Overview of the Budget Process 10.1. Executive budget formulation process. During budget formulation, the President establishes general budget and fiscal policy guidelines. Under a multi-year planning system, policy guidance is given to agencies for both the upcoming budget year and for the four following years and provides the initial guidelines for preparation of agency budget requests. The budget formulation process begins not later than the spring of each year, at least nine months before the budget is transmitted. Executive branch agencies prepare their budget requests based on the guidelines provided by the President through the Office of Management and Budget (OMB) and the detailed instructions on preparation of budget estimates provided in this Circular. | Last year, the Executive branch budget review process was expanded |to provide for greater participation of agency heads and their staff. |Building on that process, OMB is working with agency staff to identify |major issues for the upcoming budget; undertake the analysis necessary |to provide the context for decision-making; identify major options for |the fall budget review process; and develop and implement multi-year |plans for analysis of issues that will need decisions in future years. | Through the spring and summer, the process focuses on review of |program performance, as well as on ways to ensure efficient use of |government resources and successful implementation of programs and |policies. Ideas are exchanged on potential reorganization of |functions, consolidation of activities, and proposals to restructure |programs. In addition, a wide range of management practices are |explored to ensure high quality program performance, evaluation of |near- and longer-term program results, and timely assessment of the |need for policy redirection through administrative action or |legislative changes. Executive branch departments and agencies are required to submit initial budget materials to OMB beginning early in the fall, in accordance with the schedule in section 10.3. Other materials are submitted later in the fall and winter on a schedule supplied by OMB. Budget data are required for the past, current, and upcoming budget year, as well as for the four years following the budget year. In the fall, major issues and options will be prepared for consideration by the President, organized around major Administration themes and crosscutting issues. OMB will then review agency budget requests, based on Presidential priorities, program performance, and budget constraints. A complete set of budget proposals will be presented to the President by early December for his approval. After the review process is completed, decisions on budget requests are passed back to the agencies. Upon receipt of final decisions for the current and budget year, agencies revise their budget requests to bring them into accord with these decisions. These final estimates are transmitted to Congress in the President's budget. In accordance with current law, the budget must be transmitted to Congress not later than the first Monday in February. The multi-year planning estimates included in the President's budget then become the starting point in planning for the budget to be transmitted to Congress the following year. 10.2. Executive and congressional budget processes. The executive budget formulation process described above is prescribed by OMB, in accordance with the Budget and Accounting Act of 1921, as amended. The following timetable highlights significant dates culminating in transmittal of the President's budget and subsequent updates of the budget. It also reflects the congressional budget procedures established by the Congressional Budget Act of 1974 and certain requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as they both were amended by the Budget Enforcement Act of 1990 (BEA). ACTION TO BE COMPLETED ---------------------------------------------------------------------- The Executive The Congressional Budget Process Timing Budget Process ------------------------ -------------------- ------------------------ |Agencies subject to September 9 |executive branch review |submit initial budget |request materials. Fiscal year begins. October 1 Fiscal year begins. Agencies not subject to October 15 executive branch review submit budget request materials. 10 days after end of CBO issues its final session sequester report. OMB issues its final 15 days after end of sequestration report;\1\ session President issues sequestration order, if necessary. 30 days later Comptroller General issues compliance report. Legislative branch and November-December the judiciary submit budget request materials. 