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UNDERSTANDING THE COMMAND BUDGET PROCESS

The program analysis and resource review, which major Army commands (MACOMs) submit to Headquarters (HQ) DA, indicates the missions, issues, or initiatives that the MACOMs would like to see included in the Army program objective memorandum (POM). The POM conveys the Army's proposed program to the Office of the Secretary of Defense. It addresses resource levels for five fiscal years beginning with the biennial program.

A major objective during budgeting and execution is to maintain program and budget consistency. Acceptance of any change to program levels in the approved POM requires determining program trade-offs to achieve a zero-sum change. Adjustments during budget formulation must remain within the levels approved as depicted in the Army's total obligational authority (TOA).

OBTAINING FUNDS

The PM obtains funds through the Army's strategic management system known as the planning, programming, budgeting, and execution system (PPBES). The Army PPBES establishes and maintains the Army's portion of the DOD Five-Year Defense Program and Defense Budget. The Army PPBES is influenced by both the DOD PPBES and the joint strategic planning system. These systems provide input to the Secretary of Defense and the Joint Chiefs of Staff. Through its disbursement of funds the Army PPBES carries out guidance from higher HQ. It influences policies, strategy, force objectives, materiel acquisition, and other considerations. And through its request requirements, the PPBES allows for policy participation by the Army staff, Army field operating agencies, and MACOMs. (AR 1-1 contains additional information.)

PPBES architecture allocates program and budget resources to products described by management decision packages (MDEPs), which collectively establish Army force capability in terms of--

• Missions of TOE units.
• Acquisition, fielding, and sustainment of systems. (Linkage to units exists through off-line decision support systems maintained by the Deputy Chief of Staff for Research, Development, and Acquisition.)
• Activities of the support and mobilization base.
• Operations of Army installations.
• Special functional areas (program and budget packages that cut across two or more other management areas in order to define and protect resources having high-level interest during a specific period).

MDEPs have two components. One component is a program development increment package (PDIP), which is managed by the Director, Program Analysis and Evaluation. The PDIP covers five years and helps build the Army program. The PDIP helps the decision-making process accommodate either decreases or increases to the TOA and manpower levels. It provides discrete, executable levels that can be readily extrapolated to unit equipping. The PDIP is managed by functional areas (equipping, sustaining, manning, information management, training, managing, and facilities) with an Army staff point of contact designated to defend and manage the PDIP.

The other component of the MDEP is a budget increment package (BIP) managed by the Director of Army Budget. The BIP complements the PDIP and covers the prior year, current year, and budget year.

Fund sources, known as "appropriations," in the PPBES are geared to meeting specific types of needs. For more information on PPBES, see AR 1-1 and DA Pamphlet 5-9.

The PM will obtain most resources through the Operations and Maintenance Appropriation (OMA) of the PPBES. OMA subelements, called programs, are drawn on for base operations, training, and property maintenance, among other needs. Program 11 monies are divided into functional areas as "lettered" accounts.

It is the "T" account in Program 11 of OMA that is important to PMs. The T-account monies are designated for the preservation of order. The T account is subdivided into separate elements of resource:

• Civilian pay.
• Contracts.
• Travel.
• Supply.
• Equipment.

Civilian pay is based on compensation rates and authorized strength levels. Contractual elements of resource are based on a schedule of itemized contracts currently in effect and updated to reflect deletions of contracts not expected to be renewed and anticipated new contractual requirements. Travel and temporary duty (TDY) reflect a schedule of trips to include place to be visited, length and purpose of visit, mode of transportation, and per diem rate or total estimated cost per individual trip. Supplies are separated into two types: consumable and nonconsumable. Consumable supplies are those items of supply required by section chiefs or subactivities. These items, such as stationery and batteries, are priced out and compared with historical supply records. Nonconsumable supplies are durable items such as equipment. The basis for the nonconsumable supply element is the equipment replacement schedule which is derived from the expected life of the individual item. Within certain limits reprogramming may occur between the elements (except for civilian pay). This action reallocates resources from, for example, the consumable supply element to the travel element.

The PM must stay informed about commitments and obligations of the T account. The installation commander may reprogram money from the T account to another installation account within certain limits. These limits differ from MACOM to MACOM. A reprogramming action should be a cooperative effort which examines all law enforcement programs to ensure program interests are protected. The budget analyst within the Directorate of Resource Management will be able to give local guidelines.

The PM can obtain other funds, however, through other appropriations. For equipment such as night-vision devices or voice-secure radios, PMs may address Other Procurement, Army (OPA) funding requirements to their MACOMs. Approved OPA funds are provided to the MACOMs by the Army Materiel Command item manager. OPA funds are also provided as a "tail" to Major Construction, Army (MCA) projects to furnish intrusion detection systems as government-furnished equipment to a contractor. PMs must understand that OPA funds are identified for the purchase of specific items and cannot be reprogrammed. For example, OPA funds for an installation MCA project to upgrade a fence cannot be used to buy automatic data processing (ADP) equipment for the MP station. PMs must evaluate and identify the appropriate resource for the requirement being considered. When in doubt, PMs should contact their local budget analysts or MACOM PM office for advice.

