U.S. EPA's
ADMINISTRATIVE  CONTROL
           of
  APPROPRIATED FUNDS
      OMB APPROVED
        RELEASE 3.2
      February 4, 2008

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       02/04/08
TABLE OF CONTENTS

CHANGE CONTROL LOG
ACRONYM LIST
INTRODUCTION
CHAPTER 1 : THE FEDERAL BUDGET PROCESS, LAWS, & GUIDANCE
I. OVERVIEW OF THE FEDERAL BUDGET PROCESS AT EPA
A. Budget Planning and Formulation of NPM Budgets
B. OMB Submission
1 . OMB Review and Passback
C. President's Budget
D. Congress
1 . House and Senate Review and Mark-Up
2. Congressional Conference Action
3. Enacted Appropriation
a. Continuing Resolution/ Agency Shutdown
b. Supplemental Appropriations
E. OMB Apportionments
F. 1 . EPA Allotments
2. Advices of Allowance (AOA)
II. FEDERAL LAWS AND GUIDANCE
A. Principles of Federal Appropriations Laws
1 . Appropriations as to Purpose
2. Appropriations as to Time
a. The Unexpired Phase
b. The Expired Phase
c. The Cancelled Phase
3. Appropriations as to Amount
B. Budget and Accounting Procedures Act (1921)
C. Economy Act (1 958)
D. Congressional Budget Impoundment and Control Act (1974)
E. Federal Manager's Financial Integrity Act (FMFIA) (1982)
F. Chief Financial Officers Act (CFO) (1 990)
G. "M" Acct Legislation
H. Government Performance and Results Act (GPRA) (1993)
I. OMB Circular A-1 1 (Part 2)/Preparation & Submission of Budget Est.
J. OMB Circular A-1 1 (Part 4)/lnstructions on Budget Execution

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                                                                               PAGE
    III.     EPA LEGISLATION                                                      28

           A.     Authorizing Legislation                                             28
                   1.    Clean Air Act (CAA) 1970                                    28
                   2.    Federal Water Pollution Control Act (FWPCA) of 1948            28
                        Clean Water Act (CWA) 1972
                        Water Quality Act of 1987 (WQA)
                        Beaches Environmental Assessment & Coastal Health Act of 2000
                   3.    Marine Protection, Research, and Sanctuaries Act (MPRSA)       29
                   4.    Safe Drinking Water Act (SDWA) 1974                        29
                   5.    Solid Waste Disposal Act                                    30
                        Resource Conservation and Recovery Act (RCRA) 1976
                        Hazardous and Solid Waste Amendments (HSWA) of 1984
                   6.    Comprehensive Environmental Response, Compensation,        30
                          and Liability Act (CERCLA) 1980
                        Superfund Amendments and Reauthorization Act of 1986 (SARA)
                        Emergency Planning and Community Right-To-Know Act (EPCRA)
                        Small Business Liability Relief and Brownfields Revitalization
                   7.    Energy Policy Act of 2005                                    31
                   8.    Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) 1972   31
                   9.    Food Quality Protection Act (FQPA) of 1996                    31
                  10.    Toxic Substances Control Act (TSCA)  of 1976                   32
                  11.    Radon Abatement Act (RAA) of 1988                          32
                  12.    National Environmental Policy Act (NEPA) (1969)                32
                  13.    Pollution Prevention Act (PPA) of 1990                        33
                  14.    Oil Pollution Act (OPA) of 1993                               33
                  15.    Inspector General Act of 1978                                33

           B.     Appropriations Acts                                               34
                  1.     One-Year Appropriations                                    34
                  2.     Multi-Year Appropriations                                    34
                        a.     Environmental Program & Management (EPM)            34
                        b.     Science & Technology (S&T)                          35
                        c.     Office of Inspector General (OIG)                      35
                  3.     No-Year Appropriations                                     36
                        a.     Hazardous Substance Response Trust Fund (Superfund)   36
                        b.     Leaking Underground Storage Tanks Trust Fund (LUST)   36
                        c.     Buildings and Facilities (B&F)                          36
                        d.     Oil Spill Liability Trust Fund                           37
                        e.     State and Tribal Assistance Grants (STAG)              37

    CHAPTER 2:   ROLES AND RESPONSIBILITIES FOR FUNDS CONTROL             38

    I.      PARTICIPANTS                                                         38
           A.     Assistant Administrators (AAs)                                       38
                  National Program Managers (NPMs)
                  Responsible  Planning and Implementation Officers (RPIOs)
           B.     Regional Administrators (RAs)                                       39

                                               3

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c.
D.
E.
F.
G.
H.
1.
J.
K.
L.





M.
N.
0.
CHAPTER 3:

Senior Resource Officials (SROs) & Assit. Regional Administrators(ARAs)
Senior Budget Officers (SBOs)
Regional Comptrollers
Regional Budget Officers
Allowance Holders (AHs)
Funds Control Officers (FCOs)
Originator
Approving Official
Obligating Officials
Office of the Chief Financial Officer (OCFO)
1 . Office of Planning, Analysis, and Accountability (OPAA)
2. Office of Budget (OB)
3. Office of Financial Management (OFM)
4. Office of Financial Services (OFS)
5. Office of Enterprise Technology and Innovation (OETI)
Financial Management Officers (FMOs)
Accounts Payable Certifying Officers & Disbursing Officers
Office of General Counsel (OGC)
BUDGET EXECUTION PROCESS
1. ACCOUNT CODE STRUCTURE AT EPA
A.







B.
C.



6-Field IFMS Account Code
1 . Budget Fiscal Year Field (BFY)
2. Fund (Appropriation) Field (APPR)
3. Organization Field (ORG)
IFMS Account Code Expansion/Utilization (Figure 2)
4. Program Field - Program Results Code Field (PRC)
5. Site/Project Field
6. Cost Organization Field
Appropriation Number (Treasury Account Symbol)
Object Classes
1 . OMB Object Classification Codes
2. EPA Object Classification Codes
3. EPA Sub-Object Classification Codes
II. OPERATING PLAN CONTROL AND MANAGEMENT
A.



B.



Advice of Allowances
1 . Nature of Allowances
2. Advice of Allowance Issuance
3. Adhering to Advices of Allowance
Reprog ramming
1 . Purpose and Definition
2. General Reprogramming Restrictions
4
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ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS







III.




















IV.



3. Reprogramming Limitations (Ceilings and Floors)
a. Ceilings
b. Floors
4. IFMS Reprogramming Process
C. Carryover of Unobligated Balances
D. Reimbursable Allowances
COMMITTING AND OBLIGATING APPROPRIATED FUNDS
A. Reviewing and Approving Funding Documents
B. Recording Commitments
1 . Funds Availability Check
2. Entering Documents into IFMS
3. Unfunded Procurement Requests for Planning Purposes
C. Monitoring Funds after Commitment
1. IFMS Tables
2. Financial Data Warehouse (FDW) Reports
3. Orbit Reports
D. Recording Obligations
E. Authorizing Payments
F. Reconciliation
G. Resolving Issues with Commitments and Obligations
H. Prevalidation of Funds
I. Overruns/Recoveries
J. Ratification of Unauthorized Procurements
K. Recertification of Funds
1 . When Funds Do Not Have to be Recertified
2. When Funds Do Have to be Recertified
L. Centrally Managed Allowances
MANAGEMENT REPORTING AND END-OF-YEAR CLOSEOUT
A. Unliquidated Obligations
B. End-of-Year Close Out
CHAPTER 4: SPECIAL SUBJECT ITEMS
1.











SPECIAL SUBJECT ITEMS
A. Violations: Creation, Reporting, & Penalties
1 . Antideficiency Act (ADA) Violations
2. EPA Administrative Control of Funds Violations
B. Operating Under a Continuing Resolution
C. Payroll Management and Tracking/PeoplePlus
D. Working Capital Funds Services
E. U.S. Government Purchase Card Program
F. Ordering GSA Office Supplies
G. "Administrative" vs. "Programmatic"
1. Philosophy
5
02/04/08
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           H.
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           K.
           L.

    EXHIBITS:
2.      Special-Use Facilities
3.      Examples of Administrative and Programmatic Costs
Direct Implementation
Additional Grants information
Split Funding with Multiple Appropriations
Layoffs Between Appropriations
Fees and Fee Programs
                 2520-2-1      Funds Control Relationships in EPA
                 2520-2-2      FCO Designation Letter and FCO Designation Form
                 2520-2-3      Servicing Finance Offices (SFO)
                 2520-3-1      EPA Appropriation Fund Codes / Treasury Symbols
                 2520-3-2      Object Class Relationships
                 2520-3-3      IFMS Budget Hierarchy
                 2520-3-4      How to Write a GOOD Reprogramming Justification
    APPENDICES:
                 2520-A       Budget Terms and Definitions
                 2520-B       Checklist of Good Fund Control Practices
                 2520-C       Suggested FCO Job Qualifications & Training
                 2520-D       Frequently Asked Questions (FAQs)

    FREQUENTLY ASKED QUESTIONS:
                 A.           REPROGRAMMINGS
                 B.           CONTRACTS
                 C.           GRANTS
                 D.           TRAVEL
                 E.           GENERAL
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                                 CHANGE CONTROL LOG
     INDEX OF MAJOR REVISIONS / NEW MATERIAL

     Update - Introduction
     Re-description of the Budget Process
     Update - Advice of Allowance (further defined)
     Added Authorization - Energy Act
     Added Roles and Responsibilities - Regional Budget Officers
     Update - General Reprogramming Restrictions
     Update - Reprogramming Limitation (Ceiling and Floor)
     Update - Carryover of Unobligated Balances
     Update - Reimbursable Allowances (for SF Special Accounts)
     Update - Overruns/Recoveries (for No-Fear Act)
     Update - Recertification of Funds
     Update - Unliquidated Obligation
     Update - U.S. Government Purchase Card Program
     Additional  Grants Information - Direct Implementation
     Added - Q&A on using appropriated funds to pay for meals at a
            agency sponsored meetings and  conferences.
     Added - Q&A explanation on how to make changes to a PRC
  PAGE(s)

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   13-16
   18,61
   31
   41-42
   62-63
   64-65
   66-67
   68
   80-81
   85-87
   90-91
   101-105
   117-118

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    ACRONYMS USED in this DOCUMENT
    ACRONYM
    AA
    ADA
    AH
    AHRC
    ALLT
    AOA
    ARAs
    B&F
    BAS
    BFY
    BOC
    BOCT
    BPA
    CAA
    CERCLA
    C-FMC
    CFO
    CJ
    CMA
    CO
    Comp.Gen
    CORs
    CPARS
    CPS
    CR
    CWA
    CWSRF
    DAA
    DCN
    DWSRF
    DXRF
    EASY
    EPAAR
    EPCRA
    EPM
    FAN
    FAR
    FASA
    FCO
    FDW
    FIFRA
    FMFIA
    FMO
    FQPA
    FSOC
    FTE
    FTTA
MEANING
Assistant Administrator
Anti-Deficiency Act
Allowance Holder
Allowance Holder Responsibility Center
Allowance Table (IFMS)
Advice of Allowance
Assistant Regional Administrators
Building and Facilities (Appropriation)
Budget Automation System
Budget Fiscal Year
Budget Object Class
Budget Object Class Table (IFMS)
Blank Purchase Agreement
Clean Air Act
Comprehensive Environmental Response Compensation Liability Act (1980)
Cincinnati Financial Management Center
Chief Financial Officer
Congressional (Budget) Justification
Centrally Managed Allowances
Contractual Obligation
Comptroller General (a.k.a the Government Accountability Office)
Contract Officer Representative
Combined Payroll Redistribution and Reporting System
Contract Payment System
Continuing Resolution
Clean Water Act (1972)
Clean Water State Revolving Fund
Deputy Assistant Administrator
Document Control Number
Drinking Water State Revolving Fund
Document Cross Reference Table (IFMS)
Electronic (Invoice) Approval System
Environmental Protection Agency Acquisition Regulation
Emergency Planning and Community Right-to-Know Act (1986)
Environmental Programs and Management (Appropriation)
Fixed Account Number
Federal Acquisition Regulation
Federal Acquisition Streamlining Act (1994)
Funds Control Officer
Financial Data Warehouse
Federal Insecticide, Fungicide Act (1972)
Federal Manager's Financial Integrity Act (1982)
Financial Management Office
Food Quality Protection Act  (1996)
Finance Sub-Object Class (code)
Full-Time Equivalent
Federal Technology Transfer Act

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
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    FWPCA
    GAO
    GC
    GPRA
    IAG
    ICMS
    IFMS
    IGMS
    I PA
    LIMT
    LUST
    LV-FMC
    MO
    NOA
    NPM
    OBLH
    OBLL
    ODN
    Op Plan
    ORBIT
    PC&B
    PGMT
    PPA
    PPGs
    PR
    PRC
    PROJ
    R&D
    RA
    REQL
    RMDS
    RPIO
    RTP-FMC
    S&T
    SAIN/SALC
    SARA
    SASP
    SBO
    SDWA
    SF
    SFO
    SIRMO
    SOC
    SRF
    SRO
    STAG
    SUSF
    TA
    TSCA
    WAM
    WCF
Federal Water Pollution Control Act
Government Accountability Office
General Counsel
Government Performance Results Act (1993)
Inter-Agency Agreement
Integrated Contracts Management System
Integrated Financial Management System
Integrated Grants Management System
Inter-personnel Act
Limit Reference Table (IFMS)
Leaking Underground Storage Tanks (Appropriation)
Las Vegas Financial Management Center
Miscellaneous Obligation
New Obligational Authority
National Program Manager
Obligation Line Header Table (IFMS)
Obligation Line Table (IFMS)
Obligating Document Number
Operating (Budget) Plan
OCFO Reporting Business Intelligence Tool
Personnel Compensation and Benefits
Program Reference Table (IFMS)
Pollution Control Act (1990)
Performance  Partnership Grants
Purchase Request
Program Results Code
Project Reference Table (IFMS)
Research and Development
Regional Administrator
Requisition Line Table (IFMS)
Resource Management Directive System
Resource Planning and Implementation Office
Research Triangle Park (North Carolina) Financial Management Ctr
Science and Technology (Appropriation)
Sub-allowance Inquiry Table (IFMS)
Superfund Amendments and Reauthorization Act (1986)
Sub-allowance Spending Control Table (IFMS)
Senior Budget Officer
Safe Drinking Water Act (1974)
Superfund (Appropriation)
Servicing Financial Office
Senior Information Management Officer
Sub-Object Class Code (also known as FSOC)
State Revolving Fund
Senior Resource Official
State and Tribal Assistance Grants (Appropriation)
Suspense File (IFMS)
Travel Authorization
Toxic Substances Control Act
Work Assignment Manager
Working Capital Fund

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS	02/04/08

   WQA              Water Quality Act (1987)
                                        10

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ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                              02/04/08
                                            INTRODUCTION

    The control of funds in the federal government is governed by statutes and implemented by directives from the
    Office of Management and Budget (OMB), the General Accountability Office (GAO), the U.S. Treasury, and the
    Congress. This document presents information on EPA's funds control principles and policies and details their
    legal basis. These provisions apply to all organizations, appropriations, and funds at EPA. We have included
    detailed procedures for controlling funds where possible or referenced the annual guidance or organization
    where  the latest procedures can be obtained.  Although the main audience for this material is the EPA
    Allowance Holders (AHs) and their Funds Control Officers (FCOs), it is a useful reference for all members of
    the resource community. Resource management is everyone's responsibility.

    EPA receives several Congressional appropriations which provide for both  general and specific areas of activity.
     Congressional appropriations  are  provided for a  particular,  purpose, time and amount.  These three
    characteristics are regulated through restrictions such as the), the Necessary Expense Rule (purpose) Bona
    Fide Needs Statute (time) and the Anti-Deficiency Act  (ADA) (amount).  The ADA  also governs timing -
    prohibiting obligations in advance of appropriations.

    The complex nature of EPA's missions and the diversity of its programs  have a major impact on procedures
    developed for controlling EPA's funds.  Since funds control is conducted throughout Headquarters offices, as
    well as in the various Regional Offices and laboratories, standard policies and procedures on how to control
    funds are necessary to ensure that EPA does not violate the Congressional intent of the appropriations provided
    and EPA's managers do not violate the U. S. statutes. To that end, 31 U.S.C. 1514 requires the head of each
    Agency, subject to approval of the President, to prescribe by regulation a system of administrative control of
    funds.  The approval of fund control regulations has been delegated to the Director of the OMB. OMB approval
    is intended to ensure that the objectives of financial plans are met and do not violate the Antideficiency Act
    (ADA).

    OMB Circular A-11 (Part 4) "Instructions on Budget Execution" (formerly OMB  Circular A-34) provides
    government-wide guidance and a checklist for Agency use in preparing funds control regulations for approval by
    OMB.  This document, Administrative Control of Appropriated Funds (Resources  Management Directives
    System (RMDS) Chapter 2520), will be submitted to OMB as EPA's revised documentation of its Funds Control
    Regulations and system.

    This Funds Control Regulation:

    A.  establishes policy with regard to the administrative control of funds,

    B.  prescribes  a system for positive administrative control of funds designed to restrict obligations and
        expenditures against each appropriation or fund account to the amount available therein,

    C.  restricts both obligations and expenditures from each appropriation  or fund account to the  lesser of the
        amount of apportionments made by OMB or the amount available for obligation an/or expenditure in the
        appropriation or fund account,

    D.  enables the Administrator to determine responsibility for  overobligation and  overdisbursement of
        appropriations, apportionments, statutory limitations, allotments, and  other administrative subdivisions, as
        well as violations of limitations imposed  by the Agency, and

    E.  provides procedures for dealing with violations  of the Antideficiency Act (ADA) as well as violations of
        limitations imposed by the Agency, including reporting requirements.
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    F.  discusses agency administrative control of funds policies that apply to revolving funds, management
        funds, and trust funds, including those that are not apportioned.

    In addition  to OMB Circular A-11, this document is  designed to also compliment  OMB Circular A-123,
    "Management Responsibilities for Internal Controls", which provides guidance on using the range of tools at
    the disposal of agency managers to achieve desired program results and meet the requirements of the
    Federal Managers' Financial Integrity Act (FMFIA) of 1982. The FMFIA encompasses accounting and
    administrative controls.  Such controls include program,  operational, and administrative areas as well as
    accounting  and financial management.
    Management has a fundamental responsibility to develop and maintain effective internal controls. The
    proper stewardship of Federal resources is an essential responsibility of agency managers and staff.
    Federal employees must ensure that Federal programs operate and Federal resources are used efficiently
    and effectively to achieve desired objectives. Programs must operate and resources  must be used
    consistent with agency missions, in compliance with laws and regulations, and with minimal potential for
    waste, fraud, and mismanagement.

    Readers are encouraged to visit http://intranet.epa.gov/ocfo/perform/integrity.htm which provides links to
    an overview of the Federal Manager's Financial Integrity Act, and OMB Circular A-123, as well as key
    OCFO quality assurance guidance memos.
    This directive is effective immediately and supersedes  all previous versions. This document will be accessible
    online in HTML and/or PDF formats as soon as it is finalized.

    The PDF format contains word and phrase  search capabilities that are useful in locating specific funds control
    content.

    Supplemental guidance regarding the financial management of selected areas, such  as travel, and selected
    appropriations, such as those derived from the Superfund and LUST Trust Funds,  can be found  in other
    sections of the RMDS 2500 series. The entire series, as well as all other OCFO policy documentation can be
    accessed online at the following URL address:  http://intranet.epa.qov/ocfo/policies/policies.htm.
                                                  12

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  CHAPTER 1:    THE FEDERAL BUDGET PROCESS. LAWS. & GUIDANCE

    I.     OVERVIEW of FEDERAL BUDGET PROCESS at EPA

          General knowledge of the federal budget process is necessary to set the stage for learning detailed
          budget execution policies and procedures. The following overview briefly describes the Executive and
          Congressional budget processes.


                              FEDERAL BUDGET PROCESSES
                       FORMULATION
EXECUTION

I
NPMs


I
AGENCIES
(EPA)




PRESIDENT

I
CONGRESS:




NPM BUDGETS
(Section A)

1

OMB SUBMISSION
(Section B)
OMB REVIEW and PASSBACK,
APPEAL, AND RESOLUTION
(Section B. 1)
PRESIDENT'S BUDGET
(Section C)
1
HOUSE & SENATE — + CONFERENCE
MARK-UP ACTION
(Section D. 1) (Section D. 2)
'l

. OBLIGATIONS BY
ALLOWANCE
HOLDERS
t

EPA ALLOWANCES
(Section F.2)
t
EPA ALLOTMENTS
(Section F. 1)

OMBAPPORTIONMENTS
(Section E)
—+ ENACTED
APPROPRIATION
(Section D.3)
                                        FIGURE 1
                                           13

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                      These activities correspond to the steps shown in FIGURE 1.
    A.   BUDGET PLANNING and FORMULATION of NATIONAL PROGRAM MANAGER (NPM) BUDGETS:
         (March - August)

    The budget formulation process at U.S. Environmental Protection Agency (EPA) has evolved a great deal. As
    EPA seeks to present its budget more effectively to Congress and to the public, it has moved toward linking
    budgetary resources to measurable environmental goals and outcomes.  Building such a "results-based"
    budget requires the integration of planning and budgeting in all phases of budget development.

    The following information is as a "quick overview" of the budget formulation process. The first step in the
    process is one of outreach from EPA to stakeholders, state, and tribal organizations to discuss their concerns
    and priority areas that will move them toward achieving goals and meeting statutory requirements. This input is
    then factored into the discussions and decisions at an Annual Planning Meeting. The focus of this meeting is
    for the Administrator and the Agency's senior leadership to review and prioritize major policy changes that will
    move the Agency closer to achieving its environmental goals contained in the EPA's Strategic Plan.

    Based on discussions and agreements reached at the Annual Planning Meeting, budget policy and technical
    guidance is issued to the Agency for the development of its budget. The guidance memo developed by the
    Office of Budget (OB), with input from the Office of Planning, Analysis, and Accountability (OPAA) includes the
    framework and formats each office should use in developing their budget requests.

    Each Assistant Administrator (AA), plus General Counsel (GC) and the Inspector General (IG), serve as
    National Program  Managers (NPMs).  These Agency executives work with  the senior managers  in  their
    program offices and with the Regions to formulates a budget request which reflects implementation of the
    Agency's Strategic Plan and the needs of Headquarters and the Regional offices. The budget is formulated
    following guidance issued by the Administrator.

    AAs submit their requests to the OCFO. The OCFO reviews and analyzes the requests and works togetherto
    make recommendations to the Agency's senior managers. The recommendation takes the form of a "budget
    straw proposal" and includes amended budget decisions.  The Agency's senior  managers then meet at a
    Budget Forum annually in July to discuss and make recommendations on the proposed budget decisions.
    The Administrator's final decisions are communicated to the  Agency along with technical instructions for
    preparation and submission of the OMB budget.

    B.  OMB SUBMISSION:       (September-November)

    AAs, based on the Administrator's final decisions, prepare their portion of the Agency's budget request to OMB
    and submit them to Office of Budget for consolidation into a single document. OMB Circular A-11, issued
    annually, provides the technical guidance for preparation of the Agency's budget request, which is due to OMB
    usually on the first Monday after Labor Day (13 months in advance of the fiscal year).

        1.   OMB REVIEW, PASSBACK, APPEAL, and RESOLUTION:    (November-December)

        OMB, after an initial period of review, holds hearings with selected AAs to justify their requested resource
        levels. OMB also usually requests additional program and budget information from the Agency. After
        further review of the Agency's budget submission, that includes a "Director's Review", OMB informs the
        Agency about their decisions on EPA's budget request.  This is commonly called the "OMB Passback".
                                                 14

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        After receiving the "OMB Passback", the Agency generally has 3 days to prepare and submit an appeal to
        OMB.  If there is an appeal, a second Passback process occurs until OMB and EPA agree on the final
        policy and budget decision. This stage is complete after all outstanding issues between the Agency and
        OMB have been resolved.  Issues that cannot be resolved between the Agency  and OMB may be
        appealed to the President.

    C.  PRESIDENT'S BUDGET:  (December - February)

    EPA's budget request  is then produced in a specific format for Congressional submission known  as the
    "Congressional Justification" (CJ). This format, which includes summaries and special  analyses, displays
    resource levels for three fiscal years (prior year, current year, and budget year) including explanations of
    change and narrates the strategy,  accomplishments, and budget request for each of the Agency's programs.
    Each NPM submits their portion of the CJ in final form to the OB, which prepares supplemental schedules,
    exhibits, final documents, and data.  EPA combines the "Congressional Justification" with the Agency's Annual
    Plan to produce one document entitled: The Annual Plan and Budget. The document is first reviewed by
    OMB, then after being approved, it is printed and awaits  distribution as the detailed justification to EPA's
    portion of the annual President's budget (PB) request to Congress.

    Throughout this preparation period, there is a continuous exchange of information among the various federal
    agencies, OMB, and the President, including revenue estimates and economic outlook projections from the
    Treasury Department (TD), the Council of Economic Advisers, and the Departments of Commerce and Labor.
     During the President's Budget preparation, all information, correspondence, and data are strictly confidential,
    and remain confidential until the President's Budget is officially released to the public.

    The OMB, which  is charged  with  broad oversight, supervision, and responsibility for coordinating and
    formulating a consolidated budget submission,  to  Congress produces numerous documents for the
    President's Budget; the most noteworthy is the Budget Appendix.

    On, the 1st Monday in February, the President submits his annual budget to Congress as the Administration's
    budget request for the next fiscal year starting on the following October 1. EPA's request for its annual budget
    is submitted to the  Interior, Environment, and Related Agencies Appropriations Sub-Committees of the House
    of Representatives and the Senate.  Most agencies schedule a press conference on the day of the President's
    Budget submission and release their portion of the President's Budget request to the general public.

    D. CONGRESS  (February - September)

        1.  CONGRESSIONAL (HOUSE and SENATE) REVIEW and MARK-UP:   (February-August)

        Congress holds hearings on the President's Budget.  This review  is done primarily by the House and
        Senate Appropriations Interior Subcommittees even though authorizing committees also hold hearings.
        EPA officials testify on the requested levels and respond to questions received from Congressional
        Committees. The House Interior Appropriations Subcommittee then conducts a hearing to "mark-up" the
        PB request. A full House Appropriations Committee "mark-up hearing" follows.  The House Committee
        "mark-up" goes to the House Floor for a final vote. Traditionally, once the  House passes an appropriation
        bill, the Senate follows  the same  process as the House.  Both the House and Senate Appropriation
        Reports Subcommittee issues detailing each house's mark-ups to the proposed PB.  This information is
        distributed to the AAs and  Regional Administrators (RAs) who follow the steps of the  legislative process
        and make the  changes (add-ons, reductions, etc.) to their programs.
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        Through the Congressional appropriations process, Congress prescribe restrictions on how EPA uses its
        funds, including travel ceilings, expense ceilings, (e.g. Superfund Management Cap) and reprogramming
        limitations. These will be discussed in more detail in subsequent sections of this directive.

    2.  CONGRESSIONAL CONFERENCE ACTION:      (September)

        There are normally variations in the Senate and House appropriation bills as well as differences in
        accompanying reports. A Conference Committee with representatives from both Houses of Congress is
        then formed. It is the function of the Conference Committee to resolve all differences, but the full House
        and then Senate (in that order) must also vote to approve the Conference Committee Report.  If the
        appropriations bill is rejected by either the full House or Senate, the process  must reconvene  at the
        Conference Committee level again.

    3.  ENACTED APPROPRIATION:     (October)

        Following the House and Senate's passage of the appropriation bill, the bill is "enrolled" and sent to the
        President for signature or veto. The Congressional Budget Act requires completion of the government-
        wide process by October 1.  Currently, there are 12 regular appropriations acts which could be passed
        and enacted annually.  In recent years, Congress has more frequently enacted Omnibus appropriations.
        EPA's appropriations are  part of the Department of the Interior, Environment, and Related Agencies
        Appropriations Act. However, additional appropriation decisions and restrictions applicable to all Federal
        agencies (e.g., annual payroll cost of living increases) are included in the Financial Services and General
        Government Appropriations Act.  Late Congressional action on this later appropriations act may delay
        development of EPA's Enacted Budget.

        All Congressional changes in the Enacted Budget must be reflected in the Agency's Operating Plan (Op
        Plan). Generally, there are adjustments that must be made, as well as specific directions that must be
        followed, such as funding "earmarks" or "add-ons." In some cases, the Administrator may determine in
        the development of the Op Plan that available resources need to be redirected  to meet emerging
        unfunded priorities. Making these decisions and implementing these changes result in the development
        of the Agency's  Enacted Operating Plan, which is then submitted first to OMB for review and then to
        Congress for information.

           a.      CONTINUING RESOLUTIONS / OMNIBUS APPROPRIATIONS/SHUTDOWN:
            If an Agency's annual appropriations act is not enacted by the start of the new fiscal year (October 1),
           the Congress will usually pass  one or more Continuing Resolutions (CR) which  allows agencies to
           continue operations for specific periods of time.  Given the additional time, Congress ultimately
           passes the agency's  annual appropriations act, a CR through the  end of the  fiscal year,  or  an
           Omnibus Appropriations Act covering all agencies whose individual appropriations acts have not been
           enacted. In the absence of either an annual appropriations act or a CR, the Agency faces a shutdown
           situation since EPA lacks the authority to spend any new money. However, if any authority and funds
           are still available for obligation, then a shutdown forthose activities funded by that appropriation does
           not occur.

           b.      SUPPLEMENTAL APPROPRIATIONS:
           During the fiscal year, the President may submit to Congress proposed deficiency and supplemental
           appropriation requests that  he/she  decides are necessary because  of laws  enacted  after the
           submission of the  President's Budget or that are in the public interest (e.g., war, natural disasters).
           Deficiency and supplemental appropriations that the  agencies want to propose themselves are
           submitted to the President through OMB fortransmittal by OMB to Congress.
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    E.  OMB APPORTIONMENTS:        (October)

        Following Congressional enactment of appropriations legislation (including continuing resolutions and
        deficiency or  supplemental appropriations), the Office of Budget (OB) Director at EPA, requests
        apportionments from OMB. Apportionment requests for carryover balances, recovery authority, and
        reimbursable authority do not require legislation but are included in the apportionment request.  In
        accordance with OMB Circular A-11, Part 4 instructions for the Apportionment and Reapportionment of
        funds, OMB Standard Form, (SF-132) or a letter apportionment format is submitted by EPA to make these
        requests.  OMB reviews the request and when satisfied, OMB signifies  approval by  signing  the
        document(s).

        The reason that funding provided by Congress requires apportionment by OMB before it can be accessed
        by agencies is explained as follows:

           Subsection (b) of the Antideficiency Act (ADA), 31 U.S.C. 1513, requires that all appropriations be
           administratively apportioned by the Director of the OMB to ensure their expenditure at  a controlled
           rate which will prevent deficiencies from arising at the end of a fiscal year.

           31 U.S.C.  1512 (b) provides that apportionments need not be made strictly on a monthly, quarterly, or
           other fixed time basis nor must they be for equal amounts in each time  period.  The apportioning
           officer may also consider the "activities, functions, projects, or objects" of the program being funded
           and the usual pattern of spending for such programs in deciding how to apportion the funds.

           Normally, budgetary resources will be apportioned for calendar quarters (Category A apportionments).
           However, periodically OMB has apportioned on an "other than quarterly basis" for activities, projects,
           objects; or for a combination thereof (Category B apportionments). The apportionment requirement is
           designed to prevent an agency from spending its entire appropriation before the end of the fiscal year
           and then putting the Congress in a position in which it must either grant an  additional appropriation or
           allow the entire activity to come to a halt.

        An agency usually does not have the full amount of its appropriation available to it at the beginning of the
        fiscal year.  However, since FY 1995, OMB has apportioned all of EPA's funds in the first quarter. This
        has been transmitted using a revised letter format which apportions all Agency funding. Beginning in FY
        2002,  both the standard apportionment form (SF-132)  and  a one-page apportionment letter format is
        transmitted to OMB electronically. Once an OMB approved SF-132 is on hand  with the Agency, the funds
        can be used.

        Apportionment authority is normally based upon annual obligations anticipated to be incurred. However,
        when it is determined  that obligations and outlays for certain appropriations  can best be controlled at
        some other point before firm obligations are incurred, OMB may agree to apportion on a basis other than
        obligations. At EPA, commitments are the basis for apportionment allocation since that is the
        process for controlling funds prior to obligations that the Agency has adopted and described to
        OMB as part of its funds control system. When quarterly restrictions have applied, they have been
        "front-loaded" (apportioned very heavily in the first and second quarters of the fiscal year) to allow for the
        early commitment of resources that require a lot of lead time and will be obligated later in the year.

        With  regard to carryover funding, for which funds are available  beyond the current fiscal year, new
        apportionment action is required for the new fiscal year unless OMB determines otherwise. For balances
        of prior year budget authority, initial estimated apportionment schedules for the year are due to OMB by
        August 21 each year, as required by law.
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    For more detailed information on Apportionments: See OMB Circular A-11 (Part 4) and/or Chapter 6 of the
    Principles of Federal Appropriation Law for more detailed information on Apportionments.

    F.1.  EPA ALLOTMENTS:     (October)

       OMB apportions all appropriated funds to the EPA, the Office of Budget (OB) Director who serves as the
       Agency's apportionment holder and single allotment holder. The Agency does not have sub-allotments.
       The OB Director retains the original OMB signed apportionment documents on behalf of the Agency. The
       "allotment" is the only formal administrative subdivision of funds under 31  U.S.C. 1514 and 31 U.S.C. 1517
       and is the OB Director's authority to issue "Advices of Allowance " (AOA) to EPA "Allowance Holders"
       (AHs). For more information on AOA, see Chapter 3, part II.

    F.2.  ADVICE of ALLOWANCES:      (November)

        Advices of Allowances (AOAs) are management tools for providing funds to Headquarters Program
        Offices  and Regions  for meeting Agency operational needs. They are not formal sub-allotments  of
        apportionments or administrative divisions of funds for the purposes of 31 U.S.C.  1514 or 1517. Rather,
        AOAs are guidelines  in the nature of an operating budget for Program Offices and Regions to use in
        controlling expenditure pattern. AOAs are made available to the respective Allowance Holders (AHs)
        through the Integrated Financial Management System (IFMS) at the start of the new fiscal year.  IFMS has
        administrative controls to ensure that Allowance Holders do not commit or obligate funds in amounts that
        exceed  the AOA. AOAs are only issued after Congress has passed an appropriations bill, the President
        has enacted it, and an Operating Plan (Op Plan) has been entered into IFMS in support of the Operating
        Plan. The final step shown in FIGURE-1:  Budget Execution (October-September) will be covered at
        length in Chapters.

        In situations where the new fiscal year has begun and the Agency's operating plan has been submitted to
        the appropriation sub-committees staff but (subcommittee has modified), OB will generally load the
        Operating Plan into IFMS and issue the AOA in anticipation of general approval. Controversial budget
        items may be withheld from issuance  by the  OB in  anticipation of pending  coordination with the
        appropriation sub-committees.
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   II.        FEDERAL LAWS AND GUIDANCE

    The following list of guidance documents and legislative acts provide the primary foundation upon which
    government-wide budgeting and accounting is based.

    A.    PRINCIPLES OF FEDERAL APPROPRIATIONS LAW

      This extensive GAO document describes the three concepts of fund availability which are: Purpose, Time,
      and Amount. All three concepts must be observed for the obligation or expenditure to be legal. This three-
      part principle ensures that no money shall be drawn from the Treasury Department but in consequence of
      appropriations made bylaw. Whether appropriated funds are legally available for something depends upon
      the following three tests:

      •     The purpose of the obligation or expenditure must be authorized;

      •     The obligation must occur within the time limits applicable to the appropriation; and

      •     The obligation and expenditure must be within the amounts Congress has established.

      1.  Appropriations as to Purpose:

          31 U.S.C. 1301 (a) provides that public funds may be authorized only for the  purpose or purposes for
          which they were appropriated by the Congress unless the expenditure is otherwise  provided by law.
          The first step in interpreting a statute is to examine the plain meaning of the words in the law itself.  If
          Congress has directly spoken to the precise question, then its unambiguously expressed intent must be
          given effect.  Other indicators of Congressional intent, such  as legislative history, are examined only if
          the plain meaning of the statute is unclear, Committee reports or portions of Committee reports may be
          expressly incorporated into the appropriations act itself and may have the force of  law.  Lump sum
          appropriations may contain little detail on Congressional intent.

          Legislative history includes conference committee reports, Appropriation Committee Reports and floor
          debates.  Conference Committee Reports have the greatest weight since they reflect the views of
          representatives of both houses of Congress and are usually voted on and adopted by both houses when
          appropriations legislation is passed. Appropriations committee reports are next in order of importance,
          followed by floor debates.  Congressional Budget Justifications are not legally binding on the agency but
          are considered to be part of the legislative history.

          Failure of the Agency to adhere to Congressional intent can  have adverse practical consequences for
          the Agency's relationship with the committees.  The Agency, as a matter of policy, generally will act in
          accordance with the views expressed in Conference Reports, ACRs, and other documents that reflect
          legislative history. Where neither the statute  nor the legislative history clearly and unambiguously
          express Congressional intent on an issue, courts will give deference to the Agency's interpretation of a
          statute so long as that interpretation is a permissible and reasonable construction of the statute.

          As further provided in 31 U.S.C. 1301 (a), Agency appropriations contained in the annual Appropriations
          Act must be expended only for the purpose for which an appropriation is made, unless the expenditure
          for a different purpose is otherwise authorized by law. A purpose violation is  not necessarily an ADA
          violation.  The ADA is violated if a purpose violation cannot be corrected because sufficient unobligated
          funds do not  exist during the relevant Fiscal Year (FY) in the correct appropriation account. Further,
          both the Comptroller General (Comp Gen) and the Office  of Legal Counsel, Department of Justice

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          (DOJ) have opined that an expenditure or obligation of appropriated funds fora purpose precluded by
          an express prohibition in an appropriation act itself violates the ADA, because no funds are available for
          that purpose. Moreover, violations of appropriations laws are serious matters which can undermine the
          Agency's working relationship with  the Congress.  Responsible EPA employees may be subject to
          administrative discipline as the penalty for violating 31 U.S.C. 1301. An officer or employee of the U.S
          government knowingly and willfully violating the Anti-Deficiency Act shall face a criminal penalty of being
          "fined not more than $5,000, imprisoned for not more than 2 years, or both".

          TheOLC, U.S. DOJ has opined that 31 U.S.C. ' 3528(b), which purports to authorize the Comp Gen to
          relieve certifying officers from liability, and 31  U.S.C. ' 3529, which purports to authorize the Comp Gen
          to  issue advance opinions on the  legality of  payments, are not consistent with our Constitution's
          separation of legislative and executive powers.  Memorandum for Janis A.  Sposato, GC, Justice
          Management Division, from  John O. McGinnis, Deputy Assistant Attorney General, OLC (August 5,
          1991) (McGinnis Memo).  OLC is responsible for providing legal advice to the President and the heads
          of Executive departments and agencies. Its decisions are binding on Executive Agencies unless a court
          rules otherwise.  Nonetheless, OLC  has also determined that Comp Gen decisions are "useful sources"
          in resolving appropriation  law issues  and  EPA may follow Comp Gen opinions unless the  Office of
          General Counsel (OGC) advises otherwise.  See Memorandum for Emily C. Hewitt, General Counsel,
          General Services Administration (GSA) from Richard L. Shiffrin, Deputy Assistant Attorney  General,
          OLC  (August 11, 1997)]

          While certain funding  levels  and limitations may be  included in authorizing  legislation, appropriation
          legislation will generally control the  disposition of an issue where the appropriations act itself clearly
          demonstrates Congressional intention to depart from funding levels or limitations  in the authorizing
          legislation.  Nonetheless,  the authorizing act  and appropriations act should  be harmonized to the
          greatest extent possible. The authorizing legislation and the appropriation go hand in hand to  establish
          a mandate for environmental action followed by the funds to carry out the mandate.

          Since it is not possible to specify every item  for which appropriations will be expended within the
          appropriations act, particularly if it is a lump sum appropriation, the spending agency has reasonable
          discretion in determining how to carry out the objectives of the appropriation. Some of the specific
          program results code  (PRC) activities for which the Agency has justified funding are found under the
          goals and objectives portions of the CBJ. These funding declarations become a part of the legislative
          history to the annual Appropriations Act.

          Additionally, other costs that are undeclared but necessary in  implementing Agency programs are
          incurred based on the "Necessary  Expense Rule".

          For an expenditure to  be justified as a necessary expense, three tests must be met:

          •  The expenditure must bear a logical relationship to the appropriation sought to be charged. In other
             words,  it must make  a  direct contribution  to carrying out  either a specific appropriation or an
             authorized agency function for which more general appropriations are available.

          •  The expenditure must not be prohibited by law.

          •  The expenditure must not be otherwise provided for, that is,  it must not be an item that falls within
             the scope of some other appropriation or statutory funding scheme.
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          Additionally, for an expenditure to be justified as meeting the purpose of a particular appropriation, it is
          important to know whether or  not the  action is funding something from  one appropriation that
          traditionally may have been funded from a different appropriation. In 59 Comp. Gen 518 (1980), GAO
          opined that:

          "Where either of two appropriations may reasonably be construed as available for expenditures not
          specifically mentioned under either appropriation, the determination of the agency as to which of the two
          appropriations to use will not be questioned. However, once the election has been made, the continued
          use of the appropriation selected to the exclusion of any other for the same purpose is required. @
          This case involved separate EPA lump-sum appropriations for "Research and Development (R&D)" and
          "Abatement and Control (A&C)."  The contract in question,  entered into in 1975, could arguably have
          been charged to either appropriation, but EPA had elected to charge itto R&D.  Applying the above rule,
          the Comp Gen concluded that a 1979 modification to the contract had to be charged to R&D funds, and
          that the A&C appropriation could not be used. This case should not be read as limiting the rule to a
          particular contract, grant, or other transaction.]

          This concept has become known throughout the Federal Government as the "Pick and Stick" rule.
          Basically, the Agency may make an initial election as to which appropriation to use (the "Pick"), but once
          the decision has been made the Agency must "Stick" to its choice, and the Agency cannot, because of
          insufficient funds  or  other reasons, change its  election in a subsequent FY and  use another
          appropriation unless Congress is first informed of the Agency's  planned change.

      2.  Appropriations as to Time:

          The placing  of  time  limits on the availability of appropriations is  one of  the primary means of
          congressional control. By imposing a time  limit,  Congress reserves the prerogative of periodically
          reviewing a given program or agency's activities.

          The life cycle of appropriations.   The life-cycle of appropriations with  fixed periods  of availability
          consists of three (3) sequential phases: the Unexpired Phase, the Expired Phase, and the Cancelled
          Phase. When an appropriation is made available for a fixed period of time, the general rule is that the
          availability relates to  the authority to obligate the appropriation.  It  does not  necessarily prohibit
          payments after the expiration date for obligations previously incurred, unless the payment is otherwise
          expressly prohibited by statute.  The availability of balances of appropriations to  incur, adjust, or pay
          obligations differs in each phase.

          Statutory and regulatory changes (Federal Acquisition Streamlining Act (FASA) of 1994 section 1073,
          and Federal Acquisition Regulation (FAR) 37.106), now permit agencies to enter into a  contract,
          exercise an option or issue a delivery order and obligate annual  ("one year") appropriations to acquire
          severable services that begin in  one fiscal year and end  in the next fiscal year. The contract, option
          period or delivery order cannot exceed 12 months.  The  EPA Office of General Counsel (OGC) has
          opined that these provisions also apply to acquisitions funded with multi-year appropriations (such as
          "two-year" appropriations provided to EPA).  What this means, for example, is that EPA may obligate
          FY2004/2005 funding to fund twelve months severable  services that begin  in FY 2005 and end  in
          FY2006. [Severable services are those which are continuing and recurring in nature  (such as window
          washing services), while  non-severable services  are those  that are  characterized  as  a single
          undertaking (conducting a study and preparing a final report thereon).  Non-severable services may be
          charged to  the appropriation current at  the time the contract was made, even though performance
          carries over into a subsequent fiscal year.]


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          a.   The Unexpired Phase. During this phase, the appropriation may be used to incur new obligations
              and to liquidate (pay) properly incurred existing obligations. Balances in this phase are unexpired
              and uncancelled.

            b.   The Expired Phase.  The  expired phase begins when the authority to incur new obligations
                against appropriations expires. For annual appropriations this occurs at the end of the fiscal year
                for which the funds are appropriated. For multi-year appropriations this occurs at the end of the
                last  fiscal year for which the funds are  appropriated.  During the expired phase, no new
                obligations can be incurred against the appropriation.  Expired balances of an appropriation are
                available for the following:

               Expired obligated balances  are available to  liquidate obligations properly incurred during the
               period when the appropriation was unexpired.

               Expired unobligated balances are available  only to satisfy an unrecorded or under recorded
               obligation properly chargeable  to the appropriation of that particular year, and cannot be used to
               satisfy an obligation properly chargeable to current appropriations, or to any other year of the five-
               year period.

                Unless otherwise specified by law, the Expired Phase lasts for five (5) years after the period for
                which the appropriation was available for new obligations. All audit requirements, limitations on
                obligations, and reporting requirements  applicable to  an appropriation in the  Unexpired Phase
                continue to apply in the Expired Phase.  EPA requested and received statutory authority for the
                Expired Phase to  last  for seven (7) years  after the period for which  the appropriation was
                available for  new obligations  (P.L. 105-276  and P.L. 106-377). This statutory authority was
                granted to start with two-year appropriations  beginning in FY 1999 (i.e., FY1999/2000 funding).
                Two-year appropriations enacted prior to FY 1999 continue to have an Expired  Phase for 5 years.

            c.  The  Cancelled Phase. At the end of the expired phase, all obligated and unobligated balances
                must be cancelled, and the account is closed. Cancelled balances may not be used to incur or
                pay obligations. Collections  authorized or required to be credited to a cancelled appropriation that
                are received  after the  account is closed must be deposited in the Treasury as miscellaneous
                receipts.

                (For more information regarding the Expired  and Cancelled Phase, see section G, "M" Account
                legislation in this Chapter).

          One of the fundamental principles of appropriations law is the "bonafide needs rule" which says that a
          fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in
          some cases  arising prior to but continuing to exist  in, the time period for which the appropriation was
          made. A good example of the bonafide rule is when ordering supplies at the end of a FY. An order or
          contract for the replacement of stock is viewed as  meeting a bona fide need of the year in which the
          contract is made as long as it is intended  to  replace stock used in that year,  even though the
          replacement items will not be used unit the  following  year. Stock in this context refers to 'readily
          available common-use standard items. There are limits, however, GAO has questioned the validity
          from the bona fide needs  perspective, of the purchase of materials carried in stock for more than a year
          prior to the issuance for use (See  GAO Decision B-134277, Dec 18, 1957).

          EPA appropriations are of three term types: annual, multi-year, and no-year (these three types are
          covered in more detail in  Part III.B of this Chapter).

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          a.  One-Year appropriations are available only to meet a bona fide need of the fiscal year for which they
             were appropriated. As of FY 2004, EPA has no one-year appropriations.]

          b.  Multi-year appropriations  are subject to the same bona fide  need rule applicable to annual
             appropriations, apart from the extended period of availability,

          c.  No-year appropriations are available for obligation to satisfy a need arising during the year of and
             subsequent to the no-year appropriation. No-year funds may be obligated for needs arising in: (a)
             the year the no-year funds were appropriated; (b)  years subsequent to the year of the no-year
             appropriation. Prior year(s) obligations cannot be paid with future year no-year appropriations for
             such a payment would violate the ADA prohibition against obligations or expenditures in advance of
             an appropriation unless authorized by law.

          Based on advice from OLC, EPA's OGC has advised that the "bona fide needs rule" does not apply to
          payments made to financial assistance recipients from funds obligated in a previous fiscal year. The
          bona fide need for a  grant or cooperative  agreement arises in the fiscal year in which funding is
          obligated to meet the authorized public purpose of the grant or cooperative agreement.]

     3.   Appropriations as to Amount:

          The third major element of the concept of the "legal availability" of appropriations is restrictions relating
          to amount.  It is not enough to know what you can spend appropriated funds for and when you can
          spend them. You must also know how much you have  available for a particular activity.

          The Antidefiency Act  (ADA) is one of the  major laws in the statutory pattern  by which Congress
          exercises its constitutional control  of the  public purse.   It has been  termed  the  cornerstone of
          Congressional efforts to bind  the Executive branch of government to the  limits on expenditure of
          appropriated funds.

          Briefly, in  its current form, the Antideficiency Act (ADA)  prohibits:

          •   obligation or expenditure in excess of appropriations;

          •   obligation or expenditure in advance of appropriations unless authorized by law;

          •   accepting voluntary services for the United States exceeding that authorized  by law; and

          •   obligation or expenditure in excess of apportionments or administrative divisions of apportionments.

          The Antideficiency Act (ADA) is described in greater detail in Chapter 4 (Section A) including reporting
          violations and both civil and criminal penalties for violation.

     B.    BUDGET AND ACCOUNTING ACT (BAA)  of 1921 and
          SUPPLEMENTAL APPROPRIATIONS ACT OF 1955

      The Budget and Accounting  Act of 1921 and Supplemental Act of  1955 provide the budget and
      appropriations authority of the  President, budget contents and submissions to Congress, supplemental
      appropriations, and advances.  The specific requirements for recording obligations such as documentary
      evidence, is provided by 31 U.S.C. 1501.


