Federal Information Technology (IT) Budgeting Process in the Executive Branch: An Overview

Federal Information Technology (IT) Budgeting Process in the Executive Branch: An Overview

Federal Information Technology (IT) Budgeting August 17, 2021
Process in the Executive Branch: An Overview
Dominick A. Fiorentino
Information technology (IT) systems serve as a means by which federal agencies interact with
Analyst in Government
citizens, other federal agencies, state and local governments, and the private sector (such as
Organization and
contractors providing goods and services to the federal government). In these interactions, IT
Management
plays an important role in multiple aspects of government operations, including:

 providing services directly to the public,

 running the back-office operations of agencies,
 maintaining records of government activities, and
 providing information to Congress and the public about the activities of agencies and the President.
In recognition of IT’s role in sustaining government operations and achieving policy goals, Congress has passed a series of
measures that place certain IT planning, budgeting, management, and reporting functions with executive branch agencies,
agency chief information officers (CIOs), and the Office of Management and Budget (OMB).
Aspects of these IT functions coincide with the annual executive budget process. Following relevant statutes and OMB
guidance, agencies engage in capital planning, which results in decisions about how to invest in current and future IT systems
while aiming to make efficient and effective use of taxpayer funds. Capital planning supports agency IT budget proposals
that are submitted to OMB and eventually submitted to Congress as a part of the President’s annual budget submission.
Information that is associated with agency IT budget submissions and reporting can be broadly divided into two subsets: (1)
agency-wide portfolios of IT investments and (2) discrete, individual IT investments or projects. Reporting mechanisms such
as the IT Dashboard website provide Congress, taxpayers, and other interested observers with spending data and performance
metrics that may be used to help assess the status of agency IT investments.
In considering these and other sources of information during the IT budgeting process and how IT investments affect
government operations, Congress may further consider how IT resources are allocated, which IT investment data are most
useful to policymakers, and how agencies can most effectively leverage their IT investments to carry out their missions.
This report is intended to assist Members, committees, and congressional staff with questions about selected aspects of IT
management in the executive branch. In particular, the report covers key milestones in the executive budget process for IT
investments.

Congressional Research Service

link to page 5 link to page 6 link to page 6 link to page 6 link to page 7 link to page 8 link to page 8 link to page 9 link to page 11 link to page 11 link to page 12 link to page 12 link to page 13 link to page 13 link to page 14 link to page 14 link to page 15 link to page 17 link to page 17 link to page 18 link to page 18 link to page 18 link to page 19 link to page 19 link to page 20 link to page 20 link to page 21 link to page 21 link to page 21 link to page 22 link to page 22 link to page 23 link to page 23 link to page 7 link to page 16 Federal IT Budgeting Process in the Executive Branch: An Overview

Contents
Introduction ................................................................................................................... 1
Background.................................................................................................................... 2
Executive Budget Process Overview............................................................................. 2
Agency Budget Preparation and OMB Review.......................................................... 2
President’s Budget Submission............................................................................... 3
Mid-Session Review ............................................................................................. 4
Budget Execution ................................................................................................. 4
IT Funding Mechanisms ........................................................................................ 5
Related IT Budgeting Statutes ..................................................................................... 7
Clinger-Cohen Act of 1996 .................................................................................... 7
E-Government Act of 2002 .................................................................................... 8
Federal Information Technology Acquisition Reform Act (2014) ................................. 8
Statutory Requirements Related to IT Budgeting.................................................................. 9
Chief Information Officers’ Budgetary Roles and Functions............................................. 9
Office of Electronic Government (E-Gov) ................................................................... 10
Capital Planning and Investment Control..................................................................... 10
IT Budgeting Information Flows and Sources .................................................................... 11
Agency-Wide IT Investment Portfolio Budgeting and Reporting ..................................... 13
Agency IT Portfolio Summary.............................................................................. 13
President’s Budget Appendix ................................................................................ 14
Agency Congressional Budget Justification ............................................................ 14
IT Dashboard Website ......................................................................................... 14
Discrete IT Investment Budgeting and Reporting.......................................................... 15
Agency IT Portfolio Detail................................................................................... 15
Agency Congressional Budget Justification ............................................................ 16
IT Dashboard Website ......................................................................................... 16
Potential Issues for Congress .......................................................................................... 17
Accuracy of IT Dashboard Metrics ............................................................................. 17
Budgetary Uncertainty Created by Continuing Resolutions ............................................ 17
IT Budgeting and Iterative Development ..................................................................... 18
Categorization of IT Spending ................................................................................... 18
Centralization vs. Decentralization of IT Management and Budgetary Roles ..................... 19
Recruitment and Retention of IT Personnel.................................................................. 19

Figures
Figure 1. Executive Budget Process Timeline ...................................................................... 3

Tables
Table 1. Agency IT Investment Budgetary Information Flows and Sources............................. 12

Congressional Research Service

link to page 24 link to page 25 Federal IT Budgeting Process in the Executive Branch: An Overview

Appendixes
Appendix. OMB IT Budget—Capital Planning Guidance Compilation (FY2013-FY2022) ....... 20

Contacts
Author Information ....................................................................................................... 21

Congressional Research Service

Federal IT Budgeting Process in the Executive Branch: An Overview

Introduction
Federal spending on information technology (IT) for executive branch agencies and activities
totaled an estimated $92 bil ion in FY2021.1 The effective and efficient use of IT may play a key
role in policy implementation across the federal government’s diverse activities. The use of IT as
an implementation tool may also inform deliberations on policy design, as Congress, agency
officials, and the President consider policy options and corresponding opportunities and risks. IT
systems also facilitate congressional oversight of policy areas and executive agencies.
Federal IT Spending at a Glance

The Department of Defense (DOD) comprised 42% of estimated federal IT spending in FY2021, totaling
$38.8 bil ion.2

Non-DOD agencies (sometimes referred to as “civilian” agencies) comprised the remaining 58% of estimated
federal IT spending in FY2021, totaling $53.4 bil ion. The top three civilian agencies by IT spending in FY2021
were:

the Department of Veterans Affairs (VA), with 14.5% of total civilian IT spending;

the Department of Homeland Security, with 13.7% of total civilian IT spending; and

the Department of Health and Human Services, with 12.0% of total civilian IT spending.3
Federal IT has been an area of continuing interest to Congress.4 Prospectively, IT-related issues
may be of particular interest to the House and Senate Appropriations Committees as they consider
how to provide resources to agencies and conduct related oversight. Furthermore, IT-related
issues may be relevant to almost al of Congress’s authorizing committees as agencies seek to
maintain and build their capacities to faithfully execute laws. For IT management issues
involving the executive branch, the House Committee on Oversight and Reform and the Senate
Committee on Homeland Security and Governmental Affairs have taken significant lawmaking
and oversight roles.
This report is intended to assist Members, committees, and congressional staff with questions
about selected aspects of IT management in the executive branch. In particular, the report covers
key milestones in the executive budget process for IT investments. This process typical y results
in budget requests for congressional consideration. In addition, agency IT projects may involve
authorizing legislation to the extent IT-related issues become relevant in policy design, execution,
and oversight. To help facilitate informed discussion of the process through which budget
proposals take shape, as wel as how funded IT projects may be tracked during their development,
the report outlines relevant laws, Office of Management and Budget (OMB) guidance, and

1 Office of Management and Budget (OMB), Budget of the United States, Fiscal Year 2021: Analytical Perspectives,
February 2020, p. 231, https://www.govinfo.gov/content/pkg/BUDGET -2021-PER/pdf/BUDGET -2021-
PER.pdf#page=231. Clinton T . Brass, Specialist in Government Organization and Management, contributed to this
introductory section.
T he “Information T echnology and Cybersecurity Funding” section of the FY2022 Analytical Perspectives provided an
analysis of agency IT spending but did not include comparable figures for Department of Defense (DOD) IT spending.
CRS did not locate an aggregation of DOD’s IT spending within the FY2022 President’s budget submission. T o allow
for comparison of non-DOD and defense IT spending, FY2021 figures are provided here.
2 OMB, Budget of the United States, Fiscal Year 2021: Analytical Perspectives, p. 232.
3 OMB, Budget of the United States, Fiscal Year 2021: Analytical Perspectives, p. 232.
4 For example, see U.S. Congress, House Committee on Oversight and Reform, Subcommittee on Government
Operations, FITARA 10.0, hearing, 116th Cong., 2nd sess., August 3, 2020, https://oversight.house.gov/legislation/
hearings/hybrid-hearing-on-fitara-100.
Congressional Research Service

