Exam (elaborations)
Fiscal Law Legal Exam Questions and Answers
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- Fiscal Law
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- Fiscal Law
Fiscal Law Legal Exam Questions and Answers
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Fiscal Law/Legal Exam Questions andAnswers
What is the Bona Fide Need rule? - Answer - A rule established in case law by the Comptroller General
of the US, based on statutory analysis, that holds that appropriated funds may be obligated only to meet
a legitimate need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year(s)
for which the appropriation was made. Applies to all government activity carried out with appropriated
funds, including contracts, grants, cooperative agreements, and IDIQs. 31 USC 1502(a)
What are the exceptions to Bona Fide Need? - Answer - 1) Delivery lead time; 2) Production lead time;
3) Stock levels
When does the Bona Fide Need for services arise? - Answer - Not until the services are rendered.
Services must be funded with funds current as of the date the service is performed.
How is Bona Fide Need applied to Non-severable services? - Answer - The USG must fund non-
severable services contracts with dollars available for obligation at the time the contract is executed.
Contract performance may cross fiscal years.
How is Bona Fide Need applied to severable services? - Answer - Severable services are the bona fide
need of the fiscal year in which performed. DoD agencies may obligate funds current at the time of
contract award to finance a severable service contract with a period of performance that does not
exceed one year, even if it crosses fiscal years. Only applies to annual year funds.
For maintenance and repair projects, what are the bona fide need requirements? - Answer - DoD
agencies may obligate current year appropriations for maintenance and repair projects even though
contractor performance may not begin until the next fiscal year, as long as the work begins before 1
January of the following calendar year.
What are the different colors of money? - Answer - 1) RDT&E - 3600; 2) Procurement - 3010 (A/C), 3020
(Missile), 3021 (Space), 3011 (Ammunition), 3080 (Other); 3) MILPERS - 3500; 4) O&M - 3400; 5) MILCON
- 3300
What is RDT&E money and how long is it current? - Answer - Funding for the research, development,
test, and evaluation of equipment, material, computer application software, and the operations of
dedicated R&D installations activities for the conduct of RFT&E programs; Available for two years,
incremental
, What is procurement money and how long is it current? - Answer - Funds acq programs that have been
approved for production and all costs integral and necessary to deliver a useful end item intended for
operational use or inventory upon delivery; Available for three years, must fully-fund all procurements,
Exceptions are 1) Advance Procurement for long lead time items and 2) Advance economic order
quantity (EOQ) procurement. EOQ is normally associated with multiyear procurements but can be
requested for annualized procurements on an exception basis for unusual circumstances. Both must be
included when the budget is submitted to OSD.
What is O&M money and how long is it current? - Answer - Funds expenses such as civilian salaries,
travel, minor construction, operating military forces, training and education, depot maintenance, stock
funds, and base operations support; Current for one year, annually funded; Use for expenses, NOT
investments, $250K end items or $750K minor construction
What is MILPERS money and how long is it current? - Answer - Funds costs of salaries and other
compensation for active and retired military personnel and reserve forces based on end strength;
Current for one year, annually funded
What is MILCON money and how long is it current? - Answer - Funds major construction project such as
bases, schools, missile storage facilities, maintenance facilities, medical/dental clinics, libraries, and
military family housing; Current for five years, must be fully-funded
What is the appropriation process? - Answer - Authorization (legal authority to carry out program) +
Appropriation (Congressional act allows the Government to incur obligations for a certain number of
years = Apportionment (OMB distributes money available for obligations)
What is the life cycle of appropriated funding? - Answer - 1) Current--active and available for obligation
for a certain number of years based on the color of money; 2) Expired--5 years beyond current, not
available for new obligations, but can be used to pay bills/liquidations/award fee/claims/rate
increases/contingent liabilities (must use OARS process to obligate expired funds); 3) Cancelled--can not
longer be used. *Use current year funds for overruns because of LoC and LoF clauses
What is the budget process? - Answer - 1) Commitment--admin reservation of funds in anticipation of
an obligation; 2) Obligation--action creates liability or commitment to make a disbursement; 3)
Expenditure--payments made by the USG that liquidates the obligation; occur in foregoing order.
What is the Purpose Statute? - Answer - 31 USC 1301(a); Appropriations shall be applied only to the
objects for which the appropriations were made except as otherwise provided by law; Must use
according to correct color of money and purpose.
What are the basic elements of a contract? - Answer - 1) Legal Capacity; 2) Mutual Assent
(Offer/Acceptance/MoM); 3) Consideration; 4) Certainty of Terms; 5) Lawful Purpose; 6) Legal
Instrument
What are the ADA prohibitions? - Answer - An officer/employee of the USG may NOT: 1) make or
authorize an expenditure or obligation exceeding an amount available in an appropriation unless
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