Need for a Government-Wide Budget Classification Structure for Federal Research and Development Information

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

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

                         DOCUBENT RESUME
00052 - [A0891544]

Need for a Government-Wide Budget Classification Structure for
Federal Research and Development Information. B-115398;
PAD-77-14. March 3, 1977. 52 pp.

Report to the Congress; by   l2.er B. Staats, Comptroller General.
Issue Area: Federal Records Management (1400).
Contact: Program Analysis Div.
Budget Function: General Science, Space, and Technology: General
    Science and Basic Research (251); iscellanecus: Financial
    MaDageuent and Information Systems (1002).
Organization Concerned: Department of Defense; Department of
    HealtL, Education, and elfare; Department of Housing and
    Urban evelopuent; National Aeronautics and Space
    Administration; National Science Foundation; Office of
    Management and Budget.
Authority: B-115398 (1972).

          There is a need for a unified presentation of Federal
 Research and Development (R&D) budgetary information according
to "defineable user patterns." An agency-wide structure for the
Department of Housing and Urban Development contributed to the
development of a conceptual foundation for the gcvernment-wide
structure, which is called the "Unified Classification Structure
for Federal Research and Development." The categories in the
structure have been designed to identify pecific national
objectives which are of concern or interest to the Congress. The
proposed structure will be a supplementary categorization of
total funuin- for all research by ntional objective. The Office
of anagement and the Budget ORB) stated that a useful course
of action would be to develop some limited supplementary R&P
data on an interagency basis to cover specific problem areas
identified by the Congress, thus avoiding the collection of too
such d ta. oRB also concluded that the GAO system be
rationalized with other efforts. OB also stated that the GAO
system would cause more work for the agencies and OB and would
lead to arbitrary classifications. Fiadings/Ccnclusions:
Information satisfying the need for unified funding information
should enable users to determine the level of commitment to
specific national objectives, to ascertain the
interrelationships among different agencies' RD activities, to
facilitate identifying areas where sore effective coordination
is necessary, and to evaluate whether research funding is in
line with priorities. Existing information sources do not
provide readily useable information identifying the level of R&D
funding by agency committed to specific national objectives.
Recommendations: O0B should require that budgetary data on
Federal R&D activities be collected in accordaDce with the
unified classification structure, and submitted to Congress
utilizing FY-78 information as soon as possible. (Author/SS)


Need For A Government-wide
Budget Classification Structure
For Federal Research And
Development Information
GAO identifie a need for a unified presenta-
tion of all Federal research and development
funding which would indicate the amount of
Federal funds each agency commits to speci-
fic national objectives. This report discusses
the Government-wide budget classification
structure for research and development activi-
ties developed by GAO and recommends its

PAD-77-14                                        ARC   3 1 977
                          WASHINGTON D.C.


To the President of the Senate and the
Speaker of the House of Representatives

     This report recommends implementation of a proposed
unified budget classification structure for Federal research
and development information.

     This work was performed in response to our responsibili-
ties set forth in title VIII of the Congressional Budget Act
of 1974.  Under title VIII, the General Accounting Office is
responsible for (1) identifying and specifying the needs of
the committees and Members of Congress for fiscal, budgetary,
and program-related information and (2) developing classifica-
tion structures for use by all Federal agencies in supplying
such information to the Congress.

     A copy of this report is being sent to the Dirctor,
Office of Management and Budget.

                                   Comptroller General
                                   of the United States

DIGEST                                                    i

   1      INTRODUCTION                                    1
   2      GAO-DEVELOPED STRUCTURE                         4
              Conclusions                                 7
              Recommendation                              7
            IS NEEDED                                     8
              Congressional precedent                     8
              Improved analytical and oversight
                capability                                9
              The National Science and Technology
                Policy, Organization, and Priorities
                Act of 1976                              10
              Conclusion                                 11
            PRESENTATIONS                                i2
              The Budget of the U.S. Government          12
                  Federal Program by Function            12
                  Special Analysis P--Federal Research
                    and Development Programs             13
                  Other special analyses                 16
              National Science Foundation analysis of
                Federal R&D funding by function          28
              Report on the Federal R&D progra,
                FY 1976                                  19
              Specialized subject reports                19
              Conclusion                                 20
              Need to fully implement the structure      21
              Rationalization with other work            22
              Feasibility of collecting detailed
                information                              23
              Agencies can assign R&D to appropriate
                categories                               23
              Agency familiarization                     24
              Conclusion                                 24
APPENDIX                                                   Page
      I    Our activities to improve budget information
             provided to the Congress                       25
  II       Unified Classification Structure for Federal
             research and development                       28
 III       Pages 17-29 of the definitions accompanying
             the Unified Classification Structure          35
  IV       Complete definition and instruction package     38
      V    September 11, 1975, letter to Director, 3MB     39
  VI       October 9, 1975, letter to Comptroller
             General from Director, OMB                    41
 VII       OMB data presentation using parts of GAO-
             developed classification structure            44
VIII       October 26, 1976, letter to Director,
             Program Analysis Division, from OMB           46
DOD        Department of Defense
GAO        General Accounting Office
HEW        Department of Health, Education, and Welfare
HUD        Department of Housing and Urban Development
NASA       National Aeronautics and Space Administration

NSF        National Science Foundation
OMB        Office of Management and Budget
R&D        research and development
                                         FEDERAL RESEARCH A    DEVELOPMENT

            The Congressional Budget Act of 1974
            the Comptroller General to identify and
            the needs of the committees and Members specify
            Congress for fiscal, budgetary, and program-
            related information and to develop classifi-
            cation structures for use by all Federal
            agencies in supplying such information
                                                    to the
            GAO identified a need for a unified presentation
            of all Federal research and development
            which would indicate the amount of Federal
            each agency commits to specific national    funds
            tives.                                    objec-
                    In effect, this presentation
            mit a user to determine te goals thatwould per-
            research and development .s directed toward

           This presentation would help the Congress
           understand why Federal research and development
           is conducted, to evaluate resource allocation
           in relation to priorities, to exercise
           effective oversight of Federal research
           development activities, and to compare
           activities among various agencies.

            GAO reviewed a number of sources of research
            and development budgetary information.
            included the Budget of the U.S. Government,
           National Science Foundation's Analysis        the
                                                   of Fed-
           eral R&D Funding by Function, the Federal
           for Science and Technology's fiscal year Council
                                                     1976 "R&D
           Program," and specialized subject reports.
            ious presentations currently available       The var-
                                                   are designed
           and used to satisfy information needs which
           differ from the needs addressed in this
           Existing information sources do not provide
           readily usable information identifying
                                                   the level
           of research and development funding committed
           by all agencies to specific national
           Based on GAO analysis and extensive contributions
           from officials and staff members of a number
       s    Upon rmoval. the rport   i                 PAD-77-14
over       should be notd heron.
agencies and congressional committees, GAO
developed a unified classification structure
for Federal research and development. The
approach which GAO recommends is intended to
supplement the current approach to presenting
research and development budget information
and should help the Congress to understand, eval-
uate, oversee, and guide Federal research and
development activities.
In September 1975, GAO sent the proposed
structure to the Office of Management and
Budget for implementation. The Office of
Management and Budget agreed to gather data
on selected categories of the struct Ire for
presentation with the fiscal year 1917 budget.
Fourteen agencies provided information for
this partial data collection effort, which
included 7 of the structure's 13 categories.
This partial test demonstrated that the Office
of Management and Budget and the agencies are
able to familiarize themselves with this system
and its definitions, implement the new struc-
ture, and present the information to the
Congress in a timely manner.  In addition, the
Director. Office of Management and Budget,
stated "we believe that it would be extremely
desirable to test a system through a dry run
after the 1977 Budget is submitted   .   . ."   How-
ever, the Office of Management and Budget staff
never conducted the full test of the structure
which the Director proposed.

GAO reconmends that the Director. Office of
Managemern and Budget, require that budgetary
data on Federal research and development acti-
vities be collected in accordance with the
unified classification structure proposed in
this report. This presentation would supplement
existing budgetary presentations and should include
prior, current, and budget year information.

This information cannot be incorporated in
the regular budget process for fiscal year
1978. However, it should be presented to
the Congress, utilizing fiscal year 1978
information as soon as possible. Starting
with the fiscal year 1979 budget, the Office
of Management and Budget should include this
budgetary data in the regular budget process

    and present it to the Congress concurrently with
    the annual budget submission.

    The Office of Management and Budget disagrees
    with GAO's recommendation in this report.
    (See ch. 5.) The Office of Management and Budget
    questions the desirability of investing the
    resources required to implement the structure
    and whether the proposed structure would provide
    more information than the congress needs. The
    Office of Management and LAdget aso believes
    that GAO's proposed classification structure
    should not be adopted at this time in     w f f-
    other budget classification developments taking
    place. GAO believes that because the research and
    development activities are included in so many
    agency budgets, they are difficult to look at in
    a cohesive manner without a major change in
    structure.  This e;rss-the-bfard restructuring
    is possible in a s:.pplementary presentation.
    Therefore, GAO does not believe that the ob-
    jections raised by the Office of Management and
    Budget are sufficient reasons to delay implement-
    ing GAO'6 recommendations.

IMLSha~                 iii
                           CHAPTER 1


     Section 202 of the Legislative Reorganization Act of
1970, as mended by the Congressional Budget Act of 1974
(Public Law 93-344; 88 Stat. 328) requires the Comptroller
Genetal to (1) identify and specify the needs of the com-
mitees and Members of Congress for fiscal, budgetary, and
program-related information and (2) develop classification
structures for use by all Federal agencies in supplying such
information to the Congress.

     As a preliminary step in fulfilling our earlier respon-
sibilities to identify congressional information needs under
the Legislative Reorganization Act of 1970, we interviewed
staff members representina 44 committees and 69 Members of
Congress. From these inc rviews, we I.dentified and reported
a congressional need for   assifying bidgetary information
according to "definable user patterns.'   ("Budgetary and
Fiscal Information Needs of the Congress," Nov. 10, 1972,

     Congressional staff members identif 4 ed Federal program
or project objectives as an important user pattern; for
which a classification structure was needed. The staff
of the House Committee on Science and Astronautics (now
the Committee on Science and Technology) emphasized that
a classification structure should be prepared and budget
information should be presented for overall Federal re-
search and development (F.&D) activities. This staff in-
dicated that they need budget information on a number of
particular topics in terms of what agencies are involved
and the dollar extent of theiL involvement so that they
can more effectively evaluate the related National Aero-
nautics and Space Administration (NASA) and National
Science Foundation (NSF) activities.

      In our subsequent work, we assisted in the development
of the objective- or program-oriented classification struc-
ture now used in the budget justifications for the Research
and Technology Account of the Department of Housing and
Urban Development (HUD). The structure was tailored to
HUD's R&D efforts with summary levels to facilitate
interagency comparisons. This agency-oriented structure
contributed to the development of a conceptual foundation
for the Government-wide structure. The Government-wide
structure was designed to provide a hierarchy of objective
or probler categories to which individual R&D efforts
could be assigned on the basis of their primary pur-
pose, regardless of who was performing or funding them.
      In aition to the HUD research account structure,
 we initiated work wth the House and Senate Appropriations
 Committees and the House Committee on Science and Astronautics
 to improve the budget structures of NSF and NASA. We determined
 that these two budgets includeJ research efforts committed
 to similar activities, for example, specific astronomy objec-
 tives, weather research, or pollution monitoring. However
 the agencies presented information and discussed related
 projects in a manner which made compa, isons and analysis
 very difficult.

