Internet Research Activity 4: Budget Execution essay

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What is Budget Execution?

According to the handbook, budget execution is defined as the process through which the resources that are available to an agency or an organization are controlled in order to achieve the objectives that the budget was initially approved to address, in a manner that adheres to administrative and legal requirements (Department of commerce, n. d.).

Legality of Expenditure

The principles of the Federal Appropriations Law stipulate that the legality of any expenditure made by an agency would depend on three main factors: the purpose for which the expenditure will be incurred must be proper; there are stipulated time limits through which the budget appropriations must take effect, and the agency obligations must occur within these limits; and the obligations must fall within the amounts that the congress considered (Sec 1301).

Steps in Budget Execution

During the process of budget execution, there are various steps that are often followed. The steps are discussed below.

The first step involves agencies making their financial plans. Bureaus often submit their financial plans, based on recommendations by the conference committee approximately two weeks after the completion of appropriation by the senate to the Office of Budget.

After submission of the financial plans, the second step in budget execution is apportionment and reapportionment. Apportionments prepared by agencies in their plans are invalid until they are approved by the OMB (Department of commerce, n. d.). A signature by an official from the OMB is enough to approve apportionment, except in some cases such as emergencies involving human life, and adjustments that do not need the apportionment request being submitted, since they are considered automatically apportioned.

The third step involves generation of reports on budget execution. During this stage, accounting officers in the department certify reports on budget execution after a comprehensive preparation and confirmation. These reports are reviewed by officials from the Office of Budget and then submitted to the OMB and Congress.

Lastly, other requirements are determined and addressed. Operating units in the Department of Commerce prepare outlay reports and respond to various directives from the congress appropriately. In case of a referral or rescission, these units prepare additional information to address them appropriately.

Department of Commerce Responsibilities for the Execution of the Budget

According to the handbook, the Department of Commerce maintains its responsibilities for budget execution by issuing policies, standards, and criteria for the entire process of budget execution; reviewing apportionment and reapportionment of agency plans and approving these plans as well as staffing plans; and evaluating activities by bureaus through reports, audits, and other special analyses (Department of commerce, n.d.).

What is the Purpose of Apportionment?

Given that only a single apportionment is made for an entire funding period based on the apportionment and reapportionment schedule, this type of apportionment is made to prevent agencies from acquiring other obligations at a rate that will require additional funds and hence further apportionment.

Conditions for which a Deficiency or Supplemental Apportionment may be Requested

Deficiency or supplemental apportionment may only be requested on three conditions (USC, 1515): when there is a mandatory pay rise for agency staff and other payable persons; laws are passed by the congress after submission of budget estimates, which requires that supplemental apportionment be made; and when there is an emergency involving the immediate welfare of individuals, the protection of property, or safety of human life.

Submission of Reapportionment Requests to the OMB

A reapportionment request should be submitted to the OMB as soon as there is a change in the previous apportionment. However, it is recommended that reapportionment requests be submitted at least one month before the funds are required.

What is a Rescission, and who can Propose a Rescission

According to the handbook, a rescission is an enacted legislation that seeks to cancel or terminate a previously enacted budget authority before it lapses. A rescission can only be proposed by the President or a Member of Congress.

Provisions under which Reserves can be Established

Under 31 USC, (Ss 1512), reserves can be established to provide for contingencies or affect savings that were necessitated by alterations in requirements or improved operations.

Primary Purposes of Financial Plans

The aim of financial plans is to ensure that financial obligations are made according to plans presented by the budget and provisions by the enacted appropriation bill (Department of commerce, n. d.). Plans also assist in determining the extent to which items are included in committee reports. Other purposes include assessing the need for congressional notification of programming actions; identifying the timing of unusual events; assessing the effects of resolutions and reductions; and assisting in general management of the obligations of funds in order to prevent shortages.

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