10 ms·

This is similar to how some government agencies retain their budgets. At the end of the budget period they've only spent 80% of their allocated budget, so they

by njovin 6y ago

This is similar to how some government agencies retain their budgets. At the end of the budget period they've only spent 80% of their allocated budget, so they throw out a bunch of perfectly good equipment/furniture/etc. and order new stuff so that their budget doesn't get cut the following year, rather than accepting that maybe they were over-budgeted to begin with. Rinse, repeat, thus continuing the cycle of wasting X% of the budget every year.

eurasiantiger 6y ago
Bunks only go up.
duxup 6y ago
Government? I see that as the SOP for large companies too...
- flamble 6y ago
  It's possible that once a company reaches a certain size, it's inevitable. Corporations internally have the same top-down centralized organizational structure as a typical government. Market forces can't eliminate that kind of inefficiency if it invariably affects all large enterprises, and the economies of scale enjoyed by such companies outweigh the perverse incentives of sub-organizations. What strikes me as unique to government is the tendency for sufficiently powerful appendages to secure enough resources to start wagging the dog (e.g. the military industry in the US), although now that I think about it seems possible that it would happen within companies.
  - duxup 6y ago
    I think the common feature is just humans. I think we imagine a lot of market forces that no doubt exist, but people aren't logical in the face of them.
  - acdha 6y ago
    Also don’t forget how unevenly applied market forces are: if McDonald’s started charging 10% more for a hamburger they’d lose sales to Burger King a LOT faster than, say, Comcast or Oracle because the products are basically the same and most customers can switch almost effortlessly whereas you have to be especially mad to trench fiber out to your house or migrate every database in a large enterprise. Any business with a natural monopoly, high migration costs, etc. can support a surprising amount of inefficiency even if most of their customers find the experience unsatisfying.
- throwaway0a5e 6y ago
  True, But large companies tend to have MBA types scurrying around rooting this stuff out as it pops up or shortly thereafter. Government has no such sort of immune system to fix these problems on the go. It just gets sicker and sicker until the tax payers vote for something drastic or revolt. You see this in nonprofit entities too. They get big, abstract away from their mission and waste a lot of money until someone gets tasked with cleaning house or a more mission-driven comes along and replaces them.
madpata 6y ago
I talked about that topic with my principal when I was in school. He told me that the school had to prevent those automatic budget cuts. His reasoning was that it's nearly impossible to get a higher budget if some big expenses had to be made. And suddenly needing a higher budge, after for example 3 years of low expenses, doesn't make a good impression on higher-level administrators.
skissane 6y ago
Years ago I worked as a research assistant for a university. One day, my boss (a professor) pulled me aside for an impromptu meeting. "I have $5000 left in a research grant I need to spend this week or else it's gone forever – do you have any ideas of what I should spend it on?" Unfortunately I couldn't think of much. I suggested maybe we buy some more computers with it but I'm sure he'd already thought of that himself. I don't know what he ended up doing, but I'm sure he'd have decided to buy something with it rather than just losing it entirely.
- chuckleMuscle 6y ago
  This as a fairly recent occurrence in my research group. It’s often quite tedious because you don’t want to waste the money and it’s never clear if there’s going to be a period where we’re short on cash at some point in the future. most of it’s spent on boring but expensive things to be used down the line. Would be far better if funding wasn’t quite so cyclical!
- lostlogin 6y ago
  This is usually handled much more elegantly by senior academic staff. You contact a department who’s services you use a lot, then you arrange to pre-pay for services. Ideally you negotiate a discount. Then you use the service and state which grant to draw from. This way you have grants paying for things that are completely unrelated to their intent, you have one nightmare of a billing system which no one understands and you get to use everybody cent.
- noisy_boy 6y ago
  Buy annual licenses. Then renew if you want to block the same amount next year OR don't renew and use it for what you actually need.
- EveYoung 6y ago
  Could you order conference tickets or something similar that allows free cancelations in the future? In my previous job, we did this to carry over training budgets.
Aeolun 6y ago
I think the problem is that you do not need 100% of your budget every year, but getting it back when you do need it is much harder than keeping it in the first place. Definite case of misaligned incentives.
- pishpash 6y ago
  If only there was a way to get things only when you need, like trading.
- crdrost 6y ago
