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TESTIMONY OF
JACOB J. LEW
OFFICE OF MANAGEMENT AND BUDGET
BEFORE THE
SUBCOMMITTEE ON TREASURY, POSTAL SERVICE AND
GENERAL GOVERNMENT
COMMITTEE ON APPROPRIATIONS
U.S. HOUSE OF REPRESENTATIVES
MARCH 2, 1999
Mr. Chairman, Representative Hoyer, Members of the Subcommittee, I
am pleased to be here this
afternoon to discuss the President's FY 2000 budget request for the Office
of Management and Budget.
I will make a short statement and then I would be pleased to answer
any questions that you have.
Overview
For FY 2000, the Office of Management and Budget (OMB) requests
budget authority of
$63,495,000. This request is an increase of $2,878,000 over the FY 1999
enacted level of
$60,617,000. The requested OMB funding level will provide 518 full-time
equivalent (FTE) positions
for OMB, the same FTE level as 1999.
The Office of Management and Budget has played a central role in
producing the first budget surplus in
a generation. OMB continues its work to maintain the fiscal discipline that
helped this country
accomplish that goal, while maintaining critical investments for our
nation's future. We are proud of this
contribution to the nation's economic and fiscal health. Additionally, we
are proud of the contributions
OMB has made in making the government work better for the citizens we
serve.
We also believe that this office, as the chief management and budget
office of the executive branch, has
a special obligation to adhere to budgetary discipline and to maximize the
productivity of our resources.
OMB is committed to maintaining budgetary restraint, even though
recent Congressional action has
created numerous additional responsibilities and significantly added to the
organization's workload. Even
so, we propose to maintain the current staffing level, while requesting an
important funding increase in
our information technology infrastructure that will continue enabling staff
to meet our additional
responsibilities by building upon and enhancing the current level of
productivity. I will speak in more
detail about our information technology needs shortly.
Additional Responsibilities
First, I would like to address the scope of OMB's expanded workload.
The 104th Congress and the
105th Congress have created numerous new and important responsibilities for
us and has significantly
increased the organization's workload. In the fall of 1998 alone, Congress
enacted a dozen new
requirements. The Government Performance and Results Act also has added to
the existing workload
of OMB. In addition, we are working to ensure that vital computer systems
throughout the government
will operate efficiently through the year 2000.
Government-wide implementation of the Government Performance and
Results Act of 1993 (GPRA) is
now in its third year and has created a steadily increasing workload for
OMB. In FY 1997, the main
OMB tasks were oversight of the development and submission of agency
strategic plans to Congress
and review of the initial set of agency annual performance plans. This
initial set of annual plans was used
to prepare the President's FY 1999 budget, and the government-wide
performance plan that is now a
key feature of the budget.
The scope of OMB's review and coordination effort on GPRA is already
substantial and will grow
further in 2000. GPRA related efforts require the active participation of
virtually all program examiners,
analysts, and managers in OMB. OMB will continue its work overseeing
strategic plans, annual
performance plans, and program performance reports from approximately 100
Cabinet Departments
and independent agencies. OMB will continue to work with Congress to
improve the usefulness of
these plans and to ensure the plans meet GPRA requirements.
In FY 2000, OMB will begin reviewing the annual plans for the next
year, and will work with agencies
on preparing the agency annual program performance reports covering FY
1999. These performance
reports, which are to be submitted to Congress and the President by March
31, 2000, are the first
program performance reports to be completed under GPRA. In FY 2000,
agencies are also required to
prepare and submit their updated and revised strategic plans to OMB and
Congress. Agencies are
required to consult with Congress during plan preparation. OMB will oversee
and, as appropriate,
assist agencies as they develop these revised strategic plans.
