Fiscal Law Test Questions
with Correct Answers
Fiscal Law - ANSWER Body of law governing use of federal funds
Fiscal Year - ANSWER 1 October ‐ 30 September
Period of Availability - ANSWER Most appropriations available for obligation for
limited time period
Funds not obligated in timely manner generally expire
Obligation - ANSWER Transaction legally binding the government to make
payment
E.g., place an order, award a contract, receive services
Budget Authority - ANSWER Federal law provides to incur obligations up to
specified amount
National Defense Authorization Act (NDAA) - ANSWER Authorizes programs, but
doesn't provide obligation authority
E.g., end strength; DoD FM Certification Program; government
lodging program (i.e., Integrated Lodging Program)
Appropriation Act - ANSWER Statutory authorization "to incur obligations and
make payments out
of the Treasury for specified purposes
Continuing Resolution Authority - ANSWER In the absence of a regular
appropriations act ‐ provides budget
authority to continue operations
Affirmative Authority - ANSWER "The established rule is that the expenditure of
public
funds is proper only when authorized by Congress, not
that public funds may be expended unless prohibited by Congress.
‐ United States v. MacCollom,
426 U.S. 317, 321 (1976)L
Governed by:
• The U.S. Constitution
• Legislative Authorization and Appropriations Acts
• Judicial Court Rulings and Comptroller General decisions
, Purpose - ANSWER "Appropriations shall be applied only to the objects
for which the appropriations were made except as
otherwise provided by law."
31 U.S.C. 1301(a)
Three part expenditure test ...
Must be for a statutory purpose or necessary/
incident to the general purpose of the appropriation
Not prohibited by law
Not otherwise provided for in another appropriation
Purpose - ANSWER Necessary/incident to general purpose of the
appropriation...
• Congress can't list everything....so agencies have
reasonable discretion...
• Must be reasonably necessary
• Materially contribute to mission accomplishment?
• Or is it nice to have?
• Doesn't have to be only or best way
• Determinations are fact, agency, and purpose specific
Typical Questionable Expenses for Purpose - ANSWER • Clothing
• Food
‐Exceptions
‐Formal Meetings and Conferences
‐Training
‐Award Ceremonies
• Entertainment
• Decorations
• Business Cards
• Fines and Penalties
• License and Certificates
• Miscellaneous Personal Expenses
Fiscal Law Analysis - ANSWER Purpose, time, and amount
Time - ANSWER Agencies may not obligate in advance of...
An enacted appropriation
Receipt of funds from higher headquarters
Is appropriation available...
When goods/services needed?
Obligation made or adjusted?
Bona Fide Need Rule ‐ Service Contracts
Bona Fide Need Rule - ANSWER • Services are the bona fide need of the fiscal
year in which
they are performed
with Correct Answers
Fiscal Law - ANSWER Body of law governing use of federal funds
Fiscal Year - ANSWER 1 October ‐ 30 September
Period of Availability - ANSWER Most appropriations available for obligation for
limited time period
Funds not obligated in timely manner generally expire
Obligation - ANSWER Transaction legally binding the government to make
payment
E.g., place an order, award a contract, receive services
Budget Authority - ANSWER Federal law provides to incur obligations up to
specified amount
National Defense Authorization Act (NDAA) - ANSWER Authorizes programs, but
doesn't provide obligation authority
E.g., end strength; DoD FM Certification Program; government
lodging program (i.e., Integrated Lodging Program)
Appropriation Act - ANSWER Statutory authorization "to incur obligations and
make payments out
of the Treasury for specified purposes
Continuing Resolution Authority - ANSWER In the absence of a regular
appropriations act ‐ provides budget
authority to continue operations
Affirmative Authority - ANSWER "The established rule is that the expenditure of
public
funds is proper only when authorized by Congress, not
that public funds may be expended unless prohibited by Congress.
‐ United States v. MacCollom,
426 U.S. 317, 321 (1976)L
Governed by:
• The U.S. Constitution
• Legislative Authorization and Appropriations Acts
• Judicial Court Rulings and Comptroller General decisions
, Purpose - ANSWER "Appropriations shall be applied only to the objects
for which the appropriations were made except as
otherwise provided by law."
31 U.S.C. 1301(a)
Three part expenditure test ...
Must be for a statutory purpose or necessary/
incident to the general purpose of the appropriation
Not prohibited by law
Not otherwise provided for in another appropriation
Purpose - ANSWER Necessary/incident to general purpose of the
appropriation...
• Congress can't list everything....so agencies have
reasonable discretion...
• Must be reasonably necessary
• Materially contribute to mission accomplishment?
• Or is it nice to have?
• Doesn't have to be only or best way
• Determinations are fact, agency, and purpose specific
Typical Questionable Expenses for Purpose - ANSWER • Clothing
• Food
‐Exceptions
‐Formal Meetings and Conferences
‐Training
‐Award Ceremonies
• Entertainment
• Decorations
• Business Cards
• Fines and Penalties
• License and Certificates
• Miscellaneous Personal Expenses
Fiscal Law Analysis - ANSWER Purpose, time, and amount
Time - ANSWER Agencies may not obligate in advance of...
An enacted appropriation
Receipt of funds from higher headquarters
Is appropriation available...
When goods/services needed?
Obligation made or adjusted?
Bona Fide Need Rule ‐ Service Contracts
Bona Fide Need Rule - ANSWER • Services are the bona fide need of the fiscal
year in which
they are performed
