oversight

Joint Financial Management Improvement Program, Annual Report for 1976

Published by the Government Accountability Office on 1977-03-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

JOINT FIN~NCl~L
M~N~GEMENT

IMPROVEMENT
PROGR~M




~NNU~L     REPORT
FOR 1976



                    L       A
                    ~-
                    G
                    E
                    MEN T
                                OMB
                            IMPROVEMENT   PROGRAM
               JOINT FINANCIAL MANAGEMENT
                  IMPROVEMENT PROGRAM

                      666 ELEVENTH STREET, N.W.
                              SUITE 705
                        WASHINGTON, D.C. 20001
                       TELEPHONE (202) 376-5415




                     F 0 R E W0 R D


       The Joint Financial Management Improvement Program (JFMIP)
is a cooperative effort of the Department of the Treasury, the
Off ice of Management and Budget, the General Accounting Office
and the Civil Service Commission, working with each other
and with other agencies to coordinate and improve financial
management policies and practices throughout the government.

      In this report we have summarized the significant
improvements achieved in the financial management arena with
the support and encouragement of JFMIP. The report is not
limited to direct JFMIP projects.  It includes activities
where leadership is taken by one of the central agencies but
where there is current or historical JFMIP involvement. The
report also includes examples of financial management improve-
ments reported by many agencies.

      The appendixes list the key officials of JFMIP, the JFMIP
agency liaison representatives and the publications issued by
JFMIP during the past three years.

      I hope that the reporting of past accomplishments will
stimulate further improvements and that readers of this
report may find ideas from the experiences of others that
will be useful in their own operations. Anyone interested in
learning more about some of the activities discussed in this
report may contact the JFMIP staff or the appropriate agency
liaison representatives.




                                        ~~.~
                                         c.
                                        Donald     Kull
                                        Executive Director
                                        March 1977
                            CONTENTS


                                                    PAGE"

Introduction                                          1

Review of Accounting Systems                          2

Financial Management Information Systems              3

Financial Reporting                                   4

Budget Developments                                   4

Annual Financial Management Conference                5

Intergovernmental Financial Management Conference     5

Audit Improvement Project                             7

Cash Management                                       8

Agency Assistance                                   15

Education and Training                              16

Productivity Program                                 17
Examples of Agency Improvements                      22

Appendix A--Key Officials of JFMIP                  30

Appendix B--JFMIP Agency Liaison Representatives    31
Appendix C--JFMIP Publications                      35
                   JOINT FINANCIAL MANAGEMENT
                       IMPROVEMENT PROGRAM

                    ANNUAL REPORT FOR 1976


INTRODUCTION

     In 1948, the Secretary of the Treasury, the Director
of the Bureau of the Budget and the Comptroller General
of the United States initiated the Joint Financial Manage-
ment Improvement Program (JFMIP) as a cooperative venture
to improve accounting in the Federal Government. The Budget
and Accounting Procedures Act of 1950 gave the program
official status, recognizing all three agencies' statutory
responsibility in this area. The Chairman of the Civil
Service Commission was added to the program by agreement
in 1966.

     Each JFMIP Principal has designated a representative
to serve on a Steering· Committee which is responsible for
the general direction of JFMIP. The Executive Director,
under the general guidance of the Steering Committee, is
responsible for developing and directing programs and
projects.  The head of each operating agency has designated
a liaison officer to serve as a point of contact on matters
related to JFMIP. 1

     The overall objective of JFMIP is to improve financial
management practices and policies throughout the Federal
Government so that they will most effectively serve program
and general management purposes and achieve maximum
efficiency and effectiveness in operation.

     JFMIP carries out a variety of activities aimed at
achieving this objective.  It sponsors conferences, work-
shops, and seminars.  It publishes a periodic JFMIP
bulletin and various other documents to disseminate
information on progressive financial management practices.
It reviews the management improvement efforts of the
operating agencies and coordinates financial activities
of the central agencies. JFMIP sponsors or conducts
research or other studies on financial management matters
of general interest and assists operating agencies in
dealing with specific financial management problems,
particularly, those that have relevance to other programs
and agencies.

1
    See APPENDIXES A and B.
      A number of projects are carried out through
interagency project teams organized by JFMIP. Such teams
may include staff members from operating agencies as well
as the central agencies. Some financial management
problems may be dealt with by referral to a source of
expertise, some by assignment to one of the central
agencies and some by informal consultation. JFMIP serves
as a catalyst to stimulate action by whatever approach
suits the circumstances. Achievement of financial manage-
ment improvements depends heavily on the interest and
active participation of personnel from the central agencies
and operating agencies. JFMIP plays a key role in moblizing
resources and coordinating cooperative efforts.

      The basic purposes of this report are to summarize the
significant improvements achieved in the financial manage-
ment arena with the support and encouratement of JFMIP and
to serve as a medium of communication among financial
managers for accomplishing further improvements. The items
r~ported in the major parts of this report are not limited
to current JFMIP projects. They include some activities
undertaken primarily by one of the central agencies which
have current or historical JFMIP involvement and significant
interagency implications. The final section includes
examples of financial management improvements reported by
many agencies.

REVIEW OF ACCOUNTING SYSTEMS

      From its very beginning, JFMIP has had a strong interest
in the development of good accounting systems for the many
agencies of the Federal Government. The Financial and
General Management Studies Division of the General Accounting
Off ice provides advice and assistance to agencies in the
development of their systems and it also carries out the
GAO responsibility for evaluating and approving agency
accounting systems.

     GAO has reported that, as of December 31, 1976,
principles and standards had been approved for 98 percent
of the accounting systems subject to approval. Designs
had been approved for 52 percent of the systems.

     Of the 177 accounting systems with approved designs,
26 percent bear approval dates from 1950 through 1968,
21 percent bear approval dates for the 4-year period 1969
through 1972, and 53 percent bear approval dates for the
last 4 years, 1973 through 1976.




                               -2-
     The Department of Defense accelerated its efforts to
get its accounting systems approved. During the calendar
year 23 of its system designs were approved by the
General Accounting Office.

     The table below summarized the status of accounting
systems approval as of 'December 31, 1976.

             STATUS OF ACCOUNTING SYSTEMS APPROVAL
                    AS OF DECEMBER 31, 1976

             Systems    Principles and Standards       Designs
             Subject to             Percent                  Percent
             Approval    Approved Completed      Approved Completed
Civil          172         167         97          119         69

Defense        165        165         100             58      35

DC Govern-       1          1         100              0        0
    ment


               338        333          98            177      52


FINANCIAL MANAGEMENT
INFORMATION SYSTEMS

     To an increasing extent managers in Federal agencies
are making use of computer-based financial and general
management information systems for help in planning,
executing and evaluating programs. Many agencies find it
both necessary and desirable to contract with accounting,
information sciences and management consulting firms for
assistance in designing, developing and implementing such
systems.  Some of these contracting efforts have been quite
successful while others have encountered serious problems.

     In carrying out its responsibilities for reviewing
and approving agency accounting systems, the General
Accounting Office has observed a number of problems common
to many agencies but usually not systematically documented.
GAO has interviewed people in many Federal agencies,
accounting and management firms and professional organiza-
tions to collect information on the problems and the lessons.
learned. The results were compiled in a booklet entitled,
"Lessons Learned About Acquiring Financial Management and
Other Information Systems" which was published by GAO in
August 1976. This booklet has been widely distributed and
has been recognized as a very useful document.


                                -3-
FINANCIAL REPORTING

     Early in 1976 the Department of the Treasury began a
major effort to develop a set of consolidated financial state-
ments on an accrual basis for the Federal Government. These
statements will not replace existing reports on appropria-
tions, obligations or cash transactions and will not involve
any change in the Federal budget and appropriation process.

     The Treasury Department has been assisted in this effort
by the General Accounting Off ice and by a distinguished group
of accountants, economists and business leaders serving on an
advisory committee. This advisory committee has held
several meetings and has been deeply involved in studying
many complex issues.

