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B. 3. Prior
Years’ Needs
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Page 5-19
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There are situations in which it is not only proper but mandatory to
use
currently available appropriations to satisfy a need that arose in a
prior year.14 We refer to this as the “continuing need.” If a need
arises during a
particular fiscal year and the agency chooses not to satisfy it
during that
year, perhaps because of insufficient funds or higher priority
needs, and the
need continues to exist in the following year, the obligation to
satisfy that
need is properly chargeable to the later years funds. “An
unfulfilled need of
one period may well be carried forward to the next as a continuing
need
with the next periods appropriation being available for funding.”
B-197274,
Sept. 23, 1983. Thus, an important corollary to the bona fide needs
rule is
that a continuing need is chargeable to funds current for the year
in which
the obligation is made, regardless of the fact that the need may
have
originated in a prior year.
An illustration is
B-207433, Sept. 16, 1983. The Army contracted for
a
specific quantity of thermal viewers. The contract provided for a
downward adjustment in the contract price in the case of an “underrun,”
that is, if the contractor was able to perform at less than the
contract price.
After the appropriation charged with the contract had expired, the
contractor incurred an underrun and proposed to use the excess funds
to
supply an additional quantity of viewers. It was undisputed that the
need
for additional viewers could be attributed to the year in which the
contract
was entered into, and that the need continued to exist. GAO agreed
with
the Army that the proper course of action was to deobligate the
excess
funds and, if the Army still wished to procure them, to charge the
obligation for the additional quantity to current years
appropriations. The
fact that the need arose in a prior year was immaterial. The
decision, at
pages 4–5, offered the following explanation:
“Certainly the Army could have used underrun funds to
procure additional viewers at any time during the period
those funds remained available for obligation. Also, we are
of course aware that an unmet need does not somehow
evaporate merely because the period of availability has
expired. However, nothing in the bona fide needs rule
suggests that expired appropriations may be used for an
item for which a valid obligation was not incurred prior to
expiration merely because there was a need for that item
during that period … Once the obligational period has expired, the
procurement of an increased quantity must be
charged to new money, and this is not affected by the fact
that the need for that increased quantity may in effect be a
‘continuing need’ that arose during the prior period.”
Another illustration is
B-226198, July 21, 1987. In late fiscal year
1986, the
U.S. Geological Survey ordered certain microcomputer equipment, to
be
delivered in early fiscal year 1987, charging the purchase to fiscal
year 1986
funds. The equipment was delivered and accepted, but was stolen
before
reaching the ordering office. The decision held that a reorder,
placed in
fiscal year 1987, had to be charged to fiscal year 1987 funds. As
with the
thermal viewers in B-207433, the fact that the need for the
equipment arose
in 1986 was immaterial. See also
B-286929, Apr. 25, 2001;
B-257617,
Apr. 18,
1995.
In another case, cost overruns caused the Army to delete certain
items from
a fiscal year 1979 procurement. The Army repurchased the canceled
items
in 1981, charging 1981 appropriations. GAO agreed that the
repurchase was
properly chargeable to 1981, rather than 1979 funds.
B-206283-O.M.,
Feb. 17, 1983.
The essential requirements of the “continuing need” corollary are
that
(1) the need, unmet in the year in which it arose, must continue to
exist in
the subsequent obligational period; (2) the incurring of an
obligation must
have been discretionary with the agency to begin with; and (3) no
obligation was in fact incurred during the prior year.
If the agency has no discretion as to the timing of an obligation
(for
example, in situations where the obligation arises by operation of
law), or,
even in discretionary situations, if the agency has actually
incurred a valid
obligation in the prior year (whether recorded or unrecorded), then
the
“continuing need” concept has no application and the obligation must
be
charged to the prior year. Absent statutory authority, current
appropriations are not available to fund an obligation or liability
(as
opposed to an unmet and unobligated-for need) of a prior
obligational
period. If insufficient funds remain in the prior years’
appropriation, the
agency must seek a supplemental or deficiency appropriation and must
further consider the possibility that the Antideficiency Act, 31
U.S.C.
§ 1341(a), has been violated.
In an early case, for example, an agency had contracted for repairs
to a
building toward the end of fiscal year 1904. Since it was clear that
the repairs were needed at the time they were ordered, they were
chargeable to
fiscal year 1904 appropriations, and the exhaustion of the 1904
appropriation did not permit use of 1905 funds. 11 Comp. Dec. 454
(1905).
See also 21 Comp. Dec. 822 (1915).
In
B-226801, Mar. 2, 1988, GAO considered various entitlement
programs
administered by the Department of Veterans Affairs (VA). Under these
programs, the obligation arises when VA determines eligibility
through its
adjudication process and must be recorded at that time. If the
obligations
would exceed available funds, it is not proper to defer the
recording and
charge the following year’s appropriation. Since the obligations are
required by law, overobligation would not violate the Antideficiency
Act,
but they must still be recognized and recorded when they arise.
Congress
subsequently began including an administrative provision in VA’s
appropriation act permitting the use of appropriations for these
programs
to pay obligations required to be recorded in the last quarter of
the
preceding fiscal year.15
See also B-287619, July 5, 2001.
For additional cases, see
55 Comp. Gen. 768, 773–74 (1976) (current
year’s
appropriations not available to fund prior year’s Antideficiency Act
violation); 54 Comp. Gen. 393, 395 (1974) (deficiency appropriation
necessary to pay claims against exhausted appropriation);
B-133001,
Mar. 9, 1979 (fiscal year refugee assistance appropriation not
available to
pay for services performed in prior year);
B-14331, Jan. 24, 1941;
A-76081,
June 8, 1936 (appropriations not available for past obligations
unless
clearly indicated by language and intent of appropriation act);
B-221204-O.M., Jan. 31, 1986 (meals under child nutrition program
served in
September of one fiscal year may not be charged to subsequent year’s
appropriation). Congressional denial of a request for a deficiency
appropriation does not make current appropriations available to
satisfy the
prior year’s obligation.
B-114874, Sept. 16, 1975 (postage charges
under
39 U.S.C. § 3206). |
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Footnotes |
14 See also 31 U.S.C. §1553(b), which requires that obligations and
adjustments properly made to closed accounts may be charged to any
current appropriation, and section D.4 of this chapter. (BACK)
15 E.g.,
Departments of Veterans Affairs and Housing and Urban Development,
and Independent Agencies Appropriations Act, 1990, Pub. L. No.
101-144, title I, 103 Stat. 839, 843–44 (Nov. 9, 1989); Departments
of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997, Pub. L. No. 104-204,
title I, § 105, 110 Stat. 2874, 2881 (Sept. 26, 1996); and
Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 2002, Pub.
L. No.107-73, title I, § 105, 115 Stat. 651, 657 (Nov. 26, 2001). (BACK) |
