Expired Appropriations

Pursuant to a congressional request, GAO examined the Department of Defense's (DOD) use of expired appropriations, focusing on the: (1) growth and size of the M accounts and the merged surplus authority through September 30, 1990; (2) use of such accounts by the Army, Navy, and Air Force to fund upward adjustments of contract costs; and (3) extent to which that use satisfies all legal requirements.

GAO found that: (1) between 1980 and 1990, the services' combined M accounts grew from $2.7 billion to $18.8 billion, and the merged surplus authority grew from $5.2 billion to $27 billion; (2) contract cost overruns, the settlement of contractors' claims, and the funding of contingent liability from expired budget authority accounted for over half of the expired budget authority requested; (3) between fiscal years 1985 and 1989, certain programs made multiple requests for large amounts of expired and lapsed budget authority to fund upward adjustments of previously obligated budget authority; (4) legislation limited the requirement that DOD notify Congress before using expired budget authority to make large upward adjustments to contract costs; (5) of the 18 upward adjustments GAO studied, 9 were proper, 3 were improper, and the remaining 6 were necessitated by poor management practices; (6) new legislation will phase out existing M accounts, eliminate merged surplus authority, and make expired appropriations available to agencies for a finite period; and (7) such actions will increase the need for agencies to improve their management and control over the use of expired appropriations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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