Back in 1985 I first became aware of the “spend it or lose it” approach to budget management. I was a 21-year old management analyst working for the Georgia State Auditor’s Office conducting a performance audit of an agency in the Governor’s office. The agency was pushing up on the end of the fiscal year and needed to spend some money. It faced a dilemma; spend some cash or send it back to the Legislature, risking the chance of not getting the money in next fiscal year’s budget.
We had to report this of course, but it struck me then that there was serious mismanagement of funds in the office or the Legislature was not getting accurate information on what was actually needed for spending in the government’s agencies.
My friends at Public Notice, a nonpartisan public policy organization in the Washington, DC area, have brought to light that the federal government, the allegedly more sophisticated and learned tier in our three-layer model of government, has not been setting a good example for combating “spend it or lose it”.
The “Flush”, that end of the fiscal year sound of cash being blown on things from the purchase of additional (and probably unneeded} software to new cameras for investigative work, is a problem that Washington has acknowledged for at least 30-years. Public Notice noted a couple current examples of the Flush including wasteful spending by the Internal Revenue Service on conferences, and e-mails documenting the concerns of an agency within the U.S. Department of Defense about spending 100% of its resources.
These continuing problems need to be addressed. Either Congress needs to take more seriously the reviews conducted by the General Accounting Office of agency programs, agencies need to hire better managers, or the roles of federal agencies need to be examined and their existences discontinued or severely diminished to better reflect the amount of funds that should be going to them. Given the sluggish economy and drop off in government revenues and receipts, maybe it’s time to do all three.