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Wednesday, March 16, 2011

FedCFO Opinion - Don't Perpetuate the Problem, Fix the Budget and Appropriations Process!

The federal budgeting and appropriations process is broken. Annual appropriations are rarely passed by congress and signed into law in advance of their effective fiscal year as designed. This leads to redundant and unnecessary cycles of reviews and revisions by all stakeholders perpetuating the inefficient process into following years and suppressing the ability of program managers to achieve the desired results of their programs.

The 2011 budget is just one example (this year’s) of this broken process. Currently, the President and OMB, the U.S. House of Representatives, and the U.S. Senate are in a heated debate to resolve the political differences in opinion on the appropriations language that is to govern the current fiscal year spending which began October 1, 2010 and ends September 30, 2009. We are nearly half way through the fiscal year in which the appropriation applies. At the same time, the President’s 2012 budget has been submitted to congress for next fiscal year which begins October 1, 2011. Meanwhile, the departments, agencies, bureaus, and commissions that are funded by these eventual appropriations are already hard at work developing budgets for FY2013 without the benefit of guidance and direction derived from the current fiscal year’s appropriation (there isn’t one) nor feedback from the review of the FY2012 budget by congress because they haven’t gotten to it yet. Federal program managers, similarly, are unable to manage their current fiscal year initiatives with any certainty of when funds will become available nor at what level. New initiatives planned for FY2011 are being delayed over and over and will likely not begin until FY2012 - and only then when (if) their appropriation is signed into law. This cycle is almost certain to repeat itself next year as congress is already way behind schedule to review, negotiate, and approve the FY2012 budget because they continue to spend all of their cycles on negotiating the current FY2011 budget. Managing the government by continuing resolution is not an appropriate solution.

Lawmakers, the administration, and program managers would all benefit from an entirely different and more strategic budgeting process in which priorities are established and aligned with the tenure and terms in office of the leadership that will be accountable for the results achieved. At a minimum, two year budgeting is necessary to provide the needed time for congressional review and approval of the president’s budget submissions. A longer four year budgeting process would allow a president to establish priorities for an entire term in office and would redirect the administration’s efforts from budgeting toward managing performance. Annual performance reviews and decision points could be built into the process to provide the necessary congressional oversight and tools for re-prioritization based on current realities that would not require the same amount of overhead expended in an annual budgeting process. Obviously, these types of changes would require significant legislative and possibly constitutional changes to become a reality. However, an investment by congress and the administration of their time to fix the process is much better than expending their time to keep a broken process the reality.

-Doug Davidson, FedCFO.com

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