Attachment_4_-_PBGC_Directive_FM_10-1_PBGC_Budget_Preparation_and_Executions_Process.pdf

Pension Benefit Guaranty Corporation

Directive

Subject: PBGC Budget Preparation and Execution Process

Directive Number: FM 10-1

Effective Date: 06/05/2014 Originator: BD

Alice C. Maroni Chief Management Officer

1. PURPOSE: This Directive communicates the policies and responsibilities of the Pension Benefit Guaranty Corporation (PBGC) for formulating and executing its budget.

Annual details describing current budget processes and deadlines are promulgated in the budget calendar and formulation instructions, which the Budget Department (BD) typically distributes to department directors and budget liaison officers (BLOs) in mid- February of each year.

2. Effective Date: This Directive replaces PBGC Order Budget and Planning Policy (FM 10-1) dated 03/25/2013, to incorporate improved planning procedures for handling large workload influxes. On March 27, 2015, administrative changes were made relating to the delegation of the PBGC Director’s duties in the event of the PBGC Director’s absence.

3. SCOPE: The provisions of this Directive apply to all PBGC departments (except the Office of the Inspector General).

4. AUTHORITIES:

a. Office of Management and Budget (OMB) Circular No. A-11, Preparation, Submission and Execution of the Budget

b. OMB Circular A-123, Management’s Responsibility for Internal Control

c. PBGC Directive, FM 05-02 (Account/Classification Structure/Code

Combinations)

d. Government Performance and Results Act (GPRA) of 1993, Public Law 103-62;

e. Clinger-Cohen Act of 1996, Public Law 104-106

f. The Economy Act of 1932, as amended, 31 U.S.C. § 1535

5. BACKGROUND: The Budget Department (BD) was established to plan, administer, and report on the Corporation's budget. The BD manages the formulation and execution of the PBGC budget, ensuring that the budget is executed within resources provided, and manages the allocation and reallocation of resources, including full-time-equivalent work years. Through the budget formulation process and during the year of execution the BD will ensure that planning and cross departmental coordination occurs to support the changes in workload resulting from pension plan terminations, expanded multiemployer plan assistance, increased requests for standard terminations, corporate efforts to prevent plan terminations or other requirements.

6. DEFINITIONS: The definitions below reflect common usage WITHIN PBGC which may vary slightly from the larger Federal community.

a. Apportionment. A quarterly or annual authorization of obligating authority made by the Office of Management and Budget (OMB), usually communicated by a signed Standard Form 132 (SF-132) in response to a request for apportionment submitted by a federal agency. In practice, the PBGC prepares the SF-132 and submits it through the Department of Labor (DOL) to OMB for approval. An automatic apportionment is approved by the OMB Director in the form of a Bulletin or provision in Circular A-11, and typically describes a formula that agencies will use to calculate apportioned amounts. An automatic apportionment is in contrast to the written apportionments, which typically include specific amounts, and which are approved by an OMB Deputy Associate Director (or designee).

b. Appropriation. Within PBGC, “appropriation” commonly refers to the annual limitation on spending authority granted by Congress to the Corporation to cover administrative costs. In the larger Federal community an appropriation is an actual grant of U.S. Treasury Funds to a department or agency. PBGC’s annual limitation on expenditure authority is usually included in the DOL appropriations bill as an “authorization” but is often referred to as an “appropriation.”

c. Budget. An organization’s request for spending authority. Budget preparation is an iterative process that goes through the following steps:

(1) DOL Budget Submission. PBGC's initial budget request sent to the

Department of Labor for the budget year. The DOL budget submission comprises the budget submissions of all PBGC departments after review by the Budget and Planning Integration Team (BPIT) and approval by PBGC’s Director after consultation with the Executive Management Committee. The DOL Departmental Budget Center (DBC) reviews PBGC’s submission and advises the Secretary of DOL (Chair of PBGC’s Board of Directors) regarding a resource level that PBGC should request from OMB. PBGC may appeal the recommendation of the DBC to the Secretary of DOL, if necessary.

(2) OMB Budget. The budget request PBGC submits to OMB through DOL.

(3) The Budget. Often referred to as the President's Budget or the

Congressional Budget Submission or Justification, PBGC’s request for the budget year as approved by OMB. The Budget reflects the administration's official budget proposal to Congress.

