Apportionment and the Executive Budget Process

Overview of Executive Budget Process

  • At any given time, Federal departments and agencies are working on the budgets for three fiscal years.  For example, in May 2018, agencies are implementing the FY 2018 budget, justifying to Congress their requests for the FY 2019 budget, and developing their requests for the FY 2020 budget which will be submitted to Congress in February of 2019.
  • The U.S. Constitution vests Congress with the power to raise revenue and borrow money. Those funds may only be drawn from the Treasury in consequence of appropriations made by law.  The executive budget process is the result of statutes enacted by Congress.
  • The executive budget process consists of three main phases:
    • development of the President’s budget proposal,
    • submission and justification of the President’s budget proposal, and
    • execution of enacted appropriations and other budgetary legislation.
  • In practice, development of the President’s budget proposal begins approximately 18 months prior to the start of the fiscal year to which it applies. Executive agencies submit their requests and justification materials to OMB for examination and review. After final decisions have been made by the President, the budget proposal is compiled by OMB. Under current law, the President must submit the budget proposal to Congress no later than the first Monday in February.
  • Once the President has submitted the budget, OMB and agency officials explain and justify the request to Congress. Early in the congressional budget process, often in the week following the submission of the President’s budget, the OMB director and other cabinet officials typically provide testimony regarding the President’s broad budgetary objectives before congressional committees. In addition, agencies typically submit written justifications of their budget requests to Congress and agency officials often will testify before the committees of jurisdiction. The President’s budget, though not legally binding, provides Congress with recommended spending levels for programs, projects, and activities that are funded through appropriations and other budgetary legislation.
  • Funds provided in appropriations and other budgetary legislation are not immediately available for obligation or expenditure. With certain exceptions, the Antideficiency Act requires that funds be apportioned (or divided), often by fiscal quarter, prior to obligation or expenditure. Agencies then allocate those funds to programs, projects, and activities.
  • Congress has recognized the need to permit agencies some flexibility during budget execution, and it has provided agencies with limited authority to make spending adjustments. For example, Congress may provide agencies with limited authority to reallocate funds from one appropriations account to another (i.e., transfers), or from one purpose to another within an appropriations account (i.e., reprogramming).
  • Under the Impoundment Control Act (ICA) of 1974, the President may withhold appropriated funds temporarily (referred to as deferrals) or propose to Congress permanent cancellations of budget authority (referred to as rescissions).
  • OMB and agencies have established procedures for implementing a shutdown of certain government operations in the event that their full-year or interim appropriations are not enacted by the start of the fiscal year. OMB and agencies may also be subject to additional procedures in the event of a statutorily prescribed sequestration.
  • Source: excerpted and adapted from CRS – The Executive Budget Process

OMB Circular A-11 Apportionment Process and the Anti Deficiency Act 

  • An apportionment is an OMB-approved plan to use budgetary resources (31 U.S.C. 1513(b); Executive Order 11541). It typically limits the obligations you may incur for specified time periods, programs, activities, projects….
  • It may also place limitations on the use of other resources, such as FTEs or property.
  • An apportionment is legally binding, and obligations and expenditures (disbursements) that exceed an apportionment are a violation of, and are subject to reporting under, the Antideficiency Act (31 U.S.C. 1517(a)(1), (b)).
  • The Antideficiency Act prohibits Federal employees from obligating or disbursing amounts in excess of an appropriation, an apportionment (or in its absence), an allotment, a suballotment or any other subdivisions of funds that are identified in your agency’s administrative control of funds.
  • Amounts are identified in an apportionment-  by time,  by program, project, or activity
  • Pursuant to the Impoundment Control Act, apportionments may also set aside all or a portion of the amounts available for obligation.
    • Amounts deferred through the apportionment process are those portions of the total amounts available for obligation that are specifically set aside as temporarily not available until released by OMB.
    • Amounts withheld pending rescission are those portions that are set aside pending the enactment of legislation reducing the authority to obligate such funds.
  • How is the apportionment organized?
    • The top of the apportionment shows the name and account number…and often includes other descriptive information, e.g., agency name, bureau name, budget account name and number.
    • The apportionment always includes two sections: Budgetary Resources and Application of Budgetary Resources.
    • The Budgetary Resources section always appears toward the top of the apportionment, and shows all budgetary resources, e.g., appropriations, reductions, non-expenditure transfers…
    • The Application of Budgetary Resources shows apportioned amounts, which are legal limits that restrict how much an agency can obligate, when it can obligate, and what projects, programs, and activities it can obligate for…..
    • The budgetary resources section is necessary for several reasons.
      • First, it provides sufficient detail for OMB to see what level of funding is….
      • In addition, the Budget Enforcement Act (BEA) category (i.e., discretionary or mandatory) information in this section is provided to the Treasury Department to facilitate agency reporting of BEA information in budget execution reports.
      • Third, the apportionment is the first step in a fiscal year’s budget execution process, and provides the basis for agencies to post information in their funds control and financial systems.

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