CONTRACT AUTHORITY LIQUIDATED BY APPROPRIATIONS (DERIVED FROM THE GENERAL FUND OF THE U.S. GOVERNMENT)

EFFECTIVE FISCAL 2021

CONTRACT AUTHORITY LIQUIDATED BY APPROPRIATIONS (DERIVED FROM THE GENERAL FUND OF THE U.S. GOVERNMENT)

EFFECTIVE FISCAL 2021

CONTRACT AUTHORITY LIQUIDATED BY APPROPRIATION (DERIVED FROM THE GENERAL FUND OF THE U.S. GOVERNMENT)

EFFECTIVE FISCAL 2021

PREPARED BY:

GENERAL LEDGER AND ADVISORY BRANCH

FISCAL ACCOUNTING OPERATIONS

BUREAU OF THE FISCAL SERVICE

U.S. DEPARTMENT OF THE TREASURY

Table of ContentsBackground	4New or Revised USSGL Account Definitions (Effective FY 2021)	5New or Revised USSGL Transactions (Effective FY 2021)	6Attribute Table:	10Listing of USSGL Accounts Used in This Scenario	11Scenario 1:  Definite Contract Authority	12Scenario 2:   Indefinite Contract Authority Liquidated by an Appropriation from the General Fund	43Listing of USSGL Accounts Used in Indefinite Contract Authority Scenario	44

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# Background

Agencies may have statutory authority allowing them to enter into contracts or incur obligations prior to an appropriation (or the realization of revenues) for the payment of obligations.  This authority may be current or permanent, with or without fiscal year limitation, and definite or indefinite in amount.  An agency may not make expenditures to liquidate obligations incurred by (its) contract authority until Congress specifically appropriates funds or until funds otherwise become available for payment of the obligations.  	

Contract authority means specific statutory authority that permits an agency to incur obligations in advance of an appropriation of the cash to make outlays to liquidate the obligations.   Contract authority is unfunded, and a subsequent appropriation or offsetting collection is needed to liquidate the obligations.  Typically, a law requires an agency to seek a subsequent appropriation of the liquidating cash.   This type of appropriation does not provide new authority to incur obligations, so it is not counted as budget authority.  

In a few cases, a law provides contract authority in order to allow an agency to incur obligations in anticipation of offsetting collections.  When an agency receives collections, the agency uses them to liquidate the obligations. 

Contract authority is composed of two authority types:

· *Definite contract authority*, where a law provides a specific amount of authority that cannot be exceeded.  Authority is realized at the beginning of the program and carried forward until the authority is rescinded or completely consumed or until the program is terminated, whichever comes first.  

· *Indefinite contract authority*, where the amount of authority is not predetermined, and authority is available as needed to cover obligations incurred.   

# New or Revised USSGL Account Definitions (Effective FY 2021)

New:

**Account Title:**Current-Year Definite Contract Authority  

**Account Number:**413120

**Normal Balance:**Debit 

Definition: The amount of new definite contract authority to incur obligations in advance of a separate appropriation of liquidating cash or collections.  

Justification: Separate current-year definite contract authority from current-year indefinite contract authority.

**Deleted:**

**Account Title:**Estimated Indefinite Contract Authority 

**Account Number:**403200 

**Normal Balance:**Debit 

**Definition:**The estimated amount of indefinite contract authority during the fiscal year that permits a Federal agency to incur obligations in advance of liquidating authority.

**Justification:  Based on USSGL account changes related to contract authority, there is no need to have an estimate for indefinite contract authority.**

**Modification:**

**Account Title:**Current-Year Indefinite Contract Authority ~~Realized~~

**Account Number:**413100 

**Normal Balance:**Debit 

**Definition:**The amount of new indefinite contract authority to incur obligations in advance of a separate appropriation of liquidating cash or collections.

Justification: Separate current-year indefinite contract authority from current-year definite contract authority.

# New or Revised USSGL Transactions (Effective FY 2021)

Delete:

A168 To record the realization of contract authority that was previously anticipated. 

Comment: When contract authority is estimated, the actual contract authority is realized based on the amount obligated. Also post USSGL TC-B306. 

Reference: USSGL implementation guidance; Contract Authority Case Studies 

Budgetary Entry 

Debit 413100 Current-Year Contract Authority Realized 

   Credit 403200 Estimated Indefinite Contract Authority 

Proprietary Entry 

None

A176 To record the anticipated indefinite contract authority to cover anticipated obligations for the current year. 

Reference: USSGL implementation guidance; Contract Authority Case Studies 

Budgetary Entry 

Debit 403200 Estimated Indefinite Contract Authority 

   Credit 445000 Unapportioned Authority 

   Credit 462000 Unobligated Funds Exempt From Apportionment 

Proprietary Entry 

None

Modifications:

A166 To record definite and indefinite contract authority based on legislation. 

