FEDERAL BUDGET

Government-Wide 

Inventory of Accounts with 

Spending Authority and 

Permanent Appropriations, 

Fiscal Years 1995 to 2015

Statement of Tranchau (Kris) T. Nguyen, Acting Director, 

Strategic Issues and 

Julia C. Matta, Managing Associate General Counsel, 

Office of the General Counsel

Testimony 

Before the Subcommittee on 

Intergovernmental Affairs, Committee on 

Oversight and Government Reform, 

House of Representatives

For Release on Delivery 

Expected at 10:00 a.m. ET

Tuesday, December 11, 2018

GAO-19-289T

United States Government Accountability Office
Letter

Page 1 GAO-19-289T 

Chairman Palmer, Ranking Member Raskin, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our work on federal agencies’

reported use of spending authority and permanent appropriations from 

fiscal years 1995 through 2015. As you know, Congress can provide 

budget authority to federal agencies and programs through the annual 

appropriations process. It can also provide budget authority through laws 

other than annual appropriations acts, or through permanent 

appropriations that permit the agency to obligate budget authority without 

further congressional action. Our remarks today are based on our report 

that is being released at this hearing, entitled Federal Budget: 

Government-Wide Inventory of Accounts with Spending Authority and 

Permanent Appropriations, Fiscal Years 1995 to 2015.

1

Our definition of spending authority and permanent appropriations 

includes five types of budget authority: permanent appropriations, 

contract authority, borrowing authority, offsetting collections, and 

monetary credits or bartering.

2 These types of budget authority provide 

some flexibility for agencies because they do not have to await 

congressional action to incur obligations and make payments. Although 

Congress does not review these authorities annually as part of the annual 

appropriations process, these authorities are still subject to congressional 

oversight at any point in time, such as by placing limitations on the 

authorities in any given year. For example, in one or more annual 

appropriations acts, Congress could restrict the use of some or all of the 

 1

GAO, Federal Budget: Government-Wide Inventory of Accounts with Spending Authority 

and Permanent Appropriations, Fiscal Years 1995 to 2015, GAO-19-36 (Washington, 

D.C.: Nov. 29, 2018). In addition to this report, we are releasing an online dataset of our 

inventory of accounts with spending authority and permanent appropriations. This can be 

accessed on our public website at https://www.gao.gov/products/GAO-19-36.

2

Permanent appropriations are budget authority to incur obligations and make payments 

without further legislative action. Contract authority is the authority to incur obligations in 

advance of appropriations; a subsequent appropriation or offsetting collection is needed to 

liquidate the obligations. Borrowing authority is authority that permits an agency to borrow 

money and obligate against amounts borrowed. Offsetting collections are collections 

authorized by law to be credited to agency accounts that can be obligated without further 

congressional action. Monetary credits or bartering is the authority to make purchases 

with seller credits or something other than dollar amounts.

Letter
Page 2 GAO-19-289T 

budget authority, thereby using the annual appropriations process to 

control the use of spending authority and permanent appropriations.3

In this context, our testimony today summarizes the findings from our 

report on federal agencies’ reported use of spending authority and 

permanent appropriations. This report updates our 1996 report on the 

same topic.4 Accordingly, this testimony discusses (1) federal budget 

accounts with spending authority and permanent appropriations, including 

changes in the number of accounts and dollar amounts since fiscal year 

1994; and (2) whether the identified accounts are subject to or exempt 

from sequestration.

To produce our findings for the report, we analyzed budget data from 

fiscal years 1995 through 2015. We selected these years to cover the 

period from our prior work, which had analyzed budget data through fiscal 

year 1994, through the most recent year for which data were available 

when we began our work.5 We used the Office of Management and 

Budget’s (OMB) MAX A-11 Data Entry system (MAX) and datasets with 

sequestration designations provided by OMB.6 We then provided each 

agency with their spending authority and permanent appropriations data 

for their review. Additional information on our scope and methodology is 

available in our report. Our work was performed in accordance with 

generally accepted government auditing standards.

 3

Restrictions passed in an annual appropriations act can be either temporary or 

permanent based on their statutory language. Unless the statutory language specifies that 

the restriction is permanent or otherwise indicates an expiration date, restrictions passed 

in annual appropriations acts are assumed to be in effect only for that given fiscal year.

