Use of Expired Funds

TABLE OF CONTENTS 

OVERVIEW

13.1 What is the purpose of this chapter? This chapter provides policy and procedures for U.S. Fish and Wildlife Service (Service) employees requesting and approving the use of expired funds from an expired account.

13.2 What is the scope of this chapter? This chapter applies to all Service employees involved with expired funding.

13.3 What are the authorities for this chapter? 

A. Antideficiency Act, as amended (31 U.S.C. 1341-42, 1349-51, 1511-1519).

B. Closing Accounts (31 U.S.C. 1551-1558).

C. Federal Acquisition Regulation (48 CFR).

D. General, Appropriation Accounting (31 U.S.C. 1501-1503).

E. Office of Management and Budget (OMB) Circular No. A-11, Preparation, Submission, and Execution of the Budget.

F. Principles of Federal Appropriations Law (i.e., the Red Book), U.S. Government Accountability Office (GAO).

13.4 What is the overall Service policy? 

A. Expired accounts are 1-year or multiple year time-limited appropriations that we cannot use for new obligations after the period of availability has ended.

B. After the end of its period of availability, the account maintains its fiscal year identity and remains available in an “expired” status for another 5 years. During this period, we may obligate funds from such a time-limited appropriation only under conditions (see the Red Book, Chapter 5, Availability of Appropriations: Time) that meet specific established appropriation law criteria, such as for replacement contracts or previously undisclosed obligations.

C. We must never use an expired account to satisfy an obligation that is properly chargeable to current funding, or to any other expired account (see 50 Comp. Gen. 863 (1971)).

13.5 What terms do you need to know to understand this chapter? 

A. Antecedent liability is when an upward price adjustment is necessary because the Government's liability can be tied to a provision in an original contract (in a prior year).

B. Anti-Deficiency Act is a law, generally codified at 31 U.S.C. 1341 et seq.,that establishes processes and assigns responsibilities for accountability in spending taxpayers’ money. The Act prohibits spending more money than authorized by setting guidelines to keep Federal organizations from becoming deficient. It requires that no Federal agency can make greater expenditures during a fiscal year than Congress has provided. In addition, agencies cannot enter into contracts for the future payment of money in excess of appropriations.

C. Appropriations (or appropriations act) is the most common form of budget authority. It is a statutory authorization for Federal agencies to incur obligations that they pay from U.S. Department of the Treasury (Treasury) accounts for specific purposes. An appropriations act fulfills the requirement of Article I, Section 9, of the U.S. Constitution, which provides that “no money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” An appropriations act may include many separate provisions of budget authority. We often refer to each provision within an act as a “fund” or “pot of money.” Types of appropriations include:

(1) 1-year or annual funds are available for incurring obligations only during a specified fiscal year.

(2) Multiple-year funds are available for incurring obligations for a definite period of more than one fiscal year.

(3) No-year funds are available for incurring obligations for an indefinite period of time until the objectives have been accomplished. The bona fide needs rule does not apply to this type of money.

(4) Unexpired funds are available for incurring obligations during the current fiscal year if the authority has not expired.

(5) Expired funds are no longer available for obligation, but they may still be available for disbursement to pay existing obligations.

(6) Permanent funds are when an agency automatically receives funding each year over a period of time because it is in existing legislation, and annual action by Congress is not necessary.

(7) Current funding requires periodic action by Congress, usually annually, in or immediately preceding the fiscal year.

D. Authorizing legislation provides the legal basis for actual appropriations that Congress passes later. It establishes and continues the operation of Federal programs or agencies either indefinitely or for a specific period, or sanctions a particular type of obligation or expenditure within a program. Authorizing legislation does not provide budget authority, which stems only from an appropriations act.

E. Bona fide needs rule means that an agency may only obligate a fiscal year’s appropriation to meet a legitimate need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made.

F. Closed/canceled accounts are accounts in which any remaining unexpended balances, both obligated and unobligated, are closed or canceled, returned to the general fund of the Treasury, and are no longer available for any purpose.

