Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

0301 Overview

This policy establishes the Department of Veterans Affairs’ (VA) system of administrative control of funds required by the Anti-Deficiency Act (ADA) and the Office of Management and Budget (OMB) Circular No. A-11, Preparation, Submission, and Execution of the Budget.

Key items in this chapter address how VA will:

• Ensure programs are executed, and funds are expended, in accordance with authorizing and appropriations acts;
• Prescribe a system for positive administrative control of funds designed to restrict obligations and expenditures (disbursements) to the amount available in each appropriation or fund account;
• Restrict both obligations and expenditures from each appropriation or fund account, to the lower of the amount apportioned by OMB or the amount available for obligation or expenditure in the appropriation or fund account;
• Limit the ability to obligate or expend funds in excess of available amounts through system functionality. These limits can exist at the appropriation or fund account, OMB apportionment or reapportionment, allotment or suballotment level, or any statutory limitation or subdivision of funds;
• Enable the Secretary of Veterans Affairs to identify the person responsible for any obligation or expenditure exceeding the amount available in the appropriation or fund account, the OMB apportionment or reapportionment, the allotment or suballotments made by the agency, any statutory limitations, and any other administrative subdivision of funds made by the agency.

0302 Revisions

See changelog.

0303 Definitions

Allotments – Subdivisions of apportionment authorities that are made by VA to the heads of administrations or offices. These are level three of funds control. As directed by 31 U.S.C. 1514, allotments will be issued at the highest level that is practical and consistent with effective and efficient management; accordingly, allottees shall not be financed from more than one allotment for each appropriation or fund account. Allotments are the formal mechanism by which VA assigns responsibility for compliance with VA’s administrative control of funds and the ADA. VA establishes the legal limitations under the ADA at the allotment level.

Allowances and allocations – Subdivisions of suballotments. These are levels five and lower of funds control.

Apportionments – Distributions made by OMB of amounts available for obligation in an appropriation or fund account into amounts available for specified time periods, programs, activities, projects, objects, or any combination of these. The apportioned amount limits the obligations that may be incurred. An apportionment may be further subdivided by VA to an Administration or Staff Office. These are level two of funds control.

Appropriations – Provisions of law enacted by Congress, not necessarily in an appropriations act, authorizing the federal agency to incur obligations and make payments for a given purpose. Usually, but not always, an appropriation provides budget authority. These are level one of funds control.

Expenditure Transfers – Transfers between appropriation and fund accounts used when the transaction relates to the purchase of goods and services or otherwise benefits the transferring account. Expenditure transfers are recorded as obligations/outlays in the transferring account and an offsetting collection in the receiving account if the transaction relates to the purchase of goods or services, or otherwise benefits the transferring account. If the receiving account is a general fund appropriation account or revolving fund account, the offsetting collection is credited to the appropriation or fund account. If the receiving account is a special fund or trust account, the offsetting collection is usually credited to a receipt account of the fund.

Financial Management Allowance (FMA) Memo – A document identifying the authority for budgetary resources made available through an apportionment, and the allotment of resources from the Department to the Administration or Staff Office, application of those resources for obligations, and the funds control totals for VA’s accounting systems.

Funds Control Levels – The following levels of control are referred to throughout this policy and address requirements detailed in Appendix H, “A Checklist for Funds Control Regulations,” of OMB’s Circular A-11 Guidance.

• Level One:                 Appropriation
• Level Two:                 Apportionment
• Level Three:              Allotment
• Level Four:                Suballotment
• Level Five:                 Allowance

Non-expenditure Transfers – Transfers between appropriations and funds accounts that do not represent outlays/payments for goods and services received or to be received. These transfers only serve to adjust the amounts available in the accounts for making payments.

Other Key Officials – For the purposes of this policy, Other Key Officials are defined in Volume I, Chapter 1 – VA Financial and Accounting Policy Overview.

Reapportionments – Revisions of previous apportionments approved by OMB for an appropriation or fund account. This approved revision would ordinarily cover the same time periods, program activities, projects, objects, or any other combination of these covered in the original apportionment.

Reimbursements – When authorized by law, amounts collected for materials or services furnished to the public or other government accounts. For accounting purposes, earned reimbursements are also known as revenues.

Reprogramming – Shifting funds within an appropriation or fund account to use them for purposes other than those contemplated at the time of appropriation; it is the shifting of funds from one budget object class to another within an appropriation or from one program activity to another. Specific statutory authority may be required for reprogramming of funds and should be referenced on reprogramming documentation.

Resource Distributions – Distributions of funds beneath the level of allotments and suballotments to the various budget activities, sub-activities, or projects within the limitations of apportionments or reapportionments approved by OMB.

