Understanding Obligation and Deobligation in Resou

Preview (3 of 10 Pages)

100%

Purchase to unlock

Understanding Obligation and Deobligation in Resou - Page 1 preview image

Loading page ...

Obligation vs DeobligationIt is important to remember that resources are finite, and because of this we must distinguishbetween "wants" and "needs".Obligationrefers to the legally binding setting aside of funds towards a requirement, such as goodsor services. For example, an obligation is created when travel orders are approved for a Soldierheading to a school. This obligation reserves their plane ticket, lodging, rental car, and otheranticipated expenses.Deobligationsare downward adjustments of previously incurred obligations. Using the previousexample, when the Soldier returns from the school, he or she files a voucher for the actual expensesoccurred. Iftheactual expenses are less than the original estimate from the travel orders,thenadeobligation needs to occur to ensure the excess funding is returned and is made available for theunitto spend towards another requirement.The Army operates under the mandate to use all available resources in the most effective andefficient means possible to support the combatant commander. Although not mutually exclusive,these two goals—effectiveness and efficiency, do not have the same meaning.*Effectiveness describes how well consumed resources achieve the desired outcomeorendstate or simply stated, "doing the right thing."*Efficiency speaks to the manner in which those resources are consumedin order toproduce the maximum amount of output regardless of whether the output achieves thedesired outcome—"doing things the right way."Obligation•A legal liability of the government for the payment of goods and services ordered or received,or a legal duty on the part of the United States that could mature into a legal liabilityby virtueof actions on the part ofthe otherparty beyondthecontrol oftheUnited States. Paymentmaybe made immediately or in the future. An agency incurs an obligation, for example,when it places an order, signs a contract, awards a grant, purchases a service, or takes otheractions that require the government to make payments to the publicorfrom one governmentaccount to another.Deobligation*An agency's cancellation or downward adjustment of previously incurred obligations.Deobligated funds may be reobligated within the period of availability of the appropriation.For example, annual appropriated funds may be reobligated in the fiscal year in which thefunds were appropriated, while multiyear or no-year appropriated funds may be reobligatedin the same or subsequent fiscal years.

Preview Mode

This document has 10 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

Texas Life and Health Insurance Exam 150 Questions

Budgeting for Life After High School

Ch 4 les 1

Understanding Credit Reports Analyzing John's Fina

Financial Statement Analysis

CEO pay at John Deere and Caterpillar

Financial Planning and Budget Analysis

Financial Research Report

WACC Project Verizon Communication Inc

Efficiency Test in US Stock Market

Company

Explore

Study Tools