Budget Account Structure: A Descriptive Overview
Released: 1995-09-18T00:00:00

Letter

Overview of Observations

Federal budget accounts are a product of the needs and goals of many users and reflect the many roles which they have been asked to address. The present budget account “structure” was not created as a single integrated framework but rather developed, for the most part, as separate budget accounts over time to respond to specific needs. Viewing these individually developed accounts collectively discloses not only the variety within the current structure but also its complexity.

Our review of fiscal year 1995 budget accounts revealed a structure characterized by a concentration of budgetary resources in a few large accounts and a scattering of remaining resources among hundreds of other accounts; a mix of account orientations with an emphasis on programs and processes, rather than objects of expense or organizations; over 70 percent of total budgetary resources available in fiscal year 1995 from sources which did not require congressional approval in the current year; and extensive use of general funds to provide most budgetary resources to most accounts, but with special and trust funds supporting about 30 percent of total resources and 20 percent of all accounts.

These observations vary significantly among federal missions, federal organizations, and appropriations subcommittees and help to illustrate the intricate network of relationships within the budget account structure. As a result, cross-cutting initiatives that affect budget accounts will encounter in hundreds of accounts a fundamentally heterogeneous structure that serves many different needs and objectives.

Background and Scope

Nearly 50 years ago, the Hoover Commission examined the federal budget account structure and concluded, “The present appropriation structure underlying the budget is a patchwork affair evolved over a great many years and following no rational pattern.” “an item for which appropriations are made in any appropriation Act and, for items not provided for in appropriation Acts, ...means an item for which there is a designated budget account identification code number in the President’s budget.”

We began our analysis from this definition of an account. However, within federal budgeting and financial management, operational definitions for the term “account” vary depending on the user and the purpose to be served. For example, congressional appropriators establish budget accounts to facilitate congressional allocation and oversight responsibilities. The President’s budget presentation generally reflects this structure but may consolidate separate items into a single account.Agency officials use these budget account structures to report to the Congress and the Office of Management and Budget (OMB), but they often rely on more detailed account structures—such as standard general ledger accounts which integrate proprietary and budgetary accounting, internal budgetary allotment schedules, or project and activity plans maintained by program managers—to monitor expenditures and performance and for other management needs.

Once defined, accounts may be quantified in various ways depending on the user and the purpose to be served. A wide variety of budgetary information and subsidiary classifications are available to meet the many needs of different users. For example, users interested in relative priorities within the annual budget process might concentrate on budget authority; those interested in the approaches used by government to address its needs might look to obligations; and those interested in deficits and how much the government ultimately spends might emphasize outlays. Each perspective would produce a different, but equally valid, universe of budget accounts.

For this report, we have used budgetary resources as reported in the President’s budget presentation to define and measure the universe of accounts. Budgetary resources are equivalent to all available budget authority—appropriations, borrowing and contract authority, reappropriations, and offsetting collections from the public and other federal organizations, net of transferred authority and statutory limitations. This approach captures a very large universe by including all accounts with budgetary resources available for obligation, but it can be confusing when compared to the outlays occurring in a given fiscal year. Because budgetary resources include current and permanent authority as well as resources available from offsetting collections and from prior years, they may vary significantly from outlays. This was the case for the fiscal year 1995 estimate, as reported in the President’s fiscal year 1996 budget, which projected budgetary resources of $2.5 trillion and net outlays of $1.5 trillion.

Lastly, it might be inferred that discussing budget accounts as a structure, rather than as separate and independent decisions as indicated by the 1985 act quoted above, suggests that there is or should be a set of coherent rules and criteria. This is not our intention. In this report, we examine budget accounts collectively for two reasons. First, the concept of a budget account structure is accepted among budget practitioners and academics and allows for succinct references to an ever-changing and complex environment. Second, analyses which describe the budget account structure in terms of the characteristics and patterns of its constituent parts—the separate accounts—can provide rich insights into the federal budget process and are necessary to the consideration of cross-cutting proposals.

For example, the following recent congressional actions and administration initiatives call for or suggest certain cross-cutting changes to budget accounts.

The Government Performance and Results Act (GPRA) of 1993 was enacted to enhance program management, public accountability, and congressional decision-making by establishing a process to set strategic and annual program goals and to measure accomplishments. By the fall of 1997, executive organizations are required to submit to OMB an annual performance plan which establishes a target level of performance for each project or activity listed in the “program by activities” section of each budget account presentation. Beginning with the February 1998 submission of the fiscal year 1999 budget, the President is required to transmit to the Congress a “Federal Government performance plan for the overall budget.”

The National Performance Review (NPR), under the leadership of the Vice President, is an executive branch management reform effort intended to make the government “work better and cost less.” Among hundreds of NPR recommendations, generally intended to emphasize results and enhance managerial flexibility, were several dealing with “mission-driven, results-oriented budgeting.” Some of the most significant recommendations concerning the budget account structure were proposals to (1) restructure budget accounts to reduce over-itemization and to align them with programs, (2) budget and manage on the basis of operating costs, and (3) identify accounts that should be converted to multi-year or no-year status.

The Federal Accounting Standards Advisory Board (FASAB) was created to consider and recommend accounting principles for the federal government. Recently, FASAB has proposed cost accounting standards,which (1) focus on “responsibility segments,” defined as components associated with a specific mission, conducting a major activity, or producing one or more related products and services and (2) capture, for responsibility segments, “full costs,” defined as the costs of resources consumed directly or indirectly plus the costs of identifiable supporting services. Restructuring budget accounts to align with programs and outputs could be one outgrowth from budgetary and financial accounting that tracks entitywide expenditures and expenses.

Understanding the Federal Budget Account Structure

The Relationship Between Accounts and Budgetary Resources

A persistent pattern permeating the budget account structure is the unequal distribution of budgetary resources across accounts. When the number and size of accounts are compared, an inverse relationship is revealed. Figure 1 displays this “bookend” relationship.

As figure 1 shows, nearly 80 percent of the federal government’s resources are clustered in less than 5 percent of budget accounts (47 out of 1,303). Conversely, 85 percent of all budget accounts contain about 6 percent of the federal government’s total budgetary resources ($138.8 billion out of total budgetary resources of $2.5 trillion). Collectively in fiscal year 1995, there are 199 accounts with total budgetary resources over $1 billion and 162 accounts with budgetary resources of less than $1 million. Table 4 on page 17 more fully depicts the largest and smallest accounts.

A similar pattern of inequality emerges when comparing accounts and budgetary resources across federal missions, organizations, and appropriations subcommittees.

The three missions with the fewest number of accounts—social security, net interest, and medicare—are among the largest in terms of available 1995 budgetary resources. Consistent with the generally inverse relationship between accounts and budgetary resources, the missions with the most accounts—general government and natural resources and environment—have collectively only about 4 percent of total budgetary resources.

The Departments of Commerce and of Health and Human Services (HHS) have the same number of accounts but vastly different amounts of budgetary resources—$6.7 billion and $383.8 billion, respectively. Conversely, although the Departments of Defense and of the Treasury have comparable resource levels—$444.1 billion and $418.7 billion, respectively—Defense has more than twice the number of accounts.

Two appropriations subcommittees—Interior and Labor, Health and Human Services, Education, and Related Agencies—appropriate to similar numbers of accounts but provide widely different resource levels ($15.0 billion and $260.6 billion, respectively). The subcommittee concerned with the Departments of Commerce, Justice, and State has the most accounts—almost 17 percent of the accounts which the appropriations subcommittees acted on in 1995—but appropriated only about 4 percent of 1995 budgetary resources.

The Budget Account Structure Shows a Mix of Orientations

In establishing a budget account, the Congress articulates its interests, which in turn define the account’s orientation. The current budget account structure displays a mix of orientations, reflecting both the 200 years of federal budget development and varying congressional interests. We reviewed the fiscal year 1995 accounts of three judgmentally selected organizations—the Departments of Energy (DOE), HHS, and Treasury—and found that these accounts appear to emphasize program and process orientations to a greater extent than objects and organizations. Within these three organizations, program and process accounts represented 60 percent of accounts and 55 percent of total budgetary resources.

