#### NASA Procedural Requirements

#### 

#### 

#### NPR 9420.1 

#### Effective Date: December 24, 2008

#### Expiration Date: December 24, 2013 

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## Budget Formulation

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#### Responsible Office: Office of the Chief Financial Officer 

**TABLE OF CONTENTS**

**PREFACE**

P.1 PURPOSE

P.2 APPLICABILITY

P.3 AUTHORITY

P.4 APPLICABLE DOCUMENTS

P.5 MEASUREMENT/VERIFICATION

P.6 CANCELLATION

**CHAPTER 1. Planning, Programming, Budgeting, and Execution**

1.1 Overview

1.2 Agency Requirements

1.3 General Roles of Functional Offices

1.4 The Federal Budget Process

1.5 The Relationship of the Federal Budget Process and PPBE to Other
NASA

Management Processes

1.6 The Budget Formulation Schedule

## 

**CHAPTER 2. Planning**

2.1 Overview

2.2 Strategic Planning Guidance (SPG)

**CHAPTER 3. Programming**

3.1 Overview

3.2 Program and Resource Guidance (PRG)

3.3 Program Analyses and Alignment (PAA)

3.4 Agency Issues Book

3.5 Program Decision Memorandum (PDM)

**CHAPTER 4. Budgeting**

4.1 Overview

4.2 Programmatic and Institutional Guidance (PaIG)

4.3 OMB Submit

4.4 President's Budget

4.5 Appropriation

**CHAPTER 5**. **Working Capital Funds, Grants, and Trust Funds**

5.1 Overview

5.2 Agency Requirements

5.3 Roles and Responsibilities

5.4 Working Capital Funds (WCF)

5.5 Grants

5.6 Trust Funds

**CHAPTER 6. Reimbursables**

6.1 Overview

6.2 Agency Requirements

6.3 Roles and Responsibilities

**CHAPTER 7. Other Budget Submissions after the Start of the Fiscal
Year**

7.1 Overview

7.2 Agency Requirements

7.3 Roles and Responsibilities

7.4 Budget Supplementals and Amendments Defined

7.5 Submission Requirements

## APPENDIX A. Definitions Related to Budget Formulation

## APPENDIX B. Acronyms/Initialisms

## APPENDIX C. Description of Authority and Applicable Documents 

## PREFACE

**P.1 PURPOSE**

This NASA Procedural Requirements (NPR) provides the financial
management, performance requirements and process for budget formulation.

**P.2 APPLICABILITY**

This NPR is applicable to NASA Headquarters and NASA Centers, including
Component Facilities and Technical and Service Support Centers. This
language applies to JPL, other contractors, grant recipients, or parties
to agreements only to the extent specified or referenced in the
appropriate contracts, grants, or agreements.

**P.3 AUTHORITY**

a.  The Budget and Fiscal, Budget, and Program Information (31 U.S.C.,
    Chapter 11)

b.  Chief Financial Officers Act of 1990, Public Law 101-576

c.  Consolidated Appropriations Resolution, 2003, Public Law 108-7 (42
    U.S.C. § 2459i)

d.  Government Performance and Results Act of 1993, Public Law 103-62

e.  Information Technology Management Reform Act of 1996 (Clinger-Cohen
    Act), Public Law 104-106, Division E

f.  National Aeronautics and Space Act of 1958, Public Law 85-568 (42
    U.S.C., Chapter 26)

g.  Office of Management and Budget (OMB) Circular No. A -11,
    *Preparation, Submission, and Execution of the Budget*

h.  OMB Circular No. A -19, *Legislative Coordination and Clearance*

i.  OMB Circular No. A -25, *User Charges*

j.  NASA Policy Directive (NPD) 9010.2, "Financial Management"

**P.4 APPLICABLE DOCUMENTS**

a.  NPD 1000.0, "NASA Governance and Strategic Handbook"

b.  NPD 1000.3, "The NASA Organization"

c.  NPD 1001.0, "NASA Strategic Plan"

**P.5 MEASUREMENT/VERIFICATION**

Quality assurance reviews and analysis of budgetary reports and data
submitted through the various budget calls will be used to measure
compliance with this NPR.

**P.6 CANCELLATION**

None.

**/S/**

**Terry Bowie**

**NASA Deputy Chief Financial Officer**

**[DISTRIBUTION]{.underline}:**

**NODIS**

1.  Planning, Programming, Budgeting, and Execution

    1.  Overview

        1.  NASA develops its budget as part of the Planning,
            Programming, Budgeting, and Execution (PPBE) process. PPBE
            requires an enhanced level of analysis during budget
            formulation to ensure that resource alignment supports the
            accomplishment of Agency strategic goals and objectives in a
            resource-constrained environment. Budget formulation occurs
            annually. The PPBE process includes developing the Agency
            Strategic Goals and performance plans, formulating the
            Annual budget, developing fully executable Agency Operating
            and Execution Plans, and continues through the years of
            execution. This NPR focuses on budget formulation, which
            begins at the end of the Planning Phase with the Strategic
            Planning Guidance (SPG) and ends with Congress approving the
            budget level which will be funded for the Agency through the
            enactment of appropriations.

        2.  Figure 1-1 depicts the annual PPBE process. The first four
            steps of the Planning Phase occur separately from the
            analysis of program resource requirements. The SPG step of
            Planning and the Programming and Budgeting Phases focus on
            budget formulation and are the subject of this NPR. The
            final phase covers budget execution, which is addressed in
            NPR 9470.1. The steps of each phase are identified by their
            end products with the exception of Execution, which are
            identified by the sub-processes.

![](media/image1.wmf)

Figure 1-1, Annual PPBE Phases and Steps

2.  Agency Requirements

    1.  NASA shall use the PPBE methodology, as defined in this NPR, to
        align Agency resources in accordance with legal and regulatory
        requirements and the Agency's vision and mission.

    2.  NASA shall use the PPBE methodology to meet the Annual
        Performance Plan requirements set forth in the Government
        Performance and Results Act (GPRA) of 1993, as interpreted in
        OMB Circular No. A-11, Part 6.

    3.  NASA's budget formulation shall be jointly governed by the
        Office of Program Analysis and Evaluation (PA&E) and the Office
        of the Chief Financial Officer (OCFO). PA&E has primary
        responsibility for the Planning and Programming Phases, while
        OCFO has primary responsibility for the Budgeting and Execution
        Phases, although both offices, the Control Account Managers
        (CAMs), and Centers have roles and responsibilities under each
        phase of the PPBE process.

    4.  Data developed for the SPG and during the Programming and
        Budgeting Phases of PPBE is pre-decisional. The material
        underlying these decisions should not be released at any time
        except in accordance with OMB Circular No. A-11, Section 22 and
        consent from PA&E and OCFO. The only product that is releasable
        to the Congress and the public is the annual Congressional
        Budget Justification (CBJ) book which is the output of the
        budget formulation process.

3.  General Roles of Functional Offices

    1.  PA&E is the Administrator's staff office responsible for
        providing independent, objective, transparent, and
        multi-disciplinary assessments for strategic decision-making and
        provides the strategic planning and performance management
        required to insure that the long-range goals of NASA are met. As
        the lead for the Planning Phase, PA&E develops the Agency goals
        and plan every three years, as required by OMB Circular No.
        A-11, and conducts studies and analyses on near-term issues that
        could change strategy for the upcoming budget formulation cycle.
        As the lead for the Programming Phase, PA&E assesses the program
        and institutional changes, issues, and performance goals,
        including a portfolio assessment across the Agency; seeks
        solutions to various issues; presents the issues and
        recommendations to senior management; and documents management's
        decisions. In the Budgeting Phase, PA&E ensures that content
        justification and commitments for the Budget are clear,
        performance data is aligned with the budget, project cost and
        schedule data are consistent with other reports, and
        Congressional requirements are addressed. In the Execution
        Phase, PA&E reviews operating plans; continually assesses cost,
        schedule, technical, and programmatic performance data as part
        of the Baseline Performance Review (BPR); and develops
        performance highlights, performance plans, and reports on
        outcomes quarterly to OMB and Congress for any breach-to-cost
        and --schedule thresholds.

