RD Instruction 2009-B

Table of Content

Page 1

PART 2009 - BUDGETS

SUBPART B - System of Administrative Control of Apportionments

and Allotments

## TABLE OF CONTENTS

[Sec]{.underline}. [Page]{.underline}

2009.51 General. 1

\(a\) Legal authority. 1

\(b\) Departmental regulations. 1

\(c\) Rural Development policy. 2

2009.52 Definitions. 2

\(a\) Apportionment. 2

\(b\) Allotment. 2

\(c\) Obligations. 2

\(d\) Deferral. 3

\(e\) Rescission. 4

\(f\) Appropriation or fund account. 4

2009.53 Delegation of authority and allotment control. 4

\(a\) Delegation. 4

\(b\) Designee. 4

\(c\) Allotment amount or limitation. 4

\(d\) Subdivision. 4

2009.54 Control and recording obligations. 5

2009.55 Reporting of obligations. 6

2009.56 Review of unliquidated obligations 6

\(a\) Administrative unliquidated obligations 6

\(b\) Loan and grant unliquidated obligations 6

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RD Instruction 2009-B

Table of Content

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[Sec]{.underline}. [Page]{.underline}

2009.57 Reporting rescissions or deferrals. 8

2009.58 Reporting violations of law. 9

\(a\) Responsibility. 9

\(b\) Violations. 9

\(c\) Reports. 10

2009.59 Liability. 10

2009.60 Notification of responsibility. 10

2009.61 - 2009.100 \[Reserved\] 10

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RD Instruction 2009-B

PART 2009 - BUDGETS

Subpart B - System of Administrative Control

of Apportionments and Allotments

§ 2009.51 [General]{.underline}.

This subpart prescribes the laws, policies and procedures for providing
an administrative control over apportionments and allotments.

\(a\) [Legal authority]{.underline}.

\(1\) Section 3679 of the Revised Statutes, as amended, directs the
Secretary of Agriculture to prescribe, by regulation, a system of
administrative control which shall be designed to restrict obligations
or expenditures charged to an appropriation to the amount of
apportionments or reapportionments made for each, and enable the
Secretary to place responsibility for the creation of any obligation or
the making of any expenditure in excess of an apportionment or
reapportionment.

\(2\) The Impoundment Control Act of 1974 (31 U.S.C. 1400-1407)
prescribes guidelines and procedures to be followed when a reserve or
deferral of budget authority is to be established. Any restraint on the
processing of obligations for any reason must be reported by the
President to the Congress as a proposed rescission or deferral.

\(b\) [Departmental regulations]{.underline}. Departmental Regulation
(DR) 2000-1 prescribes the system of administrative control under
apportionments and contains the regulations issued by the Secretary of
Agriculture and approved by the Office of Management and Budget (OMB) in
accordance with the above requirements. The DR places the primary
responsibility with each agency head of the Department for limiting
obligations or expenditures to the lesser of amounts permitted by the
apportionments or allotments from appropriations or actual funds
available to the agency. It also provides that any agency head may
delegate to officials thereof responsibilities in connection with the
allotment of funds within apportionments and the control of obligations
or expenditures under allotments.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DISTRIBUTION: WSAL Administration

Budgets

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RD Instruction 2009-B

§ 2009.51 (Con.)

\(c\) [Rural Development policy]{.underline}. This subpart prescribes
the system of administrative control within Rural Development for
limiting obligations or expenditures to the lesser of amounts permitted
by the apportionments or allotments from appropriations or actual funds
available to Rural Development, and the delegation by the Administrator
of responsibility and authorities in connection with the allotment of
funds within apportionments and the control of obligations or
expenditures under allotments. It is the policy of Rural Development to
accomplish financing of operations at the highest level consistent with
proper supervision and control over obligations.

§ 2009.52 [Definitions]{.underline}.

