Hardship post differential is paid to Foreign Service employees assigned to posts where extraordinarily difficult living conditions or excessive physical hardships prevail or at which notably unhealthy conditions exist. The increase for 1962 and 1963 is attributable to the opening of a new regional courier office in Africa in 1962. Overtime pay is estimated to be required at the regional finance center.

Computation of hardship post differential for 1963

Post allowances.-Post allowances are paid to employees at posts with a cost of living higher than in Washington, D.C.

Educational allowances.-The requested increase of $75,300 was estimated on the basis of the rise in educational allowance in the past of approximately 10 percent a year.

Quarters allowances are paid to American employees overseas leasing private quarters. The increase requested for 1963 consists of $10,300 for full year costs associated with the regional courier office established in 1962 and $161,400 related to the increased number of Foreign Service American personnel overseas. The increase of $16,000 in temporary lodging allowance is related entirely to the increased number of Foreign Service American personnel overseas.

83621 0-62—36

This estimate provides for the employer's share of contributions for the various types of personnel benefits provided to Federal employees by law. The increase of $2,300 represents the increased costs associated with withingrade promotions ($1,200) and the payment to the employees compensation fund ($1,100) required by law.

Mr. ROONEY. These justifications indicate that the request is in the amount $34,312,444, which would be an increase of $5,125,300 over the base figure.

Do you have a general statement with regard to this, Mr. Crockett? GENERAL STATEMENT OF ASSISTANT SECRETARY FOR ADMINISTRATION

Mr. CROCKETT. Yes, Mr. Chairman, I have a very brief statement I would like to make.

For the first time, the Bureau of Administration is presented in the budget as a composite area of the State Department. Previously, its requirements were presented in several parts but this year, for the first time, we are presenting the budget for administration as a single bureau.

This was accomplished during this past year and Mr. Victor Purse is the Executive Director of this Bureau responsible for the budget, personnel, and general Bureau management.

Before we go on, I would like to pay tribute to the colleagues I have here with me today; Henry Ford and Bill Trone on my right from OPR; Victor Purse and Jimmie Hoofnagle from the Executive Director's Office; Herman Pollack, Ernie Betts and Howard Chaille, Office of Personnel; Verne Lewis and Frank Meyer from Budget and Finance; Ralph Roberts from the Office of Management and, last but not least, Roy Little from my Office.

I think that no man can be more blessed than to have good, loyal, hard-working subordinates, and I certainly have been well blessed in this regard. Anything that we have done, the many little things we have done in the administrative area, have been done because of the hard work and loyalty of these men and their staffs.

We have a lot of problems in the Department, Mr. Chairman, as you and this committee have found out from time to time and we have

tried to look at some of these. We have made some changes but I would like to say we have barely scratched the surface. A year is not a very long time, it seems, in the operation of bureaucracy to bring about very many major changes and I must say we have not succeeded in solving the problems of rising costs, as this budget will reflect.

I believe the most important or significant concept that we have been able to get across in the Department of State for this budget year has been the concept of no increases in personnel budgeted in this S. & E. budget.

I realize that we have asked for a lot of money in addition to this, Mr. Chairman, but we have done it under the concept that it is better to have people well supported with the resources they need to do their jobs; rather than to ask for more and more people. We believe that there will be problems in connection with this approach but I hope that we can solve them.

In the Bureau of Administration alone, we have a net reduction of about 132 in our staff and I would like to say that no one made us do this but we did it because we believe we can get along with fewer people. I hope in the months to come that we can continue this effort of gradually reducing the staff.

I would like to talk just a moment about the increases. There are no decreases that I can point to on the domestic side. We have an increase of $462,000 for supplies and equipment and communications. Most of this justification is on the basis that we diverted the money that had been programed for this activity to take care of other functions that were required during this fiscal year.

On the Foreign Service side we are asking for a total of approximately $4.6 million. This includes $153,000 for the adjusted lapse rate, and $208,900 for the Bureau of Administration support costs for new posts. We have already deducted $10,800 from this amount for Pusan-the new post we are not going to open. For elevation of posts we are requesting $20,100. Again we have made a deduction in this amount.

Under administrative activities, we are asking for $3,493,200 and the major portion of this is in Foreign Service travel.

This includes funds for a new program, rest and recuperation, and for educational allowances, plus one other item of increased numbers of Foreign Service officers abroad.

The final thing on the Foreign Service side we are requesting, is an increase in communications of $666,400. This increase will improve our courier service, pay for increased telegraph costs, and give us replacement equipment for various kinds of reproduction equipment used in connection with communications abroad. It is my feeling that these funds are needed for the operation of the Department and my colleagues and I will do our best to answer any questions the committee would like to ask at this time.

INCREASE FOR SUPPLIES AND EQUIPMENT

Mr. ROONEY. What about this requested increase for supplies and equipment on page 331? There is not much detail in these justifications, is there?

Mr. CROCKETT. We have the backup information on that, Mr. Chairman, if you would like to have it.

Mr. ROONEY. Do you not think we ought to ask about it?

Mr. CROCKETT. Yes, sir; I will try to answer any questions you would like to ask.

Mr. FORD. Mr. Chairman, if I may speak to that just a moment, the increase of $58,500 for supplies and equipment shown on page 331 is limited to two items of general supplies.

First, office supplies, and that is pencils, expendable supplies, that are used day to day by everyone, in the amount of $35,700; and an increase of $22,800 for duplicating supplies. Those two items added together total $58,500.

Mr. ROONEY. How did you arrive at that figure?

Mr. FORD. The office supplies were arrived at based upon our use record during the past several years and the fact that we had to reduce our purchases of administrative office supplies during fiscal year 1961 to meet urgent demands. You will notice the reduction from 1961 to 1962 in total of this group goes from $489,000 to $396,000, in 1962. The increase is based upon maintaining a logical supply stock on hand so as to avoid delays incident to the pipeline delays in requisitionng and actually acquring them and having them delivered.

Mr. ROONEY. You have avoided my question: How did you arrive at the figure of $58,500?

Mr. FORD. I would have to speak to that individually.

First, that portion of it which applies to office supplies, we have a record of how much office supplies are used by a given number of people in the Department on a factor basis.

Mr. ROONEY. Is this a secret formula?

Mr. FORD. No, sir.

Mr. ROONEY. What is it?

Mr. CROCKETT. Mr. Chairman, we have a table that shows the use record of supplies and equipment purchased during the various years, which you might want to take a look at. That indicates that in these activities, supplies and materials, office supplies, and duplicating supplies, the reduction that was made in 1962 over the annual general average it is for these two items that we are asking this increasethese two levels go up to normal operating levels.

Mr. ROONEY. We shall insert this chart at this point in the record. (The chart follows:)

Supplies and materials—Central service obligation analysis 1957-63