1. Fiscal Year 2003 Budget Overview Debbie Curtis Budget Team Leader April 30, 2003

2. UNIFIED BUDGET FA Social Security Trust Fund Treasury General Fund Mandatory TA FA Direct Discretionary Reimbursable Direct Reimbursable TA Direct Reimbursable Direct Reimbursable ON-BUDGET OFF-BUDGET

3. What are Mandatory Funds? Funds available to persons who meet certain requirements. Includes all CCC funded programs. Accounts for about 2/3 of all government spending. Amount is included in the authorization; Congress does not have to act in order for funds to be available. Controlled by “Pay-As-You-Go” (PAYGO) Includes: Farm Price Supports.

4. What are Discretionary Funds? 13 annual appropriation acts. Congress must act in order for discretionary funds to be available. If not, no obligations may be incurred. Accounts for about 1/3 of all government spending. Includes All NRCS Appropriations. Controlled through Spending Caps.

5. Direct Funds – how does NRCS get them? Direct funds come from NRCS appropriations: –Conservation Operations –Watershed Surveys and Planning –Watershed & Flood Prevention Operations –Resource Conservation & Development –Watershed Rehabilitation Program Some of the direct funds come from transfers from CCC and other Federal Agencies: –Farm Security and Rural Investment Program –Rural Abandoned Mine Program

6. Reimbursable Funds – where does NRCS get them? Reimbursable funds are received from sources other than appropriations or transfers from other federal agencies. Sources include: –Other USDA Appropriations –Other Federal Appropriations –State & Local Government –Private Entities

7. FY 2003 Discretionary Funds Conservation Operations Watershed and Flood Prevention Watershed Surveys & Planning Watershed Rehabilitation Resource Conservation & Development TOTAL $825,004,000 $110,000,000 $11,197,000 $30,000,000 $51,000,000 $1,027,201,000

8. FY 2003 Mandatory Funds EQIP FPP WHIP GRP GSWC Klamath Basin WRP CSP TOTAL $695,000,000 $100,000,000 30,000,000 $85,000,000 $45,000,000 10,136,000 240,000,000 3,700,700 $1,208,836,000

9. What does direct charge mean? Title 31 of the United States Code (1301(a)) requires that all costs associated with implementing a program to be charged to the benefiting program. Examples include: Salary Benefits Travel Training Other Indirect Costs

10. What is so hard about direct charge? Much more “management” involvement required. Many employees work on several programs. Many costs benefit multiple programs. –General managers and administrative costs –Utilities and communications –Supplies –State Office and Service Center rent –Printing –Postage, NFC and FFIS costs, etc.

11. How does NRCS manage the difficulties associated with direct charge? NRCS implemented “offset” policy many years ago. “Offset” allows costs to be “charged as budgeted” based on the following assumptions: Allocations are converted to fundable staff years, by program. Fundable staff years, in each program, are converted to performance goals. Performance goals are incorporated into business plans. Performance plans are monitored to ensure that the proper work is being performed and corrective action is taken (if necessary) to ensure that goals are being met. Adjustments are made to the performance plan whenever an allowance holder receives a large change in their allocation that affects fundable staff years, such as EWP funds made available in March.

12. Does everyone agree that “offset” satisfies these requirements? A GAO audit of NRCS titled “Additional Actions Needed to Strengthen Program and Financial Accountability reported: …”the policy of charging as budgeted and not as worked often misstates a project’s costs by underestimating the costs to one account and overstating the costs to another….” (GAO/RCED-00-83 dated April 2000)

13. FY 2003 Fiscal Guidance Initial allowance letters to STC’s 1.Limit obligations to amount available 2.Use funds as intended by Congress 3.Assure that planning is charged to CTA 4.Encourage the use of TSP’s 5.Assure equity in program delivery

14. 6.Assure that obligations align with actual costs of program 7.Track Congressional earmarks 8.Assure accurate and timely reporting of obligations 9.Assure accurate and timely reporting of performance 10.Monitor obligations in Farm Bill programs—these funds expire 9/30/03 More Guidance

15. WebTCAS Actual Hours Paid Actual Hours Worked ACRESFFIS (NFC) Program Activity Modifier County Assigned Fund Code Internal Decision Making Official External Reporting (Audited Annually)

16. What is “cost” in CIS reports? Salary and benefit cost data -- WebTCAS/ACRES –Includes dollars for actual hours worked (hourly rate times hours worked), by program/activity/modifier as entered in TCAS by an employee for: Basic pay hours worked Credit hours worked Comp time worked Overtime worked Support data -- obligations recorded in the accounting system (FFIS) in “support” object classes plus lump sum leave, awards, and agreements.

17. What is an “obligation” in CIS reports? Salary and benefit obligation data -- FFIS –Includes dollars obligated for actual hours paid, by fund code, as entered in the WebTCAS master file for: Basic pay hours paid (includes paid leave) Credit hours paid Comp time paid Overtime paid Support data -- obligations recorded in FFIS in “support” object classes plus lump sum leave, awards, and agreements.

18. Meet Mr. NRCS In pay period 15, Mr. NRCS worked 40 hours on CRP and 40 hours on EQIP He entered this information into WebTCAS by program, activity, and modifier His assigned “fund code” is CTA-General His “fund code” was determined in the cost allocation process and entered into the WebTCAS master record by the timekeeper

19. What do we see in CIS for Costs? Costs associated with 40 hours of Mr. NRCS CRP included here. 23,125 Costs associated with 40 hours of Mr. NRCS EQIP included here.

20. What are Mr. NRCS “costs” in CIS for pay period 15? 40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for CRP 40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for EQIP Associated benefits will be recorded in both CRP and EQIP benefit “cost” columns based on rate identified at beginning of fiscal year for each retirement type

21. What do we see in CIS for obligations? Mr. NRCS dollars and associated hours are included here.

22. What are Mr. NRCS “obligations” in CIS for pay period 15? 80 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “obligation” column for CTA- General Actual benefits will be recorded in the CTA-General benefit “obligation” column based on actual charges to the agency for Mr. NRCS: –Retirement –Life Insurance –Health Insurance –FICA/Medicare –COLA (for overseas employees)

23. Why are there differences? It could be the difference between: –Credit hours worked in WebTCAS vs. credit hours paid in FFIS –Comp time hours worked in WebTCAS vs. comp time hours paid in FFIS –Benefit costs (estimated) in WebTCAS vs. benefit costs (actual) in FFIS –Overtime capped at 1.5 times GS-10 step 01 hourly rate for Washington DC locality in WebTCAS vs. cap applied not to exceed 1.5 times the basic hourly rate for a GS-10/1 in FFIS –Obligation adjustments not processed through WebTCAS

24. What causes the most significant differences? “Direct” charge of hours by program/activity/modifier in WebTCAS interfaced into ACRES VS “Offset” charge of hours by fund code assigned to each employee in the cost allocation process interfaced into FFIS

25. Why are there differences between direct charge of time & cost allocation charge of time? Bottom line – By the end of the fiscal year, direct charge hours should be very close to cost allocation hours except for those funds in which NRCS was not fully reimbursed for actual work performed

26. Why aren’t they closer? You have to plan your work then You have to work your plan This demonstrates adherence to one of the fundamental laws of Title 31 of the United States Code: “Appropriations must be used for the purpose intended by Congress only.”

27. CTA BASE

28. Thank you!