4

GAO, Budget Issues: Inventory of Accounts With Spending Authority and Permanent 

Appropriations, 1996, GAO/AIMD-96-79 (Washington, D.C.: May 31, 1996). This report 

was supplemented by a letter with additional account information and revisions; see 

Budget Issues: Inventory of Accounts With Spending Authority and Permanent 

Appropriations, 1997, GAO/OGC-98-23 (Washington D.C.: Jan. 19, 1998).

5

Fiscal year 2015 actual budget data are presented in the Fiscal Year 2017 President’s 

Budget Appendix. 

6

MAX is a computer system used to collect and process most of the information required 

for preparing the President’s budget for the federal government. MAX contains numerous 

edit checks to help ensure data consistency. 
Page 3 GAO-19-289T 

We found that the amount of spending authority and permanent 

appropriations reported government-wide grew 88 percent from fiscal 

years 1994 through 2015, adjusted for inflation.7 Specifically, in fiscal year 

2015, approximately $3.2 trillion was reported, compared with 

approximately $1.2 trillion in fiscal year 1994 ($1.7 trillion in fiscal year 

2015 dollars). As a result of the growth of spending authority and 

permanent appropriations from fiscal years 1994 through 2015, more 

budget authority is available to agencies that does not require them to 

await congressional action to incur obligations.

 7

When discussing budget authority amounts, we considered “reported” or “used” as the 

actual budget authority amount, as shown in the “actual” column in the Program and 

Finance schedule of the President’s Budget Appendix. The total that we report for all 

spending authority and permanent appropriations and for offsetting collections likely 

overstates actual spending authority and permanent appropriations. For example, many 

accounts with offsetting collections authority report collections from federal and nonfederal sources, or refunds of prior paid obligations, together in the President’s Budget. In 

general, collections from federal sources and refunds are not within our definition of 

spending authority and permanent appropriations. We included the entirety of the reported 

offsetting collections amounts because we and the agencies we asked were unable to

reliably subtract collections from federal sources or refunds of prior paid obligations.

Reported Use of 

Spending Authority 

and Permanent 

Appropriations Has 

Increased 

Government-Wide
Page 4 GAO-19-289T 

Figure 1: Growth of Spending Authority and Permanent Appropriations Government-Wide by Budget Authority Type, Fiscal 

Years 1994 through 2015

Note: Federal agencies reported no use of any monetary credits or bartering—the authority to make 

purchases with seller credits or something other than dollar amounts, such as land or services.

a

For purposes of this report, borrowing authority does not include the Department of the Treasury’s 

authority to borrow from the public or other sources under chapter 31, of title 31 of the U.S. Code.
Page 5 GAO-19-289T 

Permanent appropriations were the primary driver of the growth in 

spending authority and permanent appropriations from fiscal years 1995 

through 2015, as shown in figure 1 above. Entitlement programs, such as 

the Department of Health and Human Services’ (HHS) Medicare and the 

Social Security Administration’s (SSA) Old-Age and Survivors Insurance 

and Disability Insurance programs, are funded through permanent 

appropriations. These programs represent a significant proportion of 

reported budget authority in our inventory in fiscal year 2015. HHS 

reported the largest amount of spending authority and permanent 

appropriations in fiscal year 2015 with about $979 billion, or about 30 

percent. HHS’s largest three accounts in our inventory all fund Medicare.8

SSA reported about $920 billion or about 28 percent of total spending 

authority and permanent appropriations.

Since many spending authorities and permanent appropriations provide 

agencies budget authority based on program use and eligibility, 

demographic and program demand changes can affect the amount of 

reported budget authority. For example, since the Old-Age and Survivors 

Insurance and Disability Insurance programs administer benefits based 

on eligibility requirements and statutory formulas, the amount of budget 

authority used for the programs increases as more people become 

entitled.9 Programs administered by HHS and SSA continue to show 

spending increases largely as a result of the aging population and 

increasing health care costs.10

The Department of the Treasury (Treasury) reported the third highest 

amount of spending authority and permanent appropriations in our 

inventory. Of the $542 billion in spending authority and permanent 

appropriations Treasury reported in fiscal year 2015, $402 billion was for 

 8

Multiple budget accounts fund Medicare because the program has several components 

and trust funds. This necessitates separate financial reporting units. 

