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has to do with the matter of payroll checks. Everybody, of course, has the same problem that these new deductions and what-have-you have complicated the preparation of the checks. We were flirting with the idea, since the type of equipment that gives the most efficiency and speed in that field represents such a large investment, whether or not all the agencies involved in the legislative branch might not be able to pool their needs in a central point and avail themselves of a central service so that it would help them keep down the costs and still give them the full benefit of the latest devices in this field.

Since you have probably the biggest payroll and have gone the furthest in this matter of equipment, I wonder if you could elaborate on it and tell us whether or not in your opinion such a joint plan would be workable?

Mr. HARRISON. How many employees would be involved in that, would you say?

Mr. STEED. Well, the Library of Congress has about 2,000, and there are 4,200 on the House side. I do not know how many are on the Senate side. The other body is currently having their checkwork—they do not pay everybody in checks, they pay some by cashbut I understand they are having their checkwork done in the Treasury.

The cost of the best and latest equipment is so high that unless the equipment is used rather heavily it does not justify the cost. We were wondering if the agencies involved, sitting down in conference and pooling all their needs, might not come up with some plan that would enable everybody to benefit from the advantages of the new type of equipment through a joint venture.

Mr. HARRISON. Mr. Chairman, to give you a little brief outline of our system, we rent this equipment on a monthly basis based on a certain amount of use during that month. The monthly rental is $20,644. It is a flat rate, actual running time. Any additional time we have to pay for. In February we had to pay additional time of $1,600. That indicates the two machines that we have are utilized pretty fully. You see, we do not just make our payrolls on those. The payroll is just a byproduct, really. All our costs are handled through these machines, our annual and sick leave, our inventories, and so on. So that these machines are constantly grinding out information that helps us operate a more economical plant. Mr. HORAN. A full month? Mr. HARRISON. Yes, sir.

Now, if we took on an additional payroll it would require more than just writing checks. We would have to feed into the brain of this machine all the information, which would have to come to us some way, probably set up a card system here with tabulators to punch the cards, and we would have to convert the cards to tape and then run the tape through the machines. The actual running of the checks does not take a lot of time, it is the programing before that that takes the time. I would say we would have to expand our equipment and add one-third to it. We would have to have at least another machine, and we do not have space for it. I hate to keep harping on space but we do not have the space.

Mr. STEED. Some of the agencies that have a great volume of work for these machines, such as the Internal Revenue Service, I think have come to the conclusion that the perfection of this sort of thing has pretty well leveled off so that you do not buy a machine and have it obsolete in a few months. They are thinking of buying these machines rather than renting them since the rental is rather high. Our thought is perhaps by several of these legislative agencies pooling their work and having it done in a central place it would justify the cost of the equipment.

Mr. HARRISON. I think the availability of the machine makes it worth as much as it is, being able to go in at a moment's notice and get your cost figures on a certain segment of our work.

Mr. STEED. On the House side they only pay once a month and you could always anticipate the exact time and the amount of time needed to perform their work. The rest of the time you would have very little interference from the other agencies. Every one of the agencies have a problem and we get into the situation where we cannot justify everyone buying this equipment, but I thought if all got together you might make a good case for the purchase of it.

Mr. HARRISON. I think perhaps when this machine is perfected to the point that you mentioned a moment ago—and perhaps the 1401's we have now are perfected—that perhaps it would pay us to buy them, using them the way we do, because a single use of these machines will not pay the way. You have to have multiple uses for them, which we do. Just taking on a single job such as handling the payrolls of the House, for example, it would require many steps before the checks were actually written. There would be these vast numbers of cards that would have to be punched and the tape would have to be run. It would cause quite an expansion in our plant. I do not say we could not do it, but it would require very close coordination between our Office and the Disbursing Office.

Mr. STEED. The time required to prepare the payroll of the House of Representatives now leaves a Member so little time to change his payroll that it sometimes works a great hardship. Cases come up every month when they have to cancel checks and redo part of their work, and it is a constant waste. If, by the machine process, they could cover this whole payroll situation in a matter of a day or two a month it would give the Members a lot more freedom in changing personnel in their offices and that sort of thing.

I do not know whether to seriously suggest such a thing or not because I do not have enough of a notion as to what is involved in this type of operation. But in some of our other hearings, agencies that have a tremendous volume of work make a pretty good case to buy, rather than rent, the machinery. I think the Treasury has made some very fine cost savings through the use of the machinery. I believe they estimate if they had not mechanized in the Treasury they would have to have 6,000 more employees than they have.

Mr. CRISTOFANE. There have been many rapid improvements in the data processing field.

Mr. STEED. This special committee they had in Treasury to study the matter seems to have come to the conclusion the machines have now reached the point there is not much prospect of very much change in them for some time to come. They think they have fairly well leveled off in the art of developing these machines and that they are about as good as they will be for a long time.

them and that thiend it to a shuial themsel

Mr. HARRISON. Mr. Steed, we have a man in our office who is a real expert in this line, Mr. Epstein. He has lived with our system since the beginning. I would like to have an opportunity for us to discuss this with him and perhaps have him discuss it with somebody up here. I must admit I have a feeling of helplessness when I get around these machines because they can do so much so quick and I can do so little of it in the same time. I do not understand the complications of this highly specialized field.

