trate on the aggregate longer-range picture and on applying PPBS techniques to interprogram and interagency analyses. More specifically, the newly created resources planning staff in the Office of the Director, is charged with developing procedures and information to improve the allocation of resources among different programs and major categories of the budget. It is concentrating on two functions of the PPB system stressed by the President in August 1965: Analysis of longer-range budgetary commitments. Prior to the establishment of the PPB system, there was no solid basis for programing among the various agencies beyond the budget year. Under the 1967 PPB instructions, agencies are required to give out their program commitments for 5 years ahead. This new staff will gather and analyze their projections so the Budget Director and the President have a total picture of the budget in future years and will know the extent of mandatory or built-in commitments versus discretionary programs. Inadequate explicit attention also has been given in the past to priorities among different programs and by categories of the budget. This staff is developing procedures to focus more attention on interprogram analysis. It will also gather comparative information on needs, program coverage, and rate of return to enable better appraisal of program goals and relative priorities in any add-ons to the budget under existing law or new legislation. The second need to the development and operation of a management information system. The Bureau of the Budget, after exhaustive study and reinforced by the findings of our recent self-evaluation, has determined that it requires an information system, employing advanced technology, if it is to perform its functions economically and efficiently. Staff work for the President, including the presentation and analysis of program alternatives and program progress, requires the highest order of information acquisition, processing, and presentation. The budget process is the most important single vehicle for management decisionmaking in the executive branch; its preparation is becoming increasingly complex and time consuming. The planning, programing, and budgeting integrated system means the analytical probing and careful evaluation of agency budget submissions in greater detail and with greater precision than was ever contemplated under the tradi tional functionally oriented pre-PPBS budget system. Not only is more information needed, but it must also be collected and assembled in many new configurations and crosscuts in order to achieve maximum benefits from the integrated PPBS. Moreover, acceptance of the recommendations made by the President's Commission on Budget Concepts will mean that some the basic underpinnings of the system must be modified, thus placing an added burden on information systems design and development But the application of such a management information system extends far beyond budgeting or PPBS. For example, evaluating the hundreds of legislative proposals, including reports requested by the Congress, and following their course from introduction to enactment or rejection, can significantly profit by using modern information concepts and systems. Specifically the management information system would be designed to meet such objectives as the following: 1. To automate data assembly and processing, to the maximum extent feasible and economical, at all stages of the budget process and to simplify and expedite preparation of the budget; 2. To relate legislation to the budget in terms of authorizations and appropriations and to systematize current reporting on the status of clearance and progress of legislation; 3. To have a current reporting system that will provide information on the status and progress of Federal programs, with the minimum number of sensitive and accurate indicators required to interpret trends for selected programs; 4. To provide, on the basis of current availability, the data required for planning, programing, and budgeting (PPB), and to provide capability in the system for expansion when additional information is available; 5. To have a comprehensive and consistent classification system so that data can be assembled meaningfully for identified current purposes and with sufficient flexibility so that they can meet probable new purposes in the future; and 6. To rely to the maximum extent possible upon access to data stored in information systems of other agencies in order to avoid duplication and to hold the size of the Executive Office systems to a minimum. It is essential that a small, technically qualified staff be established in the Bureau of the Budget to plan, manage, and coordinate the design and development of the management information system. FUNCTIONS AND ORGANIZATIONS The Bureau has five general functions: (1) preparation and administration of the budget; (2) improvement of executive management; (3) improvement of budgeting, accounting, and other phases of financial management; (4) analysis and review of legislation; and (5) coordination and improvement of Federal statistics. The current organization of the Bureau is shown in the attached chart. As a means of dealing with Government-wide problems and furnishing guidance and assistance in the five functional areas, the Bureau has four Offices: Budget Review, Executive Management, Legislative Reference, and Statistical Standards. In addition, the program evaluation and resources planning staffs in the Office of the Director provide leadership and support in the development of the Government-wide planning-programing-budgeting system. The nature of its functions makes it essential for the Bureau to maintain close working relationships with all agencies of the Federal Government. The normal channels in which these working relationships are maintained and through which much of the Bureau's workload is effected are provided by the six programs Divisions: Economics, Science, and Technology; General Government Management; Human Resources; International; National Security; and Natural Resources. The present Bureau of the Budget organization results from the Bureau evaluation of 1967 which was formally promulgated in August 1967. Before reviewing the current organization and function of each Office and Division, it is advisable to consider the summary on the bureau evaluation of 1967 (p. 54). In this way, an understanding of the reasons for, and the objectives of, the 1967 evaluation and reorganization can be fully grasped. THE BUREAU EVALUATION OF 1967, SUMMARY OF CONCEPTS AND OBJECTIVES Why an evaluation During calendar year 1967, the Director of the Bureau initiated an evaluation of the Bureau's organization and management. This evaluation was undertaken by the Bureau's top management, assisted by knowledgeable individuals from outside the Bureau. The reasons for the evaluation at this particular time were To consider the effect on the Bureau of the passage of a substantial amount of new legislation which posed major program, funding, and management problems. To evaluate the progress and problems confronting the Bureau in implementing the planning-programing-budgeting system initiated by the President in August 1965. To bring the Bureau's internal operations and management more in line with the ever-increasing demands, both in volume and complexity, of the Presidency. To resolve a number of specific internal staffing, operating, and organization problems that had been identified by top management, Bureau staff, and outside groups, such as CED over the recent past. Basic concepts that emerged Several