Stop The Fiscal Year Spending Orgy

3 ways to bring accountability to federal agencies.

by Gretchen Hamel: Call it "Christmas in September." Just as children eagerly count down the days until the holiday, government contractors are counting the days until the end of the federal fiscal year on Sept. 30.

While America debates a war in Syria and the federal debt limit, government agencies are putting the final touches on a year-end spending spree. That means big paydays for those who supply information technology, computer equipment and other pricey items. But those big paydays also mean squandered taxpayer dollars as agencies rush to buy what they might not need.

The operative phrase is "spend it or lose it." Here's how it works: In the final weeks of the fiscal year (which runs Oct. 1 to Sept. 30) Washington bureaucrats hastily make purchases and execute contracts to burn through excess funds.

Why? Because if they don't spend their entire budget allotment, congressional appropriators might slash their budgets in subsequent years.

And for every government buyer, plenty of contractors and lobbyists stand ready to help with the spending splurge. Washington trade publications are filled with articles offering advice to businesses that want to hop on the federal spending gravy train by taking advantage of the year-end spending spree.

Spread across hundreds of government agencies, the waste adds up to billions. Big spenders such as the Pentagon drive the annual rush to beat the fiscal deadline.

This summer, as furloughs were set to begin, officials at a Defense Department agency sent an e-mail to colleagues urging them to burn through their budgets. Meeting spending deadlines was "critical in our efforts to (spend) 100% of our available resources this fiscal year," the e-mail said.

The companies that feed on the gusher of cash that still flows from our government are quite open about their activities. "We believe it's going to be a feeding frenzy," Chris Romani, president of Integrity Management Consulting, told Federal News Radio. "We looked at the funding profiles of our target agencies ... and we see that they have a lot of mission needs and a lot of unobligated funds."

The radio station reported in July that "vendors may be rethinking August vacations in order to handle what many expect to be one of the busiest end-of-the-federal fiscal year buying sprees in recent memory."

Though it might be tempting to blame the profligacy of the Bush and Obama administrations, the practice has been common in government spending for decades, earning bipartisan critiques. In fact, "spend it or lose it" came under critical attention from the Government Accountability Office in a 1980 report, 33 years ago. Since then, the problem has grown.

If we are to have any hope of curbing Washington's spending addiction, our elected officials need to reform this wasteful practice. How do we bring accountability to federal agencies? As a starting point, Congress and President Obama should take the following three actions:

Roll it over. Allowing agencies to roll over uncommitted budget funds to the next fiscal year, without losing the funds, would eliminate the incentive to spend before the Sept. 30 deadline. In fact, the Obama administration offered just such a proposal in 2010, suggesting that agencies be allowed to roll over a portion of their unused budgets, with the remaining portion being committed to deficit reduction. This is a worthy reform that Congress should take up.

Make it transparent. When it comes to tracking federal agency spending, the reality can be murky. Developing government-wide standards for online reporting would allow taxpayers and watchdogs to track agency budgets and foster greater accountability. The House of Representatives passed legislation in the last Congress to do just that, but the White House and Senate opposed it. That leaves online reporting at USASpending.gov without the high quality, consistent data that would expose spending problems.

Increase oversight. Inspectors general in federal agencies are important guarantors of accountability. Unfortunately, the Obama administration has been slow to fill these crucial watchdog positions. In at least five federal departments — including some of the largest Cabinet agencies — the IG post was vacant 18 months to more than five years. Despite recent nominations to oversee State and Defense, other agencies still lack a permanent IG or even a pending nominee to fill the post. The president should make a priority of filling these posts.

With a national debt of $17 trillion and sluggish economic growth, the fiscal picture for the United States looks grim. And as the administration and federal agencies raise the alarm over sequester-related worker furloughs, they turn a blind eye to the wasteful spending right in front of them — or worse, encourage it. That's why it's important that Washington act to restore a sense of accountability and responsibility to the stewardship of taxpayer dollars.

Putting a stop to this broken way of budgeting by ending "spend it or lose it" is an excellent place to start.
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Gretchen Hamel is executive director of Public Notice. She shared this article with the ARRA News Service. It was first published on US Today.

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