Agency discretionary budgets are on a path to drop another 10 percent in fiscal 2015.

The Office of Management and Budget’s 2015 budget guidance released Wednesday requires cuts in every agency’s lowest priority programs to equal 10 percent.

To find those areas ripe for reductions, OMB told agencies to reduce fragmentation and overlapping programs. Departments should recommend areas that should be reduced based, in part, on the Government Accountability Office’s annual report on duplication.

“We recognize that agencies will identify the most effective way to implement this request,” wrote OMB director Sylvia Burwell in a memo to agency leaders. “Your budget submission will provide the President with the options needed to make the hard choices necessary to adhere to the Budget Control Act’s discretionary funding levels, invest in priority areas, and focus on programs that work.”

Burwell said agencies should include a separate section in the request that identifies their recommended cuts or consolidations.

The guidance also instructs agencies not to include in the budget cuts due to sequestration or mandatory spending reductions. Agencies also shouldn’t include any costs that have been shifted inside or out of the agency, any reclassifications of existing spending and any new user fees to offset existing spending.

“Agencies should review their mandatory spending with the same rigor as their discretionary spending,” Burwell wrote. “Your agency should use the next several months to work with OMB to review the mandatory proposals included in the 2014 budget, identify areas for special scrutiny, and develop any new proposals prior to including them with your 2015 submission. Please note that, in general, to the extent that any new proposals are not at least budget neutral, they should be accompanied by new savings proposals to cover their costs.”

The 2015 guidance strays from the memos OMB sent out last year. In the 2014 guidance, OMB required a 5 percent cut and gave agencies the opportunity to cut and reinvest another 5 percent.

Agencies asked to updated goals

The White House also asked agencies last year to offer three reform proposals that OMB could help with either through budget, legislation or policy changes.

For 2015, OMB also told agencies to update their strategic goals by June 3 focusing on new strategies and performance goals for the next two years. An updated strategic plan is due to the White House with the 2015 budget request, Burwell wrote.

“OMB has asked agencies to establish management-focused objectives,” she said. “These management objectives should communicate agency-specific improvement priorities for management functions that are most critical to advancing the agency’s mission results and increasing effectiveness and efficiency.

The goals also should be focused around management objectives, innovation and customer service, critical mission support and other management improvement efforts, such as technology or human resources.

“Following the publication of the new strategic plans and the 2015 Budget, agencies will be expected to conduct strategic reviews of progress on each of the strategic objectives and management objectives included in the strategic plan, using a variety of sources of evidence (See OMB Circular A-11 Part 6),” Burwell wrote. “The results of these reviews will inform the formulation of the 2016 Budget and efforts to improve the impact of agency programs.”

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