Funds Control Manual
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U. S. Environmental Protection
Office of the Chief Financial Officer Policy
Funds Control Manual
Administrative Control of Funds
Effective Date: Upon issuance
Supersedes February 2008
Resource Management Directives System 2520
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
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
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 government-
wide 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
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
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
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 over-
disbursement 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
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).
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
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
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:
• 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.
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
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.
• 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-institute-
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 cost-
effective 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
• 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
• 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
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.
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.
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
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
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
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
• 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, weed-
whackers, leaf-blowers, lawnmowers, tillers, etc.); marine (boat motors, watercraft, jet-
skis); 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
2. Comprehensive Environmental Response, Compensation and Liability Act of 1980
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
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
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
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
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
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
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
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
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
• 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.
• 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
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
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
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
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
• 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”
• 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
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’…”:
• Sections 1341–1342, 1349–1351, 1511–1519 (part of the Antideficiency Act, as
• Sections 1101, 1104–1108, 3324 (part of the Budget and Accounting Act, 1921, as
• Sections 1501–1502 (part of section 1311 of the Supplemental Appropriations Act of
• 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 (cyber-
security), 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 government-
wide 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
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 government-
wide 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
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
GSA.gov has links to these regulations, as well as travel per diem rates and other
Chapter 3: Federal and EPA Budget and Financial Terms
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.)
• Execution — ensuring that funds are correctly spent. (Thus, in FY 2015, executing the FY
2015 budget and managing monies from prior fiscal years.)
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
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
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
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
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
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
• 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
• 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
Chapter 4: The EPA’s Financial and Associated Systems
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
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
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
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.
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,
1. Compass Business Objects Reporting (CBOR)
CBOR contains many structured reports and additional ad hoc reporting capabilities.
2. Compass Data Warehouse (CDW)
The CDW contains financial data for review and use by financial managers.
3. Compass Financials
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
F. Department of the Interior (DOI), Interior Business Center (IBC)
The DOI IBC provides the EPA’s payroll services through the Human Resources Line-of-
Business (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
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
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”:
• Max A-11 Tool Homepage: https://max.omb.gov/maxportal/webPage/a11/maxa11
• Max A-11 Tool User Guide:
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
M. Superfund Enterprise Management System (SEMS)
SEMS provides information about Superfund special accounts using information from the
Chapter 5: Sources of Funding for the EPA and Associated Processes
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
• 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
• 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
• 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.
The budget formulation process at the EPA has evolved greatly. As the EPA seeks to
its budget more effectively to Congress and to the public, it has moved toward
to measureable environmental goals and outcomes. To build a results-based
the agency strives to integrate planning and budgeting in all phases of budget
"' House and Se
Figure 1. Federal budget
The following information is a quick overview of a typical budget formulation process:
1. National Program Manager Budgets (March–August)
The EPA works internally to prepare a proposed budget to submit to the OMB in
September (about 13 months before the start of the relevant fiscal year). Generally, in
spring or summer, the OMB provides the EPA with a budget target level that the agency
must use in planning its submission.
A critical step is for the EPA to reach out to stakeholders, state and tribal organizations to
discuss their concerns and priority areas. This input moves the agency toward achieving
goals and meeting statutory requirements, and also factors in to discussions and decisions
at the EPA’s annual planning meeting. At the planning meeting, the Administrator and
the agency's senior leadership review and prioritize major policy changes that will move
the agency toward achieving the environmental goals in the EPA’s Strategic Plan.
Based on agreements reached at the annual planning meeting, as well as through other
discussions, the Office of the Chief Financial Officer (OCFO) issues budget policy and
technical guidance to the agency to develop its budget. The Office of Budget (OB), with
input from the Office of Planning, Analysis, and Accountability (OPAA), issues a
guidance memorandum, which includes the framework and formats each agency office
should use in developing budget requests.
Each Assistant Administrator, the General Counsel and the Inspector General (IG) serve
as national program managers, or NPMs. These agency executives work with the senior
managers in their program offices and with the regions to formulate a budget request that
reflects the EPA’s Strategic Plan and the needs of headquarters and the regional offices.
The Assistant Administrators/Regional Administrators (AA/RAs) typically submit their
requests to the OCFO. The OCFO reviews and analyzes the requests and works with
various offices in the EPA to make recommendations to the agency’s senior managers.
The recommendations can take the form of a budget straw proposal and include amended
budget decisions. The agency’s senior managers meet at the annual budget forum in June
or July to discuss and make recommendations on proposed budget decisions. The
Administrator’s final decisions are communicated to the agency along with technical
instructions for preparing and submitting the OMB budget.
2. The EPA’s Budget Submission to the OMB (September–December)
a. OMB Submission — Based on the Administrator’s final decisions, the AA/RAs
prepare their portions of the agency’s OMB budget submission and provide them to
the OB and the OPAA for consolidation into a single document. Each AA/RA’s
submission is usually due to the OMB on the first Monday after Labor Day (13
months in advance of the fiscal year of the request). The OMB submission precedes
any decision-making and is thus not a public document.
b. OMB Review — Following a period of review, the OMB holds hearings with select
AA/RAs to offer them an opportunity to justify their funding requests and proposed
policy changes. The OMB also usually requests additional program and budget
information from the agency. OMB analysts then review EPA’s submissions, and
work within the OMB’s government-wide planning process for that year. Generally
this includes an OMB director’s review. After the director’s review, the OMB
prepares proposed budget levels, policy changes and any additional stipulations and
requirements to send back to the agency.
c. Passback, Appeal, and Resolution — The OMB sends all federal agencies letters
(normally about 10 to 40 pages) with proposed budget levels, policy changes and
additional requirements, which inform agencies how much will be allocated for that
agency in the President’s budget request. The process is commonly called OMB
“passback” (for OMB passing the budget back to the agency) and normally contains
policy directives, information requests and budget numbers.
Almost always, agencies must formally respond to the OMB within 72 hours, in
writing with the Administrator’s signature. When the EPA appeals its budget levels or
any other policy issue, it must decide which issues to respond to and how to respond,
develop arguments and write the appeal letter — and obtain approval from all levels
of management — all within three days. (The EPA almost always appeals some
budget levels and usually policy issues as well.)
Following the appeal, usually OMB and the agencies negotiate back and forth until
they reach a final agreement. This stage is complete after all outstanding issues
between the agency and OMB have been resolved. Issues that cannot be resolved
between the agency and OMB may be appealed to the President. Normally one or two
issues remain open until late in the process, and the budget community must prepare
all the other portions of the budget while these final details are settled.
3. President’s Budget/Congressional Justification (December–January)
Per the Budget and Accounting Act of 1921, the President must submit a budget to
Congress, called the President’s budget, no later than the first Monday in February. The
EPA and other agencies submit detailed descriptions of their budget proposals in a
specific format called the Congressional Justification (CJ). The EPA’s CJ includes the
EPA’s Annual Plan and thus has a formal name, “The Annual Performance Plan and
Congressional Justification.” The EPA CJ includes summaries and special analyses,
displays resource levels for three fiscal years (prior year, current year and budget year);
includes explanations of change (how much each budget line item changed from current
year to the budget year); and narrates the strategies, accomplishments, and budget
requests for each of the agency’s programs.
Each NPM submits his or her portion of the CJ in final form to the OB and the OPAA,
which prepare supplemental schedules, exhibits, final documents and data.
Throughout this preparation period, there is a continuous exchange of information among
various federal agencies, the OMB and the President, including revenue estimates and
economic outlook projections from Treasury, the Council of Economic Advisers, the
Department of Commerce and the Department of Labor. During the President’s budget
preparation, all information, correspondence and data are strictly confidential, and remain
confidential until the President’s budget is officially released to the public.
The OMB, which is charged with broad oversight, supervision and responsibility for
coordinating and formulating a consolidated budget submission to Congress, produces
numerous documents for the President’s budget. The most noteworthy is the Budget
The EPA submits the CJ to the Interior, Environment, and Related Agencies
Appropriations Subcommittees of the House of Representatives and the Senate Interior
Appropriations Subcommittee. Most agencies schedule a press conference on the day of
the President’s budget submission and release their portion of the President’s budget
request to the general public. Many agencies (including the EPA) also develop and
distribute a summary document called a Budget-in-Brief as well as numerous summary
charts and additional explanations requested by the appropriating committees.
After release to the appropriators, the CJ is also published on the Web as the detailed
justification that accompanies the EPA’s portion of the annual President’s budget request
4. Congressional Consideration (February–September)
a. Congressional (House and Senate) Hearings and Data Requests — Congress holds
formal hearings on the President’s budget for which the Administrator and EPA
senior officials usually testify. Generally the House and Senate Appropriations
Subcommittees hold hearings (Senate Environment and Public Works, House Energy
and Commerce and House Interior, Environment and Related Agencies) and
sometimes Congressional authorizing committees also hold hearings. The
Administrator, and sometimes other officials, testify on the requested levels and
respond to questions received from Congressional committees. Committees also
frequently ask for additional analyses and reports on specific items of interest.
b. Congressional (House and Senate) Review and Mark-Up — The House Interior
Appropriations Subcommittee then conducts a hearing to mark up, or make changes
to, the President’s budget request. A full House Appropriations Committee mark-up
hearing follows. The House Committee mark-up goes to the House floor for a final
vote. Traditionally, once the House passes an appropriations bill, the Senate follows
the same process as the House. Both the House and Senate Appropriations
Subcommittee issue language detailing each house’s mark-ups to the proposed
President’s budget. This information is distributed to the AA/RAs and Regional
Administrators who follow the steps of the legislative process and make note of the
proposed changes, such as increases or reductions to their programs. Senior managers
frequently must also explain the potential impact of proposed funding changes in
impact papers and other documents. Through the Congressional appropriations
process, Congress prescribes restrictions on how the EPA may use funds, such as
amounts that can be expended for facility repairs, or reprogramming limitations.
These will be discussed in more detail in subsequent sections of this directive.
c. Questions for the Record (QFRs) — Committees submit formal QFRs to the agency
that EPA must answer in a timely fashion. All programs must provide an official
response with clear and accurate information.
d. Congressional Conference Action — The Senate and House appropriations bills and
accompanying report language normally vary. To negotiate these differences,
Congress organizes a Conference Committee with representatives from both the
House and the Senate. After the committee reaches agreement, the full House, then
the Senate must vote to approve the Conference Committee Report. If the
appropriations bill is rejected by either the full House or the Senate, the process must
reconvene at the Conference Committee level again.
5. Enacted Appropriation
After the House and Senate pass the appropriations bill, the bill is “enrolled” and sent to
the President for signature or veto. Currently, there are 12 regular appropriations acts,
which could be passed and enacted annually. However, Congress sometimes enacts an
Omnibus Appropriations Act, in which many separate appropriations are grouped into
one bill. The EPA’s appropriations are part of the Department of the Interior,
Environment, and Related Agencies Appropriations Act. Additional appropriations
decisions and restrictions applicable to all federal agencies, such as annual payroll cost of
living increases, may be included in a Financial Services and General Government
Appropriations Act. Late Congressional action on an appropriations act can delay
development of the EPA’s enacted budget.
a. Continuing Resolutions/Omnibus Appropriations/Shutdown — Although the
Congressional Budget Act requires completing the governmentwide process by
October 1, in recent years Congress has not met this deadline. In this case, when an
agency’s annual appropriations act is not enacted by the start of the new fiscal year
(October 1), the Congress will usually pass one or more Continuing Resolutions
(CRs), which allow agencies to continue operations for a specific period of time
generally under the same conditions, limitations and other provisions as those
contained in the last enacted appropriations act. The CR is typically at the amount
that was appropriated the year before, pro-rated to the number of days specified in the
CR. During the fiscal year, Congress ultimately passes the agency’s annual
appropriations act, which could take the form of a CR through the end of the fiscal
year, or an Omnibus Appropriations Act covering all agencies whose individual
appropriations acts have not been enacted.
b. Shutdown — If no new money is appropriated by either a CR or an appropriations act,
the agency must shut down, since it lacks the authority to spend any new money.
There are limited exceptions for specific functions and tasks for which an agency may
be authorized to incur committed funds in advance of appropriations. Activities may
be shut down even where there are some funds available to carry them out due to
inter-related programs not being funded because of an appropriations lapse.
EPA’s “Contingency Plan for Shutdown” (updated October 1, 2015) includes more
detailed shutdown information, and is available at
c. Apportionment — OMB apportions the CR using an automatic apportionment
bulletin. The bulletin states the rate that expenditures may be incurred under the CR.
Under a CR, the OB provides guidance to each allowance holder (AH) stating the
level and rate of expenditures that the AH may incur by appropriation/allowance.
This guidance may include a temporary Advice of Allowance (AOA). AHs must
restrain spending during a CR to ensure that the EPA does not violate Congressional
or OMB limitations.
6. OMB Apportionments (October)
Following Congressional enactment of appropriations legislation (including annual
appropriations, continuing resolutions or supplemental appropriations) the EPA OB
Director must request apportionments from the OMB. Apportionment requests for
carryover balances, recovery authority (deobligations of prior year funds) and
reimbursable authority (to cover agreements to provide goods and/or services for other
agencies) do not require legislation but are included in the apportionment request. In
accordance with OMB Circular A-11, Part 4, “Instructions on Budget Execution,” OMB
Standard Form SF-132 (letter apportionment format) is submitted by the EPA to make
these requests. OMB reviews the request and, when satisfied, it signifies approval by
signing the document(s).
EPA must request apportionments from OMB prior to using funds, for the reasons below:
• 31 U.S.C. 1513, requires that all appropriations be administratively apportioned by
the OMB Director to ensure expenditure at a controlled rate, which will prevent
deficiencies from arising at the end of a fiscal year.
• 31 U.S.C. 1512(b) provides that apportionments need not be made strictly on a
monthly, quarterly or other fixed time basis, nor must they be for equal amounts in
each time period. The apportioning officer may also consider the activities, functions,
projects, or objects of the program being funded and the usual pattern of spending for
such programs in deciding how to apportion the funds.
The OMB may apportion budgetary resources for calendar quarters (Category A
apportionments); for “other than quarterly basis” for activities, projects, objects
(Category B apportionments, generally annual); or for a combination thereof. The
apportionment requirement is designed to prevent an agency from spending its entire
appropriation before the end of the fiscal year and thus putting the Congress in a position
in which it must either grant an additional appropriation or allow the entire activity to
come to a halt.
Many agencies do not receive the full amount of their appropriations at the beginning of
the fiscal year. However, since FY 1995, OMB has generally apportioned all of the
EPA’s funds in the first quarter. This has been transmitted using a letter format, which
apportions all agency funding. Beginning with FY 2002, the standard apportionment
form, SF-132, was transmitted to the OMB electronically. Once an OMB-approved SF-
132 is returned to the agency, the funds may be used. The OB reconciles the
apportionment SF-132 from the OMB with the agency budgets that are loaded into
Compass, which is the agency’s financial system, to ensure that there are no
• Carryover — Carryover (unobligated, unexpired funds from the previous year) does
not automatically remain apportioned. With regard to carryover of funding that has
not expired and that makes funds available beyond the current fiscal year, new
apportionment action is required for the new fiscal year unless OMB determines
otherwise. For balances of prior year budget authority, initial estimated
apportionment schedules for the year are due to the OMB by August 21 of each year,
per 31 U.S.C. 1513(b)(1)(A).
For more detailed information on apportionments, see both OMB Circular A-11 (Part
4) and Chapter 6 of the Principles of Federal Appropriation Law.
7. OMB Apportionments — Operating Plan (October–November)
After signing the appropriation, the President generally requests the agency to submit a
formal Operating Plan implementing the newly enacted budget. The deadline is normally
30 days to develop and submit to the appropriating committees.
All Congressional changes in the enacted budget must be reflected in the agency’s
Operating Plan. Generally, adjustments must be made, as well as specific directions that
must be followed, such as directed increases or decreases along with overall funding level
changes. In addition, the Administrator may determine in the development of the
Operating Plan that available resources need to be redirected to meet emerging unfunded
priorities and some technical adjustments may need to be made for factors such as
changing payroll or benefits costs. Making these decisions and implementing these
changes result in the development of the agency’s enacted Operating Plan, which is then
submitted first to OMB for review and then to Congress for information.
Since the President’s budget was submitted at least seven months prior to the actual
passage of an appropriation, cost estimates must be updated and shown in a new
document. In addition, frequently events transpire in the intervening months, such as
court cases, that also must be addressed in the updated budget. This plan is accompanied
by detailed descriptions of any proposed changes. Congress may then expect or reject
some of the proposed changes.
1 Key internal controls provide reasonable assurance that material errors will be prevented or timely detected and can be tested to
provide assurance over financial assertions.
8. EPA Distribution Process (Allocation) (October–November)
a. Allotments (October) — OMB apportions all appropriated funds to the EPA’s OB
Director, who serves as the agency’s apportionment holder and single allotment
holder. The agency does not have sub-allotments. The allotment is the only formal
administrative subdivision of funds under 31 U.S.C. 1514 and 31 U.S.C. 1517 and is
the OB Director’s authority to issue “Advices of Allowance” to EPA AHs. (These
formal allotments apply to Cabinet-level departments. The department as a whole
“allots” funds to a bureau. For example, the Department of Commerce allots funds to
the National Oceanic and Atmospheric Administration.)
b. Allowances (November) — EPA provides funds to headquarters program offices and
regions for meeting agency operational needs through allowances. They are not
formal sub-allotments of apportionments or administrative divisions of funds for the
purposes of 31 U.S.C. 1514 or 15171 (Administrative Division of Apportionments
and Prohibited Obligations and Expenditures). Allowances are the amount of money
made available to program offices and regions in Compass.
c. Allowance Holders — Almost all NPMs and regions control their budget at a lower
level, called an AH. This means that rather than managing one large budget, the NPM
has several AHs within the NPM. Generally these AHs are major subprograms or
offices within the NPM, for example the Drinking Water program within the Office
Compass has administrative controls to ensure that AHs do not commit or obligate
funds in amounts that exceed their allowance. Allowances are only issued after
Congress has passed an appropriations bill the President has signed, and an Operating
Plan that has been approved and entered into Compass.
In some years, the budget has been enacted and the agency’s operating plan has been
submitted to the appropriations subcommittee’s staff but there remain pending items that
the appropriating subcommittees must approve such as reprogrammings. Generally, the
OB will load the Operating Plan into Compass but withhold issuing items that are
pending coordination with the appropriations subcommittees.
The AHs are responsible for staying within the full-time equivalent (FTE) ceilings and
fund ceilings contained in the agency’s Operating Plan.
The EPA cannot issue allowances that in the aggregate exceed the amount of the EPA’s
apportionment. Allowances establish an EPA organizational framework for managing
funding and permits the appropriate agency officials to commit and obligate portions
their portions of the agency’s Operating Plan.
The majority of AHs are NPMs or Regional Administrators who organizationally manage
portions of many EPA appropriations. The agency has financial management controls in
place to ensure that AHs do not commit or obligate funds in excess of the amount of their
allowance. Further, the AH has the responsibility, authority and technical capability to
issue, withhold or withdraw any or all allowances or portions of allowances as
appropriate. The AH, which is the OB, also has the authority to consolidate allowances
centrally (or designate new AHs), if AHs are not properly managing their allowance.
Figure 2. Budget formulation and execution timeline.
B. Budget Execution Process — Operating Plan Guidance and Allowance Management
Figure 3. Advice of allowance.
a. Nature of Allowances — 31 U.S.C. 1514 provides that agency allotments will be
established at the highest practical level. At the EPA, OMB apportions the
appropriated funds to the EPA OB Director as the agency’s single AH. Note there is a
separate allotment for every appropriation (Treasury account symbol) for every fiscal
year. The OB Director retains the original signed apportionment documents on behalf
of the agency. This is the agency’s formal designation regarding “Administrative
Subdivisions of Funds.” The agency does not have sub-allotments. The one restriction
on the agency’s allotment is that it cannot exceed the amount of the apportionment.
b. AOA Memorandum — EPA’s formal guidance to financial managers about the
critical administrative, financial and other special directions that apply to that year’s
budget. The OCFO’s OB works with other administrative offices (the Office of
Administration and Resources Management’s Office of Grants and Debarment and
the Office of Acquisitions Management’s Office of Environmental Information, as
well as other OCFO offices) to look carefully at the annual appropriations and
associated bill language to find all important administrative, financial and other
directions that programs must follow. The memorandum is intended to provide all the
critical instructions on the use of funds that Headquarters Program Offices and
Regions need to know. It is not a formal sub-allotment of apportionments or an
administrative division of funds for the purposes of 31 U.S.C. 1514 or 1517.
The memorandum contains:
• Operating guidance for the year
• Agency ceilings (if any)
• Limitations to the Operating Plan
• OCFO OB Control Team analysts assigned to each organizations
• Action items
• Major changes from previous years
Fund Control Officers (FCOs) and other financial managers should make sure they
read and understand each year’s AOA as soon as it is issued. Copies of the current
and previous AOA memoranda can be found at
c. Allowances Issuance — Allowances of funds are made available to the respective
AHs through Compass when Operating Plans are completed (or other funding is
similarly approved). The amounts match those in the Operating Plan which is entered
into BAS, the agency’s formulation system. If an appropriation is delayed,
Continuing Resolution funds are issued and loaded into Compass. When an
appropriation is completed, the difference between the sum of the CR amounts and
the amounts in the appropriation bill is entered into Compass for each AH. The total
amounts loaded correspond to those in the Operating Plan. The Operating Plan is a
more detailed budget that adds up to an allowance. Once the Operating Plan is loaded
into Compass, the OB sends an email to all budget contacts to inform them that
Compass is ready for entry of funding commitments and obligations, and any internal
reprogrammings that may be needed. Occasionally, OCFO will have to hold back
portions of the budget that remain in dispute.
d. Adhering to AOAs — The allowances issued and represented in Compass by Budget
Query level 4 specify how much the AH may commit and obligate in the fiscal year.
Level 4 updates instantaneously to reflect commitments, obligations, payments and
reprogrammings processed in Compass.
e. Compass Levels of Detail — Compass captures this detail by structuring the budget
in 9 levels and provides EPA with the capability to set fund control at either the total
Operating Plan level or by using a combination of data elements shown below.
i. Appropriation — Total amounts appropriated by Congress for a particular fund
such as environmental programs and management (EPM) or Superfund.
ii. Apportionment — Normally the same as #1 above, but occasionally OMB will
delay apportionments of portions of the budget.
iii. Allocation to the Resource Planning and Implementation Office (RPIO) —
Allocation to the EPA’s major organizational units, the 10 regions and 13
iv. Sub-allocation to AH — Most RPIOs divide the management of funds by
divisions within the RPIO.
v. Allotment to Program Area — Congress appropriates funds to certain program
areas which the EPA must track and report on. Program area must be carefully
tracked because of re-programming limits. (Less of $1 million or 10 percent of the
total value of the program.)
vi. Sub-allotment to Program Results Code (Program Project) — The EPA’s budget
is formally submitted and reviewed by Program Project. (Some program projects
also must be tracked for reprogramming limits.)
vii. Allowance to Budget Object Class (BOC) — The EPA must report on how it uses
funds, by grants, payroll, contracts, travel, etc., which are tracked using BOCs.
Note that the actual obligations of funds are made using Finance Object Classes.
viii. Sub-allowance to Organization — Some organizations, principally the Office of
Research and Development, also track funds by organization.
ix. Additionally, Compass captures reimbursable funds provided to specific funds-in
Budgets must be downloaded at detailed levels in order to comply with Congressional
direction. A control on a combination of data elements may specify any particular
appropriation, RPIO, AH, Program Results Code or BOC. AHs also have the capability
in Compass to set their own spending controls on sub-AH levels (such as the
Responsibility Center level or lower) without OB approval.
Some organizations are sufficiently large or geographically spread that an AH subdivides
its organization and Operating Plan into smaller units of control called Responsibility
Centers. In Compass, the Responsibility Center is at level 8. AHs and Responsibility
Centers may view their respective allowances or Operating Plan at any time in Compass.
The financial system prevents funds from being committed or obligated before the
enacted budget has been loaded by the OB.2 The fund control lockout level at the EPA is
set in Compass at the BOC level, i.e. level 7. AHs will have a record for each
appropriation for which they hold an allowance. This includes carryover. For example,
the AH who is the Director of the XYZ Program may hold the following four allowances
under their respective appropriations:
• Leaking underground storage tanks (LUST)
• Superfund Reimbursable
EPA maintains strict tracking and controls on moving funds. FCOs and other financial
managers need to become familiar with the rules and make sure they are followed. In
addition, they must be sure to clearly explain any movements of funds.
2 Key internal control
a. Definition and Purpose — A reprogramming is a “shifting of funds within an
appropriation or fund account to use for different purpose(s) than those contemplated
at the time of the appropriation” (A Glossary of Terms Used in the Federal Budget
Process, Government Accountability Office, September 2005). A reprogramming
also consists of any significant departure from the program described in the
Congressional Justification even without a change in funding. Those responsible for
preparing/processing reprogrammings should consult the annual AOA Memorandum
for explicit congressional direction and reprogramming controls. Additionally, the
EPA has agreed to notify the Congressional Committees of reorganization of offices,
programs or activities prior to the planned implementation of such reorganizations.
The EPA performs four different types of reprogrammings within Compass: RPs,
CRPs, DRPs and IRPs.
• RPs (reprogrammings) are done for resource changes between organizations and
between budget object codes.
• CRPs (Congressional reprogrammings) are done when there are resource changes
between program areas or Congressional protected program projects and
• DRPs (deobligation reprogrammings) are done for recertification of funds.
• IRPs (IRMS reprogrammings) are done for Office of Research and Development
Normal reprogrammings (DRPs, IRPs and RPs that are within Congressional limits)
occur daily — but CRP reprogrammings that may impact the Congressional limits of
$1 million or 10 percent are limited in number and are reserved for high-priority
agency needs. All CRP reprogrammings require a clear explanation in Compass.
The EPA is limited in how much it may move funds.
a. Within an Appropriation Only — Resources may only be reprogrammed within a
single appropriation or fund in Compass. Movement between appropriations requires
“appropriation transfer” or balance transfer authority, which Congress has to enact in
law. The only transfer that Congress has provided to the EPA is the Superfund
transfer to the science and technology and IG accounts. EPA officials must obtain
explicit legal authority to execute other transfers.
• Funds must also be available. Only funds available for use — uncommitted,
unobligated and unexpended — may be reprogrammed. This can be verified
through a budget query in Compass.
• May not violate any Congressional directives — certain funds have
Congressionally mandated minimum levels of spending, and other programs have
Reprogramming activity at the start of the fiscal year does not usually begin until the
EPA has submitted the enacted budget to Congress. As a matter of policy, the EPA
adheres to reprogramming limitations contained in the Congressional Appropriations
Committee Reports accompanying the annual appropriations act. In cases where
either the House or Senate Appropriations Committee report displays an allocation of
an appropriation below a budget activity level, the more detailed level shall be the
basis for the reprogramming action. Managers use reprogrammings to meet the
changing needs and priorities of the agency.
Some examples of reprogramming actions are:
• Resource changes between program results codes or program areas
• Resource changes between organizations (e.g., AHs, Responsibility Centers)
• General resource reductions or increases
• Resources changes between BOCs
BAS and Compass are set up to monitor resource ceilings and floors through
comparisons between operating plans and obligations and expenditures. All
organizations are responsible for monitoring their obligations against the Operating
Plan and then reprogramming when needed in advance of commitment and
obligation. Failure to adhere to this policy could result in a lower level of
organizational lockout and/or withdrawal of allowances by the Agency Allotment
Holder, the OB Director.
• Review for specific
instructions regarding payroll,
defacto, and Congressional
controlled program project
• Inform Congress prior to shifting more than $1 million or 10 percent
(whichever is smaller), in or out of Program Areas and certain program
projects and Sub-Program Projects
• If the reprogramming is less than a $1M or 10%, but ensure the
availability of funds.
• Funds must be available (uncommitted, unobligated, and
unexpended) in the accounting line the funds are coming from.
• Cannot take from one appropriation and give to another(ie.
Superfund to EPM)
• Office of Budget works with the
organization’s budget office to enter
and process the reprogramming.
• Organizations are
reponsible for monitoring
their obligations against
the Operating Plan and
reprogram in advance of
5. Congressional Limits
Figure 4. Reprogramming process.
Congressional appropriating subcommittees have set limits on how much funding the
EPA may move across program areas, select program projects, and select sub-program
projects that the agency adheres to as a matter of policy. The subcommittees’ report
language directs the EPA to inform Congress before shifting more than $1 million or 10
percent (whichever is smaller), in or out of program areas and certain program projects
and sub-program projects. This restriction includes all movement of funds including
those caused by payroll cost shifts. The House or Senate Committee on Appropriations
report language generally also includes additional information, directions and/or
restrictions on agency reprogrammings and other financial matters. The OB reviews this
language and issues an annual AOA memorandum to all agency financial managers with
Each year’s AOA includes an attachment showing how that year’s program projects are
grouped together in program areas. For the most part, money can be reprogrammed
between program projects that are in the same program area — except for some program
projects that Congress specifies in its report language for which the $1 million/10 percent
limit also applies. For example, in 2014 program projects civil enforcement, criminal
enforcement, enforcement training, environmental justice and NEPA implementation all
fell under the enforcement program area — and Congress only placed additional specific
restrictions on the program project environmental justice. This means that monies may be
shifted between all the program projects within the enforcement program area without
checking for re-programming limits — except for the environmental justice program
project, for which the $1 million and 10 percent limit also applies.
Congressional committee language has historically provided an exception to the
reprogramming limitation for the State and Tribal Assistance Grants (STAG) account
relating to (1) requests to move funds between wastewater and drinking water objectives
for grants targeted to specific communities; and (2) reprogramming of performance
partnership grant funds.
The OB will assist RPIOs in providing Congressional notification for reprogrammings in
excess of the Congressional limitation if an office wishes to proceed with the request.
Anticipated need to reprogram funds in excess of the Congressional limitation should be
provided with advance notice to the Formulation, Control and Policy Staff in the OB.
They will provide guidance on current procedures such as format, content and timing.
However, the proposed reprogramming should not be entered into Compass until the
agency has a response from the Committees and the program is notified by the
Formulation, Control and Policy Staff. It is important to stress that Congressional
language limits reprogrammings to urgent or emergency matters. Approval is not certain
and may take more than a month. In addition, OMB must also clear any formal
OB also will monitor and enforce compliance with both the letter and spirit of these
RPIOs will not be permitted to compromise the Congressional limitations by:
• Splitting reprogrammings (for the same general purpose) into more than one
document to circumvent the limitation.
• Reprogramming incremental amounts (for the same general purpose) into or out of
more than one organization (such as 10 regions) where the cumulative amount
moving between programs/projects is in excess of the limitation.
• Reprogramming or spending any amount of statutorily mandated Congressional add-
on/earmarked funding for a purpose other than that stipulated by the Congress in law,
(add-on plus base in some instances).
• Over-obligating a program/project in excess of a Congressional limitation and
circumventing the reprogramming process (de facto reprogramming).
• Reprogramming between activities within a PRC goal/objective that does not move
Operating Plan resources but represents a major policy shift.
Information regarding the current restrictions and limitations can be found in the annual
6. Budget Automated System (BAS) Pre-Approval of Reprogrammings
As a result of the limits set by Congress on reprogrammings, and the lack of Compass
controls to prevent reprogramming changes, the OB has established a reprogramming
pre-approval process in BAS. For all net movement of funds across program areas,
program projects or sub-program projects subject to Congressional limits,
RPIOs must request approval via a BAS reprogramming document before funds can be
moved in Compass via reprogramming request. On a regular basis, OB reviews the
reprogramming requests and evaluates them for potential approval. OB will approve
reprogrammings under Congressional limits. Proposed reprogrammings that require
Congressional involvement will be evaluated to determine the appropriate action.
Reprogrammings that do not cross programs/projects are not BAS reprogrammings and
can be entered directly into Compass.
7. Reprogramming Limitations (Ceilings and Floors)
Any agency ceiling and/or floor, which may be imposed on EPA appropriations for a
given year, is transmitted by the OB to the agency in the annual AOA.
a. Ceilings — Certain agency resources are designated by Congress or the OMB with a
cap or limitation referred to as a “ceiling.” Ceilings are not resources. Ceilings
impose planning and spending limitations for resources that may not be exceeded.