     Late in 1976 the Treasury Department issued a prototype
report, using figures for FY 1975. This prototype was
issued without waiting for resolution of many complicated
issues being studied by the staff and the advisory committee
in order to expose the basic concept to the general public.
Future reports will be influenced by the comments received
from the public as well as by further analysis by the staff
and the advisory committee.

     A second prototype report, using FY 1976 data, is planned
for mid-1977. The target for publication of the first
official report, covering FY 1977, is early 1978. It is
expected that the form and content of the report will continue
to evolve during the next few years.

BUDGET DEVELOPMENTS

     The first full year's operation under the Budget and
Impoundment Control Act of 1974 has now been completed.
While this Act deals primarily with the congressional budget
process, it has had significant effects on Executive Branch
agencies.

     To implement some of the proYisions of this Act, the
Office of Management and Budget has revised its Circular A-3~
Instructions on Budget Execution. The principle changes
included revision to standard budget execution forms,
modification of apportionment and reappo~tionment procedures,
and refinements of definitions and budget concepts.

     The Budget and Impoundment Control Act of 1974 has
given added impetus to cooperative efforts to develop
improved standard budget classifications which recognize



                            -4-
the growing legislative and executive needs for meaningful
financial information. GAO has the lead responsibility in
this area but works closely with OMB, the Treasury Depart-
ment, the Congressional Budge~ Office and congressional
committees.

ANNUAL FINANCIAL MANAGEMENT CONFERENCE

     For several years JFMIP has sponsored an annual one-
day Fin.ancial Management Conference. The purpose of this
conference is to stimulate the development and widespread
use of good financial management practices.

     At the Fifth Financial Management Conference held on
February 2, 19 76, the theme was "Communications in
Financial Management." One of the highlights of the
conference was an address by Representative Frank Horton
on the work of the Commission on Federal Paperwork. At
this conference the Financial Management Improvement Awards
for 1975 were presented to Terence E. Mcclary, Assistant
Secretary of Defense (Comptroller) and John E. Dever, City
Manager of the City of Sunnyvale, California.

     The Sixth Financial Management Conference was held in
Washington on February 7, 1977. Speakers from Federal,
State and local governments addressed the 460 conference
participants on the theme of "New Challenges for Financial
Managers." Afternoon workshops provided an opportunity for
indepth consideration of zero-based budgeting, intergovern-
mental auditing, cash management and consolidated Federal
financial statements.

     The Financial Management Improvement Awards for 1976
were presented to Alice M. Rivlin, Director, Congressional
Budget Office, and Joseph T. Davis, Assistant Commissioner
(Administration), Internal Revenue Service.
INTERGOVERNMENTAL FINANCIAL
MANAGEMENT CONFERENCE

     JFMIP joined with several agencies and a number of
organizations representing State and local government
financial managers in sponsoring an Intergovernmental
Financial Management Conference in 1976. About 175
managers from Federal, State, and local governments in
25 States met in St. Louis on September 23 and 24 to
exchange views on several financial management issues
of current concern.



                              -5-
     The keynote address was presented by Harrison J. Goldin,
Comptroller of New York City. He brought the group up-to-
date on the efforts underway to deal with New York's
complicated fiscal problems. Of particular interest is an
intensive cooperative effort to develop an integrated
financial management system and have it in operation by
July 1977.

     Mr. Goldin noted that many other cities are facing
problems similar to those of New York and called for a
combination of Federal action, State oversight, and local
fiscal reform. His specific proposals included more
equitable Federal revenue sharing formulas, increased
Federal funding of welfare and Medicaid costs, and Federal
loan guarantees to State agencies on behalf of cities denied
access to the public credit markets, provided such cities
adhere to sound fiscal practices.

     The conference was also addressed in plenary session by
David Mosso, Fiscal Assistant Secretary, U.S. Department
of the Treasury; Richard Heath, Director of Finance and
Administration, Arkansas; Jack Urie, Director of Finance,
Kansas City, Missouri; and Wayne Anderson, Executive
Director, Advisory Commission on Intergovernmental Relations.
Mr. Anderson addressed a luncheon meeting on "Fiscal
Accountability at the Local Government Level."

     A major portion of the conference was devoted to six
workshops led by outstanding experts in several fields
with full opportunity for questions and comments by all
participants.

     The conference was climaxed by a luncheon address by
Elmer B. Staats, Comptroller General of the United States.
Speaking on "Prospects for Resolution of Intergovernmental
Management Problems," he called attention to some of the
major problem areas and the steps that have been taken to
deal with them. He noted that some degree of intergovern-
mental tension is inevitable and probably healthy. Mr. Staats
stressed the importance of creating and maintaining a
strong high-level mechanism at the Federal level to deal
with intergovernmental issues, enforce agency compliance
with Government-wide policy, and resolve interagency
conflicts. He called also for strengthening financial
management systems and improving productivity. He said
that policy making officials from all levels of government
must maintain a regular dialogue.




                            -6-
AUDIT IMPROVEMENT PROJECT

     For a number of years it has been Federal policy to
rely heavily on use of State-and other non-federal
auditors for audit of federally assisted programs carried
out by State and local governments. There have, however,
been difficulties in obtaining full implementation of the
established policies. A number of special studies and
reports have identified major problem areas.  These include
the following:

     "Increased Intergovernmental Cooperation Needed
      for More Effective, Less Costly Auditing of
      Government Programs," GAO Report - B-176544,
      dated April 8, 1974.

     "Problems in Reimbursing State Auditors for
      Audits of Federally Assisted Programs,"
      GAO Report - FGMSD-75-22, dated June 25, 1975.

     "A Report on Federal Government Audits: Abuses
      and What Corrections Are Needed," Department
      of the Treasury - November 1975.

     "Initiatives for Improving Governmental Audits"
      Joint Conference Report, Intergovernmental
      Audit Forum - January 14-16, 1976.

     "State Audits of Federally Assisted Programs,"
      a position paper dated September 1, 1976,
      adopted by the Commission on Federal Paperwork.

     The National Governors Conference, the National
Association of State Budget Officers, and various States
have also issued resolutions or reports on this subject.

     Late in 1976 JFMIP was asked by the Secretary of the
Treasury to undertake a project aimed at achieving
cooperative action by all levels of government in generating
appropriate audit improvements at an early date. By the
end of the year a project plan had been developed for
initiation of the project in January 1977.

     The number and complexity of Federal programs carried
out through State and local governments have increased
substantially. Many of the programs are covered by
legislation which sets up specific requirements, policies
on compliance procedures, audits, etc. The different
Federal departments and agencies have their own policies
and procedures which take into account legislative require-
ments for their programs.

                            -7-
     There is also a great diversity of policies and
practices among the 50 States and the many units of
local government.  The intergovernmental audit process
involves not only auditors but also program and budget
officials at all levels of government.

     A number of problems have been identified in the areas
of overlapping or duplication of audit responsibilities,
independence of auditors, proper disclosure and dissemina-
tion of audit results and funding arrangements.

     Rather than addressing all of the~e problems in
detail the JFMIP project will be focused on developing
specific recommendations and plans for achieving significant
improvements in two areas;

     1.   Avoidance of unnecessary audit duplication
          and concentration of audit resources on
          highest priority projects.

     2.   Funding arrangements for audits of federally
          assisted programs of State and local governments.

     The project will be carried out in close cooperation
with the National Intergovernmental Audit Forum and the
Regional Forums which have already given considerable
attention to this matter. Maximum use will be made of
work previously done or currently being undertaken by the
National and Regional Forums. The forums may be asked to
undertake special tasks which will contribute to this
project.  The views of State and local officials and their
organizations will be obtained in a variety of ways.
Several staff members have been assigned to JFMIP to under-
take this project.

