APPROPRIATIONS & BUDGET: WHY DOES IT MATTER? February 21, 2017

Why Does Budget Matter? • Process by which the mission you care about gets funded

• Fundamental process underlying all actions • Budget is Policy – you can learn a lot about NOAA (or any agency) by looking at what we fund.

2

Opening Question • Reflect on how the budget process affects or intersects

with your job, aside from the obvious fact that we all need money to operate. • Do you feel comfortable that you understand the process by which

we get money? • What frustrations have you encountered if/when you have needed

this process?

3

APPROPRIATIONS LAW And the dreaded Anti-Deficiency Act

4

The Law • Where does approps law

come from? • The constitution of the US • Laws of the US • Comptroller general decisions • DOJ decisions • Court Rulings

5

• How do you interpret it? • Follow the Plain meaning

of the law • If unclear, turn to legislative

history • Follow below in order of

precedence • Conference committee reports • House or senate committee

reports • Floor debates • Hearings • Other, as official as possible

Basic Principals of Appropriation Law • In most law, unless something is explicitly illegal it is legal.

Appropriation law is the opposite, unless something has explicitly been made an exception – you can’t do it.

• Purpose • Necessary Expense Doctrine

• Time • Bona-fide need • “Color of money”

• Amount • PPA lines

• Anti-Deficiency Act (ADA) (1884, multiple modifications esp. 1950)

6

What happens when you violate Anti-Deficiency Act? • Anti-Deficiency Act (ADA) has power and violations have

steep penalties • This is the reason we shutdown without an appropriation • Administrative Sanctions

• Employees may be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office

• Penal Sanctions • Employees may also be subject to fines, imprisonment, or both • To date – no federal employee has been jailed

• Do you remember what happened to NWS in 2010 & 2011? • Reprogramming and transfers without Congressional Approval by

using SLTs

7

THE BUDGET FORMULATION PROCESS Basically storytelling with a side of numbers

8

The budget process is long….

Strategic Prioritization for

Budget Formulation (Oct – Jan)

Accepted proposals are submitted to NOAA Budget

(March)

Formulation (DOC submission and

passback) (April – June)

Formulation (OMB submission and

passback) (August – early-December)

President’s Budget formulation & rollout

(late-December – March)

Congressional hearings and appropriation

meetings (March-May)

Markup (June-July)

Appropriations Bill passed (Oct 1)

Current Year Execution

9

… know when to pitch your idea… 2016

2017

2018

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

FY 2

017

-----------------CR until April -------------------------------- ----------------------------------------------FY 2017 Execution---------------------------------------------------

FY 2

018

OMB passback & appeals. OMB Settlement mid-Dec

FY18 PB Rollout (2/1) and briefings

Congressional Action: Hearings, Appropriation bills and Reports

--------------------FY 2018 Execution-----------------------

FY 2

019

1st round of decisi-ons made

Presentation to NEP and NEC; final decisions

Review line office proposals; make final determinations; and prepare FY 2019 DOC Submission.

FY 2019 DOC passback & appeals; prepare OMB Submission.

FY19 OMB passback & appeals. OMB Settlement mid-Dec

Prep FY19 PB

FY19 PB Rollout and briefings

We are here

10

Execution Congressional Action Formulation Planning

…and understand your audience. • NOAA Budget

• Likes ideas which are executable, align with NOAA priorities and activities, collaborative, and visionary

• DOC • Likes ideas which are executable, align with DOC strategic plan, fit

in resources • OMB

• Likes bold initiatives that they can pitch to support Administration priorities

• Ex. Past administration focus on R&D, climate/environment, and federal efficiency

• Appropriations Staff • NOAAs appropriators are largely Gulf of Mexico based • Economic impact, public safety, cost savings

11

Question • During your time at NOAA have you ever put a request or

idea into the SEE or formulation process? What happened to your idea after you submitted it? Was it successful, why or why not?

12

BUDGET EXECUTION Where budget meets mission – and things to watch out for

13

Fiscal Year (FY) Begins • October 1st, 2016 FY 2017 began, that means that by

September 30th, 2017 (the end of FY17): • All FY 2016 ORF money should be obligated • FY 2015 PAC money should be obligated (unless no-year funds) • FY 2011 ORF and FY 2010 PAC money expire

• This is the “time” in purpose, time, and amount • Even though you have more time, that doesn’t mean you

should try to spread the spending over multiple years. • Carryover • Recession

14

Continuing Resolution • Funds the government while between appropriations • You are beholden to the previous years funding levels, or

lower depending on the allocation, unless there is an anomaly

• Anomaly – During a CR, funding changes targeted at specific programs

• Key principle during a CR is no new starts

15

When in doubt…. • Ask a lawyer

• NOAA and DOC employ Appropriation lawyers, they know their stuff

• They are risk averse, which could save you

• Speak up! • If you see something fishy, say that it is fishy.

16

CONNECTION TO LEADERSHIP

17

Why should I care – leadership answer • Public Service • Good Stewards of tax payer money • You need money for your mission • ECQ Business Acumen (Financial Management)

• Understands the organization's financial processes. Prepares, justifies, and administers the program budget. Oversees procurement and contracting to achieve desired results. Monitors expenditures and uses cost-benefit thinking to set priorities.

18

Questions • How do you think NOAA should handle cuts in declining

budget environments? • Across the board? Cut whole programs? Etc?

• How could you use storytelling to defend your program – whether asking for a budget increase or a budget decrease?

19

BACKGROUND

20

References • GAO red book • GAO list of ADA violations • OMB Circular A-11 • Congress.gov

• Appropriation language • Authorizing language • Report language (ex. 2016 house CJS Report)

21

Business Acumen Financial Management Understands the organization's financial

processes. Prepares, justifies, and administers the program budget. Oversees procurement and contracting to achieve desired results. Monitors expenditures and uses cost-benefit thinking to set priorities.

Human Capital Management Builds and manages workforce based on organizational goals, budget considerations, and staffing needs. Ensures that employees are appropriately recruited, selected, appraised, and rewarded; takes action to address performance problems. Manages a multi-sector workforce and a variety of work situations.

Technology Management Keeps up-to-date on technological developments. Makes effective use of technology to achieve results. Ensures access to and security of technology systems.

22

Concepts • Appropriation vs Authorizing

language • Apportionment • Allocation/Allotment • Anti-Deficiency Act • Bona-fide need • Transfer - ORF to PAC • Reprogramming - PPA to PPA • Adjustments to Base (ATBs) • Object Class • Operations, Research &

Facilities (ORF) • Procurement, Acquisitions &

Construction (PAC)

• Obligations • Expired Funds • Discretionary accounts • Mandatory accounts

Want to know more? • There are great training resources in this area: • Max.gov • Management Concepts

• Appropriations Law Seminar • Budget Justification: Effective Preparation and Submission • Budget Formulation

• Or if you want to really know more detail in the NOAA Budget Office

24