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Additional pay costs pursuant to Public Law 87-793 and amounts requested, fiscal years 1963 and 1964-Continued

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1 Transfer.

Represents use of portion of 4-percent funds for which no specific action is required. 3 Represents use of loan service charges.

Increase in limitation on amount of premium income which may be used for administrative and operating expenses.

Consists of $6,256,000 supplemental appropriation and $10,872,834 transfers from available funds and increases in limitations.

EMPLOYEES' COMPENSATION FUND COSTS

Mr. GRANT. In addition, throughout the justifications you will see references to increases for employees' compensation fund costs. Public Law 86-767, which was approved on September 13, 1960, provides that each agency shall include in its budget each year the amount of funds necessary to reimburse the employees' compensation fund of the Department of Labor for the amounts paid out by that Department due to accidents and other benefits to department employees who are injured on duty. In the fiscal year 1964 this amounts to a total of $851,198 for the Department of Agriculture, of which $519,655 applies to the Forest Service, leaving a net of $331,543 in this bill, which is $282,080 above 1963.

Mr. ADDABBO. Is that reflected in the $16 million you spoke of before?

Mr. GRANT. No, it is in addition. The $16 million has to do with Pay Act costs. This is for costs of benefits paid employees who are injured in line of duty.

Mr. WHITTEN. I can understand the Labor Department not wanting to carry in its own appropriations a request for money which they are actually paying to employees of some other department. Is that the background of it?

Mr. GRANT. Yes. A revolving fund was established back in 1960 under this statute, and the Labor Department makes the payments, and then it, in effect, at the end of the year sends the agencies a bill, which we are required to put in our budget. And then when the appropriations are made, reimbursements are made to that fund.

SAVINGS OF AUTOMATIC DATA PROCESSING (MODE)

One other overall item I want to mention is the matter of reductions throughout the bill for savings due to the installation of a centralized payroll and personnel system, commonly referred to as MODE. There are reductions totaling $1,354,200. These reductions appear in a number of places in the justifications.

There is in the preface of the explanatory notes a summary of all of these overall items.

Mr. WHITTEN. We would be glad to have you include that summary. (The summary follows:)

REDUCTIONS IN ESTIMATES DUE TO CENTRALIZED DATA PROCESSINg of PERSONNEL AND PAYROLL DATA (MODE)

The budget estimates for 1964 reflect reductions, totaling $1,354,200 representing estimated savings due to the installation of a centralized data processing operation (MODE) for personnel and payroll data.

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During fiscal year 1963, the Department began to centralize most of the operations for the preparation of payrolls and the processing of personnel data under an automatic data-processing system referred to as "MODE-Management of Objectives with Dollars through Employees.' The system, centralized in one office and using a Department-owned computer, will provide, during fiscal year 1964 and subsequent years, a comprehensive system of payrolling, personnel recordkeeping and reporting and related information for financial management. It is anticipated that these phases of the system will be installed by the start of fiscal year 1964.

Savings during fiscal year 1964 are expected to result from decreased administrative costs in several appropriations and funds. In those cases where savings have been made in appropriated funds, reductions have been made in the 1964 estimates and are separately identified in these justifications.

The following tabulation identifies savings by Agency reflected in the 1964 budget (amounts shown are reductions in appropriated funds unless otherwise identified):

Extension Service...

Agricultural Research Service...

Farmer Cooperative Service..

Soil Conservation Service..

Economic Research Service
Statistical Reporting Service..
Agricultural Marketing Service..

Foreign Agricultural Service..

Commodity Exchange Authority.

Agricultural Stabilization and Conservation Service..

Federal Crop Insurance Corporation.

Rural Electrification Administration_

Farmers Home Administration_..

Office of the General Counsel..

Office of Information____

National Agricultural Library.

Total.

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1 Includes $81,300 of reductions in obligations under permanent appropriations, trust and other funds.

Mr. WHITTEN. In that connection, Mr. Pope and I went to the Department of Agriculture's Commodity Office in New Orleans and saw this data processing machine. It was a complex and complicated machine which did many things. Have you seen that machine?

Mr. GRANT. No, sir, I have not seen it. I have read about it. Mr. WHITTEN. It is tremendous. If you have a description of what this particular equipment will do, I think it would be of interest to the committee and to readers of these hearings.