OMB, along with the President's Y2K Conversion Council, is managing
the preparation for the Federal
government's computer conversion for the Year 2000. In 1997, 27 per cent of
the Federal
Government's mission-critical systems were Y2K compliant. At the end of
1998, more than double that
number -- 61 percent -- met that standard. I am pleased to inform the
Subcommittee that in a report to
the Committee that will be forthcoming shortly, we now estimate that as of
January 31, 1999, 79
percent of mission critical systems are Y2K compliant.
We have set the date of March 31, 1999 as the deadline for all
mission-critical systems to be Y2K
compliant. This year, with OMB oversight, agencies will focus primarily on
testing their systems and
their interactions with other systems, and will develop contingency and
continuity of operations plans.
This activity will continue through early FY 2000.
Examples of important new responsibilities for OMB designed by laws
enacted by the 104th Congress
and the 105th Congress include:
- The Unfunded Mandates Reform Act of 1995: Title II
of this Act requires that -- before
promulgating any proposed or final rule that may lead to annual spending by
State, local and Tribal
governments, or the private sector of over $100,000,000 -- each agency must
conduct a cost
benefit analysis and select the least costly, most cost-effective or least
burdensome alternative. Also,
each agency must seek State, local, and Tribal government input. OMB must
issue guidelines to
agencies, monitor compliance with Title II, and publish an annual report on
agency compliance.
- The Paperwork Reduction Act of 1995: This Act
requires that OMB review and approve (or
disapprove) over 3,000 proposed agency collections of information each
year. It explicitly added
third-part disclosures to OMB's review. The Act also requires agencies to
plan more carefully and
explicitly for each new information collection, and OMB must ensure
compliance with this
requirement in reviewing each collection. Finally, the Act requires
agencies to reduce information
collection burdens by set percentages each year, and OMB must promulgate
guidance and track
agency compliance with these goals.
- The Single Audit Amendment Act of 1996: This Act
requires OMB to provide guidance to
implement the Act, which includes revising the single audit circular (OMB
A-133) and annually
updating the Compliance Supplement to help auditors perform audits under
the Act. The Act also
authorizes the OMB Director to review and approve pilot projects to test
alternative methods of
achieving the Act's purposes.
- The Federal Financial Management Improvement Act of 1996 and
The Government
Management Reform Act of 1994: Both of these Acts require that OMB
continue to issue up to
date financial reporting and associated audit requirements for Federal
agencies, incorporating the
provisions of Federal Accounting Standards. The Financial Management
Improvement Act requires
that OMB staff work with agency staff on a remediation plan when an audit
determines that agency
financial systems do not comply with the Act. In addition, when an agency
head disagrees with an
auditor's finding, the OMB Director must review such determinations and
provide a report to
Congress.
- The Clinger-Cohen Act of 1996: This act requires that
OMB develop government-wide policy
and guidance to assist and oversee agencies in implementing the Act. OMB's
responsibilities are to
examine agency capital investment proposals for information technology,
oversee the establishment
and evaluate the effectiveness of agency Chief Information Officers, and
oversee multi-agency and
government-wide procurement programs for information technology.
- Electronic Commerce (EC) Reporting (Section 850 of the FY 1998
Defense Authorization
Act): This Act requires OMB to develop a government-wide strategic
plan for the use of EC in
procurement and to submit annual reports to Congress on EC activity.
- The Federal Activities Inventory Reform (FAIR) Act of 1998:
This Act requires Federal
agencies to compile and submit annually to OMB lists of all commercial
activities performed by
Federal government sources for the agency. It also requires that the
inventory include the name of a
government employee responsible for the activity from whom additional
information about the
activity may be obtained. Accordingly, OMB is augmenting the inventory
requirement of OMB
Circular A-76 and its Handbook to conform to the FAIR Act. OMB, in
consultation with the
agencies, will review the lists each year prior to their transmission to
Congress.
