Budget Glossary

Question 1

5 Steps Federal Budget Process

Answer 1

1. The President submits a budget request to Congress (The president sends a budget request to Congress each February for the coming fiscal year, which begins on Oct. 1)
2. The House and Senate pass budget resolutions (After the president submits his or her budget request, the House Committee on the Budget and the Senate Committee on the Budget each write and vote on their own budget resolutions)
3. House and Senate Appropriations subcommittees “markup” appropriations bills (The Appropriations Committees in both the House and the Senate are responsible for determining the precise levels of budget authority, or allowed spending, for all discretionary programs.)
4. The House and Senate vote on appropriations bills and reconcile differences (The full House and Senate then debate and vote on appropriations bills from each of the 12 subcommittees)
5. The President signs each appropriations bill and the budget becomes law (The president must sign each appropriations bill after it has passed Congress for the bill to become law. When the president has signed all 12 appropriations bills, the budget process is complete. Rarely, however, is work finished on all 12 bills by Oct. 1, the start of the new fiscal year.)

Question 2

Acquisition

Answer 2

An acquisition cost, also referred to as the cost of acquisition, is the total cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs and other necessary expenditures, but before sales taxes

Question 3

Allocation

Answer 3

An amount or portion of a resource assigned to a particular recipient

Question 4

Apportionment

Answer 4

The distribution made by OMB of the budget authority (i.e., funding) provided in the appropriation acts; such distribution may be made for specified time periods, activities, programs, projects, or any combinations of these.

Question 5

Appropriation

Answer 5

A sum of money or total of assets devoted to a special purpose. The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization and then appropriation.

Question 6

Balanced Budget

Answer 6

Budget in which receipts equal outlays

Question 7

Baseline

Answer 7

Projection of the receipts, outlays, and other budget amounts that would ensue in the future without any change in existing policy. Baseline projections are used to gauge the extent to which proposed legislation, if enacted into law, would alter current spending and revenue levels.

Question 8

Budget Authority

Answer 8

Authority provided by law to enter into obligations that will result in outlays of Federal funds. Budget authority may be classified by the period of availability (one-year, multiyear, no-year), by the timing of congressional action (current or permanent), or by the manner of determining the amount available (definite or indefinite)

Question 9

Budget Execution

Answer 9

The process of monitoring, adjusting, and reporting on the current year’s budget

Question 10

Budget Resolution

Answer 10

Legislation in the form of a concurrent resolution setting forth the congressional budget. The budget resolution establishes various budget totals, divides spending totals into functional categories (e.g., transportation), and may include reconciliation instructions to designated House or Senate committees.

Question 11

Commitments

Answer 11

are an administrative reservation of funds. Financial Management earmarks the funds for particular purpose.

Question 12

Obligations

Answer 12

occur when a contract is signed or an order is placed. An obligation is a legal liability on the Government. It is important to note that for each appropriation the obligation period is limited; funds must be obligated prior to expiration.

Question 13

Expenditures/Disbursements

Answer 13

Are the payment for completed work, usually based on a contractor’s invoice, and are often in the form of a check in the mail or an electronic funds transfer.

Question 14

Outlays

Answer 14

Occur when a check is cashed by the contractor or an electronic transfer of funds is complete.

Question 15

Concurrent Resolution

Answer 15

A legislative measure, designated “S. Con. Res.” and numbered consecutively upon introduction, generally employed to address the sentiments of both chambers, to deal with issues or matters affecting both houses, such as a concurrent budget resolution, or to create a temporary joint committee. Concurrent resolutions are not submitted to the president and thus do not have the force of law

Question 16

Continuing Resolution Authority (CRA)

Answer 16

Legislation in the form of a joint resolution enacted by Congress, when the new fiscal year is about to begin or has begun, to provide budget authority for Federal agencies and programs to continue in operation until the regular appropriations acts are enacted./A continuing resolution provides temporary funding for federal agencies until new appropriations bills become law.

Question 17

Cost Analysis

Answer 17

Predicts, Analyzes and Evaluates COST and SCHEDULE aspects of Weapon Systems

Question 18

Cost Baseline

Answer 18

A cost baseline is an approved time phased plan. Once a detailed budget is developed and approved, the project manager should publish this baseline and set it as a point of comparison for actual performance progress. … The baseline budget is the tool for measuring how project changes affect our schedule and budget

Question 19

Deficit (Surplus)

Answer 19

The amount by which outlays exceed receipts in a given fiscal period. (A surplus would be the amount by which receipts exceed outlays.)

Question 20

Discretionary Spending

Answer 20

Spending (budget authority and outlays) controlled in annual appropriations acts.

