ADMINISTRATIVE
CONTROL
of APPROPRIATED
FUNDS
RELEASE 2.0
December 1, 2004
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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
TABLE of CONTENTS 12/01/04
TABLE OF CONTENTS
PAGE
CHANGE CONTROL LOG vi
INTRODUCTION Intro - 1
CHAPTER 1: THE FEDERAL BUDGET PROCESS, LAWS, & GUIDANCE
I. OVERVIEW OF THE FEDERAL BUDGET PROCESS AT EPA 1-1
A. Budget Planning and Formulation of NPM Budgets 1- 2
B. OMB Submission 1-2
1. OMB Review and Passback 1- 2
C. President's Budget 1-3
D. Congress
1. House and Senate Review and Mark-Up 1- 3
2. Conference Action 1-3
3. Enacted Appropriation 1-3
a. Continuing Resolution/Agency Shutdown 1-4
b. Supplemental Appropriations 1-4
E. OMB Apportionments 1-4
F. 1. EPA Allotments 1-5
2. Advices of Allowance (AOA) 1-5
II. FEDERAL LAWS AND GUIDANCE 1- 6
A. Principles of Federal Appropriations Laws 1- 6
1. Appropriations as to "Purpose" 1 - 6
2. Appropriations as to "Time" 1- 8
a. The Unexpired Phase 1-8
b. The Expired Phase 1-8
c. The Cancelled Phase 1-8
3. Appropriations as to "Amount" 1- 9
B. Budget and Accounting Procedures Act (1921) / Supplemental Appropriations Act 1-10
C. Economy Act (1958) 1-10
D. Congressional Budget Impoundment and Control Act (1974) 1-10
E. Federal Manager's Financial Integrity Act (FMFIA) (1982) 1-10
F. Chief Financial Officers Act (CFO) (1990) 1-11
G. "M" Acct Legislation 1-11
H. Government Performance and Results Act (GPRA) (1993) 1-11
I. OMB Circular A-11 (Part 4 yinstructions on Budget Execution 1-12
J. OMB Circular A-11 (Part 2)/Preparation & Submission of Budget Estimates 1-12
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RESOURCES MANAGEMENT DIRECTIVES
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
TABLE of CONTENTS
III. EPA LEGISLATION
A. Authorizing Legislation
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Clean Air Act (CAA) 1970
Federal Water Pollution Control Act (FWPCA) of 1948
Clean Water Act (CWA) 1972
Water Quality Act of 1 987 (WQA)
Beaches Environmental Assessment & Coastal Health Act of 2000
Safe Drinking Water Act (SDWA) 1974
Solid Waste Disposal Act
Resource Conservation and Recovery Act (RCRA) 1976
Hazardous and Solid Waste Amendments (HSWA) of 1984
Comprehensive Environmental Response, Compensation,
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
Pollution Prevention Act (PPA) of 1990
National Environmental Policy Act (NEPA) (1969)
Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) 1972
Food Quality Protection Act (FQPA) of 1996
Toxic Substances Control Act (TSCA) of 1976
Radon Abatement Act (RAA) of 1 988
Oil Pollution Act (OPA) of 1993
Inspector General Act of 1 978
Marine Protection, Research, and Sanctuaries Act (MPRSA)
B. Appropriations Acts
1.
2.
3.
Annual Appropriations
Multi-Year Appropriations
a. Environmental Program & Management (EPM)
b. Science & Technology (S&T)
c. Office of Inspector General (OIG)
No-Year Appropriations
a. Hazardous Substance Response Trust Fund (Superfund)
b. Leaking Underground Storage Tanks Trust Fund (LUST)
c. Buildings and Facilities (B&F)
d. Oil Spill Liability Trust Fund
e. State and Tribal Assistance Grants (STAG)
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1-14
1-14
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1-14
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1-19
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1-20
CHAPTER 2: ROLES AND RESPONSIBILITIES FOR FUNDS CONTROL
I. PARTICIPANTS 2-1
A. Assistant Administrators (AAs) 2-1
National Program Managers (NPMs) 2-1
Responsible Planning and Implementation Officers (RPIOs) 2-1
B. Regional Administrators (RAs) 2-1
C. Senior Resource Officials (SROs) & Assistant Regional Administrators (ARAs) 2-2
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TABLE of CONTENTS 12/01/04
D. Senior Budget Officers (SBOs) 2-3
E. Regional Budget Officers 2-3
F. Allowance Holders (AHs) 2-4
G. Funds Control Officers (FCOs) 2-5
H. Approving Official 2-6
I. Originator 2-6
J. Obligating Officials 2-6
K. Chief Financial Officer (OCFO) 2-7
1. Office of Planning, Analysis, and Accountability (OPAA) 2-7
2. Office of Budget (OB) 2-7
3. Office of Financial Management (OFM) 2-8
4. Office of Financial Services (OFS) 2-8
5. Office of Enterprise Technology and Innovation (OETI) 2-8
L. Financial Management Officers (FMOs) 2-8
M. Accounts Payable Certifying Officers & Disbursing Officers 2-8
N. Office of General Counsel (OGC) 2-9
CHAPTER 3: BUDGET EXECUTION PROCESS
I. ACCOUNT CODE STRUCTURE AT EPA 3-1
A. 6-Field IFMS Account Code 3-1
1. Budget Fiscal Year Field (BFY) 3-1
2. Fund (Appropriation) Field (APPR) 3-1
3. Organization Field (ORG) 3-2
IFMS Account Code Expansion/Utilization 3-4
4. Program Field - Program Results Code Field (PRC) 3-5
5. Site/Project Field 3-6
6. Cost Organization Field 3-7
B. Appropriation Number (Treasury Account Symbol) 3-7
C. Object Classes 3-8
1. OMB Object Classification Codes 3-8
2. EPA Object Classification Codes 3-8
3. EPA Sub-Object Classification Codes 3-8
II. OPERATING PLAN CONTROL AND MANAGEMENT 3-10
A. Advice of Allowances 3-10
1. Nature of Allowances 3-10
2. Advice of Allowance Issuance 3-10
3. Adhering to Advices of Allowance 3-11
B. Reprogramming 3-11
1. Purpose and Definition 3-11
2. General Reprogramming Restrictions 3-12
3. Reprogramming Limitations (Ceilings and Floors) 3-13
a. Ceilings 3-13
b. Floors 3-14
4. Reprogramming Process 3-15
C. Carryover of Unobligated Balances 3-15
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ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
TABLE of CONTENTS
D.
Reimbursable Allowances
III. COMMITTING AND OBLIGATING APPROPRIATED FUNDS
A.
B.
C.
D.
E.
F.
G.
H.
1.
J.
K.
L.
Reviewing and Approving Funding Documents
Recording Commitments
1 . Funds Availability Check
2. Entering Documents into IFMS
3. Unfunded Procurement Requests for Planning Purposes
Monitoring Funds After Commitment
1. IFMS Tables
2. Financial Data Warehouse (FDW) Reports
3. Orbit Reports
Recording Obligations
Authorizing Payments
Reconciliation
Resolving Issues with Commitments and Obligations
Prevalidation of Funds
Overruns/Recoveries
Ratification of Unauthorized Procurements
Recertification of Funds
1 . When Funds Do Not Have to be Recertified
2. When Funds Do Have to be Recertified
Centrally Managed Allowances
IV. MANAGEMENT REPORTING AND END-OF-YEAR CLOSEOUT
A.
B.
Unliquidated Obligations
End ofYearClose-Out
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CHAPTER 4: SPECIAL SUBJECT ITEMS
I. SPECIAL SUBJECT ITEMS 4-1
A. Violations: Creation, Reporting, & Penalties 4-1
1. Antideficiency Act (ADA) Violations 4-2
2. EPA Administrative Control of Funds Violations 4-2
B. U.S. Government Purchase Card Program 4-3
C. Ordering GSA Office Supplies 4-6
D. Payroll Management and Tracking/PeoplePlus 4-7
E. Operating Under a Continuing Resolution 4-8
F. Split Funding with Multiple Appropriations 4-8
G. Layoffs Between Appropriations 4-10
H. Working Capital Funds Services 4-10
I. "Administrative" vs "Programmatic" 4-12
1. Philosophy 4-12
2. Special-Use Facilities 4-16
3. Examples of Administrative and Programmatic Costs 4-18
J. Direct Implementation of State Grants 4-22
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K. Fees and Fee Programs
L. Additional Grants information
4-23
4-24
EXHIBITS:
2520-2-1
2520-2-2
2520-2-3
2520-3-1
2520-3-2
2520-3-3
2520-3-4
APPENDICES:
2520-A
2520-B
2520-C
2520-D
Funds Control Relationships in EPA
FCO Designation Letter and FCO Designation Form
Servicing Finance Offices (SFO)
EPA Appropriation Fund Codes / Treasury Symbols
Object Class Relationships
IFMS Budget Hierarchy
How to Write a GOOD Reprogramming Justification
Budget Terms and Definitions
Checklist of Good Fund Control Practices
Suggested FCO Job Qualifications & Training
Frequently Asked Questions (FAQs)
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CHANGE CONTROL LOG 12/01/04
CHANGE CONTROL LOG
CHAPTER/
INDEX OF MAJOR REVISIONS / NEW MATERIAL SECTION/PAGE(S)
EPA Allotments 1.I.F.1 1-4
Office of Legal Counsel (OLC), U.S. Department of Justice (DOJ) opinion 1.II.A.1 1-5
Appropriations as to Time - Statutory and regulatory changes - severable services 1 .II.A.2 1-7
Appropriations as to Time - Two-year appropriations now cancelled 7 years after expiration 1 .II.A.2 1-7
Appropriations as to Time - Bona fide need rule and No-Yr funds 1.II.A.2 1-8
Authorizing Legislation - Beaches Environmental Assessment & Coastal Health Act of 2000 1.III.A.2 1-12
Authorizing Legislation - Small Business Liability Relief and Brownfields Revitalization Act 1.III.A.5 1-13
Authorizing Legislation - Inspector General Act 1.III.A.13 1-16
Authorizing Legislation - Marine Protection, Research, and Sanctuaries Act (MPRSA) 1.III.A.14 1-16
Roles and Responsibilities - Participants - RPIOs, AHs and FCOs proper utilization of funds 2.I.A 2-1
Roles and Responsibilities - Participants - OCFO reorganization 2.I.K 2-7
Office of Legal Counsel (OLC), U.S. Department of Justice (DOJ) opinion 2.I.N 2-9
Program Field - FY 2004 New Strategic Architecture 3.I.A.4 3-4
EPA Object Classes - Beginning with FY 2004 only seven Budget Object Classes (BOCs) 3.I.C.3 3-7
Reprogramming Limitations (Ceilings and Floors) - Workyear ceilings issued internally 3.II.B.3.a 3-11
Reprogramming Limitations (Ceilings and Floors) - Superfund (SF) Functional Ceilings 3.II.B.3.a 3-12
Reimbursable Allowances - Cooperation Authority for lAGs 3.II.D 3-14
Monitoring Funds After Commitment - Financial Data Warehouse (FDW) Reports 3.III.C.2 3-20
Monitoring Funds After Commitment - Orbit Reports 3.III.C.3 3-21
Centrally Managed Allowances (CMA) 3.III.L 3-30
U.S. Government Purchase Cards 4.I.B 4-3
Payroll Management and Tracking/PeoplePlus 4.I.D 4-6
Direct Implementation of State Grants 4.I.J 4-21
Fees and fee programs 4.I.K 4-21
Additional Grants Information - Specific Statutory Authority 4.I.L 4-22
Additional Grants Information - Acquisition vs Assistance 4.I.L 4-22
Additional Grants Information - Selecting between a grant or cooperative agreement 4.I.L 4-22
Additional Grants Information - Policy for competition in assistance agreements 4.I.L 4-22
VI
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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
INTRODUCTION 12/01/04
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 Accounting 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 and their Funds Control Officers, it is a useful reference for all members of the resource community.
Ultimately, 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 time, purpose, and amount. These three
characteristics are regulated through restrictions such as the Bona Fide Needs Statute (time), the Necessary
Expense Rule (purpose) and the Antideficiency Act (ADA) (amount). The Antideficiency Act also governs timing -
prohibiting obligations in advance of appropriations.
The complex nature of EPA's mission 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 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 Office of Management and Budget (OMB). OMB
approval is intended to ensure that the objectives of financial plans are met.
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 draft 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
Regulation 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. 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
D. provides procedures for dealing with violations of the Antideficiency Act as well as violations of limitations
imposed by the Agency, including reporting requirements.
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.
[NOTE: 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
INTRO-1
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ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
CHAPTER 1
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CHAPTER 1: THE FEDERAL BUDGET PROCESS. LAWS. & GUIDANCE
OVERVIEW OF FEDERAL BUDGET PROCESS AT EPA
General knowledge of the federal budget development 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 formulation processes.
