Continuing Resolutions
Uncertainty Limited Management Options and Increased Workload in Selected Agencies Gao ID: GAO-09-879 September 24, 2009In all but 3 of the last 30 years, Congress enacted a continuing resolution (CR) allowing federal agencies to continue operating when their regular appropriations had not been passed. CRs appropriate funds generally through rates for operations--funding formulas frequently referenced to the previous years' appropriations acts or a bill that has passed either the House or Senate--instead of a specific amount. GAO was asked to examine how CRs have changed over time, the effect CRs have had on selected agency operations, and actions that have been taken to mitigate the effects. Accordingly, GAO analyzed CR provisions enacted over the past 10 years and did a case study review of selected agencies that have considerable experience with CRs, represent different ways of providing services, and have different operational capabilities. Case study agencies were the Administration for Children and Families, Bureau of Prisons, Federal Bureau of Investigation, Food and Drug Administration, Veterans Benefits Administration, and Veterans Health Administration.
Since 1999, all agencies operated under a CR for some period of time. The CRs included 11 standard provisions that provided direction on the availability of funding and demonstrated the temporary nature of CRs. During CR periods, these standard provisions required most agencies to operate under a conservative rate of spending and imposed limitations on certain activities. However, CRs provided some agencies or programs funding or direction different from what was provided by the standard provisions, especially under longer-term CRs. These specific provisions--called legislative anomalies--may alleviate some challenges of operating during the CR period. Over the last decade, the duration of individual CRs ranged from 1 to 157 days and the CR period lasted 3 months on average. All six case study agencies reported that operating within the limitations of the CR resulted in inefficiencies. The most common inefficiencies reported were delays to certain activities, such as hiring, and repetitive work, including issuing multiple grants or contracts. Case study agencies also reported that CRs limited management options, making trade-offs more difficult. Both the limitations in planning and amount of additional work varied by agency and activity and depended in large part on the number and duration of CRs. After operating under CRs for a prolonged period, agencies faced additional challenges executing their budget in a compressed time frame. Officials from three agencies said that multiyear budget authority was helpful for managing funds in these circumstances. CRs enabled agencies to continue to carry out their missions until the irregular appropriations were enacted.
GAO-09-879, Continuing Resolutions: Uncertainty Limited Management Options and Increased Workload in Selected Agencies
This is the accessible text file for GAO report number GAO-09-879
entitled 'Continuing Resolutions: Uncertainty Limited Management
Options and Increased Workload in Selected Agencies' which was released
on October 1, 2009.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to the Ranking Member, Subcommittee on Oversight of Government
Management, the Federal Workforce, and the District of Columbia,
Committee on Homeland Security and Governmental Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
September 2009:
Continuing Resolutions:
Uncertainty Limited Management Options and Increased Workload in
Selected Agencies:
GAO-09-879:
GAO Highlights:
Highlights of GAO-09-879, a report to the Ranking Member, Subcommittee
on Oversight of Government Management, the Federal Workforce, and the
District of Columbia, Committee on Homeland Security and Governmental
Affairs, U.S. Senate.
Why GAO Did This Study:
In all but 3 of the last 30 years, Congress enacted a continuing
resolution (CR) allowing federal agencies to continue operating when
their regular appropriations had not been passed. CRs appropriate funds
generally through rates for operations”funding formulas frequently
referenced to the previous years‘ appropriations acts or a bill that
has passed either the House or Senate”instead of a specific amount. GAO
was asked to examine how CRs have changed over time, the effect CRs
have had on selected agency operations, and actions that have been
taken to mitigate the effects. Accordingly, GAO analyzed CR provisions
enacted over the past 10 years and did a case study review of selected
agencies that have considerable experience with CRs, represent
different ways of providing services, and have different operational
capabilities. Case study agencies were the Administration for Children
and Families, Bureau of Prisons, Federal Bureau of Investigation, Food
and Drug Administration, Veterans Benefits Administration, and Veterans
Health Administration.
What GAO Found:
Since 1999, all agencies operated under a CR for some period of time.
The CRs included 11 standard provisions that provided direction on the
availability of funding and demonstrated the temporary nature of CRs.
During CR periods, these standard provisions required most agencies to
operate under a conservative rate of spending and imposed limitations
on certain activities. However, CRs provided some agencies or programs
funding or direction different from what was provided by the standard
provisions, especially under longer-term CRs. These specific provisions”
called legislative anomalies”may alleviate some challenges of operating
during the CR period. Over the last decade, the duration of individual
CRs ranged from 1 to 157 days and the CR period lasted 3 months on
average (see figure).
Figure: Number and Duration of Continuing Resolutions, Fiscal Years
1999–2009:
[Refer to PDF for image: horizontal bar graph]
Fiscal year: 1999;
Continuing Resolutions: 6.
Fiscal year: 2000;
Continuing Resolutions: 7.
Fiscal year: 2001;
Continuing Resolutions: 21.
Fiscal year: 2002;
Continuing Resolutions: 8.
Fiscal year: 2003;
Continuing Resolutions: 8.
Fiscal year: 2004;
Continuing Resolutions: 5[A].
Fiscal year: 2005;
Continuing Resolutions: 3.
Fiscal year: 2006;
Continuing Resolutions: 3.
Fiscal year: 2007;
Continuing Resolutions: 4[B].
Fiscal year: 2008;
Continuing Resolutions: 4.
Fiscal year: 2009;
Continuing Resolutions: 2.
Source: GAO.
[A] The fifth CR amended the original CR with substantive provisions
but did not extend the CR period.
[B] The CR passed in February 2007 provided funding for the remainder
of the fiscal year and is not included above.
[End of figure]
All six case study agencies reported that operating within the
limitations of the CR resulted in inefficiencies. The most common
inefficiencies reported were delays to certain activities, such as
hiring, and repetitive work, including issuing multiple grants or
contracts. Case study agencies also reported that CRs limited
management options, making trade-offs more difficult. Both the
limitations in planning and amount of additional work varied by agency
and activity and depended in large part on the number and duration of
CRs. After operating under CRs for a prolonged period, agencies faced
additional challenges executing their budget in a compressed time
frame. Officials from three agencies said that multiyear budget
authority was helpful for managing funds in these circumstances. CRs
enabled agencies to continue to carry out their missions until their
regular appropriations were enacted.
What GAO Recommends:
GAO is not making any recommendations. Departments responsible for case
study agencies provided comments that were clarifying or technical in
nature and were incorporated as appropriate.
View [hyperlink, http://www.gao.gov/products/GAO-09-879] or key
components. For more information, contact Denise M. Fantone at (202)
512-6806 or fantoned@gao.gov or Susan A. Poling at (202) 512-2667 or
polings@gao.gov.
[End of section]
Contents:
Letter:
Background:
CRs Provide Interim Funding for Agencies and Programs:
Selected Agencies' Experiences Varied but All Reported That CRs Limited
Management Options and Resulted in Inefficiencies:
Concluding Observations:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Additional Information on Provisions and Funding Provided
in Continuing Resolutions:
Appendix III: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Annual Salary Increases for Federal Employees for Years in
Which the CR Extended Beyond the First Quarter:
Table 2: Appropriations Acts under a Continuing Resolution for More
than the Average of 847 Days during Fiscal Years 1999 and 2008:
Table 3: Days Case Study Agencies Operated under a CR, Fiscal Years
1999-2008:
Table 4: Standard CR Provisions:
Figures:
Figure 1: Number and Duration of CRs (Fiscal Years 1999-2009):
Figure 2: Average Annual Duration of CRs by Appropriations Subcommittee
(Fiscal Years 1999-2009):
Figure 3: Duration of Initial CR and Number of Anomalies (Fiscal Years
1999-2009):
Figure 4: FBI Streamlined Its Requisition Process during a CR:
Figure 5: Agencies Shifted Contract and Grant Cycles:
Figure 6: Practice Used to Streamline VA's Allotment Process during a
CR:
Figure 7: Fiscal Year 2005-Rate for Operations:
Figure 8: Fiscal Year 2006-Rates for Operations:
Abbreviations:
ACF: Administration for Children and Families:
AFI: Assets for Independence:
BOP: Bureau of Prisons:
CFO: Chief Financial Officers:
CR: continuing resolution:
CRS: Congressional Research Service:
DOJ: Department of Justice:
FDA: Food and Drug Administration:
FBI: Federal Bureau of Investigation:
HHS: Department of Health and Human Services:
LIHEAP: Low Income Home Energy Assistance Program:
OMB: Office of Management and Budget:
VA: Department of Veterans Affairs:
VBA: Veterans Benefits Administration:
VHA: Veterans Health Administration:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 24, 2009:
The Honorable George V. Voinovich:
Ranking Member:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
Dear Senator Voinovich:
Congress enacted continuing resolutions (CR)--that is, funding for
agencies to continue operating when their regular appropriation bills
have not been enacted before the beginning of the new fiscal year--in
all but 3 of the last 30 fiscal years.[Footnote 1] Federal departments
and agencies receive funding through regular annual appropriations
acts, and in their absence, CRs prevent a funding gap. However, they
only provide funding for the period of the CR and thereby create
uncertainty about both the timing and level of funding that ultimately
will be available. The Congressional Research Service (CRS) recently
reported on the potential impacts of CRs on agency operations. Besides
imposing some paperwork burden on agencies, CRS said that CRs may lead
agencies to reduce or delay a variety of activities and alter their
operations and spending patterns over time.[Footnote 2] However, no
systematic review has been done to identify factors that may influence
how agencies manage during CRs and what steps agencies take to mitigate
the effects of uncertainty.
In response to your request that we evaluate the effects of CRs on
federal agency operations, this report examines (1) the history and
characteristics of CRs, and (2) for selected case study agencies, how
CRs have affected agency operations and what actions have been taken to
mitigate the effects of CRs.
