Federal Budgeting
101
Susan Shuback
Executive Director for Budget
U.S. Customs and Border Protection
1
Budget 101
Objectives
• To understand and be able to articulate the various phases of
the planning, programming and budgeting processes
• To understand key decision points in the budget process and
the deliverables for these points
• To understand the roles and responsibilities of Congress, the
Office of Management and Budget (OMB),
Department/Agencies
2
The Budget Cycle
Planning, Programming, Budgeting & Execution (PPBE)
The PPBE is a cyclical process
consisting of four distinct but interrelated phases:
Planning
• Establish strategic priorities and capabilities required to achieve the strategy
Programming
• Apply the resources to programs that provide the capabilities required to
achieve strategic priorities
Budgeting
• Properly price the programs, develop justifications, and an execution plan
Execution
• Perform and monitor the spending of approved plans
3
Budget Formulation Process
Decreasing Flexibility to Adjust/Change
Multiple cycles of Planning, Programming,
Budgeting, and Execution (PPBE) are underway at any one time
FY 20142018
Agency/Department Planning
Phase
Internal Agency
Program or
Outyear Budget
Process
FY 20132017
FY 2012
Budget, APR,
FYHSP to
Congress
DHS: Resource Allocation Plans
(RAP)
HAC/SAC
Conference
& Bills
Hearings,
Testimony
Mid-year
Reviews
FY 2011
Jan
Feb
Mar
Budget to
OMB
Apr
OMB
Passback
Appropriations
Act
Reprogramming
Requests to
Congress
May
Jun
Annual
Financial
Report
Jul
Aug
Sep
Oct
Nov
Dec
4
The Outyears
Planning
Agency Planning Process
DHS: HSTA and Integrated
Planning
Guidance
May-June
October-November
5
Planning in DHS
The Homeland Security Threat Assessment (HSTA), May-June
Integrated Planning Guidance (IPG), October-November
HSTA
A strategic assessment
of the major threats for
which DHS must
prepare and respond to
in the next five years.
IPG
Provides a framework to
manage DHS resources
effectively; consistent with
the National Strategy and
DHS’ strategic plan. It
provides a projected
operating environment for
the next five years.
6
The Budget Year +1
Programming
Internal Agency
Program or Outyear
Budget Process
February-March
Resource
Allocation
Plans (RAPs)
April-May
May-July
Budget to
OMB
July-August
September
OMB
Passback
October-December
7
Internal Agency Program or Outyear Budget Process and DHS’s
Resource Allocation Plan (RAP) Process
February-August, BY +1
• The DHS RAP is the component-specific budget requests that span
a five-year time period (2013-2017)
• In late winter/early Spring DHS Issues RAP guidance- includes
fiscal levels for each component, and process guidance
– For example: no new programs in FY 2013 or office must fund
all new programs within their base budgets
• DHS Components make recommendations for maintaining and/or
adjusting the budget to reflects costs and priorities of the
component.
• DHS and Component leadership deliberate and make decisions
– May include adjustments with and between components
• Decisions are reflected in the OMB Budget Submission
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Budget to OMB
September, Budget Year +1 (FY 2013)
• Submitted to OMB, generally by the first Monday after Labor Day
– Represents Department/Agency’s recommendations for funding
to the Administration
– Includes most of the same materials that will eventually go to
Congress
– Draft or “Dress Rehearsal” of the Congressional Justification
– Includes changes in costs, recommendation for starting new
or terminating old programs
– Includes changes in performance measures
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OMB Passback
November-December, BY +1 (2013)
•
Includes recommendations to the President and senior advisors
on each agencies proposed budget policies
– Ensure budgets are aligned with the administration’s priorities,
program performance goals and budget constraints
– Develop economic and budget assumptions for each area which
will ultimately drive programmatic and budget decisions
•
OMB passes back the President’s budget decisions to agencies
•
Agencies/departments can appeal budgetary decisions if there
are disagreements
– If OMB and agency cannot reach agreement, the issue may be
taken directly to the Vice-President
– Prepare impact statements/appeals for OMB cuts or disapprovals
for programmatic changes
– These are prepared both by the Budget Office and Program
Offices
10
The Budget Year
Budgeting
Budget to
Congress
January- February
Congressional
Hearings,
Testimonies
March- April
HAC/SAC
Conference
and Bills
May- June
Appropriations
Act
September-November
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Budget to Congress
January-February, BY
The President’s Budget is transmitted to Congress on the first Monday in
February; also known as the Congressional Justification (CJ) Submission
• Process includes:
– Input into government-wide budget database (MAX) for all dollars/numbers
– Narrative submission to Congress including all changes to the base budgets
and new initiatives
– CBP’s document is over 400 pages long includes over two dozen
separate funding exhibits for costs such as salaries, contracts, rent,
capital investments etc.
