Budget Authority for Foreign Military Sales

Budget authority is a broad concept which should express fully the spending authority made available by law. Where feasible, budget authority should represent the maximum potential obligations which may be incurred under new authority. The Foreign Military Sales (FMS) budget authority for a given year is defined as the estimated fully funded cost of the goods and services which the government has agreed during that year to deliver at some time and represents the total amount of obligations the government estimates it will incur in purchasing and delivering the items. Prior to fiscal year 1977, budget authority for FMS was based on the dollar total of new acceptances, and there were annual recordings in the budget of billions of dollars of unobligated FMS budget authority which represented cumulative acceptances that had not yet resulted in implementing obligations. Since 1977, FMS budget authority, for a given year, has been defined as equal to the portion of old and new acceptance which will result in implementing obligations during the year. FMS budget authority, since 1977, has not shown the full amount of new acceptances. The change in definition of FMS budget authority was inappropriate, contrary to the usual meaning of budget authority, and results in recordings that do not show the true authority conferred on the executive branch for obtaining the items specified in new acceptances. FMS budget authority should be based on the dollar total of new acceptances, representing the full cost of FMS items which the government has agreed to obtain and deliver.