G. Expired accounts are accounts in which authority to incur obligations has lapsed but from which an agency may pay for existing obligations and liabilities previously incurred, as well as valid adjustments of such obligations/liabilities.

H. Fiscal year (FY) is any yearly accounting period. The fiscal year for the Federal Government begins on October 1 and ends on September 30. It is designated by the calendar year in which it ends.

I. Obligations are legally binding Federal commitments that will result in outlays (e.g., to pay for goods, products, services, studies) immediately or in the future. Budgetary resources must be available before an agency can incur obligations legally. As an agency makes the required payments (i.e., outlays), it liquidates the obligation. Appropriations laws usually make funds available for obligation for one or more fiscal years, but do not require agencies to spend their funds during those specific years. The actual payments can occur years after the appropriation is obligated.

J. Outlays are payments made (generally through the issuance of checks or electronic fund transfers) to liquidate obligations. Outlays during a fiscal year may be for payment of obligations incurred in prior years or in the same year.

K. Period of availability is the period of time for which appropriations are available for obligation. If funds are not obligated during their period of availability, then the funds expire and are generally unavailable for new obligations.

RESPONSIBILITIES

13.6 What are the responsibilities for requesting and approving the use of expired funding? See Table 13-1.

 Table 13-1: Responsibilities for Requesting and Approving Expired Funds

ALLOWABLE CONDITIONS

13.7 What are the allowable conditions for reinstating expired funding? With appropriate approvals, we may reinstate expired funding in the following circumstances, which we categorize by type:

A. Undisclosed obligations.

(1) Invoices that are due and payable by the Service and were:

     (a) Never recorded as an obligation in FBMS, or

     (b) Inadvertently de-obligated in FBMS, and

(2) Where supporting documentation clearly shows that:

     (a) A legitimate obligation was incurred during the original period of availability of the time-limited appropriation, and

     (b) The obligation complies with the bona fide needs rule (see section 13.10 and 13.11).

B. Grant or cooperative agreement awards.

(1) Underpayment. An outstanding balance of grant or cooperative agreement award funds were de-obligated in FBMS, and:

     (a) The amount of the final Federal payments in the final Federal Financial Report (Standard Form (SF)-425) does not equal the amount of posted payments in FBMS, and

     (b) The final Federal Financial Report shows the Federal share of expenses is more than the posted payments (i.e., amount due to the cooperator) in FBMS.

(2) Obligation to incorrect recipient (vendor code) in FBMS. A grant or cooperative agreement was obligated to an incorrect vendor code in FBMS.

(3) Replacement award. When:

     (a) We have a continuing bona fide need (see section 13.10) to complete the original project;

     (b) The purpose of the grant or cooperative agreement award remains the same from the Service’s standpoint;

     (c) The replacement grant or cooperative agreement award is on the same property (if applicable), has the same project scope, objective, and cost; and

     (d) The replacement grant or cooperative agreement award is executed without undue delay.

C. Contracts.

(1) Obligation to an incorrect vendor code in FBMS. A contract was obligated to an incorrect vendor code in FBMS.

(2) Replacement contract. When:

     (a) We have a continuing bona fide need (see section 13.10) for the work, supplies, or services up to the award of the replacement contract (see 55 Comp. Gen. 1351, 1353 (1976); 34 Comp. Gen. 239, 240 (1954));

     (b) The original contract was made in good faith;

     (c) We terminated the contract for:

     (i) Vendor default; or

     (ii) Convenience of the Government only in one of these instances:

            (a) Court order,

            (b) The Contracting Officer’s determination that the contract award was improper due to explicit evidence that the award was erroneous, and the Contracting Officer has documented the determination with appropriate findings of fact and of law, or

            (c) Determination by GAO’s Board of Contract Appeals that the contract award was improper; and

     (d) We use the replacement contract to obtain the goods or services that we had originally ordered under the terminated contract, and the replacement contract is:

      (i) Substantially of the same size and scope as the original contract, and

      (ii) Executed without undue delay after the original contract is terminated.

