In the wake of Elon Musk’s departure from the Department of Government Efficiency or DOGE, the public has been given a rare, unintentional glimpse into the complexity, scale and irreplaceable function of the federal government. Despite bold initial goals of $2 trillion in savings, the verified result was far less impressive, with watchdog estimates around $175 billion — a number that itself remains contested.

What Musk and DOGE underestimated wasn’t inefficiency but intricacy. In trying to slash and burn their way to headlines, they accidentally demonstrated just how much precision and institutional understanding is required for real reform.

If DOGE (or its successor) wants to truly save billions, it should come from cutting with a scalpel, not a machete. And there is no better place to begin than with the institutional culture of year-end federal spending.

Across nearly every agency, directors of financial operations and other officials with budget authority are incentivized — formally in performance plans and informally through managerial culture — to spend down nearly every dollar they are given, usually to within 1 percent of their total annual budget.

This isn’t corruption; it’s conditioning. These people are operating under a double bind. On one hand, they must not overspend or obligate more than their appropriation. On the other, they are acutely aware that turning money back in at year’s end can lead to future budget reductions and, even worse, poor performance reviews or missed bonuses.

So they hedge. They hold back some buffer funds in case of unexpected costs. Then, in the final weeks of the fiscal year, that buffer becomes a firehose.

The result? A nationwide bureaucratic sprint to obligate every last dollar before September 30, the last day of the fiscal year. Suddenly, it’s time for office furniture upgrades, new software licenses with dubious urgency, training trips, and contracts that serve little strategic value beyond their timing at the end of the fiscal year.

This is one of the most entrenched, expensive and least-discussed inefficiencies in government operations.

Fortunately, the solution is not difficult. First, fund federal agencies fully. When agencies have stable, predictable budgets, they don’t cling to end-of-year buffers. Volatility creates hoarding.

Second, change the incentive structure. Make it explicit from OMB and agency leadership that returning funds to the Treasury is a mark of success, not failure. Agencies must be told clearly that future funding levels will not be reduced for unspent balances. Build this into budget guidance, and mean it.

Third, require that performance plans for employees with spending authority do not reward full spend-downs. Instead, they should reward operational sufficiency plus returned funds. Employees should be praised, promoted and incentivized for thoughtful underspending that maintains full agency functionality. This should be written directly into performance plans.

Fourth, monitor, measure and reward strategic savings. Publicize savings and tie them to individual and team recognition, offering monetary and non-monetary awards.

The result? Agencies will be free to operate with intelligence rather than fear. Performance plans will align with real stewardship, and year-end “fire drills” of spend-it-or-lose it will fade into fiscal memory.

This cultural shift alone could save tens of billions of dollars annually. Even modest voluntary returns of 5 percent or more from agency discretionary accounts could return $80 to $120 billion per year to the Treasury, all with zero harm to operations. In fact, the more trust that is built into the system, the higher the return. As culture shifts and employees begin to assume that they will not be punished, savings will rise.

And this is only the beginning. True reform must go further: Repeal the Government Performance and Results Act, which costs billions and improves nothing. Eliminate the convoluted maze of reimbursable agreements among agencies. And, perhaps most urgently, reduce the massive volume of redundant and meaningless reporting requirements across the federal enterprise.

Overreporting not only costs billions in staff time and contractor support but also degrades morale and reinforces the public’s most cynical ideas about government as red tape. It is a hidden tax on productivity and a deterrent to the next generation of public servants.

This is what change looks like when it’s performed by a surgeon, not a showman; by someone who knows exactly what can be safely removed, and what is keeping the body alive. Disincentivizing year-end spending as a start point requires not a single budget cut — just better government.

Cheryl Kelley is a former senior government official with experience across five Cabinet agencies, including serving as director of planning, management and budget. She is an adjunct fellow at the Pell Center at Salve Regina University and the author of “An Informed Citizenry: How the Modern Federal Government Operates” and the novel “Radical, An American Love Story.”