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Federal Budget Process

Congressional Budget

Overview. Budgeting essentially consists of four consecutive phases each of which results in the preparation at some level--the Region, Reclamation, Department of the Interior, OMB, Congress--of one or more definable budget documents. The sequence in which these documents are prepared, and the activities required to produce them, together comprise the budget process.

Formulation. (12 months) The formulation phase is the period in which Federal agencies develop their programs and the budget necessary to support that program. The budget formulation phase begins at least full two years prior to the start of the budget year and takes at least one full year to complete before the budget enters the next (presentation) phase.

Basic Guidance Standard guidelines for preparation and submission of all agency budget requests are issued annually by the Office of Management and Budget (OMB) in OMB Circular A-11. A-11 is essentially a procedural manual and does not include any specific guidance on program priorities or dollar targets. Specific budget guidance is periodically provided to federal agencies by OMB--on either a formal or informal basis-- throughout the budget process.

Each annual OMB Circular A-11 is usually amended and modified during the year. However, the circular (as amended) remains in effect until superseded by the succeeding annual circular.

The Secretary of the Interior may also provide guidelines on an informal basis to all bureaus on administration priorities. The Secretary usually does not issue formal guidelines until later in the budget process.

Schedule:  Jun - Jul
Tasks

The Reclamation Washington Office--with input from the Regions-- prepares a draft Annual Performance Plan for BY+2 in compliance with the Government Performance and Results Act (GPRA). The draft Annual Performance Plan reflects Reclamation-wide goals and performance indicators for the BY+2 program.

The Commissioner's Budget Call Letter is issued annually by the Washington Office to the Denver Office and Regions. The Commissioner's Budget Call Letter provides guidance to all offices on development of the BY+1 and BY+2 budgets.

Because Department of the Interior formal guidelines are not received for another 5 - 6 months, initial guidance in the Commissioner's Budget Call Letter is developed from:

  • The Department and Reclamation Strategic Plans.
  • Reclamation's draft Annual Performance Plan.
  • Legislation.
  • Congressional directives.
  • Department of the Interior.
  • Office of Management and Budget.

Examples of the guidance provided in the Commissioner's Budget Call Letter may include:

  • Program goals, performance indicators and performance measures.
  • Administration priorities and goals.
  • Dollar targets for each mainhead appropriation by office.
  • Priorities within the various mainhead appropriations.
  • Criteria for various funding levels and specific instructions for each program.
  • Special instructions regarding:
    • Data entry.
    • FTE requirements.
    • Reimbursable work.
    • Working Capital Fund.
    • Calendar of Events and Due Dates
Schedule:  Jul - Sep
Tasks
Water and Related Resources. Each program manager prepares an activity plan for each project, study or program for which they are responsible. Activity plans are submitted to and consolidated by Business Resources Center Budget Services.

Budget Services supplements the Commissioner's Call Letter with additional guidance from the Regional Director.

The Commissioner's Call Letter and Region supplemental guidance is then provided to Region project managers for their use in formulating project budgets. Supplemental guidance typically includes standard and internal requirements for the particular program such as:

Dollar targets for the program. Absent any formal guidance from OMB or the Department, dollar targets are often based upon a "best guess" of the anticipated funding level, 20% over the best guess, and 20% under the best guess.

  • Region priorities or "key issues" as determined by the Regional Director.
  • Exceptions or exclusions in general.
Schedule:  Sep - Oct
Tasks

Fall Workshops. The region conducts annual budget workshops each fall at the Regional Office and CVP Area Offices for water and power contractors. The primary purpose of the fall workshops is to identify customer priorities for the BY+2 program. Customers are also provided an update on the status of all other outyear budgets.

Schedule:  Oct - Nov
Tasks

Budget Review Committee (BRC) instructions. The BRC is an ad hoc committee formed each year to develop Reclamation's BY+1 program and budget. The BRC is normally chaired by one of Reclamation's five Regional Directors or other senior Bureau executive, and otherwise consists of representatives from each Region, the Reclamation Service Center and the Washington Office. The BRC basically coordinates Reclamation budget activities through the formulation phase.

