Federal agencies adopt rules to implement statutes that Congress has enacted. As such, agencies have considerable power to establish and interpret federal law. To control the process by which agencies create these rules, Congress has enacted statutes such as the Administrative Procedure Act (APA) that dictate what procedures an agency must follow to establish a final, legally binding rule. Other statutes govern issues such as how agencies must operate internally with respect to hiring and labor practices, the maintenance of federal records, financial management, and a diverse range of other topics. In order to understand these statutes, one must know to which entities these laws actually apply. Congress has not provided one all-encompassing definition of an agency. Instead, the term "agency" can mean different things in different contexts, depending on what statute is at issue. For example, the definition of agency under the APA differs from its definition under the Freedom of Information Act (FOIA). Generally speaking, executive agencies are subject to direct presidential control, while independent agencies are typically designed by statute to be comparatively free from presidential control. Typically, to ensure this level of independence, Congress provides the independent agency with certain structural characteristics that limit the President's control over the agency's actions. However, Congress has prohibited OMB and the President from revising the budget requests of certain agencies. Judicial and Legislative Branch Agencies

While most federal agencies can be divided into two broad categories—executive agencies and independent agencies—there are also agencies within the legislative and judicial branches. It is, therefore, arguably the most important statute to understand in administrative law. The scope of the definition of "agency" under the Paperwork Reduction Act appears to be broad, but, by its terms, limited to the executive branch.
Congress has created a variety of federal agencies to execute the law. To this end, agencies may adopt rules to implement laws and adjudicate certain disputes arising under such laws. As such, agencies enjoy considerable power to regulate different industries and affect the legal rights of people. In order to control the manner in which agencies operate, Congress has passed numerous statutes that impose procedural requirements on federal agencies. The Administrative Procedure Act, for example, dictates the procedures an agency must follow to establish a final, legally binding rule. Other statutes govern how agencies must operate internally with respect to hiring and labor practices, the maintenance of federal records, financial management, and a diverse range of other topics.
However, Congress has not provided one definition of an agency. Rather, the term "agency" can mean different things in different contexts, depending on which statute is at issue. In order to understand how different statutes operate, therefore, one must know to which entities these laws actually apply. Aside from judicial and legislative branch agencies, most agencies can be broadly divided into two general categories—executive agencies and independent agencies. The former are considered to be under direct presidential control, and the latter are designed to be comparatively more independent from the President. To ensure this level of independence, Congress often provides an independent agency with structural characteristics designed to protect it from presidential interference. This report will first examine six common indicia of independence that such agencies often have in common.
Next, the report will explore several important statutes that regulate agencies and these statutes' respective definitions of "agency." These statutes include the Administrative Procedure Act, the Freedom of Information Act, the Federal Records Act, statutes governing federal employees, and the Paperwork Reduction Act. In interpreting the reach of these statutes, courts have sometimes limited their application based on an agency's operational proximity to the President, or how much control the executive branch has over the entity.