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Alabama Alaska Arizona Arkansas California

Colorado Connecticut Delaware Florida Georgia

Hawaii Idaho Illinois Indiana Iowa

Kansas Kentucky Louisiana Maine Maryland

Massachusetts Michigan Minnesota Mississippi Missouri

Montana
Nebraska
Nevada
New Hampshire
New Jersey

New Mexico
New York
North Carolina
North Dakota
Ohio

122,558 75,000 75,000 75,000 499,273

129, 363 75,000 75,000 78,900 526,992

75,000 75,000 75,000 263,497 173,481

75,000 75,000 75,000 278,126 183,112

75,000 75,000 284,874 134,841 75,000

75,000 75,000 300, 690 142,328 75,000

75,000 126,590 125,271

75,000 103,012

75,000 133,618 132,225

75,000 108,731

119,607 213,912 77,399 80,048 133,866

126,247 225,788 81,696 84,493 141, 298

75,000 75,000 75,000 75,000 180,683

75,000 75,000 75,000 75,000 190,714

75,000 447,994 194,631

75,000 260,350

75,000 472,866 205,437

75,000 274,804

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1/ Section 702 of the McKinney Act authorizes funds to be allocated to the

States on the basis of State estimates of their homeless populations,
with each State receiving at least $75,000. This method of allocation
has proved unworkable, and the Department has notified Congress that it
intends to allocate the funds according to a formula that takes into
account the number of individuals in each State who have attained 16
years of age, do not have a certificate of high school graduation or its
equivalent, and are not enrolled in a secondary school progras. As
specified in Section 702, no State would receive less than $75,000.
This formula is similar to that specified in the Adult Education Act,
and it provides a reasonable proxy for determining the relative nusbers
of homeless individuals in States.

WEDNESDAY, APRIL 13, 1988. DEPARTMENTAL MANAGEMENT

WITNESSES

BRUCE M. CARNES, DEPUTY UNDER SECRETARY FOR PLANNING, BUDGET

AND EVALUATION LeGREE S. DANIELS, ASSISTANT SECRETARY FOR CIVIL RIGHTS JAMES B. THOMAS, JR., INSPECTOR GENERAL THOMAS P. SKELLY, DIRECTOR, BUDGET SYSTEMS DIVISION, BUDGET SERVICE, OFFICE OF PLANNING, BUDGET AND EVALUATION

Mr. NATCHER. At this time we take up the budget request for the fiscal year 1989 for Departmental Management of the Department of Education.

Dr. Carnes, as you know, and those sitting at the table with you know, we completed vocational and adult education this morning. We are delighted to have you ladies and gentlemen back before the committee. Before you give us your statement, tell us who you have with you there at the table.

Mr. CARNES. Thank you very much, Mr. Chairman.

As always, it is a great pleasure for me to appear before this committee. On my immediate left I would like to present to you LeGree Daniels who is our Assistant Secretary for Civil Rights. To her left, Jim Thomas, who is, I am sure, familiar to you, our Inspector General, and to my right Tom Skelly, Director of the Budget Systems Division in my office.

Mr. Chairman, Ms. Daniels, Mr. Thomas and I each have statements which we would appreciate having included in the record.

Mr. NATCHER. They will all be included in the record.

IRS OFFSET

Mr. CARNES. I am going to dispense with opening statements then. If you will just give me one second, I would like to revisit a point that we brought up yesterday in our hearing on IRS offset. We are hoping to get $133,000,000 from the IRS offset in 1989, but the authority for us to do that expires this June 30. We need to have that authority extended by the end of this summer or we are not going to be able to initiate the 1989 offset.

A consequence of that will be that we will have to have additional appropriations to meet expenses in the student aid program. I mention it only because although it is included in a couple of pieces of legislation up here, it seems pretty stalled.

With that I think, Mr. Chairman, I have nothing more to add, and we would welcome your questions.

