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VOLUME 3, CHAPTER 10: “ACCOUNTING REQUIREMENTS FOR EXPIRED AND
CLOSED ACCOUNTS”
SUMMARY OF MAJOR CHANGES
All changes are denoted by blue font.
Substantive revisions are denoted by an asterisk (*) symbol preceding the section,
paragraph, table, or figure that includes the revision.
Unless otherwise noted, chapters referenced are contained in this volume.
Hyperlinks are denoted by bold, italic, blue, and underlined font.
The previous version dated March 2015 is archived.
PARAGRAPH
EXPLANATION OF CHANGE/REVISION
PURPOSE
100102
Updated the “Authoritative Guidance” paragraph to include a
list of authoritative sources.
Revision
1002
Updated a definition to include more context; and removed
duplicated definitions that are defined in the Glossary.
Revision
100303.A
Updated paragraph to provide more context in accordance
with Title 31, United States Code, section 1552(a).
Revision
100304.D.2
Deleted information that is not relevant to the purpose of this
chapter.
Deletion
100314.B.3.a
Replaced the Financial Management Service Form 2108
reference with the Government-wide Treasury Account
Symbol Adjusted Trial Balance System.
Revision
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Table of Contents
VOLUME 3, CHAPTER 10: “ACCOUNTING REQUIREMENTS FOR EXPIRED AND
CLOSED ACCOUNTS” ................................................................................................................. 1
1001 GENERAL ........................................................................................................... 3
100101. Purpose ................................................................................................................. 3
*100102. Authoritative Guidance ........................................................................................ 3
*1002 DEFINITION ....................................................................................................... 4
1003 STANDARDS...................................................................................................... 4
100301. Accounts ............................................................................................................... 4
100302. Expired Accounts ................................................................................................. 4
100303. Closed/Cancelled Accounts.................................................................................. 5
100304. Contract Change Provisions ................................................................................. 7
100305. Shipbuilding and Conversion, Navy .................................................................... 8
100306. Obligation Adjustment for a Contract Change Greater Than $4 Million ............ 8
100307. Obligation Adjustment for a Contract Change Equal to or Greater than
$25 Million........................................................................................................... 9
100308. Replacement Contracts ......................................................................................... 9
100309. Obligation Adjustments or Payments from Current Appropriations for
Closed/Cancelled Accounts ............................................................................... 10
100310. Current Appropriations Used for Expired Appropriations with Insufficient
Obligation Authority .......................................................................................... 11
100311. Collection Credits After an Account is Closed/Cancelled ................................. 12
100312. Exceptions to an Account’s Period of Availability for Adjusting and Liquidating
Obligations ......................................................................................................... 12
100313. Antideficiency Act Violations ............................................................................ 13
100314. Control, Reporting, and Certification Requirements ......................................... 13
100315. Other Requirements............................................................................................ 14
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CHAPTER 10
ACCOUNTING REQUIREMENTS FOR EXPIRED AND CLOSED ACCOUNTS
1001 GENERAL
100101. Purpose
This chapter prescribes the accounting requirements, restrictions, and limitations for
expired accounts and closed (cancelled) accounts. It addresses the fiscal year (FY) identity,
periods of availability, obligation adjustments, and exceptions applicable to these accounts.
*100102. Authoritative Guidance
The following laws and regulations within this chapter contain the current requirements for
the efficient and effective use of expired and closed accounts which includes the responsibilities
and authority in applying these accounting requirements for the Department of Defense (DoD):
A. Title 10, United Stated Code, section 8683 (10 U.S.C. § 8683), “Ship
overhaul work: availability of appropriations for unusual cost overruns and for changes in scope
of work.”
B. 31 U.S.C. § 1108, “Preparation and submission of appropriations requests
to the President.”
C. 31 U.S.C. § 1514, “Administrative division of apportionments.”
D. 31 U.S.C. § 1551, “Definitions; applicability of subchapter.”
E. 31 U.S.C. § 1552, “Procedure for appropriation accounts available for
definite periods.”
F. 31 U.S.C. § 1553, “Availability of appropriation accounts to pay
obligations.”
G. 31 U.S.C. § 1554, “Audit, control, and reporting.”
H. 31 U.S.C. § 1555, “Closing of appropriation accounts available for
indefinite periods.”
