Note that the formal view of the budget process on the part of the Executive Branch is somewhat different from the categorization I use. As stated in the Professional and Administrative Work in the Accounting and Budget Group, GS-0500, December 2000, issued by the Office of Personnel Management (https://www.opm.gov/policy-data-oversight/classification-qualifications/classifying-general-schedule-positions/standards/0500/gs0500pa.pdf), the budget process consists of budget formulation, budget presentation/enactment, and budget execution, and “The three phases co-exist during the fiscal year. When the approved operating budget for the current fiscal year is in the execution phase, the proposed budget for the following fiscal year is in the presentation/enactment phase, and the budget request for two years hence is in the formulation phase. The budget cycle for a single budget year covers nearly three calendar years.” I prefer to include the presentation/enactment with formulation.
The general process described is considered the “normal order” of business. The normal order, however, has not been the norm in recent years, so matters related to Congressional action may not play out as described here. However, core elements of the budget process do not change – resources are limited, and decisions as to their use must be made.
- The listing is organized under the major traditional categories used to describe the budget process, budget formulation and budget execution. An oversight category is added as an important element of Congressional responsibilities.
- Pages linked to the process list provide information on what happens, why it happens, what the agency and operating components do, timing of actions, and documents involved.
- Details of legal aspects of the process are not included - they can be found by using the links provided. The process is ruled by legal requirements, but, at the end of the process, the legal details of the process itself have little practical significance for an operating component of an agency when it comes to deciding what money is available and what it is spent on. Organic legislation and administration policies as well as political realities carry the day.
- The steps are repeated each fiscal year. At any one time an agency is simultaneously engaged in one of the steps of the process for three or four fiscal years.
- The sequence given in the budget calendar is chronological, with the earliest events listed first. If you want to view it from the perspective of someone (such as a line manager) attempting to understand what happened in the past to end up with the budget available for operations, go to Key execution step 18 (Action) and work backwards.
Budget execution is everything that needs to be done for making sure that funds become available for the purposes for which appropriated and that they are in fact used for these purposes after Congress has appropriated the funds and the President signed the bill. Functions associated with budget execution include:
- allocating funds to various operating levels,
- establishing controls to assure that they are properly used (this "administrative control of funds" is required in Circular A-11), and
- monitoring and reviewing use of funds to make sure that properly established limits are not exceeded.
Operating component managers have continuing responsibilities for budget execution. In fact, most of the time they spend on budget related matters is budget execution. As the process shows, operating managers do have a role in the budget formulation process, but the aspect of the budget process that affects their day to day operations and that affects their ability to manage is budget execution. Formal requirements are spelled out in agency manuals, generally related to funds control and/or accounting procedures. They involve properly documenting all actions, from the formal allocation of funds to operating managers to certifying the accuracy of accounting reports at the end of each fiscal year.