1

link to page 24 link to page 7 Federal IT Budgeting Process in the Executive Branch: An Overview

administrative practices. As an organizing framework, the report uses major stages of the
executive budget process to categorize key information flows and reporting mechanisms. This
report does not focus on agencies’ internal processes related to IT budget formation and project
management, because they may vary considerably by agency. The report concludes with a brief
discussion of potential issues for Congress.
Background
The current IT budget process is driven by statutory directives, OMB guidance documents,
administrative initiatives, and agency practices. In particular, the interaction between the
executive budget process and IT-management-related statutes provides the operational framework
for IT budgeting activities.
Executive Budget Process Overview
In general, the IT budgeting process follows the schedule of the executive budget process, which
is established by statute and specified in greater detail through OMB guidance and agency
administrative procedures.5 The frequency of IT budgetary reporting by agencies and OMB often
aligns with corresponding budget process deadlines. Pertinent steps in the budget process—
including agency budget preparation and OMB review, the President’s budget submission, Mid-
Session Review, and budget execution—may be of particular relevance for federal IT projects.
Agency Budget Preparation and OMB Review
Agencies are statutorily required to submit their budget requests to the President, who by law is
authorized to determine the form and content of the requests as wel as the deadline for
submission to OMB.6 In practice, the President delegates responsibility for this budget
coordination to OMB. To facilitate agencies’ preparations of their budget requests, OMB provides
guidance in the form of circulars, memoranda, and other documents.7 Among these are two
annual y issued documents in particular: the OMB Circular No. A-11, which provides agencies
with detailed instructions and schedules for the submission of budget requests and justifications
to OMB, and the IT Budget—Capital Planning Guidance, which provides guidance around IT
budget submissions and budgetary reporting.8 (See this report’s Appendix for a compilation of
the annual iterations of the OMB IT Budget -—Capital Planning Guidance.) The relevant statute
does not require a certain date for submission of these budget requests. OMB has administratively
set the annual submission dates for September, which occurs 13 months before the beginning of
the forthcoming fiscal year (see Figure 1). Agencies also rely on internal processes and analysis
to formulate their budget requests,9 which may vary from agency to agency.

5 For more information about OMB, see CRS Report RS21665, Office of Management and Budget (OMB): An
Overview, coordinated by T aylor N. Riccard.
6 31 U.S.C. §1108(b)(1).
7 T his paragraph draws in part from CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D.
Christensen.
8 See OMB, Circular No. A-11, “Preparation, Submission and Execution of the Budget,” April 2021,
https://www.whitehouse.gov/wp-content/uploads/2018/06/a11.pdf; and OMB, FY 2022 IT Budget—Capital Planning
Guidance, November 2020, https://www.whitehouse.gov/wp-content/uploads/2020/11/
FY22IT Budget_CapitalPlanningGuidance.pdf.
9 See CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D. Christensen.
Congressional Research Service

2

Federal IT Budgeting Process in the Executive Branch: An Overview

After this agency submission in September, OMB’s program examiners review agency requests to
evaluate their rationales and ensure that they align with the President’s policy objectives. Senior
OMB officials, the OMB director, and other senior officials may then modify and finalize the
agency budget requests. Agencies are notified of these decisions during the “passback” process.
These budgetary levels may differ from the agencies’ original budget requests. After a potential
appeals process, agencies are notified of what wil be included in the President’s budget
submission to Congress early in the next calendar year.10
Figure 1. Executive Budget Process Timeline

Sources: CRS analysis of OMB guidance documents, President’s budget submissions, and U.S. Code.
Note: Relevant statutory requirements are included in italics.
President’s Budget Submission
The President is required annual y to submit a consolidated budget to Congress that must include,
in part, estimated receipts, expenditures, and proposed appropriations for the next five fiscal years
and actual receipts, expenditures, and appropriations for the previous fiscal year.11 Account-level
information about actual and proposed budgets is included in the budget Appendix volume. The
Appendix contains, for each account, prior-year (actual) appropriations and obligations, current-
year (estimated) appropriations and obligations, and proposed appropriations, among other
information.12
To support this submission, agencies submit more detailed, written justifications of their budget
requests to the House and Senate Appropriations Committees and their subcommittees of
jurisdiction.13 The justifications may vary in form and content among agencies and
subcommittees, reflecting the informal relationship between agencies and committees as wel as
congressional direction to receive information in a form that committees may prescribe.14 In
Circular No. A-11, OMB instructs agencies to support the President’s budget proposals in their
interactions with Congress.15 Additional y, OMB reviews and approves the content of budget

10 T his paragraph draws in part from CRS Report R42633, The Executive Budget Process: An Overview, by Michelle
D. Christensen.
11 31 U.S.C. §1105(a).
12 For further information, see CRS In Focus IF11610, Federal Financial and Budgetary Reporting: A Primer, by
Dominick A. Fiorentino.
13 See CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D. Christensen.
14 For related statutory language, see 31 U.S.C. §1104(b).
15 OMB, Circular No. A-11, p. 116.
Congressional Research Service

3

Federal IT Budgeting Process in the Executive Branch: An Overview

justifications prior to transmittal to Congress.16 While this is the typical process, some agencies
have what is considered “bypass authority,” whereby Congress has permitted these agencies to
submit budget information directly to Congress, bypassing the President and OMB.17
Mid-Session Review
The President is also required to submit annual y to Congress a supplemental summary of the
budget before July 16, commonly known as the Mid-Session Review.18 This review includes
changes in expenditures and receipts and may reflect changes in economic conditions, actions
taken by Congress, or other factors requiring adjustments to the initial budget submission.19
Budget Execution
The Constitution provides that federal spending may occur only via appropriations passed by
Congress and enacted into law.20 Accordingly, agencies may begin to execute the budget only
after Congress appropriates funds via legislation.21 The budget execution process is complex
across varied appropriations measures and agencies, but some common elements may be grouped
into four categories.
1. Apportionment of funds by OMB. Appropriations grant agencies budget
authority to enter into obligations, but this budget authority may not be
immediately available to agencies.22 A group of statutes referred to as the
Antideficiency Act requires that appropriated funds be divided, or apportioned, in
legal y binding increments “to prevent obligation or expenditure at a rate that
would indicate a necessity for a deficiency or supplemental appropriation” or “to
achieve the most effective and economical use.”23 OMB apportions funds
appropriated to executive branch agencies.24 Funds may be apportioned by fiscal
year quarter or another increment of time; by program, project, or activity; or by
a combination of time period and program, project, or activity.25

16 For related statutory language, see 31 U.S.C. §1108(b)(1).
17 See CRS Insight IN10715, When an Agency’s Budget Request Does Not Match the President’s Request: The FY2018
CFTC Request and “Budget Bypass”, by Jim Monke, Rena S. Miller, and Clinton T . Brass (available to congressional
clients upon request ).
18 31 U.S.C. §1106(a).
19 See CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D. Christensen.
20 U.S. Const., art. I, §9, cl. 7 (known as the appropriations clause), https://constitution.congress.gov/browse/article-1/.
21 In the event that an agency’s regular appropriations act has not become law prior to the start of the fiscal year, a
temporary continuing appropriations act (i.e., a continuing resolution or CR) may be enacted. T his allows the agency to
continue operating for the period of time covered by the CR. See CRS Report R46595, Continuing Resolutions:
Overview of Com ponents and Practices, coordinated by Kevin P. McNellis.
22 See CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D. Christensen.
23 T he collection of statutes commonly referred to as the Antideficiency Act have been codified in multiple sections of
T itle 31 (31 U.S.C. §§1341-1342, 1349-1350, 1511-1519).
24 T he President is statutorily responsible for apportioning funds for executive branch agencies (31 U.S.C.
§1513(b)(1)). T his responsibility has been delegated to OMB.
25 T hese “programs, projects and activities” for purposes of app ortionment may differ from programs, projects, and
activities (oftentimes abbreviated as PPAs) that the House and Senate Appropriations Committees identify in their
reports that accompany appropriations bills in the legislative process. Generally speaking, funds apportioned by fiscal
quarter are referred to as category A, funds apportioned by PPA are referred to as category B, and funds apportioned by
a combination of fiscal quarter and PPA are referred to as category AB. See OMB, Circular No. A-11, p. 428.
Congressional Research Service

4

Federal IT Budgeting Process in the Executive Branch: An Overview

2. Entering into obligations. Agencies enter into obligations when they incur legal
liability for the payment of goods and services.26 In the context of IT budgeting,
examples of obligations include awarding contracts for the provision of IT goods
or services and hiring IT personnel.
3. Reporting of obligations. Congress has also passed statutory provisions
resulting in reporting on budget execution at the account level. In 2014, Congress
mandated account-level reporting on appropriated amounts and obligations.27
This account-level view of budget execution is made publicly available at the
Spending Explorer portal on USAspending.gov.28 Separately, OMB has long
maintained the SF-133 Report on Budget Execution and Budgetary Resources to
fulfil a statutory requirement that the President review the pace of obligations at
least four times annual y.29 SF-133s have historical y provided quarterly
snapshots of appropriations and obligations at the account level.30 Additional y,
agencies report certain spending data related to IT investments on the IT
Dashboard website.31 The IT Dashboard wil be discussed in further detail in
subsequent sections of this report.
4. Outlay of funds. Outlays occur when an agency disburses funds to liquidate an
obligation. In a given fiscal year, outlays may pay for obligations incurred within
the same fiscal year or during a prior fiscal year.32
IT Funding Mechanisms
Congress provides several mechanisms that agencies can use to fund IT investments. The
mechanisms operate differently from each other in some respects, which may have implications
for Congress’s lawmaking and oversight relating to IT investments.
 Funds appropriated for an account, with spending on IT. Congress
appropriates funds at the budget account level. Depending on the structure of a
given agency’s accounts, an agency may then use these funds to pay for IT goods
and services. The budget account may be directly related to IT, or IT may support
the purpose of budget account (e.g., IT spending may be intended to be included
as an overhead expense in support of a program or policy).
 Non-recurring expenses funds (NEFs). Congress has granted to certain
agencies, via statute, the ability to transfer unobligated balances of expired

26 Government Accountability Office (GAO), Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP,
September 2005, p. 74, at https://www.gao.gov/assets/gao-05-734sp.pdf#page=74.
27 Federal Funding Accountability and T ransparency Act of 2006 , as amended by the Digital Accountability and
T ransparency Act of 2014. See 31 U.S.C. §6101 note.
28 T he USA Spending “Spending Explorer” portal can be found at https://www.usaspending.gov/#/federal_account.
29 31 U.S.C. §1512(d). See https://portal.max.gov/portal/document/SF133/Budget/FACT S%20II%20-
%20SF%20133%20Report%20on%20Budget%20Execution%20and%20Budgetary%20Resources.html .
30 For further information, see CRS In Focus IF11610, Federal Financial and Budgetary Reporting: A Primer, by
Dominick A. Fiorentino.
31 T he IT Dashboard website is located at https://itdashboard.gov/. OMB created the IT Dashboard website in 2009 to
increase transparency of agency IT investments.
32 GAO, Glossary of Terms, p. 77.
Congressional Research Service

5

Federal IT Budgeting Process in the Executive Branch: An Overview

discretionary funds to an NEF. NEFs may then be used for certain purposes
including IT systems investments and modernization.33
 Working Capital Funds (WCFs). According to the Government Accountability
Office (GAO), WCFs are a “type of intragovernmental revolving fund that
operates as a self-supporting entity that conducts a regular cycle of businesslike
activities. These funds function entirely from the fees charged for the services
they provide consistent with their statutory authority.”34 Inter- and intra-agency
functions that require the use of IT—such as human resources, payroll, or other
shared services—are often funded via a WCF model.35
 Technology Modernization Fund (TMF). The TMF is overseen by the
Technology Modernization Board, consisting of seven voting members.36
Agencies submit IT-related project proposals for the TMF Board to review and
consider for funding. The board has said it intends to use TMF funding in the
American Rescue Plan Act to prioritize projects that pertain to modernizing high
priority systems, cybersecurity, public-facing digital services, and cross-
government collaboration services.37 Agencies awarded funding by the TMF
make repayments according to the project written agreement. Agencies may
submit proposals that project full, partial (75%, 50%, or 25%), or minimal
repayment.38
 United States Digital Service (USDS). The USDS is a technology unit housed
within the Executive Office of the President that employs designers, engineers,
and product managers for tours of service lasting up to four years. These experts
supplement the capacity of government agencies to make websites more
consumer friendly, to identify and fix problems, and to help upgrade the
government’s technology infrastructure, among other services.39 USDS has been

33 For example, there are currently NEFs for the Department of Agriculture (USDA, see 7 U.S.C. §2250b); the
Department of Commerce (15 U.S.C. §1521a); the Department of Education (20 U.S.C. §3483a); and the Department
of Health and Human Services (42 U.S.C. §3514a). Of these, the latter three are permitted to use NEF funds for IT
investments and modernization. USDA NEF fun ds may be used only on facility capital investments. In these
illustrative examples, NEF funds may, by statute only, be obligated after OMB approval and after notifying the relevant
House and Senate appropriations committees.
34 GAO, Glossary of Terms, p. 105.
35 One example of a WCF exists at the USDA. According to a description by OMB, “T his fund finances, by advances
or reimbursements, certain central services in the Department of Agriculture, including supply, mail, and reproduction
services; financial, procurement, and other administrative systems; telecommunications and network services;
mainframe computer processing and hosting services; correspondence management services; payroll, financial
management, and human resources services; and video production, conferencing, design, and Web support services.”
See OMB, Budget of the United States Governm ent, Appendix, May 2021, https://www.whitehouse.gov/wp-content/
uploads/2021/05/appendix_fy22.pdf#page=71.
36 U.S. Chief Information Officers (CIO) Council, “T echnology Modernization Fund Board,” https://tmf.cio.gov/board/
.
T he T MF was established by statutory provisions that are frequently referred to as the Modernizing Government
T echnology Act. See the National Defense Authorization Act for Fiscal Year 2018, T itle X, Subtitle G, “ Modernizing
Government T echnology” (P.L. 115-91; 131 Stat. 1283, at 1589; 40 U.S.C. 11301 note; see https://www.congress.gov/
115/plaws/publ91/PLAW-115publ91.pdf#page=307). T his subtitle of the act was named after an earlier, stand-alone
version of the legislation (H.R. 2227, 115th Cong.).
37 CIO Council, “American Rescue Plan,” https://tmf.cio.gov/arp/.
38 CIO Council, “ Funding Guidelines for Agencies Receiving Disbursements from the T echnology Modernization
Fund,” https://tmf.cio.gov/documents/funding-guidelines/.
39 USDS, “Our Mission,” https://www.usds.gov/mission.
Congressional Research Service

