Funding of the Office of Management and Budget's Initiatives
GAO-05-420: Published: Apr 25, 2005. Publicly Released: May 25, 2005.
In accordance with the President's Management Agenda, the Office of Management and Budget (OMB) has sponsored initiatives to promote electronic government--the use of information technology, such as Web-based Internet applications, to enhance government services. Generally, these "e-gov" initiatives do not have direct appropriations but depend on a variety of funding sources, including monetary contributions from participating agencies. GAO was asked to review the funding of e-gov initiatives that relied on such contributions: specifically, to determine, for fiscal years 2003 and 2004, whether agencies made contributions in the amounts planned and to determine the timing of these contributions.
Most federal agencies contributed funds as originally planned by the managing partners of the 10 initiatives that relied on such contributions in fiscal years 2003 and 2004. Nevertheless, 6 of the 10 initiatives experienced shortfalls from their funding plans in fiscal year 2003 and 9 in 2004. The rationale provided by agencies for contributions that were less than planned included: (1) substitution of in-kind resources in lieu of funds, (2) lack of budget guidance from OMB reflecting planned funding amounts, (3) inability to obtain permission to reprogram funds from other accounts, and (4) organizational realignments associated with creation of the Department of Homeland Security in fiscal year 2003. For example, the e-Rulemaking initiative (managed by the Environmental Protection Agency) received only 51 percent of its planned fiscal year 2004 contributions. Although the initiative's funding plan called for adding new funding partners in that year, OMB did not reflect this expansion when it issued its annual budget guidance to agencies. As a result, the newly added agencies generally did not contribute. According to E-Rulemaking officials, the resulting shortfall in funds, along with delays in receiving funds from other agencies, required them to significantly scale back their plans. In most cases, fiscal year 2003 and 2004 contributions from partner agencies were made in the third and fourth quarters of the fiscal year. Agency officials identified the administrative burden associated with drafting, negotiating, and signing interagency agreements, as well as the delayed enactment of the fiscal year 2003-2004 appropriations bills, as contributing to this timing of contributions. However, according to officials from several agencies, although the administrative burden is still high, agencies have become more accustomed to funding strategies based on partner agency contributions.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: In April 2005 we reported that although agencies generally contributed amounts as planned to OMB-sponsored e-government initiatives, shortfalls nevertheless occurred. These shortfalls occurred in part because of a lack of budget guidance from OMB reflecting the original planned amounts. For example, an error by OMB that assessed the Department of Energy the same amount as the Department of Education (the two departments have similar abbreviations) for the Integrated Acquisition Environment initiative resulted in nearly a $10 million dollar shortfall over fiscal years 2003 and 2004. Accordingly, we recommended that OMB take steps to ensure that its budget guidance to partner agencies correctly reflects the funding plans of each of the initiatives that rely on funding contributions. In response to our recommendation, OMB has taken steps to ensure budget guidance accurately reflects funding plans by expanding the length of the process for determining agency allocations for various projects, thus allowing more time for potential errors to be identified and resolved. Therefore, OMB believes it is less likely that errors will occur and agencies will have adequate time and opportunity to seek any corrections as needed. By taking this action, OMB decreases the risk of errors in budget guidance that could result in e-government initiatives falling short of planned funding.
Recommendation: In order to avoid errors and to better assist the managing partner agencies in obtaining funds to execute the OMB-sponsored e-gov initiatives, the Director of OMB should take steps to ensure that OMB's budget guidance to partner agencies correctly reflects the funding plans of each of the initiatives that rely on funding contributions.
Agency Affected: Executive Office of the President: Office of Management and Budget