FINANCIAL MANAGEMENT POLICY MANUAL

intention that they be considered as separate subdivisions of funds and
are therefore exempt from the consequences of legal limitations.
(1) Legal.
Constraints to which the statutory limitations of 31 U.S. Code 1512
apply carry firm dollar limitations established by either program
categories, cumulative quarterly limitations by program category
or budget activity, or other limitations on items of interest to
Congress or some command or management level. These
substantive limitations, which restrict the availability of fund
authorizations (passed to a subordinate level limiting authority to
incur obligations or make expenditures), may not be levied unless
they are extensions of identical restrictions imposed by the
preceding funding authority or have the documented approval of
that authority.
(2) Other.
Restrictions not subject to legal limitations are stated in terms of
advisory guides to the recipients, allowing options or an amount of
flexibility (usually as stated percentage of an initial amount) in the
use of funding. Restrictions of this nature may be imposed on a
subordinate level without the authorization of a higher funding
level. However, the use of such restrictions should be limited to
situations where normal management type reporting cannot
accomplish the desired control of expenses. It is important to note
that the basic tenet of the RMS financial management systems is
that fencing restrictions be kept at a minimum necessary to adhere
to statutory or other regulatory requirements. Authorizations to
which these restrictions are applied usually require the
recipient/holder to report to grantors any anticipated variances or
need for adjustments in such constraints. Requests for the desired
modifications or adjustments usually are submitted via a plan that
would permit them to be accomplished within current
availabilities.
7. REIMBURSEMENTS.
Reimbursements are the amounts received or to be received by an agency
or activity for the cost of material, work, or services furnished or to be
furnished to others for credit to an appropriation or other fund account or
subdivision thereof. For all appropriations in which a reimbursable
program is administered, the allocation includes amounts for anticipated
reimbursements, exclusive of work and service reimbursable orders which
are subject to automatic apportionment and therefore provide an automatic
Financial Management Policy
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