In federal budgeting, the period of availability in federal appropriations is the time window Congress sets for an agency to enter new financial obligations against a given pot of money. Most appropriations last a single fiscal year (October 1 through September 30), but Congress can authorize longer periods or leave funds available until spent.1Congressional Research Service. Basic Federal Budgeting Terminology Once that window closes, the agency loses its authority to commit those dollars to any new contract or purchase, and mishandling the deadline can trigger administrative discipline or criminal penalties under the Antideficiency Act.
How Long an Appropriation Lasts
Congress chooses among three funding structures, and the choice controls everything else. The default rule presumes a single fiscal year unless the appropriation act expressly says otherwise.2U.S. Government Accountability Office. GAO-16-464SP, Principles of Federal Appropriations Law If the law is silent on duration, treat the money as annual.
Annual (one-year) appropriations are the most common. Funds are available for obligation only during the fiscal year named in the act. Anything not committed by September 30 can no longer support new contracts or purchases.1Congressional Research Service. Basic Federal Budgeting Terminology
Multi-year appropriations stay available for a defined period longer than one fiscal year, such as two or five years. The extended window has to appear in the appropriation language itself. Complex acquisitions like weapons systems and large research programs often use this structure because the work cannot realistically be contracted inside twelve months.
No-year appropriations remain available until spent or until the purpose is fulfilled, with no calendar deadline. Appropriation acts signal this with wording like “to remain available until expended.” Construction projects and emergency response programs frequently receive no-year funding.3Treasury Financial Experience. No-year Appropriations
The Bona Fide Needs Rule
The calendar is only half the constraint. A time-limited appropriation is available only for expenses properly incurred during its period of availability, or to finish contracts properly made within that window. That principle is codified at 31 U.S.C. § 1502(a).4Office of the Law Revision Counsel. 31 USC 1502 – Balances Available Put plainly: you cannot use this year’s money to stockpile goods for a need that clearly belongs to next year. The rule turns on whether a service is severable or non-severable.
Severable Services
A severable service delivers independent value in each installment. Janitorial work, grounds maintenance, and security monitoring are the classic examples. Each day or week stands on its own, so each increment is its own “need” and should be funded by the appropriation current when the service is performed.
Congress carved out a practical exception. Under 41 U.S.C. § 3902, an agency head can enter into a severable services contract that begins in one fiscal year and ends in the next, so long as the base contract period does not exceed twelve months.5Office of the Law Revision Counsel. 41 USC 3902 – Severable Services Contracts for Periods Crossing Fiscal Years The full contract amount can be obligated from the fiscal year’s funds available at award. A ten-month janitorial contract starting in June can be fully funded with the current year’s appropriation even though most of the work happens in the next fiscal year.
Non-Severable Services
A non-severable service is a single unified deliverable where the agency receives no meaningful benefit until the whole job is done. A technical report, a custom software application, or an engineering study fit here. The full cost is charged to the appropriation available when the contract is awarded, and it does not matter if the contractor finishes in a later fiscal year. The need existed at signing, and that controls the funding. Misclassifying a unified deliverable as severable and splitting the funding across two fiscal years can produce an improper obligation, because the portion charged to the second year may violate the bona fide needs rule.
Recognized Exceptions to the Bona Fide Needs Rule
The Government Accountability Office recognizes a small set of situations where current-year funds can legitimately cover needs extending into the next fiscal year. Two come up regularly.
The lead-time exception lets an agency use current-year funds to order materials for the next fiscal year when those materials will not be available on the open market at the time they are actually needed. The gap between order and delivery has to be necessary for manufacturing or production.6U.S. Government Accountability Office. B-130815, September 3, 1957, 37 Comp. Gen. 155 Specialized lab equipment with a nine-month build cycle can be obligated against this year’s funds for delivery next year, because waiting until October to order would mean the equipment arrives too late to be useful.
The stock-level exception permits replenishing standard supplies with current-year funds even if the items will not be consumed until the following year. GAO allows this for readily available, common-use items when the quantity and delivery timeline are reasonable.7U.S. Government Accountability Office. B-336373, Architect of the Capitol – Bona Fide Need for End-of-Year Purchase of Supplies An office that goes through printer toner at a steady rate can reorder at the end of August without worrying that some cartridges sit unused past September 30.
Documenting an Obligation Before the Window Closes
An obligation is not legally recorded just because someone decided to spend money. Under 31 U.S.C. § 1501, agencies need specific documentary evidence proving the government has entered into a binding commitment before the appropriation runs out.8Office of the Law Revision Counsel. 31 USC 1501 – Documentary Evidence Requirement for Government Obligations The statute recognizes several categories:
- Binding written agreements: a signed contract or purchase order for goods, real property, or services, executed before availability expires.
