Through the budget system, the President and Congress determine the allocation of resources among the agencies of the federal government. OMB, as part of the Executive Office of the President, guides the annual budget process, makes decisions on executive agencies’ budgets, aggregates submissions for departmental components, and submits the consolidated document for the executive branch as the President’s Budget Request to Congress. OMB issues guidance to federal agencies through OMB Circular A-11, which provides instructions for submitting budget data and materials, as well as criteria for developing budget justifications. Within DOJ, the Justice Management Division issues additional annual budget development guidance to DOJ’s components, including BOP, usually about 1.5 years before the fiscal year begins for the budget cycle. JMD budget staff (1) collect and analyze all of the components’ budget requests, taking into consideration department-wide policy priorities and OMB guidance; (2) coordinate with DOJ policy offices; and (3) secure approval and submit the Attorney General’s budget submission to OMB. Key steps in this process are shown in figure 1. When developing its budget justification, BOP estimates costs for budget accounts using three steps, as described below. First, BOP estimates cost increases for maintaining the current level of services for operations as provided in the prior year’s enacted budget. These include costs to address mandatory staff pay raises and benefit increases, inmate medical care, and utilities. BOP analyzes historical obligations from the past 5 years to identify average annual operating cost increases. BOP records its obligations in FMIS—one of DOJ’s financial accounting and reporting systems. According to BOP officials, FMIS is BOP’s primary tool for cost reporting and budget execution. BOP also considers economic indicator information to estimate general inflationary cost increases using data from the Bureau of Labor Statistics’ Consumer Price Index, among other sources. Second, BOP projects inmate population changes for the budget year For example, for the fiscal year 2014 and for 9 years into the future. budget justification, BOP projected a net growth in its inmate population of 5,400 (2.4 percent) for fiscal years 2013 and 2014. Third, BOP estimates costs to house the projected number of new inmates, including building and facility requirements. According to BOP, the increasing inmate population is the primary driver of new service costs. BOP also identifies and estimates costs for new initiatives, such as the opening of a new BOP facility, by reviewing the proposals submitted by its divisions and regional offices, as well as historical data on costs for implementing such initiatives. In November 2009, we found that BOP’s methods for cost estimation largely reflected best practices outlined in the GAO Cost Estimating and Assessment Guide. We concluded that for fiscal year 2008, BOP followed a well-defined process for developing a mostly comprehensive, well-documented, accurate, and credible cost estimate, and we made recommendations to further improve BOP’s process. Specifically, we recommended that BOP (1) analyze the extent to which operations costs could vary because of changes in key cost assumptions and (2) improve documentation of calculations used to estimate its costs. BOP concurred with the recommendations and took appropriate actions to address them as noted above. In November 2009, we also reported on various challenges that BOP faced, including prison crowding levels. For example, we found that from fiscal years 2000 through 2009, BOP’s total inmate population level increased by 44 percent—from 145,125 to 209,027. In November 2009, we also reported that BOP estimated its total inmate population would continue to increase by about 4,500 inmates per year over the next decade. In September 2012, we reviewed the growth in BOP’s population and found that the 9.5 percent population growth from fiscal years 2006 through 2011 exceeded the 7 percent increase in its inmate capacity, and reported that BOP projects continued population growth. In our work related to budget reviews across the federal government, we have reported that an agency’s budget justification may be the single most important policy document because it depicts and reconciles policy objectives, and we have identified the potential to enhance the transparency of agencies’ budget justifications by providing additional details and information. the U.S. Department of Veterans Affairs’ (VA) health care budget, we concluded that federal agencies’ congressional budget justifications should be transparent—that is, they should be clear and easy to understand—in part because Congress relies on this information to make resource allocation decisions and conduct oversight. GAO-10-687R. concluded that in order to facilitate decision making, information needs to be clear and organized in a way that is meaningful to decision makers. We recommended, among other things, that VA further consult with congressional decision makers to determine what detailed information related to its appropriations accounts should be included—and how—in its congressional budget justification. VA concurred with the recommendations