Each of the four orientations used in this report—object, organization, process, and program—reflects a specific focus or interest of the Congress. An object orientation emphasizes the items of expense, while an organization orientation focuses on the responsible governmental unit. In effect, the former stresses control of spending on an item-by-item basis; the latter accentuates accountability. Accounts with a process orientation concentrate on the specific operations or approaches underlying federal activities, while those with a program orientation focus on the missions and objectives of governmental units.

Object, organization, process, and program orientations are found throughout the federal budget account structure. Each account generally will have a predominant orientation but may have characteristics of other orientations. Thus, assigning an account to a specific orientation reflects a judgment based on interpretations of an account’s statutory language and obligation patterns. Table 1 presents examples of account orientations from DOE, HHS, and Treasury.

Table 2 presents the results of our assessments of the account orientations for DOE, HHS, and Treasury, showing the percentage of accounts and budgetary resources for each orientation.

Table 2 shows that more than half of the accounts in each of the three organizations have a program or process orientation. Fifty percent or more of DOE’s and HHS’ accounts had a program orientation, and these accounts held most of their budgetary resources. A total of 42 percent of Treasury’s accounts were oriented to process, but 82 percent of its resources were in object accounts, principally due to its large Interest on the Public Debt account. Excluding this account changes the distribution of resources to 10 percent object, 1 percent organization, 60 percent process, and 28 percent program.

Accounts with a program orientation do not necessarily capture all related program costs. For example, the costs of providing Medicare are spread among at least three accounts with different orientations: Federal Hospital Insurance Trust Fund (program orientation), Federal Supplementary Medical Insurance Trust Fund (program orientation), and Program Management (object orientation). Other programs separate accounts for salaries and expenses from other program expenditure accounts. Conversely, some accounts include the costs of a number of programs and activities within a single account. For example, the HHS’ Children and Families Services Programs account includes Head Start and many other social service and community services programs, while DOE’s Economic Regulation account captures the costs of both the Economic Regulatory Administration and the Office of Hearings and Appeals.

Accounts Display Varying Patterns Within Resource Types and Fund Types

One of the more informative ways to characterize an account is by its resource and fund types. These closely related dimensions illustrate the extent to which an account relies on current year authority, as opposed to other permanent or available types of funding, and the degree of earmarking or restriction associated with receipts available to an account.

Resource type indicates when and how an account received resources available for a particular fiscal year. We identified and analyzed four resource types: resources received in prior years, current authority, permanent authority, and offsetting collections. Fund type refers to the extent of designation or restriction of the receipts associated with an account. We analyzed five fund types: general funds, intragovernmental revolving funds, public enterprise funds, special funds, and trust funds.Both resource and fund types are defined in the glossary in appendix I. Table 3 summarizes these characteristics in terms of the number of accounts and amount of budgetary resources for fiscal year 1995.

As shown in table 3, permanent authority, the resource type associated with the fewest accounts, provides nearly half of the budgetary resources available in fiscal year 1995. Conversely, prior year authority, the most common resource type among accounts, provides the fewest budgetary resources (12.5 percent). Over one-third of fiscal year 1995 budget accounts have access to offsetting collections. Combining offsetting collections with prior year funding and permanent authority means that approximately 70 percent of total budgetary resources (about $1.76 trillion out of $2.47 trillion) were available for obligation without further action by the Congress in fiscal year 1995.

Within fund types, general funds comprise about two-thirds of all accounts and about 55 percent of available budgetary resources. About 22 percent of accounts and 31 percent of available resources involve designated or restricted receipts in trust and special funds.

A fund type generally aligns with a specific resource type. Current authority provides more than half of the resources in general fund accounts. Permanent authority provides over 80 percent of the resources to trust fund accounts and almost 50 percent of resources to special fund accounts. Offsetting collections provide 89 percent of the funding to intragovernmental revolving funds and 54 percent of the resources to public enterprise funds. (See appendix II, figure II.1 on page 34.)

Again, interesting and variable patterns emerge when resource type and fund type are applied to federal missions, organizations, and appropriations subcommittees. The figures in appendix II present detailed information on these patterns. The following are some of the observations that can be drawn from that information.

Federal Missions

The federal missions used in this report correspond to the 18 OMB budget function classifications described in appendix I. Except for net interest and medicare, the missions have all types of available budgetary resources. (See appendix II, figure II.2 on page 36.)

Permanent authority provides nearly all the budgetary resources for net interest and social security and is the dominant resource type for medicare (83 percent). However, this resource type provides less than 10 percent of available budgetary resources for 8 other missions.

Seven missions (general science, space, and technology; education, training, employment, and social services; administration of justice; veterans benefits and services; natural resources and environment; national defense; and health) received more than 50 percent of their available resources from current authority, while 6 missions had less than 20 percent of their available resources in current authority. International affairs and community and regional development have the greatest share of their resources provided through prior year funding (63 percent and 37 percent respectively), but more than half of the mission areas receive less than 13 percent of their budgetary resources from this source.

Offsetting collections are significant only to commerce and housing credit (62 percent), energy (55 percent), and agriculture (43 percent).

While virtually all missions have general fund and trust fund accounts, more than three-fourths have special, public enterprise, or intragovernmental fund types. (See appendix II, figure II.5 on page 44.)

Twelve of the 18 missions receive 50 percent or more of available resources from the general fund. Three missions—net interest; general science, space, and technology; and education, training, employment, and social services—are virtually fully funded through the general fund. Conversely, 2 missions—social security and commerce and housing credit—receive less than 5 percent of their available resources from the general fund.

Trust funds provide the dominant share of budgetary resources for 3 missions—social security (99 percent), medicare (81 percent) and transportation (71 percent)—but represent 1 percent or less of budgetary resources in 8 other missions.

Public enterprise funds are the most significant source of budgetary resources for 3 missions—commerce and housing credit (95 percent of budgetary resources in 30 percent of accounts), agriculture (80 percent of budgetary resources in 19 percent of accounts), and energy (55 percent of resources in 15 percent of accounts). However, public enterprise funds provide less than 5 percent of the budgetary resources for 12 other missions.

Only the general government mission has a significant amount of its budgetary resources (41 percent) provided by intragovernmental revolving funds; 13 missions receive less than 1 percent of their resources from these funds. Only 1 mission—natural resources and environment—has a sizeable number of special fund accounts (24 percent), but these accounts amount to only 6 percent of its budgetary resources.

Federal Organizations

For this report, we considered all federal government entities that received budgetary resources in fiscal year 1995. For presentation purposes, the federal organizations shown in our analyses include (1) all departments and agencies separately displayed in the President’s budget, (2) the legislative and judicial branches, (3) the Executive Office of, and Funds Appropriated to, the President, and (4) the following independent agencies: the Export-Import Bank of the United States, the Federal Deposit Insurance Corporation, the Federal Emergency Management Agency, the National Science Foundation, the Postal Service, the Railroad Retirement Board, the Resolution Trust Corporation, the Smithsonian Institution, and the United States Information Agency. In our analyses, major organizations include all departments and the Environmental Protection Agency. (See appendix II, figure II.6 on page 46 and appendix III, figure III.6 on page 57 for federal organizations shown in our analyses and appendix IV for a description of how these organizations were selected.)

Permanent authority provides more than half of available budgetary resources for 5 organizations: the Social Security Administration (93 percent), Treasury (86 percent), HHS (56 percent), the Railroad Retirement Board (54 percent), and Labor (51 percent). However, about two-thirds of the organizations received less than 10 percent of their available budgetary resources from permanent authority.

For many federal organizations—including HHS; the Departments of Housing and Urban Development (HUD), Labor, the Interior, the Treasury, and Transportation; the General Services Administration (GSA); and the Office of Personnel Management (OPM)—current authority is less than half of total available budgetary resources. None of the major organizations has more than 80 percent of available budgetary resources stemming from current authority.

Offsetting collections provided between 10 percent and 24 percent of available resources for 9 of 15 major organizations: the Department of Defense (DOD), Energy, Commerce, Agriculture, HUD, Justice, Labor, State, and the Interior. Five other organizations had more than 50 percent of budgetary resources in collections—the Postal Service, the Tennessee Valley Authority (TVA), GSA, the Resolution Trust Corporation (RTC), and the Small Business Administration (SBA).

Resources from prior year authority comprise 13 percent of all budgetary resources to federal organizations; however, they are a significant percentage of resources for only one major organization, HUD (49 percent).

Although general funds are the principal fund type for most federal organizations, there are some notable exceptions. (See appendix II, figure II.6 on page 46.)

