Pages xiv and 226 Recommendation: A policy of "break-even" should be adopted as the revolving fund profit objective. Operating policy would conform with the policy expressed in the annual business-type budget enacted by Congress through adjustment of rates, prices and surcharges to approximately match revenues with costs of operations on an annual basis. Response: This recommendation is not clear. On the one hand, it seems to imply that we do not have a "break-even" policy as the revolving fund objective while, at the same time, it appears to acknowledge that our annual business-type budgets have consistently been prepared on a break-even basis. Perhaps the recommendation is directed toward the fact that we have not been 100% effective in achieving that objective on a year-to-year basis. If so, it is an unrealistic recommendation. There are too many variables which must be estimated in advance to permit such precision. Nevertheless, over the existence of the revolving fund, we have managed to keep very close to meeting our "break-even" objective. In fact, the $58.5 million mentioned by the contractor in the lead-in to this recommendation represents a 25-year accumulation which is only 1.2 percent over the "break-even" objective. We intend to continue with a "break-even" objective, but it is doubtful that we will be able to improve on the 1.2 percent in view of the multitude of variables which must be estimated in advance. On the other hand, the contractor may be recommending that the GPO plan for losses each year until such time as the retained earnings have been reduced to zero. If so, it would also be an unrealistic recommendation. The operations of the GPO have grown steadily over the years and, as a result, increased funds have been required to keep our operations and financing in balance. In fact, our need for additional working capital has required us to request (and receive) appropriations in excess of our retained earnings. It would seem to be somewhat foolish to simultaneously plan for operating losses and request working capital appropriations. Congress has been informed of the use of Retained Earnings to finance our continuing operations. We have always put the Congress on notice of our capital needs and acquisitions. These are set forth in the business-type budget submitted annually and the Joint Committee on Printing approves each capital acquisition on an item-by-item basis. The basis for establishing the price at which publications are offered for sale to the public should be revised to reflect the change in costs to be recovered from sales revenues. The revised basis should provide that the price be established based on: Expenses incurred in connection with general sales of publications. Other costs not funded by the revolving fund, such as depreciation and interest, if determined applicable for sales to the public, or a fixed percentage as determined appropriate. The provision pertaining to basing the price on the "cost as determined by the Public Printer plus 50 percent" and the discount allowable for certain sales would be superseded by the revised basis for pricing documents. Response: This recommendation implies that Public Law 95-94 changed the basis for determining the costs to be recovered through the sales prices of publications and also revised the provisions of 44 U.S.C. 1708 regarding the method of establishing prices. This is not so. The costs to be recovered include and have previously included all program costs. The method of financing does not have any bearing on what is or is not a cost. Nor does the Public Law revise the method of pricing. Consequently, the recommendation is misdirected. Page xiv and 227 Recommendation: The accrual basis of accounting should be adopted for all appropriations as prescribed by 31 U.S.C. 66 a(c) for executive agencies. Response: The lead-in to this recommendation implies that the appropriation accounting for the Congressional Printing and Binding and the Printing and Binding appropriations does not provide sufficient administrative control and has limited usefulness in budget estimating. This is not so. Appropriation accounting is custodial accounting as required by the Congress and approved by the GAO. The appropriations are single annual appropriations and must be accounted for on a yearly basis. The accounting treatment for them does facilitate reporting for administrative control and does provide information necessary to prepare budget estimates. GPO also has financial accounting on the accrual basis. It is appropriate for GPO to maintain both types of accounting methodology to provide, (1) proper control of appropriated funds and (2) financial results of program activities. These methods have provided an effective system for over 20 years in serving the needs of the Congress, OMB, Treasury, and GPO. 35-533 O 79 5 (Pt. 2) Pages xiv and 226 Recommendation: A policy of "break-even" should be adopted as the revolving fund profit objective. Operating policy would conform with the policy expressed in the annual business-type budget enacted by Congress through adjustment of rates, prices and surcharges to approximately match revenues with costs of operations on an annual basis. Response: This recommendation is not clear. On the one hand, it seems to imply that we do not have a "break-even" policy as the revolving fund objective while, at the same time, it appears to acknowledge that our annual business-type budgets have consistently been prepared on a break-even basis. Perhaps the recommendation is directed toward the fact that we have not been 100% effective in achieving that objective on a year-to-year basis. If so, it is an unrealistic recommendation. There are too many