Cyclopedia
Expired Account
Summary
An expired account has is the same as any Treasury account with the vital distinction that the amounts represented in have reached the time period after which they are no longer available for obligation. The amounts remain in the account for a period of five years, since they remain available for reobligation or repurposing. Both of these are “scoreable events” which means that any action to use the expired budget authority in the account will be viewed as tantamount to appropriating new budget authority, and charged under the appropriate scorekeeping rules.
GAO Glossary of Terms and Definition (September 2005)
Expired Account
An account within the Department of the Treasury to hold expired budget authority. The expired budget authority retains its fiscal year (or multiyear) identity for an additional 5 fiscal years. After the 5-year period has elapsed, all obligated and unobligated balances are canceled, the expired account is closed, and all remaining funds are returned to the general fund of the Treasury and are thereafter no longer available for any purpose. (See Expired Budget Authority under Availability for New Obligations under Budget Authority.)
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GAO Principles of Appropriations Law, Vol. I (September 2005)
3. Expired Appropriation Accounts
The current account closing procedures are set forth in 31 U.S.C. §§ 1551– 1558. [49]
Two of the key provisions provide: “On September 30th of the 5th fiscal year after the period of availability for obligation of a fixed appropriation account ends, the account shall be closed and any remaining balance (whether obligated or unobligated) in the account shall be canceled and thereafter shall not be available for obligation or expenditure for any purpose.”
“After the end of the period of availability for obligation of a fixed appropriation account and before the closing of that account under section 1552(a) of this title, the account shall retain its fiscal-year identity and remain available for recording, adjusting, and liquidating obligations properly chargeable to that account.”
Just as under the prior system, a 1-year or multiple year appropriation expires on the last day of its period of availability and is no longer available to incur and record new obligations. However, the unobligated balance no longer reverts immediately to the general fund of the Treasury.
Upon expiration of a fixed appropriation, the obligated and unobligated balances retain their fiscal year identity in an “expired account” for that appropriation for an additional five fiscal years. As a practical matter, agencies must maintain separate obligated and unobligated balances within the expired account as part of their internal financial management systems in order to insure compliance with the Antideficiency Act. Also relevant in this connection is 31 U.S.C. §1554(a), under which applicable audit requirements, limitations on obligations, and reporting requirements remain applicable to the expired account.
During the 5-year period, the expired account balance may be used to liquidate obligations properly chargeable to the account prior to its expiration. [50] The expired account balance also remains available to make legitimate obligation adjustments, that is, to record previously unrecorded obligations and to make upward adjustments in previously under recorded obligations. For example, Congress appropriated funds to provide education benefits to veterans under the so-called “GI bill,” codified at 38 U.S.C. § 1662. Prior to the expiration of the appropriation, the Veterans Administration (VA) denied the benefits to certain Vietnam era veterans. The denial was appealed to the courts. The court determined that certain veterans may have been improperly denied benefits and ordered VA to entertain new applications and reconsider the eligibility of veterans to benefits. VA appealed the court order. Prior to a final resolution of the issue, the appropriation expired. GAO determined that, consistent with 31 U.S.C. § 1502(b), [51] the unobligated balance of VA’s expired appropriation was available to pay benefits to veterans who filed applications prior to the expiration of the appropriation or who VA determined were improperly denied education benefits. 70 Comp. Gen. 225 (1991). See also B-265901, Oct. 14, 1997.
Unobligated balances in the expired account cannot be used to satisfy an obligation properly chargeable to current appropriations (50 Comp. Gen. 863 (1971)), or to any other expired account. [52] The authority of 31 U.S.C. § 1553(a) is intended to permit agencies to adjust their accounts to more accurately reflect obligations and liabilities actually incurred during the period of availability. 63 Comp. Gen. 525, 528 (1984). However, arbitrary deobligation in reliance upon the authority to make subsequent adjustments is not consistent with the statutory purpose. B-179708, July 10, 1975.
During the 5-year period, the potential for an Antideficiency Act violation exists if the amount of adjustments to obligations chargeable to the expired account during a year exceeds the adjusted balance available in the expired account against which to charge such adjustments. Should this happen, the excess can be liquidated only pursuant to a supplemental or deficiency appropriation or other congressional action. 73 Comp. Gen. 338, 342 (1994); 71 Comp. Gen. 502 (1992). [53]
49. Guidance relating to account closing is also set forth in OMB Cir. No. A-11, Preparation, Submission and Execution of the Budget, §§ 20.4(c), 130.3–130.11 (July 25, 2003). See also 1 TFM 2-4200.
50 This is similar to the treatment of the balances during the first two post-expiration fiscal years under the 1956 legislation.
51 31 U.S.C. § 1502(b) provides that the expirations of a fixed period appropriation does not “affect the status of lawsuits or rights of action involving the right to an amount payable from the balance” of such appropriation that are instituted prior to its expiration.
52 This authority to make obligation adjustments is analogous to the restoration authority of the law prior to 1990, with the exception that there is no longer a point at which balances merge and lose their fiscal year identity.
53 Compare B-179708, June 24, 1975 (applying same principle during first two post- expiration years under prior law).
54 We commonly talk about “returning” appropriation balances to the Treasury. In point of fact, for the most part, they never leave the Treasury to begin with. An appropriation does not represent cash actually set aside in the Treasury. Government obligations are liquidated as needed through revenues and borrowing. Thus, the reversion of funds to the Treasury is not a movement of actual cash, but a bookkeeping adjustment that in the various ways discussed in the text, affects the government’s legal authority to incur obligations and make expenditures.
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