Budget authority is the authority provided by law to enter into obligations which will result in outlays of government funds. In the Department of Defense (DOD), budget authority is used to enter into contracts with defense contractors. DOD unobligated balances of budget authority for military activities grew from $12.8 billion to $34.5 billion during fiscal years 1972 through 1976.
Matter for Congressional Consideration
|Congress should: (1) require that DOD provide historical and projected obligation rates and analyses of variances between estimated and actual rates in its budget requests; (2) give greater attention to the significant balances of budget authority carried over from year to year; (3) review the Office of Management and Budget's plan to strengthen analysis of DOD obligations; and (4) monitor the implementation of the practice of treating extensions of unobligated balances as new budget authority.||When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.|
Recommendations for Executive Action
|Office of Management and Budget||The Director of the Office of Management and Budget should monitor the obligation rates reflected in the DOD obligation projections with a view toward identifying possible misestimates, getting changes made, and developing guidelines concerning estimating procedures.|
|Department of Defense||The Secretary of Defense should make certain that improvements in internal reporting provide for the systematic identification of amounts which have become excess to program funding requirements and that new policies and procedures provide for closer monitoring of obligation projections.|