Automation has helped improve the efficiency of other NMB operations as well. The NMB was one of the first agencies to use integrated communications systems to facilitate communications both externally (with systems at the offices of airlines, railroads, unions, and law firms) and internally. Voice messaging simplifies internal communications without the limitations of time-of-day, dayof-week, time zones, and locations of staff. The Board has also been at the forefront of end-user computing through the widespread use of

PCs.

Other topics on the Board's agenda for office automation include: creation of a network facsimile capability to provide direct computer access to the fast-growing area of fax communications; automated telephone call management; desktop publishing; and end-user database management.

ADJUSTMENT OF RAILROAD GRIEVANCES

Mr. Harkin: I see that you have requested approximately $1.6 million to fund the National Railroad Adjustment Board whose members are required to hear and settle disputes involving railroad employee grievances. Over the past few years, the Board has attempted to streamline the grievance adjustment process by gradually implementing the suggestions of a bipartisan committee that was created in the mid1980's to advise the Board. Why, then, are we seeing neither a decrease in the number of cases pending at the end of a given year nor a smaller budget request for this set of activities?

Mr. Javits: The request of $1.6 million will finance salary and travel for arbitrators working on the three tribunals: the National Railroad Adjustment Board, Special Boards of Adjustment and Public Law Boards. The total railroad grievance cases pending before the tribunals at the beginning of FY 1990 was 16,885 and 10,752 were pending at the close of FY 1990, a decrease of 36% in the pending backlog. This backlog reduction was in addition to 4,589 cases resolved by the referees.

The budget request has not been reduced so that prompt disposition of disputes can be continued, as required by the Railway Labor Act. Unfortunately, although more cases have been more inexpensively and more speedily resolved each year, the total number of cases filed for adjustment, the filing of which the Board does not control, have not appreciably decreased during the past five years.

RAILROAD RETIREMENT BOARD

STATEMENT OF GLEN L. BOWER, CHAIRMAN

ACCOMPANIED BY:

ANDREW F. REARDON, MANAGEMENT MEMBER

JAMES C. BOEHNER, ASSISTANT TO THE LABOR MEMBER

BUDGET REQUEST

Senator HARKIN. Next we will hear from the Railroad Retirement Board. The Board has the responsibility of administering railroad retirement benefits and unemployment and sickness benefits. In accomplishing that mission the Board pays over $7 billion each year in benefits.

The fiscal 1992 budget request is $315 million for the dual benefits account, $74 million for limitation on administration, $17.2 million for limitation on railroad unemployment insurance and $13.9 million for a special management improvement fund.

I note that the Board is requesting that funding provided for the special management improvement fund be available through fiscal year 1996, and that a number of legislative proposals are included in the request submitted to this committee. These legislative proposals shortly will be addressed by the authorizing committee and not by the appropriations committee.

Mr. Glen Bower, the Chairman of the Board, is here today, and Mr. Bower, welcome to the subcommittee. Your statement will appear in the record in its entirety. Please proceed to summarize your statement.

INTRODUCTION OF ASSOCIATES

Mr. BOWER. Thank you, Mr. Chairman. My name is Glen Bower. I am the Chairman of the Railroad Retirement Board. The Board's membership also includes Andrew F. Reardon, who is seated to my right and who is the management member, and C.J. Chamberlain, the labor member who is not present today but is represented by his assistant, Jim Boehner, who is seated to my left.

SUMMARY STATEMENT

I am pleased to be here today to present the administration's budget proposal for fiscal year 1992 for the Board. I respectfully request that the statement be put in the record as you have already indicated it will be.

During fiscal year 1990, the Board paid $7.2 billion in retirement and survivor benefits to about 950,000 annuitants and $95 million in unemployment and sickness insurance benefits to about 55,000 beneficiaries.

During fiscal year 1991, the Board will pay benefits to approximately 890,000 retirement and survivor annuitants. I would like to report on several significant activities which have taken place in the last 12 months. These activities have given rise to a new set of priorities at the Board, priorities which I hope you will support.

MANAGEMENT REVIEW OF THE RAILROAD RETIREMENT BOARD [RRB] Based upon various GAO reports, RRB Inspector General reports and Board internal control reports and other sources, OMB launched a thorough management review of our agency. It included a 2-week onsite visit by a 20-person review team.

The review team drafted a set of recommendations which led to numerous extensive discussions with OMB and the Board to evaluate, analyze, and propose solutions to problems facing the Board. A set of initiatives was given and has been incorporated into an agreement between OMB and the Board.

The agreement has now been finalized. We are confident that the long hours and many discussions with OMB officials will indeed produce significant changes at the Board.

The agreement calls for the creation this year of a special management improvement fund to be used over the next 5 years. This year's budget request's most significant enhancement is the funding of these improvements. We recognize, however, that without the support of the Congress the OMB-RRB contract cannot be carried out. I will discuss this proposal in a moment.

PROGRAM INTEGRITY ACTIVITIES

In the area of program integrity activities, during fiscal year 1990 we continued to make improvements in our program integrity operations. Fiscal year 1990 program integrity activities included investigation of uncashed checks, monitoring earnings, matching payroll records with railroads and States, and performing other types of monitoring and matching functions related to disability, age, and death. Some results of our fiscal year 1990 program integrity activities are detailed in the statement which I have submitted to you.

As I am certain you know, Mr. Chairman, the Inspector General of the Railroad Retirement Board, William J. Doyle, and his staff continue to play an integral role in the program integrity activities. We have referred numerous cases for investigation to the inspector general, and in the fiscal year 1990 we referred 272 such cases to his office. It is our hope that the continued crack-down on fraud upon our programs will be a strong deterrent.

MAINFRAME COMPUTER

Funds of $2.89 million were provided in fiscal year 1991 to install and fund the first year of a 5-year lease-to-purchase procurement of a mainframe computer. The General Services Administration has approved delegation of procurement authority. On a parallel path, we are attempting to acquire a computer declared excess by another Federal agency. Such an acquisition would result in substan

tial savings. The new computer will enable us to implement several priorities of our agency and improve service to our beneficiaries.

FISCAL YEAR 1992 APPROPRIATION REQUEST

I would like to summarize and highlight for you the new and important funding areas. As mentioned earlier, the requested increase for administrative funds over 1991 is primarily due to $13.9 million request for a special management improvement fund that we negotiated with the Office of Management and Budget.

The requests for our other administrative accounts also increases because of the January 1991 pay increase reflected for the entire 1992 fiscal year and an anticipated pay raise of 4.2 percent in January 1992, building rental costs, the postal rate increases and an anticipated increase in communication systems usage.

More funds are also requested in 1992 over 1991 for contractual services and equipment. Additional equipment funds would be used primarily to acquire additional personal computers, computer terminals, and auxiliary equipment.

Therefore, for fiscal year 1992, $105,210,000 and 1,711 FTE's are requested in the administration's budget for our agency. This would provide $94,564,000 for fiscal year 1992 administrative expenses. The balance of the appropriation-$10,646,000—would be obligated in fiscal years 1993 through 1996.

The inspector general has prepared a separate justification for audit and investigative activities. This is separate from our own funds, and we are requesting that you support this budget as we think it will be dollars well spent.

SPECIAL MANAGEMENT IMPROVEMENT FUND

As noted earlier, a management improvement plan has been prepared in connection with the OMB review. I would like to briefly discuss the highlights with you.

BACKLOG CASES

As you can see from the chart, a major backlog of adjustments to retirement and survivor cases still exist. A concerted effort by a sizable number of skilled and experienced claims examiners is needed to eliminate the backlogs in the next few years.

The dark bars on the chart indicate the number of expected backlog cases at current FTE levels and the shaded bars indicate the number of expected backlog cases at the enhanced FTE levels. Performance objectives for the number, accuracy, and timeliness of processing these cases have been agreed upon by the Office of Management and Budget.

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In the areas of debt collection, the Board would establish a strong executive position to manage the Board's debt collection program; expand and use debt collection agencies and the income tax offset program, eliminate the backlog of unemployment insurance cases requiring that accounts receivable be established, work toward debt offset programs where possible, and explore and use other collection tools. These debt collection enhancement programs would be more than offset by increased revenues to our funds.

FRAUD CONTROL

In the area of fraud control, Mr. Chairman, as you can see from the chart, in the last 6 months we have made significant progress in contracting with States to perform automated wage matches. As of October 1, 1990, we had contracts with 10 States that provided automatic wage matches covering about 48 percent of all railroad employees.

As of March 1, 1991, the number of States under contract had increased to 23 States and will cover about 70 percent of all railroad employees. It is our goal to enter into agreements with each of the 50 States and the District of Columbia if cost effective and as soon as practical.

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