All agencies obtain funding through appropriations acts, legislation which authorizes the expenditure of funds from the Treasury. Agencies cannot spend what Congress does not provide.
What Congress appropriates is very much related to what the President requests. The President's request is made up of each agency's request to Congress after it has been submitted to OMB (the Office of Management and Budget) and reviewed by OMB (for the President). OMB sets the conditions for the request sent to Congress.
The final element is how the agency allocates the money once Congress appropriates it. After the agency allocates money to operating components, use of money for purchasing goods and services takes place. The allocations of money are clearly described only after the fact.
The budget life cycle of programs and organizational components is real and affects what resources are allocated by decision makers. A separate article addresses the budget life cycle issue. This life cycle must be kept in mind when addressing resources availability issues and on how to go about developing budget requests.
Characteristics of the Process: Relentlessness and Numbers Complexity
All aspects of the process are relentless and unforgiving, as are all processes where outcomes matter. There are winners and losers in the budget process. This characteristic determines the nature of many of the actions involved in the process, its effect on managers, and the tools and skills required to operate in the system.
How the use of money affects individuals, governments, and firms cannot be determined from simply looking at the overall numbers. Information is required on the types of expenses that the agency has planned and that have been approved by Congress. Some agencies use all of their money on payroll, and in these cases the effect of the agency results from actions of its employees. Others have most of their budget for grants, which are given to others to use. Still others have large sums for contracts, which present potential sources of income for contractors and indicate that the agency may not rely as much on its employees as you might think.
In overall terms, the use of funds are detailed in the Appendix to the Budget of the United States. The Appendix materials provide details as to how much will be spent on Federal employees, how much will be available in grants for states, research institutions, and other non profit entities, and how much will be spent on equipment and contracted services.