1 Includes other functions, not shown separately.
2 Beginning in FY 1998, a number of DOE programs were reclassified from energy (270).
3 Based on gross domestic product implicit price deflator.

Source: U.S. National Science Foundation, Federal R&D Funding by Federal R&D Funding by Budget Function, annual.Most recent report NSF 99-315.

http://www.nsf.gov/sbe/srs/frdfbf/start.htm*Definitions

Research and DevelopmentAs used in this report, R&D refers to researchboth basic and appliedand development activities in thesciences and engineering.

Research is a systematic study directed toward fuller scientific knowledge or understanding of the subjectstudied. Research is classified as either basic or applied according to the objective of the sponsoring agency.

In basic research the objective of the sponsoring agency is to gain fuller knowledge orunderstanding of the fundamental aspects of phenomena and of observable facts without specificapplications toward processes or products in mind. In applied research the objective of the sponsoring agency is to gain knowledge or understandingnecessary for determining means by which a recognized and specific need may be met.

Development is the systematic use of the knowledge or understanding gained from research directed toward theproduction of useful materials, devices, systems, or methods, including design, development, and improvement ofprototypes and new processes. It excludes quality control, routine product testing, and production.

Funds for conducting R&D include those for personnel, program supervision, and administrative support directlyassociated with R&D activities. Expendable or movable equipment needed to conduct R&De.g., microscopesor spectrometersis also included.

This report does not include data on R&D plant fundsi.e., funds for R&D facilities such as reactors, windtunnels, or particle accelerators or for the construction, repair, or alteration of such facilities. Also excluded areall non-R&D activities performed within budget functions that conduct R&D and all functions in which no R&D isconducted.

Budget Authority, Obligations, and OutlaysThe Federal R&D funding data presented here are, with a few noted exceptions, provided in budget authority.Budget authority is used because it is the initial budget parameter for congressional action on the President'sproposed budget. Budget authority imposes a ceiling on obligations and outlays; obligations and outlays flow frombudget authority.

Budget authority is the primary source of legal authorization to enter into obligations that willresult in outlays. Budget authority is most commonly granted in the form of appropriations by thecongressional committees assigned to determine the budget for each function. Obligations represent the amounts for orders placed, contracts awarded, services received, andsimilar transactions during a given period, regardless of when the funds were appropriated andwhen the future payment of money is required. Outlays represent the amounts for checks issued and cash payments made during a given period,regardless of when the funds were appropriated or obligated.

Budget Functions

All activities covered by the Federal budget, including R&D, are classified into 20 broad functional categories.The Federal budget total comprises funding for these 20 functions. An agency's activities are not necessarilyincluded in only one function. Instead, the programs of one agency typically are distributed across functions, andeach function often includes programs from multiple agencies. No overlap occurs between functions or betweenthe various agency programs within those functions. In a few cases components of a major national effort arefunded through multiple functions, such as the Human Genome mapping effort (health and energy).

Notably, each specific R&D activity is assigned to only one function area, consistent with the official codes usedin budget documents, even though the R&D activity may address several functional concerns. For example, exceptfor those of the Army Corps of Engineers, all R&D activities sponsored by the Department of Defense (DoD) areclassified as defense, even though some activities have secondary objectives such as space or health. Moreover,only R&D funded by the Department of Health and Human Services and the Department of Labor is classified inthe health function category. Yet some R&D funding, from at least three additional agenciesDoD and theDepartments of Energy and Veterans Affairshas a major health component.

The functional categories and definitions used in this report are the same as those used in the Federal budget, withone exception. R&D activities categorized as general science, space, and technology (function 250) are reportedseparately here. Subfunction 251 contains R&D activities for general science and basic research, and subfunction252 contains R&D activities for space research and technology. Not all federally sponsored basic research iscategorized in function 251, however; some basic research is included in the remaining 19 functional categories.

Five Federal budget functionsmedicare (function 570), social security (function 650), net interest (function900), allowances (function 920), and undistributed offsetting receipts (function 950)have no R&D components.Consequently, they are not discussed in this report, except where R&D is described as a proportion of totalFederal budget authority.

The Agency/Function Crosswalk on page 4 listsby name and function codethe 16 individual R&D functionsfunded by agencies. *Data Sources

Within the overall Federal Budget there is no separately identified R&D budget as such; nor are mostappropriations for R&D so labeled except in the case of certain program areas, such as in defense, energy, health,and environment. Consequently, most funds for R&D are not line items in an agency's budget submission but areincluded within general program funding. To determine funding for Federal R&D, the Office of Management andBudget (OMB) requires agencies whose annual R&D funding is greater than $10 million to submit data on theirR&D programs as part of their annual budget submissions. Specifically, the agencies provide datareported, inaccordance with OMB Circular A-11, Max Schedule C, "Research and Development Activities"on fundinglevels for basic research, applied research, development, R&D facilities, and R&D support to universities andcolleges.

The data in this report represent agencies' best estimates of actual and proposed Federal funding for R&Dcollected during the period February 2 through April 30, 1998. These data are based primarily on informationprovided to OMB by 23 agencies and account for more than 99 percent of all federally sponsored R&D activities.Also incorporated in this report is R&D information that became available from the individual agencies after theadministration's budget was prepared and reported in the Budget of the United States Government. Suchinformation consists of agency budget justification documents submitted to Congress andsupplemental-program-specific information obtained from agency budget and program staff through mid-May1998. Therefore, budget numbers for individual activities, programs, or agencies may differ slightly from thosepublished in the President's budget or agency budget documents.

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