Budget Procedures

Editor’s note: PL 4-77 amended sections 102, 103, 106, 107, and 108 of this chapter primarily to ensure compliance with the Compact of Free Association. PL 4-77 § 14 provides that these amendments shall take effect upon the effective date of the Compact of Free Association. The Compact took effect on November 3, 1986.

(1) “Agency” means any agency, commission, authority, board, bureau, or other organization of the National Government established by law, and not specifically part of one of the three branches of the National Government.

(2) “Annual budget” refers to the annual request for new obligation and expenditure authority during the ensuing fiscal year by all branches and agencies of the National Government for all purposes, including, but not limited to, Government operations, development programs and projects, special programs, contributions, grants, and subsidies.

(3) “Appropriation” refers to a law enacted by Congress which authorizes the National Government to incur obligations and to make payments out of the National Treasury in accordance with law.

(1) No later than April 1 of each year, the President shall submit to the Congress a proposed budget for the National Government for the ensuing fiscal year. The proposed budget shall contain an operations budget and a development budget, and include planned expenditures for all sources of funds. The proposed budget shall set forth the following information in such form and detail as the President may determine or as the Congress may require by law:

(a) planned operational expenditures for each department and office of the executive branch, Congress, the judicial branch, and agencies of the National Government other than agencies or entities which receive National Government appropriations on a subsidy, contribution, or grant basis, and operational budget projections for each of the two subsequent fiscal years;

(b) planned development expenditures for the ensuing fiscal year and development budget projections for each of the two subsequent fiscal years, with details of all development programs or projects to be funded or undertaken by the National Government in the ensuing fiscal year, relating such programs and projects to specific development goals and objectives set forth in the National Development Plan of the Federated States of Micronesia, as approved by the Congress, and identifying any amendments to the program and project listings contained in such plan; and

(c) planned subsidies, contributions, or grants for the ensuing fiscal year and projected subsidies, contributions, or grants for each of the two subsequent fiscal years, for the FSM Telecommunications Corporation, the College of Micronesia, international and regional organizations, and such other public and private entities as authorized by law.

(a) a budget message which shall include such supporting financial, statistical, program performance, and other information and data and such recommendations as the President may determine are in the public interests;

(b) proposed legislation to appropriate funds for the National Government during the ensuing fiscal year reflecting the President’s recommendations as contained in the proposed budget;

(c) anticipated revenues and other money to be made available to the National Government from all sources in the ensuing fiscal year and each of the two subsequent fiscal years including, but not limited to, taxes, fees, fines, interest income, revenue from fishing agreements, Compact financial assistance, United States Federal programs, foreign financial and technical assistance, reimbursements, and loans;

(d) if the total of the planned expenditures exceeds the total of the funds estimated to be available for appropriation during the ensuing fiscal year, or the two subsequent fiscal years, recommendations as to how the deficiency is to be met, either through additional revenues or reduced appropriations and expenditures;

(e) statements of the balance of the General Fund and any special funds of the National Treasury for the fiscal year last concluded, including the actual revenue by source, all appropriations, and the obligations and expenditures pursuant to each appropriation;

(f) statements of the projected balance of the General Fund and any special funds of the National Treasury for the fiscal year in progress including all appropriations, estimated revenues by source, and anticipated obligations. If the projected balance for any fund indicates a deficit, recommendations as to how the deficiency is to be met;

(h) such other financial information and data as may be necessary or desirable in order to make known in reasonable and practicable detail the financial condition of the National Government.

(3) The Congress, the judicial branch, and agencies of the National Government shall transmit to the President on or before March 1 of each year or at such other time as the President may determine, but not before January 1 of each year, planned operational and development expenditures for the ensuing fiscal year, budget projections for each of the two subsequent fiscal years, and such other information as the President may determine or as may be required by law. The President shall include such planned expenditures and budget projections in the proposed budget without revision, but subject to his recommendations.

The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code. The statutory provisions on the Judiciary of the FSM are found in title 4 of this code.

(1) Based on all available information, the Congress shall adopt a resolution setting forth the total funds estimated to be available for appropriation from the General Fund and any special funds of the National Treasury during the ensuing fiscal year. The Congress may from time to time adopt resolutions revising the amount estimated to be available for appropriation based on the most recent information.