(4) The Fiscal Year Operating Budget. The total budget enacted into law for the fiscal year. Within this total, individual line-item funding levels are provided to PBGC departmental offices.

d. Budget Activity. A budget classification covering a major program area. At PBGC these are:

(1) Pension Insurance

(2) Pension Plan Termination and Benefits Administration

(3) Operational Support

(4) Single-Employer Program Benefit Payments

(5) Multiemployer Program Financial Assistance

e. Budget Calendar. A timetable used to outline the major budgeting events in each budget fiscal year, which BD provides to departments. The calendar will give dates for each of the steps involved in developing or changing the budgets discussed under “c.” above.

f. Budget Execution. The process by which a federal agency commits, obligates, and liquidates spending authority.

g. Budget and Planning Integration Team (BPIT). A PBGC committee established to review and evaluate corporate budget and planning decisions. It is comprised of representatives from each of the executive leadership offices and the Chief Information Officer. (See BPIT charter contained in Directive GA 15-05)

h. Commitment. An administrative reservation of funds in anticipation of their obligation entered in the Consolidated Financial System (CFS) records for a specific purpose but not yet formally obligated to that purpose.

i. Consolidated Financial System. PBGC’s system of record used for recording all revolving fund financial activity.

j. Continuing Resolution (CR). Legislation approved by Congress and signed by the President to provide “gap” funding until a full-year funding can be provided.

Funding is normally provided at the level of the previous fiscal year, prorated for the period of the CR, and limited to essential corporate activities.

k. Executive Management Committee (EMC). A committee comprised of executive leadership at PBGC responsible for managing operations and advising the Director of PBGC to ensure that PBGC goals and objectives are met in an efficient, effective and collaborative fashion. The EMC provides input and oversight on projects presented during Operations Integration Meetings (OIM).

l. Information Technology Portfolio Review Board (ITPRB). A team of PBGC employees that conducts IT investment reviews and assures alignment of IT capital investments with corporate strategic plans. The ITPRB replaced the Capital Planning for Information Technology (CPIT). The ITPRB Charter is located on the PBGC’s Intranet Site:

http://intranet/strategicplanning/default.cfm#

m. Obligation. The dollar amount of orders placed, contracts awarded, services ordered, or similar transactions which have been formally recorded and require payment in the current or a future fiscal year.

n. Operations Integration Meeting (OIM). A meeting of the EMC focused on consideration of new projects, changes in scope of ongoing projects, and oversight of projects with funding requirements greater than $1 million and/or projects that have corporate-wide impacts and Full Time Equivalent (FTE) allocation.

o. Outlays. The payments of obligations, including cash payments or issuance of checks less income, reimbursements, or refunds received.

p. Office of Negotiations and Restructuring (ONR). ONR manages PBGC's single-employer and multiemployer plan insurance programs; provides financial and actuarial analyses regarding, and negotiates with, underfunded plans to properly address PBGC's and the insurance programs' risk exposure; makes recommendations on initiating ERISA/bankruptcy legal actions and represents PBGC on those matters before courts and administrative tribunals; reviews and acts on reportable events; and recommends involuntary or voluntary plan terminations under the single-employer program.

q. Passback. The DOL or OMB initial decision provided to PBGC concerning the budget submission for the budget year.

r. Performance Measure. An indicator used to capture success or progress toward a goal.

s. Reapportionment. OMB's approval sent to PBGC concerning a request for revisions to a previous apportionment. This usually results from a request to reprogram funds between activity areas or receipt of additional spending authority pursuant to legislative trigger language.

t. Reprogramming. A shift of previously approved funding, including shifts among activities, cost centers, object classes, project lines and earmarked accounts that is made to the spend plan.

u. Spending Plan. An operating unit’s annual budget, including program and object class allocations by time period (usually fiscal quarters).

v. Year. The budget process usually involves four fiscal years at the same time:

NOTE: All federal government fiscal years start on October 1st and end on September 30th.

