AGA Today

Federal Accounting Corner

Available Authority and Annual Close

Linking Available Authority Account Balances to the Budget

Integration of the budget with the Standard General Ledger is necessary for good financial management. While the Office of Management and Budget and Treasury's Financial Management Service are only interested in the highest level of information (whether or not the funds are apportioned or available), the agency may find it useful to map general ledger accounts to each budget level. This allows agency personnel to use the trial balance to quickly see the status of budgets at a fund-wide or even higher level.  The accounts in the Standard General Ledger are:

An agency that regularly allocates and allots their funds may want to define subaccounts similar to the following:

In this way, the agency can tell from the trial balance how much is budgeted at what level, even when those funds are not subject to apportionment or are not available. In a transaction-based accounting system, the transactions would have to be set up to post differently for the different fund types (or even different funds if, for example, an agency allocates and allots one fund, but only allots another). For the reimbursable fund, the agreement would transfer the funds from 4590.3 to 4610 (SGL entries A122 and A304 are usually combined). For other types of anticipated authority, the funds are moved to 4610 when they are realized.

Annual Close

Since the annual close process usually changes the status of funds from unexpired to expired, or expired to closed, it would have to be set up to support the subaccounts, as in the chart below. For example, if a single-year appropriation had some allocations that were not completely allotted (i.e., sitting in 4540), they should close to 4650.3. Often agencies ignore this possibility, closing all available funds to 4650, and then, in the new year, any allotments post to 4540 and 4610, creating extraneous balances. Since anticipated authority (4590) does not survive the end of the year, it should close to the same account that the anticipated source (e.g., 4210) does, resulting in a zero net amount. If funds carry over and need to be reapportioned, the carryover entry would take them out of the post-close account and move them to 4450. —Simcha Kuritzky, CGFM CPA

This column is provided as part of a free exchange of ideas in federal accounting, and is not reviewed substantively before publication. Please send all comments, queries, or corrections to Simcha.Kuritzky@CGIFederal.com.