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Mr. BENJAMIN. Sure.

Mr. Pin. The specifics are shown on schedule C-5, office by office. [See page 1878.]

Mr. BENJAMIN. What we would still appreciate, also on the Office of the General Counsel, is the lapse rate projection, the lapse rate to date, as well as the expenditures for quarters in fiscal year 1978.

[The information appears on pages 1883-1902.]

OFFICE OF POLICY Mr. BENJAMIN. Page G-1 of justifications. Requesting $399,000 and 11 average positions which is $21,000 above the fiscal year 1979 allocation.

Please provide for the record how much is being used for nonpermanent positions. Also indicate again the lapse rate in 1978 and the lapse rate used in the projections, and provide the actual expenditures by quarter for fiscal year 1978.

[The information on lapse rate and quarterly expenditures appears on pages 1883-1902.] [The information on nonpermanent positions follows:)

OFFICE OF POLICY In fiscal year 1980 the Office of Policy will require $399,000 for personnel compensation. This amount includes $2,100 to be paid to an employee occupying a nonpermanent position.

OFFICE OF PROGRAM PLANNING Mr. BENJAMIN. Page H-1. Requesting $392,000 and 13 average positions, an $18,000 increase.

As for similar divisions, provide the lapse rate in 1978, the calculation used in the lapse rate for fiscal year 1980, and the expenditures for quarters in fiscal year 1978.

[The information referred to appears on pages 1883-1902.)

PROGRAM ANALYSIS DIVISION Mr. BENJAMIN. Page 1-1 of justifications. Requesting $5,019,000 and 153 average positions, an increase of $330,000. Describe the scope and nature of the work programs and justify the increase required.

Mr. HAVENS. Yes, sir, the $330,000 as in the previous items represents the routine increases related to annualization of pay, periodic step increases, grade promotions, increase in temporary and consulting services and other personnel compensation. In terms of the scope and nature of the work program, the Program Analysis Division is responsible within the General Accounting Office for certain functions assigned under title 7 and title 8 of the Congressional Budget Act of 1974.

In the case of title 7, we have responsibility for the development of evaluation methodology, demonstration and transfer of that methodology elsewhere in GAO, and to the Federal agencies.

In the case of title 8 of the Congressional Budget Act of 1974 we have responsibility for assisting both appropriations and authorizing committees in the budget and program information that they may need either for authorization or budget-making purposes.

We also have lead responsibility within the General Accounting Office for economic analysis work, for the analysis of the economic impact of programs.

The Program Analysis Division has responsibility for five of GAO's issue areas, evaluation methodology, congressional information requirements, those relate to title 7 and title 8 of the Congressional Budget Act. We also have responsibility for issue areas in regional and national economic problems, tax policy, alternative approaches to achieving Federal program objectives, and science policy.

Mr. BENJAMIN. How much of this work is congressionally initiated?

Mr. HAVENS. It varies from time to time. At the present time we are running about one third congressional. It has been up higher.

Mr. BENJAMIN. Do you project about the same for 1980?
Mr. HAVENS. I would expect that, yes, sir.

Mr. BENJAMIN. Would you also as you heard me ask the other divisions provide that information? Mr. HAVENS. We will. [The information referred to appears on pages 1883-1902.]

ENERGY AND MINERALS DIVISION Mr. BENJAMIN. Page J-1 of justifications. Requesting $5,663,000 and 183 average positions, an increase of $305,000 and 3 additional staff years.

Please be kind enough to advise us what you are doing in the energy field during the current year and your plans for fiscal year 1980. Can you also relate to us whether OTA is doing similar work, and if it is, is that being coordinated with GAO?

Mr. PEACH. First, let me say the increase is for the reasons that have been previously outlined, except for the fact that we do have a request for an additional 3 staff years so there are salaries included for those 3 additional staff years. Essentially we have responsibility for 2 of GAO's issue areas, the energy issue area and the materials issue area. Under the energy area, we are responsible for all of the GAO's audit and analysis work as it relates to the Department of Energy, the Nuclear Regulatory Commission, and the energy-related activities of the Department of Interior, particularly as they relate to the Federal leasing programs.

We also have a rather unique responsibility that was placed on GAO to do what are called energy verification audits of the books and records of private companies that furnish energy information to the Federal Government. We can go even where a contractual relationship is not involved there, look at the support as to both accuracy and adequacy behind the energy information which the Federal Government is receiving from private companies.

There are several legislative mandates that are involved in my area. For example, the Department of Energy Act, which created that department, specifically has a requirement for a continuous GAO monitoring and evaluation of the programs of that department, because of the significant increase and significant interest in energy problems over the last few years.