FIGURE 1
CONGRESS:
D1. HOUSE & SENATE
MARK-UP
t
D 2. CONFERENCE
ACTION
D 3. ENACTED
APPROPRIATION
I
PRESIDENT/
OMB
t
C 2. PRESIDENT'S BUDGET
t
C 1. OMB REVIEW/PASSBACK
t
I
E. OMB APPORTIONMENTS
I
AGENCIES
(EPA)
t
B. OMB SUBMISSION
t
I
F 1. EPA ALLOTMENTS
I
F 2. ADVICES OF ALLOWANCE
I
NPM
AA'S/RA'S
t
A. NPM BUDGETS
I
G. BUDGET EXECUTION
(ALLOWANCE HOLDERS)
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CHAPTER 1 12/01/04
These activities correspond to the steps shown in FIGURE 1.
A. BUDGET PLANNING AND FORMULATION OF NATIONAL PROGRAM MANAGER (NPM) BUDGETS:
(March -June)
The budget formulation process at EPA has evolved a great deal over recent years. 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 to be considered 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 investments
and disinvestment proposals that will move the Agency closer to achieving its environmental goals contained
in the Agency'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 outyear 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 Assistant Administrator (AA), plus the Inspector General and General Counsel, serve as National
Program Managers (NPMs). They work with the senior managers in their program offices and with the Regions
to develop a budget request which reflects implementation of the Agency's Strategic Plan and follows the
guidance issued by the Administrator.
Assistant Administrators submit their requests to the Administrator. OB and OPAA review and analyze the
requests and work together to make recommendations to the Agency's senior managers. The
recommendations take the form of a budget straw proposal and include edited budget decisions. The Agency's
senior managers then meet at a Budget Forum 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: (July - August)
Assistant Administrators, based on the Administrator's final decisions, prepare their portion of the Agency's
budget request and submit them to OB 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
on usually on the first Monday after Labor Day (13 months in advance of the fiscal year). After an initial period
of review, OMB holds hearings with selected Assistant Administrators to justify the requested resource levels.
OMB also works with the Agency to get additional information.
1. OMB REVIEW and PASSBACK: (September - November)
After an internal OMB review process of the Agency's budget submission, that also includes a "Director's
Review", OMB informs the Agency about decisions on the budget request, which is known as the "OMB
Passback".
After receiving this "passback", the Agency generally has 72 hours to prepare and return an appeal to OMB.
If there is an appeal, a second passback process occurs. This stage is complete after 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.
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C. PRESIDENT'S BUDGET: (December - January)
The budget request is then produced in a specific format for Congressional submission known as the
Congressional Justification. 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 National
Program Manager submits their portion of the justification in final form to the Office of Budget (OB), which
prepares supplemental schedules, exhibits, and 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 then printed and awaits distribution as the detailed justification to EPA's portion of the
President's Budget 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, the Council of Economic Advisers, and the Departments of Commerce and Labor.
During President's Budget preparation, all information, correspondence, and data is strictly confidential. Budget
information remains confidential until the President's Budget is officially released to the public. EPA's
appropriations for its budget is included in the annual V.A., H.U.D., and Independent Agencies appropriations
act.
The Office of Management and Budget (OMB), which is charged with broad oversight, supervision, and
responsibility for coordinating and formulating a consolidated budget submission, produces a document in the
form of the President's Budget Appendix. On a specified date (usually, the 1st Monday in February), the
President submits this to Congress as the Administration's budget request for the fiscal year to start the
following October 1. Most agencies schedule a press conference on the day of the President's Budget
submission and release their portion of the request to the general public.
D. CONGRESS (February - September)
1. 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 Subcommittees even though authorizing committees also hold hearings. EPA officials testify
on the requested levels and respond to questions received from Congressional Committees. Both the
House and Senate Reports are then produced detailing each house's mark-ups to the proposed Budget
Request. This information is distributed to the Assistant Administrators and Regional Administrators who
follow the steps of the legislative process and make the changes (add-ons, reductions, etc.) to their
programs.
Through the appropriations process, Congress may also impose additional restrictions on how EPA uses
its funds, including travel ceilings, expense and/or function ceilings, (e.g. Superfund Management Cap) and
reprogramming limitations. These will be discussed in more detail in subsequent sections of this directive.
2. CONFERENCE ACTION: (September)
There are usually variations in the Senate and House versions of a particular appropriations act 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 report. If the
Appropriations Act is rejected in either the full House or Senate, the process must reconvene at the
conference committee level.
3. ENACTED APPROPRIATION: (October)
Following either the Senate's passage of the House version of an appropriation measure, or the approval
of a conference report by both bodies, the enrolled bill is then sent to the President for signature or veto.
The Congressional Budget Act envisions completion of the government-wide process by October 1.
Currently, there are 13 regular appropriations acts enacted annually. EPA's appropriations are included in
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the VA, HUD & Independent Agencies Appropriations Act. [NOTE: Appropriation restrictions applicable to
all agencies are often included in the Treasury Appropriations Act.]
Once EPA receives its enacted Appropriations, all the Congressional changes must be reflected in the
Agency's Operating Plans. 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 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 to OMB and Congress for final approval.
a. CONTINUING RESOLUTIONS / AGENCY SHUTDOWN:
If an Agency's Appropriations Act is not approved by the start of the new fiscal year on October 1, the
Congress will usually pass one or more Continuing Resolutions (CR) which allow Agencies to continue
operations for specific periods of time. Given the additional time, Congress ultimately passes the
Agency's 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 Acts or a Continuing Resolution the Agency faces a shutdown situation
at the start of the new fiscal year.
b. SUPPLEMENTAL APPROPRIATIONS:
During the fiscal year, the President may submit to Congress proposed deficiency and supplemental
appropriations that he/she decides are necessary because of laws enacted after the submission of the
budget or that are in the public interest. Deficiency and supplemental appropriations that the Agencies
want to propose themselves are submitted to the President through OMB.
E. OMB APPORTIONMENTS: (October)
Following Congressional enactment of appropriations legislation (including continuing resolutions and
deficiency or supplemental appropriations), the Office of Budget Director at EPA, requests funding
apportionments from OMB. [NOTE: Apportionment requests for carryover balances, recovery authority, and
reimbursable authority do not require legislation.] In accordance with OMB Circular A-11 (Part 4) (formerly OMB
Circular A-34) instructions for the Apportionment and Reapportionment of funds, OMB Standard Form, SF-132
(or an acceptable equivalent such as the letter apportionment format used by EPA) is used to make these
requests. The documents) comes back signed by OMB to signify their approval. 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, 31 U.S.C. 1513, requires that all appropriations be administratively
apportioned by the Director of the Office of Management and Budget (OMB) so as 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.
[NOTE: 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, EPA has been fortunate in having all of its funding provided in the
first quarter by OMB. This has been transmitted using a revised letter format which apportions all Agency
funding. Beginning in FY 2002, both the standard SF-132 Apportionment form and EPA's one-page letter
format are being entered and transmitted to OMB electronically.
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Apportionment authority is normally based upon obligations 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 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 for no-year
appropriations and multiple-year appropriations, 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 annually, as required by law.
[NOTE: See OMB Circular A-11 (Part 4)(formerly OMB Circular A-34) 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, 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 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 to EPA Allowance Holders. For more information on Advices of Allowance, see
Chapters, part II.
F.2. ADVICES OF ALLOWANCE: (November)
Advices of Allowance (AOA) are made available to the respective Allowance Holders through the Integrated
Financial Management System (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 in support of the Congressional
Action. The final step shown in FIGURE-1: Budget Execution (October-September) will be covered at length
in Chapters.
[NOTE: 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 has not yet been approved, 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 staff.]
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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 devotes entire chapters to 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 but in consequence of
appropriations made by law. Whether appropriated funds are legally available for something depends upon
the following three tests:
DThe purpose of the obligation or expenditure must be authorized;
DThe obligation must occur within the time limits applicable to the appropriation; and
DThe 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 thereby 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 also considered to be part of legislative
history.
Failure of the Agency to adhere to Congressional intent is taken very seriously by the Congressional
Appropriations Committees and can have adverse 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, Appropriation Committee Reports, 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.
[NOTE: As 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 is
otherwise authorized by law. A purpose violation is not necessarily an Antideficiency Act violation. The
ADA is violated if a purpose violation cannot be corrected because sufficient unobligated funds do not exist
in the correct appropriation account. Further, both the Comptroller General and the Office of Legal Counsel,
DOJ have opined that an expenditure or obligation of appropriated funds for a purpose precluded by an
express prohibition in an appropriation act 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.]
[NOTE: 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 Comptroller General (CG) to relieve certifying officers from
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liability, and 31 U.S.C. § 3529, which purports to authorize the CG 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 Counsel (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 CG decisions are "useful sources" in resolving appropriation law issues and
EPA will follow CG opinions unless the Office of General Counsel advises otherwise. See Memorandum
for Emily C. Hewitt, General Counsel, General Services Administration from Richard L. Shiffrin, Deputy
Assistant Attorney General, Office of Legal Counsel (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 or the
legislative history of the appropriations act clearly demonstrate 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 Congressional Budget Justification. 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:
DThe 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.
DThe expenditure must not be prohibited by law.
DThe 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.
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" and
"Abatement and Control." The contract in question, entered into in 1975, could arguably have been charged
to either appropriation, but EPA had elected to charge it to Research and Development. Applying the above
rule, the Comptroller General concluded that a 1979 modification to the contract had to be charged to
Research and Development funds, and that the Abatement and Control appropriation could not be used.
[NOTE: 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
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insufficient funds or other reasons, change its election 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. An appropriation has phases roughly similar to the various stages in the
existence of "a human" - conception, birth, death, and even an afterlife. The life-cycle of appropriations with
fixed periods of availability consists of three 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.
NOTE: Statutory and regulatory changes (Federal Acquisition Streamlining Act of 1994 (FASA) 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 has opined that these
provisions also apply to acquisitions funded with multi-year appropriations (such as the "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.]
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, this phase lasts for five years after the period for which the
appropriation is available for new obligations. All audit requirements, limitations on obligations, and
reporting requirements applicable to an appropriation in the unexpired phase continue to apply to it in
the expired phase. NOTE: 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 FY 1999 (i.e. FY1999/2000 funding). Two-
year appropriations enacted prior to FY 1999 continue to be cancelled 5 years after expiration.
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
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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 "bona fide 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 bona fide 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 priorto 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 1MB of this Chapter).
One-Year appropriations are available only to meet a bona fide need of the fiscal year for which they were
appropriated. [NOTE: As of FY 2004, EPA has no one-year appropriations.]
Apart from the extended period of availability, multi-year appropriations are subject to the same bona fide
need rule applicable to annual appropriations.
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, and;
(c) continuing after the year the no-year funds were appropriated. Prior year(s) obligations cannot be paid
with future year no-year appropriations for such a payment would violate the Anti-Deficiency Act prohibition
against obligations or expenditures in advance of an appropriation unless authorized by law.
[NOTE: based on advice from OLC, EPA's Office of General Counsel 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 "Antideficiency Act" 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 prohibits:
D obligation or expenditure in excess of appropriations;
D obligation or expenditure in advance of appropriations unless authorized by law;
D accepting voluntary services for the United States exceeding that authorized by law; and
D obligations or expenditure in excess of apportionments or administrative divisions of apportionments.
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The Antideficiency Act 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(1921)/ SUPPLEMENTAL APPROPRIATIONS ACT OF 1955
The Budget and Accounting Act of 1921 and Supplemental Appropriations 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.
C. ECONOMY ACT (1932)
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 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 a chemical emergency. lAGs also work in the opposite direction whereby EPA may
give contract with another agency (i.e., EPA contracting with the Department of Health and Human Services
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 & 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 rescission proposals. 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 an act is passed to
approve the deferral and the act is presented to the President. A rescission involves the cancellation of budget
authority previously provided by Congress (before that authority would otherwise expire) and can be
accomplished only through legislation.
If a federal agency fails to obligate appropriated funds, the Comptroller General 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 is a very brief law, but one with substantial impact on agency
programs, functions, and operations. The Integrity Act was designed to:
D protect government resources from fraud, waste, abuse or mismanagement;
D require systematic self-examination of management controls by program managers; and
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D 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.
The Act requires the establishment of systems of internal accounting and administrative controls, according
to standards prescribed by the Comptroller General, which provide reasonable assurance that:
D obligations and costs are in compliance with applicable law;
D funds, property, and other assets are safeguarded against waste, loss, unauthorized use or
misappropriation; and
D agency revenues and expenditures are properly recorded and accounted for to 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 whether the agency's accounting system
conforms to the principles, standards and related requirements prescribed by the Comptroller General
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 Act of 1990 requires 23 Departments and agencies to prepare and audit financial
statements for Trust Funds, Revolving Funds, and commercial activities accounts.
