FedTrain, Inc.
FEDERAL APPROPRIATIONS LAW
2 Day Class
Randy LeGrand
Teacher
0
© 2015 FedTrain, Inc.
Administrative Matters
 Registration Forms FAL2
 Class Hours
 Attendance Policies; CPE Credit
(16)
 Facilities
 Cell Phones, eTablets, etc.
 Evaluations
 Materials; Slides; eCertificate
Busy Slides.
1 of 284
Pre-Course Quiz
Quiz is located in the very back of the Participant Manual
There are 32 questions examining your
knowledge of the course materials covered in the
basic course.
• Disregard questions 6, 7 8, 30, 31 & 32.
 Please don’t spend more than 30 seconds –
on average – per question. Finish in about 15
minutes.
 The answers will be covered in the course
presentation.
2
Pre-Course Quiz
Quiz is located in the very back of the Participant Manual
Begin the Quiz Now.
3
Pre-Course Quiz
Quiz is located in the very back of the Participant Manual
2
Minutes Remain.
4
Pre-Course Quiz
Quiz is located in the very back of the Participant Manual.
 There are 32 questions probing your knowledge of the
course materials covered in the basic course.
Time is up!
 Don’t be concerned about not remembering the
information – it’s been a while…. and things tend to
change.
 Please don’t spend – on average – more than 30
seconds on each question. Try to finish in 15
minutes.
Quiz
 I will cover most of the items in my regular
presentation; the rest covered as follow-ups.
Pre-Course Quiz Answers
(Not in order)
36
e.
5
Case Study
Homework
6
Lesson 1
The Legal Framework
Congressional Action
and the
Administrative Procedures Act
Chapters 1, 2 & 3
The Legal Framework
A federal agency is a creature
of law and can function only to
the extent authorized by law.
The Supreme Court has
expressed what is perhaps the
quintessential axiom of
“appropriations law” as follows:
“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.”(1-3)
8
The Legal Framework
Said another way,
…. as the Supreme Court put it in 1850:
“However much money may be in the Treasury at
any one time, not a dollar of it can be used in the
payment of any thing not… previously sanctioned
[by a congressional appropriation].”
Reeside v. Walker, 52 U.S. (11 How.) 272, 291 (1850).
(1-3)
9
The Legal Framework
These are fundamental Principles of Appropriations Law: (1-3)
Article I, Section 7:
Quiz
2
a.
‘Congress shall … pay the debts and provide for the common
Defense and general Welfare of the United States’ (1-3)
Article I, Section 9, Clause 7:
‘No money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law…..’
No mention of budget responsibilities for anyone.
Quiz 2
10
The Legal Framework
The four cornerstones of Appropriations Law:
An appropriation is available for obligation:
 For a lawful Purpose 31 U.S.C. § 1301(a);
 During the Time period for which the appropriation is
made 31 U.S.C. § 1502(a);
 For which an Amount is on hand 31 U.S.C. § 1341(a); and,
 From which an authorized official creates a specific,
definite, certain and legally binding commitment on the
United States which will result in an immediate or
future Payment from Treasury. 31 U.S.C. § 1501(a).
11
Complying with Congressional Intent – GAO
Government Accountability Office:
(1-4)
The Budget and Accountability Act of 1921:
Title I mandated submission of a President’s Budget Estimate
each year on the first Monday in January.
Title II created the Bureau of the Budget (Now O.M.B.).
Title III Created the GAO. (Author: Red Books)
 Moved functions from Compt. of Treasury in Executive Branch to
Legislative Branch.
 Gave GAO broad authority (31 U.S.C. §§ 3527, 3528 & 3529) to audit
and report on functions of Executive Branch and issue CG Decisions
relating to fiscal matters.
Are CG Decisions Binding?
Quiz
12
Complying with Congressional Intent – GAO: DoJ
Department of Justice
“n1 The Comptroller General is an agent of Congress.
Therefore, although his views often provide helpful
guidance on appropriations matters and related issues,
they do not bind the Executive Branch. See, e.g., Submission of
Aviation Insurance Program Claims to Binding Arbitration, 20 Op. O.L.C. 341,
343 n.3 (1996).”
[31 Op. O.L.C. 1, April 5, 2007]
Research reference: 2007 OLC LEXIS 6; 31
Op. O.L.C. 1
See also, Bowsher v. Synar, U.S. Supreme Court, 1986 [48 U.S. 714, 106 S. Ct.
3181,
92L. Ed. 2d 583 1986 U.S.]
13
Complying with Congressional Intent – GAO: Recap
 Few would dispute the CG’s preeminence in
fiscal law matters.
•
The Courts:
•
Agree with the AG regarding the exclusivity of
executive discretion.
•
But, they also recognize the Power of the
purse and the CG’s role as the Chief
Accounting Officer.
•
Thus, GAO decisions regarding the
accounting/recording of obligations in the
accounts are binding.
14
Chapter 1 – GAO: Binding? Yes & No
Therefore GAO decisions are viewed two ways:
 In his capacity as CG, decisions relating to the recording
of obligations and the legality of making certain payments
are clearly within his role as Chief Accounting Officer of
the USA.
• Bona fide need issues.
• Obligating longevity bonuses; Training contracts, etc.
 Otherwise, decisions that purport to limit Executive Branch
discretion without the benefit of a controlling, specific legal
authority, are not viewed as binding on the Executive
Branch.
• Business Cards; Commercial (bottled) water, etc.
© 2013 FedTrain, Inc.
15
Complying with Congressional Intent – GAO: Practicality
As a practical matter:
 Employees of the Executive Branch should
follow the lead of the Attorney General.
 Most federal agencies have incorporated CG
decisions in their internal regulations, thus
giving full legal effect to the GAO principles.
 When in doubt, refer questions to your OGC or
higher HQ for a legal determination.
 Do not summarily disregard a CG decision.
© 2013 FedTrain, Inc.
16
Transfers and Reprogramming
Concepts and types of Budget Authority
Transfer and Reprogramming:
 Transfer. (1-5)
Congress typically provides general transfer
authority to allow transfer of budget authority from
one appropriation or fund account to another.
DoD FMR, Vol. 2A, ch. 1, Para. 010107.B.58 .
Transfer authority exists in the annual appropriation /
authorization acts as well as in permanent
legislation.
It is illegal to transfer funds between appropriations
without statutory authority.
Quiz
17
Transfers and Reprogramming
Concepts and types of Budget Authority
Transfer and Reprogramming:
 Transfers are typically used for two
purposes:
• Program changes. Adjusting
appropriation balances to achieve
program objectives.
• Overdraft protection. Adjusting
appropriations balances to ‘cure’
potential ADA violations.
18
Transfers and Reprogramming
Concepts and types of Budget Authority
Transfer and Reprogramming:
 Reprogramming. (1-7)
• Reprogramming is the use of “funds in an appropriations
account for purposes other than those contemplated at
the time of appropriation.”
• Specifically, when an agency reprograms funds, it is
moving funds within an appropriation (i.e. from one
“budget activity” to another “budget activity”).
• Frequently—although not always—reprogramming
requires notice to, or approval by, the appropriate
Congressional subcommittees. DOD FMR, Vol. 2A, ch. 1, Para.
010107.B.51 .
19
Transfers and Reprogramming
Limitations on flexibility: Transfers and Reprogrammings
Congress permits limited Reprogramming of funds. (The movement
of money within an appropriation.)
Specific guidelines are found in General Provisions of annual
appropriations acts. Generally they require Congressional
notification of any reprogramming that:
 Creates or eliminates a PPA (Program, Project or Activity).
 Increases/decreases money amounts for a specified PPA.
 Increases or decreases an unspecified PPA by 10% or
$500k (the lesser).
 Reorganizes offices, PPA.
Quiz
20
Lesson 2
The Antideficiency Act
Duties and Responsibilities of
Obligating and Certifying Officials
Licensed in 1998- 2013 by FedTrain, Inc., Atlanta, GA
Appropriations Availability as to Amount
The two functions of certification are covered in two
different laws:
 Part 1 – Addresses the Responsibilities of the
individual who creates the obligation.
• 31 U.S.C. 1341(a)(1) governs the obligation of
appropriations. (Antideficiency Act).
 Part 2 – Addresses the Liabilities of the individual
who certifies the payment voucher.
• 31 U.S.C. 3528(a) & 10 U.S.C. 2773(a) govern
the liabilities of the payment certifier.
22
Appropriations Availability as to Amount
Antideficiency Act
The Act prohibits: (1-15)