  Yep! The problem happens when you divide the safety buffer up in the first place. Safety buffers demand to be shared, when one part does not use all of its safety margin you want to transfer that to another system. Another surprising place where this happens is project scheduling. We budget time for each individual step of a project based on our guess of a 90% or 95% success rate, then our "old-timers' experience" kicks in and we double or triple our time for all the steps together, then our boss adds 50% before giving the estimate to their boss, which sounds gratuitous but it is to protect you because their boss looks at how grotesquely long the estimate is and barks out a cut of 20%, so the overall effect of those two is (3/2) × (4/5), so your boss still netted you a 20% buffer while making the skip-level feel very productive and important. Say the 50%-confidence-to-95%-confidence gives you 30% more time as safety buffer, and you only double the estimate, and the work that you missed in your initial assessment, while it's not gonna be say half the project, maybe generously it's a third of the project or so. So the project actually takes time 1.5 measured properly, you have together budgeted 1.3 × 2 × 1.2 = 3.12 time. The total project deadline is more than half composed of safety buffer. And we still consistently overrun~! But if Alice needs to work on some step after Bob, and Bob finishes early, when does Alice start on it? Usually not when Bob finishes. Alice has been told that Bob has until X deadline to complete, and has scheduled herself with other tasks until X. Bob says "I got done early!" and Alice says "that's great, I'm still working on other things but I will pick my tasks up right on time." Bob's safety buffer gets wasted. This does not always cause any impact to the deadline, but it does for the important steps. Of course, if you are a web developer you already know this intuitively because you work on servers, and you don't run your servers (Alice, for example) at 100% load, because if you do then you can't respond to new requests (Bob's completion event) with low latency. It's worth thinking about, in an efficient workplace, how much are you not working so that you have excess capacity to operate efficiently?
osrec 6y ago
Reminds me of this episode of The office: https://en.m.wikipedia.org/wiki/The_Surplus https://en.m.wikipedia.org/wiki/The_Surplus
- Sn0wCoder 6y ago
  Thanks for the recommendation. Going to watch it tonight.
- Gravityloss 6y ago
  Office always had such a weird version of what happens in an"office". Having a secretary who people ask to take photocopies? Sounds like the eighties!
  - osrec 6y ago
    I think that's sort of the point. The branch was run by a guy (Michael Scott) that is actually pretty old school and utterly unaware of it.
LaserToy 6y ago
You will be surprised, but I saw the same behavior in the large tech company. Department either uses or loses the budget, so, there was a push to make sure nothing is left.
lostlogin 6y ago
> This is similar to how some government agencies retain their budgets. The non-government sector isn’t immune to this.
- sgregnt 6y ago
  If whatever actions turn a non government entity into something inefficient, then the entity wont survive for long and will go out of business (or at least that's the hope of a competitive free market economy)
  - com2kid 6y ago
    > then the entity wont survive for long and will go out of business (or at least that's the hope of a competitive free market economy) Only if the inefficiency is large enough to overcome other forces. Or to put it another way, picture if every single individual teams at Google did this to the tune of 100k a year, per team, and assume among 135,000 employees there are 13500 teams. That's 1.35 billion dollars. Well under 1% of their revenue. No way is a competitor going to appear that is identical to Google in every way except they have better budget management. Google has too many moats around their business, they can be really inefficient in many many ways and still dominate in multiple markets.
  - ultimape 6y ago
    you can survive a lot of inefficiency if you are a natural monopoly.
  - eyelidlessness 6y ago
    Hope is a really interesting way to frame something that has consistently failed to prove true after centuries of theory and decades of targeted policy changes.
  - ridethebike 6y ago
    It's not always the case. I work at one of those US bank. The amount of inefficiencies in form of red tape, confusing processes, custom half-baked tools that crash half the time is just mind-boggling. I've spent more than a week now for opening firewall on one ip/port on one host just to test my prototype in dev environment(local machine or docker are not an option due to lack of admin rights ), and it's still in change approval stage. If we weren't this giant too-big-to-fail bank we'd be out of business by now.
efficax 6y ago
The departments of every large org do this, private sector and public
kmonsen 6y ago
I was in the army, they had a certain budget for bullets. Last day of the year we shoot the rest because if not they would get less next year. We shot so much we destroyed some of the rifles, apparently that was better than getting a smaller allocation next year.
- HelloNurse 6y ago
  Did you have a budget for replacement rifles too? Unlike bullets, there might be some incentive to get new and different ones.
  - kmonsen 6y ago
    That I don’t know, they were all replaced with the same (old) version.
CaptainZapp 6y ago
Why single out government agencies? That's the way in every major corporation I ever worked for too.
erdos4d 6y ago
This is similar to how some university departments retain their budgets.
downrightmike 6y ago
That's why the US Navy dump perfectly fine fuel overboard.
ryoshu 6y ago
This happens in private industry too. I can set my watch by the fiscal calendar of certain groups in public companies having to spend their budgets by the end of their year so it doesn't get cut the next year.
atleta 6y ago
Not only government agencies. I've seen it at big corps and universities too.

