Understanding Budget Authority: Key Legal Insights
Definition & Meaning
The term budget authority refers to the legal power granted by federal law that allows government entities to incur financial obligations. This authority can take several forms:
- Availability of funds: This includes provisions that make funds accessible for obligation and spending, excluding borrowing authority.
- Borrowing authority: This allows federal entities to borrow money and use those funds for obligations and expenditures.
- Contract authority: This permits the availability of funds for obligation without allowing for immediate expenditure.
- Offsetting receipts and collections: These are treated as negative budget authority, while their reduction is considered positive budget authority.
Legal Use & context
Budget authority is primarily used in federal financial management and budgeting practices. It is relevant in various legal contexts, including:
- Public finance and budgeting
- Government contracting
- Federal appropriations and allocations
Understanding budget authority is crucial for individuals and organizations involved in federal contracts or seeking government funding. Users can manage related forms and procedures with resources like US Legal Forms, which provides templates drafted by legal professionals.
Real-world examples
Here are a couple of examples of abatement:
Here are a couple of examples of how budget authority operates:
- Example 1: A federal agency receives budget authority to spend $1 million on a public health program. This allows them to enter contracts and make payments related to the program.
- Example 2: A federal department has borrowing authority, enabling it to take out a loan to cover immediate expenses while awaiting future appropriations (hypothetical example).
Relevant laws & statutes
Key statutes related to budget authority include:
- 2 USCS § 622, which outlines the definitions and limitations of budget authority.