Overobligating an Appropriation or Fund.
31 U.S.C. § 1341(a)(1)(A)
 Obligating in advance of an Appropriation.
31 U.S.C. § 1341(a)(1)(B)
 Overobligating an Apportionment or sub-apportionment.
31 U.S.C. § 1517(a)
 Accepting voluntary services
Except in extreme emergency;
Imminent danger to human life or property.
31 U.S.C. § 1342
23
Appropriations Availability as to Amount
 What is ‘Exhaustion of an Appropriation’? (1-15)
• Depletion of an appropriation account.
• Depletion of a maximum amount.
• Depletion of an amount subject to a
monetary ceiling.
 Once an account has been exhausted:
• Further payments would violate 31 U.S.C.
1341(a).
24
Appropriations Availability as to Amount
The Antideficiency Act also generally prohibits:

Transfers between Appropriations without statutory Authority.
31 U.S.C. § 1502(a). (1-6) (Previously discussed.)
 Augmenting an appropriation with money or appropriations
from outside sources. 31 U.S.C. § 3302(b). (1-16)
 Obligations for purposes not intended for the appropriation.
31 U.S.C. § 1301(a). (1-16)
•
•
Purpose violations may be cured.
If the proper appropriation has remaining balances to accept the
transfer from the improper account there is no ADA violation.
Normally requires higher HQ approval.
25
Interagency Agreements
 Interagency Agreements.
(1-17)

31 U.S.C. 1532 – Prohibits Transfers between
appropriations without specific statutory authority.

31 U.S.C. 1534 – Permits temporary transfers of
obligation authority to affect inter/intra agency
acquisitions; provided the accounts of both entities are
reconciled as of the end of the accounting period of the
appropriations.

