If we continue to operate-as I think we must, because it is a sound structure-by making grants in response to applications, with the receiving of grants, then we must have the management leadtime in which to write the necessary policy guidelines for our applicants. There are some who suggest that, if you don't pay attention to these things, then you have a much safer situation because there is no policy. But the question is whether the policy direction is going to be conscious or not; whether we are going to be able to clearly describe for the Congress what we are doing and why. I felt we needed this kind of a structure in order to bring that direction to the agency. I do have a more extensive statement about this which I would be glad to provide for the record, as well as some management improvements that I've tried to initiate since last fall. May I submit this for the record, Mr. Chairman? Senator DECONCINI. Please. [The information follows:] NATIONAL ENDOWMENT FOR THE HUMANITIES REORGANIZATION NEH has grown significantly since its founding in 1965. The annual budget has risen from $2.5 million in FY 1966 to a proposed level of $145.6 million in FY 1979. Although the budget and the program activity have increased dramatically over the years, the organizational structure has remained essentially unchanged since the earliest days of the Endowment. This organizational structure was responsive to the needs of the Endowment during its initial years of relatively few programs which were narrow in scope and directed toward small, select audiences. All program divisions and staff offices reported directly to the Chairman/Deputy Chairman. This structure is depicted in Chart #1. This structure proved outdated and unresponsive to the management needs generated by present-day programs which are much more comprehensive. The demands of this expanded program activity required more and more of management's time, and, as a result, the previous Chairman and a single Deputy were unable to devote sufficient time to the critical issues related to policy development and long range planning. These serious management problems and the findings of consultants indicated a need for increased administrative oversight in order to address more effectively the policy and planning issues and the concerns of the Congress, GAO and OMB. To meet these needs, the Chairman has reorganized the Endowment's administrative structure into three distinct but related areas: (1) Policy, Planning and Public Affairs; (2) Programs, and (3) Management. The new organization depicted in Chart #2 provides for effective executive control under three Deputy Chairmen. Each Deputy is responsible for providing policy and management leadership. MANAGEMENT IMPROVEMENTS INITIATED OR UNDER CONSIDERATION Several significant areas of management improvement practices have either been implemented or are currently underway. The first of these concerns pertain to proper fiscal controls. In prior years Endowment funds were appropriated on an "available until used basis." There was no requirement to obligate funds during the year in which they were appropriated because funds automatically carried forward to the succeeding year. Beginning in FY 1978, the Congress limited our appropriations to one year. Any funds not obligated during the year in which appropriated revert to the Treasury. This change has required the Endowment to introduce a "commitment accounting" system to ensure that available funds are obligated in a timely fashion. This system tracks the applications in process that are likely to be funded but have not yet been obligated and provides a basis for planning the orderly obligation of funds. Our procedures covering the processing of applications and the award and management of grants have undergone review in order to: As a result of this review, we have made or are considering changes in several areas: 1. 2. 3. Applications - A standard budget form has been adopted by three of the Endowment's divisions. This will accelerate the review of budget material in the divisions as well as the Grants Office. It also represents the first serious step towards achieving consistency among the divisions. Grant Awards A set of recommendations are under consideration to overhaul the procedures for processing grant award letters. If implemented, the new procedures should reduce both Grants Office and division work and result in more timely receipt of NEH awards. Payments Within the past two months further progress has been made in revising the Grants and Accounting Offices responsibilities in processing payments and simplifying the payment process. This will ensure a quicker response to grantee payment requests and a reduction of workload within the Endowment. In addition, the following management improvements are under consideration: 1. 2. Computerization of information to achieve greater Increased use of the Word Processing Unit to reduce 3. Further standardization of procedures for the 4. Major revision of the general grant provisions to |