"Obligations other than liabilities" consists of undelivered orders, unperformed contracts, loan agreements, and other lawful obligations which have not yet become current liabilities.

60. Schedules supporting business-type financial statements.

Additional detail and information will be submitted in the form of supplementary schedules, some to be printed in the budget and others to be used as working papers in the review of the programs and estimates of business-type budgets. Such schedules, other than (a) and (b) below, will be numbered in relation to the statement which they supplement (e. g., B-1, B-2, C-1, etc.); schedules to be printed will always be numbered ahead of schedules in any series which are not to be printed. Appropriate cross-references should be made on the principal statements to the supplementary schedules.

Supplementary schedules required are as follows: (a) Budgetary authorizations (to be printed; see exhibit 60A). These schedules will relate to "feeder" appropriations and funds and to authorizations to expend from debt receipts. They will treat as obligations the commitments for loans, contracts for capital outlay, or other legal obligations which are in excess of the working capital of the fund. They will show the portion of the authorizations placed in the fund or paid off by the fund each year. These schedules will not be submitted when the statements described in sections 43 and 53 are required.

(b) Schedules relating to limitations enacted annually, for example on administrative expenses (to

be printed). These schedules will follow the form described in sections 41-44 and 45, and will be preceded by language sheets as described in sections 31-37.

(c) Object schedules, where there are no annual limitations on expenses (to be printed). These schedules will follow the form described in section 45.

(d) Position with respect to lending, guaranty, or insurance authority (to be printed). This schedule will show the statutory authorization for lending, guarantees, or insurance, including loans outstanding or guarantees or insurance in force, as well as undisbursed commitments at the end of the year. Only those enterprises subject to a specific statutory limit on lending, guaranties, or insurance are required to submit this schedule.

(e) Capital expenditures and/or loans (to be printed at the option of the Bureau of the Budget). This schedule will show (1) for major construction programs, the principal projects and features and the amounts for each, and (2) for loan programs, the kinds and amounts of loans and other data similar to that shown in the current budget. Enterprises which do not make major capital expenditures or loans will omit this schedule.

(f) Selected working capital changes (not to be printed; see exhibit 60B). This schedule, analyzing the increases and decreases in selected working capital, will list these items as shown on statement C and the changes therein.

(g) Such other schedules as are requested by Bureau of the Budget representatives, either for printing or to assist otherwise in analysis of the program and estimates.

SUBMISSION OF ANNUAL BUDGET ESTIMATES

61. Purpose and content of justifications.

The purpose of a budget justification is to explain and support the estimates to those who review and evaluate the programs and financial requirements therefor. Material submitted in justification of a budget will include:

(a) "Lead off" tabular statements indicating how the amount of each appropriation estimate was derived (section 62).

(b) Such narrative statements, statistical and graphic presentations for each estimate as are necessary to make known the reasons for and basis of the proposed program, administrative requirements, estimated obligations to be incurred, and means of financing (sections 63-65).

(c) Explanations of appropriation language (section 66), of receipts and expenditures (section 67), and of forecast of supplemental estimates (section 68).

(d) Such special statements or tables as may be requested by Bureau of the Budget representatives.

Agencies are encouraged to confer with the Bureau of the Budget representatives in the development of justification material and exhibits, not specifically provided herein, which will most adequately present the component parts of programs and financial requirements.

62. "Lead off" tabular statement.

The justification of each estimate will begin with a tabular statement indicating how the estimate was derived. The form and content of this statement will conform in general with that shown as exhibit 62, unless a different analysis is requested by the Bureau of the Budget representative. The exhibit will be adapted to cover special situations such as no-year appropriations, contract authorizations, etc. When used for regular annual appropriations, entries will be as follows:

(a) On the first line will be shown (as a nonadd item) the actual appropriations for the past year adjusted for transfers to or from the appropriation, if any.

(b) On the second line will be shown (as a nonadd item) the appropriations proposed by the President for the current year.

(c) On the third line will be shown the amount of the appropriation for the current year contained in the annual appropriation act.

(d) Added to this figure will be the amounts of any supplemental appropriations already enacted for the current year and, separately, any anticipated supplemental appropriation to be included in the regular budget schedules (section 51).

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(e) Any amounts involved in any actual or comparative transfer will be added or deducted as the case may be, and at this point a subtotal, “Total appropriations for (current year)," will be shown

(f) Any decreases in requirements for the budget year will be itemized and deducted from the previous figure; any increases in requirements for the budget year will then be itemized and added; and there will then be shown the total, which will represent the estimated appropriation for the budget year.

The current year appropriation, decreases, increases, and the budget year estimate will then be analyzed by activities, objects of expenditure, or such other basis as will best serve as a summary of the remainder of the justification.

63. Narrative justification of programs and financial needs.

A narrative justification will accompany each esti mate. The content and form of written justifications will vary with the activities included in the estimate. It should be based on the program by activities and supplement the narrative statement on program and performance to be printed in the budget. It should be organized as set forth in section 44.

The justification will be influenced by the contents of the "Budget Digest" or other basic data book formally on file with the Bureau of the Budget. Generally, however, each of the following subjectmatter areas will require explanation:

(a) The objectives for the budget year. A precise statement of the objectives of each work program; the demonstrated need for achieving the objectives (it is not sufficient to say "it is necessary"); the statutory authority for accomplishing the objectives.

(b) Proposed plans for achieving the objectives. Basic methods chosen to achieve the objectives; assumptions as to prospective workloads; organizational or geographic issues; adjustments in administrative procedures, types of workloads, etc.

(c) Derivation of requested appropriation. Conversion of the objectives and methods to be employed into the obligations to be incurred and the appropriation required. The method by which the objectives and administrative plans are related to the actual appropriation required is of the highest importance. It should show how the amounts requested are related to the work to be done by using such factors as production per employee, cost per unit produced, staff complements per office, or other objective criteria.

To be useful, a written justification must be read and understood by all subsequent reviewers.

SUBMISSION OF ANNUAL BUDGET ESTIMATES

Agencies should consider the fact that the period available for budget review of each appropriation is short, and the time available does not permit exhaustive study of a mass of text to sift out the essential elements of the case for the proposed estimate. All major issues should be covered, but in concise, specific language. Wherever feasible the text submitted to the Bureau of the Budget should be in such form that it may be used for subsequent congressional review with a minimum of revision.

64. Use of work measurement and unit costs.

It is important to use work measurement or unit costs in justification of estimates wherever possible. Although the use of statistics must be tempered by judgment, there is no more readily defended method of justifying the requirements for an accepted program of work than by the judicious use of work measurement or unit cost statistics.

Work measurement relates the volume of work to the staff time required by means of performance ratios such as claims adjudicated per examiner, miles surveyed per survey party, etc. The forecast of work volume in relation to the annual performance per employee or groups of employees can be readily transformed into personnel requirements. Personnel requirements, in turn, can be translated into the estimated funds required.

Unit costs relate the volume of work to the funds required to produce a unit of work. Unit costs may include, in addition to personnel costs, the cost of supplies, travel, equipment, etc. Thus, unit costs reflect the ratio of work done to staff time required and, in addition, the volume and price of material and services required.

Agencies are urged to extend the use of work measurement and unit cost analysis to both the common service activities and program activities. The Bureau of the Budget will, to the extent of its resources, assist agencies in the establishment or improvement of such systems.

65. Use of tables, charts, and graphs.

The presentation of data is important because much of the effort which has gone into the collection and compilations of the data will be lost if it is not presented clearly and effectively. Tables, charts, graphs, maps, and other visual aids can frequently be designed to replace lengthy textual explanations.

Such material should be included, however, only when it will assist the presentation of the justification. Tables, charts, and graphs should be coordinated with the text, and so arranged as to emphasize the most significant facts and relationships.

66. Explanations relating to appropriation language.

No explanations or justifications will be written on the language sheets, except notes proposed for printing as provided in sections 36 and 37. The following material should be submitted, where necessary, to support the language sheets: (1) an explanation and justification of all proposed changes in the language of the appropriation, other than changes in amounts; (2) a list of all provisions (old or new) in the language proposed for the budget year which are subject to a point of order under the rules of either House of Congress, the reason for including them in the proposed language, and what steps, if any, have been taken to remedy the point of order situation; and (3) if any new provisions are included which relate to employment of personnel without regard to civil service or classification laws, a copy of a letter from the Civil Service Commission approving such provisions.

67. Explanation of receipts, reimbursements, and expenditure estimates.

The statement of miscellaneous receipts, Standard Form 108, will be supported by an explanation of any marked variations in estimates for the past year, current year, and budget year.

Receipts which are based upon the work of the agency (e. g., copying fees, sales of charts, etc.), whether they are deposited to receipt accounts or credited as reimbursements to appropriation accounts, will be supported by an explanation showing how the estimate was computed. A statement as to the adequacy of the fees charged should be included, including action proposed in cases where the fees are considered inadequate.

The method of estimating expenditures will be explained. The statement will tell how the totals are estimated as well as how the distribution shown on the schedule of budget authorizations, expenditures and balances (section 52) has been derived.

68. Explanation of forecasts of supplemental estimates.

When the need of a supplemental appropriation is forecast in accordance with sections 3 and 4, a separate justification will be required. The justification will set forth fully the need for the additional appropriations, the reasons for their omission from the regular estimates of the year concerned, and the reasons why it is considered essential that the additional appropriation be granted during the year instead of obtaining the money in a regular appropriation the following year. The explanation of the forecast submitted at this time will not supplant the justification of the supplemental estimate itself when it is formally submitted later.

SUBMISSION OF ANNUAL BUDGET ESTIMATES

73. Schedules on foreign currency funds.

Schedules (Standard Form 3a) in accordance with instructions as set forth in sections 41-44, 45 and 51-54 will be submitted for all accounts which relate to foreign currencies made available for use without purchase in United States dollars. Amounts will be stated in United States dollar equivalents computed generally at the rate of exchange current at the time of the transaction, except that balances carried forward will be computed at the rate of exchange current on June 30.

The following entries will be used in addition to any applicable entries described under the preceding instructions:

"Authorization to expend foreign currency receipts pursuant to . . . [statutory citation]"-Amounts of foreign currencies which will become available during the fiscal year. The citation to the legal authorization should be to the United States Code or to the Statutes at Large. This entry will be used in lieu of the "Appropriation" entry described in sections 42 and 51.

"Adjustment due to changes in exchange rates to permit conversion to dollar equivalent”—Amount by

which the foreign currency has decreased (minus entry) or increased (plus entry) in value due to changes in exchange rates.

If a single foreign currency fund supplements two or more separate appropriations, the program by activities should be so arranged as to contain a separate section for each appropriation that is supplemented (as well as to show the activities involved under each appropriation), and the schedule of budget authorization, expenditures, and balances should show a distribution of expenditures by appropriation titles. No distribution between current and prior authorizations is required. The expenditure stub entry should read "Total expenditures (payable directly from foreign currency funds)."

In cases where authorizations for the use of foreign currencies without charge to dollar appropriations are discontinued effective with the current year or budget year, the obligations incurred under the previous authorization may be shown as comparative transfers to the appropriations from which the programs will be financed in the future.