Narrative Statements on Program and Performance
 
 34.1. Purpose and content of narrative statements.
 
|  Narrative statements describe the performance goals, outputs, and
|outcomes related to an account. The statements should discuss how the
|budget year request supports these performance goals, outputs, and
|outcomes while addressing significant increases or decreases in
|performance or financing from the current to the budget year,
 including the termination of a program in the budget year.
   Each account requires a narrative statement if there is ongoing
 activity in the current or budget year. Supplemental requests,
 rescission proposals, and items proposed for later transmittal also
 require separate narrative statements for each presentation.
|  Performance indicators and performance goals.--The statements
|should discuss both the short-range and the long-range performance
|goals of the program, and include data on significant performance
|indicators where appropriate. The statements could, for example,
|include performance indicators contained in the agency's annual
|financial statements or other appropriate indicators.
|  Generally, performance indicators which focus on outputs or outcomes
|should be used instead of workload and other process measures. 
|Outputs should reflect the products and services which are provided by
|the account and delivered or used outside of the account. Outcomes
|should reflect the results related to the account. If the agency has
|not developed output or outcome focused performance measures, other
|measures may be used.  Tables may be used to illustrate and compare
 these indicators for the past, current, and anticipated budget year
 levels.
   Collections and fees.--When collections and fees credited to the
 account finance a sizeable proportion or dollar level of the
 obligations, the discussions should address the nature of the
 reimbursable work performed. The discussions may also provide
 information on other amounts collected by the program and deposited
 into the general fund of the Treasury when pertinent to the operations
 of the program.
   Exemptions.--Unless otherwise requested by OMB, narrative statements
 are not required for (a) accounts in which there are only obligated
 balances for all years (e.g., consolidated schedules for expired
 accounts); or (b) accounts in which there are no unobligated balances
 in any year, no obligations or outlays are estimated in the current
 and budget years, and no further appropriations will be requested.
 However, a brief narrative may be desirable to explain the
 discontinuation of an account.
 
 34.2. Style and form of narrative statements.
 
   Narrative statements for accounts presented in the previous year's
 budget will be forwarded on reprinted galleys to the agencies for
 editing. Narrative statements for accounts not included in the
 reprinted galleys (e.g., new accounts or supplemental requests) will
 be prepared as new print materials. More detailed instructions on
 reprinted galleys and new print materials are provided in section 30.
   The narrative statements should be written in a concise, factual
 manner. The statements should be oriented toward the policies and
 objectives for the budget year. The history, authorizing statutes, and
 other legal references should not be discussed except as indicated
 below. However, it is appropriate to discuss significant legislation
 enacted since the previous budget, as well as legislative initiatives
 proposed in the budget. Comparative quantitative tables on both
|significant program, performance, and dollar data should be
 included.
   Narrative statements may use the separate activities or
 subactivities listed in the program and financing schedule as the
 basis for the discussion. The items will be identified in side
 headings by the title used in the program by activities section of the
|program and financing schedule. 
|
|34.3. Narrative statements for major programs financed by multiple
|budget accounts.
|
|  Where the total financing needed to conduct a major program is not
|contained within a single budget account, the narrative statement of
|the account that finances the major portion of the program activity
|(i.e., the "primary" account) may include a table in the format of
|exhibit 34 that shows the total costs and sources of funding for the
|program. The table will list the primary account and any other
|accounts (i.e., "supplementing" accounts) that support the activity
|performed by the primary account.
|  For these purposes, major programs are those that obtain goods and
|services of $50 million or more, in budget authority or outlays for
|the budget year, on a non-reimbursable basis from another account.
|  Support provided by supplementing accounts includes the
|non-reimbursed cost of central support services that are directly
|attributable to implementation of the program, but not charged against
|the primary account. For example, in the case of a grant program, the
|budget account funding the grant would be the primary account, while a
|separate salaries and expenses account used for compensation of agency
|personnel responsible for implementing the program (e.g., disbursing
|and monitoring the grants) would be the supplementing account.
|  The table will display the budget authority, outlays, and FTE
|resources for the primary account and for each of the supplementing
|accounts. Program totals will also be provided. Agencies should
|consult with their OMB representative on the designation of major
|programs and the form and content of the information presented in the
|narrative table.
 
