Federal agency heads will prepare their FY2015 budgets at levels five percent below the amount planned for FY2015 in the FY2014 budget, according to guidance issued by the Office of Management and Budget (OMB) this week. 

OMB Director Sylvia Burwell told agencies that the FY2015 budget would “continue to build on the president’s plan, by reducing spending on lower priority programs to create room for effective investments in areas critical to economic growth.”

To assist OMB in developing options for the President to meet funding levels set by the Budget Control Act (BCA), OMB also directs agencies to include additional cuts that would bring their budgets to 10 percent below the FY2015 level in the FY2014 budget.

OMB instructs agencies to refrain from using across-the-board cuts, cutting mandatory spending in appropriations bills, shifting costs to other parts of the budget, reclassifying discretionary to mandatory, or enacting new user fees to meet funding targets.

OMB also reminds agencies that they must provide an updated strategic plan with the FY2015 budget. The strategic plan will also include management-focused objectives that set improvement priorities critical to promoting mission results and increasing efficiency. Under previous guidance agencies will submit their draft strategic goals and objectives (and Primary Goal areas) by June 3, 2013.

Agencies will also update their performance plan through the end of 2015. The performance plan will include: management objectives; innovation and customer service priorities; critical mission support areas (e.g., human capital, training, skills, and technology); and other management improvements in areas such as human capital, information technology, acquisition, and financial stewardship.