Budget Issues: Budgeting for Federal Capital
AIMD-97-5
Published: Nov 12, 1996. Publicly Released: Nov 12, 1996.
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Highlights
Pursuant to a congressional request, GAO reviewed how the Army Corps of Engineers, the Coast Guard, the General Services Administration's Interagency Fleet Management System and Public Building Service, and the U.S. Geological Survey plan and budget for fixed assets, focusing on: (1) these agencies' perception of how the budget process affects their capital acquisitions; (2) whether there are funding mechanisms that might be helpful in planning and budgeting for fixed assets; and (3) the responses to the Office of Management and Budget's (OMB) Bulletin 94-08 on planning and budgeting for the acquisition of fixed assets.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider enabling agencies to use more flexible budgeting mechanisms that accommodate up-front funding over the longer term while providing appropriate oversight and control. For agencies having proven financial management and capital planning capabilities and relatively small and ongoing capital needs, these techniques could include revolving funds and investment components. |
Closed – Not Implemented
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In its actions on agencies' FY 1998 budgets, Congress took action consistent with this recommendation. In addition, since providing upfront funding would require more resources under the discretionary caps and no relevant cap adjustment was made in the 1997 amendments to the Budget Enforcement Act, further action on this front is unlikely. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | The Director, OMB, should continue the OMB top-level focus on fixed asset acquisitions to include working with agencies and Congress to promote flexible budgetary mechanisms that help agencies accommodate the consistent application of up-front funding requirements while maintaining opportunities for appropriate congressional oversight and control. |
Closed – Implemented
During an April 1997 GAO briefing to the OMB Federal Financial Management Controller and other OMB officials on capital planning, these officials informed GAO that OMB was continuing its top-level focus on federal capital issues and was preparing a federal capital planning guide for federal agencies that should address this recommendation. OMB stated in the fiscal year 1998 President's budget that it will work with the Congress to increase the number of projects that are fully funded with regular or advance appropriations and proposed $14.4 billion in regular and advance appropriations to fully fund capital acquisitions. In July 1997, OMB issued its Capital Programming Guide, which requires agencies to focus on fixed asset acquisitions.
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| Office of Management and Budget | As OMB continues to integrate Government Performance and Results Act requirements into the budget process, the Director, OMB, should ensure that agencies' capital plans flow from and are based upon their strategic and annual performance plans. |
Closed – Implemented
OMB's Capital Programming Guide issued in July 1997 requires agencies to link capital plans with their strategic plans required by the Government Performance and Results Act (GPRA). In the President's fiscal year 1998 budget, OMB stated that it wants capital acquisition goals incorporated into the annual performance plan called for by GPRA.
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| Office of Management and Budget | OMB should continue its efforts to ensure that cost, schedule, and performance goals are monitored as required by the Federal Acquisition Streamlining Act. |
Closed – Implemented
For the fiscal year 1998 budget, OMB Circular A-11 required agencies to submit information to OMB on their progress in meeting cost, schedule, and performance goals as required by the Federal Acquisition Streamlining Act (FASA). In the fiscal year 1998 budget, OMB stated that it plans to finalize the guidance to implement the requirements of FASA Title V within the civilian agencies and develop materials for OMB use in reviewing agency planning for new acquisitions and performance information on acquisitions in process. In July 1997, OMB issued its Capital Programming Guide containing guidance to ensure the implementation of FASA.
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Topics
Accounting proceduresAppropriation accountsBudget administrationBudget authorityCapitalCost-based budgetingFederal procurement policyInvestment planningRevolving fundsTangible assets