Funds Control Manual

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U. S. Environmental Protection Agency
Office of the Chief Financial Officer Policy
Manual
Funds Control Manual
Administrative Control of Funds
Effective Date: Upon issuance
Supersedes February 2008

Resource Management Directives System 2520

Contents
Introduction.................................................................................................................................. vi
How Organized ......................................................................................................................... vii
Mandatory Review .................................................................................................................... vii
Chapter 1: Federal Entities Influencing the EPA’s Financial Management........................ 1-1
Summary .................................................................................................................................. 1-1
A. Congress ............................................................................................................................ 1-1
B. Department of Commerce, National Institute of Standards and Technology (NIST)....... 1-2
C. General Services Administration (GSA)........................................................................... 1-2
D. Government Accountability Office (GAO) ...................................................................... 1-2
E. Office of Inspector General (OIG) .................................................................................... 1-3
F. Department of Justice (DOJ)............................................................................................. 1-3
G. Office of Management and Budget (OMB) ...................................................................... 1-3
H. Office of Personnel Management (OPM) ......................................................................... 1-4
I.

Department of the Treasury .............................................................................................. 1-4

J.

Cross-Government Task Forces and Coordinating Groups .............................................. 1-4

K. States, Tribes and Territories ............................................................................................ 1-5
Chapter 2: Federal Laws, Regulations and Guidance............................................................ 2-1
Summary .................................................................................................................................. 2-1
A. Environmental Authorizing Statutes ................................................................................. 2-1
B. Appropriation Statutes ...................................................................................................... 2-9
C. Government-Wide Management and Administrative Statutes ......................................... 2-9
D. Government-Wide Guidance and Regulations................................................................ 2-15
Chapter 3: Federal and EPA Budget and Financial Terms................................................... 3-1
Summary .................................................................................................................................. 3-1
A. Federal Spending Terms ................................................................................................... 3-1
B. EPA Budget Management Terms...................................................................................... 3-2
Additional Information and Training ....................................................................................... 3-4
Chapter 4: The EPA’s Financial and Associated Systems ..................................................... 4-1
Summary .................................................................................................................................. 4-1
A. Automated Standard Application for Payments (ASAP) .................................................. 4-1
B. Budget Automation System (BAS) ................................................................................... 4-1

C. Compass ............................................................................................................................ 4-1
D. Concur ............................................................................................................................... 4-2
E. Contracts Payment System (CPS) ..................................................................................... 4-2
F. Department of Interior, Interior Business Center (IBC) ................................................... 4-2
G. EPA’s Acquisition System (EAS)..................................................................................... 4-2
H. Grant Payment Allocation System (GPAS) ...................................................................... 4-2
I.

Integrated Grants Management System (IGMS)............................................................... 4-3

J.

Intergovernmental Payment and Collections (IPAC) System........................................... 4-3

K. Office of Management and Budget (OMB) MAX ............................................................ 4-3
L. PeoplePlus ......................................................................................................................... 4-3
M. Superfund Enterprise Management System (SEMS) ........................................................ 4-3
Chapter 5: Sources of Funding for the EPA and Associated Processes................................ 5-1
Summary .................................................................................................................................. 5-1
A. Annual Federal Budget Process ........................................................................................ 5-2
B. Budget Execution Process — Operating Plan Guidance and Allowance Management . 5-11
C. Supplemental Appropriations/Natural Disasters............................................................. 5-21
D. Reimbursable Allowances and Interagency Agreements................................................ 5-24
E. Intergovernmental Agreements (Agreements with Other Government Entities) ........... 5-27
F. Fees and Fee Programs.................................................................................................... 5-29
G. Special Accounts ............................................................................................................. 5-30
Additional Information........................................................................................................... 5-32
Chapter 6: EPA’s Budget and Financial Organization and Structure ................................. 6-1
Summary .................................................................................................................................. 6-1
A. Account Code Structure .................................................................................................... 6-2
B. Appropriation Number (Treasury Account Symbol) ...................................................... 6-13
C. Object Classes ................................................................................................................. 6-13
D. EPA Appropriations ........................................................................................................ 6-14
E. EPA Appropriation Accounts ......................................................................................... 6-14
F. Accounting ...................................................................................................................... 6-19
G. Payroll Management and Tracking/PeoplePlus .............................................................. 6-20
Chapter 7: Budget Execution Rules and Guidance ................................................................ 7-1
Summary .................................................................................................................................. 7-1
Overview of Major Spending and Charging Guidelines and Rules ......................................... 7-1

A. Purpose, Time and Amount Explanations: Appropriation Law Concepts ........................ 7-2
B. Tracking and Managing Funds ....................................................................................... 7-13
Chapter 8: Roles and Responsibilities...................................................................................... 8-1
Summary ................................................................................................................................. 8-1
More Detailed Discussion of EPA Responsible Officials Roles and Responsibilities ............ 8-2
A. SROs ................................................................................................................................. 8-2
B. AAs, National Program Managers (NPMs), and Responsible Planning and Implementation
Offices (RPIOs)................................................................................................................. 8-3
C. RAs.................................................................................................................................... 8-4
D. SBOs ................................................................................................................................. 8-4
E. Regional Comptrollers ...................................................................................................... 8-5
F. Regional Budget Officers (RBOs) .................................................................................... 8-6
G. Allowance Holders............................................................................................................ 8-7
H. FCOs ................................................................................................................................. 8-7
I.

Originators ........................................................................................................................ 8-8

J.

Approving Officials .......................................................................................................... 8-8

K. Obligating Officials........................................................................................................... 8-9
L. Finance Center Directors................................................................................................. 8-10
M. EPA Acquisitions (Contracts) Management ................................................................... 8-11
N. Grants Management: Roles and Responsibilities of EPA Officials................................ 8-13
O. Interagency Agreements: Roles and Responsibilities ..................................................... 8-14
P. Accounts Payable Certifying Officers and Disbursing Officers ..................................... 8-14
Q. OCFO .............................................................................................................................. 8-15
R. Office of General Counsel .............................................................................................. 8-19
Chapter 9: Analysis and Controls ............................................................................................ 9-1
Summary .................................................................................................................................. 9-1
A. Risk Management and Internal and Management Controls/A-123 Reviews .................... 9-1
B. Workload Analysis............................................................................................................ 9-1
Appendix A: Fund Control Relationships at the EPA .......................................................... A-1
Appendix B: Designation of Funds Control Officer Letter .................................................. B-1
Appendix C: A-123 Process Flow ............................................................................................ C-1
Appendix D: List of Key Internal Controls ............................................................................ D-1

Appendix E: Management Integrity Milestones .................................................................... E-1
Appendix F: Acquisitions (Procurement) Process ..................................................................F-1
Appendix G: Finance Center Listing ...................................................................................... G-1
Appendix H: Abbreviations and Terms and Definitions ...................................................... H-1
Appendix I: Index of Major Revisions/New Material ............................................................ I-1

Introduction
The U.S. Environmental Protection Agency’s (EPA’s) Funds Control Manual is intended as a
guide on how EPA employees can effectively and efficiently manage funds while following
applicable rules, statutes and regulations. The manual summarizes the EPA’s fund control
principles, policies and procedures and describes their legal basis. These provisions apply to all
of the EPA’s organizations, appropriations and funds.
The control of funds in the federal government is governed by statutes and implemented by
directives from the Office of Management and Budget (OMB), the U.S. Department of Treasury,
and Congress and informed by opinions and accounting standards issued by the Government
Accountability Office (GAO). Although this document is primarily targeted toward the EPA’s
allowance holders and Funds Control Officers, it is a useful reference for all members of the
resource management community. Effective and efficient resource management is everyone's
responsibility.
Per 31 U.S.C. 1514, the head of each agency must prescribe a system for administrative control
of funds. OMB Circular A-11, Part 4, “Instructions on Budget Execution,” provides governmentwide guidance on how to execute the budget and a checklist to use in preparing funds control
regulation for approval by the OMB. This Funds Control Manual explains the policies and
procedures the EPA has in place to ensure that it does not violate legal requirements or OMB
directives. The complexity of the EPA’s mission, the differences between some of its authorizing
statutes and the diversity of its programs means the agency had to carefully design policies and
procedures to track, report on and properly ensure control of the agency’s funds throughout
headquarters offices, regional offices, and laboratories and other offices.
This manual also implements OMB Circular A-123, “Management’s Responsibilities for Internal
Controls,” which provides guidance on using the range of tools at the disposal of agency
managers to achieve desired program results and meet the requirements of the Federal Managers’
Financial Integrity Act of 1982 (FMFIA) which encompasses accounting and administrative
controls; including program, operational, and administrative areas as well as accounting and
financial management.
Management has a fundamental responsibility to develop and maintain effective internal
controls. The proper stewardship of federal resources is an essential responsibility of agency
managers and staff. Federal employees must ensure that federal resources are used efficiently
and effectively to achieve authorized objectives. Programs must operate and resources must be
used consistent with the agency mission; in compliance with laws and regulations; and with
minimal potential for waste, fraud, and mismanagement.
An overview of the FMFIA and OMB Circular A-123, as well as key Office of the Chief
Financial Officer (OCFO) annual guidance memorandums can be found at
http://intranet.epa.gov/ocfo/management_integrity/index.htm.
Congress provides funds for the agency to carry out its mission through specific appropriations,
each one of which is provided for a particular purpose, time and amount. These three
characteristics are regulated through guidelines and restrictions such as the Necessary Expense

Rule (purpose), the Bona Fide Needs Statute (time), and the prohibition on augmentation of
appropriations (amount). The Anti-Deficiency Act (ADA) prohibits (1) spending in excess of an
amount available in an appropriation, (2) authorizing expenditures in advance of an
appropriation, (3) accepting voluntary services without authority, and (4) spending in excess or
in advance of an apportionment. In addition, the EPA also receives funds through other sources
such as Interagency Agreements, fees and special accounts that it also must manage under
similar rules.
This Funds Control Manual:
•

Prescribes a system for positive administrative control of funds designed to restrict
obligations and expenditures against each appropriation or fund account to the amount
available therein. Obligations and expenditures from each appropriation or fund account are
limited to the lesser of the amount of apportionments made by OMB or the amount available
for obligation and/or expenditure in the appropriation or fund account.