31 U.S.C. 1535 – Economy Act requires that such
agreements be more economical or convenient than
through commercial sources. Requires deobligation of
unused balances.
26
Interagency Agreements
Principle of law:
When an agency acts as a provider of goods
and/or services for another under a
reimbursable agreement, the customer must be
billed a reasonable amount for the actual goods
or services received. (31 U.S.C. 1535(b), Economy Act)
27
Appropriations Availability
 Purpose Violations? (1-16)
• Not every purpose violation violates
the Antideficiency Act.
• Violations may be ‘cured’
• If the proper account is still available to
accept the adjustment of accounts,
“there is no ADA violation”.
28
Accountable Officials
If a higher level official directed, knew of or
was otherwise in a position to prevent the
illegal actions, can the official avoid ADA
consequences? (1-18)
 31 U.S.C. 1514 requires agencies to
have processes that:
• Establish controls to prevent ADA
violations.
• Fix responsibility for offenses.
• Hopkins and Nutt.
29
Accountable Officials
Accountable Officials: Responsibility
Determining which official is Responsible for a violation: (6-137..138)
 Hopkins and Nutt: Look first to the party who created the
obligation.
• The appointed fund certifying officer is preliminarily
accountable.
• But, others may be at fault: Approving officer;
contracting officer, department managers, executives.
 The individual who will be held responsible for a violation of
the Act, specifically or generally, will be the highest ranking
official who:
• Knew, or
• Should have known that the actions being taken were
• Improper or questionable.
Quiz
30
Lesson 2
Part 2
Certifying Payments
Duties and Responsibilities of
Payment Certifying Officials
Licensed in 1998- 2013 by FedTrain, Inc., Atlanta, GA
Liability and Relief
 Accountability focuses on two areas: (9-4)
 Physical custody
 Certification of payments.
 This course focuses on persons who certify
invoices to a disbursing officer for payment.
 We look first at the subject of Liability and Relief.
(9-5)
 The standard that has evolved is one of strict
liability. (9-7)
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Liability and Relief
Liability does not attach to individuals who are
not accountable officials. (9-7)
 The Guthrie case.
Liability means that someone is found to
be responsible for the loss of money
from Treasury. (9-9)
 Liability arises automatically by virtue
of the loss.
33
Liability and Relief
Relief does not stem from a lack of fault
or negligence. (9-9)
Relief means that a party is found to be
without fault or negligence and the duty
to repay the government for the loss is
waived. (9-10)
34
Certifying Officers
A great many officials make
certifications. (9-13..14)
 But, this does not make them
Certifying Officers.
 Certifying Officers are the officials
who make a certification for a
payment to a disbursing official.
35
Certification Process
Vendor
$
Electronic Funds Transfer
Disbursing Office
Contracting Officer
Representative (COR)
Invoice
Approving Official
Finance Center
36
Certifying Officers
A great many officials make payment certifications.
(9-13..14)
 Payroll certifications. Time Card
Approver is liable.
 GovTrip/DTS voucher certifications:
• Unaudited: The approving official.
• Audited: The auditor who releases for payment.
 Visa GPC: The purchase approving
approval.
37
Certifying Officers
A great many officials make payment certifications.
(9-13..14)
 Contract payments. The person who
certifies payment to Treasury/DFAS
(COR, etc.)
 Grants: The GMO who set up the
automatic withdrawal from Treasury.
 COAGS: The individual who approves
the invoice to Treasury/DFAS for
payment to the outside party.
38
Certifying Officers
 Duties and Liabilities (9-88)
 A Certifying Officer must focus on three
requirements of law (31 U.S.C 3528(a)).
(9-88)
• Facts
• Math
• Legality
 Certifying Officers are liable the moment an
illegal, improper or incorrect payment is made.
39
Relief from Liability
A Certifying Officer may be relieved of
financial liability. (9-95)
The Certifying Officers’ Relief Act (31 U.S.C
3528(b)) has two standards for relief:
 The First Standard:
• Payment was based on official records, and
• Official did not know and by reasonable
diligence and inquiry could not determine the
actual facts;
• Or,
40
Relief from Liability
 A Certifying Officer may be relieved of financial liability. (9-95)
 The Certifying Officers’ Relief Act (31 U.S.C 3528(b) has two
standards for relief:
• The Second Standard:
• Official acted in good faith, and
• Payment not prohibited by statute, and
• USA received value for the payment.
 What is the statute of limitations?
41
The Statute of Limitations
 With respect to the Statute of Limitations (9-125..126)
• After 3 years from the date an account of
an accountable officer is available for audit,
no charge or claim may be raised. Except
for cases of fraud or other criminal activity.
• GAO constructively receives the account
upon the certification of the accounting
officer (usually monthly).
42
Lesson 3
The Availability
of Appropriations:
Time
Licensed in 1998- 2013 by FedTrain, Inc., Atlanta, GA
Appropriations Terminology
Concepts and types of Budget Authority
The “Life of an Appropriation” (1-31)
Disposition of Appropriation Balances
 An appropriation goes through three distinct
stages:
CURRENT
EXPIRED
CLOSED
44
Continuing Appropriations Resolutions
Before the Fiscal Years begins
 Continuing Appropriations Resolution (CRA).
 There are three major rules in a traditional
CRA:
Rate for Operations
No New Starts
Expiration Date
72 days
19.67%
- 0.2108%
Limited
Funding
December 11th
45
Appropriations Availability as to Time
Bona Fide Needs Rule
•
(1-33)
Enacted in 1870:
“The balance of a fixed term
appropriation is available only for the
payment of expenses properly incurred
during the period of availability or to
complete contracts properly made
within that period. ” 31 U.S.C. 1502(a)
Quiz
46
Appropriations Availability as to Time
Future years’ Needs. (1-33)
An appropriation may not be used
for the needs of some time period
subsequent to the expiration of its
period of availability.
47
Appropriations Availability as to Time
Future years’ Needs. (1-33)
“Any discussion of obligating for
future year’s needs……..”
“An appropriation should not be
used for the purchase of an
article not needed …… this
would be a plain violation of the
law.”
48
Appropriations Availability as to Time
Future years’ Needs. (1-33)
But, “.this is only one side of the coin.”
“An appropriation is just as much
available to supply the needs of the last
day of a particular year……”
Funds for the needs of a given FY are
available all 365 days of the year.
49
© 2008-2013 FedTrain, Inc.
Appropriations Availability as to Time
The Continuing Need Corollary. (1-33)
Unmet needs are those that preexisted in one
FY and, unfilled – meaning not ordered or
contracted for, that carry-over to another FY.
The appropriation current at the time the need
is filled – ordered or contracted for - is the one
that is obligated for the need.
Can’t go back and use left-over prior year
appropriations for a carry-over need.
50
Appropriations Availability as to Time
Exceptions to the Bona fide needs rule: (1.34)
Principles of Appropriations Law:
 Appropriations are available only to meet the
legitimate needs of the fiscal year for which they are
made available. (Basic rule page 5-2)
 Appropriations are not available to meet the needs of
some time period subsequent to the period of their
availability. (Page 5-15)
 An agency may not obligate funds when it is apparent
from the outset that there will be no requirement until
the following fiscal year.
51
Appropriations Availability as to Time
Obligating orders for Property. (1-35)
Exceptions:
Procurement Lead Time Exception:
 “However, the timing of delivery, while
obviously a relevant factor, is not conclusive.”
• Need now but must wait for delivery
–Order now; obligate now, receive in the
future; pay upon receipt; charge back to
prior year.
52
Appropriations Availability as to Time
Obligating orders for Property. (1-35)
Exceptions:
Procurement Lead Time Exception:
 “Similarly, an agency may contract in one fiscal year for
delivery in a subsequent year if the material contracted for
will not be obtainable on the open market at the time needed
for use……
• Need in the future but must order now to have in the
future:
– Order now, obligate now, receive in the future;
pay upon receipt; charge back to prior year.
53
Appropriations Availability as to Time
Obligating orders for Property. (1-35)
Exceptions:
 Stock replacement exception:
• Appropriations are available to
acquire quantities of stock not
to exceed one year supply
irrespective of delivery or use.
54
Chapter 5 – Availability as to Time
Obligating orders for Services. (1-36)
Principle of Appropriations Law:
Services are obligated using appropriations in
effect at the time the services are performed
unless the services are non-severable in which
case the services are entirely obligated at the
time the contract is effective.
What is Severability?
55
Appropriations Availability as to Time
Obligating orders for Services
Severability
Relates to the certainty of the
government’s liability under
the contract.
56
Appropriations Availability as to Time
Obligating orders for Services.
 Non-severable (entire) services.
• Services which cannot logically be separated by
performance or fiscal periods; a single undertaking.
• Logical, discernible starting point.
• Successive steps, stages, phases, milestones,
each building upon each other.
• Defined deliverable. Clear conclusion.
• Not limited to 12-month fiscal year performance.
• Such as repairing a piece of equipment; conducting a
study; working on a project.
 Must be funded entirely upon award. Incremental
funding requires statutory authority.
Quiz
57
Appropriations Availability as to Time
Obligating orders for Services
Severable service contracts
• When a severable service contract crosses
fiscal year lines
• And the period of performance is for 12
months or less;
• An agency may obligate the entire
amount of the performance period using
the FY funds at the time the contract is
effective. 10 U.S.C. § 2410a (DoD) or 41
U.S.C. § 3902 (Civ)
Quiz
58
Appropriations Availability as to Time
Other issues: (1-39)
Research contracts.
 May be severable or nonseverable.
Training contracts.
 Most training contracts are non-severable.
 May fully obligate now for training starting in
the following fiscal year if the agency has no
control over scheduling; time intervening is
not excessive.
59
Appropriations Availability as to Time
 Replacement contracts for prior years: (1-41)
• Use prior year funds if terminated for default
provided….
• Three tests must be met:
• Bona fide need must continue to exist;
• Replacement does not exceed scope of the
original contract; and,
• Replacement awarded within a reasonable
time period after termination.
60
Appropriations Availability as to Time
 Replacement contracts for prior years:
(1-41)
 Use prior year funds if Terminated for Convenience
Under Special Circumstance (1-42)
• Erroneous Award
• Non-discretionary termination
• No fault of the government
• No fault of the contractor
61
Appropriations Availability as to Time
Contract modifications requiring upward adjustments
in the price: (1-42)
Non-severable services or supplies and
materials.
If a modification exceeds the general scope of a
contract for property, quantities of materials or
nonseverable services, the modification amounts
to a new obligation and is chargeable to the fiscal
year in which the modification is effective.
62
Chapter 5 – Time
Contract modifications requiring upward adjustments in the price: (5-34)
Severable services.
In the case of a contract for
severable services, a modification for
increased services must be charged to
the fiscal year or years in which the
services are performed.
Old law
63
Chapter 5 – Time
Contract modifications requiring upward adjustments in the price: (5-34)
Severable services.
Footnote 20
Presumably, if an agency using 41 U.S.C 3902 or
10 U.S.C 2410a for DoD, obligates the full
amount of a severable services contract which
crosses fiscal year lines to the first year of the
contract (or period of performance), a
modification calling for increased services under
that contract should be charged to that same
appropriation.
New law
64
Chapter 5 – Time
Contract modifications requiring upward adjustments in the price:
Antecedent Liability. (5-35)
 An upward adjustment required by a
clause in the original contract
(changed Conditions, government
caused delay, etc.)
 Could not be foreseen at the time of
award.
65
Chapter 5 – Time