I. 31 U.S.C. § 1556, “Comptroller General: report on appropriation
accounts.”
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J. 31 U.S.C. § 1557, “Authority for exemptions in appropriation laws.”
K. 41 U.S.C. Chapter 71, “Contract Disputes.”
L. 41 U.S.C. § 3301, “Definition of records.”
M. Office of Management and Budget (OMB) Circular A-123, Appendix A.
N. OMB Circular A-11, Section 20, “Terms and Concepts.”
O. U.S. Department of the Treasury (Treasury) Financial Manual
(TFM) Volume 1, Part 2, Chapter 2000.
P. Treasury United States Standard General Ledger (USSGL).
*1002 DEFINITION
The definition provided in this section describes terminology associated with expired and
closed/cancelled accounts.
No-Year Accounts. No-year authority usually remains in the unexpired phase until
fully obligated and disbursed. When the purposes for which the authority was made available have
been achieved, the account may be closed and the authority cancelled.
1003 STANDARDS
100301. Accounts
General ledger accounts and transactions required to record cancellations, account closure,
and expired transactions are defined in the DoD Standard Chart of Accounts and in the DoD
USSGL Transaction Library. These documents can be accessed on the Standard Financial
Information Structure (SFIS) web page.
100302. Expired Accounts
A. Expired funds retain their FY identity for five years after the time an
appropriation expires (see Chapter 13, subparagraph 130308.B). Expired funds are not available
for new obligations. Both the obligated and unobligated balances of expired appropriations must
be available for recording, adjusting, and liquidating obligations properly chargeable to that
account.
B. Before an account closes/cancels, the affected DoD Component must
identify valid unliquidated obligations subject to closure/cancellation to determine whether
appropriations are available for future adjustments or payments against such obligations. Also,
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the DoD Component must confirm whether adequate resources are available to pay for obligations
that will close/cancel with an account.
100303. Closed/Cancelled Accounts
* A. On September 30 of the fifth FY after the period of availability for
obligation of a fixed appropriation account ends, the account must be closed and any remaining
balance (whether obligated or unobligated) in the account must be cancelled and thereafter is not
available for obligation or expenditure for any purpose, unless exempt by a provision of an
appropriation law. Collections authorized or required to be credited to an appropriation account,
but not received before closing of the account must be deposited in the Treasury as miscellaneous
receipts in accordance with 31 U.S.C. § 1552(a).
B. Certain appropriations are available for an indefinite period. Obligated and
unobligated balances in such appropriations must be closed/cancelled when no disbursements have
been made from the indefinite appropriation for two consecutive FYs and the President, the
Secretary of Defense, or the Secretary’s designee determines the purposes for which the
appropriation was made have been carried out in accordance with 31 U.S.C. § 1555.
C. In some instances, following closure/cancellation of an appropriation, it
becomes necessary to adjust an obligation that otherwise would have been properly chargeable
(both as to purpose and amount) to an appropriation before closure/cancellation. Should such an
adjustment become necessary, the obligation must be charged to an appropriation currently
available for the same purpose, subject to certain limitations discussed in subparagraph 100303.D.
If an adjustment to an obligation otherwise properly chargeable to a closed/cancelled appropriation
pursuant to 31 U.S.C. §§ 1551 – 1557 is required, and the related program or function has migrated
from one DoD activity to another, the adjustment is chargeable to the current DoD activity to
which the program has transferred. The current DoD activity is responsible for providing current
year funds from an appropriation account available for the same purpose to satisfy the obligation.
D. When a currently available appropriation is used to pay an obligation, which
otherwise would have been properly chargeable (both as to purpose and amount) to a
closed/cancelled appropriation, the total of all such payments from that current appropriation may
not exceed the lesser of:
1. The unexpended balance of the closed/cancelled appropriation (the
unexpended balance is the sum of the unobligated balance plus the unpaid obligations of an
appropriation at the time of closure/cancellation, adjusted for obligations and payments which are
incurred or made subsequent to closure/cancellation, and which would otherwise have been
properly charged to the appropriation except for the closure/cancellation of the appropriation); or
2. The unexpired unobligated balance of the currently available
appropriation; or
3. One percent of the total original amount appropriated to the current
appropriation being charged.
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a. For annual accounts, the one percent limitation applies to the
annual appropriation for the applicable account; not total budgetary resources (e.g., reimbursable
authority).
b. For multi-year accounts, the one percent limitation applies
to the total amount of the appropriation. For example, if a multi-year account enacted for FY 2019
through FY 2020 was $100 million, the one percent limitation in FY 2019 would be $1 million.
At the end of FY 2019, if $650,000 had been used for payment of obligations of closed/cancelled
accounts, the amount available to be used for such payments in FY 2020 would be $350,000
($1 million minus $650,000).
c. For contract changes (as specified in paragraph 100304),
charges made to currently available appropriations has no impact on the one percent limitation
rule, i.e., the one percent (of the currently available appropriation) amount is not decreased by the
charges made to current appropriations for contract changes.
E. In order to prevent overpayments and ensure that applicable limitations are
not exceeded, DoD Components must:
1. Identify the unobligated balance and unpaid obligations of all
expired appropriations at the time they expire.
2. Identify the unobligated balance and unpaid obligations of all
closed/cancelled appropriations at the time they are closed/cancelled.
3. Identify for closed/cancelled accounts all obligations and payments
that were charged to currently available appropriations that otherwise would have been properly
chargeable (both as to purpose and amount) to a closed/cancelled appropriation (as specified in
subparagraph 100303.D).
4. Identify and maintain the amount that it is permissible to charge
current appropriations for obligations and payments which otherwise would have been properly
chargeable (both as to purpose and amount) to a closed/cancelled appropriation. This amount is
determined by subtracting all subsequent obligations and payments made from the unexpended
balance of the appropriation at the time it was closed/cancelled as indicated in subparagraph
100303.E.3.
F. Official accounting activities must maintain proper general ledger controls
for valid unpaid obligations and receivables pertaining to closed/cancelled accounts. General
ledger controls must be perpetuated until all obligations are paid and accounts receivable collected.
(This will ensure that valid liabilities continue to be tracked until satisfied, even though the
accounts are closed/cancelled.) In addition, official accounting activities must:
1. Ensure that the beginning, unpaid obligation balance of each
closed/cancelled appropriation accurately reflects the official Treasury balance of the
appropriation on the date of closure/cancellation.
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2. Perform a one-time review of each closed/cancelled appropriation
to ensure that the beginning accounts payable (obligations unpaid) balance of each
closed/cancelled appropriation accurately reflects the balances on the Standard Form (SF) 133,
“Report on Budget Execution and Budgetary Resources,” as of the date of closure/cancellation.
3. Ensure that an adequate audit trail is maintained for all corrections
affecting closed/cancelled appropriations, including any offsetting corrections to current or expired
appropriations. Records must be maintained in accordance with Volume 1, Chapter 9 that
prescribes DoD policy on records retention in accordance with the National Archives and Records
Administration (NARA) General Records Schedules.
100304. Contract Change Provisions
A. A contract change is defined in 31 U.S.C. § 1553(c)(3) as a change to a
contract under which a contractor is required to perform additional work. Such term does not
include adjustments to pay claims or increases under an escalation clause. Paragraphs 100306 and
100307 contain procedures for requesting approval of obligation adjustments for contract changes
in excess of $4 million.
B. Obligation adjustments, such as incentive or award fees and price inflation
(escalation or economic price adjustments), are not considered contract changes for purposes of
subparagraph 100304.A. To the extent otherwise appropriate, such amounts may be charged to
applicable accounts that otherwise have expired for incurring new obligation but have not yet been
closed/cancelled. Such charges or adjustments must be supported by comprehensive written
documentation containing a statement that the charges do not require, involve, or result in
additional work or changes in scope. This statement must explain the circumstances,
contingencies, or management practices that necessitated the adjustment.
C. For funding contract changes resulting from the contracting officer’s final
decision in accordance with the Contract Disputes Act, apply obligation adjustment rules in this
chapter and in Chapter 8, subparagraph 080304.B. Contract Disputes Act litigation judgments
payable from the Judgment Fund result in a new agency obligation to reimburse the Judgment
Fund. See Chapter 8, subparagraph 080304.F. For reimbursements, use funds for the same
purpose that are current at the time of the judgment.
D. 10 U.S.C. § 8683 permits expired appropriations available to DoD to be
used for new obligations of appropriations for certain ship overhaul, maintenance, and repair
efforts. Those purposes are obligation of expired funds for unusual cost overruns incident to
overhaul, maintenance and repair of vessels under commercial contract or by industrial-fund
activity. There is a statutory congressional notification requirement for funding of unusual cost
overrun obligational adjustments. Requests must be submitted to the Office of the Under Secretary
of Defense (Comptroller) (OUSD(C)), Deputy Comptroller (Program/Budget) (P/B). While
expired appropriations may be used in certain instances for new obligations; those appropriations
are not available for new obligation beyond the end of the fifth FY following their expiration.
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100305. Shipbuilding and Conversion, Navy
A. The period of availability to incur obligations in the Shipbuilding and
Conversion, Navy (SCN) appropriation for all purposes is normally five years. For limited
purposes, SCN funds are available for obligation after the five-year period has ended.
Appropriation language for the SCN appropriation often contains a provision to the effect that
additional obligations for engineering services, tests, evaluations, and other such budgeted work
that must be performed in the final stage of ship construction may be incurred after the
appropriation otherwise would expire for obligation. This additional period allowed for incurring
new obligations for such purposes is called “extended availability.”
B. DoD and Treasury employ special procedures to establish extended
availability authority for the SCN appropriations because not all work required to induct a ship
into the fleet can be completed within the first five years of availability of an SCN appropriation.
The procedures are summarized as follows:
1. The FY of the latest obligation work limiting date (OWLD) for the
last vessel financed by a particular SCN appropriation must represent the period of availability for
obligation. After such date, the appropriation enters an expired status for five years and the
balances are available only for obligation adjustments and payments.
2. An SCN appropriation is closed/cancelled on September 30 of the
fifth year following the year of the last OWLD. Before the end of each FY, DoD notifies Treasury
of the last OWLD for the SCN appropriation that will be expiring on September 30 of that FY. By
the ninth workday of November of each year, the unobligated and obligated balances of that SCN
appropriation are transferred by preparing the SF 1151, “Nonexpenditure Transfer Authorization,”
to a new Treasury FY symbol. (See the TFM Volume I, Part 2, Chapter 2000.) For example:
On September 18, 1995, the Navy notified Treasury that the last
OWLD for the FY 1991/1995 SCN appropriation was
September 30, 2001. Before November 14, 1995, the balances of
that SCN appropriation were transferred to the FY 1991/2001 SCN
appropriation with a cancellation date five years later,
September 30, 2006.
100306. Obligation Adjustment for a Contract Change Greater Than $4 Million
An obligation adjustment for a contract change to an expired appropriation under which a
contractor is required to perform additional work may be incurred only if that obligation
adjustment has been approved by the Under Secretary of Defense (Comptroller) (USD(C)), as
designee of the Secretary of Defense. The DoD Component must request approval for an
obligation amount that would cause the total amount of charges in any FY for a single program,
project, or activity to exceed $4 million and the account being used to fund the obligation is no
longer available for new obligation.
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A. If necessary, the applicable Component must submit requests for approval
to OUSD(C), P/B.
B. The request for approval must include the following documentation:
1. The amount to be obligated.
2. The purpose for which the funds are to be obligated.
3. An explanation of the obligation adjustment including the reason for
the adjustment and the contingencies or management practices that necessitated the adjustment.
C. Components must retain supporting documentation in accordance with
Volume 1, Chapter 9 that prescribes DoD policy on records retention.
100307. Obligation Adjustment for a Contract Change Equal to or Greater than
$25 Million
Special handling is required to process any obligation adjustment to an expired
appropriation for a contract change, under which a contractor is required to perform additional
work, for amounts of $25 million or more in any FY. Such adjustments may be made only after
the USD(C), as designee of the Secretary of Defense, submits a notice of intention to make the
obligation to the Armed Services and Appropriation Committees of the Senate and the House of
Representatives. The notice of intention must include the legal basis and policy reasons for the
obligation.
A. After 30 days have elapsed following submission of the notice, in writing,
the proposed obligation may be made unless the congressional committee notifies the USD(C) of
its disapproval.
B. The charges or adjustments must be supported by a written comprehensive
statement concerning the reason for the adjustment. This statement must explain the
circumstances, contingencies, or management practices that necessitated the adjustment.
