General budget preparation procedures for prioritized program budgets, amended fiscal year 2014 and fiscal year 2015 [July 11, 2013]

GENERAL BUDGET PREPARATION PROCEDURES
FOR
P P B RIORITIZED ROGRAM UDGET
AMENDED FISCAL YEAR 2014 AND FISCAL YEAR 2015

July 11, 2013

Nathan Deal Governor, State of Georgia
Teresa A. MacCartney, Director Office of Planning and Budget
270 Washington Street, SW, 8th Floor Atlanta, Georgia, 30334 404-656-3820
www.opb.state.ga.us

Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................................................................. 3 APPROACH TO BUDGETING ..............................................................................................................................................3 BUDGET LAWS...............................................................................................................................................................3
II. GUIDELINES FOR BUDGET DEVELOPMENT ..................................................................................................... 4 AMENDED FY 2014 (AFY) AND FY 2015 BUDGETS.............................................................................................................4 Base Budget ..........................................................................................................................................................4 One-Time Deletes..................................................................................................................................................4 Redistributions ......................................................................................................................................................4 Workload ..............................................................................................................................................................5 PERFORMANCE MANAGEMENT.........................................................................................................................................5 STRATEGIC PRIORITIES.....................................................................................................................................................6 CAPITAL OUTLAY REQUESTS .............................................................................................................................................6 FY 2015 Bond Planning Amounts ..........................................................................................................................6 Facility "MRR" Type Projects.................................................................................................................................7 Major Capital Facility Projects ..............................................................................................................................7 Agency Priority Considerations .............................................................................................................................8 Requirements for Submission................................................................................................................................8 CHECKLIST OF CONTACTS .................................................................................................................................................9
III. REQUIREMENTS FOR INFORMATION TECHNOLOGY (IT) BUDGETS .............................................................. 10 REQUIREMENTS FOR IT INITIATIVES..................................................................................................................................10 AGENCY IT COORDINATOR .............................................................................................................................................10 IT HARDWARE, SOFTWARE, SYSTEM DEVELOPMENT, ENHANCEMENT OR MODIFICATIONS LESS THAN $100,000...........................10 GTA REVIEW EXEMPTIONS ............................................................................................................................................11
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
I. Introduction
Approach to Budgeting
The past several years have presented significant fiscal challenges for the State, but Georgia has weathered the economic downturn and is beginning to see a slow and steady recovery. Maintaining core services for Georgia's citizens throughout the downturn has required strong, conservative fiscal management, prioritizing the highest needs of the state and finding ways to meet those needs as efficiently as possible. After 6 straight years of budget reductions, we are able to maintain the current level of funding in most areas and still provide for specific growth in education and health care. As the economy continues to recover, we will maintain our focus on streamlining state government by investing strategically in outcomes that will strengthen and grow our economy and make the state more attractive to business, safer, healthier, and better educated.
Governor Deal is intent on making state government more strategically focused and accountable for performance. Program budgeting must incorporate strategic planning and performance measurement as part of the annual budget development cycle. Revenue growth for FY 2015 will likely be modest compared to growth in key state services such as education and healthcare. As such, Governor Deal will employ a fiscally conservative approach to the Amended FY 2014 and FY 2015 budget, focusing on the State's most critical needs.
Budget Laws
Title 45-12-78 of the Official Code of Georgia Annotated provides that no later than September 1 of each year the head of each budget unit, with the exception of the General Assembly and the Judiciary, shall submit to the Office of Planning and Budget (OPB) estimates of the financial requirements of the budget unit for the next fiscal year, on the forms and in the manner prescribed by OPB, with such explanatory data as is required by OPB. The submission shall utilize programs and budget classes and be within expenditure parameters as established by the Governor. The head of a budget unit also may submit additional supporting data as necessary. The estimates submitted must bear the approval of the board or commission of each budget unit for which a board or commission is constituted.
The budget estimate for the Legislative and Judicial Branches shall be prepared and shall be submitted to the director of the budget at the same time as the other budget estimates and in the format and manner designated by OPB. All data relative to the Legislative and Judicial Branches of the government shall be for the information and guidance of the Office of Planning and Budget in estimating the total financial needs of the state for the ensuing period, but none of these estimates shall be subject to revision or review by OPB and must be included in the budget report as prepared by them.
This document contains instructions designed to assist managers in meeting submission requirements of the Budget Laws and the Prioritized Program Budgeting process. Agency budget submissions are due to OPB using BudgetTool and COBS by September 3, 2013.
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
II. Guidelines for Budget Development
Amended FY 2014 (AFY) and FY 2015 Budgets
For the past six years, agencies were required to submit budget reductions in order to meet projected revenues. Given the current projected revenue growth, budget submissions will require that each agency submit the same level of funding that is appropriated for FY 2014 (HB 106) for both AFY 2014 and FY 2015.
Budget requests for additional funds will be allowed only for growth, workload and enrollment driven programs. Agency fiscal officers should notify their OPB analysts as to the base budget that will be used for the AFY 2014 budget and the FY 2015 budget. Identify either the AOB or an approved cut-off amendment for the base budget. The base budget must be the same when requesting funds for either fiscal year.
The budget submission process in BudgetTool consists of the following components: 1. Base Budget (pre-approved by OPB) 2. One-Time Deletes 3. Redistributions (optional) 4. Workload
Base Budget
The Base Budget should be either the AOB or an approved cut-off amendment which will include Statutory, Fiscal Affairs, or Executive Order amendments to date in BudgetNet. The same base is used for AFY 2014 and FY 2015 budget requests.
One-Time Deletes
One-Time-Deletes are non-recurring items of expenditure that are considered one time purchases in FY 2014 and are deleted from the base. These will be provided by OPB. These items reduce the budget request submitted to OPB.
Redistributions
Agencies can identify funds that may be shifted among programs to meet additional needs. Types of changes would include a shift of funds between programs or a realignment of fund sources between programs in order to properly meet projected expenditures.
Agencies are expected to manage their expenditures needs through the flexibility provided in program budgeting. The total of all redistributions and increased funding needs must net to zero. Positions and motor vehicles redistributed from one program to another should be reflected in the position and motor vehicle counts for the programs affected.
Redistribution among object classes and among sub-programs within a program should be requested as an amendment to the current budget and should NOT be included as part of the agency's budget request. However, requests for redistribution of funds between programs must be submitted in BudgetTool as part of the budget request.
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
Workload
Budget requests requiring new state funding out of revenue growth include: Department of Behavioral Health Department of Community Health Department of Human Resources Department of Education Board of Regents, University System of Georgia Technical College Systems of Georgia
Funding to be included as Workload increases will be communicated to agencies by OPB prior to budget submission. Budget requests that do not adhere to the budget instructions will be rejected in BudgetTool.
A Technical Manual with detailed instructions regarding data entry and submission requirements for BudgetTool will be available through the OPB website at opb.georgia.gov on Monday, July 22.
Performance Management
OPB will continue monitoring ongoing program performance for all budgetary programs and require agencies to provide updates to their program performance measures. Performance information provides crucial information for state decision-makers and establishes the context for the state's annual budget. Program measures are particularly important during periods of fiscal constraint when agencies anticipate the impact of program funding limitations.
Measuring results affords the opportunity to identify programs that work and programs that need to be improved or even discontinued. Through performance comparisons and performance data, strategies can be identified to make programs more effective. Quality performance measures should provide decision-makers with data on how the program is operated, how well its customers are being served, and whether the program is achieving its intended outcomes. Agencies should use performance data in developing their budget reduction strategies to target low-performing programs or redirect funding to programs with a higher return on state investment.
OPB staff will continue to work with each agency in developing and updating program performance measures for the Governor's Budget Report and the Agency Measures Report. Agencies will report the measures and four years of actual results for each budget program delivering services via BudgetTool for inclusion in the Governor's Budget Report. Data provided by agencies must be valid and accurate for each performance measure tracked. Agencies must provide supplemental information to OPB on any limitations associated with the data provided for each performance measure. OPB staff will provide agencies with additional information on performance measure submission and the validation process for measures.
Ideally, all programs will have at least three measures, including one for each of the following types and actual results for FY 2010 through FY 2013:
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
Input/Output/Workload: These basic count type measures can be used to develop efficiency measures and to analyze the impact of different scenarios. This type of measure answers the question How much did we do?
Efficiency: These are measures of productivity. Usually, they involve dividing an output or activity by the cost or staff involved. Efficiency measures may also include measures of quality and backlogs/waiting lists. This type of measure answers the question How well did we do?
Effectiveness: These are outcome measures that indicate the program accomplishments or results that occur as a result of the services provided. This type of measure answers the question Is anyone better off?
It is important that measures are based on reliable data, that agencies document the data sources used, and provide information on any limitations on the measures.
Strategic Priorities
The Governor has provided his vision, direction, and priorities of the state through the state strategic plan, which outlines the goals and statewide indicators for each of the Governor's key policy areas. The state strategic plan steers the development of the agency's strategic plan, which should identify and communicate the specific strategies the agency will implement to meet its core objectives.
Capital Outlay Requests
FY 2015 Bond Planning Amounts
