Budget Day Is Around the Corner

thumbnail_budgetThe 2017 President’s Budget is scheduled to be released next week.

The president’s proposal is the result of work that started last spring at the White House, the Office of Management and Budget, and executive branch agencies—from Agriculture to Veterans Affairs.

We’ve already highlighted how to navigate the complexities of the federal budget and peeked at the future of the federal budget. Today, we focus on the 4 phases of the annual budget cycle.

Federal Budget Formulation Process

(Excerpted from GAO-05-734SP)

Phase 1: Budget Preparation and Review

The budget cycle starts in the executive branch, as OMB and the president continually exchange information about spending and priorities. Agencies also review their current operations, program objectives, and future plans to determine their budget requests. OMB then consolidates all of the agencies’ budget requests into one.

The president submits this consolidated budget request, called the “The President’s Budget,” to Congress in early February for the next fiscal year. For example, the budget submitted next week is for fiscal year 2017, which starts October 2016 and runs through September 2017.

Phase 2: Congressional Action

Next, Congress reviews the president’s proposal.

Congress has the authority to approve the funding in the president’s budget request, increase or decrease funding, eliminate proposals, or add programs that the administration has not requested.

Congress has a two-pronged approach to its budget review. The House and Senate budget committees pass a resolution that sets annual fiscal policy targets—goals for how much the federal government will spend in each major category, such as defense. The House and Senate appropriations committees then set how much of that money federal agencies may actually spend.

The subcommittees within the appropriations committees hold hearings and draft bills for designated groupings of agencies and programs—for example, there are subcommittees that group together military construction and veterans affairs, among other things. These draft bills then move to the full committee and eventually both chambers of Congress.

Phase 3: Execution and Control

After Congress passes appropriations bills and enacts them in to law, Treasury and OMB distribute the budgeted amounts to the executive branch agencies to fund their programs.

Each federal agency is responsible for spending their money as directed by Congress in the budget and appropriations laws. We, along with agency inspectors general, audit and review agencies to make sure they’re spending their money appropriately.

Phase 4: Final Phase: Account Closing

Congress sets time limits on all appropriated funds. This means that agencies must put the money to use within a year, multiple years, or until the funds are fully spent. Once the time limit has passed, an agency can no longer use those funds to pay for new expenses, but the money remains available for 5 years to settle any prior obligations—like a late bill.

After 5 years, expired accounts are closed and the remaining balances are returned to the Treasury.

While this is the general process, there’s much more to it. Take a look at our Red Book for more information on the legal aspects of appropriations and the Budget Glossary for key federal budget terms.

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Tracking Federal Spending with the DATA Act (infographic and podcast)

DATA thumbThe federal government spends more than $3.5 trillion dollars a year. But how that money is spent is not always easy to track. Enter the Digital Accountability and Transparency Act of 2014. Known as the “DATA Act,” this law is supposed to make it easier for the public to follow the federal money trail.

Listen to Michelle Sager, a director in our Strategic Issues team, discuss what the government has done so far to implement the DATA Act—and what’s still left to do.


And while you’re listening, check out our infographic on the topic:


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Getting in the Weeds with Marijuana Legalization

thumbnail_justiceIn 2012, Colorado and Washington became the first states to pass ballot initiatives legalizing marijuana for recreational purposes under state law. The initiatives allowed for personal possession of up to an ounce of marijuana for those at least 21 years of age. They also required the states to establish regulatory and enforcement systems to control the production, processing, and sale of marijuana.

But how do state laws square with federal law that prohibits people from growing, selling, or possessing marijuana? Continue reading

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Taking a Long Look at the Federal Budget

Fiscal Outlook graphic

What’s the future of the federal budget? Since 1992, we have simulated how different policies would affect the federal deficit and debt. Our latest update, released Monday, shows that the federal government continues to face long-term fiscal challenges.

The future holds more debt Continue reading

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The National Cybersecurity Protection System (podcast)

GAO Podcast IconWith cyberattacks on the rise, protecting federal government computer systems, the infrastructure they control, and the private data stored within them is of the utmost importance. The National Cybersecurity Protection System is intended to help—but how well is it working?

Listen to Greg Wilshusen, a director in our Information Technology team, explain what his team found when they went looking for the answer to that question.

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Preventing Potentially Billions of Dollars in ID Theft Tax Refund Fraud

thumbnail_auditingTwo things cause stress for just about everybody: taxes and identity theft. And when those two things come together, the result can be a nightmare. For Tax Identity Theft Awareness Week, today’s WatchBlog focuses on how the IRS can combat identity theft refund fraud. Continue reading

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General Issues with the General Schedule

human capitalOutside of the government, people may think all feds are the same. Inside, however, is an entire classification system for government workers. This was launched back in 1949, and, since then, much has changed. Today’s WatchBlog takes a look at how well the General Schedule classification system is keeping up with the times. Continue reading

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Deteriorating IRS Customer Service (podcast and infographic)

2015 Tax Filing Season infographic thumbnailIf you have a question about your taxes, you can call the IRS. But you may have to wait awhile to get the help you need.

Listen to Jay McTigue, a director in our Strategic Issues team, discuss what his team recently found when they reviewed IRS’s performance in the 2015 tax filing season.

Continue reading

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Is the Future of the Littoral Combat Ship Adrift?

defenseThe Littoral Combat Ship is one of the Navy’s most high-profile programs. But is it heading for rough seas? The Defense Secretary recently called on the Navy to cut procurement of these ships from 52 to 40, narrow down the design options, and spend the savings on either more F-35 Joint Strike Fighters or on upgrading existing ships.

What’s wrong with the Littoral Combat Ship program? In today’s WatchBlog, we share why we urged Congress to delay funding for them.

$34 billion program Continue reading

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Federal Grants and Other Assistance

govFederal grants pay for all manner of things, including highways, health care, and education. Today’s WatchBlog follows the money trail of federal grants, discusses ways to improve grant management, and explores some ways the federal government can help states and localities without cutting a check.

$600 Billion Continue reading

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