    2.  OCFO oversees all financial management activities relating to
        the programs and operations of the Agency, including the
        development and execution of the Agency's budgets. In the
        Planning Phase, OCFO provides input on the SPG. In the
        Programming Phase, OCFO reviews CAM allocations in the PRG,
        defines requirements for tracking subsequent resource
        adjustments, and reviews resource and FTE data throughout the
        process. OCFO leads the Budgeting and Execution Phases of PPBE,
        coordinating development of all budget data deliveries and
        serving as the primary point of contact with OMB, driving
        financial performance improvement actions throughout the Agency,
        and monitoring and reporting the financial execution of the
        Agency budget. OCFO maintains the Agency\'s eBudget systems;
        coordinates development and maintenance of the
        Agency/Congressional Operating Plans and the Agency Execution
        Plan; controls the Agency work breakdown structure within the
        official accounting system and eBudget; defends the Agency
        budget to OMB, Congressional committees, and external
        stakeholders; and analyzes and sets requirements for budget
        execution performance in the Execution Phase.

    3.  CAMs.

        1.  The CAMs and the accounts they control are listed below:

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a.  Deputy Administrator -- Agency Maintenance and Operations (AM&O) and
    Institutional Investments

b.  Associate Administrator -- Integrated Center M&O (CM&O) budget

c.  Associate Administrators for each Mission Directorate -- Mission
    Directorate budgets

d.  Assistant Administrator for Education -- Education budget

e.  Inspector General -- Inspector General's budget

    1.  CAMs develop the Program Resource Guidance (PRG) for budget
        development and submit their budget proposals during the Program
        Analysis and Alignment (PAA) step of the Programming Phase,
        which establishes their recommended budget strategy,
        demonstrates how programs will achieve the Agency's strategic
        objectives, and identifies the targeted level of performance
        that is to be delivered within the budgeted resources. With the
        delivery of the PAA, each CAMs update the budget database to
        permit Center and Agency assessments of the integrated requests
        and identify issues that are beyond their capability or capacity
        to resolve within their allocated resources.

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    1.  Center Directors manage individual CM&O budget accounts, develop
        their budgets based on the SPG and the PRG, and submit their PAA
        reports in eBudget Clearinghouse for review.

    2.  Mission Support Offices provide their budget proposals to the
        AM&O CAM*.*

    3.  The Office of Program and Institutional Integration (OPII)
        coordinates the Center budgets and the Cross-Agency Support
        budgets and submits an integrated CM&O PAA, an integrated AM&O
        PAA, and an Institutional Investment PAA report.

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    1.  The Federal Budget Process

        1.  The Federal budget process occurs in three main phases:
            Formulation, Congressional, and Execution.

            1.  Formulation. Title 31, U.S.C., requires that the
                President prepare a budget for the United States
                Government on an annual basis and submit it to Congress.
                During the Federal budget formulation process, the
                Executive Branch prepares the President's Budget. OMB
                officially starts the budgeting process by sending
                planning guidance to Executive Branch agencies in the
                spring, and the President completes the formulation
                phase by sending the budget to Congress no later than
                the first Monday in February.

            2.  Congressional. Title 2, U.S.C., requires that Congress
                adopt a concurrent resolution on the budget each year,
                setting forth appropriate funding levels for Federal
                government operations. Beginning in February, Congress
                reviews the President's Budget. It considers the
                President's Budget proposals, passes a revenue and
                spending plan for the Federal government called a budget
                resolution, and enacts the regular appropriations acts
                and other laws that control spending and receipts.
                Appropriations acts are to be enacted by September 30,
                prior to the beginning of each fiscal year. If Congress
                does not pass regular appropriations acts by September
                30, they pass a temporary appropriations act, called a
                continuing resolution, which provides the authority to
                fund government operations for a specific period of
                time, usually expressed in days or weeks. More than one
                continuing resolution may be passed in a fiscal year if
                delays in passing the regular appropriations continue.
                This enables government operations to continue while
                Congress continues to draft the regular appropriations
                act(s). When neither a regular appropriation nor a
                continuing resolution is passed by Congress and a
                funding, or appropriation, hiatus occurs, most
                operations of the Federal government must shut down.
                OCFO will publish a contingency plan to be used in this
                situation.

            3.  Execution. OMB Circular No. A -11 sets forth procedures
                for execution of the budget, or directing and
                controlling funds to achieve the purposes and objectives
                for which they were approved. Agency requirements for
                execution are addressed in NPR 9470.1, "Budget
                Execution."

    2.  The Relationship of the Federal Budget Process and PPBE to Other
        NASA Management Processes

        1.  Performance Plan. GPRA requires that agencies develop
            budgets that fully integrate the annual performance plan
            with other elements of the budget request. The NASA
            Performance Plan, issued annually in the Congressional
            Budget Justification, establishes annual performance goals
            for the year for each program included in the Agency's
            annual budget request and identifies objective and
            measurable performance goals; discusses the processes,
            skills, and resources needed to meet the performance goals;
            and identifies the performance indicators that will be used
            to measure progress toward achieving the goals. The NASA
            Performance Plan is one of the inputs used in the PPBE
            process for budget formulation. NASA's performance is
            compared to the Plan, and the results are reported annually
            as part of the Performance and Accountability Report in
            accordance with GPRA.

        2.  Internal Controls. NPR 9010.3 "Financial Management Internal
            Control," describes NASA's policy for establishing and
            maintaining an Agency system of financial management
            internal control that provides reasonable assurance that
            Government resources are protected against fraud, waste,
            mismanagement, and misappropriation. All NASA personnel with
            financial management responsibilities must ensure that
            controls are in place, resources are appropriately used to
            support NASA's mission, laws and regulations are followed,
            and data is reliable and timely. NASA managers with
            responsibility for budget activities must evaluate the
            internal controls associated with the budget process on a
            regular basis in accordance with the NASA Internal Control
            Program. Internal controls for any financial system used to
            support the PPBE process must also be in place and regularly
            evaluated for sufficiency.

        3.  Information Technology. The PPBE process is supported by
            multiple Agency financial systems. Any financial information
            system being procured or used to support the PPBE process
            must comply with Agency policy regarding financial
            management and budget systems and with Federal requirements
            and regulations for financial information systems, including
            the Information Technology Reform Act of 1995 (also known as
            the Clinger-Cohen Act).

        4.  Program and Project Management. NPR 7120.5, "NASA Program
            and Project Management Processes and Requirements," defines
            the management requirements for formulating, approving,
            implementing, and evaluating the programs and projects that
            NASA will consider during the PPBE process.

    3.  The Budget Formulation Schedule

        1.  The following table highlights NASA's steps in complying
            with Federal budget formulation requirements and provides a
            schedule for the activities. The table shows the planned
            timing. The actual timing may vary.

**Table 1-1, NASA Steps in Complying with Federal Formulation
Requirements**

  -----------------------------------------------------------------------
  **What Happens?**                                         **When?**
  --------------------------------------------------------- -------------
  NASA reviews open issues that were either not submitted   Fall
  with the OMB submit or were disapproved by OMB during the 
  Fall Budget process                                       

  PA&E develops the Strategic Planning Guidance to set the  December -
  budget and plans for the next budget formulation period.  February
  It is released officially in NASA's eBudget Clearinghouse 
  when the President's Budget is submitted to Congress,     
  typically in February.                                    

  The Center PAA is submitted to the CAM for CM&O so that   March
  they can integrate and submit an Agency CM&O PAA in Mid   
  May.                                                      

  Mission Support Integration Review is conducted with      April
  Center Directors and MD AA to discuss the Institutional   
  Issues.                                                   

  The Control Account Managers (CAMs) respond with proposed Mid May
  budget and issues in a report called the Program Analysis 
  and Alignment (PAA) Report.                               

  PA&E evaluates the issues, coordinates responses, and     June - July
  brings forward options and recommendations to the Senior  
  Management Councils. The issue papers are then            
  consolidated in the Agency Issue Book and released in the 
  eBudget Clearinghouse                                     

  PA&E sets up a senior management review to discuss issues July
  and recommended decisions in a forum where strategy is    
  discussed and Senior Managers are involved in the         
  decision making.                                          

  PA&E develops PDMs to document the outcome of decisions   July
  regarding the issues. The PDMs are then consolidated in a 
  PDM Book and released in the eBudget Clearinghouse, and a 
  budget trace to identify the changes across the Agency.   

  A PaIG is developed from the PDMs and OCFO locks the      August
  budget data in the formulation finance database for the   
  CAMs to make adjustments to their budget based on the     
  PDM, the Centers also make adjustments, and the CAMs      
  reconcile any differences at the end.                     

