Do federal agencies ever spend more than is appropriated?

Question

I assume that most bank transfers in government are done by a fairly low level employee writing a check or transfer. What if an agency spends more than is allocated? Will their checks bounce? How often does this happen?

Answer 1

By law, federal agencies cannot spend more than is appropriated. There are extensive procedures that an agency goes thru to budget and spend its money. And if it ever happens that an agency makes a financial commitment that would exceed the allocated funds - and I know this because it happened on a project I was managing - the agency just does not pay you. The agency may include the overage in its next year's budget and pay you then, or just may not bother. In the case of my company, each and every contract we signed with the agency had a clause warning the contractor that the agency might not pay your total bill if allocated funds were not available. It is a risk you take as a federal contractor.