Contract modifications requiring upward adjustments in the price:
Antecedent Liability.
(1-43)
If, as the result of operation of a contingency clause in
the original contract, a ‘within scope’ modification
increases the price of a prior year funded contract for
property or services and the contracting officer certifies
an antecedent liability exits, the increased obligation is
chargeable to the fiscal year funding the original
contract.
66
Lesson 4
Availability
of Appropriations:
PURPOSE
Licensed in 1998 - 2013 by FedTrain, Inc., Atlanta, GA
Chapter 4 - Purpose
Case Study 11
Participant Manual
68
Case 11
Training or Not? Donuts Relieve Stress, right?
The Regional Director's Conference. Review the facts. (2-38)
•
Combined PO/GPC/ITO/ETO Purchases.
•
Internal 4 day ‘Training Conference’.
•
Conducted locally. Initially 86 planned to attend; mostly
members of the Regional Office; higher HQ; outside support
organizations; many TDY travelers; guest speakers.
•
Initial costs: $84,200.
•
•
Extra 16 attended. Needed the training. (+ $54,600)
•
Snow storm delayed day-4 departure of travelers. (+ $7,068)
•
Paid for refreshments to eliminate break delays. (+$4,284).
Total: 102 attended. + $64,524. Grand total $148,724.
69
Case 11
Training or Not? Donuts Relieve Stress, right?
The Regional Director’s Conference. Review the facts.
An auditor questions:
a. Authority to conduct the conference.
b. Purchase of the refreshments.
c. Collection/disposition of the registration fee.
1.
Has the ADA been violated?
2.
Should the VISA charge have been certified
for payment?
What should happen to the fee collections.
Should the matter be referred to the
Contracting Officer?
3.
4.
70
Appropriations Availability as to Purpose
The Purpose Statute
Appropriations are available only
for the objects for which the
appropriations were made except
as otherwise provided by law.
31 U.S.C. § 1301(a)
(1-49)
Quiz
9
d.
Quiz
71
Appropriations Availability as to Purpose
The Necessary Expense Doctrine. (1-49)
 It is not reasonable to expect that every
item of expenditure would be itemized in
an appropriation act.
 The spending agency has reasonable
discretion in determining how to carryout
the purposes of the appropriation.
72
Appropriations Availability as to Purpose
The Necessary Expense Doctrine:
Three tests must be met. (1-49..50)
1. Logical relationship; direct
contribution.
2. Not prohibited by law.
3. Not otherwise provided for in
another appropriation.
73
Appropriations Availability as to Purpose
The Necessary Expense Doctrine. (1-50)
 Meetings:
 Four statutes address meetings:
• 5 U.S.C. 5946
• 5 U.S.C. 4109
• 5 U.S.C. 4110
• 31 U.S.C. 1345
74
Appropriations Availability as to Purpose
Conferences
75
Appropriations Availability as to Purpose
The Necessary Expense Doctrine.
Conferences (Meeting:
a gathering of two or more parties.)
• Meetings in general are authorized by 5 U.S.C. §
4110. (1-52)
• Include such descriptors as seminar, retreat
symposium, training conference, convention,
workshop, etc.
• President issued two Executive Orders and OMB
issued two Memoranda on the subject.
• The following is a brief chronology.
Quiz
76
Appropriations Availability as to Purpose
Quiz
Memo 2: Promoting Efficient Spending to Support Agency Operations
15
a. & b.
OMB Memo M-12-12, May 11, 2012 (3-11..16)
 Issued following Executive Order 13589, November 9, 2011 and publicity over
the GSA Western Regions Conference in Las Vegas, NV in October 2010.
 Requires:
• Travel cuts from 2010 baseline levels of 30% through 2016.
• Senior departmental level reviews of all planned conferences over $100K.
• Senior departmental level approval of all conferences over $100K.
• Prohibition of expenses over $500K for a single conference. Waivers
permitted if granted by the agency head (Secretary, HHS).
• Annually (starting Jan 2013) publicize on main website all prior year
conferences (starting with FY12) costing more than $100K.
 In the FY 2015 Appns. Act, Congress stipulated that conference approval
requirements in OMB Memo M-12-12 will be carried out with the full force and
effect of law.
Quiz
77
Appropriations Availability as to Purpose
HHS Policy – Promoting Efficient Conference Spending, February 2015
Provides guidance on conference approvals within HHS.(3-18)
 Updates prior guidelines; conference definitions.
 Delegates to OPDIV head approval for all conferences
more than $500k. May not be delegated. Must
designate high-level approval for conferences between
$100k and $500k. Approvals below $100k can be
delegated as the OPDIV head desires.
 HHS StaffDiv delegations are similar but limited
slightly.
 Requires reporting of all conferences over $20k.
Quiz
78
Appropriations Availability as to Purpose
A general comment about Chapter 4:
 Three very broad areas require a careful review of the law.
Buying for others:
 Food.
 Gifts.
 Wearing apparel.
 All three of the above share a common characteristic. They
are: PERSONAL IN NATURE.
 The law is understandably guarded about allowing use of
appropriations for purchases when the primary benefit
accrues to a party or entity other than the US
government.
79
Appropriations Availability as to Purpose
Legal Authorities:
 The property clause in the Constitution.
 Article IV, Sec. 3. Property acquired by the United States
may be disposed of only as authorized by law.
 Title II of the Federal Property and Administrative Services
Act of 1949 codifies in permanent law regulations on
acquisition and disposition of property.
 Property is anything of value (real or personal) that has a
material utility.
 The laws prescribe a variety of ways to dispose of excess and
surplus property.
 The purchase and distribution of promotional (give-away
items) require statutory authority.
Quiz
80
Appropriations Availability as to Purpose
Disposing of property:
 The incentive awards act 5 U.S.C. § 4501-4506
authorizes the presentation of monetary and
non-monetary awards. As such, they are not
gifts.
 OSHA, 29 § U.S.C. 668 and other laws permit
purchase of articles of protective clothing and
equipment. 5 § U.S.C 5901, authorizes the
issuance of uniforms. As such, they are not gifts.
 An employee may be issued tools and
equipment to personally use. They are not gifts,
but property.
81
Appropriations Availability as to Purpose
Disposing of property:
 Military (and certain civilian agency) recruiters are
permitted by various laws to acquire promotional
items for issuance to potential recruits/centers of
influence. They are deemed gifts authorized by
law.
 Appropriations allow Official Reception and
Representation funds to be used to purchase gifts
(mementos) for visiting dignitaries.
 Bottom Line: If something purchased with appropriations
is going to be given to someone personally, first find a
legal authority.
Quiz
82
Appropriations Availability as to Purpose
Entertainment (1-58)
Principle of Appropriations Law:
Appropriated funds are not
available to entertain federal
employees or others without
specific statutory authority.
83
Appropriations Availability as to Purpose
Entertainment
Exceptions:
(1-58)
 Government corporations
 Donated funds; foundations
 Commissions and boards
 Where other statutory authority exists
84
Appropriations Availability as to Purpose
Principle of Appropriations Law:
“Appropriated funds are not available to
pay subsistence or provide free food to
government employees at [within] their
official duty stations unless authorized
statute.”
The auditor thought,
“Oh good grief, what were they thinking? They can’t certify
the food…. unless there is an exception somewhere.”
85
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide
free food to employees at their duty stations. (1-60)
What exceptions may permit payment for food within the
PDS?
a. Extreme emergency, Imminent danger;
b. Protecting human life or property.
86
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to
employees at their duty stations.
Book exceptions:
Attending meetings:
There are two types of meetings:
(1) Executive Branch
(2) All Others
87
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to
employees at their duty stations. Book exceptions:
Attending meetings:
All Others (Non-Executive Branch).
 A meeting hosted by an entity other than
an agency of the Executive Branch of
government.
(Private parties, corporations, state, local and
international government, and other branches of the
federal government)
88
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to
employees at their duty stations. Book exceptions:
Attending meetings
All Others (Non-Executive Branch)
meetings:
What are the rules?
a. Receipt not itemized:
89
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to
employees at their duty stations.
Book exceptions: Attending meetings
All Others (Non-Executive Branch)
meetings:
What are the rules?
a. Receipt not itemized: Pay it.
90
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to
employees at their duty stations.
Book Exceptions
All Others (Non-Executive Branch) meetings:.
What are the rules?
a. Receipt not itemized: Pay it.
b. Receipt itemized:
91
Appropriations Availability as to Purpose
Principle of Appropriations Law:
Appropriated funds may not be used to provide free food to employees at
their duty stations.
Book exceptions: Attending meetings
All Others (Non-Executive Branch) meetings:
What are the rules?
a. Receipt not itemized: Pay it.
b. Receipt itemized: Pay it if
(1) Food was incidental & important; or,
(2) Mandatory to be paid regardless.
92
Appropriations Availability as to Purpose
Book exceptions:
Attending meetings and conferences
Executive Branch sponsored meetings.
There are the two types. What are the rules?
a. Purely internal:
93
Appropriations Availability as to Purpose
Book exceptions:
Attending meetings and conferences
Executive Branch sponsored meetings.
There are the two types. What are the rules?
a. Purely internal: No food.
b. Formal:
94
Appropriations Availability as to Purpose
Book exceptions:
Attending meetings and conferences
Executive Branch sponsored meetings. There
are the two types. What are the rules?
a. Purely internal: No food.
b. Formal: (The NIH Conference)
Question:
Does the Regional Training Conference qualify
as a ‘formal government meeting”?
95
Appropriations Availability as to Purpose
Facts:
NIH planed a formal conference
 Multiple attendees: (federal government,
state and local government, private sector,
international)
 Events: Registration, general sessions,
workshops and break-out sessions, guest
speakers during meals (lunches and
dinners)
96
Appropriations Availability as to Purpose
The NIH Conference:
Registration fee would be charged to cover
the food costs of the conference:
 Refreshments (two per day)
 Meals (lunches and dinners)
97
Appropriations Availability as to Purpose
The NIH Conference:
GAO decided:
 Formal executive branch sponsored
meetings are different than routine day-today meetings because of the structure,
broad topics and variety of attendees.
Therefore,
 Appropriated funds may be used to pay
the costs of a formal conference
98
Appropriations Availability as to Purpose
The NIH Conference:
But, food …..
 Is like any other conference expense.
Budget for it; and,
 Subject to three tests:
• Incidental,
• Important and
• Mandatory
99
Appropriations Availability as to Purpose
Use of Appropriations to Purchase Food at
Formal Government Meetings
B-300826, March 5, 2005
NIH asked GAO if they could use NIH appropriations to pay for food at
a meeting of hundreds of attendees from various walks of life
(government and non-government) at a conference on Parkinson’s
Disease. The meeting would include formal registration, general
sessions, speeches, workshops, and break-out sessions discussing
broad topics of general interest to all attendees.
GAO concluded that such meetings were different from day-to-day
routine, internal meetings of an agency. Thus appropriations could be
used to pay for food if three conditions were present:
(1) Incidental; (2) Important; and (3) Mandatory.
100
Appropriations Availability as to Purpose
Book exceptions:
Attending meetings and conferences:
Review:
 Two types of meetings. Rules vary.
1. Non-Executive Branch sponsored.
2. Executive Branch sponsored.
a. Purely Internal.
b. Formal.
101
Case 11
Training or Not? Donuts Relieve Stress, right?
 Book exceptions:
 Attending meetings and conferences
 What type of meeting was conducted by the
Regional Director?
• Non-Executive Branch, or
• Executive Branch?
102
Case 11
Training or Not? Donuts Relieve Stress, right?
 Book exceptions:
 Attending meetings and conferences
 What type of meeting was conducted by the
Regional Director?
• Executive Branch
 Internal or Formal?
103
Case 11
Training or Not? Donuts Relieve Stress, right?
 Book exceptions:
 Attending meetings and conferences