(3) Contingent liability. This type of liability usually is in the form of a settlement or claim against the Federal Government.

D. Redistributions.

(1) Contracts.

     (a) When we code legitimate charges incorrectly in FBMS,

     (b) When charges can feasibly be moved to a different funding source,

     (c) When we need to adjust the final amount of the product or service we purchased, or

     (d) We need to make necessary changes in our accounting to reflect the true cost or charge of the product or service.

(2) Concur travel voucher payments.

     (a) Due to system limitations in Concur, we are unable to charge Temporary Duty Travel (TDY) voucher payments against expired funding (see Part 265 of the Service Manual).

     (b) As a result, we must charge all TDY travel voucher payments from a closed fiscal year to an unexpired account so that they can be processed and paid through Concur.

     (c) For TDY travel voucher payments that are more than $1,000 and should be charged against expired funding, Regions/programs may:

     (i) Process the voucher payment against an unexpired account in Concur, and

     (ii) Process a subsequent journal voucher document in FBMS to move the payment to the appropriate expired year funding.

13.8 What documentation is required when submitting a use of expired funds request? See Table 13-2.

Table 13-2: Required Documentation for Expired Funds Requests

13.9 What happens if the Service does not have adequate expired funding to cover an expense? We must use currently available (i.e., unexpired) funding, not to exceed an amount equal to 1 percent of the total current appropriation being charged, or total amount of the appropriation of the expired account, whichever is less.

BONA FIDE NEEDS RULE

13.10 What is the bona fide needs rule? The bona fide needs rule is a requirement of appropriations law. It mandates that Federal agencies may only obligate a fiscal year's appropriations to meet a legitimate, or bona fide, need arising in (or sometimes before) the fiscal year for which the appropriation was made. It restricts agencies from using this year's appropriated funds to fund next fiscal year’s requirements. For example, we cannot use annual funds appropriated for fiscal year 2023 to fund a need we won't genuinely have until fiscal year 2024.

13.11 What is the scope of the bona fide needs rule? The rule applies not only to contracts, but to all Federal Government activities carried out with appropriated funds, including contract, grant, purchase card, and cooperative agreement transactions. It is applicable to both annual and multi-year funds, but not no-year funds.

SEVERABLE AND NON-SEVERABLE

13.12 What are severable and non-severable services?

A. Severable services are services that are ongoing or repetitive in nature. These are services that generally have natural breaking points. Examples include lawn maintenance, janitorial services, security services, or transit benefits. With severable services, an agency realizes a benefit at the time that services are provided even if the tasks in a contract are not complete. For example, in the Service sometimes an organization may perform research for us and one of the tasks is to provide us, on an ongoing basis, with data or reports from which we receive a benefit.

B. Non-severable services are services that constitute a single, indivisible undertaking for which the requesting agency receives no benefit until the entire project is completed. An example of non-severable services that occur in the Service related to research projects is where we do not receive anything of consequential value until the entire project is completed and we receive a final report.

13.13 How must the Service fund severable and non-severable services?

A. Severable services must be charged to the fiscal year(s) in which they are rendered.

B. Non-severable services must be funded entirely with appropriations available at the time we awarded the contract, but the period of performance may extend across fiscal years.

CANCELED ACCOUNTS

13.14 How does the Service process a properly chargeable expense against a canceled account? Once we have closed or canceled an account, it is no longer available for obligation or expenditure for any purpose. We must use currently available (i.e., unexpired) funding, not to exceed an amount equal to 1 percent of the total current appropriation being charged, or total amount of the appropriation of the closed or canceled account, whichever is less.

13.15 What are the cancelation dates of the Service’s 2-year resource management funding? See Table 13-3 for cancelation dates up to fiscal year 2028.

Table 13-3: Resource Management 2-year Funding Cancelation Dates