– Official external messaging: Development of Press Roll-Out materials,
review of DHS Secretaries Budget announcements, and the Secretary’s
Statement for the Record
– Annual Performance Review– high level document which highlights
agencies and organizations accomplishments against strategic goals
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Hearings, Testimony & Conference
March-June, BY
•
•
•
•
Congress sends up a nonbinding budget resolution for the President
– This establishes guidance on the level of budget authority, outlays,
surplus or deficit, revenue, and debt
May request the Secretary and the heads of agencies to testify before
committees on the Budget Request. Requests are mostly made by the
appropriation committees.
The House and Senate resolve any differences in their respective bills in a
special conference committee made up of members from both legislative
bodies. Once compromise has been reached, Congress adopts the budget
resolution concurrently.
Departments and Agencies also write briefing papers; coordinate responses
to advance questions; answer Questions for the Record (QFRs); prepare
transcript inserts, and help identify and assign reporting requirements
13
Appropriations Act
September-October, BY
An Appropriations Bill provides the legal authority needed to
spend or obligate U.S. Treasury funds. The appropriation bill
must be enacted prior to the start of a new fiscal year
(October 1). Failure to meet this deadline causes the need
for temporary short-term funding (Continuing Resolution),
or results in a federal government shut-down.
• House and Senate appropriation committees meet independently
to consider 12 appropriations bills
• Both houses “Conference” to resolve outstanding differences
• If the President signs the legislation, it becomes law
• The appropriation acts establish the three main components of
the appropriation: time, purpose, and amount
14
The Current Year
Execution
Mid-year Reviews
March-April
Reprogramming
Requests
to Congress
May-June
Annual
Financial Reports
October-December
15
Mid-year Review
March-April, Current FY
Mid-Year reviews occur is most federal agencies and are used to
provide agency/department leadership with a snapshot of
financial resources at the halfway point of the fiscal year
• Provide an analysis of budget and spending activities against
financial plans, staff plans and projection methods to ensure
effective prioritizing and utilization of resources in support of CBP
mission and goals
• Are often used to measured against performance goals
• May include a review of unfunded requirements, new initiatives or
changes in costs assumptions or priorities.
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Reprogramming Requests to Congress
May-June, Current FY
Reprogramming occurs when funds within an appropriation or fund
account are shifted and used for purposes other than those designated
at the time of the appropriation decision. Reprograms should only be
made to meet urgent and unavoidable requirements, not to procure
desirable items.
• Various authorizing statutes provide other limitations for reprogrammings.
For example in DHS no reprogramming can increase an appropriation by
more than 10% or decrease an appropriation by more than 5%
• Agencies most notify Congress when reprogramming funds:
– Create or eliminate a program, project, office or activity
– Increase funds of a program, project, or activity that were denied or
restricted by Congress
– Repurpose funds that were specified by Congress to go towards a stated
purpose
– Contract out any function or activity for which funding levels were
requested for Federal full-time equivalents
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Annual Financial Report
October-November, Current FY
•
•
•
Provides annual financial information adheres to standards and guidelines in manner
consistent across federal government
Includes component statements and performance metrics to report agency efficacy in
meeting mission and objectives
Provide a hierarchy of objectives and landscape of financial resources
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Other Terms in Budget
Apportionment: is a plan, approved by OMB, to spend resources provided by one of the
annual appropriations acts, a supplemental appropriations act, a continuing resolution, or a
permanent law (mandatory appropriations). Resources are apportioned by Treasury
Account Fund Symbol (TAFS). The apportionment identifies amounts available for
obligation and expenditure. It specifies and limits the obligations that may be incurred and
expenditures made (or makes other limitations, as appropriate) for specified time periods,
programs, activities, projects, objects, or any combination thereof.
Obligation means a binding agreement that will result in outlays, immediately or in the future.
Budgetary resources must be available before obligations can be incurred legally.
Commitment: An administrative reservation of funds for obligation. For example when an
organization goes out with a request for proposal on a contract, the funds are often
“committed” or set aside.
Outlay or Expenditure: means a payment to liquidate an obligation (other than the repayment
of debt principal). Outlays generally are equal to cash disbursements but also are recorded
for cash-equivalent transactions, such as Federal employee salaries and debt instruments.
Outlays are the measure of Government spending.