There is a carryover of 5% of lapsed funds for operating expenditures and 20% of lapsed funds for capital expenditures, but the 5% limit is the one that is most talked about. I think that's appropriate for a number of reasons, one of which is that it allows for some sort of reward for departments that manage their affairs well and don't spend all of their funds. So there is a small portion of funds that can be carried over to the next year. It also avoids what has often been referred to as “March madness”, where departments spend money only to use their entire budget. Much of this is myth, but there are also instances where it did happen.
So I think this is a good practice. You could increase the limit on the carryover of lapsed funds from one year to the next to 10%, but if you increased it much more than that—for example, if there was no limit—it would bring instability and make forecasting government spending more difficult. That's the argument against it. If, for example, a department could carry over hundreds of millions of unused dollars from year to year, it would make budget forecasting much more difficult.