•

Describes procedures to follow in budget execution and specifies basic fund control
principles and concepts. Establishes policy regarding the administrative control of funds.

•

Enables the Administrator to determine responsibility for over-obligation and overdisbursement of appropriations, apportionments, statutory limitations, allotments and other
administrative subdivisions, as well as violations of limitations imposed by agency policy.

•

Provides procedures for addressing violations of the ADA as well as violations of limitations
imposed by agency policy.

•

Discusses agency administrative control of funds policies that apply to revolving funds,
management funds and trust funds, including those that are not apportioned.

Supplemental guidance regarding the financial management of selected areas, such as travel, and
unique appropriations, such as those derived from the Superfund and Leaking Underground
Storage Tank Trust Funds, can be found in other sections of the RMDS 2500 series. The entire
series, as well as all other OCFO policy documentation, can be accessed online at
http://intranet.epa.gov/ocfo/policies/policies.htm.
How Organized
The Funds Control Manual is divided into chapters, each one of which includes basic information
about a topic area. Each chapter begins with a summary of overall principles in that area,
followed by more detailed explanations on particular topics that include links to additional
information. There is one partial exception: detailed instructions on managing funds at each stage
of the federal funding process are contained in the section on annual appropriations in chapter 5,
since annual appropriations are EPA’s largest source of funds. Please refer to this section for
requirements and processes at each funding stage (such as apportionments).
Mandatory Review
This 2015 version has been updated to reflect the EPA’s Compass financial system
implementation; OMB’s A-11 and A-123; workload review; new conference management

requirements; GAO and Inspector General recommendations; audit findings; and statutory,
process, procedural, and policy changes. This policy will be reviewed and revised as warranted
by new federal laws, regulations, applicable Federal Accounting Standards Advisory Board
requirements or agency policy, with a complete review planned within three years from its date
of issuance.
This document, the EPA’s Funds Control Manual (Resources Management Directives System,
Chapter 2520), is issued as interim guidance until the EPA receives final OMB approval.

Chapter 1: Federal Entities Influencing the EPA’s Financial Management
Summary
Several outside entities play a crucial role in the EPA’s management of funds and in reviewing
the EPA’s requests for funding. Major EPA stakeholders include:
•

Congress

•

Office of Management and Budget

•

Government Accountability Office

•

Inspector General

•

Department of Justice

•

Department of the Treasury

•

States and tribes

Provided below are detailed descriptions of these entities and the roles they play.
A. Congress
The EPA may only obligate and spend funds that have been appropriated by Congress. Both the
House and Senate have two major sets of committees and subcommittees that direct the EPA:
1. Congressional Committees
Congress manages its decision-making through many committees and subcommittees.
Congress generally has three types of committees: oversight, authorizing and
appropriating committees. Each fiscal year’s annual budget normally contains specific
direction and requirements from these subcommittees, as do supplemental budgets.
a. Authorizing Committees write the principal statutes or laws that direct government
agencies. Authorizing committees review and propose statutory language.
•

Authorizers write the authorizing language for the EPA’s environmental
activities.

b. Appropriating Committees review annual and supplemental budget proposals. Three
main appropriating subcommittees oversee EPA programs: Environment and Public
Works (in the Senate); Energy and Commerce (in the House); and Interior,
Environment, and Related Agencies (in the House).
•

Appropriators write specific appropriation bills. The EPA’s budgets are developed
in the Department of Interior (DOI) subcommittee.
http://appropriations.house.gov/ http://www.appropriations.senate.gov/

•

Each fiscal year, the EPA generally has hearings with each appropriating
committee and must respond to detailed questions from each committee (called
Questions for the Record).

c. Oversight Committees can be permanent or special temporary committees. They
oversee certain, delineated topic areas, such as government operations. EPA officials
are occasionally required to testify about agency programs.
2. Congressional Budget Office (CBO)
The CBO produces independent analyses of budgetary and economic issues to support
the Congressional budget process. CBO economists and policy analysts conduct analyses
supporting dozens of reports and hundreds of cost estimates each year. The CBO does not
make policy recommendations, and each report and cost estimate discloses an agency’s
assumptions and methodologies. All of the CBO’s products, apart from informal cost
estimates for legislation being developed privately by members of Congress or their
staffs, are available to the Congress and the public on the CBO’s website.
The EPA’s annual budgets are submitted directly to Congressional appropriators as part
of the President’s budget and are not subject to review by the CBO. However, the EPA
policy and budget proposals may be analyzed and scored (through a CBO estimate of
budget implications). Further information can be found at http://www.CBO.gov.
B. Department of Commerce, National Institute of Standards and Technology (NIST)
NIST is one of the nation’s oldest physical science laboratories, where science connects to
real-world applications. With a varied research portfolio, unique facilities, national networks
and international partnerships on standards and technology, NIST works to support U.S.
industry and innovation. From cybersecurity to mammograms and advanced manufacturing,
innumerable technologies, services and products rely upon NIST expertise, measurement and
standards. The EPA must follow NIST direction in cyber-security. NIST has a century-long
tradition of partnering with business, universities, and other government agencies to support
the nation’s vast innovation ecosystem. http://www.commerce.gov/national-institutestandards-and-technology
C. General Services Administration (GSA)
The GSA oversees the business of the U.S. federal government, travel, buildings and
facilities, procurement, etc. Its acquisition solutions supply federal purchasers with costeffective high-quality products and services from commercial vendors. The GSA provides
workplaces for federal employees, and oversees the preservation of historic federal
properties. Its policies covering travel, property and management practices promote efficient
government and consistent operations. http://www.gsa.gov. These policies include the
Federal Acquisitions Regulation, the Federal Management Regulation (successor to the
Federal Property Management Regulation) and the Federal Travel Regulation.
D. Government Accountability Office (GAO)
The GAO audits EPA activities and writes guides for federal agencies on the appropriate use
of funds. The GAO is a congressional agency that investigates how the federal government
spends taxpayer dollars, as well as making recommendations to improve performance and
ensure the accountability of the federal government. The GAO conducts reviews at the
request of congressional committees or subcommittees. Its reviews include:

•

Auditing agency operations to determine whether federal funds are being spent efficiently
and effectively.

•

Investigating allegations of illegal and improper activities.

•

Reporting on how well government programs and policies are meeting their objectives.

•

Performing policy analyses and outlining options for Congressional consideration.

•

Issuing legal decisions and opinions, such as bid protest rulings and reports on agency
rules.

•

Advising Congress and the heads of executive agencies about ways to make government
more efficient, effective, ethical, equitable and responsive.

The GAO issues reports for which the EPA must provide information and responses. The
OCFO’s Office of Budget includes a GAO coordination team that helps the GAO set up its
investigation and find the information it seeks; the team also coordinates the official EPA
responses to GAO recommendations. In addition, each Region and Program Office has a
GAO liaison to coordinate GAO work within it. More information can be found at
http://www.gao.gov/.
E. Office of Inspector General (OIG)
The OIG is an independent office within the EPA that helps the agency protect the
environment more efficiently and cost-effectively. It was created and governed by the
Inspector General Act of 1978, as amended (5 U.S.C. App. 3). The OIG seeks to influence
resolution of the agency’s major management challenges, reduce risk, improve practices and
program operations, and save taxpayer dollars, leading to positive human health and
environmental impacts and attainment of the EPA’s strategic goals. The OIG performs
audits, evaluations and investigations of the EPA, as well as its grantees and contractors, to
promote economy and efficiency, and to prevent and detect fraud, waste and abuse.
http://intranet.epa.gov/oig/
F. Department of Justice (DOJ)
The EPA will occasionally seek advice related to fiscal law from the DOJ’s Office of Legal
Counsel. Where the GAO’s advice differs from the DOJ’s, as an Executive Branch agency,
the EPA follows DOJ’s counsel. More information is at http://www.justice.gov/olc.
•

Another part of the DOJ also prosecutes many civil and criminal environmental cases for
the EPA, primarily the Environment and Natural Resources Division.
http://www.justice.gov/enrd/

G. Office of Management and Budget (OMB)
Manages the U.S. federal budget, including budget planning, developing regulations,
management and IT guidance. The OMB implements policies across the Executive Branch. It
carries out its mission through five critical processes that help the President’s planning for
and implementation of priorities across the Executive Branch:
•

Budget Development and Execution — the mechanism by which a President implements
decisions, policies, priorities and actions.

•

Management — oversight of agency performance, federal procurement, financial
management and information/IT (including paperwork reduction, privacy, and security).

•

Coordination and Review of All Significant Federal Regulations by executive agencies,
to reflect Presidential priorities and to ensure that economic and other impacts are
assessed as part of regulatory decision-making, along with review and assessment of
information collection requests.

•

Legislative Clearance and Coordination — review and clearance of all agency
communications with Congress, including testimony and draft bills to ensure consistency
of agency legislative views and proposals with Presidential policy.

•

Executive Orders and Presidential Memoranda to agency heads and officials, the
mechanisms by which the President directs specific government-wide actions by
Executive Branch officials.

The EPA works extensively with the OMB in all of these areas. The OMB’s website
(http://www.whitehouse.gov/omb) provides further information as well as links to extensive
U.S. government, economic, demographic and other historical data.
H. Office of Personnel Management (OPM)
The OPM works in several broad categories to recruit, retain and honor a world-class
workforce for the American people. It manages federal job announcement postings at
USAJOBS.gov and sets policy on government-wide hiring procedures. The OPM conducts
background investigations for prospective employees and security clearances across
government. It upholds and defends the merit systems in federal civil service, making sure
that the federal workforce uses fair practices in all aspects of personnel management. It
manages pension benefits for retired federal employees and their families while also
administering health and other insurance programs for federal employees and retirees. The
OPM provides training and development programs and other management tools for federal
employees and agencies. It also assumes the lead in developing, testing and implementing
new government-wide policies that relate to personnel issues. http://www.opm.gov
I. Department of the Treasury
Treasury manages government payments systems and sets many government accounting
standards. (Note that “DoT” is normally used for the U.S. Department of Transportation,
“Treasury” for the Department of the Treasury.) http://www.treasury.gov
J. Cross-Government Task Forces and Coordinating Groups
In the last few years, the EPA has also been tasked to coordinate efforts through several
cross-agency Presidential Task Forces, including the Gulf Coast Task Force, the Hurricane
Sandy Task Force and the Recovery Act Transparency Board. These groups have been
established by Presidential Executive Order and require the EPA to work closely with other
government agencies to achieve the Administration’s goals. These groups have also required
the EPA to produce additional financial reports and work with other agencies in designing
and implementing management and control plans.

