Agencies' share pain of CR's funding limits

Congress passes resolution to fund 2007 at 2006 levels

For federal agencies, the fiscal 2007 budget is a case of misery loves company.
With minor adjustments, Congress passed a continuing resolution to fund agencies this year at 2006 levels.

'We know that the CR will be painful for most agencies,' said Stan Collender, managing director at Qorvis Communications Inc. of Washington. 'It's not going to be good for IT programs.'

A continuing resolution funds the remainder of 2007 federal operations because the outgoing Republican leadership was unable to finish their appropriations work.

Congress last year approved funding for just two agencies'the Defense and Homeland Security departments. Democrats, who took control of Congress in the November elections, opted for a yearlong continuing resolution to keep the government running the remainder of this year so they could focus on the 2008 budget.

Agencies do have some alternatives for accessing funds for hard-hit priorities, Collender said.

'Every agency has different abilities to reprogram and transfer funds. But every agency will deal with the limit differently,' Collender said.

For example, the Veterans Affairs Department's IT budget will be about $40 million less than President Bush's request for 2007, said VA CIO Robert Howard at a recent budget briefing.

VA is examining its priority programs and trying to make sensible adjustments.
'It won't be a salami slice. We know what the most important programs are, and we're trying to preserve them, perhaps even at a reduced rate, and at least do the job intelligently,' he said.

Another agency IT program that gets short shrift on 2007 funding is the Labor Department's financial management system modernization plans, said Sam Mok, Labor's chief financial officer.

'We are able to spend only at the same level as last year. Unfortunately last year was a very low expenditure year. It has really tied our hands,' he said.
Labor is assessing the impact of the funding problem to determine how best to go forward, Mok said.

The CR, however, will not crimp e-government, said Karen Evans, the Office of Management and Budget's administrator for e-government and IT.

'We did an analysis and found there will be minimal impact on e-government projects,' she said. 'All are ongoing projects and are built into the agency's base funding.'

Evans was comfortable that work will proceed, but it will come down to agency priorities and guidance in the CR.

'It is very important that the project manager knows their resources and works with management to recalibrate their goals based on resources and flexibility,' said Clay Johnson, OMB's deputy director for management.

Another program that will work around reductions under the CR is the Retirement System Modernization Program, the top priority for the Office of Personnel Management. This year, it will receive just about half of the $27 million that the president sought for 2007.

The funding shortfall will have no impact on retirement modernization this year because OPM is using money that does not expire from previous attempts at building a retirement system, said OPM director Linda Springer at a recent budget briefing.

'We will use all the money in the account,' said Springer, who did not know how much is in the account. 'We were planning to use that money anyway, but now we will just use it up faster.'

The CR increased funding for some IT projects that did not fare as well under the traditional budget process last year. The CR provides for $694.1 million for the 2010 Census. This is about $50 million more than the House and Senate recommendations last year.

The continuing resolution also puts on hold the merger of the General Services Administration's Office of Governmentwide Policy and Office of Congressional and Intergovernmental Affairs. GSA must keep the offices separate and must gain the approval of Congress to do otherwise.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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