rc- ._ 

Third Edition 

A Glossary Of 

Terms Used In”The 

Federal Budget Process 

And Related Accounting, Economic, and Tax Terms 

March 1981 

United States General Accounting Office 

Washington, D.C. 

PAD-8 I-27 
Library of Congress Cataloging in Publication Data 

Main entry under title: 

A Glossary of terms used in the federal budget process and related 

accounting, economic, and tax terms. 

“March 1981.” 

“PAD-8 l-27.” 

Previous ed. published in 1977 as: Terms used in the budgetary 

process. 

Bibliography: p. 

Includes index. 

1. Budget-United States-Dictionaries. 2. Finance, public-United 

States-Dictionaries. I. United States. General Accounting Office. II. 

Terms used in the budgetary process. 

HJ2052.G6 198 1 353.0072’2’032 1 8 l-607987 
FOREWORD 

The Federal budget amounts to about one-fifth of our nation’s gross national product. As 

the basic planning document of the United States Government, it exerts a strong influence 

on our economy and represents countless decisions made by the American people through 

their elected representatives- decisions that affect present and future resources of all 

kinds. The budget is the principal policy statement of the President’s fiscal priorities and 

proposals for allocating expenditures and taxes to promote a vigorous economy. The annual congressional review of the budget gives Congress the opportunity to endorse or 

modify the President’s proposals and to judge the effectiveness of Federal programs. 

Since the Federal budget process involves making decisions about social and economic 

issues that affect all Americans, a prerequisite to participating in those decisions is an 

understanding of how the budget process works. With this objective in mind, in 1974 

Congress directed the Comptroller General of the United States to publish standard terminology, definitions, classifications, and codes for Federal fiscal, budgetary, and 

program-related data and information.’ 

This third edition of A Glossary of Terms Used in the Federal Budget Process is part of 

the General Accounting Office’s (GAO) efforts to fulfill its statutory responsibilities. Our 

purpose is to provide a basic reference document of standardized definitions for use by 

Congress, Federal agencies, and all others interested in the process of Federal budgetmaking and to improve communication between the Government and the public. As in OUI 

previous editions,’ the emphasis here is on budget terms, but relevant accounting, 

economic, and tax terms are also defined to help the user appreciate the dynamics of the 

process. For this edition, we have updated and expanded all the terms published in 1977 

and have added 97 terms to the budget section. New features in this edition of the 

Glossary are an illustrated overview of the Federal budget process and four appendixes 

that supplement many of the definitions. 

The Glossary is by no means an exhaustive list of all budget terms; our decision to include 

a term rested primarily on whether the term is frequently used. The Department of the 

Treasury, the Office of Management and Budget (OMB), and the Congressional Budget 

Office (CBO) helped us choose and define the terms, and they thoroughly reviewed our 

first and second drafts for accuracy, precision, and clarity. Suggestions were also pro- 

‘The Legislative Reorganization Act of 1970, as amended by Title VIII of the Congressional Budget and Impoundment Control Act of 1974. 

*U.S. General Accounting Office, Eudgerory Definitions, OPA-76-8, Nov. 1975; Terms Used in rhe Hudgerary Process, PAD-77-9, July 1977. 
vided by many congressional committees, the Congressional Research Service, and individual budget experts. The work of compiling the Glossary was done by the program 

and budget information group of GAO’s Program Analysis Division. 

We welcome users to recommend changes to the definitions and to suggest additional 

terms to be included in future editions. 

ELMER B. STAATS 

COMPTROLLER GENERAL OF THE 

UNITED STATES 
CONTENTS 

fFOREWORD 

OVERVIEW OF THE BUDGET PROCESS 

INDEX OF TERMS 

DEFINITIONS 

-Budget Terms 31 

-Accounting Terms 85 

-Economic Terms 91 

-Tax Terms 103 

APPENDIXES 

A. Federal Budget Documents 

B. Budget Functional Classification 

C. Budget Account Identification Code 

0. Program & Financing’ Schedule 

BIBLIOGRAPHY 

3 

21 

107 

109 

131 

133 

135 

r OVERVIEW 

Overview of the Federal Budget Process 

i 

._ 

L .- 

The Federal budget, like all public budgets, reflects what is proposed to be done for a 

specific period of time in the future, usually 12 months. It is a plan concerned with 

managing public funds, and it deals with how much Government will spend and how 

those expenditures will be financed. When passed by Congress and signed by the President, the budget becomes law. The amount of funds specified in the legislation is then 

legally binding for all Federal agencies for a given fiscal year, Agencies cannot spend more 

than is specified unless they are able to get supplemental or deficiency appropriations 

through the same legal channels as the original budget. 

The budget, of course, is much more than a legally binding financial plan. Since funds are 

always limited, the act of budgetmaking becomes a process of choosing among alternative 

expenditures, and the budget document itself becomes a description of national goals and 

priorities. The budget process, then, entails political decisions (choices) as well as financial and economic analyses. In the United States that process is lengthy and complex. 

What our Federal budget actually contains in any given fiscal year is the result of the interplay between the executive branch, and its many departments and agencies, and Congress, with its system of committees and subcommittees. 

Although the Constitution (Article I, section 1) gives Congress the responsibility for 

budget decisions, by law the executive branch is charged with preparing and submitting 

the budget. Under the Budget and Accounting Act of f921, every year the President 

transmits a proposed Federal budget to Congress within 15 days after it convenes in the 

new calendar year. Until 1976, the President’s annual budget message contained the pro- 

,posed budget for the fiscal year that began July 1 and ended June 30. The Congressional 

Budget and Impoundment Control Act of 1974 (P.L. 93-344) changed those dates. The 

Federal fiscal year now runs from October 1 through September 30. The Act has not 

directly altered the executive budget process- agency officials continue to channel then 

budget requests through the cabinet level, and in turn through the Office of Management 

and Budget, which reviews the requests in light of the President’s proposed budget initiatives-but the Act has strengthened the legislative side of budgetmaking by introducing changes that have helped Congress form a clearer perspective of fiscal policy requirements. 

Although Federal budgeting is a continuous process, it can be understood and studied in 

terms of four phases: (1) executive preparation and submission, (2) congressional action 

or the congressional budget process, (3) implementation and control of the enacted 

budget, and (4) review and audit. Our discussion of these phases augments Figure 1, 

which describes and identifies the activities and actors in the Federal budget process. Most 

of our discussion is devoted to phase 2 because, with the passage of the 1974 Budget Act, 

Congress acquired a new budget process. Rather than acting on the executive’s budget 

3 
Overview 

I-- 

Executive Branch Budget Timetable 

Timing Action to be completed: 

April-June (March). . . . . Conduct spring planning review to establish 

presidential policy for the upcoming budget. 

June . . . . . . . . . . . ., . . . . . OMB sends policy letters to the agencies. 

September 1 . . . . . . . . . . . Smaller agencies submit initial budget request 

materials. 

September 15 . . . . . . . . . . Cabinet departments and major agencies submit 

initial budget request materials. 

October 15 . . . . . . . . . . . . Legislative branch, judiciary, and certain agencies 

submit initial budget request materials. 

SeptemberJanuary 

(September) . . . . . . . OMB and the President review agency budget 

requests and prepare the budget documents.. 

January. . . . . . . . . . . . . . . The President transmits the budget during the 

first 15 days of each regular session of Congress. 

January-February . . . . . . OMB sends allowances letters to the agencies. 

April 10 (February) s . . . . The President transmits an update of the budget 

estimates. (Note: transmittal is often requested to be made earlier than the required 

date.) 

July 15 (June) . . . . . . . . . The President transmits an update of the budget 

estimates. (Note: transmittal is often requested to be made earlier than the required 

date.) 

Source: OMB Circular No. A-I 1, Rev. (June 3, 1980) 

4 
Overview 

Iproposals in a piecemeal fashion, Is had been done in the past, Congress now has a system 

for looking at the budget as a unified proposal early in the budget cycle. The Act has given 

both Houses the opportunity to determine if the budget is consistent with national 

priorities. 

Phase 1: Executive Preparation and Submission 

Preparing the President’s budget starts many months before it is submitted to Congress in late January. Formulation begins at the agency level, where individual 

organizational units review current operations, program objectives, and future plans 

in relation to the upcoming budget. Throughout this preparation period, there is a 

continuous exchange of information among the various Federal agencies, OMB, and 

the President. Agency officials receive help in the form of revenue estimates and 

economic outlook projections from the Treasury Department, the Council of 

Economic Advisers, the Departments of Commerce and Labor, and OMB. The 

budgettimetable above highlights the key steps involved in preparing the President’s 

budget and transmitting it to Congress. The months idparentheses indicate when 

agencies are expected to submit review materials to OMB. 

Phase 2: The Congressional Budget Process 

(An Illustrative Overview) 

The Budget of rhe United Stares Government, published each January, contains the 

President’s proposals for the Federal Government’s outlays and budget authority 

for the ensuing fiscal year. Congress can act as it wishes on these proposals. It can 

change funding levels, modify or eliminate programs, or add new ones not requested 

by the President, and it can act on legislation determining tax rates. The final outcome of Congress’ actions is the expenditure (outlay) of Federal funds. However, 

Congress does not act (vote) on outlays directly, but rather on requests for budget 

authority. Through the appropriations bills it passes, Congress grants budget 

authority to agencies, which permits them to incur obligations and hence to spend 

Federal funds. 

i ----- 

Before a request for budget authority can be considered, Congress must first enact 

legislation authorizing an agency to carry out a particular program, such as revenue 

sharing or food stamps. Authorizing legislation can set a limit on the funds for a 

given prograni or call for “such sums as may be necessary,” but it cannot stipulate 

the dollar amount to be spent on the program. Some major programs, like space, 

5 
Overview 

fdefense procurement, and foreign affairs, are reauthorized by the standing 

legislative committee every year, while other programs are authorized for several 

years in advance. 

How much money each department, agency, or program receives is determined by 

the House and Senate Appropriations Committees and their subcommittees, each of 

which has jurisdiction over specific numbers of Federal agencies. Money bills (i.e., 

appropriations) may be for 1 year (the most common form), which allows an agency 

to spend only during 1 fiscal year, or they may be multiyear appropriations. The 

Constitution requires that all revenue (tax) bills originate in the House, and by 

custom the House also originates appropriations measures.’ 

Since appropriations are not usually considered until authorizing legislation is 

passed, in recent years many Federal agencies have received their appropriations 

after the new fiscal year has begun. When an agency does not receive its appropriation before the old one lapses, it operates under a continuing resolution passed by 

Congress. A continuing resolution usually allows an agency to spend at the previous 

year’s rate. 

The 1974 Budget Act has introduced the following changes into the congressional 

budget process: 

1) It requires Congress, before it enacts any appropriation bills, to adopt concurrent budget resolutions. The first resolution sets target totals for budget 

authority, outlays, receipts, and the public debt. These targets serve as a 

guide for Congress’ subsequent considerations of appropriations and tax 

measures. The resolution also subdivides the targets into 17 functional 

spending categories, such as defense and health, which represent broad national priorities. 

2) It established the House and Senate Budget Committees and has charged 

them with the responsibility of reporting the concurrent budget resolutions. 

The Committees also keep track of individual authorization, appropriations, and revenue decisions that Congress makes during the budget process. 

r-- ‘Passage of revenue bills follows the same general procedure as appropriation bills, except that revenue 

measures are reported by the Ways and Means Committee in the House and by the Finance Committee in 

the Senate. 
‘r ------I 

I i 

Figure 1. The Federal Budgetmaking Process 

-- --I 

SUMMARY OF MAJOR STEPS IN THE BUDGET PROCESS 

Period before the Fiscal Year 

March Nov. Jan. 

Phase l-Executive Preparation & Submission. 

Sept. 30 Nov. 15 

Phase 2-Congressional Budget Process. Includes 

action on appropriations and revenue measures. 

(Beginning 19-l/2 months before fiscal year.)’ 

I Phase 3%Implementation & Control 

of Enacted Budget. (During fiscal year.) 

I 

Phase 4- cl Review & 

Audit 

‘The President’s budget is transmitted to Congress within 15 days after Congress convenes. 

‘If appropriation action is not completed by Sept 30, Congress enacts temporary appropriation (i.e.. continuing resolution). 
” -----T 

i 

PHASE I --EXECUTIVE PREPARATION .ANf) SUBMISSION 

APPROXIMATE OFFICE OF 

TIMING AGENCY MANAGEMENT AND BUDGET THE PRESIDENT 

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r--l I i 

E; PHASE 2-CONGRESSIONAL BUDGET PROCESS 

APPROXIMATE TIMING 

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;J PHASE 3-IMPLEMENTATION AND CONTROL OF ENACTED BUDGET 

APPROXIMATE TIMING 

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FUNDS MADE AVAILABLE 

I 

AUG.-SEPT. I ef t 1 

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-- 

7 

PHASE 4-REVIEW AND AUDIT 

APPROXIMATE TIMING 

TREASURYGENkRAL AGENCY OFFICE OF 

ACCOUNTING OFFICE MANAGEMEy$#ND BUDGET 

PROGRAM EVALUATION, MANAGEMENT APPRAISAL, AND INDEPENDENT AUDIT 

Periodic 
Overview 

3) By creating the Congressional Budget Office (the congressional counterpart 

to OMB) and granting it broad authority to obtain data from executive 

agencies, the Act has provided Congress with a mechanism for obtaining 

impartial policy and cost analyses and 5-year budget projections. CBO provides Congress with all available information related to the budget and conducts budget-related studies at Congress’ request. It also monitors individual spending bills and issues periodic scorekeeping reports showing the 

status of congressional action on these bills. 

4) It has provided Congress with a firm budget timetable that coordinates the 

authorization and appropriations cycles with the overall congressional 

budget as embodied in the concurrent budget resolutions. 

5) It has changed the rules on presidential impoundment of funds by 

establishing a procedure for congressional involvement. The Act requires 

that any money not spent must be reported to Congress in rescission or 

deferral messages. Impoundments take effect unless they are disapproved 

by both Houses within 45 days of the President’s notification. Deferrals 

(temporary withholding of funds from obligation) are effective until overturned by either House. 

The congressional timetable laid down in Title III of the Act is illustrated in Figure 1. 

Congress’ activities with respect to the timetable are summarized below. 

Congressional Budget Timetable 

November 10 

Congressional review of the budget begins when the President submits estimates of 

the current services budget, a 5-year projection of Federal spending based on current 

programs and existing funding levels, exclusive of any new programs. The Joint 

Economic Committee assesses these estimates, spelling out the economic assumptions (inflation, unemployment, rate of economic growth) that underlie them, and 

reports its evaluation to Congress by December 31. Congress uses the current services budget as a basis for examining the President’s January budget submission. 

January (15 days after Congress convenes) 

Following the submission of the President’s budget, the Senate and House Budget 

Committees begin hearings to examine the President’s economic assumptions and 

14 
Overview 

fspending priorities in preparation for drafting the first concurrent resolution on the 

budget. 

March 15 

Authorization and appropriations committees report to the Budget Committees 

their views and estimates of new budget authority to be enacted for the ensuing fiscal 

year. Some committees hold formal markup sessions to draft these views and estimates. The reports are used by the Budget Cqmmittees to gauge the total and functional spending estimates contained in the first concurrent budget resolution. 

April 1 

The Congressional Budget Office submits its report detailing alternative spending 

patterns and revenue levels associated with different budget options and their 

budgetary implications to the Budget Committees. The CBO report, which in theory 

is used in drafting the first budget resolution, presents Congress with spending 

scenarios above and below the President’s. 

April 15 

The Budget Committees of both Houses report the first concurrent budget resolution to Congress. This initial resolution establishes targets for: (a) the appropriate 

level of total outlays (money to be spent in the ensuing fiscal year) and total new 

budget authority (money to be spent in the ensuing fiscal year and in future fiscal 

years) both in the aggregate and by functional category, (b) the appropriate budget 

surplus or deficit, (c) the recommended level of Federal revenues, and (d) the appropriate level of public debt. 

I-. ~---- I 

May 15 

Budget Committees report legislation proposing new budget authority to the House 

and Senate. If a committee fails to meet this deadline, the legislation cannot be considered by the House or Senate unless a waiver is reported by the House Rules Committee or the Senate Budget Committee. 

15 
I- Overview 

May 15 

Congress completes action on the first budget resolution. Until the first budget 

resolution has been finalized, setting a “target” spending ceiling and revenue floor 

for the fiscal year, neit.her House can consider any spending or revenue measures 

that would take effect in that fiscal year. 

September (7th day after Labor Day) 

Congress completes action on all regular authorization and appropriations 

measures. The only exception to this rule is consideration of bills that have been 

delayed because necessary authorizing legislation has not been enacted in time. 

When this happens, Federal departments and agencies exist on “continuing resolutions” -the prior year’s funding levels-until their regular appropriations are 

passed. 

September 15 

There is no deadline for reporting the second budget resolution, but it normally occurs before the annual August recess (or immediately after), and it m::k: ! :* made 

final by September 15. In the first resolution, the total and functional bp-nding 

levels are “targets,” but in the second resolution they are “binding.” This has the 

effect of “locking in” a congressional spending ceiling and revenue floor. Once the 

second budget resolution is in place, no legislation can be passed that would breach 

these limits, unless Congress passes a subsequent budget resolution. 

September 25 

Congress completes final actions on reconciliation for second budget resolution, 

which either affirms or revises the budget targets set in the first resolution. The 

House and Senate Budget Committees report any changes to the floor in the form of 

a reconciliation bill. Congress cannot adjourn for the year until the reconciliation 

legislation is passed. 

October 1 

The fiscal year begins. 

16 
Overview 

Phase 3: lmplementation and Control of the 

Enacted Budget 

After the budget is approved by Congress, the President is responsible for executing 

it. Under law, most of the budget authority granted to the agencies of the executive 

branch is converted into outlays through an apportionment system regulated by the 

Office of Management and Budget. The Director of OMB apportions (distributes) 

budget authority to each agency by time periods (usually quarters) or by activities 

over the duration of the appropriation. This ensures both the economical and effective use of funds and obviates the need for agencies having to ask for supplemental 

authority. However, changes in law or economic conditions during the fiscal year 

may necessitate the enactment of additional budget authority. When this happens, 

supplemental requests are sent to Congress for its consideration. On the other hand, 

the executive branch, under the Antideficiency Act (31 U.S.C. 665), may establish 

reserves to fund contingencies or to effect savings made possible by more efficient 

operations or by changes in requirements. 

Title X of the 1974 Budget Act permits the President to withhold appropriated funds 

for fiscal or other policy reasons, or because the President has determined that all or 

part of an appropriation is not needed to carry out a program. When these circumstances arise, the President sends a special message to Congress requesting that 

the budget authority be rescinded. If Congress does not pass a rescission bill within 

45 days of continuous session, the budget authority is made available for obligation. 

In order to defer-temporarily withhold-budget authority, the President must also 

send a special message to Congress indicating the reasons for the proposed delay in 

spending. Either House may, at any time, pass a resolution disapproving the President’s request for deferral of budget authority, thus requiring that the funds be 

made available for obligation. When no congressional action is taken, deferrals may 

remain in effect until, but not beyond, the end of the fiscal year. If continued deferral is desired into the new fiscal year, the President must transmit a new special 

message to Congress. 

Phase 4: Review and Audit 

Individual agencies are responsible-through their own review and control 

systems-for making sure that the obligations they incur and the resulting outlays 

adhere to the provisions in the authorizing and appropriations legislation, as well as 

to other laws and regulations governing the obligation and expenditure of funds. 

17 
Overview 

fOMB exercises its review responsibility by appraising program and financial reports 

and by keeping abreast of agencies’ efforts to attain program objectives. 