Revolving Funds – Funds established by Congress to finance a cycle of businesslike operations through amounts received by the fund. A revolving fund charges for the sale of products or services and uses the proceeds to finance its spending, usually on a self- sustaining basis.

Suballotments – Subdivisions of allotments.

Suballowances – Subdivisions of allowance.

Standard Form (SF) 132, Apportionment and Reapportionment Schedules – Standard form used to request apportionments from OMB and to apportion funds to VA.

SF 133, Report on Budget Execution and Budgetary Resources – Standard form used to:

• Fulfill the requirement in 31 U.S.C. 1511–1514 that the President review Federal expenditures at least four times a year;
• Fulfill the requirement in 31 U.S.C. 1554 to report on unliquidated obligations, unobligated balances, canceled balances, and adjustments made to appropriation accounts during the completed fiscal year;
• Allow the monitoring of the status of funds that were apportioned on the SF-132 Apportionment and Reapportionment Schedule and funds that were not apportioned;
• Provide a consistent presentation of information across programs within each agency, and across agencies, which helps program, budget, and accounting staffs to communicate;
• Provide historical reference that can be used to help prepare the President’s Budget, program operating plans, and spend-out rate estimates;
• Provide a basis to determine obligation patterns when programs are required to operate under a continuing resolution; and
• Tie an agency’s financial statements to its budget execution. The compilation of an agency’s SF-133s should generally agree with an agency’s Statement of Budgetary Resources.

Transfer of Disbursement Authority (TDA) – VA Form 4-4564-6, Transfer of Disbursing Authority, is a legal document transferring the VA Secretary’s authority to disburse budgetary resources to the administrations and staff offices. It identifies the total amount and specific funds authorized to receive the funding allotment and incur obligations. A Transfer of Disbursement Authority authorizes level three, allotment, funds control.

Transfers – Shifting of all or part of budget authority in one appropriation or fund account to another. Agencies may transfer budget authority only as specifically authorized by law. The nature of the transfer determines whether the transaction is treated as an expenditure or a non-expenditure transfer.

Trust Funds – Accounts designated as “trust funds” by law, regardless of any other meaning of the term “trust funds.” These accounts are usually a receipt, expenditure, or revolving fund account.

Warrants – Official documents issued by the Secretary of the Treasury, pursuant to law, that establish the amount of appropriations approved by Congress that can be obligated and disbursed.

0304 Roles and Responsibilities

VA Secretary or designee is responsible for establishing a system of administrative control of funds, proper funds control, and reporting violations of such controls or the ADA. The VA Secretary is responsible for Level One: Appropriation Funds Control in VA.

Assistant Secretary of Management/Chief Financial Officer (VA CFO) or designee is responsible for monitoring execution and establishing reporting to ensure that an ADA violation is detected when it occurs; that VA takes appropriate corrective actions; reports violations to responsible VA officials, OMB, the President, the Comptroller General, the Congress, and the Government Accountability Office (GAO), if required; and reports on any administrative discipline, if taken. The VA CFO is responsible for Level two: Apportionment Funds Control in VA. The VA CFO has delegated responsibility for funds distribution to the VA Deputy Assistant Secretary for Budget.

VA Deputy Assistant Secretary for Budget (DAS for Budget) is responsible for:

• Developing the apportionment request in accordance with appropriations law and submitting the request to OMB in accordance with section 120.23 of OMB Circular A-11;
• Acting on behalf of the VA CFO, distributing and withdrawing obligating authority through VA Form 4-4564-6, Transfer of Disbursing Authority (TDA) for each of the Administrations and Staff Offices after receiving an approved apportionment from OMB;
• Under a Continuing Resolution (CR), issuing an OMB- approved CR Control Table for all discretionary funds impacted by CR Controls. TDAs are not issued for discretionary funds impacted by CRs;
• Providing guidance and support to VA’s Administrations and Staff Offices on matters related to budget formulation and execution;
• Monitoring VA’s budget execution process;
• Reviewing the appropriation detail to support the Office of Finance warrant request process;
• Providing authorizing documents supporting levels one, two, and three funds control entries in VA’s accounting system;
• Reviewing Funds Control Entries in VA’s accounting system; and
• Coordinating the reporting requirements for an ADA Violation once identified.

