Developing a Federal Drug Budget: Implementing the Anti-Drug Abuse Act of 1988

Published by the Government Accountability Office on 1990-08-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United   States   General   Accounting   Office   A. .
                Report to the Chairman, Subcommittee
GAO             on Government Information, Justice,
                and Agriculture, Committee on
                Government Operations,
                House of Representatives
August   1990
                Implementing the Anti-Drug
                Abuse Act of 1988
                   United States
                   General Accounting Office
                   Washington,  D.C. 20648

                   General Government Division


                   August 23,199O

                   The Honorable Robert E. Wise, Jr.
                   Chairman, Government Information, Justice,
                     and Agriculture Subcommittee
                   Committee on Government Operations
                   House of Representatives

                   Dear Mr. Chairman:

                   In response to your September 7, 1989, request, we have reviewed avail-
                   able information on federal funding of drug programs. As agreed, this
                   report examines the evolution of the process used to formulate federal
                   drug budgets for fiscal years 1989 through 1992 and describes how the
                   executive branch tracks and monitors the obligation and expenditure of
                   federal drug program funds.1 As requested, we are also including agency
                   views on whether providing a separate and distinct appropriation
                   account for each agency’s drug programs would improve the quality of
                   drug funding information.z

                   The process used to formulate the federal drug budget is evolving. For
Results in Brief   fiscal years 1981 through 1990, Congress did not legislatively require
                   the preparation of an annual drug budget; however, the Office of Man-
                   agement and Budget (OMB) provided to executive branch and congres-
                   sional agencies a summary of the drug budgets of federal agencies and
                   departments. With increased resources being dedicated to the drug
                   effort, Congress mandated in the Anti-Drug Abuse Act of 1988 that the
                   Director of the Office of National Drug Control Policy (ONDCP) prepare
                   an annual federal budget and outlined a drug budget formulation pro-
                   cess, coordinated with the preparation of the President’s annual budget

                   In January 1990, ONDCP released the National Drug Control Strategy:
                   Budget Summary, the first legislatively mandated comprehensive fed-
                   eral drug budget. Although ONDCPhas issued guidelines to implement the
                   legislation and prepare the drug budget, ONDCPofficials said they will

                    ‘Obligationsreflect the amountsof ordersplaced,contractsawarded,servicesreceived,and similar
                   transactionsthat will require paymentsat a future date.
                   ‘Appropriation accountis a summaryaccountestablishedin the Treasury for eachappropriation
                   showing transactionsto such accounts Eachaccountprovidesthe frameworkfor establishinga set of
                   balancedaccountsfor the agencyconcerned.Most appropriation accountsencompassa numberof
                   actwities or projects.

                   Page 1                                                  GAO/GGD9@104Federal Drug Budget

                             OMB tried to bring together improved information about drug program
                             resources through a June 1986 memorandum that provided guidelines
                             for calculating agency drug-related expenditures. Nevertheless, the pro-
                             cess used to develop the drug budget remained informal-largely    depen-
                             dent on phone calls between agency and OMB officials and the
                             relationships between the OMB budget examiner and the agency and
                             departmental budget staff.

                              With the enactment of the Anti-Drug Abuse Acts of 1986 and 1988, Con-
                              gress substantially increased funds for federal drug programs. In the
                              1988 act, Congress also mandated the establishment of a drug budget
                              formulation process to prepare an annual drug budget. Specifically, the
                              act requires the Director of ONDCPto

                        l establish the National Drug Control Program;
                        . promulgate annually the National Drug Control Strategy;
                        l develop each fiscal year the National Drug Control Program Budget to
                          implement the Strategy; and
                        . certify, in writing, that drug budget submissions to ONDCPfrom program
                          managers, agency heads, and department heads, with National Drug
                          Control Program responsibilities, are adequate to implement the objec-
                          tives of the National Drug Strategy for the budget request year.

                              ONDCP prepared and the President issued the first National Drug Control
                              Strategy in September 1989; it included a presentation of the specific
                              resource levels the Administration believed were necessary for fiscal
                              year 1990 to implement the strategy. For fiscal year 1991, ONDCPimple-
                              mented guidelines to develop the federal drug budget and in January
                              1990 OKDCP released the fiscal year 1991 drug budget in conjunction
                              with the President’s second National Drug Control Strategy.

