Note 22. Legal Arrangements Affecting Use of Unobligated Balances

The unobligated balances consist of appropriated funds, revolving funds, management funds, trust funds, Cooperative Research and Development Agreement (CRADA) funds and royalty funds.  The annual appropriations are available for sponsoring and conducting medical research and are available for new obligations in the year of appropriation and for adjustments to valid obligations for five subsequent years.  The revolving and management funds are available for centralized research support services and administrative activities of the NIH. Revolving funds are no-year funds available until expended.  The NIH management fund is available for two fiscal years.  The trust funds consist of the Conditional, Unconditional, and Patient Emergency Funds and are also available until expended.  The Patient Emergency Fund is intended solely for the benefit of patients.  The Unconditional Gift Fund is available for any authorized purpose in the performance of NIH functions.  The Conditional Gift Fund is restricted to a specific purpose determined by the donor.  The NIH is not authorized to spend the funds to support functions not encompassed within the terms of the conditions.  However, for conditional monetary gifts, upon completion of the stipulated conditions, or circumstances rendering completion of the conditions impossible, any remaining unobligated conditional funds are transferred to the Unconditional Gift Fund for the support of any other objectives of the recipient organization.  The funds received for CRADA are available for the performance of the contractual agreement, and are available for the term of the agreement.  The Royalty funds are available for obligations for two fiscal years after the fiscal year in which the funds are received and are available for a variety of purposes, such as rewards to scientific, engineering, and technical employees of the laboratory, to educate and train employees and to pay expenses incidental to the administration of intellectual property by the entity.

All trust fund receipts collected in the fiscal year are reported as new budget authority in the Statements of Budgetary Resources.  The portion of trust fund receipts collected in the fiscal year that exceeds the amount needed to pay benefits and other valid obligations in that fiscal year is precluded by law from being available for obligation.  This excess of receipts over obligations is reported as “Temporarily Not Available Pursuant to Public Law” in the Statements of Budgetary Resources and, therefore, is not classified as budgetary resources in the fiscal year collected.  However, all such excess receipts are assets of the trust funds and currently become available for obligation as needed.  The entire trust fund balances in the amount of $313,882 million as of September 30, 2007 ($292,426 million in FY 2006), are included in Investments on the Balance Sheet.

The FDA received $168 million in funding in FY 2002, to remain available until expended, to support counter-terrorism projects that recognize the important role FDA plays in protecting the public health.  The attacks of September 11, 2001 and subsequent national events resulted in an accelerated and intensified need for attention to activities related to counter-terrorism.  The amount obligated for counter-terrorism projects through FY 2007 was approximately $167.7 million.

Report Date: November 15, 2007

AFR Section II Links:

• Message from the Chief Financial Officer
• Office of Inspector General Transmittal
• Independent Auditor's Reports
• Financial Statements and Notes
• Required Supplementary Stewardship Information
• Required Supplementary Information