Federal Downsizing: The Administration's Management of Workforce Reductions

GAO discussed the status of workforce reductions mandated by the Federal Workforce Restructuring Act of 1994, focusing on: (1) the Administration's compliance with the act; (2) the targets of workforce downsizing; and (3) how workforce reductions are being managed. GAO noted that: (1) the act requires the federal government to reduce its workforce by 272,900 full-time equivalent (FTE) positions between 1993 and 1999; (2) the act allows non-defense agencies to pay buyouts to employees who agree to resign, retire, or take voluntary early retirement by March 31, 1995; (3) the Office of Management and Budget (OMB) conducts quarterly reviews of agency FTE usage to determine if agencies are likely to meet their fiscal year FTE targets; (4) the Administration anticipates falling below the annual mandated FTE ceiling through fiscal year (FY) 1996; (5) although some savings are expected from large workforce reductions, agencies use these savings to meet their overall discretionary spending caps; (6) if some work is contracted out to private companies as a result of workforce reductions, the contracting costs would reduce any net savings from those reductions; (7) although 34,000 FTE positions are to be eliminated from the Department of Defense in FY 1995, some agencies are expected to increase in size during this period of downsizing; (8) both OMB and the Office of Personnel Management have provided guidance to agencies on how to achieve workforce reductions; and (9) additional reductions in force may be necessary at some agencies as a result of the National Performance Review.