oversight

Budget Process: Comments on S.261--Biennial Budgeting and Appropriations Act

Published by the Government Accountability Office on 1997-04-23.

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

                          United States General Accounting Office

GAO                       Testimony
                          Before the Committee on Governmental Affairs, United
                          States Senate




For Release on Delivery
Expected at
10 a.m.
                          BUDGET PROCESS
Wednesday,
April 23, 1997

                          Comments on S. 261—
                          Biennial Budgeting and
                          Appropriations Act
                          Statement of Susan J. Irving
                          Associate Director, Budget Issues
                          Accounting and Information Management Division




GAO/T-AIMD-97-84
                        Mr. Chairman and Members of the Committee:

                        Thank you for inviting me back to join you as you consider changing the
                        budget process from an annual to a biennial cycle. When I appeared before
                        you last July I presented testimony on some of the broad issues involved in
                        such a shift.1 As you requested, I will first briefly summarize state
                        experiences and then focus on provisions regarding GAO, the Budget
                        Enforcement Act (BEA), and for the Government Performance and Results
                        Act (GPRA). I would ask also that my July 1996 statement be included in the
                        record along with this statement.


                        S. 261 would change the cycle for the President’s budget, for the budget
S. 261 Provisions and   resolution, for enactment of appropriations, and for authorizations to a
General Observations    biennial cycle. The President would be required to submit a 2-year budget
                        at the beginning of the first session of a Congress; this budget would
                        contain proposed levels for each of the 2 fiscal years in the biennium and
                        planning levels for the 4 years beyond that. The budget resolution and
                        reconciliation instructions would also establish binding levels for each
                        year in a given biennium—and for the sum of the 6-year period.

                        The bill requires appropriations to be enacted every 2 years. It contains a
                        two-pronged mechanism to ensure this. First, it provides for a point of
                        order against appropriation bills not covering 2 years. Second, if that does
                        not work, S.261 provides for an automatic second-year appropriation at
                        the level of the first year of the biennium. During the first year of the
                        biennium, authorizations and revenue legislation would be expected to
                        wait until completion of the budget resolution and appropriations bills. At
                        the beginning of the second session of the Congress the President would
                        submit a “mid-biennium review.”

                        This second year then would be devoted to authorizations, which would
                        be required to cover at least 2 years; to revenue legislation, which also
                        would be required to cover at least 2 years; and to oversight of federal
                        programs. S. 261 would also change some reporting requirements in GPRA
                        and add some new reports. Attached to this testimony are two illustrations
                        of the proposed timelines for both budget and GPRA reports.



                        1
                          Budget Process: Issues in Biennial Budget Proposals (GAO/T-AIMD-96-136, July 24, 1996). Our other
                        testimony on biennial budget proposals includes Budget Policy: Biennial Budgeting for the Federal
                        Government (GAO/T-AIMD-94-4, October 7, 1993); Budget Process: Some Reforms Offer Promise
                        (GAO/T-AIMD-94-86, March 2, 1994); and Budget Process: Biennial Budgeting for the Federal
                        Government (GAO/T-AIMD-94-112, April 28, 1994).



                        Page 1                                                                          GAO/T-AIMD-97-84
As we read the legislation, it does not direct changes in the period of
availability of appropriated funds. The bill consistently refers to each fiscal
year within a biennium. Although appropriations bills must cover a 2-year
period, the bill seems to require separate appropriations for each of the 2
fiscal years within the biennium. It would seem, therefore, that
appropriations committees could—as they do today—provide funds
available for one, 2 or more years. This serves to remind us that there is a
distinction between the frequency with which the Congress makes
appropriations decisions and the period for which funds are available to
an agency. Even in today’s annual appropriations cycle, the Congress has
routinely provided multiple-year or no-year appropriations for accounts or
for projects within accounts when it seemed to make sense to do so. As I
noted in my previous testimony, about two-thirds of budget accounts on
an annual appropriation cycle contain multiple-year or no-year funds. In
addition, for those entities for which the Congress has recognized a
programmatic need to have appropriations immediately available at the
beginning of the fiscal year (such as grants to states for Medicaid), the
Congress has accommodated this need with advance appropriations. The
second year of the proposed biennium seems, in effect, to provide advance
appropriations to all programs.