Definitions in this subpart comply with [OMB Circular No.
A-34]{.underline} as follows:

\(a\) [Apportionment]{.underline}. A distribution made by OMB or by the
United States Department of Agriculture\'s Office of Budget and Program
Analysis of amounts available for obligation in an appropriation or fund
account into amounts available for specified time periods, activities,
functions, projects, objects, or combinations thereof. The amounts so
apportioned limit the obligations that may be incurred.

\(b\) [Allotment]{.underline}. An authorization by the head or other
authorized employee of an agency to incur obligations within a specified
amount pursuant to an appropriation or other statutory authority.
Obligations incurred or expenditures made in excess of such authorized
amounts will constitute a violation of the Antideficiency Act and will
be reportable as provided in §2009.57 of this subpart. Such
administrative devices as \"allowances,\" \"operating budgets,\" \"work
plans,\" \"State distribution,\" etc., when established for purposes
other than the limitation of obligations or expenditures within specific
amounts, shall not be construed as \"allotments.\"

\(c\) [Obligations]{.underline}. Amounts of orders placed, contracts
awarded, services received, and estimated amounts authorized
anticipating the future payment of money. Such amounts will include
payments not preceded by the recording of obligations and will reflect
adjustments of differences between estimated obligations and actual
payments when liquidation is completed. Obligations will be consistent
with the requirements of [Section 1311 (a) of the Supplemental
Appropriation Act of 1955]{.underline} which states in part that:
\"\.... no amount shall be recorded as an obligation of the Government
of the United States unless it is supported by documentary evidence of
\--

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RD Instruction 2009-B

§ 2009.52(c) (Con.)

\(1\) A binding agreement in writing between the parties thereto,
including Government agencies, in a manner and form and for a purpose
authorized by law, executed before the expiration of the period of
availability for obligation of the appropriation or fund concerned for
specific goods to be delivered, real property to be purchased or leased,
or work or services to be performed; or

\(2\) A valid loan agreement, showing the amount of the loan to be made
and the terms of repayment thereof; or

\(3\) An order required by law to be placed with a Government agency; or

\(4\) An order issued pursuant to a law authorizing purchases without
advertising when necessitated by public exigency or for perishable
subsistence supplies or within specific monetary limitations; or

\(5\) A grant or subsidy payable

\(i\) from appropriations made for payment of or contributions toward,
sums required to be paid in specific amounts fixed by law or in accord
in formulae prescribed by law, or

\(ii\) pursuant to agreement authorized by, or plans approved in accord
with and authorized by law; or

\(6\) A liability which may result from pending litigation brought under
authority of law; or

\(7\) Employment or services of persons or expenses of travel in accord
with law, and services performed by public utilities; or

\(8\) Any other legal liability of the United States against an
appropriation or fund legally available therefor.\"

\(d\) [Deferral]{.underline}. Any action or inaction that temporarily
withholds, delays or effectively precludes the obligation or expenditure
of budget authority. Deferrals referred to under §2009.51 of this
subpart comprise amounts reserved for contingencies pursuant to the
Antideficiency Act (31 U.S.C. 665) and amounts withheld through the
apportionment process pursuant to the Impoundment Control Act (31 U.S.C.
1403).

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§ 2009.52 (Con.)

\(e\) [Rescission]{.underline}. Enacted legislation which cancels
previously approved budget authority prior to the time when the
authority would otherwise lapse (i.e., cease to remain available for
obligation). Rescission proposals made by the President must be
transmitted in a special message to the Congress.

\(f\) [Appropriation or fund account]{.underline}. An account provided
to make amounts available for obligation and expenditure. These accounts
may include direct appropriations, revolving funds, trust funds, and
management or working funds, etc.

§ 2009.53 [Delegation of authority and allotment control]{.underline}.