(1) The President shall transmit to Congress such proposed supplemental or deficiency appropriations as may be necessary on account of laws enacted after the transmission of the annual budget or which are otherwise in the public interest. He shall accompany such proposals with a statement of the reasons therefor, including the reasons for their omission from the annual budget. Whenever such proposed supplemental or deficiency appropriation would create a deficit for the General Fund or any specific fund of the National Treasury, the President shall make recommendations as to how such deficit is to be met.

(2) The President from time to time may transmit to Congress proposed rescissions to cancel budgetary authority previously provided by the Congress. These proposals may be accepted in whole or in part by passage of a rescission bill by the Congress.

Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code.

(1) The Congress, after receipt of the proposed budget from the President and no later than August 29 of each year, shall by act, adopt the annual budget of the National Government of the ensuing fiscal year. In no event shall the budget adopted or any amendments thereto provide funding for the personnel, contractual services, or travel expenses of any branch or agency of the National Government in an amount greater than 110 percent of the aggregate funding appropriated for such branch or agency for such categories in the initial budget act of the immediately preceding fiscal year, except where funding in excess of such limit shall be deemed essential by the Congress on the face of the appropriating legislation.

(3) The budget alteration authority of Congress shall be executed by means of appropriations legislation. Appropriations or authorizations for the expenditure of funds shall be made by law, except as provided in section 108 of this chapter.

Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code.

The President shall consult with the Congress in the formulation and submission of all requests made to the United States Government for additional assistance, services, and programs pursuant to section 211(c) or 224 of the Compact of Free Association.

In the event a budget has not become law prior to the beginning of a fiscal year, the head of each branch of Government and the head of each agency established by law may continue to expend funds for National Government operations expenses after the beginning of the fiscal year upon the adoption by Congress of a continuing resolution. Such expenditures shall be in accordance with appropriations laws appropriating funds for the immediately preceding fiscal year. A continuing resolution of the Congress which would authorize the expenditure of Compact financial assistance is hereby made conditional on such funds being available to the National Government as of the beginning of the relevant fiscal year, either pursuant to a continuing resolution adopted by the United States Congress or pursuant to appropriation acts of the United States Congress.

Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code.

In the event of a major natural disaster or other emergency threatening the lives or safety of citizens of the Federated States of Micronesia requiring immediate Governmental action, an emergency account shall be established in the Department of Finance. All Governmental expenses related to such emergency shall be charged to such account. The President is hereby authorized to reprogram up to $200,000 of the funds appropriated from local revenues or other funds not dedicated to specific purposes under the Compact of Free Association or other agreements with foreign governments to such account. The President shall present funding requests to the Congress to cover emergency expenditures.

Cross-reference: The statutory provisions on Emergency Proclamations are found in chapter 8 of title 11 (Crimes) of this code. The “Disaster Relief Assistance Act of 1989" is codified at chapter 7 of title 41 (Public Health, Safety and Welfare) of this code. The statutory provisions on the Disaster Relief Fund are found in subchapter II of chapter 6 of this title.