In addition, the General Accounting Office, as an agency responsible to Congress, 

regularly audits, examines, and evaluates Government programs. Its findings and 

recommendations for corrective action are made to Congress, to OMB, and to the 

agencies concerned. GAO also monitors the executive branch’s reporting of 

messages on proposed rescissions and deferrals. It reports to Congress any diffgences it may have with the classifications (i.e., rescissions or deferrals) of the 

President’s requests for withholding funds. ShoJ,tld the President fail to make 

budget authority available in accordance with the 1974 Budget Act, GAO may bring 

civil action to obtain compliance, 

18 
INDEX 
n 
A,, 

I 

GLOSSARY INDEX 

A 

Ability To Pay, 91 

Accounting Systems, 85 

Accounts Payable, 85 

Accounts Receivable, 85 

Accrual Basis of Accounting, 85-86 

Accrued Expenditures, 3 1 

Activity, 3 1 

Advance Appropriation, 3 1 

Advance Funding, 3 1-32 

Advances, 32 

Agency, 32 

Agency Borrowing, see Debt, Federal 

Agency Debt, 53 

Agency Missions, 32 

Allocations, 33 

Allotment, 33 

Allowances, 33-34 

Amendment, see Budget Amendment 

Annual Authority, see One-Year Authority 

Anticipated Reimbursement, see 

Reimbursements 

Antideficiency Act, 34 

Applied Costs, 34 

Apportionment, 34-35 

Appropriations, 42 

Appropriation Account/Fund Account, 35 

Appropriation Act, 35 

Appropriation (Expenditure), Receipt, and 

Fund Accounts, 35-39 

Appropriation Limitation, 39 

Appropriations Warrant, see Warrants 

Assets, 86 

Authority To Borrow, 42 

Authority To Spend Debt Receipts, see 

Authority To Borrow 

Authorizing Committee, 39 

Authorizing Legislation, 39-40 

Automatic Stabilizer, 91 

B 

Backdoor Authority, 40 

Balanced Budget, 40 

Balance of Payments, 91 

Balances of Budget Authority, 40-41 

Basic Law, see Substantive Law 

Benefits to Former Personnel, 70 

Block Grants, see Grants 

Borrowing Authority, see Authority 

To Borrow 

Budget Account I.D. Code, see 

Identification Code 

Budget Activity, 41 

Budget Amendment, 4 1 

Budget Authority, 4 l-44 

Budget Deficit, 44 

Budget Documents, see Appendix A 

Budget Estimates, 45 

Budget Outlays, see Outlays 

Budget Receipts, 47 

Budget Resolution, see Concurrent 

Resolution on the Budget 

Budget Scorekeeping, see Scorekeeping 

Budget Surplus, 45 

Budget Updates, 45 

Budget Year, 60 

Budgetary Reserves, 45 

Built-in-Stabilizer, see Automatic Stabilizer 

Burden Cost, see Indirect Cost 

Business Cycles, 91 

21 
index 

I 

rI --- 

C 

Capital, 91 

Capital Budget, 46 

Cash Basis of Accounting, 86 

Categorical Grants, see Grants 

Change in Selected Resources, 46 

Collections, 46-49 

Collections Credited to Appropriation 

or Fund Accounts, 47-48 

Concurrent Resolution on the Budget, 49 

Congressional Budget, 49-50 

Consolidated Decision Packages, 50 

Consolidated Working Fund Accounts, 37 

Constant Dollar, 92 

Consumer Price Index (CPI), 92 

Contingent Liability, 86 

Continuing Resolution, 44 

Contract Authority, 42 

Controllability, 50 

Cooperative Agreement, 5 1 

Cost Accounting Standard, 86 

Cost-Based Budgeting, 5 1 

Cost-Benefit Analysis, 92 

Cost-Effectiveness Analysis, 93 

Cost, Applied, see Applied Costs 

Countercyclical, 93 

Cross Agency Ranking, 51 

Crosswalk, 5 l-52 

Crowding Out, 93 

Current Authority, 44 

Current Dollar, 93 

Current Liabilities, 88 

Current Services Estimates, 52 

Current Year, 60 

D 

Debt, Federal, 52-53 

Debt Held by the Public, 53 

Debt Management, 53-54 

Debt Subject to Statutory Limit, 53 

Decision Package, 54 

Decision Package Set, 54 

Decision Unit, 55 

Decision Unit Overview, 55 

Deferral of Budget Authority, 55 

Deficiency Apportionment, 55-56 

Deficiency Appropriation, 56 

Deficit Financing, 56 

Definite Authority, 43 

Deflation, 94 

Deobligation, 56 

Deposit Fund Accounts, 38-39 

Depreciation, 86-87 

Determination of Amount, 43 

Devaluation, 94 

Direct Loans, 56-57 

Disbursements (Gross and Net), see 

Outlays 

Discount Rate, 94 

Disposable Personal Income, 94 

Divided Budget, see Capital Budget 

E 

Earned Income Credit, see Refundable 

Tax Credits 

Economic Growth, 94 

Economic Indicators, 95 

Employment, 95 

Entitlements, 57 

22 
Index 

Exchange of Assets, 57-58 

Executive Agency, see Agency 

Expended Appropriation, 58 

Expenditure and Receipt Accounts, 35-36 

Expenditures, 58 

Expenditure Transactions, 58 

Extensions of Budget Authority, 44 

Expired Account, 58 

F 

Federal Agency, see Agency 

Federal Budget Documents, see 

Appendix A 

Federal Debt, see Debt, Federal 

Federal Fund Accounts, 36 

Federal Intrafund Transactions, see 

Intragovernmental Transactions 

Feeder Account, 59 

First Concurrent Resolution on the 

Budget, 59 

Fiscal Policy, 59 

Fiscal Year, 59-60 

Foreign Currency Fund Accounts, 38 

Forms of Budget Authority, 42 

Formula Grants, see Grants 

Forward Funding, see Multiple-Year 

Authority 

Full Employment Budget, 60 

Full Funding, 60 

Functional Classification, 61; see also 

Appendix B 

Fund Accounting, 87 

Fund Accounts, see Appropriation 

(Expenditure), Receipt, and Fund 

Accounts 

G 

General Fund Expenditure Accounts, 36 

General Fund Receipt Accounts, 36 

GNP Deflator, see Implicit Price Deflator 

GNP Gap, 95 

Governmental Receipts, see Budget Receipts 

Government-Sponsored Enterprises, 61 

Grants, 61-62 

Grants-in-Aid, 62 

Gross Federal Debt, 52-53 

Gross National Product (GNP), 95 

Guaranteed Loans, see Loan Guarantee 

H 

Holdback, 87 

I 

Identification Code, 62 

Implicit Price Deflator, 96 

Impoundment, 63 

Impoundment Resolution, 63 

Incremental Funding, 63 

Indefinite Authority, 43 

Indirect Cost, 87 

Inflation, 96 

Insured Loans, see Loan Insurance 

Interfund Transactions, see Intragovernmental Transactions 

Internal Control, 87-88 

Intrabudgetary Transactions, see 

Intragovernmental Transactions 

Intrafund Transactions, see Intragovernmental Transactions 

23 
Index 

r 

Intragovernmental Fund Accounts, 36-37 

Intragovernmental Revolving Fund 

Accounts, 36 

Intragovernmental Transactions, 48-49 

Monthly Treasury Statement (MTS), 66 

Multiple-Year Authority, 43 

Multi-Year Budget Planning, 66 

N 

J 

i 

- ._--__ 

Joint Resolution, 63-64 

L 

Labor Force, 96 

Liabilities, 88 

Liquidation of Contract Authority, see 

under Contract Authority 

Liquidity, 89 

Loan Guarantee, 64 

Loan Insurance, 64 

Long-Term and Unfunded Liabilities, 88 

M. 

“M” Account, 64 

Macroeconomics, 96 

Management Fund Accounts, 37 

Means of Financing, 64-65 

Merged Surplus Accounts, 65 

Microeconomics, 96 

Mid-Year Review, see Supplemental 

Summary of the Budget 

Mission, see Agency Missions 

Mission Budgeting, 65 

Mixed-Ownership Government Corporation, 65-66 

Monetary Policy, 97 

Money Supply, 97 

National Income Accounts, 97-98 

National Needs, 66 

Net National Product (NNP), 98 

New Obligational Authority, see Budget 

Authority 

New Spending Authority, 66-67 

Nonexpenditure Transactions, 67 

Nonrevolving Trust Fund, see Collections 

No-Year Authority, 43 

0 

Object Classification, 67 

Obligated Balance, 40 

Obligational Authority, 67-68 

Obligation-Based Budgeting, 68 

Obligations Incurred, 68 

Off-Budget Federal Entities, 68 

Off-Budget Outlays, 68 

Offsetting Collections, 47-49 

Offsetting Receipts, 4849 

One-Y ear Authority, 43 

Open-Ended Programs & Fixed Costs, 

see Controllability 

Open-Market Operations, 98 

Outlays, 69 

Overhead Cost, see Indirect Cost 

Oversight Committee, 69 

24 
Index 

P 

Period of Availability, 43 

Permanent Authority, 44 

Permanent Indefinite Appropriations, 

see Permanent Authority; Indefinite 

Authority 

Personal Income, 99 

Personal Services and Benefits, 69-70 

Personnel Benefits, 70 

Personnel Compensation, 69 

Potential Gross National Product, 99 

Presidential Statement of Budgetary 

Amendments or Revisions, 70 

President’s Budget, 71 

Prime Rate, 99 

Prior Year, 60 

Prior-Year Outlays, see Outlays 

Producer Price Indexes, 99 

Program, 7 1 

Program Evaluation, 7 1 

Program & Financing Schedule, see 

Appendix D 

Project Grants, see Grants 

Projections, 7 l-72 

Proprietary Receipts from the Public, 48 

Public Debt, 52 

Public Debt Limit, see Debt, Federal 

Public Enterprise Revolving Fund 

Accounts, 36 

see also Revolving Funds 

R 

Ranking, 72 

Reapportionment, 72 

Reappropriations, 44 

Receipt Accounts, see Expenditure and 

Receipt Accounts 

Receipt Clearing Accounts, 38 

Receipts, see Budget Receipts 

Receipts from Off-Budget Federal 

Entities, see Proprietary Receipts from 

the Public 

Recession, 100 

Reconciliation Bill, 73 

Reconciliation Process, 72-73 

Reconciliation Resolution, 73 

Recoveries of Prior-Year Obligations, 73 

Refundable Tax Credits, 103 

Refunds, 73 

Reimbursements, 47, 74 

Relatively Uncontrollable Outlays, see 

Controllability 

Reprogramming, 74 

Rescission, 74-75 

Rescission Bill, 75 

Research and Development, 75 

Reserve Requirements, 100 

Reserves, see Budgetary Reserves 

Resolution, see Concurrent Resolution 

on the Budget 

Restoration, 76 

Revenues, 89 

Revenue Sharing, 76 

Revolving Fund Accounts, see Revolving 

Funds 

Revolving Funds, 48 

S 

Scorekeeping, 76 

25 
Index 

Second Concurrent Resolution on the 

Budget, 76-77 

Seigniorage, 77 

Special Foreign Currency Program 

Appropriation, 77 

Special Fund Accounts, 37 

Special Fund Expenditure Accounts, 37 

Special Fund Receipt Accounts, 37 

Spending Authority, 77 

Spending Bill see Spending 

Legislation 

Spending Committees, 78 

Spending Legislation, 78 

Stabilization, 100 

Stagflation, 100 

Statutory Debt Limitation, see Debt 

Subject to Statutory Limit 

Subfunction, 78 

Subsidy, 78 

Substantive Law, 79 

Successor Account, see “M” Account 

Supplemental Appropriation, 79 

Supplemental Summary of the Budget, 79 

Surplus Account, see Withdrawal 

T 

Tax Credits, 103 

Taxes, 104 

Tax Expenditures, 103 

Tax Expenditures Budget, 104 

Tax Payments, see Refundable Tax Credits 

Tax Refunds, see Refunds 

Timing of Congressional Action, 44 

Transfer Appropriation Accounts, 39 

Transfer Between Appropriation/Fund 

Accounts, 79-80 

Transfer of Funds, 80 

Transfer Payments, 100-101 

Transition Quarter, 80 

Treasury Bills, 101 

Treasury Borrowing, see Debt, Federal 

Treasury Combined Statement, 80 

Trust Fund Accounts, 37-38 

Trust Fund Expenditure Accounts, 38 

Trust Fund Receipt Accounts, 3.7 

Trust Intrafund Transactions, see Intragovernmental Transactions 

Trust Revolving Fund Accounts, 38 

u 

Uncontrollables, see Controllability 

Undelivered Orders, 80 

Undistributed Offsetting Receipts, 81 

Unemployment, 101 

Unemployment Rate, 101 

Unemployment Rate, Insured, 101 

Unexpended Balance, 41 

Unfilled Customers’ Orders, 81 

Unified Budget, 81 

Unliquidated Obligations, see Undelivered 

Orders 

Unobligated Balance, 40-41 

W 

Wages and Salaries, 101 

Warrants, 81 

Wholesale Price Index, see Producer Price 

Indexes 

26 
Index 

Wholly-Owned Government Corporation, 

81-82 

Withdrawal, 82 

Working Capital Fund, 82 

Write-Off, 82 

XYZ 

Year-Ahead Requests, 83 

Zero-Base Budgeting, 83 

27 
---- 

l - . ..A# 
GLOSSARY 

Budget Terms and Definitions 

r ~~---- f 

ACCRUED EXPENDITURES 

Charges during a given period that reflect liabilities incurred and the need to pay for: 

(a) services performed by employees, contractors, other Government accounts, vendors, 

carriers, grantees, lessors, and other payees; (b) goods and other tangible property received; and (c) amounts becoming owed under programs for which no current service or 

performance is required (such as annuities, insurance claims, other benefit payments, and 

some cash grants, but excluding the repayment of debt, which is considered neither an 

obligation nor an expenditure). Expenditures accrue regardless of when cash payments are 

made, whether invoices have been rendered, or, in some cases, whether goods or other 

tangible property have been physically delivered. (See also Accrual Basis of Accounting 

and Liabilities defined in the Accounting Terms section of this glossary.) 

ACirvlTY 

A specific and distinguishable line of work performed by one or more organizational components of a governmental unit for the purpose of discharging a function or subfunction 

for which the governmental unit is responsible. For example, food inspection is an activity 

performed in the discharge of the health function. (See also Budget Activity; Functional 

Classification.) 

ADVANCE APPROPRIATION 

Budget authority provided in an appropriation act to become available in a fiscal year, or 

more, beyond the fiscal year for which the appropriation act is passed. The amount is not 

included in the budget totals of the year in which the appropriation bill is enacted but it is 

included in the budget totals for the fiscal year in which the amount will become available 

for obligation. For examples and further discussion of this term, see Part V of The Budget 

of the United States Government, Appendfx. (For distinction, see Advance Funding; 

Forward Funding under Budget Authority.) 

ADVANCE FUNDING 

Budget authority provided in an appropriation act to obligate and disburse funds during a 

fiscal year from a succeeding year’s appropriation. The funds so obligated increase the 

budget authority for the fiscal year in which obligated and reduce the budget authority of 

L- ~- 31 
Budget Terms 

I--- 

the succeeding fiscal year. Advance funding is a device for avoiding supplemental requests 

late in the fiscal year for certain entitlement programs should the appropriations for the 

current year prove to be too low. For examples and further discussion of this term, see 

Part V of The Budget of the United States Government, Appendix. (For distinction, see 

Advance Appropriation; Forward Funding under Budget Authority.) 

ADVANCES 

Amounts of money prepaid pursuant to budget authority in contemplation of the later 

receipt of goods, services, or other assets. Advances are ordinarily made only to payees to 

whom an agency has an obligation, and not in excess of the amount of the obligation. A 

common example is travel advances which are amounts made available to employees prior 

to the beginning of a trip for costs incurred in accordance with the Travel Expense Act of 

1949 and-in accordance with standardized Government travel regulations. (See also 

Undelivered Orders.) 

AGENCY 

There is no single definition of the term agency. Any given definition usually relates to 

specific legislation. Generally, executive agency means any executive branch department, 

independent commission, board, bureau, office or other establishment of the Federal 

Government, including independent regulatory commissions and boards. (The term 

sometimes includes the municipal government of the District of Columbia.) Federal 

agency is a broader term, encompassing executive agencies and establishments in the 

judicial and legislative branches (except the Senate, the House of Representatives, and activities under the direction of the Architect of the Capitol). 

AGENCY MISSIONS 

Responsibilities assigned to a specific agency for meeting national needs. 

Agency missions are expressed in terms of the purpose to be served by the programs 

authorized to carry out functions or subfunctions which, by law, are the responsibility of 

that agency and its component organizations. In contrast to national needs, generally 

described in the context of major functions, agency missions are generally described in the 

context of subfunctions. (See also Functional Classification; Mission Budgeting; National 

Needs .) 

32 
BuGget Terms 

rr ---- 

ALLOCATIONS 

For purposes of Government accounting, an allocation is the amount of obligational 

authority transferred from one agency, bureau, or account that is set aside in a transfer 

appropriation account to carry out the purposes of the parent appropriation or fund. (The 

account to which the appropriation is made is called the parent account.) For example, 

allocations are made when one or more agencies share the administration of a program 

for which appropriations are made to only one of the agencies or to the President. Transactions involving allocation accounts appear in the Object Classification Schedule with 

the corresponding Program and Financing Schedule in The Budget of the United States 

Government, Appendix. (For detailed discussion on the treatment of Object Classification-with Allocation Accounts, see OMB Circular No. A-l 1, revised.) 

For purposes of section 302(a) of the Congressional Budget and Impoundment Control 

Act of 1974 (P.L. 93-344; 31 U.S.C. 1323), an allocation is the distribution of total budget 

outlays or total new budget authority in a concurrent resolution on the budget to the 

various committees having spending responsibilities. (See also Crosswalk; Object Classification; Transfer Appropriation Accounts under Appropriation (Expenditure), Receipt, 

and Fund Accounts; Transfer Between Appropriation/Fund Accounts; Transfer of 

Funds.) 

ALLOTMENT 

An authorization by the head (or other authorized employee) of an agency to his/her 

subordinates to incur obligations within a specified amount. An agency makes allotments 

pursuant to the requirements stated in OMB Circular No. A-34. The amount allotted by 

an agency cannot exceed the amount apportioned by the Office of Management and 

Budget. (See also Apportionment; Reapportionment,) 

ALLOWANCES 

Amounts included in the President’s budget request or projections to cover possible 

additional proposals, such as statutory pay increases and contingencies for relatively uncontrollable programs and other requirements. As used by Congress in the concurrent 

resolutions on the budget, allowances represent a special functional classification 

designed to include amounts to cover possible requirements, such as civilian pay raises 

and contingencies. Allowances remain undistributed until they occur or become firm, 

then they are distributed to the appropriate functional classification(s). For a more 

33 
Budget Terms 

detailed discussion, see Part 5, Meeting National Needs: The Federal Program by F‘unction, The Budget of the United States Government. (See also Controllability.) 

ANTIDEFICIENCY ACT 

Legislation enacted by Congress to prevent the incurring of obligations or the making 01 

expenditures (outlays) in excess of amounts available in appropriations or funds; to fix 

responsibility within an agency for the creation of any obligation or the making of any expenditure in excess of an apportionment or reapportionment or in excess of other subdivisions established pursuant to 31 U.S.C. 665(g); and to assist in bringing about the most 

effective and economical use of appropriations and funds. The Act is sometimes known as 

Section 3679 of the Revised Statutes, as amended. (See also Apportionment; Budgetary 

Reserves; Deferral of Budget Authority; Deficiency Apportionment; Deficiency Appropriation; Fund Accounting defined in the Accounting Terms section of this glossary; Supplemental Appropriation.) 

APPLIED COSTS 

. The financial measure of resources consumed or applied within a given period of time to 

accomplish a specific purpose, such as performing a service, carrying out an activity, or 

completing a unit of work or a specific project, regardless of when ordered, received, or 

paid for. (For further discussion of this term, as it applies to the budgetary process and to 

particular types of transactions, see OMB Circular No. A-34.) 

APPORTIONMENT 

A distribution made by the Office of Management and Budget of amounts available for 

obligation, including budgetary reserves established pursuant to law, in an appropriation 

or fund account. Apportionments divide amounts available for obligation by specific time 

periods (usually quarters), activities, projects, objects, or a combination thereof. The 

amounts so apportioned limit the amount of obligations that may be incurred. In apportioning any account, some funds may be reserved to provide for contingencies or to effect 

savings, pursuant to the Antideficiency Act; or may be proposed for deferral or rescission 

pursuant to the Impoundment Control Act of 1974 (Title X of the Congressional Budget 

and Impoundment Control Act, P.L. 93-344, 31 U.S.C. 1400, et seq.). 

The apportionment process is intended to prevent obligation of amounts available within 

34 
Budget Terms 

an appropriation or fund account in a manner that would require deficiency or supplemental appropriations and to acheve the most effective and economical use of amounts 

made available for obligation. In this regard, Federal agency obligations may not be incurred in excess of the amount of budget authority apportioned. (See also Allotment; 

Antideficiency Act; Budgetary Reserves; Deferral of Budget Authority; Deficiency 

Apportionment; Deficiency Appropriation; Reapportionment; Rescission; Supplemental 

Appropriation.) 

APPROPRIATION ACCOUNT/FUND ACCOUNT 

A summary account established in the Treasury for each appropriation and/or fund 

showing transactions to such accounts. Each such account provides the framework for 

establishing a set of balanced accounts on the books of the agency concerned. 

APPROPRIATION ACT 

A statute, under the jurisdiction of the House and Senate Committees on Appropriations, 

that generally provides authorization for Federal agencies to incur obligations and to 

make payments out of the Treasury for specified purposes. An appropriation act, the 

most common means of providing budget authority, generally follows enactment of 

authorizing legislation unless the authorizing legislation itself provides the budget 

authority. 

Currently, there are 13 regular appropriation acts enacted annually. From time to time, 

Congress also enacts supplemental appropriation acts. (See also Budget Authority; 

Supplemental Appropriation.) 

APPROPRIATION (EXPENDITURE), RECEIPT, 

AND FUND ACCOUNTS 

r ~-- I 

c -._ 

Expenditure and Receipt Accounts 

There are a number of expenditure, receipt, and other accounts used by the Federal 

Government. The expenditure and receipt accounts used for budget and accounting 

purposes are those that record the Federal and trust fund amounts. (See also under 

Collections.) 

35 
i 

- 

Budget Terms 

In addition to the above, some accounts are used only for accounting purposes. 

These include transfer appropriation accounts, foreign currency accounts. receipt 

clearing accounts, and deposit fund accounts. 

The Federal and trust fund amounts (except those specifically excluded by law) comprise the President’s budget. 

Federal Fund Accounts 

General Fund Receipt Accounts. Those accounts credited with all collections that 

are not earmarked by law for a specific purpose. These collections are presented in 

The Budget of the United States Government as either budget (governmental) 

receipts or offsetting collections. 

General Fund Expenditure Accounts. Appropriation accounts established IO 

record amounts appropriated by Congress to be expended for the general support of 

the Federal Government. 

Public Enterprise Revolving Fund Accounts 

Expenditure accounts authorized by Congress to be credited with collections, 

primarily from the public, that are generated by, and earmarked to finance, a continuing cycle of business-type operations. 

Intragovernmental Fund Accounts 

Expenditure accounts specifically authorized by law to facilitate financing transactions within and between Federal agencies. 

Intragovernmental Revolving Fund Accounts. Authorized by law to carry out a 

cycle of intragovernmental business-type operations. They are similar to public 

enterprise revolving fund accounts except they are credited with offsetting collections primarily from other Federal agencies and accounts. Some examples are working capital fund, stock fund, industrial fund, and supply fund. 

36 
Budget Terms 

fManagement Fund Accounts. Authorized by law to credit collections from two 

or more appropriations to finance activity not involving a continuing cycle of 

business-type operations. Such accounts do not generally own a significant amount 

of assets (e.g., supplies, equipment, loans, etc.), nor do they have a specified 

amount of capital provided (a corpus of the fund). 

Consolidated Working Fund Accounts. Included under management fund accounts, these are special working funds established under the authority of Section 

601 of the Economy Act (31 U.S.C. 686) to receive advance payments from other 

agencies or accounts. Consolidated working funds are not used to finance the work 

directly, but only to reimburse the appropriation or fund account that will finance 

the work to be performed. Amounts in consolidated working fund accounts are 

available for the same periods as those of the accounts advancing the funds. 

Special Fund Accounts 

Special Fund Receipt Accounts. Those accounts credited with collections from 

specific sources that are earmarked by law for a specific purpose. These collections 

are presented in The Budget of the United States Government as either budget 

(governmental) receipts or offsetting collections. 

Special Fund Expenditure Accounts. Appropriation accounts established to 

record appropriated amounts of special fund receipts to be expended for special programs in accordance with specific provisions of law. 

Trust Fund Accounts 

Usually recorded in separate receipt and expenditure accounts. In a few cases, 

namely trust revolving funds, collections are authorized to be credited to an expenditure account. 

Trust Fund Receipt Accounts. Credited with collections generated by the terms of’ 

a trust agreement or statute. These collections are presented in The Budget of tht 

United States Government either as budget (governmental) receipts or offsetting collections. 

37 
Budget Terms 

‘ 

Trust Fund Expenditure Accounts. Appropriation accounts established to record 

appropriated amounts of trust fund receipts to be used to finance specific purposes 

or programs under a trust agreement or statute. 

