If the recent past is any indication, the last few days of this month should be an unusually busy time for some parts of the federal bureaucracy.
While some agencies are so short of cash that they may have to furlough thousands of workers, budget director David A. Stockman is still worried about the traditional surge of spending that occurs as the fiscal year draws to a close.
"We must move aggressively to prevent wasteful year-end spending by federal officials," Stockman told department heads in an Aug. 4 memo. "Please give special attention to preventing this potential problem in your agency."
Stockman said that spending in the last quarter of the fiscal year (which ends Sept. 30) should be no higher than the average for the first three quarters, except in special circumstances. He said that 11th-hour grants should be "subjected to rigorous review" and that "disciplinary action should be taken against executive officials and employes who waste public funds."
Congress, which also has been worried about the matter, last year ordered 27 agencies to limit their fourth-quarter spending to no more than 30 percent of their total budgets. The General Accounting Office reported in July that 80 percent of the affected agencies said this didn't cause them any problems, while six agencies found the spending limits too restrictive. Although the spending limits appeared to work, GAO said, agencies still could fund wasteful projects by simply moving up their deadlines by several months.
One of the agencies not covered by the congressional restrictions, the Education Department, did a considerable amount of last-minute spending in fiscal 1981, according to a new report by the agency's inspector general. And that was in the face of a similar warning from the Office of Management and Budget last year.
All told, the report found, the Education Department awarded 326 contracts worth more than $76 million last September, or 43 percent of all the contracts handed out in that fiscal year. Officials also found time to give out 2,051 grants totaling $131 million in the same month.
"Contrary to what is being preached by the current administration, top Education Department officials apparently believe the cardinal sin of the bureaucracy is returning money to the Treasury at the end of the year," said Sen. Max Baucus (D-Mont.), who initiated the study.
Education comptroller Ralph Olmo, who directed several of these year-end awards, said in an interview that many of the contracts were planned earlier in the year, but weren't completed until September because of unavoidable delays or a moratorium on federal publications.
"That's not to say that awarding half our contracts in the last month is not a problem," Olmo said. "It's bad management." But he said that 73 percent of the department's contracts have been awarded in the first 10 months of the current fiscal year, an improvement that he considers "one of our great successes."
In examining 85 contracts awarded for over $100,000 each in September, 1981, the auditors found that 52 were negotiated so quickly that they could be considered "year-end spending." They said several awards were given "special handling" by senior officials and "may result in waste, higher prices and lowered morale."
The auditors also examined 11 contracts for under $100,000, which didn't require the approval of the secretary or a special review board as those over $100,000 did.
On Sept. 30 -- the last day of the fiscal year -- Olmo directed that a $91,000 non-competitive contract be awarded to Aguirre-Foster International, a California consulting firm, for a study on children who need to learn English. The head of the firm, it turns out, is a former commissioner of education.
Edward Aguirre, who briefly headed the Office of Education in the Ford administration, said he wishes he had gotten more money for the study. "We had been talking about it for some time," he said. "As far as I'm concerned, it was not a last-minute thing. It's a project that needed to be done and was well thought-out."
Olmo said the price was negotiated when it appeared that Aguirre-Foster would receive a special set-aside contract as a minority firm, and he ordered the non-competitive award when that plan fell though.
The White House was not without its favorite recipients. On Sept. 29, for example, Education Secretary Terrel H. Bell ordered that $825,000 in grants be awarded, without negotiation, to Jesse Jackson's PUSH-Excel organization for school programs in Chicago, Denver and Chattanooga. The auditors said these "sole-source" awards did not follow normal procedure.
"That decision was made in cooperation with people at the White House," Olmo said. "It was made at the highest levels of government." He said Education officials had held up the grant earlier in the year to ensure that PUSH-Excel would tighten up its accounting procedures. A spokesman for PUSH declined comment.
Also on Sept. 30, assistant secretary Thomas P. Melady asked that Ferguson-Bryan Associates, a Washington firm, be given $100,000 to produce a film strip and a publication for a conference of black colleges. "The contract should not have been awarded," the auditors said, "and is indicative of the potential for problem awards when senior staff intervene in the procurement process."
Alfred Bryan, president of the firm, said the award had been planned for some time and was not simply pushed through at the end of the year.
A $99,990 "unplanned" award to Washington's Institute for Education Leadership was initiated by a call from the undersecretary's office on Sept. 28, the report said. Lisa Walker, an official with the nonprofit group, said that it runs the fellowship program and that the number of fellows often is not known until the academic year begins.
In another instance, department officials awarded a $187,777 non-competitive contract in mid-September to Athena Information Systems of McLean for personnel services. "We could not find any evidence of any planning for this procurement prior to September," the auditors said.
Education officials said they made the award because Athena was a small and disadvantaged business. But Athena lost that designation soon afterward, the report said, and last March the department had to award the same contract again to another firm. Athena officials could not be reached for comment.
The inspector general recommended that the department's contract officials establish and enforce strict negotiation deadlines that would rule out any last-minute arrangements.