K. States, Tribes and Territories
Almost all of the EPA’s programs are implemented through or with state, tribal and local
partners. Much of the EPA’s funding also consists of grants to states and tribes. More
information is available on the EPA’s Office of International and Tribal Affairs website at
http://intranet.epa.gov/oiaintra/. The Environmental Council of the States (ECOS) is the
national nonprofit, nonpartisan association of state and territorial environmental agency
leaders. The purpose of ECOS is to improve the capability of state environmental agencies
and their leaders to protect and improve human health and the environment of the United
States of America. http://www.ecos.org/

Chapter 2: Federal Laws, Regulations and Guidance
Summary
The EPA’s fund control practices must comply with the EPA’s authorizing statutes,
appropriations laws, other general management statutes, and rules and regulations issued to all
federal agencies from overall federal government coordinating and oversight offices (such as the
Office of Management and Budget [OMB], Treasury and the General Services Administration
[GSA]). In summary, the EPA must follow the directives in:
•

Environmental laws (statutes)

•

Appropriations statutes

•

Government-wide management laws (statutes)

•

Government-wide guidance/regulations

Law Links (http://intranet.epa.gov/ogc/lawlinks.htm) can be used to find full texts of legislation.
Below are summaries of the EPA’s major authorizing legislation and directives, followed by
descriptions of some major statutes directing government-wide management, financial and
administrative requirements and practices.
A. Environmental Authorizing Statutes
Environmental programs are legislated by Acts of Congress in the form of authorizing or
program legislation. Authorizing legislation provides zero funding in itself; it is not an
appropriation of funds. For the EPA, authorizing legislation establishes the agency‘s
environmental mission, which may be undertaken with funds provided by subsequent
appropriations legislation.
Many EPA authorizing statutes — e.g., the CWA, the SWDA, CERCLA or FIFRA (see
Appendix H for a list of abbreviations) — have specific financial authorizations and
requirements.
1. Clean Air Act of 1970
The Clean Air Act (CAA), amended in 1977 and 1990, is intended to foster the protection
and enhancement of the nation’s air quality, and to safeguard public health and welfare
and the productive capacity of the population. The act is divided into six titles:
•

Title I includes provisions for setting and achieving ambient air quality standards.

•

Title II deals with control of pollution from mobile sources.

•

Title III addresses general and administrative matters.

•

Title IV deals with requirements to control pollution that leads to acid deposition.

•

Title V includes requirements for the issuance of operating permits for certain
stationary sources.

•

Title VI deals with pollution that contributes to depletion of the stratospheric ozone.

Motor Vehicle and Engine Compliance Program Fees were authorized by the 1990 CAA
and are administered by the Air and Radiation Program. The fees are set at a level to
cover the cost to the EPA of certifying new engines and vehicles and monitoring
compliance of new and in-use engines and vehicles and are deposited into a special fund
pursuant to section 217 of the CAA. The EPA does not have access to the fees unless
Congress makes appropriations from this special fund.
Fees apply to all manufacturers including makers of heavy-duty, in-use, and non-road
vehicles and engines; large diesel and gas equipment (earthmovers, tractors, forklifts,
compressors, etc.); handheld and non-handheld utility engines (chainsaws, weedwhackers, leaf-blowers, lawnmowers, tillers, etc.); marine (boat motors, watercraft, jetskis); locomotives; aircraft; and recreational vehicles (off-road motorcycles, all-terrain
vehicles, snowmobiles) as well as evaporative requirements for non-road engines. The
EPA may apply new certification fees for additional industry sectors as new programs are
developed.
2. Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA)
CERCLA, generally referred to as “Superfund” (42 U.S.C. 9601, et seq.), was enacted in
1980 and amended by:
•

Superfund Amendments and Reauthorization Act of 1986 (SARA)

•

Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA)

•

Small Business Liability Relief and Brownfields Revitalization Act of 2002

The CERCLA, as amended by the SARA, makes the agency responsible for providing
emergency response for hazardous substances released into the environment and cleaning
up inactive or abandoned hazardous waste disposal sites. The agency is authorized under
the SARA to respond to releases of hazardous substances, pollutants and contaminants by
either a removal or remedial action or by compelling responsible parties to undertake the
response action. The reauthorized statute significantly broadened Superfund authorities in
key response, enforcement and research areas. The statute established cleanup standards
and mandatory schedules to ensure rapid and permanent solutions in cleaning up sites. It
contained new and stronger enforcement provisions to encourage expeditious settlements
with responsible parties, and to implement a more formal cleanup process for federal
facilities. The law significantly increased Superfund health-related and research and
development authorities, including provisions for an innovative and alternative treatment
demonstration program and health effects research. Overall, the statute expands state and
public participation at all stages of the cleanup process.
a. Emergency Planning and Community Right-to-Know Act (EPCRA) — A subpart of
SARA Title III, the national EPCRA was signed into law on October 17, 1986, as the
key legislation of community safety. Congress enacted this law to help local
communities protect public health, safety and the environment from chemical

hazards. Two of the main goals of EPCRA are to “provide a basis for each
community to develop a chemical emergency preparedness and planning program that
suits its individual needs,” and “provide the public with the identity, quantity,
location, and properties of hazardous substances in the community, as well as data on
annual release of certain chemicals into the environment.”
b. Special Accounts — Under CERCLA 122(b)(3), the EPA is authorized to “retain and
use” funds the agency receives from settlements with potentially responsible parties
and to set up “Special Accounts” to finance work at sites. Special Accounts may pay
for specified activities at particular site(s) and must be used according to the terms of
the individual settlement agreement with the responsible party (or parties).
c. The Small Business Liability Relief and Brownfields Revitalization Act was signed
into law on January 11, 2002. It amends CERCLA to encourage cleanup and reuse of
brownfields and other potentially contaminated or lightly contaminated properties.
The law establishes a statutory brownfields program and clarifies Superfund liability
for certain parties, as well as the state and federal roles in hazardous waste cleanup.
The brownfields program includes grants for assessment; cleanup; capitalizing
cleanup revolving loan funds; state and tribal response programs; and training,
research, and technical assistance.
3. Energy Policy Act of 2005 (EPAct)
The EPAct was signed into law on August 8, 2005, as part of the federal government’s
efforts to stimulate development and use of more efficient and environmentally friendly
domestic energy sources. It was authorized under Title VII (“the Diesel Emissions
Reduction Act”) to fund grants to reduce diesel emissions. The EPAct also required the
agency to develop fuel regulations, revise emission models, and undertake fuel-related
studies and analyses.
4. Federal Insecticide, Fungicide and Rodenticide Act of 1972 (FIFRA)
FIFRA requires that all pesticides, with minor exceptions, must be registered with the
EPA before they can be sold or distributed in the United States. Pesticide products must
be registered if the EPA determines they do not cause unreasonable adverse effects on
humans or the environment. As part of the registration process, scientific data and
proposed label instructions for use and cautionary statements are submitted by registrants
and reviewed by the EPA to ensure that when registered products are used in accordance
with label instructions they will not cause unreasonable adverse effects. FIFRA also
provides that the EPA can designate the more dangerous pesticide products for restricted
use by certified applicators only.
FIFRA fees are as follows:
•

The Pesticide Registration Improvement Extension Act of 2012 (PRIA 3, expiring on
September 30, 2017) authorized two fees by amending the FIFRA of 1988.

•

Pesticides maintenance fee — Section 4(i) of the FIFRA authorizes the EPA to
charge annual maintenance fees for pesticide registrations.

•

Enhanced registration services fee — Section 33 of FIFRA authorizes fees for
services related to registration of pesticides in the United States. This fee-for-service
provision sets deadlines by which the EPA must make decisions on applications.
Congress must authorize the EPA to obligate the PRIA fees it collects in the EPA’s
annual appropriation act.

5. The Clean Water Act (CWA) of 1972
The CWA was based on the Federal Water Pollution Control Act of 1948 (amended 1956
and 1966). It was amended in 1977, reauthorized in 1981, and amended again several
times since. Two major related pieces of legislation are 1) the Water Quality Act of 1987
and 2) the Beaches Environmental Assessment and Coastal Health Act of 2000.
a. The Federal Water Pollution Control Act, 33 U.S.C.7251 et seq., of 1948, was
amended in 1956 and 1966 to authorize a program of grants to municipalities for
construction of sewage treatment plants and institute a program of mandatory water
quality standards for interstate waters, and was substantially revised in 1972 by
amendments referred to as the CWA. The stated objective of the CWA is to restore
and maintain the “chemical, physical, and biological integrity of the Nation’s waters,”
and the stated goals were to achieve “fishable and swimmable” waters by 1983 and
total elimination of pollutant discharges into navigable waters. The CWA spells out
requirements for water quality standards and an implementation system of permits for
technology-based effluent limitations that apply to industrial and municipal
discharges. Congress made certain fine-tuning amendments of the CWA in 1977 and
reauthorized and revised the construction grants program in 1981.
b. The WQA brought major revisions to the CWA. It authorized new water quality
programs; reauthorized existing programs; called for additional water-quality-based
pollution controls; increased requirements pertaining to toxics, sludge, and nonpoint
sources of pollution; and authorized funds for nonpoint source grants, the National
Estuary Program, and the Great Lakes and Chesapeake Bay programs. The WQA also
reauthorized the construction grants program through 1990 and provided for its
phase-out and replacement with a State Revolving Fund program, to be capitalized by
grants to the states.
c. The Beaches Environmental Assessment and Coastal Health Act of 2000 amended the
CWA to improve the quality of coastal recreation waters. This act authorizes a
national grant program to assist state, tribal, and local governments in developing and
implementing monitoring and public notification programs for their coastal recreation
waters. It also requires states to adopt improved water quality standards for pathogens
and pathogen indicators and requires the EPA to conduct studies and develop
improved microbiological water quality criteria guidance.
6. Food Quality Protection Act of 1996 (FQPA)
The EPA regulates the allowable levels of pesticide residues on food under section 408 of
the Federal Food, Drug, and Cosmetic Act (FFDCA). Section 408 was amended in 1996
as part of the FQPA. The FQPA amended the FFDCA by establishing a risk-only
standard for allowable pesticide residues (called tolerances) in raw and processed food.