Chief Financial Officers are designated by each federal department or agency and have the initial and
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 Assistant
Administrator, Office of Chief Financial Officer is the CFO for the Agency.
G. "M" ACCOUNT LEGISLATION
The National Defense Authorization Act of 1990 amended the controls on the availability of appropriation
accounts and the procedures for closing appropriation accounts. 31 U.S.C. 1551-57. The legislation cancelled
all merged ("M" account) surplus authority (unobligated balances in expired appropriations) as of December
5, 1990. The legislation also requires that, from 1990 on, unobligated balances & unliquidated obligations will
be cancelled five years after an appropriation has expired and that account will be closed out. [ NOTE: 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 FY 1999 (i.e. FY 1999/2000 funding). Two-year appropriations enacted prior to
FY 1999 continue to be cancelled 5 years after expiration.]
After an appropriation account has been closed out, bills received against the 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 current year
appropriations to liquidate liabilities.
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 and to Congress a strategic plan for program activities. The plan shall contain-
Da comprehensive mission statement covering the major functions and operations of the agency;
D general goals and objectives, including outcome-related goals and objectives, for the major functions and
operations of the agency;
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Da 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;
Da 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;
Dan 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
Da description of the program evaluations used in establishing or revising general goals and objectives,
with a schedule for future program evaluations.
The Government Performance and Results Act (GPRA) requires EPA to report each year on our progress
towards achieving our 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 managers will be
able to consider these performance results, together with cost/benefit and risk assessment/risk management
information, to help them evaluate and adjust strategies, program directions, and resource allocations to
achieve EPA's strategic goals.
I. OMB CIRCULAR A-11 (PART4)/ INSTRUCTIONS ON BUDGET EXECUTION
Government-wide guidance and Agency requirements regarding Budget Execution are contained in OMB
Circular A-11 (Part 4) (formerly OMB Circular A-34). Contents include guidance on: requirements and
instructions, concepts, agency accounting and fund control systems, reports on budget execution,
apportionments, rescissions and deferrals, etc.
J. OMB CIRCULAR A-11 (PART 2)1 PREPARATION & SUBMISSION OF BUDGET ESTIMATES
Government-wide guidance and Agency requirements 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 in support of the budget and for the transmittal of the
budget.
In relation to budget formulation, A-11 requires agencies to 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 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 Chapters.
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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:
D Title I includes provisions for setting and achieving ambient air quality standards, and requirements to
control pollution from certain stationary sources;
D Title II deals with control of pollution from mobile sources;
DTitle III addresses general and administrative matters;
D Title IV deals with requirements to control pollution that leads to acid deposition;
D Title V includes requirements for the issuance of operating permits for certain stationary sources; and
D 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 et seq., 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 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 program, to be capitalized by grants
to the States. The Beaches Environmental Assessment & Coastal Health Act of 2000 amends the Clean
Water Act 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
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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. 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.
4. Solid Waste Disposal Act (SWDA)
Resource Conservation and Recovery Act (RCRA) 1976
Hazardous and Solid Waste Amendments (HSWA) of 1984
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.
5. 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 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 Superfund 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.
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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 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 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 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.
6. Pollution Prevention Act (PPA) of 1990
The Pollution Prevention Act (PPA) of 1990 requires the EPA to establish an Office of Pollution Prevention,
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 EPCRA to report annually on source
reduction and recycling activities.
Enactment of the Pollution Prevention Act of 1990 marked a major turning 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 for this 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 nonpoint
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.
7. 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
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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 Clean Water Act, 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.
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 or the 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 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 (RAA) of 1988
In October 1988 Congress amended TSCA by adding Title Ill-Indoor Radon Abatement (15 U.S.C. 2661
et seq., 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.
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12. Oil Pollution Act of 1993
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 managed by the 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.
13. 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 obtaining all necessary information,
developing and executing budgets through independent appropriations, selecting and appointing OIG
employees (including 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.
14. Marine Protection. Research, and Sanctuaries Act (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.
B. APPROPRIATIONS ACTs
Annual Appropriations Acts provide the funding authorized by the program legislation. 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 or the legislative history of the appropriations act
clearly demonstrate Congressional intention to depart from funding levels or limitations in the authorizing
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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 annual, multi-year
and 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 some 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. [NOTE:
As of FY 2004, EPA has no one-year appropriations.]
2. Multi-Year Appropriations are available for obligation for a 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 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)
The EPM 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, Leaking Underground Storage Tank Trust
Fund, Oil Spill Response, and the Office of Inspector General. 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 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&T)
EPA's Science and Technology (S&T) Program is designed to produce the scientific knowledge and tools
necessary to support decisions on preventing, regulating, and abating environmental pollution and to
advance the base of understanding on environmental sciences. The S&T account funds most EPA
research. The Agency's S&T efforts are conducted through 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 work performed at EPA's 12 laboratories
and various field stations and field offices.
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The S&T account funds activities such as developing and improving sampling and analytical methods
and instruments for measuring pollutants; determining the effects of pollutants on many animals, plants,
materials, 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. This account also provides S&T operating expenses for most Agency
research. This includes categories such as personnel salary & benefits, laboratory supplies and
materials, operation and maintenance of lab facilities, equipment, ADP support, human resource
development, and printing. Beginning in FY 1996, this account also funds Hazardous Substance
research formerly appropriated in the Superfund account.
c. Office of Inspector General (IG)
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, internal 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.
Internal 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.
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 budget authority for the OIG account is provided from the
SF Trust Fund as a two-year appropriation. 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. Essentially, 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 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
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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 cost recover from responsible parties state funds expended
for cleanup of abandoned tanks.
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)
EPA receives the Buildings and Facilities appropriation 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.
d. Oil Spill Liability Trust Fund
This appropriation, authorized by the Federal Water Pollution Act and amended by the Oil Pollution Act
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 Oil Spill Liability Trust Fund established by the Oil
Pollution Act and managed by the 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)
The STAG appropriation includes two components: State Revolving Funds (SRF) and Categorical State
and Tribal Assistance Grants.
SRFs comprise the majority of the appropriation with the funds going towards major environmental
capitalization infrastructure projects for cities and towns. There are two types of Water Infrastructure
SRFs (WIF/SRFs): Clean Water SRF (CW/SRF) and Safe Drinking Water (DW/SRF). The SRFs provide
financial assistance for wastewater, drinking water, and other infrastructure projects to include; activities
related to nonpoint sources, estuaries, stormwater, combined sewer overflows, and sanitary sewer
overflows. These environmental infrastructure projects contribute to ecosystem improvements through
reduced loadings of conventional and toxic pollutants in surface waters.
The states loan these funds to municipalities for the infrastructure projects, who then pay back their loan
by making payments back into the SRF account. The money can then be used to make more loans
(hence the term "revolving") to other municipalities.
State and Tribal Assistance Categorical Grants 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 for Brownfields grants under Section 104(k) of CERCLA.
The Omnibus Rescissions and Appropriations Act 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 "categorical" grants (i.e air, water) into one or more grants, to be used for
addressing the unique priorities of each state and tribe. PPGs were created to reduce the burden and
increase the flexibility that state and tribal governments need to manage and implement their
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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.
[NOTE: 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.]
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CHAPTER 2: ROLES AND RESPONSIBILITIES FOR FUNDS CONTROL
There are a number of levels of management and staff involved with funds control at EPA (for an illustration
showing the relationships of these, see Exhibit 2520-2-1). The positions associated with this function range from
National Program Managers to funding document originators. This section will briefly describe the roles and
responsibilities of each of these key players regarding funds control and focus most on the Funds Control Officers
(FCOs).
I. PARTICIPANTS:
A. ASSISTANT ADMINISTRATORS (AAs),
NATIONAL PROGRAM MANAGERS (NPMs), and
RESPONSIBLE PLANNING AND IMPLEMENTATION OFFICERS (RPIOs)
The Responsible Planning and Implementation Officers (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.
[NOTE: In terms of properly utilizing funds for the purpose for which they were appropriated, the RPIOs and
their AHs and FCOs bear sole 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. By default, the RPIOs are
presumed to be the most knowledgeable EPA entity regarding what is permissible in the authorizing legislation
for their own 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 reports and
are kept informed of what is in the Public Law for their programs. The Office of General Counsel (OGC) is
available to assist them in any ambiguous 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. It is the RPIOs responsibility to live with the consequences of their
actions with regard to accountability for the utilization of funds.] National Program Managers (NPMs) are the
twelve headquarters RPIOs (without the RAs). These twelve senior managers, who wear two hats...RPIO and
NPM, also formulate budget requests for EPA programs nation-wide including the regional program
components. NPMs responsibilities include: helping to prepare Agency Operating Guidance, preparing budget
submissions, determining the Headquarters/Regional resource split and the preparation of the narratives which
will be used as justification to OMB and Congress to defend the requested resource levels. For example, the
AA for the Office of Water has national budget formulation responsibilities for the entire EPA Water Program.
B. REGIONAL ADMINISTRATORS (RAs)
Each Regional Administrator is both a Responsible Planning and Implementation Officer (RPIO) and an
Allowance Holder. Regional Administrators are not National Program Managers since they have a primary
responsibility for regional administration and budget execution for all programs only in their states and territories
including programs for Water, Air, Pesticides, etc. RAs communicate and 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 working
with the appropriate NPM in developing priorities, dollar and workyear 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 regions into a "regional view" that can be
effectively factored into Agency decision-making. NPM's 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 Regional Administrator typically depends heavily upon their Assistant Regional
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Administrator (ARA) and an individual in the ARA's office who serves essentially as a chief 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 Regional Administrators, the General Counsel, the Inspector General, and nine Assistant
Administrators (AAs). Additionally, one SES manager is designated by the Deputy Administrator for the Office
of the Administrator. The Chief Financial Officer (CFO) approves all SRO designations upon initial designation,
and annually thereafter. In line with the Chief Financial Officers Act of 1990, SROs must have the knowledge,
skills and abilities in resource management necessary for the position.
SROs are typically Deputy Assistant Administrators and Assistant Regional Administrators. 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, no matter
to what extent SRO functions are delegated. When SROs are temporarily absent, the individual acting for the
SRO must be apprised 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;
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's Representatives (CORs), (project officers (POs), work assignment
managers (WAMs), delivery order project officers (DOPOs), etc); grants management officers; funds control
and financial management officers; and their supervisors:
a. are working within their workload limitations;
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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. The SBO:
1. has the lead role for coordinating the budget formulation process on behalf of their RPIO;
2. usually has the lead role in coordinating the budget execution activities;
3. is responsible for reviewing, approving, processing or forwarding budget reprogrammings and
coordinating with the Office of Budget (OB) as needed;
4. reviews each Allowance Holder's Operating Plan and spending utilization to ensure that funds controls
and program goals are being met;
5. manages the review of Headquarters current year unliquidated obligations to determine their validity and
viability, as required by the CFO.
E. REGIONAL BUDGET OFFICERS
The Regional Budget Officer 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 Budget Officer must
constantly maintain liaison with HQ on all budget matters, especially with regard to furnishing information and
advice on Regional programs and objectives.
During budget formulation, the Regional Budget Officer 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
program 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 workyears are allocated
within the Region so that programs can effectively carry out their requirements; and
6. working closely with other regions which serve as the lead region for various programs.
During budget execution, the Regional Budget Officer serves as the primary funds control custodian. The
Regional Budget Officer ensures that all regional FCOs are familiar with the Agency's budget structure and
have a general knowledge of appropriation law. During the budget execution phase the Budget Officer:
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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 workyears to ensure program objectives are
met, as well as accommodate unplanned requirements; and
6. reviews and approves allowance holder reprogrammings.
F. ALLOWANCE HOLDERS
The Deputy Administrator, Assistant Administrators, Regional Administrators, Inspector General, General
Counsel, many Headquarters Office Directors, and some staff offices, are Allowance Holders. The Office of
Budget (OB) issues allowances to Allowance Holders to support their programs, thereby giving these officials
the day-to-day responsibility for controlling EPA's funds. Allowance Holders (AHs) or their designees are
responsible for:
1. ensuring that funds control practices within their organizations do not violate federal laws, directives or
EPA policies;
2. verifying proper funds certification and funds availability before an obligation is incurred. Funds must be
available for purpose and time as well as amount. The Allowance Holder is responsible for ensuring that
the AH's Funds Control Officers (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 workyear 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 (OFM) and is a
requirement of the General Accounting Office (GAO).
The Allowance Holder must formally designate FCOs and alternates in writing and submit this list to the Office
of Budget (OB) annually. Any change in these designations must also be reported as soon as possible. An
example of this document is included as Exhibit 2520-2-2.
[NOTE: 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.
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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.]
G. 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 Allowance Holder'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.
An FCO's realm 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. 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;
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.;
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 Allowance Holder;
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 unused funds.