Schedule:  Oct - Nov
Tasks

In response to all this guidance, Region managers begin developing budget documents for their portions of the various Region programs. The following is a summary by appropriation of the budget formulation process:

CVP Restoration Fund. The CVP Restoration Fund budget is developed by Budget Services in consultation with the Regional Special Projects Officer, and project managers from the Fish and Wildlife Service (FWS). In addition, input is solicited from the CVPIA Roundtable. The CVPIA Roundtable is an interest group consisting of representatives from the environmental, water and power communities, and the Bank of America. The CVPIA Roundtable meets periodically to discuss ongoing CVPIA activities.

Program and Administration (P&A). There are no activity plans for P&A. Rather, the Region P&A budget is formulated centrally in Budget Services with input from Region organizations (such as the Regional Director and Public Affairs Office) which are predominately or wholly funded by that appropriation.

Loan Program. There are no activity plans for the loan program. New loans usually originate as a result of Congressional write-ins. The Region construction appropriations coordinator develops the loan program based upon discussion with those entities already under the program.

Revolving Funds. The only revolving funds in the Region are the working capital funds. Activities covered by each WCF are included in the indirect rate calculation for each appropriations budget.

Trust Funds. Neither Reclamation nor the Region budget for trust funds, however, anticipated non-Federal funding is included in the budget submittal.

Transfer Funds. Reclamation develops budget detail in support of activities covered by transfer appropriations.

A Regional Work Group convenes with the appropriate program managers to reconcile activity plans against current or projected budget levels. Customer priorities are considered as part of the work group deliberations. The work group lead then represents the Region at the Reclamation Work Group.

Schedule:  Nov - Jan 1
Tasks

The Reclamation work group develops Reclamation-wide funding priorities in terms of budget targets: "at target" (anticipated OMB limit); "over target" (e.g., 20% over the anticipated OMB limit); and "under target" (e.g., 20% under the anticipated OMB limit). The over and under priorities provide Reclamation management with a plan for accommodating reductions or increases during budget deliberation.

Schedule:  Feb - Apr
Tasks

Upon completion of the above activities, Budget Services consolidates program and budget information for all appropriations budgets into a single document. This document is the BRC Notebook. The Region's BRC Notebook is submitted to the BRC for review.

Schedule:  Apr - May
Tasks

The BRC reviews initial data in the Region BRC Notebook and develops questions for each Region about individual programs. Once these questions are answered, the BRC conducts on-site visits to each Regional Office to evaluate their respective program and budget requests.

Schedule:  May - Jun
Tasks
At the conclusion of the on-site visits, the BRC develops final budget recommendations for presentation to the Commissioner's Leadership Team (Leadership Team). The Leadership Team consists of the Commissioner, Deputy Commissioner, all Regional Directors, the Director of the Reclamation Service Center and all other Reclamation senior executives.

The Leadership Team deliberates on BRC recommendations, then prepares final recommendations for decision by the Commissioner.

Schedule:  May - Jun
Tasks

The Commissioner's decisions form the basis for Reclamation's budget proposal. The Reclamation Washington Office prepares the first draft budget proposal which summarizes Reclamation's total budget request in support of the BY+1 program.

Each Region reviews and comments on the draft budget proposal. Comments are consolidated by the Reclamation Washington Office which submits an updated draft budget proposal to the Assistant Secretary for Water and Science for review and concurrence.

After providing comments to the draft budget proposal, each Region begins preparation of budget estimate documents. Budget estimates list the estimated costs of all programs by project. They consist of narrative backup and supporting schedules for each project.

Schedule:  Aug - Sep
Tasks

Upon concurrence by the Secretary, the budget proposal is submitted through the Department to OMB.

The budget estimate documents are submitted to the Washington Office for review and assembly. The Washington Office works closely with the Region/program office budget staffs.

Schedule:  Oct - Nov
Tasks

Based upon review and analysis of the Reclamation budget proposal and budget estimates, OMB provides the Department with the OMB Allowance ("OMB passback"). The OMB passback consists of comments, direction, and guidance in support of administration policies.

Presentation Phase.  (4 - 5 months) The presentation phase involves completion of final budget documents for presentation of the President's Budget Request to Congress.