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    C.    ECONOMY ACT (1958)

      It is not uncommon for federal agencies to provide goods or services to other federal agencies.  The
      Economy Act authorizes agencies to obtain services either directly or through contracts awarded by other
      agencies when it promotes economy and efficiency for the government.  Examples of when the another
      federal agency enters into an Inter-Agency agreement with EPA (a.k.a. an IAG) is when the U.S. Coast
      Guard contracts with EPA to assist them in oil spills, or when the Federal Emergency Management Agency
      (FEMA) needs the Agency's help with planning for and reacting to an emergency.  lAGs also work in the
      opposite direction whereby EPA may give contract with another agency  (e.g., EPA contracting with the
      Department of Health and Human Services (DHHS) for a study on health-related issues). Both agencies
      must have the authority for the underlying activities proposed in the  agreement.

      An Economy Act agreement may not exceed the period of availability of the source appropriation.  In
      addition, a one-year appropriation obligated under an Economy Act agreement must be deobligated at the
      end of that fiscal year if the performing agency has not performed or incurred valid obligations under the
      agreement. In the case  of  a multi-year  appropriation, this rule applies at the end of the source
      appropriation's period of availability. The reason for this requirement is to prevent the Economy Act from
      being used to extend the life of an appropriation beyond that provided by Congress in an appropriations act.

    D.    CONGRESSIONAL BUDGET IMPOUNDMENT and CONTROL ACT (1974)

      Under this Act, an impoundment is defined as an action or inaction by an officer or employee of the United
      States that precludes the  obligation or expenditure of budget authority provided by Congress.

      There are two types of impoundment actions: deferrals and rescissions. A deferral is a postponement of
      budget authority in the sense that an agency temporarily withholds or delays an obligation or expenditure.
      Deferrals may be proposed by agencies but must be communicated to the Congress by the President in a
      special message. Deferred budget authority may not be withheld from obligation unless legislation is passed
      by Congress to approve the deferral and the legislation is enacted by the President. A rescission involves
      the cancellation of budget authority previously provided by law (before that authority would otherwise expire)
      and can be accomplished only through subsequent law.

      If a federal agency fails to obligate appropriated funds, the Comp Gen is authorized by 2 U.S.C. 682 to bring
      a civil action against that agency. The expiration of budget authority or delays in obligating it resulting from
      a legitimate programmatic delay or ineffective or unwise program administration are not regarded as
      impoundment unless accompanied by or derived from an intention to withhold funds.

    E.     FEDERAL MANAGER'S FINANCIAL INTEGRITY ACT (FMFIA) (1982)

      The Federal Manager's Financial Integrity Act (FMFIA) is designed to:

      •    protect government resources from fraud, waste, abuse or mismanagement;

      •    require systematic self-examination of management controls by program managers; and

      •    require agency heads to report annually to the President and Congress on the state of management
           control systems, identify material management control weaknesses, and provide corrective action
           plans and milestones.

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      The Act requires the establishment of systems of internal accounting and administrative controls, according
      to standards prescribed by the Comp Gen , which provide reasonable assurance that:

      •     obligations and costs are in compliance with applicable law;

      •   funds,  property,  and other  assets  are safeguarded against waste, loss, unauthorized use  or
          misappropriation; and

      •   agency revenues and expenditures are properly recorded and accounted forto permit the preparation of
          accounts and reliable financial and statistical reports, and to maintain accountability over assets. The
          agency's annual report must provide a separate statement of whetherthe agency's accounting system
          conforms to the principles, standards and  related requirements prescribed by the Comp Gen under
          Section 112 of the Accounting and Auditing Act of 1950.

      OMB Circular A-123 establishes broad  guidelines for agency self-evaluation of management control
      systems.

    F.    CHIEF FINANCIAL OFFICERS ACT (CFO) (1990)

      The Chief Financial Officers (CFO Act) of 1990 requires 23 federal departments and agencies to prepare
      and audit financial statements for Trust Funds, Revolving Funds, and commercial activities accounts.

      Chief Financial  Officers (CFOs) are designated by each  federal department or agency and  have the
      fundamental responsibility to assure that its use of public funds adheres to the terms  of the pertinent
      authorization and appropriations acts, as well as any other relevant statutory provisions. The Office of Chief
      Financial Officer (OCFO) is the CFO for the Agency.

    G.      "M" ACCOUNT LEGISLATION

      The National Defense Authorization  Act (NDAA) of 1990 amended controls on the  availability  of
      appropriation accounts and the procedures for closing appropriation accounts. (31 U.S.C. 1551-57). The Act
      cancelled all merged ("M" account) surplus authority (unobligated balances in expired appropriations) as of
      December 5, 1990.  The Act also  requires that, from 1990 on, unobligated balances & unliquidated
      obligations will be cancelled for five (5) years after an appropriation has expired, and then  that account will
      be closed  out.

      EPA has an exception to this time period.  EPA requested and received special statutory  authority for this
      phase to last for seven years after the period  for which the appropriation was made available for new
      obligations (P.L.  105-275 and P.L. 106-377). This special  authority started with two-year appropriations
      beginning  in FY  1999 (i.e. FY 1999/2000 funding). Two-year appropriations enacted prior to FY 1999
      continue to be cancelled 5 years  after its expiration.]

      After  an appropriation account has been cancelled (i.e.,  closed) out, bills received against cancelled
      obligations must be paid from current appropriations available for the same purpose. The total amount of
      charges to a current appropriation account may not exceed 1 % of the total appropriations for that account.
      OMB Bulletin 91-07, which implements this legislation, requires Federal agencies to have available up to 1%
      of their  current year appropriations  to liquidate any liabilities that arise from accounts  that have been
      cancelled. Should a payment be needed that exceeds the 1 % funding availability, the Agency must go back
      to Congress, and request a supplemental appropriation.

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    H.    GOVERNMENT PERFORMANCE AND RESULTS ACT (GPRA) (1993)

      An outgrowth of the CFO Act, GPRA requires the head of each agency to submit to the Director of The
      Office of Management and Budget (OMB) and to Congress a strategic plan for its program activities.  The
      plan shall contain:

      •    a comprehensive mission statement covering the major functions and operations of the agency;

      •    general goals and objectives, including outcome-related goals and objectives, forthe major functions
           and operations of the agency;

      •    a description of how the goals and objectives are to be achieved,  including a  description of the
           operational processes, skills and  technology, and the  human, capital,  information, and other
           resources required to meet those goals and objectives;

      •    an a description of how the performance goals included in the plan required by 31 U.S.C. 1115(a) of
           Title 31 shall be related to the general goals and objectives in the strategic plan;

      •    identification of those key factors external to the agency and beyond its control that could significantly
           affect the achievement of the general goals and objectives; and

      •    a description of the program evaluations used in establishing or revising general goals and objectives,
           with a schedule for future program evaluations.

      GPRA requires EPA to report each year on progress towards achieving annual, strategic goals. Annual
      Performance Reports, which assess Agency accomplishments against annual performance goals and
      measures, are due to Congress six months after the end of each fiscal year. EPA submitted its first Annual
      Performance Report to Congress on March 30, 2000, using performance data submitted by states, tribes,
      regions, and national programs.  EPA now submits its annual performance report with the annual financial
      statement which  is called the Performance Assessment Report (PAR).  EPA managers will be able to
      consider these performance results together with cost/benefit and risk assessment/risk management
      information, and  financial  data, to help them evaluate and adjust strategies, program directions,  and
      resource allocations to achieve EPA's strategic goals.

    I.     OMB CIRCULAR A-11 (PART 2)1 PREPARATION & SUBMISSION OF BUDGET ESTIMATES

      Government-wide requirements and guidance on the preparation and submission of Federal  Budgets are
      contained in OMB Circular A-11. Contents include: policies, instructions for building the budget data base
      and preparing the budget documents, requirements to provide supporting data forthe budget, and forthe
      transmittal of the budget.

      In relation to budget formulation, A-11  requires  agencies report costs in terms of  Object Classification,
      defined in Part II of the Circular.  Object Classification is  used to  report obligations for each account
      according to the nature of the goods and services procured. Obligations are categorized by their purpose
      and are designated to  one of the following groupings:  Personnel Compensation and Benefits (PC&B);
      Contractual Services and Supplies; Acquisition of Capital Assets; Grants and Fixed Charges; and Other.
      These classifications tie into RMDS 2590 Part IV which includes all of EPA's sub-object class codes and
      definitions.  This will be discussed in more detail in Chapter 3.
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    J.    OMB CIRCULAR A-11 (PART4)/ INSTRUCTIONS ON BUDGET EXECUTION

      Government-wide requirements and guidance regarding budget execution are contained in OMB Circular A-
      11 (Part 4). Contents include guidance on: requirements and instructions, concepts, agency accounting and
      fund control systems, reports on budget execution, apportionments, rescissions and deferrals, etc.
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   III.       EPA LEGISLATION

    A.    AUTHORIZING LEGISLATION

      EPA's management  and administrative functions are provided for by "enabling  legislation".   Our
      environmental programs are legislated  by Acts of Congress in the  form  of authorizing (or program')
      legislation. Authorizing legislation provides zero funding in and of itself: it is not an appropriation of funds.
      For EPA, authorizing legislation establishes the Agency's environmental mission that may be undertaken
      with funds provided by subsequent appropriations legislation.

      1.  Clean Air Act (CAA)

          The Clean Air Act (CAA) is intended to foster the protection and enhancement of the nation's air quality,
          and to safeguard  public health and welfare and the productive capacity of the population. The Act is
          divided into six titles:

          •  Title I includes provisions for setting and achieving ambient air quality standards, and requirements to
          control pollution from certain stationary sources;

          •  Title II deals with control of pollution from mobile sources;

          •  Title III addresses general and administrative matters;

          •  Title IV deals with requirements to  control pollution that leads to  acid deposition;

          •  Title V includes  requirements for the issuance of operating permits for certain stationary sources; and

          •  Title VI deals with pollution that contributes to depletion of the stratospheric ozone layer.

          The Act requires  EPA to promulgate National Ambient Air  Quality Standards (NAAQS) for certain
          pollutants to protect the public health and welfare.

       2.  Federal Water Pollution  Control Act (FWPCA) of 1948

          Clean Water Act (CWA)  1972

          Water Quality Act (WQA) of 1987

          Beaches  Environmental Assessment & Coastal Health Act of 2000

          The Federal Water Pollution Control Act (FWPCA), 33 U.S.C.A. 7251 etseq., originally enacted in 1948,
          was amended in 1956 and 1966 to authorize a program of grants to municipalities for construction of
          sewage treatment plants  and institute a program of mandatory water quality standards for interstate
          waters. The Act was substantially revised in 1972 by amendments  referred to as the Clean Water Act
          (CWA).  The stated objective of the CWA is to restore and maintain the "chemical, physical, and
          biological  integrity of the Nation's waters", and the goal is to achieve "fishable and swimmable" waters
          by 1983 and total elimination of pollutant discharges  into navigable waters. The CWA spells out
          requirements for water quality standards and an implementation system of permits for technology-based
          effluent limitations that apply to industrial and municipal discharges. Congress made certain fine-tuning


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          amendments of the CWA in 1977 and reauthorized and revised the construction grants program in
          1981.

          The Water Quality Act of 1987 (WQA) brought major revisions to the CWA. It authorized new water
          quality programs, reauthorized existing programs, and called for EPA to supplement technology-based
          controls with water quality-based pollution controls.  The WQA increased requirements pertaining to
          toxics, sludge, and non-point sources of pollution and authorized funds for Nonpoint Source grants, the
          National Estuary Program, and the Great Lakes and Chesapeake Bay programs. The WQA also
          reauthorized the construction  grants program through 1990 and provided for its phase-out and
          replacement with a State Revolving Fund (SRF) program, to be capitalized bygrantstothe States. The
          Beaches Environmental Assessment & Coastal Health (BEACH) Act of 2000 amends the CWA to
          improve the quality of coastal recreation waters. This Act authorizes a national program grant to assist
          state, tribal, and local governments in developing and implementing monitoring and public notification
          programs for their coastal recreation waters.  It also requires states to adopt improved water quality
          standards for pathogens and pathogen indicators and requires EPA to conduct studies and develop
          improved microbiological water quality criteria guidance.

      3.   Marine Protection. Research, and Sanctuaries Act of 1972 (MPRSA)

          Unless authorized  by  a permit, the Marine Protection, Research, and Sanctuaries Act (MPRSA)
          generally prohibits (1) the transportation of material from the  United States for the purpose of ocean
          dumping; (2) the transportation of material from any location for the purpose of ocean dumping by U.S.
          agencies or U.S.-flagged vessels; and (3) the dumping of material transported from outside the United
          States into the U.S. territorial sea ( MPRSA  ' 101). Permits under the  MPRSA may not be issued for
          the dumping of sewage sludge or industrial waste (MPRSA '  104B(a)); or radiological, chemical, and
          biological warfare agents; high-level radioactive waste; or medical waste (MPRSA ' 102(a)).  The
          dumping at sea of low-level radioactive waste requires a joint resolution of Congress.  (MPRSA '
          104(i)). Permits may be issued for other materials if the dumping will not unreasonably degrade or
          endanger human health, welfare, or the marine environment (MPRSA  ' 102 (a) and 103(a)). EPA is
          charged with developing criteria to be used in evaluating applications for ocean dumping  permits
          (MPRSA ' 102(a)).  EPA also is responsible for designating recommended sites for ocean dumping
          (MPRSA ' 102(c)). EPA is the permitting authority for all materials except dredged material (MPRSA '
          102(a)). The U.S .Army Corps of Engineers is the permitting authority for dredged material, subject to
          EPA concurrence and the use of the ocean dumping criteria developed by EPA (MPRSA ' 103).

       4.  Safe Drinking Water Act (SDWA) 1974

          The Safe Drinking Water Act (SDWA) as amended in 1986 and 1996 is the basis for protecting drinking
          water systems that serve the public. The Act directs the Administrator of EPA to establish  primary
          (enforceable) and secondary (advisory)  National Drinking Water regulations  based on maximum
          contaminant levels  of specific pollutants,  provides for state enforcement  of the requirements,
          establishes a program for protection of underground sources of drinking water, and provides for a State
          Revolving Fund to aid systems in carrying out the Act.

       5.  Solid Waste Disposal Act (SWDA)

          Resource Conservation and Recovery Act (RCRA) 1976

          Hazardous and Solid Waste Amendments (HSWA) of 1984

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          The Solid Waste Disposal Act (as amended by the Resource Conservation and Recovery Act (RCRA)
          and the Hazardous and Solid Waste Amendments of 1984), is commonly known as "RCRA." The
          statute is intended to address the health and environmental dangers arising from the generation,
          management and  disposal  of solid  and hazardous wastes. Subtitle  C of RCRA provides for
          comprehensive  "cradle-to-grave" regulation of hazardous wastes:  owners or operators of hazardous
          waste treatment, storage or disposal facilities must obtain a permit to operate, and must meet standards
          appropriate to the type of unit managing the waste; hazardous wastes must be treated prior to land
          disposal; and off-site movements of hazardous wastes must be accompanied by a document known as
          a "manifest." The requirement for a manifest applies from the waste's point of generation to its point of
          final treatment or disposal, and helps ensure that wastes are not discarded indiscriminately in the
          environment by  listing precise origin, volume, and amounts of each waste. Although much of RCRA is
          focused on the  current and  future management of hazardous wastes, the statute also  includes a
          significant cleanup program:  e.g., owner/operators seeking an operating permit are required to clean up
          past releases of hazardous wastes and constituents at their facility in order to obtain a  permit.  In
          addition, RCRA Subtitle D establishes a largely State-administered program for the management of
          solid, non-hazardous wastes.

      6.   Comprehensive Environmental Response. Compensation and Liability Act (CERCLA) of 1980

          Superfund Amendments and Reauthorization Act (SARA) of 1986

          Emergency Planning and Community Right-to-Know Act (EPCRA) of 1986

          Small Business Liability Relief and Brownfields Revitalization Act of 2002

          The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), (42 U.S.C.
          9601 et sea.), enacted in 1980, was amended and reauthorized for five years  by the  Superfund
          Amendments and Reauthorization Act of 1986 (SARA). CERCLA  as amended by SARA charges the
          Agency with the responsibility for providing emergency response for hazardous substances released
          into the environment and the cleanup of inactive or abandoned hazardous waste disposal sites. The
          Agency is authorized under SARA to respond to releases of hazardous substances, pollutants, and
          contaminants by either a removal or remedial action or by compelling responsible parties to undertake
          the response action. The reauthorized statute significantly broadened Superfund (SF) authorities in key
          response,  enforcement, and research areas.   It established cleanup  standards  and  mandatory
          schedules to ensure rapid and permanent solutions in cleaning up sites. It contained new and stronger
          enforcement provisions to encourage  expeditious  settlements  with responsible  parties,  and to
          implement a more formal cleanup process for Federal facilities.  It significantly increased SF health
          related and research and development authorities, including provisions for an alternative treatment
          demonstration program and  health effects research. Overall, the statute expands State and public
          participation at all stages of the cleanup process. A subpart of SARA Title III, the national "Emergency
          Planning and Community Right-to-Know" Act (EPCRA) was signed into law October 17,1986 as the key
          legislation of community safety. Congress enacted this law to help local communities protect public
          health, safety, and the environment from chemical hazards. Two of the main goals of EPCRA are to
          "provide a basis for each community to develop a chemical emergency preparedness and planning
          program that suits its individual  needs," and "provide the public with the identity, quantity, location, and
          properties of hazardous substances in the community, as well as data on annual release of certain
          chemicals into the environment."

          SARA also amends Subtitle I of the Hazardous and Solid Waste Amendments (HSWA) and authorizes
          the establishment of a Leaking Underground Storage Tank (LUST) Trust Fund to clean up releases
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          from  leaking underground petroleum storage tanks. The LUST Trust Fund is financed by taxes on
          motor fuels. Owners and/or operators are initially responsible for cleanup of their leaking tanks. At
          abandoned sites or at sites where owners/operators do not meet their cleanup responsibilities, the Trust
          Fund (TF) provides the resources for EPA or States to undertake or enforce necessary corrective action
          and to recover costs expended from the fund. EPA's objective is to implement this program primarily
          through cooperative agreements with States. To this end, the Agency will only undertake corrective
          action when an owner/operator or a State fails to respond to a substantial threat to human health and
          the environment.

          The Small Business Liability Relief and Brownfields Revitalization Act (SBLRBRA) was signed into law
          on January 11, 2002.  It amends CERCLA to encourage cleanup and reuse of brownfields and other
          contaminated properties.  The law  establishes a statutory Brownfields program, clarifies Superfund
          liability for  certain parties as well as the State and  Federal roles in hazardous waste cleanup. The
          Brownfields program includes grants for assessment, cleanup, capitalizing cleanup revolving loan funds,
          State and Tribal response programs, and training, research, and technical assistance.

      7. Energy Policy Act of 2005

          The Energy  Policy Act  of 2005 was signed into  law on August 8, 2005 as part of the Federal
          government's efforts to stimulate development and use of more  efficient and environmentally friendly
          domestic energy sources. As part of this new law, the Environmental Protection Agency was authorized
          under Title VII to reduce vehicle emissions by enhancing the development of clean school bus fleets.
          EPA was required to develop fuel regulations, revise emission models, undertake fuel related studies
          and analyses,  and expand its retrofit  program for diesel powered school buses.  EPA was also
          authorized under Title XV, Subtitle Bto make major changes to its Leaking Underground Storage Tanks
          Program to further reduce underground storage tank releases to the environment.  It also authorized
          EPA to develop new inspection  requirements and provide grants with LUST trust fund money to the
          states to expand their inspections of leaking underground storage tanks.  EPA was authorized under
          this new Act to provide grants for  compliance assistance to owners and  operator of underground
          storage tanks and enforce fuel standards.

      8.  Federal Insecticide. Fungicide and Rodenticide Act (FIFRA) 1972

          The Federal  Insecticide, Fungicide  and Rodenticide Act (FIFRA) of 1972 requires that all pesticides,
          with minor exceptions, must be registered with EPA before they can be sold or distributed in commerce.
          Pesticide products can be registered only if they can be  shown not to cause unreasonable adverse
          effects on humans orthe environment. As part of the registration process, scientific data and proposed
          label instructions for use and cautionary statements are submitted by registrants and reviewed by EPA
          to ensure that when registered products are used in accordance with label instructions they will be safe.
          FIFRA also provides that EPA can designate the more dangerous pesticide products for restricted  use
          by certified applicators only.

      9.  Food Quality Protection Act (FQPA) of 1996

          The Food Quality Protection Act (FQPA) amends two pesticide-related statutes: the Federal Insecticide,
          Fungicide,  and Rodenticide Act and the Federal Food, Drug, and Cosmetic Act. The new law corrects
          the so-called "Delaney clause", replacing it with a protective and more consistent regulatory system that
          applies a uniform health-based standard for pesticide residue tolerances in raw and processed food.
          EPA can approve a tolerance only if it is considered safe, and the law defines safe as "a reasonable
          certainty of no harm." The Act also makes children's health a primary concern in assessing pesticide
          tolerances.  If a pesticide  residue will be unsafe for children, it will not be permitted on food. New
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          pesticide/use applications that meet the reduced risk criteria will be expedited. Another provision of the
          Act directs that consumers will have a right to know about pesticide residues found in the food they buy
          at the grocery store. The law also mandates a revamping and modernization of the pesticide review
          system in light of the new safety standard. The statute also requires EPA to reevaluate all existing
          pesticide tolerances within 10 years. The reviews will give the  public greater assurance that only
          pesticides that meet strict and current safety standards can remain on the market.

      10. Toxic Substances Control Act (TSCA) of 1976

          The Toxic Substances Control Act (TSCA) of 1976 was  enacted by Congress to test, regulate and
          screen all chemicals produced in or imported into the U.S.  Many thousands of chemicals and chemical
          compounds are developed  each  year  with  unknown toxic characteristics. To  prevent tragic
          consequences should they come in contact with the general public, TSCA requires that any chemical
          which reaches the consumer marketplace be tested for possible toxic effects prior to first commercial
          manufacture.

          Any existing chemical which is determined to pose unreasonable health and environmental hazards is
          also regulated under TSCA (example: polychlorinated biphenyls (PCBs) are controlled under TSCA).
          Procedures are also authorized for corrective action under TSCA in cases of cleanup of toxic materials
          contamination.

      11. Radon Abatement Act of 1988

          In October 1988 Congress amended TSCA by adding Title Ill-Indoor Radon Abatement (15 U.S.C. 2661
          etseq., P.L. 100-551). The basic purpose of Title III is to provide financial and technical assistance to
          the States that choose to support radon monitoring and control; neither monitoring nor abatement of
          radon is required by the Act.

      12. The National Environmental Policy Act (NEPA) (1969)

          The National Environmental Policy Act (NEPA) establishes a broad national framework for assessing
          the environmental impacts of major federal actions that significantly affect the quality of the human
          environment. NEPA has two major objectives:  To prevent damage to the environment and to ensure
          that federal agency decision makers give appropriate consideration and weight to environmental factors
          before taking any major federal action that significantly affects the quality of the human environment.
          NEPA also  established  the Council of Environmental Quality (CEQ) to advise  the  President  on
          environmental matters. CEQ promulgated regulations implementing section 102(2) of NEPA.  Under
          NEPA and the CEQ  regulations, unless an action is categorically excluded,  agencies conduct an
          environmental review in the form of an Environmental Assessment or Environmental Impact Statement
          (EIS), as appropriate. These documents, analyze the environmental impacts of and alternatives to the
          proposed action. Most of EPA's actions are not subject to NEPA because either they are statutorily
          exempt from NEPA or functionally equivalent to NEPA. EPA actions that are subject to NEPA include
          issuance of National Pollutant Discharge Elimination System (NPDES) permits for new sources under
          the CWA, award of grants for certain projects funded through  EPA's annual Appropriations Acts,
          research and development activities, and facilities construction.  EPA has adopted  a voluntary NEPA
          policy under which EPA may prepare NEPA documents voluntarily when it is not legally required to do
          so if such documents would be beneficial in addressing agency actions. In addition,  in  conjunction with
          other statutes,  NEPA generally provides  authority for EPA to conduct international environmental
          activities.
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      13. Pollution Prevention Act (PPA) of 1990

          The Pollution Prevention Act (PPA) of 1990 requires the  EPA to establish an Office of Pollution
          Prevention to develop and coordinate a pollution prevention strategy, and develop source reduction
          models. In addition to authorizing data collection on pollution prevention, the Act requires owners and
          operators of facilities required to file an annual toxic release form under section 313 of EPCRAto report
          annually on source reduction and recycling activities.

          Enactment of the Pollution Prevention Act (PPA) of 1990 marked a majorturning point in the direction of
          U.S.  environmental protection  policy.   From  an  earlier focus on the need  to reduce or  repair
          environmental damage by controlling pollutants at the point where they are released to the environment-
          -i.e., at the "end of the pipe" or smokestack, at the  boundary of a polluter's private property, in transit
          over public highways and waterways, or after disposal-Congress turned to pollution prevention through
          reduced generation of pollutants at their point of origin.  Broad support forthis policy change was based
          on the notion that traditional approaches to pollution control had achieved progress but should in the
          future be supplemented with new approaches that might better address methods of controlling pollution
          from dispersed or non-point sources of pollution. Pollution prevention, in the form of "source reduction,"
          is viewed as the first step in a hierarchy of options to reduce risks to human health and the environment.
          Where  source  reduction is  not possible or may not be cost effective, other options would include
          recycling, followed next by waste treatment according to environmental standards, and as a last resort,
          safe disposal of waste residues.

      14. Oil Pollution Act of 1990

          The Oil Pollution Act (OPA) legislation significantly increases the spiller's liability for oil spill cleanup
          costs and damages, imposing stiffer civil and criminal penalties. Spillers are required to pay oil spill
          cleanup costs and to compensate parties economically injured by them. Additional money for cleanup
          and compensation is to be available through the Oil Spill Liability Trust Fund (OSLTF) managed by the
          U.S. Coast Guard. This fund is supported by an oil tax, but subject to annual appropriations. The fund
          is to be used by the federal government for removal costs, monitoring, administrative, operational and
          personnel costs for implementation and enforcement of the  Act.

          The Act also requires double hulls on most oil tankers and  barges, and requires better contingency
          planning on the part of potential spillers and federal, state, and local governments. The Act continues to
          allow states to impose unlimited  liability  on shippers and  contains various provisions to increase
          navigation safety. The Act also expands research on environmental impacts and cleanup methods of
          spills and expands the President's power to direct oil spill cleanups.

      15. Inspector General Act of 1978

          The Inspector General Act requires the Inspector General (IG) to conduct and supervise independent
          and objective audits and other reviews relating to agency programs and operations (including contracts,
          grants,  and acquisition management, financial transactions, funds control, and  financial statements).
          The IG also makes recommendations to promote economy, efficiency, and effectiveness; prevents and
          detects fraud, waste, and abuse; and keeps agency heads and the Congress fully and currently
          informed of problems.  The EPA OIG conducts and promotes program evaluations of EPA programs
          and activities (including process, outcome, impact, and cost-benefit).  The OIG Office of Investigations
          is a law enforcement entity that conducts criminal, civil, and administrative investigations of alleged
          misconduct by Agency, contractor, or grantee employees.  To ensure objectivity, the IG Act provides the
          IG's with independent authority to carry out activities such as determining what reviews to perform and
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          obtaining  all  necessary information,  developing  and  executing  budgets through  independent
          appropriations, selecting and appointing OIG employees (including Senior Executive Service (SES)
          positions), and entering into contracts. This independence protects the OIG from interference by Agency
          management and allows it to function as the Agency's fiscal and operational watchdog. In the budget
          formulation  process through execution,  Agency management may  not reduce  or reallocate OIG
          resources if the OIG conforms to OMB and Congressional guidance.

    B.    APPROPRIATIONS ACT and ACCOUNTS

      Annual appropriation acts  provide the funding for authorized programs. While certain funding levels and
      limitations may  be included  in authorizing  legislation, appropriation legislation will generally control the
      disposition of an issue where the appropriations act itself clearly demonstrates Congressional intention to
      depart from funding levels  or limitations in the authorizing legislation. Nevertheless, the authorizing act and
      appropriations act should be harmonized to the greatest extent possible. The authorizing legislation and the
      appropriation  go hand in hand to establish a mandate for environmental action followed by the funds to carry
      out the mandate.  Congress provides appropriations to EPA for three basic periods of availability.  These
      are (1) annual, (2) multi-year, and (3) no-year. Within the context of appropriations as to Time, Purpose,
      and Amount (referred to in Part II A of this Chapter), these periods define the time of availability, and to a
      somewhat lesser degree, the purpose.  A review of eight major EPA appropriations as they fall within these
      periods of availability follows:

      1.   One-Year Appropriations are provided for a specific fiscal year and are available for obligation only
          during that  fiscal year.  The federal government's  fiscal year begins on October 1  and ends on
          September 30 in the following year.

          One-Year appropriations are available only to meet a bona fide need of the fiscal year for which they
          were appropriated.  The "bona fide needs  rule" provides that a fiscal  year appropriation may be
          obligated  only to meet a legitimate, or bona fide, need arising in, or in limited cases arising prior to but
          continuing to exist in, the time period for which the appropriation was made.

          If an agency fails to  obligate its annual funds by the end of the fiscal year for which they  were
          appropriated, they cease to be  available for obligation and are said to have "expired" for obligational
          purposes. Since FY2004, EPA has had no one-year appropriations.

      2.   Multi-Year Appropriations are available for obligation fora definite period in excess of one fiscal year.
          Apart from  the extended period of availability, multi-year appropriations are subject to the  same
          principles that apply to annual appropriations. Because of the extended period of availability, multi-year
          appropriations may  have unobligated balances which "carry over" from one year to the next and are
          available  for obligation following the annual reapportionment by OMB.

          EPA's multi-year appropriations are two-year appropriations which are appropriated annually but are
          available  for obligation for two years.

          EPA's two-year appropriations are:

            a.    Environmental Programs and Management (EPM) Appropriation

            The EPM appropriation account  encompasses  a broad range of abatement, prevention, and
            compliance activities, and personnel compensation, benefits, travel, and expenses for all programs of
            the Agency except  Science  and Technology  (S&T), Hazardous Substance Superfund (HSSF),
            Leaking Underground Storage Tank (LUST) Trust Fund, Oil Spill Response (OSR), and the Office of
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            the  Inspector General (OIG). Abatement, prevention, and compliance activities include setting
            environmental standards, issuing permits, monitoring emissions and ambient conditions and providing
            technical and legal assistance toward enforcement, compliance, and oversight. In most cases, the
            states are directly responsible for actual operation of the various environmental programs. In this
            regard, the Agency's activities include oversight and assistance in the facilitation of the environmental
            statutes. In addition to program costs, this account funds a large portion of the administrative costs
            associated with the operating programs of the Agency, including support for executive direction, policy
            oversight, resources management, general office and building services for program operations, and
            direct implementation of all Agency environmental programs except those previously mentioned for
            Headquarters, the ten EPA Regional offices, and all non-research field operations.

            b.    Science and Technology (S&D Appropriation

            EPA's Science and Technology (S&T) appropriation account funds the scientific knowledge and tools
            necessary to support decisions leading to improved protection of human health and the environment,
            and to advance the base of understanding of environmental sciences. Thus, S&T  appropriation
            account funds most EPA research.  The Agency's efforts using S&T funds are conducted through
            extramural contracts, grants, and cooperative agreements with universities, industries, other private
            commercial firms, nonprofit organizations, state and local government, and Federal agencies, as well
            as through  intramural work performed at EPA's laboratories and  various field stations and field
            offices.

            The S&T Appropriation  account funds activities  such  as developing and improving sampling and
            analytical methods and instruments for measuring pollutants; determining the effects of pollutants on
            human health, ecosystems, and the  general environment; researching the processes that relate to
            pollution; evaluating technologies for preventing and controlling  pollution; and developing guidelines
            and research tools to improve risk assessments. The S&T Account also provides operating expenses
            for most Agency research facilities.  This includes categories such as personnel salary & benefits,
            laboratory supplies and materials, operation and maintenance of lab facilities, equipment, Information
            Technology (IT) support, human resource development, and printing. Beginning in FY 1996, this
            account also funds Hazardous Substances research appropriated in the Superfund Account and
            transferred to the S&T appropriation account. The appropriated Superfund funds are available for
            obligation for only two (2) years once transferred into the S&T account.

            c.    Office of Inspector General (OIG)

            This appropriation provides  funding  for EPA  audit and  investigative  functions  and program
            evaluations to  identify  and  recommend corrective  actions  of  management, program, and
            administrative deficiencies which create conditions for existing or potential instances of fraud, waste,
            and mismanagement. The audit function provides contract audit, performance audit, and financial
            audit services.  Contract audits provide professional judgments, findings, and recommendations to
            Agency  contracting  officials on accounting and financial  matters relative to negotiation, award,
            administration, repricing, and settlement of contracts.  Performance audits review and evaluate all
            facets of Agency operations.   Grant audits focus on the  effectiveness of individual projects,
            reasonableness of costs, and adequacy of management systems. The investigative function
            provides for the detection and investigation of improper and illegal activities involving programs,
            personnel, and operations.

            In addition to program costs, this account funds PC&B, travel, and administrative costs associated
            with the  OIG program.

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            There are historically two sources of funds for the budget authority in the OIG account: a.) General
            Revenues, b.) the Superfund Trust Fund. Although the SF appropriation is provided to EPA from the
            SF Trust Fund as a no-year appropriation, the  appropriated Superfund  funds  are available for
            obligation for only two (2) years once transferred into the IG account. The Agency's financial coding
            structure ensures that  both  OIG sources of funds are tracked  separately to provide proper
            accounting. Budget authority that is not obligated during the fiscal year is not "drawn down" from the
            respective funding source.

      3.  No-Year Appropriations  are available for obligation without fiscal  year limitation.  They remain
          available until expended, rescinded or otherwise withdrawn. In order for an appropriation to be no-year,
          it must be expressly stated as such in the appropriating language.

          EPA's no-year appropriations are:

          a.      Hazardous Substance Response Trust Fund (Superfund)

          The Superfund appropriation is provided to carry out the legislative mandates of CERCLA as amended
          by SARA by addressing the problems of uncontrolled hazardous waste sites and spills. The  legislation
          mandates that EPA (1) provide emergency response to hazardous waste  spills; (2) take emergency
          action at hazardous waste sites that pose an imminent hazard  to public health or environmentally
          sensitive ecosystems; (3) engage in long-term planning, remedial design, and construction to clean up
          hazardous waste sites where no financially responsible party can be found; (4) take enforcement
          actions to require responsible  private parties to  clean up hazardous waste sites;  and (5) take
          enforcement actions to recover costs where the fund has been used for cleanup.

          In addition to program costs, this account funds PC&B, travel, and administrative costs associated with
          the Agency's Superfund  program.

          b.      Leaking Underground Storage Tanks Trust Fund (LUST)

          The LUST Appropriation Account is provided to carry out the legislative  mandates of  SARA by
          conducting corrective action for releases from leaking underground storage tanks containing  petroleum
          and other hazardous substances. EPA  implements the LUST Program through state cooperative
          agreements which enable states  to conduct corrective actions to protect  human health and  the
          environment. The trust fund is also used for enforcement by forcing  responsible parties  to finance
          corrective actions and by providing the states with the authority to recover costs from responsible
          parties for state funds expended for cleanup of abandoned tanks.

          The Energy Policy Act of 2005 authorized the use of funds contained in the LUST Trust Fund for
          leak detection, prevention, related inspection and enforcement activities. However, Congress must
          also appropriate funds from the LUST Trust Fund for these purposes for EPA to use LUST
          appropriations to carry out the Energy Policy Act.

          In addition to program costs, this account funds PC&B, travel, and administrative costs associated with
          the Agency's LUST Program.

          c.      Buildings and Facilities (B&F) Appropriation

          Funds are appropriated to EPA's Buildings and Facilities Account each year to cover the  necessary
          major repairs and improvements to existing installations which house the Agency. This appropriation
          also covers new construction projects when authorized. Minor repairs and improvements  to existing
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          installations are usually funded by the EPM and S&T appropriations as authorized by the annual
          appropriations act.

          d.      Oil Spill Liability Trust Fund

          This Appropriation Account, authorized by the Federal Water Pollution Act (FWPA) and amended by the
          Oil Pollution Act (OPA) of 1990, provides funds for preventing and responding to releases of oil and
          other petroleum products in  navigable  waterways. EPA is responsible for directing  all cleanup and
          removal activities posing a  threat to public health  and the environment; conducting  inspections,
          including inducing responsible parties to undertake cleanup actions;  reviewing containment plans at
          facilities; reviewing area contingency plans; pursuing cost recovery of fund-financed cleanups; and
          conducting research and oil cleanup techniques. Funds are provided through the OSLTF established by
          the OPA and managed by the U.S. Coast Guard.

          In addition to program costs, this account funds PC&B, travel, and administrative costs associated with
          the Agency's Oil Spill Program.

          e.      State and Tribal Assistance Grants (STAG) Appropriation

          The State  and Tribal Assistance Grants (STAG) appropriation includes three components:  (1)
          Infrastructure Grants including State Revolving Funds (SRF), (2) Categorical STAG Grants, and (3)
          other specified grant programs (i.e., Alaska Native  Villages, Diesel  Retrofits, and  work  along the
          Mexican Border).

          Funding for the SRFs comprise the largest part of  the STAG  account.   These funds  are used to
          capitalize revolving loan funds in each state which provide loans to municipalities for major wastewater
          and drinking water infrastructure projects. There are two types  of water infrastructure SRFs:  Clean
          Water SRF (CWSRF) and  Drinking Water SRF (DWSRF).

          The states loan these funds to municipalities forthe infrastructure  projects, who then pay back their loan
          by making payments back into the state SRF account. The state can then make more loans (hence the
          term "revolving") to other municipalities.  The Water Quality Act of  1987 (WQA) reauthorized the
          "construction grants" program through  1990 and provided for its phase-out and replacement with a
          State Revolving Fund (SRF)  program, to be capitalized by grants to the States.]

          Categorical State and Tribal Assistance Grants (STAG) provide financial assistance to states and tribes
          in numerous environmental categories by program.  These grants help states and tribes develop the
          technical, managerial, and  enforcement capacity to operate the environmental programs that monitor
          drinking water systems, implement water quality standards, combat air pollution,  promote the  use of
          safer pesticides, manage hazardous waste, and assure compliance with Federal environmental laws. In
          addition, Categorical STAG funds are available in specified amounts appropriated for certain grant
          programs identified in the statute.

          The Omnibus Rescissions and Appropriations Act  (ORAA) of  1996 (P.L. 104-134) provided EPA
          permanent authority within the STAG account to award Performance Partnership Grants (PPGs).  PPGs
          permit states and tribes to combine STAG "categorical grants" (i.e. air, water) into one or more grants,
          to be used for addressing the unique priorities of each state or tribe. PPGs were created to reduce the
          burden on  and increase the flexibility  for state and tribal governments  that need to manage and
          implement their environmental protection programs, and at the same time produce the results-oriented
          performance necessary to  address the  most pressing concerns and achieve a clean  environment.

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   CHAPTER 2:  ROLES and RESPONSIBILITIES OR FUNDS CONTROL

    There are a number management and staff levels involved with funds control at EPA (for an illustration
    showing the relationships of these, see Exhibit 2520-2-1). The positions associated with funds control within
    EPA range from National Program Managers (NPMs) to funding document originators. This section will briefly
    describe the roles and responsibilities of each of these key players regarding funds control and focus mostly
    on the Funds Control Officers (FCOs).

    All levels of responsibility for funds control should ensure that no expenditures be authorize or created as an
    obligation under any appropriation or fund  in excess of the amount available [31 U.S.C 1341 (a)]. All personnel
    responsible for administrative control  of funds  should familiarize themselves with the following legal
    requirements found in:
    a.     Antideficiency Act (31 U.S.C. 1341 (a);
    b.     OMB Circular A-11, Part 4; and
    c.     EPA's Administrative Control of Appropriated Funds Manual (RMDS 2520).

    I.    PARTICIPANTS:

    A.   ASSISTANT ADMINISTRATORS (AAs),

         NATIONAL PROGRAM MANAGERS (NPMs), and

         RESPONSIBLE PLANNING AND IMPLEMENTATION OFFICERS (RPIOs)

      The Administrator and the twelve (12) Assistant Administrators (AAs) in headquarters are National Program
      Managers (NPMs) who control resources. These thirteen (13) NPMs, who are normally political officials,
      formulate budgets for EPA's national programs and offices including the regional program components.
      NPMs responsibilities include planning, formulating, and justifying budgets for national EPA programs,
      making  adjustments to  national program budgets (e.g., headquarters/regional splits)  as needed, and
      preparing program operating guidance.   For example, the AA for the Office of Water has national budget
      responsibilities for the entire EPA Water Program.

      The Responsible Planning and Implementation  Officers (RPIOs)  are the 24 EPA senior managers
      responsible for planning and implementing operating plans, using  and accounting for resources, and
      reviewing programs. This  consist of 24 individuals who are the Administrator, the (12) headquarters
      Assistant Administrators, including the Inspector General, and the ten (10) Regional Administrators.  Each
      RPIO has program operations to administer and a budget to execute.

      In terms of properly utilizing funds for  the purpose for which they were appropriated, the RPIOs, their
      Allowance Holders (AHs), and FCOs bearsole responsibility. No other Agency organizations are fully aware
      of the obligating activities and the decisions behind them that transpire on a day-to-day basis. , The RPIOs
      are presumed to be the  most knowledgeable EPA entity regarding what is permissible in the authorizing
      statutes for their programs. Additionally, the RPIOs are active participants during the process of budget
      formulation, the OMB submission, the Congressional Justification, and all subsequent stages of the
      legislative history behind the appropriations act. They receive copies of the House, Senate, & Conference
      Committee Appropriation Reports and are kept informed of what is in the Public Law for their programs.
      TheOGC is available to assist them in any interpretation of ambiguous language. The actions taken by the
      RPIOs'  in executing their portion of the budget is subject  to audit  and review by  the OIG, GAO,
      Congressional Committees, Agency management, etc. RPIOs are held  accountable responsibility for the
      utilization of their funds.
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    B.     REGIONAL ADMINISTRATORS (RAs)

      Each Regional Administrator (RA) is both a Responsible Planning and Implementation Officer (RPIO) and
      an Allowance Holder (AH).  RAs are not NPMs since they have a primary responsibility for regional, not
      national, administration and budget execution for all programs in the states and territories within their region.
       RAs coordinate on budget formulation and  execution with NPMs and present regional  budget planning
      concerns through the Lead Region process.

      Lead Regions are designated for each  major program (Water, Air, etc.) and they are responsible for
      representing the designated program with the appropriate NPM in developing priorities, budgets, and work
      year estimates for the regional program components. Lead Regions are rotated every two years and are
      also responsible for working with their respective NPM to identify and synthesize the issues of all ten (10)
      regions into a "regional view" that can be effectively factored into Agency decision-making. The list of Lead
      Regional Coordinators can be found at http://www.epa.gov/regional/leadregionprocess.htm. NPMs are
      responsible for soliciting and using this contribution from their Lead Region on major decisions.

      As RPIOs, Regional Administrators are responsible for overseeing the execution of their allowances and for
      the review of budget reprogrammings before they are sent to the Office of Budget (OB). In carrying out his
      or her responsibilities, a RA typically depends heavily upon their Assistant Regional Administrator (ARA) and
      an  individual in  the ARA's office who serves essentially  as a Budget Officer.  In many Regions, this
      individual is the Regional Comptroller.

    C.     SENIOR RESOURCE OFFICIALS (SROs)

           DEPUTY ASSISTANT ADMINISTRATORS (DAAs)/

           ASSISTANT REGIONAL ADMINISTRATORS (ARAs)

      The SROs  are  Senior Executive Service (SES) managers who are  designated by and report to  the
      Administrator, the 10 RAs, the GC, the Inspector General, and nine AAs. Additionally, one SES manager is
      designated by the Deputy Administrator for the Office of the Administrator (O A). The CFO approves all SRO
      designations upon initial designation, and annually thereafter.  In line with  the CFO Act (CFOA) of 1990,
      SROs must have the knowledge, skills and abilities in resource management necessary for the position.

      SROs are typically Deputy Assistant Administrators (DAA) and Assistant Regional Administrators (ARAs).
      The SRO is accountable for the Headquarters Office's or Region's,  effective resource management,
      including acquisition, assistance, budget, financial management and management integrity.

      SRO accountability, like the accountability of other EPA managers and officials, cannot be delegated, even
      if SRO functions are delegated. When SROs  are temporarily absent, the individual acting forthe SRO must
      be appraised of SRO responsibilities. In cases where a resource requirement may involve more than one
      program or Regional Office, the SROs of all affected offices share responsibility. While the SROs  are
      accountable for resource management in their respective Headquarters Offices or Regions, the CFO has
      overall responsibility for these resources. Specifically, the SROs:

      1.  advise the CFO on fiscal resource management issues, including acquisition, assistance, budget,
          financial management and management integrity. Extramural resources within this scope include
          contracts, simplified acquisitions, grants, loans, and cooperative and interagency agreements;

      2.  oversee, assess and advocate accountable fiscal resource management;
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      3.   ensure compliance with fiscal resource management laws and regulations while furthering program
          mission;

      4.   ensure appropriate and effective systems, procedures, management controls, communication and
          outreach are in place for accountable fiscal resource management;

      5.   ensure appropriate and effective planning, assessment, monitoring and control for accountable fiscal
          resource management;

      6.   ensure that assistance and acquisition mechanisms are used for work appropriate to their purposes;

      7.   review and  approve the  following  extramural management actions and funding requests. SRO
          concurrence is required for all:

          a.    requests for contract advisory and assistance services;

          b.    procurement requests (PRs) not including requests for incremental funding over $1  million and;

          c.    agreements for Federal funding assistance when total project costs are expected to be $5 million
               or more for continuing program grants and over $1 million for project grants.

      8.   ensure - by working through established organizational structure - that program or Regional resource
          managers [e.g., Contracting Officer Representatives (CORs), project officers (POs), work assignment
          managers (WAMs), delivery order project officers (DOPOs); grants management officers; funds control
          and financial management officers; and their supervisors:

          a.    are working within their workload limitations;

          b.    have Agency-required training and experience, and receive appropriate program or office-specific
               training that is available; and,

          c.    have  appropriate resource management responsibilities in their  position  descriptions and
               performance standards.

      9.   manage and certify completion of the Annual Review of Unliquidated Obligations for current and prior
          year travel and simplified acquisitions, as described in Chapters, Part IV.A.

     D.   SENIOR BUDGET OFFICERS (SBOs)

      In Headquarters, Senior Budget Officers (SBOs) greatly assist the NPMs and SROs in carrying out the
      responsibilities listed previously and serve as the primary liaison between the Office of Budget (OB) and the
      Allowance Holders (AHs).  The SBO:

      1.   has the lead role for managing the budget formulation process on behalf of their HQ NPM;

      2.   usually has the lead role in coordinating the budget execution activities for their HQ RPIO;

      3.   reviews, approves, processes or forwards budget reprogrammings and coordinates with the Office of
          Budget (OB) as needed;

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      4.  reviews each Allowance Holder (AH) Operating Plan (Op Plan) and spending utilization to ensure that
          funds controls and program goals are being met; and,

      5.  manages the review of Headquarters current year unliquidated obligations to determine their validity and
          viability, as required by the CFO.

    E.    REGIONAL COMPTROLLERS

      The Regional Comptroller serves as the Region's manager on all matters related to budget and finance
      responsibilities and functions. This position is the primary point of contact for the OCFO (Office of Budget
      Office, Office of Financial Management, and Office of Planning, Analysis and Accountability) and National
      Program Managers on regional budget and financial matters.  This position is also analogous to the Senior
      Budget Officer, however,  on the Regional level yet works with the Senior Budget Officer when addressing
      national environmental program issues.

      The Regional Comptroller is responsible for:

      1.  coordinating budget formulation  and execution processes and decisions on  resources (dollars and
          FTEs) at the Regional level;

      2.  managing the execution of the budget at the Regional level following Agency fund control policies,
          guidelines, and procedures;

      3.  oversees  utilization of Regional resources and prepares reprogramming requests as necessary;

      4.  ensuring resources are utilized according to government-wide and Agency budget and financial policies
          and procedures;

      5.  accounting and reporting on resource utilization according to Agency and government-wide financial
          accounting standards and policies;

      6.  manages Regional data systems to account for resources and coordinates with centralized Financial
          Servicing  Offices (FSOs) on  payments of  payroll, contracts, grants, assistance agreements, and
          Superfund activities.   Works with Headquarters Office  of Financial Management  (OFM)  on IFMS
          financial policy and accounting issues.

      7.  maintains close working relationship with Regional Grants Management Offices to facilitate proper and
          timely award of Agency grants;

      8.  manages the review of unliquidated obligations with all Regional offices to facilitate timely expenditures
          of Regional resources.

      9.  serves as the Regional point of  contact for budget and financial investigations audits on the use of
          Regional resources.

     F.   REGIONAL BUDGET OFFICERS

      The Regional Budget Officer (RBO)  serves as the Region's point of contact on all matters dealing with
      budget formulation, operating plan development, and budget execution. In  both areas, the RBO  must
      communicate with HQ NPMs and OB on all budget matters, especially with regard to furnishing information
      and advice on Regional programs  and objectives.
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      During budget formulation, the Regional Budget Officer (RBO) oversees all aspects of the Region's budget
      by appropriation, program results code and budget object class for the  inclusion in the Agency's OMB
      Submission. This includes:

      1.  developing regional resource requirements for budget outyears;

      2.   reviewing budget requests submitted by regional managers  and negotiating budget changes with
          pprogram managers and HQ budget  officials by explaining and advocating regional position  on
          budgetary issues;

      3.   leading regional managers in developing, justifying, and recommending budget allocations;

      4.   evaluating  variances  and trends within  various  appropriations to  ensure consistency  among
          programs, and recommend corrective actions where discrepancies arise;

      5.   establishing and implementing an annual process by which dollars and FTE work years are allocated
          within the Region so that programs can effectively carry out their requirements; and

      6.   working closely with Lead Region Coordinators .

      During budget execution, the Regional Budget Officer (RBO) serves as the primary funds control custodian.
      The RBO ensures that all regional FCOs are familiar with the Agency's budget structure  trained, and have a
      general knowledge of appropriation law.  During the budget execution phase thermo:

      1.   oversees the  preparation of suballowances for regional responsibility centers in accordance with
          approved regional budget request;

      2.   analyzes and makes recommendations on the best means of maximizing resource for payroll, travel,
          expenses, contracts, and grants;

      3.   monitors utilization of funds to ensure program funds are utilized for intended purposes at the allowance
          holder, program results code, and appropriation level, to include the monitoring of any allowance holder
          ceilings and floors;

      4.   conducts quarterly budget reviews with Division Directors to ensure compliance with approved operating
          plan;

      5.   recommends and initiates reprogramming of funds and FTE work years to ensure program objectives
          are met, as well as accommodate unplanned requirements; and

      6.   reviews and approves Allowance Holder reprogrammings.

      7.   ensures implementation of budget tracking codes for special budgets (e.g., required RPIO/Activity
          Codes) and the monitoring of spending to comply with HQ guidances; and,

      8.   coordinates development of regional IT budget projections for outyear budgets and the implementation
          of IT coding to track expenditures to this budget.
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      G.  ALLOWANCE HOLDERS (AH)

      Many Headquarters and Regional Program Directors, and staff directors, are Allowance Holders (AHs). The
      Office of Budget (OB) issues allowances to (AHs) to support their programs, thereby giving these officials
      the day-to-day responsibility for controlling EPA's funds. AHs or their designees are responsible for:

      1.   ensuring that funds control practices within their organizations do not violate federal laws, directives and
          EPA policies;

      2.   verifying proper funds certification and funds availability before an obligation is incurred.  Funds must be
          available for purpose, time and amount. The AH is responsible for ensuring that the AH's FCOs  are
          familiar with  the organization's budget structure and budget justification, as well  as have general
          knowledge of appropriations law;

      3.   adhering to any established ceilings, floors, and other limitations in addition to total AH appropriation
          levels, these  may include travel, administrative and work year ceilings, PC&B floors, etc.;

      4.   maintaining complete and up-to-date funds control records, including prompt entry of commitments into
          the Integrated Financial Management System (IFMS);

      5.   prompt and consistent monitoring to ensure that spending transactions are recorded  in the  IFMS
          correctly. Also, monitoring the status of open transactions and verification of products and services
          received against invoices to ensure that payments are made correctly. Any errors identified must be
          promptly corrected; and,

      6.   completing an annual review  of all unliquidated obligations and  taking action to cancel any invalid
          obligations that are found. The review is initiated by the  Office  of Financial  Management and is a
          requirement of the General Accountability Office (GAO).

      The AH must formally designate FCOs and alternates in writing and submit this list to the Office of Budget
      OB annually. Any change in FCO designations must also be reported to OB as  soon  as possible.  An
      example of this document is included as Exhibit 2520-2-2.

      The FCO designation forms encourage RPIOs to identify the specific Responsibility Centers (RCs) for which
      an FCO has authority to perform the functions listed below. If local office managers are going to ask FCOs
      to  perform those  functions for an RC outside of their designation (such as when one FCO is filling in for
      another), the FCO may not be sufficiently familiar with the status of funds for that RC to adequately fulfill
      those functions. It must be the responsibility of those local managers to determine how such instances will
      be transacted and if they should be transacted at all.  Certainly, no FCO has authority to  perform  the
      functions below for an RC for which they have not been designated without direct orders  from a local
      manager.

    H.    FUNDS CONTROL OFFICERS (FCOs)

      In smaller organizations, the Funds Control Officer (FCO) is usually in the immediate office of the Allowance
      Holder. In larger organizations, where an AH's organization is subdivided into Responsibility Centers (RCs)
      more than one FCO may perform the daily tasks necessary for controlling funds at the sub-allowance or RC
      level.
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      An FCO's scope of responsibility also may vary between that of an FCO located in Headquarters, and that
      of an FCO in the Regions. In either location, the FCO is either directly responsible for, or subject to
      coordinating with other personnel on the following duties:

       1.  serving as the central point of contact for all budgetary/financial information  on funds control for
          payroll, travel, and procurement of goods and services (i.e. checking available balances in a PRC &
          budget object class by appropriation);

       2. certifying the availability of funds as to the correct purpose, time, and amount;

       3. ensuring that all financial transactions are in compliance with any funds availability ceilings and floors;

       4.  ensuring the accuracy of accounting  data of spending documents to include all financial data and
          accounting elements cited are correct, as well as appropriation codes, account numbers, object class
          codes,  and signatures;

       5.  identifying the need to reprogram funds in advance;

       6. entering the spending actions/commitments into IFMS and forwarding the spending document to the
          appropriate office for subsequent obligation; since grant project officers enter grant commitments into
          IGMS which are transmitted into IFMS, FCOs are required to ensure grant commitments are correct
          and reviewing grant project officers correct any errors in IGMS.

       7.  ensuring that once the funds have been committed, the funds will not be altered, revised, or withdrawn
          prior to obligation without advance notice to the proper obligating official;

       8.  ensuring that  funds are properly obligated for correct amount and  that any unobligated funds are
          decommitted if necessary, and recertified if needed for future obligations;

       9.  monitoring utilization of program funds through the use  of financial management reports.  Keeps
          Allowance Holders informed on status of appropriations;

      10. maintaining proper records  of all Document Control Numbers (DCNs) for the AH;

      11. maintaining constant communication with document originators and Servicing Finance Offices (SFOs)
          to facilitate the reconciliation of funding documents; and,

      12. performing fiduciary responsibilities by conducting unliquidated obligation reviews (close-out of funding
          documents) and coordinating with SFOs in deobligating and recertifying of unused funds.

      In many cases the FCO serves  as the organization's expert on program funding policies and procedures,
      management of any ceilings and floors, criteria for object classification, etc. and has been assigned many of
      the same responsibilities as listed above for AHs.  Many FCOs  provide or arrange for assistance and
      training for the organization staff,  distribute guidance materials for staff direction, and  protect the
      organization from  problems and errors in the commitment and obligation of funds.

      See APPENDIX 2520-B  for a Checklist of Good Fund Control Practices and APPENDIX 2520-C for
      Suggested  Qualifications and Training for FCOs.
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    I.     ORIGINATOR

      The originator of a spending action may be any EPA employee having the need to obtain goods or services.
       Examples include branch secretaries ordering supplies or branch staff entering into program contracts for
      which they will be the Work Assignment Manager (WAM).  In some cases, originators are required to attach
      a written justification in order to spend funds for a specific activity or to use a specific appropriation, object
      class, or program results code.

      Originators will  have varying degrees of knowledge regarding funds control and budgeting/accounting
      policies and procedures. Some originators have branch budgets, know the proper accounting entries for
      their documents, and enter the accounting data on their documents. In other cases, they must depend upon
      their FCO to enter all financial accounting data.

    J.      APPROVING OFFICIAL

      An approving official's signature appears on each spending document in addition to the document initiator
      and the FCO.  Generally, the approving official is a Division Director and/or Allowance Holder (AH). Unlike
      the FCO, whose signature indicates technical correctness, the approving official's signature indicates a
      management decision to make the commitment of resources. Depending upon management preferences
      and the established procedures in a particular office, the spending document may be routed to the FCO
      either before or after the approving official. In others, the FCO may see the document twice, once to review
      for accuracy and/or funds availability before the approving  official signs it, and again afterwards to actually
      assign the DCN and enter the commitment into IFMS. The dollar value of the document may also affect the
      levels of approving official signatures that will be required.  For instance, a Division Director (at the RC level)
      may have authority to sign for amounts up to a certain threshold, but the Office Director's  approval (the AH)
      is needed for greater amounts. It is the FCOs  responsibility to know the organization's internal policies  and
      procedures governing such levels of authority and approvals and ensure that the proper signatures  are
      obtained.

    K.      OBLIGATING OFFICIALS

      The authority to enter into an obligation is limited to certain designated  individuals known as "obligating
      officials".  It is illegal for any non-designated individual to  obligate the government to pay for a delivered
      good  or service ordered. At EPA, the obligating officials for the  majority of transactions are located in
      specific offices in OARM. Examples of these offices and the obligation types they handle include:

                   Office of Acquisition Management (QAM)
                      Contracts, simplified acquisitions

                     Office of Grants & Debarment (OGD)
            Grants, interagency agreements, cooperative agreements

                Office of Human Resources Management (OHRM)
                           Training  agreements

      Additionally, there are  situations where designated  local officials have delegated authority to incur
      obligations (obligating official function). These include employees like Division Directors who approve travel
      and are the Approving Official for Purchase Card ordering officers.

      There is a distinct difference between certifying the availability of funds (FCO function) and incurring legal
      obligations. After commitment into IFMS, FCOs forward funding documents to the obligating official to incur
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      the legal  obligation on behalf of the government.  An obligation legally binds the government to pay a
      supplier for delivery of goods or services or to provide funds under an assistance agreement.

      It is the responsibility of the Obligating Officials to:

      1.   return documents to the AH if they discover funding errors (such as expired funds) that should not be
          obligated as submitted;

      2.   immediately forward accurate and complete documentation to the appropriate Financial Management
          Officer (FMO) to record the obligation in IFMS; and

      3.   communicate with contracting officer representatives (COR regarding insufficient funds,  contract
          modifications, contract overruns, etc.

    L.    OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO)

      The OCFO, under the supervision of the Chief Financial Officer (CFO),  is responsible for developing,
      managing, and supporting a goals-based management and accountability system for the Agency that
      involves strategic planning and accountability for environmental, fiscal, and managerial results. A current
      organizational chart of OCFO can be found on the Agency's intranet at:
      http://intranet.epa.gov/ocfo/about/org.htm

      Under the Chief Financial Officers Act of 1990, the OCFO is responsible to bring more effective general and
      financial management practices to  the Federal government, improve systems of accounting, financial
      management  and  internal controls, and provide for  the production of complete, reliable, timely and
      consistent financial information. The Act also requires  a Presidentially appointed, Senate confirmed CFO
      and the appointment of a career SES Deputy CFO in each major executive department and agency.
      There are seven (7) primary implementation areas for which the CFO is responsible. These are:

          1.    Annual Audited Financial Statements
          2.    Annual Reports
          3.    An Agency Five-Year Financial Management Plan
          4.    Financial Management Personnel
          5.    Financial Management Systems
          6.    Performance Measures
          7.    Agency User Fees

      To complete its mission, the OCFO is organized into five (5) offices which  are:

          1.    Office of Planning, Analysis, and Accountability (OPAA),
          2.    Office of Budget (OB),
          3.    Office of Financial  Management (OFM),
          4.    Office of Financial  Services (OFS).
          5.    Office of Enterprise Technology and Innovation (OETI)

      To view the complete formal  list of the many areas for which the CFO is responsible, go to the site of the
      CFO mission and description of functions at: http://intranet.epa.gov/ocfo/about/functions.htm

          1.    Office of Planning, Analysis, and Accountability (OPAA)
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               To facilitate the requirements of GPRA, the Office of Planning, Analysis,  and Accountability
               (OPAA) is responsible for developing, managing, and supporting a goals-based management
               system for the Agency that involves strategic planning and accountability for programmatic and
               managerial results.  OPAA works with the Office of Budget (OB) to integrate goals-based decision
               making into the allocation of Agency resources through multi-year and annual planning in the
               annual budget process.

               OPAA has primary responsibility for managing ORBIT, OCFO's Reporting and Business
               Intelligence Tool.  ORBIT is a financial, operations, and human resources reporting system using
               a query, reporting, and analytical software package designed to support the use of information in
               making financial and programmatic business decisions across the Agency.

         2.     Office of Budget (OB)

               The OB Director is the Allotment Holder  (ALLH) for all Agency resources and issues Advices of
               Allowance in accordance with the Operating Plan (Op Plan) to EPA AHs. The Allotment Holder is
               legally accountable for  assuring that  obligations are  made in accordance  with statutory
               requirements and that spending authority is not exceeded.

               The OB is the responsible authority for budget formulation and budget execution activities forthe
               agency.  These activities include reviewing (Op Plan) reprogramming requests, monitoring
               resource utilization, ensuring the application of appropriations laws and OGC or Comptroller
               General Comp Genlegal opinions pertaining to Agency Allotments, and providing  directives,
               guidance, and support to assist (AHs) in  fulfilling their own responsibilities Office of Budget The
               OB manages and operates the Budget Automation System (BAS) which serves as the primary
               agency-wide budget formulation database.

         3.     Office of Financial Management (OFM)

               OFM is responsible for ensuring Agency compliance with the Chief Financial Officers Act of 1990
               and the Federal Managers Financial Integrity Act (FMFIA) of 1982, and the CFO Act of 1990. The
               CFO Act requires preparation and audit of financial statements to ensure accountability and fair
               presentation of government resources,  as well as decision support.  The OFM meets these
               responsibilities by developing, implementing, and maintaining agency-wide financial systems,
               providing end user training, and  issuing accounting policies, as well  as provide training and
               support for users. The FMFIA requires Agencies to protect government resources against fraud,
               waste, abuse or mismanagement through systematic self-evaluation of management controls,
               and to report material weaknesses in management controls with corrective action plans annually
               to the President and Congress. .

         4.     Office of Financial Services (OFS)
               The Office of Financial Services-(OFS) is responsible for accounting and financial services at 4
               locations:  (1) Washington, DC, (2) Research Triangle Park, NC, (3) Las Vegas, NV, and (4)
               Cincinnati, OH. The OFS also has national responsibility for processing, accounting, reconciling
               & reporting of the Agency's biweekly payroll.

         5.     Office of Enterprise Technology and Innovation (OETI)

               OETI is responsibility for information technology planning, standard setting, development and
               deployment of the OCFO and Agency's resources and financial management systems. This
                                                 47

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               includes  all aspects of program analysis, formulating and overseeing implementation of a
               strategic approach to Agency-level technology investment planning, budgeting, development and
               implementation of agency-wide and OCFO financial systems and policies that effectively and
               efficiently support achievement of the Agency's environmental mission.

    M.    FINANCIAL MANAGEMENT OFFICERS (FMOs)

      Each Financial Management Officer (FMO) manages a Servicing Finance Office (SFO) and is responsible
      for all standard accounting functions. These functions primarily include the posting of the obligation into
      IFMS, managing accounts receivable and accounts payable, reporting, and providing support to program
      offices in reconciling accounting data problems and  discrepancies. There are four FMOs located in four
      Financial Management Centers (FMC):  Research Triangle Park, NC (RTP FMC), Las Vegas, NV (LV -
      FMC), Cincinnati, OH (CFMC), Washington, D.C. (WFMC). The four FMCs have nationwide responsibilities
      for managing all of the agency's financial management transactions. Each FMC services all AHs as follows:
      •    Contracts and simplified acquisition, RTP-FMC
      •    Grants, assistance agreements, LV-FMC
      •    Interagency Agreements (lAGs), travel, and Purchase Card functions, C-FMC
      •    Time and labor administration and labor distribution, W-FMC.

      Exhibit 2520-2-3 lists the addresses of the four SFOs and their complete scope of responsibilities. Starting
      in FY2006, the agency entered into an inter-agency agreement with the Department of Defense's Finance
      and Accounting Services (DFAS) for the processing  the agency's payroll.]

      In carrying out accounts payable responsibilities for simplified  acquisition, RTP FC receives invoices from
      suppliers for payment.  Before the FMO may pay the supplier, it must have an obligating document and a
      receiving report (sent by the originating office) to verify that the work was completed or the goods were
      received satisfactorily. Unpaid obligations are not removed from IFMS at the end of the fiscal year. Rather,
      they remain in the system until paid or until the Allowance Holder or obligating official notifies the FMO that
      no further payments will be made against the obligation.

    N.    ACCOUNTS PAYABLE CERTIFYING OFFICERS and DISBURSING OFFICERS

      Accounts Payable Certifying Officers should not be confused with agency Funds Control Officers (FCOs)
      discussed earlier in  this chapter.   In  many federal agencies,  different government  officials  make
      "certifications" of one type or another on documents,  but this does not make them "Certifying Officers " for
      purposes of accountability and financial liability.

      The accountability of public funds rests primarily with  the Certifying Officer, is usually located in an agency's
      accounting department (EPA's SFOs) and are responsible in  two areas of budget execution: posting the
      obligation from funding documents into  IFMS and certifying contractor bills for payment.

      Certifying Officers move funds from a commitment  to an obligation in IFMS  upon receiving the signed
      obligating document (Contract, Purchase Order, Cooperative Agreement/Grant, Training Form, etc.).  If
      there is no signature from an  obligating official on the funding document, the obligation WILL NOT get
      posted. In regard to certifying bills for payments, Certifying Officers will first coordinate with Agency Project
      Officers (POs), Work Assignment Managers (WAMs) or Delivery Order Project Officers (DOPOs) in first
      getting their approval for paying an invoice. However, despite receiving a PO/WAM/DOPO's approval for
      paying an invoice, the Certifying Officers are still the ones that are ultimately held accountable. As required
      by 31 U.S.C. 3528, a Certifying Officer will be held accountable for:


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      1.  the existence and correctness of the computations and facts stated in a voucher and its supporting
          records;

      2.  the legality of a proposed payment with the appropriation or fund involved;

      3.  returning payment vouchers that are inadequately documented; and

      4.  the correctness of computations on the voucher.

      31 U.S.C. 3528 also  provides that Certifying Officers will be accountable for the amount of any "illegal,
      improper, or incorrect" payment resulting from his or her false or misleading certification. This includes any
      payments prohibited by law, or payments which do not represent a legal obligation under the appropriation
      or fund involved. Since there is a high degree of accountability placed on Certifying Officers, under EPA
      Order 2515.1, [Policy and Procedures for Relieving Certifying and Disbursing Officers From Liability (March
      17, 2000)], they have the  right to seek and obtain an advance opinion from the EPA Office of General
      Counsel  regarding the lawfulness of any payment to be certified. Beyond that, the statute allows fora GAO
      opinion.

      As previously noted, the Office of Legal Counsel (OLC, U.S. Department of Justice (DOJ)  has opined that
      31 U.S.C. 3528(b), which purports to authorize the (Comp Gen) to relieve certifying officers from liability,
      and 31 U.S.C. ' 3529, which purports to authorize the Comp Gen to issue advance opinions on the legality
      of payments, are not consistent with our Constitution's separation of legislative and executive powers.
      Memorandum for Janis A. Sposato,  General Counsel,  Justice Management Division, from John  O.
      McGinnis, Deputy Assistant Attorney General,  Office of Legal (OLC) (Augusts,  1991)  (McGinnis Memo).
      Only DOJ has prosecutorial authority to initiate a court proceeding to hold a certifying officer liable for an
      illegal or improper payment.  OLC  has stated  that DOJ will  "not bring suit against [a certifying] official to
      recover a payment if that official has obtained from his or her component general counsel. . .an opinion
      advising him orherthatthe payment could legally be made."(McGinnis Memo at p. 7.) OLC is responsible
      for providing legal advice  to the President and the heads of Executive departments and agencies.  Its
      decisions are binding on Executive Agencies unless a court rules otherwise.

      A Disbursing Officer is an employee of a federal agency designated to disburse public funds. Like most
      federal agencies, EPA does not have any disbursing officers located within the agency; instead, most of the
      federal disbursing officers are located in the Department of Treasury.  A disbursing official shall disburse
      money only as provided by a voucher certified by the head of the agency or by an authorized certifying
      official.

    O.    OFFICE OF GENERAL COUNSEL (OGC)

      Based on the traditional attorney/client function, OGC staff is frequently involved in providing advice and
      counsel in  all areas  of Agency activity pertaining to appropriations law,  funds control, and  financial
      management. OGC staff opine both formally and informally on EPA's behalf in the interpretation of EPA's
      authorizing and appropriations language, the legislative history, and government-wide  statutes.  EPA
      employees may rely on Comp Gen decisions as useful sources of appropriations law in conducting their day
      to day activities.  However, if a Certifying Officer or Disbursing Officer is facing  the possibility of personal
      liability, an OGC opinion can be relied on by such officials.  (EPA Order 2515.1, Paragraph 4.a.,  Policy.)
                                                  49

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  CHAPTER 3: BUDGET EXECUTION PROCESS

    I.    ACCOUNT CODE STRUCTURE AT EPA

    After the annual appropriations act becomes a public law, EPA must implement or enact this act within the
    Agency. Budget execution involves a great deal of structured coding, some of it from the Treasury and OMB,
    in order to conduct automated financial accounting to provide prudent stewardship of and report on the use of
    all funds. This coding, when entered in the 6 Integrated Financial Management System (IFMS) account fields,
    forms unique records which capture the detailed accounting information that is required by the Agency and for
    government-wide standards  and reporting.  These records drive the integrated budgeting and accounting
    features in the IFMS. This section covers the account structure and coding at  EPA.

     This section will be revised extensively in the near future after EPA decides on the
    Agency's new financial management system.]

      A. 6-FIELD IFMS ACCOUNT CODE

      The IFMS has been processing a 6-field IFMS account code nightly since its installation in 1989. Added
      together, the 6 fields have a maximum character length of 41 -characters. From FY1989 to FY1994, older
      Agency sub-systems and interface systems continued to use a 10-digit fixed account code which  did not fully
      utilize the capability of the  IFMS code space.  FY 1995 was a year of transition as the Agency began to
      utilize the added capabilities of the 6-field IFMS account code for budgeting and accounting. Definitions and
      guidance in the use of the 6-field IFMS account code since FY 1996 are outlined in this Chapter.

      The following explanation refers to FIGURE-2 and reflects additional expansion into available character
      space for new capabilities beginning in FY1996. The following is a description of each of the six fields that
      comprise the IFMS account code:

         1.       BUDGET FISCAL YEAR (BFY) FIELD

         The Budget Fiscal Year field is processed by IFMS as two-character fields in the IFMS account code.
         The first two  characters  represent  "beginning  budget fiscal year" and the second  two  characters
         represent the "ending budget fiscal year." In FY 1996, the Agency began using the first two characters of
         the field for all single-year and no-year funds. For two-year funds, however, the Agency began using all
         four characters to take advantage of IFMS capabilities to automatically carry over two-year funding.  Data
         entered into these fields is validated against the FUND table in IFMS. The FUND table is controlled and
         maintained by the Office of Budget (OB).

                 CHARACTER LOCATION/USE (S):

                 1 & 2    Beginning Budget Fiscal Year

                 1 & 2    Ending Budget Fiscal Year (2-Year funds only)


         2.       FUND FIELD (APPR):

         The FUND (or Appropriation) field is processed by IFMS in a 6-character string as the second of six
         character fields. The first two characters of this field indicate appropriations/accounts and sub-accounts.
                                                50

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                 CHARACTER LOCATION/USE (S):

                 J_      Appropriation/account (1 character) (corresponds to a Treasury symbol)

                 _2_      Appropriation sub-account (1 character)
                         Identifies specific portion of an appropriation account (e.g. reimbursable authority)

                 3 4      Restricted use for Receipt Accounts or other OB specified unique accounts

                 5 6      Reserved

                           EXAMPLES:

                           T  = SF New Obligational Authority (NOA)
                           TR = SF Reimbursable
                           T2 = SF IG

                           C = Science & Technology (S&T)
                           CR = S&T Reimbursable

                 The complete list of current Appropriations codes for EPA is included as Exhibit 2520-3-1.

                 Data entered into this field is also validated against the FUND table in IFMS.  The FUND table
                 is controlled and maintained by the Office of Budget (OB).


         3.       ORGANIZATION FIELD (ORG):

         The organization (or allowance holder) field is processed by IFMS in a 7-character string as the third of
         six character fields.

         CHARACTER LOCATION/USE(S):

               1	2     A.M. code 2-char.
                        (no other uses permitted)

               3  4     A.    R.C. code / blank (if nothing to follow), or
                        B.    R.C. code / zero (if more to follow), or
                        C.    R.C. code-2 char., or
                        D.    R.C. code/local option (e.g. Branch), or
                        E.    R.C. code/numeric State Code (for all State grants)

               567    A.   Add-on code (A/B/C/D)/2-char. Add-on #, or
                        B.    Superfund Activity codes R/E/P/S/H (if alpha allowance),/ local option 2-char., or
                        C.    Trackable Items (other than add-on)  (X in  char. 5)
                        D.    Reimbursable I.D. code (X in char. 2, char.6-7 map to Reim. Agreement)
                        E.    if none of the above, local option 3-char., or
                        F.    blank
                                                 51

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                      EXAMPLES:

                        3 3 A         AH/RC

                        0 1 1         AH/STATE (REGION I- CONNECTICUT)

                        3 3 A 1        AH/RC/SUB RC

                        4 A D 0 R      SF ALPHA AH/RC/ZERO (0) SUB
                                     RC/REMEDIAL ACTION

    Data entered in this field is verified in the ORGANIZATION (ORGN) table in IFMS. The Operating Plan issued
    by the Office of Budget and shown in the Allowance Inquiry table (ALLT) does not contain the Responsibility
    Center code or the local option features. That information is contained in the Suballowance Spending Control
    Inquiry table (SASP) and Suballowance Inquiry table (SAIN). The mapping of the additional codes is included
    in the ORGN table in the ALLOWANCE ORG field.  The ORGN table is jointly maintained by Office of Budget
    and the Financial Systems Staff, OFM.
                                             52

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                               02/04/08
                           IFMS ACCOUNT CODE UTILIZATION
      FIELD NAME/SIZE

      1.BFY FIELD (2+2)



      2.FUND FIELD (6)
      3.0RGANIZATION FIELD (7)
      4.PROGRAM FIELD (9)
        PROGRAM RESULTS CODE (PRC)
      5.SITE/PROJECT FIELD (8)
      6.COST/ORG FIELD (7)
 CHARACTER LAYOUT/ PRIMARY UTILIZATION
12
BFY
12
END
BFY (2-YEAR FUNDS ONLY)
                                    1         2        34
                                    APPROP.  SUB- RESTRICTED USE
                                           APPROP.
                                        (e.g. REIMBURSABLE)
                                 56
                              RESERVED
                                    A.M.
     3 4
     R.C.I
    LOCAL OP.
         2 3
   567
 A. ADD-ON CODE
 B. SFACTIV.CODE
 C. TRACKABLE ITEMS
 D. REIMBURSABLE I.D.
 E. LOCAL OPTION
           56
8 9
                                    GOAL OBJECTIVE NPM PROGRAM/AGENCY LOCAL
                                                        PROJECT ACTIVITY OPTION
                                                                 (SPENDING
                                                                   ONLY)
                                       1234
             5  6
                                    A.
                                    B.
                                    C.
                                    D.
       7  8
     SF ACTIV.
   SF REGION/SITE  SF ACTIV.  OPER.UNIT
   ********* WORKING CAPITAL FUND ********
   ** INFORMATION TECHNOLOGY (I.T.) CODE
   *** LOCAL OPTION (TO BE DETERMINED) **
                                       1234567
                                    A.  CERCLIS SERIAL #
                                    B.  OPPT EXTRAMURAL IT CLASSIFICATIONS
                                    C.  OTHER LOCAL OPTIONS (TO BE DETERMINED)
                                    FIGURE-2
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         4. PROGRAM FIELD [PROGRAM RESULTS CODE (PRC):
           [Reflects budget architecture beginning in FY 2004]

         The IFMS Program Field contains what EPA calls its Program Results Code (PRC) and is processed by
         IFMS in a 9-character string as the fourth of six character fields.  Until FY1998, EPA had Program
         Elements and IFMS tables may still reflect this term.

         In addition to what is entered into the 9-character code above, the Program Reference table (PGMT)
         associates behind-the-scene information to the PRC such as the title, Goal/Objective, NPM, Program

         Project, and Activity code.  None of this information needs to be key entered as part of the PRC field for
         IFMS to have this information for reporting purposes.

              CHARACTER LOCATION/USE(S):

         1       Goal (Comprises 1 character and represents the Agency's long-term Strategic Goals)

         2 3     Objective  (Comprises 2 characters and represents each objective under each Goal)

         Subobjectives were no longer coded in IFMS for budget execution beginning in FY2004.  They will still
         be used for performance and planning and in the Budget Automation System (BAS) which serves as the
         primary agency-wide database during formulation of the Agency's budget.]

         4       National Program Manager (NPM)
                 Comprises 1 character and identifies the NPM associated with resources being used for a
                 particular Goal and Objective.

         5 6     Program/Project
                 Comprises 2 characters and defines Awhat@ the Agency does based upon specific statutory
                 authority (programs)  or  "what" significant tasks or problems the Agency is addressing
                 (projects). Program/Project replaces "Key Programs" in the structure beginning in FY2004.

         7       Agency Activity
                 Comprises 1 character and represents "how" we accomplish our objectives in general terms.
                 These "activities" are somewhat generic across all government agencies (e.g. research and
                 development, financial assistance, program implementation, reg/policy development.) In FY
                 2004, the new Agency Activity code will not be loaded as part of the IFMS Operating Plan
                 (Budget in IFMS).  The IFMS Op plan PRC will be the first 6 characters of the PRC and include
                 - Goal, Objective,  NPM and Program Project. The Agency Activity code will be used in the
                 PRC for all spending actions including fixed account  numbers-all characters  of the PRC.
                 Similar to the way the four-character finance object code used for spending rolls up to the 2-
                 character Budget Object Code, the Full PRC (Up to 9 characters if RPIO activity is included),
                 will roll up to the 6-character PRC in the budget.

         8 9     RPIO Activity
                 Comprises 2 characters for unique reporting needs of RPIOs use.
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         Data entered in the program field will be verified in the Program Reference table (PGMT) in IFMS.  The
         PGMT table is maintained by the Office of Budget (OB) and contains additional information found in the
         following IFMS tables:

              IFMS Tables              Information to be Found

                 PGMT                         PRC
                 PCLS                         [to be determined]
                 PCAT                         Goal/Objective
                 PTYP                         Program/Project
                 PGRP                         National Program Manager (NPM)
                 FUNG                         Agency Activity

         For more information regarding specific program results codes (PRCs), see the latest program/project
         descriptionbook at the EPA intranet URL address:  http://intranet.epa.gov/ocfo/budget/architecture.htm

         5.     SITE/PROJECT FIELD:

         The site/project field is processed  by IFMS in an 8-character string as the fifth of six character fields.

         For those Regions who have exhausted their initial supply of Site IDs, the first  position will  be "A"
         followed by one position for the Region (with "0" representing Region 10). For example, A401 represents
         a new site ID for Region 04 after the initial supply of site IDs has been exhausted.

         All work performed under the Superfund, LUST, or WCF appropriations will use the SITE/PROJECT
         field.

         It is recommended that this field  have multiple uses and structures based upon the  FUND code used in
         the transactions. The use of the IFMS Project Cost Accounting System (PCAS) module in conjunction
         with this field will enable the BFY/FUND field to determine which structure is valid for that FUND code.
         PCAS offers three layers of structure:

               •  Agency-wide code , which enables the PROJ costs to be gathered regardless of BFY/FUND
                  combinations.

               •  Project, which is the basic level to gather either obligations, expenditure, or cost data.

               •  Sub-project, which allows for a lower level of data structure linked to a  specific project.

            EXAMPLES:

                  a.     SUPERFUND:  positions will enable the gathering of data by site ID, activity code,
                         and  operable unit within the site.  All 8 characters  must be entered  for the edit
                         program to recognize the code as valid.

                         CHARACTER LOCATION/USE (S):

                         1234       Superfund ID identifying region and the specific site  or non-site cost

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                         5  6          Superfund activity code

                         7  8          Operable unit within a specific site  (If no operable unit, enter 00)

                  b.     WORKING CAPITAL FUND: Positions will enable the gathering of fund data and
                         costs by each service level and charge customers of the Fund a standard charge for
                         each of the service levels provided.

                         CHARACTER LOCATION/USE (S):

                         1_             Indicates whether code is a cost or revenue

                         2 3           Identifies cost pool

                         4567      For revenue codes, denotes customer's allowance holder and
                                       responsibility center codes

                         Future uses

                  c.     INFORMATION TECHNOLOGY CODE: Used to track purchasing related to IT.

                         CHARACTER LOCATION/USE:  For all characters except the first, use zero if N/A

                         1             L for IT

                         2 3           Specific identifiers for major and significant project and/or system.

                         4             Life cycle phase of major and significant project.  If 2nd and 3rd
                                       characters are not zero, then 4th character must be a P,  D, or M.

                         567        Specific IT cost area for security, and regional uses.

                         8             Future uses

                         For more information on use of IT codes, read the Office of Comptroller policy on the
                         Agency's intranet at: http://intranet.epa.gov/ocfo/policies/policy/pa01.htm

                  d.     OTHER USES: Other Offices planning to use this field should contact the Office of
                         Budget (OB).

                         CHARACTER LOCATION/USE (S):

                         12345678       Local Option Data entered in the SITE/PROJECT field will
                         be verified for validity by the Project Reference table (PROJ) and the Sub-project
                         Reference table (SPRJ) in IFMS. This table is maintained primarily by the Financial
                         Systems Staff, OFM.  In each of the regional offices, access will be granted to a
                         Superfund finance person for updating new site  names and establishing  codes.

                         This field can be a required entry within a particular FUND.

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         6.    COST/ORG FIELD:

         The cost/org field is processed by IFMS in a 7-character string as the last of six character fields.
         All space is available for local option.

               EXAMPLES:

                 OSWER proposed using this field  for a 3-character activity sequence  number called
                 "CERCLIS Serial Number."

                 OPPT classifications were moved here from the PROJECT field when the IT classifications
                 were begun.  The field was to be used only for extramural work.

                 Data entered in this field is verified in the ORGANIZATION (ORGN) table in IFMS.  The
                 ORGN table is maintained by the Financial Systems Staff, OFM.

      B. APPROPRIATION NUMBER (TREASURY ACCOUNT SYMBOL)

      Each appropriation account is identified at the U.S. Treasury by a code called a Treasury Account Symbol.
      These symbols consist of seven or more alpha-numeric characters, for example:

               684/50108         EPA FY 2004/2005  EPM acct.

               68-20X8153       EPA LUST. Trust Fund acct.

               68X0110          EPA B&F account

               The account symbols provide the following information:

               Department or Agency Code - the first 2  characters identify the Agency (EPA = 68) responsible
               for the account and is assigned  by the Treasury. [NOTE Agency code 20 signifies a Treasury
               account and is found in EPA's Trust Fund account codes.]

               Period of Availability-the next character(s) represent the period of availability of the account for
               obligation

                  one-year appropriations - a single digit (0 through 9) indicates the fiscal year for which the
                  appropriation is available for obligation (e.g. 4 = FY 2004)  As of FY 2004, EPA has no one-
                  year appropriations.

                  multiple-year appropriations - two digits separated by a slash indicate the first and last fiscal
                  year for which the appropriation is available for obligation (e.g. 4/5 = FY 2004/2005)

                  no-year appropriations - an "X" is used to designate an appropriation which is available for an
                  indefinite period of time

      Fund Group - the last four digits identify the specific account by Treasury fund group (e.g. 0108 = EPM)

      For a complete list of EPA Treasury Symbols, see  Exhibit 2520-3-1.
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     C. OBJECT CLASSES

         1. OMB Object Classification Codes
         Federal agency object classification requirements are issued annually by OMB in Circular A-11. Object
         classes are used for government-wide accounting and reporting of the services or articles the federal
         government procure. OMB supplies the structure and codes of major object classes codes for which the
         agencies supply the detail. Examples of OMB major object classes codes are:

           10     Payroll
           21     Travel
           24     Printing and Reproduction
           26     Supplies and Materials
           31     Equipment
           41     Grants

        All of the OMB major object classes can be viewed in IFMS by accessing the Budget Object Code
         (BOCT) table and observing the column labeled "MAJ OBJ  CIS".

         2.    EPA Object Classification Codes
         For purposes of budget planning and execution, EPA does  not use all of the OMB major object class
         codes. In FY 2004, the Agency streamlined the OMB codes into only seven (7) Budget Object Classes
         (BOCs) eliminating the programmatic/administrative distinction in the Operating Plan. The
         programmatic/administrative  distinction will continue at the sub-object class level. The BOC list is as
        follows for FY 2004 and subsequent years: (new codes in bold):

           10    PC&B
           21    Travel
           28    Site Travel
           36    Expenses
           37    Contracts
           38    Working Capital Fund
           41    Grants

         By utilizing  only seven  (7)  BOCs,  EPA has grouped OMB  codes for rent, printing, supplies,
        transportation, and equipment into BOC 36 (Expenses).  This EPA classification structure was adopted
        to streamline budget processes and reduce workload forthe budget community.  All of the Agency's BOC
         codes (crosswalked to OMB major object classes codes and EPA's Sub-Object Class (SOC) codes can
         be viewed in IFMS by accessing the BOCT table and observing the column labeled "BUDG BOC".

         Not all BOCs are valid for all appropriations (e.g. the 32.00 series - Land and Structures is only valid in
        the B&F account).   The purpose  of an  annual appropriation determines  what object classes are
         permissible in a given fiscal year.

      3. EPA Sub-Object Classification Codes

      For EPA's budget planning and execution purposes, only a certain level of information is needed and the
      seven (2 digit) budget object class codes (BOCs) are sufficient.  For accounting purposes, however, a four
      (4) financial sub-object class codes (FSOCs) are used. Each of the sub-object class codes rolls up into one
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      of the seven (2 digit) budget object classes codes (BOCs). The 4 digit FSOC provide the level of detailed
      information needed for accounting and reporting spending to OMB, GAO, Congress, etc. All the sub-object
      class codes and definitions fall within the broader scope of the OMB major object classes codes.  For
      example, EPA has many sub-object class codes/definitions for the OMB Object Class code 26 (Supplies
      and Materials).  Additionally, all financial sub-object class codes crosswalk to one of the seven (7) 2 digit
      budget object class  codes. A display of the OMB, BOC, and financial sub-object class relationships is
      included as Exhibit 2520-3-2.

      All of the Agency's financial sub-object class codes (cross walked to OMB's object class codes and EPA's
      budget object class codes) codes can be viewed in IFMS by accessing the BOCT table and observing the
      column labeled "OBJECT CLASS".  The sub-object class codes and definitions are Part IV of RMDS
      Chapter 2590 and can be viewed on-line at the following intranet URL address:
      http://intranet.epa.gov/ocfo/policies/resource.htm
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    II. OPERATING PLAN CONTROL AND MANAGEMENT

      A. ADVICES OF ALLOWANCE

      1. Nature of Allowances

      31 U.S.C. 1514 provides that Agency allotments will be established at the highest practical level. At EPA,
      OMB apportions the appropriated funds to the EPA Office of Budget (OB) Director as the Agency's single
      Allotment Holder. The OB Director retains the original signed apportionment documents on behalf of the
      Agency. This is the Agency's formal designation regarding "Administrative Subdivisions of Funds".  The
      Agency does not have sub-allotments. The one restriction on the Agency's  allotment is that it cannot
      exceed the amount of the apportionment.

      Advices of Allowances (AOAs) are management tools for providing funds to Headquarters Program Offices
      and Regions for meeting Agency operational needs. They are not formal sub-allotments of apportionments
      or administrative divisions of funds for the  purposes of 31 U.S.C. 1514 or 1517. AOAs are issued by the
      Office of Budget (OB) Allotment Holder (AH) in amounts that, in the aggregate, cannot exceed the amount
      of the apportionment.  The AOAs are provided to EPA managers called Allowance Holders (AHs). This
      system establishes an organizational framework for funding and permits the appropriate Agency officials to
      commit and  obligate portions of the Agency's Operating Plan.  The majority of Allowance Holders are
      National Program Managers or Regional Administrators who organizationally manage portions of many EPA
      appropriations.  While AOAs are not formal sub-allotments or administrative  subdivisions of funds, the
      Agency has financial management controls in place to ensure that Allowance Holders do not commit or
      obligate funds in excess  of the  amount  of the AOA.   Further, the Allotment Holder (AH) has the
      responsibility, authority and technical capability to issue, withhold, or withdraw any or all allowances or
      portions of allowances as appropriate. The Allotment Holder (i.e., the Office of Budget) also has the
      authority to consolidate allowances centrally (or designate new Allowance Holders), if Allowance Holders are
      not properly managing the AOAs.

      2. Advice of Allowance Issuance

      AOAs are made available to the respective Allowance Holders through the IFMS at the start of the  new
      fiscal year.  This assumes Congress has provided an appropriations act and that an Operating Plan has
      been entered into IFMS. The Operating  Plan,  which is the more detailed budget that adds up to an
      allowance, is found in the Allowance  Inquiry Table (ALLT) in IFMS and is at the  Program Results
      Codes/Budget Object Class level.

      The funds control lockout level at EPA is set in IFMS at the Appropriation/Allowance Holder level. The on-
      line feature in IFMS which shows this Appropriation/Allowance Holder level is called  the Suballocation
      Inquiry Table (SALC).  Allowance Holders  will have a SALC table record for each appropriation for which
      they hold an allowance. This includes carryover and reimbursable allowances. For example, the Allowance
      Holder who is the Director of the XYZ Program may hold the following four allowances:

         a.  EPM
         b.  LUST
         c.  Superfund
         d.  Superfund Reimbursable

      The Advices of Allowance is issued at the Appropriation/Allowance Holder level. The Operating  Plan, which
      is the more detailed budget that adds up to an allowance, is found in the Allowance Inquiry Table (ALLT) in
      IFMS and is at the Program Results Codes/Budget Object Class level.
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      Some organizations are sufficiently large or geographically spread so that an Allowance Holder subdivides
      its organization and Operating Plan into smaller units of control called Responsibility Centers (RCs).  In
      IFMS,this lower level of RC detail is found in the Sub-allowance Inquiry Table (SAIN) and is displayed at the
      Program Results Codes/Budget Object Class level. Allowance Holders  and Responsibility Centers may
      view their respective allowances or Operating Plan at anytime IFMS is operating. Exhibit 2520-3-3 provides
      a display of the organizational hierarchy of the budget tables in IFMS.

      EPA submits the Enacted Budget to the Congressional appropriations committees. EPA does not need to
      wait for any Congressional approval or concurrence of the Enacted Budget. Shortly afterwords, the Office of
      Budget Director issues an annual Advice of Allowance Letter which formally transmits the following types of
      information.
             •   Operating Guidance for the Year
             •   Agency Ceilings (if any)
             •   Limitations to the Operating Plan
             •   List of Control Team Analysts
             •   Action Items

      The Allowance Holders are responsible for staying within the FTE ceilings and fund ceilings reflected in this
      AOA letter. FCOs must obtain a copy of the Advice of Allowance Letter from their Allowance Holder (AH).
      To   view  copies   of  the   current  fiscal  year's   AOA  and   previous  AOA   memos   see:
      http://intranet.epa.gov/ocfo/budget/budgetmemos.htm

      3. Adhering to Advices of Allowance

      The Advices of Allowance, represented in IFMS by the SALC tables, specifies how much the Allowance
      Holder may commit and  obligate in the fiscal year. The  SALC table  updates instantaneously to reflect
      commitments,  obligations, payments, and reprogrammings processed in IFMS.

      Each federal agency usually does not have the full amount of its appropriation at the beginning of the fiscal
      year.  However, since FY 1995, OMB has apportioned EPA's funds in the first quarter.  This has been
      transmitted using a revised one-page letter format which apportioned all Agency funding.  Beginning in FY
      2002, both the  standard SF-132 Apportionment form and  EPA's one-page letter format are transmitted to
      OMB electronically.

      IFMS also provides the Office  of Budget (OB) with the capability to set funds control at either the total
      Operating Plan level or for a combination of data elements. A control on a combination of data elements
      may specify any particular Appropriation, RPIO, Allowance Holder, Responsibility Center, Program Results
      Code or Budget Object Class. Allowance Holders also have the capability in IFMS to set their own spending
      controls on sub-AH levels (such as the RC level or lower) without OB approval.

      B. REPROGRAMMING

      1. Definition and Purpose

      Reprogramming is defined as "shifting of funds within an appropriation or fund account to use  for different
      purpose(s) than those contemplated at the time of the appropriation.". In addition, the House or Senate
      Appropriation  Committee report will include additional information,  and/or restrictions  on  Agency
      reprograpmmings.   A reprogramming shall also consist of any significant departure from the program

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      described in the Congressional Justification  without a change in funding Reprogramming activity at the
      start of the fiscal year does not usually begin until EPA has submitted the Enacted Budget to Congress.

      For EPA that means a reprogramming is any movement of dollars or FTEs in the Operating Plan either at a
      Responsibility Center or Allowance Holder level including any change into or out of a Program Results
      Code,or organizations (e.g. AH or RC).  As a matter of policy, EPA adheres to reprogramming limitations
      contained in the Congressional Appropriations Committee Reports accompanying the annual appropriations
      act.  In cases where either the House or Senate Appropriation Committee report displays an allocation of an
      appropriation below a budget activity level, the more detailed level shall be the basis forthe reprogramming
      action.
      Managers use reprogrammings to meet the changing needs and priorities of the Agency. Some examples of
      reprogramming actions are:

      1.  Resource changes between program results codes or program areas

      2.  Resource changes between organizations (e.g. AHs, RCs)

      3.  General resource reductions or increases.

      IFMS is set up to monitor any resource ceilings and floors. However, this capability is based on the
      Operating Plan and  not spending. Therefore, all organizations are responsible for monitoring their
      obligations against the Operating Plan and reprogramming when needed in advance of commitment and
      obligation.  Failure to adhere to this policy could result in a lower level of organizational lockout and/or
      withdrawal of Allowances by the Agency Allotment Holder (Office of Budget).

      2. General  Reprogramming  Restrictions

      Congressional  Restrictions

      As stated above, EPA generally follows Congressional restrictions on reprogramming funds with an Enacted
      Budget. The terms of the Congressional committee restrictions may change with each appropriation. For
      example, the Agency has historically  received direction to obtain approval from the appropriation
      committees prior to each  reprogramming that exceeds the amount specified in the conference committee
      reports out of program areas,  or areas of Congressional interests, or results in an increase or decrease of
      10% annually in affected  programs.

      Congressional committee language has  historically provided an exception to the reprogramming limitation
      for  the State and Tribal Assistance Grants account relating to:  1) request to  move funds between
      wastewater and drinking water objectives for grants targeted to specific communities; and 2) reprogramming
      of performance partnership grant funds, which are exempt from this limitation.

      BAS Pre-Approval of Reprogrammings

      As a result of reprogramming requirements initiated in FY 2006,  and the inability of IFMS to appropriately
      prevent potential Congressional reprogramming changes, the Office of Budget established a reprogramming
      pre-approval process with the Budget Automation System (BAS). For all net movement of funds across
      program/projects or subprogram/projects for appropriated funds, RPIOs must request approval of this
      movement via a BAS Reprogramming document, before they can move funds in IFMS via reprogramming
      request.  On a quarterly basis, OB reviews the reprogramming requests and evaluates them for potential
      approval. OB will  approve reprogrammings under Congressional limits. Proposed reprogrammings that

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      require  Congressional  involvement  will  be  evaluated  to  determine  the appropriate  action.   All
      reprogrammings that do not cross program/projects, can be entered directly into IFMS.

      Additionally, EPA has agreed to notify the Congressional Committees of reorganization of offices,
      programs or activities prior to the planned implementation of such reorganizations.

      The Office of Budget (OB) will assist (RPIOs) in providing Congressional notification for reprogrammings in
      excess of the Congressional limitation, whenever it is needed. If you anticipate the need to reprogram funds
      in excess of the Congressional limitation, please notify the Formulation, Control and Policy Staff in the Office
      of Budget. They will provide guidance on current procedures such as format, content and timing. However,
      the proposed reprogramming should not be entered into IFMS until the Agency has a response from the
      Committees and you are  notified by the Formulation, Control and Policy Staff.

      The Office of Budget (OB) also will monitor and enforce compliance with both the letter and spirit of these
      Congressional  limitations to  ensure  that  the  Agency's arrangements  and  relationships  with  the
      appropriations committees are  not jeopardized.

      RPIOs will not be permitted to compromise the Congressional limitations by:

         •  splitting reprogrammings (for the same general purpose) into more than one document
         to circumvent the limitation,

         •  reprogramming incremental amounts (for the  same general purpose) into or out of more
            than one organization  (such  as  ten regions) where the  cumulative amount moving between
            Program/Projects is in excess of the limitation,

         •  reprogramming or spending any amount of Congressional add-on/earmarked funding for
            a purpose other than that stipulated by the Congress in law, (add-on plus base in instances
            where Congress has increased an underfunded program),

         •  overobligating a program/project in excess of a Congressional limitation and
            circumventing the reprogramming process (de facto reprogramming),

         •  reprogramming between  activities within a PRC goal/objective that does not move
            Operating Plan resources but represents a major policy shift.

      Information regarding the current restrictions and limitations can be found in the annual Advice of Allowance
      Letter.

      Resources may only be reprogrammed within a single appropriation (or Fund, in IFMS). Movement between
      appropriations requires an "appropriation transfer" (or balance transfer) authority which Congress has to
      enact in law.