CASH MANAGEMENT

     The work of an interagency Money Management Task Force
organized by JFMIP was summarizee in a booklet, Money
Management Study, issued in 1976. This study, demonstrated
clearly the potential for improved management and substantial
savings through more attention to cash management by operating
agencies of the Federal Government.  The following general
guidelines were developed during the study in the hope
that they would be useful to agencies in developing their
own policies and procedures and improving their cash
management 9ractices.




                            -8-
Guidelines for Disbursements

      1.   Each agency should have a carefully
           developed disbursement plan as a part
           of its forecast of outlays, which should
           be consistent with the agency's objectives,
           strategies, program plans and budget.

      2.   A payment schedule and control system
           should be established.

      3.   Procedures should be established for
           evaluating economic factors, including
           the time value of money, in establishing
           payment schedules. Unless there are
           significant programmatic or policy factors,
           payments should generally pe made at the
           time they are due.

      4.   Except for very large purchases where special
           analyses might be warranted, it is usually
           desirable to take cash discounts.

      5.   Procedures should be reviewed to assure that
           payments to small vendors and for occasional
           purchases are not delayed beyond the due dates.

      6.   Fuller use should be made of letters of credit
           and other established procedures for managing
           the timing of payments for government programs.

      7.   Procedures should be established for regular
           comparison of actual with planned disbursements.

      8.   The causes and impact of significant variances
           from disbursement plans should be evaluated
           and plans adjusted when necessary.

Guidelines for Collections

      1.   Agencies with significant amounts of receipts
           should have a collections plan which is a
           part of overall forecasts and consistent
           with the agency's objectives, strategies,
           program plans and budget.




                               -9-
      2.   Collection schedules and control systems
           for billing and cash processing should be
           established.

      3.   Economic factors, including the time value
           of money, should be considered in develop-
           ment of billing cycles and collection
           procedures.  The importance of prompt
           collection and deposit of cash should be
           recognized.

      4.   Procedures should be established for regular
           comparison of actual with planned collections.

      5.   The causes and impact of significant variances
           from planned collections should be evaluated
           and plans adjusted when necessary.

Guidelines for Forecasting

      1.   Financial forecasts should be an integral part
           of the budget process.

      2.   The forecasting system should be designed to
           incorporate information which is consistent
           with the agency's objectives, strategies and
           program plans.

      3.   All assumptions used in developing the forecasts
           should be selected objectively on the basis of
           available information and the assumptions should
           be documented.

     4.    Forecasts should incorporate the best and most
           recent information available within the limits
           of practicality.

     5.    The forecasting system and the forecasts should
           be developed objectively by qualified personnel.

     6.    Forecasts should provide management with a most
           likely outcome, supplemented when practicable
           with information on error potential or ranges
           of estimates.

     7.    The forecasting system should have a capability
           for evaluating the sensitivity of the projected
           outcome to variations in the assumptions.



                             -10-
      8.   Forecasts should be subjected to regular
           and timely reviews in the light of actual
           experience and revised assumptions.

      9.   Appropriate officials of the agency, the
           Treasury Department and the Off ice of
           Management and Budget should be notified
           on a timely basis of significant variations
           from forecasts and planned changes.

      Many of the points covered in these guidelines were
incorporated in Treasury Department Circular 1084
"Regulations Governing Cash Management Practices Within
The Federal Government" dated December 29, 1976. The
purpose of this Circular was to broaden Treasury's
overview of the cash management practices of Federal
agencies and establish requirements for agencies which
will maximize the amount of cash available to the
Treasury and minimize borrowing needs. The regulations
apply to all government agencies whose financial trans-
actions affect the cash account of the Treasury. The
Circular deals with such areas as: billings and collec
tions, deposits, disbursements, cash advances under grant
and other programs and cash held outside the Treasury.
This Circular requires positive action by all agencies
in design of their payment and collection systems. More
detailed guidelines will be furnished through the Treasury
Fiscal Requirements Manual.

       The Office of Management and Budget is giving increased
attention to the monitoring of Federal outlays. Requirements
for agencies are set forth in OMB Circular A-112 dated
September 1, 1976.

      One of the areas given considerable attention in the
Joint Financial ~anagement Improvement Program's Money
Management Study was the timing for payment of bills
incurred by operating agencies. The General Accounting
Office is making a more detailed analysis of this matter.
Primary results of this study indicate that there are
numerous instances where payments are being made either
too early or too late.

Letters of Credit

      One of the methods of reducing requirements for
Treasury cash is the letter of credit. As a result of a
JFMIP study in 1963, the letter of credit method of financing
Federal grant programs was introduced by the Treasury Department



                            -11-
in 1964. The letter of credit method enables a recipient
organization to obtain Federal cash quickly when needed,
within an established limit.

       The letter of credit method is now used by almost
every· Federal agency administering Federal grant programs.
Disbursements under letters of credit have gone from
$1.5 billion in the mid 1960s to over $63 billion in FY 1976.
As of September 30, 1976, there were about 8,500 active
letters of credit.   It has been conservatively estimated
that daily availability of funds to the Treasury has
increased by $2-3 billion through use of letters of credit
instead of making monthly Treasury check advances to
grantee organizations.
      Continuing efforts are being made by the Treasury
De?artment and other agencies to increase the efficiency
of the letter of credit method and reduce even further
the amount of excess cash held by recipient organizations.
One technique being used extensively within the Department
of Health, Education and Welfare is the single letier of
credit.  In this system numerous letters of credit issued
by different organizations within the same Federal depart-
ment to State agencies, local aovernment agencies or other
recipient institutions are replaced by one centrally
administered single letter of credit issued to a central
organization within the recipient institution.

      Additional techniques for improvement of letters of
credit include the delay of drawdown techniques, the
checks paid technique, and the Letter of Credit - Treasury
Regional Disbursing Office System. A proposed revision
of Treasury Department Circular 1075 mandating the
Letter of Credit - Treasury RDO System--for many organiza-
tions was published in the Federal REgister on November 24, 1976.

Electronic Fund Transfer Systems

      Substantial progress has been made in expanding the
use of direct deposit and electrDnic fund transfer systems
in the Federal Government.

      Public Law 92-366, enacted August 7, 1972, authorized
paying Federal recurring benefit recipients by credit to
their accounts at financial organizations. This program
is optional for the recipient and the financial organization.




                           -12-
      When the program was initially implemented, checks were
drawn and directed to financial organizations for credit to
the accounts of those beneficiaries ·.vho elected to participate
in the program. Between February 1976 and December 1976,
Treasury converted to an electronic funds transfer system,
whereby payments are directed to financial organizations
through the Federal Reserve Banks. The EFT system eliminates
the issuance of .checks for participating recipients.

      In February 1977, the Treasury Department transferred
5.5 million direct deposit payments, totaling over $1.2 billion.
Promotion efforts are underway to encourage more of the
44 million eligible benefit payment recipients to participate
in this voluntary program. Treasury expects to make 75
million payments by EFT in FY 1977. This is expected to grow
to 113 million in FY 1978 and 156 million in FY 1979. It is
anticipated that 40 percent of the benefit payments will be
made by EFT by the close of FY 1980 with savings of over
$25 million annually.

      Primary benefits of the program are:

      --Improvement in service to Government beneficiaries
         through:

        - Virtual elimination of nonreceipt, delays
          in delivery, theft and check loss by
          recipient.

        - Availability of funds for recipients
          who travel.

          Elimination of inconvenience in depositing
          and cashing checks.

      --Ability to effectively handle anticipated normal
        increases in payment volume.

      --Reduction in Government operating costs in the
        payment mechanism.

      The Social Security benefit, Railroad Retirement and
Civil Service annuity payments are now on the EFT system.
Veterans compensation and pension payments will be converted
to the EFT system by October 1977. The conversion of Federal
salary payments to the EFT system will begin in 1977.

