Order Code 98-325 GOV
Updated June 13, 2003
CRS Report for Congress
Received through the CRS Web
The Federal Fiscal Year
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division
The fiscal year is the accounting period of the federal government. It begins on
October 1 and ends on September 30 of the next calendar year. Each fiscal year is
identified by the calendar year in which it ends and commonly is referred to as “FY.” For
example, FY2003 began October 1, 2002, and ends September 30, 2003. For more
i n f o r m a t i o n o n b u d g e t p r o c e s s , s e e
[http://www.crs.gov/products/guides/guidehome.shtml].
Initially, the federal fiscal year coincided with the calendar year. In 1842, President
John Tyler signed legislation changing the fiscal year to a July 1 to June 30 cycle.
Beginning with FY1977, the Congressional Budget Act of 1974 (Section 501 of P.L. 93-
344, currently codified at 31 U.S.C. 1102) changed the fiscal year to its current cycle. In
both instances, the intent was to provide Congress with more time to process
appropriations legislation, particularly to avoid continuing resolutions. Establishing the
most appropriate budget cycle continues to be the subject of some legislative proposals
that would change the current fiscal year to a biennial (two-year) period.
Figure 1. The Fiscal-Year Budgets of a Typical Federal Agency
Implementing FY2003 budget
Seeking funds for FY2004 budget
(congressional phase)
Planning for FY2005 budget

Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb
2002
2003
2004
Calendar year
Federal agencies simultaneously work on three fiscal-year budgets at any given time.
Figure 1 illustrates these three fiscal-year budgets. First, agencies implement budgetary
legislation for the current fiscal year. Second, they support the President’s budget
proposals during congressional consideration of budgetary legislation for the coming
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fiscal year, referred to as the “budget year.” Third, federal agencies develop their budgets
for the following fiscal year, which the President will submit to Congress in February of
the next calendar year. For example, in May 2003, agencies were implementing the
FY2003 budget, seeking funds for the FY2004 budget, and beginning to develop the
FY2005 budget.

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