Whether a biennial budget and appropriations cycle truly saves time for
agency officials and reduces the time members of the Congress spend on
budget and appropriations issues will depend heavily on how
mid-biennium changes are viewed. Will there be a presumption against
supplementals? Will changes in the second year be limited to responses to
large and significant, unforeseen or unforeseeable events? Even with an
annual cycle the time lag between making initial forecasts and budget
execution creates challenges. Indeed, increased difficulty in forecasting
was one of the primary reasons states gave for shifting from biennial to
annual budget cycles.2

Even in this era of discretionary spending caps, the Congress has
demonstrated the need to address changing conditions among the
numerous budget accounts and program activities of the federal
government. Although in the aggregate there may be little change,
individual agencies or accounts have seen significant changes from year to
year. Some statistics may give an indication of the extent of that change.
While total current appropriations grew by only 0.9 percent between 1994
and 1995, more than half of all budget accounts that received current
appropriations had net changes greater than plus or minus 5 percent. More

2
 GAO/T-AIMD-96-136, p. 11.



Page 2                                                        GAO/T-AIMD-97-84
                    recently, between 1996 and 1997, almost 55 percent of budget accounts
                    with current appropriations experienced changes of more than plus or
                    minus 5 percent although total current appropriations declined by about
                    0.5 percent. Because these are account-level statistics, it is possible that
                    annual changes at the program activity level may have been even greater.

                    Dramatic changes in program design or agency structure, such as those
                    considered in the last Congress and those being considered now, will
                    make budget forecasting more difficult. For biennial budgeting to exist in
                    reality rather than only in theory, the Congress and the President will have
                    to reach some agreement on how to deal with the greater uncertainty
                    inherent in a longer budget cycle and/or a time of major structural change.

                    You also asked me to review the information on state experiences with
                    biennial budgeting and to comment on any issues I thought pertinent in
                    considering S. 261, with particular attention to (1) the requirement
                    directing that “during the second session of each Congress, the
                    Comptroller General shall give priority to requests from Congress for
                    audits and evaluations of Government programs and activities” and
                    (2) issues involved in the integration of GPRA into a biennial budget cycle.
                    Let me turn now to these areas.


                    Advocates of biennial budgeting often point to the experience of individual
State Experiences   states. In looking to the states it is necessary to disaggregate them into
With Biennial       several categories. In 1996, when we last looked at this data, 8 states had
Budgeting           biennial legislative cycles and hence necessarily biennial budget cycles.3
                    As the table below shows, the 42 states with annual legislative cycles
                    present a mixed picture in terms of budget cycles: 27 describe their budget
                    cycles as annual, 12 describe their budget cycles as biennial, and 3
                    describe their budget cycles as mixed. The National Association of State
                    Budget Officers reports that those states that describe their system as
                    “mixed” have divided the budget into two categories: that for which
                    budgeting is annual and that for which it is biennial.




                    3
                    The following states have biennial legislative cycles: Arkansas, Kentucky, Montana, North Carolina,
                    North Dakota, Nevada, Oregon, and Texas.



                    Page 3                                                                          GAO/T-AIMD-97-84
Table 1: States With an Annual
Legislative Cycle                                                                  States with a
                                 States with an                                    biennial budget         States with a mixed
                                 annual budget cycle                               cycle                   budget cycle
                                 Alaska                   Mississippi              Connecticut             Arizona
                                 Alabama                  New Jersey               Hawaii                  Kansas
                                 California               New Mexico               Indiana                 Missouri
                                 Colorado                 New York                 Maine
                                 Delaware                 Oklahoma                 Minnesota
                                 Florida                  Pennsylvania             Nebraska
                                 Georgia                  Rhode Island             New Hampshire
                                 Iowa                     South Carolina           Ohio
                                 Idaho                    South Dakota             Virginia
                                 Illinois                 Tennessee                Washington
                                 Louisiana                Utah                     Wisconsin
                                 Maryland                 Vermont                  Wyoming
                                 Massachusetts            West Virginia
                                 Michigan

                                 Connecticut has changed its budget cycle from biennial to annual and
                                 back to biennial. In the last 3 decades, 17 other states have changed their
                                 budget cycles: 11 from biennial to annual, 3 from annual to mixed, and 3
                                 from annual to biennial.

                                 Translating state budget laws, practices, and experiences to the federal
                                 level is always difficult. As we noted in our review of state balanced
                                 budget practices,4 state budgets fill a different role, may be sensitive to
                                 different outside pressures, and are otherwise not directly comparable. In
                                 addition, governors often have more unilateral power over spending than
                                 the President does.

