Military Budgets and "Topping-Off" units

PO1 Private RallyPoint Member — Mon, 13 Oct 2014 13:22:55 -0400

So, here's a thought.

Military budgets (at the Unit level, not the overall, over-arching "MILITARY BUDGET"). We're "forced" to dump money at the end of every fiscal year (FY), in order to retain the same level of funding we had the previous FY. The WHOLE YEAR, we can't hardly buy crap. "That costs too much. We don't need that. Don't get it. Funding is tight. Blah, blah, blah, blah, blah." Come 15AUG (or thereabouts), it's, "HOLY CRAP!!! GET YOUR OPEN-PURCHASE REQUESTS IN BY 05SEP!!!! BUY WHATEVER YOU THINK YOU MIGHT NEED!!! WE HAVE $250k TO BLOW THROUGH!!"

Sooooooooo, the whooooooole rest of the year, you wouldn't let us buy, say, clipboards and pencils, because funding was tight. Excuse me, "tight". But now, NOW you want us to buy useless crap like $150 knives, or $20 ear plugs to blow through the $250k so we don't lose funding next FY? Don't get me wrong; I appreciate a good, solid knife as much as the next guy. But let's look at this objectively, and not idiotically.

Units X, Y, and Z all get $4m for FY15, say.

Units X and Y spend $3m buying things as they need them, and then figure out there is nothing else that they've needed. They have $1m to "dump" in order to get the same level of funding the next year, so they buy stuff like Camel-Baks and $300 boots for everyone. Oh, and multi-tools. EVERYONE needs a cool multi-tool, especially the desk jockeys and geardos.

Unit Z has higher costs, and spends the $4m on what they need, but are still short funds.

As I understand it, under the current system, because they are "different pots of money", the surplus from Units X and Y can NOT be used to help Unit Z. Unit Z can request for a larger appropriation of funds, but that's about it. They have legitimately run out of funds, while X and Y just plowed through their excesses like a fat kid through an all-you-can-eat-for-$1 buffet.

So, here comes FY16. Because X and Y managed to blow off all their funding the previous FY, they get what they spent during FY15. $4m apiece, even though they only REALLY needed $3m. UNit Z's request for larger appropriations went through, so now they're set at $6m.

It has cost $8m to bring Units X and Y back to their budget, and $6m to bring Z to theirs, a $2m increase of the previous FY. Oddly, Units X and Y just threw $2m at whatever, JUST TO KEEP that same $4m budget when they only effectively utilized $3m.

If Units X and Y had just spent what they needed, they'd have lost funding. So, to prevent THAT, they've engaged in sanctioned Fraud, Waste, and/or Abuse (FRA).

If they'd spent what was needed, the bean counters would have seen that there was $2m un-utilized funds that could have been shifted to Unit Z. Units X and Y could have gotten by with $3m each, and Unit Z could have used the $1m surplus from each to meet their requirements, effectively negating the need for an additional $2m.

4m +4m + 4m = 12m. OR, since X and Y only used $3m each, and shifted $1m to Z, it could look like this: 3m + 3m + 6m = 12m. Numbers stay the same.

BUT, since X and Y blew through their excesses, and Z had to request additional funding, it became this:

$4m + $4m + $6m = $14m.

We could save money by allowing funds to change "pots" when needed.

We could also save money by just "topping off" accounts as needed by not taking away funding (because, hey, shit happens).

Units X, Y, and Z all start off with $4m. Units X and Y spend $3m, legitimately, and realize that the extra $1m is bonus, but they decide to leave it where it is and NOT just throw it towards frivolous stuff. Unit Z, still has their higher operational costs, and is still short, but a rapid request for funds brings them up to what they need.

So, keeping the $4m funding for X and Y the same, they still have a $1m surplus in their respective accounts, and just need to be "topped off". Unit Z has their new budget approved, and will be getting $6m for the new FY.

Topping off X and Y is $3m + $3m, and bringing up Z to their needed $6m is only an additional $2m over previous FY funding.

Topping them off and adding Z becomes 3 + 3 + 6 = 14. This is a one-time thing. Once budgets stabilize and one can establish baseline expenditures, it'll be easier and cheaper.

FY16:

Units X and Y still spend $3m out of their $4m, and Unit Z spends $5.5m out of their alloted $6m. Topping them off now becomes:

3 + 3 + 5.5 = 11.5

So, we have the current way, of everyone blowing through everything:

4 + 4 + 4 = 12, + 2 = 14 (and what it WILL become: 4 + 4 + 6 = 14).

We could have shifted funds around to ensure coverage, and saved a couple million:

3 + 3 + 4 + 2 = 12.

Or, we eat it for an FY or two, stabilize budgets and get a baseline (which, most units already have, unless they are new units).

3 + 3 + 5.5 = 11.5

Either way, even with a budget increase shown by Unit Z, you STILL SAVE MONEY by "topping off", and not encouraging - and sanctioning - Fraud, Waste and/or Abuse.

While topping off accounts still allows for unused funds, it leaves a cushion of "Oh, shit!" funds. And, while it's not really cheaper than REALLY cutting off the excess, it still allows for that, "Oh, shit!" stuff to happen. It's less confusing than shifting funds around to help units that NEED it, and saves only a small amount over doing it that way, BUT. . . it's LESS CONFUSING.

In short, I - personally - feel that topping off accounts is, hands down, the BEST way to alleviate some of the budgeting issues we have facing the military. It doesn't encourage FRA as much as it does now, because you know that your funds will still be there next year, but at the same time, you know you may have a surplus to play with, so. . . . It will boil down to Honor, Courage, and Commitment (Whoa! Where did the Core values come into this?!).

Response by LTC Paul Labrador made Oct 13 at 2014 1:32 PM

LTC Paul Labrador — Mon, 13 Oct 2014 13:32:00 -0400

I am of two minds regarding the current budgeting process. On one hand, I totally get the reason why we do it the way we do now. It prevents units from asking for more money than they need and forces attention to detail on spending. However, it also encourages low-balling budgets. On the other hand, the current budget process does not encourage or reward frugality. I may have estimated a budget of X, but during the course of the FY, I find ways to save money, I shouldn't be punished for it by having a smaller budget the following year either.....

Response by SGT Richard H. made Oct 13 at 2014 1:54 PM

SGT Richard H. — Mon, 13 Oct 2014 13:54:58 -0400

Welcome to "Why our Government is broke 101".

The fiscally sensible way to do this would be to allocate a budget based on assumed need. Say the budget is $4m, and we spend $3m. The sensible thing to do would be to budget $3m the next year, but ADD that to the remaining $1m, giving a repeat budget of $4m...this allows for things to wear out that perhaps we thought would wear out last year, etc.
This is, of course, very basic and assumes that attention was paid to things like equipment wearing out or being used up....and that it will still wear out or be used up next year if it wasn't this year.