Funds in support of MP investigations are available through USACIDC confidential funds to the PM. These funds, known as .0015 funds, are used in support of information gathering, investigative activities, covert operations, and other related activities. All MPI personnel must be thoroughly briefed on the conditions and procedures under which .0015 funds can be used for payment or reimbursement.

The PM obtains .0015 funds by submitting a letter of request to the approving official. The letter of request explains who (specifically) will be obtaining and using the funds. After the .0015 funds have been approved by the approving official, the fund custodian requests and actually obtains the money. The fund custodian must account for all advanced and expended funds.

MPIs obtain .0015 funds in support of specific operations. They must then provide the fund custodian with an accurate accounting of all expenditures. This accounting is documented on DA Form 5070-R (Justification Statement for .0015 Contingency Funds). The form is submitted to the fund custodian for his records. MPIs must be aware that funds are for authorized expenditures only and are subject to disapproval otherwise. Guidelines are contained in AR 195-4.

PARTICIPATING IN THE RESOURCE PROCESS

The PM must effectively participate in the PPBES to resolve and follow up resourcing issues. The PM must identify needs based on the requirements, activities, and tasks to be performed. (See DA Pamphlet 5-3 for more information on activity and task analysis.)

The justification of need is a critical element in resourcing. Justification must reflect the importance of the need and the impact on the mission if the need is not met. Resources must be identified and justified in a resource plan.

At each installation the PM must learn who develops resource priorities and what committee makes recommendations. Examples of such committees are the program resource advisory committee (PRAC) and the installation planning board. The PRAC and installation planning board make decisions that affect the PM's mission performance.

The PRAC recommends to the installation commander which programs are to be funded. Major activity directors (MADs), who are members of the installation's PRAC, are in the best position to make meaningful financial estimates to support their missions and to provide relevant justification for the required funds. The PM must be able to participate or, at a minimum, provide input to the installation PRAC regarding those issues of utmost concern to the PM missions.

The installation planning board decides the priority of installation work orders. For example: Will the requirement for kennels be funded this year? Will permanent or temporary kennels be constructed? Where will they be located? The PM may not be a voting member of these decision-making groups, but he may attend the meetings. (The budget analyst should be aware of when the meetings are conducted.) It is more difficult for the committee to reprogram PM funding if the PM is present and armed with defense for PM requirements.

The next step is to get involved with resource management in the early stages. Then the PM should follow each action through to completion. At each step in the process decisions will be made and priorities will be set. For example, during the first stage of the decision process, a given PM requirement may receive a high priority. But during the second stage, this requirement may be given a lower priority because of changing priorities, unprotected requirements, and emergencies. The funding process is not predictable. The PM must realize that no decision is final until the funds are actually obligated.

The final step is to do the necessary homework. Even though the PM plans, programs, and identifies present needs, the amount of time required for the process to evolve full circle is agonizing and frustrating, but important. Continuous evaluation of all law enforcement requirements, threat assessments, and problems should funding not be received must occur on a regular basis. The PM should implement a time-phased plan for the phases of the law enforcement needs program.

PMs can keep informed about commitments and obligations of the T account through the budget analyst. A commitment is the first step toward spending dollars. A commitment indicates to the PM's MAD an anticipated obligation of dollars. Since a commitment constitutes an administrative reservation of funds, committed funds should not be used for making future budget decisions. Once the procurement cycle is complete, and a contract awarded or services rendered which require programmed periodic payment, the dollars are considered obligated. Obligation rates provide a measure from which to assess a well-managed budget execution program. Once obligated, the execution of contracts, delivery of equipment, or provision of services should be monitored and evaluated to determine if obligations will require adjustment.

PMs may receive a monthly account status report from the budget analyst. The account status is reported on any locally designed form that will assist the budget analyst in monitoring obligation of funds. The report transmits budget information about underutilization of funds, indicates the possibility of reprogramming funds, and indicates when funds are low. The monthly account status is an important document for the PM because it provides a history that can be used for future budget guidance and decision making.

The relationship between the PM and the budget analyst is critical. The PM and budget analyst must communicate openly about budget matters to provide the commander accurate information to make fiscal decisions. Failing to keep the commander informed invites decisions that can have negative implications on existing and planned law enforcement programs.

