Summary

This report reviews how the Agency for International Development (AID) implemented 1990 legislation that revised the rules governing federal agencies' management of fixed-year appropriations whose period of availability for obligation had ended--also known as "expired appropriations." GAO discusses (1) AID's responses to the requirements of the law, including actions it has taken to preserve funds that would otherwise have been canceled pursuant to these sections, and (2) issues related to the obligation and expenditure of "no-year-if-obligated" funds provided to AID in its annual appropriation acts since fiscal year 1987, including the extent to which the no-year-if-obligated provision in AID's appropriations has enabled the agency to more effectively manage its operations.

GAO found that: (1) the act revised the rules governing federal agencies' management of fixed-year appropriations whose period of availability had ended; (2) AID pursued and received a presidential waiver to extend the deadlines for closing out its M accounts for FY 1984 and before; (3) before the waiver was granted, AID was concerned that legislation would not provide it sufficient time to disburse $420 million in its M accounts for FY 1984 and before and it developed a contingency plan to shield the funds in its FY 1983 and prior M accounts from legislation; (4) AID planned to use its legislative authority to deobligate annual appropriations and reobligate them as current-year funds, allowing AID an additional 5 years to spend those funds; (5) AID sought the inclusion of a legislative waiver in its FY 1992 appropriation bill to extend the deadline for closing portions of its M accounts for FY 1985 and FY 1986, but the waiver has not been granted and AID plans to close its accounts for FY 1985 to FY 1988 in accordance with statutory requirements; (6) about 85 percent of the AID appropriations for FY 1987 to FY 1991 are in the form of no-year if obligated funds, causing no-year if obligated funds to grow from about 76 percent of total AID FY 1987 appropriations to about 88 percent of total AID FY 1991 appropriations; (7) AID obligated virtually all of its no-year if obligated appropriations during FY 1987 to FY 1991, causing no-year if obligated funds to grow from about $2.6 billion at the end of FY 1987 to $7.8 billion at the end of FY 1991; and (8) AID has made little use of its ability to deobligate funds from troubled projects and reobligate the funds for higher priority programs or projects.