                                 However, even with those caveats, the state experience may offer some
                                 insights for your deliberations. Perhaps most significant is the fact that
                                 most states that describe their budget cycles as biennial or mixed are
                                 small and medium sized. Of the 10 largest states in terms of general fund
                                 expenditures, Ohio is the only one with an annual legislative cycle and a
                                 biennial budget. According to a State of Ohio official, every biennium two
                                 annual budgets are enacted, and agencies are prohibited from moving



                                 4
                                  Balanced Budget Requirements: State Experiences and Implications for the Federal Government
                                 (GAO/AFMD-93-58BR, March 26, 1993).



                                 Page 4                                                                       GAO/T-AIMD-97-84
                      funds across years. In addition, the Ohio legislature typically passes a
                      “budget corrections bill.”5

                      A few preliminary observations can be made from looking at the explicit
                      design of those states that describe their budget cycles as “mixed” and the
                      practice of those that describe their budget cycles as “biennial.” Different
                      items are treated differently. For example, in Missouri, the operating
                      budget is on an annual cycle while the capital budget is biennial. In
                      Arizona, “major budget units”—the agencies with the largest
                      budgets—submit annual requests; these budgets are also the most volatile
                      and the most dependent on federal funding. In Kansas, the 20 agencies that
                      are on a biennial cycle are typically small, single-program or
                      regulatory-type agencies that are funded by fees rather than general fund
                      revenues. In general, budgeting for those items that are predictable is
                      different from budgeting for those items subject to great volatility whether
                      due to the economy or changes in federal policy.


                      Section 8 of S. 261 directs that “During the second session of each
Provision Regarding   Congress, the Comptroller General shall give priority to requests from
GAO                   Congress for audits and evaluations of Government programs and
                      activities.”

                      GAO  has long advocated regular and rigorous congressional oversight of
                      federal programs. Such oversight should examine both the design and
                      effectiveness of federal programs and the efficiency and skill with which
                      they are managed. Indeed, much of GAO’s work is undertaken with such
                      oversight purposes in mind. For example, financial management is one
                      area in which GAO assists the Congress with its oversight responsibilities.
                      The Chief Financial Officers (CFO) Act of 1990, as amended, directs that 24
                      major agencies have audited annual financial statements beginning with
                      fiscal year 1996. It also requires the preparation of annual governmentwide
                      financial statements and calls for GAO to audit these statements beginning
                      with fiscal year 1997. As you know, there have been serious problems with
                      financial management processes in many agencies. We have been both
                      auditing these agencies and working with them to improve the quality of
                      their financial management. Careful management of taxpayer funds is
                      critical to ensuring proper accountability and keeping the faith of the


                      5
                       Ohio has also created a Controlling Board that under certain circumstances, can authorize transfer of
                      funds between items and across fiscal years within an agency. The Board also receives an
                      appropriation that it can allocate to meet unforeseen contingencies. The Board is a joint, bipartisan
                      committee of legislators chaired by the Director of Ohio’s Office of Management and Budget.



                      Page 5                                                                           GAO/T-AIMD-97-84
    American people. These annual audited financial statements can serve as
    an important oversight tool.

    Good evaluation often requires a look at a program over some period of
    time or a comparison of several approaches. This means that in order for
    the results of audits and evaluations to be available for the second year of
    the biennium, it is important for the committees and GAO to work together
    in the first year—or even in the prior biennium—to structure any study. As
    part of our planning process, we strive to maintain an ongoing dialogue
    with Members and staff to identify areas of current and emerging interest
    so that the work is completed and we are ready to report when the results
    will be most useful. It is important to our ability to assist you that we
    understand your areas of concern and be able to accumulate a body of
    knowledge and in-depth analysis in those areas.

    Mr. Chairman, GAO stands eager to assist the Congress in the performance
    of its oversight responsibilities at all times. Many of you and your
    colleagues in the House and the Senate currently use us in this way.

    Let me note just a few examples.

