Budgeting for Inflation in Selected Civil Accounts

Pursuant to a congressional request, GAO identified those major civil appropriation accounts where inflation projections are applied in order to determine: (1) the inflation guidance used; (2) projected and actual inflation; and (3) the amount of funds appropriated for inflation that did not occur. GAO analyzed the potential for excess funding in the Departments of Energy, Transportation, and the Interior and the Veterans Administration.

GAO found that: (1) for several agencies, it was unable to obtain sufficient information to analyze inflation practices; (2) use of the Office of Management and Budget's inflation guidelines varied among and within the agencies studied; (3) unless an agency provides a specific line item for inflation in its budget documents, the amount it requests for inflation in any given account cannot be identified; and (4) Congress usually does not identify the amount it appropriates for inflation. In addition, GAO found that: (1) the potential overfunding for inflation in selected accounts at the four agencies totalled about $1 billion for fiscal years 1982 through 1985; and (2) this amount represents less than 2 percent of the total budget authority adjusted for inflation. GAO noted that its figures represent only its estimate of potential overfunding for inflation rather than actual overfunding.