Mr. NATCHER. Thank you, Dr. Carnes. [The prepared statement of Mr. Carnes and attachments follow:)

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Bruce M. Carnes
Deputy Under Secretary for Planning, Budget and Evaluation

on

Departmental Management

Mr. Chairman and Members of the Committee:

I am pleased to appear before you to present our 1989 budget request for Departmental Management.

The Department of Education administers some 180 ma jor Federal education programs which total over $20 billion annually and which span virtually every level and area of education. Large formula grant programs, such as Chapters 1 and 2, Education for the Handicapped, Vocational Education, Impact Aid, and Drug-Free Schools and Communities, affect almost all our 17,000 local education agencies and 46 million elementary and secondary students. Student aid programs, including Pell Grants, Guaranteed Student Loans, WorkStudy and Graduate Fellowships impact on 6 million college students, over 8,000 postsecondary institutions, including proprietary schools, and nearly 13,000 commercial lending institutions. Almost 3 million adults are served under the Adult Education Act, and another one million adults who are disabled receive vocational rehabilitation. The Library Services and Construction Act over the years has leveraged support for most of our nation's public libraries. A variety of discretionary programs address such diverse areas as teacher training, research and development education statistics, magnet schools, bilingual education, school dropouts, homeless children and adults, international education, and higher education facilities contruction.

In addition to adminstering these programs, the Department is responsible for enforcing numerous civil rights laws affecting the recipients of Federal aid and for conducting audits and investigations.

The fiscal year 1989 costs associated with the Department's administrative responsibilities total $314.7 million, or about 1.5 percent of the Department's total budget request of $21.2 billion.

Overview

We are requesting $255.4 million for Program Administration, an increase of $15.0 million above the 1988 operating level; $41.3 million for the Office for Civil Rights, an increase of $965,000; and, $17.9 million for the Office of the Inspector General, an increase of $540,000 above the 1988 operating level.

Our request supports an employment level of 4,439 full-time equivalents (FTE), a reduction of 6 from our 1988 ceiling. In addition, 50 FTE will be funded by the Indian Education appropriation, bringing the total for the Department in 1989 to 4,489 FTE.

The FTB levels for each office remain constant with one exception: a decrease of 6 FTE in the Office of Management, reflecting the completion of the transfer of the Regional Office Facilities Engineering and Construction function to the Department of Health and Human Services.

The number and complexity of our programs have grown dramatically in recent years and appear likely to grow even more if new programs in H.R. 5 are funded. However, we do not believe we need additional funds and staff to administer programs already funded in 1988. During the past several years, we have been able to administer new programs such as Dropout Prevention, Drug-Free Schools and Communities Education, Magnet Schools, and Science and Mathematics, without additional resources, by setting priorities, managing effectively, and increasing the productivity of employees, particularly through increased use of automated data processing.

At this time, I will address only the Program Administration portion of our Departmental Management request. Separate testimony will be provided for the Office for Civil Rights and the Office of the Inspector General.

Program Administration

In 1989, over 57 percent of our Program Administration request of $255.4 million is budgeted for employee salaries and benefits, 24 percent for automated data processing expenses associated primarily with the student financial assistance programs and other contracts for Departmental services, and 10 percent for rent, communications, and utilities expenses. Other items, such as travel, supplies and equipment, account for the remaining 9 percent of the budget.

of our requested net increase of $15 million for 1989, approximately 10 percent reflects the combined full-year effect of the January 1988 pay raise, the proposed January 1989 2 percent pay raise, and the effects both pay raises have on the new Federal Employee Retirement System (FERS). FERS costs are estimated to increase by 2 percent in FY 1989 to $6.2 million.

Almost 40 percent of our requested increase--the $5.6 million proposed for later transmittal--is contingent upon enactment of proposed legislation for the National Student Loan Data System. The System is not needed for program management or research purposes, and is only justifiable if it can be used as a default prevention tool.

Our proposed legislative changes would make the Data System an effective means for curbing default and repayment abuses under the Federal student aid programs. The proposed changes will allow us to require

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