6

Federal IT Budgeting Process in the Executive Branch: An Overview

funded through annual appropriations in the Financial Services and General
Government Appropriations Act.
 18F. Located within the General Services Administration (GSA), 18F
“collaborates with other agencies to fix technical problems, build products, and
improve how government serves the public through technology.”40 Congress does
not annual y appropriate funds to 18F. Instead, it charges partner agencies for
services rendered. Charges are recovered under Acquisition Services Fund
reimbursement authority and Economy Act reimbursement authority.41
Related IT Budgeting Statutes
Several key pieces of legislation have shaped the IT budgeting process. Practitioners often refer
to these statutes by their original short titles, even though many of the statutory provisions are
now located in different parts of the U.S. Code. In 2002, Congress codified many elements of the
legislation described below into positive law.42
Clinger-Cohen Act of 1996
The Clinger-Cohen Act emerged as a result of growing concern about the federal government’s
ability to develop and maintain IT infrastructure and personnel.43 In 1994, a subcommittee of the
Senate Committee on Governmental Affairs44 produced an investigative report that detailed what
it described as systemic problems in federal IT procurement as wel as ineffective oversight of IT
programs.45 The Clinger-Cohen Act extensively modified federal IT acquisition policy and
procurement management.46 Some of the provisions pertinent to IT budgeting included:
 repealing the GSA’s centralized role in federal IT procurement and, instead,
delegating these responsibilities to agencies;

40 18F, “About,” https://18f.gsa.gov/about/.
41 18F, “About.”
42 In 2002, P.L. 107-217 codified T itle 40 of the U.S. Code (“Public Buildings, Property, and Works”), which included
Subtitle III (“Information T echnology Management”), into positive law. Positive law codification refers to the process
of preparing and enacting a bill to restate existing law—for example, provisions in stand-alone laws that have not been
enacted yet into the U.S. Code—as a “ positive law” title of the U.S. Code. For discussion, see U.S. Congress, House of
Representatives, Office of the Law Revision Counsel, “Positive Law Codification,” http://uscode.house.gov/
codification/legislation.shtml.
43 T he law, as subsequently retitled by P.L. 104-208 (110 Stat. 3009-393), comprised Divisions D (110 Stat. 642) and E
(110 Stat. 679) of P.L. 104-106 (110 Stat. 186), at https://www.gpo.gov/fdsys/pkg/PLAW-104publ106/pdf/PLAW-
104publ106.pdf. For discussion of the original IT -related provisions as of 2004, see “ Clinger-Cohen Act of 1996,” by
Jeffrey W. Seifert, in CRS Report RL30795, General Managem ent Laws: A Com pendium , by Clinton T . Brass et al.
(available to congressional clients upon request ).
44 T he Senate Committee on Governmental Affairs is the predecessor to the current Senate Committee on Homeland
Security and Governmental Affairs.
45 As the ranking minority member of the Subcommittee on Oversight of Government Management of the Committee
on Governmental Affairs, Senator William Cohen directed a staff study of major government IT integration and
modernization efforts in progress. See U.S. Senator William S. Cohen, Com puter Chaos: Billions Wasted Buying
Federal Com puter System s, Investigative Report, report from minority staff of the Senate Subcommittee on Oversight
of Government Management (Washington: October 12, 1994).
46 Statutory provisions that are associated with the Clinger-Cohen Act of 1996 have been amended and codified into
T itle 40, Subtitle III, of the U.S. Code (40 U.S.C. §§11101-11703) and relate to multiple aspects of IT management and
acquisition.
Congressional Research Service

7

Federal IT Budgeting Process in the Executive Branch: An Overview

 establishing the role of chief information officers (CIOs) within agencies to
develop and maintain IT systems as wel as evaluate, assess, and report on IT
improvements; and
 establishing a new federal IT capital planning and investment control process,
with prominent roles for OMB and agencies.47
E-Government Act of 2002
Building on the provisions enacted under the Clinger-Cohen Act, the E-Government Act of 2002
sought to improve federal IT investment and management.48 The E-Government Act enacted into
law several provisions related to IT management.49 Perhaps the provision most relevant to federal
IT budgeting was the creation of the Office of Electronic Government (E-Gov) within OMB.50 In
practice, OMB often refers to the organization as the Office of E-Government and Information
Technology.51 E-Gov is responsible for providing overal leadership for the executive branch on
electronic government and setting IT standards and guidelines for executive branch agencies.52 To
implement these statutory requirements, E-Gov helps develop OMB memoranda, circulars, and
strategy documents guiding executive branch agencies on IT standards, IT workforce planning,
and IT capital planning, among other policy areas.53
Federal Information Technology Acquisition Reform Act (2014)
Multiple provisions that have been informal y referred to as the Federal Information Technology
Acquisition Reform Act (FITARA) built upon the Clinger-Cohen Act to establish a framework for
tracking, assessing, and managing federal IT investments.54 FITARA addresses several matters
that affect how federal agencies purchase and manage their IT assets.55 Provisions related to IT
budgeting include:

47 See CRS Report RL30661, Government Information Technology Management: Past and Future Issues (The Clinger-
Cohen Act), by Jeffrey W. Seifert (available to congressional clients upon request ).
48 See “E-Government Act of 2002,” by Harold C. Relyea and Jeffrey W. Seifert, in CRS Report RL30795, General
Managem ent Laws: A Com pendium , by Clinton T . Brass et al. (available to congressional clients upon request ).
49 Some of the provisions associated with the E-Government Act are free-standing statutory provisions (e.g., §§213 and
216 of the act; 44 U.S.C. §3501 note) and others are incorporated into Title 44, Chapter 36 , of the U.S. Code (44 U.S.C.
§§3601-3606). In general, the provisions relate to IT service delivery, establishment in law of a council of agency
CIOs, and establishment of the Office of Electronic Government within OMB.
50 P.L. 107-347, December 17, 2002; 116 Stat. 2899, at 2902. Relevant provisions are codified at T itle 44, Section
3602, of the U.S. Code at https://www.congress.gov/107/plaws/publ347/PLAW-107publ347.pdf. Prior to this law’s
enactment, the Office of Information and Regulatory Affairs had a branch that focused on bo th information policy and
IT issues. After the E-Government Act became law, the name of this branch dropped inform ation technology from its
name and became the OMB’s Information Policy Branch.
51 OMB, “Office of Management and Budget Office of E-Government & Information T echnology,”
https://www.whitehouse.gov/omb/management/egov/.
52 44 U.S.C. §3602.
53 OMB, “Office of Management and Budget Office of E-Government & Information T echnology,”
https://www.whitehouse.gov/omb/management/egov/#A1.
54 P.L. 113-291, Title VIII, Subtitle D, of the Carl Levin and Howard P. “Buck” McKeon National Defense
Authorization Act for Fiscal Year 2015; 128 Stat. 3438. Not all federal agencies are subject to the requirements of
FIT ARA. Generally, agencies identified in the Chief Financial Officers (CFO) Act of 1990, as well as their subordinate
components, are subject to the requirements of FIT ARA. DOD, the intelligence community, and portions of other
agencies that operate systems related to national security are subject to only certain portions of FIT ARA.
55 Provisions associated with FIT ARA amended and supplemented provisions in T itle 40, Subtitle III , of the U.S. Code
Congressional Research Service

8

Federal IT Budgeting Process in the Executive Branch: An Overview

 increasing transparency of IT investments;56
 establishing requirements for categorizing IT investments according to risk;57 and
 establishing requirements for an agency IT portfolio review process, where
individual investments are viewed in the context of the agency’s broader set of
projects.58
Enactment of FITARA followed in the wake of several administrative initiatives undertaken by
OMB during the Obama Administration.59 Among other things, OMB created the IT Dashboard
website in 2009 to increase transparency of agency IT investments.60 In 2014, FITARA made
aspects of this administrative practice into a statutory requirement.61 The resulting publicly
accessible website displays data from 26 agencies on the cost, schedule, and performance of more
than 7,000 IT investments, with detailed data for more than 700 investments classified as
“major.”62 Agency CIOs are responsible for regularly evaluating and updating the data on the IT
Dashboard.63
Statutory Requirements Related to IT Budgeting
Current law covers several aspects of IT-related budgeting and assigns responsibility for
compliance with these statutes to either OMB or covered executive branch agencies. Many of
these provisions may be found in Titles 40 and 44 of the U.S. Code. Some IT-related subject areas
that OMB and agencies include as parts of the budget formulation and submission process are
discussed below.
Chief Information Officers’ Budgetary Roles and Functions
Current law establishes the role of CIO at “Chief Financial Officer (CFO) Act agencies”—24
large agencies in the executive branch64—with the primary duty of managing information