variables which must be estimated in advance to permit such precision. Nevertheless, over the existence of the revolving fund, we have managed to keep very close to meeting our "break-even" objective. In fact, the $58.5 million mentioned by the contractor in the lead-in to this recommendation represents a 25-year accumulation which is only 1.2 percent over the "break-even" objective. We intend to continue with a "break-even" objective, but it is doubtful that we will be able to improve on the 1.2 percent in view of the multitude of variables which must be estimated in advance. On the other hand, the contractor may be recommending that the GPO plan for losses each year until such time as the retained earnings have been reduced to zero. If so, it would also be an unrealistic recommendation. The operations of the GPO have grown steadily over the years and, as a result, increased funds have been required to keep our operations and financing in balance. In fact, our need for additional working capital has required us to request (and receive) appropriations in excess of our retained earnings. It would seem to be somewhat foolish to simultaneously plan for operating losses and request working capital appropriations. Congress has been informed of the use of Retained Earnings to finance our continuing operations. We have always put the Congress on notice of our capital needs and acquisitions. These are set forth in the business-type budget submitted annually and the Joint Committee on Printing approves each capital acquisition on an item-by-item basis. The basis for establishing the price at which publications are offered for sale to the public should be revised to reflect the change in costs to be recovered from sales revenues. The revised basis should provide that the price be established based on: Expenses incurred in connection with general sales of publications. Other costs not funded by the revolving fund, such as depreciation and interest, if determined applicable for sales to the public, or a fixed percentage as determined appropriate. The provision pertaining to basing the price on the "cost as determined by the Public Printer plus 50 percent" and the discount allowable for certain sales would be superseded by the revised basis for pricing documents. Response: This recommendation implies that Public Law 95-94 changed the basis for determining the costs to be recovered through the sales prices of publications and also revised the provisions of 44 U.S.C. 1708 regarding the method of establishing prices. This is not so. The costs to be recovered include and have previously included all program costs. The method of financing does not have any bearing on what is or is not a cost. Nor does the Public Law revise the method of pricing. Consequently, the recommendation is misdirected. Page xiv and 227 Recommendation: The accrual basis of accounting should be adopted for all appropriations as prescribed by 31 U.S.C. 66 a(c) for executive agencies. Response: The lead-in to this recommendation implies that the appropriation accounting for the Congressional Printing and Binding and the Printing and Binding appropriations does not provide sufficient administrative control and has limited usefulness in budget estimating. This is not so. Appropriation accounting is custodial accounting as required by the Congress and approved by the GAO. The appropriations are single annual appropriations and must be accounted for on a yearly basis. The accounting treatment for them does facilitate reporting for administrative control and does provide information necessary to prepare budget estimates. GPO also has financial accounting on the accrual basis. It is appropriate for GPO to maintain both types of accounting methodology to provide, (1) proper control of appropriated funds and (2) financial results of program activities. These methods have provided an effective system for over 20 years in serving the needs of the Congress, OMB, Treasury, and GPO. 35-533 795 (Pt. 2) In addition to further hardware acquisition, the Data Systems Service should expand the staff of the Systems Analysis and Programing Division; training programs should be expanded to reflect increases in staff. Response: Although the estimated workload exceeds available resources, no increase in Systems Analysis and Programing Division staff is planned. Increased productivity of divisional personnel is expected through the use of various techniques and tools being implemented. Other techniques are being investigated including the off-loading of some work to the General Services Administration. If increased productivity is not sufficient to handle the anticipated increased workload, additional personnel will be considered. We agree that an expansion of the training program may, be necessary, not only for an expanded staff, but to train existing personnel in the new techniques that are adopted. Pages xvi and 286 Recommendation: The use of distributed processing must be coordinated with an overall GPO data automation plan developed under the auspices of the ADS Steering Committee. Response: Much of the recommended coordination of systems design is already being performed on a day-to-day basis at the operating level. Consolidating this into one document and evaluating it to receive greater visibility by top management may be desirable but carries a rather low priority. Pages xvi and 287 Recommendation: A two-step approach is recommended to develop the planning and scheduling applications. First, these modules may be independently developed under the coordination of the ADS Steering Committee and the data base administrator. Second, once operational, these modules should be linked to an operational OMIS. |