- Loan agreements showing the loan amount and repayment terms.
- Mandatory orders placed with another agency as required by law, or orders issued under emergency or simplified acquisition authority.
- Grants and subsidies awarded under statutory formulas or authorized agreements.
- Liabilities that may result from pending litigation against the government.
- Personnel services and authorized travel expenses.
- Obligations for public utilities like electricity and water.
In practice, contracting officers use standardized forms. Standard Form 1449 is prescribed for solicitations and contracts involving commercial products and services.9Acquisition.GOV. Federal Acquisition Regulation Part 53 – Forms GSA Form 300 serves as a multipurpose order form for supplies and services, including orders under existing contracts and blanket purchase agreements.10Acquisition.GOV. GSAM Part 513 – Simplified Acquisition Procedures Every form ties the obligation to a specific appropriation code identifying the Treasury account, fiscal year, and program. The records have to be finalized before midnight on the last day of the availability period. A purchase order signed on October 1 cannot be backdated to obligate the prior fiscal year’s funds.
What Happens After the Period of Availability Ends
The end of availability does not mean every dollar vanishes overnight. Federal law creates a structured wind-down in two phases.
The Five-Year Expired Phase
When a fixed appropriation’s obligation period ends, the account enters a five-year expired phase. During this window the funds keep their fiscal year identity and remain available for three narrow purposes: recording adjustments to existing obligations, liquidating those obligations by paying invoices, and correcting errors.11Office of the Law Revision Counsel. 31 USC 1553 – Availability of Appropriation Accounts to Pay Obligations What the agency cannot do is use expired funds to sign new contracts or expand existing ones beyond their original scope. A contractor’s legitimate invoice for work performed under a properly obligated contract can still be paid. A new procurement, even one serving the same program, requires current-year money.
Funds de-obligated during the expired phase, say because a contract came in under budget or was canceled, do not become available for new obligations. They can cover upward adjustments on other existing obligations within the same account, but they cannot be swept into a fresh contract.
Within-scope modifications during the expired phase also carry approval thresholds. If contract changes for a single program exceed $4 million in a fiscal year, the agency head must personally approve the obligation. If they exceed $25 million, the agency must notify the relevant congressional committees and wait 30 days before proceeding.11Office of the Law Revision Counsel. 31 USC 1553 – Availability of Appropriation Accounts to Pay Obligations
Account Closure and the One Percent Rule
On September 30 of the fifth fiscal year after the obligation period ended, the account closes permanently. Any remaining balance, obligated or not, is canceled and returned to the Treasury.12Office of the Law Revision Counsel. 31 USC 1552 – Procedure for Appropriation Accounts Available for Definite Periods The account cannot be reopened.
Legitimate invoices sometimes surface after closure. Under 31 U.S.C. § 1553(b), agencies can charge these late-arriving obligations to any current appropriation available for the same purpose, but the total charges against the current account for this purpose cannot exceed one percent of that account’s total appropriations.11Office of the Law Revision Counsel. 31 USC 1553 – Availability of Appropriation Accounts to Pay Obligations The cap protects current programs from being drained by old debts, and it means very large unpaid obligations from a canceled account can create real budget problems.
Antideficiency Act Penalties for Missing the Window
The consequences for obligating funds after availability expires are not hypothetical. The Antideficiency Act, at 31 U.S.C. § 1341, prohibits any federal officer or employee from making or authorizing an obligation that exceeds the amount available in an appropriation, or from committing the government to a contract before an appropriation has been made to cover it.13Office of the Law Revision Counsel. 31 USC 1341 – Limitations on Expending and Obligating Amounts Obligating funds after the period of availability has expired falls squarely inside this prohibition, because the appropriation is no longer available.
Administrative penalties come first. Any employee who violates the Act is subject to discipline that can include suspension without pay or removal from federal service.14Office of the Law Revision Counsel. 31 USC 1349 – Adverse Personnel Actions If the violation was knowing and willful, criminal penalties apply: a fine of up to $5,000, imprisonment for up to two years, or both.15Office of the Law Revision Counsel. 31 USC 1350 – Criminal Penalty Criminal prosecutions under this statute are rare, but administrative consequences are not.
When a violation is discovered, the agency head must report it to the President (through the Director of OMB), the Speaker of the House, the President of the Senate, and the Comptroller General.16Office of Management and Budget. OMB Circular A-11, Section 145 – Requirements for Reporting Antideficiency Act Violations The report identifies the Treasury account and amount, names the responsible employees, describes the root cause, details any disciplinary action, and explains what the agency is doing to prevent a recurrence. If there is any indication the violation was knowing and willful, the report must confirm referral to the Department of Justice.