Mr. FRANKE. The costs of services provided to clients of Working Capital Fund activities are recovered from all users according to their respective volumes of demand. Non-USDA clients do, in fact, pay their fair share of costs for services. As new clients are introduced to services, they bear their fair share of fixed costs of operation. They also pay for that share of variable costs attributable to their demand for service. The result is that while total costs may increase, as reflected in the estimated cost increase of $1,048,000 at the National Finance Center, unit costs of service to each client inside and outside of USDA actually decrease. In the example you raised of the National Finance Center, we expect that unit costs based on transaction volumes will actually have decreased, in 1982 dollars, from $2.62 to $2.38. The non-USDA agencies also benefit from this "cross-servicing" arrangement through avoidance of systems development costs, implementation costs, and ongoing operating costs required in maintaining their own systems. We in USDA receive benefits through reduced shares of fixed costs and other synergistic effects of collective multi-agency development of service requirements. ADP SYSTEMS Mr. WHITTEN. You are requesting an increase of $1,172,000 for recurring operations of ADP systems. Again, a portion of this is to handle non-USDA demands. Is non-USDA demand for services not paying its fair share? Mr. FRANKE. Mr. Chairman, the simple answer is that nonUSDA clients, both here in ADP systems, and elsewhere in the Fund, are paying their fair share. While not as developed as the cross-services strategy employed at the National Finance Center, our ADP systems realize that cost efficiencies are to be gained by pooling resources and providing service to clients outside of USDA. Mr. Chairman, our primary goals in pursuing this approach are to reduce costs to our own USDA clients without any reduction in service quality. That outside clients are making use of our capabilities testifies to our ability to deliver superior service in a cost efficient manner. It is not our intention to bring on outside users at the expense of our own agencies. If any potential agreement with an outside user were to indicate greater costs to our own users, we would not enter into that agreement. CROSS SERVICING Mr. WHITTEN. You have also requested $4,970,000 to increase the services of the Office of Finance and Management to allow for the expansion of services to USDA and non-USDA agencies. Are the non-USDA clients not paying their fair share of these costs? Mr. FRANKE. Mr. Chairman, the $4,970,000 pertains to capital acquisition requirements at the National Finance Center. The proposed acquisitions will serve both USDA and non-USDA clients. However, the costs of those acquisitions will be recovered through depreciation charges billed to users over the useful life of the assets in a manner which reflects each users demand for NFC services. As with all other charges for WCF services, depreciation charges will be equitably distributed to insure that both USDA and non-USDA clients pay their fair share of costs. COPIER EQUIPMENT Mr. WHITTEN. You are requesting an increase of $122,000 in capital acquisitions for the Office of Operations. The justification states that copiers are needed to meet further increases in demand resulting from the closing of the USDA printing plant. How does this relate to the request for an increase in the recurring operations of Reproduction Services? Mr. FRANKE. Of the $122,000 increase in capital acquisitions for the Office of Operations, $77,000 was requested for the Copier/Duplicating Center. The additional capital equipment will replace and upgrade high-speed copiers, and will enable the Center to meet anticipated demand, reduce production expense, and continue to provide service at costs among the lowest in Government. The effect of the capital acquisitions on recurring costs will be in the costs for depreciation on these assets. We expect that rental costs will offset much or all of this increase, and that costs-per-copy will decline as greater workload volumes are handled by these acquisitions. SYSTEMS FURNITURE Mr. WHITTEN. According to the explanatory notes you are requesting an increase of $3,245,000 for the one-time acquisition of systems furniture to consolidate the Forest Service from leased space to government-owned space. How much will the government save by consolidating the Forest Service into a single building? Mr. FRANKE. We estimate that the government will save $6.9 million on a ten-year period. I will submit a table for the record showing the savings. [The information follows:] Relocation Cost: Current Auditors occupants to temporary space... $85,400 Forest Service from Rosslyn and South Building to complete Auditors Building. 182,000 Previous Auditors occupants from temporary space to South Building 85,400 3,245,000 Total expenses. 