In a number of EPA appropriations, one or more ceilings may be imposed on the
agency for FTE work years, site-specific and non-site-specific travel, administrative
expenses, and sometimes even specific programs. In addition, the agency may violate
the ADA if its obligations or disbursements exceed specified statutory ceilings in an
appropriations act. Note that the Office of the Inspector General appropriation
account does not have ceilings. The EPA establishes and maintains agency limitations
for the following non-statutory ceilings:
i. Work Year Ceilings – Work years are also known as FTEs. An FTE is the total
number of hours worked or to be worked divided by the number of compensable
hours applicable to each fiscal year. A work year is equal to between 2,080 and
2,096 employee work hours per year, listed by year in OMB Circular A-11
depending on annual calendar fluctuations. All employees count against the
agency work year ceilings.
FTE ceilings are no longer imposed by the OMB or mandated by Congress.
However, EPA continues to maintain FTE (or work year) ceilings as a policy tool
to restrain the obligation of payroll, compensation and benefits resources and to
control the size of the agency’s workforce.
Congress may put language within the act or legislative history to the act that has
explicit FTE implications. At times, FTE caps to certain agency offices have also
been included as administrative provisions in the EPA’s act. Within the agency,
FTE ceilings in workforce appropriations are issued to the appropriate
RPIOs/regions. Each RPIO is responsible for monitoring and managing its FTEs.
RPIOs are also expected to manage FTEs consistent with existing budgets, and
should implement hiring plans such that end-of-year on-board staff levels leave
the agency with flexibility to deal with reasonable budget changes in the next
Work year ceilings are issued annually and do not carry over from one year to the
next. All other multi-year and no-year ceilings do carry over in conjunction with
the dollar balances. Neither carryover ceilings nor dollars are part of an AH’s
budget until the OB has made them accessible in the Compass Operating Plan.
The agency may not carry over more ceiling than it has carryover dollars, and nor
may any RPIO/region.
ii. Payroll — Payroll costs represent approximately 25 percent of the EPA’s budget.
Each year, payroll costs increase due to cost of living adjustments and within-
grade increases. In 2010, the OB analyzed payroll and FTE utilization with the
goal of finding more efficient and equitable ways to manage and control payroll
costs. Beginning in FY 2011, the OB changed the policy to provide that
reimbursable work years may exceed an office’s FTE ceiling. Under the new
policy, only those reimbursable FTEs where the funding is fairly certain will be
included in the budget. If an office receives additional reimbursable interagency
agreement (IA) funding or fees during the year, or wishes to use CERCLA
122(b)(3) special account funding for FTE, those funds could be used for payroll
without limitation due to the FTE ceiling. Any payroll expenditures are subject to
the terms and conditions of the IA, the CERCLA settlement agreement for the
special account, or other binding requirements. OB will continue to include
routine projected reimbursable FTEs in the budget ceilings levels, but additional
reimbursable FTEs may be utilized without adjustment to the ceiling.
iii. Travel Ceilings and Rules — These administrative ceilings apply to limitations on
travel funded from appropriations such as EPM, science and technology,
Superfund, and LUST and restrict travel obligations for the agency. They are
based on the travel funding levels in BOC 21 in the enacted Operating Plan. Due
to the agency’s need to travel to Superfund sites to respond to emergencies as well
as provide federal oversight at these sites, Superfund site-specific travel does not
count against the travel ceiling set by the agency.
There have been many different limitations and restrictions placed on the use of
travel funds. For example, paying non-federal government employees to attend an
EPA-sponsored conference is not an allowable use of appropriated funds. In
general 31 U.S.C. 1345 “prohibits the payment of travel, transportation, or
subsistence expenses” of private parties at meetings without specific statutory
authority.” Exceptions may be made for invitational travel authorized by 5 U.S.C.
5703 if attendees are providing a direct benefit to the government such as
providing advice under the Federal Advisory Committee Act (FACA). FACA
travel expenses count against the travel ceiling.
Travel expenses also count against the ceiling when a field employee and his or
her spouse travel to headquarters to receive an award under the Government
Employees Incentives Award Act.
Detailed information on invitational travel and other travel related subjects is
available in RMDS 2550B, Official Travel.
To ensure that the agency is in compliance with its ceilings, agency organizations
are provided with limitations of their own (sub-ceilings). An organization, for
ceiling purposes, may be defined as any level within the EPA including RPIOs,
regions, AHs, or even Responsibility Centers. All organizations must stay within
each of the ceilings imposed and must take affirmative measures in advance to
ensure that ceilings are not exceeded at any time.
b. Floors (minimum amounts to be expended) — In multi-year appropriations, all floors
carry over from one year to the next in conjunction with any associated dollar
balances being reissued.
8. Compass Reprogramming Process
The AH/senior budget officer/regional budget officer initiates a reprogramming
document as a result of any planned change, either programmatic or budgetary, to the
current year Operating Plan in Compass. They are responsible for editing and correcting
the reprogramming document.
a. Reprogrammings That Do Not Violate Any Controls or Limitations Will Process
Without the OB’s Approval — The OB control team staff reviews reprogrammings
that potentially exceed ceilings or impact programmatic and policy concerns.
Reprogrammings can be found by going to “Transactions,” “Form/Document
Selection,” and entering the document number.
b. Reprogramming Explanation Required — All reprogramming must have a well-
written, informative purpose statement (justification) in the reprogramming
document. Reprogramming justifications provide the permanent audit trail of the
EPA’s resources and protect the initiator by documenting the rationale.
Reprogramming justifications should simply state:
• What the action achieves for the program(s) or office(s) receiving an increase and,
• What the impact is to the program(s) or office(s) losing resources.
Once all steps are completed, the reprogramming document is approved and
processed in Compass. The initiator can view approval of the document by searching
the document number in Compass’s form/document section. Approved
reprogrammings are reflected as processed.
9. Carryover of Unobligated Balances
Carryover funds are defined as unobligated balances of appropriation accounts, which
have not expired at the end of the fiscal year. Because OMB apportionments expire every
September 30, these carryover balances must be reapportioned to the agency by OMB in
the new fiscal year. Annually, the OB estimates carryover balances that will be
unobligated at year-end and submits carryover apportionment requests to OMB by
August 21 in accordance with OMB Circular A-11 requirements. This helps to ensure
that authority has been granted by the OMB to have carryover funding available to the
agency at the start of the new fiscal year. However, because this authority is based on
amounts estimated almost two months prior to the EPA closing its books for year-end,
the agency must be prudent in the use of these estimated carryover amounts until final
totals are available and estimated apportionments are revised to reflect actual balances.
a. Multi-Year Funds — The EPM, science and technology, and IG operating plans
automatically roll over from the first to the second year of funds availability in
Compass and are available for spending up to the apportioned levels. AHs are not
required to request recertification of second-year recovered funds. Each AH will have
to anticipate and cover any overruns that might occur, since overruns will also impact
the original accounting data as costs are posted in the second year.
b. No-Year Funds — The EPA implemented a new procedure in FY 2014 to apply to
that and future years. However, since the agency cannot go back in time, the former
rules still applied to past years’ funding.
i. Budget Fiscal Year (BFY) 2013 — Similar to the multi-year funds, STAG,
Superfund, LUST, buildings and facilities, and oil spill carryover balances
automatically rolled over in Compass and are available for spending up to the
apportioned levels. These funds will maintain their original BFY/fund identifier
(for example, 2013 T) during FY 2014. If deobligated during FY 2014, these
funds will immediately become available to the AH — recertification is not
ii. Budget FY 2012 and Prior — STAG, Superfund, LUST, buildings and facilities,
and oil spill carryover available balances were swept from the budget in mid-
October 2012 via a Compass carryover batch process. Available balances from
the FY 2012 and prior funds were combined into a single carryover fund. At that
time, we reinstated use of the “C” fund codes for carryover of available balances
from FY 2012 and prior funds. The “C” funds are used BFY 2013 to indicate
funds from the prior year (for example, FY 2013 TC).
The OB will centrally manage the Superfund, LUST, buildings and facilities, and
oil spill carryover funds for BFY 2012 and prior years. STAG funds will be
redistributed by the relevant NPMs or redirected for agency priorities. Users
should consult with the Control Team on reclassification of Trust Funds. For
more information on reclassifications please refer to the section discussing
C. Supplemental Appropriations/Natural Disasters
The EPA may receive funding through supplemental appropriations either directly or through
other federal agencies. During the fiscal year, the President may submit to Congress
proposed deficiency and supplemental appropriation requests that he/she decides are
necessary because of laws enacted after the submission of the President’s budget or that are
in the public interest, such as hurricanes (e.g., Sandy, Katrina) and emergency investments
such as the Recovery Act. As with annual appropriations, supplemental appropriations are
submitted to the President through the OMB and are generally submitted as a consolidated
package by the OMB to Congress.
1. Formulation of Supplemental Appropriations
Generally, supplemental appropriations are developed and submitted normally through a
compressed appropriation cycle. EPA must submit spending plans to the OMB and the
appropriators, respond to numerous OMB and Congressional questions, and develop
budgets in BAS. The OMB and the appropriators then prioritize between various
agencies requests and then continue to confer with the agency. All the while (since, in
most cases, supplemental requests are for major disasters), the EPA is working with other
federal agencies through an interagency structure described below.
2. National Response Framework (NRF)/National Disaster Recovery Framework
The Federal Emergency Management Agency’s (FEMA’s) mission assignments are
issued within the NRF and NDRF structures. The EPA and many other federal agencies
have signed these multi-agency agreements committing all agencies to work together to
best support communities’ response to and recovery from disasters. Under these
agreements, the EPA has agreed to support the federal government’s overall response,
recovery and mitigation goals and to use its own statutory authorities as they may apply
in the emergency situation. Further information about the NRF and NDRF are available
on FEMA’s website, FEMA.gov.
In many larger disasters, the EPA also must coordinate federal oversight and permitting
with other federal regulatory agencies and provide critical expertise as needed. Some of
the major disaster programs that EPA oversight or expertise applies to include:
• FEMA Public Assistance (FEMA-PA) (infrastructure repair) grants.
• FEMA Individual Assistance grants (FEMA-IA) (direct help to people).
• FEMA Hazard Mitigation Grants (HMGP).
• Housing and Urban Development’s (HUD’s) Community Development Block Grant
(CDBG) program, which provides flexible grants for cities, counties and states to use
for a wide variety of projects. (For EPA, it is important to stress that HUD CDBG
grants also include disadvantaged community requirements akin to the EPA
environmental justice goals and that HUD CDBG funds may be used to meet
matching requirements for the EPA grants such as for brownfields cleanups in certain
• Department of Transportation grant programs across the department’s four operating
administrations (highway, railway, transit and aviation).
• US Coast Guard (USCG) Pollution Removal Funding Authorization (PRFA) are also
used to fund EPA activities.
• The EPA may receive reimbursement from these agencies for some of these oversight
costs under mission assignments or IAs.
3. Federal Emergency Management Agency (FEMA) Disaster Funding — Mission
In addition to receiving supplemental appropriations directly, the EPA frequently
receives funding through FEMA mission assignments under the authority of the Stafford
Act and FEMA’s implementing regulations. FEMA issues mission assignments to the
EPA and other agencies to perform specific tasks in a certain time frame.
For example, FEMA issues mission assignments to pay the costs of deploying on-scene
coordinators; evaluating environmental risks, air and water emissions, and/or water
system damage; and performing followup activities. When responding to disasters,
agency managers and employees must be careful to assign all applicable costs to these
mission assignments. This includes all applicable payroll costs and any related contracts
and grants costs for two principal reasons: first, the EPA’s regular appropriations do not
always include authority to perform these tasks, and second, FEMA’s funding is
specifically appropriated to pay for these costs. A mission assignment is similar to an IA
that FEMA issues directly to the EPA in an emergency situation. The OCFO’s Cincinnati
Finance Center (CFC) received the official mission assignments from FEMA. Regional
comptrollers and other financial managers should coordinate directly with that Finance
Center during a major disaster.
4. USCG Pollution Removal Funding Authorization (PRFA)
The EPA may also use a PFRA to employ other agencies to assist with oil spill removal.
5. Internal Control Plans
For supplemental appropriations and other specific separate funding sources, the EPA is
frequently required to develop and implement Internal Control Plans that summarize how
it will manage the appropriated funds. These plans should be designed to focus, not
supplant, the EPA’s existing internal controls so that the agency can efficiently report
progress and results from these separate funding sources to stakeholders and capture the
data needed to ensure that funds are used appropriately, effectively, and expeditiously.
Previously these plans were sometimes referred to as Stewardship Plans.
6. Supplemental Execution Requirements
a. Regular Federal Accounting and Financial requirements Still Apply — The EPA
must still request funds apportionment, track by program project, etc.
b. Additional Requirements — Supplemental appropriations frequently have additional
requirements or conditions which the EPA must manage, and/or separate reporting
requirements. For example, Hurricane Sandy supplemental funds added a new
criterion “resiliency” for water projects, and required financial status reporting and
delivery of an Internal Control Plan to Congress, the IG and the Government
c. Don’t Co-Mingle Funds — The EPA must be careful not to co-mingle funds provided
in regular and supplemental appropriations unless expressly authorized to do so by
the terms of the supplemental appropriation.
d. Emergency Related Expenses Tracking — Particularly in natural disasters, the EPA
must begin tracking expenses incurred before the passage (or frequently even the
consideration) of supplemental appropriations. Managers involved in response efforts
should look for guidance from the OCFO advising how employees should track time
and dollars devoted to these efforts. In large disasters, the OMB frequently asks how
much agencies have spent supporting disaster efforts, and these records become
crucial in supporting agency efforts to request either funding for or reimbursement for
these efforts. In addition, supplemental appropriations sometimes include funding for
the EPA’s management and oversight expenses.
D. Reimbursable Allowances and Interagency Agreements
Reimbursable authority is additional budgetary authority authorized by congressional statute
and apportioned to the EPA by the OMB. This additional authority is requested by the
agency and permits the EPA, if authorized by statute, to obligate collections and other
funding sources (both federal and non-federal) that are in addition to the EPA's annual
appropriations. The authority is established using an Apportionment and Reapportionment
request (OMB Standard Form SF-132).
At the EPA, reimbursable allowances are only issued if the EPA is the receiving agency.
Some of the instances for which the EPA has utilized the reimbursable allowance mechanism
in the past are listed below.
1. Reimbursable Interagency Agreements
This is by far the most common reimbursable situation. Under this arrangement, other
federal agencies provide funding to the EPA for services which the agency provides
directly or for which one of the EPA’s contractors are utilized. The authority cited for
such agreements may be (1) the EPA’s “cooperation” authority for IAs (note that these
sections are found in the EPA’s authorizing legislation — e.g., the Resource
Conservation and Recovery Act, the Clean Air Act, the Clean Water Act); (2) the
Clinger-Cohen Act, also known as the Information Technology Management Reform
Act; and (3) the Economy Act.
IAs are overseen and processed by the Office of Administration and Resource
Management’s Office of Grants and Debarment, which must approve a determination and
finding relating to Economy Act IAs that involve contracts. Once signed, an agreement is
forwarded to and recorded by the CFC, which handles the details of the billing.
2. Indirect Costs
Under the Economy Act and the 1996 National Defense Authorization Act, section
325(d), “Cooperative Authority,” EPA has the authority to bill other Agencies for indirect
costs. Since January 28, 2008, EPA’s policy has been that all new agreements must
include indirect costs. This does apply to IAs established prior to 2008. The only
exception is when there is a clear legal rationale and requirement not to charge indirect
costs. However, these exceptions must be approved by the OCFO and the Office of
General Counsel. Reimbursable IAs with indirect costs require proper documentation
before reimbursable authority may be requested.
3. Incurring Obligations
Incurring obligations under an IA is similar to incurring obligations under a contract. At
the time the agencies involved in an interagency transaction execute an IA (whether an
Economy Act IA or an IA under another authority), the requesting agency (sometimes
referred to as the customer/ordering/initiating agency) must incur an obligation for the
costs of the work to be performed. The agency providing the services is commonly
referred to as the servicing agency.
