In order to reach $85 billion in reduced spending by September 30, the Office of Management and Budget has told federal agencies they should no longer handout bonuses to employees, according to Jason Miller of Federal News Radio.
According to Miller, that deadline has been set because no solution to stop cuts from sequestration is currently in sight.
“In light of the reduced budgetary resources available due to sequestration, expending funds on these activities at this time would in many circumstances not be the most effective way to protect agency mission to the extent practicable,” said OMB Controller Danny Werfel in his guidance to government leaders.
“Therefore, agency leadership should review processes and controls around these activities and ensure that these activities are conducted only to the extent they are the most cost-effective way to maintain critical agency mission operations under sequestration,” he added.
Besides curtailing bonuses, the hiring of new employees and new training, conferences or travel are other areas where agencies can look to cut expenditures.
OMB estimates that over the next seven months non-defense programs will see a nine percent reduction and defense programs a 13 percent reduction.
The guidance is the fourth sequestration-related memo OMB has sent to federal agencies in the past six months, according to Miller.