Transcript Presentation Title 25 January 2006
Jeanna L. Pryor, Col, USAF Director, Defense Financial Management and Comptroller School 9 November 2012 1
Anti-Deficiency Act
History
U.S. Codes
Prohibitions Penalities Provisions
Purpose, Time, and Amount Analysis
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Violation Process
Suspicions
Investigating Reporting
Examples of ADA cases
Prevention
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Congressional “Power of the Purse” Agencies routinely overspent ADA is the greatest power that Congress has over the Executive Branch Series of acts started in 1870 Additional provisions made in 1905, 1906, 1951 and 1956 Copyright 2012 Arnold Federal Consulting
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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.
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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, 31 U.S.C.
§
unless otherwise allowed by law.
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.
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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
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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)
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Criminal Penalties “ Knowing or willful” violations are felonies Fine <$5,000 / Imprisonment 10 Augmentation Receiving funds from a source without statutory authority, then obligating those funds is a violation Extension of Miscellaneous Receipts Statute (31 USC 3302) Purpose Law (31 USC 1301) Supplementation of salary (18 USC 209) Indemnification Unlimited indemnification is an automatic violation ((even when no dollars are involved) Copyright 2012 Arnold Federal Consulting 11 Only use appropriations for the the amount purposes appropriated by Congress for which the appropriation was made; for the time period for which the appropriation is made; and in Obligating 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) 12 Violation of Purpose Law and Bona Fide Need rule May or May Not violate the ADA Correctable Purpose and Time violations that do not result in an Amount problem are considered accounting adjustments Funds were available at the time the obligation occurred and still available to correct the violation Some Purpose and Time violations automatically are ADA violations Copyright 2012 Arnold Federal Consulting 13 United States v. MacCollom, 426 U.S. 317 (1976) ADAs are usually identified During audits (internal to Agency or GAO) Change over of personnel question funding Request for increase funding to existing long term project Launch an inquiry with Agency legal or fiscal policy office for determination Facts indicate an ADA may have occurred; launch a formal investigation 15 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 results Conducts investigation Use inquiry results as a baseline starting point 16 Follow the money and document trail Interview relevant personnel (sworn statements/transcribe) Validate accounting transactions Validate meeting minutes Review appropriations, Congressional testimony and hearings, contracts, etc. Determine Congressional intent Report findings and responsible person 17 Report findings and responsible person Obtain legal review of the report and finds Get concurrence Notify responsible person Get written concurrence or rebuttal Notify Agency Comptroller and supervisor Obtain punishment and/or penalties decision 18 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 19 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 20 21 39 Reports – 26 were DoD 19 of DoD’s 26 were Purpose violations 4 of 19 were unauthorized purchases Remaining 5 of 19 were wrong appropriations 10 of 15 were O&M, R&D, Procurement, DWCF in lieu of MILCON 5 of 15 were O&M and DWCF in lieu of R&D, Procurement or Capital Budget Authority Largest was $1,429,332,309 smallest $0 22 Communication Equipment Bona Fide Need Acquisitions system hardware requirements and increased delivery costs Used FY03 O&M funds vs. FY04 FY04 funds were not available to make an accounting correction Department of the Air Force FY04 $9,077,690 31 USC 1517(a)(2) 23 Contracts crossing multiple fiscal years Severable contracts exceeded twelve month period funding funding with one fiscal year funds Severable contract service begun in subsequent fiscal year Department of Health & Human Svs FY 02-10 $1,429,332,309 31 USC 1341(a) 24 Construction Projects and site prep were divided into multiple discrete projects each below the statutory threshold Each project was funded with OMA dollars Department of the Army FY04 and FY05 $15,449,992.49 and $11,806,993 31 USC 1341(a)(1)(A) 25 Period of Performance Contract to analyze drinking water samples from August 04-06 Funds were legally available FY04 – FY05 Environmental Protection Agency FY04 $193,545 31 USC 1541(a)(1)(B) 26 Augmentation Amounts received from private sector for work performed were collected as reimbursements and then obligated. Department of Navy FY02-10 $561,906, $285,987 & $842,857 (31 USC 1517) 27 28 Internal Controls Include ADA as a focus area during annual reviews Training Appropriation Law classes for both Fiduciary and Pecuniary certifiers and decision makers Read your appropriation act each year Get an interpretation from GAO Get GAO emails with latest decisions Review GAO database for ADA violations Copyright 2012 Arnold Federal Consulting 29 Promptly and accurately record obligations Remind managers about voluntary services Pay attention to Government Purchase Cards purchases Question transactions that are unusual or just don’t look right If you have doubts about a transaction, resist pressure for immediate action Make friends with your agency legal office Copyright 2012 Arnold Federal Consulting 30 31"The established rule is that the expenditure of public funds is proper only when authorized by Congress, NOT that public funds may be expended unless prohibited by Congress."
Questions?