      After a preliminarr review of these budgets, we deferred
this work in order to develop a unified presentation which
indicates the amount of funds that each agency commits to
specific national objectives. These national objectives
comprise the summary level of our classification structure.
We chose these categories because they received continuing
interest in the information presentations discussed in
chapter 4 and in numerous discussions with congressional
staff and agency personnel. We concluded that this unified
presentation would facilitate understanding the total Federal
R&D effort, making interagency comparisons, and coordinating
these R&D activities. While helping us develop this presen-
tation, Several executive branch officials who
use R&D information emphasized the need for suchprepare and
                                                  a presenta-

     The recent recommendations of the Subcommittee on
Domestic and International Scientific Plarning and Analysis
of the House Science and Technology Committee urther support
the need for a structure such as we are proposing. Two of
the Subcommittee's ecommended guidelines for Office of
Science and Technolosy Policy reports in Special Oversight
Report 'n. 1 are these:

     1. Federal R&D "should be revieweC not
its individual components but also as a whole.only through
                                                * * * We must
develop an ability to view the research and development
budget in its entirety so that the total national effort
can be evaluated."

     2. "The report should relate specific scientific and
technologicl activities * * * to particular national goals."

     We are currently involved in a number of activities to
improve the budget information provided to the Congress.
One of these activities is a study of recommendations from
a bipartisan congressional Commission on Government Procure-
ment recommending a mission budgeting approach for funding
Federal R&D. The Commission approach would reorganize the
budget on the basis of primary purposes or missions to be

served by proposed expenditures. If mission budgeting is
implemented in the future, some of the crosscutting infor-
mation provided by the structure in this report would be more
readily available through the normal budget process, except
for activities categorized in the technology base. However,
crosscutting information based on national objectives which
transcend agency missions is needed now and will continue to
be needed for Federal agency R&D work which is not uiquely
related to single agency missions. (A discussion
other activities to improve budget information is of our
as appendix I.)

                          CHAPTER 2

     Based on our analysis and etensive contributions from
representatives of a number of agencies and congressional com-
mittees, we have prepared a Unified Classification Structure
for Federal Research and Development.   (This structure is pre-
sented in outline form in app. II.)   The complete definitions
and instructions for the structure include definitions of each
category in the structure, ist-uctions on research to be in-
cluded in and excluded from ach category, and directions for
agencies to follow in preparing their submissions. (Sample
structure definitions are presented in app. III. The complete
definition and instruction package, app. IV, which has been
printed and bound separately, is available from us on request.
It is identified as PAD-77-14A.  Since the categories in the
structure are not always self-explanatory, users should refer
to this complete definition set to determine what is included
in a category.)

     For assistance in preparing definitions for the structure,
we worked with many of the agencies conducting the largest re-
search efforts directed toward most of the objectives in the
structure. For example, we coordinated the definitions for
the Diseases and Injuries category in the Health objective
with the Director's Office at the National Institutes of
Health. During this process, we used agency budget justifi-
cation materials, internal management documents, classification
schemes, and definitions to develop the structure and define
its categories. The close working relationships which devel-
oped helped rsearch program managers and budget officers con-
tribute valuable conceptual and editorial suggestions to the
definitions. This procedure also enabled the participating
agencies to suggest definitions which accommodated their -e-
search programs. In addition, since the information we are
requesting from agencies is not routinely available, we wanted
to give te agencies an opportunity to become familiar with
our sy¢ em so that they could use it better.

     The categories in the structure have been designed to
identify specific national objectives which are of concern or
interest to the Congress and its committees. Each category
in the structure (whether the most general or most detailed)
is to be taken as exclusive of any other category. A research
project will e assigned only to the category which represents
the primary purpose for which the research is funded. These
requirements eliminate double-counting and enable identifica-
tion of te amounts of Federel R&D funds directly contributing
to specific national objectives.

      In order to provide precise information, the
                                                   R&D budgets
 of each agency's bureaus or bureau-level equivalents
 be presented in accordance with the structure,       should
 agency's total R&D funding.                    as should the

      The roposed structure will be a upplementary
zation of total funding for all research by             categori-
                                              national objec-
tive, regardless of the performing agency's
Department of Defense (DOD) and the National mission. For the
Space Administration, which have broad chartersAeronautics and
.&D to accomplish their missions, work that        to conduct
                                              is  conducted
clusively to further that mission will be separated          ex-
having clear potential to help achieve the national    from  work
identified in the structure (all categories            objectives
                                             except Military,
Science and Technology Base, and Space Flight
ogy).   DOD and NASA R&D having such potential will be Technol-
as a part of the funding for those categories             included
shown in Military or Space Flight Systems Technology.     of being

     Assigning applicable DOD and NASA funds to categores
which other agencies are also involved is essential          in
comparison and evaluation of overall Federal          to enable
mitted to specific national objectives. For R&D funding com-
                                              example, possibly
as much as $1.5 to $2 billion of the fiscal
                                             year 177 DOD re-
search, development, test, and evaluation appropriation
$10.5 billion is for R&D in areas which have              oi
                                              a clear potential
to help achieve national objectives outside
                                             of the military

     We also recognize that some research is conducted
hance understanding of a subject and has no             to en-
with any particular national objective. This clear connection
pline-oriented or multidirectional research    kind of disci-
                                             should be included
in the Science and Technology Base category.

     Although this approach to classifying R&D
may not satisfy all congresbonal requests, it budgetary data
                                                will answer
many questions which either cannot now be answered
considerable time and expense from executive        or require
                                              branch agencies
and GAO. For example, a committee chairman
                                             requested that we
answer the following questions:

    -- What agencies conduct solar energy research
       development?                                and

    -- What is the total Federal commitment to solar
       R&D?                                          energy

    -- What solar energy R&D objective receives the
       emphasis?                                    major

The data presentation we propose would answer the    reliminary
questions and would provide the information base waich will
permit the Congress to exercise more effective oversight and

     To implement this classification structure, each agency
will assign its R&D funds to categories which it deems most
appropriate using the definitions which accompany the struct-
ure. Executive agency personnel who are responsible for manag-
ing R&D would have the information needed to assign their
projects to the appropriate categories in our structure more
accurately than external analysts.

     We believe the material accompanying the structure de-
fines the categories in an accurate and usable manner. However,
we realize that improvements may be made after agencies have
used the structure as a basis for presenting supplementary
budget information and provided comments based on this experi-
ence. Congressional experience in using the information may
also reveal further improvements which need to be made. Al-
though we have received some proposed changes, we have deferred
including them until after the entire structure has been used
and all recommended hanges can be considered.

     As the structure and its accompanying definitions are
used and refined, changes in the kind of information provided
may become desirable. During the partial implementation which
OMB conducted, time limitations did not permit gathering in-
formation on precise subsets of categories in the structure.
For example, totals for aircraft noise abatement were not pro-
vided in the Control and Abate Pollutants/Noise category. When
the structure is fully implemented, total funding committed to
this and other such subjects will be available. New subjects
within categories or new categories can be added to meet new
needs generated by specific interest. In further development
of the structure, coding ight be added to categorize each
research project's secondary payoffs. With th3is coding, the
structure could reveal both primary and closely related re-
search for any given objective.

     In September 1975, we sent the proposed structure o the
Office of Management and Budget (OMB) (see app. V) and recom-
mended that OMB request agencies to furnish this information.
OMB agreed to gather data on selected categories of the struc-
ture for presentation with the fiscal year 1977 budget.  (See
app. VI.)  Fourteen agencies provided information for this
partial data collection effort, which included all or part of
7 of thestructure's 13 categories. This test demonstrated
that OMB and the agencies are able to familiarize themselves

with this system and its definitions, implement the new struc-
ture, and present the information to the Congress in a timely
manner.  (An example of the data obtained for the selected
categories is shown in app. VII.)  The committees and subcom-
mittees which received this first test data found it to be
useful, and some of them relied on it during hearings and
mark-up sessions.


     We have found that the Congress and its committees need
improved information on Federal R&D activities. This could
be accomplished to a great degree by presenting Federal R&D
budgetary information annually in accordance with a single
classification structure representing the national objectives
the research is intended to achieve. Information compiled in
this manner should be of significant value to the Congress as
it analyzes, oversees, and guides R&D resource allocation.

     The unified classification structure outlined in this
report (see ap. VII for an example) was partially impleme ed
during the fiscal year 1977 budget preparation process. This
partial implementation successfully demonstrated that informa-
tion on the Federal R&D effort can e collected, presented,
and used in a more rational and effective manner than hereto-
fore has been possible.

     We recor nend that the Director, OMB, require that budget-
ary data on Federal R&D activities be collected in accordance
with the unified classification structure proposed in this
report. This presentation would supplement existing budgetary
presentations and should include prior, current, and budget
year information.

     Since this requirement cannot be incorporated in the
regular budget process for fiscal year 1978, this information
should be presented to the Congress utilizing fiscal year 1978
information as soon as possible. Starting with the fiscal year
1979 budget, OMB should include this budgetary data in the
regular budget process and present it to the Congress concurrently
with the annual budget submission.

                           CHAPTER 3


     Traditionally, the Congress views R&D in the context of
each agency's specific programs. During our interviews and
meetings, staff members of some committees with jurisdiction
over R&D discussed the need to review R&D budgets in a Govern-
ment-wide context and the inability of existing sources to
provide them the information they needed to do so. They
emphasized a need for an information system which cuts across
agency lines on subjects such as air pollution control and
abatement, energy, materials, and astronomy. In addition,
various congressional staffs have requested that GAO and
other agencies conduct surveys in order to provide this type
of information about specialized subjects.

     The presentation described in this report would enable
the Congress to see how Federal R&D dollars have been and are
proposed to be applied to a single set of understandable
national objectives.


     The need for additional R&D information bcame apparent
during the energy shortage of 1973-74 when the Appropriations
Committees recognized that energy R&D demanded high priority
attention. In order to gain an overview of the thrust of
the Federal energy research and development efforts' and to
provide the necessary emphasis that this 'crisis" required,
the Appropriations Committees consolidated the appropriations
for all energy R&D conducted by seven agencies and numerous
bureaus in the Special Energy Research and Development Appro-
priation Act, 1975.

     Although this legislation was a reaction to the energy
shortage, the Appropriations Committee indicated that an ade-
quate mechanism for determining an individual agency's and
the total Federal commitment to energy R&D goals was not
available and one was needed. The supplementary information
we discuss in this report should help the Congress to deter-
mine the specific national objectives towards which Federal
funds are committed and to apply resources as appropriate.

