Secretary BROWN. Thank you very much, Mr. Chairman. I want to assure you that I look forward to working with you and other members of the Committee and thank you very much, Senator Pryor, as well. Thank you. Chairman ROTH. Thank you, Secretary Brown. Chairman ROTH. I am now pleased to call forward a panel consisting of Mr. L. Nye Stevens, who is Director of Federal Management Issues, U.S. General Accounting Office; and Dr. Allan I. Mendelowitz, who is Managing Director, International Trade, Finance, and Competitiveness Issues, U.S. General Accounting Office. Gentlemen, it is a pleasure to have you here today. I appreciate your patience and would ask that you proceed, Mr. Stevens. TESTIMONY OF L. NYE STEVENS, DIRECTOR, FEDERAL MANAGEMENT ISSUES, U.S. GENERAL ACCOUNTING OFFICE Mr. STEVENS. Mr. Chairman, I will be very brief in view of the hour and the discussion that has already been held. You asked us to give you an overview of the Commerce Department and to examine several functions of the National Institute of Science and Technology and NOAA to determine the extent to which they are similar to functions that are carried out elsewhere in Government, and Dr. Mendelowitz will follow me to talk about the trade issues. The missions and functions of Commerce have historically been among the most diverse of cabinet departments and they have changed frequently over time. Today, Commerce is essentially a holding company for many disparate programs and it has never been managed on the basis of a unifying mission or shared goals. As you heard Secretary Brown say, in an effort to create cohesion among its 13 rather independent and autonomous components, in March of this year, he issued a strategic statement that articulated a Department-wide mission and established five strategic themes, which range from export growth and civilian technology enhancement to environmental stewardship and collection of economic information. The next step, which has not been taken, would be to develop outcome-oriented goals and performance measures, but that would be a particular challenge for Commerce because it does not have exclusive Federal responsibility, as you pointed out, for any of those strategic themes. We never have done a management review of Commerce, but we are well aware through the request work that we have done there that it faces a number of management challenges in the Department. For example, we are concerned that the possibility for a thoughtful and well-planned census reform in the year 2000 will be lost if top management, wherever Commerce winds up, does not work very aggressively to make sure that needed changes are tested and made before-well before-the 2000 census. Also, Commerce's administrative systems are highly decentralized, and we have pointed out serious problems with its financial management and related internal controls. The proposal to dismantle Commerce also involves many important policy issues, such as whether the Government should have the lead role in developing new commercial technologies or whether business needs a voice at the cabinet table. As the Comptroller General testified before this Committee in May, we believe that in considering these issues, Congress will need to approach them in a comprehensive, coordinated fashion, that it should make organizational decisions with specific goals in mind, and that it must carefully provide for and oversee the implementation of what in the past has often been a very disruptive process affecting not just the losing agency but also the gaining one. We looked at a couple of the functions of NIST and NOAA, at your request, to determine whether duplication of effort exists between what they do and what other agencies do. One example of these was the Advanced Technology Program at NIST, the funding for which has gone up from $68 million to $431 million in just the past 2 years. As shown in Appendix 1 of my statement, ATP is just one of several Federal initiatives that support R&D through grants and cooperative arrangements, and we can go through others if you would like. The administration's budget also includes $4.8 billion for these initiatives, of which just 10 percent goes through NIST. We issued a report in January of last year that showed that the short-term results claimed for the Advanced Technology Program are overstated or lack support. We also looked at a couple of programs in NOAA, which is Commerce's largest component. One was species protection, for which NOAA shares responsibility with the Fish and Wildlife Service for carrying out the two key species protection laws, which are the Endangered Species Act and the Marine Mammal Protection Act. There is certainly a distinction between their responsibilities in that marine species are primarily NOAA's responsibility and land and fresh water species are under Interior, but there is also some overlap, particularly in coastal areas, since all species cannot be so clearly subdivided. However, it is also true that NOAA has overall a distinctively different