Budgeting: AF Builds Budget Position (POM) October 1st. OSD Review s AF POM. President s Budget (PB) Submitted
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1 Budgeting Planning: Programming: Budgeting: Execution: Assessing threat & determining resources Integrating fiscal, manpower & materiel requirements Refining cost estimates Evaluating output against planned performance AF Builds Budget Position (POM) OSD Review s AF POM 1 st Monday in February President s Budget (PB) Submitted Congress Reviews PB Funding Appropriated to AF Programs October 1st AF Spends Funds as Specified
2 Congress: Authorizations versus Appropriations Authorization Provides direction plus permission to conduct activities and spend funds Authorized by statute Policy oriented Separate bills written in House and Senate Generally permanent laws Resulting Law: The National Defense Authorization Act Appropriation Provides budget authority to draw funds from U.S. Treasury Mandated by Constitution Budget oriented Bill traditionally originates in House Generally one-year laws Resulting Law: The Defense Appropriations Act If Congress appropriates more funds than it authorizes, DoD may withhold the excess funds and go back to the authorizers to obtain approval to use the money for the specified efforts. If more money is authorized than appropriated, it doesn t matter only appropriated funds are available for use
3 Congress: Defense Committees and Subcommittees HASC: House Armed Services Committee Tactical Air and Land Forces Military Personnel Readiness Seapower and Projection Forces Strategic Forces Emerging Threats & Capabilities Oversight and Investigations SASC: Senate Armed Services Committee AirLand Personnel Readiness and Management Support Seapower Strategic Forces Emerging Threats and Capabilities HPSCI: House Permanent Select Committee on Intelligence HAC: House Appropriations Committee Defense (HAC-D) Military Construction, Veterans Affairs, and Related Agencies [plus 10 other subcommittees] SSCI: Senate Select Committee on Intelligence SAC: Senate Appropriations Committee Defense (SAC-D) Military Construction, Veterans Affairs, and Related Agencies [plus 10 other subcommittees] Defense authorization Intelligence authorization Appropriations
4 Section IV PPBE Financial & Program Structure Air Force Planning & Programming RAPIDS & ABIDES Reference Key Topics Program Budget Review President s Budget Justification Documentation Congressional Reviews Program Execution Financial Knowledge for PEMS Program Element Anatomy RAPIDS & ABIDES Example Writing Budget Docs Congressional Marks & Language O&E Rates Omnibus
5 Funding: Colors of Money Investment Accounts Appropriation Research, Development, Test, & Evaluation, or RDT&E, Air Force Abbreviation Treasury Code Funding Type RDT&E, AF 3600 Incremental Aircraft Procurement, Air Force APAF 3010 Full Procurement of Ammunition, Air Force PAAF 3011 Full Missile Procurement, Air Force MPAF 3020 Full Other Procurement, Air Force OPAF 3080 Full Military Construction, Air Force MILCON, AF 3300 Full Operations & Maintenance or O&M, Air Force OMAF 3400 Annual Military Personnel, Air Force MILPERS, AF 3500 Annual
6 Funding: Lifetime of Money Funds FY#1 FY#2 FY#3 FY#4 FY#5 FY#6 FY#7 FY#8 FY#9 RDT&E Act Act Exp Exp Exp Exp Exp Canc Canc Proc. Act Act Act Exp Exp Exp Exp Exp Canc MILCON Act Act Act Act Act Exp Exp Exp Exp O&M Act Exp Exp Exp Exp Exp Canc Canc Canc MILPERS Act Exp Exp Exp Exp Exp Canc Canc Canc RDT&E: Incremental funding 2 year lifetime Procurement (all types): Full funding 3 year lifetime MILCON: Full funding 5 year lifetime O&M and MILPERS: Annual funding 1 year lifetime Active Funds: for new obligations, adjustments to existing obligations, expenditures and outlays Expired Funds: for adjustments to existing obligations, expenditures and outlays Canceled Funds: no more money!