overriding concepts emerged during the Bureau evaluation and condition, in a major way, the results of the evaluation, the implementing actions that have been taken and those underway. Principal among these concepts are: The need to view the Bureau's effectiveness continually in terms of: (a) the demands being placed on the Presidency; (b) major changes taking place in Federal Government programs and operations; and (c) the more complex and evolving intergovernmental problems and relationships. The increasing demands being placed on the Bureau's limited top management at the same time internal management problems are demanding increased attention. The general need to bring the Bureau's internal administrative processes in such areas as personnel administration in line with these other changing demands cited above. Principal areas covered by evaluation The principal areas covered by the evaluation were: The Bureau's basic roles and missions with the conclusion that the Bureau's basic responsibilities were sound but needed to be performed more effectively-and that the Bureau should be most cautious in taking on new responsibilities in light of its limited resources. The budgetary process, with the conclusion that major efforts were required to simplify the present processes and to integrate traditional and PPBS processes more effectively. The Bureau's responsibilities for Government-wide organization and management, with the conclusion that major reorientation and restaffing was required. Management information system and processes, with the conclusion that the Bureau was "behind the times" and that an extensive, long-term effort to modernize and automate the Bureau's management information system was required. The Bureau's internal organization structure, with the major conclusion that some restructuring of the Bureau's Divisions was in order to improve internal coordination and integration of closely related programs short of the Director/Deputy Director. The Bureau's personnel management processes, with the major conclusions that more attention must be given to personnel inventory, performance appraisal, and staff development processes. DETAILED STATEMENT OF FUNCTIONS Office of Budget Review (estimated position requirements: 1968-60, 1969—60) This Office assists the Director in the exercise of his responsibilities for the Federal budget. Its activities include participation in the determination of appropriate levels of funding for the Government's various programs, preparation of the budget and supplemental estimates, and presentation of the budget to congressional committees. It also coordinates the review of program and financial plans, the operation of the apportionment system, the use of financial reports. and the development of the structure, classifications and methods for budget control and review. It prepares fiscal and economic analyses and develops budget, tax, and credit policies. The Office has central responsibility for improvement of the Federal budget system, and coordinates the development of the planningprograming-budgeting system as an integral part of the budget process. In the spring and summer of 1967, the respective divisions, under the guidance of this Office, worked with the Director in the in-depth analyses of the programs of all executive departments and 11 other large agencies, utilizing new categories worked out under the planning-programing-budgeting system. Longer range perspectives, usually 5 years, were examined. In the fall examination of the budget, the program reviews were brought into focus. They enabled the Director and the President to have more useful information on the possible consequences of various budget decisions. Considerable time was given to the analysis and determination of possible program cutbacks, deferrals, and reforms. Economic and fiscal analyses are a vital part of the budget task. The Government sector is reviewed in the light of the total economic situation, at almost monthly interval, by this Office in cooperation with the Treasury Department. the Council of Economic Advisers, and frequently with staff of the Federal Reserve Board. The Office prepares projections and reviews, develops proposed economic assumptions and fiscal policies for budgetary use, assists in the clearance of tax legislation, reviews the estimates of receipts, and analyzes Federal receipts and expenditures on the basis of the national income accounts. Monetary and credit analyses are also of major concern. The Gold Budget procedures for examining and limiting Federal expenditures (and increasing receipts) which affect the international balance of payments was continued, and curtailing actions were initiated with several agencies. These activities will be intensified in the light of the President's proposals in his balance-of-payments message. Assistance was given on the credit policy aspects of budgetary requests and legislative programs and on the implications of those recommendations of the President's Commission on Budget Concepts that related to credit, interest, and the Federal debt. The Office develops techniques for analyzing resource requirements for use of Bureau of the Budget and agency staff: promotes the use of cost analysis throughout the executive branch; and performs cost analysis in selected areas as part of the year-round budgetary review process. The Office is a focal point for Bureau concern with user charges; performs a central review of various types of allowances and manpower use restraints; prepares reports and analyses on Federal employment; and monitors the execution of cost reduction policies. The Office plans, schedules, controls, compiles, and edits the Budget, the Budget in Brief, the Special Analyses of the Budget, and supplemental estimates. Scorekeeping on the budget is kept up throughout the year. Using automatic data processing systems, significant budget information has been compiled and is available in master data tapes for 4 completed fiscal years and 2 estimated years, and the data are made available for research in Federal finances. Numerous financial analyses and special compilations are made. For example, during the past year, special work has been done on grants-in-aid, revenuesharing, and advanced funding of education programs. Progress was made in studying the equalization effect of Federal grants, the determinants of State and local spending, and the validity of long-range budget projections. Research was conducted to improve NIA estimates and corporate and personal tax estimates. Attention is given to the surveillance of the budget system and plans for its improvement. The major improvement effort this past year has been the implementation of most recommendations of the President's Commission on Budget Concepts. From March 1967 when the Commission was appointed to thoroughly review the budget and its presentation, Bureau staff was involved in editing. staff assistance, and table preparation for the Commission. When its recommendations were presented to the President on October 10 and subsequently accepted, the task of putting as many of them as possible into the 1969 budget was begun. Implementation of the Commission's major recommendations-a unified, comprehensive budget: separation of spending and lending activities: netting of proprietary receipts-added substantially to the already heavy budget season workload. Two further recommendations, use of accrued expenditure and receipt figures and identification of the subsidy element in Federal loans, will require additional study and preparation before they can be carried out. The |