(1) Year of execution or current year. The fiscal year we are currently in and executing the budget (obligating funds)

(2) Prior year. One or more years of execution before the current year, for which we may still be liquidating obligations

(3) Coming year or next year. The year immediately following the current year, for which the budget has already been approved by OMB and submitted to Congress

(4) Budget year (sometimes called planning year). The year for which a budget is developed. It is usually more than a year out. Most formulation activity in calendar year 2013, for example, will involve the FY 2015 budget

7. POLICY: It is PBGC’s policy to formulate and manage its budget efficiently, responsibly, and with a view toward obtaining the maximum results from the resources authorized for its use by Congress and OMB. This policy enables PBGC to meet its obligation under the Employee Retirement Income Security Act (ERISA) to maintain premiums at the lowest level consistent with good service. It also supports our continuing efforts to comply with the letter and spirit of the Government Performance and Results Act (GPRA), the Information Technology Management Reform Act (ITMRA, or the “Clinger-Cohen” Act), and such other laws as Congress may pass in the future to ensure good management of the federal government.

The internal operating provisions of this Directive do not apply to the Office of Inspector General. The Office of Inspector General coordinates with PBGC BD and the BD Director when preparing its budget, but its budget request is not subject to PBGC management review and evaluation.

Officials at all levels of the Corporation, including those responsible for advising and providing information to department directors, must observe the following in determining resource needs:

a. Integrity. All resource estimates must reflect the official's best judgment of actual needs.

b. Alignment. All resource requests must relate to actual program needs that, wherever possible, will improve performance in strategic outcome goals in addition to performance measures.

c. Openness. Officials responsible for budget requests will, as necessary, explain them to the BD and decision-makers.

d. Responsibility. All employees must act on the knowledge that the efficiency and effectiveness with which they use PBGC resources has an effect on the

Corporation's financial condition and the long-term health of the pension insurance system.

8. BUDGET RESPONSIBILITIES:

a. Budget Liaison Officers (BLOs).

(1) Build, track, and report on departmental budgets including supporting potential large influx activities and coordination with corresponding supporting departments.

(2) Serve as the working-level contact with BD on all budget matters.

(3) Seek guidance and approval from their department director prior to submitting budget or reprogramming requests to BD.

(4) Ensure that all obligations are recorded against the correct budget line and object class.

b. Budget Analysts.

(1) Formulate, track, and report on PBGC’s budget.

(2) Assist BLOs and department directors in all phases of PBGC’s budget activity.

c. Budget and Planning Integration Team (BPIT).

(1) Reviews and evaluates departmental resource requests

(2) Recommends funding decisions to the EMC.

(3) Reviews major reprogramming requests (typically $200,000 or more) including additional FTEs.

(4) Recommends action on significant surpluses and shortfalls.

(5) Reviews departmental workload influx plans and requests for additional resources in the case of large workload influx planning.

(6) Reviews impact of departmental requests to ensure coherence and coordination across the PBGC.

d. Department Directors.

(1) Designate and supervise BLOs

(2) Prepare departmental budget submissions

(3) Manage approved budgets

(4) Inform BD of potential major deviations from the approved spending plan

(5) Meet as required with BD staff and executive management to discuss trends in operations and their effect on the budget

(6) Disseminate budget decisions from BD to their respective BLOs and other subordinates

(7) Work with BD to plan and identify impact of large workload influx

e. Chief Information Officer (CIO).

(1) Reviews all requests for spending for information technology and other related matters, such as business cases for IT-dependent initiatives

(2) Advises the director, deputy directors, and department directors on information technology priorities, strategic direction, and alternative courses of action

f. Director of BD.

(1) Oversees all phases of the budget formulation and execution process.

(2) Attends budget planning and strategy sessions.

(3) Approves (in consultation with executive management) initial resource allocations and resource requests.

(4) Approves major reprogramming or additional resource requests after review by the BD analysts and/or BPIT.

(5) Instructs department heads to prepare and submit departmental workload influx plans in the event of a large workload influx.

(6) Attends budget hearings and meets as necessary with department directors to discuss budget management performance.

(7) Establishes dollar limits on the reprogramming authority of the BD

Manager. These limits may be modified during the course of the fiscal year if the BD Director identifies a need to do so.

g. Inspector General, Office of Inspector General (OIG).

(1) Prepares its budget submission in coordination with PBGC’s BD and the

BD Director.

(2) Consults with BD on formulation and execution, submits reprogramming actions to the BD for processing (but not approval).

