PROGRESS REPORT TO THE CONGRESS Mr. BENJAMIN. Incidentally your last report did not include, if I recall, the names and the background of the professional staff. Your previous reports did. Was there a reason for that? Mr. SCHOENHAUT. Yes. We have a very small turnover in staff, and anybody that received the earlier reports knows all about the staff, and so we didn't see any point in wasting the paper to repeat the same printing year after year. Mr. BENJAMIN. You did that for 5 years and never thought about that? Mr. SCHOENHAUT. Well, it finally dawned on us. We also took out the disclosure statement aggregated responses because we weren't too sure how many people were really using them. We are now getting requests for the information and furnishing it on a request basis. Mr. STAATS. Mr. Schoenhaut reported this to the board, and we agreed. It is purely a matter of saving of the cost of the report. There is no reason why we can't put it in again if anybody is interested. Mr. BENJAMIN. I am not in any way suggesting that. Mr. STAATS. It is purely an effort to reduce the cost of the report. USE OF CONSULTANTS Mr. BENJAMIN. A request for $44,000 is made for four part-time consultants. Explain the purpose for these consultants, the work each will perform, the amounts of compensation to be paid, and why staff cannot be used. In 1977, $23,000 was spent for this item. In 1978 $34,000 was spent. For the current fiscal year and fiscal year 1980 you request $44,000, an increase of 91 percent in 2 years. Please explain. Mr. SCHOENHAUT. The four consultants, one is an economist who is fairly well known in the academic world as an economist. He was at one time on the President's Council of Economic Advisers. He is a professor at Georgetown, and he works part time for us. The reason for hiring him is it is in lieu of hiring a full-time economics expert. Mr. BENJAMIN. He is already on board? Mr. SCHOENHAUT. On a part-time basis. Mr. BENJAMIN. You have $44,000 in the 1979 budget? Mr. SCHOENHAUT. Yes, sir. Mr. BENJAMIN. How long has he been on board? Mr. SCHOENHAUT. Four or five years on a part-time basis. Mr. BENJAMIN. So actually it goes back to the $23,000. Mr. SCHOENHAUT. Yes. Mr. BENJAMIN. All right. Mr. SCHOENHAUT. There is a man who formerly worked for the Department of Defense on their computer system as to how many dollars of various types of contracts defense has awarded, fixedprice incentive contracts, cost-type contracts, etc., and we use him on a part-time basis. Combining his pension and CASB he only gets the equivalent pay I think of the top of a grade 15. Mr. BENJAMIN. Which amounts to what per year? Mr. SCHOENHAUT. Offhand I don't know, but it is not very much. Most of his money comes out of retirement. He is a former government employee. A third man is Professor Robert Anthony at Harvard, who works on an interim basis on specific problems that the board has. He is an expert accountant and well known, and a former controller of the Defense Department, so he knows both sides of the problem that we are dealing with. Mr. BENJAMIN. He also testified extensively in 1970, did he not? Mr. SCHOENHAUT. I don't recall. Mr. STAATS. That is right. Mr. BENJAMIN. Do you recall what his testimony was? Mr. BENJAMIN. He was for? Mr. STAATS. Yes. Mr. BENJAMIN. The board? Mr. STAATS. Yes. Mr. BENJAMIN. How much is his salary for compensation? Mr. SCHOENHAUT. To give you the dollars I would have to supply it for the record. [The information follows:] The amount paid Dr. Anthony for Fiscal Year 1972 through Fiscal Year 1978 totals $2,465.58. JOINT PRODUCT COST EXPERT Mr. SCHOENHAUT. The fourth consultant is a man who wrote his doctoral thesis on joint product costing, which is an extremely complex accounting problem, and we are trying to develop joint product standards or a standard in order to cost out a gallon of gas, for example, or any petroleum product. The petroleum companies today can't cost out any individual product, and we are trying to get a handle on how to do that. Mr. BENJAMIN. With all the government regulation of the petroleum industry, no other government agency has ever costed out a gallon of gas. Mr. SCHOENHAUT. That is right. Mr. BENJAMIN. That is interesting. How long have these people been on board? Mr. SCHOENHAUT. They vary. Mr. BENJAMIN. Who has been on the shortest time? Mr. SCHOENHAUT. Dr. Schmeltz, who is the joint product cost expert. Mr. BENJAMIN. How long has he been on? Mr. SCHOENHAUT. Probably 2 years. Mr. BENJAMIN. That takes him back to 1977. In 1977 the cost for all this expertise