Trust funds are the dominant fund type in the Social Security Administration (90 percent of budgetary resources), the Railroad Retirement Board (87 percent), OPM (75 percent), and the Departments of Transportation (74 percent) and Labor (53 percent). However, trust funds provided less than 10 percent of the budgetary resources to more than two-thirds of the organizations.

Public enterprise funds are dominant for TVA, the Federal Deposit Insurance Corporation, RTC, and the Postal Service (all about 100 percent), but about one-third of the organizations did not receive any budgetary resources from these funds. Intragovernmental revolving funds are a significant fund type only for GSA (98 percent); about half of the organizations did not receive resources from this fund type.

Special funds provided less than 1 percent of budgetary resources to federal organizations but were about 17 percent of the budgetary resources of both the Interior and the Legislative Branch.

Appropriations Subcommittees

The budget accounts acted on by appropriations subcommittees represent a smaller universe than the 1,303 accounts with $2.5 trillion in available budgetary resources that we analyzed to this point. In fiscal year 1995, appropriations subcommittees provided $903 billion in available budgetary resources to 860 accounts. This smaller universe of accounts and resources results from excluding (1) resources provided by authorizing committees and (2) resources available from prior years.

Current authority is provided exclusively through the appropriations process. Not surprisingly, current authority was the principal budgetary resource among the appropriations subcommittees, comprising almost 80 percent of budgetary resources appropriated. Permanent authority provides more than 10 percent of resources for only one subcommittee—the Labor, Health and Human Services, Education and Related Agencies subcommittee. Offsetting collections are associated with 39 percent of subcommittee accounts and provide 15 percent of budgetary resources. The subcommittees in which offsetting collections represent a larger share of resources are Defense (29 percent); Transportation and Related Agencies (27 percent); Treasury, Postal Service, and General Government (26 percent); Military Construction (20 percent); and Energy and Water Development (19 percent). (See appendix II, figure II.4 on page 42.)

Similarly, budget accounts acted on by appropriations subcommittees are largely associated with the general fund. For example, 96 percent or more of budgetary resources come from general funds for all subcommittees except the following:

Energy and Water Development (89 percent general funds);

Defense (78 percent general fund, 22 percent intragovernmental revolving

Treasury, Postal Service and General Government (76 percent general funds, 24 percent intragovernmental revolving funds); and

Transportation and Related Agencies (69 percent general funds, 26 percent trust funds).

Overall, less than 1 percent of all subcommittee resources were appropriated to accounts with special funds and public enterprise funds. (See appendix II, figure II.7 on page 50.)

Discerning Patterns Within the Federal Budget Account Structure

As the preceding discussion has shown, each dimension or characteristic can provide some insight into the federal budget account structure. The following discussion highlights some of the patterns which can be detected when one or more of the variables is mapped against the others. However, this represents only a preliminary and high-order analysis. Each dimension discussed in this report also could be analyzed at the individual budget account level. This kind of detailed analysis would be needed to address specific questions or to comment on cross-cutting proposals.

A Profile of the Largest and Smallest Accounts

As discussed earlier, the account structure is comprised of a few very large accounts and many very small accounts (see figure 1). This raises the question of whether the largest and smallest accounts have different characteristics. Table 4 helps to answer this question. It separates accounts into two groups—“large,” which we have defined arbitrarily as containing over $1 billion, and “small,” which we have defined arbitrarily as containing less than $1 million. While no dominant order or design emerges, tendencies can be discerned.

Although the number of accounts with budgetary resources over $1 billion and under $1 million is roughly similar, over 94 percent of all budgetary resources are concentrated in the accounts over $1 billion. For the 361 accounts in these two categories, each of the four orientations was found in the group of accounts over $1 billion and in the group of accounts under $1 million. However, accounts over $1 billion are oriented to programs more often than accounts under $1 million, which emphasize processes.

Accounts under $1 million are more likely to be trust funds and less likely to receive current authority and offsetting collections than accounts over $1 billion. Accounts over $1 billion are more likely than accounts under $1 million to be general funds and to receive current authority and offsetting collections.

Representative Account Sizes

The preceding analysis helps to explain a budget account structure marked by a wide and unequal distribution of accounts by size. Analyzing median account sizes—the budgetary resources level at which half the accounts in a particular dimension are above and half are below—is another method to deal with this persistent pattern. The median identifies representative accounts because it is unaffected by a few extremely large or small values. In table 4, the large accounts have a median of $3.2 billion, while the small accounts’ median is $206,000. Figures III.1, III.2, and III.3 on pages 52, 53, and 54 in appendix III present detailed information about account medians, the total number of accounts, and the ranges of budgetary resources for missions, organizations, and appropriations subcommittees. The following are some of the more interesting patterns shown in these figures.

The medicare, social security, and net interest missions have the largest medians and the fewest accounts. General government and community and regional development—missions with more diverse and numerous accounts—have the smallest medians.

Five federal organizations (the Social Security Administration, RTC, TVA, OPM, and the Federal Deposit Insurance Corporation) have comparatively large account medians; the Legislative Branch has the smallest account median.

The Defense appropriations subcommittee has the largest median account size, while the Legislative Branch subcommittee has the smallest.

Organizations with similar account medians can have quite different profiles. The Department of Justice (DOJ) and HUD have roughly equal median account sizes (about $135 million). DOJ has $18.8 billion in budgetary resources, with 10 percent of its accounts over $1 billion, and it has no public enterprise funds. In contrast, HUD has resources of $75.9 billion, with 20 percent of its accounts over $1 billion, and about 25 percent of its accounts are public enterprise funds. There also are some similarities. Both organizations are reviewed by one appropriations subcommittee and implement programs in about the same number of missions.

Median account size also varies by fund type. (See appendix III, figure III.4 on page 55.) The median of intragovernmental revolving funds is three times that of public enterprise funds—the next largest median—due to large revolving funds in DOD and GSA. Although the medians for public enterprise and general funds are similar, there are 116 public enterprise funds and 856 general funds. Trust funds have the smallest median, despite the existence of some very large trust funds such as social security, medicare, and highways.

Intersections Between Federal Missions and Structures

Finally, combining the dimensions discussed in this report into an overall matrix discloses the rich and complex relationships within the budget account structure. Figure 2 shows the intersections between the descriptive characteristics of federal missions, federal organizations, and cognizant appropriations subcommittees. It visually presents another aspect of the complex setting that would be encountered by any cross-cutting proposals affecting the budget account structure. The following are some of the overall patterns displayed in figure 2 which follows, as well as in figures III.5, III.6, and III.7 on pages 56, 57, and 58 of appendix III.

Three missions are concentrated in one subcommittee each, while eight missions are addressed by five or more subcommittees.

Three missions are concentrated in one organization each, while 10 missions are carried out by five or more organizations.

Seven major federal organizations are considered by one appropriations subcommittee each and six others are considered by two subcommittees. Five subcommittees review parts of DOD and HHS.

Two subcommittees appropriate to more than 10 federal organizations and two others address 8 and 7 federal organizations, respectively. Five subcommittees deal with 2 or fewer federal organizations.

The descriptive overview discussed in this report represents only a first order of analysis. As proposals suggesting across-the-board changes to the budget account structure are generated, more detailed analyses, keyed to the specific proposals, will be necessary. However, this preliminary work demonstrates both the extent of analysis which can be performed and its potential utility. We would be pleased to work with your offices to determine other avenues of inquiry.

We provided a draft of this report to OMB for technical review and comment. Their comments have been included as appropriate.

We are sending copies of this report to the Ranking Minority Members of the Senate Committee on Appropriations, Committee on the Budget, and Committee on Governmental Affairs; the Chairmen and Ranking Members of the House Committee on Appropriations, Committee on the Budget, and Committee on Government Reform and Oversight; and other interested Members of the Congress. We also will make copies available to others upon request.

If you have any questions, I can be reached at (202) 512-9573. Major contributors to this report are listed in appendix V.

Glossary

Federal Mission

The federal missions listed in this report are defined by OMB’s budget function classification system, in which all accounts are assigned to one or more budget functions that generally indicate broad areas of national need. The following are descriptions of the budget functions used in this report. For a more complete description, see appendix II in A Glossary of Terms Used in the Federal Budget Process (Exposure Draft) (GAO/AFMD-2.1.1, Jan. 1993).

