The Army is overhauling its budgeting mentality. No more use it or lose it, which often results in poor quality or unnecessary items. Almost every office can laugh (or cry) about the odd purchases that happen in the last seven days in September – every year. Everybody complains about it, but no one fixes it – until now.
Lt. Gen. Tom Spoehr, director of the Army Business Transformation Office is the champion for this effort, as part of the “Changing Management Behavior: Every Dollar Counts” initiative. The memorandum went into effect July 1.
The April memo was signed by then-acting Army Secretary Patrick Murphy who explained that “Commanders and staffs will not automatically decrement commands or programs in future allotments when they do not spend all funds without further investigation.” Unit comptrollers and other higher-ups will have to “evaluate the reason for the under-execution and determine if it was a onetime event or funding adjustments are needed.”
More Dollars for More innovation
Spoehr is also looking to implement what he calls “outcomes-based spending approach” that ties dollars directly to readiness. Instead of just tracking the percent expended on a line item, the new policy will also track percent completion of the initiative, in comparison to the percent expended.
Spoehr wants commanders to pay attention to processing costs and encourage stewardship and innovation in their units. The policy will provide incentive opportunities for process improvements. Automating processes, a portion of the new policy, will also help to reduce costs
Tracking every dollar is important. Spoehr explains that the Army receives revenue for Congress each year totaling $126 billion. Reducing waste by just 1% can save $1.26 billion. The cumulative effect of spending every dollar at the end of each fiscal year to preserve the next year’s budget impacts the Army’s readiness.
Of course, this new initiative is Army only and it doesn’t change how Congress operates. However, Congress operates on a macro level and isn’t overseeing the smaller line items within the Army’s budget. Congress typically moves money around when millions of dollars are at stake.
Can you teach and old budget new tricks?
Time will tell how well the “Every Dollar Counts” initiative works. It will come down to implementation and trust. Commanders can provide better metrics, but if the metrics are misinterpreted or misunderstood in the evaluation process, it could impact some initiatives. It’s hard to teach an old dog new tricks. Perhaps the incentives should be offered to anyone under budget, or require September purchases have an extra level of approval in the first five years following the new policy.
The use it or lose it phenomenon that has impacted federal spending is definitely a problem. Whether or not this is the right way to change it remains to be seen. However, change has to start somewhere, so it’s admirable that the Army is taking a strong stab at being that change.
