text: Chapter 2
  formal subdivision of funds could result in a violation of the Anti-Deficiency Act (see paragraph 2.43 of
  the Anti-Deficiency Act).
  KEY TERMS/CONCEPTS
  2-30. Financial managers at all levels should be familiar with the following key terms and concepts as they
  are commonplace in the lexicon of financial management and fiscal law. For a more extensive listing of
  key terms, refer to DOD Financial Management Regulation (DODFMR) Vol. 2, chapter 1.
  2-31. Appropriations Act. An appropriations act is the most common form of budget authority. The term
  “appropriation” refers to the authority given to federal agencies to incur obligations and to make payments
  from the U.S. Treasury for specified purposes. Appropriations do not represent cash actually set aside in the
  Treasury. They represent legal authority granted by Congress to incur obligations and to make
  disbursements for the purposes, during the time periods, and up to the amount limitations specified in the
  appropriation acts. The Army receives its funds primarily from two annual appropriations acts: the
  Department of Defense Appropriation Act (for Military Personnel; Operation and Maintenance (OMA);
  Procurement; Research, Development, Test, and Evaluation (RDT&E) Appropriations; and the Military
  Construction Appropriation Act (for Military Construction and Family Housing Appropriations).
  2-32. Authorization Act. An authorization act is a statute authorizing the appropriation of funds for
  programs and activities. An authorization act does not provide budget authority. That authority stems from
  the appropriations act. Therefore, before an agency can expend public funds for a particular program or
  activity, the program or activity must receive funding in the form of an appropriation contained in an
  appropriations act. Annual authorization acts typically precede DOD’s appropriations acts. Authorization
  acts frequently contain restrictions or limitations on the obligation of appropriated funds. The authorization
  act may clarify the intended purposes of a specific appropriation or contain restrictions on the use of the
  appropriated funds.
  2-33. Budget Authority. Budget authority is the authority provided by law to incur financial obligations
  that will result in outlays. Entering into contracts, issuance of purchase orders, hiring employees, or
  otherwise obligating the Government to make a payment before a law has provided budget authority for
  that purpose violates the law and carries with the violation significant sanctions. Budget authority is
  typically provided in the form of appropriations; however, budget authority can be provided through some
  laws in the form of contract authority, authority to borrow, or spending authority from offsetting
  collections. In most cases, an appropriations act makes budget authority available beginning on October 1
  of the fiscal year for which the appropriation act is passed.
  2-34. Continuing Resolution (CR) is an interim legislation enacted by Congress to provide authority to
  specific, ongoing activities when the normal fiscal year appropriation has not been enacted by the
  beginning of the fiscal year, pending the annual appropriation enactment by Congress. It authorizes
  continuation of normal operations at a rate not to exceed the latest Congressional action or the previous
  year’s rate. It does not authorize new starts or expansions to a program. A funding gap may occur in the
  absence of either an appropriations act or a CR, or when the President vetoes a duly passed appropriations
  bill or continuing resolution following expiration of either of their predecessors. The Attorney General has
  determined that, absent an appropriation or a CR, executive agencies must take immediate steps to cease
  normal operations. Disbursements supporting new fiscal year obligations may not be made during a
  funding gap unless specifically authorized by the Under Secretary of Defense (Comptroller) (USD[C]).
  The following excerpt from Defense Finance and Accounting Service-Indianapolis (DFAS-IN)
  Reg. 37-1 provides additional information on CR:
  Definition: A CR is an interim appropriation, enacted to provide authority for specific ongoing
  activities in the event that regular appropriations have not been enacted by the beginning of the
  fiscal year or the expiration of the previous CR. A CR has a fixed life and provides the authority
  necessary to allow operations to continue in the absence of appropriations.
  Operations under a CR. Unless the Office of the Secretary of Defense (OSD) issues other
  instructions, a CR provides for the following: