Study recommends sweeping overhaul of Army Corps budgeting

The Army Corps of Engineers must drastically reform how it plans and budgets for major projects if it is to effectively protect against future engineering failures like the collapse of the New Orleans levee system after Hurricane Katrina, according to an independent panel.

In a study produced at the request of House energy and water appropriators, the National Academy of Public Administration examined how the Army Corps makes budget decisions. Under the current system, cost-share project proposals are generated at the local level and the Army Corps makes funding decisions based on a cost-benefit analysis of individual projects.

Lawmakers originally charged the panel with suggesting ways to improve how projects are prioritized for funding. But the group quickly found that the Army Corps' ills went beyond simple prioritization to a larger problem -- that no strategic, long-term planning undergirds the selection of projects, NAPA President Howard Messner said in a letter presenting the report.

As an example, panelists pointed to the flooding of New Orleans. The majority of the Army Corps' individual projects functioned as planned, the panelists noted. But because the elements were not designed as integrated components of a single system, individual weak links resulted in a massive system failure. "System performance is what counted, not the performance of individual levees," the authors stated.

Led by Sean O'Keefe, a former deputy director of the Office of Management and Budget who now serves as chancellor of Louisiana State University, the panel recommended actions that the Army Corps could take, with the support of Congress and the administration, to reconfigure budgeting as part of a unified planning process.

It urged that individual projects be considered as elements of "strategically developed system plans designed to meet outcome-oriented performance targets." Panelists recommended that long-range plans embrace a time horizon of at least 20 years, and be subject to periodic reviews analogous to the Quadrennial Defense Reviews undertaken by the Pentagon.

The panel also urged the Army Corps to: base its planning on key national goals; partner with other agencies, levels of government and stakeholders; adequately operate and maintain Corps-built facilities; and ensure that cost-sharing requirements do not disproportionately affect low-income communities.

NAPA also recommended that Congress shift Corps appropriations away from ad hoc selection of projects and toward funding based on geographic features like particular watersheds or river basins, with allocations matched to priority levels.

The authors commended the Corps' "12 Actions for Change" platform, announced in August 2006, which included plans to transform the agency using several of the risk- and geography-based elements called for by NAPA.

Army Corps officials were not available to comment on the recommendations Tuesday afternoon, but a spokesman noted that NAPA's suggestions mirrored several elements of the Corps' new plan, including using more risk- and systems-based planning and using a longer-term outlook.

But NAPA largely skirted a key element of current Corps funding decisions. With potential civil engineering projects scattered across the United States, the Army Corps has traditionally been a prime vehicle for congressional earmarks. While the authors urged that budgeting be made "as transparent and participatory as possible," and repeatedly asserted the importance of risk-based and system-based funding, they stopped short of instructing lawmakers to keep earmarks out of the budget equation.