Unobligated balance means the cumulative amount of budget authority that remains available for obligation under law in unexpired accounts. The term “expired balances available for adjustment only” refers to unobligated amounts in expired accounts. (From OMB Circular A-11)
The portion of obligational authority that has not yet been obligated. For an appropriation account that is available for a fixed period, the budget authority expires after the period of availability ends but its unobligated balance remains available for 5 additional fiscal years for recording and adjusting obligations properly chargeable to the appropriations period of availability. For example, an expired, unobligated balance remains available until the account is closed to record previously unrecorded obligations or to make upward adjustments in previously underrecorded obligations, such as contract modifications properly within scope of the original contract. At the end of the fifth fiscal year, the account is closed and any remaining balance is canceled. For a no-year account, the unobligated balance is carried forward indefinitely until (1) specifically rescinded by law or (2) the head of the agency concerned or the President determines that the purposes for which the appropriation was made have been carried out and disbursements have not been made from the appropriation for 2 consecutive years. (See also Duration under Budget Authority; Expired Account; Expired Budget Authority under Availability for New Obligations under Budget Authority; Fixed Appropriation Account.)
[Main GAO Glossary Entry is Obligational Authority: The GAO Glossary has no separate main entry for Unobligated Balance. The above description is an excerpt from the entry for Obligational Authority.]
Principles of Federal Appropriations Law
Annual appropriations that are unobligated at the end of the fiscal year for which they were appropriated are said to “expire” for obligational purposes.46 In other words, they cease to be available for the purposes of incurring and recording new obligations. The same principle applies to multiple year appropriations as of the end of the last fiscal year for which they were provided. For purposes of this discussion, annual and multiple year appropriations are referred to cumulatively as “fixed appropriations.” 31 U.S.C. § 1551(a)(3).
The portion of an appropriation that has not actually been spent at the end of the fiscal year (or other definite period of availability) is called the “unexpended balance.”47 It consists of two components—the obligated balance and the unobligated balance.
The obligated balance is defined as “the amount of unliquidated obligations applicable to the appropriation less amounts collectible as repayments to the appropriation.” 31 U.S.C. § 551(a)(1). Restated, obligated balance means the amount of undisbursed funds remaining in an appropriation against which definite obligations have been recorded.
The unobligated balance is “the difference between the obligated balance and the total unexpended balance.” Id. at § 1551(a)(2). It represents that portion of the unexpended balance unencumbered by obligations recorded under 31 U.S.C. § 1501.
46 The term “lapse” was sometimes mistakenly used in this context although there was an important distinction. Generally, under prior law an appropriation “lapsed” when it ceased to be available to the agency to pay obligations that were in the first instance incurred and properly charged against the appropriation prior to its lapse. Today we refer to this as a “closed” appropriation account.
47 Depending on the specific context in which the term is used, “unexpended balance” may refer to the entire undisbursed balance or to the unobligated balance only. 22 Comp. Gen. 59 (1942). We use it here in the broader sense.
U.S. Government Accountability Office, Principles of Federal Appropriations Law, Third Edition, Volume I,, ch. 5, GAO-04-261SP, January. 2004), pp. 5-67 – 5-68.
OMB Circular No. A–11
[The below is an excerpt from OMB Circular No. A-11]
Preparation, Submission, and Execution of The Budget
Executive Office of the President Office of Management and Budget July 2017
(f) Unobligated balance
An unobligated balance consists of the cumulative amount of budget authority that remains available for obligation under law in unexpired accounts. This means that, unless the law expressly provides otherwise, rescissions and cancellations of unobligated balances apply only to unexpired amounts. In cases where rescissions or cancellations are determined to apply to expired amounts, such amounts would not count as discretionary offsets for appropriations.
In budget execution, both the unexpired, unobligated balances of budget authority at the start of the year, (which is available for new obligations) and the expired amounts (which are only available to cover upward adjustments to prior year obligations) are reported as budgetary resources.
In budget formulation, only the unexpired, unobligated balances brought forward are reported; expired balances available for adjustment only are not included. Unobligated balances carried forward must meet all of the following conditions:
– They are balances of budget authority that have never been obligated or that have been obligated and deobligated;
– They are balances of budget authority that do not expire at the end of the fiscal year;
– They do not include any amounts for: (1) indefinite appropriations, except available special and trust fund receipts; (2) indefinite borrowing authority; or (3) indefinite contract authority; and
The amount can be quantified by subtracting the obligations to date from the amount of budget authority provided (new budget authority and unobligated balances carried forward at the start of the year from the previous fiscal year). That is, the law providing the budget authority must have specified a definite amount or an indefinite amount based on the appropriation of collections from a specified source. “Such sums as may be necessary” cannot be quantified.
Unavailable special and trust fund receipts or unavailable offsetting collections should not be counted as budget authority and, therefore, there should be no unobligated balances as a result of them. Unavailable receipts are included in the special and trust fund receipts schedule (see section 86.4); unavailable offsetting collections are presented as a memorandum entry in the program and financing schedule (see section 82.18).
In budget schedules, such as the program and financing schedule, the unobligated balance carried forward at the end of a year is equal to the unobligated balance at the start of the next year.
The unobligated balances you report for the start and end of the past year must be consistent with the amounts reported in GTAS (see sections 82.11 and 82.12).
Page 18 of Section 20
OMB Circular No. A–11