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For Immediate Release: Dec 04, 2002
Contact: Kirsten Stade (202) 265-7337

ARMY CORPS ENDS YEAR WITH HALF BILLION DOLLAR BUDGET SURPLUS

Carryover Belies Claims of Insufficient Funding


Washington, DC - Despite a declared budget emergency, the U.S. Army Corps of Engineers ended Fiscal Year 2002 with a greater than half billion dollar surplus, according to agency documents released today by Public Employees for Environmental Responsibility (PEER).Contrary to claims that it was under-funded, the Corps was unable to spend more than $530 million in appropriated funds, approximately one-eighth of its entire civil works budget.

In a widely distributed October 11 e-mail, Donald Basham, the Management Director for the Corps' Mississippi Valley Division admonished his colleagues:

"Ladies and Gentlemen as you can see from the attached table the Corps carried over a $.5 Billion, yes that's with a "B"... While some of this is fenced and or politically sensitive the vast majority is not...

Our Goal this year should be to effectively expend every dollar given to us in providing the best service to the people of the valley. Additionally, we should look to bring into the valley a significant portion of the $.5B in carryover.

Basham goes on to say:

...the point is we failed to execute the program we promised the people of the valley we would deliver...I am personally embarrassed by our performance in this program."

"Even when it supposed to be on a diet, the Corps is choking on the excess pork Congress left on the table," stated PEER Executive Director Jeff Ruch whose organization represents Corps employees concerned about the need to reform the agency."On one hand, President Bush vetoes a full pay raise for federal employees due to a fiscal emergency and on the other hand the Corps has to invent ways to spend money faster."

Earlier this year, the White House fired Army Assistant Secretary Mike Parker for publicly disparaging funding levels proposed by the Administration for the Corps. Also this year, for the first time in nearly two decades, Congress blocked authorization for new projects because of the Corps' continuing resistance to reform.

An Army Audit Agency review found the corps had been using inappropriate accrual methods in it FY 01 budget. Consequently, the Corps was forced to end accounting practices that had allowed it to hide carryover balances. While all Corps Divisions showed surpluses, overages varied widely by region. For example, the Corps Northwestern Division spent nearly 95 percent of its appropriation for the year while the Pacific Ocean Division (Alaska, Hawaii and Japan) was able to use less than 60 percent of funds available.

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Read the full text of the Basham e-mail