  OCFO submits the NASA Budget Estimates to OMB and         1^st^ Monday
  prepares an Agency briefing on any Budget structure and   in September
  Justification for content changes. OCFO works with the    after Labor
  CAMs and PAE to formulate the briefing.                   Day

  Detailed presentations are developed and briefed to OMB   September -
                                                            October

  The passback and appeal cycle is usually after            November -
  Thanksgiving and ends with the Final Settlement in        December
  December                                                  

  Issues and Disconnects that remain are documented by OPII November -
  and PA&E in an Acquisition Strategy Planning review that  December
  is held with Senior leaders. Tactical approaches to the   
  outcome of the settlement, unresolved issues, or any new  
  event that requires decisions are discussed to prepare    
  for the next budget formulation year's SPG.               

  OCFO completes development and production of the CBJ.     January -
  Copies are provided to NASA offices, OMB, and the Office  February
  of Legislative and Intergovernmental Affairs (OLIA) for   
  distribution to Congressional Staff on the first Monday   
  in February                                               
  -----------------------------------------------------------------------

2.  Planning

    1.  Overview

        1.  The Agency's planning activities include analyzing changing
            internal and external conditions, trends, threats, and
            technologies that will affect NASA; examining alternative
            strategies for adjusting to these changes and conditions;
            and defining long-term strategic goals, multi-year outcomes,
            and short-term performance goals that will challenge and
            enable the Agency to achieve its mission. Planning
            activities also include developing NASA's performance
            measurement strategy and specific metrics that will be used
            to monitor, assess, and report on the Agency's progress
            toward achieving these goals. The Planning Phase produces
            the NASA Strategic Plan (NPD 1001.0) every three years,
            produces implementation plans, and updates to the NASA
            Governance and Strategic Handbook (NPD 1000.0). This phase
            also produces NASA's annual and strategic performance,
            program, and project goals, and a description of desired
            outcomes. NASA uses these products and other data to create
            the annual SPG, which provides the basis for development of
            the Agency's annual budget request. The SPG is the first
            step in the budget formulation process.

    2.  Strategic Planning Guidance (SPG)

        1.  Purpose. In the SPG step of the Planning Phase, PA&E
            consolidates all of the information from the Strategic Plan,
            implementation plans, priorities, studies and assessments,
            and performance measures into strategic guidance for the
            Control Account Managers (CAMs). CAMs use this information
            to design their programs/projects to achieve Agency
            strategic goals and provide the institutional and management
            structure in support of those goals. Consolidating all
            relevant guidance into one concise document provides uniform
            direction for the Agency. The SPG also provides high-level
            resource guidance that includes the initial funding controls
            based on decisions from a SPG senior managers' review of new
            or open issues, disconnects, revisions needed to address OMB
            settlement, and the Acquisition Strategy Planning (ASP)
            review. The SPG provides high-level program and
            institutional guidance on the strategic priorities,
            directions, and assumptions to develop budgets and
            performance measurements. The SPG is focused on the budget
            year + 4 outyears and can request data for projects
            extending into the future and plan for new initiatives, but
            it is not used to review competitive project selection
            within existing programs. The SPG also contains the Annual
            Performance Planning (APP) guidance for development of the
            performance commitments which manifest in the pages of the
            CBJ. Each discrete performance piece is assigned a
            measurement strategy and then commitments are set
            accordingly, accounting for Congressional and White House
            interest and policy, required activities to achieve the
            strategic goals & Agency plans, past performance issues,
            internal program and project planning and control policies
            (i.e. NPRs 7120); and consistency with other internal and
            external performance commitments.

        2.  Process. PA&E compiles all open issues and actions from the
            last budget submit that need to be addressed in the upcoming
            budget to ensure each is addressed in the SPG. In addition,
            PA&E requests input from the OCFO, Office of Program and
            Institutional Integration (OPII), Mission Directorates
            (MDs), Mission Support Offices (MSOs), and Centers on
            "disconnects" and issues that they recommend the SPG
            address, as well as any special templates to collect data.
            PA&E reviews and analyzes input provided along with the
            Strategic Plan, implementation plans, and various relevant
            studies, reports, and assessments. After review of all
            inputs, PA&E develops the draft SPG, including the
            high-level resource controls developed by OCFO, and provides
            the draft to OCFO, and the CAMs for review and comment. PA&E
            then reviews the comments and makes changes to the draft, as
            appropriate. Disconnects and issues that could affect the
            SPG are presented to the Strategic and Program Management
            Councils (S/PMC) for decision. Then, the SPG is updated and
            presented to the SMC, any changes required by the Council
            are incorporated, and the final SPG is approved by the SMC.
            PA&E posts the approved SPG to the eBudget Clearinghouse. An
            illustration of the SPG process is provided in Figure 2-1.

![](media/image2.wmf)

Figure 2-1, SPG Process

3.  Timeline. This step is completed in February of each year.
    Typically, SPG development begins before receipt of the passback
    from OMB and is officially released internally to the NASA CAMs and
    OCFO at the same time the President's Budget is released in early
    February.

4.  SPG Responsibilities.

    1.  CAMs. Review and provide comments on the draft SPG.

    2.  Centers/Mission Support Offices. Provide input to their CAM on
        issues that need to be addressed in the SPG.

    3.  OCFO. Provide input to PA&E on the draft SPG.

    4.  OPII. Integrate comments and issues from the Centers and Mission
        Support Offices.

    5.  PA&E. Develop the NASA priorities in conjunction with the
        Administrator. Request pertinent input and develop the draft
        version of the SPG, including templates for all formal reports
        required during the Programming Phase. Submit draft to OCFO and
        CAMs for review and comment. Address comments received and
        develop revised draft SPG. Present revised draft SPG to the
        S/PMC and make any requested revisions. Post final SPG to
        eBudget Clearinghouse.

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3.  Programming

    1.  Overview

        1.  The Programming Phase encompasses the definition and
            analysis of programs and projects, together with their
            multi-year resource implications, and the evaluation of
            possible alternatives, including a risk assessment of each
            option. Programming also serves to balance and integrate
            resources among the various programs according to identified
            priorities.

    2.  Program and Resource Guidance (PRG)

        1.  Purpose. In this step, the CAMs take the Strategic Planning
            Guidance (SPG) and translate it into programmatic guidance
            and provide additional guidance for the program/project
            managers and the Centers. The PRG includes preliminary
            controls at the project by Center level for funding and for
            direct full-time equivalents (FTE) (to be used by the
            program/project managers as the basis for their alignment,
            re-planning, and issue analyses). The CAMs are expected to
            integrate any guidance that their programs/projects/mission
            support offices request to prevent the Centers from
            receiving multiple and conflicting guidance.

        2.  Process. The CAMs review the SPG and determine what
            programmatic level guidance needs to be issued to allow
            program/project managers and Centers to develop their
            program analysis and alignment reports. CAMs also allocate
            the high-level resource control totals from the SPG to lower
            funding details at levels that they believe appropriate by
            Center and the direct FTE program/project by Center. These
            FTE are a departure point for subsequent discussions rather
            than control totals. These initial allocations in the PRG do
            not change the base, but the resource figures will be
            updated during subsequent steps to reflect adjustments
            recommended and approved. CAMs track and explain all changes
            from the SPG control totals. Functional offices include any
            cross-cutting data calls in the PRG. PA&E ensures that
            programmatic guidance is consistent with the strategic
            guidance, and the OCFO ensures that resource allocations
            reconcile to the high-level resource control totals in the
            SPG. An illustration of the PRG process is provided in
            Figure 3-1.

            ![](media/image3.wmf)

            Figure 3-1, PRG Process

        3.  Timeline. The CAMs may submit a draft PRG before the SPG is
            approved. The CAMs release their final PRG just after the
            issuance of the SPG.

        4.  PRG Responsibilities.

            1.  CAMs. Develop programmatic guidance within the strategic
                guidelines in the SPG. Allocate the SPG funding control
                totals down to lower levels but no lower than total
                project by Center, and identify direct FTE by
                program/project by Center. Track and explain all changes
                from the SPG control totals. Post the PRG to eBudget
                Clearinghouse. Integrate all Program/Project/Mission
                Support Offices guidance to avoid multiple and
                conflicting guidance at the Centers.

            2.  OCFO. Review CAM allocations to ensure compliance with
                resource control totals in the SPG. Define requirements
                for tracking subsequent adjustments to resource figures.

