Financial Management

31 U.S.C. 1301 Application

31 U.S.C. 1301 was enacted in 1809, this statute is one of the cornerstones of congressional control over the Federal purse. Because money cannot be paid from the Treasury except under an appropriation, and because an appropriation must be derived from an act of Congress, it is for Congress to determine the purposes for which an appropriation may be used. Simply stated, 31 U.S.C. 1301(a) says “that public funds may be used only for the purpose or purposes for which they were appropriated”. It prohibits charging authorized items to the wrong appropriation, and unauthorized items to any appropriation. Anything less would render congressional control largely meaningless.

31 U.S.C. 1301(a)

Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.

Requires that appropriated funds only be used for the purposes and programs set forth by Congress in the appropriation. The agency’s budget request is an important reference standard for determining proper purpose and the relationship of expenditure to an appropriation. A three-part test for proper purpose to expend appropriated funds are:

  1. the expenditure must make a direct contribution to carrying out either a specific appropriation or an authorized agency function for which more general appropriations are available;
  2. the expenditure must not be prohibited by law; and
  3. the expenditure must not be otherwise provided for, that is, it must not be an item that falls within the scope of some other appropriation or statutory funding scheme.

If an agency has a specific appropriation for a particular item, and also has a general appropriation broad enough to cover the same item, it does not have an option as to which to use. It must use the specific appropriation. Were this not the case, agencies could evade or exceed congressionally established spending limits.

31 U.S.C. 1301(b)

The reappropriation and diversion of the unexpended balance of an appropriation for a purpose other than that for which the appropriation originally was made shall be construed and accounted for as a new appropriation. The unexpended balance shall be reduced by the amount to be diverted.

31 U.S.C. 1301(c)

An appropriation in a regular, annual appropriation law may be construed to be permanent or available continuously only if the appropriation:

  • is for rivers and harbors, lighthouses, public buildings, or the pay of the Navy and Marine Corps; or
  •  expressly provides that it is available after the fiscal year covered by the law in which it appears.

31 U.S.C. 1301(c)

A law may be construed to make an appropriation out of the Treasury or to authorize making a contract for the payment of money in excess of an appropriation only if the law specifically states that an appropriation is made or that such a contract may be made.

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Updated: 7/17/2021

Rank: G

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