To accomplish the first objective, we analyzed provisions in CRs
enacted from 1999-2009. We described how they direct agencies to
operate during the period and how the provisions changed over time. We
also analyzed nonstandard provisions called legislative anomalies that
provide specific directives to particular agencies. To accomplish our
second objective, we conducted a case study review of six agencies
within three cabinet-level departments. We selected departments and
agencies based on a number of factors discussed with a panel of federal
departmental Chief Financial Officers (CFO) that we convened in
November 2008. Factors included such things as the average number of
days an agency operated under a CR between 1999 and 2008 and the way
they provide services (e.g., directly by federal personnel, through
contracts or grants to third parties, and through the use of federal
facilities).[Footnote 3] Our case study agencies were:
Department of Health and Human Services (HHS):
* Administration for Children and Families (ACF):
* Food and Drug Administration (FDA):
Department of Veterans Affairs (VA):
* Veterans Health Administration (VHA):
* Veterans Benefits Administration (VBA):
Department of Justice (DOJ):
* Bureau of Prisons (BOP):
* Federal Bureau of Investigation (FBI):
In our selected agencies, we interviewed officials from budget,
program, and procurement offices about the effects of CRs on program
delivery, management support, and revenue collection. We asked agencies
to demonstrate the effects of regular appropriations being enacted
after the start of the fiscal year--October 1st--and identify
associated costs where possible. However, it is difficult to isolate
the effects of CRs and none of the agencies said they tracked the time
or resources explicitly devoted to CRs.
We conducted this performance audit from September 2008 to September
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. For
additional details on our scope and methodology, see appendix I.
Background:
Federal departments and agencies receive funding through regular annual
appropriations acts.[Footnote 4] However, in the years covered in this
study, all appropriations acts were not enacted before the beginning of
the new fiscal year. If one or more of the regular appropriations acts
are not enacted, a funding gap may result and agencies may lack
sufficient funding to continue operations.[Footnote 5] The last such
occurrence was in fiscal year 1996 during which unusually difficult
budget negotiations led to two funding gaps with a widespread shutdown
of government operations and the furlough of an estimated 800,000
federal government employees. To prevent similar results, Congress
enacts CRs to maintain a level of service in government operations and
programs until Congress and the President reach agreement on regular
appropriations.
CRs are temporary appropriations acts. Once the regular appropriation
act is enacted it supersedes the CR. CRs generally do not specify an
amount for programs and activities but permit agencies to continue
operations at a certain "rate for operations."[Footnote 6] They
typically incorporate by reference the conditions and restrictions
contained in prior years' appropriations acts or the appropriations
bills currently under consideration.
The Office of Management and Budget (OMB) is responsible for
apportioning executive branch appropriations, including amounts made
available under CRs. An apportionment divides appropriations by
specific time periods (usually quarters), projects, activities,
objects, or combinations thereof, in part to ensure agencies have
resources throughout the fiscal year. OMB automatically apportions
amounts made available under a CR.[Footnote 7]
Duration of CRs:
The duration of CRs varied during the period covered in this study,
fiscal years 1999-2009. Figure 1 shows that the duration of individual
CRs enacted from 1999 to 2009 ranged from 1 to 157 days and the number
of CRs enacted in each year ranged from 2 to 21. The average length of
the CR period was about 3 months and in several years--fiscal years
2002-2004, 2007, and 2009--agencies' regular appropriations were not
enacted until the second quarter of the fiscal year. This figure also
shows that the duration of initial CRs was less than 1 month from 1999-
2003, but since then the duration has been about 1 month or more.
Figure 1: Number and Duration of CRs (Fiscal Years 1999-2009):
[Refer to PDF for image: horizontal bar graph]
Fiscal year: 1999;
Continuing Resolutions: 6.
Fiscal year: 2000;
Continuing Resolutions: 7.
Fiscal year: 2001;
Continuing Resolutions: 21.
Fiscal year: 2002;
Continuing Resolutions: 8.
Fiscal year: 2003;
Continuing Resolutions: 8.
Fiscal year: 2004;
Continuing Resolutions: 5[A].
Fiscal year: 2005;
Continuing Resolutions: 3.
Fiscal year: 2006;
Continuing Resolutions: 3.
Fiscal year: 2007;
Continuing Resolutions: 4[B].
Fiscal year: 2008;
Continuing Resolutions: 4.
Fiscal year: 2009;
Continuing Resolutions: 2.
Source: GAO.
[A] The fifth CR, Pub. L. 108-185, amended the original CR with
substantive provisions but did not extend the CR period.
[B] In February 2007, Congress enacted a 227-day CR that provided
funding for the remainder of the fiscal year; this CR is not included
in figure 1.
[End of figure]
Between fiscal year 1999 and 2009, most agencies operated under a CR at
the beginning of the fiscal year, uncertain if there would be
subsequent CRs and if so, how many and how long before receiving
regular appropriations. In fiscal year 2001, for example, there were 20
extensions of the initial CR, each ranging from 1 to 21 days, and the
total period when one or more agencies operated under a CR was 83 days.
There is no discernable pattern for the duration or number of
extensions and not all federal agencies are under CRs for the entire
duration. As shown in figure 2, agencies covered by the Defense,
Military Construction, and Homeland Security Appropriations
Subcommittees operated under CRs for about 1 month on average during
fiscal years 1999-2009, whereas other agencies operated under CRs for
at least 2 months on average.
Figure 2: Average Annual Duration of CRs by Appropriations Subcommittee
(Fiscal Years 1999-2009):
[Refer to PDF for image: horizontal bar graph]
Appropriations subcommittee: Homeland Security;
Average duration of CR: 21 days.
Appropriations subcommittee: Defense;
Average duration of CR: 27 days.
Appropriations subcommittee: Military Construction;
Average duration of CR: 37 days.
Appropriations subcommittee: VA;
Average duration of CR: 66 days.
Appropriations subcommittee: Legislative branch;
Average duration of CR: 67 days.
Appropriations subcommittee: Interior;
Average duration of CR: 69 days.
Appropriations subcommittee: Energy/Water;
Average duration of CR: 71 days.
Appropriations subcommittee: Agriculture;
Average duration of CR: 79 days.
Appropriations subcommittee: Housing and Urban Development;
Average duration of CR: 81 days.
Appropriations subcommittee: Transportation;
Average duration of CR: 81 days.
Appropriations subcommittee: Treasury;
Average duration of CR: 83 days.
Appropriations subcommittee: District of Columbia;
Average duration of CR: 84 days.
Appropriations subcommittee: Foreign Operations;
Average duration of CR: 88 days.
Appropriations subcommittee: State;
Average duration of CR: 89 days.
Appropriations subcommittee: Commerce/Justice;
Average duration of CR: 89 days.
Appropriations subcommittee: Labor/Health and Human Services;
Average duration of CR: 96 days.
Source: GAO.
[End of figure]
CRs Provide Interim Funding for Agencies and Programs:
During the period studied, fiscal years 1999-2009, every agency
operated under a CR for some period of time. For most, this meant
temporarily operating under a conservative rate of spending and
limitations on certain activities, as required by the standard
provisions. However, in some circumstances, Congress increased amounts
available to some programs and activities, extended authorities, or
provided greater direction than what was provided by the standard
provisions, especially in longer CRs. These specific provisions--called
legislative anomalies--may alleviate some challenges during the CR
period.
Standard Provisions Govern Most Agencies and Programs Funded under a
CR:
We identified 11 standard provisions applicable to the funding of most
agencies and programs under a CR.[Footnote 8] These provisions provide
direction regarding the availability of funding and demonstrate the
temporary nature of the legislation. For example, one standard
provision provides for an amount to be available to continue operations
at a designated rate for operations. Since fiscal year 1999, different
formulas have been enacted for determining the rate for operations
during the CR period. The amount often is based on the prior fiscal
year's funding level or the "current rate" but may also be based on a
bill that has passed either the House or Senate. Depending on the
language of the CR, different agencies operate under different rates.
[Footnote 9] The amount is available until a specified date or until
the agency's regular appropriations act is enacted, whichever is
sooner. In general, CRs prohibit new activities and projects for which
appropriations, funds, or other authority were not available in the
prior fiscal year. Also, so the agency action does not impinge upon
final funding prerogatives, agencies are directed to take only the most
limited funding actions and CRs limit the ability of an agency to
obligate all, or a large share, of its available appropriation.
Congress added two new standard provisions since 1999. At the beginning
of fiscal year 2004, Congress standardized a provision that makes
funding available under CRs to allow for entitlements and mandatory
payments funded through the regular appropriations acts to be paid at
the current fiscal year level.[Footnote 10] In 2007, Congress enacted
the furlough provision in the CR for the first time. This provision
permits OMB and other authorized government officials to apportion up
to the full amount of the rate for operations to avoid a furlough of
civilian employees. This authority may not be used until after an
agency has taken all necessary action to defer or reduce nonpersonnel-
related administrative expenses. The problem of covering salary and
personnel expenses with limited funding may be exacerbated when a CR
crosses the calendar year and a mandatory salary increase becomes
effective.[Footnote 11] For example, in fiscal year 2009, the CR
enacted a 3.9 percent pay increase for certain civilian employees to
begin on the first full pay period of the calendar year. However, the
CR did not provide additional funding beyond the enacted rates for
operations. Accordingly, most agencies were expected to cover the
salary increase and related personnel costs at fiscal year 2008 funding
levels.
Legislative Anomalies May Alleviate Some Challenges of Operating during
the CR Period:
In addition to the standard provisions, CRs contained legislative
anomalies that provided funding and authorities that were different
from the standard provisions. We identified approximately 280 anomalies
enacted in CRs since fiscal year 1999. The number of anomalies
generally increased as the duration of initial CRs increased in recent
years (see figure 3). Despite the growing number, legislative anomalies
covered a small share of the agencies, programs, and activities covered
by the CR in each year. Most agencies operated under the more
conservative funding levels and limitations provided by the standard
provisions for the duration of the CR.