5 days before CBO issues its President's budget sequestration preview transmittal report President transmits the Not later than the budget to Congress, first Monday in including OMB February sequestration preview report. February 15 Congressional Budget Office reports to the Budget Committees on the President's budget. Within 6 weeks of Committees submit views President's budget and estimates to Budget transmittal Committees. |OMB issues budget April |planning guidance. April 1 Senate Budget Committee reports concurrent resolution on the budget. April 15 Congress completes action on concurrent resolution. May 15 House may consider appropriations bills in the absence of a concurrent resolution on the budget. June 10 House Appropriations Committee reports last appropriations bill. June 15 Congress completes action on reconciliation legislation. June 30 House completes action on annual appropriations bills. After completion of CBO provides estimate of action on the impact of discretionary, legislation as soon as direct spending, or practicable. receipts legislation. President transmits the July 15 Mid-Session Review, updating the budget estimates. |OMB and agencies Late June-early |discuss budget issues August |and options in |preparation for fall |budget review and |decision making. August 15 CBO issues its sequestration update report. OMB issues its August 20 sequestration update report. ---------------------------------------------------------------------- \1\A "within session" sequestration is triggered within 15 days after enactment of appropriations that are enacted after the end of a session for the budget year and before July 1, if they breach the category spending limit for that fiscal year. A "lookback" reduction to a category limit is applied for appropriations enacted after June 30th for the fiscal year in progress that breach a category limit for that fiscal year and is applied to the next fiscal year. Note.--OMB also reports to Congress on the impact of enacted legislation and provides an explanation of any differences between OMB and CBO estimates, within 5 calendar days of enactment of legislation. ---------------------------------------------------------------------- 10.3. Preparation and timing of budget submissions. This Circular provides instructions on the preparation of agency submissions required for OMB and Presidential review of budget estimates and for formulation of the President's budget. Although the main focus of the Circular is on the preparation of the budget document entitled "Detailed Budget Estimates" and the related data base, the agency submissions also provide the basis for preparation of the rest of the budget, which is prepared centrally by OMB, based on data submitted in response to this Circular. The required budget materials are submitted to OMB in four phases (see sections 10.3(a)-(d)). Specific deadlines for initial submission materials are indicated below. A general indication of the timing of submissions for computer, print, and additional materials is also provided; specific submission dates for these materials will be provided in a schedule supplied separately by OMB. A table in section 10.4 lists the materials required for each phase of the budget submission. Agencies may be required by their OMB representative to provide certain data already available in computer format (e.g., floppy disk or computer tape) in that form. (a) Initial submission.--This submission consists of budget justification and other materials, as described in section 10.4. OMB may also require that additional materials be included in this submission. ---------------------------------------------------------------------- Department/Agency Due Date ---------------------------------------------------------------------- |Cabinet and other agencies subject to September 9. |executive branch review and the District |of Colombia. ---------------------------------------------------------------------- Executive branch agencies not subject to October 15. executive branch review. ---------------------------------------------------------------------- Legislative branch and the Judiciary. In accordance with the timetable to be supplied by OMB. ---------------------------------------------------------------------- | In addition, beginning September 9th agencies will be required to |provide information on their budget requests by account and by Budget |Enforcement Act category (i.e., budget authority and outlays by BEA |category) through the MAX budget system (MAX). The MAX data base will |be locked by September 20th for reporting data for this purpose. |Additional guidance on this requirement will be provided later. (b) Computer materials.--These materials consist of data required for MAX, the computer system used to collect and process information needed to prepare the budget. Agencies with computer access to MAX are required to use this system to submit data. Other agencies are required to provide the necessary data by marking up computer reports provided by OMB. These data are generally submitted to OMB after passback of initial budget decisions. However, agencies should be prepared to provide baseline estimates in October or after enactment of appropriations bills or a continuing resolution. Agencies may also be required by their OMB representative to submit past year data for certain MAX schedules by November 15. Further discussion of the MAX system is found in section 20, "Introduction to computer materials." (c) Print materials.--These are materials from which the text and text tables printed in the portion of the budget entitled "Detailed Budget Estimates" are prepared. In addition, the printing process provides for the electronic generation of MAX data from OMB to the Government Printing Office (GPO) to produce most of the budget schedules in this portion of the budget. These materials are generally submitted after budget decisions are made. Information on the printing process is contained in section 30, "Explanation of print materials." (d) Additional materials.