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Army Corps of Engineers: Improved Planning and Financial Management Should Replace Reliance on Reprogramming Actions to Manage Project Funds

GAO-05-946 Published: Sep 16, 2005. Publicly Released: Sep 29, 2005.
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Highlights

In recent years, the Army Corps of Engineers (Corps) has had more work to accomplish than funds available. The Congress has supported the Corps' need to reprogram funds to complete projects. Reprogramming allows the Corps to move funds from projects that can not use available funds to those that can. However, concerns have been expressed about whether the Corps reprogrammed funds in accordance with applicable guidance. GAO determined for fiscal years 2003 and 2004 (1) the amount of funds reprogrammed; (2) if the Corps followed reprogramming guidance; (3) why the Corps reprogrammed funds; and (4) how effective the Corps' reprogramming strategy was in managing funds.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To eliminate the burden of excessive reprogramming actions and to provide better financial management of projects, the Secretary of Defense should direct the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers to work with congressional committees to provide meaningful and consistent guidance for the investigations, construction, and operation and maintenance appropriations for what actions count as reprogrammings and what reporting thresholds should apply on a program and project basis.
Closed – Implemented
On December 31, 2005, the Corps issued Engineering Circular 11-2-189 that defined what actions counted as reprogrammings and clarifies when reprogramming actions need to approved by the House and Senate Appropriations Committees.
Department of Defense To eliminate the burden of excessive reprogramming actions and to provide better financial management of projects, the Secretary of Defense should direct the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers to develop a financial planning and management system for the investigations, construction, and operation and maintenance appropriations that, at a minimum, changes the way the Corps allocates funds from an annual basis to a more frequent basis that reflect actual schedule and project performance.
Closed – Implemented
On Dec, 31, 2005, the Corps issued Engineering Circular 11-2-189 that established a financial management system that changed the allocation of funds to projects from one time at the beginning of the year to quarterly based on need.
Department of Defense To eliminate the burden of excessive reprogramming actions and to provide better financial management of projects, the Secretary of Defense should direct the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers to provide direction and training to change the culture prevalent throughout the Corps that reprogramming is an acceptable, routine financial management practice and instead place greater emphasis on the use of financial planning approaches and priority-setting mechanisms for managing project funding.
Closed – Implemented
On Dec. 31, 2005, the Corps issued new guidance that replaces the past policy of allowing temporary "cash flow" from projects and requires project management plans and accurate and achievable expenditure schedules. Engineering Circular 11-2-189 also states that the focus will be on executing funds on the projects for which they were appropriated.
Department of Defense To eliminate the burden of excessive reprogramming actions and to provide better financial management of projects, the Secretary of Defense should direct the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers to develop a financial planning and management system for the investigations, construction, and operation and maintenance appropriations that, at a minimum, periodically reviews project schedules and performance and revises funding allocations as needed.
Closed – Implemented
The Corps issued Engineering Circular 11-2-189 on Dec. 31, 2005 that requires monthly measurement of work progress tied to the project's management plan and the adjustment of project work allowances as needed.
Department of Defense To eliminate the burden of excessive reprogramming actions and to provide better financial management of projects, the Secretary of Defense should direct the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers to develop a financial planning and management system for the investigations, construction, and operation and maintenance appropriations that, at a minimum, develops and implements criteria for setting reprogramming priorities.
Closed – Implemented
On Dec. 31, 2005, the Corps established new guidance that set reprogramming priorities for Corps projects.

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Topics

Appropriated fundsFederal fundsFinancial managementFunds managementMilitary policiesMonetary policiesPolicy evaluationReprogramming of appropriated fundsFinancial analysisPolicies and procedures