In the materials area, we provide overall leadership for all of our work on materials related issues, and we are responsible for reviewing the minerals and materials related programs of the Department of Interior.

You specifically asked a question regarding the work with OTA. Mr. Heller explained earlier the research notification system, but he also explained the fact that people are really what makes the system work. We have a requirement, as we begin to authorize or initiate any assignment, that we contact each of these agencies, because they are actively involved in energy and materials related work, and discuss with them the nature of our work and try to confirm and understand anything they are doing and make sure that we have no duplicative type activity underway.

We do not believe we have at this time. There are times where we do have work, where work does go on of an overlapping kind of a nature. I think a prime example occurred when the President submitted his national energy plan to the Congress, and from various committee sources each of those units was asked to provide some form of evaluation of the national energy plan. I think that they all did provide evaluations in that area, and I think the evaluations turned out to be very complementary and supportive of congressional deliberations and in an overall sense very useful, particularly in view of the nature and complexity of the plan that they were dealing with.

ENERGY WORK

Mr. BENJAMIN. Is any of your work related to that which is apparently being conducted by the Cost Accounting Standards Board relating to the cost accounting for the price of a gallon of gasoline?

Mr. PEACH. We don't have anything in our division specifically going on in that area. We have a number of projects looking at the whole process by which the Department of Energy is trying to determine the compliance of the energy companies with its pricing regulations.

Mr. BENJAMIN. Does that involve the cost accounting for a gallon of gasoline?

Mr. PEACH. No, you don't get down to that specific kind of question.

Mr. BENJAMIN. How would the Department of Energy make that determination then without knowing the cost accounting standard? What standard do you use?

Mr. PEACH. In terms of standards, what they have are rules and regulations that deal with the cost that can be passed through to the consumer by the companies starting from a certain base year.

Now just exactly the degree to which they get into the question of how different companies may account and make some decisions on the question of the cost of gasoline I can't tell you at this point exactly what kind of standards they may apply. There are standards and there are judgments being made, for example, as to exploration and production costs in the energy area, and there is a whole process of standards development going on in the area now in terms of how exploration and production costs are determined.

That I am very familiar with because we have been actively working on it.

ENERGY POLICY AND CONSERVATION ACT Mr. STAATS. We have had some responsibility on the question of how petroleum companies would report their costs under the Energy Policy and Conservation Act. The question came up as to whether or not existing accounting methods—there were two methods in use at that time, one was called the full costing system, and the other was the successful efforts-needed change.

The SEC was given the job in the statute of working out what the proper standards should be. We were asked to monitor for the Congress the cooperation between the SEC and what became the Department of Energy.

But the SEC decided to turn to the Financial Accounting Standards Board which I mentioned in our presentation this morning. They asked them to take on the responsibility for developing a standard which would be acceptable.

Our responsibility meant that we had to keep very closely in touch with the FASB and the SEC and DOE during this process to make sure everyone was getting the information they needed to develop this.

The FASB did develop a standard which was not acceptable to all the industry people and the SEC then had to take a separate look. The SEC then issued a ruling that both existing methods could continue to be used for 3 years and requiring some additional financial disclosures. After 3 years, they hope to agree on a new standard.

It is a very, very complex, very controversial issue. The smaller producers and explorers for petroleum preferred the full costing system because they could then spread their costs forward. It meant that they had, in their opinion, a much easier time of getting financing because all of the dry holes would not show up in one year so they would not come out with a net loss.

The larger companies favored the successful efforts approach. This set off the issue I described. We had to have one or two people full time over a period of 18 months, as I recall, to monitor this effort.

Mr. BENJAMIN. The problem is if I ever had to relate to a constituent that we don't know yet how to determine the price of gasoline, it would be most difficult for them to understand it.

Mr. Staats. Members in the accounting profession who have done a lot of auditing work of refiners say it is the most complicated pricing system that they have had any experience with because a refiner will change his mix from day-to-day almost, depending upon what his market is and what his inventories are, and how that mix gets changed affects the price of gasoline or kerosene or diesel, whatever product they are refining.

Mr. BENJAMIN. In your 1979 position requests that are enumerated on each one of these pages of justification, do they include or exclude the supplemental?

Mr. HELLER. They include the supplemental, yes, sir.

Mr. BENJAMIN. Is there somewhere where I am going to have the analysis by division as to where the positions went in your supplemental? You have 82, if I recall.

Mr. Pin. We can provide that to you, sir.
Mr. BENJAMIN. It may be apparent, but I have not seen it yet.
Mr. Pin. We have a schedule here which we will provide you.
Mr. BENJAMIN. Please provide that for the record.
[The information follows:]

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