	CRs Provide Interim Funding for Agencies and Programs

We conducted our work for GAO-09-879 from September 2008 to September 2009 and  updated the analysis of the number and duration of continuing resolutions from February  to March 2013. until agreement is reached on final appropriations, they create uncertainty  for agencies about both when they will receive their final appropriation  and what level of funding ultimately will be available. The effects of CRs on federal agencies differ in part on the duration and  number of CRs. As the examples in my statement will illustrate, shorter  and more numerous CRs can lead to repetitive work. The effects of CRs also vary by agency and program. Not all federal  agencies, for example, are under CRs for the same amount of time. Congress includes provisions applicable to the funding of most agencies  and programs under a CR. In general, CRs prohibit new activities and projects for which  appropriations, funds, or other authority were not available in the prior  year. Also, so the agency action does not impinge upon final funding  prerogatives, agencies are directed to take only the most limited funding  actions and CRs limit the ability of an agency to obligate all, or a large  share of its available appropriation during the CR. Recognizing the constraints inherent in a CR, Congress has at times  provided flexibility for certain programs and initiatives through the use of  legislative anomalies, which provide funding and authorities different from  the standard CR provisions. Delays and Increased Workload Affected Agencies’ Ability to Carry Out their Missions Efficiently and Effectively

		Continuing Resolutions Affected the Level, Cost, and Quality of Services

Case study agency officials contacted for our 2009 report said that,  absent a CR, they would have hired additional staff sooner for  government services such as grant processing and oversight, food and  drug inspections, intelligence analysis, prison security, claims processing  for veterans’ benefits, or general administrative tasks, such as financial  management and budget execution. Several case study agencies also reported delaying contracts during the  CR period, which could reduce the level of services agencies provided  and increased costs. Increased Workload Stemming from Continuing Resolutions Diverted Resources from Competing Priorities

In addition to delays, all case study agencies reported having to perform  additional work to manage within the constraints of the CR—potentially  resulting in hundreds of hours of lost productivity. Agencies’ Strategies to Manage Inefficiencies Resulting from CRs Varied

Agency officials told us they took various actions to manage inefficiencies  resulting from CRs, including delays and increased workload. To reduce the amount of additional work required to modify contracts and  award grants in multiple installments, ACF and FDA reported shifting  contract and grant cycles to later in the fiscal year. An agency can shift its contract cycle so that  To reduce the administrative work required to subdivide funds from each  CR to different offices, programs, or both, VBA and VHA reported that  they did not allot specific dollar amounts during a CR but rather provided  guidance that all offices operate at a certain percentage of the previous  year’s appropriations. According to agency officials, this provides the  agency with more flexibility during the CR period and reduces the  workload associated with changes in funding levels. We have not reviewed agency operations under CRs since we issued our  2009 report.
Why GAO Did This Study

Congress annually faces difficult decisions on what to fund among competing priorities and interests with available resources. Continuing resolutions (CRs) can create budget uncertainty, complicating agency operations and causing inefficiencies. In all but 3 of the last 30 years, Congress has passed CRs to provide funding for agencies to continue operating until agreement is reached on final appropriations.
GAO was asked to provide a statement based on findings from its 2009 report on managing under CRs ( GAO-09-879 ). This statement focuses on (1) a history of CRs and the provisions that Congress includes within them and (2) the effects of CRs on agency operations and actions that federal agencies have taken to manage these effects. GAO's 2009 report reviewed six federal agencies within three cabinet-level departments selected based on factors such as the length of time spent managing under CRs and the types of services they provided. These six case study agencies were the Administration for Children and Families and the Food and Drug Administration within the Department of Health and Human Services; Veterans Health Administration and Veterans Benefits Administration within the Department of Veterans Affairs; and Bureau of Prisons and Federal Bureau of Investigation within the Department of Justice. Under CRs that provide funding for the remainder of a fiscal year, agencies obtain certainty about funding. Therefore, CRs that spanned the months remaining in a fiscal year were not the focus of GAO's report.
GAO did not make recommendations in the 2009 report.

What GAO Found

Because CRs only provide funding until agreement is reached on final appropriations, they create uncertainty for agencies about both when they will receive their final appropriation and what level of funding ultimately will be available. Effects of CRs on federal agencies differ based in part on the duration and number of CRs and may vary by agency and program. CRs include provisions that prohibit agencies from beginning new activities and projects and direct agencies to take only the most limited funding actions. Congress can provide flexibility for certain programs and initiatives through the use of legislative anomalies, which provide funding and authorities different from the standard CR provisions.
Officials from all six case study agencies reported that they delayed hiring or contracts during the CR period, potentially reducing the level of services agencies provided and increasing costs. After operating under CRs for a prolonged time, agencies faced additional challenges executing their final budget as they rushed to spend funds in a compressed timeframe. All case study agencies reported performing additional work to manage within CR constraints, such as issuing shorter term grants and contracts multiple times. Agency officials reported taking varied actions to manage inefficiencies resulting from CRs, including shifting contract and grant cycles to later in the fiscal year to avoid repetitive work, and providing guidance on spending rather than allotting specific dollar amounts during CRs to provide more flexibility and reduce the workload associated with changes in funding levels.