                              Our objective was to provide the Subcommittee with a description of
Objectives, Scope,and
Mkhodology                  . the evolution of the process used to develop the overall federal drug
                              budget, specifically drug budget authority” and outlay figures;
                            . the process five federal agencies, selected for the purpose of example,
                              used to develop drug budgets;

                              5Budgetauthority, which is provided by law, allows agenciesto enter into obligationsthat will result
                              in immediateor future expendituresof federalgovernmentfunds.

                              Page 3                                                     GAO/GGD96.164Federal Drug Bud@

                        To carry out its budget responsibilities under the Anti-Drug Abuse Act
How the Federal Drug    of 1988, ONDCPset out guidelines in May 1989 establishing a process to
Budget Is Developed     formulate the federal drug budget and a standardized format for drug
                        budget submissions. Because ONDCPwas established after the fiscal year
                        1991 budget cycle had begun, for fiscal year 199 1, ONDCPdid not fully
                        implement the process laid out in the guidelines. ONDCPprepared and
                        issued the National Drug Control Strategy: Budget Summary, the fiscal
                        year 1991 federal drug budget, in January 1990.

                        According to ONLICPofficials, the fiscal year 1991 guidelines achieved the
                        objective of making available more and better information about the
                        federal drug budget. These officials indicated, however, that in the
                        majority of cases figures labeled “actual” for the end of fiscal year drug
                        program budget authority nevertheless represent final estimates for
                        drug expenditures for that year. This is because drug program funds are
                        combined with other programs in an account and cannot be precisely
                        distinguished from other program funds. In addition, methodologies that
                        agencies used to derive these estimates varied.

                        ONDCPplans to continue modifying the drug budget formulation      process.
                        Fiscal year 1992 will be the first complete drug budget cycle, but ONDCP
                        officials expect that it may take 2 to 3 years before the process is run-
                        ning smoothly.

ONDCPEstablished Drug   To implement its budget responsibilities under the Anti-Drug Abuse Act
                        of 1988, ONDCPissued guidelines in May 1989 on how to prepare and
Budget Submission       process drug budget submissions. (See app. I.) The guidelines applied to
Guidelines              the drug budget process beginning in fiscal year 1991; ONDCPrevised the
                        guidelines for the fiscal year 1992 cycle.

                        The 1989 guidelines set out a three-tier drug budget formulation process
                        whereby ONJXP receives three separate budget submissions from each
                        drug control agency, as identified by ONDCP. Specifically, ONDCPwas to
                        receive drug budget submissions from each program manager (tier one),
                        bureau/agency head (tier two), and department head (tier three), with
                        drug-related programs. The submissions to ONLICPwere to be made
                        before submissions to OMB.

                        For fiscal years 1991 and 1992, however, ONDCPspecified in its guide-
                        lines that it requested drug budget submissions from all departments, all

                        pages                                       GAO/GGDpo-104Federal Drug Budget

Outcome   of the Fiscal   Year   For fiscal year 1991, ONDCPissued the National Drug Control Strategy:
                                 Budget Summary. The summary describes each agency’s fiscal year
1991 Drug Budget                 1991 drug budget request and how they derived these requests. It out-
Formulation Process              lines each agency’s “actual” drug budget authority for fiscal year 1989,
                                 estimated drug budget authority for fiscal year 1990, and requested
                                 drug budget authority for fiscal year 1991.

                                 During the fiscal year 1991 drug budget formulation process, according
                                 to ONDCP, agency, and department officials, several agencies and depart-
                                 ments changed the way they formulated their drug budgets. Three of
                                 the five agencies surveyed in this study modified their drug budget for-
                                 mulation processes and one agency changed its definition of drug pro-
                                 gram. One agency continued to use the same process, because it was
                                 based on years of experience.8 To provide comparable figures for the 3
                                 fiscal years reported, the four agencies adjusted their 1989 and 1990
                                 budget authority figures.

Limitations of Fiscal Year       For fiscal year 1991, ONDCP, to implement its budget responsibilities
                                 under the Anti-Drug Abuse Act of 1988, instituted changes in the pro-
1991 Drug Budget                 cess used to formulate the federal drug budget. Despite these changes,
Authority Figures                according to ONDCPofficials, the “actual” drug budget authority for drug
                                 programs is usually an estimate, and methodologies used by agencies to
                                 formulate these estimates varied.