was $23,000? Mr. SCHOENHAUT. Yes. Mr. BENJAMIN. Why is it $44,000 today? Mr. SCHOENHAUT. They are spending more time working for us. They get paid on a per diem basis. I think the $44,000 is the same as we had or anticipated last year. Mr. BENJAMIN. Last year? Mr. SCHOENHAUT. Yes. Mr. BENJAMIN. Give us a breakdown on that, on the $44,000 versus the $23,000. [The information follows:] The $23,000 shown for fiscal year 1977 represents the amounts paid to four consultants during that fiscal year. The $44,000 estimated to be spent for fiscal year 1979 and fiscal year 1980 includes the amounts paid and expected to be paid to six consultants at increased rates over those paid to consultants during fiscal year 1977. PERSONNEL BENEFITS Mr. BENJAMIN. Also for the record, explain the personnel benefits item. Are these benefits mandated by statute? If so, please cite. [The information follows:] The amount requested for personnel benefits is 8.5 percent of the amount anticipated for personnel compensation and includes: A. Payments to Civil Service Life Insurance Fund for cost of group life insurance. The government pays one-third of the cost of regular life insurance and the employee pays two-thirds under provisions of 5 U.S.C. 8707. B. Payments to Civil Service Retirement Fund.-5 U.S.C. 8334 provides that there shall be deducted and withheld from the basic salary of each civilian officer or employee to whom this law applies an amount equal to seven percent of such basic salary as a deduction for retirement. The government matches the employee's contribution. C. Payments for FICA Taxes.-The 1978 amendments to the Social Security Act provide that beginning with calendar year 1979, FICA deductions would be 6.13 percent of the first $22,900 of wages received. The government matches the employee's contribution. D. Payments to Health Benefits Program.-The cost of health benefit coverage for employees is shared by the employee and the government, with the government's contribution of about 60 percent of the vendor charges. TRAVEL COSTS Mr. BENJAMIN. Itemize your travel and projected travel expenses for fiscal year 1979. Explain the purpose and cost of each trip. Provide a projection of travel planned for fiscal year 1980. [The information follows:] 35-533 79 36 (Pt. 2) 1,550 2,600 Estimate is for all of FY 1979. Estimate is for all of FY 1979. Estimate is for all of FY 1979. Estimate is for all of FY 1979. Estimate is for all of FY 1979. 378 378 298 32 55 109 100 Perform duties as Member, CASB. Research on CAS 417/421 at contractors' plants. Attend National Contract Management Association Symposium. Participate in Procurement Conference of Department of Transportation. Research on Selling and Marketing Costs and attend National Contract Attend National Contract Management Association Meeting. Research on CAS 417/421 at contractors' plants. Speak at Electronic Industries Association Annual Meeting re CAS. Participate in CAS Workshop and Research on 417/421 at contractors' Participate in CAS Workshop. 609 609 435 327 245 526 360 239 239 303 538 303 303 224 224 786 604 304 304 189 394 394 97 Research on Cost/Benefit Study. Monitor Defense Contract Audit Agency Training Course. 203 245 Speak to Professional Military Comptrollers' School. Speak to National Association of Retired Employees and Association of Government Accountants re CAS. ABBREVIATION: CAS (Cost Accounting Standards) Research on CAS 417/421 at contractors' plants. Research on CAS 417/421 at contractors' plants. Speak at CAS Seminar. Research on CAS 417/421 at Defense Contract Audit Agency. Research on CAS 417/421 at Defense Contract Audit Agency. $ 682 143 342 619 273 275 570 413 413 142 72 12 190 130 141 122 122 122 210 $24,924 Attend American Institute of Certified Public Accountants meeting Speak to Association of Government Accountants re CAS. Research on CAS 417/421 at contractors' plants. Research on CAS 417/421 at contractors' plants. Research on CAS 417/421 at contractors' plants. Meeting with CASB Staff re Joint Product Costing. The above itemization covers the first 5 months of FY 1979. It is anticipated that the remaining 7 months of FY 1979 will require more travel funds (about $45,000) to cover meetings with contractors on potential Standards; many contractors were unable to meet with the staff because of the holiday season and closing of their books for Calendar Year 1978. We anticipate that travel costs for FY 1980 will be about the same ($70,000) and for similar purposes as itemized above. ABBREVIATION: CAS (Cost Accounting Standards) |