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TUESDAY, APRIL 12, 1988.

OFFICE OF THE SECRETARY

WITNESSES

RICK VENTURA, ASSISTANT SECRETARY, POLICY, BUDGET AND ADMINIS

TRATION JOSEPH W. GORRELL, PRINCIPAL DEPUTY ASSISTANT SECRETARY,

POLICY, BUDGET AND ADMINISTRATION ANTHONY L. ITTEILAG, DIRECTOR OF BUDGET MARVIN E. WHITEHEAD, BUDGET OFFICER, OFFICE OF THE SECRETARY

Mr. YATES. This is the Office of the Secretary coming in for their budget for Fiscal Year 1989.

INTRODUCTION OF WITNESSES

Appearing in support of the budget is Mr. Ventura, Assistant Secretary for Policy, Budget and Administration, and he is accompanied by Mr. Gorrell, the Principal Deputy Assistant Secretary for Policy, Budget and Administration; Mr. Itteilag, Director of the Budget; and Mr. Whitehead, the Budget Officer, Office of the Secretary.

All right. Mr. Ventura's statement may go into the record at this point. The biography of Mr. Ventura may go into the record at this point.

[The information follows:

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STATEMENT Q RICK VENTURA
ASSISTANT SECRETAR-POLICY, BODGET AD ADMINISTRATION

DEPARDIENT Q TE INTERIOR
BEFORB THE BOUSB SIE UITTER ON APPROPRIATIONS
FOR THE DEPARIMENT OF THE INTERIOR AND RELATED AGENCIES

April 12, 1988

Mr. Chairman:

Thank you for the opportunity to appear before you today in support of the FY 1989 Budget for the Office of the Secretary in the Department of the Interior. Before highlighting the changes we have proposed for the FY 1989 budget. I would like to say that we appreciate the Committee's actions regarding our FY 1988 appropriation, including the Conferees' lifting of the dollar earmarking in the Secretary's Immediate Office. The Department is requesting appropriations totalling $63,481,000, including $51,681,000 for the Office of the Secretary and $1,800,000 for the Office of Construction Management, to provide executive direction, coordinated policy development and oversight in line with current Administration initiatives and Congressional direction to ensure the efficient management and operation of Departmental activities.

Salaries and Expenses

I would like to explain the changes we have proposed from the 1988 program for the FY 1989 budget. The Department requests an increase of $4,162,000 and 25 workyears from the 1988 appropriated levels to finance executive direction and management of the Department's activities, and to carry out the responsibilities of this Cabinet level office. Of the $4,162,000 increase, $3,793,000 is for program increases with the balance of $369,000 for base adjustments. The changes are detailed as follows:

Program Increases ($3,793.000)

+$1,200,000 in Central Services to begin repair and restoration of the historic features of the Main Interior Building; +$575,000 and one workyear to meet costs associated with the Department's Productivity Enhancement Fund program and requirements under the Freedom of Information Act;

+$250,000 and fine wortyear for a transfer of responsibility from the Office of the Inspector General for negotiating indirect cost rates with Department contractors; +$167,000 and three workyears related to an expansion of measures to enable 580 staff and program managers in the Department to become proficient in reducing the number of complaints and therefore costs,

+$250,000 and four workyears for audit follow-up and related workload to ensure reporting requirements are met and timely responses are made to audit reports; +$945,000 and six workyears to analyze long-term issues of significance to energy and natural resource management and to secure technical expertise in regards to the Superfund law, the Safe Drinking Water Act, and ground water; and

+$406,000 and six workyears applied to offices throughout the account to consistent with predicted workload and service requirements anticipated in PY 1989.

I would like to mention that since the budget for 1989 was transmitted, we have submitted to the Committee a reprogramming request for 1988 which would allow the implementation of a proposed reorganization of the Office of Policy, Budget and Administration, and in effect change our plans for use of part of the $945,000 requested to analyze long-term policy issues. This alternate use of requested funds would not change the overall amount requested for the Office of the Secretary appropriation.

Base Adjustments ($369.000)

This includes increases for GSA office space rent, the January 1988 pay increase, executive and clerical pay raises, Working Capital Pund expenses, and other such items. These increases are offset to a considerable degree by decreased retirement costs from the FY 1988 enacted level.