In many cases the FCO serves as the organization's expert on 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 Allowance Holders. 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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H. APPROVING OFFICIAL
An approving official's signature appears on each spending document in addition to the document initiator and
the Funds Control Officer. Generally, the approving official is a Division Director and/or Allowance Holder.
Unlike the FCO, whose signature indicates technical correctness, the approving official's signature indicates
a management decision to make the expenditure 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 delegations of authority and approvals and ensure that the proper signatures are obtained.
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 accounting data.
J. 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. 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.
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
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;
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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 (CORs) regarding insufficient funds, contract
modifications, contract overruns, etc.
K. OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO) [Reorganized in FY 2004]
The Office of the Chief Financial Officer, under the supervision of the Chief Financial Officer (CFO), is
responsible for developing, managing, and supporting a goals-based management 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
In compliance with the CFO Act, the OCFO will 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 designated a Presidentially appointed, Senate confirmed CFO and the appointment of a career SES
deputy CFO in each executive department and major agency.
There are seven primary implementation areas for which the CFO is responsible. These are
Annual Audited Financial Statements
Annual Reports
An Agency Five-Year Financial Management Plan
Financial Management Personnel
Financial Management Systems
Performance Measures
Agency User Fees
To complete its mission, the OCFO is organized into five Offices which are:
Office of Planning, Analysis, and Accountability (OPAA),
Office of Enterprise Technology and Innovation (OETI)
Office of Budget (OB),
Office of Financial Management (OFM),
Office of Financial Services (OFS).
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)
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 environmental, fiscal, 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.
2. Office of Budget (OB)
The Office of Budget (OB) Director is the Allotment Holder for all Agency resources and issues Advices of
Allowance in accordance with the Operating Plan to EPA Allowance Holders. 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 Office of Budget (OB) is the responsible authority for budget execution and budget formulation activities
for the agency. These activities include reviewing Operating Plan reprogramming requests, monitoring
resource utilization, ensuring the application of appropriations laws and OGC or Comptroller General legal
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opinions pertaining to Agency Allotments, and providing directives, guidance, and support to assist
Allowance Holders in fulfilling their own responsibilities. Office of Budget (OB) operates the Budget
Automation System (BAS) which serves as the primary agency-wide database during formulation of the
Agency's budget.
3. Office of Financial Management (OFM)
OFM is responsible for ensuring Agency compliance with the Federal Managers Financial Integrity Act (FMFIA)
of 1982, and the Chief Financial Officers (CFO) Act of 1990. 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. 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.
4. Office of Financial Services (OFS)
The Office of Financial Services-(OFS) is responsible for accounting and financial services at 4 locations:
Washington, DC, Research Triangle Park, NC, Las Vegas, NV, and Cincinnati, OH. The OFS also has
national responsibility for processing, accounting, reconciling & reporting of the Agency's biweekly payroll.
Office of Enterprise Technology and Innovation (OETI)
The function of OETI is to meet the growing challenges in business processes and to increase efficiency.
OETI also ensures there is a strategic approach to planning, budgeting, developing, integrating,
implementing, and monitoring agency-wide and OCFO financial systems and policies. OETI will have primary
responsibility for 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.
L. 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 include the authorized processing of commitment and
obligation documents into IFMS, managing accounts receivable and accounts payable, reporting, and providing
support to program offices in reconciling accounting data problems and discrepancies. There are fourteen
FMOs - one in each of the ten Regional Offices and one in each of the four Financial Management Centers
(FMCs). The FMCs are located at Washington, DC, Research Triangle Park, NC, Las Vegas, NV, Cincinnati,
OH. Each Regional FMO is responsible for the regional accounting process and updates to the IFMS for their
region. In addition to servicing local clients, the FMO at an FMC has nationwide responsibilities. Each FMC
services all AHs as follows: payroll (Washington, DC), contracts (Research Triangle Park, NC), assistance
agreements (Las Vegas, NV), interagency agreements and Purchase Card functions (Cincinnati, OH). Exhibit
2520-2-3 lists the addresses of the fourteen SFOs and their respective scope of responsibilities.
In carrying out accounts payable responsibilities, FMOs receive 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.
M. ACCOUNTS PAYABLE CERTIFYING OFFICERS and DISBURSING OFFICERS
Accounts Payable Certifying Officers should not be confused with agency Fund Control Officers (FCOs)
discussed earlier in this chapter. In many federal agencies, different government officials make "certifications"
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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. Certifying Officers, are 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 documents, the obligation will not get posted. In regards 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:
1. the existence and correctness of the computations and facts stated in a voucher and its supporting
records;
the legality of a proposed payment under the appropriation or fund involved;
returning payment vouchers that are inadequately documented; and
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 for a GAO opinion.
[NOTE: :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 Comptroller General (CG) to relieve certifying officers
from liability, and 31 U.S.C. § 3529, which purports to authorize the CG 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 Counsel (August 5, 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 or
her that the 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.
N. 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. Under EPA
Order 2515.1, EPA employees may rely on CG decisions as useful sources of appropriations law in conducting
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their day to day activities. However, if a certifying or disbursing officer is facing the possibility of personal
liability, a OGC opinion can be relied on by such officials. See EPA Order 2515.1, Paragraph 4. a., Policy.
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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 that legislation in a user-friendly
fashion 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 processes. This coding, when entered in the 6 Integrated
Financial Management System (IFMS) account fields, forms unique records which capture the detailed level of
accounting information that is needed by the Agency or required by 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.
[NOTE: Some column labels in the IFMS tables may be inaccurate as EPA has chosen not to attempt core
software changes.]
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 FY 1989 to FY 1994, 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 FY 1996. 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:
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.
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
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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 fields 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:
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
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
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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 OB and the Financial
Systems Staff, OFM.
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FIGURE-2
2520
12/01/04
FIELD NAME/SIZE
IFMS ACCOUNT CODE UTILIZATION
Figure 2
CHARACTER LAYOUT / PRIMARY UTILIZATION
l.BFY FIELD (2+2)
1 2 1 2
BFY END
BFY (2-YEAR FUNDS ONLY)
2.FUND FIELD (6)
1 2. 3 4
APPROP. SUB- RESTRICTED USE
APPROP.
(e.g. REIMBURSABLE)
5 6
RESERVED
3.ORGANIZATION FIELD (7)
1 2
A.H.
R.C./ A. ADD-ON CODE
LOCAL OP. B. SF ACTIV.CODE
C. TRACKABLE ITEMS
D. REIMBURSABLE I.D,
E. LOCAL OPTION
4.PROGRAM FIELD (9)
PROGRAM RESULTS CODE (PRC)
GOAL
5.SITE/PROJECT FIELD (8)
OBJECTIVE NPM
5 6 7 8
6.COST/ORG FIELD (7)
A.
B.
C.
D.
A.
B.
C.
PROGRAM/ AGENCY LOCAL
PROJECT ACTIVITY OPTION
(SPENDING
ONLY)
8
SF REGION/SITE SF ACTIV. OPER.UNIT
********* WORKING CAPITAL FUND ********
** INFORMATION TECHNOLOGY (I.T.) CODE **
*** LOCAL OPTION (TO BE DETERMINED) ***
CERCLIS SERIAL #
OPPT EXTRAMURAL IT CLASSIFICATIONS
OTHER LOCAL OPTIONS (TO BE DETERMINED)
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4. PROGRAM FIELD [PROGRAM RESULTS CODE (PRC)]:
[NOTE: 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. [NOTE: 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)
[NOTE: Subobjectives will no longer be coded in IFMS for budget execution beginning in FY 2004. 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 "what" 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 FY 2004.]
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 forspending 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)
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:
PROG 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
description book at the EPA intranet URL address: http://intranet.epa.gov/ocfo/budget/architecture.htm
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5. SITE/PROJECT FIELD:
The site/project field is processed by IFMS in a 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 recommend 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:
D Agency-wide code , which enables the PROJ costs to be gathered regardless of BFY/FUND
combinations.
D Project, which is the basic level to gather either obligations, expenditure, or cost data.
D 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. [NOTE: 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 nonsite cost
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
8 Future uses
c. INFORMATION TECHNOLOGY CODE: Used to track purchasing related to IT.
CHARACTER LOCATION/USE (S): [Note: 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.
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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, see 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.
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 L.U.S.T. 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,
e.g.:
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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) [NOTE: 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.
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 procured. OMB
supplies the structure and major object class codes for which the Agencies supply the detail. Examples of
OMB Major Object Class codes are:
24 Printing and Reproduction
26 Supplies and Materials
31 Equipment
41 Grants
All of the OMB Major Object Class codes 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 [NOTE: Revised in FY 2004]
For purposes of budget planning and execution, EPA does not use all of the OMB Major Object Class
codes. Beginning with FY 2004, the Agency has streamlined the OMB codes into only seven Budget Object
Classes (BOCs) eliminating the programmatic/administrative distinction in the Operating Plan. (NOTE: the
programmatic/administrative distinction will continue at the sub-object class level). The BOC list for FY 2004
will be as follows: (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 BOCs, EPA has grouped such OMB codes as rent, printing, supplies, transportation,
and equipment into BOC 36 (Expenses). This new structure was adopted to help streamline budget
processes and reduce workload for the budget community.
All of the Agency's BOC codes (crosswalked to OMB Major Object Class codes and Accounting Sub-Object
Class codes) can be viewed in IFMS by accessing the BOCT table and observing the column labeled
"BUDG BOC". [NOTE: 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 legislative history of an annual appropriation determines
what object class activity is 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 seven
budget object class codes (BOCs) are sufficient. For accounting purposes, however, the four digit budget
sub-object classes number over 250. Each of the sub-object class codes rolls up into one of the seven
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budget object classes (BOCs). The sub-object class codes provide the level of detailed information needed
for recording and sorting various spending transactions and to fulfill external reporting requirements to OMB,
GAO, Congress, etc.. All the sub-object class codes and definitions fall within the broader scope of the OMB
Major Object Class codes. For example, EPA has 18 sub-object class codes/definitions for the OMB Object
Class code 26 (Supplies and Materials). Additionally, all accounting sub-object class codes crosswalk to
one of the seven budget object class codes. A display of the OMB, BOC, and accounting sub-object class
relationships is included as Exhibit 2520-3-2.
All of the Agency's Accounting Sub-object Classes (crosswalked to OMB object class codes and 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 Allowance are then issued by the Office of Budget (OB) (Allotment Holder) that cannot exceed
the amount of the apportionment. The Advices of Allowance 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 Advices of Allowance are not formal sub-allotments
or administrative subdivisions of funds, they represent serious responsibilities within the Agency. Although
EPA currently operates in this manner, the Allotment Holder 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 also has the authority to consolidate Allowances centrally (or designate new Allowance
Holders), if Allowance Holder responsibilities are being abused.
2. Advice of Allowance Issuance
Advices of Allowance (AOA) 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 funds control lockout level at EPA is set in IFMS at the Appropriation/Allowance 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
Advices of Allowance are 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.
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.
When the Congressional Appropriations Committees approve the EPA Operating Plan (usually during
December), the Office of Budget (OB) Director issues an annual Advice of Allowance Letter which formally
transmits the following types of information:
D Advice of Allowance Report
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Agency Ceilings (if any)
Limitations to the Operating Plan
Congressional Approval Letter
List of Control Team Analysts
Action Items
The computer generated Advice of Allowance Report is a point-in-time hard copy confirmation of the
allowance data found in the SALC table. The Allowance Holders are responsible for staying within the FTE
ceilings and fund ceilings reflected in their Allowances. Additional guidance and computerized allowance
data is transmitted at the start of each new quarter, as necessary, after the Advice of Allowance Letter has
been transmitted.
FCOs must obtain a copy of the Advice of Allowance Letter from their Allowance Holder (AH).
3. Adhering to Advices of Allowance
Advices of Allowance, represented in IFMS by the SALC tables, specify 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.
[NOTE: Each federal agency usually does not have the full amount of its appropriation at the beginning of
the fiscal year. However, since FY 1995, EPA has been fortunate in having all of its funding provided in the
first quarter by OMB. 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 entered and 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. Purpose and Definition
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, budget object class,
Allowance Holder or Responsibility Center. Managers use reprogrammings to meet the changing needs
and priorities of the Agency. As a matter of policy, EPA adheres to reprogramming limitations contained in
the Appropriations Sub-Committee reports accompanying the annual Appropriations Act.
Some examples of reprogramming actions are:
Resource changes between budget object classes within a program results code.
Resource changes between program results codes to either different budget object classes or within the
same budget object class.
Resource changes between organizations (e.g. AHs, RCs)
General resource reductions or increases.
IFMS is set up to monitor ceilings and floors, if any. 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.
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IFMS uses one of two transaction documents to reprogram funds or FTEs. The Office of Budget (OB)
Reprogramming Transaction (RP) and the RPIO Internal Reprogramming Request Transaction (RR).
