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  • Question

    If you need to use FY22 funding for a training contract that needs to take place in Oct of FY23 but you will not have FY23 funding in time, and if the contract is not executed in advance you can lose the training date which will cause an issue with the training requirements for deployment, can you use FY22 Funding and if you can what is required to allow this?


    Answer

    Professor called the submitter to get more information and this answer takes into consideration the additional point raised during the discussion. 

    Since the vendor requires payment in advance of training and you are unable to make the payment with FY23 funding due to the timing of the training in mid-October it is legal to fund itwith FY22 funding.  A good question to ask to determine which FY funding should be used -- could this FY23 training requirement reasonably be funded with FY23 funding?  The answer is NO.  The lead time from contract award to training delivery that is required by the vendor, and outside the control of the  government will not allow it to be paid with FY23 funding.

    Financial Management Regulations Volume 3 Chapter

    Training Contracts. 3.4.2.3.1. Single Training Courses Not Covered by Statute. Unless covered by statute, training contracts for single training courses are considered a single undertaking (entire). Record the obligation at the time the contract is executed for the full amount of the contract. In general, the training represents a single undertaking where benefit of the training is received when the employee has completed the training in full. Training contracts must be obligated in full within the fiscal year that funding is current at the time the contract is executed even though the course extends into the next fiscal year. Training courses that begin on or after October 1 may constitute a bona fide need of the prior year if the need for training is an immediate need in the prior year and if the commencement of the course in the next fiscal year is beyond the agency’s control. The time between award of the contract for the training and performance of the training should not be excessive.

    We also discussed Bona Fide Need.  The general rule:  Services are the bona fide need of the fiscal year in which we receive them The issue of Severable versus Non severable comes into consideration.

    Severable:  Severable contracts can be separated into components that independently meet a separate need of the government  10 U.S.C. § 2410a allows funding a severable service contract beginning in one fiscal year and ending in the next fiscal year if the contract period does not exceed 12 months

    Non severable:  Services that, by their nature, cannot be separated for performance in separate fiscal years.  The training effort is a discrete effort with an end product (delivery of training).  There is no benefit to the government until the training is delivered. Funds are obligated for the total amount of the contract in the year the contract is awarded. In your case, the vendor requirement for payment precludes you from making the payment with FY23 funding.

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