      The Air Force continues to lead the way among agencies
doing their own disbursing. Currently 60 percent of .Air Force
civilians and 61 percent of military active duty personnel


                           -13-
have their pay sent to financial organizations. As of
October 30, 1976, EFTS was being used for payroll pay-
ments to over 320,000 Air Force personnel using over 9,000
banks and other financial organizations.    Payments to
most overseas locations are made by .A.UTODIN, magnetic tape
and courier arrangements.

      Treasury Department Circular No. 1083, "Regulations
Governing the Utilization of the U.S. Treasury Electronic
Funds Transfer System," was issued June 21, 1976. It
encourages use of EFTS and establishes nolicies and
procedures.

      In Se9tember 1976, t..~e Treasury Financial Communication
System became operational.    It uses EFTS for both incoming
deposits and outgoing payments, using interactive computer
telecommunications.  Since that date, approximately $30 billion
of deposits and payments involving 20,000 transactions have
been processed.

      The objectives set for this system were:

      --Cash Mobilization

        - Accelerating collections,

        - Controlling the scheduling and timing of
          disbursements, and

        - Providing more timely data on available
          resources

      --Improving the Treasury's central reporting and
         auditing control,

      --Reducing paperwork and related operating costs,
        and

      --Creation of a telecommunications network for
        financial data flowing into the Treasury

      To accomplish these goals and objectives, the Treasury
System is linked through the New York Federal Reserve Bank
into the Federal Reserve Communication.s System or "Fedwire."

      The FEDWIRE System links the 12 Federal Reserve District
Banks, the Board of Governors of the Federal Reserve System,
and the Treasury Administrative Communication .system through
the Federal Reserve's Culpeper Switching System in Culpeper,
Virginia.


                             -14-
       One of the workshops at th,e Financial Management
Conference in Fel;:>ru~;l'.'y 1~_76 was .on;1electronic fun.d transfer
~stems.    At year: end plans were being made for a one-day
seminar on EFTS to b.e jo intly spons,ored by JF.MIP and the
                                    1
.A.ssociation of Government Accountants 'in March 1977.

AGENC:Y ASSIS.TANCE
       During 1976 JFM-IP '~~mpl,eted :,its 'participation' in a·
cooperative project Mit~ tije Farme~s H6me Administratiorl
(FmHA) in the u. s. -Department of Agriculture. The object'i ve·
of this project, which was started in' .1974; was to develop a
coordinated financial management program for the agency.          The
changes which have been made and ~re in the process of being
made will result in impressive financial savings and will
help FmHA do a better j,ob in its basic. mission of making 1
and servicing .loans that odntribute 't6 the economic success
of rural people and .t$e qreas wl;lere they 1i ve. The inter..::' .·.
agency team organized by ·,..:J:FMIP is credited by the Administrator
of FrnHA with playing a major:· role in the success of' the pro}\Zct.

       Major pr~ject accomplishmehts include the following:• ,,
                            •   '                  .   I~                        .   '




       1..   The.agency i,S installing a unified management
             information system ahd some of it§ elements
             are now in operation. This syste)ll;"will
             provide inf6rm~tion ori past results, informa~
             tion needed to guide current operations, and
             information for projecting fut~re requirements.

       2.    A new loan disb.u;rsem~nt system now in operation
             provides for dr.awing lOan funds, from the' Treasury
             only as needed 'a:r;id thus saving interest cost for ..
             FmHA, its b~rrm•iers,, arid the Treasury aggregating'
             about $40.~il~ion p~r
                        '           :
                                       year.      ·
                                               ;                  I         .,
       3.    A work measurement system now in operation
             provides accurate· indicators of what FmHA
             pe9ple a;re doing, h.ow lorig it .takes them to
             do it, an.d what tl}e cost fs ., This sYstem is
             USed in estimating, j;he agency IS Staff and
             funding needs and rnanaging available, '
             resources inore efficiently and 'effectively
             than was previously possible~ Savings
             tl1rough inc;reased prqduc,ti vi ty. have been
             estimated ~t $10 to $20 mi~li9n per year.
                                                                      ,·I

                                        ·1·;           ·..... ,




                                                   -15-
      4.   The agency is collaborating with The American
           University in a unique career development
           program for training its employees in financial
           management and executive skills.

      Substantial progress was made during 1976 in the
development of a financial management/planning system for
the Bureau of Alcohol, Tobacco, and Firearms (ATF) in the
Department of the Treasury. This started in 1975 as a
cooperative JFMIP/ATF/Treasury project. The major effort
is now being carried on by ATF with technical assistance
from the General Accounting Office.

      The objective of the ATF project is to design and
implement a financial management/planning system that will
record data on estimated and actual workload, staffing and
costs in a manner that facilitates meaningful review by
all levels of agency management. The work measurement
portion of the system has been adapted from the system
developed for the Farmers Home Administration. Work is
being coordinated with Treasury Department plans for a
personnel and payroll information system modeled after a
system used by the Department of the Interior. By the
end of 1976 work was underway on a Request for Proposals
which ATF will issue in 1977 to obtain contractor
assistance on detailed design, development and implementa-
tion of the system.

EDUCATION AND TR?\INING

      JFMIP continued its efforts to encourage other
universities to apply the concepts used at The .American
University in the Institute for Applied Public Financial
Management. The objective of this program is to educate
government employees and other students in financial and
related management skills which will contribute directly to
improved government programs. The Institute uses the
capabilities and resources of the School of Business
Administration and the School of Government and Public
Administration. The curriculum places heavy emphasis on
practical application and is responsive to the needs and
objectives of the students and the government organizations
where they are employed.

      Starting in September 1975 with one class of 20
students from the Farmers Home Administration, the Institute's
program expanded to three classes in September 1976. The
original class from the Farmers Home Administration is now
in the second year of the two-year program and a second class
from that agency began the first year. A third class consists


                             -16-
of students from several Federal agencies and five students
from local governments in eie Washington area. A fourth
class consisting of students from the Department of Defense
will begin the program in September 1977.

      Several universities have shown strong interest in
establishing programs, similar to the program at the
American University or in applying some of the concepts.
Information has been furnished to many other universities
throughout the country.

      The Civil Service Commission's Management Sciences
Training Center serving the Washington metropolitan area
conducted 295 management realted training sessions for a
total of 4,423 participants. Of these, 105 sessions were
within the financial management areas and were attended
by 3,000 participants. Additionally, 177 financial
management related training sessions were conducted ~y
regional training centers for 4,000 government employees.
The Commission also established a National Interagency
Training curriculum consisting of those courses that will
be offered nationwide. Included in that curriculum were the
financial management courses entitled:

                Basic Contracting;
                Budget Formulation;
                Governmental Bookkeeping
                 and Accounting;
                Practice Problems in Govern-
                 mental Accounting; and
                Simplified Procurement Methods
                 and Techniques.

      JFMIP has cooperated with professional associations
and OL~er organizations in financial management training
programs. Members of the JFMIP Steering Committee and
staff have participated in a number of seminars and
workshops as leaders and speakers.

PRODUCTIVITY PROGRAM

      In July 1976 JFMIP issued its third annual productivity
report as part of an interagency effort to measure and improve
productivity in the Federal Government.

      Volume I reports productivity measures for FY 1967-1975,
analyzes the causes of productivity change, and presents
information on the status of productivity programs.


                             -17-
      Volume II consists of case studies from various public
and private organizations which may provide useful examples
to others who are interested in improving their productivity.

      A Supplement to Volume I, "The l\1easurement Data Base"
provides detailed information on the output measures used
for the 25 functions covered in the report.

      The current measurem~nt system covers 1,926,0'.)0 staff
years in 279 organizational elements of 51 Federal depart-
ments and agencies.  This represents 67 percent of ~~e total
Federal civilian work force.

      During FY 1975 productivity of the measured Federal
work force increased 2 pe~cent. Since fhe base year of
FY 1967, productivity has increased 10.7 percent, or an
average annual increase of 1. 3 percent. l\s might be expected,
there are substantial variations in. the rates of change for
individual organ{zations and for the 25 functional areas for
which productivity indexes have been developed. Average
annual rates of change for.the different functions range from
minus 2.4 percent to plus 6.5 percent. All but 4 of the 25
functions had productivity increases during this period.

