Justifications and Other Reporting Requirements 15.1. Summary and highlight statement. A summary and highlight statement (in the form of a transmittal letter from the head of the agency) will cover the budget submission of each agency. This narrative will summarize the highlights of the agency's budget and related major legislative proposals, identifying: | --the broad policies and strategies proposed and the total amounts | of discretionary and mandatory budgetary resources and FTE | requested; | --the relationship of the policies, strategies, and resources | requested to the planning guidance for budgetary resources and for | FTE provided by OMB; | --significant proposed differences, if any, from current | Administration policies; | --the most important program performance indicators and performance | goals, including those that are positive and negative with respect | to performance and which are the basis for the major proposed | policies; | --the major management initiatives that will be used to monitor and | evaluate program efficiency and effectiveness; | --any significant proposals for changes in the current year budget, | and the relationship of such changes to the budget year and | outyear requests; and | --any significant proposals or changes in spending patterns for the | five to ten year period beyond the budget year, and their | relationship to outyear planning guidance and the policies | proposed for the current and budget year. Agencies must submit a listing of the amounts of budget authority and outlays and FTE requested for each fiscal year covered by the budget (see section 15.2(a)(3)). This list will be itemized by account showing separately proposed supplementals, pending supplementals, rescission proposals, and legislative proposals. Offsetting receipts will be deducted to arrive at the net amount of the agency request (see section 14.2(d)). Agencies are also required to submit compliance with stated policies required under sections 11.7 (responsibilities in reporting data), 12.3 (basis for the estimates), 12.4 (required consultations), and 12.5 (estimates relating to specific objects of expenditure). 15.2. Justification of programs and financing. A written justification will be provided for each budget submission. The materials that generally are required are described in subsection (a). Specific informational requirements and formats will be |determined in consultation with OMB representatives. It is expected |that each agency will have agreed with OMB representatives on the form |and specific content of the budget submission in the spring and summer |preceding the budget submission. | The agency request should be consistent with the funding levels |included in policy guidance. If the request is not consistent with |policy guidance, the agency must provide a summary display of what its |budget request would be at the policy guidance levels and the reasons |why a budget request consistent with the guidance is not appropriate. |In addition, agencies may be asked by the OMB representatives |responsible for review of the agency's budget submission to identify |and discuss the implications of other funding levels. The justification should be prepared in concise, specific terms and cover all programs and activities of the agency. Tables, charts, and graphs may be used in lieu of or to supplement text. Materials should be prepared in a manner designed to provide all of the information which the agency and OMB have agreed to be necessary for OMB to understand and evaluate the agency's request and make its determinations. (a) Materials required.--The justification materials normally should include a comparison of total program benefits and total program costs, using quantitative, objective data to the maximum extent possible, as well as qualitative or judgmental material, a comparison of the marginal benefits and the marginal costs associated with the additional funds or reduced funding proposed, and supporting |information. The supporting information should take into account |agency and outside (e.g., think tank, university, interest groups) |program evaluations and related analytic studies, IG, and GAO and |other congressional entity analyses, whether or not they agree with |the proposed policy. | Performance indicators and performance goals.--Where appropriate, |performance indicators and performance goals should be included to |explain major program issues and financial requirements. Performance |indicators should be presented in terms of outputs or outcomes and |performance goals should be provided for short-term as well as for |long-term assessment of program performance. Justifications should |emphasize outputs that reflect the products and services that are |provided by the program and delivered or used outside the program, as |opposed to process alone. Justifications should also emphasize |outcomes that reflect the results of a program. For example, a |justification tied only to increasing the numbers of individuals |served is of little consequence without evidence of the cost and the |outcome, consistent with program goals. | If the agency has not developed performance measurement systems that |provide this kind of information, other types of data may be used to |indicate performance. Without performance indicators, performance |goals, or