Cyclopedia of Congressional Budget Law

Fiscal Year

Summary

A fiscal year is a period of time used for accounting purposes. For the Federal Government it begins on October 1 of a calendar year and lasts through September 30 of the next calendar year. It is set by section 1102 of Title 31 of the U.S. Code after being set by the enacted text of title V of the Congressional Budget Act of 1974 (title V was later replaced by Federal Credit Reform Act of 1990).

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Legislative History of the Fiscal Year

The fiscal year was set in section 237 in the Revised States (R.S.§237) by an Act from the 43rd Congress “to revise and consolidate the statutes of the United Sates, in force on the first day of December, anno Domini,” 1873.  The fiscal year was set to begin on July 1 of each year.  This was then restated in 1890 by an Act related to the duties of the House Sergeant of Arms. The date of the fiscal year was not changed.

Title V of the Congressional Budget Act of 1974 was signed into law on July 12, 1974 and changed the fiscal year to begin on October 1 of each year, and classified to 31 U.S.C. 1020 of the U.S. Code. The section was renumbered by Pub. L. 97-258 as 31 U.S.C. 1102, but did not make any substantive change. See table below.

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GAO Glossary of Terms and Definition (September 2005)

Fiscal Year

Any yearly accounting period, regardless of its relationship to a calendar year. The fiscal year for the federal government begins on October 1 of each year and ends on September 30 of the following year; it is designated by the calendar year in which it ends. For example, fiscal year 1990 began October 1, 1989, and ended September 30, 1990. (Prior to fiscal year 1977, the federal fiscal year began on July 1 and ended on June 30. The 3-month period, July 1, 1976, to September 30, 1976, between fiscal years 1976 and 1977 is called the transition quarter (“TQ”).) (For a more detailed description of the budget process, see app. I.)

BUDGET YEAR

A term used in the budget formulation process to refer to the fiscal year for which the budget is being considered, that is, with respect to a session of Congress, the fiscal year of the government that starts on October 1 of the calendar year in which that session of Congress begins.

CURRENT YEAR

A term used in the budget formulation process to refer to the fiscal year immediately preceding the budget year under consideration.

OUTYEAR

In the Concurrent Resolution on the Budget, or in the President’s budget submission, any fiscal year (or years) beyond the budget year for which projections are made.

PRIOR YEAR

The fiscal year immediately preceding the current year.

PROGRAM YEAR

Describes the authorized operating period of a particular program. The term is usually used to distinguish the program’s operating period from the federal government’s fiscal year. For example, a program year may begin on July 1 of a year and end on June 30 of the following year. Thus, program year 2003 began on July 1, 2003, and ended on June 30, 2004.

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Fiscal Year — Transition After Enactment of CBA

FISCAL YEAR TRANSITION PERIOD OF JULY 1, 1976, THROUGH SEPTEMBER 30, 1976

Pub. L. 94–274, Apr. 21, 1976, 90 Stat. 383 (Fiscal Year Transition Act) provided “for the orderly transition to the new October 1 to September 30 fiscal year” for particular acts by specifying how the prior fiscal year period of July 1, 1976, through Sept. 30, 1976, was to be treated for fiscal year purposes.

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CRS Report: The Fiscal Year (June 17, 2008)

The fiscal year is the accounting period of the federal government. It begins on October 1 and ends on September 30 of the next calendar year. Each fiscal year is identified by the calendar year in which it ends and commonly is referred to as “FY.” For example, FY2008 began October 1, 2007, and ends September 30, 2008.

Initially, the federal fiscal year coincided with the calendar year. In 1842, President John Tyler signed legislation changing the fiscal year to a July 1 to June 30 cycle. Beginning with FY1977, the Congressional Budget Act of 1974 (Section 501 of P.L. 93-344, currently codified at 31 U.S.C. 1102) changed the fiscal year to its current cycle. In both instances, the intent was to provide Congress with more time to process appropriations legislation, particularly to avoid continuing resolutions. Establishing the most appropriate budget cycle continues to be the subject of some legislative proposals that would change the current fiscal year to a biennial (two-year) period.

Federal agencies simultaneously work on three fiscal-year budgets at any given time. Figure 1 illustrates these three fiscal-year budgets. First, agencies implement budgetary legislation for the current fiscal year. Second, they support the President’s budget proposals during congressional consideration of budgetary legislation for the coming fiscal year, referred to as the “budget year.” Third, federal agencies develop their budgets for the following fiscal year, which the President will submit to Congress in February of the next calendar year. For example, in May 2008, agencies were implementing the FY2008 budget, seeking funds for the FY2009 budget, and beginning to develop the FY2010 budget.          

Author:

Bill Heniff Jr.

Analyst on the Congress and Legislative Process

[Bill Heniff Jr., The Fiscal Year, Report for Congress 98-325 (Congressional Research Service, CRS 98-325, June 17, 2008).]

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