Bond planning amounts have been established for many (but not all) agencies with ongoing capital programs that request capital projects each year. The FY 2015 planning amounts were communicated directly via correspondence from OPB to those agencies receiving planning amounts. The amounts are established so agencies can prepare funding requests that align with the state's strong debt management plan and the continued receipt of the highest possible bond ratings, thereby realizing the lowest possible debt payments for the state.
The planning amounts are established after careful review of recent appropriations, agency plans, programs and projects underway and proposed, and the current expected overall financial resources of the state. The planning amounts for a given agency are not guaranteed, nor are they to be considered absolute maximum amounts. A comprehensive evaluation of all funding requests will be conducted. Agencies are strongly encouraged to identify and address all critical capital needs and prioritize accordingly within their planning amounts. Agencies may also identify needs above the planning amounts, however, these will only be considered on a priority basis with other requests within the overall state's financial resources.
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
Planning amounts were not established for agencies that have smaller and/or infrequent capital project requests. These agencies have been notified that planning amounts were not established and that specific capital requests from the agency will be evaluated on a project by project basis.
Facility "MRR" Type Projects
To assist with the proper recommended bond term for funding, FY 2015 funding requests for annual allocations for MRR type projects for facility related repairs, improvements, and renovations, agencies are again instructed to group and submit project requests as follows:
Projects with activities of predominately 5-year expected service lives should be titled "Facility Repair and Sustainment." Sustainment includes those actions needed to keep the asset functional and usable.
Projects with activities of predominately 20-year expected service lives should be titled "Facility Major Improvements and Renovations." Improvements include activities to extend the overall facility service life.
Projects that are submitted with various activities with a wide mix of expected service lives will be "unsubmitted" by OPB for agency revision and re-submittal.
Major Capital Facility Projects
In order to ensure that funded priority major capital facility projects advance expeditiously from design to completion, agencies are instructed to develop their funding requests as follows:
Funding of major facility projects of $10 million or more total project cost Initial FY of Funding Request funding for Design (If recommended for Design, 5year bonds will be used as design is relatively short-term, limited-life, and does not result in a physical asset) Following FY Request funding for Construction (If recommended, 20-year bonds will be used) Third or Fourth FY Request funding for Equipment and Furnishings based on scheduled need (If recommended, 5-year bonds will be used)
Funding of major facility projects of less than $10 million total project cost Initial FY of Funding Request funding for Design and Construction in same FY (If recommended, 20-year bonds will be used) Following FY Request funding for Equipment and Furnishings (If recommended, 5year bonds will be used)
It is the state's priority to fund construction for existing projects for which we have already authorized funding for the design. Agency funding requests should explicitly prioritize previous partially funded
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
major projects within their established planning amount per the above guidance before requesting funds to initiate new major capital projects.
Agency Priority Considerations
Agency funding requests must: 1) continue the funding of projects that are in the pipeline (underway partially funded projects) to complete the project in an expeditious manner consistent with scheduled funding needs, 2) reference the agency's sequential funding priority designation, 3) identify if the project is part of the agency's Strategic Plan (if so, cite the specific Goal and Strategy from the Strategic Plan), and 4) present additional funding considerations (urgency, operational importance, expected impact/benefit, and leveraging of state funds).
Requirements for Submission
Agencies must submit their Capital Outlay requests and out-year projections to OPB using the webbased Capital Outlay Budget System (COBS). The COBS home page is http://cobs.opb.state.ga.us/Main.asp.
Due to their relatively high cost and long service lives, the vast majority of Capital Outlay requests are funded by the authorization of General Obligation Bonds and funding the debt using state appropriations. The state may also choose to directly fund smaller capital requests using state general funds (Cash) appropriated in the operating budget.
Agencies should follow this general guidance in preparing and submitting capital funding requests:
Submit project requests for lower cost items ($100,000) with useful service lives of less than five years through BudgetTool as budget redistributions from other funding within an agency's budget. Do not request as additional funding.
Submit project requests for higher cost capital projects ($100,000) having useful service lives of five years or more through COBS. This includes requests for annual funding allocations for repairs, improvements, and renovations at facilities, and vehicle fleet replacements of 10 or more vehicles.
A funding request should only be submitted once using one system. If necessary, OPB will make modifications to handle a project if the recommended funding differs from that submitted; do not submit duplicate requests on both systems for the same item.
Capital outlay requests and funding actions from the previous ten budget cycles (FY 2005 through FY 2014) are archived on COBS, and agencies can use their FY 2014 submitted project information as a starting point to develop this year's submittals. Agencies should update project information and resubmit in COBS their FY 2014 partially or unfunded projects if funding is requested for FY 2015 or future out-years. Agencies may also enter new projects for consideration as appropriate.
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
Once project information is entered and confirmed in COBS for all requested and future projected funding, the agency "submits" the projects to OPB. Agencies must submit their completed capital project information to OPB by September 2, 2013.
Agencies should contact Ron Nawrocki, OPB Capital Budgeting, at (404) 656-6364 if there are questions regarding capital outlay requests and projections, or the COBS web-based submittal process.