C. When notification to Congress is necessary, the applicable DoD Component
must submit the required documentation including letters to the appropriate congressional
committees for the USD(C) signature to OUSD(C), P/B.
100308. Replacement Contracts
Expired funds also may be used to fund a replacement action (a replacement contract) under
certain conditions. When a procurement action will result in a replacement contract, it may be
funded from expired funds if all of the conditions in subparagraphs 100308.A-D are met. If all of
these conditions cannot be met, current year funds must be used to fund the requested action.
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A. The DoD Component has a continuing bona fide need for the goods or
services involved.
B. The original contract was made in good faith.
C. The original contract was terminated for default or for the convenience of
the Government. If the original contract was terminated for the convenience of the Government,
the termination must have been the result of a:
1. Court order;
2. Determination by a contracting officer that the contract award was
improper due to explicit evidence that the award was erroneous and the determination is
documented with appropriate findings of fact and of law; or
3. Determination by other competent authority (e.g., a Board of
Contract Appeals) that the contract award was improper.
D. A replacement contract is used to obtain the goods or services that originally
had been ordered under another contract that was terminated either for default or convenience of
the Government. The replacement contract is:
1. The same size and scope as the original contract; and
2. Executed without undue delay after the original contract is
terminated.
E. If a replacement action will result in an obligation that exceeds $4 million,
the action must first be submitted to the USD(C) for approval.
F. If a replacement action will result in an obligation equal to $25 million or
greater, a notice of intention (as discussed in paragraph 100307) must be submitted to the
appropriate congressional oversight committee at least 30 days in advance. After 30 days have
elapsed following submission of the notice, the proposed obligation may be recorded unless one
of the congressional oversight committees notifies the USD(C) of its disapproval.
100309. Obligation Adjustments or Payments from Current Appropriations for
Closed/Cancelled Accounts
A. When making payments from a current appropriation account for
obligations of a closed/cancelled account, DoD Components must submit a written request for a
“subclass” account from Treasury through the Defense Finance and Accounting Service (DFAS),
and include the purpose for the payment. Use these subclass accounts to record applicable
payments with Treasury. These payments are reported monthly on each Component’s SF 224,
“Statement of Transactions” (see Volume 6A, Chapter 3).
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B. Record amounts for obligations that otherwise would have been properly
chargeable to a closed/cancelled account (but are required to be charged to current accounts) only
in the current account when payment is imminent during the current FY. Unless payment was
made, do not report amounts for such obligations. If, at year-end, such amounts for obligations
are known to be payable in the coming FY, that information must be footnoted on the year-end
SF 224.
C. Enter current year obligation adjustments required due to closed/cancelled
balances as negative amounts against specific applicable line items in column “k” of the
Department of Defense (DD) 1416, “Report of Programs.” If these adjustments cause the line item
to exceed current year reprogramming thresholds, the amount in column “k” must be footnoted to
indicate the amount is “applicable to closed/cancelled account adjustments.” No reprogramming
action is required. In addition, enter the total of all closed/cancelled account adjustments charged
to the applicable appropriation in column “k” as a separate line item titled “Reduction to Finance
Closed Account Adjustments.” Show this amount as a positive number.
100310. Current Appropriations Used for Expired Appropriations with Insufficient
Obligation Authority
If the appropriation’s period of availability has expired and the account has a negative
unliquidated balance (insufficient funds), an obligation or adjustment of an obligation may be
charged to a current appropriation that is authorized for the same purpose. However, if a
subsequent review or investigation discloses that sufficient funds were available in the expired
account, any charge made against the current account must be reversed. Charges against a current
appropriation are prohibited if a sufficient balance exists in the expired account.
A. Charges to current year funds when sufficient obligation authority does not
exist in expired appropriations may be made if all of the following conditions are met:
1. The obligation is charged to an appropriation available for the same
purpose as the applicable expired account and is otherwise properly chargeable (except as to
amount) to the applicable expired account before closure/cancellation of the expired account.
2. The Assistant Secretary of a Military Department for Financial
Management and Comptroller, or the Comptroller of a Defense Agency, has determined that
sufficient obligation authority does not exist in the applicable expired account to fund the
applicable obligation.