Mr. STEED. We may be talking about two different things, but as I understand it, in the case of the House Disbursing Office they felt that by preparing certain material themselves, perhaps on tape, that they then could send it to a shop that had the machine and process them, and that this was something that did not take up a lot of time.

Mr. HARRISON. It may be they could do that. That is why I suggest that Mr. Epstein talk to you about it.

Mr. STEED. ì know in the case of the Internal Revenue Service they intend to have a number of field offices prepare a vast amount of material on tape and then send it to a central office.

Mr. HARRISON. The Census did that in their last census.

Mr. STEED. But by combining this whole thing together they are able to justify the cost by savings that have resulted. In other words, they made it reasonable to assume that a rather substantial capital investment in these machines was good business.

Mr. HARRISON. We must remember that in order to have the Disbursing Office give us the tape it would require a great deal of time and equipment to prepare that tape. .

Mr. STEED. As I say, I do not understand all the details, but since everybody seems to want to take advantage of the benefits that accrue through the use of these machines I thought there might be some way by which the pooling of the work of the various agencies could justify the investment. I think it is worth looking into.

Mr. HARRISON. Would you like me to ask Mr. Epstein to discuss it with you? I can ask Mr. Wilson to tell him whom he should contact.

Mr. STEED. First he might contact the payroll people of the other agencies and from that he might be able to come up with an answer as to whether it has some possibilities.

Mr. HARRISON. All right, sir. We will certainly be glad to cooperate in this in any way we can. Mr. STEED. Do you have any questions, Mr. Horan?

Mr. HORAN. All we are appropriating for here is for congressional printing?

Mr. HARRISON. Yes, except the warehouse item.

GPO REVOLVING FUND Mr. HORAN. That would be construction. You are operating under a revolving fund and this appropriation is to repair the capital structure of that revolving fund?

Mr. HARRISON. No, it is just to pay the congressional printing for 1963. It pays us for the work we do for Congress.

Mr. HORAN. And keeps the revolving fund healthy?

Mr. HARRISON. It helps to, sure, because the $12 million last year along with the $18 million of the Army and the $11 million of the Air Force and so on enabled us to keep the revolving fund solvent.

Mr. HORAN. Give us the history of this revolving fund, the background and the reason for it, how it works mechanically, and then a survey of the accounting as of the present time that this appropriation is affected by. Could you do that, and could you give us the total business of your office ?

Mr. CRISTOFANE. Through the efforts of this committee in 1954 there was appropriated a revolving fund for the Government Printing Office. That fund was set up in the amount of about $37 million, which included accounts receivable, work in process, equipment and inventory. The authorization that we had in the enabling legislation was to the effect that we would operate the same as you might consider any business. We would pay for the work that was being performed on orders which we received from various agencies of the Government and after the orders were completed we would bill the agencies and they would pay us by check. The object, of course, was to sell printing and binding and some other related services to the various Government departments and establishments in accordance with the law. We continue to operate that way.

One of the agencies we sell our services to is the Congress and we are here now of course, to justify the amount Congress pays for its own printing and binding. When we perform printing and binding on the order of Congress, and when the work is completed, we are reimbursed. The Congress comes in the same relative position as any other Government agency in reimbursing the revolving fund for the work done.

Mr. HORAN. It is covered back in the revolving fund rather than the Treasury? Mr. CRISTOFANE. Yes, sir. Mr. HORAN. And it has worked very well ? Mr. CRISTOFANE. Yes, sir. Mr. STEED. Will the gentleman yield at this point? Mr. Horin. Sure.

Mr. STEED. As you know, they have increased the amount of the congressional request this year because in recent years they have had to dip in the year ahead in order to make it balance out.

Mr. HORAN. That is right. I would call it repairment of the capital structure, of the revolving fund. We might be asked that question when the bill comes up.

Mr. CRISTOFANE. I think we are one of the few agencies of the Government that operates on the same basis as a business in the sense of using a working capital and the way we receive reimbursement for services rendered.

Mr. HORAN. Can you verify through the years since 1954 that there has been a saving to the Government through the operation of this?

Mr. CRISTOFANE. Oh, yes, and besides the General Accounting Office audits our accounts every year and submits a report to Congress.

Mr. Horan. Just so we have that to point to when we have this bill up, because we are rather proud of the fact it is working out well. Could you tell us the amount of business that you do for all agencies and departments other than the Congress?

Mr. CRISTOFANE. All right, sir. We will also furnish you a table showing the total business of the Government Printing Office as you requested.

(The information requested follows:)

The billings for all agencies and departments other than Congress amounted to $84,228,724.54 for the fiscal year 1961.

REVOLVING FUND, GOVERNMENT PRINTING OFFICE

(Printing and binding operations)

Value of services performed Fiscal year:

( Fiscal year-Continued 1954.$75, 262, 564. 52 1959.

$93, 924, 971. 39 79, 344, 866. 75 1960.

100, 415, 730.79 1956.--87, 725, 484. 83 1961..

98, 635, 914. 77 1957.-

89, 569, 252. 78 1962 (July 1961 to 1958---

90, 498, 134. 98 January 1962) -- 69, 009, 618. 97 2Âòti2\\2\§Â2Ò2§Â2Ò2ÂÒ Â2Ò2Â►ūti Mr. HORAN. Sure.

Mr. STEED. In further reference to what you have just been discussing, I think at this point we will insert pages 124, 125, and 126 of the committee print.

(The pages follow :)

1955---

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