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 6-14