      Funds must also be available (uncommitted, unobligated, and unexpended) in order to be reprogrammed.
      This can be verified by first viewing the Operating Plan (the Allowance Table (ALLT) in IFMS). When OMB
      apportions funds to EPA by quarter, reprogrammings may only move funds from one quarter to another if
      offsetting funds are moving the other way on the same document.
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      3. Reprogramming Limitations (Ceilings and Floors)

      Any Agency ceilings and floors, which may be imposed on EPA appropriations for a given year, are
      transmitted by the Office  of  Budget (OB) to the Agency in  a number of ways including: direct
      communication; the annual Advice of Allowance letter; and the appropriation analysis binder that is sent to
      each Assistant Administrator/Regional Administrator.

      a. Ceilings - Certain Agency resources are designated by Congress or OMB with a cap or limitation
      referred to as a "ceiling". Ceilings are not resources. Ceilings impose planning and spending limitations for
      resources that cannot be exceeded.  In a number of our appropriations, one or more ceilings  may be
      imposed upon EPA for: Full-Time-Equivalent Work years (FTEs), site-specific & non site-specific Travel,
      Administrative Expenses, and sometimes even specific programs.  In addition, the Agency may violate the
      Antideficiency Act if  its obligations  and disbursements  exceed specified statutory  ceilings in  an
      appropriations act. The OIG appropriation account does not have ceilings. EPA establishes and maintains
      agency limitations for the following non-statutory ceilings:

            Workyear Ceilings - Workyears are also known as FTE (full-time equivalents). A full-time equivalent
            (FTE) is the total number of hours (worked or to be worked) divided by the number of compensable
            hours applicable to each fiscal year. A work year is equal to between  2080 - 2096 employee work
            hours per year (listed by year in OMB Circular A-11) depending on annual calendar fluctuations (i.e. a
            leap year).  All employees, including Agency Co-ops and  stay-in-school employees count
            against the Agency work year ceilings. These ceilings apply to workforce appropriations such as:
            Environmental Programs & Management (EPM), Science & Technology (S&T), Superfund (to include
            funds deposited in Superfund Special Accounts), and Leaking Underground Storage Tanks  (LUST).
            Workyear  levels  are  developed during  the budget planning  process  and are  determined by
            anticipated Personnel, Compensation, and Benefit dollars divided by cost-per FTE estimates. Work
            year ceilings are imposed by the Agency to restrain the obligation of PC&B resources and to
            control the size of the Agency's workforce. FTE ceilings are no  longer imposed by OMB  and are
            also not mandated by Congress.  However, Congress may put language within the Act, or legislative
            history to the Act, that has explicit FTE implications.  At times, FTE "caps" to certain EPA Offices
            have also been included as Administrative Provisions in our Act.  Within the Agency, FTE ceilings in
            workforce  appropriations are issued  to the  appropriate RPIOs/Regions including ceilings on
            reimbursable work years. Each RPIO is responsible for monitoring and managing their FTEs.
            RPIOs are  also expected to manage FTEs consistent with existing budgets and should implement
            hiring plans such that end of year on-board staff levels leave the Agency with flexibility to deal with
            reasonable budget changes in the next fiscal year.

            Work year  ceilings (including  Reimbursable FTEs) are issued annually and do not carry over from
            one year to the next. All other multi-year and no-year ceilings do carry over in conjunction with the
            dollar balances. Neither carryover ceilings nor dollars are part of an Allowance Holder's budget until
            the Office of Budget  (OB) has made them accessible in the IFMS Operating  Plan.  The  Agency
            cannot carry over more ceiling than it has carryover dollars, and neither can any RPIO/Region.

            Travel Ceilings - These administrative ceilings apply to limitations on travel appropriations such as:
            EPM, S&T, SF, and LUST to prevent abuse of total travel amounts  for the Agency. Individual RPIO
            travel ceilings are listed in the Annual Advice of Allowance Memorandum.  They are based on travel
            budget  estimates in  EPA's  Budget Request to Congress and  are subject to change  by the
            Congressional committees.


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            Administrative  Expenses  Ceilings -  These  ceilings have been  imposed in the past to  limit
            administrative expense costs. In some cases, the ceilings were specified in the Appropriations Act
            with specific dollar amounts.  Even though our appropriations act does not currently contain specific
            administrative  expense ceilings,  the  Agency has agreed with the  Committees that  prudent
            management will be  observed.  As  a  result, EPA continues  to maintain  the  administrative/
            programmatic charging distinctions and to carefully monitor spending.

            Programmatic Ceilings
            This type of ceiling represents a limit placed on a particular Goal, Objective, Program/Project, Agency
            Activity, etc. (e.g. Criminal Enforcement Training), (e.g. the new Brownfields law contains a ceiling on
            expenditures for Brownfields  research, training, and technical assistance carried out under CERCLA
            104(k)(6).  It's 15% of the amount appropriated to carry out CERCLA 104(k)).

            To ensure that the Agency is in compliance with jts  ceilings, EPA  organizations are  provided
            with ceilings of their own (sub-ceilings). An organization, for ceiling purposes, may  be defined as
            any level within EPA including RPIOs, Regions, Allowance Holders, or even RCs. All organizations
            must live within each of the ceilings imposed and must take affirmative measures in advance to
            ensure that ceilings are not exceeded at anytime.

         b. Floors - Congress or OMB; though the apportionment process, may mandate minimum amounts that
         must be dedicated for specific purposes (e.g. add-ons), programs, budget object classes, projects, etc.
         These resource amounts that the Agency must, at a minimum, dedicate for the activities indicated, are
         called "resource floors".  Resources to meet floor levels, if any, cannot be planned, reprogrammed,
         committed, obligated, or disbursed  for any purpose other than that intended  by Congress or OMB.  A
         major object class such as Personnel, Compensation and Benefits  (PC&B), a particular activity within a
         program, a whole  program, are all candidates for floor  designation.

         Programmatic Floors - Floors are sometimes created by using earmarked totals or restrictive language
         which specify the exact amounts to  be budgeted (including reprogrammings)  or obligated for a specific
         program (e.g., formula-driven grant  programs), group of programs or a specific activity within a program
         (e.g., Compliance Assistance  Program at $25 M in FY2000). Congress does this to "lock in" a specific
         amount of funding for a particular purpose that  prevents deviation from the  amount of funding that it
         deems necessary.

         To ensure that the Agency is in compliance with jts floors, if any, EPA organizations are provided with
         floors of their own (sub-floors). An organization, for floor purposes, may be defined as any level within
         EPA including RPIOs, Regions,  Allowance Holders, or even RCs.  All organizations must comply with
         each of the floors affecting their operation and must take affirmative measures in advance to ensure that
         floors are not violated at any time.

         In multi-year appropriations, all floors carry over from one year to  the next in conjunction with any
         associated dollar balances being reissued.

      Agency limitations such as ceilings and floors are established  in the IFMS Limits Reference Table (LIMT).
      An error message will occur if reprogramming transactions violate any  of the limitations in this "net" through
      which all IFMS reprogramming transactions are screened.

      4. IFMS Reprogramming

      The  AH/SBO/Regional Budget Officer initiates  a reprogramming document  as a result of any planned
      change, either programmatic or budgetary, to the current year Operating Plan in IFMS. They  are responsible
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      for editing and correcting the reprogramming document and indicating their approval (level 1) in  IFMS.
      These reprogrammings appear on the Suspense File (SUSF) in IFMS.

      The Control Team of the Formulation, Control and Policy Staff accesses all reprogramming documents that
      appear on the SUSF in IFMS where 1st level approval has been applied on the prior day. The Control Team
      reviews the reprogrammings and, if necessary, routes the reprogramming document to the appropriate
      Office of Budget (OB) Staff for review and approval (there may be instances where more than one Staff
      reviews the document).  The Office  of Budget (OB) Staffs review reprogrammings which affect the
      programmatic and policy concerns of the programs.

      A well written, informative purpose statement (justification) is necessary for approval of the reprogramming
      document.  Reprogramming justifications provide  the permanent  audit trail of EPA's  resources and
      protection forthe initiatorwhose rationale is documented. Reprogramming justifications should simply state:
      1.) what the action achieves for the program(s) oroffice(s) receiving an increase and, 2.) what the impact is
      to  the  program(s) or office(s) losing resources.   See  Exhibit 2520-3-4 for more on how to write a
      reprogramming justification.

      Once all steps are completed, the reprogramming document is approved and updated in IFMS. Approval of
      the document can be viewed by the initiator on the SUSF and is reflected as "ACCPT" in the Status column.
      The ZRRP table in IFMS displays all recently reprogrammings processed and approved within the last 10
      days that reprogram funds between RPIOs.

      C. CARRYOVER of UNOBLIGATED BALANCES

      Carryover funds are defined as unobligated balances of appropriation accounts which have not expired at
      the end of the fiscal year. Because OMB Apportionments expire every September 30th, these carryover
      balances must be reapportioned to the Agency by OMB in the new fiscal year.  Annually, the Office of
      Budget (OB) estimates carryover balances that will be unobligated at year-end and submits carryover
      apportionment requests to OMB by August 21  in accordance with OMB Circular A-11 requirements. This
      helps to ensure that  authority has been granted by OMB to have carryover funding available to the Agency at
      the start of the new fiscal year. However, because this authority is based on amounts estimated almost two
      months prior to EPA closing its books for year-end, the Agency must be prudent in the use of these
      estimated carryover amounts until final totals are available and estimated apportionments are revised to
      reflect actual balances.

      Two-Year Funds The Integrated Financial Management System (IFMS) is coded so that two-year funds
      remain available into the second fiscal year and, therefore, carry over automatically. Utilizing this feature,
      allowances are automatically available when  IFMS opens for processing. Although this enhancement
      provides a number of benefits to Allowance Holders, it also adds responsibilities for managing these two-
      year funds. For example, while Allowance Holders are not required to request recertification of second-year
      recovered funds.  AH's will have to anticipate and cover any overruns that might occur since overruns will
      also impact the original accounting data as they are posted in the second year.

      No-Year Funds As  a matter of Agency policy no-year appropriated funds do not automatically carryoverto
      AHs. The Office of  Budget (OB) issues annual guidance (usually during September) which describes the
      carryover review process and the standard operating procedures for requesting carryover balances of no-
      year funds for the new fiscal year. Carryover funds are then released as quickly as possible, usually in
      stages beginning at the start of the new fiscal year and continuing throughout the year.  Their release is
      dependent upon final closeout data and policy decisions by Agency management.


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      Work years and reimbursable dollars automatically carry over in 2-year unexpired carryover appropriations;
      No-Year appropriations do not carry over and must be newly issued each year. Travel ceilings do carry over
      provided  that dollars  have also carried over.  The  precedent for unused  ceiling carrying forward was
      negotiated with the Congressional Appropriations Committees and OMB in FY 1986 when the Superfund
      program  had to be operated using carryover funds while waiting for reauthorization.  This practice is not
      limited to the Superfund appropriation. Unused ceilings that are covered by unobligated carryover dollars
      are also available for reissuance in all other two-year and no-year appropriation accounts.

      Annual reprogramming restrictions, which are issued shortly after the Agency has an Enacted Budget in the
      Advice of Allowance Letter, also apply to all carryover funds. EPA has authority to reissue or reprogram
      carryover balances for new priorities, up  to Congressionally specified levels, without Congressional
      notification provided the resources are not otherwise earmarked. However, resources which carry over as
      unobligated balances  retain any Congressional restrictions as to purpose, time, and amount that applied
      when they were originally appropriated.

      D.  REIMBURSABLE ALLOWANCES

      Reimbursable authority is additional budgetary authority authorized by congressional statute and apportioned
      to  EPA by OMB. This additional authority is requested by the Agency and permits  EPA to obligate
      collections and other funding sources (both federal and non-federal) which are in addition to EPA's annual
      appropriations. The authority is established using an Apportionment and Reapportionment request (OMB
      Standard Form SF-132).

      Federal agencies frequently enter into both federal and non-federal agreements where they are either the
      disbursing Agency or the receiving Agency.  Disbursement agreements are made by EPA Offices by
      obligating their regular allowances from the Agency's enacted appropriations.  At EPA, reimbursable
      allowances are only issued if EPA is the receiving Agency. Some of the instances for which EPA has utilized
      the reimbursable allowance mechanism in the past are listed below.

      1. Reimbursable Interaqency Agreements (lAGs) -This is byfarthe most common reimbursable situation.
      Under this arrangement,  other Federal agencies provide funding to EPA for services which we provide
      directly or for which we utilize one of our contractors.  The authority cited for such agreements is frequently:
       a.) "cooperation" authority for lAGs [ these sections are found in EPA authorizing legislation (e.g. CERCLA,
      RCRA, CAA, CWA, etc.), b.) the Clinger-Cohen Act (CCA), also known as the Information Technology
      Management Reform Act (ITMRA) (e.g. GSA lAGs), and c.) the Economy Act. The agreements themselves
      are overseen and processed by the Grants  Offices throughout EPA. OAM approves a determination and
      finding relating to  Economy Act lAGs that involve contracts.  Once the agreement is forwarded to and
      recorded by the Cincinnati Financial Management Office, this office handles the billing (e.g. if on an actual
      reimbursable basis, the other Federal agency will be billed as work is completed and/or as the contractor
      submits bills for payment to EPA.

      To avoid violations of the Anti-deficiency Act by making disbursements in excess of the appropriation cash
      balance, close monitoring of the available cash balance forthe effected appropriation should be exercised.
      For lAGs ~ where EPA is receiving funds from another agency (also known as a funds-in IAG) to provide a
      certain good or service ~ EPA must first ensure that the funds were received from the other agency first
      prior to creating an over obligation-where the other agency might fall behind in making payments to EPA. If
      the cash balance falls  below $500,000, further obligations from the appropriation should be shut down until
      reimbursements or an  advance  is received  from  the  paying  agency to replenish  the cash  in the
      appropriation.

      2. Intergovernmental  Agreements (IGAs) -  (Agreements with Other Governments)
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         a.  State or Local Governments - are provided for under the Intergovernmental Cooperation Act of
            1968.  In this arrangement EPA provides specialized services being purchased by state or local
            governments.

         b.  Foreign Governments & International Organizations - are provided for by specific legislation such as
            section 607 of the Foreign Assistance Act (22 U.S.C. 2357), which allows EPA to receive funds
            from foreign governments and certain international organizations in exchange for services.

      3. Fees -This includes activities such as state and local operating permit and fee programs to enhance the
      effectiveness of programs for reducing pollutants. Only if authorized by statute, can collections that are
      received by the Agency be obligated by EPA during that fiscal year. Otherwise, the fees must be deposited
      as Miscellaneous receipts to Treasury as required by 31  U.S.C. 3302 (b), or as directed in a statute.

      4. Special Accounts / Cashouts - This is funding that EPA receives from APotentially Responsible Parties@
      through agreements or legal settlements in the Superfund program. The funding is intended to pay for
      future work at specific sites and EPA is authorized to A retain and use@ these funds by section 122(b)(3) of
      CERCLA.  It should be noted that funds collected in  these accounts that are used for performing
      reimbursable work count against the Agency's FTE/work-year ceilings.

      5. Federal Technology Transfer Act (FTTA) - This is authority for Cooperative Research and Development
      Agreement (CRADA) income and royalty payments from licensing agreements with private firms which will
      pay royalties to the Federal Government for an exclusive license to use Federally-developed technology.
      FTTA CRADA funds are held in trust for the co-operators and may be used solely for specified purposes.
      CRADA funds are subject to recertification and the same internal  controls as appropriated funds.

      FTTA royalty funds lapse at the end of the fiscal year following the one during which they were received.

      6. Advance State Match/State Cost Share - This is the percentage of site response costs matched by the
      individual states either after-the-fact, or under rare circumstances, in advance in the Superfund  program.

      7. Reimbursable Workyears (FTEs) - Additional workyears to undertake the terms of an agreement can
      only be provided by OMB and FTEs should not be written into any agreement during budget execution. In
      the past, in the rare instances where OMB has  agreed that reimbursable FTEs were  appropriate and
      justifiable, the FTE were granted during the budget planning cycles (either the OMB submission or the
      Operating Plan development stage).

      8. FIFRAIPAs- Intergovernmental Personnel Act employees under the Federal Insecticide, Fungicide and
      Rodenticide Act of 1972.

      9. Recycling Fees - Collections from the Agency's recycling program.

      Not all instances for which EPA uses the reimbursable allowance  mechanism are situations  of actual
      reimbursement. Many are up-front collections (such as fee programs, intergovernmental agreements, and
      cash outs) where the agency has statutory authority to retain and use funds, and it is the best mechanism
      for OMB to  provide  the obligational authority to the  Agency.  In all cases, however, where  other
      organizations  are  providing funding, there is a net zero impact (the result is neither  an increase nor
      decrease) upon EPA's Enacted Appropriations following disbursement and/or reimbursement.  Also, the
      reimbursable apportionment authority is not a budgetary resource  until an agreement is entered  into (if an
      IAG) or funds are received (If a collection) and the apportionment authority is thereby funded.

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      Reimbursable authority must be obtained from the Office of Budget (OB) in the form of a reimbursable
      Advice of Allowance prior to commitment or obligation of any of the resources described above.  However,
      before authority can be issued, the OB must have received documentation that an IAG has been executed
      or that funds have been collected by the Agency. For example, an EPA office that has entered into an IAG
      cannot act upon the agreement until they have forwarded an official executed copy to the OB and received a
      reimbursable allowance to commit  and obligate against. Reimbursable Advices of Allowance are issued
      through the Integrated Financial Management System (IFMS) and are reflected in the Operating Plan as
      reimbursable appropriations.

      Those appropriation accounts for which EPA receives Reimbursable Authority from OMB are: EPM, S&T,
      LUST, Superfund, OIG, and Oil Spills. Since reimbursable agreements may involve any of the budget object
      classes, authority  will be issued  in the  appropriation for which  the  object  class and/or work being
      performed is appropriate. Because there is a net zero impact upon EPA's enacted appropriations, ceilings
      and floors, if any, do not apply except in the case of Reimbursable work years (FTE).

      Reimbursable work years (FTE) which accrue as a result of charging PC&B against  a reimbursable
      agreement are subject to an RPIO's own direct FTE ceiling. In other words, an RPIO cannot exceed its
      work year ceiling (direct plus reimbursable FTE).

      Not all unfunded Agency reimbursable authority and not all unobligated reimbursable allowances expire at
      year-end.   If the reimbursing Agency's funding has not expired  at year end, RPIOs can request a
      reimbursable allowance in the new fiscal year to cover any unobligated  portion of their agreement(s).

      For more on reimbursable interagency agreements and the reimbursable process, see Chapter 4 of RMDS
      2550C entitled: Interagency Agreements.
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      III. COMMITTING AND OBLIGATING APPROPRIATED FUNDS

      A Funds  Control Officer's signature on a document signifies that the document has been personally
      reviewed  for accuracy, that all accounting data is accurate and complete, that the transaction has been
      accepted  in IFMS, and that the funds are available as to purpose, time, and amount. There may be rare
      exceptions when a transaction may not accepted into IFMS. These rare exceptions happen before IFMS is
      opened at the beginning of a fiscal year.  It is the FCO's responsibility to ensure that all of these
      actions have taken place before forwarding the document to other Agency officials. These officials
      will be reiving on the FCOs signature to  indicate that the funds will not be altered, revised, or
      withdrawn prior to obligation without advance notice, or until the recipient of the  document is
      notified in writing.

      This section will cover the essential items on funding documents that an FCO should review, and common
      funding problems an FCO may encounter after committing the funds and how those problems are resolved.
      Since an  FCO's realm of responsibility may vary between depending on whether they are located in HQor
      the Regions, not all of these functions may actually be performed by the FCO. However, in either location,
      the FCO is directly responsible for, or subject to, coordinating with other personnel on the following activities.

      A.    REVIEWING AND APPROVING FUNDING DOCUMENTS

      A lack of attention to detail in properly reviewing a funding document could result in a violation of the Anti-
      Deficiency Act. Therefore, the FCO should ensure that the following information is correctly cited on the
      document before committing the funds in IFMS:

      1.    Correct Appropriation: Chapter 1 Part III describes the different appropriations used by the Agency
            and their purpose. The FCO must ensure that the funds cited are being used for the appropriate
            purpose. The FCO may also need to apply the "Pick and Stick" rule to determine whether or not the
            document is funding something from one appropriation that traditionally may have been funded from
            a different appropriation. This rule was covered in Chapter 1 (Part II, A 1).

      2.    Correct Account Number: See Chapter 3, Part I for description of the 6-Field IFMS Account Code and
            how to enter this  information.

      3.    Correct  Object Class Code: See Chapter 3, Part I for description. FCOs must ensure that the
            document cites the correct sub-object class code in terms of properly  categorizing the item,
            coinciding with the appropriation cited  and properly identifying the item as  being administrative or
            programmatic in nature. For further information, FCOs should review RMDS 2590 which contains a
            description of all of the Agency's sub-object class codes.

      4.    Correct SFO Code: Chapter 2, Part II describes the roles and responsibilities of an SFO. The SFO
            closes out commitments and enters obligations into IFMS. Thus, all funding documents must cite the
            proper SFO code in order to reach their proper destination and be processed. The correct SFO code
            is based upon the  FCO's  geographic location and/or on the type  of funding  document being
            processed. See Exhibit 2520-2-3 forthe correct SFO code to use for each type of funding document.

      5.    Accurate Mathematics:  FCOs must ensure that, when more than one quantity of an item is being
            procured, the total cost of the purchase is correct. Thus, the estimated unit price multiplied by the
            quantity must equal the total price/cost shown on the document.

           If the funding document is citing more than one appropriation and one of them is  a Trust Fund
           appropriation, the FCO must make sure that the Trust Fund layoff percentages used in calculating the
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           costs against  each  appropriation are correct,  and that  the  document  cites  the  appropriate
           corresponding accounting information.  For more information on the concept of Trust Fund Layoffs,
           see Chapter 4(G).

      6.   Correct Signatures:  FCOs must ensure that the document has all the proper signatures (Initiator
           and/or  Approving Official).   Actions sometimes require different levels  of approval, such  as
           international travel which requires higher level approvals than domestic travel. Based on the amount
           of an item being procured, Bankcard  purchases might need a Contracting Officer's (who has a
           warrant) signature. FCOs should  be familiarwith all persons authorized to sign fortheirorganization.
           By checking for signatures, the FCO is assured that the  document has been  reviewed by the
           appropriate individuals. (If multiple organizations are involved, all appropriate FCOs are responsible.)
           Also, OAM requires that some types of procurement have signatures from individuals outside of the
           FCO's office.  For example, for the purchase of any Information Technology (IT) equipment, the
           funding document must have the SIRMO's (Senior Information Resource Management Official)
           signature.  For the procurement of furniture or renting of conference space, the document must have
           a signature from the Facilities Management & Services Division  (FMSD).

      7.   Proper Funding Vehicle: Most commonly used funding documents at EPA are fairly self-explanatory
           (i.e. Travel Authorization   and Travel Voucher for travel related expenses).  However, there are
           some  instances where the FCO needs to apply policy guidance. Although the  document may
           originate with the Contracting Officer Representative (COR), the FCO must also know when it is
           appropriate to use a contract but not a grant or cooperative agreement.  The Federal Grant &
           Cooperative Agreement Act (FGCAA),  31 U.S.C. 6301 et. seq., provides that grant and cooperative
           agreements must be awarded when the principal purpose is to carry out a public purpose of support
           or stimulation authorized by statute, rather than to acquire services or products which directly benefit
           the government. In interpreting the FGCAA, EPA Order 5700.1, states:

           If an office or laboratory's principal purpose, in undertaking a project, is to obtain a product
           or service for the direct benefit or use of the Agency, or any part of the Federal government
           including the  legislative and judicial branches, a contract,  rather than a grant (assistance
           agreement), must be used.

           There is one exception.  It is when services - for the direct benefit or use of the Agency - are
           related to the Senior Environmental Employee (SEE) Program, which is authorized by the
           Environmental Programs Assistance Act. In this case it is more  appropriate for this program
           that was established by Congressional legislation and is  awarded through SEE grants.

      B. RECORDING COMMITMENTS

      Once the document has been properly reviewed, and all financial data is correct, the funds are ready to be
      committed. Committing funds reserves a specified amount for a specific purpose. Commitments help
      managers to estimate how much individual spending actions will cost and to predict overall expenditures
      based on actions that are not yet obligations.  Since large procurements often take months to award, it is
      essential that FCOs ensure that committed funds remain  available throughout the entire procurement
      process.

      1. Funds Availability Check

      The first thing an FCO must do after reviewing the document is a funds availability check. A document
      cannot be committed if sufficient funds are not available. If allowances have been established at the RC
      level, the two key tables to observe in IFMSarethe SASPand SAIN Tables.  For those Allowance Holders
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      whose funds are not distributed to a lower level, funds availability can be confirmed in the ALLT or ALST
      Tables.  If funds are available, then the document can be committed.  However, if there are insufficient
      funds, the commitment may not be processed and it may be necessary to submit a reprogramming request.
      Although IFMSwill not lock out such a spending action unless the AH total is insufficient at the appropriation
      level, spending another RC's resources within the same Allowance violates Agency policy. If the Operating
      Plan has not been established at the RC level, an  office must  have alternate procedures in place to
      determine RC balances. See Section II of this chapter for more information on reprogrammings. The FCO
      initiates the reprogramming request based on their own organizational level.  For example, an FCO at the
      RC level would contact the AH. An FCO at the AH level would contact the SBO. Remember, the type of
      reprogramming required (RR or RP) will determine the level of approvals needed. If there are insufficient
      funds and a reprogramming cannot be accomplished, then the spending action cannot be undertaken.

      2. Entering  Documents into IFMS and Travel Manager

      If funds are  available, the FCO enters the funding document into IFMS as a Requisition (RQ) or into Travel
      Manager as a Travel Order (TO). While the RQ is  entered as a commitment, TOs are entered as an
      obligation. The FCO (or IFMS) will assign the document a Document Control Number  (DCN). The DCN is
      then written on the funding document. A DCN should never be written on  a funding document without
      having been entered into IFMS first. The number on the document and in IFMS must match. Putting the
      "next  in line  DCN" on a  document  without actually  committing  the funds into IFMS is poor fiscal
      management.  It is essential that data on funding documents be accurate, legible and consistent with what is
      entered into IFMS.  If any changes are made to the funding document after it has been  sent forward, the
      FCO must immediately notify the obligating official of the changes.

      It is critical that the FCO maintain organized and accurate records of all the funding documents processed
      throughout the fiscal year.  According  to EPA's Record  Management Manual, all funding documents and
      records related to  IFMS should be held for up to 3 years after they are filed and final payment has been
      made, then  retired to the Federal Records Center. After the document has been entered  into IFMS and the
      funds are committed, the  FCO may choose to transmit the document or return it to  the originator for
      transmittal to the obligating official, according to local office procedures.

      Obligating officials are EPA  employees who  have been delegated authority to  legally  obligate the
      government to pay for goods and services. Obligating officials, including Contracting and Grants Officers,
      know  how to process an obligation, and what constitutes evidence of the obligation.  Obligating officials
      forward a copy of the obligating documents to the SFO to officially record the obligation  of funds in IFMS.
      Obligating officials will also forward copies of the obligating document to the originator and/or to the FCO.
      The copies  may be marked "Receiving Report" and "Originator". If the originator is someone otherthan the
      FCO,  internal procedures should be established to ensure that the originator forwards a  copy to the FCO.
      This is especially true with Training Requests, which are obligated as Purchase Orders on the same form
      and usually returned to the trainee for submission to  the vendor.  It is important that the FCO maintain a
      copy of all obligating documents in their files to facilitate any reconciliation that may be necessary.

      3. Unfunded Procurement Requests (PRs) for Planning Purposes

      Many Federal Agencies use Planning  Purpose PRs (PPPRs) in their procurement process. Traditionally,
      these types of PRs are non-funded actions that are used in initiating procurement efforts that will take a long
      time to award, as well as for procurement actions that must begin on, or soon after, the start of the  next
      fiscal year (i.e., contracts for service-related contracts that an Agency uses every fiscal  year).

      Currently, in OAM, the Procurement Initiation Notice (PIN) has replaced the planning PR (PPPR) for new
      procurements using other than simplified acquisition procedures.  Exercising options,  renewing leases,
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      maintenance agreements and other requirements submitted subject to the availability of funds are
      initiated by the Project Officer (PO) using a PPPR. In order to start the procurement process in a timely
      manner, a PPPR is necessary to help the procurement office determine how much money the Agency
      needs for a given good or service, and using that estimate as a base during the negotiating process with a
      contractor. Once a contract is negotiated in terms of cost, a  Contracting Officer (CO) will then request a
      revised PR (from those offices that submitted PPPRs) that reflects the negotiated amount priorto obligating
      the contract.

      When planning PRs are done for a service that will be required in a new fiscal year, federal procurement
      regulations require that the PR contain the following statement: "This PR is for planning purposes only.
      does not constitute a  contract or a commitment to a contract, does not constitute a contract or a
      commitment to a contract,  and is subject to the availability of funds at the time of award." This
      statement is placed on PRs to ensure compliance with the Antideficiency Act (no funds may be obligated on
      any government contract in advance of an appropriation) and the bona fide needs rule (an appropriation
      may only be obligated to meet a legitimate need that exists during the period of availability). See Chapter 1
      for further information.

      A good example of when the Agency uses planning PRs is with maintenance contracts. Maintenance is a
      service that is continually required every fiscal year. To negotiate a price with a contractor for maintenance,
      the Office of Acquisition Management (OAM) first determines how many program offices within the Agency
      will need the service. OAM will send out an annual call letter  (during the summer months) requesting that
      those offices  needing maintenance service send them a planning PR containing a cost estimate (based on
      previous years) for how much the office expects to pay for their maintenance costs. These planning PRs
      are then used by OAM as a base when negotiating with a contractor for the actual cost of the contract.

      Offices that fail to provide a planning PR (or a revised PR after the contract costs have been negotiated) to
      OAM for a service or good, and then actually receive a service or good from a contractor may create an
      unauthorized procurement. See  Section I for more on unauthorized procurements.

      For more information on Planning PRs, see section 7.3.5.1,  paragraphs  C and E of the Contracts
      Management Manual at: http://epawww.epa.qov/oamintra/policy/cmm.pdf

      C. MONITORING FUNDS after  COMMITMENT

      It is important that the FCO monitor open commitments to ensure that the obligations are promptly and
      properly recorded in the IFMS.   There are  at least two methods for FCOs to  monitor the status of
      commitments and obligations in  IFMS: through IFMS on-line tables or through report printouts.

      When a funding document has  been obligated, it is usually assigned an Obligating Document Number
      (ODN), which will be used by the SFO to record the transaction  in  IFMS.  Your receipt of a copy of the
      obligating document should alert  you that the obligation transaction should soon appear in IFMS. By looking
      forthe ODN in IFMS tables or on  reports, FCOs can determine if the obligation has been properly recorded.

      1.    IFMS Tables

         There  are three tables in IFMS an FCO can use to see if a commitment document has been obligated:

         a.    The Document Cross-Reference Inquiry Table (DXRF) table is particularly helpful in determining
              whether a commitment has been obligated. The FCO can use this table by scanning on the RQ
              Document ID.  The  table displays the Obligating Document Number (ODN), the date obligated,
              and the amount. Also, the ODN will appear in IFMS in the form of a Contractual Obligation (CO),
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              Grant Obligation (GO), or a Miscellaneous Obligation (MO).  The view displayed on DXRF will
              not provide the current status of the obligation but the Orders Header Inquiry Table (OBLH) /
              Purchase Order Accounting Line Inquiry Table (OBLL) will.

         b.    The OBLH and OBLL tables display the current status of obligation transactions, including the
              total obligated amount, the total expended amount, the closed amount and any outstanding, or
              open, obligation amount. The OBLL table shows status byline; not forthe total obligation. Users
              simply need to scan on the Obligating Document Number (ODN) that was identified in DXRF. The
              expended  amount is the amount of the obligation that has been paid. The closed amount reflects
              the amount of the obligation that is no longer available for payments.  The outstanding amount
              identifies how much of the obligation is still open or unpaid.

      2.     Financial Data Warehouse (FDW) Reports

        FCOs, in monitoring their funds in IFMS, will need to use EPA's Financial Data Warehouse (FDW) or
        IFMS tables.

        EPA developed the FDW to consolidate financial data from various enterprise systems into a single
        relational database that provides user-friendly access through the use of standard  queries or an ad hoc
        software query package. The FDW is a  collection of data from the  following enterprise  financial
        information systems:

            1. Integrated Financial Management System (IFMS)
              IFMS is the  core financial management system supporting budget execution and  accounting
              functions.  IFMS supports the standard general ledger, is the source of data for preparing financial
              statements and budgetary reports and supports program officers in the management and control
              of funds. Transaction level financial data is copied to the FDW.

            2. EPA's Payroll System (PeoplePlus)
              PeoplePlus is EPA's new payroll system that supports the time and attendance functions. Payroll
              information by employee is copied to the FDW on a bi-weekly basis. Summarized information at
              the account level  is interfaced on a bi-weekly basis to IFMS.

            3. Combined Payroll Redistribution and Reporting System  (CPARS) (PeoplePlus module version)
              CPARS supports the adjustment or correction of payroll costs among accounts after employee
              compensation is made. Adjustments to payroll information by employee are copied to the FDW.

            4. Contract Payment System (CPS)
              CPS is used to process all payments for all EPA contracts.  Invoice, obligation and vendor data is
              copied nightly into the FDW.

            5. Integrated Grants Management System (IGMS)
              IGMS is used to manage all EPA grants. Award, disbursement, and grantee data is copied nightly
              into the FDW.  IGMS, however, does not track the individual disbursements or payments of the
              grants, and users must use IFMS or FDW to  obtain that information.

        All of the data that resides in the FDW originates from a separate official system. The copy of the official
        data that resides in the FDW is never changed. User access to the data is read-only. Access to sensitive
        data, such as that related to employee pay and awards, requires special access.
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      The data that is stored in the Financial Data Warehouse is available to EPA users in two options.

      1.  the user may utilize the EPA's Financial Data Warehouse via the EPA Intranet, or
      2.  the user may use direct access by using Lotus Approach, Impromptu, MS Access, and other tools.

      The EPA's Financial Data Warehouse Web Queries are available via a link from EPA's Intranet home page
      and consists of a list of reports from the various financial systems. The user will click on the report of their
      choice and enter the appropriate selection criteria to retrieve the data they requested. The FDW home page
      can be accessed at the following EPA intranet address:  http://intranet.epa.gov/fdw/

      Direct access to the FDW
      Direct access to the FDW Oracle database is available. Users will need to provide their own reporting tool
      and must have an Oracle client set up on their PC. Some reporting tools that are being used and known to
      work include Lotus, Approach, Cognos Impromptu,  Business Objects, Microsoft Access, plus the various
      Oracle reporting products. Any reporting tool capable of connecting to an Oracle  database or an ODBC
      data source should work.

      3.     Orbit Reports

        In FY 2004, OCFO launched ORBIT (OCFO's Reporting and Business Intelligence Tool). Although some
        EPA offices have already been using Business Objects, the software that ORBIT is built on, for a range of
        financial operations for the past year, the launch of the customized and centrally-managed ORBIT tool
        represents a significant milestone in OCFO's efforts to bring financial information to day-to-day decision
        making across the Agency.  The phased deployment of ORBIT will begin with an executive dashboard, a
        group of standard reports, and an ad hoc reporting tool for advanced users. Future development of
        ORBIT will focus on meeting financial reporting needs not addressed in Phase I in addition to addressing
        new report requirements including the introduction of programmatic and performance information to the
        reporting structure. Additionally, plans for ORBIT include reporting against additional data  sources not
        represented in the Financial Data Warehouse.  ORBIT will support a wide range of management, analysis
        and operation activities across the Agency. The goal of ORBIT is to improve  the Agency's  financial
        reporting capabilities, and significantly expand the ability to integrate financial, administrative, and program
        performance information providing managers and  executives the tools necessary to make informed
        decisions about their programs.

      D. RECORDING  OBLIGATIONS

        As mentioned earlier in Chapter 2, Obligating Officials are those individuals who have the legal authority to
        enter the Agency into contractual or other agreements that obligate Agency funds.

        An obligation can be described as a legal liability of the government to pay for those goods and services
        ordered or received.

        GAO's Principles of Federal Appropriations Law (also known as the Red Book) Chapter?, "Obligation of
        Appropriations", lists the five elements that must be present in all agreements (or contracts) in order for an
        obligation to take place. The agreement must:

               •   be  legally binding;
               •   in writing;
               •   for a purpose authorized by law;
               •   executed before the expiration of the period of obligational availability (before the funds
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                  expire), and;
                •  must call for specific goods, real property, work, or services.

        Only after the Obligating Official signs the agreement, can the funds be considered officially obligated, and
        posted as  an obligation in IFMS by the appropriate SFO.

        In its simplest form, the amount to be recorded as the obligation would be the contract price. However, in
        many types of contracts, the final contract price cannot be known at the time of award, and an estimate is
        recorded.  The basic principle-record your best estimate, and adjust the obligation upordown periodically
        as  more precise information becomes available-is used throughout the contract process until the costs
        are finalized. For long-term contracts, this final cost may not be known until many years afterthe contract
        was awarded and the funds have expired.

      E. AUTHORIZING PAYMENTS

      Many of the transactions that FCOs process will result in the establishment of obligations that will eventually
      require payment by EPA.  As noted in Chapter 2, Section M, the Accounts Payable Certifying Officer is
      responsible for the payment of contract vouchers or bills.  Within EPA, the process used in paying these bills
      is very sophisticated and detailed, and is done through the Agency's Electronic Approval System (EASY). A
      summary of the payment process using EASY is as follows:

      The Agency acquires goods and services through various contractual vehicles. As goods and services are
      delivered to the Agency, contractors will submit vouchers (i.e., "Public Voucher for Purchases and Services
      Other Than Personal," Standard Form  1034)  or  invoices to the Research Triangle  Park Financial
      Management Center (RTP-FMC) requesting payment for those goods or services. Contractors are also
      required, under the terms of their contract, to submit copies of the invoices to the respective PO  and
      Contracting Officer for their review and approval. Before RTP-FMC sends an invoice approval form to the
      appropriate  PO, they will  perform an  initial audit of the invoice.  The PO will then review the invoice,
      distribute the charges to the appropriate account code(s) on the form, and return the completed approval
      form to RTP-FMC recommending payment. Upon receiving the completed approval form, RTP-FMC will
      perform a final audit of the invoice, distribute the charges in the Contract Payment System (CPS), and certify
      the invoice for payment by the Department of the Treasury.

      Paper invoice approval forms are provided to POs via express mail service, internal office mail, pouch mail,
      facsimile transmission, and regular mail service. However, under EASY, the manual distribution of paper
      approval forms will be eliminated. POs will be notified via e-mail that an invoice is currently awaiting  his/her
      review and approval. The PO will approve, or disapprove, the contractor's invoice and will distribute the cost
      to the appropriate account code(s) on-line using EASY.  Once the PO completes his/her approval  and
      distribution, the approval form will be transmitted to CPS.  Transmitting the approval form directly to CPS will
      eliminate RTP-FMC's need to perform a second audit of the invoice and enable the automatic distribution of
      the PO's invoice charges in CPS. Once this information has been recorded in CPS, RTP-FMC will  review
      the approval data  and schedule the payment for certification by the Certifying Officer.

      Designated  EPA approving officials (i.e.,  Project  Officers, Alternate Project Officers, and Contracting
      Officers) will approve contractual invoices using EASY. EASY will provide EPA's approving officials with the
      ability to electronically authorize the payment of invoices and forward related payment information to CPS for
      payment processing.  The Contracting Officer or Project Officer will review the invoice  package and verify
      that the costs and rates being billed are reasonable and consistent with the terms of the contract. This
      review includes the contractor's performance and verifying the contractor bills for labor and direct/indirect
      costs.

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      For on-going contracts that are vouchered on a monthly basis, the Certifying Officer or their accounting
      representatives will first verify that sufficient unexpended funds remain in obligations to pay the invoice then
      forward the invoice(s) to the local Contracting Officer Representative (COR) in the program office for review
      and approval.

      If more than one account number and DCN appear on the invoice, the COR shall indicate the total funds to
      be charged against each account number and  DCN.  The COR shall also provide a basis  (such as
      percentages or ratios) for the finance office to follow in charging vouchered costs to each account number
      and DCN. Because many EPA contracts involve numerous tasks for the contractor to perform, the COR will
      delegate the review of invoices to the local Work Assignment Manager (WAM) or Delivery Order Contracting
      Officer Representative (DOCOR).  These officials are in a better position to approve the invoices since they
      work more closely with the contractor, and are more familiar with the actual goods and/or service being
      delivered. For more on the PO's rationale for charging costs, see Chapter 4, section F, "Split Funding with
      Multiple Appropriations".

      Any exceptions to using EASY for the approval of contractual invoices will be coordinated and monitored by
      RTP-FMC. For more information on EASY and the payment of invoices, see OCFO Comptroller policy No. 1 -
      08 dated  September 21, 2001.

      EPA acquisition regulations require that both the COR and WAM maintain files of approved invoices and all
      associated documentation. These files will eventually be sent to the Contracting Officer (CO) at the close of
      the contract.

      Once an order for goods or services has been placed, the Obligating Official will forward a Receiving  Report
      to the FCO, Originator, or an Authorized Receiving Official. Often, it is simply  an additional copy of the
      Obligating Document, usually pink.  Since the SFO  cannot process payments to vendors without this
      document, it is important for the FCO, Originator,  or an authorized receiving official to ensure that it is
      completed and forwarded to the appropriate Financial Management Center as soon as the  goods or services
      have been received. It is also important that the Receiving Report reflect the quantity received as well as the
      actual date of receipt of the goods/services, not just the date of signature, since the acceptance date will
      determine if any interest is owed to the vendor.

      Interest payments to a vendor are authorized by the  Prompt Payment Act. The Act provides that any Federal
      agency that acquires property or services from a vendor shall be liable for interest  if it does not make
      payment  by the required payment date (30 days after receipt of a proper invoice, or the acceptance of the
      good/service; whichever is later) unless the contract specifies some other payment due date).

      Interest payments will be paid automatically, and  will be charged to the same account as the original
      payment  and to the sub-object established for interest payments.  Notice of such interest payments will be
      provided to Allowance Holders through the voucher selection detail report, which  is  available for each SFO.
      Interest payment information is available in Financial Data Warehouse queries,  however, usually the only
      staff who can see this information are in the finance  offices. Temporary lack of funding  does not relieve the
      Agency from its obligation to pay interest penalties. Interest due but not paid to vendors will result in the
      Agency having to pay additional penalties.

      F. RECONCILIATION

      Reconciliation is the process of (a) ensuring that all funding transactions (commitments, obligations, and
      disbursements) are posted correctly in IFMS and (b) of resolving any discrepancies  so that all records are in
      agreement. During reconciliation, FCOs may encounter many types of discrepancies between what should
      have been committed or obligated and what is reflected in IFMS. The process of reconciliation is  important
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      in ensuring that the official IFMS records reflect all of the correct accounting data, including the DCN,
      appropriation, program results code, and object class, as well as the amount of the transaction.

      The first point of contact for any obligation in question is the obligating official who signs the obligating
      document and forwards it to the SFO. If it is the obligating document that is incorrect, the FCO must work
      with the obligating official to make the necessary amendments to the document. If the document is correct,
      but has been recorded incorrectly in the IFMS, the FCO must work with the appropriate SFO to resolve the
      discrepancies.

      G. RESOLVING ISSUES with COMMITMENTS and OBLIGATIONS

      In an ideal situation, funds are committed, fully obligated, and then fully disbursed. Since this scenario is
      often not the case, this section will cover some of the main problems encountered after funds have been
      committed, and how those problems may be  resolved.

      1.  Funds are de-committed

      Because a commitment is not a legal  promise to  pay, the originator and/or FCO may cancel it with a
      decommitment, prior to obligation, and commit the funds for another purpose. BEFORE CANCELLING A
      COMMITMENT. HOWEVER. THE FCO MUST TELL THE OBLIGATING OFFICIAL TO TERMINATE THE
      PROCUREMENT PROCESS AND RETURN THE ORIGINAL  DOCUMENTS TO THE AH/FCO TO BE
      FILED OR DESTROYED.  Failure to do so may result in an unwanted obligation  against the Allowance
      Holder  and  could exceed the funds available. Similarly, Travel Orders which are cancelled must be
      deobligated  from IFMS.

      2.  An increase of funds is needed on the  commitment

      Occasionally, an FCO (or the originator) maybe notified by the obligating official that more money is needed
      on the commitment than originally planned.  The FCO will be asked to increase the commitment amount in
      IFMS, and certify the availability of funds before the obligating official will  obligate the funds. On  certain
      documents such as simplified acquisitions there is a box to  mark indicating authorization to exceed the
      commitment by  10% (not to exceed  $100) so that  going back  to the FCO for small increases  is
      unnecessary.

      3.  Signed obligation not reflected in IFMS or on system reports

      If an obligation has been processed, but is not showing on IFMS screens or system reports, the FCO should
      notify the SFO and send a copy of the obligating document (copies should have been sent by the obligating
      official to either the FCO or originator).

      4.  Funds obligated for amount different from commitment

      A commitment remains completely open until an obligation is posted by the SFO.  While some spending
      actions take a long time for obligating officials to process, it is essential to monitor their status to ensure the
      actions are not lost or held up because  of insufficient or incorrect information.

      When an obligation is posted, one of three scenarios may occur which result in the obligated amount being
      different from the committed amount: 1) the obligation may be greaterthan  the committed amount because
      of a  posting error,  2) the  obligation may be  greater than the commitment if the purchase order value


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      exceeds the committed amount but is within the allowable tolerances established in IFMS, or 3) the
      obligation may be less than the committed amount.

      When obligating officials sign obligating documents and forward them to the SFO to be recorded in IFMS,
      they are required to make a notation on the document as to whether the obligation completely or partially
      fulfills the commitment. This step is critical in determining how the SFO processes the obligation transaction
      in IFMS. A notation to close the commitment tells the SFO to process the obligation as a "final."  If there is
      no notation on the funding document, IFMS will default to "partial" indicating that the SFO should
      process the obligation as "partial" only. The difference between a partial and a  final obligation is
      apparent only if the obligated amount is less than the committed amount. If a $100 commitment is obligated
      for $80 as a partial, the commitment will be closed for $80 and will remain open for $20. If the $100
      commitment is obligated for $80 as a final, the commitment will be closed for the full $100 and the unused
      $20 will be returned automatically to the Allowance Holder's (or  the AHRC's) operating  plan, available for
      other spending.

      If an open commitment results from the processing of a partial obligation, the FCO can easily recoup the
      unused dollars by processing a de-commitment transaction in IFMS.

    H.     PREVALIDATION OF FUNDS

      The Agency has adopted commitments as the basis for controlling funds priorto obligations. That
      process has been described to OMB as EPA's funds control system. Therefore, it is essential that
      all funds be committed in IFMS priorto obligation. Comptroller Policy Announcement 86-19 set forth
      policy and related procedures for "prevalidating" commitments  before award of certain  contract and
      assistance projects.

      Prevalidation is a term which means that obligating officials are verifying that funds have actually been
      committed in IFMS by the FCO before they proceed with the obligation of a procurement or grant. It is highly
      recommended that obligating officials do this as a way of protecting both themselves and the Agency.

      With prevalidation, obligating officials are able to achieve a level of internal control on funds.  The obligating
      official also has a greater assurance that they will not violate the Antideficiency Act by obligating funds in
      excess of appropriation limits or the OMB apportionment.

      In  the past,  OCFO  recommended that  a  copy of the IFMS  REQL table printout (which shows the
      commitment was properly recorded in IFMS) be attached to the obligating document since it would alleviate
      the burden of obligating officials needing to look up the commitment in IFMS themselves.  However, as
      previously stated back in Chapter 2 in the roles and responsibilities of an FCO, "FCOs ensure that once
      the funds have been committed, the funds  will not be altered, revised, or withdrawn prior to
      obligation without advance notice to the proper obligating official." Therefore, while providing a copy
      of the IFMS REQL is still recommended and preferred, the option of doing so can now be  left up to individual
      office's Standard Operating Procedures (SOPs). If a commitment has not been entered into IFMS, obligating
      officials should not process the procurement request  or assistance package until evidence of a  valid
      commitment is provided to them. It is also  recommended that obligating officials have the discretion to
      "freeze" commitments in IFMS in the amount equal to the amount in the funding package.  This way,
      obligating officials know that the funds will be available when the document is ready to be signed.

      SFOs must record obligations in IFMS even if the obligating document does not include evidence of
      prevalidation.


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      I. OVERRUNS/RECOVERIES

         Overruns are upward adjustments to recorded obligations of bona fide needs in the year in which the
         overrun  occurred. For the purposes of funds control, the term "overrun" will be used generally to
         encompass all additional legal liabilities that the Agency did not record correctly in IFMS.  These may
         occur for any number of reasons which include but are not limited to;

            1.      unrecorded obligations
            2.      price changes
            3.      cost-rate adjustments
            4.      final audit billings
            5.      court or other claims
            6.      payroll adjustments

         True "cost growth overruns," in the context of contracts management, are distinctly different from the
         situations above.  In the situations above in that when handled correctly, the Agency does not have a
         liability in excess of what is  recorded. This situation involves a "Limitation of Funds Clause" and/or
         "Limitation of Cost Clause"  in contracts,  and an "early warning" notice from the contractor to the
         Contracting Officer (that costs are likely to be greater than estimated), and a revised funding decision by
         the Agency. The purpose of this arrangement is to enable the Government to take notice of the status of
         contract performance and to take appropriate action. Based on the government's evaluation of the new
         estimate, the government may modify the contract to increase or decrease the cost, modify or cancel the
         work, or delay or accelerate the project.   If more funds are needed on the contract, the  Contracting
         Officer will coordinate with the Contracting Officer Representative (COR) and the obligation will be
         increased in advance of the liability occurring.