Important to the success of any installation's law enforcement effort is the PM's acquisition of dollars for unprogrammed, unfunded requirements. These requirements are referred to as unfinanced requirements (UFRs). UFRs may result from an unexpected need arising from a change in policy, situation, or resource. Or UFRs may also result from an earlier reduction in funding. PMs identifying a UFR should immediately contact the budget analyst for advice. PMs should provide the budget analyst complete rationale and justification to support the UFR. A UFR will normally be reviewed by the program director and appropriate staff elements for authorization, prioritization, and potential trade-offs.

A UFR may be submitted for consideration anytime during the fiscal year. However, the most appropriate times are during three formal budget processes. First, the command operating budget (COB), developed midway through the current year for the following two fiscal years, serves as the base document for identifying installation resource requirements for the budget year. This is followed by the contract process which involves the installation and MACOM commanders. Finally, the budget execution review (BER) occurs midway through the current year. PMs should anticipate potential requirements and identify their needs early in the budget process. PMs should also continuously monitor their programs and identify possible alternatives that could serve as a means for providing resources for unanticipated requirements. In the future installations will review budget execution through the review and analysis process. This process will allow commanders throughout the chain of command to have continuous monitoring of each COB.

When addressing UFRs, PMs must be thorough in determining if the requirement can be accomplished if funds are made available. The requirement and supporting justification for UFRs must be clear and specific. The UFR status lists are prioritized and continually updated at the MACOM level. The lists are then forwarded to the Office of Army Law Enforcement (OALE) resource manager.

The MACOM PM must ensure an open channel of communication with the OALE resource manager. And the MACOM PM should provide a copy of the individual UFRs to the OALE resource manager. During the programming, budgeting, and execution phase of PPBES, the OALE resource manager interfaces with MACOM budget analysts. The OALE resource manager translates PM requirements to "budgetese." This provides for a more thorough understanding by the MACOM and higher level budget analysts who "edit" the UFRs and other documents.

Most important, the OALE resource manager will speak for the MACOM PM when opportunities arise allowing DA to provide extra funds to MACOMs. The suspense requirement to obtain the extra funds is normally very short--sometimes a matter of hours. The short response time prohibits coordination between the OALE resource manager and the MACOM PM. The OALE resource manager must be armed with the justification to present and defend the MACOM PM's UFRs against the competition of other activity MACOM UFRs. The OALE resource manager must be prepared at the time the opportunities arise for extra funds. Keeping the OALE resource manager informed with dependable rationale and justification for UFRs is paramount in the successful awarding of extra dollars.

DEVELOPING THE INSTALLATION COMMAND OPERATING BUDGET

The systematic development of a COB is not a regulatory process that must be followed at the installation. But the use of such a procedure ensures a well-coordinated operating budget that reflects the major mission director's recommendations. It also reflects the installation commander's decisions on how the financial resources will be used to accomplish the mission.

The COB contains detailed costing of the approved program as well as administrative schedules to be used in support of the Army budget estimates. The COB addresses two fiscal years: The execution year and the budget year. The budget year data are used primarily for reprogramming actions and the apportionment request to the Office of Management and Budget. The biennial program years are the two years following the budget year.

To develop the COB the comptroller receives budget and manpower guidance (BMG) from the MACOM and distributes it to the MADs. During the interim, the comptroller reviews the BMG from the MACOM and develops a time-phased schedule for completion of the COB. MADs review the BMG, giving special attention to their area of responsibility. They prepare recommendations to the MACOM BMG and forward these recommendations to the Comptroller, Directorate of Resource Management.

The comptroller evaluates the recommendations, makes his own recommendations, and coordinates with the MADs for development of their recommended dollar targets. The comptroller then prepares a draft installation BMG directive which includes dollar targets and distributes it to the MADs. Next, the PRAC resolves any differences between the comptroller and the MADs and prepares the installation BMG. The PRAC-recommended installation BMG is then presented to the installation commander, normally in the form of an oral briefing. The commander then directs, changes, and/or approves the PRAC-recommended installation BMG and returns it to the comptroller for final copy and publication.

The comptroller distributes the final installation BMG to the MADs. The MADs then break out dollar guidance to the activity level and furnish operating activities with BMG and funding targets. The activity chiefs prepare their portions of the installation COB. An activity may comprise subactivities, and the activity chief will further break out the funding targets. The MADs receive input and applicable supporting schedules from each activity chief. Each MAD reviews, evaluates, and adjusts the activity portions. The MAD then prepares a summary schedule, UFR list, and decrement list. The comptroller receives, reviews, evaluates, and prepares recommendations and/or adjustments to the summary schedules, UFRs, and other supporting schedules. The comptroller then completes all schedules required in the draft installation COB and assembles them for presentation to the PRAC. The PRAC reviews the installation draft COB to ensure compliance with the BMG from the MACOM, resolves any differences among the PRAC members, and makes necessary adjustments. The chairman of the PRAC presents the recommended installation draft COB to the installation commander. The commander, after directing any necessary changes, approves the installation COB, signs it, and returns it to the comptroller for transmittal to the MACOM.