--Some additional materials are required and are generally submitted after budget decisions are made. (e) Conforming to budget decisions.--When an agency is informed of budget decisions or otherwise required by OMB, all print and computer materials will be revised immediately to reflect the action taken. Specific approval must be obtained from OMB prior to submitting materials on a basis other than budget decisions. All changes that affect other appropriation or fund accounts (such as the amount of transfers) must be coordinated with those responsible for the budget submission for such accounts. (f) Relationship of submission materials to the budget document.--The following chart describes the relationship of budget submission materials to the budget document transmitted to Congress. Insert Chart: BUDSUM.PCX 10.4. Components of the budget submission. The required budget materials for the initial and subsequent budget submissions are listed below. These materials will be submitted in accordance with the detailed instructions in the sections indicated and the arrangements made by OMB representatives. In addition, the listing indicates those requirements that apply only to certain agencies or under certain circumstances. Budget submission requirements vary depending on the type of account involved. Section 11.4 includes a table describing requirements for general and special fund accounts, revolving funds, management funds, and trust non-revolving funds. SUBMISSION REQUIREMENTS ---------------------------------------------------------------------- Applicability of reporting requirements (Requirements Section Exhibit Components of the apply to all agencies number number budget submission unless otherwise noted.) ---------------------------------------------------------------------- INITIAL SUBMISSION Materials are due to OMB according to the schedule specified in section 10.3(a), unless otherwise noted below. ---------------------------------------------------------------------- 15.1 -- Summary and highlight statement\1\ ---------------------------------------------------------------------- 15.2 15A Budget justifications\1\ ---------------------------------------------------------------------- 15.4 -- Information on financial management\1\ ---------------------------------------------------------------------- 15.5 15B Rental payments for Agencies with rental space and land payments in excess of $1 million. ---------------------------------------------------------------------- 15.7 -- Information on motor Agencies, as defined in 5 vehicles U.S.C. 105, that operate at least 300 motor vehicles. ---------------------------------------------------------------------- 15.9 -- Information on receipt Agencies with receipt estimates account data. ---------------------------------------------------------------------- 15.10 Information on Agencies designated to Inspectors General for establish an Office of designated federal Inspector General in the entities Inspector General Act Amendments of 1988. ---------------------------------------------------------------------- 40.2 40A Report on resources for Agencies covered by the financial management Chief Financial Officers activities\1\ Act. ---------------------------------------------------------------------- 41.1 41 Information on Agencies taking corrective high-risk areas actions related to high-risk areas. ---------------------------------------------------------------------- 45.2 45A,B,C Information on drug Agencies with budget control programs authority or outlays for drug control programs that exceed $500,000 in any year. ---------------------------------------------------------------------- COMPUTER AND PRINT MATERIALS\2\ ---------------------------------------------------------------------- 21, 23 23 Analysis of budget authority and outlays (MAX schedules A and S)\1\ Receipts estimates (MAX schedules K and R)\1\ ---------------------------------------------------------------------- 25.3, 25.4 -- Character classification (MAX schedule C)\1\ ---------------------------------------------------------------------- 32, 35 32A-B Program and financing 33A,C,F and object class data 35A-B (MAX schedules P and O)\1\ ---------------------------------------------------------------------- 33.6-33.12 33B,D,G Federal credit data Agencies with credit (MAX schedules G, H, U, programs. Y, and W)\1\ ---------------------------------------------------------------------- 36.1 -- Personnel summary (MAX schedule Q)\1\ ---------------------------------------------------------------------- 36.3 33E,H Statement of Agencies with revolving 36A,B operations; balance funds that conduct sheet\1\ (MAX schedules business-type activities, E and F) where required by the Government Corporation Control Act or other acts, credit financing accounts, and all Government-sponsored enterprise funds. ---------------------------------------------------------------------- 36.5 -- Status of funds\1\ Agencies with major trust (MAX schedule J) funds and certain other accounts as