I do want to say, Mr. Chairman, Mr. Monagan and I participated as members of the Education Committee of the U.S. delegation. The circular that was handed out at that time bore both the names of Mr. Monagan and myself as members of the Committee in representing our country at that conference. Chairman MORGAN. Mr. Broomfield. Chairman MORGAN. Mr. Whalley. Mr. WHALLEY. No questions, Mr. Chairman. Mr. HAMILTON. No questions, Mr. Chairman. Mr. McCLORY. Thank you, Mr. Chairman, and members of the committee. Chairman MORGAN. The next witness is the Honorable Jack Vaughn, Director of the Peace Corps. Mr. Vaughn, I thought before we finished with these hearings we should have a more detailed presentation of the financial side of the Peace Corps operation for the next fiscal year in the record. We had 2 days of hearings last week and we spent a considerable amount of time upon the Exchange Peace Corps and did not get down to the basic financial data. Today I have asked you to return and see if we couldn't get a detailed presentation of the appropriation request. Do you have that in front of you, sir? STATEMENT OF HON. JACK VAUGHN, DIRECTOR, PEACE CORPS Mr. VAUGHN. I do, sir. Chairman MORGAN. You may proceed. Mr. VAUGHN. Mr. Chairman, with your permission I would like to submit my prepared statement to be incorporated in the record in its entirety and then give an oral summation of the statement. Chairman MORGAN. Certainly, Mr. Vaughn. (The statement follows:) STATEMENT OF HON. JACK VAUGHN, DIRECTOR, PEACE CORPS Mr. Chairman, I am pleased to again appear before your Committee. My statement today will deal with several aspects of our program and with the financing of Peace Corps operations. As you know, for fiscal year 1966, the Peace Corps was authorized a total of $115.0 million. Our appropriation for the year was $114.1 million. As of 30 June 1966, our estimated obligations totalled $113.1 million or $1.0 million less than appropriated. For comparative purposes, I have a chart which sets forth each authorization, appropriation and 30 June obligations since FY 1962. I will submit this for the record as Attachment A to my statement. Our original budget request for Fiscal Year 1967, as submitted to the Congress in January 1966, totalled $110.5 million. We have subsequently submitted an amendment which proposed: (1) a reduction of $450,000 in research funds from $1,400,000 originally requested to $950,000; and (2) an addition of $2,100,000 for the proposed Partnership Exchange Program. Therefore the requested authorization before you now for Fiscal Year 1967 totals $112,150,000. This is a net increase THE TINIVERSITY OF MICHIGAN FIRRARILŜ of $1,650,000 over the original submission of last January, but is $2,850,000 less than the amount authorized for FY 1966. There are four aspects of our program which I have touched on in our hearings last week but which I feel warrant my further discussion today. I will briefly discuss each of these and then describe their over-all financial implications. The first is our research program, the second is our recruitment of volunteers, the third is our training of volunteers, and the fourth is our volunteer and trainee strength for this program year. 1. RESEARCH Of the $950,000 budgeted for Peace Corps research in FY 67, roughly half will be needed to continue projects already underway and the rest will be used to finance new research. While this work will cost less than one per cent of our total budget, it is of tremendous importance to the future of the Peace Corps. Our major effort will consist of studies of ten different overseas programs to determine what we are actually accomplishing in each and how we can be more effective in each. We feel the time has come when both Congress and the American public should have the independent appraisals of Peace Corps accomplishment which our contract research can give. Such research will not only tell you whether you're getting your money's worth out of the Peace Corps, it will help us avoid wasting our limited supply of Volunteers on projects of dubious or marginal effectiveness. Furthermore, such practical research is indispensa ble to those continuing efforts to improve without which any organization is doomed to stagnation and decay. Thus far, the only research completed of this sort concerns our rural community development programs in Latin America. From it we've learned that villages in Peru with Volunteers progress 2.9 times more rapidly than villages without Volunteers. We've also learned that 90 per cent of the Colombian adults in villages where Volunteers were stationed felt that the Volunteers helped their communities. We've learned that over 80 per cent of Colombian children interviewed in these villages wanted to gow up to be like Peace