(40 U.S.C. §§11302, 11319) that were originally associated with the Clinger -Cohen Act. FIT ARA’s provisions relate
more specifically to CIO aut horities and, in addition, planning, risk management, and oversight of IT acquisition and
investment management.
56 40 U.S.C. §11302(c)(3)(A).
57 40 U.S.C. §11302(c)(3)(C).
58 40 U.S.C. §11319.
59 For an overview of these administrative initiatives, see Vivek Kundra, U.S. Chief Information Officer, OMB, 25
Point Im plem entation Plan to Reform Federal Inform ation Technology Management , December 9, 2010,
https://www.whitehouse.gov/omb/management/egov/.
60 T he IT Dashboard website is located at https://itdashboard.gov/.
61 40 U.S.C. §11302(c)(3)(A).
62 OMB has defined a major IT investment as
an IT investment requiring special management attention because of its importance to the mission
or function of the government; significant program or policy implications; high executive visibility;
high development, operating, or maintenance costs; unusual funding mechanism; or definition as
major by the Agency’s CPIC process. OMB may work with the Agency to declare IT Investments
as major IT Investments. Agencies must consult with assigned OMB Desk Officers and Resource
Management Offices (RMOs) regarding which Investments ar e considered major.
See OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 10.
63 OMB, “IT Dashboard Frequently Asked Questions,” https://itdashboard.gov/drupal/frequently-asked-questions.
64 T he CFO Act of 1990 (31 U.S.C. §901(b), P.L. 101-576, 104 Stat. 2838) enacted into law a financial management
and reporting framework in the executive branch. T he legislation also created the role of CFO and deputy CFO at large
Congressional Research Service

9

Federal IT Budgeting Process in the Executive Branch: An Overview

resources.65 These duties include, but are not limited to, IT-related topics. Among other things,
CIOs have explicit planning, programming, budgeting, and execution authorities. Agency CIOs,
aside from DOD, must review and approve the agency IT budget requests before the agencies
submit their requests for OMB review.66 In the case of DOD, the DOD CIO must review and
provide recommendations to the Secretary of Defense on the IT budget request.67 Al CIOs are
required to certify that IT investments are implementing “incremental development,” as defined
by OMB.68
Office of Electronic Government (E-Gov)
E-Gov and its presidential y appointed administrator are responsible for providing overal IT
leadership and direction to the executive branch on “electronic government.”69 Among several
statutory duties, E-Gov is required to:
 oversee capital planning and investment control for information technology,70
 assist the OMB director in setting federal IT system standards,71 and
 annual y review the technology portfolio of executive branch agencies.72
Capital Planning and Investment Control
CFO Act agencies are required to use a capital planning and investment control (CPIC) process to
acquire, use, maintain, and dispose of IT.73 CPIC processes include al stages of the IT asset
lifecycle including planning, budgeting, procurement, management, and assessment.74
As part of the budget process, the OMB director is required to develop a process for analyzing,
tracking, and evaluating the investment risks associated with agency information systems.75 The
process must cover the entire asset lifecycle and include criteria for assessing the costs, benefits,
and risks associated with each investment. Additional y, OMB must make selected budgetary,

executive agencies who have certain statutory responsibilities related to financial management and reporting. T he
agencies subject to these requirements are commonly referred to as the “CFO Act agencies,” of which there are
currently 24.
65 40 U.S.C. §11315(c).
66 40 U.S.C. §11319(b)(1)(B)(i).
67 40 U.S.C. §11319(b)(1)(B)(i).
68 40 U.S.C. §11319(b)(1)(B)(ii). OMB defines incremental development as “development of software or services,
planned and actual delivery of new or modified technical functionality to users occurs at least every six (6) months.”
See OMB, Mem orandum M-15-14, “ Management and Oversight of Federal Information T echnology,” June 2015,
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2015/m-15-14.pdf#page=18.
69 44 U.S.C. §3602. Electronic government is defined as “the use by the Government of web-based Internet
applications and other information technologies, combined with processes that implement these technologies, to
enhance the access to and delivery of Government information and services to the public, other agencies, and other
Government entities; or bring about improvements in Government operations that may include effectiveness,
efficiency, service quality, or transformation” (44 U.S.C. §3601(3)).
70 44 U.S.C. §3602(e)(1).
71 44 U.S.C. §3602(f)(8).
72 40 U.S.C. §11319(d)(3).
73 40 U.S.C. §11302.
74 CIO Council, “Policies and Priorities: Capital Planning and Investment Control (CPIC),” https://www.cio.gov/
policies-and-priorities/cpic/.
75 40 U.S.C. §11302(c)(2).
Congressional Research Service

10

link to page 16 Federal IT Budgeting Process in the Executive Branch: An Overview

schedule, and performance data about “major” IT investments—as determined by agencies in
coordination with OMB—publicly available.76
For each “major” IT investment, OMB and agencies are required to assign a risk level based on
OMB-issued guidance.77 For any investments categorized as high-risk, the agency CIO, the
program director of IT investment within the agency, and the OMB E-Gov administrator must
perform a root cause analysis to determine the cause of the high-risk rating, whether these root
causes can be remediated, and the probability that the IT investment wil succeed.78
IT Budgeting Information Flows and Sources
As a part of the executive budget process, as wel as at specified frequencies throughout the fiscal
year, both current law and OMB direct agencies to report information about their IT investments.
When OMB produces the President’s budget, a team of analysts at the OMB Office of the Federal
Chief Information Officer may review an agency’s overal list of IT investments and their
detailed business cases. This requirement is communicated to agencies through the annual
updates to OMB Circular No. A-11, Section 55, as wel as the supplemental, annual y issued IT
Budget—Capital Planning Guidance document.79
Several statutes authorize OMB officials to set strategic direction and oversee implementation of
agency IT governance activities.80 Using these authorities, OMB issues Circular No. A-11,
Section 55, to provide general policy and requirements for agency IT budget requests,
investments, and portfolio management. The annual IT Budget—Capital Planning Guidance
includes more detailed information on the technical requirements and submissions outlined in
Circular No. A-11.
OMB Circular No. A-11 also contains a supplemental “Capital Programming Guide.” This guide
assists agencies in planning for, procuring (including decisions whether to make or buy), and
disposing of capital assets, including certain IT assets, in an efficient manner.81 Capital asset
planning culminates in an “Agency Capital Plan” that supports agency budget proposals, aspects
of which may be included in an agency’s annual submission to OMB or congressional budget
justifications.82
Agency IT budgetary reporting can be broadly divided into two subsets: (1) agency-wide
portfolios of IT investments and (2) discrete, individual IT investments. General y, the frequency
of reporting and the level of required detail differ between these two categories. See Table 1 for
an overview of the level of detail included for agency-wide IT portfolio reporting compared to
individual IT investment reporting.

76 40 U.S.C. §11302(c)(3).
77 40 U.S.C. §11302(c)(3)(C). T he term major IT investment refers to “ an investment within a covered agency
information technology investment portfolio that is designated by the covered agency as major, in accordance with
capital planning guidance issued by the Director [of OMB]” (40 U.S.C. §11302(c)(1)(B)).
78 40 U.S.C. §11302(c)(4).
79 OMB, Circular No. A-11; OMB, FY 2022 IT Budget—Capital Planning Guidance.
80 44 U.S.C. §3602.
81 OMB, Circular No. A-11, p. 951. Make/buy refers to agencies choosing to either produce a product or service in-
house or to contract it to an external provider.
82 OMB, Circular No. A-11, p. 971.
Congressional Research Service

11

Table 1. Agency IT Investment Budgetary Information Flows and Sources
Timing of submission is included in the top row in italics.
Agency Annual
President’s Budget
Agency Congressional
IT Dashboard
Internal Agency
Submission to OMB
Submission to
Budget Justification
Website
Project Management /
Congress
Tracking
(12 Months Prior to
(8 Months Prior to FY)
(Monthly and Real-
Start of Fiscal Year
(8 Months Prior to FY)
Time)
(Continuous)

(FY))
Agency-Wide IT
An agency submits
The President’s budget
Agency congressional
Total IT spending along
Agencies’ institutions,
Portfolio
agency-wide IT
Appendix contains
budget justifications
with high-level
processes, and norms
investment information in
account-level information
include detailed account-
performance metrics are
may vary considerably.
the form of an Agency IT
for an agency. IT spending level information, which
provided for each agency
Nevertheless, agency-
Portfolio Summary, which is not broken out at the
may include details about
including:
specific factors may be
has several components:
level of individual
IT funded by a particular

Total IT spending on significant in how

Agency IT
investments.
account. The account-
major investments
agencies plan and
Investment Portfolio
level information matches
implement capital

Total IT spending on
Summary
what is contained in the
investments.
President’s budget
non-major

Budget Account
Appendix. The budget
investments
Summary
justification may also

Percentage of

CIO Evaluation
include the proposed
projects on schedule
Report
appropriations language.

