Increases in agency spending as the end of a fiscal year approaches, often decried as examples of wasteful rushes to “use it or lose it,” are in some ways are “due to legitimate programmatic reasons or the result of outside forces not under the agency’s control,” GAO has said.
“Higher obligations in the fourth quarter of a fiscal year do not necessarily indicate a problem with wasteful spending–such spending may be the result of planned spending intended by Congress and the agencies,” a GAO witness told a Senate hearing.
GAO said it has studied the issue numerous times over the year and “found that agency officials limit their spending early in the fiscal year because final funding decisions may be less than anticipated.” Common reasons include extended continuing resolutions causing agencies to delay the process of hiring employees or awarding contracts until they are sure of their final budget for a fiscal year and threats such as sequestration and lapses of appropriations.
Further, “Congress has established controls that agencies must follow throughout the year to ensure accountability and fiscal control. Legal constraints regarding the purpose, amount, and time of the funds available affect how the funds can be spent throughout the year,” it said.
It cited the so-called bona fide needs rule that an agency must point to a genuine need for an expenditure, and the Antideficiency Act, which prohibits an agency from incurring obligations or expenditures in advance of or in excess of an appropriation. It also noted that the Impoundment Control Act generally bars agencies from refusing to obligate the amounts that Congress has appropriated for their use.