Fiscal Law Principles Flashcards

Which of the following is NOT a required element of the three-part Necessary Expense Doctrine test?

Answer: The expense must be the lowest-cost alternative available

The Necessary Expense Doctrine requires that an expense be (1) necessary and incident to the purpose, (2) not prohibited by law, and (3) not otherwise provided for — cost is not a formal element of the test.

What is the consequence when an appropriation account reaches its 'cancellation' date after the five-year expired period?

Answer: The remaining unobligated and unliquidated balances are permanently canceled and returned to the Treasury

After five years in expired status, any remaining balances (both unobligated and unliquidated) are canceled and returned to the Treasury, and the account ceases to exist.

A DoD component transfers funds from one appropriation account to another without statutory authority. This action violates which fiscal law?

Answer: 31 U.S.C. § 1301 (Purpose Statute), because transfers require specific statutory authority

Inter-account transfers require specific statutory authority; without it, using funds from one account for another account's purposes violates the Purpose Statute.

Which statement correctly describes the relationship between an authorization act and an appropriations act?

Answer: An authorization act establishes a program and may set spending limits, while an appropriations act actually provides the budget authority to spend

Authorization acts create or continue programs and may authorize spending levels, but only appropriations acts actually provide the legal authority (budget authority) to incur obligations.

Under fiscal law, what is the primary distinction between a 'transfer' and a 'reprogramming' of funds?

Answer: A transfer moves funds between separate appropriation accounts; reprogramming shifts funds within a single appropriation account

Transfers cross appropriation account lines and always require statutory authority, while reprogrammings are within-account realignments subject to congressional notification thresholds.

A DoD financial manager discovers that a contractor was paid $80,000 from the wrong appropriation account due to a coding error. What is the required corrective action?

Answer: Correct the accounting records and reimburse the proper appropriation from the account that was erroneously charged

When funds are disbursed from the wrong account, the error must be corrected by adjusting accounting records and transferring the charge to the proper appropriation to maintain purpose compliance.

Which of the following scenarios correctly applies the 'administrative subdivision of funds' (allotment) concept?

Answer: A comptroller divides an Army O&M apportionment into separate allotments for each major command to control spending

Allotments are internal agency subdivisions of apportioned funds granted to subordinate managers to incur obligations within defined limits, creating an additional internal control below the apportionment level.