Ways To Reduce the Federal Budget Through Improved Government Financial Management Practices

Gao ID: 114565 March 5, 1981

If certain Government-wide financial management practices and processes were revised, improved, or eliminated, a monetary savings to the Government would result. These savings could be obtained through: (1) better debt management; (2) resolving billions in audit findings; (3) replacement of old, inefficient computers; (4) productivity improvements in administering programs; (5) improving Federal travel management; (6) closer controls on foreign military sales; (7) interest subsidies on water programs; (8) more competitive contracting; and (9) eliminating excessive cash withdrawals by grantees, contractors, and other recipients of Federal funds. Debts owed the Federal Government are enormous and growing each year. In general, there are two basic reasons why debt collection in the Government has not kept pace with the increasing number of debts. First, many agencies have not aggressively attempted to collect amounts owed to the Government. Second, present collection methods are expensive, slow, and ineffective when compared with commercial practices. The Government continues to lose billions of dollars because agencies are not acting on audit recommendations to recover funds, avoid costs, and improve operations. Obsolete equipment tends to hamper efficient operation of Government agencies. New computers are less costly to run and to maintain because fewer people are required, less energy is consumed, and less floor space is necessary. Since administrative operations are required to run all Federal programs, improved productivity in these operations is essential. Travel costs can be reduced through improvements in travel management. Fare discounts, auditing of the travel function, better reporting of past travel expenditures, improved budgeting for future travel, tighter management control over travel authorization, and greater accountability of managers for errors are all viable methods for reducing Federal Government costs in the area of travel. The failure by the Department of Defense to implement systems adequate to identify and recover costs for goods and services provided to foreign countries under the foreign military sales program costs the Government millions each year. In all areas of waste, basic management functions must be improved for savings to result.

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