The Life Cycle of a Budget
The Full Cycle of a State of
Alaska Operating Budget
Request
Budget Definitions and Flow of
Budget Process
• See handout—Glossary of Key Budget
Terms, published by the Office of
Management and Budget
http://www.gov.state.ak.us/omb/Glossary/index.htm
See handout—Flow chart of a typical
operating budget flow process.
Operating Budget Process
Alaska’s budget process is continuous and
iterative, involving all levels and branches of
government. Those involved in the budget
process deal with different references in time—
looking backward to gain from experience,
implementing and monitoring the current year
budget, and planning for future public needs.
Preparation of the operating budget begins long
before the legislature convenes.
Pre-Session Activity
In the Beginning….
The budget cycle begins in late-July, early-August of each
year. This begins establishing the succeeding, or next
fiscal year’s budget, e.g. in July of FY09, Management
begins the development of the FY10 operating budget.
Management first identifies “big picture” items—significant
changes in the agency’s budget from the prior fiscal year
operating budget appropriations. These items are
reviewed with the Governor’s Office (OMB). Approved
items are then submitted in the Governor’s Budget
Request.
Increments and Decrements
• Increment—a request for new and/or
additional funding authority
• Decrement—not as much is needed as
last year
Program Narratives
The narrative portion of an operating budget
provides information about a budget entity
(department, division, or component).
Narratives describe core services, key
challenges, and measures for determining
the entity’s success.
Program Narrative
The division narrative consists of:
• Contribution to the Dept Mission
• Core Services
• Performance Measures
• Activities
• Key Challenges
• Changes in Results
• Accomplishments
• Statutes/Regulations that govern division
Operating Budget Entered in ABS
After narratives, Budget Unit begins entering
operating budget information into the Alaska
Budget System (ABS)
There are separate modules in ABS that data is
entered:
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Revenue detail
Expenditure detail
Personal Service Module
Change Records
• Revenue Detail: detail is provide for all
restricted revenues. There are more than
200 various fund sources within the State
of Alaska; only the DOC’s 6 restricted
revenue types are shown below:
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Federal Receipts
General Fund Program Receipts (GFPR)
Interagency Receipts (I/A)
Capital Improvement Project Receipts (CIP)
Receipt Supported Services (RSS)
Statutory Designated Program Receipts (SDPR)
Restricted Revenue
What is restricted revenue?
Funding is restricted for a particular
purpose, e.g. federal funding can occur
only for that particular purpose, as
stipulated by federal grant requirements.
AS 37.05.146
Unrestricted Revenue
Unrestricted revenues do not need to be
reconciled in the operating budget
exercise. Unrestricted revenue is General
Fund dollars that are appropriated for any
purpose within the constraints of the
appropriations structure and mission.
Expenditure Detail
Expenditure detail provides descriptions of
expenditures relating to the following
items, and budgeted to the appropriated
amount:
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Travel 72000
Services 73000
Commodities 74000
Capital Outlay 75000
Grants and Benefits 77000 (DOC has no authorization
within this expenditure line.)
Personal Services
A personal services module is located in
components that have positions reporting
directly to that component. A personal services
module contains:
• Funding sources for each position that balance to funding
sources specifically allocated for personal services
• Benefit rates (based on bargaining unit and position status)
• Vacancy Factor (based on the expectation that not all
positions will be filled 100% of the time during a fiscal year)*
• Organization Charts (submitted separately from ABS)
*Note: The DOC received full funding for ALL Institutional positions in FY09.
Change Records
• Types of Change Records
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Atrin: agency transfer-in (between depts)
Atrout: agency transfer-out (between depts)
Dec: decrement
FndChg: fund change
Inc: increment
LIT: line item transfer
OTI: one-time item
PosAdj: position adjustment
SalAdj: Salary adjustment
TRIN (transfer-in within a dept)
TROUT (transfer-out within a dept)
Overview of the Pre-session
Activity
The division’s balanced budget has been
submitted to the department level, what
happens next?
