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NPR 9420.1A
Effective Date: September 07, 2016
Expiration Date: September 07, 2026
Printable Format (PDF)

Subject: Budget Formulation (Revalidated on September 15, 2021 with Change 1)

Responsible Office: Office of the Chief Financial Officer

| TOC | ChangeLog | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | Chapter6 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | ALL |

Appendix D. Appendix D. The Federal Budget Process Overview

D.1 The Federal budget process is a multi-year activity that occurs over three main phases: Formulation of the PBR, Congressional Actions, and Execution of the Budget (including audit and review). The phases are briefly described to establish the context of Federal budgeting. Authorization is also included as NASA's mission is typically authorized by Congress. Refer OMB Circular A-11, Part 1 for additional Federal budgeting processes, major products, and deliverables.
D.2 Through Authorization Acts, Congress authorizes NASA to conduct its missions, typically within financial, programmatic, and policy guidelines set forth in the Act. Authorization is separate and distinct from the appropriations process and does not provide budget authority (appropriations). The authorizing committees for NASA are the House of Representatives Committee on Science, Space, and Technology and its Subcommittee on Space and Aeronautics, and the Senate Committee on Commerce, Science, and Transportation and its Subcommittee on Aviation and Space.
a. The Subcommittees conduct analyses, reviews, and studies of NASA's investments and consider them in the context of national priorities. The Subcommittees generally formulate recommendations along the lines of the intent and intended outcomes of research and development; operational strategies to improve success (e.g., reviews risk mitigation and controls); specific programmatic approaches to missions and research disciplines of interest to the committees; and reporting requirements. Each Subcommittee prepares and approves a draft authorization bill, which is then considered by the larger Committee. The Committees conference, mark up the bill, and propose it to the full House of Representatives or Senate. If passed, it is referred to the other chamber for consideration. Once enacted, the Authorization Act authorizes NASA to conduct its missions, generally for two or more years. An Authorization Act is typically accompanied by a Conference Committee report. Frequently the Authorization Act will include amendments to NASA's organic legislation, The National Aeronautics and Space Act, 51 U.S.C. ยง 20101 et seq.
b. The Authorization Act does not provide budget authority, but frequently contains restrictions or limitations on the use of appropriated funds. However, actual appropriations may confirm or override authorization language. If the two laws conflict, special guidance will be provided, but NASA leaders will try to harmonize the intent of the two laws. When in doubt, OCFO, OLIA, OGC, and the DCFO for Appropriations will provide guidance based on legislative history or other relevant guidance, such as Government Accountability Office (GAO) interpretations.
D.3 Formulation. U.S.C. Title 31 requires the President to prepare and submit to Congress each year a budget for the United States Government. OMB initiates this process by sending planning guidance to Executive Branch agencies in the spring. Formulation concludes when the President sends the budget and required performance reports and plans to Congress.
a. OMB provides Agencies with an initial budget guidance memorandum each year. This memorandum provides preliminary guidance on spending limits and Administration priorities. Federal agencies present their budget plans in the OMB Submit and through the cross-Government budget formulation system, MAX A-11 Data Entry (DE) application, and other data collection systems. Submission details and instructions are detailed in OMB Circular A-11, Part 2.
b. OMB considers initial budget submissions from both an individual agency and a Government-wide perspective and assesses national needs, economic conditions, and how each agency contributes to Administration goals. They provide agency-specific programmatic and budgetary guidance, including decisions on budget proposals that exceed initial controls (typically called overguide requests), in a process called passback. Agencies may submit an appeal (often termed a reclama) and provide justification materials. After negotiations, OMB finalizes its agency direction in a "settlement" document.
c. Agencies revise their budget estimates to reflect settlement decisions and update these estimates in MAX A-11 DE and cross-Government data collection systems. Managers develop detailed budgets and justifications as presented in the CJ. Before release, OMB reviews and approves submitted materials.
d. OMB Circular A-11 includes an estimated schedule of budget formulation deadlines and milestones, including a release date. Agencies deliver CJs to Congress on the same day that the President releases the PBR, typically the first Monday in February. Any dates are subject to change, and agencies will coordinate release of budget materials with OMB. Agency leaders may receive updated schedule information from OMB budget examiners or through the Budget Officers Advisory Committee (BOAC).
D.4. Congressional Actions. Each year, Congress adopts a concurrent resolution on the budget, setting forth appropriate funding levels for Federal Government operations. This process typically results in an appropriation and subsequent budget authority.
a. The House and Senate discuss and pass a revenue and spending plan for the Federal Government (called a Congressional Budget Resolution), which determines total funds available for mandatory and discretionary spending. This leads to a cap on discretionary spending within each House and Senate Appropriations Subcommittee. The Committees on Appropriations then divide the total discretionary allocation by subcommittee (called 302(b) allocations), which are effectively caps on the total funds available to each subcommittee in formulating bills.
Note: NASA's budget is considered by the Senate and House Appropriations Subcommittees on Commerce, Justice, Science, and Related Agencies, each often referred to as the "CJS Subcommittee" for the respective Appropriations Committee.
b. The House and Senate CJS Subcommittees work independently to mark up the budget for agencies under their jurisdiction and are directed to remain within their established budget limits. During the markup phase, agencies may be called upon to give testimony and provide responses to questions for the record. Committee members review and analyze the PBR and agency CJs. Each subcommittee votes and approves a bill which then moves to the next level of consideration, i.e. the Senate Appropriations Committee or the House Committee on Appropriations. The full Senate and House committees each follow a similar process to review, mark up, and pass an appropriation resolution.
c. The House and Senate appropriations bills typically differ and Congress reconciles them in order to determine a final Conference Agreement spending plan for the budget year. In a process called conferencing, representatives from both sides of Congress engage in negotiations to determine final appropriations. Major programmatic discussion points, comments to the agencies on operations and activities, and recommended detailed funding guidelines are recorded in a Conference Report.
d. Upon conference agreement, the full Congress votes on and passes the budget and sends the appropriation bills to the President for signature. The goal each year is that Congress will pass, and the President will sign appropriations acts by September 30, prior to the beginning of each fiscal year.
e. If Congress does not pass regular appropriations acts by September 30, it usually passes a temporary appropriations act, called a continuing resolution (CR). A CR provides budget authority to fund Government operations for a specific period of time, usually expressed in days or weeks, while Congress continues its appropriations deliberations. Refer to NPR 9470.1.
f. When Congress doesn't pass a regular appropriation or a CR, a lapse in appropriation occurs, and all but "essential" operations of the Federal Government will shut down. The Government resumes operations only when an appropriation or CR is enacted. OMB issues guidance should a lapse in appropriations seem likely.
Note: Within NASA, the CFO will work with other Agency senior leaders to publish and manage a contingency plan for a lapse in appropriations. See OMB Circular A-11.
g. g. Execution. OMB Circular A-11 sets forth procedures for execution of the budget. This means the directing and controlling of funds to achieve the purposes and objectives for which they were approved. In executing the budget, agencies follow specific Federal regulations with respect to planning and management, procurement, accounting, and reporting. During budget execution, agencies provide reports to OMB and Congress on topics such as budget and financial status and performance. (Refer to NPR 9310.1 and NPR 9330.1.)

| TOC | ChangeLog | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | Chapter6 | AppendixA | AppendixB | AppendixC | AppendixD | AppendixE | ALL |
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