some other type of performance data, however, agency |requests for significant funding to continue or increase an on-going |program are difficult to justify. If a new program lacks performance |indicators and performance goals, the justification should indicate |how the indicators, goals, and data collection are being developed; |the timetable for their review with OMB representatives; when the data |will become available; and on what basis the agency will assess |performance of the program in the interim. | Generally, performance indicators, performance goals, and past |measures of performance should be thoroughly reviewed and their |continued applicability justified. In addition, agencies that prepare |annual financial statements should confirm, for the budget year, |continuing use of the program performance indicators used in previous |years or identify alternative indicators they plan to use. | Additional requirements for information on program evaluation; |infrastructure and grant programs; agency restructuring activities; an |analysis of resources; and a table showing the relationship of |programs to account structure are provided below. At the discretion of |the agency's OMB representative, these requirements may be modified or |alternative justification materials specified. Other materials also |may be requested by OMB representatives. | (1) Information on program evaluation.--Program evaluation is an |important aspect of program planning and monitoring, assessing |program results, and determining future funding levels. In budget |justification materials, agencies are required to provide information |on their program evaluation activities and on their program evaluation |agenda. The agenda should describe the major program evaluation |activities currently underway or planned. Agencies should consult with |their OMB representative in development of their multi-year evaluation |plans and agenda. | (2) Information on infrastructure investment and grant |programs.--Justification materials for major infrastructure investment |and grant programs should include copies of investment systematic |economic analyses of expected benefits and costs completed in |accordance with Executive Order 12893. OMB Bulletin No. 94-16 |provides additional guidance on this Executive Order, including a |listing of the accounts covered by the Order. | (3) Agency restructuring or process reengineering |activities.--Agencies should identify restructuring or process |reengineering activities resulting from proposed and current |investments in information technology that yield budgetary savings. |Justification materials should indicate how these activities allow |agencies to utilize existing resources better while improving program |management and service delivery. (4) Analysis of resources.--A tabular presentation should be used to identify the financial and personnel resources required at the program levels under consideration. Resources required should be presented for PY and CY, as well as the estimated requirements for each funding option for BY through BY+4. If current year rescissions, deferrals, or supplementals are pending or proposed, these will be identified separately. A subsidiary breakdown of such items as personnel compensation, capital outlay, or other categories of special concern may also be useful. Generally, financial data should be presented in terms of new budget authority and outlays. However, the agency's OMB representative may require additional measures, such as unobligated balances and offsetting collections. Personnel requirements will be expressed in terms of full-time equivalents (see section 13.2). FTE requests in total are expected be within OMB guidance and must be consistent with the agencies streamlining plan (as part of the Executive Branch statutory |requirement to reduce FTE by 272,900 by FY 1999). Requests for |changes to the FTE ceiling in any year must be fully justified in |terms of program management requirements, and if for an increase, must |fully document the analysis of agency-wide FTE that indicates why FTE |ought not be moved from another function to meet the identified need. | Budgetary resources and FTE requests must be described in the |context of the agency's management plan for the programs and |activities. The plan should make clear the analysis used to determine |that the resources are needed in order to accomplish program and |Administration goals, and that all opportunities for making more |efficient and effective use of resources have been explored. (5) Relationship of justification to account structure.