Susan Shuback Executive Director for Budget U.S. Customs and Border Protection

1. Susan ShubackExecutive Director for BudgetU.S. Customs and Border Protection • Federal Budgeting • 101

2. Budget 101Objectives • To understand and be able to articulate the various phases of the planning, programming and budgeting processes • To understand key decision points in the budget process and the deliverables for these points • To understand the roles and responsibilities of Congress, the Office of Management and Budget (OMB), Department/Agencies

3. The Budget CyclePlanning, Programming, Budgeting & Execution (PPBE) • The PPBE is a cyclical process • consisting of four distinct but interrelated phases: • Planning • Establish strategic priorities and capabilities required to achieve the strategy • Programming • Apply the resources to programs that provide the capabilities required to achieve strategic priorities • Budgeting • Properly price the programs, develop justifications, and an execution plan • Execution • Perform and monitor the spending of approved plans

4. Multiple cycles ofPlanning,Programming, Budgeting, andExecution(PPBE) are underway at any one time Budget Formulation Process FY 2014- 2018 FY 2013- 2017 FY 2012 FY 2011 Annual Financial Report Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Agency/Department Planning Phase Decreasing Flexibility to Adjust/Change Internal Agency Program or Outyear Budget Process DHS: Resource Allocation Plans (RAP) Budget to OMB OMB Passback Budget, APR, FYHSP to Congress Hearings, Testimony HAC/SAC Conference & Bills Appropriations Act Mid-year Reviews Reprogramming Requests to Congress Dec

5. The OutyearsPlanning Agency Planning Process DHS: HSTA and Integrated Planning Guidance May-June October-November

6. Planning in DHSThe Homeland Security Threat Assessment (HSTA), May-JuneIntegrated Planning Guidance (IPG), October-November • HSTA • A strategic assessment of the major threats for which DHS must prepare and respond to in the next five years. • IPG • Provides a framework to manage DHS resources effectively; consistent with the National Strategy and DHS’ strategic plan. It provides a projected operating environment for the next five years.

7. The Budget Year +1Programming Resource Allocation Plans (RAPs) Budget to OMB OMB Passback Internal Agency Program or Outyear Budget Process February-March April-May May-July July-August September October-December

8. Internal Agency Program or Outyear Budget Process and DHS’s Resource Allocation Plan (RAP) ProcessFebruary-August, BY +1 • The DHS RAP is the component-specific budget requests that span a five-year time period (2013-2017) • In late winter/early Spring DHSIssues RAP guidance- includes fiscal levels for each component, and process guidance • For example: no new programs in FY 2013 or office must fund all new programs within their base budgets • DHS Components make recommendations for maintaining and/or adjusting the budget to reflects costs and priorities of the component. • DHS and Component leadership deliberate and make decisions • May include adjustments with and between components • Decisions are reflected in the OMB Budget Submission

9. Budget to OMBSeptember, Budget Year +1 (FY 2013) • Submitted to OMB, generally by the first Monday after Labor Day • Represents Department/Agency’s recommendations for funding to the Administration • Includes most of the same materials that will eventually go to Congress • Draft or “Dress Rehearsal” of the Congressional Justification • Includes changes in costs, recommendation for starting new or terminating old programs • Includes changes in performance measures

10. OMB PassbackNovember-December, BY +1 (2013) • Includes recommendations to the President and senior advisors on each agencies proposed budget policies • Ensure budgets are aligned with the administration’s priorities, program performance goals and budget constraints • Develop economic and budget assumptions for each area which will ultimately drive programmatic and budget decisions • OMB passes back the President’s budget decisions to agencies • Agencies/departments can appeal budgetary decisions if there are disagreements • If OMB and agency cannot reach agreement, the issue may be taken directly to the Vice-President • Prepare impact statements/appeals for OMB cuts or disapprovals for programmatic changes • These are prepared both by the Budget Office and Program Offices

11. The Budget YearBudgeting HAC/SAC Conference and Bills Appropriations Act Budget to Congress Congressional Hearings, Testimonies January- February March- April May- June September-November

12. Budget to CongressJanuary-February, BY • The President’s Budget is transmitted to Congress on the first Monday in February; also known as the Congressional Justification (CJ) Submission • Process includes: • Input into government-wide budget database (MAX) for all dollars/numbers • Narrative submission to Congress including all changes to the base budgets and new initiatives • CBP’s document is over 400 pages long includes over two dozen separate funding exhibits for costs such as salaries, contracts, rent, capital investments etc. • Official external messaging: Development of Press Roll-Out materials, review of DHS Secretaries Budget announcements, and the Secretary’s Statement for the Record • Annual Performance Review– high level document which highlights agencies and organizations accomplishments against strategic goals

13. Hearings, Testimony & ConferenceMarch-June, BY • Congress sends up a nonbinding budget resolution for the President • This establishes guidance on the level of budget authority, outlays, surplus or deficit, revenue, and debt • May request the Secretary and the heads of agencies to testify before committees on the Budget Request. Requests are mostly made by the appropriation committees. • The House and Senate resolve any differences in their respective bills in a special conference committee made up of members from both legislative bodies. Once compromise has been reached, Congress adopts the budget resolution concurrently. • Departments and Agencies also write briefing papers; coordinate responses to advance questions; answer Questions for the Record (QFRs); prepare transcript inserts, and help identify and assign reporting requirements

14. Appropriations ActSeptember-October, BY • An Appropriations Bill provides the legal authority needed to spend or obligate U.S. Treasury funds. The appropriation bill must be enacted prior to the start of a new fiscal year (October 1). Failure to meet this deadline causes the need for temporary short-term funding (Continuing Resolution), or results in a federal government shut-down. • House and Senate appropriation committees meet independently to consider 12 appropriations bills • Both houses “Conference” to resolve outstanding differences • If the President signs the legislation, it becomes law • The appropriation acts establish the three main components of the appropriation: time, purpose, and amount

15. The Current YearExecution Reprogramming Requests to Congress Annual Financial Reports Mid-year Reviews March-April May-June October-December

16. Mid-year ReviewMarch-April, Current FY • Mid-Year reviews occur is most federal agencies and are used to provide agency/department leadership with a snapshot of financial resources at the halfway point of the fiscal year • Provide an analysis of budget and spending activities against financial plans, staff plans and projection methods to ensure effective prioritizing and utilization of resources in support of CBP mission and goals • Are often used to measured against performance goals • May include a review of unfunded requirements, new initiatives or changes in costs assumptions or priorities.

17. Reprogramming Requests to CongressMay-June, Current FY • Reprogramming occurs when funds within an appropriation or fund account are shifted and used for purposes other than those designated at the time of the appropriation decision. Reprograms should only be made to meet urgent and unavoidable requirements, not to procure desirable items. • Various authorizing statutes provide other limitations for reprogrammings. For example in DHS no reprogramming can increase an appropriation by more than 10% or decrease an appropriation by more than 5% • Agencies most notify Congress when reprogramming funds: • Create or eliminate a program, project, office or activity • Increase funds of a program, project, or activity that were denied or restricted by Congress • Repurpose funds that were specified by Congress to go towards a stated purpose • Contract out any function or activity for which funding levels were requested for Federal full-time equivalents

18. Annual Financial ReportOctober-November, Current FY • Provides annual financial information adheres to standards and guidelines in manner consistent across federal government • Includes component statements and performance metrics to report agency efficacy in meeting mission and objectives • Provide a hierarchy of objectives and landscape of financial resources

19. Other Terms in Budget • Apportionment: is a plan, approved by OMB, to spend resources provided by one of the annual appropriations acts, a supplemental appropriations act, a continuing resolution, or a permanent law (mandatory appropriations). Resources are apportioned by Treasury Account Fund Symbol (TAFS). The apportionment identifies amounts available for obligation and expenditure. It specifies and limits the obligations that may be incurred and expenditures made (or makes other limitations, as appropriate) for specified time periods, programs, activities, projects, objects, or any combination thereof. • Obligationmeans a binding agreement that will result in outlays, immediately or in the future. Budgetary resources must be available before obligations can be incurred legally. • Commitment: An administrative reservation of funds for obligation. For example when an organization goes out with a request for proposal on a contract, the funds are often “committed” or set aside. • Outlay or Expenditure: means a payment to liquidate an obligation (other than the repayment of debt principal). Outlays generally are equal to cash disbursements but also are recorded for cash-equivalent transactions, such as Federal employee salaries and debt instruments. Outlays are the measure of Government spending.