mission and outlook from the Fish and Wildlife Service as a whole, with a commercial and international orientation that Interior lacks. Finally, we looked also at the function of ocean research, which is a core function of NOAA, yet it, too, bumps up against the programs of many other agencies. It is hardly a NOAA monopoly_in that the National Science Foundation, the Office of Naval Research, the Geological Survey in Interior, the Minerals Management Service in Interior, the Department of Energy, EPA, and NASA all have ocean research activities and functions of their own, with some distinctions among them. A detailed examination would be needed to determine the extent of coordination, whether there is, in fact, overlap and duplication among those quite similar activities. The existence of similarly classified activities is not conclusive in itself of the need for reorganization or consolidation, but merely, in our view, a starting point for a more sophisticated and in-depth inquiry as to whether the programs are indeed needed, and if so, whether they are effective at meeting goals that Congress has established for them. [The prepared statement of Mr. Stevens follows:] PREPARED STATEMENT OF L. NYE STEVENS SUMMARY In the fiscal year 1996 budget resolution, Congress assumed that the Department of Commerce would be abolished and that Commerce functions could either be eliminated or transferred to other agencies. GAO believes that five key principles would help guide Congress as it considers streamlining and reorganizing the Federal Government. The principles are that (1) reorganization demands a coordinated approach; (2) reorganization plans should be designed to achieve specific identifiable goals; (3) once goals are chosen, the right vehicles must be chosen for accomplishing them; (4) implementation is critical to the success of any reorganization; and (5) oversight is needed to ensure effective implementation. The missions and functions of the Department of Commerce historically have been among the most diverse of the cabinet departments in the Federal Government. Because of this, Commerce historically has not been managed on the basis of a unifying mission and shared goals among its various components. In addition, Commerce's key administrative functions are decentralized. Major Commerce_components—the National Oceanic and Atmospheric Administration (NOAA), the Economics and Statistics Administration, the National Institute of Standards and Technology (NIST), the International Trade Administration, and the Patents and Trademark Office have each been granted the authority by Commerce for meeting its own administrative needs. Commerce recently has articulated a departmentwide mission statement and five strategic themes." However, at a broad functional level, other agencies also share responsibility for these five themes. The themes are (1) export growth, (2) civilian technology, (3) sustainable development by working to integrate environmental stewardship with economic growth, (4) economic development by working to ensure communities have the infrastructure they need to develop, and (5) economic information and analysis. Some functions of NOAA and NIST suggest possible lines for further inquiry to determine whether duplication of function exists with other federal organizations. For example, NIST's Advanced Technology Program makes costshared awards to industry to develop high-risk technologies, and its Manufacturing Extension Partnerships provide seed money for the creation of extension centers that provide technical assistance to small manufacturers. In both cases, NIST's efforts are similar to those undertaken by other federal agencies. Similarly, marine species research and management activities and ocean research are two of NOAA's key efforts. GAO's limited review identified other agencies with similar functions, such as the Department of the Interior's U.S. Fish and Wildlife Service, which carries out a major effort in species research and management, and the National Science Foundation and the U.S. Geological Survey, which support ocean research activities. Mr. Chairman and Members of the Committee: We are pleased to be here today to discuss the organization, missions, and functions of the Department of Commerce. As you know, the conference report for the fiscal year 1996 budget resolution assumed that the Department of Commerce would be abolished and that Commerce functions would either be eliminated or transferred to other agencies. Changes to Commerce are only one of a number of major reorganization and streamlining options under consideration—all of which pose challenging policy decisions. Our work has shown that to be effective, decisions about the structure and functions of the Federal Government should be made in a thorough manner with careful attention to the effects of changes in one agency on the workings of other agencies. In his statement before this Committee in May, the Comptroller General discussed some principles that we believe could help