in which there would be insufficient space to accommodate NAFI dependents whose tuition was waived.

The contributions of the NAFI employee overseas are significant. DODDS would be happy to provide educational services to any dependent which the Congress should determine to be entitled to enrollment and for whom appropriate funding were appropriated. DODDS has indicated that it would support legislation advanced by the NAFI's to authorize public education for their dependents. DODDS has not, however, sought funding for NAFI's under existing law because of the long standing specific prohibition on using appropriated dollars for NAFI employee dependents.

Question: The Army and Air Force Exchange Service provides DoD schools with the school lunch program. We understand that there are efforts underway for AAFES to provide monitors in the cafeterias at lunch time. Do you believe that AAFES, in its status as a nonappropriated fund instrumentality, has the obligation to provide this supervision?

Dr. Lagomarsino: Do DDS does not believe AAFES has this obligation. The reason that DoDDS has explored the possibility of contracting with AAFES to provide monitors is that Do DDS' staffing ceilings virtually exclude the possibility of hiring lunch time monitors as is the common practice in U.S. school systems; however, they do not preclude extending the workday of part-time employees. There are, in fact, many instances in which employees working part-time as teacher aides can add lunchroom monitoring to their assignments without resulting in use of additional manpower spaces. Committees of both houses of Congress reviewed this specific issue in 1986. While there was support for exempting the hiring of lunchroom monitors from manpower ceilings, the ceilings continued to be in effect under the Defense Reorganization Act of 1987 (Goldwater-Nichols).

Question: Isn't this a school responsibility?

Dr. Lagomarsino: Yes, it is and it is assumed by school staff. School principals commonly supervise lunchrooms; teachers assist with lunchroom supervision; and as mentioned in the previous question, teacher aides are sometimes available for this duty. The need to provide teachers with a duty-free lunch period remains a problem; therefore, we have considered alternatives such as attempting to include monitors in the AAFES contract.

Mr. Flinn, General McCausland, and Ms. Duke, and Dr. Lagomarsino, we thank you very much for being here for your testimo ny and for your response to questions, and we look forward to working with you.

The subcommittee stands adjourned until 1:30.

[Whereupon, the subcommittee was adjourned to reconvene at 1:30 p.m.]

AFTERNOON SESSION

DOD CIVILIAN MANAGEMENT

STATEMENT OF HON. EARL HUTTO, A REPRESENTATIVE FROM FLORIDA, CHAIRMAN, READINESS SUBCOMMITTEE

Mr. HUTTO. The Subcommittee on Readiness will come to order. In this afternoon's hearing, we begin exploring what I believe to be one of the main challenges facing this subcommittee for the foreseeable future-identifying ways to reduce the Defense O&M budget without reducing the readiness of our war-fighting units.

During the build-up in the early 1980s, the Department did not have a plan to spend the large funding increases. There was no prioritization of programs. It seems that everyone just got more, instead of the funding being directed to areas where it was needed the most.

Now that the tide is changing and budget reductions are imminent, the Department will try to perhaps take the easy way out to distribute the pain. Everyone will get less without regard to their contribution to the national defense.

This is clearly not an acceptable way to do business. The Congress must insist on priorities being set, and we must insist on a plan to preserve war-fighting ability while reducing unnecessary or marginally-contributing support units. We must protect those areas of the O&M account that directly impact on our war-fighting capability and direct reductions in those areas that do not.

That is the thrust of Mr. Derek Vander Schaaf's report on the Headquarters Staffing of the Unified and Specified Commands. His team has made recommendations that they feel would eliminate unnecessary and duplicative headquarters structures that do not contribute to any war-fighting capability.

The report is realistic in assessing the current budgetary realities and then making recommendations that they believe would help to protect our war-fighting units. If the Department would implement the recommendations, it could save $2 billion, and there would be additional savings in operating and support costs.