3. The obligation is not otherwise properly chargeable to any DoD
current appropriation under the transitional provisions as noted in 31 U.S.C. § 1553(b)(1).
B. The amount charged to a current appropriation may not exceed an amount
equal to one percent of the total appropriation for that account (see subparagraph 100303.D that
applies to charges that can be made to a current account when the account that should have been
charged has been closed/cancelled.)
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100311. Collection Credits After an Account is Closed/Cancelled
A. It is inappropriate to write-off valid accounts receivables as a result of
closure/cancellation of appropriations with negative unliquidated obligations. Maintain
proprietary accounts until settled by the debtor or until the debt is closed in accordance with
guidance in Volume 4, Chapter 3.
B. When collections that are authorized or required to be credited to an account
are received after the closure/cancellation of an account, deposit those collections in Treasury as
miscellaneous receipts (31 U.S.C. § 1552). Accounting entries are specified in the DoD USSGL
Transaction Library that can be accessed on the SFIS web page. See Volume 4, Chapter 3 for
receivable accounting policy.
100312. Exceptions to an Account’s Period of Availability for Adjusting and
Liquidating Obligations
A. Requirements applicable to the closure/cancellation of appropriations apply
to all appropriation accounts unless specifically exempted by statute. A provision of an
appropriations act may exempt an appropriation from the provisions of the new requirements for
the closing/cancelling of accounts and may fix the period the appropriation remains available for
expenditure (31 U.S.C. § 1557). Additionally, an appropriations act applies only to the
appropriation for a specific FY. In order for an appropriation to preclude application of the
limitations on expenditure specified in new provisions of Title 31, the statute must:
1. Identify the appropriation account for which the availability for
expenditure is to be extended;
2. Provide that the appropriation account must be available for
recording, adjusting, and liquidating obligations properly chargeable to the account; and
3. Extend the availability for expenditure of the obligated balances.
B. The availability for expenditure of specific accounts may be changed only
through specific legislation. Request this authority only when payment of old balances from
unexpired funds (based on historical outlay data) regularly would exceed the one percent limitation
or would severely impact the current program.
1. When the nature of a DoD Component’s program requires
disbursements beyond the five-year period, the Component must submit proposed changes in
appropriation language to OUSD(C), P/B. OUSD(C), P/B will submit the proposed changes to
OMB for approval.
2. Absent specific authority, DoD Components may request re-
appropriations of closed/cancelled balances through OUSD(C), P/B and defer payment until the
appropriation is available. Treat the receipt of a re-appropriation as adding new budget authority.
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100313. Antideficiency Act Violations
The DoD Components are required to investigate and report potential Antideficiency Act
(ADA) violations when certain limitations are exceeded. An ADA violation can occur when an
obligation is charged against a current account when the obligation otherwise would be properly
chargeable (except as to amount) to an expired account, and insufficient resources exist to fund
the obligation in the applicable expired account. ADA investigation and reporting policy is
specified in Volume 14.
100314. Control, Reporting, and Certification Requirements
31 U.S.C. §§ 1554 and 1556, as amended, contain permanent audit, control, and reporting
requirements pertaining to the liquidation of obligations.
A. Control Requirements
1. 31 U.S.C. § 1554(a) stipulates that any audit requirement, limitation
on obligations, or reporting requirement applicable to an appropriation must continue to apply to
that appropriation following expiration of the period of availability for new obligation of that
appropriation. If an appropriation act contains a limitation on the obligation of funds for a
program, project or activity, or other purpose; that limitation continues during the five-year period
after the period of availability for new obligations expires. Additionally, the limitation continues
after the appropriation has been closed/cancelled.
2. DoD Components must establish and test internal controls to ensure
that an adequate review of obligated balances is performed to support the certification in
accordance with OMB Circular A-123, Appendix A. Components are also responsible for
retaining documents in accordance with Volume 1, Chapter 9.
3. Proper general ledger controls must be maintained for
closed/cancelled valid unpaid obligations and accounts receivable in closed/cancelled accounts.
Balances in unexpired accounts may be used to fund closed/cancelled obligations.
Closed/cancelled obligations can be posted to unexpired accounts only when a disbursement will
be paid during the current year.