“Actual” Drug Budget Authority   Although the National Drug Control Strategy: Budget Summary provides
Figures Are Estimates            more information about agencies’ drug budget authority than the earlier
                                 OMB summaries, “actual” budget authority for drug programs generally
                                 continues to be an estimate. OMB officials said this is because most agen-
                                 cies do not have a separate appropriation account for drug programs;
                                 therefore, agencies can only estimate what part of an appropriation
                                 account was used for the drug programs. Further, it is difficult to isolate
                                 drug program resources in multimission agencies, such as the Coast
                                 Guard, because equipment and personnel are not used solely for the
                                 drug mission. OMB officials also said that within programs it may be dif-
                                 ficult to distinguish funds for anti-drug activities from other activities.
                                 For example, if a treatment program treats alcohol as well as drug
                                 abuse, it is difficult to distinguish between program funds used to treat
                                 alcohol abuse and those used to treat drug abuse.
                                 ‘The three agencieswere the FBI, ADAMHA,and the Departmentof Defense.The types of changes
                                 and the extent of the changesmadein eachagency’sdrug budgetformulation processvaried. The
                                 Departmentof Educationchangedits defmition of drug program,at the requestof ONDCP.The Coast
                                 Guarddid not changethe prowessusedto formulate its drug budget.

                                  Page 7                                              GAO/GGLWI?-164
                                                                                                   Federal Drug Budget

                       Congress has legislativelyI required ONLICPto file quarterly reports on
                       how fiscal year 1990 supplemental drug program funds were being obli-
                       gated. ONLXP officials indicated that they had secured obligation esti-
                       mates from agencies for the first and second quarters of fiscal year 1990
                       and reported these estimates to Congress. An ONDCPofficial described
                       these obligations as imprecise but said that, despite this, ONDCPdoes not
                       plan to request a change in agency accounting systems because it is not
                       certain that this would be worthwhile or achievable.

                       We also reviewed how drug program expenditure figures, or outlays, are
Monitoring the         calculated and monitored. According to officials, because drug programs
Expenditure of         are usually not separate appropriation accounts, at the end of the fiscal
Federal Drug Dollars   year the reported amounts of “actual” outlays for drug programs are, in
                       fact, only final estimates.

                       Generally, at the beginning of the fiscal year, agencies estimate the rate
                       at which they will outlay funds in an appropriation account over cur-
                       rent and future fiscal years. The estimated outlays are derived by
                       applying formulas, reflecting the expected rate at which funds will be
                       spent, to the budget authority. Different programs will have different
                       outlay formulas. This process also applies to drug program outlays.

                       Actual outlays are determined for an appropriation account at the end
                       of the fiscal year and are based on the payments that have been made
                       from that appropriation. Because drug programs are, however, not a
                       separate appropriation account, according to ONDCPofficials, “actual”
                       outlays for drug programs are generally final estimates. Further,
                       according to OMB officials, to determine “actual” drug program outlays
                       when there is no separate appropriation account for a drug account, the
                       formula or percentage” of the budget authority attributable to the drug
                       programs is applied to the total outlay figure for the total account.

                       “‘The fiscal year 1990Departmentof TransportationAppropriations Act, Title lV EmergencyDrug
                       Funding.ChapterVII, required ONDCPto file, with the Houseof Representativesand the Senate,
                       quarterly reportson how drug programfunds provided under Title IV of the act were beingobligated.
                       ’ ‘Agenciesapply different methodologies,which include formulasor percentages,to formulate their
                       drug budgetrequests.Theseformulas or percentagesare usedto calculate“actual” outlay figures.
                       For example,if an agencyestimatesthat 50 percentof its budgetauthority is dedicatedto anti-drug
                       efforts, at the end of the fiscal year the actual outlay figure for the agency’saccountwould bemulti-
                       plied by 50 percentto arrive at the drug outlay figure associatedwith that year’s budgetauthority.

                       Page 9                                                      GAO/GGD9@164Federal Drug Budget

              most effective manner possible, and whether its programs were
              achieving the objectives of the National Drug Control Strategy.

