OMB, departments, and agencies will minimize budget restrictions such as apportionments and allotments. Congress typically divides its appropriations into more than 1,000 accounts. Committee reports specify thousands of other restrictions on using money. OMB apportions each account by quarter or year, and sometimes divides it in to sub-accounts by line-item or object class-all to control over-spending. Departmental budget offices further divide the money into allotments.
Thus, many managers find their money fenced into hundreds of separate accounts. In some agencies, they can move funds among accounts. In others, Congress or the agency limits the transfer of funds, trapping the money. When the happens, managers must spend money where they have it, not where they need it. On one military base, for example, managers had no line item to purchase snowplow equipment, but they did have a maintenance account. When the snowplow broke down they leased one. Using the maintenance account. Unfortunately, the 1-year lease cost $100,000-the same as the fully purchase price.
Such stories are a dime a dozen within the federal bureaucracy. (They may be the only government cost that is coming down.) Good managers struggle to make things work, but, trapped by absurd constraints. They are driven to waste billions of dollars every year.
Stories about the legendary end-of-the-year spending rush also abound. managers who don’t exhaust each line item at year’s end usually are told to return the excess. Typically, they get less the next time around. The result : the
well-known spending frenzy. The National Performance Review received more examples of this source of waste-in letters, in calls, and at town meetings-than any other.
Most managers know how to save 5 or 10 percent of what they spend But knowing they will get less money next year, they have little reason to save. Instead, smart managers spend every penny line item. Edwin G. Fleming, chief of the Resources Management Division of the Internal Revenue Service’s Cleveland District, put it well in a letter to the Treasury
Department’s Reinvention Team: