Fiscal Law Principles Flashcards

Under the Economy Act, what is a prerequisite for a DoD agency to order goods or services from another federal agency?

Answer: It must be more economical or in the best interest of the government, and the receiving agency must have authority to provide the service

The Economy Act (31 U.S.C. § 1535) requires a determination that the order is in the best interest of the government and that the servicing agency has authority to provide the goods or services.

Which type of DoD appropriation is specifically authorized for acquiring major weapons systems and long-lead procurement items?

Answer: Procurement appropriations

Procurement appropriations fund the acquisition of major end items, systems, and investment-level equipment for DoD.

What happens to annual appropriation funds that were properly obligated before their expiration date but not yet disbursed?

Answer: They remain available for disbursement for five additional years in expired status

After the period of availability for obligation ends, funds enter a five-year expired phase during which they remain available only to adjust or liquidate prior valid obligations.

A program manager wants to use RDT&E appropriations to purchase 500 units of a fully developed, production-ready component. This would likely violate which principle?

Answer: The Purpose Statute, because RDT&E funds are restricted to research and development activities

RDT&E funds are appropriated for research, development, test, and evaluation activities, not for production-quantity procurement of completed items.

Which of the following is an example of a lawful augmentation of an appropriation?

Answer: Retaining and using proceeds from the sale of government property when specifically authorized by statute

Augmentation is lawful only when a specific statute authorizes the agency to retain and use receipts or collections to supplement its appropriation.

In DoD fiscal law, what is the significance of a 'valid obligation'?

Answer: It legally commits appropriated funds and must be supported by a written, binding agreement

A valid obligation requires a binding commitment supported by documentary evidence such as a contract, order, or written agreement that creates a legal liability for the government.

Which fiscal law concept prevents a DoD agency from stockpiling consumable supplies beyond its immediate and foreseeable needs using annual O&M funds?

Answer: Bona Fide Needs Rule

The Bona Fide Needs Rule prohibits using current-year funds to purchase supplies in quantities beyond what is genuinely needed in the current fiscal year.