      Paying Overruns

         For overruns occurring in a current fiscal year that are the result of court settlement or other legal claim
         brought  on by  a  private individual (i.e FOIA requests, or Notification  and Federal  Employee Anti-
         discrimination and Retaliation Act - No FEAR - Act of  2002)  where a judge has ruled  against the
         Agency, the settlement and/or claim is paid directly out of the appropriate NPM's budget who's program
         relates directly to the claim.   Payment of legal claims against the Agency resulting from a group or
         company settlement  will usually be paid out of the Agency's Centrally Managed Accounts (CMA), as
         described in Section  L of this Chapter.

         Prior year overruns that lack appropriate funds to make the required payments in the current year should
         be obligated and paid with accounting data that is valid for the year of the overruns.  When these
         obligations or payments involve a legal requirement to pay using prior budget years funds (either
         expired multi-year funds but not canceled or prior-year no-year funds) the following applies:

         1.    Program Offices are not required to submit new commitments to cover these obligations—in
              fact the current system (IFMS) does not allow that option.

         2.    The Contracting Officer or obligating official should fund the obligation with a modification with
              the appropriate  accounting information, based on when the work was performed. Previous prior
              year funds on the contract, simplified acquisition or other type of order can be  increased  as
              appropriate to cover the cost overrun.

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         3.    Funds should not be requested from the Program Offices or Finance Offices.  Prior year funds
              are available and appropriate amounts should be obligated to cover the charge.

         4.    After the Contracting Officer or obligating official fund the charges, the  prior year funds can be
              used to pay the charges with the normal approval process.

         The Office of Budget monitors total appropriation and OMB apportionment authority to ensure funds
         are always available for these overruns. This will not cause an Anti-deficiency Act violation.  Office of
         Budget (OB) does not issue funds for this type of cost. The one exception would be for charges
         against the  multi-year funds that have been canceled (see Chapter 1, Section G "M" Account
         Legislation). For the multi-year appropriations, a reserve made up of prior year expired funds is
         available to cover these overruns. While these funds are  available to cover charges against
         overruns, they are not available to pay for new work.  For the no-year appropriations, the Office of
         Budget maintains a fiduciary reserve to cover such expenses. Approval is not required from the
         Office of Budget. However if the prior obligation is over $50,000, the obligating official or payment
         official should notify the Office of Budget, Control Team Leader, via email. The notification should
         include the total amount of charge (above and beyond the unliquidated obligation) broken down by
         the Budget Fiscal Year, appropriation and amount.

         If the overrun involves prior-year no year funds or multi-year funds that have been canceled
         (spending authority is canceled 9 years after year of authorization), the Director, Office of Budget, at
         his/her discretion, may ask the Program Office responsible to reimburse the fiduciary reserve for the
         overrun with current dollars if the Office of Budget believes there is a need to replenish the fiduciary
         reserve to ensure that the Agency maintains up to 1 % of current year appropriations to use as a
         fiduciary reserve.

      Recoveries are downward adjustments to recorded obligations. Examples of these are deobligated funds,
      invalid obligations, refunds, cost-rate adjustments, and rebates.  Refunds and rebates do not necessarily
      adjust obligations.  They sometimes offset to expenditures.

      Overruns and recoveries are routine.  They are a normal part of the accounting  process for recording and
      finally liquidating legal liabilities. There is no time limit for upward or downward adjustments which require an
      accounting entry when overruns and recoveries occur. They may occur several years after a contract or
      delivery order has been closed.  They also may occur well after an appropriation has expired and/or has
      been  cancelled and funds are no longer available to the Agency for obligation or expenditure.

      The following guidance is given  when handling overruns and  recoveries:

      1.    All invoices are to be forwarded to the appropriate accounts payable office (FMO) who reviews for
            validity based on holding an obligating document (e.g., a purchase order) and a receiving report.

      2.    If invoices are in excess of the recorded obligation, the FMO will require the Contracting Officer (in
            conjunction with  the Contracting Officer Representative (COR)) to establish whether the vendor is
            entitled to payment (whether EPA has a legal liability for the balance) before the Office of Financial
            Management  (OFM) will record the overrun  and make  payment.    If the adjustment is a non-
            discretionary       overrun and therefore there is a legal liability, the overrun must be recorded as
            soon as possible and there is no reason for OAM to call  OB. There is no decision to be made except
            exactly where OFS should post the charge (sometimes the OB has some discretion between
            overlapping appropriations that may have   been available at the same time). Whether or not there

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            are sufficient funds to pay the bill is an issue that OB will address using its authority listed below. If
            there are insufficient funds, see the section on Antideficiency Act (ADA) violations (Chapter 4-A-A).

      3.    E-Mail notification  is to be  provided to the Office of Budget (OB) by the FMO through the Regional
            Budget Office prior to posting any individual overrun in excess of $50,000.  This only serves as a
            courtesy notification to  alert OB of the action. Neither the OB nor anyone else can  commit expired
            funds or certify expired funds availability for which there may or may not be a lapsed unobligated
            balance in the U.S. Treasury. The OB must not be asked to do either. But again sometimes the OB
            has some discretion between overlapping appropriations may have been available at the same time
            and need to  be made  aware before the charge is posted.  An overrun less than $50,000 can be
            posted without this notification.

      4.    The Office of Budget  may exercise its authority to take any of the following actions relating to
            overruns or recoveries  based on the circumstances, timing, and amount of the transaction:

         Expired Funds:

         a. indicate the correct lapsed  unobligated balance in the U.S. Treasury (if it has not yet been cancelled)
            to post the accounting to within the Agency (sometimes  the  OB has some discretion between
            overlapping appropriations that may have  been available at the  same time);

         Unexpired Funds (and cancelled funds which must be paid from currently available appropriations):

         b. cover overruns from a  Centrally Managed Allowance (CMA);

         c. require a Program Office to cover the overrun from their current allowance;

         d. recertify recovered funds back to the Allowance Holder;

         e. withhold recovered funds to offset overruns, or fund a new initiative or high priority at the discretion of
            Agency Management;

         f.  net out overruns against offsetting recoveries; or

         g. credit expenditures which  automatically increase the available balance.

          With regard to overruns and recoveries  (upward  and downward adjustments)  all accounting
          adjustments  are properly chargeable to the original source-year accounting from which the liability
          (obligation) was incurred. The Principles of Federal Appropriations Law provides the rationale for this
          as follows:

          "Upon expiration of a fixed appropriation, the obligated and unobligated balances retain their fiscal-year
          identity in an "expired account" for that appropriation for an additional five fiscal years. As a practical
          matter,  agencies must  maintain separate  obligated and unobligated balances within the  expired
          account as part of their internal financial management systems in  order to insure compliance with the
          Antideficiency Act.

          During  the five-year period, the potential for an Antideficiency Act violation  exists  if identifiable
          obligations chargeable to one of those five years exceed the sum of the obligated  balance forthatyear
          plus the amount available for adjustment from the unobligated balance for the same year. Should this
          happen, the excess can be liquidated only pursuant to a supplemental or deficiency appropriation or
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          other congressional action. See B-179708-O.M., June 24, 1975 (applying same principle during first
          two post-expiration years under prior law).

          At the end of the five-year period, the account is closed. Any remaining unexpended balances, both
          obligated and unobligated, are canceled, returned to the general fund of the Treasury, (294) and are
          thereafter no longer available for any purpose.

          A repayment is credited to the appropriation initially charged with the related expenditure, whether
          current or expired. If the appropriation is still current, then the funds remain available for further
          obligation within the time and purpose limits of the appropriation and OMB apportionment. However, if
          the appropriation has expired for obligational purposes (but has not yet been closed), the repayment
          must be credited to the expired account, not to current funds.  See 23 Comp. Gen. 648 (1944); 6 Comp.
          Gen. 337  (1926).@

          EPA  requested and received the statutory authority for this phase to last for seven years after the
          period for which the appropriation is available for new obligations. This request was granted to start
          with two-year appropriations beginning in FY1999 (i.e. FY1999/2000 fund ing). Two-year appropriations
          enacted prior to FY 1999 continue to be cancelled 5 years after expiration.

          Tolerance Levels
          For small overruns, amounts have been established in IFMS which allow FMOs to pay bills that exceed
          the recorded obligations up to certain tolerance levels without requiring the obligation to be increased.
          The Transaction Category Reference Table (TCAT) shows the tolerance levels, based on percentages,
          and the maximum amount paid for certain transactions. Here are some examples:

               Transaction Description           Tolerance %      MAX AMT (Per Line)
               Unobligated Payment                10%               $500.00
               Contract Obligation                   10%                 500.00
               Payment Vouchers                   10%                 500.00
               Transportation Invoice                99%                 500.00
               Travel Vouchers                     25%                 300.00
               Miscellaneous Order                 10%                 100.00
               Direct Disbursement                  10%                 500.00

    J. RATIFICATION OF UNAUTHORIZED  PROCUREMENTS

    The act of ratification means to "approve or confirm". There are times when offices acquire items without
    utilizing the appropriate procurement process. Thus, a procurement was "unauthorized". An unauthorized
    procurement can  also occur when a procurement  action  was taken by  an individual who is without
    procurement authority, or when a procurement action is taken by an individual acting beyond the limits of
    his/her delegated procurement authority. Unless the item can be returned, an  unauthorized procurement will
    be considered a type of appropriation overrun since an upward adjustment to what was recorded (which was
    zero)  must  be made.

    If an office receives something that was never officially ordered, the office should return the item to the vendor.
    If, however, the  office decides to  keep the item, or if it was a service already provided (e.g. training) rather
    than a product, then the vendor may have legal entitlement to payment and a ratification  of the procurement
    must  be done.  However, OAM may not always approve an  unauthorized procurement.  For example, if
    appropriated funds were not available for a particular item, OAM may not approve the unauthorized


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    procurement.  When requesting a ratification to OAM, FCO's need to certify that funds were also available at
    the time the unauthorized procurement occurred.

      The following is a brief overview of the procedures for correcting an unauthorized procurement. For more
      information, see EPA Contracts Management Manual 1900, Section 1.1,"Ratification of Unauthorized
      Commitments" dated 4/7/04 at http://epawww.epa.gov/oamintra/policy/cmm.pdf

      1.   Concept

      OAM uses the term "Unauthorized Commitment," to mean an agreement that is not binding solely because
      the Government representative who made it lacked the authority to commit to that agreement on behalf of
      the Government. In this context, the term does not  relate to the FCO's process for the reservation,  or
      "commitment" of funds.  To avoid confusion, the term "Unauthorized Procurement" is used for this
      discussion.

      The provisions of this directive apply to all unauthorized procurements, whether oral or written and without
      regard to dollar value. Examples of unauthorized procurements are:

         a. ordering supplies or services by an individual without contracting authority;

         b. unauthorized direction of work through assignment of orders or tasks;

         c.  unauthorized addition of new work;

         d. unauthorized direction of contractors to subcontract with particular firms; or

         e. any other unauthorized direction which changed the terms and conditions of the  contract.

      2.    Ratification Approvals and Concurrences

      The Chief of the Contracting Office is the ratifying official, provided that this individual has redelegable
      contracting authority.

      For ratification actions which arise in regional offices or laboratory sites, the Chief of the Contracting Office
      to whom the activity functionally reports is the ratifying official, provided that this individual has redelegable
      authority.  The responsible Chief of the Contracting Office is the ratifying official for actions which arise in
      regional or laboratory sites which do not  functionally report to a Contracting Officer.

      All proposed ratification actions of $250,000 or more forwhich the Chief of the Contracting  Office is not the
      ratifying office shall be forwarded for review to the responsible OAM Associate Director prior to approval  by
      the ratifying official.

      3.    Procedures

      The procedures used by OAM in approving unauthorized procurements involve numerous steps.  The office
      involved must notify the cognizant contracting office by memorandum of the circumstances surrounding an
      unauthorized procurement.  The  notification  memorandum  shall include:  all relevant  documents,
      documentation  of the necessity for the work and benefit derived by the  Government, a statement of the
      delivery status  of the supplies or services associated with the unauthorized procurement, and  a  list  of
      procurement sources solicited (if any) and the rationale for the source selected.

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      If only one source was solicited, a Justification for Other than Full and Open Competition (JOFOC) will be
      required  in the memo. The memo must also address what measures will be taken  to prevent any
      reoccurrence of an unauthorized procurement. Most Assistant Administrators and/or SROs have an internal
      policy allowing for The Division Director (or equivalent) of the responsible office and the SRO to approve the
      memorandum.  If expenditure  of funds  is involved, the  program office shall include  a  Procurement
      Request/Order, EPA Form 1900-8, with funding sufficient to coverthe action. The appropriation data cited
      on the 1900-8 shall be valid for the period in which the unauthorized procurement was made.

      Obtaining approval for an unauthorized procurement may take some time. The payment of interest owed to
      the contractor may  become an issue as well.  OFM will determine if payment must be made for any late
      fees, and/or penalties.

      K.     RECERTIFICATION OF FUNDS

      Recertification is defined by EPA as the reissuance of deobligated prior year funds in a subsequent
      fiscal year by the Office of Budget (OB) to Allowance Holders (AHs) for commitment, obligation and
      expenditure. Deobligations are defined by GAO as "an Agency's cancellation of downward adjustment of
      previously recorded obligations". They may result from several factors, such as services that cost less
      than obligated amounts, change in requirements, failure to perform, termination, invalid obligations,
      refunds, cost-rate adjustments, rebates, etc.  Deobligated  resources for multi-year and no year funds do
      not need to be "recertified" IF they are reobligated in the same fiscal year they were issued. However,
      deobligated prior year resources for no-year appropriation  accounts DO NEED to be "recertified" before
      they are made available for reobligation.

      Recertification is only possible if:

      1. the life of the appropriation has not expired,

      2. recovery authority has been granted by the OMB in the Agency's apportionment, and

      3. the criteria listed  in Section III.K.2 are met.

      During the 2-year period of availability, deobligations of two-year funding are recovered to Allowances
      automatically and do not have to be  reissued.  For appropriations that do not automatically recover or
      carryover into the next fiscal year (Superfund,  LUST, Oil Spills, STAG, B&F), it is possible to reduce a prior
      year obligation (deobligation) and reissue those funds by recertification so they can be made available for
      obligation (recertification) in a subsequent fiscal year (reobligation).

      The Office of Budget (OB) estimates recovery authority for each appropriation and requests this authority
      annually in an OMB apportionment.  When prior year obligations are deobligated, the funds "recover" to the
      U.S. Treasury and not to Agency allowances.  Consequently, the funding must be retrieved by EPA using
      the recovery authority in its apportionment before the funds can be recertified to AHs.   It is possible for
      more  funds to be recovered during the fiscal year than the amount of the apportionment recovery authority.
      The Agency, however, only needs to establish as much recovery authority (of net recovered dollars) as it
      anticipates collecting, reissuing and obligating before the end of the fiscal year.

      1.  When funds do not have to be recertified:

      1.  As noted in section IIC of this chapter, any unobligated  funds from the EPM and S&T  appropriation
      automatically recover in their second year of availability and do not have to be recertified  to be reissued.

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      2. Funds that are deobligated during the same fiscal year in which they were originally obligated do not
      have to be recertified.  These funds automatically return to Allowance Holders as the  deobligation is
      processed through IFMS and the AH's unobligated balance is increased.

      3. For unexpired appropriations, recertification is not required by the OB when shifting funds between a
      contract  base and its option periods or between  contract option periods. However, these  offsetting
      transactions are legal deobligations and reobligations and do require apportionment recovery authority.
      As such, they will be  recorded and maintained in  the formal IFMS sub-system called the Contracts
      Payment System (CPS). The offsetting CPS entries, which net to zero, will not impact IFMS budget tables
      or create temporary fluctuations to  budget balances. The OB will monitor  overrun/recovery activity
      through IFMS reports to ensure that OMB apportionment authority is not exceeded.

      Also, all contract funding is subject to the "bona fide needs rule" which states that an obligation against an
      appropriation   is  valid only  if  it  relates  to  an actual  need  existing within  the  life  of  that
      appropriation. Contracting Officers (COs) and Contracting Officer Representatives (CORs) must ensure,
      depending on contract type, that obligations are entered into appropriately and responsibly.

      8.    Recertification is not required by the OB when EPA establishes large "umbrella" contracts for site
      activities (such as Superfund) and designates the specific sites to the vendor at a later date. The contract is
      recorded without site coding information in the accounting data.

      At the  point where sites  are designated by EPA, the  accounting  records are changed to reduce the
      "umbrella" contract accounting and designate the site-specific accounting. Such activity does not modify the
      contract, change the scope-of-work, change the funding, or change the Agency's legal liability in any
      way.

    5. Replacement Grants. When an assistance  agreement recipient is unable to perform the agreement even
    if the period of availability for obligation has expired, the Agency may issue a "replacement grant" to another
    recipient to complete the project.  The replacement grant concept is discussed in  Chapter 10 of GAO's
    Principles of Appropriations Law. An important feature of the replacement grant concept is that the scope of
    work for the replacement grant must be the same as the original (or the remaining portion of the original)
    grant.  Funds that are still available for expenditure (unexpired) may be deobligated and reobligated to a
    replacement grantee. This does not violate the bona fide needs rule because the replacement grant is simply
    fulfilling the purpose for which the funds were originally obligated. The obligation must be liquidated  prior
    to cancellation of the funds.

    2. When funds do need to be recertified:

    For all prior year no-year funds (ie. STAG, Superfund, LUST, and OIL), the unliquidated balances
    cannot be moved from one assistance agreement or contract to another without having the funds
    recertified.  Funds must be deobligated  in IFMS and recertified to the current fiscal year. These recertified
    funds may then be obligated on a new assistance agreement or contract.

    For assistance agreements,  recertification is required when funds from one budget period are transferred to a
    subsequent budget period through the execution of a continuation award.

    The requirements for recertification of no-year funds applies to all funding vehicles (contracts or grants)
    including grants that fall under 40 CFR § 35.118 which states:

    "Subject to any provisions of law, if a recipient's Financial  Status Report (FSR) shows unexpended

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    balances, the Regional Administrator will de-obligate the unexpended balances and make them available,
    to either the same recipient in the same region or other eligible recipients, including Indian Tribes, or other
    Tribal Consortia, for environmental program grants."

    This means that ALL grants (in both the Regions and HQs) containing no-year funds MUST go through a
    recertification process, whereby, OB will review and reissue the funds to the appropriate program office or
    Regional Administrator. This affects grant transactions normally called "carryovers" used for continuing
    state grants. For contracts, recertification  is NOT required when funds are between option years or
    between delivery orders within the same contract.  The purpose of recertifying no-year funds into the
    current FY follows the basic rule of Availability of Appropriations as to Time with 31 U.S.C 1502(a) and the
    bona fide needs rule in 31 U.S.C 1341 (a)  which requires that an obligation be recorded in the correct fiscal
    year that the need arose in - and not when the item or service is actually going to be used or delivered.

    Generally, Superfund resources are recertified back to the program from which the funds were
    deobligated. Any request directing resources into a program area other than where the funds were
    originally obligated will be coordinated with the Headquarters Program Office to ensure no impact to the
    program. Superfund funding deobligated  from other Federal agency allocation accounts are returned
    back to EPA.

    When they exist, administrative/operating expenses ceilings and travel ceilings can be recovered along
    with the associated funding and be recertified together.

    As with carryover, deobligated/recertified funds retain the Congressional restrictions as to purpose, time,
    and amount that applied when they were originally appropriated.

    Annual reprogramming restrictions, issued after the Enacted Budget is completed in the Advice of
    Allowance Letter, also apply to recovered  funds. EPA has authority to reissue or reprogram recovered
    balances for new priorities, up to the Congressional reprogramming limitation without Congressional
    notification  provided.
    Requests for re-issuance of deobligated funds for reasons other than those listed above,  such  as a new
    contract with a new scope-of-work, does require recertification by the OB before the end of the fiscal year
    to make the funds available for reobligation. AH recertification  requests for deobligated, unexpired, prior
    year funds must be sent in writing to the OB through the SBO/ARA. Approval of those requests is subject
    to a number of criteria, however, and there is no guarantee that the funds will be recertified. Allowance
    Holders do not have automatic entitlement to any recoveries requiring recertification until they
    have been reissued to them in IFMS by the OB.

    In order for the OB to approve a request for recertification, the following criteria must be met:

      The Agency must have received sufficient recovery authority in  the currently approved OMB
      apportionment for the specific appropriation for which funds are being deobligated.

      The Agency must have a sufficient recovery balance in the specific appropriation in which funds have
      been deobligated to cover both  a (management fiduciary allowance) and the recertification request.
      Overruns and recoveries from upward and downward adjustments to prior year appropriations continually
      offset each other and overruns must be offset before any recovery balance gets reflected.

      The specific deobligation for which the recertification  is being requested must have been posted inlFMSand
      be reflected as a recovered balance on  IFMS screens and computer reports.

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      The RPIO must have a sufficient net recovery balance to cover their recertification request after their
      overruns and recoveries have been netted against each other. It is very possible that an overrun by another
      AH in the same RPIO may have consumed the recovery.

      e. Once sufficient  recoveries  to cover fiduciary responsibilities have  accrued, the  OB  will consider
      recertification requests, by RPIO, on a first come first served basis.

      f.  The written  request for recertification must sufficiently justify the reissuance of the funding and be
      approved by OB.

      g. The  RPIO,  through a Contracting Officer or Grants  Award Official, must be able to obligate the
      recertifiedfunds before the appropriation expires and the  obligation  must be for a bona fide need of the
      current fiscal year.

    L.  CENTRALLY MANAGED ALLOWANCES (CMAs)

    At EPA, there are a number of centrally managed allowances which are controlled by the Agency's Allotment
    Holder (OB). The Advice of Allowance process for  funds control was  previously defined in Chapter 1 and
    detailed earlier in Chapter 3. These centrally managed allowances are  not established for the purpose of
    withholding funds from obligation. They are Advices of Allowance being actively managed and which may
    fluctuate during the year as funds are reprogrammed  in and out. These funds are available  for obligation
    directly from the centrally managed allowance by the Agency AH.

      The CMA AHs  are identified as follows:
      EPA HQ CMA	AH 92
      Cancelled funds / misc. items	AH 94
      HQ/NPM CMA	AH 9H
      Regional/NPM CMA	AH 9R
      Administrator's CMA	AH 9Z
      Allocation Transfer CMA	AH 93
      Cancelled funds issuances (M Account).AH 95

    AH funds in AH 95 for cancelled obligations which are reinstated have been disbursed directly from the CMA
    since FY 1991 by the agency Allotment Holder.

    These allowances, which are centrally managed for a variety of reasons, represent such amounts as:

    1.     authority (such as reimbursable authority and  recovery authority) that does not become a resource
           until agreements are signed, or collections are made, or deobligations occur (AH 92 and AH 94).

    2.     funding that has been apportioned to EPA but has been allocated to another Federal Agency and will
           be obligated outside of the  Agency.   Frequently, these allocation transfers are written into the
           legislative history.  The CMA ensures that EPA will not also obligate this funding (AH 93).

    3.     funding awaiting criteria for Agency-wide distribution; etc. (AH 9H and AH 9R).

    4.     small fiduciary amounts used historically as a primary funds control technique for protection against
           upward adjustments to obligations (overruns). Such sound management practice helps to ensure that
           Anti-Deficiency Act (ADA) violations do not occur in unexpired appropriation accounts.  A lapsed

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            unobligated balance protects against ADA violations from overruns in expired appropriations for the
            five years until they are cancelled (AH 92 and AH 94).

    5.      liabilities from  potential "M" Accounts reinstatements - In  Chapter 1  (section G),  "M" account
            requirements in the National Defense Authorization Act of 1990 were described. The process for
            reinstating and liquidating obligations that have been cancelled after 7 years involves a set aside of up
            to one percent  of annual appropriations.  EPA establishes this contingency amount for each fixed
            appropriation (no-year appropriations are not affected) in AH 92 & AH 94 at the beginning of each
            fiscal year. These funds are designated for potential legitimate liabilities related to obligations which
            were canceled  and  must subsequently be reinstated.  If obligations actually are reinstated, that
            portion of these funds are moved to AH 95. At the end of each fiscal year, any funds remaining in the
            AH 92 and AH 94 allowances are carried over (if two-year e.g. EPM, S&T, OIG) or lapsed if expiring
            (e.g. EPM C/O, S&T C/O) to cover liabilities for the five/seven years until that account is cancelled.
            For example,  for appropriations that expired on September  30,  1994 (FY 1994),  unliquidated
            obligations will be cancelled on September 30, 1999.  For more on "M" accounts, see Comptroller
            Policy Announcement 91-11 (AH 92 and AH  94) and 96-05 (Revised Procedures for Requesting M
            Account Funding).

    6.      actual disbursements for legitimate liabilities which were cancelled in accordance with "M" Account
            legislation but needed to be reinstated to  pay subsequent bills received. Funds to reinstate and
            liquidate these obligations are moved to AH 95 from the contingency funds held in AH 92 and AH 94
            for this  purpose (AH 95).

            There a number of factors that are considered in establishing CMA levels including:

            1.  The general overrun or recovery history of a particular appropriation (e.g. the SF and R&D/S&T
               appropriators have always had higher net recovery levels than AC&C/EPM).

            2. The amount historically held for a specific appropriation and how successful that has been.

            3. The relative level of AM@ account reinstated data that must  be paid from current year accounts.

            4. The size of the appropriation (is it $100 M or $1 billion).

            5. Lastly, OB expertise, special circumstances, and the comfort level of OB Director are contributing
               factors. CMAs are so named because activity is monitored and levels are actively increased or
               decreased by OB as circumstances dictate.

             Whether it is a 2-year or no-year account (e.g. unlike the process of expiration then cancellation in 2-
             year appropriations, all no-year unobligated balances have rolled forward. The SF CMA must protect
             the appropriation against all liabilities since FY81 there is a Comptroller General decision that
             basically says: no-year liabilities from  prior years cannot be paid from subsequent appropriations in
             the same account. In  other words, a $4 M overrun to FY95 SF cannot be paid from our FY99 SF
             appropriation, or FY96-FY98 either. It is therefore, important to carry over a significant amount of old
             no-year funding from year to year.
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    IV.  MANAGEMENT REPORTING and END-OF-YEAR CLOSEOUT

    AHs/FCOs usually prepare summary level Status of Funds reports for their management in accordance with
    the standard operating procedures of their organization. The report is usually prepared monthly and frequently
    takes the form of a Excel spreadsheet showing the status  of funds at the appropriation level, the program
    results code/object class level, or by organization. The spreadsheet can include columns showing 1) the
    Approved Operating Plan, 2) commitments, 3) obligations, 4) disbursements, and 5) the available balance. To
    get the necessary information for these spreadsheets, FCOs can use either Orbit reports (when available),
    Financial Data Warehouse reports, or print the appropriate screens from IFMS.

    Procedures do not generally change to  accommodate end-of-year closeout, although the frequency of
    reconciliation and reporting should increase. If reconciliation is performed routinely and faithfully throughout
    the year, there should not be a need for extensive corrections at year end.

    A.   UNLIQUIDATED OBLIGATIONS

    An unliquidated obligation is the amount of outstanding obligations or liabilities that have not been expended or
    liquidated (GAO Budget Glossary).  The implications  of an obligation not being fully paid is that either all the
    goods or services have not yet been received and accepted by EPA or that the Servicing  Finance Office (SFO)
    has not received the supplier's (or vendor's) final invoice or bill.  If a final invoice has been received and the
    obligation  is fully satisfied the SFO should remove (deobligate) any  remaining obligation  in IFMS  thus
    liquidating the entire recorded obligation.  In order for the SFO to deobligate funds so that obligations equal the
    disbursed amount, the FCO and/or originator should determine that there will be no further payments against
    the obligation. Any deobligations of current year funds automatically return to the Allowance Holder's available
    IFMS balance.  If funds are deobligated after an account has expired, the recovered balance is posted to an
    expired Treasury account and is only available to the Agency thereafter to liquidate legal liabilities (overruns)
    to the previously recorded obligations.

    Unliquidated balances for all prior year no-year funds cannot be moved from one assistance agreement or
    contract to another without having the funds recertified. Funds must be deobligated in IFMS and recertified to
    the current fiscal year. These recertified  funds may  then be obligated  on a new assistance agreement or
    contract. This policy applies also to grants that fall under 40 CFR 35.118.  Also, any movement of funds
    between assistance agreement or contracts is still subject to the Agency's competition policies.

    For assistance agreements, recertification is required  when funds from one budget period are transferred to a
    subsequent budget period through the execution of a continuation award.

    Reviews of unliquidated obligations are required bylaw (31 U.S.C. 1554(c)). The Office of Inspector General
    (OIG) within EPA specifically requires the agency to perform an unliquidated obligations review on an annual
    basis. The Office of Financial Management (OFM) is responsible for initiating and coordinating the Agency's
    review of unliquidated obligations as often as deemed appropriate. The Agency's policy and procedures on
    how unliquidated obligation reviews are to be conducted is  described below.

       1. OFM will provide the reports (with the exception of contract and interagency agreement obligations) and
         detailed instructions that form  the  basis on which the reviews  of unliquidated obligations will be
         conducted. The reports will identify inactive unliquidated obligations of 180 days  or more (90 days for
         travel). OFM will verify that these reports match the Agency's official accounting records in IFMS. OFM
         submits these reports  to the Office of Acquisition Management (OAM),  the Office of Grants and
         Debarment (OGD), appropriate Headquarters Allowance Holders, and Regional Contracting Officers, for
         review.
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      2. The reviewing official analyzes the unliquidated obligations to identify those items which are not valid or
         viable. A certification that the review was conducted is then provided by the certifying official to the
         Director, OFM.

      3. The Senior Resource Official (SRO) will have primary responsibility for certifying that the review was
         completed  for their RPIO.   At  Headquarters, the SROs will  have their Allowance Holders and
         Responsibility Centers review all inactive, unliquidated travel and simplified  acquisition  obligations.
         Regional SROs will ensure that appropriate staff review all inactive, unliquidated obligations administered
         by their  Region.

      Procedures

      1. Contracts

      The Research Triangle Park - Finance Center (RTP-FC) will submit the unliquidated obligations report
      directly to the contracting offices (both in Headquarters and in the Regions) for review.  The contracting
      office will take action to deobligate all invalid/non-viable obligations in coordination with the  Contracting
      Officer Representative (COR) and the FCO. Forthose deobligations involving unexpired funds, the FCO
      must send a PO/PR to the contracts office so that a funding modification can be made on the contract. The
      Contracting Officer (CO) or FCO can then send the signed deobligating document to the finance center so
      that the funds can be deobligated.  This process will ensure that the FCO is aware  of any increased
      balances appearing in IFMS forthe program office's budget. Afterthe funds have expired, the  FCO will not
      need to be  involved in the process. The CO can coordinate directly with the finance office.

      For inactive contracts with a balance under $100, the Chief, RTP-FMC is delegated authority by the Director,
      OAM to routinely deobligate remaining funds. Before processing deobligations, RTP-FMC will notify the
      COs of the proposed actions. If these deobligations  involve unexpired funds, the COs and/or POs must
      again ensure that the FCO is also aware of these deobligations taking place. If the COs do not wish funds
      to be deobligated, they must contact RTP-FMC within 30 days.

      2. Interaqency Agreements (lAGs)

      For Headquarters administered lAGs, the Cincinnati FC will distribute the listing of Headquarters lAGs to the
      Grants and IAG Management Division (GIAMD).  For Regionally administered lAGs, the listing of Regional
      lAGs will be distributed to the remote printer bins of the Regional SROs ordesignees. Reviewing officials in
      GIAMD and the Regions will discuss the projects with Project Officers to determine whetherthe obligation is
      valid and viable.  If it is, the reviewing official  will ask the Project Office to request an appropriate project
      period extension.

      If the Project Officer indicates inactive projects are  complete, GIAMD staff or the Region  will contact
      Cincinnati-FMC to ensure that there are no unpaid bills and to verify the unliquidated obligation amount.
      GIAMD or the Region will notify the other agency of the unliquidated amount and  advise that the amount will
      be deobligated and the project closed out unless the other agency notifies EPA within 30 days of the date of
      notification  that the amount is incorrect or disputes the close-out for some other reason. Cincinnati-FMC will
      record a deobligation when a written notice is received from GIAMD or the Region after the 30 days.

      3. Grants and Cooperative Agreements

      For Headquarters  administered grants and  cooperative  agreements,  OFM will distribute the listing to
      GIAMD. For those administered Regionally, the list will be distributed to the Regional SROs or designees.
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      The Assistance Award Official or designee must deobligate invalid or non-viable items by (1) soliciting
      feedback from the program office and taking action on their requests to deobligate funds under the
      grant/cooperative agreement, or (2) taking action on a final Financial Status Report (FSR) from the recipient
      indicating an unobligated balance of Federal funds. The Assistance Award Official should take aggressive
      follow-up action to ensure timely submission of either document.

      If a final Financial  Status Report indicates a balance of Federal funds that has not been obligated by the
      grantee,  the  Headquarters/Region  Grants  Award  Official will (1)  deobligate  the  balance if the
      grant/cooperative agreement has ended, (2) consult with the Project Officer if there is a subsequent budget
      period for which the funds may be carried  over to allow the recipient to continue work, or (3) issue an
      Assistance Adjustment Notice or amendment directing the relevant Finance Office to take appropriate action
      as specified by the Award Official or designee.

      All other items (e.g. travel, simplified acquisitions, Government Bills of Lading, Federal Express,
      and utilities')

      OFM will distribute reports sorted by Allowance Holder Responsibility Center (AHRC) to the remote printer
      bins of Headquarters SROs and Regional SROs ordesignees.

      The AHRC will annotate directly on the report items to be deobligated and submit a copy of the report and a
      signed cover memorandum to the appropriate SFO.  Based on these annotations, the SFO will record the
      deobligation for those items which have been designated as invalid and/or non-viable.

      For travel and miscellaneous items under $100 (except for Permanent Change of Station travel and billings
      from other Federal agencies) on which there  has  been no  activity for 90 days and for which there  is no
      justification, the SFO will routinely cancel the unliquidated obligations.

      AH/FCOs are encouraged to use direct  IFMS access to deobligate travel.  AH/FCOs staff should also
      ensure that final travel vouchers are marked "FINAL" before sending them to their SFOs for payment. This
      will alert the SFO to record the voucher as  a final payment in IFMS which will deobligate any remaining
      balance.  Paying travel vouchers as final will minimize the review burden of unliquidated travel orders.

      Other Requirements

      The RPIO and the AH will continue to review all current year obligations and commitments on a routine
      basis to ensure they are valid and accurate and properly recorded in IFMS. The FMO will continue to certify
      the final General Ledger Trial Balance that includes both current and prior year obligations.

      To assist the  RPIO and AH in performing the reviews, the FMOs are  required to retain all (except for
      Superfund) financial documents  (including supporting documentation) for three years  after project
      completion or delivery of goods and services. Superfund legislation requires that all financial documents be
      retained for 20 years.

      For more on information on conducting unliquidated obligation reviews, see Office of Comptroller Policy
      Announcement 96-04 "Review of Unliquidated Obligations."

    B.   END-OF-YEAR CLOSE OUT

    As the fiscal year nears completion, OFM and the Office of Budget OB issue workplans and timetables for
    closeout activities of the IFMS budgeting and accounting modules.  The memos issued to SBOs, AHs, and
    FCOs provide key cutoff dates for budget and  financial transactions (i.e. final reprogrammings,  entering
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    commitments into IFMS, submitting purchase requests/orders and grant funding packages to OAM and
    GIAMD). Expiring funds that remain uncommitted in IFMS maybe reviewed by the OB as early as the end of
    August for possible redistribution to other Allowance Holders. The Agency will make every attempt to redirect
    funds that become available to ensure that expiring funds are carefully managed to achieve maximum benefit.

    No expiring or lapsing funds should be requested and/or obligated except to meet a legitimate, or bona fide
    need arising in  the fiscal year for which the appropriation was provided.   The "bona fide needs" rule is
    explained in detail in Chapter 2,  Federal Laws and  Guidance. Restated, the rule means that one year
    appropriations are available only for the  needs of the current year and are  not available for the needs of a
    future year.  For multiple-year appropriations, the rule is that the appropriation is available  for obligation to
    meet a bona fide need covered by the period of the appropriation. The bona fide need rule does not apply to
    No-Yearfunds prospectively (forward funding). It only applies by prohibiting satisfaction of a prior year liability
    with  subsequent appropriations. As previously discussed, the bona fide need for an assistance agreement
    arises when the Agency decides to stimulate and support the recipient's project rather than when that project
    will be physically carried out or payments made under the assistance agreement.

    In addition, for expiring appropriations, the Agency's policy for obligations  for services on non-severable
    contracts requires that performance starts no later than September 15 in order to be considered a bona fide
    need. The program office must include a statement with the commitment that explains why it is necessary that
    the service(s) start in September,  and that they are not severable in  nature.

    Statutory and regulatory changes  (Federal Acquisition Streamlining Act of 1994 (FASA) section 1073, and
    Federal Acquisition Regulation (FAR) 37.106), permit agencies to obligate annual ("one year") appropriations
    to acquire up to twelve months of severable services that begin in one fiscal year and end in the next fiscal
    year. The EPA Office of General Counsel has opined that these provisions also apply to acquisitions funded
    with  multi-year appropriations (such as the  "two-year" appropriations generally provided to EPA). What this
    means, for example, is that EPA may obligate FY2004/2005 funding to fund twelve months severable services
    that begin in FY 2005 and end in FY2006.  [Severable services are those which are continuing and recurring
    in nature (such as window washing services), while non-severable services are those that are characterized as
    a single undertaking (conducting a study and preparing a final report thereon). Non-severable services may
    be charged to the appropriation current at the time the contract was made, even though performance carries
    over into a subsequent fiscal year.

    In preparation for the closing of the fiscal year, particularly the last few weeks of September, FCOs should
    review all open  commitments in IFMS on a daily basis to verify that commitments are being obligated in a
    timely manner.

    As mentioned earlier, an end-of-year memo goes  out which establishes closing/cutoff dates for financial
    transactions. OAM and GIAMD will have specific deadlines regarding the  receipt of funding documents.
    Priority will be given to processing financial transactions that are  citing expiring funds. However, as long as a
    funding document was received in OAM/GIAMD by the established cutoff date, the transaction should be
    processed by the end of the fiscal year.  FCOs and the obligating officials should keep in contact with each
    other to make sure the document(s) does indeed get obligated by the end of the fiscal year.

    Open commitments should be reviewed  in the following manner:

       1.  Identify commitments that should and/or must become obligations by September 30. The FCO should
         ensure that the dated obligating document reaches the proper SFO by September 30. The FCO should
         send the SFO a duplicate copy of the obligating document  if they do not receive the original document;

       2.  Unnecessary commitments should  be cancelled and decommitted;
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       3.    Identify commitments that will not be obligated by September 30. If a commitment using expiring
       funds will not be obligated by September 30, the commitment should be cancelled and the funds used for a
       priority which can be obligated by the end of the fiscal year.  If appropriate, funds received in the new fiscal
       year may be used for the cancelled item  by renewing an action in the procurement process.

    At the end of the "12th month" accounting period (through September 30), the Allowance Holder and their
    RPIO must review their final commitment and obligation data and forward any corrections to their SFO. After
    September 30th, a "13th month" accounting period remains open for two weeks or less to capture documents
    signed prior to midnight September 30 which are still coming through the process to be recorded. At the end
    of this 13th month period, OFM officially reports end-of-accounting data to the Treasury and to OMB.
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    CHAPTER 4: SPECIAL SUBJECT ITEMS

      I. SPECIAL SUBJECT ITEMS

      A. VIOLATIONS:  CREATION, REPORTING, and PENALTIES

      1. Antideficiency Act (ADA) Violations
      Section 1514 of Title 31 of the U.S. Code requires each head of a Federal Executive Department or Agency
      to prescribe  by  regulation  a  system of administrative control designed to  restrict obligations and
      expenditures to the  amount of budgetary resources available.  This Agency regulation is subject to the
      approval of the Director of the Office of Management and Budget OMB.  This Act also provides for reporting
      of violations of these regulations and for penalties. These requirements are supplemented by instructions
      and a sample letter contained in OMB Circular A-11 (Part 4) (formerly OMB Circular A-34). The  restrictions
      of the Antideficiency Act ADA (31 U.S.C. 1341 -42,1349-51, and 1511-19) are the basis for EPA's policies on
      controlling funds.

      In its current form, 31 USC 1341, 1342, and 1517(a) and the ADA prohibit:

        a. "Making or authorizing an expenditure from, or creating or authorizing an obligation under, any
        appropriation or fund in excess of the amount available in the appropriation or fund unless
        authorized by law."  An accounting error occurring when  an obligation  is posted to an incorrect
        appropriation  is subject to  audit and an accounting correction.   If posting that correction violates
        appropriations as to amount, an ADA violation will have occurred as well.  Statutory ceilings may also be
        a basis for an ADA violation.

        b. "Involving the government in any contract or other obligation for the payment of money for any
        purpose in advance of appropriations made for such purpose, unless the contract or obligation is
        authorized by law"  An obligation may be incurred only after Congress passes and the President enacts
        (signs) the appropriation bill.

        c. "Accepting voluntary services for the United States, or employing 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"; and

        According to OGC, the voluntary services prohibition does not apply when a non-Federal party agrees in
        writing not to submit a claim for compensation to the Government for actions taken under a "gratuitous"
        service agreement. B-204326 (July 26, 1982); B-302811 (July 12, 2004)

        d. "Making obligations or expenditures in excess of an apportionment or reapportionment, or in
        excess of the amount permitted by agency regulations" (promulgated under 31 U.S.C. 1514).
        Apportionment totals and apportionment categories, as well as any conditions on the use of funds, are
        also a basis for Antideficiency Act violations.  Additionally, if more funds have been obligated than legally
        available, deobligating or receiving new quarterly funding does not eliminate the need to report the
        violation. Failure to post an obligation to an agency's financial system when incurred, or delaying this
        posting, cannot prevent a violation.
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      Reporting Violations

      In accordance with the instructions and examples contained in OMB Circular A-11 (Part 4) (formerly OMB
      Circular A-34), the steps for handling potential and actual Antideficiency Act violations are as follows:

         a. Any EPA employee is required to notify the Agency Allotment Holder (Office of Budget Director) upon
         learning of an apparent violation. Verbal notification should immediately be followed up with a written
         detailed description of the apparent violation.

         b. The Chief Financial Officer (CFO) and the Office of Budget Director (Agency Allotment Holder) must
         ascertain whether or not a violation exists.  This determination is generally achieved with the assistance
         of an Office of General Counsel (OGC)  legal opinion.  While reviewing, auditing, and examining
         authorities may detect violations, only the CFO and the Office of Budget Director (with the assistance of
         OGC) can make the actual determination.  Once it is determined that a violation does exist, the Agency
         is required to report it  immediately.

         c. At EPA, the Administrator reports ADA violations through the  Director of the Office of Management
         and Budget, to the President, Congress, and the Comptroller General. The letter format for doing this is
         contained in OMB Circular A-11 (Part 4) (formerly OMB Circular A-34).

         d. The organization responsible for the violation must provide a comprehensive plan  of action for
         preventing any future recurrence. This plan should be coordinated through the Office of Budget Director
         for recommendations  and submitted to the EPA CFO.

      Penalties

      31 U.S.C 1341 (a), 1342, and 1517(a) provides that an officer or employee of the U.S. Government violating
      the Antideficiency Act shall be subject to:

         a.  suspension from duty without pay; or

         b.  removal from office.

      In addition, the employee may be subject to "appropriate administrative discipline" including:

         a.  a letter of reprimand for the official personnel record of the employee;

         b.  an unsatisfactory performance rating;

         transfer to another position;

      An officer or employee of the U.S. government knowingly and willfully violating the Antideficiency Act shall
      face a criminal penalty of being "fined not more than $5,000, imprisoned for not more than 2 years, or both."

      2.  EPA Administrative Control of Funds Violations

      Any officer or employee of the Environmental Protection Agency has violated the OCFO's system of
      administrative control of funds if he or she:
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         a.    authorizes or creates an obligation or makes an expenditure in excess of the amount permitted by
              the EPA's system of administrative funds control;

         b.    makes allowances in excess of an apportionment pending the passage of appropriations;

         c.    issues agency allowance in excess of the related apportionment, by quarter or total for the year;

         d.    makes or authorizes an expenditure or creates or authorizes an obligation without authority;

         e.    authorizes expenditures or an obligation under any appropriation or fund in excess of the amount
              available;

         f.    involves the EPA in a contract or other obligation for the payment of money for any purpose in
              advance of appropriations made for such purposes, unless the contract or obligation is authorized
              by law; or

         g.    accepts voluntary service for the United States or employs personal services in excess of the
              amount authorized by law, except in instances of emergency involving the safety of human life or
              the protection of property.

      For current funds, "amounts available" are equal to the lesser of apportionments, allocations, or budgetary
      resources available for  obligation.  For expired appropriations, "amounts available" include amounts
      available for restoration to the account. Violations occur when adjustments are made that cause obligations
      in expired appropriations that retain their fiscal year identity to exceed the apportionment for the year in
      which such obligations were required.

    B.   OPERATING UNDER A CONTINUING RESOLUTION (CR)

    Congress sometimes does not pass an Appropriations Act before October 1 of the new fiscal year. Until
    Congress officially determines how much spending authority it will provide for the new fiscal year, it may pass
    a CR to allow agencies to continue operations until the budget is passed.  OMB apportions the Continuing
    Resolution with an automatic apportionment bulletin. The bulletin will state the rate that expenditures may be
    incurred under the CR. Under a CR, the Office of Budget provides guidance to each AH stating the level/rate
    of expenditures which the Allowance Holder may incur by Appropriation/Allowance.  This  guidance may
    include a temporary Advice of Allowance. AHs must restrain spending during aCRto ensure that EPA does
    not violate Congressional limitations or OMB limitations.

    If Congress does not pass the budget by October 1, or vote on a CR, EPA issues orders regarding
    possible shutdown of all non-essential operations. See EPA Order 1000.26A entitled: EPA
    CONTINGENCY PLAN FOR THE SHUTDOWN OF THE AGENCY DUE TO A  FUNDING HIATUS
    for more detailed  information on shutdown.  This order can be viewed on-line at intranet URL address:
    http://intranet.epa.qov/rmpolicv/ads/orders/1 OOP 26a.pdf

    C.     PAYROLL MANAGEMENT and TRACKING/PEOPLE PLUS

    Since payroll is such a large expense at EPA, AHs/FCOs must monitor and control it carefully. Personnel,
    Compensation & Benefits (PC&B) costs must be continually reviewed and projected for the entire fiscal year.
    Necessary steps must be taken to ensure that costs remain within all approved limits. Further explanation of
    accounting for  personnel charges is located in RMDS Chapter 2550A entitled Financial Management of
    Personnel.  EPA  has purchased PeoplePlus - an integrated management system for Human Resources,

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    Benefits, Payroll, Time and Labor. Additional payroll guidance and instructions for the People Plus system
    and software will be distributed under separate cover through normal agency channels.

            1. Payroll Accounting

            Obligations for  monthly  payroll costs  are  generated  by  the biweekly submission  of time and
            attendance forms for all employees. After processing payroll for each pay period, actual PC&B costs
            are posted and an accrual for the remainder of the month is calculated based on the actual payroll
            data.  PC&B actuals plus the remaining accrued balance of the month are displayed in the IFMS
            tables SASP or  SAIN under budget object class Code 10 (PC&B). Both actuals and accruals are
            displayed as disbursed in the Expended Amount field.

            Each employee has one or more standard fixed account numbers (FAN) to which all payroll expenses
            for the employee are normally charged. The fixed account number(s) corresponds to the program
            results code that supports employee work years and personnel costs. It shows whether an employee
            is  paid with management and support funds, or from environmental program funds.  It is important
            that the employee is assigned a fixed account number (or numbers) that corresponds to the work the
            employee actually performs so that expenditures for specific environmental programs or activities are
            accurately reported. As each pay period ends,  some or all of the employee's payroll expense can be
            charged to account numbers other than their  FAN, if appropriate. Consequently, payroll accruals
            could be inaccurate if employees had any unusual payroll distributions to other account codes during
            the last previous pay period.

            2. Split-funding Payroll  Costs

            As noted above, program offices may charge an employee's payroll costs to more than one account.
            This can be done through direct charging as needed or by an established  methodology.  No
            documentation or approval is needed to direct charge.  However, in order to use a methodology,
            written documentation must be submitted to the SFO at the beginning of each fiscal yearwhich shows
            how the different percentages of the appropriations benefiting are to be charged throughout the fiscal
            year.  Specific names of the employees, their social security numbers,  and their FAN ARE NOT
            needed  in the documentation.  Of course, only appropriations available for PC&B may be used in
            split-funding  payroll costs.

            3. Calculating (Full Time Equivalent) FTE Usage

            An "FTE" or "work year"  is the  number of compensable hours that an employee working full time
            would work in a given year. A work year has either 2,080 2,088, or 2096 compensable hours based
            on the calendar  year and the total to be used is published annually in OMB Circular A-11.

