Year-End SpendingReforms Underway But Better Reporting and Oversight Needed Gao ID: AIMD-98-185 July 31, 1998
In fiscal year 1980, the Senate Subcommittee on Oversight of Government Management held hearings and issued a report, Hurry-Up Spending, to address problems with federal spending practices and the award of government contracts. The Subcommittee found that the rush to obligate expiring funds before the end of the fiscal year often resulted in a lack of competition, poorly defined statements of work, inadequately negotiated contracts, and the procurement of low-priority items or services. This report outlines steps taken to correct these management weaknesses. GAO also provides quarterly obligation data for federal agencies to determine if fourth quarter obligations were higher than obligations in earlier quarters of the fiscal year.
GAO noted that: (1) changes in the budget environment and procurement reforms have affected the opportunity and need to obligate funds quickly at yearend; (2) agencies spend far less today than they did in 1980 on providing goods and services directly, as payments to individual beneficiaries and grants to state and local governments have increased; (3) this trend, combined with limits on discretionary spending, has significantly changed the budget environment for most agencies; (4) at the same time, Congress has made funds available for longer periods for many agencies, which reduces the pressure to spend funds at the end of each year; (5) in addition, systemic procurement reforms addressed most of the issues raised in the Subcommittee on Oversight of Government Management, Senate Committee on Governmental Affairs' report although problems persist in certain agencies and with some procurements; (6) GAO's work and that of others indicates that today, there are more safeguards against unplanned yearend spending and, in most discretionary programs, fewer resources available for low-priority purchases than in 1980; (7) despite these changes, it is difficult to assess the patterns of spending during the year because reported quarterly budget execution data are not reliable; (8) without complete and timely information for oversight, the Office of Management and Budget (OMB) and other decisionmakers do not have an accurate assessment of the financial status of federal programs during the year; (9) even at yearend, there are significant differences in three comparable sets of data that agencies report to OMB and the Department of the Treasury; (10) although OMB officials stated that a new system they have built jointly with Treasury to collect yearend data starting in FY 1999 should resolve or greatly alleviate the differences in yearend budget data, more work is needed to assure compliance with the requirement for quarterly data; and (11) agencies' failure to report and reconcile budget execution information mirrors broader financial management problems found in GAO's financial audit of the FY 1997 Consolidated Financial Statements of the United States government.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Team: Phone: