Expiration and Cancellation of Unobligated Funds
link to page 1 
Updated February 26, 2024
Expiration and Cancellation of Unobligated Funds
Unless Congress chooses to intervene, appropriated funds
Figure 1. Example of the Expiration and Cancellation
that have not been obligated may expire and be cancelled
of Unobligated Funds with a Definite Period of
according to procedures that are outlined in statute.
Availability
Relevant provisions related to the expiration and
cancellation of appropriated funds are found in Title 31 of
the U.S. Code.
Background
The Constitution vests Congress with the authority to levy
taxes, authorize the issuance of debt, and make
appropriations to fund the federal government, which is
collectively known as the power of the purse. Those funds
may be drawn from the Treasury only in consequence of
appropriations made by law.
The President, the Office of Management and Budget
(OMB), and agencies execute the budget in accordance
with the budgetary laws that have been enacted. They
possess limited authority to make spending adjustments
after appropriations and other spending legislation have
been enacted. Budget execution occurs in multiple steps:
• Budget authority is enacted into law by appropriations
legislation. Budget authority provides agencies with the
legal basis to incur obligations.
• Obligations are incurred when agencies enter into
legally binding commitments such as employing
Source: CRS analysis of 31 U.S.C. §§1552-1555.
personnel or awarding contracts for the provision of
goods or services.
Note: This graphic serves as an illustrative example and does not
•
represent a particular appropriations account or appropriated
Outlays are payments made to liquidate these
amount.
obligations.
Accounts with a Definite Period of
After enactment of a particular appropriation into law,
Availability
agencies may obligate and expend funds subject to several
In most cases, appropriated funds may be obligated only
conditions addressed by appropriations statutes. These
during a defined period of availability. One-year funds are
conditions on the availability of appropriations include
appropriations that remain available for obligation for one
•
year. Multiyear funds are appropriations that remain
the time period during which funds are available for
available for obligation for more than one year.
obligation, sometimes referred to as the period of
availability or duration of appropriations;
Expiration of Funds
•
When the defined period of availability for an appropriation
the purpose(s) for which particular funds are
account ends, any remaining funds in the appropriation
appropriated; and
account expire. Expired funds are no longer available for
•
incurring new obligations, because the period of availability
the amount of appropriated funds that may be obligated
has ended (31 U.S.C. §1552). For five fiscal years
and expended.
following the expiration of appropriated funds, the funds
may still be available for the payment of obligations
While executive agencies may have legal discretion to
properly incurred during the period of availability (31
determine how to allocate and obligate the funds available
U.S.C. §1553; see Figure 1). During this five-year period,
to them, they are also legally required to execute spending
additional obligations may be incurred because of contract
legislation as enacted.
changes, which may trigger reporting requirements if the
changes exceed certain thresholds (31 U.S.C. §1553(c)). If
https://crsreports.congress.gov
Expiration and Cancellation of Unobligated Funds
additional obligations are incurred because of contract
Cancellation of Funds
changes that exceed $4 million, then the obligation may be
In the context of appropriations accounts with indefinite
made only if it is approved by the head of the agency or a
periods of availability, the accounts are closed and any
designated officer of the agency. If additional obligations
remaining balance is cancelled if
are incurred because of contract changes that exceed $25
million, then the obligation may not be made until (1) the
1. the head of the agency or the President
head of the agency submits a notice in writing of the intent
determines that the purposes for which
to obligate such funds to the appropriate authorizing
the appropriation was made have been
committees of Congress and the Committees on
carried out, and
Appropriations of the Senate and the House of
2. no disbursement has been made against
Representatives, a description of the legal basis for the
the appropriation for two consecutive
proposed obligation, and the policy reasons for the
fiscal years (31 U.S.C. §1555).
proposed obligation; and (2) a period of 30 days has elapsed
after the notice is submitted.
Considerations for Congress
Congress has demonstrated a sustained interest in executive
After the period of availability for obligation of an
agencies’ execution of enacted budgetary legislation. The
appropriation account ends, the account is subject to any
established process for the expiration and cancellation of
audit requirements, limitations on obligations, or reporting
unobligated funds may raise topics for congressional
requirements that were applicable during the period of
consideration.
availability (31 U.S.C. §1554). The head of each agency is
required to submit a report to Congress, the President, and
For example, Congress may consider if the current
the Secretary of the Treasury detailing unliquidated
reporting requirements for unobligated balances are
obligations, unobligated balances, cancelled balances, and
sufficient for congressional oversight. Congress may further
adjustments made to appropriation accounts after the close
consider if the current amount of time between the
of each fiscal year. To fulfill this requirement, OMB
expiration and cancellation of funds—five years—is
established the SF 133 Report on Budget Execution and
sufficient. Another issue of potential interest to Congress
Budgetary Resources, which can be accessed online via
may be additional obligations that are incurred because of
OMB’s MAX.gov website. In addition, the President
contract changes during the five-year period between the
submits a budget document called Balances of Budget
expiration of funds and the cancellation of funds.
Authority to Congress as a component of the President’s
Specifically, Congress could consider if the statutory
annual budget submission. This document contains the
thresholds provided in Section 1553(c) are satisfactory.
balances of budget authority for the end of the past three
Congress could also consider the potential trade-offs of
fiscal years. These documents are available on the
granting agencies transfer authority to repurpose leftover,
GovInfo.gov website dating back to FY1996.
unobligated funds before they are cancelled.
Cancellation of Funds
On September 30, five fiscal years after the period of
Selected References
availability for an appropriation account ends, the account
31 U.S.C. §§1552-1555
is closed and any remaining balance, whether obligated or
CRS Report R47019, The Executive Budget Process: An Overview,
unobligated, is cancelled. The remaining balance is no
by Dominick A. Fiorentino and Taylor N. Riccard
longer available for obligation or expenditure for any
purpose.
CRS Report R47333, Reporting on Agency Budget Execution:
Processes and Case Study Illustration, by Dominick A. Fiorentino
Accounts with an Indefinite Period of
Availability
In some cases, appropriated funds may also be obligated
during an indefinite period of availability. No-year funds
Taylor N. Riccard, Analyst in Government Organization
are appropriations that have no defined period of
and Management
availability and remain available until expended. The
IF12329
process for cancelling unobligated funds is distinct for an
appropriations account with an indefinite period of
availability. No-year funds do not have an expired phase
before cancellation.
https://crsreports.congress.gov
Expiration and Cancellation of Unobligated Funds
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF12329 · VERSION 3 · UPDATED
Updated February 26, 2024
Expiration and Cancellation of Unobligated Funds
Unless Congress chooses to intervene, appropriated funds
Figure 1. Example of the Expiration and Cancellation
that have not been obligated may expire and be cancelled
of Unobligated Funds with a Definite Period of
according to procedures that are outlined in statute.
Availability
Relevant provisions related to the expiration and
cancellation of appropriated funds are found in Title 31 of
the U.S. Code.
Background
The Constitution vests Congress with the authority to levy
taxes, authorize the issuance of debt, and make
appropriations to fund the federal government, which is
collectively known as the power of the purse. Those funds
may be drawn from the Treasury only in consequence of
appropriations made by law.
The President, the Office of Management and Budget
(OMB), and agencies execute the budget in accordance
with the budgetary laws that have been enacted. They
possess limited authority to make spending adjustments
after appropriations and other spending legislation have
been enacted. Budget execution occurs in multiple steps:
• Budget authority is enacted into law by appropriations
legislation. Budget authority provides agencies with the
legal basis to incur obligations.
• Obligations are incurred when agencies enter into
legally binding commitments such as employing
Source: CRS analysis of 31 U.S.C. §§1552-1555.
personnel or awarding contracts for the provision of
goods or services.
Note: This graphic serves as an illustrative example and does not
•
represent a particular appropriations account or appropriated
Outlays are payments made to liquidate these
amount.
obligations.
Accounts with a Definite Period of
After enactment of a particular appropriation into law,
Availability
agencies may obligate and expend funds subject to several
In most cases, appropriated funds may be obligated only
conditions addressed by appropriations statutes. These
during a defined period of availability. One-year funds are
conditions on the availability of appropriations include
appropriations that remain available for obligation for one
•
year. Multiyear funds are appropriations that remain
the time period during which funds are available for
available for obligation for more than one year.
obligation, sometimes referred to as the period of
availability or duration of appropriations;
Expiration of Funds
•
When the defined period of availability for an appropriation
the purpose(s) for which particular funds are
account ends, any remaining funds in the appropriation
appropriated; and
account expire. Expired funds are no longer available for
•
incurring new obligations, because the period of availability
the amount of appropriated funds that may be obligated
has ended (31 U.S.C. §1552). For five fiscal years
and expended.