7 PPBE: Time & Money Future: Annual Budgeting FY15 FYDP FY15 FY16 FY17 FY18 FY19 FY16 FYDP FY17 FYDP FY16 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Baseline Extension FY21 Continuing Resolution ended 15 January; Omnibus Spending Bill passed 18 January FY15 Budget submitted to Congress MAJCOM, PEOs, Acquisition Centers and HAF formulating the FY16 Budget Soon: The Budget Year Now: Active Year Funding FY14 All Colors of Money FY13 RDT&E / Procurement / MILCON FY12 FY11-FY10 Procurement / MILCON MILCON
8 Air Force Planning Strategic Guidance Integrates Strategic Guidance Air Space - Cyberspace Manages Risk Air Force Vision AFSEA & AFSP Planning Force Informs Long Range Investment Decisions MAJCOM Core Function Master Plans Provides Frameworks for Programming
9 Air Force Programming Air Force Corporate Structure (AFCS) executes programming via the Air Force Corporate Process (AFCP) Develops budget options & alternatives based on planning guidance Initiatives and disconnects add funds while offsets reduce funding Prioritize and balance options to integrate changes across Air Force Final result go to SecAF and CSAF for approval Issues can be bumped down from any level to a lower level for resolution SecAF / CSAF / USecAF Air Force Council Air Force Board Air Force Group Air Force Panels Oversee program portfolios for operational & support functions Resulting Budget: Program Objective Memorandum (POM)
10 Program Budget Review (PBR) Issue Teams: POM Delivered to OSD August Players: OSD CAPE, Joint Staff, Combatant Commands, Services Focus: Analysis of POM vs. current DoD policy and guidance Event: Issue Teams of key players meet to discuss/work/battle OSD Budget Hearings Players: OSD(C), OMB Focus: Budget justification Issue Teams Budget Hearings September - November RMD(s) Issued November - December Event: Formal presentation of AF POM position AF Budget Revised December- January End Result: the Resource Management Decision (RMD) documents final decisions from the Issue Teams and Budget Hearings
11 The President s Budget (PB) Air Force Air Force budget request OSD DoD budget request OMB President s Budget request Incorporates OSD direction Combines service budget requests Combines executive department requests Congress PB submitted to Congress by first Monday in February Requests DoD funds by appropriation and line item R-1 lines for RDT&E, P-1 lines for procurement, etc Substantial documentation follows request J-books: Justification documents for various accounts, such as RDT&E (R-docs), Procurement (P-docs), O&M Special exhibits for many items, such as MIP programs Unfunded Priority List (UPL)
12 Distribution of Funds Authorization Appropriation OMB Treasury Dept. Once appropriated by Congress, federal government funds in the U.S. Treasury pass through the Department of the Treasury, OMB, and Department of Defense to the Air Force organizations that use them Apportionment Warrant Apportionment Program Authorization Budget Authorization OSD(C) HQ USAF MAJCOM Allotment Acquisition Center
13 Funding Execution: Reductions and Withholds Reduction/Withhold Congressional cut Congressional General Reduction (CGR) Small Business Innovation Research (SBIR) OSD withhold Air Force withhold Congressional rescission Description Congressional reduction to a program s PB request (funds not yet appropriated) Across-the-board reduction to an appropriated funding category Reduction to RDT&E funding for federal government small business initiative Appropriated funding held back by OSD Appropriated funding held back by Air Force to pay CGRs, SBIR, and other bills Congressional reduction to program funds appropriated in a prior year Programs never receive all funds requested in the PB, even if Congress didn t cut the program!
14 Obligations and Expenditures (O&E) O&E rates are monitored by Congress and DoD Track how quickly programs spend money Monitor program health and progress against established goals Identify schedule slips, program or billing problems Locate excess funds for bill-paying or opportunities to forward finance (move an effort to the following year in order to cut current year funds) Data measured against monthly goals and program forecasts Goals assume O&E occur at a constant rate throughout the fiscal year (1/12 of end-of year target is executed each month) End-of-month goals vary by appropriation and year (see chart) RDT&E judged primarily by expenditures; activities are typically sequential so emphasis is on work completed Procurement judged by obligation rates; usually multiple tasks in parallel followed by a bill submitted when end item is completed
15 Budgeting Summary I need $200 for a new bike Okay, but you have to wear a helmet You can charge it to us Request Authorization Appropriation $200 Visa Bike Lara Wolfe Outlay Expenditure Obligation
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