Action: OMB, departments, and agencies will minimize budget restrictions such as apportionments and allotments.16 Congress typically divides its appropriations into more than 1,000 accounts. Committee reports specify thousands of other restrictions on using money. OMB apportions each account by quarter or year, and sometimes divides it into sub-accounts by line-item or object class--all to control over-spending. Departmental budget offices further divide the money into allotments. Thus, many managers find their money fenced into hundreds of separate accounts. In some agencies, they can move funds among accounts. In others, Congress or the agency limits the transfer of funds, trapping the money. When that happens, managers must spend money where they have it, not where they need it. On one military base, for example, managers had no line item to purchase snowplow equipment, but they did have a maintenance account. When the snowplow broke down they leased one, using the maintenance account. Unfortunately, the 1-year lease cost $100,000--the same as the full purchase price. Such stories are a dime a dozen within the federal bureaucracy. (They may be the only government cost that is coming down.) Good managers struggle to make things work, but, trapped by absurd constraints, they are driven to waste billions of dollars every year. Stories about the legendary end-of-the-year spending rush also abound. Managers who don't exhaust each line item at year's end usually are told to return the excess. Typically, they get less the next time around. The result: the well-known spending frenzy. The National Performance Review received more examples of this source of waste--in letters, in calls, and at town meetings--than any other. Most managers know how to save 5 or 10 percent of what they spend. But knowing they will get less money next year, they have little reason to save. Instead, smart managers spend every penny of every line item. Edwin G. Fleming, chief of the Resources Management Division of the Internal Revenue Service's Cleveland District, put it well in a letter to the Treasury Department's Reinvention Team: Every manager has saved money, only to have his allocation reduced in the subsequent year. This usually happens only once, then the manager becomes a spender rather than a planner. Managing becomes watching after little pots of money that can't be put where it makes business sense because of reprogramming restrictions. So managers, who are monitors of these little pots of money, are rewarded for the ability to maneuver, however limitedly, through the baroque and bizarre world of federal finance and procurement. Solutions to these problems exist. They have been tested in local governments, in state governments, even in the federal government. Essentially, they involve budget systems with fewer line items, more authority for managers to move money among line items, and freedom for agencies to keep some or all of what they save--thus minimizing the incentive for year-end spending sprees. Typically, federal organizations experimenting with such budgets have found that they can achieve better productivity, sometimes with less money. During an experiment at Oregon's Ochoco National Forest in the 1980s, when dozens of accounts were reduced to six, productivity jumped 25 percent the first year and 35 percent more the second. A 1991 Forest Service study indicated that the experiment had succeeded in bringing gains in efficiency, productivity, and morale, but had failed to provide the Forest Service region with a mechanism for complying with congressional intent. After 3 years of negotiations, Washington and Region 6, where the Ochoco Forest is located, couldn't agree. The region wanted to retain the initial emphasis on performance goals and targets so forest managers could shift money from one account to another if they met performance goals and targets. Washington argued that Congress would not regard such targets as a serious measure of congressional intent. The experiment ended in March 1993.17 When the Defense Department allowed several military bases to experiment with what was called the Unified Budget Test, base commanders estimated that they could accomplish their missions with up to 10 percent less money. If this experience could be applied to the entire government, it could mean huge savings. Beginning with their fiscal year 1995 submissions to OMB, departments and agencies will begin consolidating accounts to minimize restrictions and manage more effectively. They will radically cut the number of allotments used to subdivide accounts. In addition, they will consider using the Defense Department's Unified Budget plan, which permits shifts in funds between allotments and cost categories to help accomplish missions. OMB will simplify the apportionment process, which hamstrings agencies by dividing their funding into amounts that are available, bit by bit, according to specified time periods, activities, or projects. Agencies often don't get their funding on time and, after they do, must fill out reams of paperwork to show that they adhered to apportionment guidelines. OMB will also expedite the "reprogramming" process, by which agencies can move funds within congressionally appropriated accounts. Currently, OMB and congressional subcommittees approve all such reprogrammings. OMB should automatically approve reprogramming unless it objects within a set period, such as five days. While understandable in some cases, such earmarks hamper agencies that seek to manage programs efficiently. Agencies should work with appropriations subcommittees on this problem.