Under Secretaries, Assistant Secretaries, and Other Key Officials are responsible for:

• Serving as the allotment recipient (funds control level three) by receiving the TDA from the Deputy Assistant Secretary (DAS) for Budget or officers reporting to the DAS;
• Ensuring funds allotted to them are obligated and expended in accordance with applicable laws and policies, including the limitations of apportionments and reapportionments approved by OMB and allotted by the Deputy Assistant Secretary (DAS) for Budget or officers reporting to the DAS;
• Designating an Allotment Manager to directly supervise the execution of funds received by the TDA and further distribute funds to budget execution officers. Serving as the allotment holder (funds control level three) by receiving the TDA from the DAS for Budget or officers reporting to the DAS for Budget;

Office and Administration Chief Financial Officers, Budget Officers and others designated as Allotment Managers are responsible for:

• Directly supervising the execution of funds provided by the TDA to the allotment recipient and further delegated to the Allotment Manager.
• Further distributing funds to as needed to meet mission and organizational requirements.
• Designating appropriate officials to be responsible for budget execution for the subdivision of funds below the allotment level and the control of obligations within the amounts of such subdivisions. This responsibility shall be clearly defined, and the affected individuals shall be appropriately notified in writing of the extent of their responsibility;
• Ensuring that further distribution of funds to beyond the allotment level to the various budget activities or projects will not exceed the allotted amount;
• Determining when transfers between such activities or projects require submission of a reprogramming notification letter to OMB and the Appropriations Committees;
• Ensuring that designated officials are charged with individual responsibility for any over-obligation or any expenditure in excess of appropriations and apportionments;
• Developing, implementing and enforcing adequate funds control policies; and
• Providing training on implementation of proper funds controls, especially for individuals having key roles in the funds control process such as well as individuals involved in the processing of obligations, and expenditures.

Office of General Counsel (OGC) is responsible for providing advice to the Secretary if an ADA violation occurs.

Financial Service Center (FSC) is responsible for processing funds control entries in VA’s accounting system and ensuring they comply with authorizing documents for appropriation, apportionment, allotment and suballotment levels. FSC also posts completed warrants and non-expenditure transfers.

0305 Policies

030501 General Policies

1. VA will adhere to the requirements of OMB Circular A-11, Preparation, Submission, and Execution of the Budget. Modifications to this policy may be made, with collaboration and approval from OMB, as individual legislation is issued for special funds.
2. This funds control policy applies to all funds, including revolving funds, management funds, and trust funds that may not be subject to apportionment.
3. VA will follow basic funds control principles and concepts in establishing a robust funds control system that will allow for the proper monitoring and execution of budgetary funds in accordance with established laws and regulations.
4. VA will establish at a minimum three levels of reporting for funds control for ADA violations: Appropriation (level one), Apportionment (level two), and Allotment (level three).
5. VA will establish a funds control hierarchy that holds individuals accountable. Specifically, controls will be established to allow the executives identified below to exercise control over the budget execution process:
   • Funds Control Level 1 – Appropriation
     Responsible Party – Secretary
   • Funds Control Level 2 – Apportionment
     Responsible party – VA CFO
   • Funds Control Level 3 – Allotment
     Responsible party – Undersecretary, Assistant Secretary, Other Key Official, further delegated and fixed to Allotment Manager (generally office or administration CFO)
   • Funds Control Level 4 – Suballotment
     Responsible party – As designated by Allotment Manager
   • Funds Control Level 5 – Allowance
     Responsible party – As designated by Allotment Manager
   • Funds Control Level 6 – Suballowance
     Responsible party – As designated by Allotment Manager
   • Funds Control Level 7 – Allocation
     Responsible party – As designated by Allotment Manager
   • Funds Control Level 7 – Suballocation
     Responsible party – As designated by Allotment Manager

6. VA CFO has designated to the Associate Deputy Assistant Secretary for Budget responsibility for funds distribution (i.e., apportionments, reapportionments and allotments.) The Associate Deputy Assistant Secretary for Budget may further delegate this responsibility to the Service Directors in the Office of Budget.
7. VA CFO has designated to the Allotment Managers the responsibility for obligating and expending funds within the allotted level for the purposes of the ADA. Although VA CFO has designated this responsibility, Under Secretaries, Assistant Secretaries, and Other Key Officials are still responsible for violations of the ADA.
8. VA will establish internal controls to ensure, at a minimum, that:
   • Expenditures and obligations will not exceed the amounts available in the appropriation, apportionment, allotment, or suballotment;
   • The reservation or commitment of funds is limited to the amounts available as determined by authorizing budget documents;
   • Obligations shall not occur before an appropriation is made or otherwise authorized by law;
   • Appropriations, apportionments, or Continuing Resolution (CR) funding shall be entered into the appropriate VA financial system within two business days of the appropriation or CR being signed into law to prevent possible ADA violations.
   • Allotments will be entered into the VA financial system within ten business days of receipt of the signed apportionment;
   • Staff are adequately trained and knowledgeable about the current status of funds, including the current year’s appropriation, apportionment, allotment, suballotment, allowance, and suballowance;
   • Approving and certifying officials have training in appropriations law and the budget process, OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control, and budget execution practices that may prevent violations of the ADA; and
   • Commitment and obligation tracking will be monitored via comparisons to the apportionment, allotment, suballotment, allowance, and suballowance on a fiscal year and quarterly basis. The tracking process must provide the ability to monitor the history of all new obligations and commitments from the establishment date forward.