      Information on the causes for productivity changes has
been obtained from the agencies submitting measurement data.
Analysis of this data is helpful in extending the application
of techniques which have increased.productivity and identifying
problem areas which need attention. The most commonly cited    ·
reasons for productivity change were:

      Gains

              --Workload increases.
              --Improved training, increased job evaluation,
                  greater upward mobility and use of career
                  ladders ... ·
              --Improved morale as a result of job redesign
                  and enrichment.
              --Acquisition and use of capital equipment.
              --Automation.
              -·-Reorganization and work. sim:?lification.

      Losses

              --Increases in pr9duct cpmplexity which
                cannot be quantified and factored out
                of the measurement equation.   These
                include such thing~ 'as in6reased
                environmental, safety and legal standards.


                                -18-
            --Problems in obtaining funding for
              capital acquisitions.
            --Steady and sharp declines in workload
              which cannot be matched by staff
              reductions.
            --Duplicate work efforts during conversions
              to new or automated system.

Use of Productivity Data

       Over the past several years Federal efforts to measure
and enhance productivity have increased at an impressive, but
uneven rate. Solid progress has been made in a num:~er of
agencies. Some agencies, however, have undertaken productivity
efforts with inadequate preparation. Others have been skeptical
about the usefulness of productivity measurement, viewing it
only as a reporting requirement an<l hoping that the movement
would disappear. Despite the ~act that the word "productivity"
has wide currency, the concept of productivity programs as
an ongoing integral part of management has only begun to
be accepted by Federal managers and organized labor.

      Now that productivity measures are available for two-
thirds of the Federal civilian employees, increased attention
has been given to demonstrating the usefulness of productivity
as a management tool. Productivity measures have utility
in at least six major areas of management:

      1.   Setting of Goals. A productivity
           measurement system can aid in t~e
           setting of management goals and can
           make them more specific and meaningful.

      2.   Budget Justification. Productivity data
           provides a powerful tool for justifying
           staff requirements and capital equipment.
           It also provides a means for projecting the
           future impact of planned improvements on
           resource requirements.

      3.   Cost Reduction and Performance Improvement.
           Studies of productivity data help to locate
           s~ecific problem areas and determine corrective
           actions.

      4.   Ongoing Control of Operations. Productivity
           measures help to monitor the efficiency of
           operations and assess the effects of re-
           allocating resources and any organizational
           changes.

                             -19-
      5.   Improvement ~otivation.  Since productivity
           measurement is primarily a scorekeeping
           technique, it provides a basis for the
           generation of incentive plans, ?roductivity
           bargaining, suggestion award systems, and
           assessment of motivational programs.

      6.   .Accountability.  All of . the ahove enable
           Federal agenci"es to communicate their
           successes and problems concerning the
           efficiency of government operations to the
           executive branch, the Congress, and the public.

      Several activities, undertaken with JFMIP leadership
during the past year, have been aimed at demonstrating the
usefulness of productivity in the management process:

      1.   At a conference on "Implementing a Productivity
           Program" speakers from Minneapolis Honeywell,
           Travellers, Xerox, and Detroit Edison described
           their experiences with establishing and main-
           taining productivity programs. Each speaker
           stressed management commitment and employee
           involvement as keys to success in establishing
           a program.

      2.   A roundtable discussion with representatives from
           industry, State and local government, the Federal
           Government, and nonprofit institutions provided
           an opportunity for sharing a wide variety of
           experiences in implementing major productivity
           efforts.  The discussion was focused on "lessons
           learned."

      3.   ~orkwas started on a ~ooklet containing
           comprehensive guidelines on how to implement a
           productivity program.

      4.   Informal consultations have been held with
           executive and legislative branch staff members
           on use of productivity-in the budget process.

      5.   The management uses of productivity have been
           stressed during several workshops.




                            -20-
      6.   The JFMIP staff assisted the National Center
           for Productivity and Quality of Working Life
           in a series of demonstration projects on the
           concept of Total Performance Measurement (TPM) .
           In this approach, measures of productivity and
           effectiveness are integrated with information
           on employee attitudes and customer attitudes to
           aid operational managers in identifying and
           correcting problem areas.

Changing Responsibilities for Productivity

      In a memorandum dated July 13, 1976, the Director,
Office of Management and Budget, reemphasized the importance
of productivity and announced c~anges in central agency
assignments.  The National Center for Productivity and Quality
of Working Life, which was established by P.L. 94-136 approved
on November 28, 1975, has broad responsibilities for improving
productivity in all sectors of the economy. The National
Center will provide general direction for the internal Federal
productivity program and will coordinate the various activities
now being undertaken by Federal agencies. The Bureau of Labor
Statistics and the Civil Service Commission will continue their
active involvement in the program. The reporting responsibility
previously handled by JFMIP will be included in the responsibil-
ities of the National Center.

      By memorandum of August 10, 1976, Vice President
Rockefeller, as Chairman of the National Center for
Productivity and Quality of Working Life, asked each agency
to designate a senior official to serve as liaison to the
Center.

      The GAO staff that has been assigned to JFMIP to assist
in the productivity area was reassigned to GAO's Financial
and General Management Studies Division in September. This
Division makes productivity analyses and evaluations for
Congress and coordinates all of GAO's productivity efforts.
It assists GAO auditors in their reviews of agency programs
and has responsibility for oversight and evaluation of all
efforts for promoting productivity improvements in Federal
agencies.

      The JFMIP role in productivity will be focused primarily
on providing advice and assistance to agencies on financial
management aspects of productivity and encouraging wider use
of improved productivity systems.




                              -21-
EXAMPLES OF AGENCY IMPROVEMENTS

     Among the financial management improvements reported
by agencies are the following examples.

     ·The Army has begun the complete redesign of its mili-
tary pay systems. The new system will include all Army
active duty, Reserve and National Guard personnel in a pay
status as well as retired personnel.   Using a direct access
data base, teleprocessing and remote terminals, the central
processing site will compute pay, process pay changes, make
payments and develop statements of account with minimal
human interaction.   In addition, the system will automati-
cally update the status of the military personnel appro-
priation as expenditures are made, provide statistical and
analytical data, retain historical data on retrievable and
micromagnetic media and respond to inquiries via teleproces-
sing.

     The Air Force has completed the standardization of all
civilian pay operations in the continental United States.
This should result in a more responsive payroll distribution
system. Future actions include plans to: convert the only
overseas civilian payroll off ice to the new system; mecha~
nize the reconciliation of pay and personnel records;
mechanize leave and retirement records; and expand the use
of the clustering concept to create more efficient groupings.

     The Navy has completed the first phase of standardiza-
tion of its civilian payroll processes, reducing the number
of systems from 55 to 12 with a future reduction to seven
standard systems envisioned.

     The Army has also been streamlining its civilian pay-
roll process.  The new Standard Army Civilian Payroll
System (STARCIPS) has been placed in operation at 62 instal-
lations, thereby replacing 54 different systems. Complete
extension of the standard Army system is planned during
1977, leaving the Army with three civilian payroll systems,
which will be reduced to two when the Army depots receive
new equipment.

     The Air Force Accounting and Finance Center established
a Financial Management Improvement program to identify
potential economies of operation and manpower savings. The
purpose of the effort is to reduce support costs through
centralization, regionalization and record-sharing actions
and to increase direct mission capability. Each of the
Military Departments now has adopted a formalized ongoing
effort to promote financial management improvements.
     The State Department implemented its new combined pay-
roll and personnel system for all departmental employees
as well as all Americans and foreign nationals served by
the Washington Finance Center for the Western Hemisphere.
Significant benefits have been reported through elimination
of duplicate input of common data elements for both the
personnel and payroll systems; elimination of contract card
punching; elimination of the need for payroll personnel to
abstract and code payroll change data onto code sheets,
thereby possibility of errors; a decrease in required
computer time; and the virtual elimination of all overtime
previously required to process payroll changes in the
Payroll Office.

