Is there a section either under the ADS or the FAR which states that obligations under construction MUST BE FULLY FUNDED. Please help direct on this.
This is not stated in the FAR. However, it is law under 31 USC § 1341 - Limitations on expending and obligating amounts. This is known as the Antideficiency Act. The code is listed below. I think in your case you need to look at (a)1(A).
31 USC § 1341 - Limitations on expending and obligating amounts
(1) An officer or employee of the United States Government or of the District of Columbia government may not—
(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;
(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law;
(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or
(D) involve either government in a contract or obligation for the payment of money required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985.
(2) This subsection does not apply to a corporation getting amounts to make loans (except paid in capital amounts) without legal liability of the United States Government.
(b) An article to be used by an executive department in the District of Columbia that could be bought out of an appropriation made to a regular contingent fund of the department may not be bought out of another amount available for obligation.