Percentage of

Submission
projects within
Confirmation.
budget.
Discrete IT
An agency submits an
The President’s budget
Includes detailed
Performance metrics are
Agencies’ institutions,
Investments
Agency IT Portfolio
Appendix contains
information about
included for individual
processes, and norms
Detail, which has several
account-level information
individual IT investments,
investments in a color-
may vary considerably.
components:
for an agency. IT spending with varying levels of
coded dashboard, listed
Nevertheless, agency-

is not broken out at the
aggregation. The form
by Unique Investment
specific factors may be

System Inventory
List
level of individual
wil vary by agency, but
Identification. Investment
significant in how
investments.
this section includes, at
details include:
agencies plan and

Contracts Report
minimum, the fol owing:

implement capital

Schedule status

Major IT Business

investments.

Prior year budget
Case

Cost variances
actuals



Standard IT

CIO risk ratings.

Current year budget
Investment Reports
enacted

Submission

Budget request for
Confirmation.
future year.
Sources: CRS analysis of OMB guidance documents, President’s budget submissions, and the IT Dashboard website located at https://itdashboard.gov/.
CRS-12

Federal IT Budgeting Process in the Executive Branch: An Overview

Agency-Wide IT Investment Portfolio Budgeting and Reporting
Budgetary reporting that encompasses an agency’s entire IT investment portfolio includes several
components that align with different stages of the executive budget process cycle. The sections
below describe four general reporting mechanisms and the information they include.83
Agency IT Portfolio Summary
When an agency formulates its budget request, it is required to complete a draft IT Investment
Portfolio Summary and submit it to OMB via the OMB MAX.gov submission page.84 This draft,
due in September to coincide with OMB review of agency budget submissions, constitutes the
agency’s IT budget proposal to OMB. OMB then consolidates the individual agencies’ IT
Portfolio Summary submissions into the Federal IT Portfolio, which is published as part of the
President’s budget submission.85
OMB instructs agencies to make subsequent updates to the portfolio summary on the IT
Dashboard in January and June to align with the President’s budget submission and the Mid-
Session Review, respectively.86 The IT Portfolio Summary includes al IT investments. For each
investment, the agency must identify the associated funding source and budgetary resources.87
The agency’s initial submission of information for the portfolio summary includes the sec tions
listed below:88
 Budget Accounts Summary. This section includes a summary of agency-wide
IT funding levels aggregated from the agency’s budget accounts, and it is derived
from the Funding Sources table located in the IT Portfolio Summary.89 This
summary al ows an agency’s CFO and CIO to jointly review and certify the
agency’s IT budget submissions.90
 CIO Evaluation Report. CIOs provide a numeric risk evaluation (1 through 5,
from highest to lowest risk) for al major IT investments and certain additional
categories of investments.91 This risk rating aligns with part of a CIO’s CPIC
statutory responsibilities.92

83 Congress may establish other requirements that apply to specific agencies or circumstances. T hese may be included
in appropriations measures or may take the form of directives in report language.
84 Most of the information on the OMB MAX.gov portal is not publicly accessible and requires an OMB MAX login
account. See OMB, “OMB MAX.gov Login Page,” https://login.max.gov/cas/login?service=
https%3A%2F%2Fcommunity.max.gov%2Flogin.action%3 Fos_destination%3D%252Fpages%252Ftinyurl.action%25
3FurlIdentifier%253DoWB2Yg.
85 OMB, Circular No. A-11, p. 171.
86 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 6.
87 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 12.
88 OMB, Circular No. A-11, p. 167.
89 OMB, Circular No. A-11, p. 167.
90 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 9.
91 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 18.
92 40 U.S.C. §11315(c)(2).
Congressional Research Service

13

Federal IT Budgeting Process in the Executive Branch: An Overview

 Submission Confirmation. This confirmation includes validation of the
completeness of the investment data submitted and closes the reporting window
in OMB’s MAX system.93
President’s Budget Appendix
Account-level information about actual and proposed budgets is included in the budget Appendix
volume, a part of the President’s budget submission. The Appendix contains, for each account,
prior year obligations, current year appropriations, and proposed appropriations, among other
information. Agency-wide IT funding levels documented in the Budget Accounts Summary, as
approved by OMB, may be reflected in disaggregated fashion at the account level in the
Appendix. For example, the VA section includes spending on development, operations and
maintenance, and “administrative and salaries,” but does not include details of discrete IT
investments.94
Agency Congressional Budget Justification
By early February, agencies submit detailed, written justifications of their budget requests to the
appropriations committees and related subcommittees of jurisdiction. The form of these budget
justifications may vary by agency. For example, VA submits its budget justification for its
“Information Technology Systems” account as part of one of several volumes that comprise the
total budget justification.95 The budget justification includes account-level information, which
may include details about IT investments funded by a particular account. The account-level
information matches what is contained in the President’s budget Appendix. The budget
justification may also include the President’s proposed appropriations language.96
IT Dashboard Website
Agencies update their budgets on the IT Dashboard website to coincide with the President’s
budget submission, congressional budget justifications, and Mid-Session Review. Agencies are
also required to update certain reporting metrics monthly and are encouraged to make additional
updates to the Dashboard as necessary.97 Total IT spending along with high-level performance
metrics are provided for each agency, including:
 total IT spending on major investments,
 total IT spending on non-major investments,
 percentage of projects on schedule, and
 percentage of projects within budget.98

93 OMB, Circular No. A-11, p. 172.
94 OMB, Budget of the United States Government Appendix, May 2021, p. 1105.
95 VA, FY2022 Budget Submission, “Medical Programs and Information T echnology Programs Volume 2 of 4,” May
2021, https://www.va.gov/budget/docs/summary/
fy2022VAbudgetVolumeIImedicalProgramsAndInformationT echnology.pdf .
96 VA, FY2022 Budget Submission, p. 639.
97 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 7.
98 OMB, IT Dashboard, “Department of Veterans Affairs Information T echnology Summary,” https://itdashboard.gov/
drupal/frequently-asked-questions.
Congressional Research Service

14

Federal IT Budgeting Process in the Executive Branch: An Overview

Discrete IT Investment Budgeting and Reporting
Agencies are also required to submit additional information pertaining to individual IT
investments. The level of required detail varies depending on the category of the investment as
wel as whether or not it is considered to be major. There are three IT investment categories:
 Part 1: Mission Delivery (IT investments that directly support an agency’s
mission),
 Part 2: Mission Support Services (activities that are common across al agencies
such as human resources and financial management), and
 Part 3: Standard IT Investments (IT goods and services common to al agencies
such as IT security and IT network infrastructure).99
Additional y, OMB directs agencies to break down IT investment costs into two buckets:100
1. Operations and Maintenance (O&M): O&M costs refer to operating and
maintaining existing IT assets.101
2. Development, Modernization, and Enhancement (DME): DME costs result in
new IT assets or the modification of existing IT assets to substantively improve
capability or performance.102
Like agency-wide IT budget portfolios, information about discrete IT investments is reported via
several different mechanisms.
Agency IT Portfolio Detail
Concurrent with the IT Portfolio Summary, agencies also submit IT Portfolio Details as a part of
their September budget submissions to OMB.103 This documentation contains data related to
individual IT investments and includes the components listed below:104
 Systems Inventory List: This report lists al information systems funded by a
particular IT investment. Systems and investments may have a many-to-many
relationship in that a single system may be funded by multiple investments or a
single investment may fund multiple systems.105 Agencies must determine how to
appropriately al ocate costs across systems.
 Contracts Report: This report contains al contracts that directly support a given
IT investment and aligns investment data with Federal Procurement Data System
data.106

99 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 7.
100 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 31.
101 GAO, Federal Agencies Need to Address Aging Legacy Systems, GAO-16-468, May 2016, p. 12,
https://www.gao.gov/assets/680/677574.pdf#page=12.
102 GAO, Federal Agencies Need to Address Aging Legacy Systems, p. 12.
103 GAO, Federal Agencies Need to Address Aging Legacy Systems, p. 6.
104 OMB, Circular No. A-11, p. 172.
105 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 20.
106 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 22. Data from legacy acquisition systems, including the
Federal Procurement Data System, is currently being migrated to beta.sam.gov. See https://beta.sam.gov/help/award-
data.
Congressional Research Service

15

Federal IT Budgeting Process in the Executive Branch: An Overview

 Major IT Business Case: OMB uses data reported in the business case to
determine if budgetary resources align with an Administration’s programmatic
priorities.107
 Standard IT Investment Reports: These reports contain detailed and relevant
IT investment budget and management information for certain standard
investments categorized as Part 3. In contrast to major investments, not al
standard investments are required to be reported.108
 Submission Confirmation: This confirmation includes validation of the
completeness of the individual investment data submitted and closes the
reporting window.109
Agency Congressional Budget Justification
Agency congressional budget justifications also include detailed information for discrete IT
investments, with varying levels of detail and degrees of aggregation by agency. Using VA as an
example, individual IT investments are grouped by initiative and mission support activity.110
Along with a brief explanation of the project goals, this section includes prior fiscal year budget
actuals, current year enacted appropriations, and the requested appropriations for the next fiscal
year.
IT Dashboard Website
After the initial budget submission, agencies make subsequent IT budget updates via the IT
Dashboard.111 Individual IT investment spending and detailed performance metrics are included
in a color-coded dashboard, listed by Unique Investment Identification. Similar to agency-wide
portfolio reporting, agencies are required to update certain reporting metrics for individual
investments on a monthly basis and are encouraged to make additional updates to the Dashboard
as necessary.112 Investment details include:
 schedule status,
 schedule variances,
 spending totals,
 personnel full-time equivalents,
 cost variances,
 CIO risk ratings,
 investment goals, and
 investment contracts.113

107 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 23.
108 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 40.
109 OMB, Circular No. A-11, p. 172.
110 VA, FY2022 Budget Submission, “Medical Programs and Information T echnology Programs Volume 2 of 4,” p.
637.
111 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 6.
112 OMB, FY 2022 IT Budget—Capital Planning Guidance, p. 7.
113 OMB, IT Dashboard, “Department of Veterans Affairs Information T echnology Summary.”
Congressional Research Service

16

Federal IT Budgeting Process in the Executive Branch: An Overview

Potential Issues for Congress
Given IT’s continuing importance to government operations, Congress may consider issues
surrounding IT budgeting and related oversight via statute. Since the 1990s, Congress has enacted
a series of laws that have served to:
 decentralize and delegate authority at the agency level to make and manage IT
investments,
 standardize various aspects of the IT budget formation and reporting process
across the executive branch,
 formalize the role of agency CIOs in the IT budgeting process,
 centralize several federal IT policy and oversight duties within OMB, and
 make agency-wide and investment-level IT data available to Congress and the
general public.
Given that IT systems may play important functions in supporting policy initiatives, Congress
may further consider how IT resources are al ocated, which IT investment data are most useful to
decisionmakers, and how agencies can most effectively leverage their IT investments to carry out
their diverse missions. Effective processes for investment management and budgeting may,
furthermore, depend on other capacities, such as the IT workforce. For these reasons, the
following IT-related issues may be of interest to Congress.
Accuracy of IT Dashboard Metrics
The IT Dashboard website was created to bring more transparency to the performance and cost of
IT investments across the federal government. Across each agency, and for each IT project within
agencies, the IT Dashboard reports various performance metrics related to schedule, cost, and
investment risk. These metrics, however, may be only as accurate as the assumptions that underlie
them. In a 2016 study, GAO found that some CIOs inconsistently assessed investment risks,
underrated risks, and failed to make monthly updates to the IT Dashboard.114 Congress might
consider how metrics are constructed, which metrics might be most useful for decisionmaking,
and how to achieve consistency in the way metrics are reported.
Budgetary Uncertainty Created by Continuing Resolutions
The budget process is highly complex, involving constitutional procedures, statutory provisions,
House and Senate rules, and many actors such as Congress, OMB, agency officials, and external
stakeholders.115 Despite the time and resources committed to budget preparation, in al but four of
the past 40 years, Congress has passed continuing resolutions (CRs) to keep the government
funded.116 In 2018, GAO testified before Congress on the effects of CRs on agency operations.

114 GAO, IT Dashboard: Agencies Need to Fully Consider Risks When Rating Their Major Investments, GAO-16-494,
June 2, 2016, https://www.gao.gov/products/gao-16-494.
115 See CRS T estimony T E10024, Terrible, No Good, Very Bad Ways of Funding Government: Exploring the Cost to
Taxpayers of Spending Uncertainty Caused by Governing Through Continuing Resolutions, Giant Om nibus Spending
Bills, and Shutdown Crises, by Clinton T . Brass.
116 CRS T estimony T E10024, Terrible, No Good, Very Bad Ways of Funding Government: Exploring the Cost to
Taxpayers of Spending Uncertainty Caused by Governing Through Continuing Resolutions, Giant Om nibus Spending
Bills, and Shutdown Crises, by Clinton T . Brass.
Congressional Research Service

17

link to page 19 link to page 19 Federal IT Budgeting Process in the Executive Branch: An Overview

GAO found that CRs cause agencies to delay contracts and hiring, distort agencies’ rates of
spending, and impose administrative burdens.117 These disruptions and uncertainties may affect
agencies’ ability to plan for and effectively implement IT investments that support agency
missions.
IT Budgeting and Iterative Development
Agencies typical y begin their budget formulation processes in the spring—approximately 18
months prior to the beginning of the fiscal year on October 1—upon receipt of the OMB “Spring
Guidance.”118 Consequently, agencies may experience a gap of at least a year and a half between
budget planning and the receipt of appropriated funds, with an even longer gap in the case of a
CR. According to GSA’s 18F, this budgetary lead time often fails to align with the shorter
timelines associated with iterative or incremental software development.119 Additional y, GAO
found that existing IT reporting metrics—including cost, schedule, and performance—were
designed around the more linear, less iterative “waterfal ” model of IT investment and have not
been modified to reflect the more frequent reporting and feedback cycles associated with agile
development. As a result, agile development resulted in some IT Dashboard metrics appearing as
negative.120 Congress might consider how IT reporting metrics might better align with an agile
approach to software and systems budgeting and development.
Categorization of IT Spending
General y, OMB has directed that IT spending be grouped into one of two categories: O&M and
DME (see discussion in this report’s section titled “Discrete IT Investment Budgeting and
Reporting”). GSA’s 18F has observed that in some cases, “agencies cannot spend appropriated
funds intended for one category on a different category.”121 When using an iterative development
approach, which results in frequent functionality changes and improvements to IT systems, the
distinction between O&M and DME may become unclear. A GAO report found several situations
where agencies were unsure how to report costs and defaulted to O&M.122 According to the same
report, OMB stated to GAO that “agencies tend to categorize investments as O&M because they
attract less oversight, require reduced documentation, and have a lower risk of losing funding.”123
The potential for miscategorization of IT costs—or growing recognition that IT investments may
not always clearly be classifiable in one category or the other—may result in inaccurate or

