LEARNING OBJECTIVE: Recognize how appropriations and operating budgets are conducted.

An appropriation is referred to in the NAVCOMPT Manual as ". . . [an authorization] by an act of Congress to incur obligations for specified purposes and to make payments therefor out of the Treasury." The Navy uses appropriations received to pay for the construction of new ships, to fund the cost of operations and maintenance for the existing fleet, and to pay for training, personnel pay, and to operate shore establishments that support the fleet.

TYPES OF APPROPRIATIONS
Three types of appropriations are used by the Navy, depending upon the purpose for which the appropriation is issued. Most appropriations are for one fiscal year (FY). The FYruns from 01 October of a year to 30 September of the following year. The federal government uses this time period for budgeting normal operating costs of the armed services, including the Navy. Other types of appropriations may be granted without a time limitation or for a specific time that may exceed 1 year.

Annual Appropriations
Annual appropriations are provided for active and reserve military personnel expenses, as well as for operation and maintenance expenses. The appropriations become available for obligation and expenditure at the beginning of the fiscal year designated in the Appropriations Act. Obligations may be incurred only during this designated fiscal year; however, the obligated funds remain available for the payment of such obligations for an additional 5 years. At the end of the additional 5-year period, fund distribution differs, depending on the purpose of the appropriation.

Continuing Appropriations
A continuing appropriation, also referred to as a no-year appropriation, is one that is available for incurring obligations until the funding is exhausted or until the purpose for which it was made is accomplished without a fixed-period restriction. Examples of continuing appropriations are Military Construction Navy (construction projects that are planned up to 5 years ahead) and revolving funds such as the Defense Business Operating Funds (DBOF) (a projection of the predicted cost to operate the Navy).

Continuing appropriations become available for obligation and expenditure at the beginning of the FY following the passage of the Appropriations Act or may become immediately available when so specified in the Act. When the purpose of a continuing appropriation has been accomplished administratively or by Congress, DoD transfers an amount equal to the total of unliquidated obligations, less the total of reimbursements to be collected, to the surplus of the Treasury.

Multiple-Year Appropriations
Generally, multiple-year appropriations are made for appropriations that require a long lead time for planning and execution, such as procurement of aircraft, missiles, and ships. Multiple-year appropriations become available for obligation and expenditure at the beginning of the fiscal year (1 October) designated in the appropriation, unless otherwise stated in the Act. They are available for incurring obligations only during the FYs specified in the Act. However, they are available for paying such obligations for an additional 5 years.

At the end of the last FY included in the appropriation, when the appropriation expires for obligation purposes, the balance is transferred to the Treasury.

OPERATING BUDGETS
The operating budget is the annual budget of an activity and is assigned by the Chief of Naval Operations (CNO), Fiscal Management Division, to major claimants. A major claimant is an office, command, or Headquarters Marine Corps. The claimant is designated as the administering office under the operation and maintenance appropriation. Holders of operating budgets have the option of granting a degree of financial responsibility to subordinates by issuing operating targets (OPTARs). OPTARs are generally apportioned in four equal quarterly divisions that represent the maximum amount that can be spent for each quarter of the FY. By using this system, facilities are able to manage and effectively control the expenditure of funds. This system prevents overexpenditure of funds early in the fiscal year and helps prevent financial problems at the end of the year. Unused quarterly funds may be carried over to the next quarter simply by adding them to the new quarterly apportionment. At the end of the fourth quarter, all accounts are balanced and closed; new expenditures are not authorized until appropriated funds are made available for the new fiscal year.

Funds allotted to the medical department to purchase needed items are called the operating target (OPTAR). Medical OPTARfunds are the funds used to fulfill the following five major requirements:

Authorized Medical Allowance List (AMAL). The AMAL is the minimum amount of medical material to be maintained on board a ship or on order at any given time. The amount of material as noted in an AMALis designated by BUMED for each class of ship and is based on past experience. Recommendations for changes to the AMAL should be forwarded through the chain of command to BUMED.

Authorized Dental Allowance List (ADAL). The ADAL is the minimum amount of dental material to be maintained on board a ship or on order at any given time. The amount of material as noted in an ADAL is designated by BUMED for each class of ship and is based on past experience. Recommendations for changes to the ADAL should be forwarded through the chain of command to BUMED.

Type Commander's (TYCOM) Require-ments. To supplement the AMAL, TYCOMs may have additional requirements to maintain units in a high state of readiness and allow units to be self-supporting in an emergency, such as a natural disaster or humanitarian mission. TYCOM requirements for medical considera- tions relate to such items as gun bags, airways, litters, and battle dressing supplies.

Special Mission Usage. These missions include but are not limited to humanitarian, civilian rescue, and drug interdiction operations.
Administrative Requirements. The purchase of consumable or medical OPTAR restricted items may be made from the medical OPTAR with the approval of the executive officer. Medical books and publications listed in NAVMEDCOMINST 6820.1 may also be purchased with this OPTAR.