Lesson 1.3: Budgetary Process: Federal Funding Flow Lesson Overview

Objective: At the end of this lesson, you should be able to:

  • Describe funds allocation to and within FEMA and IFMIS.
Budgetary Process: Federal Funding Flow
Congress appropriates funds to FEMA. Funds follow the federal funding flow and are available for use by FEMA once management allocates the funds to the various programs.
Federal funding flow diagram: appropriation (Congress) gives authority to do business, may be direct (D) or reimburseable (r)>treasury warrant (Dept of Treasury) authority to disburse funds>apportionment (OMB) category A: quarterly, category B: any method>allotment (FEMA) HQ level>sub-allotment (FEMA) directorate level>allocation (FEMA) program level, working level - ACCS>sub-allocation (FEMA)

Appropriation

FEMA receives funding through appropriation as a result of the enactment of laws by Congress. 

This is the authority given to Federal agencies to incur obligations and make payments from the Treasury for specified purposes. Authority can be Direct (funds given by the U.S. Congress) and/or Reimbursable (authority by U.S. Congress which allows agencies to keep funds earned from providing services to others).

Treasury Warrant

The Department of the Treasury issues FEMA a Treasury warrant for each appropriation provided by Congress. The Treasury warrant establishes a cash balance at the Department of the Treasury for agency disbursements.

Apportionment

The actions by which the Office of Management and Budget (OMB) issues FEMA an apportionment letter, which identifies how an appropriation must be budgeted and distributes amounts available for obligation, including budgetary reserves established pursuant to law in an appropriation or fund account. Funds which must be distributed quarterly are categorized as Category A apportionment, while funds which can be distributed in any method are categorized as Category B apportionment. Each category of apportionment has its own standard requirements for funds control.

Allotment

Allotments are the first distribution of apportioned funds within FEMA at a headquarters level. FEMA’s Office of the Chief Financial Officer (OCFO) allots all apportioned funds to the director of FEMA.

This is an authorization by either the agency head or another authorized employee to his/her subordinates to incur obligations within specified amounts.

Sub-Allotment

A sub-allotment represents the initial distribution of authorized allotments at the directorate level by the Director to specific program areas to facilitate the execution of FEMA programs. Sub-allotments are presented to FEMA Associate Directors, who are responsible for program execution agency-wide.

Allocation

The allocation represents the establishment of internal funding levels of authorized funds, or the working level of budgeted authority.

Funds are allocated from the sub-allotment to meet specific needs, such as transportation, supplies, and payroll. Funds must be allocated before any other action can take place.

Once allocations are in place, FEMA program managers can begin to incur obligations and expenditures for the execution of FEMA programs. Obligations can be incurred to the limit of the funds established for the specified purpose.

Sub-allocation

Sub-allocations enable FEMA to move an established allocation to a lower level of funds control.

Lesson 1.3 Summary
This lesson covered:
  • The budgetary process and Federal funding flow.

The next lesson presents IFMIS functional capabilities and the funds control waterfall.