Budget and Accounting Act
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| Enacted by | the 67th United States Congress |
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The Budget and Accounting Act of 1921 (Pub.L. 67–13, 42 Stat. 20, enacted June 10, 1921) was landmark legislation that established the framework for the modern federal budget. The act was approved by President Warren G. Harding to provide a national budget system and an independent audit of government accounts. The official title of this act is "The General Accounting Act of 1921", but is frequently referred to as "the budget act", or "the Budget and Accounting Act". This act meant that for the first time, the president would be required to submit an annual budget for the entire federal government to Congress. The object of the budget bill was to consolidate the spending agencies in both the executive and legislative branches of the government.
The act created the Bureau of the Budget, now called the Office of Management and Budget (OMB), to review funding requests from government departments and to assist the president in formulating the budget. The OMB mandates that all government estimates, receipts, and expenditures be cleared by the director of the budget. From the director, the estimates go directly to the president and from the president, directly to Congress. In addition, the act created the General Accounting Office, now known as the Government Accountability Office (GAO), the non-partisan audit, evaluation, and investigative arm of Congress, and an agency in the legislative branch of the United States Government.
The act required the head of the GAO, to "investigate, at the seat of government or elsewhere, all matters in relation to the receipt, disbursement, and application of public funds, and shall make to the President ... and to Congress ... reports [and] recommendations looking to greater economy or efficiency in public expenditures". The name of the General Accounting Office was changed to Government Accountability Office in 2004 to better reflect the mission of the office.
This act created the Bureau of the Budget, which was a part of the Treasury Department but remained accountable to the White House. In 1939, the Bureau was transferred from the Treasury Department to the Executive Office of the President. The Bureau had authority under the act "to assemble, correlate, revise, reduce, or increase the estimate of the several departments and establishments."
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