APPROPRIATION AVAILABILITY - 8325

The availability period in which an appropriation may be encumbered or expended is usually specified in the law creating the appropriation. For example, the appropriation availability provisions in the Budget Act, and Government Code are as follows:

Control Section 1.80 of the Budget Act provides:

• Budget Act appropriations are generally available for encumbrance or expenditure during the first fiscal year, beginning July 1 and ending June 30 and shall be available for liquidation of encumbrances in accordance with section 16304.1 of the Government Code.
• Capital outlay appropriations are available for encumbrance and expenditure for three years, unless otherwise specified.

Appropriation availability may be extended for encumbrance and expenditures beyond the limits described in Control Section 1.80 if additional provisions are mentioned in the budget act or comply with GC 16304 allowing sums of money to transfer across fiscal years and /or characters of appropriations.

Section 16304 of Government Code provides:

• An appropriation shall be immediately available for encumbrance or expenditure during the period specified therein, or, if not otherwise limited by law, for three years after the date upon which it first became available for encumbrance or expenditure.

• An appropriation containing the term “without regard to fiscal years” shall be available for encumbrance from year to year until expended.
• An appropriation shall be deemed to be encumbered at the time and to the extent that a valid obligation against the appropriation is created. However, a state agency/department may estimate encumbrances consistent with the authority of the appropriation, and may make corrections or adjustments to any encumbrance or estimated encumbrance during the liquidation period described in Section 16304.1.
• As used in this code and in every other statute heretofore or hereafter enacted, the term “unexpended balance” shall be construed to mean “unencumbered balance.”

Section 16304.1 of Government Code provides:

• Disbursements in liquidation of encumbrances may be made before or during the two years following the last day an appropriation is available for encumbrance, except in the case of a fund made up of federal funds.
• Disbursements in liquidation of encumbrances may be made before or during the four years following the last day an appropriation of federal funds is available for encumbrance.
• Whenever, during either liquidation period, the Department of Finance determines the purpose for which the appropriation was made is completed and a portion of the appropriation is deemed not necessary, that portion shall, upon order of the Finance, revert to and become a part of the fund from which the appropriation was made.
• Upon the expiration of two years, or four years in the case of a fund made up of federal funds, following the last day of the period of its availability for encumbrance, the balance in any appropriation shall revert to and become a part of the fund from which the appropriation was made.
• After reversion, any unpaid encumbrance against the appropriation may be paid from any current appropriations available for the same purposes.