Debt-Flicks: The Town

July 11, 2013

Debt-Flicks: The Town

With budget cuts and furloughs going into effect, you’d think the government is doing all it can to save money, right? Wrong! Rather than cutting down on spending, government agencies, such as the Defense Information Systems Agency (DISA), are actually encouraging their offices to spend all of the money allotted to them, all before the fiscal year comes to an end. The spend-it-or-lose-it mentality is as popular as ever in Washington, and now that we’re in the fourth quarter, you can be sure the wasteful expenditures are just getting started.

 

“SPEND THE MONEY! SPEND IT ALL! SPEND IT NOW!”

The Washington Post: “Spend The Money! Spend It All! Spend It Now!” (Al Kamen, “Defense Agency Looking For Ways To Spend,” The Washington Post, 7/10/13)

It’s “Critical” For DISA To Spend All Of Its Allotted Funds For The Fiscal Year. “’Our available funding balances remain large in all appropriations — too large to spend’ just on small supplemental funds often required by existing contracts, the June 27 e-mail said. DISA’s budget is $2 billion. ‘It is critical in our efforts to [spend] 100% of our available resources this fiscal year,’ said the e-mail from budget officer Sannadean Sims and procurement officer Kathleen Miller. ‘It is also imperative that your organization meets its projected spending goal for June. . .’” (Al Kamen, “Defense Agency Looking For Ways To Spend,” The Washington Post, 7/10/13)

Emails Encouraging Spending Are “Common Practice Among Government Agencies.” “A DISA spokesperson e-mailed to say that these e-mails are ‘common practice among government agencies’ and that many congressional “financial and procurement timelines . . .are designed to ensure that agencies” spend 80 percent of their funds before the last two months of the fiscal year, or by August 1.” (Al Kamen, “Defense Agency Looking For Ways To Spend,” The Washington Post, 7/10/13)

 

Contradicts Statements From September 2012 Memo:

Spending Money To Avoid Future Budget Reductions Is “Not The Way To Go.” “…It also appears to contradict a September 2012 memo from the Pentagon’s undersecretary for acquisition Frank Kendall, and comptroller Robert Hall, who urged that ‘spending money primarily to avoid reductions in future budget[s]’ is not the way to go. ‘The threat that funding will be taken away or that future budgets can be reduced unless funds are obligated on schedule,’ they wrote, ‘is a strong and perverse motivator.’” (Al Kamen, “Defense Agency Looking For Ways To Spend,” The Washington Post, 7/10/13)

 

SPEND-IT-OR-LOSE-IT POLICIES DESTROY INCENTIVE FOR EFFICIENCY

“Today’s Acquisition System Often Penalizes Program Managers Who Don’t Spend Every Last Dime Of Their Budget Before The End Of The Fiscal Year.” ”Today’s acquisition system often penalizes program managers who don’t spend every last dime of their budget before the end of the fiscal year. If you don’t spend all of the money allocated, Congress will likely appropriate less for your program next year. And presiding over a shrinking program is not a recipe for career advancement.” (Michele A. Flournoy, “The Smart-Shopping Way To Cut Defense Spending,” The Wall Street Journal, 7/7/13)

Imagine A World In Which Program Managers Were Evaluated On Whether Or Not They Could Meet Program Milestones While Saving Taxpayer Dollars.” “Imagine a world in which program managers were evaluated on whether or not they could meet program milestones while saving taxpayer dollars. Those who found more cost-effective ways to manage their programs would receive awards and accelerated promotions. This would be one important step toward creating a more cost-conscious Pentagon culture.” (Michele A. Flournoy, “The Smart-Shopping Way To Cut Defense Spending,” The Wall Street Journal, 7/7/13)

 

AND DISA ISN’T ALONE IN ITS SPEND-IT-OR-LOSE-IT HABITS

IRS Division Managers Defend Spending Because Unused Funds Would Have Lapsed: “The [IG] report found IRS officials paid thousands of dollars to pay motivational speakers, who were flown to the conference on the taxpayer dime, sometimes in first class. … The funds came from a $132.7 million pool that division received to hire about 1,300 employees. Division managers told TIGTA that they actually made over 1,500 hires during that fiscal year, the majority of which were front-line employee.  But since the hires had not been on board for the full year, the division had unused funds that would have lapsed at the close of fiscal 2010.” (Peter Schroeder and Bernie Becker, “IG report finds broad, wasteful spending on IRS conferences,” The Hill, 6/5/13)

 

Acting IRS Commissioner Calls “Spend It Or Lose It” A “Major Problem”: 

Rep. Jackie Speier (D-Calif.): “You’ve worked at OMB before, so you’ve seen this phenomenon before. It’s something I’m very concerned about; which is, as various federal agencies come to the end of the fiscal year, and they have money left in accounts, they want to spend it down because there’s fear that if they don’t spend it down, they will not be fully funded in the subsequent year. Is that correct?”

Acting IRS Commissioner Danny Werfel: “That is a major problem.”

Spierer

(Click Here To View)

 

AND WASHINGTON JUST HAS ONE QUESTION …

Rep. Jose Serrano (D-NY):  “Are You Sure You Don’t Want Any More Money?” (Rep. Jose Serrano, “Financial Services and General Oversight Hearing on the IRS,” House Committee on Appropriations, 6/3/13)

 

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