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	4Listing of USSGL Accounts Used in Definite Contract Authority Scenario	5Scenario 1:  Definite Contract Authority	6Scenario 2:   Indefinite Contract Authority Liquidated by an Appropriation from the General Fund	40Listing of USSGL Accounts Used in Indefinite Contract Authority Scenario	41

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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  Authority is realized at the beginning of the program and carried forward until the authority is rescinded or completely consumed or until the program is terminated, whichever comes first.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.   

NOTE: This scenario is not applicable to contract authority liquidated by appropriations derived from trust non-revolving funds.

# 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

· This scenario is not applicable to contract authority liquidated by appropriations derived from trust non-revolving fund receipts.

Definite Contract Authority – Year 1

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 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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