To be fair, Secretary Carlucci did mandate reducing several thousand spaces, but the JCS has opposed most of the recommendations in the report, and this is what we want to learn about and know why, and so, we look forward to the testimony this afternoon.

Mr. HUTTO. Mr. Vander Schaaf, you and your team are to be congratulated for your study and report. Your recommendations are logical, seemingly, and well documented. We look forward to your testimony.

At this time, I would like to recognize our ranking minority member on the Readiness Subcommittee, Mr. Kasich.

Mr. Kasich.

Mr. KASICH. Thank you, Mr. Chairman.

I would just as soon submit the statement for the record and welcome Mr. Vander Schaaf this afternoon.

PREPARED STATEMENT OF HON. JOHN R. KASICH, A REPRESENTATIVE FROM OHIO, RANKING MINORITY MEMBER, READINESS SUBCOMMITTEE

Thank you, Mr. Chairman.

I want take this opportunity to welcome Derek Vander Schaaf before this subcommittee. I have worked with Derek over the years and have come to regard his wisdom and experience highly.

Derek, I can't think of a better person for Secretary Carlucci to turn to, to get an objective and thorough analysis of these headquarters functions. I think your team did a terrific job and your recommendations are both sweeping and well founded. It is work like this that has reinforced my belief that there are significant savings to be had in the DOD budget if we can only get a handle on the bloated bureaucracies and entrenched overhead that does not contribute one bit to our national defense. I have reviewed the testimony of the OSD and JCS witnesses and I am amazed that they are so vague. The military has taken on a "trust me" profile, these issues are too important to be left to civilians. Well, my reaction to that is that these issues are too important to be left to a military bureaucracy that is more interested in the number of general office billets than they are in developing a coherent strategy for our national defense at a reasonable cost.

Mr. Chairman, this is another study that makes common sense recommendations that, if implemented, will save defense dollars and lead to a more streamlined, effective national defense structure. I intend to keep following up on these recommendations until the Department implements them and takes the appropriate actions.

Mr. HUTTO. Thank you, Mr. Kasich, and your statement will be admitted.

Mr. Vander Schaaf, if you will come forward, we are now ready to hear your statement.

STATEMENT OF DEREK VANDER SCHAAF, DEPUTY INSPECTOR GENERAL, DEPARTMENT OF DEFENSE

Mr. VANDER SCHAAF. Thank you, Mr. Chairman.

It is a pleasure to be here. I appreciate your opening remarks. The other day, I had lunch with someone in the Gold Room over in the Office of the Secretary of Defense, and they referred to me as the Salmon Rushdie of the Joint Chiefs of Staff. At that point, I figured maybe I was in real trouble with this business, but I am here.

I have a very long statement. I am sorry it is as long as it is. In fact, it is a compilation reduced down to about fifty double-spaced pages of a report, that we did during a 7-week period that is some 350 pages of single-spaced print.

Mr. HUTTO. We would rather not be here till midnight tonight. Mr. VANDER SCHAAF. I will not go through that entire statement, Mr. Chairman.

Mr. HUTTO. OK.

Mr. VANDER SCHAAF. Before I do start, though, I would like to do one thing. I would like to thank and publicly recognize two people who helped very much in this report, and who until now, have not had any recognition for their effort.

I have with me Ms. Lorraine Carpenter. Lorraine is the sergeant major of this operation that we ran for 7 weeks. Believe me, it was an operation. She had to make sure the elements of the report were proceeding in a parallel manner because I would come in out

of the field over the weekend, dictate and write segments and be back out the next day. Lorraine had to get all kinds of documents from the Joint Staff, which was not necessarily easy, and from various commands around the world.

In addition, I want to recognize my secretary, Ms. Frame, who has never been on Capitol Hill before. Pat put in some real duty typing this report about three times in about 2 weeks.

Neither one have had any opportunity to be at a congressional hearing. I said, well, I am taking these two people with me and give them a little public recognition for the job and effort that they have invested in this report.

Mr. HUTTO. Well, we appreciate their participation.