        A presentation of Federal R&D dollars
 relatively constant and comprehensive          using a single,
 national objectives should improve the   structure   of specific
                                           Congress' analytical and
 oversight capability in two important
       First, by requiring all agencies to assign
 projects to a common set of national                 their research
                                        objectives, this supple-
 mentary presentation will enable users
 the purposes for which Federal R&D fundsto determine more easily
 With this unique budgetary information, are being spent.
 understand, compare, and analyze both      users can better
 the total Federal commitment to R&D.    agency   R&D budgets and
mit more effective examination of existing     will   in turn per-
                                               and planned R&D
 resource allocation in relation to national
       We have found that inadequate
for effective R&D in certain areas. resources are available
                                        In "Federal Programs for
Research on the Effects of Air Pollutants,"
11, 1975, we reported that inadequate           RED-76-4o, December
to develop an information base for air   resources   are committed
Also, in "Research and Development Programs         standards.
Quality Goals: What the Federal Government to Achieve Water
                                                Needs to Do,"
B-166506, January 16, 1974, we found
discharge from power plants has been   that   research   on thermal
funding. A crosscutting view of all delayed because of limited
                                       Federal R&D activities
would permit the Congress to consider
are being applied in line with nationalwhether R&D resources
      Second, linking research to national
wnere more effective coordination           objectives will show
                                   is required among partici-
pating Federal agencies. Over the last
published several reports on specific     2 years, we have
which discussed the absence or inadequacy       R&D activities
among agencies involved in those activities.of coordination
reports, we found that the absence of          1/ In these
of these activities hirt the programs  effective  coordination
                                       involved and often re-
sulted in inefficient se of resources.
effective coordination f he use of         We concluded that
                                      resources is essential.
     To coordinate Federal R&D efforts,
sented in accordance with our structure the information pre-
                                         will help agencies

l/"GAO Revie',s of Federal Environmental
                                         Research and Develop-
  ment," RED-76-95, Apr. 7, 1976; "Federal
  search on the Effects of Air Pollutants," Programs for Re-
  1975; "Federal and State Solar Energy      RED-76-46, Dec. 11,
  and Demonstration                      Research,
                     Activities," RED-75-376, June Development,
                                                   10, 1975.

ccmpare their related research activities. This will help
identify and therefore decrease unnecessary uplication among
research projects and insufficient coverage of specific
national objectives.

     Since this supplementary information will present prior,
current, and budget year unding assigned to the same or
similar categories, analysis of trends and changes in the
Federal R&D commitment to specific national objectives will
also be facilitated.

     In addition, our review of information dissemination
on air and water pollution research and materials R&D ("Fed-
eral Materials Research and Development: Modernizing Insti-
tutions and Management," OSP-76-9, Dec. 2, 1975) revealed in-
adequate central organization in the Federal Government for
identifying and coordinating available research results and
information. Since the information provided in accordance
with our structure would indicate the national objectives to
which various agencies are committing their resources, this
information could be used to identify the agencies conducting
research in areas of specific interest. In turn, the user
could ask the agencies identified in this manner about research
results or products in these areas. In other words, the in-
formation presented in our structure could be used as a pre-
liminary means of identifying agencies which may be able to
disseminate information on specific research activities.


     On May 11, 1976, the President signed into law H.R. 10230,
the National Science and Technology Policy, Organization, and
Priorities Act of 1976. This act (1) establishes a science
and technology policy for the United States, (2) provides
scientific and technological advice and assistance to the
President, and (3) provides a comprehensive survey of ways and
means for improving the Federal effort in scientific research
and information handling. More specifically, this act empha-
sizes needs for centralizing policy planning, identifying
public problems and objectives, mobilizing scientific and
technological resources for important national programs, and
meeting the "responsibility of the Federal Government * * *
to coordinate and unify its own science and technology infor-
mation systems."

     We believe that the presentation of the total Federal R&D
budget in a single structure of national objectives would con-
tribute greatly to the achievement of legislative goals out-
lined above and is consistent with the overall intent of the


     The Congress needs a means of viewing the total Federal
R&D funding commitment to various subjects on a basis which
cuts across agency lines. Information which will satisfy this
need should enable users to determine the level of commitment
to specific national objectives, to ascertain the interrela-
tionships among different agencies' R&D activities, to facili-
tate identifying areas where more effective coordination is
necessary, and to evaluate whether research funding is in
line with priorities.

     We believe the classification structure described in this
report offers the most thorough and efficient way of helpinq
to analyze and oversee Federal R&D.

                          CHAPTER 4


      In addition to the individual agency budget justifica-
tions, there are several sources of Government-wide R&D bdg-
etary information. We have examined the more prominent
Government-wide presentations and have concluded-that they
are designed and used to satisfy information needs which differ
from the needs we address in this report. These presentations
were not intended to and do not provide a timely supplementary
comparison of agencies' Federal R&D furding indicating rela-
tive funding applied to specific natio_ ' objectives. They
include the Budget of the U.S. Governr.   , the National Science
Foundation's Analysis of Federal R&D funding by function, the
Federal Council for Science and Technology's fiscal year 1976
"R&D Program," and specialized subject reports. A discussion of
each follows.


     The Budget of the U.S. Government includes a section
entitled "Federal Program by Function" containing information
on R&D, Special Analysis P on Federal Research and Development
Programs, and several other special analyses that include
limited information on research and development.

"Federal Program by Function"
     The "Federal Program by Function" section of the Budget
of the U.S. Government displays all Federal funding on a func-
tional basis.   It is designed to accomplish for the entire
Federal budget what we seek to accomplish for R&D: to facili-
tate understanding and analysis. In our presentation we
employ concepts similar to those used in preparing the "Fed-
eral Program by Function." The categories transcend agency
or organization lines and activities and are assigned to their
primary purpose on a mutually exclusive basis. In other words,
they are assigned only to the one category which reflects their
primary purpose.

      in chapter 3 of this report, we discussed our purposes
for creating a new presentation of Federal R&D budget infor-
mation. These purposes cannot be achieved with the level of
detail contained in the "Federal Program by Function." For
example, the functions which do include an R&D category show
amounts which generally do not correspond to amounts
shown in related categories in other Government-wide R&D
sur-eys. Not all functions in the "Federal Program

 by Functionn include a subfunction or line item
                                                 for R&D.  The
 following information from the fiscal year 1977
                                                 Budget illus-
 trates these two points.

                            NATURAL RESRCES, ENVIRONMENT. AND ENERGY
                                                    [In million of dlla i

                  F-nram or aency                                            Outlay%                         -- ded
                                                        1975            19          T              1976
                                                                                                   1977      utorit
                                                       actual         estimate   etimnat      e   timte     for 19771

         General opagtig pruam                                  66          369         41            478         689
         Regulatin -                                          10            172         44            178         171
         Rerch and devept-                                  1,441        2.051          544        2.677        3,078
         Energy Iepandace Autlcr ity-                 .-.                 -     ---                    42          42
             Suotl, alurl.g ____y_.-                        1611         2,592         629         3,375       3,961
         MPell ael    aui beteme:
         Sew plant ctructa grant.                           1.938       2.350          600        3,770       (')
         Other                    .-...                       S85
                                                              8----        737         216          618             631
              Subtotal. pollution c *told ed
                a       ctemnint
                             .-.       ..........       2.522           3,087          816        4.388             631

         IInformatio n os budget authority fer 1975. 1976. and the transition quarter is shown
                                                                                               in table
           Because 6 billion of budget authority will remains unoblilatod. so new budget authority is
       rolustod for 1977.
         i Jundr pepoeed lesitioo, metgains or leases of the Erg, ldependesce Authority ill be
       icluded within the budet. Gr    trnsa.tis of this corporation appear of-budget in the annexed
       budet section of the udget         eppaodin.

This example demonstrates two aspects of this presentation
which fall short of the congressional information
                                                   needs we
have identified. First, the only information presented
Energy R&D is an undefined total for the Federal         for
Our analysis requires detailed definitions and    Government.
                                               information by
agency. Second, some categories, like pollution
abatement, do not include an R&D line item. A     control and
                                               related problem
occurs in some subfunctions in which research is
                                                  combined with
other activities. For example, Research and General
Aids are combined in the Education, Training, Employment,
Social Services function.                                  and

Special Analysis P--Federal Research
and Deveopment Programs

     Special Analysis P summarizes
porated in individual agency budgetstheandfunding of R&D incor-
                                            briefly explains how
the &D funds are applied to meet general agency
                                                    or national
qoals. This analysis presents a summary and highlights

the fiscal year 1977 budget as it affects Federal funding of
R&D, long-term trends in Federal support of R&D, and descrip-
tions of the fiscal year 1977 R&D programs of 11 major agencies.

     However, Special Analysis P does not fulfill the need for
information indicating the Federal commitment of R&D funds to
achieve specific national objectives by agency. Only the
following chart fom the analysis cuts across agency lities.

                 CONDUCT OF R. & D. BY MAJOR PROGRAM ARlt
                                     (Ol igam     i        . of Adh")

                             Prep,                                  FtS197 t196 TfJ           1n
                                                                  actual e1timat. stimae egotimat

      Cnduct Rf. D.:
                ......                                              9.6     10.6      2.7     12.0
               -- -- - - - - - -- - -- - - -- - - - - -                      2.7       .7      2.9
       Civin (other thn aq) ----                                    6.9       .0      2.0      8.6
            TOWl-                        ............---           19.0     21.3      5.4     23.5

         I Includes military-related prorm of tb Enrgy Recarch and Developm*t Adrlinitrtiee-
      tranfered from the AEC.
           Include. all NASA prorm. sacept erosautical research. apae appicti.. (0.4. peIuttln
      monitoring. comrmuicatioua. earthb ob*vatis). enery techielogy pplicete.   ad t   lhelgy
      utilization. which are cluified as civilian program.

This summary-level presentation does not include categories
which facilitate analysis and oversight of the Federal R&D
commitment to specific national objectives.