--Where the major programs in the agency justification materials do not coincide with the budget account structure, a table will be prepared to show the relationship. This table should be arranged by program, with all relevant accounts and parts of accounts listed, showing budgetary |resources (usually budget authority and outlays) and FTE. Programs |that are mainly grants, contracts or other transfers of funds to |entities other than the agency should have related S&E accounts and |parts of accounts included, including allocations of overhead amounts. |A format for the table is illustrated by exhibit 15A. Alternate formats may be used if agreed upon by the agencies and their OMB |representative. Where helpful to explain the coverage of the table |or the relationship among accounts, a short narrative should accompany |the table. This requirement only applies to major programs and |activities. Agencies should consult their OMB representatives to |ensure that tables are only provided for appropriate activities and |unnecessary paperwork is avoided. (b) Derivation of amounts requested. Agencies should be prepared to submit information covering the following: --detailed analyses of workload, performance indicators, unit costs, productivity trends, the impact of capital investment proposals on productivity, changes in quality and timeliness of output, and demonstrated outcomes of past program activities; and --the basis for distribution of funds (i.e., formulas or principles for allocation, matching, policies regarding the awarding of loans, grants, or contracts, etc.) and data on resulting geographic distribution (e.g., by State, etc.) with identification of any issues. Productivity measurement, unit costs, and organizational performance standards should be used to the maximum extent possible in justifying staffing and other requirements. | A specific element in productivity improvement for activities of |Federal staff should be the gains planned or being realized from |streamlining, including reducing unnecessary overhead, creative use of |technology, and elimination of low priority tasks and programs. 15.3. Explanations relating to supplemental appropriation requests. When the need for a program supplemental appropriation is forecast (see section 12.2), justification material should be prepared in accordance with section 15.2. Information should be provided indicating why the request was not included in the regular estimates for the period concerned and the reasons why it is considered essential that the additional appropriation be granted during the |year. Requests for supplementals will be accompanied by proposals for |offsets to be made elsewhere in the agency for both mandatory and |discretionary resources, and must indicate related FTE savings or |requirements and appropriate financing changes. If the estimate is |approved for later transmittal (rather than in the budget), further justification of the supplemental estimate will be required when it is submitted to OMB (see section 61). The effect of requested supplementals should be shown in the appropriate portions of the justification material for the program elements affected. |15.4. Information on financial management. | | Agencies will ensure that their budget justifications provide |results-oriented information on financial management operations and |improvement initiatives in the context of the agency's mission and |programs. This discussion should include the status and plans for |financial management throughout the agency, and should represent an |integrated discussion of financial management planning and associated |resources. (Selected information on financial management resources for |agencies covered by the Chief Financial Officers (CFOs) Act of 1990 is |required by section 40.) The content should be consistent with the |government-wide strategies and initiatives discussed in this year's |Federal Financial Management Status Report and 5-Year Plan issued by |OMB. | (a) Coverage and reporting.--All agencies are required to submit the |materials prescribed by section 15.4(b). There are three exceptions to |this rule: Agencies not covered by the CFOs Act are not required to |submit the schematics, inventory, or discussion of audited financial |statements described below. | For the 23 agencies covered by the CFOs Act, the materials required |by this section will fulfill the Act's requirement that each agency |CFO prepare a plan to implement the government-wide financial |management 5-year plan. The format in which this information is |presented may be determined by the agency, unless otherwise specified |by OMB. | If a CFO believes that agency internal operations would benefit from |maintaining a separate planning document, the CFO may continue to |issue a stand-alone status report and 5-year plan. If a separate |report is prepared, it should build on the material required by |section 15.4(b) and should be consistent with agency budget estimates |for financial management. | (b) Materials required.--Agencies are required to provide the |following information related to financial management as an integral |part of their budget justification materials: | --a vision statement; | --a discussion of goals and strategies for implementing financial | management improvements; | --a discussion of the current financial management systems structure | and plans for moving to the targeted systems structure; and | --a discussion of impediments to the submission of the required | annual audited financial statements. | (1) Vision statement.--Agencies should describe concisely the CFO's |(or equivalent) vision for financial management, using as a basis the |Financial Management Vision Statement that has been adopted by the CFO |Council. | (2) Goals and strategies.