Chapter 13

How to Avoid Antideficiency Act Violations

In the preceding chapters, I have attempted to provide a comprehensive overview of what the Antideficiency Act is about, what constitutes a violation of the act, possible penalties, and reporting requirements. Now you know how to recognize an Antideficiency Act violation when you see one—but it’s even more important to know how to avoid a violation in the first place. This chapter suggests specific actions you can take in your agency.

190. How can I ensure my organization doesn’t incur any Antideficiency Act violations?

While there is no way to be absolutely certain a violation will not occur, there are a number of actions you can take to minimize the likelihood of a violation. Many fall under the umbrella of internal controls. You should have a robust internal control program that complies with the Government Accountability Office (GAO) Standards for Internal Control, Office of Management and Budget (OMB) Circular A-123, and your own agency regulations. Your internal control risk assessments, vulnerability assessments, and annual reviews should include a specific focus on Antideficiency Act compliance.

191. What are some specific actions an agency can take?

Good training of funds control personnel is an excellent start. All employees who certify funds availability before obligation (e.g., those who work in your budget office or fiscal control office) should attend an appropriations law class to learn about proper use of federal funds. These personnel should then attend refresher training at least every five years.

Certifying officers, who certify vouchers for payment, should also attend appropriations law training. Certifying officers are the last line of defense against Antideficiency Act violations. Many purpose law violations could have been easily corrected—and Antideficiency Act violations avoided—if the certifying officers had not made incorrect payments.

192. What else can we do to prevent Antideficiency Act violations?

It is important for funds holders to read the agency’s appropriations act each year. You will find your agency’s appropriations act at http://thomas.loc.gov. You should read not only the actual appropriation language to ascertain the current year purpose, time, amount, and earmarks, but also any general, administrative, or special provisions that apply to your agency. Often, these additional provisions are physically separated by many pages from your actual appropriation, so you must carefully look for them. These provisions often contain specific authorizations and prohibitions, as well as additional earmarks. Violating one of the provisions might well result in an Antideficiency Act violation.

GAO’s daily email service is another good source of information. Subscribers receive all newly published comptroller general decisions. The emails help keep you informed about any changes in the rules on the proper use of federal funds. Go to http://www.gao.gov/subscribe/index.php to sign up for this free service.

You should also review the GAO database of Antideficiency Act violations (http://www.gao.gov/ada/antideficiencyrpts.htm) when it is published each year. Pay attention to the violations related to the kinds of transactions your agency processes. Critically reviewing the database may help you avoid similar violations.

193. What can I do from an operational standpoint to help avoid violations?

• First and foremost, stress to all personnel the importance of promptly and accurately recording all obligations. Delay in posting obligations to accounting records is the root cause of many violations because the available balances are overstated until the accounting catches up with the obligations. If your agency does commitment accounting, it is also important to immediately post all commitments as soon as funds availability has been certified. If your agency does not use commitment accounting, consider it.

• Make certain at the beginning of each fiscal year and each quarter that you have a valid funding document authorizing your obligation authority before certifying any funds for obligation. Many reported Antideficiency Act violations have occurred during periods covered by continuing resolutions; the agencies had not yet received apportionments from OMB. Do not assume that apportionment is automatic. It isn’t.

• Question transactions that are unusual or just don’t look right. A large percentage of reported Antideficiency Act violations resulted from the purchase of unauthorized items. Be especially wary of requests for items you’ve never bought before. Keep in mind the prohibitions against buying food, gifts, and other personal items.

• If you have doubts about a transaction, resist pressure from above for immediate action. Make sure that a transaction is proper before authorizing it, no matter how much pressure your boss may apply. If the transaction is not proper, say so, and don’t certify it. Remember, the person who is the funds holder and certifies the transaction—not the person who requested it—is the one normally held responsible for a violation. Don’t automatically assume the boss is right.

• Periodically remind all managers of the prohibition against accepting voluntary services. Employees who are entitled to compensation for overtime work must receive it, in the form of either pay or compensatory time off. Managers must be aware that they may not suffer or permit their employees to voluntarily give up their entitlement to compensation.

• Make friends with your agency’s legal counsel. Developing good rapport with the attorneys will help you get quick and thoughtful responses to your questions. Make sure at least one of the attorneys has some expertise in appropriations law. If none do, gently suggest some training so that your legal office can give you the assistance you need and deserve. If you are sponsoring appropriations law training for your financial personnel, offer one or more slots to your legal office.

194. What might be agencies’ greatest area of vulnerability to Antideficiency Act violations in the future?

The use of government purchase cards and government travel cards has exploded recently, and it is likely that many violations will result. Non-financial and noncontracting personnel use purchase cards and travel cards to obligate the government and approve payments. Thousands of people in every organization, not just a relative few, now certify funds availability. Most of these cardholders and approvers have not been trained in appropriations law and are unaware of the Antideficiency Act. Auditors will certainly find numerous violations as they increase their surveillance of purchase-card use.

In addition, GAO stated in a recent decision¹ that purchase-card approving officials will be burdened with pecuniary liability for any payments made for unauthorized items. Such officials could suffer a double whammy: being named in an Antideficiency Act violation report and possibly disciplined, then being forced to pay for the unauthorized purchases out of their own pockets.

To avoid problems, agencies need strong internal controls over their cards. In January 2009, OMB published a revised appendix (appendix B) to its Circular A-123 that makes recommendations for controlling the use of government charge cards, both purchase cards and travel cards. The appendix lists specific requirements agencies should include in their systems of internal controls for the management of charge card programs. Strict compliance with appendix B will substantially reduce your risk of incurring Antideficiency Act violations as a result of misuse of government charge cards. Go to http://www.whitehouse.gov/omb/circulars/a123/a123_appendix_b.pdf to review this directive.

NOTES

1. U.S. Government Accountability Office decision, B-307693 (April 12, 2007).