            To calculate FTE usage, compute the total  number of hours worked in an organization, including
            holidays, leave, co-ops, and stay-in-school hours. Divide this number of hours by the compensable
            hours in the fiscal year to find the FTE  usage  to date. Dividing this FTE usage by the FTE ceiling
            gives percent usage.  This fraction should be  about the same as the fraction of the year that has
            passed. On  March 31st,  for example, 50 percent of the fiscal year has passed,  so you should find
            50 percent of the FTE ceiling used. If FTE  usage is too high or low, the Allowance Holder should
            discuss this with the SBO, for possible redistribution of FTE ceiling or other action as necessary.
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    D.     WORKING CAPITAL FUND SERVICES

    EPA's Headquarters & Regional Offices procure certain general administrative services through the Agency's
    Working Capital Fund (WCF), as authorized by EPA's 1997 Appropriation Act and Section 403 of Public Law
    103-356, the  Government Management  Reform Act (GMRA).  EPA Order 2570.1 identifies the WCF
    overarching authorities and policies.

           1. WCF Service Agreement (SA)

           The WCF SA is comprised of two parts: 1) WCF Order Form, which identifies the quantity of services
           ordered by the customer, and 2) WCF Funding/Requisition Form which provides the accounting
           information to pay forthe services ordered. The WCF Funding/Requisition Form is organized so that
           customers use a unique DCN for each service agreement. This allows for customers to readily obtain
           financial information on each service from the Agency's IFMS.

           The SA contains information on the types of services needed by the customer for a fiscal year, and is
           approved and signed at the appropriate Allowance Holder/Responsibility Center (AH/RC) level,  as
           determined by each Senior Resource Official (SRO).  The AH/RC may centrally fund services for an
           entire RPIO,  AH, or at the AH/RC level.  FCOs must sign each WCF Funding/Requisition Form to
           indicate that funds are available, committed, and appropriate forthe WCF services identified.

           2. Committing and Obligating Funds

           There are three ways that customers can fund their WCF SA: 1) unexpiring two-year and/or no-year
           funds, 2) new funds, or 3) a combination of both. If customers include new funds, FCOs must ensure
           that a "Subject of Availability of Funds" statement is cited on the WCF Funding/Requisition Form. If a
           service or services are funded using multiple appropriations, FCOs must have a logical methodology
           to explain how each appropriation benefits from the services received.
           To commit funds for a WCF SA, FCOs should follow the same policies and procedures outlined in
           Chapter 3, Section III for committing funds in IFMS. Commitments on the WCF Funding/Requisition
           Form occur in EPA budget object class 38, using sub-object classes 2575 (programmatic) and 2576
           (administrative). See the following section (I) of this chapter titled, "Administrative v. Programmatic"
           Philosophy, for clarification of what constitutes an administrative or programmatic cost. After funds
           have been committed  in IFMS, the FCO provides the IFMS REQL screens as part of the WCF SA
           package to confirm the commitment and reservation of funds in IFMS.  FCOs must ensure that
           REQL screens  match the "lines of accounting" on the WCF Funding/Requisition Forms.
           Offices should also establish a separate WCF SA for each Capital Planning and Investment Control
           (CPIC) system.

           The WCF Activity Manager acts as an obligating official and is authorized to obligate funds committed
           by Agency offices. An obligation occurs  when the WCF Activity  Manager signs  the WCF
           Funding/Requisition Form.  The WCF SA, signed  by both the customer and WCF Activity, is
           forwarded  to  the RTP-FMC for posting the obligation  in IFMS. The WCF Activity provides a signed
           copy of the WCF Funding/Requisition  Form to the customer. It contains the  assigned SA number
           which is the customer's Obligation Document Number (ODN) in IFMS.

           As noted in Chapters,  section ING, if an FCO decides to decommit or cancel funds which have been
           committed, the FCO  must notify the  WCF Activity  Manager, who is authorized  to approve the
           deobligation of funds.  For WCF SAs, the FCO notifies the WCF Activity Manager of the intent and

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           rationale to decommit the funds. Funds will not be decommitted unless there is a mutual agreement
           between the customer and the WCF Activity Manager.

           3. Monitoring Disbursements

           Consistent with the WCF SA, the WCF Activity earns "revenue" from the delivery of WCF services to
           customers, and provides monthly Billing Statements to the customers. Upon receipt of the Billing
           Statements,  customers are  responsible  for analyzing  the  reports  and  monitoring funds
           expended/disbursed for services delivered.  This monthly monitoring is conducted by the WCF SA
           originator and the FCO.

           FCOs should use FDWdata and reports to assist in monitoring WCF funds. By monitoring year-to-
           date disbursements against funds obligated for each WCF service, customers can determine if the
           service quantity ordered (units) should be increased or decreased with respect to the original SA.

           FCOs may also monitor their monthly disbursements against their WCF SAs by using reports
           available in e-Business located on the Agency's Intranet at -
           http://cfint.rtpnc.epa.gov/otop/business/FY2007info.cfm  For FY2008, use the same web site, and
           simply substitute FY2008 as the fiscal year.

           4. Modifying WCF Service Agreements (SA)

           A WCF  SA modification can be initiated by a customer at any time during the FY. A modification is
           required for additional funds to be added, or surplus funds to be removed from the original WCF SA.
           FCOs must use the original DCN assigned to the WCF service to be modified (refer to the original
           WCF Funding/Requisition Form).  Additionally,  FCOs must maintain the same sequencing of
           accounting information as referenced using the WCF Requisition Line numbers from the original WCF
           Funding/Requisition  Form.  If additional "lines of accounting"  are required representing additional
           sources of funds, the next available WCF Requisition Line number should be used.

           If higher service levels are  required, FCOs should  increase funds using a WCF SA modification
           request. Likewise, if service quantities should decrease, FCOs should request a deobligation of funds
           from the WCF Activity Manager.  The actual deobligation, once agreed to by the obligating official
           (WCF Activity manager), is  actually accomplished  by RTP-FMC.  Prior to initiating a request for
           deobligation,  FCOs  must ensure that sufficient  funds remain available,  or unliquidated, to pay
           remaining  bills for the service for the remainder of the FY.  Using the customer's WCF SA number
           (ODN), the FCO should access the IFMS OBLL table that shows the amount of funds obligated and
           expended  against the DCN/ODN for the service, using the MO transaction code. FCOs must attach
           IFMS OBLL screens (date  stamped  to indicate when the  table was printed) for all  WCF SA
           modification requests involving the deobligation of funds for WCF services.

           Once the FY is over, customers may request a  deobligation of any excess or remaining unexpiring
           funds from their WCF SA by initiating an FY closeout modification. To request a deobligation of
           funds, customers should follow the end-of-year closeout procedures issued annually from OFM.
           Once the FY closeout modification  has been accepted by the WCF Activity manager, associated
           funds will be deobligated by the RTP-FMC. Customers may use these funds for their new FY WCF
           SA, or request a reprogramming into other budget object classes to spend the funds, as needed.
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    E.     U.S. GOVERNMENT PURCHASE CARD PROGRAM

        EPA originally implemented the U.S. Government purchase card program in 1987. The purchase card is
        the preferred method to purchase and pay for micro-purchases (currently stated as less than $3,000) in
        accordance with Federal Acquisition Regulations (FAR).  The use of the purchase card expedites the
        acquisition of essential supplies and  services, streamlines payment procedures, and reduces the
        administrative costs associated with traditional paper-based payment methods. The EPA purchase card
        program operates in a manner similar to any standard commercial credit card system, except that there
        are additional controls and limitations for Government purchases. Cardholders and Approving Officials
        (AOs) are advised that U.S. Government purchase cards are for OFFICIAL USE ONLY AND ARE NOT
        AUTHORIZED  FOR PERSONAL USE, IDENTIFICATION PURPOSES, OR OTHER NONOFFICIAL
        BUSINESS PURPOSES. CARDHOLDERS SHALL NOT LOAN OUT THEIR CARD. Cardholders will be
        held personally  responsible for any unauthorized use of the card.

        The Office of Acquisition Management (OAM), the primary Agency office forthe Agency's Purchase Card
        program, lays out specific policy and procedures in Chapter 13 of the Agency's Contract Management
        Manual, Section 13.3 Using the Government-wide Commercial Purchase Card which can be found at:
        http://purchasecard.epa.gov/files/Purchase  Card Policv2006.pdf.  The OCFO Purchase Card website
        can be found at: http://intranet.epa.qov/ocfo/finservices/ccard.htm

        The following portions are excerpted from the EPA Guidelines for Use of the U.S. Government Purchase
        Cards because  they are of particular importance with regards to funds control.

        General Information

        The Cincinnati  Financial Management Center (C-FMC)  is responsible for processing the Agency's
        purchase card payments to the contractor bank. The C-FMC processes and certifies a daily payment to
        the bank. They also serve as the Agency liaison working with the bank for payment, dispute resolution and
        monthly reconciliation. Analyses on  purchase card transactions are  performed to detect  and  resolve
        funding problems and provide appropriate corrective  measures to cardholders and finance personnel.

        It is the FCO's responsibility to certify the availability of funds. As noted in Chapters, Section IIIA6-the
        FCO should also verify that the correct signatures are in place, since some Bankcard transactions may
        also require a Contracting Officer's signature too. The FCO must ensure that the financial transaction is
        compliant with Agency  financial policy and procedures and that all accounting data is accurate and
        complete. The FCO will enter the commitment into the Integrated Financial Management System by
        assigning a document control number (DCN) to each individual purchase card transaction. Alternatively,
        the FCO may provide cardholders with a default DCN for all purchase card transactions throughout the
        entire fiscal year.  These options are discussed further in the "Purchase Card Funding Options and the
        FCO" section (see page 102).

        The FCO should maintain the proper documentation for internal control purposes. The FCO shall review
        all purchase card transactions at least monthly to ensure that all transactions are properly cost allocated to
        initiate and/or provide assistance as needed, and to provide an opportunity for the FCOtodecommitany
        unused funds. Typically, every Agency purchase cardholder shall establish and maintain an official log
        which includes a record of every transaction completed. The log may be in written or electronic form.
        However, it must be a separate and discreet document, and it must be an orderly, legible accounting of all
        purchase card transactions made by the individual cardholder.
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        The requirement of needing EPA Form 1900-8,  "Purchase Request/Order" is no longer required for
        internal Purchase Card transaction processing since there is some duplication with the Purchase Card
        log. The  decision on using the form should be a local option for each individual office.  However, for
        detailed signature and documentation record keeping purposes, offices should consider continue use of
        the form.

            1)      Every cardholder shall have a log that shows every transaction completed bythat cardholder.

            2)      The official cardholder log shall be kept on a fiscal year basis and shall be maintained
                   on a 30 day billing cycle. (The EPA Purchase Card begins on the 28th day of each month
                   and ends on the 27th day of the following month. The EPA Fleet Card billing cycle begins on
                   the 24th day of each month and ends  on the 23rd day of the following month.)

            3)      At a minimum, the log shall contain a brief description of the items/services ordered,
                   the vendor or merchant used, the  date of the order, the total cost, the date the item was
                   received/signed for by a 3 rd party, and the date of payment (also referred to as the EPA cost
                   allocation).

            4)      In addition to the log, there may be other forms of supporting information necessary to
                   fully document the order. These items shall also be maintained either in paper or electronic
                   form in such a manner that they are physically with the respective log entry or can be easily
                   merged and/or reconciled with the corresponding order. Examples of such  supporting
                   documentation are as follows:

                   a.  Vendor/merchant receipts or confirmations associated with the orders;
                   b.  Vendor invoices (if provided);
                   c.  Documentation of required prior approvals;
                   d.  Memoranda forthe Record (MFR) documenting any problems or unusual circumstances
                     surrounding an order, and;
                   e.  Verification of receipt by independent 3rd party.

            5)      The log needs to include any additional documentation required by organizational or local
                   procedures, or as required by the purchase cardholder orthe Approving Official (AO). As with
                   all acquisition records, the cardholder's log and all  supporting documentation  shall be
                   retained in the immediate office fora period of at least three years after the end of the fiscal
                   year in which the transaction was  completed.

        Purchase Card Funding Options and the FCO
        The following sections give the FCO information on the two options available to set up commitments for
        the cardholders to  use in cost allocating transactions through EPA's  Intranet Purchase  Card Cost
        Allocation System. The option used is entirely dependent upon local procedures and/or arrangements
        established between the FCO and the cardholder. For further information on these options, as well as
        visual examples, see Paragraph K in Chapter 13, Section 13.3.5.2 of OAM's  Contract Management
        Manual and the website mentioned at the beginning of this section. OAM's Purchase Card  Team also
        provides a very helpful on-line refresher training site located at: http://purchasecard.epa.qov/node/77

        1.   Default Purchase Card Commitment
            This option allows the FCO to establish a base commitment by assigning a default document control
            number (DCN) that cardholders can use the entire fiscal year. The commitment is recorded  by the
            FCO in the Integrated Financial Management  System (IFMS) under Object Class (OC) 2620. When
            funding splits for appropriations and/or Program Result Codes (PRCs) are necessary, multiple lines of
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           accounting must be recorded at the ratio that will be used for the cardholder's purchase. Up to ten
           lines of accounting can be recorded against a DCN to accommodate this split. NORMALLY, THIS
           COMMITMENT IS $100.00. When cardholders  approve a purchase in the EPA system (Purchase
           Card Allocation Page), they will enter the default DCN and select the correct OC, from the dropdown
           menu, forthat purchase. New commitment line(s) will be created with the selected OC. All allocations
           processed with the OC 2620 commitment may be entered with a Site Project Value for Superfund or
           IT Cost Tracking. The generic IT Site Project Value is provided if needed and may be changed. The
           original commitment against OC 2620 will remain the same in line 001 of IFMS.

        2  Single Purchase Card  Commitment
           This option allows the FCO to establish individual DCNs, for each purchase card order using the
           appropriate OC. When funding splits for appropriations and/or program result codes (PRCs) are
           necessary, multiple lines of accounting must be  recorded at the ratio that will be used for the
           cardholder's purchase. When the cardholder cost allocates a transaction, each commitment line will
           be reduced accordingly. It is important for the cardholder to select the assigned OC forthat DCN.
           However, if the cardholder selects an OC that does not match the original commitment, that OC will
           be ignored since the commitment has been previously established. If a transaction is cost allocated
           using 98% or more of the commitment, the remaining balance will be liquidated.

           If the final transaction amount exceeds the commitment by more than $100 or 10%, the transaction
           will not process. The cardholder will receive an email from the CFC notifying them that the transaction
           has been reset for cost allocation. It's the cardholder's responsibility to contact the FCO to make the
           necessary correction.  If the default DCN funding option will be used, the FCO must inform the
           cardholder of the default DCN and BOC to select for their purchase card transactions.  If  a single
           purchase card  commitment is selected, the FCO must establish a procedure to inform the cardholder
           of the DCN assigned for each purchase. Cardholders must have this information before they begin to
           allocate the purchase in the system at: http://oasint.rtpnc.epa.gov/fmc2/card.card welcome

        Obligation Processing
        On a daily basis, Cincinnati-FMC compiles a list of all completed transactions cost allocated on the EPA
        website, and those transactions approved through the allocation site. From this data, C-FMC creates the
        obligation lines for input into the EPA Integrated Financial Management System (IFMS). The transaction
        will be divided among the obligation lines in the same ratio as the commitment. In cases where there are
        multiple funding lines, the obligation amount will equal the amount of the purchase as provided by the
        cardholder in the EPA cost allocation system. The obligation document number will consist of the last two
        digits of the fiscal year, the two character letters >BK=, and a 6 digit sequential number.

        Payment Processing
        During the creation of obligation documents, payment documents are also created. The payment amount
        will be the same as the obligated amount and the obligation document will be closed. This procedure will
        eliminate the need to perform the unliquidated obligation review for purchase card transactions since the
        obligation and payment amounts will  be equal. The C-FMC reviews, certifies and processes  a daily
        payment to the contractor bank. As soon as the goods or services have been received and accepted, the
        cardholder must cost allocate immediately. EPA makes daily payments to the contractor bank using the
        Agency cost allocation system information, and earns cash rebates for expedited payments. The
        cardholder will receive  an  electronic notification that states:"The cardholders  and Approving Officials
        receive email notifications of charges received on their card and those pending allocation." For additional
        information on obtaining Approval Official Transaction Reports see http://purchasecard.epa.goV/node/6
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        Reconciliation
        EPA has developed an  Intranet web-based purchase card transaction review page that electronically
        captures all purchase card transactions. The purchase card transaction review page is available to the
        purchase card community to perform oversight of cardholders' transactions.  Cardholders, FCOs, and
        AOs can review the activity of each cardholder over a chosen time frame to ensure the cardholder has
        correctly reconciled the funding for transactions and cost allocated them. FCOs and AOs have access to
        valuable transaction data to  help facilitate budget decisions and identify problems with cardholder
        purchasing activity. Since all activity is captured on this page, detailed reports are available on purchase
        card transactions.

        Agency Rebate from Contractor Bank
        The Agency receives a quarterly rebate check from the contractor bank. The dollar amount of the rebate
        is calculated on points earned. The faster the cardholder cost allocates, the faster the Agency pays and
        the more base points the Agency earns. Once the rebate check is received, the CFC identifies purchase
        card payments by the Cardholder's organization, either NPM or Region. The rebate is then distributed
        based on the organization's ratio of purchases at the beginning of each quarter.

        Funds Control Officer (FCO) Requirements
        FCO's  need to decide the method their office will use to account for the purchases and  payments. If
        option one is selected the FCO must create a commitment in IFMS and let the cardholder know which
        commitment to use for their purchase card transactions. If option two is selected, the FCO's must work
        with the cardholders  to establish  a procedure to inform the cardholder which DCN to use for each
        purchase before the cardholder begins to input the accounting data for the  purchase payment on the
        allocation page.

        Responsibilities of Funds Control Officer
        FCOs have specific responsibilities associated with the use of Purchase Cards in their program offices.
        First, the FCO must ensure that what is being procured is not a restricted item for Purchase Card
        purchases.  A great deal of this information is covered on the on-line purchase card refresher training
        course located at http://purchasecard.epa.gov/node/77 and a list of Frequently Asked Questions (FAQs)
        that pertain to certain purchases: http://purchasecard.epa.goV/node/4

        Prohibited Purchases
        The  U.S. Government Purchase Card program was developed to be as nonrestrictive  as possible;
        however, contractual  terms, procurement  policy and regulations require that certain  restrictions be
        imposed. The following  is the list of items/services that are restricted  for purchase by all cardholders
        (including purchasing  agents), and therefore, may not be acquired using the  Purchase Card:

                   Personal use supplies/services (items not necessary for EPA work).
                   Personal services (employer/employee relationship)
                   Purchase of individual meals, drinks, and rooms at hotels or motels for lodging, or any other
                   employee travel-related expenses (use EPA approved travel credit card for this purpose.)
                   Purchase of any form of unauthorized entertainment.
                   Purchase of shirts, jackets and other items of clothing with  or without the EPA or a program
                   office logo unless the purchase is specifically authorized under Agency policies governing
                   purchases of clothing (EPA Order 4800.1) or non-monetary awards (3130 A2 Recognition
                   Policy and Procedures  Manual)
                   Purchase of gasoline  or oil for government owned vehicles (use EPA approved  fleet
                   management cards for these purchases.)
                   Cash advances (use EPA travel card)
                   Purchase of airline, bus, boat, or train tickets (use EPA travel card).
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                   Employee rental or lease of motor vehicles, land, or buildings of any type.
                   Long term rental and maintenance agreements.
                   Construction, alteration or repair of public buildings.

        For a more  complete list and additional guidance see  Section 13.3.5.4 of the Contracts Management
        Manual, Purchase Card Prohibitions,  Restrictions, and  Priority Use of Sources located at -
        http://purchasecard.epa.gov/files/Purchase Card  Policy2006.pdf.

        According to OGC, the purchase card may be used to  purchase meals, light refreshments, and to rent
        space in  hotels for training  conferences as authorized "necessary expense" under EPA policies
        implementing the Government Employees Training Act.  The purchase card  may also be used to
        purchase lodging and meals for groups of EPA employees on travel provided the purchase is financed
        with travel funds. In addition, the purchase card may be used to acquire non-monetary award objects
        (e.g. plaques, pen and pencil sets) consisting of $75.00 or less, entertainment and light refreshments at
        official EPA awards ceremonies to recognize the achievements of Federal employees as authorized by
        the Government Employees Incentive Award Act.

        For information on when EPA may use appropriated funds to purchase food see EPA Order 1900.3 Food
        at an EPA Conference, Workshop, Ceremony, Reception or Observance.  See also 5 U.S.C. 4501.06

        Record Keeping
        Cardholders must maintain the following records:
        a.  Delegation of Procurement Authority or certificate of appointment (SF1402) retained in permanent file
           or prominently displayed at work location.
        b.  A copy of the Purchase Card log for each 30-day billing cycle. The  cardholder records each
           purchase made during the 30-day billing cycle on this log.
        c.  The cardholder must maintain their Statements of Account (along with all original documentation) for
        at least 3 years (FAR 4.805(b)).

        As with all acquisition records, Purchase Card logs and  all supporting documentation shall be retained for
        a period of at least 3 years after the end of the fiscal year in which the transaction was completed.

    F.  ORDERING GSA OFFICE SUPPLIES

        Effective September 30,2004, EPA's Corporate Express Blanket Purchase Agreement (BPA) became the
        mandatory mechanism for ordering all office supplies.  See OAM's web pages:

        1.  http://epawww.epa.gov/oamintra/hpod/bpagen.pdf  on BPAs, and/or Simple Acquisitions Made
                Easy (SAME)
        2.  http://epawww.epa.gov/oamintra/policy/sacq.pdf and
        3.  http://purchasecard.epa.gov/ for additional information.

        At Headquarters, employees purchase supplies by ordering from a GSA catalog that includes complete
        descriptions and pictures of every item. Although offices may use their Purchase Card to order supplies,
        GSA uses a more streamlined billing process by encouraging offices to use "Activity Address Codes" that
        are managed through the Cincinnati-FMC. The following steps briefly describes how the program works:

        1.  Program offices identify the individuals they want to be authorized to order supplies and complete
           GSA Form 3525 to "register" authorized buyers with the GSA Customer Supply Center (CSC).


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        2.   EPA's property management staff assign Activity Address Codes to each Responsibility Center
               staff, and access codes are assigned to each person authorized to order supplies (the access
               code tells GSA where to deliver the supply order). GSA catalogs are then given to authorized
               personnel.

            3.  Program offices submit EPA Form 2550-10 (Miscellaneous Obligation Document) to Cincinnati to
               establish beginning balances in each account (similar to the Purchase Card program).

            4.  Authorized buyers contact a CSC by phone, fax, or Internet to place their order.

            5.  The CSC will send the order an itemized receipt to the customer the next day and invoices to
               Cincinnati twice a month.  Emergency orders can be placed and picked up the same day.

            6.  Cincinnati-FMC receives and pays bills and sends transaction reports to each Responsibility
               Center once a month.

        Since the GSA charges will result in a debit to the program office's resources, it is important for the FCO
        to keep track of the expenditures as they are incurred.  A log, record book, or spreadsheet should be
        maintained for each GSA purchase showing supplies purchased, the costs, and the date the purchases
        were made. The buyer should complete the ordering forms before requesting FCO approval in order for
        the  FCO to certify that funds are available for the expenditure.

        As noted  in step #5, the customer receives the receipts for the purchases. The FCO should always be
        sure to get the receipt (or a copy) back from  the buyer, since it will be important in reconciling any
        accounting errors with Cincinnati-FMC,  as well as in receiving proper credit if items need to be returned to
        the  CSC.

    G.  "ADMINISTRATIVE" vs. "PROGRAMMATIC"

            1. Philosophy

            The concept of costs being either "administrative" or "programmatic" is a functional distinction based
            on purpose. In FY1994, to implement restructured appropriations and to control costs as being either
            administrative or programmatic, the Agency revised its budget object class and finance sub-object
            class coding to reflect this philosophy.  As of FY 2004, we continue to track  administrative and
            programmatic costs from obligation data.

            The purpose for which funds are obligated can generally be described as being either "administrative"
            or "programmatic". Please note that whether a particular obligation is administrative or programmatic
            is determined by what is being bought and the purpose forwhich it is acquired, not by who is buying it
            or by which organization they are employed.

            Please  read the entire philosophy and the examples  to acquire a clear understanding  of the
            distinctions being  drawn.  Individual  portions of this section, taken out of context, do not provide
            sufficient guidance.

            Administrative Costs are:

            a.  staff-related - these costs include items for groups of employees such as rent for staff space and
            consumable office supplies that would not be incurred if the Agency did not have a workforce.

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               b.  support-related - including  all  of the Agency's major support contracts for general-use
               facilities, maintenance, etc. Also, includes costs associated with Program Office management
               staff activities, administration and management.

               c.  individual-related - includes personal desk-top office equipment and includes general staff
               training (as opposed to technical program-specific training) that provides knowledge that can be
               utilized by the employee upon leaving their present position.

               d.  overhead-related - including management and administrative functions that all government
               and business organizations have and which are not related to environmental programs.

            Programmatic Costs are:

               a.  environmental mission-related - these costs are specifically driven by environmental statute
                   and program activities rather than the in-house office staff involved with the programs.
                   Regulation development and water quality monitoring activities are examples of costs that are
                   mission-related.

               b.  acquisition or assistance-related - include items historically termed as "extramural" which are
                   directly related to activities outlined by environmental statute and are traditionally obligated
                   through contracts/IAGs or grants/cooperative agreements.

               c.  field-related - include program activities such as hazardous waste clean-up, environmental
                   emergencies, field sampling and testing & monitoring, etc.

               d.  special-use facility-related -  infrastructure operating costs (rent, utilities, etc.) associated with
                   dedicated single-purpose special  use facilities including the Regional ESD labs and the
                   others listed in Section 2A.

               e.  unique and limited use-related - includes cost of items with limited application or unique use
                   for specific programs that have no general use elsewhere.  Examples would include weapons
                   and ammunition unique to enforcement  work and cost recovery data collection  &
                   enforcement efforts unique  to Superfund

            The APPLICATION OF THE ADMINISTRATIVE VS PROGRAMMATIC PHILOSOPHY TO SOME
            SPECIFIC AREAS FOLLOWS:

               a. Appropriation Layoffs

               With the exception of Superfund Information Technology (IT), layoffs between  appropriations
               must be moved against the same  accounting sub-object classes in  both appropriations.  No
               layoffs are permitted between administrative and programmatic  object classes except for
               Superfund IT.

               IT Cost Layoff/Methodology - EPA and the Appropriation Committees have  agreed that a
               percentage of Superfund IT timeshare contract costs could be charged as programmatic. Under
               the revised definition, a methodology may be  used to allocate an appropriate  amount of
               IT timeshare costs to programmatic contracts.  Several options for methodologies are  being
               examined, including percentages of mainframe computer CPU hours used to  support Program
               Office database systems, as well as percentages of administrative vs. programmatic application
               systems.
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               For appropriations other than Superfund, it will still be necessary to separate obligations into
               identifiable units  that can  be  determined, justified  and direct  charged as  either 100%
               administrative or  100% programmatic.  Restated, other than for Superfund,  obligations that
               cannot be segregated, justified, and directly charged to a programmatic object class will still have
               to be charged to an administrative object class.

               b. Training &  Training Materials

               EPA and the Congressional appropriations committees have agreed that scientific, technical and
               program specific costs of training and training materials are programmatic.  All other training is
               administrative. This determination is to be made on a course by course basis. For example, the
               OHROS Core Curriculum Training Program is itself neither administrative nor programmatic. The
               specific nature of the course being offered determines whether the  cost is administrative or
               programmatic, not the training program and not the position or employing office of the individual
               receiving the  training.  Programmatic training must  be for the benefit of the Agency, not the
               employee's career development, and be program-specific to the extent that the knowledge or
               skills would not be useful elsewhere  in the Agency or the U.S. Government. In general, there
               should be very little programmatic training within administrative organizations (e.g., OARM,
               OCFO,  OGC, OIG,  AO).   Even within  Program  Offices, the  designation of training  as
               programmatic must be selective  and  be a unique requirement because of employment at EPA.
               Programmatic sub-object classes 25.02, 25.59, and 25.61 are appropriate for such instances.

               c. Printing of  Public Information

               EPA and the Committees have agreed that the cost of printing environmental materials for public
               awareness (to publicize EPA and its programs) to be part of the Agency's operating costs, and
               therefore, administrative.  Programmatic printing would encompass scientific and technical
               reports  and  documents and  program-specific  material intended  to generate  or direct
               environmental action (such as materials to promote recycling). Sub-object classes 24.11 and
               24.13 are available for appropriate  programmatic printing costs.

               d. Field Activities

               EPA and the Congressional appropriations committees have agreed that items unique to program
               activities in the field may be  charged  to programmatic sub-object classes. For example, in the
               area of Criminal Investigator enforcement activities, programmatic costs would include such items
               as: guns, ammunition, specially equipped vehicles  and boats, local/State  police data lines,
               surveillance equipment,  and other such items that have a use limited to the  enforcement
               program. Conversely, passenger cars, fuel, and parking space leases; car phones and paging
               service, etc. are to be charged to administrative sub-object classes as  items that are not unique
               to enforcement work.  Other field activities, aside from Criminal Investigation, can be funded
               similarly  by applying the same criteria to  determine whether costs  are  administrative or
               programmatic. This would include items  unique to Superfund removal and  cleanup activities, etc.

               e. Specifically Funded Items

               Except  for PC&B and  Travel  which are  always  administrative, trackable  items  such  as
               Congressional Add-ons which are issued to the Allowance Holders  through specially coded
               allowances are provided only in programmatic budget object classes. Because Congress did not

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               provide additional Operating Expenses Ceilings to cover these items, we are unable to issue
               sufficient ceiling to cover what would otherwise be purely administrative expenses that might be
               associated with these special projects. Consequently, all costs associated with Congressional
               Add-Ons should be charged to the  proper programmatic sub-object  classes unless other
               agreements have been reached with the Office of Budget (OB).

               f. Health and Safety Requirements

               Consistent with the basic definition of administrative expenses being those that are staff-related,
               most general occupational health and safety (H&S) costs for the purpose of protecting the welfare
               of the Agency's employees must be funded as Administrative.  This includes such costs as:
               development and implementation of general safety plans and general safety training, compliance
               with government-wide H&S requirements (e.g., OSHA), maintenance of  health records, health
               unit employee physicals, wellness program activities, etc.

               Health and safety costs that are an integral part of the Agency's environmental mission are
               programmatic costs. This includes such costs as: program-specific risk-related Health & Safety
               activities (e.g., medical monitoring, and protective equipment, clothing, training and certification),
               industrial inspections by EPA, development of environmental H&S guidelines, H&S standards
               development, and environmental compliance costs such as collaboration with Program Offices in
               the  development of  model programs, techniques,  and protocols.  Also, Safety, Health and
               Environmental  audits (program  evaluations) at approved, dedicated special-use facilities are
               considered to be programmatic costs.

               OARM Programmatic Costs

               The Committees have stated that "all elements identified in the management and support section
               of the agency's Congressional budget justification (CJ) should be included under the Operating
               Expenses Ceiling". Because grants, programmatic expenses and programmatic contracts are
               excluded from the ceiling, some specific OARM costs may be classified as programmatic costs.
               Examples are:

                   Approved Special-Use Facility Infrastructure Costs which are Paid by OARM

                   IT Costs Directly Supporting Programmatic Offices  (Including Programmatic Databases
                      such as: Storet, Hazardous  Waste.DMS,  New Air  Data System, Docket System,
                      Pesticides Product  Information System, etc.)

                   •   State/EPA Data Management Programmatic Costs

                   •   Environmental Equity Programmatic Costs

                   •   Approved Programmatic Health  & Safety Activities

                   •   Environmental Financing Programmatic Costs

               h.     QIC Programmatic Costs

               The Congressional appropriation committees have indicated that they do not consider the OIG
               account to be 100% administrative. The Agency has agreed to track its administrative expenses

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                in this account using the "global" definition for expense categories developed for the other EPA
                appropriations.   Based  on an  earlier  agreement  between  EPA and  the  Congressional
                appropriations committees, the OIG has formulated its Operating Plan (OP Plan) based on target
                percentages  of  approximately 83% administrative and  17%  programmatic and  they have
                produced the following list of programmatic activities that center around their grant and Superfund
                activities. However, since there is no legal limitation, the OIG is free to reprogram as necessary
                between administrative  and programmatic  budget object classes.  Programmatic activities
                include:

                   •   audit of all payments, obligations, reimbursements or other uses of the  Superfund Trust
                       Fund;

                   •   audit of Superfund claims;

                   •   examination of a sample of agreements with State carrying out response actions;

                   •   examination of remedial investigations and feasibility studies;

                   •   audit of Construction Grant Program; and

                   •   pre-award and other audit assistance needed to award  contracts.

                i.   Abuses of the Programmatic Designation

                A number of concerns  were  expressed  about potential abuse in  opening  the  Rent,
                Communications &  Utilities (23.00 object class series) to programmatic cost charging. These
                object classes were established not only to accommodate the special-use facility arrangements
                but to provide for the lease/rental of the same equipment and facilities that had been categorized
                as programmatic when purchased outright in other sub-object class series  (26.00, 31.00).
                With regard to abuses, the programmatic designation of charges will be subject to Congressional
                reporting as well as  OIG and GAO audits.  If an Agency official knowingly and willfully causes a
                statutory ceiling to be exceeded, the violator may be subject to fine and/or imprisonment under
                the Antideficiency Act or administrative sanctions. All offices are cautioned to be conservative
                and ensure adequate justification is available to support programmatic cost designations.

            2. Special Use Facilities

            Beginning in FY 1993, based upon precedent established by NASA, the Committees permitted the
            classification of operating infrastructure costs for certain approved, dedicated, special-use facilities as
            being exclusively  programmatic. Infrastructure costs include: rent, utilities, communications, and land
            and structure modification costs, etc. This will allow EPA to exclude those facility costs from any
            administrative and operating  expense ceilings. Infrastructure costs at other than special-use facilities
            are administrative and are under the expenses ceilings.

            A list of EPA approved special-use facilities follows. These facilities will be permitted to charge the
            programmatic sub-object classes in each object classification series  for their operating infrastructure
            costs. These costs can be charged to programmatic sub-object classes regardless of whether the
            costs are obligated by the Region, the HQ Program Office, or by OARM.  If the special-use facility is
            co-located within or a part of other facilities, the costs can be charged programmatically provided they
            can be determined and justified. To propose a location as a dedicated, special-use facility, please

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           send the Office of Budget a written request with justification. Approval by the Committees will be
           required.

           Purely administrative costs at special-use facilities (non- infrastructure costs, such as office supplies,
           etc.), would still be charged to the appropriate  administrative sub-object classes and  require
           administrative expenses ceiling.

           Conqressionally Approved and Dedicated Special-Use Facilities

               ESD Regional labs

               Montgomery, AL facility (OAR)

               Radiation and Indoor Environments National Laboratory (OAR)

               Ann Arbor, Ml facility

               Bay St. Louis, MS (OPPTS)

               Beltsville, MD (OPPTS)
               NEIC in Denver (OECA)

               EPA Research Vessel "R/V Lake Guardian" (OW)

               EPA Research Vessel "OSV Peter W. Anderson" (OW)

               National Enforcement Training Institute (NETI) (OECA)

               Exposure Research Lab - EPA/RTP Campus,  RTP, NC
                  Human Exposure & Atmospheric Sciences Division (ORD)
                  Atmospheric Modeling Division (ORD)

               Exposure Research Lab - Fluid Modeling Facility, RTP, NC
                  Atmospheric Modeling Division (ORD)

               Exposure Research Lab -
                  Human Exposure & Atmospheric Sciences Division (ORD)
                  Environmental Sciences Division (ORD)

               Exposure Research Lab - Cincinnati, OH
                  Ecological Exposure Research Division (ORD)
                  Microbiological & Chemical Exposure Assessment Division (ORD)

               Exposure Research Lab - Las Vegas , NV
                  Environmental Sciences Division (ORD)

               Exposure Research Lab - Athens, GA
                  Ecosystems Research Division (ORD)

               Health and Environmental Effects Research Lab - EPA/RTP Campus, RTP, NC
                  Experimental Toxicology Division (ORD)
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                  Environmental Carcinogenesis Division (ORD)
                  Neurotoxicology Division (ORD)

               Health and Environmental Effects Research Lab - Reproductive Toxicology Facility, RTF, NC
                  Reproductive Toxicology Division (ORD)

               Health and Environmental Effects Laboratory Clinical Facility, Chapel Hill, NC
                  Human Studies Division (ORD)

               Health and Environmental Effects Research Lab - Gulf Breeze, FL
                  Gulf Ecology Division (ORD)

               Health and Environmental Effects Research Lab - Duluth, MN
                  Mid-Continent Ecology Division (ORD)

               Health and Environmental Effects Research Lab - Grosse lie, Ml
                  Mid-Continent Ecology Division (ORD)

               Health and Environmental Effects Research Lab - Corvallis, OR
                  Western Ecology Division  (ORD)
               Health and Environmental Effects Research Lab - Newport, OR
                  Western Ecology Division  (ORD)

               Health and Environmental Effects Research Lab - Narragansett, Rl
                  Atlantic Ecology Division (ORD)

               Environmental Assessment Center- EPA/RTP Campus, RTF, NC
                  Environmental Assessment Center (ORD)

               Environmental Assessment Center - CINN, OH
                  Environmental Assessment Center (ORD)

               Risk Management Research Laboratory- CINN, OH
                  Water Supply and Water Resources Division (ORD)
                  Land Remediation & Pollution Control Division (ORD)
                  Sustainable Technology Division (ORD)
                  Air Pollution Prevention and Control Division (ORD)

               Risk Management Research Laboratory- Edison, NJ
                  Water Supply and Water Resources Division (ORD)

               Risk Management Research Laboratory - Ada, OK
                  Groundwater and Ecosystems Restoration Division (ORD)

           Infrastructure Costs at Special-Use Facilities

           In addition to items that are mission-related and can  be designated as programmatic under the
           "Administrative vs.  Programmatic" Philosophy, the following Infrastructure  Costs,  which are
           administrative at all other locations, can be charged to programmatic sub-object classes at approved,
           dedicated, Special-Use Facilities:

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           Programmatic:

                  Utilities: Electric/Heat/Staff Telephones
                  Rent/Lease
                  Technical Furniture/Equipment Including Maint. & Repairs
                  Guard Services
                  Groundskeeping
                  Housekeeping/Janitorial Services
                  Building Repairs & Maintenance
                  Snow Removal
                  Trash Removal/Carting Service
                  Contract to Operate Parking Facility
                  Hazardous Material (HAZMAT) Transport Service
                  Fire Extinguisher/Equipment
                  Health & Safety Monitoring of Facilities

          Administrative:

                Health Unit/Wellness Center
                Exercise Facility/Stress Lab
                Office Supplies
                Non-Technical Employee Training
                Non-Technical Furniture/Equipment (Office Furniture) including Maintenance & Repairs

          3.  Examples of the ADMINISTRATIVE vs. PROGRAMMATIC Philosophy

              These examples include but are NOT LIMITED to the following.

              22.00 Series Transportation of Things

              Administrative:

               PCS Transfer of Effects
                Office Relocation Costs
                Trucks, Forklifts, etc. for Administrative Transportation of Things
                Transport Costs Between Facilities
                Surplus Property Relocation/Redistribution

             Programmatic:

                Shipment of Scientific Equipment, Samples, and Laboratory Animals
                Shipment of Hazardous Waste Materials
                Shipment of Possibly Toxic Soil & Water Samples
                Trucks, Forklifts, Aircraft, etc. for Mission-Related Transportation of Things
                Shipment of Program-related Exhibits
                Delivery of Programmatic Equipment to its Location of Use

              23.00 Rent, Communications & Utilities

              Administrative:

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                 Messengers
                 Courier Services
                HQ/Region Rental use of Land and Buildings
                HQ/Region Space Rental Paid to GSA
                HQ/Region Utilities
                HQ/Region General Purpose IT Data Facilities, Hardware, and Software Rental
                General Postage/Mail

              Programmatic:

                 Special-Use Facility Rent Paid to GSA, Utilities, etc.
                 Mission-Related IT Software and Hardware Rental
                 Lease/Rent of Programmatic Equipment & Services
                 Rental of Scientific Equipment
                 Programmatic Postage/Mail

               24.00 Series Printing & Reproduction

               Administrative:

                 General Purpose Advertising
                 Program Management Analyses
                 Printing of Non Program-Specific Public Information Materials
                 Administrative Federal Register Notices such as Grant Regulations
                 Employee Information (e.g.,  Payroll, Retirement or Wellness Materials, Bulletins, and
                 Newsletters)
                 General Purpose Training Materials
                 Requests for Proposals
                 Congressional Testimony
                 Public Relations Materials Generally Publicizing EPA and its Programs (e.g., EPA Journal,
                 EPA's Approach and Progress; program overviews, directories and Annual Reports - unless
                 Congressionally directed) Superfund Program Managers SCAP Manuals

              Programmatic:

                 Mission-Related Advertising such as Public Notices of Hearings
                 Programmatic Federal Register Requirements such as Notice of Rulemaking
                 Proposed and Final Rules
                 Reports Needed to Meet Congressional Requirements for Programmatic Decisionmaking
                 Scientific: Reports, Newsletters, Program Fact Sheets, and Manuscripts
                 Technical Documents (e.g., The Safe Drinking Water Act: A pocket guide to the requirements
                  for the operators of small water systems, Wetlands Manual)
                 Program Specific Material Intended to Generate or Direct Environmental Action by Readers
                 such as:
                      •   Materials to Promote Recycling;
                      •   Lead and Your Drinking Water;
                      •   Affects of Suns Rays;
                      •   Targeting Indoor Air Pollution; and
                      •   other technical "How To" Guides (e.g., How To Reduce Radon Levels In Your
                          Home)

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               25.00 Series Contracts/IAGs

               Administrative:

                  Meeting and Conference Subsistence
                  Auto Parking Contracts
                  Management and Support Contracts/IAGs
                  General Health and Safety Contracts/IAGs (e.g., Development and Implementation of General
                   Safety Plans, Health Unit Physicals, and Wellness Program Activities)
                  Personnel Security Investigations/Clearances
                  Administrative and Management Consulting Services
                  Employee Developmental and Rotational Assignments
                  Program Management Conference Facilitators
                  TQM Awareness Training
                  Cost/Benefit Analysis Training
                  Computer (and other general) Skills Training
                  General Health  & Safety Training (e.g., General Safety Practices and General Laboratory
                  Safety Techniques)
                  Operation of Health Facility lAGs
                  General booth displays at Job Fairs, Car & Boat Shows, Earth Day Festivities, etc.
                  Contracts for Facility Maintenance and Operations at other than Special-Use Facilities

              Programmatic:

                  Mission-Related Public Databases/Hotlines
                  Mission-Related Consulting Services
                  On-Line Database Searches such as LEXIS and NEXIS
                  Research Computer Literature Searches such as DIALOG, NTIS, STN and MEDLARS
                  Program Contracts/IAGs
                  Research Contracts/IAGs
                  Scientific IT  Contracts for Research Database Management
                  Demonstration lAGs
                  Laboratory Animal Care Contracts
                  Research Library Operations Contracts at Special-Use Facilities
                  Maintenance Contracts for Scientific/Technical Equipment & Repair
                  Hazardous Waste Removal Contracts
                  Expert Witnesses
                  Scientific/Technical Booth Displays at Public/Technical Conferences
                  Field Unit/Mobile Unit Superfund/LUST Contracts
                  Contracts for Remedial Action, Remedial Design, or Removal
                  Remedial Investigation & Feasibility Studies
                  Contracts for Site Assessment and Clean-up
                  Superfund Program Enforcement Contracts (such as:
                  Oversight of Potentially Responsible Party (PRP) Cleanup, Superfund Compliance Monitoring,
                  Cost  Recovery  Documentation  (SCRIPTS),  "Waste  In"  Liability  Allocation  Analysis,
                  Enforcement Training, PRP Search Contracts
                  Contracts for Facility Maintenance and Operations at Special-Use Facilities
                  Special-Use Facility Occupational Health and Safety Requirements (Buildings Only)
                  Program-Specific Risk-Related Health Monitoring Contracts/IAGs
                  Program-Specific Risk-Related Health & Safety Training and Certification
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                 Combustion Engine Economy Training
                 How to Write Permits Training
                 Mass Spectrometer Equipment Training
                 Emissions from Alternative Fuel Engines Training
                 On-Site Coordinator Training
                 Remedial Project Manager Training
                 Environmental License Fees
                 Site Response Management Contracts (such as: site cleanup guidance, cleanup prioritization,
                 and site monitoring)

               26.00 Series Supplies & Materials

               Administrative:
                 Motor Pool Gasoline
                 Office Supplies
                 General Purpose Subscriptions
                 Standard Office Reference Books such as Dictionaries, Thesaurus, etc.
                 Informal non-monetary awards such as T-shirts, coffee cups, gift certificates, $75.00 U.S.
                 Savings
                 Bonds

               Programmatic:
                 Test Fuel
                 Mission-Related Subscriptions
                 Scientific and Technical Laboratory Supplies
                 Criminal Investigator Ammunition and Surveillance Supplies (such as Film)
                 Program-Specific Risk-Related Protective Clothing and Supplies
                 Subscriptions
                 Supplies for Hazardous Waste Disposal
                 Laboratory Animal Care Supplies

               31.00 Series Equipment

               Administrative:

                 Purchase of General Purpose IT Software Packages
                 Copy Machines
                 Fax Machines
                 General Purpose Telephone Equipment for Staff
                 Office Furniture
                 Individual Desk-top Equipment (such as Calculators)
                 Personal Computers or Other Word Processor Equipment for General Staff Use such as Local
                 Area Network (LAN) Equipment)
                 Car Phones
                 Pagers/Beeper Equipment
                 Personnel Classification and Directive Books

               Programmatic:

                 Programmatic IT Software Packages such as:
                       •   toxic chemical composition analysis programs - LHASA, SYNGEN,CAMEO;
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                      •   chemical property estimation programs; and
                      •   CLOGP & PC GEMS; SAS & SAS-Graph software when used for generating
                          research lab. data, etc.) (25.75 if WCF)
                 Programmatic IT Software Disk Update (25.75 if  WCF)
                 Technical Books or Manuals
                 Research Vessel Equipment
                 Laboratory and Scientific Equipment
                 Mission-Related Phones for Hotlines such as EPA Water Resource Center
                 Criminal Investigator Guns, Surveillance Equipment
                 Program-Specific Risk-Related Health & Safety Equipment
                 Specially Equipped Vehicles for Law Enforcement/ Surveillance or Boats for Emergency
                      Response.
                 IT Equipment for Programmatic Databases such  as:
                      •   STORET;
                      •   HazWst.DMS;
                      •   New Air Data System;
                      •   Docket System;
                      •   Pesticide Product Info. System;
                      •   CERCLIS.
                      •   Site & Field Protective Clothing

              32.00 Series Land and Structures *** FOR USE WITH B & F APPROPRIATION ONLY ***
              HQ/Region Land, Buildings,  & Structures
              Special-Use Facility Land, Buildings, & Structures

              42.00 Series Insurance Claims/Indemnities

              Administrative:
                 Insurance Claims & Indemnity Claims for Employees
                 Insurance Claims & Indemnity Claims for Contractors
                 Local, State, or Federal Fines or Claims
                 Claims for Court Costs Involving EEO or other Hiring Practices litigation

              Programmatic:
                 Pesticide Indemnification Payments
                 Superfund Indemnifications
                 Superfund Response Claims
                 Court Costs such as: Equal Access to Justice Act, Claims for failed Enforcement Actions,
                 failure to implement environmental statutes cases, improper issuance of regulations cases,
                 etc.

    G.  DIRECT IMPLEMENTATION of STATE and TRIBAL ENVIRONMENTAL PROGRAMS
         with STAG APPROPRIATIONS

    For some environmental programs, states and tribes have been  delegated or authorized  the primary
    responsibility to carry out and enforce such programs. In the absence of such state or tribal program, EPA
    may be legally required to carry out the program. For appropriation and grant purposes, this is called "direct
    implementation" by EPA. The NPDES program under the Clean Water Act and the Underground Injection
    Control (UIC) and the Public Water System Supervision (PWSS) programs underthe Safe Drinking Water Act
    are examples  of direct implementation programs. Some of the  continuing environmental program grants

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    authorized in the STAG appropriation provide funding for states and tribes to carry out these programs, EPA
    can use these funds to support direct implementation responsibilities.

    Regarding Tribes, there may be additional sources to fund EPA's direct implementation efforts. For example,
    although General Assistance Program (GAP) grants funded by the STAG Appropriation can be used by Tribes
    only to develop tribal capacity in programs, GAP funds could be used by EPA for "direct implementation"
    activities of all environmental programs (40 CFR 35.516 applies).

    One exception related to the use of STAG funds for "direct implementation" is that the funding for the Indian
    Set-Aside Programs cannot be used by EPA for this purpose.  Authority for these programs is found in both
    the Clean  Water Act (CWA)  and  Safe Drinking Water Act (SDWA) as well as the STAG appropriation
    language relating to the CWA and  SDWA State Revolving Fund (SRF) programs.  The funding for the set-
    aside programs, however,  is not contained  in  the  STAG lump-sum earmark for EPA's continuing
    environmental program grants (such as CWA  106 or SDWA PWSS), nor are the Indian set-aside grants
    programs which EPA is required to carry out in the absence of acceptable tribal programs.  Thus, the set-
    aside grants are  not "direct implementation" programs as defined in our appropriations process or grant
    regulations.  EPA funds these programs from set-asides of the CWA and SDWA SRF funding and provides
    for these projects either through direct grants to tribes or interagency agreements (lAGs) with the Indian
    Health Service (IMS), which then makes the equivalent of a grant award to tribes for sewage treatment or
    drinking water facilities, as appropriate. This latter approach is authorized by EPA's statutory authority to work
    with other Federal agencies under sections  501 (b) of the  CWA and 1450(b) of the SDWA.

