Mr. MONк. The administrative costs stay in the general operating expenses appropriation. Mr. THOMAS. Again you split it two ways. Mr. MONK. Yes, that has always been split two ways. Part of it in readjustment benefits and part in the administrative expense appropriation. Mr. THOMAS. And you put this in your revolving fund, where you can commingle all your funds and your cash receipts, your payments and your interest charges, instead of going to the miscellaneous receipts in the Treasury; they are now going to this fund under the language you submitted? Mr. MONK. And expenses paid out from them. GRANTS TO REPUBLIC OF THE PHILIPPINES Mr. THOMAS. Grants to the Philippines shows a reduction of $500,000. That comes about from a lack of use of the funds by the hospital people in the Philippines? Mr. MONK. That is correct, sir. And if you remember, in our supplemental we asked that $500,000 be applied, so this is a holding even of 1961 and 1962. CONSTRUCTION OF HOSPITALS AND DOMICILIARY FACILITIES Mr. THOMAS. Now your construction program was the same as it was last year. Are we not getting a little out of hand in the construction program? Mr. Ashbridge, what is your unobligated balance at the end of fiscal year 1961, and what is your obligated balance where no construction has yet started at the end of 1961? Now those are two separated and distinct figures. How many dollars are you going to have on hand in June of this year that have not been obligated? How many dollars are you going to have on hand where the funds have been obligated but construction has not started? Those are two separate and distinct figures. Mr. ASHBRIDGE. Well, at the end of this current year, we will have $52.8 million of unobligated funds, but, as you will see by the end of next year, we are cutting that down to $42.8 million. There has been a gradual decrease in the amount of unobligated funds that we have been carrying over, and we will have the lowest amount of unobligated funds for many years. Now what was the second question, sir? Mr. THOMAS. At the end of the fiscal year, June 30, calendar year 1961, what is the amount of the funds that you will have obligated but where no work has been started? Mr. ASHBRIDGE. We will have obligated funds for the Washington Hospital toward the latter part of June, and the work on that will start Mr. THOMAS. If you use good judgment and cut out two-thirds of that gingerbread-now you have got at least $7 or $8 million more for that hospital than you can possibly spend wisely. We are going to depend on you and Dr. Middleton to not throw away a quarter out there. Do you understand? Mr. ASHBRIDGE. Yes, sir. That will be one item that we shall have obligated, because that will be obligated just about the end of the fiscal year, and the construction really will not get underway. Fort Harrison will also be obligated toward the end of this fiscal year. Mr. THOMAS. Well, can you add them up right quick? You have got a half dozen projects, big ones, where you have got the funds and you have had the funds for 1 or 2 years and you have them obligated. Just quick arithmetic, Mr. Ashbridge; you can straighten it out in the record. Mr. STARR. $120 million. That includes the $52 million unobligated balance. Mr. MONK. Not that high. If I understand the chairman's question correctly, it is how much money we would have obligated as of June 30, 1961, for which construction work had not started. Mr. THOMAS. That is right. Mr. MONк. I do not think there would be a large amount obligated for which some work had not been started. Mr. THOMAS. That would not miss it very far. That would not miss it far, Dr. Monk. And are you sure that figure, though, includes the $52 million that you were going to complete the year with, without any strings on it? Mr. STARR. Yes, sir. Mr. THOMAS. Are you sure about that? Mr. STARR. Yes, sir. Mr. MONK. But the only two big jobs on which work will not have started, will be actually Washington and Fort Harrison. Mr. ASHBRIDGE. Washington and Fort Harrison. Mr. THOMAS. How much is in those two? That is about $35 million? What about Wood, Wis.? Mr. MONK. We do not have the money yet for Wood, Wis., for construction. Mr. THOMAS. When you say Wisconsin, you mean Milwaukee? Mr. MONK. Just outside Milwaukee. I would say about $25 or $30 million would be an outside figure of the funds obligated where no part of the work had been started. Mr. THOMAS. You have some money out in California. Mr. MONK. We are building a hospital in California. Mr. THOMAS. That is right. Mr. MONK. We are also working in Nashville. Mr. THOMAS. What about your alteration program; have you any money out for it that you have not Mr. MONK. We are working