              ONDCPofficials agreed with the concern expressed by agency and OMB
              officials that there be more program evaluation of anti-drug programs.
              They indicated that only one federal department, the Department of
              Education, links the receipt of drug program funds to a requirement that
              recipients evaluate outcomes. ONDCP officials wanted drug programs
              evaluated to determine which programs worked so that funds could be
              directed to those programs. According to the ONDCPofficials, the first
              national drug strategy, issued in September 1989, included proposals
              that linked the receipt of funds with the evaluation of outcomes; Con-
              gress, however, did not enact these proposals.

              In the conference report for the fiscal year 1990 Department of Trans-
              portation Appropriations Act, the conferees did, however, address the
              relationship between program evaluation and its drug budget decisions.
              After pointing out the lack of information available on the impact of
              anti-drug programs and of the increased funding of these programs, the
              conferees indicated that in making funding decisions it would be useful
              to have an overview of the accomplishments of each of these programs.
              The conferees went on to direct ONDCPto provide additional information
              on the drug program assessments that have been conducted. ONDCPsub-
              mitted the required information to the House and Senate Appropriations
              committees in February and April 1990.

              It was beyond the scope of our review to determine whether separately
Conclusions   accounting for drug program obligations and outlays is achievable and
              cost beneficial. We note. however, that accounting for agency expendi-
              tures with sufficient precision to assess programs that Congress con-
              siders significant, such as anti-drug programs, is an important objective.
              Given modern budget and accounting techniques, the obstacles to
              tracking drug funds should not be viewed as insurmountable without
              further exploration. Less burdensome ways than a separate account
              may be available for producing better data than now exist.

              ONDCPis currently   working closely with the agencies to improve the drug
              budget process. In this effort ONDCP should ensure that sufficient
              emphasis is given to the development of improved means of tracking
              drug expenditures. We recognize that this tracking may be difficult
              when funds for different programs are combined within an account, as
              in the case of the alcohol, drug abuse, and mental health block grant, or

              page11                                      GAO/GGD90-104FederalDrugBudeet

Major contributors to this report are listed in appendix IV. Please con-
tact me on 275-8389 if you have any questions concerning the contents
of this report.

Sincerely yours,

Lowell Dodge
Director, Administration   of
  Justice Issues

Page 13                                     GAO/GGD-go-104Federal Drug Budget
Page 16   GAO/GGLM%104Federal Drug Budget
budget year and future years, changes in the request and a corre-
sponding justification, the relationship between this program and other
similar drug programs, and problems that need to be addressed to
enhance program efficiency and effectiveness; (2) workload and other
program information, e.g., basis for distribution of funds; and (3) how
drug-related amounts in the decision units were derived, including a full
explanation of the methodology and rationale used to determine the por-
tion of the total resources that is designated as drug control resources.

Page 17                                    GAO/GGD90104   Federal   Drug Budget
Appendix III

Federal Drug Budget Totak Fiscal Years 1989
Through 1991

               Drug budget   authority   in millions   of dollars
               FY 1989                                      FY 1990              FY 1991                   FY 90-91
               ______                                      Estimate              Request                   increase
               $6,302                                          $9,483             $10,631                     $1,148

               Sources, National Dru Control Strategy (Jan. 1990), p 106 and National Drug Control Strategy: Budget
               Summary (Jan 1990),:. 2

               Page 19                                                     GAO/GGD9@194        Federal   Drug Budget

Appropriation Account    A summary account established in the Treasury for each appropriation
                         and/or fund showing transactions to such accounts. Each such account
                         provides the framework for establishing a set of balanced accounts on
                         the books of the agency concerned.

Budget Authority         Authority provided by law to enter into obligations that will result in
                         immediate or future outlays involving federal government funds.
                         Budget authority comes in three forms: (1) appropriations (the most
                         common form), (2) authority to borrow, and (3) contract authority.
                         Budget authority may be classified in three ways: (1) period of availa-
                         bility-no-year,  one-year, and multiyear (Multiyear funds may cover
                         periods not coinciding with the start or end of a fiscal year. This is
                         known as forward funding, and the Department of Education is an
                         example of a federal agency which operates programs on this system);
                         (2) timing of congressional action-current   or permanent; and (3) the
                         manner of determining the amount available-definite       or indefinite.

Obligational Authority   Includes budget authority for given fiscal year plus balances from prior
                         years that remain available for obligation plus amounts authorized to be
                         credited to a specific account during the year (this includes transfers
                         between accounts).