The RR transaction is primarily for program offices to use 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 the Office of Budget (OB) and unlimited amounts can be
reprogrammed within a PRC.
The RP transaction is used for reprogrammings across RPIOs, to and from the Office of Budget (OB) (for
taps and increases), and for Congressional Add-ons. All RP transactions require Office of Budget (OB)
approval.
2. General Reprogramming Restrictions
Reprogramming activity at the start of the fiscal year does not usually begin until Congress has approved
the Agency's Enacted Operating Plan. The Enacted Operating Plan is the detailed Agency budget that
results from adjustments (general and specific add-ons and reductions) that Congress has made to EPA's
budget request. It also reflects adjustments that EPA has made since the Agency's initial request to reflect
emerging priorities which require a reallocation of resources. Congress usually requires that this Operating
Plan be sent to it within 30 days of the enactment of our Appropriations Act.
A general limitation on reprogrammings is included annually in the committee reports for the VA/HUD and
Independent Agencies Appropriations Act, which includes EPA. In recent years, EPA has operated under
a limitation of $500,000 for most appropriations and for the EPM appropriation, committee approval is
required only above $1 million and notification is required above $500,000. Understandings reached with
our Appropriations Committees provide that the limitation is not cumulative for the year but applies
incrementally to reprogramming activities undertaken for a specific purpose. In other words,
reprogrammings between particular goal/objectives are not cumulative if each reprogramming is done for
a different stated purpose. However, for goal/objective reprogrammings done for the same purpose (and
are cumulative at the Agency level), EPA has agreed to notify or request approval from the Appropriation
Sub-Committees staff. In some years, restrictions may limit the number or timing of reprogrammings
requiring Congressional approval. Additionally, EPA has agreed to notify the Committees of reprogramming
actions that involve less than the limitation if such actions:
a. involve substantive changes in policy or direction at the goal/objective level,
b. change the agency's funding requirements in future years,
c. affect programs or projects specifically cited in the Committee's reports (i.e. earmarked resources or
add-ons)
Additionally, EPA has agreed to notify the Committees of:
d. reorganization of offices, programs or activities prior to the planned implementation of such
reorganizations.
The Office of Budget (OB) will assist Responsible Planning and Implementation Officers (RPIOs) in
providing Congressional notification for reprogrammings in excess of the limitation, whenever it is needed.
If you anticipate the need to reprogram funds in excess of the limitation, please notify the Formulation,
Control and Policy Staff. 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
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 Agency's position by:
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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 PEs 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, (add-on plus base in instances where Congress has
increased an underfunded program),
overobligating a goal/objective 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 which Congress considers on a case-by-case basis and
approves through the use of a Supplemental Appropriations Act.
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.
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 Workyears (FTEs), site-specific & non site-specific Travel,
Administrative Expenses, Superfund Functions, and sometimes even specific programs. In addition, the
Agency may violate the Antideficiency Act if its obligations and disbursements exceed specified statutory
ceilings. [NOTE: the OIG appropriation account does not have ceilings.]
EPA establishes and maintains agency limitations for the following ceilings:
Workyear Ceilings - Workyears are also known as FTE (full-time equivalents). [NOTE: 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 workyear is equal to between 2080 - 2096
employee workhours per year (listed by year in OMB Circular A-11) depending on annual calendar
fluctuations.] All employees, including Agency Co-ops and stay-in-school employees count against
the Agency workyear ceilings. These ceilings apply to workforce appropriations such as:
Environmental Programs & Management (EPM), Science & Technology (S&T), Superfund, and
Leaking Underground Storage Tanks (LUST). Workyear levels are developed during the budget
planning process and are determined by anticipated PC&B dollars divided by cost-per FTE estimates.
Workyear 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
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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 workyears. 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.
Travel Ceilings - These ceilings apply to travel appropriations such as: Environmental Program &
Management (EPM), Science & Technology (S&T), Superfund, and Leaking Underground Storage
Tanks (LUST)), etc. and are imposed to prevent government travel abuse. 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: "Where appropriations in titles I, II, and III of this Act are expendable for travel expenses
and no specific limitation has been placed thereon, the expenditures for such travel expenses may
not exceed the amounts set forth therefor in the budget estimates submitted for the
appropriations:...Provided further, That if appropriations in titles I, II, and III exceed the amounts set
forth in budget estimates initially submitted for such appropriations, the expenditures for travel may
correspondingly exceed the amounts therefor set forth in the estimates only to the extent such an
increase is approved by the Committees on Appropriations." [NOTE: EPA's appropriations act
typically states "that this section shall not apply to ... travel performed by the Offices of Inspector
General in connection with audits and investigations."]
Superfund (SF) Functional Ceilings- The report accompanying our annual Appropriations Act
established functional caps that restrict how Superfund resources can be spent. Regions must not
spend more than allotted under these functional caps. However, Regions may shift functional
amounts to other Regions. This can be done via reprogramming documents in IFMS. The document
must state in the purpose that the reprogramming shifts Superfund function resources. Currently, the
three Superfund functional ceilings are Response, Enforcement, and Management.
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 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 any time.
Workyear 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.
b. Floors - Congress or OMB 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
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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 FY 2000). 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, any floors do 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. Reprogramming Process
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
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 for the initiator whose rationale is documented. Reprogramming justifications should simply state:
1.) what the action achieves for the program(s) or office(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 approved reprogrammings which reprograms 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. Each year, the Office of Budget (OB)
estimates carryover balances that will be unobligated at year-end and submits carryover apportionment
requests to OMB by August 21st in accordance with OMB Circular A-11 (Part 4) (formerly OMB Circular A-34)
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
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amounts estimated almost three 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.
Beginning in FY 1996, the Integrated Financial Management System (IFMS) was coded so that two-year funds
would remain available into the second fiscal year and, in effect, carry over automatically. Utilizing this feature,
allowances were automatically available when IFMS opened for processing. Although this enhancement
provides a number of benefits to Allowance Holders, it also adds responsibilities for managing the funds for a
two-year period. For example, while Allowance Holders will no longer be required to request recertification
of second-year recovered funds, because IFMS will automatically recover those funds to the accounting data
from which they were deobligated, 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.
For the no-year appropriations which do not automatically carryover, 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 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.
Workyears 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 at the start-of-year 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 granted to EPA by the Office of Management and
Budget (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 by far the 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 [NOTE: 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. [NOTE: The
agreements themselves are overseen and processed by the Grants Offices throughout EPA. [NOTE: 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).]
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To avoid technical violations of the Anti-deficiency Act by making disbursements in excess of the
appropriation cash balance, close monitoring of the available cash balance for the effected appropriation
should be exercised. 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')
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 "Potentially 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 " retain and use" these funds by Section 122(b)(3) of
CERCLA.
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.
NOTE: 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. FIFRA IPAs - 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
cashouts) where it is merely the best apportionment mechanism for OMB to provide the specific 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 or 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 workyears (FTE).
Reimbursable workyears (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 total workyear
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 FCOs 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 HQ or 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 for the 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
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. FCOs should be familiar with all persons
authorized to sign for their organization. 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
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from individuals outside of the FCO's office. For example, for the purchase of any ADP 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 principle 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.
[NOTE: An exception where services for the direct benefit or use of the Agency could be obligated
through a grant award is in association with the Senior Environmental Employee (SEE) Program, which
is authorized by th Environmental Programs Assistance Act. This program 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 fund are not available. If allowances have been established at the RC
level, the two key tables to observe in IFMS are the SASP and SAIN Tables. For those Allowance Holders
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 IFMS will 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
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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. [NOTE: 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 other than 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,
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 prior to 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 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 an 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.
[NOTE: 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.]
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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.gov/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 for the 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 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), Grant Obligation (GO), Miscellaneous Obligation (MO),
or a Construction Grant (CG). [NOTE: The view displayed on DXRF will not provide the current status
of the obligation but the OBLH / OBLL table 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 by line; not for the total obligations. 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:
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.
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. Summarized information at the account level is
interfaced on a bi-weekly basis to IFMS.
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.
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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.
Grants Information and Control System (GIGS)
GIGS is used to manage all EPA grants. Award, disbursement, and grantee data is copied nightly
into the FDW.
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.
The data that is stored in the Financial Data Warehouse is available to the EPA users in two options.
the user may utilize the EPA's Financial Data Warehouse via the EPA Intranet ,or
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 is planning the launch of 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 a Phase I pilot
program and will include 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 with appropriated funds those
goods and services ordered or received.
GAO's Principles of Federal Appropriations Law (also known as the Red Book) Chapter 7, "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;
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for a purpose authorized by law;
executed before the expiration of the period of obligational availability (before the funds 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 up or down 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 after the 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 forthose goods orservices. Contractors are also required, underthe terms of their
contract, to submit copies of the invoices to the respective POand Contracting Officer fortheir 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.
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 to charge 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
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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
The process of ensuring that all funding transactions (commitments, obligations, and disbursements) are posted
correctly in IFMS and of resolving any discrepancies so that all records are in agreement is called reconciliation.
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 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.
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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) may be 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. [NOTE: 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 greater than the committed amount because
of a posting error, 2) the obligation may be greater than the commitment if the purchase order value 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." [Note: 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 decommitment 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 prior to obligation. Comptroller Policy Announcement 86-19 set forth policy and related
procedures for "prevalidating" commitments before award of certain contract and assistance projects.
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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.
The method of achieving prevalidation that is encouraged and recommended by OCFO is for the obligating
officials to require that a copy of the IFMS REQL table printout showing the recorded commitment be attached
to the obligating document. This alleviates the burden of obligating officials having to look up the committment
in IFMS themselves, or the possibility of the procurement being cancelled or changed after the REQL screen
has been printed out of IFMS. 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 "freeze" all commitments in IFMS that are greater than
$25,000. This is recommended in order to ensure that the funds stay committed and are not de-committed
without their knowledge. 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.
I. OVERRUNS/RECOVERIES
Overruns are upward adjustments to recorded obligations. 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. unauthorized procurements
2. unrecorded obligations
3. obligations deobligated in error
4. price changes
5. cost-rate adjustments
6. final audit billings
7. court or other claims
8. payroll adjustments.
[NOTE: True "cost growth overruns," in the context of contracts management, are distinctly different from 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.]
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 only offsets 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 closed and
funds are no longer available to the Agency.
The following guidance is given when handling overruns and recoveries:
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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 received 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. [NOTE: 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 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 violations (Chapter 4-A-1).]
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 is only 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 so. But again, sometimes the OB has some discretion
between overlapping appropriations that 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 (OB) 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 for that year plus the amount
available for adjustment from the unobligated balance for the same year. Should this happen, the excess can
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be liquidated only pursuant to a supplemental or deficiency appropriation or 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. 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)."
NOTE: 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 FY 1999 (i.e. FY1999/2000 funding). 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. OAM may not always approve an unauthorized procurement.
The following is a brief overview of the procedures for correcting an unauthorized procurement. For more
information, see EPA Contracts Management Manual, Chapter 12, "Ratification of Unauthorized Commitments,"
or EPA Acquisition Regulations (EPAAR) section 1501.
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.
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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 for which 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.
If prior year or expired funds are involved, then the Office of Budget (OB) must approve.
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.
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 cover the 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 here as the reissuance of deobligated prior year funds in a subsequent fiscal year
by the Office of Budget (OB) Director to Allowance Holders (AHs). Deobliqation is defined by GAO as "an
Agency's cancellation or downward adjustment of previously recorded obligations." Deobligations may result from
several factors such as services that cost less than obligated amount, change in requirements, failure to
perform, termination, etc..
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Recertification is only possible if:
1. the life of the appropriation has not expired,
2. recovery authority has been granted by the Office of Management & Budget (OMB) in the Agency's
apportionment, and
3. the seven criteria listed in Section III.K.2 are met.
During the 2-year period of availability, deobligations of two-year funding recover 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 (recertification) to be obligated again 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
dollars 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:
a. .As noted in section 11C 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 reissued.
b. 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.
c. For unexpired appropriations, recertification is not required by the Office of Budget (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 Office of Budget (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 and Contracting Officer Representatives (CORs) must ensure, depending on
contract type, that obligations are entered into appropriately and responsibly.
d. Recertification is not required by the Office of Budget (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. The
necessary accounting transactions constitute an "account code modification" not a "deobligation" or
"reobligation".
e. For assistance agreements such as grants (including STAG State grants) and cooperative agreements,
recertification is not required by the Office of Budget (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
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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.
f. When an assistance agreement recipient is unable to perform the agreement, 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 may
be deobligated and reobobligated 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.
2. When funds do need to be recertified:
Requests for reissuance of deobligated funds for reasons other than those listed above, such as an
obligation for a new assistance agreement or for a new contract with a new scope-of-work, do require
recertification by the Office of Budget (OB) before the end of the fiscal year. 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 Office of Budget (OB). In order for
the OB to approve a request for recertification, the following criteria must be met:
a. The Agency must have received sufficient recovery authority in the currently approved OMB
apportionment for the specific appropriation for which funds are being deobligated.
b. 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.
