An interagency agreement is an arrangement through which one federal agency works with another agency to obtain services, carry out shared activities, or support a common government objective. Interagency agreements are routine across the federal government and can be supported by the Economy Act or by other specific statutory authorities.
An interagency agreement does not, however, create unlimited authority to move money between agencies. Federal appropriations remain subject to the legal restrictions that govern the purpose for which the funds were provided, the period during which they are available, and the amount Congress appropriated. Depending on the statutory authority used, additional requirements may govern how one agency places an order with another, how funds are obligated, and whether unobligated balances must be returned.
It is also useful to distinguish an interagency agreement from a transfer or reprogramming. A transfer moves budget authority from one appropriation account to another and generally requires statutory transfer authority. A reprogramming changes how an agency uses funds within an appropriation and may be subject to statutory restrictions or congressional notification requirements. An interagency agreement may involve one agency performing work for another without legally transferring the underlying appropriation.
That distinction is central to the current NIH-Department of War dispute. The threshold question is not simply whether NIH and the Department of War may collaborate. Federal agencies routinely do. The relevant questions are what statutory authority supports the agreement, what activities the agreement covers, which appropriation pays for those activities, and whether the use of those funds remains consistent with the restrictions Congress placed on the appropriation.
The US Department of Education (ED) announced a slew of interagency agreements in November 2025 which would move staff from ED to other agencies where those ED staff would maintain administrative oversight of ED programs. This is a hot-button issue for some House Democrats who assert that only Congress has authority to move congressionally-enacted offices out of ED, and that these interagency agreements are a ploy by the Trump Administration to dismantle ED without congressional approval. ED and Administration officials reject these accusations.
For research administrators, interagency agreements can matter when programs are jointly administered, when one agency provides funding or services on behalf of another, or when award documents reference authorities or terms associated with more than one agency. When the source or administration of federal funding is unclear, confirm the awarding authority, appropriation source, applicable terms and conditions, and which agency is responsible for award oversight.
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