Use of M Accounts and Related Merged Surplus Authority in the Department of Defense

The Senate Committee on Governmental Affairs requested information relative to the large merged surplus authority balances reported by the Department of Defense at the end of fiscal year 1979. Five specific questions were addressed.

The first question concerned whether Congress could use some of the merged surplus authority to meet the current DOD budget requests. Once an appropriation has expired, it is no longer available for obligation. Any unobligated balance in such an appropriation is then withdrawn and returned to its source. These withdrawn balances constitute the merged surplus as opposed to the merged obligated balances known as M accounts. To make expired unobligated balances available again is generally prohibited unless released by an act of Congress. The second question concerned what would constitute a reasonable amount that should remain in a merged surplus account and for what length of time it should remain in that account. A feasible method of reducing the merged surplus authority balance is to eliminate any amount which has been in the merged surplus authority balance 3 years or more. This approach would leave a sufficient amount to cover restorations that may be needed by an agency. The third question concerned significant violations of the merged surplus authority balances within DOD. The reviews initiated by GAO disclosed no evidence of significant misuses of the M account or merged surplus authority balance. The fourth question concerned the proposals made by GAO for limiting and controlling use of merged surplus authority balances. This is a long term objective which agencies must individually consider. The last question was whether the Treasury was required to keep records on these accounts. The agencies alone are reponsible for such records.