– Deputy Comm presents to Comm
– Department submits to OMB
– OMB may request changes
– Governor releases budget by December 15th
– Budget Unit prepares Budget Overviews for
session
During Session
Activity During Session
• Legislature convenes on the 3rd Tuesday in
January
• House and Senate Finance Committees set
agency fund targets that the subcommittees are
expected to meet.
• Subcommittees are charged with reviewing the
Governor’s Budget Request, hearing testimony
from agency personnel (Budget Overview
presented) and other interested parties, and
developing budget recommendations to be
presented to the full Finance Committee.
Subcommittee prepares report for Finance
Committee(s) that include:
– Agency totals: highlights big picture changes
in funding, positions, and line items
– Appropriation Summary of general funds only
at the appropriation/allocation level
– Appropriation Summary of all funds at the
appropriation/allocation level
– Transaction Comparisons: list of the
individual transactions generating the
funding/position changes from one state of
the budget to the next
Finance Committee Closeout
– Public testimony is heard and the finance
committee members prepare and submit
amendments to the finance committee cochair prior to the full finance committee
meeting.
– Adopted amendments are incorporated into a
committee substitute bill, which is then sent to
the floor for additional amendments and a
final vote.
Conference Committee Process
– The House and Senate work independently,
inevitably they produce different bills. A
conference committee is appointed to
reconcile the differences between the House
and Senate versions of the operating bill.
– After the conference committee has resolved
the differences, the conference committee’s
substitute bills are sent to both floors for a
vote and then transmitted to the governor.
– Conference committee bills cannot be
amended on the floor.
Governor Signs the Operating
Budget Bill
If an appropriation bill is transmitted to the
governor after session, the governor has
20 working days to review the bill and
exercise line item veto power. The bill
becomes law and is typically effective with
the beginning of the fiscal year on July 1.
Some sections of the appropriations bills
may have other effective dates.
Post-Session Activity
And you thought we were
done…..
Management Plan is the final exercise to the
operating budget. This typically begins in lateJuly to mid-August
– Last chance for change records
– Rebalance personal services to AKPAY, add new
approved positions, etc.
– Identify PCNs vacant for 12 consecutive months.
(Unless approved by OMB in writing, positions vacant for more
than 12 consecutive months are to be deleted)
– Adjust line balances based on appropriations and
allocations
– Submit final management plan to OMB for approval
Can you change the Approved
Mgmt Plan?
• Once the management plan has been
approved by OMB, it can be modified
through the Revised Program (RP)
process.
• There are various types of Revised Programs
(RPs) for various actions. The following is a
listing of common RPs used within DOC. An RP
requires the approval of the Administrative Service
Director who is the final responsibility for departmental
financial status. Internal Approved RPs do not require
OMB approval.
– Transfer between non-personal lines
– Transfer between allocations within an appropriation
or sub-appropriation.
– Unbudgeted Reimbursable Services Agreement
(RSA) less than $100,000 (amount is accumulative)
– Restrictions (uncollectable restricted authorization or
specific general fund authorizations.)
• The common RPs used within DOC cont’d:
The following is a listing of common RPs used
within DOC that require additional approval by
the Office of Management & Budget (OMB)
within the Governor’s office.
– Establish of new or reclassification of existing
positions resulting in a change of more than 2 ranges
– Transfer of personal services authorization
– Unbudgeted RSA’s greater than $100,000 (requires
OMB approval / amount is accumulative)
– Increase authorization to spend unbudgeted federal
or other receipts (requires approval by Legislative
Budget & Audit (LB&A))
Three at once….Post-Session and
Pre-Session Overlap
• In the months of July and August, we
juggle:
– Prior fiscal year close-out and reappropriation;
– Current fiscal year management plan
– Next fiscal years Governor’s budget
request….start the cycle again
And so goes the life of a
budget…..
Resources
• Websites
– www.gov.state.ak.us/omb
– http://w3.legis.state.ak.us/home.htm
– http://www.legfin.state.ak.us/
• Forms & Manuals websites
– http://www.gov.state.ak.us/omb/forms/forms.ht
ml
– http://www.legfin.state.ak.us/Publications/publi
cations.php