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Color of Money 101 PEO SYSCOM COMMANDERS’ CONFERENCE Siobhan Tack DAU BCEFM Department Chair, C&NE Region 703-805-4449.

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Presentation on theme: "Color of Money 101 PEO SYSCOM COMMANDERS’ CONFERENCE Siobhan Tack DAU BCEFM Department Chair, C&NE Region 703-805-4449."— Presentation transcript:

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2 Color of Money 101 PEO SYSCOM COMMANDERS’ CONFERENCE Siobhan Tack DAU BCEFM Department Chair, C&NE Region

3 #1 Identify the Requirement #2Develop A Cost Estimate #3 Apply Appropriations and Funding Policies #4 Budget using PPBS #5 Congress Appropriates through the Enactment Process #6 Get to Work during the Execution Process

4 Lesson Overview Appropriation Categories Funding Policies Congressional Budget Enactment Process Budget Execution Process

5 Major Appropriation Categories APPN CAT FUNDING POLICY RDT & E PROC (SCN) O & M MILPER MILCON SCOPE RDT&E Activities & Expenses End items >= $100K system unit cost, All Centrally managed items, Initial Spares, Labor for certain production-related functions (e.g., item assembly, quality assurance) Replenishment Spares, Fuel, Civilian Salaries, Construction Projects < $750K, Travel, Non- centrally managed end items < $100K system unit cost Military Personnel Expenses Construction Projects >= $750K INCREMENTAL FULL ANNUAL FULL

6 Multiyear Procurement (MYP) Exception to Full Funding Policy Commitment to buy a specific quantity of useable end items of a weapon system over a specified number of years (normally, maximum of five years) Annual Appropriation by Congress for same specified number of years Purpose: - Reduce program cost growth - Counteract adverse effects of the annual budget and procurement process - Bring stability to acquisition process

7 Advance Procurement Long Lead Items Exception to Full Funding Policy –Contained in Acquisition Strategy –Approved in Milestone Decision –Separate initial contract Finances Long Lead (Recurring) Components –To protect production schedule –To maintain a critical skill in the workforce Generally, Budget Authority requested / granted one Fiscal Year in advance of the related end item contract Shown as a separate line item on the budget request.

8 Budget Resolution Authorization Bill Appropriations Bill Congressional Budget Process Enactment Process

9 AUTHORIZATIONS BUDGET RESOLUTION APPROPRIATIONS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT COMMITTEE INPUTS HOUSE SENATE HOUSE SENATE HOUSE SENATE HASC HRNGS MARK-UP FLOOR FLOOR SASC HRNGS MARK-UP FLOOR FLOOR Authorization Act CBO REPORT PRES BUDGET “TARGET” FISCAL YEAR HAC HRNGS MARK-UP FLOOR FLOOR SAC HRNGS MARK-UP FLOOR FLOOR Conf ^ ^ Congressional Enactment Timetable HRNGS Marks FLOOR Budget Resolution ^ Conf Appropriations Act Conf

10 Appeals To Congressional Marks General Rules Between Congress And DoD Each phase (i.e., Authorization and Appropriation) is separate Appeal to next Committee of that phase considering the budget request (e.g., appeal to the SASC, SAC and/or the appropriate conference committee) Appeal to amount closest to President’s Budget Acceptable to appeal language and production quantities as well as dollar amounts

11 Continuing Resolution If Congress fails to pass appropriations bills prior to 1 October, it may pass a joint Continuing Resolution which must be signed by the President Continuing Resolution Authority is stopgap spending authority allowing the federal government to continue operating –Allows obligation of funds at the “current rate of operations” usually based on one of these levels: ____________________________________ –New Start programs and expansion of current program scope NOT PERMITTED Normal rate based on last year’s appropriation Normal rate based on lowest Congressional mark

12 Apportionment Process OSD Comptroller MAJCOM/PEO Comptroller Congress OMB Service Comptroller PMO Program Management Office Provides Budget Authority Apportionment Release Allocation Sub-Allocation/ Allotment Fully Fund Quarterly Fund CRA Impoundment: Deferral Rescission Withhold General Reductions

13 Impact of General Reductions on An Acquisition Program Joint Direct Attack Munition (JDAM) Program FY 98 Appropriation (RDT&E) $24.70 M Consultant 0.37 M FFRDC $ 0.00 M Budget Cap 0.14 M National Missile Defense 0.31 M Small Business Innovative Research 2.03 M Inflation Reduction 0.13 M Total General Reductions $ 2.98 M Remainder$21.72 M Taxes Reduction = 12.1 % of Amount Appropriated

