FINANCIAL MANAGEMENT POLICY MANUAL

upward obligation adjustments during this five-year “expired” period,
depending on their dollar value. On 30 September of the fifth fiscal year
after the expiration of an appropriation, both the obligated and the
unobligated balances of the appropriation are canceled, and are no longer
available for obligation or expenditure for any purpose. In some
instances, however, it becomes necessary to adjust an obligation that
otherwise would have been properly chargeable (both as to purpose and to
amount) to an appropriation before cancellation. This paragraph outlines
the policy and procedures for the administration of appropriations in an
expired or closed status.
2. DEFINITIONS.
a. Adjustment to Expired or Closed Accounts.
Increases or decreases to commitments, obligations or expenditures
to include recording of obligations or expenditures that were made
or incurred during the period prior to expiration or closure of the
account but not recorded.
b. Closed Account.
Accounts with balances that have been canceled under Title 31,
United States Code, Sections 1552, 1555, or 1557. Once balances
are canceled, the amounts are not available for obligation or
expenditure for any purpose.
c. Expired Accounts.
Appropriation or fund accounts in which the balances are no longer
available for incurring new obligations because the time available
for incurring such obligations has expired. Pursuant to 31 U.S.C.
1553, expired accounts contain unliquidated obligated and
unobligated balances, maintain their fiscal year identity and are
available for recording, adjusting and liquidating obligations
properly chargeable to that account. Other types of expired
accounts are described in Appendix C to Volume 3, Chapter 10 of
the DOD 7000.14-R Financial Management Regulation (FMR).
3. Procedures Governing Expired Accounts.
Absent statutory authority, new obligations may not be incurred during the
five-year period after expiration of an appropriation. Legitimate
obligation adjustments and disbursements, however, may be made from
the account. Prior approval requirements for these upward obligation
adjustments have been established by Congress, the USD (Comptroller),
and the Secretary of the Navy. There shall be no “netting” of upward
adjustments against downward adjustments to avoid prior approval
requirements.
Financial Management Policy
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