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different hardware, coding structures, and software. The purpose
of PIRM is to luplement a standardized administrative accounting
and payment system for the Department to be operated at two
locations. Within the standardized systea, unique bureau
requirements related to budget structure and geographic locations
will be preserved. The Geological Survey has been chosen as the
lead agency for this project with Departmental oversight. Standard
accounting syster software was competitively procured in September
1987. The system will be implemented in the Geological Survey and
the Bureau of Reclamation at the beginning of 1989, with the
remaining bureaus joining the system in 1990 and 1991.
Payroll/Personnel System (PAY/PERS); System development for
PAY/PERS was initiated in 1976 and implemented in 1979 for the
Bureau of Land Management, the Bureau of Reclamation, and several
small agencies. In 1982, it was selected as the single
Departmental payroll/personnel system. All Interior Bureaus and
three non-Interior agencies were converted to the system by 1984.
Today this one system services over 116,000 accounts for all
Bureaus of the Department and three other agencies (the Education
Department, the Selective Service Systen and the Federal Labor
Relations Authority). In order to upgrade PAY/PERS, the Department
is considering a proposal to adapt the FBI's Payroli/Personnel
software for this purpose and has completed a cost-benefit analysis
of the system.

Unemployment Compensation: An initial review by the Department's Office of Financial Management identified certain internal control weaknesses in our unemployment compensation process. To correct these problems a contractor was engaged to conduct the technical aspects of the program, including training bureau personnel, appealing claims, etc. Between January 1, 1986 and the end of February, 1988, the Department has avoided costs of more than $4 million through this effort, primarily through appealing improper claims.

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Overtime Costs: In 1985 the Department spent more than $52 million for overtime. efforts to improve the management and control of overtime have resulted in savings of approximately $4.1 million in 1987, and an additional $4.3 million is expected to be saved during 1988.

Cash Management: Interior is considered a leader in cash
management in the Federal government. Prom 1983 through 1987
Interior saved the O.S. Treasury approximately $23 million, with an
additional $4 million in savings expected in 1988. Examples of

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activities include: (1) the use of wire transfen for receipts and expenditures, (2) a reduction of travel advances from $12 million to s4 million as of December 1987; and (3) the initiation of credit

card technology to collect Pederal funds. Administrative Provisions

Appropriation language is requested to provide authorization for the acquisition of eleven aircraft, seven of which shall be for replacement for the Office of Aircraft Services (CAS) fleet. As part of the budget process, each year QAS reviews records and estimates of how many aircraft will need to be replaced or new additional aircraft purchased in a given year. This estimate provides for general replacement of older aircraft and some contingency in case of destruction of existing aircraft. We are continuing our efforts in the area of aviation safety and are assisting the bureaus in developing their own safety plans.

Consultant Services

The Department proposes to increase from $300,000 to $810,000 the limitation on consultant services as authorized by 5 0.S.C. 3109. When the $300,000 limitation was included in the PY 1968 Department of the Interior and Related Agencies Appropriations Act, the salary rate for a

S-15, step 10, which is the highest rate at which consultant services can be reimbursed, was $25,711. The current salary rate for that grade is $71,377 or 270 percent of the 1968 level. As salary rates have risen, the $300,000 limitation has increasingly become a problem for the Department. In order to approximate the same amount of consultant services in 1989 as was available in 1968, we propose to increase the limitation from $300,000 to $810,000.

PBA Reorganization Pinally, in order to improve the management within the Office of the Secretary we have proposed to the Subcommittee in a letter dated March 8, 1988, a reorganization and reprogramming affecting some offices within the Office of Policy, Budget and Administration. The reasons for the new organization and the special features of it focus on increased management emphasis in several functional areas, better coordination and efficiency, and changes in individual responsibilities to accomplish these goals. We hope that the Subconmittee will respond favorably to this proposal. This concludes my opening statement, Mr. Chairman. I appreciate the opportunity to discuss these matters with you. I will be pleased to answer any questions this Committee may have with regard to this request.

BIOGRAPHICAL SKETCH

RICK VENTURA

Assistant Secretary
Policy, Budget and Administration

Born in Los Angeles, California.

Graduate of California State University.

Appointed Assistant Secretary in September 1987 by President Reagan.

Deputy Director of ACTION from August 1985 until September 1987, where he helped manage a volunteer service agency and was responsible for overall management of agency resources, including personnel, agency budgets, procurement and property.

