Managing Government Funds

As kids we were beyond ecstatic when we heard that extra change jingling around in our piggy banks. We may have used the extra cash to treat ourselves, but the main goal was to keep as much money in the piggy bank as we could, for as long as possible.

Unfortunately, government doesn’t function in the same manner. Unused funds are not always carried over into the next fiscal year. In the end, too much unobligated funds can really be damaging.

Susan Irving, Director for Federal Budget Analysis in the Strategic Issues Team at the U.S. Government Accountability Office (GAO), sat down with Christopher Dorobek on the DorobekINISDER to discuss GAO’s report titled 2013 Sequestration and Shutdown: Selected Agencies Generally Managed Unobligated Balances in Reviewed Accounts, but Balances Exceeded Target Levels in Two Accounts.

 The report looked at four agencies with eight accounts ranging from 2007 to 2013 since the budget committee in the House of Representatives was interested at looking to see if “this was money they could take back or if this was money agencies are managing well for continuity of their operations,” Irving said.

Irving looked at the State Department’s Consular Affairs and Western Area Power Administration (WAPA); both had issues with excess unobligated funds. “For several years, their balances have exceeded the target they identified as being the right appropriate amount: 25%,” Irving stated.

The report found an overall strong need for “more effective management of unobligated balances” in both accounts. Therefore, Irving recommended agencies to look at “what your goals for the account(s) are, what’s this supporting, and what does this mean you should set aside.” Ask yourselves “what do I need from year to year to manage this program well and how do I make the best use of the money I’ve been given?”

Which is why there is a need to think both in the short and long-term.

“The fact that everybody is excellent at managing under short tem continuing resolutions doesn’t make you think that’s the ideal way to fund government. I actually don’t know any member of Congress who thinks it’s an ideal way,” Irving said. This type of strategic long-term thinking can only be done effectively if there is a proper management system in place.

Managing funds appropriately is a must. “I think what is so good about managing money is that it, in turn, assures Congress that not all the money siting in carryover balances is extra money nobody needs,” Irving commented. In other words, it can help provide detailed references of how the money allocated is needed for the agency to fulfill its mission/objective.

Lastly, there is a need for accountability of funds, even the unobligated ones. “You should be asking about your balance, because even when resources you thought were plentiful aren’t, you want to be able to assure both Congress and the public that you are, in fact, paying attention to how you manage the money that government has allowed you to use,” Irving said. Accountability should therefore, come from within the agency so as to ensure trust is maintained at all levels of government and their respective constituents.

Proper allocation of funds is a serious business. Usage of those government funds is crucial to the overall well-being of the system. Otherwise, we may face a potential shutdown again.