~~Reference: USSGL implementation guidance; Contract Authority Case Studies~~

Budgetary Entry 

Debit 413100 Current-Year Indefinite Contract Authority ~~Realized~~

Debit 413120 Current-Year Definite Contract Authority 

   Credit 445000 Unapportioned Authority 

   Credit 462000 Unobligated Funds Exempt From Apportionment 

Proprietary Entry 

None

A174 To record an unanticipated actual decrease to indefinite contract authority. 

Comment: For the reduction of unobligated balances for indefinite contract authority, record the yearend preclosing USSGL TC-F112. 

~~Reference: USSGL implementation guidance; Contract Authority Case Studies~~

Budgetary Entry 

Debit 445000 Unapportioned Authority 

Debit 462000 Unobligated Funds Exempt From Apportionment 

   Credit 413300 Decreases to Indefinite Contract Authority 

Proprietary Entry 

None

Modifications to Closing TCs:

F112 To record adjustments for anticipated resources not realized. 

Comment: Balance in the anticipated accounts must be zero at yearend. 

Budgetary Entry 

Debit 405000 Anticipated Reductions to Appropriations by Offsetting Collections or Receipts 

~~Debit 413100 Current-Year Indefinite Contract Authority Realized~~

~~Debit 414100 Current-Year Indefinite Borrowing Authority Realized~~

Debit 445000 Unapportioned Authority 

~~Debit 451000 Apportionments~~

Debit 459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment 

Debit 469000 Anticipated Resources - Programs Exempt From Apportionment 

~~Credit 403200 Estimated Indefinite Contract Authority~~

~~Credit 404200 Estimated Indefinite Borrowing Authority~~

   Credit 406000 Anticipated Collections From Non-Federal Sources 

   Credit 407000 Anticipated Collections From Federal Sources 

   Credit 412000 Anticipated Indefinite Appropriations 

   Credit 421000 Anticipated Reimbursements and Other Income 

   Credit 421500 Anticipated Expenditure Transfers from Trust Funds 

   Credit 431000 Anticipated Recoveries of Prior-Year Obligations 

   Credit 445000 Unapportioned Authority 

   Credit 469000 Anticipated Resources – Programs Exempt From Apportionment

Proprietary Entry 

None

F113 To record the reduction of unobligated balances for indefinite contract or indefinite borrowing authority at yearend. 

Comment: Unobligated balances for indefinite contract or borrowing authority must be zero at yearend. 

Reference: ~~USSGL implementation guidance;~~~~Contract Authority Case Studies~~

Budgetary Entry 

Debit 445000 Unapportioned Authority 

Debit 451000 Apportionments 

Debit 461000 Allotments - Realized Resources 

Debit 462000 Unobligated Funds Exempt From Apportionment 

Debit 470000 Commitments - Programs Subject to Apportionment 

Debit 472000 Commitments - Programs Exempt From Apportionment 

   Credit 404800 Anticipated Transfers to the General Fund of the U.S. Government - Prior-Year 

   Balances             

   Credit 413300 Decreases to Indefinite Contract Authority 

   Credit 414300 Current-Year Decreases to Indefinite Borrowing Authority ~~Realized~~

Proprietary Entry

None

F304 To record the closing of fiscal-year contract authority. 

Budgetary Entry 

Debit 413200 Substitution of Contract Authority 

Debit 413300 Decreases to Indefinite Contract Authority 

Debit 413400 Contract Authority Withdrawn 

Debit 413415 Adjustment for Definite Contract Authority – Prior-Year

Debit 413500 Contract Authority Liquidated 

Debit 413900 Contract Authority Carried Forward 

Debit 439200 Permanent Reduction - New Budget Authority 

Debit 439300 Permanent Reduction - Prior-Year Balances 

   Credit 413100 Current-Year Indefinite Contract Authority ~~Realized~~

   Credit 413120 Current-Year Definite Contract Authority    

   Credit 413900 Contract Authority Carried Forward 

Proprietary Entry 

None

# Attribute Table:

# Listing of USSGL Accounts Used in Definite Contract Authority Scenario 

# Scenario 1:  Definite Contract Authority 

This scenario includes entries to satisfy the basic transactions for definite contract authority liquidated by an appropriation from the General Fund.  This scenario represents 2 years of activity for which an appropriation provides the amount used to liquidate definite contract authority.    

The following accounts will be used in this scenario. Refer to the U.S. Government Standard General Ledger for accounts, account descriptions, accounting transactions and crosswalks reports (https://tfm.fiscal.treasury.gov/v1/supplements/ussgl.html).  In addition, each transaction in the scenario is coded with transaction numbers identified in Section III of the USSGL. 

Definite Contract Authority Scenario Assumptions:

· The GTAS BEA Category Indicator attribute for illustration purposes is mandatory

· This is a no year TAS

· The Apportionment Category Code attribute for illustration purposes is Category B

Definite Contract Authority – Year 1

Definite Contract Authority – Year 1

Definite Contract Authority – Year 1

Definite Contract Authority – Year 1

Definite Contract Authority 

Pre-Closing Trial Balance - Year 1

Definite Contract Authority Financial Statements – Year 1

Definite Contract Authority Financial Statements – Year 1

Definite Contract Authority Financial Statements – Year 1

Definite Contract Authority Financial Statements – Year 1

Definite Contract Authority Financial Statements – Year 1

Definite Contract Authority Reclassified Financial Statements – Year 1:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario. 

