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OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

SUBJECT: Operating Expense Budgets

A. Purpose. This Instruction establishes the initial requirements for the implementation of full scale operating expense budgets in the area offices, the laboratories and the Training Institute. These procedures will be escalated gradually as the staff of these offices gain more knowledge of budget and financial control systems. This concept is also intended to make managers responsible and accountable for public monies assigned to them for the accomplishment of their mission.

B. Scope.

1. An operating expense budget is a system of financial management which provides for operational planning and control on the basis of expense. The system is useful at all operating levels for the purpose of defining goals and measuring progress in terms of manpower, funds, and other resources, and for supplying a basis for analyzing deviations from targets. Expenses are the dollar measurement of all the resources used for a given workload output in a given fiscal period. Period-to-period, year-to-year, expenses are the only consistent and reliable measurement of operating performance.

2. This Instruction applies to the regional and area offices, the laboratories, and the Training Institute.

C. Cancellation. OSHA Instruction BUD 4-1.1, Operating Expense Budgets, September 29, 1978, is canceled.

D. Background. The budget formulation processes and fund control practices for the applicable offices have been performed in the Regional and National offices since the inception of OSHA in 1970. This condition has prevailed as a means to expedite the completion of the budgets and to spare area offices from such burdens. However, with the advent of ZBB, operating expense budget requirements are an integral part of such a concept. Consequently, the establishment of operating expense budget systems has been approved by the Assistant Secretary for OSHA to comply with the ZBB requirements and to provide a mechanism which will generate increased management awareness and participation in the area of fund control.

E. Responsibilities.

1. Regional administrators are responsible for:

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

a. Planning and controlling their resource needs to assure attainment of program objectives within the parameters of their fund allotments.

b. Providing technical assistance and administrative support to area offices.

c. Supplementing this Instruction by issuing specific guidelines via an Office Directive for items peculiar to their operation not covered herein.

d. Issuing annual funding levels to area offices via an Annual Funding Authority (AFA).

e. Monitoring the total obligations incurred by area offices to preclude a deficiency in their AFAs.

f. Submitting consolidated financial status reports in OSHA Form 148. (Figure 1).

2. Area directors, heads of laboratories and the Training Institute are responsible for:

a. Implementing the requirements of this Instruction as supplemented by office directives or National directives respectively.

b. The proper control and utilization of funds issued them under the AFA's.

3. The Office of Program Budgeting, Planning, and Financial Management is responsible for:

a. Providing Program direction and technical advice to all concerned for the execution of their budget processes.

b. Issuing an annual allotment of funds to the regional offices, to the national directorates, the laboratories and the Training Institute.

c. Monitoring the total obligation of funds at the regional and directorate level.

F. Definitions.

1. Regional/Area Operating Budgets: A system by which all major field components plan, and periodically review their operations so as to achieve stated objectives through the management and expenditure of a planned amount of resources.

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

2. Allotment: Authority delegated by the head or other authorized official of an agency to agency employees to incur obligations within a specified amount pursuant to an apportionment of funds made to the agency by the Office of Management and Budget.

3. Annual Funding Authority (AFA): Authority delegated by the official holding an allotment of funds to a lower level activity in the organizational structure of an agency to incur obligations within a specified amount.

4. Cost Center: A three digit code in the accounting classification (22 digit code) which identifies the organizational entity liable for the financial transaction. It is also used to assign administrative responsibility for proper handling of specific funds allotted or authorized under an AFA to an activity.

5. Object Class: A four-digit code in the accounting classification which identifies the element of expense. It categorizes the transaction according to the type of service, articles or other items involved. These codes are in OSHA Administrative Directive FIN 20.2, revised August 17, 1978.

6. Obligations: Liabilities incurred by agencies for salaries and wages; travel and transportation, contractual services; contracts entered into for purchase of supplies and equipment, or other commitments requiring the payment of money.

C. Procedures.

1. General.

a. The initial stage toward developing the operating expense budgets is the preparation and submission of a quarterly financial status report by the activities indicated in this Instruction. In order to provide the area offices with the necessary input for the preparation of the report, the regional offices will forward to area offices a copy of their cost center portion of the Detail Fund Report, not later than a working day after their receipt from the OASAM concerned. Regional offices will also provide them with a copy of any source document initiated in the regional office, or from any source, having a financial impact on the funds authorized to the offices by the Annual Funding Authority. The laboratories and the Training Institute will continue to receive their accounting runs and the rest of the support from their Regional OASAM and from the National Office.

b. The present submissions of the estimated annual operating

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management budgets to the National Office by the regional offices, the laboratories, and the Training Institute are not affected by this Instruction.

c. It is recognized that other Regional offices have operating expense budgets systems in operation in their area offices. This Instruction will not alter those procedures except for the preparation and submission of the Financial Status Report outlined herein. Continuation of their system is encouraged.

d. Future additions to this stage of the operating expense budgets will include provisions which will provide data to associate planned expenditures with planned program output, i.e., inspections, workyears, chemical analysis, etc. They will also include the preparation of estimated operating budget/program output data by the area offices for negotiation with the regional offices for their final AFA's.

