OMB asks for evidence-based budgeting

Agencies are to use evidence in submitting their fiscal year 2014 budget requests, according to a new Office of Management and Budget memo released May 18. "Evidence," in this case, means using rigorous evaluations of programs' performance as part of the budget-setting process.

"Agencies should demonstrate the use of evidence throughout their Fiscal Year (FY) 2014 budget submissions. Budget submissions also should include a separate section on agencies' most innovative uses of evidence and evaluation," the memo reads. "Many potential strategies have little immediate cost, and the Budget is more likely to fund requests that demonstrate a commitment to developing and using evidence. The Budget also will allocate limited resources for initiatives to expand the use of evidence."

The memo invites agencies to propose new evaluations, adding some specific suggestions:

  • Low-cost evaluations using administrative data or new technology;
  • Evaluations linked to waivers and performance partnerships;
  • Expansion of evaluation efforts within existing programs;
  • Systemic measurement of costs and cost per outcome.

"OMB invites agencies to identify areas where research provides strong evidence regarding the comparative cost-effectiveness of agency investments," the memo reads. "The research may pertain to the allocation of funding across agency programs (e.g., research showing that some funding streams have higher returns on investments) or within programs (e.g., research showing that some types of grantees or programmatic approaches have higher returns)."

Another memo issued the same day pertains to the higher-level budgeting approach OMB wants agencies to take, with evidence-based budgeting fit into the larger context, part of an effort to cut the federal deficit with reduced spending. That memo details the reduced spending that the administration is looking for. "Unless your agency has received different guidance from OMB, your overall agency request for 2014 should be 5 percent below the net discretionary total provided for your agency for 2014 in the 2013 Budget," it reads.

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Reader comments

Tue, May 22, 2012 SPMayor Summit Point, WV

Evidenced based budgeting -- reminds me in some ways of zero based budgeting. Planning and justifying a budget is a totally different matter from accounting for the subsequent spend. I expect this effort to be difficult for agencies - just as preparing performance based statements of work are.Evidence based budgets and PB SOWs require a major shift in how one determines what the needed inputs or funds are to achieve a set of outcomes. These outcomes need to be scalable to the level of funding provided, with a determination to be made at what point does the continued investment yield less of a return than justified or desired.One also needs to realize that as evidence is gathered and presented, and presumably publicly available, more than one jury of peers will come to different conclusions on the merits and accomplishments sought.

Mon, May 21, 2012

Budgeting is about predictions & planning. Accounting is about actuals and 20/20 hindsight. While there should be a linkage ... there often isn't since those two groups are usually in far different organizations in different building (or states) with different leaders. Plus.... the "stay within 5%" guidence pretty well nullifis the previous memo. What this thus becomes is another irrelevent PowerPoint slide drill.

Mon, May 21, 2012 Bill

OMB must be careful with their definition of evidence. The primary problem with business economics is that not everything can be assigned a price or cost in standard business terms. Thus, the private sector often devalues important humanistic activities, privacy for example. It's up to government to ensure that these unassignable activities are treated properly and fairly. Requiring evidence in a purely economic sense, like ROI, will follow the private sector to undervalueing these activities and the abandoning important government principles.

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