The Army has issued a directive (2016-16) aimed at improving financial management at all levels, including emphasis on ending “use or lose” practices to spend all available money before a deadline—commonly, the September 30 end of a fiscal year—out of concern that future budgets will be reduced on grounds that the money was not needed.
“To serve as good stewards of taxpayer dollars and ensure the highest level of readiness, we must adapt management practices to make sure every dollar we spend counts toward fielding a trained and ready force,” it says.
Effective July 1, “leaders at every level” are to establish and track annual performance measures; avoid using budget execution data and obligation rates as the primary measure of fiscal success; and identify and manage total costs of critical processes, especially when funding is divided among multiple commands and sources.
Regarding use or lose, it says this: “While the Office of the Secretary of Defense and Congress will hold us accountable for execution metrics that we will have to meet, commanders and staffs will not automatically decrement commands or programs in future allotments when they do not spend all funds without further investigation to evaluate the reason for the under-execution and determine if it was a one-time event or funding adjustments are needed.”
Further, the Army wants to “reward leaders and organizations who demonstrate exemplary stewardship and innovative idea. Develop channels to solicit new ideas and mechanisms to rapidly implement best practices. Ensure that organizations are rewarded for finding better ways of operating by allowing them to keep and redirect savings to validated command priorities. Do not interpret this directive to imply that under-execution is always good. The goal is to achieve the highest level of readiness given the resources provided,” it says.