Obligations Incurred     Transactions that will require payment during the same or future

Decision Unit            A decision unit is that part of the basic program or organizational entity
                         for which budget requests are prepared. For example, the FBI’S fiscal
                         year 1990 budget included 15 decision units, one of which was the drug
                         decision unit.

Decision Package         Presents a level of request for a decision unit, stating costs and perform-
                         ance associated with that level, where a decision unit is a component of
                         a basic program or organizational entity for which budget requests are

Outlays                  Payments (checks issued or cash disbursed) that liquidate obligations.
                         These can occur during the fiscal year for payment of obligations

                         Page 21                                      GAO/GGlWO-104   Federal   Drug Budget
           incurred in prior years or the current year. So outlays flow from both
           unexpended balances of prior year budget authority and from budget
           authority provided in the year that the money is spent. The terms
           expenditure and net disbursement are used interchangeably with the
           term outlays.

(186733)   Page 22                                     GAO/GGLMC!-104   Federal   Drug Budget
Major Contributors to This Report

                        Weldon McPhail, Assistant Director, Administration   of Justice Issues
General Government      Thomas Davies, Assignment Manager
Division, Washington,   Barbara Ann Stolz, Evaluator-in-Charge
                        Carla Surratt, Evaluator

                        Page 20                                     GAO/GGDW-104   Federal   Dmg Budget
Appendix        II

Federal Drug Budget Process

         Level of

OMB                                                            Tier   I     Tier   II

ONDCP                                                                                              i+
                                                                                                   .    .
                    ONDCP                                                                                                         ONDCP
                     Isues                                                                    and                                  Sends
                    SMeOY                                                     *            Certifies            4                Drug
                       Wkh                                                                Oepartment                          Budget to
                    Funding                                                                Request                            President



                                                                          , Refotmu-

                                                                            on Dept

                1              t   4   4I         4   4   4                              4                  4                 4
                               I   I              I   I    I                             1                  I                 I            T

                                        Page 18                                         GAO/GGD-90104               Federal   Drus Budget
Summary of ONDCP’sDrug Budget

             In March 1990 ONDCP distributed to department and agency budget offi-
             cials updated guidance on the fiscal year 1992 drug budget preparation
             process. To discuss the guidance and to explain the drug budget process,
             ONDCP convened a meeting of all budget directors from the affected agen-
             cies and departments. By holding the meeting, ONDCP hoped to eliminate
             confusion and formalize the process.

             As established in the fiscal year 1992 guidance, the drug budget submis-
             sion process is a two-tiered process. Documents are due to ONDCP at two
             different times. The first submission to ONDCP is made from the agency
             level, or program level if there is no agency, at the same time they
             submit the request to the respective department. The second submission
             to ONDCP, which is from the department level, is made shortly before the
             department submits its budget to OMB.

             According to ONDCP fiscal year 1992 drug budget requirements, drug
             budget submissions are to include the following:

             1. Transmittal letter: The transmittal letter from the head of the bureau
             or department to the Director of ONLXP should summarize the drug
             budget submission of each agency and identify broad policies and how
             they relate to the strategy, objectives and plans on which the estimates
             are based, and the total amounts requested to achieve the projected

             2. Introductory section: The introductory sections should summarize the
             agency budget proposal in the format contained in the fiscal year 1991
             Budget Summary, discuss in detail how the budget request relates to the
             strategy, justify the need for this federal effort, and provide general
             information such as whether new legislative authority will be required.
             This section should also include summary tables. The tables are to
             include (1) budget authority, outlays, and personnel requested for past
             year, current year, budget year, and budget year +l through budget
             year +4, by decision unit; (2) ranking of programs in order of decreasing
             priority; and (3) crosswalk to drug functional breakouts (organize pro-
             grams into one of the standard strategies, e.g., intelligence or interdic-
             tion, defined in the guidelines).

             3. Decision unit presentation: The guidance requires that, for each deci-
             sion unit with drug-related resources, information be provided about (1)
             the problems the program should address, the assessed effectiveness of
             the present program, including recent evaluation results, the impact of
             alternative funding levels of the accomplishment of objectives in the

             Page16                                      GAO/GGD-SO-104FederalDrugBudget

Letter                                                                                                1

Appendix I                                                                                          16
Summary of ONDCP’s
Drug Budget
Appendix II                                                                                         18
Federal Drug Budget
Appendix III
Federal Drug Budget
Totals Fiscal Years
1989 Through 1991
Appendix IV                                                                                         20
Major Contributors to
This Report
Glossary                                                                                            21


                        ADAMHA    Alcohol, Drug Abuse, and Mental Health Administration
                        FBI       Federal Bureau of Investigation
                        OMB       Office of Management and Budget
                        ONDCP     Office of National Drug Control Policy

                        Page 14                                   GAO/GGD90.104   Federal   Drug Budget

                  when the same equipment-for   example, a Coast Guard patrol boat-is
                  employed for more than one agency mission.

                  Despite these difficulties, we believe that having the capacity to track
                  drug expenditures with a reasonable level of precision is essential if
                  meaningful evaluations are to be made of the effectiveness of the
                  numerous and varied approaches currently being used to address the
                  drug problem. Such evaluations can help identify those approaches that
                  are most effective and contribute to better uses of scarce resources in
                  the future.

                  Accordingly, we recommend that the Director of ONDCP make sure that in
Recommendations   its current efforts to improve the drug budget process sufficient
                  emphasis is given to improving the government’s capacity to identify
                  and track drug expenditure data. We also recommend that he encourage
                  agencies with drug programs to explore options that will provide better
                  data with which to evaluate the effectiveness of their drug program

                  As agreed with the Subcommittee, we did not request official agency
Agency Comments   comments. We did, however, discuss the information we developed with
                  OMB, ONDCP, ADAMHA,Public Health Service, Department of Health and
                  Human Services, Department of Education, Coast Guard, Department of
                  Transportation, FBI, Department of Justice, and Department of Defense
                  officials. These officials generally agreed with the facts presented but,
                  as discussed above, expressed concerns about the feasibility and cost
                  consequences of developing significantly improved accounting data.

                  We plan no further distribution of this report until 30 days after the
                  date of this letter, unless you publicly announce its contents earlier. At
                  that time, we will send copies to the Director of the Office of National
                  Drug Control Policy and the Director of the Office of Management and
                  Budget. We will send copies to other interested parties upon request.

                  Page12                                       GAO/GGD90104FederalDRlgBudget

                      We asked officials at six agencies and departmentP to comment on the
Views on Improving    merits of establishing a distinct and separate appropriation account for
the Quality of Drug   each agency’s drug programs to improve the quality of drug funding
Funding Information   information. Agency, OMB, and ONDCPofficials suggested that the requi-
                      site resources could be better used to expand different programs or sup-
                      port program evaluati0n.l”

                      None of the officials we interviewed supported the concept of a separate
                      appropriation account. They reasoned that a separate appropriation
                      account for drug programs would mean a loss in flexibility in allocating
                      resources in multimission agencies and agencies with block grants,
                      where anti-drug initiatives can be closely interrelated with other pro-
                      grams. In multimission agencies, resources such as personnel, equip-
                      ment, and facilities can serve multiple purposes and must be directly
                      transferrable from one mission to another. For agencies providing grants
                      to states and localities, having a separate appropriation account would
                      not eliminate delays in reporting from the state and local level. They
                      said that a separate appropriation account would limit an agency’s
                      ability to respond to changing needs.

                      Officials also said that a separate appropriation account would require
                      substantial modifications in agency accounting systems. These changes
                      would demand increases in or reallocation of personnel and funding.
                      Agency and ONDCPofficials questioned whether the benefits that would
                      be derived from these adjustments would be worth the cost of imple-
                      menting them.

                      ONDCPofficials indicated that ONECP has taken no formal position on the
                      merits of having separate appropriation accounts for drug programs and
                      does not plan to implement such a change administratively. Their per-
                      ception is that this approach would be burdensome for the agencies and
                      may not be worthwhile or even achievable.

                      To better assess how anti-drug funds were being used, officials from OMB
                      and drug prevention and treatment agencies and departments empha-
                      sized the need for program evaluation. They questioned whether,
                      without such evaluations, an agency could determine which anti-drug
                      programs work, whether its drug budget funds are being spent in the

                      “FBI Departmentof Justice. ADAMHA,CoastGuard,Departmentof Defense,and Departmentof
                      ‘%ogram evaluation is the application of systematicmethodsto the assessment
                                                                                               of programconcep
                      tualization, implementatiw, and effectiveness.

