Report Analyzes Agencies’ Use-or-Lose Spending Sprees

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By on March 8, 2019 in Agency News with 0 Comments

A new report from OpenTheBooks.com details just how much federal agencies spent (or, perhaps, wasted) at the end of the last fiscal year as they rushed to use up remaining funds in their budgets.

What is the “Use it or Lose it” Concept?

Federal agencies often kick their spending into high gear in the last month of each fiscal year in an effort to use up remaining money to keep their budgets from getting cut.

“Agencies worry spending less than their budget allows might prompt Congress to appropriate less money in the next fiscal year. To avoid this, federal agencies choose to embark on an annual shopping spree rather than admit they can operate on less,” says the report.

The table from the report below shows that this phenomenon not only exists but has been on the rise in the last few years.

Use-it-or-Lose-it Spending by Fiscal Year

Fiscal Year Total Contracts
September 2015 $69,621,765,648
September 2016 $73,551,447,515
September 2017 $83,683,953,487
September 2018 $96,964,204,445

Where Did the Money Go, and How Much was Spent?

So what did last year’s spending spree look like?

In the final month of FY 2018, federal agencies signed nearly 10% of all fiscal year contracts. It grew each week of the month too, starting at $8 billion in week one and ending up at $53.3 billion in week four. Between 2015 and 2018, federal spending during the last month of the fiscal year increased by 39%.

Bar chart showing the rapid progression of spending by federal agencies in the last month of the fiscal year in 2018 (September) illustrating the use-it-or-lose-it spending sprees by federal agencies

What was purchased?

Some of the highlights include a Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), lobster tail and crab ($4.6 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million). $818.1 million was spent on guns, ammo and bombs, $490.6 million on furniture and $462 million on PR and marketing.

Spending by Agency

DoD spent the most by far, coming in at just over $61 billion. The smallest spender was the Interior Department at $1.1 billion. The executive office of the president also spent $26.8 million.

AWARDING AGENCY TOTAL CONTRACTS
DEPARTMENT OF DEFENSE (DOD) $61,209,301,370
DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) $5,665,716,975
DEPARTMENT OF VETERANS AFFAIRS (VA) $5,429,028,812
DEPARTMENT OF HOMELAND SECURITY (DHS) $4,173,698,090
DEPARTMENT OF STATE (DOS) $3,988,497,959
GENERAL SERVICES ADMINISTRATION (GSA) $3,205,885,563
DEPARTMENT OF ENERGY (DOE) $2,679,322,832
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) $1,577,157,573
DEPARTMENT OF JUSTICE (DOJ) $1,378,787,388
DEPARTMENT OF THE INTERIOR (DOI) $1,158,399,343

Who Gets the Money?

Contractors made out quite well last September. Lockheed Martin got $8.2 billion in total contracts, Boeing $5.1 billion and Raytheon $3.3 billion.

$25.2 billion (26%) of all spending in the month went to companies in the Washington, DC area.

Other countries saw an influx of money as well. Top-receiving countries included Afghanistan ($356.3 million), India ($590.2 million), Germany ($535.6 million), Japan ($528.9 million), and Iraq ($271.4 million).

Map of the United States showing how much was spent in each state in September 2018 on the end of fiscal year, use-it-or-lose-it federal agency spending sprees

Questions Raised

The report asks several questions:

  • Should there be a cap for how much the federal agencies can spend in one month?
  • Should Congress reward agencies that cut their budgetsand leave excess funds unspent at the end of a fiscal year?
  • What happens to excess funds that are not spent?

It doesn’t offer any answers to these, it just puts them out there for consideration based on the findings. (Feel free to address those in the comments below)

However, addressing the end of year spending by agencies is not new by any means and has been looked at by Congress before. It is something that has been spearheaded more recently by Senator Rand Paul (R-KY).

At a hearing in 2017, he said:

We have been told of the military hovering aircrafts at the end of runways just to burn off fuel, and soldiers sent to the shooting range sometimes for an entire day just to expend ammunition.

Of course I cannot forget when we took over this subcommittee, we found toner cartridges for an obsolete printer stacked to the ceiling in the subcommittee’s office space because the chairman preceding had said, “We’ve got to spend it; we have this money; we’ve got to get rid of it.” I don’t know what happened to those cartridges, but they obviously were a waste of money.

He had reintroduced legislation for the third time in conjunction with the hearing that would pay bonuses to federal employees that identify unneeded or surplus funds. It has never made it through Congress on any of the three occasions, however.

No doubt there are legitimate purchases within the massive amounts of spending detailed in the report, but it would be foolish to think there is no room for cutting back on waste as well.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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