9

The programs’ appropriations are held in the Old-Age and Survivors Insurance Trust 

Fund and Disability Insurance Trust Fund. These amounts largely come from contributions 

in the form of payroll taxes, interest on the trust funds, and income taxes on some Social 

Security benefits. These amounts are permanently available for obligation by the Social 

Security Administration for the purpose of administering the program without subsequent 

congressional action. 42 U.S.C. § 401.

10For more information on the key drivers of federal spending, see GAO, The Nation’s 

Fiscal Health: Action Is Needed to Address the Federal Government’s Fiscal Future, 

GAO-18-299SP (Washington, D.C.: June 21, 2018). 

Growth in Total Spending 

Authority and Permanent 

Appropriations is Driven 

Primarily by Permanent 

Appropriations
Page 6 GAO-19-289T 

interest on debt held by the public and intragovernmental debt.11 We have 

reported that net interest on the federal debt is on track to be larger than 

any other category of spending in coming years due to continued 

projected growth in federal debt, and expected increases in interest 

rates.12

Other factors, such as legislative action, affected the growth in the use of 

spending authority and permanent appropriations to a lesser extent. For 

example, some existing statutes providing spending authority and 

permanent appropriations were amended to allow for increased use—

permanently or temporarily.

Although the total reported amount of spending authority and permanent 

appropriations increased over time, the changes for each authority type 

varied when comparing fiscal years 1994 to 2015. Reported budget 

authority grew for three of the five authority types—permanent 

appropriations, contract authority, and offsetting collections—in fiscal year 

2015, as compared to fiscal year 1994.

• Permanent appropriations: Between fiscal years 1994 and 2015, 

the amount of reported permanent appropriations grew 81 percent, 

adjusting for inflation. Generally, the reported amount of permanent 

appropriations increased gradually, with the biggest growth occurring 

in fiscal year 2008. The majority of agencies had permanent 

appropriations from fiscal years 1995 through 2015. Together, in fiscal 

year 2015, the top three agencies—HHS, SSA, and Treasury—

reported 91 percent of permanent appropriations used. HHS overtook 

SSA—the agency reporting the largest use in fiscal year 1994—and 

reported the highest dollar amounts of permanent appropriations for 

the first time in fiscal year 2006, likely due to rising health care costs. 

The majority of Treasury’s permanent appropriations are for interest 

on debt held by the public and intragovernmental debt. Treasury’s 

interest spending has dropped as a percentage of permanent 

appropriations since fiscal year 1994, due to lower interest rates that 

allow the government to borrow money more cheaply. However, 

interest rates are predicted to rise in the long term, which would 

increase interest spending.

 11Intragovernmental debt is federal debt owed by Treasury to federal government 

accounts, primarily federal trust funds such as Social Security and Medicare. 

12GAO-18-299SP.

Reported Budget Authority 

Amount Was Higher for 

Three of the Five Authority 

Types and Agencies Using 

the Authorities Have 

Changed
Page 7 GAO-19-289T 

• Contract authority: Use of contract authority grew 166 percent 

between fiscal years 1994 and 2015, adjusting for inflation. Five 

agencies had contract authority from fiscal years 1995 through 2015. 

The Departments of Defense, Energy, Housing and Urban 

Development, and Transportation used contract authority, while the 

Judicial Branch’s Courts of Appeals, District Courts, and Other 

Judicial Services has contract authority, but did not use it. Overall, the 

number of accounts with contract authority has remained relatively 

stable. Only one account, at the Department of Defense, reported 

receiving new contract authority since 1995. In fiscal year 2015, five 

accounts at the Departments of Defense and Transportation, 

represented 99 percent of contract authority used—$161.4 billion.