Corps Volunteers. At the same time, we got information from this research which has enabled us to improve our language training and Volunteer selection techniques in regard to rural community development in Latin America. Preliminary results from two other such projects still in progress have helped us make much better use of our Volunteers in the Colombia Educational Television project and suggest that our Malawi tuberculosis control program is making a real medical breakthrough. It appears that our generalist Volunteers, with 12 weeks technical training and with professional support in the field, are succeeding in a program of home diagnosis and treatment of a serious disease. I'm sure you understand the implications of this for countries that are as short on hospitals and highly-trained medical personnel as are those in the underdeveloped world. As for Peace Corps training, our research quickly discovered that next to the need for more language training which has been largely corrected, the main improvement needed was more realistic and practical training. In the beginning, a training program for Peace Corps teachers going to Ethiopia, for example, would be strong on Ethiopia's history, geography, economy and on educational theory. It would be weak in giving the Volunteers a real feeling for the problems they would actually encounter in the Ethiopian classroom and for what they could do to deal effectively with those problems. Our research has concentrated on developing materials and techniques to fill this gap and has produced case studies of typical Volunteer problems in typical kinds of Peace Corps work-and techniques for really involving the trainees in those problems. We think a university has just as much to gain from this kind of research as we do, and thus we ask them to share the costs on a 50-50 basis. Four universities have responded, and we plan to ask three more during the coming year. In the realm of selection, our research has saved the Peace Corps over $350,000 by showing us that certain steps in the selection process could be eliminated because they weren't really helping us. In 1967 we plan to continue a research project designed to make one step in the present selection process-the Civil Service background check-more effective. Our main selection research for 1967 will be an exhaustive study of the Volunteers who don't make it. While I feel our record has been good in this area, I want to improve it. For these people not only cost us money, but, while they're still around, they are a burden to our training and overseas staffs and to their fellow Volunteers whose efforts can be spoiled by the guy who is not pulling his weight. As you can see our research program is devoted to getting answers we need. 2. RECRUITMENT Our recruitment costs for FY 66 have amounted to $227 per trainee, which is a slight increase over our 1965 cost of $214 per trainee. I should emphasize however that only a small portion of this cost is for advertising. Thus this year we paid $85,500 to the Advertising Council for the actual cost of their materials compared with $81,000 in FY 65. Young & Rubicam who have been assigned our account contribute their personnel and time free of charge. And for this $85,500 expenditure we get an estimated $25 million dollars worth of coverage contributed by newspapers, magazines, and television and radio stations around the country. The major portion of our recruitment costs relate to our active recruitment on college campuses. We utilize recently returned Peace Corps Volunteers on a temporary basis. They are able to give first-hand information about the Peace Corps, and they do a fine job. We have found that in order to get the best people you have to go out and talk to them face to face. And what is that we are doing. I have had prepared, and will submit for the record as Attachment B to my statement, a historical review of the numbers of applications, invitations and acceptances from program year 1962 to the present. As indicated there, we expect to have 10,200 acceptances this program year. We have not changed our recruitment objective of 10,100 for Program Year 1967. But our current experience plus the fact that Office of Education statistics estimate a slight increase in college graduates in 1967 indicates that our 1967 potential may be somewhat understated. 