Figure 3: Duration of Initial CR and Number of Anomalies (Fiscal Years
1999-2009):
[Refer to PDF for image: vertical bar and line graph]
Fiscal year: 1999
Duration of initial CR: 9 days;
Number of anomalies in initial CR: 7.
Fiscal year: 2000
Duration of initial CR: 21 days;
Number of anomalies in initial CR: 11.
Fiscal year: 2001
Duration of initial CR: 6 days;
Number of anomalies in initial CR: 8.
Fiscal year: 2002
Duration of initial CR: 16 days;
Number of anomalies in initial CR: 10.
Fiscal year: 2003
Duration of initial CR: 4 days;
Number of anomalies in initial CR: 9.
Fiscal year: 2004
Duration of initial CR: 31 days;
Number of anomalies in initial CR: 23.
Fiscal year: 2005
Duration of initial CR: 51 days;
Number of anomalies in initial CR: 25.
Fiscal year: 2006
Duration of initial CR: 49 days;
Number of anomalies in initial CR: 19.
Fiscal year: 2007
Duration of initial CR: 48 days;
Number of anomalies in initial CR: 18.
Fiscal year: 2008
Duration of initial CR: 47 days;
Number of anomalies in initial CR: 39.
Fiscal year: 2009
Duration of initial CR: 157 days;
Number of anomalies in initial CR: 60.
Source: GAO.
[End of figure]
Over two-thirds of the anomalies enacted since 1999 fell into two
categories:
* a different amount than that provided by the standard rate for
operations, and:
* extensions of expiring program authority.
Over one-third of the legislative anomalies enacted since 1999 provided
an agency, program, or activity an amount different from that provided
in the standard provisions. Programs that received a specific or
additional amount or a different rate for operations under a CR include
the decennial census, wildfire management, disaster relief, veterans
healthcare and benefits, and presidential transition activities. An
anomaly in the 2009 CR provided BOP with funding equal to the amount
requested to cover costs for the current services level in the
President's fiscal year 2009 budget request.[Footnote 12] The previous
year, BOP had received more than $296 million in supplemental
appropriations and amounts made available from other DOJ appropriation
accounts that were not included in the standard rate for operations in
the 2009 CR. According to BOP officials, the anomaly in the 2009 CR
helped ensure BOP could continue to pay salaries and expenses of the
existing staff and costs of the growing inmate population. In any one
of the years we studied prior to 2009, CRs only included up to 18
provisions that provided a different amount than what was provided in
the standard provisions. However, in 2009 over 30 such provisions were
included in the 157-day CR.
In some cases, CRs provided full-year appropriations for a program or
activity. Under these circumstances, agencies have funding certainty
during the CR period. For example, in fiscal year 2009, the CR
appropriated an amount to cover the entire year for Low Income Home
Energy Assistance Program (LIHEAP) payments. LIHEAP provides assistance
for low-income families in meeting their home energy needs and
typically 90 percent of LIHEAP funding is obligated in the first
quarter to cover winter heating costs. For several years prior to 2009,
OMB provided LIHEAP a seasonal apportionment allowing the program to
operate at a higher rate than would have been allowed under OMB's
automatic apportionment. However, by receiving a full-year
appropriation in the CR, the LIHEAP program could operate with
certainty about its final funding level making an exception
apportionment unnecessary. However, these circumstances are rare; most
federal programs and activities faced uncertainty during the CR period
about when and how much funding would be provided in their regular
appropriations.
Another large share of legislative anomalies enacted since fiscal year
1999 extended expiring authorities through the specified termination
date of the CR. The types of programs extended during the years of our
review are diverse, including the National Flood Insurance Program,
affordable housing, free lunch, and food service programs. CRs also
have extended the authority to collect and obligate fees, such as for
mining, or to collect certain copayments from veterans for medications.
The fiscal year 2008 CR, for example, included an extension of VA's
authority to collect certain amounts from veterans and third parties,
including insurance providers. If the authorization had not been
extended, VA would have had to operate with less funding.
In some cases, Congress lifted or added restrictions on the authorized
purpose for which funds could be used during the CR period or amended
other laws. Also, there have been a few legislative anomalies for
activities not funded in the prior year, such as a presidential
transition. In sum, the number and range of anomalies demonstrate that
while CRs are temporary measures, Congress has chosen to include
provisions to address specific issues.
Selected Agencies' Experiences Varied but All Reported That CRs Limited
Management Options and Resulted in Inefficiencies:
All six case study agencies reported that the most common
inefficiencies were delays to certain activities, such as hiring, and
repetitive work, including having to enter into several short-term
contracts or issuing multiple grants to the same recipient. The effects
of the delays and the amount of additional work varied by agency and by
activity and depended in large part on the number and duration of CRs.
All case study agencies reported not filling some new or existing
positions during the CR period because they were uncertain how many
positions their regular appropriation would support or to meet more
immediate funding needs during the CR period. For example, according to
FBI officials, rates for operations provided in CRs based on the
previous year's appropriations acts do not include annual pay raises,
the annualization of pay for the previous year's hiring increases, or
the increased costs of retirement, health insurance, and other employee
benefits. To cover these costs, FBI delayed filling existing positions
during CRs. In addition, officials from ACF and FDA said they were
reluctant to begin the hiring process during the CR period for fear
that the time invested would be wasted if the certificate of eligibles
listing qualified applicants expired or the agency received
insufficient funding to support the additional staff. Agency officials
said that if hiring was delayed during the CR period, it was
particularly difficult to fill positions by the end of the year after a
longer CR period. Overall, case study agency officials said that,
absent a CR, they would have hired additional staff sooner for
activities such as grant processing and oversight, food and drug
inspections, intelligence analysis, prison security, claims processing
for veterans' benefits, or general administrative tasks, such as
financial management and budget execution.
Agency officials said that given the number of variables involved, it
is difficult to quantify the effect that hiring delays related to CRs
had on specific agency activities. Agencies were also largely unable to
identify any specific foregone opportunities that may have resulted
from a delay in hiring related to CRs. However, they did describe some
general effects.
* An FDA official from the Office of Regulatory Affairs said that
deferring the hiring and training of staff during a CR affected the
agency's ability to conduct the targeted number of inspections
negotiated with FDA's product centers in areas such as food and medical
devices. Another FDA official said that routine surveillance activities
(e.g., inspections, sample collections, field examinations, etc.) are
some of the first to be affected.
* BOP officials said that deferring hiring during CRs has made it
difficult for BOP to maintain or improve the ratio of corrections
officers to inmates as the prison population increases.
* VBA officials cited missed opportunities in processing additional
benefits claims and completing other tasks. Because newly hired claims
processors require as much as 24 months of training to reach full
performance, a VBA official said that the effects of hiring delays
related to CRs are not immediate, but reduce service delivery in
subsequent years. However, VBA was able to achieve its hiring goals by
the end of the fiscal year in each of the past 4 years.[Footnote 13]
The effects of CRs on hiring at other departments as described by
departmental CFOs and others who participated in our panel discussion
were similar to those identified by officials at case study agencies.
To avoid these types of hiring delays, FBI proceeded with its hiring
activities based on a staffing plan supported by the President's Budget
during the CR period in 2009. This helped FBI avoid a backlog in hiring
later in the year and cumulatively over time. However, FBI assumed some
risk that the regular appropriation for the year would not support the
hiring plan. According to FBI officials, if the agency had not received
a regular appropriation equal to or greater than the President's fiscal
year 2009 budget request, it likely would have had to suspend hiring
for the remainder of the fiscal year and make difficult cuts to other
nonpersonnel expenses.
In addition to delays in hiring, case study agencies also reported
delaying contracts during the CR period. For example, VHA medical
facilities did not start nonrecurring maintenance projects designed to
improve and maintain the quality of VA Medical Centers (e.g., repairs
to electrical or sewage systems) but instead waited until the agency
received its regular appropriation to fund these projects. BOP reported
that it frequently postponed awarding some contracts during a CR. For
example, BOP reported delaying the activation of its Butner and Tucson
Prison facilities and two other federal prisons in 2007 during the CR
period to make $65.6 million in additional resources available for more
immediate needs. According to BOP, delays resulting from CRs
contributed to delays in the availability of additional prison capacity
at a time when prison facilities were already overcrowded. A recent BOP
study found that overcrowding is an important factor affecting the rate
of serious inmate assault.[Footnote 14] As of July 9, 2009, BOP
facilities were 37 percent over capacity systemwide.
As a result of delaying contracts during CRs, officials from BOP, VHA,
and VBA said that they sometimes had to solicit bids a second time or
have environmental, architectural, or engineering analyses redone
resulting in additional costs in time and resources for the agency.
According to BOP, delaying contract awards for new BOP prisons and
renovations to existing facilities prevented the agency from locking in
prices and resulted in higher construction costs. Based on numbers
provided by BOP, a delay in awarding a contract for the McDowell Prison
Facility resulted in about $5.4 million in additional costs. However,
in general, case study agencies were unable to provide documents
confirming cost increases resulting from a CR.
Some agency officials said that contracting delays resulting from
longer CRs have also affected their ability to fully compete and award
contracts in the limited time remaining in the fiscal year after the
agency has received its regular appropriation. Federal law and
regulations require federal contracts to be competed unless they fall
under specific exceptions to full and open competition.[Footnote 15]
Depending on the type of contract, to fully compete a contract an
agency must solicit proposals from contractors, evaluate the proposals
received, and negotiate and award the contract to the firm with the
best proposal. BOP's Field Acquisition Office, which is responsible for
acquisitions over $100,000, said that trying to complete all of its
contracts by the end of the fiscal year when a CR lasts longer than 3
to 4 months negatively affects the quality of competition.
