CDFM Fiscal Law Principles 4 — Questions and Answers
Question 1: What is the legal effect of an apportionment issued by the Office of Management and Budget (OMB)?
- It limits the amount of an appropriation an agency may obligate during a specific time period (Correct answer)
- It permanently rescinds a portion of a congressional appropriation
- It transfers budget authority between federal agencies
- It authorizes agencies to obligate funds in advance of an appropriation
Correct answer: It limits the amount of an appropriation an agency may obligate during a specific time period
An OMB apportionment divides an appropriation into amounts available for obligation by time period, program, or project, creating a binding ceiling below the appropriated amount.
Question 2: A DoD official knowingly violates the Antideficiency Act by obligating funds in excess of an apportionment. What is the maximum criminal penalty?
- Two years imprisonment and a fine (Correct answer)
- Ten years imprisonment and a fine
- Administrative reprimand only
- Civil monetary penalty of up to $10,000
Correct answer: Two years imprisonment and a fine
Willful violations of the Antideficiency Act (31 U.S.C. § 1350) carry a criminal penalty of up to two years imprisonment and a fine.
Question 3: Which document provides the legal basis for an agency to incur obligations by allocating budget authority to a program or project?
- Allotment (Correct answer)
- Apportionment
- Appropriation Act
- Reprogramming Action
Correct answer: Allotment
An allotment is an authorization granted by the head of an agency to subordinate officials to incur obligations within a specified amount from an apportioned appropriation.
Question 4: Under what circumstances may DoD accept voluntary services without violating the Antideficiency Act?
- Only when a specific statute authorizes acceptance of such services (Correct answer)
- Whenever the government's workload exceeds its staffing capacity
- When approved by the agency head and the comptroller
- Voluntary services are never permitted under any circumstances
Correct answer: Only when a specific statute authorizes acceptance of such services
31 U.S.C. § 1342 prohibits accepting voluntary services except as authorized by law, such as specific statutes permitting volunteer programs or emergency situations.
Question 5: A multi-year contract for aircraft maintenance spans FY2026 through FY2028. Which appropriation structure is most appropriate for funding this contract?
- Fund each year's services with the appropriation current at the time services are rendered (Correct answer)
- Obligate the full multi-year amount from FY2026 O&M funds in year one
- Use a no-year appropriation for the entire contract period
- Split fund the contract equally across three fiscal years regardless of when services occur
Correct answer: Fund each year's services with the appropriation current at the time services are rendered
For severable services contracts, each fiscal year's portion must be funded by the appropriation current at the time those services are received, consistent with the Bona Fide Needs Rule.
Question 6: The GAO's 'over a fiscal year' exception to the Bona Fide Needs Rule permits which of the following?
- Using current-year funds for a contract that crosses into the next fiscal year when the contract term is less than 12 months (Correct answer)
- Obligating two fiscal years' worth of funds in a single award
- Purchasing supplies for delivery in the next fiscal year when current-year prices are lower
- Deferring payment of current-year obligations into the next fiscal year
Correct answer: Using current-year funds for a contract that crosses into the next fiscal year when the contract term is less than 12 months
GAO allows a contract period to span a fiscal year end when the total contract term is 12 months or less and the need genuinely arose in the current year.
Question 7: Which of the following best describes 'reprogramming' in the DoD budget context?
- Shifting funds within an appropriation account to use them for a different program or purpose than originally planned, often requiring congressional notification (Correct answer)
- Transferring funds between two separate appropriation accounts
- Requesting additional funds from Congress through a supplemental appropriation
- Returning unobligated balances to the Treasury before fiscal year end
Correct answer: Shifting funds within an appropriation account to use them for a different program or purpose than originally planned, often requiring congressional notification
Reprogramming moves funds within an appropriation account and may require prior approval or notification of congressional defense committees depending on thresholds.
CDFM Fiscal Law Principles 4
What is the legal effect of an apportionment issued by the Office of Management and Budget (OMB)?