following the expiration of appropriated funds, the funds
may still be available for the payment of obligations
While executive agencies may have legal discretion to
properly incurred during the period of availability (31
determine how to allocate and obligate the funds available
U.S.C. §1553; see Figure 1). During this five-year period,
to them, they are also legally required to execute spending
additional obligations may be incurred because of contract
legislation as enacted.
changes, which may trigger reporting requirements if the
changes exceed certain thresholds (31 U.S.C. §1553(c)). If
https://crsreports.congress.gov
Expiration and Cancellation of Unobligated Funds
additional obligations are incurred because of contract
Cancellation of Funds
changes that exceed $4 million, then the obligation may be
In the context of appropriations accounts with indefinite
made only if it is approved by the head of the agency or a
periods of availability, the accounts are closed and any
designated officer of the agency. If additional obligations
remaining balance is cancelled if
are incurred because of contract changes that exceed $25
million, then the obligation may not be made until (1) the
1. the head of the agency or the President
head of the agency submits a notice in writing of the intent
determines that the purposes for which
to obligate such funds to the appropriate authorizing
the appropriation was made have been
committees of Congress and the Committees on
carried out, and
Appropriations of the Senate and the House of
2. no disbursement has been made against
Representatives, a description of the legal basis for the
the appropriation for two consecutive
proposed obligation, and the policy reasons for the
fiscal years (31 U.S.C. §1555).
proposed obligation; and (2) a period of 30 days has elapsed
after the notice is submitted.
Considerations for Congress
Congress has demonstrated a sustained interest in executive
After the period of availability for obligation of an
agencies’ execution of enacted budgetary legislation. The
appropriation account ends, the account is subject to any
established process for the expiration and cancellation of
audit requirements, limitations on obligations, or reporting
unobligated funds may raise topics for congressional
requirements that were applicable during the period of
consideration.
availability (31 U.S.C. §1554). The head of each agency is
required to submit a report to Congress, the President, and
For example, Congress may consider if the current
the Secretary of the Treasury detailing unliquidated
reporting requirements for unobligated balances are
obligations, unobligated balances, cancelled balances, and
sufficient for congressional oversight. Congress may further
adjustments made to appropriation accounts after the close
consider if the current amount of time between the
of each fiscal year. To fulfill this requirement, OMB
expiration and cancellation of funds—five years—is
established the SF 133 Report on Budget Execution and
sufficient. Another issue of potential interest to Congress
Budgetary Resources, which can be accessed online via
may be additional obligations that are incurred because of
OMB’s MAX.gov website. In addition, the President
contract changes during the five-year period between the
submits a budget document called Balances of Budget
expiration of funds and the cancellation of funds.
Authority to Congress as a component of the President’s
Specifically, Congress could consider if the statutory
annual budget submission. This document contains the
thresholds provided in Section 1553(c) are satisfactory.
balances of budget authority for the end of the past three
Congress could also consider the potential trade-offs of
fiscal years. These documents are available on the
granting agencies transfer authority to repurpose leftover,
GovInfo.gov website dating back to FY1996.
unobligated funds before they are cancelled.
Cancellation of Funds
On September 30, five fiscal years after the period of
Selected References
availability for an appropriation account ends, the account
31 U.S.C. §§1552-1555
is closed and any remaining balance, whether obligated or
CRS Report R47019, The Executive Budget Process: An Overview,
unobligated, is cancelled. The remaining balance is no
by Dominick A. Fiorentino and Taylor N. Riccard
longer available for obligation or expenditure for any
purpose.
CRS Report R47333, Reporting on Agency Budget Execution:
Processes and Case Study Illustration, by Dominick A. Fiorentino
Accounts with an Indefinite Period of
Availability
In some cases, appropriated funds may also be obligated
during an indefinite period of availability. No-year funds
Taylor N. Riccard, Analyst in Government Organization
are appropriations that have no defined period of
and Management
availability and remain available until expended. The
IF12329
process for cancelling unobligated funds is distinct for an
appropriations account with an indefinite period of
availability. No-year funds do not have an expired phase
before cancellation.
https://crsreports.congress.gov
Expiration and Cancellation of Unobligated Funds
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF12329 · VERSION 3 · UPDATED