Longer CRs also have contributed to distortions in agencies' spending,
adding to the rush to obligate funds late in the fiscal year before
they expire. For example, VHA reported that it has often delayed
contracts for nonrecurring maintenance projects, as described above,
until the agency receives its regular appropriation. Although other
factors contributed to delays, in 2006 VHA obligated 60 percent (about
$248 million) of its $424 million nonrecurring maintenance budget in
September, the last month of the fiscal year.[Footnote 16]
Officials from ACF and VHA said that, in general, most of the
discretionary grants that they award are not delayed by shorter-term
CRs because these grants are typically awarded later in the fiscal year
after the agencies have received their regular appropriation. However,
an ACF official said that lengthy CR periods--particularly those that
extend beyond mid-February, like the ones that ACF operated under in
2003 and 2009--delay discretionary grant announcements. The official
said the delay causes a shift in the grant cycles, pushing back the
application review period, which in turn pushes back the final award
date.
A longer CR period also may compress the application time available for
discretionary grants. For example, VHA reported that CR periods that
extend several months into the fiscal year have delayed notification to
nonprofit, state, or local governments of possible grant opportunities
for constructing, acquiring, or renovating housing and nursing home
care for veterans. These delays reduce the time available for potential
grant recipients to meet the program's application deadlines, which can
affect the quality of applications submitted. The application time
available for ACF's discretionary grants may also be compressed by a
longer CR. We reviewed the application times for 277 grants awarded by
four ACF discretionary grant programs between 2005 and 2008. We found
that while application times varied considerably--from 13 to 89 days--
they were on average 11 days more in fiscal years when the agency's
regular appropriation was enacted before the end of the first quarter
than when the agency's appropriation was enacted in the second quarter.
[Footnote 17] However, we could not isolate the effect on application
times that resulted from a longer CR period from other factors.
The effect of CRs on grants described by case study agencies was
consistent with what we heard from departmental CFOs and others who
participated in our panel discussion. Specifically, panel participants
said that discretionary grant awards are generally put on hold at their
departments during a CR to avoid having to solicit proposals multiple
times. If the amount of funding provided by a formula grant is based on
a certain percentage of the total amount appropriated, the grant may be
delayed until the department has received its final funding.
According to some representatives of nonprofit organizations and state
and local governments, in the past, federal grant recipients have been
able to temporarily support programs with funds from other sources
until agencies' regular appropriations are passed; however, it is more
difficult to do so during periods of economic downturn such as the one
they are currently experiencing. An ACF official told us that nonprofit
organizations providing shelter to unaccompanied alien children have
used lines of credit to bridge gaps in federal funding during a CR.
However, in March 2009, a shelter in Texas informed ACF's Office of
Refugee Resettlement that its credit was at its limit and it was in
immediate need of additional funds to sustain operations for the next
45 to 60 days. The Office of Refugee Resettlement made an emergency
grant to this organization to maintain operations with the CR funding
remaining.
In addition to the delays described above, some agency officials told
us that they delayed making program enhancements because of funding
constraints related to the CR. For example, FBI officials said that
over $440 million in enhancements to existing programs and activities
were delayed in 2009 because the CR instructs agencies to implement
only the most limited funding actions to continue operating at the
enacted rate. These include improvements to the Data Loading and
Analysis System, which FBI said was designed to improve its ability to
analyze and share data for counterterrorism, counterintelligence, and
cyber intrusion investigations.
All Case Study Agencies Reported That CRs Increased Workload:
In addition to delays, all case study agencies reported having to
perform additional work to manage within the constraints of the CR. The
most common type of additional work that agencies reported was having
to enter into new contracts or exercise contract options to reflect the
duration of the CR. Agencies often made contract awards monthly or in
direct proportion to the amount and timing of funds provided by the CR.
In other words, if a CR lasted 30 days, an agency would award a 30-day
contract for goods or services. Then, each time legislation extended
the CR, the agency would enter into another short-term contract to make
use of the newly available funding.
For example, a BOP-administered federal prison contracted for an
optometrist to provide care for the period between October 1, 2007, and
November 16, 2007, the dates of the initial CR in 2008. When the CR was
extended, the prison awarded a second contract to the optometrist
covering November 19, 2007, to December 14, 2007, and a third contract
covering December 17, 2007, to December 21, 2007, roughly corresponding
to the duration of the CRs in that fiscal year. The prison also entered
into contracts for medical services, fuel and utility purchases, and
program services such as parenting instructions in a similar manner
during CR periods. According to BOP officials, these contracts would
have been awarded for the entire fiscal year had there not been a CR.
BOP said that personnel perform this type of additional work at each of
BOP's 115 institutions to manage funds during a CR.
Other case study agencies reported similar experiences. FBI reported
that it undertakes contract actions, including renewals and options, at
a specific percentage based on the rate for operations for the period
covered by the CR. For example, during the CR in 2009 that covered 43
percent of the fiscal year, FBI said it executed no more than 40
percent of the value of contract renewals. The FBI adjusts over 7,550
purchase orders each time a CR is extended. VHA reported that to
conserve funding, the agency enters into contracts that run month to
month or the length of the CR rather than annual contracts covering the
agency's needs for the entire fiscal year. Also, VHA's 153 medical
facilities and roughly 800 clinics order supplies to maintain only the
minimum levels needed. Agency officials said that if the agencies had
received their regular appropriations at the start of the fiscal year,
they would have entered into fewer contracts for longer periods of
performance or placed purchase orders less frequently, making this
additional work unnecessary.
In general, shorter and more numerous CRs led to more repetitive work
for agencies managing contracts than longer CRs did. Numerous shorter
CRs were particularly challenging for agencies, such as VHA and BOP,
that have to maintain an inventory of food, medicine, and other
essential supplies. For example, under longer CRs--or with their
regular appropriation--BOP officials said that prison facilities
routinely contract for a 60-to 90-day supply of food. In addition to
reducing work, this allows the prison facilities to negotiate better
terms through a delivery order contract by taking advantage of
economies of scale. However, under shorter CRs, these facilities
generally limit their purchases to correspond with the length and
funding provided by the CR. Thus, the prison makes smaller, more
frequent purchases, which BOP officials said can result in increased
costs.
To reduce some of the additional work required to manage contracts in
years when there are multiple CRs, FBI changed its requisition process
to reduce the amount of work its Finance Division spends creating
requisitions for contracts when a CR is extended (see figure 4).
Figure 4: FBI Streamlined Its Requisition Process during a CR:
[REfer to PDF for image: text box]
FBI generally enters into contracts based on the rate for operations
for the period covered by the CR. Previously, each time Congress
extended a CR, FBI renewed its contracts to make use of the additional
funds that became available, and FBI's Finance Division provided a
requisition for the renewal. Under FBI's new streamlined process, at
the beginning of the fiscal year, the Finance Division commits enough
funds to cover a full-year contract, thus relieving FBI of the need to
create a new requisition for each renewal every time a CR is extended.
Source: GAO analysis.
[End of figure]
CRs had a similar effect on grant awards. Officials from ACF said that
they issue multiple grants to the same grant recipient during the CR
period instead of making annual or quarterly awards, resulting in
additional work for program managers and/or personnel in the Office of
Grants Management.[Footnote 18] For example, a Head Start official said
that if the program received its regular appropriation at the start of
the fiscal year, it would likely be able to fund more grant recipients
with a single award covering a 12-month period. However, during a CR,
Head Start receives funding based on the duration of the CR, and the
amount is usually not sufficient to fund all grant recipients for a
full year. Rather than delay any individual grants, a Head Start
official said that the program has provided some of its grant
recipients with a smaller, initial award during the CR period. Then,
once the regular appropriation was enacted, Head Start awarded an
additional grant to the same recipient, providing the remainder of
their annual funding. A Head Start official estimated that issuing an
additional grant to the same recipient could take as much as 1 hour per
award. The longer the CR period lasts, a Head Start official said, the
greater the number of grants they have to award and thus the greater
the workload increase.
We examined data from ACF's Grants Administration, Tracking and
Evaluation System. Though we could not establish a clear causal link
between CRs and specific instances where a grant recipient received
multiple awards, we found that in 2008, 185 (about 35 percent) of Head
Start Project grants administered to recipients through Head Start's 10
regional offices received a grant during the CR period and a second
grant award shortly after ACF's regular appropriation for the year was
enacted.[Footnote 19] For example, one childhood development center
received a grant for roughly $1.1 million on December 10, 2007, while
ACF was operating under a CR, and a second grant for roughly $1.7
million 51 days later, after ACF's regular appropriation was enacted.
To reduce the amount of additional work required to modify contracts
and award grants in multiple installments, two case study agencies
reported shifting contract and grant cycles to later in the fiscal year
(see figure 5). An agency's ability to shift its contract cycle depends
on a number of factors, including the type of services being acquired.
The Federal Acquisition Streamlining Act of 1994 allows agencies to
enter into 1-year contracts for severable services that cross fiscal
years, so long as the contract period does not exceed 1 year and
agencies have sufficient funds to enter into the annual contract.
Severable service contracts are for services, such as janitorial
services, that are recurring in nature. Using this contract
flexibility, an agency can shift its contract cycle so that annual
contracts for severable services are executed in the third and fourth
quarters of the fiscal year when agencies are less likely to be under a
CR.
Figure 5: Agencies Shifted Contract and Grant Cycles:
[Refer to PDF for image: text box]
Two case study agencies said they had shifted their contracts and grant
cycles later in the year to avoid having to delay awards or make
multiple, smaller awards during the CR period. FDA reported that over
the past several years it has shifted from awarding most of its
contract and grant awards at the beginning of the fiscal year to
awarding them later in the fiscal year and having them run across
fiscal years (e.g., from January to January). Similarly, an ACF
official who administers the Assets for Independence (AFI) program--
which helps low-income households save earned income in special-
purpose, matched savings accounts--said that AFI has scheduled grant
awards and new contracts in the second half of the year to reduce the
amount of administrative work that the agency performs during a CR.