B. Reporting and Certification Requirements
Under the provisions of 31 U.S.C. § 1554, the Secretary of Defense, or his designee, is
required to submit a report to the President and the Secretary of the Treasury concerning the
unliquidated obligations, unobligated balances, closed/cancelled balances, and adjustments made
to appropriation accounts during the completed FY.
1. Due Date. This report is due not later than 15 days after the
President submits his budget to Congress.
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2. Distribution Requirements. A copy of the report must be submitted
to the Speaker of the House of Representatives, the Committee on Appropriations, the Committee
on Governmental Affairs, and other appropriate oversight and authorizing committees of the
Senate (such as the Armed Services Committee).
3. Contents. 31 U.S.C. § 1554(b) requires that these reports contain:
* a. An itemization of related appropriation accounts, identified
by FY and the balances identified in each account. This itemization is reported through the
Government-wide Treasury Account Symbol Adjusted Trial Balance System (GTAS) and the
Central Accounting Reporting System year-end module.
b. A descriptive list of each current and expired appropriation.
c. Identification of payments made from each applicable
appropriation account with respect to those amounts that otherwise would have been properly
chargeable to another account, both as to purpose and amount, except that the other account has
been closed/cancelled (31 U.S.C. § 1553). These payments are reported on the DoD Component’s
SF 224.
d. Separate identification of obligation adjustments made to
each currently applicable appropriation account that otherwise would have been properly
chargeable to another account, both as to purpose and amount, except that the other account has
been closed. These balances are reported in GTAS.
e. Identification of all balances closed/cancelled on
September 30th of the fifth year following the expiration of an appropriation account’s availability
for incurring new obligations (31 U.S.C. § 1552(a)). These balances are reported in GTAS.
f. Identification of those appropriation accounts available for
an indefinite period that have been closed because: No disbursements have been made from the
account for a period of two consecutive years; and the President or the Secretary of Defense has
determined that the purposes for which the appropriation was made have been carried out
(31 U.S.C. § 1555).
g. A certification by the DoD Components that the obligated
balances in each DoD appropriation account reflect properly existing obligations; and that
expenditures made from each account since the time of submission of the prior report were
supported by a proper obligation of funds and otherwise were proper.
100315. Other Requirements
The following paragraphs specify detailed information about other review, accounting, and
correction requirements regarding current, expired, and closed/cancelled accounts.
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A. Apportionment Procedures. The SF 132, “Apportionment and
Reapportionment Schedule,” must reflect the following footnote: “Up to one percent of the
original amount of the appropriation ($xxx.xx), or the unobligated balance, whichever is less, may
be used for the purpose of obligation adjustments and payments, which otherwise would have been
properly chargeable (both to purpose and amount) to a closed/cancelled appropriation.” To the
extent that supplemental appropriations are enacted, reapportionment of the initial “one percent”
amount may be requested.
B. Unliquidated Obligations. DoD Components must review remaining
unliquidated balances in expired accounts and de-obligate all amounts not supported by
documentary evidence prior to closure/cancellation. Financial and program managers:
1. At each of the various levels of contract and program management
retain the responsibility to ensure that all transactions are appropriately concluded. If services and
materials remain undelivered at the time of expiration, they must be subsequently delivered or,
where such deliveries cannot be made, action is taken to terminate contractual obligations and
revert the funds to maintain integrity of the funds until such time as all outstanding obligations are
liquidated or claims are cancelled or liquidated.
2. At all activities must actively review uncompleted contracts,
uncollected accounts receivable, and uncollected travel or pay advances held at their level to ensure
validity of such items.
C. Payments After Closure/Cancellation of Appropriations. Payment is
prohibited for amounts that cite closed/cancelled appropriations until the disbursing office has
obtained a currently available appropriation fund cite from the funding activity.
D. Unmatched Disbursements for Closed/Cancelled Accounts. When a
disbursement is made properly before the closure/cancellation of the appropriation but is not
identified and matched with the proper obligation until after the closure/cancellation of the
appropriation, charge that disbursement to the closed/cancelled appropriation. Make appropriate
corrections to accounting records and reports as necessary; and submit those reports to Treasury
within six months of account closure. If an error is discovered in a closed/cancelled account for a
disbursement made prior to the closure/cancellation of that account, see subparagraph 100315.J
for correction of reporting errors.
