# Presentation: 115003

## Project ManagementGovernment Specific Course I

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- Project ManagementGovernment Specific Course I

## Module 11 –Department/Agency Programming, Planning, and Budgeting Type System (OMB A-11)

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- Module 11 –Department/Agency Programming, Planning, and Budgeting Type System (OMB A-11)

## 
Topic 1 -
Introduction/Objectives

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- Topic 1 -
- Introduction/Objectives

## Using Taxpayer Money

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- Appropriation is the means of providing budget authority or funding for your project.
- Federal government uses the Planning, Programming, Budgeting, and Execution (PPBE) process
- Have to build a project plan and use it in a way that is consistent with constraint of money lifecycle
- Process unique for the government

## Learning Objectives

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- Describe the process of fund allocation within appropriation categories
- How funds are assigned to different appropriation categories and allocated for projects
- Explain the process of budget development and execution
- PPBE process for planning, programming, budgeting, and executing a project

- At the end of this module, you will be able to:

## Learning Objectives (cont.)

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- Discuss the documentation process, which are employed in development and decision making of a Department/Agency’s total federal fiscal activity for a given fiscal period
- OMB A-11 policy for documenting the PPBE process

- At the end of this module, you will be able to: (continued)

## Question

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- Where does the idea for the appropriation of funds in the government come from?

## 
Topic  2 - 
Appropriation Categories for the Allocation of Funds

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- Topic  2 -
- Appropriation Categories for the Allocation of Funds

## Appropriation Categories

- Three major appropriation categories:
- Research, Development, Test, and Evaluation (RDT&E)
- Procurement
- Operation and Maintenance (O&M)
- These categories are often referred to as the “colors of money”

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## RDT&E

- Funds the following activities:
- Development of equipment, material, or computer application software
- Development Test and Evaluation (DT&E)
- Initial Operational Test and Evaluation (IOT&E)
- Operation costs for some R&D dedicated installations

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## Procurement

- Funds the following items/activities:
- Purchase of major end items and systems
- Initial issue of spares for above items
- All costs necessary to deliver a useful end item intended for operational use or inventory
- Major modifications to fielded systems

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## O&M

- Funds the following items/activities:
- Day-to-day operations
- Salaries
- Training and education
- Travel
- Fuel
- Furniture, equipment, and tools

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## Color of Money

- Commit: Send request to budget person and mark X amount that you are going to spend
- Obligate: Putting money into a contract
- Spend: Pay for Project X
- De-obligate: If money has not been spent, it can be de-obligated

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- It is prudent to understand what color of money we are spending.

## Color of Money (cont.)

- Liquidate: As you spend money, the contractor gets paid, you are liquidating the obligation.
- Maximum of 5 years to liquidate the obligation

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## Obligation Period

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| Appropriation Categories | Obligation Period |
| --- | --- |
| RDT&E | 2 Years |
| Procurement | 3 Years |
| Operations & Maintenance | 1 Year |

## Funding Policies

- Specify how each agency computes the budget request for each category
- Funding policies:
- Incremental Funding
- Full Funding
- Annual Funding

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## Which Policy Should You Use?

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| Appropriation Categories | Funding Policy |
| --- | --- |
| RDT&E | Incremental |
| Procurement | Full |
| Operations & Maintenance | Annual |

## Annual Funding

- All money needed for Fiscal Year
- Have to show a bona fide need for that fiscal year

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## Incremental Funding

- Example: You signed a $50,000 contract to develop something, but you do not have to fund everything all at once.
- Procurement Offices want you to obligate up front, and in later years pay incrementally
- Time-and-materials contract- can still fund incrementally

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## Full Funding

- All money needed for 12 months
- The 12 months can start any time

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## Take Away 

- The money expires
- Limited time to spend it
- Be nice to B+F
- At the Agency level- all kinds of different levels of forms and documents

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- Colors of money have restrictions. Knowing those colors allows you to plan accordingly.

## Question

- As an example, how would we construct a funding profile for the development and delivery of 190 new hydrogen powered vehicles for the National Park Service?
- Assume that development costs $10 million and takes two years and that production is at the rate of 10 vehicles per month.

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## 
Topic 3 – 
The PPBE Process

- Topic 3 –
- The PPBE Process

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## Allocation of Funds

- After the project office identifies how much funding is needed the next step is to request funds
- PPBE Process is used to identify fiscal needs or the services and how to allocate resources
- Annual balancing act between requirements competing for limited funds

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## Allocation of Funds (cont.)

- When determining preference, project manager will debate:
- What is more important?
- What is the degree of difficulty?
- What is the history of the project?
- What are the politics around your office?
- Appropriation categories are major funding classes which Congress provides funds for

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## OMB A-11 Part 3

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- Key circular containing policy for documentation during this process
- Written to improve project management
- Provides guidance on planning, budgeting, and acquisition of capital assets
- Requires documentation of these in budget submissions to OMB
- Includes guidelines for planning

## Need for Improvement

- National Performance Review in 1993 and recent legislation suggest this point
- OMB issued guidance on asset acquisition, conducted crosscutting reviews, and addressed asset acquisition
- GPRA (Government Performance and Results Act) and FASA (Federal Acquisition Streamlining Act) created statutory performance
- Part 3 encourages focus on the importance of capital assets in carrying out your agencies mission

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## FASA and GPRA

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- FASA requires OMB to report on cost, schedule, and performance goals for asset acquisitions
- GPRA requires you to develop mission statements, long rage strategic goals and objectives, and annual performance plans
- OMB published the *Capital Programming Guide* (June 1997) for further guidance

## Initial Budget Submission

- Include:
- Information of the impact of full funding of capital assets now funded incrementally
- Capital asset plan
- Guidelines contained in OMB A-11 Part 300

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## OMB A-11

- Form for big projects
- Each agency has different people who fill out this form
- Form goes to OMB- annual report
- Used for both Programs and Projects
- Only affects a small fraction of work

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## OMB A-11 (cont.)

- Presents unified guidance designed to coordinate OMB’s collection of agency information
- Ensures that your acquisition plans support the mission statements long-term goals
- Allows OMB to carry out responsibilities under FASA without issuing additional central guidance

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## OMB A-11 (cont.)

- Follow “Principles of Budgeting for Capital Asset Acquisitions”
- Located in appendix 300A.
- Also, use additional guidance in 300B.

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## 
Topic 4 –
Review

- Topic 4 –
- Review

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## Learning Objectives

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- Discuss the documentation process, which are employed in development and decision making of a Department/Agency’s total federal fiscal activity for a given fiscal period.
- Explain the process of budget development and execution.
- Describe the process of fund allocation within appropriation categories.

- Recall the learning objectives for this module:

## Key Points

- Means of providing budget authority or funding for your project
- PPBE Process
- Appropriation Categories:
- Research, Development, Test and Evaluation (RDT&E)
- Procurement
- Operation and Maintenance (O&M)

## Key Points (cont.)

| Appropriation Categories | Obligation Period |
| --- | --- |
| RDT&E | 2 Years |
| Procurement | 3 Years |
| Operations & Maintenance | 1 Year |

## Key Points (cont.)

| Appropriation Categories | Funding Policy |
| --- | --- |
| RDT&E | Incremental |
| Procurement | Full |
| Operations & Maintenance | Annual |

## Key Points (cont.)

- After needed funding is identified, it must be approved by:
- Service/agency
- Department or Agency
- PPBE process used to identify fiscal needs
- Competition happens!