Source: GAO analysis.
[End of figure]
However, some agencies' ability to shift their contract cycle to
mitigate the effects of CRs was limited. A VHA official, for example,
said that the agency's contract workload is so large that it is
difficult for the agency to delay work on certain contracts for even
short periods of time. VHA officials also said that the agency makes
acquisitions based on immediate needs identified by officials in the
field rather than centrally managing the timing of contracts.
All agencies also reported having to perform a variety of
administrative tasks multiple times that they would otherwise not have
done or would have needed to do only once had they received their
regular appropriation on October 1ST. For example, FDA reported that
CRs increased the amount of administrative work required to allot
funds. Agencies generally subdivide the funds that they are apportioned
by OMB into allotments, which are distributed to different offices and/
or programs within the agency. FDA typically makes allotments from its
total apportioned funds to each of the agency's six centers. When FDA
receives its regular appropriation, it generally makes these allotments
on a quarterly basis. But when it is operating under a CR, FDA
officials reported that the agency has made allotments for each CR.
Conversely, VBA and VHA reported that they did not allot specific
dollar amounts during a CR but rather provided guidance that all
offices operate at a certain percentage of the previous year's
appropriations (see figure 6).
Figure 6: Practice Used to Streamline VA's Allotment Process during a
CR:
[Refer to PDF for image: text box]
During a CR, VA's Central Office provides broad funding guidance to its
components, including VBA and VHA, rather than allotting funds through
its financial management system. According to agency officials, this
provides the agency with more flexibility during the CR period and
reduces the workload associated with changes in funding levels. VHA
officials said that this also allows each facility to manage its funds
to meet priorities identified at the local level. Agencies monitor the
spending levels to ensure that the amount obligated does not exceed the
funding available to each organization.
Source: GAO analysis.
[End of figure]
The types of administrative tasks affected by CRs varied by agency but
included the following:
* issuing guidance to various programs and offices;
* providing information to Congress and OMB;
* creating, disseminating, and revising spending plans; and:
* responding to questions and requests for additional funding above
what the agency allotted to different programs or offices within the
agency.
Departmental CFOs and others who participated in our panel discussion
said that CRs led to similar repetitive work activities at their
agencies.
While case study agencies all agreed that performing repetitive
activities involved additional time and resources--potentially
resulting in hundreds of hours of lost productivity--none of the
agencies reported tracking these costs. The time needed to enter into a
contract or issue a grant award may be minimal and vary depending on
the complexity of the contract or grant, but the time spent is
meaningful when multiplied across VHA's 153 medical facilities and
roughly 800 clinics, FBI's 56 field offices, BOP's 115 institutions,
and the thousands of grants and contracts awarded by our case study
agencies. VHA, for example, estimated that it awards 20,000 to 30,000
contracts a year; ACF's Head Start program awards grants to over 1,600
different recipients each year; and FBI places over 7,500 different
purchase orders a year. Some agencies provided estimates of the
additional or lost production costs at our request for selected work
activities for illustrative purposes. These estimates are based on
agency officials' rough approximations of the hours spent on specific
activities related to CRs. In the case of VHA, the estimate is based on
the number of employees performing the tasks multiplied by the average
monthly salary.
* VHA estimated that a 1-month CR results in over $1 million in lost
productivity at VA medical facilities and over $140,000 in additional
work for the agency's central contracting office. The agency operated
under a CR for more than 2 months per year on average between 1999 and
2009.
* FBI estimated that the Accounting, Budget, and Procurement Sections
spent over 600 hours in 2009 on activities related to managing during
the CR such as weekly planning meetings and monitoring agency resources
and requisitions.[Footnote 20]
* ACF estimated that approximately 80 hours of additional staff time is
spent for each CR by the ACF's Division of Budget and program offices
issuing guidance, allotting funds, creating and revising spending
tables, and performing other administrative tasks.[Footnote 21] In
addition, ACF officials estimated that issuing block grant awards
multiple times in a single quarter led to approximately 10 additional
staff days of work preparing and verifying allocations for grant
recipients and preparing the award notices for mailing.
We did not independently verify these estimates or assess their
reliability beyond a reasonableness check, which involved reviewing the
related documentation for each estimate and corroborating with related
interviews and other documents where possible. Moreover, agencies were
not able to identify specific activities that were foregone because of
the CR.
Operating under CRs for a Prolonged Period Limited Some Agencies'
Decision-making Options:
While some agency officials said that a single, long-term CR allowed
for better planning in the near term, reducing delays and the amount of
repetitive work, others said that operating under the specified rate
for operations for a prolonged period limited their decision-making
options, making trade-offs more difficult. For example, FBI officials
reported that the number of contract requests that it receives to
address emergency situations increases the longer the CR period lasts.
As a result, FBI often has to reprioritize funds from other operations
to fund these contracts, placing a strain on agency operations. Also,
agency officials said that if the agency is unable to spend its funding
on high-priority needs, such as hiring new staff, because of the
limited time available after a lengthy CR, it ultimately will spend
funds on a lower priority item that can be procured quickly.
Some agency officials said that it was difficult to implement
unexpected changes in their regular appropriations, including both
funding increases and decreases, in the limited time available after
longer CRs. For example, officials from ACF's Office of Community
Services said they made cuts to planned expenditures for training and
technical assistance in 2009 to adjust to an unexpected funding
directive for a national initiative on community economic development
training and capacity development. Officials from FBI's Criminal
Investigative Division said that while funding increases were
beneficial, receiving them in their regular appropriation after a
longer CR period limited the division's ability to review new contract
requests and make the most effective decisions. The Criminal
Investigative Division received additional funding in 2009 for mortgage
fraud investigations in its regular appropriation enacted on March 11.
According to FBI officials, the usual budget and planning cycle, which
can take several months, had be completed in just 6 weeks to meet the
deadline that FBI has established for completing all of its large
dollar contracts by the end of the fiscal year.
In addition, some agency officials reported that absorbing the
increased personnel costs in years when the CR period extends into
January creates additional challenges, particularly if personnel costs
represent a large share of their total budget. This is because most
federal civilian employees receive an annual pay adjustment effective
in January of each year. Since 1999, the CR period has extended into
January four times, and the cost of the salary increase has ranged from
1.7 percent to 4.1 percent (see table 1).
Table 1: Annual Salary Increases for Federal Employees for Years in
Which the CR Extended Beyond the First Quarter:
Fiscal year: 2003;
Percent increase: 4.1;
Date by which all regular appropriation acts were enacted: 2/20/2003.
Fiscal year: 2004;
Percent increase: 4.1;
Date by which all regular appropriation acts were enacted: 1/23/2004.
Fiscal year: 2007[A];
Percent increase: 1.7;
Date by which all regular appropriation acts were enacted: 2/15/2007.
Fiscal year: 2009;
Percent increase: 3.9;
Date by which all regular appropriation acts were enacted: 3/11/2009.
Source: Federal Register.
[A] The full-year CR enacted on February 15, 2007, provided funds to
applicable agencies for the remainder of the fiscal year and provided
50 percent of the cost of an increase in rates of pay.
[End of table]
To the extent an agency's regular appropriations were constant or
declined from the previous year, these costs would need to be absorbed
by the agency or program regardless of CRs. However, for those agencies
that ultimately receive a funding increase, absorbing the annual salary
increase may strain already tight budgets during the CR period. For
example, BOP reported that approximately 70 percent of operating
budgets at BOP institutions are devoted to personnel costs. The 3.9
percent statutory salary increase for 2009 contributed to a $7.8
million increase in payroll requirements between December 2008 and
January 2009. Departmental CFOs and others who participated in our
panel discussion said that agencies across the federal government have
to reduce funding for other needs, such as hiring and training, to pay
for statutory salary increases.
Multiyear Appropriations and Exception Apportionments When Granted
Helped Agencies Manage during CRs:
In addition to the anomalies previously described, multiyear
appropriations or exception apportionments when granted helped to
mitigate the effects of CRs at case study agencies. Officials from
three agencies that we reviewed said that having multiyear budget
authority--funds that are available for more than one fiscal year--was
helpful for managing funds in the compressed time period after regular
appropriations were enacted. For example, both VBA and VHA said that
having the authority to carry over funds into the next fiscal year has
been helpful in years with lengthy CRs because there is less pressure
to obligate all of their funds before the end of the fiscal year, thus
reducing the incentive to spend funds on lower priority items that can
be procured more quickly. FBI also has authority to carry over a
limited amount of funds into the subsequent fiscal year, and officials
from FBI's central budget office said this was helpful during a CR.
OMB has also helped agencies manage during a CR by providing more than
the automatic apportionment when justified. While OMB automatically
apportions funds to agencies based upon the lower of the percentage of
the year covered by the CR or the seasonal rate of obligations for that
same time period, OMB recognizes that some programs may need more of
their appropriation available at the beginning of the fiscal year
during a CR period. OMB will adjust the apportionment upward in some
cases, but these are rare exceptions according to OMB staff.
Two of our case study agencies--VHA and ACF--received exception
apportionments during the study period--fiscal years 1999 to 2009. OMB
apportioned funding for VHA's medical administration account to reflect
its seasonal rate of obligations during the CR period in 2008.
According to ACF officials, between 2003 and 2008, OMB also apportioned
ACF's LIHEAP funding based upon its seasonal rate of obligations during
the CR period.[Footnote 22] The exception apportionment allowed ACF to
obligate the bulk of the funds in the first quarter when heating
assistance is most needed. Officials from the remaining four case study
agencies--BOP, FBI, FDA, and VBA--said these agencies operated with the
automatically apportioned amount during CR periods since fiscal year
1999.