(3) Responds to DOL, OMB, and the Congress directly, rather than through the BD, on matters relating to its budget request.

(4) Works within PBGC’s financial management system to the maximum extent possible, keeping in mind its independence and its own mission and goals.

h. Executive Management Committee (EMC).

(1) Reviews and agrees on budget proposals submitted by departments for both the current and future fiscal years.

(2) Submits recommendations to the Director of PBGC.

i. Information Technology Portfolio Review Board (ITPRB).

(1) Executes the Information Technology (IT) Capital Planning and

Investment Control Process (CPIC) from a corporate-wide, business perspective.

(2) Reviews and recommends Major IT investments and Investment of Interest to the BPIT for approval by the EMC.

(3) Periodically reviews progress of IT investments.

(4) Recommends recovery actions, as necessary.

(5) Participates in the CPIC process including regular reviews of major production systems from a business user viewpoint.

j. Manager, Budget Department (BD).

(1) Recommends resource allocations and reallocations to department directors and the BPIT.

(2) Approves or denies additional funds requests and reprogramming actions based on dollar limits set by the BD Director.

(3) Serves as contact for budget matters at DOL and OMB.

(4) Reviews all budget materials going to DOL, OMB, and/or Congress.

k. ONR.

(1) Prepares projections of levels of Pension Plan termination activity expected during the Budget Year.

(2) Informs EMC and BD if probability of workload levels of Pension Plan termination activity justifies advising BD to initiate large workload resource planning and coordination.

l. PBGC Director, or in the absence of the PBGC Director, the Chief

Management Officer.

(1) Approves final budget submissions to DOL, OMB, and Congress.

(2) Acts as final appeal authority on all internal budget decisions including reprogramming, FTE allocation and whether to appeal budget decisions made by DOL and/or OMB.

9. BUDGET PROCEDURES:

a. Source of Funds.

(1) The PBGC is not funded by general tax revenues. Its funds come from four sources: insurance premiums paid by sponsors of the defined benefit pension plans, assets from terminated plans, investment income, and recoveries of unfunded pension liabilities from sponsors’ bankruptcy estates or other responsible parties. Though PBGC earns its own revenue, Congress imposes spending limitations on the use of funds for administrative expenditures through annual appropriations bills.

(2) For the current year appropriation bill, see the Library of Congress website (http://thomas.loc.gov). If appropriations are enacted, this site will list either the approved Department of Labor Appropriation, including limitations on administrative spending authority for the PBGC, or the continuing resolution (CR) legislation.

(3) PBGC receives its budget authority from the OMB in the form of a signed operating budget apportionment SF-132. This apportionment consists of five activities: Pension Insurance, Pension Plan Termination and Benefit Administration, Operational Support, Single-Employer Program Benefit Payments, and Multiemployer Financial Assistance. The SF-132 is prepared based on the spending limitations enacted in annual appropriations bills. Congress sets these spending limitations to reflect its approval or modification of budget authority requested for PBGC by the President in the annual budget submission to Congress. BD prepares

PBGC’s proposed annual budget and submits it to DOL and OMB for review and approval prior to submission to Congress. ERISA, PBGC’s authorizing statute, grants PBGC no-year funds. However, the administrative expense cap that Congress regularly enacts in its appropriations statutes constrains PBGC’s ability to utilize no-year funds.

In the event the Corporation does not receive an annual limitation on expenditure at the start of a new fiscal year, PBGC can continue to obligate for the current year administrative expenses under a CR (if enacted). In the absence of a CR or annual limitation on expenditures, PBGC may continue to make payments to pension plan participants and provide assistance to multiemployer pension plans under authority provided by ERISA and may continue to fund administrative functions required to meet this obligation.

b. Use of Funds.

PBGC incurs the following expenses in fulfillment of its legislative mission to provide for the payment of benefits to participants of defined benefit pension plans:

(1) Pension Insurance Activities. Pension plan technical assistance, new pension plan promotion activities, premium collections, and premium investments;

(2) Pension Plan Termination and Benefit Administration Activities. All activities related to plan termination and trusteeship, plan asset management, investment and accounting, and benefit administration;

(3) Operational Support Activities. The administrative, budget, human resources, information technology infrastructure, general accounting, procurement, facilities maintenance, security, strategic planning and other shared program support for both the Corporation’s insurance and plan termination and benefit administration lines of business;

(4) Pension Benefit Payments. The Benefits paid to plan participants and other beneficiaries in plans that have terminated; and

(5) Financial Assistance. Assistance provided to insolvent multiemployer plans in the form of repayable loans to enable the plans to continue paying benefits.

c. Budget Formulation.

