How can appropriations be used?

The following question was asked by a government program manager: I recently started a new assignment that requires me to meet with many corporate and international government representatives, both domestically and overseas. Most of the people I meet expect us to exchange business cards as a normal professional courtesy. However, my office says that it cannot provide employees with business cards because they are considered to be a personal expense. Is this accurate? If so, what is the reason?

Under what is known as the "necessary-expense doctrine," a federal agency may use appropriated funds for any expenses that are reasonably related to the accomplishment of the purposes stated in the appropriation. In general, agencies enjoy considerable discretion in deciding which costs are necessary.

Outside the Scope

However, in a number of formal opinions, the General Accounting Office has limited the scope of agency discretion. Unfortunately for government employees and those who do business with them, the cost of business cards is one type of expense that GAO has ruled to be outside the scope of most normal appropriations.

It is a primary tenet of fiscal law that a federal agency may obligate funds only as provided by congressional appropriation.

This fundamental rule is embodied in no less an authority than the Constitution. Congress has therefore established a detailed set of statutory rules governing the ways in which agencies may spend appropriated funds.

Within the limitations stated in a particular appropriation, an agency has considerable discretion in deciding how to accomplish the stated purposes and may incur any expenses found reasonably necessary.

As a corollary to the necessary-expense doctrine, an agency may not use appropriated funds for expenditures that are personal in nature, unless specifically authorized.

Few would disagree with this proposition. However, the application of this general rule is not always intuitive. The issue of business cards is a particularly stark example of how the rule can be applied to prohibit expenditures that most people would call reasonable business expenses.

As early as 1913, the comptroller of the Treasury ruled that business cards were more of a personal convenience than a business necessity.

Accordingly, such cards could not be purchased with appropriated funds. Although the ways in which business is conducted may have changed since 1913, GAO's views have not. With the current emphasis on modeling all sorts of government activities more on commercial enterprises, hopefully GAO will be more willing to rethink this issue.


Peckinpaugh is a member of the government contracts section of the law firm of Winston & Strawn, Washington, D.C. Readers are encouraged to submit topics by e-mail to or by voice-mail to (703) 876-5151, extension 2965. His column can be read on FCW's home page at


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