Chief Financial Officer (CFO), the Director, Office of Budget, formally distributes and withdraws obligating authority through the use of allotments, suballotments where applicable, and the corresponding approved funding programs (AFP). Allotments and suballotments authorize recipients to incur obligations for a specified amount and purpose, record legal limits on the use of funds, and are made in accordance with OMB Circular A-11. As directed by 31 U.S.C. 1514, allotments will be issued at the highest level that is practical and consistent with effective and efficient management; accordingly, allottees shall not be financed from more than one allotment for each appropriation or fund account. Allotments are the formal mechanism by

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Paragraph 2a(3)(a)

which DOE assigns responsibility (31 USC 1514, the Antideficiency Act) for compliance with DOE administrative control of funds and the Anti-deficiency Act. Suballotments represent a formal subdivision of the total amount reflected on an allotment and, as such, establish separate legal limitations under the Anti-Deficiency Act. Allotments and suballotments, if used, ensure strict compliance with statutory limitations/restrictions (i.e., statutory) congressional items of interest imposed by Congress and OMB, as well as critical administrative limitations imposed by the Department. The Advise of Allotment form identifies the appropriation, the amounts available for obligation for both direct and reimbursable work, and any specific legal limitations or administrative remarks. Applicable suballotments will be identified in the instructio n section on the Advice of Allotment Form; related dollar amounts will be specified either by direct citation on the form, or by explicit reference to a program, project, or activity contained in the associated AFP or other attendant documentation. For a complete description of the DOE allotment and AFP process, see DOE M 135.1-1A.

(b) Appropriation laws are sometimes passed too late to allow the normal administrative lead time necessary to obtain apportionment and warrant documents. If DOE were then to wait for guidance from OMB and the Department of the Treasury (Treasury), request apportionments and warrants, and wait for their receipt, DOE would be forced into a nofunds situation, even though appropriation legislation had been signed into law. When the passage of such legislation clearly shows that Congress intended to cont inue Departmental operations, DOE shall proceed to allot sufficient funds on an interim basis, within the guidance of the law, to permit operations until the necessary apportionments and warrants are obtained, thus avoiding a possible no- funds situation. For information regarding automatic apportionment while under a continuing resolution, see section 2a(2).

b. Types of Budgetary Resources. The Office of Budget allots direct obligational and reimbursable obligational authority.

(1) Direct Obligational Authority. Direct obligational authority consists of new budgetary authority, unobligated balances, recoveries of prior- year obligations, appropriation refunds, and restorations. Direct obligational authority allotments are legal

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Paragraph 2b(1)

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funding limitations. If the direct obligational allotments are either exceeded or used for a purpose other than that intended by Congress, a legal violation may occur.

(a) New Budgetary Authority.

1. DOE receives its primary source of direct new budget authority and obligational authority through appropriations. An appropriation act specifies the amount of obligations that can be incurred and the period of obligational availability. The three most common periods are:

a. Annual Authority ? authority that is available for new obligations for only one specific fiscal year or less.

b. Multi-Year Authority ? authority that is available for new obligations for two or more fiscal years.

c. No-Year Authority- authority that is available for new obligations for an indefinite period of time, usually until the objectives for which the authority was made available are attained.

2. Contract Authority. Contract authority is specific statutory authorization to enter into contracts or other obligations in advance of appropriations. Contract authority requires a subsequent appropriation or the collection of revenues to liquidate (pay) the obligations incurred.

3. Borrowing Authority. Borrowing authority is statutory authority to permit obligations to be incurred and to make payments for specified purposes out of borrowed funds. Normally, subsequent appropriations are sought, or revenues earned, to repay the amounts borrowed.

(b) Unobligated Balances. Unobligated balances from unexpired accounts carried forward to the new fiscal year must be reapportioned by OMB, and reallotted by the CFO before unobligated balances can become available for obligation.

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Paragraph 2b(1)(c)

(c) Recoveries of Prior-Year Obligations. Canceling or downward-adjusting contract amounts may make obligation authority available. Prior-year recoveries are available for use only to the extent that amounts are reapportioned, approved for release by the Director of the Office of Budget, and reallotted.

(d) Expired Accounts. Expired accounts are appropriation or fund accounts in which the balances are no longer available for incurring new obligations. In certain circumstances, these accounts are available for recording, adjusting, and liquidating obligations. For further discussion of the types of expired accounts, the limitations placed on them, and the restoration of unobligated balances, see OMB Circular A11, section 20.4. Also, see paragraph 6 below for funding controls for expired and closed time limited appropriations.

(e) Donated Funds. Any acceptance or use of donated funds requires statutory authority.

(2) Reimbursable Obligational Authority provides DOE authority to perform work or services for a Federal or non-Federal customer. Before an obligation is incurred, there must be a budgetary resource and reimbursable obligation authority provided by an allotment. The reimbursable agreement/order placed and the cash advance provides the actual budgetary resources. OMB places limits on the amount of reimbursable work that DOE can perform in a fiscal year. These limits are explained below.

(a) OMB apportions reimbursable obligational authority, which is subsequently allotted by DOE. Reimbursable obligation authority allotments reflect the amounts of reimbursable work that can be performed for non-Federal entities and for other Federal agencies. Exceeding the reimbursable obligational authority constitutes an administrative violation, as opposed to a legal violation. However, exceeding the reimbursable obligation authority may lead to a legal violation if the total allotment is exceeded. To obligate funds to perform reimbursable work, both an allotment providing reimbursable authority and a budgetary resource are necessary. Reimbursable budgetary resources arise from the following:

1. Reimbursable agreements received from other Federal Government accounts represent valid

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