[NOTE: 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.]
c. The specific deobligation for which the recertification is being requested must have been posted in IFMS
and be reflected as a recovered balance on IFMS screens and computer reports.
d. 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. The written request for recertification must sufficiently justify the reissuance of the funding and be
approved by the Office of Budget (OB).
f. Once sufficient recoveries to cover fiduciary responsibilities have accrued, the Office of Budget (OB) will
consider recertification requests, by RPIO, on a first come first served basis.
g. The RPIO, through a Contracting Officer or Grants Award Official, must be able to obligate the recertified
funds before the appropriation expires and the obligation must be for a bona fide need of the current
fiscal year.
NOTE: 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.
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Annual reprogramming restrictions, issued at start-of-year 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 the resources are
not otherwise earmarked.
L. CENTRALLY MANAGED ALLOWANCES (CMAs)
At EPA, there are a number of centrally managed allowances which are controlled by the Agency's Allotment
Holder (Office of Budget) Director). [NOTE: The Advice of Allowance process for funds control was previously
defined in Chapter 1 and detailed in Chapter 3.] These centrally managed allowances are not managed for
the purpose of withholding funds from obligation for the purpose for which they were appropriated. 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 Allotment Holder.
[NOTE: all 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.]
The CMA Allowance Holders (AHs) are identified as follows:
EPA HQCMA 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
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. programmatic delays such as: funding awaiting Congressional reprogramming approval; funding targeted
for Congressional rescission; 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
Antideficiency Act violations do not occur in unexpired appropriation accounts. A lapsed unobligated
balance protects against Antideficiency Act 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. [NOTE: 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 allowance 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
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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 Centrally Managed Allowance (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 "M" 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 the Agency Allotment Holder (OB
Director) are contributing factors. Centrally Managed Allowances (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 [NOTE: there is a Comp.Gen.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 Lotus 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 difference between the recorded obligation and what has been paid out as
disbursements (also called outlays or expenditures). The implications of an obligation not being fully paid is
that either all the goods or services have not yet been obtained 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 obligation reviews are required by law (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. Following are the Agency's policy and procedures
on how unliquidated obligation reviews are to be conducted:
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.
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.
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 acquisitions 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. For those 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
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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 for the program office's budget. After the 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. Interagency Agreements (lAGs)
For Headquarters administered lAGs, the Cincinnati FC will distribute the listing of Headquarters lAGs to
the Grants Administration Division (GAD). For Regionally administered lAGs, the listing of Regional lAGs
will be distributed to the remote printer bins of the Regional SROs or designees. Reviewing officials in GAD
and the Regions will discuss the projects with Project Officers to determine whether the 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, GAD staff or the Region will contact
Cincinnati-FMC to ensure that there are no unpaid bills and to verify the unliquidated obligation amount.
GAD 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 GAD 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 GAD.
For those administered Regionally, the list will be distributed to the Regional SROs or designees. 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 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.
4. All other items (e.g. travel, simplified acquisitions, Government Bills of Lading, Federal Express, utilities)
OFM will distribute reports sorted by Allowance Holder Responsibility Center (AHRC) to the remote printer
bins of Headquarters SROs and Regional SROs or designees.
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
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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 CLOSEOUT
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
commitments into IFMS, submitting purchase requests/orders and grant funding packages to OAM and GAD).
Expiring funds that remain uncommitted in IFMS may be 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-Yr funds
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 start 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.
NOTE: Statutory and regulatory changes (Federal Acquisition Streamlining Act of 1994 (FASA) section 1073,
and Federal Acquisition Regulation (FAR) 37.106), now 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. In effect, this extends the availability of appropriations as
to time by up to 364 days into a fiscal year in which those funds would have no longer been available.
[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.
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As mentioned earlier, an end-of-year memo goes out which establishes closing/cutoff dates for financial
transactions. OAM and GAD 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/GAD 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;
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 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 (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, the Antideficiency Act prohibits:
a. "Making or authorizing an expenditure from, or creating or authorizing an obligation under, any
appropriation orfund in excess of the amount available in the appropriation orfund 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 Antideficiency Act violation will have occurred as well. Statutory ceilings may also be a basis
for Antideficiency Act 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 the appropriation.
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
[NOTE: 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.]
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 quarterly totals and apportionment earmarks are also a basis for Antideficiency Act
violation. 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.
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
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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 and Congress. 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.
Penalites
The law 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;
c. 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:
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 allocations in excess of an apportionment pending the passage of appropriations;
c. issues agency allowance in excess of the related allocation, by quarter or in 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
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in expired appropriations that retain their fiscal year identity to exceed the apportionment for the year in
which such obligations were required.
B. 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 micropurchases (currently stated as less than $2,500) 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 is the overall office in charge of the Agency's Bankcard program, lays
out specific policy and procedures in Chapter 13 of the Agency's Contract Management Manual, Section 13.3
titled "EPA Policy and Guidelines for the Use of the U. S. Government: Purchase Card Program" which can be
found at:
http://dcrroam05.reaqan.epa.qov:9876/NATAPPS/OARM/OAM/PurCard/PurchaseCardWebDB.nsf/
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. The FCO must ensure
that the financial transaction is compliant with Agency financial policy and procedures and that all accounting
data are 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.
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 FCO to decommit any
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.
NOTE: The requirement of needing EPA Form 1900-8, "Purchase Request/Order" is no longer required
for internal Bankcard transaction processing since there is some duplication with the Bankcard 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 by that cardholder.
2) The official cardholder log shall be kept on a fiscal year basis and shall be maintained
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on a 30 day billing cycle. (NOTE: The EPA billing cycle begins on the 28th day of each month and ends on
the 27th 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:
Vendor/merchant receipts or confirmations associated with the orders;
Vendor invoices (if provided);
Documentation of required prior approvals;
Memoranda for the Record (MFR) documenting any problems or unusual circumstances surrounding an
order, and;
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 or the 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 forthe cardholders to use in cost allocating transactions through EPA's Intranet Purchase Card
Cost Allocation System or the contractor bank's Internet Electronic Accounting Government Ledger System
(e.g., EAGLS). The option used is entirely dependent upon local procedures and/orarrangements established
between the FCO and the cardholder. [NOTE: 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].
1. Default Purchase Card Commitment
This option allows the FCO to establish a basecommitment 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 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 drop down
menu, for that 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 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 forthe cardholder's
purchase. When the cardholder cost allocates a transaction, each commitment line will be reduced
accordingly. It is important forthe cardholder to select the assigned OC for that 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.
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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 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 EAGLS. 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. Cardholders are not to delay payment by waiting to reconcile purchases
against contractor bank statements of account. 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: "We have received the following list of purchases from the
contractor bank. Please note the list does not include purchases already allocated. Please cost allocate all
valid and delivered purchases as soon as possible.
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. The transaction review
page can be accessed at: http://oasint.rtpnc.epa.gov/fmc2/card.card review.
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 Responsible Planning and Implementation Office (RPIO) for each quarter. The rebate is then
distributed based on the RPIO ratio of purchases during each quarter.
Funds Control Officer (FCO) Requirements
In order to make use of the Bank of America VISA card and EAGLS, the FCO's need to decide which
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 in EAGLS.
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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.
Prohibited Purchases
The U.S. Government Purchase Card program was developed to be as nonrestrictive as possible;
however, 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:
1. Personal use supplies/services (items not necessary for EPA work).
2. Personal services (employer/employee relationship)
3. 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.)
4. Purchase of any form of unauthorized entertainment.
5. 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)
6. Purchase of gasoline or oil for GSA Interagency Fleet Management System vehicles (use EPA
approved fleet management cards for these purchases.)
7. Cash advances (use EPA travel card)
8. Purchase of airline, bus, boat, or train tickets (use EPA travel card).
9. Employee rental or lease of motor vehicles, land, or buildings of any type.
10. Long term rental and maintenance agreements.
11. Construction, alteration or repair of public buildings.
NOTE: According to OGC, the purchase card may be used to purchase meals, light refreshments, and
to rent space in hotels for training conferences may be an authorized "necessary expense" under EPA
policies implementing the Government Employees Training Award 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.
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.
C. ORDERING GSA OFFICE SUPPLIES
Effective September 30, 2004, EPA's Corporate Express Blank Purchase Orders (BPAs) became the
mandatory mechanism for ordering all office supplies. See OAM's web pages:
http://epawww.epa.gov/oamintra/hpod/bpagen.pdf on BPAs, and/or Simple Acquisitions Made
Easy (SAME)
http://epawww.epa.gov/oamintra/policy/sacq.pdf and
http://dcrroam05.reagan.epa.gov:9876/NATAPPS/OARM/OAM/PurCard/PurchaseCardWebDB.nsf/
for additional information.
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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 CSC.
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.
D. 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. [NOTE: For FY 2004, EPA has purchased PeoplePlus - an
integrated management system for Human Resources, Benefits, Payroll, Time and Labor . Additional
payroll guidance and instructions for the PeoplePlus system and software will be distributed under
separate cover though 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 workyears and personnel costs. It shows whether an employee
is paid with management and support funds, or from environmental program funds. It is important
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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 year which
specifies the names of the employees, their social security numbers, the FAN, and the percentages
of each appropriation to be charged throughout the fiscal year. Of course, only appropriations
available for PC&B may be used in split-funding payroll costs.
3. Calculating FTE Usage
An "FTE" (Full Time Equivalent) or "workyear" is the number of compensable hours that an
employee working full time would work in a given year. A workyear 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 Senior Budget Officer, for possible redistribution of FTE ceiling or other action
as necessary.
E. OPERATING UNDER A CONTINUING RESOLUTION
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 Continuing Resolution to allow agencies to continue operations until the budget is passed. This
normally permits EPA to incur expenditures at approximately the same rate as it did during the previous
fiscal year. Under a Continuing Resolution, the Office of Budget (OB) provides guidance to each
Allowance Holder stating the level/rate of expenditures which the Allowance Holder may incur by
Appropriation/Allowance. This guidance may include a temporary Advice of Allowance. Allowance
Holders must restrain spending during a Continuing Resolution to ensure that EPA does not violate
Congressional limitations.
If Congress does not pass the budget by October 1, or vote on a Continuing Resolution, 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/rmpolicy/ads/orders/1 OOP 26a.pdf
F. 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
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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 benefitting appropriations. All program offices contributing funds to the procurement
must indicate on the rationale their concurrence with the estimate.
Costs must be allocated based on a formula derived from the estimated benefits to each
appropriation. [NOTE: if each task, work assignment, or delivery order within the multi-funded
contract will be funded from a single appropriation, OFM approval is not required.1 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 (dtd 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 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 for the 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 project's 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 benefitted 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
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contained in Comptroller Policy Announcement 98-10, "Accounting for Resources under the Government
Performance and Results Act.
Project Officers may contact their Servicing Finance Offices (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/multiple appropriations awards policy.htm
[NOTE: 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.]
G. 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 benefitting 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-off1
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.
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. [NOTE: Although Superfund is specifically mentioned in the chapter title, the
methodologies described can be applied to any Trust Fund or appropriation.]
H. 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 for the services ordered. The WCF Funding/Requisition Form is organized so that
customers use a unique DCN for each service ordered. 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 for the WCF services identified.
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2. Committing and Obligating Funds
There are three ways that customers can fund their WCF SA: 1) unexpiring two-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 2475 (programmatic) and 2476
(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.
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 Chapter 3, 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
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 FDW data 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.
EPA has implemented a sub-system in IFMS called the Project Cost Accounting Subsystem (PCAS).
The PCAS tracks service costs, associates the service costs with Customer SAs, distributes the
service costs to customers and bills the customer. Recommended WCF PCAS tables for FCOs are
the following: FPCA, FPCD, PROJ, and CADT. These provide different accounting information on
obligations and expenditures for a WCF service.
FCOs may also consider using the WCF link at the OCFO@Work website to monitor their SA
expenditures as well.
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
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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.
I. "ADMINISTRATIVE" vs. "PROGRAMMATIC"
1. Philosophy
The concept of costs being either "administrative" or "programmatic" is a functional distinction based
on purpose. In FY 1994, 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 for which 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.
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.
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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 ADP, 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 ADP.
ADP Cost Layoff/Methodology - EPA and the Appropriation Committees have agreed that a
percentage of Superfund ADP timeshare contract costs could be charged as programmatic.
Under the revised definition, a methodology may be used to allocate an appropriate amount of
ADP 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.
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 or 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
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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
datalines, 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
provide additional Operating Expenses Ceiling 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.
g. OARM Programmatic Costs
The Committees have stated that "all elements identified in the management and support section
of the agency's Congressional budget justification should be included under the Operating
Expenses Ceiling". Because grants, programmatic expenses and programmatic contracts are
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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
ADP 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
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 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 States 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.