Regions develop budget justifications in conformance with OMB passback guidance. Budget justifications are essentially a revised version of the budget estimates. As with budget estimates, budget justifications are developed for each appropriation by project. The main difference is that budget justifications are updated to include actual costs for the Past Year and any recissions, write-ins or other changes made by Congress during deliberations on the Budget Year budget.

Schedule:  Dec - Jan
Tasks

Reclamation may convene a Budget Justifications Workgroup to review, reconcile and finalize Region budget justifications documents. Final budget justification documents are submitted through the Department to OMB which reviews for conformance with new or emerging administration guidance.

Schedule:  Jan - Feb
Tasks

Program and budget information from the completed budget justifications is rolled up by mainhead appropriation and object class for inclusion in the appendix to the President's Budget Request. The President's Budget Request (with Appendix) is the administration's official financial plan for the budget year. The President's Budget Request is submitted to Congress normally in early February. Each individual appropriation in the President's Budget Request is introduced as a bill in the House of Representatives then referred to the proper sub-committee for action.

Reclamation's budget is included in the appropriation bill for Energy and Water Development.

The budget justification documents themselves are submitted to Congress concurrently with the President's Budget Request and Appendix. The budget justification documents are the basis for hearings by the House and Senate appropriations committees.

Legislation Phase. (6 - 8 months) The legislation phase is the period during which Congress considers the President's Budget Request. Dates and schedules are highly subjective, depending upon current national issues, the make up of the particular Congress, and whether or not it is an election year.

Upon request, the Region provides additional information for use by the Commissioner and other Reclamation officials during Congressional Hearings. The information is normally in the form of:

Congressional consideration of the Bureau's budget request begins in the House of Representatives with the subcommittee on Energy and Water Development.

Schedule:  Mar - Apr
Tasks

The Commissioner and other Bureau officials give testimony on the Bureau's budget request. This usually includes both prepared statements and responses to specific questions raised by individual committee members.

Responses to many questions raised during the hearing process are satisfied by briefing material prepared in advance. Other questions are referred to the appropriate Region for preparation of responses to be submitted to the record.

Responses are extremely time-sensitive. Because of the stakes involved, responses must also be accurate and effectively worded. Budget Services is the point-of-contact within the Region for coordinating responses to hearings questions. To the maximum extent practicable, Region project managers are expected to be available throughout the course of the hearings (normally 2 - 3 days) to prepare responses. If the project manager cannot be available, he or she needs to identify a back-up in advance of the hearings.

The Energy and Water Subcommittee reports to the Appropriation Committee. The Appropriation Committee, in turn, reports to the full House membership. During this process, Reclamation may receive additional funds or work as a "write-in." Likewise, programs may be modified or funds reduced. This is referred to as the House "mark-up."

Schedule:  Jun - Jul
Tasks

After the "mark up" bill is passed by the House, it is forwarded to the Senate and progresses through steps similar to those taken by the House. The result is a Senate "mark-up."

Schedule:  Jul - Sep
Tasks

Variations between the bill passed by the House and the Senate are referred to a conference committee comprised of both House and Senate members to resolve.

When all differences are resolved, the conference committee report on the bill must be approved by the full House and Senate in that order.

Schedule:  Sep
Tasks

After the Senate's passage of the House version of the bill, or the approval of a conference report by both bodies of Congress, the bill is forwarded to the President for signature or veto.

Schedule:  Sep - Oct
Tasks

If the President should veto the bill, it must be voted on again by Congress. If it is approved by a two-thirds vote of both Houses of Congress, it is passed despite the President's veto.

The approved bill becomes the Energy and Water Development Appropriations Act for that particular budget year.

Execution Phase. (14 months) The execution phase is the period in which federal agencies execute and control obligations and spending within the approved budget authority and employment levels.

On October 1, execution of individual programs begins in accordance with the Appropriations Act.

If the appropriations bill has not been passed, a continuing resolution (CR) is normally enacted as a stopgap measure providing operational funds on a temporary basis until a bill is passed.

The financial records (PABS and FFS) for each Region are updated by the respective Budget offices for all active programs to include: