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1 [1] (February 26, 2024)

handle is hein.crs/goveolb0001 and id is 1 raw text is: s Congressional Research Service as Informing the legislative debate sinco 1914 6 Updated February 26, 2024 Expiration and Cancellation of Unobligated Funds Unless Congress chooses to intervene, appropriated funds that have not been obligated may expire and be cancelled according to procedures that are outlined in statute. Relevant provisions related to the expiration and cancellation of appropriated funds are found in Title 31 of the U.S. Code. Background The Constitution vests Congress with the authority to levy taxes, authorize the issuance of debt, and make appropriations to fund the federal government, which is collectively known as the power of the purse. Those funds may be drawn from the Treasury only in consequence of appropriations made by law. The President, the Office of Management and Budget (OMB), and agencies execute the budget in accordance with the budgetary laws that have been enacted. They possess limited authority to make spending adjustments after appropriations and other spending legislation have been enacted. Budget execution occurs in multiple steps: * Budget authority is enacted into law by appropriations legislation. Budget authority provides agencies with the legal basis to incur obligations. * Obligations are incurred when agencies enter into legally binding commitments such as employing personnel or awarding contracts for the provision of goods or services. * Outlays are payments made to liquidate these obligations. After enactment of a particular appropriation into law, agencies may obligate and expend funds subject to several conditions addressed by appropriations statutes. These conditions on the availability of appropriations include * the time period during which funds are available for obligation, sometimes referred to as the period of availability or duration of appropriations; * the purpose(s) for which particular funds are appropriated; and * the amount of appropriated funds that may be obligated and expended. While executive agencies may have legal discretion to determine how to allocate and obligate the funds available to them, they are also legally required to execute spending legislation as enacted. Figure I. Example of the Expiration and Cancellation of Unobligated Funds with a Definite Period of Availability Source: CRS analysis of 31 U.S.C. §§1 552-1555. Note: This graphic serves as an illustrative example and does not represent a particular appropriations account or appropriated amount. Accounts with a Definite Period of Availability In most cases, appropriated funds may be obligated only during a defined period of availability. One-year funds are appropriations that remain available for obligation for one year. Multiyear funds are appropriations that remain available for obligation for more than one year. Expiration of Funds When the defined period of availability for an appropriation account ends, any remaining funds in the appropriation account expire. Expired funds are no longer available for incurring new obligations, because the period of availability has ended (31 U.S.C. §1552). For five fiscal years following the expiration of appropriated funds, the funds may still be available for the payment of obligations properly incurred during the period of availability (31 U.S.C. § 1553; see Figure 1). During this five-year period, additional obligations may be incurred because of contract changes, which may trigger reporting requirements if the changes exceed certain thresholds (31 U.S.C. § 1553(c)). If Ends on Septcmber 30. 2020 Afte September 30,,2020 UntilSepteber 30.2025 BerweeE ,i onrfnd Ccn on Fu On optemer 30, 2025

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