•   Our work on the Internal Revenue Service (IRS) Tax System Modernization
    program has uncovered major flaws, such as the lack of basic elements
    needed to bring it to a successful conclusion. We have worked closely with
    this Committee, other IRS oversight committees, and the Appropriations
    Committees in an effort to move IRS toward (1) formulating a much needed
    business strategy for maximizing electronic filings, (2) implementing a
    sound process to manage technology investments, (3) instituting
    disciplined processes for software development and acquisition, and
    (4) completing and enforcing an essential systems architecture including
    data and security subarchitectures.
•   Our work regarding aviation safety and security has noted that serious
    vulnerabilities exist in both domestic and international aviation systems.
    Recent experiences during 1996 have served to raise the consciousness of
    the Congress, the Administration, and the public of the need to expand the
    existing margin of safety. Recent proposals have merit and would
    fundamentally reinvent the Federal Aviation Administration, but
    challenges remain, including key questions about how and when the
    recommendations would be implemented, how much it will cost to
    implement them, and who will pay the cost.
•   GAO reviews of the Supplemental Security Income program have
    highlighted several long-standing problem areas: (1) determining initial



    Page 6                                                      GAO/T-AIMD-97-84
                         and continuing financial eligibility for beneficiaries, (2) determining
                         disability eligibility and performing continuing disability reviews, and
                         (3) inadequate return-to-work assistance for recipients who may be
                         assimilated back into the work force.
                     •   We have reported on long-standing serious weaknesses in the Department
                         of Defense’s (DOD) financial operations that continue not only to severely
                         limit the reliability of DOD’s financial information but also have resulted in
                         wasted resources and undermined its ability to carry out its stewardship
                         responsibilities. No military service or other major DOD component has
                         been able to withstand the scrutiny of an independent financial statement
                         audit.

                         These, and other areas included in our High-Risk Series,6 which we
                         prepare for each new Congress, are examples of our efforts to assist the
                         Congress in its oversight responsibilities. In fiscal year 1996, almost
                         80 percent of GAO’s work was done at the specific request of the Congress.
                         GAO testified 181 times before 85 committees and subcommittees,
                         presented 217 formal congressional briefings, and prepared 908 reports to
                         the Congress and agency officials.

                         Existing provisions of law requiring GAO to assist the Congress are
                         sufficiently broad to encompass requests such as those envisioned in
                         Section 8 of S. 261. However, the decision about whether to modify the
                         existing provisions to add a more specific requirement is appropriately a
                         decision for the Congress to make.


                         Before turning to the interrelationship of this proposal and GPRA, let me
Budget Enforcement       note a few BEA-related issues that would need to be addressed should S.
Act Issues               261 be enacted.

                         The bill explicitly modifies the rules for the pay-as-you-go (PAYGO)
                         scorecard in the Senate by specifying three time periods during which
                         deficit neutrality is required: the biennium covered by the budget
                         resolution, the first 6 years covered by the budget resolution, and the 4
                         fiscal years after those first 6 years. That is, it retains the form of the
                         current rules. The bill, however, is silent on the existence of discretionary
                         spending limits. It does specify that in the Senate, the joint explanatory
                         statement accompanying the conference report on the budget resolution
                         must contain an allocation to the Appropriations Committee for each
                         fiscal year in the biennium. One might infer from this that if discretionary

                         6
                          High-Risk Series: An Overview (GAO/HR-97-1, February 1997).



                         Page 7                                                         GAO/T-AIMD-97-84
                  caps are to be extended, they will continue to be specified in annual terms.
                  However, this bill does not extend the caps.

                  Other issues regarding the interaction of S. 261 and BEA (assuming its
                  extension) also need to be considered. Would biennial budgeting change
                  the timing of BEA-required sequestration reports? How would
                  sequestrations be applied to the 2 years in the biennium and when would
                  they occur? For example, if annual caps are maintained and are exceeded
                  in the second year of the biennium, when would the Presidential Order
                  causing the sequestration be issued? Would the sequestration affect both
                  years of the biennium? These questions may not necessarily need to be
                  answered in this bill, but they will need to be considered if BEA is extended
                  under a biennial budgeting schedule.

                  There are a number of other smaller technical issues on which we would
                  be glad to work with your staff should you wish.


                  Let me turn now to the interaction between this proposal and the
The Government    Government Performance and Results Act (GPRA). S. 261 makes a number
Performance and   of changes to GPRA—most designed to make the requirements of GPRA
Results Act       consistent with the proposed biennial budget cycle, but others that seek to
                  make substantive revisions to GPRA. I’ll discuss each separately.

                  GPRA  is part of a statutory framework for addressing long-standing
                  management challenges and helping the Congress and the executive
                  branch make the difficult trade-offs that the current budget environment
                  demands. The essential elements of this framework include, in addition to
                  GPRA, the CFO Act, as amended, and information technology reform
                  legislation, including the Paperwork Reduction Act of 1995 and the
                  Clinger-Cohen Act. These statutes collectively form the building blocks to
                  improved accountability—both for the taxpayer’s dollar and for results.

