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OMB claims big cuts in overhead spending but cannot offer details

Nov. 2, 2012 - 08:23AM   |  
By SEAN REILLY   |   Comments
“Agencies are making significant progress in reducing expenditures in key administrative areas — and as in all cases, they continually strive to strengthen reporting,” OMB Controller Danny Werfel said in a statement. The OMB cannot provide data on how savings reported by the administration were achieved.
“Agencies are making significant progress in reducing expenditures in key administrative areas — and as in all cases, they continually strive to strengthen reporting,” OMB Controller Danny Werfel said in a statement. The OMB cannot provide data on how savings reported by the administration were achieved. (Federal Times)

By the Obama administration’s count, agencies trimmed some $4 billion in overhead spending in the first half of fiscal 2012 compared with the same period in 2010.

But you won’t find a breakdown of those savings anywhere.

The same is true at the Defense Department, which claimed early last year that it will save $178 billion by 2016. The Pentagon won’t release the results of quarterly progress reviews toward that target on the grounds that they are internal deliberations.

Likewise, the Army has reported its Lean Six Sigma/Continuing Process Improvement program yielded $1.6 billion in savings in fiscal 2011, but it could not provide a rundown of the 1,400 projects that contributed to those savings.

“How can you know that you are on target if you can’t tell us what you did?” asked Steve Ellis, vice president of Taxpayers for Common Sense, a watchdog group that follows federal spending policy.

At the National Taxpayers Union, spokesman Pete Sepp credited the administration with progress in cutting costs in areas such as information technology management. But he agreed the White House would be better served by providing more detail on its track record.

“The public has been promised a leaner, meaner federal government for decades, and what they get looks a lot more bloated and timid than they’d like,” Sepp said. The best way to overcome that perception, he said, “is provide hard data.”

On his official blog last month, acting OMB Director Jeffrey Zients reported that the administration’s Campaign to Cut Waste prompted agencies to save $4 billion from a 2010 benchmark through March by consolidating cellphone contracts, reducing vehicle fleets and other steps. Overall, the administration’s goal is to double that to $8 billion by next September.

Last week, in response to Federal Times requests, OMB provided a spreadsheet showing that some agencies are well ahead of others toward meeting the individual spending goals that feed into the $8 billion target.

As of the end of March, for example, the General Services Administration had saved $71 million, 45 percent more than its $49 million goal. The Interior Department’s cuts amounted to $22 million, barely 10 percent of its $207 million objective.

Absent from the spreadsheet, however, was any detail on how those reductions were achieved. That information is maintained by agencies, which then report their spending reductions every three months, OMB spokeswoman Moira Mack said in an email.

“Agencies are making significant progress in reducing expenditures in key administrative areas — and as in all cases, they continually strive to strengthen reporting,” OMB Controller Danny Werfel said in a statement provided by Mack.

The quality of that reporting has recently come under question in at least two instances:

• The Environmental Protection Agency’s regional offices in Atlanta and Kansas lack “reliable methods for estimating savings and cost avoidances,” the agency’s inspector general said in a report last week.

• The Veterans Affairs Department overstated $710 million of $1.1 billion of savings claimed under an OMB directive to reduce contract spending, according to an audit by its inspector general published late last month. Besides double-counting $19 million in transactions, VA also included $562 million not allowable under OMB’s guidelines, the audit said.

VA leaders did not dispute the findings; in response, all administration and staff offices must name a senior official to certify the accuracy of future savings, Todd Grams, the department’s chief financial officer, said in a memo included in the audit.

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