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Section 1.

FUNDAMENTALS OF THE BUDGET

MANAGEMENT SUMMARY

The pie charts on the opposite page show the authorized level of operations in FY 94 and the proposed operations level for FY 95 are virtually the same approximately $22.9 million.

In FY 94, total funds available are anticipated to amount only to $19,875,000, the shortfall of $3,010,000 resulting from lower reimbursements than forecast. $1,297,000 of the shortfall is postponed to FY 95, and the remaining $1,713,000 is delayed indefinitely

The FY 95 budget comprises the base amount of $19,875,000 plus the $1,297,000 postponed from FY 94, plus workload/program changes, price level increases, and mandatory changes to bring the FY 95 operating level to $22,894,000.

H.I.S. activities which were scaled back in FY 93 continue to be curtailed in FY 94 because of the budget constraints shared among all House entities. A large portion of H.I.S.'s non-personnel expense is allocated to the purchase of hardware and software to build an infrastructure of House data communications. These and other capital investments have been hurt by budget reductions. Nevertheless, these investments must be reinstated, albeit on a delayed basis.

No increase in the current staffing level of 254 is requested, even though workload, particularly in the customer service area, will increase throughout FY 94 and FY 95. H.I.S. expects to be able to burden several technical and administrative positions with customer service functions.

House-wide budget cuts have affected funding for H.I.S. operations on two fronts:

H.I.S.'s direct appropriation, and

reimbursement for services provided to Legislative
Branch Agencies.

H.I.S.'s appropriation has been limited along with everyone else's, but the effects of budget cuts on our reimbursing customers have reduced H.I.S. revenues as the customers curtail their use of H.I.S. services. Therefore, more of the burden of H.I.S. funding shifts to direct appropriation.

BUDGET SUMMARY

H.I.S.'s budget proposal for Fiscal Year 1995 (FY 95) is $22,894,000. The FY 95 budget categories are compared with FY 94 in the following table:

Total Budget

Salaries

FY 95 REQUEST COMPARED WITH FY 94 AUTHORIZATION

($,000)

Staff Support
Training

Travel

Telephone

Technical Publ.

Rental & Maint.

Equipment

Software

External Services

Purchases

Equipment

Software

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The significant increases are in the equipment and software purchase categories, with slight increases in staff support and software rental costs. Reductions in the remaining budget categories effectively offset the increases. The pie charts below show the distribution of FY 94 and FY 95 budgets among the major object classes.

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FUNDING

H.I.S.'s FY 95 proposed budget total is virtually the same amount as the FY 94 authorization. However, in FY 95 H.I.S. will require additional funding by direct appropriation, an increase of $1,917,000 (13.2%). The following chart shows how funding is derived:

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The FY 95 reimbursement forecast is lower than that of FY 94 because our major customers have predicted that budget constraints will restrict their usage of H.I.S. services and thereby reduce reimbursements. Another reason for lower reimbursement is that our expectations for new business in FY 94 and in FY 95 are less than originally estimated. The FY 95 appropriation request of $16,474,000 is predicated on H.I.S. receiving $6,420,000 in reimbursements: $5,220,000 from current services, and $1,200,000 in additional business.

The H.I.S. reimbursement forecast is as follows:

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FY 94 funding of H.I.S. services provided to internal customers was changed from reimbursement to direct appropriation. Our FY 95 requested appropriation was $9,646,000, and reimbursement from previously paying customers was forecast at $6,510,000, totaling $16,156,000 in estimated funds expected from the two sources. The final combined appropriation was $14,557,000, which is $1,599,000 (9.9%) less than was requested.

Also, much of the new business expected in FY 94 from GAO and other customers apparently will be delayed at least until FY 95, causing an estimated $1,411,000 funding shortfall in FY 94, in addition to the above mentioned $1,599,000 reduction. The net effect on the H.I.S. FY 94 operating budget is a reduction of $3,010,000 which is a 13.2% shortfall, to bring the planned budget of $22,885,000 down to $19,875,000.

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