The Department's regional offices are maintained by this appropriation and provide to the constituent units in the field not only program coordination, but in many instances, all administrative services common to all units. Regional directors, executive assistants, and their secretaries devote most of their time to program coordination, Federal-State relations, and liaison with Federal, State, and private agencies concerned with the programs of the Department. The 1955 regional office staff was based upon providing payroll, personnel, fiscal, and general services for approximately 8,120 employees in the Department's regional and field offices. It is estimated that during 1956 the number of employees services will be approximately 13,230. The budget request for fiscal vear 1956 for these business management activities includes an increase of $141,292. The need for this increase stems principally from three factors: (1) An increase of field staffing of 2,200 positions in the Bureau of Old-Age and Survivors Insurance brought about by the 1954 amendments to the Social Security Act; (2) the proposed reversion of OASI area office payroll function to the regional office; and (3) the need for the establishment of a records management program in each of the regional offices. DIVISION OF GRANT-IN-AID AUDITS The Division of Grant-in-Aid Audits has the responsibility for auditing grants made to State agencies for the 25 grant-in-aid programs administered by the Department through the Public Health Service, the Social Security Administration, the Office of Vocational Rehabilitation, and the Office of Education. It is also the function of this Division to work with other divisions of the Office of Field Administration and the several program bureaus and offices in the development and interpretation of fiscal requirements and standards governing the use of grant-in-aid funds. Approximately 93 percent of the general fund expenditures of the Department is for grants-in-aid, most of which are audited by this Division. Audits should be made this year of State expenditures of $3,200 million, more than one-half of which is from Federal funds. Audits are made on a test-check basis. Exclusive of backlog, the normal workload for 1956 is estimated at 2,175 audits, of which 1,075 will be hospital and school construction audits. Audits of school and hospital construction projects must be made promptly so that contractors and vendors can be paid. These audits, therefore, are given first priority with the result that audits of the regular programs are delayed even more disproportionately than a staff shortage would indicate. The principal problem of the Audit Division is the accumulated backlog created by shortage of staff and travel funds. Audits are considered current when the field audit work for a given year can be completed in the following year. To the extent that this cannot be done, a backlog exists. From 1948 to June 1952, the audit staff was progressively reduced by 97 positions. During this same period, there has been a progressively increasing workload, particularly in the number of hospital and school construction audits. Because of this increase in workload, the audits dropped behind so rapidly that they were losing their value for administrative purposes. As of July 1, 1953, there was a backlog of 37 man-years. During 1954 the backlog increased by 13 man-years to a total of 50 on July 1, 1954. The additional staff and travel funds made available in 1955 will not permit bringing the audits to a current status but enables us to hold at about the same level. The increase requested for 1956 will provide sufficient staff to perform current audits and to gradually eliminate the accumulated backlog in approximately 6 years. Grant-in-aid audits are the basis for final settlements between the States and the Federal Government. It is important that they be made as soon as possible after the close of each year in order that the States may promptly know what amounts are disallowed and the causes leading to the disallowances so they can avoid loss of funds in the future. Criticisms from the States because of the delav in closing their accounts is an indication of the strain this situation places on Federal-State relationships. It makes all the problems raised by the audits more difficult to solve because of loss of records in the States and turnover in the staff of State agencies. Delays in the audits also mean that the bureaus, constituent units, and the Secretary lack current information as to the problems arising in the grant-in-aid programs. Delays also forestall taking promptly remedial steps that should be taken and deny to the Secretary the knowledge with which to assure Congress as to whether current funds have been spent for the purposes appropriated. DIVISION OF STATE MERIT SYSTEMS The Division of State Merit Systems administers merit system provisions of the grant-in-aid laws and/or regulations of the Social Security Administration, Public Health Service, Office of Vocational Rehabilitation, and Bureau of Employment Security of the Department of Labor. The work was formerly performed in separate units for the different programs but was consolidated for purposes of economy and better coordination. Merit system plan provisions and operations of 290 State agencies administering 17 types of grant-in-aid programs in the States and 70 State merit systems are reviewed. Over 70 percent of the Federal grants for administration are for personal services. Consultative and informational services on personnel administration to States are furnished on request. The 1956 request is for the same number of positions but includes an additional sum to provide essential full-time secretarial services in 2 regions and 1 technical position lapsed for lack of funds. This position is needed to render adequate services to regional offices and State agencies and for additional work necessary in the expanded vocational rehabilitation program. ADDENDUM TO STATEMENT FOR 1956 APPROPRIATIONS The request for 1956 is in two parts: An appropriation of $1,915,000 for an increase of $115,000 over 1955, and a transfer from the OASI trust fund of $475,000 which is $125,000 over the transfer available in 1955. The House allowed only $50,000 of the increase of $125,000 requested from the trust fund; this increase allows for 8 positions to reestablish in regional offices the payrolling of OASI area office employees, and to provide 9 of the 35 positions requested for payrolling, personnel, and other management services to the 2,200 additional employees placed in OASI district offices during fiscal year 1955. The House disallowed the entire increase of $115,000 in the regular appropriation and $75,000 of the increase requested from the trust fund. It is requested that the total of $190,000 disallowed be restored for the following purposes: OFFICE OF FIELD ADMINISTRATION Thirty-nine thousand and seven-hundred and seventy-two dollars is requested primarily to establish in each regional office a records management officer for supervision of records mangement responsibilities required by law. As a result of the reduction made in the Office of Field Administration appropriation for fiscal year 1955, it was necessary at the beginning of the fiscal year to discontinue central files operations in the regional offices and return the filing function to constituent units. As a result of this change, records management activities concerned primarily with filing efficiency, the disposal of non-record materials, and the transfer to General Services Aaministration records centers of infrequently used official material, cannot be carried out on a current basis. A recent survey by the General Services Administration in one regional office disclosed that filing efficiency and records disposal programs have fallen to a dangerously low point. Our own studies indicate that the same situation exists in a number of other regional offices. The positions requested are required to carry out a sound records management operation and will result in more efficient filing and permit the orderly disposal and transfer of records. Request is made for restoration of $75,000 from the OASI trust fund to hire 26 clerical employees in addition to the 9 allowed by the House action. The additional positions are necessary so that full management services can be provided the 2,200 additional employees being hired in the OASI district offices during fiscal year 1955. The regional offices thus far have met the more than 20 percent increase in workload by permitting the backlogging of certain essential functions, delaying the filling of vacancies in needed supervisory positions, curtailing necessary travel to States, and reducing procurement of supplies below proper minimums. In addition, employees in the management service units of the regional offices have been required to work overtime to a point where morale and employee health have been impaired. We have exhausted our resources in an effort to keep up with the increasing workload. GRANT-IN-AID AUDIT DIVISION Request is made for the restoration of the $65,000 increase requested for the fiscal year 1956 to employ 11 additional auditors. The additional auditors are needed to eliminate the present backlog by the end of fiscal year 1961. Due to rapid expansion in the hospital construction and school construction programs (for which no additional auditors were provided), a backlog began to develop in the grant-in-aid audit work which reached a total of 50 man-years by June 30, 1954. The additional staff provided by Congress for 1955 is sufficient only to prevent the accumulation of additional backlog and make some small reduction in the existing backlog. If the additional funds requested for 1956 are not allowed, the completion of some of the audits of State agencies will continue to be delayed for 3 and 4 years. Such delays are undesirable and have resulted in criticisms by the States. These delays make the problems found by auditors more difficult to solve because of loss of records in the States and turnover in the staff of State agencies. Delays in the audits mean that the bureaus and the Secretary's Office lack current fiscal information on the grant-in-aid programs, cannot take necessary remedial steps promptly, and therefore do not possess the knowledge with which to assure Congress on a current basis that all funds have been properly expended. To give the committee some idea of what the present backlog means in terms of delay, the following examples of certain programs may be cited. Field audits of public assistance agencies for the fiscal years 1952, 1953, and 1954 either have not been started or are in some stage of partial completion in the following States: Arkansas, Delaware, District of Columbia, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Nebraska, New Jersey, New York, North Carolina, Pennsylvania, Texas, Virginia, Puerto Pico, and the Virgin Islands. Field audits of health grants for the fiscal years 1951, 1952, 1953, and 1954 either have not been started or are in some stage of partial completion in the following States: Arkansas, Georgia, Louisiana, New Jersey, North Carolina, and Tennessee. Request is made for restoration of the $65,000. STATE MERIT SYSTEMS DIVISION The 1956 request contains an item of $10,228 which is essential to provide fulltime stenographic assistance instead of part-time services in two regions and to reactivate one technical position lapsed during the fiscal year 1955. The workload of the division has increased in the light of the expanding activities of the Office of Vocational Rehabilitation. This division had previously been sharply cut and this increase is needed to serve the consolidated merit system operations for the various grant-in-aid programs, involving 70 State merit systems and 290 State grant-in-aid agencies. SAINT ELIZABETHS HOSPITAL STATEMENTS OF DR. WINFRED OVERHOLSER, SUPERINTENDENT; DR. ADDISON M. DUVAL, ASSISTANT SUPERINTENDENT; S. B. WILSON, MAINTENANCE OFFICER; F. M. HALL, BUDGET OFFICER; JAMES F. KELLY, BUDGET OFFICER, HEW APPROPRIATION ESTIMATE Salaries and expenses: For expenses necessary for the maintenance and operation of the hospital, including purchase of clothing for patients and cooperation with organizations or individuals in the scientific research into the nature, causes, prevention and treatment of mental illness, [$2,445,000] $2,527,000. |