OMB's Study of Decentralization of Federal Governmental Functions

The Office of Management and Budget made a study of the possibility of relocating Federal functions from the District of Columbia and the surrounding area. GAO was asked to review the scope and accuracy of the study, the planned use of the study, and the President's authority to decentralize Federal functions without congressional approval. The scope of the President's authority to transfer personnel, positions, and functions of executive agencies from the District of Columbia to other parts of the country without additional statutory authority or specific congressional approval has never been clearly resolved. However, Congress could control executive decentralization actions in several ways.

The most significant result of the OMB study was its fair, objective, well-balanced, and informative discussion of the various types of costs, benefits, and other factors associated with decentralization. OMB used a survey approach to develop information on decentralization possibilities. Thus although the study provides some indication of the range of functions and the number of employees that might be considered for relocation from the National Capital Region, this information is less precise than if a detailed review had been made. The OMB report recognizes that decentralizations are very costly because of the high cost of relocating employees and because of the substantial amounts of program costs due to work disruptions and lowered productivity, personal cost to employees, and economic and environmental costs to affected communities. GAO estimates that relocating civilian employees for the functions identified by OMB as decentralization candidates could cost the Government as much as $62 million. This does not include the cost of relocating the 2,611 military personnel attached to some of these functions. Case studies of recent relocations show that the socioeconomic impacts of relocations on affected employees tend to be most severe on minorities, women, and employees in the lower grades. It should not be assumed that all functions listed in the OMB report as decentralization candidates will be decentralized. The costs and benefits of each proposed relocation should be thoroughly considered before any decision to decentralize a function is made.