Checklist of Contacts
Base Budget (AOB /Cut-Off) Other Adjustments Strategic Plan and Annual Implementation Plan Performance Measures Capital Outlay Budget System (COBS)

Assigned OPB Analyst Assigned OPB Analyst Alice.Zimmerman@opb.state.ga.us Alice.Zimmerman@opb.state.ga.us Ron.Nawrocki@opb.state.ga.us

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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
III. Requirements for Information Technology (IT) Budgets
Requirements for IT Initiatives
For this year's budget submission, the following parameters should be followed for submitting the Agency Project Request (APR):
APR's for budget redirects for IT projects exceeding $100,000 and any proposed IT projects using base funds over $300,000 must be submitted along with the agencies Amended FY 2014 and FY 2015 budget submissions no later than September 2, 2013. Agencies must internally identify funds to be redirected to these projects and should submit requests as redirections in Budget Tool. Submit your request using the online e-form (e-APR) at http://sps.gta.ga.gov/sites/projects/agency.
Agencies are reminded that any IT request over $100,000 to be initiated during the fiscal year or any remaining FY 2015 IT requests not meeting the thresholds listed above but which deviate from GTA Enterprise Policies and Standards should be submitted to GTA via the online e-APR.
Agency IT Coordinator
The agency head will designate an IT Coordinator for the agency who may be the agency CIO, IT Director or other responsible party familiar with information technology to be the single point of contact for IT reviews. The IT Coordinator will become familiar with and monitor the most current GTA IT requirements, including but not limited to GTA Enterprise Policies and Standards. The responsibilities of the IT Coordinator are to review agency IT needs and assure and document the agency's compliance with the GTA Enterprise Policies and Standards.
IT Hardware, Software, System Development, Enhancement or Modifications less than $100,000
GTA delegates approval authority to the IT Coordinator for IT initiatives costing less than $100,000 which comply with the GTA Enterprise Policies and Standards. The GTA Enterprise Policies and Standards are maintained on the GTA Web site at GTA IT Enterprise Policies and Standards (http://gta.georgia.gov).
GTA Review Criteria is as follows:
Is consistent with state's and agency's Strategic Goals In compliance with GTA project management standards In compliance with Technology Review Policy In compliance with State Security Policy In compliance with GTA's Independent Verification and Validation (IV&V) Standards
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Governor's Office of Planning and Budget Amended FY 2014 and FY 2015 Budget Instructions
GTA Review Exemptions
Initiatives costing $100,000 or more involving acquisition of the following items may be exempt from technology review by GTA.
System Maintenance/Modification This exemption covers routine maintenance and routine software modifications of existing systems.
Miscellaneous Exempt items (with GTA approval) are: Building control systems and maintenance Closed circuit TV systems and maintenance Computer controlled industrial equipment and maintenance Consumable IT supplies (media, toner, ink, etc.) Standalone/non-networked digital copiers and maintenance Standalone/non-networked facsimile machines Instructional equipment and maintenance Laboratory equipment and maintenance Life support and monitoring equipment and maintenance Mailing equipment/systems and maintenance Scientific equipment and maintenance
Completed e-APRs for all qualified IT requests must be submitted electronically via the online e-APR form at http://sps.gta.ga.gov/sites/projects/agency. Agency staff with particular questions in regards to the GTA review of IT projects or e-APR form, User ID or Password should contact their respective Customer Relationship Manager or Teresa Reilly, Director, Program Management Office, Enterprise Governance and Planning Division, at 404-463-1009 or Teresa.Reilly@gta.ga.gov. The Technology Review Policy, issued jointly by OPB, GTA and DOAS, should be used in conjunction with these budget instructions. The Policy is published on the GTA website under the existing list of Policies and Standards. Both GTA and OPB will review agency's e-APRs.
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