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CLOSING STATEMENT

Mr. Chairman, this concludes my presentation on the House of Representatives fiscal year 2001 budget and certain Joint Items disbursed by the Chief Administrative Officer. I have appreciated the opportunity to speak before you today. Any assistance that can be provided during the Fiscal Year 2001 budget deliberations will be delivered in an expeditious manner. I welcome any further requests for information and will provide answers at this time or as promptly as possible.

Thank you.

FY 2000 PAY ADJUSTMENTS

Mr. TAYLOR. Has the House Administration Committee made any adjustments in members' office allowances? If so, how much and what is the increase for this fiscal year?

Mr. EAGEN. The Committee on House Administration has not made any policy changes in the Members' Representational Allowances. They did advise an inflation adjustment to the MRA that will increase it by approximately 3.5 percent or $14 million.

Mr. TAYLOR. How about salaries of the officers' staffs? What adjustments have been made in the schedules there?

Mr. EAGEN. In this case, Mr. Chairman, the Committee on House Administration approved a 4.94 percent salary increase for the employees of the officers of the House and the Inspector General. The impact on the fiscal year 2001 budget we are living under is $192,000. The impact on the fiscal year 2001 budget that we are considering today is $275,000.

CAO BUDGET INCREASE EXPLAINED

Mr. TAYLOR. The CAO budget is up by 6.9 million, about 12 percent. That is a large increase. Why is your budget up so much? Mr. EAGEN. Thank you, Mr. Chairman. It is a 12 percent increase in comparison to fiscal year 2001. However, the CAO budget has traditionally been a budget that has a series of peaks and valleys. The peaks are caused in the odd number years, in this case 2001, by two special conditions represented in the CAO budget.

First of all, we are the budget that carries the transition costs of the House of Representatives, meaning the office moves and taking care of all of the expenses that relate to the new Members coming and this fiscal year carries that congressional transition.

Secondly, the CAO budget contains the net expenses of equipment budget. This is the budget that pays for the computers, Xerox machines, fax machines, equipment of Member offices. The way that system works is that we buy the equipment for the Members and then they have the option of paying for it outright or through a 3-year plan. Should they use the 3-year plan, obviously we are carrying that initial expense in our budget, and then we would be repaid. So we operate in a deficit one year and in a surplus the next year. The deficit is carried through the net expenses of equip

ment account.

If you separate out those two items from the CAO budget, you would find that we have actually a 3-percent increase in the budget compared to last year. And if you compare this budget to the more comparable year, which is 1999, we are actually on a 2-percent increase over 1999.

CAO BUDGET REQUEST COMPARED TO PRIOR BUDGETS

Mr. TAYLOR. This is going to be a tighter budget year than we might hope, and the peaks and valleys might turn into a plane. And if that is the case, we would like for you to list your priorities so we can go down those priorities. The House computers' budget is $27 million. How does that budget compare with recent budgets? Mr. EAGEN. It is a comparable budget, Mr. Chairman. There has

significant. The first that you will note in the submissions provided to the committee is that reimbursements, which once were part of the House budget, are now going away. Over the last several years, the House has been moving from a situation where we hosted several outside agencies' computer operations and then received reimbursement costs for those operations. We are now down to a point where we expect only to receive reimbursement for a hundred thousand dollars, where compared to a few years ago we were receiving reimbursements of about $3 million. That is the significant change in the budget from previous years.

[Questions from Mr. Hoyer and responses follow:]

Question. In previous years, House Information Resources (HIR) employed at least 40 technical service representatives (TSR's) to assist Member offices with their computer needs. Today HIR has only 26 TSR's, meaning that each TSR must service more Member offices. Why has the number of TSR's been allowed to drop by over one-third? What plans do you have, if any, to ensure that the reduction in TSR's does not impair the operation of Member offices? What would be the additional cost in fiscal 2001 to hire a sufficient number of TSR's?

Response. In December 1997, a strategic assessment prepared by Peat Marwick LLP recommended that a Call Center be established as the first tier technical support for all Member Offices, Committees, Leadership and Support offices. As a result, a Call Center was established and staffed with twelve TSR positions. In the first year of existence the Call Center resolved 20,729 calls without having to dispatch a TSR. The efficiency gained by quick resolution to Member and Committee office technical problems allows the twenty-seven second tier TSRS to respond to Member and Committee office problems requiring on-site resolution, and to consult with offices in the purchase of new equipment, and House System Integrator issues. The table below illustrates the five-year history of TSR's used in the CAO organization.

