# Presentation: 548543

## Budget Process 101

- Presented by**Donald Bice Deputy Director, OBPA**

## USDA is a Large and Complex Organization

**Program Level = almost $124 billion in FY 2007**
**Would rank as 9th largest U.S. corporation**
**Outlays = $84.4 billion in Fiscal Year 2007**
**USDA budget is the 5th largest in the Federal Government**
**Staff Years = 104,305**
**USDA is the 6th largest employer in the Federal Government**
**Loan Portfolio = $127 billion**
** ****Would rank as 8th largest bank**

- Office of the Chief Financial Officer

- Office of the Chief Financial Officer

## Slide 4

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## Slide 5

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## What is the budget process?

- Shakespearean Drama
- Tug-of-War Contest
- Piece of cake
- All of the Above
- None of the Above

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## To fund or not to fund (and HOW).

*  **That is the REAL question.*

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## OBPA’s Responsibilities

- Develop, Present and Execute the Department’s Budget
- Provide Budget Analysis to Policy Officials
- Improve coordination and analysis of USDA’s legislative and regulatory programs
- Work with USDA agencies to provide guidance and obtain information throughout the process

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## Three Budget Process Stages

- Formulation
- Congressional Action
- Execution

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## Formulation

- Classic Economics
- Policy and Priority Setting

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## USDA Budget Considerations

- Considerations Include:
- Key Administration and Secretarial Priorities
- Pay Costs (general pay raise)/Inflation/Other Uncontrollable Increases
- Continuing Commitments- e.g., Homeland Security
- Strategic Goals and Performance Indicators

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## Budget Formulation Happens in a Dynamic Environment

- Formulating FY 2010 Budget
- Congressional Action on FY 2009
- Agencies Executing FY 2008

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## USDA Budget Preparation

**General Timeframe for the USDA Budget Formulation Process**
**June**  		Agency Budgets are Due to OBPA
**June/July** 	Deputy Secretary Meets with Subcabinet
**July** 		Initial Funding Decisions and Appeals Process
**Early Aug.****	**Final Allowances Provided to Subcabinet
**Early Sept.** 	USDA Submits Budget Request to OMB

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## OMB’s Role

- Oversees preparation of the Federal Budget
- Formulates the President’s spending plan
- Evaluates the effectiveness of programs
- Sets funding priorities
- Assesses competing funding needs among Agencies
- Provides Economic assumptions to Agencies
- Supervises Budget Execution
- OMB works with Treasury on Account Structure, and approvals of funding amounts and transfers
- Ensures that Agency reports, rules, testimony, and proposed legislation are consistent with the President’s Budget and with Administration policies

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## USDA Budget Preparation

**Late Nov.** 	OMB Provides Passback – USDA 				Submits Appeals to OMB
**December ****	**Details of President’s Budget Finalized
**January** 	Budget Data Entered Into OMB 					System (MAX) and Supporting Materials 			Prepared (Explanatory Notes, Testimony, Briefing 		Books)
**February** 	President’s Budget Transmitted to 				Congress and Released to the Public

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## Congressional Action

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## Legislative Branch Role

- Authorize Programs
- Establish Annual Spending Levels – Budget Committees
- Appropriate Funds – Appropriations Subcommittees

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## Congressional Action

- OBPA serves as the main contact for the Appropriation Subcommittees for:
- Submission of the Congressional Justifications (Explanatory Notes) in support of the President’s budget;
- USDA Reprogramming Requests; and
- Testimony and questions for the record for appropriations hearings.

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## Congressional Action

**February** 	  Congressional Budget Office reports to the Budget 		  Committees on the President’s Budget
**Late February/ ****	****  **Congressional Hearings
**April**
**May****	****	****  **Budget Resolution, Appropriations Bills
**to September**

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## The Budget Resolution

-  A “joint resolution”- a Congressional agreement that the President doesn’t sign
- Begins after President submits the budget
- Budget Committees Begin

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## What does it do?

- The Budget Resolution:
- Sets the “size of the pie” for discretionary spending
- Establishes Congress’ take on where not how to spend funding (by function)
- Each Appropriation Subcommittee expected to hold to what the budget committee provides through the 302(b) allocation
- Initiates possible changes to mandatory spending (optional)

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## Appropriations Subcommittees

- USDA funding provided in two appropriations bills through two subcommittees:
- House and Senate Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; and
- House and Senate Subcommittees on Interior, Environment, and Related Agencies

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## Appropriations Subcommittees

- Holds Hearings beginning in February through May
- Provides follow-up Questions for the Record
- Subcommittee Mark-up May/June
- Full Committee Mark-ups follow
- House normally acts first

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## Congressional Action

- If Congress fails to enact an appropriations bill, they must pass a Continuing Resolution to keep programs funded or risk a Government shutdown
- Once Congress takes action on the budget and enacts appropriations legislation, budget execution begins

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## Budget Execution

- OBPA is the primary contact for the Department of Treasury and the Office of Management and Budget on:
-  Warrant Requests
- Apportionment and Reapportionments (SF-132) Requests
- Transfer Requests (SF-1151)

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## Budget Execution

- Agency Budget Officers prepare and sign requests for Apportionment and Reapportionment (SF-132), which must be validated through the OMB Apportionment MAX application and emailed to OBPA (usdaapportionments) for Departmental clearance prior to transmittal to OMB
- OBPA reviews, approves and signs SF-132s prior to submittal to OMB for signature

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## Advice of Allotments

- OBPA prepares the Advice of Allotments to transmit approved execution documents to Agency Heads
- Agencies then take over the budget execution phase from here, including further allotting funds to programs, area offices, regions, etc.

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## Avoid Anti-Deficiency Violations

- When executing budgets agencies must be aware of OMB apportionment limitations.
- Recently OMB has taken to adding footnotes to SF-132’s that prevents an agency from obligating funds until some action occurs, such as submittal of a requested report to OMB.
- Agencies should take care to note these limitations when executing budgets, because footnotes can cause violations of the Anti-deficiency Act.  These violations are serious.  They can result in disciplinary action, and require notification to the Congress that a violation has occurred.

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## FY 2009 Budget

- FY 2009 Budget Submitted to Congress on    February 4, 2008
- Congress passed --just last week-- the FY 2009 Budget Resolution setting spending targets for Appropriations Committees
- House Interior Appropriations Subcommittee marked up on June 11.
- Agriculture Appropriations Subcommittee expected to mark up on June 19.

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## FY 2010 Budget Outlook

- FY 2010 budget process different from a typical budget development process.
- OMB expects the Department to submit a Current Services Budget in September.
- The next Administration will be submitting the          FY 2010 budget.

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