030502 Apportionment Procedures

1. OB will submit apportionment and reapportionment requests to OMB in compliance with the amounts and specific provisions contained in appropriation acts, committee reports, and OMB Circular A-11.
2. VA will generate all apportionment requests, Continuing Resolution Funding Control Tables, and thirty-day automatic apportionment funding control tables.
3. Within ten days of the enactment of an appropriation, the DAS for Budget, or designee, will approve requests and submit to OMB for apportionment or reapportionment of appropriated and other funds available to VA.
4. In accordance with section 120.23 of OMB’s Circular A-11, VA will seek OMB approval of initial apportionments before the end of the current fiscal year, to ensure timely processing of initial apportionment requests the DAS for Budget, or designee, according to the timeline established by A-11.
5. VA will follow the process established by Section 120.41 of OMB Circular A-11 once a full-year appropriations Act is enacted, including the process for any 30-day automatic apportionment. Within five days of submitting apportionment or reapportionment requests following the enactment of appropriations law, OB will generate a 30-day automatic apportionment control sheet and route it for DAS for Budget, or designee, approval. The FSC will enter the 30-day automatic apportionment in VA’s accounting system. Financial Management Allowance and Transfer of Disbursement Authority documents are not required for funds control entries on automatically apportioned amounts.
6. When OMB approves a regular full year apportionment the FSC will enter the apportioned amounts in VA’s accounting system.
7. The FSC will make level one and two entries within two business days of receiving the approved apportionment. The FSC will provide documentation of VA’s accounting system entries (i.e., screenshots) to OB to validate that the entries were posted as requested.
8. When an apportionment occurs under a CR:
   1. OMB will issue a bulletin to automatically apportion amounts made available by CRs.
   2. Treasury will not issue a warrant, unless it is for a full-year CR; however, if desired, agencies may request a warrant (see Treasury Financial Manual I TFM2–2000, section 2025.20). Treasury may make exceptions to this policy if the CR extends beyond the second quarter of the fiscal year. Further Treasury guidance may be found on the United States Standard General Ledger (USSGL) website (http://www.fms.treas.gov/ussgl/index.html).
   3. OB will route a CR Funding Control Table for approval by the DAS for Budget, or designee, and submit it to OMB for approval. OB will deliver the OMB approved CR Control Table to the FSC.
   4. VA will request a reapportionment within ten days of enactment of the full- year appropriations act, even if the period covered by CR has not expired.

030503 Anticipated Budgetary Resources Already Enacted into Law

1. Apportionments will include estimated amounts of “anticipated” budgetary resources that are the result of laws already enacted. This reduces routine reapportionments of such amounts as they actually become available. Anticipated budgetary resources are presented on the SF 132, Apportionment and Reapportionment Schedule, and reported on the SF 133, Report on Budget Execution and Budgetary Resources. Examples of anticipated budget resources include:
   • Anticipated increases in budget authority (including anticipated transfers of new budget authority) into the account and anticipated decreases in budget authority from the account;
   • Anticipated transfers of unobligated balances into accounts and out of accounts;
   • Anticipated collections, reimbursements, and other income;
   • Anticipated expenditure transfers;
   • Anticipated recoveries of prior year paid and unpaid obligations; and
   • Anticipated permanent reductions.
2. Unrealized funds may not be allotted. Administrations and Staff Offices may not allot amounts anticipated to increase the total budgetary resources before the increase actually occurs. VA’s accounting systems maintain controls to allow the allotment and allowance of funds only when funds are realized.
3. If actual amounts realized within the fiscal year are less than anticipated, VA’s Financial Services Center will adjust any anticipated budgetary authority downward to the actual amount realized at fiscal year-end.
4. VA must not use resources realized in excess of OMB apportioned amounts, until an updated apportionment request has been processed through the DAS for Budget, or designee, and approved by OMB.

