Fiscal Law Deskbook, 2013 - The Library of Congress

Chapter 4:

The Antideficiency

Act

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CHAPTER 4

THE ANTIDEFICIENCY ACT

I. INTRODUCTION..............................................................................................................1

II. REFERENCES...................................................................................................................1

III. BACKGROUND ................................................................................................................2

IV. THE ANTIDEFICIENCY ACT'S FISCAL CONTROLS.............................................4

A. Appropriations ? The First Level.........................................................................................5

B. Apportionment ? The Second Level.. ................................................................................15

C. Administrative Subdivisions ? The Third Level................................................................17

V. P-T-A VIOLATIONS AND THE ANTIDEFICIENCY ACT. ....................................19

A. Purpose...............................................................................................................................19

B. Time ("Bona Fide Needs Rule"). .......................................................................................21

C. Amount ..............................................................................................................................21

D. Additional Issues................................................................................................................23

VI. THE ANTIDEFICIENCY ACT'S LIMITATION ON VOLUNTARY SERVICES.26 A. Prohibition. ........................................................................................................................26

B. Emergency exception ........................................................................................................27

C. Gratuitous services. ...........................................................................................................29

VII. VOLUNTARY CREDITOR RULE. ..............................................................................30

A. Definition. ..........................................................................................................................30

B. Reimbursement ..................................................................................................................30

C. Claims Recovery. ...............................................................................................................30

VIII. PASSENGER CARRIER USE.. .....................................................................................31

A. Prohibition. ........................................................................................................................31

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B. Exceptions..........................................................................................................................31

C. Penalties. ............................................................................................................................32

IX. SANCTIONS FOR ANTIDEFICIENCY ACT VIOLATIONS. .................................32

A. Adverse Personnel Actions. ...............................................................................................32

B. Criminal Penalties..............................................................................................................33

X. REPORTING AND INVESTIGATING VIOLATIONS. ............................................33

A. Reporting Suspected Violations.........................................................................................33

B. Investigations. ....................................................................................................................35

C. Establishing Responsibility................................................................................................37

D. Reporting to the Office Of the Secretary Of Defense.. ......................................................37

XI. CONTRACTOR RECOVERY.......................................................................................39

A. Recovery Under the Contract.............................................................................................39

B. Quasi-Contractual Recovery. .............................................................................................40

XII. CONCLUSION. ...............................................................................................................40

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CHAPTER 4

THE ANTIDEFICIENCY ACT

I. INTRODUCTION

II. REFERENCES

A. 31 U.S.C. ? 1341 (prohibiting obligations or expenditures in excess of appropriations and contracting in advance of an appropriation).

B. 31 U.S.C. ? 1342 (prohibiting government employees from accepting voluntary services).

C. 31 U.S.C. ?? 1511-1517 (requiring apportionment/administrative subdivision of funds and prohibiting obligations or expenditures in excess of apportionment or administrative subdivision of funds).

D. 31 U.S.C. ? 1344 (prohibiting the unofficial use of passenger carriers).

E. OMB Circular A-11, Preparation, Submission, and Execution of the Budget (August 2011) [hereinafter OMB Cir. A-11], available at 1_2011.pdf .

F. DOD Regulation 7000.14-R, Financial Management Regulation, vol. 14 [hereinafter DOD FMR] available at .

G. Defense Finance and Accounting Service - Indianapolis Reg. 37-1, Finance and Accounting Policy Implementation (Jan. 2000 w/ changes through May 2011) [hereinafter DFAS-IN 37-1], available at .

H. Air Force Instruction 65-608, Antideficiency Act Violations (18 Mar 2005) [hereinafter AFI 65-608] available at .

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I. Defense Finance and Accounting Service - Denver, Interim Guidance on Procedures for Administrative Control of Appropriations and Funds Made Available to the Department of the Air Force (Sep. 1999) [hereinafter AF Procedures for Administrative Control of Appropriations] available at .

J. Department of Navy, NAVSO P-1000, Financial Management Policy Manual (Dec. 2002) [hereinafter DON FMPM], available at .

K. Principles of Federal Appropriations Law, U.S. Government Accountability Office, Volume II, Third Edition, Chapter 6, (March 2011) [hereinafter Red Book], available at .