Prior to joining ACTION was Executive Director of the National Advisory Council on Adult Education. Director of Development for University of California at San Diego and Director of Development and Planning for University of Southern California and Assistant Dean of Whittier College.

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OPENING REMARKS Mr. YATES. Mr. Ventura, is there something you want to say about the Office of the Secretary at this point?

Mr. VENTURA. Yes, Mr. Chairman, thank you. Thank you for the opportunity to appear before you today in support of the Fiscal Year 1989 budget request for the Office of the Secretary. If I may, I would like to submit my statement for the record and briefly outline certain points at this time. Mr. YATES. That has already been done.

FISCAL YEAR 1989 BUDGET REQUEST Mr. VENTURA. The Department is requesting appropriations totaling $53,481,000, including $51,681,000 for the Office of the Secretary, and $1.8 million for the Office of Construction Management. This will provide executive direction, coordinated policy development and oversight in line with current Administration initiatives and congressional direction to ensure the efficient management and operations of departmental activities.

Within the salaries and expense account, the Department requests an increase of $4,162,000 from 1988 appropriated levels. Of this increase, $3,793,000 is for program increases with a balance of $369,000 for nondiscretionary base adjustments. I would like to highlight some of these increases.

RESTORATION AND REPAIR OF HISTORIC INTERIOR BUILDING We are requesting $1.2 million to begin a program of restoration and repair of the historic main Interior Building. This request is made to ensure the long-term preservation of the Interior Building and its exceptional works of art. Examples of the type of specific activities to be undertaken include restoring the building's 22 murals, many of which are damaged and discolored, and updating and revitalizing the departmental museum and its collection.

Mr. Chairman, at this time I would like to present to the committee a publication by the National Park Service entitled “The Interior Building: Its Architecture and its Arts, Preservation Case Studies." I believe this document supports our request for the $1.2 million required for the restoration.

I have asked Mr. Jerry Rogers from the National Park Service, the Associate Director for Cultural Resources, to be present in the audience to answer any questions that you may have with respect to the proposed restoration.

MANAGEMENT IMPROVEMENTS I would also like to highlight the Department's productivity enhancement fund program. The Secretary has proposed establishing a fund of $500,000 to be used to finance the productivity enhancement fund projects partially on a matching basis with the bureaus. The bureaus are highly supportive of this program and, with the Office of the Secretary, expect a six to one return on investment over the life of these projects.

We are continuing our efforts toward management improvement in other areas as well. The financial integration review for management initiative, FIRM, has established strategy to improve financial operations. We will be implementing a standardized administrative accounting and payment system for the Department. Unique bureau requirements related to budget structure and geo graphic location will be preserved.

By utilizing effective cash management, Interior has saved the United States Treasury approximately $23 million from 1983 through 1987 with an additional $4 million in savings expected in 1988. As a result of the Department's activities in this area, we have become a leader in cash management in the Federal Government.

PROPOSED REORGANIZATION I would also like to mention that since the 1988 budget was transmitted, we have submitted a reprogramming request in order to improve the management within the Office of the Secretary. We have proposed to the Subcommittee in a letter dated March 8, 1988, a reorganization and reprogramming affecting some offices within the Office of Policy, Budget and Administration.

The reasons for the proposed reorganization and the special features of it will focus on increased management emphasis in several functional areas which we firmly believe will lead to better coordination and efficiency and greatly enhance our ability to accomplish our goals.

Mr. YATES. Which ones will be better served by this? You say several. Which ones specifically?

Mr. VENTURA. I believe the Department of Information Resource Management will be greatly enhanced. I have brought with me today Michael Crum, who is in the audience. He's our new Director of the Office of Resource Management. Currently that particular department is placed well down within the organizational structure. What I am proposing to do on an interim basis is to move that department so it would report directly to me. This would be consistent with many other assistant secretaryships across the Government.

With respect to Management Improvement, we are proposing to move that department from its current position to become aligned with the Office of Budget and Finance. The logic there being that those three departments are complementary,

Mr. YATES. What are you going to do with those? They are complementary divisions. And what do you propose to do?

Mr. VENTURA. I'm moving the Office of Management Improve ment to a direct line with the Office of Budget and the Office of Financial Management. By doing that, we are freeing up one of our directors to focus more clearly on two areas which we feel require a great deal of focus. Those two areas are Procurement and the Office of Construction Management.

Mr. YATES. How much do you save thereby?
Mr. VENTURA. In dollars?
Mr. YATES. Yes.

Mr. VENTURA. There is really no dollar exchange at all there. It's basically a change in the degree of focus that will take place.

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