[CPEO-MEF] "Use It or Lose It"

[Lenny Siegel <lsiegel@cpeo.org>]

I've just read through the General Accounting Office report, "MILITARY
BASE CLOSURES: Unexpended Funds Raise Questions About Fiscal Year 2001
Funding Needs," GAO/NSIAD-00-170, July, 2000. It can be downloaded from
GAO's website, http://www.gao.gov, or you can order a single copy by
phoning 202/512-6000.

This is the report that the Military Construction Appropriations
Conference Committee just used to cut the budget for Base Realignment
and Closure. It criticizes the Defense Department, not only for its
unobligated balances - which I mentioned in a previous message - but for
its unliquidated obligations.

"Obligations are the amounts of orders placed, contracts awarded,
services received, and similar transactions during an accounting period
that will require payment during the same or a future period. As
services are rendered or good delivered, an agency makes the required
outlays (i.e. payments) to liquidate its obligations ..."

GAO and Congress seem to be taking the position that if money hasn't
been spent, then it wasn't needed. Unfortunately, that shallow logic may
force inefficiencies onto the cleanup programs. As I understand it, the
armed services may not issue a contract - that is, promise future
payments - without first lining up the funds - that is, obligating them.

However, I've learned independently that to carry out multi-year
operations and maintenance activity efficiently, the armed services - at
least, reportedly the Air Force - issue multi-year contracts. That, of
course, sets them up to accumulate unliquidated balances. To avoid
having its budget trimmed continually, the military will have to stick
with less efficient, short-term contracts.

The report is difficult for non-accountants (such as me) to follow, so I
hesitate to summarize or analyze any more. The key problem is that GAO
and Congress are telling the armed services that they care more about
the rate of outlays than about the efficiency of the cleanup program

Lenny. 
-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 222B View St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/968-1126
lsiegel@cpeo.org
http://www.cpeo.org

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