L. Hopkins and Nutt, The Anti-Deficiency Act (Revised Statute 3679) and Funding Federal Contracts: An Analysis, 80 Mil. L. Rev. 51 (1978).

III. BACKGROUND

A. History

1. The original Anti-Deficiency Act (ADA) was enacted in 1870 (16 Stat. 251) for the purpose of preventing the federal government from making expenditures in excess of the amounts that Congress appropriated. See Red Book, 6-34 to 6-35.

2. The ADA was amended in 1905 (33 Stat. 1257) and in 1906 (34 Stat. 48) for the purpose of preventing expenditures in excess of apportionments (divisions within an appropriation). These amendments required that certain appropriations be apportioned over a fiscal year to obviate the need for a deficiency appropriation. Originally, the authority to make, waive, or modify apportionments was the head of the agency. Today, that authority rests with the Office of Management and Budget (for executive branch apportionments). See Red Book, 6-35. See E.O. 6166 (June 10, 1933).

3. The ADA was amended again in 1951 (64 Stat. 765), in 1956 (70 Stat. 783), and in 1957 (71 Stat. 44) for the purpose of strengthening the apportionment procedures and the agency control procedures. See Red Book, 6-35 to 6-36.

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B. Summary of ADA Prohibitions

1. In its current form, the ADA states that an "officer or employee of the U.S. government" may not:

a. "Make or authorize an expenditure or obligation exceeding an amount available in an appropriation," unless authorized by law (emphasis added). See 31 U.S.C. ? 1341(a)(1)(A);

b. "Involve" the government "in any contract or other obligation for the payment of money before an appropriation is made," unless authorized by law (emphasis added). See 31 U.S.C. ? 1341(a)(1)(B);

c. "Make or authorize an expenditure or obligation exceeding an (1) apportionment or (2) the amount permitted by regulations prescribed under section 1514(a) of this title" [i.e., a formal subdivision] (emphasis added). See 31 U.S.C. ? 1517(a); or

d. "Accept voluntary services [for the United States] or employ personal services. . .except for emergencies involving the safety of human life or the protection of property," or unless authorized by law (emphasis added). See 31 U.S.C. ? 1342.

2. The ADA imposes prohibitions (or fiscal controls) at three levels: (1) at the appropriations level, (2) at the apportionment level, and (3) at the formal subdivision level. The fiscal controls at the appropriations level are derived from 31 U.S.C. ? 1341(a)(1)(A) and (B). The fiscal controls at the apportionment level and at the formal subdivision level are derived from 31 U.S.C. ? 1517(a). Thus, if an officer or employee of the United States violates the prohibitions (or fiscal controls) at any of these three levels, he/she thereby violates the ADA.

3. The Comptroller General summarized the intent and effect of the ADA in an often-quoted 1962 decision.

These statutes evidence a plain intent on the part of the Congress to prohibit executive officers, unless otherwise authorized by law, from making contracts involving the Government in obligations for

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expenditure or liabilities beyond those contemplated and authorized for the period of availability of and within the amount of the appropriations under which they are made; to keep all the departments of the Government, in the matter of incurring obligations for expenditures, within the limits and purposes of appropriations annually provided for conducting their lawful functions, and to prohibit any officer or employee of the Government from involving the Government in any contract or other obligation for the payment of money for any purpose, in advance of appropriations made for such purpose; and to restrict the use of annual appropriations to expenditures required for the service of the particular fiscal year for which they are made (emphasis added).

To the Secretary of the Air Force, B-144641, 42 Comp.

Gen. 272 (1962).

4. To whom does the ADA apply?

a. The ADA applies to "any officer or employee of the United States Government" and thus, it applies to all branches of the federal government--executive, legislative, and judicial. Nevertheless, whether a federal judge is an "officer or employee" of the U.S. Government remains an open question, in some cases. See Red Book, 6-39.

b. By the plain wording of the statute, 31 U.S.C. ? 1341 specifically applies to any officer or employee who makes or authorizes an expenditure or obligation. Additionally, DOD applies the ADA by regulation to "commanding officers, budget officers, or fiscal officers. . .because of their overall responsibility or position." See DOD FMR, Vol 14, Ch 5, para. 050301.

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