     The Rural Electrification Administration in the
Department of Agriculture has implemented a Prime Criteria
Loan Procedure for its program of assistance to electric
power systems.  Under this procedure, a list of financially
strong and well-managed power distribution systems was
prepared on the basis of financial and other performance
criteria. Loan applications from systems on this list
receive minimum review. The procedure is intended to
release REA area off ice personnel for more intense analysis
of borrowers with less favorable performance records and
decrease the loan processing time for all borrowers.
About 48 percent of all applications received will be
processed as Prime Criteria loans.   The estimated savings
will be 32 staff hours per loan application, or 3.3 staff
years per year.

     The Railroad Retirement Board has implemented a new
system to expedite initial payment to retired employees.
Under the system, called IMPACT (Initial Monthly Partial
Annuity Certification in Tiers), field representatives
will make preliminary eligibility determinations and com-
pute a partial rate of payment for most employees based on
the age and years of service at the time of application.
When the application is received in the Board's headquarters,
the partial rate is paid. The computer system will begin
paying the partial rate effective with the first day of the
month the application is filed with certain reservations.
     The Tennessee Valley Authority has reported a $400,000
annual recurring savings due to its improvements in
forecasting cash needs, monitoring the scheduling of large
disbursements, and minimizing cash balances.


                            -23-
     The Export-Import Bank conducted an in-depth study of
its disbursement procedures which revealed several procedur-
al duplications.  Refinements were made in the system,
including the design of a new disbursement form which com-
bined wire transfer letters, check requests, voucher and
posting media into one standardized voucher form.  Use of
the new form alone has resulted in an estimated annual
savings of nearly four staff years and an estimated $46,500
in administrative costs.  It also enabled the EDP office
to produce a daily record of disbursement actions, and
established a basis for conversion to the new Treasury
Financial Communication System and the planned automation
of disbursement procedures.

      The Department of Housing and Urban Development
decentraiized authority for the tax payment function on
single family dwellings from Headquarters to its field
offices.   This authorization was based on a pilot program
which demonstrated that the field offices could pay property
taxes quicker and more accurately; reduce the tax penalties
incurred by the Department; establish and maintain more
accurate property tax records; and establish more effective
relationships with local tax authorities.

     Effective January 1, 1976, the Department of Housing
and Urban Development completed the conversion of all
letters of credit formerly operated through the Federal
Reserve Bank System to the Letter of Credit - Treasury
Regional Disbursing Off ice (RDO) System. The payment
request is formatted in such a fashion that the recipients
are required to submit a status of Federal funds report
with each request for funds.   This requirement provides
the Federal program agencies with a tool for responsible
cash management in the control of advances and the monitor-
ing of the cash management practices of recipients.
Application of this system as intended results in funds
being advanced in amounts to meet current needs only, which
minimizes cash flow from the Treasury and results in sub-
stantial interest savings by reducing Government borrowing
to finance grant programs.

     The Department of the Interior is using the Treasury
Financial Communicatiore System for receiving by wire
quarterly collections of amounts due the U.S. Government
for work performed in connection with the Trans-Alaska
Pipeline. This procedure has increased the availability
to the Department of the Treasury of over $12 million
annually by 7 to 14 days, representing an annual savings
of at least $12,000 to $24,000.
     The Bonneville Power Administration in the Department
of the Interior has developed and implemented a computer
system for managing its investments in various U.S. Treasury
notes and bills.  Investments, averaging about $1 million
per day, are recorded daily via a computer terminal.   Re-
ports on the status of the investments, including interest
accrual, discounts and premiums can be requested from a
remote terminal, and are generated at the end of the month.
The system also serves as the basis for entries to the
Administration's accounting system.  The system has re-
sulted in a savings of approximately 10 staff days per
month.

     The Department of Health, Education, and Welfare's
Bureau of Health Insurance in the Social Security Administra-
tion has accelerated its efforts to reduce the unnecessary
and excessive average daily bank balances maintained in
intermediary and carrier Federal Health Insurance Benefit
Accounts. Major emphasis was placed on the implementation
of the checks paid technique under the letter of credit
method.  Contracts to handle the accounts are awarded on
competitive bids. All contractors were requested to use
this preferred technique for financing the Medicare Benefit
Accounts in cases where it proved advantageous to the
Government.  During the first year of operation, nine
contractors used the checks paid technique, resulting in
an $11.3 million reduction in cash balances. Additional
savings were achieved by monitoring all other contractors'
Federal Health Insurance Benefit Accounts in an effort to
minimize the average daily balances.

     The Social Security Trust Funds have been earning an
additional $1-$1.5 million annually in interest income as
a result of a new method developed by the Department of
Health, Education, and Welfare which permits State govern-
ments to wire-transfer their social security contributions
to the account of the U.S. Treasury. Previously, there
were only two methods by which States could deposit social
security contributions--by mail and over the counter.
Since the wire transmission procedure is optional, it is
unlikely that all States will adopt it in the near future
but several States are now using it.  If all States were
to deposit their contributions by wire, the additional
interest income accruing to the trust funds would approxi-
mate $15 million annually.

     The Retirement and Survivors Insurance and Disability
Insurance Trust Funds administered by the Department of
Health, Education, and Welfare are earning an additional


                             -25-
$3 million in interest income each year as a result of
various improvements made in trust fund drawdown procedures.
The revised procedures allow for better estimates of cash
needs, thus minimizing the trust fund drawdown and maximiz-
ing invested funds.

     The Department of the Treasury continued its imple-
mentation of reporting Series E savings bond sales on
magnetic tape in lieu of registration stubs.  Ten addi-
tional issuing agents converted to the new operations
during the year, which will result in a recurring annual
savings of about $190,000. Fifty-four issuing agents are
now participating in the program.

     To date, a new procedure developed by the Department
of the Treasury for funding foreign currency bank accounts
maintained by civilian disbursing officers has reduced
these accounts by $31 million, resulting in recurring
annual interest savings to the U.S. Government of approxi-
mately $2.2 million.

      The U.S. Customs Service has adopted the Health Educa-
tion and Welfare Computer Audit System (HEWCAS) as an aid
in upgrading audit techniques. The HEWCAS system, developed
by the Audit Agency of the DHEW, was reported in the JFMIP
Annual Report for 1975. The system composes computer
programs written in COBOL for processing and extracting
data on any computer with a COBOL compiler.

     The Internal Revenue Service developed a timesharing
computer system to summarize a major part of the data
necessary to prepare the Service's various budget submis-
sions.  System development has been substantially completed
and the system was used successfully to prepare the FY 1978
budget to OMB.  In addition, this system generates and
prints the internal financial plans for the various com-
ponents of IRS.

     The Internal Revenue Service has also implemented a
centalized clearinghouse for locally developed fiscal
management computer programs. This procedure will help
assure efficient utilization of existing computer resources
at the National Office and seven regional systems sites
through semi-annual listings of on-shelf computer applica-
tions.

     The Off ice of Revenue Sharing has offered State and
local governmentunLts receiving revenue sharing funds the
option of having their general revenue sharing payments

                             -26-
deposited directly into their checking or savings accounts.
By the end of 1976 more than 27,000 units of State and
local government had elected to receive their funds using
electronic fund transfer procedures.

      In August 1976, the Federal Supply Service of the
General Services Administration began billing civilian
agencies for supply services through the Simplified Intra-
governmental Billing and Collection (SIBAC) System. This
was the sixth billing system to use SIBAC. The SIBAC
system was started as the result of a study by a JFMIP
interagency team and was first implemented in January 1972
when the Federal Supply Service began billing the Department
of Defense for supply services.

