The Bona Fide Need rule (31 USC, Section 1502) requires appropriated funds to be used only for goods and services for which a need arises during the period of that appropriation’s availability for obligation.
Definition: The bona fide needs rule is a rule of appropriations law. It mandates that a fiscal year’s appropriations only be obligated to meet a legitimate—or bona fide—need arising in (or sometimes before) the fiscal year for which the appropriation was made
The three (3) major legal provisions that concern funds execution are the: [1]
- Bona Fide Need Rule
- Anti-deficiency Act
- Misappropriation (also known as the “purpose statute”)
31 USC Section 1502 – Bona Fide Need
(a) The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title. However, the appropriation or fund is not available for expenditure for a period beyond the period otherwise authorized by law.
(b) A provision of law requiring that the balance of an appropriation or fund be returned to the general fund of the Treasury at the end of a definite period does not affect the status of lawsuits or rights of action involving the right to an amount payable from the balance.
AcqLinks and References:
- Guide: Business Managers Guide to Bona Fide Need Rule
- Website: GAO – Anti-deficiency Background
- Website: U.S. Code Title 31 Section 3101 – Misappropriation
- Website: U.S. Code Title 31 Section 1341 – Anti-deficiency
- Website: U.S. Code Title 31 Section 1502 – Bona Fide Need Rule
- Website: U.S. Code Title 31 Section 1517 – Anti-deficiency
Updated: 6/29/2021
Rank: G1
