Budget execution is the process established to carry out the programs for which funds were appropriated. Administering offices, operating budget and sub-allocation holders, and fund administrators execute the budget through the signing of contracts, projects orders, work requests, and other funding documents. Funding documents authorize organizations to provide specified goods and/or services and obligate the government to make payments for such goods and services. Reporting of actual execution performance in terms of obligations and expenditures is key to the management of resources. Reports are prepared at the appropriation, Budget Activity (BA), project, and line item levels to provide oversight of the execution process and to measure program performance against financial plans. Office of the Secretary of Defense (OSD) publishes obligation and outlay rates to be used as a benchmark to assess specific program performance. [1]
During execution, program, competency, and comptroller personnel receive and analyze execution data to determine the need for an upward or downward reprogramming of resources to properly align program requirements and resources in accordance with changes in timing, program emphasis, pricing or other determinants of financial requirements. A budget is a plan and during execution, requirements can change for a variety of reasons. Accounting status reports, as well as program performance reports, indicate the need for additional funding, descoping of program requirements, or availability of savings for diversion to other urgent requirements. As a result, programs are adjusted throughout the year to meet emerging conditions. At mid-year, comprehensive reviews of all performance indicators are conducted throughout DoD, and programs are adjusted as required. The goal of these reviews is to identify funds that can be used to resolve previously unfunded requirements caused by an unforeseen program or pricing changes. [1]
Congress recognizes that priorities change dictating the need for flexibility during budget execution. Within stated guidelines and specified dollar thresholds, Congress allows Federal agencies to reprogram existing funds to finance unfunded or under-funded requirements. Omnibus reprogramming which, except for construction accounts, consolidates all DoD reprogramming actions for submission at the same time subsequent to mid-year review of program execution. Most prior approval reprogramming requests are consolidated by each service/defense agency for submission as part of the annual DoD “Omnibus” reprogramming action. [1]
Whether appropriated funds are legally available for something depends on three things: [1]
- the purpose of the obligation or expenditure must be authorized (purpose)
- the obligation must occur within the time limits applicable to the appropriation (time)
- the obligation and expenditure must be within the amounts Congress has established (amount)
AcqLinks and References:
Updated: 7/19/2017