030504 Deficiency Apportionments

1. Apportionments that anticipate the need for a deficiency appropriation or a supplemental appropriation under 31 U.S.C. 1515, Authorized apportionments necessitating deficiency or supplemental appropriations, will be specifically identified on the apportionment request. To qualify as a deficiency apportionment, the request must be required by:
   1. Laws enacted subsequent to the transmittal of the President’s Budget for the year to Congress;
   2. Emergencies involving human life, the protection of property, or the immediate welfare of individuals; or
   3. A specific authorization by law.
2. When OMB approves a deficiency apportionment and transmits it to Congress, OMB is merely notifying Congress that funds appropriated to date are being obligated at a more rapid rate than previously anticipated. This notification does not guarantee that Congress will approve any part of any associated supplemental requests and does not authorize the use of any amounts not yet provided by Congress.

030505 Allotments and Suballotments

1. The use of allotments and suballotments is part of a Department’s system of administrative control of funds whose purpose is to keep obligations and expenditures from exceeding apportionments.
2. After an apportionment is recorded, OB will issue allotments (level three) to further distribute funds.
3. Administrations or Staff Offices will make level four funds control entries (i.e., suballotments), after entries for levels one through three are complete.
4. Restrictions:
   1. The sum of allotment amounts issued will not exceed the apportionment.
   2. The sum of suballotment amounts issued will not exceed the allotment amount.
   3. The amounts of allotments or suballotments will be fixed and will be changed only when authorized by the authority who initially issued the administrative subdivision of funds, or their designee.
   4. Congressional restrictions contained in appropriation acts will be enforced.
   5. Other restrictions imposed by VA with respect to an administrative subdivision of funds will be enforced.

030506 Allowances and Suballowances

1. Administrations and Staff Offices will request further distribution of funds to the allowance, and suballowance levels, in accordance with the VA’s account classification structures (ACS) aligned with VA’s Functional Operational Manual (FOM)
2. The FMA and TDA will be approved and sent to the FSC as a request for level three funds control entries (i.e., allotment entries), in VA’s accounting system.
3. The FSC will upload documentation and screenshots of FMS or iFAMS budget transactions to validate that the entries were made in VA’s accounting system. These entries will be recorded in FMS or iFAMS. OB will validate the entries after the FSC posts them.
4. Administration Budget Offices will initiate, distribute, and manage suballotments. In accordance with item 11 in Appendix H of OMB’s Circular A-11, these offices should develop and maintain procedures which fulfill those requirements.
5. Due to the high dollar amount of transactions associated with the allotment of funds, allotment transactions require two levels of approvals when posting in the accounting system.
6. Due to the high volume and low dollar amount, the suballotment, allowance and suballowance of funds only require one level of approval when posting in the accounting system.
7. Individuals responsible for entering transactions in the accounting system cannot approve the transaction for posting in the accounting system.
8. Individuals approving transactions in the accounting system cannot be the same individual that entered or initiated the transaction.

030507 Accounting and Funds Control System

1. Authorizing documents supporting the distribution of funds, such as the SF-132, FMA, and TDA will be uploaded into and approved in the Apportionment and Allotment Workflow System (AAWS).
2. Authorizing documents and entry instructions for Funds Control entries in VA’s accounting systems will be managed, uploaded, and approved within the AAWS.
3. VA’s accounting system will:
   • Record all financial transactions including funds distribution; obligations and expenditures; as well as anticipated, earned, and collected reimbursements; and
   • Be utilized to prepare financial reports that display obligations, expenditures and remaining unobligated balance.
4. The administrative control of funds system is integrated primarily within VA’s accounting system. Therefore, to the extent possible, transactions (budgetary and proprietary) must be recorded in VA’s accounting system accurately and on the same day as the transaction is executed. VA’s accounting system can perform status of funds accounting at the organization, project, or object (e.g., budget object code) level specified in the Appropriations Committees reports accompanying VA’s appropriation acts. See Appendix A (FMS) and Appendix B (iFAMS).
5. Administrations and Staff Offices may use various subsidiary systems to manage acquisitions and facilitate effective funds control. When such systems are used, they should be regularly reconciled to VA’s accounting system to ensure their reliability as a funds control mechanism.

