In the event the total budget is approved in an
amount other than that requested, the activity must
revise its annual plan to agree with the approved amount.
The revision is based upon guidance furnished by the
approving authority. If directed, a copy of the updated
plan, in the same format as the original budget
submission, must be furnished to the approving
authority.
Upon completion of the revised plan, the
commanding officer may issue to departments of the
activity authority to use certain resources. Those
resources would be within amounts available and within
all limitations placed upon the commanding officer's
budget.
LIMITATIONS OF OPERATING BUDGETS
Section 3679(g) of the Revised Statutes, as
amended, provides that all agencies of the government
receiving appropriations of public funds must establish
administrative regulations. The regulations prevent the
agencies from taking any action that would require an
obligation or expenditure in excess of an appropriation,
apportionment, reapportionment, or subdivision.
Pursuant to this requirement, the Department of
Defense (DOD) issued regulations titled Administrative
Control of Appropriations Within the Department of
Defense. Its contents are included in the Navy
Comptroller Manual (also issued as DOD Instruction
7200.1). Commanding officers must ensure all affected
subordinates are made aware of the penalty provisions
of this statute. They must also make sure affected
subordinates are made aware of all current Navy
Department directives pertaining to the administration
of funds.
An activity’s operating budget has the following
specific limitations:
Total Direct Expense–The total direct expense
authority is an administrative limitation on a cumulative
basis. It is not subject to Section 3679 R. S., nor is it an
“expense over-run” to be considered an administrative
violation requiring a violation report. In the event
expenses exceed total expense authority, a letter or
dispatch report to the grantor of the operating budget is
required instead of a violation report.
Total Operating Budget–The total amount of the
direct operating budget is also an administrative
limitation on a cumulative basis. It is not subject to
Section 3679 R.S. The reporting requirements described
above apply also to the total OB.
New Obligational Authority-New obligational
authority financed by the current year operation and
maintenance appropriation is a legal limitation on a
cumulative basis. It is subject to Section 3679 R.S.
penalties.
To the extent that an activity accepts reimbursable
orders, its expense authority, direct operating budget,
and new obligational authority increase automatically.
Accepted reimbursable orders represent anticipated
payments for work/services provided to others.
LOCAL BUDGET RESPONSIBILITIES
In carrying out an activity’s mission, the CO is
responsible for program accomplishment and for the
administration of appropriated funds. The CO is
responsible for all other financial matters at the activity,
including the following:
Determining resource requirements
Ensuring effective, efficient use of resources
Ensuring the use of funds is within all legal,
administrative, and regulatory restrictions
Controlling obligations (unfilled orders meeting
the criteria of obligations) and expenditures
The CO may not delegate financial responsibility to
a subordinate. The CO is assisted by heads of operating
departments and the comptroller’s staff.
Enforcement of the budget falls principally upon the
heads of departments since the responsibility for
achieving planned results is usually theirs. COs may
exercise considerable latitude and discretionary
authority in delegating responsibility in this area.
The heads of departments are responsible to the CO
for compliance with the laws and regulations governing
the use of appropriated funds.
The comptroller (budget administrator) is
responsible for those functions related to an integrated
system of financial management. They include
budgeting, accounting and related disbursing, program
analysis, progress reports and statistics, and internal
review. Under the CO, the comptroller is responsible for
strict compliance with the account-keeping procedures,
financial control practices, and reporting prescribed by
competent authority. One of the staff’s major
contributions to management is in the areas of statistical
analysis and interpretation of variances. Because of the
command channel funding concept, the operating
budget now permits greater flexibility than was
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