on it. We have obligated the money. Mr. THOMAS. Did you say that it is obligated? Mr. MONK. Yes, sir. That is in the figure of the amount that we said would be obligated by the end of this year. Mr. THOMAS. When you go back, straighten out that figure the best you can. But you agree that you will have at the end of this fiscal year approximately $52 million unobligated? Mr. MONK. Yes, sir; we agree to that. (The information requested as to the amount of funds obligated as of June 30, 1961, for which no work has been started is as follows:) Location and brief description: Estimated construction contract award' (thousands) Dayton, Ohio: Modernization (Ph II), new boiler plant, new conn. corr. convert d.c. to a.c., etc_-_. Fort Harrison, Mont.: Modernization (Ph I), new clinical building, alterations to DH and K, replace 2 boilers, conn. corr., sewage plant, etc---- Kecoughtan, Va.: 200-bed intermediate hospital building (for long- Los Angeles, Calif.: New animal research laboratory- Total $1,665 3, 525. 2,300 330 240 15, 470 470 24, 000 These contracts will be awarded late in the fiscal year so that construction work will not have actually commenced by June 30, 1961. Mr. THOMAS. What are you going to do with $35 million more, then? Mr. MONK. Well, we have a place to put this unobligated balance, We are working on the projects to get them under contract. Mr. THOMAS. Why do you not use the $52 million? Mr. ASHBRIDGE. That, of course, has all been earmarked for various projects. Mr. MONK. We will have $52.8 million unobligated, for which we have projects on the boards now. And we will be in a position to let contracts a little later in the year. With the $75 million we are going to get plus the $52 million we will carry over, we expect to obligate next year $85 million, so that we will end up June 30, 1962, with $42.8 million. Mr. THOMAS. You can cut down over the course of a year $52 million? Mr. MONK. With the time it takes us to develop these projects and get them under contract, we cannot come out even on this appropriation at the end of each year. We need leadtime to develop the projects and we must hold funds for equipment change orders, supervision costs, and so forth. Mr. THOMAS. Keep talking now. That is the only thing you have said that adds up. BREAKDOWN OF UNOBLIGATED BALANCES Mr. ASHBRIDGE. Mr. Thomas, this is a breakdown of that $52 million if you would like to have it in the record. Mr. THOMAS. Yes, Mr. Ashbridge, read it into the record, if not mind. Mr. ASHBRIDGE. New hospitals, Washington, D.C., $1,844,000. Cleveland, Ohio, $4,377,000. Palo Alto, Calif., $271,000. Topeka, Kans., $180,000. Funds for other completed projects under the new hospital program, $125,000-a total of $11,526,000. On the replacement hospitals Mr. THOMAS. Wait a minute, now. This fund of $52 million is comprised of those projects that you have listed as being the funds that you will not obligate by the end of June 30 of this year; is that what I understood you to say? Mr. ASHBRIDGE. Yes, sir. This is money which will not be obligated as of the end of this current fiscal year. Mr. THOMAS. Yes, but it has been appropriated heretofore for specific projects, though, and you named them. Does that mean that you have got a carryover from those projects of that much? Mr. ASHBRIDGE. I am going to continue naming them. Those were the new hospitals, then we have a group of replacement hospitals, our modernization program and other improvements. Mr. MONK. Mr. Ashbridge, I think the chairman meant will we have a carryover from our estimate of costs for those projects. That is not necessarily so, as I understand it. For example, you named Cleveland as one of them. We will have costs for Cleveland in addition to those now obligated which we will have to meet. Mr. ASHBRIDGE. This will be the unobligated amount that we have left of the money available for Cleveland. Mr. THOMAS. That is what he said. Mr. ASHBRIDGE. After we award the Cleveland contract. We always have a certain amount in there for contingencies, for completion items, also for the supervision of the work while it is under construction, and that sort of thing. Mr. THOMAS. Well, put that list in the record, and add another column to it. Let the second column show what the full appropriated amount for each one of the projects was, and then the two columns will show the difference between the savings and the original estimate. That is understandable. Mr. MONK. But not all of that is savings, because we still expect to spend some of that money for supervision, for equipment and for change orders. Mr. ASHBRIDGE. These are contingencies and things that will come up later. (The matter referred to follows:) |