117 GAO, Budget Issues: Continuing Resolutions and Other Budget Uncertainties Present Management Challenges,
GAO-18-368T , February 6, 2018, https://www.gao.gov/products/GAO-18-368T .
118 See CRS Report R42633, The Executive Budget Process: An Overview, by Michelle D. Christensen.
119 18F, “De-Risking Guide,” https://derisking-guide.18f.gov/federal-field-guide/planning/#invest-in-technology-
incrementally-and-budget -for-risk-mitigation-prototyping.
Iterative development approaches typically fall under the term agile, which GAO has defined as “ an approach to
software development that encourages collaboration across an organization and allows requirements to evolve as a
program progresses. Agile software development emphasizes iterative delivery; that is, the development of software in
short, incremental stages. See GAO, Science and Tech Spotlight: Agile Software Developm ent, GAO-20-713SP,
September 2020, p. 1, https://www.gao.gov/assets/gao-20-713sp.pdf.
120 GAO, Agile Assessment Guide: Best Practices for Agile Adoption and Implementation , GAO-20-590G, September
2020, p. 25, https://www.gao.gov/assets/gao-20-590g.pdf#page=25.
121 18F, “De-Risking Guide.” It is not clear to CRS if the 18F document is referring to instances of restrictive
appropriations language or restrictive apportionment by OMB.
122 GAO, Federal Agencies Need to Address Aging Legacy Systems, p. 26.
123 GAO, Federal Agencies Need to Address Aging Legacy Systems, p. 26.
Congressional Research Service

18

Federal IT Budgeting Process in the Executive Branch: An Overview

inconsistent reporting of IT project status and performance. Congress may consider how IT
budgeting practices align with the nature of incremental IT development and more frequent
updates.
Centralization vs. Decentralization of IT Management and
Budgetary Roles
Congress has passed a series of statutes that have served at times to both centralize and
decentralize certain IT functions, including functions related to IT budgeting and related
oversight. The Automatic Data Processing Act of 1965 (commonly known as the Brooks Act)
centralized IT purchasing authority within the GSA and tasked OMB with oversight of agency IT
spending, among other provisions.124 The Clinger-Cohen Act of 1996, by contrast, eliminated
GSA’s centralized role in IT purchasing and assigned these responsibilities to agencies.
Additionally, Clinger-Cohen established agency CIOs. Subsequently, the E-Government Act of
2002 established the position of administrator of the Office of E-Government.125 The
centralization and decentralization of IT functions appear to reflect, in part, shifts in technology
as highly centralized mainframe-based systems transitioned to decentralized personal computer
and server-based systems. Congress may consider how to balance the goals of efficiency,
standardization, and flexibility when centralizing or decentralizing certain federal IT functions
and budgeting responsibilities. Additionally, subscription-based software pricing models and
cloud deployment may result in further updates to federal IT management statutes, OMB
guidance, and agency practices, with corresponding implications for IT-related budgeting and
spending.
Recruitment and Retention of IT Personnel
The requirements of the IT investment and budgeting process rely on the expertise and
professional judgment of IT personnel in the executive branch, particularly the CIO. In 2020, the
CIO Council reported that federal agencies have difficulties recruiting and retaining IT talent due
to uncompetitive pay, outdated hiring criteria, restrictions on telework, and average time-to-hire
of 106 days (compared to 23 days in the private sector).126 To the extent that the reported
phenomena hold across agencies’ diverse circumstances, these and other factors may limit
agencies’ ability to retain the IT expertise needed to effectively execute the complexities of the IT
budgeting and investment management processes.

124 79 Stat. 1127, https://www.govinfo.gov/content/pkg/ST AT UTE-79/pdf/ST AT UTE-79-Pg1127.pdf; CRS Report
RL30661, Governm ent Inform ation Technology Management: Past and Future Issues (The Clinger-Cohen Act), by
Jeffrey W. Seifert (available to congressional clients upon request).
125 P.L. 107-347, December 17, 2002; 116 Stat. 2899, at 2902. Relevant provisions are codified at T itle 44, Section
3602, of the U.S. Code at https://www.congress.gov/107/plaws/publ347/PLAW-107publ347.pdf.
126 T he CIO Council was established by the E-Government Act of 2002. This council has several statutory
responsibilities, including dissemination of IT best practices among executive agencies. See 44 U.S.C. §3603; CIO
Council, “Future of the IT Federal Workforce Update,” May 2020, https://www.cio.gov/assets/resources/
Future_of_Federal_IT _Workforce_Update_Public_Version.pdf .
Congressional Research Service

19

Federal IT Budgeting Process in the Executive Branch: An Overview

Appendix. OMB IT Budget—Capital Planning
Guidance Compilation (FY2013-FY2022)

Fiscal Year
Document Name(s)
Published Date
Hyperlink(s)
FY2022
FY 22 IT Budget—Capital
November 16, 2020
https://www.whitehouse.g
Planning Guidance
ov/wp-content/uploads/
2020/11/
FY22ITBudget_CapitalPla
nningGuidance.pdf
FY2021
FY 21 IT Budget—Capital
June 28, 2019
https://www.whitehouse.g
Planning Guidance
ov/wp-content/uploads/
2019/07/FY-2021-IT-
Budget-Guidance.pdf
FY2020
FY 20 IT Budget—Capital
June 29, 2018
https://www.whitehouse.g
Planning Guidance
ov/wp-content/uploads/
2018/06/fy-2020-it-
budget-guidance.pdf
FY2019
FY 19 IT Budget—Capital
August 1, 2017
https://www.whitehouse.g
Planning Guidance
ov/sites/whitehouse.gov/
files/omb/assets/
egov_docs/
fy19_it_budget_guidance.
pdf
FY2018
FY 18 IT Budget—Capital
June 30, 2016
https://www.whitehouse.g
Planning Guidance
ov/sites/whitehouse.gov/
files/omb/assets/
egov_docs/
fy18_it_budget_guidance.
pdf
FY2017
FY 17 IT Budget—Capital
June 22, 2015
https://www.whitehouse.g
Planning Guidance
ov/sites/whitehouse.gov/
files/omb/assets/
egov_docs/
fy17_it_budget_guidance_
6_22_2015.pdf
FY2016
FY 16 IT Budget—Capital
June 27, 2014
https://obamawhitehouse.
Planning Guidance
archives.gov/sites/default/
files/omb/assets/
egov_docs/
fy_2016_guidance_06272
014.pdf
FY2015
FY15 Guidance on
July 1, 2013
https://obamawhitehouse.
Exhibits 53 and 300
archives.gov/sites/default/
files/omb/assets/
egov_docs/
fy2015_e53_and_300_gui
dance_final_july2013.pdf
Congressional Research Service

20

Federal IT Budgeting Process in the Executive Branch: An Overview

FY2014
FY14 Guidance on
August 3, 2012
https://obamawhitehouse.
Exhibits 53 and 300
archives.gov/sites/default/
files/omb/assets/
egov_docs/
fy14_guidance_on_exhibit
s_53_and_300.pdf
FY2013
FY13 Guidance for Exhibit The published date was
https://obamawhitehouse.
300 A-B
not provided aside from
archives.gov/sites/default/
FY13 Guidance for Exhibit the year (2011).
files/omb/assets/
53 A-B
egov_docs/
fy13_guidance_for_exhibi
t_300_a-b_20110715.pdf
https://obamawhitehouse.
archives.gov/sites/default/
files/omb/assets/
egov_docs/
fy13_guidance_for_exhibi
t_53-a-b_20110805.pdf
Sources: OMB website of the Biden Administration as wel as archived versions of the Trump Administration
and Obama Administration OMB websites.
Notes: Prior to FY2013, budget justification and reporting requirements for an agency’s IT Investment Portfolio
and for major IT investments were located in Sections 300 and 53, respectively, of OMB Circular No. A-11. In
FY2013 additional guidance was provided in two separate documents. In FY2016, the consolidated IT budget
justification and reporting guidance was renamed IT Budget—Capital Planning Guidance.

Author Information

Dominick A. Fiorentino

Analyst in Government Organization and
Management

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R46877 · VERSION 1 · NEW
21