--Agencies should briefly discuss how they |will achieve the goals and strategies for implementing government-wide |financial management improvement that are associated with the |Financial Management Vision Statement. This discussion should focus |on those goals and strategies that agencies determine to be |priorities, and should include examples of ongoing and proposed |initiatives. Agencies should include sufficient information on the |status of financial management activities and accomplishments to |provide a context for their plans and resource request. | (3) Financial systems structure.--Agencies should discuss their |current financial management systems structure and plans for moving to |their targeted systems structure. The scope of the financial systems |discussion should cover, at a minimum: | --core financial management systems, as described in the JFMIP Core | Financial Management Systems Requirements Document; | --financial and mixed systems critical to effective agency-wide | financial management, financial reporting, or financial control; | and | --financial and mixed systems appearing on the High Risk List in the | President's latest budget. | The financial systems discussion should include the following |information: | (A) A baseline of financial and mixed systems, including a brief | narrative assessment of major problems with current systems.--CFOs | Act agencies should include updated schematics and an updated | financial systems inventory. (A diskette containing the 1993 | inventory data to be updated has been distributed to Deputy CFOs | through a separate memorandum with detailed instructions.) | (B) The target structure for financial and mixed systems, | including a brief discussion of the agency's financial management | systems strategy.--CFOs Act agencies should include updated | schematics illustrating the systems that will exist after | implementation of planned improvements. | (C) Projects required to move from baseline to target.--Agencies | should provide a synopsis of critical projects that they are | currently undertaking or planning to bring their systems from the | current structure, as identified in the baseline, to the target | structure. | Information provided pursuant to subsections (A), (B), and (C) above |will fulfill the requirement in OMB Circular No. A-127 that agencies |prepare an annual plan for financial systems. This information should |be consistent with the information resource management plans required |by OMB Circular No. A-130 that are submitted by the agency to OMB. | (4) Audited financial statements.--CFOs Act agencies should briefly |discuss any impediments to the submission of the required annual |audited financial statements, and steps to be taken to overcome the |impediments. 15.5. Rental payments for space and land. (a) Reporting threshold.--All agencies making rental payments to GSA (formerly known as Standard Level User Charges or SLUC) or to others (e.g., other Federal agencies or commercial landlords) in excess of $1 million for space, structures and facilities, land and building services (including extra services, such as security or cleaning that agencies have requested in addition to the services provided by the basic rental charge) will provide the information described below. Other agencies will provide this information when requested by their OMB representative. (b) Materials required.--Agencies are required to submit a Work Space Management Plan and Budget Justification report (GSA Form 3530) for the agency as a whole and, where applicable, for each bureau or other subordinate organization that makes rental payments. The report consists of two sections. Section I--Work Space Management Plan will be prepared using the terms, definitions, and instructions provided in the Federal Property Management Regulations, Temporary Regulation D-75, issued by GSA. The estimates of FTE employment reported in this section must equal the FTE estimates in the personnel summary (see section 36.1). The estimates in Section II--Rent and Related Obligations Estimates (exhibit 15B) will be consistent with Section I and will be prepared in accordance with the guidelines provided below. (These guidelines have been incorporated into the instructions that accompany GSA Form 3530.) Information in Section II will be presented separately for GSA-controlled space and for space and land rented by the agency from a Federal or non-Federal source under its own legal authority or under authority delegated by GSA. For GSA-controlled space, agencies will identify the average rental rates used to estimate annual rental payments. If these average rental rates differ from the corresponding GSA-published rates by more than 5 percent, the agency will include an explanation of the differences. Agencies should prepare average work space estimates for PY through BY that are weighted to reflect the size and timing of planned increases and decreases during the year from the end-of-year square footage estimates shown in their work space management plans. Work space estimates should not include any joint use space, as defined in GSA regulations. This space is not assigned to the agency and is not included in the work space estimates in the agency's work space management plan. The total annual GSA rental amounts for each fiscal year will be computed by multiplying the average work space estimates for the year by the corresponding average rental rates. In most cases, these amounts will equal the total obligations (direct and reimbursable) reported under object class 23.1 for rental payments to GSA. However, the amounts may differ as a result of the following: --Certain agencies have been or are subject to congressional limitations on the rent GSA is permitted to charge them. Any difference in the PY or CY between the annual GSA rental amount and limitation should be shown as an adjustment. --The projected costs of joint use space are not in the total annual GSA rental payment estimates. However, since GSA bills agencies for a proportionate share of such space, the cost of this space must be included in the estimates for rental payments to GSA. In all cases, the object class 23.1 estimates will equal the annual GSA rental amounts plus or minus the adjustments. Agencies to which GSA has delegated certain building operations functions will be provided the necessary funds by GSA to pay for these functions. Agencies will use the full rent in computing the rental payments to GSA and the object class 23.1 estimate. No adjustments will be made for this purpose. The agency should specify the amount of rental payments financed out of direct appropriations and the amount financed from other sources (e.g., revolving fund collections or other reimbursements). For agency-rented space and land (ie., space and land rented from non-GSA sources), agencies should distinguish between rental payments to non-Federal sources and rental payments to Federal sources other than GSA. For rental payments to non-Federal sources, the agency should estimate separately the annual rental payments for office space, non-office space (excluding parking), parking, other land, and other rentals (e.g., structures and facilities). The total of these rental payments should equal the obligations reported under object class 23.2, rental payments to others. Rental payments to Federal sources other than GSA will be handled as indicated below. For both GSA-controlled and agency-rented space, agencies should report any reimbursements they plan to make to Federal agencies other than GSA for space they sub-lease or receive by permit. (This space may be owned by the other agencies or leased by them and will be reported on their work space management plans.) For sub-leases of GSA-controlled space, report the rental payments as "Other payments," under GSA controlled space. Otherwise report the payments as "Other payments" under agency-rented space and land. Agencies should also report any payments they plan to make for extra services (e.g., cleaning, security, reimbursable work authorizations, etc.) beyond those services provided by the basic rental charge. Estimated payments for extra services should be classified, as appropriate, under object class 25.x. If final budget decisions result in revised space, personnel, or rent obligation requirements, the agency will send OMB an updated report (GSA Form 3530) showing the revised estimates. This report is due no later than March 1. If those changes affect space rented from GSA, the agency will also notify the Public Buildings Service. 15.6. Information on grants to State and local governments. Each agency having a Federal formula grants program to State or local governments will be required to provide information on the obligations and the percentage share of obligations allocated to each State, the District of Columbia, and Indian tribe set-asides, when applicable, for PY, CY and BY for each such program. This information will be submitted promptly after final budget decisions are made in accordance with separate instructions to be provided by OMB. 15.7. Information on motor vehicles. Certain agencies are required by the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 (Public Law 99-272) to submit information on motor vehicles in their budget submissions to OMB. This information will be used to prepare a report that the President is required by law to transmit to the Congress. (a) Reporting threshold.--Agencies, as defined in 5 U.S.C. 105, that operate at least three hundred motor vehicles are required to report data on acquisition, operation, maintenance, leasing, and disposal of motor vehicles. The Tennessee Valley Authority, the Postal Service, and the Postal Rate Commission are exempted from these requirements. (b) Definitions.--For the purposes of reporting motor vehicle data under this subsection, the following definitions apply. Motor vehicles are any vehicles that are self-propelled or drawn by mechanical power, except that the term does not include any vehicle designed or used for military field training, combat, or tactical purposes, or any other special purpose vehicle exempted by the Administrator of the General Services Administration. Special purpose vehicles and equipment include vehicles and equipment used and designed for specialized functions. Vehicles and equipment exempted by this definition include, but are not limited to: trailers, semi-trailers, other types of trailing equipment, trucks with permanently-mounted equipment (such as aerial ladders); construction and other types of equipment included in Federal Supply Class (FSC) 38; material handling equipment in FSC 39; and fire-fighting equipment in FSC 42. Cost of privately-owned vehicles (POVs) while on official business means the mileage cost reimbursed by the Government to the owner or operator of such a vehicle, except when a POV is used: --in a permanent change of station move; --in lieu of a common carrier; and --to commute between an employee's residence and a common carrier terminal or facility. (c) Materials required.