 34.4. Narrative statements for revolving funds.
 
   The narrative statement for a revolving fund will describe the
 enterprise's present and proposed program. The narrative will begin
 with a brief introduction that includes the present authorized
 purposes and any major changes made during the past year, in the
 current year, or proposed for the budget year. Following this brief
 introduction, these side headings will be used for each of the major
 topics to be covered.
   Budget program.--This section will discuss the budget programs of
 each major activity shown in the program and financing schedule.
   Financing.--Significant amounts relating to financing should be
 explained in this section, if necessary. Total authority to borrow, as
 well as amounts actually borrowed or repaid, should also be discussed
 here.
   Operating results.--This section will discuss any significant
 information relating to revenue, expense, and net income or loss. It
 will explain the steps being taken to dispose of any deficits and the
 planned disposition of net earnings. The narrative will include an
 analysis of retained income on a cumulative basis, disclosing any
 budget authority amounts used to offset deficits for non-revenue
 producing outlays since the inception of the fund.
   For each fund covered by section 102 of the Government Corporation
 Control Act, a specific recommendation will be made on the application
 of the retained earnings or restoration of capital impairment at the
 end of the past year. The recommendation should indicate: (a) the
 amount of retained income to be returned to the Treasury and the use
 to be made of the remainder, if any; and (b) whether restoration of
 any capital impairment is required and whether this should be done by
 appropriations or other means.
 
 34.5. Narrative statements for Federal credit programs.
 
   Narrative statements will cover direct loan and loan guarantee
 activities, addressing any significant change in the program
 objectives of the credit activities. In addition, agencies should
 address significant factors in developing subsidy estimates, such as
 default rates and interest rates charged to borrowers. Also, where
 relevant, agencies should provide information about how risk
 categories (see section 33.5(l)) are defined. The discussion for loan
 guarantee programs also will indicate whether the full amount of the
 loan is guaranteed or, in other cases, the percentage of the loan
 covered by the guarantee.
   In addition, the following paragraphs should be used, modified as
 necessary to describe each program.
 
 
   For liquidating accounts:
 
   As required by the Federal Credit Reform Act of 1990, this account
   records, for this program, all cash flows to and from the Government
   resulting from [direct loans obligated] [and] [loan guarantees
   committed] prior to 1992. All new activity in this program
   (including modifications of direct loans or loan guarantees that
   resulted from obligations or commitments in any year) is recorded in
   corresponding program accounts and financing accounts.
 
   For program accounts:
 
   As required by the Federal Credit Reform Act of 1990, this account
   records, for this program, the subsidy costs associated with the
   [direct loans obligated] [and] [loan guarantees committed] in 1992
   and beyond (including modifications of direct loans or loan
   guarantees that resulted from obligations or commitments in any
   year), as well as administrative expenses of this program. The
   subsidy amounts are estimated on a present value basis; the
   administrative expenses are estimated on a cash basis.
 
   For direct loan financing accounts:
 
   As required by the Federal Credit Reform Act of 1990, this
   non-budgetary account records all cash flows to and from the
   Government resulting from direct loans obligated in 1992 and beyond
   (including modifications of direct loans that resulted from
   obligations in any year). The amounts in this account are a means of
   financing and are not included in the budget totals.
 
   For guaranteed loan financing accounts:
 
   As required by the Federal Credit Reform Act of 1990, this
   non-budgetary account records all cash flows to and from the
   Government resulting from loan guarantees committed in 1992 and
   beyond (including modifications of loan guarantees that resulted
   from commitments in any year). The amounts in this account are a
   means of financing and are not included in the budget totals.
 
 34.6. Narrative statements in special cases.
 
   The narrative statement should be tailored to explain any special
 circumstances affecting the method of financing the program.
   Permanent budget authority.--The narrative statement will indicate
 the legal basis for the authority (since no appropriations language is
 presented for such items). In addition, for permanently appropriated
 special and trust fund accounts, the statement should indicate the
 source of money and the purposes of and restrictions on its use.
   Agency investments and debt.--For accounts that issue debt
 instruments (other than to Treasury) or invest in agency debt
 securities, the narrative statement will indicate the par value of
 outstanding debt securities issued by the account and the par value of
 securities owned that were issued by Federal agencies (other than
 Treasury) for PY-1 through BY, unless the information is provided in a
 statement of financial condition.
   Limitations on borrowing or debt.--The narrative statement for
 accounts with a statutory limit on the amount of borrowing or on the
 amount of debt that can be outstanding at any one time will state the
 amount of the limit and will discuss the position of the fund with
 respect to the limit during the budget year. The discussion will
 include a forecast of how close to the limit the fund will approach
 during the year and how often.