Definite Contract Authority Closing Entries – Year 1

Definite Contract Authority Closing Entries – Year 1

Definite Contract Authority Closing Entries – Year 1

Definite Contract Authority

Post-Closing Trial Balance - Year 1

Definite Contract Authority – Year 2

Definite Contract Authority – Year 2

Definite Contract Authority – Year 2

Definite Contract Authority – Year 2

Definite Contract Authority – Year 2

Definite Contract Authority 

Pre-Closing Trial Balance-Year 2

Definite Contract Authority Financial Statements – Year 2:

Definite Contract Authority Financial Statements – Year 2

Definite Contract Authority Financial Statements – Year 2

Definite Contract Authority Financial Statements – Year 2

Definite Contract Authority Financial Statements – Year 2

Definite Contract Authority Reclassified Financial Statements – Year 2:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario.

Definite Contract Authority Closing Entries – Year 2

Definite Contract Authority Closing Entries – Year 2

Definite Contract Authority Closing Entries – Year 2

Definite Contract Authority 

Post-Closing Trial Balance - Year 2

# Scenario 2:   Indefinite Contract Authority Liquidated by an Appropriation from the General Fund

This scenario includes entries to satisfy the basic transactions for indefinite contract authority liquidated by an appropriation from the General Fund. This scenario represents 3 years of activity.  In each year, the agency anticipates contract authority and later receives an appropriation of liquidating cash to pay the obligation.   For indefinite authority at year end, the agency will adjust the unobligated balances to zero. 

The following accounts will be used in this scenario.  Refer to the U.S. Government Standard General Ledger for accounts, account descriptions, accounting transactions and crosswalks reports (https://tfm.fiscal.treasury.gov/v1/supplements/ussgl.html). In addition, each transaction in the scenario is coded with transaction numbers identified in Section III of the USSGL. 

# Listing of USSGL Accounts Used in Indefinite Contract Authority Scenario 

Indefinite Contract Authority Scenario Assumptions:

· The GTAS BEA Category Indicator attribute for illustration purposes is mandatory.

· This is a no year TAS.

· The Apportionment Category Code attribute for illustration purposes is Category B.

Indefinite Contract Authority – Year 1

Indefinite Contract Authority – Year 1

Indefinite Contract Authority – Year 1

Indefinite Contract Authority – Year 1

Indefinite Contract Authority 

Pre-Closing Trial Balance Year 1

Indefinite Contract Authority Financial Statements – Year 1:

Indefinite Contract Authority Financial Statements – Year 1:

Indefinite Contract Authority Financial Statements – Year 1:

Indefinite Contract Authority Financial Statements – Year 1:

Indefinite Contract Authority Financial Statements – Year 1:

Indefinite Contract Authority Reclassified Financial Statements – Year 1:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario. 

Indefinite Contract Authority Closing Entries – Year 1

Indefinite Contract Authority Closing Entries – Year 1

Indefinite Contract Authority Closing Entries – Year 1

Indefinite Contract Authority 

Post-Closing Trial Balance - Year 1

Indefinite Contract Authority – Year 2

Indefinite Contract Authority – Year 2

Indefinite Contract Authority – Year 2

Indefinite Contract Authority – Year 2

Indefinite Contract Authority – Year 2

Also Post:

Indefinite Contract Authority 

Pre-Closing Trial Balance Year 2

Indefinite Contract Authority Financial Statements – Year 2:

Indefinite Contract Authority Financial Statements – Year 2:

Indefinite Contract Authority Financial Statements – Year 2:

Indefinite Contract Authority Financial Statements – Year 2:

Indefinite Contract Authority Reclassified Financial Statements – Year 2:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario. 

Indefinite Contract Authority Closing Entries- Year 2

Indefinite Contract Authority Closing Entries- Year 2

Indefinite Contract Authority Closing Entries- Year 2

Indefinite Contract Authority Closing Entries- Year 2

Indefinite Contract Authority 

Post-Closing Trial Balance

 Year 2

Indefinite Contract Authority – Year 3

Indefinite Contract Authority – Year 3

Indefinite Contract Authority – Year 3

Indefinite Contract Authority – Year 3

Indefinite Contract Authority 

Pre-Closing Trial Balance Year 3

Indefinite Contract Authority Financial Statements – Year 3:

Indefinite Contract Authority Financial Statements – Year 3:

Indefinite Contract Authority Financial Statements – Year 3:

Indefinite Contract Authority Financial Statements – Year 3:

Indefinite Contract Authority Financial Statements – Year 3:

Indefinite Contract Authority Reclassified Financial Statements – Year 3:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario. 

Indefinite Contract Authority Closing Entries– Year 3

Indefinite Contract Authority Closing Entries– Year 3

Indefinite Contract Authority Closing Entries– Year 3

Indefinite Contract Authority 

Post-Closing Trial Balance - Year 3

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