BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2021

BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2022

BORROWING AUTHORITY: DEFINITE AND INDEFINITE	  

EFFECTIVE FISCAL 2022

PREPARED BY:

GENERAL LEDGER AND ADVISORY BRANCH

FISCAL ACCOUNTING OPERATIONS

BUREAU OF THE FISCAL SERVICE

U.S. DEPARTMENT OF THE TREASURY

Contents     Background	4New or Revised USSGL Account Definitions (2021)	5Scenario 1:  Definite Borrowing Authority	9Scenario 2:   Indefinite Borrowing Authority Liquidated by an Appropriation from the General Fund	38

Version Control

BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2022

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                               IRC Handout February 10, 2021	

# Background

Borrowing authority is a type of budget authority that permits obligations and outlays to be financed by borrowing. Usually, the law authorizing the borrowing specifies that you must borrow from the Treasury, but in a few cases, it authorizes borrowing directly from the public. Laws usually authorize borrowing for business-like operations. Such laws require the program to repay the borrowing, with interest, out of business proceeds.[footnoteRef:1] In rare instances, usually based on an appropriation or authorizing language, an agency may use an appropriation to liquidate obligations that were initially incurred against authority to borrow when the borrowing was not exercised. [1:  OMB Circular No. A-11, paragraphs 20.3 and 20.4] 

Borrowing authority is composed of two authority types:

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  Authority is realized at the beginning of the program and carried forward until the authority is rescinded, completely consumed, or until the program is terminated, whichever comes first.  

· *Indefinite borrowing authority*, where the amount of authority is not pre-determined and authority is available as needed to cover obligations incurred.   

Proposed USSGL Account to be Voted on In May 2021 (Effective FY 2022):

**Account Title:**Actual Repayment of Borrowing Authority Converted to Cash - Prior-Year Balances  

**Account Number:**414202 

**Normal Balance:**Credit 

Definition: Amounts transferred to the General Fund of the U.S. Government by a non-expenditure transfer of prior-year balances for unused or excess borrowing amounts to repay debt. The prior-year definite borrowing authority has been exercised but has not been used to liquidate obligations.

Justification: Separate prior-year repayment of borrowing authority converted to cash from current-year repayment of borrowing authority converted to cash.

# 

# New or Revised USSGL Account Definitions (2021)

New:

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

**Account Number:**414120

**Normal Balance:**Debit 

Definition: The amount of new definite borrowing authority available to obligate.  Once obligated, the amount is available to be exercised and converted to cash based on monies borrowed from the Bureau of the Fiscal Service or Federal Financing Bank in order to liquidate unpaid obligations. In limited situations, there may be legal authority to substitute spending authority from offsetting collections for the borrowed authority.

Delete:

**Account Title:**Estimated Indefinite Borrowing Authority 

**Account Number:**404200 

**Normal Balance:**Debit 

**Definition:**The amount of estimated indefinite borrowing authority required to finance estimated obligations during the current year. The balance in this account will be adjusted to zero at yearend.

**Justification:**Based on USSGL account changes related to borrowing authority,****there is no need to have an estimate for Indefinite Borrowing Authority.

Modification:

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

**Account Number:**414100 

**Normal Balance:**Debit 

**Definition:**The ~~authorized~~ amount of new indefinite borrowing authority available to obligate.  Once obligated, the amount is available to be exercised and converted to cash based on ~~to expend~~ monies borrowed from the Bureau of the Fiscal Service or ~~other investors~~ Federal Financing Bank in order to liquidate unpaid obligations. ~~Report authority borrowed for such obligations even though the Federal agency ultimately will use subsequent appropriations or offsetting collections to liquidate the obligations.~~ In limited situations, there may be legal authority to substitute spending authority from offsetting collections for the borrowing authority.

