How can the DoD fix the 'spend your whole budget' approach that units have?

2016-03-26T16:38:27-04:00

Many units in the Army -- and I suspect the DoD at large -- have a culture of "we need to max out our annual budget" or else. It's obvious why this happens -- you have a hard time asking for a budget increase in year 2 if you didn't spend it all in year 1. But what about wastefulness, which occurs at a huge scale in some large commands? Isn't it fair for the DoD to own the role it plays in budget cuts?

Response by MCPO Roger Collins made Mar 26 at 2016 4:46 PM

2016-03-26T16:46:29-04:00

Same way they do in the private industry, trough bonuses for budget control. You go under, bonus. You go over, no bonus. Both on a graduated basis. If you miss your budget by more than 10% either way and your budgeting skills come into question. Another, is the use of zero based budgets. You have no budget and have to prove the need for each line item.

Response by SFC Randy Purham made Mar 26 at 2016 5:12 PM

2016-03-26T17:12:12-04:00

The best way to solve wasteful spending in theses situations is have independent audits that show and justify the spending and hold Commander's at all levels accountable with forecasting needs, wants and wishes in a formalized budget proposal for subsequent fiscal years. What has been failed to be taken into account in spending is that: 1.) Objectives are not always met, so the allocation for money may not be spent. 2.) The training requirements and logistical needs will and can vary from year to year, thus requiring an actual planning session in determining what is actually needed. But we all know the level of fidelity required to accomplish this would be overwhelming for any DoD component to implement.

Response by COL Jon Thompson made Mar 26 at 2016 5:21 PM

2016-03-26T17:21:52-04:00

I believe this has everything to do with how funds are appropriated by Congress where they must be spent in that fiscal year. Thus, the "hurry up and spend" that comes in early September. I sure wish there was a way that a commander could bank the funds for use at a later day when they might need them. That would encourage savings and thriftiness. Then again, some commanders would get really cheap and probably not buy what they need now in order to save. I do believe that this is literally an act of Congress required to change it.

Response by Lt Col Private RallyPoint Member made Mar 26 at 2016 6:06 PM

2016-03-26T18:06:08-04:00

I think that applies to the entire government and the antiquated system we are under. It would make more sense to have a roll over budget and support the things we need each year. Some years we need to spend more and some less. Things like rising fuel costs ramp up a budget immensely. Then when fuel is down we have more money. I am finding an opposite trend where I work in the sense we are trying not to overspeand our budget. As a result we do not front load a lot of stuff for the first few months in order to have money to finish the fiscal year. Even when we do spend our money we are on the hook for a reduction anyway.

Response by SPC David S. made Mar 26 at 2016 7:09 PM

2016-03-26T19:09:19-04:00

I can remember going to the range and going berserk - M203, 50 cal, and much more. It was HHC at Camp Shelby many years ago. So it would seem that this has been going on for a very long time. How to fix it is rather easy - cut budgets. It will force accountability as the belt gets tightened.

Response by MAJ Ken Landgren made Mar 26 at 2016 8:32 PM

2016-03-26T20:32:34-04:00

Hold some funds in reserve, and every requirement must be generally justified, especially the expensive requirements.

Response by Sgt Aaron Kennedy, MS made Mar 26 at 2016 10:10 PM

2016-03-26T22:10:08-04:00

It's both CULTURAL and SYSTEMIC.

The issue is that as a Government Organization, there is no "reward" or incentive for coming in UNDER budget. The reward for "meeting" Budget is keeping your budget the following cycle. Coming in UNDER results in losing whatever "excess" in successive years.

As an example, you get $100 in year 1. You meet budget. Yay! No reward, no punishment. On year 2, you are generally allowed to keep that $100, and "might" be able to get an increase based on forecasted costs. However, let's say you only spend $90 in year 1. In year 2... you only get $90, because you failed to budget correctly the previous year (over-budgeting is just as bad as under-budgeting).

Unfortunately, because we are aware of the phenomena, we let it guide our decision-making processes. This leads to Waste (and Abuse).

The problem is that our auditing processes can't catch it all, and our preventive processes have "accepted" it because it without it the system grinds to a halt.

The "fix" is actually by holding more money higher and tightening the reins until deeper into the season, but this exacerbates the issue. It requires that lower-level units submit "wish lists" (horrible term, but it's apt) of needed items earlier in the cycle, which the higher echelons will burn through when they realize they have a budgetary surplus.

As an example.. take our $100 from above. Unit A can only spend $90. However Unit B has been in need of "widgets" for the last 2 years. If their HHQ is aware of that, they can "juggle" that $10 and get the widgets during "use it or lose it season" offsetting Waste.

The bigger the unit, and the more complex the organization... the harder this gets though. It will just eventually implode. It's an unsustainable model. The Auditors will eventually figure out that people were spending money on frivolous BS just to get it off the books instead of things that were actually needed.

Response by LTC Stephen C. made Mar 27 at 2016 6:51 PM

2016-03-27T18:51:58-04:00

CPT Aaron Kletzing, this has been going on forever. Here's my DOD "use our entire budget" story.
On a Friday evening in the spring/summer of 1975, I accidentally met up with my old water skiing buddy, 1LT Edward "Bo" Warren, USMC, at the Fort McClellan Officers' Club in Anniston, AL. Bo was the pilot of a UH-1N "Huey" and was flying to Lake Mitchell, AL, for the weekend on a "training mission". Early that Saturday morning, we went to Henry J. Reilly Army Airfield at Fort McClellan, jumped in his Huey and took off! We dropped the crew chief off in his (large) back yard in east Birmingham. We took off again and Bo flew us to Lake Mitchell, putting the Huey right down on the deck after we flew over Lay Dam. When we got to his parent's lake home, Bo nosed up sharply and circled over it to let his parents know he'd arrived! He then took me to Moton Field (home of the Tuskegee Airmen), Tuskegee, AL, where all my skydiving buddies came running over, hoping for a free jump. Bo took off, sans jumpers, headed to Maxwell Air Force Base in Montgomery to be met by his parents and enjoy the rest of the weekend at Lake Mitchell! Bo is pictured to the left inside the Huey in this photo.
This was common practice back then. Apparently, any Marine aviator could check out an aircraft for the weekend. The only criteria was that the aircraft had to be secured in a military facility and the crew had to report for duty on time the following Monday. The entire premise behind the training missions, of course, was to utilize the allotted fuel budget for the fiscal year.

Response by SGT David T. made Mar 28 at 2016 7:41 AM

2016-03-28T07:41:48-04:00

This is a curse of the Appropriations Act. That law sets up certain categories of funds that can only be used for certain purposes. These funds have expiration date. The one you are mainly referring to is Operations and Maintenance (O&M or OMA) which only has a one year shelf life on it. If you don't use the funds, they get returned to the treasury and most likely you will get less next year. The only way to change this is to change the law.