2. Format - OSHA Form 148.

This form will be available through normal supply channels.

3. Preparation of the report.

a. Title - Financial Status Report, OSHA Form 148.

b. Frequency.

(1) Area offices. Submit reports quarterly for the first three quarters of the fiscal year on the 20th day of the month following each quarter of the fiscal year. Reports for the 4th quarter will be submitted monthly for July and August on the 20th day of the following month. Items affecting the preliminary year-end reports in September will be submitted to the regional offices by telephone as they occur.

(2) Regional offices - Same as the area offices except that quarterly reports will be submitted on the 1st day of the second month of the quarter following the reporting period. Monthly reports for July and August will be submitted in the same manner as the quarterly reports.

(3) A final report for the fourth quarter is not required for the National Office but will be submitted when required by a Regional office for statistical purposes.

c. Submitted by:

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

(2) Regional Administrators, Training Institute, and the laboratories to the Division of Financial Control and Contract Coordination.

d. Preparation guidelines for OSHA Form 148 - See Appendix B.

e. Regional offices report. The Financial Status Report, OSHA Form 148 submitted by the regional offices, will consist of:

(2) A consolidated report of the area offices including the regional office cost center.

(4) The report will be mailed to:

U.S. Department of Labor - OSHA Room N3613, NDOL 200 Constitution Avenue, NW Washington, D.C. 20210

ATTN: Chief, Division of Financial Control and Contract Coordination

4. Preparation of the Annual Funding Authority form. See Appendix C.

David C. Zeigler Director Administrative Programs

DISTRIBUTION: National, Regional and Area Offices

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

Occupational Safety & Health Administration Financial Status Report 8/17/78 U.S. Department of Labor _________

XXX Cost Center________________________

__________________________________________________________________________

(1) |(2)Obligations |(3)Obligations |(4)Total |(5)

 Object Class |   Through     |incurred/not on | Obligations |Projected
              |Date: 7/31/78  | Fund Report    |Thru 7/31/78 |Obligations

______________|_______________|________________|_____________|____________

11 Personnel | 540,932 | -0- | 540,932 | 118,741 Compensation | | | |

______________|_______________|________________|_____________|____________

12 Personal | 52,455 | -0- | 52,455 | 11,515 Benefits | | | |

______________|_______________|________________|_____________|____________

21 Travel & | 65,314 | 2,300 | 67,614 | 12,037 Transportation| | | | of Persons | | | |

______________|_______________|________________|_____________|____________

22 Transporta-| 848 | 72 | 920 | 114 of Things | | | |

______________|_______________|________________|_____________|____________

23.1 SLUC | 42,700 | -0- | 42,700 | 9,373 Charges | | | |

______________|_______________|________________|_____________|____________

23.2 Other | 13,378 | -0- | 13,378 | 2,937 Rent, | | | | Communications| | | | etc. | | | |

______________|_______________|________________|_____________|____________

24 Printing | -0- | 25 | 25 | 50

______________|_______________|________________|_____________|____________

25.1 Working | 8,000 | -0- | 8,000 | 1,756 Capital Fund | | | |

______________|_______________|________________|_____________|____________

25.2 Training | 4,241 | 110 | 4,351 | 821

______________|_______________|________________|_____________|____________

25.3 Other | 4,995 | -0- | 4,995 | 1,096

Services | | | | ______________|_______________|________________|_____________|____________

26 Supplies | 3,148 | 17 | 3,165 | 674

______________|_______________|________________|_____________|____________

31 Equipment | 2,187 | -0- | 2,187 | 480

______________|_______________|________________|_____________|____________

42 Claims | -0- | -0- | -0- | -0-

______________|_______________|________________|_____________|____________

(9) | | | | Total | 738, 198 | 2,524 | 740,722 | 159,594 | | | |

______________|_______________|________________|_____________|____________

CONTINUED FROM ABOVE:

__________________________________________________________________________

2 (1) Object

______________|_______________|________________|__________________________

11 Personnel | 659,673 | 687,000 | Compensation | | | + 27,327

______________|_______________|________________|__________________________

12 Personal | 63,970 | 67,000 | Benefits | | | + 3,030

______________|_______________|________________|__________________________

21 Travel & | 79,651 | 75,000 | Transportation| | | - 4,651 of Persons | | |

______________|_______________|________________|__________________________

22 Transporta-| 1,034 | 1,000 | of Things | | | - 34

______________|_______________|________________|__________________________

23.1 SLUC | 52,073 | 55,000 | Charges | | | + 2,927

______________|_______________|________________|__________________________

23.2 Other | 16,315 | 15,000 | Rent, | | | Communications| | | - 1,315 etc. | | |

______________|_______________|________________|__________________________

24 Printing | 75 | 100 |

______________|_______________|________________|__________________________

25.1 Working | 9,756 | 10,000 | Capital Fund | | | + 244

______________|_______________|________________|__________________________

25.2 Training | 5,172 | 5,200 |

______________|_______________|________________|__________________________

25.3 Other | 6,091 | 6,500 |

Services | | | + 409 ______________|_______________|________________|__________________________

26 Supplies | 3,839 | 3,500 |

______________|_______________|________________|__________________________

31 Equipment | 2,667 | 3,000 |

______________|_______________|________________|__________________________

42 Claims | -0- | 200 |

______________|_______________|________________|__________________________

(9) | | | Total | 900,316 | 928,500 | + 28,184 | | |

______________|_______________|________________|__________________________

OSHA Form No. 148 (October 1, 1978)

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

__________________________________________________________________________

| |DATE | UNITED STATES DEPARTMENT OF LABOR | | NOTIFICATION AND APPROVAL |___________________

| OF ANNUAL FUNDING AUTHORITY (AFA) |AFA NO. | | A-78-1 |_____________________________________________________|___________________

|TO (Name and Title) | FROM(Name Title and Signature) |ALLOCATION NO. | Area Director | Regional Administrator,Region 1|___________________

| Boston Area Office | Occupational Safety & Health Administration | Walthan, Mass. | Boston, Massachusetts |____________________|____________________________________________________

|PERIOD COVERED |APPROPRIATION NO. |ACCOUNTING CLASSIFICATION | 10/1/78 - 9/30/79 | 1690400 |9400-A-2-F-102 |____________________|__________________________|_________________________

| | | | NOTIFICATION AND APPROVAL IS HEREBY GIVEN FOR THE | ANNUAL FUNDING AUTHORITY DESCRIBED BELOW: | | Assistant Secretary for Occupational Safety and Health Administration | Allotment No. 79-3, dated ________________________. | | AFA | THIS SHALL BE ADMINISTERED IN ACCORDANCE WITH DEPARTMENTAL POLICY AND | REGULATION. | |________________________________________________________________________

| PURPOSE OF AFA | PREVIOUS |INCREASE(+) OR | PRESENT | AND REMARKS | AFA TOTAL | DECREASE (-) | AFA TOTAL |____________________|_________________|__________________|______________

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |____________________|_________________|__________________|______________

| QUARTERLY TIME PERIODS |________________________________________________________________________

| 1ST QUARTER | 2ND QUARTER | 3RD QUARTER | 4TH QUARTER |________________|_________________|__________________|__________________

|________________|_________________|__________________|__________________

|________________|_________________|__________________|__________________

| | | | Signature of Regional Administrator | _____________________________________

| (signature of issuing official) | |________________________________________________________________________

DL FORM 1-183 REV JULY 1967

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

1. Personal Compensation (11). Using your current payroll, add 10 percent to cover the October pay increase, promotions, within grades, and an extra day's pay. Any vacant positions for which funding is requested must be displayed by estimated cost and estimated days the position will be filled in Fiscal Year 1979. Funding for summer temporaries and regular temporaries should be shown separately.

2. Personal Benefits (12). Compute at 10 percent of object class 11. To this, add costs based on past year's experience to cover permanent change of station, and add cost-of-living allowances, if applicable.

3. Travel (21). Compute by dividing current year's travel expenditures by CSHO/IH staff years. Project total number of CSHO/IH staff years anticipated in Fiscal Year 1979. You must show additional travel costs associated with training of CSHO/IHs if they will be significant.

4. Transportation of Things (including household goods) (22). Show anticipated expense and attach summary justification if more than $20,000 per region.

5. Rent (23). Consider current rates against projected increases for rental of existing space, or additions to present space.

6. Printing (24). Shown on regional budget summary.

7. Other Services (25) Show on regional budget summary and includes service contracts, expert witnesses, etc. Allow $1,400.00 per man-year for the Working Capital Fund.

8. Supplies (26). Estimate based on past year's experience taking into account any new CSHO/IHs or other staff increase or decrease.

9. Equipment (31). Purchases of desks, chairs, typewriters, copying machines, etc. Also include the minor technical safety equipment permitted to be purchased locally. Technical equipment purchases will continue to be made by the National Office.

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

The following guidelines will he followed for the preparation of OSHA Form 148

1. Column (2) Obligations through - These figures are obtained from the copy of the cumulative total column of the Detail Fund Report sent to the activities in accordance with paragraph F-1 of this directive. This is a computer-generated report in listing form. It provides the amounts expended and obligated by object class, within cost centers by appropriations. These figures are shown on the lines captioned "Total For Expense Group" or Total For Object Class" if the last two digits of the object class code numbers are other than 00 Enter the applicable date at the head of the column below the caption "Obligations through".

2. Column (3) Obligations Incurred/Not in Fund Report - These obligations consist of source documents such as; equipment and supplies purchases, travel expenses, rental and telephone charges, etc., that have been incurred but have not been entered in the accounting system as of the cut-off date for feeding information to the computer. In order to achieve an accurate figure for this item, each activity must establish a tickler file of documents which affect the financial condition of the suballotment. Documents are removed from these files when their entry has been verified in the accounting runs. The total amount of the documents left in the tickler file should be the figure entered in this column itemized by object class.

3. Column (4) Total Obligations through - This is the total of column 2 plus column 3. Enter the applicable date at the head of the column below the caption "Total obligations through".

4. Column (5) Projected Obligations - The amount entered in this column requires a careful computation of the estimated cost to operate the activity for the remainder of the fiscal year. Even though these figures are considered estimates, they must be attained through viable calculations of the cost factors of ongoing and projected programs. In computing the estimates for this column, the field managers should project expenditures against the major items of the object classes. Each object class should be carefully considered, but extreme care should be taken with personnel, travel, and rent. Appendix A provides guidelines for these computations.

5. Column (6) FY 1979 Projected Obligations - This column is the total of columns 4 plus column 5. This amount will be your estimated obligation of funds for the fiscal year. When compared with the amount available column, the areas needing closer monitoring can be determined readily and will indicate what adjustments may be necessary in the form of reassessment of program priorities or other projected expenses. It could also mean

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

that adjustments may be necessary on the budget request for the next fiscal year.

6. Column (7) Amount available - The amount available is the total of your allotment or Annual Funding Authority by object class. It should remain constant throughout the fiscal year unless an increase or decrease is necessary based on projected spending patterns or future policy decisions which will require a supplemental allotment or Annual Funding Authority for additional funds or a reduction of the funds authorized.

7. Column (8) Surplus or Deficit - The figure to be entered in this column is the result of column 7 minus column 6 when a surplus (+) exists in the Annual Funding Authority or vice versa when the result reflects a deficit (-). The result of this column should be used as a gauge to determine whether funds are being obligated in conjunction with the Annual funding Authority for the period of time covered by the report.

8. (9) Total obligations - Enter here the total for each column. These figures represent the totals of each category irrespective of the elements of expense (object classes).

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

Preparation of Annual Funding Authority (AFA) Forms

1. DL Form 1-183, Notification and Approval of Fund Allotment will be the instrument used to issue AFA's to the area offices. It will be altered and shown in Figure 2. Complete the form as follows:

a. AFA number - This number will be composed of the allotment letter designation, the last two digits of the fiscal year, and Arabic numbers designation in ascending sequence beginning with number 1. AFA No. A-79-1, A-79-1.1, A-79-1.2 would be the first and subsequent numbers issued to the Boston Area Office, without limit, during fiscal year 1979.

b. TO - Show the name and geographical location of the area office.

c. FROM - Show the name of the regional administrator, his title, region numerical designation, and the bureau's name (OSHA).

d. Period covered - These dates should coincide with the period covered in the allotment advice.

e. Appropriation number - The assigned number for OSHA is 1690400. This number will be constant for fiscal year 1979 funds.

f. Accounting classification - Enter the accounting classification for the area office concerned up to the cost center level.

g. Notification and Approval - Identify the allotment advice given to the Regional Office.

h. Purpose of AFA - Normally a quarterly figure should be given to cover all object classes during the particular quarter of the fiscal year. However, regional administrators may restrict the amount authorized for certain object classes by showing the amount authorized for certain object classes.

i. Availability time periods - The regional administrators may use this item to identify the fiscal year quarter for which the AFA is issued. Otherwise leave this item blank.

j. Signature of issuing official - The Regional administrator must personally sign the document.

OSHA Instruction BUD 4-1.1A JUL 6, 1979 Office of Program Budgeting, Planning, and Financial Management

2. Number of copies required - Prepare three copies and distribute as follows:

a. Original to Area Director

b. Copy 1 - send to:

US Department of Labor - OSHA Room N1613, NDOL 200 Constitution Avenue, NW Washington, DC 20210

ATTN: Chief, Division of Financial Control and Contract Coordination

c. Copy 2 - retain for file.

C-2