Preface

The Antideficiency Act (ADA) prohibits government officials from making payments or committing the United States to make payments for goods and services unless there is enough money in the proper appropriation or apportionment to cover the cost in full. In the past few years the Antideficiency Act has received unprecedented levels of attention. Before 2005, violations of the act mostly went unnoticed. Certainly it was embarrassing to be named as the culprit when the report of the violation worked its way up through the agency chain, ultimately to be reported to the Office of Management and Budget, the president, and Congress. But these reports were by and large a private matter, the information kept quite closely held within the agency. The public, other federal agencies, and even other organizations within the same agency, including internal auditors, were generally not privy to violations that had been reported.

That all changed when Congress passed the Consolidated Appropriations Act for 2005, requiring that all ADA violation reports also be submitted to the Government Accountability Office (GAO), which was then tasked with publishing an annual database of all violations. Suddenly, beginning in fiscal year 2005 and thereafter, everyone had access to all the reports of violation. Agency auditors found the database to be a helpful tool for conducting performance audits, which covered compliance with the act. These performance audits often detected violations that had occurred in years past. As a result, the responsible parties not only had to report their violation but also had to try to explain why they had not detected and reported the violation earlier without the help of the auditors.

GAO has now published four years of data on reported violations. Visibility within both the financial and audit communities is at an all-time high. This book gives government officials responsible for the proper use of federal funds information and tools to help prevent violations of the Antideficiency Act. It also provides information on detecting and reporting in a timely manner any violations that do occur, before they become fodder for audit findings.

This book should be of interest to budget, finance, and contracting personnel. It will also help government purchase card holders and approvers, as well as all federal supervisors, to understand the situations in which they may be at risk of violating the act. Auditors will find this book to be a valuable resource when conducting both financial and performance audits.

The following chapters are a comprehensive discussion of all aspects of the Antideficiency Act, presented in question-and-answer format. Included in the discussion are the history of the act, how violations occur, penalties for violations, reporting requirements, and how to avoid violations. There is also an analysis of the reports submitted to GAO from fiscal years 2005 through 2008, which offers insight into problems encountered by others and is intended to help the reader avoid similar mistakes.

I hope you will find this book informative, helpful, thought-provoking, and at least occasionally entertaining.

William G. Arnold
Heath, Ohio