Presentation on theme: "The Life Cycle of a Budget"— Presentation transcript:
1The Life Cycle of a Budget The Full Cycle of a State of Alaska Operating Budget Request
2Budget Definitions and Flow of Budget Process See handout—Glossary of Key Budget Terms, published by the Office of Management and BudgetSee handout—Flow chart of a typical operating budget flow process.
3Operating Budget Process Alaska’s budget process is continuous and iterative, involving all levels and branches of government. Those involved in the budget process deal with different references in time—looking backward to gain from experience, implementing and monitoring the current year budget, and planning for future public needs.Preparation of the operating budget begins long before the legislature convenes.
5In the Beginning….The budget cycle begins in late-July, early-August of each year. This begins establishing the succeeding, or next fiscal year’s budget, e.g. in July of FY09, Management begins the development of the FY10 operating budget.Management first identifies “big picture” items—significant changes in the agency’s budget from the prior fiscal year operating budget appropriations. These items are reviewed with the Governor’s Office (OMB). Approved items are then submitted in the Governor’s Budget Request.
6Increments and Decrements Increment—a request for new and/or additional funding authorityDecrement—not as much is needed as last year
7Program NarrativesThe narrative portion of an operating budget provides information about a budget entity (department, division, or component).Narratives describe core services, key challenges, and measures for determining the entity’s success.
8Program Narrative The division narrative consists of: Contribution to the Dept MissionCore ServicesPerformance MeasuresActivitiesKey ChallengesChanges in ResultsAccomplishmentsStatutes/Regulations that govern division
9Operating Budget Entered in ABS After narratives, Budget Unit begins entering operating budget information into the Alaska Budget System (ABS)There are separate modules in ABS that data is entered:Revenue detailExpenditure detailPersonal Service ModuleChange Records
10Revenue Detail: detail is provide for all restricted revenues Revenue Detail: detail is provide for all restricted revenues. There are more than 200 various fund sources within the State of Alaska; only the DOC’s 6 restricted revenue types are shown below:Federal ReceiptsGeneral Fund Program Receipts (GFPR)Interagency Receipts (I/A)Capital Improvement Project Receipts (CIP)Receipt Supported Services (RSS)Statutory Designated Program Receipts (SDPR)
11Restricted Revenue What is restricted revenue? Funding is restricted for a particular purpose, e.g. federal funding can occur only for that particular purpose, as stipulated by federal grant requirements.AS
12Unrestricted RevenueUnrestricted revenues do not need to be reconciled in the operating budget exercise. Unrestricted revenue is General Fund dollars that are appropriated for any purpose within the constraints of the appropriations structure and mission.
13Expenditure DetailExpenditure detail provides descriptions of expenditures relating to the following items, and budgeted to the appropriated amount:Travel 72000Services 73000Commodities 74000Capital Outlay 75000Grants and Benefits (DOC has no authorization within this expenditure line.)
14Personal ServicesA personal services module is located in components that have positions reporting directly to that component. A personal services module contains:Funding sources for each position that balance to funding sources specifically allocated for personal servicesBenefit rates (based on bargaining unit and position status)Vacancy Factor (based on the expectation that not all positions will be filled 100% of the time during a fiscal year)*Organization Charts (submitted separately from ABS)*Note: The DOC received full funding for ALL Institutional positions in FY09.
15Change Records Types of Change Records Atrin: agency transfer-in (between depts)Atrout: agency transfer-out (between depts)Dec: decrementFndChg: fund changeInc: incrementLIT: line item transferOTI: one-time itemPosAdj: position adjustmentSalAdj: Salary adjustmentTRIN (transfer-in within a dept)TROUT (transfer-out within a dept)
16Overview of the Pre-session Activity The division’s balanced budget has been submitted to the department level, what happens next?Deputy Comm presents to CommDepartment submits to OMBOMB may request changesGovernor releases budget by December 15thBudget Unit prepares Budget Overviews for session
18Activity During Session Legislature convenes on the 3rd Tuesday in JanuaryHouse and Senate Finance Committees set agency fund targets that the subcommittees are expected to meet.Subcommittees are charged with reviewing the Governor’s Budget Request, hearing testimony from agency personnel (Budget Overview presented) and other interested parties, and developing budget recommendations to be presented to the full Finance Committee.
19Subcommittee prepares report for Finance Committee(s) that include: Agency totals: highlights big picture changes in funding, positions, and line itemsAppropriation Summary of general funds only at the appropriation/allocation levelAppropriation Summary of all funds at the appropriation/allocation levelTransaction Comparisons: list of the individual transactions generating the funding/position changes from one state of the budget to the next
20Finance Committee Closeout Public testimony is heard and the finance committee members prepare and submit amendments to the finance committee co-chair prior to the full finance committee meeting.Adopted amendments are incorporated into a committee substitute bill, which is then sent to the floor for additional amendments and a final vote.
21Conference Committee Process The House and Senate work independently, inevitably they produce different bills. A conference committee is appointed to reconcile the differences between the House and Senate versions of the operating bill.After the conference committee has resolved the differences, the conference committee’s substitute bills are sent to both floors for a vote and then transmitted to the governor.Conference committee bills cannot be amended on the floor.
22Governor Signs the Operating Budget Bill If an appropriation bill is transmitted to the governor after session, the governor has 20 working days to review the bill and exercise line item veto power. The bill becomes law and is typically effective with the beginning of the fiscal year on July 1. Some sections of the appropriations bills may have other effective dates.
24And you thought we were done….. Management Plan is the final exercise to the operating budget. This typically begins in late-July to mid-AugustLast chance for change recordsRebalance personal services to AKPAY, add new approved positions, etc.Identify PCNs vacant for 12 consecutive months. (Unless approved by OMB in writing, positions vacant for more than 12 consecutive months are to be deleted)Adjust line balances based on appropriations and allocationsSubmit final management plan to OMB for approval
25Can you change the Approved Mgmt Plan? Once the management plan has been approved by OMB, it can be modified through the Revised Program (RP) process.
26There are various types of Revised Programs (RPs) for various actions There are various types of Revised Programs (RPs) for various actions. The following is a listing of common RPs used within DOC. An RP requires the approval of the Administrative Service Director who is the final responsibility for departmental financial status. Internal Approved RPs do not require OMB approval.Transfer between non-personal linesTransfer between allocations within an appropriation or sub-appropriation.Unbudgeted Reimbursable Services Agreement (RSA) less than $100,000 (amount is accumulative)Restrictions (uncollectable restricted authorization or specific general fund authorizations.)
27The common RPs used within DOC cont’d: The following is a listing of common RPs used within DOC that require additional approval by the Office of Management & Budget (OMB) within the Governor’s office.Establish of new or reclassification of existing positions resulting in a change of more than 2 rangesTransfer of personal services authorizationUnbudgeted RSA’s greater than $100,000 (requires OMB approval / amount is accumulative)Increase authorization to spend unbudgeted federal or other receipts (requires approval by Legislative Budget & Audit (LB&A))
28Three at once….Post-Session and Pre-Session Overlap In the months of July and August, we juggle:Prior fiscal year close-out and reappropriation;Current fiscal year management planNext fiscal years Governor’s budget request….start the cycle again