Army Corps shores up budget practices
Agency seeks to minimize dependence on reprogramming funds.
The Army Corps of Engineers is revamping its budget practices to reduce its heavy reliance on transferring funds among projects, the chief of the agency's civil works programs division told Government Executive Wednesday.
The Corps started to grow more dependant on reprogramming funds about three years ago because the Bush administration and Congress expected the agency to spend all its funds each year, said Gary Loew, who became chief of the division in June. The agency was not supposed to carry money over into a new fiscal year.
This resulted in district offices shifting money in order to give projects a zero balance by the time the fiscal year ended. "Reprogramming has become the Corps' routine way of managing project funds, and the Corps has used reprogramming as a substitute for an effective and fiscally prudent financial planning, management and priority-setting system for its civil works program," the Government Accountability Office said in a report last week.
For example, the Corps moved more than $2.1 billion among 7,000 projects within its investigations and construction programs during fiscal 2003 and 2004, GAO found.
The auditors' report comes as the Corps experiences a surge in reconstruction projects in the aftermath of hurricanes Katrina and Rita.
Loew said the agency and key lawmakers with oversight responsibility have known that reprogramming is a problem. "In my view, the GAO report was a good thing because it sort of lent weight to some of the things we wanted to put in place," he said.
In June, the Corps gave district offices guidance aimed at reversing the practice. Field offices no longer have to zero out their project budgets before the close of each fiscal year. They can carry over limited amounts of unspent money, funds for high-priority national projects and funds for projects that will be completed within the next fiscal year.
Loew said this change has already reduced the number of reprogramming actions across the agency by at least 30 percent. Additional guidance on reprogramming will be issued in March, he said.
"We're pretty comfortable we're on our way to a more healthy set of business practices," Loew said. "The criticisms are valid, but we think we are well on our way to having recovered."