    When using STAG funds for direct implementation  activities of state or tribal environmental programs by the
    Regional Offices, funds will need to be reprogrammed from grants (BOC 41) into contracts (BOC 37) and/or
    expenses (BOC 36). Since these expenses are associated with program grants, using the programmatic sub-
    object classes in each series for costs associated with direct implementation will ensure that these costs will
    not be reflected as administrative costs.

    Because there are no travel funds appropriated in the STAG account, any direct implementation travel needs
    must be funded from within existing travel ceilings  in the EPM account. OGC has opined that
    "boilerplate" report  language for the EPM  appropriation states that the EPM account  contains "PCB" and
    Travel  expenses for all media and programs of the Agency except SF, LUST, Oil Spills,  and the OIG".
    Therefore, PCB or Travel for anything in STAG is paid out of EPM.

    Additionally, since any equipment purchased for direct implementation of a grant program (such as computers
    and copy machines) must be dedicated to direct implementation efforts and not put to general use, a region
    may be required to  use funds  for rental space, office equipment, lights, phones, etc. to  segregate the direct
    implementation effort from the regional office location. However, Permanent Change of Station (PCS) costs to
    relocate an employee (particularly the household goods portion of the PCS) can not be charged to STAG - all
    personnel and travel costs should be borne by the Agency's appropriations already available forthat purpose,
    not STAG.

    Providing part of a grant award as "In-Kind" assistance to help a state or tribe carry out its own environmental
    program does not constitute direct implementation  by EPA.

    It is not the option of the regional office whether or not to  directly implement a state or tribal environmental
    program if the Agency is required by law to carry it out in the absence of an authorized state or tribal program.
     The state must be unable to  perform all or part of a grant or otherwise be unable to accept primacy (e.g.
    sometimes  a state constitution does not provide for a matching funds requirement for the state to be able to
    accept primacy.)

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    I.     ADDITIONAL GRANTS INFORMATION

    Specific Statutory Authority
    Federal agencies have inherent authority (subject to applicable procurement laws and the Federal Acquisition
    Regulations or FAR) to enter into contracts to carry out agency missions. Grants and cooperative agreements,
    however, require specific statutory authority and the citation for that authority must be included on the grant
    award.  Three things are needed to award a grant: 1) specific statutory authority, 2) funding provided forthe
    purpose of the grant, and, 3) an eligible grant recipient.

    Acquisition VS Assistance
    The Federal Grant & Cooperative Agreement Act (FGCAA), 31 U.S.C. 6301 et. seq., provides that grant and
    cooperative agreements must be awarded fora principal purpose of support and stimulation, rather than to
    acquire services or products which directly benefit the government.  In interpreting the FGCAA, EPA Order
    5700.1, states:
    If an office or laboratory's principal purpose in undertaking a project is to obtain a product or service
    for the direct benefit or use of the Agency, or any part of the Federal government including the
    legislative and judicial branches, a contract, ratherthan a grant (assistance agreement), must be used.

    The decision to use a contract or an assistance agreement must be based solely on the principal purpose of
    the relationship. If EPA's principal purpose is acquiring property or services from a recipient for direct Agency
    (or government) benefit or use, an acquisition relationship exists requiring the use of a contract.

    If EPA is funding a recipient to support or stimulate activities that are not principally forthe direct benefit or use
    of the Federal Government, and the award is authorized by federal statute, an assistance relationship exists
    and a financial assistance agreement (i.e., grant or cooperative agreement) may be used.

    To view the specific GIAMD policy (EPA Order 5700.1) for distinguishing between assistance and acquisition,
    go to the following intranet URL sites:
            http://intranet.epa.qov/rmpolicy/ads/orders/5700 1 .pdf  and/or
    http://intranet.epa.goV/OGD/policv/7.0-GPI-GPI-94-04.htm

    Selecting between a Grant or Cooperative Agreement
    After an office or laboratory determines that an assistance agreement rather than a contract is
    appropriate, it must then decide whether to use a grant or a cooperative agreement to provide the
    assistance. The office or laboratory must base this decision on the extent and nature of the Agency's
    involvement in the activities to be supported under the agreement.

            1. Grant Agreements. EPA shall use a grant agreement whenever an assistance agreement is
            appropriate  and the office or laboratory does not anticipate substantial involvement with the
            recipient during performance of the contemplated activities.

            2.  Cooperative Agreements. EPA shall use a cooperative agreement whenever an assistance
            agreement is appropriate  and the office or laboratory anticipates substantial involvement with the
            recipient during performance of the contemplated activity.

            Page 11 of EPA Order 5700.1 dated March 22, 1994, titled "Policy for Distinguishing Between
            Assistance and Acquisition (located at http://intranet.epa.qov/rmpolicy/ads/orders/5700 1 .pdf)
            describes the potential criteria that might be present for what constitutes "substantial involvement"
            for selecting a  Grant or Cooperative Agreement for the  recipient.

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    Policy for Competition in Assistance Agreements
    In August 2004, GIAMD revised EPA Order 5700.5 - "Policy for Competition of Assistance Agreements".
    For the "Effective Date" the policy states: "The requirements of this Order apply to: (1) competitive
    announcements issued, released, or posted after January 14, 2005; (2) assistance agreement
    competitions, awards, and disputes based on competitive announcements issued, released, or posted
    after January 14, 2005, (3)  non-competitive awards resulting from non-competitive funding
    recommendations submitted to a Grants Management Office after January 14, 2005, and (4) assistance
    agreement amendments issued after  January 14, 2005". The authority for this Order is the Federal
    Grant and Cooperative Agreement Act of 1977, as amended, 31  U.S.C. 6301 (3).  The policy further states
    that "It is EPA policy to promote competition to the maximum extent practicable in the award of assistance
    agreements. When assistance agreements are awarded competitively, EPA policy requires that the
    competitive process be fair and impartial, that all applicants  be evaluated only on the criteria stated in the
    announcement, and that no applicant receive an unfair competitive advantage."   The Competition Policy
    (EPA Order 5700.5A1) applies to all EPA assistance agreements except for those set forth in Section 6.c
    of the Order. To view EPA Order 5700.5A1 for applicability  and exemptions for competitive policy, see
    intranet  URL site:  http://intranet.epa.gov/ogd/policy/order/5700_5.pdf

    J.    SPLIT FUNDING WITH MULTIPLE APPROPRIATIONS

    Procurements

    The use of more than one appropriation on a single work assignment, delivery order, or project is known as
    split funding with multiple appropriations. EPA receives funding for contracts from several appropriations
    and may fund a procurement from one or more of these appropriations depending on the nature of the goods
    or services provided. There is an Agency requirement that Office of Financial Management (OFM) approval of
    allocation  methods must be obtained when more than one appropriation is the source of funds  on a
    procurement. Office of Comptroller Policy No. 96-05 further  stated that split funding applied to all programs
    that use multiple appropriations where costs are not directly allocable (and not just Superfund). Allocation of
    funding must be based on appropriation benefit, rather than  which account can "afford" the work. Or stated
    another way, the appropriations cited on the contract must benefit from the work being done by the contractor.
     The use of funds  from one appropriation because of the  absence of funding in another violates basic
    appropriation law.

    As stated in Chapter 2, Section M, Accounts Payable Certifying Officers are legally responsible for ensuring
    that payments  on each contract are made from the proper account.  To  carry out this responsibility the
    following procedures are necessary to assure full Agency compliance with GAO standards and with legal
    requirements:

    1.  Methodology

        Office of Financial Management (OFM) must approve the Contracting Officer Representative's (COR)
        rationale for allocating costs among appropriations so that the payment of vouchers can be done
        accurately.

        The COR must document the rationale for the use of multiple appropriations and include in the rationale
        an estimate of the costs to be charged each appropriation and the method for distributing the costs to the
        benefiting appropriations. All program offices contributing funds to the procurement must indicate on the
        rationale their concurrence with the estimate.
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        Costs must be allocated based on a formula derived from the estimated benefits to each appropriation. ]f
        each task, work assignment, or delivery order within the multi-funded contract will be funded from a single
        appropriation, OFM approval is not required.   POs are encouraged to structure tasks in this manner.

        The COR of the contract must include a copy of the approved rationale for using multiple appropriations
        with the PR submitted to the contracts office.

        2. Voucher Payment - whenever a procurement has multiple account funding, the COR must provide the
        FMO with the appropriations (and  amounts) on the invoice approval so that vouchers for payment are
        charged correctly. The finance office will follow the methodology and charge contract vouchers to the
        appropriate account number and DCN as specified by the methodology.

        For more information on funding procurements with multiple appropriations, see EPA's new Contracts
        Management Manual (dated June 2004) Chapter 7, Section 7.4 "Accounting for Appropriations  in
        Contracts", and Comptroller Policy Announcement 86-02 and 88-01.

    Grants/Cooperative Agreements

    OGD, with the assistance of opinions from the Office of General Counsel (OGC) established their policy for
    Multiple Appropriation (M.A.) grants in FY 2001.  It states: "It  is EPA policy generally to use only one
    appropriation as the funding source for an assistance project. Where a project's activities benefit more than
    one appropriation, the Agency should award separate grants forthe activities falling within the scope of each
    appropriation. However, a single, MA grant may be awarded, with adequate justification documented in the
    grant decision memorandum, and on an exception basis, if  all of a projects activities are of a type that is
    fundable from all of the supporting appropriations. Separate grants must be awarded if all of the supporting
    appropriations are not legally available for all of the types of activities to be performed. This is because of the
    procedural difficulties involved in individually charging payments to the benefited appropriations. In awarding
    and administering separate grants, the Agency will work to minimize application, accounting and reporting
    burdens on recipients."

    As  part of the justification for an MA grant, the Project Officer must include in the decision memorandum a
    description  of the methodology for charging payments that reflects the proportional benefit to each
    appropriation. When developing their allocation methodology,  Project Officers must use the guidelines
    issued by the OCFO.  A suggested sample allocation methodology accompanying the decision memorandum
    could look like the following:
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                                                                        02/04/08
                   Sample Allocation Methodology for 000000-01-0


         All of the project's activities are of a type that is fundable from all of the
         supporting appropriations.
Project or Description
support Tribal capacity
building ill training? in
control
support. Tribal capacity
building activities in
hazardous waste- related
activities

Appropriation
B
T
Total
Funding
Request <8>
1 93.00O
32.0OO
225. OOO
Funding; %
86° o
14%
100%
    Project Officers may contact their SFOs, or where necessary, OGC or the appropriate Office of Regional
    Counsel (ORC), should they need further guidance. (The funding placed on the grant must be consistent with
    the allocation methodology.)" The Multiple Appropriations Awards Policy can be found in its entirety at:
    http://intranet.epa.gov/OGD/course  Iibrarv/m5 funding/4.5-INFO-FA.htm

    Although split-funded  grants and cooperative  agreements are not reviewed  by the Office of Financial
    Management (OFM), allocation  methodologies are subject to  audit and a rationale must be established
    internally by the funding organization.
    K.
LAYOFFS BETWEEN APPROPRIATIONS
    EPA's operating costs are usually charged directly to an appropriation through the Agency's account code
    structure.  For example, a Superfund employee's pay would be charged to a Superfund appropriation account
    number (the employee's Fixed Account Number).

    However, many support services may benefit activities that are funded from more than one appropriation, but
    the amount of support benefiting each appropriation cannot be directly measured.  As a result, there may be
    no way to track and report which increments of time worked, or portion of a purchased item, are in support of
    which appropriation's activities.

    Allocating  time worked or other support costs among appropriations is an acceptable method of charging
    costs. Program offices which allocate costs must have a measure of benefit for allocating or "laying-off' costs
    to an appropriation (i.e. the ratio of costs from one appropriation to the total costs, where the ratio represents
    the proportion of service provided to the various recipients of that service).  The derived percentage(s) is
    multiplied against the total amount of support costs (or total FTE PC&B costs if laying off personnel costs) to
    be distributed. The calculated amounts are then recorded against the respective appropriations. This plan
    must  be adhered to by all offices responsible  for distributing support  costs or needing to allocate hours
    worked.
                                                 122

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS	02/04/08	

    RMDS 2550D, Chapter 5 entitled "Allocation of Personnel and Support Costs to the Superfund Appropriation"
    describes  in further detail allocation  methodologies used to redistribute  costs,  or layoff appropriations.
    Although Superfund is specifically mentioned in the chapter title, the methodologies described can be applied
    to any Trust Fund or appropriation.

    L.     FEES AND FEE PROGRAMS

    Only if authorized by statute, can collections that are received  by the Agency be obligated by EPA during that
    fiscal year.  Otherwise, the fees must be deposited as Miscellaneous receipts to Treasury as required by
    31 U.S.C. 3302 (b), or as directed in a statute. EPA is already  receiving all the funding that we can rationalize
    in our budget justification. The fees we collect go back to Treasury and OMB/Congress considers them to be
    offsets to our appropriated dollars. Thus, funds the Agency collects may actually get appropriated back to us
    in our environmental programs. For the Agency to be able to use the collected fees held at Treasury, they
    would have to be specifically appropriated by Congress. Were that to happen, the Agency could expect a
    reduction in appropriated funds from General  Revenues, so there would  be  no net  gain.  The OCFO
    environmental  finance  staff is  responsible for reviewing Agency  user fees.   Their web site  is:
    http://www.epa.gov/efinpage/
                                                 123

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS        02/04/08
      EXHIBITS
            124

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
                                               02/04/08
                         Funds Control Relationships in EPA
    Responsible
    Planning and
   Implementation
      Office
  (AA for OPPTS)
I Senior
Resource,
 Official
    Director
Office of Budget
                                                     /Senior
                                                     Resource/
Responsible Planning
 and Implementation
       Office
  (AAforOSWER)
                                                        Regional
                                                       Comptroller
     Senior Budget
         Office
                                                       Senior Budget
                                                          Officer
  Allowance Holder
 Pollution Prevention
      & Toxics
  Allowance Holder
             AllowanceNHolder
            Office of SolichWaste
                                                   Allowance Holder
                                               Immediate Office, OSWER
                  Pesticides Programs
                           unds Control
                             Officer
                                                      Funds Control
                                                        Officer
               Funds Control
                  Officer
            Allowance Holder
             Immediate Office
                 OPPTS
                       Allowance Holder
                      Office of Emergency
                    And Remedial Response
                                    Allowance Holder
                                  Office of Underground
                                      Storage Tanks
I             Funds
             Control
             Officer
I                          Funds
                          Control
                          Officer
I                                         Funds
                                         Control
                                         Officer
                  EXH B T-2520-2-1
/unds Control
  Officer
                                         125

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                            02/04/08
                     UNITED STATES ENVIRONMENTAL  PROTECTION  AGENCY
                                        WASHINGTON, D.C.
                                                         OFFICE of XXXXXXXXX (Mail code)

    MEMORANDUM


    SUBJECT:            Designation of Funds Control Officer

    FROM:               (Title of Allowance Holder) \signed\

    TO:                  Office of Budget (2732A)


       The purpose of this memorandum is to inform you that in accordance with Chapter 2520 of the
    Resources Management Directives System (RMDS); Administrative Control of Appropriated Funds, the
    following individual(s)	(Name)	been designated as the Funds Control Officer
    (FCO) and/or Alternate Funds Control Officer for this Office.

       The FCO's financial management authority to commit properly executed funding documents is
    restricted to resources allotted to the Allowance Holder(s) / Responsibility Center(s) indicated. Under no
    circumstances will the FCO be permitted to sign for commitment documents outside the authority, scope
    or control of the AH/Responsibility Center(s) listed above.

       As stated in RMDS 2520, by signing in the funds certification block on funding documents, the FCO
    understands and accepts the responsibility that his/her signature on a document certifies that the
    document has passed his/her personal  review and that the funds cited are available as to the appropriate
    purpose, time, and amount. The FCO is also responsible for notifying obligating officials if committed
    funds are subsequently decommitted in IFMS. The FCO will  also be responsible for maintaining a
    document control  tracking system which will reconcile funding documents against the EPA Integrated
    Financial Management System (IFMS), and also assist the Allowance Holder in  maintaining proper funds
    control  management.

    For verification, their signatures are provided below:


           Signature of new FCO	

                  and/or
           Signature of Alternative FCO
                                        EXHIBIT - 2520 - 2-2


                                               126

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                           Funds Control Officer (FCO) Designation

       In accordance with Chapter 2520 of the Resources Management Directives System (RMDS);
Administrative Control of Appropriated Funds, the following persons are officially designated as Funds
Control Officers (FCOs) or Alternate Funds Control Officer (AFCO) for the office listed below:

RPIO Abbreviation and Code (e.g. OCFO 17):


Allowance Holder Code (e.g. 42):


                            RC CODE(S)(e.g.42a)
     FCO NAME(S)           LIST IF MORE THAN 1  NAME OF ALTERNATE(S)
       ARA / SENIOR RESOURCE OFFICIAL                     DATE
                                   EXHIBIT-2520-2-2
                                           127

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
                                                          01/15/08
SFO#

99
22
           SERVICING FINANCE OFFICER (SFO) LIST

Address                              Responsibility
 Director
 Washington Finance Center
 Mailcode (2734R)
 1200 Pennsylvania Avenue, N. W.
 Washington, DC 20460

 Director
 RTP Finance Center
 U.S EPA, MD-32
 T.W. Alexander Drive, Adm. Bldg.
 Research Triangle Park, N. C. 27711
Headquarters Training
Labor Distribution
Time and Labor Administration
All Purchase Orders
RTP Training
All Contracts
All Working Capital Fund Service
Agreements
33
 Director
 Las Vegas Finance Center
 P.OBox98515
 Las Vegas, Nevada 89193-8515
 Agreements
                                                   Las Vegas Training
                                                   All Assistance Agreements
                                                   All State Grants and Cooperative
 27
 Director
 Cincinnati Finance Center
 26 Martin Luther King Drive
 Cincinnati, OH 45268-7002
All Bankcards
All Interagency Agreements (IAG)
Payments to Federal Agencies
All Travel Processing
Payments & Collection of I PA
Assignments
Permanent Change of Station (PCS) for
EPA and other federal agencies
Federal Register Notices
Cincinnati Training
                                 EXHIBIT-2520-2-3
                                          128

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
01/15/08
FY 2007 FUND (Appropriation) Codes
FY2007
Approp.
Code
Bud
Year
Treasury
Symbol
Bud
Year
Treasury
Symbol
Title
B
BR
BR2
BR3
BR5
LR
B2
B3
B4
B5
B9
C
CR
CR1
CR3
CRR
C2
C3
C4
C9
D
DC
F
FC
FS1
F8

E1
E1C
E2
E2C
E3
ESC
E4
E4C
E9
GZZ
Environmental Programs and Management (EPM)
EPM Reimbursable (Multi-Year)
EPM Reimbursable - Ocean Dumping (Multi-Year)
06/07
06/07
06/07
EPM Reimbursable - IPA and Non-Federal (Multi-Year) 06/07
EPM Recycling Proceeds (No Year)
EPM Reimbursable Biowatch
AC&C No-Year c/o
DOE Approp Transfer
Agency for Intern. Development Approp Transfer
Agency for Intern. Development Approp Transfer
Homeland Security Supplemental C/O EPM
Science and Technology (S&T)
S&T Reimb. (Multi-Year)
S&T Reimb.
S&T - IPA and Non Federal (Multi-Year)
S&T Reimbursable Homeland Security
R&D No Yr c/o
Superfund - S&T; for Execution
DOT Approp Transfer/ S&T
Homeland Security Supplemental C/O S&T
Buildings & Facilities
Buildings & Facilities C/O
LUST
LUST C/O
LUST Katrina Supplemental; PL 109-234
LUST Katrina Supplemental C/O PL 1 09-1 48
State and Tribal Assistance Grants (STAG)
STAG Categorical Grants
STAG Categorical Grants Carryover
STAG Clean Water SRF
STAG Clean Water SRF Carryover
STAG Drinking Water SRF
STAG Drinking Water SRF Carryover
STAG Special Programs
STAG Special Program Carryover
STAG Homeland Security Supplemental
Construction Grants 1993 and Prior
07
06/07
07
07
06/07
07
07
06/07
06/07
06/07
06/07
06/07
07
06/07
07
07
07
07
07
07
06/07
07

07
07
07
07
07
07
07
07
07
07
686/70108
686/70108
686/70108
686/70108
68X0108
686/70108
68X0108
68X0108
686/70108
68X0108
68X0108
686/70107
686/70107
686/70107
686/70107
686/70107
68X0107
685/60107
68X0107
68X0107
68X0110
68X0110
68-20X8153
68-20X8153
686/78153
68-20X8153

68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
07/08
07/08
07/08
07/08

07/08


07/08


07/08
07/08
07/08
07/08
07/08

07/08



















687/80108
687/80108
687/80108
687/80108

687/80108


687/80108


687/80107
687/80107
687/80107
687/80107
687/80107

687/80107



















                             EXHIBIT-2520-3-1
                                   129

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
01/15/08
Object Class Relationships:
H
HC
HR
N
N2
NR
P
P1
T
TC
TCD
TR
TR1
TR2
TR2A
TR2B
TR3
T4
T9
WR
Y

ZA
ZB
ZG
Oil Spill
Oil Spill Approp Dollars C/O
Oil Spill - Reimb.
Inspector General
Superfund - IG; for Execution
Inspector General Reimb. (Multi-Year)
FIFRA
Pesticide Registration Fund
Superfund
Superfund Appropriated Funds C/O
Superfund Appropriated Funds C/O Deobs
Superfund Reimb. -All Other
SF Reimb. - SSC
SF Reimb. - Cashouts
SF Special Acct Fed Unearned Adv
SF Past Costs and interest from Treasury
Superfund - IPA
Nat'l Drug Contrl Policy Approp Transfer
Homeland Security Supplemental C/O Superfund
Working Capital Fund (Service Agrmts)
Tolerance Fund C/O
Miscellaneous Accounts:
Operations, Research & Facilities
Energy R&D
Exxon Valdez Settlement Fund
07 68X8221
07 68X8221
07 68X8221
06/07 686/70112 07/08 687/80112
06/07 686/70112 07/08 687/80112
06/07 686/70112 07/08 687/80112
07 68X4310
07 68X5374
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68-20X8145
07 68X4565
07 68X4311

07 68X0100
07 68X0109
07 68X5297
                                   130

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
                                   01/15/08
 OMB Object Classification Codes
 11.1-11.9
 12.1-13.0
 21.0-26.0
 31.0-33.0
 41.0-44.0
Personnel Compensation
Benefits
Contractual Services and  Supplies
Acquisition of  Equipment  and Land
Grants  and Fixed Assets
 EPA Budget Object Classes
 10  - Personnel  Compensation
 & Benefits
 21  - Travel
 28  - Site Travel
 36  - Expenses
 37  - Contracts
 38  - WCF
                     EPA Financial Sub-Object Class
                     Codes

                     (Several hundred broken out in more
                     detail by OMB Object Class Code.   See
                     _RMDS  2590 at
                     http://intranet.epa.gov/ocfo/policies/
                     resource.htm for their definitions).
                         EXHIBIT 2520-3-2
                             131

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
                               01/15/08
                             BUDGET HIERARCHY

The organizational hierarchy of the IFMS budget subsystem and the related inquiry tables are
displayed in the exhibit below:
Organizational Level

FULL CONTROL


 Agency
 Sample Codes
 APPROPRIATION
 BFY: 07 08 APPR: B
Inquiry Tables
     APPR
 Agency
 APPORTIONMENT
  QTR: 1
     APOR
 RPIO
 ALLOCATION
BFY: 07 08 APPR: B
  RPIO: 17
     ALOC
 Allowance
 Holder
SUBALLOCATION
BFY: 07 08 APPR: B
      SALC
RPIO: 17ORG:42
PRESENCE CONTROL
 Allowance
 Holder
  ALLOWANCE
BFY: 07 08 APPR: B
RPIO: 16ORG:42
PRC: ZZZJE5M BOC: 30
     ALLT
NO CONTROL
 Responsibility
 Center
 SUBALLOWANCE
BFY- 07 08 APPR: B
 SASP/SAIN
                                EXHIBIT-3-3
                                   132

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       01/15/08
 HOW TO WRITE A REPROGRAMMING JUSTIFICATION

 Written justifications provide the permanent audit trail of explanations for EPA's resource reprogrammings.
 The justification protects the initiator by establishing the rationale forthe action and making it part of the data
 record. Concise, well written justifications are essential to the success of IFMS as an administrative system.

 The coded data on your reprogramming already indicates:

     1.  Programs  involved (PRC Codes)

     2.  Offices involved (RPIO/A.H. Codes)

     3.  Dollar and FTE Amounts

 DO NOT REPEAT THIS INFORMATION AS YOUR JUSTIFICATION

 What you should  be providing as your justification is simply:

     1.  What the reprogramming is buying for programs, activities, or offices receiving an increase?

     2.  What the impact is to the programs, activites, or offices losing resources? Something previously
        budgeted for has been reduced. Have priorities or schedules changed?

 EXAMPLE:

 Proper Justification:

 This action reprograms $200K for additional contractor support and $80 for additional research equipment to
 accelerate the level of Acid  Rain research  in this fiscal year. The Air research contract with the XYZ
 Corporation will be put off until next year as a result of this reprogramming.

 Poor Justification:

 Transfers funds from the New Chemical Review PRC to the Chemical Registration PRC to meet end-of-year
 needs.

 Point  of contact

 This information should include the name and  telephone  number of both a  budget and a program staff
 member.
                                     EXHIBIT - 2520 - 3-4
                                           133

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS       01/15/08
        APPENDIX A
           BUDGET
 TERMS and DEFINITIONS
          Excerpted from the GAO Glossary
               134

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       01/15/08
                              Budget Terms and Definitions

Account
A separate financial reporting unit for budget, management, and/or accounting purposes. All budgetary
transactions are recorded in accounts, but not all accounts are budgetary in nature (that is, some accounts
do not directly affect the budget but are used purely for accounting purposes). Budget (and off-budget)
accounts are used to record all transactions within the budget (or off-budget), where other accounts (such as
deposit fund, credit financing, and foreign currency accounts) are used for accounting purposes connected
with funds that are non-budgetary in nature. The Budget Enforcement Act defines account as "an item for
which appropriations are made in any appropriation act; for items not provided for in appropriation acts,
account means an item for which there is a designated budget account identification code number in the
President's budget."

Account in the President's Budget:
Expenditure/Appropriation and Receipt Accounts - classified by Fund Types
Accounts used by the federal government to record outlays (expenditure ac counts) and income (receipt
accounts) primarily for budgeting or management information purposes but also for accounting purposes. All
budget (and off budget) accounts are  classified as being either expenditure or receipt (including offsetting
receipt) accounts and  by fund group.  Budget  (and off-budget) transactions  fall within either of two fund
groups: (1) federal funds and (2) trust funds.

All federal fund and trust fund accounts are included within the budget (that is, they are on-budget) unless
they are excluded from the budget by law. Federal and trust funds excluded from the budget by law are
classified as being off-budget. The term off-budget differs from the term non-budgetary. Non-budgetary
refers to activities (such as the credit financing accounts) that do not belong in the budget under existing
concepts, while off-budget  refers to accounts that belong on-budget under budget concepts but that are
excluded from the budget under terms of law.

Federal Fund Accounts
Accounts composed of moneys collected and spent by the federal government other than those designated
as trust funds. Federal fund accounts include general, special, public enterprise, and intra governmental fund
accounts.

General Fund Accounts. Federal fund  accounts composed  of all federal money not allocated to any other
fund account.

1.   General Fund Receipt Account
     A receipt account credited with all collections that are not earmarked by law for a specific purpose.
     These collections  are  presented in the  Budget of the  United  States  Government as either
     governmental  (budget)  receipts  or offsetting receipts. These include taxes, customs duties, and
     miscellaneous receipts.

2.   General Fund Expenditure  Account
     An appropriation account established to record amounts appropriated by law forthe general support of
     federal government activities and the subsequent expenditure of these funds. It includes spending
     from both annual and permanent appropriations.
                                             135

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       01/15/08
 Special Fund Accounts Federal fund accounts earmarked by law for a specific purpose.

 3.    Special Fund Receipt Account
      A receipt account credited with collections that are earmarked by law but included in the federal funds
      group rather than classified as trust fund collections. These collections are presented in the Budget of
      the United States Government as either governmental (budget) receipts or offsetting receipts.

 4.    Special Fund Expenditure Account
      An appropriation account established to record appropriations, obligations, and outlays financed by the
      proceeds of special fund receipts.

 Intra-governmental Fund Accounts
 Expenditure accounts authorized by law to facilitate financing transactions primarily within and between
 federal agencies on a revolving fund basis.

 1.    Intra governmental Revolving Fund Account
      An appropriation account authorized to be credited with collections, primarily from other agencies and
      accounts, that are earmarked to finance a continuing cycle of business-type operations, including
      working capital funds, industrial funds, stock funds, and supply funds.

 2.    Management Fund Account
      An account authorized by law to credit collections from two or more appropriations to finance activity
      not involving a continuing cycle of business-type operations. Such accounts do not generally own a
      significant amount of assets such as supplies, equipment, or loans, nor do they have a specified
      amount of capital provided-a corpus. The Navy Management Fund is an example of such an account.

 Consolidated Working Fund Accounts are a subset of management funds. These are special working funds
 established under the authority of Section 601  of the Economy Act (31 U.S.C. 1535, 1536) to receive
 advance payments from other agencies or accounts. Consolidated working fund accounts are not used to
 finance the work directly but only to reimburse the appropriation or fund account that will finance the work to
 be performed. Amounts in consolidated working fund accounts are available forthe same periods as those
 of the accounts advancing  the funds.

 Consolidated working fund  accounts are shown as separate accounts on the books of Treasury, but are not
 separately  identified in  the  President's budget. Transactions  of these  accounts are included in the
 presentation of the appropriation or fund account actually performing the service or providing the materials.

 Trust Fund Accounts
 Accounts designated as trust funds bylaw, regardless of all other meaning of the words "trust fund."A trust
 fund account is usually either a receipt or an expenditure account. A trust revolving fund, however, receives
 offsetting collections authorized to be credited to an expenditure account.

 Trust Fund Receipt Account
 A receipt  account credited with collections  classified as trust fund  collections. These collections are
 presented as either governmental (on-budget or off-budget) receipts or offsetting receipts.

 Trust Fund Expenditure Account
 An appropriation account established to record amounts appropriated to finance programs specified by law
 as being trust funds. Such  funds may be on-budget or off-budget.
                                             136

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       01/15/08
Trust Revolving Fund Account
A trust fund expenditure account that is an appropriation account authorized to be credited with collections
and used to carry out a cycle of business-type operations in accordance with statute.

Allocation
For the purposes of budgeting, an allocation is the amount of budget authority transferred from one agency,
bureau, or account that is set aside in a transfer appropriation account to carry out the purposes of the
parent appropriation or fund. (The appropriation or fund from  which the allocation is made is called the
parent appropriation or fund.) For example, an allocation is made when one or more agencies share the
administration of  a program for which appropriations are made to only one of the agencies or to the
President. Transactions involving allocation accounts appear in  the Object Classification Schedule, with the
corresponding Program and Financing Schedule, in the Budget of the United States.

Allotment
An authorization by either the agency head or another authorized employee to his/her subordinates to incur
obligations within  a specified amount. Each agency makes allotments pursuant to specific procedures it
establishes within the general requirements stated in OMB Circular A-11 (Part 4 )/lnstructions on  Budget
Execution (formerly OMB Circular A-34). The amount allotted  by an agency cannot exceed the amount
apportioned by the Office of Management and Budget.

Antideficiency Act
Enacted legislation which:

•     prohibits the making of expenditures or the incurring of obligations prior to appropriations,

•     prohibits the incurring of obligations or the making of expenditures (outlays) in excess of amounts
      available in appropriation or fund accounts unless specifically authorized by law (31 U.S.C. 1341 (a)),
•     requires agencies to apportion appropriated funds and other budgetary resources (31  U.S.C. 1512),

•     requires a system  of administrative  controls  within each  agency (see 31 U.S.C. 1514  for the
      administrative divisions established),

•     prohibits incurring any obligation or making any expenditure (outlay) in excess of an apportionment or
      reapportionment or in excess of other subdivisions established pursuant to 31 U.S.C. 1513 and 1514
      (31 U.S.C. 1517),

•     specifies penalties for Antideficiency violations (see Antideficiency Act Violation),

•     requires the apportionment of appropriation or fund accounts to prevent the need for a supplemental or
      deficiency appropriation, and

•     assists in bringing about the most effective and economical use of appropriations and funds (31 U.S.C.
      1512-1519).

The Act  permits  agencies  to  reserve  funds (that is,  withhold them  from obligation)under  certain
circumstances.
                                             137

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                       01/15/08
Antideficiency Act Violation
An Antideficiency Act violation occurs when one or more of the following occurs:

•     over obligation or over expenditure of an appropriation or fund account (31 U.S.C. 1341 (b));

•     entering into  a contract or making an obligation in advance of an appropriation, unless specifically
      authorized by law (31 U.S.C. 1341 (a));

•     acceptance of voluntary service, unless authorized by law (31 U.S.C. 1342); or

•     over obligation or over expenditure of (1) an apportionment or reapportionment or (2) amounts
      permitted by the administrative control of funds regulations (31 U.S.C. 1517(a)).

Penalties for Antideficiency Act violations include administrative discipline, such as suspension from duty
without pay or removal from office. In addition, an officer or employee convicted of willfully and knowingly
violating  the law shall be fined  not more than $5,000, imprisoned for not  more than 2 years, or both (31
U.S.C. 1349, 1350, 1518, and 1519).

Apportionment
An action by which  OMB distributes  amounts available  for obligation, including budgetary reserves
established  pursuant  to law, in an appropriation or fund  account. An apportionment divides amounts
available for obligation by specific  time  periods (usually quarters),  activities, projects, objects, or a
combination thereof. The amounts so apportioned limit the  amount of obligations that may be incurred. In
apportioning any account, some funds  may be reserved to  provide for contingencies or to effect savings,
pursuant to the Antideficiency Act. Funds, including Antideficiency Act reserves, may also be proposed for
deferral or rescission pursuant to the Impoundment Control Act of 1974 (2 U.S.C. 681-688).

The apportionment process is  intended to (1)  prevent the obligation of amounts available  within an
appropriation or fund account in a manner that would require deficiency or supplemental appropriations and
(2) achieve the most effective and economical use of amounts made available for obligation.

Appropriation Act
A statute, under the jurisdiction of the  House and Senate  Committees on Appropriations, that generally
provides legal authority for federal agencies to incur obligations and to make payments out of Treasury for
specified purposes. An appropriation act fulfills the requirement of Article I, section  9 of the Constitution,
which provides that no money shall be drawn from the Treasury, but  in Consequence of Appropriations
made by Law." Consequently,  even entitlements must be funded by appropriations;  however, such
appropriations (often permanent, indefinite ones that are not under the jurisdiction  of the appropriations
committees) may be created by authorizing legislation.

An appropriation act generally follows enactment of authorizing legislation unless the authorizing legislation
provides budget authority.

The three major types of appropriation acts are regular, supplemental, and continuing.  Regular appropriation
acts are all appropriation acts that are not supplemental or  continuing.  Currently, 13 regular appropriation
acts are considered annually. From time to lime, supplemental appropriation acts are also enacted. When
action on regular appropriation bills is not completed before the beginning of the fiscal year, a continuing
resolution or bill may be enacted to provide funding for the affected  agencies for  the full year,  up to a
specified date, or until their regular appropriations are enacted.
                                             138

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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS                        01/15/08
Authorizing Committee
A standing committee of the House or Senate with legislative jurisdiction over the subject matter of those
laws, or parts of laws, that set up or continue the operations of federal programs or agencies. An authorizing
committee also has jurisdiction in those instances where backdoor authority is provided in the substantive
legislation.

Authorizing Legislation
Substantive legislation that sets up or continues the operation of a federal program  or agency either
indefinitely or for a specific period of time or that sanctions a  particular type of obligation or expenditure
within a program. Authorizing legislation is normally a prerequisite for appropriations. It may place a limit on
the amount of budget authority to be included in appropriation acts  or it may authorize the appropriation of
~such sums as may be necessary." In some instances, authorizing legislation may provide authority to incur
debts or may mandate payment to particular persons or political subdivisions of the country.

Budget Amendment
A revision to a pending budget request which the President submits to the Congress before the Congress
completes appropriations action.

Budget Authority
Authority provided by  law to enter into financial obligations that will result in immediate or future outlays
involving federal government funds. Budget authority includes the credit subsidy cost for direct loan and loan
guarantee programs, but does not include authority to insure or guarantee the  repayment of indebtedness
incurred by another person or government.

The basic forms of budget authority include (I) appropriations, (2) borrowing authority, (3) contract authority,
and (4) authority to obligate and expend  offsetting  receipts  and  collections. Budget authority may be
classified by its duration (l-year,  multiple-year, or no-year),  by the timing of the legislation  providing the
authority (current or permanent), by the manner of determining the amount available (definite  or indefinite),
or by its availability for new obligations.

Forms of Budget Authority are:
1.    Appropriations
      Authority  given to federal  agencies to incur obligations  and  to  make payments from Treasury for
      specified  purposes. An appropriation act, the most common means of providing  budget  authority,
      usually follows the enactment of authorizing legislation, but in some cases the authorizing legislation
      itself provides the budget authority.

      Appropriations do not represent cash actually set aside in Treasury for purposes specified in the
      appropriation act; they represent authority that agencies may use to obligate funds during the period of
      time specified in the respective appropriation acts. Certain types of appropriations are not counted as
      budget authority because  they do not provide authority to incur obligations. Among these are
      appropriations:

      •     liquidate contract authority  (legislation to provide  funds to pay obligations  incurred against
           contract authority)

      •    to redeem outstanding debt (legislation to provide funds for debt retirement), and  to refund
           receipts.
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2.    Authority
Authority that permits agencies to incur obligations and make payments to liquidate the obligations out of
borrowed moneys. Usually the funds are borrowed from Treasury, but in a few cases agencies borrow
directly from the public. Borrowing authority does not include Treasury's authority to borrow from the public
or other sources.

3.    Contract Authority
Authority that permits obligations to be incurred in advance of appropriations or receipts. Contract authority is
therefore  unfunded and a subsequent appropriation  or offsetting collection  is needed  to liquidate the
obligations.

4.    Offsetting Receipts and Collections
Authority to obligate and expend the proceeds of offsetting receipts and  collections. The Congressional
Budget Act of 1974, as amended by the Budget Enforcement Act of 1990, defines offsetting receipts and
collections as negative budget authority and the reductions thereof as  positive budget authority.

Amount Determinations are:

•     Definite Authority
      Budget authority which is stated as a specific sum at the time the authority is granted. This type of
      authority, whether in an appropriation act or other law, includes authority stated as "not to exceed" a
      specified figure.

•     Indefinite Authority
      Budget authority of an unspecified  amount  of money.  Indefinite budget authority (usually an
      appropriation) maybe appropriated as all or part of the amount of proceeds from the sale of financial
      assets, the  amount necessary to cover obligations  associated with payments, the receipts from
      specified sources-the exact amount of which is determinable only at some future date or it may be
      appropriated as "such sums as may be necessary" for a given purpose.

Duration can be:

•     One-Year (Annual) Authority
      Budget authority which is available for obligation only during a specific fiscal year and which expires, if
      not obligated, at the end of that time. It is also known  as a "fiscal year" or "annual" budget authority.

•     Multiple-Year Authority
      Budget authority which is  available for a specified period of time in excess of 1  fiscal year. This
      authority generally takes the form of 2-year, 3-year, etc., availability but may cover periods that do not
      coincide with the start or end of a fiscal year.  For example, the authority may be available from July 1
      of one year through September 30 of the following fiscal year, a period  of 15 months. This type of
      multiple-year authority is sometimes referred to as "forward funding." No-Year Authority

      Budget authority that remains available for  obligation for an indefinite period of time,  usually until
      the-objectives for which the authority was made available are attained.
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 Extensions of Budget Authority are:

 •     Reappropriation
      Statutory action to continue the availability, whether for the same or different purposes, of all or part of
      the  unobligated portion of budget  authority that has expired or would otherwise expire.  Re-
      appropriations are counted as budget authority in the first year for which the availability is extended.

 •     Continuing Appropriation/Continuing Resolution
      Legislation that may be enacted to provide budget authority for federal  agencies and/or specific
      activities to continue in operation when the Congress and the President have not completed action on
      appropriations by the beginning of the fiscal year. Until regular appropriations are enacted, continuing
      appropriations  may take their place. Continuing appropriations usually are passed in the legislative
      form of joint resolutions.

 A continuing resolution maybe enacted for the full year, up to a specified date, or until regular appropriations
 are enacted. A continuing resolution usually specifies a maximum rate at which the obligations may be
 incurred based  on levels specified in the resolution.

 The resolution  may state that obligations may not exceed the current rate  or must be the lower of the
 amounts provided in  the appropriations bills passed in the House or Senate. If enacted to cover the entire
 fiscal year, the resolution will usually specify amounts provide for each appropriation account.

 Timing of Legislative Action:

 •     Current Authority
      Budget authority made available by the Congress in or immediately prior to, the fiscal year or years
      during which the funds are available for obligation.

 •     Permanent Authority
      Budget authority that is available as the result of previously enacted legislation and which does not
      require new legislation for the current year. Such budget authority can be the result of substantive
      legislation or appropriation acts. When budget authority is enacted that will be treated as permanent
      authority in subsequent years, it is treated as permanent authority the first year it becomes available,
      as well as in succeeding years.

 Availability for New Obligations:

 •     Expired Budget Authority
      Budget authority which is no longer available to incur new obligations. Such authority is still available
      for 5 years (7 years at EPA) afterthe account expires forthe payment of those valid obligations which
      were incurred before the authority expired. Unobligated balances of expired budget authority remain
      available  for 5 years  (7 years at EPA) after the account expires to cover adjustments to  prior
      obligations or obligations that should have been but may not have been recorded at that time. (For a
      statutory reference, see 31 U.S.C. 1552 (a)(2).

 •     Unexpired Budget Authority
      Budget authority which is available for incurring  new obligations.

 Budget Estimates
 Estimates of budget authority, outlays, receipts, or other budget measures that cover the current, budget,
 and future years, as reflected in  the President's budget and budget updates.

 Budget Preparation System (formerly BPS,  now MAX)
 A computer system used by OMB to collect and process much of the information  required for preparing the
 budget.


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 Budgetary Resources
 The forms of authority given to an agency allowing it to incur obligations. Budgetary resources include the
 following: new budget authority, unobligated balances, direct spending authority, and obligation limitations.

 Carryover
 Unobligated balance of an appropriation account which has not expired at the end of the fiscal year. The
 treatment of carryover appropriated funds are discussed in Chapters, Section II.C "Carryover of Unobligated
 Balances" of this Manual.

 Closed Account
 An appropriation account whose balance has been canceled. Once balances are canceled, the amounts are
 not available for obligation or expenditure for any purpose.

 An account available for a definite period (fixed appropriation account) is canceled 5 fiscal years (7 years for
 EPA) after the period of availability for obligation ends.

 An account  available for an indefinite period (no-year account) is canceled if (1) the head of the agency
 concerned or the President determines that the purposes for which the appropriation was made have been
 carried out and (2) no disbursement has been made against the appropriation for 2 consecutive fiscal years.

 Commitment
 A commitment is an administrative reservation  of an allotment or of other funds in anticipation of their
 obligation.

 Congressional Budget
 The budget  as set forth by the Congress in a concurrent resolution on the budget.  By law, the resolution
 establishes, for the fiscal year beginning on October 1 of the year of the resolution, planning levels forthe 2
 following fiscal years and appropriate levels forthe following:

 •     total federal revenues;

 •     the surplus or deficit hi the budget;

 •     new budget authority, budget outlays, direct loan obligations, and primary loan guarantee commitments
      in total and for each major functional category;

 •     the public (Treasury) debt practically defined as debt subject to statutory limit; and

 •     for purposes of  protecting Social  Security trust funds in the Senate, Social Security outlays and
      revenues.

 Congressional Budget Act
 The law (Titles I-IX of the Congressional Budget and Impoundment  Control Act of 1974, as amended, 2
 U.S.C. 601461) that established the congressional budget process  and created the Senate and House
 Budget Committees and Congressional Budget Office.

 The act created a timetable  for the budget process, established a  requirement for a yearly concurrent
 resolution on  the budget and  procedures concerning its adoption and set forth a procedure  called
 reconciliation to assure congressional committee compliance with the concurrent resolution on the budget.

 Contingent Liability
 An existing condition, situation,  or set of circumstances which poses the possibility of a loss to an agency
 that will ultimately be resolved when one or more future events occur or fail to occur. Contingent liabilities
 may lead to outlays. Contingent liabilities arise, for example, with respect to unadjudicated claims and flood
 insurance, loan guarantee programs, and bank deposit insurance  programs. Contingent liabilities  are

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 normally not covered by budget authority.
 However, under credit reform, for most programs, loan guarantee commitments cannot be made unless the
 Congress has made appropriations of budget authority to cover the credit subsidy cost in advance in annual
 appropriations acts.

 Financing Account
 A non-budget account (or accounts) associated with each credit program account which holds balances,
 receives the subsidy cost payment from the credit program account, and includes all other cash flows to and
 from the government resulting from direct loan obligations or loan guarantee commitments made on or after
 October 1, 1991.

 Deferral of Budget Authority
 Temporary withholding or delaying the obligation or expenditure of budget authority or any other type of
 executive action which effectively precludes the obligation or expenditure of budget authority.  Budget
 authority may be  deferred to provide  for contingencies, to achieve savings or greater efficiency in the
 operations of the government, or as otherwise specifically provided by law. Budget authority may not be
 deferred in order to effect a policy in lieu  of one established by law or for any other reason.

 Deferrals may be proposed by agencies but must be communicated to the Congress by the President in a
 special message. Deferred budget authority may not be withheld from obligation unless an act is passed to
 approve the deferral and the act is presented to the President. Additionally, unless the Congress has
 approved a deferral, budget authority whose availability expires at the end of the fiscal year must be made
 available with sufficient time remaining in the fiscal year to obligate that budget authority before the end of
 the fiscal year.

 Deficiency Apportionment
 An apportionment by the Office of Management and Budget for the fiscal year in an amount or rate that may
 compel the enactment of supplemental budget authority. Such apportionments may only be made under
 certain specified conditions as provided for in the Antideficiency Act, 31  U.S.C. 1515. In such instances, the
 need for additional budget authority is usually indicated by apportioning for the fourth quarter less than the
 amount that will actually be required. Approval of requests for deficiency apportionment does not authorize
 agencies to exceed available resources within an account.

 Deficiency Appropriation
 A type of supplemental appropriation which provides budget authority necessary | to cover obligations that
 have been incurred in excess of available authority.
 Deficit

 •     Budget Deficit
      The amount by which the government's budget outlays exceed its budget receipts for a given period,
      usually a fiscal year. For purposes of defining deficits under Gramm-Rudman-Hollings as amended by
      the Budget Enforcement Act, this amount excludes the off-budget activities such as the outlays and
      receipts of the Postal Service and Social Security.

 •     Total Deficit
      The amount by which the government's on-budget and off-budget outlays exceed the sum of its
      on-budget and off-budget receipts for a given period, usually a fiscal year.

 Deobligation
 An agency's cancellation or downward adjustment of previously recorded obligations.

 Earmarking
 Either of the following:


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 •     Dedicating collections by law for a specific purpose or program. Earmarked collections comprise trust
      fund  receipt accounts,  special fund  receipt accounts, and  offsetting collections credited to
      appropriation accounts. These collections may be classified as budget receipts, proprietary receipts, or
      reimbursements to appropriations.

 •     Dedicating appropriations fora particular purpose. Legislative language may designate any portion of a
      lump-sum amount for particular purposes.

 Emergency Appropriation (Budget Enforcement Act Term)
 For fiscal years 1991 through 1995, an appropriation designated as an emergency requirement by both the
 President and the Congress. Under BEA, the discretionary spending limits are adjusted by the total amount
 of such appropriations for the fiscal year in which the appropriation was enacted and each succeeding year
 through 1995 and will not cause a sequestration.

 Expenditure
 With respect to provisions of 31 U.S.C. 1341 (a) and 2 U.S.C. 622(1), a term that has the same definition as
 outlay or disbursement.

 Expense
 For accounting purposes, the outflow of assets or incurrence of liabilities (or both) during a period as a result
 of rendering services, delivering or producing goods,  or carrying out other normal operating activities.

 Expired Account
 An appropriation or fund account in which the balance is no longer available for incurring new obligations
 because the time available for incurring such obligations has expired. Expired accounts will be maintained by
 fiscal year identity for 5 years (7 years at EPA). During this 5-year period (7 years at EPA), obligations may
 be adjusted if otherwise proper and outlays may be made from these accounts.  Unobligated balances will
 not be withdrawn from expired  accounts. They will remain available for legitimate obligation adjustments or
 for obligations  properly chargeable to such accounts, which should  have been but were not recorded, but not
 for  new obligations. After the  five-year period  has elapsed,  all obligated and  unobligated  balances are
 canceled and the expired account is closed.

