Agencies should be ready for greater scrutiny of certain expenditures, OMB leader warns.
OMB's Danny Werfel provides new guidance on the eve of the sequester. (File photo)
With the sequester D-Day only a day away, Office of Management and Budget Controller Danny Werfel sent out a reminder to agency heads on how agencies with sequestrable accounts may handle the cuts.
Agencies can expect more scrutiny of certain activities on sequestered accounts, including hiring new employees, issuing discretionary monetary awards to staff, and incurring obligations for new training, conferences and travel, Werfel reminded them.
"… [E]xpending funds on these activities at this time would in many circumstances not be the most effective way to protect agency mission to the extent practicable," Werfel wrote. "Therefore, agency leadership should review processes and controls around these activities, and ensure that these activities are conducted only to the extent they are the most cost-effective way to maintain critical agency mission operations under sequestration."
Werfel’s Feb. 27 guidance builds on previous communications with agencies about the implementation of sequestration, and addresses questions related to certain categories of planning activities.
Agencies on Jan. 14 received the OMB memo "Planning for Uncertainty with Respect to Fiscal Year 2013 Budgetary Resources," which ordered them to start planning for operating under leaner fiscal conditions. Those efforts should be done with "sufficient detail and clarity" to identify actions taken to operate with fewer budgetary resources, Werfel wrote.
For example, agencies should have identified any major contracts or grants that need to be shuttered or delayed. The same consideration should be taken to determine how many employees need to be furloughed, and the timing and length of those furloughs.
Agency partners should also be informed of the sequester impact so they can adjust their operations and plans accordingly. Werfel said agencies should be as specific as possible to provide enough detail to these stakeholders in understanding the consequences of the sequester.
The sequester will also affect agency contracting activities, with reduced contracting resources. Werfel said agencies should try to ensure that contract actions are "cost-effective and minimize negative impact on the agency's mission to the extent practicable." Overall, agencies should consider new contracts only when they support high-priority efforts, he added.