Trust Revolving Fund Accounts. Expenditure accounts used to carry out a cycle 

of business-type operations (e.g., the Federal Deposit insurance Corporation) in accordance with a trust agreement or statute. They are authorized to be credited with 

offsetting collections. 

In addition to the Federal and trust funds, there exist the following kinds of accounts for 

purposes other than budget presentation: 

Foreign Currency Fund Accounts 

Established in the Treasury for foreign currency that is acquired without payment of 

United States dollars, primarily in payment for commodities (such as through the 

Agricultural Trade Development Assistance Act, P.L. 83-480). (For distinction, see 

Special Foreign Currency Program Appropriation.) 

Receipt Clearing Accounts 

Set up to hold general, special, or trust fund receipts temporarily, pending credit to 

the applicable Federal or trust fund receipt accounts. 

Deposit Fund Accounts 

Expenditure accounts established to account for collections that are either (a) held 

temporarily and later refunded or paid upon administrative or legal determination 

as to the proper disposition thereof, or (b) held by the Government as banker or 

agent for others and paid out at the direction of the depositor. (For example, savings 

accounts for military personnel; Federal, State, and local income taxes withheld 

from Federal employees’ salaries; and payroll deductions for the purchase of savings 

bonds by civilian employees of the Government. Deposit funds are accounted for as 

liabilities of the Federal Government. These accounts are not included in the budget 

totals because the amounts are not available for Government purposes. However, 

since the cash in the accounts is used by the Treasury to satisfy immediate cash 
Budget Terms 

requirements of the Government, deposit fund balances are shown as a means of 

financing the deficit in the budget. 

Transfer Appropriation Accounts 

Established to receive and disburse allocations. Such allocations and transfers are 

not adjustments to budget authority or balances of budget authority. Rather, the 

transactions (including any adjustments therein) are treated as nonexpenditure 

transactions at the time the allocation is made. The accounts carry symbols that 

identify the original appropriation from which monies were advanced. Transfer appropriation accounts are symbolized by adding the receiving agency’s department 

prefix to the original appropriation or fund account symbol. In some cases a bureau 

suffix is added to show that the transfer is being made to a particular bureau within 

the receiving department. For budget purposes, transactions in the transfer accounts 

are reported with the transactions in the parent accounts. (See also Allocations; 

Nonexpenditure Transactions.) 

APPROPRIATION LlMlTATlON . 

A statutory restriction in appropriation acts that establishes the maximum or minimum 

amount that may be obligated or expended for specified purposes. 

AUTHORIZING COMMITTEE 

A standing committee of the House or Senate with legislative jurisdiction over the subject 

matter of those laws, or parts of laws, that set up or continue the legal operations of 

Federal programs or agencies. An authorizing committee also has jurisdiction in those instances where backdoor authority is provided in the substantive legislation. (See also 

Oversight Committee; Spending Committee.) 

AUTHORIZING LEGISLATION 

Substantive legislation enacted by Congress that sets up or continues the legal operation 

of a Federal program or agency either indefinitely or for a specific period of time or sanctions a particular type of obligation or expenditure within a program. 

39 
Budget Terms 

IAuthorizing legislation is normally a prerequisite for appropriations. It may place a limit 

on the amount of budget authority to be included in appropriation acts or it may 

authorize the appropriation of “such sums as may be necessary.” In some instances 

authorizing legislation may provide authority to incur debts or to mandate payment to 

particular persons or political subdivisions of the country. (See also Backdoor Authority; 

Entitlements; Spending Legislation; Substantive Law.) 

BACKDOOR AUTHORITY 

Budget authority provided in legislation outside the normal (appropriations committees) 

appropriations process. The most common forms of backdoor authority are authority to 

borrow (also called borrowing authority or authority to spend debt receipts) and contract 

authority. In other cases (e.g., interest on the public debt), a permanent appropriation is 

provided that becomes available without any current action by Congress. Section 401 of 

the Congressional Budget and Impoundment Control Act of 1974 (31 U.S.C. 1351) 

specifies certain limits on the use of backdoor authority. (See also Authorizing Legislation; Appropriations under Budget Authority; Spending Authority; Spending Committees; Spending Legislation.) 

BALANCED BUDGET 

A budget in which receipts are equal to or greater than outlays. (See also Budget Deficit; 

Budget Surplus.) 

BALANCES OF BUDGET AUTHORITY 

Balances of budget authority result from the fact that not all budget authority enacted in a 

fiscal year is obligated and paid out in that same year. Balances are classified as follows: 

Obligated Balance 

The amount of obligations already incurred for which payment has not yet been 

made. This balance can be carried forward indefinitely until the obligations are 

paid. (See also “M” Account.) 

Unobligated Balance 

The portion of budget authority that has not yet been obligated. In l-year accounts 
Budget Terms 

fi 

the unobligated balance expires (ceases to be available for obligation) at the end of 

the fiscal year. In multiple-year accounts the unobligated balance may be CaJJied 

forward and remain available for obligation for the period specified. In no-year. 

accounts the unobligated balance is carried forward indefinitely until (1) specifically’ 

rescinded by law, or (2) until the purposes for which it was provided have been accomplished, or (3), in any event, whenever disbursements have not been made 

against the appropriation for 2 full consecutive years. (See also Merged Surplus Accounts.) 

Unexpended Balance 

The sum of the obligated and unobligated balances. 

BUDGET ACTIVITY 

Categories within most accounts that identify the purposes, projects, or types of activities 

financed. They are presented in the Program by Activities section in the Program and 

Financing schedule of The Budge! offhe United States Government, Appendix. (See also 

Activity.) 

BUDGET AMENDMENT 

A revision to some aspect of a previous budget request, submitted to Congress by the 

President before Congress completes appropriation action. (See also Presidential Statement of Budgetary Amendments or Revisions.) 

BUDGET AUTHORITY 

Authority provided by law to enter into obligations that will result in immediate or future 

outlays involving Federal Government funds, except that budget authority does not 

include authority to insure or guarantee the repayment of indebtedness incurred by 

another person or government. The basic forms of budget authority are appropriations, 

authority to borrow, and contract authority. Budget authority may be classified by the 

period of availability (l-year, multiple-year, no-year), by the timing of congressional 

action (current or permanent), or by the manner of determining the amount available 

(definite or indefinite). 

41 
I . - 

Budget Terms 

Forms of Budget Authority 

Appropriations. An authorization by an act of Congress that permits Federal 

agencies to incur obligations and to make payments out of the Treasury for specified 

purposes. An appropriation usually follows enactment of authorizing legislation. 

An appropriation act is the most common means of providing budget authority, but 

in some cases the authorizing legislation itself provides the budget authority. (See 

Backdoor Authority.) Appropriations do not represent cash actually set aside in the 

Treasury for purposes specified in the appropriation act: they represent limitations 

of amounts that agencies may obligate during therperiod of time specified in the 

respective appropriation acts. Several types of appropriations are not counted as 

budget authority, since they do not provide authority to incur additional obligations. Examples of these include: 

-Appropriations to liquidate contract authority-congressional action to provide 

funds to pay obligations incurred against contract authority; 

-Appropriations to reduce outstanding debt-congressional action to provide 

funds for debt retirement; and, 

-Appropriations for refunds of receipts. (See also Refunds.) 

Authority To Borrow. Also called borrowing authority or authority to spend debt 

receipts. Statutory authority that permits a Federal agency to incur obligations and 

to make payments for specified purposes out of borrowed monies. (See also Debt, 

Federal.) 

Contract Authority. Statutory authority that permits obligations to be incurred in 

advance of appropriations or in anticipation of receipts to be credited to a revolving 

fund or other account. (By definition, contract authority is unfunded and must 

subsequently be funded by an appropriation to liquidate obligations incurred under 

the contract authority, or by the collection and use of receipts.) (See also Backdoor 

Authority.) 
Budget Terms 

Determination of Amount 

Definite Authority. Authority which is stated as a specific sum at the time the 

authority is granted. This includes authority stated as “not to exceed” a specified 

amount. 

Indefinite Authority. Authority for which a specific sum is not stated but is determined by other factors, such as the receipts from a certain source or obligations incurred. (Authority to borrow that is limited to a specified amount that may be 

outstanding at any time, i.e., revolving debt authority is considered to be indefinite 

budget authority.) 

Period of Availability 

One-Year (Annual) Authority. Budget authority that is available for obligation 

only during a specified fiscal year and expires at the end of that time. 

Multiple-Year Authority. Budget authority that is available for a specified period 

of time in excess of one fiscal year. This authority generally takes the form of 2-year, 

3-year, etc., availability, but may cover periods that do not coincide with the start or 

end of a fiscal year. For example, the authority may be available from July 1 of one 

year through September 30 of the following fiscal year (15 months). This type of 

multiple-year authority is sometimes referred to as “forward funding.” (For distinction, see Advance Appropriation and Advance Funding. See also Full Funding; 

Multi-Year Budget Planning.) 

No-Year Authority. Budget authority that remains available for obligation for an 

indefinite period of time, usually until the objectives for which the authority was 

made available are attained. 

43 
Budget Terms 

Extensions of Budget Authority 

Reappropriations. Congressional action to continue the obligational availability, 

whether for the same or different purposes, of all or part of the unobligated portion 

of budget authority that has expired or would otherwise expire. Reappropriations 

are counted as budget authority in the year for which the availability is extended. 

(For distinction, see Restoration.) 

Continuing Resolution. Legislation enacted by Congress to provide budget 

authority for Federal agencies and/or specific activities to continue in operation until the regular appropriations are enacted. Continuing resolutions are enacted when 

action on appropriations is not completed by the beginning of a fiscal year. The continuing resolution usually specifies a maximum rate at which the obligations may be 

incurred, based on the rate of the prior year, the President’s budget request, or an 

appropriation bill passed by either or both Houses of the Congress. 

Timing of Congressional Action 

Current Authority. Budget authority enacted by Congress in or immediately 

preceding the fiscal year in which it becomes available. 

Permanent Authority. Budget authority that becomes available as the result of 

previously enacted legislation (substantive legislation or prior appropriation act) and 

does not require current action by Congress. Authority created by such legislation is 

considered to be “current” in the first year in which it is provided and “permanent” 

in succeeding years. (See also Controllability.) 

BUDGET DEFICIT 

The amount by which the Government’s budget outlays exceed its budget receipts for a 

given fiscal year. (See also Balanced Budget; Budget Surplus.) 

44 
Budget Terms . 

BUDGET ESTIMATES 

Estimates of budget authority, outlays, receipts, or other budget measures that cover the 

current and budget years, as reflected in the President's budget and budget updates. (See 

also Budget Updates; President's Budget; Projections.) 

BUDGET SURPLUS 

The amount by which the Government's budget receipts exceed its budget outlays for a 

given budget/fiscal year. (See also Balanced Budget; Budget Deficit.) 

BUDGET UPDATES 

Amendments to, or revisions in, budget authority requested, estimated outlays, and 

estimated receipts for the ensuing fiscal year. The President is required by the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344, 3 1 U.S.C. I l(g)) to 

transmit such statements to Congress by April 10 and July 15 of each year; however, the 

President may also submit budget updates at other times during the fiscal year. (&e also 

Budget Estimates; President's Budget; Presidential Statement of Budgetary Amendments 

or Revisions.) 

BUDGETARY RESERVES 

Portions of budgetary resources set aside (withheld from apportionment) by the Office of 

Management and Budget by authority of the Antideficiency Act (31 U.S.C. 645) to (a) 

provide for contingencies, or (b) effect saving whenever savings are made possible by, or 

through changes in, requirements or greater efficiency of operations. Budgetary resources 

may also be set aside as specified by particular appropriation acts or other laws. 

Except as specifically provided by law, no reserves shall be established other than as 

authorized under the Antideficiency Act (3 1 U.S.C. 665). Reserves established are 

reported to Congress in accordance with the Congressional Budget and Impoundment 

Control Act of 1974 (3 1 U.S.C. 1401 et seq,). (See also Antideficiency Act; Apportionment; Deferral of Budget Authority; Rescission.) 
Budget Terms 

CAPITAL BUDGET 

A divided budget with investment in capital asseis excluded from calculations of the 

. budget surplus or deficit, is often referred to as a capital budget. A capital budget provides for separating financing of capital or investment expenditures from current or 

operating expenditures. 

The Federal Government has never had a capital budget in the sense of financing capital 

or investment-type programs separately from current expenditures. However, Federal expenditures of an investment nature are presented in Special Analysis D of the Special 

Analyses, Budget of the United States Government. (See also Capital defined in the 

Economic Terms section of this glossary.) 

CHANGE IN SELECTED RESOURCES 

An adjustment representing the bridge between program costs and obligations. It 

represents an increase or derlrease in (a) those assets and liabilities that have been recorded 

as obligations but have not jet been consumed (e.g., inventories), and (b) those assets and 

liabilities which have becorire costs but have not yet become obligations (e.g., accrued annual leave). 

This r.~?awre is shown as ;n entry I? the Program and Financing Schedule of The Budget 

of the Un,rr:c! States Government, Appendix. Details for computing change in selected 

resouices .ue explainc5 in section 32.3 of OMB Circular No. A-1 I. (See also Cost-Based 

Budgetiag.) 

COLLECTIONS 

Amounts received by the Federal Government during the fiscal year. (See also Appropriation (Expenditure), Receipt, and Fund Accounts.) Collections are classified into two 

major categories: 
Budget Terms 

Budget Receipts 

Collections from the public (based on the Government’s exercise of its sovereign 

powers) and from payments by participants in certain voluntary Federal social insurance programs. These collections, also called governmental receipts, consist 

primarily of tax receipts and social insurance premiums, but also include receipts 

from court fines, certain licenses, and deposits of earnings by the Federal Reserve 

System. Gifts and contributions (as distinguished from payments for services or 

cost-sharing deposits by State and local governments) are also counted as budget 

receipts. Budget receipts are compared with total outlays in calculating the budget 

surplus or deficit. 

Offsetting Collections 

Collections from Government accounts or from transactions with the public that are 

of a business-type or market-oriented nature. They are classified into two major 

categories: (a) collections credited to appropriation or fund accounts, and (b) offsetting receipts (i.e., amounts deposited in receipt accounts). In general, the 

distinction between these two major categories is that “collections credited to appropriation or fund accounts” normally can be used without appropriation action by 

Congress, whereas funds in “receipt accounts” cannot be used without being appropriated. Offsetting collections are deducted from disbursements in calculating 

total outlays. Corresponding offsets are made in arriving at total budget authority 

and net obligations incurred. The two categories of offsetting collections are defined 

as follows: 

Collections Credited to Appropriation or Fund Accounts. These occur in two 

circumstances: 

L-.- 

Reimbursements. When authorized by law, amounts collected for materials or ser.- 

vices furnished are treated as reimbursements to appropriations. For accounting 

purposes, earned reimbursements are also known as revenues. These collections are 

netted in determining outlays from such appropriations. (For distinction, set’ 

Refunds. See also Unfilled Customers’ Orders.) 

47 
Budget Terms 

Revolving Funds. In the three types of revolving funds-public enterprise, intragovernmental, and trust revolving-collections are netted against spending and 

outlays are reported as the net amount. 

Offsetting Receipts. Amounts deposited in receipt accounts (i.e., general funds, 

special funds, or trust funds). These receipts generally are deducted from budget 

authority and outlays by function and/or subfunction, and by agency. Offsetting 

receipts are subdivided as follows: 

Proprietary Receipts from the Public. Collections from the public deposited in 

receipt accounts of the general fund, special funds, or trust funds as a result of the 

Government’s business-type or market-oriented activities (e.g., loan repayment, interest, sale of property and products, charges for nonregulatory services, and rents 

and royalties). Such collections are not counted as budget receipts, and with one exception, are offset against total budget authority and outlays by agency and by function. The exception consists of receipts from rents and royalties from Outer Continental Shelf lands that are deducted from total budget authority and outlays for 

the Government as a whole rather than from any single agency or function. (See also 

Undistributed Offsetting Receipts.) 

In trugovernmen tal Trunsactions. Payments into receipt accounts from Federal 

appropriations or fund accounts. They are treated as an offset to budget authority 

and outlays, rather than as a budget receipt. Intragovernmental transactions may be 

intrabudgetary (where both the payment and receipt occur within the budgetary 

universe) or they may result from the payment by an off-budget Federal entity 

whose funds are excluded from the budget totals. Normally, intragovernmental 

transactions are deducted from both the outlays and the budget authority for the 

agency receiving the payment. However, in two cases, these transactions are not 

deducted from the figures of any agency.or function. Instead, intragovernmental 

transactions that involve agencies’ payments (including payments by off-budget 

Federal entities) as employers into empiuyee retirement trust funds and the payment 

of interest to nonrevolving trust funds appear as special deduct lines in computing 

total budget authority and outlays for the Government. 

48 
Budget Terms 

Intrabudgetary transactions are further subdivided into three categories: (1) inter.. 

fund transactions, where the payment is from one fund group (either Federal funds 

or trust funds) to a receipt account in the other fund group; (2) Federal intrafund 

transactions, where the payment and receipt both occur within the Federal fund 

group; and (3) trust intrafund transactions, where the payment and receipt both occur within the trust fund group. 

CONCURRENT RESOLUTION ON THE BUDGET 

A resolution passed by both Houses of Congress, but not. requiring the signature of the 

President, setting forth, reaffirming, or revising the congressional budget for the United 

States Government for a fiscal year. 

Two such resolutions are required before the start of a fiscal year. The first, due by May 

15, establishes the congressional budget targets for the next fiscal year; the second, 

scheduled to be passed by September 15, sets a ceiling on budget authority and outlays 

and a floor on receipts. Additional concurrent resolutions revising the previously 

established budget levels may be passed by Congress at any time. (See also Congressional 

Budget; First Concurrent Resolution on the Budget; Second Concurrent Resolution on 

the Budget .) 

CONGRESSIONAL BUDGET 

The budget as set forth by Congress in a concurrent resolution on the budget. By law the 

resolution includes: 

r- 

-the appropriate level of total budget outlays and of total new budget auth0rit.y; 

-an estimate of budget outlays and new budget authority for each major functional category, for undistribut.ed intergovernmental transactions, and for such other matters 

relating to the budget as may be appropriate to carry out the purposes of the 1974 Congressional Budget and Impoundment Control Act; 
Budget Terms 

-the amount, if any, of the surplus or deficit in the budget; 

-the recommended level of Federal receipts; and 

-the appropriate level of the public debt. 

(See also Concurrent Resolution on the Budget; President’s Budget.) 

CONSOLIDATED DECISION PACKAGES 

Packages prepared at higher organizational and program levels that summarize and supplement information contained in decision packages received from subordinate units in an 

agency. Consolidated packages may reflect different priorities, including the addition of 

new programs or the abolition of existing ones. (See also Decision Package; Zero-Base 

Budgeting.) 

CONTROLLABILITY 

The ability of Congress and the President to increase and decrease budget outlays or 

budget authority in the year in question, generally the current or budget year. Relatively 

uncontrollable refers to spending that the Federal Government cannot increase or 

decrease without changing existing substantive law. For example, outlays in any one year 

are considered to be relatively uncontrollable when the program level is determined by 

existing statute or by contract or other obligations. (See Permanent Authority under 

Budget Authority.) 

iControllability, as exercised by Congress and the President, is determined by statute. In 

the case of Congress, all permanent budget authority is uncontrollable. For example, 

most trust fund appropriations are permanent, as are a number of Federal fund appropriations, and interest on the public debt, for which budget authority is automatically provided under a permanent appropriation enacted in 1847. In the case of the President, 

relatively uncontrollable spending is usually the result of open-ended programs and fixed 

costs (e.g., social security, medical care, veterans benefits-outlays generally mandated 

by law), but also includes payments coming due resulting from budget authority enacted 

in prior years, such as entering into contracts. (See also Allowances; Contract Authority; 

Entitlements.) 

i- 50 
Budget Terms 

r 

COOPERATIVE AGREEMENT 

A form of assistance award from the Federal Government to a State or local government 

or other recipient to support and stimulate an activity or venture to accomplish a public 

purpose, and in which the Federal Government will be substantially involved during the 

performance of the contemplated activity. (See also Grants; Grants-in-Aid.) 

COST-BASED BUDGETING 

Budgeting in terms of costs to be incurred, that is, the resources to be consumed in carrying out a program, regardless of when the funds to acquire the resources were obligated or 

paid, and without regard to the source of funds (i.e., appropriation). Forexample, inventory items become costs when they are withdrawn from inventory, and the cost of 

buildings is distributed over time, through periodic depreciation charges, rather than in a 

lump sum when the buildings are acquired. 

Cost-based budgeting, in lieu of reflecting the obligational requirements for programs, 

reflects costs expected to be incurred during the budget year. When the program and 

financing schedules in the appendix to the President’s budget are stated in terms of cost, 

additional entries are used to present the obligations required for inventories and other 

items that are not costed in the period. (See also Change in Selected Resources. For 

distinction, see Obligation-Based Budgeting,) 

CROSS AGENCY RANKING 

A process of ranking, on a Government-wide basis, the decision packages that fall within 

a specified margin of the President’s budget total. The purpose of cross agency ranking is 

to help assure that diverse programs of the same priority are considered for inclusion 

within the budget total recommended by the President. (See also Decision Package; Ranking; Zero-Base Budgeting.) 

CROSSWALK 

Any procedure for expressing the relationship between budgetary data from one set of 

classifications to another, such as between appropriation accounts and authorizing legis51 
, 

Budget Terms 

r 

lation or between the budget functional structure and the congressional committee spending jurisdictions. (See also Allocations.) 

CURRENT SERVICES ESTIMATES 

Presidential estimates of budget authority and outlays for the ensuing fiscal year based on 

continuation of existing levels of service. These estimates reflect the anticipated costs of 

continuing Federal programs and activities at present spending levels without policy 

changes, that is, ignoring all new initiatives, presidential or congressional, that are not yet 

law. 

These estimates of budget authority and outlays, accompanied by the underlying 

economic and programmatic assumptions upon which they are based (such as the rate of 

inflation, the rate of real economic growth, the unemployment rate, program caseloads, 

and pay increases) are required to be transmitted by the President to the Congress with the 

President’s budget. (For a more detailed discussion of this term, see Special Analysis A of 

the Special Analyses, Budget of the United States Government.) 

DEBT, FEDERAL 

There are three basic tabulations of Federal debt: gross Federal debt, debt held by the 

public, and debt subject to statutory limit. (See also Authority To Borrow under Budget 

Authority.) 

Gross Federal Debt 

Consists of public debt and agency debt and includes all public and agency debt 

issues outstanding. 

r- - 

i 

Public Debt. That portion of the Federal debt incurred when the Treasury or the 

Federal Financing Bank (FFB) borrows funds directly from the public or another 

fund or account. To avoid double counting, FFB borrowing from the Treasury is 

not included in the public debt. (The Treasury borrowing required to obtain the 

money to lend to the FFB is already part of the public debt.) 
Budget Terms 

Agency Debt. That portion of the Federal debt incurred when a Federal agency, 

other than the Treasury or the Federal Financing Bank, is authorized by law to borrow funds directly from the public or another fund or account. To avoid double 

counting, agency borrowing from Treasury or the FFB and Federal fund advances 

to trust funds are not included in the Federal debt. (The Treasury or FFB borrowing 

required to obtain the money to lend to the agency is already part of the public 

debt.) Agency debt may be incurred by agencies within the Federal budget (such as 

the Tennessee Valley Authority) or by off-budget Federal entities (such as the Postal 

Service). Debt of Government-sponsored, privately owned enterprises (such as the 

Federal National Mortgage Association) is not included in the Federal debt. 

Debt Held by the Public 

Part of the gross Federal debt held by the public. (The Federal Reserve System is included in “the public” for this purpose.) Debt held by Government trust funds (e.g., 

Social Security Trust Fund), revolving funds, and off-budget Federal entities is excluded from debt held by the public. 

Debt Subject to Statutory Limit 

As defined by the Second Liberty Bond Act of 1917, as amended, it currently includes virtually all public debt. However, only a small portion of agency debt is included in this tabulation of Federal debt. 

Under Public Law 96-78, approved September 29, 1979, an amendment to the Rules of 

the House of Representatives makes possible the establishment of the public debt limit as 

a part of the congressional budget process. 

DEBT MANAGEMENT 

r 

,L-.._, 

Operations of the U.S. Treasury Department that determine the composition of the 

Federal debt. Debt management involves determining the amounts, maturities, other 

terms and conditions, and schedule of offerings of Federal debt securities and raising new 

cash to finance the Government’s operations. The objective of debt management is to 

raise the money necessary for the Government’s operations at least cost to the taxpayer 

53 
Budget Terms 

I--- 

and in a manner that will minimize the effect of Government operations on financial 

markets and on the economy. 

DECISION PACKAGE 

In zero-base budgeting, a brief justification document containing the information 

managers need to judge program or activity levels and resource requirements. Each decision package presents a level of request for a decision unit, stating the costs and performance associated with that level. Separate decision packages are prepared for incremental 

spending levels: 

-Minimum Level-performance below which it is n@ feasible for the decision unit to 

continue because no constructive contribution could be made toward fulfilling the 

unit’s objectives. 

-Intermediate Level-performance between the minimum and current levels. There may 

be more than one intermediate level. 

-Current Level-performance that would be reflected if activities for the budget year 

were carried on at current year seriice or output levels without major policy changes. 

This level permits internal realignments of activities within existing statutory authorizations. 

-Enhancement Level-where increased output or service are consistent with major objectives and where sufficient benefits are expected to warrant the serious review 01 

higher authorities. 

A series of decision packages are prepared for each decision unit. Cumulatively, the 

packages represent the total budget request for that unit. (See also Consolidated Decision 

Packages; Cross Agency Ranking; Decision Package Set; Decision Unit; Decision Unit 

Overview; Ranking; Zero-Base Budgeting.) 

DECISION PACKAGE SET 

Consists of decision unit overview and the decision packages for the decision unit. (See 

also Decision Package; Decision Unit; Decision Unit Overview; Zero-Base Budgeting.) 

54 
Budget Terms 

DECISION UNIT 

In zero-base budgeting, that part (or component) of the basic program or organizational 

entity for which budget requests are prepared and for which managers make significant 

decisions on the amount of spending and the scope or quality of work to be performed. 

(See also Decision Package; Decision Package Set; Zero-Base Budgeting.) 

DECISION UNIT OVERVIEW 

The part of a decision package set that provides information necessary to evaluate and 

make budget decisions on each of the decision packages, without repeating the same information in each package. (See also Decision Package; Decision Package Set; Zero-Base 

Budgeting.) 

DEFERRAL OF BUDGET AUTHORITY 

Any action or inaction by an officer or employee of the United States Government that 

temporarily withholds, delays, or effectively precludes the obligation or expenditure of 

budget authority, including authority to obligate by contract in advance of appropriations 

as specifically authorized by law. Deferrals consist of (a) amounts reserved for contingencies pursuant to the Antideficiency Act (31 U.S.C. 665), and (b) amounts temporarily 

withheld for other reasons pursuant to the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344; 31 U.S.C. 1403). 

Deferrals may not extend beyond the end of the fiscal year in which the message reporting 

the deferral is transmitted and may be overturned by the passage of an impoundment 

resolution by either House of Congress. (See also Antideficiency Act; Apportionment; 

Budgetary Reserves; Impoundment; Impoundment Resolution; Rescission.) 

DEFICIENCY APPORTIONMENT 

A distribution by the Office of Management and Budget of available budgetary resources 

for the fiscal year that anticipates the need for supplemental budget authority. Such apportionments may only be made under certain specified conditions provided for in law 

(Antideficiency Act, 31 U.S.C. 665(e)). In such instances, the need for additional 

CE 
Budget Terms 

budget authority is usually reflected by making the amount apportioned for the 

fourth quarter less than the amount that will actually be required. Approval of requests 

for deficiency apportionment does not authorize agencies to exceed available resources 

within an account. (See also Antideficiency Act; Apportionment; Deficiency Appropriation; Supplemental Appropriation.) 

DEFICIENCY APPROPRIATION 

An appropriation made to an expired account to cover obligations that have been incurred 

in excess of available funds. 

Deficiency appropriations are rare since obligating in excesS,of available funds generally is 

prohibited by law. Deficiency appropriation is sometimes erroneously used as a synonym 

for supplemental appropriation. (Seealso Antideficiency Act; Apportionment; Deficiency 

Apportionment; Supplemental Appropriation.) 

DEFICIT FINANCING 

A situation in which the Federal Government’s excess of outlays over receipts for a given 

period is financed primarily by borrowing from the public. 

DEOBLIGATION 

A downward adjustment of previously recorded obligations. This may be attributable to 

the cancellation of a project or contract, price revisions, or corrections of estimates 

previously recorded as obligations. 

DIRECT LOANS 

A direct loan is a disbursement of funds (not in exchange for goods or services) that is 

contracted to be repaid-with or without interest- on any of the following transactions: 

-direct Federal participation in loans privately made or held; 

-purchase of private loans through secondary market operations; and, 

56 
Budget Terms 

r 

-acquisition of guaranteed private loans or collateral in satisfaction of default or other 

guarantee claims. 

For informational purposes, transactions similar to direct loans are sometimes displayed 

in the budget. For example: 

-sale of Federal assets on credit terms for more than 90 days duration; 

-investments in obligations or preferred stoc’k of any privately owned enterprises; and, 

-deferred or delinquent interest that is capitalized. 

Direct loans, unlike loan guarantees, are included (net of repayments) as outlays in the 

budget. For a more detailed discussion, see Federal Credit Programs in Special Analysis F 

of the Special Analyses, Budget of the United States Government. (See also Loan 

Guarantee; Loan Insurance.) 

ENTITLEMENTS 

Legislation that requires the payment of benefits (or entitlements) to any person or unit of 

government that meets the eligibility requirements established by such law. Authorizations for entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Budget 

authority for such payments is not necessarily provided in advance, and thus entitlement 

legislation requires the subsequent enactment of appropriations unless the existing appropriation is permanent. Examples of entitlement programs are social security benefits 

and veterans compensation or pensions. Section 401(b) of the Congressional Budget and 

Impoundment Control Act of 1974 (P.L. 93-344, 31 U.S.C. 1351(b)) imposes certain 

limits on the use of entitlements. (See also Authorizing Legislation; Controllability; 

Spending Authority; Spending Legislation.) 

EXCHANGEOFASSETS 

The movement of money between the International Monetary Fund (IMF), or similar 

organizations, and the Department of Treasury. 

57 
Budget Terms 

The Government’s deposits with the IMF are considered to be assets. Therefore, the 

movement of money between the IMF and the Department of the Treasury is not in itself 

considered a receipt or an outlay, borrowing or lending. Changes in these holdings are 

outlays only to the extent that there is a realized loss, and are offsetting collections only to 

the extent that there is a realized profit on the exchange. 

EXPENDED APPROPRIATION 

The amount of expenditures (outlays) during the current fiscal year net of refunds to the 

appropriation made from general funds, special funds, and trust funds. 

EXPENDITURES 

With respect to provisions of the Antideficiency Act (31 U.S.C. 665) and the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344, 31 U.S.C. 1301, 

note), the term expenditures has the same definition as outlays. (See also Outlays. For 

distinction, see Accrued Expenditures.) 

EXPENDITURE TRANSACTIONS 

For accounting and reporting purposes, transactions between appropriation and fund accounts which represent payments, repayments, or receipts for goods or services furnished 

or to be furnished. Expenditure transactions are recorded as obligations/outlays of the 

transferring accounts and as reimbursements/receipts of the receiving accounts. (See also 

Nonexpenditure Transactions; Transfer Between Appropriation Accounts; Transfer of 

Funds.) 

EXPIRED ACCOUNT 

An account in which authority to incur obligations has lapsed but from which outlays may 

be made to pay existing obligations and liabilities previously incurred, as well as valid adjustments thereto. This includes successor accounts established pursuant to 31 U.S.C. 

701-708. (See also “M” Account.) 

58 
Budget Terms 

FEEDER ACCOUNT 

Certain appropriation and revolving fund accounts whose resources are available only for 

transfer to other specified appropriation or revolving fund accounts. 

FIRST CONCURRENT RESOLUTION ON THE BUDGET 

The resolution, containing Government-wide budget targets of receipts, budget authority, 

and outlays that guides Congress in its subsequent consideration of appropriations and 

revenue measures. It is required to be adopted by both Houses of Congress no later than 

May 15, pursuant to the Congressional Budget and Impoundment Control Act of 1974 

(P.L. 93-344, 31 U.S.C. 1324). (See also Concurrent Resolution on the Budget; Second 

Concurrent Resolution on the Budget.) 

FISCAL POLICY 

Federal Government policies with respect to taxes, spending and debt management, intended to promote the nation’s macroeconomic goals, particularly with respect to employment, gross national product, price level stability, and equilibrium in balance of 

payments. The budget process is a major vehicle for determining and implementing 

Federal fiscal policy. The other major component of Federal macroeconomic policy is 

monetary policy. (See also Monetary Policy defined in the Economic Terms section of this 

glossary.) 

FISCAL YEAR 

Any yearly accounting period, without regard to its relationship to a calendar year. 

r The fiscal year for the Federal Government begins on October I and ends on September 

30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal 

year 1980 is the year beginning October 1, 1979, and ending September 30, 1980. (Prior to 

fiscal year 1977, the Federal fiscal year began on July 1 and ended on June 30.) 

L---. - 59 
Budget Terms 

Budget Year 

The fiscal year for which the budget is being considered; the fiscal year following the 

current year. 

Current Year 

The fiscal year in progress. 

Prior Year 

The fiscal year immediately preceding the current year. 

FULL EMPLOYMENT BUDGET 

The estimated receipts, outlays, and surplus or deficit that would occur if the U.S. 

economy were continually operating at full capacity (traditionally defined as a certain 

percentage of the unemployment rate of the civilian labor force). (See also Employment 

and Labor Force defined in the Economic Terms section of this glossary.) 

FULL FUNDING 

Provides budgetary resources to cover the total cost of a program or project at the time it 

is undertaken. 

rFull funding differs from incremental funding, where budget authority is provided or 

recorded for only a portion of total estimated obligations expected to be incurred during a 

single fiscal year. Full funding is generally discussed in terms of multi-year programs, 

whether or not obligations for the entire program are made in the first year. For further 

discussion of this term, see U.S. General Accounting Office, Further implementation of 

FUN Fund&g in the Federal Government, PAD-78-80, September 7, 1978. (For distinction, see Incremental Funding. See also Multiple-Year Authority under Budget Authority; 

Multi-Year Budget Planning.) 

L--, 60 
B&get Terms 

i 

FUNCTIONAL CLASSIFICATION 

A system of classifying budget resources by function so that budget authority and outlays 

of budget and off-budget Federal entities, loan guarantees, and tax expenditures can be 

related in terms of the national needs being addressed. 

Budget accounts are generally placed in the single budget function (e.g., national defense, 

health) that best reflects its major end purpose addressed to an important national need, 

regardless of the agency administering the program. A function may be divided into two 

or more subfunctions, depending upon the complexity of the national need addressed by 

that function. 

For budget presentation purposes, each budget function is described in the context of national needs being served, and the subfunctions are described in the context of the major 

missions devoted to meeting national needs. For a presentation of the budget in terms of 

functional classification, see Appendix B in this glossary. (For distinction, see Object 

Classification. See also Activity; Agency Missions; National Needs.) 

GOVERNMENT-SPONSORED ENTERPRISES 

Enterprises established and chartered by the Federal Government to perform specific 

functions under the supervision of a Government agency. Since they are private corporations, they are excluded from the budget totals. Detailed budgets and explanatory statements of these enterprises are presented in Part VI of The Budget of the United States 

Government, Appendix. (For distinction, see Mixed-Ownership Government Corporation 

and Wholly-Owned Government Corporation. See also Off-Budget Federal Entities.) 

GRANTS 

I --- I 

Assistance awards in which substantial involvement is not anticipated between the Federal 

Government and the State or local government or other recipient during the performance 

of the contemplated activity. Such assistance is not limited to a. State or local government 

as in the case of grants-in-aid. (See P.L. 95-224, Federal Grant and Cooperative Agreement Act of 1977.) 

I- ._- 61 
Budget Terms ‘ . 

The two major forms of Federal grants are block and categorical. Block grants are given 

primarily to general purpose governmental units in accordance with a statutory formula. 

Such grants can be used for a variety of activities within a broad functional area. Examples of Federal block-grant programs are Omnibus Crime Control and Safe Streets Act of 

1968, Comprehensive Employment and training Act of 1973, Housing and Community 

Development Act of 1974, and the 1974 Amendments to the Social Security Act of 1935 

(Title XX). 

Categorical grants can be used only for a specific program and are usually limited to narrowly defined activities. Categorical grants consist of formula, project, and formulaproject grants. 

Formula grants allocate Federal funds to States or their subdivisions in accordance with a 

distribution formula prescribed by law or administrative regulation. 

Project grants provide Federal funding for fixed or known periods for specific projects or 

the delivery of specific services or products. (See also Cooperative Agreement; Grants-inAid.) 

GRANTS-IN-AID 

For ,purposes of the budget, grants-in-aid consist of budget outlays by the Federal 

Government to support State or local programs of governmental service to the public. 

Grants-in-aid do not include purchases from State or local governments or assistance 

awards to other classes of recipients (e.g., outlays for research or support of Federal 

prisoners). (See also Cooperative Agreement; Grants; Revenue Sharing.) 

IDENTIFICATION CODE 

Each appropriation or fund account in The Budget of the United States Government carries an 11-digit code that identifies: (a) the agency, (b) the account, (c) the timing of the 

transmittal to Congress, (d) the type of fund, and (e) the account’s functional classification. For a detailed explanation of the account identification code, see Appendix C in this 

glossary. 
Budget Terms 

r 

IMPOUNDMENT 

Any action or inaction by an officer or employee of the United States Government that 

precludes the obligation or expenditure of budget authority provided by Congress. (See 

also Deferral of Budget Authority; Impoundment Resolution; Rescission.) 

IMPOUNDMENT RESOLUTION 

A resolution by either the House of Representatives or the Senate that expresses disapproval of a proposed deferral of budget authority set forth in a special message transmitted by the President as required under Sec. 1013(a) of the Impoundment Control Act 

of 1974 (P.L. 93-344, 31 U.S.C. 1403). 

Whenever all or part of any budget authority provided by Congress is deferred, the President is required to transmit a special message to Congress describing the deferrals. Either 

House may, at any time, pass a resolution disapproving this deferral of budget authority, 

thus requiring that the funds be made available for obligation. When no congressional action is taken, deferrals may remain in effect until, but not beyond, the end of the fiscal 

year. If the funds remain available beyond.the end of a fiscal year and continued deferral 

of their use is desired, the President must transmit a new special message to Congress. (See 

also Deferral of Budget Authority; Impoundment.) 

INCREMENTAL FUNDING 

The provision (or recording) of budgetary resources for a program or project based on 

obligations estimated to be incurred within a fiscal year when such budgetary resources 

will cover only a portion of the obligations to be incurred in completing the program or 

project as programmed. This differs from full funding, where budgetary resources are 

provided or recorded for the total estimated obligations for a program or project in the initial year of funding. (For distinction, see Full Funding.) 

r -. 

JOINT RESOLUTION 

A joint resolution requires the approval of both Houses of Congress and the signature of 

the President, just as a bill does, and has the force of law if approved. There is no real difc. ..- 63 
Budget Terms 

ference between a bill and a joint resolution. The latter is generally used in dealing with 

limited matters, such as a single appropriation for a specific purpose. 

Joint resolutions also are used to propose amendments to the U.S. Constitution. These do 

not require presidential signature, but become a part of the Constitution when threefourths of the States have ratified them. 

LOAN GUARANTEE 

A loan guarantee is an agreement by which the Government pledges to pay part or all of 

the loan principal and interest to a lender or holder of a security, in the event of default by 

a third party borrower. If it becomes necessary for the Government to pay part or all of 

the loan principal or interest, the payment is a direct outlay. Otherwise, the guarantee 

does not directly affect Federal budget outlays. For a more detailed discussion, see 

Federal Credit Programs in Special Analysis F, of the Special Analyses, Budget qf the 

United States Government. (See also Direct Loans; Loan Insurance.) 

LOAN INSURANCE 

A type of loan guarantee whereby a Government agency operates a program (‘i yooled 

risks, pledging the use of accumulated insurance premiums to secure a 1enL :r against 

default on the part of the borrower. (See also Direct Loans; Loan Guarantee.) 

“M” ACCOUNT 

A successor account into which obligated balances under an appropriation are transferred 

(merged) at the end of the second full fiscal year following expiration. The “M” accounr 

remains available for the payment of obligations and liabilities charged or chargeable to 

various year appropriation accounts. (See also Expired Account; Merged Surplus 

Accounts; Obligated Balance under Balances of Budget Authority.) 

MEANS OF FINANCING 

f 

i 

Ways in which a budget deficit is financed or a budget surplus is used. 

A budget deficit may be financed by Treasury (or agency) borrowing, by reducing 

Treasury cash balances, by allowing unpaid liabilities to increase, or by certain equivalent 

64 
Budget Terms 

transactions. Conversely, a budget surplus may be used to repay borrowings or to build 

up cash balances. 

MERGED SURPLUS ACCOUNTS 

Accounts that are part of the Treasury’s general fund. They represent undisbursed and 

unobligated balances of previously appropriated monies for prior fiscal years which can 

be made available (restored) for disbursements under certain circumstances. The accounts 

are maintained by appropriation type (i.e., salaries and expenses for X agency) without 

regard to the fiscal year in which the appropriation was made. Restorations are made once 

each year and represent amounts needed to pay obligations contained in the “M” accounts. (See also “M” Account; Unobligated Balance under Balances of Budget Authority; Restoration; Withdrawal.) 

MISSION BUDGETING 

A budget approach that focuses on output rather than input and directs attention to how 

well an agency is meeting its responsibilities. By grouping programs and activities according to an agency’s mission or end purposes, mission budgeting makes it easier to identify 

similar programs. Missions at the highest level in the budget structure represent basic endpurpose responsibilities assigned to an agency. Descending levels in the budget structure 

then focus more sharply on the specific components of the mission and the programs 

needed to satisfy them. At the lowest levels are line items-that is-the supporting activities necessary to satisfy the missions. For further discussion of this term, see U.S. 

General Accounting Office, A Mission Budget Structure far the Department of 

Afl’culture-A Feasibility Study, PADgO-08. (See Also Agency Missions.) 

MIXED-OWNERSHIP GOVERNMENT CORPORATION 

A federally chartered enterprise or business activity designated by statute (31 U.S.C. 856) 

as a mixed ownership government corporation. Mixed-ownership government corporations are subject to audits by the General Accounting Office as required by the Government Corporation Control Act, as amended (31 USC. 857). They are also required to 

submit annual business-type budget statements to the Treasury and to the Office of 

Management and Budget in accordance with the Treasury Fiscal Requirements Manual, 

I-2-4100 and OMB Circular A-l 1. Sec. 37.1. 

65 
Budget Terms , 

Although off-budget entities are excluded from the budget, some of the outlays related to 

their operations are included. The Rural Telephone Bank is an example of a mixedownership corporation and an off-budget Federal entity whose fiscal activities appear in 

the budget documents. (See also Government Sponsored Enterprises; Wholly-Owned 

Government Corporations; Off-Budget Federal Entities.) 

MONTHLY TREASURY STATEMENT (MTS) 

A summary statement prepared from agency accounting reports and issued by the Department of Treasury. The MTS presents the receipts, outlays, and resulting budget surplus or 

deficit for the month and the fiscal year to date. (See also Treasury Combined Statement .) 

MULTI-YEAR BUDGET PLANNING 

A budget planning process designed to make sure that the long-range consequences of 

budget decisions are identified and reflected in the budget totals. Currently, multi-year 

budget planning in the executive branch encompasses a policy review for a 3-year period 

beginning with the budget year, plus projections for the subsequent 2 years. This process 

provides a structure for the review and analysis of long-term program and tax policy 

choices. (See also Forward Funding under Budget Authority; Full Funding; Projections.‘) 

NATIONAL NEEDS 

f- .-- 

i 

L-. ~_- 

Broad areas established to provide a coherent and comprehensive basis for analyzing and 

understanding the budget, in terms of the end purposes being served, without regard to 

the means that may be chosen to meet those purposes. The budget resources devoted to 

meeting national needs are classified by budget functions so that budget authority and 

outlays of budget and off-budget Federal entities, loan guarantees, and tax expenditures 

can be grouped in terms of the national needs being addressed. National needs are 

generally described in the context of major functions, whereas agency missions devoted to 

serving national needs are generally described as subfunctions. (See also Agency Missions; 

Functional Classification.) 

NEW SPENDING AUTHORITY 

Spending authority not provided by law on the effective date (January 19, 1976) of Section 401 of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 

66 
Budget Terms 

r 

93-344, 31 U.S.C. 1351), including any increase in or addition to spending authority provided by law on such date. However, this term does not apply to insured or guaranteed 

loan programs. (See also Spending Authority.) 

NONEXPENDITURE TRANSACTIONS 

For accounting and reporting purposes, transactions between appropriation and fund accounts that do not represent payments for goods and services received or to be received 

but serve only to adjust the amounts available in the accounts for making payments, except that transactions between accounts within the budget and deposit funds (which are 

outside the budget) will always be treated as expenditure transactions. Nonexpenditure 

transactions may not properly be recorded as obligations or outlays of the transferring accounts or as reimbursements or receipts of the receiving accounts. 

The statutory restrictions on the purpose, availability, and use of appropriated funds by 

administrative agencies require that no change be made in the availability of funds 

by agencies through the use of nonexpenditure transactions unless specifically authorized 

by law. (See also Expenditure Transactions; Transfer Appropriation Accounts under 

Appropriation (Expenditure), Receipt, and Fund Accounts; Transfer Between Appropriation/Fund Accounts; Transfer of Funds.) 

OBJECT CLASSIFICATION 

A uniform classification identifying the transactions of the Federal Government by the 

nature of the goods or services purchased (such as personnel compensation, supplies and 

materials, and equipment), without regard to the agency involved or the purpose of the 

programs for which they are used. Data according to object classification are provided in 

the Object Classification Schedule along with the corresponding Program and Financing 

Schedule, in The Budget of the United States Government, Appendix. See Explanation of 

Estimates in Part I of the Budget Appendix for detailed discussion. General instructions 

are provided in OMB Circular No. A-12, revised. (See also under Allocations. For distinction, see Functional Classification.) 

r ~-- I OBLIGATIONAL AUTHORITY 

The sum of (a) budget authority provided for a given fiscal year, (b) balances of amounts 

brought forward from prior years that remain available for obligation, and (c) amounts 

67 
Budget Terms 

authorized to be credited to a specific fund or account during that year, including 

transfers between funds or accounts. 

OBLIGATION-BASED BUDGETING 

Financial transactions involving the use of funds are recorded in the accounts primarily 

when obligations are incurred, regardless of when the resources acquired are to be consumed. (For distinction, see Cost-Based Budgeting.) 

OBLIGATIONS INCURRED 

Amounts of orders placed, contracts awarded, services received, and similar transactions 

during a given period that will require payments during the same or a future period. Such 

amounts will include outlays for which obligations had not been previously recorded and 

will reflect adjustments for differences between obligations previously recorded and actual outlays to liquidate those obligations. (For legal basis of Obligations Incurred, see 3 1 

U.S.C. 200. See also OMB Circular A-34.) 

OFF-BUDGET FEDERAL ENTIT.lES 

Certain federally owned and controlled entities whose transactions (e.g., budget authority 

or outlays) have been excluded from budget totals under provisions of law. The fiscal activities of these entities, therefore, are not reflected in either budget authority or budget 

outlay totals. However, the outlays of off-budget Federal entities are added to the budget 

deficit to derive the total Government deficit that has to be financed by borrowing from 

the public or by other means. Off-budget Federal entities are discussed in Part 6, Perspectives on the Budget, of The Budget of the United States Government. Schedules and 

financial statements are presented in Part IV of The Budget of the United States Government, Appendix. (See also Government-Sponsored Enterprises; Mixed-Ownership 

Government Corporation; Off-Budget Outlays; Wholly-Owned Government Corporation.) 

OFF-BUDGET OUTLAYS 

Outlays of off-budget Federal entities whose transactions have been excluded from the 

budget totals under provisions of law, even though these outlays are part of total Government spending. (See also Off-Budget Federal Entities; Outlays.) 

68 
Budget Terms 

OUTLAYS 

Obligations are generally liquidated when checks are issued or cash disbursed. Such 

payments are called outlays. In lieu of issuing checks, obligations may also be liquidated 

(and outlays occur) by the maturing of interest coupons in the case of some bonds, or by 

the issuance of bonds or notes (or increases in the redemption value of bonds 

outstanding). 

Outlays during a fiscal year may be for payment of obligations incurred in prior years 

(prior-year outlays) or in the same year. Outlays, therefore, flow in part from-unexpended 

balances of prior-year budget authority and in part from budget authority provided for 

the year in which the money is spent. 

Total budget outlays are stated net of offsetting collections, and exclude outlays of offbudget Federal entities. (See under Collections.) 

The terms expenditure and net disbursement are frequently used interchangeably with the 

term outlays. (See also Off-Budget Outlays.) 

OVERSIGHT COMMITTEE 

The congressional committee charged with general oversight of the operation of an agency 

or program. In most cases, but not all, the oversight committee for an agency is also the 

authorizing committee for that agency’s programs. (See also Authorizing Committee.) 

PERSONAL SERVICES AND BENEFITS 

Personnel Compensation 

Commises gross compensation (before deduction for taxes and other purposes) for 

services of individuals, including terminal leave payments. This classification covers 

all payments (salaries, wages, fees) for personal services rendered to the Government 

by its officers or employees, either civil or military, and compensation for special 

services rendered by consultants or others. 

I- -_ 69 
Budget Terms 

r 

Personnel Benefits 

Comprises cash allowances paid to civilian and military employees incident to their 

employment and payment to other funds for the benefit of employees. Prerequisites 

provided in kind, such as uniforms or quarters, and payments to veterans and 

former employees resulting from their employment are excluded. 

Benefits to Former Personnel 

Pensions, annuities, or other benefits due to former employees or their survivors 

based (at least in part) on the length of their services to the Government, other than 

benefits paid from funds financed from employer and/or employees contributions 

and premiums. Includes Federal payments to funds that provide benefits to former 

employees. Excludes benefits provided in kind, such as hospital and medical care, 

and indemnities for disability or death of former employees. (See also Wages and 

Salaries defined in the Economic Terms section of this glossary.) 

PRESIDENTIAL STATEMENT OF BUDGETARY 

AMENPMENTS OR REVISIONS 

A statement of all amendments to or revisions in the budget authority requested, the 

estimated outlays, and the estimated receipts for the ensuing fiscal year as set forth in the 

President’s budget transmitted to Congress pursuant to the Budget and Accounting Act ot 

1921, as amended (31 USC. 1 l(a)). The presidential statement is required on or before 

April 10 and July 15 pursuant to 31 U.S.C. 1 l(g), and may include any previous amendments or revisions proposed on behalf of the executive branch that the President deems 

necessary and appropriate. 

i 

The presidential statement transmitted on or before July 15 of any year may be included 

in the supplemental summary required to be transmitted during such year pursuant to the 

Budget and Accounting Act of 1921, as amended (31 U.S.C. 11(b)). The budget transmitted to Congress pursuant to 31 U.S.C. 11(a) for any fiscal year, or the supporting 

detail transmitted in connection therewith, must also include a statement of all such 

amendments and revisions with respect to the fiscal year in progress made before the date 

of transmission of such budget, (See also Budget Amendment; Budget Updates; President’s Budget; Supplemental Summary of the Budget.) 

70 
Budget Terms 

r 

PRESIDENT’S BUDGET 

The document sent to Congress by the President in January of each year in accordance 

with the Budget and Accounting Act of 1921, as amended, estimating Government 

receipts and outlays for the ensuing fiscal year and recommending appropriations in 

detail. Estimates for the legislative and judicial branches of the Federal Government are 

“transmitted without revision” (31 U.S.C. 11). (See uiso Budget Estimates; Budget Updates; Congressional Budget; Presidential Statement of Budgetary Amendments and 

Revisions; Tax Expenditures Budget defined in the Tax Terms section of this glossary.) 

PROGRAM 

Generally defined as an organized set of activities directed toward a common purpose, or 

goal, undertaken or proposed by an agency in order to carry out its responsibilities. In 

practice, however, the term program has many uses and thus does not have a well-defined, 

standard meaning in the legislative process. Program is used to describe an agency’s mission, programs, functions, activities, services, projects, and processes. 

PROGRAM EVALUATION 

In general, the process of assessing program alternatives, including research and results, 

and the options for meeting program objectives and future expectations. Specifically, program evaluation is the process of appraising the manner and extent to which programs 

-achieve their stated objectives, 

-meet the performance perceptions and expectations of responsible Federal officials and 

other interested groups, 

-produce other significant effects of either a desirable or undesirable character. 

PROJECTIONS 

Estimates of budget authority, oudays, receipts, or other budget amounts that extend 

several years into the future. Projections generally are intended to indicate the budgetar) 

implications of continuing or proposed programs and legislation for an indefinite period 

71 
of time. These include alternative program and policy strategies and ranges of possible 

budget amounts. Projections usually are not firm estimates of what will occur in future 

years, nor are they intended to be recommendations for future budget decisions. The third 

and fourth years beyond the current budget year (BY + 3 and BY + 4) are considered projections in the President’s Budget. 

The statutory basis for preparing and submitting projections are spelled out in the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344), section 603 for 

the President’s projections, and sections 308 and 403 for Congress’ and the Congressional 

Budget Office’s projections. (See also Budget Estimates; Multi-Year Budget Planning.) 

RANKING 

In zero-base budgeting, the process by which higher level managers evaluate and array 

program or activity levels (as shown in decision packages) in decreasing order of priority. 

The ranking process results in a relative priority assigned to each decision package in the 

budget request. (See also Cross-Agency Ranking; Decision Package; Zero-Base 

Budgeting.) 

REAPPORTIONMENT 

A revision by the Office of Management and Budget of a previous apportionment of 

budgetary resources for an appropriation or fund account. Agency requests for reapportionment are usually submitted to OMB as soon as a change in previous apportionment 

becomes necessary due to changes in amounts available, program requirements, or cost 

factors. (For exceptions, see OMB Circular A-34, sec. 44.4.) A reapportionment would 

ordinarily cover the same period, project, or activity covered in the original apportionment. (See also Allotment; Apportionment.) 

RECONCILIATION PROCESS 

A process used by Congress to reconcile amounts determined by tax, spending, and debt 

legislation for a given fiscal year with the ceilings enacted in the second required concurrent resolution on the budget for that year. Section 310 of the Congressional Budget and 

Impoundment Control Act of 1974 (31 U.S.C. 1331) provides that the second concurrent 

resolution on the budget, which sets binding totals for the budget, may direct committees 

to determine and recommend changes to laws, bills, and resolutions, as required to con72 
Budget Terms 

II 

form with the binding totals for budget authority, revenues, and the public debt. Such 

changes are incorporated into either a reconciliation resolution or a reconciliation bill. 

(See also Concurrent Resolution on the Budget.) 

Reconciliation Bill 

A bill, requiring enactment by both Houses of Congress and approval by the President, making changes to legislation that has been enacted or enrolled. 

Reconciliation Resolution 

A concurrent resolution, requiring passage by both Houses of Congress but not the 

approval of the President, directing the Clerk of the House or the Secretary of 

the Senate to make specified changes in bills or resolutions that have not yet reached 

the stage of enrollment. 

RECOVERIES OF PRIOR-YEAR OBLIGATIONS 

Amounts made available in no-year and unexpired multi-year accounts through (a) downward adjustments of prior-year obligations, including amounts returned from prior-year 

advances to consolidated working funds; (b) downward adjustment for the difference between obligations previously recorded and outlays made in payment thereof; and (cl 

refunds due to the recovery of erroneous payments or accounting adjustments. 

f- ~- 

I 

i 

,L. - 

REFUNDS 

Returns of advances or recoveries of erroneous disbursements from appropriation or fund 

accounts that are directly related to, and reductions of, previously recorded payments 

from the accounts. Also considered refunds are returns to the taxpayers of receipt collections in excess of liabilities (i.e., tax refunds). These refunds are recorded only if the cash 

is actually disbursed to the taxpayer. If the taxpayer chooses to apply credits for tax 

refunds to succeeding tax liabilities, the transaction is not recorded as a refund. In certain 

cases, payments are made under refund authority that exceed tax liabilities. Such excesses 

over liabilities are treated as budgetautlays rather than refund of receipts. (For distinction, see Reimbursements. See also Appropriations under Budget Authority; Refundable 

Tax Credits and Tax Credits defined in the Tax Terms section of this glossary.) 

73 
REIMBURSEMENTS 

Sums received by the Federal Government as a repayment for commodities sold or services furnished either to the public or to another Government account that are authorized 

by law to be credited directly to specific appropriation and fund accounts. These amounts 

are deducted from the total obligations incurred (and outlays) in determining net obligations (and outlays) for such accounts. 

Anticipated reimbursements are, in the case of transactions with the public, estimated COL 

lections comprising advances expected to be received and reimbursements expected to be 

earned. In transactions between Government accounts, anticipated reimbursements consist of orders expected to be received but for which no orders have been accepted. (For 

distinction, see Refunds. See also Offsetting Collections under Collections; Unfilled 

Customers’ Orders.) 

REPROGRAMMING 

Utilization of funds in an appropriation account for purposes other than those contemplated at the time of appropriation. 

Reprogramming is generally preceded by consultation between the Federal agencies and 

the appropriate congressional committees. It involves formal notification and, in some instances, opportunity for disapproval by congressional committees. 

RESCISSION 

The consequence of enacted legislation that cancels budget authority previously provided 

by Congress before the time when the authority would otherwise lapse (i.e., cease to be 

available for obligation). 

The Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344; 31 

U.S.C. 1402) specifies that whenever the President determines that all or part of any 

budget authority will not be needed to carry out the full objectives or scope of programs 

for which the authority was provided, thepresident will propose to Congress that the 

funds be rescinded. Likewise, if all or part of any budget authority limited to a fiscal 

year-that is, annual appropriations or budget authority of a multiple-year appropriation 

74 
Budget Terms 

r --- 

in the last year of availability-is to be reserved from obligation for the entire fiscal year, 

a rescission will be proposed. Budget authority may also be proposed for rescission for 

fiscal policy or other reasons. Generally, amounts proposed for rescission are withheld for 

up to 45 legislative days while the proposals are being considered by Congress. 

All funds proposed for rescission, including those withheld, must be reported to Congress 

in a special message. If both Houses have not completed action on a rescission proposed 

by the President within 45 calendar days of continuous session, any funds being withheld 

must be made available for obligation. (See also Apportionment; Budgetary Reserves; 

Deferral of Budget Authority; Impoundment; Rescission Bill.) 

RESCISSION BILL 

A bill or joint resolution that cancels, in whole or in part, budget authority previously 

granted by Congress. 

Rescissions proposed by the President must be transmitted in a special message to Congress. Under section 1012 of the Congressional Budget and Impoundment Control Act of 

1974 (P.L. 93-344), unless both Houses of Congress complete action on a rescission bill 

within 45 days of continuous session after receipt of the proposal, the budget authority 

must be made available for obligation. (See also Rescission.) 

RESEARCH AND DEVELOPMENT 

Research is systematic, intensive study directed toward fuller scientific knowledge or 

understanding of the subject studied. Development is the systematic use of the knowledge 

and understanding gained from research, directed toward the production of useful materials, devices, systems or methods, including the design and development of prototypes 

and processes. 

Research and development is a broad term that embraces the work performed by Federal 

Government agencies and private individuals or organizations under contractual or grant 

arrangements with the Government. It includes all fields-education and the social 

sciences, as well as the physical sciences and engineering. 

Research and development excludes routine product testing, quality control, mapping, 

collection of general purpose statistics, experimental production, routine evaluation of an 

operational program, and the training of scientific and technical personnel. 

75 
Budget Terms 

RESTORATION 

An unobligated amount previously withdrawn by administrative action that is again made 

available for obligation and outlay. (For distinction, see Reappropriations under Budget 

Authority. See also Merged Surplus Accounts.) 

REVENUE SHARING 

Federal funds distributed by formula to States and general-purpose local governments 

with few or no limits on the purposes for which the funds may be used and few restrictions 

on the procedures which must be followed in spending the funds. (See also 

Grants-in-Aid.) 

SCOREKEEPING 

Procedures for tracking the status of congressional budgetary actions. Examples of scorekeeping information include up-to-date tabulations and reports on congressional actions 

affecting budget authority, receipts, outlays, surplus or deficit, and the public debt limit, 

as well as outlay and receipt estimates and reestimates. 

Scorekeeping data published by the Congressional Budget Office (CBO) include, but are 

not limited to, status reports on the effects of congressional actions (and in the case of 

scorekeeping reports prepared for the Senate Budget Committee, the budget effects of 

potential congressional actions), and comparisons of these actions to targets and ceilings 

set by Congress in the budget resolutions. Periodic scorekeeping reports are required to be 

produced by the CBO pursuant to section 308(b) of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344, 31 U.S.C. 1329). 

SECOND CONCURRENT RESOLUTION ON THE BUDGET 

The resolution adopted by Congress containing budget ceilings classified by function for 

budget authority and outlays and a floor for budget receipts. This resolution may retain 

or revise the levels set earlier in the year, and can include directives to the appropriations 

committees and to other committees with jurisdiction over budget authority or entitlement authority. The second resolution may also direct the appropriate committees to 

recommend changes in budget receipts or in the statutory limit on the public debt. 
Budget Terms 

Changes recommended by various committees pursuant to the second budget resolution 

are to be reported in a reconciliation bill (resolution, in some cases) on which Congress 

must complete action by September 25, a few days before the new fiscal year commences 

on October 1. (See also Concurrent Resolution on the Budget; First Concurrent Resolution on the Budget; Reconciliation Process.) 

SEIGNIORAGE 

The difference between the face value of minted coins and the cost of their production. 

Seigniorage arises from the exercise of the Government’s monetary powers and differs 

from receipts coming from the public, since there is no corresponding payment by another 

party. Therefore, seigniorage is excluded from budget receipts and treated as a means of 

financing a budget deficit, or as a supplementary amount to be applied to reduce debt or 

to increase the cash in the Treasury in the years of a budget surplus. 

SPECIAL FOREIGN CURRENCY PROGRAM APPROPRIATION 

An appropriation made available to incur obligations for which payments must be made 

only in U.S.-owned foreign currencies that are declared in excess of the normal requirements of the United States by the Secretary of the Treasury. The appropriation is 

made in general fund dollar amounts credited to the account or fund generating the currency, or to miscellaneous receipts of the Treasury, as appropriate. The appropriated 

dollars are thereby exchanged for excess foreign currency (held in Treasury foreign currency fund accounts) that is used to make the necessary payments. (For distinction, see 

Foreign Currency Fund Accounts under Appropriation (Expenditure), Receipt, and Fund 

Accounts.) 

SPENDING AUTHORITY 

rAs defined by the Congressional Budget and Impoundment Control Act of 1974 (P.L. 

93-344, 31 U.S.C. 1323), a collective designation for appropriations, borrowing authority, contract authority, and entitlement authority for which the budget authority is not 

provided in advance by appropriation acts. The latter three are also commonly referred to 

as backdoor authority. (See also Backdoor Authority; Entitlements; New Spending 

Authority; Spending Committees; Spending Legislation.) 

L- .- 77 
Budget Terms 

SPENDING COMMITTEES 

The standing committees of the House and Senate with jurisdiction over legislation that 

permits the obligation of funds. For most programs, the House and Senate Appropriations Committees are the spending committees. For other programs, the authorizing 

legislation itself permits the obligation of funds (backdoor authority). When this is the 

case, the authorizing committees are then the committees with spending responsibility. 

(See also Authorizing Committee; Backdoor Authority; Spending Authority; Spending 

Legislation.) 

SPENDING LEGISLATION (SPENDING BILL) 

A term used in the budget scorekeeping of the Congressional Budget Office to indicate 

legislation that directly provides budget authority or outlays. Spending legislation includes 

(1) appropriations legislation, (2) legislation that provides budget authority directly 

without the need for subsequent appropriations action, and (3) entitlement legislation 

which, while requiring subsequent appropriations action, essentially “locks in” budget 

authority at the time of authorization (except legislation that establishes conditional entitlements, where recipients are entitled to payments only to the extent that funds are 

made available in subsequent appropriations legislation). (See also Authorizing Legislation; Backdoor Authority; Entitlements; Spending Authority; Spending Committees.) 

SUBFUNCTION 

Subdivisions of a budget function. For example, health care services and health research 

are subfunctions of the function Health. For a presentation of the budget in terms of subfunctions, see Appendix B in this glossary. (See also Functional Classification.) 

SUBSIDY 

Generally, a payment or benefit made by the Federal Government for which there is no 

current charge. Subsidies are designed to support the conduct of an economic enterprise 

or activity, such as ship operations. They may also refer to provisions in the tax laws that 

provide certain tax expenditures and to the provisions af loans, goods, and services to the 

public at prices lower than market value, such as interest subsidies. (See also Tax Expenditures defined in the Tax Terms section of this glossary.) 

k- .- 78 
Budget Terms 

r I I 

SUBSTANTIVE LAW 

Statutory public law other than appropriation law; sometimes referred to as basic law. 

Substantive law usually authorizes, in broad general terms, the executive branch to carry 

out a program of work. Annual determination as to the amount of the work to be done is 

usually thereafter embodied in appropriation law. (See also Authorizing Legislation.) 

SUPPLEMENTAL APPROPRIATION 

An act appropriating funds in addition to those in an annual appropriation act. Supplemental appropriations provide additional budget authority beyond the original estimates 

for programs or activities (including new programs authorized after the date of the 

original appropriation act) in cases where the need for funds is too urgent to be postponed 

until enactment of the next regular appropriation bill. Supplementals may sometime include items not appropriated in the regular bills for lack of timely authorizations. (See 

also Antideficiency Act; Apportionment; Appropriation Act; Deficiency Apportionment; 

Deficiency Appropriation.) 

SUPPLEMENTAL SUMMARY OF THE BUDGET 

(MID-YEAR OR MID-SESSION REVIEW) 

A supplemental summary of the budget for the ensuing fiscal year transmitted to Congress by the President on or before July 15 of each year pursuant to the Budget and 

Accounting Act of 1921, as amended (31 U.S.C. 1 l(b)). With respect to that ensuing fiscal 

year, the summary reflects (a) all substantial alterations in or reappraisals of the estimates 

of expenditures and receipts, (b) all substantial obligations imposed on that budget after 

its transmission to Congress, (c) the actual or proposed appropriations made during the 

fiscal year in progress, and (d) the estimated condition of the Treasury at the end of the 

fiscal year if the financial proposals contained in the budget are adopted. The summary 

also contains any information the President considers necessary or advisable to provide 

the Congress and a complete and current estimate of the functions, obligations, requirements, and financial condition of the Government for that ensuing fiscal year. (See 

also Presidential Statement of Budgetary Amendments or Revisions.) 

TRANSFER BETWEEN APPROPRIATION/FUND ACCOUNTS 

A transaction that, pursuant to law, withdraws budget authority or balances from one appropriation account for credit to another. 