                  GPRA,  the centerpiece of this statutory framework, is intended to promote
                  greater confidence in the institutions of government by encouraging
                  agency managers to shift their attention from traditional concerns, such as
                  staffing and workloads, toward a single overriding issue: results. GPRA
                  requires agencies to set goals, measure performance, and report on their
                  accomplishments. It also defines a set of interrelated activities and
                  reporting requirements, which are designed to make performance
                  information more consistently available for congressional oversight and
                  resource allocation processes. Specifically, GPRA requires:



                  Page 8                                                       GAO/T-AIMD-97-84
•   strategic plans to be issued for virtually all executive agencies by
    September 30, 1997. The plans are to cover at least a 5-year period; be
    updated at least every three years; and describe the agency’s mission, its
    outcome-related goals and objectives, and how the agency will achieve its
    goals through its activities and available resources.
•   annual performance plans that include performance indicators for the
    outputs, service levels, and outcomes of each program activity in an
    agency’s budget. The first performance plans are to cover fiscal year 1999
    and will be submitted to the Congress in February 1998, along with a
    governmentwide plan prepared by the Office of Management and Budget
    (OMB).
•   annual performance reports that compare actual performance to goals and
    indicators established in annual performance plans, and that explain the
    reasons for variance and what actions will be taken to improve
    performance. The first reports, covering fiscal year 1999, will be issued to
    the President and the Congress no later than March 31, 2000.

    The Congress recognized that implementing GPRA will not be easy.
    Accordingly, GPRA incorporates several critical design features—phased
    implementation, pilot testing, and iterative planning and reporting
    processes—designed to temper immediate expectations and allow for an
    orderly but well-paced transition. Following the completion in 1996 of
    about 70 pilot projects, OMB has been working with federal agencies to
    ensure that the first strategic plans are submitted to the Congress by the
    end of September and performance plans 5 months later with the
    President’s fiscal year 1999 budget submission. S. 261 capitalizes on these
    initial GPRA implementation efforts by making the effective date of its
    proposed changes—March 31, 1998—after the first strategic plans and
    performance plans have been completed and submitted to the Congress.

    Other changes in timelines proposed in S. 261 also appear consistent with
    GPRA requirements. For example, S. 261 requires strategic plans in
    September 2000 consistent with its proposed biennial cycle. This should
    pose no problem for agencies, which under, current GPRA provisions, are
    expected to complete updates by this date of the plans submitted in
    September 1997. Similarly, changing the governmentwide performance
    plan to the year 2000 merely updates GPRA timelines to reflect the biennial
    timelines proposed by S. 261.

    S.261 also proposes several substantive changes to GPRA, including revised
    requirements for agency performance plans and new requirements for
    preliminary agency performance plans and governmentwide performance



    Page 9                                                      GAO/T-AIMD-97-84
reports. Although it would be important to adjust the timelines in GPRA
should the Congress shift to a biennial budget process, the proposals for
substantive changes can be considered separately. As a group, they raise
the question of whether the Congress wishes to make changes in GPRA
during the first implementation cycle. Individually, they raise other
issues—which I will discuss below.

This bill proposes adding several new requirements to the annual agency
performance plans currently required by GPRA beyond changing them to a
biennial cycle, including (1) adding an executive summary focusing on the
most important goals of an agency, but limited to a maximum of 10 goals
and (2) requiring that the Congress be consulted during the preparation of
these plans. The bill also adds a new reporting requirement for draft
preliminary performance plans. While the change to a biennial cycle is
consistent with the overall goals of S. 261, the bill is silent as to whether
performance goals and indicators associated with each program activity
would be required for each fiscal year. However, as I noted earlier,
because the bill appears to require separate appropriations for each year
of the biennium, annual performance goals and indicators, as now
required for GPRA performance plans, would presumably still be required.

Requiring an executive summary within annual performance plans makes
sense. However, it is worth considering whether limiting an agency’s
performance goals to a fixed number—10 in S. 261—could prove
unnecessarily restraining. OMB guidance to date has largely refrained from
specifying form and content standards for GPRA documents, allowing
agencies substantial discretion while emphasizing the need for clarity and
completeness. We generally agree with that approach, at least in the
formative years of GPRA. Further, we have endorsed OMB pilot projects on
accountability reports, which seek to integrate a wide range of required
reports. A decision to incorporate fixed form and content rules in
statutory language might better be delayed until after several years’
experience. While we agree with the premise of S. 261 that performance
goals should be reduced to a “vital few,”7 it may make sense to give
agencies the flexibility to define the absolute number shown in their plans
within the circumstances of their program activities.

