# Presentation: 115018

## Fiscal Law

## FAA Acquisition Management System (AMS)

NO EXEMPTION FROM FISCAL RULES

***NO EXEMPTION FROM FISCAL RULES***

**Fiscal Law**

## Basic Fiscal Rules

**Budget authority to obligate (spend)**
**Checking account**
**Don’t write checks that bounce!**

## Three ways “check” can bounce

**Amount – Anti-Deficiency Act**
**Purpose – Necessary Expense Doctrine**
**Time – Bona Fide Needs Rule**

## More Limitations:

**Apportionment - OMB**
- OMB limits the amount of appropriation that can be used during a given period
- Quarters
**Administrative – FAA**
- Allotments
- Allowances

## Examples:

**Offeror proposes an open-ended indemnity provision in contract**
- Can CO accept, if offer is otherwise favorable to FAA?
**In March 2006, vendor offers favorable terms on  contract for computer equipment for 2009**
- Can CO obligate funds?

## 
Open-ended obligations prohibited

Obligations in advance of appropriations prohibited

**Open-ended obligations prohibited**
**Obligations in advance of appropriations prohibited**

## “Anti-Deficiency Act”

**Obligations in excess of or in advance of appropriation**
- More than you have
- Before you have it

## Example:

**No Funds Remain on Contract, Contractor Continues to Work**
- Action Required?

## 
#3 - Action required? YES

Send the contractor home!
Government’s obligation to the Contractor cannot exceed the amount of funding on the contract.

**#3 - Action required? YES**
**Send the contractor home!**
- Government’s obligation to the Contractor cannot exceed the amount of funding on the contract.

## Other Limitations:

**Proper **_**Purpose**_** – Necessary Expense**
**Proper **_**Time Period**_** – Bona Fide Needs**

## Necessary Expense Doctrine

**Appropriation available for expenses necessary/incident to object of appropriation**
**Not every expenditure can be specified in Appropriation Act**

## Example

**FAA program office charges desktop computers to F&E account**
- Is the action proper?
**In the next fiscal year, the office charges a new purchase of desktop computers to  Ops account**
- Is the action proper?

## #4 - Charges desktop computers to F&E account 

F&E is not a General Capital account.  A nexus with air traffic facilities is required.  However, this could include support functions.  For example, headquarters office supporting air traffic operations.

In the next fiscal year, the office charges purchase to the Ops account

Once an election has been made, change in Appropriations Account (e.G. F&E to Ops) requires justification, such as change in circumstances.  For example, same headquarters office no longer supports air traffic operations.

- F&E is not a General Capital account.  A nexus with air traffic facilities is required.  However, this could include support functions.  For example, headquarters office supporting air traffic operations.
**In the next fiscal year, the office charges purchase to the Ops account**
- Once an election has been made, _change_ in Appropriations Account (e.G. F&E to Ops) requires _justification_, such as change in circumstances.  For example, same headquarters office no longer supports air traffic operations.

## F&E Is Not A General Capital Account 

**There Can Be An Overlap Between F&E and Ops Accounts**
**Agency Discretion**
**Once An Election Is Made It Cannot Be Changed**

## Entertainment (Food)

Gifts

Lobbying

**Gifts**
**Lobbying**
**	**

**Prohibited Expenditures**

## Feeding government employees at duty station is dual compensation
Exceptions
Award Ceremonies
Training
Conferences, but not internal FAA conferences
Travel (if 51% of employees on travel, light refreshments allowed) 
Gifts
NOT allowed (If everyone in organization receives item, it is not an award but a gift)

- Exceptions
- Award Ceremonies
- Training
- Conferences, but not internal FAA conferences
- Travel (if 51% of employees on travel, light refreshments allowed)
- Gifts
- NOT allowed (If everyone in organization receives item, it is not an award but a gift)

**Entertainment/Food**

## 
Regional Procurement Conference Wants to Serve Coffee and Donuts to Attendees

Is this prohibited?

**Regional Procurement Conference Wants to Serve Coffee and Donuts to Attendees**
- Is this prohibited?

**Example**

## #5 - Coffee/Donuts
Prohibited? YES

Exception – if 51% of participants are in travel status, then light refreshments may be served.

- Prohibited? YES
*Exception* – if **51%** of participants are in travel status, then light refreshments may be served.

## Appropriations available for one year, or other period

Obligations only for a need which arose during period which appropriation is available

Not for a need of a future period

**Obligations only for a need which arose during period which appropriation is available**
**Not for a need of a future period**

**Limits as to Time – Bona Fide Needs Rule**

## Contract for Technical Consulting services for a one-year period starting in March 2006, using Operations funds

Which Fiscal Year Appropriation Should Be Charged For Work After September 30, 2006? 

- Which Fiscal Year Appropriation Should Be Charged For Work After September 30, 2006?

**Example**

## #6 - Service starts in March 2006 for one-year period

Which appropriation should be charged? 

FY 2006 Ops Funds 

- Which appropriation should be charged?
- FY 2006 Ops Funds

## Training
Can relate back to year of bona fide need 
Current fiscal year, even if course is not available until next fiscal year, but only within reason
In-scope changes 
Relate back to year of bona fide need
If contract change is in scope, it is dependent on original requirement
Advance payments 
Generally prohibited
Use of options 
Instead of improper multi-year contracts

- Can relate back to year of bona fide need
- Current fiscal year, even if course is not available until next fiscal year, but only within reason
**In-scope changes **
- Relate back to year of bona fide need
- If contract change is in scope, it is dependent on original requirement
**Advance payments **
- Generally prohibited
**Use of options **
- Instead of improper multi-year contracts

**Time - “Bona Fide Need” Rule**

## Multi-Year Contracting Authorities

Authority to Cross Fiscal Years for Services

Authority to retain payments for services performed by FAA
Appropriations Act

**Authority to Cross Fiscal Years for Services**
**Authority to retain payments for services performed by FAA**
- Appropriations Act

**FAA Special Authority**

## Know Your Limits!

**Amount**
**Purpose**
**Time**