§ 2783. Nonappropriated fund instrumentalities: financial management and use of nonappropriated funds

• (a) The Secretary of Defense shall prescribe regulations governing—
  • (1) the purposes for which nonappropriated funds of a nonappropriated fund instrumentality of the United States within the Department of Defense may be expended; and
  • (2) the financial management of such funds to prevent waste, loss, or unauthorized use.
• (b)
  • (1) A civilian employee of the Department of Defense who is paid from nonappropriated funds and who commits a substantial violation of the regulations prescribed under subsection (a) shall be subject to the same penalties as are provided by law for misuse of appropriations by a civilian employee of the Department of Defense paid from appropriated funds. The Secretary of Defense shall prescribe regulations to carry out this paragraph.
  • (2) The Secretary shall provide in regulations that a violation of the regulations prescribed under subsection (a) by a person subject to chapter 47 of this title (the Uniform Code of Military Justice) is punishable as a violation of section 892 of this title (article 92 of the Uniform Code of Military Justice).
• (c)
  • (1) A civilian employee of the Department of Defense (whether paid from nonappropriated funds or from appropriated funds), and a member of the armed forces, whose duties include the obligation of nonappropriated funds, shall notify the Secretary of Defense of information which the person reasonably believes evidences—
    • (A) a violation by another person of any law, rule, or regulation regarding the management of such funds; or
    • (B) other mismanagement or gross waste of such funds.
  • (2) The Secretary of Defense shall designate civilian employees of the Department of Defense or members of the armed forces to receive a notification described in paragraph (1) and ensure the prompt investigation of the validity of information provided in the notification.
  • (3) The Secretary shall prescribe regulations to protect the confidentiality of a person making a notification under paragraph (1).