To properly record an obligation, the ordering or initiating agency must have
“documentary evidence of a binding agreement” (the IA) for “specific good(s) to be
delivered…or work or service(s) to be provided,” per 31 U.S.C. 1501(a)(1)(B). This
requirement for specificity is a long-standing principle of appropriations law. As a result,
an IA must describe with reasonable specificity the services that will be performed or the
goods that will be provided, so that the ordering agency may properly record an
4. Time Limitations of Funds Still Apply
If an agency identifies a bona fide need, it must execute an IA (whether it is an Economy
Act IA or an IA under another authority) before the end of the period of availability of
the funding for obligation.
5. ADA Still Applies
Making disbursements in excess of an appropriation cash balance implicates the ADA
and close monitoring of the available cash balance for the affected appropriation should
be exercised. For IAs where the EPA is receiving funds from another agency (also known
as funds-in IAs) to provide a certain good or service, the EPA must first ensure that the
funds were received from the other agency to avoid creating an over-obligation in which
the other agency might fall behind in making payments to the EPA. If the cash balance
falls below $2,000,000, further obligations from the fund should be stopped until
reimbursement or an advance is received from the paying agency to replenish the cash in
Interagency Agreement Process
Interagency agreement process.
7. Interagency Agreement Funds-In Responsibilities
a. Project Officer (PO): The responsibilities of the PO include providing programmatic
management and oversight of unliquidated obligations (ULOs) for the IA. In
particular, the PO obtains the current indirect cost rate and develops the IA funding
package, including the relevant programmatic terms and conditions. The PO is also
responsible for (1) monitoring project progress; (2) determining whether funds should
be deobligated or remain available for authorized project activities; (3) timely
notifying the IA specialist and the CFC, as appropriate, of issues impacting the
project or requiring the adjustment of funds; (4) initiating deobligation action as
necessary; and (5) maintaining adequate documentation of project management
activities from inception to closeout. 90 days prior to expiration, the PO will initiate
discussion with other the other agency to determine whether an extension is needed.
b. Fund Control Officer (FCO): The FCO has the primary responsibility for reviewing
and committing funding documents related to the IA, preparing necessary
reprogramming requests to the OB, and monitoring budgets and spending of the IA.
The FCO assists the IA specialist and the PO in (1) requesting reimbursable authority
for the IA from the OB; (2) committing IA funding documents; (3) monitoring
commitments and budgets for the IA; (4) decommitments of IA funds when
requested; (5) providing any budget or spending reports for the IA when requested;
and (6) ensuring proper review for any ULO related to the IA.
c. IA specialist: The IA specialist has the primary responsibility for the award and
administration of the IA through final closeout. The IA specialist works with the PO
to ensure that appropriate terms, conditions and enforcement of the IA are taken as
necessary to resolve issues. In consultation with the PO and CFC, the IA specialist
takes action to deobligate funds that the PO determines are no longer needed under
the IA. The IA specialist also ensures that proper documentation is maintained in the
IA administration file to support related administrative actions.
d. Cincinnati Finance Center (CFC): The CFC has the primary responsibility of
conducting quarterly reviews and all billing related to the IA. This includes (1)
calculating indirect costs based on the negotiated rate in the IA, (2) uploading
invoices and indirect rates into Compass, (3) entering IPAC and collection upload, (4)
the distribution of indirect collections, and (5) reconciling the IA.
E. Intergovernmental Agreements (Agreements with Other Government Entities)
1. State or Local Governments — These are provided for under the Intergovernmental
Cooperation Act of 1968. In this arrangement, the EPA provides specialized services to
state or local governments on a reimbursable basis. Note that the services must be
provided by the EPA employees rather than agency contractors.
2. Foreign Governments and International Organizations — These are provided for by
specific legislation, such as section 607 of the Foreign Assistance Act (22 U.S.C. 2357),
which allows the EPA to receive funds from foreign governments and certain
international organizations in exchange for services.
3. Private Firms - Federal Technology Transfer Act (FTTA) — FTTA is authority for
Cooperative Research and Development Agreement (CRADA) income and royalty
payments from licensing agreements with private firms, which will pay royalties to the
federal government for an exclusive license to use federally developed technology. FTTA
CRADA funds are held in trust for the cooperators and may be used solely for purposes
specified in the CRADA. CRADA funds are subject to recertification and the same
internal controls as appropriated funds.
FTTA royalty funds lapse at the end of the fiscal year following the one during which
they were received.
a. Advance State Match/State Cost Share — This is the percentage of site response costs
matched by the individual states either after-the-fact or, under rare circumstances, in
advance in the Superfund program.
b. Reimbursable Work Years — Additional work years to undertake the terms of an IA
may be included if funding is provided and the period of performance permits hiring
staff, or for smaller IAs assigning existing staff.
c. FIFRA IPAs — Intergovernmental Personnel Act Mobility Program employees under
the Intergovernmental Personnel Act of 1970 and the Federal Insecticide, Fungicide
and Rodenticide Act of 1972.
d. Recycling Fees: Collections from the agency’s recycling program.
Not all instances for which the EPA uses the reimbursable allowance mechanism are
situations of actual reimbursement. Many are up-front collections, such as fee programs,
inter-governmental agreements, and CERCLA cash-outs where the agency has statutory
authority to retain and use funds, and it is the best mechanism for OMB to provide the
obligational authority to the agency. In all cases, however, where other organizations are
providing funding, there is a net zero impact (the result is neither an increase nor
decrease) on the EPA’s enacted appropriations following disbursement and/or
reimbursement. Also, the reimbursable apportionment authority is not a budgetary
resource until an agreement is entered into (if an IA) or funds are received (if a
collection) and the apportionment authority is thereby funded.
The appropriation accounts for which the EPA receives reimbursable authority from
OMB are EPM, S&T, LUST UST, Superfund, IG , and OIL. Since reimbursable
agreements may involve any of the BOCs, authority will be issued in the appropriation
for which the object class and/or work being performed is appropriate. Because there is a
net zero impact on the EPA’s enacted appropriations, ceilings and floors, if any, do not
apply except in the case of reimbursable work years (FTEs).
Not all unfunded agency reimbursable authority and not all unobligated reimbursable
allowances expire at year end. If the reimbursing agency’s funding has not expired at
year end, RPIOs may request a reimbursable allowance in the new fiscal year to cover
any unobligated portion of their agreement(s).
For more on reimbursable IAs and the reimbursable process, see RMDS 2550C-04-P1,
Chapter 4, “Interagency Agreements: Requesting Reimbursable Authority.”
F. Fees and Fee Programs
OMB Circular A-25, which implements the Independent Offices Appropriations Act (IOAA)
(31 U.S.C. 9701), requires agencies to charge user fees for federal activities that provide
private parties with special benefits greater than those provided to the general public unless
certain exceptions apply. However, the EPA must have statutory authority to “retain and use”
fees and the IOAA does not provide the requisite authority. Otherwise, fees the EPA collects
must be deposited in the General Fund of the Treasury as miscellaneous receipts, as required
by 31 U.S.C. 3302 (b). Some statutes that authorize the EPA to collect fees are discussed in
Several programs at the EPA are authorized by statute to collect fees. Only if authorized in
the statute may collections that are received by the agency be retained and used. The period
of availability for obligation of fee revenue is typically specified in the statute as well. If not
authorized by a statute, the fees must be deposited as miscellaneous receipts to Treasury as
required by 31 U.S.C. 3302 (b), or as directed in a statute to a particular fund subject to
1. Pesticide Registration Improvement Extension Act
This 2012 act (PRIA 3, expiring on September 30, 2017) authorized two fees by
amending 1988’s FIFRA:
a. Pesticides Maintenance Fee — Section 4(i) of FIFRA authorizes the EPA to charge
annual maintenance fees for pesticide registrations. The fees are deposited into
Treasury’s Reregistration and Expedited Processing Fund and are available to offset
the costs of the reregistration and registration review programs, for expedited
processing of some pesticide applications, and to enhance information systems and
improve tracking of pesticide registrations. Fees the agency collects under this
authority may also be used to review and evaluate new inert ingredients. The fund is
available for the EPA’s use without fiscal year limitation. The amount of fee proceeds
the EPA may expend in a given fiscal year is based on the amount of appropriated
funds the agency expends for registrations and expedited processing. In FY 2015, the
EPA expects to collect approximately $27.8 million from this fee program.
b. 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. This
process has introduced new pesticides to the market more quickly. In FY 2015, the
EPA expects to collect approximately $11 million from this fee program.
Congress must authorize the EPA to obligate the PRIA fees the agency collects in its
annual appropriation act. Additionally, there is a PRIA provision governing whether the
agency may collect PRIA fees based on the amount of funds appropriated for certain
Office of Pesticide Programs functions in a fiscal year. In some fiscal years, Congress has
overridden this PRIA provision in annual appropriations acts. Whether the PRIA
provision is overridden in any given fiscal year will depend on the language of the
2. Toxic Substances Control Act of 1976 (TSCA)TSCA authorized two major fees:
a. Premanufacturing Notice (PMN) Fee – This fee is collected for the review and
processing of new chemical PMNs submitted to the EPA by the chemical industry.
These fees are paid at the time of submission of the PMN for review by the EPA’s
Toxic Substances program. PMN fees contain a cap on the amount the agency may
charge for a PMN review. Fees collected for this activity are deposited in the U.S.
Treasury. The EPA estimates that $1.1 million will be deposited in FY 2015.
b. Lead 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. The training programs ensure that lead paint abatement and
renovation professionals are properly trained and certified. Fees collected for this
activity are deposited in the U.S. Treasury. The EPA estimates that $16.0 million will
be deposited in FY 2015.
c. Additional fees and other changes
G. Special Accounts
Section 122(b)(3) of the CERCLA of 1980, 42 U.S.C. Section 9622(b), authorizes the EPA
to retain and use funds received through an agreement for the purposes of carrying out the
agreement. The EPA receives funds under CERCLA 122(b)(3) through payments from
potentially responsible parties (PRPs) to address past and/or future response costs at
Superfund sites. The EPA retains these funds in site-specific accounts called “special
accounts.” Through FY 2014, the EPA has collected over $4.5 billion from PRPs, earning
approximately $428.3 million in interest. In addition, the EPA has transferred over $26.8
million to the Superfund Trust Fund. The EPA has disbursed/obligated $3.0 billion, leaving
about $1.95 billion in about 1,000 special accounts to pay for further response actions. The
EPA’s policy is to use special account funds for site activities before using appropriated
resources so that appropriated funds are conserved for sites where no viable or liable PRPs
can be identified.
The amount available in special accounts does not represent the level of annual funding the
EPA would be able to use for many Superfund sites. The stage of site cleanup and the nature
of site contamination also factor into how quickly a project can proceed through the
investigation, design and construction process required to address contamination.
Special accounts are site-specific, interest-bearing sub-accounts within the Hazardous
Substance Superfund Trust Fund. The EPA establishes a special account only if there is
future work at a site and it expects to incur future costs. The use of a special account to fund
response actions is determined by the settlement agreement under which the funds were
received. Upon receipt of the funds, the agency categorizes special account receipts in three
different payment types for financial management and accounting purposes. They are:
• TR2, Non-Federal Special Accounts Unearned Revenue — Represents amounts received
under a non-federal cash-out settlement (principal only, excludes late payment interest).
This code pertains to collections related to non-federal settlement amounts for costs to be
incurred (work to be performed) in the future.
• TR2A, Federal Special Accounts Unearned Revenue — Represents amounts received
under a federal cash-out settlement (principal only, excludes late payment interest). This
code pertains to collections related to federal settlement amounts for costs to be incurred
(work to be performed) in the future.
• TR2B, Special Accounts Earned Revenue — Represents amounts for the past cost
collections, late payment interest collections from PRPs and interest revenue earned on
special account collections that have not been disbursed. This code pertains to collections
related to settlement amounts for costs previously incurred and includes collections on
future response cost (oversight) bills for work performed.
1. Special Accounts Processes
Each fiscal year, within the Superfund section of the apportionment, the EPA requests an
annual apportionment of reimbursable authority from the OMB for the estimated amount
of special account funds to be used. Once the OMB grants reimbursable authority, this
authority is housed in reserve and maintained and monitored by the OB at a national
level. Regions can request available special account funds for specific Superfund sites via
a reprogramming from the OB. Through standard CBOR reports, the OB monitors
available special account funds at the RPIO level. Requests that exceed the available
balance at the RPIO level are denied.
While the OB tracks special account available balances at the RPIO level, the CFC
monitors overall negative available account balances and negative fund code balances in
special accounts on a monthly basis. Regions should work with the CFC to resolve these
issues expeditiously, and provide status updates to the CFC on the progress of resolving
these issues as requested. It is the responsibility of the RPIO/regions to ensure that the
request for reimbursable authority does not exceed the amount of funds available by fund
type (e.g., TR2, TR2A and TR2B) in each special account and to resolve financial issues
related to overspending and negative balances, as appropriate. Making disbursements in
excess of an available cash balance could implicate the ADA. Close monitoring of the
available cash balance for the affected appropriation should be exercised.
2. State Cost Share Provisions for Superfund State Contracts
The CERCLA law authorizes the President to take action through the EPA’s Superfund
program whenever any hazardous substance, pollutant or contaminant is released or
substantial threat of such release into the environment may present an imminent and
substantial danger to the public health or welfare or the environment. CERCLA section
104, regulated through 40 CFR part 35 subpart O, requires a state to make specific
assurances, including provision for payment of state cost share, before the EPA can
obligate or expend congressionally appropriated funds for the remedial action. These
assurances are documented in a Superfund State Contract (SSC). The SSC or remedial
cooperative agreement also contains a site-specific statement of work, a project schedule
and cost share conditions that establish financial administrative responsibilities. Upon
receipt of the funds, the agency classifies SSC receipts for financial management and
accounting purposes. Its code is TR1, and the request and issuances processes are the
same as detailed in the special accounts section above.
The OB tracks SSC balances at the RPIO level and monitors negative available balances
in SSCs on a quarterly basis. It is the responsibility of the RPIO/regions to ensure that the
request for reimbursable authority does not exceed the amount of funds available in each
SSC and to expeditiously resolve financial issues related to overspending and negative
SSC balances, as appropriate. Agency officials should be careful about making
disbursements in excess of an appropriation cash balance, as this could implicate the
ADA. Officials should closely monitor available cash balances for the affected
RMDS Chapter 9 for State Cost Share Provisions for Superfund State Contracts:
Chapter 6: EPA’s Budget and Financial Organization and Structure
The EPA’s budget is tightly controlled and tracked by Congress, which means that it is
appropriated and tracked in detail by:
• Appropriation — The EPA has nine types or “buckets” of funding. The EPA may not move
any funding from one appropriation to another without statutory authority.
• National Program — All of the EPA’s dollars are tracked according to their national
program (e.g., water, enforcement or air).
• Organization (national program manager [NPM] or region) — What organization
manages the funds?
• Program Project/Program Area — Congress expects the EPA to manage resources by the
program projects described in the EPA’s budget submissions, which list the major activities,
plans and performance targets for each program project.
o The appropriators requested that the EPA also track and report program areas that are
aggregations of some program projects and portions of others.
o Congress limits whether and how much the EPA may “reprogram” funds or move them
between different program projects within the same appropriation “bucket.”
o A program project can be funded from several appropriations and work in more than one
NPM (e.g., radiation protection includes funds from Environmental Programs and
Management [EPM], Science and Technology [S&T], and Superfund appropriations).
• Budget Object Class (BOC) — All federal dollars must be tracked according to how they
o EPA BOCs are 10 Personnel Compensation and Benefits (PC&B), 21 Travel, 28 Site
Travel, 36 Expenses, 37 Contracts, 38 Working Capital Fund (WCF), and 41 Grants.
o Within each BOC there are more detailed four-digit sub-object or financial object classes
(FOCs). FOCs must be used when funds are actually obligated.
• The EPA’s Five Strategic Goals — All agency budgets are also tracked to the specific
strategic goals outlined in the agency’s strategic plan.
In addition, the agency must also track additional details, such as information technology (IT)
spending using IT codes, Superfund site-specific spending using Superfund site and activity
codes. Although Congress appropriations language normally describes only totals and special
conditions for each of the nine major appropriations, Congress expects the EPA to adhere to the
program project and other details described in the EPA’s budgetary submissions.