by njovin 6y ago

eurasiantiger 6y ago

Bunks only go up.

duxup 6y ago

Government? I see that as the SOP for large companies too...

flamble 6y ago
It's possible that once a company reaches a certain size, it's inevitable. Corporations internally have the same top-down centralized organizational structure as a typical government. Market forces can't eliminate that kind of inefficiency if it invariably affects all large enterprises, and the economies of scale enjoyed by such companies outweigh the perverse incentives of sub-organizations. What strikes me as unique to government is the tendency for sufficiently powerful appendages to secure enough resources to start wagging the dog (e.g. the military industry in the US), although now that I think about it seems possible that it would happen within companies.
- duxup 6y ago
  I think the common feature is just humans. I think we imagine a lot of market forces that no doubt exist, but people aren't logical in the face of them.
- acdha 6y ago
  Also don’t forget how unevenly applied market forces are: if McDonald’s started charging 10% more for a hamburger they’d lose sales to Burger King a LOT faster than, say, Comcast or Oracle because the products are basically the same and most customers can switch almost effortlessly whereas you have to be especially mad to trench fiber out to your house or migrate every database in a large enterprise. Any business with a natural monopoly, high migration costs, etc. can support a surprising amount of inefficiency even if most of their customers find the experience unsatisfying.
throwaway0a5e 6y ago
True, But large companies tend to have MBA types scurrying around rooting this stuff out as it pops up or shortly thereafter. Government has no such sort of immune system to fix these problems on the go. It just gets sicker and sicker until the tax payers vote for something drastic or revolt. You see this in nonprofit entities too. They get big, abstract away from their mission and waste a lot of money until someone gets tasked with cleaning house or a more mission-driven comes along and replaces them.

madpata 6y ago

I talked about that topic with my principal when I was in school. He told me that the school had to prevent those automatic budget cuts. His reasoning was that it's nearly impossible to get a higher budget if some big expenses had to be made. And suddenly needing a higher budge, after for example 3 years of low expenses, doesn't make a good impression on higher-level administrators.

skissane 6y ago

Years ago I worked as a research assistant for a university. One day, my boss (a professor) pulled me aside for an impromptu meeting. "I have $5000 left in a research grant I need to spend this week or else it's gone forever – do you have any ideas of what I should spend it on?" Unfortunately I couldn't think of much. I suggested maybe we buy some more computers with it but I'm sure he'd already thought of that himself. I don't know what he ended up doing, but I'm sure he'd have decided to buy something with it rather than just losing it entirely.

chuckleMuscle 6y ago
This as a fairly recent occurrence in my research group. It’s often quite tedious because you don’t want to waste the money and it’s never clear if there’s going to be a period where we’re short on cash at some point in the future. most of it’s spent on boring but expensive things to be used down the line. Would be far better if funding wasn’t quite so cyclical!
lostlogin 6y ago
This is usually handled much more elegantly by senior academic staff. You contact a department who’s services you use a lot, then you arrange to pre-pay for services. Ideally you negotiate a discount. Then you use the service and state which grant to draw from. This way you have grants paying for things that are completely unrelated to their intent, you have one nightmare of a billing system which no one understands and you get to use everybody cent.
noisy_boy 6y ago
Buy annual licenses. Then renew if you want to block the same amount next year OR don't renew and use it for what you actually need.
EveYoung 6y ago
Could you order conference tickets or something similar that allows free cancelations in the future? In my previous job, we did this to carry over training budgets.

Aeolun 6y ago

I think the problem is that you do not need 100% of your budget every year, but getting it back when you do need it is much harder than keeping it in the first place. Definite case of misaligned incentives.