Under the amended terms of the FFDCA, the EPA can approve a tolerance only if it is
considered safe, and the law defines “safe” as bearing “a reasonable certainty of no
harm.” The FQPA also directed the EPA to give special consideration to children’s health
in establishing or reviewing pesticide tolerances, and directed the EPA to reassess by
2006 all tolerances in existence before 1996 to make sure those tolerances satisfy the new
safety standard.
7. Hazardous Waste Electronic Manifest Establishment Act
On October 5, 2012, the President signed the Hazardous Waste Electronic Manifest
Establishment Act (Public Law 112-195). The act provided for the electronic submission
of hazardous waste manifests to the EPA and established a mechanism for financing the
development and operation of the program through user fees. The EPA’s access to the
fees is subject to annual appropriations. The Resource Conservation and Recovery Act of
1976 (RCRA) requires hazardous waste handlers to document information on the waste’s
generator, destination, quantity and route. The current tracking system relies on paper
manifests. An electronic manifest system will increase transparency and public safety,
making information on hazardous waste movement more accessible to the, states, and the
public. As part of its goal to reduce the burden on regulated entities, where feasible, the
EPA is developing a program to electronically collect manifests to reduce the time and
cost associated with complying with regulations governing the transportation of
hazardous waste. When fully implemented, e-Manifest is estimated to reduce the
reporting burden for firms regulated under RCRA’s hazardous waste provisions by $75
million annually.
8. Leaking Underground Storage Tank (LUST) Trust Fund
The SARA also amends Subtitle I of the Hazardous and Solid Waste Amendments and
authorizes the establishment of a LUST Trust Fund to clean up releases from leaking
underground petroleum storage tanks. The LUST Trust Fund is financed by taxes on
motor fuels. Owners and/or operators are initially responsible for cleanup of their leaking
tanks. At abandoned sites or at sites where owners/operators do not meet their cleanup
responsibilities, the Trust Fund provides the resources for the EPA or states to undertake
or enforce necessary corrective action and to recover costs expended from the fund.
LUST Trust Fund resources are only available through appropriation.
The EPA’s objective is to implement this program primarily through cooperative
agreements with states. To this end, the agency may take corrective action when an
owner/operator or a state fails to respond to a substantial threat to human health and the
environment.
Title XV, Subtitle B, of the Energy Policy Act of 2005 made major changes to the EPA’s
LUST Program to further reduce underground storage tank releases to the environment. It
also authorized the EPA to develop new inspection requirements and provide grants with
LUST Trust Fund money to the states to expand their inspections of leaking underground
storage tanks and undertake compliance assistance and other leak prevention activities.
The EPA was authorized under this new act to enforce fuel standards.

9. Marine Protection, Research, and Sanctuaries Act of 1972 (MPRSA)
The Marine Protection, Research, and Sanctuaries Act generally (unless authorized by
permit) prohibits (1) the transportation of material from the United States for the purpose
of ocean dumping, (2) the transportation of material from any location for the purpose of
ocean dumping by U.S. agencies or U.S.-flagged vessels, and (3) the dumping of material
transported from outside the United States into the U.S. territorial sea (MPRSA § 101).
Permits under the MPRSA may not be issued for the dumping of sewage sludge or
industrial waste (MPRSA § 104B (a)) or radiological, chemical, and biological warfare
agents; high-level radioactive waste; or medical waste (MPRSA § 102(a)). The dumping
at sea of low-level radioactive waste requires a joint resolution of Congress. (MPRSA §
104(i)). Permits may be issued for other materials if the dumping will not unreasonably
degrade or endanger human health, welfare, or the marine environment (MPRSA §
102(a) and 103(a)). The EPA is charged with developing criteria to be used in evaluating
applications for ocean dumping permits (MPRSA § 102(a)). The EPA also is responsible
for designating recommended sites for ocean dumping (MPRSA § 102(c)). The EPA is
the permitting authority for ocean dumping of all materials except dredged material
(MPRSA § 102(a)). The U.S. Army Corps of Engineers is the permitting authority for
dredged material, subject to EPA concurrence and the use of the ocean dumping criteria
developed by the EPA (MPRSA § 103).
10. Oil Pollution Act of 1990 (OIL)
The Oil Pollution Act establishes liability for oil spill response costs and damages, and
imposes significant civil and criminal penalties. Liable parties must pay oil spill response
costs and to compensate parties damaged by them. Additional money for cleanup and
compensation is available through the Oil Spill Liability Trust Fund, managed by the
U.S. Coast Guard. This fund is supported by an oil tax but subject to annual
appropriations. The fund is to be used by the federal government to fund oil spill
response, to perform natural resource damage assessments, and to compensate parties
who have been damaged by the oil spill when the responsible party does not pay for those
costs.
The OPA also requires double hulls on most oil tankers and barges, and contingency
planning on the part of potential dischargers and federal, state and local governments.
The law continues to allow states to impose unlimited liability on shippers and contains
various provisions to ensure navigation safety. The OPA authorizes research on
environmental impacts and response methods of spills. It also amends the CWA to
require the President to direct all public and private response efforts for certain types of
discharge events.
a. 1990 Amendment — Included Responsible Parties’ oil spill and natural resource
damage assessment costs along with annual appropriations for research, prevention,
and preparedness activities; functions; and actions in support of implementation.
11. Pollution Prevention Act of 1990 (PPA)
The PPA requires the EPA to establish an Office of Pollution Prevention to develop and
coordinate a pollution prevention strategy and develop source reduction models. In
addition to authorizing data collection on pollution prevention, the act requires owners

and operators of facilities required to file an annual toxic release form under section 313
of EPCRA to report annually on source reduction and recycling activities.
Enactment of the PPA added a new direction to U.S. environmental protection policy.
From an earlier focus on reducing or repairing environmental damage by controlling
pollutants at the point where they are released to the environment (e.g., at the end of the
pipe or smokestack, at the boundary of a polluter’s private property, in transit over public
highways and waterways, or after disposal), Congress looked to reduce generating
pollutants at their point of origin. This policy change was based on the notion that
traditional approaches to pollution control had achieved progress but should be
supplemented with approaches that control pollution from dispersed or nonpoint sources
of pollution.
12. Radon Abatement Act of 1988
In October 1988 Congress amended the Toxic Substances Control Act (TSCA) by adding
Title III-Indoor Radon Abatement (15 U.S.C. 2661 et seq., P.L. 100-551). The basic
purpose of Title III is to provide financial and technical assistance to the states that
choose to support radon monitoring and control; neither monitoring nor abatement of
radon is required by the Act.
13. Resource Conservation and Recovery Act of 1976 (RCRA)
Congress passed RCRA in 1976 as an amendment to the Solid Waste Disposal Act of
1965. Major amendments and /or related legislation since include:
•

Hazardous and Solid Waste Amendments of 1984

•

Superfund Amendments and Reauthorization Act of 1986

•

Title XV, Subtitle B, of the Energy Policy Act of 2005

•

Hazardous Waste Electronic Manifest Act of 2012

14. Safe Drinking Water Act of 1974 (SDWA)
The SDWA, as amended in 1986 and 1996, is the basis for protecting drinking water
systems that serve the public. The act directs the Administrator of the EPA to establish
primary (enforceable) and secondary (advisory) national drinking water regulations based
on maximum contaminant levels of specific pollutants, provides for state enforcement of
the requirements, and establishes a program for protection of underground sources of
drinking water. It also provides for a Drinking Water State Revolving Fund (DW-SRF) to
be established in each state to lend money (sometimes with additional grants as well) to
drinking water systems in carrying out the act.
15. The Solid Waste Disposal Act
As amended by RCRA and the Hazardous and Solid Waste Amendments of 1984, this act
is intended to address the health and environmental dangers arising from the generation,
management and disposal of solid and hazardous wastes. Subtitle C of RCRA provides
for comprehensive cradle-to-grave regulation of hazardous wastes: owners or operators of
hazardous waste treatment, storage or disposal facilities must obtain a permit to operate,
and must meet standards appropriate to the type of unit managing the waste; hazardous

wastes must be treated prior to land disposal; and offsite movements of hazardous wastes
must be accompanied by a document known as a “manifest.”
The requirement for a manifest applies from the waste’s point of generation to its point of
final treatment or disposal, and helps ensure that wastes are not discarded
indiscriminately in the environment by listing precise origin, volume and amounts of
each waste. Although much of RCRA is focused on the current and future management
of hazardous wastes, the statute also includes a significant cleanup program: for example,
owner/operators seeking an operating permit are required to clean up past releases of
hazardous wastes and constituents at their facility in order to obtain a permit. In addition,
RCRA Subtitle D establishes a largely state-administered program for the management of
solid, non-hazardous wastes.
16. Toxic Substances Control Act of 1976 (TSCA)
Congress enacted TSCA to test, regulate and screen all chemicals produced in or
imported into the United States. Many thousands of chemicals and chemical compounds
are developed each year with unknown toxic characteristics. To prevent tragic
consequences should they come in contact with the general public, TSCA requires that
any chemical that reaches the consumer marketplace be tested for possible toxic effects
prior to first commercial manufacture.
Any existing chemical that is determined to pose unreasonable health and environmental
hazards is also regulated under TSCA (example: polychlorinated biphenyls, or PCBs, are
controlled under TSCA). Procedures are also authorized for corrective action under
TSCA in cases of cleanup of toxic materials contamination.
Fees — TSCA authorized two major fees:
a. Premanufacturing Notice (PMN) fee — A PMN fee is collected for the review and
processing of new chemical PMN submitted to the EPA by the chemical industry.
b. Accreditation and Certification Fee — TSCA Title IV, Section 402(a)(3), mandates
the development of a schedule of fees to cover the costs of administering and
enforcing the standards and regulations for persons operating lead training programs
accredited under the 402/404 rule and for lead-based paint contractors certified under
this rule.
Changes to TSCA, including fees, are being proposed in TSCA amendments being
considered by Congress.
17. The National Environmental Policy Act of 1969 (NEPA)
NEPA established a broad national framework for assessing the environmental impacts of
major federal actions that significantly affect the quality of the human environment.
NEPA has two major objectives: to prevent damage to the environment and to ensure that
federal agency decision-makers give appropriate consideration and weight to
environmental factors before taking any major federal action that significantly affects the
quality of the human environment.

