Color of Money 101

1
Color of Money 101
PEO SYSCOM COMMANDERS CONFERENCE
Siobhan Tack DAU BCEFM Department Chair, CNE
Region Siobhan.tack_at_dau.mil 703-805-4449
2
The Budget Process
1
Identify the Requirement
2
Develop 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
3
Lesson Overview

• Appropriation Categories
• Funding Policies
• Congressional Budget Enactment Process
• Budget Execution Process

4
Major Appropriation Categories
APPN CAT
FUNDING POLICY
SCOPE
RDT E PROC (SCN) O
M MILPER MILCON

RDTE Activities Expenses End items gt 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 lt 750K, Travel, Non-centrally managed
end items lt 100K system unit cost Military
Personnel Expenses Construction Projects gt
750K
INCREMENTAL
FULL
ANNUAL
ANNUAL
FULL
5
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

6
Advance ProcurementLong 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.

7
Congressional Budget Process
Enactment Process

• Budget Resolution
• Authorization Bill
• Appropriations Bill

8
Congressional Enactment Timetable
JAN FEB MAR APR MAY JUN
JUL AUG SEP OCT
15
10
15
1
30
PRES BUDGET
TARGET FISCAL YEAR
CBO REPORT
COMMITTEE INPUTS
HRNGS Marks FLOOR
HOUSE
Budget Resolution
BUDGET RESOLUTION
Conf

SENATE
HRNGS Marks FLOOR
Authorization Act
HASC HRNGS MARK-UP FLOOR
FLOOR
HOUSE
AUTHORIZATIONS
Conf

SENATE
SASC HRNGS MARK-UP FLOOR
FLOOR
HAC HRNGS MARK-UP FLOOR
FLOOR
HOUSE
Appropriations Act
APPROPRIATIONS
Conf
SENATE
SAC HRNGS MARK-UP FLOOR
FLOOR

9
Appeals To Congressional MarksGeneral 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 Presidents Budget
• Acceptable to appeal language and production
  quantities as well as dollar amounts

10
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 years appropriation
Normal rate based on lowest Congressional mark
11
Apportionment Process
Provides Budget Authority
Congress
CRA
Fully Fund Quarterly Fund
Impoundment Deferral Rescission
Apportionment
OMB
Withhold General Reductions
OSD Comptroller
Release
Service Comptroller
Allocation
MAJCOM/PEO Comptroller
Sub-Allocation/ Allotment
PMO Program Management Office
12
Impact of General Reductions on An Acquisition
Program Joint Direct Attack Munition (JDAM)
Program
FY 98 Appropriation (RDTE) 24.70 M
FFRDC 0.00 M
Consultant 0.37 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
13
Apportionment Process
Provides Budget Authority
CRA
Congress
Fully Fund Quarterly Fund
Impoundment Deferral Rescission
Apportionment
OMB
Withhold GR
OSD Comptroller
Release
Service Comptroller
Allocation
Withhold GR/Corporate Bills
MAJCOM/PEO Comptroller
Sub-Allocation/ Allotment
Withhold GR/CB
PMO Program Management Office
Execution
GRGeneral Reductions
14
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
OSD Comptroller
Service Comptroller
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Commitment
C-Color Y-Year A-Amount
PMO Program Management Office
Contractor
15
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
OSD Comptroller
Service Comptroller
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Obligation
Contractor
PMO Program Management Office
16
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
OSD Comptroller
Service Comptroller
Invoice
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Invoice
Contractor
PMO Program Management Office

• Starts work
• Incurs cost

17
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
OSD Comptroller
Service Comptroller
Check
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Expenditure
Contractor
PMO Program Management Office
18
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
Expenditure Reporting System
DFAS Disbursing / Finance Office
OSD Comptroller
Service Comptroller
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Contractor
PMO Program Management Office
19
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
Cash
OSD Comptroller
Service Comptroller
Outlay
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Contractor
PMO Program Management Office
20
Budget Execution
DFAS Region Finance Center
Treasury
Congress
14
Expenditure Reporting System
OMB
13
12
16
OSD Comptroller
DFAS Disbursing / Finance Office
Certification
Service Comptroller
Color Year Amount
3
10
Commitment
2
ACO Administrative Contract Officer
PCO Procuring Contract Officer
MAJCOM/PEO Comptroller
4
7
11
6
Invoice DD 250
Procurement Request Project Order MIPR -
Reimbursable - Direct Cite
8
Negotiation Contract (Obligation)
1
9
15
Contractor
PMO Program Management Office
5
21
Budget Execution
DFAS Region Finance Center
Congress
US Treasury
OMB
DFAS Disbursing / Finance Office
OSD Comptroller
How can we get in TROUBLE?
Service Comptroller
PCO Procuring Contract Officer
ACO Administrative Contract Officer
MAJCOM/PEO Comptroller
Contractor
PMO Program Management Office
Laws - Misappropriation - Anti-Deficiency
- Bona Fide Need
22
Execution Laws

• 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.

• 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.

• Bona Fide Need Rule
• Requires funds to be used only for needs or
  services in the year of the appropriations
  obligation period.

23
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

24
DoD Appropriation Structure Level of Control for
Below Threshold Reprogramming Purposes
25
Below Threshold Reprogramming
APPRN MAX INTO MAX OUT LEVEL OF
CONTROL OBL AVAIL
Greater of -4M or -20
4M
RDT E
2 YEARS
PROGRAM ELEMENT
Greater of -10M or -20
10M
3 YEARS ( 5 YEARS SCN)
LINE ITEM
PROC
BUDGET ACTIVITY SOME BA 1 SUB-ACTIVITY
LIMITATIONS ON DECREASES (OPERATING FORCES)
None Unless Specified
15M
1 YEAR
O M
10M
Not Specified
BUDGET ACTIVITY
1 YEAR
MILPERS
Lesser of 2M or 25

Not Specified
PROJECT
5 YEARS
MILCON
Reference Source Memo Change (30 Oct 96) to DoD
Financial Management Regulation , Volume 3
26
Congressional Prior Approval

• 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)

27
Internal Reprogramming
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)
28
Appropriation Life - Example

• PROCUREMENT APPROPRIATION
• EXPIRED ACCOUNT FY
  1 FUNDS
• CANCELLED
• FY 1 FY 2 FY 3 FY 4 FY 5 FY 6 FY 7 FY 8 FY 9
• NEW OBLIGATIONS NO NEW OBLIGATIONS CURRENT
• APPROPRIATION
• OBLIGATION ADJUSTMENTS
• Limited to lesser of
• EXPENDITURES - 1 of current
• appropriation
• ACCOUNTING IDENTITY - Unexpended balance
• of cancelled appn

94
95
96
97
98
99
00
01
02
00 01 02