Administration of Justice

Programs to provide judicial services, police protection, law enforcement (including civil rights), rehabilitation and incarceration of criminals, and the general maintenance of domestic order.

Agriculture

Promoting the economic stability of agriculture and the nation’s capability to maintain and increase agricultural production.

Commerce and Housing Credit

Promotion and regulation of commerce and the housing credit and deposit insurance industries, which pertain to collection and dissemination of social and economic data (unless they are an integral part of another function, such as health); general purpose subsidies to business, including credit subsidies to the housing industry; and the Postal Service fund and general fund subsidies of that fund.

Community and Regional Development

Development of physical facilities or financial infrastructures designed to promote viable community economies.

Education, Training, Employment, and Social Services

Promoting the extension of knowledge and skills, enhancing employment and employment opportunities, protecting workplace standards, and providing services to the needy.

Energy

Promoting an adequate supply and appropriate use of energy to serve the needs of the economy.

General Government

General overhead cost of the federal government, including legislative and executive activities; provision of central fiscal, personnel, and property activities; and provision of services that cannot reasonably be classified in any other major function.

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.

Health

Programs other than medicare whose basic purpose is to promote physical and mental health, including the prevention of illness and accidents.

Income Security

Support payments (including associated administrative expenses) to persons for whom no current service is rendered. Included are retirement, disability, unemployment, welfare, and similar programs, except for social security and income security for veterans, which are in other functions.

International Affairs

Maintaining peaceful relations, commerce, and travel between the United States and the rest of the world and promoting international security and economic development abroad.

Medicare

Federal hospital insurance and federal supplementary medical insurance, along with general fund subsidies of these funds and associated offsetting receipts.

National Defense

Common defense and security of the United States, including raising, equipping, and maintaining of armed forces; development and utilization of weapons systems; direct compensation and benefits paid to active military and civilian personnel; defense research, development, testing, and evaluation; and procurement, construction, stockpiling, and other activities undertaken to directly foster national security.

Natural Resources and Environment

Developing, managing, and maintaining the nation’s natural resources and environment.

Net Interest

Transactions which directly give rise to interest payments or income (lending) and the general short fall 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).

Social Security

Federal old age and survivors and disability insurance trust funds, along with general fund subsidies of these funds and associated offsetting collections.

Transportation

Providing for the transportation of the general public and/or its property, regardless of whether local or national and regardless of the particular mode of transportation. Included are construction of facilities; purchase of equipment; research, testing, and evaluation; provision of communications related to transportation; operating subsidies for transportation facilities and industries; and regulatory activities directed specifically toward the transportation industry rather than toward business.

Veterans Benefits and Services

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.

Fund Type

The extent of restriction or earmarking within accounts. The five fund types discussed in this report follow.

General Funds

Accounts containing resources to be expended for the general support of the federal government.

Intragovernmental Revolving Funds

Accounts similar to public enterprise funds except that their governmental receipts primarily come from other government agencies and accounts.

Public Enterprise Funds

Accounts authorized by law to be credited with offsetting collections, primarily from the public, that are generated by and earmarked to finance a continuing cycle of business-type operations.

Special Funds

Accounts whose resources are earmarked by law for specific purposes.

Trust Funds

Accounts designated by law as “trust funds” and earmarked for specific purposes and programs according to the terms of a trust agreement or a statute.

Orientation

The focus of the Congress in creating an account. The four orientations discussed in this report follow.

Object

Focus on the specific items—the objects of expenditure—needed to operate a governmental unit. Examples are accounts containing expenses for salaries or equipment. The predominant goal expressed through an object orientation is to control spending.

Organization

Focus on a specific governmental unit. This account orientation emphasizes the accountability of, rather than control over, the organization receiving the budgetary resources—that is, from a focus on objects to a focus on stewardship.

Process

Focus on the operations, approaches, and activities underlying federal programs, reflecting congressional interest in those processes. Examples include accounts for working capital funds or inspection services.

Program

Focus on the missions and objectives of governmental units, reflecting congressional attention to the purpose, program, or activity of government. Examples of such accounts include the fiscal year 1995 appropriations to the National Aeronautics and Space Administration for Human Space Flight and for Science, Aeronautics and Technology—accounts which emphasize the purpose and major programs of the organization. These accounts replaced accounts for Construction of Facilities and for Research and Development, which emphasized activities and processes.

Resource Type

The source of funding for accounts. Four resource types are discussed in this report.

Current Authority

Resources provided by the Congress in, or immediately prior to, the fiscal year or years during which the funds are available for obligation.

Offsetting Collections

Resources arising as collections from government or public sources for business-type transactions. Laws authorize collections to be credited directly to accounts and may make them available for obligation to meet the account’s purpose without further legislative action. Usually a form of permanent authority, offsetting collections are separately discussed in this report.

Permanent Authority

Resources available as a result of previously enacted legislation and not requiring new legislation for the current year.

Prior Year Funding

Current or permanent authority provided and available in a previous fiscal year that remains available in the current fiscal year.

Understanding the Federal Budget Account Structure

Accounts (58.5%) (10.4%) (90.9%) (10.3%) (85.3%) (37.5%) (83.3%) (30.3%) (82.7%) (8.7%) (67.4%) (12.5%)

Excludes offsetting collections. Number of accounts will not total because some accounts have multiple resource types.

Accounts (7.9%)

Budgetary resources (33.3%)

Accounts (35.3%) (4.3%) (2.3%) (0.0%) (90.9%) (89.1%) (15.5%) (8.2%) (89.7%) (53.7%) (61.1%) (47.6%) (7.4%) (2.5%) (67.6%) (87.2%) (14.5%) (3.0%) (21.0%) (46.0%) (36.8%) (12.6%)

A fund type generally is dominated by a resource type. -- General funds - current authority -- Special and trust funds - permanent authority -- Public enterprise and intragovernmental revolving funds - offsetting collections (55.4%) (11.0%) (66.7%) (11.1%)

Commerce and housing credit Community and regional development (78.6%) (49.3%) (29.4%) (36.5%)

Education, training, employment, and social services (61.2%) (10.4%) (95.1%) (12.2%) (55.8%) (7.8%)

General science, space and technology (58.8%) (9.8%) (67.6%) (12.9%) (69.7%) (20.0%) (64.6%) (62.9%) (0.0%) (0.0%) (72.4%) (10.2%) (80.9%) (17.7%) (0.0%) (0.0%) (33.3%) (0.0%) (76.1%) (29.2%) (73.7%) (26.0%) (67.4%) (12.5%) accounts in the income security mission.

Number of accounts does not total because some accounts have multiple resource types.

Accounts (21.7%) (7.7%)

Accounts 34 (37.0%)

Budgetary resources (12.5%) (25.9%) (30.2%) (48.1%) (43.0%) (11.9%) (19.2%) (5.6%) (4.3%) (53.6%) (37.0%) (62.0%) (14.5%) (23.3%) (11.9%) (23.3%) (4.7%) (7.3%) (7.9%) (39.0%) (55.0%) (20.2%) (24.9%) (32.5%) (35.6%) (11.8%) (0.2%) (35.3%) (4.7%) (29.4%) (17.1%) (55.9%) (13.0%) (33.7%) (45.4%) (21.3%) (4.0%) (17.7%) (14.0%) (20.4%) (3.4%) (100.0%) (82.8%) (0.0%) (0.0%) (8.6%) (2.8%) (56.0%) (24.8%) (28.4%) (4.4%) (37.7%) (15.6%) (85.7%) (100.0%) (0.0%) (0.0%) (100.0%) (99.3%) (33.3%) (0.7%) (17.4%) (39.0%) (34.8%) (8.4%) (17.5%) (3.0%) (50.9%) (7.8%) (21.0%) (46.0%) (36.8%) (12.6%)

Each resource type is concentrated in only a few missions. -- Four missions received 70 percent of funds available from prior years. -- Three missions received 63 percent of current authority. -- Four missions received 89 percent of permanent authority. -- Two missions received 63 percent of offsetting collections.

All but four missions have authority available from prior years in more than half of their accounts. However, prior-year funding provides significant resources to only one mission, international affairs.

Permanent authority is a significant source of funds for only three missions, medicare, net interest, and social security. Less than 35 percent of accounts in other missions have available permanent authority.

