There are different federal agencies under the federal union, who has specific tasks to perform in light of governmental procedure. Hence, each agency has its own budgetary limitations owing to its responsibility. There are cash allotments by the federal government on basis of responsibilities to these agencies and they prepare their budget according to those cash receipts. There are allotments of cash by the federal government in terms of agriculture, health and education, homeland security, energy, defense, etc to the respective agencies, who prepares agency budget for a systematic working procedure.
The agency budget is therefore dependent on the amount of cash allotted to them and hence, they follow certain procedure for the cash allotment. The practical significance of each agency is very important in case of their cash allotment and hence, the cash is allotted keeping the legal aspects in view. In some cases, an agency is involved in long term work schedule, which continues for few subsequent years.
In such scenario the process of cash allotment to that agency is repeated in a similar way over the next few years and the budget of that agency is similar in that sense. In case of the budget of specific agency, the revenue collected is the cash allotment and according to that amount, the expenditure structure is prepared. The budget structure is generally planned under the guidance of Office of Management and Budget (OMB), who gives the idea of overall budget framework to the federal agencies.
The budget request is initially planned by the agencies and then the request is send to the Office of Management and Budget (OMB), who evaluates the needs and decides how much they can afford to allot to the particular agency. This allotment as earlier mentioned is done according to the significance of the agency and if the allotment is not enough then the agency can further appeal for more cash amount. If the Congressional appropriators are convinced by the appeal of the agencies during the hearing of the appeal then the bill is passed and the budget request is granted.
In the agency budget, the allotted cash amount is further distributed to the sub divisions under the agency for their respective work schedule. (Budget Analyst, 2010) Similarities and Differences among these budgets The above discussed budget forms, federal budget, state budget, local budget and agency budget has few similarities along with certain differences among them, which we will illustrate in our further discussion. We first discuss about the similarities that exist between the different forms of budget.
The main similarity between all the budgets is that every budget is calculated on basis of cash revenue and expenditure. All the budgets are prepared as per the direction of the President and under the regulations of Office of Management and Budget (OMB). The revenue collection for each budget is mainly done from the various taxes that are imposed on the citizens of the country. The differences among these budgets are related to the size of their subjected areas and the regulations imposed on them.
The difference between the local government and the state government is that, the state government possesses sovereignty under the federal union but the local government does not possess any sovereignty, nor under the federal union or their respective states. The federal budget and the state budget is mainly dependent on the revenue collected from various taxes whereas, the local and the agency budget is dependent on the cash allotted to them by the Office of Management and Budget (OMB).