guide Congress and the administration as they consider streamlining and reorganizing the Federal Government.1 The principles are that (1) reorganization demands a coordinated approach; (2) reorganization plans should be designed to achieve specific identifiable goals; (3) once goals are chosen, the right vehicles must be chosen for accomplishing them; (4) implementation is critical to the success of any reorganization; and (5) oversight is needed to ensure effective implementation. As agreed with the Committee, my statement today is intended to contribute to the congressional decisionmaking process by providing an overview of the Depart 1 Government Reorganization: Issues and Principles (GAO/T-GGD/AIMD-95-166, May 17, 1995). ment of Commerce and its organization. As you requested, this overview includes some of the critical issues at Commerce that demand attention regardless of organizational decisions and a discussion of selected issues at the National Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric Administration (NOAA), both of which are components of Commerce. My comments reflect recent work we have done for the Committee on the functions performed by agencies in the Federal Government and other program and management work we have undertaken.2 As was true with that recent work for the Committee, my comments today are intended not to be conclusive but rather to suggest useful starting points for further lines of inquiry. Dr. Allan I. Mendelowitz, GAO's Managing Director for International Trade, Finance, and Competitiveness Issues, separately will discuss the potential impact of abolishing the Department of Commerce on the Federal Government's management of its international trade responsibilities.3 THE DEPARTMENT OF COMMERCE HAS DIVERSE RESPONSIBILITIES The missions and functions of the Department of Commerce historically have been among the most diverse of the cabinet departments in the Federal Government. Formed as a department as a result of the creation of a separate Department of the Labor in 1913, the Department of Commerce initially had nine major components that ranged from the Steamboat Inspections Service and the Bureau of Lighthouses to the Bureau of the Census and the Bureau of Foreign and Domestic Commerce. Of the nine original components, three remain in Commerce-the Coast and Geodetic Survey, which is now part of NOAA; the Bureau of Standards, which is now NIST; and the Census Bureau. The diverse nature of Commerce has been underscored by almost constant organizational changes throughout its history in response to national social, economic, and demographic changes.4 These changes entailed moving bureaus and agencies out of Commerce into new federal organizations, where it was believed the Commerce components would benefit from location in an agency with a more unified organizationwide mission. For example, the U.S. Fire Administration was moved to the Federal Emergency Management Agency in 1979; the Maritime Administration was moved to the Department of Transportation in 1981, where it joined a number of other components that had moved out of Commerce when the Department of Transportation was created in 1966. In addition, other components periodically have been proposed by various administrations to be moved in or out of Commerce. For example, the Minority Business Development Agency for several years was proposed to be transferred to the Small Business Administration in the late 1980s and 1990, only to be proposed for expansion within Commerce by the same administration in fiscal year 1991. To this day, Commerce remains essentially a holding company for many disparate programs. Commerce's 13 major components cover a wide range of responsibilities that include expanding U.S. exports, developing innovative technologies, gathering and disseminating statistical data, measuring and fostering economic growth, granting patents and trademarks, promoting minority entrepreneurship, predicting the weather, and serving as an environmental steward. Figures 1 and 2 detail fiscal year 1994 gross obligations and authorized full time equivalent (FTE) staffing levels of Commerce's major components, respectively. 2 Government Restructuring: Identifying Potential Duplication in Federal Missions and Approaches (GAO/T-MMD-95-161, June, 7, 1995); Budget Function Classification: Agency Spending by Subfunction and Object Category, Fiscal Year 1994 (GAO/AIMD-95-116FS, May 10, 1995); Budget Function Classification: Agency Spending and Personnel Levels for Fiscal Years 1994 and 1995 (GAO/AIMD-95-115FS); and Budget Function Classification: Relating Agency Spending and Personnel Levels to Budget Functions (GAO/AIMD/GGD-95-69FS, Jan. 30, 1995). 3 Government Reorganization: Issues Relating to International Trade Responsibilities (GAO/TGGD-95-218, July 25, 1995). 4 For a discussion of some of the early changes see, From Lighthouses to Laserbeams: A History of the U.S. Department of Commerce 1912-1988, the United States Department of Commerce, Washington, D.C., 1988. |