I remembered it was in the 70’s and was politically motivated during an election year, so I looked it up:

Older (or should I say "more experienced"?) federal budget observers will remember the "transition quarter" or "TQ," the three-month period when the federal government switched from a fiscal year that began on July 1 to the current fiscal year that begins on October 1.

The change was mandated by the Congressional Budget Act of 1974.  It was intended to give Congress and the president three extra months to get all of the work on the budget done before the fiscal year began and to reduce what at the time was considered to be an overuse of continuing resolutions to fund the government.

(Please stop laughing about that last line about stopping the reliance on continuing resolutions.)

Lawmakers knew that, because it was only three-months long and comparisons to a full year would be difficult for all but the best numbers crunchers, the TQ would get very little scrutiny.  As a result, in a stunt that later would be perfected by David Stockman and Richard Darman, some spending from FY1976 -- the last of the July to June fiscal years -- was delayed into the transition quarter so that the 1976 results would look better.  Some spending from FY 1977 -- the first of the October to September fiscal years -- was also accelerated to the TQ so that that year's results would look better.

BARBARA KOURY KORZYK, MBA

Grants and Contracts Manager     Subcontracts Manager

Sponsored Programs Services      Office of Grant & Research Development

Washington State University

Phone: (509) 335-2046 M-W-F      (509) 335-7248 T-Th

Fax:   (509) 335-2071            (509) 335-1676

Does anyone know why the federal government has a fiscal year that begins in October, and why the colleges and others have fiscal years that are not calendar years?

Thanks!

Angela

--
Angela Willis, CRA, MPA | Special Assistant
University of Arkansas at Little Rock | Office of the Vice Provost for Research/
  Dean of the Graduate School
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