We requested comments on a draft of this report from OMB, the Departments of Agriculture and Energy, and NASA. The Relationship Between NPR Recommendations and Agency Savings Claims Was Not Clear

OMB generally did not distinguish between NPR’s and other contributions for the agency-specific recommendations we reviewed. OMB Used Standard Budget Estimating Techniques to Estimate Savings

According to OMB, the procedures and techniques it used to estimate NPR savings were those that it commonly follows in developing the President’s budget. OMB last updated its estimates in 1997, so any changes that have occurred since then are not reflected in NPR’s claimed savings. Our prior reviews of budget estimates have shown that it is difficult to reconstruct the specific assumptions used or to track savings for estimates produced several years ago. As we reported in 1996, once an estimate is prepared and time passes, it becomes difficult to retrace the original steps and reconstruct events in order to replicate the original estimate.Moreover, it is often difficult to isolate the impacts of particular proposals on actual savings achieved due to the multiple factors involved. Estimated savings from both recommendations were included when OMB aggregated total NPR-estimated savings. Offsetting Costs May Not Have Been Fully Included

OMB and CBO both estimated savings for the recommendation to streamline USDA, and these estimates differed. While OMB estimated the savings to be $770 million, CBO’s estimate was $446 million—a difference of $324 million. . . with respect to the costs associated with severance benefits and relocation. While the administration assumes that agency baseline budgets are large enough to absorb these costs, CBO assumes that the costs would reduce the potential savings. OMB Lacked Documentation and Reported Estimates Incorrectly

According to OMB, consistent with its normal budget practices, OMB examiners generally did not retain documentation for NPR savings estimates. Instead, the OMB examiners attempted to reconstruct how they thought the savings had been estimated through approximating rather than replicating savings estimates. OMB did, however, provide documentation on the estimated savings for two of the six recommendations we reviewed. Conclusions

NPR claimed savings from agency-specific recommendations that could not be fully attributed to its efforts. We also found that some savings were overstated because OMB counted savings twice, and two of the estimates were reported incorrectly, resulting in claims that were understated. From that amount, OMB subtracted offsetting costs.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the savings claims from the National Performance Review (NPR), which has been renamed the National Partnership for Reinventing Government, focusing on how the Office of Management and Budget (OMB) estimated savings from selected NPR recommendations targeted toward individual agencies.

What GAO Found

GAO noted that: (1) NPR claimed savings from agency-specific recommendations that could not be fully attributed to its efforts; (2) OMB generally did not distinguish NPR's contributions from other initiatives or factors that influenced budget reductions at the agencies GAO reviewed; (3) therefore, the relationship between the recommended action and the savings claimed from the recommendations GAO reviewed was not clear; (4) to estimate the savings from the agency-specific recommendations, OMB said it used the same types of procedures and analytic techniques that have long been used in developing the President's budget; (5) as GAO's previous reviews of budget estimates have shown, it is difficult to reconstruct the specific assumptions used and track savings for estimates produced several years ago; (6) moreover, GAO has reported that it is often impossible to isolate the impacts of particular proposals or recommendations on actual savings achieved due to the multiple factors involved; (7) OMB relied on these point-in-time estimates rather than attempting to measure actual savings; (8) OMB last updated its estimates in 1997, so any changes that have occurred since then are not reflected in NPR's claimed savings; (9) GAO identified two instances where OMB counted at least part of the estimated savings twice; (10) therefore, the total estimated savings from the Department of Agriculture (USDA) and National Aeronautics and Space Administration recommendations were overstated; (11) for one recommendation where OMB and the Congressional Budget Office (CBO) both estimated savings, GAO found that offsetting program costs may not have been fully included in OMB's estimates; (12) in estimating savings that resulted from personnel reductions at USDA, OMB and CBO considered different offsetting costs and arrived at different estimates, with CBO's estimate being $324 million less than OMB's $770 million estimate; (13) according to CBO, it assumed that severance benefits and relocation costs would reduce the potential savings, while OMB assumed that the agency could absorb those costs; (14) consistent with OMB's normal budget practices, OMB examiners generally did not retain documentation when estimating NPR savings; (15) instead, the OMB examiners attempted to reconstruct how they thought the savings had been estimated through approximating rather than replicating savings estimates; (16) OMB had documentation for two of the recommendations GAO reviewed; and (17) however, GAO found that the savings were reported incorrectly.