About the Author

William G. Arnold worked with the Department of Defense for 34 years, over 25 of which he spent in financial management. He has held positions as director of resource management, director of disbursing, and entitlements director with the Air Force and Defense Finance and Accounting Service. He is a certified defense financial manager with acquisition specialty (CDFM-A) from the American Society of Military Comptrollers, and in 1984 he was awarded the designation of certified cost analyst (CCA) by the Institute of Cost Analysis.

Mr. Arnold holds a Master of Arts degree in financial management from Central Michigan University. For many years he taught undergraduate classes in economics and finance at Park College.

Mr. Arnold is currently an instructor with Management Concepts. Course topics include the Prompt Payment Act, voucher examination, an appropriations law seminar, appropriations law for business operations, the Antideficiency Act, budget execution, performance budgeting, and enhanced defense financial management. Mr. Arnold is the author of Performance Budgeting: What Works, What Doesn’t, published in 2008 by Management Concepts.

Chapter 1

Introduction to the Antideficiency Act

Being named in a report to the President of the United States, the Office of Management and Budget, the House of Representatives, the Senate, and the Government Accountability Office (GAO) as someone who violated the Antideficiency Act is never a career-enhancing event. Such reports have haunted many government officials and have ended many promising careers. Most of the time such violations were not intentional; the employee was trying to do the best job possible to support agency missions and programs. But pure motives and a lack of intent do not keep someone’s name off a violation report. Usually, the violation resulted from a lack of knowledge about what was and what was not permissible.

I wrote this book to serve as a guide to anyone who is interested in using government funds properly and legally and who wants to avoid running afoul of the Antideficiency Act. Such readers include federal government and District of Columbia government personnel, including program managers, contracting personnel, funds certifiers, entitlement and certifying officials in paying offices, and auditors. Recipients of grants and anyone else who may at times control federal funds will also find it of interest.

The book is designed as a reference, enabling the reader to find the answer to a specific question. It is not designed to be read cover to cover. However, certain issues require several questions and answers to fully explore the topic. Care has been taken to group related questions or questions that depend on one another in a logical flow. The reader is cautioned to read the entire section devoted to the issue at hand to get a complete answer.

While the questions and answers have been thoroughly researched and are as accurate and current as possible, do not rely on this book as a legal reference. Consult both your agency internal regulations and your legal counsel about specific issues. Furthermore, Congress from time to time passes legislation that benefits a particular agency. Except where noted, the questions and answers within are based upon the generic laws and rules. It is possible your agency has specific statutory authority not covered in the book. Although the Antideficiency Act itself has not changed recently, the reader should check to see if any new decisions or interpretations have been issued since the publication of this book.

The text relies heavily on GAO’s Principles of Federal Appropriations Law, Volume II, chapter 6, available at http://www.gao.gov/legal/redbook.html. This is the so-called Red Book, which is considered the authoritative source on the proper use of government funds. The Red Book describes existing legal authorities to illustrate the principles discussed and their application, as well as exceptions.

While the Red Book is very well written, finding an answer to a specific question can be quite challenging. The discussion of many issues begins with a complete history of the subject, which may include several pages of decisions in chronological order, showing the evolution of the decisions up to the present date. The history is often fascinating, but most readers are interested in the current status of the policy on a given subject. That is what I have attempted to provide in this book. Historical references are included only when they are germane to understanding the current status.

A FEW WORDS ABOUT CITATIONS

In this book, you will find abundant references to resources that use what may appear to be odd citations or annotations. The following discussion should help explain them.

Public Laws

When Congress passes a bill or joint resolution, and the president signs it into law (or lets it become law after ten business days without his signature), the legislation is called a public law. In this book, public laws are annotated as follows: P.L. 111-25. The meaning of the P.L. is obvious. The 111 refers to the number of the Congress that passed the legislation. The first Congress was in session in 1789 and 1790. Each Congress lasts two years, so the 111th Congress is the one in session in 2009 and 2010. The 25 means this was the 25th public law passed by the 111th Congress.

U.S. Code

When Congress passes public laws that contain permanent provisions, such permanent provisions are consolidated and codified into the U.S. Code. The U.S. Code is, in essence, a compendium of our body of federal laws. A typical annotation would appear as 31 USC 1341. The 31 is the title number. The U.S. Code contains 50 titles, each dealing with a different subject. Think of the titles as chapters in a book. In this case, Title 31 is about money and finance. The 1341 means “section 1341 of Title 31.” The section number is merely a placeholder or locator and has no relationship to the order in which provisions were enacted into law, unlike the public law annotation.

Code of Federal Regulations (CFR)

The Code of Federal Regulations is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the federal government. It is divided into 50 titles that represent broad areas subject to federal regulation. Each title is divided into chapters, which usually bear the name of the issuing agency. Each chapter is further subdivided into parts that cover specific regulatory areas. Large parts may be subdivided into subparts. All parts are organized in sections, and most citations in the CFR are provided at the section level. For example, 5 CFR 1315.4 means “section 1315.4 of Title 5.”

Comptroller General Decisions

The head of GAO is the comptroller general (CG) of the United States. (Note: GAO was known as the General Accounting Office from its creation in 1921 until 2004, when it changed its name.) The CG renders and publishes decisions on the proper use of government funds. These decisions form the basis for much of our understanding of what is and is not permissible when using federal dollars.

CG decisions are annotated in two ways. An example of the older method is 54 Comp. Gen. 356. This means that the decision can be found in volume 54 of the comptroller general decisions, starting on page 356.

More frequently cited in this book are the later CG decisions, which take the form of B-123456, date. These are simply file numbers for the decisions, which start with a B, then contain a six-digit number, and end with the date of publication of the decision.

Comptroller of the Treasury Decisions

GAO was created in 1921. Before 1921, the comptroller of the U.S. Treasury issued decisions on the proper use of appropriated funds. They took the form 22 Comp. Dec. 379. These follow the same scheme as the Comp. Gen. decisions mentioned above, so this decision can be found in volume 22 of the Comp. Dec. decisions, starting on page 379.

Finally, you will find occasional reference to U.S. attorney general decisions and court decisions. These will be obvious from the context of the discussion.