As noted above, S. 261 proposes two additional changes to GPRA’s
requirements regarding the preparation of performance plans. First, it
adds a requirement that agencies consult the Congress in the preparation

7
 Executive Guide: Effectively Implementing the Government Performance and Results Act
(GAO/GGD-96-118, June 1996).



Page 10                                                                     GAO/T-AIMD-97-84
not only of their strategic plans but also of their performance plans.
Second, it also adds a new reporting requirement: agencies would be
required to submit preliminary drafts of performance plans for the
upcoming biennium to their committees of jurisdiction in March of each
even-numbered year.

We have strongly endorsed the need for the Congress to be an active
participant in GPRA8 and are currently assisting the Congress in its ongoing
consultations on the development of agency strategic plans. Currently,
GPRA requires congressional consultation for strategic plans but not for
annual performance plans. As essential components of the President’s
budget development process, an Administration is likely to see biennial
performance plans as documents captured under the established policy of
administrative confidentiality prior to formal transmission of the
President’s budget to the Congress. Moreover, because these biennial
plans would accompany the President’s budget submission, they would
likely become the basis for extensive discussions, both as authorizing
committees prepare their views and estimates to submit to the Budget
Committees and as part of the budget and appropriations process.

The new requirement that agencies submit preliminary drafts of
performance plans for the upcoming biennium to their committees of
jurisdiction raises related but not identical issues. Currently, GPRA
performance plans are expected to explicitly establish goals and indicators
for each program activity in an agency’s budget request, thus allowing the
Congress to associate proposed performance levels with requested budget
levels. The proposal in this bill appears to require a similar level of
specification almost a year before the President submits a budget for that
period. It is unlikely that agencies would be able to provide any degree of
specificity with this draft plan. The lengthening of the budget cycle might
raise one additional question about the cycle for performance plans:
Should there be updates in mid-biennium? Currently, GPRA allows but does
not require updated performance plans, but that decision was made on the
assumption of an annual cycle. Whether performance plans should be
updated is part of two larger issues: (1) What is Congress’ view about
changes in mid-biennium? and (2) Should GPRA be substantively changed
during its initial phase-in cycle?

Finally, S. 261 proposes that a biennial governmentwide performance
report be submitted as part of the President’s biennial budget request. This

8
 Managing for Results: Achieving GPRA’s Objectives Requires Strong Congressional Role
(GAO/T-GGD-96-79, March 6, 1996).



Page 11                                                                       GAO/T-AIMD-97-84
             report would compare “actual performance to the stated goals” as
             expressed in previous governmentwide performance plans. This proposal
             raises both substantive and operational questions. The underlying premise
             of GPRA is that the day-to-day activities of an agency should be directly tied
             to its annual and strategic goals. GPRA performance reports are to be
             linked, just as the goals and indicators of performance plans are linked, to
             an agency’s activities. A governmentwide performance report would need
             to be fundamentally different. If the Congress wishes to require such a
             report, careful consideration should be given both to its likely content and
             to its timing. As to content, the question arises: Would a governmentwide
             report become a report on selected national indicators, and how would
             they be selected? If the governmentwide performance report is envisioned
             not as a rollup of agency reports but rather as a broad report on how well
             government has performed, then the question arises as to whether it is tied
             most appropriately to the President’s budget, as proposed in S. 261, or to a
             narrative discussion associated with the consolidated financial statement
             required by the CFO Act of 1990, as amended.


             Mr. Chairman, we have previously testified that the decision to change the
Conclusion   entire budget process to a biennial one is fundamentally a decision about
             the nature of congressional oversight. Biennial appropriations would be
             neither the end of congressional control nor the solution to many budget
             problems.

             Whether a biennial cycle offers the benefits sought will depend heavily on
             the ability of the Congress and the President to reach agreement on how to
             respond to the uncertainties inherent in a longer forecasting period and on
             the circumstances under which changes should be made in mid-biennium.
             If biennial appropriations bills are changed rarely, the planning advantages
             for those agencies that do not now have multiyear or advance
             appropriations may be significant.

             Whether a biennial cycle would in fact reduce congressional workload and
             increase the time for oversight is unclear. A great many policy issues
             present themselves in a budget context—one thinks of welfare reform and
             farm policy. It will take a period of adjustment and experimentation and
             the results are likely to differ across programs.

