Agency discretionary budgets saw a drop in new money by about 12 percent between 2010 and 2015. Some agencies such as the departments of Commerce, Housing and Urban Development and Defense faced an even bigger decrease ranging between 15 percent-to-35 percent.
The Congressional Budget Office says the continued drop in new discretionary spending could put it at lowest percentage of the nation’s Gross Domestic Product in 2021 than at any time in the last 50 years.
“The amount of actual reductions or increases in discretionary resources for individual agencies and programs is determined through the annual appropriations process, in which policymakers make choices between competing national priorities,” wrote the Government Accountability Office in a report issued Dec. 20.
GAO analysts looked at three agencies to see how they dealt with this decrease to help inform others as future discretionary spending is expected to continue to decline.
GAO reviewed the budget and planning documents and talked to officials at the Environmental Protection Agency, the Federal Law Enforcement Training Center in the Homeland Security Department, and the Employment and Training Administration in the Labor Department.
Auditors said the agencies all experienced a decline of at least 9 percent in newly appropriated discretionary resources from fiscal year 2010 to 2015.
GAO applied its framework to understand the issues agencies face as resources decline, and how best to overcome these challenges. GAO says the framework relies on documents, interviews with budget experts, including academics, Office of Management and Budget staff, agency CFOs, former congressional staff and a forum of experienced budget experts.
“[T]he selected agencies that we reviewed took a number of actions to continue carrying out their respective missions that aligned with our framework. These actions mitigated service disruptions and offer illustrative examples that may help other agencies address their own budget challenges. It is difficult to isolate the effects of budget reductions on the programs from other factors, including overall program management, and even more difficult to know what the direct consequences are for individuals, businesses and states and localities,” GAO wrote. “Reduced timeliness and service levels for some programs indicate that agencies may need to take additional actions to manage their budgetary resources. Building and maintaining a longer-term focus on managing declining resources can help agencies’ top management ensure that they continue to maintain the capacity to address emerging challenges and achieve their mission.”
GAO found three common themes among EPA, FLETC and ETA:
Senior leaders from all three agencies played an active role in managing the decrease in funding.
The use of advanced data analytics showed senior leaders and mission owners the path to “doing more with less.”
All three implemented short and long-term strategies to save money and reduce the impact of the budget challenges.
The role of top management
GAO says agency leaders need to clearly define and communicate the priorities for guiding budget reductions.
“Top management should also reexamine the agency’s core mission. For example, they may want to reexamine programs and organizational structures to determine if the current environment still warrants continuing certain programs and activities,” GAO wrote. “Top management should also consult with Congress and involved stakeholders and take into consideration how budget decisions align with congressional goals, constituent needs, and industry concerns.”
At EPA, for example, executives offered a buyout or early out for employees while also developing an agencywide workforce planning exercise to identify skill gaps.
ETA leaders worked with the Office of Personnel Management to do a study of the Office of Foreign Labor Certification’s workforce, workload and work processes to identify challenges and potential strategies for improvement.
OPM found OFLC is understaffed by 73 employees and needed to restructure its organization to deal with budget reductions better. ETA told GAO that as of June 2016 it had implemented phase 1 of the project and is in the middle of phase 2 that includes cross-training of federal and contractor workforce at each of its three national processing centers.
Data driven decisions
GAO found agencies who analyzed workforce, spending, mission and back-office data could find efficiencies.
“As a part of this, agencies may want to consider using data analytics to set specific cost-savings goals and monitor progress toward achieving those goals,” the report stated. “Agencies should also connect performance information to the budget. Linking strategic goals with related long-term and annual performance goals and with the costs of specific activities that contribute to those goals can help provide a basis for informed tradeoff decisions.”
FLETC used data to determine if a virtual firearm simulation was just as good, better or worse than using live ammunition for law enforcement officers. The agency found the differences between virtual and live firing range were minimal and it could save some money by using a computer simulated range for some students.
EPA implemented the Lean Six Sigma process to evaluate agency efforts, looking for opportunities to be more efficient and effective.
In 2015, EPA applied the Lean Six Sigma approach to the Office of Pesticide Programs’ product label system and reduced the time it took to post information from 16 days to 1 day.
Short and long-term strategies
GAO says there are several approaches to finding and implementing efficiencies, including asking employees for input, expanding the use of shared services and reducing the cost of real property.
“Balancing these strategies can provide agencies with the flexibility to weigh short-term needs and make adjustments towards achieving their long-term goals,” the report stated. “Selected agencies reported taking short-term actions aimed at immediate cost savings. Selected agencies also reported implementing a broad range of long-term strategies to avoid costs, such as reducing their real estate footprint and strategically sourcing goods and services.”
EPA consolidated mobile device and print management contracts and saved $1.7 million in fiscal 2014.
ETA’s Office of Foreign Labor Certification reduced its office space and increased telework options for its employees to save more than $245,000.
FLETC also reviewed its service contracts by making a priority list of what they were buying. For example, the agency reduced its contractor workforce providing IT service desk support, consolidated security guard services and returned unused leased vehicles to the General Services Administration.
FLETC says it saved or avoided spending $7.9 million in 2014 because of these changes.