A new report from the Government Accountability Office (GAO) highlights the impacts of $85.3 billion in automatic, across the board budget cuts to federal agencies in 2013. According to the GAO, “Sequestration reduced or delayed some services to the public, including benefit payments, and disrupted agency operations, despite actions taken by agencies to minimize sequestration’s effects.”

Sequestration required budget cuts on the order of 9 percent from non-defense agencies and 13 percent from defense programs. These cuts resulted in more than 80 percent of agencies curtailing hiring, reducing employee training, and decreasing employee travel. In additional, more than 770,000 employees were furloughed.

Approximately 70 percent of agencies reported rescoping or delaying contracts or grants for core mission activities. For instance, science agencies awarded fewer research grants as a result of sequestration. The National Science Foundation (NSF) awarded 690 fewer grants in fiscal year 2013. The National Institutes of Health reduced competing research project grants by 8.3 percent relative to 2012. The Department of Agriculture awarded approximately 100 fewer research grants.

In order to blunt the effects of sequestration, many departments and agencies transferred funding between budget accounts. At the NSF, $12.5 million was transferred from the Research and Related Activities account to support facilities construction and equipment acquisition. To avoid staff furloughs, $13.4 million from the research account and $2.0 million from the Education and Human Resources account were transferred to agency operations.

NSF also awarded a higher percentage of continuing awards instead of grant awards that are fully funded up front. Agency officials told GAO that this strategy allowed more awards to be made in a particular year since not all of the funding is obligated in the initial year.


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