                      Page 10                                              GAO/GGD-90164Federal Drug Budget

No Uniform Method Used to       During the past decade, agencies and departments used a variety of
Determine Agency Drug Budgets   methods to formulate drug budgets. Although ONDCP guidelines estab-
                                lished more uniform reporting requirements and a standardized
                                reporting format, because of the variety of ways drug programs con-
                                tinue to be funded, there is no uniform method used by all agencies to
                                determine agency drug budgets. For example, the FBI’Sdrug budget
                                includes 100 percent of its drug decision unit” within the Bureau’s
                                budget and the proportionate share of other FBI activities, such as
                                Forensic Services and Technical Field Support and Equipment, esti-
                                mated to support the FBI'S drug effort. In contrast, the Department of
                                Education’s drug budget includes all funds spent under the Drug Free
                                Schools and Communities Act and approximately 1.5 percent of the
                                funds spent on vocational rehabilitation.

                                According to ONDCP officials, ONDCP would like drug budget estimates
                                that are as precise and accurate as possible. The officials said they were
                                satisfied with what the guidelines had achieved for ONDCP'S first year of
                                operation, although some agencies had resisted the process.

                                Officials said that generally the obligation of federal drug program
Tracking the                    funds cannot be tracked with precision because agency accounting sys-
Obligation of Federal           tems track obligations by appropriation account, not by a specific pro-
Drug Dollars                    gram. Further, since drug programs are usually within an account that
                                includes a number of programs, drug funds remaining in the account at
                                the end of a fiscal year cannot be distinguished from funds used for non-
                                drug activities. For example, for fiscal year 1991 ADAMHA estimated that
                                one-third of the Alcohol, Drug Abuse, and Mental Health Block grant
                                will be used for drug programs, but since states are not required by law
                                to provide the federal government with an actual breakdown of how
                                these funds are disbursed across the three programs, the “actual” pro-
                                portion of the block grant obligated for drug programs will be an

                                ‘A decisionunit is that part of the basicprogramor organizationalentity for which budgetrequests
                                are prepared.

                                Page 8                                                   GAO/GGD-60-104Federal LhmgBudget

                             bureaus, and all independent agencies,’ but not from all program man-
                             agers. An ONDCPofficial said they modified the three-tier approach
                             because (1) ONDCP does not have the staff necessary to review hundreds
                             of submissions from program managers; (2) bureau/agency reviews of
                             program-level budget submissions eliminate excessive requests or
                             requests contrary to policy; and (3) since the 1988 law does not define
                             program manager, developing a definition would require weeks to
                             months of negotiations between ONDCPand the affected agencies and
                             departments. (See apps. I and 11.)

ONDCPImplemented Drug        Since the fiscal year 1991 budget cycle was underway before ONDCP
                             issued its guidelines, ONDCPshortened the drug budget process by
Budget Processin Fiscal      requesting drug budget submissions only from agencies and depart-
Year 1991, and the Process   ments. Officials said that agencies and departments had largely com-
Continues to Evolve          plied with the guideline requirements to submit drug budget requests to
                             ONDCP. Although the fiscal year 1991 drug budget information contained
                             in the National Drug Control Strategy: Budget Summary was standard-
                             ized and in the same format, according to officials the methodology used
                             by agencies to prepare their budget requests varied. Further, agencies
                             and departments continued to negotiate with ONDCPover the level and
                             allocation of their drug budgets to arrive at the final submissions
                             included in the fiscal year 1991 drug budget.

                             The process continues to evolve for fiscal year 1992, which will be the
                             first complete drug budget cycle for ONDCP. In March 1990, ONDCPmet
                             with agency and department budget officials to discuss drug budget sub-
                             mission requirements and the drug budget process for fiscal year 1992.
                             In addition, ONDCPplans to implement the certification process, man-
                             dated in the Anti-Drug Abuse Act, which requires the ONDCPDirector to
                             certify whether each drug budget submission is adequate to implement
                             the objectives of the national drug strategy.

                             ONDCPofficials plan to continue to modify the drug budget formulation
                             process in order to improve the process and secure more and better drug
                             budget information. ONDCPofficials expect, however, that it may take 2
                             to 3 years before the process is running smoothly, because of the unique
                             nature of ONDCP’Sinvolvement at several points in the budget process.

                             ‘Departments,independentagencies,and bureausrefers to thosedesignatedby the Presidentas
                             National Drug Control Agenciesin the National Drug Control Strategy.

