Continued from The FierceGovernmentIT guide to the IT budget (Page 1) 

Because the budget process takes so long, even when it's going according to schedule, government budget planners often directly deal with three fiscal years at any one time. There's the current fiscal year, which we emphasize runs from Oct. 1 to Sept. 30. Then there's the next fiscal year which is probably under consideration at OMB or Congress, and then there's the subsequent fiscal year, for which preparations are either about to begin or have already begun. Each year in play contains within it plans for future fiscal years.

Let's pick up the process when agencies start putting together their budget requests in the spring before the budget is sent to Congress. Requests for big IT systems typically require individual agency review by something called an investment review board, although not every agency has an IRB. Regardless, program officials must prepare business cases for OMB review that justify the expense of their major systems. The business cases are known as Exhibit 300s. They're so-named because the language that requires agencies to prepare them is found in section 300 of OMB Circular A-11. Despite its bland title, this directive is central to the federal budget preparation process. OMB revises it annually and agency budget officials anticipate its release with zest. The intelligence community doesn't participate in the OMB-led review process; neither do quasi-government organizations such as the Postal Service, nor the legislative or judicial branches.

As a result, the figure that OMB comes out with each year for the "federal IT budget" is lower than the reality. In recent years the official number has hovered around $80 billion. The real number is much higher. The OMBs figure, in addition to not including intelligence community spending, quasi-governmental organizations or the legislative and judicial branches, also doesn't include Defense Department spending on IT that's embedded into weapons systems, and no modern weapons system is without significant electronics components.

Given current trends of spending, the real IT budget encompassing all the excluded factors is probably 40 to 50 percent higher than the annual OMB figure, according to some longtime budget experts.

As part of the budget preparation process, agencies subject to the OMB process also prepare a list of supposedly every IT project they'd like to undertake in the coming fiscal year, a list called the Exhibit 53s (so named because, yes, you guessed it).

The Exhibit 53s cause a lot of excitement, at least among contractors, when they're publically released, but they should be taken with a heavy grain of salt. At best, the list represents a snapshot in time that by the end of the fiscal year for which it's meant to be valid is maybe only somewhat accurate. Priorities change and the funding changes with them.

Looking at a neat list of proposed major (Exhibit 300s) and less big (found in the Exhibit 53s, which theoretically list all projects) projects, you might think that it'd be easy to find a corresponding list made by Congress with the appropriations numbers filled in. Actually, it's impossible--because although agencies prepare exhibits, they don't request money that way. Except with one major exception, agencies don't have an information technology line item in their budget. Rather, most IT projects are funded through money slated for agency programs, or departmental bureaus, or operations and maintenance or working capital expenditure--or some other sort of line item in which the percentage of it to be spent on IT isn't specified.

Adding to the confusion is the fact that neither does Congress appropriate money according to the items listed in the Exhibit 53s. It doesn't even pay much attention to the Exhibit 53s. In fact, Congress doesn't necessarily appropriate money according to the way agencies do ask for it. There's not even consistency in the level of detail at which money is appropriated from one appropriations subcommittee to the next. Some subcommittees take a fairly hands off approach while others write all sorts of spending directions.  

Really big IT projects tend to receive special consideration from Congress, with subcommittees often drafting specific language about how much agencies should spend on them per year or how often agencies should report back to Congress on the projects' status. Oftentimes that language is found not in the actual spending bill itself but in the report that always accompanies each spending bill. Report language technically lacks the force of law and is merely advisory, but the directions contained in the reports are optional in the sense that parents' advice about vegetable consumption to children is likewise optional.

If you look at many spending bills or reports, you will oftentimes see that the office of the chief information officer gets assigned a specific funding amount. But even when the CIO does get a specific mention, most IT projects aren't funded through the CIO's office.

The major exception mentioned above--the one agency that does have a single line item for all its IT spending--is the Veterans Affairs Department. This makes the VA CIO uniquely powerful among his peers.

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