specified. ---------------------------------------------------------------------- 36.6 -- Data on unavailable Agencies with unavailable collections (MAX special and trust fund schedule N)\1\ receipts or offsetting collections. ---------------------------------------------------------------------- 36.7 -- Budget plan (MAX DOD-Military only. schedule D)\1\ ---------------------------------------------------------------------- PRINT MATERIALS ONLY:\2\ ---------------------------------------------------------------------- 31 31A,B Appropriations language ---------------------------------------------------------------------- 34 -- Narrative statements on program and performance\1\ ---------------------------------------------------------------------- 36.4 -- Schedule on the status Agencies with start of year of contract authority or end of year balances of contract authority upon request by OMB. ---------------------------------------------------------------------- ADDITIONAL INFORMATION ---------------------------------------------------------------------- 15.6 -- Information on grants Agencies with federal to State and local grants to State and local governments governments. ---------------------------------------------------------------------- 15.8 15C Information on Cabinet agencies, the Arms consulting services Control and Disarmament Agency, the Agency for International Development, the Environmental Protection Agency, the Federal Deposit Insurance Corporation, the General Services Administration, the National Aeronautics and Space Administration, the Office of Personnel Management, the Resolution Trust Corporation, and the Small Business Administration. ---------------------------------------------------------------------- 23.3 -- Impact on the baseline estimates of major regulations, management initiatives, administrative actions, etc. Bridge between current and budget year baseline estimates. ---------------------------------------------------------------------- 33.5 33I Development of risk Agencies with credit categories programs. ---------------------------------------------------------------------- 43.2 43 Agency-wide summary on Agencies with obligations obligations for of more than $50 million information for information technology technology\1\ activities. ---------------------------------------------------------------------- 44.3 44A General R&D exhibits\1\ ---------------------------------------------------------------------- 44.3 -- Crosscutting R&D Agencies with R&D levels exhibits\1\ exceeding $1 million for individual crosscutting areas specified by OMB. ---------------------------------------------------------------------- 44.3 44B Technology transfer Agencies with R&D levels exhibits\1\ exceeding $10 million and technology transfer levels exceeding $100,000. ---------------------------------------------------------------------- \1\Previous requirements have changed or new requirements have been added. \2\Government-sponsored enterprises should include data in MAX schedules A, F, G, H, O, P, and Y and provide applicable print materials. ---------------------------------------------------------------------- 10.5. Requirements following budget transmittal. After transmittal of the President's budget, OMB requires submission of additional materials in the following situations. (a) Supplemental requests and budget amendments.--When circumstances warrant, supplemental requests or budget amendments may be proposed. Information on preparation of supplementals and amendments is found in section 61. (b) Rescission proposals.--The Impoundment Control Act of 1974 (Public Law 93-344), as amended, requires the President to transmit a special message to Congress whenever a rescission of budgetary resources is proposed. (c) Deferrals.--The Impoundment Control Act of 1974 (Public Law 93-344), as amended, also requires that special messages be transmitted to Congress when funds are withheld temporarily from obligation. Supplementary messages are transmitted to Congress when information contained in a special message concerning a rescission proposal or deferral transmitted previously is revised. Instructions on agency reporting procedures and required submissions to OMB are provided in Part VII of OMB Circular No. A-34. (d) Mid-Session Review.--The President is required by law to send a report to Congress updating budget estimates on or before July 15. This report contains revised budget estimates resulting from changes in economic assumptions, Presidential initiatives, and completed congressional actions that have occurred since transmittal of the budget. Instructions on preparation of estimates for the Mid-Session Review will be issued separately. 10.6. Additional materials required for Congress. Agencies are reminded of the requirement to report in agency budget justifications to the Congress on implementation of plans to convert to the metric system, as prescribed by Public Law 100-418. Agencies are required to identify funds requested for energy conservation measures in agency budget justifications to the Congress, pursuant to Public Law 100-615. Agencies are also reminded that all proposed budget justification materials prepared for Congress must be submitted to OMB for clearance prior to transmittal to Congress (see section 12.9).