            3.  PA&E. Review CAM programmatic guidance to ensure
                compliance with the strategic guidance in the SPG.

    3.  Program Analyses and Alignment (PAA)

        1.  Purpose. In this step, CAMs identify what they intend to
            accomplish with their programs/projects to achieve Agency
            strategic objectives, identify any surplus or deficit
            capabilities and capacities, and identify the impact of
            funding reductions or any need for funding increases. The
            PAA report establishes the CAMs' recommended strategy for
            the five-year budget period, projects that go into future
            years, demonstrates how planned programs will achieve Agency
            strategic objectives within allocated resource levels,
            develops performance commitment products for the performance
            budget submission, and includes issue papers as needed. It
            is used as the basis for PA&E's program analysis of each
            control account, including support costs. (Institutional
            infrastructure analysis is conducted during the PAA.)

        2.  Process. PA&E issues instructions in the SPG regarding the
            content, format, and schedule for submission of the PAA
            report.

            1.  Center PAA/Integrated CM&O PAA. Centers analyze their
                M&O programs, complete the required formats and
                narratives, and submit the Center PAAs in eBudget
                Clearinghouse for the CM&O CAM and PA&E to review. As
                part of this process, Centers also adjust the resource
                figures to reflect proposed funding and FTE changes from
                the PRG. The CAM office for CM&O facilitates an
                institutional review with the Associate Administrator
                and other senior managers to communicate Center issues
                and recommendations to resolve those issues. The
                management decisions are combined with the Center PAAs
                by OPII to develop a Consolidated CM&O PAA report that
                includes adjusted resource and FTE totals, which his
                then forwarded to PA&E.

            2.  Mission Directorates, Office of Education, AM&O, and
                Institutional Investment PAA. Program/project managers,
                under the direction of the Mission Directorates, use the
                program/project-level information in the PRG as the
                basis for analyses of existing programs. They also
                solicit information from various staff members,
                including program analysts, Centers, and other field
                staff. Program/project managers analyze inputs and, as
                directed by the Mission Directorates, prepare a
                program-specific PAA report with the required
                information for PA&E to analyze various program funding
                scenarios and the impact of those scenarios on a
                program's ability to achieve NASA strategic objectives.
                Some items that could be included in the report are
                program description, description of missing or surplus
                capabilities, information on unfunded requirements,
                analysis of the impact of PA&E defined funding
                scenarios, risk assessment of the various funding
                scenarios, discussion of alternatives considered but not
                taken, and description of the institutional and
                infrastructure impact on Centers based on increased or
                decreased resources. The PAA report may identify funding
                and FTE adjustments and rationales. CAMs also adjust the
                resource figures to reflect their proposed funding and
                FTE changes from the PRG. Program/project managers and
                Centers may also begin to establish agreements with
                service providers in this step. CAMs submit the PAA
                reports to PA&E for an initial review.

        3.  An illustration of the PAA process is provided in Figure
            3-2.

![](media/image4.wmf)

Figure 3-2, PAA Process

4.  Timeline. This step begins as soon as the SPG and PRG have been
    issued. The Center PAA reports are completed in March, and the CAM
    PAA reports are completed in mid-May for PA&E to analyze these
    reports and complete in June.

5.  PAA Responsibilities.

    1.  CAMs. Complete the PAA reports for all assigned programs,
        coordinating the efforts of program/project managers. Adjust and
        explain adjustments to resource figures to reflect proposed
        funding and FTE changes from the PRG. Submit in eBudget
        Clearinghouse the PAA report and any outstanding issues.

    2.  CM&O CAM. Review submitted Center PAA reports to ensure that
        resource figures are correct and accurately reflect decisions
        concerning institutional integration. Facilitate a Mission
        Support Institutional Review with the Center Directors and CAMs
        with the Associate Administrator chairing. Develop a
        Consolidated CM&O PAA report and issue papers, as needed, and
        submit to PA&E.

    3.  Centers. Provide information and support to CAMs as requested.
        Complete the Center PAA reports and submit in eBudget
        Clearinghouse for CM&O CAM to review. Adjust and explain
        adjustments to resource figures to reflect proposed funding and
        FTE changes from the PRG. Continue ongoing discussions with
        program/project managers.

    4.  OCFO. Review completed PAA reports to ensure that resource
        figures are correct and that they reflect proposed funding and
        FTE changes from the SPG/PRG.

    5.  PA&E. Include the PAA report instructions in the SPG during that
        step. Review and assess submitted PAA reports for completeness,
        identification of issues, and alternative approaches for
        resolution. Develop a portfolio analysis and develop issue
        papers as required. Schedule PAA reviews, as needed.

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4.  Agency Issues Book

    1.  Purpose. In this step, PA&E reviews and analyzes all of the PAA
        and issue reports to ensure compliance with the SPG and the PRG,
        ensure that programs can achieve NASA's strategic goals in the
        timeline indicated and with the resources identified, balance
        the needs of the various Mission Directorates with resources
        available, achieve strategic balance between programmatic and
        institutional needs, balance the capabilities and capacities of
        the various Centers, ensure that non-critical issues are
        resolved and documented, and identify critical issues that need
        to be brought to the SMC for discussion.

    2.  Process. PA&E reviews and analyzes the PAA reports and issue
        papers to determine if CAM proposals are the "best" uses of
        available capabilities and capacities within expected resource
        levels. As needed, PA&E contacts CAMs for clarification or
        additional information, or for CAMs to perform additional
        analyses and provide information on a new funding scenario. When
        PA&E reviews each issue paper, they add additional analysis and
        trade space as needed, along with making a recommendation. PA&E
        will also develop new issue papers if needed after reviewing all
        PAA reports. All issue papers submitted to PA&E or written by
        PA&E are provided to all affected offices so that they have an
        opportunity to add the CAM recommendation and comments. PA&E
        compiles the issue papers in an Agency Issues Book. Each issue
        paper includes the issue statement, discussion, resources
        required, alternatives, and recommendations. PA&E releases a
        draft Agency Issues Book through the eBudget Clearinghouse for
        review and further comment by CAMs. PA&E then submits to the SMC
        a final Agency Issues Book that presents the issues and
        recommendations and reflects any changes identified. Cross
        cutting issues and recommendations are briefed to the CAMs in a
        separate review to obtain decisions. Throughout this entire
        step, there is continuous communication among all parties. An
        illustration of the Agency Issues Book process is provided in
        Figure 3-4.

![](media/image5.wmf)

Figure 3-4, Agency Issues Book Process

3.  Timeline. The draft Agency Issues Book is released to eBudget
    Clearinghouse mid to late June, and the final Issues Book is
    released late June or early July.

4.  Agency Issues Book Responsibilities.

    1.  CAMs. Submit issue papers with PAA reports. Respond to issue
        paper questions. Review and comment on the draft Issues Book.

    2.  OCFO. Respond to issue paper questions. Review and comment on
        draft Issues Book.

    3.  PA&E. Analyze all information provided in the PAA reports.
        Review each issue paper and add additional analysis and trade
        space, along with recommendations. Develop new issue papers, as
        needed, after reviewing all PAA reports and issue papers, and
        provide to all affected offices so that they have an opportunity
        to add their CAM recommendation and comments. Compile the issue
        papers in an Agency Issues Book and coordinate the issue papers
        with all affected parties for comment. Release a draft Agency
        Issues Book through the eBudget Clearinghouse for review and
        further comment. Develop a final Issues Book that reflects any
        other changes identified, and present the issues and
        recommendations to the SMC for discussion. Present cross-cutting
        issues to the CAMs in a special review to obtain decisions.

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5.  Program Decision Memorandum (PDM)

    1.  Purpose. In this step, all of the Programming Phase decisions
        made to establish resource levels and FTE control totals for
        subsequent development of the budget are documented.

    2.  Process. PA&E presents to the CAMs and their resource staff any
        Agency cross-cutting issues to obtain decisions. PA&E then
        develops PDMs to document the decisions, which include the main
        points from the issue papers. PA&E obtains approval from the
        NASA Administrator or his or her designee for each PDM and
        compiles the PDMs into a Decision Book, which is posted to the
        eBudget Clearinghouse. In the event that there is a revision to
        a PDM or a new PDM is written, an addendum will be posted to the
        eBudget Clearinghouse. PA&E sets up a meeting, known as the
        Strategic Budget Decision Review (SBDR) to discuss cross-cutting
        issues and make recommendations to obtain decisions. PDMs are
        written to document the decisions from the SBDR. An illustration
        of the PDM process is provided in Figure 3-5.

![](media/image6.wmf)

Figure 3-5, PDM Process

3.  Timeline. July to early August.

4.  PDM Responsibilities.

    1.  CAMs. Review PDMs and take action. Attend SBDR to review and
        make recommendations for decisions on Agency cross-cutting
        issues and to approve draft PDMs.

