DEPARTMENT OF INTERIOR
ACCOMPANYING REPORT OF THE NATIONAL PERFORMANCE REVIEW OFFICE OF THE VICE PRESIDENT Washington, DC September 1993
Rationalize Federal Land Ownership
The public lands of the United States have played a major role in the settlement and the development of the country. During most of the 19th century, national policy promoted disposal of public domain lands to stimulate settlement of the West. From 1812 to 1935, more than one billion acres of land were transferred to individuals and organizations through land sales, homesteading, and grants to railroads.[Endnote 1] In the late 1890s, the federal government began to set aside lands for specific purposes such as national forests, parks, military reservations, and wildlife refuges. The remaining public domain lands were managed by the Department of the Interior (DOI).
As a result of these activities and other uncoordinated land actions, federal lands managed by DOI's Bureau of Land Management (BLM) and the Department of Agriculture's Forest Service (USFS) often lie side by side or are intermingled in many areas. This dispersed ownership pattern prevents efficient operations and results in fragmented assistance to customers. In many cases, the lands administered by the two agencies share the same users, resources, and management problems. The agencies maintain two separate staffs in more than 70 communities, resulting in inefficient use of federal resources and overall confusion to land users. [Endnote 2] Regardless of ownership, the goal for federal land management agencies is to provide responsible land management which protects and enhances the resource, protects the environment, and provides efficient and effective service to the public.
Since the 1930s, there have been a number of proposals to merge the functions of various the Interior and Agriculture Department organizations. A key element of all proposals was to merge the lands and resource responsibilities of USFS and BLM (or its predecessors). Because of consistent opposition to merger proposals in the early 1980s, attention was directed to realigning ownership patterns between USFS and BLM. In 1980, the Secretaries of Agriculture and the Interior outlined a plan to identify lands where transfer between BLM and USFS had the potential to increase efficiency and effectiveness. An example of this problem is the Sawtooth National Forest near Pocatello, Idaho, where many small USFS land parcels are surrounded by BLM lands. Both agencies have personnel and offices in Pocatello, providing redundant land management assistance under different agency policies.
In August 1983, the President's Private Sector Survey on Cost Control in the Federal Government (the Grace Commission) recommended that BLM and USFS implement a land interchange designed to consolidate ownership patterns in geographic areas. In December 1984, the General Accounting Office reported that by combining offices and consolidating land patterns the government could achieve cost savings and great improvement in management efficiency and service to the public.
In January 1985, BLM and USFS announced a land exchange proposal to transfer 24 million acres of land between BLM and USFS. The agencies prepared a Legislative Environmental Impact Statement and met with congressional delegations, governors, and hundreds of key public groups and individuals in more than 600 documented consultations and individual sessions. During the review stage, 85 public meetings were held across the country.[Endnote 3] Due to concerns of potential reduction in revenues to counties and states and environmental and social impacts, the proposed actions were eventually blocked in the U.S. Senate.
Current regulations permit ownership to be realigned though land exchanges. BLM is the primary agency within DOI that uses land exchanges to acquire lands. Sections 205 and 206 of the Federal Land Policy and Management Act as amended by the Federal Land Exchange Facilitation Act provide the primary authority to process land exchanges. BLM typically exchanges 250,000 acres annually with other federal and state agencies. This process is very cumbersome and current policies and procedures prevent efficient exchanges. It often requires three years or more to complete a land exchange.
Land tenure adjustments through exchange or new management arrangements are now more important than ever. To focus on ecosystem management and maintain the biological diversity of public lands, the existing, virtually unmanageable checkerboard land ownership pattern must be consolidated through cooperative management or exchanging scattered and isolated public lands with intermingled parcels of private land. Experience shows that vast federal land transfers or exchanges are difficult to accomplish due to impacts on authorized programs, economic concerns from state and local government, and public perception that the changes will have a negative impact. Much political controversy usually accompanies proposed federal land changes. A method is needed to reflect the impact on small areas before implementing a land exchange proposal nationally.
The difficulty of successfully implementing land transfers is that BLM and USFS must consider alternative ways to improve federal operations. Cooperative land management and improved land exchange procedures among the agencies would provide a means of improving land management based on ecosystems principles. It also would improve agency efficiency and customer service through simplified rules and policies.
The department should develop a coordinated management plan on a ecosystem basis for each selected area. Each plan should include all federal land management agencies and state and local governments within the designated area. The pilots should begin operation early in calendar year 1994 and operate for up to 24 months.
Different concepts should be addressed in various pilots. One would be in an area where there already is ongoing work to forge ecosystem-based management approaches and include all federal agencies with land and resource management responsibilities in the area. Another should be a new effort focusing on BLM and USFS. In addition to addressing cooperative ecosystem-based management, it should include shared public service, administrative, and program activities. This should be an opportunity to reengineer BLM and USFS and other public service activities to develop single processes used by both agencies. The third area should propose changes in regulations to accelerate current exchange activities. If required, a waiver of regulations or procedures to improve land patterns and management capability should be requested.
Current authorities for land transfers requiring possible waivers include provisions of the BankheadJones Act, the Withdrawal (Sec 204) and Exchange (Sec 206) provisions of the Federal Land Management and Policy Act, and other exchange provisions codified in 43 CFR 2200. Limited administrative actions such as detailing employees can be taken under the Economy Act of 1932. DOI can also explore other opportunities for policy changes. A fourth area should address the use of limited jurisdictional transfers. An example might be a state such as Nevada with large federal ownership.
2. After the pilot projects have been operating for 18-24 months, DOI should evaluate their progress to determine if legislative proposals to transfer lands between USFS and BLM on an agencywide or limited jurisdiction are required.
The pilot projects would provide the method for determining the success of cooperative land management. The pilots would show if it is possible to provide consistent ecosystem land management, foster inter-bureau and inter-department cooperation, develop consistent policies, and improve efficiency and effectiveness in land management. It would provide for shared service to the public and recommend changes to current exchange regulations. It is anticipated that legislation would be required to implement some of the changes.
Implementation of the proposal would be budget neutral. To implement the pilot projects, priority would be established by the agencies and needed personnel would be assigned from existing staff. Estimated needs will require reassignment of two full-time equivalents per pilot project and two support personnel.
It is anticipated the long-term impacts would result in gained efficiencies through improved procedures and regulations. Starting in fiscal year 1996, benefits are estimated to provide savings of about $6 million annually (the same as those reflected in the Intermingled Lands Alternative presented in the 1986 Legislative Environmental Impact Statement). This would provide the support for needed legislative change. Any savings resulting from the pilots and more efficient operations should be permitted to remain in the agency for land management.
Improve the Land Acquisition Policies of DOI
The Department of the Interior (DOI) manages approximately 500 million acres of land and has responsibility for thousands of historical and cultural sites across the nation. The Department of Agriculture's Forest Service (USFS) manages another 197 million acres of land. To effectively address current priorities, such as habitat for endangered species, migratory waterfowl laws, and wetland protection, federal agencies often need to acquire additional lands. An effective acquisition program can provide the means for developing efficient and cost effective management units that result in lower management costs per acre and better service to the public.
DOI lands provide important natural resources, recreational and scenic values, as well as an abundance of resource commodities and revenue to federal, state, and local governments. The following federal agencies have major land ownership interests: the Bureau of Land Management (BLM), 270 million acres; the Fish and Wildlife Service (FWS), 90 million acres; and the National Park Service (NPS), 80 million acres and 367 natural, cultural, and historical units. BLM's public lands are located in 28 states and, in many instances, are intermingled with tracts of land owned by private entities, state and local governments, and other federal agencies. FWS lands currently include 485 wildlife refuges, 78 fish hatcheries, and 13 research centers. NPS units range from less than one acre to more than 13 million acres in size. They include parks, monuments, seashores, historic sites, historical parks, military parks, memorials, recreation areas, rivers, and parkways.
Federal land acquisition is accomplished primarily by the DOI and the Department of Agriculture using the Land and Water Conservation Fund (LWCF). Bureaus acquire additional land and real property for several purposes:
--to protect nationally important wetlands and fish and wildlife habitat;
--to preserve nationally important natural and historic resources;
--to provide for public use and enjoyment through enhanced recreational opportunities; and
--to promote effective management of existing departmental land and resources.
For fiscal years 1986 through 1991, Congress appropriated about $813 million to DOI for land acquisition from the LWCF. Bureau expenditures were broken down as follows: BLM $58 million, FWS $367 million, and NPS $388 million.[Endnote 1] The proposed appropriation from the LWCF for fiscal year 1994 is $208 million, including funds for state grants and the USFS.
In past years, DOI has used inconsistent methods for determining land acquisition priorities. Beginning in 1990, the LWCF acquisition process required each concerned bureau to prepare a priority acquisition ranking list for funding. Bureaus use different methods for establishing priorities for proposed purchases but all use the Office of Management and Budget (OMB) system as an overlay. The OMB system uses four minimum criteria:
--whether the proposed acquisition is within the boundaries of or is adjacent to an authorized unit;
--absence of known health or safety hazards;
--absence of opposition from current owners; and
--a limit of 10 percent of the purchase price for the infrastructure expenses.
These lists are then submitted to DOI's Office of the Budget which compiles a joint list using the OMB procedure.[Endnote 2] This list is submitted to Congress with the President's annual budget. Congress receives the list and modifies it significantly, adding new properties so that the list often bears little resemblance to the original priorities set forth by the bureaus. For the 1994 budget proposal, FWS used its own land acquisition priority system, BLM used the land acquisition priority procedure developed by OMB, and NPS did not use any standard system.
In a 1993 study, the National Research Council found "the OMB method for setting federal acquisition priorities among the priorities of individual agencies forces nonadditive criteria into a single composite ranking. This skews results in favor of potential land acquisition that would best meet specific purposes. The current approach also emphasizes certain considerations at the expense of others and diminishes the agencies' ability to fulfill their legislative charges.''[Endnote 3] In essence, OMB's current method compares incompatible qualities, such as recreational value and endangered species value. The system applies the same set of criteria nationwide and across all agencies, despite regional needs and agency mission, resulting in significant modifications of individual bureaus' priorities.
The system also permits micromanagement since the bureaus' priorities are often obscured by OMB's single-ranking system. The differences between bureau lists and projects eventually funded by Congress have led critics to charge that political considerations sometimes override objective criteria and agency mission. According to critics, Congress is often the focus of political input to the acquisition process, and together with the OMB ranking system, prevents the department from making long-term decisions which provide for wise ecosystem planning and management.
Another method of land acquisition is for department bureaus to ask nonprofit organizations to assist in the acquisition of properties when a project has not yet been authorized or funded. Nonprofit organizations support acquisition projects by:
--actively lobbying for congressional support;
--providing assurance that funds will be available for purchase of a proposed project when there is a willing seller; and
--obtaining property at less than fair market value through their tax-exempt status.[Endnote 4]
A May 1992 Inspector General's (IG) Report questioned the legality and propriety of some acquisitions facilitated by nonprofit organizations. During a sixyear study period, the IG found that approximately 30 percent of acquisitions had been facilitated by nonprofit organizations. The IG report listed instances where bureaus had acquired land from nonprofit organizations at excessive prices, resulting in what were perceived to be undue profits to the organization, and expressed a concern that the nonprofit organizations were driving bureaus' acquisition priorities. The DOI Solicitor subsequently issued an opinion clarifying and concurring with some of the issues addressed in the IG report.
Rational land management strategies require that DOI be able to acquire lands using a comprehensive approach to achieve widely accepted goals and to have a set amount of discretionary funds so the Secretaries of the Interior and Agriculture can take advantage of unforeseen opportunities or urgent acquisition developments. It is vital that a system be developed which establishes criteria for decision making and incorporates the needs of the land management agencies within established national goals. Well-developed, objective criteria will provide a framework for good decisions and effective implementation.
The new system should be separated into three parallel ranking systems reflecting major objectives of federal land acquisition. The suggested base categories are outdoor recreation resources, resource protection, and cultural heritage protection. [Endnote 5] Objective criteria should be developed for each category. The bureaus should develop acquisition lists based on the established criteria. The Secretary of the Interior should consolidate and prioritize DOI's requests into a single list. The Secretary of Agriculture should do the same for USFS. Development of criteria for the categories and the annual combination of the lists should be completed by a collaborative effort between policy level officials from DOI, USDA, and OMB, supported by appropriate technical specialists.
2. DOI should issue a series of policy directives for the NPS, BLM, and FWS to address the issue outlined in the IG Report and clarified in the Solicitor's opinion of July 30, 1992.
These directives should reaffirm the usefulness of nonprofit organizations to land acquisition objectives of the bureaus, better define the relationship between the two, and provide further guidelines for the implementation of that relationship. Specific guidelines should:
--direct DOI bureaus to immediately
discontinue the practice of paying interest for income forgone;
--limit payment for land acquired to the basis of the purchase price plus allowable expenses, or the approved independent appraisal value plus normal closing costs;
--establish an evaluation team at the department level which would evaluate land acquisitions; and
--require that all nonprofit transactions be subject to an annual audit.
Modifying the ranking system for determining land acquisitions would focus the land purchased on specific purposes and objective criteria, not upon the individual land parcels. The bureaus and agencies could then prepare overall strategic plans that identify land acquisition priorities based upon future needs.
The issuance of final department guidelines on the use of nonprofit organizations will resolve the concerns of the IG report, establish uniform operating procedures, and clarify working relationships with nonprofit organizations.
Implementation of the proposal would be budget neutral. It would not affect appropriations but would focus land acquisition for the bureaus. This would have a positive effect on management decisions and improve unit operations.
Improve Minerals Management Service Royalty Collections
The Minerals Management Service (MMS) in the Department of the Interior (DOI) will account for an estimated $3.3 billion dollars in mineral royalty income in fiscal year 1994. These revenues are collected and disbursed to Indian Tribes, individual Native Americans, states, and the U.S. Treasury by the MMS Royalty Management Program (RMP). In its 10- year history, the RMP has improved the timeliness of payments to these recipients from 50 percent (inherited from its predecessor agency) to the current 96 percent of payments made on time.
While payment timeliness is on track, even more prompt and accurate royalty collection and disbursement could be accomplished by enhancing current efforts to verify industry compliance with royalty reporting requirements. To enhance royalty verification, RMP has developed a compliance action plan intended to encourage improved industry compliance in royalty payment.
Royalty payments are currently verified primarily by an audit program which focuses on the largest royalty paying companies. Traditionally, a small handful of companies have been responsible for over 80 percent of royalty payments, leading to a compliance strategy dominated by field audits among these large companies. As a result, hundreds of medium to small companies paying on thousands of leases have a lesser chance of being audited. RMP is under constant pressure to increase both the number of audits and associated resources committed to such audits, especially for the majority of companies not considered large royalty payors. However, a costeffective approach includes more than just increasing resources devoted to traditional audits.
MMS is developing a new compliance strategy which integrates field audits with computer-based compliance activities. The new strategy is based in part on compliance programs developed by the Internal Revenue Service (IRS). By screening payments at an early stage of the process, errors can be identified and corrected immediately. Information indicating the need for more thorough review can be collected and used to identify companies for further field audit. By integrating the results of automated compliance activities with those of field audit, RMP can eliminate much duplication of effort and ensure almost complete coverage.
A crucial adjunct to the royalty compliance process is a regulatory enforcement program designed to foster voluntary compliance by industry. One approach involves new regulations which propose assessing companies for RMP administrative costs incurred for a broader array of erroneous reporting situations than currently assessed. For example, current regulations provide for an assessment for late or incorrect reports but does not permit a second assessment for incorrect reports that have already been charged a late fee. New rules will permit both assessments. Another change will permit an assessment to be made when a payment is submitted separately from the report document or bill.
A second approach involves penalties. Civil penalties are used as a last resort and have not been routinely incorporated into an enforcement program. Unlike the IRS, RMP does not have the authority to charge penalties for substantial underpayments. Although RMP can charge interest on underpayments, the interest rate may not be high enough to motivate companies to pay accurately and on time. For example, regulations required RMP to charge interest rates in 1992 ranging from 7 to 9 percent, a range which was comparable to commercial rates.
Therefore, it may have been worthwhile for a company to underpay its royalties and use the amount of the underpaid royalties as a low-interest loan to itself rather than securing a loan or accessing a line of credit at a higher interest rate. RMP should streamline the use of available enforcement tools, such as subpoenas and notices of noncompliance, and develop and implement a legislative approach to impose penalties for significant royalty underpayments.
At the heart of royalty reporting is the party responsible for making the report. Royalties from mineral leases may be collected from numerous parties. Existing regulations of MMS, the Bureau of Land Management (BLM), and the Bureau of Indian Affairs (BIA) are vague as to the responsibilities of the parties involved. Furthermore, policies regarding liabilities are not uniform. Enforcement actions are hampered as a result. A coordinated approach toward the issuance of joint regulations clarifying responsibilities is needed.
A final area for improvement in royalty collection lies in the reporting process itself. Currently, the royalty reporting process requires more than 2,000 payors to report more than 200,000 lines of data each month with each of those lines consisting of over a dozen different elements. The amount of detail and report frequency is the same regardless of the amount of royalty due. In addition, the present process requires complex accounting and research to place a value on products sold, particularly in the case of gas.
Several ideas have been advanced to try to simplify the present royalty payment process without decreasing royalty revenue or jeopardizing appropriate accountability. These ideas include reducing the frequency of reporting depending on the amount due, replacing the complex valuation system with published prices for royalty valuation, reducing the number of data requirements and data fields required on reporting forms, and allowing small payors to use a short form. DOI has established a reinvention laboratory to evaluate alternatives for simplifying royalty collection. The laboratory work group will include representatives from the MMS, the states, the Indian tribes, the Department of the Treasury, the American Petroleum Institute, and the Independent Petroleum Association of Mountain States.
The programs chosen should be drawn from research conducted as part of the compliance action plan in a small ongoing pilot program working with a sample of leases including variables such as volume, royalty rate, and value. The approach should integrate information developed through office-based compliance activities and traditional field audit approaches to help eliminate duplication of effort and ensure almost complete coverage.
2. The RMP should redirect personnel whose functions are reduced by upfront compliance measures to compliance tasks with potential for additional financial gains.
While comprehensive audits will continue to be an essential element in the compliance program because they are the only way of assuring that all issues affecting royalties are verified to source documentation, they will no longer be the only approach. By January 1994, RMP will modify the scope, coverage, and methodology used in field audit. In fiscal year 1995, when systems-based compliance activities are applied across the lease population, the field audit function should be reviewed and revised as appropriate.
3. DOI should submit legislation similar to IRS provisions to enable penalties to be assessed for substantial underpayments.
ACTIONS to streamline use of civil penalties, including issuance of notices of noncompliance, should be implemented by RMP.
4. Current inconsistencies in liability issues should be resolved by DOI and a uniform policy developed in early 1994.
A work group composed of MMS, BLM, and BIA representatives has been formed and development of options will be finalized in early 1994.
5. The reinvention laboratory, which has been established to study royalty reporting simplification, should evaluate the potential for greater efficiency, effectiveness, cost savings, and additional revenue of new reporting procedures.
After the laboratory team submits its final report in mid-October 1993, DOI will implement those recommendations that lead to added efficiencies.
Improvements in royalty collections will benefit payees, and clarification of rules and requirements will assist payors, especially small leaseholders. The recommendations build on improvements in royalty collection that are ongoing at RMP. They should provide an effective alternative to expanding the field audit approach. More aggressive use of civil penalties and new assessments can be expected to be unpopular among payors.
Implementation of the new compliance approach will not increase administrative costs. An additional $1.5 to $8.5 million annually in new revenues could be generated. This estimate is based on analysis of the impacts of previous improvements and analysis of the historical benefits and costs of revenue generating activities.
Budget Authority (BA), Outlays, and Revenues (Dollars in Millions)
1994 1995 1996 1997 1998 1999 Total
BA*..........0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays......0.0 0.0 0.0 0.0 0.0 0.0 0.0
Revenues.....0.0 2.0 5.0 7.0 7.0 7.0 28.0
Change in FTEs
................0 0 0 0 0 0 0
Establish a System of Personnel Exchanges in DOI
Interior Secretary Bruce Babbitt has identified as a major priority the need to develop cooperative approaches to departmental issues within the Department of the Interior (DOI). Many of the emerging issues in the department, including ecosystem management and science-based management, will require coordinated departmentwide policies. A system of in-house contracts and personnel exchanges across bureau boundaries offers a novel approach to accomplish these goals.
DOI has a very rigid organizational structure consisting of 10 bureaus with separate missions and strong internal cultures. The bureau structure, which was designed to execute large, long-term programs, has become static and slow to adapt to changing mission requirements. Talented employees with skills which would be applicable to emerging priorities are not being effectively used within the department. The current system often results in poor allocation of human resources and low employee morale.
DOI's rigid bureau structure inhibits effective approaches to cross-cutting problems. For instance, the department is currently addressing the problems of acid mine drainage in the eastern United States and metallic contaminants from mines in the western United States. The Bureau of Mines has world-class inorganic chemists on its staff who could apply their expertise to these and other environmental problems. However, they are limited by bureaucratic obstacles.
One way to address bureaucratic barriers is with a top-down approach, such as creation of a new bureau. In contrast, a bottom-up approach involving employees at the grassroots level may be more effective. Inhouse contracts and personnel exchanges would provide incentives for innovation, encourage employee movement, and foster competition across the department. A system of in-house contracts would allow individuals to work as consultants on specialized problems within the department. A program of personnel exchanges would involve temporary assignments of employees between bureaus.
DOI's field offices are geographically dispersed and employees are often unaware of the activities of other bureaus. To successfully implement a policy of employee movement and flexibility, an improvement in DOI's internal communication system will be necessary. The department needs to develop an internal communication system that informs employees of opportunities and needs across the department.
Participation on an in-house contract should usually be on a full-time basis for a specified length of time (one to six months). The program should have a target participation rate of 2 to 5 percent per year of each bureau's total permanent work force. The following steps are recommended to implement an inhouse contract program:
--Designate a mobility coordinator at the departmental level to implement a system for interbureau sharing of human resources. The mobility coordinator should develop a brief format for advertising positions and a similarly brief format for employees to apply for these positions. An IntraDepartmental Personnel Agreement form, modeled after the Office of Personnel Management Form OF-69, should be developed to document the specific terms of each approved in-house contract.
--Each bureau should designate an in-house contract coordinator (preferably a line or program manager) who should have program responsibility for monitoring compliance, program quality, and effectiveness. Specifically, the coordinator would provide oversight of project proposals, further define the statement of work, and clarify the skills needed for special projects to be carried out through the program. Each bureau should submit an annual compliance report to the Secretary of Interior.
--The in-house contract program should operate under a matrix-management concept. Employees would remain under their traditional line organization configurations; however, employees would be under the technical and administrative supervision of the project manager for the duration of the contract. Project managers should generate contract positions, review applications, and make tentative selections of participants for particular contracts.
2. DOI should implement a system of temporary interbureau details and personnel exchanges in early 1994.
General participation in a detail/exchange effort should not be limited to upper-management levels, but should include all specialties, job series, and grade levels. This program would encourage cooperation across bureau boundaries and broaden opportunities for employee training and development. The detail/exchange program should include the following elements:
--A mandatory program of developmental assignments of six to eight weeks duration should be included in all management and supervisory development programs. The required developmental assignments should be included as part of an approved individual development plan as described in Personnel Management Letter No. 93-8 (410).
--A voluntary program of details/exchanges of one to six months duration should be established for all non-management staff and technical positions. The program should have a target participation rate of 5 percent annually of each bureau's total permanent work force. Each bureau should designate an exchange coordinator who will have program responsibility for monitoring compliance, program quality, and effectiveness. The departmental mobility coordinator should assist the bureaus in implementing the program. Each bureau should submit an annual compliance report to the Secretary of the Interior.
3. DOI should facilitate personnel exchanges and inter-bureau cooperation through an improved internal communication system.
In-house contracting opportunities and detail/exchange opportunities should be advertised and promoted actively throughout the department. The system should include the following elements:
--Computer bulletin boards and local area network systems which are currently under development will provide a cost-effective means of distributing project bulletins and detail/exchange information.
--One departmentwide newsletter will replace the existing 10 separate bureau newsletters. This will improve the lines of communication and provide information to employees about other bureau activities.
--DOI's Automated Vacancy Announcement Distribution System (AVADS) will create and distribute project opportunity bulletins.
The recommendations have several implications for the work force and work environment at DOI. The voluntary nature of these programs will naturally attract motivated or higher-level employees within the department. Limited resources, especially for travel and per diem, would focus mobility within geographic areas (e.g., within Denver offices of different bureaus). In addition, the bottom-up approach of creating assignments would emphasize temporary, individual, mission-oriented tasks.
Under the system of in-house contracts and details/exchanges described above, the department would have at least 4,900 employees serving, learning, and contributing to different bureaus each year. Over a five-year period, the program would result in 35-50 percent of DOI employees benefitting this experience.
Through better use of electronic mail, a consolidated newsletter, and AVADS, DOI could distribute information about personnel details and contracting opportunities and improve communication across bureau boundaries.
This program would be budget-neutral. The in-house contract coordinators and exchange coordinators would assume project functions as an additional duty. No additional positions, space, supplies, or equipment would be required. Travel and per diem expenses can be minimized by encouraging details/exchanges and contracts within common geographic areas. Expenses would be the responsibility of the bureau sponsoring the project and would be handled like a reimbursable detail. The accounting and reporting can be accommodated within current systems. Replacing the 10 bureau newsletters with a single departmental newsletter would result in modest savings.
Consolidate Administrative and Programmatic Functions in DOI
Each Department of the Interior (DOI) bureau has its own administrative structure and provides its own administrative services. In addition, the bureaus provide certain programmatic functions and public affairs services. The bureaus unilaterally decide the level of resources to be spent on these services and the locations where these services will be delivered. These decisions are often made without regard to the collective needs of other bureaus. In some cases, individual bureaus have more than one office in a given location. Consequently, bureaus provide duplicative services with varying costs, quality, and utilization.
In the past, improved service and cost savings at DOI have been achieved in several ways:
--establishment of two Departmental
Administrative Service Centers (DASC) to provide consolidated payroll service and financial management;
--use of several Departmental Learning Centers located throughout the country to fulfill common training needs;
--implementation of an agencywide contract to monitor unemployment claims;
--designation of a lead bureau for certain types of procurement and unique services such as the protection of arts and artifacts; and
--selective use of Consolidated
Administrative Support Units (CASUs).
These efforts should serve as models for the department to achieve further improvements in service and cost savings.
During 1992, nine DOI task forces conducted analyses of programmatic areas for fiscal year 1994 budget formulation to identify ways to improve efficiency and effectiveness. These task forces presented a number of findings and recommendations, including areas for potential collocation and consolidation of functions. For example, one task force recommended a site study to collocate the mapping activities of five or six bureaus in the Denver area, and identified other areas where such collocation might realize efficiencies.[Endnote 1] Another task force recommended consolidating administrative and technical support services at design centers, and departmentwide consolidation of design and construction offices.[Endnote 2]
The DOI Inspector General (IG) noted in 1992 that the Bureau of Land Management has multiple offices (at the state, district, and resource area levels) located in the same cities. Of 140 resource area offices, 84 were located in the same cities as 41 district offices. The IG recommended reducing administrative costs by collocating these offices, permitting consolidation of administrative services.3
The DOI Division of Space and Facilities Management (SFM) reports that there are departmental offices in approximately 1,300 locations. These offices range from small two-person offices to large regional offices. SFM advises that the greatest potential for improving efficiency exists in cities where several bureaus have a significant number of employees, such as Denver, Albuquerque, Atlanta, Boston, Portland, Anchorage, Phoenix, and Sacramento.
The review should identify opportunities for consolidation within each bureau and across bureau boundaries. The objectives are to improve customer service, promote efficiency of operations, and reduce costs. In conducting this exercise, the department should consider:
--the recommendation of the Secretary's Fiscal Year 1994 Budget Task Force on Mapping Activities to collocate multi-bureau mapping services in the Denver area;
--options B and C of the Fiscal Year 1994 Budget Formulation Task Force on Design and Construction Management; and
--pertinent findings of the Secretary's Fiscal Year 1995 Budget Formulation Task Force reviews.
DOI should focus on areas identified as having the greatest potential for consolidation by the SFM.
2. Over the next three fiscal years, DOI should use the information identified by the bureaus to consolidate offices, increase the use of CASUs and DASCs, and designate lead bureaus to provide commonly needed services wherever feasible.
These recommendations would result in the elimination of organizations and positions which are duplicative, underutilized, inefficient, and ineffective. This should free additional resources for program functions and missions. In addition to salaries and related expenses, immediate cost savings would be realized in support services (i.e., space, supplies, and information technology).
The fiscal impact of consolidating functions and collocating offices is difficult to determine at this time because of the prior need to identify appropriate sites. Before fiscal impacts can be identified, the most appropriate method of service delivery must be determined, and implementation plans must be prepared. Actual cost savings will depend on the degree to which the recommendations are implemented; however, DOI has estimated the cost savings of partial implementation. By consolidating personnel services at five regional centers, DOI could save $17.5 million dollars and eliminate 470 full-time equivalents (FTE) over six years. These estimates cover only one aspect of consolidating administrative services. Full implementation of these recommendations would result in greater cost savings.
Budget Authority (BA) and Outlays (Dollars in Millions)
1994 1995 1996 1997 1998 1999 Total
BA*......0.0 -3.5 -3.5 -3.5 -3.5 -3.5 -17.5
Outlays..0.0 -3.5 -3.5 -3.5 -3.5 -3.5 -17.5
Change in FTEs
............0 -94 -188 -282 -376 -470 -470
*Note: Budget authority, outlay, and FTE estimates are based on the assumption of one consolidation of personnel offices per year for five years.
Streamline Management Support Systems in DOI
The Department of the Interior (DOI) is a large, complex organization with 10 bureaus and over 76,000 employees working in hundreds of locations across the United States. In order to efficiently manage this organization, DOI needs to streamline and modernize its support systems, including telecommunications, procurement, financial management, paperwork control, and the rulemaking process.
To transmit information, directives, and messages,
DOI's bureaus have historically maintained and
operated independent communications networks. Nonstandard
telecommunications practices prevent
effective cross-bureau communications. The independent networks that exist within DOI have parallel services (particularly for dedicated circuits) which are costly and often underutilized.
Well-coordinated electronic communications technology can assist in disseminating and maintaining rules and regulations, transmitting mail, and producing technical reports. This technology can also help people manage their time more effectively and encourage sharing of information. Enhanced communication between people and organizations, standard procedures for electronic data interchange, and easier citizen access to federal electronic data will help move DOI onto the Information Highway. Without the ability to effectively communicate electronically, the department will be hindered in carrying out its mission. Some possible communication strategies include:
--sharing circuits on high density routes between heavy-use areas;
--connecting local area networks within buildings or campus environments to a wide-area network;
--sharing video teleconferencing facilities to reduce travel; and
--improving phone communication through capabilities such as voice mail and conferencing to speed contacts and reduce administrative work hours.
While DOI's telecommunications can be improved by greater consolidation, current procurement practices in the department are over-regulated and inefficient and need simplification. DOI's procurement process is governed by a bewildering array of government-wide rules. To complicate matters, bureaus are authorized to issue additional internal regulations. As a result, bureaus have established additional rules at their own discretion which typically exceed the federal guidelines in restrictiveness and stringency, requiring more documentation, review, and approvals. Each layer of self-imposed regulation adds confusion to the process and decreases management's ability to exercise judgment and common sense.
Internal, self-imposed regulations confuse the procurement process even further, adding delays, increasing overhead costs, constraining common sense, and rendering government action more vulnerable to formal protest. To extricate itself from the inefficiency of current procurement regulations, DOI must eliminate as many self-imposed rules as possible and provide a reliable means to review outdated or contradictory regulations.
Facilitating effective procurement depends not only on deregulating the process itself but also on ensuring that it relates smoothly to other management tasks. Financial systems are inextricably tied to procurement since all federal acquisitions have a fiscal dimension. At present, DOI has not placed sufficient priority on guaranteeing that its financial and acquisition systems will be compatible.
Seven of the 10 bureaus in DOI use the Federal Financial System (FFS), gaining vast benefits from its ability to automate activities that were previously manual, duplicative, and labor-intensive. DOI also has begun planning for an Electronic Acquisition System (IDEAS), which will transform the procurement process with modern technology. If IDEAS could interface with FFS, field managers would gain substantial efficiencies: instead of transferring acquisitions documents onto the financial system by hand, the link would be computerized. This advantage, which would free employees and reduce paperwork, will materialize only if the department makes the FFS interface an integral requirement of IDEAS development.
FFS operating software resides on two mainframe computers which process in excess of three million invoice payments annually. Despite the advantages of FFS, a payment process initiated at a field office still takes a minimum of three weeks from start to finish. The system still requires too much handling of documents and duplicative data entry.
Substantial cost and efficiency savings could be gained by moving the FFS software to smaller computer platforms, such as minicomputers which currently operate in many of the seven participating bureaus. Staffing levels for Administrative Service Centers' mainframe computer operations are higher than levels required to operate the software on smaller, easier to manage, less expensive systems. Because the current trend is to move financial systems away from large mainframe computers, a newer version has been created that can operate on a file server in a local area network environment.
FFS could be further enhanced by expanding remote access and data entry capabilities through implementation of the Department of the Treasury's Vendor Express Program (Electronic Payment System) and Electronic Certification System. This change would allow the originating office to enter invoice payments directly into FFS, which would automatically edit all payment transactions and notify the Treasury electronically to prepare a check for mailing. This enhancement would reduce document handling, eliminate errors, and accelerate payment to the customers.
Further efficiencies can be gained by treating DOI as one entity when paying central operating costs, such as rent, workers' compensation, unemployment compensation, and other costs of health units and learning centers. Needless and costly steps are currently required to bill each bureau separately for a prorated share of these costs.
One common suggestion among DOI employees is the need to reduce the amount of paperwork and review involved in even the seemingly simplest process. The clearance process for general correspondence within the department is extremely complex and unwieldy. DOI should review its correspondence system to ensure that only directly affected program offices have the opportunity to review policy; legal, legislative, and budgetary information; and commitments that are communicated to correspondents. This review should be efficient and timely, eliminating unnecessary steps, streamlining operations to avoid delay, and reducing the number of reviewers.
At the departmental level, written guidelines are not sufficiently detailed to ensure correspondence will be prepared in a consistent manner from one bureau to the next. Existing guidelines are incomplete, outdated, and scattered among a variety of sources, often resulting in confusion among correspondence preparers as to what is required.
The regulatory process is a related paperwork processing activity that could be better managed. DOI issues approximately 250 to 330 regulations, or rulemakings, each year. This includes both proposed and final rules. In recent years, however, rulemaking has become increasingly complex and time-consuming, which results in poorer service to the public.
Several problems have been identified at the initial stage of the departmental regulatory process. These problems include a lack of logical, well-communicated workflow and priority assignment of rules on the part of various levels of regulation reviewers. The rulemaking process must be well-understood by all bureaus, and deadlines must be met for rulemaking to proceed effectively.
In addition to the internal formulation of rules, DOI needs to streamline procedures for using the semiannual rulemaking agenda. The Regulatory Flexibility Act and Executive Order 12291 requires the development of a semiannual agenda to:
--alert the public to upcoming regulations and to reduce the burdens of existing and future regulations;
--increase agency accountability for
--provide for presidential oversight of the regulatory process;
--minimize duplication and conflict of regulations; and
--ensure well-reasoned regulations.