(1) Senior leadership decides the corporate priorities, strategies, goals and outcomes to pursue, validates these in the corporate strategic plan, and then initiates implementation actions through the PBGC departments.

Departments assign roles, responsibilities, resources, and time frames to the coordinated objectives that will support the achievement of the corporate goals. The outcome of these resource planning exercises is PBGC’s budget request to Congress.

(2) In mid-February, BD prepares and distributes instructions for budget formulation (the “Budget Call”) to each department. The instructions are based on guidance from PBGC executive leadership and senior management as well as anticipated guidance expected from the Department of Labor and OMB. BD prepares a preliminary budget using historical information, economic assumptions identified by DOL and OMB, and department-specific workload assumptions. The mid-February release of the budget call allows sufficient time for senior management to establish strategic priorities, for departments to build their budget requests, and sufficient time for BPIT and senior management to review before BD must submit the Corporate Budget to DOL (usually in mid-June).

(3) The Budget Call includes ONR projection of the level of Pension Plan termination activity during the budget year.

(4) Through the Budget Call, BD requests budget estimates from each department, which must include the basis and service estimates to support their requirements. Typically, each department works in conjunction with its assigned budget analyst to identify potential resource requirements to fund department operations for the coming budget years. The departmental BLO is the primary point of contact between BD and their department.

Each department submits a budget to their assigned budget analyst for review. The budget analyst reviews the departmental budget request for mathematical errors, as well as for overall reasonableness, compliance, coordination with other departments and integration with corporate priorities. After this preliminary review, all budget submissions are summarized on the budget formulation spreadsheet to be submitted to the BD Director.

(5) The DOL usually distributes budget formulation instructions to PBGC by mid-May with PBGC’s budget submissions required by early to mid-June.

If DOL instructions include requirements unanticipated when BD distributed the Corporation’s budget call, the budget analysts will determine adjustments needed by each department and work with the appropriate BLOs to update their requests.

(6) The BD Director reviews the submissions in conjunction with the BPIT and input from the ITPRB. BPIT members examine departmental budget requests for overall reasonableness, coordination with other departments and integration with corporate priorities. Any BPIT and ITPRB suggestions and/or recommendations are noted in an adjustments column within the budget formulation spreadsheet. The BPIT will review submissions to reconcile requests across the Corporation. The BPIT will ensure all departments have submitted budget requests which fully support ONR’s projection level of Pension Plan termination activity during the Budget Year and, if necessary, submit alternative budget requests. As necessary BD will provide other departmental budgets to supporting departments to allow them to adjust their input based from the increased workload activity The BPIT will also ensure that all departments have coordinated their requests with each other, eliminated overlapping requests, and identified increased support needs. The BPIT chair presents the BPIT funding recommendations to the EMC for review and approval.

The final internal review is performed by the Director of PBGC. After this approval, the budget request, as finalized by the Director, is shared with department directors and forwarded to DOL for review and approval.

Department directors are responsible for disseminating the final budget request to their respective BLOs and other subordinates. If necessary, the PBGC Director or the Director of BD will brief PBGC Board Representatives on the PBGC budget request.

(7) Based on DOL’s review, passbacks are noted within the budget formulation spreadsheet. The DOL passback consists of DOL’s decision(s) on the resource levels that were requested by PBGC. Although PBGC receives a passback (decision) from DOL, the Corporation may, with some limitations, appeal the decision. The appeal is typically in the form of a written request for reconsideration. Once the budget differences have been resolved, the budget is submitted to OMB. OMB reviews the budget and forwards the OMB passback through DOL to PBGC. OMB’s passback will document OMB’s decisions on PBGC’s budget request for the year. Again, PBGC may have an opportunity to appeal the OMB passback, usually in the same format as the DOL appeals process. Based on the final OMB decision(s), BD prepares the budget for submission to Congress. After appropriation hearings conducted by Congress, an appropriations bill including a limit on administrative expenditure from PBGC’s revolving fund is approved. This approval is evidenced by the enacted appropriation legislation. If Congress does not provide a full-year appropriation, it will usually provide a continuing resolution or CR. The CR legislation will be accompanied by guidance from DOL and OMB that will allow PBGC to post funds for execution. Based on the enacted appropriation or CR, the BD will receive an apportionment from OMB in the form of either an approved SF-132 or an automatic apportionment.

d. Budget Execution.