    2.  OCFO. Review resource tables.

    3.  PA&E. Prepare PDM documentation, set up and present Agency
        cross-cutting issues and recommendations at the SBDR to obtain
        approvals on recommendations. Compile approved PDMs into a
        Decision Book and post to eBudget Clearinghouse.

    4.  NASA Administrator or Designee. Make final decisions on PDM
        issues

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4.  Budgeting

    1.  Overview

        1.  The Budgeting Phase includes formulation and justification
            of the budget to OMB and Congress. Resource allocations
            established during the Programming Phase are revised based
            on Program Decision Memorandums, the Congressional Budget
            Justification (CBJ) is prepared, the budget is defended, and
            the Congress appropriates funding for NASA to achieve its
            vision and mission. 

    2.  Programmatic and Institutional Guidance (PaIG)

        1.  Purpose. In this step, CAMs allocate resources and provide
            guidance to reflect the decisions made in the PDMs. These
            allocations are at the project level detail necessary for
            Centers to adjust the NASA budget according to the PaIG.

        2.  Process. PA&E provides to OCFO and the CAMs a PDM trace
            sheet (budget table) to show changes to the SPG budget
            controls. OCFO then sets the budget controls in the budget
            formulation database. The CAMs review the PDM trace sheet
            and new budget controls and determine necessary allocations
            to the resource control totals to reflect direct project by
            Center funding and direct FTE by project by Center. OCFO
            then ensures that the CAM allocations are in accordance with
            the PDMs and distributes the new resource control figures to
            the Centers to begin the next step. No additional funding is
            created in this step, but there may be additional narrative
            guidance to assist CAMs in planning and making adjustments
            based on the PDM decisions. An illustration of the PaIG
            process is provided in Figure 4-1.

![](media/image7.wmf)

Figure 4-1, PaIG Process

3.  Timeline. This step begins after the release of the PDMs to allow
    Centers and CAMs time to begin development of the budget details.

4.  PaIG Responsibilities.

    1.  CAMs. Allocate programmatic and institutional PDM decisions to
        resource control figures by direct project by Center and direct
        FTE by project by Center. Make adjustments before and after the
        Centers to reconcile data.

    2.  OCFO. Set control totals in the budget formulation database
        according to the PDM trace sheet provided by PA&E. Ensure that
        CAM allocations comply or reconcile with resource control totals
        in the PDMs. Distribute the new resource control figures to the
        Centers.

    3.  Centers. Make adjustments to budget database and reconcile FTE
        data.

    4.  PA&E. Develop a PDM trace sheet to show changes to the SPG
        budget controls and provide to OCFO.

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3.  The OMB Submit

    1.  Purpose. In this step, the CAMs develop the OMB budget
        submission (OMB Submit) in accordance with instructions from
        OCFO. This is the first step in the budget formulation process
        in which the product is distributed outside of NASA. However, it
        is still pre-decisional data and is provided to OMB only. It is
        also the step in which the planning/programming information is
        converted into the full array of budget justification data. OCFO
        and PA&E evaluate the submission to confirm alignment with the
        Agency strategic objectives, to ensure that the proposed budget
        is compliant with the PDMs and OMB Circular No. A-11, and to
        ensure that it is well-justified, executable, and defensible. In
        addition, as part of the submit PA&E submits the budget year
        draft Performance Plan. After settlement, the Performance Plan
        is adjusted as needed and resubmitted for OMB concurrence.

    2.  Process. OCFO evaluates the budget submission data and CAM
        adjustments to ensure compliance with the PaIG. OCFO then
        develops the PFP. OCFO develops the Agency briefing package with
        the support of the CAMs and PA&E and reviews the charts with the
        Administrator before submitting the budget to OMB. The OMB
        Submit process is depicted in Figure 4-2.

![](media/image8.wmf)

Figure 4-2, OMB Submit Process

3.  Timeline. This step begins in August after completion of the PaIG
    and is due to OMB the first Monday after Labor Day in September to
    meet the traditional OMB deadline.

4.  OMB Submit Responsibilities.

    1.  CAMs. Review Agency briefing and develop detail CAM briefing
        material for OMB in accordance with instructions.

    2.  OCFO. Prepare and distribute instructions for development of OMB
        Submit to CAMs. Review budget input and ensure that budget
        submissions comply with PDM control totals. Develop the PFP and
        narrative material for briefing to OMB, working with CAMs on
        what is required for narrative justifications. Together with
        PA&E, confirm alignment with the Agency strategic objectives and
        the PDMs and to ensure that the proposed budget is compliant
        with OMB Circular No. A-11, well justified, executable, and
        defensible. Review the budget briefing package with the
        Administrator, submit to OMB, and serve as the primary point of
        contact with OMB.

    3.  PA&E. Review briefing products from the OCFO and CAMs to
        validate consistency with decisions in support of the OMB budget
        and justification submission, and to ensure that the proposed
        budget is compliant well justified, executable, and defensible.

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4.  The President's Budget

    1.  Purpose. In this step, OCFO responds to OMB questions on the
        budget submission, coordinates hearings with Mission
        Directorates, receives and responds to passback, and works
        appeals and settlement. The CBJ is developed and assembled for
        dissemination. This represents NASA's share of the total Federal
        budget request and includes the detailed schedules required by
        the Congressional Appropriations Committees.

    2.  Process. NASA provides briefings to OMB staff and any additional
        supporting justification requested during OMB's analysis of
        NASA's initial budget submission. OCFO, with PA&E and CAM
        support, responds to OMB questions concerning policies and
        resource and performance levels. OMB staff presents options for
        final decision in the OMB Director's Review and develops the
        passback and guidance on the appeals process, which are
        typically released to agencies in late November. OCFO and PA&E
        review the passback, involving CAMs, as appropriate, and make
        recommendations to the Administrator on whether to accept or
        appeal OMB's decisions. If the Administrator chooses to appeal,
        OCFO prepares the appeal letter and sends it to OMB and provides
        material in support of negotiations. An iterative process ensues
        until OMB submits to NASA a settlement. OCFO then issues
        instructions to CAMs and Centers to update the budget data to
        reflect the new resource levels. This includes input to the
        President's Budget documents and galleys and input into MAX and
        the NASA budget information system, which is linked to the CBJ.
        OCFO informs the OMC and SMC of the final decisions that will be
        identified in the CBJ. When development of the CBJ is complete
        and approved internally at NASA, OCFO submits it to OMB for
        final review and approval, before publication. On the first
        Monday in February, OMB formally releases the President's
        Budget, and the NASA Administrator conducts a press conference
        to discuss the NASA budget request. Subsequently, working with
        the Strategic Communications Office/Office of Legislative and
        Intergovernmental Affairs (OLIA), NASA staff briefs
        Congressional committee staffs and OLIA delivers copies of the
        CBJ to them. An illustration of the President's Budget process
        is provided in Figure 4-3.

![](media/image9.wmf)

Figure 4-3, President's Budget Process

3.  Timeline. This step formally begins in September immediately
    following the OMB Submit and ends with Administrator and other
    senior leadership briefings to Congress on NASA's portion of the
    President's Budget after formal release of the President's Budget to
    Congress on the first Monday in February.

4.  President's Budget Responsibilities.

    1.  CAMs. Provide input as required by OCFO to the President's
        Budget documents. When notified that settlement has been
        reached, update resource and performance levels in the budget
        database and develop narrative changes to correspond to changes
        negotiated between NASA and OMB.

    2.  Centers. When notified that settlement has been reached, update
        resource and performance levels in the budget database if needed
        and develop fact sheets based on instructions from OCFO.

    3.  OCFO. Serve as the primary point of contact with OMB. Coordinate
        NASA budget hearings with OMB and ensure all OMB questions and
        issues are addressed. Prepare appeal letters on issues,
        coordinated through the affected offices and PA&E and approved
        by the Administrator. Take the lead role in preparing appeal
        responses to OMB and in preparing material in support of
        negotiations (meetings leading to settlement), coordinating with
        CAMs and PA&E. Track all OMB questions and ensure all issues are
        addressed. Maintain resource control totals for the President's
        Budget submission and document final settlement budget trace in
        a PDM and provide to PA&E for processing. Coordinate and
        facilitate development of the CBJ. Provide budget formats and
        instructions to CAMs and Centers for the preparation of input to
        the CBJ. Provide formats and instructions to CAMs for the
        preparation of input to the Congressional budget briefings and
        the OMB MAX budget information system. Ensure budget tables in
        the CBJ correspond to levels agreed to by NASA and OMB and that
        the resources requested correspond to the narrative
        justifications through the clearinghouse process. Ensure MAX
        input and galley developments are complete and consistent with
        other data. Prepare and brief budget rollout materials.
        Coordinate development and submission of the institutional
        budget inputs (CM&O, AM&O, and Institutional Investments).
        Ensure submissions are in compliance with Agency policy and
        senior leadership decisions. Prepare and brief budget rollout
        materials. Submit the briefing package to the Administrator for
        approval. Finalize CBJ editing and obtain concurrence from CAMs,
        PA&E, and OMB, approving ready for print. Provide copies within
        NASA, to OMB, and OLIA for Congressional dissemination.

