SEQUESTRATION AND THE ANTIDEFICIENCY ACT

One of the possible consequences of sequestration is that there may well be a greater risk now of violations of the Antideficiency Act.  Unless the meat ax cuts are squarely and precisely made, some obligations and expenditures may be made which exceed the actual amounts obligated and committed to be expended. 

What is the Antideficiency Act?  That Act prohibits making or authorizing  an obligation or expenditure in excess of the amount available under any appropriation, apportionment, administrative subdivision of funds, allowance or allocation of funds unless authorized by law.  It also covers involving the government in any obligation to pay money before funds have been appropriated and it prohibits accepting voluntary services except in cases of emergency involving the safety of human life or the protection of property.  Finally, it prohibits making obligations or expenditures in excess  the amount permitted by agency regulations.

Federal employees who violate the Act can be disciplined administratively, suspended without pay or removed from office.  They may also be subject to criminal penalties and actually be sent to jail.  We are not aware of any public employee who has ever been sentenced to jail time for violation of the Act.

Agency heads are required to report violations to the President and to Congress.  OMB has issued further instructions which can be found in OMB Circular No. A-11 (2012).  That document describes violations as:  "obligations or expenditures in excess of the lower of the amount in the affected account, the amount apportioned, or any administrative subdivision of funds specified in your agency's fund control regulations as being subject to the Antideficiency Act."  It also explains that "obligations and expenditures that exceed allowance and allocations are violations of the Antideficiency Act."

(A friend of ours told the story of a contracting officer saying to the contractor, go ahead and perform the service, we cover it with next year's funding.  Yes, that's a violation.)

As if the job of the contracting officer were not already hard enough, our public servants must now be even more careful to see exactly where the meat ax falls in sequestration.  They must question carefully whether they are making obligations and expenditures which exceed funds which have been chopped off.  And, as Sean Stackley recently said, "We ask our acquisition folks and program managers to navigate the most complex, chaotic, over regulated and overseen process in the world."  And then we ask them to take a 20% pay cut.

bill@spriggslawgroup.com                                                 www.spriggslawgroup.com