• Offsetting collections: The majority of agencies had offsetting 

collections authority during the time period we reviewed. The reported 

use of offsetting collections increased 126 percent when comparing 

fiscal years 1994 to 2015 and adjusting for inflation.13 This authority 

has a number of applications across the government, and generally 

authorizes agencies to collect fines, charge fees, or charge for permits 

among other uses. For example, the Department of Agriculture has 

the authority to use its portion of the fee for Agricultural Quarantine 

Inspection without congressional action.14 Since fiscal year 1995, 129 

accounts received new offsetting collections authority. The largest 

usage of offsetting collections in fiscal year 2015 was the Postal 

Service’s Postal Service Fund account. This account reported $74 

billion of offsetting collections for fiscal year 2015, which includes 

revenue for mail services.

• Borrowing authority: Reported borrowing authority varied during the

time period we reviewed. It decreased 46 percent when comparing 

fiscal years 1994 and 2015 and adjusting for inflation. The use of 

borrowing authority was reported by 15 agencies from fiscal years 

1994 through 2015. Two additional agencies, HHS and the Pension 

Benefit Guaranty Corporation, had unused borrowing authority. Since 

 13Generally, we did not rank the top agencies and accounts that used offsetting 

collections because we, and the agencies when asked, were unable to reliably subtract 

collections from federal sources or refunds of prior paid obligations. Except for working 

capital funds, collections from federal sources do not meet our definition of spending 

authority and permanent appropriations because their source is either annually 

appropriated or is itself in the inventory. An example is collections pursuant to 

reimbursable interagency agreements, such as those entered into under the Economy 

Act. 31 U.S.C. § 1535.

1421 U.S.C. § 136a.
Page 8 GAO-19-289T 

1995, seven accounts reported receiving new borrowing authority 

across five different agencies including the Departments of 

Commerce and Transportation.15 The Department of Agriculture 

reported the largest dollar amount of borrowing authority in most 

years. The Department of Agriculture’s large share of the total 

borrowing authority is for the Commodity Credit Corporation Fund. 

The Commodity Credit Corporation has the authority to borrow funds 

to carry out its programs.16 These programs include providing income 

and price support to agricultural producers, payments for conservation 

practices on farms, assistance in the development of international 

agricultural markets, and international feeding programs.

• Monetary credits or bartering: Six agencies have the authority to 

use monetary credits or bartering—the Departments of Agriculture, 

Defense, Energy, the Interior and State, and the Tennessee Valley 

Authority. However, none of these agencies reported using this 

authority from fiscal years 1995 through 2015. The number of 

authorities and agencies that have this authority are unchanged since 

fiscal year 1994.

Sequestration—cancellation of budgetary resources under a presidential 

order—is a process established in statute which helps to enforce 

spending limits and thereby control the deficit. In fiscal year 2015, 57 

percent of spending authority and permanent appropriations authorities 

were exempt from sequestration, and therefore were not subject to this 

budgetary enforcement mechanism. This is a 20 percentage point 

increase since fiscal year 1994. Congress first established exemptions to 

sequestration when the Balanced Budget and Emergency Deficit Control 

Act of 1985 was enacted and has amended them since then. Since 

spending authority and permanent appropriations permit agencies to 

obligate budget authority without further congressional action, when these 

authorities are exempt from sequestration, agencies can continue to use 

these authorities without reductions when sequestration is in effect.

Chairman Palmer, Ranking Member Raskin, and members of the 

Subcommittee, this completes our prepared statement. We would be 

pleased to respond to any questions that you may have at this time.

 15The other three agencies are the Departments of Agriculture, Defense, and Energy.

1615 U.S.C. § 713a-4. 

The Percentage of 

Spending Authority 

and Permanent 

Appropriations 

Authorities Subject to 

Sequestration in 

Fiscal Year 2015 

Decreased Compared 

to Fiscal Year 1994
Page 9 GAO-19-289T 

If you or your staff have any questions about this testimony, please 

contact Tranchau (Kris) T. Nguyen at (202) 512-6806 or 

nguyentt@gao.gov, or Julia C. Matta at (202) 512-4023 or 

mattaj@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this 

statement. GAO staff who made key contributions to this testimony are 

Janice Latimer (Assistant Director), Lisa Motley (Assistant General 

Counsel), Lindsay Swenson (Analyst-in-Charge), Michael Bechetti, Ann 

Marie Cortez, and Katherine D. Morris.

GAO Contact and 

Staff 

Acknowledgments

(103174)
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