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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 send the Office of Budget (OB) 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)
Bay City, Michigan supercomputing complex
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 (Grand Slam Bldq) RTP, NC
Atmospheric Modeling Division (ORD)
Exposure Research Lab- Environmental Photographic Interpretation Ctr., Reston, VA
Human Exposure & Atmospheric Sciences Division (ORD)
Environmental Sciences Division (ORD)
Exposure Research Lab- Cincinnati, OH
Ecological Exposure Research Division (ORD)
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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)
Environmental Carcinogenesis Division (ORD)
Neurotoxicology Division (ORD)
Health and Environmental Effects Research Lab- Reproductive Toxicology Facility, RTP, 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, RTP, 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)
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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:
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:
Messengers
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Courier Services
HQ/Region Rental use of Land and Buildings
HQ/Region Space Rental Paid to GSA
HQ/Region Utilities
HQ/Region General Purpose ADP Data Facilities, Hardware, and Software Rental
General Postage/Mail
Programmatic:
Special-Use Facility Rent Paid to GSA, Utilities, etc.
Mission-Related ADP 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:
-D Materials to Promote Recycling;
-D Lead and Your Drinking Water;
-D Affects of Suns Rays;
-D Targeting Indoor Air Pollution; and
-D other technical "How To" Guides (e.g., How To Reduce Radon Levels In Your Home)
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
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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 ADP 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 RecoveryDocumentation (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
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
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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 ADP Software Packages
Copy Machines
Facs 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 ADP Software Packages such as:
-D toxic chemical composition analysis programs - LHASA, SYNGEN,CAMEO;
-D chemical property estimation programs; and
-D CLOGP & PC GEMS; SAS & SAS-Graph software when used for generating research lab.
data, etc.) (25.75 if WCF)
Programmatic ADP 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.
ADP Equipment for Programmatic Databases such as:
-D Storet;
-D Haz.Wst.DMS;
-D New Air Data System;
-D Docket System;
-D Pesticide Product Info. System;
-D 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
4-21
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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
CHAPTER 4 12/01/04
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.
J. DIRECT IMPLEMENTATION by EPA of STATE and TRIBAL ENVIRONMENTAL PROGRAMS with
STAG APPROPRIATIONS
For state and tribal continuing environmental program grants authorized in the STAG appropriation, the
states or tribes have primacy (primary responsibility to carry out the environmental program supported by
the grant). If a state or tribe chooses not to carry out a specific program or programs, EPA then has
primacy if EPA is required by law to carry out the environmental program in the absence of a state or tribal
program. The EPA regional office for that particular state will either carry out the environmental program
themselves ("in-house") or procure a contractor to perform the state's role. This is referred to as Direct
Implementation. Sometimes states share primacy with EPA. In some cases, a state may carry out part
of the environmental program with EPA grant funds and EPA will directly implement others. For example,
in the Underground Injection Control (UIC) grant program there are 5 classes of wells and a state may only
accept primacy for certain ones and refuse others. They can accept all wells, class II wells only, or classes
I, III, IV and V only. In that case, EPA must directly implement sections that the state or tribe does not
carry out and therefore, share primacy with the state or tribe.
For the direct implementation with STAG funds 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.
NOTE: Because there are no travel funds appropriated in the STAG account, any direct implementation
travel needs in the Regions 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 by the region, 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 for that purpose, not STAG.
NOTE: 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.
NOTE: 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.)
4-22
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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
CHAPTER 4 12/01/04
K. 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. So funds we collect may actually get
appropriated back to us in our environmental programs. For us to be able to use the collected fees held
at Treasury, they would have to be specifically appropriated by Congress. Were that to happen, we'd
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/
L. 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 for the purpose of the grant, 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 for a 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 for the 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 GAD policy (EPA Order 5700.1) for distinguishing between assistance and acquisition,
go to the following intranet URL sites:
http://intranet.epa.gov/rmpolicy/ads/orders/5700 1 .pdf
http://intranet.epa.gOv/ogd/policy/7.0-GPI-GPI-94-04.htm
Selecting between a Grants or Cooperative Agreement
After an office or laboratory determines that an assistance agreement ratherthan 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.
4-23
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RESOURCES MANAGEMENT DIRECTIVES 2520
ADMINISTRATIVE CONTROL OF APPROPRIATED FUNDS
CHAPTER 4 12/01/04
Policy for Competition in Assistance Agreements
In August 2004, GAD revised EPA Order 5700.5 - "Policy for Competition of Assistance Agreements. For
the "Effective Date" the policy stated: "The requirements of this Order apply to: (1) competitive
announcements issued, released, or posted after December 31, 2004, (2) assistance agreement
competitions, and awards, resulting from competitive announcements issued, released, or posted after
December 31, 2004, (3) assistance agreements that are awarded on a non-competitive basis after
December 31, 2004, and (4) amendments to assistance agreements that are issued after December 31,
2004". 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." Unless an individual award or an assistance program qualifies for one of the
exemptions from competition contained in the Order, it applies to all EPA assistance programs and each
assistance agreement where the funds available for award(s) exceed the competition threshold. To view
EPA Order 5700.5 and view the lists of awards the policy does and does not apply to, see intranet URL
site: http://intranet.epa.qov/rmpolicy/ads/orders/5700 5.pdf
4-24
-------
EXHIBITS
-------
-------
n
Responsible
Planning and
Implementation
Office
(AA for OPPTS)
Senior Budget
Office
Allowance Holder
Pollution Prevention
& Toxics
Funds Control
Officer
ntrol Relationships in EPA
Senior Resource
Official
Director
Office of Budget
Senior
Resource
Responsible Planning
and Implementation
Office
(AA for OSWER)
Allowance Holder
Pesticides Programs
Allowance Holder
Office of Solid
\
\
\
\
\
Funds Control
Officer
Allowance Holder
Immediate Office, OPPTS
\ Funds Control
\ Officer
\^
\
Allowance Holder
Office of Emergency
and Remedial
Response
Allowance Holder
Immediate Office,
OSWER
\
\
Funds Control
Officer
\
Allowance Holder
Office of Underground
Storage Tanks
Funds Control
Officer
Funds Control
Officer
Funds Control
Officer
EXHIBIT-2520-2-1
-------
FCO Designation Letter
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
individuals) listed below has 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
-------
FCO Designation Form
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) 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
-------
Servicing Finance Offices (SFO)
SFO# Address
1 FMO
US EPA, Region I
One Congress Street
Suite 1100(MCO)
Boston, MA 02114-2023
2 FMO
US EPA, Region II
290 Broadway
New York, NY 10007-1866
FMO
US EPA, Region III
1650 Arch Street
Philadelphia, PA 19103-2029
FMO
US EPA, Region IV
Atlanta Federal Center
61 Forsyth Street, S. W.
Atlanta, GA 30303-3104
FMO
US EPA, Region V
77 West Jackson Boulevard
Chicago, IL 60604-3507
FMO
US EPA, Region VI
1445 Ross Ave.
Suite 1200
Dallas, TX 75202-2733
FMO
US EPA, Region VII
901 N. 5th Street
Kansas City, KS 66101
FMO
US EPA, Region VIII
999 18th Street Suite 500
Denver, CO 80202-2466
FMO
US EPA, Region IX
75 Hawthorne Street
San Francisco, CA 94105
Responsibility
Region 1 Purchase Orders
Region 1 Training (except contract, interagency)
Region 1 Travel
Region 1 Superfund
Grants/Cooperative Agreements
Region 2 Purchase Orders
Region 2 Training (except contract, interagency)
Region 2 Travel
Region 2 Superfund
Grants/Cooperative Agreements
Region 3 Purchase Orders
Region 3 Training (except contract, interagency)
Region 3 Travel
Region 3 Superfund
Grants/Cooperative Agreements
Region 4 Purchase Orders
Region 4 Training (except contract, interagency)
Region 4 Travel
Region 4 Superfund
Grants/Cooperative Agreements
Region 5 Purchase Orders
Region 5 Training (except contract, interagency)
Region 5 Travel
Region 5 Superfund
Grants/Cooperative Agreements
Region 6 Purchase Orders
Region 6 Training (except contract, interagency)
Region 6 Travel
Region 6 Superfund
Grants/Cooperative Agreements
Region 7 Purchase Orders
Region 7 Training (except contract, interagency)
Region 7 Travel
Region 7 Superfund
Grants/Cooperative Agreements
Region 8 Purchase Orders (RTP obligating and paying)
Region 8 Training (except contracts, interagency)
Region 8 Travel
Region 8 Superfund
Grants/Cooperative Agreements
Region 9 Purchase Orders
Region 9 Training (except contract, interagency)
Region 9 Travel
Region 9 Superfund
Grants/Cooperative Agreements
EXHIBIT-2520-2-3
-------
SFO#
10
99
22
33
27
Address
FMO
US EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
Director
Office of Financial Services
Mailcode (2734R)
1200 Pennsylvania Avenue, N. W.
Washington, DC 20460
Director
Office of Financial Services
U.S. EPA, MD-32
T.W. Alexander Drive, Adm. Bldg.
Research Triangle Park, N. C. 27711
Director
Office of Financial Services
U.S. EPA, LVFMC
POBox 98515
Las Vegas, Nevada 89193-8515
Director
Office of Financial Services
U.S. EPA, CFMC
26 Martin Luther King Dr.
Cincinnati, Ohio 45268-7002
Responsibility
Region 10 Purchase Orders
Region 10 Training (except contract, interagency)
Region 10 Travel
Region 10 Superfund
Grants/Cooperative Agreements
Headquarters Training
(except contract, interagency)
Headquarters Payroll
Headquarters & RTP Purchase Orders
RTP Training (except contract, interagency)
RTP Travel
Contracts
Working Capital Fund Service Agreements
Las Vegas Purchase Orders
Las Vegas Training (except contract, interagency)
Las Vegas Travel
Assistance Agreements
State Grants/Cooperative Agreements
Cincinnati Purchase Orders
Cincinnati Training (except contract)
Bankcards
Federal Register Notices
Interagency Agreements (IAG)
Headquarters & Cincinnati Travel
Payments to Federal Agencies
Payments & Collection of IPA Assignments
(for Cin., HQ, RTP, & Las Vegas)
EXHIBIT-2520-2-3
-------
EPA Appropriation Fund Codes / Treasury Symbols
Approp.
Code
General
B
BR
BR2
BR3
BR4
B2
B3
B4
LR04
B5
B9
C
CR
CR1
CR3
C2
C3
C4
C9
D
DC
D9
N
NR
N2
E1
E1C
E2
E2C
E3
ESC
E4
E4C
GT1
GM1
GH1
GB1
GZA
GXA
GVA
GWR
GHS
G7A
Title
Fund Accounts
Environmental Programs and Management (EPM)
EPM Reimbursable (Multi-Year)
EPM Reimbursable - Ocean Dumping (Multi-Year)
EPM Reimbursable - IPA and Non-Federal (Multi-Year)
EPM Recycling Proceeds (Multi-Year)
AC&C No-Year - Carryover
DOE Appropriation Transfer
Agency for International Development Appropriation Transfer
EPM Reimbursable - Homeland Security or other special
Agency for International Development Appropriation Transfer
Homeland Security Supplemental - EPM Carryover
Science and Technology (S&T)
S&T Reimbursable (Multi-Year)
S&T Reimbursable
S&T - IPA and Non-Federal (Multi-Year)
R&D No Year - Carryover
S&T - Superfund for Execution
DOT Appropriation Transfer - S&T
Homeland Security Supplemental - S&T Carryover
Buildings & Facilities
Buildings & Facilities - Carryover
Buildings and Facilities - Supplemental (see Note)
Inspector General
Inspector General - Reimbursable (Multi-Year)
Inspector General - Superfund for execution
State and Tribal Assistance Grants (STAG)
STAG Categorical Grants
STAG Categorical Grants - Carryover
STAG Clean Water State Revolving Fund (SRF)
STAG Clean Water SRF - Carryover
STAG Drinking Water SRF
STAG Drinking Water SRF - Carryover
STAG Special Programs
STAG Special Program - Carryover
Water Infrastructure / State Revolvinq Funds (FY 95 and Prior)
FY95
FY94
FY93
FY92
FY91
FY90
FY89
FY 77-88
Contract Authority: FY 73-77
P. L. 84-660: FY 67-72
Years
05/06
05/06
05/06
05/06
05/06
05
05
04/05
05/06
05
05
05/06
05/06
05/06
05/06
05
05/06
05
05
05
05
05/06
05/06
05/06
05/06
05
05
05
05
05
05
05
05
05
05
05
05
05
05
05
05
05
05
Treasury
Symbol
685/60108
685/60108
685/60108
685/60108
685/60108
68X0108
68X0108
684/50108
685/60108
68X0108
68X0108
685/60107
685/60107
685/60107
685/60107
68X0107
685/60107
68X0107
68X0107
68X0110
68X0110
685/60110
685/60112
685/60112
685/60112
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
68X0103
EXHIBIT-2520-3-1
-------
Approp.
