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Judgment Fund


Prior to 1956, most judgments against the United States could not be paid from existing appropriations, but required specific congressional appropriations for payment. In 1956, Congress enacted a permanent, indefinite appropriation ("the Judgment Fund") for the payment of final judgments which were "not otherwise provided for" by another source of funds.

This fund was intended to eliminate the procedural burdens involved in getting an appropriation from Congress to pay a particular judgment. It was also intended to result in prompter payments, reducing the amount of interest (where allowed by law) that accrued against the United States between the issuance and payment of an award.

In 1961, Congress modified the law to allow the Judgment Fund to be used to pay compromise settlements of actual or imminent litigation entered into by the Attorney General. The law creating the Judgment Fund has been codified at 31 U.S.C. § 1304.

Overview and Functions

The Judgment Fund is available to pay most court judgments and Justice Department compromise settlements of actual or imminent litigation against the government. Over time, Congress has added a number of administrative claim awards (settlements by agencies at the administrative level, not involving a lawsuit).

Since it is a permanent, indefinite appropriation, the Judgment Fund has no fiscal year limitations, and there is no need for Congress to appropriate funds to it annually or otherwise. Disbursements from it are not attributed to or accounted for by the agencies whose activities give rise to the payments. In the absence of a specific statutory requirement, the agency responsible for the claim is not required to reimburse the Judgment Fund.

The Judgment Fund is available to pay final money judgments and awards against the United States which are "not otherwise provided for" by another source of funds. Since agency operating appropriations are generally not available to pay judgments (although there are exceptions), most judgments against the United States are paid from the Judgment Fund.

Some examples of awards that are not payable by the Judgment Fund are tax judgments, judgments against the Postal Service, land condemnation judgments, judgments against government corporations and sue-and-be-sued entities, judgments for refunds where the amount found to have been improperly collected was credited to an agency appropriation, and certain court-awarded sanctions, among others.

Where payment of an award has been otherwise provided for by another source of funds, the fact that there may be insufficient funds to cover the award in that other account does not make the Judgment Fund available. In that instance, the agency to whom the other source of funds belongs must ask Congress for supplemental funding.

Payments from the Judgment Fund may be made only upon certification by the Bureau of the Fiscal Service (Fiscal Service), Department of the Treasury. In brief, Fiscal Service's role is to administer the use of this appropriation. One important step in the process is to confirm that a given item is not "otherwise provided for" by another source of funds. This confirmation is necessary to make sure the Judgment Fund is not being used for payments which should be paid directly by the involved agency.

Another important step in the administration process is to confirm that the judgment or award is final. Additionally, Fiscal Service will calculate the amount of any interest which may be authorized by law and will initiate action to offset any known indebtedness to the United States by the judgment creditor under 31 U.S.C. § 3728.

In the actual "certification" step, the Fiscal Service will not review or evaluate the merits of the underlying judgment or settlement. When Fiscal Service anticipates withholding certification because it has questions as to the availability of the Judgment Fund or some other source of funds, or concerning the finality of the judgment or settlement submitted for payment, the requesting agency is advised informally before a final denial is issued.

This informal notification gives the agency an opportunity to ensure that Fiscal Service has heard and considered all relevant facts and arguments.

For administrative claim settlement statutes, visit the GPO website.

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