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The salary for an entry level TSR is $36,916. The average senior TSR salary is $65,838. Hiring six additional TSR's to support the increase in technical support services required by Members and House offices would cost approximately an additional $350,000.

We continuously analyze the needs for Members and Committees with respect to technical support representatives. Should we find the level of support is not meeting Members and Committee needs we will re-evaluate the TSR staffing.

Question. Further to my last question, it has been suggested that House offices are generally having a difficult time retaining staff with key technological expertise. Are you having this difficulty, and if so, what steps are you taking to assure that you maintain the technological expertise required to serve the Members and the House?

Response. Yes, the CAO does experience the same challenge that all government and industry has in retaining technical staff. Technical expertise is highly sought after by private and public organizations. Some of the methods that have been implemented to promote continuous improvement of retention, and hiring technically qualified personnel are:

(a) The CAO has realigned job descriptions and salary levels of key CAO information technology positions to ensure that the House can compete with other Government and private industry IT firms in the Washington DC area.

(b) The CAO Awards program was instituted to recognize individuals who consistently demonstrate exceptional performance.

(c) The management team for HIR is focused on creating a work environment that

(d) Provide training for technical staff to keep abreast with continuing changes in technology.

(e) A one-time, 1% "IT factor" increase was made to the HIR FY2000 personnel budget to help in our ability to compete with the IT industry.

(f) The Office of the CAO has also begun researching the concept of pay banding similar to some select Federal Agencies. This may provide managers with additional management flexibility and may also help the CÃO maintain a level of pay for technical positions that is more comparable to other government agencies.

The CAO continues to monitor this retention issue closely and will make recommendations to change the current process as appropriate.

Question. You are requesting $280,000 for HIR to review the Correspondence Management Systems marketed to Members. At my staff's suggestion, you are now reviewing a proposal by the Gartner group to examine technology. When will that review be complete? Will the new Members of the 107th Congress have the benefit of this work, to help them optimize their computer equipment purchases?

Response. The Gartner Group is partnering with the Congressional Management Foundation to provide a consulting service for Congressional Offices in the selection of personal computers and correspondence management systems. The project was requested jointly by the Committee on House Administration and the Legislative appropriations subcommittee. The statement of work is currently being revised and is due February 21, 2000. Once the study begins, it is estimated to take six to eight weeks to complete. It is anticipated that new Members of the 107th Congress will have the benefit of this service, as the statement of work provides for written reports that can be distributed widely as well as briefings for Members and staff.

Question. Some CMS vendors have recently been suspended from their ability to market products to Members. What assistance can the CAO provide to assure that office systems marketed to Members will actually perform as represented, and that Members will receive full value for their office expenditures on such systems?

Response. All new Correspondence Management Systems will be evaluated to ensure that systems actually perform according to the marketed functionality. The HIR test lab is being configured to begin testing in April 2000. The evaluation scripts have been prepared and will be exercised using the Metamor CMS package in March 2000. The test team will include not only HIR technical staff but also actual users from Members' offices. A pilot of this approach has already been conducted in late 1999 and was found to be effective.

Question. In the most recent financial audit of the House, the auditors identified as a weakness that "the House lacked sufficient information with which to manage and maintain accountability over its property and equipment.” What have you done to address this weakness?

Response. The CAO has taken the following steps to address this weakness: Beginning in 1997, Office Systems Management (OSM) began performing physical inventories of all House offices during a two year legislative cycle. Prior to this time OSM would provide offices with a copy of their inventory and would request that the office verify the information. Prior to 1997 OSM would only perform physical inventories of departing Member offices or changes of Chairs and Leadership offices. Media and Support Services (MSS) and House Information Resources (HIR) completed by December 31, 1998, an inventory of all assets meeting the Office of the Chief Administrative Officer's (CAO) new capitalization threshold that became effective in 1998. In addition, OSM completed by December 31, 1998, a physical inventory of all capital items acquired under the previous capitalization threshold, as well as all accountable property located in Washington, D.C. The General Services Administration (GSA) performed the physical inventories of district offices. (During the first cycle of physical inventories of non-capital assets, GSA completed two thirds of all district inventories) The Finance Office reviewed and analyzed on a monthly basis all 1998 acquisitions to ensure items were correctly classified as capital or non-capital items and assigned the proper Budget Object Classifications (BOCs). MSS and HIR will continue to ensure property and lease transactions are assigned the proper Budget Object Class codes and capitalize assets as of the date the asset is placed in service. This review process by MSS and HIR will continue until this process is moved to the new Fixed Asset Inventory Management System.

