KCRA Intelligence: Consulting to the Department of Justice

By Matthew Merker

Unlike other federal departments in the US, such as the Department of Defense, the Department of Justice has experienced relatively stable budget growth over the past 10 years. However, the Department is keenly aware of the potential for budget downturn, and has taken preemptive measures to keep spending within reason and avoid potentially damaging cuts in its discretionary spending.

Specifically, for FY 2015, the DOJ is proposing $1.2 billion in offsets to keep overall costs of the Department in check. These cuts are spread out across multiple agencies, including the DEA ($75 million), FBI ($180 million), BOP ($158 million), US Attorney’s Office ($30 million), and US Marshals ($34 million). These cuts are also coupled with rescissions of prior year balances.

The DOJ is more budget conscientious in its annual spending plan, and actively works to find savings through greater efficiencies in its daily operations. Consulting services such as strategic planning, process improvement, and human capital strategy will assist DOJ agencies as they continue their efforts to keep cost increases at a minimum, while at the same time offsetting these expenses with identified cuts to programs and rescissions.

There have been slight increases in percentage spending (Figure 2) across the prisons, litigation, and law enforcement aspects of the DOJ missions. State and local assistance, however, has decreased in its share of the overall budget from $3.5 billion in 2010 to $2.1 billion in 2015. Administrative functions, represented in the “other” category, also have been reduced from $900 million in 2010 to $600 million in 2015. The downward shifts in these two categories are attributable to the Department’s efforts to reduce administrative and overall costs while maintaining its focus on primary missions to ensure the efficacy of key agencies does not dwindle.

Cuts to state and local assistance programs and administrative efficiencies at the HQ and smaller component level have allowed the DOJ to maintain budget stability. However, the Department will soon need to begin finding more efficiencies in the prisons, litigation, and law enforcement aspects of its overall budget to continue to keep budgets in check and still provide enough support to its state and local partners. Consultants will be useful to the DOJ as objective third parties to examine functions in these three mission areas and recommend areas for cost savings and improved efficiencies.

DOJ budget distribution across its major components has also remained stable over the past five years. As shown in Figure 3, the FBI and BOP remain the highest budget agencies for the DOJ, consistent with the split of budget across mission areas shown in Figure 2. Across the board, each of these agencies have experienced slight growth over the past five years. However, the US Marshals Service has seen the highest increase in spending since 2009 due to its merger with the Office of the Federal Detention Trustee in October 2012. At that time, management and regulation of federal detention programs transferred to USMS authority, requiring a significant hike in total budget for the component.

Consultants to the DOJ will largely gravitate toward agencies with the most significant budgets because their demand for external support to achieve their missions is higher. The FBI and BOP utilize consultants extensively the former for functions such as cyber security and analytics, the latter for functions such as strategic planning to reduce operating costs, including efforts to privatize prisons to relieve the financial burden.

However, agencies with smaller budgets will continue to seek outside support in finding efficiencies through shared service adoption, process improvement and other strategic initiatives, operating with significantly fewer resources than the larger agencies within the DOJ.

Although the DOJ has taken preemptive actions in its cost-cutting and operational efficiency development to retain relative budget stability, the Department’s overall IT spending has remained on a steady decline over the past several years (Figure 4). FY 2011 total IT spend fell just under $3 billion. FY 2015 estimates bring total IT spending to approximately $2.47 billion, indicating a total reduction of IT spend of just under $500 million in five years.

Reduced IT spending is further hindered by a constant increase in operations and maintenance (O&M) costs, leaving less funding available for development, modernization and enhancement of IT capabilities. In 2011, DME spending was approximately $1.02 billion, but is expected to drop dramatically, reaching $286 million in 2015.

Matthew Merker is a Senior Analyst, Lead for Public Sector Research