If the ceiling is removed, does the Air Force plan to ask for $95 million more than is currently authorized? Answer: As a point of clarification, working with OSD, the estimated appropriated fund shortfall for mission sustaining and basic community support Morale, Welfare and Recreation activities has been revised upward since my testimony from $95 million to $138 million. The increase is partially due to the impact of recent Congressional approval to retain appropriated fund support for Morale, Welfare and Recreation Business activities at designated remote and isolated locations ($15.8M). The remainder of the difference is due to increased Morale, Welfare and Recreation manpower authorizations ($14.3M) identified in a just completed Air Force Manpower priceout study and estimated child development program growth ($12.9M). The $138M shortfall is an estimate of the funding required to fully implement the revised, Congressionally approved, DoD policy for funding mission sustaining and basic community support Morale, Welfare and Recreation activities. If the ceiling is removed, these requirements will be able to compete for funding with other Air Force requirements on a priority bases. Question: Would child care then be funded at a higher level than is currently funded? Answer: Unfunded child care requirements would be able to compete for funding with other Air Force requirements on a priority basis. Question: Would the appropriated fund reductions for clubs and golf courses then be rescinded? Answer: No AFTERNOON SESSION ARMY O&M STATEMENT OF HON. EARL HUTTO, A REPRESENTATIVE FROM FLORIDA, CHAIRMAN, READINESS SUBCOMMITTEE Mr. HUTTO. The Subcommittee on Readiness will come to order. This afternoon the subcommittee will continue its consideration of the fiscal years 1990-1991 Department of Defense Operation and Maintenance budget request with testimony from Army witnesses. At this time I would like to welcome Lt. Gen. James F. McCall, Comptroller of the Army, and Brig. Gen. Joe Robles, Assistant Director for Operations, Army Budget Office. General McCall, I understand that your peers have given you the nickname of "Cash McCall." Given the state of the Army budget and how it is faring in DOD, it is very appropriate at this time to have "Cash McCall" with us. Before we proceed further, I would like to take this opportunity to congratulate General Robles on his recent and well deserved promotion to Brigadier General. General Robles, we congratulate you. Since Mr. Kasich, our ranking minority member, is not here at the moment, we will admit his statement for the record. PREPARED STATEMENT OF HON. JOHN R. KASICH, A REPRESENTATIVE FROM OHIO, RANKING MINORITY MEMBER, READINESS SUBCOMMITTEE I would like to thank Chairman Hutto for his remarks, and I want to take this opportunity to welcome Lieutenant General McCall and Brigadier General Robles, who will review for us the Army's fiscal year 1990 Operation and Maintenance budget request. Like the other services, the Army is facing a very difficult budget environment, because the modernization of the early 1980s has created a "wake" of O&M funding requirements just as budget toplines are stagnating. A glance at the graph on maintenance backlog provided in General McCall's testimony will confirm this. It is clear that modernization and readiness are on a coilision course. It would be tragic if this country frittered away the significant gains in combat capability that were achieved in the 1980s. The United States has benefited from a policy of peace through strength. I hope today's witnesses can give this subcommittee the very best advice on maintaining that strength. Thank you, Mr. Chairman. Mr. HUTTO. We are glad to have you gentlemen with us. General McCall, if you will proceed in any manner you see fit. STATEMENT OF LT. GEN. JAMES F. McCALL, COMPTROLLER, U.S. ARMY, ACCOMPANIED BY BRIG. GEN. JOSUE ROBLES, JR., ASSISTANT DIRECTOR FOR OPERATIONS, ARMY BUDGET OFFICE General MCCALL. Thank you, Mr. Chairman. Mr. HUTTO. I hope you brought some cash with you. General MCCALL. No, sir. That is the accolade I get every meeting in the Pentagon. Sir, I would also like to have my formal statement placed into the record, if I might. Mr. HUTTO. Yes. Without objection, it will be entered in its entirety in the record. PREPARED STATEMENT OF LT. GEN. JAMES F. MCCALL OPENING REMARKS Mr. Chairman and Members of the Committee, I am The OMA appropriation provides the essential funding to support the Army Leadership's vision of how the total Army should prepare for land combat both today and tomorrow. To maintain and sustain modern, ready ground forces our Nation must: O Recruit and retain high quality soldiers; O Train them in a realistic, demanding environment; Field them in a force structure that demonstrates resolve and flexibility through forward deployed units, backed by a strategic reserve capable of rapidly projecting ground power; O Modernize and support them to ensure qualitative advantages over our adversaries; and O Develop the leaders needed to command and inspire our forces in war and peace. Over the past years, with your help, we have improved our readiness by recruiting and retaining quality soldiers, enhancing soldier and civilian skills and motivation, and