Construction Management

This appropriation provides for the expenses of the Office of Construction Management (car) to assist in the planning, construction and operation of facilities. Resources requested for this activity total $1,800,000 and 18 workyears, the same level as 1988. Based on this Committee's directive of March 26, 1987, we have expanded and intensified our efforts to assist the BIA's facilities program. Many accomplishments have been realized in this area during the past year.

niest, we have accomplished, or are on schedule with, the five nagor program objectives established by both the House and Senate Appropriation Committees. These include:

Improvement in the rate of facilities Improvement and Repair
obligations and procurements. Seventy-seven percent of the ri 1987
appropriation was obligated in that fiscal year. We expect even
better performance this year.
Acceleration of the reduction of excess BIA space. We have reduced
our inventory by more than 340,000 square feet this fiscal year
with annual Operation and Maintenance savings of $240,000 and
repair items savings of $4.2 million.
Completion of the final draft report on BIA Bducation on March 17
of this year. This report is a comprehensive analysis of BIA
funded schools.

Committee and Departmental approval of the reorganization of the Office of Pacilities Management in Albuquerque, employees formally began operating under the new structure on April 11, 1988. Development of a revised Operations and Maintenance formula for allocating Facilities Improvement and Repair funds with a planned implementation date of October 1, 1988.

We have complied with all other facilities directives as well for the first time in ten years.

These accomplishments have been possible because of cooperative efforts between BIA and Om. All have been accomplished with the overall objective of building the capacity in the Bureau to fully manage its program in the future. We have secured resources from a number of organizations including other Pederal agencies in order to provide Bureau managers with the expertise and support they need. Our accomplishments in this program speak for themselves. Preservation of the Main Interior Building We are requesting $1,200,000 to begin a program of preservation and maintenance needs of the historic Main Interior Building, for which we have recently assumed management responsibility under a delegation from the General Services Administration (ASA). GSA has awarded a contract to do a basic analysis of the preservation and maintenance needs of this building, which was listed in the National Register of Historic Places in late 1986. This report will be completed this month. Since it is nearly certain that GSA will not be able to provide funds to us to follow

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through with the report's recommendations in the near future, our request for funding is made to ensure the long ter preservation of the Interior Building and its works of art. The bulk of the request vu fund high priority projects, such as: (1) restoring the building's twenty-two wrals, many of which are damaged and discolored; (2) opdating and revitalizing the Departmental Museun, including sahibit and collection rehabilitations and (3) training an appropriate preservation and maintenance techniques for building managers and mechanics responsible for the maintenance of the building.

Management Irorovements

o

The Department is continuing its efforts towards management improvement, and I would like to provide a status report on some of these efforts.

Productivity Improvement: In 1987 policies and procedures were
developed for a new program designed to finance innovative, low
cost, high-payback productivity improvement projects. Since this
program focuses on improving the delivery of products and services
to the public, we are reaching out to our managers in the field
where we think the greatest opportunity to improve efficiency,
quality, and timeliness of operations exists. The Bureaus are
supportive of this program. The Productivity Enhancement Funding
Program (PE), as part of Interior's overall Productivity
Improvement Program, has received over 140 proposals from bureaus
and offices. The program is under pilot testing during 1988 and
will encompass 21 projects funded by the bureaus during the first
year. If these projects are successful, cost savings of over $11
million are projected over the next three years. Two awards of
$10,000 each will be made to recognize employees of two units whose
projects demonstrate the highest rate of retum and the most
significant improvement in service delivery. In 1989, we estimate
40 projects will be funded under this program. The Secretary has
proposed establishing a fund of $500,000 which will be used to
partially finance Pe projects on a matching basis with the
bureaus.

o

Pinancial Integration Regies for Management (PTRC): The PIRM initiative began as an effort to establish a sound Departmental strategy to improve financial operations. PIRM was undertaken for several reasons. First, our financial systems are old and cannot communicate with each other. In order to provide management with better data for making decisions, these systems must be improved. Second, the reduction in the number of systems (10 adainistrative accounting systems and 30 payment centers) will lead to efficiencies. Most of these systems are based on 1960/1970's technology which cannot provide improved financial operations without major systems modifications. Moreover, they utilize

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