- The Omnibus Consolidated and Emergency Supplemental
Appropriations Act of 1998
placed a dozen new responsibilities on OMB. Examples include:
-- OMB has oversight responsibilities to ensure that agencies
have sufficient resources to address year
2000 computer problems and that emergency funding is allocated to address
emerging needs. The law
permits emergency funds to be allocated for activities included in the FY
1999 budget that were not
funded that year in the appropriations process, and for critical
requirements that have been identified
since the FY 1999 Budget was transmitted. As such, OMB must coordinate with
agencies to determine
that each agency has first used other potential funding sources and that
agency requests demonstrate
reliable, cost-effective conversion strategies;
-- OMB is required to provide an expanded report on the costs
and benefits of Federal regulation; and
-- OMB must prepare an annual report describing the total
Federal expenditure of all official
international travel during the previous fiscal year and the number of
individuals in each agency who
engaged in such travel. The report is submitted by the President to
Congress.
Meeting our Growing Workload
In order to meet these additional responsibilities, we are
coordinating and managing our staff with an
eye toward maximizing productivity. The resources that we have requested
will allow us to maintain our
current staffing level and replace our oldest desktop computers. These
systems are essential to this
mission.
A substantial portion of OMB's desktop systems will be five years or
older in FY 2000. The request for
an additional $400,000 will allow OMB to execute our plan to retire older
desktops, monitors, and
printers on a four to five year cycle. OMB has found that older hardware is
more expensive to maintain
and is more prone to failures. Making sure that OMB employees have access
to up-to-date technology
on the desktop is part of an overall strategy for helping OMB staff keep
pace with mounting workload
requirements.
We have also instituted a number of management measures designed to
maximize the capacity of the
organization to meet its added responsibilities. These include the
establishment of the Investment Review
Board (consistent with the Information Technology and Management Reform
Act) and the Management
Committee, as well as its subgroup, the Workload Management Committee.
The OMB Management Committee, created by the comprehensive review
"OMB 2000," is comprised
largely of career staff and is designed to provide long-term continuity
with regard to OMB management
issues. Its subgroup, the Workload Management Committee, helps ensure that
OMB is managing its
limited resources in a way that enables the organization to operate most
efficiently and effectively. With
the Committee serving as a vehicle to solicit and evaluate employee input,
management is able to shape
its work assignments, advancing the organization's ability to meet its
added responsibilities while
continuing to meet our customary high standards and improving the quality
of our work environment.
We have found that improved communications in both directions increases our
productivity and the
quality of work produced.
The Investment Review Board (IRB) is an integral part of OMB's
strategic plan to leverage information
technology resources to help all OMB staff do their jobs. The IRB is
composed of senior policy and
career line executives from several parts of OMB. In the past year, the IRB
has reviewed and made
recommendations to the Director of OMB on overall funding requirements and
IT funding requirements
in OMB; established priorities for information technology spending
requirements within OMB; charted
and oversaw key information technology initiatives; and established the
Integrated Process Team.
The Integrated Process Team is charged with defining the next
generation of information technology in
OMB, in order to improve staff productivity, reduce costs where
appropriate, reduce cycle time
needed to complete key processes such as the production of the President's
Budget and clearance of
legislative proposals, and identify potential new opportunities to enhance
OMB's interactions with
agencies, congressional offices and the public.
Conclusion
Mr. Chairman, OMB is a fine organization that continues to provide
outstanding work. We remain
committed to producing the best possible work, which is invaluable for both
executive and legislative
branch policy decisions, even as staff resources are stretched by new
assignments. For this reason, I
urge you to approve our request to maintain our staffing level and provide
for up-to-date technology to
help us meet the requirements of our mounting workload.
We have submitted to you the OMB Performance plan in keeping with
the Government Performance
and Results Act. We have carefully integrated the performance goals of that
plan into the management
of this organization, and into the President's budget.
Finally, I would like to say that it is the goal of this
organization to maintain the fiscal discipline that
brought us to a balanced budget, while continuing to invest in the
future.
I am proud, as are the more than 500 employees of the Office and
Management and Budget, to be part
of that mission.
Mr. Chairman, that concludes my statement. I would be happy to
answer any of the Subcommittee's
questions.
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