     The SIBAC system eliminates interagency receivables
and payables, reduces the need for checks and deposits
in payment of bills, and simplifies collection procedures
by providing for simultaneous billing and collection.
Under this system, the billing agency has funds available
for its use on the day the SIBAC statement is prepared.
Prior to SIBAC, it took from 60 to 90 days before funds
became available to the billing agency. Currently, over
62,300 statements are being produced by automated means
with charges of over $1.8 billion yearly for civilian
agencies. The GSA supply services to the Department of
Defense amount to over $630 million annually.

     The Veterans Administration has continued installation
of its Centralized Accounting for Local Management (CALM)
System at its field stations. Through use of a computer
output microfilm system, a single microfiche is produced,
containing the same information normally printed on 269
computer pages. Annual savings of greater than $1 million
have been obtained from a reduction in paper purchases
alone, and other substantial savings have been realized in
mailing costs, storage space, and computer time.

     The Energy Research and Development Administration
developed an entirely new automated, on-line travel
system to replace the cumbersome one in use the past several
years.  The system is designed to provide a continuous
update of the travel accounts of ERDA organizations and
to provide funds control by rejecting any proposed trips
for which funds are not available. First year savings of
greater than $100,000 were obtained, and annual savings
of greater than $250,000 are projected for the future.



                             -27-
     The accounting staff of the Energy Research and
Development Administration is using several automated
financial analysis systems. Computer programs were
developed to assist in the analysis of production costs,
alternative prices and related cash flows for the uranium
enrichment program, and in the testing of assumptions
related to the development of rates for the Geothermal
Loan Guaranty Program.

     The National Aeronautics and Space Administration's
Johnson Space Center conducted an intensive review of
user requirements for computerized reports produced from
the various financial management reporting systems. Upon
completion of the review, paper requirements for financial
management reporting had been reduced by approximately
2,700,000 pages annually.

     The Department of Labor is continuing development of
automation of Federal Employee Compensation Act (FECA)
Payment and Accounting functions.  The current decentralized
manual system will be replaced by a centralized automated
claim control and payment process, with data inputted via
"intelligent terminals" to a central data base.

     The Environmental Protection Agency completed an
extensive experiment in zero-based budgeting in several
offices.  This involved a critical review and analysis of
the cost effectiveness of several of the Agency's program-
matic and administrative activities. As a result, the
Agency's budget reflected a redirection of resources in
several significant areas where adequate resources were
not available in prior years. This was made possible by
redirecting the emphasis applied to areas of minimal
payoff or low priority. An auxiliary benefit was the
identification of several administrative processes requiring
further examination aimed toward the adoption of more
effective and efficient operating procedures.

     The Advisory Commission on Intergovernmental Relations
has taken a rather unique action to improve the efficiency
of its financial management operations. Following a review
which showed that the then current automated system could
not handle an expanded account structure, the Commission
converted to a manual operation! The manual system allows
instantaneous alteration of programs, forecasts, and reports.
The primary achievement of the switch is the integration
of all financial documents into a single numbering system
that is tied into package slip controls, receipt controls,
and fund accounts.  The Commission has a staff of 37.

                            -28 -
      The Urban Mass Transportation Administration of the
Department of Transportation developed and tested a transit-
industry reporting system and a uniform system of accounts
and records, Financial Accounting and Reporting Elements
 (FARE) . FARE accumulates public mass transportation
financial and operating information by uniform categories.
The system has been designed to assist in meeting the needs
of individual public mass transportation systems, Federal,
State, and local governments, and includes a sufficient
level of detail to meet the analytical requirements of
each of the different types of users.   The information
provided by this system will be used by UMTA to evaluate
grant applications as well as the performance of the gran-
tee after the grant is awarded.

     By providing training courses concerning contract
audits, operational auditing, and auditing of computer
systems, to both State and Federal auditors, the Department
of Transportation's Federal Highway Administration was
able to significantly improve the quality of its surveil-
lance over the financial operations of all funded agencies
and to greatly assist the development of internal audit
organizations at the State level.




                            -29-
APPENDIX A                                       APPENDIX A


                      KEY OFFICIALS OF JFMIP
                        DECEMBER 31, 1976


PRINCIPALS

     Robert E. Hampton, Chairman, U.S. Civil Service
       Commission (Chairman)

     James T. Lynn, Director, Office of Management
        and Budget

     William E. Simon, Secretary of the_Treasury

     Elmer B. Staats, Comptroller General of the United
        States

STEERING COMMITTEE

     John D. R. Cole, Director, Bureau of Personnel
        Management Evaluation, U.S. Civil Service
        Commission (Chairman)

     Donald   c.   Kull, Executive Director, JFMIP (Co-chairman)

     John J. Lordan, Chief, Financial Management Branch,
        Off ice of Management and Budget

     Gerald Murphy, Deputy Commissioner, Bureau of
        Government Financial Operations, U.S. Department
        of the Treasury

     Donald L. Scantlebury, Director, Financial and
        General Management Studies Division, U.S. General
        Accounting Off ice

EXECUTIVE DIRECTOR

     Donald C. Kull




                                - 30-
APPENDIX B                                      APPENDIX B


              JFMIP AGENCY LIAISON REPRESENTATIVES


ACTION                            COMMUNITY SERVICES
Mr. Peter F. Donnelly               ADMINISTRATION
806 Connecticut Ave., NW.         Mr. Curtis Christensen
Washington, DC 20525              Deputy Comptroller
                                  1200 - 19th Street, NW.
AGENCY FOR INTERNATIONAL          Washington, DC 20506
  DEVELOPMENT
Mr. Thomas R. Blacka,Controller   CONSUMER PRODUCT SAFETY
Off ice of Financial Management     COMMISSION
Washington, DC 20523              Director, Division of
                                    Budgets and Operations -
DEPARTMENT OF AGRICULTURE           (OPPE)
Mr. Jerome A. Miles, Director     Bethesda, MD 20207
Office of Management & Finance
Washington, DC 20250              DEPARTMENT OF DEFENSE
                                  Fred P. Wacker
AMERICAN BATTLE MONUMENTS         Assistant Secretary of
  COMMISSION                        Defense (Comptroller)
Col. William E. Ryan, Jr.         Washington, DC 20301
Director of Finance and
  Operations                      DISTRICT OF COLUMBIA
Washington, DC 20315                GOVERNMENT
                                  Richard J. Gill
CENTRAL INTELLIGENCE AGENCY       509 7th St., NW.
Thomas B. Yale, Director          Washington, DC 20004
  of Finance
Washington, DC 20505              ENERGY RESEARCH & DEVELOPMENT
                                    ADMINISTRATION
CIVIL AERONAUTICS BOARD           Mr. M. C. Greer
Anthony F. Toronto                Controller
Comptroller, B-17                 Washington, DC 20545
Washington, DC 20428
                                  ENVIRONMENTAL PROTECTION
COMM.ODITY FUTURES TRADING          AGENCY
  COMMISSION                      Mr. Marcus w. Pugh
Ms. Jeanne Stanek                 Rm. 3417 Waterside Mall
2033 K St., NW.                   401 M St., SW.
Washington, DC 20581              Washington, DC 20460

DEPARTMENT OF COMMERCE            EQUAL EMPLOYMENT OPPORTUNITY
Meir S. Gabbay, Chie~               COMMISSION
ADP Administration Systems        Mr. Denis C. Worley
  Division                        Off ice of Management
Room 5321                         Washington, DC 20506
Washington, DC 20230


                              -31-
APPENDIX B                                       APPENDIX B


EXPORT-IMPORT BANK OF              FEDERAL MEDIATION &
  THE UNITED STATES                  CONCILIATION SERVICE
w. Stevens Smith                   Ms. Sorine A. Preli
Senior Vice President              Assistant Director
  and Treasurer-Controller         Administration for Budget
Washington, DC 20571                 and Financial Management
                                   Washington, DC 20427
FARM CREDIT ADMINISTRATION
Chief, Accounting and              FEDERAL POWER COMMISSION
  Reports Section                  Ed Capps, Assistant Chief
Office of Credit and               FM Branch
  Operations                       825 N. Capitol St., Rm. 3004
Washington, DC 20578               Washington, DC 20426

