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FY 2000 Shortfall
$ 9.9 million
FY 2002 Estimated Requirements. We estimate that Congress's printing requirements for FY 2002 will be comparable to those for FY 2001: $81 million for FY 2002 compared with $80.8 million for FY 2001. We project an increase in the cost of congressional printing of about 4 percent due to projected contractual wage increases as well as higher costs for materials and supplies. However, we anticipate that these cost increases, as well as projected workload increases for some product categories (business and committee calendars; bills, resolutions and amendments; committee reports; documents; and hearings), will be substantially offset by workload decreases in other product categories, including miscellaneous publications (primarily because the printing of the U.S. Code will be charged to FY 2001), miscellaneous printing and binding, and committee prints. The net increase for price level changes and workload for FY 2002 will be approximately $200,000.
In order to fully fund the estimated work for FY 2002, it has been necessary for us to adjust the current year (FY 2001) base by approximately $9.5 million. This adjustment reflects the difference between the amount appropriated for the current year ($71.3 million) and the amount of work we anticipate that Congress will actually require ($80.8 million). While a shortfall in the Congressional Printing and Binding Appropriation for FY 2001 is projected to occur, we are not requesting funding to cover it in this appropriation request. We will make that request in the appropriation for FY 2003, because we will not know the exact amount of the shortfall until after FY 2001 closes out.
FY 2000 Shortfall. GPO's Congressional Printing and Binding Appropriation covers the costs of the information products and services required by Congress itself. GPO can charge against this appropriation only when Congress orders work from us. We charge what it costs us to perform the work. The amount of the Congressional Printing and Binding Appropriation is based on GPO's best estimates of how much work Congress is likely to order, according to prior experience and anticipated changes in costs and projected workload.
While GPO makes every effort to develop accurate estimates for the appropriation, sometimes the amount of work Congress orders varies from the estimate. The attached chart compares actual workload to appropriated amounts for the past 5 fiscal years. Variances between actual and appropriated funding occur for a variety of reasons: sometimes Congress operates on a reduced legislative schedule as the result of unanticipated circumstances, or sometimes there is an unforeseen increase in legislative printing requirements, as during the impeachment proceedings in early FY 1999.
Variances mean that GPO may end up providing more or less work and charging more or less against the appropriation than was provided, resulting in either a shortfall or unused funds. In cases where more work is ordered than is funded, legislative language under the Congressional Printing and Binding Appropriation authorizes us to charge our current year appropriation for
in FY 2000-for which FY 2000 funds have run out against FY 2001 funds. This appropriations language was recommended by the General Accounting Office to provide for the uninterrupted flow of work by GPO for Congress. However, if this shortfall situation were allowed to continue, we would eventually exhaust our current year appropriation in order to pay for prior year work. To prevent this, we seek a restoration of the funds equal to the shortfall through subsequent appropriations. In cases where Congress orders less work than we estimated, the funds lapse to the Treasury after remaining available for work charged to the specific year for which they were appropriated, for a period of five years.
Congress addressed the shortfall problem in part last year. In the Legislative Branch Appropriations Act for FY 2001, we were authorized to transfer available unused funds from up to five prior years to the current year to help offset any shortfall in our appropriations, with the approval of the Appropriations Committees. We applied for this approval in January 2001 but have not received a final answer. If the transfer is approved, we will be able to use excess funds from prior years to eliminate a substantial part of the shortfalls that have accumulated since FY 1996. However, the transfer will still leave $9.9 million in the shortfall for FY 2000 uncovered. As a result, we are seeking a restoration of that amount.
SALARIES AND EXPENSES APPROPRIATION
The programs covered by our request of $29.6 million for the Salaries and Expenses Appropriation of the Superintendent of Documents are as follows:
Mandatory pay increases and price level changes represent $835,000 of the total requested increase. Mandatory pay increases account for $439,000 of this amount. We are requesting $396,000 to cover price level changes at the anticipated rate of inflation of approximately 2 percent.
An increase of $644,000 over the current year base is requested for workload changes. We are requesting 8 additional staff under this appropriation: 6 in the Cataloging and Indexing program to provide necessary additional support in discovering and cataloging online Government information as well as modernizing the cataloging system, and 2 to work with the FDLP's Electronic Collection. We also need increased funds for equipment and services to enhance our data archiving capabilities and refresh essential legislative and regulatory online files. These new costs will be substantially offset by projected decreases in funding for depository and
dissemination, and by associated reductions in contractual mail transportation (currently performed through UPS Ground).
We are also requesting an increase of $267,000 in depreciation due to an increase in asset acquisitions, primarily automated information systems in support of the FDLP.
Transition to More Electronic Dissemination. The transition to a more electronic FDLP is continuing, as projected in the Study to Identify Measures Necessary for a Successful Transition to a More Electronic Federal Depository Library Program (June 1996) (as required by Congress in the Legislative Appropriations Act for FY 1996). Throughout FY 2000, staff of GPO's Library Programs Service (LPS), which manages the FDLP, searched the Web for online versions of Government publications for inclusion in the FDLP Electronic Collection. As a result, 53 percent of the 61,155 new FDLP titles made available during FY 2000 were disseminated electronically. In January 2000, GPO began its own electronic archive to assure permanent public access to those agency products disseminated solely online from agency Web sites. To date in FY 2001, 62 percent of the new titles available to the public through the FDLP have been online. Through its electronic information dissemination component, the FDLP now delivers more content to users than ever before.
