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Anyone that has developed budgets knows that it is an inexact science and budgeting for federal agencies is particularly inexact. Federal budget planners have to consider that funding will come from multiple sources at different times during the fiscal year. Somewhat paradoxically, planners must also develop annual budgets when the expectation is to deliver benefits and solutions every 3 to 6 months. Finally, planners also know that a non-trivial amount of their budget is used for contractor support services which are far more difficult to estimate than the price of goods or products.

For these reasons, federal budget plans will never be 100% accurate. No one expects perfection; nor is it necessary. However too often planners are hurting their own accuracy by not assessing all of the information available to them or not using the most accurate data. Planners should:

  • Consider actual spend as opposed to building budgets based on last year’s projections or estimates.
  • Identify the projects, contracts, or managers that had the greatest deviation from their original plan and pinpoint the root causes for the deviation.
  • Work with procurement agents to review independent government cost estimates for each contract and ensure proper linkages to the budget.

Of course, using zero based budgeting would be optimal, but using the optimal data set and the entirety of data available will undoubtedly help the federal budgeting process.