Offsetting collections are found in over half of the accounts of only four missions: commerce and housing credit, health, national defense, and veterans benefits and services. Offsetting collections provide over half of resources to commerce and housing credit and energy.

Accounts (65.7%)

Budgetary resources (5.7%) (88.6%) (15.3%)

Department of Defense Department of Education (73.8%) (56.3%) (9.7%) (10.2%) (100.0%) (15.2%)

Department of Health and Human Services (56.8%) (3.9%)

Department of Housing and Urban Development (71.1%) (49.3%) (58.3%) (12.9%) (45.8%) (14.6%) (50.0%) (11.4%) (83.2%) (24.5%)

Department of the Treasury Department of Transportation Department of Veterans Affairs (70.0%) (77.3%) (70.8%) (8.3%) (30.1%) (26.1%) (78.6%) (21.8%)

Executive Office of the President/Funds Appropriated to the President (60.3%) (53.5%)

Federal Deposit Insurance Corporation Federal Emergency Management Agency (60.0%) (56.7%) (70.0%) (64.8%) (75.0%) (27.2%) (11.8%) (52.4%) (16.4%)

National Aeronautics and Space Administration (54.5%) (10.9%) (62.5%) (1.5%) (44.4%) (21.2%)

Accounts (20.1%)

Budgetary resources (21.6%)

Accounts (38.1%) 51 (19.1%) (6.8%) (1.0%) (50.0%) (21.3%) (12.7%) (21.9%) (8.9%) (15.8%) (55.6%) (18.8%) (24.0%) (4.5%) (8.3%) (3.5%) (36.1%) (22.2%) (31.8%) (55.7%) (47.7%) (1.2%) (11.1%) (1.4%) (28.9%) (15.2%) (18.8%) (7.1%) (41.7%) (14.9%) (20.8%) (50.8%) (58.3%) (14.8%) (17.6%) (8.6%) (29.4%) (10.1%) (44.6%) (15.7%) (31.7%) (10.2%) (44.0%) (19.3%) (14.6%) (85.7%) (40.5%) (2.6%) (44.0%) (34.1%) (56.3%) (3.5%) (7.6%) (7.8%) (7.1%) (0.0%) (57.1%) (2.5%) (16.7%) (24.7%) (21.8%) (0.4%) (20.0%) (2.6%) (80.0%) (40.6%) (20.0%) (0.0%) (60.0%) (18.9%) (16.7%) (0.1%) (66.7%) (69.3%) (38.1%) (5.6%) (14.3%) (5.5%) (19.0%) (8.3%) (20.2%) (22.0%) (27.3%) (0.0%) (27.3%) (5.0%) (12.5%) (0.9%) (37.5%) (5.4%) (22.2%) (49.0%) (55.6%) (18.4%) (Continued) See notes on following page (0.0%) (0.0%) (57.1%) (44.8%) (50.0%) (47.0%) (100.0%) (19.5%) (81.8%) (20.7%) (60.0%) (0.3%) (100.0%) (0.3%) (52.9%) (7.5%) (59.9%) (67.4%) (40.8%) (12.5%) social security mission.

Accounts (33.3%) 1

(7.0%)

Budgetary resources (92.8%) (71.4%) (54.1%) (14.3%) (0.0%) (0.0%) (0.0%) (50.0%) (52.9%) (0.0%) (0.0%) (66.7%) (53.9%) (9.1%) (0.0%) (9.1%) (0.0%) (100.0%) (92.5%) (60.0%) (1.4%) (100.0%) (15.0%) (100.0%) (82.7%) (11.8%) (0.2%) (17.6%) (2.3%) (16.9%) (4.8%) (26.8%) (20.9%) (21.0%) (46.0%) (36.8%) (12.6%)

Each resource type is concentrated in only a few federal organizations. -- The Departments of Defense, Housing and Urban Development, the Treasury, and the Executive Office of the President/Funds Appropriated to the President have nearly 50 percent of resources available from prior years. -- The Departments of Defense and Health and Human Services have over 50 percent of current authority. -- The Departments of Health and Human Services, the Treasury, and the Social Security Administration have over 80 -- The Department of Defense receives over one-third of all offsetting collections. However, every major organization receives funding from all sources.

Resources available from prior years are found in nearly every organization. With the exception of the Postal Service, over 40 percent of every organization's accounts have some funding available from previous years. However, these resources provide more than half of funding for only three organizations.

Permanent authority is not a significant source of funding for most organizations. Only nine organizations receive more than 20 percent of their resources in permanent authority.

Offsetting collections are not a significant source of funding for most agencies. However, five agencies receive more than half their funding through business-type transactions with either the public or other government entities. (97.6%) (87.2%)

Commerce, Justice, State, Judiciary and Related Agencies (97.2%) (85.2%) (98.5%) (100.0%) (71.2%) (100.0%) (92.5%) (81.5%) (97.5%) (99.1%) (97.9%) (89.5%)

Labor, Health and Human Services, Education and Related Agencies (90.5%) (79.6%) (97.9%) (94.7%) (100.0%) (79.6%) (84.7%) (73.7%)

Treasury, Postal Service and General Government Veterans Affairs, HUD and Independent Agencies (93.4%) (74.0%) (98.0%) (95.7%) (95.5%) (79.0%)

Excludes offsetting collections. Number of accounts will not total because some accounts have multiple resource types. The budget accounts associated with appropriations subcommittees represent a smaller universe than the 1,303 accounts with $2.5 trillion in budgetary resources used in the other analyses in this report.

Resource type

Accounts 31 (37.3%) (3.0%) (41.3%) (14.7%) (69.7%) (0.0%) (28.8%) (0.0%) (37.7%) (18.5%) (15.0%) (0.8%) (39.4%) (7.9%) (34.7%) (2.6%) (12.8%) (4.6%) (50.0%) (20.4%) (40.7%) (26.6%) (52.5%) (25.6%) (29.4%) (2.6%) (38.6%) (15.0%)

Every appropriations subcommittee provides current authority to 80 percent or more of its accounts; however, three subcommittees appropriate over three-quarters of all current authority.

Only one subcommittee provides access to significant amounts of permanent authority. -- 18 percent of budget authority from the Labor, Health and Human Services, Education and Related Agencies subcommittee is permanent.

Four subcommittees provide just over 20 percent of resources using offsetting collections, while about half provide less than 5 percent. (73.9%) (84.8%) (59.3%) (18.0%)

Commerce and housing credit Community and regional development (46.4%) (67.1%) (4.3%) (72.7%)

Education, training, employment, and social services (78.6%) (97.4%) (65.9%) (40.2%) (71.2%) (55.5%)

General science, space and technology (88.2%) (99.8%) (70.6%) (85.0%) (65.2%) (54.5%) (77.9%) (50.8%) (33.3%) (19.0%) (75.0%) (79.9%) (51.2%) (72.7%) (100.0%) (100.0%) (33.3%) (1.4%) (55.4%) (25.5%) (50.9%) (67.2%) (65.7%) (54.6%) accounts in the income security mission.

Accounts (0.0%) 0

Budgetary resources $0 (0.0%)

Budgetary resources (8.8%)

Accounts (4.3%)

Budgetary resources (0.6%) (18.5%) (80.2%) (1.9%) (0.0%) (18.5%) (1.0%) (29.8%) (17.8%) (94.6%) (14.3%) (15.5%) (4.1%) (0.6%) (1.7%) (4.8%) (9.6%) (0.3%) (10.4%) (1.0%) (0.1%) (1.9%) (0.0%) (16.5%) (2.3%) (14.6%) (55.2%) (17.1%) (4.6%) (2.4%) (0.0%) (6.1%) (0.7%) (8.0%) (2.8%) (8.0%) (0.1%) (0.0%) (0.0%) (0.0%) (0.0%) (11.8%) (0.2%) (11.8%) (0.1%) (0.0%) (0.0%) (14.7%) (14.3%) (6.7%) (2.4%) (2.2%) (0.3%) (24.7%) (42.8%) (8.0%) (35.5%) (1.8%) (0.0%) (10.6%) (13.7%) (0.0%) (0.0%) (0.0%) (0.0%) (66.7%) (81.0%) (3.4%) (0.1%) (5.2%) (0.0%) (9.5%) (0.2%) (4.3%) (1.3%) (23.5%) (6.1%) (17.3%) (10.4%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (66.7%) (98.6%) (7.6%) (2.7%) (2.2%) (0.1%) (30.4%) (70.8%) (24.6%) (6.1%) (3.5%) (0.2%) (19.3%) (25.3%) (8.9%) (9.5%) (8.3%) (0.4%) (13.7%) (30.8%)

General funds can be found in every mission and provide most of the resources for all but six missions.

