Teresa Kruszka Director, Budget 202-762-3588 teresa.kruszka@med.navy.mil

1. BUMEDResource Management / Comptroller (M8)Budget Division (M83)Resource Allocation Process23 Sep 09 Teresa Kruszka Director, Budget 202-762-3588 teresa.kruszka@med.navy.mil

2. Overview

3. Topics of Discussion • Overview • Resource Allocation Process • Appropriations • BUMED Budget Considerations • Allocation • FY10 Execution

4. Purpose of a Budget • How a Region will receive and provide for their Mission • Identifies and plans for finite resources • Programmatic / Mission requirements • Manpower / Total Force • Physical Assets • …and Funding for all… • Identifies workload goals • Basis of Headquarters budget requests • Includes Requirements / Performance Based metrics BUMED does not have a “money tree”.

5. Initial Formulation to“Final” President’s Budget • Program Objective Memorandum (POM) • Budget Estimate Submission (BES) / President’s Budget Review (PBR) • Program Budget Decision (PBD) • Program Decision Memorandum (PDM) • President’s Budget • Congressional Adjustments Long-term steps from requirements to resourcing.

6. Resource Allocation Process

7. RA Phases Source: DAU

8. RA Phases - Overlap Source: DAU

9. Resource Allocation (RA)Phases • “The purpose of the Planning, Programming, Budgeting, and Execution (PPBE) process is to allocate resources within the Department of Defense.  The PPBE is a cyclic process that provides the mechanisms for decision making and provides the opportunity to reexamine prior decisions in light of changes in the environment (e.g., evolving threat, changing economic conditions, etc.). The ultimate objective of the PPBE is to provide the Combatant Commanders (COCOMs) with the best mix of forces, equipment, and support attainable within established fiscal constraints.” - DAU • Phase 1: Planning, Programming, Budgeting, and Execution • 2-year cycle (even numbered years, aka “on year”) • Phase 2: Enactment • Congressional review of President’s Budget • Phase 3: Apportionment • OMB makes funding available after the President signs the Authorization & Appropriations Legislation • Phase 4: Execution • The spending of appropriated funds

10. PERS Planning &Management

11. Appropriations

12. BUMEDAppropriations • Direct Appropriations: • RDT&E,DHP and RDT&E,N • 2-year obligation authority, however should be treated as 1-year (bona fide need) • O&M,DHP • 1-year obligation appropriation; HA has Carryover Authority of 1% to 2nd year • O&M,N • 1-year obligation appropriation • OP,DHP and OP,N • 3-year obligation appropriation, however should be treated as 1-year (bona fide need) • RP,N • 1-year obligation appropriation • Indirect Appropriations: • MILCON • 5-year obligation appropriation • BRAC • “No-Year” appropriation; does not expire • After each appropriations obligational period (Expired), they all have an additional 5-years for expenditure (Cancelled) Know your appropriations obligation/expenditure timeline

13. DoN Civilian FTEs by Appn

14. BUMEDs FY10 Budget $37.542M (1.16%) $9.888M (.3%) $3.053B (94%) $29.049M (.89%) $66.701M (2.05%) $2.122M (.07%) $49,436M (1.52%) $3.247B

15. BUMED’s FY10Resource Allocation RDT&E Mission MPN RPN O&M Mission Manpower requirements are the largest resource grab.

16. BUMEDs FYDP E/S * Based upon PR-11 data. Contractor personnel are highly variable in any give FY.

17. BUMEDs FYDPBudget vs Costs * Based upon PR-11 data. Contractor personnel are highly variable in any give FY.

18. O&M • O&M,DHP • BAG-1 – In-House/Direct Care • BAG-2 – Private Sector Care • BAG-3 – Consolidated Health • BAG-4 – IM/IT • BAG-5 – Management Activities • BAG-6 – Education & Training • BAG-7 – Base Ops & Communications • O&M,N • Fleet Hospital Program (Programmed) • Counter Drug Program (Execution) • Drug Labs (Execution) • HRPP (Programmed) • Homeland Security (Programmed)

19. BUMED Budget Considerations

20. BudgetingConsiderations • Near term (current PB submit) • Cautiously refine requirements and costs • Long term (POM) • Refine and identify new requirements and costs • Rephasing of funding, based on programmatic changes • Possible methodologies • Requirements based (preferred, most recommended) • Historical (starting point) • Actuals (for comparison) • Technical estimates (Unknown unknowns) Budgeting does not include a management reserve!

21. Allocation

22. Allocation Process • BUMED issues an Allocation to the Expense Limitation Holders (ELH), such as the Regions • Based on Execution Controls • ELHs issue lower level Allocations to the Expense Operating Budget (EOB) Holders, such as MTFs/Activities • Not based on Actuals from previous year! Based on documented and validated Requirements

23. BUMED FY10Execution Monitoring / Analysis

24. Anti-DeficiencyViolations • 31 USC 1341(a)(1)(A) – Anti-Deficiency Act • In excess of amount available in appropriation or allocation • 31 USC 1341(a)(1)(B) – Anti-Deficiency Act • Government enters into a contract or obligation, in advance of appropriation, unless otherwise authorized • 31 USC 1301(a) – Anti-Deficiency Act • Appropriations applied for intended purposes only, unless otherwise authorized • 31 USC 1517 – Anti-Deficiency Act • In excess of Apportionment or Allocation

25. Execution Monitoringand Tracking • Weekly Execution Reports • Monthly Execution Reports • Mid-Year = 50%+ • 31 Jul = 80%+ • Based on: • Obligation & Expenditure Benchmarks • Regions FY10 Plans • Monitor by Region, but review and analyze at MTF/Activity level, also • Monthly Variance Reports • Justifications • Corrective Plan of Actions

26. O&M,DHP Flexibilitiesand Limitations • Program Execution amounts are estimates • BAG-1 • Flexibility to execute within BAG-1 • Can “move” funds into, but not out of (Congressional restriction) • BAG-2 • Can not “move” funds (Congressional restriction) • BAGs 3-7 • Flexibility for Regions to execute between BAGs 3-7, not Headquarters – shall issue funds in BAG they were received • Fiscal Guidance will identify specifics for Execution • Restrictions on BAG execution

27. Execution Controls • Based on: • Region-identified FY prioritized requirements, by appropriation, by BAG • Identified Execution Total Obligation Authority (TOA), provided by HA and FMB • Excluding taxes and withholds • Includes authorized Escalation Factors, calculated in last approved PB • Varies (Pharmacy, CIVPERS, Fuel, etc.) • M8 provide costing for validated M1 Manpower requirements

28. “End of Year” /“Sweep-Up” Funds • BUMED M8 does not hold funding at Headquarters for UFRs, Mid-Year, or End of Year • May appear that way, because: • Congress provides Supplemental and other Adds during Execution • Regions (MTFs/Activities) may under-execute during Execution, resulting in reallocation of dollars • Regions/M-Codes must develop an executable budget, within their issued funding controls, at any given time - - including a Contingency Plan, anticipating possible adjustments during Execution • Not applicable to hiring personnel, unless funding profile identified and trade-off analysis has been completed “End-of-Year” funds for hiring must consider long term tails and trade-offs

29. FY10 Changes • Process and method of FY Planning has changed • Percentage of Overseas Contingency Operations (OCO) and Traumatic Brain Injury / Psychological Health (TBI/PH) funding rolled into Program of Record budget profile • HA revisiting basis of PPS - TBD • Regions being held accountable for all levels of Planning and Execution within their cog • Monitoring of Execution • Allocation of funds, based on actual execution during year Validated manpower requirement ≠ Resourced manpower requirement

30. Questions ???