What account is unused de-obligated funds return when the de-obligation occurs during the same year that it is obligated? We believe unused funds are returned to the organization which developed the requirement.
What account is unused de-obligated funds return when the de-obligation occurs on contracts which are two or three years old? We believe unused funds go back to the unit's command or organization of the major command.
What account is unused de-obligated funds returned when the de-obligation occurs on contracts to be close which are four or five years old? We believe unused funds are returned to the major services command (i.e.; Army, Air Force, Navy, Marines or Coast Guard or other agencies).
What account is unused de-obligated funds return where the contracts are more than five years old. We believe these funds go back to Congress who appropriated the funds in the beginning.
The answer depends on what appropriation was used to obligate these contracts.
|DoD Financial management Regulation (FMR) Volume 2A, chapter 1, paragraph 010107. Budget Terminology/Definitions has the following table on the life cycle of appropriations:|
Unexpired funds are available for new obligations, payments, & adjustments. If the agency deobligated the appropriation before the expiration of the period of availability, the deobligated amount is available to the agency or program management office (PMO) to incur new obligations.
There are provisions in the FMR Volume 3, Chapter 10: "ACCOUNTING REQUIREMENTS FOR EXPIRED AND CLOSED ACCOUNTS" which addresses the policies and procedures relating to expired accounts.
Expired Appropriation is an appropriation whose period of availability for incurring new obligations has expired but the appropriation is not closed (canceled). During this period, the appropriation is available for adjustment to, or payment of, existing obligations. Appropriations remain in an expired status for 5-years as shown in the table below.
If an agency deobligates the appropriation after the expiration of the period of availability, the deobligated amount is not available to incur a new obligation, but is available to cover appropriate adjustments to obligations in the expired account. When an appropriation reaches expired status it retains fiscal year and line item or program element identity but the Program Management Office (PMO) or other executing organization no longer "controls" the account and cannot execute an Upward Obligation Adjustment unilaterally. The ultimate approval authority is the Service Comptroller but each Service may delegate authority to command-level comptrollers below certain dollar thresholds
Canceled Appropriations - At the end of the five-year expiration period, the appropriation is closed (canceled) and these funds are not available
for new obligations or increased scope on existing obligations. They are also no longer available for the payment of unliquidated obligations.
For cancelled appropriations, fiscal y
ear, line item, etc. identity remains only for accounting tracking purposes.
Payment of canceled bills requires approval through the Service’s Upward Obligation Adjustment (UOA) process. The ultimate approval authority is the Service Comptroller but each Service may delegate authority to command-level comptrollers below certain dollar thresholds.