ADMINISTRATIVE NOTES Newsletter of the Federal Depository Library Program Vol. 18, no. 04 GP 3.16/3-2:18/04 February 28, 1997 MICHAEL F. DIMARIO PUBLIC PRINTER PREPARED STATEMENT BEFORE THE SUBCOMMITTEE ON LEGISLATIVE APPROPRIATIONS COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ON APPROPRIATIONS ESTIMATES FOR FISCAL YEAR 1998 February 11, 1997 GPO REVOLVING FUND GPO's revolving fund, established by section 309 of Title 44, is authorized on an annual basis. It requires that the revolving fund be reimbursed for the cost of all services and supplies furnished. Appropriations are not usually requested for the fund because the fund is designed to recover costs through offsetting collections for services provided. Revenue is received from Government agencies for printing procurement, printing production, publications distribution services performed for agencies, and from the public from the sale of Government publications. Current Financial Condition Despite improved financial performance in FY 1995, during FY 1996 GPO's revolving fund sustained operating losses totaling $16.9 million, or 2 percent of total revenues. While our costs declined substantially, revenues dropped faster. Compared to FY 1995, expenses were reduced by $20.2 million. Revenues, however, fell by $34.1 million, due to workload reductions in in-plant and procured printing as well as a decline in sales of publications. Total revenues from plant printing operations fell $7.5 million compared to FY 1995, due in part to a lighter-than-anticipated congressional workload, and to printing rates maintained at 1990 levels through April 1996. In the Superintendent of Documents sales program, revenues declined $9.6 million due to a variety of factors. A shutdown of the program in November 1995 during the first Government-wide budget shutdown and four snow days in January, during which all Washington, DC, area Government operations were shut down (including the mail order operation in Laurel, MD), contributed to revenue losses. Apparently, GPO's sales suffered as part of a public perception that we were closed during the second, longer Government wide-budget shutdown earlier this year. The growing availability of free electronic formats on the Internet, such as the Federal Register, may also be contributing to reduced sales. Although printing procurement operations were relatively stable through April 1996, the delayed resolution of budget talks between Congress and the Administration (which kept many of GPO's customer agencies on short-term continuing resolutions providing funding at 75 percent of FY 1995 allocations for the first half of the fiscal year) affected procurement revenues. We are also contending with growing noncompliance by several executive branch agencies, particularly the Department of Commerce, with Title 44 requirements to print and distribute publications through GPO. In view of these developments, we worked with the Joint Committee on Printing to resolve GPO's need to fully comply with 44 U.S.C. 309 in the setting of printing rates that fully recover our costs. As a result, last year we made the first adjustment to GPO's scale of prices for printing products since 1990. At the request of the Chairman of the Joint Committee on Printing, we proposed a number of actions aimed at downsizing the workforce, consolidating space and functions, and improving efficiency and service to customers. In addition, last year, it was necessary to adjust obligations for the Congressional Printing and Binding Appropriation due to material variances between plant rates and actual cost for the first seven months of the fiscal year. Billing data was used for this purpose. Reimbursement for Prior Year Obligations During FY 1994 and FY 1995, Congressional Printing and Binding Appropriation accounts incurred costs which significantly exceeded reimbursements to the revolving fund. The outstanding obligations have been estimated by allocating the under-recovery of plant cost, which totaled $28.4 million for FY 1994 and FY 1995 combined, by the distribution of total plant billings during this period. This analysis supports transferring about $11.5 million in unexpended obligations to the revolving fund from the Congressional Printing and Binding Appropriation accounts in which the obligations were established. Otherwise, GPO would have to de-obligate these amounts instead of using them for the purposes for which Congress made the appropriations. This analysis is similar to the $6.2 million in various Congressional Printing and Binding Appropriation accounts that was reimbursed to the revolving fund in FY 1996 based on the under-recovered plant cost through the first 7 months of the year, prior to adjusting the scale of prices in May 1996 following direction by the Chairman of the Joint Committee on Printing to fully comply with 44 U.S.C. 309. A similar analysis of the Salaries and Expenses Appropriation accounts for FY 1994-96 supports additional transfers to the revolving fund totaling approximately $1.3 million. This would bring the total additional reimbursements for prior year obligations to about $12.8 million. Fluctuating workload volume combined with GPO's fixed rates can cause revenue from in-plant operations to vary widely. In contrast, our costs are relatively fixed in the short run. This can result in periods of substantial loss or gain to the revolving fund. It is necessary to maintain a core capacity to meet workload demands. In order to provide for reimbursement of GPO's costs during periods of unusually low workload volume, it may become necessary to adjust obligations to full cost. Staffing Levels At the end of 1976, GPO had 8,226 employees on board. Now, 20 years later, we have 3,674 employees on board. This is a reduction of 4,552 employees, or 55.3 percent. GPO employment has declined by 25 percent since the end of FY 1992; the reduction has been among Senior Level Service managers, supervisors, and employees alike. These reductions were accomplished while at the same time modernizing and improving our services. GPO's full-time equivalents (FTE's) totaled 3,820 for FY 1996, a reduction of 309, or 7.5 percent, from FY 1995. We are projecting continued reductions in employment levels, but at a lower rate as we approach critical staffing levels for essential services. Our FTE's are projected at 3,676 for FY 1997 and 3,575 for FY 1998, a reduction of 245 FTE's over the 2-year period. GPO is the only legislative branch agency with an FTE limitation in its appropriations language. For the past 2 years, that limitation has been stated in terms of an end-of-the-year reference point, or target rate of usage. This has allowed us to achieve the necessary reductions gradually and primarily through attrition during the year. We have partially frozen hiring, made early retirement offers, and closed 5 regional printing offices to help achieve significant mandated reductions. Further reductions of this size, however, will begin to impact critical staffing levels for essential services. The end-of-the-year rate of usage for FY 1996 was 3,716. Targets for FY 1997 and FY 1998 are 3,600 and 3,550, respectively. With these targets, GPO will have the lowest employment rate in this century, but will be able to continue to provide essential services and achieve savings.