030508 Anti-Deficiency Act (ADA)

1. The purpose of this section is to describe the VA policy for reviewing, reporting and acting on possible and confirmed violations of the Anti-Deficiency Act (ADA).
2. The ADA, prescribed in 31 U.S.C. 1341–1342, and 31 U.S.C. 1517, prohibits obligations and expenditures in excess of an appropriation or before an appropriation is available. The ADA also prohibits obligations and expenditures in excess of apportionments and the acceptance of voluntary services. 31 U.S.C. 1514, 1517 is the primary foundation for VA’s administrative control of funds.
3. Per OMB Circular A-11 section 150.2, the purpose of your agency’s funds control system is to:
   • Restrict both obligations and expenditures (also known as outlays or disbursements) from each appropriation or fund account to the lower of the amount apportioned by OMB or the amount available for obligation or expenditure in the appropriation or fund account.
   • Enable the head of your agency to identify the person responsible for any obligation or expenditure exceeding the amount available in the appropriation or fund account, the OMB apportionment or reapportionment, the allotment or suballotments made by your agency, any statutory limitations, and any other administrative subdivision of funds made by your agency.
4. The controls for purposes of the ADA are set at the allotment level by this VA funds control policy. An obligation or expenditure incurred in excess of any classification or limitation established below the allotment level, while potentially being subject to administrative discipline, if the circumstances warrant, does not in itself constitute an ADA violation. Where an over-obligation or over-expenditure at a lower limitation level causes the allotment to be exceeded, a violation of ADA will have occurred.
5. The ADA requires OMB, via delegation from the President, to apportion appropriated funds and other budgetary resources for all executive branch agencies (31 U.S.C. 1512, Apportionment and Reserves). The ADA also requires a system of administrative controls within each agency (31 U.S.C. 1514, Administrative and division of apportionments) and prohibits the following:
   • Making or authorizing an expenditure from, or creating or authorizing an
   • obligation under, any appropriation or fund in excess of amounts available in appropriation, apportionment, or allotment, unless specifically authorized by law (31 U.S.C. 1341(a)(1)(A), 31 U.S.C. 1517(a), and section 145.2 and Appendix H of OMB Circular A-11);
   • Entering into contracts that exceed each Administration’s and Staff Office’s allotments for the year (see examples under the Violations section below);
   • Purchasing services and merchandise before appropriations are enacted; and
   • Accepting voluntary or personal services unless authorized by law in cases of emergency involving the safety of human life or the protection of property (31 U.S.C. 1342).
6. VA will investigate potential violations of the ADA, determine if actual violations have occurred, report on any violation, and take corrective action on any such violations, as well as violations of other administrative subdivisions of funds that are not violations of the ADA. When a determination has been made that a violation of the ADA has occurred, the agency head must report all relevant facts, including a statement of actions taken, to OMB, the President, and Congress. A copy of the report is submitted to the GAO Comptroller General.
7. The Purpose Statute (31 U.S.C. 1301(a)) requires agencies to apply appropriations only to the objects for which the appropriations, continuing resolutions, or authorizations were made, except as otherwise provided by law.
8. The bona fide needs rule (31 U.S.C. 1502) requires that without statutory authority, fixed-period appropriations are only available for the genuine or bona fide needs arising in the period of availability for which they are made. Thus, an agency may not obligate current appropriations for a bona fide need of future fiscal years without statutory authority.
9. Federal employees who violate the ADA are subject to two types of sanctions: administrative and criminal. Employees may be subject to appropriate administrative discipline, including, when circumstances warrant, suspension from duty without pay or removal from office. In addition, employees may also be subject to fines, imprisonment, or both.
   1. Administrative Penalties – The law provides that any officer or employee of the United States who violates the prohibitions of 31 U.S.C. 1341(a), 1342, or 1517(a) will be subject to appropriate administrative penalties. Administrative penalties may consist of:
      • A letter of reprimand or censure for the official personnel record of the officer or employee;
      • An unsatisfactory performance rating;
      • Transfer to another position;
      • Suspension from duty without pay; or
      • Removal from office.
   2. Criminal Penalties – The law provides that any officer or employee of the United States who knowingly and willfully violates the prohibitions shall:
      • Be fined not more than $5,000; and
      • Imprisoned for not more than two years, or both.
10. Corrective action and administrative discipline will also be taken, as needed, to correct and prevent other violations of administrative subdivision of funds that are not violations of the ADA. Supervisors may consider a range of consequences when direct violations of regulations or policy occur. Disciplinary actions, if taken, will be based upon the circumstances surrounding each instance and will be designed to ensure that the violations are not repeated. Disciplinary actions may include:
    • Counseling;
    • Refresher Training;
    • Revocation of authority;
    • Suspension from duty (requires legal review); or
    • Removal from duty (requires legal review).
11. Reporting Violations – Any individual who knows of a possible ADA violation must report it. Even though VA may take subsequent actions to correct the cause of a substantiated violation, it does not eliminate that violation, and it still must be reported. VA will report any ADA violation to the President, through the OMB Director; the Congress; and the Comptroller General. VA will consult with OMB for violations involving the Purpose Statute (31 USC 1301) or a funding restriction in an Act other than an appropriations Act. In preparing ADA violation reports, VA will consult with VA’s OMB representative and submit all requirements for the report.
12. The process for reporting ADA violations is:
    1. Once an employee identifies a potential ADA violation, the employee must notify the local fiscal officer in charge within ten business days. Administration and Staff Office employees will notify their leadership.
    2. Within 20 business days of being notified by the employee of the potential violation, the local fiscal officer or member of leadership must notify the Administration or Office of Information and Technology (OIT) CFO and their OB point of contact. Staff Offices and Staff leadership will notify their OB point of contact.
    3. Within 120 business days after receiving notification, the Administration or OIT CFO’s office must conduct a review in coordination with OB and submit a preliminary report on the potential violation that includes all information listed in OMB Circular A-11 Section 145.7, How do I report a violation? When necessary, OB will seek technical assistance from OMB upon consultation with the Administration or OIT CFO’s office. The preliminary report is submitted to the Administration’s CFO or OIT CFO, respectively, and OB. All offices will coordinate with their OB point of contact when drafting and submit their preliminary report to OB within 120 days.
    4. After reviewing the office’s preliminary report, the OB will submit a memo with their recommendation within 20 business days to the VA CFO, regardless of the initial determination. The memorandum must request an evaluation of the potential violation by the VA CFO and OGC. The memorandum must also include the reason for the initial determination and an enclosed copy of the preliminary report.
    5. After reviewing the memorandum and preliminary report, the VA CFO, with guidance from OGC, will determine if the potential violation is substantiated. If the violation has been substantiated by the VA CFO and confirmed by OGC, the report is forwarded to the Secretary for final approval. If the violation has not been substantiated, the case is closed, and no further action is required.
    6. Once the Secretary substantiates that a violation of the ADA occurred, the substantiated violation must be reported by letter, signed by the Secretary, to the President, through OMB, to Congress, and GAO. OB will draft and transmit all ADA violation letters following OMB Circular A-11, Section 145.7.
    7. See Appendix C to this chapter for additional clarification.