Concluding Observations:
The federal budget is an inherently political process in which Congress
annually faces difficult decisions on what to fund among competing
priorities and interests. CRs enable federal agencies to continue
carrying out their missions and delivering services until agreement is
reached on their regular appropriations. While not ideal, CRs continue
to be a common feature of the annual appropriations process. They
provide parties additional time for deliberation and avoid gaps in
funding. Agencies have experience managing programs within the funding
constraints and uncertainty of CRs and use methods within their
available authorities. However, there is no easy way to avoid or
completely mitigate the effects of CRs on agency operations.
The degree of difficulty that case study agencies encountered in
managing under a CR varied, but all of the agencies that we reviewed
expressed similar concerns about CRs and their effects on their ability
to carry out their work efficiently and effectively. These concerns
included the need for repetitive activities and incremental planning.
Agencies reported that CRs inhibited them from hiring staff and
providing a higher level of service than if they were operating under a
regular appropriation. When the CR period is long, the time for
planning and program execution is compressed, which can be especially
challenging when trying to implement new programs or program
enhancements. Although we cannot say that the case studies represent
the experiences of all federal agencies, there is nothing that suggests
they are atypical. Case study examples cross program types and
activities and are consistent with the views of our panel of CFOs and
other budget officials. Therefore, we believe that the experiences of
these six agencies provide useful insights for Congress about agency
operations under CRs.
Agency Comments:
We requested comments on a draft of this report from the Departments of
Health and Human Services, Justice, and Veterans Affairs. The
departments provided comments that were clarifying or technical in
nature and we incorporated them as appropriate.
As we agreed with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution of it
until 30 days from the date of this letter. At that time, we will send
copies to the Secretary of Health and Human Services, the Attorney
General, the Secretary of Veterans Affairs, and interested
congressional committees. This report will also be available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact Denise M. Fantone at (202) 512-6806 or fantoned@gao.gov or
Susan A. Poling at (202) 512-2667 or polings@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Key contributors to this report
are listed in appendix III.
Sincerely yours,
Signed by:
Denise M. Fantone:
Director, Strategic Issues:
Signed by:
Susan A. Poling:
Managing Associate General Counsel:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report are to describe:
1. the history and characteristics of continuing resolutions (CR), and:
2. for selected case study agencies, how CRs have affected agency
operations and what actions have been taken to mitigate the effects of
CRs.
Analysis of CR Provisions:
To achieve our first objective, we analyzed how provisions in CRs
enacted from fiscal years 1999-2009[Footnote 23] direct agencies to
operate during the CR period and how the provisions changed over time.
Our analysis also covered the number and type of provisions in CRs that
provided specific directives or funding levels to particular
departments, agencies, and programs for the CR period. We refer to
these provisions in the report as "legislative anomalies."
Case Study Selection:
To achieve our second objective, we conducted a case study review
analyzing the effects of CRs on select agency operations. In selecting
case study agencies, we focused on agencies with (1) extensive
experience managing under CRs to facilitate identification of key
practices and (2) a broad range of program types, service delivery
mechanisms, and operational capabilities to make the findings more
useful to agencies across government. Based on the process described
below, we selected the following departments and agencies:
Department of Health and Human Services (HHS):
* Administration for Children and Families (ACF):
* Food and Drug Administration (FDA):
Department of Veterans Affairs (VA):
* Veterans Health Administration (VHA):
* Veterans Benefits Administration (VBA):
Department of Justice (DOJ):
* Bureau of Prisons (BOP):
* Federal Bureau of Investigation (FBI):
We used a multistep process to select these departments and agencies.
We convened a panel of Chief Financial Officers (CFO) or their
representatives from major cabinet-level departments in part to help us
identify criteria for case study selection. Eleven of the 15 cabinet-
level agencies were represented in our panel, including CFOs, deputy
CFOs, and budget directors from the departments of Education, Energy,
Homeland Security, Housing and Urban Development (HUD), Interior,
Justice, Labor, State, Transportation, Treasury,[Footnote 24] and
Veterans Affairs. The panel was specifically asked to identify (1)
factors that may make it more or less difficult to manage under a CR,
(2) the activities most affected, and (3) strategies agencies use for
managing under CRs. The programs, activities, and other factors
identified by our panel that may make it more or less difficult to make
trade-offs in a CR environment were considered in our case study
selection.
To begin the selection process, we first analyzed the amount of time
departments, covered by different appropriations acts, operated under
CRs during fiscal years 1999-2008. We calculated the time between the
beginning of the fiscal year--October 1--and the date when the regular
appropriations were enacted for each appropriations subcommitee. We
then selected departments (based upon the jurisdiction of each
subcommittee) that were under a CR for more than the average of 847
days over the past 10 years (see table 2).[Footnote 25]
Table 2: Appropriations Acts under a Continuing Resolution for More
than the Average of 847 Days during Fiscal Years 1999 and 2008:
1; Appropriations act: Labor/Education/HHS;
Days under CR: 1125.
2; Appropriations act: Commerce/Justice;
Days under CR: 1044.
3; Appropriations act: State;
Days under CR: 1044.
4; Appropriations act: Foreign Operations;
Days under CR: 1034.
5; Appropriations act: District of Columbia;
Days under CR: 995.
6; Appropriations act: Treasury;
Days under CR: 977.
7; Appropriations act: Transportation;
Days under CR: 962.
8; Appropriations act: HUD;
Days under CR: 955.
9; Appropriations act: VA;
Days under CR: 955.
10; Appropriations act: Agriculture;
Days under CR: 940.
Source: GAO analysis of appropriation acts.
Notes: These numbers have been adjusted for changes in subcommittee
jurisdiction.
[End of table]
Next, we eliminated from further consideration the District of Columbia
because it receives significant amounts of funding outside of the
regular appropriations process that may have mitigated the effect of
CRs on its operations.[Footnote 26] We also eliminated the Department
of State because it received 10 percent or more of its funding from
fiscal years 1999-2006 from supplemental appropriations.[Footnote 27]
Third, to better understand the range of issues raised by CRs across
government, we examined departments within the remaining appropriations
subcommittees with the intent of selecting departments that provide
services in different ways (e.g., directly by federal personnel,
through contracts or grants to third parties, and through the use of
federal facilities). We analyzed obligations of the remaining
departments based on the following four budget object class categories
that were used as proxies for different types of service delivery:
* Personnel, Compensation, and Benefits (employee salaries and
benefits);
* Contractual Services and Supplies (rent, services, supplies and
materials);
* Grants and Fixed Charges (grants, insurance, and interest); and:
* Acquisition of Assets (equipment, land and structures, investments,
and loans).
To maximize the usefulness of each department selected for review and
to minimize any limitations of object class data, we selected
departments that appeared in the top three for more than one object
class.[Footnote 28] Based on this analysis, the following departments
were selected:
* VA (personnel, contractual services and acquisition);
* DOJ (personnel, acquisition); and:
* HHS (contractual services, grants).
Fourth, we selected two agencies for review within each of these
departments (see table 3) based on a set of criteria that were
developed in part from previous GAO work and what we heard from CFOs
and others who participated in our panel discussion. These criteria
included the number of accounts, the amount of multiyear funding,
whether the appropriation provided a lump sum, and whether the agency
had transfer authority. We also reviewed budget data to see if any of
the selected agencies received a significant amount of their resources
(defined for our purposes as 10 percent or more) from offsetting
collections, which are treated differently in the regular
appropriations process. We reviewed the 2008 appropriation acts for
selected agencies with the goal of having representation from one or
more case study agency for each of the criteria. We analyzed data at
the account level, and if more than one-half of an agency's accounts
met the criteria, then the agency was considered for review.
We focused our analysis primarily on discretionary funding because
funding for mandatory accounts occurs outside of the annual
appropriations process and therefore is not directly affected by CRs.
However, we included VBA because we sought to include at least one
agency responsible for administering mandatory benefits with
discretionary funds.
To analyze the service mechanisms that agencies use to achieve their
missions, we examined object class data, program activities, and
agencies' descriptions of their programs. If we found that one of the
service mechanisms or factors affecting an agency's flexibility in
obligating funds was not included, we examined other agencies with
large discretionary accounts in each department to see if they could
make up for the deficiency. We continued this process until we selected
agencies that covered a variety of budget flexibilities and ways to
deliver services.
Table 3 shows the agencies selected for review and how long they
operated under CRs from 1999 to 2008.
Table 3: Days Case Study Agencies Operated under a CR, Fiscal Years
1999-2008:
Case study agency: BOP and FBI;
1999: 20;
2000: 59;
2001: 81;
2002: 58;
2003: 142;
2004: 114;
2005: 68;
2006: 52;
2007[C]: 137;
2008: 86;
Average[C]: 82.
Case study agency: ACF[A];
1999: 20;
2000: 59;
2001: 81;
2002: 101;
2003: 142;
2004: 114;
2005: 68;
2006: 90;
2007[C]: 137;
2008: 86;
Average[C]: 90.
Case study agency: FDA[B];
1999: 20;
2000: 21;
2001: 27;
2002: 58;
2003: 142;
2004: 114;
2005: 68;
2006: 40;
2007[C]: 137;
2008: 86;
Average[C]: 71.
Case study agency: VBA and VHA;
1999: 20;
2000: 19;
2001: 26;
2002: 56;
2003: 142;
2004: 114;
2005: 68;
2006: 60;
2007[C]: 137;
2008: 86;
Average[C]: 73.
Case study agency: Case study average;
1999: 20;
2000: 40;
2001: 54;
2002: 68;
2003: 142;
2004: 114;
2005: 68;
2006: 61;
2007[C]: 137;
2008: 86;
Average[C]: n/a.
Source: GAO.
[A] ACF receives its annual appropriations through the Departments of
Labor, Health and Human Services, and Education, and Related Agencies
Appropriations Act.
[B] FDA receives its annual appropriations through the Agriculture,
Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act.
[C] Excludes the final CR of fiscal year 2007, which provided funding
to agencies for the remainder of the year.