(1) The budget formulation process builds the justification for PBGC-required resources, while the budget execution process starts with the enacted legislation. BD provides departmental spend plans to department directors and BLOs which identify budget line items by object classes and/or project numbers based upon the limits imposed by enacted legislation.

(2) The BD is responsible for loading the departmental spend plans in the Consolidated Financial System (CFS) maintained by the CFO Organization. The General Accounting Branch (GAB) records and verifies transactions to commit, obligate, and expend funds in the CFS, some of which are automatically interfaced. In addition, CFS provides information support on the status of budgetary authority and execution for PBGC.

(3) CFS uses the following classification structure, derived from PBGC Directive FM 05-02, “Account Classification Structure/Code Combinations,” for budget lines:

a. Fund;

b. Expense Account;

c. Program Year;

d. Cost Center;

e. Activity;

f. Object Class; and

g. Project.

e. Funds Control.

(1) Once an initial approved level is recorded in the CFS, the Funds

Control feature within CFS prevents the posting of allotments and obligations in excess of the approved budget for each fiscal year.

(2) Using the departmental budget submissions and the SF-132 or any automatic apportionment, BD determines the amount of budget authority by object class and project number to allot to each department per quarter or annually. A budget analyst updates the CFS based upon the apportionment indicated in the SF-132 or CR (automatic apportionment) to reflect the approved budget. BD allocates Pension Insurance, Pension Plan Termination and Benefit Administration, and Operational Support to the departments as appropriate. Pension Benefit Payment and Financial Assistance funds are allocated at the corporate level and not the departmental level.

f. Budget Reports.

Once the budgetary information is loaded and posted to the CFS, the Budget Manager reviews the budget data to ensure the accuracy and completeness of the information. After confirming the accuracy and completeness of the information, the BD Manager or the BD Director will notify department directors and BLOs their funds have been loaded in CFS and are available for budget execution.

Periodically, a report of uncommitted balances by object class and activity will be run to ensure that activity totals agree with the SF-132 as well as the summary spending plan spreadsheets.

g. Reprogramming.

(1) A department in some cases may reprogram money in its’ operating budget, which allows them to move funds from one cost center to another within the same budget activity and object class or project, or from one cost center to another cost center. Department directors may require BLOs to notify them of all reprogramming actions prior to execution and/or designate appropriate levels of reprogramming authority within which BLOs may move funds without prior permission.

(2) Department directors and/or BLOs may request additional resources if they require more funding or positions to meet PBGC's goals and objectives and cannot get the necessary amount by reprogramming within their department. Also, department directors may request additional resources if they require more funding or positions to meet workload influxes anticipated by ONR. BD will coordinate across the agency in cases where large influxes are projected in the year of execution. The process will be similar to the budget formulation cycle to ensure agency-wide coordination. Departments requesting additional resources should send an e-mail, memorandum or an off-cycle request, which must, at a minimum include: the purpose, the need and urgency for the funds, the dollar amount, cost basis, how long the department director expects it will take to obligate any additional funds, any changes in IT exhibits and ITPRB coordination, and if the item will be recurring or non-recurring, to their assigned BD budget analyst for processing.

(3) If surplus funds have been identified by the department, the BD manager has the authority to place those funds in an earmarked account to address higher corporate requirements/needs. However, if the BD Manager determines that during the review and evaluation process that the initial department’s justification (other pertinent materials) is warranted, then the Budget Manager has the authority to reprogram the funds as the department requested (Note: the threshold is up to $200,000, but may refer reprogramming decisions of less than $200,000 to the BD Director for concurrence). The BD Director has the authority to reprogram up to $1,000,000 but usually consults with the BPIT regarding reprogramming requests greater than $200,000. For reprogramming requests greater than $1,000,000, the BD Director will review the requests with the BPIT and make recommendations to the EMC during their Operational Integration Meeting for their approval. If a submitting department disagrees with a BD or BPIT decision regarding a reprogramming request within their approval limit, the director of the department may appeal the decision to the CMO. C level executives who disagree with a decision of the CMO may appeal the decision to the EMC or Director of PBGC. Decisions from the Director of PBGC are not subject to appeal.

h. Funds Commitment and Execution Review.

