We have a couple of employees whom were paid with OMA funds prior to coming to our agency which is paid with RDT&E funds. Their old supervisor put them in for awards before they left however the awards didn't hit until they were in their new positions. We would like to cost transfer these awards off of our books and back onto their old agency's. However, we had some questions come up over legality and other issues in regards to cost transferring from RDT&E to OMA. Is this cost transfer allowable?
When I first reviewed the question, my initial reaction was to have the same questions that you probably had regarding the legality of transferring these costs. I was completely prepared to tell you that since these employees are currently funded from RDT&E, you are stuck with the bill for their monetary awards that were generated from their activities in a previously OMA funded organization. As should ALWAYS be done, I started to research the applicable DoD regulations and policies on the subject. I was looking for the definitive proof that this type of cost transfer is not allowed. However, to my surprise, I found that that is NOT the case. In fact, not only is this type of cost transfer allowed, but it is my sense from doing the research that it is actually required.
Open full Question Details
As always when I have a funding or appropriation question (i.e. “color of money), I start by looking in the DoD Financial Management Regulation (FMR) 7000.14-R. Within that Instruction, Volume 8 deals with Civilian Pay Policy. So, that seemed like a good place to begin my search. Chapter 3 of Volume 8 of the FMR discusses Pay Administration, so I dove into it looking for answers. I have to say that I was sorely disappointed.
I discovered a nugget in Paragraph 030302, Section E.8.a. which talks about Payment for Unused Compensatory Time. While discussing transferred employees it says, “…The losing Component must pay for any unused compensatory time balances…” This was the first hint that my original thoughts on your situation may be incorrect. However, since Unused Compensatory Time is clearly not the same as a Monetary Award, I continued my quest for definitive proof regarding the cost transfer that your organization is dealing with.
As I proceeded further in FMR Volume 8, Chapter 3, I came upon Section 0311 which specifically deals with Awards. I felt certain that this time I had stumbled upon the motherlode of detailed information. Again, my hopes were to be dashed. Do not get me wrong, I found some useful tidbits but not the definitive answer that I was seeking. Paragraph 031102 A. says, “The award is paid to employees in the same manner as their net pay.” This deals with how the employee gets paid, not what appropriation that they get paid from. Within DoD, there are any number of employees who are paid from multiple appropriations during any given pay period. It all depends on what projects they worked on during the period. It is entirely possible that they worked on an OMA, a RDT&E and a Procurement project at different times during the pay period. It is completely transparent to the employee, all they see is the amount of “green” that goes into their bank account.
However, I did get a glimmer of hope from Paragraph 031101. There it says that Title 5 U.S.C. Chapter 45 is the legal basis for the government wide incentive awards program for civilian employees. It continues on to say that Department of Defense Instruction (DoDI) 1400.25, subchapter 451 prescribes awards policies governing the award program for DoD civilian employees. So, that is where I went next on my quest for an answer.
Upon searching through DoDI 1400.25, subchapter 451, I found Enclosure 3 which discusses Procedures for awards. Within that treasure trove of detailed information, I found the answer to the question that I had been so desperately seeking. Section 4.a.(3). states, “A monetary award to, and the expense for the honorary recognition of, an employee may be paid from the fund or appropriation available to the activity or activities primarily benefiting from the employee’s contribution.” Section 4.b. is even more specific to your particular scenario. It states, Awards to Other Agency or DoD Component Personnel. For awards approved for employees of other federal agencies or other DoD Components, the DoD Components that benefit makes arrangements to transfer funds to the individual’s employing DoD Component or federal agency. If the administrative costs of transferring funds would exceed the amount of the award, the DoD Component employing the individual absorbs the costs and pays the award. It seems certain that this is the answer I was looking for. The organization that benefitted from the employees’ actions for which the award is being given should bear the financial burden of that award from whatever appropriation they have available.
I do have to let you know that when I looked at Title 5 Code of Federal Regulations (CFR) § 451.103-106, it did not provide any more detail to what I had just found in DoDI 1400.25-V451.
Summary: In my professional opinion, DoDI 1400.25-V451, Enclosure 3, Sections 4.a.(3)., and 4.b. make it clear that the type of cost transfer for employee monetary awards from RDT&E from your organization to OMA from the employees’ previous organization that you are considering are not only allowed, but may actually be required (as long as, the administrative costs of transferring funds would not exceed the amount of the award).
Suggestions: First, I would suggest that you read the source documents that pertain to your situation. Read DoD Financial Management Regulation 7000.14-R, Volume 8, Chapter 3, Department of Defense Instruction (DoDI) 1400.25, subchapter 451 (paying particular attention to Enclosure 3, “Procedures”), and Title 5 Code of Federal Regulations (CFR) § 451.103-106. Secondly, it is most strongly recommended that you contact your local comptroller organization, Civilian Pay Administrators and legal counsel for more information and their policy interpretation of this issue.