Policy on Funds Control in the Water Resources Division In Reply Refer To: Mail Stop 442 May 1, 1996 MEMORANDUM To: Regional Hydrologist, Western Region From: Catherine L. Hill Assistant Chief Hydrologist for Operations Subject: Policy on Funds Control in the Water Resources Division Your memorandum, dated March 1, 1996 (copy attached), requested policy guidance on the implementation of funds control in the Water Resources Division (WRD). As the answers to your questions have broad implications across the division, I have taken the liberty of copying this response to the WRD Senior Staff, all District Chiefs, Branch Chiefs, and Administrative Officers. We plan to incorporate this information in a future WRD memorandum. Your request asks the following questions either explicitly or by implication. Each question is followed by the present division policy. o The Anti-Deficiency Act states that it is a violation for any officer or employee of the United States to create an obligation or make an expenditure in excess of their funds. At what level does this violation take effect? A violation of the Anti-Deficiency Act must be reported when an allotment of funds has been exceeded. In the USGS, allotments are made to the divisions. Thus, a violation must be reported when a division exceeds its allotment or funding availability in any "open" fiscal year. Thus, it is the division chief who is ultimately responsible for compliance with this act. In practice, if a division exceeded their allotment, the bureau would seek to shift available funds from another division to avoid the reporting of a violation, thereby reporting a violation only when all USGS funds for a given fiscal year had been exhausted. o At what level are spending controls enforced? Spending controls are enforced at the division level. Although we suballocate funding to our cost centers, these suballocations are never recorded officially in the Federal Financial System. [A cost center is defined as a district office (subdistricts in a few cases), or a branch office such as Yucca Mountain Project, the Hydrologic Instrumentation Facility, and Regional Research.] Even though spending controls are held at the division level, WRD management holds its cost center managers accountable for the effective management of resources, to the best of their abilities. We count on them not to spend more funds than they have available to them. o What is required of our District Chiefs or other cost center managers when they suspect that they will not be able to close their cost center without spending more funds than they have available? We expect our managers to take every action necessary to prevent this situation. These actions include deferring expenses, limiting discretionary spending, and working with the Regional Hydrologists or Senior Staff members to move employees to other cost centers when necessary. When all of these actions have been taken and a cost center is still not able to close in the "black," the Senior Staff member should notify the Assistant Chief Hydrologist for Operations (ACH/O). The ACH/O will work with the Senior Staff member and cost center chief to take the appropriate action to remedy the situation. Only in very rare circumstances will a cost center be permitted to close with a deficit, and that decision can only be made by the Chief Hydrologist. This decision will be made contingent upon available funds elsewhere in the division to cover or fund the deficit. o Does a District Chief or cost center manager have the authority to develop a plan to furlough employees to bring the deficit under control? Although we have had cost centers who were unable to close their books in the black, we have always dealt with this at the division level and have not had to furlough. The cost center chief has the responsibility to take every action possible within their purview to balance their books, including working with their Regional Hydrologist and seeking assistance from other cost centers. If all efforts to solve problems at the cost center level fail, and it becomes apparent that a deficit situation is likely, it becomes the cost-center chief's obligation to let senior management know. That Senior Staff member immediately informs the ACH/O, and it becomes a division responsibility. The ACH/O will review the total funding situation for the division so that contingencies can be developed divisionwide. In the unlikely event that many cost centers were in serious financial trouble, and we had to consider furloughs, it would be done at the division rather than cost-center level. Copy to: Senior Staff Branch Chiefs District Chiefs Administrative Officers Attachment Attachment 1 Water Resources Division Western Region 345 Middlefield Road, Mail Stop 470 Menlo Park, California 94025 March 1, 1996 To: Assistant Chief Hydrologist for Operations From: T. J. Conomos Regional Hydrologist Subject: Bureau Policy--Anti-Deficiency Act The purpose of this memorandum is to request information on division and bureau policy related to the Anti-Deficiency Act, and its applicability at the cost-center level. In August 1995 we received a draft policy on the U.S. Geological Survey Administrative Control of Funds outlining Bureau Responsibilities and Delegations of Authority for different types of funds. The draft indicates that it is a violation of the Anti-Deficiency Act for any officer or employee of the United States to create an obligation or make an expenditure in excess of their funds. What we do not have is clear policy on the options to consider or the procedures to implement when a district or office chief knows early in the fiscal year that there is not enough funding in the cost center to cover the salaries, rent, and other fixed costs. For example, does a district chief have the authority to develop a plan to furlough employees 1 day per week for a specified time frame to bring a deficit under control? If so, would the approving level be the region, headquarters, or bureau? In the view of the Water Resources Division, is this an appropriate action to be contemplating at the district level? We are planning a Western Region management meeting in May, and would like to include a training session for the district chiefs that would include budget monitoring, legal aspects of the Anti-Deficiency Act, and bureau/division procedures for implementing a furlough at the district level. We would appreciate any information you can provide that will assist us in making this training effort a success.