(1) PBGC employees authorized to purchase goods and services typically initiate the budget execution phase by preparing a procurement requisition or a direct obligation to CFS. The procurement requisition is used to establish a commitment which reserves budget authority from the budget allotments for the estimated amount of the order. Commitment accounting is useful for planning and fund control; however, commitments are not legally binding, do not represent an obligation of funds and do not encumber PBGC’s ability to reallocate the funds for other purposes. The requisition for ordering goods and services is processed through the Procurement Department’s information system unless a purchase card is used. The General Accounting Branch (GAB) is responsible for checking available funds and recording the commitment in the CFS. Nevertheless, BLOs should not initiate expenditures unless funds are/will be available.

BLOs should check the status of funds for their accounts and not depend on GAB to “backstop” their budget execution activities. BLOs should notify their respective department directors of commitments they have recorded and the current status of funds on a regular basis.

(2) Acquisition of goods and services using a government purchase card will reduce funds available for other commitments and obligations covered by the same budget line. Policies regarding use of purchase cards are available on the Policies and Directives page of the intranet at http://intranet/finbudpur/Purchase_Card_Manual_v2.1.pdf and http://intranet/DirPolDel/Policies/pol_cc_guidelines.pdf.

BLOs should monitor the status of funds for each of their budget line items and alert their department or division directors to potential shortfalls from use of purchase cards. BLOs should also review their status of funds in the financial system before submitting any commitments or obligating transactions. In addition, BLOs should continually communicate current status of funds details to appropriate Division, Department or C level sponsors.

(3) The PBGC does not record a commitment for Personnel Compensation, Benefit Payments and Financial Assistance. Unobligated budget allowances available for these purposes are decreased at the recognition of the obligation and expenditure.

(4) The BD Director may initiate a mid-year review of budget execution if, in his or her opinion, it would facilitate reprogramming requests, minimize waste and allow PBGC to effectively obligate current year funds prior to the end of the fiscal year. Generally, as PBGC enters the third quarter of each fiscal year, department directors are asked to review spending, hiring plans and planned purchases and acquisitions for the remainder of the fiscal year to identify excess or shortfalls in funding. The focus is primarily on budget lines that are greater than $100,000, (excluding personnel compensation and benefits), as well as:

a. Planned major contractual actions (new or exercise of options)

b. Departmental hiring plans against known lapses

c. Timeline and breakout for major initiatives/projects

d. Identification of any anticipated reprogramming of funds

(5) During the execution review, if it is determined that there are potential and/or known shortfalls, department directors may initiate a reprogramming request. The BD summarizes, reviews and evaluates the Corporate fiscal status at mid-year to determine if a reprogramming request should be sent to DOL. (This process requires BPIT review and EMC concurrence prior to a reprogramming request being sent to DOL).

Changes to budgetary resources among activities require DOL and OMB approval. The approval process may take up to 45 days.

(6) Using the reports from the CFS, BLOs track, report and manage departmental budget execution. BD conducts periodic reviews with the departmental BLOs for purposes of analyzing any variances between the operating budget and actual obligations. Also, the BLOs of each department can access the obligation balance report by cost center, or the status of funds report, which summarizes commitments and obligations posted into CFS during the period. Department directors may also access this information as needed.

(7) During the last part of the fiscal year, the budget analysts meet with their departmental representatives to discuss and/or review the commitments, obligations, and liquidation activities to determine how much funding needs to remain in the department’s budget. If the funds are identified as surplus, then those funds are placed in reserve accounts within the same activity and object class. This is to ensure the current-year budget is not obligated after fiscal year-end.

i. Budget Execution under a Continuing Resolution.

OMB will issue apportionment and funding guidelines specific to each CR when they are enacted. PBGC’s Budget Department will allocate spending authority provided by each CR based on OMB instructions, any urgent current needs, and the Corporation’s preexisting spend plan at the time the CR is enacted.