	FSMC, TITLE 55. GOVERNMENT FINANCE & CONTRACTS
	Chapter 1: Budget Procedures § 101. Short title. § 102. Definitions. § 103. Annual budget. § 104. Balanced budget. § 105. Supplemental or deficiency appropriations and rescissions. § 106. Appropriations by Congress. § 107. Request to the United States Government. § 108. Continuing resolution. § 109. Emergency account. Editor’s note: PL 4-77 amended sections 102, 103, 106, 107, and 108 of this chapter primarily to ensure compliance with the Compact of Free Association. PL 4-77 § 14 provides that these amendments shall take effect upon the effective date of the Compact of Free Association. The Compact took effect on November 3, 1986. § 101. Short title. This chapter shall be known as the “Budget Procedures Act of 1981.” Source: PL 2-17 § 1. Editor’s note: This law repeals section 5 of PL 1-96. § 102. Definitions. When used in this chapter: (1) “Agency” means any agency, commission, authority, board, bureau, or other organization of the National Government established by law, and not specifically part of one of the three branches of the National Government. (2) “Annual budget” refers to the annual request for new obligation and expenditure authority during the ensuing fiscal year by all branches and agencies of the National Government for all purposes, including, but not limited to, Government operations, development programs and projects, special programs, contributions, grants, and subsidies. (3) “Appropriation” refers to a law enacted by Congress which authorizes the National Government to incur obligations and to make payments out of the National Treasury in accordance with law. (4) “Congress” refers to the Congress of the Federated States of Micronesia. (5) “Fiscal year” refers to the 12-month period from October 1 of one calendar year through September 30 of the succeeding calendar year. (6) “National Government” refers to the National Government of the Federated States of Micronesia and includes all branches and agencies of the Government. Source: PL 2-17 § 2; PL 4-77 § 8. § 103. Annual budget. (1) No later than April 1 of each year, the President shall submit to the Congress a proposed budget for the National Government for the ensuing fiscal year. The proposed budget shall contain an operations budget and a development budget, and include planned expenditures for all sources of funds. The proposed budget shall set forth the following information in such form and detail as the President may determine or as the Congress may require by law: (a) planned operational expenditures for each department and office of the executive branch, Congress, the judicial branch, and agencies of the National Government other than agencies or entities which receive National Government appropriations on a subsidy, contribution, or grant basis, and operational budget projections for each of the two subsequent fiscal years; (b) planned development expenditures for the ensuing fiscal year and development budget projections for each of the two subsequent fiscal years, with details of all development programs or projects to be funded or undertaken by the National Government in the ensuing fiscal year, relating such programs and projects to specific development goals and objectives set forth in the National Development Plan of the Federated States of Micronesia, as approved by the Congress, and identifying any amendments to the program and project listings contained in such plan; and (c) planned subsidies, contributions, or grants for the ensuing fiscal year and projected subsidies, contributions, or grants for each of the two subsequent fiscal years, for the FSM Telecommunications Corporation, the College of Micronesia, international and regional organizations, and such other public and private entities as authorized by law. (2) The President shall submit along with the annual budget the following: (a) a budget message which shall include such supporting financial, statistical, program performance, and other information and data and such recommendations as the President may determine are in the public interests; (b) proposed legislation to appropriate funds for the National Government during the ensuing fiscal year reflecting the President’s recommendations as contained in the proposed budget; (c) anticipated revenues and other money to be made available to the National Government from all sources in the ensuing fiscal year and each of the two subsequent fiscal years including, but not limited to, taxes, fees, fines, interest income, revenue from fishing agreements, Compact financial assistance, United States Federal programs, foreign financial and technical assistance, reimbursements, and loans; (d) if the total of the planned expenditures exceeds the total of the funds estimated to be available for appropriation during the ensuing fiscal year, or the two subsequent fiscal years, recommendations as to how the deficiency is to be met, either through additional revenues or reduced appropriations and expenditures; (e) statements of the balance of the General Fund and any special funds of the National Treasury for the fiscal year last concluded, including the actual revenue by source, all appropriations, and the obligations and expenditures pursuant to each appropriation; (f) statements of the projected balance of the General Fund and any special funds of the National Treasury for the fiscal year in progress including all appropriations, estimated revenues by source, and anticipated obligations. If the projected balance for any fund indicates a deficit, recommendations as to how the deficiency is to be met; (g) an analysis of major trends over the three years budgeted regarding funding sources, spending emphases, staffing levels, and program expansions and contractions; and (h) such other financial information and data as may be necessary or desirable in order to make known in reasonable and practicable detail the financial condition of the National Government. (3) The Congress, the judicial branch, and agencies of the National Government shall transmit to the President on or before March 1 of each year or