     After this summary and a brief discussion of long-term
Federal R&D funding, the analysis discusses the R&D programs
of the larger agencies. However, the agency presentations
include categories peculiar to each agency. The following
chart which shows the Department of Health, Education, and
Welfare's (HEW's) R   budget provides an example of agency
specific categories whAch cause the lack of a basis for

                                                              AND DEVELOPMENT
                                     m   d, srm)
              ,. area.- and orgaiaatieal uitl                                    Oblilgatie                                       Outlay.
                                                                   1975       1976            TQ        1977       1975      1976
                                                                  actual    estimate                                                      TQ   1977
                                                                                            etimate   estimate    aetual   estimat. estimate    mat,,
Conduct of R &D.:
   National Institutes of Heal-               .
   Alcohol. Drug Abuae, and Mental H lth Administrtion....- 1.856  140
                                                                                                         1I.78     1,630     1,878       439    1,999
   Food and D Admiitrtion                                                                                  128       114        91        20       88
                                        -        -                  35             36             9         45        27        28         7
   Center for Dia Control...-..-----..-.-....             .         41             44                                                              32
   Health Resources Adminirtion-------------                                                     12         50        42        43         6       38
   Auitant Sectaery for Health -.............                       42             34             5         32        60        34        25       27
   Healtb Services Administration - ---                              6             13             2          14        6        11         2       12
                                                ......              17             14             3           2       10        14         3        5
     Subtot.          .-......                                 2,heatbh
                                                                              2.063            470
 Education:                                                                                             2.249      1,889    2099         512   2,I01
   Olce of Auant Secretary for Education -.....                     12            12
   Oie of Education Ed -cat--n                                                                              12        11        12                 II
                                                   -----------       S% 102                      7         102        51        68        19
   National Institutk of Education ----------                      70             70                                                               92
                                                                                                2D          90        83        70        14       88
     Subtotal educa tio.n-...        ..-----------                    141        184            27
 Welfare:                                                                                                 204        145       150        33      191
   Oice of Humn Developmen-t-----                                      59         62            13
   Soc" Security Adminition -.                                                                             56         42        54        15      57
                                                                       23         26             7         27         21        22         5      25
   Deqartnental Manugement - - --                -26                              25             7
   Social ard Rehbilitatio Srvice -...-....-....                                                           25          9        32        11      30
                                                                        9          9             2          9          2         9         2
     Subtotal.,eufare-.-    ----------------------            -      117         122            29        117         74       117        33     120
     ToaalI      meu R.&--D-2,X
                         - -----                                       5      2,30            SU       2578       2,108     2,3664      578    2,51
    Cdct ru      , id ...... ve ---.--.                            1,,          , "1          437      2, 70
    Cest of Umkp              aboe------.-                                                                        1, 1      1,92        471    2,031
R. D. facilitia-                                                    46S           46           8                   427        434       107      481
                                                                       39          27           4          1i        81        38         5       26
     TOl -2,4........34--....                                --         1       , 3N6 . 5              2,
                                                                                                       581        2, 189    2,464       583

         In the material presented for some agencies, the
   tion is presented in a general narrative with          informa-
                                                  little specific
   detail.   For example, the following paragraphs were used
   describe the Department of Agriculture's                   to
                                             $507 million R&D

                    "Obligations of the Department of Agriculture for
               the conduct of research and development, excluding
               struction of facilities, will increase from
                                                           $483 million
               in 1976 to $507 million in 1977.

                   "At no time in recent history has the need for new
              technology for increasing our capacity to produce
                                                                food been
              more apparent.  In addition to reductions in reserves of
              basic commodities, consumers face higher costs
                                                             for all

     kinds of food and fiber products. Agricultural efficiency
     is increasingly vital to our national well-being. Improved
     efficiency in American agricultural production can also
     help ease critical worldwide food shortages.
          "Obligatio,.s for basic research will increase from
     $177 million in 1976 to $197 mi.llion in 1977. Emphasis
     will be in ouch areas as cell biology, improvements in the
     photosynthesis process, and new research on nitrogen fix-
     ation; increased efficiency in the production of meat
     animals; developing aditional sources of usable proteins
     from vegetable sources; and protecting against devastating
     losses to major food crops resulting from genetic vulner-
     ability to disease by collecting, testing, and preserving
     diverse germplasmic materials.
           Environmental research will include the further
     development of nonchemical.means of controlling agri-
     cultural pests, and the development of information re-
     quired for the clearance of agricultural pesticides for use
     in cooperation with the nvironmental Protection Agency.
          "The Department of Agriculture, in cooperation with
     State and private research organizations, will continue
     development of a national system designed to improve coordi-!
     nation in the planning, financing, and evaluation to agri-
     cultural research.   The goal of such a sy&t;W   dill   be to
     increase the overall efficiency and effectiveness of
     agricultural research.
     These two exhibits demonstrate the purpose of Special
Analysis P--to provide summary-level information about the
agencies' R&D activities. Sufficient information is not pro-
vided to compare different agencies' commitments to similar
objectives. For example, both HEW and the Department
Agriculture conduct research to identify pollutant effects.
However, the information presented in these two exhibits
could not be used to pinpoint the amount of funds committed
or the specific objectives involv¢c.

Other secial analyses
     In addition to Special Analysis P, Federal Research and
Development Programs, several other Special Analyses' include
some information on R&D. These special analyses discuss
functional areas which include R&D as a relater but secondary
aspect. Special Analysis I (education), pecial Analysis K
(health), Special Analysis M (civil rights activities), Special
Analysis N (crime reduction), and Special Analysis Q (environ-
mental programs) highlight R&D funding related to these Govern-
ment-wide activities.

     Although this attention to all related Federal R&D activ-
ities is informative, the inconsistent approach taken in the
different analyses poses certain problems for our purposes.
The quality nd the approach of the analysis varies from sub-
ject to subject. For example, the education R&D analys's is
confusing and of limited utility from our perspective because
it has minimal narrative material and the following chart com-
bines functional and institutional categories.

                         RESEARCH IN EDUCATION

                                                                                      Outlays (millions)
                                                                     1975                1976            TQ            1977
                                                                    actual            etilmate        estimate       estimate

         Education research:
            Educational development...         .         ..----                77               16              I             2
           Elemetary and ,econdary education -...                              78             103              34            90
           Educatin for the handicapped...                ..                   38              46              13            56
           Occupational. vocationL ndadult education.....                      45              48              10            34
           .Speciai projects and training        ....                                            4              4
           Assistant                                                                                                         19
                      Secretary for Education      .........                    10              11
           National Intitute of Education ...                                                                                10
                                                                               83              70             13             88
           National Foundation on the Arts and lumanities...                   46              SO             20
           National Science Foundation ---..... ..--                                                                         8
                                                                               30              32             10             36
           Other         - -...... -...             -                            9             12              I              9
                 Subtotal. educational resear.ch-........                    416           422              106           432

     In contrast, the health special analysis includes a more
understandable chart which indicates the Federal commitment
to specific disease groupings and health problems.

                        RESEARCH FACILITIES
                                               (i rin    s of dollars)


                                                                    1975               1976            TQ             1977
                                                                   actual            estimate        estimate       estimate

        Cacer.                                                           499            572              128             666
        Cardiovascular -------------------------                         266            286               62             311
        Mental helth -                                                   1o             127               26             113
         eurological and visual--------------------------     -          155            174               50            l88
        Population and family planning -...--------------                 5              73               18
        Environmental health                                                                                             65
                        ..-....................                          300            408              122            523
        A'ng       -e53                       .......                                    49
                 Mdiees-------------------------------                                                    13             63
                   t    c                                                137            197               32            188
        Cild health.                                                      72             OS5             25               96
        Infectious diseases-__-----:Z--::::ZZ:::                         130            153              57              160
        Punonary--.....                                                   48             53              12               56
        Dental -42                                                                       46              10
        Heath ervices research and development-79                                                                        57
                                                                                         65              32              51
        Ote research and development--------------           -       507                519             123
        Resewch fcilities                                                                                               507
                        a80                                                              36               5              26
              Total-----------------------------------                   ,                    2,         716          3, 074

     The differences between these two analyses imply that
there is no attempt to prepare them in a consistent manner
or to have them reflect specific national objectives. A
different problem arises because the various special analyses
appear to permit recognit on of both primary and secondary
research objectives and, therefore, the same research could
be reported in more than one section, inflating the level of
R&D commitment in those sections. In addition, not all of
the special analyses include an R&D category. Consequently,
the special analyses do not provide a basis for accurately
determining the amount of funds committed to national R&D
objectives. Furthermore, they do not lis: all funds committed
by specific agencies to the pertinent categories. Often large
amounts are categorized under the catch-all heading of "Other."
     From this review of the special analyses contained in
the President's Budget, we conclude that R&D information is
included on a random basis which, for our purposes, is
confusing to use and occasionally insufficient or misleading.
Furthermore, the special analyses do not present comprehensive
information indicating the Federal R&D commitment to specific
national objectives.


     The National Science Foundation's Analysis of Federal
R&D Funding by Function is prepared annually "to fill the need
for examining over a timespan the comparative levels of Fed-
eral research and development support provided to selected
areas." It is used to analyze trends in Federal R&D programs
within a functional framework which reflects national concerns.

     The report presents Federal R&D programs in terms of a two-
or three-level structure. The categories used are mutually
exclusive--dollar amounts are reported only once. We used
this report as a starting point for developing our classifi-
cation structure for several reasons:   it offered the most
thorough and rational approach to analyzing Federal R&D, the
categories described meaningful national objectives, and it
provided for interagency comparability.

      This report, however, does have limitations which restrict
congressional usefulness. Since NSF personnel assign entire
agency programs to one function, some dollars are unavoidably
inisassigned. Related to this problem, the general definitions
of the categories are not sufficiently precise to permit a
reader to know specifically what is included in each category.
Also, the NSF structure is considerably less detailed than
we consider necessary. Finally, it is published 8 to 10 months

after submission of the budget to the Congress and therefore
is not available in time for the congressional budget process.

     The Federal Council for Science and Technology prepared
the Reprt on the Federal R&D Program FY 1976, which presents
the   ghlights of te fiscal yearV76 R&D program. This
document was prepared "to focus more strongly on program con-
tent than o; budget detail." It discusses major agencies'
R&D activitiec in detailed narratives. In addition, it pro-
vides narrative and some budgetary information categorized by
agency on R&D activities in high interest functional areas.
The report was made available in timely fashion--shortly after
the fiscal year 1976 Budget was submitted to the Congress.
However, a followup report was not made for the fiscal year
1977 Budget and in May 1976, the Federal Council for Science
and Technology was abolished by the National Science and
Technology Policy, Organization, and Priorities Act of 1976.


     Several organizations, including GAO, prepare (both
regularly and upon request) reports and analyses on specific
Federal R&D activities. Among these are the    deral Health
Survey of the National Institutes of Health; along with reports
in other subject areas, GAO studies of R&D in the areas of
materials, general environmental, and air pollution effects;
and the National Academy of Science Study Project on Social
R&D. These reports are generally prepared to determine among
other things, the total Federal R&D commitment to a specific
subject, the level of individual agency commitment to that
subject, and the degree o coordination which exists among
involved agencies.

     Since the information needed for this type of report is
not readily available and may require extensive analysis to
develop, these reports can be very expensive to prepare. Our
proposal that agencies adopt an additional classification sys-
tem for their R&D projects will also involve additional cost.
However, it should be more efficient for agency officials to
provide this information about their research projects during
the budget cycle than to have individual reports prepared to
L.spond to interest expressed in one specific subject. Fur-
thermore, information provided by the agencies should be more
accurate, will include all Federal R&D, will be available for
consideration along with the budget, and the process can be
easily repeated on an annual basis.

     Because these reports generally focus on one specific
subject, research which has potential secondary payoffs in
that area may be included in them. By including all related
research regardless of its primary purpose, these reports often
indicate an inflated level of effort committed to their sub-
ject. For example, with our structure, research conducted to
reduce aircraft engine emissions would be classified primarily
in the controlling and abating air pollution category. How-
ever, without precise definitions and restrictions on classify-
ing research, this work could be assigned to an energy or air
transportation objective where it might have secondary benefits.
These latter classifications would inflate in a possibly mis-
leading manner the funding level committed to those objectives.
To prevent this situation, we propose that funds be assigned
only to their primary purpose.
     We have found that the Congress needs additional budg-
etary information on R&D activities. The various presenta-
tions cui.ently available are designed and used to satisfy
information needs which differ from the needs we address in
this report. Existing information sources do not provide
readily useable information identifying the level of R&D
funding by agency committed to specific national objectives,
Therefore, the classification structure described in chapter
2 should be implemented.

