NPR's Savings

The National Performance Review (NPR) has claimed about $137 billion in savings from its efforts to reinvent the federal government. However, this amount includes savings from agency-specific recommendations that could not be fully attributed to NPR's efforts. In general, the savings estimates GAO reviewed could not be replicated, and there was no way to substantiate the savings claimed. GAO also found that some savings were overstated because the Office of Management and Budget counted savings twice and two of the estimates were reported incorrectly, resulting in claims that were understated.

GAO noted that: (1) NPR claimed savings from agency-specific recommendations that could not be fully attributed to its efforts; (2) OMB generally did not distinguish NPR's contributions from other initiatives or factors that influenced budget reductions at the agencies GAO reviewed; (3) therefore, the relationship between the recommended action and the savings claimed from the recommendations GAO reviewed was not clear; (4) to estimate the savings from the agency-specific recommendations, OMB said it used the same types of procedures and analytic techniques that have long been used in developing the President's budget; (5) as GAO's previous reviews of budget estimates have shown, it is difficult to reconstruct the specific assumptions used and track savings for estimates produced several years ago; (6) moreover, GAO has reported that it is often impossible to isolate the impacts of particular proposals or recommendations on actual savings achieved due to the multiple factors involved; (7) OMB relied on these point-in-time estimates rather than attempting to measure actual savings; (8) OMB last updated its estimates in 1997, so any changes that have occurred since then are not reflected in NPR's claimed savings; (9) GAO identified two instances where OMB counted at least part of the estimated savings twice; (10) therefore, the total estimated savings from the Department of Agriculture (USDA) and National Aeronautics and Space Administration recommendations were overstated; (11) for one recommendation where OMB and the Congressional Budget Office (CBO) both estimated savings, GAO found that offsetting program costs may not have been fully included in OMB's estimates; (12) in estimating savings that resulted from personnel reductions at USDA, OMB and CBO considered different offsetting costs and arrived at different estimates, with CBO's estimate being $324 million less than OMB's $770 million estimate; (13) according to CBO, it assumed that severance benefits and relocation costs would reduce the potential savings, while OMB assumed that the agency could absorb those costs; (14) consistent with OMB's normal budget practices, OMB examiners generally did not retain documentation when estimating NPR savings; (15) instead, the OMB examiners attempted to reconstruct how they thought the savings had been estimated through approximating rather than replicating savings estimates; (16) OMB had documentation for two of the recommendations GAO reviewed; and (17) however, GAO found that the savings were reported incorrectly.