Below is a more detailed description of EPA’s account code structure. Details can also be found
A. Account Code Structure
After appropriations becomes public law, the EPA must implement or enact this legislation
when it takes effect. Budget execution involves a great deal of structured coding, some of it
from the U.S. Treasury and the Office of Management and Budget (OMB), to conduct
automated financial accounting, which will provide prudent stewardship of and reporting on
the use of all funds. This coding, when entered in the six financial management system
(Compass) account fields, forms unique records that capture the detailed accounting
information required by the agency and for governmentwide standards and reporting. These
records drive the integrated budgeting and accounting features in Compass. This section
covers the account structure and coding at the EPA. (Please note, the EPA is currently
revising its account code structure.)
1. Compass “Roll-up” Functionality
The EPA implemented Compass in fiscal year (FY) 2011, which included a new function
called "roll-ups." These roll-ups streamline reference data and only require users to enter
the code for spending and not the entire reference string for the code. For example, when
using program results code (PRC) 202BD4 on a spending transaction, the user only needs
to enter the code 202BD4; the system will automatically assign the other roll-ups that
belong to the code, such as the program area, program project and NPM. It is important
that the system assigns the other roll-ups because those roll-ups are budgeted to; if not
assigned, the budget will not be reduced.
Each of these codes has a host of roll-up reference tables behind them in which the codes
are linked. Taking the example above, 202BD4, there is a program area roll-up reference
table, a program project roll-up reference table and an NPM roll-up reference table in
which the roll-ups for the code must exist before the code can be used. The roll-up
functionality is one of the most notable changes from the Integrated Financial
Management System and applies most to fund, organization, PRC, BOC and project
reference tables in Compass.
2. Six-Field Compass Account Code
Compass uses a six-field account code to track spending in the financial system. Added
together, the six fields have a maximum character length of 45-characters. The following
explanation is a description of each of the six fields that comprise the financial
management system account code:
a. Budget Fiscal Year (BFY) Field — The BFY field is processed by Compass as two,
four-character fields in the account code. There are four characters for the "beginning
budget fiscal year" and four characters for the "ending budget fiscal year." Single-
year and no-year funds will not have an ending budget fiscal year. For multi-year
funds the agency uses all eight characters to take advantage of Compass’s capability
to automatically carry over multi-year funding.
Data entered into these fields is validated against the fund table in Compass, which is
controlled and maintained by the Office of the Budget (OB).
Character Location and Use(s):
1 2 3 4 Beginning BFY
1 2 3 4 Ending BFY (multi-year funds only)
2012 Beginning BFY
2013 Ending BFY (only used for multi-year funds)
b. Fund Field — The fund (or appropriation) field is processed by Compass in a
maximum six-character string as the second of six-character fields. The entire code
must exist in Compass for the specified FY for it to be recognized and accepted as
valid for use on transactions. The first two characters of this field indicate
appropriations/accounts and sub-appropriations/sub-accounts.
Character Location and Use(s):
1 Appropriation/account (one character) (corresponds to a Treasury symbol)
2 Appropriation sub-appropriation/sub-account (one character)
Identifies Specific Portion of an Appropriation Account (e.g., reimbursable
3 4 Restricted use for receipt accounts or other OB-specified unique accounts
5 6 Reserved
Code = TR (Superfund reimbursable)
3 4 2B
Code = TR2B (Superfund special account)
Data entered into this field on transactions are validated against the fund table in
Compass. The Fund table is owned by the OB and maintained by the OB and the
relevant Finance Center.
c. Organization Field — The organization field is processed by Compass in a maximum
of up to a seven-character string as the third of six fields. The character and location
of the organization field follows the basic rules below.
Character Location and Use(s):
1 2 Allowance holder (AH) two-character code; exceptions are Superfund sites and
earmarks (no other uses permitted)
3 4 RC code/blank (if nothing to follow)
RC code/zero (if more to follow)
RC code/local option (e.g., branch)
RC code/numeric state code (for all state grants)
5 6 7 Add-on code (A/B/C/D)/two-character add-on number, Superfund activity
codes R/E/P/S/H (if alpha allowance)/local option two-character, or trackable items
(other than add-on) (X in character five); reimbursable identification code (X in
character two, characters six-seven map to reimbursable agreement); if none of the
above, local option three character; or
1 2 33
Code = 33A, which is an AH/RC code
1 2 0 1
Code = 011, which is an AH/State (Region 1 – Connecticut)
1 2 3 3
Code = 33A1, which is an AH/RC/Sub RC
Examples of the Two Exceptions — Superfund Sites and Earmarks
In Compass, the AH codes for Superfund sites and earmarks are not the two-digit AH
codes but are the full five-digit code for Superfund sites and the full seven-digit code
earmarks. The roll-ups mentioned above are included in the example for these org
codes. See examples below.
Example of Exception #1 — Superfund Site Remedial Organization Code for
AH 4A00R (notice this is longer than two digits)
Sub RC BLANK
CODE = 4AD0R
Example of Exception #2 — Earmark Code in Compass
AH 0100AKN (notice this is longer than 2 digits)
Sub RC BLANK
d. AH Code — The AH code is typically the first two digits of the organization code as
above, but it must be noted that the organization field has changed significantly with
its migration into Compass. The roll-up functionality mentioned above largely
impacts how the organization field operates in Compass.
Below are the roll-up tables in Compass for organization. Each of the roll-up fields
must be defined on the roll-up table for the code to be successfully entered in
RPIO Defines Resource Planning and Implementation Offices (RPIOs) for each
AH Defines AHs for each BFY
RC Defines RCs for each BFY
Sub RC Defines Sub RCs for each BFY
Note: We will build an organization code as we walk through each roll-up table.
e. Roll-Up Codes in Compass
i. Defining RPIO Roll-Up Codes in Compass — RPIO codes must be defined
individually in Compass. The RPIO code must be defined on its own table named
“RPIO for specific BFYs” for the organization codes to properly be used and set
up in Compass.
Example — RPIO Roll-Up Code 05
ii. Defining AH Roll-Up Codes in Compass — AH codes must also be defined
individually in Compass. The AH code must be defined on its own table named
“AH/Earmark/Site AH for specific BFYs” for organization codes to properly be
used and set up in Compass.
Example — RPIO Roll-Up Code 05
AH Roll-Up Code 05
iii. Defining RC Roll-Up Codes in Compass — RC codes must also be defined
individually in Compass. The RC code must be defined on its own table named
“RC for specific BFYs” for organization codes to properly be used and set up in
Example — RPIO Roll-Up Code 05
AH Roll-Up Code 05
RC Roll-Up Code 05F
iv. Defining SubRC Roll-Up Codes in Compass — Sub RC Codes must also be
defined individually in Compass. The Sub RC Codes must be defined on its own
table named “Sub RC for specific BFYs” for organization codes to properly be
used and set up in Compass.
Example — RPIO Roll-Up Code 05
AH Roll-Up Code 05
RC Roll-Up Code 05F
Sub RC Roll-Up Code 05F0073
f. Setting up Organization Codes in Compass — Now that all the roll-ups are defined
for the code in Compass, the OB can set up the actual organization code in Compass
for spending and reprogramming.
Roll-Up Roll-Up Value
Sub RC 05F0073
The organization reference table in Compass is jointly maintained by the OB and OC,
who enter reimbursable organization codes into Compass.
The OB has a process for requesting organization codes in Compass. Organizations
must fill out a spreadsheet template and forward it to the OB for organization codes to
be entered in Compass. The spreadsheet template request is located in the Compass
User Resources Database (CURD), which is housed on the OB Database Portal.
COMPASS ACCOUNT CODE UTILIZATION
CHARACTER LAYOUT / PRIMARY UTILIZATION
BFY FIELD (8) (2x4)
1 2 3 4 1 2 3 4
BFY (2-YEAR FUNDS ONLY)
Fund Field (6)
1 2 3 4 5 6 APPROP. SUB — RESTRICTED USE
RESERVED APPROP (e.g. Reimbursable)
Organization Field (7)
1 2 3 4 5 6 7
A.H. R.C./ Local Op.
A. Add-on Code
B. SF Activity Code
C. Trackable Items
D. Reimbursable I.D.
E. LOCAL OPTION
PROGRAM FIELD (9)
1 2 3 4 5 6 7 8 9
Program Results Goal Objective NPM Program / Agency
Local Code (PRC)
Project Activity Option (Spending Only)
SITE/PROJECT FIELD (8)
1 2 3 4 5 6 7 8
A. SF Region/Site SF Activity Operating Unit
B. ********* Working Capital Funds ********
C. ****Information Technology Code ****
E. *** Local Option (to be determined) ***
COST/ORG FIELD (7)
1 2 3 4 5 6 7
A. SEMS (formerly CERCLIS) Serial Number
B. OPPT Extramural IT Classifications.
C. Other Local Option (to be determined)
Figure 6. Account code utilization.
g. Program Field: PRC Field — The Compass program field contains what the EPA
calls its PRC and is processed by Compass in a nine-character string.
The PRC table describes information pertaining to each PRC, such as the title,
goal/objective NPM, program project and activity code.
PRC Character Location and Use(s):
1 Goal — Comprises one character and represents the agency’s long-term strategic goals.
2 3 Objective — Comprises two characters and represents each objective under each goal.
Subobjectives will still be used for performance and planning and in BAS, which serves
as the primary agencywide database during formulation of the agency’s budget.
4 NPM — Comprises one character and identifies the NPM associated with resources
being used for a particular goal and objective.
5 6 Program/Project — Comprises two characters and defines what the agency does based
upon specific statutory authority (programs) or what significant tasks or problems the
agency is addressing (projects). The program projects current for a given FY are located
in the annual Advice of Allowance.
7 Activity — Comprises one character and represents how we accomplish our objectives in
general terms. These activities are somewhat generic across all government agencies (for
example: research and development, financial assistance, program implementation,
Agency Activity — As of FY 2012, the agency activity code went out of use. It is
represented by an X for FY 2012 and beyond. It is represented by XXs to maintain
position. The code was for spending actions, including fixed account numbers (all
characters of the PRC). Similar to the way the four-character finance object code used for
spending rolls up to the two-character BOC, the full PRC (up to nine characters if RPIO
activity is included) will roll up to the six-character PRC in the budget).
8 9 RPIO Activity — Comprises two characters for unique reporting needs.
The roll-up functionality has a significant role in how the PRC field operates in Compass.
Below is how the PRC field operates in conjunction with the roll-up functionality in
Each of the roll-up fields MUST be defined on the roll-up table for the code to be
successfully entered in Compass.
Compass Tables Information to be found
NPM Defines the NPM for each BFY
Program Area Defines the Program Areas for each BFY
Program Project Defines the Program Project for each BFY
Program Type Defines the Program Type for each BFY
(Currently this field is reserved in Compass)
Note: You can see how a PRC code is built in the roll-up table below.
• Defining NPM Roll-Up Codes in Compass — NPM codes must be defined
individually in Compass. The NPM code must be defined on its own table named
“NPM for specific BFYs” for the PRC codes to properly be used and set up in
Example — NPM Roll-Up Code B
• Defining Program Area Roll-Up Codes in Compass — Program area roll-up
codes must also be defined individually in Compass. The program area roll-up
code must be defined on its own table named “Program Area for specific BFYs”
for PRC codes to properly be used and set up in Compass.
Example — NPM Roll-Up Code B
Program Area Roll-Up Code WQP
• Defining Program Project Roll-Up Codes in Compass — Program project roll-up
codes must also be defined individually in Compass. The program project code
must be defined on its own table named “Program Project for specific BFYs” for
PRC codes to properly be used and set up in Compass.
Example — NPM Roll-Up Code B
Program Area Roll-Up Code WQP
Program Project Roll-Up Code D4
h. Setting up PRC Roll-Up Codes in Compass
Now that all the roll-ups are defined for the PRC code in Compass, the OB can set up
the actual PRC Code in Compass for spending and reprogramming.
Roll-Up Roll-Up Value
Program Area WQP
Program Project D4
Note: Objectives, subobjectives, agency activities and RPIO activities do not need to
be defined on their own roll-up table. These values are not budgeted to and therefore
do not need a roll-up table for definition.
The PRC reference tables in Compass are maintained by the OB.
For more information regarding specific PRCs, see the latest program/project
description book at the EPA intranet URL address,
i. Site/Project Field — Compass processes the site/project field in an eight-character
string as the fifth of six character fields. Project codes are managed in the project
reference table in Compass.
For those regions that have exhausted their initial supply of site IDs, the first position
will be “A” followed by one position for the region (with "0" representing Region
10). For example, A401 represents a new site ID for Region 4 after the initial supply
of site IDs has been exhausted.
All work performed under the Superfund, leaking underground storage tank (LUST),
oil and WCF appropriations will use the Site/Project field. If a specific Superfund and
oil Site/Project is identified, an IT code cannot be sited in the Site/Project field.
It is recommended that this field have multiple uses and structures based upon the
FUND code used in the transactions. The use of the Compass Project Cost
Accounting System (PCAS) module in conjunction with this field will enable the
BFY/Fund field to determine which structure is valid for that Fund code. The PCAS
offers three layers of structure:
• Agencywide code, which enables the project costs to be gathered regardless of
• Project, which is the basic level to gather obligations, expenditure or cost data.
• Subproject, which allows for a lower level of data structure linked to a specific
Examples: Superfund positions enable the data gathering by site ID, activity code
and operable unit within the site. [Note: All eight characters must be entered for the
edit program to recognize the code as valid.]
Character Location and Use(s):
1 2 3 4 Superfund ID identifying region and the specific site or non-site cost
5 6 Superfund activity code
7 8 Operable unit within a specific site
(If no operable unit, enter 00)
j. WCF — Positions enable the gathering of fund data and costs by each service level
and charge customers of the fund a standard charge for each of the service levels
Character Location and Use(s):
1 Indicates whether code is a cost or revenue
2 3 Identifies cost pool
4 5 6 7 For revenue codes, denotes customer's AH and responsibility center codes
8 Future uses
k. IT Code — Used to track purchasing related to IT.
Character Location and Use(s):
[Note: For all characters except the first, use zero if N/A]
1 L for IT
2 3 Specific identifiers for major and significant project and/or system
4 Life cycle phase of major and significant project. If second and third
characters are not zero, then fourth character must be a P, D or M
5 6 7 Specific IT cost area for security and regional uses
8 Future uses
For more information on use of IT codes, read the OCFO policy on the agency’s
intranet at http://intranet.epa.gov/ocfo/policies/policy/pa05.htm and the annual
Advice of Allowance memorandum.
l. Conference Code — Positions enable the gathering of data by organization, AH and
conference reporting thresholds. [Note: All eight characters must be entered for the
edit program to recognize the code as valid.]
• Non-WCF Conference Reporting
1 M for conference reporting (including non-conference travel)
2 Specific identifiers for magnitude of conference costs. Second character
must be E, S, M, L or N
3 4 RPIO submitting EPA Form 5170 (Conference-Related Activities
5 6 AH submitting EPA Form 5170 (Conference-Related Activities Spending
7 8 Conference number
• WCF Conference Reporting
1 2 3 C G S for conference reporting (including non-conference travel) [Note:
First three characters must be “CGS”]
4 Specific identifiers for magnitude of conference costs. Fourth character
must be E, S, M, L or N
5 6 AH submitting EPA Form 5170 (Conference-Related Activities Spending
7 8 Conference number
For more information on the use of conference codes, refer to the conference Web
page located on the agency’s intranet at
m. Other Uses — While OB owns the account code and the project field, OFM manages
the field. Other offices planning to use this field for currently approved purposes
should contact the OFM. New uses of the project should be discussed with the OB
Character Location and Use(s):
1 2 3 4 5 6 7 8 Local Option
Data entered in the Site/Project field will be verified for validity by the project
reference table and the sub-project reference table in Compass. In each of the regional
offices, access will be granted to an Superfund finance person for updating new site
names and establishing codes.
This field can be a required entry within a particular Fund.
n. Cost/Org Field — Cost/org codes are created by offices who want to track only
spending for certain projects. Cost/org codes are housed and managed in the
organization reference table in Compass. Compass processes the cost/org field in a
seven-character string as the last of six character fields.
Examples: The Office of Land and Emergency Management proposed using this field
for a three-character activity sequence number called a "Superfund Enterprise
Management System (SEMS, formerly CERCLIS) Serial Number."