                             CHAPTER 5

       In an October 26, 1976, letter (app.
 of Management and Budget advised us that itVIII) the Office
                                              disagrees with
 our recommendation that the Director, OMB, require
 data on Federal R&D activities to be collected       budgetary
 with the unified classification structure proposed accordance
                                                      in this
 report for presentation in a supplementary document.
 tinue to support the implementation of the structure We con-
 not consider the problems raised by OMB to be          and do
 to delay implementation of the structure. The  valid  reasons
 in OMB's letter are discussed below.            issues raised

      OMB stated that a useful course of action would
                                                           be to
 develop some limited supplementary R&D data
 basis to cover specific problem areas identified an   interagency
 Congress, thus avoiding the collection of too       by the
                                                 much data.
      Problems in R&D are becoming increasingly complex
affect many sections of our society and economy.             and
with these more complex problems, the Federal         To cope
                                                Government must
manage its R&D more effectively. An approach
ment which facilitates anticipation             to R&D manage-
                                     and analysis of problems,
planning solutions to them and committing resources
ing the desired results, must be established.            to achiev-
                                                  At  the
time, R&D management policy too often is characterized same
committing R&D to problems after they have been              by
crises. Special needs will continue to arise       triggered     by
                                                requiring data
gathered in specific problem areas. However,
needs more than "some limited supplementary     the Congress
development data on an interagency basis to  research     and
problem areas identified by the Congress."   cover    specific
                                             It needs a full
and clear picture of R&D funding on a Government-wide
for use in making informed decisions and avoiding          basis
management. Our structure would provide an           crisis
                                             important first
step in this direction.
     Once a comprehensive collection process that
information to the Congress that can be used
                                              in the annual
budget review has been stablished, modification
made to highlight areas of specific interest       can be
context of the total R&D budget. Furthermore, in  the realistic
specific areas will be facilitiated when the     reporting on
                                             entire structure
consists of objective-oriented categories. For
craft noise ad traffic control are areas of       example, air-
which have already been included in the structure.     interest


     OMB refers to the national needs and mission needs
efforts of subsection 601(i) uf he Congressional Budget Act
of 1974 and specific recommendations of the Commission on
Government Procurement and concludes that these efforts should
be rationalized with ours before any one sructre is adopted.

     We are involved in a number of activities to improve the
budget information provided to the Congress. These are dis-
cussed in appendix I.
     We recognize the requirements of subsection 601(i) and
are taking them into consideration in all of our budget infor-
mation activities. We do not feel that it is prudent to defer
action on the R&D analysis until it is rationalized" with
the approach to be taken to implementing 601(i). We favor
attempting to "rationalize" the 601(i) structure with the
primary budget structure (the functions and subfunctions),
and we are exploring this matter with the organizations in-
volved and exchanging views.

     Our ongoing study of the recommendations of the Commis-
sion on Government Procurement complements the R&D classifi-
cation structure proposed in this report. This report
proposes to provide the Congress witt supplemental budget
information showing how the R&D activities of the various
Federal agencies relate to national objectives. The purpose
of the GAO study of recommendations of the Commission on
Government Procurement is to assist the Congress in deciding
whether or not it should adopt the mission approach that has
been recommended by the Commission. Our latter report will
describe and illustrate the new approach and discuss its im-
pact on the congressional budgeting process.
     It is true that if the Congress eventually decides to
adopt the new approach recommended by the Commission on
Government Procurement, the objectives of agency R&D in terms
of agency missions should then become clear as part of the
normal budget process. This should happen because the budget
would be presented in terms of mission end purposes of the
agencies. These mission activities of the agencies would
in turn be grouped by major Government functions or national
needs, and the end use of a portion of the R&D budget would
then be visible to the Congress. However, this would still
leave the problem of disclosing to the Congress the inter-
related objectives of several billion dollars of Federal
agency R&D work which is not uniquely related to single
agency missions, including technology base and other R&D.

       If the mission-oriented approach is adopted, it
 that it would be implemented on an evolutionary        is likely
 period of years. R&D activities are included in  basis  over a
 budgets that they are difficult to look at in a   so many  agency
                                                  cohesive manner
 without a major change in structure. This across-the-board
 structuring is possible in a supplementary presentation        re-
 be undertaken now. The unified objective classification   and  should
 ture proposed in this report is needed to fill             struc-
                                                 a current infor-
 mation gap, will serve as a basis for defining
 if mission budgeting is implemented, and will continue needs
 needed for Federal agency R&D work which is not          to be
 ted to single agency missions.                   uniquely  rela-

     OMB stated that the detailed presentation required
                                                         by our
structure would be in addition to R&D budget submissions
made by the agencies and would require a considerable     already
of agency and OMB effort.                             amount

     A review of the information collected for the various
special analyses o the Budget of the United State     4
that some analyses require considerably more detailed .ndicated
mation than the existing analysis for R&D. The          infor-
feasibility of collecting detailed               demonstrated
as health and education supports theinformation in such areas
                                      contention that increased
R&D information is equally feasible. Once the
system which we describe in this report has beeninformation
difficulties have been resolved, it may replace tested and
                                                 the insuffi-
cient, summary-level information presented in the
Special Analysis of Federal Research and Development

      OMB stated that our structure requires arbitrary
cation of activities and may lead to                     classifi-
                                      inconsistent data.
      We acknowledge that this structure
classifications. OMB's Special Analyses,may  require some arbitrary
                                           the National Science
Foundation's compilation, and other presentations
bitrary classifications. However, we have attempted also require ar-
                                                       to reduce this
this factor by developing, with the extensive assistance
agencies, a set of scope notes defining each category       of many
ture and indicating how assignments are to be made.      in the struc-
will assign R&D to appropriate categories based        Agency  officials
This will be less arbitrary than assignment by   on  these  definitions.
                                                a single agency. We
remain steadfast in our belief that our carefully
ly exclusive structure is necessary and desirable defined, mutual-
                                                    because it mini-
mizes arbitrary assignments and displays changes
they occur. With respect to secondary payoffs     in emphasis when
                                                of research, such
as OMB's example of energy-related work that is
                                                 primarily environ-
mental we propose that at a later date a secondary
be developed hich would allow reporting of this       coding scheme
                                                  sort of payoff.
In any event, our first goal is the adoption and
standard classificaiton and set of definitions.   use of the


     OMB emphasized that sufficient time be allowed for
planning, agency familiarization, and a thorough review of
the data submitte-d.

     We agree in part. Since we recognized the need for plan-
ning and agency familiarization, we carefully contacted all
agencies which would play a major role in this information
system so that they could participate in developing it.
Fortunately, most agencies chose to cooperate with us in this
task, and the planning and agency familiarization occurred to
a considerable extent while the strucutre was being prepared.

     The level of review required for this data should not
differ greatly from that presently accorded other special
analyses of the budget, such as education and health. We
believe the agencies themselves can best judge the purposes
of their research and accordingly should assign their research
projects to our structure. While it would be necessary for
OMB to review the data for conformance with the budget, this
workload does not appear unreasonable, given the publication
of other special analyses involving a comparable level of
detail. Our discussion with congressional staffs led us to
conclude that they are interested in the agencies' best judg-
ments about each research project's primary purpose. We con-
tinue to believe that the submission to the Congress of
information prepared in accordance with parts of our structure
in January and February 1976 demonstrates that this information
requirement can be handle     agencies much more easily than
OMB contends.


     During 1975, GAO, OMB, and Department of Treasury staff
discussed ways of improving the R&D information which is
made available to the Congress. After these meetings, the
correspondence presented in appendixes III and IV was ex-
changed. In responding to the Comptroller General's letter,
the Director of OMB agreed to present information on selected
critical areas to the Congress concurrently with the budget
(app. VI).  In addition, the Director stated "we believe that
it would be extremely desirable to test a system through a
dry run after the 1977 Budget is submitted. .. ." Despite our
offers of encouragement and assistance, OMB staff never con-
ducted the test of the structure which the Director proposed.

APPENDIX I                                        APPENDIX I

                   OUR'ACTIVITIES'TO IMPROVE

     There are a number of activities underway to improve the
budget information provided to the Congress. We are involved
to varying degrees in most of these activities. They affect
the President's Budget, Special Anelyses of the Budget, the
Appendix to the Budget, agency justifications, and special
reports for congressional authorizing committees.

     We have two projects underway that relate specifically
to R&D information. One has resulted in a proposal for a
Government-wide budget classification structure for Federal
R&D activities. Information compiled in accordance with
this structure should be of considerable value to the Con-
gress as it analyzes, oversees, and guides R&D resource
allocation. We have recommended that a supplementary bud-
get presentation using our structure be presented utilizing
fiscal year 1979 budget data. Starting with the fiscal
year 1979 budget, OMB should include this budgetary data in
the regular budget process ad -. resent this supplementary
presentation concurrently with the annual budget submission,

     We are performing a study of recommendations from a
bipartisan congressional Commission on Government Procure-
ment which recommended a mission budgeting approach for
funding Federal R&D. The purpose of this study is to assist
the Congress in deciding whether or not it should adopt a
new approach that has been recommended by the congressional

     Both of the R&D projects could affect the presentation
contained in OMB's Special Analysis--Federal Research and
Development Programs. In addition, we are working in areas
which affect two other OMB special analyses. We will be
recommending improvements in tax expenditure reporting to
the Congress, including changes in Special Analysis F--Tax
Expenditures. We will also be recommending improvements in
information and analysis of Federal credit programs which
affect Special Analysis E--Federal Credit Programs.

     The Congressional Budget Act of 1974 requires the Comp-
troller General, in cooperation with the Secretary of the
Treasury, the Director, OMB, and the Director of the Congres-
sional Budget Office to develop, establish, maintain, and
publish standard terminology, definitions, classifications,
and codes for Federal fiscal, budgetary, and program-related

                                                    APPENDIX I

data and information. On August 20, 1976, we published
port entitled "Standard Budget Classifications--Proposed a re-
Functions and Subfunctions" (PAD-76-49). This report
scribes a proposed revision of the Federal budget's
tional and subfunctional classifications to move toward
better classfication as a basis for congressional
making. The report recommends increasing the number
functions and subfunctions. This wiil provide greaterof
bility to permit rearrangement of data to meet needs    flexi-
                                                      of the
various participants in the budget process. We are
a presentation of fiscal year 1978 budget data utilizing
proposed structure to provide a basis of comparison        our
assist the Congress in deciding on the most appropriate will
ture.                                                     struc-

       Subsection 601(i) of the Congressional Budge, Act
1974 requires that the budget contain a mission-oriented of
sen t ation tied to national needs beginning with the
year ending September 30, 1979. We are actively working
get as much agreement as possible on this presentation     to
are considering the requirements of this subsection      and
                                                      in our
other work in related areas.