    4.  PA&E. Reviews passback and validates NASA responses to questions
        and appeals. Validate Project cost and schedule data in CBJ to
        ensure it is consistent with the Major Program Annual Report and
        other cost and schedule reporting. Verify and validate Mission
        Directorate submission of threshold report and its relationship
        to the requested budget. Confirm that the CBJ input corresponds
        to NASA and Administration policies and strategic decisions
        through eBudget. Review rollout materials to ensure they
        accurately capture and present intended programmatic decisions.
        Review and concur with final draft of CBJ prior to it being
        printed. Support Strategic Communications in development of the
        Administrator's budget statement and press conference
        information.

    5.  Strategic Communications/OLIA. Coordinate meetings to prepare
        for the budget roll out. Serve as the primary point of contact
        with Congressional committees. Disseminate CBJ and other budget
        documents to Congressional committees and staffs. Coordinate
        Agency presentations and defense of budget before Congress,
        including development of testimony and hearing records and
        correspondence with Congress, and response to questions.
        Strategic Communications/Public Affairs: Sets up Administrators
        press conference and any media required to roll out the
        President's budget. Post CBJ and briefings to the nasa.gov web
        site.

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5.  Appropriation

    1.  Purpose. In this step, NASA presents and defends the President's
        Budget and monitors Congressional progress in developing the
        NASA appropriation bill in response to the President's Budget.
        During this step, NASA also attempts to understand the guidance
        that Congress includes in committee reports and statutes related
        to Congressional intent with regard to funding provided by
        Congress and prepares for changes to the President's Budget when
        those seem likely.

    2.  Process. After OMB releases the President's Budget, the NASA
        Administrator testifies on the submitted budget before
        Congressional Committees, typically the Authorization Committees
        first and then the Appropriations Subcommittees. After this
        testimony, the Committees/ Subcommittees forward questions to
        NASA, which require a formal response. NASA staff prepares the
        responses, coordinates them with OMB, and returns them to the
        Committees/ Subcommittees. After NASA responses are submitted,
        the House Appropriations Subcommittee prepares a markup of the
        appropriation bill and passes it. Subsequently, the full House
        Appropriations Committee and then the full House take up the
        bill and pass a version. The Senate Appropriations Subcommittee,
        the Senate Appropriations Committee, and the full Senate go
        through a similar process. After the House and Senate have both
        passed their versions of the appropriations bill, a Conference
        Committee convenes to resolve differences and craft a conference
        bill that is subsequently passed by both the House and Senate
        and sent to the President. Throughout these proceedings, NASA
        staff monitors the status of NASA's appropriations. When the
        House or Senate Committees, Subcommittees, or Conference
        Committee identify resource levels or policy guidance different
        from that proposed by the President, NASA staff develops options
        for implementing the differences. NASA may also provide input to
        OMB for a Statement of Administration Policy when OMB differs
        sharply with the position taken by the Congress. Once the House
        and Senate have reached agreement and passed the appropriations
        bill, it is sent to the President to sign into law. If Congress
        is unable to pass the regular appropriations bill by October 1,
        they typically pass a continuing resolution that allows the
        Government to remain operational for a specific length of time.
        More than one continuing resolution may be passed. NASA staff
        monitors the wording of the continuing resolution and recommends
        wording to OMB if there are needs that must be met early in the
        fiscal year that are beyond the limits of this bill. NASA staff
        also makes preparations to continue operations under the
        continuing resolution or for shutdown of operations if a bill is
        not passed and a lapse in appropriations occurs. An illustration
        of the Appropriation process is provided in Figure 4-4.

![](media/image10.wmf)

Figure 4-4, Appropriation Process

3.  Timeline. When Congress passes and the President signs the
    appropriation bills, theoretically before the execution year starts
    on October 1, but likely late fall or winter.

4.  Appropriation Responsibilities.

    1.  CAMs/Centers. Provide input to testimony and other support as
        required.

    2.  OCFO. Provide input to testimony and other support as required.
        Monitor Congressional action and initiate the development of
        alternatives based on probable Congressional action on resource
        levels or guidance.

    3.  OLIA. Coordinate testimony by the Administrator and others that
        may be requested by the Authorization or Appropriations
        Committees. Coordinate preparation of responses to Committee
        questions. Assist Committee staff in preparing for mark up of
        the budget request and in addressing amendments during floor
        consideration of bill. Provide information to Committee staff as
        to Agency budget priorities during Appropriations Conference
        activity.

    4.  PA&E. Provide input to testimony and other support as required.
        Provide programmatic analysis of impacts of budget questions and
        possible changes.

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5.  Working Capital Funds, Grants, and Trust Funds

    1.  Overview

        1.  NASA's Working Capital Funds (WCFs), grants, and trust funds
            generally follow the same guidance described in Chapters 1-5
            of this volume if budgets are required.

    2.  Agency Requirements

        1.  NASA shall develop WCF, grant, and trust fund budget data in
            accordance with prescribed guidance. Any special guidance in
            addition or as an exception to that prescribed for direct
            programs, CM&O, AM&O, and Institutional Investments shall be
            developed and distributed by the OCFO.

        2.  The OCFO shall lead the budgeting process for WCFs, grants,
            and trust funds.

    3.  Roles and Responsibilities

        1.  Managers of WCFs, grants, and Trust Funds. Provide the data
            required by OCFO to develop budget estimates and supporting
            documentation, as identified in budget or financial data
            calls.

        2.  OCFO. Prepare the budget requests and supporting
            documentation, as necessary.

6.  Reimbursables

    1.  Overview

        1.  Reimbursable budget authority, as used in this volume, is
            the authority to enter in agreements with other
            organizations, both Federal and non-Federal, to accept
            financial reimbursement for the costs of services or goods
            provided to the customer. It is spending authority provided
            based on offsetting collections, not appropriated funds. The
            reimbursable budget authority are based on projections of
            the known and probable reimbursable work that NASA
            anticipates receiving from outside sources during a given
            fiscal year and are submitted as part of the Agency's annual
            budget request.

    2.  Agency Requirements

        1.  NASA shall comply with all legal, regulatory, and policy
            requirements governing reimbursable agreements and shall
            request budget authority in the Agency's annual budget
            request.

    3.  Roles and Responsibilities

        1.  Centers. Submit budget estimates for reimbursable activities
            during the Budgeting Phase, as required in the budget data
            calls.

        2.  OCFO. Develop the reimbursable portion of the Agency's
            budget request using the data submitted.

7.  Other Budget Submissions after the Start of the Fiscal Year

    1.  Overview

        1.  After the President\'s Budget has been transmitted to the
            Congress, the President may propose changes in the budget by
            transmitting appropriations requests to revise the original
            budget request for the current year (supplemental) or budget
            year (amendment), including proposed appropriations language
            for legislative initiatives (e.g., items included in the
            budget as legislative proposals). All proposed revisions
            must conform to the policies of the President. The requests
            may be for additional amounts or proposed changes in
            appropriations language that do not affect amounts
            previously requested, such as technical corrections or
            changes in a limitation on the use of trust funds. These
            requests may be either supplemental appropriations or
            amendments, depending upon when they are transmitted and
            whether they affect text only or budget amounts. Office of
            Management and Budget (OMB) directs that agencies take every
            effort to postpone actions that require supplemental
            appropriations. However, proposals that decrease or
            eliminate amounts should be submitted whenever such changes
            are warranted.

    2.  Agency Requirements

        1.  NASA shall make every effort to avoid the need to request a
            budget supplement or amendment. However, should a supplement
            or amendment be required, NASA shall comply with all legal,
            regulatory, and policy requirements governing such budget
            requests.

    3.  Roles and Responsibilities

        1.  OCFO. With input from Mission Directorates and PA&E, OCFO
            develops the appropriate budget request and supporting
            documents and submits them to OMB and Congress after
            obtaining the approval of the NASA Administrator.