[End of table]
Overall, our six case study agencies received more than $46 billion in
discretionary budget authority in 2007, accounting for approximately 10
percent of all nondefense discretionary spending. All three of our case
study departments were in the top 10 in federal contract dollars by
executive department and independent agencies in 2006, and accounted
for approximately 22 percent of all nondefense federal contract
dollars. The HHS grant portfolio is the largest in the federal
government, with approximately 60 percent of the federal government's
grant dollars.
Data Collection:
To obtain a range of perspectives, we conducted semistructured
interviews with officials at each department-level budget office, each
agency's budget office, and at least one program office in each agency.
We discussed the effects of CRs on different types of programs and
activities within these agencies. We asked agency officials to
demonstrate the effects of regular appropriations being enacted after
the start of the fiscal year and to distinguish the effects of the CR
versus other possible causes (e.g., level of funding, changes in
workload).
We provided each agency a standard request for information on budget
resources, activities associated with CRs, and planning documents among
other things. To provide illustrative examples of the types of costs
associated with CRs, we also asked for estimates of the resources
needed to perform certain activities or to provide services (e.g.,
time, average cost of staff days) associated with CRs. In one instance,
BOP provided the approximate cost of delays in awarding a contract for
a new prison facility, but overall, agencies reported that they do not
track these costs. However, they did provide their best estimates at
our request. We have not independently verified these estimates or
assessed the estimates for reliability beyond a reasonableness check
but include them for illustrative purposes. Our check involved
reviewing the related documentation for each estimate and corroborating
the estimate with related interviews and other documents where
possible.
One of the limitations of our case study analysis is that we had to
rely to a large degree on testimonial evidence because case study
agencies could not provide documentation showing the foregone
opportunities resulting from a CR. In general, agencies do not produce
planning documents--such as spending plans or monthly hiring targets--
until they have received their regular appropriations. Aside from VA,
all case study agencies have operated under a CR for each of the past
11 years and therefore could only speculate on how they would have
operated differently or more efficiently, except anecdotally. In
general, there were too many variables for agencies to isolate the
effects of CRs from other factors.
Selected case studies cannot be generalized, but similarities in agency
officials' accounts of operating under CRs suggest that there are broad-
based commonalities in the experiences of federal agencies. When
possible, we incorporated statements made by CFOs and others who
participated in our panel discussion into our case study review
questions and discussions with officials at case study agencies to
better understand whether the effects of CRs described by case study
agencies were similar to those made by our panel.
To better understand the potential effects of CRs on entities receiving
federal funding, we interviewed officials representing states and
contractors, including the National Association of State Budget
Officers, National Conference of State Legislatures, Federal Funds
Information for States, one state budget officer, the Professional
Services Council, and Logistics Management Institute Government
Consulting. In addition, ACF also provided us with information that it
received from some grant recipients regarding difficulties managing
programs during CRs.
We conducted this performance audit from September 2008 to September
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Additional Information on Provisions and Funding Provided
in Continuing Resolutions:
Since 1999, continuing resolutions (CR) have contained the same nine
standard provisions that govern most agencies, programs, and activities
covered by the CR. Two new standard provisions were added during this
time period, the appropriated entitlement provision and the furlough
restriction. These standard provisions are listed and described in
table 4.[Footnote 29]
Table 4: Standard CR Provisions:
Provision: Rate for Operations;
Description: Appropriates amounts necessary to continue projects and
activities that were conducted in the prior fiscal year at a specific
rate for operations.
Provision: Extent and Manner;
Description: Incorporates restrictions from prior year's appropriations
acts or the acts currently under consideration.
Provision: No New Starts;
Description: Amounts appropriated under a CR are not available to
initiate or resume projects or activities for which appropriations,
funds, or authority were not available during the prior fiscal year.
Provision: Coverage of CR Obligations;
Description: Appropriations made available under the CR shall remain
available to cover all properly incurred obligations and expenditures
during the CR period.
Provision: Adjustment of Accounts;
Description: Expenditures made during the CR period are to be charged
against applicable appropriations acts once they are finally enacted.
Provision: Apportionment Timing;
Description: Apportionment time requirements under 31 U.S.C. § 1513 are
suspended during the CR period but appropriations provided under a CR
must still be apportioned to comply with the Antideficiency Act and
other federal laws.
Provision: High Rate of Operations;
Description: Programs or activities with a high rate of obligation or
complete distribution of appropriations at the beginning of the prior
fiscal year shall not follow the same pattern of obligation nor should
any obligations be made that would impinge upon final funding
prerogatives.
Provision: Limited Funding Actions;
Description: Agencies are directed to implement only the most limited
funding action to continue operations at the enacted rate.
Provision: Appropriated Entitlements;
Description: Authorizes entitlements and other mandatory payments whose
budget authority was provided in the prior year appropriations acts to
continue at a rate to maintain program levels under current law (or to
operate at present year levels). Amounts available for payments due on
or about the first of each month after October are to continue to be
made 30 days after the termination date of the CR.
Provision: Furlough Restriction;
Description: Authorizes the Office of Management and Budget (OMB) and
other authorized government officials to apportion up to the full
amount of the rate for operations to avoid a furlough of civilian
employees. This authority may not be used until after an agency has
taken all necessary action to defer or reduce nonpersonnel-related
administrative expenses.
Provision: Termination Date;
Description: Date on which the CR expires. Usually based on the earlier
of a specific date or the enactment of the annual appropriations acts.
Source: GAO.
[End of table]
CRs are often described as continuing projects and activities at the
previous year's level, but this is not always the case. The amount
provided by a CR often is based on the prior fiscal year's funding
level or the "current rate" but may also be based on other documents
that reflect Congress' or the Administration's more current positions
on funding and operations of federal agencies and programs. The amount
provided is sometimes based on an appropriations bill that has passed
both the House and the Senate but has not been signed by the President
or other legislative or executive documents such as a conference report
or the President's budget request. Often the CR will enact a rate equal
to the lower of the "current rate" or not to exceed the current rate
and an amount provided for in a bill, the budget request, or some other
legislative document.
A CR will appropriate "such amounts as may be necessary" for continuing
"projects or activities" that were conducted in the previous fiscal
year at a specified rate for operations. For purposes of determining
which government programs are covered by the resolution, the term
"project or activity" refers to the total appropriation rather than the
specific project or activities as provided by the President's budget
request or a committee report. If an agency is operating at a rate
based upon the prior year's funding level, or the current rate, during
a CR period, the agency is operating within the limits of the
resolution so long as the total of obligations under the appropriation
does not exceed the level enacted in the prior year. Below we describe
the differences in the various rates for operations and other
considerations when determining the enacted rate.
Current Rate:
"Current rate" as used in a CR refers to the total amount of budget
authority that was available for obligation for a project or activity
during the fiscal year immediately prior to the one for which the CR is
enacted. In general, the current rate refers to a sum of money rather
than a program level. Thus, the amount of money available under the CR
will be limited by that rate, even though an agency's workload and
program needs may increase.
To determine the amount available under the current rate, it is
necessary to determine whether the appropriation is a 1-year, multiple-
year, or no-year appropriation. For programs and activities funded
through a 1-year appropriation in prior years, the current rate is
equal to the total funds appropriated for the program for the previous
year.[Footnote 30] In those instances in which the program has been
funded by multiple-year or no-year appropriations in prior years, the
current rate is equal to the total funds appropriated for the previous
fiscal year plus any unobligated budget authority carried over into
that year from prior years.[Footnote 31]
Rate Not Exceeding the Current Rate:
When the CR appropriates funds to continue an activity at a rate for
operations "not exceeding the current rate" or "not in excess of the
current rate" the project or activity has no more funds than it had
available for obligation in the prior fiscal year. Thus, if the
appropriation is multiple-year or no-year funding, any unobligated
balance carried over into the CR period must be deducted from the
current rate in determining the amount of funds appropriated by the CR.
If this were not done, the project or activity would be funded at a
higher level in the present year than it was in the prior year.
Other Rates for Operations:
The CR may also appropriate funds to continue a project or activity at
a rate for operations in reference to legislative documents, such as
House, Senate, or Conference Reports, or executive documents, such as
the President's budget request. Often, the CR will provide for the
possibility of several rates for operations depending upon where the
appropriations bill is in the legislative process at the beginning of
the fiscal year. In such cases, for each appropriation account, the
agency must compare the amounts referenced in the CR to determine the
enacted rate for that particular account.
The rate for operations specified in the CR, regardless of whether it
is the current rate or based on another amount in a legislative
document, is an annual amount. The continuing resolution, whether
lasting 1 day or 1 month, appropriates this full amount. As such, an
agency may legally follow any pattern of obligating funds, so long as
it is operating under a plan which enables continuation of activities
through the fiscal year within the limits of that annual amount and is
consistent with other provisions of the CR.[Footnote 32] Under this
principle, when operating under a CR which appropriates funds at the
current rate, an agency is not necessarily limited to incurring
obligations at the same rate it incurred them in the corresponding time
period of the preceding year. Instead the pattern must reflect an
operation that could continue activities for the fiscal year at the
limits of the amounts appropriated in the previous year. OMB's
apportionment of the appropriation will also affect the availability of
the appropriation for obligation.
Determining the Amounts Available for Operations:
Because the rate for operations changes from year to year, it is
necessary to examine the language of the CR very carefully to identify
the formula that has been provided for determining amounts available
during the CR period. It may be necessary to examine documents other
than the CR itself. Often, different appropriations accounts will be
operating at different rates depending upon the status of the
appropriations bill. The following two examples illustrate different
rates for operations enacted in the standard provisions during the last
10 years.
Figure 7: Fiscal Year 2005-Rate for Operations:
[Refer to PDF for image: text box]
SEC. 101. Such amounts as may be necessary under the authority and
conditions provided in the applicable appropriations Act for fiscal
year 2004 for continuing projects or activities including the costs of
direct loans and loan guarantees (not otherwise specifically provided
for in this joint resolution) which were conducted in fiscal year 2004,
at a rate for operations not exceeding the current rate, and for which
appropriations, funds, or other authority was made available in the
following appropriations Acts: [List of annual appropriations acts for
fiscal year 2004].