Question 21

Entitlement Programs

Answer 21

Entitlement Programs of the federal government include Medicaid, Medicare, Social Security, Unemployment and Welfare Programs. Entitlement programs are rights granted to citizens and certain non-citizens by federal law

Question 22

Expenditure

Answer 22

Legal Action—contractor submits a voucher to the government for products or services delivered and is paid by the Treasury (through Defense Finance and Accounting Service)

Question 23

Federal Acquisition Regulation

Answer 23

The Federal Acquisition Regulation (“FAR”) is a set of regulations that sets forth the rules that the Government has to follow to acquire goods and services with procurement contracts.

Question 24

Fiscal Year

Answer 24

The fiscal year is the accounting period for the federal government which begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2013 begins on October 1, 2012 and ends on September 30, 2013. Congress passes appropriations legislation to fund the government for every fiscal year

Question 25

Forecast

Answer 25

Predict or estimate (a future event or trend)

Question 26

Joint Resolution

Answer 26

A legislative measure, designated “S. J. Res.” and numbered consecutively upon introduction, which requires the approval of both chambers and, with one exception, is submitted (just as a bill) to the president for possible signature into law. The one exception is that joint resolutions (and not bills) are used to propose constitutional amendments. These resolutions require a two-thirds affirmative vote in each house but are not submitted to the president; they become effective when ratified by three-quarters of the States

Question 27

Mandatory vs. Discretionary Spending

Answer 27

1/3 of total budget that president requests./ Mandatory spending is not subject to the appropriations process that takes place every year. Examples of mandatory spending are Social Security, Medicare.

Question 28

Off-Budget Entities

Answer 28

The budget authority, outlays, and receipts of certain Federal entities that have been excluded from budget totals under provisions of law. At present, off-budget entities include the Social Security trust funds and the Postal Service

Question 29

Omnibus

Answer 29

An omnibus bill is a single document that is accepted in a single vote by a legislature but packages together several measures into one or combines diverse subjects. Because of their large size and scope, omnibus bills limit opportunities for debate and scrutiny./When Congress can’t agree on 12 separate appropriations bills, it will often resort to an omnibus bill - a single funding bill that encompasses all 12 funding areas

Question 30

Procurement

Answer 30

Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement generally involves making buying decisions under conditions of scarcity. Procurement Process: 1. Identify which goods and services the company needs.

2. Submit a purchase request.
3. Assess and select vendors.
4. Negotiate price and terms.
5. Create a purchase order.
6. Receive and inspect the delivered goods.
7. Conduct three-way matching.
8. Approve the invoice and arrange payment.
9. Conduct record keeping

Question 31

Purchasing

Answer 31

Purchasing is the act of acquiring a good or service and how a procurement manager goes about paying for something. Purchasing, on the other hand, identifies how goods and services are ordered. For example, by creating and fulfilling purchase orders and arranging payment for goods.

Question 32

Reconciliation

Answer 32

Government term for the accounting of obligations and expenditures

Question 33

Reconciliation Bill

Answer 33

A bill containing changes in law recommended pursuant to reconciliation instructions in a budget resolution. If the instructions pertain to only one committee in a chamber, that committee reports the reconciliation bill. If the instructions pertain to more than one committee, the Budget Committee reports an omnibus reconciliation bill, but it may not make substantive changes in the recommendations of the other committees

Question 34

Reconciliation Instruction

Answer 34

A provision in a budget resolution directing one or more committees to report (or submit to the Budget Committee) legislation changing existing law in order to bring spending, revenues, or the debt-limit into conformity with the budget resolution. The instructions specify the committees to which they apply, indicate the appropriate dollar changes to be achieved, and usually provide a deadline by which the legislation is to be reported or submitted

Question 35

Supplemental appropriations

Answer 35

From time to time the government has to respond to unanticipated situations for which there is no funding, such as natural disasters. In these cases the government has to allocate additional resources and do so in a timely manner. This type of funding is allocated through legislation known as supplemental appropriations

Question 36

Programming, Budgeting & Execution (PPBE)

Answer 36

The PPBE formalizes the decision process for weighing costs associated with major weapons systems. Purpose is to allocate resources within the DoD. the Secretary of Defense establishes policies, strategy, and prioritized goals for the Department, which are used to guide resource allocation decisions. The PPBE process consists of four distinct but overlapping phases: Planning, Programming, Budgeting and Execution.

Question 37

PPBE Planning

Answer 37

Foreign threats, capabilities, political agendas, and economic conditions are evaluated in relation to national security objectives and available resources. As a result, Defense Planning Guidance (DPG) is developed and used as the primary guide throughout the planning process. The planning phase is a collaborative effort by the Office of the Secretary of Defense (OSD) and the Joint Staff, in coordination with the DoD.

Question 38

PPBE Programming

Answer 38

Begins with development of POM that includes a balanced set of programs that respond to guidance and priorities of the DPG while complying with applicable fiscal constraints. POM Provides detailed, time-phased allocation of resources by program for a future 5-year period, also allows the services to identify important programs that aren’t fully funded and the risks associated with the funding shortfalls.