pishpash 6y ago
If only there was a way to get things only when you need, like trading.
crdrost 6y ago
Yep! The problem happens when you divide the safety buffer up in the first place. Safety buffers demand to be shared, when one part does not use all of its safety margin you want to transfer that to another system. Another surprising place where this happens is project scheduling. We budget time for each individual step of a project based on our guess of a 90% or 95% success rate, then our "old-timers' experience" kicks in and we double or triple our time for all the steps together, then our boss adds 50% before giving the estimate to their boss, which sounds gratuitous but it is to protect you because their boss looks at how grotesquely long the estimate is and barks out a cut of 20%, so the overall effect of those two is (3/2) × (4/5), so your boss still netted you a 20% buffer while making the skip-level feel very productive and important. Say the 50%-confidence-to-95%-confidence gives you 30% more time as safety buffer, and you only double the estimate, and the work that you missed in your initial assessment, while it's not gonna be say half the project, maybe generously it's a third of the project or so. So the project actually takes time 1.5 measured properly, you have together budgeted 1.3 × 2 × 1.2 = 3.12 time. The total project deadline is more than half composed of safety buffer. And we still consistently overrun~! But if Alice needs to work on some step after Bob, and Bob finishes early, when does Alice start on it? Usually not when Bob finishes. Alice has been told that Bob has until X deadline to complete, and has scheduled herself with other tasks until X. Bob says "I got done early!" and Alice says "that's great, I'm still working on other things but I will pick my tasks up right on time." Bob's safety buffer gets wasted. This does not always cause any impact to the deadline, but it does for the important steps. Of course, if you are a web developer you already know this intuitively because you work on servers, and you don't run your servers (Alice, for example) at 100% load, because if you do then you can't respond to new requests (Bob's completion event) with low latency. It's worth thinking about, in an efficient workplace, how much are you not working so that you have excess capacity to operate efficiently?

osrec 6y ago

Reminds me of this episode of The office: https://en.m.wikipedia.org/wiki/The_Surplus https://en.m.wikipedia.org/wiki/The_Surplus

Sn0wCoder 6y ago
Thanks for the recommendation. Going to watch it tonight.
Gravityloss 6y ago
Office always had such a weird version of what happens in an"office". Having a secretary who people ask to take photocopies? Sounds like the eighties!
- osrec 6y ago
  I think that's sort of the point. The branch was run by a guy (Michael Scott) that is actually pretty old school and utterly unaware of it.

LaserToy 6y ago

You will be surprised, but I saw the same behavior in the large tech company. Department either uses or loses the budget, so, there was a push to make sure nothing is left.

lostlogin 6y ago

> This is similar to how some government agencies retain their budgets. The non-government sector isn’t immune to this.

sgregnt 6y ago
If whatever actions turn a non government entity into something inefficient, then the entity wont survive for long and will go out of business (or at least that's the hope of a competitive free market economy)
- com2kid 6y ago
  > then the entity wont survive for long and will go out of business (or at least that's the hope of a competitive free market economy) Only if the inefficiency is large enough to overcome other forces. Or to put it another way, picture if every single individual teams at Google did this to the tune of 100k a year, per team, and assume among 135,000 employees there are 13500 teams. That's 1.35 billion dollars. Well under 1% of their revenue. No way is a competitor going to appear that is identical to Google in every way except they have better budget management. Google has too many moats around their business, they can be really inefficient in many many ways and still dominate in multiple markets.
- ultimape 6y ago
  you can survive a lot of inefficiency if you are a natural monopoly.
- eyelidlessness 6y ago
  Hope is a really interesting way to frame something that has consistently failed to prove true after centuries of theory and decades of targeted policy changes.
- ridethebike 6y ago
  It's not always the case. I work at one of those US bank. The amount of inefficiencies in form of red tape, confusing processes, custom half-baked tools that crash half the time is just mind-boggling. I've spent more than a week now for opening firewall on one ip/port on one host just to test my prototype in dev environment(local machine or docker are not an option due to lack of admin rights ), and it's still in change approval stage. If we weren't this giant too-big-to-fail bank we'd be out of business by now.

efficax 6y ago

The departments of every large org do this, private sector and public

kmonsen 6y ago

I was in the army, they had a certain budget for bullets. Last day of the year we shoot the rest because if not they would get less next year. We shot so much we destroyed some of the rifles, apparently that was better than getting a smaller allocation next year.

HelloNurse 6y ago
Did you have a budget for replacement rifles too? Unlike bullets, there might be some incentive to get new and different ones.
- kmonsen 6y ago
  That I don’t know, they were all replaced with the same (old) version.

CaptainZapp 6y ago

Why single out government agencies? That's the way in every major corporation I ever worked for too.

erdos4d 6y ago

This is similar to how some university departments retain their budgets.

downrightmike 6y ago

That's why the US Navy dump perfectly fine fuel overboard.

ryoshu 6y ago

This happens in private industry too. I can set my watch by the fiscal calendar of certain groups in public companies having to spend their budgets by the end of their year so it doesn't get cut the next year.

atleta 6y ago

Not only government agencies. I've seen it at big corps and universities too.