 Fiscal Policy
 Federal government policies with respect to taxes and spending which are intended to promote the nation's
 macroeconomic goals, particularly with respect to employment, gross domestic product, price level stability,
 equilibrium  in  the balance of payments, the exchange rate, the  current account, and the national
 savings/investment balance. The budget process is a major vehicle for determining and implementing
 federal fiscal policy.

 Fiscal Year
 Any yearly accounting period, regardless of its relationship to a calendar year. The fiscal year forthe federal
 government begins on  October 1 of each year and ends on September 30 of the following year, it is
 designated by the calendar year in which it ends. For example, fiscal year 1990 began October 1,1989, and
 ended September 30,1990. (Prior to fiscal year 1977, the federal fiscal year began on July 1 and ended on
 June 30.)

 1.    Budget Year
 The fiscal year for which the budget formulation  estimates are being considered, that is the fiscal year
 following the current year. For Budget Enforcement Act purposes, the term budget year means, with respect
 to a session of Congress, the fiscal year of the Government that starts on October 1  of the calendar year in
 which that session begins.

 2.    Current Year
 The fiscal year immediately preceding the budget year. For Budget Enforcement Act  purposes, the term
 current year means, with respect to a budget year, the  fiscal  year that immediately precedes that budget
 year.

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  3.    Prior Year
  The fiscal year immediately preceding the current year.
Forward Funding - Forward funding can be defined in two ways:

Appropriations of budget authority that are made available for obligation in the last quarter of the fiscal year for
the financing of ongoing grant programs during the next fiscal year.

Appropriations of budget authority that is available for a specified period of time, generally in excess of one
fiscal year, which may cover periods that do not coincide with the start or end of a fiscal year. For example,
an appropriation available from July 1,  2004 until September 30, 2005 (Comptroller General decision).

Fund Accounting
The legal requirement that federal agencies establish accounts for segregating revenues, other resources,
related liabilities, obligations, and balances in order to carry out specific activities or achieve certain objectives
in accordance with special regulations, restrictions, or limitations.

In a broad sense, the federal government requires fund accounting to demonstrate agency compliance with
existing legislation for which government funds have been appropriated or otherwise authorized. One of the
most important laws requiring federal agencies to adhere to fund accounting concepts is the Antideficiency Act.

Grant
A federal financial assistance award making payment in cash or in kind for a specified purpose. The federal
government  is not expected to have substantial  involvement with, the state or local government or other
recipient while the contemplated activity is being performed.

The term "grants" frequently has a broader meaning and  may include grants to nongovernmental recipients,
whereas the term "grants-in-aid" is commonly restricted to grants to states and local governments. The two
major forms of federal grants-in-aid are  block and categorical. Block  grants are  given primarily to general
purpose governmental units in accordance with a  statutory formula.

Such grants can be  used for a variety of  activities within a broad functional area  Examples  of federal
block-grant programs are the Omnibus Crime Control  and Safe Streets Act of 1968, the Housing and
Community Development Act of 1974, and the grants to states for social services under Title XX of the Social
Security Act.

Categorical grants can be used only for a specific  program. They may be formula or project grants. Formula
grants allocate federal funds to states or their subdivisions in accordance with a distribution formula prescribed
by law or administrative regulation. Project grants provide federal funding for fixed or known periods for
specific projects or the delivery of specific services or products.

Impoundment
Any action or inaction by an officer or employee of the federal government  that precludes obligation or
expenditure of budget authority.

Incremental Funding
The provision or recording of budgetary resources for a program or project based on obligations estimated to
be incurred within a fiscal year when such budgetary resources will not cover all the program's or project's
obligations. Contracts that cannot be separated for  performance by fiscal year may not be funded on an
incremental basis without statutory authority.

Internal Control
Plan of organization, methods, and procedures adopted  by management to ensure that (1) resource use is
consistent   with laws, regulations, and policies; (2) resources are safeguarded against waste, loss, and
misuse; and (3) reliable    data are obtained, maintained, and fairly disclosed in reports.


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Liability
Assets owed for items received, services received, assets acquired, construction performed (regardless of
whether invoices have been received), an amount received but not yet earned, or other expenses incurred.

  Liabilities include (1) amounts owed for goods in the hands of contractors under the constructive delivery
  concept (when an agency, the seller,  meets long-term contract obligations) and (2) amounts owed under
  grants, pensions, awards, and other indebtedness not involving the furnishing of goods and services.

  Limitation
  A restriction on the  amount of budgetary resources that can  be obligated or committed  for a specific
  purpose. While limitations are  most often  established through  appropriations acts,  they can also be
  established through authorizing legislation. Limitations may be placed on the availability of funds for program
  levels, administrative expenses, direct loan obligations, guaranteed loan commitments, or other purposes.
  For the purposes of the Budget Enforcement Act, obligation limitations are one type of budgetary resource
  because they establish the amount that can be obligated.

  M Account
  A successor account into which obligated balances (unexpended funds)  under an appropriation were
  transferred from the expired account (merged) at the end of the second full fiscal yearfollowing expiration.
  The National Defense Authorization Act of 1991 (Public Law 101-510) amended the procedures for closing
  appropriation and fund accounts.
  Under this legislation, no new M accounts will be established and  existing M accounts will be phased out.

  Merged Surplus Account
  An account that represented an unobligated balance from an appropriation whose period of availability had
  been expired for more than  2 years. The National Defense Authorization Act of 1991 (P.L. 101-510)
  amended the procedures for closing appropriation and fund accounts. Underthis legislation, no new merged
  surplus accounts will be established and existing ones will be phased out.

  Multiyear Budget Planning
  A process such as the one used to develop the President's budget and the Congressional budget designed
  to ensure that the long-range  consequences of budget decisions are identified and reflected in the budget
  totals. The President's (or executive)  budget includes multiyear planning estimates for budget authority,
  outlays, and receipts for 4 years beyond the budget year. The congressional budget process considers
  estimates covering a 3 year period. However, under the Budget Enforcement Act, congressional budgets
  cover a 5 year period. This process provides a structure for the review and analysis of long-term program
  and tax policy choices.

  OMB planning  estimates are  either presidential policy or current services estimates. Presidential policy
  estimates represent projections or extrapolations of likely outcomes based upon current law and enunciated
  administration policy. In some cases,  outyear presidential policy estimates represent outyear policy rather
  than an extrapolation from budget-year policy. Current services estimates represent projections of possible
  outcomes based on the continuation of existing levels of service without policy changes.

  New Budget Authority
  Budget authority that first becomes available for obligation in a given fiscal year. This includes budget
  authority that becomes available as a  result of a reappropriation or a statutory change in the availability of
  unobligated balances from a prior fiscal year. It also includes a change in the estimated level of indefinite
  budget authority.

  Object Classes
  A uniform classification identifying the obligations of  the federal government by the types of goods or
  services purchased  (such as personnel compensation; supplies  and materials, and equipment) without
  regard to the agency involved  orthe purpose of the programs for which they are used. If the obligations are
  in a single  object classification category, the classification  is  identified in the  Program and  Financing
  Schedule in the Budget of the United States Government. For the activities distributed among two or more

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 object classification categories, the budget has a separate object classification schedule to show the
 distribution of the obligations by object classification. General instructions are provided in OMB Circular
 A-11.

 Obligational Authority
 The sum  of (1) budget authority provided for a given fiscal year, (2) unobligated balances of amounts
 brought forward from prior years, (3) amounts of offsetting collections to be credited to specific funds or
 accounts during that year, and (4) transfers between funds or accounts. The balance of Obligational authority
 is an amount carried over from one year to the next because not all Obligational authority that becomes
 available in a fiscal year is obligated and paid out in that same year.

 Balances  are described as (1) obligated, (2) unobligated, or (3) unexpended.

      Obligated Balances
      The amount of obligations already incurred for which  payment has not yet been  made. For a fixed
      appropriation account, this balance can be carried forward and retains its fiscal year identity for five
      fiscal years afterthe period of availability ends. At the end of the fiscal year, the account is closed and
      any remaining balance is canceled. Obligated  balances of an appropriation account available for an
      indefinite period  may be closed if (1) specifically rescinded by law, or (2) the  head of the agency
      concerned or the President determines that the purposes for which the appropriation was made have
      been carried out and disbursements have not been made against the appropriation for 2 consecutive
      years.

      Unobligated Balance
      The portion of Obligational authority that has not yet been obligated. Unobligated balances whose
      period  of availability has expired are not available for new obligation and may only  be used for
      recording, adjusting, and liquidating obligations properly chargeable to the fiscal year account. For a
      fixed appropriation account, the balance can be carried forward for five fiscal years afterthe period of
      availability ends.

      At the end of the fifth fiscal year, the account is closed and any remaining balance is canceled. For a
      no-year account, the unobligated balance is carried forward indefinitely until (1) specifically rescinded
      by law, or (2) the head of the agency concerned or the President determines that the purposes for
      which the appropriation was made have been carried out and disbursements have not been made
      against the appropriation for 2 consecutive years.

      Unexpended Balance
      The sum of the obligated and unobligated balances.

 Obligations Incurred
 Amounts of orders placed, contracts awarded, services received, and similar transactions during a given
 period that will require payments during the same or a future period. Such amounts will include outlays for
 which obligations have not been previously recorded and will reflect adjustments for differences between
 obligations previously recorded and actual outlays to liquidate those obligations.

 Outlay
 The issuance of checks, disbursement of cash, or electronic transfer of funds made to  liquidate a federal
 obligation. Outlays also occur when interest on the Treasury debt held by the public accrues and when the
 government issues bonds, notes, debentures, monetary credits, or other cash-equivalent instruments in
 order to liquidate obligations.

 Also, under credit reform, the credit subsidy cost is recorded as an outlay when a direct or guaranteed loan
 is disbursed. Outlays during  a fiscal year may be for payment of obligations incurred in prior years (prior-year
 obligations) or in the same year. Outlays, therefore, flow in part from unexpended balances of prior-year
 budgetary resources and in part from budgetary resources provided forthe year in which the money is spent.


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 Outyear
 Any year (or years) beyond the budget year for which projections are made. For Budget Enforcement Act
 purposes, the term outyear means, with respect to a budget year, any of the fiscal years that follow the
 budget year through fiscal year 1995.

 Reapportionment
 A revision of a previous apportionment of budgetary resources for an appropriation or fund account. This
 revision must be approved by the Office of Management and Budget. Agencies usually submit requests for
 reapportionment to OMB as soon as a change becomes necessary due to changes in amounts available,
 program requirements, or cost factors. (For exceptions, see OMB Circular A-34, sec. 44.4.) This approved
 revision would ordinarily cover the same  period, project,  or activity covered in the original  apportionment.

 Reimbursement
 A sum (1) that  is  received by the federal government as a repayment for commodities sold or services
 furnished either to the public or to another government account and (2) that is authorized by law to be
 credited directly to specific appropriation  and fund accounts.

 These amounts are deducted from the total obligations incurred (and outlays) in determining net obligations
 (and outlays) for such accounts. Reimbursements between two accounts for goods or services are an
 expenditure transaction/transfer.

 Anticipated reimbursements are, in the case of transactions with the public,  estimated collections  of
 expected advances to be received  or expected reimbursements to  be earned. In transactions between
 government accounts, anticipated reimbursements consist of orders expected to be received for which no
 orders have been accepted.

 Reobligation
 Obligation of deobligated funds for another purpose.

 Reprogramming
 Shifting funds within an appropriation or fund account to use  them for different purposes than those
 contemplated at the time of appropriation (for example, obligating  budgetary resources for a different
 program/program element from the one originally planned). While a transfer of funds involves shifting funds
 from one account to another, reprogramming involves shifting  funds within an account.

 Reprogramming is generally preceded by consultation  between federal agencies and  the appropriate
 congressional committees. It often involves formal notification and opportunity for congressional committees
 to state their approval or disapproval.

 Rescission
 Legislation enacted by Congress that cancels the availability of budgetary resources previously provided by
 law before the authority would otherwise lapse. The Impoundment Control Act of 1974 (2 U.S.C. 683)
 provides for the President to propose rescissions whenever the President determines that  all or part of any
 budget authority will  not be needed to carry out the full objectives or scope  of programs for which the
 authority was provided. Also, a rescission will be proposed if all or part of any budget authority limited to a
 fiscal year that is, annual appropriations or budget authority of a multiple-year appropriation in the last year of
 availability is to  be reserved from obligation for the entire fiscal year.

 Rescission of budget authority may also be proposed for  fiscal  policy or other reasons. Amounts proposed
 for rescission are withheld for up to 45 calendar days of continuous session while the Congress considers
 the proposals.

 All funds proposed for rescission, including those withheld, must be  reported to the Congress in a special
 message. If both houses have not completed action on a rescission  proposed by the President within 45
 calendar days of  continuous session, any funds being  withheld must be made available for obligation.
 Congress may also initiate rescissions through its own appropriations process. Such congressional action
 occurs for various reasons, including changing priorities, program terminations, excessive unobligated
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 balances, and program slippage.
 Rescission
 A bill or joint resolution that cancels, in whole or in part, budget authority previously granted by law.
 Rescissions proposed by the President must be transmitted in a special message to the Congress. Under
 section 1012 of the Impoundment Control Act of 1974 (2 U.S.C. 683), unless both houses of the Congress
 complete action  on a rescission  bill within 45  calendar days of continuous session after receipt of the
 proposal, the budget authority must be made available for obligation.

 Responsible Planning Implementation Office (s) - RPIOs
 RPIOs are the 23 EPA senior managers  including: thirteen individuals in headquarters (the Administrator,
 General Counsel, Inspector General,  nine Assistant Administrators (AAs)),  and the ten  Regional
 Administrators (RAs). Each has headquarters or regional operations to administer and a budget to execute.
 RPIOs are  responsible for implementing operating plans, controlling resource ceilings, and reviewing
 programs.

 Restoration
 An unobligated amount previously withdrawn  (that is, transferred out  of an appropriation  account) by
 administrative action that is returned to the account and again made available for obligation and outlay.

 Revenue
 Either of the following:

 •     As used in the congressional budget process, a synonym for governmental receipts. Revenues result
      from amounts, such as receipts from individual income taxes, that are owed to the government but for
      which  no current government action is required. Article I, section 7 of the U.S. Constitution requires
      that revenue bills originate in the House of Representatives.

 •     As used in an accounting sense, the increase in assets (or decrease in liabilities) that results from
      operations. Revenues result from (1) services performed by the federal government and (2) goods and
      other property delivered to purchasers.

 Spending Authority
 As defined  by section 401© of the Congressional Budget Act of 1974, as amended (2 U.S.C. 651 (c)), a
 collective designation for authority provided in laws other than appropriation acts to obligate the government
 to make payments. It includes contract authority, authority to borrow, and entitlement authority for which the
 budget authority is not provided  in advance by appropriation acts. It also includes authority to forgo the
 collection of proprietary offsetting receipts and to make any other payments for which the budget authority is
 not provided in advance by appropriation acts. Spending authority is  commonly referred to as backdoor
 authority or 401© authority.

 Spending Committee
 A standing committee of the House or Senate with jurisdiction over legislation permitting the  obligation of
 funds. The  House and Senate Appropriations Committees are spending committees for discretionary
 programs. For other  programs, the authorizing  legislation itself permits the obligation of funds (backdoor
 authority). In that case, the authorizing committees are the spending committees.

 Standard General Ledger Chart of Accounts
 A uniform listing of accounts and supporting transactions that standardizes federal agency accounting and
 supports the preparation of standard external reports.

 Sub-Object Class
 Sub-object class codes provide the  level of detailed information needed for recording and sorting various

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spending transactions and to fulfill external reporting requirements to OMB, GAO, Congress, etc.. All sub-
object class codes and definitions fall within the broader scope of the OMB Major Object Class codes.
Supplemental Appropriation
An act appropriating funds in addition to those in an annual appropriation act. Supplemental appropriations
provide additional budget authority beyond the original estimates for programs or activities (including new
programs authorized afterthe date of the original appropriation act) in cases where the need for funds is too
urgent to  be postponed until enactment of the regular appropriation bill. Supplemental may sometimes
include items not appropriated in the regular bills for lack of timely authorizations.

Surplus

•     Budget Surplus
      The amount by which the government's budget receipts exceed its budget outlays for a given period,
      usually a fiscal year. Sometimes a deficit is a negative surplus.

•     Total Surplus
The amount by which the sum of the government's on-budget and off-budget receipts exceed the sum of its
on-budget and off-budget outlays for a given period, usually a fiscal year.

Suspense Account
A combined receipt and expenditure account established to temporarily hold funds which are later refunded
or paid into another government fund when an administrative or final determination as  to the proper
disposition is made.

Transfer
Shifting of all or part of the budget authority in one appropriation or fund account to another,  as specifically
authorized by law. The nature of the transfer determines whetherthe transaction is treated as an expenditure
or a nonexpenditure transfer.

•     Expenditure Transfer
      A transaction between appropriation and fund accounts which represents payments, repayments, or
      receipts for goods or services furnished or to be furnished. Where the purpose is to purchase goods or
      services or otherwise benefit the transferring account, an expenditure transfer/transaction is recorded
      as an obligation/outlay in the transferring account and an offsetting collection in the receiving accounts.
      If the receiving account is a general fund appropriation account or a revolving fund account, the
      offsetting collection is credited to the appropriation or fund account. If the receiving account is a special
      fund or trust account, the offsetting collection  is usually credited to a  receipt account of the fund. All
      transfers between federal funds and trust funds-are also treated as expenditure transfers.

•     Nonexpenditure Transfer
      For  accounting and  reporting purposes, a transaction between appropriation and fund accounts that
      does not represent payments for goods and services received or to be received but rather serves only
      to adjust the amounts available in the accounts for making payments.  However, transactions between
      budget accounts and deposit funds will  always be treated  as expenditure transactions since the
      deposit funds are outside the budget. Nonexpenditure transfers also include allocations. These
      transfers  may not  be  recorded as  obligations  or  outlays of the  transferring accounts  or as
      reimbursements or receipts of the receiving accounts. For example, the transfer of budget authority
      from one account to another to absorb the cost of a federal pay raise is a nonexpenditure transfer.

Undelivered Orders
The value of goods and services ordered and obligated which have not been received. This amount includes
any orders for which advance payment has been made but for which delivery or performance has not yet
occurred.  This term is synonymous with unliquidated obligations.

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 User Fee
 A fee charged to users for goods or services provided by the federal government. User fees generally apply
 to federal activities that provide special benefits to identifiable recipients above and beyond what is normally
 available to the public. User fees are normally related to the cost of the goods or services provided. They
 may be paid into the general fund or, under specific statutory authority, may be made available to an agency
 carrying out the activity. An example is a fee for entering a national park.

 From an economic point of view, user fees may also be collected through a tax such as an excise tax. Since
 these collections result from the government's sovereign powers, the proceeds are recorded as budget
 receipts, not as offsetting receipts or offsetting collections.

 In the narrow budgetary sense, a toll for the use of a highway is considered a user fee because it is related
 to the specific use of a particular section of highway. Such a fee would be counted as an offsetting receipt or
 collection and might be available for use by the agency. Alternatively, highway excise taxes on gasoline are
 considered a form of user charge in the economic sense, but since the tax must be paid regardless of how
 the gasoline is used and since it is not directly linked with the provision of the specific service, it is
 considered a tax and is recorded as a governmental receipt in the budget.

 Working Capital Fund
 A revolving fund that operates as an accounting  entity. In these funds, the assets are capitalized and all
 income is in the form of offsetting collections derived from the funds' operations and available in their entirety
 to finance the funds' continuing cycle of operations without fiscal year limitation. A working capital fund is a
 type of intra governmental revolving fund.
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        APPENDIX B

          CHECKLIST of
   GOOD FUNDS CONTROL
          PRACTICES
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             CHECKLIST of GOOD FUNDS CONTROL PROCEDURES

 Maintain a Centralized Document Control Record
 Allowance Holders and FCOs should maintain a document record system which houses copies of all funding
 documents with their Document Control Numbers, along with budget reports which are used in tracking the
 status of those funding documents.

 Prepare Practical Budget Execution Reports
 Allowance Holders and FCOs should also maintain budget/financial reports which show the current status of
 funds on all accounts by appropriation,  PRC/Object Class. These may be prepared on a monthly, quarterly,
 or even weekly basis (near the end of the FY).

 Certify Availability of Funds
 The Funds Control Officers must certify the availability of funds for every commitment and obligating action
 and ensure that no spending action will exceed a specific limitation in the Advice of Allowance.
 (Allowance Holders not budgeting at the RC level should, at a minimum, inform their RCs what their budget
 is in an operating-plan memorandum).

 Do Not Exceed Ceilings
 Allowance Holders must not exceed allowances or certain object class ceilings, i.e., travel, Superfund
 functional, and FTE ceilings. Allowance Holders should never assume that additional resources orworkyears
 will be  reprogrammed to their allowances if they exceed a resource ceiling.

 Commit Funds in IFMS
 Allowance Holders and FCOs are required to enter all commitments into the agency Integrated Financial
 Management System (IFMS) on a timely basis, and ensure that the funds will not be altered or withdrawn
 prior to obligation without advance notice to the proper obligating official.

 Spend Evenly Throughout the Year
 Allowance Holders should ensure that their funds are spent evenly throughout the fiscal year.  They should
 avoid last minute  year-end spending.

 Anticipate Reprogrammings
 Allowance Holders should anticipate reprogramming requests in advance and submit them to the Budget
 Division on a timely basis.

 Reconcile with IFMS
 Funds  Control Officers should reconcile their funding documents on a regular basis with IFMS to ensure all
 documents have  been fully liquidated (paid), and resolve any discrepancies accurately and as quickly as
 possible.

 Develop and Maintain Standard Operating Desk Procedures
 Allowance Holders and FCOs should prepare written procedures indicating specific steps to be followed to
 implement the activities specified in this directive. These procedures should describe how to do the daily
 funds control activities when the AH or FCO is out of the office.  Several examples of SOPs include:
    •   How funding documents, such as Purchase Requests (PRs), Bankcard transactions, and Working
        Capital Fund Service Agreements are processed within the office;
    •   How Travel-related documents, such as Travel Authorizations and Vouchers, are processed;
    •   How often monthly funds status reports and financial reconciliations are conducted;
    •   Where to find the latest status of funds report (ie. what documents have been obligated and which
        ones are still committed), how to run FDW reports, and where to find copies of current funding
        documents.

 Delegate Authority
 Allowance Holders should identify, in writing, their Funds Control Officer and designated backup.
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        APPENDIX  C
         SUGGESTED
             FCO
    JOB QUALIFICATIONS
        and TRAINING
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                                        Suggested
                              Funds Control Officer (FCO)
                            Job Qualifications and Training


       A prerequisite  to  enhancing human resource  development  is  the  establishment of core
 competencies for individuals who work in federal financial management.  While there are currently no
 specific and/or formal job qualification standards and training  requirements for an EPA Funds Control
 Officer, the following requirements are recommended for sustaining and developing the career growth of an
 FCO:

 COMPETENCIES

       Basic knowledge of Federal budget and accounting principles, policies, and procedures sufficient to
       understand their relationship to  allotments, financial  plans,  allowances, commitments,  and
       obligations.

       Knowledge of public laws and the legal requirements placed on appropriations, as well as OMB
       circulars/bulletins and Agency directives/policies governing the budget process.

       Knowledge of Agency's  financial systems and internal controls sufficient to retrieve financial
       information to monitor and reconcile all funding documents, and prepare status of funds reports for
       all program accounts.

       Knowledge of OMB and Agency Object classes, Agency account coding, and document flow.

       Knowledge of Agency's budget operations and processes and how obligations and expenditures are
       incurred for assigned program areas.

       Knowledge and  ability to certify the availability of funds from within the assigned allowance(s), and
       procedures used in requesting the reprogramming of funds.

 TRAINING

 D      Principles of Federal Appropriations Law course

 D      Federal Budget  Process course

 D      Federal Budget  Execution course

 D      Office of Budget's Basic Budget Execution course

 D      Office of Acquisition and Management's Purchase Card training class

 D      Administrative Control of Appropriated Funds course _1/

 D      Basic computer applications for spreadsheets and writing

 D      Effective Communication (oral and writing) course


 NOTE: 1- Proposed internal Agency course for individuals assigned the position of FCO. Authority to certify
 the availability of funds will be contingent upon the successful completion of this course once it becomes
 available.

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        APPENDIX D
     FREQUENTLY ASKED
         QUESTIONS
            (FAQs)
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                       BUDGET EXECUTION

            FREQUENTLY ASKED QUESTIONS (FAQs)


                              INDEX

FAQ #:    TOPIC

A^        REPROGRAM MINGS:
A1.        BUDGET REPROGRAMMINGS TO BE APPROVED
A2.        "DEFACTO REPROGRAMMINGS"
A3.        EMERGENCY REPROGRAMMINGS
A4.        ENSURING THAT MY FUNDS ARE ISSUED AT THE RC LEVEL
A5.        ERROR MESSAGE "INSUFFICIENT RESOURCES"
A6.        FTE REPROGRAMMINGS
A7.        IFMSSUSF TABLE
A8.        JUSTIFICATIONS
A9.        LINE LIMITATION
A10.       LIST OF VALID PROGRAM RESULTS CODES (PRCs)
A11.       OPENING "BUDGET BUCKETS
A12.       RESPONSIBILITY CENTER (RC) LEVEL IFMS TABLES
A13.       RP VS AN RR REPROGRAMMING DOCUMENTS
A14.       (SALC) LEVEL IS NEGATIVE IN IFMS
A15.       STATUS OF A REPROGRAMMING DOCUMENT
A16.       TRANSFERRING RESOURCES TO ANOTHER RPIO
A17.       VIEWING "HARD ERROR" REPROGRAMMING MESSAGES

B.        CONTRACTS:
B1.        MOVING FUNDS BETWEEN CONTRACT OPTIONS
B2.        OVERRUNS
B3.        SPLIT-FUNDING OBLIGATIONS

C.        GRANTS:
C1.        DIRECT IMPLEMENTATION
C2.        "IN-KIND" GRANTS
C3.        MOVING FUNDS BETWEEN GRANT BUDGET PERIODS

D.        TRAVEL
D1.        INVITATIONAL TRAVEL ORDERS
D2.        PROCUREMENTS FOR LODGING AND SUBSISTENCE
D3.        SITE-SPECIFIC TRAVEL
D4.        TRAVEL OR TRAINING FOR THE NEXT FISCAL YEAR

E.        GENERAL:
E1.        OGC OPINIONS ON USING APPROPRIATED FUNDS TO PAY FOR MEALS AND
          REFRESHMENTS AT CONFERENCES AND MEETINGS
E2.        ADMINISTRATIVE VS. PROGRAMMATIC WCF
E3.        ITEMS PROVIDED TO THE PUBLIC
E4.        OPEN COMMITMENTS FUNDED WITH 2 YEAR APPROPRIATED FUNDS
E5.        SELECTING SUB-OBJECT CLASS CODES
E6.        SUB-OBJECT CLASS CODE FOR I PAS
E7.        VIEWING DEOBLIGATIONS IN IFMS
E8.        VIEWING YEAR-END CARRYOVER BALANCES IN IFMS
E9.        POLICY AND PROCESS TO CHANGE A PROGRAM RESULTS CODE

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A.  REPROGRAMMINGS:

  A1.    How long does it take budget reprogrammings to be approved?

        Once a reprogramming document is entered into IF MS and 1st level approval is applied,
         the Office of Budget (OB) Control Team will pull  and review that document the
        following morning.   The analyst will either process the document  immediately or, if
        necessary, submit it to the appropriate OB staff for review. The OB staff has 3 days to
        review, approve, and return the document to the Control Team for action. OB strives to
        process most reprogrammings in 5 work days. This time frame will expand if:  1) the
        reprogramming does not clearly state the impact to both the gaining and losing program
        results code  (PRC)  (see next FAQ); 2)the reprogramming purpose is not clear, or 3) if
        there are policy issues or data entry errors. Recertification requests and requests for
        additional administrative or travel ceiling will take longer as additional research and/or
        review  of RPIO spending  patterns may be needed.  Reprogrammings  requesting
        reimbursable allowances are processed once a week.

  A2.    What is a "defacto reprogramming"? What do I do to prevent them?

        A defacto reprogramming is created when an AH commits and/or obligates funds in
        excess of a  goal/objective in their Operating Plan.  In effect they have already
        reprogrammed and spent the funding without bothering  to actually  process a
        reprogramming. Since we have an annual Congressional Reprogramming Limitation for
        goal/objectives for which we must monitor, defacto reprogrammings bypass the
        automated controls in IFMS which help to do this and pose a risk to the Agency.
        Defacto reprogrammings are corrected by  decommitting and deobligating funds or by
        processing  the reprogramming  that  should have been done first.    Defacto
        reprogrammings are prevented by processing  a  reprogramming in advance of
        committing and obligating funds.

  A3.    How can I get a reprogramming which needs to be processed  on an emergency basis
        approved more quickly than 3 workdays?

        A regular dialog of communication should exist between the requestor and the budget
        analyst processing the requests. An expressed need for priority consideration will be
        taken seriously if it does not become  a  habit.   To request OB  to  process a
        reprogramming on an "emergency" basis,  the requestor should call their control team
        analyst or the control team leader.

  A4.    My RPIO operates at the "RC" level. I receive resources often from other RPIOs and the
        resources are issued to me at the allowance  level.  Why  do  I have  to continue
        processing reprogramming documents to move my funds from the allowance level to the
        SUB-allowance (RC) level. Who's responsible for ensuring that my funds are issued at
        the RC level?

        It is the responsibility of the RPIO issuing resources to your RPIO to ensure that you
        receive your funds at the RC level. They should contact you for the information &
        include it in the reprogramming document...otherwise substantial delays may occur.

  A5.    I entered a reprogramming and received an error message stating there are insufficient
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      resources at the Sub-Allotment (SALC) level. What does that mean?

      This is the funds control lockout level in IFMS.  When reprogramming resources, you
      must have an  available unobligated/uncommited balance at the AH/Appropriation
      (SALC) level. If not, IFMS will not process the document.

A6.   How do I reflect FTEs on a reprogramming document?

      As a numeric with two decimal places (e.g.  1.00) - FTE budget level = F

A7.   How long do reprogrammings remain on the IFMS SUSP table?

      Once processed, they should remain for 7 days; during peak periods (September) this
      may be reduced to 5 days. Documents that have rejected remain until deleted by the
      Program office. OB may clean up old reprogrammings once or twice a year. After they
      ha ve been processed and are no longer on SUSF, header and line information can be
      viewed on IFMS tables RPGH and RPGL respectively.

A8.   How should a reprogramming justification be  properly written?

      FCO's must ask the person in their office who is initiating the reprogramming action for
      sufficient details to provide an adequate justification. A well written, informative purpose
      statement is necessary for approval of the reprogramming document. Reprogramming
      justifications provide the permanent audit trail of EPA's resources and protection for the
      initiator whose rationale is documented. Reprogramming justifications should simply
      state: 1.) what the action achieves for the program(s) oroffice(s) receiving an increase
      and, 2.) what the impact is to the program(s) or office(s) losing resources.  We can't
      accept acronyms in justification unless  it is a universal known acronym. As part of the
      IG audit, it was  determined  that many justifications  are too vague and not
      understandable. In order to correct this problem, the Budget Control Team is requiring
      that justifications be explicit. For more on how to write a reprogramming justification,
      see Exhibit 2520-3-4 in the main chapters of the Administrative Control of Appropriated
      Funds (funds control manual).

A9.   What is the reprogramming document limitation on the number of lines permissible on
      one reprogramming?

      You should never exceed 13 lines (from and to total) on the line screen.

A10.  I don't know the correct Program Results Code (PRC). Which IFMS table can I access
      to view the list of valid program results codes?

      The IFMS 'PGMT table provides a listing of all valid program results codes.

A11.  What about opening "budget buckets"? Before IFMS opens for reprogrammings at the
      start of the new fiscal year, how can we commit funds in a BOC that has not yet been
      established in our AH?

      You must request that the OB open the BOC and you must justify this action. We
      encourage  everyone  to  establish all anticipated BOC  addresses in their initial
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      development of the Operating Plan to avoid this delay.

A12.  My office operates the Responsibility Center (RC) level. Which table is available in IFMS
      to reflect the Operating Plan and/or status of resources?

      The "SAIN"and "SASP" tables are available reflecting your operating plan, obligations,
      available balances etc.  RCBT table shows resources rolled up to the RC level (w/o
      BOCorPRC).

A13.  When do we use an RP vs an  RR document on reprogramming?

      The RR transaction is primarily for program offices to move resources within their own
      RPIO. All RR transactions require an approval by a Reprogramming Approval Official
      within each RPIO. In general, RR transactions do not require approval by OB. However,
      reprogrammings that affect ceilings and floors or that are greater than $250,000 do
      require OB approval.

      The RP transaction is used for reprogrammings across RPIOs, to and from the OB (for
      taps and increases), for Congressional Add-ons and for recertified funds and carryover
      funds. All RP transactions require OB approval.

A14.  My AH/Appropriation (SALC)  level is negative in IFMS.  How can that happen with a
      lockout and what do I do to correct it?

      The only thing  that IFMS will not lock out are payroll charges being loaded from the
      payroll sub-system because these are legal liabilities that have already been earned by
      the employee.  You have now exceeded your allowance. First, you should check that
      your pay roll was processed correctly.  If it is correct, you will need to either decommit
      ordeobligate some other item in your allowance orreprogram funds to this allowance
      from another AH in your RPIO, if possible. If you choose to reprogram funds, this action
      will be evaluated against the Congressional Reprogramming Limitation.

A15.  Where can I find the status of a reprogramming document without having to contact the
      OB?

      It  is important for users  to understand how to  read and follow the status of
      reprogramming requests on the suspense file IFMS table (SUSF) and we strongly
      encourage you to check SUSF before calling the OB.  SUSF shows the status of
      documents as being either held, approved, deleted, etc.

A16.  I am transferring resources to another RPIO, which document should I use?

      When transferring out of or to a different RPIO, you must always complete the "RP"
      document, not the "RR" document.

A17.  Which IFMS table should you reference if you see a "hard error" message on your
      reprogramming document?

      The "ERRG" table deciphers all hard error messages,  except for the absence of "to"
      and "from"lines, when appropriate, a "hard error" message should always be corrected
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          before forwarding your document to OB for review/approval.  OB cannot process your
          document through IFMS unless these errors are resolved.

B. CONTRACTS:

   B1.    Do I have to recertify funds with the Office of Budget(OB) when moving funds between
          contract options or base and option periods?

          For unexpired appropriations, recertification is not required by the OB when shifting
          funds between a contract base and its option periods or between contract option
          periods.    However,  these offsetting  transactions  are legal deobligations and
          reobligations and do require apportionment recovery authority. As such, they will be
          recorded and maintained in the formal IFMS sub-system called the Contracts Payment
          System (CPS).  The offsetting CPS entries, which net to zero, will not impact IFMS
          budget tables or create temporary fluctuations to budget balances. The OB will monitor
          overrun/recovery activity through IFMS reports to ensure that OMB apportionment
          authority is not exceeded.  For more information, search on Recertification of Funds in
          the main chapters of the Administrative Control of Appropriated Funds (funds control
          manual).

   B2.    Our office has an overrun. Who is supposed to pay for it?

          Ultimately,  the Allowance Holder is responsible. GAO defines overruns as "upward
          adjustments to recorded obligations".  For the purposes of funds control, the term
          "overrun" will be used by the OB to encompass all additional legal liabilities that the
          Agency did not record correctly in IFMS. These may occur for any number of reasons
          which include but  are not limited to:   unauthorized procurements,   unrecorded
          obligations, obligations deobligated in error, price changes,  cost-rate adjustments,
          final audit billings, court or other claims (such as Equal Access to Justice legal costs),
          payroll adjustments, etc.  Generally, overruns (if true legal liabilities) are posted to the
          original accounting data that was charged initially. If initially unrecorded,  it should be
          charged to the accounting data of the benefitting office where the goods or services
          were received and where the liability was created.  The OB may exercise its authority
          to take any of five distinct actions relating to  overruns or recoveries based on  the
          circumstances, timing, and amount of the transaction. The five distinct actions  are:

                a. net out overruns against offsetting recoveries,

                b. require a Program Office to cover the overrun from their current allowance in
                  the event that Agency policy was violated;

                c. recertify recovered funds back to the Allowance Holder;

                d. withhold recovered funds to offset overruns, or fund a new initiative or high
                 priority at the discretion of Agency Management;  or;

                e. cover overruns from a Centrally Managed Allowance;
                  For more information, search on Overruns/Recoveries in the  main chapters of
                the Administrative Control of Appropriated Funds (funds control manual).


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  B3.    Can I split-fund contractual obligations using multiple appropriations and what are the
         general rules I need to follow?

         This is a complicated issue. EPA receives funding from several appropriations and may
         fund  a spending action from one or more of these appropriations on a single work
         assignment, delivery order, or project depending on the nature of the goods or services
         provided. [See the discussion in Chapter 9 of the Contracts Management Manual for
         specific information on this topic.] Allocation of funding must be based on appropriation
         benefit, rather than which account can "afford" the work.  Additionally, the use of funds
         from  one appropriation because of the absence of funding in another violates basic
         appropriation  law.   For  more  information,  see  the  Split Funding with Multiple
         Appropriations section in the  main chapters of  the Administrative  Control of
         Appropriated Funds (funds control manual).

C.  GRANTS:

  C1.    How does the Regional Office charge costs when doing  direct implementation of a
         federal program required by law in the absence of an acceptable state or tribal program?

         This  refers to the  direct implementation by the Federal Government of a program
         required by law in the absence of an acceptable State or tribal program. Typically, EPA
         directly implements a federal  program through the use of contracts. Therefore, funds
         for such contracts will need to be reprogrammed between budget object classes
         (BOCs) from grants (BOC 41) into contracts (BOC 37) and/or expenses  (BOC 36).
         Since the contracts & expenses  are associated with program grants,  using  the
         programmatic sub-object classes in each series will ensure that these costs will not be
         reflected as administrative costs. Since there are no PC&B or travel funds appropriated
         in the STAG account, any direct implementation payroll or travel needs in the Regions
         must be funded  from within existing resources  in the EPM account.  For more
         information search on direct implementation in the main chapters of the Administrative
         Control of Appropriated Funds (funds control manual).

  C2.    How do I budget or reprogram for "in-kind" grants to states and tribes and what are the
         general rules I need to follow?

         According to the EPA Grants Administration Division which administers and processes
         the "in-kind" grants feature,  funding remains in the grants BOC (41) and are not
         reprogrammed. Under this approach, if it would be more efficient, in terms of cost or
         time  savings,  for EPA to  purchase allowable  equipment or services instead  of a
         grantee, EPA  may acquire the equipment or services with funds from the grantee's
         allotment. The equipment or services may then be provided to the grantee under the
         assistance agreement along with the remainder of the grantee's allotment. A purchase
         request is attached to the grant award and "in-kind" box is checked on  the award
         package. However, in addition to the requirement  that there be a savings in  cost or
         time, the equipment or services provided under the in-kind grant feature must benefit
         the grantee. ..not EPA. For more information, contact the Grants operations Branch at
         (202) 564-5376

  C3.    Do I have to recertify funds with the Office of Budget  (OB) when moving funds between
         grant budget periods?
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        For assistance agreements such as grants  (including STAG State  grants) and
        cooperative agreements, recertification is not required by the OB when funds from one
        budget period are made available in a subsequent budget period through the execution
        of a continuation award [deobligation and immediate reobligation transactions can be
        processed in IFMS to accommodate the minor changes in obligating  document
        numbers, if necessary].   Depending upon the type of agreement,  this  is usually
        permissible as long as the scope of work remains unchanged and the appropriation has
        not expired.

D.  TRAVEL:

  D1.    Who can we invite to EPA sponsored events and have EPA pay for their travel under
        invitational travel orders?

        The rules for invitational travel orders state that eligibility is met when a non federal
        individual is requested to meet with federal officials to confer on a matter of official
        business because of his/her knowledge, capability, or experience and is otherwise
        providing a direct service to the agency. This direct service provision must be met in
        order to pay travel expenses for an invitational traveler. Invitational travel orders may
        not be used for individuals merely attending a meeting without providing a direct service
        to EPA.  Some examples of acceptable invitational travel include:

               1. witnesses without pay
              2. consultants/experts
              3. attendants of disabled employees when traveling
              4. federal advisory committee members
              5. speakers at EPA conferences

        In addition to the "invitational travel" statute, other laws may authorize  EPA to pay for non
        federal tra vel. For example, EPA may pay for tra vel expenses of guests of Agency employees
        at awards ceremonies as a "necessary expense" under the Government Employees Incentive
        Award Act, 5 USC 4501-4507. The guests must by related to the employee by blood or affinity
        whose close association is equivalent to a family relationship.  Further, Section 206 of the
        Federal Employee Pay Comparability Act, 5 USC 5706b, provides specific statutory authority
        for certain pre-employment travel  expenses relating to interviews.  Travel authorized under
        these statutes is not an entitlement but can be paid for at the discretion of the Agency.  For
        additional information, see 25506,  Chapters of the Resources Management Directive System
        (RMDS)  which   can  be   accessed   online  at   the   following   URL  address:
        http://intranet. epa.gov/ocfo/policies/policies. htm

  D2.    Must travel funding be used for  procurements for lodging and subsistence?

        Unless it is for training, yes  For meetings and conference subsistence, charging to
        tra vel sub-object class 21.35 is necessary to ensure that these charges properly accrue
        to the Agency's travel ceiling.  For more information search on the sub-object class
        listings on-line at:  (http://intranet.epa.gov/budgpage/policy/rmds2590.pdf).

  D3.    What appropriations have exemptions from travel ceilings for site-specific travel?


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        Historically, exemptions  from travel ceilings  for site-specific travel exist  in the
        Hazardous Substance-Superfund, Hazardous Substance Research (S&T), and Office of
        Inspector  General appropriations.    These  exemptions have  either  been  by
        Congressional statute or by Agency policy  developed in  consultation  with the
        Congressional Appropriations Committees. Other appropriations which may have sites,
        such as LUST and Oil Spills, have not attained this exemption. Therefore, any site
        travel in the LUST and Oil Spills appropriation must be charged to the travel ceiling.
        Tra vel ceilings are imposed by Congress to prevent government travel abuse and apply
        to all accounts with funds in the travel object class. They are based on travel budget
        estimates included in EPA's President's Budget Request and are subject to change by
        the Congress.  When enacted, the Appropriations Act includes a General Provision
        (Section 401), which states that expenditures for travel expenses may not exceed the
        amounts set forth in the budget estimates (i.e. President's Budget Request) submitted
        for the appropriation...in other words...a ceiling limitation.

  D4.    Can I obligate funds in September for travel or training that will not occur until the new
        fiscal year?

        If the funds are not expiring,  the end-of-year process should not interrupt the normal
        commitment, obligation, and disbursement steps for funding these items. If the funds
        are expiring,  an obligation  for something that will occur beyond the  life  of the
        appropriation  is subject to the  bona  fide needs rule.   Briefly stated,   fiscal year
        appropriations may be obligated only to meet a legitimate, or bona fide, need arising in,
        or in some cases arising prior to but continuing to exist in, the time period for which the
        appropriation  was made.  As an  example, for travel or training, if the lead time or
        scheduling requires you to obligate before the end of the fiscal year, then the bona fide
        needs rule will have been met. For more information search on the bona fide needs
        rule in the main chapters of the Administrative Control of Appropriated Funds (funds
        control manual).

E.  GENERAL:

  E1.    What are the rules on when an office can/can't use agency appropriated funds for paying
        for meals and refreshments at agency-sponsored  meetings,  conferences, training
        workshops, and award ceremonies?

        The Ofice of General Counsel (OGC) maintains a list of Frequently Asked Questions
        (FAQs) pertaining to the use of appropriated funds to pay for meals and refreshments
        at Agency sponsored meetings,  conferences, training workshops,  and  award
        ceremonies: See http://intranet.epa.qov/oqc/memos.htm

  E2.    Which  Working  Capital Fund  (WCF)  services  are administrative  and which are
        programmatic?

        In the main chapters of the Administrative Control of Appropriated Funds (funds control
        manual), there is a special subject item (Chapter 4(1)(3) which provides many examples
        of "Administrative" vs  "Programmatic" costs  by object class series.   Some ADP
        equipment examples include:

          ADMINISTRATIVE
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        Purchase of General Purpose ADP Software Packages
        Individual Desk-top Equipment (such as Calculators), Personal Computers or Other
         Word Processor Equipment for General Staff Use (Such as Local Area Network
        (LAN) Equipment)

        PROGRAMMATIC
        Programmatic ADP Software Packages (such  as: Toxic chemical composition
        analysis programs -  LHASA,   SYNGEN, CAMEO; chemical property estimation
        programs - CLOGP & PC GEMS;   SAS &  SAS-Graph  software when used for
        generating research lab. data, etc.)
        Programmatic ADP Software Disk Update
        ADP Equipment for Programmatic Databases such as: Storet, Haz. Wst.DMS, New Air
        Data Sys. Docket Sys.,  Pest Product Info. Sys., CERCLIS, etc.

E3.   What types of items can we provide to the public at EPA sponsored events?

      In a  1992 Comptroller  General  Decision (B-247686),  GAO opined that EPA's
      expenditure for buttons and magnets inscribed with environmental messages was a
      proper use  of appropriated funds since the items are intended to convey a message
      related to EPA's mission.  They cited EPA authorization under the Environmental
      Education Act as the basis for this decision. Since that time, similar such items have
      been disseminated at Earth Day festivities and other opportune instances of public
      awareness  and education using the same authority.  In the absence of specific
      authority, however, an agency may not purchase items for distribution as gifts or
      souvenirs to the public. GA O had previously opined that expenditures for key chains,
      ice scrappers, and miniature novelty garbage cans containing candy,  as having a real
      use other than to convey a message were not a proper use of appropriated funds.
      Items without specific authority would be subject to the "necessary expense rule" which
      allows the Agency "reasonable discretion in determining how to carry out the objects of
      the appropriation."  Additional information can also be  found by searching on the
      Necessary Expense Rule excerpts in the main chapters of the Administrative Control of
      Appropriated Funds (this  Manual).

E4.   What will happen to open commitments funded with 2 year appropriated funds
      at the end of the first year (i.e., EPM and S&T)?

      The commitment reversal process will not affect commitments funded with two-year
      appropriated funds. Those commitments will remain open in IF MS until obligated or the
      appropriation expires which ever comes first.

E5.   How do I find the correct sub-object class code for obligating a particular item?

      Use the sub-object class listings on-line in intranet and search the package for your
      specific item (e.g. "lodging"). If the search feature does not find the specific item when it
      searches both the OMB general headings and the EPA definitions, you will need to look
      for a more general category that includes similar type items.  Search the sub-object
      class listings on-line at: (http://intranet.epa.gov/budgpage/policy/rmds2590.pdf).

E6.   What is the proper sub-object class code for IPAs?


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      Other than for Commissioned Officers (for which there are 5 sub-object class listing),
      the correct code and definition reads as follows:

        11.83 Intergovernmental Personnel Act (IPA) Salaries - Non-Ceiling. Salary paid
        to an EPA employee on an Intergovernmental Personnel Act assignment where EPA
        pays less than 50% of the employee's salary.

        If the EPA pays 50% or more of the employee's salary, it is charged to the Agency's
        regular PC&B sub-object classes.

E7.   Where do I look in IFMS to verify that my deobligations has been processed?

      You should pull up the IFMS table called GLDB and look under general ledger (GL)
      account 4801 or 4802.

E8.    Is there a place in IFMS to see year-end carryover balances?

      IFMS tables FALC (ALOC), FSAL (SALC), FALT (ALLT) show budgets, spending and
      available amounts by fiscal year.

E9.   What is the change policy and process someone must go through in order to make a
      change to a Program Results  Code (PRC) such as adding or changing the PRC
      Activity Codes?

      Program Results Codes (PRCs) were established to account for and relate resources to the
      Agency's Strategic Plan goals and objectives, national program offices and responsibilities,
      and governmental functions. PRCs are created when the annual EPA Budget is submitted
      to Congress each February and then formally established in IFMS with the enactment of
      EPA's appropriation act. PRCs may be updated at any time.

      To ensure that all PRCs are justified and properly relate to the Agency's Strategic Plan,
      national program and responsibilities, and business functions, the following policy and
      procedures were established. These policy and procedures were established to ensure all
      Agency organizations involved in a PRC change request are consulted and all Agency
      documentation and systems are revised to account for the PRC change. Therefore, all
      requests to change PRC Codes will be reviewed for prog ram budget relevance (by the
      affected NPMs) and for Agency accountability (by the OCFO).

      EPA Policy
      A                        (PRC)    be           ONLY after it
      1.  recommended by the appropriate NPM;

      2.  approved by the Office of Budget;

      3.  included in the Program/Project Description Book; and

      4.  included in the IFMS PMGT Table.

      This policy includes requests to add Agency Activities to existing PRCs.


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      EPA Procedures
      To                   the
      Requests for PRO changes must be submitted by an RPIO to the affected NPM. The PRO
      change request should include:
             a.  what PRO change is requested;
             b.  why the change is requested;
             c.  circumstances surrounding this change (e.g., pending obligation);
             d.  narrative changes needed to the Program/Project Description Book.
      2.  NPMs will review the PRO change request and submit approved requests to the Office
          of Budget (Policy Team).
      3.  Office of Budget (Policy Team) will coordinate review of the PRO change request within
          the Office of Budget (e.g., media analysts).
      4.  Office of Budget (Policy Team) will notify affected NPMs of the decision or status of their
          PRO Change Requests as soon as possible
      See also: http://intranet.epa.qov/ocfo/policies/prc/fv04 chanqerequests.htm
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