In practice, DOI misuses this tool, ignoring its intended purpose and using it as a place to list every conceivable rule that the department might publish. When used in this manner, the agenda provides little information on actual departmental priorities. Use of the agenda can be vastly improved.
There must also be a clear and well-defined process for developing regulations and obtaining approval for their release. In many cases, rulemakings have been delayed because:
--interested bureaus become involved late in the process, forcing reconsideration of issues previously resolved;
--confusion exists over which bureaus must approve rulemakings before they are released; and
--deadlines for completion of various phases of the rulemaking process either do not exist or are not enforced.
--agree upon a conceptual framework
identifying networks, common data bases (e.g., payroll), and a network architecture;
--establish ways to share data across bureaus;
--require data centers to use compatible communications software;
--require bureaus to optimize communications capacity (e.g., T-1 circuit bandwidth and videoconferencing room time);
--shift to Government Open Systems'
--standardize imaging systems across the department for transmission of financial data, land records, rules and regulations, library material, and basic review documents to reduce paperwork in the workplace; and
--standardize telephone system capability across bureaus to provide timesaving components and to improve quality of direct communication.
2. DOI should ensure that its data network initiatives all tie into a departmental data network.
DOI data network initiatives are the Secretary's electronic mail project, Local Area Network Administrator's Group, and the Data Networking Task Group. In addition there are a number of bureau initiatives which provide further capability for an agencywide network. These include:
--the National Park Service (NPS) ParkNet Telecommunications Network;
--U.S. Fish and Wildlife Wetlands Mapping program;
--Bureau of Land Management's (BLM) Automated Land and Mineral Records System;
--Office of Surface Mining Technical
Information Processing System;
--Minerals Management Service's (MMS) Technical Information Management Program;
--U.S. Geological Survey's (USGS) Advanced Cartographic Systems program;
--Bureau of Mines Minerals Availability System; and
--use of Geographic Information Systems by Bureau of Indian Affairs, NPS, BLM, MMS, and USGS.
3. DOI should establish a council to review all internal, self-imposed procurement regulations, eliminate as many of them as possible, evaluate any requests by individual departmental agencies/bureaus to retain specific rules, and determine the advisability of rescinding the authority of agencies/bureaus to issue restrictive supplements to federal acquisition guidelines.
To expedite the council's work, all of DOI's existing internal regulations should expire at the end of fiscal year 1994. In addition, the department should work with Office of Management and Budget, the General Accounting Office, and the Office of the Inspector General to ensure that these organizations do not encourage self-imposed rules in their circulars or audit reports.
4. To guarantee the compatibility of its financial and acquisition systems, DOI should make FFS interface capacity a top priority in the development of DOI's Electronic Acquisition System.
5. DOI should develop and implement a strategic plan for making the FFS readily available to field users through alternative system environments such as minicomputers and local area networks.
6. DOI should expand the remote access and data entry capabilities of FFS users to certify payments and streamline payment processing by implementing Treasury's Vendor Express Program (Electronic Payment System) and Electronic Certification System.
Implementation of the Treasury systems will result in direct wiring of payments to employees and outside customers and electronic certification of payments, eliminating preparation of hard-copy payment schedules and reentering of data into Treasury's online payment system.
7. DOI should streamline the processing of bills by establishing a separate appropriation account within the department to pay common costs rather than issuing separate billings to each bureau.
A single appropriation account would simplify the administrative process and result in a more timely recording of charges.
8. DOI should take measures to revise existing correspondence guidelines and reduce excessive and unnecessary review of correspondence.
This should include defining the purpose and scope of policy and legal clearance and delegating signatory authority to the lowest appropriate organizational level.
9. DOI should use its semiannual regulatory agenda to establish dates for formulation and publication of rules that can be achieved within agency resource constraints.
These dates should be commitments that are kept by the bureau developing the rule. The agenda should reflect major priorities and concerns requiring interagency coordination.
10. DOI should identify all parties that may be interested in a rulemaking and involve them early in the process.
DOI's Office of Regulatory Affairs has developed a flow chart of the steps and timeframes involved in the regulatory review and approval process and a regulatory alert system to provide departmentwide notice of all intended rulemakings. DOI should use this system to identify interested parties and encourage them to participate in the process during the initial stages of regulatory development.
Streamlining these management functions should generate some immediate dollar savings in procurement and financial management and vastly increase confidence in the department's administrative processes. Removing unnecessary obstacles should play an integral role in shaping a more flexible DOI for the coming century.
Implementation of a departmentwide telecommunications network will result in management efficiency improvements throughout the department. A telecommunications network will reduce time delays in reviews, enable information to more easily reach its target audience, and expedite information sharing. Aggressively reducing acquisition regulations, both federal and self-imposed, would decrease data entry errors, increase the quality of purchases, quicken payment to vendors, and free substantial work hours by eliminating manual, labor-intensive tasks.
Streamlining management support functions at DOI will free up resources for other needed services. Implementing these recommendations should lead to more efficient use of the department's resources and could yield long-term cost savings of over $25 million.