Fiscal year 2015 began 65 days ago, but the Federal government still does not have an FY2015 budget. Yet again, agencies have gone through one sixth of the year with no idea how much money they will have for the year. Yes – we have a continuing resolution (CR), but agencies are severely restricted by a CR. The Congressional Research Service published an excellent 2010 paper on the effects of a CR. Those effects make good management a challenge, if not an outright impossibility. In a recent speech covered by the Washington Post, Deputy Defense Secretary Robert Work said ““This is the fifth time in five years that Congress has been unable to do their basic business: pass a budget on time so that we can plan.”
Inability to plan is only one of the outcomes of a CR, but it is a big one. How does an agency make any kind of execution plans when they have no idea how much money will be appropriated when Congress finally passes a budget (or a full year CR)? We often hear people complaining that political and career leaders in government do not manage effectively and are not good planners, with the annual end-of-year much to spend money put forward as evidence. I have to challenge that complaint. They are not allowed to manage their budgets. When an agency has no idea what its budget will be, even months into the year, they cannot make the kind of budget decisions and tradeoffs that would allow them to run the agency’s business the way a reasonable person would. How can an agency make decisions regarding the number of permanent staff they will have, or contracts they will award, when the budget is up in the air? The situation is made worse by the apportionment of the annual budget that is required by a CR. An agency that expects to get $12 billion in the full year will most likely get $1 billion per month during a CR. That means contracts that may not be awarded if the agency cannot obligate enough money to cover them.
The spending rush at the end of the year has been driven in large part in recent years by the budget mess. Take this year as an example. If we end up with a budget by the end of the calendar year, a quarter of the fiscal year will already have passed. Agencies will get top line budget numbers, followed by detailed numbers weeks later. By the time those numbers filter down through the agency hierarchies, we will probably be in February or March. Only then can agencies make final decisions on such matters as hiring and contracting. Once they have their dollars for the year, they can make hiring decisions. We know how long the hiring process takes. We also know how long the contracting process takes. An agency that does not know its budget until February or March is most likely going to be awarding contracts in the summer or fall. And then they will be at the end of the fiscal year and getting berated for spending too much money in the last quarter.
We can beat up agencies for the timing of their spending, but there will be no end to that practice until we get back to starting the fiscal year with a budget. When that happens and the waiting game ends, we can hold agencies accountable for their planning and spending schedules. Until then, we all get to wait.