When the end of the fiscal year comes around, there’s often a mad dash in government offices to use up remaining budget money or risk losing it forever. That’s true in many Air Force units as well.
Those units sometimes go on last-minute spending sprees for items such as office supplies, furniture and even artwork.
“Look in any Air Force office and count the number of Herman Miller Aeron chairs that retail for $850 apiece,” a retired colonel who did not want to be named told Air Force Times in an email. “They are wonderful chairs and I bought my own when I retired, but I think Air Force posteriors could be comfortably seated for far less.”
The money that needs to be spent is often referred to as “fall out money” or “end-of-the-year money,” said Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments think tank in Washington.
“If you do not spend the money by the end of the month, your organization loses it and the money is returned to the U.S. Treasury,” Harrison said in an email. “If Congress and higher-ups in the military see that you returned a substantial amount of money unspent, they are likely to question next year’s budget submission.”
The fear of getting less money from Congress for not spending your entire budget may seem absurd, but it is well-founded. Lawmakers have proposed cutting millions of dollars from programs in the fiscal 2013 defense budget for just that reason.
The House wants to cut Tricare funding by $400 million “on the grounds that the program historically underspends its annual appropriation,” according to a recent report by the Congressional Research Service. The Senate wants to go even further, cutting $807.4 million from Tricare due to “historical underexecution.”
The possibility of $500 billion in sequestration defense spending cuts next year may only exacerbate the binge spending, Harrison said.
“Program managers have an incentive to obligate as much money as they can before sequestration hits, because any unobligated money in their accounts will be cut,” he said. “I have not seen any evidence that this is happening, but the incentive is there if program managers are following how sequestration works.”