FEDERAL COMMUNICATIONS             FEDERAL TRADE COMMISSION
  COMMISSION                       James A. Williams, Acting
Mr. Thomas P. Campbell               Chief
Acting Chief, Financial            Division of Budget and
  Management Division                Finance
Washington, DC 20554               Washington, DC 20580

FEDERAL DEPOSIT INSURANCE          FOREIGN CLAIMS SETTLEMENT
  CORPORATION                        COMMISSION
A. H. Teichler, Jr.                Off ice of the Executive
Deputy Controller                    Director
Washington, DC 20429               1111 - 20th St., NW.
                                   Room 417
FEDERAL ENERGY ADMINISTRATION      Washington, DC 20579
Mr. Dick Motley, Director
Off ice of Budget & Financial      GENERAL SERVICES
  Management                         ADMINISTRATION
Washington, DC 20461               Paul S. Carter, Director
                                     of Finance
FEDERAL HOME LOAN BANK BOARD       Washington, DC 20405
Robert E. Wolpert
320 First St., NW.                 GOVERNMENT PRINTING OFFICE
Washington, DC 20552               Comptroller
                                   Washington, DC 20401
FEDERAL MARITIME COMMISSION
Earl D. Updegrove                  DEPARTMENT OF HEALTH,
Director, Office of Budget           EDUCATION, AND WELFARE
  and Finance                      Mr. John Young
Room 11305                         Assistant Secretary for
Washington, DC 20578                 Management and Budget
                                   Washington, DC 20201




                                -32-
APPENDIX B                                    APPENDIX B



DEPARTMENT OF HOUSING AND       LIBRARY OF CONGRESS
  URBAN DEVELOPMENT             Arthur Yabroff, Assistant
Thomas O'Connor, Director          Director
Off ice of Finance              Management Services
  and Accounting                  Administrative Department
Room 2202                       Washington, DC 20540
Washington, DC 20410
                                NATIONAL ACADEMY OF SCIENCE
INDIAN CLAIMS COMMISSION        Comptroller
Mr. David H. Bigelow            2101 Constitution Ave., NW.
Executive Director              Washington, DC 20418
1736 K St., NW.
Washington, DC 20006            NATIONAL AERONAUTICS
                                  AND SPACE ADMINISTRATION
DEPARTMENT OF THE INTERIOR      H. Frank Hann, Director
Mr. James T. Carter               of Financial Management
18th and C Streets, NW.         Washington, DC 20576
Room 5354
Washington, DC 20009            NATIONAL CAPITAL PLANNING
                                  COMMISSION
INTERNATIONAL TRADE             Malcolm Trevor, Assistant
  COMMISSION                      Executive Director
E. C. Wallington, Jr.             (Administration)
Chief, Financial Management     Washington, DC 20576
Washington, DC 20436
                                NATIONAL FOUNDATION ON ARTS
INTERSTATE COMMERCE               AND HUMANITIES
  COMMISSION                    Joyce Freeland, Financial
Dr. Bernita A. Joyce              Manager
Budget and Fiscal Officer       Room 807 - Shoreham Bldg.
Room 1330                       Washington, DC 20506
Washington, DC 20423
                                NATIONAL GALLERY OF ART
DEPARTMENT OF JUSTICE           James W. Woodard, Treasurer
Mr. Gerald c. Quinlan             (Acting)
Room 4112                       Washington, DC 20565
4th and Eye Sts., NW.
Washington, DC 20534            NATIONAL LABOR RELATIONS
                                  BOARD
DEPARTMENT OF LABOR             Off ice of the Director
Mr~ Alfred M. Zuck              Room 400
Comptroller                     Division of Administration
Room S4030                      Washington, DC 20570
200 Constitution Ave., NW.
Washington, DC 20210            NATIONAL MEDIATION BOARD
                                Rowland K. Quinn, .Jr.
                                Executive Secretary
                                1230 16th St., NW. - 7th
                                  Floor
                                Washington, DC 20572

                              -33-
APPENDIX B                                     APPENDIX B


NATIONAL SCIENCE FOUNDATION       SELECTIVE SERVICE SYSTEM
Mr. Kenneth B. Foster             Captain Donald E. Russell
Financial Management Officer      Comptroller
Washington, DC 20550              1724 F Street, NW.
                                  Washington, DC 20435
NATIONAL SECURITY AGENCY
Miss Irene c. Addicks             SMALL BUSINESS ADMINISTRATION
Central Security Service          Herbert T. Mills·, Director
Ft. George G. Meade, MD 20755     Off ice of Budget and Finance
                                  Washington, DC 20416
NATIONAL SECURITY COUNCIL
Mrs. Lois Moock, Administrative SMITHSONIAN INSTITUTION
  Officer                       T. Ames.Wheeler, Treasurer
Washington, DC 20506            Washington, DC 20560

OFFICE OF MANAGEMENT
  AND BUDGE'r
Mr. John Lordan, Chief
Financial Management Branch
New Executive Office Building
Washington, DC 20503

PANAMA CANAL COMPANY
Philip L. Steers, Jr.
Comptroller
Balboa Heights, Canal Zone

PENSION BENEFIT GUARANTY
  CORPORATION
Mr. Norman Parsons
P.O. Box 7119
Washington, DC 20044

RAILROAD RETIREMENT BOARD
Michael Rudisin, Director
Budget and Fiscal Operations
844 Rush Street
Chicago, IL 60611

RENEGOTIATION BOARD
Mrs. Betty Edwards
Budget and Accounting Officer
Washington, DC 20446

SECURITIES AND EXCHANGE
  COMMISSION
Lawrence H. Haynes
Comptroller
Washington, DC 20549


                                -34-
                                            APPENDIX C
APPENDIX C


                   JFMIP PUBLICATIONS
                      1974 - 1976


1974

JFMIP--Its Scope, Objectives, and Methods, 1974.
JFMIP Quarterly News Bulletins
Proceedings from the Third Annual Financial Management
 Conference - January 28, 1974
Report on Federal Productivity -
 Volume I "Productivity Trends, FY 1967   1973 - June 1974
Supplement to Volume I "The Measurement Data Base" - 1974
Report on Federal Productivity -
 Volume II "Productivity Case Studies" - June 1974
JFMIP Annual Report for 1973 - July 1974
Financial Management Functions in the Federal Government-
 September 1974
JFMIP Assistance to Agencies - December 1974
Federal Financial Management Directory

1975

Proceedings From The Fourth Financial Management Conference -
 January 20, 1975
JFMIP Quarterly News Bulletins
Compendium of Publications on Budgeting ~ January 1975
JFMIP Annual Report for 1974 - April 1975
Productivity Programs in the Federal Government - FY 1974
 Volume I "Current Efforts and Future Prospects" - June 1975
Supplement to Volume I "Data Base" - August 1975
Productivity Programs in the Federal Government - FY 1974
 Volume II "Case Studies" - June 1975
Operating Budgets--A Practical Approach - November 1975
Federal Financial Management Directory - 1975

1976

Money Management Study - 1976
Principal Addresses Presented at the Fifth Financial
 Management Conference - February 2, 1976
JFMIP Annual Report for 1975 - April 1976
Government Productivity, Volume I,
 "Productivity Trends and Current Efforts" - July 1976
Supplement to Volume I "The Measurement Data Base" - July 1976
Government Productivity, Volume II "Case Studies" - July 1976
Federal Financial Management Directory - 1976


Inquiries about these publications should be addressed to:
Joint Financial Management Improvement Program, 666 11th St., NW,
Suite 705, Washington, DC 20001 - Telephone: (202) 376-5415.
                            - 35-