All missions have some trust funds, except net interest, but only medicare, social security, and transportation have more than half of their resources in these funds. (72.4%) (63.0%) (61.4%) (91.0%)

Department of Defense Department of Education (67.5%) (90.6%) (73.9%) (99.9%) (66.7%) (82.9%)

Department of Health and Human Services (77.3%) (53.5%)

Department of Housing and Urban Development (62.2%) (71.2%) (72.9%) (80.5%) (66.7%) (33.0%) (76.5%) (91.4%) (43.6%) (59.4%)

Department of the Treasury Department of Transportation (62.0%) (53.4%) (88.4%) (23.5%) (52.1%) (67.6%) (50.0%) (79.7%)

Executive Office of the President/Funds Appropriated to the President (75.6%) (74.2%)

Federal Deposit Insurance Corporation Federal Emergency Management Agency (20.0%) (0.0%) (60.0%) (78.9%) (33.3%) (1.9%) (61.9%) (85.1%) (75.0%) (59.6%)

National Aeronautics and Space Administration (72.7%) (99.9%) (87.5%) (98.9%) (55.6%) (24.4%)

Accounts (9.0%)

Budgetary resources (33.7%)

Accounts (6.7%)

Budgetary resources (2.0%)

Accounts (10.4%)

Budgetary resources (0.8%) (11.4%) (3.9%) (13.6%) (0.9%) (9.1%) (0.0%) (3.2%) (3.1%) (0.1%) (0.1%) (7.1%) (0.0%) (0.1%) (0.0%) (15.1%) (6.3%) (6.6%) (0.0%) (8.3%) (12.9%) (22.2%) (4.2%) (2.8%) (0.0%) (9.1%) (0.0%) (0.0%) (0.0%) (9.1%) (46.2%) (26.7%) (28.5%) (6.7%) (0.0%) (2.2%) (0.0%) (0.0%) (0.0%) (18.8%) (10.2%) (4.2%) (1.2%) (4.2%) (13.6%) (4.2%) (0.1%) (16.7%) (52.9%) (0.0%) (0.0%) (11.8%) (0.1%) (8.8%) (7.3%) (5.0%) (3.1%) (33.7%) (17.5%) (13.9%) (16.2%) (8.0%) (6.8%) (8.7%) (2.0%) (14.0%) (2.3%) (0.2%) (0.1%) (10.0%) (33.0%) (0.1%) (73.6%) (29.2%) (6.2%) (2.1%) (0.2%) (14.6%) (25.0%) (14.3%) (0.3%) (7.1%) (0.0%) (28.6%) (20.0%) (9.0%) (1.2%) (1.3%) (0.0%) (11.5%) (24.5%) (60.0%) (99.9%) (0.0%) (0.0%) (0.0%) (0.0%) (30.0%) (21.1%) (0.0%) (0.0%) (10.0%) (0.0%) (8.3%) (0.0%) (16.7%) (0.1%) (8.3%) (0.0%) (0.0%) (0.0%) (19.0%) (6.8%) (19.0%) (8.1%) (9.5%) (0.1%) (3.6%) (17.0%) (9.5%) (1.8%) (0.0%) (0.0%) (0.0%) (0.0%) (27.3%) (0.1%) (0.0%) (0.0%) (0.0%) (0.0%) (12.5%) (1.1%) (0.0%) (0.0%) (0.0%) (0.0%) (33.3%) (75.4%) (Continued) See notes on following page (66.7%) (0.2%) (42.9%) (13.2%) (50.0%) (0.2%) (44.4%) (52.7%) (90.9%) (100.0%) (60.0%) (10.0%) (0.0%) (0.0%) (70.6%) (99.0%) (70.4%) (65.7%) (40.8%) (54.6%) social security mission.

Accounts

(33.3%) (99.8%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (57.1%) (86.8%) (50.0%) (99.8%) (0.0%) (0.0%) (0.0%) (0.0%) (44.4%) (47.3%) (0.0%) (0.0%) (11.1%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (9.1%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (40.0%) (90.0%) (100.0%) (100.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (29.4%) (1.0%) (9.9%) (8.9%) (54.5%) (9.5%) (2.8%) (8.3%) (0.2%) (0.4%) (16.2%) (13.7%) (4.5%) (30.8%)

All organizations except the Tennessee Valley Authority have general funds. Over 85 percent of organizations have trust funds, and nearly 70 percent have public enterprise funds. Over 60 percent of the organizations have special funds or intragovernmental revolving funds.

Only two of the major organizations have most of their resources outside of general funds. The Department of Transportation has over 70 percent of its resources in trust funds, and the Department of Labor has over 50 percent in trust funds. (95.2%) (99.1%)

Commerce, Justice, State, Judiciary and Related Agencies (88.1%) (98.3%) (86.4%) (100.0%) (78.1%) (100.0%) (64.2%) (89.0%) (97.5%) (99.7%) (80.9%) (96.4%)

Labor, Health and Human Services, Education and Related Agencies (89.5%) (97.0%) (100.0%) (100.0%) (93.8%) (100.4%) (64.4%) (69.0%)

Treasury, Postal Service and General Government Veterans Affairs, HUD and Independent Agencies (88.5%) (76.1%) (87.3%) (97.1%) (86.0%) (88.5%)

Negative values indicate net resource reduction. The budget accounts associated with appropriations subcommittees represent a smaller universe than the 1,303 accounts with $2.5 trillion in budgetary resources used in the other analyses in this report.

Accounts (2.4%)

(0.4%)

Accounts (1.2%)

Budgetary resources (0.1%)

Accounts (0.0%)

Budgetary resources $0 (0.0%) (3.5%) (0.8%) (4.2%) (0.3%) (3.5%) (0.2%) (4.5%) (0.0%) (0.0%) (0.0%) (4.5%) (0.0%) (0.0%) (0.0%) (1.5%) (0.0%) (0.0%) (0.0%) (9.4%) (2.0%) (18.9%) (5.8%) (5.7%) (2.1%) (2.5%) (0.3%) (0.0%) (0.0%) (0.0%) (0.0%) (1.1%) (0.0%) (13.8%) (3.3%) (3.2%) (0.1%) (2.1%) (0.0%) (0.0%) (0.0%) (7.4%) (2.9%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (6.3%) (-0.4%) (0.0%) (0.0%) (0.0%) (0.0%) (3.4%) (3.0%) (3.4%) (0.2%) (23.7%) (26.3%) (0.0%) (0.0%) (4.9%) (0.1%) (0.0%) (0.0%) (6.9%) (1.2%) (1.0%) (0.0%) (4.9%) (1.7%) (3.4%) (0.3%) (4.5%) (0.3%) (4.4%) (1.7%)

All appropriations subcommittees but one provide at least three-quarters of their resources to general funds.

Only the Transportation and Related Agencies subcommittee provides more than 25 percent of its resources to another fund type (trust funds).

National defense General science, space and technology Veterans benefits and services Commerce and housing credit Education, training, employment, and social services Transportation Natural resources and environment Community and regional development General government Account medians by mission range widely. The largest median is almost 7,000 times larger than the smallest.

Each of the three missions with the highest medians has a narrow focus compared to other missions.

Figure III.2: Median and Range of Account Budgetary Resources by Federal Organization, Fiscal Year 1995

National Aeronautics and Space Administration Small Business Administration Department of Justice Department of Housing and Urban Development Executive Office of the President/Funds Appropriated to the President General Services Administration The Judiciary Medians of federal organizations are distributed into two groups. The five largest medians range from $32 billion to $3 billion; then there is a gap of $3 billion, and the account medians decline steadily.

Labor, Health and Human Services, Education and Related Agencies Veterans Affairs, HUD and Independent Agencies Commerce, Justice, State, Judiciary and Related Agencies Treasury, Postal Service and General Government Negative values indicate largest net resource reductions made by appropriations subcommittees. The budget accounts associated with appropriations subcommittees represent a smaller universe than the 1,303 accounts with $2.5 trillion in resources used in other analyses in this report.