Office of Pollution Prevention and Toxics classifications were moved here from the
Project field when the IT classifications were begun. The field was to be used only for
Cost orgs also use the roll-up functionality in Compass. Below are the roll-up tables
used in Compass for the cost/org field. Cost/orgs only use the RPIO roll-ups; this
MUST be defined on the roll-up table for the code to be entered in Compass.
RPIO Defines RPIOs for each BFY
Note: The Office of the Chief Financial Officer will build a cost org code for each
• Defining RPIO Roll-Up Cost Codes in Compass
RPIO codes must be defined individually in Compass. The RPIO code must be
defined on its own table named “RPIO for specific BFYs” for the cost org codes
to properly be used and set up in Compass.
Example — RPIO Roll-Up Code 20
• Setting up Cost Org Codes in Compass
Now that the RPIO roll-up is defined for the cost org code in Compass, the OB can
set up the actual cost org code in Compass for spending.
Roll-Up Roll-Up Value
The OB has a process for requesting cost org codes in Compass. Organizations must
fill out a spreadsheet template and forward it to the OB for cost org codes to be
entered in Compass. The spreadsheet template request is located in CURD, which is
housed on the OB Database Portal.
Data entered in this field is verified in the organization table in Compass. The
organization table is maintained by the OB and Cincinnati Finance Center for
reimbursable org codes.
B. Appropriation Number (Treasury Account Symbol)
The Treasury identifies each appropriation account using a Treasury account symbol. These
symbols or codes consist of seven or more alpha-numeric characters. For example:
6812/130108 EPA FY 2012/2013 EPM account
68-68X8153 EPA LUST Trust Fund account
68X0110 EPA Buildings and Facilities (B&F) account
The account symbols provide the following information:
• Department or Agency Code — The first two characters identify the agency (the EPA =
68) responsible for the account; the code is assigned by the Treasury.
• Period of Availability — The next 4 character(s) represent the period of availability of
the account for obligation.
○ One-year appropriations: A single digit (0 through 9) indicates the FY for which the
appropriation is available for obligation (e.g., 13 = FY 2013). Currently, the EPA
does not have one-year appropriations.
o Multiple-year appropriations: Two digits separated by a slash indicate the first and
last FY for which the appropriation is available for obligation (e.g., 12/13 = FY
○ No-year appropriations: An "X" is used to designate an appropriation that is available
for an indefinite period of time.
• Fund Group: The last four digits identify the specific account by Treasury fund group
(e.g., 0108 = EPM).
C. Object Classes
Per OMB Circular A-11, Section 83, all federal dollars must be tracked according to how
they are used. Agencies use a system called “Object Classes” to code transactions in federal
financial systems according to how the money was issued. The EPA (and some other
agencies) has BOCs to budget for and distribute (allocate) funds, and it uses more detailed
FOCs to track the commitment, obligation and expenditure of funds.
EPA’s BOCs are 10 PC&B, 21 Travel, 28 Site Travel, 36 Expenses, 37 Contracts, 38 WCF,
and 41 Grants. EPA’s four-digit FOCs are coded on documents when funds are committed,
obligated and expended.
The object class codes and definitions are documented in Resource Management Directive
System (RMDS) Chapter 2590 and can be viewed online at
http://intranet.epa.gov/ocfo/policies/direct/2590objclass.htm. This contains more detailed
definitions, regulations and guidance, explanations of how the EPA manages object classes,
and definitions for each BOC and FOC used by the agency.
All of the agency's financial class codes (cross-walked to the OMB’s object class codes and
the EPA’s BOC codes) can be viewed in Compass by accessing the FOC code table and
observing the column labeled "Object Class".
D. EPA Appropriations
The EPA has nine major appropriations or funds. EPA may not move any funds between
appropriations without prior approval of Congress. There are three major types of
1. One-year appropriations are available only to meet a bona fide need of the FY for
which they were appropriated. Funds must be obligated during that FY. As of 2016, the
EPA does not have any one-year appropriations.
2. Multi-year appropriations are subject to the same bona fide need rule applicable to
annual appropriations, apart from the extended period of availability. The EPA typically
receives multi-year appropriations available for obligation for two FYs. Because of the
extended period of availability, multi-year appropriations may have unobligated balances
that "carry over" from one year to the next and are available for obligation following the
annual reapportionment by the OMB. The OMB and Congress consider these funds to be
appropriated for specified annual needs; they request additional reporting requirements
and subject carryover balances to additional scrutiny. All of EPA’s multi-year
appropriations have a two-year obligation deadline, with an additional seven years to
outlay funds (except for E-manifest, which has a three-year obligation deadline).
3. No-year appropriations are available for obligation to satisfy a need arising during the
year of and subsequent to the no-year appropriation. For an appropriation to be no-year, it
must be expressly stated as such in the appropriating language. No-year funds may be
obligated for needs arising in: 1) the year the no-year funds were appropriated and 2)
years subsequent to the year of the no-year appropriation. Prior year(s) obligations may
not be paid with future year no-year appropriations, unless expressly provided by law.
E. EPA Appropriation Accounts
Annual appropriations acts provide the funding for authorized programs. While certain
funding levels and limitations may be included in authorizing legislation, appropriations
legislation will generally control the disposition of an issue where the appropriations act
itself clearly demonstrates congressional intent to depart from funding levels or limitations in
the authorizing legislation. Nevertheless, the authorizing act and appropriations act should be
harmonized to the greatest extent possible.
The authorizing legislation and the appropriations go hand in hand to establish a mandate for
environmental action followed by the funds to carry out the mandate. Within the context of
appropriations as to time, purpose and amount, these periods define the time of availability,
and to a somewhat lesser degree, the purpose. A review of eight major EPA appropriations as
they fall within these periods of availability follows.
Multi-year Appropriations. The EPA’s multi-year appropriations are (all with a two-year
obligation deadline, except for E-manifest):
1. EPM Appropriation
The EPM appropriation encompasses a broad range of abatement, prevention and
compliance activities, as well as personnel compensation, benefits, travel and expenses
for agency programs with the exception of those funded by the S&T, Hazardous
Substance Superfund, LUST Trust Fund, Inland Oil Spill Programs (OIL), B&F,
Hazardous Waste Electronic Manifest System Fund, and the Office of the Inspector
General (IG) appropriation accounts. Abatement, prevention and compliance activities
include setting environmental standards, issuing permits, monitoring emissions and
ambient conditions, and providing technical and legal assistance toward enforcement,
compliance and oversight.
The agency’s EPM activities include oversight and assistance in the implementation of
environmental statutes. In addition to program costs, this account funds a large portion of
the administrative costs associated with the operating programs of the agency, including
support for executive direction, policy oversight, resources management, general office
and building services for program operations, and implementation of agency
environmental programs except those funded under other appropriation accounts. Funds
are used in headquarters, the 10 EPA regional offices and all non-research field
operations. EPM funds are not available to carry out the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), with the exception of the
administration of the brownfields program.
In contrast, program-specific research, such as sample processing, is performed in
regional office laboratories or at the National Enforcement Information Center; it is
funded though the EPM and Superfund appropriations.
2. S&T Appropriation
The EPA S&T appropriation funds the scientific knowledge and tools necessary to
support decisions leading to improved protection of human health and the environment
and to advance the base of understanding of environmental sciences. Thus, the S&T
appropriation funds the EPA’s basic research program. The agency's efforts using S&T
funds are conducted through contracts, grants and cooperative agreements with
universities, industries, other private commercial firms, nonprofit organizations, state and
local government, and federal agencies, as well as through work performed at the EPA's
laboratories and various field stations and field offices. S&T funds are available for
programs that support training in research techniques such as fellowships.
The S&T appropriation funds activities such as developing and improving sampling and
analytical methods and instruments for measuring pollutants; determining the effects of
pollutants on human health, ecosystems and the general environment; researching the
processes that relate to pollution; evaluating technologies for preventing and controlling
pollution; and developing guidelines and research tools to improve risk assessments. The
S&T appropriation also provides operating expenses for most agency research facilities.
This includes categories such as personnel salary and benefits, laboratory supplies and
materials, operation and maintenance of laboratory facilities, equipment, IT support,
human resource development, travel, and printing. Beginning in FY 1996, this account
also funds hazardous substances research appropriated in the Superfund account and then
transferred to the S&T appropriation account. The appropriated Superfund funds are
available for obligation for only two years once transferred into the S&T account. The
agency’s financial coding structure ensures that both S&T sources of funds are tracked
separately to provide proper accounting.
3. Office of Inspector General (OIG) Appropriation
The OIG appropriation provides funding for the EPA audit and investigative functions
and program evaluations that promote economy, efficiency, and effectiveness, by
identifying and recommending corrective actions and opportunities for improvement of
management and program operations. The OIG also prevents and detects potential fraud,
waste and mismanagement.
The audit function provides contract audit, performance audit and financial audit services.
Contract audits provide professional judgments, findings and recommendations to agency
contracting officials on accounting and financial matters relative to negotiation, award,
administration, repricing and settlement of contracts. Performance audits review and
evaluate all facets of agency operations. Financial audits review and evaluate the agency’s
financial statements and provide an opinion on their validity and on the
financial health of the agency as a whole. Grant audits focus on the effectiveness of
individual projects, reasonableness of costs and adequacy of management systems. The
investigative function provides for the detection and prevention of improper and illegal
activities involving programs, personnel and operations.
In addition to program costs, this account funds PC&B, travel, and administrative costs
associated with the OIG program.
Historically, there are two fund sources for the budget authority in the OIG account:
• Direct OIG appropriations.
• Funds transferred from the Superfund appropriation (similar to the Superfund to S&T
transfer). The appropriated Superfund funds are available for obligation for only two
years once transferred into the OIG account. The agency’s financial coding structure
ensures that both OIG sources of funds are tracked separately to provide proper
4. Hazardous Waste Electronic Manifest System Fund (E-Manifest)
The EPA FY 2014 Appropriation Act established a new three-year appropriation account
to provide funds to “carry out section 3024 of the Solid Waste Disposal Act (42 U.S.C.
6939g), including the development, operation, maintenance, and upgrading of the
hazardous waste electronic manifest system.”
No-year Appropriations. EPA no-year appropriations are available for obligation without FY
limitation. They remain available until expended, rescinded or otherwise withdrawn. The EPA’s
no-year appropriations are:
5. Hazardous Substance Superfund Trust Fund (Superfund) — The Superfund
appropriation is provided to carry out the legislative mandates of CERCLA as amended
by the Superfund Amendments and Reauthorization Act (SARA) by addressing
uncontrolled hazardous waste sites and the release of hazardous substances. The
legislation authorizes the EPA to 1) provide emergency response to hazardous waste
spills; 2) take emergency action at hazardous waste sites that pose an imminent hazard to
public health or environmentally sensitive ecosystems; 3) engage in long-term planning,
remedial design and construction to clean up hazardous waste sites where no financially
responsible party can be found; 4) take enforcement actions to require responsible private
parties to clean up hazardous waste sites; and 5) take enforcement actions to recover costs
where the Superfund has been used for cleanup.
In addition to program costs, this account funds PC&B, travel and administrative costs
associated with the agency’s administration and implementation of the Superfund
program. Program-specific research, such as sample processing, is performed in regional
office laboratories or at the National Enforcement Information Center and is funded
though the EPM and Superfund.
6. LUST Trust Fund
The LUST Trust Fund appropriation is provided to carry out the legislative mandates of
the SARA by conducting corrective action for releases from LUSTs containing petroleum
and other hazardous substances. The EPA implements the LUST Program primarily
through state cooperative agreements, which enable states to:
• Oversee corrective action conducted by underground storage tank (UST) owners and
• Conduct corrective action when UST owners or operators are unknown, unwilling or
unable to perform corrective action properly or where prompt action is necessary to
protect human health and the environment.
• Take enforcement actions against recalcitrant owners and operators.
• Conduct corrective action-related training and research (e.g., to promote efficient
States and the EPA may recover LUST Trust Fund costs from liable owners and
The Energy Policy Act of 2005 authorized the use of funds contained in the LUST Trust
Fund for leak detection, prevention, related inspection and enforcement activities.
EPA also uses LUST Trust Funds for corrective action program implementation,
including oversight, training, research, enforcement and Indian country implementation.
In addition to program costs, this account funds PC&B, travel and administrative costs
associated with the agency’s administration and implementation of the LUST Program.
The Trust Fund is financed by a 0.1-cent tax on each gallon of motor fuel sold
nationwide. The U.S. Department of Treasury provides information on the current
balance in the LUST Trust Fund. Although the LUST Trust Fund has a balance, the EPA
may only obligate the amount provided through appropriation. For more information,
Funds are appropriated to the EPA B&F account each year to cover the necessary major
repairs and improvements to existing installations that house the agency. The B&F
appropriation is the only appropriation that can be used for the construction, alteration,
repair, rehabilitation and renovation of EPA facilities if the cost of the project is $150,000
or greater. This appropriation also covers new construction projects when authorized. It is
not available to pay rent at facilities the EPA leases. Minor repairs and improvements to
existing installations are usually funded by the EPM and S&T appropriations as
authorized by the annual appropriations act.
The OIL appropriation is funded from the Oil Spill Liability Trust Fund (OSLTF). The
OLSTF provides funds to the EPA’s Oil Spill Response account each year. The EPA is
responsible for directing, monitoring and providing technical assistance for major inland
oil spill response activities. This involves setting oil prevention and response standards,
initiating enforcement actions for compliance with Oil Pollution Act and Spill Prevention
Control and Countermeasure requirements, and directing response actions when
appropriate. The EPA carries out research to improve response actions to oil spills,
including the use of remediation techniques such as dispersants and bioremediation.
Funding for specific oil spill cleanup actions is provided through the U.S. Coast Guard
from the OSLTF through reimbursable Pollution Removal Funding Agreements and other
In addition to program costs, this account funds PC&B, travel, and administrative costs
associated with the agency’s administration and implementation of the Inland Oil Spills
9. State and Tribal Assistance Grants (STAG)
The STAG appropriation includes three components: 1) infrastructure grants, including
State Revolving Funds (SRF); 2) categorical STAG grants; and 3) other specified grant
programs, such as Alaska Native Villages, Diesel Emissions Reduction Grant Program,
Brownfields Projects and Mexican Border.
Funding for the SRFs constitutes the largest part of the STAG account. These funds are
used to capitalize revolving loan funds in each state, which provide loans to
municipalities for major wastewater and drinking water infrastructure projects. The
Water Quality Act of 1987 reauthorized the “construction grants” program through 1990
and provided for its phase-out and replacement with an SRF program to be financed by
grants to the states.
There are two types of water infrastructure SRFs: clean water SRF and drinking water
SRF. The states loan these funds to municipalities for the infrastructure projects, who
then pay back their loan by making payments back into the state SRF account. The state
can then make more loans (hence the term "revolving") to other municipalities.
Categorical STAG (also referred to as continuing environmental program grants) provide
financial assistance to states and tribes in numerous environmental categories by
program. These grants help states and tribes develop the technical, managerial and
enforcement capacity to operate the environmental programs that monitor drinking water
systems, implement water quality standards, combat air pollution, promote the use of
safer pesticides, manage hazardous waste and ensure compliance with federal
environmental laws. In addition, categorical STAG funds are available in specified
amounts appropriated for certain grant programs identified in the statute, such as
brownfields response program grants and Exchange Network grants.
The Omnibus Rescissions and Appropriations Act of 1996 (P.L. 104-134) provided the
EPA permanent authority within the STAG account to award Performance Partnership
Grants (PPGs) with categorical STAG funds. PPGs permit states and tribes to combine
STAG "categorical grants” (i.e., air, water) into one or more grants, to be used for
addressing the unique priorities of each state or tribe. PPGs were created to reduce the
burden on and increase the flexibility for state and tribal governments that need to
manage and implement their environmental protection programs. At the same time, they
produce the results-oriented performance necessary to address the most pressing concerns
and achieve a clean environment.
1. Accounts Receivable and Collections
All accounts receivables and collections are handled through the applicable EPA finance
center. EPA organizations are not allowed to independently bill and collect monies. EPA
organizations must provide billing information to their finance center, which will provide
the bill to the vendor and/or individual that owes monies to the EPA. Each finance center
is responsible to collect the debt for the first 90 days. If the debtor fails to enter into a
payment agreement or pay the debt at the 90-day mark, the debt is referred to Treasury
for collection. Once the money is collected by the EPA finance center, the money is
credited back to the applicable EPA organization or other designated place. Policies
related to accounts receivables, billing and collecting can be found at
2. Suspense Accounts
Suspense accounts are used by the EPA finance center when a money received does not
have adequate information to assign it to an EPA organization. These accounts are used
because the Treasury requires that EPA record the collection and payment of all monies
within three business days. After an item is placed in suspense, the EPA finance center
has 60 days to research and apply the correct accounting information to the payment or
collection. The OC monitors monthly the balance in EPA suspense accounts and requires
each EPA finance center to provide a reason for not clearing any balances greater than 30
days. For more information, see RMDS Chapter 2540-03-P1, “Fund Balance with
Treasury Management Standard Form 224 Reconciliation,” at
G. Payroll Management and Tracking/PeoplePlus
The Department of the Interior’s Interior Business Center (IBC) provides payroll processing
and personnel record services to the EPA. This is part of the governmentwide human
resources line of business. Prior to the implementation of IBC’s payroll processing, the
Defense Finance and Accounting Service provided this service. The EPA uses the PeoplePlus
reporting system for time and attendance.
Since payroll is such a large expense at the EPA, AHs/fund control officers must monitor and
control it carefully. PC&B costs must be continually reviewed and projected for the entire
FY. Necessary steps must be taken to ensure that costs remain within all approved limits.
1. Payroll Accounting
Obligations for monthly payroll costs are generated by the biweekly submission of time
and attendance forms for all employees. After processing payroll for each pay period,
actual PC&B costs are posted and an accrual for the remainder of the month is calculated
based on the actual payroll data. PC&B actuals, plus the remaining accrued balance of the
month, are displayed in Compass under budget object class Code 10.
Each employee has one or more standard fixed account numbers to which all payroll
expenses for the employee are normally charged. The fixed account number(s)
corresponds to the program results code that supports employee work years and personnel
costs. It shows whether an employee is paid with management and support funds or from
environmental program funds. It is important that the employee is assigned a fixed
account number(s) that corresponds to the work the employee actually performs so that
expenditures for specific environmental programs or activities are accurately reported. As
each pay period ends, some or all of the employee's payroll expense can be charged to
account numbers other than their fixed account number, if appropriate. Consequently,
payroll accruals could be inaccurate if employees had any unusual payroll distributions to
other account codes during the previous pay period.
2. Split-Funding Payroll Costs
As noted above, program offices may charge an employee's payroll costs to more than
one account. This can be done through direct charging as needed or by an established
methodology. No documentation or approval is needed to direct charge. However, to use
a methodology, written documentation must be submitted to the appropriate finance
center at the beginning of each FY, which shows how the different percentages of the
appropriations benefiting are to be charged throughout the FY. Specific names of the
employees, their social security numbers and their fixed account numbers are not needed
in the documentation. Of course, only appropriations available for PC&B may be used in
split-funding payroll costs.
3. Calculating Full-Time Equivalent (FTE) Usage
An “FTE” or “work year” is the number of compensable hours that an employee working
full time would work in a given year. A work year normally has 2,080 compensable
hours. (8 hours × 5 days × 52 weeks = 2,080). However, the number of work days in a
year vary slightly based on how the calendar falls in any given year. Thus, in some years,
the number of hours can be 2,088 or 2,096 compensable hours. The OMB published the
official number of work hours for each year annually in OMB Circular A-11.
To calculate FTE usage, compute the total number of hours worked in an organization,
including holidays, leave, cooperative education and stay-in-school hours. Divide this
number of hours by the compensable hours in the FY to find the FTE usage to date.
Dividing this FTE usage by the FTE ceiling gives percent usage. This fraction should be
about the same as the fraction of the year that has passed. On March 31, for example, 50
percent of the FY has passed, so 50 percent of the FTE ceiling should be used. If FTE
usage is too high or low, the AH should discuss this with the small business ombudsman
for possible redistribution of FTE ceiling or other action as necessary.
Chapter 7: Budget Execution Rules and Guidance
Federal managers must be careful to follow all of the applicable rules before authorizing any
financial transactions. They must be careful to ensure that all actions are within the legal limits
and for the purposes for which the monies were provided. Below are some major budget
execution rules, followed by a more detailed discussion of some major concepts.
Overview of Major Spending and Charging Guidelines and Rules
Purpose, Amount, Conditions, Time Test
Congressional appropriation provides funds for a certain purpose and set amount, under
particular conditions, and with set deadlines.
• You may not spend monies without meeting all four conditions.
• The EPA tends to have “two-year” appropriations that expire on September 30 of the second
year after they are appropriated and “no-year” appropriations that remain available until
expended. Funds appropriated for the E-Manifest System are three-year funds.
a. Augmentation — Agencies may NOT use one appropriation to supplement another
(violates congressional intent on appropriation “purpose” and “limits”). Additionally,
agencies may not accept funds from any outside source (including other federal agencies)
without explicit statutory authority. Nor may the agency be in “constructive receipt” of
outside funds by effectively controlling how money is used — even if the monies are
never deposited in federal accounts.
b. Specific over General — Where Congress has provided the EPA with a specific
appropriation for a particular purpose, the EPA cannot use a more general appropriation
for that same purpose. General appropriations cannot be used to “cover the difference,”
even if the agency has already run out of money in the more specific appropriation.
c. Pick and Stick/Consistent Charging — If two appropriations can reasonably be
interpreted to be equally available for the same “purpose,” and neither is more specific
than the other, the agency may choose which to charge, but it must consistently charge
one. (Once the Agency “picks” which appropriation to charge, it must “stick” to using
that appropriation from then on.)
i. Ensuring Consistent Charging. Following the “Pick and Stick” principle, fund control
officers (FCOs) and managers should be consistent in charging across different types
of spending. The same logic should apply to how they charge grants, contracts,
payroll and travel. For example, if a person is charging some travel to a fee account,
is a portion of that person’s work time that day, or contract that he or she is using,
also being charged?
d. Necessary Expense — Spending is necessary if it meets three tests:
i. It will materially increase an employee’s (or organization’s) output.
ii. The employee would not be reasonably expected to furnish the expenditure as part of
their personal equipment.
iii. The expense is not prohibited by law.
e. Severable vs. Non-severable Services — Severable services can be separated into
components, each of which can be independently performed to meet a separate
government need. Non-severable services cannot be divided into components. (E.g., a
contract for recurring window-cleaning services can be cancelled halfway through with
no loss of value, but a contract to write a final report is almost worthless if stopped
halfway through. The former is severable; the latter is non-severable.) Severable services
must be charged to an appropriation that is available and will remain available
(unexpired) at the time services are rendered. Non-severable services, however, must be
charged only to an appropriation available at the time the agreement is signed, regardless
of when the services will be performed.
f. Bona Fide Needs Governing Charging to a Fiscal Year (FY) — Spending must be tied to
the program needs for that FY. An appropriation limited for a definite period may be
obligated only to meet a legitimate or bona fide need arising during that appropriation’s
period of availability. 31 U.S.C. 1502(a). Does not apply to no-year funds. 43 Comp.
Gen. 657, 661 (1964).
The EPA’s Office of General Counsel (OGC) Civil Rights and Finance Law Office
provides expertise on detailed interpretations at http://intranet.epa.gov/ogc/civil.htm.
A. Purpose, Time and Amount Explanations: Appropriation Law Concepts
For appropriated funds to be legally available for expenditure on an activity, three tests must
1. Appropriations as to Purpose
The purpose statute, 31 U.S.C. 1301(a), provides that appropriated funds may be obligated
and expended only for the purpose(s) for which they were appropriated by Congress
unless the expenditure is otherwise provided by law. In some cases, Congress may specify
the precise purpose for which it has appropriated funds to the EPA; however, the bulk of
the funding is in the form of “lump sum” appropriations for general purposes, such as
“Environmental Programs and Management” (EPM) or “Research and Development”
(R&D), or to carry out a broad statute, such as the Comprehensive Environmental
Response Compensation Liability Act (CERCLA) or the Oil Pollution Act
The first step in interpreting an appropriations act is to examine the plain meaning of the
words in the law itself. If Congress has directly spoken to the precise question, then its
unambiguously expressed intent must be given effect. Committee reports or portions of
committee reports that are expressly incorporated into the appropriations act itself have
the force of law. Other indicators of congressional intent in legislative history are
examined only if the plain meaning of the statute is unclear.
Legislative history includes conference committee reports, appropriations committee
reports and floor debates. Conference committee reports have the greatest weight since
they reflect the views of congressional representatives from both houses and are usually
voted on and adopted by both houses when appropriations legislation is passed.
Appropriations committee reports are next in order of importance, followed by floor
debates. EPA and appropriations committees consider Congressional Budget
Justifications to be part of the legislative history.
The Supreme Court ruled in Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978), that
directions to federal agencies contained solely in congressional committee reports are not
legally binding. However, an agency’s failure to adhere to congressional intent can have
adverse practical consequences for the agency‘s relationship with Congress. The agency,
as a matter of policy, will generally act in accordance with the views expressed in
conference reports, appropriations committee reports and other documents that reflect
Since it is not possible to specify every item for which appropriations will be expended
within the Appropriations Act, particularly if it is a lump sum appropriation, the spending
agency has reasonable discretion in determining how to carry out the objectives of the
appropriation. This concept is embodied in the “Necessary Expense” rule.
An expenditure must meet three tests to be justified as a necessary expense:
• The expenditure must bear a logical relationship to the appropriation being charged.
In other words, it must make a direct contribution to carrying out either a specific
appropriation or a statutorily authorized agency function for which more general
appropriations are available.
• The expenditure must not be prohibited by law.
• The expenditure must not be otherwise provided for; that is, it must not be an item
that falls within the scope of some other appropriation or statutory funding scheme.
Additionally, for an expenditure to be justified as meeting the purpose of a particular
appropriation, it is important to know whether an action is funding something from one
appropriation that was previously funded from a different appropriation. In 59 Comp.
Gen 518 (1980), the U.S. Government Accountability Office (GAO) noted:
“Where either of two appropriations may reasonably be construed as available for
expenditures not specifically mentioned under either appropriation, the determination of
the agency as to which of the two appropriations to use will not be questioned. However,
once the election has been made, the continued use of the appropriation selected to the
exclusion of any other for the same purpose is required.”
This concept has become known throughout the federal government as the “Pick and
Stick” rule. The agency may make an initial election as to which appropriation to use (the
pick), but once the decision has been made, the agency must stick to its choice unless it
informs Congress before the beginning of the FY that it will change charging practices.
Additionally, the agency may not, because of insufficient funds or other reasons, change
its election in a subsequent FY and use another appropriation unless Congress is first
informed of the agency’s planned change.
Violating 31 U.S.C. 1301(a) by expending an appropriation for an unauthorized purpose
does not necessarily violate the Antideficiency Act (ADA), 31 U.S.C. 1341. The ADA is
violated if a purpose violation cannot be corrected because sufficient unobligated funds
do not exist during the relevant FY in the correct appropriation account. Further, both the
GAO and Office of Legal Counsel (OLC) agree that an expenditure or obligation of
appropriated funds for a purpose precluded by an express prohibition in an appropriation
act violates the ADA, because no funds are available for that purpose. Contrary to the
GAO’s position, however, the OLC has advised the EPA that violating a prohibition on
expending appropriated funds that is not codified in an appropriation does not violate the
Violations of appropriations laws are serious matters, which can undermine the agency‘s
working relationship with Congress. Responsible EPA employees may penalized with
administrative discipline for violating 31 U.S.C. 1301. A U.S. government officer or
employee convicted of knowingly and willfully violating the ADA may face a criminal
penalty of being fined no more than $5,000, imprisoned for no more than two years or
2. Appropriations as to Time
The placing of time limits on the availability of appropriations is one of the primary
means of congressional control. By imposing a time limit, Congress reserves the
prerogative to periodically review a given program or agency's activities.
The life cycle of appropriations with fixed periods of availability consists of three
sequential phases: the unexpired phase, expired phase and cancelled phase. When an
appropriation is made available for a fixed period of time, the general rule is that the
period of availability relates to the authority to obligate funds from the appropriation. It
does not necessarily prohibit payments after the expiration date for obligations previously
incurred, unless the payment is otherwise expressly prohibited by statute. The availability
of appropriation balances to incur, adjust or pay obligations differs in each phase.
a. Unexpired Phase — During this phase, the appropriation may be used to incur new
obligations and to liquidate or pay properly incurred, existing obligations. Balances in
this phase do not expire and are not cancelled.
b. Expired Phase — The expired phase begins when the period to incur new obligations
against appropriations ends. For annual appropriations, this occurs at the end of the
FY for which the funds are appropriated. For multiyear appropriations, this occurs at
the end of the last FY for which the funds are appropriated.
“Upon expiration of a fixed appropriation, the obligated and unobligated balances
retain their fiscal year identity in an ‘expired account’ for that appropriation for an
additional five fiscal years. As a practical matter, agencies must maintain separate
obligated and unobligated balances within the expired account as part of their internal
financial management systems in order to insure compliance with the ADA.”
Principles of Federal Appropriations Law, p. 5-72.
The “expiration” period for the EPA’s fixed appropriations (i.e., EPM, Science and
Technology [S&T], Office of Inspector General [OIG]) is seven FYs from the
expiration of the obligational period as authorized in Pub. L. 106-377. During this
seven-year period, the potential for an ADA violation exists if identifiable obligations
chargeable to one of those seven years exceed the sum of the obligated balance for
that year plus the amount available for adjustment from the unobligated balance for
the same year. Should this happen, the excess can be liquidated only pursuant to a
supplemental or deficiency appropriation or other congressional action.
During the expired phase, no new obligations may be incurred against the
appropriations. Expired appropriation balances are available for the following:
i. Liquidation by payment or deobligation.
ii. Satisfaction of an unrecorded or under-recorded obligation properly chargeable to
the appropriation available for that particular year; they cannot be used to satisfy
an obligation chargeable to another appropriation or to any other year of the
c. Cancelled Phase — At the end of the expired phase, all obligated and unobligated
balances must be cancelled, and the account is closed. Any remaining unexpended
balances, both obligated and unobligated, are cancelled and returned to the general
fund of the Treasury (294); they are thereafter no longer available for any purpose.
Collections authorized or required to be credited to a cancelled appropriation that are
received after the account is closed must be deposited in the Treasury as
miscellaneous receipts. At the end of the seven-year period, the account is closed.
All audit requirements, limitations on obligations and reporting requirements applicable
to an appropriation in the unexpired phase continue to apply in the expired phase. Under
31 U.S.C. 1552(a) and 1553(a), time-limited appropriations remain available to liquidate
obligations for five FYs after the period of availability for obligation (the unexpired
phase) ends. However, the EPA requested and received statutory authority for the expired
phase to last for seven years after the period for which the appropriation was available for
new obligations (P.L. 106-377). This statutory authority applies to multi-year
appropriations beginning in FY 2001.
3. Bona Fide Needs Rule
One of the fundamental principles of appropriations law, the "bona fide needs rule directs
that an FY appropriation may be obligated only to meet a legitimate or bona fide need
arising in, or in some cases arising prior to but continuing to exist in, the time period for
which the appropriation was made. The statutory basis for the rule is 31 U.S.C. 1502(a)
which provides that the balance of a fixed-term appropriation ‘is available only for
payment of expenses properly incurred during the period of availability or to complete
contracts properly made within that period’... ”
A good example of the bona fide needs rule is when ordering supplies at the end of an
FY. An order or contract for stock replacement is viewed as meeting a bona fide need of
the year in which the contract is made if it is intended to replace stock used in that year,
even though the replacement items will not be used until the following year. Stock in this
context refers to readily available, common-use, standard items. There are limits,
however, as GAO has questioned the validity from the bona fide needs perspective of
purchasing materials carried in stock for more than a year before the issuance for use (see
GAO Decision B-134277, Dec 18, 1957).
The application of the bona fide needs rule to service contracts may raise complicated
legal issues relating to whether the service is “severable” or “non-severable.” Severable
services are those which are continuing and recurring in nature — such as window
washing services — while non-severable services are those that are characterized as a
single undertaking — such as conducting a study and preparing a final report. Non-
severable services may be charged to the appropriation current at the time that the
contract was made, even though performance carries over into a subsequent FY.
