FINANCIAL MANAGEMENT POLICY MANUAL

increasing the allotment or for imposing restrictions.
(Change 61)
073202 OPERATING BUDGET PROCEDURE
1. GENERAL.
When organizational components and activities are funded from the
Operations accounts of the Navy or Marine Corps and Research,
Development, Test and Evaluation, Navy (RDT&E,N) obligational
authority and expense authority for military personnel of the Active
Forces, which is applicable to activities funded under Operations
accounts, are established by a system of development, submission,
review, and approval of operating budgets. The process is similar to that
followed in the budget formulation phase when the planning for a given
budget year occurs 15 to 18 months prior to its beginning. As the budget
cycle moves closer to the given budget year and assumes the place of
"current year" in financial planning, more realistic estimates at all
echelons afford a basis for consideration and approval of operating
budgets and conveyance of expense and obligational authority.
2. DEVELOPMENT.
The development of an operating budget is a process of determining
resource requirements at the lowest echelon (i.e. cost center or subcost
center) and summarizing the requirements for all cost centers to arrive at
the estimate for the total activity. The cost center manager, as well as the
activity commander, utilizes guidance provided to him by higher authority
and, in addition, considers the potential reimbursable work, if applicable.
The requirements of individual shore activities are summarized and
reviewed at the intermediate command level, and at all succeeding levels,
until the estimates are ultimately summarized for total Department of the
Navy review by the Office of Budget (FMB) as staff for the Comptroller.
3. SUBMISSION.
Activities which are funded by operating budgets submit their estimated
requirements to higher authority for approval in accordance with guidance
forwarded via command channels from the Chief of Naval Research
(CNR), acting as staff for the Assistant Secretary of the Navy for
Research, Development and Acquisition (ASN(RD&A)), the Fiscal
Management Division (N82) as staff for the Chief of Naval Operations
(CNO), or the Commandant of the Marine Corps (CMC), as appropriate.
For the Operations accounts, the submission is comprised of the Operating
Budget/Expense Report (NAVCOMPT Form 2168) which distributes the
estimates by activity/subactivity group, functional/subfunctional category,
and cost account and the Activity Budget/Apportionment Submission
(NAVCOMPT Form 2179-1) which arrays the estimates by element of
expense within functional category and activity/subactivity group, with
Financial Management Policy
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