                             Page 6                                                GAO/GGD96-164    Federal   Lhmg Bud@

l   the process and limitations of tracking and monitoring drug program
    obligations, unobligated balances,” and outlays; and
l   the views of officials from five selected agencies on whether providing
    separate appropriation accounts for each agency’s drug program would
    improve the quality of drug funding information.

    Since you asked us only to focus on the executive branch, we do not
    describe the role of Congress in the drug budget formulation process.

    To meet our objectives, we interviewed OMB and ONDCPofficials and
    budget officials at five agencies and their respective departments. The
    following agencies were judgmentally selected because they reflect a
    variety of types of drug programs (e.g., prevention, treatment, and law
    enforcement), and drug budget formulation processes: the Alcohol, Drug
    Abuse, and Mental Health Administration (ADAMHA), Department of
    Health and Human Services; the Department of Education; the Depart-
    ment of Defense; the Federal Bureau of Investigation (FBI), Department
    of Justice; and the Coast Guard, Department of Transportation. We also
    collected and reviewed relevant documents, including samples of agency
    drug budget submissions, memoranda laying out guidelines for drug
    budget preparation, general background publications about the roles
    and responsibilities of specific agencies, and descriptions of agency drug

    From these interviews and documents, we compiled information on how
    ONDCPdeveloped the fiscal year 1991 federal drug budget; how the five
    agencies, selected for the purpose of example, formulated their respec-
    tive drug budgets; what drug budget information was available; and
    how the executive branch monitored the drug program expenditures.
    We also identified the changes instituted in the drug budget formulation
    process; changes in the processes used to develop the drug budgets of
    each of the five selected agencies; the role of ONDCPand the National
    Drug Control Strategy in carrying out these changes; and how these
    changes have affected available drug budget information. For fiscal
    year 1992, we obtained information about the changes ONDCPwill make
    in the federal drug budget formulation process.

    After obtaining and reviewing the information, we confirmed our under-
    standing of the figures and processes with the officials interviewed. We
    did our work from October 1989 through August 1990 using generally
    accepted government. auditing standards.

    “Unobligatedbalancesrepresentthat portion of budgetauthority that hasnot yet beenobligated.

    Page 4                                                  GAO/GGLHI@104Federal Drug Budget

             continue to refine the guidelines and expect that it may take 2 to 3 years
             before the process is running smoothly.

             The legislatively mandated drug budget process has increased the infor-
             mation available for monitoring and tracking drug program funding, but
             the data still have limitations. As we found in the five agencies
             reviewed, drug budget, obligation, and expenditure data are usually esti-
             mates and cannot be tracked or monitored precisely through agency
             accounting systems because drug programs are generally not separate
             accounts but are combined with other programs in an account.

             Agency, ONDCP, and OMB officials raised various concerns about loss of
             flexibility that would result from, and the resources that would be
             required in, establishing a separate appropriation account to improve
             the quality of drug funding information. They preferred to devote more
             attention to program evaluation. We believe both objectives, knowing
             how anti-drug funds are spent and developing the capacity to learn
             whether anti-drug programs are working, are important. Options that
             will provide better data with which to evaluate the effectiveness of drug
             program expenditures should be further explored.

             The process used to develop the federal drug budget has changed during
Background   the past decade. For fiscal years 1981 through 1990, the Federal Drug
             Abuse Budget Summary was prepared through the efforts of the OMB;
             the (now defunct) White House Drug Policy Office; and the National
             Drug Enforcement Policy Board, which was succeeded by the National
             Drug Policy Board, from data collected from federal agencies. OMB dis-
             tributed these summaries for fiscal years 1981 through the 1990 budget
             request to executive branch and interested congressional agencies.
             According to a 1985 GAO report, the drug abuse budget summary was an
             informal report describing agencies’ budget authority and outlays in the
             drug law enforcement and prevention and treatment areas.3 The report
             also showed that there were no specific criteria for the agencies to
             follow in allocating drug-related expenditures, nor did reporting agen-
             cies prepare formal documentation.4

             “Outlays includeexpendituresof federal funds, arising when checksare issuedand/or cashis
             4ReportedFederalDrug AbuseExpenditures-Fiscal Years 1981to 1985(GAO/GGD85-61,June 3,

             Page 2                                                  GAO/GGD9&104      Federal   Drug Budget