are in the Insurance Corporation. No increase is requested in the number of positions in the Office of Examinations and Supervision but funds will be needed to fill existing positions on a full-year basis, since it is estimated that total examination time in fiscal 1967 will increase 26 man-years over the current fiscal year. At this point, I should like to explain why we are not asking for an increase in the number of positions for the Office of Examinations and Supervision. The Board has been working for several years on ways and means to streamline our examination procedure toward the end that we focus our examiner's attention on matters of importance and consequence, rather than on time-consuming details of lesser importance. We have made considerable progress in improving the techniques of examining, reducing routine procedures, and, in general, speeding up the examination process. That, together with greater utilization of outside auditors or the use of an internal audit system by associations, has made it possible for the Office of Examinations and Supervision to examine these institutions with the present staff, even though there has been a concurrent growth in the assets of the institutions and in the complexity of operations. JOINT EXAMINATION PROGRAM Senator ELLENDER. To what extent do you cooperate with State examining boards to provide for an examination of associations that are organized under State laws? Mr. HORNE. They are given every opportunity. Senator ELLENDER. Do you offer them figures and reports? If I might be a little bit facetious, you have an old saying in Washington on the radio and television, "Don't make a move without calling Smith." We don't make a move in a State without consulting the State supervisor first. Senator ELLENDER. Then they know in advance that you are coming. Mr. HORNE. That is right. Senator ELLENDER. You do not sneak up on them? Mr. HORNE. That is right, sir. Senator ELLENDER. Very well. INCREASE IN FUNDS Mr. HORNE. The budget estimate for fiscal 1967 provides in the aggregate for an increase in funds over the current fiscal year of $1,085,000. Of the increase, $450,000 is in the Board and Staff Offices, $589,000 is in the Office of Examinations and Supervisions, and $46,000 is in the Federal Savings and Loan Insurance Corporation. Percentagewise, there is an overall increase in positions of 2 percent, and in funds of 6.4 percent. Let me emphasize that, of the increase requested of $1,085,000, only $164,000 is required for the 26 new positions. Of the remainder, $365,000 is needed to pay for statutory within-grade increases and for increased pay costs authorized by Public Law 89-301. The second highest amount, of $305,000, is needed to fill current year posi tions on a full-year basis. Reduction in the limitations requested for fiscal year 1966 prevented the Board from filling certain of the positions on a full-time basis in the current year. Also, $38,000 is requested to cover normal overtime compensation required in the Board's day-to-day operations. Finally, $213,000 represents an increase in contractual services, supplies, and equipment. The major portion of this increase is required for additional travel expenses of $104,000 anticipated, largely in connection with the increase of 26 man-years in examining savings and loans institutions. The remaining portion is needed to pay for space and utilities, support services, and supplies. PERSONNEL CHARTS I thought it might be helpful to show the committee, by the use of two charts that we have here today, the rather conservative attitude of the Board in personnel increases over the past several years. As you may note, the total overall increase since fiscal year 1963 is almost negligible. That is indicated in this chart [indicating]. Senator ELLENDER. We can put that in the record. Without objection, this chart will be put in the record. Mr. HORNE. Fine, sir. (The chart follows:) AUTHORIZED PERSONNEL IN PRIOR FISCAL YEARS Senator ELLENDER. Will you read the figures for the record? In fiscal 1963, the total employees authorized by Congress was 1,320. In fiscal 1964, before reorganization, it was 1,366, which was reduced to 1,362 after the reorganization. This was an internal reorganization based on the Booz & Allen report, with which I am sure you gentlemen are familiar. In fiscal 1965, Congress authorized 1,297 positions, and, in 1966, authorized 1,300. We are asking in fiscal 1967 only that which we requested in 1966, which would be a total of 1,326 positions. Senator MAGNUSON. Please proceed. Mr. HORNE. Further, I believe that these charts show that, while the overall personnel ceiling is about the same, we have shifted our work force within the agency, particularly within that area designated as supporting staff services. INTERDEPENDENCE OF BOARD FUNCTIONS This, Mr. Chairman, invites our attention to the functional chart, where we list herein several different functions that are carried on in the different offices within the agency which support the main part of the agency; that is, in one of its most important functions, examination and supervision. [Indicating the chart.] I felt, frankly, that in my past appearances before this committee I had failed to emphasize the importance of this point. As problems have arisen and conditions have changed, it has become increasingly important-which I will read, if I may, in a minute or two-for us to have adequately staffed, strongly supported operations within the agency, in order to give the support to the examination and supervision which is necessary. The functional chart which we have today graphically illustrates the interdependence of the operational offices carrying out the Board's statutory responsibilities and the supporting staff services. As the Board is now organized, increases in activities in any of these operational offices create demands for corresponding increases in the furnishing of staff services. As the problems become more numerous and complex the need for support by staff offices and divisions increases. Our current emphasis is on building up our supporting staff services, so that such services will be available to meet the increased activities of our operational offices. The requested increases are explained and our reasons therefor are set out in detail in our submission. Senator ELLENDER. Without objection, the functional chart will be put in the record at this point. Mr. HORNE. Thank you. (The chart follows:) |