What type of meeting was conducted by the
Regional Director?
• Executive Branch; Internal.
104
Case 11
Training or Not? Donuts Relieve Stress, right?
 Book exceptions:
 Attending meetings and conferences
 What type of meeting was conducted by the
Regional Director?
• Executive Branch; Internal.
 What is the principle of law?
105
Case 11
Training or Not? Donuts Relieve Stress, right?
 Book exceptions:
 Attending meetings and conferences
• What type of meeting was conducted?
• Executive Branch: Internal.
No food.
But, is there an exception somewhere else?
106
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Awards Ceremonies
What is the principle regarding food at
incentive awards functions? (1-72; 3-38)
Appropriations are available to pay necessary
expenses to publicly recognize employees at an
incentive awards ceremony. 5 U.S.C. 4501; 10 U.S.C.
1124.
Is there any indication that awards were
presented at this seminar?
107
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Awards Ceremonies
What is the principle regarding food at
incentive awards functions?
Appropriations are available to pay necessary
expenses to publicly recognize employees at an
incentive awards ceremony. 5 U.S.C. 4501; 10 U.S.C.
1124.
Is there any indication that awards were
presented at this seminar? No
108
Appropriations Availability as to Purpose
Renting Meeting Space with Food: NRC Meetings (B-281063)
(1-62; 3-29..30)

