Testimony: Mr. DeSeve first provided an aggregate overview of budgetary and financial management data, linking the budget to management issues. He discussed the projections for a budget surplus in FY 1998, reductions in civilian employment in the Executive Branch, job creation in the private sector, improvements in government services through the Vice President's efforts and the National Performance Review, establishment of goals through the Government Performance and Results Act (GPRA), efforts to improve financial management and obtain unqualified audits for all major agencies, and guidance to agencies about capital assets in the Capital Programming Guide, which was issued last year.
Mr. DeSeve's analysis of capital programming was organized around the four phases in the Guide: planning, budgeting, procurement, and management-in-use. To help implement better capital programming, Mr. DeSeve suggested the following points: 1) select a few Federal entities that can best show the value of a capital acquisition fund (CAF) to strengthen capital planning and budgeting; 2) assign the responsibility of multi-year programs to chief operating officers to make each entity more accountable for its strategy and performance; and 3) adopt a phased, multi-year budget to tie funding to several project phases that are linked to performance plans developed in accordance with GPRA.
Questions from the Commissioners: Questions mainly focused on the details of Mr. DeSeve's suggestions and the appropriations process for CAFs.
Q. What happens to the budget authority and outlays
in your suggestion for a CAF?
A. In the CAF mechanism, the idea is to recognize the budget authority and the full project costs, including imputed interest costs, up-front. How outlays work needs clarification, but the idea is to avoid spikes and recognize full costs while having a disciplined process.
Q. How would CAFs work in the appropriations process?
Would the budget process enable Congress to identify how much is going
to capital projects? If agency contributions into CAFs are annual appropriations
items, appropriation subcommittees could choose not to fund them. If so,
doesn't the whole thing collapse any year the contributions are not made?
A. The process enables Congress to identify how much is going to capital projects. Although the CAF funding is discretionary, there's a commitment to repay over a period of time. We faced the same problem with appropriations for rent paid to GSA. When Congress didn't appropriate the rent money, the agencies were charged for the rent anyway, which led to an agreement with the committees. Implementing CAFs would require a similar agreement with the budget and appropriations committees.