Account Title: Current-Year Decreases to Indefinite Borrowing Authority ~~Realized~~

Account Number: 414300 

Normal Balance: Credit 

**Definition:**The amount ~~necessary~~ needed to reconcile current-year indefinite borrowing authority ~~realized~~ to the amount of obligations incurred for a Treasury Appropriation Fund Symbol as of year-end.~~s that are funded with indefinite borrowing authority.~~

**Changes to Borrowing Authority TCs:**

**Delete:**

**A162**To record an estimate of indefinite borrowing authority to cover obligations for the current year. 

**Reference:**USSGL implementation guidance; USSGL Budgetary Accounting Guide 

**Budgetary Entry**

Debit 404200 Estimated Indefinite Borrowing Authority 

   Credit 445000 Unapportioned Authority 

   Credit 462000 Unobligated Funds Exempt From Apportionment 

**Proprietary Entry**

None

A154 To record the realization of borrowing authority that was previously estimated. 

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

Reference: USSGL implementation guidance; Borrowing Authority Case Studies 

Budgetary Entry 

Debit 414100 Current-Year Borrowing Authority Realized

   Credit 404200 Estimated Indefinite Borrowing Authority

Proprietary Entry 

None

**Modifications:**

**A152**To record indefinite or definite borrowing authority. 

**Comment:**To cover reductions of indefinite borrowing authority, see USSGL TC-A148.

**Reference:**USSGL implementation guidance; USSGL Budgetary Accounting Guide 

**Budgetary Entry**

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

Debit 414120 Current-Year Definite Borrowing Authority

   Credit 445000 Unapportioned Authority 

   Credit 462000 Unobligated Funds Exempt From Apportionment 

**Proprietary Entry**

None

**A158**To record actual reductions to indefinite borrowing authority previously anticipated. 

**Comment:**See USSGL TC-A164 for anticipated reductions to borrowing authority. 

**Reference:**USSGL implementation guidance; USSGL Budgetary Accounting Guide 

**Budgetary Entry**

Debit 404400 Anticipated Reductions to Borrowing Authority 

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

**Proprietary Entry**

None

Attribute Additions:

# 

# 

# Scenario 1:  Definite Borrowing Authority 

This scenario includes entries to satisfy the basic transactions for definite borrowing authority.  This scenario represents 2 years of activity.    

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/ussgl_part_2.html#Part5).  In addition, each transaction in the scenario is coded with transaction code (TC) numbers identified in Section III of the USSGL TFM Supplement. 

Listing of USSGL Accounts Used in This Scenario

Definite Borrowing Authority – Year 1

Scenario Assumptions:

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

· This is no year TAS.

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

Definite Borrowing Authority – Year 1

Definite Borrowing Authority – Year 1

Definite Borrowing Authority 

Pre-Closing Trial Balance

 Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing 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 Borrowing Authority Closing Entries – Year 1

.

Definite Borrowing Authority 

Post-Closing Trial Balance

 Year 1

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority 

Pre-Closing Trial Balance-Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing 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 Borrowing Authority Closing Entries – Year 2

Definite Borrowing Authority Closing Entries – Year 2

Definite Borrowing Authority Closing Entries – Year 2

Definite Borrowing Authority 

Post-Closing Trial Balance - Year 2

# 

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

This scenario includes entries to satisfy the basic transactions for indefinite borrowing authority. This scenario represents 2 years of activity.  For indefinite authority at year end, the agency will adjust the unobligated balances to zero and the unused funds must be reapportioned each year.

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/ussgl_part_2.html#Part5). 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 This Scenario 

Indefinite Borrowing Authority – Year 1  

Scenario Assumptions:

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

· This is no year TAS.

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

Indefinite Borrowing Authority – Year 1

Indefinite Borrowing Authority – Year 1

Indefinite Borrowing Authority 

Pre-Closing Trial Balance Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing 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 Borrowing Authority Closing Entries – Year 1

Indefinite Borrowing Authority 

Post-Closing Trial Balance - Year 1

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority 

Pre-Closing Trial Balance Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing 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 Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority 

Post-Closing Trial Balance

 Year 2

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