The Office of Finance also continues to analyze monthly equipment and lease transactions in the Federal Financial System to ensure correct BOC and general ledger usage.

The contract award for a new fixed asset management system was signed on August 10, 1998, by the CAO. Included in the contract were requirements that ensured we would be able to track each of the items outlined in audit recommendations. The new Fixed Assets and Inventory Management system (FAIMS) will be capable of

cost/value information, asset description, acquisition date, useful life, depreciation method, depreciation amount, and location. Summary information on the acquisition cost and accumulated depreciation of assets and inventory acquired by House organizations shall be maintained in the Federal Financial System (FFS), the House's accounting system.

Additionally, on October 7, 1998 the Committee on House Administration approved a proposal to revise regulations governing what equipment is tracked on an inventory. This change was made in accordance with private industry and executive branch best practices, as well the recommendation of the House Inspector General. Computer and non-computer equipment that has an initial purchase price of $500.00 or less is not placed on Member or committee office inventories. Internal computer components are not placed on inventories. This change reduces the inventories of Members and Committee by as much as two-thirds. In addition, members will no longer be personally liable for loss of equipment with a value of $500 or less. Question. Further to the previous question, in that recent audit, the auditors identified as a weakness that "poor controls over computers and data exposed the House to the risk of unauthorized transactions, incorrect data, misuse of assets, and loss of data and programs.” What have you done to address this reported weakness?

Response. In prior audits, a number of internal control weaknesses related to the House's Financial Management Systems were identified. Actions have been initiated to address the recommendations related to this weakness. As a result, HIR continues to aggressively address these weaknesses and develop/implement initiatives, such as HIR's reorganization plan, Business Continuity and Disaster Recovery plans, and mainframe access control processes to improve the House's information systems processing environment. These access controls are monitored by the HIR Information Systems Security Office to protect the data and networks of the House. In 1999, the CAO purchased and implemented a Network Intrusion Detection system to further defend the House network from attacks. In 1999, HIR began an aggressive Security Awareness training program for all House staff. In the nineteen sessions held during 1999, over 300 staff received the latest information on the protection of Member office data and records. This is now an ongoing training program offered by HIR training.

Question. Further, that same audit found as a weakness that "the House did not properly track the goods and services it ordered, made erroneous duplicate payments, and paid vendors late." What is the status of efforts to correct these problems, as the House is experiencing with respect to the Skytel matter?

Response. The House has significantly improved its discipline to ensure that goods and services that have been ordered are received and accepted. Many major vendors of services who have recurring invoices have been set up as automatic payments. The SkyTel billing dispute has been resolved, and payments are current. To prevent a recurrence, the House contract with Skytel has been modified to more clearly delineate the process for ordering, delivering and paying for these services. The CHA approved a proposal on February 9, 2000 to streamline the acquisition and payment of pagers and related services. Effective April 3, 2000, House offices will begin ordering and paying for pagers and related services directly from vendors. This will allow offices more flexibility in paging service. It has become impractical to require House offices to continue using the current central ordering and payment process through Office Systems Management (OSM) for this service. This is due, in part, to the increase in the number of pagers used by House offices, the wide variety of service plans available and the easy ability to upgrade pager units or service levels with minimal effort. House offices will now be able to purchase or lease pagers and related services directly from vendors and then voucher the purchase costs and monthly service fees directly to the Office of Finance.

Further, we have taken a more proactive approach to resolving such billing discrepancies long before they become major issues. There have been several processing changes made to reduce the incidence of duplicate payments. The first includes a software fix that will prevent further processing of a payment that appears to be a duplicate based on established parameters. A supervisory override will be allowed, but only when research identifies the payment as non-duplicative and changes have been made in the key descriptors to prevent its being spotted as a potential duplicate in the future. Another change includes new conventions for assigning an invoice number and invoice date when these elements are not present on the documents forwarded by House offices. This technique will be most helpful for travel and subscriptions, two areas with relatively high duplicate payments. The third change includes continued duplicate vendor record cleanup and maintenance. This will eliminate the chance that duplicate payments are undetected because they are paid to different vendor numbers. The fourth change involves using software to prevent the use of

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