Term Paper on "Public Budget Cycle"

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The budget cycle consists of the following main phases including preparation and submission (also known as formulation), approval (also known as Congressional), and execution and evaluation (also know simply as execution). Formerly, there was a fourth phase, the audit and review of the budget prior to its current streamlined three phases. This relates to the overall organizational mission of a government agency by governing its spending priorities and financial outlays. Like every business or individual, government agencies have spending limits and guidelines that guide their fiscal management. The budget cycle provides a standardized process whereby this budget is taken through the above named steps for its final passage (ibid, 3 of Section 10).

In the first phase, the Executive Branch prepares the President's Budget. The Office of Management and Budget (OMB) Federal agencies also begin preparing their next budget almost as soon as the President has sent the cycle's budget to the Congress. OMB starts the process officially by sending its planning guidance to the Executive Branch agencies in the spring of the year. The President then completes this phase by sending his budget to the Congress on the first Monday in February as the law specifies. Occasionally, Presidents have sent it later for various reasons (ibid).

The approval phase starts in late January or February at the time the Congress receives the budget from the President. Congress does not vote on the budget itself and will not create a budget of its own. Rather, it will consider the President's proposals and then will pass an overall sweeping spending and revenue called a budget resolution. Then, it will enact regular appropriations acts that will control the receipts and spending (ibid).

The execution and evaluation phase lasts for at least five fiscal years and contains a two part subcomponent structure. The first subcomponent, apportionment deals with funding that is appropriated for that particular fiscal year as well as to the balances of made in prior years that still remain for obligation. As the fiscal year begins and at other times as is needed, the OMB apportions (specifies) funds an agency can use by specific time period, program, project, or activity to the various Executive Branch agencies. During the fiscal year, these agencies hire sign contracts and agreements, hire contractors and government employees and undertake other official actions to carry out the official programs and projects. These activities use… READ MORE