14 Apportionment Process OSD Comptroller MAJCOM/PEO Comptroller Congress OMB Service Comptroller PMO Program Management Office Provides Budget Authority Apportionment Release Allocation Sub-Allocation/ Allotment Execution Fully Fund Quarterly Fund CRA Impoundment: Deferral Rescission Withhold GR Withhold GR/Corporate Bills Withhold GR/CB GR=General Reductions

15 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Commitment C-Color Y-Year A-Amount

16 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Obligation

17 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Invoice Starts work Incurs cost

18 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Expenditure Check

19 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Expenditure Reporting System

20 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Outlay Cash

21 Budget Execution DFAS Region Finance Center Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Procurement Request Project Order MIPR - Reimbursable - Direct Cite Commitment Color Year Amount Certified PR Negotiation Contract (Obligation) Record of Obligation Contract Surveillance Certified Invoice / DD 250 Check / EFT (Expenditure) Voucher Summary Cash (Outlay) Check Expenditure Reporting System Certification Invoice DD

22 Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Apportionment Process Laws: - Misappropriation - Anti-Deficiency - Bona Fide Need How can we get in TROUBLE ?

23 Execution Laws Anti-Deficiency Act [Title 31, U.S. Code, Sec 1341 & 1517 ] –Prohibits making or authorizing an obligation in excess of the amount available. –Forbids obligation to pay money from the US Treasury in advance of an appropriation. –Requires agency to fix responsibility for violations of the Act. Misappropriation Act [ Title 31, U.S. Code, S1301] – Requires funds to be used only for the purposes and programs for which the appropriation was made. Bona Fide Need Rule: – Requires funds to be used only for needs or services in the year of the appropriations obligation period.

24 Reprogramming Process of redirecting funds for purposes other than those contemplated at the time of appropriation. Reprogramming rules are based on agreements between DoD and Congress. DoD informs Congress of all Reprogramming via a semi-annual report. Types of Reprogramming actions: –Internal –Below Threshold –Congressional Prior Approval

25 DoD Appropriation Structure Level of Control for “Below Threshold” Reprogramming Purposes Projects RDT&E Budget Activity Program Elements Procurement Budget Activity Line Item Sub Activity MILPER Budget Activity Group Sub Activity O&M Activity Group Budget Activity Project MILCON Budget Activity Group

26 Below Threshold Reprogramming RDT & E APPRN MAX INTOMAX OUT LEVEL OF CONTROL OBL AVAIL PROGRAM ELEMENT 2 YEARS LINE ITEM 3 YEARS ( 5 YEARS SCN) BUDGET ACTIVITY 1 YEAR 5 YEARS PROJECT PROC MILPERS MILCON O & M BUDGET ACTIVITY SOME BA 1 SUB-ACTIVITY LIMITATIONS ON DECREASES (OPERATING FORCES) Reference Source: Memo Change (30 Oct 96) to DoD Financial Management Regulation, Volume 3 + 4M Greater of -4M or -20% +10M Greater of -10M or -20% +15M None Unless Specified +10M Not Specified Lesser of +2M or +25% Not Specified

27 Applies to Actions Involving: –General Transfer Authority (between appropriations) –Major System Procurement Quantity Increases –Congressional Special Interest Items –Amounts exceeding specified thresholds within an appropriation –Initiation of new programs or new starts within existing programs exceeding amounts –Termination of programs meeting certain criteria Requires: –Approval by USD (Comptroller) –Approval by HAC / SAC and HASC / SASC –Approval by House and Senate Committees on Intelligence (for intelligence assets) Congressional Prior Approval

28 Applies To: - Reprogramming actions that do not involve changes from the purpose and amounts justified in budget presentations to Congress Requires: - Approval by the USD (Comptroller) Internal Reprogramming

29 Appropriation Life - Example PROCUREMENT APPROPRIATION EXPIRED ACCOUNT FY 1 FUNDS CANCELLED FY 1 FY 2 FY 3FY 4FY 5FY 6FY 7FY 8FY 9 NEW OBLIGATIONSNO NEW OBLIGATIONSCURRENT APPROPRIATION OBLIGATION ADJUSTMENTS Limited to lesser of: EXPENDITURES- 1% of current appropriation ACCOUNTING IDENTITY- Unexpended balance of cancelled appn


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