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Right now, those three years are FY2012 (the budget for which spending is currently happening); FY2013 (the year beginning this October 1, now under consideration by Congress regarding the president’s budget request); and FY2014 (the budget year agencies begin to plan for in the spring, submit to OMB in September, and carry out the request that ultimately emerges from the president in February). Then the three-year cycle begins anew. Agency budget planning generally occurs through identifying a spending ceiling level for a large number of program accounts that have multiple parts (sub-accounts).
Over the past two decades, this picture has become even more complicated by the fact that Congress rarely enacts a budget by October 1. So agencies face a division of the second year in the three-year cycle into two parts: the first part, characterized by a continuing resolution that keeps spending levels at the same ceilings as the previous year; and the second part, in which the rest of that year’s money is spent under the Congressionally enacted levels.
This means that over the spring and summer of 2012, agencies plan for spending that will occur a minimum of 14 months later (FY 2014, beginning October 1, 2013). If that spending occurs toward the end of FY 2014—often the case as agencies spend more money as the year-end deadline approaches—the time lag from initial planning to spending can be up to 30 months.
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