     We are addressing the funding methods and reporting
tices used in the budget. This work emphasizes the       prac-
include all Federal activities in the budget and to need to
in future-udgets the activities that are now being  include
We are also emphasizing the need to disclose the full
of programs in the budget.                            cost

     We are continuing to prepare information requirements
documents which address the identified needs for  information
about programs and include classification structures
level. This work affects the appendix to the budget at this
                                                       by con-
tributing improvements in the activity schedules of
accounts and improves agency justification schedules.these
ress on this work was reported on August 30, 1976,       Prog-
ress in Improving Fiscal, Budgetary, and Proqram-RelatedProg-
Information for the Congress" (PAD-76-64).

     We are acquiring, sorting, and providing budget informa-
tion to authorizing committees presented at the program
This information is required for formulating the         level.
views and estimates with respect to all items to be
in the first concurrent resolution on the budget     set forth
                                                  which relate
to matters within the respective jurisdictions or
of the committee. These committee reports are due  functions
of each year. The presentations developed for theseMarch 15
tees identify each Federal program and activity authorized

                                                   APPENDIX I

by legislation under the committees'
                                      jurisdiction. For each
program we identify the budget function
names, titles, and sections of the       and subfunction, the
                                    public laws; the name of
the program or activity; the appropriation
the administering agency; the amounts       account number;
fied in the authorizing legislation); authorized (if speci-
                                       the expiration dates
of the legislation or program; and
and outlays for the past, current, related budget authority
                                   and budget year. Because
of the continuing need for this information,
ing an automated system to facilitate         we are develop-
the required information.              updating and assembling

APPENDIX II                                          APPENDIX II



     The following outline presents the line items which com-
pose the Unified Classification Structure for Federal Research
and Development. These line items are defined in appendix IV,
which is available on request from GAO.   n many instances,
the definition includes cross-references to related parts of
the structure.

     Because of the similarities among various research cate-
gories and the precise lines which distinguish them, it is
imperative that all individuals relying on this structure--
either to prepare an agency's submission or to use the in-
formation provided--refer to appendix IV so that they know
exactly what each category should and does include.

APPENDIX II                                                   APPENDIX II
                     FOR FEDERAL RE5EARCH AD     EVELOPMENI

      A.   The Lernng Process
      8.   The Relationship btween Education/Training and Society
      C.   Education Service Dlivery
      D.   Vocational Training
      A. Petroleum and Natural Gas
         1. Improve Resource Assessment
         2. Improve Extraction and Processing
      B.      il fille
           1. Improve Resource Assessment, Exploration and Extraction
           2. Improve Upgrading Methods
           3. Improve Transmission, Storage and Refitnng
      C.   Coal
           t1 Improve Resource Assessment
           2. Improve Extraction and Processing
           3. Convert Coal to Oil or Gas
      D.   Nuclear Eergy
           1. Improve Resource Assessment and Recovery
           2. Develop Liquid Metal Fast Breeder Reactor Technology
           3. Develop Lignt Water Breeder Reactor Technology
           4. Develop Alternative Breeder Technologies
           5. Develop Gas-Cooled Thermal Reactor Technology
           6. Improve Light Water Reactor Technology
           7. Nuclear Safety
           8. Develop Fusion Power
      E.   Solar Energy
           1. Produce Solar Thermal and Solar Thermal Electrical Energy
           2. Develop Photovoltaic Electric Power Systems
      F.   Geothermal Energy
           1. Improve Resource Assessment
           2. Improve Extraction and rocessing
           3. Convert Geothermal Resources to Theral and Electrical Energy
      G.   Alternative Energy Resources
           1. Convert Wind Energy to Electricity
           2. Improve Fuel Generation from Bioconversion
           3. Improve Ocean Thermal Energy Conversion
           4. Other (st be oecitfied and described)
      H.   Energy Conservation
           1. ncrease Electricity Generation Efficiency
           2. Improve Energy Storage
           3. Improve Electric Power Transmission
           4. Reduce Energy Consumption by End-Users
      I.   Energy Systems Study and Analysis

  APPENDIY      I                                               APPENDIX II

       A. Identify Pollutant Effects
           1. Air
          2. Water
          3. Solid waste
          4. Pesticides
          5. Noise
          6. Radiation
       S. Understand Pollution Processes
          1. Air
          2. bter
          3. Solid Waste
          4. Pesticides
          5. Noise
          6. Radiation
       C. Control and Abate Pollutants
          1. Air
          2. Water
          3. ; id Waste
          4. Pesticides
          5. Noise
       D. Understand, Describe, Predict and Affect Weather and Natural Hazards
          1. Regional Environmental Systems
          2. ClImate and Weather Study
          3. Weather Modification
          4. Disaster and Natural Hazards Studies and Control
       A. Identify and Develop New or Underdeveloped Food and Feed Sources
       B. Improve Production
          1. Improve Crop Production for Food
          2. Improve Animal Production for Food
          3. Improve Prodwution of Marine Food Sources
          4. Improve ProdJctlon of Non-Food Items
          5. Improve Use of Land, Water, Fertilization. Equipment and
       C. Improve Storage and Processing
          1. Improve Storage and Processing of Food Products
          2. Improve Storage and Processing of Non-Food Products
       D. Improve Distribution and Marketing
          1. Improve Distribution and Marketing of Food Products
          c. Improve Distribution and Marketing of Non-Food Products
          3. Improve Consumpt1on
       E. Improve Safety

APPZNDIX II                                                     APPENDIX II

      V. HEALTH
         A. Dtseases and InJuries
              1. The Aging Process-Diseases and Related Conditions
              2. Arthritis and Rheumatism
              3. 81ood tiseases and Disorders
              4. Cancer
              5. 0ental Diseases and Disorders
              6. Diabetes ad Other Endocrine Disorders
             7. Dgestive- Diseases
             8. Enviromentally-Caused Health Disordrs
             9. Eye and Visual Systm Disorders
            10. 6entourtnary System    Disorders (including Ktdney Diseasa)
            11. Heart and Vascular Diseases (ncluding Stroke)
            12. Infectious and Parasitic Diseases (including
                   elsewhere classified)                        Allergies not
            13. InJuries Not Related to Diseaes
            14. Lung and Respiratory Di:iases and Dtsorders
           15. Maternal and Child Health (including    Genetics
                  classified, Fertility Regulation and Mental not    elsewhre
           16. Metabolic Dsorders
           17. Musculoskeletal Sysem and Connective Tissue
           18. Aeurological and Communicative Disorders        Disorders
           79. Nutritional Dsorlrs
           20. Skin and Subcutaneous Ttssue Diseases and
           21. Disease and Injury Base                     Disorders
        8. Mental Health
            1. Mental Illness and Behavior Disorders
            2. Mental Health Aspects of Social Problems
            3. Mental Health Base
       C. Substance Abuse
            1. Alcobolism
            2. Drug Abuse
            3. Abuse of Other Substances
       D. Health Services Delivery
            1.          Quality
           2. Control and Reduce Cost
           3. Improve Accessibility
       A. Housing
          I. Increase Opportunittes
          2. Improving Safety and Standards
          3. Improving Construction, Delivery and Costs
          4. Improving Housng Management
          5. Improving Husing Maintenance
       B. Comunity Development
          1. Preserve and Revitalize Neighborhoods
          2. Cammunty Development and Growth

  APPENDIX II                                                   APPENDIX II

        A.   Prevention of Crime (includes & total for drug trafficking)
        B.   Law Enforcement (includes a total for drug traffickitl)
        C.   Adjudication
        D.   Corrections
        E.   Juvenile Justice
        F.   Understandfing of Crime
        G.   Justice Technology
        A. Deter Attack
           1. Land-based Missiles
           2. Sea-based Missiles
           3. Aircraft
           4. Deterrent Weapons Development and Potection
           5. Command and Control Elements of Nuclear Deterrence
             6. Nuclear Deterrence -- General
        B. Defend Continental United States Against Attack
           1. Ballistic Missile Warning
           2. Ballistic Missile Defense
           3. Air Defense
             4. Defend Continental United States -- General
        C. Combat Capability
           1. Land Warfare
           2. Air Warfare
           3. Ocean Control
             4. Combat Capability -- General
           5. Theater Nuclear Forces
        D. Defensewide Applications
           1. Intelligence Systems
           2. Conmunications, Command and Control
           3. Area Navigation Systems
           4. Military Personnel Management and Utilization
           5. Biomedicine with Exclusive Military Applications
           6. Nuclear Weapons Effects
           7. Chmical/Biological Weapon:
           8. Weather Modifications
        A. Forests
        B. Land
        C. Minerals
           1. Improve Means of Locating and Assessing Mineral Sources
           2. Improve Mineral Extraction and Recovery Techniques
           3. Improve Mineral Processing Techniques
           4. Improve Techniques for Reusing and Recycling Materials or
                 Products Made from Minerals
           5. Improve Mineral Supply/Demand Analysis

                                                               APPENDIX II

          C. Recreation
          E. Water
          F. Wildlife
           A. Astronomy
           B. Atospheric Sciences
          C. Biology
          D. Chemlstry
          E. Computers
          F. Engineering
          G. Geological Sctences
          H. Materials
          I. Mathematical Sciences
          J.    asurement and Stndards Technology
          K. Oceanographic Sciences
          L. Physics
         N. Psychology
          N. Science Information Technology
         0. Science Policy, Managment Technology
         P. Social Sciences                       and Other Special Programs
         Q. Surveying, Mapping, Charting and Geodesy
         R. Telecounnicatons
         A. Space Transportation Systems
             1. Space Shuttle
             2. Spaclab
             3. Interim Upper Stage/Tug
             4. Other Space Transportation Systems
         8. Space Flight Equipment Engineering
             1. Energy Systems
             2. Huan Operations n Space
             3. Information and Cnunicatien Systas
            4- Materials Usod in Space Vehicles
             S. Propulsion Systems
            6. Space Vehicle Aerothermodynwtc
            7. System and Design Studies       s
            8. Vehicle and Satellite Structures
            9. Vehicle Guidance and Control
        A. Air
           2. Improve Aviation Operational Enviromnt
                                                     and Effectiveness
           3. Improve Aviation Safety

                                                               APPENDIX II

        B. Rail
              1. Improve Rail Vehicles
              2. Improve Operational Environment and Effectiveness
              3. Improve Rail Safety
        C.    Highway
              1. Improve Vehicles
              2. Improve Operational Environment and Effectiveness
              3. Improve Highway Safety
        D.   Marine
              1. Improve Marine Vehicles
             2. Improve Marine Operational Environment and Effectiveness
             3. Improve Marine Safety
        E.   Pipeline
             1. Improve Pipeline Equipment and Operational Effectiveness
             2. Improve Pipeline Safety
        F.   Multi- and Inter-modal
        A. Community Services
        B. Foreign Affairs
           1. Foreign Aid
           2. International Agreements and Foreign Policy
        C. Income Assistance
        0. Manpower
        E. Regulatory Activities
        F. Saety
           1. Occupational Safety and Health
           2. Consumer Products Safety

APPENDIX III                                    APPENDIX III


     Encompasses research to identify pollutant effects in
ordar to establish standards for regulating them, excluding
research to improve treatment and cure of illnesses which
result from pollutants; to improve means of identifying and
measuring pollution processes; to control and abate all
pollutants which adversely affect air, water, land, and
living things; and to improve the ability to understand,
predict, and affect weather and natural hazards.

