Glossary of Budget Terms
A-11
Circular No. A-11 is a huge, regularly updated document put out by the Office of Management and Budget (OMB) that provides a vast amount of detail about the budget process. It can be accessed it at: http://www.whitehouse.gov/omb/circulars_a11_current_year_a11_toc.
A-123
This Circular provides guidance to Federal managers on improving the accountability and effectiveness of Federal programs and operations by establishing, assessing, correcting, and reporting on internal control. It defines management’s responsibilities related to internal control and the process for assessing internal control effectiveness along with a summary of the significant changes. The Circular provides updated internal control standards and new specific requirements for conducting management’s assessment of the effectiveness of internal control over financial reporting. This Circular emphasizes the need for integrated and coordinated internal control assessments that synchronize all internal control-related activities. It can be accessed at https://www.whitehouse.gov/omb/circulars_a123_rev.
Account Types (General vs. Trust)
DOT accounts are often referred to as either general or trust funds. Below is a brief definition of each:
· General Fund: General funds are the accounts for revenue collections not earmarked by law for a specific purpose. (General funds also include the proceeds of general borrowing and the expenditure of these funds.)
· Trust Fund: A trust funds is a type of account where the associated receipts collected are dedicated to specific purposes. For example, gasoline taxes go into the Highway Trust Fund to pay for road construction and mass transit activities.
Annual Financial Report
The United States Department of Transportation’s Agency Financial Report (AFR) provides an overview of the Department’s financial performance and results to Congress, the President, and the American people. The report details information about our stewardship over the financial resources entrusted to us. In addition, the report provides information about our performance as an organization, our achievements, our initiatives, and our challenges. Access current and prior fiscal year AFRs at https://www.transportation.gov/mission/budget/financial-management.
Annual Performance Report
The Annual Performance Report (APR)contains the annual program performance information required by the Government Performance and Results Act of 1993 (GPRA) and includes all of the required elements of an annual program performance report as specified in OMB Circular A-11, Preparation, Submission and Execution of the Budget. Access current and prior APRs at http://www.transportation.gov/mission/budget/dot-budget-and-performance-documents.
Apportionments
After Congress appropriates funds to DOT, those funds must be formally released by Treasury before they can be spent. The release of those funds is referred to as an apportionment. The main purpose of the apportionment process is to prevent the premature depletion of an appropriation. Thus, apportionments are made on a quarterly or project basis.
Appropriations
After an agency is authorized to spend money on a program or activity (through an authorization), the money must be provided in a separate process. Appropriations provide funds for federal agencies that can be spent for specified purposes. In our case, the Congressional Appropriations Committees regularly pass Transportation and Housing and Urban Development (THUD) Bills. These bills outline how much each unit within DOT and HUD can spend on various specific programs and activities.
Also, appropriations always define funding across two spectrums—time and amount. The various types of time- and amount-based appropriations are listed below:
· Definite Appropriations: Definite appropriations specify the sum of money to be used for a program or activity.
· Indefinite Appropriations: Indefinite appropriations do not specify the sum of money to be used for a program or activity and are usually phrased along the lines of, “Such sums as may be necessary.”
· Annual/Single Year Appropriations: Annual Appropriations (also called fiscal year or 1-year appropriations) are made for a specified fiscal year and are available for obligation only during the fiscal year for which they are made. Funds expire after one year and are no longer available to incur new obligations
· Multi-year Appropriations: Multi-Year Appropriations are available for obligation for a definite period in excess of one fiscal year. Funds expire based on the extended period of availability and are no longer available to incur new obligations.
· No Year Appropriations: No Year appropriations are available for obligation without fiscal year limitation. They are available until they are used up.
Authorizations
An authorization is an act of Congress that establishes or continues a federal program or agency, and sets forth the guidelines to which it must adhere. Authorizations may be effective for one year, a fixed number of years, or an indefinite period.