Source: Pub. L. 108-309.
[End of figure]
Figure 8: Fiscal Year 2006-Rates for Operations:
[Refer to PDF for image: text box]
SEC. 101. (a) Such amounts as may be necessary under the authority and
conditions provided in the applicable appropriations Act for fiscal
year 2005 for continuing projects or activities (including the costs of
direct loans and loan guarantees) that are not otherwise specifically
provided for in this joint resolution, that were conducted in fiscal
year 2005, and for which appropriations, funds, or other authority
would be available in the following appropriations Acts: [List of
proposed fiscal year 2006 acts]; (b) Whenever the amount that would be
made available or the authority that would be granted for a project or
activity under an Act listed in subsection (a) as passed by the House
of Representatives as of October 1, 2005, is the same as the amount or
authority that would be available or granted under the same or other
pertinent Act as passed by the Senate as of October 1, 2005;
(1) the project or activity shall be continued at a rate for operations
not exceeding the current rate or the rate permitted by the actions of
the House and the Senate, whichever is lower, and under the authority
and conditions provided in applicable appropriations Acts for fiscal
year 2005; or;
(2) if no amount or authority is made available or granted for the
project or activity by the actions of the House and the Senate, the
project or activity shall not be continued.
Source: Pub. L. 108-309.
[End of figure]
In figure 7, all appropriations listed in section 101 would operate at
the rate for operations not exceeding the current rate. In figure 8, a
project or activity may operate at the lower of either the rate for
operations not exceeding the current rate or the rate based upon the
amounts provided by the House and Senate bills passed before October 1,
2005. So, for example, if bills passed by the House and Senate included
the same amount for an activity in fiscal year 2006, the agency would
have to compare the amounts passed by the House and Senate with the
current rate. If the House and Senate amount is lower, the agency will
continue the project or activity at a rate based upon that amount. If
the current rate is lower, the project and activities will continue at
a rate for operations not exceeding the current rate. Also, in 2006, if
the bills passed by the House and Senate provided no amount for the
project or activity, the project or activity would not continue (rate
for operations is zero).
OMB Apportionment Guidance:
OMB issues apportionment guidance directing agencies how to calculate
the amount of funds available to obligate and spend during the CR
period. OMB automatically apportions these amounts. The formula used to
determine the apportionment has generally remained the same since
fiscal year 1999. To better preserve Congress' and the President's
final funding prerogatives, the apportionment is equal to the
annualized amount (or rate) for each appropriation account funded by
the CR multiplied by the lower of:
* the percentage of the year covered by the CR, or:
* the historical seasonal rate of obligations for the period of the
year covered by the CR.
For example, assume an agency's annualized amount for an appropriation
account was $100 million. If the initial CR period was 36 days or 10
percent of the fiscal year and the agency's rate of obligations during
the first 10 percent of the fiscal year was 25 percent of its annual
appropriations, then the automatic apportionment for that appropriation
account would be $10 million during the CR period because the amount
based on the percentage of the year is lower than the seasonal rate. If
the rate of obligations was 5 percent, the automatic apportionment
would be $5 million for the CR period.
While the automatic apportionment formula has remained the same over
the last 10 years, the calculation of the annualized amount will change
depending on the rate for operations provided by the CR and other
provisions.
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Denise M. Fantone, (202) 512-6806 or fantoned@gao.gov Susan A. Poling,
(202) 512-2667 or polings@gao.gov:
Acknowledgments:
In addition to the contacts named above, Carol Henn, Assistant
Director; Julie Matta, Assistant General Counsel; Melissa Wolf, Analyst-
in-Charge; Sheila Rajabiun, Senior Attorney; Aglae Cantave; Juan
Cristiani; Felicia Lopez; and Tom McCabe made key contributions to this
report. Leah Querimit Nash, Albert Sim, and Jessica Thomsen also
contributed.
[End of section]
Footnotes:
[1] Appropriations were enacted on time in fiscal years 1989, 1995, and
1997. See Congressional Research Service, Duration of Continuing
Resolutions in Recent Years (Washington, D.C.: Mar. 9, 2009) for more
information on the history of CRs.
[2] See Congressional Research Service, Interim Continuing Resolutions
(CRs): Potential Impacts on Agency Operations (Washington, D.C.: Oct.
6, 2008).
[3] Appendix I contains more information on how we selected agencies
for review.
[4] Fundamental to Congress' constitutional spending power is that
federal programs may only expend federal funds to the extent
appropriated by an act of Congress. For a discussion and history of the
congressional "power of the purse" see GAO, Principles of Federal
Appropriations Law, 3 ed., vol. 1, ch. 1 [hyperlink,
http://www.gao.gov/products/GAO-04-261SP], January 2004.
[5] The Antideficiency Act generally restricts agencies from continuing
operations during a funding gap.
[6] The rate for operations has varied over time and may be based on
such things as the previous year's appropriation, an amount provided in
a House or Senate bill, or the amount requested in the President's
budget submission. See appendix II for more information.
[7] The apportionment is equal to the annualized amount (or rate) for
each appropriation account funded by the CR multiplied by the lower of
the percentage of the year covered by the CR, or the historical
seasonal rate of obligations for the period of the year covered by the
CR. An agency may request a different amount than what is automatically
apportioned, i.e., an exception apportionment, but according to OMB
staff, OMB rarely approves exception apportionments. We discuss OMB
guidance in appendix II.
[8] The standard provisions are listed in appendix II.
[9] See appendix II for an explanation of the differences in the
various rates for operations.
[10] Mandatory programs, such as Social Security, that are funded
through permanent, indefinite appropriations are not subject to the
annual appropriations process. However, under programs such as Food
Stamps, Medicaid, and certain VA programs, beneficiaries who meet
eligibility criteria are entitled to certain payments or other benefits
under federal law and funding is provided through the annual
appropriations process.
[11] The rates of pay for most executive branch civilian and foreign
service employees increase at the beginning of the new calendar year
pursuant to statute. 5 U.S.C. §§ 5303 - 5304a.
[12] Current services estimates are based on the continuation of
existing levels of service.
[13] VBA operated under a CR for almost 3 months on average in fiscal
years 2005-2008 but 43 days into the CR period in fiscal year 2008 it
received funding above the current rate.
[14] Department of Justice, Federal Bureau of Prisons, The Effects of
Changing Crowding, and Staffing Levels in Federal Prisons on Inmate
Violence Rates (Washington, D.C.: 2005).
[15] Competition in Contracting Act of 1984, Pub. L. No. 98-369; 48
C.F.R. § 6.101(b).
[16] See GAO, Department of Veterans Affairs' Lack of Timely and
Accurate Information on Unexpended Balances Limits Effective Management
and Congressional Oversight, [hyperlink,
http://www.gao.gov/products/GAO-07-410R] (Washington, D.C.: May 16,
2007). Congress added language to VA's 2009 appropriation act
prohibiting it from obligating more than 20 percent of nonrecurring
maintenance funds in the last 2 months of the fiscal year.
[17] The four grants were Administration for Native Americans Social
and Economic Development grants, Head Start grants (including Early
Head Start), Transitional Living, and Unaccompanied Alien Children
Services grants.
[18] ACF was selected for case study review in part because of the
volume of grants the agency awards. For more information on case study
selection, see appendix I. FDA and VHA also award a small number of
grants but did not report issuing multiple grants to the same recipient
because of a CR.
[19] CRs are not the only reason that Head Start made multiple grant
awards to the same recipients.
[20] This time estimate does not include the additional work that
personnel perform modifying contracts.
[21] This time estimate does not include the additional work required
to issue multiple grants.
[22] In the first CR of 2009, LIHEAP received a legislative anomaly
providing a full-year appropriation for fiscal year 2009.
[23] This time period was chosen to capture recent experiences under a
range of circumstances, such as years when different parties were in
control of Congress; different administrations; and election and
nonelection years.
[24] The Department of Treasury was represented by an official from the
Internal Revenue Service.
[25] Currently, Congress considers 12 regular appropriations acts
organized around one or more major departments. The number and
jurisdiction of appropriations subcommittees changed overtime.
Adjustments were made to account for the changes.
[26] The District of Columbia and activities related to the city's
government received a substantial portion of funding from nonfederal
sources, such as local taxes.
[27] Based on data from GAO, Supplemental Appropriations: Opportunities
Exist to Increase Transparency and Provide Additional Controls,
[hyperlink, http://www.gao.gov/products/GAO-08-314] (Washington, D.C.:
Jan. 31, 2008).
[28] This analysis was based on 2007 data. We limited our analysis to
the top three in each category. Lower ranking departments (i.e., fourth
and fifth) for each object class represent a much smaller portion of
budget authority relative to other units of the federal government.
[29] For a broader discussion of CRs, see GAO, Federal Principles of
Appropriations Law, vol. 2, ch. 8, [hyperlink,
http://www.gao.gov/products/GAO-06-382SP], February 2006.
[30] Amounts transferred into the appropriation account as required by
statute are included in the current rate. Transferred amounts pursuant
to discretionary transfer authority are not included in the
determination of the current rate. B-308773, Jan. 11, 2007.
[31] Amounts provided in supplemental acts will be included in the
amount unless it is clear from the language of the CR or the
supplemental legislation that such amounts were not to be considered in
the current rate. For example, in fiscal year 2009, the CR stated that
the amounts enacted in certain emergency supplemental appropriations
acts were not to be included when determining the rate for operations.
[32] The obligation patterns during the CR period must also follow
other provisions in the legislation. As discussed previously, standard
provisions provide direction about how agencies should manage
expenditures during the CR period.
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO‘s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO‘s Web site,
[hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