NEPA also established the Council of Environmental Quality (CEQ) to advise the
President on environmental matters. The CEQ promulgated regulations implementing
section 102(2) of NEPA. Under NEPA and the CEQ regulations, unless an action is
categorically exempted, agencies conduct an environmental review in the form of an
Environmental Assessment or Environmental Impact Statement, as appropriate. These
reviews analyze the environmental impacts of and alternatives to the proposed action.
Most of the EPA’s actions are not subject to NEPA because either they are statutorily
exempt from NEPA or functionally equivalent to NEPA. EPA actions that are subject to
the NEPA include issuance of the National Pollutant Discharge Elimination System
permits for new sources under the CWA, award of grants for certain projects funded
through the EPA’s annual appropriations acts, research and development activities, and
facilities construction. The EPA has adopted a voluntary NEPA policy under which it
may prepare the NEPA documents voluntarily when it is not legally required to do so if
such documents would be beneficial in addressing agency actions. In addition, in
conjunction with other statutes, the NEPA generally provides authority for the EPA to
conduct international environmental activities.
B. Appropriation Statutes
Congressional appropriations statutes provide discretionary funding for federal government
activities. Congress has a two-step process associated with discretionary spending:
authorization bills and appropriations bills. Authorization bills establish, continue or modify
agencies or programs. Appropriations measures subsequently provide funding for the
agencies and programs authorized (although occasionally Congress will include authorization
in an appropriations bill). Almost all of the EPA’s programs are generally considered to be
discretionary, as opposed to mandatory programs such as Social Security or Medicare.
There are generally two main types of appropriation statutes:
1. Annual Appropriations
Each year Congress passes annual appropriations to fund discretionary programs for a
given fiscal year. These appropriations generally include specific funding levels with
directives and requirements in law and report language.
2. Supplemental Appropriations
Congress also may pass supplemental bills to provide additional funding, usually for
emergency purposes, such as for natural disasters. Examples include the Disaster Relief
Appropriations Act; Hurricane Sandy; Coastal Wetland Planning, Protection and
Restoration Act funds; the Recovery Act; the RESTORE Act, etc. Supplemental
appropriations normally also contain specific tracking reporting and other requirements.
Chapter 5, “EPA Sources of Funding and Associated Processes,” describes the major steps,
processes and major rules governing annual and supplemental appropriations.
C. Government-Wide Management and Administrative Statutes
Below are some of the most important statutes that direct how the federal government must
manage its funds. This is not a comprehensive list, and financial managers should consult

with the Office of General Counsel about whether additional statutes might apply to major
upcoming decisions.
1. Antideficiency Act, 31 U.S.C. 1314,1342 & 1517 (ADA)
The ADA consists of provisions of law passed by Congress (beginning in the nineteenth
century and later codified in Title 31 of the U.S. Code) to prevent departments and
agencies from spending their entire appropriations during the first few months of the
year. (Note – the acronym is also used for American with Disabilities Act)
a. The ADA prohibits:
•

Spending in excess of an amount available in an appropriation.

•

Authorizing expenditures in advance of an appropriation.

•

Accepting voluntary services without authority.

•

Spending in excess or in advance of an apportionment.

•

Entering into contracts that exceed the enacted appropriations for the year.

•

Exceeding budgetary authority, including apportionments

•

Purchasing services and merchandise before appropriations are enacted.

b. The ADA:
•

Requires that the OMB apportion the appropriations, that is, approve a plan that
spreads out spending over the fiscal period for which the funds were made
available.

• Requires, subject to the OMB’s approval, the head of each executive agency to
prescribe by regulation a system of administrative control of funds (31 U.S.C.
1514(a)).
• Restricts deficiency apportionments to amounts approved by the agency heads
only for “extraordinary emergency or unusual circumstances.”
•

Establishes penalties for ADA violations. Violations are obligations or
expenditures in excess of the lower of the amount in the affected account, the
amount apportioned, or administrative subdivision of funds.

2. Budget and Accounting Act and Supplemental Appropriations Act
The Budget and Accounting Act of 1921 and the Supplemental Appropriations Act of
1955 provide the budget and appropriations authority of the President, budget contents
and submissions to Congress, supplemental appropriations, and advances. The specific
requirements for recording obligations, such as documentary evidence, are set forth in 31
U.S.C. 1501.
3. Chief Financial Officers Act of 1990 (CFO Act)
The CFO Act requires 24 federal departments and agencies to prepare and audit financial

statements for trust funds, revolving funds and commercial activities accounts. As one of
the 24 agencies, the EPA follows the OCFO Act structure.
CFOs are designated by each federal department or agency and have the fundamental
responsibility to assure that its use of public funds adheres to the terms of the pertinent
authorization and appropriations acts, as well as any other relevant statutory provisions.
The Assistant Administrator, Office of the Chief Financial Officer, serves as the EPA’s
CFO. Previous to the CFO Act, the EPA relied on a comptroller within the Office of
Administration and Resource Management to coordinate the agency’s financial
operations. Financial Statement Audits are conducted or supervised and issued by the
EPA Office of Inspector General each year by November 15 (unless delayed by approval
of OMB).
4. Congressional Budget Impoundment and Control Act of 1974 (Impoundment Act)
Under this act, an impoundment is defined as an action or inaction by an officer or
employee of the United States that precludes the obligation or expenditure of budget
authority provided by Congress. There are two types of impoundment actions: deferrals
and rescissions.
a. A deferral is a postponement of budget authority in the sense that an agency
temporarily withholds or delays an obligation or expenditure. Deferrals may be
proposed by agencies but must be communicated to Congress by the President in a
special message. Deferred budget authority may not be withheld from obligation
unless Congress passes legislation to approve the deferral and that legislation is
enacted.
b. A rescission involves the cancellation of budget authority previously provided by law
(before that authority would otherwise expire).
If a federal agency fails to obligate appropriated funds, the Comptroller General is
authorized by 2 U.S.C. 682 to bring a civil action against that agency. The expiration of
budget authority, or delays in obligating if resulting from a legitimate programmatic
delay or ineffective or unwise program administration, are not regarded as impoundments
unless the facts establish that the agency intentionally withheld funds.
For short title of Title X of Pub. L. 93–344, found at 2 U.S.C. 681–688, which enacted
this chapter as the ‘‘Impoundment Control Act of 1974,’’ see section 1(a) of Pub. L. 93–
344, as amended, set out as a note under section 621 of this title. The 1974 Congressional
Budget and Impoundment Control Act modified the role of Congress in the federal
budgetary process. It created standing budget committees in both the House and the
Senate, established the Congressional Budget Office, and moved the beginning of the
fiscal year from July 1 to October 1.
5. The Digital Accountability and Transparency Act of 2014 (DATA Act)
The DATA Act aims to make information on federal expenditures more easily accessible
and transparent. The act requires the EPA to work to make detailed information available
on all procurements, grants and interagency agreements.

6. Economy Act of 1932
Federal agencies frequently provide goods or services to other federal agencies. The
Economy Act authorizes agencies to obtain goods or services either directly from other
federal agencies or through contracts awarded by other agencies when it promotes
economy and efficiency for the government. Both agencies must have the authority for
the underlying activities proposed in the agreement. At the EPA, the mechanism to do so
is an interagency agreement between the EPA and the other federal agency.
An Economy Act agreement may not exceed the period of availability of the source
appropriation. In addition, a time-limited appropriation (such as the EPA’s
Environmental Programs and Management appropriation) that is obligated under an
Economy Act agreement must be deobligated at the end of its period of availability to the
extent that the performing agency has not performed or incurred valid obligations under
the agreement. For any appropriation, this rule applies at the end of the source
appropriation’s period of availability.
7. Federal Managers’ Financial Integrity Act of 1982 (FMFIA)
The FMFIA is designed to:
•

Protect government resources from fraud, waste, abuse or mismanagement.

•

Require systematic self-examination of management controls by program managers.

•

Require agency heads to report annually to the President and Congress on the state of
management control systems, identify material management control weaknesses, and
provide corrective action plans and milestones.

The FMFIA requires the establishment of systems of internal accounting and
administrative controls, according to standards prescribed by the Comptroller General,
which provide reasonable assurance that:
•

Obligations and costs comply with applicable law.

•

Funds, property and other assets are safeguarded against waste, loss, unauthorized use
or misappropriation.

•

Agency revenues and expenditures are properly recorded and accounted for to permit
the preparation of accounts and reliable financial and statistical reports, and to
maintain accountability over assets. The agency’s annual report must provide a
separate statement of whether the agency’s accounting system conforms to the
principles, standards and related requirements prescribed by the Comptroller General
under Section 112 of the Accounting and Auditing Act of 1950.

OMB Circular A-123 establishes broad guidelines for agency self-evaluation of
management control systems. The EPA follows A-123 with an annual process of internal
control reviews and A-123 assessments. The OCFO issues annual guidance to the agency
on how each year’s process will be organized and managed.

8. Government Performance and Results Act of 1993 (GPRA) and GPRA
Modernization Act of 2010 (GPRAMA)
Originally, GPRA was enacted to align strategic goals with annual plans, budgets and
serves as a basis for financial and performance accountability reporting. Congress passed
GPRAMA on January 4, 2011. It made substantial changes to the original GPRA law:
•

It continues three agency-level products (the EPA Strategic Plan, Annual Plan, and
Budget and Annual Performance Report) from the GPRA 1993, but with changes.

•

It establishes new products and processes that focus on goal-setting and performance
measurement in policy areas that cut across agencies (Priority Goals, “unmet goals”
report).

•

Brings attention to using goals and measures during policy implementation.

•

Increases reporting on the Internet.

•

Requires individuals, Goal Leaders (i.e., officials named by the agency head or COO
who will be held accountable for leading implementation efforts to achieve a goal), to
be responsible for some goals and management tasks.