Shortfalls = “disconnects.”
New programs = “initiatives.”
Funding for disconnects/initiatives = “offsets”

All disconnects and initiatives are prioritized and compete for additional resources. Higher level offices such as OSD, Joint Staff and Combatant Commands can question POM priorities and decisions and recommend adjustments to resources. The proposed adjustments are documented in Resource Management Decision (RMD) documents.

OSD makes all final adjustments and then POMs from all DoD components are consolidated into one comprehensive DoD program. The final POM position forms the DoD Budget and Future Years Defense Program (FYDP).

Question 39

PPBE Budgeting

Answer 39

Worked concurrently with Programming phase–focused only on a single fiscal year. DoD components submit a Budget Estimate Submission (BES) at the same time they submit their POMs.

BES is a more detailed justification of requirements by appropriation–includes R-DOCs for Research, Development, Test and Evaluation (RDT&E) funding and P-DOCs for Procurement funding which are developed in weapon system program offices.

Programs submit R-DOCs and P-DOCs to justify to Congress how RDT&E and Procurement funds will be executed.

OSD reviews the BES and proposed changes are again documented in RMDs. Finalized BES values are submitted to the Office of Management and Budget (OMB) as part of the President’s Budget (PB). The PB is later submitted to Congress for authorization and appropriation.

Question 40

PPBE Execution

Answer 40

Execution begins when President signs the appropriation and authorization bills passed by Congress.

If the budget passed/signed before the beginning of the Government fiscal year, budget execution begins on 1 October and runs through 30 September

If budget is not passed by 1 October, Congress must pass a Continuing Resolution Authority (CRA) which allows the Government to continue to operate until a budget is passed and signed by the President.

During the Execution phase, weapons systems spend funds to acquire and sustain their systems. Execution reviews are conducted during the year to measure how programs are executing their funding. Metrics are used to compare actuals versus planned by weapons system. The metrics also provide senior leaders with feedback which helps determine if adjustments are needed to current year funding as well as in the future years including the POM.

Question 41

Total Obligation Authority (TOA)/Budget Authority (BA)–Under Appropriated Funds

Answer 41

The funds Congress approves/authorizes for use by a program are referred to as Total Obligation Authority (TOA) or Budget Authority (BA) of the program. The funding authorization allows the program to enter into obligations that result in future outlays of Government funds. Congress allocates these funds for particular activities designated by the appropriation of the funds. Appropriations provide accountability to Congress since each appropriation can only be used to fund specific goods and services.

Question 42

Appropriation Status

Answer 42

Active: Currently available for commitments, obligations, payments or adjustments.

Expired: When funds are no longer active, they are expired for a period of five years. During this time, the funds are not available for new obligations. They are only available for valid adjustments to previously obligated amounts

Cancelled: May not be used for any purpose, except to make expenditure/disbursement adjustments to correct errors. Expenditures/disbursements for cancelled year funds are made using current fiscal year funds

Question 43

Time Phasing

Answer 43

When the estimator allocates the estimate/requirements to specific fiscal years.

Question 44

Multi-Year Appropriations

Answer 44

Appropriations that are active/available for obligation for longer than one year. Used to fund:
•	Weapons Procurement
•	Training Devices
•	Support Equipment (Peculiar & Common)
•	Munitions
•	Vehicular Equipment
•	Communications & Electronic Equipment
•	Initial Spares
•	Other Organizational & Base Support Equipment
•	Installation of Communications
•	Interim Contractor Support (ICS)
•	Electronic Systems (Turnkey)*
•	FFRDC and A&AS contractor support related to Procurement efforts

Question 45

Annual Appropriations

Answer 45

Appropriations that are active/available for obligation for a single year.

Question 46

Incremental Funding Policy

Answer 46

A congressional restriction associated with this Appropriation. Budget requests for each FY must only include costs to be incurred during that FY. This specifically includes:

• Labor worked/performed in the FY
• Material orders placed
• Other non-cancelable commitments
• Termination Liability
• FFRDC and A&AS contractor support related to RDT&E efforts

Question 47

Full Funding

Answer 47

Based on the number of units put on contract in a FY regardless of delivery or when costs are incurred, Incremental Funding is based on when costs are incurred by FY. Objective is to request/provide funds at the outset for the total estimated cost of a given item/unit, so that Congress and the public have a complete knowledge of the full dimensions and cost of that item/unit.

Question 48

Advance Procurement

Answer 48

Allows programs to order items that have a long lead in advance of ordering the complete, usable end item.

Question 49

EOQ Procurement

Answer 49

Applies to multi-year procurements when it is advantageous to the Government to buy a certain quantity of items up-front. Funding for EOQ procurements are included in Advance Procurement budget requests.