Zero-Base Budgeting Announcement of a Report Concerning First-Year Results in the Federal Government.

The White House released today a detailed assessment of first-year results of zero-base budgeting (ZBB) in the Federal Government. It found that departments and agencies "got off to a good start" in putting the process to work.

President Carter commended department heads recently for instituting ZBB within the short time available to develop the fiscal year 1979 budget, and said he expected the process "to aid even more in the 1980 budget cycle." ZBB provides a systematic process by which managers at various levels can analyze performance and allocate resources effectively and economically among Government programs.

James T. Mcintyre, Jr., Director of the Office of Management and Budget, said his agency is revising ZBB guidelines to make the process even more useful in tightening the 1980 budget. OMB prepared the first-year assessment, which noted that:

—Agency budget priorities were explicitly identified and stated;

—Agencies were better able to restrain the size of their budget requests;

—Management participation in the budget process increased at all levels. As a result, agencies generally reported a better understanding of the relationship of their separate program plans and policy initiatives.

The report describes some of the savings attributable to ZBB. No single dollar figure can be pinned down to represent total ZBB economies in the 1979 budget, the report explained, since many resulted from a combination of factors. The report does cite a number of instances in which operations were discontinued or funds and personnel were shifted to achieve maximum use of the dollar.

Savings were realized when requests for more money could not be justified within the ZBB discipline. In addition, many large requests never reached OMB, because agencies recognized in ranking priorities that the proposals could not be justified.

Major changes to improve the 1980 process will emphasize the development and study of minimum program levels, eliminate unnecessary paperwork, and broaden the involvement of managers.