In making these changes, the GPRAMA aligns the timing of many products to coincide
with Presidential terms and budget proposals. The law also includes more central roles
for the OMB, which advances the President’s policy preferences. The GPRAMA also
contains specific requirements for consultations with Congress. By design, many of the
GPRAMA’s products are required to be submitted to Congress for scrutiny and potential
use. The law also provides opportunities for Congress and non-federal stakeholders to
influence how agencies and the OMB set goals and assess performance.
9. Impoundment Control Act of 1974 (please see 4. Congressional Budget
Impoundment and Control Act of 1974.)
10. Independent Offices Appropriations Act (IOAA)
Codified at 31 U.S.C. 9701, the IOAA provides agencies with authority to collect user
fees in certain circumstances. The IOAA does not provide agencies with authority to
“retain and use” the fees, so any monies agencies collect under the IOAA must be
deposited into the Treasury as miscellaneous receipts. The OMB provided implementing
guidance on the IOAA in OMB Circular A-25. Under court decisions sustaining the
OMB’s interpretation of the IOAA, agencies may only charge fees to “identifiable
recipients for a measurable unit or amount of government service or property from which
he derives a special benefit.” Fees may not be imposed under the IOAA “when the
identification of the ultimate beneficiary is obscure and the service can be primarily
considered as benefitting broadly the general public.”
11. Inspector General Act of 1978
This act, amended 1988, requires the Inspector General to conduct and supervise
independent and objective audits, evaluations, investigations and other reviews relating to
the agency programs and operations (including contracts, grants, and acquisition

management; financial transactions; fund control; and financial statements). The
Inspector General also makes recommendations to promote economy, efficiency, and
effectiveness; prevents and detects fraud, waste, and abuse; and keeps agency heads and
Congress fully and currently informed of problems. The EPA Office of the Inspector
General (OIG) conducts and promotes program evaluations of the EPA programs and
activities (including process, outcome, impact and cost-benefit).
The OIG Office of Investigations is a law enforcement entity that conducts criminal, civil
and administrative investigations of possible violations of laws under the criminal code
and alleged misconduct and abuse by agency, contractor or grantee employees. To ensure
objectivity, the Inspector General Act provides the Inspector General with independent
authority to carry out activities such as determining what reviews to perform and
obtaining all necessary information, developing and executing budgets through
independent appropriations, selecting and appointing OIG employees including Senior
Executive Service positions, and entering into contracts. This independence protects the
OIG from interference by agency management and allows it to function as the agency’s
fiscal and operational watchdog.
From the budget formulation process through execution, agency management may not
reduce or reallocate OIG resources if the OIG conforms to OMB and Congressional
guidance. Under the provisions of the IG Reform Act, the OIG may require OMB to
report to Congress if the amount included for the OIG is insufficient for the OIG to carry
out its mission.
12. “M” Account Legislation
The National Defense Authorization Act of 1990 amended controls on the availability of
appropriation accounts and the procedures for closing appropriation accounts (31 U.S.C.
1551–57). The act cancelled all merged or “M account” surplus authority (unobligated
balances in expired appropriations) as of December 5, 1990. The act also requires that,
from 1990 on, unobligated balances and unliquidated obligations will be cancelled five
years after an appropriation has expired, and then that account will be closed out.
The EPA has an exception to the five-year cancellation requirement time period. The
EPA requested and received special statutory authority for the agency’s time-limited
appropriations to remain available to liquidate obligations for seven years after the period
of availability for new obligations expires (Public Law 106-377). This means that the
EPA’s accounts with obligation deadlines (normally called two-year accounts due to the
two-year deadline to obligate funds) have a total of nine years to outlay all funds (2 + 7 =
9). This special authority came into effect in fiscal year 2001.
After an appropriation account has been cancelled or closed out, bills received against
cancelled obligations must be paid from current appropriations available for the same
purpose. The total amount of charges to a current appropriation account may not exceed 1
percent of the total appropriations for that account. OMB Bulletin 91-07, which
implements this legislation, requires federal agencies to have available up to 1 percent of
current-year appropriations to liquidate liabilities that arise from accounts that have been

cancelled. Should a payment be needed that exceeds the 1 percent funding availability,
the agency must go back to Congress and request a supplemental appropriation.
13. Miscellaneous Receipts Act (MRA)
The MRA requires any agency official who receives or is in constructive receipt of funds
(i.e., controls how the funds are used) from an outside source (including other federal
agencies) without explicit authority must deposit the funds into the Treasury’s general
fund.
14. Money and Finance
Public Law 97-258, § 1, September 13, 1982, 96 Statute 877, provides that “Certain
general and permanent laws of the United States, related to money and finance, are
revised, codified, and enacted as title 31, United States Code, ‘Money and Finance’…”:
This includes:
•

Sections 1341–1342, 1349–1351, 1511–1519 (part of the Antideficiency Act, as
amended).

•

Sections 1101, 1104–1108, 3324 (part of the Budget and Accounting Act, 1921, as
amended).

•

Sections 1501–1502 (part of section 1311 of the Supplemental Appropriations Act of
1950).

•

Sections 1112, 1531, 3511–3512, 3524 (part of the Budget and Accounting
Procedures Act of 1950).

D. Government-Wide Guidance and Regulations
Federal agencies do not independently determine how they should follow the management
statutes discussed above. Specific federal offices and agencies issue regulations, guidance,
circulars and other direction that agencies must follow. The most prominent guidance
documents, sources and legal opinions upon which government-wide budgeting and
accounting depend are:
•

OMB Circulars, particularly:
○

A-11—Preparation, Submission and Execution of the Budget

○

A-123—Management’s Responsibility for Internal Control

○

OMB Circulars at http://www.whitehouse.gov/omb/circulars_default/

•

Government Accountability Office (GAO) rulings and opinions—Green Book, Red
Book, etc. http://www.gao.gov/

•

Office of Personnel Management (human resources), GSA (space, procurement),
Department of Commerce’s National Institute of Standards and Technology (cybersecurity), Treasury, etc.

Below are some more detailed descriptions of the some of the most critical circulars and
guidance documents pertaining to federal fiscal management.

1. Executive Orders (EOs) and Presidential Memoranda
Through EOs and memoranda, Presidential administrations direct specific governmentwide actions by Executive Branch officials. This guidance covers general management
goals (such as transparency), government-coordinated action on specific challenges (such
as the Deepwater Horizon oil spill) and general policy direction (such as climate change
adaptation and environmental justice); it directs agency heads and officials to take or
consider certain actions.
2. Office of Management and Budget (OMB) Circular A–11
Contains many detailed instructions and requirements for Federal budget and financial
management, including:
a. OMB Circular A–11 (2014) requires the agency head to report any ADA violations to
the President through the OMB Director, Congress and the Comptroller General.
Under the ADA, obligating or expending more than the amount in the Treasury
Account Fund Symbol, or the amount apportioned or the amount in any other
subdivision of funds identified in agency fund control regulations as being subject to
the ADA, will be cause for appropriate administrative discipline. (Fuller description
of the ADA’s provisions and the penalties for violating the ADA can be found in the
ADA description in this document.)
ADA violations are potentially criminal, and any violation must described in writing
through the EPA’s CFO to the President. All officials involved will be asked to
explain in detail how the situation occurred, how it was rectified and what measures
were taken to prevent any re-occurrence. Violators will be subject to appropriate
administrative discipline, including — when circumstances warrant — a written
reprimand, suspension from duty without pay or removal from office. In addition, if
convicted of willfully and knowingly overobligating or overexpending the amount,
violators shall be fined not more than $5,000, imprisoned for not more than two
years, or both.
b. OMB Circular A-11 (Part 2), Preparation and Submission of Budget Estimates,
contains government-wide requirements and guidance on the preparation and
submission of federal budget requests for the next budget cycle (upcoming fiscal
years). Circular A-11 includes policies and instructions for building the budget
database, preparing the budget documents, providing supporting data for the budget
submission and transmitting the budget.
In relation to budget formulation, OMB Circular A-11 requires agencies to report
costs in terms of object classification, defined in Part II of the Circular. Object
classification is used to report obligations for each account according to the nature of
the goods and services procured. Obligations are categorized by their purpose and are
designated to one of the following groupings: personnel compensation and benefits,
contractual services and supplies, acquisition of capital assets, grants and fixed
charges, and other. These classifications tie into RMDS 2590 Part IV, which includes
all of the EPA’s sub-object class codes and definitions.

c. OMB Circular A-11 (Part 4), Instruction on Budget Execution, contains governmentwide requirements and guidance regarding budget execution. Contents include
guidance on requirements and instructions, concepts, agency accounting and fund
control systems, reports on budget execution, apportionments, rescissions and
deferrals, etc.
3. OMB Circular A-123, Management’s Responsibility for Internal Controls
This circular defines management’s responsibility for internal control in federal agencies.
It provides guidance on using the range of administrative controls. Such controls include
program, operational and administrative areas, as well as accounting and financial
management. Circular A-123 and the statute it implements, the FMFIA of 1982, are at the
center of the existing federal requirements to improve internal control. Internal controls
— organization, policies and procedures — are tools to help program and financial
managers achieve results and safeguard the integrity of their programs.
4. Opinions of the Office of Legal Counsel (OLC)
OLC provides definitive legal advice to Executive Branch agencies on appropriations
law. Based on the Constitution’s separation of powers principle, when there is a conflict
between the OLC’s opinions and those of the Comptroller General of the GAO (which is
an arm of Congress), the OLC’s positions are binding on the Executive Branch. See
Memorandum for Janis A. Sposato, GC, Justice Management Division, from John O.
McGinnis, Deputy Assistant Attorney General, OLC (August 5, 1991), separation of
legislative and executive powers (the McGinnis Memo). The EPA has implemented the
OLC’s advice in EPA Order 2515.1, Policy and Procedures for Relieving Certifying and
Disbursing Officers from Liability (March 17, 2000).
5. Government Accountability Office (GAO)
The Principles of Federal Appropriations Law, also known as the “Red Book,” is a
document updated and published by the GAO. The OLC recognizes that while GAO
decisions are not legally binding on Executive agencies, the GAO’s opinions are “useful
sources” on matters of appropriations law. See Memorandum for Emily C. Hewitt,
General Counsel, General Services Administration, from Richard L. Shiffrin, Deputy
Assistant Attorney General, OLC (August 11, 1997). The EPA’s Office of General
Counsel adheres to GAO positions that do not conflict with OLC positions, unless the
General Counsel determines otherwise in a specific case.
6. General Services Administration (GSA) Regulations
The GSA issues government-wide regulations on how agencies conduct business,
including procurement, property management, travel and acquisition. These include:
a. GSA Federal Acquisitions Regulation (FAR) is jointly issued by the Department of
Defense, the GSA, and the National Aeronautics and Space Administration for use by
Executive agencies in acquiring goods and services.
b. GSA Federal Management Regulation (FMR) is the successor regulation to the
Federal Property Management Regulation (FPMR). It contains updated regulatory
policies originally found in the FPMR.

c. GSA Federal Travel Regulation (FTR) is the regulation contained in title 41 of the
Code of Federal Regulations, chapters 300 through 304, which implements policies
for travel by federal civilian employees and others authorized to travel at government
expense.
GSA.gov has links to these regulations, as well as travel per diem rates and other
information.

Chapter 3: Federal and EPA Budget and Financial Terms
Summary
The federal government as a whole, and the EPA specifically, use many specialized terms in
budget and financial management. Some of these terms have more precise or slightly different
meanings than they do when used outside government. Below are some short descriptions of
some of the most important terms and links to other, more extensive explanations.
Federal financial management is generally divided into two parts:
•

Formulation — planning for what will be spent in future years. (Thus, formulating budgets in
fiscal year [FY] 2015 for FY 2016 and beyond.)
http://intranet.epa.gov/ocfo/budget/formulation.htm

•

Execution — ensuring that funds are correctly spent. (Thus, in FY 2015, executing the FY
2015 budget and managing monies from prior fiscal years.)
http://intranet.epa.gov/ocfo/budget/execution.htm

A. Federal Spending Terms
The word “spend” has no particular defined meaning in the federal government, but each step
of the U.S. federal funding process has specific definitions government-wide. Below are the
major spending terms corresponding to the order in which the dollars are provided (and, in
parentheses, the organization performing the action).
1. Appropriation (Congress): Congress passes a bill giving (appropriating) particular
entities permission to spend a certain amount of money for a particular purpose for a set
period of time.
2. Apportionment (OMB): The Office of Management and Budget, on behalf of the
Executive Branch, allows agencies to use specified amounts of appropriated dollars in
Federal financial systems for particular programs.
•

It violates the Antideficiency Act (ADA) to use federal dollars without an
apportionment.

3. Allotment (Department): Cabinet-level agencies allot funds to their bureaus; the EPA
has one central allotment residing in the Office of Budget.
•

The EPA also uses the word “allotment” in the State Revolving Funds program.

4. Allocation or Allowance (Agency, Bureau): The EPA allocates or provides an
allowance to particular parts of the agency (national program managers [NPMs] and EPA
regions or portions thereof).
•

The EPA designates allowance holders who, once they receive the allocation, can
commit, obligate and outlay their portions of the EPA’s budget.

5. Commitment (Allowance Holder): An administrative reservation of funds for a
particular purpose in anticipation of their obligation.
6. Obligation (Allowance Holder): A definite legal liability of the government to pay
money for goods and services ordered or received. For example, an obligation arises
when a grant or contract is awarded.
•

Recording an Obligation — Formally recording the obligation in a federal financial
system (Compass for EPA) to satisfy (recognize) the government’s liability.

7. Expenditure, Liquidation, Disbursements, Outlays (Normally Accounting): The EPA
pays the bill. The EPA expends, disburses or outlays the funds. Accounting distinction is
that when the EPA uses a resource it is expended; when it actually sends cash, it is
disbursed or outlaid.
•

Accruals — The EPA uses accruals to account for the difference between when
something is done and when the bill is paid. An accrual is an accounting entry with
estimated cost of a resource used for which the bill has not been paid. For example, in
payroll the cost of your time for work is accrued.

8. Remaining Balances: Financial managers must keep a close eye on fund balances, the
name for which is generally: “un” + the basic budget term. The three major types are:
•

Uncommitted Funds — How much does an allowance holder have allocated that has
not been committed?

•

Unobligated Balances — How much does an allowance holder have committed that is
not yet obligated?

•

Unliquidated Obligations — How much has been obligated but not expended? This is
sometimes called unexpended, undisbursed or un-outlaid, but (borrowing the private
business finance term “liquidity”) federal managers tend to say “unliquidated.”
Unliquidated balances are particularly important in long-term projects such as grants
— where some projects and obligations are many years old.

B. EPA Budget Management Terms
1. Allowance Holders: Many NPMs and regions control money at a lower level (normally
by Division) with each sub-organization given (allocated) monies separately as an
allowance holder.
2. Available: Available funds may be obligated and expended.
3. Cancelled: Cancelled funds may no longer be obligated or expended.
4. Carryover: Money not obligated in one year that can be obligated (or carried over) into
the next.

5. Continuing Resolution: A temporary appropriation that requires an agency to continue
operating under the status quo established by the previous appropriations acts until
Congress completes action on appropriations acts for the remainder of the fiscal year.
Generally programs cannot fund new programs (programs that were not authorized in the
prior fiscal year) — and funding is capped at the lower of PB and the previous year’s
budget.
6. De Facto: When an organization goes into the red in a detailed line of accounting
(normally due to payroll). Compass will not allow an ADA violation. Financial managers
must correct these.
7. Expired Funds: Funds that may no longer be used to create new commitments, but may
be expended (used to pay bills).
8. Fiscal Year (FY): The federal FY begins on October 1 and runs through September 30
of the following calendar year. It does not necessarily coincide with many states’ or
corporations’ fiscal years.
•

Federal pay raises and benefit cost adjustments are tied to the calendar, not fiscal year
— which complicates calculations.

9. Fiscal Quarters: The federal FY is divided into four three-month fiscal quarters:
October–December, January–March, April–June and July–September.
•

OMB and other stakeholders frequently review progress by fiscal quarter.

10. Intramural and Extramural (not formal terms):
•

Intramural includes payroll and other fixed costs — funds used inside the EPA.

•

Extramural includes contracts, grants, IAs — funds used outside the EPA.

11. Intra-Governmental Payment and Collection System: Treasury’s system for moving
funds from one federal agency to another. Used for making payments on interagency
agreements.
12. Lapse Rate: The portion of a budget not used, i.e. what percentage “lapsed.”
13. National Program Managers (NPMs): The EPA’s major programs. It is also used to
describe the headquarters portion of the program only. This means that you can count
NPMs’ budgets in two ways — with and without Regional dollars.
14. Pro Rata Reduction: When all budgets are reduced by a certain percentage.
15. Reprogramming: Money moved from program project, program area, budget object
class or organization to another.
•

All reprogramming requires Compass action. (See other sections for further
explanation.)

•

For movements between program projects and program areas, the EPA must inform
Congress when net changes are more than $1 million or 10 percent of the value of the
program. This is a cap for all EPA organizations, not just a particular region or NPM.
In addition, Congress normally specifies additional limits on particular programs.

16. Rescission: When Congress takes money back from an agency. There are two types of
rescissions:
•

Across-the-Board Rescission — Congressional appropriations reduce agency
appropriations across the board by a certain percentage.

•

Targeted Rescission — Congress pinpoints certain items, previously appropriated that
they want the EPA to give back to Treasury.

17. Responsible Program Implementation Office: The major EPA organizations consisting
of the 13 NMPs and the 10 regions.
18. Sweeps: When organizations have not met specific commitment or obligation deadlines,
the Office of the Chief Financial Officer takes back or “sweeps” the unused funds.
19. Taps: When money is needed to fund a specific project, funds are sometimes “tapped,”
or moved from other budgets.
Additional Information and Training
http://intranet.epa.gov/ocfo/budget/training.htm

Chapter 4: The EPA’s Financial and Associated Systems
Summary
The EPA relies on several major budget, financial and administrative systems to manage its
finances. Below are short descriptions for the major systems. A major challenge for all financial
managers is to make sure that data is accurately communicated and reconciled between all
systems.
A. Automated Standard Application for Payments (ASAP)
The EPA uses Treasury’s ASAP system to make and manage payments to states and tribes.
ASAP is a secure, Web-based, all-electronic payment and information application managed
by Treasury and the Federal Reserve Bank. This application is a system through which
grantee organizations receiving federal funds can draw from accounts pre-authorized by
federal agencies.
The Las Vegas Finance Center (LVFC) establishes and maintains grant accounts in ASAP
for the agency’s grant recipients. Upon obligation of assistance agreement and amendments
in Compass, the LVFC enters spending authorizations into recipients’ ASAP accounts.
Subsequently, recipient organizations initiate payment requests through ASAP to meet
immediate cash needs. Payments are disbursed next day unless recipient specifies same day
payment.
ASAP payment transactions are electronically allocated in accordance with EPA accounting
policy and uploaded to Compass daily via the Grant Payment Allocation System (GPAS).
B. Budget Automation System (BAS)
The EPA uses an Oracle database to manage its budget formulation processes. BAS is being
upgraded in stages to a new Budget Formulation System beginning in 2016.
http://intranet.epa.gov/ocfo/systems/bas/index.htm
C. Compass
The EPA’s budget execution system, built on a Momentum platform. Compass is the
agency’s core financial system. Compass data can be accessed through several reporting and
summary tools. All agency financial transactions including commitments, obligations and
expenditures must be correctly recorded in Compass. The agency also has reporting related to
Compass that provide fund managers with automatic and special report capabilities,
including:
1. Compass Business Objects Reporting (CBOR)
CBOR contains many structured reports and additional ad hoc reporting capabilities.
https://ssoprod.epa.gov/sso/jsp/BOSCHlogin.jsp
2. Compass Data Warehouse (CDW)
The CDW contains financial data for review and use by financial managers.
https://ocfosystem1.epa.gov/neis/adw.welcome