79 
Budget Terms 

Withdrawals that are adjustments to obligational authority are treated as “adjustments of 

budgetary resources” rather than as payments. Payments to other accounts for goods or 

services received, or to be received, are not transfers but are outlay transactions. (See also 

Allocations; Expenditure Transactions; Nonexpenditure Transactions; Transfer Appropriation Accounts under Appropriation (Expenditure), Receipt, and Fund Accounts; 

Transfer of Funds.) 

TRANSFER OF FUNDS 

When specifically authorized in law, all or part of the budget authority in one account 

may be transferred to another account. Depending upon the nature of the transfer, these 

charges and credits will be treated as either expenditure transfers or nonexpenditure 

transfers. (See also Allocations; Expenditure Transactions; Nonexpenditure Transactions; Transfer Appropriation Accounts under Appropriation (Expenditure), Receipt, 

and Fund Accounts; Transfer Between Appropriation/Fund Accounts.) 

TRANSITION QUARTER (TQ) 

The 3-month period (July 1 to September 30, 1976) between the end of fiscal year 1976 

and the beginning of fiscal year 1977 resulting from the change from a July 1 through 

June 30 fiscal year to an October 1 through September 30 fiscal year beginning with fiscal 

year 1977. 

TREASURY COMBINED STATEMENT 

An annual statement of budgetary results on a cash basis presented at the individual 

receipt and appropriation account level. It supports in detail the fiscal year-end results 

published in the Monthly Treasury Slatement. (See also Monthly Treasury Statement.) 

UNDELIVERED ORDERS 

The value of goods and services ordered and obligated, but which have not been received. 

This amount includes any orders for which advance payment has been made but for which 

delivery or performance has not yet occurred. This term is synonymous with unliquidated 

obligations. (See also Advances; Withdrawal.) 

80 
Eh’dget Terms 

UNDISTRIBUTED OFFSETTING RECEIPTS 

Composed of (a) payments to trust funds by Government agencies, as employer, for their 

employees’ retirement; (b) interest paid to trust funds on their investments in Government 

securities; and (c) proprietary receipts from rents and royalties on the Outer Continental 

Shelf lands. Undistributed offsetting receipts are included as a separate category in the 

Functional Classification. (See Appendix B in this glossary.) For a more detailed discussion, see Part 5, Meeting National Needs, The Federal Program by Function, The Budget 

of the United States Government. (See also Offsetting Receipts under Collections.) 

UNFILLED CUSTOMERS’ ORDERS 

The amount of orders accepted from other accounts within the Government for goods 

and services to be furnished on a reimbursable basis. In the case of transactions with the 

public, amounts advanced or collected for which the account or fund has not yet performed the service or incurred its own obligations for that purpose. (See also Reimbursements.) 

UNIFIED BUDGET 

The present form of the budget of the Federal Government adopted beginning with the 

1969 budget, in which receipts and outlays from Federal funds and trust funds are consolidated. When these fund groups are consolidated to display budget totals, transactions 

that are outlays of one fund group for payment to the other fund group (i.e., interfund 

transactions) are deducted to avoid double counting. By law, budget authority and 

outlays of off-budget entities are excluded from the unified budget, but data relating to 

off-budget entities are displayed in the budget documents. 

WARRANTS 

The official documents issued pursuant to law by the Secretary of the Treasury that establish the amount of money authorized to be withdrawn from the Treasury. 

WHOLLY-OWNED GOVERNMENT CORPORATION 

A federally chartered enterprise or business activity designated by statute (31 U.S.C. 846) 

as a wholly-owned government corporation. Each such corporation is required to submit 

81 
%idget Terms 

UNDISTRIBUTED OFFSETTING RECEIPTS 

Composed of (a) payments to trust funds by Government agencies, as employer, for their 

employees’ retirement; (b) interest paid to trust funds on their investments in Government 

securities; and (c) proprietary receipts from rents and royalties on the Outer Continental 

Shelf lands. Undistributed offsetting receipts are included as a separate category in the 

Functional Classification. (See Appendix B in this glossary.) For a more detailed discussion, see Part 5, Meeting National Needs, The Federal Program by Function, The Budget 

of the United States Governmenf. (See also Offsetting Receipts under Collections.) 

UNFILLED CUSTOMERS’ ORDERS 

The amount of orders accepted from other accounts within the Government for goods 

and services to be furnished on a reimbursable basis. In the case of transactions with the 

public, amounts advanced or collected for which the account or fund has not yet performed the service or incurred its own obligations for that purpose. (See also Reimbursements.) 

UNIFIED BUDGET 

The present form of the budget of the Federal Government adopted beginning with the 

1969 budget, in which receipts and outlays from Federal funds and trust funds are consolidated. When these fund groups are consolidated to display budget totals, transactions 

that are outlays of one fund group for payment to the other fund group (i.e., interfund 

transactions) are deducted to avoid double counting. By law, budget authority and 

outlays of off-budget entities are excluded from the unified budget, but data relating to 

off-budget entities are displayed in the budget documents. 

WARRANTS 

The official documents issued pursuant to law by the Secretary of the Treasury that establish the amount of money authorized to be withdrawn from the Treasury. 

WHOLLY-OWNED GOVERNMENT CORPORATION 

A federally chartered enterprise or business activity designated by statute (31 U.S.C. 846) 

as a wholly-owned government corporation. Each such corporation is required to submit 

81 
Budget Terms 

f 

YEAR-AHEAD REQUESTS 

Any request for the enactment of legislation authorizing new budget authority to continue 

a program or activity for a fiscal year. Year-ahead requests must be submitted to Congress 

no later than May 15 of the year preceding the year in which such fiscal year begins. Any 

request for the enactment of legislation authorizing the enactment of new budget authority for a new program or activity which is to continue for more fhan I fiscal year is required to be submitted for at least the first 2 fiscal years. (P.L. 93-344, 31 U.S.C. 1 Ic.) 

ZERO-BASE BUDGETING 

A process emphasizing management’s responsibility to plan, budget, and evaluate. Zerobase budgeting provides for analysis of alternative methods of operation and various 

levels of effort. It places new programs on an equal footing with existing programs by requiring that program priorities be ranked, thereby providing a systematic basis for 

allocating resources. (See also Consolidated Decision Packages; Cross Agency Ranking; 

Decision Package; Decision Package Set; Decision Unit; Decision Unit Overview; 

Ranking.) 

a3 
ACCOUNTING SYSTEMS 

The total structure of records and procedures that record, classify, and report information on the financial position and operations of a governmental unit or any of its funds, 

balanced account groups, and organizational components. 

Each executive agency is required to establish and maintain adequate systems of accounting 

to provide information on obligations, accrued expenditures, applied costs, and outlays, 

as needed for management purposes. Such systems must be consistent with the standards 

and principles prescribed by, and have the approval of, the Comptroller General of the 

United States. (See also Internal Control.) 

ACCOUNTS PAYABLE 

Amounts owed to others for goods and services received and assets acquired. 

For reporting purposes under OMB Circular A-34, “accounts payable, net,” consists of: 

(a) the amount owed by an account for goods received and services performed but not yet 

paid for; (b) the amount of income that has been received by an account but not yet 

earned; and, (c) as offsets, accounts receivable and the amount of advances made by the 

account for which goods have not yet been received or services performed. (See also Accounts Receivable.) 

ACCOUNTS RECEIVABLE 

Amounts due from others for goods furnished and services rendered. Such amounts include reimbursements earned and refunds receivable. (See also Accounts Payable.) 

ACCRUAL BASIS OF ACCOUNTING 

The basis of accounting under which revenues are recorded when earned and expenditures 

are recorded when goods are received and services performed even though the receipt of 

the revenue or the payment of the expenditure may take place, in whole or part, in another 

accounting period. 

The accrual basis of accounting can contribute materially to effective financial control 

over resources and cost of operations, and it is essential to the development of adequate 

85 
Accounting Terms - 

cost information. (See also Accrued Expenditures defined in the Budget Terms section of 

this glossary; Cash Basis of Accounting.) 

ASSETS 

Any item of economic value owned by a governmental unit. The item may be physical in 

nature (tangible) or a right to ownership (intangible) that is expressed in terms of cost or 

some other value. (See also Liabilities.) 

CASH BASIS OF ACCOUNTING 

The basis of accounting whereby revenues are recorded when received in cash and expenditures (outlays) are recorded when paid, without regard to the accounting period to 

which the transactions apply. (See also Accrual Basis of Accounting.) 

CONTINGENT LIABILITY 

An existing condition, situation, or set of circumstances involving uncertainty as to a 

possible loss to an agency that will ultimately be resolved when one or more future events 

occur or fail to occur. 

For the purpose of Federal credit programs, a contingent liability is a conditional commitment that may become an actual liability because of a future event beyond the control of 

the Government. Contingent liabilities include such items as loan guarantees and bank 

deposit insurance. (See a/so Liabilities.) 

COST ACCOUNTING STANDARD 

A statement promulgated by the Cost Accounting Standards Board, which becomes effective unless disapproved by Congress. These statements are intended to achieve uniform 

and consistent standards in the cost accounting practices followed by Defense contractors. 

DEPRECIATION 

The systematic and rational allocation of the costs of equipment and buildings (having a 

life of more than 1 year) over their useful lives. To match costs with related revenues in 

86 
Accounting Terms 

measuring income or determining the costs of carrying out program activities, depreciation reflects the use of the asset(s) during specific operating periods. 

FUND ACCOUNTING 

The legal requirement for Federal agencies to establish accounts for segregating revenues 

and other resources, together with all related liabilities, obligations, and reserves, for the 

purpose of carrying on specific activities or attaining certain objectives in accordance with 

special regulations, restrictions, or limitations. Fund accounting, in a broad sense, is required in the Federal Government to demonstrate agency compliance with requirements 

of existing legislation for which Federal funds have been appropriated or otherwise 

authorized. 

One of the most important laws requiring Federal agencies to adhere to fund accounting 

concepts is the Antideficiency Act. (See also Antideficiency Act defined in the Budget 

Terms section of this glossary.) 

HOLDBACK 

The ampunt of money withheld from periodic payments to contractors to assure compliance with contract terms. Usually the amount to be withheld is expressed as a percentage in the contract provisions. The amounts withheld are paid to the contractor after a 

designated official certifies that the contractor has completed work pursuant to the contract terms. 

INDIRECT COST 

Any cost incurred for common objectives and therefore cannot be directly charged to any 

single cost objective. These costs are allocated to the various classes of work in proportion 

to the benefit to each class. Indirect cost is also referred to as overhead or burden cost. 

INTERNAL CONTROL 

The plan of organization and all of the coordinate methods and measures adopted within 

a Federal agency to safeguard the agency’s assets, check the accuracy and reliability of its 

accounting data, promote operational efficiency, and encourage adherence to prescribed 

managerial policies. 

87 
Accounting Terms 

The system of internal control must be developed with appropriate regard to the size and 

nature of the particular agency or organizational unit that is to be served. (See also 

Accounting Systems.) 

LIABILITIES 

Amounts owed for items received, services rendered, expenses incurred, assets acquired, 

construction performed (regardless of whether invoices have been received), and amounts 

received but as yet unearned. 

Included are amounts owed for goods in the hands of contractors under the constructive 

delivery concept (when the records of the agency provide such information), and amounts 

owed under grants, pensions, awards, and other indebtedness not involving the furnishing 

of goods and services. The two classifications occurring most frequently are the following: 

Current Liabilities 

Liabilities that will be due within a short time (usually 1 year or less) and that are to 

. be paid out of current assets. 

Includes all amounts owed on the basis of invoices or other evidence of receipt of 

goods and services, other amounts owed for the purchase of goods and services even 

if not “due and payable,” and deferred income (received but not earned). 

Long-term and Unfunded Liabilities 

Liabilities that will not be due for a comparatively long time (usually more than 1 

year). However, as they come within the l-year range, and are to be paid, such liabilities become current. 

I-- Includes bonded debt, notes payable, and liabilities that will not become obligations 

until a later time (e.g., accrued annual leave in the case of appropriation accounts). 

(See also Accrued Expenditures defined in the Budget Terms section of this glossary; 

Assets; Contingent Liability.) 
Accounting Terms 

LIQUIDITY 

The ease with which an asset can be converted to cash at prevailing prices. For example, 

demand deposits (checking accounts) are more liquid than time (savings) deposits, but 

both are more liquid than real estate or plant and equipment. 

REVENUES 

Revenues represent the increase in assets (or decrease in liabilities) that result from operations. Revenues result from (1) services performed by the Federal Government, (2) goods 

and other tangible property delivered to purchasers, and (3) amounts becoming owed to 

the Government for which no current performance by the Government is required. 

Contingencies that might result in gains should not be recorded in the accounts since to do 

so would recognize revenue prior to its realization. Contingencies that might result in 

gains should be carefully explained in financial statements. 

The term revenues is commonly used interchangeably with the term collections. (See Collections defined in the Budget Terms section of this glossary.) 

89 
Economic Terms and Definitions 

ABILITY TO PAY 

The principle that the tax burden should be distributed according to a person’s income. It 

is based on the assumption that as a person’s income increases, the person can and should 

contribute a larger percentage of his/her income to support government activities. The 

progressive Federal income tax is based on this principle. 

AUTOMATIC STABILIZER (BUILT-IN STABILIZER) 

A mechanism having a countercyclical effect that automatically moderates changes in incomes and outputs in the economy without specific decisions to change government 

policy. Unemployment insurance and the income tax are among the most important of the 

automatic stabilizers in the United States. (See also Countercyclical.) 

BALANCE OF PAYMENTS 

A statistical record of economic transactions between one country, for example, the 

United States, and the rest of the world. The balance of payments accounts normally 

distinguish among transactions involving goods, services, short-term capital, and longterm capital. 

BUSINESS CYCLES 

The recurrent phases of expansion and contraction in overall business activity, evidenced 

by fluctuations in measures of aggregate economic activity, notably real gross national 

product. Although business cycles are recurrent, both the duration and the magnitude of 

individual cycles vary greatly. 

CAPITAL 

The designation applied in economic theory to one of the three major factors of production, the others being land and labor. Capital can refer either to physical capital, such as 

plant and equipment, or to the financial resources required to purchase physical capital. 

(See also Capital Budget defined in the Budget Terms section of this glossary.) 

c 91 
Economic Terms 

CONSTANT DOLLAR 

A dollar value adjusted for changes in prices. Constant dollars are derived by dividing 

current dollar amounts by an appropriate price index, a process generally known as 

deflating. The result is a constant dollar series as it would presumably exist if prices and 

transactions were the same in all subsequent years as in the base year. Any changes in such 

a series would reflect only changes in the real volume of goods and services. Constant 

dollar figures are commonly used for computing the gross national product and its components and for estimating total budget outlays. (See also Current Dollar.) 

CONSUMER PRICE INDEX (CPI) 

Either of two measures of the price change of a fixed “market basket” of goods and services customarily purchased by urban consumers. CPI-U is based on a market basket 

determined by expenditure patterns of all urban households, while the market basket for 

CPI-W is determined by expenditure patterns of urban wage-earner and clerical-worker 

families. The level of the CPI shows the relative cost of purchasing the specified market 

basket compared to the cost in a designated base year, while the current rate of change in 

the CPI measures how fast prices are currently rising or falling. Current rates of change 

can be expressed as either monthly or annual rates. Although the consumer price index is 

often called the “cost-of-living index,” it measures only price changes, which is just one 

of the several important factors affecting living costs. Both CPI-U and CPI-W are 

published monthly by the Bureau of Labor Statistics. 

COST-BENEFIT ANALYSIS 

An analytical technique that compares the social costs and benefits of proposed programs 

or policy actions. All losses and gains experienced by society are included and measured in 

dollar terms. The net benefits created by an action are calculated by subtracting the losses 

incurred by some sectors of society from the gains that accrue to others. Alternative actions are compared to choose one or more that yield the greatest net benefits, or ratio of 

benefits to costs. 

The inclusion of all gains and losses @society in cost-benefit analysis distinguishes it from 

cost-effectiveness analysis, which is a more limited view of costs and benefits. (For 

distinction, see Cost-Effectiveness Analysis.) 

92 
Ecqnomic Terms 

rCOST-EFFECTIVENESS ANALYSIS 

An analytical technique used to choose the most efficient method for achieving a program 

or policy goal. The costs of alternatives are measured by their requisite estimated dollar 

expenditures. Effectiveness is defined by the degree of goal attainment, and may also (but 

not necessarily) be measured in dollars. Either the net effectiveness (effectiveness minus 

costs) or the cost-effectiveness ratios of alternatives are compared. The most cost-effective 

method chosen may involve one or more alternatives. 

The limited view of costs and effectiveness distinguishes this technique from cost-benefit 

analysis, which encompasses society-wide impacts of alternatives. (For distinction, see 

Cost-Benefit Analysis,) 

COUNTERCYCLICAL 

Actions aimed at smoothing out swings in economic activity. Countercyclical actions may 

take the form of monetary and fiscal policy (such as countercyclical revenue sharing or 

jobs programs). Automatic (built-in) stabilizers have a countercyclical effect without 

necessitating changes in governmental policy. (See also Automatic Stabilizer; Stabilization.) 

CROWDING OUT 

Most commonly refers to the displacement of private investment expenditures by increases in public expenditures financed by saies of Federal Government securities. The extent of the displacement depends on such factors as the responsiveness of private saving 

and investment to changes in interest rates and the degree to which the Federal Reserve 

monetizes the increase in public debt. 

CURRENT DOLLAR 

The dollar value of a good or service in terms of prices current at the time the good or service was sold. This is in contrast to the value of the good or service in constant dollars. 

(&W&O Constant Dollar.) 

93 
Economic Terms 

i 

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L -- 

DEFLATION 

A decrease in the general price level, usually accompanied by declining levels of output, 

increasing unemployment, and a contraction of the supply of money and credit. A price 

level decline during the contraction phase of the business cycle has not occurred in the 

United States since the end of World War II. Some attribute this to institutional barriers 

that prevent downward adjustments in wages and prices. Declines in output with increases 

in unemployment, however, are themselves sometimes referred to as deflationary 

changes. 

DEVALUATION 

The lowering of the value of a nation’s currency in relation to gold, or to the currency of 

other countries, when this value is set by government intervention in the exchange market. 

Devaluation normally refers to fixed exchange rates. In a system of flexible rates, if the 

value of the currency falls, it is referred to as depreciation; if the value of the currency 

rises, it is referred to as appreciation. 

DISCOUNT RATE 

The interest rate that a commercial bank pays when it borrows from a Federal Reserve 

Bank. The discount rate is one of the tools of monetary policy used by the Federal Reserve 

System. The Federal Reserve customarily raises or lowers the discount rate to signal a shift 

toward restraining or easing its money and credit policy. (See also Monetary Policy.) 

DISPOSABLE PERSONAL INCOME 

Personal income less personal taxes and nontax payments to the Federal Government. It is 

the income available to persons for consumption or saving. 

ECONOMIC GROWTH 

An increase in a nation’s productive capacity leading to an increase in the production of 

goods and services. Economic growth usually is measured by the annual rate of increase in 

real (constant dollars) gross national product. 

94 
Economic Terms 

ECONOMIC INDICATORS 

A set of statistical series that have had a systematic relationship to the business cycle. Each 

indicator is classified as leading, coincident, or lagging, depending on whether the indicator generally changes direction in advance of, coincident with, or subsequent to 

changes in the overall economy. Although no one indicator or set of indicators is a wholly 

satisfactory predictor of the business cycle, taken as a whole they are valuable tools fo! 

identifying and analyzing changes in business cycles. 

EMPLOYMENT 

In economic statistics, employment refers to ail persons who, during the week when the 

employment survey was taken, did any work for pay or profit, or who worked for I5 

hours or more without pay on a farm or in a business operated by a member of the 

person’s family. Also included as employed are those who did not work or look for work, 

but had a job or business from which they were temporarily absent during the week. (See 

also Full Employment Budget defined in the Budget Terms section of this glossary.) 

GNP GAP 

The difference between the economy’s output of goods and services and its potential out- 

.put at full employment-that is, the difference between actual GNP (gross national product) and potential GNP. 

GROSS NATIONAL PRODUCT (GNP) 

The market value of all final goods and services produced by labor and property supplied 

by residents of the United States in a given period of time. Depreciation charges and other 

allowances for business and institutional consumption of fixed capital goods are subtracted from GNP to derive net national product. GNP comprises the purchases of final 

goods and services by persons and governments, gross private domestic investment (including the change in business inventories), and net exports (exports less imports). The 

GNP can be expressed in current or constant dollars. (See also Net National Product; 

Potential Gross National Product.) 

95 
Economic Terms 

r 

IMPLICIT PRICE DEFLATOR (GNP DEFLATOR) 

A price index for all final goods and services produced in the economy, derived by 

calculating the ratio of the gross national product in current prices to the gross national 

product in constant prices. It is a weighted average of the price indexes used to deflate the 

components of current-dollar GNP, the implicit weights being expenditures in the current 

period. 

INFLATION 

A persistent rise in the general price level that results in a decline in the purchasing power 

of money. 

LABOR FORCE 

Those persons who are employed plus those who are seeking work but are unemployed. 

The total labor force consists of civilians and members of the U.S. armed forces stationed 

either in the United States or abroad. (See also Full Employment Budget defined in the 

Budget Terms section of this glossary.) 

MACROECONOMICS 

The branch of economics concerned with aggregate economic analysis in contrast to 

microeconomics, which is the analysis of individual economic units, markets, or industries. For example, macroeconomics includes the study of the general price level, national output or income, and tom1 employment, rather than the prices of individual commodities or particular incomes and the employment of individual firms. (See also 

Microeconomics.) 

MICROECONOMICS 

The branch of economics concerned with analysis of individual economic units, markets, 

or industries as opposed to aggregates. For example, microeconomics deals with the division of total output among industries, products, and firms: with the allocation of 

resources among competing uses; and with the determination of relative prices of particular goods. (See also Macroeconomics.) 

96 
Economic Terms 

MONETARY POLICY 

Policies, which affect the money supply, interest rates, and credit availability, that are intended to promote national macroeconomic goals-particularly with respect to employment, gross national product, price level stability, and equilibrium in balance of payments. Monetary policy is directed primarily by the Board of Governors of the Federal 

Reserve System and the Federal Open Market Committee. Monetary policy works by influencing the cost and availability of bank reserves. This is accomplished through openmarket operations (the purchase and sale of securities, primarily Government securities), 

changes in the ratio of reserves to deposits that commercial banks are required to maintain, and changes in the discount rate. (See also Discount Rate; Fiscal Policy defined in 

the Budget Terms section of this glossary.) 

MONEY SUPPLY 

The amount of money in the economy variously defined. 

