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Government Budgeting

Government Budgeting. I. Basic Concepts A. Fiscal year B. Obligations and Outlays C. End of fiscal year spending spree II. Stages in the Federal Budget Process A. Executive Preparation. Budgeting. 1. OMB sends “Call for Estimates” 2. Agencies respond with 3 answers:

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Government Budgeting

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  1. Government Budgeting • I. Basic Concepts • A. Fiscal year • B. Obligations and Outlays • C. End of fiscal year spending spree • II. Stages in the Federal Budget Process • A. Executive Preparation

  2. Budgeting • 1. OMB sends “Call for Estimates” • 2. Agencies respond with 3 answers: • a. reduced services • b. enhance services • c. Same services • 3. Agencies select strategy behind requests • a. Shoot Low • b. Shoot High

  3. Budgeting • 4. OMB calls on “budget examiners” • -investigate • -question expenditures • 5. Budget examiners make recommendations to OMB: • a. Guardian of the public purse • b. Mediator • 6. OMB Submit Omnibus budget to President

  4. Budgeting • 7. President ‘adopts’ budget as his own and submits to Congress with 15 days of congressional session

  5. Executive Preparation The Executive Presentation to Congress, to be successful, must meet the following criteria: • 1. be comprehensive • 2. be transparent • 3. establish accountability • 4. avoid commitments that could hinder new programs

  6. Legislative Considerations • B. Authorization and Appropriation Stages • 1. Authorization is maximum spending allowed • 2. Standing authorization signifies influence

  7. Budgeting • 3. Appropriation is actual money given to agencies to spend • a. Major role is played by HAC/SAC • b. In House of Representatives, all Appropriations bills begin. • c. Chairman’s mark is held • d. Bill then sent to Senate after passage on House floor

  8. Budgeting • 4. Senate views itself as appeals body: adds money to agencies • 5. Bill goes to floor of Senate • 6. If different versions of House and Senate bill, conference committee needed. • 7. Different rules of floor debate exist • a. House: Privileged status means immediate debate • b. Senate: lay over rule: must wait a day

  9. Budgeting • 8. In 1974 House and Senate Budget Committees created and superimposed on process. Created CBO. • Bill must then be sent to President for signature or veto: • -Line item veto: held by most governors • -Total veto: held by President • -Amendatory veto: held only in IL

  10. Execution Stage • C. Execution Stage: refers to when agencies carry out their approved budgets • -Law forbids agencies from spending more money than appropriated • 1. annual vs. quarterly appropriations • 2. lots of administrative discretion • 3. may lead to end of fiscal year spending spree

  11. Audit and Execution • D. Audit Stage: conducted by Congress and President separately • 1. financial audits: determine whether money was spent legally, receipts properly recorded, and statements reliable • 2. performance audits: • a. Economy and efficiency: compliance with laws and causes of inefficiency • b. Program: focused on effectiveness and extent desired results are achieves

  12. Conclusions • E. Cyclical Process then starts over again. Agencies working on several different fiscal years within one calendar year.

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