and has begun taking actions to address them. BOP’s largest account—its S&E account— is composed mainly of costs associated with Inmate Care and Programs and Institution Security and Administration, both of which have grown steadily since 2008, predominantly because of increases in prison populations, which are the primary cost driver of BOP’s budget. The other two PPAs in the S&E account are associated with the care and custody of federal offenders in contract facilities and maintenance and administration. BOP’s budget justification for fiscal year 2014 reflected the President’s budget request of a total of $6.9 billion, including $6.8 billion for its S&E account. Figure 2 shows that the President’s budget request for BOP’s S&E account has increased from fiscal years 2008 through 2014. BOP’s budget justification includes its proposed use of funds for each account by PPA. BOP’s budget for S&E costs consists of four PPAs, and as shown in figure 3, the Inmate Care and Programs PPA, and Institution Security and Administration PPA, and Contract Confinement PPA accounted for about 97 percent of the President’s 2014 budget request for BOP’s S&E account, according to BOP’s budget justification. Below is a description of the four PPAs that compose BOP’s S&E account. The Inmate Care and Programs PPA covers the operational costs of functions directly related to providing inmate care, including inmate food, medical care, drug treatment, and psychological services; education and vocational training; institutional and release clothing; welfare service; and transportation. For example, the budget justification for fiscal year 2014 proposes the use of funds to help address increases in chronic medical care for inmates. Additionally, the budget justification for fiscal year 2014 proposes the use of funds to expand evidence-based treatment practices to treat drug offenders and reduce recidivism. The Institution Security and Administration PPA covers costs associated with institution security, administration, maintenance, and staff training. These costs include salaries for correctional officers assigned to every BOP institution and expenses for facility maintenance and utilities. The Contract Confinement PPA covers costs associated with BOP inmates in contract care and costs associated with management and oversight of contract facilities and residential reentry centers as well as the National Institute of Corrections. The Management and Administration PPA covers costs associated with general administration and provides funding for the executive staff as well as headquarters and regional office program managers in the areas of budget development and execution, financial management, procurement and property management, human resource management, inmate systems management, safety, legal counsel, research and evaluation, and systems support. As shown in figure 4, while the amounts reflected for BOP’s Management and Administration PPA have remained relatively constant, the Inmate Care and Programs and Institution Security and Administration PPAs, and to a lesser extent the Contract Confinement PPA, have grown steadily since 2008, predominantly because of increases in prison populations which are the primary cost driver of BOP’s budget. In addition to the budget justification broken down by PPA dollar amounts, the budget justification provides a summary of increases (i.e., improvements) and decreases (i.e., offsets) to the current year’s appropriation.2014, BOP described the $35.1 million net increase (1.2 percent) in the Institution Security and Administration PPA from fiscal year 2013 in terms of three increases and two decreases, as shown in table 1. Further, BOP described the dollar amounts associated with the $1.7 million (0.07 percent) net increase in the Inmate Care and Programs PPA from fiscal year 2013 in terms of five increases and two decreases. We found that BOP is collecting more detailed quantitative cost data on the components that constitute each PPA, which could be useful to congressional decision makers when reviewing BOP’s budget justification. In accordance with departmental and OMB guidance, BOP’s budget justifications summarize amounts by PPA, so BOP is not required to provide additional funding data below the PPA level in its budget justification. Providing more comprehensive information could help clarify BOP’s proposed spending on specific categories and subcategories reflected in its budget justification. For example, BOP’s budget justification for fiscal year 2014 included $2.5 billion for the Inmate Care and Programs PPA element and included narrative information for categories such as Medical Services, Food Service, Education and Occupational Training, Psychology Services, and Religious Services, as well as narrative summaries for various subcategories, but did not include proposed funding amounts for these categories. Our analysis shows that this additional information can be useful in identifying trends and cost drivers that may affect future costs, which could be particularly helpful given the 33 percent growth in BOP’s budget request from fiscal years 2008 through 2014. Our prior work has identified factors driving BOP’s cost increases in specific categories that constitute each PPA.