0306 Authorities and References

• United States Code (U.S.C.)
  • 2 U.S.C. § 681-688, Impoundment Control
  • 31 U.S.C. § 1101, Definitions
  • 31 U.S.C. § 1104, Budget and appropriations authority of the President
  • 31 U.S.C. § 1105, Budget contents and submission to Congress
  • 31 U.S.C. § 1106, Supplemental budget estimates and changes
  • 31 U.S.C. § 1107, Deficiency and supplemental appropriations
  • 31 U.S.C. § 1108, Preparation and submission of appropriations requests to the President
  • 31 U.S.C. § 1112, Fiscal, budget, and program information
  • 31 U.S.C. § 1341, Limitations on expending and obligating amounts
  • 31 U.S.C. § 1342, Limitation on voluntary services
  • 31 U.S.C. § 1349, Adverse personnel actions
  • 31 U.S.C. § 1350, Criminal Penalty
  • 31 U.S.C. § 1351, Reports on violations
  • 31 U.S.C. § 1501, Documentary evidence requirement for Government obligations
  • 31 U.S.C. § 1502, Balances available
  • 31 U.S.C. § 1511, Definition and application
  • 31 U.S.C. § 1512, Apportionment and reserves
  • 31 U.S.C. § 1513, Officials controlling apportionments
  • 31 U.S.C. § 1514, Administrative division of apportionments
  • 31 U.S.C. § 1515, Authorized apportionments necessitating deficiency or supplemental appropriations
  • 31 U.S.C. § 1516, Exemptions
  • 31 U.S.C. § 1517, Prohibited obligations and expenditures
  • 31 U.S.C. § 1518, Adverse personnel actions
  • 31 U.S.C. § 1519, Criminal penalty
  • 31 U.S.C. § 1531, Transfers of functions and activities 31 U.S.C. § 3324, Advances
  • 31 U.S.C. § 3511, Prescribing accounting requirements and developing accounting systems
  • 31 U.S.C. § 3512, Executive agency accounting and other financial management reports and plans
  • 31 U.S.C. § 3524, Auditing expenditures approved without vouchers
• 38 CFR § 1.670-1.673 – VA Administrative Control of Funds
• Office of Management and Budget (OMB)
  • Circular A-11 – Preparation, Submission and Execution of the Budget
  • OMB Approval Memo of VA’s Funds Control Policy
• Federal Managers Financial Integrity Act of 1982
• VA Financial Policies

0307 Rescissions

VA Financial Policy Volume II, Chapter 3 – VA Funds Control, February 2023.

0308 Policy Approval

This policy was approved by the VA Chief Financial Officer’ Council on July 7, 2023.