modernizing the force with equipment of much greater capability. Maximum readiness depends on a reasoned balance among the investment, personnel, and operation and maintenance appropriations. At the same time, given the austere budgetary environment, we must be good stewards to conserve the resources that we have. We feel our FY 1990/91 OMA budget request provides the funding that we need to operate and maintain this Army that we support. MANAGEMENT INITIATIVES We, in the Army, take our role of stewardship very seriously. I am proud to be able to bring to your attention some areas where we have made inroads in the area of financial management. o In an effort to maximize efficiency and conserve resources, I would like to share with you some of the steps we have taken to improve operations. In Public Law 99-627, Congress permitted the Administrator of the General Services Administration (GSA) to delegate authority to agencies to conduct prepayment audits when cost effective or otherwise in the public interest. Under the auspices of the DOD Transportation Cost Reduction Action, the Army is conducting a test which requires the pre-audit for all freight bills over $10,000 in value, guaranteed traffic bills and all rail bills for transportation into and out of Fort Irwin, CA, home of the National Training Center. The purpose of this pre-audit is to ensure we do not overpay carriers to move materials. In the past, these transportation bills were reviewed after the fact. The US Army Finance and Accounting Center (USAFAC) is using an in-house capability of civilian overhires to conduct a one year test to determine the actual level of savings which would result from conducting the pre-audit mission. Funding for the test was provided from within the Army's current FY89 program ($500 thousand). It is anticipated that savings from the program will be in the form of cost avoidance. We are very excited about the prospects of this program in the transportation arena. o A principle that is seeing more and more emphasis in the Army is the concept of chargeback for products or services. Instead of centralizing funds for particular missions we now decentralize the funds to the commands that use the services. This means that users are charged for their products and services instead of having them paid for by a centralized account or by a single command. As execution occurs, the command or installation using the services is billed or charged for the fees associated with that service. Since users pay for their charges there is an economic incentive for them to obtain products and services only at the level required and at least cost. This concept is being tested in the Information Mission Area and in the Hazardous Waste Disposal Program. O Another management initiative deals with the way the Army will pay for official mail beginning in FY 1990. Currently, postal charges are incurred at all levels of the Army but are paid centrally. Major commands are issued mail targets but do not really have the incentive to intensely manage postal charges. The new method will change how the Army pays for official mail from a "charge" or delayed payment mode to the commercial method of prepaid or pay-as-you-go way of doing business. This new approach offers several stewardship advantages. We dispel the perception that mail is free to Army users. We bring fiscal and management responsibility down to the garrison level where costs are incurred thereby giving commanders an economic incentive to find the least costly method for mailing. o We are also making progress in the area of civilian personnel management. Currently, the Army is testing a civilian personnel modernization initiative called Managing the Civilian Work Force to Budget (MCB) at 15 Army activities. It involves delegation of authority for position classification and management of civilian personnel resources to the lowest practical level of management. Administrative controls on employment levels, high grade positions, and overtime are replaced by single dollar limit for civilian personnel costs. This allows commanders and local supervisors to structure their work force according to mission requirements without arbitrary and artificial constraints. MCB also requires activities to develop incentives for increased productivity by returning savings to well managed organizations. The total payroll expenditures by the 15 initial activities during FY88 was $5 million under budget. Twenty percent ($1 million) was validated as savings achieved through proactive management initiatives, and shared between the activity and activity employees through reinvestment plans and incentive awards. MCB will be expanded in FY90 to an additional 30 activities. o Finally, I would like to give you a few examples of how our soldiers and civilians are utilizing their computers and automated systems to improve the way we manage our resources. oo As part of the installation support module effort, dedicated civilians at the US Army Field Artillery Center at Fort Sill, OK developed an automated system to process high-priority requisitions. This streamlined process filled critically needed items in a shorter amount of time. Time savers allow us to concentrate on our most pressing missions. |