Mr. VANDER SCHAAF. As you mentioned, Mr. Chairman, Secretary Carlucci requested that I go out and try to perform a review of the Unified and Specified Commands. He gave me marching orders to have a report back on his desk in 7 weeks. That was a terrific task to do in such a short period of time, but I think we have accomplished it.

I am happy with the product. I am willing to stand behind the product. I do not, however, stand behind every word as being gospel or anything of that nature because these are items that reasonable men can disagree on. On the other hand, I think the general gist and trend of what I have put in the report and what we have documented will stand the scrutiny of time and the kind of scrutiny that you, here in the Congress, will give it.

I personally participated in almost all of the on-site visits. I personally conducted interviews with the four star commanders involved. I talked to many other general officers, many colonels, captains, majors, up and down the chain of command, in the process of doing this report.

What I tried to do was find out whether or not the headquarters effort was necessary and useful, and even if it was, was it being performed by another headquarters, either above or below the headquarters we were looking at?

I also focused on various organizational concepts. How the commands interacted with each other, specific mission authority, and what happens to change that command during periods of crisis or wartime.

I also made an early decision that we were not going to go with any across-the-board percentage reductions. Those are self-defeating. I have seen the Congress in its frustration, if you will, trying to deal with headquarters structures and headquarters management. The question posed would be say let us take a 10 percent reduction, let us do a 5 percent reduction, and invariably no reduction as a result of those kinds of activities. What happens is that the Department and the commands involved have a way of redefining what constitutes headquarters, the people back into a direct reporting unit, or otherwise obfuscating the problem. We have found out that the people do not leave.

As a matter of fact, when we took a look at the Department's reporting, which started about 33,000 people assigned to the headquarters of the Unified and Specified Commands, and those commands underneath, when we actually started counting heads, if you will, and looking at manning documents-instead of 33,000, we

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came up with 59,510 positions. About a 70 percent increase in the number of positions, and this is largely due to how one interprets what is a headquarters activity and function and so forth.

Another point I want to make is that this was not an audit in the usual sense of an IG-conducted audit. We did not do this to audit standards. I do not know that if we had attempted to do it to audit standards, if it would make any better product. I would have liked to have had a little more time to follow up. I probably could have documented a little better how the people were actually spending their time as opposed to how their job descriptions said they were spending their time. I want to assure you, Mr. Chairman, that the people who worked on this are competent people. They have long experience in the Department of Defense. I had a number of retired officers who worked with me on this group.

We just were not babes in the woods who walked into these headquarters and made some quick snap judgments. I have been working in this business for 25 years. Some of the people who worked on this project, who are now retired, had 25 or 30 years of military service.

So, anyway, I bring that up because I think there has been somewhat of an attempt to maybe diminish the results of this study because of the way we did it, and the time we took to do it.

The results of the study are built around three areas where we thought we ought to take a good hard look, and save some people. First, was unnecessary military service component commands at each and every unified command in the structure. We said that, frankly, you do not need a military service component command at every unified command.

Second, we looked at unnecessary management oversight of base operations activity. We felt there were layers of management oversight on base operations functions in these commands that were redundant and unnecessary. Finally, we thought there were some overstaffed and redundant planning functions within those staffs. Around those three major areas, we developed more specific recommendations, which dealt with individual commands and specific recommendations on positions to be eliminated from individual commands.

Now, in my opinion, neither the balancing of authority with responsibility nor the efficient nor effective use of resources that was envisioned in the Reorganization Act, and I am not talking about the Goldwater-Nichols Reorganization Act, is likely to be achieved unless at a minimum the unified command plan is changed to eliminate military service component commands of the supporting unified commands that do not have geographical areas of responsibility.

Now, three unified commands fall into this category. These include:

The U.S. Space Command, which has no geographical responsibility. It has all of space, in effect, as its area of command.

The U.S. Special Operations Command, CINCSOC, as it is often referred to.

The U.S. Transportation Command.