     Research shown here includes all efforts conducted pri-
marily to protect or improve environmental quality. There-
fore, research to remove sulfur from coal before it is con-
verted to electricity, and thereby reduce sulfur dioxide emis-
sions, would be shown here as would work to reduce emissions
from automobiles or airplanes.


       Encompasses research to determine the ecological,
       social, and health effects of environmental pol-
       lutants on man, animals (including marine animals),
       inorganic materials, and plants (including marine
       plant life) and research to determine the exposure
       levels at which these pollutants and their effects
       become dangerous to the various elements e' the en-
       vironment. Research in this category is generally
       directed toward isolating pollutants which cause
       adverse effects, in order to establish standards
       or tolerance levels for regulatory purposes. Fur-
       thermore, it usually precedes efforts to improve
       technological or operational means of controlling
       and abating pollution or otherwise meeting the
       above-mentioned standards or tolerance levels. Re-
       search on the effects of pesticides and of radiation
       is also shown here.

       Exclude research on identifying and measuring pollu-
       tants which is conducted to treat or cure an illness
       or disease that is caused by a pollutant or to develop
       a personal preventive device (see V.A., DISEASES AND
       INJURIES).  Exclude research on understanding pollu-
       tion processes or technological or operational methods
       to control pollutants which are shown elsewhere in

APPENDIX III                                     APPENDIX III

        search on food safety thresholds and standards (see
        Also exclude research on occupational safety and
        health and consumer product safety (see XIII. F.,
        1. AIR

           Includes research on the effects of pollutants
           carried in the air, such as hydrocarbons. Excludes
           the effects on air from noise, pesticides and radi-
           ation and also excludes air pollution resulting
           from solid wastes (see the following pertinent
           categories in this section). Work to be shown here
           is exemplified by research to study epidemiological
           and toxicological health effects of air pollutants
           on man and animals and investigate long-term low-
           level effects of fossil fuel pollutants during
           energy conversion.

        2. WATER

           Includes research on the effects of pollutants,
           including thermal pollution, found in fresh and
           salt water excluding pesticides, radiation and
           pollution resulting from solid waste. Work to be
           shown here is exemplified by research to:
             Study relationship between water quality and
             Study subsequent generation effects of tri-
             tiated ingestion;
             Study birth defects caused by heavy metals;
             Determine effects of asbestos on aquatic life;
             Determine methyl mercury effects on central nerv-
             ous system of animals; and
             Assess ecosystem costs of thermal shock from
             power plant waste heat release and cooling
             tower blow-down.
        3. SOLID WASTE

           Includes research on the effects of solid waste
           handling and disposal. Solid waste includes, but
           is not limited to, animal wastes, crop residues,
           and municipal solid wastes. This entry specifi-
           cally includes the effects of solid waste handling
           which results in air or water pollution. Work to
           be shown here is exemplified by research to:

APPENDIX III                                       APPENDIX III

               Assess public health impact of toxic and patho-
               genic products of solid waste, waste incinera-
               tion, landfill, and ocean dumping operations;
               Determine the environmental effect of coal, oil,
               oil shale, uranium, and geothermal energy ex-
               traction techniques; and
               Assess environmental effects of hydrocarbon and
               other fuel transport, storage, or waste releases
               during waste disposal.

        4. PESTICIDES

           Includes all research conducted to determine the
           adverse effects of pesticide use. Work to be
           shown here is exemplified by research to determine
           pesticida] effects on particular organs, metabolic
           reactions, reproduction and behavioral responses
           and on freshwater and saltwater life.
           Exclude research to improve treatment for a health
           pro--blem caused by pesticide use (see V., HEALTH)
           and research on food safety that relates to pes-
           ticides (see IV. E., IMPROVE SAFETY).
        5. NOISE

           Includes all research conducted to determine the
           effects of noise on man, plants and animals.
           Work to be shown here is exemplified by research
           to improve health effects data for noise emissions
           standards and determine the effect of noise on
           man's ability to concentrate on a task.
           Research to determine the effects of aircraft
           noise should be reported both as a separate item
           and as a part of the total for this entry.
        6. RADIATION

           Includes research conducted to determine the ef-
           fects of exposure to radiation in the general en-
           vironment from any source. More specifically,
           this includes work to:
             Measure health effects of ionizing and non-
             ionizing radiation exposure;
             Investigate long-term low-level effects of radio-
             active pollutants; and
             Assess environmental effects of radionuclide
             transport, storage and waste disposal.

APPENDIX IV                                      APPENDIX IV


     Because of its size, this appendix has been printed and
bound separately. It is available on request from the Gen-
eral Accounting Office (PAD-77-14A).

APPENDIX V                                                  APPENDIX V

                           WASHINGTON, D.C. U4d

The Honorable James T. Lynn
Director, Office of Management
  and Budget
Dear Mr. Lynn:

     The General Accounting Office, under the Legislative
Reorganization Act of 1970, as amended, has the responsibil-
ity, among other things, for (1) identifying and specifying
the needs of the committees end Members of the Congress for
fiscal, budgetary and prograi related information and (2) de-
veloping classification structures for use by all Federal
agencies in supplying such information to the Congress.

     Over the past several months, the General Acounting
Office has been developing a unified objective-criented
class fication structure for Federal research a   develop-
ment. This structure is being developed to meet an expressed
congressional need for a method of viewing Federal research
and development in a unified manner across the Federal Gov-
ernment in terms of objectives. The concept underlying the
structure is that Federal research and development can be
associated with the accomplishment of national objectives or
with the solution of national problems.

     The latest version of the overall structure is enclosed.
With the exception of Food, Fiber and Other Agricultural
Products; Foreign Affairs; and Other, the various objectives
have been reviewed by agency personnel. We have also enclosed
a draft set of guidelines that have been prepared for use in
requesting the information from the executive departments and
agencies. Further, each level of the sructure will be accom-
panied by a set of definitions which will guide the providers
and the users of the associated information. We expect to
complete the unfinished segments of the structure by Septem-
ber 26, 1975.

     In order to satisfy its needs, the Congress should be
provided with special analytical information on Federal re-
search and development funding in accordance with this struc-
ture. More specifically, the Committee on Science and Technol-
ogy, House of Representatives, has requested that information

APPENDIX V                                           APPENDIX V

be provided in accordance with this structure at the time of
delivery of the President's Budget for FY 1977.  Initially,
the presentation of research and development dollar informa-
tion needs to be provided in terms of obligations at each
level of the structure for each department and agency and in
total (Government-wide) for the past, current and budget
year.  It is possible that other information (amounts author-
ized, budget authority, etc.) may be requested in succeeding

     We recommend that your Office request the departments and
agencies to provide the needed information to you in order
that it may be assembled and provided to the Congress within
this timeframe. It is our view that this requirement can be
handled as a supplementary presentation and thus, not directly
affect the method used by the agencies in presenting their
basic budget submission to your Office or to the Congress.

      Members of the General Accounting Office staff are avail-
able to work with the Office of Management and Budget in
arriving at the most prac'   41 method of meeting this require-

                              Sincerely yours,

                              Comptroller General
                              of the United States

Enclosures - 2

 APPENDIX VI                                         APPENDIX VI

                         WASHINGTON. D.C. 20502

Honorable Elmer B. Staats
Comptroller General of the
 United States
Washington, D. C.   20548

Dear Mr. Staats:

We have reviewed your September 11 letter in which you
describe a unified objective-oriented classification
structure for Federal research and development that is
being developed by the General Accounting Office for the
Congress. In particular, your letter states that the
House Committee on Science and Technology has requested
that information be provided in accordance with this
structure at the time of delivery of the President's
Budget for FY 1977. The letter contair' a recommendation
that the Office of Management and Budget request the
departments and agencies to provide information so that
it is available to the Congress at that time.
This Office recognizes that certain across-agency analysis
of research and development activities can be useful to
Congressional Committees. Indeed, a great deal of informa-
tion covering Government-wide efforts in energy research
and development has been provided to committees over the
past two to three years.
We also appreciate the fact that a great deal of time has
been spent by your staff in developing this structure and
in describing the boundaries of the various categories.
Nonetheless, our review of the proposal suggests that
there are basic problems in providing reliable information
to meet the needs of the House Science and Technology
Committee or other potential users in the detail and on
the schedule that you suggest. In fact, our examination
leads us to believe that moving ahead too broadly and too
rapidly could seriously impair the validity and usefulness
of the research and development information to Congress.
In addition, moving ahead broadly and rapidly in this and

 APPENDIX VI                                       APPENDIX VI

other specific program areas before the Congressional
Budget Office and the Budget Committees have decided hat
information they will need to carry out the new Congressional
Budget Act may pre-empt resources that will be needed to
make the new Congressional budget review process work.

Even though the General Accounting Office is devoting con-
siderable attention to describing the boundaries of categories,
mutually exclusive categorization inevitably requires com-
promises in determining how activities are classified by
agencies. This can result in not providing pin-pointed
informa.tion that the Congress may be seeking in particular
areas or categories. In order to operate successfully,
agencies must familiarize themselves with the system and
work out the problems that inevitably arise. This takes
The Department of Defense, for example, which accounts for
about one-half of the Federal Government's research and
development activities, has expressed concern that much of
the information requested in the objective-oriented classi-
fication is not routinely available within Defense but
will require special and significant efforts to obtain.
Defense points out the following particular problems:

o  Funding levels are requested on an obligations basis
whereas Defense program data are currently compiled on a
total obligational authority basis. Unless appropriate
conversions are made, Defense data would be inconsistent
with total Defense R&D obligations as reported in the
R&D Special Analysis.
o  Research and exploratory development program funding
must be distributed over general. non-Defense categories.
Such a distribution is not now available and will require
considerable technical judgment to execute.

o  Military personnel, management and support, and test
and evaluation costs would have to be distributed among
the R&D programs with which they are associated. Again,
such a distribution is not now available.