Note: The formal federal spending process consists of two sequential steps: the authorization and the appropriation. This means two things have to occur before an agency can spend money on a program or activity: First, Congress has to give the agency permission to spend the money, which is the “authorization” (or specifically, the “budget authorization”). Second, Congress has to provide the agency with the actual money to spend on the program or activity, which is the “appropriation.” Below is a brief summary of three important transportation- related authorizations you will hear people refer to within the Department:
· FAST Act: FAST stands for, “Fixing America's Surface Transportation,” and is the current authorizing legislation for surface transportation programs. For more information about the FAST Act, go to https://www.transportation.gov/fastact.
· MAP-21: MAP-21 stands for the “Moving Ahead for Progress in the 21st Century Act,” and was the authorizing legislation for that preceded the FAST Act. It was enacted in July 2012, replacing SAFETEA-LU as the Nation’s surface transportation authorizing legislation. For more information about MAP-21, go to http://www.dot.gov/map21.
· SAFETEA-LU: SAFETEA-LU stands for the “Safe, Accountable, Flexible, Efficient Transportation Equity Act.” It was the bill that (re)authorized surface transportation programs prior to the current reauthorization act, MAP-21. For more information on SAFETEA-LU, go to http://www.fhwa.dot.gov/safetealu/.
· TEA-21: TEA-21 stands for “Transportation Equity Act for the 21st Century,” and was the surface transportation authorizing legislation that preceded SAFETEA-LU. For more information on TEA-21, go to http://www.fhwa.dot.gov/tea21/.
Budget Authority
Authority provided by law to enter into obligations that will result in outlays of Federal funds. Budget authority may be classified by the period of availability (one-year, multiyear, no-year), by the timing of congressional action (current or permanent), or by the manner of determining the amount available (definite or indefinite).
Continuing Resolution (CR)
If Congress cannot come to an agreement on the budget before the end of the fiscal year, some action must be taken to continue the budget authorities for all Federal agencies and programs. As a result, the Continuing Resolution (CR) is often passed.
The CR works as a stop-gap measure by extending budget authority for a set period of time (e.g. six months). The hope is that Congress will be able to come up with a budget resolution before the CR period is up. CRs generally continue funding for agencies and programs based on the prior year’s funding levels. So for example, if an agency got $100 million in FY 2012, a CR would allot $50 million to that agency over a six month period.
Contract Authority
Contract authority is a type of budget authority that allows an agency to incur obligations prior to receiving funds (such as offsetting collections or receipts) that will later be used to pay (liquidate) the obligations.
Credit Oversight and Risk Management
DOT administers several credit programs that provide direct loans, loan guarantees, or lines of credit to support the construction of transportation projects and infrastructure. These credit programs maximize limited Federal resources by leveraging non-Federal co-investment and enabling eventual repayment of the taxpayer. The Office of Credit Oversight and Risk Management oversees these transportation investment credit programs as well as the Build America Bureau. Read more about it at http://www.transportation.gov/budget/innovative-financing.
DATA ACT
In May 2014, President Obama signed the Digital Accountability and Transparency Act of 2014 (DATA Act) (P.L. 113-101) into law. The purpose of the DATA Act is to make Federal spending data more accessible, searchable, and reliable. The U.S. Department of the Treasury and the Office of Management and Budget (OMB) are leading the government-wide implementation of the DATA Act.
Delphi
The Delphi eInvoicing System is a real-time invoicing tool that has improved online invoice processing activities by having grant recipients submit invoices electronically. By automating the grants payment process, grant recipients now have accurate invoice status reporting capabilities because the time between invoice submission and payment is reduced. To learn more about Delphi, go to http://www.dot.gov/cfo/delphi-einvoicing-system.
ESC
The Enterprise Services Center (ESC) offers an array of government information technology services and financial management to a wide range of federal agencies, including DOT. Access the ESC homepage at https://www.esc.gov/.
Internal Controls
DOT has developed internal controls for planning and approving all DOT conferences and workshops to maximize cost-effective resource allocation. Access the Department’s Conference Disclosure information at http://www.transportation.gov/mission/budget/fy-2013-conference-disclosure#ConferenceSpendingDisclosure.