3,597,800 Cost Avoidance: Elimination of Forest Service shuttle from Rosslyn-(annual) 118,000 Space cost savings as a result of Forest Service vacating Rosslyn(annually) 933,250 Total projected annual savings 1,051,250 10-year savings. 10,512,500 Less relocation cost and one-time systems furniture cost... 3,597,800 Approximately 10-year net savings.......... 6,914,700 ADVISORY COMMITTEES Mr. WHITTEN. Some of the Advisory Committees did not meet in fiscal year 1986. What happens to the funds allocated for these Committees when they do not meet? Mr. FRANKE. Funds not used by one committee are made available to other committees in the same policy area. If these funds are not needed by other committees in the same policy area, then they are made available on an as needed basis to committees in another policy area. Otherwise, the funds lapse. WORKING CAPITAL FUND Mr. WHITTEN. According go the explanatory notes you are proposing to purchase equipment totaling $17,123,000 for fiscal year 1988 through the Working Capital Fund. Please provide for the record a description of the equipment you are proposing to purchase and explain its purpose and where it will be utilized. Mr. FRANKE. Of the planned purchases, $16,728,000 or 98 percent, is for ADP and telecommunications equipment for the National Finance Center and the Departmental Computer Centers. This equipment is to replace obsolete equipment with more reliable and faster processing equipment to meet agencies' projected ADP requirements at lower unit costs. These funds will also be used to purchase existing equipment, currently leased, when it will lower costs to user agencies. I will provide additional information for the record. The remaining $395,000, or two percent, will be used to provide better and improved services to all agencies in the Washington, D.C. area in the following activities: Mail distribution, $161,000; Copier/Duplication Center, $111,000; Central Excess Property, $92,000; Central Supply Forms, $25,000; and Central Shipping and Receiving, $6,000. MANAGEMENT CONTROL AND EVALUATION Mr. WHITTEN. The budget references a controls evaluation team that conducted reviews of the Graduate School and OICD. Please summarize for the record the results and recommendations of those reviews. Mr. FRANKE. Of course. [The information follows:] The following are summaries of the results and recommendations from the management control evaluations performed at the Graduate School and Office of International Cooperation and Development during Fiscal year 1986. GRADUATE SCHOOL (GS) The Management Control Evaluation review of the USDA Graduate School reported corrective actions for FY 1984 and FY 1985 showed that generally the School was implementing the reported corrective actions and the actions were effective in correcting the problems. However, there were a few areas which were only partially complete. The areas which needed additional work included (1) documentation of the GS policy and procedures to assist in the enforcement of the administration of the School, (2) completion of the GS non-expendable property inventory for safeguarding of the School property, (3) enhancement of the School internal ADP security of ensure users access only to their authorized areas of work, including password use and security for computers, and (4) strengthening of controls over the GS cash and debt management functions. The Graduate School agreed with the review team's recommendations and currently has made a good effort at meeting with the terms of the recommendations. During 1987 the Department will ensure the Graduate School compliance with these recommendations. OFFICE OF INTERNATIONAL COOPERATION AND DEVELOPMENT (OICD) The Management Control evaluation of OICD corrective actions for Fiscal Years 1984 and 1985 showed that the agency's reported actions generally were sufficient in resolving its reported weaknesses. The evaluation team recommended that OICD internal directives be amended in the areas of (1) procurement and contracting to show the maximum duration allowable for use of their annual appropriations and to require that their official files contain contractor's reports of accomplishments, and (2) adherence to the Department's travel regulations, OICD should request special exemptions from the Department's travel policies when appropriate and revise the OICD travelers' charge card directive to be more in line with the Departmental regulations. OICD accepted the recommendations. The Office of Finance and Management will follow-up with the agency to insure compliance with these recommendations. OFFICE OF THE SECRETARY SENIOR LEVEL POSITIONS Mr. WHITTEN. Please provide for the record a job title and brief position description for the 20 positions you show in grades ES-1 through ES-6 and the 5 positions you show in GS-16 through 18. Mr. FRANKE. I would be happy to provide a brief description of those positions for the record. There are currently 13 positions planned for ES-1 through ES-6, and five positions planned for GS-16 through GS-18. [The information follows:] |