The other major classification of securities consists of the Treasury bills, bonds and notes that are marketable. The number of outstanding securities of this type now exceeds 5 million. During the last six years interest payments on registered bonds and notes have gone up from 448, 000 to 527,000 per year, while transactions affecting the accounts with registered owners have increased from 191, 000 to 312,000. In four years the volume of Federal estate tax redemptions has increased 40%. The rise in line entries and other workload factors in the public debt accounting system has been substantial. However, we are not asking for any personnel increases to handle other Treasury securities or maintain the public debt accounts, despite the steady growth in workload. In recent years we have discussed in detail the need for increased funds to reimburse the Federal Reserve Banks for services performed as fiscal agents. This item of expense makes up about 29% of the total appropriation request. However, in spite of the fact that we anticipate a greater workload for the Banks in handling all types of public debt transactions in 1973, we are not asking for any increase in the amount required to reimburse them. This is due in part to our joint efforts to simplify and more closely coordinate our complementary procedures and operations. One of the devices by which we are seeking to reduce costs and increase efficiency is a program of on-site visitations to the Reserve Banks, supplemented by training courses conducted by Bureau personnel for mid-level Bank employees who perform public debt functions. Through these and other kinds of management improvements we are trying to absorb added work with no increase in reimbursable expense. AUTOMATION For several years we have anticipated the need to update our computer systems in Parkersburg. We deferred the acquisition of new equipment by renting an additional computer in January 1971 to augment the existing configuration in Parkersburg. However, we are planning to update the equipment in 1974. In anticipation of such a request in 1974, we are requesting 7 additional programmers in Parkersburg in 1973. This is necessary to insure that essential system and programming revisions are completed in advance of the conversion. POSITIONS To recapitulate our personnel requirements, the 1973 estimate reflects an increase of 16 man-years, of which we will need 9 to handle the added volume of issuing, servicing and retiring savings type securities, and 7 as programmers to prepare systems changes for the computer updating. PRODUCTIVITY In the 22 years from 1950 to 1971, the Bureau's staffing has decreased from 5,080 man-years to 1, 948 man-years. During this same period the annual volume of issues and retirements of securities increased from 158 million pieces to 260.6 million pieces. This represents a productivity increase of about 430%. This increase is attributable to a variety of management improvements. The most significant of these have stemmed from the expanded automation of operations and particularly in the imaginative use of computers. We are continuing our efforts to increase productivity through further automation and other improvements so that we can absorb more work with minimal additional funding. OFFICE MOVES The 1972 appropriation contains funds to permit the accomplishment of two major moves by Bureau offices. One move involved the Washington Office, which has had to vacate space it occupied in the Main Treasury Building and in the Bureau of Engraving and Printing Annex to make room for the expansion of other activities. Considerable difficulty was experienced in finding available space in a suitable location at a rental rate acceptable to GSA. In January 1972 enough space was obtained to accommodate about 200 people in an office building at 15th St. and New York Avenue, N. W., directly across the street from the Treasury Building. The move was started in January and will be completed when certain required alterations have been made. We hope to acquire enough additional space in the building to house the major part of the Washington work force of 640 people, but we may have to make such moves on a piecemeal basis as blocks of space become available. The second move is the consolidation of all savings bond functions, now performed in Chicago and Parkersburg. The consolidated office would be located in Parkersburg, West Virginia. This consolidation is being accomplished on a phased basis in an orderly fashion in accordance with the will of the Congress as expressed in the report on the 1972 appropriation request. Temporary space has been obtained in Parkersburg at a nominal rental to house employees who are taking over the first phase of the consolidation - It is also anticipated that the very substantial inventory of microfilm comprising basic savings bond records can be moved this year. Action has been initiated to obtain the special purpose space required for this purpose. Future plans and progress in completing the consolidation are awaiting the procurement of space in Parkersburg to house the combined operations. GSA has initiated a prospectus for the lease-construction of a building, and we anticipate that it will be available and the consolidation will be fully accomplished in fiscal year 1974. In the meantime the personnel complement of the Chicago Office is being reduced by normal attrition and transfer, while a staff is being recruited and trained in Parkersburg at a deliberate pace that will permit the orderly transfer of functions. CONCLUSION We have always appreciated the opportunity to come before this Committee and freely discuss our problems in the knowledge that we could count on your cooperation and benefit from your suggestions. Mr. Chairman this summarizes our budget submission for 1973 and we will be glad to answer any questions you and the members of your Committee wish to ask. RESERVE FUNDS Mr. HINTGEN. Mr. Chairman, we will be glad to answer any questions you or the members of your committee may wish to ask. Senator MONTOYA. How much do you have in reserve funds right now? Mr. HINTGEN. We put in the reserve as a result of the 5-percent reduction an amount of $962,000 which covers both the Bureau of the Public Debt and the Savings Bonds Division. Senator MONTOYA. Will any amount be carried over into fiscal 1973? Mr. HINTGEN. It will not be available to us, sir. We will not draw any of it out. Senator ALLOTT. Mr. Chairman, I don't connect the answer exactly with the question. Is there any carryover? You said you would not draw it. Where does that money go? Mr. HINTGEN. It is in reserve as far as we are concerned, unless it is made available through the Treasury for other purposes. Senator ALLOTT. It will remain available for use? Mr. HINTGEN. On this I would defer to Mr. Sims. Mr. SIMS. No, sir; that will not be made available for use. The Bureau of the Public Debt, because of the reserve that was established with the personnel retrenchments, plus funds that are available because redemptions are at a lower level than had been anticipated for 1972, had a very substantial amount of funds available that could be applied to the pay increase cost of themselves and certain of the other bureaus in the Treasury Department. So to make a short answer, that reserve he spoke of is being applied to pay increase costs of the Department. Senator ALLOTT. So there is in no sense a carryover? Mr. SIMS. There is no carryover in the succeeding fiscal year. Senator ALLOTT. Is this application to all salary increases and other allowances reflected in the new budget request for these particular categories? Mr. SIMS. Yes, sir. The reduction of personnel and the savings brought about by the President's 5-percent personnel reduction is in the 1973 estimates of the Bureau. Senator ALLOTT. Yes. Senator MONTOYA. What specific authority do you have to utilize this money for purposes other than for which it was appropriated? Can you utilize it for other agencies within Treasury? Mr. SIMS. We cannot use the money until the pay increase supplemental request comes to you for action. In the pay supplemental request you are being asked to permit the transfer of some of the Public Debt money to, for instance, the Office of the Secretary, the Internal Revenue Service, the Office of the Treasurer of the United States, and others. It will be your prerogative whether you permit the transfer of the Public Debt unused funds into the other bureaus to cover their pay costs. Senator MONTOYA. Wouldn't it be easier, Mr. Sims, for you to come to this committee and say, "We have $962,000 remaining out of our fiscal year appropriation, and we therefore reduce our budget accordingly," and then face the issue of additional personnel and salary 75-749 - 72 - 6 |