GAO allows payment of a rental fee for space including food for
meetings within the local commuting area if:
•
Vendor charges a non-negotiable, non-severable fee for
room rental which includes provision of food;
•
Vendor’s standard billing practice;
•
Agency not trying to duck the no-food rules; and,
•
Vendor’s rental fee with food is competitively priced with
other locations. (Food cost did not increase overall price for the
meeting.)
109
Case 11
Training or Not? Donuts Relieve Stress, right?
Case Exceptions:
NRC (Bolger Conference Center).

Can the NRC decision be used as the authority to
pay for the refreshments at the Commander’s
conference?

No, because…. The NRC decision facts depart
from the Commander’s Training Conference in
several ways.

Most importantly, the costs for the refreshments
were not a mandatory component of the room
fee.
110
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Cultural/diversity awareness B-301184, Jan 2004

Principle of Law: (1-63; 3-29)
Appropriations are available to purchase small
food samples as a part of a formal EEO program
on diversity or cultural awareness.

Is there any evidence the conference involved a
formal cultural awareness event?
No
111
Case 11
Training or Not? Donuts Relieve Stress, right?
Case Exceptions:
GSA & GAO on Light Refreshments (B-288266 January 27, 2003) (1-62; 329)
GSA authorized light refreshments at meetings: (5 U.S.C. 5702)
•
Where a majority of the employees attending were in a
travel status.
•
Limited to travelers; not locals.
Were a majority of these attendees in a temporary duty
(subsistence) status?
No.
112
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Government Employees Training Act (3-38)
What is the principle of law regarding food at
training functions?
Appropriations are available to pay necessary
expenses to accomplish an agency training
program. 5 U.S.C. 4109
Does an event become training simply by
calling it ‘training’?
113
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Government Employees Training Act

Training is in two categories: Routine and Formal

Evidence of Formal Training includes:
•
Documented needs; stated objectives.
•
Use of training aids and materials.
•
Clear teacher/student relationship.
•
Means to evaluate the effectiveness of the
training.
•
Recording of completion on training records.
114
Case 11
Training or Not? Donuts Relieve Stress, right?
Other book exceptions:
Government Employees Training Act

