Issues of appropriation law, or, synonymously, federal fiscal law, often seem distant and too esoteric for the average contract specialist. This somewhat willful ignorance is unfortunate and some agencies have begun to impose minimal training requirements on the entire contract team to include GS-1102s and those holding COR delegations.
In some cases, it’s been extended to those who only hold very limited P-card responsibilities. If you touch federal funds, regardless of amount, it’s important that you understand the high responsibility that goes with that privilege.
Power of the Purse
The framers vested Congress with the power of the purse. Specifically the Constitution says that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”
James Madison explained that the framers did so for two primary reasons. The first ensured that the government remained directly accountable to the will of the people. He stated. “power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.”
Second, the power of the purse gives Congress a significant “check” within the system of “checks and balances” defined throughout the Constitution. Congressional power in this area places a limitation on the power of the other branches, thereby allowing it to reduce “all the overgrown prerogatives of the other branches of government.”
Affirmative Actions on Funding
Each appropriation requires the affirmative action of Congress, allowing no implication or inference about the available funding. Congress has further affirmed this power by enacting implementing statutes that include the annual appropriation acts, authorization acts, permanent law, and procedural processes.
Even organic legislation that creates offices in other branches can have significant implementation ramifications. Interestingly, Congress has authorized the creation of an office with specific functions and then failed to provide its funding, effectively terminating the office’s function.
We saw this for several years with the Cost Accounting Standards Board. It was subsequently re-funded and resumed its functions.
What About GAO?
All of this is background for the real purpose of this post. What is the role and purpose of GAO?
Congress created the General Accounting Office in 1921. In 2004 it changed the name to the Government Accountability Office. It is an arm of Congress and has no direct authority or control over the executive agencies.
GAO is assigned certain oversight activities, but does not have the ability to enforce its opinions and decisions on the executive branch agencies. Congress created GAO “because it believed that it ‘needed an officer, responsible to it alone, to check upon the application of public funds in accordance with appropriations.’”
The Budget and Accounting Act vested GAO with the authority to “investigate, at the seat of government or elsewhere, all matters relating to the receipt, disbursement, and application of public funds . . . .” In addition, this Act transferred from the Comptroller of the Treasury to the Comptroller General the authority to issue legal decisions to executive branch officials concerning the use and availability of public money.
GAO’s expertise with regard to fiscal matters is widely understood and respected throughout the government. Article III courts frequently cite to GAO’s legal decisions and the “Red Book” (considered the fiscal law “bible”) is frequently consulted in court decisions involving appropriations law. Even the Supreme Court has cited GAO’s “Red Book” in support of its positions on appropriations law matters.
The Red Book
The “Red Book” is a seven volume publication that addresses an extremely broad range of fiscal matters. You could learn a great deal by reading it, but seven volumes would take a bit of time. It is still an outstanding reference, as is the DOD Jag School Fiscal Law Deskbook. CCS has read it, and the desk book, and stays current on the many appropriation law decisions issued by GAO. You can always call on us for training or expertise in this arena.
The only authority GAO has over the activities of the other branches is the tried and true method we all used with our siblings. If they did not obey our every command, we would strongly threaten with the “I’m telling!” defense.
That is exactly what GAO does. It reports to Congress and identifies those instances when it believes some aspect of the funding rules has been ignored or forgotten.
Congress will respond through investigations, and occasionally cutting the funding of an offending office or agency. GAO becomes the policeman and Congress becomes judge and jury.
There have recently been a number of instances when the Executive and Legislative branches have expressed different opinions on a particular matter. The Office of Management and Budget is somewhat of a GAO counterpart in the executive branch. The disagreements continue and further action from Congress is expected.
Fiscal Law Fundamentals
Until then, never forget that every dollar you spend must have been originally appropriated by Congress. When doing so Congress always limits the funds by time, amount, and purpose. Exceeding any of those (in fact merely authorizing things that will exceed those limits) is a violation of the Anti-Deficiency Act.
Seven volumes of material and an extensive desk book of material cannot be covered in a single blog post. Hopefully this one sets the stage for more in-depth commentary on this important part of the contracting function – obtaining certified funds and properly obligating them in accordance with their time, purpose, and amount limitations.