The establishment of an expendable trust creates an account on the Commonwealth's accounting system that authorizes use of the funds for a particular purpose without further appropriation. Executive Department Secretaries may establish expendable trusts with the approval of the Secretary for Administration and Finance. Secretariats or agencies within a Secretariat wishing to establish an expendable trust, should draft a trust in the name of the Secretary, who must sign the trust.
Some Departments have independent statutory authority to establish trusts.
Expendable trusts are appropriate for bequests, grants, or contributions for a particular program or purpose. Establishing an expendable trust to raise money for a purpose that could have been adequately funded through a legislative appropriation, but was not, may or may not be appropriate. Requests to establish such trusts will receive special scrutiny, including review by the Budget Bureau. Expendable trusts should not be used as a back door approach to funding programmatic initiatives without legislative authorization. Agency attorneys should work with the agency's budget personnel to draft language which adequately describes the intended purpose and conditions of the expendable trust.