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Press Release

    Tax Fact #28: Department of Commerce: Financial Mismanagement and Redundancy Should Rule Out Spending Increases

    07/21/1999

    Before giving money to federal programs, Congress has a moral obligation to ensure that these programs can account for every tax dollar they spend. This week, when the Senate considers increasing the budget for the Department of Commerce by $2.1 billion ($1.7 billion of which is dedicated to the 2000 Census), lawmakers should take note of a recent General Accounting Office report that most agencies within this department "lack the basic financial and performance information they need to manage their programs and activities and improve their performance."

    Even more troubling is the finding by Commerce’s own Inspector General (IG) that "(1) the Department’s systems could not provide accurate and reliable financial and performance information, (2) reconciliations of account balances were not adequately performed, and (3) controls surrounding cash receipts and accounts receivables were ineffective."

    If lawmakers were to seriously review the work of the GAO and the agency’s own IG, they would conclude that the Department of Commerce is a financially mismanaged, second-tier agency that duplicates the missions of dozens of other federal agencies. Rather than increase Commerce’s budget, lawmakers should dismantle the department and reorganize its more critical functions. Lawmakers should consider the following GAO findings:

    "Basically, the Department of Commerce is a large ‘holding company’ composed of 12 operating bureaus, each pursuing disparate programs and activities that cut across several federal budget functions." "Overlap of missions and functions is a critical problem for Commerce in that it shares responsibility for major budget functions with at least 14 other federal departments and agencies and does not have exclusive or even lead responsibility for any of those functions."

    The National Weather Service’s $4.5 billion modernization program was declared "High Risk" by GAO in 1995, and remains a high risk program today. "The centerpiece of the modernization – AWIPS, for forecaster workstations that are to integrate observing system’s data and support forecaster decision making – is far from providing all the promised capabilities and become more expensive because of design problems and management shortcomings."

    Commerce’s 1999 Annual Performance Plan (required under the Results Act) "does not provide sufficient evidence or confidence that the Department’s performance data will be accurate, complete, and credible."

    "The International Trade Administration’s (ITA) financial management problems are so significant that Commerce has decided not to have an audit performed of ITA for fiscal year 1998 because significant financial problems continue."