Chapter 8
Supplemental and Deficiency Appropriations
Federal financial managers are often confused about the relationship and differences between supplemental appropriations and deficiency appropriations. This chapter clearly defines each and explains their relationship. The chapter also covers the carryover of the rules and limitations of a regular appropriation to a supplemental appropriation.
103. What is a supplemental appropriation?
A supplemental appropriation is an act appropriating funds in addition to those already provided by an annual appropriations act. Supplemental appropriations provide additional budget authority in situations in which the need for funds is too urgent to be postponed until the next regular appropriation bill is enacted. Supplementals may sometimes include items that were not appropriated in the regular bills because they were not authorized in time.1
104. What is a deficiency appropriation?
A deficiency appropriation is an act appropriating funds to pay obligations for which sufficient funds are not available.2
105. Is it correct to say that supplemental appropriations provide funds needed before an obligation, while deficiency appropriations provide funds after the fact to cover obligations already incurred?
Yes. Deficiency appropriations are often needed after violations of the Antideficiency Act. They are often the only way to fix a violation. They provide the legal basis for making payment from the Treasury against obligations incurred.
Deficiency appropriations may be made in the same year as the overobligated appropriation or in a later year.3
106. Supplemental appropriations and deficiency appropriations seem to be mutually exclusive. What is the relationship between the two?
While the distinction between the two is clear, in practice Congress often uses supplemental appropriations bills as the vehicle to also enact deficiency appropriations.4 Thus, deficiency appropriations may be included within a supplemental appropriation that adds funding to appropriations that are not overobligated.
107. Are supplemental appropriations separate from regular annual appropriations? That is, do supplementals carry their own particular purpose, time, and amount?
While Congress does occasionally use a supplemental appropriation to enact new appropriations in addition to those already enacted, the vast majority actually supplement an original appropriation. When an original appropriation is supplemented, the supplemental appropriation takes on the nature of the original and is subject to the same limitations on the expenses for which it can be used. Thus, the purpose remains the same.
Also, unless Congress states otherwise, supplemental appropriations are subject to the same time limitations as the original appropriation. An appropriation made to supplement the regular annual appropriation of a given fiscal year is available after the end of that fiscal year only to liquidate obligations incurred within the fiscal year. The unobligated balance of a supplemental appropriation will expire at the end of the fiscal year, just as the unobligated balance of a regular annual appropriation would.
Of course, Congress could enact a supplemental appropriation, just as it can for any appropriation, that has a longer period of availability or is available until it is expended (a no-year appropriation).5
108. If a regular appropriation contains a specific limitation or restriction, does that same limitation or restriction apply to the supplemental appropriation, even if the supplemental doesn’t repeat it?
Yes, it does. For example, a restriction in a foreign assistance appropriations act prohibiting the use of funds for assistance to certain countries would apply equally to funds provided in a supplemental appropriation for foreign assistance for the same fiscal year (B-158575, February 24, 1966).6
However, if a supplemental appropriations act includes a new appropriation that is separate and distinct from the appropriation being supplemented, restrictions contained in the original appropriations act will not apply to the new appropriation unless it is specifically stated that they do. The fiscal-year limitations of the original appropriation will still apply.7
109. Does the rule that supplemental appropriations are subject to restrictions specified in the regular appropriations act being supplemented also apply to specific dollar limitations?
Yes. If a regular annual appropriations act specifies a maximum spending limitation for the acquisition of a particular item—for example, by using the phrase “not to exceed”—a supplemental appropriation for the same fiscal year does not authorize an increase in that limitation if the language in the supplemental act is more general. Naturally, this principle does not apply if the supplemental appropriation specifies a different spending limit.8
110. Do new restrictions in supplemental appropriations apply to balances remaining in the original annual appropriation being supplemented?
It depends on the language used in the supplemental act. For example, a restriction in a supplemental appropriation applicable by its terms to “this appropriation” would apply only to the supplemental appropriation. New restrictions in a supplemental appropriation reach back to the original appropriation only if the supplemental act explicitly states that they do.9
111. If a supplemental appropriation enacts new legislative provisions that are separate and distinct from the original appropriation, are these new provisions retroactive to the beginning of the fiscal year?
In 20 Comp. Gen. 769 (1941), the General Accounting Office (GAO) held that when a supplemental appropriations act contains new legislation, whether permanent or temporary, the new legislation will take effect on the date the supplemental is enacted, absent a clear intent to make it retroactive.
In this decision, a supplemental appropriation enacted for the first time late in fiscal year 1941 permitted the payment of transportation expenses of certain military dependents. The provision was made effective on the date of enactment of the supplemental act, not on the first day of FY 1941.10
112. If a supplemental appropriation adds a new object that was not previously authorized to the purpose of the appropriation, can the original appropriation balance be used for that object?
A supplemental appropriation may add funds to a lump-sum appropriation for a new object. If the purchase of the object was not authorized under the original appropriation, the supplemental is considered a new appropriation that is distinct from the lump-sum appropriation.
This is best illustrated by an example. A fiscal year 1957 supplemental appropriation for the Maritime Administration provided $18 million for a nuclear-powered merchant ship under the heading “ship construction.” ($18 million went a long way in 1957!) Funds for the nuclear-powered ship had been sought under the regular “ship construction” lump-sum appropriation for FY 1957 but had been denied. The comptroller general found that the supplemental appropriation amounted to a specifically earmarked maximum for the nuclear-powered vessel and that the agency could not exceed the $18 million by using funds from the regular appropriation (36 Comp. Gen. 526 (1957)).11
NOTES
1. U.S. Government Accountability Office, A Glossary of Terms Used in the Federal Budget Process (GAO-05-734SP), September 2005.
2. Ibid.
3. U.S. Government Accountability Office, Principles of Federal Appropriations Law, Volume II (GAO-06-382SP), Chap. 6, 6-159.
4. Ibid., 6-160.
5. Ibid.
6. Ibid.
7. Ibid., 6-161.
8. Ibid.
9. Ibid.
10. Ibid., 6-162.
11. Ibid.