Army Corps of Engineers:

Budget Formulation Process Emphasizes Agencywide Priorities, but Transparency of Budget Presentation Could Be Improved

GAO-10-453: Published: Apr 2, 2010. Publicly Released: Apr 2, 2010.

Additional Materials:

Contact:

Michelle A. Sager
(202) 512-4997
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The U.S. Army Corps of Engineers (Corps) is the world's largest public engineering, design, and construction management agency. In fiscal year 2006 it began incorporating performance information into its budget process, but Congress raised concerns that the criteria used by the Corps to prioritize projects are not transparent and the budget formulation process could achieve a higher return on investment. GAO was asked to (1) describe the information the Corps uses in its budget formulation process and the implications of the process, and (2) evaluate whether the President's recent budget requests for the Corps are presented so that agency priorities are clear and proposed use of funds transparent. GAO reviewed the Corps' internal budget guidance, documentation of its project rankings and budget formulation process, performance review materials, and budget presentation materials. GAO also interviewed Corps and Office of Management and Budget officials.

With the introduction of performance-based budgeting in fiscal year 2006, the Corps began emphasizing projects with the highest anticipated returns on investment. Previously, Corps division officials sought to provide continued funding to all ongoing projects that fit within administration guidelines. Now, under the current process, Corps headquarters plays an increased role in selecting projects, and evaluates projects using certain performance metrics. The Corps gives priority to those projects with the highest anticipated returns for the economy and the environment, as well as those that reduce risk to human life. The Corps' use of performance metrics makes projects in certain geographic areas more likely to be included in the budget request. For example, the benefit-cost ratio, a measure of economic benefit that is used to rank certain projects, tends to favor areas with high property values. Another effect of the Corps' use of performance-based budgeting is that fewer construction and investigation projects--studies to determine whether the Corps should initiate construction projects--have been included in the budget request in recent years. In contrast, the number of projects in the Operation and Maintenance account has been relatively stable, which Corps officials attributed partially to its emphasis on routine activities. While the metrics used by the Corps in its budget formulation process focus on anticipated benefits, the Corps monitors the progress of ongoing projects through review boards at the headquarters, division, and district levels. However, the Corps does not have written guidance establishing a process for incorporating information on demonstrated performance, such as review board findings, into budget formulation decisions. In the absence of such a process, the Corps may miss opportunities to make the best use of this performance information. The budget presentation for the Corps lacks transparency on key elements of the budget request. It focuses on requested construction and investigations projects, but does not describe how the decisions made during the budget formulation process affected the budget request. For example, the budget presentation does not include an explanation of the relative priority given to project categories or how they are evaluated against each other. Also, while the number of construction and investigations projects receiving appropriations is typically much greater than the number requested, the budget presentation does not include detailed information on all projects with continuing resource needs. The budget presentation also lacks detail on the amount of the balance of unobligated appropriations (carryover) that remain available for each project. Users of the budget presentation told GAO that these two types of project information would be useful.

Recommendations for Executive Action

  1. Status: Open

    Comments: We have reached out to Corps officials and are awaiting a response from them about any actions they have taken in response to this recommendation. As of September 24, 2014, Corps staff said they expect to send us a memo with details on status of the recommendations in the very near future.

    Recommendation: To ensure that all relevant information is considered during the budget formulation process, the Secretary of Defense should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to establish a documented process to incorporate assessments of ongoing project performance, such as information from review boards, into the budget formulation process.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: According to an Army Corps of Engineers Budget official, the Corps included in the budget presentation a new criteria section, which explains how business lines are prioritized within the accounts. We have reached out to Corps officials and are awaiting further information from them in order to determine whether these actions are sufficient to close the recommendation. As of September 24, 2014, Corps staff said they expect to send us a memo with details on status of the recommendations in the very near future.

    Recommendation: To improve the transparency and usefulness of the Corps' budget presentation to Congress, building on the information the appropriators have requested the Corps provide, the Secretary of Defense should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to work with OMB and Congress to include in the annual budget presentation for the Corps summary-level information on how the budget request reflects decisions made across project categories, business lines, and accounts.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: According to an Army Corps of Engineers Budget official, and as demonstrated by the budget justification, the Corps has continued to include information on the projects in its O&M account.

    Recommendation: To improve the transparency and usefulness of the Corps' budget presentation to Congress, building on the information the appropriators have requested the Corps provide, the Secretary of Defense should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to work with OMB and Congress to continue to include in the annual budget presentation for the Corps project-level details for the Operation and Maintenance (O&M) account, including an explanation of how the requested funding for each project will be used.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: We have reached out to Corps officials and are awaiting information from them about any actions they have taken to address this recommendation. As of September 24, 2014, Corps staff said they expect to send us a memo with details on status of the recommendations in the very near future.

    Recommendation: To improve the transparency and usefulness of the Corps' budget presentation to Congress, building on the information the appropriators have requested the Corps provide, the Secretary of Defense should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to work with OMB and Congress to provide project-level information on all projects with continuing resource needs, either as part of the budget presentation or as supplementary information.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: The Corps included information on each project's estimated carryover balance in the budget justification for the fiscal year 2013 budget request. As such, it has implemented this recommendation.

    Recommendation: To improve the transparency and usefulness of the Corps' budget presentation to Congress, building on the information the appropriators have requested the Corps provide, the Secretary of Defense should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to work with OMB and Congress to, as a supplement to the budget presentation, provide Congress with information on the estimated carryover of unobligated appropriations that remain available for each project.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Nov 25, 2014

Jul 29, 2014

Jul 18, 2014

Jun 23, 2014

Jun 17, 2014

Jun 12, 2014

Jun 10, 2014

May 28, 2014

Mar 27, 2014

Looking for more? Browse all our products here