Budget

OMB warns against money-juggling

transferring funds

Agencies should be cautious about transferring funds from one project to another to make up for sequester-based shortfalls. (Stock image)

Despite the fiscal crunch of sequestration, agencies should avoid the temptation to redirect available funds to meet short term needs if it means compromising long term priorities, particularly IT and infrastructure investment, according to an April 4 directive from the Office of Management and Budget. (Read the memo.)

The memo from OMB comptroller Danny Werfel advises those agencies that have some authority to transfer funds between accounts to avoid reprogramming efforts that might leave long term priorities underfunded. Agencies with carryover balances are also advised not to spend "in a manner that would leave the agency vulnerable to future risks" from lack of funds. Werfel's memo specifically cautions agencies against taking steps that limits their ability to detect fraud, perform needed maintenance and make "essential" IT and infrastructure investments.

The OMB reiterated strict limits on paying bonuses from sequestered accounts, and carved out a few key exceptions. Federal agencies are still permitted to dole out certain incentives to employees under sequestration, but only for mission critical activities and on a "highly limited basis," according to the OMB memo. Employees are still eligible for raises can still receive pay bumps in the form of quality step increases, and payments in recognition of savings on official travel, foreign language acquisition, and recruitment, retention and relocation incentives (also called the 3Rs). Werfel's memo specifies that "spending for QSIs and 3Rs should not exceed the level of spending on such incentives for fiscal year 2010."

The memo cautions agencies to consult with their Inspectors General before making cuts to their budgets. IGs who have their own budget accounts "should be provided full discretion to determine how to implement the funds required by sequestration," the memo says. For agencies in which IG funds are mixed in with general agency budgets, agencies are directed to cut IG funds one the same basis as any other spending in the same account. Once the amount reduction is determined, agency heads should "then defer as appropriate" to IGs in implementing cuts.

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy and the Department of Veterans Affairs. Prior to joining FCW, Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, New York Press, Architect Magazine and other publications.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


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