3. Compass Financials
https://compassmomentum.epa.cgipdc.net/momexauthservice/login.jsp
D. Concur
The agency’s travel management system. https://cge.concursolutions.com/
E. Contracts Payment System (CPS)
The Research Triangle Park–Finance Center contract payment staff uses the obligation
document to identify the information that is entered and used to support the processing of
contract-related documents (such as obligations and payments). Information is then entered
into the CPS via direct data entry, based on specific details on the contracts, delivery orders
and invoices.
F. Department of the Interior (DOI), Interior Business Center (IBC)
The DOI IBC provides the EPA’s payroll services through the Human Resources Line-ofBusiness (HR-LOB) function. The IBC provides high-quality, comprehensive personnel and
payroll solutions through the Federal Personnel and Payroll System, comprehensive payroll
operations services, an analytical and reporting tool (DataMart), and other related HR
systems and services. The EPA’s HR-LOB standardizes, automates and integrates the HR
and payroll systems. The system interfaces with the EPA’s time and attendance system,
PeoplePlus (described below).
G. EPA’s Acquisition System (EAS)
The data in the EAS that is required and or allowed under the Federal Acquisition
Regulations for the business process of acquiring goods and services in support of the
agency’s mission. This includes planning, solicitation, award, contract administration and
close out of contracts and purchase orders.
The sources of the data are the EPA internal acquisition process, the EPA financial systems
and the vendor/contracting community. Contractor and vendor data in the system are also
provided by the General Services Administration–managed Shared System Inventory, which
is part of the President’s Management Agenda Integrated Acquisition Environment.
H. Grant Payment Allocation System (GPAS)
GPAS is an Intranet-based application used by the LVFC in the processing of the agency’s
grant payments, as well as Local Government Reimbursements and Pollution Allowance
Auction payments.
The major functionalities of GPAS are the automatic allocation of grant payments to specific
accounting lines in accordance with business rules and the nightly upload of transactions to
Compass.
GPAS also allows for special instructions or reminders to be placed in the system as needed,
such as notes on how to apply payments, final drawdown notification, accounts receivable
notification or instructions that project officer approval is required before payment may be
made. Furthermore, project officer and/or recipient email information can be added to
generate an automated email notification each time a payment has been processed.

I. Integrated Grants Management System (IGMS)
The IGMS’s purpose is to provide an electronic format for all state grant activities and
communications between the EPA’s headquarters, EPA regions and state participants. The
system, which is currently under redesign, automates the grant process — including policy,
guidance, application, award, negotiation, tracking and reporting functions — for
participating states and regions to use in their state grant process. This system will streamline
the grant process and provide electronic management from the application phase to the
closeout phase of a project.
J. Intergovernmental Payment and Collections (IPAC) System
Treasury’s system for moving funds from one federal agency to another. Used for making
payments on interagency agreements. Sometimes turned into a verb, e.g. “The EPA IPACed
FEMA for the mission assignment.”
K. Office of Management and Budget (OMB) MAX
The OMB system that is used to collect and process most of the information required for
preparing the budget. MAX compiles the budget data using a series of schedules, or sets of
data, within the MAX database. Each schedule describes a different view of the President's
budget. Reporting categories include, but are not limited to, budget authority, obligations,
outlays, object classes, goals and discretionary versus mandatory funding. An overview of all
the schedules is provided in OMB Circular A-11, section 79.4. Data are reported at the
budget account level in MAX (see section 20.12(a)). This information is aggregated to
provide the totals presented in many of the tables in the President’s budget.
More information can be found at:
• OMB Circular A-11, section 79, “The Budget Data System”:
http://www.whitehouse.gov/sites/default/files/omb/assets/a11_current_year/s79.pdf
•

Max A-11 Tool Homepage: https://max.omb.gov/maxportal/webPage/a11/maxa11

•

Max A-11 Tool User Guide:
https://max.omb.gov/maxportal/webPage/a11/maxA11UsersGuide

L. PeoplePlus
The EPA uses PeoplePlus, an integrated management system for HR, benefits, payroll, time
and labor. Payroll guidance and instructions for the PeoplePlus system and software have
been distributed under separate cover through normal agency channels. These efforts will
improve business performance, increase efficiency and provide a more supportive work
environment.
M. Superfund Enterprise Management System (SEMS)
SEMS provides information about Superfund special accounts using information from the
CDW.

Chapter 5: Sources of Funding for the EPA and Associated Processes
Summary
The EPA uses dollars from six primary sources:
•

Regular Annual Appropriation — Each year’s annual appropriation contains detailed specific
descriptions of how the EPA may spend its funding.

•

Supplemental Appropriations — For specific “emergency” needs, Congress appropriates
money in addition to regular annual appropriations, mainly for large natural disasters like
Hurricane Katrina.

•

Reimbursables — The EPA performs work for another federal or state agency and is
reimbursed through that agency’s funds. Examples include reimbursement through the
Federal Emergency Management Agency Mission Assignments.
○

Settlements — The EPA receives some monies through the Natural Resources Damages
Assessments, arising from incidents such as the Deepwater Horizon oil spill or in specific
court settlements.

•

Trust Funds — The EPA’s main trust funds are the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA), or Superfund; OIL; and Leaking Underground
Storage Tanks. Generally, Congress must also appropriate these funds before the EPA can
use them.

•

Fees — Charges for particular services that must be independently tracked and managed.

•

Special Accounts — When the EPA enters into Superfund settlement agreements with
potentially responsible parties, money may be kept in special accounts to be used for
cleaning up that site. http://intranet.epa.gov/ocfo/superfund_A/index.htm
○

State Cost Share Provisions for Superfund State Contracts — Before the EPA can commit
or spend congressionally appropriated funds for remedial actions, a state must make
specific assurances, including providing for payment of the state’s share of the cost.

Regardless of the source of funds, federal management laws and regulations and requirements
still apply. Since annual budget appropriations are the largest source of funds for EPA
operations, this section has the most extensive discussion of how these budgets are developed
and carried out. Generally, the requirements and procedures used to manage annual
appropriations also apply to other types of funding; for example, requests for funding must be
clearly explained, funds must be apportioned by the Office of Management and Budget (OMB),
and funding commitments must be tracked and managed.
Before explaining the details of budget policies and procedures, this section lays the groundwork
for a general understanding of the annual federal budget process. Figure 1 shows the major steps
in first formulating the budget, and then executing, or carrying it out, once it is passed by
Congress. The dates for each step of the federal budget process — when there are no delays —
appear in brackets. The EPA must follow similar steps in formulating budgets for other sources
of funding, and follow the exact steps in executing budgets for all funding sources.

A. Annual Federal Budget Process
The budget formulation process at the EPA has evolved greatly. As the EPA seeks to present
its budget more effectively to Congress and to the public, it has moved toward linking
funding to measureable environmental goals and outcomes. To build a results-based budget,
the agency strives to integrate planning and budgeting in all phases of budget development.
The Federal Budget Process
FORMULATION

NPM budgets

"z"

(Mar-Aug)
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allowance holders
(November)

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deficiencies.

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Appendix D: List of Key Internal Controls
1. Apportionment
The Office of Budget (OB) reconciles the apportionment SF-132 from OMB with the agency
budgets that are loaded into Compass, which is the agency’s financial system, to ensure that
there are no discrepancies.
2. Compass Limits
EPA’s financial system, Compass, prevents funds from being committed or obligated before
the enacted budget has been loaded by the OB.
3. Fund Control Officer (FCO) Reviews
FCO signature on a document signifies that the document has been personally reviewed for
accuracy; that all accounting data are accurate and complete; that the transaction has been
accepted in Compass; and that the funds are available as to purpose, time, and amount. FCOs
reviews ensure that:
a. Funds cited are and will be used for the appropriate purpose.
b. The document cites or uses the correct account number.
c. The document cites the correct sub-object class code in terms of properly categorizing the
item, coinciding with the appropriation cited and properly identifying the item as being
administrative or programmatic in nature. Thus, all funding documents must cite the
proper fund control code in order to reach their proper destination and be processed.
d. When more than one quantity of an item is being procured, the total cost of the purchase
is correct.
e. The document has all the proper signatures (initiator and/or approving official).
f. The vehicle used is correct — e.g., it is appropriate to use a contract but not a grant or
cooperative agreement.
g. The funds are available as to purpose, time, and amount using the Compass Data
Warehouse or Status of Funds reports.
h. Only FCOs can both commit and obligate funds; they have dual responsibilities to make
financial adjustments.
i. Obligating officials are informed before a commitment is cancelled, so that the obligating
official can terminate the procurement process and return the original documents to the
allowance holder/FCO to be filed or destroyed.
4. Unliquidated Obligations (ULOs)
a. Annual required review of all ULOs that do not show financial activity.

b. Contracting officer’s representatives (CORs) and Office of Acquisition Management
officials are strongly encouraged not to leave unliquidated obligations on a funding
document that have expired for the sake of waiting until a final contract audit is done.
5. Cost Overage Reviews
a. If invoices are in excess of the recorded obligation, the Finance Center will require the
contracting officer, in conjunction with the COR, to establish whether the vendor is
entitled to payment — whether the EPA has a legal liability for the balance — before the
Finance Center will record the overrun and make payment.
6. Ratification — Senior Official Review Requirements
a. For ratification actions exceeding the small purchase limitation, the ratifying official shall
submit a memorandum to the Assistant Administrator for Administration and Resources
Management through the HCA for transmittal to the Assistant, Associate or Regional
Administrator (or equivalent level) of the person responsible for the unauthorized
commitment.
7. Recertification Requirements for Grants
All grants (in both the EPA regions and headquarters) containing no-year funds must go
through a recertification process, whereby the OB will review and reissue the funds to the
appropriate program office or Regional Administrator.
8. Headquarters Coordination for Funds Movement
Any request directing resources into a program area other than where the funds were
originally obligated will be coordinated with the Headquarters Program Office to ensure no
impact to the program.
9. Earlier Deadlines for Committing Expiring Funds
The system locks midway through the last quarter to prevent commitments against expiring
funds.
10. Signature Requirements
If there is no signature from an obligating official on the funding document, the obligation
will not be posted.

Appendix E: Management Integrity Milestones

Begin Fiscal
Year/Issue
Guidance

Integrity Act
Report
submitted as
part of PAR

Listening/Update
Meeting

l
Midyear Report
to Administrator

Year End
Decision Meeting

AA/RA Annual
Assurance Letter

Appendix F: Acquisitions (Procurement) Process

Acquisition Process

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