Pursuant to a congressional request, GAO discussed: (1) the level of carryover balances held by the Department of Energy's (DOE) Energy Conservation Program and the trend of these balances since fiscal year (FY) 1997; and (2) its methodology for determining the amount of carryover balances that may be available to reduce DOE's budget requests and how it differs from the methodology used by DOE.

GAO noted that: (1) carryover balances within the Energy Conservation Program have declined by about 11 percent since the beginning of FY 1997 to an estimated $319 million at the beginning of FY 2000; (2) to estimate the amount of balances that potentially could be used to reduce DOE's FY 2000 budget request, GAO: (a) projected the carryover balances for the beginning of the new fiscal year; (b) determined how much of the carryover balance is needed to meet prior commitments that have not been paid; and (c) analyzed the difference between the amount of carryover balance needed to meet prior program commitments and the projected carryover balance to identify potentially excess balances; (3) based on this methodology, GAO estimated that about $60 million of the carryover balance of $319 million would be needed at the beginning of FY 2000 to carry out prior financial commitments in the conservation program; (4) of the remaining $259 million, about $185 million in carryover balances were excluded from this analysis because these funds were associated with grants or cooperative agreements that are often used to provide multiyear funding and are awarded late in the fiscal year; (5) GAO believes the remaining $74 million is potentially available to reduce DOE's budget request; (6) in prior years, DOE has disagreed with GAO's methodology; (7) DOE objected to: (a) GAO's use of total obligation authority as the basis for its analysis; (b) GAO's approach for establishing carryover balance goals; (c) the fact that GAO's approach does not identify specific areas where it believed balances might be available; and (d) using an approach that DOE believed GAO had criticized them for using in the past; (8) GAO believes that its overall approach is valid; and (9) for the FY 2000 analysis, however, GAO worked with DOE officials to develop a carryover balance goal that can be used in GAO's approach and that also takes into account all the individual goals DOE has set for components of its program.