March Madness keeps much of Ottawa up at night. No, not the sports tournament! I\u2019m talking about the spending binge that happens every March as federal government departments urgently try to get money out the door before the start of the new fiscal year on April 1.<\/p>\n
March Madness has long been criticized. Spending money for the sake of spending money is not a productive or transparent way of using Canadians\u2019 money \u2014 just because you have the money in your budget does not mean it needs to be spent on superfluous items.<\/p>\n
But what is March Madness? Does it actually happen? Can it be proved?<\/p>\n
A CBC article<\/a> in April 2018 lamented the \u201creturn of [the] \u2018March Madness\u2019 budget rush\u201d as the government placed a rush order for 31,000 smartphones. It defined March Madness as a \u201clong-observed phenomenon in Ottawa which sees federal departments quickly spend all of their remaining annual budgets in the last month of the fiscal year to avoid losing the cash altogether in the following budget \u2014 a use-it-or-lose-it strategy.\u201d<\/em><\/p>\n Or as Treasury Board President Tony Clement described it in a memo<\/a> to his cabinet colleagues in 2012, March Madness is \u201cwhen organizations spend unused operational funds on things such as new furniture, promotional items, stockpiling of IT hardware, and other purchases that fall outside of existing contractual obligations in order to expend their budgets prior to the end of the fiscal year.\u201d<\/p>\n To be clear, March Madness is spending beyond the normal expenditures of a department\u2019s monthly expenses in that month. It could be partially explained as accounting methodology: for example, a contract job might be completed in March and the contract\u2019s terms might require paying the entire value of the contract at the end. But this alone could not explain a department spending as much as 40 percent of its annual budget on office supplies in a single month.<\/p>\n There were $287 billion in program expenses in 2016-17<\/a>. <\/u>The sheer size of these expenditures combined with accrual accounting methodology can make it difficult to track monthly expenditures. And getting money out the door for large government programs<\/a> is notoriously difficult, which means the government can\u2019t just create a new social or infrastructure program at the end of the fiscal year to take care of any extra money it might have lying around. But what if I could prove March Madness through a much smaller expenditure, like office supplies?<\/p>\n Why office supplies?<\/strong><\/p>\n Clement\u2019s memo specifically mentioned furniture and stockpiles of equipment. IT equipment and furniture are relatively easy to purchase, and many departments already have standing offers in place with suppliers of commonplace items like furniture. And there are always office chairs, desks, tables, cubicles and conference rooms aplenty that could be upgraded. Additionally, office supplies like stationery, copy paper, notebooks and folders don\u2019t expire or change much year to year, so there is no risk to purchasing something that won\u2019t become obsolete.<\/p>\n In 2016-17, departments spent $236.6 million on office supplies \u2014 pennies in comparison with the total program expenses to run the government. In this article I will prove March Madness exists through office supplies, a relatively small but revealing item.<\/p>\n The Treasury Board of Canada Secretariat tracks departments\u2019 expenditures by month and by \u201ceconomic object.\u201d I used Canada\u2019s access to information system to request data on four categories of economic objects: Office and Stationers Supplies (1172); Office Furniture and Furnishings, Including Parts (1231); Other Office Equipment (0671); and Other Office Equipment and Parts (1239). Here, I\u2019ll simply call them \u201coffice supplies\u201d or \u201coffice expenses.\u201d<\/p>\n Using these data, the answer to whether March Madness exists is a resounding yes, and it\u2019s a trend that can be seen across federal departments, big and small, and under Liberal and Conservative governments.<\/p>\n Proving March Madness<\/strong><\/p>\n In 2016-17, Canada\u2019s 91 departments spent a total of $236.6 million on office supplies, broken down by month (figure 1).<\/p>\n