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Government Leader home > Jan/Feb 2006 issue



Hurry up and spend

By Jason Miller

How to manage a 10-month budget year

For the first time since 2001, Congress completed the appropriations process without its little helper—the omnibus appropriations bill. The Interior Depart-ment and related agencies even received their 2006 appropriations before the Sept. 30 end of fiscal 2005.

But many agencies had to wait two months or more into the federal year before Congress managed to come to terms with how they dole out money. While this delay is more typical than early finishes, there still are some important considerations managers must make both before Congress finishes its work and shortly afterward.

Once lawmakers finish their work, agencies usually have to squish 12 months of spending into nine or 10 months. The delay causes federal managers to juggle a lot of moving pieces, including political and programmatic priorities.

Here are some best practices from current and former federal officials, including chief financial officers, agency budget directors, CIOs and senior procurement executives, on ways to manage the shortened budget year.

SPEND 12 MONTHS OF MONEY IN 12 MONTHS. If you monitor your budget throughout the process, you should have a pretty good idea of how much money Congress likely will earmark for your agency or program. With that knowledge, you can start spending money on existing programs with little reservation. The biggest problem is when the House and Senate numbers are wildly different. Then, experts caution, you have to tread lightly. The shorter budget season be a real issue only for new programs, some experts say. Additionally, during the continuing resolution, you should do a lot of planning for contracts so when the Congress finishes and the Office of Management and Budget releases the money, the chief financial officer, and the budget and acquisition offices are ready to go.

THE CONTINUING RESOLUTION IS YOUR FRIEND. Don’t look at the CR as a limit on what you can do, but as Congress’ way of telling you that your work should go on as normal. While new programs are stagnated by CRs, ongoing ones aren’t usually affected. In fact, many experts say budget officers and CFOs should work with OMB and lawmakers creatively to fulfill their business needs. That might mean negotiating with OMB to get an interpretation of how much steady-state funding you would need. Or it may mean taking advantage of the loopholes Congress purposely puts into the CR so agencies can—within reason—spend money on what they need.

STAGGER YOUR STARTING TIMES. This goes for hiring employees and contractors, since salaries and contracts are the largest expense for every agency. But when agencies are without a budget or under a CR, they go into a hiring freeze. One way to avoid the stops and starts is to spread out your hiring process. Experts say that, since it can take up to six months to hire a federal employee, the process should be done with the budget slowdown in mind.

As for contracts, experts suggest making awards in the middle of the fiscal year so you don’t run out of money for upgrades or changes when needed. Also, make sure the contractors understand the challenges associated with the federal budget process.

ANTICIPATE A CUT. Even after Congress finalizes your budget, there usually is a rescission of up to 1 percent. This is important to keep in mind, experts say, while you are spending next year’s money under the CR. While you don’t have to be overly cautious, it is important not to spend so much that you get caught short on funds after the rescission. One CFO said his agency would provide program managers with interim spending guidelines to project the closest possible level of spending and include the possibility of a cut.

ANYONE FOR A TWO-YEAR BUDGET CYCLE? This idea has been kicked around for decades and it would mollify many of the challenges. It’s tough to imagine Congress accepting such an idea, but heck, there’s no harm in dreaming.





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