3. TRAINING In the last few months we have taken significant steps towards achieving further realism in training and, in turn, improving the quality of training received by the Volunteer. Among these are: a. Augmentation of training instructor staffs by increasing utilization of outstanding returned Volunteers. b. On a selective basis, increases in the duration of training programs, including field and in-country training, beyond previous plans. c. Assurance that training project directors are fully aware of current problems by affording them an opportunity for an on-site host country review immediately prior to the start of training. These actions in combination have increased the costs of our regular training from our previous estimate of $2,612 per trainee to approximately $2,900 per trainee. Similar increases were comparably experienced in the Advance Training Program and in our direct training activities. I am certain that this relatively small increase will pay off in Volunteer preparation and effectiveness. 4. TRAINEE AND VOLUNTEER STRENGTH Last year at this time we proposed to bring a total of 10,500 new trainees into the Peace Corps during Program Year 1966. This winter we revised that estimate down to 9,200. But by late spring it was evident that, particularly in light of the response to our Trust Territory program, we would do much better. Our present estimate is 10,200, and we have already received 10,164 acceptances. The immediate impact of this 10,200 figure is to raise our end of Program Year strength estimate to 14,800. This increase, of course, carries forward into Program Year 1967 with a resultant estimated strength of 16,000 as compared to our prior estimate of 15,350. Nevertheless, the rate of growth of the Peace Corps during Program Year 1967 will be the smallest in its history-8%. (Comparatively, it was 15% in THE JINIVERSITY OF MICHICAN FIRRARIES Program Year 1966, 23% in Program Year 1965, and 58% in Program Year 1967.) I will submit for the record as Attachments C, D and E a detailed picture of Peace Corps Volunteer and Trainee strength, including geographic area assignments and monthly projections. 5. FINANCIAL IMPLICATIONS Our previous Congressional submission, based on the smaller (9,200) recruitment program and without the required changes in training, totalled $107.7 million and estimated an unobligated balance of $6.4 million for Fiscal Year 1966. Our current estimate totals $113.1 million with an unobligated balance of $1.0 million. The difference between the two estimates is $5.3 million and is the net resultant of: Increases: Pretraining-Background investigations and health examinations for Millions 1,000 additional trainees__ Training-1,000 additional trainees at $2,900– 9,200 trainees increased costs averaging approximately $300- $0.4 2.9 2.8 .2 I will submit for the record as attachment F a detailed itemized accounting of the above summarization. I think it is important to bring into focus our fiscal year 1967 fund requests in the light of our 1966 experience. We have reviewed this situation carefully and have tentatively arrived at a series of actions which, although not completely desirable, will adjust our financial requirement to within approximately $1.2 million of our request. These are summarized as follows: 1966 Peace Corps program. 1967 Peace Corps program (not including the partnership exchange Difference Impact of larger 1966 program carried into fiscal year 1967 Total difference__ Millions $113. 100 10.050 3.050 3. 021 6. 071 1. Training input of 10,100 or 100 less than 1966. 2. Elimination of full administrative contracts overseas for 200 -.300 3. Elimination of forward funding into fall training programs of -1.000 -.700 Subtotal - 2.000 Program differences in 1967: Planned cost deductions in 1967: 1. Regular training unit costs from $2,900 to $2,750 for 7,700 trainees 2. Advance training program unit cost for phase I from $2,722 to $2,250 for 900 trainees Millions $1. 155 4. Living allowances for volunteers overseas an average reduction of $100 for the year (10,283 man-years). 3. Advance training program unit cost for phase III from $1,187 to 1,000 for 567 trainees._ . 106 5. Miscellaneous supporting requirements, man-year costs from $309 to $291_ Subtotal_ Total of program differences and planned cost reductions_ Difference requiring further adjustments and/or reductions_ . 425 1.028 190 -2.904 - 4. 904 1. 167 I will submit for the record as Attachment G an itemized reconciliation of the FY 1967 funding requests and requirements. In short, after consideration of the impact of our increased strength and after several program and cost adjustments, we remain faced with a problem in the order of slightly more than 1% of the funds requested for our regular program. I plan to examine further all administrative expenses included in our request, our recruiting and selection costs, travel expenses and any or all other items wherein economics may yet be possible. In no way do I intend to reduce our planned 1967 program dimensions. On the contrary, I intend to provide for them at the expense, if necessary, of other elements of the appropriation. A. Statement of authorizations and appropriations |