Appendix A: Apportionment Process (FMS)

1. VA’s accounting system allotment inquiry screens (ALOT) display the funds available for each fund code at the Administration, Staff-Office, and Staff- Organization level. An Administrative/Office code is included on this inquiry screen to separate funding by organization.
2. VA’s accounting system allowance inquiry screens (ALLW) display the funds available for each fund code at the field station and program level. Station number codes and program codes are included to track funding at the allowance level. For additional information on the use of programs managed by VA and the requirement to track funding information at the program level, see VA Financial Policy Volume II, Chapter 2, VA’s Budget Cycle and Fund Symbols. For additional information on the use and development of station number codes, see VA Financial Policy Volume II, Chapter 5, Obligations, Appendix A, Standard Numbering Schema for Obligations.
3. VA’s accounting system appropriation inquiry screens (APPR, APP2, FAPP, and FAP2) display all VA actual and anticipated budgetary resources for each fund code at the Department level. This includes appropriations, carryover funds, transfers, anticipated and actual reimbursements, and anticipated and actual prior-year recoveries. This is the highest level of budget authority displayed in VA’s accounting system.
4. VA’s accounting system apportionment inquiry screens (APOR and FAPR) display the apportionment status of VA budgetary resources for each fund code at the Department level.
5. VA’s accounting system suballotment inquiry screens (SALT) display the funds made available for each fund code at the field station or program level. A station number code is included for fund codes that use SALT to track field station funding. A program code is used for fund codes that use SALT to track program-level funding.
6. VA’s accounting system suballowance inquiry screens (SASP) display the funds available for each fund code at the field station and Funds Control point/activity classification code level. Station number codes and Funds Control point/activity classification codes are included to track funding at the suballowance level. This is the lowest level of budget authority displayed in VA’s accounting system.

Appendix B: Apportionment Process (iFAMS)

1. VA’s accounting system’s Budget Query and Status of Funds Report displays:
   • Funds made available for each fund code at the Administration and Staff-Office level;
   • Funds made available to organizations, programs, projects or object class at suballotment and lower levels. Distribution varies by administration and fund purpose;
   • All VA anticipated budgetary resources for each fund code are made at the Department level. This includes anticipated reimbursements, and anticipated prior-year recoveries. Actual reimbursements and recoveries are recorded at the suballotment and below, limited to the estimated authority established by the apportionment; and
   • The apportionment status of VA budgetary resources for each fund code at the Department level.

Appendix C: ADA Reporting Procedures and Preventative Measures

Administrations and Staff Offices are responsible for ensuring that potential ADA violations are identified and reported timely. Organizations will utilize the timeline below for reporting potential violations.

ADA Reporting Timeline:

1. An employee will notify their local fiscal office within ten days of identifying a potential ADA. If the employee would rather remain anonymous, a finding may be directed to the OIG.
2. The local fiscal officer or member of leadership must notify the Administration or Staff Office CFO and their Office of Budget within 20 days of being notified of a potential ADA violation.
3. The Administration or Staff Office CFO must appoint a local finance office or investigator to conduct the review.
4. The Administration or Staff Office CFO will conduct a review and submit a preliminary report to the Office of Management, Budget Office within 120 days of notification of the potential violation. The review will be conducted in coordination with the OB following the guidance listed in OMB Circular A-11 Section 145.
5. OB will review the preliminary report and submit a memo with their recommendation to the VA CFO within 20 days of receiving the report.
6. The VA CFO will review the memorandum and preliminary report and, with guidance from OGC, determine if the potential violation is substantiated and forward it to the Secretary VA for approval.
7. The Secretary VA will substantiate that a violation occurred and submit a signed letter through OMB, to the President, Congress (President of the Senate and Speaker of the House), and GAO. OB will draft and transmit all ADA violation letters following the guidance in OMB Circular A-11, Section 145.7.
8. ADA Preventative Measures:
   1. Approving officials responsible for incurring obligations or making expenditures must be aware of their fiscal responsibility in performing their duties.
   2. The Office of Financial Policy, Office of Budget, and Office of Financial Audit recommends any financial manager, program manager, engineer, and or contracting officer responsible for incurring obligations or making expenditures to take a fiscal law or appropriation law training course, at minimum, every three years. This ensures approving officials have the knowledge and skills to reduce or prevent ADA violations.
   3. VA will not specify the type of fiscal law or appropriation law course approving officials must take.

Appendix D: OMB Approval Memo of VA’s Funds Control Policy

Based on OMB’s review of the VA Funds Control regulations, and in accordance with Section 150 of OMB Circular A-11 and 31 U.S.C. § 1514, OMB approved VA’s Funds Control policy for use by VA on May 15, 2023.