[Fiscal Year Appropriations Chargeable for Contract Modifications]

B-202222: Aug 2, 1983

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The Department of the Interior requested reconsideration of a GAO decision which held that the fiscal year (FY) 1981 appropriation should be charged for the costs of a modification to a contract between the Youth Conservation Corps (YCC) and a school district. GAO also concluded that the supplemental agreements were made before the 1981 appropriation was enacted and, therefore, were in violation of the Antideficiency Act which forbids the incurring of obligations in advance of appropriations. The contract modification required new services to be performed during the extension period, creating a new contract, albeit related to the first. GAO concluded that, since Interior could not have a bona fide need in 1980 for the modified services because they were not performed until 1981, they were chargeable to the 1981 appropriation. In requesting reconsideration, Interior contended that the YCC authorizing statute provided that funds appropriated for any FY would remain available for obligation for 2 years. Although the FY 1980 appropriation limited the availability of its funds for obligation to FY 1980, it did not restrict the period of availability for expenditure. Therefore, Interior argued that, as long as the funds were obligated before the end of FY 1980, their expenditures in FY 1981 were authorized. After reviewing the previous decision and considering the arguments presented by Interior, GAO could find no basis for changing the earlier decision. GAO found the Interior argument that the funds were restricted only for obligation purposes to FY 1981 to be without merit. If appropriations are not available to incur an obligation, neither are they available to liquidate it. Since the performance of services in FY 1981 did not represent a bona fide need of 1980, the contract modification could not obligate funds available for FY 1980. The obligation should have been charged to FY 1981 funds. Accordingly, the prior decision was affirmed.

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