Statutory and regulatory changes (Federal Acquisition Streamlining Act of 1994, Section
1073, and Federal Acquisition Regulation 37.106) now permit agencies to enter into a
contract, exercise an option or issue a delivery order that obligates annual (one-year)
appropriations to acquire severable services that begin in one FY and end in the next. The
contract, option period or delivery order may not exceed 12 months. The EPA OGC has
said that these provisions also apply to acquisitions funded with multi-year
appropriations, such as the two-year appropriations provided to the EPA. This means, for
example, that the EPA may obligate FY 2013/2014 funding to fund 12-months’ severable
services that begin in FY 2014 and end in FY 2015.
The concept of severable versus non-severable services does not apply to grants and
cooperative agreements. Principles of Federal Appropriations Law, pp. 10-42 and 10-43.
This is because the bona fide need for a financial assistance transaction (original awards,
supplemental and incremental funding) arises in the FY in which the EPA decides to
support the public purpose that will be furthered by providing financial assistance.
Payments may be made to recipients of EPA grants and cooperative agreements from
funds obligated in prior FYs provided the appropriation account has not been cancelled.
Under extremely rare circumstances, expired funds could be used for obligation after the
availability period for obligation has expired. In these situations, funds managers should
consult and carefully coordinate with legal counsel, since there are distinct and
complicated rules for each EPA appropriation and funding source. What might be legal in
one instance may not be in a similar but slightly different instance. Below are some
The replacement contract concept is discussed in detail on pp. 5-28 through 5-33 of the
Principles of Federal Appropriations Law. Replacement contract rules may apply when
the EPA terminates a contract because of the contractor’s default during the expired
phase for funds that remain obligated for the contract. In this situation, these expired
funds may be used to engage another contractor to complete the unfinished work. The
rule has the implicit premise that the original contract validly obligated then current
funds. The rule is also based on the notion that the default termination does not eliminate
the bona fide need of the FY in which the original contract was executed.
In accordance with 31 U.S.C. 1502, amounts from the appropriation available at the time
the original contract was entered would remain available to fund costs properly
chargeable to that appropriation. Accordingly, the replacement contract seeks only to
meet the agency’s preexisting and continuing need, relying on the budget authority
obligated by the original contract. For funds to remain available beyond expiration for a
replacement contract, four conditions must be met:
a. The program office or region must obtain an opinion from the OGC stating that a
replacement contract must be issued in lieu of the original contract.
b. A bona fide need for the work, supplies or services must have existed when the
original contract was executed, and it must continue to exist up to the award of the
replacement contract. If a terminated contract is found to have been improperly made
to fulfill a need of an FY other than the year against which the obligation was
recorded, it would also be improper to charge that same appropriation for obligations
incidental to a replacement contract.
c. The replacement contract must not exceed the scope of the original contract. If it
does, it is a new obligation and must be charged to funds currently available for
obligation at the time that the recipient enters into the replacement contract.
d. The replacement contract must be awarded within a reasonable time after termination
of the original contract. Excessive delay raises the presumption that the original
contract was not intended to meet a then existing bona fide need. The same result may
follow if there is unwarranted delay in terminating the original contract.
Similar rules apply in situations in which a financial assistance recipient is unable to
complete a grant performance or cooperative agreement:
• The bona fide need for the grant project must continue.
• The purpose of the grant from the government’s standpoint must remain the same.
• The revised grant must have the same scope.
Principles of Federal Appropriations Law p. 10-107.
However, the EPA does not need to terminate the financial assistance agreement for
default. The agency and the recipient may reach a mutual agreement for another recipient
to complete performance, such as when a principal investigator for a research grant
moves to a different educational institution, and the original recipient intends to cease
operations or simply does not want to continue to perform the agreement.
4. Appropriations as to Amount — Appropriations are limited to the dollars (or amount)
appropriated. Therefore, restrictions related to amount are the third major element in the
legal availability of appropriations. It is not enough to know what you can spend
appropriated funds on and when you can spend them; you must also know how much you
have available for a particular activity.
While certain funding levels and limitations may be included in authorizing legislation,
appropriations legislation will generally control the disposition of an issue where the
appropriations act itself clearly demonstrates congressional intent to depart from funding
levels or limitations in the authorizing legislation. Nonetheless, the authorizing act and
appropriations act should be harmonized to the greatest extent possible. The authorizing
legislation and the appropriations go hand in hand to establish a mandate for
environmental action followed by the funds to carry out the mandate.
a. The ADA — The ADA is one of the major laws in the statutory pattern by which
Congress exercises its constitutional control of the public purse. It has been termed
the cornerstone of congressional efforts to limit the executive branch’s expenditure of
Briefly, in its current form, the ADA prohibits:
• Obligation or expenditure in excess of appropriations.
• Obligation or expenditure in advance of appropriations unless authorized by law.
• Accepting voluntary services for the United States exceeding that authorized by
• Obligation or expenditure in excess of apportionments or administrative divisions
The ADA is described in detail in Chapter 2, Section B, including reporting violations
and both civil and criminal penalties for violation.
b. “Administrative” vs. “Programmatic” — The concept of costs being either
“administrative” or “programmatic” is a functional distinction based on purpose. In
FY 1994, to implement restructured appropriations and control costs as either
administrative or programmatic, the agency revised its budget object and finance sub-
object classification codes to reflect this philosophy. In FY 1995, Congress directed
the agency to review the current budget structure and restructure accounts. In FY
1996, the agency’s budget structure eliminated congressional caps on administrative
In FY 2004, the EPA streamlined its budgetary and spending processes and
discontinued use of the “programmatic” vs. “administrative” distinction in its
Operating Plan and at the budget object class (BOC) code level. For financial
accounting purposes and to report spending to the Office of Management and Budget
(OMB), GAO, Congress, agency management, etc., the EPA continues to use
“administrative” or “programmatic” at the EPA sub-object code level, also known as
the financial object class (FOC) codes. The detailed nature of the FOCs is vital to
EPA operations. This financial information is used to support management decision-
making and to maximize resources to achieve program goals.
All agency personnel responsible for handling and reviewing budget and financial
information should ensure that BOCs and FOCs are correctly and consistently
applied. The EPA sub-object class codes and definitions are included in the Resource
Management Directive System (RMDS), Chapter 2590, and can be viewed online at
http://intranet.epa.gov/ocfo/policies/resource.htm. RMDS Chapter 2590 provides
additional information to help agency personnel ensure that BOCs and FOCs are used
c. Appropriations Charging — Split Funding with Multiple Appropriations
i. Procurements — The use of more than one appropriation on a single work
assignment, delivery order or project is known as split funding with multiple
appropriations. The EPA receives funding for contracts from several
appropriations and may fund a procurement from one or more of these
appropriations depending on the nature of the goods or services provided. The
agency requires that the Office of the Chief Financial Officer (OCFO) approve the
allocation methods when more than one appropriation is used as a funding source
on a procurement.
Split funding applies to all procurement transactions that use multiple
appropriations where costs are not directly allocable (and not just Superfund).
Funding allocation must be based on appropriation benefit, rather than which
account can “afford” the work. Stated another way, the appropriations cited on the
contract must benefit from the contractor’s work. The use of funds from one
appropriation because of the absence of funding in another violates basic
The following procedures are necessary to ensure full agency compliance with
legal requirements for split-funded procurements:
• Methodology — The OCFO must approve the contracting officer
representative’s (COR’s) rationale for allocating costs among appropriations
so that voucher payment can be processed accurately. Approval should be
obtained before the contract/task order deliverable is awarded.
The COR must document the rationale for using multiple appropriations and
include an estimate of the costs to be charged to each appropriation, as well as
the method for distributing the costs to the benefitting appropriations. All
program offices contributing funds to the procurement must indicate on the
rationale their concurrence with the estimate. The COR’s split funding
documentation rationale must be sent to OCFO for approval and also
maintained in the overall contract file.
Costs must be allocated based on a formula derived from the estimated
benefits to each appropriation. If each task, work assignment or delivery order
within the multi-funded contract will be funded from a single appropriation,
OCFO approval is not required. Project officers (POs) are encouraged to
structure tasks in this manner. The methodology used for “split funding” of
indistinguishable support costs should be applied consistently throughout the
fiscal year and not adjusted as a matter of convenience or to balance the usage
of funds from available appropriations.
The COR responsible for the contract must include a copy of the approved
rationale for using multiple appropriations with the purchase request (PR)
submitted to the contracts office.
• Voucher Payment — Whenever a procurement has multiple account funding,
the COR must provide the Research Triangle Park Finance Center (RTPFC)
with the appropriations (and amounts) on the invoice approval so that
payment vouchers are charged correctly. The finance office will charge
contract vouchers to the appropriate account number and document control
number (DCN) as specified by the methodology.
For more information on funding procurements with multiple appropriations,
see the EPA’s Contracts Management Manual (dated April 2004), Chapter 7,
Section 7.4, “Accounting for Appropriations in Contracts” at
• Approving Invoices — CORs must use the Electronic Approval System,
EASYLITE. EASYLITE allows CORs and their alternates to approve
invoices online. EASYLITE takes the place of the hard copy invoice approval
form, EPA Form 2550-19, which CORs previously received in pink
envelopes. Unless an exception is approved by the RTPFC, all CORs must use
EASYLITE to approve invoices.
OC/RTP receives the invoice for payment from the vendor. The OC/RTP
accounts payable technician scans the invoice into the Contract Payment
System (CPS). Once the data entry into the CPS is complete, EASYLITE
generates an email to the PO and contracting officer (CO) indicating that an
invoice is awaiting approval. EASYLITE is a Web-based program that allows
approval and payment of contract invoices. Approvals are updated from
EASYLITE to the CPS in real time, and payment information is transmitted
nightly from CPS to Compass. The PO approves the payment in EASYLITE.
EASYLITE reflects the contract, task order and invoice data; through a drop-
down menu, it shows the available lines of accounting for cost allocation. It is
up to the COR to allocate the invoice amount among the accounting lines and
to determine which DCN will be used for the particular invoice. When paying
invoices involving more than one appropriation, the COR must follow the
OC-approved split-funding methodology previously developed. EASYLITE
will not allow overpayment of invoices and provides only available lines of
accounting associated with a contract or task order.
ii. Grants/Cooperative Agreements — The EPA Office of Grants and Debarment
(OGD), with the assistance of opinions from the OGC, established its policy for
multiple appropriation (MA) grants in FY 2001. It states, “It is the EPA policy
generally to use only one appropriation as the funding source for an assistance
project. Where a project’s activities benefit more than one appropriation, the
agency should award separate grants for the activities falling within the scope of
each appropriation. However, a single MA grant may be awarded, with adequate
justification documented in the grant decision memorandum, and on an exception
basis, if all of a project’s activities are of a type that is fundable from all of the
supporting appropriations. Separate grants must be awarded if all of the
supporting appropriations are not legally available for all of the types of activities
to be performed. This is because of the procedural difficulties involved in
individually charging payments to the benefited appropriations. In awarding and
administering separate grants, the agency will work to minimize application,
accounting and reporting burdens on recipients.”
As part of the justification for an MA grant, the PO must include a description of
the methodology for charging payments in the decision memorandum that reflects
the proportional benefit to each appropriation. When developing their allocation
methodology, POs must use the guidelines issued by the Office of the Chief
Financial Officer (OCFO). A suggested sample allocation methodology
accompanying the decision memorandum could look like the following:
POs may contact their finance centers (FCs) or, where necessary, OGC or the
appropriate Office of Regional Counsel (ORC) if they need further guidance. The
Figure 7. Allocation methodology.
funding placed on the grant must be consistent with the allocation methodology.
The “Multiple Appropriations Awards Policy” can be found in its entirety at
Although split-funded grants and cooperative agreements are not reviewed by the
OC, allocation methodologies are subject to audit, and the funding organization
must establish a rationale internally.
• Allocation of Support Costs — The EPA’s operating costs are usually charged
directly to an appropriation through its account code structure. For example, a
Superfund employee's pay would be charged to a Superfund appropriation
account number (the employee's fixed account number).
However, many support services may benefit activities that are funded from
more than one appropriation, but the amount of support benefiting each
appropriation cannot be directly measured. As a result, there might be no way
to track and report which increments of time worked or what portion of a
purchased item supports which appropriation's activities.
Allocating time worked or other support costs among appropriations is an
acceptable method of charging costs. Program offices, which allocate costs,
must have a measure of benefit for allocating costs to an appropriation (that is,
the ratio of costs from one appropriation to the total costs, where the ratio
represents the proportion of service provided to the various recipients of that
The derived percentage(s) is multiplied against the total amount of support
costs (or total full-time equivalent personnel compensation and benefits costs
if allocating personnel costs) to be distributed. The calculated amounts are
then recorded against the respective appropriations. This plan must be adhered
to by all offices responsible for distributing support costs or needing to
allocate hours worked.
RMDS 2550D, Chapter 5, “Allocation of Personnel and Support Costs to the
Superfund Appropriation,” describes in further detail allocation
methodologies used to redistribute costs or layoff appropriations. Although
“Superfund” is specifically mentioned in the chapter title, the methodologies
described can be applied to any trust fund or appropriation. The methodology
used for “split funding” of indistinguishable support costs should be applied
consistently throughout the fiscal year and not adjusted as a matter of
convenience or to balance the usage of funds from available appropriations.
B. Tracking and Managing Funds
Users will click on the report of their choice and enter the appropriate selection criteria to
retrieve the data they requested. The Compass Data Warehouse (CDW) home page can be
accessed at http://ocfosystem1.epa.gov/neis/adw.welcome.
1. CDW and Concise Binary Object Representation (CBOR) Reports
a. Direct Access to the CDW — Direct access to the CDW Oracle database is available.
Users will need to provide their own reporting tool and must have an Oracle client set
up on their PC. Some reporting tools that are being used and known to work include
Lotus Approach, Cognos Impromptu, Business Objects and Microsoft Access, as well
as various Oracle reporting products. Any reporting tool capable of connecting to an
Oracle database or an open database connectivity data source should work.
b. Compass Business Objects Reports — In FY 2012, the OCFO discontinued its use of
the OCFO Reporting Business Intelligence Tool (ORBIT) and began using CBOR.
This Business Objects platform enables users to generate standard and ad hoc reports
to meet specific information needs (75 total reports). The CBOR reporting tool
represents a significant OCFO effort to bring financial information to day-to-day
decision-making across the agency.
An FCO’s signature on a document signifies that the FCO has personally reviewed the
document for accuracy, all accounting data is accurate and complete, the transaction has
been accepted in Compass, and the funds are available as to purpose, time, and amount. It
is the FCO’s responsibility to ensure that all of these actions have taken place before
forwarding the document to other agency officials. Other EPA officials rely on the FCO’s
signature to indicate that the funds will not be altered, revised or withdrawn prior to
obligation without advance notice or formal notification in writing.
This section will cover the essential items on funding documents that an FCO should review, and
common funding problems an FCO may encounter after committing the funds and how those
problems are resolved. Since an FCO’s realm of responsibility might vary depending on whether
they are located in HQ or the Regions, not all of these functions might actually be performed by
the FCO. However, in either location, the FCO is directly responsible for or subject to
coordinating with other personnel on the following activities:
2. Reviewing and Approving Funding Documents
A lack of attention to detail in properly reviewing a funding document could result in a
violation of the ADA, the Purpose Statute (31 U.S.C. 1301), or other appropriations laws.
Therefore, the FCO should ensure that the following information is correctly cited on the
document before committing the funds in Compass:
a. Correct Appropriation — Chapter 1, Section II, describes the different appropriations
used by the agency and their purpose. The FCO must ensure that the funds cited are
being used for the appropriate purpose. The FCO might also need to apply the "Pick
and Stick” rule to determine whether the document is funding something from one
appropriation that traditionally might have been funded from a different
appropriation. This rule was covered in Chapter 1, Section III.
b. Correct Account Number — See Chapter 4, Section I, for a description of the “Six-
Field Compass Account Code” and how to enter this information. FCOs must ensure
that the document cites the correct account number.
c. Correct Object Class Code — See Chapter 4, Section I, for a description. FCOs must
ensure that the document cites the correct sub