The median account in the Defense appropriations subcommittee is larger than those in other subcommittees -- over six times that of the Labor, Health and Human Services, Education and Related Agencies subcommittee and over 40 times larger than that of the Treasury, Postal Service and General Government subcommittee.

Account with least resources $120 The median of intragovernmental revolving funds is three times greater than the next largest median, public enterprise funds, due to large intragovernmental revolving funds in the Department of Defense and the General Services Administration.

Federal mission Administration of justice Community and regional development Education, training, employment and social services General science, space and technology Net interest is excluded from this analysis because it is not affected by appropriations subcommittees.

The "number of federal organizations" column counts the Executive Office of the President/Funds Appropriated to the President, the Legislative Branch, and the Judiciary, as well as independent agencies not separately listed in figure III.6, as single entities. This column excludes federal mission/organization relationships defined by authorizing committees.

Most missions are performed by several organizations and funded by several subcommittees. -- Over half of missions are performed by at least five organizations. -- Over half of missions are funded by four or more subcommittees.

Federal organization Department of Agriculture Department of Education Department of Energy Department of Health and Human Services Department of Housing and Urban Development Department of Labor Department of State Environmental Protection Agency Executive Office of the President/Funds Appropriated to the President Export-Import Bank of the United States General Services Administration The Judiciary National Aeronautics and Space Administration Railroad Retirement Board Small Business Administration Social Security Administration United States Information Agency This column excludes federal mission/organization relationships defined by authorizing committees.

The accounts of most organizations are reviewed by only one or two subcommittees. For major organizations, subcommittees generally fund the performance of three or more missions.

Appropriations subcommittee Agriculture and Related Agencies Commerce, Justice, State, Judiciary and Related Agencies District of Columbia Energy and Water Development Labor, Health and Human Services, Education and Related Agencies Treasury, Postal Service and General Government Veterans Affairs, HUD and Independent Agencies The "number of federal organizations" column counts the Executive Office of the President/Funds Appropriated to the President, the Legislative Branch, and the Judiciary, as well as independent agencies not separately listed in figure III.6, as single entities. This column also excludes federal mission/organization relationships defined by authorizing committees.

Most appropriations subcommittees fund multiple missions and organizations. However, a few fund a single mission or organization. -- The Defense, District of Columbia, Foreign Assistance, and Military Construction subcommittees fund only one mission each. -- The District of Columbia, Legislative Branch, and Military Construction subcommittees fund only one organization each.

Scope and Methodology

The account-level data that formed the basis for this report were extracted from automated information collected and maintained by the Office of Management and Budget (OMB). As part of its annual process to develop the President’s budget, OMB uses its MAX budget system to collect a wide variety of information from all branches of government, from executive departments and organizations, and from independent agencies. We obtained MAX data for the fiscal year 1996 budget, which included the current year 1995 estimates used in this report. Although we did not independently verify the extracted data for each budget account, we reconciled total budget authority and certain data from a judgmentally selected subset of accounts to the published Budget of the U.S. Government, Fiscal Year 1996—Appendix.

To define a universe of budget accounts, we extracted current year 1995 estimates of gross budgetary resources from the 1996 budget data. Gross budgetary resources are equivalent to gross budget authority given in the current year and available for obligation from prior years, net of transfers out, enacted rescissions, and statutory limitations on the use of authority.Any regular account reporting such resources was extracted and compiled into a separate database we used for this project. We verified our approach with OMB to ensure that we were accurately identifying and collecting budgetary data consistent with the concept of gross budgetary resources.

We chose gross budgetary resources as the operational definition of a budget account for two reasons. First, it is a concept that fulfills a wide variety of federal budget needs, from congressional oversight and appropriations to program management. Second, this definition ensured the largest possible universe of accounts with available budget authority for our study. In effect, this approach caused a selection of all budget accounts which had available and enacted spending authority and thus could be the source of federal commitments (or obligations) during fiscal year 1995.

Budget authority is heterogeneous in nature. It is provided in many different forms, covers many different time periods, and reflects congressional expectations ranging from indefinite authority that may never be used (such as borrowing authority) to definite authority which generally is expected to be outlayed in the current year (such as current appropriations). As a result, it is not additive, either across programs or organizations for a specific year or across a series of years for one program or organization. However, even with this qualification, we have aggregated budgetary resources in this report, as OMB does in its annual Historical Tables. Just as OMB recognizes the need for historical data on this subject, we recognize a comparable need for current data to express the totality of current obligational authority.

For each account reporting gross budgetary resources, we extracted a variety of information from the OMB MAX system.

To determine the federal organization, we extracted the agency code for each account. In the analyses contained in this report, we identify the major branches and organizations that are separately presented in the President’s budget. Other entities listed as “other independent agencies” in the budget are separately identified in specific analyses in this report when the entity represents a significant number of accounts and/or budgetary resources. Thus, the actual federal organizations listed in analyses based on appropriations subcommittees will differ slightly from those used in other analyses.

To determine the congressional decision-making structure, we extracted the appropriations bill originating subcommittee code for each account. The MAX system indicates both the spending jurisdiction (appropriations or authorizing committee) and the specific appropriations subcommittee associated with each authority action for each account. For analyses in which appropriations subcommittee was a variable, only accounts (and resources within those accounts) for which a specific appropriations subcommittee took action are included. In addition, because the MAX system does not indicate the appropriations subcommittee associated with budgetary resources available from prior years, analyses involving appropriations subcommittees and resource types exclude any budgetary resources available from prior years. Therefore, the universe of accounts and budgetary resources for analyses involving appropriations subcommittees is smaller than the universe used in the remainder of this report.

To comment on the mission(s) addressed by the budgetary resources of an account, we extracted budget function information. The budget function classification system describes 18 broad areas of national need and was developed to provide a coherent and comprehensive basis for analyzing and understanding the budget. In some cases, the budgetary resources of a single account may be coded to multiple functions. In these cases, we assigned the account to the budget function which received the majority of the account’s budget authority in fiscal year 1995. However, budgetary resources in multi-function accounts were allocated to each of the functions according to the distribution of budget authority in the account.

To determine the type of budgetary resources available to an account, we aggregated data from the OMB MAX system into four components: prior year authority, current year authority, permanent authority, and offsetting collections. Prior year authority reflects the balances of budget authority from previous years that remain available for obligation. Current authority is budget authority provided in fiscal year 1995 appropriations acts, while permanent authority is provided in standing authorizing legislation. Offsetting collections represent authority that results from the receipt of collections from other government accounts or collections from the public that are of a business-type or market-oriented nature. Offsetting collections are usually a form of permanent authority. However, in this report, we segregated offsetting collections because the cyclical or business-type nature of such authority differs from other permanent authority.

To determine the extent of restrictions associated with the resources within an account, we extracted fund type information from the OMB MAX system. All governmental activities are financed through federal funds or trust funds. Federal funds are further separated into (1) general funds or special funds, to distinguish unrestricted receipts from those that are earmarked for a specific purpose, and (2) public enterprise funds or intragovernmental revolving funds, to distinguish between receipts arising from a cycle of business-type operations from the public or governmental organizations. Although trust funds are segregated into revolving and nonrevolving funds, for this report, we have aggregated both into a single trust fund category.

We computed median accounts, in terms of budgetary resources, to determine representative account sizes for federal mission, federal organization, appropriations subcommittee, and fund type. Statistical medians are particularly useful when wide variations exist across multiple dimensions. Unlike other statistical measures of central tendency (for example, averages), medians are not influenced by a few extremely large or small values and thus yield a more representative account size. We displayed ranges of account size with the median to illustrate variability.

To describe the predominant interests of the Congress in enacting an account, we defined four orientations—object, organization, process, and program. These orientations were derived from a literature search which focused on the key events or developments associated with federal budgeting practices and are not directly associated with a particular data element in the OMB MAX system. Using the definitions we developed for each of these orientations, we reviewed each of the accounts in three judgmentally selected organizations and all accounts with more than $1 billion and less than $1 million in resources. To aid in assigning the accounts to an orientation, we reviewed the account’s title, statutory language, narrative statement, and budget presentations. Many accounts possess aspects which made assignment to a single orientation very difficult and somewhat arbitrary. Thus, the assignments presented in this report should be seen as suggestive or indicative, rather than definitive.

