Appropriated Funds Vs Non-Appropriated Funds - FederalPay.org

Appropriated Funds

Within the federal government Appropriated Funds refer to moneys allocated by legislation passed by Congress and signed by the President. Appropriated Funds are usually specified in Congress’s yearly budget or continuing resolution. However, funds can be allocated in any bill passed by Congress. This money comes primarily from Federal Income Tax and other federal taxes. Appropriated Funds may only be used for the purpose they have been appropriated for. Agencies can incur penalties and employees can face legal charges for misappropriating funds.

Non-Appropriated Funds

Non-Appropriated Funds refer to revenue earned by government departments, organizations or agencies by means other than taxation. For instance, the State Department charges for passports and then uses the earnings for other purposes. These funds are known as non-appropriated. Many government entities earn revenue and use those non-appropriated funds to pay for employee salaries and other expenses that are not explicitly authorized in Congress’s Budget. There is more leeway regarding how Non-Appropriated funds can be used.

For example, the Moral, Welfare and Recreation (MWR) within the Army is funded with Non-Appropriated Funds. There is an MWR on most Army bases. This entity focuses on providing military and civilian personnel with access to recreational and community activities.

Taxation accounts for the majority of revenue taken in by the Federal Government. All General Schedule (GS), Senior Executive Service (SES) Schedule, and Law Enforcement Officer (LEO) Schedule jobs are paid using Appropriated Funds. Most Federal Wage System (FWS) jobs are also paid using Appropriated Funds as well.

The Federal Wage System (FWS) is broken into different sections for Appropriated and Non-Appropriated Funds. Within the FWS Schedule jobs are identified as AF for Appropriated Funds or NAF for Non-Appropriated Funds. Pay for NAF jobs is typically lower than that of AF jobs. Each fund type receives slightly different benefits. While all FWS jobs are paid hourly, NAF employees are more likely to work fewer than 40 hours per week.

Postal Service

One of the biggest earners of non-appropriated funds within the federal government is the U.S. Postal Service. USPS is completely funded and run using non-appropriated funds generated from the sale of postage and related goods and services. The postal service uses a different pay system than the Federal Wage System (FWS) to pay its employees. USPS’s unique pay system was created before the FWS system was established.

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