Ml-A consists of currency (coin and paper notes) plus demand deposits at commercial 

banks, exclusive of demand deposits held by other domestic banks, foreign banks, and official institutions, and the U.S. Government. Ml-B consists of Ml-A plus other checkable 

deposits, including negotiable orders of withdrawal and automatic transfers from savings 

accounts at commercial banks and thrift institutions, credit unions’ share draft accounts, 

and demand deposits at mutual savings banks. 

M-2 consists of MI-B plus savings and small denomination time deposits at all depository 

institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than Caribbean branches of member banks, and 

money market mutual fund shares. 

M-3 consists of M-2 plus large denomination time deposits at all depository institutions 

and term repurchase agreements at commercial banks and savings and loan associations. 

NATIONAL INCOME ACCOUNTS 

r- 

. 

Accounts prepared and published quarterly and annually by the Department of Comi merce, providing a detailed statistical description of aggregate economic activity within 

f 

the U.S. economy. These accounts depict in dollar terms the composition and use of the 

nation’s output and the distribution of national income to different recipients. The acL. ~_._ 97 
Economic Terms 

counts make it possible to trace trends and fluctuations in economic activity. The data 

that measure the nation’s total output are estimated in two principal ways: 

-The value of the goods and services produced by the economy-referred to as the product side of the account. This is divided into the major uses for the output of the 

economy: consumer purchases, business investment, exports, and government purchases. 

-The costs incurred and types of income earned in producing those goods and servicesreferred to as the income side. This presents wages and salaries, profits, and other 

forms of income, indirect taxes, and capita1 consumption allowances generated in the 

production process. 

Because the national income accounts offer a consistent picture of the economy, they are 

basic analytical tools used in quantifying past and current performance of the economy 

and also in forecasting future economic developments. Furthermore, this quantitative 

framework makes these accounts of great importance in the formulation of national 

economic policies. (See also Personal Income; Transfer Payments.) 

NET NATIONAL PRODUCT (NNP) 

The net market value of final goods and services produced by labor and property supplied 

by the residents of the United States. Net national product equals gross national product 

less capital consumption allowances, which are estimates of the value of the capital goods 

“used up” in producing the gross national product. (See also Gross National Product; 

Potential Gross National Product.) 

OPEN-MARKET OPERATIONS 

The purchase and sale of various securities, chiefly marketable Federal Government 

securities, by the Federal Reserve System in the open market for the purpose of implementing Federal Reserve monetary policy. Open-market operations, one of the most flexible instruments of monetary policy, affects the reserves of member banks, and thus the 

supply of money and the availability and cost of credit. (See also Reserve Requirements.) 
Economic Terms 

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i --- 

PERSONAL INCOME 

In the national income accounts, personal income is the income received by persons (i.e., 

individuals, nonprofit institutions, private noninsured welfare funds, and private trust 

funds) from all sources. These sources consist of participation in production transfer 

payments from government and business and government interest, which is treated like a 

transfer payment. Personal income is the sum of wage and salary disbursements, other 

labor income, proprietors’ income, rental income of persons, dividends, personal interest 

income, and transfer payments, less personal contributions for social insurance. (See also 

National Income Accounts.) 

POTENTIAL GROSS NATIONAL PRODUCT 

An estimate of how much the economy could produce with full utilization of its productive resources and existing technology. Full utilization has conventionally been defined in 

terms of a benchmark unemployment rate. In 1979, the benchmark was an unemployment 

rate of 5.1 percent. (See also Gross National Product; Net National Product.) 

PRIME RATE 

The rate of interest charged by commercial banks for short-term loans to their most 

creditworthy customers. 

PRODUCER PRICE INDEXES 

(FORMERLY WHOLESALE PRICE INDEX) 

A set of measures of average changes in prices received in all stages of processing by producers of commodities in the manufacturing, agriculture, forestry, fishing, mining, gas 

and electricity, and public utilities sectors. These indexes can be organized either by commodity or by stage-of-processing. Stage-of-processing indexes-finished goods, intermediate materials, and crude materials-are more useful for analyzing general price 

trends. These indexes are published monthly by the Bureau of Labor Statistics. Changes 

in these indexes from one month to another are usually expressed as percent changes 

representing either monthly or annualized rates of change. 

99 
Economic Terms 

r 

RECESSION 

A decline in overall business activity that is pervasive, substantial, and of at least several 

months duration. Historically, recessions have been identified by a decline in real gross 

national product for at least two consecutive quarters. 

RESERVE REQUIREMENTS 

The percentage of deposit liabilities that U.S. commercial banks are required to hold as a 

reserve at their Federal Reserve bank, as cash in their vaults, or as directed by State banking authorities. The reserve requirement is one of the tools of monetary policy. Federal 

Reserve authorities can control the lending capacity of the banks (thus influencing the 

money supply) by varying the ratio of reserves to deposits that commercial banks are required to maintain. (See also Open-Market Operations.) 

STABILIZATION 

The maintenance of high-level economic activity with an absence of severe cyclical fluctuations. Stability is usually measured by an absence of fluctuations in production, employment, and prices, three aspects of economic activity that tend to fluctuate in a cyclical 

fashion. (See also Countercyclical.) 

STAGFLATION 

The simultaneous existence of high unemployment and high inflation. 

TRANSFER PAYMENTS 

In the national income accounts, payments made by the Federal Government or business 

firms to individuals or organizations for which no current or future goods or services are 

required to be provided in return. Government transfer payments include social security 

benefits, unemployment insurance benefits, Government retirement and veterans 

benefits, and welfare payments. Transfer payments by business firms consist mainly of 

gifts to nonprofit institutions. It is also common to include as business transfer payments 

the debts of their customers that remain unpaid and are thus considered to be bad debts. 

100 
Economic Terms 

While these debts were clearly not intended to be transfer payments when they were incurred, once they are written off the books of the business firm, the original transaction 

meets the definition of a transfer payment. (See also National Income Accounts.) 

TREASURY BILLS 

The shortest term Federal security. Treasury bills have maturity dates normally varying 

from 3 to 12 months and are sold at a discount from face value rather than carrying an explicit rate of interest. 

UNEMPLOYMENT 

Persons who, during a specified week, had no employment but. were available for work 

and had sought employment within the past 4 weeks, were laid off from a job, or were 

waiting to report to a new job within 30 days. 

UNEMPLOYMENT RATE 

The number of unemployed persons expressed as a percentage of the civilian labor force. 

UNEMPLOYMENT RATE, INSURED 

The number of insured unemployed as a percentage of covered employment-that is, 

those persons who are eligible to receive unemployment compensation benefits. 

WAGES AND SALARIES 

Monetary remuneration of employees, including the compensation of corporate officers, 

commissions, tips, bonuses, and receipts in kind that represent income to the recipients. 

(See also Personal Services and Benefits defined in the Budget Terms section of this 

glossary.) 

101 
. 
Tax Terms and Definitions 

REFUNDABLE TAX CREDITS 

Certain tax credits are refundable to the taxpayer. The tax credit is first to be applied 

against tax liability. If the amount of the credit is greater than the tax liability, the excess 

is treated as an overpayment of taxes and is refunded to the taxpayer. An example is the 

Earned Income Tax Credit payment in excess of tax liability. (See also Refunds defined in 

the Budget Terms section of this glossary; Tax Credits.) 

TAX CREDITS 

Tax credits include any special provision of law that results in a dollar-for-dollar reduction in tax liabilities that would otherwise be due. In some cases, tax credits may be carried 

forward or backward from one tax year to another, while other tax credits lapse if not 

used in the year earned. Tax credits may result in a reduction of tax collections or an increase in the value of tax refunds. (See also Refundable Tax Credits; Refunds defined in 

the Budget Terms section of this glossary; Tax Expenditures.) 

TAX EXPENDITURES 

Revenue losses attributable to provisions of the Federal income tax laws that allow a 

special exclusion, or deduction from gross income, or that provide a special credit, 

preferential tax rate, or deferral of tax liability. 

Tax expenditures may be considered Federal Government subsidies provided through the 

tax system to encourage certain activities and to assist certain groups. For example, capital 

formation is encouraged by permitting businesses to claim some portion of the cost of an 

investment as a credit on their income taxes, and the unemployed are aided by excluding 

unemployment benefits from taxable income. Tax expenditures involve no transfer of 

funds from the Government to the private sector. Rather, the U.S. Treasury Department 

forgoes some of the receipts that it otherwise would have collected, and the beneficiary 

taxpayers pay lower taxes than they otherwise would have had to pay. (See also Subsidy 

defined in the Budget Terms section of this glossary; Tax Credits; Tax Expenditures 

Budget .) 

103 
Tax Terms 

TAX EXPENDITURES BUDGET 

A list of legally sanctioned tax expenditures for each fiscal year which the 1974 Congressional Budget and Impoundment Control Act (P.L. 93-344, sec. 601(e)) requires be part 

of the President’s budget submission to Congress. (See also President’s Budget defined in 

the Budget Terms section of this glossary; Tax Expenditures.) 

TAXES 

Sums imposed by a government authority upon persons or property to pay for government services. 

The power to impose and collect Federal taxes is given to Congress in Article I, Section 8 

of the Constitution. As the collections arise from the sovereign and regulatory powers unique to the Federal Government, they are classified as governmental (budget) receipts, 

which are compared with budget outlays in calculating the budget surplus or deficit. Major tax legislation is contained in the United States Code, Title 26, Internal Revenue Code. 

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APPENDIXES 
r 
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Appendix A 

The Federal Budget Documents 

The official data and analyses relating to the Federal budget are published in four 

documents: 

The Budget of the United States Government 

The United States Budget in Brief 

The Budget of the United States Government, Appendb 

Special Analyses, Budget of the United States Government 

The Budget of the United States Government contains the President’s budget message and 

an overview of the President’s budget proposals. It explains spending programs in terms 

of national needs, agency missions, and basic programs, and it analyzes estimated receipts 

and discusses the President’s tax program. This document also describes the budget 

system and presents summary tables on the budget as a whole. 

.The United States Budget in Brief is designed for the general public. It provides a more 

concise, less technical overview of the budget than the full Budget. Summary and historical tables on the Federal budget and debt are provided, together with graphic displays. 

The Budget of the United States Government, Appendix contains information on the 

various appropriations and funds that compose the budget. For each agency the Appendix includes the proposed text of appropriation language, budget schedules for each account, new legislative proposals, explanations of the work to be performed and the funds 

needed, proposed general provisions applicable to the appropriations of entire agencies or 

groups of agencies, and schedules of permanent positions. Supplementals and rescission 

proposals for the current year are presented separately. Information is also provided on 

certain activities whose outlays are not part of the budget total. 

Special Analyses, Budget of the United States Government highlights specific program 

areas and other significant presentations of Federa budget data. It presents alternative 

views of the budget, that is, current services and national income accounts; economic and 

financial analyses of the budget covering Government finances and operations as a whole: 

107 
Federal Budget Documents 

and Government-wide program and financial information for Federal civil rights and 

research development programs. 

These documents are for sale in paper covers only, by the Superintendent of Documents, 

U.S. Government Printing Office, Washington, D.C. 20402. 

108 
Appendix B 

Budget Functional Classification 

The functional classification system is a way of grouping budgetary resources so that all 

budget authority and outlays of budget and off-budget Federal entities, loan guarantees, 

and tax expenditures can be presented according to the national needs being addressed. 

National needs are grouped in 17 broad areas to provide a coherent and comprehensive 

basis for analyzing and understanding the budget. Three additional categories--Interest, 

Allowances, and Undistributed Offsetting Receipts-do not address specific national 

needs but are included to cover the entire budget. 

To the extent feasible, functional classifications are made without regard to agency or 

organizational distinctions. Each Federal activity is placed in a functional classification 

that best defines the activity’s most important purpose, even though many activities serve 

more than one purpose. This is necessary so that the sum of the functional categories 

equals the budget totals. The functional classifications are also the categories that Congress uses in the concurrent resolutions on the budget, pursuant to the Congressional 

Budget and Impoundment Control Act of 1974 (P.L. 93-344, 31 U.S.C. 1322). 

A function may be divided into two or more subfunctions, depending upon the complexity 

of the national need addressed by that function. A three-digit code represents each functional/subfunctional category. The functional codes also make up the last three digits of 

the Account Identification Code. (See Appendix C in this Glossary.) 

The following outline of the functional classification structure is taken from the Budget of 

the United States Government, Fiscal Year 1981, adjusted for changes in the 1982 Budget. 

(See Summary of Changes at the end of this appendix.) The definitions for the subfunctional structure are from the Office of Management and Budget technical staff paper: The 

Functional Classificcrtion in the Budget (1979 Revision), Executive Office of the President, OMB February 22, 1979, Technical Paper Series BRD/FAB 79-l. 

i --- 

i. ..- 109 
Functional Classifications 

ri 

Code 

No. Function Title & Subfunction 

050 NATIONAL DEFENSE 

Pertains to programs directly related to the common defense and security of the United 

States. It encompasses the: 

-raising, equipping, and maintaining of armed forces (including civilian supporting 

activities), development and utilization of weapons systems (including nuclear 

weapons), and related programs; 

-direct compensation and benefits paid to active military and civilian personnel; contributions to their retirement, health, and life insurance funds; and cash benefits for 

military retirement pay; 

-the conduct of defense research, development, testing, and evaluation; and 

-procurement, construction, stockpiling, and other activities undertaken to directly 

foster national security. 

Excluded from national defense are 

-benefits or compensation to veterans and their dependents. (Veterans benefits are 

generally available to personnel who served the country in national emergencies; 

benefits for career military personnel are generally charged as a cost to the national 

defense function); 

-the peaceful conduct of foreign relations; 

-foreign military, economic, and humanitarian assistance; 

-subsidies to business by civilian agencies (such as maritime subsidies) that may be 

partially justified as promoting national security; and 

-research and operations of agencies (such as space research) whose program missions 

are not directly designed to promote national defense but which could result in some 

significant benefits to our national security. 

c. - 

110 
Functional Classifications 

051 

053 

054 

Department of Defense-Military 

The entire agency is included in this subfunction. 

Atomic Energy Defense Activities 

Programs of the Department of Energy devoted to national defense, such as 

naval ship reactors and nuclear weapons. 

Defense-Related Activities 

Miscellaneous defense activities, such as the expenses connected with selective 

service and with defense stockpiles outside of the Departments of Defense and 

Energy. 

150 INTERNATIONAL AFFAIRS 

Concerned with maintaining peaceful relations, commerce, and travel between the 

United States and the rest of the world, and with promoting international security and 

economic development abroad. 

Excluded from international affairs are outlays from domestic programs that may 

tangentially affect foreign relations or the citizens of other nations. 

i-- 

151 

152 

Foreign Economic and Financial Assistance 

Humanitarian assistance, development assistance, security supporting assistance, grants to and investments in international financial and development institutions, and the costs associated with concessionary agricultural exports. 

Military Assistance 

Involves the transfer of defense articles and services to foreign governments, including grants, credit sales, and training. Excluded is the military sales trust 

111 
- c- I 

Functional Classifications 

153 

154 

155 

fund, which is classified under subfunction 155 (international financial programs). 

Conduct of Foreign Affairs 

The diplomatic and consular operations of the Department of State, assessed 

contributions to international organizations, and closely related activities in 

other agencies (such as the Arms Control and Disarmament Agency). 

Foreign Information and Exchange Activities 

Student and cultural exchange programs and foreign library, radio, or other 

media information activities designed to promote mutual understanding between the people of the United States and other nations. 

International Financial Programs 

Export credit, the military sales trust fund, international commodity agreements, international monetary programs, and other programs designed to improve the functioning of the international financial system. 

250 GENERAL SCIENCE, SPACE, AND TECHNOLOGY 

Budget resources allocated to science and research activities of the Federal Government 

that are not an integral part of the programs conducted under any other function, including the research conducted by the National Science Foundation, all space programs 

conducted by the National Aeronautics and Space Administration (NASA), and general 

science research supported by the Department of Energy. Research and technology programs that have diverse goals and cannot readily be classified into one specific function 

are also placed here to avoid detailed splitting of accounts. 

251 General Science and Basic Research 

The expenses of conducting the National Science Foundation programs and the 

general science activities of the Department of Energy. 
Functional Classifications 

r 

253 Space Flight 

Devoted to the development and operation of space transportation systems. 

254 Space Science, Applications, and Technology 

Devoted to basic scientific research connected with outer space, research and 

demonstrations designed to promote terrestrial applications of technology 

developed through space research, and development of new space technologies 

for future flight missions. 

255 Supporting Space Activity 

The costs of tracking and data relay support for NASA space science and applications for flight missions. 

270 ENERGY 

Programs that promote an adequate supply and appropriate use of energy to serve the 

needs of the economy. Included are the energy programs of the Department of Energy 

and its predecessor agencies. Excluded are atomic energy defense activities and general 

science research not closely related to energy. 

271 Energy Supply 

Programs designed to increase the supply of energy through the development of 

domestic resources and systems capable of using them. Includes the costs of 

research and demonstration of supply systems. 

r -- 272 Energy Conservation 

Programs designed to encourage the prudent use of energy resources. 

113 
Functional Classifications . 

274 Emergency Energy Preparedness 

Programs associated with developing and maintaining a stockpile of energy 

resources (currently confined to petroleum) to meet emergency needs and associated contingency planning activities. 

276 Energy Information, Policy, and Regulation 

The unallocable overhead activities of the Department of Energy plus the costs 

of energy information and regulation activities. 

300 NATURAL RESOURCES AND ENVIRONMENT 

Programs whose primary purpose is to develop, manage, and maintain the nation’s 

natural resources and environment. Excluded are the outlays for community water supply programs, basic sewer systems, and waste treatment plants, which are part of a 

community or regional development (rather than an environmental enhancement) program or are part of the cost of operating a Federal facility (such as a military installation). 

301 

302 

303 

r 

- 

I 

L--.-- 

114 

Water Resources ’ 

Water protection, conservation, irrigation, and related activities, including the 

total costs of multi-purpose water projects where it is not feasible to separate 

out the transportation (navigation) or energy (power) segments of these projects. 

Conservation and Land Management 

The costs of maintaining the public domain and national forests, payments to 

encourage conservation of private land, and surface mining reclamation efforts. 

Recreational Resources 

The aequisition;~ improvement, and operation of recreational lands and 

facilities, including fish and wildlife and parks; also outlays for preserving 

historic areas. 
Functional Classifications 

304 Pollution Control and Abatement 

Outlays for controlling and reducing air, water, and land pollution, or programs that are specifically funded to enhance the environment. Excluded are 

water resources programs, water treatment plants, and similar programs that 

are not funded as part of an environmental enhancement activity. 

306 Other Natural Resources 

Miscellaneous natural resources programs not classified in other subfunctions, 

such as marine, earth, and atmosphere-related research, and the cost of geological surveys and mapping. 

r .-- 

i 

350 AGRICULTURE 

Programs that promote the economic stability of agriculture and the nation’s capability 

to maintain and increase agricultural production. 

Excluded are programs which, though related to rural development, are not directly 

related to agriculture, such as rural environmental and conservation programs classified 

in the natural resources function. Also excluded are the costs connected with concessionary food export sales or food donations, whether overseas or for domestic income 

support purposes, 

351 Farm Income Stabilization 

Loans, subsidies, and other payments for purposes of stabilizing agricultural 

prices at an equitable level. This subfunction includes the cost of acquiring and 

storing agricultural commodity stockpiles, but does not include the cost of 

foreign agricultural export losses (classified in the international affairs function) or domestic donations of food (part of an income support, rather than a 

farm price support, program). 

352 Agricultural Research and Services 

All other costs of agricultural programs, including expenses for programs such 

as agricultural research and extension services. 

115 
Functional Classifications . 

i 

370 COMMERCE AND HOUSING CREDIT 

The promotion and regulation of commerce and the housing credit and thrift insurance 

industries, which pertain to the: 

-collection and dissemination of social and economic data (unless they are an integral 

part of another function, such as health); 

-general purpose loans and subsidies to business and direct loans and other credit incentives to the housing industry; and 

-subsidy to the Postal Service and any budgetary expenses of the Federal Financing 

Bank (including the off-budget activities of these entities). 

In general, credit and insurance programs are included in this function; however, if 

such programs are a means of achieving the basic objectives of another function and are 

an integral part of the programs of that function, they are classified in the other function. 

Excluded are regional economic development programs, even if they use credit or insurance to achieve a community development objective. Also excluded are other insurance or loan programs (such as railroad loans) that are an integral part of other 

functions. 

371 Mortgage Credit and Thrift Insurance 

Homeownership and related loan and insurance programs; insurance programs 

protecting depository thrift institutions. 

372 Postal Service 

Any net outlays of the Postal Service included in the budget (or off-budget). 

i-- 

376 Other Advancement and Regulation of Commerce 

Loan programs to aid specialized forms of business (such as small business) that 

are not included elsewhere in the functional structure. 

L. _- 116 
rFunctional Classifications 

Also included are the costs of collecting and disseminating economic and demographic statistics (such as census data) and regulating business. 

400 TRANSPORTATION 

All programs with the primary aim of providing for the transportation of the general 

public and/or their property, regardless of whether local or national and regardless of 

the particular mode of transportation. This classification includes: 

-construction of facilities; 

-purchase of equipment; 

-research, testing, and evaluation; 

-provision of communications directly related to transportation (e.g., air traffic control by the Federal Aviation Administration; 

-operating subsidies for transportation facilities (such as airports) and industries (such 

as railroads); and 

-regulatory activities directed specifically toward the transportation industry rather 

than toward commerce (business). 

Excluded are the: 

.-costs of moving personnel or equipment as part of the operation of other government 

services; 

-provision of foreign economic assistance that may involve assisting transportation 

facilities or programs abroad; 

-construction of roads, trails, etc. as an integral part of the operation of public lands, 

parks, forests, or military reservations, unless they are specifically funded as a part of 

a broader transportation program; 

-construction of roads or other transportation facilities as an integral part of a broad 

community facility or regional development program where the clear intent of the 

program is regional development and the provision of transportation facilities is only 

an incidental by-product or means to attain the objective of regional development; 

i. -- 

117 
Functional Classifications 

i .- 

-research and technology activities devoted to space research (except for aeronautical 

technology), even though this research may eventually rebound to the advantage of 

general transportation. 

401 Ground Transportation 

Outlays to aid and/or regulate the various modes of ground transportation, 

such as roads and highways, railroads, and urban mass transit. 

402 Air Transportation 

Outlays to aid and/or regulate air transportation, including aeronautical 

research conducted by NASA. 

403 

407 

Water Transportation 

Outlays to aid and/or regulate maritime commerce. 

Other Transportation 

Outlays for general transportation programs and overhead not readily allocable 

into any of the preceding subfunctions. 

450 COMMUNITY AND REGIONAL DEVELOPMENT 

Generally confined to the development of physical facilities or financial infrastructures 

designed to promote viable community economies. Transportation facilities developed 

as an integral part of a community development (rather than transportation) program 

are also included. Aids to businesses are not usually included in this function unless 

such aids (e.g., the National Development Bank proposed in the 1980 budget) promote 

the economic development of depressed areas and are not designed to promote particular lines of business for their ownsake. 

Human development and services programs are usually excluded from this function. 

,L.- .- 118 
Functional Classifications 

451 

452 

453 

Community Development 

Grants and related programs designed to aid largely urban community development. Included are community development block grants, urban development 

action grants, and predecessor activities such as the urban renewal and model 

cities programs. These programs are generally carried out by the Department of 

Housing and Urban Development. 

Area and Regional Development 

Grants, loans, subsidies, and related aids for the economic development of depressed areas that are generally either rural or are more regional than the community development programs. Area and regional development programs are 

generally carried out by agencies other than the Department of Housing and 

Urban Development, such as the Farmers Home Administration, Economic 

Development Administration, and Bureau of Indian Affairs. 

Disaster Relief and Insurance 

Those Federal programs uniquely devoted to helping communities and families 

recover from natural disasters. 

500 EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 

Outlays to promote the extension of knowledge and skills, to enhance employment and 

employment opportunities, to protect workplace standards, and to provide public services to the needy. 

This function excludes education or training undertaken as an integral part of the 

achievement of other functions (such as training military personnel; veterans education, 

training, and rehabilitation; or training of health workers in a health program). Nutrition or food service programs funded separately from social services or education are 

not part of this function; they are classified as income security. 

501 Elementary, Secondary, and Vocational Education 

Pre-school, elementary, secondary, and vocational education programs. 

119 
Functional Classifications 

502 

503 

504 

505 

506 

Higher Education 

College-level and graduate school education programs. 

Research and General Education Aids 

Education research and assistance for the arts, the humanities, educational 

radio and television, public libraries, and museums. 

Training and Employment 

Programs of job or skill training, employment services and placement, and 

payments to employers to subsidize employment. 

Other Labor Services 

Aids to or regulation of the labor market (including gathering labor statistics 

and mediation and conciliation services) other than employment and training 

programs, and other than occupational safety and health programs. 

Social Services 

Composed of two forms of activities: (a) programs that provide a broad range 

of services to individuals to help them improve their vocational capabilities 

(vocational rehabilitation) or family status, and (b) services to the poor and 

elderly that are not primarily for income support and that are not an integral 

part of some other function (e.g., community action programs). 

550 HEALTH 

Programs whose basic purpose is to promote physical and mental health, including the 

prevention of illness and accidents. 

Excluded from the health function are Federal health care costs that are for military 

personnel and for veterans. General scientific research that has medical applications 

c ._- 120 
Functional Classifications 

(such as that conducted by the National Science Foundation) and health programs 

financed through foreign assistance programs are also excluded. 

551 Health Care Services 

The costs of financing the provision of medical services to individuals and 

families, whether such services are provided directly by the Federal Government 

or financed through grants, contracts, insurance, or reimbursements. 

552 Health Research 

Includes the costs of all research programs- whether basic or applied-that are 

financed specifically as health or medical research. It. excludes research that is 

an integral part of other functions (such as biomedical research in the space 

program). 

553 

554 

Education and Training of the Health Care Workforce 

Any education or training program specifically funded as a health program and 

restricted to training individuals who work, or expect to work, in health or 

health-related fields. 

Consumer and Occupational Health and Safety 

Programs such as meat and poultry inspection, food and drug inspection, consumer product safety, and occupational safety and health. 

600 INCOME SECURITY 

r - 

, 

I 

Payments for or to persons for which no current service is rendered, including retiremerit-(excluding military retired p&y), disabiIity, unemployment, and welfare payments 

and associated administrative costs. Also included in this function are the food stamp, 

special milk, and child nutrition programs (whether the benefits are in cash or kind); 

121 
Functional Classifications 

r 

both Federal and trust fund unemployment compensation and workers compensation; 

public assistance cash payments; benefits to the elderly and to coal miners; and lowand moderate-income housing benefits. 

Excluded are financial assistance for education, provision or reimbursement for child 

care services and stipends, medical care (whether in cash or kind), and subsidies to 

businesses (such as farm price supports), even though they may end up as income to 

persons. Also excluded are income security programs restricted to veterans and their 

dependents. 

601 General Retirement and Disability Insurance 

Non-needs-tested retirement and disability programs, except those specifically 

restricted to Federal employees. This subfunction is normally subdivided into 

two major components for purposes of budget presentation: (a) social security, 

which is composed of the old age, survivors, and disability insurance trust 

funds except for payments made to the railroad retirement fund and (b) other, 

which is composed mainly of the railroad retirement fund and special benefits 

for coal miners. 

602 Federal Employee Retirement and Disability 

All funded retirement and disability programs restricted to Federal employees. 

In those cases where there are no retirement funds (such as in the cases of 

military and Coast Guard retired pay), the cash benefits are included in the 

function where the employees were employed (in these cases national defense 

and transportation), because otherwise those functions would never be charged 

for the retirement costs of their employees. 

i603 Unemployment Compensation 

Benefits for unemployed workers that are not conditioned by needs tests. Excluded are other benefits (such as food stamps) that an unemployed person 

might be eligible for under any other program. 
Fpxtianal Classifications 

I- 

,c .- 

604 

605 

609 

Housing Assistance 

Federal income support and related expenses (but not loans, loan guarantees, or 

insurance) that are specifically for financing or providing housing for individuals and families. 

Food and Nutrition Assistance 

Federal income support and related expenses that are specifically for and 

limited to financing or providing food or nutritional assistance to individuals 

and families. 

Other Income Security 

Income security programs not included in any other subfunction. Composed 

primarily of either direct payments or grants-in-aid to finance direct payments 

that constitute cash income to low-income individuals and families. Also includes refugee assistance and both administrative expenses and offsetting collections in the income security function that are not part of any other subfunction. 

700 VETERANS BENEFITS AND SERVICES 

I 

Consists of programs providing benefits and services, the eligibility for which is related 

to prior military service but the financing of which is not an integral part of the costs of 

national defense. 

As a normal rule, the outlays in this function are similar to those in the broader general 

purpose functions (such as income security or health), but are restricted to veterans, 

their dependents, and their survivors. Earned rights of career military personnel that 

are a cost of the defense budget (such as military retired pay or medical care) are excluded. 

701 Income Security for Veterans 

Veterans compensation, pensions, burial benefits, and life insurance. 

123 
Functional Classifications 

r 

702 

703 

704 

705 

Veterans Education, Training, and Rehabilitation 

Composed primarily of the “GI bill” readjustment and vocational rehabilitation benefits. 

Hospital and Medical Care for Veterans 

Medical care and research financed by the Veterans Administration. 

Veterans Housing 

Housing loan and guarantee programs for veterans and dependents. 

Other Veterans Benefits and Services 

Mainly the administrative expenses of the Veterans Administration. 

i- -- 

750 ADMINISTRATION OF JUSTICE 

Programs to provide judicial services, police protection, law enforcement (including 

civil rights), rehabilitation and incarceration of criminals, and the genera1 maintenance 

of domestic order. It includes the provision of court appointed counsel or other legal 

services to individuals. 

Excludes the costs of the legislative branch, the narrow-purpose police or guard activities to protect Federal property, or activities that are an integral part of a broader function (such as postal inspectors, tax collection agents, and Park Service Rangers). The 

costs of National Guard personnel and military personnel who are called upon occasionally to maintain public safety and the costs of military police are included under the 

national defense function rather than this function. 

75 1 Federal Law Enforcement Activities 

The costs of operating the FBI, the Bureau of Customs, the Immigration and 

Naturalization Service, the Drug Enforcement Administration, and police and 
Functional Classifications 

r I 

752 

753 

754 

crime prevention activities in other programs. Also includes the readily identifiable enforcement costs of civil rights activities. 

Federal Litigative and Judicial Activities 

The cost of the judiciary, the cost of prosecution, and Federal expenses connected with financing legal defense activities. 

Federal Correctional Activities 

Covers the costs of incarceration, supervision, parole, and rehabilitation of 

Federal prisoners. 

Criminal Justice Assistance 

Grants to State and local governments to assist them in operating and improving their law enforcement and justice systems. 

800 GENERAL GOVERNMENT 

The general overhead costs of the Federal Government, including legislative and executive activities; provision of central fiscal, personnel, and property activities; and the 

provision of services that cannot reasonably be classified in any other major function. 

As a normal rule, all activities reasonably or closely associated with other functions are 

included in those functions rather than listed as a part of general government. 

801 Legislative Functions 

The costs of the legislative branch except for the Tax Court, the Library of 

Congress, and the Government Printing Office revolving fund. 

802 Executive Direction and Management 

The Executive Office of the President (unless some major grants or operating 

programs should be included in the EOP); occasionally some closely related 

spending outside the EOP is also included in this subfunction. 

125 
Functional Classifications - 

803 

804 

805 

806 

Central Fiscal Operations 

Covers the general tax collection and fiscal operations of the Treasury Department. Includes any residual Federal Financing Bank transactions (i.e., nonlending activities.) 

Central Property and Records Management 

Most of the operations of the General Services Administration (net of reimbursements from other agencies for services rendered). 

Central Personnel Management 

Most of the operating costs of the Office of Personnel Management (formerly 

the Civil Service Commission) and related agencies (net of reimbursements 

from other agencies for services rendered). 

Other General Government 

Miscellaneous other costs, such as Federal costs of territorial governments. For 

Indian tribal funds, see Summary of Changes at the end of this Appendix. 

r850 GENERAL PURPOSE FISCAL ASSISTANCE 

Federal aid to State, local, and territorial governments that is available for general 

fiscal support. Also included are grants for more restricted purposes when the 

stipulated purposes cross two or more major budgetary functions and the distribution 

among those functions is at the discretion of the recipient jurisdiction rather than the 

Federal Government. It includes payments in lieu of taxes, broad-purpose shared 

revenues, general revenue sharing, and the Federal payment to the District of Columbia. Payments specifically for community development or social services programs are 

not included in this function. 

851 Generat Revenue Sh;aring 

The general revenue sharing program. 

,L-- 126 
Fqwtional Classifications 

852 Other General Purpose Fiscal Assistance 

All other programs in this function, which are mainly shared revenues, countercyclical fiscal assistance whenever there is such a program, and the Federal payment to the District of Columbia. 

900 INTEREST 

Interest is the cost attached to borrowing or lending money. It is not an objective in and 

of itself, but rather a result of seeking to fulfill other objectives. The other objectives 

can normally be identified in two broad groupings: (a) those in which the transactions 

directly give rise to interest payments or income (lending) and (b) the general shortfall 

or excess of outgo over income arising out of fiscal, monetary, and other policy considerations and leading to the creation of interest-bearing debt instruments (normally 

the public debt). 

The interest function includes interest on the public debt, on uninvested funds, on tax 

refunds, and interest recorded in budgetary receipt (proprietary or intragovernmental) 

accounts (except for interfund interest received by trust funds). 

i 

- 

901 

902 

interest on the Public Debt 

Outlays for interest on the public debt. (Where this interest is paid to the public, 

it is on an accrual basis; all other interest outlays in the budget are on a cash 

basis.) 

Other Interest 

All other interest expenditures and offsetting receipts. The principal expenditure in this subfunction normally is interest on refunds of receipts. Since offsetting interest receipts are included in this subfunction, the subfunction totals 

are usually negative. 

c. - 127 
i 

_~- 

Functional Classifications 

920 ALLOWANCES 

The budget always includes estimates for allowances for future years. Since Congress 

never appropriates money for “allowances” but only for specific programs, there are 

never any budget authority or outlay totals for allowances in any past periods. However, this category is needed to permit the budget to reflect the total estimated budget 

authority and outlay requirements for future years. 

In addition to the budget authority and outlays in each of the functional classifications, 

the President’s budget normally includes some budget authority and outlays classified 

as allowances. The allowance categories in the budget are as follows: 

921 Civilian Agency Pay Raises 

The anticipated additional budget authority and outlays needed to finance pay 

raises for all agencies except the Department of Defense, Military. The Defense 

Department pay allowances are included in subfunction 05 1. 

922-926 Contingencies for Specifi’c Requirements 

927 

The specific line entries will vary from budget to budget, dependi,.- on what 

projections are required. Projections for the FY 1980 budget included an 

allowance for welfare reform (starting with FY 1981) and an allowance for 

nondefense purchase (price) inflation for each of the years beyond the budget 

year. 

Contingencies for Relatively Uncontrollable Programs 

Normally estimated at zero since the probability of the actual requirements being higher or lower than the budget estimates is normally assumed to be equal. 

928 Contingencies for Other Requirements 

The budget also includes the traditional contingency allowance to cover unanticipated requirements and future initiatives. 

128 
Functional Classifications 

950 UNDISTRIBUTED OFFSETTING RECEIPTS 

A large portion of the offsetting receipts is included as deductions at the subfunction 

level. However, every major function except two (general purpose fiscal assistance (850) 

and interest (900)) also has a separate entry for “deductions for offsetting receipts” 

that are offset against the major function but not at the subfunction level. In addition, 

three groups of offsetting receipts are classified as undistributed offsetting receipts 

rather than being included in any of the other functions. 

951 

952 

953 

Employer Share, Employee Retirement 

Interfund transactions and receipts from off-budget Federal entities. 

interest Received by Trust Funds 

Composed of trust interfund interest deposited in receipt accounts. It does not 

include interest received by trust revolving funds (e.g., the Federal Deposit Insurance Corporation). 

Rents and Royalties on the Outer Continental Shelf 

Those receipts derived from rents, royalties, and bonuses on Outer Continental 

Shelf land leases. 

i 

,L~ -- 

SUMMARY OF CHANGES FOR THE 1982 BUDGET 

(FUNCTIONAL CHANGES SINCE FY 1981) 

-That portion of receipt subaccount 8365.35 (Indian tribal funds) that derives from 

payments by the State of Alaska under terms of the Alaska Native Claims Settlement 

Act was shifted from subfunction 452 (area and regional development) to 806 (other 

general government). This matches the functional treatment of the outlays these collections finance. There will be no further collections beyond 1980 under this program. 

-The subfunctional “attribution” of the Federal Financing Bank has been incorporated 

as an official functional split of the FFB. Subfunction 374 (the Federal Financing Bank) 

129 
Functional Classifications 

was abolished; any residual FFB transactions (i.e., non-lending activities) were moved 

into subfunction 803 (other general government). 

-Subfunction 604 (public assistance and other income supplements) was split into three 

new subfunctions: 

l 604 Housing assistance 

l 605 Food and nutrition assistance 

l 609 Other income security 

Any offsetting collections previously offset at the major functional level are offset in 609 

unless they are collected by the Department of Housing and Urban Development (604) or 

Department of Agriculture (605). 
Appendix C 

Budget Account Identification Code 

Each account, or group of accounts, in the Federal budget is assigned an 1 l-digit identification code, as follows: 

xx-xxxx-x-x-xxx The first two digits designate the agency 

code assigned by the Department of the 

Treasury. 

xx-xxxx-x-x-xxx The third through sixth digits designate the 

appropriation or fund account symbol 

assigned by the Treasury Department. 

xx-xxxx-x-x-xxx The seventh digit identifies the timing of 

estimates: 

xx-xxxx-x-x-xxx The eighth digit identifies the type of fund: 

O-Regular budget schedule 

l-Supplemental under existing legislation 

2-Proposed for later transmittal under proposed legislation 

3-Proposed for later transmittal under existing legislation 

4-Supplemental or additional authorizing 

legislation required 

5Rescission proposal 

&Supplemental request pending 

1 -General 

2-Special 

3-Public enterprise 

4-Intragovernmental 

7-Trust (nonrevolving) 

g-Trust revolving 

131 
Budget Account Identification Code 

xx-xxxx-x-x-xxx The last three digits designate functional 

classification as used in the latest budget 

documents, unless noted otherwise by OMB. 

In cases where an account is split between 

two or more subfunctions: (a) if all subfunctions are in the same major function the 

digits indicate the major function or, (b) if 

two or more major functions are involved, 

“999” is used. 

The identification code appears at the head of the program and financing schedule in the 

Appendix to the Budget of the United States Government. (See also Appendix D, Program and Financing Schedule, in this Glossary.) 

132 
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Appendix D 

Program and Financing Schedule 

Most of the details of budget data are presented in the Program and Financing Schedule in 

the Appendix to the Budget of the United States Government. This schedule consists of 

program by activities, financing, and relation of obligations to outlays. 

In the program by activities section, costs, or obligations, are classified by purpose, program, type of activity, or project. This classification is developed for each appropriation 

or fund, and is not uniform on a Government-wide basis. Where it is of significance, 

capital investment is shown by activity. Otherwise, the total for each year is disclosed by 

footnote. 

The financing section shows the sources of funds, budget authority, and other means 01 

financing the activities covered by the account and the disposition of unobligated amounts 

not used during the year. 

The section on relation of obligations to outlays shows obligations net of offsetting collections, obligated balances at the start and end of the year, and other items that affect the 

relation of obligations to outlays. All program and financing schedules carry an 1 l-digit 

identification code, generally, placed at the head of the schedule. (See Appendix C, 

Budget Identification Code, in this glossary.) 

The Program and Financing Schedule is preceded by the appropriation language of the 

appropriation acts (FY 1981 in the sample shown below), and is printed following the account title, that is, salaries and expenses. The language of the previous year’s appropriation acts, printed in roman type, is used as a base. Brackets enclose material proposed for 

deletion; italic type indicates proposed new language. When an appropriation has not 

been enacted at the time the budget is submitted, the language relates only to the fiscal 

year in question and is italicized, with no brackets shown. In a few cases, the language 

from unenacted appropriation bills, printed in roman type, is used as a base. In such 

cases, the language is followed by an explanatory note. 

At the end of the final appropriation language paragraph, and printed in italics within 

parentheses, are citations to any relevant authorizing legislation and to the appropriation 

act from which the basic text of the language is taken. 

i.- 133 
Program & Financing Schedule 

Program & Financing Scheduie 

(Executive Budget) 

I -- I 

THE WHITE HOUSE OFFICE 

Ccncmlandrpecialfundr: 

%LAIUXS AND hF'XNSX8 

For expenaea nw for the White Houee Of’fice au authorized by 

law, including not to exceed $3,850,000 for aervicm M authorized by 5 

U.S.C. 3109 and 3 U.S.C. 105, and other personal servicee aa authorized by 3 U.S.C. 105; including eubnietence expenoea aa authorized by 

3 U.S.C. 105, which shall be expended and accounted for as provided 

in that section; hire of paaeenger motor vehiclea, newspapers, periodicab, teletype news service, and travel (not to exceed $100,000 to be 

expended and accounted for aa provided by 3 U.S.C. 103); and not ta 

exceed [$15,000) $17,ooO for official entertainment expenaeo, to be 

available for allocation within the Executive Ofke of the Freaident; 

[$18,210,000) $0,6~7,W. CE.zecutiw wi Appropriations Act, 1980.) 

Pmgnm 8d Financing (in thousands of dollars) 

wmmatimcpdc 11-0110-0-1-802 1979 stud 198aat 19.91 St. 

PGgnmbyactMtk 

10.00 Administration (casts-oMgatiis) . . . . . . . . 17,129 18,973 20,627 

flMlKhg: 

25.00 Unchligated balance lapsing . . . . . . . . . . . . . . . . . . . . . . . . 34 . . . . . . . . . . . ~.................. 

- - .- 

oudgrt ulthody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,163 19,973 20,627 

Budget authority: 

40.00 Appmphtilul .._._. .,,_,.........._.................. 17,163 1ar10 20,627 

44.20 Suppkmrntrl for civitian pay raises . . . . . . . . . . 763 . . . . . . . . . . . . . . . . . 

-- 

Relatii of otdigatiis to outlays: 

71.00 OMgatis incurred, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,129 18,973 20,627 

72.40 Obligated balance, start of year . . . . . . . . 86 1,771 1,889 

74.40 Obligated balance, end of year . . . . . . . . . . . . - 1,771 - 1,889 - 1,990 

77.00 Adjustments in expired aozuunts -........... 465 . . . . . . . . . . 

90.00 Outlays, excluding pay raw su* 

mental . . . . . . .._.................................. 15,909 18,136 20,482 

91.20 outlays fwn cMaIl gay raise sup 

pfefwtal ..,.,_..........-................... 719 44 

-. 

Source: The Budget of the United States Governmenf. Appendix, Fiscal Year, 1981. 

134 
BIBLIOGRAPHY 

Congressional Budget and Impoundment Control Act of 1974. Statutes at Large 88, sec. 

297 (19741, U.S. Code, vol. 31, sec. 1301 (1976). 

Mikesell, R.M., and Hay, Leon E. Governmental Accounting. 4th ed. Homewood, 

Illinois: Richard D. Irwin, Inc., 1969. 

Ott, David J., and Ott, Attiat F. Federal Budget Policy. 3rd ed. Washington, D.C.: The 

Brookings Institution, 1977. 

Tax Foundation, Inc. Facts and Figures on Government Finance. 20th biennial ed. 

Washington, DC.: Tax Foundation Inc., 1979. 

United States Code Annotated. Title 31. Money and Finance. 2 vols. St. Paul, Minn.: 

West Publishing Co., 1976. 

U.S. General Accounting Office. The Congressional Budget and Impoundment Control 

Act of 1974: Its Impact on the Authorizing Committees and GAO. OPA-76-29. 

(April 21, 1976). 

. Terms Used in the Budgetary Process. PAD-77-9. (July 1977). 

U.S. Library of Congress. Congressional Research Service. Budget Concepts and Terminology: The Appropriations Phase, by Louis Fisher. (November 21, 1974). 

U.S. Office of Management and Budget. The Budget of the United States Government 

[for] Fiscal Year 1981. Part 7. The Budget System and Concepts. 

. The Budget of the United States Government [for] Fiscal Year 1981: 

Appendix. 

. Budget of the United States Government [for] Fiscal Year 1981: Special 

Analyses. 

. A Guide to Budget Terms and Concepts. February 1975. 

. Instructions on Budget Execution. Circular No. A-34, rev. (July 15, 1976). 

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bibliography 

. Preparation and Submission of Budget Estimates. Circular No. A-11, rev. 

(June 3, 1980). 

U.S. President’s Commission on Budget Concepts. Report of the President’s Commission 

on Budget Concepts. (October, 1967). 

Wildavsky, Aaron. The Politics of the Budgetary Process. 2nd ed. Boston: Little, Brown 

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*U.S. GOVERNNMT PRINTINO OF?ICE: 1901~0-72s023/4041 

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