Department of Agriculture

Encourage frugality by no longer basing budgets on expenditures

The theme in the Federal government is that every Agency, Service, Program, office, etc. must spend every dollar of their current budgetary allotments, or else their budgets will be accordingly decreased the following year. This encourages wasteful year-end spending and discourages frugality and savings; everyone knows they will be punished with lower budgets if they don't spend all of their allotment. This goes all the way up the line to the Department level and above. People actually get in trouble for not spending their allotments, because those higher-ups know that their own budget will be accordingly decreased the following year. I propose we end this practice government-wide. Instead of basing budgets on what was spent last year, ask managers to prepare their own spending plans. Encourage higher-level managers to reward cost-saving behavior and coming in under budget at the end of the Fiscal Year by: (1) not automatically decreasing budgets based on last year's expenditures; (2) recognizing such managers through higher performance appraisals, accolades, and awards; (3) creating an atmosphere where this is heralded instead of frowned upon; and (4) passing on a lower share of future cutbacks to those offices who show such fiscal responsibility. This must start at the top. If mid-level managers who effectively implement such a cost-saving change are punished with lower budgets, they won't do it for long.

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Idea No. 13376