             Finally, we are pleased to see so much thought go into the integration of
             GPRA into this process. GPRA represents a thoughtful approach to
             systematizing serious and substantive dialogue about the purposes of



             Page 12                                                      GAO/T-AIMD-97-84
government programs and how they operate. Today, I have raised some
issues that I think need careful attention should you decide to move to a
biennial budget process while GPRA is being implemented. I have tried to
differentiate between those changes necessary for consistency with a
biennial cycle and those which represent substantive changes to GPRA
independent of such a change.

We, of course, stand ready to assist you as you proceed.




Page 13                                                     GAO/T-AIMD-97-84
Attachment I

Schedule of Key Events as Proposed By
S. 261


Date                                          Budget event                                    GPRA event
No later than first Monday in February 2001   President submits budget with proposals         With President’s budget: biennial
                                              for FY 2002-03 and out-year information for     governmentwide performance plan;
                                              FY 2004-07                                      governmentwide performance report

                                                                                              Agencies should submit biennial
                                                                                              performance plans
2/15/01                                       CBO report to Budget Committees
Within 6 weeks after budget submission        Committees submit views and estimates to        Views and estimates “may” reflect
                                              Budget Committees                               review of performance plans and
                                                                                              performance reports of agencies within
                                                                                              committee’s jurisdiction
3/31/01                                                                                       Agency performance reports to the
                                                                                              Congress
No later than 4/1/01                          Biennial budget resolution reported
No later than 5/15/01                         Biennial budget resolution adopted
5/15/01                                       House may begin considering biennial
                                              appropriations bills
No later than 6/10/01                         House Appropriations Committee reports
                                              last biennial appropriations bill
No later than 6/30/01                         The Congress completes action on biennial
                                              appropriations
No later than 8/1/01                          The Congress completes action on
                                              reconciliation legislation
10/1/01                                       FY 2002 begins
February 2002                                 Mid-biennium review submitted by OMB
2/15/02                                       CBO report to Budget Committees
3/31/02                                                                                       Agencies submit annual performance
                                                                                              reports for previous fiscal year [in this
                                                                                              example, FY 2001]

                                                                                              Agencies submit preliminary
                                                                                              performance plan covering next biennial
                                                                                              period [in this example, FY 2003-04]
Last day of session                           Authorizations completed for
                                              next biennium [FY 2004-05]
                                              Note: Assumes GPRA strategic plans in September 2000; new GPRA provisions are in boldface.




                                              Page 14                                                                    GAO/T-AIMD-97-84
Attachment II

Proposed Timelines




                                                                                     Pla s i o n
                                          Pla s i o n




                                                  d




                                                                                             d
                                             lete




                                                                                       l e te
                                                                               nce b m i s
                                                                                         ce




                                                                                         n
                                   an b m i s
                                             n




                                                                                     an
                                          mp




                                                                                    mp
                                                                                     w




                                                                        orm t S u
                                                                                  rm
                                                                                 vie




                                                                                   n
                                         n
                             orm S u




                                      Co




                                                                                Co
                                      ce




                                                                             utio
                                    utio




                                                                              rfo
                                      0




                                                                                1




                                                                                2
                                                                             Re
                                   00




                                                                            00




                                                                            00
                                                                             e
                          erf d g e t




                                   ns




                                                                            ns
                                                                             a
                                                                          Pe




                                                               d P udg


                                                                         sol
                                sol




                                                                          m
                               Y2




                                                                        Y2




                                                                        Y2
                              atio




                                                                       atio
                                                                     n iu

                                                           n D ary




                                                                     Re
                            Re
                  an 0 1 B u




                                                                      B
                           fF




                                                                    fF




                                                                    fF
                                                                   erf
                          pri




                                                                   pri
                                                                 /03
                                                                  en

                                                        Pla i m i n
                                                                 ue




                                                                  et
                         et



                      rt o




                                                               rt o




                                                               rt o
                     pro




                                                             pro
                    dP




                                                             dg
                     dg




                                                             -Bi




                                                            02
                       /
                   00




                                                              l
                  Sta




                                                          Sta




                                                          Sta
                                                           an
                                                         Pre
                  Ap




                                                          Bu

                                                          Ap
                  Bu




                                                         Mid




Calendar
  Year              2/15 5/15 6/30 10/1                 2/15 3/31        10/1      2/15 5/15 6/30 10/1
                1/99                              1/00                          1/01                     1/02


                                           106th Congress                                        107th Congress
Sessions
                        First Session                    Second Session                  First Session
   of
Congress




Proposed                                                            00/01 Biennium
Biennium                                                FY 2000                        FY 2001




                9/97 Strategic Plans                                            Strategic Plan Through 2006
  GPRA
Time-line
                1999 Performance Year         2000 Performance Year             2001 Performance Year




                                                  Page 15                                                         GAO/T-AIMD-97-84
Related GAO Products


              Performance Budgeting: Past Initiatives Offer Insights for GPRA
              Implementation (GAO/AIMD-97-46, March 27, 1997).

