B-13930, July 10, 1941, 21 COMP. GEN. 1162

B-13930, July 10, 1941, 21 COMP. GEN. 1162

GENERAL ACCOUNTING OFFICE BULLETIN NO. 1, MODIFIED AND AMENDED

July 10, 1941 To the Heads of All Departments and Establishments:

Pursusut to the provisions of section 309 of the Budget and Accounting Act, approved June 10, 1921, 42 Stat. 25, there was prescribed by the Comptroller General of the United States Bulletin No. 1 containing a "Classification of Objects of Expenditure" for use in the several departments and establishments of the Government of the United States for the purpose of obtaining uniformity in administrative appropriation and fund accounting and in the analysis of governmental expenditures for the information of the President, the Congress, and such agencies of the Government as are required to deal with governmental expenditures.

In Regulation No. 1, dated June 28, 1941, relating to apportionments and reports on status of appropriations, under Executive Order No. 8512 of August 13, 1940, the Acting Secretary of the Treasury and the Director of the Bureau of the Budget have prescribed a "Classification of Obligations According to Objects," which is to be utilized in submitting estimates to the Bureau of the Budget and in reporting data under Executive Order No. 8512 whenever analyses by objects are required.

Accordingly, the Classification of Objects of Expenditure, as set forth in General Accounting Office Bulletin No. 1 hereinabove referred to, will be discontinued concurrently with the adoption of the "Classification of Obligations According to Objects," as set forth in Part V of the said Regulation No. 1, for classifying expenditures in support of estimates and other budgetary reports and in allotting appropriations.

Whenever practicable, the agencies should maintain their records so that the data required by the Bureau of the Budget may be obtained directly therefrom. However, in those instances where the information cannot be taken directly from the allotment (ledger) accounts, then the source of postings to such accounts, should be so segregated as to furnish the required data. For example, on the documents from which are posted obligations incurred for personal services, rental contracts, travel orders, etc., which are required to be recorded to the allotment accounts for the full period for which the allotments are made, there can be readily shown the amounts for each month.

Since the term "encumbrances," heretofore used in appropriation accounting, has been interpreted by some of the Federal agencies as permitting (or inviting) the inclusion of reservations for special purposes, functions, or projects to be subsequently undertaken, it is deemed necessary to substitute therefor the term "obligations" which is more generally understood as being those transactions for which the appropriations (allotments) are definitely committed by the action of an administrative officer in the employment of persons, the directing of travel, the transportation of things, the entering into rental and service contracts, the issuance of purchase orders, etc. It is believed that much confusion will be avoided if the term "obligations" is used exclusively with the allotment accounts. As the obligations accrue they would, of course, become "liabilities" or "expenditures" in the proprietary group of accounts. Accordingly, the Public Printer has been requested in letter of even date to revise the applicable columnar headings of the several standard forms of allotment ledgers, copies, and registers on the next reprints to "Obligations Incurre" and "Unobligated Balance of Allotment." The present supply of such forms with corrections made thereon by pen, rubber stamp, or otherwise, should be exhausted before requisitioning the revised forms.

Lindsay C. Warren Comptroller General of the United States