THE BUDGET PROCESS Budgeting begins with the collection of the information on which your budget request will be based. Much of this information is historical in nature. It comes from the usage data recorded on completed work orders and  requests,  consumable  and  nonconsumable equipment and material receipt and expenditure records, and your operating target (OPTAR) log and other supply records. The rest of this information is a blend of projected  changes  to  your  current  mission.  (The projected changes are based on changes in customer needs, the addition or deletion of a particular service, and the availability of improved technology to your unit.) Obviously you shouldn’t wait until 2 weeks before the due date of your budget request to start collecting and evaluating this information. Instead, you should continually perform this process all year. You should also cultivate and maintain industry and trade contacts to find out about improvements in equipment, material, and process technology. Make contact with the technical representatives serving your local area to let them know of your interest. Subscribe to and read trade periodicals (magazines), and write for information about products you believe could be useful in  your  operation.  Keep  open  channels  of communication with other managers in your field by encouraging the exchange of information and ideas. Once you have collected all the information on which to base your budget decisions, ask yourself the following  questions: Will my unit’s mission be the same next year as it was this year? – If yes, will the volume of work increase, decrease, or remain the same? – If no, what work will we no longer do? What work will be added, and how much? Will my unit be doing the work the same way next year as we did it this year? If not, – what materials and equipment will we no longer stock or use and – what materials and equipment will we have to begin to stock or use? What is the cost of the materials and equipment we will require to operate next year, and when should we order them? The answers to these questions are based on information you have gathered and on the current cost of standard stock and open-purchase items. You do not figure inflation into your budget as a percentage increase over projected costs. That is done at a higher level. But inflation is nevertheless a real factor you must consider. As costs rise you maybe forced to buy less of everything you need. You can beat inflation and decrease the chances of your budget request being reduced by submitting a detailed, item-by-item breakdown of your funding needs. Such a request would identify not only how much material your division needs, but also what the material is used for and what organizations and missions it supports. Then if inflation erodes the buying power of your OPTAR funds, you can show your department head and  commanding  officer  exactly  how  much  your services will be cut. You can also show them what organizations and missions will suffer if you cannot obtain the quantities of materials requested. When presented in this reamer, a budget is much easier to support and harder to cut. If cuts must be made, it forces the command authority to decide exactly where, and at whose expense, the savings will be made. When planning a budget, you cannot accurately predict every possibility, but Navy budget planning makes allowances for that. Every commanding officer has Operation and Maintenance, Navy (O&MN) funds set aside to deal with new or unexpected requirements. So if your division is suddenly tasked to provide an unexpected service or a large, unplanned volume of support, you can ask for extra funds. You can justify the request by showing that the division cannot perform the task and continue providing regular services without the extra funds. ACTIVITY-LEVEL BUDGET EXECUTION The operating budget prepared by a responsible center sets forth the annual plan of operations. It is the commanding officer’s estimate of the total resources required throughout the year for performance of the activity’s mission, including reimbursable work/service for others. The budget as approved by proper authority sets forth the actual resources available, and it is against these amounts that performance will be evaluated. Approval is received on a Resource Authorization (NAVCOMPT  Form  2168-1).  The  Resource Authorization  indicates,  in  quarterly  increments, approved  obligational  authority, authority, and expense authority. military services 6-13