Contract Authorization in Federal Budget Procedure

Abstract

HE budget of United States, as submitted to Congress, in reality is two documents in one. First, it states amount of revenues estimated to be received and amount anticipated to be expended during fiscal Second, it authorizes various agencies of government to operate for fiscal year and sets amounts for which they may obligate Treasury in carrying forward their programs. It is this second part of budget requires annual action by Congress. It is submitted to Congress annually and is acted on by Congress annually, but there its annual character ceases. Purportedly it is a budget for a particular fiscal year and is thought of as representing cost of operation of government during year, but it is not simple. It includes funds for completion of projects and programs begun in previous fiscal years; for payment of items due because of operation of laws authorizing agencies to carry on activities are not related to any fiscal year, except as it may be possible to compute cost thereof for year; and for beginning of projects may take years to finish. During past decade accounting and budgeting processes of federal government have been subject of continual-and highly controversial-discussion, with many ideas for improvement advanced. Constantly recurring in these discussions is question of control of balances carried forward. Year after year, estimates have been presented by executive agencies and accepted by Congress, but failure of executive agencies to carry out their programs as originally scheduled has resuited in accumulation of great sums on their books. These balances have reached a size where they are properly concern of all who seek to improve budgeting methods of government. The Commission on Organization of Executive Branch of Government (second Hoover Commission) dealt with this problem under heading Restoration of Congressional Control of Purse.' It recommended that executive budget and congressional appropriations be in terms of estimated annual accrued expenditures, namely, charges for cost of goods and services estimated to be received. (p. 25) To effectuate this change the Congress would give agencies contracting authority in terms of dollar amount required for orderly forward contracting beyond budget year. (p. 23) This proposal, made by Task Force on Budget and Accounting, was accepted by commission without change.2 Although task force gave a more detailed explanation of need for some change in system, neither task force nor commission gave an acceptable explanation of how change from outright appropriations to contract authority would cure defects complained of.