With all these problems in mind, we believe that it would
be extremely desirable to test a system through a dry run
after the 1977 Budget is submitted rather than proceed as

APPENDIX VI                                        APPENDIX VI

proposed. In the meantime, I am sure that some information
of special concern to the Congress in particular areas of
R&D could be provided at the time the 1977 budget is sub-
mitted. I have asked my staff to work with yours to find
ways to furnish whatever information is possible.
I would be happy to discuss this matter further with you.
                             S   erely yours,

                              ames T. Lynn

APPEUDIX VII                                                                                                                                                                                                                       APPENDIX VII

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APPENDIX VII                                                                                                                                                                                                               APPENDIX VII

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APPENDIX VIII                                                 APPENDIX VIII

                          EXECUTIVE OFFICE OF THE PRESIDENT
                            COFICE OF MANAGEMENT AND BUDGET
                                   WASHINGTON. DC.   0503

Mr.   axrt     I.   raems
Dir~o,         Progm A Alyil Division
Unitrd Stato Gemel Aoonting Offoe
    nuinmbl/l,    .     20MII
Dear Kr.       ALnr   t

This respoml to or     letter of September 15, 1976 tO
Director J ma   .   mr  in vwhich you have asked this officeo
to revriw   draft rwport entitleod, 'eed for     Gorverm t-wide
Budget Clasifictic     Structure  for Federal Researo   and
Developmt Ativities.' The purpose of this      Gor       t-wide
effort, au gt fert in your letter, is to proid the
Congress with Federal research and dev lolmnt budget data
in a crowssctting, objective-oriented presentatiom that
supplemnts eisting presentations. Tbo report Woeld rmamnd
that   B present budget data collected in acoordance with
the G   olasifioation stru ture to Congress "as Or a
possible after the fiscal year 1978 budget is submitted and
that beginning with the 1979 budget, 0B present suhb data
on an annual basis in onunction with thu bdget.
Before caating    ao specific lagge   in the draft report.
I would like to make m general obserations bout the
proposed classification of Federal RD information a it
relates to other budgt classification efforts, OnB experience
with providing the e troescutting data on the 1977 budget
given to Cmressioaml camittee* early this year, ad problems
preseted by te proposed syste.
In our view it is important that the proposed AD olassification
struture be 3xa"kd at in the largr ooatext of other budget
classificatim devel      ts no taking plac.. for emple:
      -    S      etiAM       61(i) of the Congressional Bdget
           act of 1974 rquires, beginning with fiscal
           year 1979, a presentatice in terms of (1) a
           detailed trrtare of national needs which
           shall be used to reference all agency misaions
           aod progrmw   (2) agency wissionst and (3) bsic
           programs.  Formulation of this Government-wide

APPENDIX VIII                                    APPENDIX VIII

        "atiOmil oo"b     ' presntation an be expected
             ha" am imoact on the proesntaeion of natlJoml
             biM   sadi ebjetivsa approach that   iLmplieit
               a pImsdunLfied R&D trucoture. Plamniag
         her the s     otien 601(1) prOentation    gVol
        f0v9    d end wil be aelated ater the 1978
        bugt L submlitted,
    -   With      peat tO the proviB LM of RD inLormation
        aleb, we hm bee ooulted by a ditfereat
         Iait In MD bu yaur,           hich
                                        l   is eparately
        eofuietag studies of ow Federal agency R&D
        bdgetary requests would be formulated if
         ertal nmwr        dation (C-2 and C-5) of the
        o     stLoa e goerenit                    MWre fully
         ain ffeet.     t tntative ro n-datons of
        that nit in            bnvolve utiliing agecy
        miAsion needs to support major syste develop-
        Slt   propoceaZ   and related fisoal transactions.
         nevitably, the work by agenoies on the 601(1)
        requirement and the approach of the GAO unit
        would result in mission structures that differ
        from your proposed unified R&D struture.
We believe tt  it is imperative that the various national
needs and ismion efforts be rationalised before any one
structure t adopt*d.
As you knowu, dring the 177 budget season, we undertook the
collection and submision of data speifically requested by
the House Comittee n Sleno     and Technology and the Senate
Approprations Subooitt on HUD/ndependent Agenales.
While the proposed GAO lassification of    deral RD programs
was ued on a limited basis in presentin     this data, it   was
necessary tgogo beyond the GAO clawiloation system to mset
specific needs of the oamittees.  Through a great deal of
effort by the ageaies ad OMB, and in the face of many
difficultie, the information %as dellvered to the Congress.
Although there is me evidence that the data were put to use
it is not oloar hbo important or critioal that data was to
CoangecAional deciaam making or whether other      packaging"
of R&D data night have been mre useful. Moro data are
always "desired"--epeciallry when they oom as a "free good"
to the relpient--bet the need and usefulness should be
established in cooporation with the Bxmutive raach agencies
listed in Seo. 80l of P.L. 93-344. At last this is our
interpretation of that saotion of the Congressional udget
Act of 174.

APFENDIX VIII                                         APPENDIX   VIII

  he system further proposed for implnmeUatioa La the present
 draft rpeft    niS require so        two domen agemaiss to present
 their researwh and dsvelop at budget dta each yar in
 aooordaae with a unified classification tructure that
 omprises 13 I or ategorie, 77 suboategories, and 5
 sub- uea     i.      * bi highly detailed premataui    wold
 be in &ddLtim to the RD    budget  ubmissions m"   by theb
 agencies to the ITsideta and to Congress.       quetion
 rwhther the   E substantial inestmmt     of agency  nd OS
 resourees that owr pproach would require during    th  budget
 seasM    i   desirable.
          - ur
          o      o    ioes mater on the load of mUD-
          an other    dget data that the Congress ao
          Bast handle, the possible preemption of
          aenay resources noeded to carry out the
          It~sutiv ad Clngressional review process,
          and fially problems with the clasuifiction
      -   It is also our view that a mutually exolusive
          R&D data sstem such as that proposed not only
          prduces more information than is needed, but
          in many cases the wr ng kind of data.     n any
          such systm  the  ohoooe of whore and  how to
          classify activitites     to be done  in a highly
          5udgmental and arbitrary manner.     or example,
          under the proposed structure,  EPA  would ohm
          it  ene   -related RD uwndr 'Environmnt"
          instead of "Energy." These judgmnts tend to
          shift frm year to year with changes in R&D
            mphasis and ohanges in agency personnel, making
          it difficult to maintain consistency in the data.
          While research and development budget data must
          bo looked at primarily in relation to agency
          missions and how much R&D seros the goals
          and objectives of particular agencies, vm
          rocognie that in mom instanoes Coongreme
          aid the xecutiv Ibranch will be concerned
          about selected problems of a orommcutting
          noture requiring data frao all ooncerned
           genocies. An example is information on ozone
          depletion that was included n the presentation
          to the Congress earlier this year. As nother
          enAmpl, Circular A-ll was revised this year
          to require acroass-the-board data on basic

APPENDIX VIII                                           APPENDIX VIII

       -       believe it   advisab'.e to tailor detailed
            data ubemiion to the pooeifi informtimal
            Bad of Congressional comittes and tbLir
            staffs rather than developing another overall
              ueatraSy reporting system. Our oofideme
              a this approach was reinforced by our sublmslios
            to    e Coagress earlier this year. T'hre of the
            itm     N`eqmted--uooue depletion, low loel
            peLlutin, and outer oontinental shelf-weor
             ot idetifiabl in the proposed AO unified
            alssifLoation and had to be set out separately.
We beiMM that a useful oourse of action would be to deve.ap
 s1 lmted      Pplmlntary RD data on an interagnoy basi
to cover lspeific problem areas identified by the Cogr",
thWu avodin the oolection of too much data. Past eperlono
Nugests that thes needs may well differ from year to year.
It ia eatremly important that in any effort undertaken
sufficient time be allowed for planniug, agency failiarization,
OA1 for thorolQh reviEr of data submtted. It is also
etremely important t'iat the overlap betwen this GAO proposed
R&D strmture and ta development of other tructures--..,
the 601(1) nata'u: needs/agoeny missions/basLi        progrems
p"reSatationsa-b      resolved before adopting any structure.
Pending resolution of the larger issues and information
requirements, we will be happy to moot with taffs of key
 oomMittees and (AO and ooperatively work out specifio
infortioal     requirements that might be noorporatd in
planning for the 1979 budgt, as well a disussing solootod
1978       D dat requirements that might be submittd to
Congressiomal ammittoes in February.
  lpecific oo    nts on the draft report are set forth in
3ncloeure X.

                                  Sincerely yours,

                                  Paul H. 4N.4 pl
                                  Acting Director

APPENDIX VIII                                   APPENDIX VIII

                  Comments on GAO Draft Report
             Entitled "Need for a Government-Wide
             Budget Classification Structure for
       Federal Research and Development Activities"

                          Chapter 1


                     (See GAO note below.)

                           Chapter 2

                    GAO Developed Structure

Page 5 - First full pararaph

                        (See GAO note.)

The statement is also made that "Possibly as much as $1.5
to $2 billion of the rojected fiscal year 1977 DOD research,
development, test and evaluation budqet of aenroximately
$11 billion is for research nd development in areas that
have a clear potential to contribute to solving national
problems outside of the military mission." The report gives
no indication of how this figure was developed or of what
elements it is composed.

                        (See GAO note.)

Page 7 - Second full paragraph

The first sentence reads, "In September 1975, GAO sent the
proposed structure to the Office of Management and Budget
for implementation."   The proposed structure was sent to

  AO note:    Del'ted comments relate to material contained
              in he draft report which has been revised
              or which has not been included in the final

 APPENDIX VIII                                     APPENDIX VIII

  OMB with   recommendation that agencies
  furnish such information in connection be requested to
  submission. As entioned in our letter,with the 1977 budget
  gather data for two coamittees utilizing we agreed to
  of the proposed structure.               certain categories

                  (See GAO note, p. 50.)

 In the same paragraph the statement
 demonstrated that OMB and the agenciesis made that this test
 familiarise themselves with this sys!.m are able to
 implement the new structure, and present and its definitions,
 to Congress in a timely                    the information
 demonstrated that a full manner.  We disagree.    The test
                           presentation would require
 agency and OMB budget resources especially             increased
 season and that data should be tailored      during  the budget
 cutting needs.                            to specific cross-

 Page 9 - First full paragraph
We cannot agree that 1978 RD budget
in accordance with the                data should be submitted
believe that we should proposed structure. Rather, we
                       turn our efftrts
of some further crosscutting information toward development
                                          in connection with
the 1979 budget submission. If Congressional
a requirement for selected 1978 data,          committees have
obtain it by February.                 we should arrange to

                          Chapter 3
          Why a Government-Wide Classification
    Structure for Research and Development
                                           is Needed
Page 13 - Fourth full paragraph
The statement is made that the information
as a preliminary means of identifying        could be used
be able to disseminate information     agencies  which may
activities. We should point out    on  specific  research
                                 that  the
of such information sources is currently    identification
a number of ways. For example, in          facilitated in
R&D, the lead agency, ERDA, is already  field  of energy
reporting across-the-board information  maintaining  and
solar energy. Indeed, ERDA is required on such programs as
                                        to publish a "National

                                                 APPENDIX VIII

Plan" for energy R&D, and this plan includes descriptions
the major energy R&D related programs of other Federal
agencies. The National Science Foundation can assist
locating agencies involved in R&D areas of specific in
as can the Science Information Exchange.             interest,

                         Chapter 4
     Existing Research and Development Presentations

Page 26 - "Specialized Subject Reports" section
The impression is given in this section that the
classification will significantly reduce requests proposed
specialized subject reports. On the contrary, the for
changing character of research and evelopment and constantly
emergence of problems that require tailor made data,the
it inevitable that the Congress and the Executive     make
continue to seek answers to questions that require Branch
specialized reports.