at such other time as the President may determine, but not before January 1 of each year, planned operational and development expenditures for the ensuing fiscal year, budget projections for each of the two subsequent fiscal years, and such other information as the President may determine or as may be required by law. The President shall include such planned expenditures and budget projections in the proposed budget without revision, but subject to his recommendations. Source: PL 2-17 § 3; PL 4-77 § 9; PL 6-70 § 1. Cross-reference: FSM Const., art. XII, § 2. The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code. The statutory provisions on the Judiciary of the FSM are found in title 4 of this code. § 104. Balanced budget. (1) Based on all available information, the Congress shall adopt a resolution setting forth the total funds estimated to be available for appropriation from the General Fund and any special funds of the National Treasury during the ensuing fiscal year. The Congress may from time to time adopt resolutions revising the amount estimated to be available for appropriation based on the most recent information. (2) Total appropriations for a fiscal year shall not exceed the amount embodied in the resolution referred to in subsection (1) of this section. Source: PL 2-17 § 4. § 105. Supplemental or deficiency appropriations and rescissions. (1) The President shall transmit to Congress such proposed supplemental or deficiency appropriations as may be necessary on account of laws enacted after the transmission of the annual budget or which are otherwise in the public interest. He shall accompany such proposals with a statement of the reasons therefor, including the reasons for their omission from the annual budget. Whenever such proposed supplemental or deficiency appropriation would create a deficit for the General Fund or any specific fund of the National Treasury, the President shall make recommendations as to how such deficit is to be met. (2) The President from time to time may transmit to Congress proposed rescissions to cancel budgetary authority previously provided by the Congress. These proposals may be accepted in whole or in part by passage of a rescission bill by the Congress. Source: PL 2-17 § 5. Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code. § 106. Appropriations by Congress. (1) The Congress, after receipt of the proposed budget from the President and no later than August 29 of each year, shall by act, adopt the annual budget of the National Government of the ensuing fiscal year. In no event shall the budget adopted or any amendments thereto provide funding for the personnel, contractual services, or travel expenses of any branch or agency of the National Government in an amount greater than 110 percent of the aggregate funding appropriated for such branch or agency for such categories in the initial budget act of the immediately preceding fiscal year, except where funding in excess of such limit shall be deemed essential by the Congress on the face of the appropriating legislation. (2) Congress may alter the budget submitted by the President in any respect. (3) The budget alteration authority of Congress shall be executed by means of appropriations legislation. Appropriations or authorizations for the expenditure of funds shall be made by law, except as provided in section 108 of this chapter. (4) Congress may restrict by law the expenditure of funds for a specific purpose. Source: PL 2-17 § 6; PL 4-77 § 10; PL 5-119 § 1. Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code. § 107. Requests to the United States Government. The President shall consult with the Congress in the formulation and submission of all requests made to the United States Government for additional assistance, services, and programs pursuant to section 211(c) or 224 of the Compact of Free Association. Source: PL 2-17 § 7; PL 4-77 § 11. § 108. Continuing resolution. In the event a budget has not become law prior to the beginning of a fiscal year, the head of each branch of Government and the head of each agency established by law may continue to expend funds for National Government operations expenses after the beginning of the fiscal year upon the adoption by Congress of a continuing resolution. Such expenditures shall be in accordance with appropriations laws appropriating funds for the immediately preceding fiscal year. A continuing resolution of the Congress which would authorize the expenditure of Compact financial assistance is hereby made conditional on such funds being available to the National Government as of the beginning of the relevant fiscal year, either pursuant to a continuing resolution adopted by the United States Congress or pursuant to appropriation acts of the United States Congress. Source: PL 2-17 § 8; PL 4-77 § 12. Cross-reference: The statutory provisions on the Executive are found in title 2 of this code. The statutory provisions on the Legislative are found in title 3 of this code. § 109. Emergency account. In the event of a major natural disaster or other emergency threatening the lives or safety of citizens of the Federated States of Micronesia requiring immediate Governmental action, an emergency account shall be established in the Department of Finance. All Governmental expenses related to such emergency shall be charged to such account. The President is hereby authorized to reprogram up to $200,000 of the funds appropriated from local revenues or other funds not dedicated to specific purposes under the Compact of Free Association or other agreements with foreign governments to such account. The President shall present funding requests to the Congress to cover emergency expenditures. Source: PL 2-17 § 9; PL 4-77 § 13; PL 5-16 § 1. Cross-reference: The statutory provisions on Emergency Proclamations are found in chapter 8 of title 11 (Crimes) of this code. The “Disaster Relief Assistance Act of 1989" is codified at chapter 7 of title 41 (Public Health, Safety and Welfare) of this code. The statutory provisions on the Disaster Relief Fund are found in subchapter II of chapter 6 of this title.