Mr. GRANT. We will be glad to put such a statement in the record. (The statement referred to follows:)

The Department Computer Center in New Orleans is primarily concerned with handling cotton loan and inventory programs for ASCS. The computer system was acquired to assist primarily in this program. However, as time on the equipment is available, additional applications for other divisions and offices of ASCS and the Department are being processed. Following is a brief description of the major computer activities in the New Orleans Office.

COTTON PRICE SUPPORT LOAN PROGRAM

The computer performs the following operations in conjunction with the program:

1. Determines that each bale of cotton for which a loan application is made meets bulletin requirements as to minimum and maximum weight.

2. Ascertains from location and description data that the correct loan rate for each bale has been used, that extensions have been properly made, that the sum of the loans on each bale equals the face amount of the note and the face amount of all notes corresponds to the total of the lending agencies letter of transmittal. Loans which do not meet these criteria are rejected by the computer and returned to the lending agencies for correction.

3. Within the program upper and lower time limits proves the validity of the storage begin date shown on the notes for each bale of cotton.

4. For loan cotton reconcentrated computes the charges due for warehouse services and transportation and prepares necessary accounting documents to debit producer's loan account.

5. Maintains loan inventory accounts by warehouse.

6. Processes loan redemptions producing the required accounting document, corrects inventory records, and prepares collection letters.

7. Processes the redemption and/or exchanges of certificates of interest with appropriate accounting document.

8. At program maturity, computes storage charges due and prepares the accounting documents necessary to transfer the inventory from loan status to acquired status.

ACQUIRED COTTON INVENTORY

In connection with the maintenance of acquired cotton inventory, the computer performs the following functions:

1. Maintains inventory records by grade and staple by warehouse by crop year. 2. From the inventory records prepares the catalog of cotton offered for sale, updating as required.

3. Adjusts the inventory for bales removed through claims, corrections or reconcentration.

4. During periods of cotton sales evaluates offers to buy, determines which offers are acceptable under price criteria and awarding to successful bidders prorating the available stock when it is insufficient to satisfy all acceptable offers. 5. Prepares the invoice drafts with supporting documents and necessary accounting documents.

6. Following the sale audits the reclassed and reweight reports on the cotton sold and determines the amount due from or to CCC as a result of such final settlement charges.

7. Audits, updates and adjusts various subsidiary account records, preparing accounting registers of the documents to substantiate such actions. (This is a computer function which applies to both acquired and loan inventory.)

CONSERVATION RESERVE PROGRAM

1. In connection with the Conservation Reserve Program, maintains a master file of active contracts issued by ASCS county offices, deleting, revising and modifying as contract amendments are received.

2. Prepares State, county and national reports on annual CRP payments and

acreage.

3. Balances sight drafts issued by ASCS county offices under the conservation reserve program with paid drafts from the Federal Reserve Banks. Prepares county, State and national reports on CRP practice payments.

AGRICULTURAL CONSERVATION PROGRAM

Prepares statistical reports on practice payments made under the agricultural conservation program by State, county and practice code.

MILK MARKETING

1. Audits computations on source documents and makes special calculations relative to specific gravity, specific volumes, butter fats, and other milk marketing quantity and quality statistics.

2. Prepares monthly reports, fiscal reports and calendar reports of the quantity, quality and price of milk under such audits.

3. Prepares a milk marketing producers' report in table form comparing previous and current year and month for various types of milk and milk products.

SOIL CONSERVATION

1. Produces quarterly, semiannual and annual statistical summaries by State, showing time and dollar value.

2. Produces quarterly, semiannual and annual statistical summaries for each State, showing progress of various projects.

3. Produces quarterly and semiannual statistical summaries for the 10 States in the Great Plains area showing progress of different projects.

4. Produces various statistical reports for comparison with the national inventory of conservation needs.

MODE

The New Orleans office is working with Department personnel in the adaptation of the MODE program to the New Orleans computer equipment. This program involves the integration of three areas of information; accounting, payroll, and personnel, on a Department-wide basis. The New Orleans office is working on three parts of the program. These are payroll automation, personnel statistics, and financial analysis of payroll and related costs.

MISCELLANEOUS

1. Time has been made available on the New Orleans computer for the southern region of the Forest Service for certain scientific and mathematical programs.

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