Employee relocation costs estimated at more than $4 billion

A draft of an Office of Management and Budget report reveals that the Defense Department's four service branches spent about $3.4 billion in fiscal 2003 relocating 706,000 workers. The rest of the government spent about $655 million on 22,000 relocations.

OMB produced the report after requesting data from agencies on how much they spend on employee relocation. OMB Senior Program Examiner Jack Kelly spoke about the figures Wednesday during a meeting of the Governmentwide Relocation Advisory Board.

OMB asked for budget data for fiscal 2003 through 2006 and the number of relocations authorized and completed, among other things. Responding to the request were 160 government entities, including each Cabinet department, their major subsidiaries and independent agencies such as the General Services Administration and NASA.

At the urging of Senate Finance Committee Chairman Charles Grassley, R-Iowa, OMB and GSA have been trying to get agencies to track their relocation expenditures, but that has been difficult.

A mandated biennial Federal Travel and Relocation report from GSA to OMB was not released last fall because the data from the agencies was flawed and inaccurate, sources said. Kelly said OMB's budget data request is an attempt to obtain the information that would have been in that report.

Agency response to the request varied, according to Kelly. Some agencies did not provide budget projections; others, such as the State Department, counted authorized relocations but not completed ones.

The average cost per relocation in fiscal 2003 was about $29,000, and rose to $37,000 in fiscal 2004, according to the report. Senate Finance Committee staffers had previously estimated that moving a federal employee cost more than $100,000 and sometimes as much as $250,000.

The report found that 7,378 relocations were managed by relocation companies in fiscal 2003 at a cost of $177 million. Agencies spent $138.7 million on home sale programs.

After home sales, home buying assistance was the second highest relocation expense, followed by household goods transportation.

The advisory board is made up of government and private industry representatives and is preparing to recommend changes to the federal relocation rules.