What is the principle of law regarding food at
training functions?
•
Appropriations are available to pay expenses
incidental to carry out an agency training
program. 5 U.S.C. 4109.
115
Appropriations Availability as to Purpose
Entertainment - Food Recap (Government-wide)
 Principle: “.. as a general rule, appropriated funds are not available …. to
provide free food to employees [at] within their official duty stations …”
 Exceptions: Where other authority exists:
• Training (5 U.S.C. § 4109)
• Award Ceremonies (5 U.S.C. § 4501–4506)
• Cultural Awareness functions: Small food samples
permitted (B-301184, Jan 2004)
• Light Refreshments (B-288266, January 27, 2003)
• Renting meeting space with food included.
(B-281063).
• Miscellaneous authorities (Safety, gift funds, foundation
donations, reception and representation funds.)
Quiz
116
Appropriations Availability as to Purpose
Entertainment - Food Recap
Principle: “.. as a general rule, appropriated funds are not available …. to
provide free food to employees [at] within their official duty stations …”
 Exceptions: Where other authority exists:
• Training (5 U.S.C. § 4109) (At HHS sponsored Training)
• Award Ceremonies (5 U.S.C. § 4501–4506) (Light refreshments $4 each)
• Cultural Awareness functions: Small food samples
permitted (B-301184, Jan 2004)
• Light Refreshments (B-288266, January 27, 2003)
• Renting meeting space with food included.
(B-281063).
• Miscellaneous authorities (Safety, gift funds, foundation
donations, reception and representation funds.)
117
Appropriations Availability as to Purpose
Unauthorized Commitments
The FAR is the basis for managing Unauthorized Commitments
(FAR - 48 C.F.R. 1.602-3): (2-42)
• Defined as an agreement entered into by an official who
lacked the authority to bind the USA to pay for goods or
services received.
• May be ratified if all 7 criteria are met.
• Ratifying authority is the head of the contracting activity
(agency or bureau head).
• May be delegated no lower than to the head of the
contracting office.
Quiz
118
Case 11
Training or Not? Donuts Relieve Stress, right?
 May the attendee collections fee be used to pay for the
refreshments?
• The audit report reflects collections of $4,284 in
cash/checks are in the Administrative Officer’s safe.
• The AO proposes to use it to pay the venue for the
refreshments concurrent with a matching VISA credit
to the GPCH account.
• Not yet transacted; awaiting the outcome of the audit
report.
 Principle of law:
Monies received outside appropriations must be deposited in
the miscellaneous receipts account of Treasury
31 U.S.C. 3302(b). (1-3)
119
Appropriations Availability as to Purpose
Using Mandatory Sources (GSA, Lighthouse, Gov. Printing, etc.)
Principle of Law: (1-12..13)
When a source for goods or services is
prescribed by law that source must be
used to the exclusion of all others;
unless an exception applies or a waiver
is granted by the required source.
120
Appropriations Availability as to Purpose
Federal Prison Industries (UNICOR) Changes
P.L. 108-447, Consolidated appropriations Act for FY 2005
(3-78)
“None of the funds in this act or any other
act for FY 2005 and thereafter may be used
to purchase an item from the Federal
Prison Industries, Inc. ….. unless the goods
or services are determined to be best
value….” [under the FAR and related laws].
FPI must be given an opportunity to compete.
121
Appropriations Availability as to Purpose
Purchase of Kitchen Appliances
B-302933, Purchase of Kitchen Appliances,
June 25 , 2004
An agency upon moving into a recently constructed federal office wanted to
acquire kitchen appliances, e.g., refrigerators, microwaves, commercial
coffee pots, etc., to be placed in large, centrally located break-room areas.
The agency wanted to promote efficiencies and effectiveness of working
operations, enhance safety and health.
GAO concluded that prior decisions on the subject limited such purchases to
strict circumstances. Now, GAO determined that agencies may, subject to
policies/regulations, permit the purchase of kitchen appliances, such as the
above if a determination is made that the primary benefit of the purchase
accrues to the government and that adequate policies and procedures are in
place to prevent abuse. Prior CG decisions were modified accordingly to
conform.
B-2716601 (1997), B-210443 (1983) and 47 Comp. Gen 657 (1968).
122
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Purchase of Kitchen Supplies
B-327146: Disposable Cups, Plates & Cutlery
(Commerce-DOC), August 6, 2015
In 2009, DOC and NWSEO signed a memorandum of understanding (MOU), which
stated that DOC would provide "disposable cups, plates, and utensils” to employees.
DOC commenced providing the disposable items. But, in 2013 DOC announced that
it could not use appropriated funds for this purpose. The NWSEO objected and the
matter went to arbitration.
GAO said in a 2013 decision (B-326021), that neither the DOC nor the arbitrator's
opinion demonstrated that supplying the disposable items was an essential part of
accomplishing a statutory mission of the agency. GAO concluded that appropriated
funds were therefore not available to pay for the cups, plates, and cutlery. NWSEO
argued GAO lacked authority to rule on these labor matters. GAO disagrees.
GAO cited: U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit)
Navy v. FLRA, 665 F.3d 1339 (D.C. Cir. 2012) and D.C. Circuit, Air Force v. FLRA,
648 F .3d 841 (D.C. Cir. 2011) (union proposal to use appropriated funds to pay for uniform
cleaning was non-negotiable because this purpose was not authorized by law).
123
Appropriations Availability as to Purpose
Commercial (Bottled) Water
B-324781, December 17, 2013
B-310502, February 4, 2008
B-318588, September 29, 2009 (PM: 1-84; 2-50)
Purchase of commercial drinking water is generally prohibited except when
the public source is:
• Unreliable, unsafe or unavailable; or,
• Necessary to stock for emergencies.
Army elements wanted authority to purchase commercial water for issue to
employees who were assigned, on a semi-regular basis, to work in remote or
rough terrain areas. These locations were not within a reasonable proximity
of verifiably safe drinking water.
GAO concluded that when employees are performing duties at locations
where safe public drinking water is not reasonably available, an agency may
incur necessary expenses to acquire commercial drinking water.
See also: B-247871 (1992) and B-147622 (1961); DOD FMR 7000.14, Vol. 10, Chapter 12 for DoD
guidance.
Quiz
124
Appropriations Availability as to Purpose

Personal Expenses: Promotional Items, Gifts and Awards (1-68)

Principle of Appropriations Law:
Absent statutory authority to the contrary,
appropriations are not available to pay for
personal gifts.
General exception:

The purchase of gifts may be authorized when it is
shown to directly further an agency’s mission. Case
law generally relies on a prevailing statutory objective
associated with the purchase. (GAO Red Book 4-157)
© 2015 FedTrain, Inc.
125
Appropriations Availability as to Purpose
Reimbursement to Employee for Contest Registration Fee
B-317894, May 26, 2009 (1-70)
An agency requested a decision from GAO regarding the legality of
reimbursing an employee the costs of a fee paid to enter a contest on
behalf of the agency.
GAO concluded that 5 U.S.C. 5946 prohibits payment of costs
associated with attendance at meetings of a private society or
association. Several CG decisions have extended the scope of the
law to include payment of individual membership and or individual
fees associated with contests. In recent years, however, GAO has
not objected to the reimbursements to employees for the entrance
fees if the contest relates to agency programs or functions, the
agency benefits through the competition and the agency receives any
award associated with the contest.
© 2013 FedTrain, Inc.
126
Appropriations Availability as to Purpose

Incentive Awards (1-72)

