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Key Points on How Funds Are Obtained
 | All agencies obtain funding through appropriations acts, legislation which authorizes
the expenditure of funds from the Treasury. Agencies cannot spend what Congress does not
provide. |
| What Congress appropriates is very much related to what the President requests. The
President's request is made up of each agency's request to Congress after it has been
submitted to OMB (the Office of Management and Budget) and
reviewed by OMB (for the President). OMB sets the conditions for the request sent to
Congress. |
| The final element is how the agency allocates the money once Congress appropriates it.
After the agency allocates money to operating components, use of money for purchasing
goods and services takes place. The allocations of money are clearly described only
after the fact. |
Characteristics of the Process
| Relentlessness: All aspects of the process are relentless and
unforgiving, as are all processes where outcomes matter. There are winners and
losers in the budget process. This characteristic determines the nature of many of
the actions involved in the process, its effect on managers, and the tools and skills
required to operate in the system. |
| Numbers Complexity: How the use of money affects individuals,
governments, and firms cannot be determined from simply looking at the overall numbers.
Information is required on the types of expenses that the agency has planned and
that have been approved by Congress.
 | Some agencies use all of their money on payroll, and in these cases the effect of the
agency results from actions of its employees. Others have most of their budget for
grants, which are given to others to use. Still others have large sums for contracts,
which present potential sources of income for contractors and indicate that the agency may
not rely as much on its employees as you might think. |
| In overall terms, the use of funds are detailed in the Appendix to the Budget of the
United States. The Appendix materials provide details as to how much will be spent on
Federal employees, how much will be available in grants for states, research institutions,
and other non profit entities, and how much will be spent on equipment and contracted
services. |
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