              Managing for Results: Using GPRA to Assist Congressional and Executive
              Branch Decisionmaking (GAO/T-GGD-97-43, February 12, 1997).

              High-Risk Series: An Overview (GAO/HR-97-1, February 1997).

              High-Risk Series: Quick Reference Guide (GAO/HR-97-2, February 1997).

              Budget Process: Issues in Biennial Budget Proposals (GAO/T-AIMD-96-136,
              July 24, 1996).

              Budget Issues: History and Future Directions (GAO/T-.Al.MD-95-214,
              July 13, 1996).

              Budget Process: Evolution and Challenges (GAO/T-AIMD-96-129, July 11, 1996).

              Managing for Results: Key Steps and Challenges In Implementing GPRA In
              Science Agencies (GAO/T-GGD/RCED-96-214, July 10, 1996).

              Correspondence to Chairman Horn, Information on Reprogramming
              Authority and Trust Funds (GAO/AIMD-96-102R, June 7, 1996).

              Executive Guide: Effectively Implementing the Government Performance
              and Results Act (GAO/GGD-96-118, June 1996).

              Budget and Financial Management: Progress and Agenda for the Future
              (GAO/T-AIMD-96-80, April 23, 1996).

              Managing for Results: Achieving GPRA’s Objectives Requires Strong
              Congressional Role (GAO/T-96-79, March 6, 1996).

              GPRA   Performance Reports (GAO/GGD-96-66R, February 14, 1996).

              Financial Management: Continued Momentum Essential to Achieve CFO
              Act Goals (GAO/T-AIMD-96-10, December 14, 1995).

              Budget Process: Issues Concerning the Reconciliation Act (GAO/AIMD-95-3,
              October 7, 1995).




              Page 16                                                       GAO/T-AIMD-97-84
Related GAO Products




Budget Account Structure: A Descriptive Overview (GAO/AIMD-95-179,
September 18, 1995).

Budget Issues: Earmarking in the Federal Government (GAO/AIMD-95-216FS,
August 1, 1995).

Budget Structure: Providing an Investment Focus in the Federal Budget
(GAO/T-AIMD-95-178, June 29, 1995).

Managing for Results: Status of the Government Performance and Results
Act (GAO/T-GGD/AIMD-95-193, June 27, 1995).

Managing for Results: Experiences Abroad Suggest Insights for Federal
Management Reforms (GAO/GGD-95-120, May 2, 1995).

Correspondence to Chairman Wolf, Transportation Trust Funds
(GAO/AIMD-95-95R, March 15, 1995).

Managing for Results: State Experiences Provide Insights for Federal
Management Reforms (GAO/GGD-95-22, Dec. 21, 1994).

Budget Policy: Issues in Capping Mandatory Spending (GAO/AIMD-94-155,
July 18, 1994).

Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).

Budget Process: Biennial Budgeting for the Federal Government
(GAO/T-AIMD-94-112, April 28, 1994).

Budget Process: Some Reforms Offer Promise (GAO/T-AIMD-94-86, March 2,
1994).

Budget Issues: Incorporating an Investment Component in the Federal
Budget (GAO/AIMD-94-40, November 9, 1993).

Budget Policy: Investment Budgeting for the Federal Government
(GAO/T-AIMD-94-54, November 9, 1993).

Correspondence to Chairmen and Ranking Members of House and Senate
Committees on the Budget and Chairman of Former House Committee on
Government Operations (B-247667, May 19, 1993).



Page 17                                                   GAO/T-AIMD-97-84
           Related GAO Products




           Performance Budgeting: State Experiences and Implications for the
           Federal Government (GAO/AFMD-93-41, February 17, 1993).




(935229)   Page 18                                                  GAO/T-AIMD-97-84
Ordering Information

The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 6015
Gaithersburg, MD 20884-6015

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov




PRINTED ON    RECYCLED PAPER
United States                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. G100
Official Business
Penalty for Private Use $300

Address Correction Requested