--Agencies are required to provide a report on total obligations and outlays for motor vehicle activities for PY through BY and a narrative statement on use of the GSA's Interagency Fleet Management System and other fleet management systems. These materials are required as a part of the initial budget submission (see section 10.3). Agencies will revise them, as necessary, to reflect final budget decisions. Amounts reported will cover costs of motor vehicle acquisition, operation, maintenance, leasing, and disposal, including Government-owned, leased, and privately-owned vehicles used for official business. Separate identification of the various categories (e.g., operation, maintenance, etc.) of motor vehicle activities is not required. As a general rule, agencies are required to report agency totals only. However, supporting account level detail may be required upon request by OMB. Data will be reported in thousands of dollars using the stub entries shown below. ---------------------------------------------------------------------- Entry Description ---------------------------------------------------------------------- Motor vehicle: Obligations Report total obligations for the agency for motor vehicle acquisition, operation, maintenance, leasing, and disposal for PY, CY, and BY. ---------------------------------------------------------------------- Outlays Report total outlays (net) for the agency for motor vehicle acquisition, operation, maintenance, leasing, and disposal for PY, CY, and BY. Report outlay totals as separate entries even if total obligations and outlays for motor vehicle activities are identical. ---------------------------------------------------------------------- A narrative statement will be provided with each report. The statement will explain why existing and new motor vehicle acquisition, operation, maintenance, leasing, and disposal activities cannot be met through: --the use of a qualified private fleet management firm or other private contractor; --increased reliance on the Interagency Fleet Management System operated by the General Services Administration; or --other existing motor vehicle management systems. Both the report and narrative should be identified as "Submission on Motor Vehicles" and include, in the lower right hand corner, the date of preparation, and the name and telephone number of an individual responsible for answering questions concerning the submission. 15.8. Information on consulting services. The agencies listed below are required to submit information promptly after final decisions have been made. This information will be used by OMB and agencies to comply with 31 U.S.C. 1114, 10 U.S.C. 2212 and P.L. 102-394. For the purposes of reporting data under this subsection, agencies will use the definition of consulting services prescribed in section 35.4 (see object class 25.1). (a) Coverage.--This information is required from all cabinet agencies, the Arms 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. (b) Materials required.--An original and two copies of the following information are required: --a schedule of consulting service activities for PY through BY for each appropriation or fund account that finances these activities in the format of exhibit 15C; and --a summary schedule, when consulting services are funded from more than one account; Amounts will be stated in obligations in thousands of dollars and totals should tie to amounts reported in object classification schedules for object class 25.1. Each schedule should have, in the lower right corner, the date of preparation and the name and telephone number of an individual responsible for answering questions concerning that schedule. 15.9. Information on receipts estimates. Agencies are required to provide narrative information as described below. Explanations are required for major changes from one fiscal year to the next in the amounts reported for any account, trends in receipt estimates that differ from outlay trends for the related programs, and any other unusual circumstances relating to the estimates. Agencies will report to OMB increases in amounts reported to Treasury Department accounts 1435.00 (General fund proprietary interest receipts, not otherwise classified) and 3220.00 (All other general fund proprietary receipts) when it is expected that the amounts collected from a single source will exceed $10 million in any year or when legislation is proposed that will affect any receipts reported to those accounts. Explanations of legislative proposals must be consistent with the agency's legislative program and multi-year planning estimates (see section 12.2) and should cover the expected timing of enactment and the annual level of receipts anticipated. 15.10. Information on Inspectors General for Designated Federal Entities (DFEs). Each agency designated to establish an Office of Inspector General in the Inspector General Act Amendments of 1988 will submit information on budget authority and FTE levels for PY through BY for its Office of Inspector General. In addition, a concise narrative justifying the funding levels should be provided. Information on Inspectors General for DFEs will be submitted with the initial budget submission.