Propriety of Certification of Voucher for Payment

An Army Corps of Engineers disbursing officer asked whether current supervision and administration (S&A) expenses associated with a Military Interdepartmental Procurement Request (MIPR) from the Air Force should be reimbursed from appropriations current when the costs were incurred, or from the appropriation obligated when the Army entered into a contract with a third party to execute the MIPR. Specifically, the S&A costs representing in-house charges which are properly charged against current appropriations were in question. When a MIPR is accepted by the Army, the Army enters into contracts with third parties to fulfill the requesting agency's needs. The Army supervises the particular procurement involved and the S&A costs are those associated with the Army's supervision of the contract. In this case, the army entered into a contract for the execution of the MIPR the day after it accepted the MIPR from the Air Force. It has been held that, in the absence of any other controlling statute, MIPR's will be considered as being issued under the authority of the Economy Act. When a transaction governed solely by the Act is recorded as an obligation against appropriations where the period of availability expires at a fixed time, the Act requires the deobligation of those appropriations when the period of availability for obligation expires, to the extent that the performing agency has not incurred valid obligations under the agreement. The allotment of funds by the Air Force to the Army does not constitute an obligation until the Army either enters into a contract with a third party to execute the MIPR or incurs costs in administering the contract. Accordingly, it was held that the S&A expenses should be paid from appropriations current at the time they arise.