        2.  NASA Administrator. Approve any proposed budget supplemental
            or amendment requests prior to their submission to OMB and
            Congress.

    4.  Budget Supplementals and Amendments Defined

        1.  Supplementals. Appropriations requests that are transmitted
            after completion of action on an annual appropriations bill
            by the Appropriations Committees of both Houses are called
            supplementals. They may be transmitted prior to, with, or
            subsequent to transmittal of the succeeding annual budget
            document. Supplemental requests that are known at the time
            of budget preparation are normally transmitted to the
            Congress with the budget, rather than later as separate
            transmittals. However, each case is decided separately. OMB
            representatives inform NASA of which supplementals are
            transmitted with the budget so NASA can submit the necessary
            information. These supplementals usually request additional
            amounts not previously anticipated or requesting changes in
            appropriations language that do not affect amounts
            previously appropriated.

        2.  Amendments. Proposed actions that revise the President\'s
            Budget request and are transmitted prior to completion of
            action on the budget request by the Appropriations
            Committees of both Houses of Congress are called amendments.
            These include appropriations language for activities
            authorized since transmittal of the President\'s Budget that
            were included in the budget as a legislative proposal.

    5.  Submission Requirements

        1.  When requesting supplementals and amendments that increase
            the amounts contained in the budget, agencies may be
            required to provide proposals for reductions (offsets)
            elsewhere in the agency. OMB will only consider requests for
            supplementals and amendments when:

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a.  Existing law requires payments within the fiscal year (e.g.,
    pensions and entitlements);

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f.  An unforeseen emergency situation occurs (e.g., natural disaster
    requiring expenditures for the preservation of life or property);

g.  New legislation enacted after the submission of the annual budget
    requires additional funds within the fiscal year;

h.  Increased workload is uncontrollable except by statutory change; or

i.  Liability accrues under the law and it is in the Government\'s
    interest to liquidate the liability as soon as possible (e.g.,
    claims on which interest is payable).

    1.  Any additional information on submission requirements for both
        supplementals and amendments may be found in OMB Circular No.
        A-11, Section 110.

**APPENDIX A. Definitions Related to Budget Formulation**

A.1 **Amendment**. A proposed action that revises the President's budget
request and is transmitted prior to completion of action on the budget
request by the Appropriations Committees of both Houses of Congress.

A.2 **Agency Execution Plan**. A detailed financial plan used to
determine how funds will be allocated. It is based on the Agency
Operating Plan and is typically time phased.

A.3 **Agency Management and Operations (AM&O)**. A cost category for
Headquarters activities such as the Administrator and his or her
immediate staff, Mission Directorate management, Headquarters operations
management, and functional management that is managed through a common
cost pool.

A.4 **Agency Operating Plan**. The plan that sets forth the specific
amount of appropriated dollars that will be spent in the fiscal year to
fulfill NASA's mission and the specific purposes for which the funds
will be used. NASA's operating plans are approved by OMB and provided to
Congress for a 15-day review period before being executed.

A.5 **Appeal**. An application to a recognized authority for
reconsideration of a prior or proposed decision.

A.6 **Apportionment.** A distribution made by OMB of amounts available
for obligation in an appropriation or fund account into amounts
available for specified time periods, programs, activities, projects,
objects, or any combination of these. The apportioned amount limits the
obligations that may be incurred.

A.7 **Appropriation**. A provision of law authorizing the expenditure of
funds for a given purpose. Usually, but not always, an appropriation
provides budget authority.

A.8 **Budget**. A financial plan for a definite period of time that
estimates future cost for approved levels of effort; the total sum of
money set aside or needed for a purpose.

A.9 **Budget Authority**. The authority provided by law to incur
financial obligations that will result in outlays. Specific forms of
budget authority include appropriations, borrowing authority, contract
authority, and spending authority from offsetting collections.

A.10 **Budget Resolution**. A concurrent resolution passed by both the
House and Senate that sets forth a revenue and spending plan for the
budget year and at least four outyears. The plan consists of revenue and
spending targets with which subsequent appropriation acts and
authorization acts are expected to comply.

A.11 **Budget Year**. The fiscal year for which the budget is being
developed.

A.12 **Capital Assets**. Property, plant, equipment, and software
developed, manufactured, transferred, or acquired that meet NASA's
capitalization criteria, also known as the capitalization threshold.
NASA capitalization policy is contained in NPR 9250.1, "Property, Plant,
& Equipment and Operating Materials and Supplies."

A.13 **Center Management and Operations (CM&O)**. A cost category that
captures all of the general and administrative (G&A) activities required
to operate and maintain a Center.

A.14 **Congressional Budget Justification (CBJ)**. Also known as the
President's Budget Request. This is an annual NASA budget document that
includes budget estimates at the program and project level detail, and
provides descriptive and justification for the budget. NASA tailors the
CBJ to include performance data which integrates the budget and
performance into one document.

A.15 **Construction of Facilities (CoF)**. A cost category that provides
funding for revitalization projects (repair, rehabilitation, and
modification of existing facilities), construction of new facilities,
acquisition of related collateral equipment, environmental compliance
and restoration activities, design of facilities projects, and advanced
planning related to future facility needs.

A.16 **Continuing Resolution**. Legislation in the form of a joint
resolution enacted by Congress to provide budget authority for Federal
agencies and programs to continue in operation until regular
appropriations acts are enacted.

A.17 **Control Account**. A major budgetary account identified in the
Strategic Planning Guidance (SPG). These controls are used to set the
budget accounts in the finance system (N2). CAMs must ensure that these
dollar amounts match in NASA budget formulation system and the Program
Analysis and Alignment (PAA) Reports submitted to PA&E. Changes to
controls for dollar amounts and Full-Time Equivalents (FTEs) are
identified in the Program Decision Memorandum (PDM) and Programmatic and
Institutional Guidance (PaIG).

A.18 **Control Account Managers (CAMs)**. Senior Agency officials who
manage major budgetary accounts and are responsible for development and
execution of the budget content for those accounts. Specific CAMs are
identified by title in the SPG.

A.19 **Cost**. The price or cash value of the resources used to produce
a program, project, or activity. OMB Circulars providing instructions on
estimating specific types of cost are listed in the terms section of OMB
Circular No. A-11. Costs may be directly associated with a specific
program or project or they may be indirect and assessed to programs and
projects based on predetermined criteria.

A.20 **eBudget**. The on-line system containing budget information and
guidance, accessible only by authorized NASA employees.

A.21 **Fiscal Year**. The Government's accounting period. The Federal
Government's fiscal year begins on October 1 of one calendar year and
ends on September 30 of the following calendar year. It is designated by
the calendar year in which it ends.

A.22 **Full Cost**. The total cost to the Agency to conduct a program or
project. Full cost includes costs directly attributable to the program
or project, such as program contracts, an appropriate share of Center
and Agency-wide overhead costs, and the costs of any shared services
that the program or project utilizes.

A.23 **Full-Time Equivalent (FTE)**. The basic measure of the levels of
employment used in the budget for civil servants. It is defined as the
number of total hours worked divided by the maximum number of
compensable hours in a fiscal year. The number of compensable hours in
the relevant fiscal years is provided in OMB Circular No. A-11.

A.24 **MAX**. The OMB information system that is used to collect and
process much of the information required from each Agency for preparing
the Federal budget. MAX consists of a series of schedules that are sets
of data within the MAX database. Each schedule describes a view or slice
of the President's budget.

A.25 **Mission**. A major function or operation of the Agency and the
highest activity level of the NASA budget framework. Missions are
required to accomplish an Agency goal or effectively pursue a
scientific, technological, or engineering opportunity directly related
to an Agency goal. In a broader context, mission refers to the purpose
of the Agency. NASA's Mission Statement is: "To pioneer the future in
space exploration, scientific discovery, and aeronautics research."

A.26 **New Obligational Authority (NOA)**. Budget authority contained in
NASA's current fiscal year appropriations act.

A.27 **NASA Five Year Plan (NFYP)**. NASA submits its CBJ with a budget
runout and justification that covers the budget year plus five
additional years.

A.28 **Obligation.** A binding agreement that will result in outlays,
immediately or in the future. Budgetary resources must be available
before obligations can be incurred legally.

A.29 **Outlay**. A payment to liquidate an obligation. 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.

A.30 **Outyears**. The fiscal years following the budget year. Budget
development typically includes four outyears.

A.31 **Passback**. OMB's notification to agencies of budget, management,
and policy decisions following its analysis and review of all Agency
budget submissions. Passback data is pre-decisional in nature, and
confidentiality must be maintained.

A.32 **Pre-decisional Data**. Data developed during the Strategic
Planning Guidance development and the Programming and Budgeting Phases,
including the nature and amounts of the President's decisions and
underlying materials. This data is confidential. It may not be released
outside of the Agency until transmitted to Congress, and the material
underlying those decisions should not be released at any time except in
accordance with OMB Circular No. A-11, Section 22. Outyear discretionary
data is also considered pre-decisional and may not be released without
prior OMB approval. OMB Memorandum
[M-01-17](http://www.whitehouse.gov/omb/memoranda/m01-17.html), dated
April 25, 2001, emphasizes the need for confidentiality of
pre-decisional information.

A.33 **Program**. A strategic investment by a Mission Directorate or
Mission Support Office that has defined goals, objectives, architecture,
funding level, and a management structure that supports one or more
projects. Additional information on programs may be found in NPR 7120.5,
"NASA Program and Project Management Processes and Requirements."

A.34 **Program Financial Plan (PFP)**. A detailed budget request
presented in the work breakdown structure.

A.35 **Project**. A specific investment identified in a Program Plan
having defined goals, objectives, requirements, lifecycle cost, a
beginning, and an end. A project yields new or revised products or
services that directly address NASA\'s strategic needs. They may be
performed wholly in-house, by government, industry, academia
partnerships, or through contracts with private industry. Additional
information on projects may be found in NPR 7120.5.

A.36 **Settlement**. After passback OMB provides a letter to the Agency
indicating all final decisions to prepare the President's Budget
Request.

A.37 **Supplemental**. An appropriation request submitted after
completion of action on an annual appropriations bill by the
Appropriations Committees of both Houses.

A.38 **Theme**. An element of the NASA budget structure that divides the
NASA Mission into strategic categories of one or more programs (e.g.,
Earth Science, Heliophysics, Planetary Science, and Astrophysics are
NASA themes that fall under its Science Mission Directorate).

**APPENDIX B. Acronyms/Initialisms**

AM&O Agency Management and Operations

APP Annual Performance Planning

ASP Acquisition Strategy Planning

CBJ Congressional Budget Justification

CM&O Center Management and Operations

CoF Construction of Facilities

CAM Control Account Manager

CFO Chief Financial Officer

OGC Office of the General Counsel

FTE Full Time Equivalent

FY Fiscal Year

GPRA Government Performance and Results Act

MAX OMB's computer system for budgeting submissions

MD Mission Directorate

MSO Mission Support Office

NOA New Obligational Authority

NPD NASA Policy Directive

NPR NASA Procedural Requirements

OCFO Office of the Chief Financial Officer

OLIA Office of Legislative and Intergovernmental Affairs

OMB Office of Management and Budget

OMC Operations Management Council

OPII Office of Program and Institutional Integration

PAA Program Analyses and Alignment

PA&E Office of Program Analysis & Evaluation

PaIG Programmatic and Institutional Guidance

PDM Program Decision Memorandum

PFP Program Financial Plan

PMC Program Management Council

PPBE Planning, Programming, Budgeting, and Execution

PRG Program and Resource Guidance

SBDR Strategic Budget Decision Review

SMC Strategic Management Council

SPG Strategic Planning Guidance

U.S.C. United States Code

WCF Working Capital Fund

# **APPENDIX C. Description of Authority and Applicable Documents**

**A.1 Authority**

a\. **The Budget and Fiscal, Budget, and Program Information (31 U.S.C.,
Chapter 11)**. This law provides additional statutory requirements
concerning the preparation and submission of Federal budgets, as
described below.

\(1\) **Sections 1104 and 1105**. These sections require that the
President prepare and submit a budget of the United States Government
for the following fiscal year. In addition, Section 1104 directs each
Agency to provide information required by the President in carrying out
budget responsibilities and prescribes that the President has access to,
and may inspect, the records of an Agency.

\(2\) **Section 1108**. This section requires the Administrator, as the
head of NASA, to prepare and submit to the President each appropriation
request for the Agency. The request shall be prepared and submitted in
the form prescribed by the President and by the date established by the
President.

\(3\) **Section 1109**. This section also requires that the President
submit to both Houses of Congress the estimated budget outlays and
proposed budget authority that would be included in the budget for the
following fiscal year if programs and activities of the United States
Government were carried out during that year at the same level as the
current fiscal year without a change in policy.

b\. **Chief Financial Officers Act of 1990, Public Law 101-576**. This
law amended 31 U.S.C. to improve financial management in the Federal
government, establishing a CFO within each major executive Agency and
setting forth the responsibilities of that position, which include
maintaining reliable information for the development of cost information
and developing the Agency financial management budgets.

c\. **Consolidated Appropriations Resolution, 2003, Public Law 108-7 (42
U.S.C. § 2459i)**. This law established the NASA Working Capital Fund
(WCF) and how it may be used.

d\. **Government Performance and Results Act of 1993, Public Law
103-62**. This law amended 31 U.S.C. to add additional responsibilities
for performance reporting. The law requires agencies to prepare
strategic plans, annual performance plans, and annual performance
reports. The annual performance plan must cover each program activity
set forth in the budget of such Agency, including a description of the
operational skills and technology, human capital, information, or other
resources required to meet the performance goals.

e\. **Information Technology Management Reform Act of 1996
(Clinger-Cohen Act), Public Law 104-106, Division E**. This Act requires
the Director of OMB, as part of the annual budget process, to analyze,
track, and evaluate the risk of all major capital investments made by
Executive agencies for information systems. It also requires the OMB
Director to submit a report to Congress on the net program performance
benefits achieved as a result of major capital investments made by
Executive agencies in information systems and identify how the benefits
relate to the accomplishment of the goals of the Executive Agency.

f\. **National Aeronautics and Space Act of 1958, Public Law 85-568 (42
U.S.C., Chapter 26)**. This law, referred to as The Space Act,
established NASA as a Federal agency, outlining the objectives of United
States aeronautical and space activities and authorizing NASA to enter
into activities which require financial support functions subject to ADA
requirements, such as contracting, hiring employees, constructing
facilities, and accepting gifts and donations.

g\. **OMB Circular No. A -11, *Preparation, Submission, and Execution of
the Budget***. This Circular provides an overview of the Federal budget
process. It discusses the basic laws that regulate the budget process
and the terms and concepts needed to understand the budget process. It
explains development of the President's Budget and how each Agency is to
prepare and submit materials required for OMB and Presidential review of
Agency requests and for formulation of the annual budgets. This Circular
is revised annually.

h\. **OMB Circular No. A -19, *Legislative Coordination and
Clearance***. This Circular outlines procedures for the coordination and
clearance by OMB of Agency recommendations on proposed, pending, and
enrolled legislation and includes instructions on preparation and timing
of Agency legislative programs. Two of the essential purposes for
requiring agencies to submit annual legislative programs are to help
agencies coordinate the legislative program with the preparation of
their annual budget submissions to OMB and to aid OMB and other staff of
the Executive Office of the President in developing the President\'s
legislative program and budget.

i\. **OMB Circular No. A -25, *User Charges***. This Circular
establishes Federal policy regarding fees assessed for Government
services and for sale or use of Government goods or resources and will
apply whenever the Agency undertakes activities that involve user
charges. It provides information on the scope and types of activities
subject to user charges, the basis upon which user charges are to be
set, and guidance on Agency implementation of charges and the
disposition of collections. Agency estimates for reimbursable budget
authority must meet the requirements of this Circular.

j\. **NPD 9010.2, "Financial Management."** This NPD establishes that
the Agency CFO directs, manages, and provides policy guidance and
oversight of Agency financial management personnel, activities, and
operations.

**A.2 Applicable Documents**

a\. **NPD 1000.0, "NASA Governance and Strategic Handbook."** This
handbook sets forth the principles by which NASA will strategically
manage the Agency, describes the means for doing so, and identifies the
specific requirements that drive NASA's strategic planning process.

b\. **NPD 1000.3, "The NASA Organization."** This policy defines the
NASA organization and assigns the roles and responsibilities necessary
to achieve NASA's vision and mission.

c\. **NPD 1001.0, "NASA Strategic Plan."** The Strategic Plan documents
the Agency's long-term goals, articulated in a coherent plan that
establishes the framework under which NASA may achieve its vision "to
advance U.S. scientific, security, and economic interests through a
robust space exploration program."