Use of FY 1980 Funds for FY 1979 Obligation

The Customs Service requested a decision regarding the propriety of recording an obligation in fiscal year (FY) 1979 when the document providing the basis for the obligation was misplaced and not discovered until the following FY. The obligation was for a construction contract identified as a FY 1979 requirement, but due to a distribution error, the document acknowledging the contract award did not reach the Customs Accounting Division or the contractor until 1980. Customs asked GAO to take into consideration the facts that: the contract was a bona fide FY 1979 need; the award had been executed and the contractor had been notified of it by telephone in 1979; and the use of the amount for the contract in FY 1980 would result in the cancellation of another needed construction project. It was held that since the agency did not mail the acceptance of the awardee's bid prior to the expiration of the period of availability for the obligation, no binding agreement arose in FY 1979 which would provide a basis for recording the obligation against 1979 appropriations. Therefore, FY 1980 funds would have to be used for the contract.