Principle of Appropriations Law:
Appropriations are available to provide
cash and non-monetary awards to publicly
recognize exemplary performance,
contributions to efficient operations or
suggestion or invention.
127
Appropriations Availability as to Purpose
Personal Expenses: Gifts: Mementos / Medallions, etc. (1-72..73)
• Presented as non-monetary awards is authorized.
• Presentations to outside dignitaries and others – Requires
specific authority.
• Bought with Official Representation Funds must be used
only for authorized functions.
• Non-appropriated Funds (e.g. donated funds, proceeds from
authorized locally generated income activities) may be used
to purchase promotional items, etc.
• Purchase from personal funds may be permitted. Examine
each instance individually.
© 2013 FedTrain, Inc.
128
Appropriations Availability as to Purpose
 Professional Liability Insurance (1-74)
 Principle of Law:
 The government is a self-insurer and appropriated funds are
not available to pay for insurance for government property.
 Exceptions:
• Loaned Private Property
• Mission essential
 Professional Liability Insurance for:
• Supervisors, Senior Management Officials and Law
Enforcement Personnel
• Reimburse one half of the paid annual premium.
129
Appropriations Availability as to Purpose
Professional Liability Insurance
P.L. 106-58 (1999) (1-74)
According to testimony from various parties before Congress, federal
managers and certain others needed to be reimbursed for portions of their
personal liability insurance premiums. This is due to the increasing
frequency of law suits being brought against them because of actions they
took, or failed to take, in the ordinary lawful conduct of their duties.
In 1999, Congress created an entitlement for certain officials specifying that
appropriations for salaries and expenses would be available to reimburse
them for one-half of the paid annual premium for professional liability
insurance (Errors and Omissions / Malpractice). The officials covered by the act
are:
• Supervisors.
• Senior management officials (policy making functions).
• Law enforcement personnel.
130
Appropriations Availability as to Purpose
Principle of Law: (1-75)
Appropriated funds are not available to
advertise or promote agency programs or
initiatives absent statutory authority.
Appropriated funds are available to inform
the public about agency programs and
opportunities.
Quiz
131
Appropriations Availability as to Purpose
Advertising, Publicity and Propaganda
B-330368, September 30, 2005 (1-76)
A federal agency used a third party contractor to produce
advertisements relating to a federal program without identifying the
federal agency as the source of the funding for the project. The
content included materials which could be construed to violate the
prohibition on lobbying Congress or publicity of a particular agency
program or project.
GAO concluded that the contractor was working under the authority,
and subject to the oversight scrutiny, of a federal agency. Thus the
agency is held accountable for the content of the advertisement. If
the content violated a restriction in an appropriation act or other law,
funds made available for the advertisement would not be available
and thus payments would violate the Antideficiency Act.
132
Appropriations Availability as to Purpose
Personal Expenses: Membership fees. (1-78)
Principle of Law:
Appropriated funds are not available to
purchase individual memberships in private
societies and associations (5 U.S.C. 5946);
unless the membership is in the name of the
agency or, if otherwise authorized by law.
(e.g. the Government Employees Training Act)
(5 U.S.C. 4109)
133
Appropriations Availability as to Purpose
Memberships and Fees Paid to Private Associations
B-305095, December 8, 2005
(1-78)
Quiz
22
a. & c. +
Generally, buying a personal membership in a private society or
association is prohibited by 5 U.S.C. § 5946.
• An agency requested a decision from GAO regarding the legality of
purchasing a membership in a private society or association.
• GAO concluded that several CG decisions have long permitted the
payment of a membership fee when it is necessary to achieve a
training objective (5 U.S.C. § 4109) or when the membership is
purchased in the name of the agency as a necessary expense of
carrying out an agency mission or function (31 U.S.C. § 1301(a)).
• In this instance the membership is in the name of the agency and
therefore appropriated funds are available upon a determination of
necessity.
Quiz
134
Appropriations Availability as to Purpose
 Personal expenses: Licenses and Certifications (1-87)
 Principle of Law:
 Appropriations are available to pay for
professional and other occupational licenses and
certifications.
 5 U.S.C 5757(a) (2004).
 B-302348, August 20, 2004.
Quiz
22
a., b., c.
 GAO has previously authorized nonprofessional license reimbursements.
135
Appropriations Availability as to Purpose
Payments for Professional Certification Expenses
5 U.S.C. §5757(a)
Congress authorized agencies to pay, or
reimburse employees, for necessary
expenses to obtain and/or maintain
professional certifications and licenses.
5 U.S.C. 5757(a)
(1-87)
Covers:
(1) Occupational Licenses and Permits.
(2) Professional Certifications and Licenses.
Quiz
136
Appropriations Availability as to Purpose
Office Furnishings. (Furniture, pictures, flags & potted plants) (1-79)
Principle of Law:
Appropriations are available to decorate public access
offices and other public areas consistent with the functions
conducted therein. Expenses to decorate non-public
access, individual offices and other workspace of employees
is not authorized.
Appropriated funds are not available to furnish offices or
other areas merely to satisfy the personal wants or desires
of an employee or officer.
137
Appropriations Availability as to Purpose
Purchase of Kitchen Supplies
B-327146: Disposable Cups, Plates & Cutlery
(Commerce-DOC) , August 6, 2015
In 2009, DOC and NWSEO signed a memorandum of understanding (MOU), which
stated that DOC would provide "disposable cups, plates, and utensils” to employees.
DOC commenced providing the disposable items. But, in 2013 DOC announced that it
could not use appropriated funds for this purpose. The NWSEO objected and the
matter went to arbitration.
GAO said in a 2013 decision (B-326021), that neither the DOC nor the arbitrator's
opinion demonstrated that supplying the disposable items was an essential part of
accomplishing a statutory mission of the agency. GAO concluded that appropriated
funds were therefore not available to pay for the cups, plates, and cutlery. NWSEO
argued GAO lacked authority to rule on these labor matters. GAO disagrees.
GAO cited: U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit)
Navy v. FLRA, 665 F.3d 1339 (D.C. Cir. 2012) and D.C. Circuit, Air Force v. FLRA, 648
F .3d 841 (D.C. Cir. 2011) (union proposal to use appropriated funds to pay for uniform
cleaning was non-negotiable because this purpose was not authorized by law).
138
Appropriations Availability as to Purpose
Personal expenses: Funeral Attendance.
(2-31..36)
Principle of law
Appropriated funds are not ordinarily available to
pay employee expenses to attend funerals; except
incremental travel expenses may be reimbursed
when a designated official is representing the
agency on official business such as making an
award presentation.
 B-239887, January 25, 1991, Travel Allowances--Attending
Funeral as Agency Representative
139
Appropriations Availability as to Purpose
Personal expenses: Business Cards.
(1-80)
Principle of Law:
Appropriated funds are available to purchase
business cards for officials who need them to
conduct official government business. B-280759, Nov.
5, 1998.
 Many agency regulations (Including GSA CFR
and Government Printing Office) require
agencies to print on laser printers; or, order
from Lighthouse for the Blind or DAPS
(DoD).
140
Appropriations Availability as to Purpose
Health, medical care and treatment. (1-81)
Principle of Law:
Appropriated funds are not available to
treat employees for illnesses and injuries
except as otherwise authorized by law.
Expenditures for health promotion
programs are authorized, such as smoking
cessation, weight management and physical
fitness programs.
141
Appropriations Availability as to Purpose
Health, medical care and treatment.
(1-81)
OPM offers several options, including
reimbursement for individual memberships.
 Need a formal policy before proceeding.
 See B-288013, Dec. 11, 2001 on Health Club
Memberships.
 See OPM Memo, Participant Manual pages 259..61.
142
Appropriations Availability as to Purpose
 Personal Photographs (1-88)
 Principle of law:
Generally, appropriations are not available
to pay for personal photographs.
Exceptions:
• Statutory authority; or the Necessary Expense
Theory (Id cards and badges, passport photos,
etc.; Public awareness, i.e.. EEOC).
143
Appropriations Availability as to Purpose
Wearing apparel. (1-91)
Principle of law:
The employee is expected to
report properly attired for the
position.
144
Appropriations Availability as to Purpose
Wearing apparel. (1-91)
Principle of law: Employees are expected to report properly
attired for the duties of the position to which appointed.
Exceptions:
(Three Broad Categories)
 1. Safety (to protect employees from
occupational / workplace hazards).
 2. Uniforms.
 3. Where authorized specifically or
generally by another law.
145
Appropriations Availability as to Purpose
Wearing apparel. (1-91)
 Principle of law: Employees are expected to report properly
attired for the duties of the position to which appointed.
 Exceptions:
• Safety:
• 5 U.S.C. 7903 - Administrative Expenses Act.
• Items are Unusual;
• Necessary for the safe and successful
accomplishment of work; and
• Engaged in hazardous duties.
146
Appropriations Availability as to Purpose
Wearing apparel.
(1-92)
 Principle of law: Employees are expected to report
properly attired for the duties of the position to which
appointed.
 Exceptions:
• Safety: (1-93)
• 29 U.S.C. 668 - OSHA
• Upon a determination by the agency head (or
safety manager) or as otherwise required by law,
appropriated funds are available to protect
employees against workplace injuries.
147
Appropriations Availability as to Purpose
Wearing Apparel
B-288683, October 3, 2002, USA Corps of Engineers, Rock Island, IL
B-288828, October 2, 2002 USA Corps of Engineers, Vicksburg, MS
In two cases on wearing apparel, GAO determined:
a. Employees must provide their own wearing apparel, even in
inclement weather if that clothing is normally something they are
ordinarily expected to provide for themselves, a union arbitration
ruling notwithstanding.
b. Similarly, an agency may not purchase as government property
for subsequent issue to employees items the employees are ordinarily
expected to provide for themselves.
c. Congress only allows two specific conditions for which
appropriations may be used to provide wearing apparel: Safety /
hazardous conditions; and Uniforms. Therefore, an agency may
not otherwise provide wearing apparel unless they have statutory
authority otherwise.
148
Appropriations Availability as to Purpose
Wearing apparel.
(1-93)
Principle of law: Employees are expected to report properly
attired for the duties of the position to which appointed.
Exceptions:
 Uniforms:
• 5 U.S.C. 5901 - Federal Uniform Statute.
• Appropriated funds are available to pay, or
reimburse, for uniforms when required by law
or regulations to be worn by individuals to
ensure the effective accomplishment of their
duties.
149
Appropriations Availability as to Purpose
Principle of Law: Taxes
 The government is immune from paying
Vendee taxes imposed on the purchaser.
 The government will pay, or reimburse, for
Vendor taxes imposed on the merchant /
provider which are included in the price of
the goods or services acquired.
150
Appropriations Availability as to Purpose
9-1-1 Service charges
As a general proposition, when a taxing authority
imposes a ‘service charge’ without a
commensurate quantum value for the service, the
courts have ruled such charges to be a tax from
which the government is immune.
• Taxed to the telephone company: Vendor
• Taxed to the telephone customer: Vendee
151
Federal Appropriations Law
152
This concludes the ……
Federal Appropriations
Law Course
 Final details:
• Evaluations
• eCompletion
Certificates
• Trash
153
Federal Appropriations Law
154
Chapters 1 & 2 – The Legal Framework
Statutory Construction of Appropriations Acts
B-317450, March 23, 2009
EPA objects to filing an ADA violations letter for refreshments
served to non-federal attendees at an EPA meeting. Justice
Department, Office of Legal Counsel (OLC) ruled that laws, like 31
U.S.C.§1345 which prohibits paying expenses of non-federal
official at meetings, do not rise to an Antideficiency Act violation
because of the wording of 31 U.S.C. § 1341(a)(1)(A)).
GAO disagreed telling OLC their opinion resulted from an overly
narrow, if not incorrect, understanding of the law. GAO cited
Supreme Court and District Court and numerous GAO cases on
the subject. They then reported an ADA violation on behalf of EPA
who continued to maintain the GAO decision was incorrect and
that EPA would rely on the opinion of OLC.
155
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Food for Veterans Benefits Administration Focus Groups
B-304718, November 9, 2005
The VBA has a statutory objective to provide the Secretary of
Veterans Affairs with recommendations on veterans benefits.
They want to purchase snacks and lunches for participants in
focus group sessions.
GAO concluded that where agencies have determined that the
food is necessary to accomplish a statutory objective, GAO has
no objection to the expenditures.
156
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Food for Navy Inspector General Volunteer Focus Groups
B-318499, November 19, 2009
A Navy Inspector General department wants to purchase
refreshments for volunteer focus groups empanelled to provide input
regarding subject matter for the Inspector General’s use in
formulating agency inspection and investigation plans.
GAO concluded that where agencies have determined that the food
is necessary to accomplish a statutory objective, GAO has no
objection to the expenditures. In this instance, the use of the
“volunteer focus group” is merely one of a number of normal, routine
staff functions commonly used to gather information necessary to
carry out administrative and management functions. Since the IG did
not identify a specific statutory objective, the expenditures would not
be authorized.
157
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Refreshments for National Parks Service “Trail Days” Activities
B-310023, April 17, 2008
The National Parks Service plans to buy refreshments for the
general public attending the annual “Trails Days” activities.
GAO concluded that where agencies have determined that the
food is necessary to accomplish a statutory objective, GAO has
no objection to the expenditures. Since in this instance, the
NPS failed to establish a connection between the expenditures
for food at “Trail Days” activities and a statutory objective, the
expenditures would not be authorized.
158
158
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Refreshments for Counter-terrorism Training Exercises
B-317423, March 9, 2009
The Army in Ansbach, Germany plans to buy refreshments for the persons involved
in a general training exercise designed to prepare personnel for a potential terrorist
attack/event. Trainees will include U.S. and foreign national local-hire civilian
employees, military members assigned to the command, non-appropriated fund
employees, contractors and the general public doing business on/with the military
base at the time of the exercise.
GAO concluded that where agencies have determined that the food is necessary to
accomplish a statutory objective, GAO has no objection to the expenditures. In this
instance, since the planned activities are covered under both the civilian and military
training acts, the purchase of the refreshments are authorized under those statutes.
Further, since participation of outsiders in the exercise is necessary to replicate
conditions that would be present under an actual event, GAO said that purchasing
the additional food was allowed.
159
159
CHAPTER 4 - AVAILABILITY AS TO PURPOSE
Gift Cards Presented to Outside Parties
B-310981, January 25 , 2008
An agency responsible for overseeing the USA conversion from Analog to
Digital TV signals wants to conduct a survey of likely
households/businesses that will be subject to the conversion process to
determine what issues may emerge that may unfavorably impact a smooth
transition to digital-only broadcast signals. They want to be able to offer a
modest value gift cards to persons who volunteer to participate in the
survey.
GAO concluded that the law that directed the national transition imposes a
responsibility on the agency to undertake reasonable actions to affect an
acceptable outcome. If the agency has determined that the offering of the
gift cards of nominal value furthers fulfilling a statutory objective, GAO
would have no objection to the purchase and use of the gift cards.
160
160
Appropriations Availability as to Time
No Cost Contracts
B-308968, November 27, 2007 - Using contractors to collect conference fees
Senator Barbara Mikulski (Md.) asked GAO if no-cost contracts violated
federal statutes.
• GAO examined one such contract and concluded that an agency may
enter into a properly structured no-cost contract permitting a contractor
to conduct events planning and execution services in connection with
government conferences without paying the contractor for its services.
• GAO concluded such contracts do not violate the Miscellaneous
Receipts statute, 31 U.S.C. § 3302(b) because the government contract
imposes no requirement for the government to make a payment. The
contractor will be paid from fees collected from attendees and/or other
parties. Consequently, the agency’s appropriation is not augmented by
receipt of these services.
161