Last year, the conferees on H.R. 4516, the Legislative Branch Appropriations Act for FY 2001, directed that "emphasis should be on streamlining the distribution of traditional copies of publications which may include providing online access and less expensive electronic formats." GPO responded to that direction immediately. In August 2000, the Superintendent of Documents wrote to the directors of all Federal depository libraries, advising them that online information would be the primary means of dissemination for the FDLP, and that most publications would be disseminated solely online. In October 2000, at the beginning of FY 2001, GPO amended over 100 agency term printing contracts to eliminate the requirement for paper copies for FDLP distribution. In January 2001, the Superintendent of Documents issued policy guidance (produced with library community input) to assist GPO staff in determining which products should be disseminated solely online.
GAO Study. The conferees on H.R. 4516 also directed the General Accounting Office (GAO) to conduct a "comprehensive study on the impact of providing documents to the public solely in electronic format," and to evaluate the feasibility of transferring the FDLP to the Library of Congress (LC). The study was published recently by the GAO as Information Dissemination: Electronic Dissemination of Government Publications (GAO-01-428). I provided comments on the draft report and transmitted copies of those comments to the Chairman and Members of this Subcommittee as well as other Members of the House and Senate.
As I stated in my comments, the day is coming when Federal Government information may be made available to the public solely in electronic format, but that day is not here yet nor is it likely to appear in the foreseeable future. Apart from the fact that large amounts of Federal information are not digitized, significant issues concerning security, permanence, authentication, equity, and cost remain to be resolved before the American people can put their faith in an electronic dissemination system that will serve as one of the foundations of their social contract
with the Government. Unfortunately, the draft report's attention to these and related issues is simply too cursory to resolve them.
As I also stated, LC is a unique national institution of singular importance to Congress and the public. As a sister legislative branch agency, GPO has a longstanding relationship with LC that we value very highly; LC is a selective depository library and by-law distribution recipient, and we work together on many issues of importance in the field of Government information dissemination. With all due respect, however, LC is not an appropriate home for the FDLP. Its mission and operations are inconsistent with a large-scale publications/information dissemination program. Transferring the FDLP there will increase costs, impose additional burdens on LC, and not result in any improvement in the public's ability to access Government information.
FY 2000 Financial Performance. GPO completed FY 2000 with an under-recovery of $115,000 on $807.5 million in total revenues, compared with an under-recovery of $5 million on $765 million for FY 1999. The under-recovery was financed by retained earnings and did not place GPO in an anti-deficiency position or require additional appropriations. During the year, an audit of GPO's financial reports and systems for FY 2000 was conducted by KPMG LLP, under contract with GAO. The audit resulted in a clean opinion for GPO.
Sales Program. The primary cause of the under-recovery was in our sales program, which is funded entirely by revenues earned on sales of publications. The free availability of publications on GPO Access and other Government web sites has contributed to reduced sales of printed products, although other factors, including reduced agency publishing and competition from other sales organizations, both public and private, have also contributed to reduced sales. The losses have been temporarily financed through our revolving fund and we are taking actions to address them. We have made price adjustments and have reduced costs where possible through staff attrition and related measures.
We have also developed a plan that includes closing several of GPO's retail bookstores nationwide. Most of these stores were established in the 1970's. Closing these stores will reduce costs, and we project we will be able to retain most store revenues through our online, fax, phone, and mail order operations. At the same time, localized access to Government information will be preserved through Federal depository libraries as well as free Internet availability.
We have taken steps to initiate closings of three stores: our McPherson Square store in Washington, DC (one of three in the metropolitan area) and our stores in Boston and San Francisco (both of whose leases are about to expire and which are experiencing staff declines). We have notified the respective House and Senate delegations for these stores about our plans, and we are prepared to seek final approval for the closures from the Joint Committee on Printing (JCP), which must approve all GPO facility-related changes under the terms of a 1982 JCP
Beyond these efforts, we may be compelled to take additional measures to reduce the sales program. An additional management tool is available to GPO through early-out retirement/separation incentive authority provided to us for three years by the Legislative Branch Appropriations Act for FY 1999. That authority is set to expire September 30, 2001, and we request an extension for an additional three years because significant employee downsizing action in the sales program may become necessary. GPO cannot effect any reduction-in-force without the prior approval of the JCP, pursuant its 1982 resolution.
Air Conditioning System. Our appropriations submission includes a request for $6 million for the revolving fund, to be available until expended, to cover the cost of necessary improvements to GPO's air conditioning and lighting systems.
Our air conditioning system is in critical need of replacement. An energy audit of GPO, concluded in July 2000 by the GAO at the request of the JCP, found that
GPO is in urgent need of upgrading its air conditioning system, which consists of
An independent contractor recommended by GAO, Aspen Systems Corporation, estimated the cost of a new system best suited to our needs to be approximately $4.4 million. GAO said we could save over $400,000 annually with the new, more energy efficient chillers. We are awaiting final approval for a new air conditioning system from the JCP, under the provisions of a 1987 JCP resolution requiring GPO to obtain prior approval for all capital improvements valued at more than $50,000. On the recommendation of GAO, we also plan to install more energyefficient lighting throughout GPO, at an estimated cost of approximately $1.6 million. New, more efficient lighting systems would yield annual savings of approximately $800,000.
We are seeking a direct appropriation to finance both of these projects. Without a direct appropriation, financing this extraordinary capital expense through the revolving fund either by direct purchase from retained earnings in the fund or by financing it through projected energy savings will require us to reimburse the fund through rate adjustments. As this expense is not directly related to the provision of printing and information product services, its impact on our rate structure will be detrimental to our ability to carry out our mission to provide cost-effective and economical products and services. The savings from these energy products will help keep down the costs that we must recover through our rates.
We are aware of finance programs that allow Federal agencies to undertake energy saving projects without having to pay for the projects up front. However, these programs are more expensive than direct purchase because agencies must pay a financing fee. GAO itself stated that "the final cost of the new chillers would be higher if a financing program was used instead of purchasing the chillers outright." Accordingly, we believe a direct appropriation is the best way