With Sequestration Looming, GAO Suggests How Agencies Can Do More With Less

Federal auditors are offering some pointers on how agencies can better handle severe budget cuts, examining where some offices succeeded and failed during the forced reductions during sequestration.

The Labor Department’s Employment and Training Administration, the Homeland Security Department’s Federal Law Enforcement Training Center and the Environmental Protection Agency all experienced budget cuts of at least 9 percent between fiscal years 2010 and 2015, according to the Government Accountability Office. The impact of the 2011 Budget Control Act -- which in 2013 led to a sequester -- was heightened by incessant continuing resolutions and near constant shutdown threats, GAO said, and in some cases, by a significant increase in the agencies’ workloads. The auditors found three main strategies that helped, or would have helped, the agencies better handle and adjust to the spending decreases. 

First, GAO advised agencies to take a top-down approach in which leadership takes the reins in directing the focus on managing declining resources. Leaders should create a long-term strategy for dealing with budget uncertainty, identify and address critical gaps, and review programs to ensure all are necessary to their missions. Leaders should also communicate with Congress on their intentions with the cuts and get feedback from stakeholders on the best ways to adjust operations. GAO praised EPA and ETA for instituting workforce reviews that identified shortages and ways to reshape their employee structures to “align with the evolving needs of budgetary limitations.”

Agencies should also use data analytics to identify ways to operate more efficiently, GAO said. They should first assess the availability and quality of their data, then use it to identify duplicative or overlapping activities. Agencies should set specific cost-savings goals and use their data to track them. GAO lauded EPA’s Lean Six Sigma program, a data tool that helped the agency evaluate its processes.

Finally, GAO said agencies should develop specific short and long-term strategies for cost avoidance.  Those can include shared services, centralizing contracting operations, co-locating employees in order to consolidate real estate and instituting employee-input cost savings incentive programs. FLETC, for example, cut about 10 percent of its contracting expenses by reducing or eliminating “non-essential service,” which allowed the agency to avoid furloughing employees. ETA allowed more telework that in turn enabled property consolidation, and is saving $1 million annually by using seasonal contract employees during peak filings for labor certifications rather than bulking up full-time staff.

GAO implored agencies governmentwide to learn from the examples set by the agencies it evaluated.

“The examples in this framework, while not exhaustive, can help guide agencies through budget challenges by providing strategies for leading from the top, using data analytics to guide decisions, and reducing costs now and in the future,” the auditors wrote.

GAO also found each agency it reviewed still had unfinished work. FLETC’s most recent strategic plan, for example, expired in 2013. The agency said it is working on a replacement to cover fiscal years 2016 through 2018 and expects to complete it by Dec. 31, but fiscal 2016 is already over. The training center is expecting a surge in workload as it prepares for agencies looking to hire more law enforcement personnel, but has yet to address how it will tackle that rush. It has announced its intentions to develop an “online campus” to help reduce costs, but GAO said the agency has not fully fleshed out its plans or goals for the initiative.

The auditors cited ETA for failing to discern lessons from the massive work increase it sustained after the recession in areas such as unemployment processing, saying the agency is not prepared for the next downturn in the economy. ETA has proposed moving toward a fee-based system for processing foreign labor certifications to alleviate some budgetary pressures, a proposal that would require congressional approval.

While the agencies have demonstrated some success in accomplishing more with fewer resources, stakeholder groups told GAO services have dropped off in many areas. While they in some instances commended the agencies for their commitment and flexibility in the face of adversity, the groups said their work has slowed and private entities have suffered.

Agencies would be wise to develop plans for shrinking budgets; the Congressional Budget Office has estimated discretionary spending as a share of the economy will be at its lowest point in 50 years by 2021.