Lastly, to develop historical and anecdotal data on the federal budget account structure, we performed literature searches and conducted interviews with budget specialists in academia, OMB, the Congressional Research Service, and the Congressional Budget Office. We also reviewed written documents produced by OMB, the National Performance Review, and the Federal Accounting Standards Advisory Board.

Our work was performed in Washington, D.C., from April 1995 through May 1995.

Major Contributors to This Report

Accounting and Information Management Division, Washington, D.C.

Selected Bibliography

GAO Products

Managing for Results: Strengthening Financial and Budgetary Reporting (GAO/T-AIMD-95-181, July 11, 1995).

Government Restructuring: Identifying Potential Duplication in Federal Missions and Approaches (GAO/T-AIMD-95-161, June 7, 1995).

Budget Function Classification: Agency Spending by Subfunction and Object Category, Fiscal Year 1994 (GAO/AIMD-95-116FS, May 10, 1995).

Budget Function Classification: Agency Spending and Personnel Levels for Fiscal Years 1994 and 1995 (GAO/AIMD-95-115FS, April 11, 1995).

Budget Function Classification: Relating Agency Spending and Personnel Levels to Budget Functions (GAO/AIMD/GGD-95-69FS, Jan. 30, 1995).

Management Reform: Implementation of the National Performance Review’s Recommendations (GAO/OCG-95-1, Dec. 5, 1994).

Budget Object Classification: Origins and Recent Trends (GAO/AIMD-94-147, Sept. 13, 1994).

Management Reform: GAO’s Comments on the National Performance Review’s Recommendations (GAO/OCG-94-1, Dec. 3, 1993).

Budget Issues: Assessing Executive Order 12837 on Reducing Administrative Expenses (GAO/AIMD-94-15, Nov. 17, 1993).

Budget Issues: Financial Reporting to Better Support Decision-making (GAO/AFMD-93-22, June 1993).

A Glossary of Terms Used in the Federal Budget Process (GAO/AFMD-2.1.1, Jan. 1993).

Budget Issues: The Use of Spending Authority and Permanent Appropriations is Widespread (GAO/AFMD-87-44, July 17, 1987).

Other Publications

Caiden, Naomi. “Guidelines to Federal Budget Reform.” Public Budgeting and Finance, Vol. 3, Winter 1983, pp. 4-22.

Caldwell, Kenneth S. “The Accounting Aspects of Budgetary Reform: Can We Have Meaningful Reform Without Significant Changes in Traditional Accounting Practices?” Governmental Finance, Vol. 7, Aug. 1978, pp. 10-17.

The Commission on Organization of the Executive Branch of the Government (“The Hoover Commission”). Budgeting and Accounting, Washington, D.C.; Feb. 1949, pp. 12-13.

The Commission on Organization of the Executive Branch of the Government (“The Hoover Commission”). Budget and Accounting: A Report to the Congress, Washington, D.C.; June 1955.

Cothran, Dan A. “Entrepreneurial Budgeting: An Emerging Reform?” Public Administration Review, Vol. 53, No. 5, Sept./Oct. 1993, pp. 445-454.

Doost, Roger K. “The Importance of Budget Execution in Governments.” The Government Accountants Journal, Vol. 35, No. 1, Spring 1986, pp. 1-7.

Draper, Frank, and Bernard Pitsvada. “Limitations in Federal Budget Execution.” The Government Accountants Journal, Vol. 30, No. 3, Fall 1981, pp. 15-25.

Ehlers, Gerd. “The German System of Budgetary Control.” An unpublished paper dated May 20, 1994.

Federal Accounting Standards Advisory Board. Managerial Cost Accounting Concepts and Standards for the Federal Government (Draft Statement), May 1995.

Goldman, Frances, and Edith Brashares. “Performance and Accountability: Budget Reform in New Zealand.” Public Budgeting and Finance, Vol. 11, No. 4, Winter 1991, pp. 75-85.

Grizzle, Gloria A. “Does Budget Format Really Govern the Actions of Budgetmakers?” Public Budgeting and Finance, Vol. 6, No. 1, Spring 1986, pp. 60-70.

Jefferys, Marcie and Anne Kelly. “Issues in Program Budgeting.” Public Budgeting and Finance, Vol. 11, No. 4, Winter 1991, pp. 86-91.

Joyce, Philip, G. “The Reiterative Nature of Budget Reform: Is There Anything New in Federal Budgeting?” Public Budgeting and Finance, Vol. 13, No. 3, Fall 1993, pp. 36-48.

Keith, Robert, and Edward Davis. “Congress and Continuing Appropriations: New Variations on an Old Theme.” Public Budgeting and Finance, Vol. 5, No. 1, Spring 1985, pp. 97-100.

Kettl, Donald F. “Expansion and Protection in the Budgetary Process.” Public Administration Review, Vol. 49, May/June 1989, pp. 231-239.

Lazarus, Steven. “Planning-Programming-Budgeting Systems and Project PRIME,” Planning Programming Budgeting: A Systems Approach to Management. Chicago: Markham Publishing Co., 1968, pp. 358-370.

McKean, Roland N. and Melvin Anshen. “Limitations, Risks, and Problems with PPB,” Planning Programming Budgeting: A Systems Approach to Management. Chicago: Markham Publishing Co., 1968, pp. 337-357.

Office of the Vice President. From Red Tape to Results: Creating a Government That Works Better & Costs Less—Report of the National Performance Review. Washington, D.C.; Sept. 1993. —. From Red Tape to Results: Creating a Government That Works Better & Costs Less—Mission-Driven, Results-Oriented Budgeting, Accompanying Report of the National Performance Review. Washington, D.C.; Sept. 1993.

Pitsvada, Bernard T. “The More It Changes, The More It Stays the Same: The Dilemma of the U.S. Budget.” The Government Accountants Journal, Vol. 40, No. 3, Fall 1991, pp. 48-54.

Public Law 103-62, Government Performance and Results Act of 1993, 31 U.S.C. section 1105(a)(29).

Premchand, A. Governmental Budgeting and Expenditure Controls: Theory and Practice. Washington, D.C.: International Monetary Fund, 1983.

Rubin, Irene S. “Who Invented Budgeting in the United States?” Public Administration Review, Vol. 53, No. 5, Sept./Oct. 1993, pp. 438-444.

Schick, Allen. Budget Innovation in the States. Washington, D.C.: Brookings Institution, 1971. —. Congress and Money: Budgeting, Spending and Taxing . Washington, D.C.: Urban Institute, 1980. —, editor. Perspectives on Budgeting . Washington, D.C.: American Society for Public Administration, 1987. —. Systems Politics and Systems Budgeting . Washington, D.C.: Brookings Institution, 1969.

Sorber, Bram. “Performance Measurement in the Central Government Departments of the Netherlands.” Public Productivity and Management Review, Vol. 17, No. 1, Fall 1993, pp. 59-68.

Staats, Elmer. “Improving the Analytical Framework for Budgetary Decision-Making,” Toward a Reconstruction of Federal Budgeting. New York: The Conference Board, 1983, pp. 65-71.

Stewart, Charles, III. “Does Structure Matter? The Effects of Structural Change on Spending Decisions in the House, 1871-1922,” American Journal of Political Science, Vol. 31, Aug. 1987, pp. 584-605.

Thompson, David. “Budgetary Structures in Developing Countries,” Journal of Administration Overseas, Vol. 19, No. 4, Oct. 1980, pp. 250-261.

U.S. Bureau of Land Management. “The President’s Proposed FY95 Budget Request for the Bureau of Land Management: An Overview,” Washington, D.C.: 1994.

U.S. Congress, Senate Committee on Governmental Affairs. Government Performance and Results Act of 1993, 103rd Congress, 1st Session, S. Rept. 103-58, June 16, 1993.

Weiss, Edmond H. “The Fallacy of Appellation in Government Budgeting.” Public Administration Review, Vol. 34, No. 4, July/Aug. 1974, pp. 377-379.

Wildavsky, Aaron. “A Budget for All Seasons? Why the Traditional Budget Lasts.” Public Administration Review, Vol. 38, Nov./Dec. 1978, pp. 501-509.

Wooldridge, Blue, and Claire L. Alpert. “Identifying Obstacles to the Implementation of Budgetary Reform in Government.” The Government Accountants Journal, Vol. 32, Summer 1983, pp. 48-54.

The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent.

U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (301) 258-4097 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.