Marks/Markups
Markups (often simply called “marks”) refer to when Congressional committees (and subcommittees) debate, amend, and rewrite proposed legislation. Committees do not actually change the texts of the bills they mark up. Instead, committees vote on amendments that their members want to recommend that the House adopt when it considers the bill on the floor. The committee concludes a markup not by voting on the bill as a whole, but by voting on a motion to order the bill reported to the House with whatever amendments the committee has approved.
Within the OST budget universe, you will often see tables that look something like this:
OIG (Dollars in Thousands)Account/Program / FY 2013 Request / FY 2013 House Mark / FY 2013
Senate Mark
Operations and Maintenance Total / 85,000 / 84,000 / 84,499
The “FY 2013 Request” column refers to the amount of money OIG requested from Congress for Operations and Maintenance, the “FY 2013 House Mark” column refers to the amount the House approved for OIG Operations and Maintenance after they marked up.
MAX
What does MAX stand for? Surprisingly, MAX is not an acronym. It comes from the name of the original initiative in 1988, called "Maximum 2000", to modernize the federal budgeting process. This was a major initiative submitted to and approved by Congress. It quickly was shortened to MAX, and has been referred to as this ever since.
MAX is a collection of on-line tools that was created by the BFELoB in order to create a collaborative environment that would allow multiple agencies to work together on budget-related issues. This collaborative “MAX Federal Community” website is considered a “wiki,” in that it is a site that allows users to easily create and edit content on the webpages using a simplified markup language. To access the MAX website, you will need to establish a user ID. To do that, (as well as to access the site) go to https://max.omb.gov/maxportal/.
Obligation
Obligations are binding agreements that will result in outlays (either immediately or in the future). They are legal promises to pay for something. Budgetary resources must be available before obligations can be legally incurred.
Obligation Limitation
Obligation limitations limit the amount of budget authority already made available for obligation. The obligation limitation is effectively the amount of new budget authority available for obligation for that period. Obligation limitations are common in Transportation accounts. The purpose of obligation limitations is to prevent agencies from suddenly spending extraordinary sums of money that have accumulated over time as a result of unobligated balances.
Offsetting Collections
Offsetting collections are payments to the government that are credited directly to expenditure accounts and are authorized to be spent for the purposes of the account without further action by Congress. They result from business-like transactions with the public. So for example, the Saint Lawrence Seaway Development Corporation takes in toll revenue from pleasure craft that operate in the Saint Lawrence Seaway. These funds are considered offsetting collections, which the SLSDC has the authority to spend without needing to get it appropriated from Congress.
Outlays
Outlays are payments to liquidate obligations. In other words, an outlay occurs when they money is paid out. A simple way to think of the difference between obligations and outlays is this: Making an obligation is like putting something on your credit card. You haven’t actually paid for the item, but you are legally obligated to pay for it eventually. Making an outlay is what happens when you actually pay for the credited item out of your checking account (so the transaction has now been paid for).
PPA
PPA stands for Program, Projects, and Activity. It is defined as, “the most specific level of budget items,” identified in House, Senate, and conference reports.
PPP
PPP stands for public-private partnership and is also commonly referred to as a P3. PPPs involve a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. In some types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer.
President’s Budget
The President’s is released each year by OMB (the Office of Management and Budget) to Congress and recommends the funding levels for the next fiscal year. To view the President’s Budget, go to www.whitehouse.gov/omb/budget.
QFRs
After a Congressional hearing, Senators/Congressmen will submit Questions for the Record (QFRs) to the testifying Agency. These QFRs may or may not have been discussed during the hearing, but all require a written response to Congress by a specified date.
QFRs from Secretarial Hearings are typically received by DOT’s OST Congressional Affairs office and submitted to the OST Budget Office for development and clearance. Upon receipt, the OST Budget Office designates a contact who then distributes each QFR to the appropriate B-10 Analyst. The B-10 Analyst then submits the QFR to the appropriate modal budget office to develop the response. Multi-modal responses are typically developed by OST Policy. OST Policy QFRs should be submitted through B-20 for completion.
The modes will send the QFR to the appropriate program office for completion. The modal budget office is then responsible for reviewing and clearing the QFR within their mode by the deadline provided by B-10.