\(a\) [Delegation]{.underline}. The Administrator hereby delegates the
authority for the issuance of allotments within approved apportionments
to the Director, Budget Staff or designee. It will be the responsibility
of the Director, or [designee]{.underline} to determine that total
allotments from appropriations and reimbursements do not exceed approved
apportionments or funds available; and to limit allotments for
reimbursable activities to the amounts of such estimated additional
funds that will probably be realized from reimbursements. The
responsibility for limiting obligations to allotments and to quarterly
or other limitations is delegated to each allotee \[generally the Deputy
Chief Financial Office (DCFO)\] receiving an advice thereof.

\(b\) [Designee]{.underline}. In accordance with paragraph (a) of this
section, Director, Budget Staff, designates the Deputy Director, Budget
Staff and/or the Chief, Budget Planning and Services, authorities for
the issuances of allotments.

\(c\) [Allotment amount or limitation]{.underline}. Each allotment
advice shall indicate the total amount allotted for the year and the
quarterly or other limitations thereunder which shall be within approved
apportionments.

\(d\) [Subdivisions]{.underline}. Administrative subdivisions by objects
of expenditure, activities, projects, functions, or other subdivisions
of funds may be made by the allottee for management needs. Such
subdivisions are made for purposes other than the limitation of
obligations or expenditures within specified amounts and shall not be
considered as allotments from appropriations.

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RD Instruction 2009-B

§ 2009.54 [Control and recording obligations]{.underline}.

The responsibility for control of obligations within allotments and
quarterly or other limitations thereof shall be vested in the allottee
receiving the funds. The methods indicated below shall be followed as a
means of preventing the incurrence of obligations in excess of
allotments:

\(a\) The official accounting records of Rural Development shall be
established and maintained in such manner as will properly reflect
allotments and quarterly or other limitations thereunder.

\(b\) Summary control accounts shall be maintained by the DCFO, St.
Louis, MO and/or the National Finance Center, New Orleans, LA to reflect
the status of all funds made available to allottees and shall be
considered the official records.

\(c\) Obligations shall be posted as promptly and as accurately as
possible to the subsidiary and/or control accounts from properly
prepared accounting documents consistent with the requirements of [§1311
of the Supplemental Appropriation Act of 1955]{.underline}. When the
precise amount of the obligation is not known at the time it is
incurred, an estimated amount, based on experience and the best
available information, shall be used.

\(d\) When allotments include amounts for estimated reimbursements, it
shall be the responsibility of the allottee to limit obligations against
such reimbursements to the amounts that will actually be realized.

\(e\) In cases involving reimbursements from other Federal agencies or
from non-Federal sources, a properly executed agreement, memorandum of
understanding or order shall constitute the minimum assurance that the
receivable will be realized.

\(f\) When services are performed for the public as authorized by law on
a fee or cost basis, the rendering of the service will be regarded as
adequate support for the validity of the account receivable.

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§ 2009.55 [Reporting of obligations]{.underline}.

Cumulative reports on the status of current allotments shall be
furnished to the allottees at regular intervals. The Director, Budget
Staff is responsible for reporting, as set forth below, any violations
of law which are reflected in these reports. In addition, the Deputy
Chief Financial Officer (DCFO) will prepare reports in conformance with
the requirements of OMB Circular No. A-11 and Treasury requirements.
Such reports shall be prepared on the basis of official accounting
records and certified by the DCFO and shall agree with similar data
reported to Treasury.

§ 2009.56 [Review of unliquidated obligations]{.underline}.

Rural Development is required to certify all unliquidated obligations in
accordance with Departmental Regulation 2230-001, Reviews of
Unliquidated Obligations. To comply with this requirement, Rural
Development officials will perform reviews of unliquidated obligations
to determine if the unliquidated obligations should be retained or
cancelled. Reviews of unliquidated obligations are necessary to ensure
obligation balances are properly reported, make funds available that
otherwise would not be used, reduce the risk of misuse and theft of
funds, and certify to the validity of the obligated balances. Following
are the procedures that should be followed in reviewing and certifying
to unliquidated administrative, and loan and grant obligations.

> \(a\) [Administrative unliquidated obligations]{.underline}. All Rural
> Development officials responsible for recording and tracking
> administrative obligations in the Department's Foundation Financial
> Information System (FFIS) are responsible for scheduling and
> performing quarterly reviews and certifications of unliquidated
> administrative obligations. These reviews will be accomplished in
> accordance with FFIS User Documentation, Part 12:2, Internal Control
> Requirements, Unliquidated Obligation Certification.
>
> \(b\) [Loan and grant unliquidated obligations]{.underline}. The DCFO
> will issue Report Codes (RC) 743, Report of Prior Year Unliquidated
> Obligations, to all State Directors as of March 31 and September 30 of
> each year for all programs except electric and telephone programs.
> Reports for electric and telephone programs will be sent to the
> applicable Rural Utilities Service (RUS) program officials in the
> National Office. State Directors and RUS electric and telephone
> program officials are responsible for conducting reviews of
> unliquidated obligations reported on the RC 743 reports and certifying
> to the validity of these obligations.

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RD Instruction 2009-B

§ 2009.56(b) (Con.)

> \(1\) When reviewing the RC 743 reports, all obligations will be
> annotated in the left margin of the report as to whether the
> obligation is being cancelled, if a disbursement has been ordered, or
> if the obligation is valid as follows:
>
> \(i\) [Cancellations]{.underline} --- Cancellations will be annotated
> by placing an "X" in the left margin of the report and annotating the
> amount and date of the cancellation. All cancellations should be
> processed to the applicable accounting system (i.e., Program Loan
> Accounting System, Automated Multifamily Accounting System, Guaranteed
> Loan System, Dedicated Loan Origination System, or Rural Utilities
> Loan Servicing System) in accordance with applicable program
> regulations no later than the certification dates as specified in
> §2009.56(b)(4) of this subpart.
>
> \(ii\) [Disbursements]{.underline} --- If a disbursement was issued on
> an unliquidated obligation and the obligation has not been cleared on
> the certified report, show the disbursement date and the amount.
>
> \(iii\) [Valid obligations]{.underline} --- Annotate obligations shown
> on the report that are being retained with the following codes to
> indicate the timeframe in which funds are expected to be requested.
>
> 1 - Funds expected to be requested within 12 months.
>
> 2 - Funds expected to be requested beyond 12 months.

For any obligation coded with a \"2\", explain the reasons why funds
will be disbursed beyond 12 months.

\(iv\) [Documentation Supporting Valid Obligations]{.underline} -- For
obligations being retained, State Directors and RUS electric and
telephone staffs are responsible for ensuring documentation in the
borrower case file supports the unliquidated loan or grant amount.
Documentation must support the amount obligated and disbursed. If
disbursements have not occurred in the past 12 months, documentation
must demonstrate the account is still active (e.g., recent engineering
reports, construction inspections, correspondence with the borrower that
would demonstrate the account is active, record of phone calls with the
borrower that they intend to continue with the loan/grant assistance,
etc.)

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§ 2009.56(b) (Con.)

> \(2\) State Directors and RUS electric and telephone program officials
> will certify to RC 743 reports for their respective programs by
> signing and dating the certification statement on the first page of
> each report. The certification statement will read, "I certify that
> the annual review of RC 743, Prior Year Unliquidated Obligations, has
> been performed, and those unliquidated obligations (not shown as
> canceled) existing at the fiscal year-end are valid based on the
> review."
>
> (3)Based on the certifications provided by the State Directors and RUS
> electric and telephone officials for unliquidated obligations as of
> March 31, the DCFO will certify to the validity of the unliquidated
> obligations reported to the Treasury Department at fiscal-year end.
>
> \(4\) The RC 743 reports as of March 31 must be certified and returned
> to the DCFO, Fiscal Control Branch, Mail Code: FC-360 by May 31. A
> copy of the certified reports will be retained by the State Office or
> RUS electric and telephone staff, as applicable. The DCFO will return
> any partial or incomplete submissions for correction and resubmission.
> Additionally, the DCFO will monitor and followup on reports that are
> not certified and returned by May 31. The RC 743 reports as of
> September 30 must be reviewed and certified by December 31 and will be
> retained by the State Office and RUS electric and telephone staff, as
> applicable, for audit purposes. The DCFO will advise State Directors
> of any additional distributions of copies of the certified reports to
> appropriate National Office program staffs when the RC 743 reports are
> distributed for review and certification.

§ 2009.57 [Reporting rescissions or deferrals]{.underline}.

[The Impoundment Control Act of 1974 (Title X of P.L.
93-344)]{.underline} provides for the reporting by the President to the
Congress of any action that would place a restraint on the incurring of
obligations for any reason as a proposed rescission or deferral of
budget authority. The Director, Budget Staff, will be responsible for
the reporting of such actions through the Under Secretary for Rural
Development, Rural Development, and the Secretary of Agriculture to OMB.

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RD Instruction 2009-B

§ 2009.58 [Reporting violations of law]{.underline}.

\(a\) [Responsibility]{.underline}. The Director, Budget Staff is
responsible for determining whether or not obligations incurred or
expenditures made by allottees are within approved allotments. The DCFO
is responsible for reporting to the Budget Staff any accounting
procedural discrepancy. Whenever violations of the following character
become known, the Budget Staff will prepare a report in the form of a
letter addressed to the President for the signature of the Secretary
which will be submitted promptly for the approval of the Under Secretary
for Rural Development:

\(1\) When obligations are incurred or expenditures are made in excess
of the amount available to the allottee.

\(2\) When allotments are made in excess of apportionments.

\(3\) When a contract or other obligation is approved for the payment of
money for any purpose in advance of appropriation made for such purpose
unless such contract or obligation is authorized by law.

\(4\) Any violation of the prohibition on acceptance of voluntary
services for the United States or employment of personal services in
excess of that authorized by law, except in cases of emergency involving
the safety of human life or the protection of property.

\(b\) [Violations]{.underline}. Reports of violations of the above
character will provide information required by [Chapter 4, DR
2000-1]{.underline}, [Section 132]{.underline}, and will include the
following:

\(1\) The title and symbol (including the fiscal year) of the
appropriation or fund account, the amount involved for each violation,
and the date on which the violation occurred.

\(2\) The name and position of the officer or employee responsible for
the violation.

\(3\) All the pertinent facts relating to the violation, including the
type of violation (for example, over-obligation of allotment,
over-obligation of apportionment, over-expenditure of an appropriation,
and so forth), the primary reason or cause, and any statement of the
responsible officer or employee with respect to any circumstances
believed to be extenuating.

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§ 2009.58(b) (Con.)

\(4\) A statement of the administrative discipline imposed and any other
administrative action taken with respect to the officer or employee, or
an explanation as to why no disciplinary action is considered necessary.

\(5\) A statement of any additional action taken by the Administrator,
including any new safeguards provided to prevent recurrence of that type
of violation.

\(6\) Statement regarding the adequacy of the system of administrative
control.

\(7\) If another agency is concerned, a statement concerning the steps
taken to coordinate the report with the other agency.

\(c\) [Reports]{.underline}. A report on such violations also must be
submitted to Congress as required by law.

§ 2009.59 [Liability]{.underline}.

In addition to any penalty or liability under any other law, any officer
or employee who shall violate any of the provisions under §2009.57 of
this subpart will be subject to appropriate administrative discipline
including, when circumstances warrant, suspension from duty without pay
or removal from office; and any officer or employee who shall knowingly
and willfully violate any of the provisions under §2009.57 will, upon
conviction, be fined not more than \$5,000 or imprisoned for not more
than 2 years or both. In cases involving disciplinary action, such
action will be taken in accordance with established Departmental
procedures.

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§ 2009.60 [Notification of responsibility]{.underline}.

A copy of this subpart shall be furnished each employee to whom
responsibilities, authorities, or duties are assigned hereunder.

§ 2009.61 - 2009.100 \[Reserved\]

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