E. Negative Unliquidated Obligations. Negative unliquidated obligation
(NULO) balances generally occur in an account when valid disbursements are incorrectly matched
with obligations and the disbursements exceed the obligations. Negative balances represent error
conditions that must be researched and corrected as quickly as possible. See Chapter 11 for policy
on NULOs.
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F. Line Item Detail. The level of detail required to be maintained for expired
accounts is the same as that required to be maintained for current accounts. The level of detail
facilitates cost determinations and program assessment and evaluation. The detail provides
visibility over expired accounts, an appropriate audit trail, and meets the objectives of the closing
accounts legislation.
G. Uncollectible Accounts Receivable. A write-off of an uncollectible
reimbursement receivable does not change total obligations within budgetary accounts. Such
write-offs result in a reclassification to a direct program obligation of an obligation previously
incurred. See the DoD USSGL Transaction Library for entries to account for uncollectible
accounts receivable in closed/cancelled accounts.
H. Closing/Cancelling an Account with a Negative Balance. The existence of
a negative balance does not preclude an account from being closed/cancelled. DoD Components
must clear the negative balance and establish a receivable for the amount of the negative balance
before the account can be closed.
1. Submit informational accounting reports (i.e., SF 133) for the
applicable account until the negative balance is resolved. These informational reports must
indicate that the account is closed/cancelled, show the amount of the negative balance at the time
the account was closed/cancelled, and identify the current amount of the applicable receivable.
2. Liquidate a negative balance by receiving offsetting collections.
Deposit collections of overpayments to Treasury as miscellaneous receipts. An account with a
negative balance may indicate that an ADA violation has occurred. If an ADA violation is
suspected, see Volume 14 for ADA investigation and reporting requirements.
I. Accounting for Uncollectible Accounts Receivable in Closed/Cancelled
Accounts. Budgetary accounts corresponding to accounts receivable must be closed/cancelled
when an account is closed/cancelled. Total obligations within budgetary accounts do not change
when the budgetary accounts are closed/cancelled. The write-off of an uncollectible
reimbursement receivable results in a reclassification of an obligation previously incurred under
the reimbursable program to a direct program obligation.
1. For expected refunds, the status of obligation authority must be
tracked is necessary to assure that cumulative payments do not exceed the original appropriation
of the closed/cancelled account even though paid from a current account.
2. Reclassify proprietary accounts established for accounts receivable
applicable to closed/cancelled accounts. Deposit the subsequent collections of such amounts for
this account to Treasury as miscellaneous receipts.
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3. If, after compliance with established collection procedures, it is
determined that an account is uncollectible, write-off the account by charging a bad debt account.
The write-off of an uncollectible account applicable to the reimbursable program results in a
reclassification of obligations previously incurred under the reimbursable program to a direct
program obligation.
J. Correction of Reporting Errors in Closed/Cancelled Accounts
1. Corrections may be requested for two categories of errors:
(a) clerical errors such as misplaced decimals, transposed digits, or transcribing errors resulting in
inadvertent cancellations of budget authority; and (b) errors made in classifying a payment made
prior to the closing/cancellation of an account, but not discovered until after the account was
closed/cancelled.
a. For clerical errors, the request must include the
appropriation account number, the reason for the restoration, and convincing evidence of the
clerical error to justify the restoration required to make the correction. At a minimum, this includes
the original accounting record from which the incorrect posting was made and a record showing
the incorrect amount.
b. For classification errors, Treasury accepts reporting to
correctly classify payments previously reported to suspense/clearing accounts or to correct
classification errors between current and closed/cancelled accounts.
2. Requests for corrections must be submitted by April 1 of the year
after the account in question was closed/cancelled. The TFM Volume 1, Part 2, Chapter 2000 and
the TFM Volume 1 Bulletins issued for FY-end processing identifies the address for submission
and other contact information.
3. If a request for the correction of errors affects another DoD
Component, coordinate the request with the affected Component and submit to: the DFAS Deputy
Director for Accounting Operations, 8899 East 56
th
Street, Indianapolis, IN 46249. DFAS must
submit requests to Treasury after completion of its review.
4. See Chapter 11 for policy on the research and correction of
unmatched disbursements and NULO transactions, and the resulting adjustments to Treasury.