Code
Title
Years
Treasury
Symbol
Special Fund Accounts
P FIFRA
P1 Pesticide Registration
Y Tolerance Fund
05
05
05
68X4310
68X5357
68X4311
Intergovernmental Fund Accounts
WR Working Capital Fund - Service Agreements
WR1 Working Capital Fund - Reimbursables
05
05
68X4565
68X4565
Trust Fund Accounts
F LUST 05
FC LUST - Carryover 05
H Oil Spill 05
HC Oil Spill - Carryover 05
HR Oil Spill - Reimbursable 05
T Superfund 05
TC Superfund Appropriated Funds - Carryover 05
TR Superfund Reimbursable - All Other 05
TR1 Superfund Reimbursable - SSC 05
TR2 Superfund Reimbursable - Special Accts: Future Costs 05
TR2A Superfund Reimbursable - Special Accts: Fed Unearned Advances 05
TR2B Superfund Reimbursable - Special Accts: Interest & Past Costs 05
TR3 Superfund - IPA 05
T2 Superfund - Inspector General for Treasury Transfer 05/06
T3 Superfund - S&T for Treasury Transfer 05/06
T4 National Drug Control Policy - Appropriation Transfer 05
T5 Superfund-Appropriation Transfer for McElroy Site 05
T9 Homeland Security Supplemental - Superfund Carryover 05
68-20X8153
68-20X8153
68X8221
68X8221
68X8221
68-20X8145
68-20X8145
68-20X8145
68-20X8145
68-20X8145
68-20X8145
68-20X8145
68-20X8145
685/68145
685/68145
68-20X8145
68-20X8145
68-20X8145
Miscellaneous Accounts:
ZA Operations, Research and Facilities
ZB Energy R&D
ZC Miscellaneous Contributed Funds
ZD GSA Building Delegated Program
ZE Appalachian Regional Commission
ZF Agency for International Development
ZG Exxon Valdez Settlement Fund
05
05
05
05
05
05
05
68X0100
68X0109
68X8741
68-47X4542
68-46X0200
68-72X1010
68X5297
NOTE - All multiyear (BFY 2005/2006) funds are also valid for BFY 2004/2005 except for Buildings and Facilities
Supplemental which is available only for BFY 2005/2006
EXHIBIT-2520-3-1
-------
Object Class Relationships
OMB Object Classification Codes
11.1 -11.9 Personnel Compensation
12.1 -13.0 Benefits
21.0 - 26.0 Contractual Services and Supplies
31.0 - 33.0 Aquisition of Equipment and Land
41.0 - 44.0 Grants and Fixed Assets
EPA Budget ObjecK^lasses
10 - Personnel Compensation & Benefits
21 -Travel
28 - Site Travel
36 - Expenses
37 - Contracts
38 - WCF
41 - Grants
EPA Accounting Sub-Object
Class CodesX
(Several hundred broken out
by OMB Object Class Code
EXHIBIT 2520-3-2
-------
IFMS Budget Hierarchy
The organizational hierarchy of the IFMS budget subsystem and the related inquiry tables are displayed
below.
Organizational Level
Sample Codes
Inquiry Tables
FULL CONTROL
Agency
APPROPRIATION
BFY: 97 05 APPR: B
APPR
Agency
APPORTIONMENT
QTR: 1
APOR
RPIO
ALLOCATION
BFY: 05 06 APPR: B
RPIO: 16
ALOC
Allowance
Holder
SUBALLOCATION
BFY: 05 06 APPR: B
RPIO: 160RG:42
SALC
PRESENCE CONTROL
Allowance
Holder
ALLOWANCE
BFY: 05 06 APPR: B
RPIO: 16ORG:42
PE: GUX BOC: 30
ALLT
NO CONTROL
Responsibility
Center
SUBALLOWANCE
BFY- 05 06 APPR: B
SASP/SAIN
EXHIBIT-3-3
-------
How to Write a Good 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 for the 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
INFORMATION for the JUSTIFICATION
Your justification should simply state:
1. What the reprogramming is buying for programs, activities, or offices receiving an increase? If it is the result
of an FTE change, provide details of (a) why there is a change and (b) the impact on the programs affected.
2. What are the impacts to the programs, activities, or offices losing resources? Something previously
budgeted for has been reduced. Have priorities or schedules changed?
3. Include the name and telephone number of a contact person.
EXAMPLE:
Proper Justification:
This action reprograms $200 K for additional contractor support and $80 K 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 delayed until next fiscal year as a result of this reprogramming. Questions should be directed to: Richard Certain
(OAR) at 202-564-2525.
Poor Justification:
Transfers funds from the New Chemical Review PRC to the Chemical Registration PRC to meet end-of-year needs.
EXHIBIT-2520-3-4
-------
APPENDIX
-------
-------
APPENDIX A
BUDGET
TERMS and DEFINITIONS
-------
BUDGET TERMS and DEFINITIONS
Excerpted from the GAO Glossary
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 nonbudgetary 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 accounts) 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.
Special Fund Accounts Federal fund accounts earmarked by law for a specific purpose.
1. 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.
2. Special Fund Expenditure Account
An appropriation account established to record appropriations, obligations, and outlays financed by the
proceeds of special fund receipts.
APPENDIX-2520-A-1
-------
Intra-qovernmental 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 for the 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 by law, 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.
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
Forthe 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
orfund. (The appropriation orfund from which the allocation is made is called the parent appropriation orfund.) 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 orto 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
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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.
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 wt 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
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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
orfund account in a mannerthat 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 underthe 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.
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 incurdebts 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.
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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.
2. Borrowing 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)
may be 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
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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.
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 may be 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 prov 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) after the account expires for the 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) afterthe 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 coverthe current, budget, and future
years, as reflected in the President's budget and budget updates.
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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.
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,
forthe fiscal year beginning on October 1 of the yearof 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 forthe budget process, established a requirement fora 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
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guarantee programs, and bank deposit insurance programs. Contingent liabilities are 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 forthe 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 fora 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.
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Earmarking
Either of the following:
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 for a 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. Afterthe 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 for the 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.
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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 yearthat immediately precedes that budget year.
3. Prior Year
The fiscal year immediately preceding the current year.
Forward Funding - Forward funding can be defined in two ways:
1. Appropriation of budget authority that is made available for obligation in the last quarter of the fiscal year for
the financing of ongoing grant programs during the next fiscal year.
2. Appropriation 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.
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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.
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 fora 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 year following 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. Under this 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
APPENDIX-2520-A-11
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purchased (such as personnel compensation; supplies and materials, and equipment) without regard to the agency
involved or the 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 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 after the 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 bylaw, 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 after the 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 orthe 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 similartransactions 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 for the year in which the money is spent.
Outyear
APPENDIX-2520-A-12
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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
advancesto be received orexpected 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 balances, and program slippage.
APPENDIX-2520-A-13
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Rescission Bill
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 govern mental 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 (ordecrease 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©ofthe 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 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
APPENDIX-2520-A-14
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authorized after the 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 whether the transaction is treated as an expenditure or
a nonexpenditure transfer.
Expenditure Transfer
Atransaction 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 forwhich delivery or performance has not yet occurred. This
term is synonymous with unliquidated obligations.
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.
APPENDIX-2520-A-15
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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.
APPENDIX-2520-A-16
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APPENDIX B
CHECKLIST of
GOOD FUNDS CONTROL
PRACTICES
-------
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.
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.
Do Not Expect to be Bailed Out
Allowance Holders should never assume that additional resources or workyears will be reprogrammed to their
allowances if they exceed a resource ceiling.
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. Examples include: How funding documents are
processed within the office, 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.
APPENDIX-2520-B
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APPENDIX C
SUGGESTED
FCO
JOB QUALIFICATIONS
and TRAINING
-------
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
Principles of Federal Appropriations Law course
Federal Budget Process course
Federal Budget Execution course
Office of Budget's Basic Budget Execution course
Office of Acquisition and Management's Purchase Card training class
Administrative Control of Appropriated Funds course 1/
Basic computer applications for spreadsheets and writing
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.
APPENDIX-2520-C
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APPENDIX D
FREQUENTLY
ASKED QUESTIONS
(FAQs)
-------
BUDGET EXECUTION
FREQUENTLY ASKED QUESTIONS (FAQs)
INDEX
FAQ#:
REPROGRAMMINGS
TOPIC
A1.
A2.
A3.
A4.
A5.
A6.
A7.
A8.
A9.
A10.
A11.
A12.
A13.
A14.
A15.
A16.
A17.
CONTRACTS
B1.
B2.
B3.
GRANTS
C1.
C2.
C3.
BUDGET REPROGRAMMINGS TO BE APPROVED
"DEFACTO REPROGRAMMINGS"
EMERGENCY REPROGRAMMINGS
ENSURING THAT MY FUNDS ARE ISSUED AT THE RC LEVEL
ERROR MESSAGE "INSUFFICIENT RESOURCES"
FTE REPROGRAMMINGS
IFMS SUSF TABLE
JUSTIFICATIONS
LINE LIMITATION
LIST OF VALID PROGRAM RESULTS CODES (PRCs)
OPENING "BUDGET BUCKETS
RESPONSIBILITY CENTER (RC) LEVEL IFMS TABLES
RP VS AN RR REPROGRAMMING DOCUMENTS
(SALC) LEVEL IS NEGATIVE IN IFMS
STATUS OF A REPROGRAMMING DOCUMENT
TRANSFERRING RESOURCES TO ANOTHER RPIO
VIEWING "HARD ERROR" REPROGRAMMING MESSAGES
MOVING FUNDS BETWEEN CONTRACT OPTIONS
OVERRUNS
SPLIT-FUNDING OBLIGATIONS
DIRECT IMPLEMENTATION
"IN-KIND" GRANTS
MOVING FUNDS BETWEEN GRANT BUDGET PERIODS
TRAVEL
D1.
D2.
D3.
D4.
GENERAL
E1.
E2.
E3.
E4.
E5.
E6.
E7.
INVITATIONAL TRAVEL ORDERS
PROCUREMENTS FOR LODGING AND SUBSISTENCE
SITE-SPECIFIC TRAVEL
TRAVEL OR TRAINING FOR THE NEXT FISCAL YEAR
ADMINISTRATIVE VS. PROGRAMMATIC WCF
ITEMS PROVIDED TO THE PUBLIC
OPEN COMMITMENTS FUNDED WITH 2 YEAR APPROPRIATED FUNDS
SELECTING SUB-OBJECT CLASS CODES
SUB-OBJECT CLASS CODE FOR IPAS
VIEWING DEOBLIGATIONS IN IFMS
VIEWING YEAR-END CARRYOVER BALANCES IN IFMS
APPENDIX-2520-D-1
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REPROGRAMMINGS
A1. How long does it take budget reprogrammings to be approved?
Once a reprogramming document is entered into IFMS 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, or3) if there
are policy issues or data entry errors. Recertification requests and requests for additional
administrative ortravel 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 recommitting 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.
AS. I entered a reprogramming and received an error message stating there are insufficient 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
APPENDIX-2520-D-2
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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 have been processed and are
no longer on SUSP, 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) oroffice(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 howto 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. 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 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 BOC or PRO).
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
APPENDIX-2520-D-3
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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 payroll was processed correctly.
If it is correct, you will need to either recommit or deobligate some other item in your allowance or
reprogram 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 (SUSP) and we strongly encourage you to check SUSP before
calling the OB. SUSP 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. [NOTE: except for the absence of "to" and
"from" lines, when appropriate, a "hard error" message should always be corrected before forwarding
your document to OB for review/approval. OB cannot process your document through IFMS unless
these errors are resolved.]
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:
APPENDIX-2520-D-4
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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).
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).
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
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periods?
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.
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 travel. For
example, EPA may pay for travel expenses of guests of Agency employees at awards ceremonies as a
"necessary expense" under the Government Employees Incentive Award Act, 5 USC4501-4507. Theguests
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 25508, 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 fortraining, yes For meetings and conference subsistence, charging to travel 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?
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. Travel 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
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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).
GENERAL
E1. 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(l)(3) which provides many examples of
"Administrative" vs "Programmatic" costs by object class series. Some ADP equipment
examples include:
ADMINISTRATIVE
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. DocketSys., Pest. ProductInfo. Sys., CERCLIS, etc.
E2. 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. GAO 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
(funds control manual).
E3. 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)?
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The commitment reversal process will not affect commitments funded with two-year appropriated
funds. Those commitments will remain open in IFMS until obligated or the appropriation expires
which ever comes first.
E4. 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).
E5. What is the proper sub-object class code for IPAs?
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 fI PA) 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.
E6. 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.
E7. 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.
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