Additional Budget Terms for MGT 340X
Budget Analysis

Accrual Method of Measuring Cost (Accrual Accounting) 

Records cost when the liability is incurred. As applied to retirement benefits, cost is recorded when the benefits are earned rather than when they are paid or at some other time.

 

Authorization

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.

 

Balanced Budget

A balanced budget occurs when total receipts equal total outlays for a fiscal year.

 

Budget Authority (BA)

Budget authority is the authority provided by law to incur financial obligations that will result in outlays.

 

Budget Enforcement Act (BEA) of 1990

The BEA is the law that was designed to limit discretionary spending while ensuring that any new entitlement program or tax cuts did not increase deficits. It set annual limits on total discretionary spending and created pay-as-you-go rules for changes in entitlements and taxes. 

 

Budget Resolution

The budget resolution is the annual framework that Congress uses to set targets for total spending, total revenues, and the deficit, as well as allocations, within the spending target, for discretionary and mandatory spending. A budget resolution does not become law and is not binding on the Executive Branch.

 

Cap

A “cap’’ is a legal limit on annual discretionary spending. See Discretionary Spending.

 

Capital Planning and Investment Control

A decision-making process for ensuring that information technology (IT) investments integrate strategic planning, budgeting, procurement, and the management of IT in support of agency missions and business needs.

 

Clinger-Cohen Act

The Clinger-Cohen Act is also known as the Information Technology Management Reform Act of 1996. The act supplements the Paperwork Reduction Act of 1980 by establishing a comprehensive approach for executive agencies to improve the acquisition and management of their information resources.

 

Competitive Sourcing

Competitive sourcing is a management initiative to make government more market-based, allowing the public sector to embrace the principles of competition, innovation, and choice. It determines the most effective method of obtaining services available in the commercial marketplace. One commonly used process is found in OMB Circular A–76 and may result in a public-private competition or the conversion of in-house work to the private sector.

 

Deficit

A deficit is the amount by which outlays exceed receipts in a fiscal year.

 

Discretionary Spending

Discretionary spending is what the President and Congress decide to spend through the 13 annual appropriations bills. Examples include money for such activities as the FBI and the Coast Guard, housing and education, space exploration and highway construction, and defense and foreign aid. See Mandatory Spending.

 

E-Government

E-Government refers to the federal government’s use of information technologies (such as Wide Area Networks, the Internet, and mobile computing) to exchange information and services with citizens, businesses, and other arms of government.

 

Enterprise Architecture

Enterprise architecture is an agency-wide framework for incorporating business processes, information flows, applications, and infrastructure to support agency goals.

 

Entitlement

An entitlement program is one in which the federal government is legally obligated to make payments or provide aid to any person who meets the legal criteria for eligibility. Examples include Social Security, Medicare, Medicaid, and Food Stamps.

 

FAIR Act

The Federal Activities Inventory Reform (FAIR) Act of 1998 requires federal agencies to submit annually to OMB an inventory of all activities performed by federal employees that are not inherently governmental in nature (i.e., that can be performed by the private sector). After OMB review, the agency must send a copy of the inventory to Congress and also make it available to the public.

 

Federal Debt

Debt Held by the Public —The cumulative amount of money the federal government has borrowed from the public and not repaid.

Debt Held by Government Accounts —The debt Treasury owes to other accounts within the federal government. Most of it results from the surpluses of the Social Security and other trust funds, which are required by law to be invested in federal securities.

Debt Limit —The maximum amount of federal securities debt that may legally be outstanding at any time. It includes both the debt held by the public and the debt held by government accounts. When the debt limit is reached, the government cannot borrow more money until the Congress has enacted a law to increase the limit.

Fiscal Year

The fiscal year is the federal government’s accounting period. It begins on October 1 and ends on September 30. For example, fiscal year 2003 begins on October 1, 2002 and ends on September 30, 2003.

 

Full-time Equivalents (FTEs)

Civilian employment in the Executive Branch is measured on the basis of full-time equivalents. One FTE is equal to one work year or 2,080 non-overtime hours. For example, one full-time employee counts as one FTE, and two half-time employees also count as one FTE.

 

Gross Domestic Product (GDP)

GDP is the standard measure of the size of the economy. It is the total production of goods and services within the United States.

 

Human Capital

Human capital refers to the education, knowledge, skills, and competencies of the personnel of an agency.

 

Mandatory Spending

Mandatory spending is authorized by permanent law rather than annual appropriations. An example is Social Security. The President and the Congress can change the law to change the eligibility criteria and thus the level of spending on mandatory programs, but they don’t have to take annual action to ensure the continuation of spending. See Discretionary Spending .

 

Offsetting Collections and Offsetting Receipts

Offsetting collections and offsetting receipts are monies that are deducted from outlays, rather than counted on the receipts side of the budget. They are often paid in return for providing goods or services. For example, payments the Postal Service receives for stamps are offsetting collections.

 

Off-Budget

By law certain programs, such as Social Security and the Postal Services, are accounted for separately from all other programs in government and are accorded this separate treatment.

 

On-Budget

Those programs not legally designated as off-budget.

 

Outlays

Outlays are the amount of money the government actually spends in a given fiscal year.

 

Pay-As-You-Go

Created by the Budget Enforcement Act (BEA), pay-as-you-go refers to requirements that new mandatory spending proposals or tax reductions must be offset by cuts in other mandatory spending or by tax increases, to ensure that the deficit does not rise or the surplus does not fall. See Budget Enforcement Act.

 

Performance-based Budgeting

Performance-based budgeting separates programs that work from those that do not. It allocates budgetary and human capital resources by comparing historical and expected future performance levels with the full cost of producing desired program outcomes as defined in the agency’s strategic goals and objectives.

 

Receipts

Receipts are the collections of money that result from taxes and other government activity. Examples of receipts include income taxes, excise taxes, and customs duties. They do not include collections from the federal government’s business-like activities, such as the entrance fees at national parks. Business-like collections are subtracted from total spending to calculate outlays for the year.

 

Surplus

A surplus is the amount by which receipts exceed outlays in a fiscal year.

 

Trust Funds

Trust funds are federal government accounts set up by law to record receipts and spend them for specified purposes.

 

Unified Budget

The unified budget includes receipts from all sources and outlays for all programs of the federal government. It is the most comprehensive display of the government’s finances.

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